A Brave New Romance

By Noah Graff.

Courtesy of Huffington Post

My search for a romantic life partner is a dramatically different process with different goals than those of my parents and grandparents. Today’s dating world revolves around online dating sites, text messaging and partner experimentation. It yields opportunities to go out with tons of diverse people but produces a lot of confusion as well.

I recently listened to the book, Modern Romance, written by the hilarious young comedian Aziz Ansari. The book analyzes the dating world of today’s current singles (like me), particularly those around my age of 35 and younger. Ansari, age 32, relates to my current search for a soulmate, giving some perspective that hopefully will help me eventually figure things out, and JUST SETTLE DOWN ALREADY! The following blog gives you a taste of the book’s insight and a little window into my own search to find THE ONE.

One distinction for my generation of daters is that we marry at a much older average age than our predecessors. In the United States, women today marry at an average age of 27, men age 29. For his research Ansari interviewed residents at a retirement home who had married at an average age of 20 for women and 23 for men. Most of the “older folks” he interviewed shared that they had married people with whom they lived in close proximity. They often had lived across the hall in the same building, were next door neighbors or went to same school growing up. Fifty years ago, it was harder to meet a lot of people, long distance travel and communication were more difficult as well. Also, people felt that it was important to find a spouse in their early 20s because marriage was the major step to adulthood. After high school or college it was assumed that a person got married and left the house. Hopefully he or she would settle down with someone compatible, and a companionable love would grow over time.

Society’s attitudes about marriage have changed over the decades. Women have more career choices, views about abstinence before marriage have changed—thank God, and our expectations are simply different. Now people of my generation have the opportunity to experience adulthood into their 20s and 30s without having to marry. We have the opportunity to focus on college, exploring various careers and pursuing side passions (such as making films and salsa dancing, in my case). We also have the opportunity date a lot of different people, hopefully learning from past relationships to better understand what we want when we finally settle down. Because we have such extensive time and opportunities, the majority of people today aren’t looking for just a decent life partner, they are searching for a soulmate.

Today people have more time and and a myriad of tools to meet new people, such as online dating sites, which can create overwhelming quantities of options for potential partners. Of Americans today who describe themselves as “single and looking,” 38 percent have used online dating. When a user signs up for an online dating site, usually the person is asked to select what type of relationship he or she is looking for. Often the choices include selections such as marriage, long-term relationship, short-term relationship, friendship, and sometimes even casual sex. The user then gets to sift through thousands of profiles, reading (often ignoring) self descriptions and pouring over endless photos. Users can systematically filter which types of people they want to look at, requesting specific body types, religions, drinking habits, smoking habits, sexual preferences, you name it. The dating sites also attempt to use algorithms to match people they believe will like one another.

According to  Ansari’s research, at the time Modern Romance was written, OkCupid, one of the largest Internet dating sites (which I recently signed up for), creates around 40,000 dates everyday. A study from a University of Chicago researcher found that between 2005 and 2012 more than 1/3 of couples who got married in the United States met through an online dating site. In that period, online dating led to more marriages than work, friends and school combined!

Match.com launched in 1995, which was the first online dating site that allowed users to select one another in real time, rather than solely using algorithms to automatically match users. When the site launched, Gary Kremen, the company’s founder and first CEO, proclaimed to the world that Match.com would “bring more love to the planet than anything since Jesus Christ.” No doubt it has created a lot of loving relationships—along with friendships, frustration and broken hearts, things which of course often go hand in hand.

So am I better off as a single in the age of a “Dating Super Highway,” in which I can meet thousands of singles from all over the world on my iPhone? Or would I be better off if I had three choices for a wife, say…choosing between my next door neighbor, my best friend’s sister and the Rabbi’s daughter? Studies show that when people are offered a huge selection of options on a menu, they are less likely to be satisfied than if they are presented with a small menu with just a few really good choices. I often feel like this when I go to restaurants like the Cheesecake Factory where the menu is actually a spiral notebook. I get overwhelmed by the vast number of choices. I obsess over which dish to select as though it’s my last meal. I suspect this could annoy impatient fellow diners at my table as I send the waitress away two or three times before I can decide.

Modern Romance brings up the theory that the same food menu phenomenon exists in today’s dating world. Daters wonder to themselves, “Is this guy or girl really the one, or can I find someone better?” “‘Does settling down actually mean ‘I’m settling’?” Is my menu indecision to blame for me being 35 years old and single? I hope not. Perhaps other people I was interested in chose a different option than me, thinking (wrongly of course) they could do better.

Maybe it’s a foolish quest to look for a soulmate? Personally, I think there are many good matches for a person out there, but there aren’t any PERFECT matches, so choosing one person to stay until death do you part can be stressful. A person can always go back to the Cheesecake factory for another meal—unless it’s truly a last meal.

So is choosing a wife, like choosing a last meal? Oye! What am I saying? I better choose carefully.

Questions: Is looking for a soulmate unrealistic?

Do you wish you had married later in life?

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It’s Rarely in the Bag

By Lloyd Graff.

Courtesy of www.benzinga.com

One of the things that has always fascinated me about the used machinery business is the daily assessment of risk and reward in the deals we go into.

Every deal for my company Graff-Pinkert is inherently a gamble on the future value of a discarded machine tool. It also is a judgment call on the risk assessment of our competitors who may or may not know about a machine we have interest in.

My son Noah calls it a daily treasure hunt. It sounds better than “going to the gambling tables.”

I think I understand the risks after being around the game for my entire business career. But I often wonder about my customers who make big bets on automotive or military contracts, knowing that some of the risks may not be apparent when they bid. I have heard of so many projects which demanded hundreds of thousands or millions of dollars of capital investment, only to be canceled out after a month or a year of operation.

In the high production turned parts arena there is a fascinating opportunity popping up with the enormous recall of Takata airbags taking place by Honda, Toyota and a host of other auto companies.

The car companies, at the behest of the U.S. government, are recalling 34 million airbags because about 100 of them have prematurely fired over the last 13 years. The occurrences are associated with heat and humidity causing a degradation of the propellant mechanism, which potentially results in shooting metal shards at a driver and passengers.

For the companies that have the money, expertise and guts to bid on the Takata work the rewards could be enormous. This kind of volume is rare today, even for automotive vendors. But with airbag work, the players know that there have been many washouts of audacious turned parts firms who dared to venture into the Takata briar patch, along with some big winners.

For those companies who want to capture airbag contracts this time around there are additional roadblocks. Lenders who normally might have jumped at juicy capital equipment loans for solid machining firms are scared of airbag replacement work because of the sheer magnitude of the recall. This is a “Tylenol sized” event. Takata of Japan, along with Autoliv, and TRW produce most of the airbags, Takata with its closest ties to Honda and Toyota. Takata invented the airbag 25 years ago and has ridden it to riches, but this colossal recall could devastate the company.

Some people think the recall could put Takata into bankruptcy, but the people who are gambling on making the parts believe the company is too important to the car companies to allow it to fold. It is the Toyota, Honda, GM, BMW, etc. name on the recall, not Takata, which means it is highly unlikely the airbags will not be provided. Who pays for them is a question mark, but the smart money is on somebody paying for the hardware and installation. The buyers of parts might be slow in paying as they work out who is financially responsible.

Another unknown is how much business will end up with Autoliv and TRW, the other big airbag players. But Takata desperately needs parts now and they are inclined to place work with experienced suppliers. For them it should be a bonanza. Unless the unforeseen happens—which as Takata certainly knows—can occur.

Question: Is the safety rating the first thing you consider when you buy a car?

Lloyd Graff is a Writer and the Owner of Today’s Machining World, and also runs Graff-Pinkert, a used machinery firm in Oak Forest, IL.

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Is Your Best, Your Best?

By Lloyd Graff.

Joe Maddon, Manager of the Chicago Cubs

How do you change a loser into a winner? This is a question that has intrigued me for decades as a sports fan and a business owner. I think the question can be refined today to, “how do you change a non-winner into a winner?” or, “how do you transform mediocrity into superior performance?” Winning doesn’t mean a championship, and success in business can be defined as longevity and happiness with performance, even if the owners do not get mega rich.

But there is a mindset in sports or business or academia that consistently moves the needle toward success vis a vis one’s peers. This attitude was exemplified and articulated quite brilliantly by Joe Maddon, considered by many to be the best manager in Major League Baseball by his stewardship of the Tampa Bay Rays and now the Chicago Cubs.

A few days ago, a Cubs pitcher named Tsuyoshi Wada was starting a game and the team took a 6-0 lead in the first inning. Maddon watched each pitch intently as he always does and noticed Wada was not sharp. Wada gave up a home run and his pitch count for three innings elevated significantly. With the Cubs leading 6-3 Maddon told Wada in the dugout that he was finished after just three innings, thus he could not get credit for the win because he did not pitch the necessary five innings.

The Cubs bullpen pitched the final six innings and the team won the game, but not Wada in the score books.

Joe Maddon was asked about his decision to lift the starter the next day and relished the opportunity to state his reasoning.

He stated forcefully that he wanted to illustrate clearly to a young team that had been the epitome of failure and non-success for 100 years that mediocrity was no longer the norm. Wada was not on his game and his previous record did not indicate that he would be able to reverse course. He was not trying to get Wada a win, he was determined to get the Cubs a win, and he would do everything possible to insure that. One more win could be the difference between making the playoffs or not.

Maddon’s actions were a message to all of the players that the team was no longer in rebuilding mode. They were supposed to go all out every day, every play, if they wanted to be winners.

As an owner and manager of two businesses I find this attitude inspiring and scary, because I know Maddon is right on and I know that I often take a different approach. I do not always challenge myself or my people to go all out, all the time. Honestly, at 70, I don’t feel like I can be “all in” every day. Therefore, I tend to give my employees a pass at times to clock watch and sometimes go through the motions without always calling them on it. I personally am satisfied to make a good living and pay my taxes at the end of the year, even if I do not always top myself.

I suppose if I was a ballplayer for Joe Maddon, he would be looking to trade me for a more aggressive, type A winner.

Business is not Major League Baseball. I get that, but Maddon makes $5 million a year because he can turn non-winners into winners. The best manager, according to baseball analytics, is worth five to seven games a year. Doesn’t sound like a lot in a 162 game season, but it’s the difference between making the playoffs or finishing fourth for a lot of teams.

For me, the attention to detail, the periodic reminder to do something, the compliment or the thoughtful reprimand, the to-do list that actually gets done, are things that really do move the needle in a small business. Sometimes you have to fire somebody who is adequate at what they do for the firm, but they are a bad fit.

I am slow doing the hard things in my business, so I admire a manager like Joe Maddon who seems to relish doing the “right thing” even when it’s hard.

Question: Do you do your best every day?

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It’s Rocket Science

By Noah Graff.

SpaceX unveils Dragon V2, the world’s first commercial manned reusable spaceship. www.extremetech.com

After reading Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future by Ashlee Vance, I understand why many folks are proclaiming that Elon Musk is one of the greatest visionaries of our lifetime. Much like Steve Jobs did, he envisions products which most of us would think impossible and then finds ways to actually build them. But his ambition is not to invent a clever product or service simply for profit, he wants to create products with the purpose of changing the world. He wants to stop our dependance on fossil fuels. He wants to put a colony on Mars.

The book goes into much more than just Musk’s manufacturing philosophy. The reader is given a glimpse into Musk’s drive to run two or more companies simultaneously, flying back and forth between LA and the Bay Area every week, often crashing on couches at friends’ houses, such as that of Google’s Larry Page. Musk refuses to ever compromise his vision, whether it be combatting investors trying to take control of his companies, challenging employees who claim his demands are unrealistic, or having to spend millions of his own money on rockets that fail. It is not strange for Musk to demand an engineer build a product for $5,000 that had previously cost $100,000. He holds degrees in physics and business and understands every component going into his rockets and cars. As the author, Ashley Vance writes, “(Musk) is hands-on to a degree that would make Hugh Hefner seem inadequate.” So when Musk tells someone to make something a certain way, he is unlikely to accept when they tell him it is not possible. Sometimes when employees cannot accomplish what he wants, he tells them that in addition to running a rocket company and a car company he is going to take on that person’s job as well. He then actually takes on that other person’s task and accomplishes what the person told him was not possible. “Employees fear Musk, they adore Musk, they give up their lives for Musk, and they usually do all of this simultaneously,” Vance writes.

In the two main companies Musk manages and helped found, SpaceX and Tesla Motors, Musk has proven that with superior, often counterintuitive methods of manufacturing it is possible to blow away his competitors and accomplish feats never even attempted before.

His production philosophy for both SpaceX and Tesla Motors is to manufacture as much in-house as possible, contrary to the conventional wisdom of today’s economy of outsourcing the majority of components all over the globe.

Musk’s signature factory design in the SpaceX and Tesla plants begins with a glossy epoxy coating applied over concrete on the floors and a fresh coat of white paint slathered over the walls to create a clean cheerful atmosphere. When he moved into the original SpaceX factory he interspersed Ikea desks for engineers and computer scientists throughout the factory so that the people designing the rocket components could sit with the welders and machinists building the hardware. Today the SpaceX factory features a three story glass enclosed office space in the center of the shop. Musk wants all his engineers to watch what is going on with the machining process at all times. He wants them to be forced to walk through the factory and talk to the technicians before they reach their desks.

Keeping the majority of the SpaceX engineers at the company’s Hawthorn California campus also contrasts with traditional aerospace companies which prefer to cordon different engineering groups off from each other and typically separate engineers and machinists by thousands of miles by placing their factories in locations with cheap real estate and cheap labor. Musk also has nurtured a reciprocal relationship between SpaceX and Tesla Motors, harnessing the resources and brain power from the two companies to make new breakthroughs and solve problems. This is possible because the two companies are less than 400 miles away–SpaceX near Los Angeles and Tesla Motors in Silicon Valley.

SpaceX manufactures between 80-90% of its rockets, engines, electronics and other components IN-HOUSE–a similar characteristic to Tesla Motors’ production. This strategy perplexes rocket building competitors, namely the United Launch Alliance (ULA), a partnership between Lockheed Martin and Boeing, which brags about depending on more than 1,200 suppliers around the world. The recent United States embargo with Russia stemming from the conflict in the Crimea has put the ULA in a tough predicament because its most cost-effective rockets use engines manufactured by Russia’s state-owned aerospace company. Congress has announced that no more rockets can be purchased from the Russian company.

SpaceX sees in-house manufacturing as its main weapon in the rocket building industry because it gives its engineers the control to modernize technology and improve processes rather than simply accept the expensive status quo methods, many of which Musk says haven’t evolved for over 50 years. Aerospace companies like Lockheed Martin and Boeing haven’t had real competition and receive generous government money, which further encourages their inefficiency. The standard philosophy of the aerospace industry has always been to produce the highest performance products available, disregarding the bottom line. Musk says that the aerospace companies have always “built a Ferrari for every launch, when it is possible that a Honda Accord might do the trick.” And it’s mind boggling that they throw out each of these Ferraris that cost hundreds of millions of dollars after just one use.

Just one of dozens of examples of a cost cutting in-house product from SpaceX is a radio device the company engineered. The SpaceX engineers improved the design of the radio, decreasing its weight by 20%. They also reduced the radio’s price of production from the $50,000 to $100,000 price of the standard industrial grade equipment to $5,000.

SpaceX’s goal is to reduce its price of a rocket to one tenth of its competitors’ in the next few years. The key to accomplishing this feat will be to build reusable rockets that have reverse thrusters which enable them to return safely to earth. Many scientists say Musk’s goal is impossible because the stress on a rocket is too great after a launch, leaving it too damaged to use again.

Musk likes to work on the impossible. I have my money on Musk.

Question: Is space exploration a waste of tax payer money?

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Industry Scuttlebutt

By Lloyd Graff.

The machining world is a conservative one, where change comes slowly. In the screw machine arena change often takes a decade to filter through the industry. Today we are seeing a shift that is catching on in conservation of metal, particularly brass. Hot forges produce near net shapes, which are then machined by multiple station rotary transfer machines. This is a method that has come into vogue for fittings manufacturers. The volumes must be high to justify the initial capital investments, but the paybacks are significant from the reduction in scrap turnings from the traditional way of doing things. With aggressive competition from China, this approach reduces total costs on high volume parts enabling manufacturers to bring the work back to the U.S. Much of the capital equipment comes from Italy, which has pioneered this approach to machining.

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The American economy continues to bump along, refusing to yield to conventional expectations of its behavior. Recently, the stock market has dropped, giving up all of its gains for the year. The perverse explanation is that the unemployment rate continues to drop, wages are bouncing up a little, and the conventional wisdom says that this will allow the Federal Reserve to raise interest rates a bit after seven years at an extremely low level. The theory is that slightly higher rates will dampen growth.

This theory has always perplexed me because it argues that bad is good, and good is bad. High unemployment and low wages are good for growth in the economy? That feels like a flawed idea.

The Fed is looking for a little inflation but under 2% per year. The only place I am seeing inflation is in food prices, which seems dictated more by the California drought than accelerated demand.

Car sales are solid, home sales are weak for new homes with housing prices very erratic. In some places like Denver prices are shooting up, but over most of the country mortgage lending strictness is keeping demand tepid. The big overhang of school loan debt and slow family formation are also a damper on real estate.

One interesting development is the spate of “home flipping” schemes being advertised on the radio. The fact that these charlatans are coming out of the woodwork again means that people think houses are getting hot again. Frankly, I do not think it will be a self fulfilling myth.

In the machine tool world, the scuttlebutt I get from auctioneers is that pricing is off 25% from a year ago on mainstream CNC equipment. The builders from Asia and Europe generally deny they are reducing prices, but with yen down 25% in value versus the dollar, it would be easy for Japanese firms to offer discounts to make a deal. The Swiss have a problem with their ever rising currency, but the Germans have a faltering euro to give them cover if they care to discount.

Not all auction sales have been weak. The recent Jeyco auction in Toronto done by Hilco, featuring 12 Hydromats and 20 Davenport screw machines had prices surpassing expectations of dealers who attended by 20%.

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Major League Baseball season is one quarter finished and there are a lot of good stories. Former weaklings Houston, Minnesota and the New York Mets are leading their divisions, and look like legit contenders. Three of the best young players in the game grew up playing against each other as kids in Las Vegas. Kris Bryant of the Cubs, Bryce Harper of the Nationals, and Joey Gallo of Texas could all be superstars together. They played Little League in Vegas at the same time.

But the story I like best is that Pat Venditte, the ambidextrous pitcher finally made it to the Majors with Oakland at the old baseball age of 30. I’ve been following Venditte since his days at Creighton University in Omaha, hoping he would make it to the Big Leagues. He’s a slender kid and his pitches are in the mid to high 80s from both sides. They passed a special rule for him, that he must declare a pitching arm when a switch hitter comes to the plate so you don’t have a dance going on at the mound with both pitcher and batter switching sides during an at bat.

Venditte has not had an easy journey to the Bigs. The Yankees drafted him in the 20th round in 2008 and he has bounced from team to team in the Minor Leagues until getting his shot a few days ago with the Oakland call up. He has a special six finger mitt which he can wear on either hand which Mizuno made for him after his Dad sent a design and tracing to the Japanese glove maker when Pat was 8 years old. He is still using the original glove.

Question: Are things changing at your company? Or is it the same–old same–old?

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Basking in Basque Country

By Noah Graff.

“Playa de la Concha” in San Sebastián

In May I had the wonderful opportunity to go on vacation in a small paradise in northern Spain called San Sebastián (Dononstia in Basque).

When I asked folks from San Sebastián how they felt about their home city they simply beamed. They boasted that the city is the gastronomic capital of the world, it has the most beautiful scenery in the world, has a solid economy, and that its Basque language has no other languages it can trace itself back to, making it the oldest language in all Europe.

I’m happy to say the bragging of the San Sebastiáns didn’t come across to me as snobby, which it very well could have. Instead their pride felt authentic and uplifting, and it was hard to disagree with their sentiments.

San Sebastián is located in Basque Country on the southern coast of the Bay of Biscay, 12 miles from the French border. Despite its small size of 23.51 square miles, and modest population (186,409 in 2011), it is considered a food mecca, filled with bars serving traditional yet creative small snacks often comprised of seafood called pintxos and succulent rare beef ribs (chuletas). San Sebastián’s area also boasts the second highest per capita of Michelin star restaurants in the world, second only to Kyoto Japan. The city’s views of the coast were so breathtaking that I took hundreds of scenery photos, many of which are similar and repetitive, but I was so struck by the beauty that I just had to keep taking one after another.

One thing that strikes me when I travel to Spain is the pride Spanish people have in their heritage. But the pride they exude generally isn’t pride in being Spanish, it is pride for the region or specific city they come from. Contrary to what one might first think, Spain as we know it is actually a young country with its first constitution in 1812. The country is comprised of 17 autonomous communities, two autonomous cities and has six recognized regional languages. The divisions among regions remain clear today. For example, children in the Basque region have to study the Basque language in school, while those in Catalonian cities such as Barcelona learn Catalan. Both the Basques and Catalonians have had significant separatist movements for decades, sometimes even resorting to terrorism.

 

Noah Graff eating Beef Ribs (chuletas) with a British friend in San Sebastián

In San Sebastián, street and building signs are all written in Basque alongside Spanish. The best soccer players growing up in San Sebastián only want to play for their home city’s team, forgoing the vast salaries and fame they might find playing for a large market Spanish team like Real Madrid or playing in other countries. In fact, I was told by my hotel’s desk clerk that if a player from San Sebastián went to play for another Spanish city people might spit at him walking down the street. I asked him if a city in another part of Spain was attacked by a foreign country if he would he feel as though he had been attacked personally, and he said no. I’m sure not everyone in San Sebastián would feel that way but it was powerful to hear him say it.

A friend I made in San Sebastián told me that he admired how at every sporting event in the United States we sing our national anthem. The ritual had never really struck me as a custom distinct to the United States before then. As much as I loved visiting San Sebastián and as much as I admire the passion its people have for their home city, the disunity I felt in Spain gives me an extra appreciation for the United States. I feel fortunate to live in a nation where I can travel everywhere and not feel like a foreigner, be it to New York, Indiana or Mississippi.

God bless America, where states haven’t tried to secede for over 150 years, where I can go to a Chicago Cubs game and sit next to a Cardinal fan peacefully, and where Lebron James can leave his hometown to follow money, prestige and weather, and then return as a hero.

Question: Do you always want to live where you’re living now?

Question 2: Would you like to be a settler on Mars?

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Is McDonald’s Broken Today?

By Lloyd Graff.

Old McDonald’s is under siege these days. Demonstrators at the Oakbrook headquarters for $15 per hour minimum wage. Flagging sales. Franchisees are unhappy with the company. The stock is sinking. Burger King, of all competitors, is gaining share with fried chicken french fries advertised by talking roosters. The world doesn’t like McDonald’s at the moment so they fired the last CEO, who had just gotten his feet wet in the job.

Do they deserve a break today? I doubt it.

I visited a McDonald’s today to buy a biscuit and coffee, something I very rarely do, but I was in a biscuit mood, and I like theirs.

I decided to negotiate the drive-through, but I did not understand the signage because there was more than one ordering station, so I had to go around twice. I ordered my biscuit and coffee and was forced to make a decision on cream and sugar by the anonymous order taker. I got rattled by the question. Did I want one sugar, one cream? I didn’t know, because I wing it, so I said one of each by default.

Decisions. What a way to start my day.

Then I drove to the pay window. Why not pay when I received my food? What if I wanted to order another biscuit?

More overhead, less efficiency for McDonald’s, which was empty at 8:15am.

Then I rolled to the window to collect my food. A surly young woman passed me my coffee and addressed a question (I think) to me. Unfortunately, I found her one word question incomprehensible. This was embarrassing. I looked inquisitively at her and she repeated her word again, and I still could not understand what she said.

“What did you say?” I asked. “Jelly?” she said. I thought to myself, why did she make this an uncomfortable moment?

She was a young African American woman who spoke with an inflection that was difficult for an older white guy with mediocre hearing to understand.

Yet “jelly” should not have come between us if McDonalds or a local manager had coached her on how to address me in a way I could more easily understand her.

“Sir, would you like strawberry jelly with your biscuit?” she could have asked. And I would probably not be writing this column.

McDonalds, please train your people. Teach them to smile. Instruct them how to address a customer, politely, rather than building in contention.

I took my bag with my biscuit and found that there was no butter, but two packets of jelly – one grape, one strawberry — I didn’t even want, and coffee with the wrong amount of cream and sugar for my taste. One little encounter, yet they messed up my experience, even though the biscuit was quite tasty.

We all have several encounters every day with coworkers, customers, suppliers, family, and friends. We probably screw many of them up because we do not see or hear ourselves the way others do. For McDonald’s, which has a million encounters each day, training is crucial. The “jelly” woman had no idea she was annoying me today, but a well trained manager, monitoring her counter people could easily correct the problem.

Steve Easterbrook, the new CEO at Oakbrook headquarters, probably has no idea that the “jelly” woman just irritated a client. He does know that “jelly women” are demonstrating in front of his office for $15 per hour and his 29,544 franchises are angry because the company stores just announced a $1 hour raise above the national minimum wage. Nobody’s happy with McDonalds these days.

Question 1: Do you go to McDonald’s?

Question 2: Is McDonald’s broken today?

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Controlling Education

By Lloyd Graff.

For a century public education was the channel for students to access knowledge that would enhance their lives in many ways. It was the path to middle class lives for tens of millions, the Americanizer for immigrants, the building block of successful democracy.

But today the conventional model of top down primary and high school education is rightfully doubted by many in America. The doubt cuts across race, educational background and economic status. Public education with calcified Boards of Education, unionized teachers, politicized curriculums are doubted. With the doubt comes a determined counterattack from those who currently control most of the education money pool.

The rebellion against the status quo starts in daycare, graduates to nursery school, and gains momentum in grade school. Parents want more for their children than old school schools can give them. It may be as basic as more hours, or better lunches, or freedom to experiment with bugs, or snails, but for many parents yesterday’s education does not suffice for Little Johnny today.

The Charter School movement, which has blossomed, then withered, and mutated into home schooling and Co-op efforts is one aspect of shifting ideas about the public schools. Big educational institutions like city public school and large Catholic educational systems are struggling to compete for students and dollars. Charter Schools have been an end run around the stagnation. They are usually hated by unions and barely tolerated by entrenched educational hierarchies. Around the country there is ferocious competition for students and tax money. Charter schools are usually the enemy of the status quo. Wars are always being waged in Court and legislatures over them.

Home schooling, with the support of Internet initiatives like the Khan academy, are enabling parents to educate competitively at home, but the huge number of single parents and the need for two incomes makes home schooling a tough option for most people.

Education is generally controlled locally, and individually, but it strikes me that it could be an opportunity for a Republican presidential candidate to separate him or herself from the field by supporting “freedom of choice” in education vouchers to subsidize the opportunity to choose the education a parent desires for their kid. I would have no objection to these funds being used for parochial education, though purists and atheists will mount a gigantic fuss. Even if the funds were just for “secular” education, they could radically change the current stranglehold of calcified Boards and protective unions over American education.

I see businesses all over inject themselves into the vocational educational arena, because public schooling usually doesn’t “get it.” I see firms start training programs for machine operators and programmers because they want to develop talent to fit their businesses and understand what the best ways to bring along that talent.

Businesses will find a way to regenerate themselves or they will die. We have a client who is buying Hydromat rotary transfer machines to put into local technical schools where their factories are located to build their skills pool.

I do not see public education as a lost cause in the United States. It is just caught up in an enduring war between those who want control of the money and those want control of how their children gain knowledge of the world. It is a tug of war with each side winning a few inches and then losing it back. I wish the 2016 election would give voters a national forum to take sides on paying for education.

Question: Were you well-educated? Your kids?

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I’m Not Moving

By Lloyd Graff.

The house across from Lloyd Graff’s house. It has been on the market since 2012 for $182.500 and is currently pending.

It was refreshing to read about U.S. home prices rising 7.4% over the prices of one year earlier. Of metro areas, 22% showed double digit increases. The median family home price was $205,000 versus $191,000 one year earlier. Homes are selling at an annual rate of 5,000,000.

But not where I live.

I get to watch the best and worst of times as I observe the moribund market for the large beautiful homes in my village of Olympia Fields, Illinois, and compare it to my daughter’s neighborhood of small 60-year-old homes in Palo Alto, California, the center of Silicon Valley and home to Stanford University.

The contrast is amazing to observe. Directly across the street from my house two homes have lingered on the market for years, both spacious 4-bedroom houses on 15-20,000 square foot lots. Squatters lived in one before they snuck out in the dead of night 6-months ago.

In my daughter’s neighborhood, potential buyers launch campaigns to endear themselves to sellers to enhance their buying position. Houses usually sell in one week, often with overbids.

In my neighborhood a 2500 square foot house might sell for $175,000. An 1800 square foot house on a 7500 square foot lot in Palo Alto brings $2 to $3 million depending on location and amenities.

It’s supply and demand to the nth degree playing out. People from all over the world flock to Silicon Valley for high paying jobs. In Olympia Fields the baby boomers who bought 35 years ago are leaving for warmer climates, buying a condo in the city or just dying off. It seems like very few folks want to live in my community, even though it has lovely parks, good access to commuter trains and expressways, and minimal crime.

The simple answer is that affluent white people do not want to buy into an Olympia Fields that is comprised of about 50% African American people. But the interesting corollary is that not enough African American people want to live in Olympia Fields to fill the existing homes and push up the prices. It appears that upwardly mobile black people do not want to move to an area that seems “too black” for them.

I grew up in the bad old days on the south side of Chicago next to Jackson Park where the new Obama Library may be built. I used to practice my 5 irons and putting on the 6th green of the golf course across from our house. It was a lovely neighborhood back in the 1950s and ’60s, populated by caucasians adjacent to an African American neighborhood. There were no integrated neighborhoods then. When black people moved in, whites moved out. I observed white flight dramatically. In my public grammar school, Parkside School, there were 48 kids in a class, taught mostly by veteran Irish lady teachers who assigned seats arbitrarily. Black kids were mostly on one side of the classroom, whites on the other.

My high school was the University of Chicago Lab School, a private school for the U of C faculty’s kids, which expanded to take in kids from the surrounding areas. Many students were like me–they had parents who would not send them to the almost all black public high school, Hyde Park, that my residence would require.

My wife, Risa, is from Charlotte, North Carolina, where she went to Myers Park High, an almost all white school, just before Charlotte became the test case for school integration in the South.

We both wanted to live in a place that was different than the places we came from, so we ended up in Olympia Fields, rated one of the best places to live in the Chicago area back in the 1970s. It was integrated racially, had a small but vibrant Jewish community, and good though not great schools.

We stayed. And we stayed. And now many of our neighbors are African American, homes are vacant, schools are primarily African American kids, and home prices are one third of comparable dwellings in Northern and Western suburbs of Chicago.

This is race and real estate in Chicago in 2015. As a writer it is a fascinating story that I have seen unfold. As a real estate owner it is depressing to see the values drop so low.

I know many of our friends who have left the area wonder why we stayed in Olympia Fields.

The simple answer is that we do not want to leave. We love our house. My wife has her practice in the house, I live 12 minutes from our factory. We have a gorgeous view of a leafy park and a soccer field. We still have good friends in the area, and Risa thinks the local Starbucks makes a darn good mocha Frappucino.

A condo in the city would cramp us and feel stale. We have lilacs blooming now and we’ll be planting tomatoes in a few days. And that condo would cost us three times what we might be able to sell our home for.

So we stay and see how it plays out. Race and real estate are permanently intertwined in Chicago. I accept it, even if I hate it. Maybe it will change in 50 years, although I doubt it.

Question: Do you wish you could move?

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Industry Scuttlebutt

By Lloyd Graff.

Mitch Liss, President of Edsal Manufacturing, being photographed by Today’s Machining World for an interview in September 2010.

Mitch Liss of Edsal Manufacturing, who I interviewed at length for TMW five years ago, is moving his shelving manufacturing company out of Chicago to beautiful Gary, Indiana. I was shocked when I saw the announcement because Liss is a lifelong Chicagoan, whose employees came largely from the city. But Gary provided incentives. Chicago taxes were brutal, and Liss needed room for expansion, which Chicago made prohibitively expensive. If you hit business people in the nose long enough they will eventually walk out of the ring.

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I spent a lot of time at the recent Columbus PMTS Show talking to people who have assorted Swiss-type CNC lathes. It struck me that allegiances to each manufacturer were surprisingly fragile and fluid. Star users were switching to Citizen, Citizen fans switching to Tsugami, Swisstek getting into Tornos houses, etc.

Loyalty was tissue thin. Usually the brand switching was not because of sweet deals by a competitor, but because of irritation over the old brand’s service. The friendly, efficient, knowledgeable service person who showed up on time and finished the job quickly was the reason to stick with a manufacturer. Repeated repair snafus killed relationships over time.

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The Mayweather Pacquiao story just gets worse and worse. It evidently was a boring fight for those who paid $100 for the privilege of watching two aged boxers jab each other for 12 rounds. But now we learn that Manny had a damaged rotator cuff that he neglected to report. Oh, the power of a $120 million guarantee. Pacquiao has already had surgery. Anybody want to watch the re-match?

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The candidates just keep on coming for the Republican primary race for president. Carly Fiorina just announced. She evidently thinks her business credentials as the head of Lucent and then Hewlett-Packard will propel her to prominence. Lucent stock dropped to $2 a share with her brilliant moves. At H-P she paid a fortune for Compaq Computer, which nearly wrecked the giant firm. Well, she has not committed a felony or inhaled, as far as we know, so I guess she’s a legit candidate for now.

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California communities are faced with very hard decisions to make about the drought that has hit over the last few years. Weather patterns change. El Niño could switch quickly to La Niña, which could end the drought. Big snows later this year in the mountains could quickly rebuild the local water supply. The Greens are trying to capitalize on the dry conditions by proclaiming it a manmade event.

Some communities like Carlsbad, California, just north of San Diego, have decided to build desalinization plants. The one in Carlsbad will cost $1 billion. It may be money well spent, but 20 years ago Santa Barbara, California, spent a few hundred million to build one and then mothballed it a couple years later when the rain and snow came back. It could happen again. Water conservation, including holding back water from the enormous almond groves that were planted when the almond milk craze hit several years ago, might make more sense than huge capital investments in desalinization right now. I remember when Lake Michigan was going to go dry. Now it’s overflowing.

(Click here to read the interview from 2010 with Mitch Liss)

Question: Do you feel loyalty to your machine tool brands?

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