Industry Scuttlebutt

Fritz Henderson--Pitcher at University of Michigan 1980-84

Fritz Henderson--Pitcher at University of Michigan 1980-84

The purge of former college jocks at GM continues. Former pitcher at the University of Michigan, Fritz Henderson (Senior year ERA of 5.91), is out, following the ouster of Rick Wagoner who played basketball at Duke. The culture at the top is changing with the nasty old phone guy Ed Whitacre shaking things up like a juiced up blender. Will ex-Oakland Raider and Chevy spokesman, Howie Long, be the next to hit the road?

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I recently talked to a long time friend and client, Wes Skinner of Manth Brownell, Kirkville, New York. This year Wes has taken his available cash and invested in Citizen CNC Swiss lathes, diversifying his machining portfolio out of his core Davenport and Wickman multi-spindles. He has bought seven Swiss—all used—including his more recent buy of an M-32 for $160,000. His rationale is that this year affords him a window to buy at historically low prices and he wants to bring his percentage of sliding headstock work up to one third of his current volume. Currently his multi-spindle business is good and getting better, but he does not envision buying any traditional multis in the foreseeable future. Wes thinks the really great buys in machine tools are ending now.

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The stock market is showing us some interesting things now, which makes the gloom and doom scenario for 2010 less believable. The Real Estate Investment Trusts are hot. Even though vacancies are high in commercial, office and industrial, the strong REITs are beloved by forward looking investors. This would indicate that the well-funded publicly traded real estate guys are in a great position to pick off the plums that the weak ones will be unloading. It also indicates that insurance companies and pension funds still like to lend on good properties with U.S. Treasuries paying a pittance and the strong likelihood that rates will be higher in a couple years or sooner.

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Unemployment is over 10 percent with shadow unemployment at 16 or 17 percent, but it is a fine time to be in the temporary help business. With so much uncertainty in Washington over health care and unemployment insurance costs headed up. Both big and small businesses are skittish about hiring full time people with benefits, but they still need people to get work done. The agencies that provide the temps are thriving. Demand for their services is rising and they have a lot of candidates to offer.

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My condolences to the family of Ivan Doverspike, who died recently. Ivan was a machinery dealer in Detroit specializing in screw machines. I didn’t know Ivan that well, but I remember traveling with him to look at a deal and discussing mutual acquaintances from the used machinery wars. His favorite saying during that conversation was “he knows his apples,” meaning a guy who’s astute. When I heard he had passed away my first thought was that he was a man who definitely “knew his apples.”

Question: Do you think jocks make good executives?

President Barack Obama--Played on Punahou High School Champion basketball team in Honolulu

President Barack Obama--Played on Punahou High School Champion basketball team in Honolulu

Rick Wagoner--Duke freshman basketball team walk-on 1972

Rick Wagoner--Duke freshman basketball team walk-on 1972

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4 thoughts on “Industry Scuttlebutt

  1. Avatarmr Beef

    I think Tiger Woods is an excellent candidate for CEO of GM. This is GUY WHO HAS SHOWN he has the cahones to put it in the hole when it is all on the line.

     
  2. AvatarPeter Frow

    I’m interested to know why Wes Skinner did not purchase multislide CNC’s such as the Gildemeister MS Series. The problem with Sliding Head lathes is that when the headstock is moving one cannot conveniently overlap forming operations which can have a negative effect on cycle times.

     
  3. AvatarSteve Baranyk

    Interesting. In 25 years this “competitive” person (he could have pitched for the Cubs of the White Sox with his ERA) was apparently turned into a hesitant bureaucrat if we can believe Mr. Whitacer who himself is from one of the most bureaucratic companies the world has ever known.

    I give GM five more years max. before it implodes and only Chevy and Cadillac survive.

    Steve Baranyk

     

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