"Auction of the Week" is new blog feature in which we give readers the inside scoop on one upcoming machinery auction every week. The following is not an advertisement. It is totally free of monetary consideration for TMW or any other company. We will pick these auctions on the merit of what we believe will interest members of the machining community.

The Sharon Screw Products sale, put on by Cincinnati Industrial Auctioneers, July 15, will be interesting not just because it is the biggest Greenlee event in memory, but because it has six Model OM Cincinnati Centerless Grinders. The OM model was made in the early 1950s by Cincinnati, and discontinued a few years later for the 220-8 series. But the allure of the compact OM remained long after it should have vanished into the scrapbooks of once viable used machinery.

Many companies have figured out ways to rebuild and put CNC controls on the humble OM. Sharon owns one of those CNC retrofits being sold. These machines are favorites in India where rebuilding the grinders has become a cottage industry. Perhaps the popularity in India derives from the sound of “Om,” a tone that Yogis chant to synchronize their breathing exercises.

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I talked to Bill Becker a University of Illinois professor who has gone into business with his children building mini wind turbines for city dwellers who have access to moving air.

Becker answered the phone when I called his office on the North Side of Chicago. He says people are calling from all over the world to inquire about his vertical axis turbines which look more like modern sculpture than energy generator.

Becker’s low cost generators cost $15,000 to $20,000 depending on the size. His bigger one has two alternators and a smaller version one. They hook directly into the building power supply, looking like big erector sets of steel tubing. Becker has extensive credentials in the alternative energy field. He invented a solar powered bike, but he’s having a ball now with his own firm Aerotecture International Inc.

He told me he is working out a deal with Abt, a big Chicago retailer of televisions and appliances. Abt wants to go green in their huge showroom warehouse but the management also sees potential in getting into the personal energy generation business. Becker has recently installed a combo wind generator with solar panels at the headquarters of the International Brotherhood of Electrical Workers in Chicago. The IBEW sees green installations as an important avenue for development of the profession.

The wind farm folks have allied themselves with the electric utilities. Becker says the massive wind generators have their place but it is potentially a lot easier to put a small, mass produced unit on a condo building or bridge than hook up the infrastructure to wind farm on a remote, if windy, mountain side.

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Today I came across a video of the Shell Eco-Marathon Americas which was held in April, 2008.

The event is a competition between students from around North America (there is a different one in Europe) to create the most fuel efficient car ever. Purdue University won the prize for a solar engine vehicle reaching 2,861.8 miles per gallon. Penn State won the Fuel Cell category with a car reaching 1,668.3 miles per gallon, and Mater Dei High School claimed the first and third place trophies for the internal combustion engine category. The 5th and 6th Gen vehicles traveled 2,383.8 and 1,208.6 miles per gallon respectively.

But why is Shell, an oil company, sponsoring an event whose purpose is to invent cars which will obliterate the demand for its product? It reminds me of the Philip Morris commercials telling people not to smoke. David Sexton, President of Shell Oil Products said in a CNN interview, “We’re thrilled that if some of these ideas can maybe in the future reduce fuel consumption we think that would be good for everyone.” Does “everyone” include himself?

It must be a PR thing because otherwise it makes no sense. The oil companies are banking on the idea that even if fuel efficient, alternative energy vehicles do become practical and affordable, it will take decades before the supply of vehicles worldwide adopts the new technology. In the meantime Shell looks like a green maverick amongst its Big Bad Oil peers.

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"Auction of the Week" is new blog feature in which we give readers the inside scoop on one upcoming machinery auction every week. The following is not an advertisement. It is totally free of monetary consideration for TMW or any other company. We will pick these auctions on the merit of what we believe will interest members of the machining community.

Rockwell Automation, the old multi-story Allen-Bradley plant in Milwaukee is selling a nice selection of National Acmes and New Britain multi spindles. Hilco is the auctioneer in an online event spanning July 1 – 10.

The Allen-Bradley plant has wood floors seldom seen today. Those floors have sopped up untold gallons of cutting oil over 70 years as Allen-Bradley evolved from a premier supplier of starters and relays for mechanical products to a producer of automation devices under the Rockwell banner.

Hilco is selling twelve 7/16" RA6 Acmes in this deal, more than I’ve seen in any one place for a long time. The tiniest Acmes ever made may be worth more for their parts than for running product. Trying to find 7/16" RA6 parts today is like trying to find a replacement for an eyeglasses frame that’s been discontinued.

When I was 17 years old my father hired me as a screw machine prospector for the summer. All day long I would call shops in the Midwest looking for surplus Acmes, New Britains and Davenports with my cousin Dan Pinkert. Occasionally we would drive to Kalamazoo or Indianapolis, camp out at the bell system headquarters and call locals hunting for the elusive screw machine or chucker.

The last week of the summer Danny and I took the train up to Milwaukee. One of my first calls was Allen-Bradley, the massive fortress of a factory in downtown Milwaukee with a reputation for quality products and right wing politics. We hit gold. A-B had a 9/16” RA6 new in 1952 for sale. I asked my dad what it was worth and he told me to get it for $2,500 or less.

We quickly took a taxi over to the plant, found the purchasing guy in charge and made an offer. Bingo. We made the deal. I think my father sold the machine for $7,500, which paid for the summer expenses of Dan and I.

I see one lone 9/16” Acme in the upcoming Hilco sale. It’s probably worth about $2,500 today.

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A recent survey by RBC Capital Markets showed that many Americans are becoming more open to living near wind, hydro, geothermal, and even nuclear power generation facilities in response to high energy prices and environmental concerns. Only 16 percent of Americans said that they would oppose the construction of any type of energy plant or facility in their hometown, down from 23 percent in 2007.

In addition to power generation related companies (mentioned in the following video) infrastructure manufacturers such as Parker-Hannifin Corporation, Foster Wheeler, and Woodward Governor Company, are just a few of the firms which could capitalize on the possible expansion of diverse power sources.

Source: TheStreet.com

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Bob Maddox, an artist and cabinet maker from Medford, Ore., has built a jet powered bicycle which can go at least 50 MPH (he predicts it can go 75 if anyone’s got the guts). "When you're on a motorcycle going 50 mph, you don't think anything about it," he told Wired Magazine. "But on a bicycle, it feels way too fast." Recently he started selling the bikes on eBay.

In addition to strapping jets onto bikes, Maddox who was an avid skydiver for 20 years decided to strap a jet to his chest and make himself into a human missile. He discovered that turbine jet engines are expensive but pulse jets are cheap and simple so Maddox set to work building one. "All I started with was a schematic out of an encyclopedia," he says. The engines are basically a long tube with a fuel pump, a spark plug and a reed valve. Air and fuel are mixed at the front and ignited in a process that repeats - or "pulses" - about 70 times a second.

He started refining his pulse jet engines, which he fashions from aluminum and stainless steel in his workshop. He's sold about 50 of them. The smallest are used to power model airplanes. The largest - two monsters producing 500 pounds of thrust apiece - have joined the beastly nitro-methane engine in Wally Larson's Top Gun Groundfighter show car. (Blog.wired.com)

Source: Wired.com

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World trade is like a chameleon, constantly changing colors to survive and flourish. This is why I tend to disregard the Lou Dobbsians who are constantly searching for bad guys rather than opportunities.

With the developing world growing so fast now and the added strain of material flowing to China to heal the wounds of the horrible earthquake, the container system is simply overused. The China trade is sopping up all slack in capacity, which means rates are triple those of six years ago if you can even find a container to send goods from the U.S. to Europe.

The cost of shipping a standard, 40-foot container from Asia to the East Coast has already tripled since 2000 and will double again as oil prices head toward $200 a barrel, says Jeff Rubin, chief economist at CIBC World Markets in Toronto. He estimates transportation costs are now the equivalent of a 9% tariff on goods coming into U.S. ports, compared with the equivalent of only 3% when oil was selling for $20 a barrel in 2000. (Wall Street Journal)

With labor costs and the value of the yuan rising too, China is losing its competitive edge in manufacturing versus the U.S. Even furniture, which gravitated almost entirely to China, is coming back to America.

The container shortage is an annoyance at the moment. Its deeper significance is in the context of world trade. If the protectionists do not mess things up after the election, the seeds are being sown for a significant resurgence in American manufacturing for many years to come.

Source: Wall Street Journal

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"Auction of the Week" is new blog feature in which we give readers the inside scoop on one upcoming machinery auction every week. The following is not an advertisement. It is totally free of monetary consideration for TMW or any other company. We will pick these auctions on the merit of what we believe will interest members of the machining community.

On July 15, the grand daddy of Greenlee screw machine shops, Sharon Screw, goes up for auction, under the hammer of Cincinnati Industrial. Gerry Savage, Sharon’s owner, collected Greenlees like some people pick up Rolexes. If the price was right he bought it. He is finally ready to hang it up. He made an effort to sell the operation as a going business but the appetite for a big Greenlee shop, even in the home of Greenlee, Rockford, Illinois, has waned.

A competitor of Savage told me that he might covet the building but he never wants to see another Greenlee machine. Greenlees were made for a more forgiving machining climate. Will Greenlee buyers come out of the woodwork to inspect the bones. Check it out July 15th.

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Now people can replicate replicating machines from replicating machines. Sounds kind of like Dolly, the cloned sheep, being cloned to produce a new sheep.

http://blog.reprap.org/2008/06/reprap-achieves-replication.html

Adrian (left) and Vik (right) with a parent RepRap machine, made on a conventional rapid prototyper, and the first complete working child RepRap machine, made by the RepRap on the left. The child machine made its first successful grandchild part at 14:00 hours UTC on 29 May 2008 at Bath University in the UK, a few minutes after it was assembled.

[Sorry this news is a few days late, RepRap fans. We had a press embargo on it till 4 June to coincide with the opening of the Cheltenham Festival (see above and below), and it wouldn't be very good practice to break our own embargo :-)]

 

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With ridiculous gas prices sweeping across the U.S., it might seem intuitive for a car buyer to look for something fuel efficient like a Smart Car, Prius, or Honda Civic. But with dealers struggling to get rid of trucks and SUVs (domestic brands in particular) some unprecedented deals for gas guzzlers are appearing which may actually make sense for buyers to jump on.

Manufacturers are offering between $2,000 and $5,000 in discounts on once popular models like the Ford Explorer and Chevrolet Suburban, and dealers say there’s room for negotiation after that. Used SUVs and trucks often have even greater discounts, with some selling at roughly one-third the price they would have fetched new four years ago.

Among the better bargains are Ford's SUVs, the Expedition and the Explorer. An Expedition with four-wheel drive has a sticker price of about $35,000, but in many areas, consumers can get one for $30,000 after discounts and negotiations. The all-wheel-drive Explorer with V-8 engine lists for about $31,000, but can be had for $25,000.

These deals only make sense if your driving routine is local or you simply want a truck or SUV. If you only drive five or 10 miles a day it will take years for even $4.00 gas to surpass the value of many discounts, and by that time your lease may have ended.

Source: Wall Street Journal

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"Auction of the Week" is new blog feature in which we give readers the inside scoop on one upcoming machinery auction every week. The following is not an advertisement. It is totally free of monetary consideration for TMW or any other company. We will pick these auctions on the merit of what we believe will interest members of the machining community.

Hoff-Hilk Auctioneers is doing an online auction of the physical assets of the K.O. Lee Corporation of Aberdeen, South Dakota, on the Web June 25th and June 26th.

I talked to Russ Hilk, one of the partners of the auction firm, and he gave me background on the sale. The key pieces in the deal are the new K.O. Lee grinders, surface, tool and cutter, and creep feed style.

Hoff-Hilk got the deal primarily because of a long standing relationship between the firm’s managers and Dennis Hoff, Russ Hilk’s partner. They had done appraisal and consulting work through the years for K.O. Lee.

Hilk mentioned that prior to the auction K.O. Lee’s parts business was sold to LeBlond LTD of Amelia, Ohio, along with the intellectual property of the machine prints and website

The sale of intangible soft assets for a company with a great old name presents intriguing issues for auction and appraisal companies in the area of global Web trading.

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Fredric Baur, the man who invented the tubular can that packages Pringles potato chips, died May 4, 2008, at the age of 89. Yesterday it was announced that he has had some of his ashes put into a Pringles can which was put into his coffin.

Baur was an organic chemist and food storage technician who specialized in research and development and quality control for Cincinnati-based Procter & Gamble Co. A patent for the can was granted in 1970, according to P&G archivist Ed Rider.

Pringles have always been my favorite potato chips. I’ve always felt their flavoring was superior to other chips – from the Original Salted, to Sour Cream and Onion, to Cheez Ums. But I know what attracted me to them originally was their unique presentation, not only the can, which seemed so classy compared to regular potato chip bags, but the uniformity and aesthetics of the chips.

Pringles are the ultimate combination of quality, presentation, and branding. Those are the keys to success when producing and selling any product which can seem generic and commoditized, whether it be a food, computer, or machined part. In the world’s capitalist economy fueled by consumer choice, the only way to succeed in business is to use Procter & Gamble’s Pringles model. Yes – price also plays a huge part in competition, but the companies which truly dominate the world always strive for excellence – to produce their own Pringles.

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This is the first story on a new blog feature in which we will give readers the inside scoop on one upcoming machinery auction each week. This is not an advertisement. It is totally free of monetary consideration for TMW or any other company. We will pick these auctions on the merit of what we believe will interest members of the machining community.

Hilco Industrial will be auctioning Lunt Manufacturing of Schaumburg and Hampshire, Illinois on June 12th. Lunt is a long established family business specializing in magnesium die casting, a business which has moved offshore to Asia where according to Steve Wolf of Hilco, the competitors are being subsidized on the material costs.

Magnesium has quadrupled in price in the last few years during which Lunt bought massive 4000 ton state of the art Idra Magnesium die casters, which Hilco is selling privately outside of the auction.

Wolf told me that the equipment is quite nice, with an excellent assortment of CNC finishing equipment including several Chiron vertical machining centers and two Brother vertical tapping machines.

Hilco bought the deal in court from the secured creditors. The deal included the prime real estate in Hampshire, Illinois – a 152,000 square foot facility with a 50/25 ton crane with a 90 foot span.

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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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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.

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.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. The size of the cup was about one third smaller than the comparable American one and the price was double in American dollars. I felt like a poor American in continental Europe. Yet on the other hand it reminded me how cheap America is now, and that I need to use that to my advantage in business.

 

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Remember the last scene of Back to the Future when Doc Brown returns in his flying DeLorian to take Marty to the year 2015? As a 5 year old kid in 1985 I still remember being fascinated, not only because the car was flying, but because the new DeLorian was powered by garbage instead of plutonium. At the time I didn’t even know what plutonium was. But garbage fuel – now that was a cool concept.

In 2008, people are finally starting to work on garbage-powered aviation. The Solena Group, a Washington DC company that builds and operates renewable energy power plants in North America, Asia and Europe, has started work on a facility that will produce jet fuel from trash, tree bark and manure using a process called plasma gasification. It uses 5000-degree plasma arcs to break trash into gas fuel, which is then converted into liquid suitable for powering an airplane.

The plasma gasification and the gas-to-liquid conversion processes will release significant amounts of CO2 into the environment, but the company claims that the CO2 does much less harm to the environment than emissions created by decomposing landfill waste and reliance on petroleum based aviation fuel. (According to the Department of Transportation, aviation accounts for 2.7 percent of U.S. annual greenhouse gas output.) Also, energy generated from the plasma arcs is used to power the system, which makes it self-sustaining.

Solena plans to build its plant in Gilroy, California, (home of the famous Gilroy Garlic Festival) where it will have access to a steady stream of household trash from Norcal Waste Systems, a big California garbage collection company.

The Company won’t begin production until 2011, despite some U.S. biofuel tax credits being scheduled to expire in 2008. Also, no commercial airlines have expressed interest in the project. But if prices of fuel keep going up there could be some significant interest by 2015, and maybe Back to the Future director/writer Robert Zemeckis will turn out to be a true science visionary, not just a great Sci-Fi creator.

Source: www.wired.com

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An old friend of mine at Columbia University business school recently returned from Dubai where he had traveled with his class for spring break.

He told me that there were tons of chic restaurants and bars, but that the place had “no real culture.” Everyone on the street was from a different country and speaking English, every type of food was available much like one would find in any major city, and the nightlife scene reminded him of South Beach, Florida. The place exists for foreigners – business people and rich vacationers (primarily from Europe).

My friend said that the construction going on there was incredible, and he wondered if the place was being overbuilt. Dubai recently constructed the Burj Dubai, the tallest building in the world. It also has a network of tiny manmade islands for vacationers called “The World” which combine to form the shape of the continents. Presently the city is constructing three more gigantic manmade islands in shape of palm trees. The reason for the shape is that the fingers of land which serve as the branches of the palm dramatically increase the available beachfront property to build hotels on.

The unprecedented rate of construction in Dubai is made possible by the country’s abundant supply of dirt cheap labor from India and other countries of that region. The workers generally receive about seven dollars a day, and because they don’t have unions it’s possible to make them work longer hours and do other activities the U.S. would prohibit. Many people have even characterized Dubai’s manual labor workforce as slave labor.

Take a look at “Next” in Today’s Machining World’s April issue for more on Dubai.
 
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This day (April 21) in 1878, the fire station pole was invented. Prior to the existence of fire station poles, firemen often used sliding shoots like those in playgrounds to quickly get down to the ground floor, as opposed to taking a slower staircase. Like so many inventions it was inspired by an accident. At Engine Company 21, a station of all black firemen in Chicago, fireman George Reid was in the hayloft on the station’s third floor (back then hay was needed for the horses which pulled the fire “engines”). A long binding pole used to secure the hay to the wagon was sticking vertically up the loading area into the hay loft, when suddenly the fire bell rang and Reid impulsively slid down the pole to get to the ground.

The Station’s captain David Kenyon liked the concept, and he and the Chief decided to cut a hole in the second floor and install a permanent pole made of waxed, varnished, Georgia Pine three inches in diameter. Soon Engine 21 got the reputation of being the first responders, inspiring the rest of Chicago’s fire stations to install their own poles.

In 1880, Boston advanced the idea by making its fire stations’ poles from shiny, slippery brass.

Today fire station poles are no longer en vogue, as many people consider them safety hazards. New firehouses are often built without them, and one-story fire stations are generally preferred.

(Source: PeteLamb.com, via wired.com)

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In 1962, the French government created CTDEC, a research and training center primarily devoted to screw machining, in France’s Haute-Savoie region, located right across the border from Geneva, Switzerland. Comprised of 630 member companies, CTDEC has an annual budget of 6.3 million euros, and contains 6,600 square meters of laboratories and workshops.

One of the most interesting resources at the CTDEC is its advanced diagnostic center used to identify part defects. It contains an extremely powerful microscope that can magnify objects tens of thousands of times. It has the strength to see inside an ant’s eye and can surpass that magnification quantity exponentially. CTDEC charges 90 euros per hour for companies to use services such as this one, and non-member companies from around the world are allowed to use the facilities services for the same fee.

The first week of April, Noah Graff of TMW attended a press junket put on by the Arve-Industries Competitiveness Pole in the Haute-Savoie of France, a historic and current hotbed of machining close to Geneva Switzerland. The first day the journalists had a tour of the Musee de l’Horlogerie et du De`colletage, or, Museum of Clocks and Screw-Machining.

David Plitt, the foreman of the U of C machine shop tells about producing instruments used for scientific experiments in space.

Jeff and Brad Ohlemacher, president and vice president of Elyria manufacturing, talk about utilizing Verne Harnish's Rockefeller habit of "the huddle" to unify their employees.

Machinery dealer Jim Graff just got back from a Delphi auction in Kettering Ohio. He reported that most machines there were selling very cheaply and that many were leaving the country. The two biggest buyers at the auction were from India and Peru, who primarily bought small production machines such as milling machines, Bridgeports, and Dennison Presses. Most of the Acme multi spindles and Acme repair parts were bought by dealers. Jim also observed that there was a strong presence of online bidders.

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A recent story by Frank Langfitton on NPR’s “All Things Considered” reported that rising costs and shifts in Chinese government policy are actually forcing hundreds of smaller Chinese factories to close. According to the story, profit margins are disappearing as a result of the rising Chinese currency value, which has forced manufacturers to move their operations to lower cost countries such as Vietnam.

The story reports that China’s government wants to encourage higher-tech manufacturing, so it is taking away the incentives it used to give to cheap goods manufacturers such as no taxes and cheap rent. China wants to follow the same path as its fellow Asian countries such as Japan and Taiwan, whose products eventually progressed from low-tech to high-tech. This movement to more sophisticated types of production has created the same obstacle for Chinese companies that challenges U.S. companies – finding skilled labor.

Familiar patterns aren’t they.

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This day on March 18, 1662, the first bus service began in France. Blaise Pascal, most famous for his mathematics, physics and philosophical genius, conceived the idea. The system started with seven horse-drawn vehicles running along regular routes. Each coach could carry six or eight passengers. King Louis XIV granted a royal monopoly: Try to compete, and your horses and vehicles would be taken away.

The fundamental problem of the bus service’s business model was that in the feudal society of seventeenth century France only the nobility and gentry were allowed to ride, which they did purely for amusement. The common folks that the service could really benefit, the soldiers and peasants, weren’t allowed to ride, so when the novelty of the new invention wore off, bus service ended in 1695.

The bus concept did not reappear in France, along with New York City and London until early Nineteenth Century – post feudalism.

Most great inventions follow a similar pattern as the bus’s. They start out as a novelty only accessible to the elite. Not until they finally become accessible to the masses do they have the power to change the world. When the first computers were invented only a select group of scientists could use them. People dismissed the idea that they could be useful to the common man. Not until personal computers became affordable to the world’s middle class and easy enough for an average person to operate, did they revolutionize how people communicate and find information. Yesterday, March 17, Tesla Motors began production on its Tesla Roadster, which will sell for a base price of 98,000 dollars. It will look cool, it will be better for the environment than cars with internal combustion engines, it will eliminate the need for its owner to buy gasoline, but until the masses can afford one and reap its benefits the electric car will not change the world.


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Sources, Wired Magazine, www.teslamotors.com

Recently there have been four deaths and 350 significant allergic reactions from a contaminated supply of Heparin sold by the Baxter brand. Baxter outsources a key ingredient for Heparin in China which has been identified as the cause of the health disaster.

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In the February issue of TMW  the “One on one” section featured Bre Pettis, the star of “Weekend Projects,” a weekly Internet video show which shows how to make everything from a bicycle, to a workbench, to a CNC robot. Every project is supposed to be possible to finish in a weekend, and many come with downloadable PDF files with more detailed instructions. Whether you end up making the stuff or not, the show can be quite captivating, and just fun.

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The following are two vlogs on the 2008 presidential election by Lloyd Graff, and owner of 's Machining World.

In this video, Lloyd Graff criticizes a recent article by John Ratzenberger which says “a president should be able to change a tire” in order to represent the common man and demonstrate the importance of keeping manufacturing in the United States. He believes the most important thing for our next president is that he or she can unite the people.
In this video, Lloyd says that he will vote for Barack Obama despite disagreeing with 80 percent of his policies. He believes that an Obama presidency is an unprecedented opportunity for reconciliation among races in the United States, and that is more important than his politics.

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In the 2008 January issue, Today’s Machining World did an interview with Dennis Hoff, president of Hoff-Hilk Auction Services, an online auctioneer which sells commercial and capital equipment exclusively. In the interview Hoff gives an insider’s perspective on the online auction business, discussing the effects of auctions on both the buyers and sellers from both a monetary standpoint as well as psychological one.

 

Rarely have I ever seen such a dramatic glass half empty, glass half filled story.

The pessimists, the bears, the media based in New York and the economists who work for money center banks see an economy tanking, dollar falling apart, housing dead for a decade, and a stock market shuffling in the mud. Virtually, blood in the streets.

The optimists see a slowdown in housing offset by a surge in exports. They see softening interest rates, a useful fiscal stimulus that will easily pass Congress and be signed, a bottoming residential real estate climate very inviting to speculators, and booming economic growth in the U.S. by late 2008. They also see oil softening to $75 a barrel and refiners keeping gas well under $3 per gallon. The only real inflation is caused by the idiotic ethanol boondoggle which has screwed up the old balances in American agriculture.

When I look at the two scenarios, the glass half full view looks much more likely, particularly in the industrial arena. Wall Street has taken a series of body blows because of the latest derivatives fiasco. The sub-prime mortgage market is unwinding, but the refinancing wave will begin very soon as 5 percent money becomes available to solvent borrowers. If you add this to benign commercial rates, tax cuts for individuals, weak dollar, modest inflation, cheaper gas, a national election, and cheaper depreciation and small business write-offs, it spells explosive rebound. Man on the street confidence is soft now, and business has caught the fear bug because of the shrill, no-nothing New York media claque, but this will turn as the election gets closer. People are tired of Bush. An Obama presidency is both enormously bullish for personal confidence and very scary because of the senator’s leftist rhetoric. A Clinton nomination probably means another Republican in the White House, which means gridlock, which is usually bullish.

So at the end of January, 2008, the year looks very promising – if we are not blinded by the sourpusses.

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On Jan. 10, 2008, Tata Motors unveiled its revolutionary $2500 car, the Tata Nano, also being called “The People’s Car” by its maker.

The vehicle measures 3.1 meters in length, 1.5 meters in width and 1.6 meters in height. It has a mono-volume design, with wheels at the corners and the power-train at the rear in order to provide both maneuverability and space on the inside to accommodate families.

The Nano has a rear-wheel drive, all-aluminum, two-cylinder, 623 cc, 33 PS, multi point fuel injection petrol engine. It’s the first time that a two-cylinder gasoline engine is being used in a car with single balancer shaft. That might seem pathetic compared to industry standards but in a country in which millions use motor scooters to transport families it will revolutionize the lifestyle of India’s masses. According to Forbs.com, $2,500 is three times higher than India’s per capita income, and the average pay for a Tata Motors factory worker is $5,500 a year.

Read the “Next” feature in Today’s Machining World’s December issue for further insight on the $2,500 car from auto industry experts.

In this video of the car’s unveiling, Mr. Ratan N. Tata, Chairman of the Tata Group and Tata Motors compares the innovation of “The People’s Car” with the moon landing, the invention of the bicycle and the evolution of today’s personal computer.

 

The December 12, Wall Street Journal discussed how 3-D printing machines are now becoming available to consumers to produce objects in their homes as diverse as iPod covers, action figures or ash trays. Such machines also known as rapid prototyping machines have been in use by manufacturers, scientists, and professional artists for years but this is ground breaking because it brings the power to produce objects quickly at low volume to the common person.

Last year Today’s Machining World did an interview with the late Larry Rhoades, former CEO of Ex-One, a company that produces 3-D printing machines which can print metal parts and tools for rapid manufacturing using powdered metal as opposed to the softer material which the traditional 3-D printing machines use.

An Excerpt of an interview with Rhoades, the visionary behind 3-D metal printing.

 

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One of the best early indicators of the American economy may be breast implants, tummy tucks and LASIK procedures. According to the December 8th Wall Street Journal, cosmetic surgery is a dead-on indicator of consumer confidence. Confidence is not a perfect match for consumer behavior, but uninsured cosmetic procedures are expensive, put off-able acts like car buying and condo shopping.

The Journal tells us that breast building is soft, and the fat has been sucked out of the liposuction racket for the moment, so we can expect the stock market to droop.

Cutera, the Brisbane, California laser maker, says that their earnings picture has darkened like liver spots, which may translate into weaker house remodeling sales and affect our world adversely.

Never underestimate the importance of Botox. It’s one more wrinkle in understanding the path of the machining world.

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The $100 computer and the $2500 car are the hottest products on the planet today. Neither one is yet a reality, but the intense interest in developing these mass produced items for potentially a billion new customers in Asia, Africa, and South America is driving a mega battle in electronics and autos.

A few years ago, the personal computer push built the Microsoft and Intel fortunes. But in 2005, Nicholas Negroponte, of MIT, postulated that the $100 dollar computer was doable and set out to build the market and design the product. In the Nov. 24, 2007, issue of the Wall Street Journal, a front page article denotes the competitive struggle he has had as Intel attempts to co-opt his idea. The essential fact is that national governments will buy the production in the millions of units, and prices of Negro Ponte’s and Intel’s computers are now circa $200 and falling. Intel is scared of the product, which uses $3 software of Linux variety, but they are more scared that arch foe AMD will get the processor business, so they are pushing their low cost Classmate version all over the globe.

In cars, Tata Motors of India is rushing to develop a $2500 car for the new middle class of India in the hope that young people everywhere will covet one. Today we have over production in cars in the U.S. and Europe, but the potential market for cheap vehicles is absolutely enormous.

The big Japanese builders; Toyota, Nissan, and Honda, are ardently developing a $6000 car which could also reach a huge audience in Eastern Europe and China. For the suppliers of automotive, this offers a gigantic new market for brakes and tires and transmissions. It will be fascinating to see who will be able to serve this next great market.

On the computer front it seems likely that Silicon Valley will be the center of development of the $100 computer. It is less clear where the $2500 car will emerge. India and China have the cheap production capability, but I am skeptical about technical breakthroughs. Yet it is certain that the inexpensive, serviceable car will come soon because the demand will be insatiable, and it will be a lot more sophisticated than the Yugo.

 

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I recently made a trip to downtown San Francisco and discovered a new approach to fast food that seems to be prospering -- the soup and oatmeal take-out restaurant.
Take-out soup Restaurant Review

 

This is limited menu to the extreme. One location was an eight foot wide hole in the wall. Oatmeal was served until 10:00 a.m. and then replaced by soup. The soups rotated daily. When they run out of one, that particular variety was finished for the day.

The other soup outlet had a dozen tables, more staff, longer hours, but also stuck to the oatmeal and soup theme. I think the approach will spread to other cities that have a lot of walking traffic. Today, the number of people who leave home in a rush without eating breakfast is huge. The oatmeal fix trumps the Egg McMuffin for the nutrition oriented Generation X and Y’ers who are the bulk of the clientele. Soup is time consuming to make but cheap per serving. For a low rent spot, the margins could be stunning for an owner operator.

An interesting analogy in the machining realm is taking shape at Tim Handel’s shop in Willetts, California. Tim is a 60-year-old screw machine junkie. For several years he has been bargain picking older National Acme screw machines. He sets each machine up for a specific job in a big old building in an old lumber mill town, a two and a half hour drive from the Bay Area. He has 30 multis now which he keeps running with four people including him and his wife.

With this kind of cheap overhead operation he can compete successfully on price. With the machines constantly set up he has extremely fast turnaround time, especially if he keeps several bars of metal in stock.

It’s not exactly soup and oatmeal out of a nook in San Fran, but it has the same elements for success. Tim’s shop’s production is cheap, accessible, and high quality. The formula is as old as porridge and broth.

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The immigration pickle we are in is supposedly being debated in the preprimary beanbag in Iowa and New Hampshire. But all I’m hearing is lowest denominator crap about keeping out nasty Mexicans.

Lost in the mush mongering is the diminishing magnetism of America to the best and brightest in the world who are getting the fuzzy message that they are welcome to come as tourists or students but if they expect to stay for a career they’ll have to beat a system that is rigged against the honest and successful would-be immigrant.

I have witnessed this messed up system first hand as my used machine tool business Graff-Pinkert has tried to get Martin Whitfield, a talented Wickman rebuilder a solid immigration status. 

When we first started the process to get Martin legal status we were told by everybody we asked that is was impossible unless he won the immigration lottery (the U.S. actually runs a lottery and admits 55,000 people a year who get lucky) Martin would have to wiggle in as a worker who was unobtainable in the American labor pool or as a trainee for a job in which he had unique qualifications. As a Wickman specialist he really had those rare credentials, but we felt the need to hire an immigration attorney who understood the red tape and could navigate Martin through the morass.

The attorney did manage to guide Martin into an 18 month stay at Graff-Pinkert where he proved to be a valuable addition, but then he had to go back to England for three months in order to jump through the next immigration hoop. Graff-Pinkert paid the lawyer’s bill and Martin’s living expenses in Britain while he waited for another window to open.

We were dancing the immigration cha cha cha – three steps forward, three steps back – and each step cost a pretty penny to the legals.

This year we decided to devote fewer resources to Wickman rebuilding and were reluctant to pay many thousands of dollars to the legalistas. We gave Martin several months advanced knowledge of our decision so he could find another position in the U.S., but he was unable to find anybody to hire him with his immigration baggage. He could have found 20 willing employers without the visa issue.

Now Martin is headed back to England to start his quest once again to get to America. If he can find a company in England with an American manufacturing arm, he has a lever to reenter the country. He has a few possibilities.

Meanwhile, his furniture is in storage and his kids are out of school. His spacious apartment in the Chicago suburbs is empty, and his American dream is on hold.

What a country.

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Two decades ago, a cashmere sweater was a soft symbol of wealth and status warn by pipe smoking duffers at the club. But the sharp folk in Bentonville Arkansas who run Wal-Mart believed that cashmere was not the exclusive wool for the rich, and decided cashmere sweaters should be brought to the masses. “Why not sell a $49 cashmere women’s sweater, or a $39 or even a $29 one?” they asked.

And the Shepherds in China and Mongolia heard them. A herder with 30 goats living in a tent soon had 300 grazing goats. He did what capitalists everywhere do – expand to meet the demand. And shepherds reaped the reward of Wal-Mart’s audacious bet on the desires of its customers to have buttery sweaters for $30 to $40. And soon the Asian shepherds had small homes and televisions and toilets and life was good.

Except 10 times more goats ate all the green grass, and the bigger herds needed to move to greener pastures. The old land turned to dust and the wind blew. Huge clouds of dirt miles long and wide lifted off the ground, browning the local air and ultimately circling the earth. The shepherds had to leave their newly built homes to search for new grass, and China and the world was a dirtier grittier place. But Wal-Mart got their cheaper wool, and you and I got our comfy cardigans.

The net gain for the Chinese economy was real in this case. New sweater factories were built. Girls got jobs at the sewing machines after fleeing the poverty of rural China. The sewing machine firms sold product and the machine guys sold them components for bobbins and stitches. The shepherds tasted prosperity and the goats found more company. But the gains were diminished by the communal degradation of the air pollution. That is not in the Chinese growth statistics, but the people  on the ground know it’s real. This is the yin and yang of “Wild East” growth. Eventually the Chinese people will not take it anymore.

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I see the Feds bagged some more bad dudes relating to the machining world. Zimmer, DePuy, Smith & Nephew, and Biomet owe $311 million in fines to the Federal Government to settle criminal and civil penalties stemming from kickbacks paid to surgeons doing orthopedic implant procedures. That’s a lot of bone screws.

Zimmer Holdings alone is taking a $169 million write-off in the coming financial quarter. Stryker of Kalamazoo flipped for the prosecution to seal the deal in this case.

Ex-Attorney General John Ashcroft will get in on the gravy train by being appointed the governance monitor for Zimmer.

I find this case particularly seamy after doing a big cover piece on squeaky clean Warsaw, Indiana, in Today’s Machining World last year. I know that doctors routinely take freebies from drug companies and do cheesy speaking engagements for juicy fees, but it appears that the bone cutters had graft down to a science. We all end up paying inflated insurance fees to cover the insider’s chicanery.

We all know that waste is rampant in hospitals. One little tidbit related to the orthopedic racket is the bone screw packaging. Bone screws come in packages of six, which are opened in the operating room. Once the package is opened, any unused bone screws are discarded. The screws sell for $50 to $500 each. I would guess an enterprising scrap dealer might resell them to Russia or Serbia for a tidy profit. With our cockeyed medical payment system we invite this kind of waste.

But now we can all breathe easier, with Ashcroft nosing around the surgeons’ scrubs.

Hopefully with this messy case out of the way the corporate warriors of Warsaw can get back into buying more Citizens, Stars and Tsugamis and build their brands with product quality, not bribes.

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I did not attend the AMMO EXPO in Las Vegas, but I have talked with several people who did. The consensus is that the show was a commendable first try but it barely moved the needle as a viable trade show.

Joe Smith, the promoter of the event, sold it tirelessly as an alternative, potentially to the fading WESTEC show. He probably figured that by holding it in Las Vegas he would bring in a national crowd as well as the California, Arizona, Nevada contingent. He coordinated it with the quarterly NTMA national meeting. He did some smart things, though his date coinciding with both EMO and midway between the Jewish High Holidays was hardly optimal.

Do we need another industrial trade show to go to with the multiple SME get-togethers and the specialty shows like PMTS and FABTECH? I am skeptical, but the users and the exhibitors will vote with their feet.

Frankly, mine already hurt.

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Is China the only bad guy in the lead paint fiasco, for which millions of Barbie dolls and other plastic toys were recalled? You have to blame China some. China has been responsible for past faulty and toxic products, but it’s too easy to use them as a scapegoat. What about blaming Mattel for not keeping its own quality control up to snuff? Mattel gave up control of its production operations. That’s quite risky we can see now.

Also, few point out that Mattel conveniently lumped the story of its toys that had dangerous, small magnates which it also recalled, with the lead paint toys it blamed China for. China never designed the toys with magnets, which were small and easily swallow-able, Mattel designed them. But the way the story came out made it seem like the magnets were China's fault as well. You can read this argument in this article of Caijing Magazine.

I’m not a safety expert but my instinct tells me that it’s a lot more dangerous for a child to swallow a magnet than play with a toy coated with lead paint. The lead paint story is a red herring. Sure it's terrible for Mattel’s sales, but at least it diverts some of the really toxic blame. I'll bet Mattel's PR people and lawyers are seeing the silver lining. American corporations need to take some responsibility for the well-being of American citizens.
Blaming China alone won't solve the problem.

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Two young men still at the top of their games copped pleas on August 27, 2007. They will both be going to Federal Prison despite their fabulous wealth and instant name recognition. They gambled their freedom and careers with bizarre acts of recklessness abetted by cronies without the strength to say no to them.

Gene Haas, the unlikely billionaire of American machine tools, and Michael Vick, the quarterback who redefined the position in the NFL, both saw their freedom slip away when their associates flipped to the prosecution. Even the shrewdest legal talent money could buy couldn’t keep them out of jail.

Haas’ hubris led him to tax evasion to cheat the U.S. treasury out of millions of dollars because he thought he was wronged on a patent dispute verdict. Vick electrocuted pit bulls which he had gambled on and buried the bodies on his land.

Haas and Vick were both single men who defied the conventional wisdom of their games. Haas told the world he would build a vertical machining center in L.A., sell it for less than the Japanese builders, cut the price year after year and service it like the Maytag repairman.

Vick said the quarterback was a running back who scored points with his feet. He destroyed defenses built to thwart skilled white boys who played the vertical passing game.

Haas and Vick are iconoclasts in their respective worlds. They broke the defining rules of their peers and they were vilified by the established players. Both guys loved to stick it to the reigning authorities who mocked their un-orthodoxies and said they had to fail because they were different and too difficult.

Maybe when you keep showing up everybody else in your field, make huge money, and travel the country in private jets, you think that society’s rules are for the little people. You’re going to do what you’re going to do, and you’re untouchable. It’s so Macbeth.

But in America, Presidents get impeached, and billionaires do go to jail, and quarterbacks plead. The judicial system is still painfully stacked towards the rich and famous, yet on August 27, two of our richest and most famous men conceded their freedom at federal court houses. Haas and Vick -- two four letter words synonymous with greatness -- and utter stupidity.

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LOS ANGELES -- The owner of Oxnard-based Haas Automation, Inc. pleaded guilty this afternoon to a federal conspiracy charge related to a scheme in which tens of million of dollars in bogus expenses were put on the company’s books during a two-year period in an attempt to avoid the payment of more than $34 million in federal income taxes. Read the rest of this press release and comment on it at www.swarfblog.com.

Zhang Shuhong, owner of the Lee Der Industrial Company, responsible for supplying toys with toxic lead paint to Mattel, committed suicide over the weekend. My question is, would this scenario have occurred in the United States? And, what does this mean for American manufacturing?

Was it a customary Asian act of shame, was it guilt, or was it out of fear of the totalitarian Chinese government? My guess is he was scared of a totalitarian government which wants to strangle him now for tainting one of its most important product sectors. According to the New York Times, 80 percent of the world's toys are manufactured in China. One thing is certain, Zhang Shuhong was going to be held accountable for his actions. He had strong reason to fear the wrath of the Chinese government which in May had sentenced to death Zheng Xiaoyu, the former head of the Chinese State Food and Drug Administration, as a scapegoat for the recent pet food scandal which killed scores of American Cats and Dogs.

So what does this event mean for Americans and American manufacturing. I suppose it's a positive sign. The Chinese are without a doubt taking responsibility for their actions. The capitalist world market is exerting its muscle and forcing quality control. The excuse that the companies like Lee Der Industrial Company use that they have to cut corners to make their margins� isn't going to fly with American companies which will be crucified for 'little negligence'� like lead paint. I doubt that the Chinese government will raise its standards for moral reasons. It's poisoning its people as we speak, with awful environmental practices contaminating the country's air and water. But hopefully now the world can expect safer Chinese products, and perhaps Chinese companies's costs of production will have slightly less advantage over manufacturers in the United States. Read the rest of the blog and comment at www.swarfblog.com.

Ten-year U.S. bond rates have dropped 50 basis points (.5 percent) in 60 days. This is a significant lurch which will be felt almost immediately in lower mortgage rates. The big home builders like Pulte, D.R. Horton, Lennar, KB and Beazer are all hemorrhaging, with sales down 30 to 50 percent from an already softening 2006.

The stock market broke 14,000 on the Dow recently and then got very jumpy about sub-prime indigestion on Wall Street. Money leveraged buyouts like Chrysler and Tribune Company will get harder to close as the big lenders find it tougher to dish off questionable paper. The Blackstone IPO in June was probably at the top of the market for the buyout frenzy (surprise), at least in the short run.

With John Edwards yanking the Democrats further and further left, in advance of the Iowa and New Hampshire primaries next year, the heat will be turned up on “tax the rich� schemes in Congress and in the press.

As American interest rates fell, the dollar continues to weaken against the euro. This may be a slight plus for American manufacturers, but it hurts us as consumers of oil and food. Fortunately, it has been a good growing season or we would have really been hammered. Read the full blog and comment at www.swarfblog.com.

The Gene Haas tax evasion trial is projected to begin in September. It has been stalled by continuances, but both sides evidently want it to happen now.

Denis Dupuis who was Gene’s top deputy was indicted with him. Dupuis has made a deal with the Feds to testify for the prosecution.

The Haas Automation company has attempted to distance itself from Gene’s travail and appears to be going strong. My dire predictions about the possible impact of the case on the Haas business have proved wrong to his point.

My understanding is that Gene Haas still owns the Haas Automation company. Today’s Machining World will be following the trial closely, because the outcome will affect the machining community. Haas, the man and the company have embodied the resourcefulness and resiliency of American manufacturing as much as any person or company over the past 25 years. The trial certainly demands our interest and scrutiny now. Read the full blog and comment at www.swarfblog.com.

I hear that Sprint has notified 1,000 of its customers that they are being terminated by the cell phone service provider. Sprint will get some momentary snickering PR, but frankly, I am sympathetic to the idea of dumping the nags. I believe that not all customers are worth the aggravation. A demanding but intrinsically fair client is a good thing because he or she forces you to raise your game. But some people just play with your head, and life is too short for such time wasters. Read the rest of this blog and comment on it at www.swarfblog.com.

The labor shortage of skilled machinists is not a singular phenomenon. Heavy equipment operators who maneuver excavators, dozers, and cranes are also scarce. Power Equipment of Chattanooga, Tennessee, is doing something about it in its area. The comapany contributed $600,000 worth of Kubota machinery to Chattenooga State University to equip operator courses. According to Larry moon of the company, the classes have been oversubscribed every time they have been given. On the machine tool front, Haas Automation has been the most aggressive in donating equipment to colleges and universities. Read the rest of this blog and comment on it at www.swarfblog.com.

Three blokes in their mid-twenties from Cambridge University have developed fantastic mechanical chains of devices, like sliding chess pieces, dropping hammers, and perfectly aimed darts that keep the crazy sequence going on video. They reckon four to five million people have watched their clever automation process on screen. I urge every reader to go to their website www.baynhamptyers.com to see their hard work.

I talked to Tom Baynham, one of the creative engineers, about the group's business plan, and how the popular videos fit into it. He says they are currently working on a project for a firm providing portable machine tools for the oil industry. He says that their videos have brought them notoriety and networking opportunities in manufacturing circles, but my sense is that they have not grasped the potential of the films. Read the entire blog at www.swarfblog.com.

In the 2007 Boston Marathon, the pipsqueak Spira Shoe Company stole the show from Nike. Two unknown Kenyans led for two thirds of the race wearing brilliant yellow Spira shoes which had tiny springs in the heel. Spira knew the shoes were considered illegal under official race regulations, but the company just wanted to be noticed, a goal that it indubitably accomplished. Unknowns do not win the Boston Marathon, but this year one did -- Spira. Read the rest of this blog entry at www.swarfblog.com.

Sometimes I have a day when everything comes together and I have to say, "Thank you, God, for allowing me to experience it." I had one on May 7th. Noah and I interviewed Eitan Wertheimer, Chairman of the Board of Iscar, the huge Israeli cutting tool firm that he and his father Stef built. There was great chemistry from the start. He wanted my take on business in America. I wanted to get his view on Israeli Politics. The interview lasted 75 minutes, but we could have talked for hours.

Then Noah and I split up. He went to interview someone else, and I went to see the young entrepreneurs at Microlution, a machine tool startup on the Northwest Side of Chicago. They are doing something very cool. Their current machine is potentially a design engineer's best friend because the engineer could make prototypes literally at his desk by himself. I had to leave eventually to meet Eitan Wertheimer again at a dinner reception downtown, and I needed a ride. In a moment of inspiration I asked Any Phillip from Microlution if he would like to meet Werthheimer of Iscar and he said yes. We walked into the reception and saw Eitan surrounded by a gaggle of people. He immediately greeted me, I introduced him to Andy Phillip and briefly described the Microlution product. The two men immediately started talking shop for about 10 minutes. They exchanged cards and then Eitan introduced him to several men from Pratt and Whitney. One of their aircraft engine guys we met has 450 design engineers working under him.

I got a huge kick out of it. Will anything great come of the interviews and the matchmaking? It already has for me. Read the whole blog at www.swarfblog.com.

The following was take from a recent issue of Shipping Digest, in which John Engler, president of the National Association of Manufacturers, wrote about about the importance of education and the role it will play for the U.S. to compete in today's global manufacturing environment.

Truth is sometimes stranger than fiction. In an era of unprecedented global competition, the realization that the U.S. is still the world's No. 1 manufacturing powerhouse strikes many as pure fiction.

But it's true. We are succeeding in the face of this competition because in the past century our manufacturing economy has emerged reborn reborn from the assembly lines to an innovative, technical and highly skilled career.

But in all the changes to our economy and global competition, we have lost sight of the competitive advantages that brought our success here home: smart