Couldn't agree moreOriginally Posted by Rich Engelhardt
Contributor
Couldn't agree more
Contributor
I think modern manufacturing has made it far easier to make tools of similar enough quality to the high quality tools that Starrett makes for far less money. I mean, all of the iGauging stuff I've bought is definitely plenty accurate for making furniture. And I've bought plenty of Starrett stuff over the years. But it just doesn't seem like you need to pay $200 for a combination square that's square anymore. I mean, the PEC stuff is 30% cheaper and made in the USA already, right?
That said, that $15 Irwin combination square from THD is now and has always been unusable.
Contributor
We'll see.
It looks like MiddleGround Capital owns a bunch of specialized auto racing parts and medium scale industrial equipment manufacturers. So they could just be looking to expand their portfolio and add a marquee name to the list. And, in theory, the businesses under their umbrella do have a lot of similarities, so it's possible that they could use these connections to enhance the quality and productivity of multiple companies. It could actually benefit Starrett and improve their products. Could, I say.
I agree that private equity firms don't have a good reputation. But a lot of that bad reputation was built on them buying retail businesses and then leveraging them with huge amounts of debt in a gamble to quickly explode their growth. And if that failed, they could still turn a healthy profit by selling off their retail spaces and other assets. So it was kind of a win/win scenario for them. Either you grow the company and get rich, or you bankrupt the company and get rich in the sell-off. However, with the collapse of the commercial real estate market, that's not really the case anymore. These days, it's really hard to get rich off of bankrupting a company.
Now, I'm not saying there aren't still ways to turn a profit off of ruining a company. I'm just saying that the old ways of ruining companies to get rich don't really work anymore. So I'm betting that MiddleGround Capital at least has plans to improve Starrett. And judging from the other companies they own, I don't think their plans include taking the name and slapping it on a bunch of low-quality products to sell to the general public. Could be. But that's not what they've done before.
Now whether or not they actually benefit Starrett in the long run remains to be seen. But my guess is, that is their goal.
Contributor
I'm not sure they are planning to gut Starrett at all. Looking at their list of companies I think they are more like Berkshire Hathaway in that they purchase companies and help them flourish. Time will tell. Here's a link of that lists their holdings.
https://middleground.com/companies/
Contributor
Doug Starrett has been a decent steward of the company for many years. I hope that this transition benefits the 1,800 people that work at Starrett's. The reason the tools are such high quality is that the people who work there are good at what they do. Many of my relatives and neighbors have worked there for decades. Perhaps the transition from a family owned company to a private equity owned company can preserve the human capitol that makes the company so valuable.
Contributor
s/Mitutoyo/Starrett/g
no comprendo your post
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
When private equity companies are mentioned, it always makes me think of that scene in Good Fellas where the main characters are burning down the restaurant for insurance money after maxing out the debt on its business credit.
Member
Wasnt that Sopranos?
Contributor
As someone who has worked in private equity for the last 24 years, I understand the negative comments as most folks are only familiar with the failures and misdeeds by some unscrupulous firms because that’s all that makes the evening news and headlines. I work for a firm that invests pension money in private equity funds and the returns (which have outpaced the public markets) we have generated are going to pay the retirements and health care of hard-working everyday people. I can tell you from first hand experience that the majority of the private equity managers are interested in growing businesses and helping them succeed, and sometimes that does involve cutting costs to become more efficient. Unlike most of Wall Street, PE managers invest a significant portion of their own wealth alongside investors so that interests are appropriately aligned. As a specific example, you might be familiar with the company 80/20 which makes aluminum extrusions. They were purchased by a private equity firm a couple years ago as the founder was looking for growth capital and to professionalize the management of the company as part of a sucession plan. The company has flourished under the new ownership. I don’t know Doug Starrett but I know that he is 69 years old and probably looking to retire. There may not be another family member or obvious heir apparent to take over the company and he may be looking to partner with a private equity firm to develop such a plan. I would encourage folks to educate themselves a bit before making blanket disparaging comments about an entire industry.
There is a very fine line between “hobby” and “mental illness.” - Dave Barry
Contributor
It’s a nerdy regular expression. Replace the first with the last of your previous post
Contributor
Andrew, I wish life was simple but it's not.
I stayed in management for 14 months before resigning my position and returning to a bottom feeding field engineering position. I was placed in a position where it became a matter of performing a VPs demands which meant giving up my moral values. About 2 months after I resigned, the VP was fired by J&J. I returned to a field engineering position. 6 1/2 years later, we were sold to GE. For the record I never did agree with Neutron Jack's antics. J&J offered 401Ks after they bought us. My wife and I found it an easy way to save money for long term savings. Later GE did the same and we went with one there too. If you don't see it, you don't miss it. Up until last month I owned GE and GEHC stock. Still own some GEHC stock. Was I a rich shareholder? Hardly but I did own some and still do. I was told that most major corporations have switched to improved and increased 401K strategies versus full pensions. A former coworker who is also now retired joined about 2012 and he got a hybrid pension/401K offering. In my 34 years working for 2 major corporations, I survived 6 RIFs, IIRC.
Andrew, I was 14 when my driller father woke me up one morning at 0100 asking if I wanted to make some money. The drill bit was wore out and the derrick hand had shown up drunk on a night when Dad had to make a trip. At age 15 I began roughnecking morning tower and going to HS days. I finished HS that way. My younger brother did the same. Christmas Eve of 1966 south of Newton, IL I worked all night on the floor of an untarped rig in the freezing rain as we fished to recover 11 drill collars that were left in the hole after a collar washed out. At age 17 I promised myself there had to be a better way to make a living. I found one. My father died in a doghouse on the floor of an oil rig in 1972. I am proudly former oil field trash. BTW, I have screwed on a few Hughes bits but that was several decades ago.
I wouldn't begin to say that GE or any corporation are always good. At the same time, I would not condemn all of them either.
A company that goes out of business supports no workers. If a company's major market switches to a buy cheap, quality be damned place in the market, management is put in a difficult and complex situation. Either reduce costs, expand the market share, seek new markets or go out of business. Labor wages and benefits are costs, meeting environmental standards produces costs, higher priced raw materials are costs, shipping costs, taxes, etc. Thus, for a company to stay in business and support some workers, manufacturing may have to move overseas. You can buy any quality level you desire overseas, it just costs money. Those are realities.
Last edited by Ken Fitzgerald; 03-21-2024 at 12:22 AM.
Ken
So much to learn, so little time.....
Contributor
It was Goodfellas.
It may also have been in the Sopranos (which I have never seen) but Goodfellas pre-dates the Sopranos.
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
Couldn't miss the name, is this your side gig?
https://www.baincapital.com/
Contributor
No aspersions meant to PE firms, but I’m glad I already own my Starrett tools.
Member
There is a fair bit of polly-anna in these posts. " You may be the best buggy whip manufacturer in the world, but that is of little use when people are buying cars." I regret not buying more Stanley tools in the earlier'70s.They were still making good tools in those days. Those of you who love Starrett tools should not make my mistake.
Posting Permissions
Reply With Quote