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Starrett goes private
- Thread starter animal12
- Start date
- Replies 169
- Views 6,335
dalmatiangirl61
Diamond
- Joined
- Jan 31, 2011
- Location
- BFE Nevada/San Marcos Tx
Sounds like the new "Made in China" Starrett.......
amaranth
Aluminum
- Joined
- Apr 5, 2002
- Location
- Manchester, MI USA
I don't know of many positive outcomes when a company gets bought by a VC.
Of the ones I can think of, even if the company brand survives, it's a ghost of the original company.
Of the ones I can think of, even if the company brand survives, it's a ghost of the original company.
Starrett has been coasting off the China stuff for like 20 years now. Their stock price has dropped from $28/share in 2008 down to about $4/share in recent times. All while Mitutoyo and other competitors grew 4x during the same timeframe.
Starrett has had a now hiring sign out front, walk ins welcome for a few years now. The staffing agents in the area say they get 1 candidate every week or 2, and if they hire them they quit within a week.
They make their $ on legacy items that people dont realize is made in China now and no longer in the USA like we all remember. I have purchased junk from them in the last 15 years and l no longer buy there products.
I grew up with the presidents kids and grew up in town until I graduated high school in 2004. Its the hometown team and I wont buy there products due to quality issues anymore.
Sucks because they are essentially the towns largest employer by far.
Starrett has had a now hiring sign out front, walk ins welcome for a few years now. The staffing agents in the area say they get 1 candidate every week or 2, and if they hire them they quit within a week.
They make their $ on legacy items that people dont realize is made in China now and no longer in the USA like we all remember. I have purchased junk from them in the last 15 years and l no longer buy there products.
I grew up with the presidents kids and grew up in town until I graduated high school in 2004. Its the hometown team and I wont buy there products due to quality issues anymore.
Sucks because they are essentially the towns largest employer by far.
Dan from Oakland
Titanium
- Joined
- Sep 15, 2005
- Location
- Oakland, CA
"which provides a meaningful premium cash value to our shareholders". Yea, OK!
Bridgeport just got a new daddy as well.
Bridgeport just got a new daddy as well.
I hate this so much, I'm not one for nationalization of private industry but having a metrology company within our borders seems like a national security priority. I'm to stupid to know the right answers but gutting the last company that makes micrometers here feels like sawing off the branch one's sitting on.
I am sure some one will chime in that company x makes whatever wizz bang laser measurement device in California or New Hampshire but every job I've ever run starts at the saw with a scale then to the lathe with calipers and mic's. The cmm and the lasers come later. If we can't supply ourselves with basic equipment in a time of need....
I turned 40 and now I sound like my dad
I am sure some one will chime in that company x makes whatever wizz bang laser measurement device in California or New Hampshire but every job I've ever run starts at the saw with a scale then to the lathe with calipers and mic's. The cmm and the lasers come later. If we can't supply ourselves with basic equipment in a time of need....
I turned 40 and now I sound like my dad
The problem is we don't look out for our own like we used to . Now I think it's just a matter of time till they totally disappear .I hate this so much, I'm not one for nationalization of private industry but having a metrology company within our borders seems like a national security priority. I'm to stupid to know the right answers but gutting the last company that makes micrometers here feels like sawing off the branch one's sitting on.
I am sure some one will chime in that company x makes whatever wizz bang laser measurement device in California or New Hampshire but every job I've ever run starts at the saw with a scale then to the lathe with calipers and mic's. The cmm and the lasers come later. If we can't supply ourselves with basic equipment in a time of need....
I turned 40 and now I sound like my dad
animal
rklopp
Diamond
- Joined
- Feb 27, 2001
- Location
- Redwood City, CA USA
Read The Lords of Easy Money by Christopher Leonard for the tale of private equity destruction of Rexnord. The brass at the top are not interested in making widgets, they’re interested in flipping companies while loading them down with debt.
morsetaper2
Diamond
- Joined
- Jul 2, 2002
- Location
- Gaithersburg, MD USA
Private Equity buyout will be the kiss of death for Starrett. But the shareholders of the PE firm will make out. While everyone else will lose.
PeteM
Diamond
- Joined
- Jan 15, 2002
- Location
- West Coast, USA
It seems this is too often the US way—turning a company that once served its customers well into a financial play. The concurrent Boeing thread is another example, with that one done from within.
There are still a few cases where buyers want to operate the companies they buy, though. Danaher is likely still one example.
Our world-beating GDP won't amount to much if it becomes mostly crumbling LBO's, financial derivatives, insurance firms, credit card companies, over-priced healthcare, hidden money to politicians, and the like.
There are still a few cases where buyers want to operate the companies they buy, though. Danaher is likely still one example.
Our world-beating GDP won't amount to much if it becomes mostly crumbling LBO's, financial derivatives, insurance firms, credit card companies, over-priced healthcare, hidden money to politicians, and the like.
amaranth
Aluminum
- Joined
- Apr 5, 2002
- Location
- Manchester, MI USA
The problem is the way things are now, the board has to maximize value for the shareholders. That's job 1, not making widgets or worrying about national security or having any concerns about the country.
For a long time, companies could be publicly traded and still be concerned primarily about making quality products. I think the MBA scourge killed that.
I'd take exception to that comment on Danaher, Tektronix is just a shadow of what it used to be before they bought them.
For a long time, companies could be publicly traded and still be concerned primarily about making quality products. I think the MBA scourge killed that.
I'd take exception to that comment on Danaher, Tektronix is just a shadow of what it used to be before they bought them.
M.B. Naegle
Diamond
- Joined
- Feb 7, 2011
- Location
- Conroe, TX USA
The problem is more than just Starrett. It's very hard, if not impossible for one or a few companies to stay afloat when everyone else is making all the money going overseas. I think the big issue with Starrett was they were no longer innovating. All of their sales are from legacy tooling practices (IOW, "We've always bought Starrett, because someone else is paying for it.") or from sentimental perspectives. Sentiment is fantastic, but dollar bills don't give a hoot about it.
If Starrett HAD maintained the high level of quality that many expect in their legacy tools, their prices would have been through the roof. There's no way they could make old school stuff here and train all their staff to keep up with all the little details that make the difference, and compete with import prices when a majority of the market simply doesn't care where their stuff comes from, so long as it "works". If they had scaled back their market to only service those of us who care, they wouldn't have been able to maintain the threshold of supporting all their products and selling enough of everything to keep the lights on.
My company has a line of "old school" products that have import counterparts. We keep at it because we scaled back to the point that they are a specialized line and we don't attempt to compete with the import prices, but even if our own stuff was all we had it would be very hard to keep the lights on. We import and support products from Europe and that pays most of the bills enough that it enables the legacy stuff to survive. Our industry suffered the same decomposition as other industries from imports decades before my time, and my hope is that if we hang onto our own lines long enough, we can keep making improvements to them and eventually it can stand on it's own feet again. While the imports are flooding the market with bulk low quality product, we eventually will have the resources and product line to retake the market because of the reputation we've built.
I think it's fantastic that Starrett still sells and supports so much of their legacy tools, but that's not what keeps the lights on. If they had been making, developing and pushing the limits of digital measuring tools, CMM, probing, carbide tooling, and all the other stuff associated with "modern" metrology and cutting tools, AND been doing all of it here in the states, I think they could have made it. But choosing instead to just put their name on the same imported stuff that the other guys are importing, it's not long before they become another office building with all of the factory floor half the world away. This problem goes back decades, and it came together in small mistakes made by Starrett and every other company and consumer in our nation. Every time we choose to buy something based on how cheap it is, there are perfectly valid reasons for those decisions, but it adds to this bigger problem.
I still buy Starretts imported stuff, often for the name, mainly because I'm hoping that my little contribution is at least paying for another American to look in the box and see if their foreign crew spelled "Starit" right. It's the same reason I drive Fords, GM's, and Chryslers instead of a Honda's, Kia's, and Toyota's (though now Toyota makes stuff in Texas! How the world flips around.). I hope that by buying American I'm supporting my neighbor, even if he does a crummy job every now and then, because If I don't support him he'll be gone and nobody will be around to take his place.
It reminds me of a little town I used to live where everyone complained about the lack of restaurant variety in town. A new restaurant came in and everyone complained that "they use canned beans?!" and other nit-picky details and didn't support them. They closed and everyone kept complaining about having nowhere new to eat.
I'm part of the problem as much as anyone. We bought a Doosan over a Haas because the Doosan was more advanced, higher quality, and due to the crap reputation Haas has made for themselves, but maybe we should be supporting them while we can.
If Starrett HAD maintained the high level of quality that many expect in their legacy tools, their prices would have been through the roof. There's no way they could make old school stuff here and train all their staff to keep up with all the little details that make the difference, and compete with import prices when a majority of the market simply doesn't care where their stuff comes from, so long as it "works". If they had scaled back their market to only service those of us who care, they wouldn't have been able to maintain the threshold of supporting all their products and selling enough of everything to keep the lights on.
My company has a line of "old school" products that have import counterparts. We keep at it because we scaled back to the point that they are a specialized line and we don't attempt to compete with the import prices, but even if our own stuff was all we had it would be very hard to keep the lights on. We import and support products from Europe and that pays most of the bills enough that it enables the legacy stuff to survive. Our industry suffered the same decomposition as other industries from imports decades before my time, and my hope is that if we hang onto our own lines long enough, we can keep making improvements to them and eventually it can stand on it's own feet again. While the imports are flooding the market with bulk low quality product, we eventually will have the resources and product line to retake the market because of the reputation we've built.
I think it's fantastic that Starrett still sells and supports so much of their legacy tools, but that's not what keeps the lights on. If they had been making, developing and pushing the limits of digital measuring tools, CMM, probing, carbide tooling, and all the other stuff associated with "modern" metrology and cutting tools, AND been doing all of it here in the states, I think they could have made it. But choosing instead to just put their name on the same imported stuff that the other guys are importing, it's not long before they become another office building with all of the factory floor half the world away. This problem goes back decades, and it came together in small mistakes made by Starrett and every other company and consumer in our nation. Every time we choose to buy something based on how cheap it is, there are perfectly valid reasons for those decisions, but it adds to this bigger problem.
I still buy Starretts imported stuff, often for the name, mainly because I'm hoping that my little contribution is at least paying for another American to look in the box and see if their foreign crew spelled "Starit" right. It's the same reason I drive Fords, GM's, and Chryslers instead of a Honda's, Kia's, and Toyota's (though now Toyota makes stuff in Texas! How the world flips around.). I hope that by buying American I'm supporting my neighbor, even if he does a crummy job every now and then, because If I don't support him he'll be gone and nobody will be around to take his place.
It reminds me of a little town I used to live where everyone complained about the lack of restaurant variety in town. A new restaurant came in and everyone complained that "they use canned beans?!" and other nit-picky details and didn't support them. They closed and everyone kept complaining about having nowhere new to eat.
I'm part of the problem as much as anyone. We bought a Doosan over a Haas because the Doosan was more advanced, higher quality, and due to the crap reputation Haas has made for themselves, but maybe we should be supporting them while we can.
Thats the reason I went in to business for my self 30+ years ago . If I'm gonna fail I can do it by myself , don't need no douche bag in a fancy car to do it for me . I worked for companies in the middle of Silicon valley in it's hey day & had stock options at $ 0.10 & 0.15 & I still lost money on them . People used to tell me I had it made workin for my self , I'd tell them the only thing guaranteed when ya work for yerself is ya get to have sex with the boss . Took a bit to sink in for some .
animal
animal
I’m skeptical that Starrett makes it out in one piece, but this capital firm has a portfolio of manufacturing industries that are still in the USA. I hope it works out, I doubt it.
I wonder where we’ll be able to get decent combination squares from if they wind up going bankrupt
I wonder where we’ll be able to get decent combination squares from if they wind up going bankrupt
metal-ica
Cast Iron
- Joined
- Jan 19, 2019
I'm conflicted because I'm very much a capitalist. BUT, we as a nation subsidize farmers for food security. Shouldn't there be a way to subsidize our steel mills / rare earth mines / metrology & manufacturing companies for the greater good of national security?
I don't have the answers but here are a couple ideas
- tax cuts / incentives for these types of companies.
- import tariffs
- mandating dod suppliers purchase only domestic tools
- Tesla benefits greatly from carbon credits and like it or not....they're the most American built car on the road...something similar to this?
If it's private equity buying Starrett one thing is for certain .... it's going to hell and that's damn shame.
I don't have the answers but here are a couple ideas
- tax cuts / incentives for these types of companies.
- import tariffs
- mandating dod suppliers purchase only domestic tools
- Tesla benefits greatly from carbon credits and like it or not....they're the most American built car on the road...something similar to this?
If it's private equity buying Starrett one thing is for certain .... it's going to hell and that's damn shame.
TGTool
Titanium
- Joined
- Sep 22, 2006
- Location
- Stillwater, Oklahoma
In the early 80's I was working for an electrical equipment manufacturer here in the US that had multiple plants all over. Our plant was just one cog, and the department I was in was a small part of the plant. So we were looking at purchasing our first NC machine for use in the toolroom. We had a Japanese machine in mind and I was given the assignment to look into the company and see if that company looked sound before we committed.
That was eye opening. This company had been a manufacturer of mostly manual machines but had been struggling and might have been headed for failure. Rather than let the company just sink, it was paired up with a larger machine tool manufacturer for support and now had a hyphenated name (bigger guy's name came first) Furthermore, both companies were owned by an enormous trading company that did everything from ship building to chemicals. Were they a sound business? They could have bought our whole corporation out of their small change box.
The idea that the country considered its industries and small businesses important enough that they wouldn't let them fail, and in fact would connect competitors to support one another was so foreign to the US model of sink-or-swim it made my head swim. The Japanese economy isn't perfect, by any means, but they had some thoughts we might have benefited from as we let ours get hollowed out in favor of profit for a few. I'm just not clear that the theory of "let them get rich however they can and everyone will benefit" has really worked for us.
That was eye opening. This company had been a manufacturer of mostly manual machines but had been struggling and might have been headed for failure. Rather than let the company just sink, it was paired up with a larger machine tool manufacturer for support and now had a hyphenated name (bigger guy's name came first) Furthermore, both companies were owned by an enormous trading company that did everything from ship building to chemicals. Were they a sound business? They could have bought our whole corporation out of their small change box.
The idea that the country considered its industries and small businesses important enough that they wouldn't let them fail, and in fact would connect competitors to support one another was so foreign to the US model of sink-or-swim it made my head swim. The Japanese economy isn't perfect, by any means, but they had some thoughts we might have benefited from as we let ours get hollowed out in favor of profit for a few. I'm just not clear that the theory of "let them get rich however they can and everyone will benefit" has really worked for us.
PeteM
Diamond
- Joined
- Jan 15, 2002
- Location
- West Coast, USA
"I'm conflicted because I'm very much a capitalist . . ."
There's a big difference in my mind in old school capitalism, where companies competed to best serve their customers and new school financialization, where hedge funds and private equity look for opportunities to strip the real economy of productive assets, pocket the gains, and sell off the carcass.
In this case, it wouldn't surprise me to see the eventual buyer as a Chinese company that wanted to manufacture and sell slightly better, slightly more expensive, precision tools. Much like Lenovo after the IBM sale. Which wouldn't be terrible, but also a comment on the economic culture in the US after two generations of MBA's have been taught that the sole purpose of a company is profits for shareholders and a hundred reality TV shows, all that matters is being the sole winner at the end, regardless of how you lie, cheat, steal, or who you backstab to get there.
There's a big difference in my mind in old school capitalism, where companies competed to best serve their customers and new school financialization, where hedge funds and private equity look for opportunities to strip the real economy of productive assets, pocket the gains, and sell off the carcass.
In this case, it wouldn't surprise me to see the eventual buyer as a Chinese company that wanted to manufacture and sell slightly better, slightly more expensive, precision tools. Much like Lenovo after the IBM sale. Which wouldn't be terrible, but also a comment on the economic culture in the US after two generations of MBA's have been taught that the sole purpose of a company is profits for shareholders and a hundred reality TV shows, all that matters is being the sole winner at the end, regardless of how you lie, cheat, steal, or who you backstab to get there.
Superbowl
Hot Rolled
- Joined
- Feb 12, 2020
FYI- Personal computers became a commody. IBM is is not in the razor thin margin business of manufacturing commodity items so they sold out to Lenovo..
Often the sole winner is the only one still in business in the end. There are few rules in many industries, it is dog eat dog. Why??? Not because of the companies, it's because the vast majority of people want cheap stuff and you need to deliver it to stay in the game.
McDonalds food sucks, yet they put millions of small mom and pop restaurants with better food out of businees.
Feel free to open your own company and pay no attention to your profits. Just make the best possible widget. Take lots of time and be attentive to every customer's needs. Be truthful and tell your customers they can buy your product elsewere cheaper. Just don't ask me to be a shareholder.
I want maximum return on the money I invest so will place it with someone who will do whatever legally possible to achieve the highest possible profits..
