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Happy Mother’s Day?

By Lloyd Graff

FYI: If you have ended up on this blog post after clicking the link for the “My Quest for Serendipity” blog on the email blast, click here to the go the proper post. 

 

 

 

Growing up, I never really “got” Mother’s Day. My mother never did either. 

The holiday was a big deal, but not for her. It was always about my grandmother, my father’s mother, Ethel Graff, who I think my mother hated. She cast a pall over our family because my dad, a strong, powerful and loving man, was manipulated by her for as long as she lived. 

We saw her every Friday night and Sunday. My father physically visited her almost every day when I was growing up. I was reminded of her and my grandfather, Louis Graff, who died three years before I was born, when I saw the latest Henry Louis Gates episode of Finding Your Roots, featuring my cousin, Mandy Patinkin, who I loved in The Princess Bride

My brother Jim, who is much more of a student of our family than I am, sent me the link to the episode a few days ago and filled in some of the holes in the family story. Three Patinkin siblings married three Pinkert (Pinkevich) siblings. They hailed from a shtetl in Russia/Poland, called Bransk.

Ida Graff, my great aunt, married a Pinkert, Simon. Supposedly, he slept in the same bed she did right after he came over from Europe because he was working at night in a bakery. When she vacated the bed in the morning, he jumped in. He must have liked the scent because they eventually had 12 kids together. 

Simon soon started a business with a Patinkin, Max, who was Mandy’s grandfather, the father of Lester Patinkin, a contemporary of my “Uncle” Aaron Pinkert, who was a few years older than my father.

Lloyd’s childhood home on Chicago’s South Side

So the Graffs, Pinkerts, and Patinkins were all very close, growing up in the Englewood neighborhood in Chicago. Somehow my grandfather, Louis Graff, ended up marrying Ethel Levinson in an arranged marriage. She was a rabbi’s daughter. A local matchmaker set it up. Louis met her on their wedding day and often told my dad it was the worst day of his life. 

I guess divorcing the rabbi’s daughter was frowned upon in those days, and he chose not to walk away. 

My father was the youngest of five children, four of whom lived full lives.

He lived with a mother who was neurotic on her good days, psychotic on the bad ones. She underwent many shock treatments and spent time in sanitariums. My father spent many of his growing up hours with his relatives, the Pinkerts, Lavins, and some of the Patinkins.

His father, Louis, never knew how to deal with his wife, Ethel, and died at the age of 54 of a heart attack. My father Leonard took over the management of his mother, except for a couple of years when she moved to Kansas City to stay with my Aunt Edith, his oldest sister. My dad was forever grateful to her for enabling him to start his business and get married to my mother, Thais Kassel.

My mother was swept off her feet by my father and loved him deeply, but at 19 years old she was unprepared for dealing with his mother and their relationship. 

I watched this dynamic as I grew up. I saw my Grandma Graff as pathetic, nasty, and strange. Gradually I began to understand the family dynamic, but I never really understood my mother’s anger and sadness about my dad’s situation. My father tried to make it up to her, but the Friday night dinners and Sunday afternoons with Grandma Graff were obligatory to him and everyone just accepted it. 

So Mother’s Day was Grandma Graff’s Day. It was never a happy day in our house. My mom sucked up her feelings, my brother and sister said the hollow, expected, laughable greetings, and my dad’s siblings ignored her. 

I tried to make the holiday tolerable for my mom, but it ended up being a weird day at our home. I always tried to watch the Cubs game with my mom on TV with broadcaster Jack Brickhouse. He was a much better companion than sitting with my grandmother.

Question: What is one of your favorite memories of your mom growing up?

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Ep. 117 – Mental Recovery with Dr. Ari Graff

By Noah Graff

On today’s podcast we are continuing our season about mental health.

Our guest is Dr. Ari Graff, a psychologist at the Shirley Ryan AbilityLab, a nationally ranked rehabilitation research hospital based in Chicago. Patients come to Shirley Ryan to recover from severe illnesses and injuries. Dr. Graff’s job is to help patients mentally heal from the emotional trauma that comes along with being damaged physically.

The opinions in this podcast episode are solely those of Dr. Graff. They are not on behalf of the Shirley Ryan AbilityLab.

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

 

 

 

Main Points

Noah introduces Dr. Ari Graff, who happens to be his older brother. Ari has been a practicing psychologist for the last 14 years. He has a private practice doing therapy mainly with adults, and he also has been working at the Shirley Ryan AbilityLab for 11 years. The Shirley Ryan AbilityLab is a rehabilitation center for people who have suffered severe illnesses and injuries such as strokes, brain injuries, spinal cord injuries, and amputees. (2:30)

Ari is the psychologist of Shirley Ryan AbilityLab’s outpatient clinic. Patients there are in the process of intense rehabilitation, often doing physical therapy, occupational therapy, and speech therapy. (4:00)

Ari says he sees around half of the roughly 150 patients who attend the clinic throughout the week, usually seeing patients only once for an hour. Sometimes patients request to a see a psychologist, but often they are referred to him by their rehab team or a physician. He says often he is the first mental health specialist patients have ever worked with. Generally they are not expecting to speak with a psychologist because they have been focusing all of their energy on their physical recovery. (5:20) 

Ari says it surprised him at first how much impact just one hour-long session can have for patients. He says they get a chance to feel understood about what they are going through. They learn about what to expect from rehab. They also hopefully gain a better understanding of their own mental state. (6:40)

Ari says a common issue rehab patients have is that they don’t feel like they are in control. Becoming disabled is difficult for people to adjust to. One thing Ari tries to help them cope with is the uncertainty whether they will recover from their current disability.(9:00) 

Ari says he tries to make people focus on the things they have control over rather than what they can’t control. He encourages people focus on their diet, sleep, and ability to manage stress. He encourages people to try to understand their condition and limitations. He also suggests to patients to communicate with their doctors and health providers to understand the recovery process and to advocate for themselves. (10:00)

Ari says it’s important for him to educate patients about what to expect during the rehabilitation process. He says after a stroke or injury to the brain, the brain needs time to recover. Research says this recovery usually happens in six months to a year, so it’s important for patients not to feel frustrated when they are not back to normal quickly. He says it’s important to give people hope as well as realistic expectations. (12:00)

Ari talks about the mental recovery for people who have been injured on the job. He says those people might have anxiety about going back to work. It’s important for them to process their feelings about how they were injured and process feelings of blame for coworkers, as well as blame for themselves. (14:00)

Ari talks about people he works with who are recovering from severe cases of COVID-19. Some people suffer the effects of being on ventilator for a month or two. Some people are weak or immobile after being in bed for a long time. Others suffer brain injuries if not enough oxygen gets to their brain. People also suffer psychological trauma from the illness, particularly if they were not able to see their loved ones while in the hospital. (15:00)

Noah asks Ari if he has advice for people whose coworkers are exhibiting mental health problems. Ari says some companies have employee assistance programs that provide some limited mental health support. He says it’s probably tricky for a coworker or boss to help another worker seek mental health support. (18:00)

Dr. Ari Graff, Psychologist at Shirley Ryan AbilityLab

Ari compares talk therapy with prescribing medication to help people with their mental health. He believes both methods of therapy can be helpful if administered the right way. He says people should not assume that prescription medication is being abused. He says that sometimes for patients he sees at the rehab center, opioids can be very helpful for them during a physical therapy session when their pain would otherwise be so excruciating it could hinder doing their rehab exercises. (19:00)

Ari talks about helping his patients manage their pain. He says that pain is not just a physical experience. It’s a cognitive experience, an emotional experience, and even a spiritual experience. He says research has shown that negative thoughts and emotions have the power to increase pain while positive ones can alleviate it. He uses therapy methods such as mindfulness and meditation, which can help people observe their thought processes about pain and then start to make shifts from a negative to a more positive and realistic thought process. (22:00)

Noah asks Ari if everyone could benefit from therapy. Ari says he thinks most people could get something out of therapy, but there are a lot of different types of therapy available, so people need to find their right fit. He says it is important for people to attend to their mental health the same way they attend to their physical health. (24:00)

Ari says to him the word “happiness” means contentment, fulfillment, and purpose. He says that most people desire a sense of meaning in their lives, not just joy. (26:00)

Ari says people in recovery need to know that they can find value in themselves, even if they have limitations. He says our culture emphasizes measuring people by how much they can produce and achieve, but people need to know that we all have intrinsic value. (26:30)

Ari explains mindfulness, which is an important method he uses in his therapy. He explains it as non-judgmental attention to our present experience. It’s a way to be, without trying to fix or do something in the moment. He says it is important for people to be aware that they can still find value in life—take some downtime for pleasure, interact with family members, etc., while still working toward their big goals. (27:00)

Ari concludes by saying that people should not see their medical problems only as a setback. He says the people who cope the best with their problems are those who look at their situation as an opportunity to learn or grow from. Instead of only seeing their injury in a negative light, its helpful for people to try to find the positives they can get out of it. (28:45)

Question: When has therapy helped you or your loved one?

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Resilience

By Lloyd Graff

Noah challenged me yesterday as he often does. He said to me, “Dad, what three things have you learned in the last week?” 

The question forced me to assess what thoughts have had an impact on me, something I seldom do unless I am writing a daily diary. 

This week I’ve learned about resilience.

***

I have been corresponding with a casual friend who used to live in my neighborhood. She and her husband, a doctor, moved to Buffalo for a medical position more than a decade ago. He was struck down by a near fatal heart attack a month ago.

The story was so eerily familiar to my own. Doctor Mike and his wife Barbara drove to the hospital because he was feeling lousy but not awful enough to call an ambulance. The nurse listened to his heart, quickly called the emergency room and cardiologist, and Dr. Mike was whisked off to surgery.

A quintuple bypass operation in the nick of time barely saved his life. Since then, he has been in and out of the ICU, and on and off of a ventilator. He has suffered from arrhythmias and scared his wife almost to death. Part of her therapy has been to write to family and friends.

Because of COVID, only one person has been able to visit Mike at a time. The couple had recently moved to the Washington DC area where their daughter and grandchildren live, but there are very few people there who they know.

My connection with Barbara is that I can tell her about what it is like to have a heart attack, almost die, and live to tell my story 12.5 years later. It lifted her spirits and her children’s to learn of my experience. When you see your husband for days and days on a ventilator, hear the fears of the doctors that flit in and out, always cautious and frequently covering their behinds by telling the possible worst case scenarios, the time passes slowly.

I was happy to relate a real best case outcome for her to take home to her lonely apartment in DC. My wife, Risa, also wrote, telling Barbara what it was like for her when I was in the hospital.

Mike was supposed to come home today after more than a week of ups and downs in a rehab facility. Risa knows what it is like to be the first line of defense when there are no medical professionals around.

I was never that close to Mike and Barbara in Chicago, but this experience has brought us together. I wrote to her a few days ago, telling her that the fear never totally goes away. Live every day. 

Resilience.

***

Another story of resilience Risa told me about yesterday concerns the daughter of her Tae Kwon Do Master who lost her teenage daughter to cancer two years ago. She also suffers from multiple sclerosis. She is well into her 40s. 

She had an enormous desire to have another child and was able to harvest her eggs for an in vitro attempt. Her younger sister, who already has four children of her own and is also over 40, agreed to carry the potential baby. Against huge odds, they are midway through the pregnancy with high hopes for a healthy birth and baby. 

Resilience.

***

Monday night, Baylor beat Gonzaga to win the men’s NCAA basketball tournament. It was Coach Scott Drew’s 18th season at the school. He arrived in 2003 at the age of 32 after one year as head coach at Valparaiso.

Scott was attracted to Baylor because the basketball program was in shambles. One teammate had shot and killed another teammate, and the former coach had been caught giving under the table cash to team members. The NCAA took away most of the team’s scholarships. Scott took the job nobody wanted, perhaps because he felt there was no way things could get worse.

His first year, Scott held tryouts to find players. Most of the kids who tried out didn’t even go to the school. But Scott Drew was tenacious and Baylor received a bid to the NCAA tournament in 2006. 

The program got stronger and stronger, and it developed a reputation for being able to utilize the skills of different types of players. 

Last year’s team would have been a #1 seed if the tournament had not been canceled by COVID. This year, Baylor was ranked number two all year with Gonzaga undefeated and #1. The two teams had been scheduled to play one another in December, but COVID again had canceled that game. 

Monday night, Scott Drew’s Baylor Bears absolutely slaughtered Gonzaga.

Resilience. 

Question: When has resilience come into play for you?

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Ep. 32 – Work Less and Do More, with Ari Meisel

By Noah Graff

Like many people, I get overwhelmed at work. Sometimes I don’t get the work done I want to do, so I stay at the office an hour or two extra. By the time I get home I feel like I don’t have enough free time for relaxation and other activities.

Scroll down to listen to the podcast with Ari Meisel.

I have been repeatedly listening to a book called The Art of Less Doing, by Ari Meisel, today’s podcast interviewee, which has had a real positive effect on my life. Meisel, who calls himself an “overwhemologist,” has a mission to cure the inefficiencies of folks like me so we can have more success professionally and have a lot more free time. He preaches that the secret to having the time to run a successful business and having free time to relax is to become “replaceable” through automation and outsourcing. He says that if a business cannot be run without you then you don’t own a business, you have the privilege of owning your own job.

In the book and with his coaching firm, Less Doing, Meisel provides resources for people to automate processes and then outsource tasks when necessary by using a virtual assistant. He says the ideal is to automate a task before giving it to another human being to accomplish. Some automation methods can be simple, such as creating automatic bill payments, having supplies automatically queued to be sent at the same time once a month, or having email automatically sorted between junk and important contacts.

Ari Meisel on Replacing YourselfMeisel also believes in the merits of a virtual assistant. This was something I had not really considered before and felt a little embarrassed to try, but several months ago Graff-Pinkert hired a man in Albania to work for $10 per hour. He looks online for new contacts to add to our database and he advertises our machines on the Web. In addition to speaking Albanian he speaks English, Swedish, and Turkish, which may come in handy for Turkish customers in the near future. This has freed me up to talk to customers and focus on more complicated tasks. I admit that he sometimes does a more complete job than I would on certain tasks because my attention would have been diverted. Meisel says that the brain is not designed to multi-task, so this result makes sense.

In addition to automation and outsourcing advice, Meisel prescribes a scientific approach to working efficiently based on brain research. He says it is important to find one’s personal peak time to work, which can vary significantly among people. Mine seems to be from about 9:00 a.m. to 11:30 a.m. He also believes that setting time limits makes a huge impact on productivity. Studies show that people often make work take the exact amount of time they are allotted, which is why many people, such as myself, work the most efficiently right before a deadline. Data also shows that the brain often works better in sprints, so rather than trudge through a to-do list, only stopping when one task is finished, it is best to work in 25 minute increments, taking five minute breaks in-between.

The idea of working less hours and becoming replaceable can be difficult for people to swallow because doing more work makes us feel valuable in our workplaces and society, but Meisel teaches that once you learn to do less, you can accomplish so much more.

Questions:

What tasks do you wish you could do more efficiently?

Are you replaceable at work?

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An Interview: Winfried Benz of Licon mt

Winfried Benz, Managing Director of Licon mt, has observed that the implementation time required in the industry is constantly decreasing. The company is responding to this with optimized processes and an expanded range of products.

Q: Mr Benz, Licon mt has announced that it intends to focus on new markets and target groups. What are the motivations for this shift?

A: This goes hand-in-hand with our product development. In terms of the size of workpieces to be machined, we have moved from large to smaller parts in the area of twin-spindle machining centers. With our latest development, the twin spindle machining center LiFLEX II 444, the machine is optimum for parts with dimensions less than 450 mm per side. We discovered that there was also interest in the non-automotive sectors for 5-axis machining on five sides. The automotive segment, in which we currently generate 95% of our business, continues to be the main pillar of our portfolio.

How did this develop?

In the 1990s, we predominantly built special machines. We initially focused on adapting the single-purpose dial machines, which have evolved into the fully-flexible 5-axis rotary transfer machines of today. These were the mainstay of our business for quite some time, until machining centers were added. In comparison to our competitors, we were relatively late in joining this market, but we did so by introducing very large applications immediately: B-axis with 1,000 mm rotation diameters, A-axis of  1,700 mm swing diameters, as well as 900 kg load per palette. Our twin-spindle machining centers are available with X travels of up to 1,000 mm. The heavy duty HSK 100 machines used for great cutting forces came first, the medium platform with 700 mm spindle distance came next, and now we have the 450 mm machine.

It was clearly a decisive step to introduce lower volume machines into the portfolio. Do you agree?

Yes, that is correct. Rotary transfer machines are optimal for highly precise, complex workpieces with six-figure annual production volumes. Machining centers however complemented our product portfolio and also allow us to be a supplier to our existing customers if they required lower production volumes.

Is the overall trend headed towards machining centers?

That is not necessarily the case for us. In general, machines that  incorporate the ability to adapt to workpiece modifications are of course required, which is why our flexible rotary transfer machines continue to be in demand, but then we also need machines for lower production volumes.

Of your customers, 95% are from the automotive sector. Has this always been a positive?

Yes, but at the same time it has also been hard work, above all with respect to the continuous optimization of processes. Working as closely and directly with automotive manufacturers in the OEM business as we do, the benefit is that you are always immediately involved in new product lines. We can produce the latest components and encounter trends from the very start, which allows us to adapt accordingly. The effects of general economic cycles are not as strongly evident because new products always have to be manufactured.

The automotive sector is constantly evolving. Which changes have a particular impact on you?

The demands on quality and precision have been increasing significantly, particularly in Germany and especially by the high volume manufacturers. This of course drives us to strive for even greater perfection. And not only do we need to account for the constant evolution you speak of but development times are also decreasing further. We are a mid-sized company of 200 employees and although we feel that we have taken the appropriate steps, we need to continually strive for more. But we have to be careful that the pace does not increase too dramatically. Optimizing our processes is an ongoing course of action so that we can manage the impact of market changes on the company, which can be quite sudden at times.

What does this increase in pace entail exactly?

Allow me to give a specific example. A machine was ready to deliver to our customer, who then informed us that their raw materials supplier had become insolvent and a new one had not yet been found, but that they would like us to adapt the machine to the new raw work-piece. Despite this change, the original delivery date was to remain the same.

Surely this is an exceptional case?

Actually, that is almost the norm today, particularly when work-piece prototypes are required for vehicle tests. For our turnkey processes we not only supply the machine, but also fixtures and tools. We guarantee our customers will receive machines that  produce within dimensional specifications and reliable cycle times, and consequently the net output. This means we are actually involved in the process of optimizing the work-piece.

How do you manage to supply quality at competitive prices?

The strength of our development means we are able to do a great deal ourselves. We therefore constantly optimize our processes. To ensure all the final parts, such as fixtures, spindles and rotary axes, are of top quality, they are developed and manufactured in house. As a result, we have control over the technical and technological relationship between all parts of the machine tool. This means, for example, that we can optimize the required specific harmonic frequencies according to the purpose for which they are being used in every single machine. To achieve this, comprehensive machine-specific calculations and simulations are necessary, which we are now skilled in and able to verify with calculations appropriate to the actual machine. Theoretical and practical knowledge, combined with the courage to tread new paths, allows us to deliver optimal solutions to our customers on competitive terms. This also applies to the Chinese market, where it is an uphill battle at times, but we are certain this serves to strengthen our market position in the long term.

What role does the modular construction of the machines play?

This is extremely important to us in the development of our machines, but we are also very much aware of its limitations. Modules cannot be exchanged randomly and at will. The knowledge we procure from the further development of individual modules subsequently advances our entire machine tool kit. In a technological sense, this knowledge is a common thread in our module development and it is above all our customers who benefit.

Aside from the automotive sector, which other industries do you have your sights set on?

Although we are not yet actively entered in other markets, interest has been coming mainly from the construction industry and to some extent the aerospace sector. We are particularly seeing demand for twin-spindle 5-axis machines with small X strokes and high load cutting capacity. This is a niche market. For our larger twin-spindle machines, we can supply independent X, Y and Z axes, which are absolutely essential for narrow tolerances on large work-pieces.

Are you also considering production outside Germany?

Not at the moment. Our customers choose us because they trust that we will complete the entire order as a turnkey solution. In recent years, our machines have become more cost-effective through ongoing performance improvements, while Chinese machines have in fact become considerably more expensive at the same time. We will almost certainly never be able to supply a machine to China if a work-piece tolerance is the only consideration. For this reason, we will only operate in the high-end sector in the future.

How do you structure the company in such a turbulent environment?

Lean management has been implemented throughout the entire company. We have been operating under this management principle for many years and have further intensified it over the last two years. This year we want to expand our service capabilities.

How do lean management and improved service fit together?

One example is the topic of speed of response. It is not easy to have the proper worldwide service in terms of expertise required as well as quick response, because providing the right global service whilst also being fast is not always easy.

What exactly does lean management consist of at Licon mt?

A key element is that we operate according to clearly defined standard processes, even when designing customer-specific solutions. We set great store in regular communications as well as visualizing processes and process results. Our employees therefore have the opportunity to learn about workflows and processes in a general context, whether in the development or production of our products. This is an advantage when compared with larger companies where this is only possible to a limited extent given their overall size.

Is it difficult to find skilled personnel here in the region?

If very specific qualifications are required, then yes it is. Highly specialist employees have to be trained by the company itself, which we do. Aside from this, we have not had any problems finding employees with the right commercial and academic skills. I personally think that inexpensive is not an option in Germany anymore. Being capable is the way forward. Given the required response speed I mentioned, we need our employees to also be highly flexible and driven. There is a price to pay for that.

What is next for Licon mt?

We intend to offer a wide range of spin-offs from our small LiFLEX 444 twin-spindle machine featuring different spindle distances and different configurations, in both HSK 63 and HSK 100.

Are these product variations not encroaching on the territory of special machines?

Yes, they are. In the machine tool market, everyone talks about their standard machines, but for project business, which is what our forte is, it is always necessary to address and respond to customer needs.

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Swarf: Nielsen’s Bakery

I had a hankering for a croissant and decided to drive over to Nielsen’s Bakery, a local bakery I don’t go to often, but they made nice croissants. All I found was a letter on the window saying they had closed after 21 years. The letter read like a note to a few insider friends and I could not really understand what it said, except that they were closing.

The letter confirmed to me why I had not patronized them for years. I always felt I was an outsider there, a tolerated visitor interrupting a local Kaffeeklatsch (an informal gathering) at the local clubhouse.

Nielson’s was in downtown Homewood, Illinois, next to the commuter train stop. A Starbucks with a drive-through now operates on the other side of the parking lot. The Starbucks does $20,000 a week in business and there are two other Starbucks in the area that do a similar amount of business. My guess is that Nielsen’s was lucky to do $5000 a week. Nielsen’s was a daytime operation while Starbucks is open 5:30 a.m. to 10 p.m.

Another local bakery, Sweet Annie’s, opened three years ago, and in my opinion that was the final blow that killed Nielsen’s. Not only were Annie’s baked goods superior, the ambience of the shop was warm and welcoming.

Another element most likely came into play in the demise of this small business. Homewood, like the rest of the south Chicago suburbs where I live, is becoming a predominantly African American community. Nielsen’s was clearly an old school Homewood institution, patronized mainly by Caucasians—and proud of it. If I felt like an outsider when I walked in, I’m sure a black person would have felt uncomfortable there.

The restaurants and stores in my neighborhood need to feel like they are connected to their customers. Most businesses, even those that do business online or on the phone, need to have a welcoming feel. Airlines with call centers in India lose tons of business because the people who finally answer the phone have no personal touch, are unable to connect with the customer, and are often hard to understand. Cold callers who read from a script rarely get more than a sentence out before I hang upon them.

A machining company owner that thinks he or she is just selling parts with no need for a personal connection with their customers does not understand how business works.

Nielsen’s Bakery didn’t fail because of the recession, though it didn’t help. They failed for many reasons, but the primary one was that they just wanted their little neighborhood bakery to stay the same while the world around them was changing by the day.

Today’s Machining World Archives April 2011 Volume 07 Issue 03

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Swarf: The La Brea Tar Pits of Machines

Today’s Machining World Archives June 2011 Volume 07 Issue 05

By Lloyd Graff

I haven’t gone to an old-fashioned open outcry auction at an automotive factory in quite awhile. For sheer drama and boredom the Hilco Industrial four day 7000 lot sale this week was a throwback to the days when men were men and spark plugs were made on screw machines.

Lloyd Graff with auctioneer Robert Levy

The sale was at GM’s old Willow Run transmission plant—6 million square feet under one roof—that used to be a farm owned by Henry Ford in Ypsilanti, Michigan, near Ann Arbor. Today the biggest non-government, non-university employer in the area is Domino’s Pizza, which is currently spending millions to advertise its fried chicken.

During World War II, Willow Run turned out a B-24 bomber every 45 minutes. GM used to employ six guys full-time to fix the roof, the electric bill was $500,000 a month, and the parking lot could fit a dozen U of M Big Houses. This joint was BIG. It took 10 minutes to travel end to end by electric golf cart. By the end of September when the last Knaack toolbox is gone, this mammoth structure will no longer bleed Lava Soap.

For me it was a kick to hear Robert Levy, the Alex Trebek of the auction stand, warble his “do I hear” doo-wap, selling everything from surface plates to Vidmar cabinets. Robert is 53 now with almost 30 years away from his jewelry making days in London when he indulged in his artistic side more than his deal making acumen. Robert is a virtuoso on the stand, which became apparent when the pretenders stumbled trying to sell grinders with a “privilege.” The “privilege” is a clever ploy to extract more money from the bidders by offering to sell the option to buy multiples of similar items to the high bidder—capitalizing on the fear that the successful bidder might take every piece.

I love the animal instinct that bubbles up in an open outcry sale. The silence of the Web gives way to the belligerence of testosterone bulging egotists who like to posture at sales. The auctioneer plays on the competitive juices, weighing the facial tells of each bidder, with the added excitement of Internet bidders who are waiting anxiously online.

An auction event like Willow Run has been a year in the making. It was actually the last of three sales to finally quiet the machines that once turned out the components of those Chevy Impala transmissions that used to fall apart after 40,000 miles. That was when cars were cars and Chevrolet was apple pie.

My brother Jim and I schlepped to Ypsilanti because it was sort of the La Brea Tar Pits of screw machines. GM had amassed almost 200 multi-spindle automatics, mostly Acmes, from 9/16” capacity to 6” RB6 and everything in the middle. Oh, the heavy metal music they must have made. The floor must have rocked when those spindles were turning.

On the two days Jim and I attended, there were more bidders online (about 300) than there were in the audience, though most of the items were bought by attendees. There were many attendees from what we used to call “Third World countries,” who now have more money to spend than Americans. A large number of Indians were present, but they seemed to be mostly chatting and playing cards amongst themselves. India is developing a serious automotive business these days with Tata Motors buying Jaguar for some unfathomable reason, self-flagellation I suppose.

Auctions like this bring out odd valuations, like a Ridged pipe threader selling for more than a 1-1/4” RA6 Acme screw machine, or an EA Cincinnati Centerless fetching $10,000 while the perennial stalwart 220-8 went for $6,000. A 1000-ton press didn’t get a bid because the rigging costs surpassed the value of the machine. Ultimately, the real “vulture” capitalists, the scrappies, will hack away at it and tote it in pieces to the furnaces.

I found the whole thing a scene. It was Schumpeter’s creative destruction in action. Old Detroit is dismantled. New Detroit rises in Saltillo and San Antonio. Detroit—it’s the home of Little Caesars and Domino’s. Add a little extra sauce.

On May 12th, an interesting auction took place at Smart Parts near Pittsburgh. Smart Parts used to make paintball guns, until the recession and a big miscalculation about a Wal-Mart order for its equipment put them on the road to bankruptcy. The management of Smart Parts had been on top of the world as paintball caught fire. Wal-Mart wanted to get in on the fun and Smart Parts ordered two (CNC) Hydromat Epic machines in 2007 to meet the forecast demand.

They paid well over $2 million for the two machines—then the bottom fell out and sayonara. At the sale the two machines brought $920,000 and $550,000, including buyer’s premium.

Hilco Industrial auctioned off the machinery. They sold seven Star Ecas 32mm machines, as new as 2006, for prices ranging from $255,000 for the newest to $145,000 for a 2003 machine. The one Star SR20II brought $140,000 including buyer’s premium.

The sale highlighted the rising cost and scarcity of 32mm Swiss-type lathes. An E32 Citizen from the ‘90s brought $80,000 and another brought $40,000, very high for older style machines. The Smart Parts sale was the right machinery at the right time. On the same day, multi-spindle screw machines were auctioned off at Whirlpool in Benton Harbor, Michigan. RAN6 and 2 RB6 Acmes fetched under $5000 each, and New Britain Model 62 machines in the 1980s with pickoff attachments sold for $15,000 each. Two Hydromat Inline machines, of which very few were ever made, sold for $120,000 each, and a 10-station Pro20 brought $50,000.

Answers to the seven questions I asked before PMTS
1. Is there a slowdown?
My impression is that business for the builders is generally good and getting better. High gas prices do not seem to be deterring the high level of buying. The Swiss lathe importers—Citizen, Star and Tsugami—are crazy busy. For equipment like Hydromats and multi-spindles, which are heavily focused on automotive, there is a bit of hesitancy.

2. Can the Japanese companies get inventory?
Not enough. Toyota is hurting along with the others. Hyundai is out to claim 10 points of market share. In machinery, the importers tend to order far ahead. Certain sizes are scarce, like 32mm machines. Tsugami claims to be unaffected. If it is a 1200 machine year for Swisses here, deliveries will be strung-out in some models.

3. Are high prices because of the weak dollar hurting sales?
Yes. I talked to the Tajariols, Andrea and Michi, who own ZPS. The $1.45 euro is hurting North American sales. The 32mm 8-spindle Euroturn, the crown prince of the mechanical screw machine line, used to sell for $450,000 in 2003. Today it’s $750,000 with bar loader and attachments. It causes sticker shock.

4. Does anybody go to shows except exhibitors and kids in flat brim hats?
Yes, the locals. PMTS this year was a Midwestern—especially Ohio—crowd. Most people drove from a 250-mile radius. But there are a lot of good buyers left in the Big Ten. The kids in flat brims were there and I regret the pejorative tone to the original question. The hats may look stupid to the old guys but the kids aren’t dumb. I think the tide is turning about “everybody needing to go to college.” College is starting to look like a bad economic buy for a lot of kids and parents now, so we may be getting a more serious group of flat brims into the machining community. Unfortunately, virtually no people of color or women showed up at the show.

5. Is the Swiss market headed more toward the fewer-frill machines like the “A” Citizen?
Yes. The price differential between an “A” model Citizen and an “L” model is $100k. Because of the weak dollar, an “A” costs what an “L” used to cost, and it is a very capable machine.

6. Will the Big Three Swiss companies dominate the Swiss market without a real challenge by an outlier?
Yes. There was not much buzz about the smaller brands. Tornos is now an afterthought here. Index wants medical, ZPS left the Manurhin in France, Hanwha needs to spend more money on marketing. Eurotech has an entry but they are using stealth marketing. Nomura no mas.

7. Are the automotive suppliers starting to buy?
Yes, but hesitantly. Business is good now, but 2010 was the year to repair the finances and 2011 is the year to begin buying. Hydromat, Schutte, Index and the Swisses are starting to see the serious inquiries, so the orders should come. But the earthquake and $4 gas seem to be slowing the actual POs.

A brilliant quarter for Ford. The company is coining money. Mike Jackson CEO of AutoNation, predicts the firm will sell 100,000 cars this year. Domestic car production is running at 13 million units. But autoland is still running scared.

Jackson says the mix he is selling is shifting gradually away from SUVs and minivans to cars.

Toyota, Honda and Nissan say they will not be back to normal production until November, though the situation is worst in Japan.

Suppliers are busy but skittish about buying more equipment because of the earthquake/gasoline combination reducing production. The fear is that by the time the earthquake issues stabilize, $5 gas could be biting.

Personally, I expect gas prices to go the other way. Jackson sees us ramping up to 16 million units. Let’s hope he’s right. Pickup trucks for business are still selling despite the continuing construction depression. Meanwhile, Buick sold 3 million units since 1999 in China.

It strikes me that Americans are still trying to recover from Post Traumatic Stress Disorder from the 2008-2009 deep recession. Banks are still looking backward at the housing shock and are afraid to loan to good risks, even based on 2001 values. A large percentage of buyers today are cash buyers, often from foreign countries, or first-time buyers who don’t have to sell a house to buy one. Banks are also being closely scrutinized by examiners who have the usual government employee bias—avoid mistakes so everybody covers their behind twice, thus gumming up the lending process.

The press has a strong negative bias. I monitor the editorial choices of several newspapers and Yahoo! Finance almost daily, and the choice of material disseminated is stridently negative. I’m in the news business and I know the choices of articles printed vary enormously. By emphasizing construction’s misery or commodity speculation or Wall Street corruption every day, the press confirms lingering post traumatic stress.

The negative effects of the Japan earthquake will continue from a worldwide economic perspective for much of 2011, but the macro effect of disasters flip over to the positive of rebuilding at some point. Yet I am beginning to see automotive suppliers flinch because assembly is momentarily curtailed by parts shortages. Demand continues to be robust, but some people still get stuck in the nine million-car syndrome of 2009 instead of the probable 14-16 million unit domestic demand likely by 2013. Call it the Michigan strain of PTSD.

I am no stranger to the phenomenon of Post Traumatic Stress Disorder—I still suffer déjà vu every time I go to the doctor. But the people who always profit from shifting market conditions are those who can be comfortable with being uncomfortable from bad memories.

Reflections on my time at TMW
By Noah Graff

I started at Today’s Machining World back in 2005 when Lloyd Graff, dad/editor/owner, offered me a job as the magazine’s videographer. I was a film major in college and it seemed like a cool idea—make videos that correlated with the magazine’s editorial content and stream them online. Unfortunately, the TMW Web site at the time had the look and functionality of something out of 1997, and the broadband Web video craze was still about two years away.

I needed to find more to do with my time at work so I started several new features in the magazine; “One on One,” “Shop Doc,” and “Next.” I also started copyediting, even though I had grown up with a mild language learning disability and from first grade though college I had been scared to turn in a composition unless someone else proofread it. But to my pleasant surprise, I was pretty good at ripping apart the work of other people. During the last three or four years I helped overhaul the TMW Web site twice, and started blogging and doing email blasts. In 2009, when the magazine got lean and let our entire sales staff go, I got involved in sales.

My job has become more interesting and fulfilling over the years, and I have become indispensable to the magazine’s survival. But sitting at a desk and staring at a screen all-day has taken its toll, and although the job has plenty of perks, the pay at an unprofitable magazine is just so-so.

Circumstances seem to be working out well lately, as my desire for a big change in my professional life has coincided with my boss’s urge to stop publishing TMW. Soon I’ll be selling used machine tools in the other family business, which until recently I never thought I’d do. I’m getting more and more psyched for the new job every day. I’ll get to make deals, travel, meet lots of people, and just do something different with my time. And, I still get to self-indulgently share my thoughts with thousands of people on todaysmachiningworld.com and work with my dad, one of the most likable and interesting people I know. Since I started at TMW I’ve been very self-conscious, even embarrassed about working for my dad. It took years, but eventually I stopped working for my dad and started working with my dad.

It’s the beginning of a new chapter in my life and in the life of Today’s Machining World. We plan on our articles getting even better, and if you have an iPad, you can still read our stuff in the bathroom. So keep reading my friends.

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Swarf: Nielsen’s Bakery

by Lloyd Graff

I had a hankering for a croissant and decided to drive over to Nielsen’s Bakery, a local bakery I don’t go to often, but they made nice croissants. All I found was a letter on the window saying they had closed after 21 years. The letter read like a note to a few insider friends and I could not really understand what it said, except that they were closing.

The letter confirmed to me why I had not patronized them for years. I always felt I was an outsider there, a tolerated visitor interrupting a local Kaffeeklatsch (an informal gathering) at the local clubhouse.

Nielson’s was in downtown Homewood, Illinois, next to the commuter train stop. A Starbucks with a drive-through now operates on the other side of the parking lot. The Starbucks does $20,000 a week in business and there are two other Starbucks in the area that do a similar amount of business. My guess is that Nielsen’s was lucky to do $5000 a week. Nielsen’s was a daytime operation while Starbucks is open 5:30 a.m. to 10 p.m.

Another local bakery, Sweet Annie’s, opened three years ago, and in my opinion that was the final blow that killed Nielsen’s. Not only were Annie’s baked goods superior, the ambience of the shop was warm and welcoming.

Another element most likely came into play in the demise of this small business. Homewood, like the rest of the south Chicago suburbs where I live, is becoming a predominantly African American community. Nielsen’s was clearly an old school Homewood institution, patronized mainly by Caucasians—and proud of it. If I felt like an outsider when I walked in, I’m sure a black person would have felt uncomfortable there.

The restaurants and stores in my neighborhood need to feel like they are connected to their customers. Most businesses, even those that do business online or on the phone, need to have a welcoming feel. Airlines with call centers in India lose tons of business because the people who finally answer the phone have no personal touch, are unable to connect with the customer, and are often hard to understand. Cold callers who read from a script rarely get more than a sentence out before I hang upon them.

A machining company owner that thinks he or she is just selling parts with no need for a personal connection with their customers does not understand how business works.

Nielsen’s Bakery didn’t fail because of the recession, though it didn’t help. They failed for many reasons, but the primary one was that they just wanted their little neighborhood bakery to stay the same while the world around them was changing by the day.

There was an interesting juxtaposition of auction sales recently. Corporate Assets sold Die-Matic in Hamilton, Ontario. Gorgeous machinery including a 2004 L-20 Citizen and a 2003 M-20 Citizen. With buyers premium the L-20 brought $115,000 and the M-20 brought $127,000.

Two weeks later TCL Auctions, also in Ontario, sold a 2004 Star ECAS 20 for $175,000 and a 2006 Star SR-20II, for $180,000. A 2007 Willeman CNC Swiss fetched $275,000.

In late January, J.L. Spear sold off Alessandro Co., an old Acme shop in Los Angeles. Acme-Gridley 1 1/4” RA6 machines in fair condition of 1970 vintage brought $2-3,000. A little 2007 Okuma ECLII lathe, sold for $23,500.

I can add that though the prices on Acmes were dirt cheap at Alessandro, the auction was hastily put together and not extensively advertised. My screw machine dealership, Graff-Pinkert, is seeing a renewed interest in National Acmes, but buyers are looking for tight machines at 2009 prices, of which there are virtually none left in dealer inventories.

Just a couple of years ago the skeptics saw General Motors as a hopeless joke run by bumbling fools. Today, General motors is a public company that’s making money, almost debt free, with the Volt adding another shift to production. Equally remarkable, the incredibly complex job of sorting out the $275 billion in claims—750,000 contracts and 70,000 claims, has been 85 percent completed.

One of the remaining vestiges of the old GM, known as Motors Liquidations Company in the legal documents, is the Willow Run Transmission Plant in Ypsilanti, Michigan. This gigantic albatross, five million square feet in one building, is on a land site that used to be a Henry Ford-owned farm. It was built in 1942 to make the B24 Liberator bomber. At one point they produced 650 bombers a month.

The assembly plant was passed to Kaiser Motors and then to General Motors, where they made the Chevy truck, the Nova and the Caprice. They also made parts for the doomed subcompact, the Vega, and the illustrious Corvair during the 1960s. During the Vietnam War the plant made M-16 rifles and a 20 mm auto-cannon.

In recent years, the immense facility was devoted to making General Motors transmissions.

Maynards and Hilco Auctioneers have been selling off the machinery over the past year as production tapered off. In six months Willow Run will be a gigantic barn. Already one of the GM plants near Detroit is being converted to a movie studio. Another factory will be used to assemble hybrid vehicles for Fisker Automotive of Irvine, Cal.

Willow Run is interesting because of its sheer size, about 5 million square feet. I can imagine putting a dozen soccer fields laid out end to end, or the world’s largest mushroom farm in it. How about America’s biggest indoor zoo?

Caltech has had 32 Nobel Prize winners on its faculty, but in sports they are just a bunch of losers. The college basketball team had lost every conference game for 26 straight years; 310 games of futility against local colleges in southern California like Whittier and Cal Lutheran.

In baseball they have lost 412 conference games in a row. Why do kids even go out for teams that never win? This is the The Bad News Bears to the 10th power.

Caltech finally won a Conference game on January 29th against Occidental (Barack Obama’s alma mater). Should we applaud their fortitude and perseverance, or castigate them for stinking up their league with such pathetic teams?

I do have some sympathy for the Caltechers, being a lifelong Chicago Cubs fan. The Cubs were last in the World Series in 1945 and have not won the Championship since 1908, the days of Tinkers to Evers to Chance.

To fail is human. To fail and fail and fail and keep on trying is heroic—or is it just mad?

Perhaps college conferences and even pro sports should adopt the incentive system employed in European soccer in which teams that consistently fail to be competitive are dropped to lower quality leagues and replaced by aspiring minor league teams. If the New Jersey Nets or LA Clippers were to finish last three years in a row maybe they could be replaced by a D-League team like the Idaho Stampede or Bakersfield Jam.

In baseball it could be an incentive for a team like Pittsburgh or Kansas City to stop living off the luxury tax money from the Yankees and Red Sox and actually develop a team.

As for the Caltech Beavers, hooray for winning a basketball game. If I were them, I’d stick to Intramurals.

Dear Michael Bloomberg (Mayor of New York City),

Just wanted to alert you that I am available, if the hours are right, to join the stable of writers of your new “Bloomberg View” enterprise. Our views on free trade (pro), taxes (don’t like ‘em) and tobacco (tax it like hell) are congruent. The $500 grand a year you are offering to prominent journalists is a nice round number I could live with.

I could add knowledge about the manufacturing world, which your provincial New York Wall Street-focused crowd could certainly use.

As a fellow magazine publisher I can relate to your comment recounted in the March 1st New York Times concerning your purchase of Business Week. When a bevy of consultants recommended that you pass on buying the money hemorrhaging publication because they said in a good year it would lose $25 million you said, “Do I look like a guy worried about losing $25 million?”

With your net worth pushing $20 billion, according to Forbes, and your age (late 60s) we have at least one thing in common. I was hoping you would run for President in 2012, but it is looking more like you are leaving the Iowa Primary to Romney and Pawlenty and other assorted losers. Apparently you have looked at the Ross Perot approach and figured it was a waste of time for 2012.

Mike, I think I understand where you are coming from. Better to be King than President. Considered it myself.

I’ll FedEx my resumé. Keep reading my blog. You are one of the few billionaires who know what Swarf is.

Lloyd Graff
Owner/Editor

Today’s Machining World

Today’s Machining World Archives April 2011 Volume 07 Issue 03

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Swarf: Taking the Plunge

By Lloyd Graff

Today’s Machining World Archives January/February 2011 Volume 7 Issue 1

The key question facing American manufacturers, especially contract machining shops in the next two years is, how do you expand? Or, the interesting corollary question, is this the time to cash in?

Let’s be real, American manufacturing has always been cyclical and still is. We are a little past a year into the current upturn. With low interest rates, the 2012 presidential election run-up beginning, the depletion of domestic players and the competitiveness of North American industry, these should be two excellent years.

There is always a strong tendency to fight the last war, so a lot of folks are going to be reluctant to expand for fear of the next bubble burst, a la 2001 and 2008. The dilemma so many of us are faced with is that we cut back so deeply to weather the recession that it is hard both financially and psychologically to put it all on the line again. But some people will make the big bets and a portion of that group will win big.

This is the moment to ask yourself which camp you are in. Visibility of the future is always iffy, but I think the odds are strong that we have at least two fat years ahead. If you consider yourself a player who is in the game for the long term this is the time to plunge. If you can’t take the volatility of the manufacturing game, sell out in 12 to 18 months.

The train from Beijing to Shanghai goes 200 miles per hour. Amtrak’s Acela Express train from Washington D.C. to New York goes half that on a good day. But our erstwhile stimulus package of 2009 has a lot of money designated to make us slightly better than mediocre in rail.

They are upgrading the service between Chicago and St. Louis, Los Angeles and San Francisco, Miami to Orlando and Tampa, and that hot rail market between Albuquerque and Santa Fe, New Mexico.

Train travel is fun. Security is not as annoying as at airports and fares are pretty reasonable. My question is whether we can afford the cost of upgrading a third rate passenger rail system to a second rate one. Our interstate highway system is excellent and air transportation is still high caliber, so do we need to spend billions on passenger rail?

Anyone for buses?

Mike Jackson, the CEO of AutoNation, the big publicly held consortium of car dealers, says pickup trucks are flying out of his stores. He sees this activity as a reflection of the confidence of small business around the U.S.

Jackson is predicting a two or three year ramp-up to the 16 million car build rate, which has traditionally been the standard of automotive well-being. With GM and Ford solidly in the black at 11.5 million units they will be coining money at 16. My question is whether the auto infrastructure can quickly accommodate 16 million. From a precision machining standpoint we are beginning to push the comfortable limits of production now in place. A 40 to 50 percent increase in build rate will strain everybody to meet requirements.

I talked to Kevin Meehan of Hydromat recently about the ability of his clients to expand production. He’s seeing some activity, but he thinks the big Tier Ones in Europe, particularly those in Germany, will be in the catbird seat to provide the sophisticated assemblies that will be in short supply. The Germans maintained their automotive infrastructure, while in North America we allowed the market to gut part of the supply chain.

The opportunity to get fat and happy during the impending U.S. car up tick may be more a bonanza for the Germans than for companies in the New World.

There are at least three cable series currently chronicling the business life of pawn shops. What is then fascination with people borrowing against baubles or selling their junk to professional peddlers for rent money?

I get a kick out of these shows and their genteel predecessor, Antiques Road Show, because the used machine tool racket that I practice is a bastard cousin of the pawn shop. I’m dealing in esoteric machinery which could be fodder for the furnace, or somebody’s stake to a fortune in Turkey or Topeka.

But I’m not only a purveyor of oily, wreaking junktiques from the basements of defunct car making mausoleums. I have my own collections of metal skeletons that have no logical home. Who wants a stock reel for a 4-spindle Conomatic? Who covets orphan bearings for random spindles for who-knows-what machine that used to be made in a now demolished factory in Vermont?
Somebody may want my crusty flotsam and Jetsam, but who buys the pawnbrokers’ crap? If I’m the supposed authority on machine tool dinosaur bones, who’s my pawnbroker?

Once I almost traded an Acme for a yellow Mercedes convertible. Should have done it. Dumb iron is just dumb iron, unless it’s got a Fanuc control.

Goldman Sachs is valuing Facebook at $50 billon and I am still calling my kids on the phone and texting only if I’ve got a magnifying glass available.

Frankly, I don’t care what my third cousin’s niece had for breakfast or if a high school acquaintance just had a prostate biopsy. I’m not particularly social, but I do love media. I know Facebook CEO Mark Zuckerberg is Time’s Man of the Year and his success is legendary, but for a 60-something guy like me, Facebook seems like an Internet tinker toy.

What am I missing here? Are any of you machining brethren, machinery mavens, media types, etc. actually using Facebook either personally or professionally? Or is it just the province of children, teenagers, and Generation X, Y, Zers?

The growth of Facebook has been stunning, and Zuckerberg vows to connect the world. Every Bolivian lithium miner, vodka stained Finnish reindeer rancher, and Polynesian pearl diver supposedly will be clutching their iPhone waiting to connect with a sopping lobsterman from Maine. Six degrees of separation between Osama Bin Laden and General Stanley McChrystal.
Readers, bloggers, actual friends, please tell me about your Facebook divorces, your Facebook reunions, or better yet, your Facebook sales.

With the New Year beginning I wanted to see what the Sunday New York Times, the reflection of the Easternliberal elites, would be writing about. The front section was a montage of pessimism and orneriness about public workers’ pensions under attack, New York state’s financial woes as Andrew Cuomo takes over in Albany, and the inability of young workers to find liveable wage work in southern Europe.

The pieces were well done, but the editorial judgment of The Times was indicative of what I see as the disconnect of the public and business environment at this moment.

The politicians and elites (journalistic, academic and financial) are fixated on a problematic world economy while the people who have weathered the past three years are rearing to make money. You see this in the stock market, where the Gotham hedge funds and mutual funds have generally fought the tape expecting a double dip recession, deflation and more recently stagflation with commodities rising rapidly in price.

Meanwhile the Dow is up 80 percent from the 2009 low and Christmas sales were up twice as much as the consensus predicted.

The recent Purchasing Managers’ Chicago survey showed a stunning burst of industrial activity and almost everybody I talk to in manufacturing is bullish.

A few straws in the wind—I recently heard of two companies that flew heavy machine tools to the U.S. from Europe to get them on the floor in 2010. Also, with demand strong in China, machine tool firms in Japan are rationing supply because they do not want to shut out customers from around the world.

As I look at my Graff-Pinkert used machinery business I am wondering where we are going to find the skills we may well be needing in 2011.
The N.Y. Times is still looking at a 2009 world. Fortunately, we are living in 2011.

As Charles Barkley so eloquently stated in his first memoir, “I may be wrong, but I doubt it.”

Today I’ll put on my Carnac turban and peer into 2011.

I predict—the economy will grow much faster than most economists are forecasting. My number is 5.2 percent for the year. The manufacturing economy is taking off. Auto sales could reach the 14 million rate. Employment will improve with the tax issue settled for the moment and Congress writing the rules on Obamacare. Housing will still be tough, but the big problem children of housing—Florida and California—have both stabilized. Deflation will be off the table as will the dreaded double dip recession. Congress will actually start to seriously discuss the deficit because the Tea Party folk will balk at raising the debt ceiling in April.

I predict—Hilary Clinton will discuss running against Barack in 2012 but decide against it. Sarah Palin will travel to Iowa and decide to run. Mike Bloomberg of New York will look at the field on both sides and decide whether to run for President. I predict—he will decide to run as a Republican and will win the nomination and the Presidency in 2012. Bloomberg never loses. If he wants it bad enough and opts to run, he will become the first Jewish President.

I predict—The Boston Celtics will win the NBA Championship and Philadelphia will win the World Series. The surprise team in baseball will be Washington, but they are two years away from a pennant. The Cubs will finish a close second behind Cincinnati in their division.

Here’s hoping you don’t agree entirely and contribute your own fearless forecasts.

Maybe if you are living under a rock you haven’t heard of GROUPON™. But this two-year-old company allegedly had the chutzpa to reject Google’s $6 billion offer to acquire it.
So what do they do?

They sell coupons for goods and services on the Internet with good writing, a sense of humor, and a cool concept—the deals have a limited time frame and a minimum number of people need to take them before they kick in.

Noah Graff and I heard Andrew Mason, the 29-year-old founder of GROUPON™, at a Wall Street Journal forum on growing your business. We were fascinated by his story and self-effacing demeanor. As he told it, the GROUPON™ idea was not his brainstorm. He was interested in social media and had developed a Web site to attract young people to political meetings. A venture capitalist liked what he was doing and invited him to use the concept of attracting a minimum threshold group for a commercial purpose—i.e. selling discounted goods and services. As Mason recounted it, “he didn’t have anything better to do,” and “somebody was dangling a lot of cash in front of him.” So he went to work on the site with gusto. It caught on like wildfire, and he and his founders realized they had a monster by the tail. Mason started hiring salesmen and building infrastructure immediately, because as great an idea as GROUPON™ was, it was eminently copyable.

Since Noah and I heard Mason speak we have been working on our own version of GROUPON™ for the industrial world, which we call “The Real Deal.” The folks at Trusty-Cook Inc., a manufacturer of wonderful and unique non-marring hammers that replace the primitive lead and bronze hammers, immediately loved the idea and did their first Real Deal email blast in December. They have been very happy with the results and are signed up to do two more in the coming months.

If you think you don’t do discounts, think again. The possibilities are tremendous. If you want to do one give our Sales Manager, Dan Hummell, a call at (630) 715-4318, send him an email at dan@todaysmachiningworld.com, or email Noah Graff at noah@ todaysmachiningworld.com.

See how the Real Deal can grow your business.

I’ve been asked many times over the last 2.5 years since I almost died of congestive heart failure, if I am a changed man because of the experience.

The answer is yes and no.

I got back into my magazine work within days of getting home from the hospital. I was more passionate than ever to write my stories. The machinery business was harder to get into because in 2008 and 2009 business was so awful it seemed like anything I tried failed. I probably would have given it up if I could have financially, but after fighting so hard to live, I didn’t want to give in to financial duress.

Recently, I read a piece in Spirit Magazine, the publication of Southwest Airlines, about happiness. The thrust of the article was that we are programmed for happiness by our upbringing and biology, but on the margins we can decide to be happier if we commit to it.

This has been the case with me.

Since my heart surgery and a laundry list of ailments I actually feel happier and more content that at any other time in my life. At least partially, being happy is an exercise. I have made it a habit to make a mental note of things I’m grateful for every day. This is a regimen and I do it more regularly than walking on the treadmill. I believe it has made a difference in my personal happiness quotient.

I can honestly say I feel happier and more content today, 2.5 years after my Armageddon. Not that I would recommend it.

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Swarf: The Gorbachev of GM

By Lloyd Graff

Today’s Machining World Archives November/December 2010 Volume 06 Issue 09

With GM going public and bringing back billions to the taxpayers, we are seeing a batch of revisionist opinion pieces about Rick Wagoner, former head of the auto giant.

Malcolm Gladwell, a favorite writer of mine, wrote a fascinating review of Steven Rattner’s new book, Overhaul, about the restructuring of GM for the Obama Administration. Rattner is a Wall Street mover and shaker who headed the restructuring in Detroit. Rattner saw Wagoner as a bureaucratic company guy and ultimately fired him, bringing in crusty Ed Whitacre to oversee the saving of a big part of the American auto industry.

Gladwell sees Wagoner as the guy who did most of the heavy lifting—chopping people, making a historic deal with the UAW, building a Chinese business, developing the Cadillac CTS and Chevy Malibu, and initiating the Chevy Volt.

Holman Jenkins of the Wall Street Journal also wrote a laudatory ode to Big Rick, former bench warmer for Duke basketball.

I see Wagoner as the Gorbachev of General Motors. He was an important transitional figure who understood the company’s problems and tried his best to save the company without blowing it up.

Like Gorby, he had to go when everything imploded. Rattner is no Yeltsin, but the oligarchs of Wall Street will make billions like their counterparts in Russia did after the fall.

We are seeing an acceleration of year-end buying in machinery for both new and used equipment. One reason for this is the widespread business expectation that prices for new machine tool inventory ordered from Japan will reflect the 25 percent drop in the past year of the value of the U.S. dollar versus the Japanese yen.

The Japanese importers generally erred on the conservative side when 2010 orders were placed, which means the cupboards are now relatively bare. I’m hearing that 10 percent to 13 percent price increases are coming on Japanese built equipment, indicating that the builders hedged the yen or they just don’t think the American market will accept whopping increases in one gulp.

If we continue to see yen versus dollar in the current range of 80-85 it would not be surprising to see DMG/Mori Seiki USA bite the bullet and build a plant, probably in Davis, California. Other builders could follow suit if they see North America as a growth market.

Nevertheless, we Americans are so ethnocentric we still see ourselves as everybody else’s primary focus. As President Obama learned at the G-20 meeting; China, India, Brazil, Korea and Southeast Asia are where the growth is if you are a world player.

With Japanese machine tool builders still recovering from an almost catastrophic 2009 they may be reluctant to invest big in a North American market with slow growth, a weakening currency, and an old workforce that is not being renewed by well organized worker training nor liberal immigration policies.

So in the foreseeable future, swallow hard, and pay the price if you want to expand.

The mood has changed in the precision machining world. It became real to me as I talked to folks at the Asset Sales auction at Caire Medical in Indianapolis on November 4th. There was an 18 percent buyer’s premium tacked onto the bid prices. The equipment was superb and the bidding was spirited.

The hottest piece in the sale was a Citizen M32 Type V, new in 2007, with a FMB bar loader. The bid price was $262,500 plus 18 percent, taking it over $300,000. There were (2) M32 Type III machines (new in 2003) which fetched $160,000 and $140,000 plus BP. An A-16 VIP Citizen (new in 2006) sold for $50,000 plus BP.

Two Mori Seiki vertical machining centers (new in 2007) fetched $73,000 each. A similar machine in Seattle three months before brought 65K. A nine-year-old Tsugami 10 pallet vertical machining center brought $140,000. A Nakamura TW-20, (new in 1992) fetched $95,000, and a similar machine (new in 1995) brought $65,000—don’t know why the difference.

I talked to a lot of people at the sale and a recurring theme was “business is good and I want to get the year-end tax break.”

Citizen and Nakamura tooling and accessories were also keenly bid on. One Citizen lot of tooling fetched $9,000. This was particularly interesting because conventional CAT 40 machining center holders brought modest prices.

What I gleaned from this sale is that “cream” machinery is escalating rapidly in price because of strong demand and the desire of successful entrepreneurs to capitalize on the raised expensing tax break in 2010.

The people of the machining world seem happy again. They have a bit of visibility about orders. Washington has been neutered. Tax breaks are out there to shield income. Free cash flow is increasing. The dollar is weak and interest rates are low.

The banks may be Scroogy, but just about everything else looks good. I see people rushing to get the last of the 2009 bust bargains, and since there are very few left they are willing to push up the price of used machinery to get the expensing tax goodie if they buy before the end of the year.

I can’t back this conclusion up with statistics, but if you are slugging it out in the market everyday like I am you can feel it. The iron gets a life of its own. It morphs from cold casting to artistic sculpture and then into a gold and green life form. We are passing through one of those rare passages at the moment, and I am living in the present and loving it.

For used machinery dealers who are prepared to “detrashify” the ugly refugee machines emerging from the automotive flotsam being pushed into the market, 2011 stands to be a good year.

For example, Hilco and Maynards auctioneering firms are now selling off multiple GM, Ford, and Chrysler plants with thousands of motley machines. Machines like Twin Grip Cincinnati center less grinders and 8-spindle National Acme screw machines are being sold for near scrap prices.

These are rugged machines that have been abused by indifferent operators and mindless management, but they are so durable that they can be brought back to life by skilled rebuilders.

For buyers who have long running Jobs, often supplying the now healthy automotive companies, these machines have value if they are brought back to almost new condition. When compared to European or Japanese competition they are viable if the versatility of CNC is not a major factor, because they are running dedicated jobs.

Add in automation and robotics and the old “trash” machines become virtually equal to new.

The scarcity of skilled rebuilders means that those few players in the “detrashifying” game have a chance to make 2011 a big year.

I was talking to Greg Knight of AMT Machine Systems (ServoCam), whose company adapts old school cam Brown & Sharpes into 21st century CNC hybrids. He was lamenting the difficulty he has selling his product to job shop owners who have no visibility of work from one month to the next. The days of consistent long-running contracts seem to have vanished like untaxed cigarettes.

In the used machinery business and I’m guessing also in the new machinery business, we live with future blindness. Projections are difficult, which drives accountants and bankers mad, but they probably deserve it. Business people crave the myth of being in control. They think they deserve an accurate vision of the future. And now we must live with the blank order sheet and wait for the sketchy buyers to call or email their requests for parts in a week. “Sure,” you say obediently, and immediately order material for next day delivery. Welcome to the new normal.

Every time I proclaim that I do not pray at the “Temple of Lean” I am chastised as a manufacturing heretic. But in a sloppy, erratic, fog shrouded world, “lean” is a dream lived fully only in the predictable world of government contracts, lubricated by friendly politicians from “safe districts,” a rarity in our blindfolded world.

The Chinese want to sell the Europeans, Japanese, and us the coolest high-speed trains in the world, but the train makers in Paris and Tokyo, whose technology the Chinese have stolen, are not smiling. The technology being used on the new bullet trains connecting Shanghai and Beijing is the best that money can buy, and the Chinese paid retail for it by purchasing trains from the best train makers in the world and copying it.

Now they have tweaked it and want to sell the trains directly against the people who sold the technology to them.

The Chinese don’t really deny their disrespect for intellectual property. The idea does not really translate in Chinese culture. Recently Honda decided to make their most advanced battery cars in China in exchange for clear access to the biggest potential car market in the world. Toyota declined. The trade is clear—access to an enormous market in exchange for theft of intellectual capital.

It is easy to criticize the Chinese for their thinking, but I’m not sure it’s completely fair. Honda knows what it’s doing. The managers at Honda must be betting that by the time the Chinese carmakers figure out how to copy their battery technology they will have developed a better mousetrap at HQ.

The train makers who are proclaiming “they are shocked, just shocked” about the Chinese actions are crying wolf. If you sell your stuff to China, you better be working hard on your next generation product.

On the day Apple reported that 14 million iPhones and over 4.2 million iPads had been sold, economist Nicholas Colas was discussing more obscure but equally interesting data on CNBC.

First time gun sales have been rising over the last three months though ammunition sales are flat. People are buying guns, but not spending a lot of dough at the range. He found this info by monitoring FBI background checks.

Gold coin sales have leveled off over the past six months, but silver coin sales have been soaring. His guess is that gold’s high cost has pushed people’s fear of paper money debasement into the less expensive silver.

Food stamp usage is rising monthly as are the Google searches on how to apply for them.

Used car prices are steady, with demand growth stagnant and supply fairly constant.

These are all indicators, according to Colas, of weak consumer demand and a lot of fear in the population.

I am truly saddened that the 2010 political advertising season has ended. The light these poisoned snipings shed on the candidates really needs to spread to the dull world of products like cars, which still feature zoom, zoom, zoom, motherhood, and apple pie to sell vehicles.

If Ford and Toyota were political candidates they would probably try something like this:

Ford-

“My Japanese opponent makes shoddy products that kill people. Ten million cars were so defective they were forced into repair facilities to prevent further carnage. This company lied to you when they sold you cars. Its signature model, Prius, means “junk” in Navajo.”

Toyota–

My so-called American competitor, Ford, really makes its cars in foreign countries like Mexico and Canada and then pretends they are American. The founder of Ford, Henry Ford, great grandfather of the chairman, was a bigot and Hitler sympathizer.

The company is eliminating Mercury from its line, and sources indicate that the Focus and Fusion might be pulled in 2012.”

It’s a pity that the robocalls for politicians have been replaced by pleasant telemarketers for the symphony. Hopefully we can get down to the serious business of companies slandering their competition.

We just celebrated Thanksgiving, watched the NFL, sopped our dressing, and tried to sleep with reflux. But 10,000 miles away thousands of American men and women are trying to stay alive in Afghanistan.

Tell me, why?

We are propping up a corrupt Karzai government, playing ball with a Pakistan that harbors Al Qaeda, and inflating our monstrous budget deficit, to accomplish what?

I don’t care if you are a lefty or a righty, counting the caskets of young Americans dying in the hundred-year quagmire called Afghanistan is ridiculous. Thirty years ago the Russians lost a generation of kids while we supported the Mujahedin, which spawned a Bin Laden. Tell me why it makes sense for Americans to emulate the Russian experience.

Afghans do one thing brilliantly—kill each other. It’s their national sport or religion, or both.

If we have to indulge our own blood lust, buy 5,000 more Predator drones and play remote control war against the Taliban and Al Qaeda, but take the soldiers out of the field and away from the hideous roadside bombs.

I am grateful to our brave soldiers for their sacrifice to country, but I am sick of politicians sending kids out to be killed in another meaningless war we cannot win. Hell, we don’t even know who’s on our team.

For the last nine years I have bought the best dried apricots in the world from Gibson Farms of Hollister, California. I met one of the owners, Mr. Gilbert Gibson, at the Palo Alto Farmer’s Market and we have become business friends. He asks me about my family; I ask him about the crop. He suggests I buy some walnuts; I usually just want the sweetest dried apricots I’ve ever tasted.

I always seem to run out of this perfect treat before my trips to the Bay Area, so I order them. No Web site. Just call the house and some nice lady will say, “What can I get for you, hon?” She’ll take the order and say, “We’ll ship Wednesday, I know your address.” Credit cards are not taken. I once asked Gilbert Gibson how often he had been stiffed. He said,

“Never.”

When I get the Gibson apricots, and the enclosed bill I pay it immediately. He trusts me so I would never sit on the invoice like I might with Comcast or ComEd. How could I look him in the eye at the Market if I neglected his invoice?

I know piece parts aren’t apricots and Ford isn’t Snow White, but wouldn’t it be nice?

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