Gene Haas

Gene, how did you get into this business?
When I was in high school I worked in a machine shop. I started out sweeping fl oors. This is before child labor laws I guess; I was only 13 or 14 years old.

Did you take engineering in college?
I went into engineering when I first got to California State University of Northridge. I was in engineering for two years until 1972, around the time Lockheed almost went bankrupt. It seemed like maybe engineering wasn’t the degree to be in, so I switched over to business.

Where did you go from there?
They did placement at college, and after I got my degree they found me a job. It was going to pay something like $720 a month. I was making $300 or $400 a week as a machinist, so I just went back to working at a machine shop.

I actually had a job for six months as a programmer at Seaton Wilson, and I was programming the old fashion way – this is even before computer systems came along. It was at one of those fundamental turning points in the whole industry. When I started learning how to make parts in the machine shop, I ran a Hardinge Chucker and a Logan lathe, which were manual machines, and I was making parts one at a time. You put stock in the collet, and you feed the thing; you turn that diameter and then go to another dimension and put a groove in – that’s how parts were made. I was probably in my 20s doing all this and going to college and found it wasn’t easy to get a job. Around 1976, I decided to get a job using numerical controls.

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We were visiting my daughter and son-in-law in Palo Alto and wanted to celebrate life by going to their favorite restaurant, the Flea St. Café, in Menlo Park. We had a wonderful meal and wanted to top it off with dessert.

Everything at this establishment is made with in-season local ingredients. We ordered blackberry pie, blueberry panna cotta, and angel food cake with fresh strawberries to share. The menu said that the angel food cake had the herb thyme in it, which seemed absurd, but my wife wanted angel food cake so we ordered it. The waiter had actually tried to steer us away from that selection but we thought it was because it seemed like a boring choice for such a topnotch eatery.

The cake was terrible with the bitter herb killing the normally benign flavor of the fluffy white dessert. But after finishing every last crumb of a wonderful meal, except the angel food cake, it struck me that this restaurant was good enough and confident enough to do something ridiculous like put thyme in their angel food cake. I can gladly forgive them for the miss because they tried for a home run where anybody else would settle for a single. The restaurant excelled because the proprietor would not settle for nice.

I remember a restaurant owner telling me the worst answer from a patron to the question, “how was your meal?” was, “it was fine.” “Fine” to a good manager means the meal was “forgettable” and “I’m looking for someplace better.”

What I will remember from the Flea St. Café is that I had a great meal. I can heartily recommend it partly because they took a chance on the thyme and struck out.

There is a lesson for us even in the land of machinery and perfect parts. If your product is outstanding and you occasionally overreach or goof up, the customer will tolerate it, maybe even laugh about the fact that you spilled the soup. But if you are just okay and screw up on the hamburger, he will start looking for an alternative. Creativity is a virtue even if it fails, when the core product is outstanding.

Question: Please share a story about a failure of yours or someone else’s that for good reasons or bad, is unforgettable to you.

Today’s Machining World Archives October 2006 Volume 02 Issue 10

Lloyd Graff:   We’re with Jack Schwietert of V-S Industries to talk about manufacturing in Mexico. Jack, when was the decision made to establish an operation in Mexico?

JS:  The decision was made in 1993. At that time, we were supplying a customer who had multiple plants in the states. They gave us an award for being their best supplier. One of the fellows I was dealing with asked me, “Have you ever considered putting a shaft manufacturing facility in the Southwest? When I said no, he said, “Our largest client is a motor manufacturer in Juarez, Mexico. We actually supply the shafts to this plant ourselves. We did a study recently and discovered we’re our own shaft suppliers. We’ve been working to resolve that but to no avail.”

The plants that they had here were very inflexible union plants, and probably did not like the idea of supplying to Mexico.  He said they found a lot of good metal turn companies in the Southwest, but they seemed oriented around defense industries making 15 perfect parts a week. When you asked for 30,000 parts a week, they just couldn’t conceive how you would even do that. They wanted to see if we were interested in starting a facility down there.

Now when I worked for 3M, I would visit an engineer friend of mine who took me to their Maquila facilities in the Tijuana area. I met people he dealt with and always kept a file on Maquilas. We decided we would go down there. I didn’t know how to conduct business in Mexico. We decided we needed a Maquila operator who would shelter us and take care of the payroll. Our customer actually became our shelter operator, and we operated for the first year and a half of our existence down there in the plant of our customer, with him supplying our workers. We told him how many people we needed, he took care of the payroll and at the end of the month, they would give us a bill for how many hours we had used. After a year and a half we hired Carlos Castel, the fellow who ran our operation in their facilities. I hired him away from our customer with their approval. We had written into our contract that we could go out and deal with other customers, but I never felt that was appropriate as long as we were under their roof.  Their business increased, and they needed the space.  We wanted to do work with other customers.  We moved into our own Juarez facility in January 1996.  We now have four other customers down there. It’s very low volume, quick turnaround, and high value-added business, exactly what you want in Mexico.  The only thing that’s really cheaper in Mexico is labor. The building in Juarez is every bit as expensive to lease or own as it is in El Paso. The power is probably more expensive. The work rules are probably more restrictive in Mexico. Juarez is part of the State of Chihuahua, which is a very conservative state. That’s where the PAN party started. We are non-union, but that’s a little unusual in Mexico. Most places in Mexico are union companies but are considered “white,” meaning friendly unions.

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