Happy New Year everybody!

On today’s podcast, Lloyd Graff and I reflect on the ups and downs of machining world in 2023 and give our thoughts about what we might see 2024. As you would expect, we discuss a number of topics in addition to precision machining, such as the US’s unpredictable economy, anti-semitism, and my intention to bite off more than I think I can chew and then figure out how to it chew later.

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Right before we recorded this podcast on Dec. 17, 2023, Lloyd and I prepared by listening to our end-of-year podcast for 2022.

A year ago, we didn’t really go out on a limb with bold predictions for 2023. We talked about our successful strategies in 2021 and 2022 for Graff-Pinkert’s used machinery business and how we planned to continue the same game plan going into 2023. After all, why change what was making a lot of money for two years?

So that’s what we did in 2023. We continued to stock more cheap, sexy/ugly cam screw machines to hopefully resell them to endusers who had the right talent and simple jobs to utilize them.

We also bought more CNC Swiss Machines, which had been such a hot commodity in 2022.

Finally, we continued our efforts to broker the sale of machining companies.

Stocking cam screw machines and Swiss machines was a bad gamble for the most part in 2023. We made some deals with that equipment, but most of them had small margins.

The used CNC Swiss business flattened out because the supply of new Swiss machines caught up with the backlog of the OEMs. Also, the firearms business tailed off which stopped many people from buying Swiss machines.

The demand for older cam screw machines plummeted partly because of slowed homebuilding that had resulted from rising interest rates. We continued to get the excuse from customers that “if only they had operators to run cam multi-spindles, they would buy one.” 

While we understand that the inability to find good workers is a legitimate issue, it’s an excuse that we are tired of. We ask ourselves why it is that some machining companies manage to have many people who want to run multi-spindles while others can’t find anyone? Why is it that some companies have workers who want to learn to operate several types or brands of machines, while other companies only have employees who are willing to run one specific model of machine? Why do some shops pay their employees significantly more money than others?

Graff-Pinkert found success selling modern CNC multi-spindles such as ZPS TMZ machines and INDEX MS machines. We sold them to automotive companies producing high precision value-added parts as well as companies who simply wanted to modernize their technology, whether or not they needed new CNC capability.

One prediction we made that I’m happy to say we got right was the growth of Graff-Pinkert’s M&A business. In 2023, we saw a lot of machining companies trying to gain new customers through acquisition. We brokered several deals in the precision machining sector and we collected many leads of future buyers and sellers.

As you might have gathered from the title of this blog, 2023 was a rocky year for Graff-Pinkert’s used machinery 

business. The first quarter was pretty good. The second and third quarters were painful. The fourth quarter salvaged the year when some good deals finally came through.

Many customers ask us our impressions of the current climate of the machining world. Logically, the companies we pole give us a variety assessments about their businesses. For the most part, machining companies told us they did well in 2023, particularly the ones who were running a diverse group of parts and had solid workforces. Some companies told us they had record years, while others said they were off quite a bit. Also many people referred to their business as “steady.” They were making parts, but their business was not growing enough to justify big machinery purchases.

Graff-Pinkert has some good momentum going into 2024, but that’s what we said in 2023. Right now we have some leads on some fancier CNC multi-spindles that could convert to some good deals. The old iron we have stored in our warehouse, hopefully will move soon, and some of the less desirable stuff will be scrapped.

In 2024 my plan is to aggressively try new things both in the machinery business and the podcast. I’ve taken on a few new philosophies recently that I tell myself every morning. The first is to “bite off more than I think I can chew and then figure out how to chew later.” When I’m intrigued by a new idea that seems like a great opportunity I’m going to try to go for it, even if the game plan is a little fuzzy or maybe it just seems hard to pull off.

The other philosophy both Lloyd and I have been saying lately is that “we don’t have problems, we have puzzles.” (I stole that from Quincy Jones).

Most problems are solvable, so we should not let them scare us or keep us down. We’re taking a step back and considering different approaches, and we’re constantly looking out for serendipity.

Finally, we ended the podcast by saying how grateful we are for the blessings in our lives. We’re grateful for our close family, and we’re grateful for our prosperity. We’re also grateful we get to make a difference in the world by connecting people in the machining world through blogs and podcasts. One other thing Lloyd and I are grateful for is that we get to work with each other. We try to be constantly mindful that a father and son regularly working together well is a precious and rare thing that doesn’t come along very often. 

Now that I’m a father (for almost two years), I have an extra appreciation for how cool that is. You never know, maybe one day it will happen for Abe and I. It think it would feel incredible.

I’m excited today. Let’s all take a big bite in 2024, I think it will be a juicy year.

Questions:
What are your favorite memories of 2023?

What surprised you in 2023?