Any questions?
Our comment  for this is three words recalled from Mrs. Ponte’s Latin Class: ‘res ipsa loquitor.’
Translation: ‘The thing itself speaks.’
Data:  Federal Reserve Bank of St. Louis; Manufacturing Employees (MANEMP)/ Total NonFarm Payrolls; All Employees (PAYNSA) 
Original source FRED
We found it Here. (Paul Kedrosky Blog)

Sometimes the wisdom is just undeniable.
I spend quite a bit of my time writing what I hope to be interesting articles for our many readers. Knowledge retention and thought leadership posts for our member companies.
Written pieces that give the readers ‘Tools They Can Use.
If I’m  writing, I’m  probably not spending a lot of time reading…
So when I got a copy of ph Horn’s latest  World of Tools 2/10 magazine, I was captivated by the following comment made by Lothar Horn, Managing Director.

Lothar Horn

“How can our tools best be used so that the customer can obtain the maximum benefit from this investment?”
At PMPA, we’re pretty familiar with the concept of  ‘Tools You Can Use’– in fact we use it as our Tagline.
But we were really interested in the answer that Mr. Horn gave to his own question:
“…we have developed new products, strengthened support and service and expanded our portfolio in the direction of complete machining.”
Let’s see, how can we as an industry face the challenges of the current market situation?
 1) Use the tools we have to develop new products,
 2) Strengthen support and service to our customers,
 3) Expand capabilities toward complete solutions…
Couldn’t have said it better myself!
You can download the Horn World of Tools Magazine at this link ; just click on the pdf download link for the 2/10 issue.
If this was a quiz, would you have gotten 3 out of 3?

Our July 2010 Business Trends Report provides hard data that the precision machining industry is maintaining “A New Normal.”

Sales index down 10 points outlook for next 3 months positive.

The three month outlook for sales, lead time, employment and profitability are all quite positive as our industry passes the fourteenth month above the May 2009 low.
We are encouraged that our index did not drop further in July, a seasonally weak month for our industry.
Average length of first shift is up to 43.1 hours, more than 5 hours above the 2009 average.
94 percent of participating shops expect profitablity to remain the same or improve.
Those expecting sales to remain the same or increase made up 90% of our respondents.
The last shop owner I spoke with said that he was “Busier than heck and can’t ship parts fast enough.”
We suspect that part of his problem is getting the raw materials and tooling that he might need when he needs it…
How about you? Are you busier than heck? Are you still in the range we are calling the New Normal?

When you have been in manufacturing long enough, you begin to recognize a few common themes. Four buckets, if you will, for the problems to collect in.
When it comes to Engineering Changes or Process Changes, here are the 4 buckets that come to my mind.

Mistakes when considering changing a process fall into 4 buckets

Bucket Number 1– Claiming savings that don’t really exist. I also call this Green Belt Fantasy #1, and Boss Delusion # 1. Typically the savings or “improved performance” aren’t sustained if they show up at all. The academic name for this bucket is the Hawthorne Effect, or the “Observers Paradox.”
Bucket Number 2– Ignoring labor fringe benefits (and overhead.) This can easily be 20% or more per labor dollar and just because the accountants claim they have it figured in doesn’t mean they do.  Overhead is a dumpster itself of hidden problems, buried corpses -err, costs-  that always has its own persistent odor.
The fraternal twin of this is failing to account for unanticipated maintenance costs. I call this bucket the Iceberg Bucket because you only see a tiny part of the real problem.
The Iceberg bucket.
Bucket Number 3– Using production time estimates that reflect substantially different rates of work. The best example of this that I can recall was in a movie where the  producer had a time study of how a chair was being painted (by brush) so he could low ball the quote. (He needed a bunch of chairs for his production.)  After the producer got his lowball price accepted,  the painting contractor picked up his signed copy of the contract and hollered to his crew “SPRAY EM!”  In our industry we wouldn’t dream of using setup time estimates for a cam machine on a CNC  machine, but…
I call this  Bucket Number 3 the Apples to Oranges Bucket.
Apples to Oranges

Bucket Number 4 is the most trying of all.  We all like to think that we make decisions on the basis of cold hard facts and rational decision making. But research with people whose brains have been injured  have shown that their purely cold hard rational decisions with no emotional inputs almost always tend to be poor ones. Our mental processes have a lot more adrenalin and other “chemical inputs” than we will admit. If we really want to make a project happen, we somehow manage to ignore, under weigh, or fail to consider unquantifiable critieria, especially relating to human performance issues of those affected.  Employee fatigue, effort required, distractions effect on performance, and job disatisfaction. I call this bucket The Invisible Bucket because it holds the  costs of change that you cannot see and cannot measure- disruption, resistance to change, adjustment time, learning curve issues  etc…  All of these are  invisible at the time when you most need to see them.
The Invisible Bucket!

Worker acceptance of change is difficult to predict. It is even more difficult to manage.
But the key in my experience to eliminating all of these buckets is to get the employees that have to do the work a contributing role on the team to implement the change.
Become the change you wish to see”  and “The easiest way to deal with change is to help create it”  are 2 truisms that can help your people  get involved and so avoid dealing with the 4 ugly buckets described above.
How do you avoid tripping over these buckets in your operations?
4 Buckets
Apples to Oranges
Invisible bucket (I did the photoshop)

OK, I ‘ll admit I’m really a sucker for cool science demonstrations.
Just like the current administration is a sucker on  currency manipulation by the Chinese.
Sorry about that.

You can do this too- sort of.

So while you and I probably can’t afford to rent the high energy equipment the folks at Popular Science used for their video, you can get instructions  that  describe how you to can capture Lichtenberg patterns of static electricity. This   Pop Sci Site  tells you how to make cool lightning (static electricity) images using some plastic sheet, a nail, and your favorite source of static electricity :
Or as an alternative, you can shuffle your feet on dry shag carpeting.

I think it will be a great project for this winter when everything that I touch yields a spark to my touch.
Cat photo from static electricity blog here .
Send me your photos of your static electricity demonstrations and I’ll post them here.
Warning: Do not use the hammer and nail on the Cat!

The newswires were all abuzz that China had slipped past Japan to become  the number 2 global economy.
Oh what they were saying!
Here are a couple of facts to help you get some perspective on this China Economic Growth ‘Miracle.’
1) There are over 65 million VACANT housing units in China. Sounds like a bubble to me.
2) The price of land went up almost 9 fold in Beijing since 2003, just 7 years. Here’s the graph:

What goes up and never comes down?

3) While the Chinese stimulus actually built things, many of those things sit empty.
South China Mall. Room for 2100 stores. Vacant

I happened to pull these facts from a blog called Market Oracle, written by James Quinn. He is citing work from Casey Research, which is documented as to original source on each slide. But I have been watching this “magic act” since I visited China in 2003.  Almost half the world’s high rise cranes were said to be there at that time. And yet right behind our hotel was a three year old building, brand new, just like the South China Mall picture above, and also completely empty…
If the last U.S. financial crisis was a bubble made from the thin film of debt financing- WHAT WILL THE BURSTING OF THE CHINA BUBBLE LOOK LIKE GIVEN THESE FACTS?
If what I remember from my economics classes  is even half right, WAIT TILL YOU SEE WHAT THE CHINESE CURRENCY EXCHANGE RATE LOOKS LIKE WHEN THIS BUBBLE BURSTS…
And about those ever skyrocketing raw materials prices based on Chinese demand to build vacant buildings, what will happen to prices for those materials when they stop building???
I am impressed at how the Chinese authorities have applied some of the best aspects of a capitalist society to achieve remarkable growth.
And yet, I can’t help but wonder if they haven’t also applied some particularly bad ideas about managing an economy, ideas that could create the mother of all bubbles.
You just kind of know whats coming next...

Graphs and intelligence from Casey Research accessed through Market Oracle.
Bubble gum photo credit.

By retarding transformation rates, moly improves the hardenability of its alloy steel grades.

Believe it or not, its name is from the Greek word for lead.

Molybdenum is an essential micronutrient, but large doses can be highly toxic. Fortunately, we don’t eat our alloy steels.
Molybdenum (“moly”) is added to constructional steels to

  1. Improve hardenability by slowing the transformation (moving the nose of the curve to the right);
  2. Reduce embrittlement during tempering
  3. Enhance the creep strength  of low alloy steel grades at higher temperature,
  4. Add resistance to corrosion.

Moly does this in very low quantities, and so it is truly a “synergistic” alloying element. Typical moly additions in constructional steels are around 0.10-0.60% by weight. Moly analysis typically runs 0.20-0.30 in the low hardening 40XX grades; 0.15-0.25 in the 41XX series of alloy steels; and 0.20-0.30 in the deeper hardening 43XX and 48XX steels.
Moly has been reported in Japanese swords as far back as the 14th Century, but its first major military use was for tank armor in World War I. The French firm  Schneider & Company made moly armor plate which at 25 mm was able to stop a direct hit from a shell. The prior manganese armor plate at 75mm thick was not so impervious and  the reduction of steel mass by about 2/3 made the tanks with moly armor much more mobile (speed and manuverable) in combat. Today moly is an indispensable part of many aerospace and high temperature applications including rocket nozzles.
While Moly can be the only alloying element added (40XX steels) it is also used in combination with Chrome (41XX) Nickel (46XX and 48Xx, or in a triple alloy combination  with Chrome and Nickel (43XX or 86XX) as well as other grades (87XX, 88XX,  and grade 9310 come to mind).
But where we see moly in our shops is in our M- series tool steels. That M prefix stands for Molybdenum, which gives these tools steels their characteristic high hot  hardness.  Moly content in M series tool steels ranges from 4.50% up to 9.50% by weight. It is the ability of these steels to resist softening at high temperatures that makes them so useful in our shops at production speeds and feeds.
The moly tool steels also have a tendency to decarburize so careful grinding and attention to details in heat treatment is critical in toolmaking and sharpening.
For more info on Molybdenum, Click on the Mindmap for Molybdenum.
Photo of moly metal.
Trivia: the first commercial heatof Moly High Speed Steel was by Universal Cyclops in 1931. Grade AISI M1. They called it Motung for, you guessed it, MOly TUNGsten.

Tonight, August 12, 2010 is the peak of the Perseid Meteor Shower.
For a great photo of a Perseid meteor from my friend George Gajdos, click here.
The Perseids are named for the constellation Perseus, from which they appear to radiate, though more correctly they are remnant debris left over from the comet Swift-Tuttle.Frequencies of up to 45 sightings per hour are possible for us in the northern hemisphere. There are some great facts about this meteor shower HERE.
Tomorrow night, August 13th will also be a great night for viewing if it is clear.
So what do meteors have to do with precision machining?

Jahangir dagger forged from meteorite.

Ultimately machining relies on tools and tooling, and meteoric iron was an early “tool” material.
What we take for granted today,  (Steel) is a commodity, abundant and worthy of fighting in a  court of law over regarding “dumping and trade cases” was not so very long ago, precious, rare, and literally the best material on earth which fell out of the sky…Truly a material of heavenly origin.
Here is the story of the Jahangir Dagger from the Smithsonian as quoted from Wareham Forge blog:

“At dawn a tremendous noise arose in the east. It was so terrifying that it nearly frightened the inhabitants out of their skins. Then, in the midst of tumultuous noise, something bright fell to the earth from above….”
From the Jahangirnama (1605-24)
Thus did Emperor Jahangir describe a meteor that landed within his kingdom in April 1621. His fascination with unusual natural events—and his power to harness their aura—is revealed by this dagger’s blade, forged from the glittering meteorite. Jahangir further noted that the blade “cut beautifully, as well as the very best swords.”
  So if the skies are clear in your part of the world tonight, and you get to see some streaks of the meteors from the comet Swift Tuttle lighting up the sky, I hope they remind you of a time where the steels and irons and alloys that we take for granted were at one time precious, rare, and “sky magic” of the very best kind. Good viewing and good machining to you as you use your tools to best purpose.


 China Trade Surplus Hits An 18 Month High
The U.S. Customs bureau reported this week that China’s trade surplus hit an 18-month high in July as exports rose and import gains slowed, which added pressure on Chinese officials to allow faster appreciation of the yuan.  According to a survey of 29 economists by Bloomberg News, the trade gap surged 170% from a year earlier to $28.7 billion.  Exports advanced 38.1% to $145.5 billion, while imports increased only 22.7% to $116.8 billion. 
July Chinese Imports into the US Still at High Levels.  Hitting a 14-month high, Chinese steel imports into the US in July grew 21% from June (based on licenses), following June’s 35% increase, continuing to outpace overall imports into the country.

Hey, Any body paying attention to China trade and currency issues?

 The deficit on international trade in goods and services was $41.5 billion in June or 3.4 percent of GDP, According to Peter Morici.The trade deficit is a huge drag on economic recovery and jobs creation.In the second quarter overall, the imports grew so much more rapidly than exports that the growing trade gap subtracted 2.8 percent from growth.
But for the increase in the trade gap, GDP would have grown 5.2 percent instead of 2.4 percent. At that pace, unemployment would fall by 2013 to less than 5 percent, the level accomplished the two years prior to the Great Recession
 The United States is doing too much buying but not enough selling.
Oil and consumer goods from China account for nearly the entire trade deficit, and without a dramatic change in energy and trade policies, the U.S. economy faces unemployment around 10 percent indefinitely.
To keep Chinese products artificially inexpensive on U.S. store shelves and discourage U.S. exports into China, Beijing undervalues the yuan by 40 percent. It accomplishes this by printing yuan and selling those for dollars to augment the private supply of yuan and private demand for dollars. In 2009, those purchases were about $450 billion or 10 percent of China’s GDP, and about 35 percent of its exports of goods and services. 
This year,the trade deficit with China reduces U.S. GDP by more than $400 billion or nearly three percent. Unemployment would be falling and the U.S. economy recovering more rapidly, but for the trade imbalance with China and Beijing’s protectionist policies.
In June, China indicated it will adopt a more flexible exchange rate policy, but it has made clear Americans should not expect a dramatic change in the value of the yuan.

Wake up Washington. Its the China Currency and balance of trade. St*pid.
Comments from Peter Morici, various press reports, and our favorite Steel Analyst, Michelle Applebaum.