Category Archives: Featured

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32 Pounds Ago

By Lloyd Graff

I have lost 32 pounds over the last four months, and I am stunned. It has not been that hard to do once I decided it was something I truly wanted to do.

Tony Robins says the “WHY” question is the most important, and I agree. If you ask yourself, “why do I want to lose weight?” and you answer, “I want to feel better and live longer,” the how will make itself apparent. In my case the why and how questions became salient during a doctor’s visit in which my blood pressure reading was on the wrong side of 160 and my weight was crowding 270. My doctor Scott Stern at the University of Chicago asked me if I was serious about losing weight. I nodded yes, and this time I actually meant it.

He said, “Lloyd, I’m going to recommend a book to you, Always Hungry? by Daniel Ludwig.” He said he had read it himself and learned a lot of new things.

I listened to some of the book on audio then bought the hardcover, really figuring deep in my oversized gut it would be another one that would soon be forgotten on the shelf.

But it wasn’t forgotten, because Ludwig’s basic premise was so counterintuitive that I was attracted to it, particularly with Dr. Stern’s endorsement.

The gist of Dr. Daniel Ludwig’s thesis, based on a scholar’s storehouse of research is that you need to stop eating refined processed foods, sugary sweets, simple carbs like white potatoes, wheat and corn and replace them with fruits and vegetables, protein and FAT. Yes, FAT. In fact, fat is really the secret to making this eating regimen work, because replacing the sugars, processed foods and simple carbs with fat and protein like yogurt, cheese, eggs and meat reduces your cravings for the bad stuff. It also ends the insulin spikes that are one of the main reasons we have an epidemic of diabetes and obesity in America.

I am not a diabetic, but my father and his siblings were, as were both of his parents. I have always feared becoming diabetic, having seen so much of it growing up.

For me, Ludwig’s regimen was rather simple. Breakfast became eggs, berries, whole fat yogurt and grapefruit. No juice, no cereal, no bananas (too sugary) no sugar in the coffee, no BREAD. The no bread rule was the only one that bothered me a little at the beginning, but when I saw the pounds melting off quickly, I easily made my peace with it.

Lunch was a salad with a dressing, sometimes with meat or eggs added, never a sandwich. Another option was soup or meat leftovers from dinner.

Dinner was normally meat, chicken or fish with some kind of fat with it, plus a vegetable like broccoli, cauliflower or beans. Never potatoes.

Snacks during the afternoon now have become mainly almonds, which I like to toast, or sometimes pecans or walnuts. Occasionally I’ll eat a big scoop of peanut butter with no sugar added. I like Sweet Ella’s by Koeze of Grand Rapids.

For sweetness breaks, I favor berries and dark chocolate, at least 70% cacao. There is not much sugar in one quarter of a big Lindt chocolate bar.

In the first month I lost 10 pounds. I was down almost 20 in two. Four months later I was down 32 pounds and needed to buy new pants and belts.

I have not significantly changed my exercise routine, but everything is easier now. My blood numbers are all good, mild arthritis has improved in my hands and knees and interestingly, shoes and socks fit better because my legs and feet don’t swell.

During these past four months I have totally ignored calorie counting. It is just not an issue if I don’t eat sugars and simple carbs in significant quantities.

The new eating habits have not been difficult to develop once I understood that cookies and toast and fries were killing me. My goal had been to get down to my weight when I left the hospital after my heart attack nine and a half years ago.

Frankly, I never expected to get anywhere close to the 30-pound loss level. Yet, to my amazement, I reached it in 11 weeks.

How did I celebrate it?

Strawberries dipped in dark chocolate was just perfect.

Question: Do you trust your doctor?

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All the Wrong Places

By Lloyd Graff

The conventional wisdom is that “I need employees, but I can’t find them.”

This seems odd to me. I’ve been hearing the same lament for so many years and it still does not ring true. In a workforce of 161 million people in the U.S. with millions of ambitious, bright, stable people there are always going to be folks who want to make a change to improve their lot.

Allow me to throw out a few ideas that may kindle a new approach to finding productive employees or fresh employment opportunities.

  1. Stop looking in all the old familiar places. Don’t be so linear. There are white collar people, maybe even in your own company who would rather be in the plant, actually involved in making things directly. Have you asked around lately? We recently hired a person who had been repairing cell phones at a Batteries Plus shop. Met him while we needed an emergency repair on an iPhone. He had been a computer science major who dropped out after 2.5 years because of money woes. He impressed me with his intensity and conscientiousness and I left him my card as I left. He called to ask or an interview shortly afterwards and I hired him. He says there are other talented mechanical people in their shops who would readily leave for an opportunity to better themselves. He was making $15 an hour.
  2. Use social media to prospect for people who are in your circle of acquaintances or who might be connected to others in your chain of “friends.” Facebook, LinkedIn, etc. are enormously useful in extending reach to “non-linear” people who would never have reached your glimpse. Graff-Pinkert recently hired somebody who had just been laid off after 20 years with a company. His wife saw a brief notice in a local web page mainly aimed at local babysitters and gardeners. He was a bit shell-shocked about losing his job, but his wife knew us through her administrative job and it led to a fortuitous hire for both of us. He has been a great find. Social media is enormously powerful because it circumvents the usual employment matchup services with a much more creative searching technique, “the grapevine.”
  3. Forget about “the drug test.” How often have I heard the lament, “we can’t find anybody who can pass the drug test.” Maybe I’m naïve, but marijuana usage does not mean somebody should be blackballed out of hand. A more serious drug problem will become fairly obvious in an interview or, worst case, soon after hiring. Amazon is hiring tens of thousands of people these days. I am sure some are people who might not pass a strict drug test. They wash them out quickly if they can’t do their arduous job. If they can do the job they don’t really care what they do at home. Do you drug test all of your current employees, randomly?
  4. Don’t be a slave to the company pay scale. Talent is always a valuable commodity. Ask yourself if you are hiring, how much incremental value to the firm could a particular person add to the company. If the person would allow an extra $250,000 in annual revenue and would cost $60,000 it would make sense to hire her, even if the prevailing wage was $50,000. I think we get hung up on cost rather than value. I know there are few secrets at a company and jealousies can be a problem, but so is lost opportunity.
  5. If you are the boss and you realize you made a bad hire, fire the mistake quickly.

Question: What creative hiring ideas do you have?

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By Lloyd Graff

Making sense about the economy today. As I travel the 15 minutes from my home to work I see four vacant strip malls. Maybe a restaurant still survives and a dry cleaner, but mostly I see vacant space, empty parking lots and for rent signs. Retail is dying out in my area of Chicago suburbia.

It appears the space will be empty indefinitely as Amazon remakes retail. Food delivery will expand as people get used to ordering their asparagus from photos. Prepared food will continue to grow in popularity from restaurants and specialty retail shops.

There is an opportunity for independent food outlets who know their niche and can execute because supermarkets generally cannot manufacture palatable prepared food. The sterility of most supermarkets gives Amazon an enormous opportunity to use Whole Foods to remake the space, but early returns indicate that they are in the learning stages. I used to love to peruse a good supermarket, but today I hate them. They deserve to struggle against restaurants and specialty shops until they become competitive.

Demolition of Lincoln Mall in Matteson IL.

Will the empty malls find an economic purpose? The only category with traction today appears to be restaurants, primarily fast food. They do not require huge square footage and parking.

When the financial entities blessed with these properties finally are forced to pay their taxes and utilities, the grass starts growing in the parking spaces, vagrants occupy the store aisles and lawyers are no longer being paid to try to collect rents from defunct businesses we will see some movement. There will be demolitions if people will pay for the wrecking balls. If towns had the money they could make appealing parks and public spaces, but generally they don’t have funds today. It looks like suburb rot for the next decade to me.


The Fed is pushing rates up because that’s what the playbook says it should do. It makes sense if you are a central banker with degrees in economic orthodoxy, but I ask, why try to raise rates when there is little inflation except in real estate in a few cities on both coasts and in affluent caucasian enclaves? The American economy has struggled for a decade. Middle and lower income people have lost ground, school debt is a crushing problem and healthcare is a disorganized mess that most people struggle to finesse. Manufacturing here is finally competitive worldwide after two decades of shrinkage. The stock market is probably in the latter stages of the “Trump Bump.” American education is less favorable to the lower and middle incomes than 20 years ago, and the gap between elite and average schooling seems to be expanding. I think a few more years of relaxed interest rates would be helpful for the bulk of the population who do not rely on interest for its wellbeing.

Fortunately, money still likes to buy American issued debt as the Fed struggles to strangle us with high rates.


The tax bill passed in December is a mishmash of restructuring, but the bottom line is that it will help most people in America. The Nervous Nellies and Sourpuss Democrats shriek about it, mainly because they are supposed to hate it, but it has a lot of goodies to be sprinkled into the economy. The question that does remain is whether the increased deficit will be difficult to borrow money for. Early indications are that it will be easily digested by the enormous American economy, which is growing at almost 3%. A big hiccup like 2008-2009 coupled with the stupidity of Wall Street gamblers could upset the apple cart. That’s why you keep money in the cookie jar.

My belief is that the best hedge against a recession and inflation is creativity, risk taking mentality, and optimism. I’ve been observing markets, the economy and happiness for a long time, and following the crowds is usually a good way to lose. Listen to your gut and then pursue something else because your gut is always chicken.

Question: How often do you eat a homemade dinner?

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Where Did My Day Go?

By Noah Graff

Lloyd and Noah Graff are on vacation this week. Here is a favorite Swarfblog from July 10, 2015.

Americans on average spend 7.4 hours staring at a screen of some kind every day, according to Kleiner Perkins analyst Mary Meeker. That breaks down to 147 minutes watching TV, 103 minutes in front of a computer, 151 minutes in front of a smart phone and 43 minutes in front of a tablet. The U.S. is ranked 6th in world in screen time consumption—Indonesia and the Philippines are at the top of the list.

I’m sure I spend at least an average of 7.4 hours of screen time daily, and I don’t even own a TV. Working a salaried office job, I have a computer screen in front of me most of my day. Fortunately as a machinery dealer, I get to spend time in my day in the shop amongst folks doing physical labor.

When I’m not in the office, I’m often on my iPhone 6 Plus, surfing the Web, perusing Facebook, and incessantly checking my three email addresses (two for work, one personal). I have refused to download any mobile game apps, as I am already way too distractible. Following work, I spend the next few hours commuting, then working out in some form, and then eating. After dinner I often get back on the Web with my laptop or phone, sparingly streaming a sporting event, a Netflix show or The Daily Show. I also may write the occasional blog for Today’s Machining World or edit a movie—more screen time and more screen time. Not having a TV helps me cut down a little on the screen time, but as you can tell, I still can’t escape the screens.

I’m bothered by all the screen time. I don’t think it’s healthy. It’s not natural. I think it’s really sad when you’re at dinner and people can’t stop looking at their phones, even during a conversation. Remember the days when people could debate a subject at dinner and not instantly settle their dispute by googling the answer? Remember when you had to consult an expert or even go to the library the next day to resolve your question?

The constant email checking is definitely one of the most significant effects of smart phones on me. It means that for me and millions of folks around the world our jobs follow us EVERYWHERE all the time. I accept this as an essential reality of my job as a machinery dealer. Often the most important emails or calls come from Europe or who knows where at 6:00 a.m., interrupting my normal slumber before my usual 7:45 a.m. alarm time—I know, that’s late for most people in the manufacturing biz. I hate to say it, but often when my iPhone alarm goes off in the morning I get myself going by checking my work email as I still lie under the covers.

Noah Graff’s iPhone 6 Plus that follows him everywhere.

Also, I often find myself texting or talking about business with my dad/boss on the phone several nights during the week, and he texts me in the morning before my alarm goes off as well. I don’t mind it—usually. If we are talking about something business related in after hours it often means something interesting is happening, generally something more positive than negative. If it’s negative I usually will tell him we should deal with it the next day.

I’m on salary, so this is the routine I signed up for. But for people who get paid by the hour smart phones complicate things. When does writing emails on your phone after work constitute overtime? When does it just mean being a responsible employee?

If we are all working from everywhere, all the time, does the traditional vacation format of a set number of days become obsolete? Netflix began giving employees as many vacation days as they wanted back in 2002. Today 1% of American companies offer unlimited vacation. Believe it or not, many employees don’t like “unlimited vacation time” or they end up taking less vacation because of the privilege. People become overwhelmed by the choice of how much time to take off, causing them to feel indecisive and take less vacation. Also, some employees may feel guilty or self-conscious if they take more vacation than their peers.

People have been working “overtime” from home for decades, centuries probably. But today we have those damn smart phones. Those damn beautiful, powerful, multipurpose devices that fit in our pockets. Are they enslaving us? Are we really better off with them?

Question 1: Do you prefer living in a world in which we all have smart phones?

Question 2: Do you wish you could choose how much vacation time you receive in your job?

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Phone Call to the Dead

By Lloyd Graff

Lloyd and Noah Graff are on vacation this week. Here is a favorite Swarfblog from the archive.

Phone Call to the Dead
September 29, 2016

This American Life on NPR routinely does amazing stories on radio. The program, hosted by Ira Glass, recently had this piece that really struck me.

In 2010 a man named Itaru from the town of Otsuchi, Japan, was having a hard time dealing with the loss of his cousin. He decided to install a phone booth with an old rotary dial phone on the grass in his backyard where he could go to communicate with his dead cousin. Most Japanese are Buddhist and generally believe that when people die they don’t instantly get to go to heaven and leave all of their earthly concerns behind. They believe that the dead can see suffering of the family members who are still living and they can be caught in a state of limbo in-between life and death. Itaru’s phone was not actually hooked up to a line, but picking it up and imagining he was talking to his cousin was a way for him to deal with his grief.

One year after Itaru installed the phone booth his town of Otsuchi was devastated by the Tsunami in March of 2011 that killed over 19,000 people in Japan. According to the radio story Otsuchi was the place worst hit by the disaster.

Somehow a buzz about Itaru’s phone booth to communicate with the dead spread around Japan. People started coming from everywhere to the phone booth to talk to their own family members who had died in the tsunami. It has become a shrine of sorts, something like the granite wall in Washington with the names of 58,000 American soldiers killed in Vietnam. But this is even more intimate because the people who come to the phone shrine dial their lost family and talk to them as if they are actually on the line.

The reporter for this story is of Japanese origin. She got permission to tape and translate the conversations for the radio piece.

I found calls heartbreaking, but utterly fascinating. People dialed a number like they were calling home and talked to the dead often in a matter of fact way, and sometimes in a sad, regretful way. “Is it cold there?” a man would ask his dead wife. In Japanese culture emotion is rarely expressed overtly, but in the tapes of the calls you could hear the pain and sadness in the most mundane statements and queries.

The conversations (one way, of course) brought tears to my eyes as my wife and I were driving home from the city last Sunday night.

I thought of conversations I wish I had with my parents before they died. I was on a vacation trip with my sister Susan and her family when my mother died suddenly. There was never a chance for a last talk. I would have liked a chance to tell her I loved her deeply.

I do remember a heartfelt talk with my father, visiting him in Florida. We were talking about his wife, my mother, who had died a few years earlier and he said something that struck me with such impact that I still recall it frequently. I thought of it while listening to the “phone call to the dead” show. “I wish I’d given her more jewelry,” he told me.

I asked a therapist about this remark because I wondered why it seemed to bother my father so much. The psychologist interpreted the remark to mean “I wish I gave her more love or sex.” If I could talk to my father today I would ask him to tell me more about the “I wish I gave her more jewelry” comment.

We all have things we’d like to ask the dead or tell the departed. This is the season as we head toward the holidays when we should ask the questions and express our feelings to our loved ones, before we have to make a phone call to the dead.

Question: What would you say in a phone call to the dead?

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Weight Weight… Don’t Tell Me!

By Lloyd Graff

Today is the beginning of a new year for me. The Chicago Cubs begin spring training in Mesa, Arizona. Since the Cubs lost to the Dodgers in the National League Championship Series last October I’ve been longing for this day – the beginning of the beginning of the season.

I need these days to look forward to. I need an excuse to restart, reboot, begin to begin. I need the psychological energy that a relaunch provides.

The winter slog of Chicago weather is reaching its nadir. We had 20” of snow over the weekend, and I woke up to stalactites hanging 18” long from my roof like iced carrots.

I find my interest in the Cubs has intensified in recent years as they’ve finally gotten good after all these decades of mediocrity punctuated by awfulness. I read the blogs about the Cubbies almost every day, and Swarf has started to comment with pithy insight on the Cubs Den blogs.

I need this baseball jumpstart quite badly this year because I’m facing six weeks of radiation treatments for the remnants of a benign tumor that has started to grow again dangerously close to the optic nerve in my brain. This means schlepping down to University of Chicago Hospital 30 weekdays for five-minute zaps of radiation.

Lloyd’s new waistline

The small but frequent dosing is safer than doing five big wallops, which was what I had expected would be the ticket if the thing grew back.

The treatment also comes with brain MRIs, which are one hour of weird noises in a claustrophobic tube. I’ve had a lot of them, but each one is a delightful new treat. I’ll be mentally taking myself to Cubs games during the sessions in “The Tube.”

As this has turned into a health blog, I would like to share some happier news. I have lost 30 pounds in the last three months—voluntarily!

My internist at the U of C Hospital observed my chubbiness during my last checkup in November and suggested I peruse the book, Always Hungry?: Conquer Cravings, Retrain Your Fat Cells, Lose Weight Permanently, by Dr. David Ludwig. He said he had read it recently and learned stuff he had not known. I figured it was just another diet book that I would read for 10 minutes and then forget about, but I bought the book, read the first few chapters in which Ludwig validates his theories with research, and followed his advice for two weeks.

Ludwig’s approach shocked me. It was simple but radical. Forget about counting calories, just eliminate refined sugar, processed foods, and simple carbohydrates like white potatoes and bread. Then, shockingly to me, add fat like cheese, full fat yogurt and meat. Snacks should be mostly nuts and dark chocolate, at least 70% cacao.

I followed this regimen quite religiously for a few weeks and started dropping weight steadily.

The elimination of simple carbs and sugars with the replacement of fat and nuts, and of course, lots of fruits and vegetables, was easy for me because I like eating stuff like that. The sweets and bread weren’t hard to eliminate because I was virtually never hungry. My results were amazing.

My workouts are a lot easier now. My knees don’t hurt as much, and clothes I thought I would never wear again are now loose on me.

Did I know that sweets and carbs were poison for me before reading Ludwig? Sure. But the addition of fat and nuts made the regimen a happy challenge. When I started shedding the weight so easily it reinforced my new eating behavior. I am shocked but thrilled.

It’s mid-February in Chicago. Baseball season is within sight. Radiation—it’s an annoyance.

And I’ve lost my fat gut.

Bring on the Cubbies!

Question: What methods have you used to lose weight?

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Inflation – What, Me Worry?

By Lloyd Graff

Janet Yellen has been dumped into the Brookings Think Tank by Donald Trump. Should we care?


For years, she resisted her traditional banker type peers on the Fed and kept interest rates very low by traditional standards. The old bankers were peeved because higher interest rates usually mean bigger profits for lenders.

Janet Yellen was no silk-stocking blueblood by upbringing. Her father was a doctor whose patients were primarily dockworkers living in the poor Red Hook neighborhood of Brooklyn. Yellen’s bias has always been towards economic growth and she advocated for accommodative low interest rates that probably contributed to the housing boom and then bust prior to 2007. She has admitted that her views may have contributed to that bubble and the “tech bubble” around 2000.

Yellen always wanted economic growth, which would help lower and middle-class people live an easier life. Folks like the dock workers she saw her father treat in his practice.

The irony was that low interest rates also helped grow value for people who owned assets like homes and stocks. It also punished older, risk averse people who relied on interest payments during retirement. It fostered income disparity.

Federal Reserve Chair Janet Yellen, the first woman to lead the central bank and likely the most qualified nominee ever for the post, exited the Fed on February 3, 2018.

The current gyrations of stock markets are related to Yellen leaving the Fed and the realization that inflation, after being almost dead for a decade, might be waking up. Higher interest rates – think 6-8% mortgages and a 6% prime rate – could slow down asset appreciation and bite into business profits, thus reducing stock prices.

The stock markets have roared since Donald Trump became President with the anticipation of the tax cut legislation, which was recently enacted. The legislation will juice the economy with borrowed money and many pro-business features.

The question that troubles the markets is how inflationary is the current business climate and will the rising tide of business and wages soon bring significantly higher interest rates and a possible bust of stock and real estate prices, bringing on a recession.

I don’t pretend to know the answer, but I do know what I see around me. People with skills are able to get nice bounces in pay. This has been true for years but it now seems to be more pronounced. Folks on the bottom of the scale still cannot get much traction, even with supposed 4% unemployment. The people making $10-$15 an hour who have demonstrated an ability to hold a job are getting significant raises and overtime. Amazon is forcing up wages throughout the economy but it pushes its people hard and has trouble holding onto employees.

Gas and diesel prices have risen significantly and that ripples through the economy. Freight costs are rising fast and big truck sales are booming. Light trucks are also selling. Healthcare costs are rising, but we are reaching the point where the buyers of healthcare are pushing back. Trump’s attack on prescription drug makers, CVS buying Aetna Insurance, and Amazon, Berkshire Hathaway, and Chase banding together to attack healthcare costs is an important signal of change coming.

The big picture statistics from the government are showing minor signals of inflation at the moment, but my gut and business antennae tell me that inflation has started and it is moving faster than Washington’s numbers tell us.

For a business person like me who deals in hard assets like machine tools, this is a period of major opportunity in the short run. The first half of 2018 and probably the entire year should be a “boom” period. Inflation will work for me – until it doesn’t. Maybe automation will hold down wage surges, but eventually the dike will break. Inflation will spring up with inflationary expectations. Then we may get the bubble and the bust.

Janet Yellen is no longer at the top of the Fed. She and her predecessor Ben Bernanke helped us finally get out of the doldrums, and we’ve had 10 years of no inflation. Now times are great, and scary.

Question: Is this a good time to buy a house?

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Inclining with Age

By Lloyd Graff

Over the course of one week I will have had the opportunity to watch two of the greatest athletes of all time compete at the highest level at an age when they should have been long retired.

Last week Roger Federer won his twentieth Grand Slam tennis title, the Australian Open, at 36 years old. This Sunday Tom Brady of the New England Patriots goes for his sixth Super Bowl win at age 40.

I find interesting parallels between the two men and their careers.

Federer’s success was waning in his early thirties. Novak Djokovic became the dominant player in men’s tennis supplanting Federer and Rafael Nadal. Andy Murray of England also rose to the top of the game.

Roger Federer and Tom Brady

But the physical and mental rigors of the sport eventually pulled down all of those remarkable players, yet Federer continued to play and even started to get better in 2016, 2017 and now 2018. His fitness level seems to have improved over the last couple years, and both his backhands down the line and cross court have sharpened significantly under a new coach he hired. He won Australia last Sunday in a hard fought five-set match against Marin Čilić, the number 3 ranked player in the world. Federer’s wife Mirka, a former Women’s Tour player, was watching in the crowd as she always does. She travels with Roger and their twin boys, and is a big part of Team Federer.

There is a parallel with Tom Brady and his wife Gisele Bündchen, the famous former supermodel from Brazil, who is also a crucial member of the Brady team. Brady’s team is much bigger than just the New England Patriots, he has his own independent trainer and nutritionists. He also has consultants for meditation and emotional counseling.

Federer and Brady have been shrewd in developing a pleasant demeanor with the outside world, but they are fanatical in their devotion to their sports careers. They have both survived knee surgeries that could have ended their careers. Brady has endured numerous concussions without ever complaining about them, which Gisele Bündchen alluded to in a 60 Minutes interview.

I have lost a lot of my passion for NFL football in recent years because of the sad toll of brain injuries on the players. I was appalled when Rob Gronkowski of the Patriots was obviously targeted by the Jacksonville Jaguars’ safety in the AFC Title game and knocked out of the game with a concussion. He may miss the Super Bowl, and the Jaguars’ player was not even ejected from the game!

But I am up for this Sunday’s Super Bowl with the Eagles because I want to watch Brady at 40 go up against a great defense.

If Roger Federer can win the Australian Open at 36, Brady can win a championship again, too. I will be rooting for him to beat back the inevitable decline one more time.

Question: Do you feel like you’re getting better with age?

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The Best?

By Lloyd Graff

The use of advertising slogans must be as old as advertising itself. But if you are like me, most slogans are immediately forgotten if they were ever remembered in the first place.

But what if you take note of a slogan because it offends you. I thought of this a couple of days ago watching the new Gillette ad, which emphasizes the prowess of American manufacturing and even showed a man working at what appeared to be a Bridgeport mill.

And then the slick TV ad ended with the hackneyed old Gillette slogan “the best a man can get.” It struck me that it was not only an anachronism but it can be offensive to both women and men.

A little context. Gillette which is now a division of Procter and Gamble, was asleep at the switch as Dollar Shave Club and Harry’s attacked them on price and coolness. The beard trend in men also hurt them. For many years Gillette was a cash cow that barely had to advertise. It owned the shelves at drug stores and supermarkets, but the upstarts saw sticker shock on $5 razor cartridges and $25 packages of blades.

Social media and internet sales punctured Gillette’s sense of invulnerability. The company woke up and started buying slots on the declining NFL games, just what an old sluggish brand with a big ad budget might do. But every ad still ends with “The best a man can get.”

Business has really started to deteriorate for Gillette and they finally decided to address it, by taking out ads saying customers were leaving Harry’s in droves after trying it. That approach ended up as a PR disaster for Gillette because it was both false and also gave Harry’s tremendous visibility. Gillette came off as a slobbering bully.

Courtesy of April 10, 2017

Now Gillette is discounting its blades and has begun a subscription plan, imitating its competitors.

What bugs me about the Gillette slogan is that it strikes me as so yesterday and obviously sexist. And clearly stupid. The implication is that Gillette isn’t the best product, it’s just “the best a man can get.” Presumably a woman would buy a better razor.

Other interpretations of the slogan can also be made, which some will find offensive. What shocks me is that a company like Proctor and Gamble that makes billions of dollars on Tide, can be so utterly tone deaf in an age of sensitized gender identity.

I can only surmise that owning Playtex and selling cosmetics and tampons has not made the corporate types in Cincinnati more astute, or even politically correct.

For the guys who make the ad decisions at Gillette, the results must seem like, well, “the best a man can get.”

Question: Have you abandoned “big brands” for niche products?

The Gillette ad that backfired

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Manufacturing Value

By Lloyd Graff

I’ve been interested in K&K Screw Products since I sold the founder of the company his first three Davenport screw machines a million years ago. There have been several ownership changes since then. The company now has more than 200 multi-spindles and changed owners once again in December.

One private equity company sold the business to a bigger private equity firm this time around. CapitalWorks out of Cleveland had owned the firm (now KKSP) for five years, paid down the debt used to buy it, utilized the depreciation rules, improved the company by upgrading its data management, and facilitated two plant relocations. It plumped up KKSP’s EBITDA (earnings before interest, taxes, depreciation, amortization), and racked up juicy gains for the equity partners, which included management.

It was a textbook private equity deal and I was keen to find out the ins and outs of the game from an insider. Fortunately, Todd Martin of CapitalWorks was happy to discuss the deal with me.

Todd Martin of CapitalWorks Private Equity Firm

His private equity firm has partners who came out of the manufacturing world, some have sold family businesses, others have come out of corporate America like him (an Alum of GE). He has a wide network of folks who pitch deals to his group and numerous contacts to quickly find key managers who might be crucial in making acquisitions successful.

I was surprised when he told me that his group usually puts up 50% equity and 50% borrowed money into its acquisitions. I had thought that it would push 80% in borrowed money, but his belief is that less leverage makes for a safer investment, particularly in the early stage of ownership. If things are going well, they might recapitalize as they did with KKSP, two years into the deal.

Martin says that the key to a private equity deal is rapid payback of debt, increasing EBITDA, and use of of the tax code to limit taxes. CapitalWorks usually likes to have top management members take a stake in the company, whether they are inherited from the previous regime or recruited from the outside. Skin in the game definitely focuses the mind on the endgame, which is usually a sale of the company. In KKSP’s case it was sold to Mill Point partners, a New York firm with deeper pockets but a similar focus on manufacturing.

I asked him if larger companies sell for a bigger multiple of EBITDA. He confirmed that is often the case. The management requirement effort for a company with less than $10 million in sales may reduce the multiple to two to four times EBITDA, while a $100 million-dollar company might bring 7-10 times. Martin emphasized that firms that merge to get to the higher sales number often shoot themselves in the foot because they overshoot their managerial competence. A safer strategy may be to pick up smaller companies just to acquire customers and skilled employees. This is something KKSP did under the CapitalWorks ownership.

Todd Martin ended the interview by relating a story about a private equity hotshot from Wall Street with a Harvard MBA who came to a potential buyout meeting with a briefcase and credentials, but no socks. The nuts and bolts owner of the business in play was unimpressed. “Next time find somebody who wears socks,” he told Mr. Martin.

Private equity is the name of the acquisition game today in manufacturing, but you still have to know what you are doing—and wear socks.

Question: Would you prefer to work for a private equity firm or an individual owner.

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