Category Archives: Auctions

One auction in May, the machining world looked brighter

By Lloyd Graff

Auction prices today are very hard to figure. I talked at length with Dennis Hoff of Hoff-Hilk Auctioneers about his May 26 sale at Bystrom Precision, a small CNC shop in Minneapolis. The magnet pieces in the 150 lot sale were three L-20 Citizens, Type VII new in 2000 with Iemca Genius barloaders.

Hoff says he told the client the sale price for each of those machines would be in the $30,000 to $40,000 range. The day after a long Memorial Day holiday is a lousy day to do an auction because people are just getting their plants up and running. An hour before closing, the prices were a little above dirt.

Hoff told me that the seller was distraught as he looked at the disappointing numbers on the screen, but suddenly the bidders started waking up. In the last few minutes of bidding, the Citizens spurted from $12,000 to an average of $60,000 for each of the three machines with barfeeds.

The Royal Master centerless grinders brought $15,000 for one and $20,000 for a second, and a one of a kind model went for $5000. Uglier ones sold in Canada a month earlier for $500 each.

There were three small Brother TC31A drilling and tapping machines which sold for an average of $11,000 each.

A Daewoo Lynx 200A turning center fetched $12,000, and a Eurotech 7 axis 420SLL with a 1-3/4” bar capacity new in 1999 brought $33,000.

The weak sisters of the sale were three Nomura CNC Swiss Model NN13-SB, which scored $10,000 bids, with Fedek loaders hitting around $2000.

This auction is no definitive marker of the beginning of a turnaround—it may be more a function of shrewd marketing by Hoff-Hilk. But on one day in May, the machining world looked brighter.

Question: The Consumer Confidence Index had a big bounce Tuesday, are you seeing anything positive?

Citizen Model L20-VII CNC Swiss Type Screw Machine from sale

Citizen Model L20-VII CNC Swiss Type Screw Machine from sale

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Inside the Swiss Screw Machine Industry

Paul Huber of Comex comments on the recent Bosch auction in which 75 Escomatics were sold by Asset Sales Corporation. Paul came to the U.S. as a Tornos service engineer and is now the wise man of the Swiss screw machine industry.

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Even Medical is Suffering

The auction market for good used CNC machinery is being overwhelmed by a rush of supply. Even CNC Swiss lathes, always in short supply, are appearing in auction brochures almost weekly.

Recently a dental instrument maker, Hu-Friedy Corporation of Chicago, sold 13 late model Stars in an online sales event.

The machines were in beautiful condition, well maintained, and being sold because the company wanted the space for other manufacturing operations. Hilco had given the company a guarantee on the proceeds of the sale several months earlier and had been attempting to liquidate the machines prior to the auction date. They sold (3) SR-20 machines in December, but the balance of the deal was sold in early March.

The auction prices did not reach the computer’s reserves, but I understand many were sold to the unsuccessful bidders after the sale.

The Stars at Hu-Friedy were exceptionally nice machines with Iemca loaders on each one. The fact that not one piece brought the reserve price on the web auction is a clear indicator that even one of the strongest CNC markets is quite weak.

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The End of Detroit as we know it

By Lloyd Graff

What a day for Detroit. Old John Dingell, the pugnacious congressman from Motown lost his Jewel, the chairmanship of the Energy and Commerce Committee.

Dingell is 82, he succeeded his father in 1955 in the House — so the Dingells have been in Congress, virtually forever.

He lost his job to Henry Waxman of Los Angeles who is Mr. Environmental in Washington and a headline-hunting pain in the ass to the Detroit automakers.

The odds of the Big 3 getting a Washington rescue package were fading anyway, but the Waxman ascendancy was a dagger for the rust belt. Waxman’s defeat of Dingell is emblematic of the lack of clout mustered by Rick Wagoner’s last ditch attempt to circle the wagons.

Now the terms of the Detroit bailout will be dictated by an Obama Administration, with Henry Waxman having a significant impact. This bodes well for Elon Musk and Tesla Motors (see Today’s Machining World’s feature, July 2007), but it is curtains for the status quo. In the real world a bankruptcy filing is going to be ugly and disruptive for the supply chain and workforce. This is a very dark day for Detroit. There will be better days to come, but the Waxman for Dingell trade may mark the end of Detroit as we have always known it.

Question: Are you glad John Dingell is no longer in charge?

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Paul Eisenstein on automaker bailout

By Lloyd Graff

I talked to Paul Eisenstein, TMW’s resident auto guru in Detroit. He is pessimistic about a bailout for the domestic car builders. He sees the legislation caught in a food fight between the lame duck Republicans and the Democrats who find themselves defending a bailout for big business.

I asked Paul if he thought a Chapter 11 bankruptcy approach would work for General Motors. He felt the stigma of a filing would kill the sales of GM’s vehicles for years. He also says that Rick Wagoner, GM’s president, does not accept the fact that he is part of the problem. Wagoner is determined to gut it out as head of the company, which also mitigates against a Chapter 11 filing.

Eisenstein says that the big irony is that GM has made major progress in the last few years with the negotiation of a reasonable rollback settlement with the UAW. They have been ambushed by high oil prices and the current economic gloom, two things out of their control.

Eisenstein concedes GM has a crappy product line aside from the Malibu and the Escalade, but he thinks the option of allowing GM to fail is too awful to accept.

Question: Is declaring bankruptcy the worst possible course of action for General Motors?

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The Pickens Plan

Eighty-year-old, billionaire, oil baron T. Boone Pickens believes that America’s oil era is over. He is now going full speed into the alternative energy business, building filling stations for CNG cars around the U.S. and spending $2 billion out of what he hopes will be $10 billion to build an enormous wind farm.

This is the beginning of his “Pickens Plan,” the goal of which is to reduce the country’s dependence on foreign oil by 30 percent within 10 years.

The plan will require $500 billion more in private investment and $150 billion in government subsidies. He wants the next president and congress to remake the electrical grid by declaring emergency eminent domain to run transmission lines through private lands across the country.

Despite being a longtime Republican (who many blame for Senator Kerry’s defeat by Bush in 2004), Pickens is strongly supporting Barak Obama because he knows that a Democratic administration is more likely to spend the money needed to achieve his goals.

Source: CBS: 60 Minutes (Oct 26, 2008)

Question: Do you think the Pickens Plan will come to fruition? Do you want the U.S. government to help finance it?

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New Credit Game for Industrial Equipment

By Lloyd Graff

I think we got an important signal Tuesday when Bank of America decided not to raise credit lines for McDonalds franchisees to buy new equipment such as coffee machines. They’re keeping credit lines as they are – that doesn’t mean they’re cutting them, it just means they’re not raising them as a general policy. This is important because it shows that the Wall Street mess is starting to filter down to the lending habits of major banks.

I think this is going to affect industrial equipment purchases because it affects the money available to borrow. It’s going to mean that distributors and machine tool builders are going to have to become more resourceful in enabling their customers to buy new and used equipment. A Haas or an Okuma is going to have to be more involved in the financing issues of their customers, using their clout with lenders to find money for them. They will probably be paying more for the money than in the past, but I think this is part of what the FED is all about in providing ample liquidity in the system. The sources for the money may not be the traditional ones that people have used in the past. There will be leasing money, off-shore money and bank money available, but the banks will probably be lenders who fall to the sidelines, because the more resourceful and nimble lenders will probably be the ones to step in.

Question: Have you had a problem in buying equipment recently?

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Auction Blog: Hardinge Cleaning House

Go Industry is handling an online sale expiring July 24, for Hardinge Corporation.

Hardinge appears to be cleaning house up in Canada at the site of their former distributor in Ontario, Darbert Machinery of Mississauga. Hardinge has opted to handle the distribution of its products in Canada themselves.

In Elmira the company is selling three CNC Swiss type lathes, a 25mm and two 16mm new in the mid 1990s. Hardinge brought in a private label Tsugami Swiss type for a few years but never made the commitment to go into the sliding headstocks in a big way. Had they made the push at that time, with their broad distribution, Hardinge might be a player today in an active part of the CNC world. One of many blown opportunities of the Pat Ervin regime in Elmira.

Rick Simons has recently taken the reins at Hardinge. This auction is a small reminder to the machining community in North America that the game is changing for the old builder.

Question: Do you think it’s too late for Hardinge to develope its own CNC Swiss?

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Auction of the week: Allen-Bradley Aftermath

Allen-Bradley’s auction online on July 10 (see auction of the week: June 25), was a good example of the axiom that if the buyers are disinterested in a machine they will ignore it at almost any price, but if it’s something hard to find, the bidders will extend themselves even in a stinko market.

The multi spindle National Acmes, though they were in nice shape and well equipped, virtually died. The 1” RAN6 machines with threading and pickoff brought from $2,500 to $6,500 plus a 16 percent buyer’s fee. The 7/16” RA6, went begging, most not even reaching the $1,000 reserve price except one that fetched $6,300.

The exception on the Acmes were the two 3/4” RA8 machines. Eight spindles are still in demand and the 3/4” is rare on the market. The machines were nicely equipped with threading and pickoff. One machine had been in a crack-up recently and had a bent spindle. It brought $31,000 plus the 16 percent buyer’s fee. Another one hit $42,000.

When you hat you hot, when you not you not. Amen.

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Auction Ambush!

Sometimes an auctioneer obtains a deal and then gets ambushed. That appears to have happened to both Cincinnati Industrial and Great American Group of California who both ended up with Davenport deals at the same time.

Cincinnati Industrial has the Southco auction, which is a collection of fastener and screw machine equipment which Southco deemed surplus as they move manufacturing to the Far East and other domestic locations. The Southco machinery is not hooked up. It is sitting in a huge warehouse near the Philly airport with cleaning equipment pushed next to the threaders and secondary equipment.

The Great American deal is a liquidation of 20 Davenports from AMETEK Inc., of which are in the 1990s. They are asking $30,000 each for the newest machines. All of the Davenports are 9/16” capacity.

With 42 Davenport screw machines coming on to the market at the same time, neither party is likely in the mood to party.

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