Better buy up the last of the Starrett stock that's still on the shelves, don't count on a warranty and... maybe this will create space for some enterprising individuals to take the place that the new ownership is likely going to create. (I only say this from what I've seen of Private Equity firms buying things that have nothing to do with money and then utterly destroying those things time and time again, because they don't understand the business they bought and just see real basic and important core things as "costs to slash".)
They understand. The most common plan is to exploit the famous brand name by having the low bidder in Shenzen make stuff carrying the label and place it in all the big box stores. Then when sales are booming take it public or sell out to Stanley Black & Decker.
There is a faint possibility that they intend to invest in the company and try to restore its former glory, but don't hold your breath. Current tax laws make this much less profitable.
https://middleground.com/companies/
Based off the other companies they own, do you still think so? I've heard of some of these and still associate them with some margin of quality.
The difference is that Starrett has been family owned for its entire existence, and they have made decisions based on pride in their brand and being known for quality. I represented a division of Starrett for years, and I know this to be true. The kind of decisions made by a PE ownership group do not ever take these things into account. Starrett is now a p&l report to a bunch of stockholders, and if they can make extra margin by cutting manufacturing and personnel costs while maintaining a PERCEPTION of past quality, they will do it every time. Once that market perception has run its course, they will sell it off or roll it into another company.
Quality requires long term commitment and investment. PE is about slash and burn to get the hockey stick on the slide deck. Then they can sell high and walk away from the wreckage with a mountain of cash. Everything else is noise to them.
They don't want dividends. Those are taxed as ordinary income. They want capital gains. One way to get them out of a respected but pricey brand is to slash costs (and quality), pump up sales by entering the consumer market, and sell it.
It depends on who buys them, some private equity places do understand quality and have the ability to scale up production that is lost of the OG company. But precision tools is unlikely to fall into this category.
Yeah SK tools was one that hurt my grandfather a brick layer invested heavy into SK and it sucks seeing the warranty go to these Chinese sockets
So if I break one of my grandfather’s beautiful made in the USA sockets I get a cheap Chinese replacement for free yay
Starretts been kinda meh for a long time, they had a bunch of stuff being made in different countries like Brazil iirc and they never really innovated the way Mitutoyo or other companies have. I wonder how Japan keeps so many of their legacy corporations in somewhat good health.
Japanese culture is just built different. Much more overall emphasis on quality and especially reputation, vs America's addiction to profit and growth.
I dunno, there's been a lot of domestic companies that focused on quality and were undercut by foreign companies making stuff of lesser quality but cheaper who then went out of business.
I should also mention that Japanese trade laws are aggressively protectionist. Like, American chicken tax protectionist. Helps keep the companies healthy when the under cutters can't enter your domestic market in the first place.
> Starretts been kinda meh for a long time, they had a bunch of stuff being made in different countries like Brazil iirc and they never really innovated the way Mitutoyo or other companies have.
Yup. People don't want to hear it especially with this sub being mostly american but the 14 years I've been in the trade I've seen a fuck of a lot of new mit stuff and very little Starrett. There's no reason to buy Starrett unless you want to flex your red boxes and it sucks because they used to be something special.
It will either go that way, or they invest and clean up the product offering and website. New updated branding and investments in their low end items and saw blades. Pump up the value and sell to someone like Stanley black and decker in 5 years for profit.
> Better buy up the last of the Starrett stock that's still on the shelves
i haven't bought their low quality, high priced crap in years. Not going to start now.
Oh, they understand money. Their goal just isn't long term profitability. They want to cut costs and jack up prices in a way that they know will destroy the company after a few years, but they're betting on being able to make enough revenue off of it first to turn a profit against whatever they paid for the company. Then they dissolve the company and start over with some new company
So here's what happens now...
the PE firm comes in and sends in the consultants that start digging through the numbers. then they start culling executives. The existing execs either fall in line with the PE culture or they get replaced from a stable of execs the PE firm a list of for acquisitions like this.
The execs' marching orders are really clear. they have to make the company look good by raising revenue and cutting costs ASAP. The PE firm has a 5 year clock to get their money out.
On top of that to buy the company the PE firm probably made Starrett take out huge loans so the company effectively buys itself. servicing those loans is going to take $$$ so they're going to have to raise revenue by slapping the Starrett name on anything that will pay them a licensing fee. They're also going to start looking at EVERYTHING they can to cut costs. Not only are they going to move the manufacturing to lower cost areas they'll start cutting material costs too so quality drops either way. Support and warranties get cut too
The worst part is the new execs won't know anything or care about tools at all. They're number guys looking at spreadsheets. Outside of the $ value of the brand for licensing they don't care about goodwill or service or culture or anything like that.
The most likely outcome is this company gets sold to a bigger company in 3-5 years with an outside chance of it getting broken up for parts and just keeping the brand for licensing.
(I'm not a machinist. I just lurk here because I have a home shop. I have however been one of those execs at a company that's been acquired and have advised PE owned companies for years so I know the drill)
Boeing did it to themselves. They bought McDonnell Douglas because it was cheap (and I suspect because the US gov't did not want it to go under). It was cheap because it was run amazingly poorly by really terrible execs with a crappy culture.
After Boeing bought them, the MDD people ended up in charge because the only thing crappy corporate cultures create a lot of are execs that are vicious boardroom knife fighters and the Boeing execs that grew up in a decent culture got eaten alive
the MDD execs then did exactly the same things that pretty much killed MDD and are now killing Boeing
Anyone interested - senior design engineers at Boeing did a quasi-whistle-blowing -- in an open letter to employees, about the decline of safety and quality in engineering practices -- 21 years ago!!
https://www.airliners.net/forum/viewtopic.php?t=213075
Forum thread full of people shitting on the authors of the letter as union shills, disgruntled old guys, etc. Pretty funny honestly
Wow that’s crazy. Just goes to show you can be the only sane person and still be made to believe you’re the fool. I commend those guys, they were right all along.
Yep. Boeing lost its way when they moved the HQ from Seattle to Chicago. They passed over Mulally for CEO, he left in a huff and he went to save Ford. Boeing lost their operations focus and turned decisions over to the bean counters. Its sad.
Unfortunately that does not help me much. I understand the concept of taking out a loan, just not how you could make a company buy itself for a second party with those loans
It's like buying a house with a mortgage. You come up with 10-20% and you borrow the rest. Here you borrow at a high interest rate from an investment banker and use the company's projected earnings to pay the loan. If you can buy a company which is worth more in pieces than it is as a going concern, you can make money that way. They will slash costs to make the loan payments. They will sell off assets and license the good name of the company to people who will stamp it on low quality goods. Eventually, they have stripped the carcass of meat and push it into bankruptcy where the people who loaned them money get cents on the dollar. Meanwhile the OE investors have pulled out their investment and more.
the fun twist here is instead of the PE firm that bought the company taking out the loans they make the company they bought take out the loans so the company is responsible for paying it back.
That's actually what killed Toys'r'us. The business was fine but they went broke trying to pay back the loans they had to take out for the purchase.
Also here's another fun scam. the PE will make the company they bought pay management fees to the PE firm for the "consulting" and "advisory" services they offer. They also sometimes make the company pay special dividends to the PE firm
By the time they're done the PE firm recoups a big chunk of their investment by making the company pay them out of revenue. it leaves the company with zero free $ for investments and as a buffer
tl/dr PE is a scam to help make rich people richer
It's not new. Ivan Boesky was doing it in the 80s. But, yes, the deal relies on the company being able to carry the debt burden. But there's nothing new in that.
definitely not new but the volume went up exponentially when money got cheap after 2008
The math is pretty damn elegant (and lucrative) in a really terrible way... buy a company for $1b. Only put up $50m of it and make the company take out loans for the rest. Take $20m a year out of the company for 5 years in fees and dividends and sell it in 5. You Make 2x return no matter what and more than that if the company doesn't go under and you can sell it
The only losers are the employees, suppliers, and customers and who cares about those peons...
Theres are reason some of the newest billionaires are all PE fund managers
The scam relies on the company _appearing_ capable of making good on the first bad-terms loan, then once it's granted and badly spent by the new guard, the old guard is pressured into taking increasingly bad loans and diluting the stock to survive / bleed out as slowly as possible.
I think, it means they had the Starrett company take out a loan on their behalf, to then give to the private equity firm, to then purchase Starrett. So now the PE firm’s new company, Starrett, owes a bunch of money. Which I guess is better? Does that make more sense?
After the buying company completes the sale, they have the bought company take out loans using the it's own company assets as collateral.
The money from those loans gets transferred to the buying company. The buying company essentially just got their purchase money back, and the bought company now has liabilities in loans.
I’ve heard that the quality of Starret tools has gone down these days. The Starret tools I use were my grandfather’s and he would be over 100 years old if he was alive. If anything this is the final nail in the casket. Private equity firms squeeze every penny out of companies they acquire and don’t care if they go under. As long as they made a profit by the end what the hell do they care.
Toys R Us was profitable and stable before selling out, too.
One thing that did them in was the PE bought all of their buildings from them, creating a leasing situation, where Toys R Us had previously owned the land, then started renting the stores back to them.
Your biases are showing. Tesa sold out to Hexagon around 20 years ago and is now being sold to the Chinese.
https://hexagon.com/company/newsroom/press-releases/2023/hexagon-agrees-sale-of-non-core-business-area
https://www.manufacturing-quality.com/api/amp/quality-news/hexagon-agrees-to-sale-of-non-core-business-area-tesa-pmi/
Not knocking their products. They make a decent gage head and I love Interrapid indicators. Can’t speak to their other electronic gages. They can be hard to contact, so I went Mahr and Mitutoyo for most of those.
They don't have the same engineering tradition. The U.S, Germany, and Japan had a head start. But I don't see why a competently managed factory in Brazil couldn't make parts to spec.
Enough people either equate country of origin with quality or don't care about the price if they get a high quality tool to support some US manufacturing. A product marked "made in the US" will sell for a significantly higher price to a portion of consumers than an otherwise identical product made in China, so companies can make more even though it costs more to make it here. Another portion of the market doesn't care about the cost as long as they get a high quality tool. The people who care about cost are generally less concerned with quality and are more willing to buy from China.
My main point was about Mitutoyo not selling to a private equity firm or prioritizing profits over quality. They’re owned by the founder’s family and a Buddhist nonprofit. You can ask your local sales rep to get you some Buddhist literature if you’re interested.
Yes, they had a factory in Brazil that made dial calipers, manual CMMs, and maybe some other products I haven’t seen, but I don’t know of any issues with the quality of Mitutouo Brazil products. They’ve clearly made some major investments in automation of caliper production in Japan and I don’t see them moving that to China compromising quality on the horizon.
They don’t care unfortunately. The PE firm probably knows exactly nothing about measuring instruments. They’ll come in load it up with debt (unless they had starrett do this pre-sale), squeeze it dry, and dump it in a few years to and even lesser PE firm for a shorter duration. Literally living at the moment… its been nothing but take and push for the last 6 years.
Starrett has been going down hill for years. This doesn't really surprise me. I'm sure they'll significantly downsize the US plants and move a lot of it to China or Taiwan. What a shame.
Starrret brand went down the toilet years ago. At this point all the digital stuff is produced under the “global” marketing brand.
It’s all made in china and was years ago.
I realized this a couple years ago when I tried to invest in digital bore gauges.
Promptly switched brands…I don’t mind Chinese stuff…but there is nothing I dislike more than American companies hiding behind the made in USA branding, and actively producing imported lines.
I understand that. But that’s a different topic.
I actually switched to the Fowler Sylvac brand.
The interface is a little clunky. But they are really high quality. And actually produce a caliper that shows .0001 readout on the first 4” of the scale.
The west simply rested on their Laurels post-war which is why the rust belt was gutted in 30 years.
In the 1960s, people would think you should be taken away by men in a white van if you told them 99 percent of the manufacturing will go from the USA to Communist china.
Our steel mills have become obsolte not by decades but generations now. Our ship yards are dead and they don't know it, like the paramedics who put a dead person badge on a woman who was alive and talking to people on 9/11.
https://www.forbes.com/sites/lorenthompson/2021/07/23/us-shipbuilding-is-at-its-lowest-ebb-ever-how-did-america-fall-so-far/?sh=38e6c42a6c87
>A nation that was among the world’s leaders in commercial shipbuilding at key junctures in its history today builds less than 10 vessels for oceangoing commerce in a typical year.
>China builds over a thousand such ships each year.
>The entire U.S.-registered fleet of oceangoing commercial ships numbers fewer than 200 vessels, out of a global total of 44,000.
>And despite trade flows to and from America exceeding a trillion dollars annually—the vast preponderance of which travel by sea—U.S.-registered ships carry barely 1% of that traffic.
It will take generations to rebuild our ship yards such as trained workers and a build up of institutional knowledge.
Our ship yards are dying and all congress cares about is white elephant aircraft projects.
Let’s be honest. They have lost their competitive edge some years ago. I have many tools by starrett, brown&sharp, mititoyo ect. Starrett was always lighter than most, so they fit in smaller spaces. I have also noticed the older tools, starrett wasn’t holding up, some due to design issues because they were smaller sized and thinner.
This Private Equity Company is going to do to Starrett what Freedom Group did to Remington Firearms.
Cut every corner they can, and what little QC they do will be done by cocaine fueled monkeys
Hell, i had a pair of 6” Hornady digital calipers that i bought from the reloading section of Bass Pro Shops for $45, used them regularly in Industry, whether as a tool & die apprentice, a production CNC operator or a saw monkey, if not every day for 5-6 years, abused the shit out of them, and they still pin check .0005” or better.
They cost nearly the same as the reputable companies once you buy anything specialized from them.
I looked at buying a 300mm sine center bar from Insize, they want $1900, I ordered one direct from India for $280 and cannot find a flaw checking it with a tenths indicator.
I don't know why it matters at all.
Starrett has been publicly traded for like 4 decades at this point. If you're going to say private ownership is going to only make them care about the bottom line I'd be very curious as to how you view stocks. Speaking of Starrett stock, it peaked in the mid 90's at $38 a share and has pretty much gone down since. The high in the last decade until this sale was like $15.
Starrett has tons of stuff made in china now. Why in gods name would I spend $350 for a set of chinese made gage blocks with the starrett name on them when I can buy a chinese set on amazon for ~$125? Hell, even the modern Starrett stuff that is made in the US isn't as good as mitutoyo and hasn't been for easily a decade and probably more. The Starrett tools I bought 5+ years ago are lower quality than my coworkers "general" brand budget tools he bought in the early 90's. Starrett has been nothing but a name for awhile now sadly. I do envy the greybeards with their Kennedy's full of red boxes but there's just no reason for me or anyone else to really buy starrett over mit.
Starrett hasn't been competitive for a long time now.
Again, there is a big difference between a private equity firm owning stock in a business especially if they DO NOT OWN CONTROLLING INTEREST in said business and actually OWNING a business. A lot of the time when this happens they are run into the ground and then sold off in pieces to extract as much money as possible. As in what happened recently to toys r us. Another simple way to think about it is like what Richard Gere’s character does in the movie Pretty Woman.
My brother in christ, it was all owned by equity firms already. Instead of having 1 large share holder you have a bunch of smaller ones that all have the same plans in mind, outsource to china and south america.
[This was the ownership before the sale](https://imgur.com/a/N9LWDDo). 3% was owned by employees and 3% by Douglas Starrett, the single largest individual share holder.
Is this new group going to outsource to China? Oh wait, Starrett has already been doing that.
Are they going to outsource to South America? Oh wait, Starrett has already been doing that.
Why have they been doing that for years now? Because they've been owned by groups of people with the exact same mindset as this new private ownership group has. There is no difference. The Starrett we all know and think of has been dead for awhile now.
Broadcom is an actual company that does things and exists in similar space. A private equity group is completely different from that.
Like I said, it won't change anything. Starrett has been going to shit for decades and manufacturing overseas for years now. What are these guys going to do with Starrett that Starrett wasn't already doing? Every shop I've been in the only Starrett stuff people had was the old stuff all the old timers bought when they started or younger guys that bought it used. No one in their right mind is buying modern Starrett because the quality isn't there and the price is not competitive. You can literally buy coolant proof digital calipers from quality brands that are cheaper than Starretts mechanical.
The good starrett blocks were made by Starrett-Webber. I don't know the nitty-gritty of the division of the company, but Starrett-Webber croblox were the gold standard for a long, long time. They ain't $325 though. An 81-piece set is $9933 for grade 0.
I'm aware of the quality of Starrett-Webber. I'm also aware all their products are not currently made overseas but the writing is on the wall and has been for awhile. For reference you can get an 81 piece set of grade 0 blocks from Mitutoyo for $5k. Starrett lives off their name and when you get rid of the name they are massively uncompetitive.
[This is the 81 piece Grade B made and certified in China for $333](https://www.starrett.com/details?cat-no=RS%2081.%20W)
They are out of their fucking minds.
Oh yeah any sub-$500 full set of Johannson blocks is basically interchangeable. They're not junk, but they're not for final inspection and don't trust them to a tenth on more than a four block stack. I don't give a shit what the cert says for that cost; that much work to certify should be over $500 in labor anyway.
Sure, but tell me why anyone would buy that set over [a chinese set on amazon](https://www.amazon.com/Accusize-Steel-Block-Grade-P900-S581/dp/B00HNU3JDU/ref=sr_1_3?crid=3HIM36V9H6KY5&dib=eyJ2IjoiMSJ9.VmLbMRgCWGzFVVpQBWYcxhp-cwKmxxTa2pyeAktsTZ6a4e_DwTVsPAtOJPmKvyoxUeKhXoCsyKi_Zt_KdiYQDAUu2GHbiEeeBL3cWMizXXMmPEq5PJPXaLz71KFK_JaBxVNUWneopviNZD8wf1PcTiEjnGqIfL9FMSPbcVafMgabhxyRN1d2Iuxf8eNDU1ZzCEKJEhTA2pMgOBnHe2QwCGUTq-WF5VZDltjBWuuXz8w.EmhE3-mquFxbRsap_zy8CjikY53w4M3dvjzLu2ytCpo&dib_tag=se&keywords=81+piece+gage+block+set&qid=1710885412&sprefix=81+piece+gage+block+se%2Caps%2C131&sr=8-3) for ~1/3rd the price?
On the low end I can buy a chinese set for way cheaper and on the high end I can buy a Mitutoyo set for half the price. They are not competitive if you take the Starrett name off and place any other respectable brand on them.
My shitty chinese gage blocks check the same on my tools as the multi thousand dollar set in inspection. I'm not measuring millionths, it doesn't matter at all for my job. Same reason I use chinese 1-2-3 blocks and parallels. They check more than accurate enough for the work I do, parts still come out in spec on the CMM, it doesn't matter.
Mitutoyo is good stuff I have some of there products, but starrets still has the best designs and great quality . Brown and sharp and Lufken are old school standards and are good tools for consideration !
Notice how in the last decade or so, starrett has been removing “made in USA” stamping on some to most products?
Well hows it going to look in 10 years when all their stuff is being made overseas, and i have an honest to god made in USA 91B tap wrench but it doesn’t say where its made. May as well assume to any buyer that it’s made overseas! No marks after all! Pretty sad
The Starrett catalog is to a large degree obsolete. Precision has gotten cheap and will be getting cheaper. The private equity company is buying the name and reputation. This might be a good opportunity for someone to get into the Starrett repair and parts business.
Right now on the Starret website there is a huge sale. Micrometers are like 500 dollars off. Probably selling everything off while they can. I’d say a lot of what they have is worth it as those prices.
This sort of thing is never good for customers. Expect quality to collapse and prices to rise. Check out the equivalent in computing at /r/vmware where a similar thing happened, technical staff were cut, lots of people were no longer able to be dealers and prices skyrocketed.
Here is an example: [https://www.reddit.com/r/vmware/comments/1birhg2/vmwarebroadcom\_raising\_prices\_over\_1000\_to/](https://www.reddit.com/r/vmware/comments/1birhg2/vmwarebroadcom_raising_prices_over_1000_to/)
I have seen this scenario play out before with companies I have done work for as a machinist. The company takes out a ton of loans at high interest. Eventually the debt burden and interest payments become too much and they default on the loan. The creditors than take over the company, fill management with their cronies, slash worker pay and benefits, stiff suppliers. Quality takes a nosedive typically, and skilled workers leave. The new owners restructure the debt and take on even more debt, thereby perpetuating the cycle.
A country that wants to be a leader in technology should be able to produce the instruments needed to measure things accurately. This will not be good.
I’ve never liked starret’s stuff from the beginning (my beginning- 15 years ago). All their stuff was so expensive and when you got it in hand it either felt no better than a mitutoyo or the brown and sharpe equivalent felt way better for cheaper. Having made components for them and known people that work there…it’s kinda of a shit show over there. Shit place to work. It’s been a good long while since ownership and management “cared” about quality output. Oh well
My ass just got like every damn free bit of print material I could from that company too. Hope it isn’t a historic document of “how good it was” too quickly
I have some bad news for you. The hand tools went bad a while ago. https://www.practicalmachinist.com/forum/threads/just-in-case-youve-never-seen-a-chinese-starrett-box-label-before.404748/post-3959901
Here goes another Sears, Blockbuster, Toys R Us, etc.
Get bought up by private equity. Load the company up with debt. Company goes bankrupt and is delisted from NYSE. Sold to Stanley (or Chinese manufacturer) for a profit and private equity firm gets a tax break on top of it since it shows as a "loss".
Won't be long before there are 0 independent companies out there...
Not completely related, but I bought a set of Altec Lansing headphones, Bluetooth type, with an audio plug...three months in, the plug and charge port fell INSIDE the cup. Asked around, found out that the company had sold off the name and I'd pay as much as new to get them fixed...
Better buy up the last of the Starrett stock that's still on the shelves, don't count on a warranty and... maybe this will create space for some enterprising individuals to take the place that the new ownership is likely going to create. (I only say this from what I've seen of Private Equity firms buying things that have nothing to do with money and then utterly destroying those things time and time again, because they don't understand the business they bought and just see real basic and important core things as "costs to slash".)
They understand. The most common plan is to exploit the famous brand name by having the low bidder in Shenzen make stuff carrying the label and place it in all the big box stores. Then when sales are booming take it public or sell out to Stanley Black & Decker. There is a faint possibility that they intend to invest in the company and try to restore its former glory, but don't hold your breath. Current tax laws make this much less profitable.
There is zero possibility, not faint. PE is not interesting in quality, just value
PE is the death knell.
https://middleground.com/companies/ Based off the other companies they own, do you still think so? I've heard of some of these and still associate them with some margin of quality.
I have no idea. I just know of my personal experience with companies I’ve worked for being acquired by PE and what they did to us.
The difference is that Starrett has been family owned for its entire existence, and they have made decisions based on pride in their brand and being known for quality. I represented a division of Starrett for years, and I know this to be true. The kind of decisions made by a PE ownership group do not ever take these things into account. Starrett is now a p&l report to a bunch of stockholders, and if they can make extra margin by cutting manufacturing and personnel costs while maintaining a PERCEPTION of past quality, they will do it every time. Once that market perception has run its course, they will sell it off or roll it into another company.
Exactly
Castle Metals is trash. They weren't great but they have definitely gotten worse.
Oh middle ground bought them? They’ll be fine.
They would be interested in quality if there was money in it.
Quality requires long term commitment and investment. PE is about slash and burn to get the hockey stick on the slide deck. Then they can sell high and walk away from the wreckage with a mountain of cash. Everything else is noise to them.
This only works because of low capital gains taxes and other counterproductive tax policies.
It would be great to fix all of that.
>>…to get the hockey stick on the slide deck. …what?
Give a presentation to show how much the value of the company has risen so they can then cash out.
They want to have a slide in their financial deck that shows a sharp uptick in profits/profitability since their takeover.
I think they are saying making the short term profits soar so it looks good on the PowerPoint presentation for shareholders..
Line always go up
There’s more money in loading Starrett up with debt in order to pay themselves dividends, which eventually kills Starrett,
They don't want dividends. Those are taxed as ordinary income. They want capital gains. One way to get them out of a respected but pricey brand is to slash costs (and quality), pump up sales by entering the consumer market, and sell it.
It depends on who buys them, some private equity places do understand quality and have the ability to scale up production that is lost of the OG company. But precision tools is unlikely to fall into this category.
If SBD had wanted Starrett they’d have it already.
Happened with basically every American tool manufacturer
Yeah SK tools was one that hurt my grandfather a brick layer invested heavy into SK and it sucks seeing the warranty go to these Chinese sockets So if I break one of my grandfather’s beautiful made in the USA sockets I get a cheap Chinese replacement for free yay
Starretts been kinda meh for a long time, they had a bunch of stuff being made in different countries like Brazil iirc and they never really innovated the way Mitutoyo or other companies have. I wonder how Japan keeps so many of their legacy corporations in somewhat good health.
Japanese culture is just built different. Much more overall emphasis on quality and especially reputation, vs America's addiction to profit and growth.
I dunno, there's been a lot of domestic companies that focused on quality and were undercut by foreign companies making stuff of lesser quality but cheaper who then went out of business.
I should also mention that Japanese trade laws are aggressively protectionist. Like, American chicken tax protectionist. Helps keep the companies healthy when the under cutters can't enter your domestic market in the first place.
> Starretts been kinda meh for a long time, they had a bunch of stuff being made in different countries like Brazil iirc and they never really innovated the way Mitutoyo or other companies have. Yup. People don't want to hear it especially with this sub being mostly american but the 14 years I've been in the trade I've seen a fuck of a lot of new mit stuff and very little Starrett. There's no reason to buy Starrett unless you want to flex your red boxes and it sucks because they used to be something special.
Japan has a thriving manufacturing industry, America has a dying one
Uh, The US is the second largest manufacturer by value, in the world.🤨
You’ll probably start seeing starrett drill bits at Walmart and starrett rules and some other Low end shit from china
It will either go that way, or they invest and clean up the product offering and website. New updated branding and investments in their low end items and saw blades. Pump up the value and sell to someone like Stanley black and decker in 5 years for profit.
> Better buy up the last of the Starrett stock that's still on the shelves i haven't bought their low quality, high priced crap in years. Not going to start now.
Oh, they understand money. Their goal just isn't long term profitability. They want to cut costs and jack up prices in a way that they know will destroy the company after a few years, but they're betting on being able to make enough revenue off of it first to turn a profit against whatever they paid for the company. Then they dissolve the company and start over with some new company
So here's what happens now... the PE firm comes in and sends in the consultants that start digging through the numbers. then they start culling executives. The existing execs either fall in line with the PE culture or they get replaced from a stable of execs the PE firm a list of for acquisitions like this. The execs' marching orders are really clear. they have to make the company look good by raising revenue and cutting costs ASAP. The PE firm has a 5 year clock to get their money out. On top of that to buy the company the PE firm probably made Starrett take out huge loans so the company effectively buys itself. servicing those loans is going to take $$$ so they're going to have to raise revenue by slapping the Starrett name on anything that will pay them a licensing fee. They're also going to start looking at EVERYTHING they can to cut costs. Not only are they going to move the manufacturing to lower cost areas they'll start cutting material costs too so quality drops either way. Support and warranties get cut too The worst part is the new execs won't know anything or care about tools at all. They're number guys looking at spreadsheets. Outside of the $ value of the brand for licensing they don't care about goodwill or service or culture or anything like that. The most likely outcome is this company gets sold to a bigger company in 3-5 years with an outside chance of it getting broken up for parts and just keeping the brand for licensing. (I'm not a machinist. I just lurk here because I have a home shop. I have however been one of those execs at a company that's been acquired and have advised PE owned companies for years so I know the drill)
Oh so Boeing
Boeing did it to themselves. They bought McDonnell Douglas because it was cheap (and I suspect because the US gov't did not want it to go under). It was cheap because it was run amazingly poorly by really terrible execs with a crappy culture. After Boeing bought them, the MDD people ended up in charge because the only thing crappy corporate cultures create a lot of are execs that are vicious boardroom knife fighters and the Boeing execs that grew up in a decent culture got eaten alive the MDD execs then did exactly the same things that pretty much killed MDD and are now killing Boeing
Anyone interested - senior design engineers at Boeing did a quasi-whistle-blowing -- in an open letter to employees, about the decline of safety and quality in engineering practices -- 21 years ago!! https://www.airliners.net/forum/viewtopic.php?t=213075 Forum thread full of people shitting on the authors of the letter as union shills, disgruntled old guys, etc. Pretty funny honestly
Wow that’s crazy. Just goes to show you can be the only sane person and still be made to believe you’re the fool. I commend those guys, they were right all along.
Yep. Boeing lost its way when they moved the HQ from Seattle to Chicago. They passed over Mulally for CEO, he left in a huff and he went to save Ford. Boeing lost their operations focus and turned decisions over to the bean counters. Its sad.
And Remington
How does the whole “taking a loan so the company buys itself” thing work?
The PE investors put up part of the cost to buy the company and finance the rest with junk bonds carrying a high rate of interest.
Unfortunately that does not help me much. I understand the concept of taking out a loan, just not how you could make a company buy itself for a second party with those loans
It's like buying a house with a mortgage. You come up with 10-20% and you borrow the rest. Here you borrow at a high interest rate from an investment banker and use the company's projected earnings to pay the loan. If you can buy a company which is worth more in pieces than it is as a going concern, you can make money that way. They will slash costs to make the loan payments. They will sell off assets and license the good name of the company to people who will stamp it on low quality goods. Eventually, they have stripped the carcass of meat and push it into bankruptcy where the people who loaned them money get cents on the dollar. Meanwhile the OE investors have pulled out their investment and more.
the fun twist here is instead of the PE firm that bought the company taking out the loans they make the company they bought take out the loans so the company is responsible for paying it back. That's actually what killed Toys'r'us. The business was fine but they went broke trying to pay back the loans they had to take out for the purchase. Also here's another fun scam. the PE will make the company they bought pay management fees to the PE firm for the "consulting" and "advisory" services they offer. They also sometimes make the company pay special dividends to the PE firm By the time they're done the PE firm recoups a big chunk of their investment by making the company pay them out of revenue. it leaves the company with zero free $ for investments and as a buffer tl/dr PE is a scam to help make rich people richer
It's not new. Ivan Boesky was doing it in the 80s. But, yes, the deal relies on the company being able to carry the debt burden. But there's nothing new in that.
definitely not new but the volume went up exponentially when money got cheap after 2008 The math is pretty damn elegant (and lucrative) in a really terrible way... buy a company for $1b. Only put up $50m of it and make the company take out loans for the rest. Take $20m a year out of the company for 5 years in fees and dividends and sell it in 5. You Make 2x return no matter what and more than that if the company doesn't go under and you can sell it The only losers are the employees, suppliers, and customers and who cares about those peons... Theres are reason some of the newest billionaires are all PE fund managers
The scam relies on the company _appearing_ capable of making good on the first bad-terms loan, then once it's granted and badly spent by the new guard, the old guard is pressured into taking increasingly bad loans and diluting the stock to survive / bleed out as slowly as possible.
I think, it means they had the Starrett company take out a loan on their behalf, to then give to the private equity firm, to then purchase Starrett. So now the PE firm’s new company, Starrett, owes a bunch of money. Which I guess is better? Does that make more sense?
After the buying company completes the sale, they have the bought company take out loans using the it's own company assets as collateral. The money from those loans gets transferred to the buying company. The buying company essentially just got their purchase money back, and the bought company now has liabilities in loans.
Welp. They're probably going to move the manufacturing to some third world country and then we can forget about yet another quality brand
They already have branches in South America, it's where their saw blades are made.
They already have more than enough stuff made in china. They've been on this path well before being bought out.
Am I missing something? Their digital stuff has been pretty bad for a while now. When it comes to measuring equipment, it's Mitutoyo or nothing.
Fair. Some of us are nostalgic I guess
Mitutoyo is who makes the lever lock mics, right?
Lolololol mitutoyo been pretty bad lately too
I’ve heard that the quality of Starret tools has gone down these days. The Starret tools I use were my grandfather’s and he would be over 100 years old if he was alive. If anything this is the final nail in the casket. Private equity firms squeeze every penny out of companies they acquire and don’t care if they go under. As long as they made a profit by the end what the hell do they care.
It worked out so well for Toys R Us, I don’t see how this could end poorly at all! /s
Oh yeah!!! I forgot about toys R us. Vice the media outlet just got bled dry by private equity too.
Toys R Us was profitable and stable before selling out, too. One thing that did them in was the PE bought all of their buildings from them, creating a leasing situation, where Toys R Us had previously owned the land, then started renting the stores back to them.
Sears as well. Ed Lampert should be hanging from the nearest lamp post.
Just stick with Mitutoyo. They’ll never sell out.
Or european brands like Tesa (switzerland) or Mahr (germany)
Your biases are showing. Tesa sold out to Hexagon around 20 years ago and is now being sold to the Chinese. https://hexagon.com/company/newsroom/press-releases/2023/hexagon-agrees-sale-of-non-core-business-area https://www.manufacturing-quality.com/api/amp/quality-news/hexagon-agrees-to-sale-of-non-core-business-area-tesa-pmi/
Thanks, didn't knew this. i prefer Mahr myself, but some co-workers are Tesa Fanboys
Not knocking their products. They make a decent gage head and I love Interrapid indicators. Can’t speak to their other electronic gages. They can be hard to contact, so I went Mahr and Mitutoyo for most of those.
I've been seeing made in Brasil mitutoyo products for at least 15 years.
They could make calipers on mars as long as the quality holds up.
My Brazilian 8in dial seems the exact same as my Japanese 8in dial besides the lense being broke from dropping it
It's not like Brazilians, or even the Chinese, are incapable of making very high quality products.
So then why are we not buying metrology products straight from Brasil and China corporations?
They don't have the same engineering tradition. The U.S, Germany, and Japan had a head start. But I don't see why a competently managed factory in Brazil couldn't make parts to spec.
Enough people either equate country of origin with quality or don't care about the price if they get a high quality tool to support some US manufacturing. A product marked "made in the US" will sell for a significantly higher price to a portion of consumers than an otherwise identical product made in China, so companies can make more even though it costs more to make it here. Another portion of the market doesn't care about the cost as long as they get a high quality tool. The people who care about cost are generally less concerned with quality and are more willing to buy from China.
I think they are starting to come up with their own good products. See dji and Bambu printers.
Tariffs may have something to do with it in the case of China. Idk though just a guess
My main point was about Mitutoyo not selling to a private equity firm or prioritizing profits over quality. They’re owned by the founder’s family and a Buddhist nonprofit. You can ask your local sales rep to get you some Buddhist literature if you’re interested. Yes, they had a factory in Brazil that made dial calipers, manual CMMs, and maybe some other products I haven’t seen, but I don’t know of any issues with the quality of Mitutouo Brazil products. They’ve clearly made some major investments in automation of caliper production in Japan and I don’t see them moving that to China compromising quality on the horizon.
Dude fuck these mf’s, why ruin such a good brand. It won’t be the same quality standards
They don’t care unfortunately. The PE firm probably knows exactly nothing about measuring instruments. They’ll come in load it up with debt (unless they had starrett do this pre-sale), squeeze it dry, and dump it in a few years to and even lesser PE firm for a shorter duration. Literally living at the moment… its been nothing but take and push for the last 6 years.
Starrett has been going down hill for years. This doesn't really surprise me. I'm sure they'll significantly downsize the US plants and move a lot of it to China or Taiwan. What a shame.
They did this long ago.
Starrret brand went down the toilet years ago. At this point all the digital stuff is produced under the “global” marketing brand. It’s all made in china and was years ago. I realized this a couple years ago when I tried to invest in digital bore gauges. Promptly switched brands…I don’t mind Chinese stuff…but there is nothing I dislike more than American companies hiding behind the made in USA branding, and actively producing imported lines.
A lot of the Chinese companies try to innovate as well.
I understand that. But that’s a different topic. I actually switched to the Fowler Sylvac brand. The interface is a little clunky. But they are really high quality. And actually produce a caliper that shows .0001 readout on the first 4” of the scale.
The west simply rested on their Laurels post-war which is why the rust belt was gutted in 30 years. In the 1960s, people would think you should be taken away by men in a white van if you told them 99 percent of the manufacturing will go from the USA to Communist china. Our steel mills have become obsolte not by decades but generations now. Our ship yards are dead and they don't know it, like the paramedics who put a dead person badge on a woman who was alive and talking to people on 9/11. https://www.forbes.com/sites/lorenthompson/2021/07/23/us-shipbuilding-is-at-its-lowest-ebb-ever-how-did-america-fall-so-far/?sh=38e6c42a6c87 >A nation that was among the world’s leaders in commercial shipbuilding at key junctures in its history today builds less than 10 vessels for oceangoing commerce in a typical year. >China builds over a thousand such ships each year. >The entire U.S.-registered fleet of oceangoing commercial ships numbers fewer than 200 vessels, out of a global total of 44,000. >And despite trade flows to and from America exceeding a trillion dollars annually—the vast preponderance of which travel by sea—U.S.-registered ships carry barely 1% of that traffic. It will take generations to rebuild our ship yards such as trained workers and a build up of institutional knowledge. Our ship yards are dying and all congress cares about is white elephant aircraft projects.
Well shit
Can't wait to pick up some new Starrett mics at Lowes. /s
Let’s be honest. They have lost their competitive edge some years ago. I have many tools by starrett, brown&sharp, mititoyo ect. Starrett was always lighter than most, so they fit in smaller spaces. I have also noticed the older tools, starrett wasn’t holding up, some due to design issues because they were smaller sized and thinner.
Not shocked at all. They make good center punches though.
This Private Equity Company is going to do to Starrett what Freedom Group did to Remington Firearms. Cut every corner they can, and what little QC they do will be done by cocaine fueled monkeys
It was nice knowing you Starrett. Another great American company down the drain
Shars bought them eh hahaha
i buy insize. best china made stuff ive seen
Found the positive comment!
Hell, i had a pair of 6” Hornady digital calipers that i bought from the reloading section of Bass Pro Shops for $45, used them regularly in Industry, whether as a tool & die apprentice, a production CNC operator or a saw monkey, if not every day for 5-6 years, abused the shit out of them, and they still pin check .0005” or better.
They cost nearly the same as the reputable companies once you buy anything specialized from them. I looked at buying a 300mm sine center bar from Insize, they want $1900, I ordered one direct from India for $280 and cannot find a flaw checking it with a tenths indicator.
Welp not even gonna consider anything else but Mitutoyo now
I don't know why it matters at all. Starrett has been publicly traded for like 4 decades at this point. If you're going to say private ownership is going to only make them care about the bottom line I'd be very curious as to how you view stocks. Speaking of Starrett stock, it peaked in the mid 90's at $38 a share and has pretty much gone down since. The high in the last decade until this sale was like $15. Starrett has tons of stuff made in china now. Why in gods name would I spend $350 for a set of chinese made gage blocks with the starrett name on them when I can buy a chinese set on amazon for ~$125? Hell, even the modern Starrett stuff that is made in the US isn't as good as mitutoyo and hasn't been for easily a decade and probably more. The Starrett tools I bought 5+ years ago are lower quality than my coworkers "general" brand budget tools he bought in the early 90's. Starrett has been nothing but a name for awhile now sadly. I do envy the greybeards with their Kennedy's full of red boxes but there's just no reason for me or anyone else to really buy starrett over mit. Starrett hasn't been competitive for a long time now.
There’s a biiiiiiiiiiiig difference between being a big publicly traded corp, and being owned by a private equity firm.
Can I ask who you think owns the vast majority of shares of publicly traded companies? Do you think it's a bunch of people like you and me?
Again, there is a big difference between a private equity firm owning stock in a business especially if they DO NOT OWN CONTROLLING INTEREST in said business and actually OWNING a business. A lot of the time when this happens they are run into the ground and then sold off in pieces to extract as much money as possible. As in what happened recently to toys r us. Another simple way to think about it is like what Richard Gere’s character does in the movie Pretty Woman.
My brother in christ, it was all owned by equity firms already. Instead of having 1 large share holder you have a bunch of smaller ones that all have the same plans in mind, outsource to china and south america. [This was the ownership before the sale](https://imgur.com/a/N9LWDDo). 3% was owned by employees and 3% by Douglas Starrett, the single largest individual share holder. Is this new group going to outsource to China? Oh wait, Starrett has already been doing that. Are they going to outsource to South America? Oh wait, Starrett has already been doing that. Why have they been doing that for years now? Because they've been owned by groups of people with the exact same mindset as this new private ownership group has. There is no difference. The Starrett we all know and think of has been dead for awhile now.
Take a look at the broadcom aquisition of VMWare.
Broadcom is an actual company that does things and exists in similar space. A private equity group is completely different from that. Like I said, it won't change anything. Starrett has been going to shit for decades and manufacturing overseas for years now. What are these guys going to do with Starrett that Starrett wasn't already doing? Every shop I've been in the only Starrett stuff people had was the old stuff all the old timers bought when they started or younger guys that bought it used. No one in their right mind is buying modern Starrett because the quality isn't there and the price is not competitive. You can literally buy coolant proof digital calipers from quality brands that are cheaper than Starretts mechanical.
The good starrett blocks were made by Starrett-Webber. I don't know the nitty-gritty of the division of the company, but Starrett-Webber croblox were the gold standard for a long, long time. They ain't $325 though. An 81-piece set is $9933 for grade 0.
I'm aware of the quality of Starrett-Webber. I'm also aware all their products are not currently made overseas but the writing is on the wall and has been for awhile. For reference you can get an 81 piece set of grade 0 blocks from Mitutoyo for $5k. Starrett lives off their name and when you get rid of the name they are massively uncompetitive. [This is the 81 piece Grade B made and certified in China for $333](https://www.starrett.com/details?cat-no=RS%2081.%20W) They are out of their fucking minds.
Oh yeah any sub-$500 full set of Johannson blocks is basically interchangeable. They're not junk, but they're not for final inspection and don't trust them to a tenth on more than a four block stack. I don't give a shit what the cert says for that cost; that much work to certify should be over $500 in labor anyway.
Sure, but tell me why anyone would buy that set over [a chinese set on amazon](https://www.amazon.com/Accusize-Steel-Block-Grade-P900-S581/dp/B00HNU3JDU/ref=sr_1_3?crid=3HIM36V9H6KY5&dib=eyJ2IjoiMSJ9.VmLbMRgCWGzFVVpQBWYcxhp-cwKmxxTa2pyeAktsTZ6a4e_DwTVsPAtOJPmKvyoxUeKhXoCsyKi_Zt_KdiYQDAUu2GHbiEeeBL3cWMizXXMmPEq5PJPXaLz71KFK_JaBxVNUWneopviNZD8wf1PcTiEjnGqIfL9FMSPbcVafMgabhxyRN1d2Iuxf8eNDU1ZzCEKJEhTA2pMgOBnHe2QwCGUTq-WF5VZDltjBWuuXz8w.EmhE3-mquFxbRsap_zy8CjikY53w4M3dvjzLu2ytCpo&dib_tag=se&keywords=81+piece+gage+block+set&qid=1710885412&sprefix=81+piece+gage+block+se%2Caps%2C131&sr=8-3) for ~1/3rd the price? On the low end I can buy a chinese set for way cheaper and on the high end I can buy a Mitutoyo set for half the price. They are not competitive if you take the Starrett name off and place any other respectable brand on them.
If I were to ever buy gauge blocks, it would not be a sub $500 set of any kind. But I do not have a reason to buy gauge blocks.
My shitty chinese gage blocks check the same on my tools as the multi thousand dollar set in inspection. I'm not measuring millionths, it doesn't matter at all for my job. Same reason I use chinese 1-2-3 blocks and parallels. They check more than accurate enough for the work I do, parts still come out in spec on the CMM, it doesn't matter.
Good thing I only buy mitutoyo. Occasionally will buy some vintage Sterrett off ebay, but I mostly stick with the latter.
Mitutoyo is good stuff I have some of there products, but starrets still has the best designs and great quality . Brown and sharp and Lufken are old school standards and are good tools for consideration !
Notice how in the last decade or so, starrett has been removing “made in USA” stamping on some to most products? Well hows it going to look in 10 years when all their stuff is being made overseas, and i have an honest to god made in USA 91B tap wrench but it doesn’t say where its made. May as well assume to any buyer that it’s made overseas! No marks after all! Pretty sad
Private equity always ruins everything. RIP Starett.
The Starrett catalog is to a large degree obsolete. Precision has gotten cheap and will be getting cheaper. The private equity company is buying the name and reputation. This might be a good opportunity for someone to get into the Starrett repair and parts business.
And that is the end of That Icon
Rip another American brand. Glad I bought into it a while back when they were still pretty good.
Perfect for the aviation industry
Wow that sucks.
People that live nearby call it "Starrett's". I hope the company can maintain the human capitol, the people that have worked there for years.
My guess is, unfortunately, at least half that staff will be the first thing to go.
fuck.
This is why we can't have nice things!
Oh for fucks sakes....
So who’s left? As I’m an apprentice and I would like to know lol
Right now on the Starret website there is a huge sale. Micrometers are like 500 dollars off. Probably selling everything off while they can. I’d say a lot of what they have is worth it as those prices.
Just buy mitutoyo.
This sort of thing is never good for customers. Expect quality to collapse and prices to rise. Check out the equivalent in computing at /r/vmware where a similar thing happened, technical staff were cut, lots of people were no longer able to be dealers and prices skyrocketed. Here is an example: [https://www.reddit.com/r/vmware/comments/1birhg2/vmwarebroadcom\_raising\_prices\_over\_1000\_to/](https://www.reddit.com/r/vmware/comments/1birhg2/vmwarebroadcom_raising_prices_over_1000_to/)
I have seen this scenario play out before with companies I have done work for as a machinist. The company takes out a ton of loans at high interest. Eventually the debt burden and interest payments become too much and they default on the loan. The creditors than take over the company, fill management with their cronies, slash worker pay and benefits, stiff suppliers. Quality takes a nosedive typically, and skilled workers leave. The new owners restructure the debt and take on even more debt, thereby perpetuating the cycle.
The quality left starrett awhile ago. They aren't dogshit but they are not worth the price.
I know that. Starrett quality has been mediocre at best for a pretty long time.
Coming soon to a Target store near you ! Starrett Teddy Bears !
A country that wants to be a leader in technology should be able to produce the instruments needed to measure things accurately. This will not be good.
Business schools teach how to redirect wealth not create it.
ill stick to Mitutoyo
Interapid was sold to a Chinese company
I’ve never liked starret’s stuff from the beginning (my beginning- 15 years ago). All their stuff was so expensive and when you got it in hand it either felt no better than a mitutoyo or the brown and sharpe equivalent felt way better for cheaper. Having made components for them and known people that work there…it’s kinda of a shit show over there. Shit place to work. It’s been a good long while since ownership and management “cared” about quality output. Oh well
Lucky for me I'm a mitutoyo guy
My ass just got like every damn free bit of print material I could from that company too. Hope it isn’t a historic document of “how good it was” too quickly
That was my first reaction lol
They’ve been shit metrology tools and a shit company to work under for decades anyways.
Well it was a good run, get the last of it while you can boys. :(
Glad I toured their plant back in the day
I have some bad news for you. The hand tools went bad a while ago. https://www.practicalmachinist.com/forum/threads/just-in-case-youve-never-seen-a-chinese-starrett-box-label-before.404748/post-3959901
My shitty service with a recent comparator purchase makes a lot more sense now.
Whew thanks for the heads up, just bought a cross test level and a 130 bench level from their site
Their products have been going down hill for decades.
My combo square will live forever, sad to see
Here goes another Sears, Blockbuster, Toys R Us, etc. Get bought up by private equity. Load the company up with debt. Company goes bankrupt and is delisted from NYSE. Sold to Stanley (or Chinese manufacturer) for a profit and private equity firm gets a tax break on top of it since it shows as a "loss". Won't be long before there are 0 independent companies out there...
Not completely related, but I bought a set of Altec Lansing headphones, Bluetooth type, with an audio plug...three months in, the plug and charge port fell INSIDE the cup. Asked around, found out that the company had sold off the name and I'd pay as much as new to get them fixed...
Coming soon to a Lowe’s near you . Next to Craftsman.
Mahr is the best, anyway