The Best We Can Get?

Gillette Fusion Razor

Gillette Fusion Razor

I recently discovered that I was out of cartridges for my Gillette 5-blade razor (the Fusion). I hopped over to the local Walgreens to buy a new package.

It was an ugly experience. The Gillette cartridges were locked up, requiring a buyer to hunt for a salesperson to come over to unlock the booty. Then I had to figure out which razor blade model I owned and whether I wanted to fork over $25 for four precious 5-blade cartridges in one over-wrapped package.

Gillette, now a division of Proctor & Gamble, has been developing high-tech razors and blades over the last decade which last longer but make shaving more expensive. Its advertising has flogged the high-tech blades, mercilessly extolling the wonderful experience of shaving while dulling one of the great American brands by being greedy and dumb as the market for their products was starting to shift.

As men and women get older they tend to shave less often. Younger men and women are hairier these days with the disheveled look in vogue.

One indicator is how few Major League Baseball players are clean shaven. Beards are in. Just look at Jake Arrietta and Clayton Kershaw, the best pitchers in the game, and Bryce Harper, the top position player.

The other wild card that Gillette did not expect is the dollar shave club phenomenon. Many men are choosing mail order low tech blades that offer a less expensive monthly bill and fresh blades daily. They have eliminated the distasteful trip to Walgreens or Target to unlock the precious cartridges from the store safe. You would think they were illicit goods like original Sudafed.

Gillette razor blades are one of many iconic products that got too fat as cash cows of obese conglomerates like P&G. I doubt the old independent entrepreneurial Gillette of Boston would have locked themselves into overpriced high-tech blades that shavers are starting to reject in droves.

Gillette is not the only once revered label that consumers are starting to hate. The mattress market is also shifting quickly.

A few years ago beds and mattresses were mostly sold in department stores and furniture emporiums. Brands like Sealy, Simmons and Beautyrest dominated. The big names gradually merged together looking to monopolize the market and keep the price high for traditional spring products.

But they were blindsided by memory foam mattresses which were cheaper to make and better to sleep on. Independent chains popped up almost overnight to sell the new foam products and accessories. Then Internet sales, boosted by media campaigns challenged brick and mortar. Today the mattress market is fragmented and competitive.

The beer and booze market have also seen both consolidation and a challenge from independents. The behemoths still dominate with enormous advertising budgets and control of the vital distribution, but craft beers have a growing audience for young buyers and independent vodka and whiskey makers are proliferating.

The latest challenge to a regulated monopoly is in the hearing aid business. Audiologists and doctors have pretty much sewn up the high end market for hearing devices. The average hearing aid costs $2,000 to $3000 including visits to the professionals. A company called Etymotic Research has developed an in-ear amplifier to be sold over the counter, which they call the Bean. The cheapest model retails for $299. So far the FDA has protected the incumbents like Siemens and Sonova which control 95% of the $5 billion world wide market. The Bean can currently be sold only for “recreational” use (hunting and birding). But the White House is now pressuring the FDA to give Etymotic’s products a hard look. I foresee this tightly controlled business as a prime target for entrepreneurial attack. The over-the-counter hearing aid will be in Walgreens and Target soon—I predict 2016 or 2017.

Fat monopolies are still vulnerable to humble entrepreneurs in America. May it always be so.

Questions: Do you have a mattress that you love?

Have you tried the Bean?

Share this post

A Reminder of Life Without Freedom

Noah Graff

 

You don’t know what freedom is unless you don’t have it.

Life in Havana, Cuba

Tonight Passover begins! It’s the Jewish holiday that commemorates the Jews’ exodus from Egypt. I love the holiday for its distinct rituals, reflection about the story of the Jewish people and the meanings of the words “slavery” and “freedom.”

What does it mean to be a slave?

Are we slaves to our jobs, to our phones, to addictions, to depression? Or is that just Passover seder table froth?

What does slavery in 2016 look like? A few images come to mind such as human trafficking of prostitutes and women abducted by Boko Haram. But perhaps it is better to ask what a lack of freedom looks like in 2016.

I have a friend in Cuba who I met when I was there on vacation. We have been emailing every few weeks for over two years. We compare notes about what is happening in each other’s country according to our respective media. She has told me about her employment journey over the course of that period. She was working at a bank when I met her, then she was a waitress, and now she works in a flea market.

Don’t let the special guests at baseball games and the new cruise stops fool you. Cuban people feel desperate, probably more desperate than they have felt in a long time.

Salaries in Cuba still average $20 per month. People still do not have the freedom to say what they want nor travel where they want. They have very little freedom to start businesses. Police lurk on every other street corner, reminding people that their dictatorship government still makes the rules. Because of modern communication technology Cuban people in 2016 know about the freedoms enjoyed in other countries, which makes them extra pissed off about their situation.

When my friend tells me about her problems I try to console her. I say that it sounds horrible and that I can’t even fathom how hard it must be to live in her shoes. I tell her that she is a survivor and that when the communist government finally falls she will be able to do great things because making it through the misery will have made her a strong person.

I suggest to her that she appreciate the good things that she has—beautiful weather, good friends, relatively good health and the fact that bombs aren’t going off around her. I think she does appreciate those things, but they are not enough for her to feel satisfied. She wants what everybody in trouble longs for—hope. She wants to feel that a life of freedom will be possible for her one day, because when there is freedom there is hope.

Question: Are you hopeful about the future?

Share this post

Time to move to Mars?

By Lloyd Graff

Elon Musk with the SpaceX lander module and Falcon 9 rocket

It has been a while since I wrote about business, which may be a commentary in itself about what I think life is like in the machining business in 2016.

My sense of the action, or inaction, today is widespread caution. I would not call it dread or pervasive fear, but a mood of “wait and see” for more clarity of where the economy and the country is headed.

Politically, there is considerable nausea about a Donald Trump versus Hillary Clinton matchup. People confront me frequently with the rhetorical question, “what kind of country gives us The Donald and Hillary to choose from?” I shake my head and silently cringe. It isn’t a choice that inspires the confidence to invest heavily in people or equipment.

In my hopeful heart of hearts I think the political system will push whoever is elected to the center, but 2016 is a clear notice of a broken political system on the national level which begs for a third or fourth party to replace the two parties that provide an untrustworthy Clinton and a screwy Trump to choose from. It’s enough to make me think about moving to Mars.

On a personal level, our machinery business lost a big deal recently when our client’s investors pulled out, supposedly out of fear of a Clinton presidency. It could just as easily have been out of fear of a Trump presidency. Both are poison to so many people.

********

The numbers that are coming these days generally reflect the country’s malaise. Housing starts have finally risen past the significant one million per year mark. March was supposed to show 1.1 million starts, but slipped under that pace, giving us two straight months of slowing. The 2016 housing starts pace is the best since 2008. Mortgage rates are hovering at 4%, give or take, which is historically attractive, but income stagnation is sapping confidence. The result is fewer holes in the ground, less toilets and faucets for the plumbing brass folks to sell, and sinking sales of cutting tools and rod.

Automotive is seeing a similar softening with sales slipping under the 18 million units per year gold standard. Cheap financing has helped fuel the car boom in recent years. Lengthening the payment terms to as long as 72 months on car loans is a smart tactic for car sellers and finance companies because the vehicles are made so much better today than in the bad ole days. A 6-year-old car is a better investment now than a 3-year-old car or truck 15 years ago.

********

Tesla’s $35,000 electric car picked up 131,000 reservations from people willing to put down $1000 for the privilege of getting an early one.

Elon Musk keeps proving folks wrong on the demise of his company. As long as he continues getting payments from governments for zero pollution vehicles he can keep his ship afloat. Musk is incredibly resourceful and gutsy. I hope he makes it with Tesla.

I am utterly fascinated by Elon Musk. He thinks big and long term, which he can do because he controls his companies himself. His SpaceX private rocket company has finally succeeded in the soft landing of a space vehicle. In the short run, this means reusable rockets for supplying the International Space Station and the beginning of space tourism. Musk’s real goal is space travel and colonization of Mars. This used to be science fiction, but no longer. People are volunteering already to be pioneers on Mars, even though it is a one way ticket in today’s world. In Musk’s biography he stated that his lifelong goal is to be one of the early colonizers of Mars. Then he plans to spend the rest of his life on the Red Planet.

When I read this I was dubious, but now I believe him. He probably envisions being King of Mars, because I can’t see him easily accepting orders from other folks. Hopefully he likes potatoes because they appear to be the perfect crop for the first Martian farmers. NASA is experimenting with all sort of varieties, looking for the best options. Musk is probably already making French fries with his spuds of choice.

Question: Would you rather colonize Mars or take a Viking River Cruise?

Share this post

My Kitchen Table

By Lloyd Graff

Lloyd Graff at his kitchen table.

I am writing this piece at the kitchen table in my house. It’s where I write most of my blogs. It’s the one place where I can concentrate most easily, despite various newspapers, salt and pepper shakers, and reading glasses laying askew.

The table usually is covered with a tablecloth that has been washed a hundred times. I like colorful tablecloths on my formica covered table to add interest while I eat or write or just look out the window.

For a house or apartment to be a real home you need a place, like my kitchen table, where you can instantly unfold a tired, stressed and obstinate body when you stumble in from work.

When I’m on a trip, or unfortunately languishing in a hospital room, I long to sit down at my kitchen table with my wife, Risa, toast an English muffin, sip some coffee, and breathe. Our window overlooks the backyard, a currently moribund vegetable garden, flowering trees soon to bloom and a basketball court where I used to shoot free throws and layups by the thousands.

I always sit at the table with our unfettered 4’ x 8’ bay window on my left and the toaster and refrigerator on my right. There is pleasure in routine and habit. It frees my mind to not have to make choices about trivial stuff, like where am I going to sit and what shoulder I need to look over to take in God’s colors. I have enough decisions each day. Some things should be simple.

On my right, magnetized on the big GE refrigerator-freezer is a mélange of photos. We change them from time to time, but some stay frozen for a decade. They are all family. Several pictures are of my three granddaughters. The most prominent one shows them in Cubs tee-shirts. There is a shot of my Dad in a long tan tailor-made wool overcoat donated by several husky sheep, a 20-year-old photo of Risa with her three brothers and one photo of her in a Taekwondo uniform kicking her leg in the air at a totally absurd angle. The refrigerator is always our visible album of a lifetime lived quite happily. Displaying pictures of the people who have contributed so much to our joy just six feet away from the kitchen table warms the room. Refrigerator magnets are one of the great inventions of our time. The magnetic picture frame is a brilliant refinement of the original genius.

Looking straight ahead, about the distance of a high school 3-point basketball shot, is my 60” flat screen Samsung TV. The remote control, which I often leave on the kitchen table, can ignite the Korean beauty without me lifting my ample behind off the chair—another of the gifts of modern technology that I am grateful for. It is my vital link to baseball, basketball, golf and all those wonderful sports that a creaky body and lousy eyesight have deprived me of playing. Some folks decry the time wasted in front of screens, but I am not one of them. My enormous television is a companion. I believe my time at the kitchen table imbibing sports is a perfect respite from a life of work and stress.

I hope each of you has a place like my kitchen table, where you feel safe and nourished. I think it is why we have houses. It is why the DIY Network is so popular. Everybody wants that welcoming nest or den that turns a residence into a home.

I hope you will share your welcoming comfortable spots with us and tell us why they are so special to you.

Question: What is your favorite spot in your house?

Share this post

Detroit Has Life

By Russell Ethridge

After 50 stunningly disastrous years, Detroit is seeing the spark of revival that comes when things get so bad that only the truly visionary can see through the rubble.

I’m not talking about autos. Making cars comes and goes. At the moment, auto is back with a vengeance; maybe 18,000,000 sleds this year! This is no surprise to anyone selling parts, turning metal, or molding polymers. That revival has been going on since two of the “big three” dumped their debt (and shareholders) in bankruptcy to improve their balance sheets, and the third hired a manager who actually understood that it was about “the product, stupid.” Hopes for Detroit always rise with auto sales, but auto sales are only a small piece of what is driving the current revival in what locals call “The D.”

What’s really behind Detroit’s revival are an influx of educated young people and change agents like Quicken Loans founder Dan Gilbert and insurance entrepreneur David Cotton, an obstetrician who bailed out of medicine into finance when he saw the change that was coming to health care funding.

Detroit at night

Cotton saw the pathetic way health care is administered and established insurance and management systems that employ many people in low and mid-level administrative jobs in downtown venues. Gilbert, a non-practicing lawyer with a history of bookmaking in college, bought every building he could in Detroit (and Cleveland before that) for pennies on the dollar. Gilbert is taking some of the world’s best architecture (this WAS the Paris of the Midwest), and reformatting it into hip spaces where young people move data, market stuff, including cars and mortgages, and live. Gilbert is making things happen. Many others sat on these properties for years, waiting for…well, someone like Gilbert. Although he is currently under attack by government regulators unhappy with some of his employment practices, Gilbert is generally considered a good employer, and he’s sparked a ton of small businesses that occupy his properties. Gilbert, Cotton, and the others had the benefit of a path forged by real risk takers like Little Caesars founders Mike and Marian llitch whose years of investment in Detroit sports and entertainment kept the city on the map and relevant. Detroit recently elected a mayor who is known for being a turnaround guy. That he is white and elected by a mostly black constituency speaks volumes about how much Detroiters wanted change from the years of corruption and incompetence that preceded him. Other developers are also investing now that you don’t need to bribe a city official to get a meeting. Two big hospital systems and a thriving university add to the mix.

There are many others who are embracing this moment like the restaurateurs who’ve made Detroit a foodie haven. I dined recently at a new hipster joint located in a burned out area across from the city’s wholesale food markets. The proprietor moved from Brooklyn and bought the Detroit property for the cost of a month’s rent in New York. There are countless others providing great food in stunning venues resurrected from the dead, a fact that reminds me that we should cherish our architectural history like Europeans do. I have dined far and wide, but it is hard to find more interesting and pleasurable food than that which I’ve had recently in the “D.”

Detroit’s population outflow has stopped, mostly. This is a city of over 140 square miles that had roughly 1.8 million people in 1950. Starting with the nation’s first urban freeway, Detroit paved the way for its then predominantly white residents to flee to the wide open spaces of suburbia in the cars they made. Jobs and factories followed thereafter. They rolled up the windows, locked the doors, and hit the gas after the riots in 1968. Now, there are about 700,000 souls over the same acreage. If you do the math, that’s a ton of vacant land. The delivery of services is inherently inefficient when there is one house still standing on five blocks of otherwise vacant land. People left behind are over 80% black, and 50% are functionally illiterate. Only half the properties generate property tax, a fact that goes a long way to explaining the need a couple of years ago for the largest municipal bankruptcy in history. Some of this land is being used for forestry and agriculture, but most of the development by Gilbert and others has been in a few square miles in and around downtown.

The abandonment of the city by whites fleeing to the suburbs is part of what crushed city government and a source of some resentment by those who were left in the decay for three generations. Unfortunately, their lot has not improved much since most of the development seems to be for and about educated and mostly white people who do clean work in light filled spaces before heading out for exotic small plate offerings at prices that almost seem embarrassing.

That is not to say that the development has been all white. Detroit is, perhaps, one of the most ethnically diverse cities anywhere. We have more Middle-Easterners than anywhere outside the Middle-East, in addition to many Asians, Indians, and Hispanics, which creates a wonderful diversity that just makes the city cool. But that drop of diversity still has not provided much of a lift for the mostly back residents of the other 130 square miles whose school system is almost a billion dollars in debt and whose children are killing each other in numbers that are unfathomable in a civilized society. When I questioned one of my developer buddies about this contrast, he noted, correctly, that Detroit’s revival is no different from many other cities, including Chicago, where the affluent and educated live one life, and the poor and uneducated live quite another. A rising tide may lift all boats, but if you don’t have a boat, then it doesn’t matter. You tread water or drown.

Question: What do you think of when you think of Detroit?

Russell Ethridge is a prominent attorney in the Detroit area and longtime contributor to Today’s Machining World.

 

Share this post

Double Parked in Bangkok

By Noah Graff

Chatuchak Weekend Market, Bangkok, Thailand

Someone asked me the other day why I like to travel. Of course, there are a lot of reasons. Vacations are nice to get away from the office and chill out, but I didn’t need to fly 20 hours to Thailand like I did this March just to find entertainment and relaxation.

Traveling to new places refreshes me. It’s not always easy, but it energizes me to arrive in a country with a different language, different money, different looking people and a different way of life. I’m excited to explore places, get lost and ask myself, “Where the heck am I? How did I end up here?”

My journey to Thailand consisted of a 14-hour flight to Japan and then another 6 hours to Bangkok. On the way I sat next to an Israeli to my left who had traveled to Thailand many times, including a vacation with his family in which they spent 21 days there—I wish Americans could take long vacations like that. On my right was a middle-aged Indian man living in Taiwan, who also happened to be a machinery dealer. Both men chuckled as they mused about the plethora of opportunities for mischief in Bangkok. They advised me to stay in Sukhumvit, the modern cosmopolitan district of the city with the best hotels.

Booking.com steered me to Hotel Parinda, a four-star hotel with an impressive user rating of 8.6, where I paid $50 a night for a huge, beautiful room. The catch to the great deal, I soon realized, was that although the hotel was centrally located for public transit, shopping and entertainment, I was forced to walk 10 minutes down the infamous street, Nana Thai Alley, to get to the main drag. Nana is one of the most well-known red light areas of Bangkok, lined with seedy bars, massage parlors and working girls hanging out on the sidewalk trying to pull you into their respective establishments. Making things more interesting was that at least 50 percent of the “working girls” on Nana were transexuals, which in Bangkok they call “ladyboys.” I now have a window into how it must feel to be a sexually-harassed woman as sometimes it was impossible for me to avert the arm of eager ladyboys while I walked down the narrow sidewalk.

Bangkok’s famous Sleeping Buddha

But after I traversed the sleazy hoopla of Nana, Bangkok beamed with a wonderful energy. It has a big city feel with tons of skyscrapers, people and traffic. However, at the same time it has a much more chill vibe then other big cities I’ve spent time in like New York or Tokyo. Almost everyone I spoke with was friendly, and it felt a lot safer than other big cities I’ve traveled to. I heard virtually no talk about violent crime or pickpockets. People freely walk the streets late into the night and unabashedly show off their iPhones. Most of the time in Bangkok people seemed to be moving around at a slow or medium pace, rather than rushing frantically. All over the place people are contentedly eating some great inexpensive food or beautiful fruit served on the street late into the night. However, once one enters the tourist sites like the Grand Palace and the Buddhist temples the mellowness is thwarted by the throngs of foreigners.

Another wonderful thing about visiting Thailand is how cheap things are—at least for foreigners. One can buy a 20 ounce bottle of water at 7-11 for about 7 cents and get a nice meal on the street for about $2 or $3. A one-hour foot massage or Thai massage (with no happy ending) is generally about $12. I bought two pairs of shorts at the weekend market for $3 each. Things have to have to be cheap there of course, otherwise nobody could afford anything. So I had to marvel at all the Thai people walking around with brand new iPhones. Massage therapists, people working at the markets, and taxi drivers had iPhone 6 Pluses which must have cost them at least $1,000. I would not be surprised if that accounted for a tenth of their yearly income.

Despite their poverty the Bangkokians are serious about shopping. I visited a farmers market that stayed open 24 hours a day. I also attended the famous Chatuchak market both Saturday and Sunday, which is the largest market of its kind in the world. It contains 27 different sections, over 27 acres containing over 15,000 booths filled with art, antiques, clothes, and crafts from all over Thailand. In two days I was only able to cover two out of the 27 sections. Each day over 200,000 people (30% tourists) visit the market. I bought a crocodile belt for $45, a crocodile wallet for $70—easier to get crocodile over there—an original painting, a wallet, t-shirts, shorts, a table cloth for my mom, among many other goodies. It’s possible to bargain for everything, though when I bought shorts for $3 I didn’t challenge the retail price.

Double parked car at the market

After the market ended on Saturday I watched one of the store owners go to her car. A van was double-parked perpendicularly in the lot, blocking her car. Instead of panicking or calling the police, she and her assistant simply pushed the van a few feet out of the way. The van’s driver had kept it in neutral so anyone could move it when they wanted to get out of the lot. Genius!

Why haven’t I ever seen someone do that in the United States? Are we too dishonest or greedy to trust each other in that way? Why in a place with so much poverty did I often feel safer than in my hometown of Chicago?

Question: What’s the best bargain you ever got?

Share this post

My Chicago

By Lloyd Graff

Chicago’s new Maggie Daley Park is located right downtown on the lakefront.

I got an email from an old friend in Florida, Bob Ducanis, asking me to write a column explaining what is going on in my Chicago.

I immediately heard the refrain, “My kind of town, Chicago is my kind of town,” the old song. And then I paused to ask myself, is it still my kind of town? Is it a place I am happy to call my home? Do I want my kids and grandchildren, to call it home for a lifetime like I have?

These are my feelings for Chicago, 2016. It changes slightly with the headlines, but only a few degrees.

First, let’s get the pronunciation right. My town is Chicawgo. If you don’t get the middle syllable right, move to Gary and never schlep into the city for pizza.

Like other big rust belt cities, it is a huge living contradiction. It is losing population faster than any other big metropolis, but upscale condominiums sell quickly. No overbids like San Francisco and Los Angeles, but firm pricing near Lake Michigan and the neighborhoods young people want to live in. Both of my sons bought homes in the city in the last five years and their property has gone up in value.

Racially, the city is segregated by neighborhoods, though not as much as it used to be. The south and west sides of Chicago are war zones. Black youth unemployment is 50%. The schools are dangerous places. Drug wars menace everybody in neighborhoods like Englewood where my father and Derrick Rose grew up 80 years apart. Our business used to do its banking in Englewood at 63rd and Halsted. Today it is an empty lot.

If you are poor and black and live in Englewood or other neighborhoods like it, you live in the American version of Syria. Refugees are leaving for relative safety in places like Atlanta. They can leave without a passport, and they are. Frankly if I were Black growing up in Englewood I would leave, like my great grandparents left Russia and its violence. We have no KKK in Chicago, no lynchings, but random slayings every day and night for innocents unlucky enough to be in the wrong place at the wrong time.

Englewood in Chicago, where Derrick Rose and Leonard Graff grew up.

When gun violence is so rampant it affects people who live in relatively safe areas. I live in a comfortable integrated suburb of Chicago, 28 miles south of the Loop. The local Starbucks and Panera usually have half black and half white customers. This is an anomaly in Chicago. Yet the parents of black male teenagers in my suburb are truly fearful of their kids being stopped by the police. They constantly counsel their children about how to act if stopped by a white cop. Many want to send their kids to predominantly Black colleges in Atlanta to escape the violence.

White cops are definitely very cautious about Black youth. The widespread use of video cameras has made officers potential targets of scrutiny, especially after high profile shootings of unarmed black teenagers were caught on camera.

My Chicago is a war zone in certain areas, but to me it still feels like a thriving metropolis of great restaurants, theatre, and beautiful parks. The Lakefront is as spectacular as ever. Joggers and bikers are everywhere. Tennis and volleyball courts are jammed in the summer.

Manufacturing has moved out of the city for the most part because real estate has become too valuable to be used to bang out widgets. But the area around Ohare Airport still houses many hundreds of factories. Skills are available in Chicago if you are willing to pay for them.

Politics in Chicago and Illinois are maddening. Rahm Emanuel wanted to be Mayor of Chicago for some ungodly reason and he is paying the price for his decision. His popularity is extremely low. The city is virtually broke thanks largely to his predecessor, Rich Daley, who never had the guts to turn down organized Labor’s demands. The teachers loathe Rahm. They figure he stole the last election by withholding the videotape of the killing of Laquan McDonald by a cop from public view until after he won the runoff. The school system cannot afford its pensions and current staffing and seems ready to accept a strike. Emmanuel is borrowing from Peter to pay Paul but a showdown is coming with the teachers. Meanwhile, Illinois state government is in a permanent stalemate that makes Washington look like a yoga class.

Politically, racially, financially, Chicago is a total mess, but as we head into spring the place is bursting with a positive energy for the Cubs and the Blackhawks. Chicago loves its teams and I’ve never seen so much optimism about my Cubbies going into a season. Everybody loves them. Of course, this scares me to death, but that’s another column.

I travel to the Bay Area frequently to see my daughter and family. It is a happier place than Chicago. People are not killing each other nearly as often. Racial fear is not on everybody’s mind. The weather is 10 times better out there. They have Steph Curry making threes, which is certainly a natural resource.

But Chicago still has a lot going for it, even if the city totters near bankruptcy. It has a fantastic energy that the Bay Area does not exude. It has way better pizza. It’s in the middle of things, and the country. You can still live in a nice place that is affordable.

My wife and I often talk about moving to California. The weather in the winter would sure be nice. But Chicago is such a hairy beast of a place, it will probably hold us in its powerful jaws forever.

Question: Do you want to live where you’re at, forever?

Share this post

Kids in the Workplace

By Lloyd Graff

In Chicago this week the big story (even bigger than the Illinois primaries) has been the retirement of Adam LaRoche, a designated hitter, first baseman for the Chicago White Sox. He walked away from a $13 million contract because the Sox management objected to the frequent presence of his 14-year-old son, Drake, at the team’s practices and games.

Drake is being homeschooled so he has a lot of time to be with his Dad. He went to 120 Sox games last year, often traveling on the team charter plane. He has an official White Sox uniform and spent a lot of time in the clubhouse, which is off limits to the press and friends. It is the inner sanctum of the team.

Adam LaRoche had informed the White Sox that he was close to his son and wanted to have him around frequently, but Sox management, especially Kenny Williams who is at the top of the team’s management group, reporting to the longtime owner Jerry Reinsdorf, was surprised and bothered by his almost constant presence at spring training in Arizona.

When I heard about this case I found it shocking, that the 37-year-old La Roche, coming off a terrible 2015 season, would walk away from $13 million, which was most likely his last contract as a player.

The case is fascinating to me for many reasons. I can see it from the White Sox point of view – overpaid player disrupts team chemistry. The son’s presence distracts Adam LaRoche. The locker room privacy is invaded by a teenager. LaRoche is an embarrassment to the management team that grossly overpaid for him.

It was logical for the White Sox to get rid of the kid and possibly get the added benefit of nudging the father to abandon the fat contract.

I would have thought the players would be relieved to have a “punk” kid and overpaid DH gone, but it has not played out that way so far.

It appears that Drake LaRoche was a mature and respectful young man who was loved by some key players like a younger brother without family baggage. And his father Adam was a highly respected mentor who helped several players through work and personal problems last season.

When Kenny Williams laid down the hammer on LaRoche’s son, thus prompting Adam’s resignation, he ignited a mini players’ rebellion led by the team’s star pitcher, Chris Sale.

The chemistry of a sports team is fragile and fluid. Last year the Sox underperformed their talent while their Chicago rivals, the Cubs, overperformed. Williams may have been looking for the opportunity to shake up the team, but a shakeup can also make things even worse.

It brings up personal issues for me. I worked summers for my father for six years, from the age of 17. To me it seemed like it never bothered anybody, but much of the time my father’s partner’s son, Dan, also worked. When my brother Jim joined the group things got more complicated in the office.

My wife started working in her Dad’s law office when she was 15. She heard a lot of gossip amidst the paperwork. But I have no doubt that the presence of children in a family business in a visible position has the potential for disruption and jealousies.

I was fearful of repercussions when my son Noah joined the staff of this publication which ultimately morphed into a position at Graff PInkert, the family machinery business. Ultimately, it did cause resentment for my brother.

Family businesses and Major League baseball teams are not analogous but the LaRoche flap has similarities. At least as far as White Sox top management was concerned, Adam LaRoches’s son was ruining the chemistry of the team.

A little of Drake LaRoche probably would have been okay. Adam had hung around some when his father Dave was a Major League pitcher and coach, but not for almost all of spring training and 120 games last year like Drake.

This is a sticky problem for the Sox. How would you have played it?

Question: Were the White Sox correct in expelling LaRoche’s son?

Question: How do you feel about kids in the workplace?

Share this post

Inventory Free

By Lloyd Graff

Usually I live my business life talking to people who are extremely skilled at cutting bars of metal into a lot of useful widgets and selling them for a modest profit to a company that assembles them into useful industrial products.

But a few days ago I had a lengthy chat with Mitch Free, who is playing the game somewhat differently than most of the folks in the machining business.

Mitch Free’s name is appropriate because he has freed himself from the conventional wisdom of the business, even though he happily runs a nice assortment of CNC lathes and mills at ZYCI, his shop in Atlanta. Mitch is a born and bred machinist, but he doesn’t think like one. He has wholeheartedly embraced 3D printing of both plastic and metal, but he acknowledges its limitations in accuracy. In metal, 3D printing produces a part of similar quality to a casting, but without the metallurgical integrity to withstand the high stress of many aerospace applications. But for a fuel nozzle like the one General Electric makes for the aviation market, it’s quite appropriate.

To Mitch, the beauty of additive manufacturing is that it is an almost perfect fit for the digital, cloud based world that views inventory as intellectual property, not plastic or metal pieces. He has launched a growing partnership with UPS, also based in Atlanta, to strategically attack the traditional imperative of stocking stuff.

Mr. Free has a lot of experience in the digital world, having started an internet based quoting clearinghouse called MFG.com during the dot-com boom. His work with MFG.com helped him grasp the link between the digital world and the manufacturing world.

A few years ago he wangled an invitation to UPS headquarters through a social acquaintance, only to be ushered into the inner sanctum of top management because the shipping behemoth happened to be looking for somebody like him who saw the strategic implications of no inventory, inventory management, and had the knowhow to make it happen.

Mitch Free, founder and CEO of CloudDDM (www.cloudddm.com) and ZYCI CNC Machining (www.zyci.com).

UPS has a five million square foot logistics center in Louisville, Kentucky. Besides being a gigantic hub, it is also where UPS stocks inventory for a multitude of clients waiting for orders. What Free, UPS, and its clients understood was that physically stocking millions of pieces of stuff is expensive. They asked themselves, what if rather than stashing it in bins, you just had the digital data in the Cloud which you accessed on demand and then made the widgets within 24 or 48 hours in Louisville, then shipped them from there?

This was the concept that Mitch Free and UPS envisioned at the meeting in Atlanta, and they have made it happen in their old Kentucky home. Free says that he has 100 machines in Louisville, mostly 3D printers making stuff virtually overnight with the orders coming online via the Cloud.

Mitch believes UPS lives in fear of their biggest competitor and customer, Amazon, gradually replacing them as a primary shipper. Mitch says it is extremely likely that Amazon is also experimenting in this arena as they focus on every form of delivery vehicle from drones to Uber. The more links they take out of the supply chain, the closer they come to owning it.

Mitch Free knows Jeff Bezos, the head of Amazon, because one of Bezos’s companies, Blue Origin (his space transport company) did business with his MFG.com firm and partnered with him in 2007.

As I sit here enduring the ups and downs of the high production piece part world, companies like Mitch Free’s, Amazon, and UPS are looking past the sclerotic traditional inventory-dominated world. Free acknowledged that 48-hour delivery for most things is still just a dream, but it is a dream that a lot of money is chasing. As 3D printing improves it will challenge subtractive machining, but will also work in tandem. On small quantity production additive manufacturing will take a bigger and bigger share. The metal or plastic will make the rough part and the CNC millturns will finish it. Companies will pay a significant premium for speed. For UPS and Amazon that make the spread for inventorying and shipping, it means huge money. For Mitch Free and others who can adapt to the 24 or 48 hour inventory world it could be the gold ring.

In a few years we will see robots fill the aisles in Louisville and other distribution hubs. More products will be designed from inception for digitization and there will be a huge business in digitizing old semi obsolete parts that do not lend themselves to physical inventory because their yearly usage is so low. Think of all the old Air Force planes or tanks that need low volume replacement parts.

This is going to be a huge opportunity for folks in the machining world. If it costs the same to make one part as 25, and companies are going to buy one piece at a time, it will change the economics of manufacturing. That future is already working in Louisville.

Question: How are you adapting to an inventory light world?

Share this post

My Cousin Donnie

By Lloyd Graff

I once had a cousin named Don. Don was a couple months older than me. We played softball together and a lot of ping pong. That was until we were 16. Then I lost track of Don. I never saw him again.

Donnie and I were first cousins. My Uncle Jerry, my father’s elder brother, was his Dad. He lived a few miles from us on the southside of Chicago. Jerry made a lot of money in the plumbing supply business, but he was too cheap to buy a home in a nice neighborhood. He rented a stuffy apartment in a three flat in a sea of other three flats four miles south of us.

Jerry used to bring Donnie over to our house so we could play catch or ping pong, but we never really talked about anything. Don was a mystery to me, but I was too naïve to know why at 10 or 11 years old. He was just my cousin Don who played ping pong left handed.

After grade school I went to the University of Chicago Lab School, a school for the kids of faculty members and an assortment of teenager’s from Chicago’s southside whose parents wanted them to get a really good education. Don went to his public high school, South Shore, but in his junior year Jerry enrolled him at the Lab School. I had no idea why he moved him to Lab. He just did. It seemed odd but I didn’t ask.

Don had no friends at the Lab School. Actually, Don had no friends at all, I think. We weren’t really friends, we just played ping pong together when Jerry brought him to our house.

We were in one class together our Junior year, English Literature with Eunice Rosenthal. Mrs. Rosenthal was a thin dark haired woman who wore stylish suits to teach her class. I remember her as a frigid bitchy lady who scared her students. She never smiled. English Lit was a class I was good at, but all I wanted to do was be invisible in her class.

One day in the Spring of 1961, Mrs. Rosenthal was talking about Hamlet and suddenly aimed a question at my cousin Don. It seemed innocuous when she asked it, but Don struggled to answer. She would not let him off the hook. She kept badgering him, then ridiculing him, mocking his halting answers. I could feel Don’s discomfort as she slid the verbal knife into his vulnerable psyche.

And then Donnie got up and ran out of the room. He ran out of the school. He just kept running. Eunice Rosenthal just ignored it and kept teaching her damn class. And Donnie ran.

The School called Jerry Graff and Jerry called his brother Leonard (my Dad) and eventually they found Don crumpled up.

I was confused about the whole event. My father wouldn’t tell me what was going on with Don, but he did not return to school that semester. He never returned. I never saw him again.

Life went on for me. I played basketball, went to college, the Army, marriage, a life. Don went to a “mental hospital” where he stayed quite a while, I came to learn. Schizophrenia, my father whispered to me a long time later.

Schizophrenia. It seemed so scary to me. Donnie, my first cousin, my lefty ping pong partner, was Schizophrenic.

He eventually got out of the hospital and left Chicago. Jerry told me he got a job with the Government. Who knows if he really did or not.

I asked Jerry and my Dad about Don from time to time. The answers were a couple sentences of avoidance. I didn’t probe. I didn’t want to get close to Schizophrenia. I didn’t even want to say the word.

Don was frozen in time for me as my 16-year-old cousin who used to play a nice game of ping pong – and ran away from Rosenthal and never came back.

Five years ago I received a phone call from Don’s niece. “Lloyd, I just want to let you know that Don was killed a few days ago in Washington. He was walking his dog at four in the morning and a guy in a Honda hit him,” she said.

I had not seen him in 50 years, but still I was stunned. A presence in my life was dead. I had never reached out to him. Jerry had never given me his phone number, but I had never asked for it.

Don was an outcast in the family. He had never tried to connect. I could never forget him, but I was afraid to reach out to him. Schizophrenia, it scared me.

They buried him and I went to the cemetery. I guess that was safe for me.

And the strange thing is I recall Don Graff now every day as I run through the dead people I’ve known who are worth remembering for me.

Don struggled with mental illness most of his life. I struggled with just the thought of it.

Question: How have you dealt with mental illness?

Share this post