Monthly Archives: August 2012

Still Feeling the Pain

 

Today is the 4th anniversary of my heart attack. I wish I could forget it. I wish I could just cleanse my memory of that unbelievably scary day. But Labor Day weekend 2008 will never go away for me – as the time I almost died.

The Republican Convention of 2008 was about to take place, with John McCain making his fateful call to Sarah Palin, which probably cost him the 2008 election. The Cubs were playing the Houston Astros, which I remember because the doctors had it on when I reached the operating room for bypass surgery. It’s odd that I remember that because I was taking amnesiac drugs to blot out the memories of being totally tube tied.

I’ve since had four years of good health and I am grateful for every one of those 1460 days. Some days I am amazed that I had a heart attack, and other days I wonder how I ever lived through it. I still tear up when I connect with the trauma. It’s my way of tapping into the raw emotion of the experience that never goes away. Sometimes I think it intensifies with time, especially during the damn anniversaries.

The moments that always open the tears of emotion are when I hold my wife Risa’s right hand in my left hand in bed. When I was in the netherworld of the recovery room after the heart surgery, Risa and my daughter Sarah held that hand for hours and their touch restored my life force. In my semi-conscious state (I shunned narcotics) I heard the night nurse talking about pneumonia. Nurses think patients are always sleeping and that they can say anything about a patient, but in my case I was often aware of what was going on, even if I could not talk with the intubation tube down my throat. Risa and Sarah’s gentle touch got me through that terrifying night of trauma and fog. But the connection to that night is still a hot circuit.

I am grateful that the circuit is still live, even though touching it makes me hurt. Even writing about it turns on the tears. It reassures me because it tells me so directly that I am a living, breathing beast – wounded – but still feeling.

I wish I could say Labor Day weekend is a summer celebration for me. For the moment it is a weekend of endurance – of getting through. Maybe that will change one day. But for now, I’ll take what I can get. I’m grateful to still feel the pain.

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Test for College and Cat

The feedback on the Caterpillar piece I wrote a couple days ago was highly provocative. It appears that Cat may have overplayed its hand by playing hardball in Joliet, Illinois, at their hydraulics components plant. By locking in new workers at $12 per hour Caterpillar has made the calculation, I believe, that it is willing to let skills erode, and make up for the decline in talent with sophisticated machinery like robots and automated inspection machines. This is not so different from what you see in hospitals where very expensive equipment is simplified so technicians making $15 per hour can operate it. McDonalds uses this model with great success.

The industry that is really on the verge of a mass assault today is the university complex. Colleges have seen their costs expand in a fashion similar to the auto industry of the 1980s and ’90s. Eventually the wage structure brought chaos to those industries. With college tuitions reaching absurdity today, the Internet warriors are about to crash the colleges’ headlock on degree giving, which will dramatically erode their power to charge crazy tuitions.

Internet education companies are just beginning to ally themselves with degree granting colleges, which is moving us into the $99 per credit hour world. If it takes 120 credit hours to graduate we are talking about a $12,000 Bachelors Degree. This will crash the $150,000 degree, which is becoming the norm.

There will be hybrid programs combining Internet and classroom, but if the credential granting power of colleges is cracked, the game will be in the late innings for old-school schools.

Colleges and Caterpillar are different kinds of entities, but the union cartel and the education cartel are both aimed at artificially propping up prices. Caterpillar Corporation is testing the market to see if it can find enough talent to produce an excavator with $12 per hour labor. Knowing Cat, they will add incentives if they need them to lure and hold workers.

And when the colleges can no longer find kids and parents who will pay stupid tuitions because $99 credit hours make sense, the colleges will adapt too.

Question: Do you think Internet education will become more popular than traditional college education?

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Caterpillar Workers Give In

I wrote about the strike at the Caterpillar plant in Joliet, Illinois, three months ago. Cat was absorbing a strike of union workers who were being asked to accept a six-year wage freeze and a cut in health care benefits to keep their jobs at the hydraulic components plant one hour southwest of Chicago.

This past week the workers took a slightly modified deal, against the wishes of the officers of the Association of Machinists and Aerospace Workers. Cat raised a proposed $1000 ratification “bonus” to $3100 to tip the vote to their side and is converting a $7.8 million dollar fund that had been used to supplement the wages of laid off workers into a pot sweetener for older workers who are being paid well to retire.

Cat earned $5 billion last quarter, but still threatened the Joliet plant’s striking workers with moving jobs either to other North American plants or abroad. The recent closure of a London, Ontario, factory after the workers rejected a 50% pay cut by Cat, validated the threat of a plant closure if the workers refused the company offer.

The workers’ capitulation at Caterpillar in Joliet, which is only a half hour away from our Oak Forest facility, finally evens the playing field between big companies and their job shop suppliers. It will enable Cat to keep more work in-house because their labor costs will be more competitive with local companies, but it will also even up the hiring landscape for skilled workers, many of whom prefer the atmosphere in smaller well-run suppliers to big company regimentation and union peer pressure.

At the same time the Caterpillar union news came out, the even more astonishing news appeared that “tenure as we know it” for New York City public school teachers had been broken. This had long been a goal of New York Mayor Michael Bloomberg, and he finally gained the upper hand against the entrenched unions in the city that made it so difficult to prune weak teachers when they got their tenure card after three years on the payroll, even if they stunk at their jobs.

In Chicago, Rahm Emanuel, the new mayor, is also pushing back against the Teachers Union with some success. The housing recession in Chicago has kept yuppies with kids locked into their homes, when they normally would have moved to the burbs for better schools. Many of them are getting active in their local schools, giving Emanuel an important ally in pushing for change in the system.

Recently, Motorola Mobility, now a division of Google, announced they were moving a huge number of jobs to downtown Chicago from the Northwest suburbs. This puts more pressure on Emanuel to upgrade the public schools in order to enable companies like Motorola Mobility to hold onto and hire younger workers with children.

It is an interesting development in American politics that ambitious and smart politicians like Bloomberg and Emanuel have chosen local office rather than Washington jobs. They probably have done so because it is actually possible to make meaningful change in a relatively short period of time in a city if you can control the levers of power – not that different from the position of Douglas Oborhelman, CEO of Caterpillar Inc.

Question: Does the Caterpillar labor deal make you happy or mad?

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What have you always wanted to do?

Thermal Pools

Wayne Dyer, the motivational speaker, once told the story of going to a spa to deliver a speech. The day before his appearance he decided to try the baths, which were the spa’s big attraction. There were a dozen small pools with water of varying temperatures. Cold was on one end of the pools, hot on the other, with the pools gradually ascending in temperature. He noticed that all the people in the pools were sitting in the two in the center. Dyer wanted to experience the gamut of water temperatures. He tried the 140 degree one and then plunged into the frigid pool for a sauna-like experience. Then he randomly immersed himself in every pool.

I thought of Dyer last week when my wife and I spent seven days at the Chautauqua Institution near Jamestown, New York, where we heard lectures every day and a variety of music we’d never sampled before.

One talk was about the devious behavior of insects. Another was a conversation between Roger Goodell, Head of the National Football League, Mike Slive, Commissioner of the Southeast Conference, and Luke Russert Tim Russert’s son, about ethics in big time football.

Music ranged from Beethoven’s Eroica symphony to K.D. Lang doing country. But the highlight was listening to some of the best young opera singers in the country performing selections in a venue seating 150 people. The singers were students from Juilliard and Curtis spending the summer at Chautauqua, polishing their skills before beginning their professional careers.

In Chicago, frankly, I would never go to the opera – dealing with traveling into the city, parking, a huge theater with big costumes, and the expense – who needs it? But at Chautauqua one weekly fee covered everything, so going to concerts was easy.

I think that the bigger message from our Chautauqua week is the same as that of Wayne Dyer’s spa experience. Don’t be so timid about testing the water, even if you know it’s going to be hotter or colder than you are used to. I’m often reminded of this in business. It’s easy to keep doing what you’ve always done. “I’m a screw machine guy. I’m a grinder. I do heat treating.”  As if that’s your identity. It is possible to re-label what you do, to yourself. Maybe the big opportunity is two pools up or two pools down the line. Maybe the next big break in your business is in 3D printing of components, or something as mundane as starting an apprentice program.

I had learned about Chautauqua 25 years ago and always wanted to go – but never got around to it. It has always been easier to bathe in the tepid pools. Glad I finally made the trek.

Question: What is something you’ve always wanted to do?

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Why We Do Jobs We Hate

Recently I finished Andre Agassi’s autobiography, “Open,” the most interesting and entertaining non-fiction book I’ve read since the Steve Jobs biography.

From the first chapter on, Agassi states that he “hates tennis.” As soon as he could hold a racket, his domineering father began grooming Andre with the goal of him becoming the number 1 player in the world. Every day from grade school until he left home for Nick Bollettieri Tennis Academy, Andre was forced to hit for hours with a ball machine his dad had souped up, which he named “The Dragon.” His dad would stand behind him constantly yelling, “Hit Harder!”

Agassi played as a child because his father gave him no choice. His father was determined to spawn a tennis champion, and he had fallen short with all of Agassi’s older siblings.

Agassi lost a match for the first time at age 10 to the future pro, Jeff Tarango, when Tarango blatantly cheated on a line call in the final point of a tiebreaker. Agassi cried afterward. He was devastated. He hated the feeling of losing so much that from that day on, he devoted himself to perfectionism in his tennis despite his stated hatred of the sport.

He still hated the solitude of playing singles. He hated being forced to practice every day when normal kids got to play with friends. He resented tennis because it represented not having a choice for his life’s path.

As he got older, Agassi came to believe that playing tennis was his only option for an occupation. He had manipulated Nick Bollettieri to let him drop out of school in eighth grade, which further limited his career options. As a teenager he had no money, so with his older brother Philly coaching him, he traveled the U.S. playing the on the Satellite Tour in an old beater, trying to win enough to pay for gas and food.

Many times in the book, Agassi justifies playing the sport he hates by comparing himself to the countless other people in the world who strive for excellence in their jobs despite hating what they do. How many people in this world choose a job because they have been ordered to do it since birth? How many people have a certain occupation because they just happen to be great at it and they believe it’s the only job they can succeed in? How many people stay in a job they hate because they equate quitting with losing and failure?

I often watch professional athletes and think to myself, what they do would be my dream job. Wouldn’t it be nice to play a game as your job, get paid millions, and have unconditional love from fans? I have always taken it for granted that people who make a living playing a sport, devoting their lives to a sport, playing with the passion to be the best in the world must love playing it.

But think about all of the Olympic champions the last few weeks from countries like China and Russia, who are forced to devote their lives to winning a contest they never chose to participate in on their own. I’m sure some of the champions do love their sport, but I wonder … how many of them just hate losing?

Question: Do you have to love what you do to be great at it?

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Please, No Screws?

Graff-Pinkert’s new logo designed by the winner of a contest on LogoSnap.com.

Lloyd Graff recently purchased Jim Graff’s interest in Graff Pinkert & Co., and he felt it was time for a redo of the company’s Website and logo. Today’s Machining World also changed its logo five years ago and redesigned its Website last year.  Its important to stay current in business, and periodically refreshing marketing and advertising is a way to do it. I was in charge of coming up with the logo and it was a tough gig because we really had no idea what we wanted. I did a Google search for logo creation and found a site called LogoSnap.com. LogoSnap facilitates contests among designers from around the world to create original logos, business cards and letterhead for companies around the globe. Clients get to name their price on what they award the winner of the contest. The minimum prize is $200 so we offered $250. There is also a small service charge that goes to LogoSnap, so the total bill was about $300.

We were instructed to give a brief description of our company, which I’m sure was quite esoteric to the designers, just like it often feels when I try to explain my job to a typical person at a bar. The site suggested we give feedback on logos and Websites we like and don’t like. Lloyd (my boss) specified that the logo was not to have any images of screws or objects that resembled screws, as he thought that would inspire trite and generic designs. It was the same philosophy we always emphasized for the Today’s Machining World magazine covers—our cardinal rule was no photos of just machines.

Several designers from Pakistan and India participated, and one from Italy took part. The Italian, who gave himself the code name “Logoon,” lived up to his country’s reputation for superior design and blew us away with his style and creativity. He decided to ignore Lloyd’s prohibition of screws and created an abstract “GP” shape, framing a subtle silhouette of a dome head screw. We didn’t even notice the screw shape until my Website designer pointed it out to us.

I suppose it would have been nice if an American designer had won the contest. There are a few American designers who do participate in the LogoSnap contests. But perhaps most American designers don’t think a prize of $250 is enough incentive to enter a contest in which they are likely competing against teams of multiple people in India and Pakistan. Using the LogoSnap contest model was a great way for us to get more and better ideas. And in the end, we didn’t care if the logo came from Milan or Miami, we just wanted brilliant design for a fair price.

Question: What’s your favorite logo? Apple? Nike? Google? Starbucks?

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Your Next Machine

Schütte S32 PC from Graff-Pinkert

The dilemma of the lonely machine tool dealer is the common denominator of most businesses and occupations. The clients want to buy something tailored to their needs. The seller wants to sell them what they have, at a premium price. The tug of war today is over the cost of the tailoring.

In an esoteric field like high production screw machines the value differential between the generic and the special is large because the hardware is expensive. But the expertise needed to choose and operate the unusual hardware is even scarcer, thus also very expensive.

In the last five to ten years, Chinese competition, fueled by extremely low labor costs and government subsidies, has made it very hard for American manufacturers to prosper in high production manufacturing. This has flipped recently because Chinese costs have risen significantly and Americans have raised their game. But Chinese companies often partnering with Americans or Europeans are playing their next move now. They are starting to buy machines once dismissed as archaic relics, such as screw machines and rotary transfer machines, to do the jobs that are inappropriate for CNC lathes and machining centers.

Two years ago, Graff-Pinkert rarely if ever received an RFQ for an old school cam machine. Today it is more common, but the Asian buyers want the machines set up for particular jobs. And they have the capital to pay for expensive “project” machines.

For a dealer it poses both an interesting opportunity and a big headache. How do you find the talent and the machine, which are now in demand worldwide? The supply of both has deteriorated due to the last 15 years of decline in European and North American manufacturing, and the retirement of the Baby Boomers who have been the linchpin of the workforce for 30 years.

I am observing this tension in the marketplace play out everyday. It is causing a lot of confusion because it confounds the prevailing narrative of a lot of managers and owners who had stopped investing in talent and equipment over the last decade.

With both the American and Asian markets interested in high production, and Latin America also waking up because of a commodities resurgence and a rising standard of living, around 50 million people per year are becoming customers for manufactured goods. This is why the leaders of Caterpillar and Cummins along with other superior world machinery producers are bullish despite the decline of Southern Europe. Over the next decade, demand will be present despite occasional blips caused by dysfunctional governments.

Taking this likely scenario down to the micro level of people like you and I, it becomes tricky to play. The tendency we all have is to look back on an awful decade of North American manufacturing decline and project continuing misery ahead. But if Caterpillar and Cummins and Bosch and Boeing are right, we are headed for good times.

For a little company the challenge is interesting and tough. Buying and retaining talent is expensive and a keen managerial test. The worldwide demand for the artists and craftsmen that can turn the generic into the special and precise has rarely been as clearly defined as it is today.

Question: What’s the next machine you’re going to buy?

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