Thursday, December 17, 2009

Resting over the holidays

This will be the last Blog for 2009. The Blogger is ready for some vacation, especially after the grueling and not so pleasant weeks spent on this year's Annual Economic Review. So I'll wish you a very happy holiday season and extend my wishes for a brighter and more prosperous new year. This will be the last Blog for 2009. The Blogger is ready for some vacation, especially after the grueling and not so pleasant weeks spent on this year’s Annual Economic Review. So I'll wish you a very happy holiday season and extend my wishes for a brighter and more prosperous new year.

I was attending an Organizing Committee meeting for next year's SALA (Seminar on Advanced Laser Applications – East Hartford; April 14–15) event. ILS is the exclusive media source for this two-day meeting that presents the latest applications for industrial lasers in manufacturing applications. Paul Denney (CCAT) asked me to begin thinking about a new session to be held at next year's ICALEO. The concept, which evolved from some old-timers conversations at this year's event, is to identify the weirdest, most outrageous application request for using an industrial laser. My contribution was the use of an Nd:glass laser to destroy a gland located behind the eye of a male shrimp to cause the shrimp to grow to immense size because its libido was destroyed as all it did was eat. There is a lot more to this story, which I'll save for the session in Anaheim (September 27-30).

When you get a few laser pioneers together the air is filled with stories about wild ideas on how to use laser energy: debeaking chickens, slicing cheese, harvesting hyacinths, etc. The anecdotes go on and on and many provide a good laugh, while others actually made it to the prototype stage before failing. The impetus on my part stemmed from my background research for the January ILS article referred to below. Many of these strange application requests came to mind as I reviewed my files.

So, if you have a candidate for the wildest industrial laser application send it along to Paul Denney (pdenney@ccat.us). A committee will pick the mot hilarious of these and they will be shared with ICALEO attendees at the Anaheim meetings. ILS will select some of the top ones and we’ll publish them on our Website after the Anaheim event.

Challenge Dave

Come on all you puzzlers, time is running out on the Challenge Dave contest. Here's the game, pick the ten most important industrial laser material processing applications that occurred during the first 50 years of the technology and you can win a $100 American Express gift card. I'll give you a hint, one of them is sheet metal cutting, now only need to guess 9 more.

Just send your list, no justification needed, to me by email (belforte@pennwell.com). The contest closes January 18 so e-mails must predate this.



Tales from the past

For all the many Federalist fans that have asked about the Town Crier , there is news. Through a welcome donation from the Cooper, the Town Crier now appears on Mondays, Wednesdays and Fridays shouting the Noon news from a rowboat anchored in the middle of the river.

It's not ideal but it is a short term solution because the Cooper is rather flush this time of year with all the crops in and the farmers who are busy making cider, placing orders for more wooden barrels, he has been doing quite well financially.

Different story with the Merchant as his stock of tea hasn't diminished much since he cut back on his Town Crier funding. He hasn't had much sympathy from the townsfolk as they have another beverage as a replacement - the Farmer's cider.

The Town Crier's three day per week schedule is due to change as winter has reared its ugly head in New England and the river may freeze over any day now. The Town Crier mentioned the weather in his Wednesday news. Seems that El Nino is acting up again and that bodes well for the Northern states as it is expected to be milder. Good news for him though as the ice may be thin enough for his row boat to crack through.

So, indecision remained the order of the day among the other possible Town Crier sponsors who just weren't ready to ante up enough to bring the Crier back full time. However as a Christmas gift they did pass the hat and raised enough to buy the Crier some Riocola drops so that he wouldn’t get too hoarse shouting into the Winter winds.

Tuesday, December 8, 2009

A message of hope

It's the holiday season and Mother Nature helped to make it look so by dumping a few inches of the white stuff on us over the weekend, to be followed by more later in the week. It's the holiday season and Mother Nature helped to make it look so by dumping a few inches of the white stuff on us over the weekend, to be followed by more later in the week.

The news from the retailers has been good both from in-store and on-line sales, although the store owners never seem to be satisfied, understandably because holiday sales can represent more than 50% of annual revenues.

If they are looking to me to help out they are out of luck as my wife and I decided several years ago to confine our gift giving to donating to our family's favorite charities. This makes the recipients and the charities happy and us happy to be able to help out.

At a dinner one evening last week, my wife's cousin raised the issue of who to choose among the charities when there are so many new ones to consider, many brought about by the global recession. It was a good point as was the issue of what does one do if they have been impacted by the recession. 'Charity begins at home' seems to be the answer, but it's not too satisfying when you think the issues of the charities haven't changed--cancer in children has not been solved nor has housing for the disadvantaged or food for those in desperate need. It's a tough call requiring one to search their hearts for an answer.

This brings me to my favorite subject--the state of manufacturing today, mainly in the USA. Prodded by the opposition and the general malaise in the job market that seems to be on everyone's mind (the stock market rally on Friday was due to improved unemployment numbers), the current administration is spouting a lot of rhetoric--increase spending on shovel-ready infrastructure (thought this was set from day one), switch some of the bailout money being paid back to improve lending to beef up small businesses (now that’s original, instead of reducing debt spend it a second time), and my favorite, stimulate spending by the consumer for housing, durable goods, and Christmas gifts!

I admit to not being privy to discussions going on in Congress that deal with getting the U.S. back on the road to recovery (read this as more jobs), but I guess it's a hot button item as the candidates for Ted Kennedy's Senate seat in my home state are all promising us that if elected they will go to Washington and straighten out the politicians with their new and fresh thinking.

That sly old devil Bill Clinton had it right, and still does, "it's the economy, stupid."

And it doesn't take an army of lobbyists to get that message across.

How can we start a new budget item, increased troops for Afghanistan, when we have already busted the budget thanks to Iraq, both places where we were not and are not wanted. Could it be the lobbyists for the defense industry are having their way? Charlie Wilson's War redux.

Experts say that more than 60% of jobs are created by small businesses and I believe it. That's why I have been such a strong advocate for job shops in North America. I believe that small business can change the course of the economy faster than dumping more dollars on a new aircraft carrier which, while a good idea, takes years before the money flows into new employment.

A small businessman can get money flowing into the community fast, money that gets spent fast and has wide ranging implications in the supply chain. When the President convened the thinkers in Washington last week the small businesses were represented by their own lobbyist who, while important enough to be recognized, is actually just another lobbyist.

We have a Commerce Department that is one of the most ineffective bureaucratic organizations I know of, but it is there and functioning and should be able to move impact dollars quickly.

So one of my holiday messages to you, to be passed on to all, is--it's the economy, stupid! Not health care, not Afghanistan, not the failing banks--it's the economy first and foremost and then those others can be dealt with.

Monday, November 30, 2009

Getting into the spirit of the season

So we made it through the first of the holidays in reasonable fashion; celebrating with our extended family. So we made it through the first of the holidays in reasonable fashion; celebrating with our extended family. At the top of the hill where I live are three families that have seen their children grow up and move out on their own; scattering from their hometown to new locations on the East and West coasts. For the first time in many years all the kids made it home for Thanksgiving to join their families for the feast. It's easy to tell from the increased number of cars in the driveways.

A rainy Friday made it easy to work while others joined the madness of Black Friday, the biggest shopping day in the U.S. My task was to complete the Annual Economic Review that will appear in the January issue of Industrial Laser Solutions and which also will be presented at the annual Lasers & Photonics Marketplace Seminar to be held in San Francisco on January 25.

I've been collecting references on the global manufacturing scene for several months, tossing those that were superseded by updated financial news. Still the folder is several inches thick. My opinion of the overall market for industrial lasers is formed from these references, interviews with suppliers of laser products, and countless anecdotal comments that are passed to me. By necessity the timing of the report can't be finalized until the latest quarterly reports are available from the 30 publicly traded laser and system suppliers that I track. Also, because of the importance of the fabricated metal product sector, I held off until the last possible minute as I collected impressions from those attending the Fabtech show in Chicago.

I'm not going to tip readers off in this blog to what my report will conclude but most of you, if you are in manufacturing, can probably guess that 2009 will be negative. Many of those I spoke with at Fabtech had already written-off 2009 and they were planning for an improved 2010. This seems to be the attitude of others in the manufacturing sector according to my reference sources.

Most of the neighboring kids who returned for the holiday stayed around for the long weekend, taking advantage of a rather mild weekend to play some touch football. As they worked off their Thanksgiving meals with exuberant no-rules football I pondered on their immediate future as this country stumbles though a prolonged recession and slow recovery. All but two, a graduate student and doctor doing his residency, are in the nation's workforce. Each feels the recession in one way or another. The only female, an MBA consultant for a major accounting firm who sees the inside picture, can only express their concerns based on actual experiences.

One, a budding motion picture and TV producer, is concerned about investors; another, a railroad executive, is thinking about the drop in car loadings that, he says, can be a tip to the markets three months from now.

But I notice that all the kids are playing with the abandon and joy of young people when surrounded by their friends. I call them kids even though they are young men and a woman. But to me they will likely always be the kids, because I experienced their births and their childhood as they were raised here on the hill. As I enjoy their enjoyment I am encouraged by their vitality, poise, enthusiasm, and seemingly carefree attitude. They face a tough year but it doesn't seem to have them down; quite the opposite.

So as I put the final touches on my report I do so with some of their attitude; we will get through this by looking forward. Among the young people who are our future will be those tested by this, the most severe economic declines since the Great Depression, who will be starting the next economic revival. I think we are in good hands.

Thursday, November 19, 2009

FABTECH 2009 a success

FABTECH didn't disappoint; exhibitors went in with modest expectations for success and the show delivered. FABTECH didn't disappoint; exhibitors went in with modest expectations for success and the show delivered. Although the total number of exhibitors was down from the show goal, due in most part to the severe recession in the fabricated metal products industry, the show organizers were able to arrange the North and South halls at Chicago's McCormick Place so that there were no obvious gaps in the floor plan; wider aisles and discrete curtain placement worked.

We were able to meet with more than two-thirds of the 80 plus laser related exhibitors, and we shot video at a dozen or more of these. You will be able to see these videos on the ILS Website.

Among the large system suppliers (mostly laser sheet metal cutting systems) we found consensus that 2009 will go down in history as the worst year for equipment sales with average supplier company revenues decreased in excess of 35% for the latest reporting period.

However, setting aside the euphoria that trade shows engender, we found common agreement that the worst of the financial problems are over and that activity is picking up, sales are being made, and prospects for the early weeks of 2010 are looking brighter. When pressed for an estimate of how much and when it will happen--like good marketing people the world over--the proverbial six-month horizon leaves them wiggle room if they have guessed wrong.

A typical response to our queries was a nominal 10-12% growth over the worst quarter of the fiscal or calendar year. In the words of my colleague Tom Hausken of Strategies Unlimited, "There will be growth."

Most company managers project a bumpy six months with no major blips that will push sales up because the inventory of "new" used equipment has to be worked off and credit availability has to ease.

Daniel Gross, a writer I respect, in his latest column in Slate predicts a faster-than-expected recovery in employment could happen, and if he is right then that bump may already be out here waiting to explode.

The market prospects for small laser system suppliers, mainly laser markers, looked brighter at this year's FABTECH, as their market sectors have not felt the depth of the recession because they are not tied exclusively to heavy manufacturing; they are serving the medical, scientific, and military markets, in addition to industrial. Recovery seems to be happening faster with them as their more diverse manufacturing markets have not felt the pain that the industrial has. Many of the companies serving these markets are having a good year, in one or two cases an excellent year.

The suppliers of related products and consumables expressed positive feelings for the show and the visitors they met. Many of those surveyed serve more than the industrial market and this has helped them weather the storm that has hit their OEM customers in other market sectors.

There were lots of potential buyers attending the show (visitor total at 25,000, Monday and Tuesday both halls experienced heavy traffic), which gave exhibitors the impression that the worst was behind them and that 2010 will be brighter. We were told by many exhibitors that leads generated were plentiful and of high quality. Several of these mentioned sales made at the show.

Our judgment; FABTECH exhibitor goals were met and a willing and potentially growing selling market has developed. On the whole this year's show will be judged a success.

Thursday, November 12, 2009

Do you remember when...?

So here's the idea, suggested to me by the editor of Laser Community, the laser magazine from TRUMPF, for whom I occasionally contribute editorial. I'll pick the Top Ten industrial laser applications developed in the first 50 years of laser technology, which will appear in their 50 year Highlight issue. So here's the idea, suggested to me by the editor of Laser Community, the laser magazine from TRUMPF, for whom I occasionally contribute editorial. I'll pick the Top Ten industrial laser applications developed in the first 50 years of laser technology, which will appear in their 50 year Highlight issue. Interesting idea. I'm not sure if I was chosen because of my long career in industrial laser technology (meaning I have outlasted all the other pioneers) or because of my 25 years of editing Industrial Laser Solutions, but this is an offer that is hard to resist albeit one fraught with potential controversy.

If I pick ten will my choices be accepted by others as a definitive list or will they nit pick me to death for my choices? My solution, set guidelines for how the choices are made. This seems a reasonable way to resolve future correspondence on why I passed on certain applications.

With that as my modus operandi, agreed to by the editor, I set out to revisit 50 years of laser technology and specifically 40 years of industrial laser activity, as I consider 1970 as the start of the industrial laser business.

The task was made easier for me by the criteria that I set; the application had to be innovative and a breakthrough in terms of it's utilization, it had to fill a need in industry as exemplified by its eventual widespread acceptance globally, it had to advance laser and system technology and in so doing create spin-off technology that continues the growth of industrial laser materials processing, it had to have longevity as determined by its continued use today, and finally the markets that used the application had to be measurable in terms of units sold and revenues produced. These criteria, if met, would cull out all those great applications we still talk about which are now forgotten, even though they were media news in their day.

I tapped all my resources, files of information in my possession, personal reminiscences of those who were the applications developers, and the pages of ILS. The result was a list of great applications that so intrigued me that I asked the Laser Community editor for permission to expand on his requirements for a full-blown review in ILS (it will appear only as a timeline reference in the winter issue of Laser Community). This longer piece will appear in the January issue of ILS, and until then my choices are known only to some of those who I tapped for background information.

This blog is first notice to those who are widely versed in industrial laser processing, meaning those who have been around for years and are qualified to comment on what transpired over 50 years. I will be committing the Top Ten list to perpetuity at the end of this month when the January article is in pre-production.

I have to say that a lot of great applications were recalled and their exclusion from my list was only because they did not fully meet the criteria I set. When the list is published you will note that it does not include any of the new crop of applications that may over time qualify, therefore most of those chosen date back to the early days of this technology. I think I will treat these and others that missed the cut in a general closing paragraph that at least gives them mention, sort of an honorable mentions list.

As an aside, at the recent successful gathering of advanced laser materials processing developers at ICALEO, Paul Denney of CCAT put forth an idea for future ICALEO meetings--a session devoted to the wildest, craziest, zaniest industrial laser applications. Among the candidates, cutting cheese, changing the sex of shrimp, and trimming cut asparagus spears. Several old-timers, myself included, could in a short time identify some of these misfits that never would have made my Top Ten list. As I dug through my reference for the list many of these occurred to me as examples of misguided efforts that an emerging technology engendered as it struggled to find its markets.

I look forward to the comments that my Top Ten list will produce and I promise, in one way or another, to share these better ones with you. If you want to have a little fun, make up your own list and send it along to me after December 1st. I'll compare these to mine and I'll acknowledge anyone who guesses right on my choices the week after the January issue of ILS appears.

Wednesday, November 4, 2009

Everything old is new again

It's October 1800 and they've called a special meeting of the Town Council. The subject--what happened to the Town Crier?

It's October 1800 and they've called a special meeting of the Town Council. The subject--what happened to the Town Crier? Because the Council comprises merchants, a banker, and a farmer, the concern for the missing Crier is mostly expressed by the general store proprietor. "Who is going to be spreading the noon news that I used to sponsor," he asked. "I just got a shipment of China tea from that latest clipper ship arrival and it's going to be clogging up my stockroom if I don't let the housewives know it is here."

The practical farmer answered, "Why not use young Ben who has the newfangled broadside sheet press in his print shop?"

"Takes too long to get quantities of those sheets printed and on a humid day the ink runs so you can't make out my selling prices."

The cooper whose barrels were only made to order asked, "How much were you paying the Crier and why did you stop?"

"Not much, but I was his best customer. It's the economy, what with the recent collapse of the state banking system, new taxes on imported goods, and two years of drought that impacted the harvest reducing bartering options, my business is off by 40%," said the store owner.

"Well don't blame me," said the farmer. "I don't control the weather. Besides the drought is over and this year's crop looks better. So you should see the wives back in your store soon."

"I hear you but I'm just not ready to start up with the Crier again until I have more confidence in the economy."

"You mean you want guarantees that buyers will come back to you before you spend money telling them what you have to sell? Who ever heard of such a thing?" said the miller. "Besides, if you don't get the word out about your new shipment my wife will keep serving me that chamomile tea she makes, which I can’t stand."

The Council Chairman interrupted, "Look, forget the tea; the issue before us is how can we get the Crier back on the road. There's an election coming up and I need to get my message to the voters."

"Don't look at me as the bad guy," said the store owner. "I can't fund him by myself, maybe others need to pitch in."

The cooper said, "Right, and we need to do it now. By the time Ben gets his machine running right it may be too late and you'll be forced to cut your hours and the assortment of merchandise you stock."

The banker, whose contacts were widespread cautioned, "I’ve heard the Crier was seen across the river, trying out for the flatlander's council. Ben can't print enough broad sheets to get news over there. Maybe if we they hire him we can give him a megaphone and he can shout the news over the river to us."

"How about we find a new Crier," opined the farmer. "What's so special about the old one?"

"He knows us, our needs, our wants, and our way of life; he's one of us," answered the miller. "When he spreads the news it's done with integrity."

"What's with the integrity, all we want is the news headlines, you think content matters?" the Council Chairman added, knowing full well that he really didn't want the Crier telling everything he knew.

"I've got a suggestion--why don't you guys kick in? I shouldn't be the only one sponsoring the Crier. How about sharing the burden?" pleaded the store owner.

At this blasphemy a motion was made to adjourn the Council and the members fled the room, clutching their purses.

A few days later passing the General Store one could see, through an open door, the proprietor standing in front of a sign reading--Inventory Reduction Sale--surrounded by unopened boxes of China tea, striving to listen through an ear trumpet to the faint voice of the Town Crier delivering the noon news across the river.

And so it goes.

Wednesday, October 28, 2009

When is a laser not a laser?

I just happened to catch the weather person on the 11 o'clock news refer to an approaching cold front as "straight as a laser." Normally I'd let something like this slide, but for some reason it penetrated my tired brain.

I just happened to catch the weather person on the 11 o'clock news refer to an approaching cold front as "straight as a laser." Normally I'd let something like this slide, but for some reason it penetrated my tired brain.

"Why," I asked my wife, "Do people use the term laser when they mean laser beam?" During the baseball season I heard "like a laser" used countless times to describe a thrown high fast ball or a line drive to left field. Again meaning a laser beam not a laser.

For the record, officially and correctly, a laser is a device that generates coherent bundles of photons that are focused into a high energy density spot that can produce a physical change in a material. Simple definition. The laser is a device that that produces a beam of light, and it's this beam of light that is straight and bright.

So, no more straight as a laser folks, it's straight as a laser beam.

Having said this I'll move onto criticism raised by Martien van Dijk (ILS Editorial Advisor). It's not turbine blade drilling, it's laser drilling of turbine blades, he reminded me in a recent e-mail response to a query about the process, of which he is an expert. His exact comment was, "English is not my native tongue but in Dutch we can't say 'turbine blade drilling.' We would say, 'drilling of turbine blades.' Turbine blade drilling would be correct if the process was named turbine blade, but we can say laser drilling, although I would say drilling of airfoils."

I sheepishly accepted Martien's grammar lesson acknowledging my error, but completely forgetting to correct him on the process, which is actually laser beam drilling of turbine blade holes.

ILS is read in more than 130 countries around the world, mostly in English, but also in Simplified Chinese and Japanese (Kanji, Katakana, and Hiragana). By not paying strict attention to the incorrect usage of terms we, ourselves, are promulgating the problem worldwide. Imagine an engineer in China scratching his head as he tries to puzzle out turbine blade drilling, or whatever it translates into simplified Chinese.

To begin with, the word laser is an acronym for Light Amplification by Stimulated Emission of Radiation. When I first started working with this device we were referring to it as an optical maser (shows you how old I am--actually I was a child prodigy). In fact, when I wrote a thesis on this technology as a postgraduate it was the first time I used laser as a term. Recently while researching for a patent litigation I found terms used in the 1960s like--to laser or lasering a material--so already it was being used as a verb instead of its proper use (according to Webster) as a noun. Even today when I see this usage I cringe as it is not one that I accept as correct.

If we accept the correct definition of the word then the laser is always the device that is producing light radiation (the laser beam). And carrying this one step further technically this radiation, since it is produced in a manmade device will spread forever (diverge) as it, now the laser beam by definition, radiates unless we intercept it with an optical element that will cause it to focus (usually converging) to a usable spot size for laser beam processing.

It's these last three words that pose my conundrum. Many times when I am writing or lecturing I will use the laser beam term correctly, but more often I, like others, revert to shorthand and substitute laser. Thus, laser drilling of turbine blades. I know it's incorrect and when I edit articles submitted to ILS I try to use the correct terminology, but find that I accede to the author's usage and use laser instead of laser beam.

I can think of two acquaintances who would not hesitate to take me to task on this, one a former co-worker who as a scientist was super critical of my marketing use of terms like beam delivery (instead of beam generation), the other a former editorial colleague who would not hesitate to quote the New York Times style manual of the terms as gospel. As I write and edit I've got these guys perched on my shoulders reading every word I produce. Both don't hesitate to box my ears when I get it wrong. So with proverbial cauliflower ears I slog my way through texts, mixing terms, all in the spirit of writing to readers' levels. My premise--it is common usage today, although technically wrong to call a laser beam a laser.

Is it legitimate for an editor to seek protection for error under the guise of "common usage?" And this is what I have been wrestling with for the past few days. I'll be honest with you, after 24 years of editing and more than that writing I have yet to hear from anyone about improper use of the term laser when laser beam is intended. So I suppose this blog will open the floodgates of comments from those more grammatically correct than me.

Monday, October 19, 2009

When stress is a good thing

Here in my part of New England it's time to take in the house plants that have been enjoying fresh air since last May. The last of these are my wife's beloved Christmas Cacti. Here in my part of New England it's time to take in the house plants that have been enjoying fresh air since last May. The last of these are my wife's beloved Christmas Cacti (known botanically as Schlumbergera or Zygocactu), a misleadingly named cultivar that in my house has a mind of its own--sending out gorgeous blossoms at random holidays throughout the year. When asked about this strange phenomena, a relative's husband, a renowned botanist (hint--he edited the famous Taylors Guide To series), just shrugs his shoulders saying "Enjoy."

The patriarch of these plants is directly descended from those of my wife's maternal ancestors and quite likely go back 150 years or more; so it holds a special place in her heart. She has moved this plant several times over the years and has happily shared cuttings with countless friends, relatives, and untold numbers of charity fair exhibitors where the cuttings are rooted to raise money.

But back to the strange blooming pattern, which has caused us to rename the plant "Holiday Cactus" as we have enjoyed the blooms on Memorial Day, the 4th of July, and Valentine's Day in addition to many Christmases. Right now we are being blessed by fabulous pink flowers on Halloween from one of the offspring and the patriarch is looking like it will grace us with color for Thanksgiving.

The botanist, grudgingly sharing inside information with a neophyte gardener, opines that the unscheduled blooming is a result of plant stress. And he should know because he has a unique talent for neglecting plants that can take it. Ours are pot bound, due to the size of the root ball and the spread of the branches, which dictates the size of container. I rarely repot them, preferring to cut away roots around the edges and feed in some fresh potting soil. However, once in a while major root surgery is called for, and this year was time for several of the plants, especially the patriarch.

Finding a pot with a proper diameter and depth capable of being hung in a window is an adventure when all the retail resources are converting to holiday decorations. But with the kindness of a nurseryman I obtained some used pots that were suitable for the job.

The patriarch took some severe pruning to get it to a size that accommodates its north-facing bow window location; as a result many new cuttings are being rooted or disbursed to share the wealth with friends.

This stress angle on the plants was running through my mind after reading a Newsweek article, an interview with management guru Richard Baird entitled "Don't Panic" that deals with holding onto talent in a downturn. The thrust in this recession has changed from typical hire/fire practices in the past to identifying where their real talent is while ensuring that the reductions sustain the company's image in the market. He defines these employees as "pivotal talent," those whose performance can have a significant impact on the company.

Addressing corporate loyalty, which he says is not dead but "redefined," Baird cites the networking ability of today's employees that allows them to form a full picture of where they stand in the company and in their employment universe. He claims these hip employees are more interested in self-development and work fulfillment than compensation, positing that unless their developmental needs are being met it's "so long, its been good working for you," as they move to better situations after the recovery.

I found missing in this abbreviated interview of a longer session, the question of stress on those remaining after downsizing has occurred. Stress, in my view, does not cause the remaining workforce to bloom bright as it does with the Holiday Cactus. Having witnessed several of these downsize actions during my career as a consultant, at companies claiming that "employees are our greatest asset," I can say that the remaining talent is usually shaken to its roots and considerable time and effort needs to be made after the return to recovery to get the team back functioning at pre-cut back levels.

In his "don’t panic" approach Baird counsels remaining employees to be productive and outspoken in their sharing of ideas. Since this is an employee prerequisite regardless of the economy, I found this a trite comment. If this leads to stress relief I have yet to see it pay-off. Yes things will get better and this latest economic reversal will become an historical footnote. But I offer a thought; the last recession of this depth created a culture change known as "children of the depression" spawning a generation of workers cautious in their spending and wary of excess. Will future economists coin a term for the actions of those young workers who recover from this current situation?

Tuesday, October 13, 2009

Singing the praises of opportunism

As we celebrate the voyage of Christopher Columbus, the Genovan navigator who sailed to the "New World" 515 years ago, I thought of my paternal grandfather who, 400 years later, set out from Genoa to his "New World" to establish his family.

As we celebrate the voyage of Christopher Columbus, the Genovan navigator who sailed to the "New World" 515 years ago, I thought of my paternal grandfather who, 400 years later, set out from Genoa to his "New World" to establish his family.

I'm sorry that I never had the opportunity to ask him about any underlying reason that led him to come to America other than the obvious one, an opportunity for a better economic life. In the family, children respected the patriarch, but rarely had any in-depth communication with him as he chose to seek counsel from his sons and daughters and not the other generations.

Even though my grandfather knew, from friends who preceded him, what to expect in America, it still must have been daunting standing on the ship as it departed Genoa. I wish I had the forethought to ask him if he ever had second thoughts about the momentous decision. It would have been interesting to probe his thinking, to see what drove him to leave his homeland, which we have been told he loved. But, we youngsters were too caught up with our own lives and it wasn't until recent years that the newest generation of family youngsters began to investigate family history and by then he had passed away leaving no oral history.

Today people jump on planes, fly across ocean, and drop their roots in new locales, seemingly on a whim. Many are following opportunities for financial gain, taking advantage of the global nature of business today. Many of those I know who have done so now carry dual citizenship, not really completely cutting their ties.

This past weekend my wife and I attended a family reunion of a branch of her family, direct descendants of immigrants who made the journey to America from England some 250 years ago. Amongst these were the progeny of writers and historians so to a degree we can ascertain, from their writings, what drove these immigrants to make the lifestyle change. You might think religious freedom but in reality, like my forbearer, it was economic, a chance to improve one's way of life.

Among the guests enjoying a beautiful fall day at the family farm there was a prevailing subject, the state of the economy. One spoke of her family's heavy construction equipment distributorship which dropped from 15 unit sales per month to 15 for the last four months. Another spoke of her occupation as private chef to a well-known consulting firm, telling me that the corporate breakfasts and some of the dinners had been cut back dramatically. While another, a sub-editor for the London Times told me of downsizing changes in the newsroom there. A veterinarian with a busy practice commented on the fall-off she was experiencing in breeding work as her clients cut back on spending for their pets. A highly regarded illustrator of children's books mentioned the drop-off in publisher contracts as that industry consolidates. The guest of honor, still a Brit, who had converted a bustling sheep farm into a caravan (RV) camping park, said occupancies were off this past summer and he was considering shutting down.

An interesting vignette on the impact of the deep recession on the lifestyles of a diverse group of workers. Normally I am reacting to the woes of the manufacturing industries; here it was, save one, services oriented. But one overarching message was subtly being conveyed, all were coping, and most were optimistic about a return to normalcy. I must say that I found their optimism about when this will happen to be somewhat naive, but strangely refreshing. Here were descendants many generations removed from the original immigrants who saw America as a land of opportunity, still showing a streak of optimism. Maybe there is something in their genes that fosters optimism. Or maybe it was the effect of bountiful supplies of wine consumed on a bright and sunny day.

Tuesday, October 6, 2009

The reason is the season

A couple of weeks ago I wrote about my distaste for Autumn, implying that for me it is not a season that engenders pleasure. As evidence, my wife dragged me to several stores on a rainy Saturday as she shopped for Halloween decorations. A couple of weeks ago I wrote about my distaste for Autumn, implying that for me it is not a season that engenders pleasure. As evidence, my wife dragged me to several stores on a rainy Saturday as she shopped for Halloween decorations. My birthday falls close to Halloween and she uses this as an excuse to celebrate what has become, in the USA, the second largest consumer spending "holiday." She is always adding to the Halloween decorations and although she talks about excesses I think she secretly likes this "holiday" for its lighthearted, unsentimental atmosphere.

Anyhow, I'm following her around the stores as she considers several table decoration ideas when it occurs to me that this is just another reason I don't like Autumn, it is a "holiday" celebrating death, ghouls, and goblins called All-Souls Day. What a downer.

To compound my regressive attitude the news on the Web has been particularly unnerving these last few days as the U.S. unemployment numbers, while expected, are not good and much is being made of their increasing in the next few months, especially as espoused by several respected authorities.

An economist at Rutgers University, according to the WSJ, says that to replace the 7.2 million jobs lost since December 2007 (the now official start of the recession) and to add the 100,000 needed to keep up with population growth and to attain a 5% unemployment level at the rapid growth pace of the 1990s will take us until late 2017. Thanks a lot, that's another damper on this season.

I keep reminding people that the President says unemployment is a lagging indicator, however, more discouraging is the manufacturing sector number for production output is down and the purchasing agent's index dropped instead of an expected increase last month; more negative news since the autumnal equinox. And these are supposed to be leading indicators.

Companies that I communicate with are certainly not generating any late-year good news, just the opposite in fact. It is rather depressing that the manufacturing sector almost seems to be in a wait-and-see attitude, preferring to write off the last quarter of this year, hoping for a turnaround early in the next year. This is especially disheartening as there are several industrial shows left this year which should have provided an expected boost in attitude. I would have thought that lean U.S. manufacturers were ready to flex their collective muscles.

Questioned about my usual upbeat view of the manufacturing economy I was asked, "Could you have been wrong?" As a reality check I reactivated the DABoMeter for the past five working days and, low and behold, it went slightly negative. I chalk most of it up to the spate of bad news about the unemployment numbers.

My wife picks up a small wooden zombie-like figure from a store shelf, saying it would make a great party favor. I look at the expression on the figure's face and think, "OMG it looks like me hating Autumn." Right there I decide to recalibrate. I won't complain any more about Autumn, besides it's only ten weeks until the start of Winter, and I really hate that.

Wednesday, September 30, 2009

A bump on the road of life

I'm driving the Interstate outside Hartford along a stretch where the highway exits the rolling hills of Northeast Connecticut and enters the flood plain of the Connecticut River.

I'm driving the Interstate outside Hartford along a stretch where the highway exits the rolling hills of Northeast Connecticut and enters the flood plain of the Connecticut River. The original concept and design of Interstate highways was to make it easier to logistically move defense forces in the Cold War years. Now it’s to move private and commercial road traffic efficiently. As a result site lines have to be long, grades slight and curves gradual.

In this section of the three-lane highway an intersection approach ramp from a suburban community is straight, flat, and gradual, such that vehicles entering can build up to posted speed limits quickly.

A relatively straight roadway ahead of the intersection allows highway drivers a good view of entering traffic, a plus during morning rush hour. I'm cruising the middle lane at my usual 5-7 miles over the speed limit. Ahead of me I see a pickup truck, with a fifth wheel in the bed, pulling a car hauler trailer, one of those wedge shaped trailers that can hold three cars. The driver has the rig up to and over the speed limit as he enters the highway, and he shifts to the center lane, accelerating past my cruising speed.

The highway a few miles on spreads to five or more lanes with left and right exits as it enters the city environs, so traffic is getting heavier as vehicles jockey to find their exits. The traffic is still holding at slightly above the speed limit as it's the end of the rush hour. Suddenly the truck shifts lanes and its trailer starts to wiggle, just a little and then a lot as the wheels seem to have lost contact with the road surface. The wiggle becomes a wobble and then an oscillation with the tail end crossing the lane lines coming dangerously close to the vehicles being passed.

I'm 50 feet behind and already touching the brakes to warn those behind me that a sudden stop may be coming. At this point the honking of horns alerts the truck driver that all is not OK and he slows to try to stabilize the trailer's weaving, just a millisecond too late as the end of the trailer makes contact with an SUV on the left and a another on the right, causing their drivers to veer slightly into trailing traffic.

I'm like in suspended animation, observing all of what appears in slow motion, slow enough that each event in what appears to be a minor fender bender accident unfolds slowly in front of me. I'm far enough back to safely slow and shift lanes, a necessary action because I am at my exit anyway.

I exit the Interstate and ramp back over it with a clear view of the highway for at least a half mile. I can't believe it: not a brake light can be seen, no vehicles seem to be pulling over, and the truck is long gone. There has to be a least two SUVs with body damage, but I can't see them.

So what happens when their drivers finally see the dents and scratches? Did they not feel the trailer contact? I'm certain the contact was solid enough to wrinkle sheet metal as I saw their vehicles change direction slightly. It's one of those events that leave you wishing for a conclusion that never happens.

Big long narrative to make a point about actions that occur beyond your control with results that are never explained to your satisfaction. At this point in time I am beginning to prepare my annual review of the industrial laser market. It's mostly an information gathering and resource tapping process now with significant time to ponder observations.

The news in the manufacturing world is mixed, good and bad, but what concerns is the suddenness of the shifts. In one day I can be up one moment and down in another. And the shifts are not minor. For example, Ford adds another shift at one plant affecting a few hundred workers and in Russian more than 20,000 auto workers will be let go.

You may have noticed that I have dropped the ubiquitous DABoMeter Recession Gauge which graced these blogs weeks ago. The most compelling and pleasant reason being the almost constant good news outweighing the bad over the past few months. The lesser reason being when the recession was announced as officially over it didn't seem to engender much interest among readers who apparently didn't need reminding of the pain they were still feeling.

Right now the economic news is good, for the most part, even in manufacturing; most of the "train wrecks" seem to be over and we are only seeing "fender benders." One thought is that there still seems to be too many of these minor disruptions in the manufacturing community. Like my highway experience I rarely hear the outcome of each but I am left with the general impression that they will continue in the coming months and that 2010 will be a year in which some charge ahead and some will feel a bump but continue to move ahead, slightly damaged but still moving.

Tuesday, September 22, 2009

The leaves of brown

We all gathered on the deck, champagne glasses in hand, to say goodbye to Summer. It's a bittersweet scene as the temperature just hit 80 degrees and we are in the 17th day of a glorious, dry weather spell. We all gathered on the deck, champagne glasses in hand, to say goodbye to Summer. It's a bittersweet scene as the temperature just hit 80 degrees and we are in the 17th day of a glorious, dry weather spell. Here in New England we had a non-Summer this year; wettest (with only one named tropical storm) and coolest in decades, and the last two weeks of late summer weather were not enough to make us yearn for the cool days of September yet.

The change of seasons is purely a meteorological thing; I prefer to say psychological. My father, whose genes I share, disliked Autumn. He didn’t like brown (a gene I share); couldn’t stand the leaves’ brilliant fall hues (a favorite saying was "You know what comes next."). He was a Spring person, reveling in the re-greening of the trees and plants; me too.

The season change is, for me, a reflective time. So business news that arrives in the papers and through the Web tends to carry reasons for deeper thoughts, albeit only for a few days.

So while we toast the start of Autumn, I am contemplating a spurt of news concerning certain newspapers' move to curtail free use of their editorial. Trials are underway at a few publishers who are instituting a fire wall on their Websites asking readers to subscribe to a paid content service; one is asking about $4/month/year to access the columns of journalists in their employ. It's known as "pay for content" and it is seen by some as a way to make up for lost print advertising revenue, which subsidizes news gathering and reporting.

It's not a popular idea right now as the thought of charging readers causes circulation managers to envision them fleeing to free alternatives. Some say it's equitable; after all, Google scoops up all the news and distributes it for free, so why pay when you can get it delivered to your computer, and you select the filters.

I presume that readers are intelligent enough to realize that the system we now enjoy is paid for by advertisers. And, yes, the marketing and promotion budgets at these companies are paid for by their customers, so technically the readers are paying for content anyway. But some will say that that is indirect and doesn’t carry the onus of pay-for-content subscriptions. Others counter, without the media resources (no revenue to pay reporters) we’ll all be reduced to getting our news in 140-character Twitter tweets or on Facebook, without verifiable attribution.

I read that Toyota will spend an inordinate amount of money this quarter to advertise their vehicles, in an effort to regain market share. Which means their competition is forced to counter, leading to an uptick in advertising revenues for the next quarter, which may temper the thinking about pay for content. But this may only be a little bubble and after the holidays it’s back to head scratching to figure a way to make up for lost advertising revenues.

Well, I think this is just too deep a subject to address at this Autumnal welcoming party, especially since no one else here is giving it a thought and my frown lines are being compared to my father's.

Thursday, September 17, 2009

A minute is a long time

Well the football season started in earnest this past weekend. Know that I am a fan, and only a very pleasant New England Fall weekend kept me away from the day games on TV. But I did manage to catch some of the more important late afternoon and evening games and one thing popped out at me; timing is everything. Well the football season started in earnest this past weekend. Know that I am a fan, and only a very pleasant New England Fall weekend kept me away from the day games on TV. But I did manage to catch some of the more important late afternoon and evening games and one thing popped out at me; timing is everything.

Two of college level’s top head coaches at Notre Dame and Ohio State showed a decided lack of awareness of this fact. Shame on you Charlie Weiss; a former professional team offensive coach (Patriots) should be a master of the clock. He let Michigan back into the game by not burning time off the clock with six minutes left in the game. As a consequence, a freshman quarterback saved the day for Michigan with a long drive.

Meanwhile down in Columbus Jim Tressel, the coach at OSU, not managing the clock well (an OSU trait), let Pete Carroll and his Southern California Trojans steal a potential upset game with a freshman quarterback conducting a 90 yard drive with 1 minute to go. Now Carroll, a former professional coach (Patriots again), knows that 60 seconds is an eternity in a college game.

Back to the timing thing; I just got through reviewing a bunch of new products that will be shown at the November FABTECH show in Chicago as their suppliers have timed introduction into the 2010 market by showing products in late November. Because this was the only big fabricating equipment show left this year it’s not a bad venue to catch the wave of the anticipated rising tide of business in the first quarter of next year.

Talk about great timing, Barron’s (September 14) reports that 50 economists, recently polled, are upbeat about the economic outlook. They now predict that the recovery will be over in the fourth quarter of 2010 (when real GDP exceeds the peak of the second quarter of 2008) The not so good news is that unemployment will be down by then but not by much as the number of jobs will not grow faster than the labor force.

Now to my weekly harangue. Pete Engardio writes a very interesting article in Business Week on manufacturing exodus from the U.S. It is a well documented eye opener and worth your time to read it. In explaining why companies are abandoning the U.S. for cheaper manufacturing sites he lays out all of the compelling reasons that we have heard ad nauseam and he has many suggestions for possible correction, but he ignores the one that really bugs me the most.

Innovative technology companies that use U.S. tax dollars to develop a product should be required to return that investment by manufacturing it here in the U.S. In other words, if you take public funds to create a product, you should payback the country by producing employment here not in a cheap labor country that only offered a tax break while gaining employment for its citizens. I’m not preaching isolationism. Simply, if you are building a company using taxpayers’ money they should benefit when you go to production. You have the option, Take funds from Singapore, for example and manufacture in Singapore. That's fair and not isolationism.

Tuesday, September 8, 2009

Laboring in the vineyards of life

In 1899 the U.S. Congress enacted a law setting aside the first Monday in September, each year, as a way to show "the strength and esprit de corps of the trade and labor organizations" to be followed by a festival for the recreation and amusement of the workers and their families. In 1899 the U.S. Congress enacted a law setting aside the first Monday in September, each year, as a way to show "the strength and esprit de corps of the trade and labor organizations" to be followed by a festival for the recreation and amusement of the workers and their families. Over the years the intent and meaning of Labor Day changed. Where once only essential services were staffed, it morphed into a day off for many Americans who enjoyed being served by the unlucky ones that had to open the retail shops which took the occasion to have end-of-Summer sales.

Eventually Labor Day joined the array of three-day weekends that serve to give the illusion that U.S. workers have 21 extra days off from work, in reality only 7 because they had the other 14 anyway. Labor Day is also the unofficial end of Summer and start of the Autumn season (officially September 22).

The Labor Day weekend this year got off to a less-than-welcome start as Friday morning the Government dumped its monthly unemployment figures on us, with the rate climbing to 9.7% overall. A 10% number seems to be a goal looked at with some unexplained anticipation by members of the media, and certain politicians, for somewhat dubious reasons. What is there about certain numbers? Why is 10% better than 9.9%? Yes, it represents hundreds of thousands of workers, but to the media it just seems easier to say and it has the magic "double digit" that the administration's opponents will use even after it drops back to single-digit levels.

I'd like to say that I spent the long weekend contemplating the unemployment numbers and reflecting on the state of labor in the United States. Instead, like most Americans I celebrated the end of Summer by indulging myself--after all, Congress used the word festival when creating the law.

I joined host Ron Schaeffer (an ILS Editorial Advisor) at his annual three-day Labor Day bash wherein rock music aficionados come to his New Hampshire farm to relax, eat roasted meats, drink, and enjoy music supplied by a series of bands, mostly made up of amateurs, who rotated at the microphones set up in Ron's barn. For my part, I sat in on the drums for a session of Ron's Band. If you know Ron you know that he revels in playing music (the fact that he is very good at it makes it enjoyable for his audience and friends). This year he equipped himself with wireless devices that let him wander as he played and sang; not an easy thing for this drummer who was left alone in the barn backing him up as he and the other guitar players roamed the grounds entertaining his invited guests.

In a final DAB insult to the spirit of Labor Day, I joined close friends at a lobster feast that had as its centerpiece several multi-pound lobsters (or "lobstahs" as we say in New England.) Now, I like lobstahs, in fact really love eating them, but this affair was the equivalent of a Roman Bacchanalia. Many of you will have had a standard 1 ½-pound lobster at a clam bake, so think about crustaceans almost six times larger. At this meal we diners were dealing with shelled eight-pound lobsters, enough to feed three times our numbers. I set my own record by consuming the meat from a claw the size of my hand that easily weighed over a pound. I'm here to tell you that this is lot of lobstah, even for a New Englander.

The mention of these two events is given as an example of how the Labor Day commemoration has denigrated in meaning. Not once during the activities was the unemployment number or the fate of hungry workers addressed. None of my fellow celebrants worried about the concerns of labor, when we will hit the magic 10% number, or the parlous state of manufacturing in the U.S. Only as I sit at the keyboard, typing this as the long weekend closes, have I given it any thought at all; my main concern being to entertain you, not to present any embarrassment for my story.

Wednesday, September 2, 2009

You know what they say about a rising tide

I know. Last week I suggested that I was done talking about the economy for a while. But I just can't resist returning to the subject thanks to the Institute for Supply Management announcement on Tuesday that the U.S. manufacturing sector grew 8% in August from the July number of 48.9. I know. Last week I suggested that I was done talking about the economy for a while. But I just can't resist returning to the subject thanks to the Institute for Supply Management announcement on Tuesday that the U.S. manufacturing sector grew 8% in August from the July number of 48.9. The August figure 52.9 beat the expert's estimate of 50.5, rising to a three-year high. Is that the sound of champagne corks I hear popping?

The Manufacturing Index is a closely monitored number that when above 50 represents expansion. We have been waiting for this kind of news for months, as it is a good measure of what we have been feeling, but could not quantify, Things are getting better folks.

Oh yeah, the naysayers that I referred to in the My View editorial appearing in the September issue of ILS are already cautioning that manufacturing may not be able to sustain this positive news. My answer to this is, so what, we’ll have 30 days of sunshine while they dwell in the darkness.

Why the optimism? New orders were up 10%, the highest level since December 2004. And experts are saying that we can expect reasonable rates of growth for the balance of 2009. Inventories are still very low, leading some to suggest that just restocking the larder may keep the index positive for the rest of the year.

Wall Street, the great contrarians, didn't like the good news, responding with a loss of 100 points as this blog was posted. So who cares about the Street? They are supposed to be futurists, six months in the future, so why are they all of a sudden reacting negatively to today's good news. And other than those still playing the market, who cares, we are too making proposals and getting ready to book orders.

I still think we are going to see a faster-than-expected return to improved year end numbers by the laser industry. A record recession, worst since 1937-1938, could mean a record recovery. My advice: get your Plan B up and ready to be implemented in the fourth quarter. Fabtech, occurring right in the middle of the quarter, may be better than we had hoped. Pull out the stops and start promoting your new lasers and systems.

Tuesday, August 25, 2009

Get yourself a good lawyer

The subject today is not the economy. First, because I have nothing new to say, having vented in the last few blogs, and second, because the news on this subject is generally positive so any contribution I make would just add another voice to a growing chorus of positive thinkers. The subject today is not the economy. First, because I have nothing new to say, having vented in the last few blogs, and second, because the news on this subject is generally positive so any contribution I make would just add another voice to a growing chorus of positive thinkers.

Today the subject is litigation, brought on by the confluence of two communications received Monday morning. The first was a news item in the Wall Street Journal (August 23, 2009) headlined 'Billable Hour'Under Attack. In essence, the contributing journalists, Nathan Koppel and Ashby Jones, explain that a nascent movement is underway, led by major U.S. corporations, to request that their outside law firms switch from the traditional practice of billable hours to a flat fee arrangement, which is said to be a way to reduce the outside legal expenses of these corporations.

I think many of us became aware of billable hours from television shows like Boston Legal, most recently, and its predecessors. In case you don't know the term, it means that law firms staffed with highly paid junior lawyers must increase their billable hours to afford them as employees. The recent recession and its impact on corporations was the cause for a review of outside legal fees as a way to keep the bottom line in order, and incidentally to act as a catalyst for a paradigm change in the way they are billed. Young lawyers like the salaries but hate the hours, 12 a day was not uncommon, that's a lot of billable hours.

I'm sort of on the fence on this one. On one hand I think a legacy policy is due a change, on the other I enjoyed the practice on occasions when I was involved as an expert witness, charging my time, as the lawyers did, on billable hours. I have also done flat fee work but this was usually for background research assignments. When courtroom appearances were involved I usually went the billable hours route, because predicting a flat fee in this circumstance is difficult with so much beyond your control.

The second litigation communication was a notice that a class action lawsuit in which I am a class member, revolving around tax recovery charges, has been settled and it's now time to decide how to participate in the settlement. I have been involved in a reasonable number of class actions, ranging from auto lease overcharges to foreign transaction fees. Many of these, based on the possible settlements, were hardly worth the effort to participate but some I chose settled and I received cash awards or equivalents. One or two were modest in size and welcome.

The problem with these suits is that the law firms handling the class action make the big bucks, leaving a smaller pie for divvying up for us participants. Remember, at these law firms billable hours is the name of the game.

Anyway my position on class action suits (including those that appear in the Sunday newspaper supplements) is to read what the settlement will be and if it is for cash, join the suit, if for goods or payment 'in-kind' (discounts of air travel with all kinds of blackouts) ignore it.

Since I generally see (except for those newspaper notifies) only class actions that mostly affect me as a traveler, I can only imagine how many of these actions are underway as this is being written. Must be keeping legions of young lawyers busy building up those billable hours.

Will the shift to a flat fee focus change the number of the class actions that appear? Doubt it.

Monday, August 17, 2009

It's all in the timing

As if it wasn't tough enough trying to predict where the economy is going, I now have more input. As if it wasn't tough enough trying to predict where the economy is going, I now have more input. For several weeks after the Munich World of Photonics show we were bombarded with grim news about the manufacturing economy and the economy in general in Europe. From our people on the ground in Europe to daily published statistics in the media to personal profile stories in the New York Times, all we read about was the sad state of the European economy and its impact on the average citizen.

The news got so bad we started to wonder where our European friends had been for the past year or so. We, here in the U.S., have been suffering for over a year and they just woke up six months ago and realized they were in recession. What gives here?

Well I don't need to sweat this one any more. Friday's Wall Street Journal, in a bold type face, front page, above-the-fold headline trumpets "Europe Recovers as U.S. Lags" with a deck of "Germany, France Escape Recession Even as Consumer Weakness Hobbles America."

Now this has got to be one of the shortest recessions on record; one month it's on, the next off. And all those complaints in Europe were for what? And what is worse, the article goes on to say that Europe is joining China, India, and "increasingly elsewhere in Asia" as countries rebound from the recession. What recession, I ask? Sounds more like a hiccup than a heart attack.

So here we sit in the Western Hemisphere, all alone as the rest of the world returns to economic health. Meanwhile in the U.S. the Federal Reserve lets us know that economic activity is leveling out but likely to remain "weak for a time."

I'd be ranting and raving about this dichotomy but further into the WSJ article is this buried gem about the cautious European Central Bank (emulating the Fed) predicting a slow return to sustained growth. Some economists believe "the ECB is behind the curve."

So I choose to take the same tone and think the Fed is "behind the curve" and, as I have said here for a few weeks, the recovery will move faster than is thought.

As I finish this blog on Monday morning another bit of good news arrives in the form of a New York Times (and other papers) news item about Japan's rebound from the deepest recession since WWII; courtesy, it is said, of a stimulus program.

So here we sit in the USA, looking at our friends in Germany, France, China, South Korea, Singapore, and Hong Kong enjoying some good economic news while we continue to dither about slow recoveries and the impact of stimulus projects. Acquaintances in some of the mentioned countries blame the U.S. for this world economic situation and they are privately smiling as we muddle around on a solution while they are gearing up to increase their export to this country when the consumer comes back into the market.

Wednesday, August 12, 2009

It could be worse

Nobel Prize winning economist Paul Krugman said Monday, at a world capital markets conference, the worst of the global economic crisis is over but that full recovery is at least two years and more away. Nobel Prize winning economist Paul Krugman said Monday, at a world capital markets conference, the worst of the global economic crisis is over but that full recovery is at least two years and more away. He said the rapid rebound from the 1997-98 Asian financial crisis was due to a sharp rebound in exports. Showing the bright thinking that won him the Nobel, he said Asia will rebound faster led by recovery in manufacturing exports. Excuse me Mr. Krugman, exports to who if recovery for the rest of us will be two or more years in coming?

A measure of the global manufacturing economy's impact on the industrial laser market can be gained from a review of the latest financial reports from leading product supplier companies: Rofin-Sinar Technologies, Coherent Inc., Newport Corp., IPG Photonics, and II-VI Corp. and published statements by Trumpf, Bystronic, and Prima Industries. Depending on the period business has been off between 26 and 48% compared to the same period a year ago. Admittedly 2008 was, for the most part, a good year for these companies, save for the last two months for those involved in the sheet metal cutting market, so the percent decline is somewhat distorted. A better measure would be to look at a three-year period perhaps. But what we have at hand are the numbers presented to the financial analysts, which the reporters pick up and which tend to make the headlines.

Allow me to cite some remarks, from sources I will not identify, quoted in the aforementioned reports.
-We are hopeful for the beginnings of a recovery in the second half of (FY) 2009.
-Based on third quarter bookings we anticipate revenues in the fourth quarter will be...similar to the third quarter.
-With certain end markets appearing to stabilize and good customer engagement, we believe bookings will begin to recover in the September quarter and continue through fiscal 2100.
-We expect to be well positioned for renewed growth when the global economy recovers.
-We are optimistic that we have reached the bottom of the downturn. In some geographic regions we are experiencing a more positive customer settlement due to the stimulus packages.
-Regardless of capacity adjustments (we are) maintaining (our) presence in all markets and we continue to work intensively on development projects.

A recent survey by PricewaterhouseCoopers LLP (their Manufacturing Barometer), as published in the Youngstown, Ohio Business Journal, reports that while most industrial manufacturers still believe the U.S. and world economies declined in the second quarter, the outlook for the next 12 months shows improvement, with the lowest levels of pessimism (18%) and the highest levels of optimism (43%) seen in the past five quarters.

According to the report, 43% are forecasting positive growth rates, up from 34% in the prior quarter. Some 32% are forecasting negative growth over the next year. Overall the projected average revenue growth for industrial manufacturers over the next 12 months is minus 0.4% compared to minus 7.9% for 2009, a signal of less pessimism.

Market demand remains the major barrier to growth in the U.S. according to 82% of respondents and decreasing profitability is the second highest concern with 50% of those responding. Capital investment plans rose to 27% and those responding plan to spend 6.2% of total sales up from 5.4% last quarter.

These survey numbers are not as high as some would like but right now they fall into the category of "not as bad as before:" which is becoming the replacement for the overused "cautiously optimistic."

The July Business Conditions Report from the Precision Metalforming Association indicates that an economic recovery in the key sector of Fabricated Metal Products may be in the offing. An eye opening 37% of respondents (up from 21% in June) said they expect increased general economic activity in the next three months. Tangible evidence is that 31% said their shipments were up from three months ago (versus 14% in June) and 46% expect increasing new orders over the next three months versus 29% in June. These are very positive numbers that tend to support my thesis (last week's Blog) that the recovery may be more rapid than experts predict. As an example look at this change in a survey from 30 days ago. Good Stuff.

Thursday, August 6, 2009

Sooner rather than later

Last week Newsweek magazine declared on its cover, "The recession is over." Last week Newsweek magazine declared on its cover, "The recession is over." These words were printed on an inflated big blue balloon (interesting choice of color). But just below the balloon is a needle poised to puncture it. An asterisk on the word "over" proclaims "Good luck surviving the recovery." Thanks a lot Daniel Gross (the author of this piece). You really know how to puncture good news before we can begin to bask in the glow of it. I must admit, his article does make interesting, if disturbing, reading.

It seems that debunking the recovery is just the latest in a stream of economic forecasts that so far have been way off base. In my youth I had a mentor who classified all economists (and accountants) as historians, always ready to tell you what went wrong after the fact; people who by definition are not risk takers.

Some economic projections postulate the fault for a slow recovery will lie at the feet of the manufacturing industries. Let's see now; are unemployment figures a leading or trailing indicator? Here in the U.S. we bailed out the banks, insurance companies, and other financial institutions and currently the auto industry with a "clunker" buy back. But when it comes to manufacturing, you're on your own guys.

Some in the administration don't have a problem bailing out financial institutions by dumping a few hundreds of billions onto the banks to allow them to pay off their loans so they can again offer swollen bonuses to the deal makers. After all, we are told they are entitled by contract. But dump a few billion on the manufacturing sector to rehire those contracted workers that were let go who could help get us going again, faster and wiser--No way!

One reason is that we, manufacturing, are our own worst enemy, especially here in the U.S. We would like the stimulus money if it came without strings. Sorry guys, only bankers get that privilege. As long as I have been associated with manufacturing in this country it's always been the same, give me the money but don't ask me to be regulated.

So we can't really cry. Other nations know how to pick up their manufacturing economy, especially that exporting giant Germany. And for a model, how about that capitalist giant China? In less than six months they turned a flat GNP into a 7% possibility. Maybe politics their style has some value.

Well I am here to tell you that I don't believe the recovery will be long and hard--contrary to all the evidence the economists put forth. They got the recession wrong two years ago so why believe them now? I do agree that it will be hard, but when was success in manufacturing not hard?

My money is on a solid recovery led by a reenergized, lean, mean manufacturing machine. It won't be in auto but in a myriad of high technology solutions to the growing needs of a global economy.

I work in an innovative industrial environment that may be back on its heels right now but not down and out. Regardless of what some historians would lead you to believe, the industrial laser industry bootstrapped its way to billions of dollars of annual revenues and they'll do it again. Sooner than some would have you believe.

In the laser industry companies have prepared for the recovery by investing, in a down economy, in R&D to develop innovative solutions to solve the next generation of manufacturing problems. And many of them, in the face of growing red numbers, have held on to key personnel that will be needed when the recovery begins. These are just two reasons I think the laser industry will recover quickly in developing markets.

Monday, July 27, 2009

Like a self-fulfilling prophecy

Well I told you it would happen; last Thursday the Bank of Canada announced the end of the recession, at least in Canada. Well I told you it would happen; last Thursday the Bank of Canada announced the end of the recession, at least in Canada. Immediately the naysayers leaped out of the woods. The VP of Export Development Canada forecasted more bad news in the second quarter will lead to further contraction in the world's largest economies. The Chief Economist for the Canadian Manufacturers and Exporters thinks the Bank of Canada forecast is optimistic since he is not seeing any sustainable recovery in customer orders. On the other hand, the vice-chairman of Deloite Canada cautioned that there is a time lag before any recovery makes an impact.

I especially liked the retort from the Export Development Canada guy who draws an analogy with an earthquake, saying there is relief when it is over but dealing with the resulting devastation is another thing.

Our Canadian cousins are terrific people, typically optimistic in a sunny personality way. Ready to find good wherever and not prone to controversy. Quite the opposite from us on the other side of the border who tend to be outspoken and hardly reticent on issues.

So thanks Bank of Canada, you made my weekend with your upbeat but cautious assessment of the situation in manufacturing in Canada. I know that yours is just one voice but you made the headlines and I am sure those that read them smiled, at least for a while.

Here's a smattering of last Friday's headlines.

Ford navigates path to profitability
Hyundai earnings climb 48%
Airlines report some sign of stabilizing
Defense firms call business solid
Stock recaptures 9000 on profit surprise
Microchip companies sinking billions into US factories
VW gains ground in the first half

Hello out there; is there something going on? Could it be the bottom has been reached? Yeah, yeah, I know there was plenty of bad news too, but the good news was really good and it made for a great weekend.

Tuesday, July 21, 2009

Will we recognize the future manufacturing industry?

What happened? Did I wake up from one nightmare to find I was living another? What happened? Did I wake up from one nightmare to find I was living another? Coping with the current recession is enough of a problem, now I am supposed to look beyond to the recovery to see what shape the industry will take?

What will the post-recovery world of manufacturing look like? Notice I'm still wearing rose-colored glasses, believing that global recovery will start in 2010, regardless of what the pundits and now our leaders are telling us. Not to deviate from this stream of consciousness, but I have read comments from a few writers who know the manufacturing economy and they speculate that the recovery rate could be steeper than generally being projected. Now that's a thought to hold on to.

What got me thinking about the post-recovery landscape in the manufacturing sector was the translation of a very well-written Spiegel International Online article by Alexander Jung titled "Germany's Export Champions Slammed by Economic Crisis." In this the writer paints a bleak picture for industry in Germany's Musterlaendle. What could have been another litany of company woes, and is, actually, really has a more compelling message--how will these companies cope with a changing world brought on by the global recession. Traditional export markets, the strength of the German companies referenced, may be challenged by new competitors who used the recession to position themselves for the "new" markets. My read on the writer's view is that political, economic, and social effects of this downturn taken together will possibly be seismic.

Only one writer's view, but enough to get me thinking about the near future and what a recovery period will bring. It seems to me that forward-thinking companies who are able to gut out this recession, who leaned down to the bare bones, who have not cut product development funds but have invested in them, who have sustained their market presence and visibility, who have used this terrible economic climate to better measure their customers' future needs, will be the survivors. That's right; I use the word survivors because it’s been that brutal to do business this past year. I know because I'm not just an observer, I'm one of you.

We can look no further than Detroit where mighty General Motors has been brought to its knees in part by their misunderstanding of their markets. Gone are the badges of Pontiac, Saturn, Saab, and Hummer. Gone, perhaps forever, will be the arrogant GM buyers who had the power to make or break vendors. Now they must go, hat-in-hand, to their vendors who are asking for up-front payment terms that would have been laughable two years ago.

Paraphrasing Charles E. Wilson, the CEO of General Motors 55 years ago, "What's good for GM is good for the country." "Engine Charlie" must be turning in his grave as he sees his beloved company humbled, shamed, and vilified by the media. In 1953 he was arguably more powerful than President Eisenhower. Now his company is forced to go begging in Washington to a new President who wasn't even born when he uttered that famous phrase. My how the times have changed.

Lesson learned; be careful, it might take a half century for you to have to eat your words.

Tuesday, July 14, 2009

Brother, can you spare a smile

I'd rather not be writing this but I've just about had it up to here with this media blitz on the U.S. unemployment figure. I'd rather not be writing this but I've just about had it up to here with this media blitz on the U.S. unemployment figure. Today the specter of 13% was raised on the morning network news. What is with these fear mongers? If you live in an industrialized nation, especially the U.S., you know things are bad. And if you don't know someone who is unemployed then you probably shouldn't be reading this blog.

I realize that certain media personalities are having a field day with the persistent negative news and I think I know why, insecurity. Problem is they and other naysayers just don't want to give the stimulus a chance. It was not intended to be a panacea for all the economic woes being experienced, but it did serve to stifle the bad news for a while and some good has come of it, especially if you work in the stock market, among the first beneficiaries of the stimulus along with banks and other financial companies. I've said all along that it’s not a recession until it hits Wall Street, then look out.

My focus is on the manufacturing sector and I can say, with fingers crossed, the bleeding has at least been staunched. Not over by a long shot, even though the ever-moving horizon for the turnaround seems to be in sight. But every time I see some good news it is offset by some media hound trumpeting the lack of results from the quick stimulus package.

For what purpose, I ask. Do they, and their ilk, want the U.S. to flounder for another year? Do they want the economy to dip again just for the sake of embarrassing a sitting president? Are they so upset by the actions of a popular president that they would see a rising unemployment rate as a bolt of lightning from above? Weren’t they happy with a recession, preferring a depression instead?

I hesitate to say this but last week's media blitz on Michael Jackson was to some degree a relief as it drove the naysayers off my Internet home page and the evening network news.

Even the sage of Omaha, Warren Buffet, came across as on old curmudgeon last week as he tut-tutted the administration, opining that the recession was far from over. Thanks Warren, you did your country a great service by speaking out. You're so smart you only lost a few billion last year.

I'm not a Pollyanna clone. I know things are bad; I need look no further than the industry I work in where publications are feeling pain never experienced before. But I don't need to be reminded about this every minute of every day. Give it a rest folks. Say something nice to the next unemployed person you meet. Give him or her a smile, a pat on the back, and maybe a piece of good news – however small. They will feel better and so will you, if only for a short while.

And here's a postscript for you Mr. President. With all due respect, you might want to listen more to the millions of unemployed here in the U.S. than to the entreaties of Wall Street. I don't speak for them but it does seem to me the jobless are getting restless waiting for the stimulus to trickle down. Watching green shoots growing is an OK way to spend a hot summer afternoon but unless these turn to food quickly they are not helping to put nourishment on the table. Put simply, Mr. President, act to get people back to work now and a lot of your critics will have their arguments tempered.

Tuesday, July 7, 2009

Hazy, lazy days of summer

I'm not one of those bloggers who think the world can't live without their (daily, weekly) postings I'm not one of those bloggers who think the world can't live without their (daily, weekly) postings; therefore when I take a vacation I actually take a vacation--thus, no new blog last week.

Three weeks ago I posited that the end of this record recession might be coming into view, and I still believe that, because the economy related news in the last month--even though spotty--has been more positive than negative. Most of the experts with solid credentials cautioned that there will be bumps along the road to recovery. Turns out they were right on this one, as the refrain heard and read today is "at least the news (today or this week) is not as bad as last." Example, the increase in the June U.S. unemployment rate while up, was - on a monthly basis - less than that in May. Reminds me a little of that classic line "Other than that Mrs. Lincoln, how did you enjoy the play."

The DABometer still leans in the positive direction but I notice that it seems to quiver on certain days, with the news of the closing of one laser and system supplier and the bankruptcy filing of another. Mind you, both of these will likely be resolved and the businesses will go on, probably in a different way, but the news raises some concerns. Thus the vibration in the meter reading on the days of these announcements.

The news media, always hungry for headlines, has latched onto the unemployment numbers, raising the question of where all the jobs are that the current administration promised would result from the stimulus package. I'm wondering if these media professionals have had an original thought lately as they all seem to be echoing the same ideas. Much as I loathe saying it, thank heaven for Michael Jackson; the media's obsession with his death has blown the economy off the front pages. Even the starchy Wall Street Journal gives this story page space.

What is needed now is positive news from the manufacturing sector that has some depth to it. Not just bailouts and beneficial bankruptcies, but a rash of news about hirings, contract awards, and sales increases. The ILS Slivers of Light campaign has hit a dry spell; we haven't received worthwhile news items for several weeks now. Chalk it up to the summer weather if you will, which typically spawns a drought in company news, good and bad, as vacations thin out the ranks of newsmakers.

On another note, the award for interesting timing goes to a leading laser manufacturer who announced the resignation of their vice-president of research and development after the stock market closed for the long holiday weekend. It was totally ignored on Monday morning, rightfully so because there were no details available. But where were all those Blackberry toting journalists and market analysts on Friday? Sitting on a beach somewhere, blogging and twittering about Michael, I guess.

Wednesday, June 24, 2009

When did green turn blue?

I must have missed the weekly meeting of the Politically Correct Committee, or something, because I was more than a little confused when, at last week's Laser World of Photonics in Munich I saw large signs stating "The Laser is Blue" on backdrop displays in the exhibition booth of industry giant TRUMPF. I must have missed the weekly meeting of the Politically Correct Committee, or something, because I was more than a little confused when, at last week's Laser World of Photonics in Munich, I saw large signs stating "The Laser is Blue" on backdrop displays in the exhibition booth of industry giant TRUMPF. A naive request to see the company's new blue laser was met with smiles by the marketing staff. Not a blue laser I was told; the company has adopted a goal of making its lasers energy efficient, and a key component in their drive to assist their customers in becoming more efficient also. TRUMPF's new motto is "Powering efficiency – Blue Laser by TRUMPF!"

I asked if this wasn't what we in the U.S. call "green". Well yes, sort of, but German automakers apparently have latched onto the blue idea and passed it on to their vendors. And so blue is now the new green, I guess.

This was confirmed at the 9th International Laser Marketplace meeting, held concurrently with the lasers show, where Günther Braun, CEO and President of Rofin-Sinar Technologies, used the same term to describe social and business factors that will be one of the keys to a growing laser marketplace; pointing out that his company is responding with an expanded energy efficient product line.

Well I'm sorry folks, I'm just now coming to grips with all the ramifications, good and not so good about going green and I'm just not ready for blue. I checked out the web and found a Blue/Green Alliance which leads me to believe that this is a compromise because one or the other was stepping into territory already staked out by someone else.

Being a bit of a dinosaur I'll stick with "Green" for now, especially as I have just initiated planning for a "Laser Welding Turns Green" Webcast, organized by Industrial Laser Solutions, to be held in a few weeks. So if my European friends are concerned that I am green rather than blue, convince me otherwise. I guess I could always go teal then I can cover all bases.

Monday, June 15, 2009

Hoffnung in München

Munich is a lovely and vibrant city, perhaps one of my favorite places to visit in the world, and I am here as you read this. Munich is a lovely and vibrant city, perhaps one of my favorite places to visit in the world and I am here as you read this. Before you comment on the time of year and the beneficial weather we are experiencing as the cause for my euphoria, be advised that I have also been here in the dead of winter or when the infamous Föhn wind causes high temperatures that melt Alpine snow and produces conditions that depresses Munichers. The spirit and bonhomie of the locals always makes the city an inviting place to go. And the great beer isn’t a bad reason either.

Yesterday I was relaxing in the sun, nursing one of those great beers, observing the crowds filling the Marienplatz, gathering to see the famous Glockenspiel show atop the city hall. ILS has a heavy schedule of meetings at the World of Photonics show which is the reason I and my fellow PennWell editors are here.

A lot is riding on the outcome of this show and the attitude of the exhibiting companies. This is the big one, held every two years, so impetus developed here will carry through for the next 24 months. If activity is high, and we have no idea what the total attendance will look like, and the buying mood of the attendees is up, then we will all agree this was a great show. If otherwise, we will reassess our view of the next six months. I’m posting dispatches on the ILS website so check them out if you want my perspective on the show.

The first thing we will look for will be the crowds in the aisles of the exhibit halls. Traditionally German show attendees travel to shows on the first day so the big attendance day is usually the second. We already know that the concurrent Congress will be well attended as the hundreds of papers being presented always draw well. Unfortunately, a concurrent Congress makes it difficult for ILS to cover both events. I’d like to cover some of the sessions but I will have to spend most of my time on the exhibit floor as my trusted associate will not be with me this year due to travel budget restrictions. And a chunk of my time will be spent participating in the 9th International Laser Marketplace where I will present updated numbers on the world market for industrial lasers.

This year the show organizers have made an extra effort to attract users of industrial lasers by focusing on processing systems and expanding to an additional hall to accommodate these exhibits. The current economic situation however stifled larger participation and only a portion of this hall will be set aside for production laser systems.

Many of the throng in the Marienplatz were here for the World of Photonics, and it’s always good to see so many familiar faces. We all agreed that the success of this show will color our thinking for months to come. We hope (hoffnung) to leave Munich euphoric; if not, at least the beer was great as usual.

Wednesday, June 10, 2009

Could it be the end is in sight?

It's been three months since these weekly blogs started and I thought it might be interesting to revisit the first one, which dealt with a ridiculous idea that was presented to get readers smiling as they absorbed daily doses of bad economic news. It's been three months since these weekly blogs started and I thought it might be interesting to revisit the first one, which dealt with a ridiculous idea that was presented to get readers smiling as they absorbed daily doses of bad economic news. I introduced the DABometer Recession Gauge, designed to give a completely unscientific view of the daily state of economic and financial news that crossed my computer screen.

It is simple in concept--just count all the economic, financial, and business news items and stories that appear on my screen each day to see if these are positive (good news) or negative (bad news).

In the first few weeks the news was generally negative; that is, on balance more bad than good news was being generated. But slowly, as the weeks went by, the shift was to neutral, at least over a five-day-week period, and then, gradually positive, to the most recent days when it has been definitely positive.

Note, the measure is how I see the news, so that the current deluge of dispatches from and about Detroit are, I consider, positive as long as they deal with the survival of these companies. After all, the alternative to the bankruptcies would be disastrous. Now mind you, behind the Detroit news lurks a raft of bad news for suppliers to the auto industry, but for now, the news about their pending problems has been overshadowed by the General Motors/Chrysler headlines. I imagine that once the settlements are made the readings could shift to the negative as the reports start to come from those who monitor Detroit's supplier industries.

But on the whole, setting auto aside--and that's a hard thing to do--the news is better than it was in March and April. I don't know your political leanings, but you have to admit that all the activity by the current administration in Washington is having some effect, if nothing more than morale building. Setting aside politics, it looks like the end of this mess we are in is beginning to be visible--the only disagreements coming from the cognoscenti concern during which quarter this will happen.

Two months ago I couldn't find a serious reference to a bottoming out or upward turn. Today the news has one at least every day and a learned body of economists, who always are responding after the fact, have overwhelmingly decided the recovery start can be by the end of this year. The only obnoxious fly in the ointment is some body of "experts" who are self-appointed official arbitrators of the beginning and end of recessions. And they are stubbornly holding out for no relief for many quarters--I don't pay them much attention because they were the ones that announced the recession had started a year after we all knew it had.

So take a deep breath, readers. The end is now coming into focus, even though we all know, and are constantly being told by the hedgers including the President, that bad news will continue for some time. But many of the key indicators are up, or at least neutral, and the DABometer has a definite swing to the right, so much so that I am inclined not to check it every day.