Ok, I have to ask...

[Chuck]

Technically, us editors at American Machinist are supposed to avoid asking questions on the forum. Doing so makes it seem like we are having you guys do our research work for us. Well, this question has nothing to do with an article I'm writing. I just that I am concerned about the condition of manufacturing in the United States, and other countries for that matter.

How's it going out there, work wise I mean?
Are new jobs coming in, are existing jobs dropping off, do you expect the stimulus package to help any?
What's your game plan for survival?

[Chuck]

I'm finding that a lot of shops are still getting orders. It's just that those orders are for less pieces as compared with last year.
Then, I talk to my nephew who does setup, programming and runs machines at a mold shop, and he's still working six days a week and overtime.
I'm thinking a lot of shops learned their lesson from bad days gone by and no longer put all their machine shop work eggs in one industry basket.
So while one industry might be down, another may be holding strong to carry the shop through the hard times.

[Shop owner]

For me (and this is a really subjective question) my 4th quarter of 08 was the best I’ve seen in 4 years and the 1st quarter of 09 is going Ok as well. But this is why the question is subjective for me, compared to the 4th quarter of 2000? It’s pathetic! I was doing on average $275,000 out the door a month back then. If you ask me, “Will the good old days ever return?” And my answer is no, I believe there gone for good in this country because of everything we know is happening with the trades issues beyond our borders. It reminds me of the way the European nations went after our Industrial Revolution took place in our country only now it’s beyond our borders and its happening to us. It’s now someone else’s turn at manufacturing supremacy. So what does it mean for us still in or choosing to be in manufacturing here in the USA. We have no choice but to “re-invent” our purposes or another way of saying it is to “Adapt” to the new business climate, and from what I can tell that means lots of businesses are doing more & more proto typing and less & less production. Since this is my second shop and I’ve had to build it in the worst business conditions imaginable. I’m still holding out hope it can achieve what my first one did & put people back to work. Now I call it, “I’m on a mission from god..” Lol

The stimulus package; Tough question..
About the only thing I think we can hope for is tax breaks and maybe some incentives.

My Survival plan is to keep doing what I’m doing because so far, it’s working.

[Chuck]

So what has been the survival tactics that have been working for you, Shop Owner?

I guess all I can say is that some work is better than no work. But when does the level of incoming work out weigh the cost of turning on the lights. Do you have a cut-off point? Is there a point in your mind when you say that it is just not worth it? I hope that point never comes.

[Shop owner]

Well Chuck are you ready for this?
After I had no choice but to turn out the lights in my first 31/2 million dollar shop back in the spring of 02, I wanted to know what went wrong and what could I have done better. So I did what I called a post mortem of that business. That’s when I realized what we were facing in this country. It scared the hell of me because I realized this was way bigger then me (or what I could have done wrong) & it will effect every business in manufacturing in our country. Then I started wondering if I were to re-start how could I do it “and sustain” given the worlds hick-ups that we were experiencing (as I saw it), also seeing it was only to get rougher.. So I started to see a concept or a “new business model” that had a chance of working. And I went lean, paid for all my equipment “outright” and I really focused on remaining debt free. This is paramount to the plan working & I can’t stress this enough! It was obvious to me then there was going to days I rang-up zero sales and the last thing I needed to worry about was machine payments looming. And to further hedge my bet, I saw this new operation had to be versatile. I saw there was no room to be too one dimensional. You’re going have to be willing to take on what ever came down the pipe. So all the equipment I sought out was with this in mind. How versatile would this piece of equipment be & can it add more depth to my operation? After setting up a shop this way you’d be amazed at what kind arenas you can find yourself in competing for work. Then the final element I wrestled with was who would be my potential customers or what types of customers would be interested in contracting to a new start-up in this day & age? Surprising the answers was easier then I thought! Ok I can’t attract the Fords or GM’s of the world like I did in my first shop, but do I really need to? Absolutely not! I saw the American spirit isn’t dead!! Entrepreneurs are still out there trying to get their product manufactured. I kind of made up this grading system in my head like a mental check list sizing up companies. It may sound kind of corny but it goes like this; The biggest of the big I would call an “A” company or an A customer and the not so big and smaller companies I’d call a “B” company or a B customer. Realizing I really had nothing to offer an A company that their not all ready getting I focused on the B sized companies. And low and behold it works! I started picking up customer after customer. I want to add something here, I did have one carry over from my old business but they folded shortly after I started up so all my business today is all new business, which makes the success even more amazing. The plan works. You may not get rich but you can at least take care of you’re needs and keep one less person off the streets looking for a job. And who knows, if you keep producing good work and delivering it on time you’ll get the chance to expand and hire help. I hope I covered it and didnt leave anything out, Chuck!

[dr stan]

Shop owner,

Sounds like you have a very good head on your shoulders. One of your key points is keeping it lean. Given the narrow margins of any business today, that is an absolute necessity.

Keep up the good work.

Stan