Skylyne Machine closing its doors after nearly 45 years in business
Drying up of oil field business pushes 71-year-old owner to next phase of career
The all-american dream is owning one’s own business. Once you’re up and running, weather a shaky start-up, establish a customer base and then you make your fortune, right?
Ask Bill Henry about that.
Henry, owner of Skylyne Machine in Sterling, is getting out. He’s owned his own business, either by himself or with partners, since 1975 and until the collapse of the U.S. oil industry in 2016, his company was earning as much as $350,000 a month, with most of that going back into the local economy. Property tax on his machinery alone fed $10,000 a month into state and local government coffers. His employees made between $15 and $18 an hour plus benefits.
All of that goes away this week when Automatics and Machinery Co. of Longmont sells several million dollars’ worth of machinery, equipment and parts, and Henry closes Skylyne’s doors forever.
That Skylyne was able to thrive at all is a testament to Henry’ s persistence and hard work, since half of the company’s business has been based on the oil industry. Oil production in northeast Colorado was already declining when Henry and Allen Luft started Luft Machine Shop in 1975. A welder by trade, Henry had previously worked for
Farley’s Machine Works in Sterling where he learned how to work on oilfield pumping units. When he and Luft partnered, Luft brought in agriculture work, and Henry brought in oilfield work.
Henry bought Luft’s portion of the business shortly thereafter and renamed the company Skylyne. He was soon running two shifts of 15 men each out of a building on Phelps Street. Henr y created a niche for his shop when he realized that the replacement of worn or broken bearings on an oil pump could cause long periods of down time as the bearings were sent to a machine shop for refurbishment. He began to visit machinery auctions and bought used and obsolete bearings, brought them back to Sterling and refurbished them. Calling them “exchange bearings,” he then offered them for sale to oil companies, who could quickly switch out the refurbished bearings for the old ones and have the unit back up and running in a fraction of the time.
In time Skylyne added a repair shop for the pumping unit engines to offer immediate replacement engines. The shop was expanded to include radiators, heads, carburetors, fans and other parts.
In the early 1980s Big Oil decided Colorado’s oil patch was dr ying up and left Denver, taking much of Skylyne’s business with it. What was left were called “stripper wells,” oil wells that produce 10-15 barrels per day or less for any twelve-month period. According to industry sources, stripper wells are “marginally profitable” and produce about 11 percent of the crude oil in the U.S.
To weather the downturn Henry turned to his friend, Jerry Wisdom, who subcontracted fabrication of carnival ride par ts to Skylyne.
“Jerry Wisdom kept me alive during that time,” Henr y said.
To augment the declining oil side of the business, Henry began to invest in Computerized Numeric Controlled lathes, mills, and other equipment. CNC uses computer programming to instruct an automated milling machine how to turn out a part. While there was more than adequate demand for the work, however, recruiting CNC supervisors was a never-ending task.
“It always came down to (the fact that) they didn’t like Sterling, or rather, their wives didn’t like Sterling,” he said. “We went through about one a year.”
Over time Henry learned how to run the machines and CNC bolstered the oil field work.
Then, a little over a year ago, the Colorado legislature tore apar t the Colorado Oil and Gas Conservation Commission and rebuilt it with a new mission: instead of fostering oil and gas exploration the COGCC would regulate it. Along with the restructuring came new setbacks for oil drilling operations, setbacks that had already been rejected by Colorado voters in 2018.
With the new regulations, even the stripper well operators threw up their hands and quit pumping. They had more profitable wells in states with less stringent regulations.
That’s when Bill Henry threw in the proverbial towel. Skylyne had weathered downturns and economic roller coasters; it had diversified, innovated and resized itself as long as it could, but without the oil field business, the CNC side of the company couldn’t go it alone.
If Skylyne is going away, however, Bill Henry is not. Looking far younger than his 71 years, the energetic Henry intends to manufacture and market an invention that knocks wrist pins out of oil pumps. The wrist pin attaches the fork-like equalizer to the pump crank, and replacing the wrist pins involves a 20pound sledge hammer, patience and lots of muscle. It’s an arduous and often dangerous task that requires climbing up on the pump and working in an area chillingly called the “kill zone,” and can take hours or even days.
Henry’s invention, which attaches to the wrist pin’s housing, is called The Cannon, and it uses air pressure to hammer the wrist pin free while the operator stands safely on the ground.
The par ts will be manufactured by subcontractors in Colorado, Henry said, but assembly will be done in Sterling.
Meanwhile, the sale of Skylyne assets goes on.