Monthly Archives: April 2010

Hollywood Soapbox

By Lloyd Graff

Have you ever wondered how a movie gets made? This is the inside scoop on that process, right now.

Mary Ethridge has written several pieces for Today’s Machining World, including the cover story “Who’s Eating off Mary’s Plate?” about the history of the metal plate in her wrist. She lives in Akron, Ohio, and keeps up with the local scene. So when the Soap Box Derby ran into financial difficulty because the big local sponsor, Levi Strauss, walked away, Mary saw a story worth writing and pitched it to USA Today.

USA Today staff reporter Bruce Horovitz wrote the story, and the day after it appeared Corbin Bernsen, the actor famous for his portrayal of Arnie Becker on LA Law in the 1980s, called her up to say he loved the piece and wanted to do a movie about the Derby. Mary and Corbin hit it off immediately and he set off to develop a script and obtain financing. Bernsen understood Hollywood’s ways well. He envisioned a small budget Hallmark movie on a $750,000 budget. He wanted it to be shot in Akron and California, not Thailand or Slovenia, which he was afraid would happen if the Hollywood types put up the dough. Through Mary Bernsen got connected with local Akron money and raised the funds with the understanding that the film would be shot locally.

As the movie, 25 Hill, started to take shape new sponsors started to appear, even FirstMerit chipped in with $50,000. Geico, which saw the movie as a good product placement opportunity, became the prominent sponsor in the movie and stepped up big for the real Soapbox Derby.

The final shooting will be in July at the actual event in Akron. Mary Ethridge has been in daily contact with Corbin Bernsen since the article appeared in print and has acted as his eyes and ears in the Tire City. The Wall Street Journal ran a front-page feature on Wednesday about the movie.

It might make it to the theaters, yet.

Soap Box Derby car from Bernal Heights Hill Soapbox Derby 2007

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Doing Business with Santa Math

By Noah Graff


I spoke on a panel about the power of social networking and blogs at the Precision Machined Products Association tech conference on Monday. My specific segment was on how best to use videos to promote your business.

The presentation seemed well received by our good sized audience, and at the end we fielded some questions. Someone in charge of marketing at a company attending the conference asked us, “How do I justify to my boss the ROI on having a blog?” We all responded by saying that your ROI from a blog isn’t easily quantifiable, yet that doesn’t mean it can’t be a powerful tool for self-promotion.

Seth Godin’s blog April 27th summed it up in an astute way. Godin says that ROI from having a Blog or Forum is like “Santa Math.” It’s not a normal investment like paying for a college degree that could lead to a high paying career.

You have to do a blog because you genuinely want to give to a community of people.  Having a great blog or publication takes dedication, care and heart. Those efforts have to be genuine in order to create something that people love and value. This he compares to the way Santa Claus operates. Santa flies everywhere, giving presents and good cheer to people and doesn’t ask anything in return. Doing this he earns trust, friendship and gratitude. Maybe one day he can license his image and make a chunk of change to feed the reindeer and elves. But Santa wouldn’t be the loved icon he is if he was expecting money in return for giving presents to kids and brightening people’s lives.

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Lebron James Vs. Michael Jordan

(From the Archives)

The Chicago Bulls are playing the Cleveland Cavaliers in round one of the NBA playoffs, and I just cannot resist comparing Michael Jordan and Lebron James.

Let’s break this down.

1. Defense: As a defender Jordan was a consistent all pro, but he was not a shot blocker. Lebron defends well and is a superb shot blocker when he wants to be. Advantage Lebron.

2. Rebounding: As a rebounder Jordan was instinctive in his positioning, thus ending up with numerous triple doubles. Lebron is taller but seemingly is out of rebounding position more than Jordan. Advantage Jordan.

3. Passing: I like Jordan, but he had the advantage of Phil Jackson’s coaching and triangle offense, which had more motion and thus more opportunities for assists. Lebron is a good passer but Cleveland’s style of offense and his penchant for dribbling and one on one play makes me say advantage Jordan.

4. Outside shooting: Jordan improved as he got older, but Lebron has better range. Advantage Lebron.

5. Driving to the basket: Jordan might have been a bit more creative, but Lebron is incredibly strong. Advantage Lebron.

6. Intangibles: Six titles make me go with Jordan as a leader and winner, but Lebron is also a leader. Jordan had a coach and mentor in Phil Jackson. Lebron basically is the bench coach for Cleveland. As of now, Advantage Jordan.

My overall assessment today: Lebron is the superior player. He will win championships. I hope he stays as focused and dedicated as he seems today.

Question: Which player do you think was/is better in his prime?

From "The Scores Report."

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A Machining Company Thrives With Web Promotion

Brian Pendarvis of Anaheim says he hasn’t felt the recession. His company, Pendarvis Manufacturing grew despite the softening that battered almost everybody else in the machining game. He attributes his success to marketing his job shop on the Web.

Brian says he spends about $50,000 a year maintaining his Web site and spreading the word about his company’s capabilities on Yahoo, Google, and McCraes. He pays for Google ad words, but just to promote the company within a 100-mile radius of Orange County.

His niche is combining fabricating, welding and machining, a combination we don’t see that often as firms reach for specialization. He says he tracks 5-8 calls per week directly from his Web prominence, which he says enables him to land one new customer per month on average.

He lauds the work his Web designer has done for him—a firm that split off from ThomasNet—Creative Works.

Photo from BusinessWeek

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China’s “Middle Class,” or Lack Thereof

Gordon Styles, British owner of Star Prototype China Limited, a high-quality rapid prototyping and rapid manufacturing supplier in China, wrote the following response to the April 19, swarfblog, “Is China the Next Enron?”

China as a subject is far more complex than most people realize who do not live here.

The term “Middle Class” is unhelpful in China. There are just people. Many have no money; some have money; a few have a lot of money. I say it like that because that is how it is said in Chinese:  you qian ren – has money person.

It is generally accepted in China that once your earn above RMB 10,000 per month, you have kind-of reached that special place that you might refer to as Middle Class. It’s enough to buy a moderate apartment and have a very cheap automobile.

Price of property in Shanghai and Shenzhen is through the roof, but the majority of people don’t live in those places – so you cannot really say that Beijing, Shanghai, Guangzhou or Shenzhen are representative.  For sure there are some speculative bubbles in those places; and you are right, the Government is taking drastic action to cool the market. Hong Kong is part of the PRC, but in reality it operates outside of the PRC system except for Defence and Foreign Policy. Hong Kong cannot be used when talking about China.

I live in Zhongshan, which is only about 2 hours from Shenzhen by Car, and 2 hours from Hong Kong by boat. Zhongshan is famous because it was the birth place of China’s most famous and revered political figure Sun Zhong-Shan. He was the first President in China.  Zhongshan is widely considered to be one of the top 3 “best cities for living” in China. Zhongshan is far more representative of the typical medium sized City.

China, like Germany, knows that to make real wealth in a country you have to create things that are of long-term use and value. They know that humans measure wealth by the amount of REAL stuff a country has. All of the money and cash equivalents are merely an alternate bartering system. When you send your people into the fields to dig up raw materials; process them in factories; assemble them in the form of railways, roads, factories, airports, houses, public buildings etc., you are creating real tangible balance sheet value.

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Machining Industry Scuttlebutt

The collaboration of DMG and MORI SEIKI is moving along rapidly. They now share a magnificent showroom warehouse in Hoffman Estates, Illinois. They are sharing staff, with MORI SEIKI taking the lead on marketing in North America. The companies have taken five percent stakes in one another. MORI SEIKI’s CEO Dr. Mori is on DMG’s board and DMG’s CEO Dr. Kapitza is on MORI SEIKI’s board. The decision on whether to build machines in the U.S. is still a topic of discussion with nothing finalized.


If President Obama appoints a Catholic or Jew to the Supreme Court to replace the retiring John Paul Stevens the court will have no Protestants for the first time in its history. I find this an interesting commentary on the changing demographics of American politics. I expect to soon see three women on the court. I wonder if the appointee will dance around Roe versus Wade like the Bush appointees.


I received an e-mail from Chris James of Ryco Hydraulics from Australia, looking for a place to buy Pittler Acme spare parts. Talk about an orphan machine problem. What does one do about parts for a Conomatic or Greenlee or a Peterman. How about a Waterbury Farrel header? Will Fadal soon be in that category?


I watched Woody Allen’s Sleeper when I should have been sleeping around 4 a.m. on Saturday. His mimicking of a robot was hysterical. Forty years ago he was funny. Today—not so funny.


Alan Bentsen just wrote me an ecstatic email saying that because of my blog last week, he found a leg-type Davenport out of a trade school in Ohio. Supposedly it is a “creampuff” never used in production. He says he might want to acquire another Davenport but only if he can get one for free—his wife will only let him buy one.


The SEC’s lawsuit against Goldman Sachs is David versus Goliath. Who do you think Goliath is?


Question: Should race, gender, or religion be a factor in the selection of Supreme Court justices?

New promotion from DMG/MORI SEIKI

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An Authentic Vacation

By Lloyd Graff

I just read a nice article in the March Atlantic Monthly by Kayt Sukel, a solo mother (Dad’s in Iraq) who took her three-year-old son Chet, to Petra, Jordan, for a vacation. Her point in the article was that an adventurous vacation, even for a young woman and son in an Arab country is worth the risk.

It brought back memories for me of taking my family to Petra in 1999. Nine people squashed into a minivan, crossing into Israel’s’ West Bank at the Allenby Bridge in Jerusalem, meeting our Palestinian driver and Jordanian guide Osama (we called him Sam), and racing down to the fabulous ruins of Petra we had seen in Indian Jones and the Last Crusade.

We got to Petra grimy and exhausted, registered at the hotel and had a Turkish bath that included a quick, rough massage. This was pre-Intifada so we felt pretty safe in an Arab land as Americans. It was wonderfully exotic but a little spooky too.

I have always hated the Disney theme park approach to travel with children. Go to a National Park or a foreign country on a deal, instead of the sanitized travel experience of Disney. I know millions of people love the Disney experience, but I think the woman who dragged her kid to Petra was right on. Go for the real thing not the light.

Kayt Sukel and son Chet in Jordan

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Is China the Next Enron

By Lloyd Graff

James Chanos

James Chanos

Jim Chanos is famous for identifying the Enron scam, shorting the company’s stock and making a fortune. He runs a hedge fund named Kynikos Associates, which means cynic in Greek. He specializes in spotting emperors without clothes and is currently betting big that the Empire of China is a naked power.

He compares China to Miami and Dubai of recent memory. The common thread is runaway condominium and office construction, huge real estate inflation and a shortage of able buyers. He says that today, all over China, high-rise buildings are rising, fueled by aggressive bank lending to developers. They are building 1,100 square foot shell apartments without floors, and selling them—or attempting to sell them, for around $150,000. The problem is that even though half are going empty, they are still building. With middle class dual earner couples earning an average of $3,500 a year, buying a $150,000 apartment would be the equivalent of an American couple making $40,000 a year buying an $800,000 home. We saw how that worked out in 2007.

Chanos sees the phenomenal growth numbers in China being fueled primarily by real estate speculation and construction. In his view it is unsustainable. State and local governments are being funded by real estate development, so they have an interest in seeing it accelerate. They will suffer mightily when the bubble bursts.

Chanos feels the problem in China is that the central planners set a growth goal, say nine percent, and then tell the underlings to make sure it happens. The easiest way to do it, other than fudge the numbers (which they may do), is to let the builders build with easy money.

What happens if Chanos is right and the giant cranes go away like they did in Dubai and Miami? He feels that the raw materials companies who are supplying the steel, copper and cement will suffer immediately. Copper at $3.60 a pound could plummet, as well as iron ore and scrap prices. Crane companies will get killed. He feels that the Chinese currency, which everybody including the Obama administration is hoping will rise when it is no longer pegged—will fall. Incidentally, Gary Schilling, the noted bearish economist who predicted the American stock market collapse (not the rebound, however) also feels the Yuan will fall in value when it is allowed to float.

Jim Chanos is a very smart guy. He sees the Chinese bubble bursting later this year or in 2011. The Chinese have enormous reserves in dollars to soften the blow and may tighten credit dramatically soon to try to avert a property crash. China bashers may be happy to see the country suffer and revel in lower raw material prices, but with an interconnected world, be careful what you hope for.

Question: Do you hope China collapses?

Lux Hills community in China

Lux Hills community in China

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Is Efficiency Sometimes Unhealthy?

By Noah Graff

For the May issue of Today’s Machining World, I interviewed Carl Hoffman, author of the new book, the Lunatic Express. The book chronicles Hoffman’s travels throughout Asia, Africa, South America and the U.S., during which he attempted to use the modes of transportation commonly used by natives, notorious for discomfort, tardiness and poor safety.

One thing Hoffman described to me is how the concept of time in Third World countries differs from that in the First World. In countries like India, the Congo and Columbia, people generally have a different expectation of what it means for things to start “on time.” People never know whether a train or bus is coming in one hour or three. Waiting for things for long periods of time, and arriving to destinations late is just an accepted way of life.

It’s mind boggling to me how anything gets done at all in places with such a low priority on punctuality. How can businesses operate if it’s unknown if workers will show up?

One would think the people of these countries would be happier if things functioned the way they do in the U.S.? It’s always so frustrating to me, knowing that precious time has slipped away that could have been used for things I care about. After all, time is a limited commodity. Once you lose it, it’s gone forever.

Yet many people I know from these places where things move so sloooooowly say they often feel more relaxed and centered when they return home to Slowville. And more and more it seems like us First Worlders in our civilized, efficient habitat are stressed out and paying top dollar for shrinks to help us chill out. We pay money to go to yoga classes and lie on the couch watching reality shows to slow ourselves down.

Is total efficiency sometimes unhealthy?

Jeepney Stop in Manila, Philippines

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A Race to the Perfect Collapsible Container

Imports from Asia are rising again. China is allegedly going to allow its currency to rise. Scrap steel is leaving the U.S. and foreign steel is rushing in to fill the warehouses.

Much of the trade in goods travels in metal shipping containers, those 20 and 40 foot long boxes you see on rail cars and trucks everyday.

Normally about 20 percent of the containers on ships at any given moment are empty, especially those headed toward Asia. This imbalance costs shipping companies billions of dollars each year, but it presents a gigantic entrepreneurial opportunity for inventors and engineers to make a killing. In the April 12th Wall Street Journal, John W. Miller wrote a fascinating piece on the race to build stackable or foldable shipping containers. It’s an idea that has been floating around for years, but so far nobody has been able to build one that meets all of the demands of shipping firms.

The Port of Rotterdam in Holland is Europe’s busiest port, and container ideas are flowing out from there. Rene Giesbers has designed a composite fiberglass container whose vertical walls fold inward, giving it an “x” shape as it collapses on itself. It supposedly saves 75 percent of the fuel needed to transport it and won’t rust.

Another Dutch engineer, Simon Bosschieter, has designed a container made of steel alloy with folding walls that slide into each other.

An Indian banker, Avinder Bindra, also designed a container with folding walls, but his are stacked vertically instead of horizontally.

With such a big pot of gold out there awaiting a killer design, somebody is going to get it right.

How about you?

Personally, I have no three dimensional brain—I can’t even rearrange my closet. But for people who can envision how to cut precise metal parts in their sleep and who have knowledge of materials, the collapsing container is the Rubik’s Cube of a lifetime.

Why not give it a go?

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