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?

Yes.

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 leanluxe.com. 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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Machining 2025?

By Lloyd Graff

If mighty General Electric is in such bad shape that its Board is considering breaking the company apart, it makes one consider how our best assumptions about the future may be wrong.

A few years ago, the consensus in the marketplace was that we would be running out of electricity generating capacity in less than a decade. With the slow approval process for utility plants, the overriding opinion was that a shortage would drive up the cost of electricity.

It has not played out that way. Natural gas has taken an increasing share of generating capacity. It is now up to 33%. Coal, even the cheap good stuff from Montana, is losing out. Nuclear is dying because of the expense of guarding the plants. Wind and solar, with the help of government subsidies, are growing. Shale drilling has defied the skeptics by expanding American fossil fuel production.

The consensus 10 years ago was wrong about just about everything electrical.

It gives one pause no matter what business you are in.

What about automotive? The internal combustion engine has been the mainstay for 100 years, but do you want to bet on it for 2025? Tesla can’t get out of its own way trying to build its mid-priced car, but the Japanese, Germans and Americans all know how to build cars in volume. They will master the electric car. They might have to buy batteries from Elon Musk for a few years, but electric vehicles seem to be coming in the millions. What will that do to all the machining firms who are so good at building combustion engines and linkages?

Then there is the question of how many cars will be bought if autonomous cars take over the market. Presumably a lot fewer after the big changeover takes place.

As a used machine tool dealer, my bread and butter is the 10- or 15-year-old machine. Companies can now depreciate equipment quickly and can expect a significant residual value 10 to 15 years down the road. But that assumption could be wrong if the demand for machined parts in the marketplace deteriorates significantly in five years with a decreasing auto market. Additive manufacturing could also take a piece.

For example, just look at the challenge faced by Coca Cola, Gillette and Target. Did they see the decline of soft drink popularity, the Dollar Shave Club competition or Amazon’s domination of retail?

The medical implant business has thrived for 20 years, but it has been dependent on third party payment. Can we be confident insurance firms and Medicare will be as generous in 10 years?

I know I have been painting an ugly picture, but I just gave away 40,000 pounds of screw machine bones of the machines that were our mainstays just 10 years ago.

Today most people are optimistic. Private equity firms love machining companies because they are often great five-year investments. Lenders are happy financing machinery for 3 to 5 years today. Manufacturing in America is a good gig today. Hallelujah.

But remember GE’s electricity generation, a business that seemed like it would always be a dynamo.

Change comes fast.

Question: Will the machining business in North America be a good place to be in 2025?

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Acmesaurus

By Lloyd Graff

The sound that a 20 ton traveling crane makes as it stolidly rolls north to south, south to north, on its electrified path, is very much like that of a lumbering freight train.  I heard it all yesterday, backing and forthing, carrying its 700 pound containers of old dinosaur bones closer to their new home, 400 miles to the east.

Of course, they aren’t complete tyrannosaurus skeletons being transported.  They are a pile of Acmesaurus bones, the steel innards of 40-year-old multi-spindle screw machines unearthed from cabinets and shelves after being virtually buried for decades.

I made my peace with selling the remains of machines that had been our meat and potatoes for so long.  Back in the last century of the last millennium, National Acme screw machines were king.  They were frothing giants like Tyrannosaurus Rex, and they ruled the turning industry, but today we are just shipping some heavy numbered bones, being sold for parts to repair or complete somebody’s fractured Acmesaurus.

Containers of old ACME-GRIDLEY  parts at Graff-Pinkert

I was shocked we had so many unmatched bones left.  They had occupied the shelves so long I no longer really took note of them, sort of like books you forget you own, squatting on cheap space on your shelves.

Eighteen months ago I made a promise to my wife Risa and to myself that I would get out of the dinosaur business one way or another. I was in the midst of suffering through a second straight miserable year in the used screw machine business and knew I had to make major changes or my bank would make them for me.

For 40 years, the business was generally a fun game that I played, but after 2008, it wasn’t nearly as much fun. Multi-spindle automatics were being seen by more and more of my traditional customers as unproductive, clumsy dust catchers—not core equipment to invest in.

In retrospect, one reason I kept investing in Acmes so long was because I was trying to prove to myself that my choices were correct and my brother Jim was wrong in wanting to change the business focus of Graff-Pinkert away from Acmesaureses.  But Jim was shrewder than I was in recognizing the long-term trends in the machinery business.  Acmes were dinosaurs; rebuilding multis was a really hard business to make a living in; and expensive real estate, high wages and big health care costs were eating the profits in the dinosaur resale game.

Overhead crane at Graff-Pinkert carrying old ACME-GRIDLEY parts

The people who bought our Acmesaurus parts knew what they were buying and they paid accordingly. Forty thousand pounds of National Acme parts and pieces went for $13,000, plus $4,000 for a skeleton of a 1-¼  RB8 Acme. The buyers have cheap real estate, productive and not overly expensive employees, low utility costs and a good reputation in the business.  They also acknowledge it’s a hard game.  A lot of stuff they bought from us will never be used, but for 13 grand, they don’t have to worry about it.

I feel lighter getting out of 40,000 pounds of idle iron but I’m a little nostalgic as I hear the rumble of the crane shifting the tonnage to a new owner.  We are still in the multi-spindle refurbishing business, selling primarily Wickmans.  But refurbishing machines is now less than half of Graff-Pinkert’s volume. In a good month, refurbishing pays three quarters of the bills of the total business, which is okay because it builds our brand, augments our spare parts operation and provides a base of talent and knowledge that nourishes the rest of our business.

I know a lot of folks in the machine tool business who love the iron.  I don’t.  Those bones rumbling down the craneways are just dead iron to me.  What I love is the creative challenge of matching buyers and sellers, of turning dross to gold—occasionally hitting the jackpot, of connecting the dots that nobody else even saw, and feeling the combustion of ideas with Noah and Rex Magagnotti.

Question: Does it make sense to invest a lot of money to upgrade an old Acme?

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Making the Nut

By Lloyd Graff

We all absorb things from our childhood that literally wire our cerebral cortex and remain with us as we mature. There are images, sayings, emblems of fear and instigators of smiles. We soak up stories and develop a narrative that frames our lives.

As I thought about writing this piece the line I remembered most vividly from my father while growing up, of a thousand things I heard from him, was, “You’ve always got to make the nut.” To him that meant you had to cover your costs every month. Losing money in business was FAILURE. It was just about the worst thing you could endure short of death.

I was reminded of this after hearing a captivating interview with Sara Blakely, inventor and owner of Spanx, a fabulously successful young company that germinated when Sara cut off the feet of a pair of pantyhose and envisioned a new undergarment that nobody else had imagined. She was interviewed by James Altucher whose podcast I highly recommend.

One of the first things she talked about was her nightly dinner table conversations with her dad. He used to ask her, “How did you fail today?” This was not to tear her down, but to get her comfortable with the idea of failure. She got comfortable with failure when most kids were trying to ace every test or hit a home run every time up at bat.

She also became comfortable with embarrassing herself. Later, she even tried to be a stand up comedian, even though she wasn’t great at it.

Her father was trying to help her understand that failure wasn’t like death. It was a setback, something to learn from. Something even to laugh about – not the end of the world.

This was very different from the narrative I grew up with. I felt like I was the “designated winner,” and I was always expected to be the best. Failure was for other people.

Not that I was always successful, but success was always expected. Just like my father always had to “make the nut,” I felt like I always had to be successful to be valued, though that may not have really been the case.

Sara Blakely’s experience of having a parent normalize failure, though not extol it, was much healthier. Being able to experience disappointment without withering or blowing up seems like an ideal way to grow up healthy and be comfortable taking risks.

Through the years, I’ve had plenty of failure. I’ve lived through excruciating periods when I didn’t “make the nut,” and my life did not end in disaster.

In retrospect, I wish I had not gone through childhood and high school always being “successful” even when I knew in my heart of hearts that I failed often, like almost everybody else.

I also feel sad for my father who was so terrified of losing money in business, of not “making the nut” even for one month. He was always desperate about economic security, though by most standards, he had nothing to worry about financially.

“Failure” is such a subjective word. Sara Blakely’s father attempted to frame it for her in a positive way. If he truly succeeded at it, I think he was one of the very few.

Question: What was one failure you had this week?

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