Category Archives: Current Events

Ep. 94 – The Machining World of South Africa with Peter Frow

By Noah and Lloyd Graff

On today’s show we’re discussing the machining business in South Africa. Our guest is Peter Frow. Peter has been immersed in the machining business and has also been a participant in the social change of South Africa over the last 50 years.

While so many of his countrymen emigrated, Peter stayed and has recently started a business building a new machine tool in South Africa called FAS Machine Tools.

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Main Points

Peter talks about his businesses, Renfield Machine Tools, which he started in 1991, and his new company, FAS Machine Tools. Renfield Machine Tools reconditions used cam screw machines and turnkeys them, while FAS Machine Tools builds new machines. (3:40)

Peter says FAS Machine Tools builds a machine in South Africa that has the fast cycle times of a cam screw machine and the user-friendliness of a CNC lathe. He says his machine costs half the money one would likely pay for a comparable machine. Peter describes his machine as similar to a Swiss style machine but with a fixed headstock. It has an 8-station turret that moves on 2 axes, a dedicated turning slide that moves on 2 axes, a dedicated forming slide and a dedicated parting slide. The machine’s design allows for tools to work simultaneously on a workpiece, which gets cycle times down. (5:25)

Peter discusses what it’s like being 75 years old and starting a new company. He doesn’t worry about his age. (8:00)

Peter talks about his background in the machining industry. His father was an engineer at a power utility company in South Africa. Peter received a degree in mechanical engineering and for seven years worked for the same power utility company where his father had worked. In his late 20s he changed careers and went back to his hometown of Durbin. Once there, he joined his father’s screw machine shop. It was supposed to be a temporary gig, but he ended up staying and building up the company over the next nine years, from 1973 to 1982. (9:15) 

Peter describes the history of Apartheid in South Africa. He says country consists of essentially four racial groups: black, white, Indian, and those of mixed racial heritage, which South Africans call “colored.”  White South Africans are descended either from Dutch colonists (Afrikaners) or the English. In 1948, the Nationalist Party, supported by the Afrikaners, came to power and instituted the Apartheid, separating the country’s racial groups into different geographical areas. The whites, who represented only 20% of the population, controlled the majority of the land. Despite economic sanctions, the unjust situation lasted 40 years. In the late 1980s, F.W. de Klerk was elected Prime Minister. He eventually released political prisoners such as Nelson Mandela, allowed political parties that had been prohibited, and embarked on the process of negotiating a new constitution, which came to fruition with the 1994 Election. (13:50) 

Peter talks about his work as church leader and how he worked to bring reconciliation in South Africa in both a religious and political context from 1983-1990. (18:30)  

Peter talks about many whites leaving South Africa for fear of what would happen when Apartheid ended. He says he and his wife never considered leaving. He says he likes the complexity and colorfulness of the country. Peter says he enjoys the variety of people in South Africa, and sees a kinship with America in its diversity. Peter’s son lives in the US and holds dual citizenship. (21:20) 

Peter says many South Africans still want to leave the country, most of them white people. He says this is partly because the economy has had a lot of tough times, much of which stemmed from political corruption. He says the country at one point was over 20% white and now it is around 9%. He says that though unemployment is high, there are strong affirmative action programs in place that have helped to level the playing field for black South Africans. (23:40) 

Peter says the rise in the price of precious metals has helped South Africa’s economy. He says a big part of the economy is based on mining, specifically gold and platinum. (26:30)

Peter says there are a lot of black people and mixed race people working in machining in South Africa, but there still aren’t many who own machining companies. However, he says things are changing. (29:25) 

Peter says South Africa continues to suffer from significant disparities in income and living standards. The rich people live in modern cities, while others live in rural areas in mud huts, carrying water on their heads. However, he says the poverty in South Africa is not as extreme as places like India and that people from all over Africa travel to South Africa to find work. (30:10) 

Peter says engineering is a relatively popular career choice in South Africa, but the country has the same problems as the US when it comes to finding skilled people to work in machine shops. He says one of the reasons he created his new CNC lathe is because it’s hard to find skilled labor to work on cam machines. (31:40) 

Peter discusses where he lives. His home is in a suburban area on the edge of a wildlife reserve so he gets to see a lot of bush bucks and wild pigs nearby. He says his home is just 25 minutes from a small game park, but jokes that there are no lions roaming down the street. (33:00) 

Peter talks about wages of a factory worker in South Africa. He says it is not accurate to compare salaries to those in other countries because the cost of living in South Africa is relatively low. He says the standard of living for a person working in the machining industry is similar to what it would be in the US. (34:15)

Peter says one of the most interesting things he has learned in the last week was reading about the new peace accord between Israel and the United Arab Emirates (UAE). (35:20)  

Question: What country do you think builds the best machine tools?

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On the Road Again?

By Lloyd Graff

I had a very informative talk yesterday with a member of the machine tool brotherhood who is diversifying his portfolio into real estate, specifically Airbnb rentals in the Charlotte, North Carolina, area.

I thought Airbnb was in trouble because nobody was traveling out of fear of the pandemic, but he had a different view. He moved to Charlotte two and a half years ago from Chicago, where he had grown up and worked for two decades. His plan was to buy units he and his wife could manage themselves, saving any management fees. He wanted spots that would demand a premium during racing season and NFL season but would be close enough to the financial and restaurant meccas to appeal to men and women. Families could be accommodated but not emphasized.

This strategy has worked shockingly well. He claims to be making 30% to 40% yearly on his properties without the constant headaches of being a traditional landlord. Airbnb books the visitors according to its rules and the stipulations of the owner.

He told me travel has picked up significantly after falling off during the spring. Everybody is driving. Nobody wants to be at a property with elevators because of fear the virus will be left behind on surfaces by other guests.

Needless to say, he and his wife are searching for more potential acquisitions in the thriving Charlotte area.

****

Travel is rebounding. Southwest Airlines reported today that they are burning less money each week. The S&P 500 hit a new high yesterday, up 55% from the March lows. Gold is over $2,000 an ounce, Bitcoin is past $11,000, Amazon and Tesla stocks are going through the roof, and unemployment is still over 10%. Home Depot and Tractor Supply are going nuts with skyrocketing sales as plumbers, carpenters, and home improvers are in their heyday.

The odds are we will have a Biden presidency, pledged to higher taxes and monstrous spending on green schemes. The dollar is at a two-year low versus the euro, and Hong Kong is crushing free speech.

I don’t know about your business, but our machinery business is running uphill, and it is not easy. If you are not in the right part of the medical or weapons and ammo world, you are probably struggling. Covid-19 is going to be a major problem for at least six more months, even if we get a bunch of effective vaccines and useful therapies. Restaurants are buying scads of heat lamps, but unless you are in Miami or Los Angeles, the winter will be hell to serve outside. In late June Yelp stated that 53% of the restaurants that had closed during the pandemic indicated they would stay closed permanently.

It is quite a confusing picture in mid-August, trying to run a business and not die of coronavirus, especially if you are 75 years old. But I think we are healing if I look at the world from 30,000 feet without getting on a Southwest flight. I am incredibly grateful as I roll around to the 12th anniversary of my almost fatal heart attack in 2008.

My Cubs are in first place with 15 wins in 22 games, but don’t tell anybody that many of them were racked up against Pittsburgh and Detroit, which should only count as half wins. The NFL starts in a month, and Tom Brady is still slinging it at 64. The NBA and NHL are in playoff tournaments.

It is a time to cherish family and friends and every single day you are not sick. I’m trying. Be well, y’all.

Question: Would you stay in a hotel or Airbnb right now?

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Does Anybody Care?

By Lloyd Graff

Chicago is appalled by the disgusting and brazen looting of stores like Gucci and Nordstrom’s on its Magnificent Mile. Our Mayor, Lori Lightfoot, is furious and humiliated that her city’s elite shopping area has now been ransacked several times by bands of young thugs that communicate by cell phone, coordinating when to strike and who to hit first. They come by car and train and overwhelm the police so they can grab clothes, electronics, and booze.

There is good camera surveillance, so the authorities can pick up many of the looters later if they are inclined, but the State’s Attorney, Kim Foxx, seems disinclined to prosecute them and put them in jail. She is a political foe of Lightfoot, allied with Toni Preckwinkle, the Mayor’s archenemy who was trounced by the newcomer in the last election.

Chicago is broke, the state of Illinois is broken with its longtime Svengali, Mike Madigan, possibly on the verge of being prosecuted in a utility bribery scheme, for which Commonwealth Edison was fined $200 million dollars. People are fleeing the state for Indiana and Florida and Idaho, while I see my state and local taxes balloon.

It all stinks and everybody knows it.

While the city is being looted by politicians and thugs in different ways, I find it very ugly to follow the unfolding saga of the once-great Eastman Kodak, king of film that nobody uses anymore. Kodak was recently awarded a $765 million dollar federal government loan to start making the drug components that are no longer made in this country but are vital in the manufacturing of antibiotics and many key pharmaceutical products.

Target that was looted near Noah Graff’s condo in Chicago

When the loan was announced a couple of weeks ago, the $2 stock, still listed on the New York Stock Exchange, went nuts. It rose to $60 a share in a couple of days. This was when a member of its board of directors, George Karfunkel, gifted 3 million of his 6.3 million shares to a small religious institution that he happened to be the president of, enabling him to book a $116 million dollar donation. The charity received its charitable designation a year ago.

The whole deal may well be found legal if the loan to Kodak is not tainted by illegal bribery but rather a shrewd political contribution. Karfunkel was on the Kodak board for several years while the company was limping along, looking for a new blockbuster product in Rochester, New York.

The profit was neatly packaged as a contribution to a Jewish Orthodox synagogue in Brooklyn. The donation will hopefully do good in the world, but for Karfunkel and his wife, Renee, the write off will be worth at least $40 million dollars, usable for several more years. The suckers who made it possible were naive stock market gamblers whose shares are now worth a fraction of what they threw into the pot to buy them.

Can you draw a straight line from the brazen thugs who came from Chicago’s West and Southside slums to smash the windows at Gucci for the third time, to the sophisticated financial gamer, who sold his Kodak shares and gifted them to his favorite personal charity? I am curious what you think.

Question: Who is more disgusting, looters in Chicago, or Wall Street thieves?

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Staying Too Long

By Lloyd Graff

Maria Konnikova, doctor of psychology, journalist and professional poker player, said that the hardest but probably most rewarding lesson she has learned is that to win consistently you have to fold when you see you are likely to lose, even after making a sizable bet on your hand.

This is a life lesson I see playing out vividly in the days of COVID-19 for people in business. In the machining industry, smart leaders shut down plants early in April, cut people or furloughed them, even if some were great workers they would have recruited with bonuses in 2019. Many also saw it as an opportunity to trim the marginal troublesome people who they will figure out how to do without even when business is strong again.

We also see the wrestling match between staying the course and cutting your losses in pro sports. 

The Chicago Bears drafted Mitch Trubisky, a quarterback who played only 13 games in college but was considered by some to be the next coming of Tom Brady out of high school in Mentor, Ohio. Ryan Pace, the Bears general manager, traded up one spot with the San Francisco 49ers to draft Mitch #2 in 2017, ahead of Patrick Mahomes II and Deshaun Watson. In his three pro seasons, Trubisky has been mediocre at best, ranking last among starting quarterbacks in the NFL last season. 

Yet Pace is bringing him back this year, though he signed journeyman QB Nick Foles to compete with him. Pace has refused to cut his losses. He has apparently not been willing to fold his losing hand after making a high stakes bet.

In baseball, the Cubs threw in their cards in 2011, hired new management, and cleaned house on the field. After three miserable seasons but several great draft picks and trades, the Cubs made the playoffs in 2015 and won the World Series in 2016. GM Theo Epstein is at the crossroads again this year with a fading team. He still has young players like former MVP Kris Bryant, who appears already to be in decline, and he has a pitching staff with no young stars. The question Cubs fans are asking is whether Epstein is waiting a year or two too long to throw in his cards for another tough rebuild.

Personally, I have found that changing course in business is the single hardest thing for me to do. Admitting an investment is a mistake, firing a nice person who is a mediocre employee, or worse, changing a direction that proved successful for many years but seems like it has lost momentum now, is extremely difficult for me.

I have also seen bad marriages linger for decades in some cases because of the sunken costs of children, familiarity, and financial security, which hold people together when the love is long gone.

Maria Konnikova said that she gave up more than one long-term relationship after internalizing the lesson of walking away from a losing hand in poker. Teaching this kind of resiliency and flexibility to children, and hopefully making it a part of your own DNA is much harder than tossing in a pair of aces. 

Question: When have you stayed too long?

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Bet Your Life

By Lloyd Graff

“Life is a game of incomplete information.” 

These are the words of Maria Konnikova, a writer and psychologist who learned how to play poker and then played on the professional poker tournament circuit to write her new book, The Biggest Bluff: How I Learned to Pay Attention, Master Myself, and Win.

Konnikova read from her book and discussed it with Stephen Dubner on the Freakonomics podcast this week. I found it particularly relevant because our family is now wrestling with a difficult decision while knowing that we have incomplete information, fear, and personal history to contend with.

The question is whether to get together as a family for a week to celebrate our recent 50th wedding anniversary.

I know many other people are grappling with whether to get together as a group for an extended period of time, requiring travel, expense, and above all, the possibility of people getting very sick.

My daughter and her husband and three children live in the Bay Area of California. The COVID-19 epidemic has subsided significantly there, and they have followed the local protocols religiously. The plan has been for them to come to Chicago in early August, and with my sons and their families, to go to South Haven, Michigan, for a week on the shores of Lake Michigan. This trip was planned a year ago, long before the pandemic. 

The economic question of paying for or canceling the three cottages in Michigan forced a decision upon us this week. If we gave up the cottages before July 9th we would not be penalized for backing out. 

We had a lot of imperfect information on which to make our decision. How dangerous was it from a sickness standpoint to travel by air from California? Are the COVID-19 tests accurate for both the current illness and antibodies? Could we maintain social distancing with 11 people, including kids who like to hug and play games and eat together? 

What Konnikova stressed throughout her interview was that in life we are always dealing with uncertainty. A doctor does her tests, takes a history, monitors symptoms, reads the journals, and talks to her peers to make a diagnosis, but then can still get it wrong. In poker you have to deal with the unseen down cards as well as deceptive techniques like bluffing. This could be similar to receiving lousy information from a patient.

But ultimately, a poker hand, a diagnosis, or even a trip, forces you to make a call. If a doctor is hesitant the patient will detect it, which may affect the outcome. A hesitant play in poker is an easy tell for a smart opponent to take advantage of. 

For our family, the indecision about the trip was causing anxiety for all of the adults involved. The underlying fear was the awful “what if my wife and I got COVID and ended up in the hospital.” We’ve both had open heart surgery, so the dire possibility could not be ignored. 

We gave in to the 1% or less possibility of a bad outcome for the family trip to Michigan. But we still have the opportunity for the family from California to stay at our big house with its large backyard in Chicago.

What Konnikova stressed is that there is no such thing as objective reality. However, the best poker player or the smartest decision maker has the ability to get outside of herself to see her own biases, fears, and assumptions. 

The question about the anniversary get-together is whether we can look at our fear for what it is and be wise and gutsy enough to accept the extremely small but real risk. I have reached that point, but my wife still isn’t sure that the risk is worth the reward. 

Konnikova’s book deals with the fact that life is not poker. It’s a lot messier. The consequence of a bad decision about COVID-19 could be death, while in poker it’s just losing chips. But the skills in poker and in life have many things in common. Developing a legitimate personal confidence that you will be right much of the time, while accepting that bad cards occasionally can kill the best of players is the way to live your life to the fullest.

Question: Would you go to a family gathering?

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A Gap in My Perception

By Lloyd Graff

We just recorded the biggest gain in stock prices for any quarter since 1998 with American unemployment at unprecedented levels. You don’t need to read the obvious in this blog, so let’s talk Yeezy, Kanye West, and Gap.

Gap stock rose 42% in one day last week when Kanye West announced he was designing a clothing line with his Yeezy brand on it, exclusively for Gap for 10 years. Gap’s value jumped $2 billion dollars with the news.

Being no fan of hip hop music, but mildly interested in West because he grew up near where I did on Chicago’s South Side, and because he met cordially with Donald Trump at the White House, I checked out Yeezy. The brand has turned Adidas from the German blahs to Jordan-esque cool with outrageously priced sneakers. A Yeezy pair of gym shoes may sell for $500 a pair if you can get them.

I really don’t feel the allure of celebrity apparel, but undoubtedly West is hot today and Gap, where Kanye worked as a kid, is capitalizing on his caché. Will Kanye West become a fading yesterday in a year? Not likely, with the magic of his wife, Kim Kardashian, continually polishing his image?

***

Another brand that fascinates me with its phenomenal stock performance is Peloton. The company sells an exercise bike and will lose more than $100 million this year. Yet it is worth more than Ford and Chrysler, and its stock has more than doubled since it went public a few months ago.

You don’t buy a Peloton at Dick’s Sporting Goods or Target. For $2,000 you can buy the hardware, but the secret sauce is the $40 a month subscription fee, which brings you a huge array of virtual programs. It also buys you status, because the Peloton bike is the Tesla of exercycles. Like Kanye’s $500 Kicks, it is the brand of the cool rich folk on the 40th floor of Manhattan high rises. And you can use it without having to schlep to the gym and put on a mask with the other infectious plebeians.

The branding is working brilliantly. The company is worth $16 billion.

***

Another fascinating story is Nikola, headed by Elon Musk wannabe, Trevor Milton. The company went public a couple weeks ago and has a market cap approaching $30 billion. They plan to build hydrogen powered semi-trucks at a yet-to-be-built plant near Phoenix. They might get a vehicle on the road in a couple of years. They are also taking reservations for a battery powered pickup truck called the Badger, which will eventually compete with Tesla’s Cybertruck, which Musk is already testing.

Nikola’s branding is clever, right down to the name, which is a play on the first name of the famous Serbian-American inventor Nikola Tesla.

***

One other stock I like to follow is DraftKings, which is an online sports betting company. The stock goes up and down with the likelihood of playing the baseball, basketball, and football seasons. When COVID flares up and players fall ill, the stock price falls. The company is valued around $10 billion dollars now. It is a play on the likelihood of a viable vaccine in a short period of time.

An assessment of Gap, Peloton, Nikola, and DraftKings, paints a colorful picture of America around the 4th of July 2020. The promoter and the entrepreneur are definitely alive. Should we be joyful or sad? Not a Yeezy question.

Question: Did Gap make a good deal?

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The Jackie Robinson Connection

By Lloyd Graff

Ed Howard was a star player for the Jackie Robinson Little League team that went to the Little League World Series in 2014. Last week, the Chicago Cubs picked him in the first round of the major league baseball draft. He was the number 16 pick overall, and it was the first time the Cubs have ever picked a Chicago player high in the draft.

The symbolism of an African-American from that Jackie Robinson team becoming a future Cub is powerful for me. As a boy, I went to Wrigley Field with my mother, an avid Cubs fan, to see the Cubs play the Brooklyn Dodgers when their best player was Jackie Robinson. 

Jackie came up to the Dodgers in 1947 to break the color barrier of Major League Baseball.  When I was 11 years old, I did not understand segregation in sports, but I do remember my excitement over the Cubs bringing in Ernie Banks and Gene Baker in 1954.

Drafting Ed Howard during this period of racial unrest in America is a reminder of the change I have seen in this country in my lifetime. Howard was considered the best shortstop prospect in the 2020 draft, but I believe the reason Theo Epstein and the Cubs picked him is because of the symbolism of getting a hometown black player from that Jackie Robinson Little League team which had captured the imagination of the city of Chicago. 

If Howard has just a hair of the charisma Jackie Robinson had, he will be a huge star for the Cubs.

Jacky Robinson Sliding into Home vs. New York Giants

I keep a giant photo of Jackie hanging in my garage, so every day that I leave the house I see Robinson stealing home against the hated New York Giants with the umpire calling him safe. Although I love baseball, it is the only baseball picture I have hanging in the house. I still have a bat signed by Ernie Banks, but that photo is the most significant sports memorabilia I own.

Race and sports and their interaction have been threads that have helped define me during my lifetime. 

I watched the greatest football player who ever lived, Jim Brown, from his days at Syracuse University to his incredible career with the Cleveland Browns. I was shocked when he retired from the game while still at his peak, also a huge sports memory.

In basketball, probably my greatest memory is rooting for the unknown Texas Western team as they defeated University of Kentucky for the NCAA Championship in 1966. Adolph Rupp coached the Kentucky Wildcats, who wouldn’t have a black player on the team until 1969. Texas Western was the first college team with five black players in the starting lineup, led by Hall of Fame coach Don Haskins. 

I have lived a lifelong struggle with my own gut-level feelings of racism, fighting with my feelings of kinship with black people as a Jew and an American, trying to live up to the ideals of my religion and country.

Jackie Robinson always will be my greatest sports hero. Here’s hoping 18-year-old Ed Howard, who went to high school a few blocks away from my childhood home, will become worthy of my walls and my cheers.

Question: Is baseball dead to you?

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How to Deal with the Police?

When I was growing up on the South Side of Chicago on Euclid Avenue, seven blocks north from where Michelle Obama grew up, my father taught me many valuable life lessons.

One that I remember quite vividly was what to do when I was stopped by a Chicago policeman while driving. My dad had illustrated his approach a few times while I observed from the car. He was proud of his skill and execution.

He told me, “Lloyd, right after you stop the car, turn off the motor and immediately get out of the car, stand erect, and walk up to the police car while the cop is still in the car. Apologize if you were speeding or made a driving error.” My dad had used this strategy successfully a number of times. He had also perfected the folded $20 bill concealed under the driver’s license play, which he was extremely proud of.

I never had the bold courage to do the folded bill, but I did try the jump out of the car routine a few times until a polite policeman told me quite forcefully to stay in the car with my hands on the wheel.

***

When black kids get their license they get very different instructions. My wife tells me that the parents of her black students live in mortal fear of their children being stopped by the cops and being harassed, or worse.

Ben Cohen of the Wall Street Journal wrote a nice piece Monday about Malcom Brogdon, who plays guard for the Indiana Pacers. Brogdon recounted the advice he received when he was 16 from his grandfather, who happened to be a civil rights leader. When he was given the family’s old green Toyota Avalon he had to sign a binding legal contract before he got behind the wheel, which set forth how he was to behave if he ever was stopped by the police.

Brogdon said, “I was taught to put my hands on the steering wheel, to turn off the music, to roll down every window of the car, to put my blinkers and emergency hazards on, and sit there silently and comply with the officer until he let you go.”

Brogdon followed the instructions correctly and came out ok when he eventually did get stopped. His mother, a professor at Morehouse College, says she was relieved but still fears another incident could get out of control.

***

A couple days ago, the Wall Street Journal and the New York Times, which usually disagree about everything, wrote remarkably similar pieces about rogue police behavior toward African-Americans. Both articles pointed out the terrible role played by police unions, insulating bad cops from being kicked off the force or being prosecuted. The union seems to think it is their sacred obligation to protect even the dirtiest of cops, especially in cases of racial targeting.

The need to clean up police practices in America is not a liberal vs conservative or Democrat against Republican issue. We desperately need order today, but the endemic fear African Americans have toward the police is bad for the whole country. Blunting the power of police unions is one thing that America can agree on.

It is doable if partisan blabbing doesn’t get in the way.

I much prefer it to the $20 under the license that I never had the guts to try anyway.

Question: Are the police being persecuted? 

 

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Zooming in Different Worlds

By Lloyd Graff

I feel like I am living in several different worlds. 

During the day I am a business guy, trying to put together the diverse strings of commerce around the country and the world, culminating in a buy and a sell with a margin of profit for my company built into it. The outside world keeps telling me that there isn’t anything but scraps to be had, but I am finding a lot of opportunities when I contact the smart small and medium-sized business owners who are sniffing for opportunity at the moment. It really is quite refreshing to connect with these aggressively optimistic folk who ignore the gloom of the TV and radio blabs. I feed on their energy and they seem to enjoy mine.

As the late dusk sinks in, I turn on the news shows, which at the moment are immersed in pictures of broken windows, strewn Nikes, and stray flat screen TV boxes thought to symbolize the moment. It is demoralizing and scary journalism with no depth of understanding, just an abject play for ratings and a rising fear quotient. It affects me, even though I know it is a transient flicker of pain in 2020. The race riots have replaced COVID-19 this week as the story of the moment.

COVID is a lingering story of government mismanagement framed by the paranoid thirst of the press. It is an extremely costly one, but the threads of fear have a vibrancy for me in the death numbers of older, sicker people which comprise 80% of the dead.

Then I check stock prices and oil prices before I go to bed. Stocks are near their record highs. The NASDAQ, which has younger firms, is 3% below its all-time high. If I am looking for an indicator of optimism in America and investors from around the world, this is where I look for it.

I also take my assortment of medicines at night, which include a statin for cholesterol, a refined fish oil for all around cardiovascular health, and a Bystolic, which is an amazing beta blocker that controls high blood pressure. The negativists who see the world in decline don’t understand that people like me would never be alive at 75 after a heart attack 12 years ago. Folks living in the good old days of 1962 never would have recovered from blocked arteries like mine and their kids might well be in Iron Lungs with polio. 

We are likely to have a COVID-19 vaccine that actually works by the end of the year.  We now have a useful treatment for the illness, which will be augmented shortly. 

Not to be ignored is the rapid adoption of Zoom to connect people. My wife Risa uses it every day. I get to see my grandkids more often than I ever did before. Some young entrepreneurs infiltrated the market with a better product and took a dominant position in person to person TV while the giants, Google, Microsoft, and Cisco, slept. Now they are hopelessly behind.

The SpaceX Dragon 2

Before I go to sleep at night, I like to imagine the possibility of Zoom connecting the world with American astronauts zooming up to the International Space Station in Elon Musk’s rocket taxi. Yet the image of a brick smashing a Macy’s window plunders my calm. 

It’s June 2020. My life is good except when the noise of the day interrupts my joy of being alive.

Question: Do you still listen to the news?

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Ep. 83 – Tooling Machines to Fight COVID-19

By Noah Graff

Today’s guest on the show is Gordon Erickson, founder of KWALYTI Tool in Batavia, Illinois. KWALYTI specializes in tooling up packaging machines, often for food products such as meat and cheese. Since the COVID-19 crisis began, KWALYTI has played an essential role in combating the epidemic. The company has tooled machines to package cotton swabs for coronavirus testing. Soon it will be tooling machines that produce pouches for holding N95 masks so they can be sterilized for reuse.

Scroll down to listen to the podcast.

(2:45) Gordon talks about his company KWALYTI, a machine shop, located in the Batavia, Illinois. He says KWALYTI rebuilds and tools up vacuum packaging machines, primarily used in the meat and cheese industry. When you see the vacuum packages holding hotdogs or bacon they are probably produced with the type of machines his company works with. 

(5:00) Gordon talks about tooling packaging machines for both the food and medical industries. For the medical industry KWALYTI has tooled machines that vacuum pack suture removal kits and packages of gauze. KWALYTI also services and troubleshoots the machines it supplies.

(9:30) Gordon says that KWALYTI has suppled three machines to Vienna Beef, the hotdog brand that Chicago is famous for.  

(10:50) Gordon talks about how KWALYTI has been relied upon during the COVID-19 pandemic. He says when Illinois Governor Pritzker instituted the shelter in place order he quickly got a call from Vienna Beef and some other customers telling him the company needed to stay up and running because it was their main parts and service provider for their packaging machines. Also during the pandemic, demand for vacuum packaging machines arose when food that had usually gone to restaurants was diverted to grocery stores.

(13:30) Gordon talks about supplying molds to a company in Florida to change over its machines from packaging syringes to packaging nasal swabs for virus testing. He said the company was running three shifts a day making 3” swabs. 

(15:30) Gordon says that KWALYTI is in the process of making a perforating system that goes onto a machine to makes special pouches. Medical workers will put their used N95 masks in the pouches, which then will undergo an autoclave sterilization process overnight so they can be reused the next day. An autoclave process exposes the pouches to 250 degree Fahrenheit direct steam. The pouches have one side made of plastic and the other side made of a material called Tivek.  

(18:45) The same company that makes pouches to sterilize the masks also had KWALYTI make a tool to use in machines that make plasma bags. He says some of the tooling his company produces could have taken months to import from Germany, but he was able to produce them in a week.

(20:20) Gordon says he doesn’t point the finger at the government for not being more ready to deal with supply chain problems because nobody could predict what was going to happen. He says many critics are “hindsight engineers,” and in his case, suppliers knew right away they needed to insure food packaging machines stay up and running. 

(23:40) Gordon says he likes his business because it helps people people make their ideas happen. He says that tooling machines to combat COVID-19 doesn’t give him much more purpose in his work than he had before because he always felt his products were vital. Though he says right now he has more pressure than usual to get products to customers faster. 

Question: Should people wear face masks when they go out of the house?

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