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Imports from Asia are rising again. China is allegedly going to allow its currency to rise. Scrap steel is leaving the U.S. and foreign steel is rushing in to fill the warehouses.
Much of the trade in goods travels in metal shipping containers, those 20 and 40 foot long boxes you see on rail cars and trucks everyday.
Normally about 20 percent of the containers on ships at any given moment are empty, especially those headed toward Asia. This imbalance costs shipping companies billions of dollars each year, but it presents a gigantic entrepreneurial opportunity for inventors and engineers to make a killing. In the April 12th Wall Street Journal, John W. Miller wrote a fascinating piece on the race to build stackable or foldable shipping containers. It’s an idea that has been floating around for years, but so far nobody has been able to build one that meets all of the demands of shipping firms.
The Port of Rotterdam in Holland is Europe’s busiest port, and container ideas are flowing out from there. Rene Giesbers has designed a composite fiberglass container whose vertical walls fold inward, giving it an “x” shape as it collapses on itself. It supposedly saves 75 percent of the fuel needed to transport it and won’t rust.
Another Dutch engineer, Simon Bosschieter, has designed a container made of steel alloy with folding walls that slide into each other.
An Indian banker, Avinder Bindra, also designed a container with folding walls, but his are stacked vertically instead of horizontally.
With such a big pot of gold out there awaiting a killer design, somebody is going to get it right.
How about you?
Personally, I have no three dimensional brain—I can’t even rearrange my closet. But for people who can envision how to cut precise metal parts in their sleep and who have knowledge of materials, the collapsing container is the Rubik’s Cube of a lifetime.
Many of you have heard in the press this week about the scuffle between John Paxson, the Chicago Bulls Executive Vice President, and Vinny Del Negro, the team’s head coach. For those who don’t know the story, here’s a brief synopsis. Paxson had told Del Negro to limit the amount of minutes for the team’s starting center, Joakim Noah, because of the player’s plantar fascitis which has plagued him all season.
According to a story on Yahoo Sports, on March 30, after a game against the Phoenix Suns during which Del Negro used Noah two minutes over his designated time limit despite having seven chances to take him out in the last two minutes when there was a foul, dead ball or a timeout, Paxson grabbed Del Negro by the tie, jabbed him twice in the chest and seemingly challenged him to a fight.
Other versions of the story later emerged depicting Del Negro as the instigator of the altercation, but the fact remains, Paxson, a high profile, vital figure in the Bulls organization, behaved in an unacceptable manner with actions that some argue bordered on assault.
Now comes the tough call for Bulls owner and chairman Jerry Reinsdorf. How does he handle Paxson, a highly valued employee who has been instrumental in bringing the organization back to respectability in the last seven years? Reinsdorf has had a relationship with Paxson for 20 years, dating back to his playing days on the first three Bulls Championship teams. Del Negro was probably going to be fired at the end of the season anyway. He’s a terrible bench coach, and his contract is running out, so he doesn’t seem worth obsessing about. But what do you do about Paxson? Should you punish him with a non-paid vacation, send him to anger management, or shift his role to one less visible in the media? Firing him seems extreme—he’s talented, loyal, and losing him could lead to instability during a crucial off-season for signing free agents. But can you tolerate a talented hothead?
This is a universal issue in running a business.
Question: Have you ever had a valuable and volatile John Paxson in your organization? How would you deal with this situation if you were Jerry Reinsdorf of the Bulls.
Not long ago completion of an advanced degree was assumed to lead to a higher wage, but this isn’t always the case today.
With jobs hard to come by in today’s economy, lately there’s been an influx of people headed back to school for the piece of paper they feel will eventually lead to that coveted high-paying job.
Unfortunately for them, some companies are bypassing the well qualified but expensive employee for less expensive, less educated workers who they can train on the job. Companies are also realizing the benefits of hiring people with real world job training over academic excellence.
In her story “Valuing Another Degree” on Yahoo.com, Jonnelle Marte uses the example of entry-level teachers with master’s degrees, often having a harder time finding a job than those with bachelor’s degrees because of the higher wages expected by teachers with master’s degrees.
For some advanced degree candidates, the cost of school doesn’t seem worth the benefits now. With the average advanced degree costing more than $50,000 to acquire, many out of work people are not interested in piling on more debt, especially with no promise of a job on the other side. In some cases a master’s degree may make sense, but not if you’re just out to delay the inevitable and difficult task we all face at some point in our lives, the job search.
Question: How important is a job candidate’s education in your decision whether or not to hire them?
Alan Bentsen needs a Davenport for his living room. The piece he’s searching for has four legs and weighs around 3000 pounds—without cushions.
During the day, Alan is a toolmaker at Harva Company in Schoharie, New York, where they run CNC mills on military jobs, but at night and on weekends he restores old machinery because he loves the mechanisms and the feel of the weathered stuff.
Alan’s dream is to find a 70-year-old leg-type Davenport screw machine and totally restore it to running perfection. When finished he’s going to place it on a hardwood floor in front of a bay window in his home, which is a replica of an old train station
Alan is 36 years old. After attending Hudson Valley College to train as an engineer he left to work for Craftech in Hudson, N.Y., where they trained him to run their one and only Davenport screw machine, bought new in 1998. For Alan it was a love affair between man and machine. He adored that little five spindle, serial number 13485, and ran it for two years making plastic fasteners. Then Craftech lost the job. “They left the job set up on the machine for seven years and never ran it,” he said. It sits in storage.
Alan dreams of a “parlor piece” like nobody’s ever seen before—an operable ancient screw machine from the Rochester factory. He wants to be able to demonstrate the .4 second indexing speed to his friend over drinks and run off a few parts for the screw machine naïve.
I love Alan’s passion for old iron. As a side job he once helped make replicas of baggage wagons with a buddy. If you have a leg-type Davenport with a good casting decomposing in a corner, contact Alan Bentsen at email@example.com or give me a shout and I’ll pass it on to him.
I recently read Jodi Picoult’s new book House Rules about a teenager with Asperger’s syndrome, a mental disorder on the autism spectrum. It made me wonder if people who read this blog have experience with hiring employees with Asperger’s or perhaps have Asperger’s themselves. Autism in any form is a devastating brain malady, though I know people with advanced degrees who have been diagnosed with it.
It strikes me that with the right structure a person with the diagnosis could thrive with good supervision.
A job shop with constantly changing demands is probably the wrong milieu for someone with Asperger’s, but a company that has a very predictable workflow might accommodate such a person. A person with Asperger’s may have an IQ which is off the charts but lack social skills to decipher the subtleties of workplace behavior.
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By Lloyd Graff
I play a little game with myself everyday. I take a moment to think of five things I feel grateful for and then visualize them. I consider this planned minute part of my daily exercise regimen, like stretching and walking on the treadmill.
Tuesday, my Fab Five included getting to watch the NCAA basketball tournament final game and experience opening day of the 2010 baseball season.
Monday night when I was watching the Duke vs. Butler epic I kept saying to myself at each timeout, “What a game!” and “I can’t believe how great this is!” My wife Risa indulged me by sitting down to watch for a few minutes out of deference to her Dad, who went to Duke Law School, but she didn’t really get it—never has. But to me that basketball game was ecstasy, and I love that I loved it so much.
For me baseball season is a religious experience. Opening Day came on Easter Sunday during Passover this year, and I thank God that I reached this day to bask in another long season. The stock market rises and falls and the precision parts world gyrates, but earned run average, home runs and spitting pumpkin seeds in the dugout are forever. Babe Ruth, Ernie Banks, Harry Caray, Wayne Terwilliger (an obscure Cubs infielder of the 1950s) and a million other names I love are embedded in my cerebral cortex.
To a joyous fan like me, Butler vs. Duke, Cubs Cards., Yankees Red Sox are life itself—like making a sale, eating desert and hitting the treadmill. The sports page is Bible. And God willing, I’ll get the Masters this weekend too.
Hunter Jamison and his two brothers Scot and Terry own and operate Millipart Inc., an aerospace machining firm southeast of Los Angeles in Glendora, Cal. Their father Jim Jamison started the company in 1954 after tiring of selling hardwood floors.
Millipart recently bought a new Kitamura vertical machining center with a 30,000 rpm spindle. I asked Hunter, who has a daughter in college, if he felt a third generation of family was destined for the business. He was unsure, but then mentioned that his sales manager was third generation with the company. “She started here when her mother was pregnant,” he said.
Besides Hunter and his brothers, the core employees of Millipart are from three Mexican families. For close to 30 years the company has made room for daycare for its employees at their machining plant. The company’s kids grew up around the CNC machines. The lathes and mills were as common as swings and jungle gyms to the kids of Millipart. G-Code was not a foreign language. It was almost as common as Dick and Jane.
When I grew up, dinner table conversation was often about deal making, competition and the stock market. My wife grew up at a table where legal talk prevailed and two of her brothers became lawyers.
We tend to gravitate toward the familiar. According to Hunter Jamison one of the pivotal reasons Millipart has succeeded for the long haul was the decision made long ago to allow kids to smell the cutting oil when they were toddlers.
Question: Is company sponsored daycare still a viable option today for machining firms?
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By Lloyd Graff
Chuck DeLong says he “can’t deal with people,” but he loves his old CNC machines, which he cajoles to run perfect pieces like other people baby their pet Corvettes.
DeLong’s machine shop is out in the sticks, yet only 30 miles from the Charles River in Boston where he keeps his 37-foot Silverton Sport Fisherman. He says it’s the boat he doesn’t use because every fill-up is $1100.
When he isn’t boating Chuck is running his Hardinge CHNC-1 and CHNC-3 lathes which he claims make parts just as exquisite as a 2010 Mazak or Mori if you treat them with respect and use sweet oil. His operating philosophy is to run his machines slowly but steadily and then adjourn to his desk to write boating articles.
DeLong is 64, he loves being a machining artisan. He makes 100 grand in a crappy year like 2009 and $150,000 in a livelier one. He works a lot of hours at the shop but looks for any opportunity to bop over to the nearby lake to use his boat of choice, a 1965 Cavalier ski boat with Chris Craft engines, made in 1965. He bought the boat on eBay three years ago.
Chuck just bought a 1994 Haas VF-2 CNC mill from Graff-Pinkert, which he also spotted on eBay.
DeLong likes the solo business life. He used to have 20 employees, but shed them for the companionship of his vintage Hardinge and Haas buddies. He prefers the simplicity of doing it all by himself.
His introduction to the machining business was in 1959 when his parents bought three Brown & Sharpes which they ran in their basement. His folks would trade places running the machines. Their house was filled with clackety background noise, but after all these years he has developed a talent for tuning it out.
The variety of small business permutations in America always surprises me.
In the rolling prairie of Northwest Indiana-Amish Country—Eli L. runs 3 1-1/4″ RA6 National Acme screw machines without conventional horsepower electric motors—the normal power supply. He has been making fittings on these workhorses for 25 years using a jerry rigged diesel generator connected to a line shaft to power his machine tools.
The Amish are adamantly opposed to being hooked up to the power grid but are not Luddites. For instance Eli, who runs his shop with his children and grandchildren, has upgraded his screw machines with Logan air clutches to squeeze out more production.
Eli used to make a line of machined salt and pepper shakers, but that business has faltered. He is quite busy, however, on contract fittings manufacturing.
It used to be very difficult to reach Eli, but his business is now connected to the outside world by cell phones. You cannot easily find his shop on a map, but a GPS will guide you. But one thing you will not see in his office is a computer connected to the Web.
Question: Would you do business with a company that was off the power grid?
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By Lloyd Graff
The BNSF Railroad, Warren Buffet’s recent $27 billion acquisition, is putting 11 miles of railcars back in service after storing them for close to three years in track between Helena and Great Falls, Montana.
The railcars will be handling additional shipping containers, timber and coal.
General motors is raising domestic production, rescinding the axing of hundreds of dealers, and predicting a profit for the year. An Initial Public Offering is being considered for 2010 to begin to pay off the $50 billion Federal bailout loan.
I saw Andrew Logan of Logan Clutch who makes clutches for many markets in addition to his original aftermarket screw machine product. He says business is in a V-shaped recovery pattern. The marine market is sizzling for him and energy is picking up strong. He says the lessons learned from selling to the tight fisted screw machine guys have trained him well in the competitive clutch business. He is planning an addition to his building and is going to buy more new Mazak lathes.
I asked him if he would buy a cheap new building and he said he could pick up real estate for a song in Cleveland, yet he would rather pay more to build an addition because he could then keep a close eye on what’s going on.