Category Archives: Business

Ep. 115 – Treasure Hunting, Swarf, and Sliders with Noah Graff

By Noah Graff

Back in February I had the pleasure of being interviewed on the MTD Podcast, an excellent podcast about machining in the UK. Hosts Joe Reynolds and Giovanni Albanese grilled me about a lot of our favorite topics featured on Swarfcast, like treasure hunting, reshoring, Trump, and Swiss CNCs, which my British counterparts often call “sliders.” 

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

 

Main Points

I explain the origin of “Pinkert” in “Graff-Pinkert,” our used machine tool company’s name. It comes from Aaron Pinkert, my grandfather Leonard Graff’s cousin and business partner. (2:10)

I explain to my hosts how I got into the machine tool business and journalism. Back in 2005, my dad, Lloyd, lured me to work at Today’s Machining World with the idea of making streaming videos to accompany the magazine’s print content. It was a good idea, but it was one or two years before Internet broadband was good enough for it to be practical. Meanwhile, I honed my writing and editing skills working on the print magazine. In 2011, when Today’s Machining World became an all online publication I joined Graff-Pinkert, becoming a machine tool dealer (AKA treasure hunter). We continued to develope todaysmachiningworld.com and created Swarfcast in 2018. (3:00)

I elaborate more on my chosen occupation title of “Treasure Hunter.” I explain that my job as a used machinery dealer consists of combing the earth for valuable assets. “Treasure hunting” seems more romantic than “buying and selling dirty, oily, old machine tools that people don’t want anymore.” Giving myself the title reframes the essence of the occupation, making it more fun and interesting. “Treasure hunting” also relates to the serendipity factor of my job. Often I go into a shop to look for one thing but find something entirely different that is more valuable than what I came for originally. (7:20)

We talk about the CNC Swiss market in the United States. I tell my hosts that if you can find a good used sliding headstock machine from the last 15 years you’ve found treasure. It’s the number one item Graff-Pinkert’s customers are asking for these days. (10:50)

Noah Graff, Host of Swarfcast

I explain that none of the experts we have interviewed on Swarfcast have given us an actual example of reshoring in the United States—only anecdotes of people quoting work and theories saying that the stars are aligned for work to come back to the US. I mention a podcast in which we interviewed Yossi Sheffi, a supply chain professor at MIT, who told me it is impossible for a lot of manufacturing work to leave China because companies there already have a vast ecosystem of intertwined suppliers and vendors. (12:00)

Joe Reynolds asks me how I think Joe Biden’s presidency will effect US manufacturing. He asks if I think he will be an advocate for manufacturing like Trump. I admit to my hosts that though I loath Trump, when he was elected, Graff-Pinkert’s business got an immediate boost. I explain that it’s pretty typical for American business owners to feel happy and confident when a Republican is elected President. I explain that Trump made manufacturers’ lives easier with his tax bill and relaxed environmental regulations. Many manufacturing company owners felt confident in his policies and energized because they felt they had a president on their side. (15:30)

We talk about why a lot of Graff-Pinkert’s customers, many in the Swiss machining business, had their best years ever in 2020. This was partly do to opportunities in the medical field relating to COVID-19. Though we also know of many thriving Swiss shops, making products unrelated to COVID-19 such as dental implants or components for eye surgery. (20:00)

We talk about social media’s significance in the manufacturing business. I tell my hosts about one of Graff-Pinkert’s clients who says they have gotten business from posting instagram blooper videos of parts they had to scrap. (24:20) 

I brag to Joe Reynolds that Today’s Machining World has been referring to its editorial content as “Swarf” since its inception in 2000, which was prior to the creation of MTD CNC’s YouTube channel “Swarf and Chips.” (30:20) 

Question: What events led to your current career?

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Are You Up For Some Basketball?

By Lloyd Graff

The Men’s NCAA basketball tournament begins this week, an extravaganza of hoopla, gambling, and basketball. 

There are 68 teams, but only a few have a real chance of winning it. The eventual winner will likely come from one of the four No. 1 seeded teams in their regions. I don’t bet on sports. Machine tools are my game, but I love basketball and I find the four highest ranked teams and their coaches especially provocative this year. 

The No. 1 seed overall in the tournament is Gonzaga. If you do not follow college basketball, you probably have never even heard of the small Jesuit college in Spokane, Washington, which is pronounced with a hard “a.” Basketball has put the Gonzaga Zags on the map, thanks to Coach Mark Few. He came to the school in 1999, and the team has made the NCAA tournament for 22 straight years. 

And never won it.

But this year many think it will be different. The team is talented and experienced, and there are no traditional powerhouses with elite first round NBA picks to challenge them. This year it is the Zags with the NBA-ready players. Sophomore center Drew Timme, senior forward Corey Kispert, and guard Jalen Suggs, who has three cousins who played in either the NFL or NBA. If he turns pro after this season, it’s quite likely he will be a top 5 NBA pick.

***

Baylor is second among the four No. 1 seeds, although many believe Illinois may be just behind Gonzaga. The Bulldogs from Waco, Texas, were never known for basketball until Scott Drew turned the program around. He inherited the worst scandal in college basketball history. In 2003, Carlton Dotson shot and killed his roommate, Patrick Dennehy. They were both forwards on the Baylor team.

The investigation into the case revealed rampant drug use and cash payments by coach Dave Bliss to members of the team. Baylor basketball received penalties extending 10 years out. 

Baylor looked for a new head coach, who was as clean as Tide and who was clueless enough or brave enough to step into an impossible situation. 

It turned out to be Scott Drew, who had replaced his father at Valparaiso University in Indiana. Drew was considered as pure as a college basketball coach could be and naive enough to take a job where failure was a given. 

Baylor stunk for several years, but Scott Drew showed he could coach rejects and eventually he recruited guys with talent. For the last several years, Baylor has won 20 games a season, and this year they were undefeated much of the season, finishing with only one loss. Their guard, Jared Butler, is a first-team All-American.

***

Gene Hackman in the movie, Hoosiers

Illinois is coached by Brad Underwood, the epitome of the hard boiled, vagabond coach who has bounced from Hardin-Simmons to Daytona Community College, to Stephen F Austin, to Oklahoma State, and, finally at age 57, to head coach of the Big Ten Tournament Champion, Illinois. Underwood looks a little like Gene Hackman in Hoosiers. 

He’s seen it all and understands the game. And he really can recruit. His brute of a center, Kofi Cockburn, 7ft tall, 285 muscular pounds, is a rebounding monster. Super sub guard Andre Corbelo is from Puerto Rico via Long Island. But the top player is All American guard, Ayo Dosunmu of Chicago. 

He is a potential top 5 NBA pick and is probably the best player to come from the Windy City since Derrick Rose. Ayo is a terrific all-around guard, but what I like most about him is that he loves to take the last shot in a close game and usually makes it.

***

The fourth best team in the NCAA tournament is Michigan. Their head coach is a 19-year NBA veteran, Juwan Howard, who played on the great Fab Five Wolverines team. Howard, from Chicago originally, is in his second year of college coaching. 

Many saw him as a celebrity hire, but they underestimated the man. Howard is another basketball zealot, up at 5:30 a.m. to start his day. While playing, he took less money in one of his contracts to play for Pat Riley in Miami because he wanted to play for a coach who would push him to become the best player he could be. 

Howard inherited a mediocre team, but he recruited a 7ft tall center with excellent footwork, Hunter Dickinson, from Arlington, Virginia, and a transfer grad student from Columbia University of all places, Mike Smith. Add in Germany’s Franz Wagner and some good role players and Howard’s team can beat anybody

***

Gonzaga has the hype and three future NBA players. It’s Mark Few’s best team. Baylor and Michigan are capable of getting to the final game. Personally I think this is Illinois’ year.

Questions: Do you usually root for the favorites or the underdogs?

Which teams are you picking in your Men’s NCAA Tournament bracket?

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Should I Be Less Patient?

By Noah Graff

Being a machinery dealer takes a lot of patience. I guess patience is key for selling most things, as well as pursuing a relationship or a career. The problem we all face is that other people just have different schedules and different priorities than we do. 

I tried to sell a CNC Swiss machine to a company in Europe over the last several weeks. The company acted like they really wanted it. They called me several mornings to discuss the deal. I could taste that deal. It was a medium sized deal—but a nice deal. My contact at the company said she thought they would make the final decision to purchase the machine on Monday (last Monday). They asked a lot of questions about shipping and importing equipment because they were inexperienced buying a machine from the United States. When Monday came they asked me to give them another day or two—“then they would have a decision and likely would buy the machine.” So I waited, trying not to seem overeager. Then I got no answer.

A few days later, they sent an email, turning down the machine, saying their country’s government would finance a machine for free if they bought a new one domestically. All of my patience and attentiveness to their concerns, along with a damn good machine, wasn’t enough to close the deal.

We all think the thing that we are trying to do, which is at the top of our minds and is our top priority, is the same thing that other people should have as their top priority. A deal for a machine I’m selling that is so important to me should be just as important to my customer, if not more! Of course, it often is not. I guess I’m self-absorbed. I’m impatient, and I like to think everyone wants to treat me as they would want to be treated.

phone in handOf course, I’m also guilty of having a different personal agenda than my customers. When a customer calls me while I’m doing my morning exercise routine I usually push the reject button. It is a sacred time for me. They will just have to wait a half hour for my reply. Also, if it’s late in the evening, I will do everything in my power not to check email unless I’m specifically expecting something time sensitive.

I’ve tried to learn to be patient in business. I read negotiating books that tell you to stay calm when pursuing a deal. They say to never be overeager because it makes you seem needy. I read a great negotiating book called Start with No, by Jim Camp. Camp says the way to stay unneedy is to remember that all you really need in this world is water, air, and your loved ones. He says that everything else is just stuff you want.

My dad owns Graff-Pinkert. He writes the checks. He pays closer attention to making the monthly nut and understandably doesn’t always have the same patience as I do. Sometimes he calls customers when I think it’s a bad idea. I tell him he is calling a customer just to satisfy his own emotional needs, and I implore him to lay off.

A few years ago, he told me to call an auctioneer in Sweden at 9:00 PM (Sweden time) to discuss a hot machine for sale. I protested that it was common courtesy to not call so late, so we should call him in the morning. But I finally did what he said. What do you know, the guy was grateful I called and very interested in what I had to say.

There have been many moments when I questioned my dad’s eagerness with a customer, but then he proved me wrong and demonstrated the power of persistence. Sometimes being aggressive wakes up a deal and gets it done because the customer was distracted by other things. Perhaps the customer was vacillating over details of the deal and just needed an extra push or an extra sweetener to make a final decision. 

I had another machinery deal yesterday that got away from me. I very well could have gotten that deal if I had just followed up with a prospect a day earlier.

It is so hard to know how aggressive to be when pursuing a deal. I try to remember to pause and ask myself why I am choosing to act in a certain way. Am I making a decision based on emotion or logic? If it’s based on logic, what if my logic is wrong?

Question: When has a salesperson’s persistence made the difference in getting your business?

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Best of Swarfcast – Ep. 25 – Brett May on Keeping Screw Machines Relevant

By Noah Graff and Rex Magagnotti

We interviewed Brett May of BME Inc. Screw Machine Attachments for today’s podcast. Brett’s mission in business is to make old cam multi-spindle screw machines like National Acmes, Wickmans, and New Britains into productive money makers in today’s competitive machining environment.

Scroll down to listen to the podcast with Brett May.

Brett builds unique attachments which eliminate secondary operations that many people would put on a mill-turn CNC to finish, or run on an accurate but achingly slow Swiss-type machine. When he does his magic he turns supposed clunkers into enormously valuable machine tools.

Brett sees an old Acme and visualizes value, where others see a candidate for the scrap heap. As part of the BME value proposition, he also rebuilds multi-spindle machines, particularly National Acmes.

Question: Have you given up on non-CNC equipment? Why?

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Billets and Booties

By Lloyd Graff

Amazon buys Central Steel and Wire.

That’s an odd couple.

Not really.

What Jeff Bezos wants is the 70 acres of land on the southwest side of Chicago near the old stock yards. No bundles of half inch 12L14 bars in with the bananas for the moment. 

The Central Steel and Wire Company and its real estate in Chicago was sold to Ryerson Steel in 2018. The firm was an odd duck because it had no debt. It was 56% owned by the James Lowenstine Trust, which was dedicated to using 1,200 acres of natural beauty in Northern Wisconsin as an environmental school known as Conserve School. Lowenstine, son of the founder of the company, died in 1996. He had no children. His will also left a loophole for the trust to be controlled by his Alma Mater, Culver Military Academy in Indiana. The competing interests fought over control of the trust, and therefore the future of Central Steel, for over 20 years. Today’s Machining World wrote a feature story about the conflict back in 2006. In 2018, Culver gained control of the trust, installed its slate of directors to run the Conserve School, and sold the company to Ryerson Steel for $150 million. It turned out to be a sweetheart deal for its old rival, Ryerson, also based in Chicago.

Amazon just paid $45 million for the real estate and leased it back to the company for two years. For a little more than $100 million, Ryerson became the dominant metal distributor in the Midwest.

Central Steel & Wire Company at 3000 West 51st Street in Chicago

The deal interests me for many reasons. Graff-Pinkert has been a customer of Central Steel for as long as I can remember. If a company, even for the smallest of customers like us, could exemplify caring, efficient service for decades, it was Central Steel. With Ryerson, it becomes a global “maybe,” with their interests in China and Mexico and elsewhere. 

But what is also fascinating is the shifting of real estate patterns over the past several years, with Amazon leading the way. 

Retail is withering. Find me a shopping center that is thriving. Few are even in the black. Rents of retail locations are falling. Many retail centers are being demolished or will be converted into housing, marijuana farms, or vaccination centers. 

Office space today is in disuse, but giant warehouses are proliferating near many highways, especially where there is easy access. The new real estate magnates are using cheap money to build massive windowless 35-foot high concrete wall rectangles with a lot of asphalt to enable vehicles to get in and out of fast. 

Amazon is employing hundreds of thousands of people processing boxes. That means loads of hand and wrist injuries now, but in the future robots will do most of the work. In 5 to 10 years, we will probably see driverless delivery vehicles. 

This is why Bezos continues to buy real estate, even in sick cities like Chicago. For an Amazon, the southwest side of Chicago, which used to have many small machine shops served by Central Steel that have since fled Chicago with its taxes, rampant corruption, and lousy schools, is now fertile ground for a company that needs huge numbers of $15 per hour employees to load vans with boxes of booties.

Amazon, for the moment, needs people. Central Steel has strategic ground and hundreds of motivated, well-managed employees. While Amazon says it is not interested in steel distribution, I can imagine Bezos studying the Central Steel operation and deciding Amazon can do it better. 

If it works for bananas and booties, it could work for billets.

Question: Do you think steel distribution could be improved upon?

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Ep. 114 – Live Tooling and Accessories for CNC Swiss with Jim Gosselin

By Noah Graff

Our guest on the podcast today is Jim Gosselin, owner and President of Genevieve Swiss Industries. Genevieve Swiss sells innovative accessories specifically for Swiss CNC lathes, such as live tooling and cutting tools, to combat the problems small parts manufacturers constantly deal with.

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

 

Main Points

Jim gives an overview of Genevieve Swiss. He says the company’s mission is to make the job of the machinists easier. If machinists have the right tools to get better efficiency and quicker setups then machining companies will be more profitable. (2:30)

Jim says he was always interested in mechanical stuff from a young age. He liked to take apart his toys as a kid to try to understand how things worked. He dropped out of high school in his Junior year and went into the military where he became a combat engineer. He summarized that job as “building things and blowing things up.” (3:00) 

After getting out of the military, Jim got a GED and took college courses at night. He worked at a machining company called Savage Arms in Westfield, Massachusetts, that made shotguns and other hunting equipment. In 1983 he became a programer and ran the new Citizen CNC machines that the company purchased. The machines had 2 turrets with 5 stations each, with cross drilling and milling capability. He says those machines were not actually sliding headstock. Rather, they were sliding guide bushing machines. The turret and the guide bushing slid together on the machines. (4:00)

In 1987 Jim became an applications engineer and salesperson at Brookdale Associates, a Citizen distributor in New England. In the late 1980s Brookdale Associates began building high pressure coolant systems for Swiss machines. He says before then, high pressure pumps were not used for Swiss turning. The company also sold a line of accessories, including tool holders for Swiss machines. In 2002, he and his colleagues traveled to Switzerland where they began a relationship with PCM, a company that sold high quality live tools. Jim thought that Brookdale would distribute PCM’s tooling, but it was a difficult year for the machining industry, so his boss didn’t want the risk of taking on a new product line. He told Jim if he wanted to start his own company he supported the idea and would be his best customer. That was the start of Genevieve Swiss. (5:45)

Jim says that when he started Genevieve Swiss he realized at the time that many Swiss operators were getting older and they were burning out because the Swiss machining process caused too many headaches. He decided his company’s mission would be to make Swiss machinists’ lives easier by supplying them with products that enable faster setups and better cycle times. (8:00)

Jim talks about developing gear-driven head live tools for Swiss machines with PCM. He says that prior to gear-driven live tools, typically live tools on CNC Swiss machines turned at 4000-5000 RPM for cross drilling or cross milling. He says this wasn’t efficient for end-mills that could be as small as a diameter of .020” or .030”. The slower turning speeds caused burrs and slower cycle times. The new gear-driven heads produced 3 times the output as the older technology. (9:25)

Jim talks about the products Genevieve Swiss sells. The company sells accessories specifically for Swiss machines such as live tools and cutting tools. It sells arbors for slitting as well as coolant that is specifically designed for high pressure delivery. He talks about a thread whirling head for a Citizen L20 that is designed to have coolant flow right through the head and then delivered to the cutters. (see video above) (10:30)

Jim says that chip control problems are one of the most significant hurdles for Swiss operators. He says often in medical work that uses difficult metals like 465 stainless, chips can come off the machine like ribbons. Genevieve Swiss is working with its insert tooling supplier UTILIS to sell laser ground chip breakers. (see demonstration video below) (12:40)

Jim talks about insert tooling developed by UTILIS in which coolant flows through the tool and is focused on the tool tip. (17:00)

Jim says most of the Genevieve Swiss’ innovations come from listening to customers on the shop floor. He says the company talks to customers and distributors to find out what machining problems operators are complaining about. (20:00)

Jim compares the construction of older Swiss CNC machines to those of today. He says that Swiss machines used to have heavier castings to achieve rigidity. While today’s Swiss machines are built with lighter castings, Jim says they are designed more intelligently based on factors such as stress analysis, which enables them to stay ridged. (21:30)

Jim says the incorporation of lasers is one of the most interesting recent innovations on Swiss machines. Lasers can do cutting, milling, cross drilling, and knurling. They also enable welding two parts together while still on the machine. He says though 3D printing is slow right now, it could be a disruptor in small parts manufacturing one day. He brings up a scenario of a Swiss machine that also incorporates 3D printing. (22:30)

Learn more about Genevieve Swiss at Genswiss.com.

Question: What are the biggest challenges you run into running CNC Swiss machines?

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Ep. 113 – A MultiSwiss Screw Machine to Maximize Production, with John Belmonte

By Noah Graff

On today’s podcast we continue our series about Swiss machining. Our guest is John Belmonte, owner and President of Mitotec, a precision turning company in Necedah, Wisconsin.

Recently Mitotec purchased a Tornos MultiSwiss 8X26 multi-spindle screw machine. The unique design of the MultiSwiss enables such quick changeovers the machine is running many of the same jobs the company has on its single spindle Swiss machines, but in a fraction of the cycle time.

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

 

Main Points

John gives an overview of Mitotec Precision. The company is located in Necedah, Wisconsin. It features Tsugami Swiss machines, Miyano CNC lathes, cam multi-spindle Tornos SAS16s, Tornos DECOs, and recently purchased a Tornos MultiSwiss 8X26, a 26mm 8-spindle CNC multi-spindle. (3:00)

John tells the story of Mitotec Precision. The company was started by John’s grandfather in 1963 in Necedah, Wisconsin, and originally was called Necedah Screw Machine Products. John says the company changed the name in 2018 because it was using newer technology than just cam screw machines. It wanted customers to understand that it had become a CNC Swiss shop. Also, the company changed the name to help recruit young talent—people interested in working with sophisticated technology, rather than only cam screw machines. (4:10)

John Belamonte with the Tornos MultiSwiss 8×26

Mike says while growing up he worked at his family’s shop in the summers but didn’t always think he would go into the business later in life. He was interested in studying to be a lawyer but eventually realized that he didn’t have the grades to go in that direction, so he returned to Necedah to work in the business. Over the years he has had lots of jobs at the company. He started on the shop floor, which at the time mainly featured Brown & Sharpe screw machines. His learned estimating from his grandfather, and then he gravitated toward screw machine engineering. (5:50)

John says the first CNC machines the company bought were CNC Brown & Sharpes. Then it bought Miyano CNC lathes, and then Swiss machines starting with Tornos DECOs. (7:20)

John says the company produces a lot of parts for the medical industry, as well as electrical components and firearm components. He tells Noah about a medical part made on Miyanos that goes into a system to inoculate people in Africa without using a needle. (8:50)

John says the company tries to “make parts that matter.” He says it’s good for his team to feel they are making parts that make life better for people. He says if employees know how important the company’s parts are they will make sure they are high quality. (9:45) 

John says that making medical parts is a good place to be in manufacturing. He says Mitotec Precision is constantly trying to use its expertise in machining to improve the parts for its customers. (11:00)

John explains how the Tornos MultiSwiss works. The machine has eight spindles that move in and out like a Swiss machine, however they don’t have guide bushings. The company decided it needed more capacity, but rather than buy a lot more Swiss machines, it decided to buy a CNC multi-spindle to cut cycle times. Even though there were only around 20 8X26 MultiSwiss machines in the United States, Mitotec chose that machine over an INDEX CNC multi-spindle because the MultiSwiss has a design that makes it quick and easy to change over. Unlike many companies that buy CNC multi-spindles for long runs, Mitotec wanted a machine to do a lot of short runs. The company’s goal is to be able to change over jobs on the MultiSwiss in the same amount of time it would take on a conventional Swiss machine. He says the company can make many parts on the MultiSwiss 3-5 times faster than on a traditional CNC Swiss lathe. For example, he says he can take a complex part that takes 90 seconds on one of his Tsugamis and produce it in 10-15 seconds on the MultiSwiss. This means he needs fewer machine operators because one machine could be running the same work as several machines. (13:00)

John talks about how the company has changed its organization in the last several years, implementing a management system called EOS. The company sets strategic 10-year goals, 3-year goals, and annual goals. In the new organization he has a senior leadership team that meets weekly, consisting of himself as the integrator, an engineering manager, an ops manager, sales manager, and HR. He says the new organization has had great results. (20:00)

John says another change the company has made in recent years is that it is not afraid to let go of certain customers if they they are not profitable or good to work with. (23:30)

John says when he hears the word “happiness” he thinks of being with family. He also says for him it means getting to do something every day that makes him want to get up in the morning. He says he likes being a good leader, getting to solve complex problems that matter, and having a great team around him. (24:20)

John says to create a good company culture, first a person has to define his core values. He says some of Mitotec’s core values are creativity, drive, adaptability, reliability, and thoroughness. (25:30)

John says it is usually necessary for Mitotec to train its own employees because it is hard to find good people already experienced in machining. He says people in his area of central Wisconsin generally have a good work ethic. Mitotec tries to get the interest of young people in the area by going into middle schools and high schools to expose them to oportunites to work in manufacturing that uses modern technology. He says there are some young people in the area who leave to see what life is like in big cities, but often they come back because they like life in smaller Wisconsin towns and feel it is a good place to raise a family. (26:15)

Noah asks John what he learned last week. John says he learned that the company had such a great year in 2020 it was now going to distribute a significant profit-sharing contribution to its employees. (29:30)

Question: What technology has made your shop more efficient?

 

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A Typical Tuesday for a Machinery Dealer

By Noah Graff

Yesterday, I started my workday by returning a phone call to customer in Italy as soon as I finished my home workout. I had read their email to try to distract myself while doing wall squats.

Later I spoke with people in Czech Republic, Germany, California, Arizona, Michigan, Wisconsin, and New York, and emailed others in Ohio, Pennsylvania, Illinois, Albania, and probably other places. Most of the people were making parts or peddling iron like myself.

Customers often ask me how Graff-Pinkert’s used machinery business is doing, and they ask me how I think the manufacturing economy is doing. After all, I’m in contact with manufacturers worldwide, and of course, I’m “the journalist.”

It’s hard to make generalizations about the machining world’s ecosystem. The majority of customers tell me business is at least stable. Many say they made money in 2020 or at least held their own. When they gush about their success in 2020 I always joke to them, “damn, I’m in the wrong business!”

Anecdotes from customers are more useful barometers for gaging the state of the machining economy than looking at the day to day events of our own business. I’m sure my fellow dealers will attest that the business is a rollercoaster because of it’s illiquidity. There could be no cash flow for weeks, and all of a sudden three big deals happen in a day. Suddenly the economy must be on an upswing!

Noah Graff in the Graff-Pinkert shop

You have to be very patient if you’re a used machinery dealer. My dad likes to say that often deals are like fruit, you just have to wait for them to ripen before they are ready to harvest—sometimes years! God willing, yesterday we finally sold two beautiful CNC multi-spindles that have been ripening in our warehouse for several years. They were built in Germany, traveled to Spain, then to Texas, then to Chicago, and now if all goes well they will go back to the place they started from. I hope I’m not jinxing the deal by writing this. Until we have received compensation for them, it’s not a sale.

Right now we have three multi-spindles, almost as old as me, ready to ship Mexico. Two other multi-spindles, older than me, we are hoping will go to Australia. There’s also a sweet Swiss machine I hope is bound for Europe.  

We have a tool and cutter grinder that we are quoting to companies in China, Mexico, the United States, Spain, Brazil and Turkey, and the supposed value seems to fluctuate dramatically from country to country—and not exactly how one would predict. We don’t know what the sell price should be. It’s constant internal debate.

That was my Tuesday (leaving out quite a few details). I think the day gave me a decent survey of the international turned parts industry. I’ll reiterate, it’s important to listen to a lot of different people to get a feel for the industry. I can’t go by what one person says because I hear so many diverse views. I can’t totally trust my own business’s day to day vibe either because, I, like everyone, live in my own bubble. Lots of our customers say business is great right now, and as I write this, 5-10 good deals seem like they are on the verge of breaking. But right when I think I understand something, or a deal seems great, or a deal is about to happen, or a deal is going flop, or my favorite ice-cream shop will have the flavor I’ve been waiting for, things take a turn in an unexpected direction—not necessarily a bad one though.

One more thing. Shameless self-promotion–the Doosan TT1800SY in this blog’s email blast ad is a real find. You won’t find treasure like this on your typical Wednesday!

Question: How do you feel the machining economy is doing?

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Lessons from the Pandemic

By Lloyd Graff

I spent several hours working at the Graff-Pinkert office today for the first time since last April. 

I am beginning the process of coming out of my fear induced hibernation, three weeks after my first COVID-19 vaccine shot. The statistics say I have 80% immunity after one Moderna vaccine hit. I sort of trust the number, but not enough to do without the mask, which is my constant annoyance when I leave my home. 

I hate the COVID necessitated hibernation. At my age, with a heart attack and heart surgery in my past, I am still COVID’s emotional captive. I know I am vulnerable, even if only one in 200 of those who catch the illness die of it. 

I have learned from my COVID home prison sentence. I’ve learned that I can happily do without many of the appointments I thought were necessary. 

I can officially forget about going to the barber. I used to be a customer at a little suburban shop run by a woman who seemed to find me irritating because I came by irregularly and liked Saturday morning appointments. She cut my hair in 14 minutes, so I was easily sandwiched in, but she told me she had no appointments one too many times, so I decided to try the barbers at a local Meijer supermarket. They were okay, but I have learned that I can successfully cut my own hair and shave my neck without any barber. The pandemic teaches us what we can do without.

I have also learned that I can live without visiting the dentist every three months for a cleaning. It was more about cleaning out my bank account than a necessity. Semi-annually or yearly will do quite fine from now on. 

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Lloyd Graff in the Graff-Pinkert shop

My relationship with my work has changed over the past year. I have found that it is unnecessary for me to be at my office much of the time, and I am happy to not be there every day. But working at home I almost never turn off my work channel. There is always another email, another blog, another call to make. 

When I go to work physically I am much more likely to walk around, to connect with people in the plant, to ask questions. Working from home is more iPad-based, less face-to-face connection. I get the news and the numbers, but I miss the vibe. I am more distant, and it has to be noticed.

I find that the longer I am away, the harder it is to come in. COVID-19 is the rationale, but the reality is that I could mask up if I really wanted to go in. I cannot put a financial value on this, but I know it is real. 

Last year was a down year financially for our machinery business. Everybody in the company made less money than in 2019. Two full-time employees were let go. 

This year appears to have much more activity from all over the world, yet COVID-19 limits our willingness to travel and inhibits our customers’ travel. This hampers our ability to close deals. We have to trust other people to inspect machines without us. Our network is extensive, but it does not make up for physical movement completely. 

What have I learned?

I have learned that I love the business and I never want to quit unless my health forces me to do it. I have learned that I don’t have to be at the office a lot but I cannot be a phantom. I have learned that it helps to physically travel to close deals.

I believe that the worst of the pandemic is now behind us. Now is the time to really push to harvest the good times coming. 

Risa and I are taking our second Moderna shot in a few days. After waiting two weeks for maximum immunity, we are going to take off in a plane to California to see family. 

Questions:

Are you going to be vaccinated?

Will you make changes in your lifestyle after getting vaccinated?

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Best of Swarfcast Ep. 31 – Ken Mandile, Employees Are Buying His Business

By Noah and Lloyd Graff

We’re currently working on fresh new episodes of Swarfcast. In the meantime, we felt this “Best of” was fitting for the recent season on CNC Swiss machining. 

In March of 2019, we interviewed Ken Mandile, founder of Swissturn, a successful CNC Swiss machine shop in Oxford, Massachusetts. Ken’s children are not interested in taking over Swissturn when he eventually retires, so five years ago Ken began restructuring his company into an employee stock ownership plan or ESOP, in which he will gradually transfer ownership and management to his employees.

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

 

Main Points

Before going the ESOP route Ken turned down two lucrative buyout offers from private equity firms. Ken reported that after the first year of restructuring as an ESOP, the value of the company increased by 51%.

Question: Would you want to work at an employee-owned business?

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