I Hate “Steady”

By Lloyd Graff.

I hate the word “Steady.”

We call our customers and politely interrogate them about their machinery needs. We often ask them a simple question, “How’s business?” The answer we often hear these days is, “It’s steady.” “Good,” we respond. But what I’d really like to say is, “What the heck does ‘steady’ mean?”

“Steady” is one of the most meaningless words in the English vernacular. It is a dodge, a way to say “it’s none of your business so I’m going to politely tell you to mind your own business.”

I’ve never seen a steady business. Each day is a struggle to get product out the door, put out fires, make mistakes right, and somehow collect more than you spend. It’s a balancing act of minor calamities, labile egos, flighty small talk and emotional bruises, mixing together on the shop floor to the tune of discordant air compressors whistling Dixie off key. Steady?

Maybe steady is in a bookkeeper’s or banker’s vocabulary because they absorb numbers, not faces. But if you are hustling customers, harvesting quotes figured to the second decimal point, or trying to measure a purchasing agent’s nose hair, there is only volatility soaked in hot sauce.



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The sweet economic numbers are filtering in like the smell of a pumpkin latte with whipped cream. Frankly, a little too sweet for my taste. Confidence is the best since 2007, gas prices under $3 a gallon, unemployment shrinking, the Dow back up to 17,000–almost triple the 2008 bottom. Inflation is under 2%, the 10-year bond around 2.3%. Is this nirvana headed into Christmas? People even think they can quit their jobs and find a new one.

But it doesn’t feel that way to me when I talk to real people. Jobs may be available, but wages stink for the average Jane. They can’t get any money for their house and they struggle to save. Going into the election the mood smells sour and the negative advertising is so malicious from both sides, I just cringe and deaden the sound on the TV.

Yes, Virginia, we have an election in a few days. I’m so unexcited. What are the Koch Brothers and the Labor Unions and the doctors and lawyers spending a billion dollars on? The next Supreme Court Justice appointment is important, I suppose. The structure of ObamaCare (it’s not going to be repealed) will be debated. But we’ll all have gridlock in 2015, and I am quite happy with stalemate in Washington.

Two more years of thwarted politicians. I’ll take it. I wish the Koch Brothers and trial lawyers would just play volleyball. Everybody’s mood might improve.

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I guess nobody’s watching but me and my barber, but this has been a wonderful World Series. Giants versus Royals. Kansas City has remarkable speed, the best outfield defense since Willie Mays played, and an almost perfect bullpen. San Francisco has one of the best left handed pitchers since Sandy Koufax and a group of guys who just know how to win ballgames. To a baseball lover it’s the best thing since Karmelkorn. I wish the series was best of 17 so I could revel in it for two weeks more.

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The Dos Equis beer commercials with “the most interesting man in the world” are my favorite TV ads. I occasionally try writing my own copy. My lines are not quite as crisp, even to me, but I’ll share some. I challenge you to do better.

“Supreme Court Justices ask him for an opinion.”

“He blows bubbles that never burst.”

“Dolphins ask to swim in his pool.”

He’s the most interesting man in the world.

******

Happy Halloween. Welcome back NBA and Derrick Rose.

Question 1: How are you feeling today? Steady?

Question 2: Royals or Giants?

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Book Review: Eleven Rings

By Noah Graff.

Baseball season is finally almost done, and it’s time for the greatest athletes in the world to take the NBA floor. In honor of the upcoming basketball season, I am reviewing former NBA coach Phil Jackson’s fascinating biography, Eleven Rings: The Soul of Success.

Many basketball fans know a little bit about Jackson’s unconventional techniques for getting his teams to win. Jackson’s book fleshes out the methods and philosophy he used while he coached and gives the reader inside baseball, or in this case “inside basketball,” into what actually happened while coaching the Bulls and Lakers dynasties and when he was an important bench player on the New York Knicks of the late ’60s and early ’70s. Jackson was a member of the only two Knick teams to win NBA championships in 1970 and 1973.

The sometimes counter intuitive philosophy Jackson discusses in the book is thought provoking for any type of team leader. The challenges he describes often seem quite relevant to those encountered when running a business.

Jackson believed it was essential to teach his players to think for themselves. When the game was in a pressure situation, he wanted the players to feel confident making their own decisions. It is not uncommon for basketball coaches to have a book with 50 different plays that players have to memorize. The coaches yell the various plays from the sidelines the entire game. The Triangle Offense Jackson is famous for using serves to keep the team constantly moving organically around the floor. The players have a constant set plan of how to space themselves and set up plays they have practiced, but the system also leaves space for superstars like Michael Jordan and Kobe Bryant to create their own shots.

Eleven Rings, by Phil Jackson

It is common practice for NBA coaches to call timeouts after the opposing team goes on a 6-0 run. Yet, when possible, Jackson liked to let the game go a little bit longer than that before he called a timeout because he wanted the players to learn to figure out how to get out of a jam on their own. Jackson says that many coaches don’t want their players to think for themselves because they want the game to go exactly how they’ve envisioned, but Jackson recognized that no sports play, nor any aspect of life goes exactly according to plan, so the best approach is to come into the game as prepared as possible and then to simply live in the moment.

To prepare his players Jackson emphasized being ready for chaos and the unexpected. He is famous for conducting Bulls practices with the lights off or in total silence. He also liked to have scrimmages in which he would create two lopsided teams and then only call fouls on the better team. This frustrated Michael Jordan, who hated to lose any game, even when he knew it was rigged.

Before the Bulls played their nemesis, the Bad Boy Detroit Pistons, in 1990, Jackson showed the players a montage of clips from The Wizard of Oz. He showed a clip of BJ Armstrong driving to the basket and being clobbered by the Pistons’ front line, which he followed with a clip of Dorothy saying, “This isn’t Kansas anymore Todo.” Another clip showed Joe Dumars beating Jordan off the dribble, followed by a clip of the Tin Man lamenting not having a heart. He showed a clip of Isaiah Thomas driving by John Paxon, Horace Grant and Bill Cartright, followed by the cowardly lion wining about not having courage. The Bulls lost to the Pistons in seven games that year. Sometimes the best mental preparation can’t overcome body slams by Bill Laimbeer and side swipes from Dennis Rodman.

The book discusses three concepts of Zen which Jackson, also known as the “Zen Master,” tried to incorporate when coaching.

1. Give up control: Give players space to do what they want, even to be mischievous. Watch the players, and never ignore them, and never try to control them. This was a philosophy he used while coaching Dennis Rodman.

2. Trust the moment: Pay attention to what is happening at the present moment. The past is gone and the future is not here.

3. Live with compassion: A concept emphasized by both Buddha and Jesus. Lay down your life for friends, and take care of yourself as well. What you do for yourself, you do for others. What you do for others, you do for yourself.

I believe that Jackson’s Zen played a significant role in the six Bulls championships and five Laker championships. Teams with that much talent may have been able to win with different great coaches, but it took a special leader to win 11 times. To deal with 20 different egos the size of Texas and overcome amazing competition year after year requires a unique leader who can create a cohesive team of players with engaged hearts and minds.

Jackson starts his new job this season as team president of the New York Knicks. Will Jackson’s Zen principles and Triangle Offense transmitted down from the Knicks’ front office bring the first championship to New York since he played on the Knicks’ 1973 Championship team? Jackson is not to be underestimated, but my bet is it will take many more years and more patience than it did when he coached the Bulls and the Lakers.

Question:  Who do you think is the best coach of all time? (All sports, professional and amateur)

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Little Boxes Made of Ticky Tacky

By Lloyd Graff.

There’s a growing demand for rental units in the Bay Area. Courtesy of www.baycitizen.org

The stats tell us a lot about the economy, which is erratically bouncing along. Housing starts are up 6% over last year in the latest figures, but multi-family is jumping up 17%. In Palo Alto, California, this week, visiting my daughter, I’m getting a birds-eye view sipping my coffee while listening to the buzz and hum of construction tools in Silicon Valley. There is an occasional single-family house going up, but there are hundreds of apartments, hotel rooms and condos being built down El Camino Real, which bisects towns like Palo Alto, Mountain View and Cupertino where Stanford, Google and Apple call home.

The single-family home is not a relic yet, but the hamstrung banking system is still making the mortgage market a minefield, despite already low interest rates.

But the trend toward apartments is not just about the mortgage market. I think many folks, including young and old, are choosing renting versus owning in both real estate and other large expenditures. Real estate ownership for many people has been a losing proposition. I know it has been for me. My wife and I bought our home in the south suburbs of Chicago in 1979 for $130,000. It is a nice 3,000 square foot single-family home, two story, 5-bedroom with a full basement. Today it is worth under $200,000 and we’d struggle to find a buyer. We’ve paid off our original 8% mortgage and the 6% mortgage we took out to make our basement into a gym and rec-room.

Real estate has not been good to us. And for a million people who lost their homes after 2008, buying another house may not seem like a great idea.

For young people, building a nest egg with a 20% down payment is nearly impossible in the neighborhoods they find attractive. And retirees often prefer the safety of a rental after they’ve struggled to unload their home in an unfriendly market.

A change of lifestyle is another reason for the trend toward multi-family rather than single-family homes. Many young people are deferring marriage until well into their 30s. They live together rather than tie the knot. The lack of the official commitment of marriage dissuades putting down roots on a piece of property. But even if young people do have the inclination and the money to marry and buy a house, they may opt for an urban environment where single family homes are exorbitant or almost non-existent.

An interesting trend in the urban milieu is the conversion of old factories into lofts for housing, along with retail buildings being torn down to make space for new multifamily units. I certainly see that on El Camino Real in Silicon Valley. Mom and Pop stores and unsuccessful groceries make way for apartments, condos and hotels. Not much office space going up today, even in Palo Alto. Still plenty left over from the overbuilding of 10 and 20 years ago.

The non-ownership theme also rings true in the vehicle market. For the high number of young people in dense urban areas, owning a car is a luxury. Companies like Uber, Zipcar and Enterprise provide substitutes for owning a vehicle. Biking is also big in cities, as are home offices or shared office space.

The suburbs are not dead. Single family homes are not dead, but the tide is pounding against them. In the machining world, this works against the big earth movers like Caterpillar and the lawnmower makers, but every apartment and hotel room needs a toilet and sink, and there is plenty of demand for outlets for phone chargers.

Change with time or fade away like the white rhino.

Question: Has your home been a good investment?

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Is Business Good?

By Lloyd Graff.

Two to three 100-car crude oil unit trains a day now arrive in the Pacific Northwest.

My impression is that business is slowing a bit in our machining world, though IMTS exhibitors moved a lot of iron. Auction prices have trended softer for the last several months. The recent Belden sale brought prices considerably lower than I had expected during the summer when the company was taking bids from auctioneers. The recent mini collapse of oil prices has sent gasoline prices under $3.00 per gallon in low tax states like New Jersey. While this is something to be thankful for ahead of Thanksgiving, the oil patch is suffering from heartburn, adjusting to $80 crude. Break even for fracking in some places is in the $60 range, so the marginal producers are starting to fret and the makers of the drilling gear are already feeling their angst. Oil pricing may be part of a non shooting war with the U.S. and Saudi Arabia against Russia and Iran. Vladimir Putin and the Russian economy are beholden to oil pricing to keep the economy afloat. The U.S. Iran nuclear negotiations are at the crucial stage now. Obama does not like soldiers shooting, but drones and oil are weapons he may be willing to use. The hacking epidemic of credit cards emanating from the Kremlin is likely another front in the engagement with the Russians.

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The Keystone Pipeline may be permanently derailed in Obama administration infighting, but the Alberta oil will find a market. Now the big talk is that a trans-Canada pipeline will be built to Canada’s East coast starting in 2016. All those pipeline building jobs will stay up North, but Warren Buffet’s trains will keep inefficiently schlepping oil to the American West Coast.

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The average “Announced crowd” at Cubs games in 2014 was close 33,000, but the real number of people who may have actually attended a day game in a lousy season like this one might be around 20,000. The announced attendance at IMTS last month was 114,000, but the registration of attendees who were not working the show was 59,000.

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Grainger Corporation has provided 800 $2000 scholarships in the last six years for skills training in machining and other important trades. Grainger is a multi-billion dollar corporation, but they should be lauded for their contribution to the field. I recently talked to Erik Anderson, who has two machining firms in central Wisconsin. He is doing in-house training and working with local schools to bring skills into the company. If the Feds and the States can’t move the ball, at least for-profit firms are contributing to the public good while looking after their own bottom lines.

******

A shout out to Tony Bennett, the wonderful singer. He just came out with a new album with Lady Gaga, singing a duet of “Dancing Cheek to Cheek.” I watched him sing “God Bless America” without accompaniment at the San Francisco Giants first playoff game. It was a perfect solo. I was moved to tears, and got up from my seat to sing along with the 88-year-old master.

******

Eric Kester is writing a memoir about being a ball boy for Chicago Bears games. I read a powerful op-ed piece in the New York Times by him, talking about the players arriving at the games so hung over they could barely put on their socks. He describes the incredible physical beating they endure each game. The players certainly are modern gladiators, and we fans love their passion and all-out effort on the field. The bad behavior of the Ray Rices and Adrian Petersons can never be excused, but writing like Kester’s behind the veil view of their suffering, as we cheer, is fascinating and illuminating.

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It is estimated that 41 million people, almost all guys, play fantasy football. While the offensive lineman may be the most important players on the field, other than the quarterback, they do not make anybody money in Fantasy. It’s a pity. They need a stat. Anybody have an idea how to give them a Fantasy point?

Question: Is Business Good?

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Creative InTuition

By Lloyd Graff.

Chinese students at Wayne State University

I am watching an intriguing phenomenon in American education that has long-term implications for our economy and China’s political life.

There is a large and increasing influx of high-paying Chinese students from China coming to the United States for high school and college.

The University of Illinois has 600 students from mainland China in the Freshman class, 10% of the enrollment. Other colleges have taken a similar course. On average, the international students are paying twice as much as in-state students.

There is also a significant flow of high school students attending private schools around the country. Some have sprouted up specifically to attract affluent Chinese, who will pay over $40,000 a year in tuition for elite schools.

The media often decries American higher education for dumbing down the requirements for a degree, and many stars in Silicon Valley say college is for dummies. After all, Steve Jobs, Bill Gates, and Mark Zukerberg all dropped out after Freshman year to start their companies. But Chinese parents and kids crave the American high school and college experience.

Anecdotally, they say the reason they come here is to find “creativity,” which they see as the Holy Grail missing from Chinese education. Ironically, the Zuckerbergs and Gates’s left college for the same reason. Peter Thiel, the venture capitalist who backed PayPal and Uber and other phenomenally successful new enterprises, has made a public splash by advocating that creative young people forsake the college path to follow their muse and their dreams rather than getting bogged down in Botany. But the Chinese are pouring in because they think “creativity” is in the soil in Champaign and Bloomington and Austin.

Those Chinese parents and Peter Thiel are probably both right. For a Harvard dropout like Zuckerberg, Cambridge, Massachusetts, is sterile compared to an Animal House in Palo Alto where he lived while growing the nascent Facebook. But for 15-year-old kids from Shanghai, the intellectual freedom available at an elite American high school could be a boon.

On the other hand, for the Chinese elites running the Communist Party and trying to cope with ferment in Hong Kong, thousands of American educated young people heading back to the country from years of freedom in American universities may be rather scary.

The Chinese experiment with an authoritarian state apparatus and an economy fueled by independent entrepreneurs may be headed for a big collision. The Chinese government leaders have to be wary of a Jack Ma, the charismatic founder of Alibaba who found backing from Jerry Yang of Yahoo and Japanese entrepreneur Masayoshi Son to grow his phenomenal online business. Jack Ma is a one-in-a-billion guy who could somehow finesse his business around the Communist Party and endless government meddling to grow the company a million fold in a few years. A former English teacher, he is a self-taught entrepreneur. He did not find his creative mojo at Stanford or Urbana.

Will there be an English teacher like Jack Ma coming out of the 600 kids enrolled at University of Illinois in the class of 2018? Highly unlikely. Most of the students are starting out in Math and Science, with 3% in Liberal Arts.

Meanwhile, I await the pushback from Illinois parents and young people who missed the cut at Champaign because of 600 full tuition payers coming from the Chinese Mainland.

Question 1: Is college worth the debt?

Question 2: Can you teach creativity?

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Saving Ferris

By Noah Graff.

Recapturing the Ferrari Scene in “Ferris Bueller’s Day Off”

Slight shameless self-promotion.

I need to tell all of you about my new opus that debuted on YouTube this week.

I made a documentary entitled “Saving Ferris” about the Chicagoland locations of my favorite movie “Ferris Bueller’s Day Off.” In the documentary I go to almost all of the filming sites of the movie, from the Sears (Willis) Tower, to Wrigley Field, to Cameron Frye’s famous garage that housed the Ferrari California Spider. In the documentary I talk about where and what each location is and how they have changed over the last 25 years, but I also strive to recapture the experience of Ferris’s perfect day. I attend a Cubs game, drive down Lake Shore Drive in a Ferrari, and run through the same North Brook backyards run by Ferris at the end of the film.

I won’t say anymore. Check it out if you have a chance. I’ve embedded the trailer and first episode of 14 total. The second and third episodes can be found on my YouTube channel, Road Trip Film Productions.

If you really like it, I’d appreciate it if you could spread the word on YouTube or Facebook. Every few days more videos will be released.

Enjoy!

Question: What’s your favorite scene in “Ferris Bueller’s Day Off”?

“Saving Ferris” Trailer

“Saving Ferris” Episode 1

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Unskilled at Hiring the Unskilled

By Lloyd Graff.

Cleaning Process for Screw Machines at Graff-Pinkert

These last several months have been a struggle for me to find workers for the cleaning and painting department of our used machinery business, Graff-Pinkert. You might think, with so many millions of Americans unemployed or underemployed, it should be quite easy to find manual laborers who want to make $11 per hour with the chance to get on the company health insurance plan worth $5 per hour more, plus virtually guaranteed overtime pay and a year-end bonus.

But it isn’t.

I’d like to share my recent experience.

First of all, few women apply for the cleaning and painting jobs. Seemingly, they self-select because the advertising indicates it is a fairly dirty environment to work in, with dirt, grease, oil and chips. In retrospect, I find this a bit surprising and regrettable, because women are moving into all kinds of jobs formerly the exclusive domain of men.

So we mainly have guys to choose from.

During the summer we found a college senior from the University of Illinois, we’ll call him Fabio, who was majoring in Statistics. He was small in stature but savvy and industrious. He caught on immediately to the job and applied himself with a happy attitude. He was a keeper. I noticed it immediately when I asked for a volunteer to prepare our raised tomato garden for planting the vines, a yearly ritual at Graff-Pinkert. He immediately volunteered, which enabled him to work directly with me for a few hours. Fabio understood work was a social enterprise and a physical effort. Without the ability to get along with co-workers and supervisors you do not last, even in a manual labor job.

Unfortunately, Fabio left for college at the end of August and his replacements paled by comparison.

The first failure was hired via Craigslist. We’ll call him Frank. A little guy, he seemed eager for a job. He was 19, a high school graduate living with his grandfather in the area. He seemed shy in the interview. A check for arrests was clean, and I decided to try him on our fledging night shift. I also hired an 18-year-old, Dick, who was in a program at the local community college to prepare kids for joining the workforce. The counselor at the college said he was a good kid, that he was hardworking and “tested off the charts” for technical aptitude. He told me he aspired to be an electrician.

Our nightshift foreman quickly reported problems. Frank disappeared for lengthy bathroom breaks. The foreman also noticed doors were open or unlocked when he was quite sure they had been locked by the first shift group. A few nights into Frank’s short stint at Graff-Pinkert several guys that our foreman called “gangbangers” invaded the parking lot at 11:00 pm to meet Frank when he was leaving work. Our foreman was extremely scared and locked himself in the lunchroom until they left. He reported this event to me the next day. A few days later we discovered that $700 of petty cash from the office was missing.

I could not prove Frank took the money, but I suspected enough to fire him immediately.

Dick, the other kid who had “tested off the charts” was another problem child. He retreated into his phone constantly, was almost totally incommunicative to co-workers, and appeared oblivious to his surroundings. His co-workers saw him as a slacker and constantly complained that he wasn’t doing his share. He also had become chummy with Frank prior to his firing.

In my opinion this kid suffered from being socially ill equipped for a workplace. I felt a little badly that we did nothing to prepare him for the job, but I did not have the inclination to coddle him when his peers had completely rejected him.

Meanwhile, we had hired a temp though an agency who was older and street savvy. He knew he had a good gig and he applied himself, making himself valuable on the shop floor. He did not look like our other employees, with his hair in dreadlocks, but he earned their respect with diligence and following directions. I hesitated to hire him full-time because of health insurance costs, but the temp agency’s weekly charge virtually matched the cost of the health plan.

I also had considered hiring an older guy who seemed intelligent and pleasant, but his 60 extra pounds scared me for such a tough job.

Then, out of the blue, Derrick came along. He had a “big personality” and was completing a course to get a commercial driver’s license. His job pitch appealed to the sympathy factor. He said he was out of work and virtually destitute. He seemed eager and strong so I gave him a chance.

He was great for the first week, then he started to get into arguments with the other men on the floor. He demanded “equality with radio time,” to listen to gospel music, not a good idea for a guy in his second week. He approached me to buy a semi-truck for the company, which he would drive. He started slacking off in the plant and taking long bathroom breaks, while making a grandiose effort to ingratiate himself to me. Our guys hated him. I fired him and received a soliloquy about how he would be out on the street.

I have a better idea about the workforce after these encounters. I respect Starbucks’ ability to hire and train kids, and pick them skillfully. Seemingly, we do not have the knack.

I see now why so many young men slip through the cracks in the workplace. They do not understand the demands of work, and bosses have little time and inclination to teach people what it means to work.

Question: How can we do better at hiring and firing?

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Thank God for America

By Lloyd Graff.

Jewish Americans. Courtesy of www.haaretz.com

Wednesday was the first night of the Jewish New Year holiday, Rosh Hashanah. I took the day off from work, went to the Synagogue and thought about my life. We celebrated by having friends and family over for a big meal.

I am grateful to live in a place that has allowed Jews to flourish and prosper. America is such a crazy wonderful exception in a world of intolerance and outright hatred. Anybody who has lived long enough to know people who fled the Nazis or has seen photos of Auschwitz, or like me, had the privilege to visit a concentration camp and walk into the shower room where millions were murdered, appreciates what a gift it is to grow up free in America.

My brother-in-law Maury was born in Italy and came to this country when he was three years old in 1940. Many of his relatives died in the Holocaust at the hands of the Nazis. He feels the immense gift of living in this country even more vividly than I do, as a European thankfully dropped into America just days before his family would have been trapped in the old country.

Today, American Jews fight wars vicariously through our cousins in Israel. We watch movies about World War II, but it feels like another planet to most of us. For me, growing up in the 1960s, the Holocaust burned hotly in my gut. I had nightmares about my ancestors suffering and starving and dying in Dachau. But today those dreams and visions are more remote. The Holocaust is no longer a reason, by itself, to be a practicing Jew in America, because of the country’s religious tolerance. Freedom and equality in the U.S. have enabled many Jews to move into the business and political elite. It’s a tantalizing pleasure to fit in with everyone else, rather than always thinking about being Jewish and different.

Unfortunately, much of the world still seems to despise Jews like the bad old days. Anti-Semitism in France and Belgium is rampant. The Arabs generally still hate us. The Turkish government has become an enemy. Venezuela is a hostile place. All the more reason to treasure the gift of being born free here in the United States.

The big challenge for me is to stay engaged with the spiritual aspects of Judaism without the external challenge of hostility and alienation that Jews have almost always lived with.

I am not longing for outsiderness. I know how great we have it here, and I am acutely aware that America is an aberration in a world of hatred and jealously. I see my grandchildren growing up so sheltered and innocent, yet they go to school in a fortress patrolled by armed guards because the parents of the kids know the bigger world still loathes the Jews.

It is the great challenge of today’s American Jews to stay engaged in Judaism with the threats to our well being seemingly an ocean away. But I fear deep in my gut that these last 50 years in America have been too good to last.

Question: Do you think the United States is tolerant towards minorities?

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A Robot For Everybody

By Noah Graff.

Universal Robots’ booth at IMTS 2014.

One of the definitive currents I see in the economy of the 2010s is the democratization of technology.

Computers and devices cost a tiny fraction of what they did just a few years ago, and the learning curve to operate them has eased dramatically.

For a few hundred bucks a person can buy an HD video camera, edit video on a consumer computer and then broadcast what they’ve shot to the world online for free. People can create Web sites with free open source software like WordPress that they can learn to operate in a few days. A person can buy a Haas MINIMILL for $35,000 and make parts in his garage.

Universal Robots has continued this democratization of technology with its robotic arms, which sell for between $34,000 to $44,000. For the price of a luxury car, a small machine shop can automate its operation, saving on labor costs by automating applications such as pick and place processes. Also, the simplicity of the robots decreases the need for skilled labor because the robotic arms made by Universal Robots are simple enough that a technically savvy person can learn to program and operate one in a half hour. The company’s robotic arms also create virtual barriers around them for safety if people move too close, a tremendous advancement from traditional robots that require large expensive physical barriers to surround them. It’s not Cyberdyne Systems Model 101 (your favorite cyborg Governor with an Austrian accent), but it can still be a terminator of people — in a machine shop.

At IMTS 2014, I visited the Universal Robots booth and interviewed the company’s CEO, Enrico Krog Iverson. I also talked to Empire Robotics’ President, Bill Cully, whose company was sharing the Universal Robots booth. Iverson told me the story of how Universal Robots started. The company was founded in Denmark in 2005. Engineer Kristian Kassow was working on food industry applications for robots — one of the tasks being to place pepperoni on pizza. He combined forces with Esben Østergaard and Kasper Støy, who were working on a PhD project about the market for robots. Their goal was to change the definition of a robot from a heavy, expensive, and unwieldy technology that could only be utilized by small group of people, to a simpler, lighter, cheaper technology that many people could afford and operate.

Empire Robotics’ product, the Versaball, which it calls an “agile robot gripper,” has further enhanced the practicality of the robot arms from Universal Robots and those of other robot brands as well. The Versaball, which sells for just a few thousand dollars, has the ability to pick up objects of diverse shapes and materials. Empire Robotics’ team demonstrated how the Versaball, right out of the box, can work together with the robot arms of Universal Robots. It has several sets of holes on its mounting component that make it ready to fit physically onto a variety of robot arm models, more importantly, the Versaball’s computer easily integrates with the computer control of the robot to which it attaches. The Empire Robotics team raved about the robot arm from Universal Robots, saying that the person at the booth operating the robot learned to program it in a day, and he had never programmed any Robots before.

Question: Do you feel bad when human workers are replaced by robots?

Demonstration of Robotic Arm from Universal Robots Integrated with Versaball of Empire Robotics (IMTS 2014)

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Scuttlebutt From IMTS 2014 and More

By Lloyd Graff.

Fire at Metal Seal Precision in Mentor, Ohio, on July 25, 2014

Two months ago, Metal Seal Precision of Mentor, Ohio, had a fire. The incident is a warning to people who run screw machines that the workplace is a dangerous environment. Nobody was injured, but it caused a huge mess from the smoke, heat and water. John Habe IV runs the family owned company and he is one of the smartest, shrewdest guys in the turned parts business. He is doing a massive juggling act, getting his insurance money, reviving the Metal Seal shop in their nearby Arrow Manufacturing plant. He currently is deciding which machines to save and which to replace while he attempts to keep his clients happy and supplied. IV, as John Habe is sometimes called, is one of those guys with the temperament to pull off this balancing act.

*****

Autocam, the big machining house based in Grand Rapids, Michigan, sold out to NN Inc. in July for $300 million. John Kennedy, the owner of the company, which he founded 25 years ago, has had a brilliant if bumpy career in the machining world, but he certainly is riding the wave of the improving automotive machining market of 2014. Kennedy appears to have learned from his ill-fated foray into the European precision machining arena in the early 2000s. This time, as the economy rises, he is harvesting the money while betting on the continuing up cycle by taking a big piece of NN Inc. stock to go along with $244 million in cash and the assumption of $30 million in debt. Plus he is keeping his medical business.

The deal sounds a lot like the sale of PPC of Syracuse in 2012. Belden Wire paid $500 million to the founding Mezzalingua family for a big Davenport and Hydromat shop that knew how to make cable TV connectors. Meanwhile, the very bright third generation operators of the company retained the intellectual property for the next iteration of products for the industry.

*****

The Precision Machined Products Association (PMPA) in Cleveland is a well-run trade association that our used machine tool company Graff-Pinkert belongs to. Mike Duffin, who had led the group successfully for 11 years, stepped down a year ago. The PMPA replaced him with Michael Kobylka, which turned out to be a marriage not made in heaven. Kobylka moved on by “mutual decision” last week. Rob Kiener, a longtime respected PMPA staff member, now has the Interim Executive Director title. My guess is that he will stick in the job. Usually when a person gets a job on the rebound like Rob, the people at the firm or trade group will rally around the guy who has been a reliable stalwart. For what it’s worth, I think Rob would be an excellent successor.

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One of the things I confirmed at IMTS, is that Mexico is becoming the new Detroit of North American manufacturing. With auto company after auto company building capacity in the country, it is estimated that 4.5 million cars will be manufactured there by 2019. Parts suppliers are stepping over each other to create enough capacity to meet production needs. Much of the production will still come from plants in the United States, but with NAFTA there is a big push to build capacity in Mexico. Very few of the parts will come from border plants. It is too messy and dangerous near the U.S. border — the interior of Mexico is much safer. But the challenge in Mexico is the same as in the U.S. and Canada, but more so — a lack of skills. Hydromat is putting in place full-time sales people and two full-time service people in Mexico. The company also has two bi-lingual field technicians working out of St. Louis. The ramp-up is an exciting opportunity for American machining firms, but certainly one with huge obstacles.

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Wondering what it costs to exhibit for six days at IMTS? Plenty. The scuttlebutt is that DMG MORI budgeted $13.5 million for their extravaganza. Hydromat put in $850,000 for their exhibit. Swisstek Inc. had two Swiss CNCs in a small space and spent $85,000. Universal Robot spent $250,000, which included the expense of flying its Board to Chicago from Denmark, but the company corralled orders for 50 robot arms and acquired 1200 leads.

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I love farmers markets and farm stands in the summer. I visit a local farm several times a week during the season for obscenely delicious sweet corn and melons. As I was leaving recently, I saw a half dozen pickers laboring in the field next to the stand. It startled me to see how hard they were working, stooping awkwardly to pick the delicious ripe tomatoes. This food that I love so much during the short season definitely comes with a human cost.

Question: If your factory had a fire, would you replace your capacity with similar equipment? What might you change?

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