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.