Scott Walker Mitsui Seiki

The trail of SME is discovered!

Love DeVlieg JIg Mills old school! 

Scott is Mr. Accuracy and Hard Milling expert!

Transcript

SPEAKER_02 0:07

Hello and from Cincinnati, the capital of metalworking machine tools, I'm Bruce Tillinghast, and welcome to the podcast, A Machine Tool in the Men, the audio recordings where we discover, share, and preserve the stories of the men who built the backbone of modern machine tools. I'm your host, Bruce Tillinghast, the Vice President of Strategic Content. Each episode, we sit down with leaders, innovators, and unsung heroes of the machine tool world, capturing their experiences, their passion, and the lessons forged along the way. This is our industry's history, told by the voices who lived it. On this episode, I'd like to welcome Mr. Scott Walker, the chairman and past president of Mitsui Seki USA.

SPEAKER_01 0:59

Welcome, Scott. Thanks, Bruce. Thanks for having me on. It's been fun chatting with you uh over the last couple of days to put this together, and uh, and I look forward to sharing information with everybody. Good. Uh I'm an engineer, as you know, and it's kind of in my blood. I'm a third-generation manufacturing engineer. Uh it goes back to my grandfather, who uh was the founder of the Detroit College of Applied Science. They were down on Eight Mile in Detroit, where I was born. And uh as the college got up and running, he started the ASTME, which today is the SME, so he was one of the founders.

SPEAKER_02 1:41

Wait a minute. Now, let me disinterject. You're saying SMA. Uh the he was the founder of the SME, right?

SPEAKER_01 1:49

He was, yes, correct. He was one of the founders of the SME. There was a group of them that did it. And the reason that they did it is they were trying to establish standards in the industry. And, you know, back then in the in the late 20s and 30s, you know, the machinists learned the trade by doing. There was no science behind it. And there were no standards behind it. Everybody was doing their own thing. Each tool builder had their own taper, for example, and this kind of stuff. So the intent was to try to standardize the industry. In fact, the archives that I gave to the SME uh about 20 years ago had all kinds of letters in there. And one of the letters that was quite interesting was a letter from Henry Ford to my grandfather that said, I am not happy with you. You guys are starting a union, and this is not acceptable. And my grandfather wrote back, that's not true. We aren't starting a union. We're trying to standardize the manufacturing industry. So that kind of started the math of making things, I will say. And my dad went to college there, met my mom, and she was a secretary there. Lo and behold, uh, they get married. Uh, my older brother comes along, I come along, later my uh younger sister comes along. And as we were growing up in Detroit, dad was a plant manager at the Chrysler press plant. And he, you know, would go off and you know, they would make you know side panels and bumpers and all the kinds of stuff that you'd stamp. And one of the guys that used to call on him was a guy named Charlie De Vleeg. So De Vleague was a uh machine tool company, a premier machine tool company at that time. Uh the Model 92 was kind of like a bridge port for anybody that knows what those small machines are. And Charlie was quite a character. He had developed uh a machine that could bore and hold a thousandths on a 36-inch bar style machine. They sold them like popcorn, made a ton of money. Horizontal machine or vertical? It was a horizontal machine. Okay. And so it had a y-axis, it was uh and uh a table feed in. The column was fixed. And I can remember as a kid, seven, eight years old, you know, this was back in the four martini lunch days. So every all guys were drinking martinis all the time. And Charlie and Dad used to sit out back, and mom would make the martinis, and I would carry them out gently as Charlie would yell at me not to spill them because they were in those big round martoon glasses, impossible to carry. And Charlie was looking for distribution out in Connecticut. Connecticut was a pretty hot market in the 50s and 60s. You had a lot of manufacturing in this in the state of Connecticut. So dad uh had been hired by Charlie to be the sales manager at the Vleague. He worked there for a couple of years, and then Charlie said, Look, bud, why don't you go to Connecticut and open up a distributorship? So lo and behold, you know, I'm about nine, ten years old, pack it all up, sell everything in Detroit, and move to Lichfield, Connecticut. And dad buys a farm, it's got 125 acres, a house that was built in the 1700s. I think he paid $24,000 for it in 1959 or 60, and uh off we go. They start the distributorship, and the market is booming in the 60s. And back then they had all kinds of gimmicks, and one of them is they had a Volkswagen bus, and the Volkswagen bus had an office in it with a secretary. So they could call on somebody, go in, look at what the requirement was, come back out to the bus, the secretary would type up the proposal, and they would immediately carry it right back in, which was unheard of in those days. And the license plate on this bus was uh uh GTFO. Go get that effing order. I won't use the proper word because we're on a podcast, and that was like the family joke. Every time this bus would pull up in front of the farmhouse, dad would come out, GTFO, you know, and off they would go and and and they would go do what they needed. And during that time, you know, I was looking at machines. They would have stock machines and they were bringing them in. And dad uh needed somebody to help drive him to IMTS in 1965. So I'm like 15, I don't even have a driver's license, but I'm a farm boy, so I can drive. So we go on out, go on out to IMTS. W what is IMTS? Can you tell the audience? It's the International Machine Tool Show. Back then it was held every five years in Chicago. This particular one was uh down by uh where they used to butcher cattle and stuff. It was before the McCormick place. Stockyards, okay. Stockyards. And so uh I walk into the building, dad says, I'll see you later, because he's got to work. And I am absolutely amazed that when I'm looking and I walk over to this one machine, and it I know today what it was, but it was a future mill. It was a planar mill. It was a bridge-style machine, it had a 36-inch diameter cutter on it, and it was ripping through the metal. They had these big slab ingots of steel, and they were flattening the top and the bottom of them so when they put them in the tandem mills, they could make sheet metal out of it. I'm standing here watching this thing. It's probably an inch and a half depth of cut. There's blue chips coming off this thing like popcorn. There's guys with shovels shoving them into the bins. And as I'm standing here watching this, I'm thinking, my God, what are they gonna do with all these little springs? I didn't realize that the finished component was on the table. I was thinking the chips were the parts that they were making. Good. That's that's how uh well dialed in I was into the machine tool business. Long story short, you know, we plow through the 60s, you know, they make a healing. We have a company plane, they have uh houses on the vineyard, they have a sailboat, they have this, they have that. It's uh the late 60s, time to go off to college. I get accepted at Wentworth Institute in Boston, which is a technical engineering school. I get into the program, and dad goes bankrupt. This is during the Vietnam War. I'm in college to stay out of the war. I go to college year-round because if you stop during the summer, you might get drafted. I plow on through, I do everything I can to survive. I drive drive cabs. I worked at the two o'clock lounge down on the docks, which was a strip joint where all of the sailors would come in, and I was a bartender. And I did whatever I had to do. Long story short, I plow through that. I get out of college, I have a mechanical engineering degree and an aerospace engineering degree, and there's zero work available for an engineer because now it's the early 70s, gas lines a mile long, OPET shut down the oil spigot, and uh I have college debt. What am I gonna do? I go to my grandma, she uh puts $4,000 in the bank, and uh that I use for a down payment to buy a bar called the Pig and Whistle Pub. I borrow uh $8,000, we pay $12,000 for the bar, my girlfriend and I, and we get to the bar, it's a bunch of crazy bikeys that like to get drunk and is this pig and whistle tello? Pig and whistle, Burrville, Connecticut, right next to Torrington, Connecticut. Okay, all right. And um we take all the bikes out, I go down to the local uh college and hand out little free drink coupons to all the cute girls. All of a sudden they start showing up, and we start a Dart League. We start I start playing darts. Of course, there's no revenue at the bar at this time, but because I'm playing darts all the time, I get pretty good at it. I start winning tournaments. I could go off to Cleveland, for example, and pick up a couple of grand, pay my expenses. And and lo and behold, as we start to go along, the the dart business and the leagues in New England start to grow like crazy. Believe it or not, my partner and I win the Nationals uh Dart Championship. And now all of a sudden the pig and whistle pub is you know in local newspapers. We had a write-up in the New York Times. The bar is now worth $30,000, and so my uh girlfriend and I sell the place and get out because it was a tough business to run.

SPEAKER_00 10:13

Now it's time to get a real job.

SPEAKER_01 10:16

And a recruiter uh that I had been contacting me said there's an opportunity at Pratt Whitney Machine Tool.

SPEAKER_02 10:26

Where is Pratt Whitney?

SPEAKER_01 10:27

Pratt Whitney was in West Hartford, Connecticut. And it was a big company. They they were a big machine tool builder in their time. In fact, they had a machine called a tape omatic, which was an optical reading tape machine that would position X and Y. Tape would feed, an optical signal would stop at X and stop at a Y position, and the guy would manually drill a hole, and it was to make jig plates. They sold about 9,000 of these machines. They were everywhere back in the uh 40s and 50s. And then they started to build uh machining centers. And uh, you know, I got hired basically as uh an apprentice, and I went on in and I started to learn how to punch mylar tape, I started to learn how to machine, I started to run lays, I ran grinders, surface grinders, you know, they just bounced you around the shop and hoped you didn't bust too much stuff. And uh as time went on, you know, I kind of enjoyed it. I it was fun making stuff. I actually retrofitted the first Fanic controls on some Pratt Whitney machines. They were using old TI 860s with a uh the Nixie tube interface, if anybody knows what those are anymore. Um and then my first promotion came when a serviceman unfortunately passed away and they needed a serviceman. So next thing I know, I now I got a car. I'm driving around clueless, trying to get machines fixed all over upstate New York and New England. That was the territory I was responsible for. And uh lo and behold, my next promotion comes because one of the old sales guys who was in New England passes away, and now I'm a sales engineer. And I got a company car and I'm clueless, and I'm driving around and trying to get into companies. Fortunately, because of my service work, I was able to get into some of them. Tell you kind of what it was like to be a salesman back in the in that time. Your company car was your office, your driver's seat was your office chair. The car was stuffed full of brochures, manuals, drawings, all of the stuff that you needed to be able to answer any questions that could come up when you were making it. And your communication device was a payphone. So you would back then drive up to a payphone if you could find one where other salesmen weren't sitting, and you would take the phone and you would bring it through the window on the driver's side. You put a dime in and you would start making phone calls. You would call the people you were getting ready to go see in an hour. You would try to set up schedules. And when it was really, really cold out, you would roll the window up to keep the heater on so you didn't freeze to death. So one time I'm in there and I'm doing this and I'm writing and I'm going, and I realize I'm kind of late. I got to get going. I put the car and drive and drive away, and the phone takes the window right out of the driver's side of the car, busts it. So I tape up some cardboard, I drive back to the office, I tell my boss, a guy named Dick Wesh, was around for a long, long time, what happened? Someone broke into the car, and uh, you know, company just gets me a new window. He says, No, no, no problem, Scott, we'll take care of it. The second time I did it, Dick, I go in and I say, Dick, someone broke in my car again. You know, I need the company to pay for the window. And he looks at me and goes, Scott, next time, figure out to hang up the phone before you drive away. So obviously I wasn't the only idiot who did this kind of stuff. But that was that was fairly typical back in the day when you were you know pounding around trying to get in to visit customers and stuff like that. So fast forward, I'm doing pretty good. I'm selling machines. And I sold a couple of Star Turn 1800 lathes to a company called Dressor Rand in Painted Post, New York.

SPEAKER_02 14:12

I know that I've been to that plant.

SPEAKER_01 14:15

So during that time, we we had been purchased by Colt Industries. Pratt Whitney had had gone through an acquisition, and Irv Dennon, who was the past president, a really solid machine tool guy, been in the business forever, was replaced by a guy named Buck Cody. Buck Cody was a financial guy, not a machine tool guy. So Buck was looking at cash flow constantly. So I'm out running around, these 1800 just are getting built on the floor. Buck decides to ship them before they've been tested and finished, assembled.

SPEAKER_02 14:48

Happened in an American machine tool company before. This is the first time. Keep going.

SPEAKER_01 14:53

They ship the machines out to uh painted post. They show up, you know. Normally an 1800 could be installed up and running within two weeks, and that's what the end user was planning on. Week seven, problems. Week eight, they are so upset, they call me and say, get these machines out of here, we're gonna buy something else from somebody else. They go, no, no, no, no, wait. I'm gonna have the president come out with me and we're gonna sit down, we're gonna solve this problem. Cody and I get in the car, we drive our four hours from West Hartford to Painted Post. We go on in there, we get reamed. However, we salvage it, we we say we're gonna put more resources on it, we pay them for their lost revenue from the parts they were supposed to be making during all that time. We get back in the car, and the entire ride back, all I hear is Buck Cody yelling at me about what a lousy job I had I've been doing managing our customers. And at that point, I'm thinking, I'm out of here.

SPEAKER_02 15:52

Well, hold on. Buck Cody, yeah, Buck Cody is as I saw no, is still alive, living in Naples, Florida, and he worked at Carny and Trekker for four years at the end of his rope.

SPEAKER_01 16:06

Oh no, okay. Well, I didn't realize he was still around.

SPEAKER_02 16:09

I follow people. Interesting.

SPEAKER_01 16:11

Okay, I'm shocked. So um I come back and and I'm upset. I I like I don't need this. You know, I I need I need people that are gonna support me, not people that are gonna throw me under the bus. And during this time, there was a guy named Chuck Maglio who kept calling me and said, trying to recruit me away. And he was a recruiter, and he's telling me about this outfit down on Long Island, um, and down in Melville, Long Island, and it's called Mitsui Machine Tool Sales, MMTS. And it's an importing operation. Mitsui and company owns it, and they're bringing in Japanese machine tools. And they're bringing in Okumas, OKKs, Pessoi's, which were tracer mills, OMs, which are VTLs, and Mitsui Sekis, which is jig boars and jig grinds. And that's kind of like a lineup that a machine tool distributor would like to have. So I go down there, I interview with a guy named John Hendrick, and John hires me. He hires me as the product manager for Okuma.

SPEAKER_02 17:09

God bless John Hendrick, just passed away. Wonderful guy.

SPEAKER_01 17:13

Wonderful guy. And so John was an interesting boss. Uh, I was a young guy, and he was tough. And he uh would uh would task me with stuff that I just had never done before. For example, he he made me stand up in front of a hundred distributors and put on a presentation and do it with customers. And as soon as I got comfortable doing that, he moved me to sales manager. And as soon as I got comfortable with that, he moved me to engineering manager. One of my jobs at engineering manager was the first job that I had to help design a new machine. And I was assigned to come up with uh what distributors wanted, so I traveled all around the country, met with all the distributors. What would you like to have? We would like to have a small universal lathe. You know, it needs to sell for about $80,000, which means we needed to build it for about $30,000. And uh it uh needs to have all of these features. So I came back, I sat down with the engineering group, and we came up with a product called an LB15. An LB15 was a small universal lathe, came in at around $86,000 for the market, and it looked good. And the way we were going to build them is we were going to build them like a car. There would be a group of guys that would work for four hours, indexed to the next lathe, the next lathe, the next lathe, and build them so that we could spit out a lathe every four hours around the clock.

SPEAKER_02 18:38

Where was this? In Japan or in the US?

SPEAKER_01 18:41

And they had built the new plant down in Aguchi across from the Mazak plant.

SPEAKER_02 18:45

Okay.

SPEAKER_01 18:46

We now have a big meeting. We bring in all of the distributors, and we my job is to present the LB15 to everybody. This is what you asked for. And John Hendrick had given me a list and said, Scott, we need them to buy these machines because they're coming off the line. So here's the list, and you need to tell each distributor how many stock machines are going to take. Now you got to understand at this particular time the market was in the toilet and they had stock machines they couldn't sell. And I stood up in front of that group. I said, Jim Ellison, you need to take eight. Jane Haley, you need to take four. Joe Yoakum, you need to take. And they were looking at me like they're going to kill me. And they came up after, I can't take these machines, and John, and they said, Well, John will fire you if you don't take them. I think that day we sold 72 machines to the distributor. And they start coming in and they start going out, and these things start selling like popcorn, and four or five months later, the distributors are beating me to death because we aren't building them fast enough. And I'm on commission. I am killing it. My wife thinks I'm a drug dealer. She has never seen that kind of revenue come in through a paycheck before because we went from selling six, eight machines a month to 30. It was insane. So we're bubbling on down the road. Life is great. And I stumble into an opportunity with a company out in Muskegon, Michigan to rebuild machines, and I can become a part owner. I got money. Let's rock and roll. I pack up, quit IMTS, uh MMTS, and pack up and uh go off to Grand Haven, Michigan, show up at the plant, and we're rebuilding heelds and doing a lot of work in the grinding business for the bearing companies and all of this, and stumble into um a rebuild project for US Steel. Well, what's the name of this rebuild company? So it was Lions Machine and Tool, and we changed the name uh to Lions Integrated Systems. And we we're not big, we're small, but we're but we're we're coming down the road.

SPEAKER_03 20:56

Yeah.

SPEAKER_01 20:57

So we come up with this uh idea for U.S. Steel to build this roll grinder. And let me give you some background on what a roll grinder is. So if you go into a plate mill where they an ingot comes out of the furnace red hot, uh-huh, and it comes down the line, and there's these rollers. And this this these rollers will squeeze this ingot down to um what they call a hot roll, uh, which is down to about 125,000th uh thick gauge, and at the end it coils up hot, red hot, on a 35-ton coil. That's called hot roll. And then when the coil cools, they run it down a cold line and they make it into sheet metal and different all different gauges. And the rolls that they use for hot or cold rolling wear out. So they pull them out of the line and re grind them. They re crown them, they take stock off so that they don't spall out and all this kind of stuff. And all of the roll grinders at this time are manual, the manual roll. Grinder operator can grind four to six or twelve a day. He's kind of in control of the project, and that's a unions, and so these guys run the plant. Absolutely run the plant. Being a machine tool guy, and all of us being machine tool guys go, we can automate this. We can put an in-process gauge on it, we can put a CNC control on it, push the button, make the roll automatically. We can even put an FMS on it and load and unload rolls. So let's build one and show you we can do it. And we do. We build it around the GE2000 control. We spend about a million dollars on development that we don't have, and GE2000 control goes away. So there's a million down the rat hole. But the machine worked. And all of a sudden, we start selling these rebuilds like popcorn. So what do we need? We need another plant. What do we need? We need more foundations. What do we need? We need more people. And while all this is going on, future mill comes along and says, hey, we want to get out of the machine tool business. We'll give you future mill if you build this order that we have for the Abram Tanks guys.

SPEAKER_02 23:11

So Abrams tanks. Tell me about Abrams Tanks.

SPEAKER_01 23:15

So Abram Tanks, uh, this was a military job. The job was to mill the side panels out of a really, really tough steel that protects the tracks so that you can't shoot them off the tank.

SPEAKER_02 23:27

And this is based in Lima, Ohio.

SPEAKER_01 23:30

Lima, Ohio. And so they um take, we we take it's a four-machine order. We have no room. So what do we do? We get another building. What do we do? We put in more foundations. What do we do? We spend exceedingly amounts of money that we don't have. The cash flow that is coming in and the cash that is going out is so far apart, we are literally living week by week. And I'll tell you uh one quick story. We have a big project at Ravenswood, one big role grant, and we were getting progress payments on this on all of the machines that we were doing. Friday, we payroll was Thursday. Friday, we have zero in the bank. Our line of credit is overdrawn. I call Ravenswood and ask them, where's that check? You know, no, we're gonna put the check in the mail on Monday. Hey, guess what? I'm actually gonna be in your area on Monday. Sunday, I get in the car, I drive from Western Michigan all the way to Ravenswood. I sleep in the car, I get up that morning, I pick the check up. Thank you very much. It's about $165,000, and I drive all the way back to Muskegon to the bank. Where was Ravenswood? West Virginia. So I drive it to the bank and I walk on in and I go, here's the check. I need the money in the checking account because payroll's coming up on Thursday. We don't have any money in the checking account. They go, Scott, you know, checks take two weeks to clear. I said, Come on, this is Ravenswood. You know, this is a big aluminum mill. This is a good check. Pete Baleen was the guy that was there. He puts the check in, we we cash it, we're alive for another week. That that's what it was like. And our company motto was how could so few owe so many so much? So we're we're growing like crazy. We just don't have any cash. And lo and behold, out of the blue comes a stock broker, a guy named Charlie Bradley. He's buying up companies. He bought up the Vleague, he's buying up Acme Gridley, he's buying up this, he's buying up that. He sees us and he wants to buy us because we got the sizzle, we got the technology. And he says, this will be great because it'll motivate the bankers to grab the stock and go. And lo and behold, we sell the place to them and they go public.

SPEAKER_02 25:59

This is KP, the company in New York, uh holding company, or who was it?

SPEAKER_01 26:04

Yep, it was a holder company. And and they they they take the Vleague Bullard Public, they put it out on the stock market. And so a new boss comes in. Sunstrand was part of this, a new guy comes in from out of nowhere, a guy named uh Vic Sappenfield, and I sit down with him and he goes, Scott, you know, uh this company's doing okay, but it has no money, you know. Can you can you tell me what what the what the problem is? I said, Well, you know, rebuilding these machines is complicated, expensive. You know, it's hard to get the stuff out the door on time because you always run into all kinds of problems. And he says to me, Look, I come from the jet engine rebuilding business. It's the same thing as rebuilding machine tools. Now I'm gonna turn this place around. And as soon as he said that, I thought, here we go, another boss. It doesn't come from the machine tool industry. I'm out of. And I get recruited to move, uh I get recruited to a company called Mitsui Seki. Going back to the MMTS days, towards the end of MMTS, what happened is the machine tool builders started to compete with each other. Okuma used to only build lathers, they started building machining centers. Mitsui Seki started to build horizontal machining centers that competed with OKK. And so they all kind of busted apart. Okuma ended up down in Charlotte, OKK in Chicago. Matsui Seki moved over to Franklin Lakes, New Jersey. And so I go out and I interview, and they're, you know, kind of excited about my background. I'm young, I'm late, you know, I'm 39 years old at the time. I got what I didn't realize at the time, a lot more experienced than most. And they hire me. I pack up my three kids, my dog, I move everything out to uh New Jersey, and I show up at the office April 1st, the beginning of the fiscal year. I said, show me the book from last year. I look at the book, the company's functionally bankrupt. No cash. It's in it's and I'm thinking, I can do this, I know how to do this. You know, you you go through who you got to pay for the week and who you aren't gonna pay and who you can deal with on the phone and delay payments and all this kind of stuff. And I started to dig into it. Why aren't why isn't this place making any money? And back then they were selling a few jig boars, but most of the they were selling a product called a VS3SK. This was a 10 horsepower, 20 by 40 table machine with 20 tools on it. And they were selling them like popcorn, they were selling for around $100,000. Distributors were buying them for around 80,000, and they were selling about 100 machines a year. And Mitsui was making about $5,000 on each machine, and we still had to install them. So it was there was no money in this product at all. And also at that time, what was happening is they were asking for pallet changers and more tools and this is and that. And I'm thinking, well, we're building horizontals. Horizontals have the pallet changer and tool changer. So I have a big distributor meeting, call everybody in, increase the price on the uh VS3 to the point where they can't sell it anymore and go, guys, you need to sell horizontals. Now, back then the horizontal market wasn't that big, probably 500 machines a year in the US, unlike today, which is about 6,000. And we have a small product called uh an HS3A, which is a little 20 uh inch pallet machine. We start selling those like popcorn, and I start traveling around with the distributors trying to help them sell horizontal machining centers because they don't know exactly how to do it. Put it on presentations and all of this. And lo and behold, I am taken into train corporation. And I'm walking through the plant because, you know, as a salesman, as you go know, and lots of guys know, you look at what's going on in the plant, you can pretty much tell where the heartburn is. And I walk by the CMM room, and there are thousands and thousands of parts stacked up. And I go, what's going on here? They go, well, we can't make these parts accurately enough because when they change the freon that was burning up the ozone, the new freon is not as efficient. So our components that we were making to three thousandths now to be now need to be made at around 25 millionths for line bars and things like that. And we can't make them, so we have to match the components. So we measure everything and then match them for assembly. Of course, the light goes off in my head. I go, well, I I can build you a machine. I said, our um horizontal machining centers have you know 25 microns true position in the cube. What's that? I'm thinking, well, there's a presentation they need to put together. And then I said, I can build you a V V Way machine that can do 25 millionths in a turn boring application. And they go, Really? And I go, yeah. So I said you'll need you know eight uh 24-inch horizontal machining centers uh to do the roughing, and then you need two of these two machines for finishing. So I go to the factory, convince them to build these uh first JITIC, they were called machines. Train was a little nervous on the tolerance. I said, look, I'll guarantee them for 10 years. They're roller pack, all V-Way machines. I know they'll hold up. Put the machines in there, they work like a charm. At the end of the first year, they're out of tolerance. The guys go in at Christmas time and rescrape them for 10 years. I realize that the whey surfaces are too small. So the next ones I build are big enough and they work like a charm. And the rest of the industry in compressors are watching what we're doing, and then all of a sudden, Thermal King, Carrier, all of them, we dominate the compressor industry in the 90s. We are selling hundreds and hundreds of horizontal roughing and finishing machines. On top of that, we're selling jig boring machines and grinding machines. And on top of that, Matsui Seki, which today is the largest thread grinding builder in the world, they got into the thread grinding machine tool business because uh Excello needed a foreign entity to build the machines for them, so we learned how to do that. We're killing it, we're making money hand over fist in the 90s.

SPEAKER_02 32:22

Good.

SPEAKER_01 32:23

So now the the reality of we paid off all the debt, we actually bought Alt Mitsuy and companies, so we're wholly on the serial of the factory in Japan. Down the road we're going, but there's a couple of issues. One, the factory that we're operating out of was built in 1928. And when you take customers to a factory built in 1928 and walk around, it's not pretty. And I kept pushing to build a new factory. And so our success in horizontals wasn't just in the in the compressor industry, it was in the automotive industry, it was in all different kinds of industries. And the reality was that we needed a new factory. We had a new president convinced him to sell the 10 acres downtown Tokyo where the existing factory was, and let's build a new one. We can do it for about $75 million. Well, $100 million later, we have this beautiful plant, temperature controlled to 0.2 degree floor to ceiling. It has 1,700 columns that go to bedrock that are a meter in diameter that hold four different slabs, so vibration doesn't uh uh bother the tolerance of the machine. You have to understand machine tools can be built a lot of ways. Mitsui style machines are hand-scraped, hand fit machines. That's how you get high precision, ultra precision tolerance. There's only two builders left in the world that are doing it. One is our competitor, Yazda, and Mitsui Singhi. The last two guys that do, everybody else mills and does this. And the hand scrape surfaces are not the surfaces that are contacting the ways, they're cool steel waves put on top of hand scrape surfaces. Not easy to do. It's a tribal knowledge, it takes forever. I don't know if you've ever scraped, but I did and I was lousy at it. It is a tough, arduous job. You need to put the entire machine together, and if it's not quite right, you take it all the way back down to the scrape surface and adjust it and put it all the way back together. So our plants got creams all over the place to be able to do all of this. And as I'm running around and uh, you know, talking about this, I'm talking about, like I just did to you, about how tolerance is made, straightness of travel, two arc seconds, square up the machine, blah, blah, blah, all this technical stuff. And I'm running around the world pitching this. I have a presentation, true position. If you have this, if you have blah, blah, blah, blah, blah. Lo and behold, I run into a company called Access Machine down in Coolin, Alabama. I give them this story, and about two years later, out of the blue, I get a call from their sales manager who said, We got a job, or their uh purchasing manager, we got a job we want you to look at. Well, okay, and I get in a plane, I scoot on down there, and I go in, and it's to make 1.2 meter beryllium press cast lenses for the James Webb telescope. And I'm like, okay, uh, what are the tolerances? Like 80 millionths. Um, the the press cast weighs about 220 pounds. We're going to take it down to 27 pounds, which means this thing's going to be paper thin. Learn that you have to machine like 25,000, 30,000ths off of this component, put it in a titanium bag with nitrogen, heat treat it to stress relieve it so it doesn't crack, comes back out. Lo and behold, they need eight machines so that they can do this process and put it in whichever machine is available. Which means that each machine has to be matched tolerance to hold 80 million. Because they don't want the operators doing anything other than just putting the next 20,000ths of stock removal in.

SPEAKER_00 36:18

Not easy.

SPEAKER_01 36:19

I spend uh five, six months in Japan helping the guys put all this together. Lo and behold, it works. We do it. High precision. James Webb telescope. How cool is that? I mean, you gotta say how cool. Got to know all the guys at NASA, got to learn a whole bunch of stuff I never thought about. The thing is designed to collect infrared light from the center of the universe, the Big Bang. They want to look at the center, which is 13.5 billion light years away, and see what the Big Bang looked like.

SPEAKER_00 36:59

So they do this, and Dr. John Mather, who is an incredible physicist, and I talk with him still. When they look there, you know what they saw?

SPEAKER_01 37:12

The same thing they see everywhere else. The whole Big Bang theory has kind of crumbled, and now they're trying to figure out why. So there's this incredible tool that's out a million miles orbiting around the sun that's collecting information that's blowing up all of the things that all of the physicists thought were true. I love it. Shows you what tools can do.

SPEAKER_03 37:35

Yeah. Yeah.

SPEAKER_01 37:37

So after that, um, you know, we went into Sikorsky. We did the heavy lift helicopter, we did all kinds of stuff. And, you know, I've been with Mitsui Seki. This is my 36th year. And in 2018, I went to IMTS. I had uh taken a book, which you and I had talked about. I wrote a book called Rantedes of a Machine Tool Salesman, sold it to all my friends and colleagues and people, and it was my swan song. I'm out of here, see you later. It was 2018. 2020, I'm still here, 2022, 24. It's 2026, and last week I signed a contract to work for another year with an extension for a year after that. I'm in my mid-70s. I may never get out, but I gotta tell you that I love this business. And in Japan, they have the old Japanese would tell me this that the most honorific thing that you can do is to be standing at the bus stop with your briefcase as an old Japanese guy, and keel over dead and still be holding onto your briefcase. Well, as you know, Bruce, I'm a I'm a winemaker. I've been making wine. This year is my 30th year of making wine. And when I keel over, I'm gonna be holding a wine glass.

SPEAKER_02 39:07

Good for you. I hope that people can see your video, by the way.

SPEAKER_01 39:12

Well, uh put it out there if you want. You can tag it on to whatever. I just uh I got the copyright and and it and it's kind of going. But you know, today um Mitsu Iseki is extremely uh fiscally well off in 2028. It will be a hundred years old. That's pretty good for a machine tool company. Um, and all I can say is that it really just comes down to long-term tribal knowledge scrapers, fitters, designers, salespeople, uh looking at where the market is going and trying to figure out the next thing. Machine tool companies come up with a product, they sell the crap out of it, they make a bunch of money, the recession comes along, they hang on to their people because you can't let them go, and down the road they continue. And it takes machine tool people to do that.

SPEAKER_02 40:04

Great. That's beautiful. So let me ask you a couple questions, if I may. What is the most important thing for a machine tool company to do moving forward?

SPEAKER_00 40:16

Future. The I think the key is to see where the end users' uh pain thresholds are.

SPEAKER_01 40:25

For example, uh I worked on the 787. So 787 is a carbon fiber titanium uh aircraft. And the reason that they did that is that uh aluminum aircraft, you know, expand when you go up to altitude and contract, and water collects in the middle, and after about 20 years, you pull off the skin and you drain all the water out and put the aircraft back together. 787 doesn't have to do that, it's made out of carbon fiber. But carbon fiber and aluminum and water is a battery. You can't have that when you're flying at 25,000. And back, you know, back in the day, aluminum could be machined for around six cents a cubic inch. That's what the cost is for high-speed machining and aluminum. Everybody knows what high speed is. And titanium was about $1.60 a cubic inch. So there's a cost issue, pain issue. So Boeing approached us and said, uh, we need you to figure out how to build a machine tool that can machine titanium at 10 cents a cubic inch, the stock removal rate. So over the years, I've learned that uh the best thing to do is build a machine and give it to the RD guys for free and let them figure out all the things that are wrong instead of selling the machine and putting it in there and living with the nightmare. And uh they will help you design it. And we figured out how to make hard metal machines, the machine titanium, at 10 cents a cubic inch. That's what machine tool companies need to do, and the good ones do that. They look at the issues that are out there and come up with a new product.

SPEAKER_02 42:04

So I have another question. Why did the USA lose much machine tool capability to the other countries? Like what like Pratt and Whitney, Millicron, all these companies, what happened?

SPEAKER_01 42:16

Well, here's you know, the the Japanese came in because they had a lot of product and the backlogs for American machine tool builders was quite long, and they had the advantage of exchange rate. But the reality is this machine tool companies, when they're on a good run, build up a lot of assets, a lot of capital, a lot of money. The reality is machine tool companies run from minus 4% to 8%. So they're big capital companies, and their margins aren't that great. But the reality is, is in order to keep them together, you need to keep the staff together, you need to live through the recessions, you need to have about four points a year for product development. But when you got a bunch of cash and you got a company that's a financial company coming along and seeing that, they know if they grab that cash and take it out and put it elsewhere, they can make more than five points on it, more than ten points. Sometimes, if they're lucky, they can make 30 points on it. So they would come in, buy Pratt Whitney, take the cash out of it, the recession would come, they'd lay off a third of the staff. Now your tribal knowledge is gone. When the market comes back around, you can't produce anything. That's exactly what happened to the American machine tool industry. That is what's happening to the Japanese machine tool business right now. One of the beauties of Mitsui Seki is we are privately held. We are not on the stock market, we are owned by Toyota Motors and JTEC, guys that need our equipment, understand what our tribal knowledge and capabilities are, and keep us going. And that's what is needed. In Germany, they protect the machine tool companies because they realize how. Important they are for their national security. But the U.S., you know, is different. And that's what happened, you know, in the U.S., I'm not sure what China's going to do. They're building, you know, 10 to 12,000 CNC machines a month. But I've watched in my career the machine tool business bounce around the world. India is trying, Russia's tried, and you know, but that's what kills it is people coming in that are not machine tool people and taking the cash out of it.

SPEAKER_00 44:29

What would you have done differently over your career besides the pig and whistle? You know, I I've I've had a great run. Um I've been fortunate enough that I didn't work for a massive corporation.

SPEAKER_01 44:49

I I I've I've had opportunities to run large public companies, but I also like my hobbies. You know, I I'm an oil painter artist. I've got art all over the world. I I'm a dive master, technical dive master, dove all over the world.

SPEAKER_00 45:05

Uh flew planes, I a winemaker. I honestly don't think I would change much.

SPEAKER_01 45:15

Um other than listening closer to the end users that I called on, I missed some opportunities that other builders picked up that I could kick myself that I didn't. Most important thing is to listen.

SPEAKER_00 45:32

And that is hard to do when you're a salesman. I hear you.

SPEAKER_02 45:38

So I completely agree with that, by the way. So uh you have some book recommendations for the audience?

SPEAKER_01 45:46

I do. I, you know, used to give presentations all over the world with all the different technologies that I've talked about during this podcast. And I got two books that I think are just anybody that's in manufacturing needs to read. One is The Perfectionists, How Engineers Created the Modern World. This is written by a guy named Simon Winchester, who actually lives in the next town over. I know Simon personally. Uh, he and I talked when he was writing the book about the James Wadd, Minatoyu, and Precision. Very, very interesting book. The second one is Freedom's Forge, How American Business Produced Victory in World War II by uh Arthur Herman. An incredible story of how we took mass production from a commercial standpoint to a war standpoint and then back to a commercial standpoint. Incredible people in this book. I highly recommend that those two books to anybody that's interested in this industry.

SPEAKER_02 46:48

That's wonderful. And of course, your book, let's not forget your book. I I bought it at IMTS and read it, and I've passed it over to a couple people who have read it also, and and uh it's very interesting.

SPEAKER_01 47:02

Yeah, rantes of a machine tools salesman. It's uh it's it's it's newsletters. I wrote newsletters every two weeks for everybody. And uh, I'll tell you what, if you do that for 20 years, what do you write about? You don't write about machine tools. But you know, in closing, um I'd I'd I'd like to uh tell you what my grandfather used to say to me. He said, Scott, you can't change the people around you, but you can change the people around you.

SPEAKER_02 47:35

Very good. Thank you so much for joining us. I appreciate it.

SPEAKER_01 47:40

Well, thank you. It's been fun, and um, I think your uh podcast project is tremendous. Thank you, Bruce.

SPEAKER_02 47:47

Thank you. Thank you for listening to A Machine Tool and the Men with Mr. Scott Walker. These stories remind us of where we've come from and who helped build the industry we stand on today. If you enjoyed the episode, please follow the show and share it with a friend in the trade. I'm Bruce Tillinghast. Until next time, keep the history alive and keep the machines running.