Swarf: Noah Graff’s Visit to Arve Industries, June 2008

Today’s Machining World Archive: June 2008, Vol. 4, Issue 06

Noah Graff spent the first week

of April in France’s Haute-Savoie region, just across the border from Geneva Switzerland at a press junket held by the Arve-Industries Haute-Savoie Mont-Blanc Competitiveness Pole (Arve-Industries for short). This is his account.

While famous for its ski resorts and mountain lakes, France’s Haute-Savoie region also happens to be a hot bed of screw machine companies; small to medium, privately owned firms whose origins date back to the clock making industry of the Middle Ages. Arve-Industries, named for its location in the Arve Valley, is what’s known in France as a “cluster.” It is an organization formed in 2006, of 183 companies in the region working together on joint R&D projects, to better compete in a relentless world economy. Lionel Baud President of Baud Industries, and Vice President of the Arve-Industries cluster, told me that before the cluster was formed, the small family businesses of the Arve spent little time or resources on R&D and rarely collaborated with one another. The cluster’s members believe their newly formed unity has the potential to bring the region’s companies unprecedented success.

I was the lone American journalist on the trip and the only one in his 20s, and I don’t think the French execs giving us the tours were accustomed to my frank, often sensitive questions. I asked them how French manufacturers could keep up with the rest of the world while tied down by their country’s mandated 35 hour workweek and laws prohibiting the firing of workers. I asked whether they were hiring a lot of workers from Turkey and North Africa to deal with the shortage of skilled labor. I asked why these companies wouldn’t just send all of their operations overseas, or at least 40 minutes across the border into Switzerland where many of these regulatory hurdles would be lifted. When I pushed the question about the difficulty firing workers as companies become leaner and automated one exec from Bosch, the one multi-national company we visited, answered frustrated, “Well, what do you want me to say?” But overall, most people I talked to, although a bit taken aback by my bluntness, really impressed me with their intelligent, honest responses.

The truth is, some companies in the Arve Valley do have plants in Switzerland containing some French employees who commute across the border daily. Switzerland has much lower corporate taxes than EU member states, it’s easier to find workers there, and its workweek is more flexible than that of France. Baud Industries concentrates its watch and medical device manufacturing there, yet Lionel Baud told me he still insists on keeping the most technical, complicated jobs in-house because the cluster is available for assistance and France is where he has the best communication with workers, which creates loyal employees and low turnover.

To deal with the 35 hour workweek, executives said that lights-out manufacturing, automation, and overtime helps keep up productivity. They also said that just because French workers put in less hours does not necessarily mean they can’t match productivity of workers with longer hours if they have superior focus.

As far as my query about firing workers – after a little badgering, the Bosch executive told me to downsize, the company sets up a type of early retirement plan for workers they want to lay-off that meshes with government regulations.

My questions about the employment of workers from the Middle-East and North Africa received the most diverse responses. One company said that 60 percent of its workers come from North Africa and that there are good training schools there producing a lot of quality skilled labor. He added however, that third generation North African immigrants born in France are often not interested in manufacturing jobs, similar to their native French counterparts. One company told me their workforce included 20 percent Turks or North Africans, but as more jobs are requiring advanced skills that number is declining. Another executive said he employs virtually nobody from those regions, but some of his best employees come from Eastern Europe.

Although the companies I visited had diverse business philosophies and strategies, throughout the week I felt a common spirit from my hosts; one of pride, creativity, and a passion to grow while still preserving their roots.

Managing Editor Jill Sevelow

attended the Delcam American Technical Summit, hosted by Methods Machine Tools in Sudbury, Mass., in mid-April. Jill was most impressed by the portfolio of Delcam products. Operations Director Clive Martell said their goal was “to build a series of ‘best in class’ when orchestrating their software CAM acquisitions. Aside from well-known turn/mill and Swiss-type lathe CAM software Partmaker (which Delcam acquired in July of 2006), Delcam includes DentCAD and DentMILL, a dental CAD system for dental machining, PowerMill for 5-axis machining, FeatureCAM, ArtCAM (which Delcam’s Rob Walker likened to “bringing craftsmen into the digital age), and now Crispin-CADCAM software for the shoe industry. In the age of increasingly individualized customization of product, Delcam’s software has evolved with market demand, generating sales of almost $60 million in 2007. Power point presentations laid the groundwork for each product, but customer testimonials drove the “message of excellence” home. Each attributed its growth and acceleration in its respective fields to the collaborative and innovative Delcam product used.

For many years I have been a

staunch advocate of gridlock in Washington politics. The visceral animosity on the national scene began when the Republicans ganged up on the Democratic House Leader Jim Wright, forcing him out of Congress. The Democrats finally got even by banishing Tom DeLay. The legislative process is a Pork Barrel provider presently and not a vehicle to tackle the serious issues of the day.

This might be starting to change. Assuming the presidential race is between John McCain and Barack Obama, a pair of mavericks in their parties who won their nominations as long shot outsiders, we might see each one reaching out to the other party for cabinet members and even vice presidential possibilities.

Some young people are reaching out to both parties to actually address issues that people care about. George Bush wasted eight years in addressing the health insurance problem that affects almost everybody in the United States. The insurance companies and Federal bureaucracy have made such a mess out of health care that we may be near some kind of national compromise if the partisans are circumvented by the people. With some baby boomers retiring soon and a new president, this would be the time.

Another huge Bush failure is immigration policy. He abdicated to the Lou Dobbsians and now the country is losing its transfusion of people energy. Hopefully McCain, who has a grasp of immigration issues from his Arizona experience, or Obama, who is sort of an immigrant himself, will pull us away from the know-nothing cheerleaders in both parties.

On Iraq it may be easier for McCain to extricate a lot of American troops from combat than Barack Hussein Obama, who may have to show the country, the Joint Chiefs and Bin Laden that he is a tough hombre.

I am strangely optimistic about this election and totally undecided about who I’ll vote for. These are two good men to choose from and I haven’t felt that way for a few decades.

On May 8, the state of Israel had

its 60th birthday as an independent country. The country has never been as strong economically as it is now with 20 years of spectacular growth behind it.

Americans can learn a lot from the Israeli experience.

The core strength of the Israeli economy derives from the creativity of a highly educated population. In technical fields, Israel excels. Silicon Valley is filled with Israelis who live in the U.S. and then go back to live in Israel’s Silicon Valley near Tel Aviv.

Israel thinks globally. A myriad of trade deals with other countries have thwarted the Arab economic boycott. After military service almost every secular young Israeli leaves the country for at least a year of travel. This gives the population a worldliness virtually unmatched elsewhere.

Israeli business has abundant access to money through a thriving venture capital network. A host of Israeli tech companies and medical firms have gone public on the Nasdaq stock exchange. Most children in Israel speak at least two languages, Hebrew and English, which is a necessity for global commerce.

The Israeli economy has continued to thrive despite terrorism, six wars, political isolation, and a tiny population with a large segment of parochial Orthodox Jews, many of whom barely work in the modern economy. In many respects, it is an economy functioning with one hand tied behind its back.

The United States can learn from Israel that terrorism can be contained with intelligent determination. We can also learn that immigrants, even poorly educated ones, can bring prosperity if properly acculturated and educated.

Israel has shown that a tiny country, surrounded by fanatical enemies, can thrive if its people have ingenuity, positive energy, intellectual capability, access to capital, a global outlook, and the determination to thrive – no matter what the obstacles.

Noah and I visited Vienna,

Austria recently on a business trip to central Europe. Our first order of business was to find the original Julius Meinl coffee shop, which is my favorite in Chicago.

Our first challenge was to locate the place. Vienna has a big central shopping area, the “zentrum,” with a vast array of shops and restaurants adjacent to the city’s historic buildings. We took the “underground” to the zentrum and asked people for directions to Meinl. Nobody was helpful until we found, of all things, Starbucks. I walked into the old reliable and asked the young barista behind the counter where Meinl could be found. He answered instantly and offered detailed directions in excellent English. He then added that Julius Meinl had recently opened a store in Chicago.

After several missteps, we found Meinl at about 6:00 in the evening on Sunday. The only part of the store which was serving customers was the outdoor seating area. The blond fraulein who came to take our order spoke no English. She was quite pretty but she carried a near scowl on her face. I tried to order a latte, but she only understood cappuccino, so that’s what we ordered.

The coffee came promptly and it was beautifully presented with a heart artfully drawn in the foam. The size of the cup was about one third smaller than the comparable American one and the price was double in American dollars. To the best of my tasting ability, the Viennese and American coffees tasted the same – excellent. But the attitude and the price were decidedly better at Julius Meinl in Chicago.

Jonathan Goodwin dropped out

of seventh grade to help pay the bills and follow his passion for cars and engines. Today the automotive world bows to his genius and wonders if this car nut might actually win the 10 million dollar X PRIZE for producing a low emission, competitively priced, 100 mile per gallon car.

His partner in this venture is Neil Young, rock legend, who contributed his 1960, Lincoln Continental “boat” as Goodwin’s test car.

Goodwin works out of a garage where he specializes in converting Hummers into fuel sipping diesels while boosting their power. He also likes to run his thug cars on fried chicken grease contributed by the local KFC outlet.

The fact that the prestigious X PRIZE contest committee has allowed Goodwin and Young to apply to join the elite, well financed, automotive companies from around the world gives him credibility.

Goodwin is negotiating with DHL to convert 800 vehicles to super efficient systems which cut fuel costs by 50 percent.

It appears that his approach is unique because he does not want to build a new vehicle and engine. His devious plan is to make inexpensive conversion packages for existing vehicles turning them into biodiesel burning plug-in hybrids.

Proving his point on Neil Young’s 40 foot “boat” may not win the X PRIZE, but that’s what they said about the crazy bike mechanics Wilbur and Orville Wright in 1903.

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