Comment by mlyle

Comment by mlyle 2 days ago

> Our military can't find the capacity it needs!

This has a lot more to do with the stance of the past 30 years to manufacture defense materiel at relatively constant, small rates. There was no capital investment, because why pay to have a huge line that isn't being used. We spent our military dollars on wonder-weapons that would probably win a direct war quickly, but that we can't give to allies in a proxy conflict. Going so far was a strategic mistake.

> And they, along with aerospace, are the best customers there are,

Military are terrible customers, especially if you're a subcomponent manufacturer. Gravy might pour, it might not; it's very unpredictable. You spend a lot of effort and business just evaporates.

> Howard Vollem died and the MBA took over.

On the flip-side, can you imagine being the high-cost Tek of old in today's test equipment marketplace? Tek already struggles to compete against cheaper, adequate solutions. So much of that market has commoditized out.

> nobody seems to recognize the massive opportunity costs in all that.

Actually, that's exactly what I'm talking about, in both directions. Having a ton of manufacturing means we would have opportunity costs in the other direction. We've traded the manufacturing we had 50 years ago for other things. It's not possible to specialize in "everything."

sounds 2 days ago

> There was no capital investment, because why pay to have a huge line that isn't being used.

I'd like to suggest that what Tek did worked back then, and the same insightful leadership wouldn't simply copy the solutions from 20 years ago.

Thus the problem is "there was no capital investment, because there was no visionary leadership," and the problem is also that the short-sighted leadership simply saw "a huge line that isn't being used," instead of a workforce ready to take your company into the next century.

> Military are terrible customers ... You spend a lot of effort and business just evaporates.

This only applies to companies that lack vision, that seem to only be able to keep stamping out the same widget as 20 years ago.

> Tek already struggles to compete against cheaper, adequate solutions.

Seems like a lack of leadership, instead of an existential proof that Tek can't compete.

> We've traded the manufacturing we had 50 years ago for other things. It's not possible to specialize in "everything."

This actually sounds like the kind of visionary leadership that Tek or the larger Portland metro needs.

If I sound combative, please only read this in a curious voice. What kind of visionary leadership could rise from the ashes of the Silicon Forest?

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mlyle 2 days ago

> > There was no capital investment, because why pay to have a huge line that isn't being used.
I was specifically talking about war materiel. The US is not doing great at making things like low-tech artillery shells, because we've not had a large line running for them for quite some time. In retrospect, it would have been better to have a bigger stockpile and to be paying for more line capacity.
Things are steadily ramping, but it's taken a good year and a half to get to the quantities we now want.
> > Military are terrible customers ... You spend a lot of effort and business just evaporates.
> This only applies to companies that lack vision, that seem to only be able to keep stamping out the same widget as 20 years ago.
Nah, vision or not: political winds change and projects get killed. Being involved in an early program is exceptionally high risk: you need to start ramping to do the whole thing and you may get a good return on capital or a pittance.
> Seems like a lack of leadership, instead of an existential proof that Tek can't compete.
The overwhelming majority of the test equipment marketplace has commoditized out. This is a problem if you're still mostly a test equipment vendor. It would be even worse if Tek had higher costs.
> This actually sounds like the kind of visionary leadership that Tek or the larger Portland metro needs.
In those sentences, I'm not talking about Tek: I'm saying the United States has, as elementary economics predicted, specialized in areas where it has a comparative advantage over other countries. It is not possible to have a comparative advantage in "everything."

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- ddingus 2 days ago
  
  >Nah, vision or not: political winds change and projects get killed. Being involved in an early program is exceptionally high risk: you need to start ramping to do the whole thing and you may get a good return on capital or a pittance.
  Often, people wonder about the higher cost associated with government cobtract work. One does need to cost out those risks and include them in project costs.
  "Elementary Economics"
  Economics is not a science. We cannot execute the scientific method on Economics because we have no way to repeat and or establish controls needed to understand results.
  Policy drove "elementary economics", and made it predictive. And the policy was driven by strong advocacy dressed up as real science too. That advocacy was produced by people of significant means wanting more and more control.
  Change the policy, and we will see the Economics change too.
  Fact is we gutted a lot of small to mid sized manufacturing, and with it went many strong opportunities for people to take advantage of. Those people require help to make it because the opportunities they did find, if they found them at all, do not pay enough to make it, or should they, the labor burden and often painful scheduling makes for tired people lacking often the means and energy required to build skill on their own.
  
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  hollerith 2 days ago
  
  >Economics is not a science. We cannot execute the scientific method on Economics because we have no way to repeat and or establish controls needed to understand results.
  You could say the same thing about mathematics, but it remains the case that it is useful to know some math.
  
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  ddingus 2 days ago
  
  Of course math is not a science either. Ultimately, math is a reasoning tool and in the economic context, it is not a complete tool.
  There is policy, and that has a major league effect on what will make good economic sense.
  The current policy could change, and that would impact what is worth what and why and the math can tell us what it always has.
  Here is one:
  For a long time we have ignored anti monopoly laws.
  When competition is present, margins are less, people tend to get higher value for the dollar. When it is not present, margins are higher and people get much less value for the dollar.
  Right now, big grocery is wanting to do one more merger to basically put Krogers in charge of grocery stores, with its competition being Walmart and maybe Amazon.
  So far, each merger has reduced the number of products available to people and higher prices. But someone somewhere is banking more and paying less.
  I like competition. I like higher value for the dollar and choice in business. I bring this up because I personally dislike Kroger and it is all about the much lower value per dollar.
  How this all goes is political. Policy may be to preserve competition to prevent price gouging and all that comes with a monopoly.
  The math may say more dollars are made by having one company, but that same math says it comes at the expense of the people too.
  Does not, and I would argue, should not go that way.
  
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ddingus 2 days ago

And by the way the cost reductions that the guy above was talking about and other things were all in progress. And there was plenty of capital to invest.
What happened was the MBA crew took it right out of the fucking company, gutted the rest and we have a a shell of what we had before today.

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mike50 2 days ago

All of the contemporary competitors of Tek were also bought out except for Keysight. Why? Low margins an incomplete lineup and commoditization of the asics.

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ddingus 2 days ago

Tek would have cost reduced that gear and it was in progress when it was all torn down. Tek would have also continued to make more great gear. That spirit stopped.

Tek was also getting nice returns on several of the more successful startups.

Vollum was no fool.

Snark mode = 1

You mean traded our future for baubles and trinkets today?

Yeah, I agree!

Snark mode = 0

I will ask again:

Where does our next generation of skilled labor come from?

And don't tell me we won't need it because automation. I have automated many things and will do so again, but I never managed to find a robot looking for a good meal, or a home, etc...

At some point we need to look at this in terms of our own, or we will be living in even more of a dystopia than the already growing one threatens to be.

If we do not ask and answer the question, "how do our future leaders and builders, mechanics make it?", they won't. And the cost on that is a lot higher than many will admit it is.

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mlyle 2 days ago

> Where does our next generation of skilled labor come from?
I don't really want to talk to you because you're being deliberately abrasive. But I will leave you with one answer.
Your question presupposes that all the other areas of the economy that have eclipsed still-growing manufacturing do not produce "skilled" labor. I do not think this is a valid assumption.

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- ddingus 2 days ago
  
  Hey I marked the snark. I guess I don't want to talk to you either if you can't handle a little real discussion.
  And that helps nobody, yourself-included. There's nothing on this thread that you should turn your back away from. There's nothing on this thread that should even hurt!
  And finally, I'll always talk to the other people. Keeping that door open is the only way we get progress. Just consider that for the future.
  What's your calling abrasive is passion. I actually do really give a shit. Consider that too.
  
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  mlyle 2 days ago
  
  There's infinite people to talk to on the internet-- indeed there's more people to talk to on this thread that share your views than I can manage. I don't need to pick the sub-branch which is unnecessarily unfriendly.
  edit: I care, too. I mean, I went into education where I'm teaching future high-skilled labor and building human capital ;) And--- where I am, the kids are alright.
  
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- ddingus 2 days ago
  
  It does produce some skilled labor, but those skills aren't always the same as the ones needed to make things and make them well and make them inexpensively and make them sustainably.
  And by percentage it's no replacement for what we had before. All one needs to do is take a look at massive numbers of young people looking for opportunity not able to find it to understand what this all means.
  
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