Monthly Archives: June 2008

Is Shell Oil a Green Maverick?

Today I came across a video of the Shell Eco-Marathon Americas which was held in April, 2008.

The event is a competition between students from around North America (there is a different one in Europe) to create the most fuel efficient car ever. Purdue University won the prize for a solar engine vehicle reaching 2,861.8 miles per gallon. Penn State won the Fuel Cell category with a car reaching 1,668.3 miles per gallon, and Mater Dei High School claimed the first and third place trophies for the internal combustion engine category. The 5th and 6th Gen vehicles traveled 2,383.8 and 1,208.6 miles per gallon respectively.

But why is Shell, an oil company, sponsoring an event whose purpose is to invent cars which will obliterate the demand for its product? It reminds me of the Philip Morris commercials telling people not to smoke. David Sexton, President of Shell Oil Products said in a CNN interview, “We’re thrilled that if some of these ideas can maybe in the future reduce fuel consumption we think that would be good for everyone.” Does “everyone” include himself?

It must be a PR thing because otherwise it makes no sense. The oil companies are banking on the idea that even if fuel efficient, alternative energy vehicles do become practical and affordable, it will take decades before the supply of vehicles worldwide adopts the new technology. In the meantime Shell looks like a green maverick amongst its Big Bad Oil peers.

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Swarf: Noah Graff’s Visit to Arve Industries, June 2008

Today’s Machining World Archive: June 2008, Vol. 4, Issue 06

Noah Graff spent the first week

of April in France’s Haute-Savoie region, just across the border from Geneva Switzerland at a press junket held by the Arve-Industries Haute-Savoie Mont-Blanc Competitiveness Pole (Arve-Industries for short). This is his account.

While famous for its ski resorts and mountain lakes, France’s Haute-Savoie region also happens to be a hot bed of screw machine companies; small to medium, privately owned firms whose origins date back to the clock making industry of the Middle Ages. Arve-Industries, named for its location in the Arve Valley, is what’s known in France as a “cluster.” It is an organization formed in 2006, of 183 companies in the region working together on joint R&D projects, to better compete in a relentless world economy. Lionel Baud President of Baud Industries, and Vice President of the Arve-Industries cluster, told me that before the cluster was formed, the small family businesses of the Arve spent little time or resources on R&D and rarely collaborated with one another. The cluster’s members believe their newly formed unity has the potential to bring the region’s companies unprecedented success.

I was the lone American journalist on the trip and the only one in his 20s, and I don’t think the French execs giving us the tours were accustomed to my frank, often sensitive questions. I asked them how French manufacturers could keep up with the rest of the world while tied down by their country’s mandated 35 hour workweek and laws prohibiting the firing of workers. I asked whether they were hiring a lot of workers from Turkey and North Africa to deal with the shortage of skilled labor. I asked why these companies wouldn’t just send all of their operations overseas, or at least 40 minutes across the border into Switzerland where many of these regulatory hurdles would be lifted. When I pushed the question about the difficulty firing workers as companies become leaner and automated one exec from Bosch, the one multi-national company we visited, answered frustrated, “Well, what do you want me to say?” But overall, most people I talked to, although a bit taken aback by my bluntness, really impressed me with their intelligent, honest responses.

The truth is, some companies in the Arve Valley do have plants in Switzerland containing some French employees who commute across the border daily. Switzerland has much lower corporate taxes than EU member states, it’s easier to find workers there, and its workweek is more flexible than that of France. Baud Industries concentrates its watch and medical device manufacturing there, yet Lionel Baud told me he still insists on keeping the most technical, complicated jobs in-house because the cluster is available for assistance and France is where he has the best communication with workers, which creates loyal employees and low turnover.

To deal with the 35 hour workweek, executives said that lights-out manufacturing, automation, and overtime helps keep up productivity. They also said that just because French workers put in less hours does not necessarily mean they can’t match productivity of workers with longer hours if they have superior focus.

As far as my query about firing workers – after a little badgering, the Bosch executive told me to downsize, the company sets up a type of early retirement plan for workers they want to lay-off that meshes with government regulations.

My questions about the employment of workers from the Middle-East and North Africa received the most diverse responses. One company said that 60 percent of its workers come from North Africa and that there are good training schools there producing a lot of quality skilled labor. He added however, that third generation North African immigrants born in France are often not interested in manufacturing jobs, similar to their native French counterparts. One company told me their workforce included 20 percent Turks or North Africans, but as more jobs are requiring advanced skills that number is declining. Another executive said he employs virtually nobody from those regions, but some of his best employees come from Eastern Europe.

Although the companies I visited had diverse business philosophies and strategies, throughout the week I felt a common spirit from my hosts; one of pride, creativity, and a passion to grow while still preserving their roots.

Managing Editor Jill Sevelow

attended the Delcam American Technical Summit, hosted by Methods Machine Tools in Sudbury, Mass., in mid-April. Jill was most impressed by the portfolio of Delcam products. Operations Director Clive Martell said their goal was “to build a series of ‘best in class’ when orchestrating their software CAM acquisitions. Aside from well-known turn/mill and Swiss-type lathe CAM software Partmaker (which Delcam acquired in July of 2006), Delcam includes DentCAD and DentMILL, a dental CAD system for dental machining, PowerMill for 5-axis machining, FeatureCAM, ArtCAM (which Delcam’s Rob Walker likened to “bringing craftsmen into the digital age), and now Crispin-CADCAM software for the shoe industry. In the age of increasingly individualized customization of product, Delcam’s software has evolved with market demand, generating sales of almost $60 million in 2007. Power point presentations laid the groundwork for each product, but customer testimonials drove the “message of excellence” home. Each attributed its growth and acceleration in its respective fields to the collaborative and innovative Delcam product used.

For many years I have been a

staunch advocate of gridlock in Washington politics. The visceral animosity on the national scene began when the Republicans ganged up on the Democratic House Leader Jim Wright, forcing him out of Congress. The Democrats finally got even by banishing Tom DeLay. The legislative process is a Pork Barrel provider presently and not a vehicle to tackle the serious issues of the day.

This might be starting to change. Assuming the presidential race is between John McCain and Barack Obama, a pair of mavericks in their parties who won their nominations as long shot outsiders, we might see each one reaching out to the other party for cabinet members and even vice presidential possibilities.

Some young people are reaching out to both parties to actually address issues that people care about. George Bush wasted eight years in addressing the health insurance problem that affects almost everybody in the United States. The insurance companies and Federal bureaucracy have made such a mess out of health care that we may be near some kind of national compromise if the partisans are circumvented by the people. With some baby boomers retiring soon and a new president, this would be the time.

Another huge Bush failure is immigration policy. He abdicated to the Lou Dobbsians and now the country is losing its transfusion of people energy. Hopefully McCain, who has a grasp of immigration issues from his Arizona experience, or Obama, who is sort of an immigrant himself, will pull us away from the know-nothing cheerleaders in both parties.

On Iraq it may be easier for McCain to extricate a lot of American troops from combat than Barack Hussein Obama, who may have to show the country, the Joint Chiefs and Bin Laden that he is a tough hombre.

I am strangely optimistic about this election and totally undecided about who I’ll vote for. These are two good men to choose from and I haven’t felt that way for a few decades.

On May 8, the state of Israel had

its 60th birthday as an independent country. The country has never been as strong economically as it is now with 20 years of spectacular growth behind it.

Americans can learn a lot from the Israeli experience.

The core strength of the Israeli economy derives from the creativity of a highly educated population. In technical fields, Israel excels. Silicon Valley is filled with Israelis who live in the U.S. and then go back to live in Israel’s Silicon Valley near Tel Aviv.

Israel thinks globally. A myriad of trade deals with other countries have thwarted the Arab economic boycott. After military service almost every secular young Israeli leaves the country for at least a year of travel. This gives the population a worldliness virtually unmatched elsewhere.

Israeli business has abundant access to money through a thriving venture capital network. A host of Israeli tech companies and medical firms have gone public on the Nasdaq stock exchange. Most children in Israel speak at least two languages, Hebrew and English, which is a necessity for global commerce.

The Israeli economy has continued to thrive despite terrorism, six wars, political isolation, and a tiny population with a large segment of parochial Orthodox Jews, many of whom barely work in the modern economy. In many respects, it is an economy functioning with one hand tied behind its back.

The United States can learn from Israel that terrorism can be contained with intelligent determination. We can also learn that immigrants, even poorly educated ones, can bring prosperity if properly acculturated and educated.

Israel has shown that a tiny country, surrounded by fanatical enemies, can thrive if its people have ingenuity, positive energy, intellectual capability, access to capital, a global outlook, and the determination to thrive – no matter what the obstacles.

Noah and I visited Vienna,

Austria recently on a business trip to central Europe. Our first order of business was to find the original Julius Meinl coffee shop, which is my favorite in Chicago.

Our first challenge was to locate the place. Vienna has a big central shopping area, the “zentrum,” with a vast array of shops and restaurants adjacent to the city’s historic buildings. We took the “underground” to the zentrum and asked people for directions to Meinl. Nobody was helpful until we found, of all things, Starbucks. I walked into the old reliable and asked the young barista behind the counter where Meinl could be found. He answered instantly and offered detailed directions in excellent English. He then added that Julius Meinl had recently opened a store in Chicago.

After several missteps, we found Meinl at about 6:00 in the evening on Sunday. The only part of the store which was serving customers was the outdoor seating area. The blond fraulein who came to take our order spoke no English. She was quite pretty but she carried a near scowl on her face. I tried to order a latte, but she only understood cappuccino, so that’s what we ordered.

The coffee came promptly and it was beautifully presented with a heart artfully drawn in the foam. The size of the cup was about one third smaller than the comparable American one and the price was double in American dollars. To the best of my tasting ability, the Viennese and American coffees tasted the same – excellent. But the attitude and the price were decidedly better at Julius Meinl in Chicago.

Jonathan Goodwin dropped out

of seventh grade to help pay the bills and follow his passion for cars and engines. Today the automotive world bows to his genius and wonders if this car nut might actually win the 10 million dollar X PRIZE for producing a low emission, competitively priced, 100 mile per gallon car.

His partner in this venture is Neil Young, rock legend, who contributed his 1960, Lincoln Continental “boat” as Goodwin’s test car.

Goodwin works out of a garage where he specializes in converting Hummers into fuel sipping diesels while boosting their power. He also likes to run his thug cars on fried chicken grease contributed by the local KFC outlet.

The fact that the prestigious X PRIZE contest committee has allowed Goodwin and Young to apply to join the elite, well financed, automotive companies from around the world gives him credibility.

Goodwin is negotiating with DHL to convert 800 vehicles to super efficient systems which cut fuel costs by 50 percent.

It appears that his approach is unique because he does not want to build a new vehicle and engine. His devious plan is to make inexpensive conversion packages for existing vehicles turning them into biodiesel burning plug-in hybrids.

Proving his point on Neil Young’s 40 foot “boat” may not win the X PRIZE, but that’s what they said about the crazy bike mechanics Wilbur and Orville Wright in 1903.

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NIMBY ("Not in my backyard") feelings of Americans are relaxing

A recent survey by RBC Capital Markets showed that many Americans are becoming more open to living near wind, hydro, geothermal, and even nuclear power generation facilities in response to high energy prices and environmental concerns. Only 16 percent of Americans said that they would oppose the construction of any type of energy plant or facility in their hometown, down from 23 percent in 2007.

In addition to power generation related companies (mentioned in the following video) infrastructure manufacturers such as Parker-Hannifin Corporation, Foster Wheeler, and Woodward Governor Company, are just a few of the firms which could capitalize on the possible expansion of diverse power sources.


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Containers Bring Manufacturing Home

World trade is like a chameleon, constantly changing colors to survive and flourish. This is why I tend to disregard the Lou Dobbsians who are constantly searching for bad guys rather than opportunities.

With the developing world growing so fast now and the added strain of material flowing to China to heal the wounds of the horrible earthquake, the container system is simply overused. The China trade is sopping up all slack in capacity, which means rates are triple those of six years ago if you can even find a container to send goods from the U.S. to Europe.

The cost of shipping a standard, 40-foot container from Asia to the East Coast has already tripled since 2000 and will double again as oil prices head toward $200 a barrel, says Jeff Rubin, chief economist at CIBC World Markets in Toronto. He estimates transportation costs are now the equivalent of a 9% tariff on goods coming into U.S. ports, compared with the equivalent of only 3% when oil was selling for $20 a barrel in 2000. (Wall Street Journal)

With labor costs and the value of the yuan rising too, China is losing its competitive edge in manufacturing versus the U.S. Even furniture, which gravitated almost entirely to China, is coming back to America.

The container shortage is an annoyance at the moment. Its deeper significance is in the context of world trade. If the protectionists do not mess things up after the election, the seeds are being sown for a significant resurgence in American manufacturing for many years to come.

Source: Wall Street Journal

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Europeans Ride Naked on $9.00 Oil

Just when you think that we Americans have it bad with gas prices between four and five dollars per gallon, look across the Atlantic. Europeans are paying around nine dollars per gallon. Spanish truck drivers have protested by simply parking in a long line along the highway. Now in Spain and France people are protesting high prices by riding bikes in the nude. Also, farmers are leaving fields and clogging roads with their tractors.


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Replicating Rapid Prototyper Produces Replicating Rapid Prototyper Child

Now people can replicate replicating machines from replicating machines. Sounds kind of like Dolly, the cloned sheep, being cloned to produce a new sheep.

Adrian (left) and Vik (right) with a parent RepRap machine, made on a conventional rapid prototyper, and the first complete working child RepRap machine, made by the RepRap on the left. The child machine made its first successful grandchild part at 14:00 hours UTC on 29 May 2008 at Bath University in the UK, a few minutes after it was assembled.

[Sorry this news is a few days late, RepRap fans. We had a press embargo on it till 4 June to coincide with the opening of the Cheltenham Festival (see above and below), and it wouldn’t be very good practice to break our own embargo :-)]

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A Gas Guzzler May Save You Money

A Gas Guzzler May Save You Money

With ridiculous gas prices sweeping across the U.S., it might seem intuitive for a car buyer to look for something fuel efficient like a Smart Car, Prius, or Honda Civic. But with dealers struggling to get rid of trucks and SUVs (domestic brands in particular) some unprecedented deals for gas guzzlers are appearing which may actually make sense for buyers to jump on.

Manufacturers are offering between $2,000 and $5,000 in discounts on once popular models like the Ford Explorer and Chevrolet Suburban, and dealers say there’s room for negotiation after that. Used SUVs and trucks often have even greater discounts, with some selling at roughly one-third the price they would have fetched new four years ago.

Among the better bargains are Ford’s SUVs, the Expedition and the Explorer. An Expedition with four-wheel drive has a sticker price of about $35,000, but in many areas, consumers can get one for $30,000 after discounts and negotiations. The all-wheel-drive Explorer with V-8 engine lists for about $31,000, but can be had for $25,000.

These deals only make sense if your driving routine is local or you simply want a truck or SUV. If you only drive five or 10 miles a day it will take years for even $4.00 gas to surpass the value of many discounts, and by that time your lease may have ended.

Source: Wall Street Journal

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Pringles Can — The Key to Success

Fredric Baur, the man who invented the tubular can that packages Pringles potato chips, died May 4, 2008, at the age of 89. Yesterday it was announced that he has had some of his ashes put into a Pringles can which was put into his coffin.

Baur was an organic chemist and food storage technician who specialized in research and development and quality control for Cincinnati-based Procter & Gamble Co. A patent for the can was granted in 1970, according to P&G archivist Ed Rider.

Pringles have always been my favorite potato chips. I’ve always felt their flavoring was superior to other chips – from the Original Salted, to Sour Cream and Onion, to Cheez Ums. But I know what attracted me to them originally was their unique presentation, not only the can, which seemed so classy compared to regular potato chip bags, but the uniformity and aesthetics of the chips.

Pringles are the ultimate combination of quality, presentation, and branding. Those are the keys to success when producing and selling any product which can seem generic and commoditized, whether it be a food, computer, or machined part. In the world’s capitalist economy fueled by consumer choice, the only way to succeed in business is to use Procter & Gamble’s Pringles model. Yes – price also plays a huge part in competition, but the companies which truly dominate the world always strive for excellence – to produce their own Pringles.

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