Is an Acme-Gridley the mink coat of machine tools? A well made product that still does a great job, but nobody wants another one. In 2025? No. Not yet. On today’s podcast, Lloyd and I talk about our used machinery business over the last year. We saw one customer drop 20 million for five INDEXs to replace every cam screw machine in their shop. At the same time we sold machines to a multinational automotive supplier who is buying hundreds of Davenport screw machines—many older than me—I’m 45 by the way. ************* Listen on your favorite podcast app using pod.link. . View the podcast at the bottom of this post or on our YouTube Channel. Follow us on Social and never miss an update! Facebook: https://www.facebook.com/swarfcast Instagram: https://www.instagram.com/swarfcast/ LinkedIn: https://www.linkedin.com/company/todays-machining-world Twitter: https://twitter.com/tmwswarfblog ************* Link to Graff-Pinkert’s Acquisitions and Sales promotion! ************* Interview Highlights The Mink Coat Discovery This Thanksgiving, while going through my mother’s closet, my dad found her 40-year-old mink coat in perfect condition. Once worth $10,000, ChatGPT now values it at maybe $250 to a dealer. The discovery sparked an uncomfortable comparison to the cam screw machines in our stock. “Of course, mink means Acmes to me because Acmes helped pay for the mink,” Lloyd reflects. “These are very functional, valuable machines that were running good parts where we bought them and we feel they have value, however… we have to doubt ourselves.” He poses the question that haunts our business: “Let’s say it is 1-5/8” RB-8 Acme. How much money could somebody potentially make on that machine over the course of one year?” He figures $25,000 to $50,000, maybe more with the right job. “We would sell that machine in that price range. Yet we find no buyers. From an economic standpoint, to me that makes no sense.” A Brutal Year The machinery dealing business has been tough this year. While many of our customers’ businesses remained steady, indecision paralyzed buying decisions—particularly around tariffs. “One of the polls I did on LinkedIn asked if indecision because of tariffs caused them to not buy equipment this year.” Fifty percent said that was one reason why they had not bought equipment. And I will never forget this year’s deal from hell. ”We bought a machine in Germany, sold it to a company in the United States, and then BOOM—tariff. We went from an amazing deal to… I’m amazed we didn’t lose money.” I hate tariffs for a lot of reasons. This one was extra personal. The $20 Million Paradox The market presents striking contradictions. One of our customers recently got rid of 30 cam screw machines, selling them for “$2,000, $3,000, $4,000, $5,000 a piece,” then spent over $3 million each on INDEX CNC multi-spindles—$20 million total to replace their entire shop floor. “I was shocked,” Lloyd admits. “The question was, are they that much better than a 1” Acme?” I explain the economics: “They make an entirely different kind of part. They make a part that you could make a dollar from where you make 10 cents from an Acme part. Or they’re making $10 on that part, and on the Acme, they were making a quarter.” The new machines can handle medical parts, complex geometries—the kinds of high-margin work that justifies the investment. The Davenport Bet Meanwhile, another customer is betting the opposite way, buying hundreds of Davenports for facilities in Mexico and China. Today’s Davenports have a similar design to their original one from 115 years ago. The company is buying so many they’ve ordered Davenport’s entire production capacity for new machines while simultaneously buying used ones. Good ones, bad ones, anything they can find to rebuild. “There are many uses for small parts as bushings or as inserts or pins,” Lloyd explains. “And if you’re catering to a world market… they’re saying to themselves, we want to tremendously expand our capacity because we believe there is a market there and people have abandoned this market.” The China Question Lloyd sees a broader pattern: “The Chinese appear to be able to make good product, not maybe the quality of product being made in the United States or in Europe, but close to it at a fraction of the price.” He worries about Chinese companies producing chips “90 to 95% as good” as NVIDIA’s but selling for 30% less. “They’re able to make an electric car now in China and sell it in the Chinese market for under $10,000, and they’re selling them now in Germany for as low as $16,000.” “In my mind, we’re in a war with China—an economic war.” Gratitude We end where we began—with gratitude. “I get the privilege of working with you,” Lloyd tells me. And I tell him that I have a gratitude list every day in the morning, and he’s on it. Readers, ...
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