Category Archives: Auto Industry

Ford Wants To Win

By Lloyd Graff

I didn’t think I would see it in my lifetime. I’ve been mocking them for years. 

I thought it would take another nut like Elon Musk to produce a competitive electric, self-driving car that could compete with Tesla, and in my mind a GM, Ford, Toyota, or VolksWagen would never have the guts to get to the finish line before the game was already over.

The stock market thought so too. Tesla was at $750, Ford was languishing at $12. 

Then, out of the blue, Ford decided they would actually go for it. They would convince Tom Brady, metaphorically, to leave New England at 43 years old and join yesterday’s team, so they could get to the Super Bowl.

Ford’s head, Jim Farley, somehow convinced Doug Field, who had led Tesla’s longshot effort to build the Model 3, to come to Ford. Field puts Ford near the top of the self-driving electric car sweepstakes.

When Musk booted Field out of Tesla in 2018, because that’s what he does to get the credit when the company is about to reach the end zone, Field moved to Apple to lead their super secret car project that is supposed to reach fruition in 2024. 

Getting the software right for a self-driving electric car is mighty difficult. Just ask Elon Musk, who is defending a bundle of lawsuits while trying.

Ford’s 2022 F-150

If anybody can make the Ford F-150 a legit contender, it is probably Doug Field. After graduating with a bachelors in engineering from Purdue he worked at Johnson & Johnson, where he met the renowned inventor Dean Kamen, who was attempting to build a wheelchair which could go up and down stairs by itself.

Kamen soon left J&J, and Field followed him to his new venture, Segway, where he was the first employee. The Segway is itself a balancing personal transporter which has morphed into a dozen or so products over the last 20 years.

Field was eventually lured to Silicon Valley, but maintained his interest in wheeled vehicles. Steve Jobs hired him at Apple where he became a prime mover of the Macintosh computer.

Eventually the attraction of building something new and great in America connected him to Elon Musk. Musk evidently saw in Field the creativity and drive to lead the Model 3 project that would take Tesla from a toy of the elite to a practical vehicle that could sell hundreds of thousands if not millions of vehicles a year. Government credits made the car economically feasible, and Musk, the showman, could promote Tesla without paying for advertising. Then Apple came once again for Field, this time to lead their self-driving vehicle venture for three years. 


You have to figure Doug Field’s latest move is not about money. To me, it is absolutely shocking.

Ford does have the F-150 Lightning electric truck, which has about 150,000 reservations for the 2021 model, which now may come out in 2022. It’s running neck-and-neck with Tesla’s Cybertruck, which is also late. Ford has to get this right. If it has endless delays and recalls, Tesla will steal the company’s heart, kidneys, and liver. 

Maybe Doug Field took this job to get his revenge against Musk for firing him three years earlier. I have to believe that Ford, with the company on the line, offered Field, a Midwestern Purdue guy, the kind of authority that car companies would never relinquish to a Silicon Valley lifer. Will he deliver? Or will the Detroit insiders paralyze him before he can? 

We’ll find out in the next few years.

Question: Does Ford have a chance to beat Tesla with their electric truck?

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A Noisy Truck Market

By Lloyd Graff

There may never be a more fascinating and trying time to be in the automotive business. 

Demand for trucks and SUVs is powerful, but manufacturers cannot build them in the quantities people want because computer chips are short. The executives can blame themselves for being much too conservative in their ordering last year, but demand has been a yo-yo because of the defiant and devious nature of the COVID-19 variants. People didn’t buy cars in 2020 because they were afraid to walk out of their homes. This year things have flipped as folks hit the road. Money is still cheap, old F-150s are looking dilapidated, and the Feds have given so many freebies out that trucks and SUVs look too attractive to pass up. 

Big demand, not enough product. That’s one interesting problem to navigate. 

Then there is your very rich and powerful Uncle Joe (Biden) who observed the Obama Administration resuscitate General Motors in 2009. He feels this is his moment to impact the car builders, forcing electric on them by setting virtually unreachable emissions and gas mileage regulations on their windshields. 

It is possible that Biden really believes that he is saving the planet by dictating a massive changeover from gas to electric by 2030. After all, we do have the convenient existential threat of “climate change” to justify everything from the switch to veggie burgers at McDonald’s to giving billions of dollars to the government operated Washington to Boston trains that never run on time. 

The auto executives and the world of Tier One, Two, and Three manufacturers, whose businesses revolve around Biden’s decisions, are now living in a world of mirrors. Do they prepare for an environment in which the big car makers struggle to build trucks and SUVs that are rechargeable? Does Exxon plan to abandon oil rigs in the Gulf of Mexico and refining operations near Houston? Do the frackers try to raise money to start drilling again with oil prices around $60 a barrel?

It is an utterly confusing world in which Putin and the Saudis set oil prices by jiggering output and Biden thinks he’s saving the world, or at least his presidency, by setting virtually impossible gas mileage goals to increase electric vehicle sales, which he thinks will be made by union workers who will vote for Democrats in the 2022 and 2024 elections. 

Amidst all of the competing interests, you have market research that tells car executives and dealers that real people really do not care much about carbon emissions. They want their Ford F-150s, GM Silverados, and Chrysler Jeeps, and they want them to reliably transport them and their cargo from Boise to Bozeman and Nashville to Memphis. Gas, electric, hydrogen, or pretzels, it really doesn’t matter much to them. The latest data predicts only 15% of the vehicles which will be sold in 2030 will be electric and 3% hybrid. 

So we have the 2021 Dancing with the Stars with Joe Biden and the car bosses doing the tango. Dance and dip. The car guys plead their devotion to defeating the dreaded climate change. Billions upon billions of dollars are pledged to be spent, yet Tesla is the only car company that builds an electric car people will buy. When will that change? Nobody knows.

Demand for gas guzzlers far surpasses the ability to produce them, and gas prices approach $5 a gallon in California. It is pretty weird and goofy, but in the real world of brakes and gas pedals and transmissions, people are trying to plan and order stuff. Meanwhile, used cars are flying off the lots.

Question: What’s stopping you from getting an electric car?

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Hindsight is 2020

By Lloyd Graff

From a business standpoint these last 16 months have been one of the most fascinating and turbulent periods I have ever observed and dealt with. 

Last March we were entering the COVID-19 pandemic. It was a period of fear, doubt, and paralysis. Selling used machinery was almost impossible because the industrial economy was a mess. Business virtually shut down in April, employees were laid off or furloughed, and everybody wore a mask and watched TV. Making ventilators and gun parts was about all that was cooking, except cooking, which was hot because almost all restaurants were closed. 

I asked myself, Risa, and Noah how we would cope. 

My answer was to quickly let go of two employees who were obviously not needed. Neither were really bad employees, but one guy was unreliable as far as attendance was concerned, and the other was a perfectionist, which made him too slow when speed was needed. Letting them go would save over $100,000 a year, so it was not a hard decision when business was so awful.

A harder call was deciding whether I wanted to stay in business when I was losing money. I was 75 years old, my wife was recovering from heart surgery, and I had money in retirement savings to draw upon. Yet, I decided to stay in business because I liked the people I work with, I enjoyed the trading part of the business, and I could work from home quite effectively. I thought the pandemic would run its course and the Pfizer and Moderna vaccines would be successful.

The COVID cases kept rising, deaths were becoming scary, but at least in the machining world people were working in factories, and our primary customers were staying alive. It appeared highly likely the Pfizer and Moderna vaccines would be successful and approved by the end of 2020.

Business woke up after the election. I closed the deal I had been working on for three years in the last week of 2020, which made an awful year look tolerable in the light of a miserable 10 months.

But for the first time in my business career, Graff Pinkert had no end of the year cash for employees. I regarded the 2020 losses as a personal and team defeat, despite people hanging together and working hard. 

The stock market’s stunning gains in 2020 were a bright signal that the absurdly low interest rates and the huge amount of money being pumped into the economy were indications of an impending turnaround if COVID-19 would cooperate.

Lloyd Graff at Graff Pinkert

I scrapped several machines in January that looked like they would never sell. My bank lending line was trimmed, but I still had money to buy inventory. Machinery looked cheap. Competitors appeared afraid or unable to buy. 

In early 2021, despite the January 6th Washington debacle and Trump’s recalcitrance to vacate the presidency, business was budding. The vaccines were released remarkably quickly and the machining economy began to accelerate like a sprinter at the Olympics.

I expected business to improve, but I was shocked by the first quarter and amazed by the second quarter. Even old cam multi-spindle screw machines were selling. Dinosaurs were awakening from the dead. 

I added overtime, hired one new full-time person, a summer employee, and two gig workers to provide extremely valuable skills. One of the gig workers was an electrician I had let go in April of 2020. As a full-time employee he wasn’t always fully engaged, but as a part-timer he was a star. 

Gig work, unemployment checks, and wiring refurbished homes suited him more than a full-time factory job. I also traded him a 2002 Toyota Avalon for hours worked, which enabled him to get to Graff-Pinkert without Uber. 

I also decided to raise the hourly workers by $4 per hour. This was partially to offset a dismal 2020, but also to reward them for a resounding 2021. It was also partly the Amazon effect. If Amazon, which is building several enormous distribution facilities within a few miles of Graff-Pinkert, could start at $15 per hour plus health care and other benefits, I figured I had to pay more. I hired two beginning laborers for $18.50 per hour to outbid Amazon. 

Labor is really a small part of our expenses, but it is crucial. I paid significantly more in bonuses to Rex and Noah, who were assuming an ever greater role in Graff-Pinkert. I paid off all of the company’s bank loans for the first time in decades. 


I expect the rest of 2021 will be very strong economically. More workers will start to enter the precision machining world if wages look attractive compared to restaurants, hotels, and low paying service work. 

Next year is cloudy. The pace of growth cannot continue at 8%. The recouping for 2020 will run its course. Inflation will come down. But I see the machining world improving for several years after very choppy growth for the past 20 years.

The future of the automotive industry is quite fuzzy to me at this moment. The enormous announced investment for non-gasoline cars is a huge bet on the public actually buying electric, which I see as quite iffy. If the stupid leaders of Volkswagen in Germany really plan to throw $35 billion Euros at electric, it stands a strong chance of failing.

In my business, I have placed my bet on good people and aggressive buying of what we call “sexy ugly” machines. Time will tell if they remain sexy to customers.

Question: What is the one thing you won’t forget from the last 16 months?

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A Battery of Questions

By Lloyd Graff

Every few months it’s fun to write a piece that asks, “what if most of the smart people are wrong?”

I just read a fascinating article in the Wall Street Journal discussing the $50 billion bet Volkswagen has placed on developing an electric car that is better than a Tesla. Should we be surprised that the best German Engineers, who built the diesel that nobody bought (at least in America) and then lied about its numbers, would build an electric car that wouldn’t work? 

VW has now brought in new people, shoved the boss aside except for window dressing, and started over. 

This was all predictable. It takes a crazy lone wolf like Elon Musk to pull off a viable electric car that can sell a half a million vehicles and satisfy a fairly high percentage of them. Musk has shown he can make an Electric, but to me he has not shown that there is a real mass demand for it, at least he did not in the year 2020. 

I do think quite a few Electrics will sell in China because Chairman Xi is going to force them down people’s throats, but excuse me for being heretical, I don’t think most folks care whether a car has a plug or a gas cap, or floats on hydrogen. They want to get from one place to another, safely and comfortably. They either do not care or accept the concept that an electric car, which is really fueled by coal, natural gas, or God forbid a nuclear power plant, will save the planet from the climate change that “smart people” tell them is happening.

Another surprise for you, fewer and fewer people care about cars and driving these days. I suggest you discuss this with your kids and grandchildren who are supposedly aching for these software engineering masterpieces. When I was 16, everybody begged to get a driver’s license on their birthday. Today many young people would rather ride their bikes.

I think Elon Musk already knows this. This is why he is hedging his bets by focusing on his batteries, spaceships, and tunnels to Las Vegas and Austin.

Volkswagen ID.4 Electric Vehicle

He has built a car for people to brag about, and he has become the richest person in the world by doing it, which may enable him to live on Mars until he is 140. Vehicle companies will sell 90 to 100 million things you use for transportation. Musk’s 500,000 electric cars along with what everybody else is producing have a puny 1% of the market. Now Google, Apple, and possibly the Vatican are working on Electrics because everybody knows they are the next big thing. Except, maybe they aren’t. 

I watched a lot of football over the weekend. One insipid car and pickup truck commercial after another was followed by 797 car insurance advertisements. Liberty, Liberty, Liberty, Liberty, Liberty. Please free me from them or I will Progressively lose 15% of my cerebral cortex. 

There is a reason for the proliferation of GEICOs–the reduction in real driving. COVID and Zoom have diminished driving for almost a year. As a result, fewer accidents. State Farm has crushed it. Post-vaccine, people will still be working more remotely. Driving will shrivel. You can finish the story. 

I will place my bet that Earth will survive despite the “Existential Threat” of sweat. 

Enjoy your self-driving electric Volkswagen. I think I’ll walk.

Question: Does a Hybrid car make more sense?

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Ep. 96 – Precision Machining in Spain with Patrick Bosch

By Noah Graff

On today’s episode we are discussing the machining industry in Spain.

Our guest is Patrick Bosch, Managing Director of Nagamohr, a 150 employee Tier 2 automotive company headquartered in Madrid, Spain. According to Patrick, despite Spain’s reputation as having a relaxed culture, its people are quite serious about manufacturing.

Scroll down to listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts or your favorite app.

Main Points

Patrick talks about his family’s German origin and about a subsidiary his company started recently, Nagamex, in Mexico. (2:55)

Patrick talks about Nagamohr’s business, producing turned parts for Tier 2 automotive. The company has over 80 machines in its shop in Spain, including a large number of Hydromats, as well as CNC multi-spindles and other CNC machines. It has a turnover of around 15,000,000 euros per year. (4:05)

Patrick says Nagamohr was originally a joint venture between a Spanish firm and a German firm, Nagares and Mohr, but the two could not get along, even while the company just existed on paper. Nagares, the Spanish division, wanted out of the partnership, so Patrick’s family took its place. Only a few years after the company was founded, the Bosch family assumed full ownership of Nagamohr. (5:25)

Patrick talks about his background. He studied business administration and engineering at university. For a few years he worked in the finance field, but when the opportunity arose he decided to join his family’s company in 2011. He assumed a leadership role in 2013. (6:40)

Patrick’s talks about why his family moved to Spain. He is the first generation of his family born in the country. In 1962 Patrick’s father originally visited Spain to study Spanish, but decided he preferred to stay in Spain than return to Germany. Patrick’s mother is also German. (8:00)

Patrick says that the automotive industry represents over 10% of Spain’s GDP. He says Spain’s manufacturing is most significant in the country’s Basque region (in the north) as well as Catalonia, while his location in Madrid ranks third. 

Patrick discusses the division between the regions of the Spain. He says half of the people in country identify themselves as Spanish, while the other half of people identify themselves by their region. (11:45)

Patrick talks about the skills gap in Spain. He says it’s hard to find skilled workers in the machining field, so usually its necessary to train employees in house. (13:10)

Patrick talks about the industries commonly found in Spain besides automotive, including the energy industry and engineering. (14:40)

Patrick says unemployment in Spain fluctuates quickly and can be very high because of the country’s reliance on the seasonal tourism industry. He says before the COVID-19 crisis the country’s unemployment rate was around 11%, but right now it is around 18%. (15:22)

Patrick dispels the myth that Spanish people are lazy workers. He says the Spanish work day is similar to that of other countries but the custom of the Spain is to operate one hour later than the rest of the world, as though it were in another time zone. For instance, someone working in a shop in Spain might start at 7:00AM rather than 6:00AM, but then work an hour later in the day. Rather than eating lunch at noon,  Spanish people often eat lunch around 2:00PM. Then they typically start eating dinner around 8:30PM and as late as 10:00PM. (17:10)

Patrick discusses salaries in Spain and Spain’s government-run programs such as health care. He says salaries range widely, with entry level in a shop around 20,000 euros a year, with an additional 33% going to the government for social security and health care. He says that Spain’s public health care is very good. He says inexpensive private insurance is also available but generally everyone uses the public health care providers for serious medical concerns even if they have the private insurance. He jokes that he always asks himself why he pays for private insurance. (18:50).

Patrick says people in Spain work much harder than other nations realize.  (21:20)

Patrick explains the origins of Nagamex, Nagamohr’s Mexican subsidiary, which was originally conceived in 2015 (See video below). Two major customers suggested the company should build an additional facility to be a local supplier to North America. It started the company there two years ago. Patrick says the biggest challenge of working in Mexico is the paperwork. He says there is significant employee turnover there but also many good workers. He also says he hasn’t encountered any corruption there so far. He says the Spanish language and Western culture was one of the driving factors behind building a plant in Mexico rather than in Asia. (21:55)

Patrick says business slowed for just a few months due to coronavirus. He says demand for automotive parts is at its peak during September and October, after which it will be easier to see where the company will be in the future. (25:50)

Patrick says that 99% Nagamohr’s work is automotive. The company was hit hard by COVID-19, with a reduction of more than 70% for two months. Business has picked up somewhat in the last few month. (27:00)

Patrick talks about something new he learned recently. He says two weeks ago at the beach he saw someone riding a special bicycle on water. (27:45)

Question: Do you prefer to work early or to work late?

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The Manufacturing Rebound

By Lloyd Graff

I talk to a lot of folks in the machining trade every day, and the clear sense I am getting is that business is improving. The automotive segment is definitely firming. Auto related work has bounced back from the April, May, June, July doldrums. Demand has picked up, and car showrooms are extremely short of hot inventory. 

European and Japanese companies were also shut down, and the supply chains are strained. Guns and the medical sector are strengthening. 

We are seeing an uptick in the used machinery business. The auctioneers are surprised at how strong their sale prices are holding up. Inventory of late model Swiss-type and multi-axis CNC machines appears to be light.

On the macroeconomic front, the recent perverse behavior of stocks is being attributed by pundits to the surprising decrease in unemployment after PPP money ran out and extra layoff checks ended. Evidently some people did choose to return to work.

Small businesses, especially those travel-related and restaurants, have been severely hurt, but the wounded giant called the American Economy appears to be healing. The prospect of multiple viable vaccines being approved soon, while good for most people in business, is viewed by some speculators as negative for tech stocks like Apple and Amazon, which have continued to thrive despite the swooning economy. It appears that improving conditions are sell signs for the option trader gamblers. 

From my observation, the impending election does not seem like it will be a significant issue for the stock market, but it could be an issue small business people.

They should ask LeBron for advice. He seems to know all.


Do politics and NBA basketball mix well? 

Maybe the better question is does China own the NBA? Or perhaps the real question is does LeBron James play for the Los Angeles Lakers or Nike?

The three questions are tied together. LeBron signed a contract in 2019 easily worth a billion dollars with Nike, becoming its most valued endorser, though Michael Jordan trails him very closely.

The NBA also signed a $1.5 billion dollar contract last year with Tencent, the Chinese mega company, granting it the exclusive rights to broadcast all of the NBA games it chooses to air in China. The games are mainly watched by young people on their cell phones as they ride public transportation to work in the morning. 

The NBA has built academies in China to teach and promote the basketball. When Daryl Morey, the general manager of the Houston Rockets, had the audacity to tweet critically about communist China crushing the human rights demonstrations in Hong Kong, the Beijing Party leaders bristled. Then the NBA bosses cowered and tried to make nice.

LeBron, who probably sees himself as a potential president of the United States, and heir to Oprah and Martin Luther King Jr. in America, had a real dilemma. It was magnified when COVID-19 hit midway through the 2020 NBA season. The players were undecided about continuing to play, but LeBron had the NBA, Nike, China, and Black Lives Matter all looking at him to thread the needle. It was a time to prove himself to be politically skillful before he even stepped on the court again with Anthony Davis and the rest of the Lakers.

I watched LeBron play brilliantly Monday in the playoff series, ironically against Daryl Morey’s Houston Rockets. Black Lives Matter signage was everywhere in the Orlando bubble, where all of the games are being played and broadcast on TNT and Disney’s ESPN. Player uniforms displayed social and political messages, and a huge VOTE sign was prominently displayed during all broadcasts. 

It is a fascinating mishmash of sports, business, politics, and LeBron, who is proving himself to be the Confucius of America in 2020.

Question: Is your business rebounding?

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Juicing the Pickup Truck Market

By Lloyd Graff

The automotive world is churning these days. New cars are creeping out of the showrooms, but used cars are going bananas. CarMax stock has doubled since April. 

Yesterday’s announcement by Ford that CEO Jim Hackett is stepping down should come as little surprise after his 3-year tenure saw Ford’s stock plummet 39%. His predecessor, Mark Fields, lasted only 2 years. Ford’s big plus has always been its F-150 pickup, and it is reintroducing the Bronco, with 150,000 pre-sales to position itself against the Jeep Wrangler. Hackett was an outsider who was recruited from furniture maker Steelcase. His successor, Jim Farley, is a Ford veteran like Mark Fields. 

The pickup truck melee is getting more competitive with Elon Musk’s Cybertruck with its radical styling, now gearing up in Austin, Texas, which is also where Tesla’s new battery plant is being built. Musk has reported well over 500,000 pre-sales for the electric truck, priced at $39,000. As usual, he has taken an unorthodox approach to build the vehicle with stainless steel sheets, cut and laser welded, avoiding the cost of stamping out the body and doors with enormous expensive presses. Using lithium batteries is expensive, but making them in Austin in huge quantities will lower costs. The F-150 is cheaper in its base cost, but if we compare apples to apples for a bigger bed and 6-passenger capacity, the price edge goes to Tesla.

An interesting new entry into the electric pickup game is Lordstown Motors in Lordstown, Ohio. This is a start-up being funded by a money group from Wall Street. Who is really putting up the money is vague, but GM just tossed in $75 million and the company will be on the NASDAQ shortly. GM is also building a battery plant near the Lordstown, Ohio, plant, which it built in the 1960s to build the Chevy Caprice. Lordstown is famous for a strike in 1972, in which the UAW infamously turned out cars with torn upholstery in its guerrilla retaliation against the company. To me, Lordstown has always symbolized the downfall of American automotive companies and the stupidity of the UAW.

Will Lordstown Motors, which plans to build a plain vanilla electric pickup with a GM battery using a stealth group of investors, be able to compete with the sexy Cybertruck? It’s not a hand I would bet on.

Another player may be Rivian, which Ford invested in through its Lincoln division but has now walked away from. It is another stealth company, which supposedly got $700 million in backing from Amazon. If they ever really build a competitive electric pickup, they will be as far behind as a Volkswagen diesel.

Not to be forgotten is Nikola, which is planning to build a hydrogen powered pickup truck called “The Badger,” in a non-existent plant in Coolidge, Arizona. They claim to have 20,000 pre-sales, but everything about this company seems weird.

To me, the big question under the surface is do the real people who drive F-150s, Ram trucks, and Silverados really want an electric pickup truck? I know the US government is forcing electric vehicles on us because the sky is falling if we only get 30 miles per gallon from gasoline, but the market is telling us that electric cars, even Tesla’s, are not that useful in places like Chicago or Nashville or Frankfort, Kentucky. 

A hybrid makes more sense to me. The technology has been tested for decades and does not require a gazillion dollar charging station infrastructure. Did we all forget that the power plants to fuel the recharging stations run almost totally on fossil fuels in America? Same in China and Europe, and in those places they are still primarily coal-fueled.

I love Elon Musk for his entrepreneurial brilliance, but I still wonder if we have simply bought into the enchanting myth of electric vehicles.

Question: Do you think those who drive pickup trucks really want an electric pickup?

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Ep. 91 – Producing Automotive Parts in Brazil with Rogerio Salvatico

By Noah Graff

On this week’s episode we’re continuing our tour of the machining world outside the United States.

Today’s stop is Brazil, where I’m speaking with Rogerio Salvatico, Industrial Manager at Engemet, a major precision parts supplier for Tier 1 and Tier 2 Automotive in Sao Paolo, Brazil.

Scroll down to listen to the podcast. Or listen on your phone on Apple Podcasts and Google Podcasts.

Main Points

(3:00) Rogerio gives his background. He grew up in São Paulo, Brazil. During high school he attended a specialized school with technical classes in the afternoon. When he was 17 he started an apprenticeship at Mecano Fabril, a machining company producing automotive components. The first machine he learned on was a Haas SL10, which he says he immediately fell in love with. He says for him the idea of CNC machining parts for cars was fantastic. Mecano Fabril had 60 Wickman cam multi-spindle screw machines.

(4:20) Rogerio says that after high school he went to university to study engineering. Later he went to work for Engemet, a large automotive parts supplier, where after eight years he became engineering manager. 

(5:30) Rogerio says São Paulo has a lot of industry and technical schools. He says the city has a lot of opportunities for people to work in the machining industry because lot of automotive suppliers are located nearby. 

(6:30) Rogerio says Engemet is primarily an automotive supplier. It supplies parts for Tier 1 and Tier 2, both cars and trucks.

(6:50) Rogerio states that most of the parts Engemet makes are for domestic use, though the company has supplied some firms in Germany. He says Brazil has factories of most of the major car companies from around the world. He says most of the cars manufactured in Brazil are sold in Brazil.

(8:20) Rogerio talks about Embraer Brazil, a Brazilian owned company that is the third largest aircraft manufacturer in the world, behind only Boeing and Airbus. He says many regional jets in the United States are produced by Embraer, usually models with 100 seats or less. He says Boeing recently tried to merge with Embraer, but the merger was stalled by the COVID-19 pandemic. 

(10:20) Rogerio says that the salary of a machine operator in Brazil starts at around $500 a month, however this number is misleading because the current economic crisis has made the Brazilian reais plummet. He says when the currency is stable it is around 3 or 4 reais to the dollar. Recently the currency fell to 5 reais to the dollar and at one point it was around 6 to one dollar.

(12:20) Rogerio says that because of the falling Brazilian currency a lot of customers are asking domestic vendors to make parts that they were buying overseas in the past. He says this is a big opportunity for Brazilian manufacturing companies. However, current automotive parts volumes are at 40% of their average because of lower demand for cars during the pandemic. 

(15:00) Rogerio says there are a lot of machining companies in Brazil doing medical and dental implant components. He says there are also many companies machining components for the oil and mining sectors. 

(17:00) Rogerio shares that he hopes the Brazilian economy is going to improve before the end of the year. He says the country was optimistic the economy was going to have a good year at the beginning of 2020.  

(18:00) Rogerio says that it is pretty difficult to borrow money in Brazil. He says the country’s interest rates are very high, and it’s hard to buy capital equipment from abroad because used machine tool imports are taxed at 30 percent.

(20:20) Rogerio explains that it’s hard to start an automotive or aerospace parts supplier in Brazil because it takes so much capital, but he sees a lot of startups in the Dental and Medical sectors. 

(21:45) Rogerio says that Brazil’s president Balsonaro has been called the country’s version of Trump because he is pro free markets and often makes impulsive remarks. (Watch the clip below).


(23:15) Rogerio says that people in Brazil’s favelas (ghettos) sometimes work in machining shops, but it isn’t easy for them to get those jobs.

(25:15) Rogerio likes that people in Brazil are social and enjoy life. He says that families there spend a lot time together and he loves the country’s food and music. He says when the economy is good Brazilians are content, but when the economy has problems a lot of people want to leave. He says he would like to move to a smaller city in the country because it’s peaceful and without much crime, while still having a lot of industry.

(27:00) Rogerio says that Brazil is the seventh largest economy in the world. He says the country has a lot of opportunities to prosper in the future because of its manufacturing, oil, mining, and finance industries. However it’s still developing, so life there isn’t always easy.

Question: Is Brazil a place you would like to visit?

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