Why America’s Largest Tool Company Couldn’t Make a Wrench in America | Hacker News Reader

Why America’s Largest Tool Company Couldn’t Make a Wrench in America

wsj.com

20 pointsimpish920819 comments

>Ex-workers said the automated method was supposed to increase the yield well above the traditional toolmaking process, in which more than half of a billet’s steel is trimmed away.

So, in chasing the pennies lost in material cost of the billet steel, they threw away a billion dollar investment. That material could be sold as scrap, or recycled and reused.

The whole point of the forging process is to orient the grain structure of the steel to maximize strength in the desired places. It seems obvious that you're going to have to trim some material to make this happen. I've seen scrap recycled and sold in a job shop, with the volume that comes with mass production, they could probably get a far closer payback for their scrap to the original costs.

This whole thing seems more like management failure, rather than anything intrinsic to the labor or US market conditions. Had they started with a goal of turning out quality tools, then working towards production increases and cost reductions after that point, it might have worked out. The chasing of the next quarter's profit seems to always be the wild goose chase that results in failure.

It's even worse than that. According to the article, the sockets were basically alright, perhaps with some QC issues. They could have paused the automated line for the ratchets, ramped up hand production of them using the knowledge from their existing facility in the same region, and been selling sets that were mostly produced by automation. Instead they just threw the whole thing away?

I've got to wonder how much the problem is due to consolidation (see: infamous toolguyd picture of power tool brands). If there were a healthy market of competing independent companies, when SBD executives couldn't figure out how to get it up, another company would have bought the complete factory and made it work.

I find it amazing that so much VC money is (was?) slushing around trying moonshot ideas like littering sidewalks with e-scooters and hoping loose change falls into them, but there is no motivation to start new companies doing traditional things in stagnant markets. I mean a "$90M factory" is like a tenth of one Instagram [0] ? I guess it's just not exciting enough.

[0] an old arcane unit of a currency that has since become obsolete due to its small size

This reminds me of an American tool company called Chapman Manufacturing. They have been manufacturing driver bits for a really long time, and hold government contracts to keep producing more because the military really liked the product.

My impression was of a company that had invested in doing one thing really well, for a long time, and focused on continuing to deliver a quality product in lieu of expansion, and chasing profits.

This reads to me like Craftsman, in constantly chasing the dime, spread its quality competency far too thin allowing cracks to form in how the business was run. It makes sense, automation should have been a game changer for them, but became a boondoggle.

SnapOn hasn't been mentioned! 4 billion USD, 12,000 employees (mostly union), 100% US made. They sell direct to consumers now (they used to only service whole plants/shops). Originating in my neck of the woods - Kenosha & northern IL - their tools are held in high regard everywhere I've gone and jobs there are highly sought after. To call Craftsman an 'American' tool company is a stretch(Made in US "with Global Materials"), and from what I can tell, they're only the largest when you add in their sister subsidiaries (deWalt, Stanley, BOSTITCH).

SnapOn stuff is mostly great, albeit unreasonably costly. I also see a lot of SnapOn products these days that I have a hard time believing they developed and manufacture 100% in-house. Think CAN/OBD readers, digital torque wrenches, and other electronic tools. I mean, maybe it's all made in the US, but that seems pretty implausible.

The software for SnapOn is definitely US-based (Chicago suburbs) although from what I've heard through the grapevine it's a low paying revolving door.

From the article it looks like there were 5 different executives overseeing the project during an approximately 4-year time frame. This sounds like a management failure to me rather than some failure of the American workforce or ingenuity.

Interestingly, the main executive involved got in some trouble with the SEC: https://www.sec.gov/news/press-release/2023-111

"Ansell received undisclosed compensation that consisted, in part, of $280,000 in personal expenses he charged to the company."

So there may be more going on than just poor oversight...

Most large corporations in America have a weird incentive structure problem. Nobody cares if the real work is done as long as their own jobs are protected.

This obviously means that if a savvy exec is putting the heat on the VP, the heat will transparently propagate to the lowest level leaf nodes worker. None of the middle layers take no responsibility ever. The managers will even go to the extent of firing the leaf nodes than admitting failure.

If the incentive structure were changed so that management gets fired first, everything will get produced automatically.

You can delegate authority, but you cannot delegate responsibility.

Companies regularly ignore this with enormous consequences to actual productivity

This is what happens when we let accountants run companies rather than engineers and company directors bow to shareholder demands to squeeze out every last cent of profit. In practice, modern economics is more about money than people—and that has to end badly.

This story is more than just a bad decision by Stanley, it's of strategic national importance, moreover it's not just the US but also a problem for most Western countries. If it's not reversed soon then it'll be irreversible and the West will be fucked. A reminder of the know-how that we've lost:

https://en.wikipedia.org/wiki/Military_production_during_Wor...

https://en.wikipedia.org/wiki/United_States_aircraft_product...

> This is what happens when we let accountants run companies rather than engineers

While I agree with you in the essence of what you’re saying, you should replace “accountants” with “MBAs” or “CFOs”. Most accountants don’t care about how the final balance sheet looks, they care about the flow of money itself. I have gained a lot of respect for that, as I’ve understood it more over the years.

Accountancy is nothing but “financial engineering”, really. They don’t decide on the budgets, they just code it in.

If a finance person is put in charge of a company it is time to leave that company. Finance people inevitably optimize for short-term gains and tend to lack any instinct for the long term. It is not their fault. It is all they know. They are hammers in search of a nail.

You completely missed my point.

An accountant may be dealing with finances but they are a very different role from that of a CFO.

In general you also don’t put an accountant “in charge”, period, just as you don’t put a sysadmin “in charge”. It doesn’t make sense.

It’s also untrue that financial people “inevitably” optimise for short term gains. Of all people they’re often the ones best placed to optimise for long term. But they don’t necessarily understand the heart of the business, so they shouldn’t be in charge either if it’s the case.

Agreed, correction accepted. (Using 'acountants' in a loose pejorative sense is a 'disease' many of us have caught, it's good to be corrected.)

> moreover it's not just the US but also a problem for most Western countries. If it's not reversed soon then it'll be irreversible and the West will be fucked. A reminder of the know-how that we've lost.

This became very apparent in europe after the start of the war in ukraine. The west needs it's own manufacturing to keep its global significance. The short term greed of globalization has resulted in a massive geopolitical blunder.

"The short term greed of globalization has resulted in a massive geopolitical blunder."

Agreed, but this 'thinking' has been so ingrained as the norm since the early 1980s—the Reagan-Thatcherite era—it's almost set in concrete. Seems to me it's not going to change anytime soon, unfortunately.

https://archive.is/RQev4

Shoutout to ChannelLock tools, they know how to build a wrench in America because they never stopped in the first place.

“We had a group of folks very committed to making it work,” he said. “We had to come up with technology that had never been used before.”

So, they built a $90m factory and moved staff there for a method that wasn’t even tested?

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