Monthly Archives: October 2009

Industry Scuttlebutt

I talked to Jim Kucharski, National Sales Manager, of Maier USA, about the health of the company. Maier has made inroads as a new player in the North American CNC Swiss marketplace. It is now pushing in the medical and department of defense markets like the other contenders.

With the total Swiss market around 50 percent of last year, everybody is scrapping hard for business. Maier is a family business according to Kucharski, and son Michael recently bought the company out of reorganization in Germany to take out his father’s interest in the business. The senior Maier is a cancer survivor, but has suffered a recent setback in his health. Business is very soft in Germany with automotive suffering mightily. Michael had been leaning on his father to downsize the firm to meet reduced demand. With son Michael now fully in control the company has downsized the workforce at the German Black Forest plant.

According to Kucharski, Maier is selling machines now and business has stabilized since the reorganization.

**************

Okuma has a clever new promotion to goose interest in a sleepy market. The company is doing a contest for a two-year free lease of an Okuma machine tool. The winner will be chosen Okuma and will be determined by an essay or video submission explaining why they most need the machine. Go to their Web site for a more complete description of the contest.

I like the idea. It is already generating buzz. They are publicizing it on social media like Facebook and Twitter and will be putting up a sampling of videos on a YouTube channel. The winner will be announced in December. Meanwhile, they will be collecting emails and stories which will be valuable for many years to come, as well as accumulating points for being cool and fun.


Okuma America’s COO Explains Contest

**************

I’ve been collecting machine tool discounting stories. I recently talked to a West Coast company who said they have bought several Mazaks lately and received 10-15 percent off list. I heard of a 35 percent off sale on a Nakamura lathe last month.

Question: If I was looking to buy a new mainstream CNC lathe in the $150,000 list price range, what is the real price I can expect to pay?

Share this post

The Power of Rebuilding

Interesting news about the world of heavy trucks. The domestic hauling companies are still flat on their tuchuses, but the suppliers are getting busy. The military demand is getting crazy for trucks and components and some of the big contracts are soon to come. Afghanistan is going to require a different group of vehicles than Iraq.

Another leg of demand is China. The Chinese have lots of dollars and a need to move goods around their vast countryside. Evidently they are shopping here for the best and most durable vehicles.

The other leg of the stool is the heavy truck rebuild market. Because the truckers are not buying new trucks they are doing a lot of million-mile refurbishing.

Even though the stats may show truck sales are way off, the picture for the suppliers is different. I had a long talk with an engineer from Hendrickson whose forte is building truck suspensions. They sell to major heavy truck builders such as NavistarPeter BuiltMercedesVolvo and Oshkosh.

It’s counter intuitive that the lousy state of the trucking business in America continues as the truck manufacturers are becoming quite busy.

Question: Have you noticed the uptrend of military, export, and rebuild in your business?

oshkosh-army-truck

Share this post

The Inflation is Coming! Really?

The Inflation is coming! The inflation is coming! The inflation is coming! It’s all over the news and the bond speculators are fanning the inflation hype like Billy Mays wannabees.

I have to ask the dumb question: What planet are they living on?

In my world, Wal-Mart and Amazon are in a price war on books with best sellers going for $10 per copy. Home prices continue to fall as properties fester on the market. U.S. unemployment figures stick around 10 percent, but smart guys like Dan DiMicco, head of Nucor, says if you include discouraged workers who don’t show up on the charts it is over 16 percent.

Commodities like oil have rebounded because Wall Streeters are playing games again, but the real demand for petroleum and natural gas is far weaker than supply. There is no more on-land capacity to store oil so 125 million barrels are now floating in slow moving tankers headed nowhere.

In the machine tool world, auction prices are still trending soft, supply is huge and distributors are discounting like crazy. I recently heard of a Nakamura CNC lathe listing at $360,000 being sold for $217,000. Prices are inconsistent but we hear that 20 percent discounts off quoted prices are common.

The classic definition of inflation is “too much money chasing too few goods or services.” Excuse me, but whether it’s golf clubs or Renoirs, prices continue to fall.

Ten year U.S. Treasuries are around 3.5 percent, which hardly portends inflation. I was astonished to see my real estate taxes on my home are going down and my dentist is dealing on cavities.

Inflation? Yes, if you are talking about balloon hoaxes in Colorado.

Question: Are you raising prices now when you bid for jobs?

walmart

Share this post

Industry Scuttlebutt

The machine tool builders and distributors are hurting, but there is some business out there. In September the U.S. Army Rock Island, Ill. Arsenal made a major buy. They bought 15 Haas machines, two sophisticated super-high precision Hardinge lathes, six citizen Swiss CNC lathes and about a dozen assorted machining centers made by Mazak.

The preference for American-built machinery strikes me as quite rational. For CNC Swiss there is no American alternative. The Mazak buy can be justified by the Japanese firm’s manufacturing presence in Florence, Kentucky.

Military spending for equipment and ammunition is a significant boost for the well-pounded machining world. Add to that the Obama paranoia in shooting and hunting circles and we have the interesting ammo-medical nexus propping up the precision machining world.

*************************

A commentary on the recent auction of longtime fixture in the screw machine world—Marshall Manufacturing of Florida and Tennessee.

Marshall’s Biggest client, Sun Hydraulics, told the owners of the company that they wanted the company to run their work on the latest and best Swiss CNC lathes.

Marshall had been hurting in recent years and the owners were beaten up. They felt they were running the components competitively as they were and chose not to invest over a million bucks in Citizens or Stars.

Sun was true to their word and moved the work to a shop in Chicago that was willing to make the investment to acquire the work. Marshall chose to auction off their machinery after the Sun work went away.

Question: Should the U.S. government give strong preference to buying American made machinery? Do you consider Mazak an American firm?

towed-artillery-and-mls

U.S. Army Rock Island Arsenal

Share this post

Triumph of the “Glue People”

By Lloyd Graff

Greg Mullins is a “glue person.” He is one of the thousands of skilled vagabonds who hit the road every day so the modern world holds together.

Greg’s specialty is 10- to 20-year-old semiconductor-making machinery, particularly equipment made by GCA Corporation, which is out of business now. It is still found in a lot of defense industry plants and military bases.

Greg is well paid. His services sell for $275 per hour, plus travel. He also earns a healthy per diem, which eases the pain of constant travel. He has been in the field since 1980 and possesses that combination of experience and tenacity that make him well worth the money to companies with breakdowns. He works for a small company named RZ Enterprises, which makes a market in used machinery in this arcane field and offers turnkey packages for special projects.

So when the Fanuc serviceman wants $145 per hour to reprogram your CNC control whose memory just had a senior moment, do not fret too much. You are paying for the crucial intellectual property that keeps things running in our dumb technological world.

The “glue people” give us insight into the way business works today. The hamburger maker at McDonald’s is worth $8 per hour. The CNC operator might get $15 and the shop foreman $25. But the person or firm with the real pricing power knows the secret codes, owns and understands the wiring diagrams and has the experience to diagnose problems across several specialties. Does this tell you something about how you run your business?

Question: Is the Fanuc serviceman worth $145 per hour plus travel to you? Do you have a better alternative?

rare_glue_b

Share this post

50 Jobs in 50 Weeks

By Noah Graff

For the upcoming issue, I interviewed Daniel Seddiqui, a 27-year-old native of Northern California who recently completed his quest to work 50 different jobs in 50 states in 50 weeks. Before he started his journey Seddiqui had been unsuccessful in 40 interviews for finance related jobs (his college degree was economics) and had several jobs in various states he hadn’t found fulfilling.
For his 50-50-50 quest he tried to work a stereotypical job for each state. In Maine he was lobster fisherman, Mississippi (the state with the highest obesity rate) he was a dietician. He was a surfing instructor in Hawaii, a bartender on Bourbon Street in New Orleans during Mardi Gras, a border patrolman in Arizona and worked in the machine shop of a medical device maker in Minnesota.
Seddiqui claims that in his job search he was rejected over 5,000 times, yet 95 percent of the time the people who did hire him wanted him to stay. He is now going on a lecture circuit, writing a book and producing a documentary film sharing what he learned on his quest—the power of thinking outside of the box and being willing to step out of your comfort zone, the opportunities which do exist in America.
He shared a story about when he was working in Kansas City as a boilermaker. A dentist who had been out of work for three years saw him on the news and said, “Wow, this guy is going around showing he can do anything, showing he’s an asset to these companies. I have welding skills, why don’t I go in and apply for a job there tomorrow?” The next day the dentist showed up at the company and got hired right on the spot.

Question: Do you feel a lot of unemployed Americans could find jobs if they were more open to different occupations?


50jobs

Seddiqui Working at Medical Device Plant in Minnesota

Share this post

Fadal and the Walkman

By Lloyd and Noah Graff

Thirty years ago, the first Sony Walkman hit the market and revolutionized the portable music world. For $200 a middle class consumer was finally liberated from the big, cumbersome, old tape recorders. It was the iPod of its time, a small, portable, sexy device perfect for exercise or travel.

In that same year Francis de Caussin with his three sons Adrian, Dave, and Larry were in the process of radically changing the CNC machine tool world out of their little shop in Los Angeles.

So the story goes, the first Fadal vertical machining center, the VMC45, was homemade with a control made in-house with off-the-shelf components. The equipment was for in-house use because the Japanese and German equivalents were much more expensive, using Fanuc controls that were deemed overpriced overkill for running a fancy milling machine. Neighboring companies heard about the machine, realized its potential and asked to buy a copy. Word of mouth catapulted sales.

Gene Haas of Haas Automation almost immediately saw the same opportunity in locally built CNC. A Fadal—Haas rivalry brought prices down precipitously. They left behind weary old brands like Kearney & Trecker and Bridgeport.

The 1980 IMTS show put both Fadal and Haas brands onto the world market and made L.A. the machine tool capital of America overnight.

Question: Can anybody discuss the early rivalry between Haas and Fadal?

Share this post