Swarfcast Ep. 23 – Reflections on the Machining Business 2018

By Noah and Lloyd Graff

In today’s podcast, we reflect on the machining world in 2018 through the lens of what went right and what went wrong for Graff-Pinkert’s used machine tool business and Today’s Machining World.

Scroll down to listen to the podcast.

One key observation from 2018 is that Graff-Pinkert is becoming more reliant on our extensive knowledge of the equipment market rather than the cam machine refurbishing business, which historically has been Graff-Pinkert’s base business. Brokering the sale of modern CNC multi-spindles and consulting with customers on buying and selling machining businesses have become vital revenue streams.

As for Today’s Machining World, Swarfcast is our most exciting addition. The podcast is growing, but we admit it has been more of a challenge than we expected to convert readers to listeners. Many people tell us that they don’t have time to listen to a podcast. To that I reply that the beauty of a podcast is that you don’t have to consume it all in one sitting and you have the opportunity to listen while driving or exercising or doing chores. Also, recorded interviews give us the ability to provide more in-depth stories than blogs.

Sit back enjoy today’s podcast as we reflect on these topics, as well as China, Trump, gratitude and marriage. Happy New Year!

Question: What was the best thing that happened to you in 2018?

Share this post

Thoughts going into the New Year

By Lloyd Graff

It’s my birthday today as I write this, and I’m looking forward to a New Year.

If you read the papers (I still read the sports page) you’d think the economy was sinking into a worldwide sewer, but if you look at the stats and feel the vibe around you in America you would have a totally different feeling.

My gut feeling is that bankers and financial speculators (right at the bottom of my economic intelligence scale) are joining the herd in yelling that the sky is falling.  Part of this lemmingness derives from the intelligentsia’s abhorrence of Donald Trump, so they are praying (probably the wrong word) for economic disaster to bury him.  They can’t stand the success of the American economy during his first two years in office and have convinced themselves that it cannot, and must not, continue.  Convince the dummies in the hinterlands that they are, or soon will be, underwater, and they will start to believe it and hide their pennies under a rock.  And soon we will be in the recession they are predicting.

The Federal Reserve continues to live in its insular parallel universe raising interest rates every few months because their playbook, and God knows who wrote it, says that’s what you should do when people are happy and actually making enough dough to save a buck.  They are so bright and enlightened that they feel it is their ordained right to mess up a good thing, because otherwise we might have 3% inflation in 2020 even though they can’t get the 10-year treasury yield to stay over 3%.  The interest rate barometer of belief in American inflation over the next 10 years is stating emphatically that the Fed is wrong about inflation, and oil prices have dropped $20 a barrel in three months, but the brilliant old men at the Fed are convinced it will take a Brink’s truck of bills to buy a head of broccoli in a couple of years if they don’t starve the economy now.  It’s the usual “good is bad” rubric of the supposed smart people.

2019, Chinese Zodiac Year of the Pig

In the “real world” of machine tools and precision parts where I spend much of my time a lot of interesting things are happening.

For the first time in about 25 years the Chinese are on their back foot.  The mass exodus of manufacturing to China has reversed.  One major multinational firm, which I cannot mention by name, is moving a lot of its production of machined parts out of China.  It will not all come back to the U.S., but a significant chunk will.  Being dependent on China is becoming too dangerous for precious supply lines.  The price differentials are no longer large enough to justify the risks.

Meanwhile, companies from all over the globe are looking to relocate here.  Graff-Pinkert has been asked by numerous foreign manufacturers to find them an opportunity to buy in America.  From their vantage point the U.S. is safe and still relatively unregulated compared to Europe or South America.  Also its taxes are lower.

Politically, America is a bit messy now with the Trump hating reaching full pitch.  But look at the European Experiment.  The European Union looks extremely fragile from here.  England could have a Labour government headed by an ardent Socialist if Brexit is a failure.  Italy’s government is chaotic, though that is hardly anything new.  France has riots because poor people are waking up to the fact that the French state has not delivered the goodies they believe they deserve.  Meanwhile, the Germans sneer at their stupid neighbors but are almost totally dependent on their buddy Vladimir Putin for natural gas after shutting down those awful nonpolluting nuclear power plants.

Meanwhile the European intelligentsia have convinced themselves that they are the smart ones to save the planet with electric cars.  I think they will be surprised when people still want to buy the reliability of gasoline for a while.

Thank goodness the Europeans are united on climate change.  Unfortunately it means nothing except allowing them to feel good blaming the Americans while the Chinese and Indians are the real offenders in the carbon war.

Question: Do you think 2019 will be good for you economically?

Share this post

Swarfcast Ep. 22 – Federico Veneziano on Machining Business Around the World

By Noah Graff

Scroll down to listen to the podcast with Federico Veneziano.

On today’s podcast we interviewed Federico Veneziano, COO and CFO of American Micro, a 100 person machining company near Cincinnati, Ohio. In the interview Federico compared the various philosophies he has observed in machining companies throughout Europe, China and the United States.

Federico grew up in northern Italy and got his first job as a CNC machine operator when he was 12. He studied engineering in Italy and worked in several shops until he was hired by DMG as a service technician in his early 20s. For several years at DMG he worked on machines in shops all over the world, and in 2005 he was assigned a large project to install a Gildemeister GMC35 at American Micro in Batavia, Ohio. After observing Federico’s work on the project American Micro’s management saw great potential in Federico and he joined the company the following year.

Question: What is the best way for a machining company to find good employees?

Share this post

Barber School

By Lloyd Graff

Sometimes you can learn a lot from getting a haircut.

I’ve been going to the same barbershop for 20 years.  My needs are simple.  Same hair style since I was 12.  It’s a 15-minute trim.

My old barber, Ed, died several years ago, and his employee Erin bought the shop.  She inherited my head, I guess, and as a creature of habit I just continued the monthly routine.  I rarely make appointments with her ahead of time, preferring to call her when I know I have a free half hour.  She usually can fit me in on the day I call, but lately I’ve been having trouble fitting into her schedule.  She runs a one-person shop with an occasional helper coming in.  She does not work Sunday and Monday and is on a 9-5 schedule with Saturday ending at 2:30.

A couple of months ago I needed a haircut and had procrastinated until the last minute.  I was going to a wedding, and my hair was getting a bit sloppy.  I called Erin for an appointment for Friday afternoon or Saturday, and she told me she had nothing available.  I figured she could stay a little later or sandwich me in, and I requested that.  She would not fit me in, so I had to look for options.

An expanding Midwest supermarket chain had recently moved into the neighborhood named Meijer.  I had noticed on one of my infrequent visits to the store that it had a Great Clips barbershop that always seemed to be doing a thriving business.  I also needed to buy some strawberries and yogurt at the time and decided I would check out the shop.

The attitude was refreshing the second I walked in the store.  I was heartily welcomed, and the person who greeted me said she could cut my hair immediately.  I cruised into a chair, gave her my hair specs, and she pleasantly cut my hair, quite professionally, in 17 minutes start to finish.  The tab was $11 for a “senior.”  I was so pleased I gave her a $5 tip.  My cost at Erin’s shop, which was much more sterile than Great Clips, was $25 with a tip.

Erin, my barber, became my former barber that day.

As a student of business I understand how big chains like Great Clips and Sport Clips are killing off the small guys, and there is something sad about that.  But the clear fact to me after that first haircut in the Meijer superstore building was that I like this approach more than the Erin approach I had clung to.

I also realized that a small business like Today’s Machining World and Graff-Pinkert cannot afford to disappoint its customers, because they always have other options.  I knew this, of course, as a business veteran, but when it was demonstrated to me as a customer it had extra impact.

Erin has a real problem as a one-man band who wants a “life,” but as a client, I do not care.  I want my haircut when I want my haircut, and if I do not get it I look for another option.  If that option turns out to be significantly better for me she loses me as a client.

It is a lesson to teach employees who may take a cavalier approach to deliveries.   The customer has their needs.  The needs may conflict with your well-laid plans or unexpected breakdowns.  And they don’t care – nor would you.

Question: Do you prefer a private barber shop or a chain?

Share this post

Swarfcast Ep. 21 – John Saunders, Entrepreneur and Self-taught Machinist

By Noah Graff

Scroll down to listen to the podcast with John Saunders.

In today’s podcast we interviewed John Saunders, founder of Saunders Machine Works and the creator of the NYC CNC YouTube channel. John is an innovative entrepreneur who lives and breaths CNC machining. When he was 24 he had an idea to sell an automatically resetting steel target for practicing firearms, but he had no engineering background, no CAD experience and no machining experience. After working on a prototype with a contracted engineer he decided that before he would pursue production of his product he wanted to fully understand the production process.

He bought a Taig CNC milling machine and put it in his one-bedroom New York City apartment. He quickly realized he was passionate about CNC machining and taught himself to use his machine on nights and weekends for two years. Using resources on the Web, instructional DVDs and New York’s MakerSpace NYC community he eventually gained the skills to machine a prototype of his automatically resetting target by himself. Since his first time experimenting with his Taig until today he has religiously documented his machining projects on YouTube and now NYC CNC has acquired over 273,000 subscribers.

Today Saunders with a staff of six employees, runs a machine shop in his hometown of Zanesville, OH. His company runs an intensive training course on machining and welding, and it uploads at least one YouTube video a week about machining. He also cohosts a weekly podcast where he discusses his challenges running a small machining business.

Question: What practical skills have you learned on the Internet?

Share this post

Football Breather

By Lloyd Graff

I needed a football weekend badly.  It had been a week of business travel, end-of-the-month tension, end-of-the-year push, and what I really wanted was to watch some competitive football on TV and forget about business.  Wow, did I ever get what I was wishing for.

First game I watched was Oklahoma versus Texas for the Big 12 Championship.  I wanted to watch this game for one reason.  “Who is this kid, Kyler Murray, playing quarterback for the Sooners?”

He didn’t play last year because Baker Mayfield won the Heisman for them and became the Number 1 pick in the NFL by the Cleveland Browns.  Mayfield threw the ball a million times a game, and Oklahoma scored 60 points just for the fun of it.  I wanted to know if Kyler Murray was the real thing or the next Tim Tebow.

Guys, this Kyler Murray is the real thing.  Against a very capable Texas defense he showed accuracy, passion, and phenomenal quickness as a runner.  Oklahoma beat Texas 39-27, got into the National Playoffs, deservedly, and Murray probably won himself the Heisman Trophy.  And the amazing thing is that Murray is also a terrific baseball prospect.  I foresee him as a Top Ten NFL pick, similar to quarterbacks like DeShaun Watson and Russell Wilson.  Loved watching that game, but it only got better.

The late-afternoon game was Alabama versus Georgia, #1 against #4 in the college rankings.  Alabama was last year’s National Champion, top ranked all year behind the “Throwin’ Samoan” Tua Tagovailoa, who was recruited out of Hawaii to play in Tuscaloosa.

Tua had put up amazing numbers all season and ‘Bama has been completely dominant, but Saturday Georgia was even better—most of the game.  The Bulldogs led by two touchdowns in the middle of the third quarter and had completely ruined Tagovailoa’s game with a brutal pass rush.

The back story for the Crimson Tide is that its coach, Nick Saban, who everybody loves to hate, except his players, had replaced Jalen Hurts, who had brilliantly led the team for two seasons, with the Throwin’ Samoan because he was a far superior passer.  But Tua couldn’t deal with the pressure Saturday afternoon and finally was forced out of the game with an ankle injury.  In comes Hurts to finish the game and come back from a seemingly insurmountable Georgia lead.

The rap on Hurts was that he was a lousy passer, but on this Saturday he threw like Joe Namath.  Alabama rallied, and Georgia crumbled.  With very little time remaining Hurts bluffed a pass and ran a quarterback draw play for the winning touchdown.  It was an incredibly emotional finish when the substitute, who everybody thought should have left “Bama when Saban benched him, embraced his coach who was almost in tears on the podium accepting the Conference trophy.  I felt like crying sitting in front of my TV in Chicago.  This is why I love football in December.

On Sunday the Chicago Bears played the New York Giants without their starting quarterback, Mitchell Trubisky.  The Bears are trying to go from last to first in their division and had an 8-3 record going into the game, but with Chase Daniel, a career backup at quarterback, against a team with a still-capable Eli Manning and Rookie-of-the-Year running back Saquon Barkley, in New York, it was going to be a tough game.

The Giants played better than the Bears, particularly in the second half.  With less than two minutes left in the game the Giants punted the ball to the Bears end zone and with fantastic athleticism downed the ball on the one-yard line.  The Bears were down a touchdown.  On the first play Chase Daniel throws a short pass to Taylor Gabriel.  The Giants defender punches the ball out of his hands, and the fumble is recovered by New York on the ten-yard line.

But the Bears did not give up.  The Giants played traditional safety-first football, figuring that a field goal puts them up 10 points, a seemingly insurmountable lead with one minute left in the game and the Bears with only one timeout.

This is FOOTBALL in the NFL.  The Bears took the kickoff and quickly marched down the field.  They were stopped deep in Giants’ territory and opted to kick a field goal to save time.

With less than a minute left, the only long-shot chance the Bears had was to try an onside kick.  Only 3 of 39 such kicks had been successful this season, but the Bears recovered the ball when the overrated, self-proclaimed Giants’ superstar O. J. Beckham, Jr., casually sauntered to the bouncing kick allowing the frantic Bears to recover it.

With just a few seconds left, the Bears moved the ball towards the end zone culminating with a halfback pass by the team’s star, Tarik Cohen, a 5’7” dynamo from Bunn, North Carolina, for a touchdown at the buzzer.

The Bears lost in overtime, but the comeback was fantastic.

I was still not totally footballed out, so I checked out the Sunday-night game, Pittsburgh Steelers versus the L.A. Chargers.  You watch this game because it is Phillip Rivers versus Ben Roethlisberger, both Hall of Fame quarterbacks who have weathered a hundred injuries and concussions but play with a passion that even a baseball nerd can enjoy.

It was another nutty game of two totally different halves.  Pittsburgh rushed Rivers like madmen early, and Rivers struggled, even though he has the fastest release in the game.  L.A. racked up two yards rushing in the entire first half and trailed 21-3.

Seemingly, the Steelers were exhausted after their brilliant start, and Rivers began a counter-assault.  Players on both teams were dropping like flies in the contest, but Rivers kept throwing, and his top receiver, Keenan Allen, kept catching (14 receptions).  Pittsburgh’s big lead melted, and the Chargers pulled ahead in the end with a winning field goal.

I was exhausted, but exhilarated.  I was looking for a football breather from real life, and this weekend gave it to me.

Question: Do you enjoy the violence of football?

Share this post

Swarfcast Ep. 20 – Scott Roy on Machines that will Think Like Humans

By Noah and Lloyd Graff

In today’s podcast we interviewed Scott Roy, a Senior Staff Engineer at Google who specializes in artificial intelligence.  He also happens to be my brother-in-law (Lloyd’s son-in-law).  One of Scott’s most recent projects at Google is to improve the way machines communicate with people in diverse human languages—last week he was working on communicating in Bengali.

Scroll down to listen to the podcast with Scott Roy.

Scott believes that one day machines may have the sophistication and human-like qualities of Commander Data on Star Trek: The Next Generation.  He says there is a good chance machines will be able to feel emotions like love or the joy of watching baseball, and people will be able to teach them ethics.  Although he recognizes the risks of possible harm to humans by super intelligent machines, his work is motivated by his vision of a relationship in which machines enable people to thrive.

Question: Are you more excited or afraid of super intelligent machines?

Share this post

Riding Into 2019

By Lloyd Graff

We are at the 1/16 pole headed to the finish line of 2018.  What does the news tell us about 2019 business?

As usual it is a mixed-up picture – a patchwork mosaic of information and gut feel.

GM announced yesterday that it is going to let go of 25% of its salaried employees.  This is probably overdue for the still bloated Detroit company but, nevertheless, shocking for a company that is making loads of money now.  But GM, like Ford, sees a changed new-car industry within 5-10 years and is shedding its pouch to prepare.  Sales are down a bit now, but this move is not about the American economy at the moment; it is about autonomous cars, also the possibility of electric cars, but mainly it’s about bye bye baby boomers, hello Generation Z, who wants to live in cities and is not particularly enamored of horsepower.

Then there is General Electric as a $9 stock.  When a Wall Street raider smells opportunity it often ends up as chaos on the ground.  Nelson Peltz buys big into GE, and now the company is being dismembered, and the stock falls by two-thirds, and healthy divisions are being scavenged for quick cash to assuage credit jackals.  Do you think that scares top people at GM and Ford?  So we see them try to get out in front by slicing jobs at GM and sacrificing car lines and pushing trucks and SUVs at Ford.  They both smell the autonomous car upheaval and are shaving costs, accumulating cash, and investing in artificial intelligence so they aren’t future casualties.

But for precision-machining people times are darn good right now and generally looking quite promising headed into 2019.

Courtesy of the Boston Herald

But what about housing, another leg of the economic stool?  New home sales are soft, starts are soggy, even used home sales are off, but it does not mean that folks are terribly down on housing.  It’s the bite of higher interest rates which is playing out in soft sales.  Still, plenty of folks are taking money out of their homes to spiff them up.  My wife and I are spending a lot of dough to remodel our 43-year-old home, not because it will enhance its value enormously, but to enhance our pleasure in living in it.  A 4.7% refi may bite a little, but it does not appear high enough to stop the renovation boom.  Check out Lowe’s and Home Depot; they are definitely not suffering.

But then there is the stock market plummeting.  Apple belching on too many phones that are barely better than the previous incarnation, and the company trying to make the Apple Watch the next big thing when it is really the next little thing.

Oil prices are plummeting for no apparent reason except the hedge funds were idiots who believed Goldman Sachs when they made their “big call” that oil was going to $110 a barrel because of Iran sanctions and OPEC hunger.  But they forgot about the ingenuity of dudes in the Permian Basin who have rewritten the drilling rules and resurrected fields that Big Oil had left for dead.  Then the poor hedge fund geese followed the leader and panicked, pushing prices from $75 a barrel to $52.  The price will rebalance in the $60-$65 range after a few more hedge fund tearful mea culpas.

I look for a good 2019 for the machining business if the Fed does not go nuts on raising rates to squelch the inflation that isn’t happening other than wages going up which is a good thing, on the whole, for the economy.

Then there is President Trump, tweeting at 4:00 in the morning and playing his high-stakes games with China.  This does spook me because I doubt Trump knows his endgame, and the Chinese are on their back foot right now and therefore possibly dangerous.  A naval engagement with the United States would not be a good thing for the world economy.

We have Buenos Aires talks coming up in a couple days.  Trump will talk to Xi.  The Dow will go up or down 1000 points.  And the world will go on.

Question: Is automotive work a good place to be in 2019?

Share this post

My Gratitude List

By Noah Graff

I am like many people in this world, despite having so many things I should feel grateful for—living in a country with so many opportunities, being born into a well-off family with parents and siblings who love me, having a good career, etc… I still find myself plagued by negative self-talk and being annoyed by what I label as “First World problems.”

After getting a recommendation from many self-help books and podcasts I started making a gratitude list almost every morning since July of this year. Most of the time I write down 7-10 things into my iPhone. Often the lists repeat themselves with things like, “I’m grateful for my wife Stephanie, I’m grateful for my family, I’m grateful I woke up in a warm home, I’m grateful I am healthy enough to get out of bed, and I’m grateful I get to create blogs and podcasts and broadcast them to thousands of people.” I have found that when I make these lists I genuinely feel better throughout the day than if I had not done so.

Noah’s Gratitude list on his iPhone

Right now I’m listening to a book by A.J. Jacobs, a favorite author of mine, called Thanks a Thousand. The book follows Jacobs in his quest to thank 1,000 people who contribute to his morning cup of coffee. He personally thanked the barista, the coffee farmers, the people from the water company, the people who build the skids to haul the coffee, the people who cut down the lumber that makes the paper for the coffee cups—you get the gist.

Jacobs discovered that when he told people he was grateful for what they did he felt happier.

In a podcast Jacobs quoted a Benedictine monk who said, “Happiness doesn’t lead to gratitude, gratitude leads to happiness.” It sounds paradoxical but studies by psychologists have shown this to be true. Studies have also shown that people who are the most grateful are those who help others the most.

Maybe you feel crappy today. Maybe things are just not going well in your life right now. Consider making a gratitude list or just telling someone that you are grateful for them. You may be surprised how you feel afterward.

Question: What three things are you most grateful for right now? (I would appreciate it if we refrained from politics.)

Share this post

Swarfcast Ep. 19 – Rick Rickerson on Educating Engineers to Understand Machining

By Noah and Lloyd Graff

Scroll down to listen to the podcast with Rick Rickerson.

Rick Rickerson is in charge of the machining lab at Purdue’s Northwest Indiana campus in Hammond.  In today’s podcast he talks about why he loves his job. “It’s all about students” he says.  His passion for teaching beams throughout the interview.

Rick has been doing this job for 14 years.  His department has a half-dozen South Bend lathes (now made in Utah), but the students gravitate to the Haas VF-2 vertical machining centers.

The part of his duties that really gets the students’ juices going is the Purdue Northwest racing team.  Every year students all over the country build a Baja-type racing buggy with the same Briggs and Stratton engine.  They build it from scratch and are responsible for every nut, bolt and weld.  Thousands of hours go into the preparation for two races in the spring presided over by SME judges.  The preparation is strenuous, and the races are exhausting for the students and Rick, but he loves it.  The judges grill the student builders and racers about the vehicles.  Once they get on a track the buggies invariably break down, and the kids have to rebuild them on the spot.  It’s a fantastic learning experience.

Question: Is building a Baja-type racing buggy from scratch a good way to learn machining?

Share this post