Monthly Archives: July 2016

Do You Like to Drive?

By Lloyd Graff

I am all into the concept of self-driving cars. That does not mean I am ready to be a pioneer and buy one of the early iterations like the Tesla Model S with Autopilot, but I am a totally engaged fan of Elon Musk as he gambles on the sexiest new technology in his cars.

The inevitable happened on May 7. Joshua Brown, one of those risk-taking kind of guys who always wants the newest and hottest technology, put his Model S on Autopilot at 74 miles per hour next to a semi with a white trailer on a cloudless Florida day. The car’s navigation system drove the vehicle under the trailer as it turned into his lane on the highway, killing Mr. Brown. The Mobileye navigation system could not distinguish between the bright sky and the white tractor trailer.

Mobileye has now ended its deal with Tesla, but it is still heavily involved with GM, Nissan, BMW and Hyundai in developing autonomous driving applications.

The corporate dance we are now watching with Tesla, Mobileye, the National Transportation Safety Board, insurance companies and the lawyers who fight for and against them is fascinating. Naturally, Tesla and Mobileye are bobbing and weaving, knowing that lawsuits await.

Tesla Model S that resulted in the death of driver Joshua Brown in May 2016. Courtesy of theverge.com

The Geicos and State Farms have huge money potentially at stake if cars become substantially safer. Car insurance generates $200 billion in premium revenue. If accidents were cut in half by autonomous cars, you can imagine a lot of folks could make the decision to gamble on going naked on fender bender policies. It could ruin the current business model for Jake at State Farm.

Huge money is going into driverless car research. In Palo Alto and Ann Arbor such cars are constantly rolling around local streets. They are so common they don’t even get a second look in Palo Alto. Google and Apple both see the car as a vital piece of their business in the next 10 years.

After the Joshua Brown accident, the doubters have come out to crow about the virtues of humans at the wheel, but 35,000 traffic fatalities a year tells a different story.

I have always been a technology doubter. To this day, I prefer maps to a GPS system. However, I really hope and believe I will eventually buy an autonomous car to replace my 2003 Toyota Avalon. I am holding off buying a new car because the only reason I can see to buy one is to get the driverless features. The primitive parallel parking apps that are being advertised now hold no allure. I actually like to parallel park, though living in the burbs gives me scant opportunity. I do think the lane warning feature has value.

Let the engineers and lawyers do their work. Autonomous cars are coming, and personally, I can’t wait to be driven by one.

Question 1: Do you like to drive?

Question 2: Do you like convertibles?

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Buying a Job Shop

By Lloyd Graff

Dave Dolan runs one of the biggest screw machine operations in North America, KKSP Precision Products of Glendale Heights, IL. The company started in the 1960s with a couple of Davenports and a founder possessing great skill and ambition. I sold him some of his first machines.

He sold out long ago when the name was still K&K Screw, but the company is true to its roots, even with 460 machines in the U.S. and Mexico. It is still pounding out parts on Davenports and Acmes, about $55 million worth a year now, cutting 28 million pounds of brass and steel with 16 sales people sniffing the bushes for work.

Last week KKSP announced another acquisition, Dune Manufacturing of Melrose Park, Illinois, a tiny buy for one of the biggest screw machine houses in the world, 15 Davenports and a handful of skilled people. You would think it barely moves the needle at KKSP so I called Dolan, who comes from a financial background, to find out the rationale for the acquisition.

Dolan said he is continually looking for deals to grow the company. Like a baseball general manager combing the free-agent market for undervalued talent, he is constantly trying to strengthen and expand the company.

KKSP started with three Davenports in 1969.

He calls the Dune Manufacturing buy a “tuck in” purchase. KKSP is buying machines that are easily integrated into its Glendale Heights facility. It gets the opportunity to hire some talented machinists who know how to run the screw machine work that Dune is transferring. KKSP also retains the former owner of Dune, Denis Colht, to tend his customers and use his special knowledge of the marketplace to search for more.

Colht is a machining veteran who gets to cash out his equity in the business for more than asset value.

Dolan sees it as a “win win” though KKSP is known in the business as a tough bargainer.

I have learned in business that how you frame your proposal is crucial in making a deal.

Dune was selling a book of ongoing profitable business, the opportunity to hire knowledgeable set up and operating talent and a capable owner who will transfer his knowledge to KKSP, all located within 10 miles of Glendale Heights. Dolan gets the business but very little of the overhead.

Dolan has a long list of possible buyout candidates. He is looking for a company doing $10 to $25 million in sales that will give him more geographical reach and expand his customer base. From his experience the $5 million sales company often has an owner wearing many hats with no depth in its staffing. In a bigger company you buy the ISO and TS qualifications, good IT infrastructure and experienced people in the critical staff positions. The bigger company benefits from KKSP’s sales capability, but they can also grow independently.

Dolan says KKSP hopes to make one such acquisition each year, though often nothing fully comes together. So they keep looking, analyzing each possibility and waiting for the gem that is a good fit and fairly priced to come along.

Meanwhile, KKSP keeps cajoling pieces out of 2000 spindles of vintage Davenports and National Acmes.

Question: Would you start a machining business today?

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One Chance

By Lloyd Graff

The issue that seems to be giving America heartburn in 2016 and driving the election rhetoric is the gulf between the well-off and the falling-off. Underlying that is the feeling that it is getting harder and harder to move from “barely getting by” to “feeling successful.”

I listened to a remarkable podcast this week by Malcolm Gladwell called “Carlos Doesn’t Remember.” It was so good I listened to it twice. Gladwell recounts the struggle of “Carlos” (not his real name), an exceptionally gifted student from a broken home who is trying to reach his potential. He was spotted in 4th grade in a rough Hispanic neighborhood in Los Angeles by Eric Eisner, a wealthy Entertainment Industry lawyer turned philanthropist, who helps disadvantaged but brilliant kids reach their best life outcome. Eisner says that he has to find kids by the 4th grade; otherwise they will be sucked into gang culture or fall so far behind their affluent counterparts that they will be too discouraged to do the work to catch up.

The Carlos story is complicated by numerous crises in Carlos’ personal life: a missing father, an emotionally fragile mother who abandons Carlos and his sister and ends up in prison in Texas, and a foster child system that separates Carlos and his younger sister. Despite all of this turmoil, Carlos, who is now a teenager, continues to excel academically, even at the elite private high school 45 minutes away that Eisner has helped him get into.

The thrust of Gladwell’s podcast is that middle class and wealthier children get several chances to screw up in life, but kids like Carlos, if they are extremely lucky and smart, get one chance. If they screw up just once they miss their opportunity to rise above their bleak circumstances.

Listen to the podcast on youtube here: https://youtu.be/2Uc-u79D31w

*****

I was reminded of Carlos while talking to Scott Wallace of southern Indiana’s Vincennes University, which has perhaps the most sophisticated training program in the country for aspiring CNC machinists.

Vincennes University “CNC Machinist Now” Grad

The Vincennes approach is a 60-credit hour Associates Degree with 5 instructors and 15 modern pieces of Hurco CNC lathes and machining centers.

In the two-year curriculum students are challenged with classwork and intensive instruction on the production equipment. Mr. Wallace indicated that most of the graduates go directly to the shop floor at employers in the Indiana, Kentucky and Illinois areas near Vincennes. Enrollment is full at 75 students for the first year. They have about 60 in the second year of the degree program.

They also have an advanced one-year program with 14 students in programming, which enables students to earn a second Associates Degree.

The Vincennes program costs $177 per degree hour, so a full-time paying student is on the hook for $10,000 tuition without assistance. Room and board adds to the tab.

I wonder if the smart, mechanically inclined young man or woman in Gary or Fort Wayne even thinks about their possibilities for a career that a Vincennes curriculum might provide. And even if somebody informs them about Vincennes, are their lives too complicated and filled with personal crises to take a chance on a two year commitment, $10,000 in tuition, and life away from what they are familiar with?

When Bernie Sanders and now Hillary Clinton float the idea of free college for all it sounds appealing, but Malcolm Gladwell’s piece dramatically portrayed how life gets in the way, even for the most gifted of students.

Vincennes is a nice option for kids who have some prior initiation to machining and math. Unfortunately, so many young people living in the inner cities have very little of both and are born into desperate circumstances which hold them down. If it is extremely difficult for an exceptionally gifted student like Carlos who has the help of a wealthy angel looking out for him, what chance do people have who don’t have such advantages?

Question: Does everyone have a chance to achieve prosperity in the United States?

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The Dune

By Lloyd Graff

The path was steep and winding, inaccessible by car. It led to the beach on the Pacific Ocean at Monterey Bay, near where my granddaughter went to summer camp. She wanted to show off the scenery to us.

I chose to stay at the car while the others in our group trudged down the rapidly descending path to the sea. I wanted to douse my memories of 8 years ago, when I was wondering if I’d make it up the sand dune at Lake Michigan where the family was vacationing right before the heart attack that almost ended my life.

For the last 8 years I’ve almost entirely avoided sand dunes and steep ascents from the water. The images they provoke in me are just too unsettling. Why look for anxiety when there’s enough in everyday existence to fill my cup to overflowing?

I thought I had buried the sand dune memory, turned it into a postcard photo after eight years, but I hadn’t. I don’t know if I can kill the scary images of the past. Maybe the best I can do is identify them and say to myself, “I know you, you annoy me, but you don’t spook me anymore.”

Sleeping Bear Dunes, Michigan

Eight years ago, as I struggled to climb the 150-foot sand dune at Union Pier, Michigan, the sweat poured from my forehead and armpits. It was as much from the fear and denial as the exertion. Was I going to make it to the street? Were they going to have to call an ambulance? And if I did make it up the dune, was I going to fake it like I had been all week on the trip, or let everybody know how scared I was?

I faked it.

Everybody else went out for lunch at the nearby burger joint, but I stayed in the car, trying to will away the pain in my left upper chest and dry the sweat on my brow.

I had forgotten that awful half hour waiting for the family to finish lunch, wallowing in fear in the Toyota, until just writing this. Maybe memories never really are buried.

Question: Have fear and denial almost killed you?

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Polish-ish Jew

By Noah Graff

Wood Figurines of Jews sold in Warsaw Old Town

Two weeks ago I spent several days in Poland, staying in Kraków and Warsaw.

Poland is a country full of beauty with a rich history. Unfortunately much of that history has been a bloody one due to its location between Germany and Russia.

I knew that while there it was imperative for me to learn about the history of the Jews in Poland—my roots. Many of my ancestors lived in Poland; fortunately a lot of them left before World War II.

While staying in Kraków I drove an hour away to visit Auschwitz, the most notorious of Nazi concentration camps. I had been to a different concentration camp a few years ago, Dachau, nearby Munich, and while that was a powerful experience, visiting Auschwitz brought about emotions of another level of intensity. I walked into rooms with ovens to incinerate the dead and into gas chambers with photos on a wall of individual prisoners accompanied by information, such as their country of origin, if they were Jewish or Gypsy, and when they were killed—1942 for all those in that particular room. In one room I saw a pile of Tallites, the

Prisoner uniforms at Aushwitz with photos of murdered prisoners on the wall.

Jewish prayer shawls that had been collected from Jews upon their arrival at the camp. Another room contained the original striped prisoner uniforms with more photos of victims on the walls. I saw the barracks where prisoners slept two people per bed. I walked around the grounds and imagined prisoners assembling for role call. The original barbed wire double fences still surround the camp, along with the guard towers that prevented prisoners from escaping alive.

It feels different to see where the horrors took place in person—not looking at a photo or movie screen—but up close and in color. The horrors become real, rather than just a bad dream.

Before I left for Poland I was curious to find out how Polish people today see Jews. I have many Polish friends in Chicago, young First Generation Polish people, and a few of them have asked me if I am Polish. It feels a little awkward when I get the question. I say that my ancestors were from Poland, but they were Jewish, so I’m not sure if that makes me Polish. My parents always told me that the Jews were second-class citizens in Poland, segregated from the main-stream Christian Poles, which meant that they were not Polish. However, after my experiences in Poland, the places I visited and the Polish people I met, I feel a little more Polish than I did before. I guess I could go as far as to say that I feel “Polish-ish.”

In Warsaw I visited the Polin Museum, a museum devoted to telling the history of Jews in Poland. I learned that Jews first settled in the area of today’s Poland back in the 1200s. They were traders traversing Europe who decided it seemed like a good spot to put down roots. It started with about 200 Jews, who made up approximately 5% of the population. The Jewish communities were isolated in their own areas, and although they did not enjoy the same rights as non-Jewish people of the region, the nobility provided them a livelihood, employing them with jobs that were outlawed by Christianity at the time such as money lending—funny that 800 years later we are still known for the same occupation and often still resented for it.

As the centuries passed Poland gained a reputation in Europe as “the place where the Jews were treated too well,” so Jews kept settling there, eventually becoming a significant portion of the nation’s population. By the turn of the Twentieth Century many Jews had assimilated into Polish society and Jews were on the cusp of gaining equal rights and Polish citizenship. Some Jews fought in World War I to assert themselves as true Poles. During the same period many Jewish traditionalists feared that Jews were assimilating too much in Polish society. They feared that having the same rights as gentiles would cause Jewish culture and traditions to fade away. I think their fears were valid to some extent judging by the assimilation of American Jews in today’s predominantly tolerant American society. Also, history has shown repeatedly that when Jews become too comfortable in their surroundings it is a precursor to some sort of catastrophe.

Right when the Jews were starting to be officially accepted by Polish society World War II began. In a few years Warsaw went from a city with a 30% Jewish population to one with just a handful of Jews. Today one can walk through the touristy Old Town of Warsaw and see street vendors selling figurines of religious Jews so people can know what this extinct group of people looked like.

Some of the perspectives on Jews from people I met in Poland blew my mind. One woman in Warsaw told me that later in life she discovered she had a Jewish grandparent. She claimed that prior to World War II 70% of Warsaw was Jewish! A taxi driver told me that he was married to an ethnically Jewish woman—her mom was Jewish because her Grandmother was Jewish. He claimed that prior to World War II Warsaw was likely 50% Jewish. I interpret these shocking statistics to signify that Jews had been in Poland so long that they had spread their gene pool throughout the country. This probably was one reason Hitler killed so many Poles.

Just days after I returned home the world famous Holocaust survivor and Nobel Prize winning author, Elie Wiesel, passed away. He had devoted his life to ensuring that the world never forget what happened in the Holocaust. I hope I will never understand what it was like to be a prisoner in Auschwitz. Yet I feel grateful that on this trip I was able to see where the tragedy happened and better understand where I come from.

Question: Does today’s genocide in the Middle East remind you of the Holocaust?

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