Made in the USA - Season 2 Episode 6: Why, and How, Hardinge is Reshoring Machine Tool Production
In this episode of Made in the USA, several executives and senior staff at Hardinge give their first-person account of how they formulated the plan to shift the manufacturing of its milling and turning product lines from its Taiwan plant to its plant in Elmira, New York, the major challenges they encountered and the rewards that made it worth the effort.
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Catch up on season 1 here.
The following is a complete transcript for Season 2 Episode 6 of the “Made in the USA” podcast.
David Bassett, Senior Director of Quality and Continuous Improvement, Exports and Compliance: It killed me to take jobs and take everything over to China and teach those guys how to do things.
Jeremy Michael, Global Director of Product Management: At that time we were building, I want to say 30 different machine models in Taiwan. The day that I got the call, and they said, Hey, we decided we're moving this back to the US. I almost ran my car off the road, when you look at the supply chain, and be able to say, hey, each region, every country in the world today, we need to make sure that we secure our own interests.
David Bassett: I'm a hardcore patriot of this country. And for my boss told me, I want you to build that back to the United States. Man, I can't think of a better way to retire than to make that happen.
Brent Donaldson, Editor-in-Chief of Modern Machine Shop: Welcome to Made in the USA, the podcast for Modern Machine Shop all about major themes shaping American manufacturing today, I'm Brent Donaldson.
Pete Zelinski, Editorial Director of Modern Machine Shop: I'm Pete Zelinski. This season, we've been hearing from companies all over the United States that have made deliberate choices to shift to manufacturing to the US or to keep manufacturing in this country. We've been listening to the leaders of these companies describe their businesses, their challenges and their reasons for domestic manufacturing in their own words.
Brent Donaldson: And while those businesses have arranged through various end products, including motorcycles, robots and measuring tools, they have all had one thing in common. All of the items covered this season have involved precision metal components. All of the companies have needed CNC machining.
Pete Zelinski: CNC machining, which stands for Computer Numerical Control machining, use the work of a CNC machine tool. We talked about machine tools quite a bit in season one of Made in the USA, a machine tool is a precise and powerful machine for cutting metal into exactly the form you need to exactly the dimensions you need. A machine tool is capable of both hogging through steel or titanium to mill a metal part to the correct shape, while also controlling that shape to within accuracies measured in just a few thousandths of an inch. Because precision machine tools are needed to make other types of machines, machine tools are arguably the starting point or the foundation for most other forms of manufacturing.
Brent Donaldson: So for our final episode of season two, we wanted to talk about machine tools by hearing from a machine tool maker that has recently rededicated itself to US manufacturing, the company is Hardinge. Its manufacturing operations and suppliers have been and still are global. But starting in 2021, Hardinge made the decision to shift production of certain major machine tool models from overseas factories to its headquarters in Elmira, New York.
Pete Zelinski: Hardinge will tell the story, you'll hear in their words why the company reassured machine tool production in this way, and why it wasn't easy. Reshoring is a process that is still ongoing involving changes to the plant new procedures, people and relationships with other US producers.
Brent Donaldson: For reasons you're about to hear, in 2021, the company shifted the production of two of its product lines back from a Taiwan plant to its headquarters in Elmira, New York. By the time we visited the facility to do these interviews, the process was well underway. In fact, during our tour of the Hardinge plant, we witnessed teams of Taiwanese engineers actually teaching the American teams how to build these machines. The two teams from half a world apart spoke to each other through translation apps on their phones, working side by side and building a new version of a machine tool that had, right in front of our eyes, come full circle from being offshored a quarter century ago to once again being made in the United States. So here's the story full circle, starting with David Bassett, Senior Director of Quality and Continuous Improvement, Exports and Compliance. Dave Bassett has been here with Hardinge's for going on 27 years.
David Bassett: I currently work at the Elmira office, my role is more global in reach, but I work out in my office for the most part. So I started here as, it's interesting that the day I was hired, I was hired as a mechanical assembler. Before the end of the next day, I was an electronic assembler. So my role changed relatively quickly. And it's been that way for 27 years pretty much straight through. I worked in a final assembly area for about a year and a half. Worked my way from mechanical assembly, electrical assembler up to electronic tech. Assembly tech. Took over one of the shifts as a team leader and ended up ultimately as the assembly supervisor. And within a few years, I was assembly manager and ran the assembly group as well. So I worked my way all the way up through the assembly group, done pretty much everything in assembly at one point or another on. At that time, all the machine tools, some of the ones are built now I've never built but the ones we built the past like the VMC 700. I also did a stint where I ran the turnkey group we talked a little about turnkey. I ran the assembly side of that for a while for the company, kind of graduated from there just because of the background of my education into industrial manufacturing engineering for the company was instrumental in starting the continuous improvement Lean program for the company a number of years ago. Develop that for the company. Once we got that underway here in Elmira, the corporation wanted to kind of take it globally. So that's how I stepped in. That's how I went from my role to a global role. And I took that same process for continuous improvement work instructions assembly around the world. Put that in all over the company. Shortly after we did that, we decided to start moving product to Taiwan, in Europe, in Asia, in China. So again, I took that responsibility that I had with the lean in the assembly. And everything that we're doing now with bringing stuff back to the US, took it to China, and Taiwan. So we took products from here, we follow the same strategy. We took 100% of the content from the US took the Taiwan and China, train the teams over there how to do documentation engineering, the whole nine yards. Once they understood how to do that stuff, then we start sourcing locally. So to the point now where the China team and the Taiwan team buy almost all their component parts locally, China's still buy some spindles and color clothes and things from Chad, but for the most part, all their products are domestically sourced, in and around China. Within the last 18 months, we've now started to reverse that we're bringing stuff back into the US. So my role in China, in Taiwan was really to guide those teams in quality operations, supply chain management, things like that continuous improvement, which is really what we did for the better part of 15 years was doing that internationally. And we spent a lot of time also working with the teams in Europe, Switzerland, specifically Kellenberger. Jones and Shipman at the time, Hardinge UK at the time. So really taking that technology and that competency for building assembly lines, leading them out optimizing production and assembly, and then working on supply chain and quality. That's kind of what we did for the last 27 years and led me to the role I'm at now, which is a corporate role, which is really kind of leading that stuff corporately for the company. I mean, it was pretty basic back in the day. I mean, we're talking back in the late 90s, early 2000s, it was really all about how can we satisfy the market demand for machines at a cost competitive advantage for Hardinge. So it was really optimizing a supply chain, a low-cost supply chain. And if you look at what we could procure parts for and components and around the world versus what it was in the US, it was prohibitively expensive in the US, we could get a landed cost product in the US cheaper, then you could buy it, you can manufacture in the US. There was simple economics at that point. So that's why the decision was made to do the JV with the company in Taiwan to do the JV to build Hardinge Taiwan. The China, China, we'll set that aside for a minute because that was a little bit different view. But Taiwan is really all about getting the lowest-cost product to the US market at an acceptable Hardinge quality level. And that's what we did. So that's why we did, I mean, we took machines that were designed and developed here in Elmira and were built here in Elmira, transferred those to be built over there. And then over time, we built a very good engineering team over there that could design machine tools to fit that same model with the market wanted, which was a low-cost, commodity is the wrong term, but a low-cost commodity machine that was affordable. And it met the quality requirements to build parts at a quality level that the market work required. And so that's how we ended up where we were. It didn't feel good. But that was really the business reason for doing it. We needed, we needed a product to compete against the South Koreans and the Taiwanese nationals and the Japanese and the Turks and we needed a product. We couldn't do that out of the US out of US facilities. So that's why we went to Taiwan to do it. It was labor and machining costs. So there were two things that happened at that time back in the late 80’s, early 90s. This facility here is very vertically integrated. So we made everything here, heavy casting, machining and everything. That's very capital intensive. There's a cost that goes with that. So when you do a cost benefit analysis of what it costs to run the business here, and it's labor, it's machining cost. It's buying raw materials, everything. And you look at a source like casting out of Taiwan and machine casting out of Taiwan. And you look at a landed cost to bring that into the US. It was cheaper to buy that product in Taiwan or Eastern Europe than it was to manufacture that part here in the US. It was just cheaper. As simple as that. Landed cost. I'm not talking about the purchase cost of the casting. I'm talking about full landed cost to Elmira, New York. It was cheaper to buy internationally than it was to build it here. It's a hard reality, but that's what it was. So we have a design that went to Taiwan, or a designed that went to China. So we had to transfer the technology and teach them how to do the machining of the part to Hardinge specification, how to inspect the part to Hardinge specification. Once we trained them, then we had to stand a supply chain up there. So it's the same dynamics you have here with the supply chain, you had to go outside the supply chain, supply chain quality, you had to have the infrastructure internally. To get that all and get a good part to the assembly process, you had to do the same thing you're doing here, set it up over there. And once we had it set up over there, it ran pretty well. We had decent, decent quality. Now I won't say it was comparable quality, what we're getting out of Elmira, where we're getting out of the US, but it was, if you look at the old total quality concept, it was within design specifications. And that's total quality. As long as it meets the spec. It wasn't at the high end of the spec, it was at the medium end of the spec. That's total quality. That's what you're after. That's what we got.
Brent Donaldson: Now let's fast forward 20 years when Hardinge leadership begins investigating the idea of bringing some of its production back to the US.
Jeremy Michael: My name is Jeremy Michael. I've been with Hardinge for about 13 years, I'm the Global Director of Product Management focusing on our turning and milling products. So you know, a lot of the conversations started during a process we call portfolio rationalization. You know, we are very unique in that we do turning, milling, grinding, and workholding. Now we own a holding company. We've recently acquired a high production automotive machine manufacturer. So we're very diverse in our portfolio. All of the lines that we have were what I would call a premium line, you know, our super precision lathes that are built here, sub micron lathes. Even our knee mill, which is old technology is the premier knee mill in the market, all of our grinding lines are Premier. And we looked at some of the standard, what we would call standard turning and milling products that we were bringing in. And while it was very good quality, it wasn't to the spec level of what the rest of our portfolio look like. So we've had some conversations and said, Okay, how do we bring that in line providing the capabilities that the US market wants, but at the same time not reinventing the wheel? So that was one of the main decisions. It's funny, there was actually a conversation where there was a fork in the road conversation. And that was, do we take this product high end? And if so, did we move it to the US? Or do we take this product and go towards the lower price market and move it to our facility in China. And there were probably people on both sides of that, all of a sudden, there's a pretty hefty tariff that's put on Chinese products. And at that point, I wouldn't say that was the reason because we were very much already leaning towards bringing it back to the US, that had a tremendous impact on the final decision of it. We say, okay, we can up the spec of the machine, it's gonna cost x, we feel the market will accept x or y. That's when we look at it and say, you know, what's the selling point to the customer? Yes, it's a premium product. Yes, it's coming from Taiwan. But what could we do to kind of sweeten that deal a little bit? And we felt that being made in the USA is, I wouldn't say a justification for the cost increase you see in the product. But it just gives credence behind the overall quality of the product that hey, not only did Hardinge up the spec, but they actually move the production domestically, to ensure that they've got their arms around all the full capabilities of their engineering department.
Pete Zelinski: This is Chad Miller, Vice President of Manufacturing.
Chad Miller, Vice President of Manufacturing: I think the first conversation I had with our CEO, very briefly was welcome aboard. We're just here to let you know that all these projects were horribly behind. Right? To bring them on, there were a lot of warranty issues with some of the stuff coming out of Taiwan, that there compared to what was coming out of the United States, you know, we're substantially different. So to find that value proposition and put it into these builds. There's a reason, as Dave alluded to that, you know, China and Asia want our spindles. We make the best spindles in the world right here in Elmira, New York. So incorporating that skill set, that thought process into these getting it back on schedule, it's difficult and going through it, going the other way, I understand all the pitfalls I have to go through. But as a technology, as Dave talked to you about that went over in the 90s, was now I had to bring that back. And under the same problems and opportunities and barriers from Taiwan, they didn't really want to let it go either. It's that give and take and trying to get that now lost in translation going that way. Double Lost in Translation coming back. By that time, the people who had been here before, when it was here before were very few and far between, so we decided to bring it back. So as to grab that little bit of knowledge and try to transpose it into a wider skill base. And then, you know, as David alluded to, we can't hire fast enough, we were 11 people on the assembly when I came in here, we're up over 44, we've, you know, in two years, we've quadrupled the size of our assembly team, and are still hiring daily. So it's taking that little bit of knowledge and trying to build it into all these new people, and then try to take that tribal knowledge into technology and to capture and to utilize the work instructions, as Dave alluded to, and go into a more digital format too, but never lose that core value here of the quality of what makes Hardinge machine, American made Hardinge machine different and then put that back into these, what were traditionally Taiwan machines to kind of put it, give it our own stamp again. And to be able to put that flag back on it.
Jeremy Michael: What we really needed to do was a couple of different things, we needed to up the spec of the machine from a performance standpoint, we also needed to bring it in line with our other premium brands from an appearance standpoint. At that time, we were building, I want to say 30 different machine models in Taiwan, over 30 different specs with three different controls, the number of configurations, we had in product overlap was tremendous. So we said, Okay, we're going to focus on these three turning products. And we're going to focus on a new XR series of vertical milling centers that were originally going to be built in Taiwan until we made this decision. And now they're all going to be built in the US. That was one of the big things. It's not just making an announcement, hey, we're still we're bringing the same old product over, we're just gonna assemble it here. And that's it. We wanted to make sure that, from a performance and a visual standpoint, you can walk in any shop and see a Kellenberger grinder, or Hardinge super precision lathe or a Bridgeport BMC. And tell aesthetically, those are Hardinge branded products built in the same facility for the most part. The other thing driving factor, and this is critical, I mentioned that Ryan Levenson, who is our CEO, and is the founder of a private equity fund that owns Hardinge. He can give you a lot of insight into this. But Ryan is very big on American manufacturing. And not just this isn't a, hey, we're gonna build machine tools here. This is phase one of how does Hardinge help prop up the supply chain in the United States. One of the things we're doing at IMTS is meeting with potential suppliers because you've got customers that are gonna show up at IMTS to buy machines to make their products, their products, a lot of times are used in our machines. So how do we start to partner with each other? How do we give a smaller shop somewhere in the United States opportunity to provide us product and really start to organically rebuild the US supply chain, because that was one of our biggest concerns was being able to find the product here. We have been able to find it, that comes at a premium. But we're willing to pay that premium because we know long term, it's not only critical for the success of what we're doing, but it's critical to the success of the US manufacturing.
Brent Donaldson: Were you around at the time that this first cropped up? When this was just kind of being in the incubator as an idea? Were you part of those discussions?
Jeremy Michael: I wasn't sitting in the room. But my input was being brought in by my boss, Randy Bahr. So Randy was in the room for it. But Randy didn't come from the industry itself. He was kind of using me in proxy in terms of, you know, just getting my input on the market and what you know what my thoughts were, I can tell you, the day that I got the call. And they said, Hey, we decided we're moving this back to the US when I most ran my car off the road. Because I was looking at it from boy, we have that fork in the road. And if it's all gonna go to China, are we going to be the first US Machine Tool Company to import product from China? What does that do to our other brands? What does it do in terms of, you know, your pricing structure, the type of customers you're dealing with and where you're positioning your products? So it was a sigh of relief on my part, when we made that decision, but, you know, it was this that decision started probably getting kicked around by the time COVID started, you know, February 2020.
Brent Donaldson: Do you remember the very first communicative that you received about that, the very first email, the very first call? What was it? What was that?
Jeremy Michael: My boss at the time, Bill Sapochnik, who is president of our workholding division, called me and said, Are you sitting down? I said, No, I'm driving. And they said, Well, they've decided to move everything back to the US. So my first instinct was, I can't wait to tell everybody, but corporately the direction was no, let's keep it quiet for a while. Obviously, we have long term distributor partners in the US, you know, so we kind of got our full plan together, then introduced it to them, they were very excited. We didn't make an internal announcement in the plant here for probably four or five months. We didn't want to jump out, say, hey, we made this decision, we wanted to say, Okay, here's the plan. This is the three, five year plan on what this is going to look like, what it's going to mean to the people here and the people in this factory. So we wanted to be able to communicate that clearly. But it's been well received. I mean, not just I mean, obviously, the people here were very excited. The gentleman that you see out on the line that built the machine that you saw, then moved to Taiwan has now moved back. And there's a sense of pride for him. But also our distributors were very excited about the announcement, our key customer base was very excited about the announcement. We've actually picked up some competitors' customers solely for the reason that they wanted to buy a US-built machine.
David Bassett: The way it was brought back to us when this came out is CEO said guys, I want to project plan on how we bring product back to the US. I want to bring manufacturing back to the US. So it was a great day because, over the last 15 years, we had been so focused on building up our facilities overseas. The facility in Elmira New York, which is where I grew up, every day, it kept going a little worse, a little worse, a little worse, kept going sliding down a hill a bit deeper. But it was really driven by Ryan Levenson's comment in a meeting, I want to bring machines back to the US and I want to bring the technology back, I want to reshore to the US. And behind the scenes, there were other things going on with third-party consultant working with us it did some studies that said, Hey, we think you can do this and be cost-effective at it. There were a lot of things behind the scenes that made that happen. But the impetus to really make it happen was our CEO saying guys make this happen. It wasn't an email, it was a conversation. When I have the phone. I'm jumping around. I'm just happy as hell. I grew up in Elmira. I mean, I grew up 45 minutes south here. I was hired here 27 years ago on a factory floor. So the fact that I'm a corporate executive now and I work around the world doesn't change the fact that this is my home. So when Ryan Levenson said I want to bring machine tool manufacturing back to Elmira, that was the best thing I heard in 27 years that killed me to take jobs. I shouldn't say take jobs, but it was it, it killed me to take jobs and take everything over to Taiwan and take it to China and teach those guys how to do things. I'm very proud of what we did. And we stood up machine shops over there, we went to supplier machine shops over there and showed them how to make parts to Elmira capability. They had no idea you could do that. We first went into some of these machine shops, they said you can't make that part. And we left three months later, not only were they making that part, but they were selling that capability to the customers. That's an accomplishment in and of itself. We did the same thing in China and had Ryan come back and say I want you to bring that product back to Elmira. I want you to rebuild Elmira manufacturing. When I was the greatest news I heard in years. It's probably not politically correct. But I'm a hardcore ultraright conservative patriot of this country. And for my boss to tell me I want you to build that back in the United States. Man, I can't think of a better way to retire than to make that happen. If you reverse that 180 where we are today, it's just the opposite. Chad can't hire people fast enough to get this operation built up to where it needs to be because we're bringing this stuff back. I mean, if you look at and I explained to you guys on the line this morning, we started building machines here in April, May of last year. We built two machines last year. This year, we've had the Taiwan team here for 90 days. In 90 days, we built two machines in 90 days. So the learning curve from where we've gone a year and a half ago to where we are today is tremendous. So Chad's team now has a manufacturing engineering team on the floor. He's got people on the floor that are cross-trained across multiple lines, machine lines. The team is much more reactive, much more flexible today than it was a year ago, which has allowed us to do things quicker and faster. The team that I used to build the China and Taiwan teams, the guys that I used to do that are now coming back here and train Chad's team on how to do work instructions, how to do line layouts working with Chad's team on inventory and logistics layouts. It's just been really great over the last year to make that happen and see that happen.
Chad Miller: Sure, logistically, it's until we stand up in North American supply base, we're still doing various levels from Taiwan, right? And it's logistics of how do we get that here the most cost effective way? So we haven't priced ourself out before we even you know, put one wrench to the machine. Some of the challenges are I'm looking at it, as Dave alluded to, I'm looking at it to how do I build 20, 30, 50, 200 machines next year? From the warmup is this repeatable? How long does this process take? We tend to not look at what the next phase looks when we're doing like, testing or something like that, that we've done eight days, okay, now, how do we get it to two days and still get the same quality result so we can be cost effective moving forward. And then looking at the hours it takes to build a swatch and start building a labor plan behind it? How many people do we really need to meet the demand that's coming? And then we'll start phasing out. Our next part is to phase in, what are we going to do for parts and all this as we start to try to put more North American content to these machines more and more, until we can say these are true, fully made in American machines. Right now, I think the Made in America, part of it is the value proposition that we put into the machine is what makes our machines different. It's that alignment, it's that super precision mentality going into a traditionally general precision machine. Still within specs, but maybe we hear or see something a little bit different. A very good story was the first mill that we built last year, is we built a machine, and technically, the spindle was inspected. But our guys here listened to it and looked at the way it was aligned. And they thought that really isn't good enough for us. So they put a little thought into a different process, they got the process down, and it's now repeatable in that, but when I went in and did side-by-side test cuts with other machine tools in that price range and outperformed them. And I swear it's simply because of those four or five guys that looked at that spindle. And so that's not good enough to come out of Elmira, that doesn't deserve to have our flag on it. So we think we know where we need to go. Now Dave alludes to though, some of the stuff that is now a lead time issue of how we're going to procure it, get it in here to fulfill what we've we've already started promising customers, one of the migration machines here and then we are on a committed timeline to get the other one stood up to our distributors, and to our end users.
David Bassett: So one of the things that came up to me, it came to mind really, really quick, was just a logistics nightmare pulling this off. Because we had to reverse everything coming back here. The other thing was, it's a 12-hour time zone. The language barriers that you run into, and I'll tell you guys a story about I told you about that earlier today, but I'll reinforce here in a minute. But those kinds of things, Chad touched on it one of the biggest reasons, I would say probably one of the top three or four reasons that Ryan wanted to bring stuff back to the US was our product lines out of China and Taiwan have historically been tagged with, there are quality issues. And the distributors and the customers will always see quality issues and machines that we didn't see with machines manufactured in the US. So when you combine the fact that we bring the logistics, and the technology and the time zones, and that language and everything else, we're bringing that back, how do you improve the quality at the same time? So part of it is Chad started with 11 guys out here recently, and those were not 11 guys I worked with 25 years ago, to build machines, we had to recreate the skill set from a very core group of guys he had. I got four or five guys out here that are my age that was that I grew up with, that are extremely good at what they do. So we had to bring those guys back in, build a training plan in Elmira, a flexibility plan that Chad and his team have done a great job doing to get these guys cross train to be able to move back and forth. But at the same time, we had to do it with documentation that comes over. It's in Chinese. How do you read Chinese in the US? So what translation programs do we use? Time zones we work on East Coast Time, Eastern Standard Time, 12 hour time difference so how do you set up conference calls that are convenient? Those are some of the things that really started coming into effect. And we use technology. You know, we use Zoom we use Skype. I told you guys about the cell phones our guys out here on the floor. If you guys go out there and watch these guys, the Taiwan guys and US guys, I'll walk around the phone in your hand. And if you look at their phone, it's got Google Translate, and you'll see him talking into the phone and hold up to the Chinese guy because it translates in Chinese. He'll speak back to him and they'll read it back. Those guys out there talk on their phones, like you and I are talking in this room right now. It's amazing to watch. It's all because of technology. 15 years ago, we took it over there, we didn't have that. So it was another challenge we had to overcome, that technology has allowed us to overcome here. If I had to sum it up, it was the language, the timezones, the culture, and the training of the teams. And then probably the biggest hurdle we had to overcome, if you take COVID out of it, was just the sheer logistics of moving something from Taiwan back to the US and setting up supply chains to make it work. We're still struggling with some of the supply chain stuff, logistics, we found some issues last week on some things that we screwed up on a transition, on the talent machine that we talked about, we're getting that cleaned up. When you look at the XR and a TT, we don't have those same problems that we identified on the talents because we're getting better at what we're doing. So the next machine that we transition, the lessons learned, will help minimize those impacts on the business as we move forward. It's the support of the organization. Like I said, this would not have happened without the CEO and the senior staff saying I want to make this happen. Okay. And that's really what made it happen. And we had all kinds of roadblocks keeping us from succeeding. At no point in that progress up till today in that journey, at no point, did that leadership team ever lose faith in our ability to make this happen, and our support and drive to make this happen. So we've got great troops on the ground and make it happen. We've got great cooperation from the team and Elmira, but also the team in Taiwan. I mean, I got guys out here, they've been here for three months away from their families and homes, in a different land, different culture, different food, don't speak the language. Three of these guys out here don't speak any English. The English they've learned is what they've learned on the factory floor. It's a team effort. It's pulled us together. And we've had some rough days, Chad and I probably had some days that we probably don't care to ever go back to. But you know, at the end of the day, the teams pulled together and the leadership team for this company has been focused, so focused on making this happen and when they've never lost that vision.
Jenine Cleary: My name is Jenine Cleary, I'm the human resources director at Hardinge. I service the entire Americas region. And I have been working for Hardinge since 2016. So over six years now. What has changed for me? So I would say that we have had a tremendous opportunity to provide positions to the community. It's really exciting that in addition to that migration of product back to the US, we've also taken on the build and assembly of another product line in our grinding machines. So this facility now has all three product lines, workholding, turning milling and grinding machines. And we have always, you know, we have a very tenured workforce. So we've always had that attrition from retirements. And so we've tried to think creatively and provide opportunities for retirees to come back on a part-time basis, right? How can we help flex our workforce to be agile to the needs of the business?
Pete Zelinski: How many people work on this on this campus right now?
Jenine Cleary: Close to 400 right now.
Pete Zelinski: How many open positions right now?
Jenine Cleary: 83.
Pete Zelinski: In the last year or so, how many manufacturing positions have you filled?
Jenine Cleary: I would have to guess over 200? I shouldn't say all manufacturing, I would say because we're responsible for all positions in the region, that number is probably the total number of hires that we've had. And so that would be considered backfilling attrition, new positions that have been created based on the growth of the business, right? So manufacturing might be a percentage of that, but we experience turnover, we lose employees to other positions that they try to make a better wage. So that attrition has probably resulted in hiring, I'd say 150 into the operation, because we've grown our assembly business as well as hiring for our workholding business.
Jeremy Michael: Obviously we don't plan on selling x amount of machines and being happy with that and staffing towards that we're gonna keep growing, that takes external salespeople that takes application engineers. And I think one thing we've been much better at recently than we were in the past was paying a premium for premium talent. And it's a very competitive market right now. And everybody that's looking for a job knows that and people that aren't looking for a job know that. So when somebody comes along that we feel is a real step change in talent, you go out and you pay for him and you grab them. It's become extremely, extremely competitive in sales. Because not to get into the generational conversation. But there are not a lot of 25-year-old road warriors that want to live that lifestyle any longer. So when you've got the woman or the man that's, you know, 45 years old, and is used to that grind is comfortable with that, and as strong salesperson as technical, that's becoming a unicorn. And if you can get them and keep them in your stable, then you do it. I wanted Jenine involved, because that's it's been an obstacle, being able to ramp up and it's just a constant struggle to keep those positions filled. One thing I would like to mention is, you know, we're having an acquisition phase, and we've acquired a couple of companies recently. I was joking earlier, before you were in here, we're opening a new office in South Carolina, that's now gonna require way more people than we thought so your numbers are gonna go up. But we are looking at people from other regions coming into the United States, whether it's employees from Germany with an acquisition or cross training people from our Switzerland grinding groups to bring them into Elgin and, and doing things vice versa. I think those are opportunities that attract younger people as well, hey, you're gonna do six months in Chicago, and six months north of Zurich, I could do that. That doesn't sound like a bad deal. So, I think being a global company that gives us gives us a big advantage to be able to go and say, Okay, we're gonna spice your life up a little bit, you're not gonna be sitting at the same desk at the same place all the time.
Ryan Ervin, Chief Marketing Officer and Vice President of Sales: Alright, so I'm Ryan Ervin. I'm the Chief Marketing Officer and Vice President of Sales for Hardinge. I've been with Hardinge for 16 years now. I think the big one is, where do you want to play again, if you want to try to be in a market where you're gonna play with the lower cost providers saying, Hey, can you really provide an American machine tool that has the capability that we want but also gets the market share overall. And what we're finding is that in order to get the market share with a higher end product, a higher value product, you just need to be able to continue providing that value proposition that is able with the style machine. So I say the biggest concern was probably where do we fill the void of maybe not having an ultra competitively priced product. But really taking that and go into market with more of that value proposition is really where we're headed. I mean, obviously, with the macroeconomic and all just global ongoings of the world right now, I think when you look at supply chain, and being able to say, hey, each region, every country in the world today, we need to make sure that we secure our own interest. And I'd say it's been very evident over the last three years with COVID, with supply chain now with what's going on in Europe, that when you want to control your own business, when you need to know that I have a supply chain that I can count on. I say that's one of the big, driving forces behind saying. Yes, you might be paying more for a higher-end product, you know, from a customer base. But at the end of the day, you're gonna have a reliable partner that's here to support you that is delivering the products on time. And that sets you up for future, you know, manufacturing requirements. So why now? I think with the, again, timing of overall ongoings in the world, and where we really are looking to go with supply chain, I think you're going to continue to see investment in each region, every country is doing very similar conversation. How do we secure our chip strategy? We need to make more locally, we can't rely on this global supply chain, for very mission critical items. So I think timing wise, it really kind of fit the overall story. It really continues to make Hardinge, one of the only full offering American-made manufacturing companies or machine tool companies. Well there are two things from start from purely a business perspective. I mean, what's the bottom line for the business?
David Bassett: Doesn't matter what industry, the business are in business to make money for the company for the shareholders, employees get jobs, and that's what it's all about at the end of the day. So the business has to make a decision, is it right for the business to do what you're trying to do? And for us to reshore our machines? I happen to think it's a great idea, but the leadership team looked at all the pluses and minuses and laid it out and for what we're trying to do with our products in our markets. This is what we think is the best thing to do for our products. Can you across every product and every industry, you probably can't do that. But for what we're trying to do in our industry and our products, we think this is the best for us. And it's the best business model for us and that's what we're doing.
Brent Donaldson: So that's a wrap folks, the final episode of season two for Made in the USA and we'd like to keep this series going but we'd like to hear from you if you'd like to hear a season three of Made in the USA send us an email to let us know. Email us at [email protected] Gardner is spelled GARDNER. Until then, Made in the USA is a production of Modern Machine Shop and published by Gardner Business Media. The series is written and produced by me and by Peter Zelinski. I mix and edit the show. Pete also appears in our sister podcast all about 3d printing or additive manufacturing. Find AM radio wherever you get your podcasts. Huge thanks to the band The Hiders for providing our ending theme song for this series. And if you enjoyed this episode or any other episode, please leave a nice review. If you listen on Apple podcasts, you can just tap that fifth star. Thank you so much. If you have any comments or questions email us once again at [email protected] Or check us out at mmsonline.com/madeintheUSApodcast.
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