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What happened to the US machine tool industry?

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Re: What happened to the US machine tool industry?

#71

Post by extrapickles »

KevinMS wrote: post #57
cantrevealname wrote: post #9

> 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 me…

Do lathes actually wear out? Machine tools are built like tanks and could probably last until the end of time, you just need to replace the bearings and motors occasionally.

The lathe ways (the guides/support for each axis) do wear out, but you can re-grind them to be flat again.

Usually you sell the machine at this point to someone who doesn’t need the precision and get a new machine.

Re: What happened to the US machine tool industry?

#72

Post by prettychill »

specialist wrote: post #45
edgyquant wrote: post #24

Earlier quoted context omitted.

This is the answer to all American manufacturing woes. The dollar as a reserve currency gives the US a ton of global leverage but requires a trade deficit thus it comes at the expense of domestic industries.

I'd love to understand statements like this. Lemme try: Because trade deficits induce demand for dollars? Like how Japan and now China hold a bajillion US dollars? So if the US had (prolonged) trade surplus, no one would be holding dollars? But wouldn't trade partners still need US dollars to buy US goods? Like the situation post-WWII? So then we'd "loan" partners US dollars to buy our stuff? Aiugh. My brain just bro…

I found this blog post to be quite interesting https://www.lynalden.com/fraying-petrodollar-system/

Re: What happened to the US machine tool industry?

#74

Post by lesuorac »

baron816 wrote: post #50
jillesvangurp wrote: post #42

> 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 conglomerat…

> Constant pressure to hit quarterly performance targets meant that machine quality often suffered. It’s not necessarily the case that greedy, ignorant MBAs came in and ruined everything. Like, if their practices were so inferior, then any domestic firm that didn’t get taken over by them should’ve had a leg up and could’ve dominated the domestic market. Don’t you think the more likely source of “pressure” was the int…

> Like, if their practices were so inferior, then any domestic firm that didn’t get taken over by them should’ve had a leg up and could’ve dominated the domestic market.

There aren't infinite firms. Plus in the article, the previous paragraph goes into how the tooling industry was being bought up by conglomerates so the finite firms became even easier to count.

A company fitting your argument is Telsa. The existing firms weren't willing to canabalize their existing product lines so they didn't invest into EVs and now a domestic firm is eating at their market share. However, "Who killed the electric car?" is from 2006, there has been a lot of pent up demand for EVs that no domestic firm was selling to.

However, something also fitting your argument is Moneyball [1][2]. It's not until the 2002 season that teams start to use statistics to determine who to staff their roasters? The League is from 1876; it took 126 years of baseball before a team figured out how to use math!

> Don’t you think the more likely source of “pressure” was the international suppliers who had lower costs?

Well, the article agrees in that it says "By now, tools from Japan and other countries were as good as or better than US tools, not to mention cheaper and more reliable.".

However, R&D was also being cut prior to this so if you don't do any R&D and your products become uncompetitive it's probably because R&D was cut.

> Was the policy to outsource everything, or liberalize markets and let firms and consumers more freely choose where to buy things from?

Well, don't forget there are winners and losers when trading.

In this case the losers are the American Tooling Industry; the winners were everybody that bought from them lol.

--

I do think this growth every quarter is a big problem though. The early observers of business cycle all noticed that it has its ups and downs. Pretending that there won't be a down and fudging the numbers so that you don't have any downs is going to cause future problems. Delivering not-finished lathes counts to me as fudging the numbers.

[1]: https://en.wikipedia.org/wiki/Moneyball_(film) [2]: https://en.wikipedia.org/wiki/Sabermetrics

Re: What happened to the US machine tool industry?

#75

Post by depereo »

hasty_pudding wrote: post #53
jillesvangurp wrote: post #42

> 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 conglomerat…

> In short, the MBAs happened This describes many many things in the USA.

MBAs are fine, honestly. I have a manager who came up in the industry he works in. He worked at the 'coal-face', understands the issues and has real perspective. He got an MBA later in his career and uses what he learned from that to more effectively communicate up the chain and has some new ideas that he filters through his industry experience to make his team more effective.

Children who get an MBA before getting a job and think they have some magic sauce that solves problems for an industry without respecting the work that's been done and knowing why those problems exist to begin with (maybe they're trade-offs? For a real reason?) are a problem, as are the clueless twats who listen to their breathless assertions as though they carry any weight.

Re: What happened to the US machine tool industry?

#76

Post by Joel_Mckay »

barelyauser wrote: post #59
Joel_Mckay wrote: post #26

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…

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 beautifu…

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.

Re: What happened to the US machine tool industry?

#77

Post by loglog »

plagiarist wrote: post #33
psychlops wrote: post #21

> 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.

Trade agreements have allowed importing from countries where human rights are (more of) an economic externality. Domestic manufacturers can really only compete on the ability to do small batches, higher tolerances, and quick turnaround; like for R&D projects or medical devices.

The article specifically mentions that Japanese manufacturers could deliver tools much faster than US ones.

Re: What happened to the US machine tool industry?

#78

Post by depereo »

specialist wrote: post #45
edgyquant wrote: post #24

Earlier quoted context omitted.

This is the answer to all American manufacturing woes. The dollar as a reserve currency gives the US a ton of global leverage but requires a trade deficit thus it comes at the expense of domestic industries.

I'd love to understand statements like this. Lemme try: Because trade deficits induce demand for dollars? Like how Japan and now China hold a bajillion US dollars? So if the US had (prolonged) trade surplus, no one would be holding dollars? But wouldn't trade partners still need US dollars to buy US goods? Like the situation post-WWII? So then we'd "loan" partners US dollars to buy our stuff? Aiugh. My brain just bro…

I think of it as another type of https://en.wikipedia.org/wiki/Resource_curse

Re: What happened to the US machine tool industry?

#79

Post by [deleted] »

grow2grow wrote: post #2

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 i…

[deleted]

Re: What happened to the US machine tool industry?

#80

Post by bane »

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.

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