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Author: Lloyd Graff
I was talking to Greg Knight of AMT Machine Systems (ServoCam), whose company adapts old school cam Brown & Sharpes into 21st century CNC hybrids. He was lamenting the difficulty he has selling his product to job shop owners who have no visibility of work from one month to the next. The days of consistent long-running contracts seem to have vanished like untaxed cigarettes. In the used machinery business, and I’m guessing also in the new machinery business, we live with future blindness. Projections are difficult, which drives accountants and bankers mad, but they probably deserve it. Business people crave…
Several years ago Graff Pinkert had a deal with a fellow who made a good living buying surplus machinery from government stockpiles and reselling it around the world. We talked about his bidding strategy and he told us his approach. He would assess his risk in bidding on a bulldozer or crane and put down a price he was comfortable with. Then he would put down successively higher figures. When he reached the number that made his stomach twinge, he circled it and let it settle in his body for a while. He told us he had learned from hard…
I am beginning to reassess the importance of owning things like real estate, cars, books and perhaps capital equipment America. We are now in the crest of the third wave of home foreclosures as the idiotic subprime mortgage blister oozes on. If there was ever a strong argument for renting housing, the massive drop in home values makes it. I live in a home we bought 30 years ago for $130,000 in Olympia Fields, Illinois. I paid off the mortgage several years ago. My wife and I have put at least $200,000 more in renovations into the property over the…
The “Jobs Bill” that President Obama signed Monday may have sounded like another “stimulus” boondoggle, but it really has a lot of important goodies for the machining world. The section of the bill that has immediate impact for the machine tool business is the expensing provision. The current rule was scheduled to expire by the end of 2010, which would have reduced the write off from $250,000 to $25,000. The new law pushes up the expensing provision to $500,000. For smaller companies making profits, this provision, which extends through 2011, will mean better cash flow and less money for Uncle.…
Last week Roseland Metal Products of Dolton, Illinois, was auctioned off by Loeb Winternitz Industrial Auctioneers. I think an event like the Roseland sale tells us quite a bit about what is going on in the small contract shops—the core of precision machining. Roseland was a casualty of the recession but also of a management that made scant investment over the last 10 years. The most significant capital investment was the retrofit of six out of 15 Brown and Sharpe screw machines with an early incarnation of AMT’s ServoCam upgrade technology. Roseland bought a SNM clone of the New Britain…
The question most commonly asked at IMTS is, “How is the traffic?” That’s probably the wrong question today. The better question would be, “Are people buying?” Answer—not a lot at IMTS, despite what the big builders say for public consumption. But the mood at the show is quite good, with many attendees saying they plan to buy equipment in the future. Despite the alleged tightness of credit, there seems to be no shortage of cash for machines companies need to expand and improve. Lack of financing may be the problem for the people who didn’t make it to the show.…
A couple of weeks ago I asked in a blog whether or not you would like President Obama to come to IMTS. As expected, I got a solid response of Obama bashers, but my suspicion now is that Barack actually read the blog (we used to shoot hoops in his backyard together—just kidding), because he ended up deciding to come to the show in a big way. His Cleveland speech, in which he proposed 100 percent write-offs of capital investments made from September 8th through 2011, is potentially an enormous present to our industry. He one-upped the Republicans, who are…
1) Will the Japanese and European builders be raising prices in dollars for their products? With the yen at 85, the pressure on margins must be heavy. But world-wide competition is brutal. A domestic producer like Haas has an advantage in North America, particularly with a bread and butter product like a vertical machining center. 2) Will buyers show up for the show? Ignore the supposed attendance numbers offered by show management—are there real people in the aisles and real customers talking to the exhibitors? Is IMTS now a super-regional exhibition, or is it still the really big national show…
I believe 2010 will go down as the year the wage discrepancy between public and private employees began to narrow. According to a recent article in USA Today, the average yearly pay including benefits for a federal government worker is $81,000 compared to $51,000 for a private business employee. Cadillac health plans and defined benefit pension programs have bloated federal payrolls. State and municipal payouts have kept up with or sometimes surpassed those of the federal. The tide is changing. The dike of unchallenged government pay and benefits is showing leaks. California is broke and politically stalemated, but furloughs are…