Monthly Archives: May 2016

Business at Midyear?

By Lloyd Graff

Observations of the machining business at mid-year.

There seems to be a real case of the blahs in the market. Auctions from the wreckage of the domestic frackers are swamping the Southwest. Waves of 10-year-old CNC lathes and mills are hitting the market and depressing prices. Haas VF-2 and VF-3 machines, market staples, have softened 20% in the last year. Even the CNC Swiss market which has been strong for so long is softer, partly because the Japanese Yen’s weakness versus the dollar has enabled new machine sellers to discount. The total market has also eroded with ferocious worldwide competition in the orthopedic arena. I attended an auction in San Diego recently where Tsugami 20mm Swiss CNC machines, early 2000 vintage, sold for under $20,000 each, while 2008 and 2009 machines were in the low to mid $30,000 range. The Swiss machines ran only medical and were in decent shape but had a lot of hours on them.

I would say this shows a clear weakness in the used Swiss CNC market.

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A Tsugami CNC Swiss at an auction in San Diego.

It is such a cliché to write that the world is getting smaller, but certainly the machining world is compacting. A lot of companies are going out of business. Baby boomers are finishing their runs, some are selling out, others closing up shop, and many are being forced to shut the doors. There are not a lot of start-ups to replace the casualties.

But I see another interesting phenomenon as the Boomers fade. There is very keen interest by successful foreign firms, primarily European, to invest in American metalworking businesses.

For many successful European entrepreneurs, the U.S. looks like low hanging fruit compared to other growth markets like China, India and Southeast Asia. Certainly, China has potential, but the bureaucratic hurdles are formidable and India is still a mess for a foreigner. In the European’s sight the U.S. is so much easier to navigate and generally hospitable to foreign investment.

We find that European entrepreneurs usually know English or have trusted associates who are fluent. The language barrier for China is much higher. It is much easier to recruit people from the home plant to work in America than putting down roots in Shanghai.

If they are in automotive related industries, it is likely that their European customers are already entrenched in America. The standards for machine operation in Western Europe are very high. If they can install European quality standards in an American machine operation they believe they can be successful.

The obstacles for American companies starting up in Europe are seemingly much more formidable than vice versa. Finding property, establishing a workforce, understanding the bureaucracy are quite difficult for an American entrepreneur determined to settle in Paris or Rome.

The intrepid Europeans are hunting for investments all over the U.S. From my vantage point, a lot of them like the Midwest because of good infrastructure and access to skills. Both coasts look very expensive, and the South still seems to be light on skills for European machining entrepreneurs. Perhaps Charlotte, Houston and Dallas are exceptions.

The 20% reduction in the value of the Euro appears to have stabilized, so the currency situation appears to have little impact on decisions. The world market in automotive, consumer and medical components is amazingly homogenized. Everybody is competing one way or another in a world marketplace.

There will be a lot of opportunity and plenty of heartbreak. Americans will all have to get sharper to stay on top.

Questions: Should there be an Iraq War Memorial? Should the war have been fought by Americans?

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Make Machining Seem Great Again

By E.C. Halgrimson

“Make America Great Again.” The vision that phrase invokes has half of America backing Donald Trump for President, who last year wasn’t a serious candidate, even in his own mind. News of Trump’s numerous character flaws pours out in the press, but many Americans couldn’t care less and will vote for him anyway — if not out of anger for the system, then in agreement with his shrewdly chosen catch phrase. That’s the power of a well thought out vision or campaign.

In 1996, during my Sophomore year of high school in Hinckley, Illinois, our class of 60 kids, made by combining two small towns’ 15-year-olds, was bused five miles to the area career center for an afternoon tour. “Just something to think about,” the teacher chaperoning us said. We were all glad to get out of class for the afternoon.

There were seven departments to visit; child care, graphic design, auto shop, auto-body painting, welding, some sort of medical program, and cosmetology. Interested students would apply that year, at age 15, and would be bused to the career center for training after lunch each day for both their junior and senior years.

I don’t remember much from the day trip, but the image of the dark dirty welding shop is still in my brain 20 years later. Gruff dirty young men ignored us as we watched them play with the blue fire for a few minutes. It did nothing but reinforce my stereotypes about trades, and strengthen my resolve to go to college and get far away from my insular farming community.

Most of the young teenagers who planned on going to the career center had no experience with the seven career paths available. They couldn’t imagine what that choice would mean for their future in terms of salary, workplace culture, vacation time, medical insurance, day-to-day duties, future opportunities, etc. There was no vision, no path laid out.

In high school, most young people are dreaming their biggest dreams for their future. At that age your teachers have been telling you that “you can be whatever you want” for years, and you still believe them. The tough reality of day-to-day demands and a 40-hour+ work week is not even on the radar.

At 15, the idea that learning machining could lead to careers in the aerospace, medical or automotive fields that require problem solving and creativity, such as those of a manufacturing engineer, setup person, or even a business owner, probably occurs to few people. As kids grow in tech savvy and exposure, we can give them a vision of what a career in machining can look like over a lifetime. We can make machining seem great again.

A commercial comes to my mind. A machining company’s owner in a suit with a staff of 150 employees addresses his team as he prepares to fly to a large board meeting where they will discuss details with NASA reps over parts. “Ever wanted to own your own business? flashes on the TV, “It starts here.” Then the picture shifts to the same young man in a work shirt and protective glasses bent over a CNC control learning the minutiae of his future business.

That’s an image I could see making America great again. Or, at least it could help people find their way to an undervalued profession that’s oozing with potential.

Question 1: How did you find your way to manufacturing?

Question 2: Would you want your child to pursue a career in the machining world?

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Seized Up

By Lloyd Graff

A Cat’s Scan

A funny thing happened on the way to my colonoscopy.

I followed the directions the hospital sent me perfectly. Tuesday, the day before the test, I drank a lot of water and then imbibed 64 fluid ounces of Gatorade mixed with a large bottle of colon cleaner called Miralax, something I had used before. Then I continued to drink more water before going to sleep, just to be sure my system was clean as a whistle.

I nodded off quite easily at 10:30pm but the rest of the night is a blur. My wife, Risa, says that I woke her up foaming at the mouth in the midst of a grand mal seizure. I was uncommunicative but breathing steadily. She quickly recognized that I was having a seizure and called 911. The ambulance arrived in 10 minutes. I awoke, but I was not lucid. The emergency medical people were strongly urging me to get into the ambulance, but I could not understand why I needed to go. Risa tried to explain to me that I had a seizure a few minutes earlier, but I was skeptical.

Then the EMTs started asking me simple questions and I was struggling to remember dumb things like who the President was. This is when I got worried that I might have had a stroke, but they told Risa that my state was common coming out of a seizure. I also was left with a pronounced lisp that lasted for several days because I had chomped down furiously on my tongue.

At that point I acquiesced to their urging that I needed to go to the closest hospital, which was five minutes away. I don’t remember much after that except that my sons Ari and Noah arrived at the hospital the next morning. A kidney specialist in a tailored blue suit and perfect Windsor knot in his tie came into the room and explained very succinctly that the seizure had most likely been caused by drinking too much fluid too quickly, causing me to urinate an enormous quantity of sodium out of my body. The sodium loss was exacerbated by a diuretic that my doctor had prescribed because of some swelling in my feet, a leftover symptom of heart surgery eight years ago.

I ended up spending three days in the hospital taking a CAT scan and a brain MRI and what felt like 100 blood tests. My mental acuity came back within a few hours, but I was stuck in the ultra-cautious medical system for patients who were covered by Medicare and had private coverage to back it up.

The seizure, which should not have happened, has left me with a few hangovers. My back, which had been bothering me anyway, really started to bug me. The extreme tightening of my back muscles, and then laying in an uncomfortable hospital bed for several days left my rhomboid and intercostal muscles highly sensitized and unhappy.

Emotionally, I felt a real downer a week after the seizure. I was extremely angry at my doctors for causing an unnecessary health crisis. A sore back was my unexpected gift of a colonoscopy prep gone bad.

When I was in the hospital my general doctor wanted to reschedule the colonoscopy and make more appointments. I said no. I felt totally over-doctored and I was pissed off.

The doctor who was supposed to do the colonoscopy told me that there was an alternative non-invasive lab test that was 92% as effective as the scope. Now he tells me.

After 13 surgeries and procedures since 2003 I am weary. I am grateful for modern medicine and caring doctors. I am so damn tired of hospitals.

Question: Are we over-doctored in the United States?

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A Review: Born on a Blue Day

By Jerry Levine

Lloyd and Noah Graff are away this week. We are featuring Jerry Levine’s excellent review of Born on a Blue Day, which is highly relevant today.

America and much of the rest of the western world is suffering through an epidemic of autism. The disease is called a spectrum disorder because it does not manifest itself with a single set of symptoms, but covers a range of behaviors. At the worst, its victims are non-communicative and may do violence to themselves and others. At the best are those diagnosed as Asperger’s Syndrome, where they have above average intelligence, but very limited social skills. The common thread throughout is an inability to relate or even to understand others or to express feelings. Severely autistic people have very limited ability to function independently in the world. Even uniquely skilled “savants” with special gifts are also severely challenged socially.

I have an autistic grandson, Sam, who is turning nine. He’s still a child, but I worry about his future. Even more than my worries, my daughter and her husband live it day to day and struggle with what the future will hold. For example, my grandson was recently invited to his first, and—to date—only, birthday party this year, even though he had all 17 of his classmates to his party earlier this year. Sam is oblivious to the snub, but it pains my daughter greatly.

Born an a Blue Day by Daniel Tammet is a beautiful story of a very high functioning (actually, savant) autistic person. He has unique mental abilities, including an ability remember his early childhood and relate his fears and difficulties growing up.

Growing up was tough. He had warm caring parents, and many siblings, but had no relationship with them. He was the first one taunted and the last one picked in the schoolyard. He was almost never asked over to someone’s house to play. He recognized early on that he was different as a child and wanted nothing more than to be accepted and have friends, but was totally unable to do so. Numbers were his friends, and they came in various shapes, sizes and colors.

One wishes there is a light at the end of the tunnel. For Tammet there was, but his case is very unusual. As he points out near the end of the book,“ It was the strangest thing: the very same abilities that set me apart from my peers as a child and adolescent, and isolated me from them, actually helped me connect with other people in adulthood.”

Born on a Blue Day opens, “I was born on January 31, 1979—a Wednesday.” I recently asked Sam what day January 31, 1979 was, and he quickly responded “Wednesday,” the correct answer. This calendarization is one trait that Sam shares with Tammet. Tammet relates dates to colors. Sam has no explanation for his ability, but then he is not very communicative anyway.

Tammet, who is British, writes of his coming of age and his difficult transition into independent living, which is the heart-warming aspect of this book. After high school he somehow manages to do volunteer teaching of English in Lithuania, and lives for a year on his own. In spite of being a loner, he makes a few friends and learns to speak fluent Lithuanian.

After returning to the UK Tammet realizes his gift for languages and numbers. He gains notoriety by memorizing the first 22,500 digits of pi and makes a public recitation for a charitable fund raiser.

This leads to a TV offer from a major UK channel to do a one hour documentary around his life. He also meets with Kim Peek, the real-life inspiration behind the movie Rain Man, and makes an appearance on David Letterman.

The TV producers have one more challenge for Tammet: learn a new language from scratch in one week in front of their cameras. The language is Icelandic—an extraordinarily complex and difficult language. Amazingly, even though Tammet only has four days because of the TV schedule, he is fluent and comfortable enough to appear in several TV interviews on Icelandic TV and holds his own. He is overwhelmed at how far he has come.

Tammet also falls in love, experiences a conversion to Christianity, and finally appreciates the love he has for his family and their love for him. The book closes with the beautiful passage from I Corinthians: “Love is patient, love is kind…love believes all things, hopes all things, and endures all things. So faith, hope and love abide…but the greatest of these is love.”

His transformation is complete—from autistic child unable to relate to anyone, or even look another in the eye, to a feeling human being, loving and being loved. This is the beauty of this book, and gives this grandfather hope for the future.   

Question: Do you think autism is more common today, or just diagnosed more frequently?

Jerry Levine is a writer for Today’s Machining World, and a retired engineer who worked in BP’s chemical division.

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Coming Apart: The State of White America

By Jerry Levine

I am on vacation for a week. I thought rerunning this column by Jerry Levine from four years ago would give us an insight into the rise of Donald Trump and the impending dissolution of the Republican Party. I invite your comments.

-Lloyd Graff

David Brooks of The New York Times writes, “I’ll be shocked if there is another book this year as important as Charles Murray’s Coming Apart: The State of White America, 1960-2010.” Murray writes, “For most of our nation’s history, whatever inequality in wealth between our richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites anyway.” But now, cultural inequality is becoming an insurmountable chasm.

Murray studies only Whites to avoid adding racial inequalities to the mix. He is just reporting what happened, not speculating why. He believes that starting with Lyndon Johnson’s “War on Poverty” and other social changes that began in the mid to late 1960s (which brought about positive changes: civil rights, women’s movement; and negative changes: drug culture, increased crime, watered down school requirements) our society began to polarize culturally.

In 1960 the phrase “American Way of Life” referred to a culture of shared assumptions about central American values involving marriage, plain spoken honesty, hard work and religion. Fifty years later that common culture has unraveled. We have a new upper class with advanced educations, often from elite schools, sharing tastes and preferences that set them apart from mainstream America. And we have a new lower class characterized not necessarily by poverty, but by withdrawal from America’s core cultural institutions.

Most striking are marriage statistics. In 1960, 94 percent of Upper Middle Class (UMC) adults were married. This declined somewhat to 83 percent in 2010. By contrast, for Working Class (WC) adults the decline is more dramatic, from 84 percent married in 1960 down to 48 percent in 2010. And amazingly, one-third of Working Class males  never have married.

Murray identifies two culturally and geographically isolated demographics. In Belmont, the fictional name Murray gives to the town where the top 20 percent live, divorce is low, the work ethic is strong, religious observance is high and out of wedlock births are rare.

While in Fishtown, where the bottom 30 percent live, these values have all collapsed, marriage rates are low and out of wedlock children living with single moms predominate.

Murray believes 1960s social policy fundamentally changed the signals and incentives facing low-income people and encouraged trends that soon became self-reinforcing. Some of Murray’s thinking helped lay the groundwork for President Clinton’s 1996 Welfare Reform Act which stiffened welfare requirements, and then to the surprise of many on the political left increased employment rates.

Also, I believe the women’s movement, which Murray deems a great societal positive that unleashed the talent and creativity of half the population, had the unintended consequence of downgrading working class males. In 1960 WC males, while not earning as much as UMC males, were still the family “breadwinners.” They were relied upon as the sole financial support of the family and took their financial and parenting responsibilities seriously. Fifty years later men may not even be the primary wage earner in two income families, and with the proliferation of single parent families (almost always with the mother), the men are becoming superfluous. This mortal wound to the male psyche may be irreversible and may explain why WC men are becoming less educated less employable. Deloitte and the Manufacturing Institute recently reported that nationwide 600,000 manufacturing jobs are going unfilled because applicants are unqualified.

It’s well known that children of single parent families often do not fare as well in early and later life as those from two parent families. Single moms know that too, but as Murray quotes from his many interviews with Working Class single moms, “I don’t want to marry a loser. Why take on another child?”

Many social scientists say the cause of the collapse of WC men is the economic turn-down and the effects of globalization. But the economy turned downward almost two decades after the cultural changes began, and the downturn only added to the existing trend.

At the end of the book Murray seems very pessimistic and presents no acceptable, practical solutions. Brooks recommends a universal National Service Program which would force members of the upper and lower tribes to live together, if only a year or so. The cross fertilization of values and practices and institutions that lead to achievement would be invaluable. The Belmont residents “need to preach what they practice.”

Question: Is the United States a nation of “haves and have nots,” or a nation of “haves and soon to haves”?

Charles Murray explains his correlation between a decline in marriage and social decay in White America.

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Incredible or Just Ignorant?

By Noah Graff

Are you skeptical of people who claim to be INCREDIBLE at something?

According to extensive scientific studies, the people who claim to be incredibly talented and intelligent are either genuinely incredible or they are incredibly bad and ignorant about how bad they are.

National Public Radio’s “This American Life” recently did a piece about the research of scientists David Dunning and Justin Kruger. The scientists conducted tests on undergrads at Cornell University in which they gave the students three quizzes. One was on grammar, another on logical reasoning and another on humor—such as asking them which of several jokes was the funniest.

Too dumb to know how dumb you are.

At the end of the quizzes they queried each student how they thought they had performed, asking them to predict which percentile they thought they landed in out of all the test takers.

The results showed that the majority of students who performed the worst, with scores as low as the 11th, 12th, and 13th percentile, thought they had performed in the 60th or 70th percentile. In other words, people who had scored the equivalent of D’s and F’s believed they had scored B’s or B-pluses. The people who had been ignorant about the test’s subject matter were also ignorant about their incompetence; in fact, their ignorance made them overconfident. Meanwhile, most of the students who performed well had more modest expectations than the poor performers. They had not thought they had done poorly, but they figured that the other students knew as much as them.

Dunning and Kruger have performed tests like these repeatedly over the years which yielded similar results. They have tested a variety of groups such as chess players, competitive debaters, even medical professionals, and the results overwhelmingly show that the people who performed poorly were under the impression that they had done well. People today call this phenomenon the Dunning-Kruger Effect.

Assuming the Dunning-Kruger Effect is real, the phenomenon has a significant impact in our polite society because many people feel it is taboo for people to call out the incompetence of their peers or coworkers. People are afraid they will look like jerks if they call out someone on the team who they feel is a weak link. They also fear that the behavior will set themselves up as targets for others to criticize. So the ignorance of under-performers is allowed to thrive, and we have to put up with poor performers.

The scary thing is that there can only be a small number of truly elite talented people; thus, the majority of people who say they are great are not only not great, they often downright stink.

If Dunning-Kruger is true, then when we are choosing which applicant to hire, who should give us investment advice, or who should perform heart surgery on us, perhaps it is more sensible to go with someone who claims to be “pretty good” rather than someone who claims to be “the best.”

This is why it is essential to judge people on real data of their past performance, not just on how well they sell themselves.

To me the idea of the Dunning-Kruger Effect is a rather cynical view of the human capacity for self-awareness. I do not see myself as someone who claims to be “incredible” at many things. I am confident in many of my talents, but usually others who I trust have encouraged that confidence with compliments. Usually I just claim to be “pretty good” rather than elite—unless I’m talking about my aesthetic beauty and charm—for those I know I’m fabulous.

I often think that people who are performing a task poorly while claiming to be doing a good job actually know deep down they are performing poorly. But maybe I have been totally wrong all this time. Perhaps I think I understand people and I really don’t understand them and I am too ignorant to know that.

Question 1: If a coworker is constantly performing poorly do you prefer to say nothing to him or her?

Question 2: Does our society not have enough honesty?

Listen to the podcast here: http://www.thisamericanlife.org/radio-archives/episode/585/in-defense-of-ignorance?act=2#play

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President?

By Lloyd Graff

I have restrained myself mightily so far this political year, but the campaigns have become so juicy, so nutty, so deliciously crazy that I can no longer resist a political commentary.

It is now likely that Hillary Clinton and Donald Trump will be our two choices in November. I say likely, not certain, because Trump could still do something so totally goofy that people will question his sanity, and Hillary could be indicted for putting 22 top secret emails on her private server and sharing the information with members of her personal staff over cocktails.

I know Hillary Clinton’s supporters think that President Obama will never let his Attorney General, Loretta Lynch, indict his former Secretary of State and allow Bernie Sanders to become the Democratic candidate for President, but I recently heard this sexy conspiracy theory that sounds like it is from the mind of Kevin Spacey.

Obama thinks Hillary is vulnerable because of the $22 million in personal speaking fees she has raked in since 2014, her inept inauthentic campaign, and of course her lurking indictable offense. At the pregnant moment, the theory goes, maybe late June before the Convention, Obama tells Loretta Lynch to bring the indictment. By that point Bernie’s campaign will have floundered with his money just about gone. Obama comes to the rescue and asks lovable Joe Biden, who chose not to run because of his grief over his son’s death, to step in for the good of the country to defeat the dreaded Donald Trump. What a gorgeous theatrical scenario. Biden runs a short, enthusiastic campaign and sweeps to the Presidency.

A little crazy but the ingredients are there to make it happen.

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Ok, it sounds bizarre today, but this is the campaign from the schizo ward. Consider these recent developments. The Koch brothers who have given hundreds of millions of dollars to right wing candidates told a press interviewer that they would consider coming out for Hillary Clinton. I read this and immediately thought the world was flat.

But then things got even screwier over the weekend. At the yearly Correspondents’ Black Tie Dinner, Barack Obama did a Saturday Night Live style comedy skit with former Speaker of the House, John Boehner about what it is like to be out of office and irrelevant. The videotaped skit ended with the two men alone in a theater discussing the plusses and minuses McDonald’s all day breakfast, then Boehner digs into his pocket and offers Obama a cigarette (which he never smokes in public view). Two guys who always seemed to hate each other sharing a smoke in an empty auditorium on the President’s video.

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The Republican campaign is winding down with Ted Cruz pinning his hopes for the nomination on the Donald’s remarks about transgender people using public bathrooms. The Cruz campaign in Indiana lost all traction when Bobby Knight came out for Trump, and Cruz called a basketball hoop a “basketball ring.” This was worse than Trump talking about “two” Corinthians. Basketball is religion in Indiana and the preacher’s son got it wrong.

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The irony of the campaign so far is that Bernie Sanders could have had the Democratic nomination. Coming out of nowhere, he had the energy behind him and Hillary Clinton, a terrible candidate, fumbling through the motions. Bernie did talk about the $225,000 Clinton speaking fee from Goldman Sachs, but between Bill and Hillary they raked in $153 million in documented fees including $675,000 from beloved Goldman Sachs between June and October in 2013.

For some reason Sanders has said nothing about the potential indictment of Hillary, possibly because he wants to be Vice President, or he is just waiting for the Obama-Lynch move against Madame Secretary and he wants the nod instead of Biden.

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In ending this commentary, I return to Obama’s comments in his John Stewart routine. He said Donald Trump’s knowledge of foreign policy was rather impressive – “Miss Sweden, Miss Argentina, and Miss Azerbaijan.” The Donald tweeted back – “it was just lies.”

I wonder what lies just ahead.

Question 1: Why has Trump gained such traction?

Question 2: Who will be the next President?

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