The Art of the Repo

As more information comes forward regarding the Russian airplane repossession debacle, I thought it was a good idea to do a follow up article. I have rewritten this several times as I spoke to and heard from and about more people and banks involved with this. Seeing what those involved commented and seeing banks involved reacting seems more like trying to cover for their performance. This debacle is worse than we originally thought and continues to be adjusted making it worse. Let us take a look at what went wrong and how the results could have been significantly more profitable.

The purpose of this article is not to promote how good we are at IRG. I have always been a huge fan of Michael Jordan and the one thing I always appreciate about Jordan is his refusal to say where he stands in the list of greatest players. He says that it is for others to do. Compare that to Lebron James who swears winning one series makes him the greatest ever and he will tell you so. The point of this is not to tell you how great we are. It really is to explain how complex these repo missions are.?Once you understand the level of complexity, then we can ask how this went so wrong so fast.?

In the State of Florida, I need a repossession license to repossess in the state. My company also needs to be licensed as a repossession agency to be able to "hire" me as a repo agent. My company has been licensed since 2005 and so has Bob Weeks, my business partner, and I. We have also listed several other licensed agents under our agency license over the years. In order to get licensed there are several things that you must do, including taking 40 hours of classroom time. Once that is complete than you must pass the state test. Once you successfully pass the test, you are now a licensed INTERN only. This means you now must be sponsored by a licensed agent and under a licensed agency for one year. During this time an intern cannot repossess on their own. They must have a licensed agent with them every time. The process to get licensed is fairly difficult. It should not be neglected or minimized.

Many have asked why Florida makes it so difficult to become licensed. As someone who will still watch an old episode of "Miami Vice" from time to time (Ed O'Neill from Modern Family is a bad guy in one episode...who knew?), it makes some sense. Although that show was about 2 police officers, you get a sense for how crazy Miami was at the time. The repo world was nearly as crazy and there were mounting injuries in repos as a result of rogue repo men who thought they were Don Johnson. As a result, the state decided to require licenses to repossess in the state. Further, because the rules in Florida were so stringent, Florida decided not to recognize out of state licenses in their state. The great thing for me is my license works in 49 states (California does not accept our licenses), but none of those states work in Florida. It is an advantage to be sure.

Florida has done a great job of regulating this industry and ensuring that the repos are done in a safe and fair manner. With Florida consistently being one of the top 2 states for repossessions it makes sense. What they did a few years ago however, was tremendous. Florida decided that all repossessions - even voluntary surrenders when the owner turns the asset over to the bank - must be done by a licensed repo agent. This is great because they saw the voluntaries being done through coercion or threats to allow the lenders to avoid the repo man. Florida stepped in and said no. What this means is any lender still accepting voluntary surrenders without a license is completing an illegal repo. They take it that seriously. They take the license that seriously and they take the expertise we provide that seriously.

The reason these states with higher repo numbers require licensing is because this business is more difficult and requires more knowledge and skill than some want to admit. Since I have been on "Airplane Repo" I have heard from so many people that tell me I am doing something wrong. They swear they could do a better job than me, despite only seeing 14 minutes of a 5-day case. I cannot blame them. My wife and I saw an airplane repo in the summer of 2005 that cleared the way for me to buy this business with Bob. Little did I know, I saw 3 minutes of the repo and missed much of what was done. So, I fell for the same trap many others do. The truth is, this job is difficult. There are many complexities and factors that we must consider on the fly. It is, in many ways, an art.

This brings me to the Russian debacle. I am now seeing that the number of airplanes to get picked up exceeds 750. To date approximately 24 have been secured. Of those 24, I have had it confirmed that most of them were voluntarily turned over to the pilots that were trying to repossess them. In reality, fewer than 10 were actually repossessed and one person involved said the number is ONE. Think about that for a second. One airplane repossessed out of 750. Further, consider on average the value given to each aircraft is nearly $2,000,000. With values like that, it isn't hard to help the lender be more profitable. So, what is the reason for the low numbers??Well for some reason, the assignors of the repos decided to hire people that have not done repos before, much less difficult and complex ones. ?It has led to a monumental loss and damage to the industry.??

I had an interaction with a person involved in the repos and found it to be similar to the social media "battles" people try to engage in. You have seen it over and again with Covid and now with Ukraine. People who have little knowledge of the subject matter and have done little to no reading to learn, are often the most outspoken. This person who was involved in the Russian crisis explained all of the obstacles that the pilots had to overcome in order to get these airplanes. He listed them as though they were unique. Insurmountable. I calmly explained that what he sees as insurmountable, we see as another day in the office. We have repossessed from Cuba, China, the Middle East and more. They have not repossessed from Alabama. The experience is the key. This is very much like an accountant being hired to do heart surgery and telling the heart surgeon why the operation was so difficult.?What is difficult for the accountant would be standard operating procedure for the surgeon.??

Every time Airplane Repo is aired, I hear from 1 or 2 people that I am not a real repo man because I am not a pilot.?My standard answer has always been do you say the same thing to the Doctor because he didn’t drive the ambulance over??Of course not. ?They are distinctly different jobs requiring distinctly different skills and training.?The same is true for us.?The repo man does the repo and the pilot ferries the airplane after the repo.?I have met several pilots that are excellent at moving repossessed airplanes, whether on the ground or in the air.?I have yet to work with a pilot that is a good repo man or even wants to be one.?

The most important thing to remember is everyone has a role and a strength. I am not a pilot, so would never consider trying to fly my repos to make more money. I respect the time, effort and money spent learning how to do that and do it well. The same respect should be given to repo men. The reputation of the repo man is one I have laughed about and discussed on news pieces for years. The pony tail, torn jeans, cowboy boots...it is the stereotype. Some people believe there is no sophistication or nuance to what we do. They do not realize how much "art" is involved to get an airplane from an international airport without the debtor, his staff, his friends or his team knowing. Some think because they can fly a plane or sell a yacht, they are automatically qualified to repossess. They could not be more wrong and, sadly, as a result of this attitude, banks and lenders are out BILLIONS.

The takeaway from this article should be always hire professionals to do difficult jobs. Will it cost more? Possibly. But when you consider the total cost, probably not. Consider this...if we repossessed twice as many airplanes (2), and we charged $1 million to do so (which we do not), based on the average value the lender would make $1 million on the deal.?By hiring experienced professionals, the lender would have netted MILLIONS more in the total deal. We know when we avoid using professionals, it usually turns out poorly. When considering the failures here, we really need to ask why did these companies choose to use pilots instead of repo men? Only they can answer. What we do know is the result was completely predictable. This did not have to happen like this. Hopefully going forward, these lenders will require licenses.?They will require experience with a minimum 1,500 repossessions completed or something like that.?They will require extensive time working with and for government entities in the US and abroad.?They will require professionals to do these incredibly difficult and complex jobs. If not, the results are bound to be the same.