Monthly Archives: January 2012

Manufacturing in Thailand – the “Detroit of the East”

Emily Halgrimson, Today’s Machining World’s Managing Editor, was invited to join 11 other journalists from the U.S. and Canada (six in the automotive sector and six in the food industry sector) by the government of Thailand’s Board of Investment (BOI) on a four-day media tour to promote Thailand’s industry around Bangkok and the Southeastern seaboard.

Saturday, January 14th 10 a.m. – Left Chicago’s O’Hare International for Thailand on American Airlines. It’s not comforting to fly a bankrupt airline’s 757 over the Pacific. The distance is a drawback to North Americans doing business in Southeast Asia – 15 hours to Shanghai and another six to Thailand is a haul. I was pleased to find PBS’s excellent series, Downton Abbey, on the inflight entertainment, but slept most of the way thanks to Benadryl.

Sunday 10:30 p.m. – Arrived at the airport in Bangkok, and while waiting for the other journalists to arrive, ate some of my favorite Thai food of the trip – deep-fried pork with a red coconut curry sauce and Tom Yum soup. Made a vow to eat only Thai food for the duration  –  was not a problem. Transferred to our five-star hotel, Novotel, and were welcomed with plates of Thai deserts, wine and palm-to-palm bows by all.

Some of the journalists after a tour of Western Digital’s hard drive production facility

Monday 8 a.m. – Totally jet-lagged. We visited Western Digital’s (WD) plant in a recently flooded industrial estate near Bangkok and were met by John Coyne, President and CEO. Forty-five percent of the world’s hard drives are produced in Thailand, and WD, worth $10 billion, is the largest company. Their plant was under 1.9 meters of water only weeks before our visit. Divers come in for the most valuable equipment and moved it to a kind distributor’s facility 100 km away so they could decontaminate and repair it while the floodwaters lingered. WD employs 38,000 Thais, most who make under $10/day. I’m not sure what I was expecting, but the modern clean plant was a total surprise. It contrasted heavily with outside the industrial parks, where the country’s poverty is more obvious. Western Digital’s projections for 2011 were $176 million; because of the flood they reached $119 million. No word yet on the cost of the cleanup.

The journalists preparing to enter the Board of Investment’s (BOI) Fair

Monday 11 a.m. – Headed across town to the Thailand Board of Investment’s (BOI) Fair. This was interesting. When Westerners hear the word “fair” we think animals and Ferris wheels. In Thailand, a fair is a showcase of the country’s industry direct to the consumer. The fair happens only once every 10 years and was a huge deal. The King of Thailand – whose authority and respect are reminiscent of Kim Jong-ll – is a “green nut,” and the green theme is seen country-wide. The “Royal Pavilion” showcased a “green themed” 3-D film, complete with a tree growing up from the middle of the room, and the finale – a real rain shower (watch your camera). Huge exhibits in the outdoor park included Toyota, the most popular carmaker in Thailand; Chevy, which had its own 3-D show about the evolution of the American-born automobile; and CP, a huge frozen food conglomerate born in Thailand who’s big in Costco. The show also had a beer garden (hint-hint IMTS organizers) and a joyous sort of “look what we have in Thailand” feel to it. The people of Thailand are proud of what they’ve done in attracting these international companies over the last 20-30 years, but seem cognizant of environmental mistakes the U.S. and China have made during their development, and are making an effort to not repeat them.

Tony Blair speaking at the CEO Forum Bangkok

Tuesday 8:30 a.m. – Attended the BOI CEO Forum. Guest speaker: Tony Blair. A very inspiring and encouraging speech. Interestingly, he noted strongly that America would not be where it is without its open immigration policies. Mr. Blair encouraged Thailand to create this immigration-friendly atmosphere now, and noted that Thailand has “enormous potential” – its people, geography, and relative stability. He emphasized that Thailand’s job was to let the world know that it’s “open for business.”

 

 

Tuesday 3:30 p.m. – Left Bangkok for Pattaya, a tourist city next to the Eastern Seaboard Industrial Estate (ESIE) and checked into our spa hotel on the beach – filled with Russian vacationers. Two Thais told me that the Russians are disliked, they are stereotyped as being cheap.

Dinner on the beach in Pattaya

Development in the industrial estate was shocking, in a good way. The government invested millions in infrastructure to attract international companies interested in supplying the Eastern Hemisphere. Roads, electricity and water supply are new, modern and reliable. Ate a fresh seafood dinner at a beach restaurant while the sun disappeared over the ocean and the beer and conversation flowed. Beautiful.

Wednesday 9 a.m. – Visited American Axle & Manufacturing’s  (AAM) Rayong Manufacturing Facility in the Eastern Seaboard Industrial Estate. AAM opened its Thailand operation in 2008. 2010 sales were $2.3 billion. They produce mostly axle systems, but also drivelines, drivetrain and chassis, and other metal-formed products for automotive. The plant is 124,000 square feet and is located in one of Thailand’s many “free zones,” (tax-free). They currently exclusively supply GM’s Thailand operation, but plan on doubling the size of their plant, as they will be supplying Volvo soon. The Auto Alliance Thailand (AAT) manufacturing facility, a joint venture with Mazda, which wouldn’t welcome us for a tour, produces the Ford Fiesta and lightweight trucks for that particular half of the world. I was told that Thailand can’t compete with China’s steel prices, so asked what Thailand’s advantage is over China and India. I was told that it’s Thailand’s supplier base. When GM orders a part, AAM must deliver within 70 minutes.

Journalists after a tour at the Thai Summit Group

Wednesday 11 a.m. – I was very interested to tour our first Thai-owned company, the Thai Summit Group, which started in 1977 and makes auto parts for major auto companies. The stamping and injection molding facility makes mainly front and rear bumpers for Mazda and Ford. The plant was impressive and had six 3,000-ton presses and can produce 800,000 bumpers and 6,000 chassis per year. Annual sales are about $10 million. There was a large difference in the atmosphere of the plants from the Western owned companies and this completely Thai run company. They have a basketball court just outside of the main office and President, Mr. Shigeo Sakaki, commented that the workforce there is young and has lots of energy, so they need to have activities for them. It was much more relaxed than Western Digital and American Axle. Young people roamed the grounds like on a college campus. It was nice. They’re obviously making money, but it felt like it would be a nice place to work.

A night out in Pattaya

Wednesday 2:30 p.m. – Visited Celestica Thailand, Celestica’s largest location in terms of revenue. They employ 5,630 people and are five minutes from the large port on the Eastern Seaboard and one hour from the airport. They mainly make networking equipment, high-end storage and servers and teleconference equipment (Web cams, phones, digital photo albums, etc.). They see their future in optical device assemblies for the Internet. The Senior Vice President, Mr. Duangtaweesub, was impressive. Thai born, he had studied 30 years ago in Washington State. He started the company, which was bought by Celestica a few years later. He has been running Celestica’s Asia operation ever since.

Thursday 9 a.m. – We were scheduled to visit Magna Automotive and Asia Precision Co. Ltd. in the Amata Industrial Estate, but Magna canceled because they couldn’t get permission from the U.S. office to let us in. Asia Precision was fascinating. It employs about 800 workers (mostly women, Mr. Karoonkornsakul, the CEO noted, because they’re patient, are very good with detail, and there’s little heavy lifting needed) and has over 400 CNC machines, almost all Japanese. They make parts for automotive and camera and their 2011 sales were $30 million, with $40 million expected in 2012. Most of their business comes from the East, but they are a key supplier for Emerson in the U.S., who has asked them to consider building a plant in Mexico, which they are researching now. They are also considering expanding into Indonesia, which the CEO commented would be “the next Thailand,” with production projections of 2 million autos in 2012.

Asia Precision hires mostly women because they are “patient, detail oriented, and the parts are light”

When the automotive crisis hit in 2008/9 they began making rollers for printers. In response to their foreign clients’ needs, they are trying to expand into medical and aerospace, and are facing many of the same hurdles American companies face: the need for skilled employees and regulatory know-how.

Thailand’s Buddhist culture was obvious at Asia Precision. They have weekly company-wide meetings followed by meditation and a singing of their national anthem, and are heavily involved in giving back to their community through projects. They also had the first recycling center we saw, the proceeds of which are donated to the poor. Most of the employees, who are typically age 20-25, are recruited from villages in the north, and once a year they return home for the holidays. They are also very into exercise and health, recently holding a company marathon to raise money for flood victims. The atmosphere of the company was relaxing and the CEO mentioned they have very little employee conflict. It was refreshing to see a company that makes money but has quality of life at the forefront.

A training room at the Thai-German Institute

Thursday 3 p.m. – Visited the Thai-German Institute, a government training program for industry. This was interesting – I kept wondering why the U.S. isn’t doing something similar, it seemed so obvious. This organization started in 1992 with German funds with the goal of providing high-tech workers to industry. It is now run by Thailand’s Minister of Industry and trains 2000-3000 young people per year, mostly in mold and die technology, but also in automation and machining. It provides workers to the industrial estates in the south, who pay a fee for each worker they hire. Recruiters from training programs like these go to the north in search of competent, bright, high school graduates whom they lure to the south with the promise of decent salaries, subsidized lodgings, and per diems for the duration of training. Then they find them jobs. It appears to be a very win-win system that’s working for Thailand.

Question: Would you consider moving your business or finding suppliers overseas to save money?

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Industry Scuttlebutt

Maddie Parlier of Standard Motor Products in Greenville, South Carolina

The news that Japan will show a net deficit in trade for 2011 is another signal of a shifting economy that currently favors North American manufacturing. Europe is in a mess, and with the Euro still hanging in at $1.30 and no real structural changes yet, it is also losing competitiveness.

The Mori Seiki plant now being built in Davis, California, near Sacramento is a clear sign of the sea change happening now. Equally significant is Honda’s announcement that it will be building its first Acura in Ohio in three years.

Mori plans to build 20 percent of its production in the U.S. and interestingly, 20 percent in Europe, indicating that its partnership with DMG appears to be working. With Mazak entrenched in Kentucky, I am expecting Okuma to once again manufacture machines in the U.S. They used to produce in Charlotte, which has quietly become one of the machine tool centers of America, and it would make sense for them to start building in that neighborhood again.

Would it be a stretch to see companies like Citizen, Star, even Doosan and DMG begin production in North America? Romi of Brazil, which made a pass at Hardinge, is another candidate. And when is Hardinge going to finally move out of Elmira?

*****

I highly recommend Adam Davidson’s cover story on manufacturing in the current Atlantic. Davidson is one of the finest economic journalists around today, and this piece is one I wish I had written. He wrote about the people of Standard Motor Products, a manufacturer and distributor of after-market automotive products, based in New York City with a big plant in Greenville, South Carolina. It is run by Larry Sills, 72, third generation of the founding family, but publicly held.

I loved the way Davidson focused on Maddie Parlier, a 22-year-old “level one” operator working in the clean room of the company’s fuel injector assembly line, and 27-year-old Luke Hutchins, a “level two” operator who oversees a 7-axis Gildemeister turning center.

Maddie has worked for the firm for three years and is considered a topnotch employee, but she is held back by lack of sophisticated education. Pregnant at 17 in high school, she had to forgo college to work and take care of her baby. As much as she would like to enhance her training now, she cannot afford the time away from her job and child. So she is stuck, and worried that a robot might take her job. And it could happen, if demand picks up enough to justify the capital investment by the company.

Hutchins, the Gildemeister operator, had the family backing and the time to choose his career path. He went to a four-year college, taking biology to become a dentist. He got bored and then thought he would follow his mother’s career path in radiography. Then a friend told him he could made $30/hour if he learned to run complicated machine tools, so he shifted gears and enrolled at Spartanburg Community College where he took a lot of math and learned CNC programming.

Now he is a key guy at Standard Motor in Greenville and doesn’t worry about his job.

I strongly recommend that you read this piece and share it with your friends and family. Even if you know and live this stuff like I do, you will still get a lot out of the article.

******

The Peyton Manning-Indianapolis Colts-Andrew Luck drama is one of the most fascinating sports, business and human stories to come along in a while. Manning, probably the greatest pro-quarterback ever, sat out this season with a neck injury. The team went 2-14 giving them the #1 draft pick, almost surely quarterback Andrew Luck of Stanford.

Luck, whose father played in the NFL like Peyton’s Dad, Archie, could be the next great NFL quarterback. But – maybe he’ll be Ryan Leaf instead. Manning will require $28 million if he comes back to the Colts. But he’s 36 and recovering from surgery and a stem cell procedure.

If you were Manning, would you play again? If you were Jim Irsay, owner of the Colts, would you risk $28 million on him? If you were as good as Luck, would you want to apprentice to Manning for a few years like Aaron Rogers did with Brett Favre?

In business we are often faced with tough calls about bringing in the “next big thing” and letting go of the “horse that brung you.”

 

Read Adam Davidson’s cover story on manufacturing in the Atlantic here.

Question 1: Would recruiting as is done for high school athletes work for recruiting new manufacturing talent?

Question 2: Would you release Peyton Manning if you owned the Colts?

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My Dinner With Newt

Newt and Callista Gingrich on the U.S.S. Yorktown

I just returned from a long weekend of political-tourism in Charleston, South Carolina. It didn’t start out as a Newt-Mitt chocolate kind of trip, it just happened.

My oldest son Ari challenged me to lose 25 pounds. I said, “Okay, if I lose 25 and you drop 15 we’ll go on a trip, just the two of us without wives to a place of mutual interest” (that Southwest flies to). I lost 23 pounds (close enough) and Ari ran the Chicago Marathon and slimmed down in the process, so we decided a few months ago to go to Charleston, South Carolina.

Ari is a foodie, so I challenged him to pick the restaurants. I’m an eater, so I knew we’d be compatible. But the bonus we hadn’t planned for was that the South Carolina Republican Primary was last weekend with the Thursday debate in Charleston. We both love politics almost as much as biscuits, so this was going to be our equivalent of Seinfield’s George Costanza making love, watching TV, and eating a pastrami sandwich simultaneously.

An aside to this: When I was in the ICU after heart surgery Ari came into the room to visit. I had an intubation tube so I couldn’t talk, but we could communicate if I wrote notes with my fat Sharpie. Ari broke the news that John McCain had picked Sarah Palin to be his Vice President. I wrote, “Who is she?” He told me she was the Governor of Alaska that nobody had ever heard of. I wrote, “McCain just blew it.” This was the day after my quadruple bypass plus valve surgery, so you can infer that politics is our “inside baseball.”

We checked into the Market Pavilion Hotel last Thursday and planned our schedule around the debate and our dinner reservations. We went to a classy restaurant named McCrudy’s at 5:30 p.m. so we could be ready for the debate. The food was brilliant, especially my dessert, an intense dark chocolate goo with a thin layer of beets. Sounds ridiculously gourmet, but it was divine.

Newt Gingrich after a Fox News interview in front of the aircraft carrier.

We hoped to watch Newt dunk on Mitt at a bar, but they all had ESPN on, not CNN, so we hustled back to the hotel.

The warm-up shows were all about the ABC interview with Marianne Gingrich (wife #2) nailing her ex about this 1999 mistress (wife #3, Callista) and Newt asking her for an “open marriage.” The excitement built, and John King of CNN, the inquisitor for the debate, did not wait to pop the question of the “open marriage.”

Newt was ready. Wow, was he ready. “I’m SHOCKED” you would ask such a despicable question about my personal life, he glared. And launched into a redmeat diatribe against the ELITES of New York and Washington.

It was right out of the movie Casablanca, when the wonderful Claude Rains (Captain Renault) enters Rick’s establishment and says, “I’m SHOCKED” that there was gambling going on,” just as Peter Lorre comes by and hands him his winnings.

Newt clobbered King, and then Mitt answered the question about whether he would release his tax returns with a “maybe.” Game on. Game lost in minutes. I said to Ari when Romney flinched, “We just saw history.”

The next day we got up early and trekked over to the Mills House Hotel where Morning Joe, the entertaining MSNBC Show with former Republican Congressman from Florida Joe Scarborough and Mika Brzezinski host politicos of all stripes. They were interviewing satirist Steven Colbert, a South Carolina native who was lampooning everybody. Colbert was funny, though not nearly as brilliant as Ari and everybody else seem to think. After the show we took a photo with the show’s hosts Joe and Mika, who were warm and charming, and then looked for our next meal (excellent sweet potato pancakes with a latté at Eli’s).

Next stop was the College of Charleston for a Colbert/Herman Cain rally. Cain was out of the race, but close to 10,000 people showed up on the campus square to be regaled by the Cougarettes (the University’s cheerleaders), a pep band, a marching band, and a gospel choir.

Colbert sang the Star Spangled Banner gospel-style, and Herman Cain strode in elegantly with his stylish black Indiana Jones hat. The crowd was the most all-white group of college kids I’d ever seen. You would have thought you were in a Charleston country club. Maybe we were.

Colbert did his shtick. Cain was friendly but dumb, and one of the gospel singers fainted. But the brass bands were loud and good.

Ari wanted to schlep out to the Romney rally in North Charleston, but I wanted to save my energy for Newt’s rally later at the U.S.S. Yorktown, a retired aircraft carrier, so we walked back to the hotel to prepare for an early dinner at Fig, and later the Gingrich. Dinner was again superb with Ari’s sorghum walnut cake with cinnamon ice cream being the absolute “bomb.”

We then hailed a Jordanian cab driver named “Eddie” who hauled us to the Yorktown, where we had the chance to watch Newt answer softball questions by Sean Hannity of Fox News.

Left to rt.: Joe Scarborough and Mika Brzezinski of "Morning Joe," with Lloyd Graff, and Ari Graff

Whether it’s Kobe Bryant or Tom Brady or Newt Gingrich, it’s fun to watch somebody who is a real pro get on a roll. And Newt was definitely on a roll that night. He had enough magnetism to reset a compass. The man glowed. He hit all the high notes on Obama, and brought up “Lenin’s disciple,” Saul Alinsky (a community organizer in Chicago in the 1950s whose son, David, I went to high school with). He described Obama as the “food stamp” President and then double backed to those evil New York and Washington ELITES.

Later at the rally on the aircraft carrier, after being anointed by General James Livingston, a Congressional Medal of Honor recipient, Newt pounded the same themes, and the crowd, other than the members of the media elites, loved it. Frankly, I loved it. This was history. This was America. This was an earthquake in American Politics and it was breathtaking, whether Gingrich is a huckabee or Abraham Lincoln incarnate.

Saturday was Primary day. History. But it was also the Hominy Grill for brunch and a chocolate pudding “to die for” (oh, I hope not). We also looked for presents for our wives. Every vacation has its moment of pain, I guess. We finally found the requisite baubles and headed back to the hotel for the results of the election. Ari and I knew Gingrich was going to smite the MITTEN Man. Romney had been pathetic and he had a Cayman problem, too. Rick Santorum seemed tired and Ron Paul was, well, Frank Perdue.

Gingrich won by 12 points. We had a creamy Key Lime pie with grahame cracker crust. Newt’s two daughters stood by their Dad. I believed that the Republicans had their MAN.

Sunday we watched football at the airport and sat next to a Tea Party regular who had come to Charleston from Austin, Texas, to follow the election. Nice man. I think he was ex-CIA. Also sat next to a beautiful young African American woman who did makeup for Fox TV. She had also been working the Primary.

America. Ain’t it wonderful? Another fork for the key lime pie, please.

Question: Would Newt’s record with women stop you from voting for him?

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No No No No!

Should I plan as if I am going to live forever, or like I’m living on borrowed time? None of us really knows how long we will be allotted on this planet, but economic reality tugs at us to plan for something.

In business if you feel threatened every day by incoming storms, you look at everything short term. Liquidity is of the utmost value and you accept just about any offer thrown at you.

If you feel bulletproof, you make grandiose long term projections and arrogantly reject most propositions as unworthy of your big plan.

Glass Half Empty

Most of us play somewhere between these poles. An owner or manager needs to understand his risk tolerance but find associates who can argue him off his tendencies.

When I was growing up in the machinery business, I saw my father swing from highly optimistic to dreadfully fearful over the course of a week. His partner Aaron Pinkert’s role was to balance my dad’s moods and behavior. Both men understood the drill. My dad’s energy was offset by Aaron’s sobriety and his fear mollified by Aaron’s cheerful views. My father always had the deciding vote, but Aaron could talk him down from the ledge or remind him he needed a parachute.

But what if pessimism and negativity become your default position? What if darkness is all you see in the tunnel, and you know deep in your bones you are correct in your downbeat view of the future? Just look to the financial markets and read the bearish blogs, and you find a lot of smart people holding the “world is going to end soon” position. Gather your gold and your guns and find a defendable cave because the Visigoths are down the road.

That may be right. But before the conflagration, there may be a lot of money to be made and fun to be had. And that interim period could be a long time–maybe decades. If you go to the dark side you may survive the invasion, but look what you’ve given up.

One of the riddles of life: Do you feel safer if you know your glass is half empty?

Question:  If Romney wins the republican nomination, November’s election will be Harvard Law vs. Harvard Law. Does that bother you?

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Manufacturing Tour In Thailand

Emily Halgrimson, Today’s Machining World’s Managing Editor, is currently on a press tour of Thailand’s manufacturing industry. The following are her first impressions.

Monday: The tour has been awesome so far!! Food is incredible and others in group are great. We are in 5 star hotels and being treated like royalty. Toured Western Digital yesterday and an investment fair. Today off to Pattaya to a spa hotel and day of tours and meetings. Haven’t spotted any screw machines so far but will keep looking.

Tuesday: Thailand Board of Investment CEO Forum today. Guest speaker: Tony Blair. Thailand is putting on a huge push for foreign investment, including an eight year tax holiday, free leases on land for a time, no taxes on imports of equipment, and free work visas for foreign tech workers and business leaders.

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Tony Blair speaking at the CEO Forum held by the Board of Investment in Bangkok, Thailand

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A Machinist’s Education

Hands-On Training at Symbol Job Training, Inc.

Recently I had a long conversation with Tom Peters of Symbol Job Training Inc., a CNC operator training school in Skokie, IL (a Chicago suburb). For $5,340 his firm will teach you to be a beginner CNC lathe and mill operator in just four months. The company was started by Alex Kogan, who previously had a CNC job shop. Kogan, and his daughter (Tom Peters’ wife) run the school.

I like the idea that the school is a for-profit enterprise, though I’m still happy there are also community colleges and public initiatives out there to train new machinists. The more help the better to develop the machining staff that is the lifeblood of our industry.

I was amused and annoyed by a recent New York Times piece carping about North Carolina spending $1 million to develop a training school for future Caterpillar employees. The Times decried the training as a government gift to Cat. The cruel fact is that training is a prerequisite for any decent paying manufacturing job. A factory needs power, roads, and people with skills.

Alex Kogan’s school in Skokie is hoping companies will pony-up the tuition money for students or that it can hook into State and Federal money that’s out there. Veterans are also eligible for training funds.

The tide is finally starting to turn for manufacturing in the U.S. We need Caterpillar’s training program and NIMS, and schools like Symbol Job Training and Vo-Tech to keep the sector’s momentum. We also need industry leaders to tout the strong future of manufacturing in the U.S., like Kennametal’s Carlos Cardoza did in his speech at the National Press Club this week.

I think we are at a pivotal point right now. Generally the public perception is still locked up in the view that American manufacturing is as dead as Detroit. But Detroit isn’t dead, it just moved to Ann Arbor—literally and figuratively. Let 1,000 flowers bloom to pollinate the future.

Question:
Should public spending subsidize training for big companies?

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My Predictions for 2012

Need a little horsepower?

It is so hard to make solid predictions about the economy for 2012 because unpredictable events like the earthquake-tsunami in Japan and the floods in Thailand in 2011 will always happen. But so what. We have to make some assumptions and guesses if we are going to run our businesses. These are mine for 2012.

1. Growth in the industrial economy will accelerate. Automotive in North America is hot and getting hotter. I particularly like the growing market share of vehicles being made here−reaching 70 percent−and the rising production of pickup trucks. The Ford F-150 sold almost 600,000 units in 2011.

Some interesting tidbits coming out of the Detroit Auto Show which started yesterday illustrate trends. Sergio Marchionne, head of Chrysler, complained yesterday that he can’t add a third shift at Detroit’s Jefferson Street assembly plant because he is 220,000 engines short of what he needs for the Jeep Grand Cherokee. He blames it on “suppliers who can’t play.” Honda also announced yesterday that it will build its first American made Acura in Ohio. This will be the first Japanese luxury model made in the United States. The supply chain is stressed today at 13 million units. If we hit 15 or 16 it will demand a lot more production from the domestic supply chain.

2. Housing in America will finally hit bottom. Rental housing is already booming and the pickup truck sales reflect that because small truck sales are fueled by purchases of contractors and tradesmen. If business has seen solid growth since 2010 without the housing piece, look for a rapid uptick if builders really start building.

3. It’s an election year so President Obama will move toward the center regarding business (except for millionaires and billionaires).

4. Ben Bernanke will keep interest rates low and the dollar relatively weak, thus keeping companies in the U.S. and attracting foreign businesses to a low cost country.

5. The oil and natural gas drilling boom will get stronger in America. This will stimulate employment and enhance the U.S. position as a net energy exporter.

6. The ample labor force will be augmented by returning military people. Even though the press is focused on a labor glut, there are at least three million unfilled jobs waiting for able, eager people to fill them. Veterans could help fill the need. Also the recession in Europe could pull ambitious young people to America, illegally and “sort of legally” helping to propel this country. I think a lot of tourist visas are going to be issued to Greeks, Irish and Spaniards who will stay here as long as they can.

With these plusses we still have some negatives to worry about.

1. The Iran dilemma will continue. Iran’s development of nuclear weapons is a problem that will not go away. The more America and Europe push on them the more they push back. We are probably near a low-grade war with them already. If we strangle them economically with sanctions, they may start firing at our big boats in the Straits of Hormuz or lob missiles at the nearby Saudi oil fields. Obama is trying to push the mess into 2013, but things could get nasty soon. A preemptive strike by Israel is still on the table. We could be looking at a doubling of oil prices if shooting starts.

2. The Germans might not hold up the European spendthrifts making the Euro start to collapse. This could mess up the world banking system and dry up credit everywhere including here. We saw how we were all tied together by the natural disasters in Asia in 2011 and the banking debacle in Europe could be much worse.

3. Risks we haven’t thought of. China sees a “Chinese Spring” and overreacts. Terrorists start shooting up American colleges and shopping centers. Robots rebel, a bad virus pops up, or a million other scenarios. These things could happen, but meanwhile we must live and plan for the now.

My overall prediction for 2012 is 4.5 percent growth, an amazing Olympic Games, and no “peace in our time.”

Question: What’s your favorite pickup truck, and why?

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Making a Beautiful Life

Chris Chapman is the new Chief Designer at Hyundai

The wonderful definitive biography of Steve Jobs by Walter Isaacson spends many pages on the close collaboration between Jobs and his Chief Designer, Jony Ive. Ive was the brains behind the design of the iPod, iPhone and iPad. He and Jobs worked closely since 1997, refining a minimalist approach with an emphasis on rounded rectangles that makes Apple’s products so beautiful and unique.

Great design works so effortlessly that we often ignore it as we enjoy it, while crappy design gets in the way of usage and pleasure.

When I read a blog by Joseph Szczesny of The Detroit Bureau a couple of days ago about Chris Chapman, BMW’s chief designer in the U.S., moving to Hyundai, it struck me as major news. Car design is huge in developing a brand. With the Sonata and Elantra Hyundai has moved into the top rank of auto makers. Snatching BMW’s #1 sounds like a real coup.

One of the primary ideas I’ve gotten from the Steve Jobs story is the importance of putting artistry into your life. Not just your products, not just your work, but your life. I think we all have some talent, a spark, something special and magical that we can access if we focus on it. Maybe it’s our voice that fits perfectly in a choir, or our gardening touch, or the ability to integrate machining capabilities to perform a job perfectly and repeat it.

Pursuing the special talent that makes magic is my goal for 2012. I’m looking for it in writing this blog.

I wish you joy in making your own magic today.

Question: Do you think Mitt Romney can ignite enough voters to beat Barack Obama?

Video of Jony Ive, Apple’s Chief Designer, explaining how the MacBook body is made from a single piece of machined aluminum.

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