I have 4 children and I actively help them with/cheat on their homework. They are assigned too damn much of it. They are all getting good grades and I don't think it is impacting them academically.
"It’s a response to scarce capital, and when that constraint is loosened, it’s worth considering whether other approaches are superior. With enough cash in the bank, Katzenberg can afford to create content, sign distribution deals, and see if consumers watch."
There are two main thoughts from this that occurred to me:
1. There are very few Katzenbergs out there, so him personally raising that money is not surprising. If Spielberg or Lucas wanted to create a short form video company I am certain that they would be able to raise similar amounts. I am not him; therefore the lean rules still apply to me
2. the times that I have had enough money to buy my way out of problems has not yielded the best results. In my 30 years of doing this the clever answers have always come when my resources have been restricted, with often the best results from the most constriction. Extra money can bring bad results sometimes, the beauty is in the restraints.
I do light manufacturing in Arizona. In the last six months the prices of steel have basically doubled. My #1 material input now costs twice as much, and to add insult to injury, it is now becoming very hard to get in some cases.
Last week we were scrambling to find 1/4 steel plate. A common common material. Its as rare as finding bread in a supermarket, its one of those staples that you never expect to see shortages of. And last week we had a lot of trouble getting it.
I had dinner with tubing salesperson this week. He was complaining that all the fancy DOM and high strength thin wall was in short supply - and this is where most of his commission based pay comes from. We don't use that much DOM, but we have noticed the price doubled this year.
Another friend sells a machine which uses hydraulic parts. He can get all the hose he wants, but nobody has any fittings. His suppliers of hydraulic cylinders are all out of stock and not expecting shipments until November. One supplier told him that he laid off his whole staff since there was nothing to sell and he wasn't sure if he could cover rent let alone employees until November.
The tariffs have caused a two-fold reaction; industrial customers with money in the bank have purchased 6 months or a year worth of stuff instead of a months worth of stuff, while suppliers offshore have stopped shipping because they don't know what the price will be by the time it arrives in port. Since the deal is struck before the ship leaves, what happens if a 25% tariff is added? So they ship nothing and wait.
The actual tariff itself is not the main issue, it is the market forces reaction to it. No USA based suppliers can pick up the slack, and nobody I knew of was hedged against a sudden tariff being applied to their main inputs.
Blue collar workers will get laid off and the effects will ripple through the economy. This crash will be different from the last, but that doesn't mean it won't happen.
I have no strategy other than avoiding new spending on machines and being very slow to add new hires. Your industry segment may vary tremendously, time will tell.
I am moving to a new factory this month, my electrician is harvesting all the conduit and panels, because they have gone up 130% this year he tells me. I am in fear of the invoice.
Same for Home Equity lines of credit. I had a friend who was a banker, he had planned on using a $100K HELOC to remodel his house. He was stunned when Chase dropped his Line from $100K to $5K. Killed that remodel.
When I heard that, I maxed out my line of credit and stuck the money in a different bank. That choice got me through 2009. Glad I did it.
My son had brain surgery when he was 6. He is now 14. The helicopter ride of 100 miles to the brain center was $25,000 and the brain surgery was $46,000. The helicopter ride took 1 hour and used 2 people. The brain surgery was 6 hours and involved at least 3 surgeons, plus unknown number of support staff. Insurance was willing to cover the surgery, but we had to fight for 6 months for the helicopter ride.
To quote the lead surgeon during the 6 month follow up - "I stopped looking at what we billed, and what I got paid years ago. It never made any sense to me, so I focused on the patient outcome, which did make sense to me". Great human, saved my kids life, was totally supportive afterwards and stayed in touch for a few years.
Medical practices in the USA makes no sense to me. I am Canadian.
Relevant to Simone, I have a friend who had the same problem and actually went to the same surgeon for the problem, but 5 years earlier. My son was recovered in a few days, she spent 6 months in the hospital to recover. The change was a new technique. They fixed my son through his leg, my friend had her skull removed and replaced.
Humanity can do awesome things sometimes. Sometimes great, sometimes horrid.
The interstate highway system got passed in 1956. It is now comprised of almost 50,000 miles of highway, and cost almost $500 Billion in todays dollars.
There would have been a whole lot of rebar used in the construction of all the concrete - bridges, overpasses, the concrete sections in Los Angeles and other high volume areas
You can come intern at my factory in Arizona, no charge :)
I will teach you about laser cutting, robot welding, keeping the supply chain going, and how to make a profit when competing directly with China and India.
The real scam is the ongoing, monthly, maintenance fees on your 'timeshare'. Worldmark wanted $100 per month, per week of ownership, in a presentation I saw in Vegas. Which means that 52 weeks x $100 x 12 months = $62,400 per year in 'maintenance' on each unit. So even if you paid cash, they still get $62K per year in addition. This was Worldmark Vegas, buying a 'week' in a townhouse complex of $150,000 units.
Most manufacturing machines run G-code. Simply changing one of the G-code values (text editing) would cause the machine to make parts incorrectly, and this would screw up things down the line. https://en.wikipedia.org/wiki/G-code
on my Haas mill, the code is directly editable by the operator. On my robots, the code is 'taught' by moving the arm and telling the machine that the new location is the updated. It is routine to have to adjust minor things in the robots, the operator would have to have access to do their job.
I had a welder put a washer under a sensor on my robot one time, making every weld 1 mm in the wrong spot. We couldn't figure it out and ended up reprogramming the entire setup, 8 hours, to fix it. A week later I noticed the washer, put there by a guy who I fired for bad attitude a week before. Once I had found the washer, I had the choice of going back to the old code, or leaving it with the new code.
I left it with the new code. I didn't have another 8 hours to waste to fix the fix.
Even tiny companies like mine can have sabotage. Why not Tesla?
U.S. fire departments responded to an estimated average of 152,300 automobile fires per year in 2006-2010. These fires caused an average of 209 civilian deaths, 764 civilian injuries, and $536 million in direct property damage.
U.S. fire departments responded to an estimated average of 152,300 automobile fires per year in 2006-2010. These fires caused an average of 209 civilian deaths, 764 civilian injuries, and $536 million in direct property damage.
Facts and Figures
Automobile fires were involved in 10% of reported U.S. fires, 6% of U.S. fire deaths.
On average, 17 automobile fires were reported per hour. These fires killed an average of four people every week.
Mechanical or electrical failures or malfunctions were factors in roughly two-thirds of the automobile fires.
Collisions and overturns were factors in only 4% of highway vehicle fires, but these incidents accounted for three of every five (60%) automobile fire deaths.
Only 2% of automobile fires began in fuel tanks or fuel lines, but these incidents caused 15% of the automobile fire deaths. https://www.nfpa.org/Public-Education/By-topic/Property-type...
a fairly standard industrial welding cell like a Panasonic 750 is between $85 to 125 thousand dollars per unit, which includes robot arm, welding power supply, turntable, chassis that is it mounted to, and the transformer to power it. Requires 240V 3ph 60A service.
I wish I done that with my ex-partners. Sometimes an objective and impartial third party is exactly what you need. People can get dug into their points of view and be quite honestly unable to see it any other way - until a third party points out the elephant in the room.
I am not underestimating them, I am planning on it. All my capital investments are in automated equipment, that I know how to operate myself, and that are flexible in their use - they can make things for many industries, out of many materials.
The future is high mix short run manufacturing. Just in Time. Anything that has to be shipped and not flown, is never going to be 'just-in-time'. Locally made, custom just for you. This does not mean that automation won't be involved. The automation is the core of it - without the miracle of CNC (praise be!) the local guy wouldn't stand a chance.
My customers don't seem to care if it is robot welded or not, or made in the US or not. I doubt 99% of them could tell me which parts are robot welded and which ones are manually welded. Everyone claims that they care, but the top sellers in my segment are all made in Asia. So the evidence does not match the claims. The customer just cares if its what they want. Thats it. We use the "long tail" strategy in our market segment to differentiate with offshore competitors. We offer 3x the part numbers, and 2x the vehicle coverage, plus we do custom sizes and the others do not.
Automation, and flexible use machines, let me change styles to follow trends, and get low labor costs without resorting to offshore. We can customize parts one a one-by-one basis for clients if needed, and we do so usually once or twice a day.
I view my factory like a breakfast restaurant. I know I am going to sell a bunch of eggs, bacon, potatoes, toast - but I don't know exactly how much, or in what configuration. I have a menu, and I know what is roughly the most popular on any given day, but I never know exactly what the customer will want, and it doesn't matter since we make it fresh for them right when they order. I keep the raw materials in stock, we build about half our units on a fixed schedule based on statistical high movers, and the other half is built to order from the orders that day. There is minimal WIP on the floor, I try to keep it under 2 weeks.
Given the choice, people want to get things personalized just for them, or to have something a little unique. How many t-shirts do you see people wear on any given day, and how many are the exact same? Almost none, yet the basic form is the same for all.
TL;DR - things will be fine. Humans will have jobs. Have robots, hire humans.