13 ms·

What happened to the US machine tool industry?

230 points by jseliger 3y ago

grow2grow 3y ago
Right, it seems the U.S. economy is trying to say, "making elementary machine tools is beneath us." The important bit is at the end: the U.S. is still a top buyer of machine tools (made elsewhere). Is the same thing to happen with software? When it becomes worth the time of the U.S. economy to produce basic machine tools again, they'll get to create new machine tools factories using all the latest technology: so it is probably good thing the "old way" is not still around hanging on by a thread. The market naturally is culling technical debt.
- toasterlovin 3y ago
  Right. The US economy was well poised to tackle the massive task of computerizing humanity and, being a nascent technology stack with green field opportunities abounding, it was more profitable than continuing to produce machine tools. Meanwhile the Pax Americana has eliminated the risk premium to manufacturing overseas, so our entire economy has reconfigured itself around this task and opportunity of computerizing humanity. To our massive benefit, I think. IMO this is the main driver between diverging American incomes compared to the rest of the developed world.
  - dragontamer 3y ago
    As long as those manufacturing centers are part of US allies (Japan, Korea, Europe, Australia, Taiwan), or at least trustworthy neutrals (Vietnam, India), I'm happy. But some manufacturing, in fact a large amount, is Chinese. And I'm not convinced they've got our best interests at heart. Either China needs to calm down over their "Wolf Warrior" style, or we need to cut back on providing benefits to an obviously and increasingly antagonistic power. --------- The other part, with respect to Taiwan + China, is that we must defend Taiwan as they are a critical source of advanced-materials (ie: computer chips) to us. Yes, its more efficient to have Taiwan centralize production, but it does come at a cost. We need to be ready to defend Taiwan and keep it safe if we are to continue to build computers and phones out of Taiwan-only parts.
  - poncho_romero 3y ago
    The entire economy is configured around making quarterly profits for shareholders. Any good that happens to come out for humanity is purely incidental. The US economy is not some fairytale hero.
- MajimasEyepatch 3y ago
  > Is the same thing to happen with software? Offshoring in software development has been around for a very long time. Most large US companies have a mix of onshore and offshore devs. The more mundane the software, and the tighter the financial macro-environment, the more the ratio shifts toward offshoring. This is the way the offshoring cycle has worked for a long time. However, unlike hardware, software is about information and communication, and cultural context is very important. I have seen firsthand that non-US teams building software for US consumers often don't quite understand the reasoning behind the requirements and may lack polish around basic things like English. (The same is true, of course, in reverse, if US teams build for non-US audiences.) So I think it should be a little bit stickier. You also cannot copy software design in the same way that you can copy, say, the design of a lathe. A lathe is a lathe, and as long as you've got the tools and materials, a lathe made in the US should not in theory be any different than one built in China. The same is not true of software.
  - dukeyukey 3y ago
    > I have seen firsthand that non-US teams building software for US consumers often don't quite understand the reasoning behind the requirements and may lack polish around basic things like English Something I'm curious about, have you seen this happen with countries culturally close to the US? Like teams based in Canada, Ireland, or the UK?
    - WJW 3y ago
      One of the biggest lies in cultural thinking is that countries like Ireland and the UK are "culturally close" to the USA. Sure they are close-er than say Italy or Japan, but anyone who thinks "close" means "similar enough that it doesn't matter" is in for a rude awakening. In reality there are incredibly large gaps around even the most basic things like the meaning of words. As a very basic example: the meaning of the word "interesting" differs radically between cultures. Most US employees would think the boss is indeed interested when they describe an idea as "interesting" and may even bring it up again at some later date after more research. Meanwhile, someone from the UK means that it's the dumbest thing they've ever heard and they will be incredibly miffed if it is ever brought up again.
- michaelt 3y ago
  > Is the same thing to happen with software? I have a theory that one of the major challenges facing manufacturing in the US is actually the opposite. A manufacturing company in the US is competing for smart, numerate STEM graduates with the likes of Google who offer graduates $180,000 with zero experience (or so I'm told) But they're also competing with manufacturers in the far east, where $40,000 is a great salary, for someone with several years of experience. Difficult to win both competitions.
  - poncho_romero 3y ago
    I think that’s right, and I think there’s a third aspect at play, which is that culturally the US doesn’t value jobs in manufacturing, machining, engineering, etc. as highly as it once did (after WW2, say) or as highly as it values finance and tech jobs today. I’m not sure how easily that could change.
- rsync 3y ago
  "Right, it seems the U.S. economy is trying to say, "making elementary machine tools is beneath us."" Hopefully policy makers and the citizenry will resist following what, as you say, the US economy is trying to say. You see ... You can stop making elementary machine tools. You will never stop making (people who can only make elementary machine tools).
- deleted 3y ago
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- poncho_romero 3y ago
  Will “all the latest technology” be available? The expertise the US once had in this area is largely gone, and won’t come back immediately. I think there’s real reasons to be concerned that the US will fall behind countries like China in areas like innovation because of this self-inflicted brain drain.
  - ddingus 3y ago
    Right now there are mandates to build out the manufacturing base needed for military efforts. They know the tech sent off shore will, for the most part, remain off shore. Additive manufacturing, an example of "latest tech", is a primary build up target here. It is new and expertise is being created as the tech itself is.
    - mitthrowaway2 3y ago
      Additive manufacturing doesn't help much if you want to build Liberty ship volumes, or roller-bearing tolerances, unfortunately.
      - ddingus 3y ago
        Indeed. HYBRID DED is going to be the answer to many of those scenarios. Basically, we couple subtractive with additive and maximize the benefits of both. Done right the risks are greatly reduced as are costs compared to just doing it the legacy way.
aj7 3y ago
People who understand this industry can answer in a single word. Fanuc. And when Fanuc realized that only GE was capable of competing with it in the computer controls needed to run machine tools (and wasn’t doing shit, another Welchism), it cleverly bought off GE by giving it the U.S. franchise for Fanuc, at least until the GE stink began to be undesirable.
- grow2grow 3y ago
  Yes, no surprise that a standard won the battle, over several competing choices. That seems to happen a lot.
  - droopyEyelids 3y ago
    Sort of a tautology, right? The winner of the competition becomes the standard.
    - helpfulContrib 3y ago
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boringuser2 3y ago
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- pixl97 3y ago
  > The new owners’ focus on profits meant... Pretty much the answer in one sentence.
  - hnthrowaway0328 3y ago
    short/mid term profits
- jjoonathan 3y ago
  Book recommendation: "Trade Wars are Class Wars" by Michael Pettis. If you don't buy the apologetics that permeate the popular economics sphere but still want an expert to walk you through the details, this is your book.
  - boringuser2 3y ago
    Sounds like commie gobbledygook. (RIP Norm MacDonald, the thinking mans comedian!)
    - jjoonathan 3y ago
      It's basic macro. Assets, exports, capital accounts, current accounts, savings, investment. Essentially, windfall surplus in one area causes savings bubbles causes investment bubbles causes asset pumps and export dumps, usually in a different area. He cites a bunch of historical examples and then goes step by step through techniques for identifying sources/sinks and directionality. Oh, and did you know that Ricardo based his analysis on the assumption of a closed capital account? It's interesting how the theory of comparative advantage usually gets invoked without mentioning that ;) If you dogmatically reject the idea that political economy could possibly involve the concept of class, I'd love to hear how your analysis clusters the interests involved. In any case, he's not a CCP shill. He throws some mean punches in that direction with facts and figures to back them up. Everyone hustles in the world economy.
nofunsir 3y ago
I was binge watching TechFreeze[1] on youtube just yesterday! [1] https://www.youtube.com/watch?v=jOnxOTdx_ps https://www.youtube.com/watch?v=jOnxOTdx_ps
- lstodd 3y ago
  Industrial JP is very good also https://www.youtube.com/watch?v=5QjVeH2Z57E https://www.youtube.com/watch?v=5QjVeH2Z57E
ChumpGPT 3y ago
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- cpursley 3y ago
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  - pinewurst 3y ago
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  - PeterisP 3y ago
    The equivalency would be if there were weapons of e.g. some Iranian company sold to Israel and used against Gaza. As a US company, Haas has a duty to obey US-ordered sanctions and ensure that their products are not being used against the interests of USA, but it has no duty to ensure that their products are not used against interests of Gaza.
    - cpursley 3y ago
      This I totally agree with (US companies should abide by US law). It's the moralizing that gets under my skin.
- serf 3y ago
  >The company is morally corrupt. haas has been morally corrupt for some time. they're essentially the 'john deere' of machining, they sell under-performing over-priced crap that only they can sell parts for or maintain, which is convenient for them because they produce machines that have some of the highest downtime in the entire industry due to lack of repair facilities/parts/availability as well as overwhelming small quality control problems.
jd3 3y ago
https://www.youtube.com/watch?v=QU6nsfoNWDI https://www.youtube.com/watch?v=QU6nsfoNWDI for a trip down memory lane (and coincidentally, an apt example of how far we've fallen). Can you think of a single modern US-based industry/association which produces educational, instructional, and/or historical videos like this one anymore?
- Animats 3y ago
  Yes.[1] And, after 10,000 hours of apprenticeship, you can make as much as $50,000 to $100,000 a year as a tool and die maker! I have some entry-level skills at that sort of thing, from my TechShop days. There's a lot of stuff to learn and you have to do a lot of it to get good. [1] https://www.youtube.com/watch?v=l-7ivFEAzw8 https://www.youtube.com/watch?v=l-7ivFEAzw8
cantrevealname 3y ago
> Consider a company that manufactures its product on lathes. Assume that it has ten lathes that can just meet production requirements. Assume also that each lathe wears out in ten years and that the company has its investment plans so well organized that one lathe is replaced every year. Now consider what will happen if there is a 10 percent increase in demand for the product. The plant will need eleven lathes to meet production requirements. It will have to buy two lathes: one as a replacement for the worn-out lathe and a second to increase capacity. Thus a 10 percent increase in the demand for the product has produced a 100 percent increase in the demand for lathes. The 100% increase doesn't seem to make sense in this example.
- MajimasEyepatch 3y ago
  It's a 100% increase (i.e. double) relative to what the ordinary demand for lathes would have been.
  - Retric 3y ago
    The universe isn’t quite that binary. Suppose those lathes ware out 0.1% faster than expected lasting ~3 days less than 10 years, now eventually you replace 2 of them in the same year thus doubling demand in that year… Except the manufacture wouldn’t notice a spike from occasionally sending out a few days earlier even if it’s crossing a calendar year.
    - bluGill 3y ago
      a lathe doesn't wear out that way. It just slowly gets harder and harder to maintain tolerance. Eventually a new machine will be enough better as to make an experienced machinist take less time - they always have to stop and measure as no lathe can give you absolute accuracy, but when the lathe is new it is more predictable how much turning a handle will change things and so you measure before the last operation and adjust it to the right setting vs you measure get closer and measure again.
      - 3y ago
1nd1ansumm3r 3y ago
What was considered high-end precision machining a few decades ago is now standard and easily reproducible in cheap labor markets. For example, guitars made in SKorea used to be a bad joke. Their machining tolerances were too big and too inconsistent. Much like storage and bandwidth what used to be exotic cost-prohibitive is now cheap.
- hasty_pudding 3y ago
  > guitars made in SKorea used to be a bad joke Are they now considered good guitars??
  - nsguy 3y ago
    Yes. But really Indonesia has taken over from South Korea (and China and Mexico for some parts of the market). E.g. PRS used to make their SE line in South Korea and the quality was excellent. "Good guitar" is somewhat subjective. US brands like PRS, Gibson and Fender are still able to charge a premium for a US made instrument. This isn't necessarily because the US has some abilities that the foreign makers don't, it's more of a marketing strategy.
    - hasty_pudding 3y ago
      I thought it was because US had better quality controls and finer manufacturing specs.
mauvehaus 3y ago
If you're into machining, the American Precision Museum[0] in Windsor, VT is highly worth a visit. I had the good fortune to tour the Starrett factory some years back. They were still running pre-NC screw machines to make parts. It really is true that old machines, well cared for, will last just about forever. Apparently it's something of an axiom in the machining industry that tools that are no longer economically viable for large scale production end up in job shops where the capability is needed but there isn't a need to pump out volume. The Springfield Armory[1] is also a neat visit. For hopefully obvious reasons, their machining exhibits are focused on the production of weapons. The American Precision Museum is actually housed in a historic privately-owned gun factory. It turns out a lot of the progress in machining is driving by the need to make weapons. [0] https://americanprecision.org/ https://americanprecision.org/ [1] https://www.nps.gov/spar/index.htm https://www.nps.gov/spar/index.htm
- digitalsushi 3y ago
  If you go in late August and have a strong affinity for amateur astronomy, you can have one heck of a weekend by visiting Stellafane 10 miles south of there in Springfield VT. Probably an abuse of a comment but it's so rare to find two things to do so close together in that area.
- MisterTea 3y ago
  Visited when I was a kid it was fun seeing all the belt driven machinery that wasn't so different than my father's machine shop (job shopped manual and CNC milling and turning.) The 90s was when we saw the manufacturing downslide then my father got sick and passed. We kept it going but by the 2000's China was eating everyone's lunch. Though the fall of the Berlin wall killed a lot of aerospace work which was big business on Long Island. We sold the business in 2006 and somehow the guy who bought it is still in business though downsized and runs it himself now.
- drmpeg 3y ago
  I worked at my fathers machine shop (which was a subsidiary of New Britain Machine Company) a couple of summers when I was in high school in the mid 70's. It was quite an experience and the employees were some of the crustiest characters I've ever met. The second summer, I worked with this guy named Ray on a huge machine that made the heads to ratchet wrenches (the square part with the little ball). He was one of these guys that was continuously pissed off. A man's man probably only 35, but looked 45 and smoked Camel unfiltered cigarettes. But the thing I remember most about him was that he could swear for a minute straight and never use the same word twice. For example, he called the machine "The Afterbirth". I'll never forget that man.
karmasimida 3y ago
So it is the story of losing because of market competition? Doesn’t feel that surprising of an outcome
- bluGill 3y ago
  Not really. The story is management wasn't able to handle a downturn and so failed to come out of a recession.
psychlops 3y ago
> A strong dollar made imports even cheaper by comparison I think that summarizes the article. It has been cheaper to import, so we do. The strong dollar policy supports some industries at the expense of others.
- bluGill 3y ago
  I'd say MBAs driving for quarterly numbers were unable to manage the business cycle is a better summary.
  - edgyquant 3y ago
    That’s just corporate political shade throwing. Fiscal policy has, for a few generations now, incentivized trade deficits for foreign policy reasons. Overtime this results in offshoring of all industry.
  - missedthecue 3y ago
    This is as empty as saying trade unions caused it. Does Japan not have MBAs? It's all about comparative advantage.
    - bluGill 3y ago
      Apparently Japan's MBAs can manage for longer term. At least in this one industry.
    - badpun 3y ago
      From what I've heard, Japan has very different corporate culture, more focused on loyalty and social stability, than on maximizing profit. They can even keep unprofitable divisions of the company, because they don't want to fire people who work in them. Would be nice if someone with first-hand knowledge of Japanese corporate world could confirm/deny it.
  - maxglute 3y ago
    Article says machinist industry failed to lobby the same way as US steel. Not that US steel is doing healthy. But at some point it's the govs foresight / job to reign in MBAs via protectionism and industrial policy for strategic sectors. As other's have mentioned, JP has MBAs too. Maybe lesson is JP Gov listened to Zaibatsu/conglomerate lobbying power.
Joel_Mckay 3y ago
1. lack of stable production lines due to real-estate securitization and zoning. i.e. it is a huge liability to install something expensive likely to break if moved, and burning capital in a sucker lease. 2. lack of cheap 3-phase power in said zoning, and aging power infrastructure. EVs will likely make the problem worse. 3. lack of skilled labor due to career churn from outsourcing. i.e. it became a demand-deficient labor-force now reassigned to other careers. 4. Manufacturing domestically is strictly a niche industry, as consumers are cost sensitive, and value blind If you go to foundry districts in India, one will see many US machines that were sold for scrap still powering emerging economies. The mechanical equity of 60 year old machines are still supporting entire communities.
- barelyauser 3y ago
  Value blindness is the bane of my existence. Thin walled plastic everywhere. Things are difficult to clean because they are filled with grooves, because you need grooves and bends to make thin walled plastic stiffer. A very good criteria for quality and value is: how easy is it to clean? If it is hard then you probably are dealing with a low value disposable product. Consider porcelain, lasts forever, cleans beautifully and does not stain. Or spoons made with solid stainless steel. Spoons made with thin sheet steel often have bends and corners as to make the thin sheet stiffer. But then dirt accumulates on these corners.
  - Joel_Mckay 3y ago
    The cost of porcelain is similarly constrained by labor, energy cost, and space. I learned a lot from a domestic slip-casting company as a kid. It taught me big heavy things are not economical to ship, and thus remain locally competitive in a global market even when competitors are 100% subsidized. Amazon shifted this calculus a bit, but is still constrained by energy/fuel costs. The power of plastic is automated cycle times under 45 seconds, minimum infrastructure needs, and shipping weight. In a way, Tesla Giga Press technology leverages similar strategies for Aluminum parts.
    - sct202 3y ago
georgeplusplus 3y ago
We gave up the low intelligence blue collar manufacturing jobs so city dwellers can obtain highly specialized and skilled expensive college degrees to do important work on global problems in matter like, making and editing excel spreadsheets, writing emails, and sitting in on web meetings. I am writing this while drinking an 8$ caramel latte from Starbucks with a slice of avocado toast for 17.99$.
jillesvangurp 3y ago
> Constant pressure to hit quarterly performance targets meant that machine quality often suffered. In some cases, machines would be shipped out the door unfinished so the delivery could be booked, and assembly would be completed by service technicians at the customer’s location. In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century.” In short, the MBAs happened. Clueless management was brought in who then decimated anything they did not understand. I.e. everything. Aided by Reagan policy to aggressively outsource manufacturing from the nineteen eighties US manufacturing just imploded. Just speculating here, but by the time the Japanese and the Germans caught up and got really good at machine tools, the metric system would have become an obstacle as well. Because the US insisting to do everything in inches, foot pounds, and what not doesn't translate very well internationally when you start outsourcing all your manufacturing. Outsourcing meant manufacturing standardized on the metric system using equipment and parts not made in the US. Just speculating here, but I imagine that all that combined lead to a natural preference for non US based manufacturing companies that took over from US companies to not use any US made equipment or parts. So, manufacturing became predominantly metric based and that would have affected standard components, screws, bolts, parts, etc. All made by non US companies standardizing on all of that.
- cpursley 3y ago
  MBA thinking ruins everything it touches. Boeing is another example. It's all about short-term profits over long term sustainability.
  - lasermike026 3y ago
    Fire all the MBAs.
  - mobilio 3y ago
    also HP...
- 3y ago
11thEarlOfMar 3y ago
At some point, the technical advancement rate of markets tops out and other nations then can catch up. Ford ultimately gave way to Toyota. Westinghouse to Panasonic. The counter example is the semiconductor tool industry where the advancement of technical capability remains ahead of the rate other countries can catch up with them. Internal to the industry, the 'low-tech' machines are made by Japanese manufacturers: Track (TEL), Wet (Screen). US/Europe (AMAT, LRCX, KLAC, ASML, ASMI) remain dominant in that capital equipment market.
FrustratedMonky 3y ago
Read a great book on this in college in formative years. Made me pretty depressed about how management/markets can target false equilibrium points. Markets do not drive efficiency. At least not if chasing quarterly profits drives bad decisions. "When the machine stopped: A cautionary tale from industrial America" https://www.amazon.com/When-machine-stopped-cautionary-industrial/dp/0875842089 https://www.amazon.com/When-machine-stopped-cautionary-indus... Note: referenced in the OPs original article
- pinewurst 3y ago
  This is a great book - I still own my copy and occasionally reread it.
lkramer 3y ago
Why do I feel there is a parallel here to Boeing? (Maybe that was the motivation for the submission)
- jwagenet 3y ago
  > Constant pressure to hit quarterly performance targets meant that machine quality often suffered. […] “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century.” Probably the sentiment expressed by this excerpt. You can probably point to any example of former US expertise and make a similar statement.
- happyjack 3y ago
  When the Clinton administration forced the downsizing of the military industrial complex (https://www.nationaldefensemagazine.org/articles/2015/12/2/former-secdef-perry-defense-industry-consolidation-has-turned-out-badly https://www.nationaldefensemagazine.org/articles/2015/12/2/f...), the USA lost all competition in the larger than regional aircraft. To compete with Airbus (subsidized by the EU), Boeing turned from manufacturing their own airplanes (and using suppliers in America) to assembling planes in Washington and forcing procurement of their products internationally through contracted parts. (https://d3.harvard.edu/platform-rctom/submission/its-complicated-the-global-relationship-between-boeing-its-customers-and-its-supply-chain/ https://d3.harvard.edu/platform-rctom/submission/its-complic...). Nippon airways would buy x number of 737s, etc. as long as they were making the brakes. Hell, even Airbus assembles in the USA now to force procurement in America.
  - fransje26 3y ago
    > To compete with Airbus (subsidized by the EU), Boeing turned from manufacturing their own airplanes (and using suppliers in America) to assembling planes in Washington and forcing procurement of their products internationally through contracted parts. Yes, this is one of the more common alternative fact on what happened to Boeing. Going beyond the nonsensical take of the evil subsidized foreign company unfairly competing against the hardworking non-subsidized domestic aircraft builder, as various independent pundits have reported in the light of recent events, Boeing's woes are mostly self-inflicted, starting even before the infamous MD takeover. But it's true that it is more flattering to paint yourself as the victim of unfair globalization as opposed to acknowledging that the ruthless search of short-term gains came at the cost of product quality and passengers lives.
ThaDood 3y ago
So from what I can tell, a lot of boils down to the same reasons most of America/US manufacturing declined. Globilzation, greed and other factors. This article really hits home for me. I grew up in Cincinnati and it was a tool making powerhouse back in the day. Cincinnati Tool, now Milacron and many others were made here in town. We still have a few nice tool makers in Ohio - Kett and Wright but its sad to read about how much this industry powered the nation and a lot of its innovation. Going to our museum center, hell even our Airport has a bunch of exhibits that take about all of the tool making and industry we used to have. Makes me sad really.
eunos 3y ago
Also US more or less export controlled CNC to China, boosting German, Japanese and even Taiwanese machine tool industry massively since China bought many from them.
bane 3y ago
I grew up in a family printing business. Printing is a manufacturing industry just like anything else, with equipment of various sorts at every step of the production chain. Even in the 80s, when the business was going strong, most of the equipment we used was from Germany or Japan. Sure there were a few odds and ends made in America, things like X-Acto knives, or wax melting machines or something. Paper, ink, and a few other chemicals used for various parts of the production processed were usually sourced from the U.S. or Canada IIR. But the presses, big cutting and binding machines? Every single one was from overseas: Heidelberg, Hamada, Ryobi, others. It was simply impossible to get machines of the quality and precision from the U.S. This often meant multi-week downtimes for aging machines that needed parts replaced or repaired, waiting for a single roller or a latch or something while it was shipped from the home country. As things moved more and more digital, the front-end equipment likewise became more and more foreign made. In my lifetime, the U.S. never owned the entire vertical supply and manufacturing chain in that industry. I'm not sure if it ever did.
- deleted 3y ago
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- Kosirich 3y ago
  I grew up with a father who is/was an owner and director of a company that produces manufacturing printing rollers (gravure printing), mostly for packaging industry. He always competed against others on quality and flexibility as he couldn't on size, so having the best kit was important. The technology, even though the product is a discardable piece of packaging, is on NASA/CPU manufacturing level. Even though, I myself was never involved directly in it, nor am I today, I know from him there were several trends: 1) Printing companies in Europe and elsewhere got bigger. What use to be 10 printing companies, now it's 1. 2) Equipment manufacturers for that industry got bigger. What use to be 4,5 equipment manufacturers in EU/USA, now there is one. 3) Lasers. Lasers got to a level where they can compete and surpass mechanical removal on quality and speed. This is true also for industry I'm in.
toss1 3y ago
First thought, being in the aerospace advanced composites field and using machine tools: "MBAs" Aaaand, the money quote: " In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century.” " MBAs & financial "leadership" have basically optimized American excellence, leadership, and its middle class out of existence, and putting the world's democracies in jeopardy. They benefitted greatly by privatizing and optimizing profits into their pockets, but at the cost of nearly breaking the society onto whom they externalized the costs.
jschveibinz 3y ago
The world is flat. India has ~1.5 billion people and is growing. We need enough precision machine tooling and production capacity for self defense. But world competition is inevitable, and arguably better for the US economy. Our value proposition needs to be something greater than that of other countries. And that's where the economy and employment will thrive and thus support other service sectors.
- hasty_pudding 3y ago
  How will the US economy thrive by outsourcing all the jobs to the billions of people in India? Sounds like the rich are the only ones who will thrive in this scenario. It will absolutely devastate American workers.
shove 3y ago
This Old Tony is out there doing the very best he can
supernova87a 3y ago
Maybe I missed a point in the article, but I feel a broader shift that produced this situation is simply that the US is no longer building huge numbers of new factories and industrial processes that need lots of new machine tools. We have left that phase of our country's development behind. We have relatively piecemeal demand for such tools, aside from the random new Tesla factory. And that kind of growth is what spurs development and maintenance of these kinds of supporting industries. As a country, you fall out of the practice of building stuff, and the talent or ecosystem of it migrates away. Look at railroad building. In China, they have entire industries of people building the tools for building railroads. They can call up 100 experts on design just for EV battery building machine tools and factory processes. Here you're lucky if you can find that many experts on any machine tool topic across all the contractor companies that have had to consolidate to make keeping this kind of talent sustainable. We just don't have this deep practiced industry knowledge in general across many businesses any more. And aside from some specialized centers (NASA, NIST, national labs) that doesn't exist much in the government either. We've outsourced it. Maybe it's a natural evolution of a country. Maybe the tide can be turned with strategic investment, I don't know.
- mastax 3y ago
  The last line in the article argues against this: > The US is still a major purchaser of machine tools (2nd in the world behind China), but unlike for most of the 20th century, today its factories are full of machines made elsewhere.
WillAdams 3y ago
For folks who are curious about Haas, this blog-post on buying one may be of interest: https://carbide3d.com/blog/how-to-buy-a-haas/ https://carbide3d.com/blog/how-to-buy-a-haas/
aaron695 3y ago
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steve76 3y ago
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machomaster 3y ago
I wonder how much of the loss of the American competiveness was caused by the SI-incompatible Imperial system (buying, selling, using)?
fwlr 3y ago
“Historically, machine tool companies were small operations run by people (often descendants of the original founders) who had spent their whole life in the machine tool industry and knew it inside and out. Because of the cyclical nature of the industry, machine tool firms tended to be managed conservatively, and they operated with little debt. … [In] the 1960s, machine tool companies began to be acquired by the latest fashion in US business, the conglomerate: enormous, diversified companies that seemed to make anything and everything as long as there was profit in it. The machine tool industry was on a sales upswing … [and] machine tool firms' high profitability (and low debts) made them attractive acquisitions for the conglomerates. … “Though the conglomerates enjoyed owning machine tool firms in the boom times when profits were high, they quickly became disillusioned during the lean periods when new orders slowed to a trickle. The new owners’ focus on profits meant that they were reluctant to make the long-term investments in R&D or new equipment needed… Conglomerates were often quick to divest their machine tool holdings when the companies began to struggle, resulting in frequent management changes and organizational whiplash… “In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century”.” Bingo. The article points to cycles of high variance in demand for machine tools. Other commenters have pointed the dominance of foreign companies (eg Japan due to their national standardisation on FANUC), globalization and “more cost-effective to import” more generally, and also suggested America is in a “post-machining” stage of manufacturing. I think all of these claims have merit, but the real underlying cause is most certainly the humble MBA. To wit: they bought themselves into a cyclic industry, replaced the survivor-mindset management, and effectively took these resilient existing businesses and crystallized them into brittle conglomerates while the industry was on the rise of one such cycle, and when they where wholly unprepared for the inevitable down stage of the cycle, they divested, leaving a wasteland behind.
- georgeecollins 3y ago
  MBAs and financially driven management are why the US is such a poor country today. If the US was run like Japan or Germany we would be the wealthiest nation on Earth. First this short shortsightedness cost us the brick industry, then steel, and now machine tools. My children are doomed to be burger flippers due to MBAs.
29athrowaway 3y ago
https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
black_13 3y ago
[dead]

230 points by jseliger 3y ago

Right, it seems the U.S. economy is trying to say, "making elementary machine tools is beneath us." The important bit is at the end: the U.S. is still a top buyer of machine tools (made elsewhere). Is the same thing to happen with software? When it becomes worth the time of the U.S. economy to produce basic machine tools again, they'll get to create new machine tools factories using all the latest technology: so it is probably good thing the "old way" is not still around hanging on by a thread. The market naturally is culling technical debt.

toasterlovin 3y ago
Right. The US economy was well poised to tackle the massive task of computerizing humanity and, being a nascent technology stack with green field opportunities abounding, it was more profitable than continuing to produce machine tools. Meanwhile the Pax Americana has eliminated the risk premium to manufacturing overseas, so our entire economy has reconfigured itself around this task and opportunity of computerizing humanity. To our massive benefit, I think. IMO this is the main driver between diverging American incomes compared to the rest of the developed world.
- dragontamer 3y ago
  As long as those manufacturing centers are part of US allies (Japan, Korea, Europe, Australia, Taiwan), or at least trustworthy neutrals (Vietnam, India), I'm happy. But some manufacturing, in fact a large amount, is Chinese. And I'm not convinced they've got our best interests at heart. Either China needs to calm down over their "Wolf Warrior" style, or we need to cut back on providing benefits to an obviously and increasingly antagonistic power. --------- The other part, with respect to Taiwan + China, is that we must defend Taiwan as they are a critical source of advanced-materials (ie: computer chips) to us. Yes, its more efficient to have Taiwan centralize production, but it does come at a cost. We need to be ready to defend Taiwan and keep it safe if we are to continue to build computers and phones out of Taiwan-only parts.
- poncho_romero 3y ago
  The entire economy is configured around making quarterly profits for shareholders. Any good that happens to come out for humanity is purely incidental. The US economy is not some fairytale hero.
MajimasEyepatch 3y ago
> Is the same thing to happen with software? Offshoring in software development has been around for a very long time. Most large US companies have a mix of onshore and offshore devs. The more mundane the software, and the tighter the financial macro-environment, the more the ratio shifts toward offshoring. This is the way the offshoring cycle has worked for a long time. However, unlike hardware, software is about information and communication, and cultural context is very important. I have seen firsthand that non-US teams building software for US consumers often don't quite understand the reasoning behind the requirements and may lack polish around basic things like English. (The same is true, of course, in reverse, if US teams build for non-US audiences.) So I think it should be a little bit stickier. You also cannot copy software design in the same way that you can copy, say, the design of a lathe. A lathe is a lathe, and as long as you've got the tools and materials, a lathe made in the US should not in theory be any different than one built in China. The same is not true of software.
- dukeyukey 3y ago
  > I have seen firsthand that non-US teams building software for US consumers often don't quite understand the reasoning behind the requirements and may lack polish around basic things like English Something I'm curious about, have you seen this happen with countries culturally close to the US? Like teams based in Canada, Ireland, or the UK?
  - WJW 3y ago
    One of the biggest lies in cultural thinking is that countries like Ireland and the UK are "culturally close" to the USA. Sure they are close-er than say Italy or Japan, but anyone who thinks "close" means "similar enough that it doesn't matter" is in for a rude awakening. In reality there are incredibly large gaps around even the most basic things like the meaning of words. As a very basic example: the meaning of the word "interesting" differs radically between cultures. Most US employees would think the boss is indeed interested when they describe an idea as "interesting" and may even bring it up again at some later date after more research. Meanwhile, someone from the UK means that it's the dumbest thing they've ever heard and they will be incredibly miffed if it is ever brought up again.
michaelt 3y ago
> Is the same thing to happen with software? I have a theory that one of the major challenges facing manufacturing in the US is actually the opposite. A manufacturing company in the US is competing for smart, numerate STEM graduates with the likes of Google who offer graduates $180,000 with zero experience (or so I'm told) But they're also competing with manufacturers in the far east, where $40,000 is a great salary, for someone with several years of experience. Difficult to win both competitions.
- poncho_romero 3y ago
  I think that’s right, and I think there’s a third aspect at play, which is that culturally the US doesn’t value jobs in manufacturing, machining, engineering, etc. as highly as it once did (after WW2, say) or as highly as it values finance and tech jobs today. I’m not sure how easily that could change.
rsync 3y ago
"Right, it seems the U.S. economy is trying to say, "making elementary machine tools is beneath us."" Hopefully policy makers and the citizenry will resist following what, as you say, the US economy is trying to say. You see ... You can stop making elementary machine tools. You will never stop making (people who can only make elementary machine tools).
deleted 3y ago
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poncho_romero 3y ago
Will “all the latest technology” be available? The expertise the US once had in this area is largely gone, and won’t come back immediately. I think there’s real reasons to be concerned that the US will fall behind countries like China in areas like innovation because of this self-inflicted brain drain.
- ddingus 3y ago
  Right now there are mandates to build out the manufacturing base needed for military efforts. They know the tech sent off shore will, for the most part, remain off shore. Additive manufacturing, an example of "latest tech", is a primary build up target here. It is new and expertise is being created as the tech itself is.
  - mitthrowaway2 3y ago
    Additive manufacturing doesn't help much if you want to build Liberty ship volumes, or roller-bearing tolerances, unfortunately.
    - ddingus 3y ago
      Indeed. HYBRID DED is going to be the answer to many of those scenarios. Basically, we couple subtractive with additive and maximize the benefits of both. Done right the risks are greatly reduced as are costs compared to just doing it the legacy way.

aj7 3y ago

People who understand this industry can answer in a single word. Fanuc. And when Fanuc realized that only GE was capable of competing with it in the computer controls needed to run machine tools (and wasn’t doing shit, another Welchism), it cleverly bought off GE by giving it the U.S. franchise for Fanuc, at least until the GE stink began to be undesirable.

grow2grow 3y ago
Yes, no surprise that a standard won the battle, over several competing choices. That seems to happen a lot.
- droopyEyelids 3y ago
  Sort of a tautology, right? The winner of the competition becomes the standard.
  - helpfulContrib 3y ago
    [dead]

boringuser2 3y ago

[flagged]

pixl97 3y ago
> The new owners’ focus on profits meant... Pretty much the answer in one sentence.
- hnthrowaway0328 3y ago
  short/mid term profits
jjoonathan 3y ago
Book recommendation: "Trade Wars are Class Wars" by Michael Pettis. If you don't buy the apologetics that permeate the popular economics sphere but still want an expert to walk you through the details, this is your book.
- boringuser2 3y ago
  Sounds like commie gobbledygook. (RIP Norm MacDonald, the thinking mans comedian!)
  - jjoonathan 3y ago
    It's basic macro. Assets, exports, capital accounts, current accounts, savings, investment. Essentially, windfall surplus in one area causes savings bubbles causes investment bubbles causes asset pumps and export dumps, usually in a different area. He cites a bunch of historical examples and then goes step by step through techniques for identifying sources/sinks and directionality. Oh, and did you know that Ricardo based his analysis on the assumption of a closed capital account? It's interesting how the theory of comparative advantage usually gets invoked without mentioning that ;) If you dogmatically reject the idea that political economy could possibly involve the concept of class, I'd love to hear how your analysis clusters the interests involved. In any case, he's not a CCP shill. He throws some mean punches in that direction with facts and figures to back them up. Everyone hustles in the world economy.

nofunsir 3y ago

I was binge watching TechFreeze[1] on youtube just yesterday! [1] https://www.youtube.com/watch?v=jOnxOTdx_ps https://www.youtube.com/watch?v=jOnxOTdx_ps

lstodd 3y ago
Industrial JP is very good also https://www.youtube.com/watch?v=5QjVeH2Z57E https://www.youtube.com/watch?v=5QjVeH2Z57E

ChumpGPT 3y ago

[flagged]

cpursley 3y ago
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- pinewurst 3y ago
  [flagged]
- PeterisP 3y ago
  The equivalency would be if there were weapons of e.g. some Iranian company sold to Israel and used against Gaza. As a US company, Haas has a duty to obey US-ordered sanctions and ensure that their products are not being used against the interests of USA, but it has no duty to ensure that their products are not used against interests of Gaza.
  - cpursley 3y ago
    This I totally agree with (US companies should abide by US law). It's the moralizing that gets under my skin.
serf 3y ago
>The company is morally corrupt. haas has been morally corrupt for some time. they're essentially the 'john deere' of machining, they sell under-performing over-priced crap that only they can sell parts for or maintain, which is convenient for them because they produce machines that have some of the highest downtime in the entire industry due to lack of repair facilities/parts/availability as well as overwhelming small quality control problems.

jd3 3y ago

https://www.youtube.com/watch?v=QU6nsfoNWDI https://www.youtube.com/watch?v=QU6nsfoNWDI for a trip down memory lane (and coincidentally, an apt example of how far we've fallen). Can you think of a single modern US-based industry/association which produces educational, instructional, and/or historical videos like this one anymore?

Animats 3y ago
Yes.[1] And, after 10,000 hours of apprenticeship, you can make as much as $50,000 to $100,000 a year as a tool and die maker! I have some entry-level skills at that sort of thing, from my TechShop days. There's a lot of stuff to learn and you have to do a lot of it to get good. [1] https://www.youtube.com/watch?v=l-7ivFEAzw8 https://www.youtube.com/watch?v=l-7ivFEAzw8

cantrevealname 3y ago

> Consider a company that manufactures its product on lathes. Assume that it has ten lathes that can just meet production requirements. Assume also that each lathe wears out in ten years and that the company has its investment plans so well organized that one lathe is replaced every year. Now consider what will happen if there is a 10 percent increase in demand for the product. The plant will need eleven lathes to meet production requirements. It will have to buy two lathes: one as a replacement for the worn-out lathe and a second to increase capacity. Thus a 10 percent increase in the demand for the product has produced a 100 percent increase in the demand for lathes. The 100% increase doesn't seem to make sense in this example.

MajimasEyepatch 3y ago
It's a 100% increase (i.e. double) relative to what the ordinary demand for lathes would have been.
- Retric 3y ago
  The universe isn’t quite that binary. Suppose those lathes ware out 0.1% faster than expected lasting ~3 days less than 10 years, now eventually you replace 2 of them in the same year thus doubling demand in that year… Except the manufacture wouldn’t notice a spike from occasionally sending out a few days earlier even if it’s crossing a calendar year.
  - bluGill 3y ago
    a lathe doesn't wear out that way. It just slowly gets harder and harder to maintain tolerance. Eventually a new machine will be enough better as to make an experienced machinist take less time - they always have to stop and measure as no lathe can give you absolute accuracy, but when the lathe is new it is more predictable how much turning a handle will change things and so you measure before the last operation and adjust it to the right setting vs you measure get closer and measure again.
    - 3y ago

1nd1ansumm3r 3y ago

What was considered high-end precision machining a few decades ago is now standard and easily reproducible in cheap labor markets. For example, guitars made in SKorea used to be a bad joke. Their machining tolerances were too big and too inconsistent. Much like storage and bandwidth what used to be exotic cost-prohibitive is now cheap.

hasty_pudding 3y ago
> guitars made in SKorea used to be a bad joke Are they now considered good guitars??
- nsguy 3y ago
  Yes. But really Indonesia has taken over from South Korea (and China and Mexico for some parts of the market). E.g. PRS used to make their SE line in South Korea and the quality was excellent. "Good guitar" is somewhat subjective. US brands like PRS, Gibson and Fender are still able to charge a premium for a US made instrument. This isn't necessarily because the US has some abilities that the foreign makers don't, it's more of a marketing strategy.
  - hasty_pudding 3y ago
    I thought it was because US had better quality controls and finer manufacturing specs.

mauvehaus 3y ago

If you're into machining, the American Precision Museum[0] in Windsor, VT is highly worth a visit. I had the good fortune to tour the Starrett factory some years back. They were still running pre-NC screw machines to make parts. It really is true that old machines, well cared for, will last just about forever. Apparently it's something of an axiom in the machining industry that tools that are no longer economically viable for large scale production end up in job shops where the capability is needed but there isn't a need to pump out volume. The Springfield Armory[1] is also a neat visit. For hopefully obvious reasons, their machining exhibits are focused on the production of weapons. The American Precision Museum is actually housed in a historic privately-owned gun factory. It turns out a lot of the progress in machining is driving by the need to make weapons. [0] https://americanprecision.org/ https://americanprecision.org/ [1] https://www.nps.gov/spar/index.htm https://www.nps.gov/spar/index.htm

digitalsushi 3y ago
If you go in late August and have a strong affinity for amateur astronomy, you can have one heck of a weekend by visiting Stellafane 10 miles south of there in Springfield VT. Probably an abuse of a comment but it's so rare to find two things to do so close together in that area.
MisterTea 3y ago
Visited when I was a kid it was fun seeing all the belt driven machinery that wasn't so different than my father's machine shop (job shopped manual and CNC milling and turning.) The 90s was when we saw the manufacturing downslide then my father got sick and passed. We kept it going but by the 2000's China was eating everyone's lunch. Though the fall of the Berlin wall killed a lot of aerospace work which was big business on Long Island. We sold the business in 2006 and somehow the guy who bought it is still in business though downsized and runs it himself now.
drmpeg 3y ago
I worked at my fathers machine shop (which was a subsidiary of New Britain Machine Company) a couple of summers when I was in high school in the mid 70's. It was quite an experience and the employees were some of the crustiest characters I've ever met. The second summer, I worked with this guy named Ray on a huge machine that made the heads to ratchet wrenches (the square part with the little ball). He was one of these guys that was continuously pissed off. A man's man probably only 35, but looked 45 and smoked Camel unfiltered cigarettes. But the thing I remember most about him was that he could swear for a minute straight and never use the same word twice. For example, he called the machine "The Afterbirth". I'll never forget that man.

karmasimida 3y ago

So it is the story of losing because of market competition? Doesn’t feel that surprising of an outcome

bluGill 3y ago
Not really. The story is management wasn't able to handle a downturn and so failed to come out of a recession.

psychlops 3y ago

> A strong dollar made imports even cheaper by comparison I think that summarizes the article. It has been cheaper to import, so we do. The strong dollar policy supports some industries at the expense of others.

bluGill 3y ago
I'd say MBAs driving for quarterly numbers were unable to manage the business cycle is a better summary.
- edgyquant 3y ago
  That’s just corporate political shade throwing. Fiscal policy has, for a few generations now, incentivized trade deficits for foreign policy reasons. Overtime this results in offshoring of all industry.
- missedthecue 3y ago
  This is as empty as saying trade unions caused it. Does Japan not have MBAs? It's all about comparative advantage.
  - bluGill 3y ago
    Apparently Japan's MBAs can manage for longer term. At least in this one industry.
  - badpun 3y ago
    From what I've heard, Japan has very different corporate culture, more focused on loyalty and social stability, than on maximizing profit. They can even keep unprofitable divisions of the company, because they don't want to fire people who work in them. Would be nice if someone with first-hand knowledge of Japanese corporate world could confirm/deny it.
- maxglute 3y ago
  Article says machinist industry failed to lobby the same way as US steel. Not that US steel is doing healthy. But at some point it's the govs foresight / job to reign in MBAs via protectionism and industrial policy for strategic sectors. As other's have mentioned, JP has MBAs too. Maybe lesson is JP Gov listened to Zaibatsu/conglomerate lobbying power.

Joel_Mckay 3y ago

1. lack of stable production lines due to real-estate securitization and zoning. i.e. it is a huge liability to install something expensive likely to break if moved, and burning capital in a sucker lease. 2. lack of cheap 3-phase power in said zoning, and aging power infrastructure. EVs will likely make the problem worse. 3. lack of skilled labor due to career churn from outsourcing. i.e. it became a demand-deficient labor-force now reassigned to other careers. 4. Manufacturing domestically is strictly a niche industry, as consumers are cost sensitive, and value blind If you go to foundry districts in India, one will see many US machines that were sold for scrap still powering emerging economies. The mechanical equity of 60 year old machines are still supporting entire communities.

barelyauser 3y ago
Value blindness is the bane of my existence. Thin walled plastic everywhere. Things are difficult to clean because they are filled with grooves, because you need grooves and bends to make thin walled plastic stiffer. A very good criteria for quality and value is: how easy is it to clean? If it is hard then you probably are dealing with a low value disposable product. Consider porcelain, lasts forever, cleans beautifully and does not stain. Or spoons made with solid stainless steel. Spoons made with thin sheet steel often have bends and corners as to make the thin sheet stiffer. But then dirt accumulates on these corners.
- Joel_Mckay 3y ago
  The cost of porcelain is similarly constrained by labor, energy cost, and space. I learned a lot from a domestic slip-casting company as a kid. It taught me big heavy things are not economical to ship, and thus remain locally competitive in a global market even when competitors are 100% subsidized. Amazon shifted this calculus a bit, but is still constrained by energy/fuel costs. The power of plastic is automated cycle times under 45 seconds, minimum infrastructure needs, and shipping weight. In a way, Tesla Giga Press technology leverages similar strategies for Aluminum parts.
  - sct202 3y ago

georgeplusplus 3y ago

We gave up the low intelligence blue collar manufacturing jobs so city dwellers can obtain highly specialized and skilled expensive college degrees to do important work on global problems in matter like, making and editing excel spreadsheets, writing emails, and sitting in on web meetings. I am writing this while drinking an 8$ caramel latte from Starbucks with a slice of avocado toast for 17.99$.

jillesvangurp 3y ago

> Constant pressure to hit quarterly performance targets meant that machine quality often suffered. In some cases, machines would be shipped out the door unfinished so the delivery could be booked, and assembly would be completed by service technicians at the customer’s location. In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century.” In short, the MBAs happened. Clueless management was brought in who then decimated anything they did not understand. I.e. everything. Aided by Reagan policy to aggressively outsource manufacturing from the nineteen eighties US manufacturing just imploded. Just speculating here, but by the time the Japanese and the Germans caught up and got really good at machine tools, the metric system would have become an obstacle as well. Because the US insisting to do everything in inches, foot pounds, and what not doesn't translate very well internationally when you start outsourcing all your manufacturing. Outsourcing meant manufacturing standardized on the metric system using equipment and parts not made in the US. Just speculating here, but I imagine that all that combined lead to a natural preference for non US based manufacturing companies that took over from US companies to not use any US made equipment or parts. So, manufacturing became predominantly metric based and that would have affected standard components, screws, bolts, parts, etc. All made by non US companies standardizing on all of that.

cpursley 3y ago
MBA thinking ruins everything it touches. Boeing is another example. It's all about short-term profits over long term sustainability.
- lasermike026 3y ago
  Fire all the MBAs.
- mobilio 3y ago
  also HP...
3y ago

11thEarlOfMar 3y ago

At some point, the technical advancement rate of markets tops out and other nations then can catch up. Ford ultimately gave way to Toyota. Westinghouse to Panasonic. The counter example is the semiconductor tool industry where the advancement of technical capability remains ahead of the rate other countries can catch up with them. Internal to the industry, the 'low-tech' machines are made by Japanese manufacturers: Track (TEL), Wet (Screen). US/Europe (AMAT, LRCX, KLAC, ASML, ASMI) remain dominant in that capital equipment market.

FrustratedMonky 3y ago

Read a great book on this in college in formative years. Made me pretty depressed about how management/markets can target false equilibrium points. Markets do not drive efficiency. At least not if chasing quarterly profits drives bad decisions. "When the machine stopped: A cautionary tale from industrial America" https://www.amazon.com/When-machine-stopped-cautionary-industrial/dp/0875842089 https://www.amazon.com/When-machine-stopped-cautionary-indus... Note: referenced in the OPs original article

pinewurst 3y ago
This is a great book - I still own my copy and occasionally reread it.

lkramer 3y ago

Why do I feel there is a parallel here to Boeing? (Maybe that was the motivation for the submission)

jwagenet 3y ago
> Constant pressure to hit quarterly performance targets meant that machine quality often suffered. […] “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century.” Probably the sentiment expressed by this excerpt. You can probably point to any example of former US expertise and make a similar statement.
happyjack 3y ago
When the Clinton administration forced the downsizing of the military industrial complex (https://www.nationaldefensemagazine.org/articles/2015/12/2/former-secdef-perry-defense-industry-consolidation-has-turned-out-badly https://www.nationaldefensemagazine.org/articles/2015/12/2/f...), the USA lost all competition in the larger than regional aircraft. To compete with Airbus (subsidized by the EU), Boeing turned from manufacturing their own airplanes (and using suppliers in America) to assembling planes in Washington and forcing procurement of their products internationally through contracted parts. (https://d3.harvard.edu/platform-rctom/submission/its-complicated-the-global-relationship-between-boeing-its-customers-and-its-supply-chain/ https://d3.harvard.edu/platform-rctom/submission/its-complic...). Nippon airways would buy x number of 737s, etc. as long as they were making the brakes. Hell, even Airbus assembles in the USA now to force procurement in America.
- fransje26 3y ago
  > To compete with Airbus (subsidized by the EU), Boeing turned from manufacturing their own airplanes (and using suppliers in America) to assembling planes in Washington and forcing procurement of their products internationally through contracted parts. Yes, this is one of the more common alternative fact on what happened to Boeing. Going beyond the nonsensical take of the evil subsidized foreign company unfairly competing against the hardworking non-subsidized domestic aircraft builder, as various independent pundits have reported in the light of recent events, Boeing's woes are mostly self-inflicted, starting even before the infamous MD takeover. But it's true that it is more flattering to paint yourself as the victim of unfair globalization as opposed to acknowledging that the ruthless search of short-term gains came at the cost of product quality and passengers lives.

ThaDood 3y ago

So from what I can tell, a lot of boils down to the same reasons most of America/US manufacturing declined. Globilzation, greed and other factors. This article really hits home for me. I grew up in Cincinnati and it was a tool making powerhouse back in the day. Cincinnati Tool, now Milacron and many others were made here in town. We still have a few nice tool makers in Ohio - Kett and Wright but its sad to read about how much this industry powered the nation and a lot of its innovation. Going to our museum center, hell even our Airport has a bunch of exhibits that take about all of the tool making and industry we used to have. Makes me sad really.

eunos 3y ago

Also US more or less export controlled CNC to China, boosting German, Japanese and even Taiwanese machine tool industry massively since China bought many from them.

bane 3y ago

I grew up in a family printing business. Printing is a manufacturing industry just like anything else, with equipment of various sorts at every step of the production chain. Even in the 80s, when the business was going strong, most of the equipment we used was from Germany or Japan. Sure there were a few odds and ends made in America, things like X-Acto knives, or wax melting machines or something. Paper, ink, and a few other chemicals used for various parts of the production processed were usually sourced from the U.S. or Canada IIR. But the presses, big cutting and binding machines? Every single one was from overseas: Heidelberg, Hamada, Ryobi, others. It was simply impossible to get machines of the quality and precision from the U.S. This often meant multi-week downtimes for aging machines that needed parts replaced or repaired, waiting for a single roller or a latch or something while it was shipped from the home country. As things moved more and more digital, the front-end equipment likewise became more and more foreign made. In my lifetime, the U.S. never owned the entire vertical supply and manufacturing chain in that industry. I'm not sure if it ever did.

deleted 3y ago
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Kosirich 3y ago
I grew up with a father who is/was an owner and director of a company that produces manufacturing printing rollers (gravure printing), mostly for packaging industry. He always competed against others on quality and flexibility as he couldn't on size, so having the best kit was important. The technology, even though the product is a discardable piece of packaging, is on NASA/CPU manufacturing level. Even though, I myself was never involved directly in it, nor am I today, I know from him there were several trends: 1) Printing companies in Europe and elsewhere got bigger. What use to be 10 printing companies, now it's 1. 2) Equipment manufacturers for that industry got bigger. What use to be 4,5 equipment manufacturers in EU/USA, now there is one. 3) Lasers. Lasers got to a level where they can compete and surpass mechanical removal on quality and speed. This is true also for industry I'm in.

toss1 3y ago

First thought, being in the aerospace advanced composites field and using machine tools: "MBAs" Aaaand, the money quote: " In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century.” " MBAs & financial "leadership" have basically optimized American excellence, leadership, and its middle class out of existence, and putting the world's democracies in jeopardy. They benefitted greatly by privatizing and optimizing profits into their pockets, but at the cost of nearly breaking the society onto whom they externalized the costs.

jschveibinz 3y ago

The world is flat. India has ~1.5 billion people and is growing. We need enough precision machine tooling and production capacity for self defense. But world competition is inevitable, and arguably better for the US economy. Our value proposition needs to be something greater than that of other countries. And that's where the economy and employment will thrive and thus support other service sectors.

hasty_pudding 3y ago
How will the US economy thrive by outsourcing all the jobs to the billions of people in India? Sounds like the rich are the only ones who will thrive in this scenario. It will absolutely devastate American workers.

shove 3y ago

This Old Tony is out there doing the very best he can

supernova87a 3y ago

Maybe I missed a point in the article, but I feel a broader shift that produced this situation is simply that the US is no longer building huge numbers of new factories and industrial processes that need lots of new machine tools. We have left that phase of our country's development behind. We have relatively piecemeal demand for such tools, aside from the random new Tesla factory. And that kind of growth is what spurs development and maintenance of these kinds of supporting industries. As a country, you fall out of the practice of building stuff, and the talent or ecosystem of it migrates away. Look at railroad building. In China, they have entire industries of people building the tools for building railroads. They can call up 100 experts on design just for EV battery building machine tools and factory processes. Here you're lucky if you can find that many experts on any machine tool topic across all the contractor companies that have had to consolidate to make keeping this kind of talent sustainable. We just don't have this deep practiced industry knowledge in general across many businesses any more. And aside from some specialized centers (NASA, NIST, national labs) that doesn't exist much in the government either. We've outsourced it. Maybe it's a natural evolution of a country. Maybe the tide can be turned with strategic investment, I don't know.

mastax 3y ago
The last line in the article argues against this: > The US is still a major purchaser of machine tools (2nd in the world behind China), but unlike for most of the 20th century, today its factories are full of machines made elsewhere.

WillAdams 3y ago

For folks who are curious about Haas, this blog-post on buying one may be of interest: https://carbide3d.com/blog/how-to-buy-a-haas/ https://carbide3d.com/blog/how-to-buy-a-haas/

aaron695 3y ago

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steve76 3y ago

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machomaster 3y ago

I wonder how much of the loss of the American competiveness was caused by the SI-incompatible Imperial system (buying, selling, using)?

fwlr 3y ago

“Historically, machine tool companies were small operations run by people (often descendants of the original founders) who had spent their whole life in the machine tool industry and knew it inside and out. Because of the cyclical nature of the industry, machine tool firms tended to be managed conservatively, and they operated with little debt. … [In] the 1960s, machine tool companies began to be acquired by the latest fashion in US business, the conglomerate: enormous, diversified companies that seemed to make anything and everything as long as there was profit in it. The machine tool industry was on a sales upswing … [and] machine tool firms' high profitability (and low debts) made them attractive acquisitions for the conglomerates. … “Though the conglomerates enjoyed owning machine tool firms in the boom times when profits were high, they quickly became disillusioned during the lean periods when new orders slowed to a trickle. The new owners’ focus on profits meant that they were reluctant to make the long-term investments in R&D or new equipment needed… Conglomerates were often quick to divest their machine tool holdings when the companies began to struggle, resulting in frequent management changes and organizational whiplash… “In his history of the American machine tool industry, Albert Albrecht states that “the actions of these larger corporations and conglomerates, under the leadership of financial MBA’s, perhaps more than any other factor, contributed to the restructuring and decline of the US machine tool industry at the end of the 20th century”.” Bingo. The article points to cycles of high variance in demand for machine tools. Other commenters have pointed the dominance of foreign companies (eg Japan due to their national standardisation on FANUC), globalization and “more cost-effective to import” more generally, and also suggested America is in a “post-machining” stage of manufacturing. I think all of these claims have merit, but the real underlying cause is most certainly the humble MBA. To wit: they bought themselves into a cyclic industry, replaced the survivor-mindset management, and effectively took these resilient existing businesses and crystallized them into brittle conglomerates while the industry was on the rise of one such cycle, and when they where wholly unprepared for the inevitable down stage of the cycle, they divested, leaving a wasteland behind.

georgeecollins 3y ago
MBAs and financially driven management are why the US is such a poor country today. If the US was run like Japan or Germany we would be the wealthiest nation on Earth. First this short shortsightedness cost us the brick industry, then steel, and now machine tools. My children are doomed to be burger flippers due to MBAs.

29athrowaway 3y ago

https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/

black_13 3y ago

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