Landfill Manager’s Notebook: So You Think You’re $aving With That Old Iron—Think Again

There’s no sense whipping a dead horse. And when it comes to landfill equipment, there comes a time when it doesn’t pay to hold onto that old machine.

Yeah, I know. You’ve had that old dozer since she was new. What’s more, when repairs are needed (an event becoming more and more frequent), you know just how to fix it. Of course, after 27 years you should know.

“But it’s so simple,” you say. “There are no circuit boards, no electronics, no joysticks.” But on the other hand there are no parts, no horsepower, and no relief from downtime either. It’s time to face the truth: That tired old machine is done for.

When I graduated from high school in Grangeville, ID, there was an old-timer living there called Buckskin Billy. He was the last of the Mountain Men. A mechanical engineer by training, he’d left the corporate life to live alone in a remote cabin on the Salmon River. He’d walk to town once in a while (it was 90 mi.) to visit the library. He built his own house, grew his own food. He even built his own rifle with homemade tools. He was adept at making do with the old-fashioned, simple ways. It worked for him. But then again, he never had to comply with Subtitle D or compete with a big corporate landfill just up the road.

If you want simplicity, go skin an elk. If you want to compete in the landfill business, you need machines that can do the job.

If you’re questioning the wisdom of keeping an old machine, here are some things to think about.

Old Machines Are Less Productive

Equipment manufacturers are continually applying new ideas and new technology to develop machines that are smarter, more powerful, more efficient, and more productive. For example, according to the Caterpillar Performance Handbook (No. 28), a D8H 46A dozer, manufactured from 1958 to 1974, weighed approximately 48,000 pounds and had 270 hp. In 1997, however, a D8R weighed nearly 82,000 lb. and had 305 hp.

Of course, not just weight and horsepower have changed. Advances in fuel efficiency, hydraulics, drive-train components, ease of repair, and operator comfort have all worked to make new machines more productive. As close as I can tell, machine production increases approximately 1% per year.

In a fair comparison, your old machine simply can’t compete with a new model in terms of raw production.

“But there’s more to it than production,” you say. You bet there is. Cost is another important factor.

Cost Considerations

It’s a fact that buying a new machine is expensive. And between taxes, depreciation, and dealer markup, buying a new machine every year or two doesn’t make sense. If you want to keep your costs down, you must keep a machine long enough to get the good out of it.

There are many things that make up a machine’s cost. These include depreciation, amortization of capital costs, repair costs, downtime costs, production costs, and salvage value. If you combined all of these, you’d find that machine costs will decrease over the first few years as the purchase cost is amortized over more hours.

Eventually, however, purchase cost will become less significant, and the other costs (i.e., repair, downtime, production, etc.) become more dominant. At that point, the machine’s hourly cost will begin to increase. Finally, at some point along the line of increasing costs, it will be cheaper to buy a new machine and start the whole process again.

But hourly cost isn’t always the deciding factor in whether or not you should replace a machine. You must also consider how vital that particular machine is to your operation. Is it a primary machine that you can’t do without? Or is it a secondary or “support” machine that you use only occasionally?

Cost Per Hour Vs. Total Cost

A front-line machine (e.g., a compactor or dozer) will often work 2,000 hours per year. Thus, if you can save $5 per hour by purchasing a new machine, get the new one. In the long run, you’ll save $10,000 per year.

If we’re talking about a backhoe that you use only 40 hours per year for ditch-cleaning, however, you’ve got to be careful about comparing old to new. You must consider that, at 40 hr./yr., it will take decades to amortize the new machine’s purchase price. In this case, keeping the old machine, even if its hourly cost is higher, might still be cheaper when you consider the total cost.

Another option here might be to just sell the old backhoe and rent a (newer) machine on an as-needed basis. That way you get the benefits of using a new machine without the overhead and headache of keeping an old machine working.

It’s Your Choice

Finally, keep in mind that if you’re the boss, it’s your choice. Yes, I know that many of you work at landfills that are owned/operated by large corporations or municipalities, and you’ve got to back up your decisions with facts and figures. But there are still many landfills that are more, shall we say, “independent.” Typically these are small, rural landfills. Often they’re run by people who are used to making do on whatever is on hand. For these folks, rebuilding a machine (over and over) might be a fulfilling and justifiable part of their job. In those situations, the decision is less one of production or cost than it is of personal choice.

Some of us rebuild old cars, others refinish old furniture. If your thing is rebuilding old tractors-and your landfill isn’t going broke doing it—good for you.

All things considered, it isn’t necessarily wrong to keep an old machine. Just don’t be fooled into thinking that older is always cheaper.