Category Archives: Business

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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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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Ep.127 – Creating a Successful Diverse Workforce, with Aneesa Muthana (Part 2)

By Noah Graff

Pioneer Service employs a diverse group of people—varying age groups and genders, African Americans, Latinos, and a few old white guys, too. Twelve of its 31-person workforce are women. The diversity provides the company with a great pool of talent and creates a special work environment.

Today’s podcast is part two of my interview with Aneesa Muthana, co-owner and president of Pioneer Service Inc., a thriving Swiss machine shop in Addison, Illinois.

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

Aneesa says that even with such a unique, diverse workplace, her company still deals with the problem of its people forming cliques, which can hurt their ability to work together.

Like in every organization, cliques emerge based on variables such as cultural backgrounds, job types, and seniority. Aneesa copes with this problem by demonstrating to her employees that she has equal respect for everyone. 

Aneesa Muthana of Pioneer Service Inc.

She likes to spend time with employees on the shop floor, devoting the same amount of her time to everyone—people of all job types, seniority, etc. She passes out water bottles on a hot days. She learns about people’s lives. She wants to show them that she cares about them and they aren’t just a number. She even tries to reveal some of her own vulnerability.

Aneesa says she recognizes that people naturally gravitate to others with similar jobs or backgrounds. What she wants is for employees to listen to each other with respect and cooperate when they come together in the huddle.  

She says her best employees almost always come from referrals by current or past employees, because employees who have already been successful at the company usually bring in people whose personalities and abilities fit with the company’s culture. 

I asked Aneesa if she had any advice for a machining company that was having trouble finding good people—a company unlike hers that didn’t have a base of strong employees who could bring in others like themselves.

She chuckled and suggested the company should join the Precision Machined Products Association (PMPA), of which she soon will be president. She says that peers in the organization guided her to modernize her shop in 2012 when the company had lost 90 percent of its business. She marveled at the unique cooperation the organization fosters amongst its members, who sometimes are direct competitors. 

Companies are capable of great things when people respect each other in the huddle.

Question: Do you wish your workplace were more diverse?

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Ep. 126 – Creating a Successful Diverse Workforce, with Aneesa Muthana (Part 1)

By Noah Graff

Several months ago, I called Pioneer Service Inc. when I noticed online they had a used Doosan for sale. The woman who answered the phone beamed with enthusiasm. She told me that she couldn’t wait to come to work every day because of how much she loved her job and the company she worked for.

So, for our current season about how machining companies find good employees, I knew I needed to interview Aneesa Muthana, a favorite past guest on the podcast, and the co-owner and president of Pioneer Service Inc. What is Aneesa’s secret? What is in the Kool-Aid she is passing out to employees on the shop floor that gives them such passion for their jobs?

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

Pioneer Service is a Swiss machining company in Addison, Illinois, established in 1990 by Aneesa’s uncle. Aneesa joined her uncle as a partner in 1993, on the condition that she would assume full control of the operations of the company. When she came to the company it was an old school screw machine shop filled with Brown & Sharpes. In the last seven years the company has replaced its Brownies with a fleet of high-tech CNC turning equipment—mainly Star CNC Swiss lathes and a few turning centers. Aneesa says she particularly likes the output and reliability of the Stars. The company makes parts for many sectors such as medical, aerospace, biotech, and electric vehicles such as TESLA.

Aneesa grew up working at M & M Quality Grinding, a centerless grinding company her parents started. She says that at 11 years old, while cleaning tanks on the shop floor, she fell in love with the production business. Yet despite making a very good living at her family’s company, she left her job at age 23 when she felt she could could no longer progress in her career there. 

When the Covid-19 crises hit in 2020, Aneesa was faced with the dilemma of whether to furlough employees when parts orders were put on hold. Despite some questioning from her management team, she chose to keep producing parts at current quantities, rather than furlough employees or cut overtime. She didn’t want to create instability in her 30-person workforce, and she anticipated correctly that orders would eventually resume. 

Like many machining companies in 2021 Pioneer Service is having a great year, but despite having held onto her employees during the crises Aneesa says she is always searching for new good people and always has to try hard to keep the ones the company currently has.

She finds some new employees on LinkedIn but says the best ones usually are referrals from current or former employees. Pioneer Service pays competitive wages, starting at $17 per hour, and Aneesa says she is committed to creating a company culture where employees feel respected and valued, so it sometimes surprises her when employees are enticed to leave by competitors who offer very modest pay raises or perks. 

Aneesa says sometimes applicants with experience seem to check all the right boxes for a position, but if she senses they will not treat coworkers well she will not hire them. 

She says she is committed to having all her employees feel like their voices are being heard and that they belong. Half of Pioneer Service’s employees are women, and the company also employs some African Americans, a long underrepresented group in the machining industry. A workplace where people feel comfortable and accepted is vital to maintain such a diverse group.

Aneesa has recently become a payed professional speaker, and often she is asked to speak on behalf of women in manufacturing. I asked her if she gets tired playing the role of “the woman advocating for women in manufacturing.” 

She says she likes to talk about women in manufacturing to empower them. She wants to educate and inspire women leaders to participate in male dominated industries. Also, inspiring women does a service to society and the economy because it brings more quality people into the workforce. 

Aneesa also wants expose other groups besides women to opportunities in manufacturing such as young people or people in the inner-city. She says to be successful in a profession people need to feel like they belong, so it is up to business owners and leaders to make people feel that way.

She tells audiences that although machining is a male dominated industry, she hangs with the guys, and they’re not monsters. She says women can’t portray men as villains and then expect them to accept them. She says it’s good for people to talk about their pain, but everyone, no matter what background, has gone through pain, so it’s important not to feel like a victim and blame others.

Question: Did your company keep all its people during the pandemic? Why?

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Ep. 125 – Hiring Ex-Felons, with Kathryn Shibelski

By Noah Graff

On today’s podcast I interviewed Kathryn Shibelski. Kathryn is a second chance hiring advocate. Her firm, KES HR Consulting, works with companies who are considering hiring incarcerated or formerly incarcerated people. The job candidates have often been convicted for drug offenses, white collar crimes, sex crimes, and even murder. 

Obviously, the idea of hiring people with criminal records could seem quite risky for a number of reasons, but according to Kathryn, second chance hires can thrive in the right work environment and even surpass the performance of employees with no criminal background.

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


Main Points


Strengths of Formerly Incarcerated People

In various areas around the United States there are programs in prisons that train inmates in trades such as machining. 

Kathryn says formerly incarcerated people are often the most devoted, loyal employees. One reason for this is their gratitude for the opportunity just to have a job. Many ex-felons have few options for employment, so its extra important for them to hold onto their jobs, both for supporting themselves and to fulfill parole obligations. 

Also, formerly incarcerated people often come into jobs with a unique set of skills. In prison people are forced to be resourceful. They have to solve daily practical problems using limited resources that people on the outside take for granted.

 

Other Reasons for Second Chance Hiring

Companies who employ second chance hires can receive tax breaks through the work opportunity tax credit. Also, Federal bonding programs protect employers against losses caused by the fraudulent or dishonest acts of at-risk bonded employees.

Finally, Kathryn encourages companies to hire second chance employees because it helps communities end a cycle of repeat offenses that often occur when people are released from prison.

 

Second Chance Hiring Obstacles

One of Kathryn’s main services is helping companies with on-boarding second chance hires.

Often formerly incarcerated people lack resources that many of us take for granted, such as a bank account, transportation to get to work, and a decent place to live. Companies who hire them have to be ready to help their new employees cope with these challenges.

One of the greatest challenges for companies to successfully hire second chance employees is getting their current workforce to buy in. Kathryn is a proponent of employers keeping an open mind to people with all types of criminal backgrounds, but she says that every company needs to choose for themselves which candidates they feel comfortable working with. Everyone at a company has to be on board for second chance hiring, not just the top managers. Often at least one individual at a company has had a bad past experience with a certain type of offender, and this may cause it to rule out many candidates immediately.

Another criterion companies need to consider is how long a candidate was incarcerated. People incarcerated for a decade or more often become institutionalized, making them prone to emotional issues.

Kathryn admitted to me that even she has her own personal difficulties regarding certain types of offenders, but she still firmly believes that everyone deserves a second chance to turn their lives around. 

When reasoning with people who are resistant to second chance hiring, Kathryn suggests to them to think about their own friends or relatives who have made past mistakes or had poor luck navigating the U.S. criminal system. Have they made it back successfully?

To get in touch with Kathryn and learn more about her services, the best way is to go to her LinkedIn profile: https://www.linkedin.com/in/kathrynshibelski/.

Question: Would you consider hiring an ex-felon?

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Best of Swarfcast: Ep. 75 – Using Blockchain in Manufacturing with Jim Regenor

By Noah Graff

Today’s guest on the podcast is Jim Regenor, founder of VeriTX, a company which helps clients dramatically reduce lead times and increases readiness for military and airline customers with blockchain technology.

Scroll down to listen to the podcast.

With today’s 3-D printing technology parts can be produced on site so clients don’t need to wait for products to be sent by land or sea. All that needs to be sent is the digital information for how to produce the parts on site. Blockchain insures the digital information is correct.

Main Points

(3:30) Jim gives background on his company Veritx which he established in August of 2019. He characterizes the company’s product as “a digital parts catalog for regulated industries that reduces long lead times and increases readiness for military and airline customers.”

(4:35) Jim talks about a proof of concept with the Department of Defense where blockchain could reduce the lead time for an F-15 part from 265 days down to 6 hours from order to delivery. He says that the United States military still uses some aircraft from as far back as the 1950s, so being able to deliver spare parts efficiently can be difficult when many of the original aerospace suppliers have gone out of business.

Jim Regenor, founder of Veritx

(8:00) Jim gives his background. He spent 31 years as a pilot in the U.S. Air Force. He was on the Security Council for the Bush and Obama Administrations, and he also ran a large logistics operation, with 15 locations in 11 countries across three continents—many of them war zones. He said he was moving roughly 570,000 tons of cargo and about 2 million people a year, and found himself constantly needing spare parts.

(9:25) After he got out of the Air Force, Jim ran the military aftermarket division at a Tier 1 aerospace company called Moog Aircraft Group. The company had acquired a 3-D Printing business in Michigan and realized that 3-D printing would become an enabler for digital 4.0 schema and how industries would interact. This led him to world of blockchain.

(11:00) Jim says that 3-D printing coupled with blockchain enables what he calls the fourth modality of logistics. Instead of transporting physical parts by land or sea, digital information to make the parts is sent on the cloud. Then parts are manufactured on site with 3-D printing. Blockchain enables the information to be sent properly.

(14:10) Jim characterizes blockchain as a distributed ledger. He gives an example of several people in a room in which one person owes another person 10 dollars. Every person records that 10 dollars is owed in their ledgers. If the person who owes money tries to lie and says he only owes 9 dollars, the people in the room have records to prove he lying. This concept means that information can be sent through a decentralized transparent system and cannot be corrupted. All records are transparent so that there is a consensus. For blockchain applications, sometimes hundreds or thousands of computers keep the ledger. This can be used to establish value for cryptocurrencies such as Bitcoin, but it can also work well for other applications such as logistics because it enables people to track the entire lineage of an asset.

(17:20) Jim gives an example of Walmart using blockchain to track the supply chain of its lettuce from harvest to store shelves to combat the E. coli problem last year.

(19:00) Jim says that many companies are using blockchain right now and data can be tracked with user interfaces. He says for the supply chain for aerospace blockchain records the entire process, starting with the initial requirements being sent to a designer. Then each stage such as the design of a part, manufacturing, quality control, etc. is recorded individually. Everything is transparent and correct, insuring a good final product. If people realize there is a design flaw, it is easy to go back and find the mistake because each stage has been recorded with blockchain.

For more information about Veritx go to veritx.co or email Jim Regenor at jim@veritx.co.

Question: What’s your experience using blockchain?

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Best of Swarfcast – Ep. 85 – Kaizen Principles for Personal Growth with Darrell Sutherland

By Noah Graff

Note: The Swarfcast team is enjoying a short summer break this weekend. We’ll be back next week with a fresh blog. In the meantime, enjoy this great episode from 2020 on incorporating Kaizen principals into your daily life, with guest Darrell Sutherland. 

Today’s guest on the podcast is Darrell Sutherland, founder and owner of Dylan Aerospace in Auburn, Washington, a Tier 1 supplier for Boeing.

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

Darrell is also a professional mentor. He believes in using the Kaizen manufacturing principles for personal development as well as to improve a business. He believes in the power of mentorship so fervently that he spends over $100,000 a year on his own education.

Main Points

(3:40) Darrell talks about his personal transformation in the last decade or so. He says that for many years it was hard for him to just get out of bed because he wasn’t happy with his life, despite his success and running a business he loved.

(4:15) Darrell says growing up he looked awkward and was bullied a lot but thinks his difficult childhood prepared him for adversity later in life. He says when he was young he got into martial arts, which made him realize his passion for learning and more importantly teaching. He says he has a talent for deconstructing ideas and concepts and synthesizing them into individuals’ unique abilities. 

(5:40) Darrell grew up in Washington state. His grandfather and father worked for Boeing. His father told him to never be a “number” working for Boeing.

(8:00) Darrell says his manufacturing business had been very successful and made a lot of money for a long time before he underwent his personal transformation. He was even able to take more than 10 years off from day to day operations so he would have a lot of time to raise his kids. Yet he still wasn’t content with his life as he was addicted to food and alcohol, gaining over 100 pounds. He says November of 2009 he realized that he needed to change direction, starting with his health. Darrell says it took him many years and thousands of dollars to get the guidance he needed to fix his life. 

(11:00) Darrell in the end realized that the Kaizen principles he had embraced in his manufacturing business could be applied to his own personal life. Darrell summarizes the Kaizen principles as deciding what one wants to accomplish and then analyzing and breaking it down to its root. Then a person starts making small incremental changes at the lowest level he can, and then analyzes the result at that low level. The process makes a person more aware of certain facts about his own life that he hadn’t looked at before. Then when a person can understand the roots of what the real issues are, he can understand the challenges he needs to overcome. Darrell calls his philosophy “living Kaizen,” and in his new book he writes about its parallels with the Toyota Kaizen model. 

(14:30) Darrell says that reshoring of manufacturing is happening quickly and we as a country need to be prepared for it. He says despite Covid-19 this is probably one of the greatest times to be in manufacturing. He says that the pandemic demonstrated to everyone that the offshoring of U.S. manufacturing during the last few decades put the United States in a terrible position in the areas of infrastructure and national security. 

(15:40) Darrell says before Covid-19 he was already planning for 2020 to be a big year for his company. He says that several years ago his company started an initiative called I Love MFG. MFG stands for “Moving, Feeding, and Guarding” America and the world. 

(16:55) Darrell says that young people have no connection to manufacturing. He says they don’t think about their consumer items or modes transportation that are created through manufacturing. He says with reshoring upon us he is going to devote himself to opening young people’s minds to manufacturing.

(19:30) Darrell says that people often “stumble” into the world of manufacturing rather than set out to make it their trade. He says the question we need to ask is, how do we turn people into professional manufacturing people? He says we need to analyze how people are hardwired from birth and softwired by their community and then find the lane for them in the manufacturing space. He says he interviews his employees of all levels to help them figure out their talents and find the best way they can excel at his company.

(24:30) Darrell talks about how to find mentors and why they are so important. He says mentors are important to help us to find our weaknesses so we can fix them but to find the right mentor a person has to figure out what he wants. Darrell says to look on social media for mastermind groups to locate mentors, but he warns to watch out for life coaches who haven’t already achieved anything in their lives. 

Darrell says for more information about Living Kaizen people can go to his Website, darrellasutherland.com and lifeapprentaceship.com where he will be giving away a free PDF with an introduction to his program.

Question: Which self-help books have benefited you in the past?

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Davenport Dinosaurs

By Lloyd Graff

Is it really possible that the “thing,” the loud, relay operated, cam directed monstrosity called by the name of a sofa, is on the comeback trail? 

Is it possible that the “thing” named for a little burg in Connecticut that chews up brass like it’s a kosher hot dog, still has a following? 

Could it be possible that the stodgiest of plodding metal dinosaurs that uses so many cams for one job that it requires voluminous shelves to categorize them, still has a fan club? 

Folks, it may just be possible in this weird, finally unmasked, industrial moment, that the multi-spindle automatic screw machines, known by archaic names like Davenport, New Britain, Acme-Gridley, and Wickman are making one of the oddest comebacks since cauliflower became a “hot” vegetable.

William Simeon Davenport started the Davenport Machine Tool Company in 1894 to produce clock pinion turning machines, and then progressed into building the Davenport multi-spindle turning machines, which he patented in 1902. In his words, the development of a machine is a growth process: “My first machine had about 350 parts. Improvements and simplification added the other 1,500. A machine grows out of a crude infancy like a boy into manhood.”

It was also said that old Mr. Davenport could make anything but money, but his student, an ambitious mechanic named Earl Brinkman, who began working at Davenport in 1925, turned it into a money-making machine as he became the leader of the firm.

A Davenport dinosaur, headed to a customer

My father, Leonard Graff, met Brinkman when he was first starting out in business. He regaled me with Brinkman stories when I was a kid. He connected with Earl when he was taking a train to Chicago on his way to Milwaukee to see his father during World War II. My dad convinced him to come to his shop on a Sunday and introduced him to a farm boy turned mechanic named Paul Carlson, who had recently gone to work for my father’s nascent screw machine shop, which had six Davenports then.

Brinkman coached Paul for several hours and told my dad that he was gifted, and that he could place him at any shop in America. Paul soon ran the shop and stayed with my dad for 30 years. 

When Graff Pinkert moved into our new warehouse in Oak Forest in 1975, we had a celebration and Brinkman came back to speak as a featured guest. And now in 2021, that ancient machine, not much changed from the original design of Mr. Davenport and upgraded to the Model B version by Brinkman in the 1940s, is still productive, and still amazingly successful at whacking out 1/4″ and 1/2″ parts, tapped and deburred, 10 times faster than a Citizen or Star.

Today that awkward 5-spindle, ridiculous looking, 3,000 pound erector set is in demand to make fittings and car parts in Nashville, Shanghai, and Bangalore. They’re stupid noisy, so many people shroud them with fancy Noise Tamers, which cost more than the dinosaurs themselves. Some of the true aficionados like to run them without the Tamers so they can tune themselves into the machine’s rock and roll. 

The Davenport. Is it an amazing screw machine or a dumb couch? The New Britain is named for a sleepy Connecticut town. The Acme-Gridley was invented by George Gridley, who studied stenography in his spare time while he invented his brilliant but clunky multi-spindle warrior that helped win two World Wars.

These loud tyrannosauruses still bang out parts by the multimillions each month. To my amazement, after spending a lifetime listening to their Timkens, they are making another comeback.

When everybody believes an idea is dead, it may well be the time to buy.

Question: What is the oldest machine you use in your shop?

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Ep. 124 – Valuing Employees, with Scott Eighmy

By Noah Graff

Today’s show is the first episode in our new season about hiring and retaining good employees in machining companies.

Our guest is Scott Eighmy, co-owner and CEO of American Turned Products, a medium-sized precision machining company in Erie, Pennsylvania. Scott says his company is struggling like many manufacturing businesses right now to hire new good employees, so he needs to get the most out of the people he already has. He says small acts of recognition and making employees feel heard is key to maintaining a happy and productive workforce.

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


Key Takeaways From the Interview 

Background of American Turned Products

American Turned Products (ATP) employs a little under 100 people. It serves a variety of industries such as automotive, appliance, military, and hydraulics, primarily focusing on high volumes—jobs with quantities of hundreds of thousands or millions of parts. To produce the large quantities of precision turned parts the company has many EPIC CNC Hydromats and INDEX CNC multi-spindles.

The the city of Erie and its surrounding areas supply ATP with a population of around 250,000 as a source for employees. Erie has a long history of heavy industry, its educational system is solid, and the cost of living is relatively low. A person can purchase a nice house there for $120,000. 

Wages at ATP range from $12 per hour for new workers to $24+ on the higher end. Most of the hourly workers at the company start at the bottom and are trained in-house. 

Today’s Difficult Labor Market

Scott says the current tight labor market has been challenging for ATP. He says the precision machining business is hot right now, but potential workers don’t have enough incentive to get jobs while they can still receive the generous unemployment benefits brought about by the COVID-19 crisis. Scott says he hopes Pennsylvania will soon stop taking the government subsidies that fund the special unemployment benefits, as several other states have recently done. 

In typical times, ATP finds new employees by using temp agencies, but right now there are no temps available. The company also tries to find new employees using social media such as Facebook and LinkedIn, but that has also not yielded great results.

Culture of Employee Engagement

Scott says the millennial employees at ATP often ask why they have to do certain things, rather than simply accepting orders. The company tries to show them respect by allowing employees to ask questions in meetings and giving them straight answers. For instance, if management asks employees to prepare equipment to be sold, sometimes people ask why the company is selling it. Then managers do their best to explain why the change is necessary. 

ATP wants its hourly employees to understand the purpose of their work, so the company often sends them to visit customers. Also, when customers come to visit the company, shop employees give them the tour, rather than the managers. Scott says, “The more employees understand what is important to the customer, the better the product the customer receives.”

Making Employees Feel Valued

Scott says ATP’s management philosophy is to show its people it respects and values them. It’s not uncommon for the company to have small celebrations, like a pizza party for a team that succeeds in setting up a challenging part.

He also says the company demonstrates how much it cares about its people by constantly emphasizing the importance of safety. Management has daily meetings with employees on every shift, and the first topic they go over are safety issues in the plant. In addition to preventing accidents, Scott says it demonstrates to employees that the company cares about their wellbeing.

He says if you demonstrate to people that you care and show optimism, people will be loyal and do good work.

Question: Do people at your company communicate well?

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Our Hiring Mess

By Lloyd Graff

A good client of mine is trying to buy a company to get the employees. The firm is not making money, but he is so desperate to hire workers near his main operation in Ohio that he is willing to overlook the financials because he believes acquiring the firm will enable him to bring in his own lucrative work to make the transaction pay. 

How did the machining world get into this pickle? It is not new, but rarely has it been this acute.

I have studied it as a participant in the industry with skilled and semi-skilled employees, and as an observer. I am curious if you agree with my opinion and observations.

The industry has grown up over the last 100 plus years in America, first under the leadership of people with Western European ancestry. Then it evolved over time to include a lot of Eastern European ethnicities. These owners and managers have tended to attract employees with similar backgrounds. Some companies became almost like small tribes and families through the years, reflecting their ownership. They often were passed down from generation to generation, and fathers, sons, and cousins often took on similar jobs over decades. 

Unique skills developed. The best companies tended to prosper and go on for generations. It was an effective system as long as enough workers, primarily male, landed in the industry.

The financial system, often local banks, provided capital for growth. American businesses liked doing business with folks who looked like their managers, and it became increasingly useful to work with the small and medium-sized businesses, which provided very palpable skills and economically convenient pricing. Then one day, Big Business decided price was everything and started to send work out of America, primarily to Asia.

Everything started to get more complicated for American machining firms. Immigration of Europeans to the US slowed dramatically. College education became more available with loan programs. It also became more desirable with great numbers of white collar jobs available and diminishing opportunities in machining as Big Business increasingly looked to China for cheaper pricing. The US government encouraged offshoring during the Nixon-Kissinger days to develop a counterforce to a bellicose Russia. 

China became a highly valued trading partner for the United States.  Machining businesses continued to bump along, protected by defense and aerospace spending and the ingenuity of generational firms, which still had funding from domestic lenders.

Eventually recessions, merging companies, and lack of capital devoted to training and recruiting sapped the traditional family businesses. Wages were not raised enough to bring in the numbers of young people needed to keep businesses healthy long-term. Hispanic males gradually replaced the European tribes to some degree in larger cities.

One thing that stands out is the small number of women attracted to work on the factory floor. Machining does not appear to excite women as a career, though there is no premium on physical strength in today’s machining environment. 

The field also seems to have little appeal in the African American community, male or female. The machining industry and the tribes within it are not reaching out to them, and when they have in the past the reception has been tepid.

Another major factor is the rise of Amazon, Costco, and other major firms, which have raised their wage structure and provide health insurance benefits. They have effectively changed the traditional minimum wage and made it obsolete. They have also eliminated the rationale for Unions, which we saw in the recent Birmingham election. Only in government situations, where the opponent has little incentive to fight them, have Unions managed to thrive. 

Graff Pinkert customers who can’t hire, moan that clients like Caterpillar allow them no pricing power, yet they buy CNC machines and robots, so they clearly have both capital and pricing power. 

If there were no options to hire, we would have no customers, yet we are very busy at Graff Pinkert right now. Machining companies are managing to deal with the people problem. 

How are you approaching it today?

Question: How do you usually find new employees?

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