Monthly Archives: March 2010

Swarf – Battling for Steel

Today’s Machining World Archive: March 2010, Vol. 6, Issue 02

I recently talked to General John Batiste who I interviewed three years ago in Today’s Machining World. Batiste served 30 years in the U.S. Army before walking away from the carnage in Iraq before the surge turned things around.

He went to work at Klein Steel in upstate New York, helping to run the large steel service center business. Today he says he‘s happily hustling steel and sees business improving.

General Batiste had been stationed at Fort Hood in Texas during his military career. I asked him about the psychiatrist, Major Malik Nidal Hasan, who turned militant and allegedly killed 13 people on base during his rampage. He said he was appalled that Hasan had
not been ushered out of his position after displaying so many signs of erratic and potentially dangerous behavior. He says the Army has clear procedures for such cases, and he saw a lot of troops in Iraq who needed counseling who he made sure were channeled correctly.

I asked him if he had seen the movie, The Hurt Locker, about a bomb diffuser in Iraq. He had seen it, but felt it didn’t realistically depict the standard procedures and discipline of the U.S. Army, though he believed the film gave an accurate portrayal of the addiction to adrenaline that combat can create.

The General didn’t want to talk about the Afghanistan war, but after I prodded him he said that it is looking like a quagmire.

Three years removed from the Middle East, John Batiste sounds quite content to battle for steel orders far away from the cold steel of rifle fire.

I talked to Joe Hammer recently to see how his company, Process Screw Products Inc. was fairing and he was quite upbeat. Joe runs an old school screw machine shop with 100 Brown & Sharpes in little Shannon, Illinois, 125 miles west of Chicago.

Joe bought a dozen nice Brownies out of the Micro-Master auction sale four months ago. Most of the value in that sale came from the late model Star Swiss CNC machines, but there was a lovely B&S department that sold for $500 to $1,500 per machine.

Joe Hammer has put six of the machines into production and is delighted with the buy he made. His business, which was started by his father 50 years ago, runs well because of the homegrown talent. Sons and daughters and assorted family members make up the core team and enable him to compete successfully in a CNC world. And he may not be the lone contrarian.

Lately I’ve been getting a lot of calls for Brown & Sharpes, which seem to fit a niche for 1,000 piece orders that repeat.

Is something old becoming something new?

Seth Godin’s new book Linchpin, is troubling and provocative. Godin is a brilliant marketing commentator who has now tackled the subject of how to make yourself indispensible to an organization. It is troubling because the skills which make a person the glue that holds a place together are not what is being taught in school. President Obama and talking heads in government and the media extol
the value of “education” and learning math and science like it is the Holy Grail of the country. But Godin argues that high schools and colleges are turning out people who fit a 1960s and 1970s world of assembly line workers and interchangeable and expendable people. Godin’s message is that every worker needs to strive to be the crucial piece of a firm, “the linchpin” that cannot be let go. The linchpin is the glue person, the one connected to clients and the staff or the one who knows the recipe of the company’s secret sauce. This is not what school trains you for. The specialist may get hired, but then he or she must quickly master the keys to the organization if they want to be fireproof.

The cross currents of job growth, environmental protection, energy and raw material security for the United States make for a public policy jumble. The Obama administration is showering incentives to build alternative energy facilities using wind and solar under the “green jobs” theme, and some Republicans have joined in the chorus. The sad fact is that the subsidies usually benefit foreign
manufacturing more than domestic. Bloomberg recently ran an informative piece talking about a $2.1 million subsidy for Suntech Manufacturing to build a polysilicon solar panel plant in Goodyear, Arizona. It will employ 70 workers who will assemble 30 megawatts of power. Meanwhile in China, Suntech plans to boost production 40 percent to 1,400 megawatts. In Wuxi, China, where the Suntech plant is located, minimum wage is $141 per month, about 15 percent of the U.S. minimum wage. The stimulus package contained $2.3 billion in tax credits for renewable energy manufacturers. Obama wants to expand it to $5 billion next year. The unfortunate fact is that the big solar producers are making their stuff in China and Malaysia. “Green workers” will install it here, but the incentives will benefit big multinationals more than local American manufacturing companies.

This year’s Super Bowl hinged on the recovery of a surprise onside kick by the New Orleans Saints at the beginning of the second half. Saints coach Sean Payton gambled that his team could recover the ball and change the momentum of the game. It worked. The Saints then outscored Indianapolis 25 to 7 in the second half to upset the Indianapolis Colts. I laud Payton for the gamble. Most pro coaches are extremely conservative in mapping a game, but Payton was willing to gamble, as he had done late in the first half by shunning a sure field goal to go for a touchdown from the one-yard line on fourth down. The Colts stopped the run, but New Orleans still made a field goal just before the first half ended. According to the blog, Advanced NFL Stats, the Payton gamble was not roulette. The blog reports that although the success rate of NFL onside kicks is 26 percent, the success rate of surprise onside kicks is actually around 60 percent. The reason they have a bad name is because they are usually attempted when the other team is expecting them and playing a “hands team” of ends and backs who practice receiving onside kicks regularly. I submit that teams should make the onside kick a more common practice. If kickers became extremely proficient at onside kicks like they are for field goals, they could completely upset the special teams’ return game. Large segments of the field would be vacant, and blocking schemes would be a mess if teams routinely used “surprise” onside kicks. In business, most people live in the world of routine. They play it safe, follow accepted practices and live in the world of the average—perhaps a little below or a little above. We all need more onside kicks. Actually, we need to get more kicks period.

I read an interesting piece about a new nickel mine being developed at considerable cost by Kennecott Eagle Minerals Company in the Upper Peninsula of Michigan.

It will produce 300 million pounds of nickel per year when it hits its stride in three years. But naturally it is being challenged by environmentalists and Native Americans, who believe it will endanger the Coaster Brook Trout and pollute tribal lands. Normally I pooh-pooh the Greenies, but I have actually caught trout in the U.P. and I believe in the value of bio-diversity.

Before we dismiss the Sierra Club as nuts we should consider the hellhole China has become from gross pollution which shortens the life of its citizens and even floats across oceans to mess up the world.

The importance of humble species of reptiles like the Gila monster is dramatized by the advent of Amylin Pharmaceuticals’ diabetes drug BYETTA®, which is improving the treatment of the dreaded disease in a meaningful way. In a few months we will see an injectable BYETTA®, which will allow a diabetic person to require only one shot per week. The active part of BYETTA® came from Gila monster saliva. No Gila monster, no BYETTA®.

The nickel mine will be the only U.S. nickel mine and will help meet the demand for more stainless steel. But it would be a pity to ignore the Coaster Brook Trout. The balance is hard to find, but even a Green doubter like me is grateful that the big miners have to allow for the complaints of fishermen before they push the earth around to make a buck.

Is paying overtime rather than bringing in new employees a lean manufacturing practice? For adherents to lean concepts, the question of how to handle a “bullwhip” effect where companies need to rebuild inventories is a challenge for suppliers. People who were laid off may be unavailable for a call back or may be happily pruned. Overtime is expensive, and eventually core workers get burned out working six or seven days a week or 12 hour shifts. Temps are often an imperfect answer because they require significant training and may be poorly integrated into a group of standoffish employees who are offended that old employees are not being rehired. As contract shops reach the “bullwhip” phase of inventory rebuild, how do you think workforce additions should be handled?

Hans Peters needs some help. He recently bought a machining business with several late model Citizen CNC Swiss-type lathes. He has business, but his key setup and programming guy was the previous owner who temporarily stayed on to ease his path into the operation. But he’s moving on shortly to run another company he owns, which leaves Hans in big need of a sophisticated CNC person to join his firm, M&M Specialties, in the small town of Greeneville, Tennessee, located between Knoxville and Nashville. It’s not an area like the Twin Cities, or even Memphis or Puerto Rico, where you have a well established medical manufacturing complex that supports CNC training. So Hans figures he needs to import somebody. He has contacted three recruiters, but so far no cigar. Even with 10 percent unemployment and 16 percent shadow unemployment, it is hard to find the type of skilled people Peters needs who will relocate. Peters understands the rigors of relocating. His wife and young children are at the family home in Delaware, where previously he had been in business with his three siblings. At 44 years old he wanted to run his own shop, and spent close to a year looking for the right situation. He went into the precision machining business because he saw opportunity in the depth of a recession. It
was a gutsy call, especially for somebody who lacked technical sophistication. Hans Peters is 600 miles away from his family, and his programming lifeline is moving on. Is there anybody out there who can help?

They say tough times are the best ones in which to start a business, and Zach Peterson hopes to build his new machining company, SoDak Machining Inc., near Rapid City, South Dakota, out of the ashes of the recession. Zach is 28, with 13 years of being around machine shops. He grew up in Gillette, Wyoming, where his father mines coal. He took high school shop classes, did a two-year tech college stint, and has worked on lathes and mills all along the way. He started up in a pole barn outside of Rapid City, about the same time his wife became pregnant. His first machine was a Hwacheon CNC lathe with a 12” chuck, manufactured in 1997. He then picked up a Mazak vertical machining center with the help of a Twin Cities dealer, new in 1998. He had $20,000 in personal seed money to start and went to a local bank for instruction on how to acquire an SBA loan. He said the paperwork was amazingly easy to navigate. The bank steered him to a consultant who helped him write a business plan with projections. In a short period of time he had $50,000 for capital investment and a $95,000 line of credit. He has found clients by knocking on doors and using some of the contacts he had in the coal and oil industry in Wyoming. Business is growing. He hopes to acquire a larger vertical mill soon. His wife has helped in the office and the plant, but with the baby imminent, she’s about ready for some maternity leave. Zach was proud to tell me that his first non-family employee was starting work on Presidents Day.

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The Life of a Helicopter

By Noah Graff

March 6, Olaf Tessarzyk, Managing Partner/President of ZPS America, test flew a Uh1-H Huey 563 helicopter he helped build as part of the Indiana Air Search and Rescue organization (IASAR).

IASAR is a non-profit organization which restores old helicopters, which will then be used for 3rd tier search and rescue duty and air shows. Every Tuesday evening for the last five years Olaf and 36 other members of IASAR, many of them Vietnam veterans, gathered at a hanger at Indianapolis metro airport to restore the helicopter. Everyone took on different job, such as maintenance of the radio, working on the turbine, etc. Olaf got the sweet gig of being the test pilot because he was the only certified test pilot in group—he got his certification serving in the German military.

Olaf beamed as he talked about how honored he felt to be part of the eclectic group of volunteers who shared his passion for helicopters and working hard together for a good cause.

This specific helicopter has had an interesting life, one that kind of reminded me of the life of a good ole used machine tool. From 1968-1972 it had been flown in Vietnam. After that it was used for military training and finally it had been used for search and rescue. Olaf and the IASAR team either rebuilt or replaced all of the helicopter’s parts including putting in a brand new engine. Many times they would have to acquire parts by trading spare parts with other people building their own helicopters.

IASAR is entirely funded by donations, membership fees of $85 per year and corporate sponsors. ZPS America sponsored 10 memberships. Members get one helicopter ride every year, which a great deal considering that often a helicopter joyride will cost $400 or $500 a pop.

Go to www.iasar.org for a video of the first flight.

The First Flight of the 563

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No Free Lunch

By Lloyd Graff

Today’s Machining World needs your help. We have been caught in the perfect storm of steady increases in printing and postage expenses and a disastrous recession in the machining business that has trampled our advertisers.

On the cover of the March 2010 issue of Today’s Machining World, readers will see a request for contributions similar to those made by National Public Radio.

You receive TMW and this Web site free, and you will continue to get them. But in the end, there’s no free lunch.

For a $40 contribution you will get a $10 mini MagLite as a premium. Anything less would still be appreciated, with all my heart.

So here’s the deal. Contribute what you think is fair. And do it now.

Click here to contribute.

Respectfully,

Lloyd Graff
Editor/Owner
Today’s Machining World

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Betting On Our Economic Future with Alan Beaulieu

By Lloyd Graff

Alan Beaulieu of the Institute for Trend Research spoke at the Precision Machined Products Association Management Update and gave his predictions about the next couple of years. Beaulieu is not just any dismal soothsayer. He specializes in looking at the manufacturing world and had correctly predicted the dramatic recession we are just poking out of today.

He is quite confident we are in a sustained recovery, which will gain momentum through next year. He sees 2012 as a seesaw year.

The most surprising aspect of his talk for me was his prediction of significant inflation by 2011. Beaulieu suggested an inflation rate of 6.5 percent next year, pushed by a surge in commodity prices.

Beaulieu sees commercial lending by banks gradually easing. In his view, banks want to lend but are being restrained by government examiners who are working at cross purposes to the avowed intent of the administration to expand credit for small business.

Beaulieu sees us at a classic inflection point of opportunity to buy residential real estate. In his view, we have six months to get a historic discount on real estate. His admonition was to buy a condo or a house either to use or rent out as soon as possible because both price and interest rates are going up soon.

He had some interesting political and economic views as well. He sees Russia as a crumbing mess with a dying population and extremely low birthrate (1.1 children per woman). He sees the Euro headed back to parity with the dollar. He recommends buying gold and sees copper prices reaching for the moon because of Chinese demand.

His top categories for growth are medical, food, energy (he likes wind), security and water. He is very bullish on India.

The best thing about Beaulieu’s talk—he didn’t hedge his bets.

Question: Are you considering buying residential real estate in the next six months?

Alan Beaulieu at PMPA Management Update

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Can Machines be Too Efficient?

By Lloyd Graff

I was talking to a fan of Today’s Machining World who works at the world’s largest airplane builder. After discussing the Dreamliner’s ups and downs, he asked me if I thought machining could get too efficient. “What if x, y and z machining times got so fast you wouldn’t need any machinists,” he asked me. I laughed, but he went on.

“Lloyd, did you know that BMW, Mercedes, Porsche and Audi decided that 155 miles per hour was as fast as non-professionals could safely drive on an autobahn, so they jointly decided to make that speed the maximum their cars would run?” he said.

His point about machining is that the builders make a mistake by constantly pushing machining speeds as improvements. He fears that we are losing the balance between machinist and machine.

The whole conversation sounded like a replay of the folk ballad of “John Henry, the steel driving man” who fought the track laying machines to a dead heat.

The engineer from Seattle sees being a welder as the only safe job in metalworking, because it cannot be outsourced to China and speed is limited by the melting temperature of metal.

Questions: Can machines be too efficient? Machinist or welder, who has more job security?



Johnny Cash – Ballad Of John Henry’s Hammer

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The Call

By Lloyd Graff

I was watching the new Ron Howard series “Parenthood” Saturday night when my cell phone rang with a call from the 602 area code (Phoenix). One of the key threads in the show is a story about a boy diagnosed with Asperger’s, a step on the autism spectrum.

The caller was the daughter of a first cousin who went on to breathlessly recount the story of my cousin, Don, being hit by a car at 4:30 a.m. that day and being killed.

I had written an “Afterthought” awhile back about my relationship (or lack of) with Don, who ran away from a high school English class we were both taking, 48 years ago. I never saw Don again after that.

He suffered a psychotic break that day I learned, and was placed in a psychiatric ward after my Dad literally chased him down on the University of Chicago campus.

Donnie and I were not close, but we played ping pong and softball. We were kin. His family was a crumbling mess, but I didn’t know that at the time. I had no idea Don was a fragile vessel. When the vicious English teacher humiliated him in class that day and Dan bolted out of the class I was stunned by the teacher’s callousness, but I was also stunned that Don reacted by running out of the room and the building.

It was all so crazy.

It was my intro to emotional illness.

Don’s life with schizophrenia ended at 4:30 a.m. Saturday with the impact of a Honda Accord going 42 miles per hour, according to the police report. He had no wife or children. The story on the Washington Post said he was “an eccentric man” who frequented a nearby shopping center.

Don’s niece, Elizabeth, is looking for a place to bury him. She asked me if he could be buried in a plot my father had bought in the late 1960s. I didn’t know what to say to her. As close as I had been to death 18 months ago, I had no burial plans, nor did my brother or sister or our spouses. I didn’t like having to deal with Don any more in death than I did in life. For 48 years I could not get that terrible day in English class out of my head. And now I have to live with the image of Don Graff’s “eccentrism” walking into the Honda on a four lane highway at 4 a.m.

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Do you feel like doing work today!?

By Noah Graff

Happy Monday morning! Some of you readers are refreshed from two days of R and R and ready to attack today’s tasks, while some of you others may not feel like plunging in and getting that unfun stuff done that just has to be done so you can be successful or just survive.

Check out this entry from Seth Godin’s Blog last week. Maybe it will make you “feel” better about the immediate challenges you have to tackle. Maybe not. But should that matter anyways?

“I don’t feel like it”
By Seth Godin

What’s it?

Why do you need to feel like something in order to do the work? They call it work because it’s difficult, not because it’s something you need to feel like.

Very few people wake up in the morning and feel like taking big risks or feel like digging deep for something that has eluded them. People don’t usually feel like pushing themselves harder than they’ve pushed before or having conversations that might be uncomfortable.

Of course, your feelings are irrelevant to whether or not the market expects great work. Do the work. Ignore the feelings part and the work will follow.

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New Bone Screws Could Make it Hard For CNC Swiss Guys

From left, screws made of polylactic acid, hydroxylapatite, and medical stainless steel. (Credit: Fraunhofer IFAM)

By Noah Graff

Great news for people with broken legs, but perhaps terrible news for the guys manufacturing titanium and stainless steel bone screws on CNC Swiss.

According to an article this week on CNET.com, “This month, researchers at the Fraunhofer Institute for Manufacturing Engineering and Applied Materials Research (IFAM) in Bremen, Germany, are unveiling a new type of screw that not only biodegrades within two years but actually encourages bone growth into the implant itself so as not to leave gaping holes where the screws used to be. (This has been one goal of fracture putty as well.)”

This could mean no more need to remove screws after bones have healed fractures nor having to leave inorganic foreign metal objects in our bodies. The precious medical manufacturing sector would be turned upside down.

IFAM researchers developed a moldable composite made of polylactic acid and hydroxylapatite, a ceramic that Philipp Imgrund of IFAM’s biomaterial technology department says is the main constituent of bone material.

Because the screws are made by injection molding, post processes such as milling won’t be necessary.

Could be a good time to get into the molding business.

Source: CNET News

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March Madness Swarf

By Lloyd Graff

Tattoos on NBA players irritate me. Lebron James has 17 body tattoos that have been identified. Though it is suspected that he has others which have not appeared in photos.

I see the proliferation of body hieroglyphics as a reflection of the “look at me I’m a star” braggadocio that sullies the slam dunk league. I am an old school basketball purist who revels in team play and a flawless fast-break. I love a Steve Nash or a Chris Paul because they can score and dish and improvise the game into Brubeck jazz.

I ask myself if my annoyance with tattoos is latent racism, generational divide, or just hoops snobbery. It probably has some of all three elements. Though I see a Chris Anderson as the ultimate narcissist, a mediocre white player displaying himself like a spooked peacock.

Anybody who follows my writing knows that I am a sports enthusiast. Basketball has been a love since I watched Bob Cousy make no-look behind the back passes to Bill Russell for the Boston Celtics. I think Lebron is the most talented basketball player I’ve ever watched, but watching him take over a game with one on one play in the fourth quarter is as annoying as looking at his tattoos.

Question: Do you feel that body ink is symptomatic of a thuggified cult of personality NBA or am I a hopelessly out of touch Frank Sinatra white guy in a Lil Wayne’s world?


Chris Andersen & his tattoos

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Time to Develop Young Machining Talent

By Lloyd Graff

The most stunning conclusion I reached from the Precision Machined Products Association (PMPA) Management Update Conference last weekend in Phoenix is that the precision machining operations business is good right now. Whether it was the automotive contingent, the aerospace guys from the coasts, the mixed baggers, the brassers or the ammo and firearms suppliers, the PMPAers were generally happy. What a change from a year ago.

The PMPA’s statistics show the same reflection of business. Sales levels are still off peak levels but profits are solid because of significant gains in productivity. The pruning effect was referred to by almost everybody I talked to. Weak employees have been shed. Processes have been sharpened. Companies are lean and hungry.

Contrary to the idea that nobody is hiring, the folks in Phoenix were looking. What they were seeking is youth and energy. Skills are a plus but they can be developed. We are at a point in the business cycle where you can find smart eager young people who are ok with starting out on the cheap and working their way up.

Dave Knuepfer of DuPage Machined Products outside of Chicago is hiring high school kids as interns hoping one out of three will stick. Ron Bracalente of Bracalente Manufacturing in Trumbauersville, Pa., is hiring engineers out of school for $13 per hour and fast tracking them up the pay scale if they can cut it.

Precision Machining is shedding its old skin coming out of this recession. The focus in Phoenix was not about adding machine capacity, it was about acquiring young talent during one of those rare windows of opportunity.

Question: Are you using this period to acquire young talent?

Richardson Ng, 2nd year Mechanical Technician at Centennial College, watches the sparks fly off a grinder in Precision Machining lab.

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