Monthly Archives: September 2017

Cycle Time

By Lloyd Graff

The stats from the PMPA (Precision Machined Parts Association) for August confirmed what I’ve been feeling for the past year. Business is really strong for machined parts manufacturers.

It goes pretty much across the board. Automotive, aerospace, medical, even oil and gas and appliance are doing nicely. So is my machinery business that sells to the folks in this section of the manufacturing arena.

This presents a new challenge for me. For almost the last 15 years I have been pushing uphill with only a few respites mixed in. The business trend has been mostly negative for American metalworking companies. The migration of work to China has been a devastating trend. Low-cost Chinese manufacturers have pulled in the generic work and gained competitive advantage with big American firms which are building most of their product in China.

China has not been the only killer for my business. Demographic trends have hurt. The workforce has aged and manufacturers have been unable to replenish a skilled group of baby boomers who are retiring or dying off. For some, the path of least resistance has been to sell or liquidate their businesses. Others have transitioned to CNC Swiss, CNC lathes and CNC mills, leaving long run work to the Chinese. My long successful family business of selling multi-spindle cam operated machines, refurbished to add value, suffered. Market forces killed me. It got bad enough that I even began to think of quitting the game.

In 2015 and 2016, Graff-Pinkert was forced to make the changes that led to a dramatic shift in business. We trimmed people and got more efficient. Noah and Rex Magagnotti, my longtime associate, started traveling more – a lot more – all over the world. We looked for more opportunities in brokering the sale of entire machining companies and buying CNC multi-spindles. We also made new alliances with European dealers.

Then there was the election of Donald Trump in 2016. I’m not a big Trump fan, but almost immediately after the election our machinery business changed for the better. Though Trump has done nothing radical to help business, the signals of shifts in EPA policy and a more aggressive trade stance toward China and Mexico seem to have changed the mood in our customer base. Auto and aerospace had been doing well going into 2017 and have continued to prosper, though the firearms business has faltered because people now don’t have to fear Obama or Clinton abolishing the Second Amendment.

This preamble brings me to my current happy problem. I am so used to doing business in a period of pain and strain that I am at a loss to figure out how to play things in a period of prosperity. Should it be full speed ahead to take advantage of the upswing in business or consolidate, pay off debt, cash in, and count the chips because bad times will come again.

This is not idle speculation on my part. The strength of business is pushing me to expand my workforce, when for many years I have been reducing it.

Should I gamble on buying more inventory or turn inventory (machinery and accessories) into cash when prices are firm? Should I sell off the crap, take losses for tax reasons, or hold on to sell it for higher future value?

At 72 years old should I grow the business or hunker down for the next crisis that hits?

My Uncle Aaron Pinkert used to say to me that his father told him “the dollar is round. Sometimes you are up, sometimes down, but it is always moving along.” I have often remembered that saying, especially when things have been bad. Sometimes it is harder to accept when business is good. Are we still rolling up?

Question: Is the current economic upturn in manufacturing here for a while or a mirage?

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What Happened Today?

By Lloyd Graff

My day inches by. I was busy but a little scatterbrained. I know I had a dozen conversations, but by the end of the day it’s hard to remember who they were with. It is a dot on the calendar of life. Did I waste it?

I feel a certain degree of desperation about frittering a day away. I am very aware of the finiteness of my being, but I have found a way to experience my day in a generally positive way. Write about it.

I have a chunky black sketch book with creamy blank smooth pages. My pen is my luxury, a “Sakura Pigma Sensei” felt tip that I buy by the dozen at Walmart, but a Sharpie works too. I write fast and fat, chronicling my day.

I don’t write just about my work day. I record recollections of conversations, interesting stuff I’ve heard or read, emotions, feelings of gratitude or disgust. The scattered ups and downs of a day.

I find that I cannot do this writing late at night because I am too exhausted, but at 4:00 or 5:00 P.M. writing about my day revives me. I almost always discover something really good that happened that I had long since forgotten during the hurly burly of trying to run a business.

Try it. You will be happier for the effort. I bet you didn’t waste your day.

*********

My brother-in-law Maury Minerbi, a wonderful guy, died last week after a heroic two-year battle with cancer. We can learn things from terrible events if we listen. My sister, Susan, Maury’s wife, told me how much she valued my frequent calls, wanting information about her husband.

The phone calls were really hard to make for me because I feared the worst and didn’t want to hear it. Most of the calls were made because my wife, Risa, picked up the phone and I listened in. But at least we connected, which was what Sue absolutely yearned for. It was not as hard for her to talk as it was for me to make the call. But I learned that you have to call, even when you rationalize to yourself that the other person probably doesn’t want to talk to you. Give them the opportunity to hang up.

Sue, thank you for teaching me to always summon the courage to call, even if I have no idea what to say.

Question: What is the most interesting thing you learned yesterday or today?

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Old Favorites

By Lloyd Graff

Lloyd and Noah Graff are traveling for a family funeral today, so we’ve scoured the archives for some favorite pieces to re-visit.

The Illusion of Security
May 2011 Volume 07 Issue 04

What is your “net worth?”

I remember my father used to calculate his net worth often and would meticulously record the amount his assets exceeded his liabilities on sheets of paper he kept in an accordion file in his desk at home.

When I worked with my Dad we would periodically discuss his net worth. He talked about it with reverence, sometimes in hushed tones, like the figures were inscribed on sacred parchment. And they truly were to him.

Those numbers he wrote down yearly were his personal score card of success, his record of succeeding or failing. They were figures that meant “security” for him. He told me that a rising net worth made him feel more secure, which was a feeling he sought more desperately than any other in his life. But the irony that I came to understand more clearly as we both matured was that he never felt “secure.” No matter how much money he had in the bank or in stocks it wasn’t enough for him to feel “secure.”

Read more here.

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What We Do

August 2010 Volume 06 Issue 06

The Budweiser radio commercial extols the virtue of beechwood aging and its beer’s crisp, clean taste. Heaven knows what those revered adjectives mean. Bud’s spot ended with a telling sentence, “It’s what we do.” That line meant something to me.

Budweiser was stating very clearly that brewing beer “is what we do,” and I buy the premise—if not the product. Defining what we do is important.

Can you succinctly—in one pithy sentence—say, “I grow delicious potatoes,” or “I make stainless steel,” or “I fly a Boeing 737 for Southwest Airlines”?

In a sophisticated economy like America’s, many of us have trouble devising a simple, declaratory sentence that explains what we do so clearly that we understand it, much less an uninitiated listener. It’s the cocktail party opener, the elevator speech, or the first sentence on the mortgage application.

But I think answering the question “what do you do?” for yourself is a deeper interrogatory that can bring clarity and momentum to a foggy, plodding career and even a foundering personal life.

Read more here.

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Finding Peace with Our Choices
December 2009, Volume 05 Issue 08

The death of financier Bruce Wasserstein, a friend from college days, hit me like an unsheathed blow to the chin. It wasn’t just because he had survived quadruple bypass surgery in 2001 or that he was three years younger than me and succumbed to heart failure. It was more about Bruce living the life of a superstar in finance, a master of the universe, a self-made Wall Street billionaire, who I knew from time spent working together on the University of Michigan college newspaper.

Those were heady nights of hot lead sliding out of linotype machines, wedged into heavy trays that turned into plates for the 3:00 a.m. printing.

Bruce wrote about the big issues, like student conflicts with the college administrators over divulging information to a Congressional witch hunting committee. It was Vietnam War time and the campus was alive with dissent; Bruce Wasserstein was smack in the middle of the controversy. I wrote about basketball, football and life, as the sports editor.

I remember Bruce coming up to me and saying, “Lloyd, what are you doing writing sports? Come over to the news staff and do something important.”

That remark was a portend about how our lives would diverge over the next four decades.

Bruce was a brilliant guy, a chess player, oblivious to his personal appearance. Dan Okrent, a sports writer on my team at Michigan, who became an editor at Time Magazine and The New York Times, described Bruce as a “complete slob” in The Michigan Daily obituary. Bruce was usually the smartest guy in the room, even if it was a big room of very smart people—and he knew it.

Read more here.

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Foxcows

By Lloyd Graff

Foxconn’s choice of southern Wisconsin for their first major American manufacturing plant is fascinating to me as someone who has seen the Midwest absolutely battered by Chinese competition for the last 25 years.

The days are gone since Foxconn in China slung nets under the windows of the dormitories where its young employees resided to catch the suicidal workers, so depressed after a brutal day of assembling iPhones.  Now Foxconn is confident enough of its manufacturing prowess and managerial acumen to stick a giant factory in a Wisconsin cow pasture and recruit its workers from the broken down, bankrupt towns in the neighborhood like Beloit, Kenosha, and Rockford, Illinois.  Not that there are not vexing problems related to worker depression in the semi-rural Midwest.  Opioid addiction and alcoholism are rampant, and nets will not help them there.

So why would Foxconn choose southeast Wisconsin?  Perhaps the biggest reason is Chicago.  They get exurban Chicago at a huge discount.  Chinese management will be able to fly into O’Hare and get to the new plant in an hour, but everything will be cheaper in Bristol, Wisconsin, than close to the airport.  They are following the Amazon play book.

Amazon is building giant fulfillment centers west and south of Chicago.  They staff these 1,000,000-square-foot mega plants with $13-per-hour people who come and go depending on how fast Amazon runs the conveyor belts.

Amazon has proved that you can recruit thousands of workers in a short period of time, work them hard but fairly, and retain enough of them to justify building more plants in the Chicago metropolitan area.  Access to arterial highways is essential for Amazon, and it will be for Foxconn, too.

Amazon and Foxconn will challenge virtually every employer in the Chicago/Milwaukee area and lift the threshold for wages.  Amazon offers health insurance and tuition subsidies after one year on the job.  Employees will make $13 per hour, the new minimum wage for able-bodied, modestly intelligent people who will work hard.  It will be interesting to see whether Foxconn will make stringent drug testing a condition of employment.  My research indicates an oral swab at the preliminary interview is Amazon’s entrance test with random testing on the shop floor.

Why is Foxconn going to manufacture in the United States?  I think it is partly political; putting a plant in Paul Ryan’s district that voted for President Trump makes sense, short term.  Being close to its American customers can’t hurt.  Stashing money outside of China is a good hedge for Foxconn’s bosses.  And it’s hard to resist amber waves of grain.

What do you think?

Question:  Should companies drug test?

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54321

By Noah Graff

About a month ago I stumbled upon a book which continues to change my life every day, The 5 Second Rule: Transform your Life, Work, and Confidence with Everyday Courage by Mel Robbins.

I’ve listened to several self-help books over the years that I found thought provoking and sensible, but none ever changed my life. They sometimes even made me feel down on myself. I felt so overwhelmed by all the advice that I could not get myself to do much of anything they prescribed.

Then I found The 5 Second Rule, which did change my life.

What is “The 5 Second Rule”?

The purpose of the 5 Second Rule is that if we want to find success in our lives, both on a personal and professional level we have to do things we don’t feel like doing. Perhaps we need to confront a work colleague or family member. Maybe we have to work on a project longer than we had planned. We have to tell someone we love them. We have to pay bills. We have to exercise and not eat crappy foods. We have to stop feeling sorry for ourselves, and most importantly we have to get out of bed in the morning!

Ten years ago Mel Robbins had hit rock bottom in her life. She had gone from being hired as a host of a Fox News reality show to being unemployed, deep in debt and drinking too much. She says that she had a lot of trouble getting out of bed in the morning because she did not want to face her grim world, so she would repeatedly hit the snooze button. Of course, staying in bed only worsened her situation.

One morning as she laid in bed trying to avoid her problems she decided to count “Five, Four, Three, Two, One,” and she suddenly blasted out of bed like a rocket. She then realized that by counting down from five she could also make herself do all the things she needed to do to fix her life but didn’t feel like doing. Robbins says she even learned to use the 5 Second Rule to stop feelings of worry, depression and anxiety. Before long she dug herself out of her hole and began to thrive in her life.

It is human nature to let indecisiveness, fear, laziness and other mental obstacles stop us from doing the things we know we need to do to be successful and happy. The way the 5 Second Rule works is that the moment you have an idea to do something you start counting down from five and just do it. You don’t give your brain a chance to talk itself out of it. You just start counting down from five and act. Robbins sites scientific research that explains why counting down from five enables decisiveness in the brain. The research also says that counting down from five to zero works much better than counting up to five.

I can testify that I’ve become a lot better at calling customers on the phone since embracing the 5 Second Rule. The moment I hit “zero” I am dialing. Also, if I am mingling in a group of people I’m much less likely to hesitate to introduce myself, and I am more likely to speak up about things I feel are important. When I know I need to exercise but feel tired I’m better at forcing myself to start. I used the 5 Second Rule to get down to writing this blog. It’s the small accomplishments that build on top of each other which lead to life-changing high achievement. You can’t get to the promised land unless you go step by step. That’s how The 5 Second Rule changed my life while all the previous self-help books left me feeling stuck.

Question: Do you think self-help books are a waste of time?

Mel Robbins Explains 5 Second Rule

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