Category Archives: Business

The Auction Deal

By Lloyd Graff

Today, I thought it was time to write something that I actually know something about.

Why are some of the big players in the machining business selling out or being auctioned off these days?

One of the biggest screw machine sales in years is coming up in November at Triumph Manufacturing in Tempe, Arizona, just outside of Phoenix. Triumph’s owner Chris Mueller went into business in the late 1960s after coming to America from Switzerland as a Tornos employee. Mueller built Triumph into a strong player in long run parts and has been running the company with his daughter in recent years. He has had many ups and downs over the years but always managed to survive because of his technical acumen and resourcefulness. He was on the verge of selling to numerous operating groups but never seemed to get a deal that worked for all parties.

A person who is familiar with Mueller and Triumph Manufacturing told me he thinks Mueller felt an American was probably incapable of running his many Swiss and German screw machines effectively. I have also heard that he preferred Hilco as an auction firm because he liked their prominence in Europe. I believe that Triumph would have sold for quite a bit more money several years ago, but Mueller always believed he would turn the company around—a trap many entrepreneurial owners fall into.

Finally, a few months ago, he made the decision to let go and allow the auction process to proceed. Competitors quickly grabbed all the major contracts. Auction groups formed almost overnight to bid on the project. I chose not to be involved in the bidding because I saw the market weakening in Europe for the Swiss and German machines. With a falling Euro, I did not have the stomach for the risk, but many others did.

From a screw machine dealer’s viewpoint the seventeen 20mm 8-spindle Tornos machines are the key element in the sale. If they go at retail prices the sale will be a triumph. If not, c’est la vie. I wish them well.

Questions:

Do you like buying at Auctions?

Do you feel you are a more disciplined buyer bidding online?

Share this post

Swarfcast Ep. 55 – Wes Szpondowski, Screw Machine Guy

By Noah Graff

Today’s podcast is part 1 of a 2 part interview we did with Wes Szpondowski, plant manager at Wyandotte industries, a 60-year-old screw machine shop in Wyandotte, Michigan, founded by his grandfather.

Scroll down to listen to the podcast.

Wes gave me the inside scoop of what it takes to run a high production shop floor. We talked about getting the most out of employees, updating equipment, and his mission to NOT waste the company’s money.

Main Points of the Interview

(3:05) Wes gives history of Wyandotte industries. His grandfather made parts on Acme-Gridley screw machines for the custom fastener market—mainly various types of nuts. The company’s original machines were the Acme Model G machines that were taken from a junk yard.

(5:25) Wes talks about the evolution of Acme multi-spindles that Wyandotte used over the years. The company graduated from Model G to Model R and then to Models RA and RB, which people joked was the Cadillac of Acme.

(6:30) Wes talks about how Acmes were designed to run forever.

(10:50) Wes talks about taking over Davenport screw machine work from one of Wyandotte’s suppliers. He says it is his harder for him to find people with skills to run Davenports than to run Acmes, but he likes the speed of Davenports and likes that attachments for Davenports are more affordable than those for Acmes.

(13:35-20:45) Wes compares the challenges of making fasteners to those of more complex parts Wyandotte produces. He classifies the complex parts as “screw machine parts” such as pins, fittings and bushings. He talks about how Wyandotte’s employees have developed their skills over time, using more attachments and limiting the need for second ops.

(20:50-22:30) Wes talks about the company’s gravitation to using Mazak CNC lathes.

(22:35) Wes talks about when he bought Wyandotte’s first Mazak, fall of 2009.

(23:55) Wes talks about how he saved several hundred dollars on airfare when he traveled to New Jersey to buy the company’s first used Mazak. He says that no matter how rich a company may seem, being cost conscious with a company’s money is the only essential and ethical way to run a business.

Question: Do you think it is nuts to run 60-year-old Acmes?

Share this post

Talking to Strangers

By Noah Graff

Not long ago our company made a deal to purchase a significant amount of machinery outside the United States. The deal seemed like a great opportunity, but we thought the sensible thing would be to visit the seller before making any purchase because he was someone who we had never met before.

I traveled a long way to meet him, and we spent several days together looking at machines. He brought his wife along with him for the whole trip. We had dinners together during which they told me about their children. His wife repeatedly acted like a concerned mother when she noticed my runny nose. They seemed like decent people, and they gave us a good price so we made a significant deposit on some machines. In the end, things did not go as planned. The company attempted to pocket the deposit and did not send any machines.

We felt dumb. We asked ourselves, how could we not have realized we were being conned?

I recently finished listening to Malcolm Gladwell’s new book, Talking to Strangers, which sheds some light on our experience. The thesis of Talking to Strangers is that the majority of people are incapable of judging the true character of others based solely on “getting to know” them. The book contains many powerful examples of people who seemed genuine but then turned out to be liars, along with other examples of people who seemed suspicious but turned out to be innocent.

Talking to Strangers - What We Should Know About The People We Don’t Know, by Malcolm Gladwell.Early in the book, Gladwell tells a story about multiple double agents in the CIA who spied for Cuba for many years before being uncovered. The agents who were supposed to be spying on Cuba were in actuality spies for Cuba! U.S. Intelligence agents who were supposed to have been “experts” on judging the honesty of other people were made to look like complete fools.

Gladwell discusses another example of flawed human character assessment in a passage about judges in New York whose job is to choose which suspects should be released on bail and who is too risky to let out of custody. Several elite computer scientists, a Harvard economist and a bail expert from the University of Chicago created a computer program to research the ability of the judges for discerning which suspects should be released. From 2008 to 2013 550,000 defendants were brought for arraignment to the group of New York judges, and the judges released just over 400,000.

The researchers built an artificial intelligence system and fed it the same information that had been given the judges in the 550,000 arraignment cases, mainly the defendant’s age and criminal record. The artificial intelligence system chose its own 400,000 defendants to be released over that time period to see which 400,000 releasees committed the fewest crimes on bail and made their trial date. The 400,000 released by the computer were 25% less likely to commit a crime than those chosen by the judges. The computer program only had the defendant’s age and rap sheet to make its judgment, while the judges also got to hear the arguments from the lawyers and look the defendants in the eye.

Gladwell also writes about Neville Chamberlain misjudging Hitler after meeting him several times. He writes about the people who misjudged Bernie Madoff and sex offenders such as Jerry Sandusky and Larry Nassar.

Gladwell says that the usual inclination of people is to “default to truth.” People want to trust other people because that trust is what makes society function. If the default opinion of a youth sports team coach is that they are a pedophile nobody would let their child play on a team, and nobody would take a job as a coach.

If my default opinion of every person selling machines is they are trying to cheat me, I will never be able to make any deals. Business must go on, and life goes on because I know most people are relatively honest. Going forward I will try to keep my guard up, and I won’t put as much stock into looking people in the eye.

Questions:

Do you trust most people you do business with?

Have you ever been conned?

Share this post

Swarfcast Ep. 54 – E.J. Daigle on Technical Education That Works

By Noah Graff

In today’s podcast we discuss what a person can get for $20,000 per year at a highly regarded technical college. Our guest is E.J. Daigle, Dean of Robotics and Manufacturing at Dunwoody College of Technology in Minneapolis, Minnesota. He is also lead faculty member of the school’s top ranked robotic snow plow team. Dunwoody College offers associate and bachelor degrees in a variety of fields, such as construction sciences, engineering, robotics, architecture, and machining.

Scroll down to listen to the podcast.

E.J. explicitly talks about how Dunwoody emphasizes hands-on learning. He says that Dunwoody students in the machining department receive 15 hours of lab time per week working on equipment.Main Points of the Interview

(2:55) E.J. gives the history of Dunwoody College, which was started in 1914 in Minnesota by William Hood Dunwoody, an entrepreneur who made his fortune as a silent partner in the Washburn Crosby company, which later became General Mills.

(5:45) E.J. describes Dunwoody as a polytechnic college that offers certificates, as well as associates and bachelors degrees. He says that the school believes in a “learn by doing approach,” and that it is not uncommon for Dunwoody students to be in lab (working on equipment) 8 to 15 hours per week.

(7:53) E.J. tells his personal story of going into the U.S. Navy out of high school, where he worked on nuclear submarines for 10 years. Before his first submarine was commissioned, E.J. worked in the shipyards alongside the people constructing the vessel, which he says gave him a good view into a variety of manufacturing processes.

(9:50) E.J. draws parallels between the hands-on learning style he experienced in the Navy to that at Dunwoody College.

(13:50) E.J. talks about how Dunwoody approaches the diverse previous academic backgrounds of its students, particularly in math.

(16:05) E.J. talks about the success of a significant portion of older students at Dunwoody who are former laid off autoworkers

(16:55) E.J. says Dunwoody graduates around 20 students a year from its Machine Tool Program and the school generally receives 300 requests to hire them.

(20:10) E.J. cites studies which say in the next 10 years the manufacturing industry will be 2 million workers short.

(23:00) E.J. says that a 2-year associate degree costs $40,000 in tuition. He says that last year’s Machine Tool class had a 100 percent job placement. He also says it is not uncommon for a third of the students in the Machine Tool Program to quit after only one year because they find jobs they like before graduating.

(27:40) E.J. says that Dunwoody encourages its associate degree graduates to continue their education with the school’s programs for entrepreneurship, management, or engineering. Often students work and go to school part-time to further their education.

(32:00) E.J. says that too many kids pick colleges based on the wrong criteria, rather than choosing based on what they are interested in doing after graduation.

(35:35) E.J. talks enthusiastically about his experience as the lead faculty member of Dunwoody’s autonomous robotic snow plow team, which is ranked number one in the world.

(39:00) E.J. discusses some of the extraordinary projects that Dunwoody graduates have worked on, such as making components for the Mars Rover, and components that went into the drills that saved the Chilean miners.

Question: Is higher education worth the money?

Share this post

Swarfcast Ep. 53 – Chris Manning on the Beauty of Bar Loaders

By Noah Graff

On today’s podcast we’re talking about bar loaders for multi-spindle screw machines. Our guest is Chris Manning. Chris has been installing and repairing integrated bar loaders around the world for 20 years, primarily Cucchi bar loaders. Integrated loaders, usually those made by Cucchi or IEMCA, replace the traditional stock reels on multi-spindles.

Scroll down to listen to the podcast.

Bar loaders may sound like a boring topic, but they are actually quite expensive and complex equipment. One integrated loader can enable a single machinist to run three machines at a time.

Main Points of the Interview

(3:10-8:05) Chris talks about his career path. He started as a chipper at a machine shop in Ohio in the ‘80s. Eventually he graduated to running and setting up cam multi-spindles. In the late ’90s he went to work at Gosiger, a machine tool distributor in Dayton, Ohio, where he sold Euroturn multi-spindles and Cucchi bar loaders. Later, he worked with Luca Lanzetta who took over distributing Cucchi. Since then he has worked for various other machine tool firms and started his own company Bar Loader Services.

(10:10-10:45) Chris explains that integrated loaders are best suited for long parts such as shafts and typically cost around $125,000.

(11:42-13:50) Chris discusses the mechanical process of integrated bar loaders. He says that if they are properly implemented in a shop, a Cucchi or IEMCA bar loader can enable one person to run three multi-spindles at a time.

(15:20) Chris explains the differences between Cucchi loaders and IEMCA loaders. He says the fingers on Cucchi loaders enable it to absorb vibration well and that they are far superior at running hex stock. He says he prefers IEMCA loaders for running very small diameters, 1/8” or smaller.

(20:10-21:30) Chris talks about the main technical problems he encounters in the field when bar loaders are poorly maintained.

(21:30-22:25) Chris speaks highly about the new MBL bar loaders produced by INDEX. He says they seem like a cross breed between IEMCA and Cucchi, taking the best characteristics of each.

(22:34) Chris says he is seeing more and more shops in the United States replacing multi-spindles with single spindle CNCs and CNC turning centers.

(26:45-29:05) Chris discusses the process of replacing a stock reel on a multi-spindle with an integrated loader. He says it is harder to replace a bar loader with a stock reel than to replace a stock reel with a bar loader.

Question: Do businesses need fewer people today?

Share this post

Swarfcast Ep. 51 – Physical Therapist Doug Conroy on Protecting Your Body at Work

By Noah Graff

On today’s podcast I interview Dr. Doug Conroy of Conroy Orthopedic & Sports Physical Therapy. Doug has been treating injured folks for decades, including me as I rehab my left Achilles tendon. Our interview focuses on the negative effects a workplace environment can have on the human body.

Scroll down to listen to the podcast

Doug told me that in the past, workplace health risks were mostly associated with accidents in industrial settings. However, he says that many of today’s experts consider office jobs with constant sitting as possibly more dangerous to workers’ health, going as far as to characterize sitting as “the new smoking.”

Main points of the interview 

(2:55) Doug explains his expertise in the field of orthopedic physical therapy.

(5:18) Doug explains that the association of workplace health risks with an industrial setting is changing. Arguably, the largest threat to the health of the working population is prolonged sitting, which he characterizes as “the new smoking.”

(11:00 – 16:00) Doug recommends workers change position after 20 to 30 minutes, regardless of their posture. He says that it is generally healthier to be a mechanic who moves around than to work at a desk.

(16:00) Doug explains how many people do not seek medical advice or physical therapy soon enough. As a result, it can take twice as long to reverse the bad habits their bodies have become accustomed to.

(17:00) Doug describes various scenarios where surgery should be performed or abstained from. He cites medical studies which show that many doctors recommend unnecessary surgeries.

(20:10) Doug talks about the use of prescription pain killers during recovery. He says they were overprescribed in the past, but the trend is changing.

(24:10) Doug talks about the improvements in knee, hip, and other joint replacement surgeries. In the past, joint replacements made sense only for older people because of the need to replace them every 10 to 15 years. With new advancements, the components that go into joint replacements are significantly improved so that more young people are receiving replacements.

(30:50) Doug discusses various sports injuries, such as damaged Achilles tendons, ACLs, ulnar collateral ligaments and thumb injuries. He compares the severity of those injuries and examines new developments in treatment.

(35:25) Doug reminds listeners to pay attention to what their bodies are telling them. He also says people need to share more information with doctors and physical therapists, in order to better their chance for recovery.

Question: Would you rather work in the shop or in the office?

Share this post

Condo or College?

For most of my life I have made my good living by buying and selling physical things.  My line of credit with my bank is still directly related to the financial institution’s belief in the value of inventory, machines, and cash on hand in relation to money owed to them.

This is the traditional bible of finance.  Our statistical yardsticks of wealth, both individually and as a country, are based on measurable, identifiable things.  But increasingly I am doubting a lot of these old rubrics which the college Economics texts are based on.

I am not the only one who is questioning the ancient axioms.

About a week ago I heard one of the chief decision makers at BlackRock, one of Wall Street’s largest money managers, announce that he and BlackRock have been wrong in predicting that interest rates and inflation had to go up because unemployment was at a record low and wages were rising.  He said the old playbook was wrong, and they were throwing it away.

The chief investment guru of PIMCO, who has had an awful time betting on higher interest rates, took the blame for his terrible year a couple of days ago, but he is staying with the strategy that placed him in the lowest 7% of money managers.  He bet on rising mortgage rates.

This is not an idle academic argument.  I think it is important for the machining world for several reasons.

The people in our world make stuff for people who want stuff.  We use machines and steel and oil.  We employ people and use physical space and ship goods to customers.

What if stuff, things, physically measurable items are gradually becoming less important each day?

Mortgage rates are dropping like a stone, currently, as the 10-year U.S. Treasury interest rate hovers around 1.5%.  Yet there is no rush by young people to buy homes or condos.  Renting is popular today, not buying.  One big reason for that is that young people have big college debts they are paying off monthly.  They have consciously, or unconsciously, made the deduction that education is more important to them than home ownership.  Whether this will prove to be a good or bad economic gamble, long term, is an unknown, but it is affecting the purchase of real estate, and I expect this trend to continue.

I think we are seeing the same choices in vehicles.  Young people are investing in day care and gym memberships and restaurants rather than a Harley or a convertible.  For city people, Uber, a bicycle, or the subway are limiting car buying.  This doesn’t mean that people are poorer today because they do not own a car.  They are making different choices.

People are also veering into different spending choices in food and vacations.  We are seeing more folks opt for restaurant food or delivered menus.  People are spending on travel experiences rather than buying a cabin at a lake in Northern Michigan or Wisconsin.

Warren Buffett recently admitted he made one of his worst mistakes by buying Heinz and its tired old brands.  Same with Kraft and Campbell’s.  Tired old brands are not selling.  Panera and plant-based meat are working.

I’ve been bouncing around in this article, but the theme running through it is that the bankers and investors who have followed the ancient rules are losing.  The manufacturers who have done well making parts for home faucets and sedans are beginning to fade.  Real value lies in intellectual capital, but it can also evaporate quickly.  The numbers that bounce the markets around like yo-yos are obsolete.  GDP does not measure air quality, creativity, or life expectancy.  Employment does not measure automation improvements.  The markets are volatile because people look at conflicting numbers.  And the numbers they look at are yesterday’s.

Question: Is college a better investment than a house?

Share this post

Swarfcast Ep. 50 – Robots, Vaporizers and Transfer Machines

By Lloyd and Noah Graff

For the fiftieth episode of Swarfcast we are playing clips from some of our favorite past podcasts.

Scroll Down to Listen to the Podcast

Highlights include:

(3:06) From episode 1, Lloyd talks about his decision to go into the family machinery business. He also talks about his working relationship with his father and his father’s cousin Aaron Pinkert.

(7:37) From episode 15, George Breiwa, founder of DynoVap, talks about his proprietary vaporizer that does not rely on an external electrical source. He discusses manufacturing his product using CNC Swiss screw machines.

(11:10) From episode 10, John Griner, owner of Griner Engineering, discusses his company’s drug testing policy.

(13:50) From episode 18, Jerry Levine, former executive at Amoco, gives his take on global warming, saying the earth’s environment is not in an age of crisis as many scientists believe.

(17:00) From episode 5, Esben Østergaard, founder of Universal Robot, discusses the role of collaborative robots in the future of manufacturing. He says that in today’s economy there is a need for robots that are easy to redeploy for constantly changing short runs.

(20:25) From episode 37, Brent Robertson of Fathom gives Lloyd and Noah insight on how they can find purpose running their machine tool business and media business.

(23:53) From episode 47, business writer, Bo Burlingham discusses the keys for business owners to successfully exit their businesses.

(26:47) From Episode 43, Bruno Schmitter, owner of Hydromat USA, discusses his upbringing in Switzerland and the early days of selling Hydromat rotary transfer machines in the United States.

Question: Who would you like to hear interviewed in a future Swarfcast?

Share this post

Swarfcast Ep. 49 – Sebastien Schmitt of Staubli on Robotics in Diverse Fields

By Lloyd and Noah Graff

On today’s podcast we interview Sebastien Schmitt, North American Robotics Division Manager of Stäubli, a prominent robot producer from Switzerland. Sebastien explains how Stäubli focuses on building robots to help produce smaller automative components for car interiors and parts under the hood rather than assembling large car bodies like some of its competitors.

Scroll down to listen to the podcast.

Sebastien also discusses Stäubli’s TX2 Robot, a model which can be used in a collaborative or a standard industrial mode, plus the importance of working with robot integrators who are specialized in their specific fields in order to get the most out of robots.

Highlights from the podcast include:

(2:44) Sebastien Schmitt discusses the history of Stäubli since the company’s inception in 1892 in Switzerland as a producer of textile machines. Later Stäubli got into the connector business, and in 1980s it entered the robotics field.

(6:10) Sebastien discusses the specialty areas for Stäubli robots. He says that 50 percent of industrial robots are utilized by the automotive sector. Stäubli focuses on the production of smaller automotive components such as car interiors and parts under the hood. Other robotics companies produce a lot of larger robots for welding and assembling car bodies.

(7:37) Sebastien discusses Stäubli’s significance in automating industries such as pharmaceuticals, life sciences and medical devices.

(13:00-18:30) Sebastien discusses the trend of collaborative robots. Stäubli’s TX2 model is capable of being used as a collaborative robot as well as standard industrial type. He discusses how robots can only truly be collaborative if they are properly integrated. Telling the robot what to do is not complicated. The complicated part is integrating the robot to execute a productive application.

(18:30) Sebastien explaines Stäubli’s philosophy of partnering with integrators who are specialists in the field of an application rather than using an in-house integration department.

(23:25) Sebastien discusses statistics which show that when countries bring in a lot of robotics into their infrastructure their unemployment rate actually decreases.

(25:55) Sebastien discusses how he got into robotics. He talks about his upbringing in northeast France, an area once known for mining. He was influenced by his father, a mechanic who was the first in his family who didn’t go into mining.

(29:43) Sebastien gives his preference for the film Short Circuit over The Terminator.

Question: What task do you wish you could give to a robot?

Share this post

Machining a Pancreas

By Lloyd Graff

A couple days ago, Futurism newsletter ran a piece about Liam Zebedee, a software engineer in Brooklyn who struggles with diabetes while trying to live the semblance of a normal life.

He built his own “artificial pancreas” because he was frustrated with the daily hassle of dealing with hospitals, doctors, insurance companies, and pharmacies.  He started with a good piece of hardware, an insulin pump.  He then developed his own software and purchased the necessary hardware for $979.  He pays $225 per month for off-the-shelf glucose sensors plus his monthly cost for a supply of insulin.

“I know that it’s pretty insane to run your basic metabolism on untyped JavaScript code,” Zebedee writes.  “But if you were in my shoes, you’d realize it was safer than going to the hospital, intentionally or not.”

The homemade “artificial pancreas” shows the hand of ingenuity that builds businesses out of ideas.  In a small way our machinery business has been grappling with a mechanical challenge which most of the “smart people” we consulted told us would likely end in failure.

We do not tackle a lot of setups on screw machines these days because if folks want us to do it, it usually means that they cannot do it themselves and don’t know anybody who can.  We took on this one for several good reasons that seemed to trump the obvious impediments.  It was a big opportunity to sell machines, but failure would be very expensive.

The job was to thread both sides of a 4-1/2” long, ¾”-diameter pipe.  The customer made a couple million of them a year, but their process either on CNC lathes or screw machines and threading machines was laborious and even dangerous.

On the face of it, at least to me, who did know enough to understand why they had done it the old-school laborious way for 50 years, it was quite doable on a Wickman.  Thread chasing on one end, die head threading on the other, a piece of cake.

What I did not know was that steel pipe, 4-1/2” long, presents nasty problems for threading.  Pipe is not uniform in surface quality, wall thickness, and machinability.  There are significant differences in the products of each manufacturer.  It is not perfectly straight, it will wobble—more the longer you attempt to machine.  Cutting tools usually are not durable enough to compensate for the roughness and wobble of pipe.

Wickman has a husky and generally quite useful thread chasing attachment for the end of the pipe closest to the spindle.  Unfortunately, it was really not expected to cut steel pipe to connect a hot water heater.  It normally rests on an aluminum base on top of the cross slide, but to our own dismay, we consistently got unacceptable chatter using the attachment.  After tearing our hair out in frustration, Javier, our engineer, mentioned that at his previous job they had occasionally used a steel base when chasing difficult stainless steel components.  Luck had it that we had a scruffy old steel base on our parts shelf.  To our shock the chasing worked.

We ran into similar issues trying to do die head threading on the other end.  The cutting tools broke, the die heads fell apart, chatter was a constant companion.  We put a Logan air threading attachment on to replace the mechanical one.  Better, but still not good enough.  Then we slowed down the clutch by changing gears.  Still no good.  Finally, we put it on the slowest possible threading speed, and we got a good thread, but the cutters had a maddeningly short life.  It required a different coating to finally make it work.

Through all of the experimenting we labored with four different varieties of seamless pipe.  Only one worked reasonably well.  We asked our customer for more pipe.  They could not seem to provide it for us.  “Purchasing” and “Politics” continually got in the way of providing us more raw material to perfect the process.  We offered to buy it ourselves, pick it up ourselves at another plant, do anything to move the process, but the pipe did not come.  Finally ten 10-foot lengths arrived.  Not enough for a full run off, but enough for samples and a good tryout of the process.

“We did it.”  At least we think so for now.  Not a homemade, artificial pancreas, but a satisfying, improvised solution to the problem for Graff-Pinkert.

Question: Tell us about an “impossible” job that you solved.

Share this post