I am writing this blog from home on Tuesday. My brain surgery to remove a benign tumor on my pituitary gland, which had grown from the size of a pea to that of a tangerine, was successful. The threat of blindness from its encroachment on my optic nerve has been removed. I am enormously grateful to the neurosurgery team at the University of Chicago, especially Dr. Issam Awad, who removed the ominous growth by channeling through my nose to get to the extremely enlarged gland.
It seems incredible to me that brain surgery to remove a “tangerine sized” tumor can be done without cracking the skull open, but creative surgeons and product manufacturers have made amazing innovations in recent years. It is quite possible that this pituitary tumor would have blinded me had it occurred a few years ago. Today it is correctable by minimally invasive surgery. They used belly fat to patch the holes. I knew my extra fat would be good for something.
Thanks to all who wrote such caring comments. It really made me feel that this column connects with its readers. I am truly grateful for your feedback.
The Doosan saga seems to get messier by the day.
Doosan Infracore’s rush rush deal to sell the Doosan machine tool brand to Standard Chartered Bank fell apart at the end of January. The company is hemorrhaging cash from its other businesses, especially construction equipment (Bobcat, etc.). Its only viable asset it can convert to cash quickly is the successful machine tools division.
Standard Chartered Bank had offered $1.08 billion, subject to due diligence. Evidently after thinking about the deal it opted out. The next bidder was MBK Partners, an Asian buyout firm that just did a big deal with Tesco, the British grocery chain for its Asian assets. MBK Partners is a big player but does not seem to do much in the machinery area. Its offer is $850 million, so it is obvious that Doosan Infracore is playing a weak hand now. It is pushing for a March closing because the company is seemingly desperate for cash to keep the ship afloat.
The Doosan story is a little sad. Doosan Infracore built a wonderful machine tool company since taking over Daewoo. Perhaps it got a little heavy in oil and gas, but basically the machine tool division is solid. The company made a colossal blunder in buying Bobcat at the absolute worst time, paying for it with borrowed money. Last year Doosan Infracore laid off 1500 people and lost a fortune in the last quarter. It looks like somebody is going to get a “steal” on the machine tools business now. IF THEY KNOW HOW TO RUN IT.
Brian Beaulieu, my favorite forecaster of business for the machining crowd, recently did a webinar for the Precision Machined Parts Association. His outlook remains positive despite the commodities crash and the stock market’s recent haircut.
Beaulieu says that the oil, mining and agriculture downdrafts will make 2016 basically a flat year versus 2015, but not a bad one. Consumers are buying stuff with their extra gasoline money. Cars and light trucks are hot. Utility costs are lower with a mild winter. Employment is rising, banks are lending, retail sales are solid, deficit spending continues, and both residential and non-residential construction are improving.
Beaulieu sees a strong job market with 20% more demand for skilled labor than supply. Wages will go up almost 4% this year in our manufacturing world. This does not include increased costs from ObamaCare. He sees wage expenses going up 4% per year for the next four years, so the number of employees will be a critical judgment to keep in mind for all owners.
He sees the dollar weakening vis-à-vis the euro. This may have started already. He is positive about the next three years with military spending up in 2017 and 2018. He has consistently predicted a recession in 2019, and he still stands solidly on that view.
He seems unruffled by the vagaries of politics. I think the Obama experience of the last seven years justifies his view that a President does not really affect the economy that much.
Clinton, Trump, Sanders, Kasich—none of them will move the needle that much on the economy according to Brian Beaulieu. And he usually has been right for the past 15 years.
Question: Does the President affect the economy?