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The Best and Worst Jobs

By Noah Graff

A recent video from the online Wall Street Journal discusses a survey ranking the “best and worst jobs” of the 2010 economy. On the list, actuary ranked as the best occupation and roustabout ranked the worst.

The study, published by a site called Careercast.com, is based on five criteria: work environment, income, employment outlook, physical demands, and level of stress. Feeling good at the end of the day from helping society, and plain old fun were not criteria.

So the best job is actuary—the person who interprets statistics to determine probabilities of accidents, sickness, and death, and loss of property from theft and natural disasters. (Remember Ben Stiller from Along Came Polly. Really relaxed, happy guy.)

The most physically demanding jobs ranked the lowest with lumber jack second to roustabout. In case you’re wondering, roustabouts maintain oil rigging and natural gas equipment. The study rationalized that roustabouts and lumberjacks undergo harsh physical labor in rough, dangerous outdoor environments which then leads to stress. However, there is ok pay for roustabouts at a top-end salary of $49,000 plus overtime, and the employment outlook could be quite good in the present natural gas rush.

Machinist was not mentioned in either list, but welder was number five on the “worst” list, right between dairy farmer at four and garbage collector at six—and NAM wonders why they have trouble getting young people to want to be welders.

Honestly, few of the jobs on both the “10 best” list and the “10 worst” list appealed to me. I’d be more partial to Hollywood film director, pro tennis player, or Sports Illustrated Swimsuit Edition photographer.

Questions: Does the data in the study surprise you?
What is your dream job, and what job is your nightmare?



WSJ’s Sarah Needleman discusses a survey of the best and worst jobs. Of the best, actuary ranked number one. Of the worst, roustabout was on the bottom.

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On The Brink: GM’s Precarious Centenary

GM’s Precarious Centenary

Lawrence D. Burns, GM vice president, research & development and strategic planning with Volt.

Soft hums and gentle whirs fill the small studio hidden deep within the General Motors Technical Center, in the Detroit suburb of Warren. In one corner, designers and engineers keep their heads bowed low over their CAD/CAM screens, their labors transformed, at the other end of the building, by a set of automated milling machines carving new forms out of lumps of soft clay. What emerges could shape the future of the entire company.

“We know we have a perception problem, at GM,” admits design executive Bob Boniface. Where environmentally-conscious consumers look at Toyota and see “Prius,” they look at GM and see “Hummer,” and that’s “something we have to fix.” admits the former Chrysler stylist who now oversees design of the Chevrolet Volt.

First shown at the 2007 Detroit Auto Show, Volt quickly captured the imagination of motorists around the world, never mind environmentalists, regulators – and competitors, like Toyota. Unlike the Japanese automaker’s hybrid-electric sedan which primarily relies on its gasoline engine backed up by an electric drive system, Volt is a so-called plug-in hybrid. In production form, it will feature an oversized battery pack capable of running the vehicle for up to 40 miles – enough for most daily commutes – solely on electric power. But on longer trips, a small, internal combustion engine will kick in, providing Volt with the added range lacking in traditional electric vehicles.

If GM can hold to an admittedly aggressive schedule, and deliver the first Volt to dealers by 2010, it could gain the critical first-mover advantage over its rivals, notably Toyota. And with its big Hummer brand likely to be sold or shuttered, the Detroit maker could paint a green aura around itself at a time when it desperately needs, once again, to be seen as a leader, rather than a follower, a position the giant manufacturer isn’t used to being in.

For the better part of the last century, General Motors dominated the global auto industry. But in recent years, it has been casting a nervous glance over its corporate shoulder – especially in the home, U.S. market. Now, with the sudden run-up in fuel prices, there has been a sea change shift, with American motorists by the millions, switching from the big trucks that have long dominated GM’s line-up to the small cars and “green machines,” like Prius, that have made Toyota such a daunting competitor.

The two makers wrapped up 2007 in a global dead-heat, GM maintaining its position as industry king-of-the-hill by just 3,100 units. But if first-half figures hold for the rest of this year, the American maker is about to tumble off its throne. Through the end of June, Toyota held a worldwide global sales lead of about a quarter-million vehicles, and few see GM regaining its momentum anytime soon.

The automaker is drastically slashing production capacity in the U.S., shuttering or slashing production at its light truck plants, and eliminating tens of thousands of jobs.

The latest cuts were announced in July when CEO Rick Wagoner revealed plans to speed up production cuts, trim another 1,800 white-collar jobs and, overall, slash about $10 billion in costs, while raising another $5 billion to keep the vast empire funded. Only a few days later, GM delivered still more bleak news: a $15.5 billion loss for the April-June period, the third-largest quarterly loss in GM history. Wagoner continues to insist that there is “no thought… whatsoever” of bankruptcy, but frustrated analysts and nervous investors alike keep wondering just how much longer things can continue.

It’s a heck of a way to celebrate the carmaker’s 100th anniversary.

Déjà Vu All Over Again?

GM has dodged many bullets. In 2000, the new CEO, John Smith, was forced to unwind what Roger Smith (no relation), who died earlier this year, had put in place. Plants were rebuilt, even replaced. Products went through massive updates. And Jack Smith outlined a series of sharp cuts in manpower and production capacity. He also, belatedly, recognized one of the most significant shifts in American automotive history, committing billions, and the bulk of GM’s product development resources, to ramp up production of vans, SUVs and pickups.

While light trucks might have been the products environmentalists hated, consumers loved them, snapping up as many as GM could build, and finally frustrating the Japanese, who struggled to crack the code in segments they’d never entered before. Even Toyota seemed perplexed by minivans, pickups and SUVs, rolling out a series of costly failures.

But as GM had demonstrated before, success is a powerful narcotic, making it far too easy to ignore impending problems. Like the latest oil shock. Over the years, observers have often speculated about what would trigger the collapse of the light truck market. The answer was $4.00 gasoline.

Nancy Jaksich, who owns a Chevrolet dealership near Portland, Oregon, still hopes trucks will rebound, but her tone suggests that’s just wishful thinking. The current fuel price crisis, she concedes, “is a consumer wake up call, and definitely a Big Three wake up call.”

Four dollar gas would be a serious enough problem without what GM’s current CEO, Rick Wagoner, likes to call “negative headwinds,” which lately are blowing at hurricane force. Start with the American economic downturn; add stiffening foreign competition; then mix in sharp increases in the cost of raw materials such as steel for body panels, and rubber for tires. It adds up to thousands of dollars in added production costs, but in the current market, automakers can pass only a fraction of that onto consumers at a time when the U.S. market has plunged to its lowest level since 1992. In July, GM posted another double-digit decline, while sales overall dipped to an annualized rate of barely 13 million vehicles – down from more than 17 million earlier in the decade.

Hilary Clinton takes a tour of production at GM. Photo courtesy of GM.

Only a few years ago, employees at the GM Renaissance Center proudly wandered the halls wearing “29” buttons, a reference to the market share the automaker was aiming for. That was a far cry from the numbers former GM President MacDonald scoffed at, but the figure looks awfully nice at a time when the automaker could soon slip to 20 percent – or less.

If you compare the situation today to what happened under his watch, former GM Chairman Stempel says, “the ‘90s were a cakewalk. That was just a cyclical downturn, and there was no doubt in anybody’s mind that we were going to get out of it.” While he cautions that industry analysts have a tendency to “pile on,”
during a downturn, Stempel concedes the current situation is dire.

Piling on

It’s easy to paint a fatalistic image, and certainly it doesn’t help when analysts at big name brokerages like Merrill-Lynch start raising the specter of bankruptcy. But CEO, Wagoner, who has developed a remarkable skill at projecting a sense of both optimism and urgency, isn’t hearing any of it. “Under any scenario we can imagine,” the executive argued during a mid-July appearance in Dallas, “our financial position, and cash position, will remain robust through the rest of this year.”

Nonetheless, there are reasons to see some positives working in GM’s favor. This is a very different company from the one sculpted by Alfred Pritchard Sloan and mis-managed by Roger Smith. Though it still needs paring down, GM is a relatively streamlined entity, one
getting leaner by the day. And it is an increasingly global entity. A decade ago, Jack Smith had to stand up against a cadre of naysayers, investing heavily to launch the Buick brand in China. Today, that’s the automaker’s fastestgrowing market, while once-risky ventures in emerging markets like India and Russia are also helping offset troubles in the U.S. and Europe. The percentage of GM’s unit sales rung up overseas has risen, in just a couple decades, from 25 percent to 50, and Vice Chairman Bob Lutz, who has spent much of his own, long career abroad expects it to reach 75 percent in the coming years.

But for now, GM’s fate continues to hinge on the American market, where many of its once-prized products are now sitting, unloved and unwanted, on dealer lots. The first challenge is to come up with the products that the market is demanding, says independent auto analyst Dan Gorrell. The tougher task will be to get American consumers to put GM back on their shopping list, whatever it produces. In trend-setting markets, such as California, he cautions, that won’t be easy.

The shift has begun, GM sales and marketing chief Mark LaNeve pointed out that 11 of the carmaker’s last 13 launches were either cars or crossovers. And the executive noted that a number of the newest products are showing positive signs in the marketplace. But it’s critical to note that passenger cars have typically delivered a fraction of the profits of a truck. Indeed, for decades, GM has struggled to minimize the money it loses on every sedan and coupe it sells in the U.S.

Of course, it didn’t help that GM would often develop unique products for each of its key markets. Lutz has ordered a global consolidation of product development, readily apparent at the Saturn division, which is working in tandem with the European Opel subsidiary on products like the new Astra subcompact. There will still be regional differences, from sheet metal styling to the level of standard equipment. Considering a major new product can cost a $1 billion to bring to market, however, the savings are enormous.

Add to that the savings GM expects to generate as the result of its latest contract with the United Auto Workers Union. With its new, two-tier wage structure, Lutz expects it will eliminate “about two-thirds” of the cost gap between GM and the “transplant” assembly lines operated by foreign-owned makers, such as the Honda plant in East Liberty, OH. Other contract changes have helped GM—and its domestic brethren—rocket up the productivity charts, according to the 2008 Harbour Report. (Chrysler actually tied industry leader, Toyota, by requiring an average 30 manhours to assemble a typical vehicle. GM came in close behind, at an average 32 hours of labor.)

GM’s battery testing center in Warren, MI. Photo courtesy of GM.

Meanwhile, a new focus on quality shows GM steadily climbing up the quality charts, as well. The new Chevrolet Malibu ranked high in the latest J.D. Power Initial Quality Survey – and was named North American Car of the Year, by a panel of 50 U.S. and Canadian autowriters. But the best payback of all, GM can’t build enough to meet current demand.

GM, however, needs more Malibus and fewer Hummers. And it needs them fast, if it hopes to ensure that this won’t be its last anniversary. That’s why the Volt is so important. In terms of raw numbers, the plug-in hybrid won’t reverse GM’s sales decline, but it could give consumers a more favorable impression of the ailing automaker, just as it begins the switch back from trucks to cars. If it can’t regain that confidence, no matter how much it saves, no matter how more capital it raises, GM’s future will be bleak.

TMW: In the Atlantic Monthly about 2 months ago the price of the Volt was quoted at $35,000. In a recent interview with Phil Lebeau on CNBC the price was quoted at $45,000. How much will the Volt cost?
PE: I have heard numbers all over the place for what Volt will come in at. I am not convinced either of those numbers is correct, as Troy Clarke, president of GM North America, specifically told me, in a conversation several months back, GM expects to financially subsidize the first-generation Volt, much the same way Toyota swallowed at least $10,000 of the cost of building the Prius, for quite a few years. I wouldn’t be surprised to see the lower number, perhaps something even lower.  Perhaps GM has changed strategy since I spoke with Clarke, which is quite possible.

TMW: Will the Volt really come out in 2010? If two kids can put a lithium ion battery in their parent’s Prius (story from a recent interview in TMW) and get over 100 mpg, why can’t a giant like GM do it? What are the difficulties they face?
PE: I am so fed up with talk about what “kids” with aftermarket tech do. Let’s look at what a well-funded venture, like Tesla is still struggling to accomplish, and in their case, they’re forced to use more than 8,000 laptop computer-style batteries. They’ve only produced a few vehicles, and have changed key suppliers—primarily for the dysfunctional transmission—repeatedly. When Toyota can pull it off, not these kids, then we can talk. Okay, so Toyota is trying, and I’ve driven THEIR prototype. They’re using a more conventional parallel hybrid approach. And, Toyota, for now, says it will only get a minor fraction of the battery-only range of Volt. Oh, and look for a big price tag there, too. I have heard plenty of rumors that Volt is struggling to make 2010. Frankly, if they got a few out, late in the year, and had a hard date, in 2011, for retail, they’d be forgiven — again, if it’s a successful design. Not trying to defend GM, by the way, but go apples-apples. Okay, the difficulties: batteries are by far the real challenge. But as I am now seeing other makers, like Nissan, say they’re confident of their improved battery capabilities, I think GM may also be improving. FYI, Nissan’s pure EV will reach U.S. fleet buyers in 2010, with a promised 100 mile range.

TMW: Why is the GM quality touted as so wonderful in China and considered generally poor here? What are they doing differently in each country?
PE: For one thing, Chinese suppliers, ahem, are bad. So any automaker who can achieve quality levels there, equivalent to bottom of-pack (according to JD Power) here, is a star. GM has some of the most modern and efficient plants in China. This was a critical decision approved by Jack Smith, a decade ago. Many makers entered China with old-strategy plants; using lots of very cheap manpower and building old cars (market leader VW), dismissing the quality issue. Smith approved a relatively high-tech plant that was modeled after GM’s world-class Eisnach facility, in Germany. Initially, it was also low tech, in terms of raw manpower, but used much more state-of-art management systems to boost quality. As production has grown, and as labor costs have risen, the Buick facility, in Shanghai (S-GM), has steadily added more robotics and automation.

TMW: What’s with GM’s president, Wagoner? If any other company’s stock had fallen 75 percent in the last 2 years, the CEO would have been fired. Why do you think he still has his job? Could an outsider run GM?
PE: Everyone asks this question. Myself included. This is the subject of a very long conversation. He continues to have the support of the board. Indeed, the GM board has apparently given Wagoner another vote of support. To be honest, I don’t think an outsider would be able to tame GM in the way Mullaly is trying, at Ford. But I still don’t understand why he remains on the job.

TMW: What brand besides Hummer would GM be most likely to sell? What other brand is valued highly enough that it could be sold if need be?
PE: There have been reports (from myself, included) that GM is reconsidering the viability of ALL its brands. GM denies it, but I believe there’s a serious, internal discussion. Only Chevy and Cadillac are untouchable, and rightly so. Pontiac is a shell of itself, and Buick would be dead, but for its success in China. Ed Welburn, global design director, told me in April, that without China, Buick likely would have to go, but it’d be difficult to kill the brand in the States and not send a very bad message to Chinese buyers. Note the automaker has begun turning to its Chinese product development unit, PATEC, to lead creation of future Buicks. GMC is a clone of Chevy truck, and could go, what with its market collapsing, but with that name, who’d buy it. TRIVIA QUESTION: do you know what GMC stands for??? Saturn, well, they’re investing a lot in it, making it the most European of GM’s North American brands. If vehicles like Astra fail, there’ll be serious questions asked.

TMW: Why did GM really cut the EV1 electric car?
PE: Because it made no business sense. None, certainly not at the time. Sure, there were some high-profile folks making a lot of noise in its favor, but it was clearly the wrong technology and much too early. Again, easy to pile on GM— which often deserves it. BUT… guess what? It was the Japanese who killed the California EV market and mandate. Despite the rules on the books, Honda, then Toyota both quit the EV market well before GM pulled the plug on EV1. Everyone else walked out about the same time. Sadly, the EV1 was about the only offering with any potential, but simply not enough to make a business case. GM was losing a fortune and was never going to
reverse that… not until now, when the new technology, ie Lithionm Ion batteries, has makers rethinking the EV’s potential.

GM’s rocky past

The bad news comes across with stunning regularity: record losses, double-digit sales declines, plant closings, job cuts. It’s hard to read a headline out of Detroit that doesn’t deliver another body blow to Big Three.

It wasn’t supposed to be that way. Preparing for its 100th anniversary, as the year began, General Motors was forecasting a much-anticipated turnaround. Ford was hoping to gain traction of its own, with its oft-revised “Way Forward” program. And Chrysler was hoping to settle into a groove after its divorce from German partner Daimler AG and its acquisition by the huge private equity fund, Cerberus Capital Management.

Then things got rough. Commodity prices, for everything from steel to rubber to the platinum for catalytic converters, shot skyward. But the biggest price increase was for gasoline, which soared past a record $4 a gallon, suddenly triggering what Jim Farley, Ford’s director of sales and marketing, described as a “sea change” in the American automotive market.

When gas prices started nudging the $4 mark, demand collapsed. As the year began, full-size pickups accounted for a full 12 percent of the American market. By mid-year, that was down to barely eight percent. In July, domestic light trucks sales were off by nearly a third, and the Big Three couldn’t cut back production fast enough.

Of course Gm is not alone. The Asian companies are rapidly shifting to small cars – like the Honda Fit – and an array of hybrids and other “green machines,” leaving Detroit to play catch-up. Ford plans a major “Europeanization” of its American product line-up, starting with the launch of the Fiesta subcompact, in 2010. But under current market conditions, that’s a long wait, and many analysts wonder whether it can hold out, especially in light of its record, $8 billion second-quarter loss.

As part of the privately-held Cerberus, Chrysler releases only minimal financial data. CEO Bob Nardelli insists the automaker has been able to bank a billion since the year began, but most analysts see Chrysler in the worst condition of the Big Three. Without Daimler, it is all but totally dependent on the U.S. market, and doesn’t have European design operations to turn to. So, the American maker is racing to partner with the likes of Nissan – which will supply it with a version of the small Versa – and several Chinese makers. If any automaker has gone to the brink before, it’s Chrysler, which has an uncanny knack of getting in deep about once a decade. So far, it’s found a way to improve its fortunes every time. But the current crisis may be more than it’s bargained for, and the situation isn’t much better for Ford or GM, either.

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Feeling Good Next Year

By Noah Graff

In order to make it professionally next year more people than ever in this world are going to have reeducate themselves, whether they’re learning CNC programming, switching professions after being laid off or starting their own businesses.

Lately I’ve been learning to administer a certain magazine’s Web site and taking salsa lessons. I’ve noticed that since I’ve gotten older (I’m almost 30) I’ve been listening to my teachers better. They say kids soak up knowledge much faster than adults. That may be true, but unlike when I was a kid, today I’m more aware of the learning process. I’m now able to observe myself doing it and I’m more excited about learning than I ever have been.

Maybe it’s because I’m learning these things from teachers that I’ve chosen and that I’m paying for their knowledge myself. School was always at least half about the game—passing the test, grinding through to get the piece of paper that would propel me to my next stage of growth. Maybe it’s just maturity—you never know. But I think I’ve become a better listener, at least to the people I respect.

So in my infinite wisdom as a 29-year-old (almost 30) journalist/auteur, I prescribe to all of you that learning should not only be important for getting from point A to B. I know it can be painful and expensive at times, but take a step back and try to watch yourself doing it sometime. It feels good, and you may then do it better than you would otherwise. I think it’s a key to feeling happy.

Take some inspiration from the martial arts training below.

Beatrix Kiddo (Uma Thurman) is trained by the great Pai Mei in Kill Bill Vol. 2

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Swarf – Oprah and The Acme

Oprah acme

Dear Oprah,

I am a fan of yours. I’ve been watching your show since before you were the Color Purple. You’ve had Nobel Prize winners, cancer doctors, dessert chefs and exercise mavens, but you’ve never had anybody remotely like me tell their story. Perhaps after you read my take you will invite me to be a guest.

My name is Arby Eight. I am a National Acme screw machine and damn proud of it—for the last 51 years!

My story is the story of North American industry and today I’m feeling !@$#%# unappreciated. I started my productive life in 1968 when I was shipped from my birthplace in Cleveland to an ammunition plant near Minneapolis. Without any training or initiation they heaved me into a line with 30 guys just like me and started shoving leaded steel bars through me making fuze parts for big artillery shells that were lobbed into the Vietnamese jungle to kill people in black pajamas. They called them “gooks” then—at least that’s what I discerned by listening to the operators, most of whom knew Americans in “Nam” and wanted no part in fighting the war themselves.

After that conflict settled down, I sat idle for a while. Business in the early 1970s was crappy, but then the
oil boom came along and I started making sucker rod fittings for an outfit in Texas, ‘til that bubble petered 1980 out. Them ol’ boys in Dallas didn’t know anything about multi spindles like me, but I did learn to like Mexican food while I was in that factory.

The sucker rod play went away in the 1980s when gas sold for $.70 a gallon. I was sold at auction like a big piece of meat to a fittings company doing work for the farmers. That gig was okay for a while, but then the farmers stopped buying because $2 per bushel corn did not buy many tractors.

From there I gravitated to a job shop in Detroit that did work for the Big Three automakers. What a miserable time. They ran me like a slave and poisoned me with sickening soluble oil that made a mess out of my innards. They even mixed the coolant and lube oils. We all knew they were milking the place, looking for a holding company to buy them out, roll it up and go public. They never found a buyer, so me and the rest of the machines got old and arthritic.

The guys in the shop talked among themselves about the lunacy of the management. The founder of the company had retired and the family kept bringing in “professional” managers and accountants who said, “forget about the machines—use the shop as a cash cow.” The floors were slick and air was misty. What a dump.

And they never diversified into non-automotive work, so when American cars stopped selling all they knew was to lay off people and skimp on maintenance.

Oprah, I’m writing to you for the Class of 1968 National Acme crew that hit the shop floor running. We ran quality then. Now we sit idle, not because we can’t still cut it, but because the world changed. The owners got old and their kids became doctors and chefs and dropouts. The accountants viewed what we did as “input” not craftsmanship and artistry. A very small handful of my compatriots moved to China and Mexico, but most of us are here rusting, and a few have even melted away.

I know of a few RB8s who are still running next to some sexy CNC Swiss machines, but most of us just sit and wait for the car companies to start making cars people can afford and want to buy.

Oprah, I’m not anything that special myself, but my story is the story of 50 years of American manufacturing and the contribution we still make to this country. Your audience may think I’m already dead, but my lifespan is limited only by the availability of spare parts, the creativity of rebuilders and the ingenuity of the people who enable me to do what I do well.

Question: Will Acmes make a comeback?

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Worth Your Salt

Bolivian Rose Salt

Bolivian Rose Salt

By Lloyd Graff

Salt is the ultimate commodity. Buy a canister of Morton’s off the very bottom shelf at the supermarket for a buck and a quarter and use it for six months, then buy another.

But for a seasoned cook, salt has a flavor that varies with the coarseness of the granule and where it comes from. Sea salt tastes different than mined salt, and rough kosher salt makes better brine than the fine stuff. When I think of salt I envision Tony Maglica, the man behind Mag Instrument, the greatest machining success story of the last 30 years. Tony grew up poor as dirt on a tiny island in the Adriatic. He and his mother survived on the pittance they gleaned by collecting sea salt during and after World War II. For Tony, salt afforded life—if just barely.

Nowadays, when I visit my daughter Sarah in Palo Alto, California, I always check out the Saturday morning farmers’ market. One of the newer sellers is a company called Spice Hound. They sell several different types of salt. I own a Bounds salt grinder and I was looking for the chance to buy something more interesting than Morton’s generic, but I didn’t know what I wanted.

The Spice Hound had 50 different containers of condiments. I certainly didn’t need to buy salt, but I saw a vial of tiny pink rocks labeled “Bolivian Salt.” The Bolivian thing, plus the quartzy pink cast of the crystals pulled me in. I asked the owner of the kiosk business to tell me her story and the story of the Bolivian salt.

As I tasted the salt, I imagined Paul Newman and Robert Redford in Bolivia in Butch Cassidy and the Sundance Kid. I thought of Tony Maglica harvesting salt. I thought of this young Asian girl, Tammy starting a spice business in the pit of a recession. The salt was no longer just salt. It was a sensual, exotic, fresh must-have with an interesting story for only $7.00. I bought it and every time I grind salt for my tomatoes or omelets I think—wow this Bolivian salt is such a delicious luxury.

The task we all face as sellers of products that masquerade as generic commodities, is to give them a living story that sticks. Bolivan salt—pink as the Andes Mountains. Is it really different than Andy’s Machined Products from burned-out Detroit. Maybe the story is about a job for an ex-offender in St. Louis or a chance for a blind machinist in Seattle. We all have a story to tell—if we are worth our salt.

Question: Would you consider buying Bolivian Salt?

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Industry Scuttlebutt

Fritz Henderson--Pitcher at University of Michigan 1980-84

Fritz Henderson--Pitcher at University of Michigan 1980-84

The purge of former college jocks at GM continues. Former pitcher at the University of Michigan, Fritz Henderson (Senior year ERA of 5.91), is out, following the ouster of Rick Wagoner who played basketball at Duke. The culture at the top is changing with the nasty old phone guy Ed Whitacre shaking things up like a juiced up blender. Will ex-Oakland Raider and Chevy spokesman, Howie Long, be the next to hit the road?

***********

I recently talked to a long time friend and client, Wes Skinner of Manth Brownell, Kirkville, New York. This year Wes has taken his available cash and invested in Citizen CNC Swiss lathes, diversifying his machining portfolio out of his core Davenport and Wickman multi-spindles. He has bought seven Swiss—all used—including his more recent buy of an M-32 for $160,000. His rationale is that this year affords him a window to buy at historically low prices and he wants to bring his percentage of sliding headstock work up to one third of his current volume. Currently his multi-spindle business is good and getting better, but he does not envision buying any traditional multis in the foreseeable future. Wes thinks the really great buys in machine tools are ending now.

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The stock market is showing us some interesting things now, which makes the gloom and doom scenario for 2010 less believable. The Real Estate Investment Trusts are hot. Even though vacancies are high in commercial, office and industrial, the strong REITs are beloved by forward looking investors. This would indicate that the well-funded publicly traded real estate guys are in a great position to pick off the plums that the weak ones will be unloading. It also indicates that insurance companies and pension funds still like to lend on good properties with U.S. Treasuries paying a pittance and the strong likelihood that rates will be higher in a couple years or sooner.

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Unemployment is over 10 percent with shadow unemployment at 16 or 17 percent, but it is a fine time to be in the temporary help business. With so much uncertainty in Washington over health care and unemployment insurance costs headed up. Both big and small businesses are skittish about hiring full time people with benefits, but they still need people to get work done. The agencies that provide the temps are thriving. Demand for their services is rising and they have a lot of candidates to offer.

***********

My condolences to the family of Ivan Doverspike, who died recently. Ivan was a machinery dealer in Detroit specializing in screw machines. I didn’t know Ivan that well, but I remember traveling with him to look at a deal and discussing mutual acquaintances from the used machinery wars. His favorite saying during that conversation was “he knows his apples,” meaning a guy who’s astute. When I heard he had passed away my first thought was that he was a man who definitely “knew his apples.”

Question: Do you think jocks make good executives?

President Barack Obama--Played on Punahou High School Champion basketball team in Honolulu

President Barack Obama--Played on Punahou High School Champion basketball team in Honolulu

Rick Wagoner--Duke freshman basketball team walk-on 1972

Rick Wagoner--Duke freshman basketball team walk-on 1972

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In the Mecca of Swiss Machining

The Swiss just voted overwhelmingly to bar the building of new minarets in Switzerland. No big deal in and of itself (only four of the country’s 150 mosques have them), but quite significant as a symbol of the discomfort level in the county over the “Islamification” of Europe. Minarets are tower-like structures built on top of mosques that are traditionally used for the call to prayer. None are used for that Switzerland however, because of strict noise pollution rules.

Muslims now comprise roughly five percent of the population of Switzerland, traditionally a conservative and insulated country. They have a much bigger presence in England, France and Holland.
If you visit the Haute-Savoie region of France, which borders Geneva, the machining hub of the region since clock making from wood was developed in the Jura Mountains, you will see thousands of satellite dishes aimed at Aljazeera transmitting towers. Arabia has been transplanted in Rolex-land. With the European machining community flattened by the recession a backlash at Muslims is not surprising.

Maybe it is a stretch, but I am going to connect the dots between the sudden resignation from CNN by the outspoken critic of Latino immigration, Lou Dobbs, and the vote in Switzerland. The rumor is that Dobbs wants to run against Robert Menendez of New Jersey, the only Latino in the U.S. Senate.

Is there a parallel between Islamic immigration to Europe and Latino immigration to the United States? Will Lou Dobbs ride an anti-minaret like backlash into the mainstream of American politics?

Question: If you discovered your best employee was an illegal, what would you do?

Minaret of Zurich’s Mahmud Mosque, 23 May 2007/Christian Hartmann

Minaret of Zurich’s Mahmud Mosque, 23 May 2007/Christian Hartmann

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The Power of Rebuilding

Interesting news about the world of heavy trucks. The domestic hauling companies are still flat on their tuchuses, but the suppliers are getting busy. The military demand is getting crazy for trucks and components and some of the big contracts are soon to come. Afghanistan is going to require a different group of vehicles than Iraq.

Another leg of demand is China. The Chinese have lots of dollars and a need to move goods around their vast countryside. Evidently they are shopping here for the best and most durable vehicles.

The other leg of the stool is the heavy truck rebuild market. Because the truckers are not buying new trucks they are doing a lot of million-mile refurbishing.

Even though the stats may show truck sales are way off, the picture for the suppliers is different. I had a long talk with an engineer from Hendrickson whose forte is building truck suspensions. They sell to major heavy truck builders such as NavistarPeter BuiltMercedesVolvo and Oshkosh.

It’s counter intuitive that the lousy state of the trucking business in America continues as the truck manufacturers are becoming quite busy.

Question: Have you noticed the uptrend of military, export, and rebuild in your business?

oshkosh-army-truck

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The iPod Doctor

By Noah Graff

In the next issue of Today’s Machining World I interview Demetrios Leontaris, otherwise known as the iPod Doctor. He has a business driving all over New York City in his Aztec, fixing broken iPods, PDAs, laptops and smart phones belonging to everyone from Wall Street guys to construction workers to teenagers. On average, to fix an iPod he charges between $59 and $100 and change—a heck of a lot less then the price of a new one.

What I found so refreshing about the way Demetrios’ runs his business is that he hates to say “no” to people who need something fixed, which he admits isn’t always the best business practice. After the interview, I told him about my external hard drive that stopped working. It had about 700 gigs of memory, mostly comprised of video footage from some of my most important projects. Lacie, my hard drive’s brand, doesn’t even attempt to fix defective drives. They offered me a free replacement, but I didn’t want a new drive, I wanted my data. They suggested I send it to a company that extracts data from busted hard drives, but those services cost thousands of dollars.

Demetrios said he would take a crack at it, so I sent it to him, even though I knew that by letting him open it up my warrantee from Lacie would go bad. A few weeks later he proclaimed that after many tedious hours of attention he had both restored my data and got my drive working again. He charged me $375, which I happily excepted.

Question: Have you ever taken on a customer’s machining issue when rationally you probably shouldn’t have? Do you have trouble saying “no” to a challenge?

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Time to Leave Business Hibernation?

Mike Jackson, head of the publicly traded dealer group, AutoNation Inc., says the automotive economy has turned the corner. He sees a 13 million car year as early as 2011 or 2012. Ford is making money. GM may have an IPO as early as next year. Inventories of cars have been halved in the last few months. The green lights are illuminating the highways. Yet business in my world, the machining world, still stinks.

What do you do if you are making decisions now that could affect your business for the next three years?

From experience I know that the big money is made in the tiny window of a market turn. We have already seen that in the stock market’s 50 percent rebound since the March bottom. If we are at the pivot point in machining, particularly in automotive work, this may be the time to go into business if that’s what you’ve always wanted to do. If you are a business person still standing after 18 months of being pummeled, this is probably the time to gamble on the upside.

When a bear hibernates his bodily instincts tell him when to exit his cave. Rational humans tend to want to stay in the cave well after the thaw begins because a spring blizzard might hit and finish them off.

I must make the decision in the next few days about whether to increase the number of Today’s Machining World issues from the survival mode of every other month, to nine or even 12 issues for 2010. After I almost died a year ago I fear being reckless in case of an economic relapse. But because I survived near death in the hospital and on the economic playing field, I am much more inclined to say to myself and the world, “If not now, when?

Question: Are you ready to leave survival mode?

Leaving a Cave

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