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The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

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Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#11

Post by franktankbank »

turtlesdown11 wrote: post #7
jackyinger wrote: post #4

How’s basing the US economy on services looking now? My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. And let me tell you there ain’t many of them, especially not young ones. Why? Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. That’s how you end up with a manufacturing industry full…

> How’s basing the US economy on services looking now? You mean the worlds strongest, most developed and most successful economy?

On paper. That's not to say we don't have the greatest potential for even greater prosperity but you can't eat stonks. Right now we are making good on promises to the boomer generation while absolutely dicking over the generations who are making good on the promises of old.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#12

Post by walterbell »

Andy Grove, "How to Make an American Job" (2010), https://www.anderson.ucla.edu/documents/areas/adm/loeb/11_35...

  The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted.
Aaron Slodov, "Rewiring Silicon Valley for the World of Atoms" (2025), https://x.com/aphysicist/status/1906552189880844664

  Manufacturing demands capital, tech, and execution, creating moats through scale and complexity. Returns could dwarf SaaS multiples if a startup nails a sector where efficiency gains translate to real massively scalable growth. The risk is higher (upfront costs, R&D, hardware flops), but it does scream classic venture asymmetry. Compared to, say, biotech's long timelines or consumer tech's saturation, this hits a sweet spot: tangible impact, massive macro tailwinds, and a shot at monopoly-like dominance.. The greatest returns of the next decade won't come from shuffling bits, but from reimagining atoms—and it will take our entire capital ecosystem working in concert to make it happen.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#13

Post by A_D_E_P_T »

ferguess_k wrote: post #5

I have a sense that manufacturing is not coming back until there is a real Cold War 2.0 (or Hot War 3.0 which hopefully never realizes). I mean a real one, like the NATO-WP one when there was not a lot of trading between the two blocs.

There's a way to do it. This playbook has been used repeatedly throughout the 20th century.

First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government.

Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc.

Third you streamline export paperwork requirements and relax things like ITAR.

Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs.

What's happening now is completely backwards/inverted and it's going to lead to total chaos.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#14

Post by sorcerer-mar »

franktankbank wrote: post #11
turtlesdown11 wrote: post #7

Earlier quoted context omitted.

> How’s basing the US economy on services looking now? You mean the worlds strongest, most developed and most successful economy?

On paper. That's not to say we don't have the greatest potential for even greater prosperity but you can't eat stonks. Right now we are making good on promises to the boomer generation while absolutely dicking over the generations who are making good on the promises of old.

The US has by far the world's strongest economy no matter how you measure it. We obviously can and do eat the fruits of our labor.

In fact we (being Americans broadly) eat only a tiny, tiny, tiny fraction of the absolutely gargantuan amount of value we (being Americans broadly) create.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#15

Post by ryandrake »

jackyinger wrote: post #4

How’s basing the US economy on services looking now? My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. And let me tell you there ain’t many of them, especially not young ones. Why? Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. That’s how you end up with a manufacturing industry full…

> Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs.

If I could make as a machinist what I make as a software monkey, all other things being equal, I'd go back in time and train to be a machinist. People will go where the money is.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#16

Post by elictronic »

ferguess_k wrote: post #5

I have a sense that manufacturing is not coming back until there is a real Cold War 2.0 (or Hot War 3.0 which hopefully never realizes). I mean a real one, like the NATO-WP one when there was not a lot of trading between the two blocs.

Manufacturing will start coming back based on the high tariffs just with two big caveats.

1. Manufacturing takes time and money to setup. This is a software forum where changes are made at lighting speed. Manufacturing requires capital, years, and will. In software it might take a day to make an obvious change. Manufacturing hopefully 6 months. Working with physical systems takes time.

2. Manufacturing does not mean jobs. It will be automated with a fifth or less required to setup and maintain. Some technical jobs will come back, but nothing like what has been said.

The tariffs initially put in place will have the same level of effects as a war. This is At Covid levels. The effects take time, inventories are getting sold. You are responding to the news not the effects give it a few weeks for company CEOs to get through the meetings that their employees are pushing up the chains.

Outside of all of that. The biggest issue is consistency of action which this admin squirellllll.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#17

Post by jackyinger »

turtlesdown11 wrote: post #7
jackyinger wrote: post #4

How’s basing the US economy on services looking now? My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. And let me tell you there ain’t many of them, especially not young ones. Why? Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. That’s how you end up with a manufacturing industry full…

> How’s basing the US economy on services looking now? You mean the worlds strongest, most developed and most successful economy?

Reminds me of a friend’s defense of the service focused economy: “I’ve got a PhD in economics”.

Sure services may be great when things are going well, but you can’t ONLY have services, and then go and blow up international trade and expect to have a good time.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#18

Post by whatshisface »

A_D_E_P_T wrote: post #13
ferguess_k wrote: post #5

I have a sense that manufacturing is not coming back until there is a real Cold War 2.0 (or Hot War 3.0 which hopefully never realizes). I mean a real one, like the NATO-WP one when there was not a lot of trading between the two blocs.

There's a way to do it. This playbook has been used repeatedly throughout the 20th century. First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk t…

Don't forget the step where you ignore intellectual property law so that it becomes temporarily legal to start companies without a "war chest" of patents to ward off disputes with.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#19

Post by NoMoreNicksLeft »

turtlesdown11 wrote: post #7
jackyinger wrote: post #4

How’s basing the US economy on services looking now? My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. And let me tell you there ain’t many of them, especially not young ones. Why? Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. That’s how you end up with a manufacturing industry full…

> How’s basing the US economy on services looking now? You mean the worlds strongest, most developed and most successful economy?

We've been coasting on advances made many decades ago. Most developed, sure. Successful? By nearly any metric you can imagine or make up. Strongest? Our economy is eaten hollow by termites. A stiff wind would make it crumble. Worse, there doesn't appear to be any path to true recovery... we can't create the jobs that people need to prosper, but if we could somehow do that we no longer create the people who would grow up to fill those jobs. What industry is it exactly that you think the United States dominates in 2025? What vital, 21st century technology do we have a monopoly on, or at least some undeniable marketshare of? Do we build boats or planes or cars? Do we make computer chips or garments or appliances? Our only saving grace might be that we're self-sufficient agriculturally, without that we'd probably already have starved.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#20

Post by sleepyguy »

The problem is cost. We used to buy tooling for Acme Multi-Spindle Screw Machines but the Chinese could produce it for a fraction of the cost. You would have the first set made locally, then send the drawings to China, and pay less than the material cost to have them shipped to your door. In competitive markets, customers hammer you for every penny on a machined item that costs 0.12.

These days not many Screw machine shops left, very few in the USA. Material costs were too high, and the Chinese could make it for 1/10th the cost. To bring it all back is very difficult since even the products that the parts were being made for are no longer manufactured in the USA.

On a tangent, watch Ives speak about trying to build the iPhone in America. When you understand what it takes, you quickly figure out it is impossible. The supply chains make it impossible when none of the 1000's of parts from screws to glue to chips are not manufactured in the USA.

It won't hurt if we try to bring it all back, but it will take the same amount of time and sacrifice China put in to take it. Who thinks our Gov has what it takes to do it?

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