FADAL Selling Assets

I saw this on Practical Machinist and thought it would show up here. since I haven't seen anything yet I thought I would post it here:
"FADAL is discontinuing the production of machining centers and has authorized Machinery Network auctions and Infinity Asset Solutions to liquidate its entire inventory of machines and a huge selection of remaining machine components."
http://www.infassets.com/liquidations/187
Machine Pricing: http://www.infassets.com/system/documents/79/original/Machinery_Website_Summary_New.pdf?1267046818
Spares pricing:
http://www.infassets.com/system/documents/80/original/Parts_Components_Inventory_With_Pricing.pdf?1266951231
Best, Steve
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Regards,
Steve Saling
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On 2/25/2010 10:07 AM, Garlicdude wrote:

http://www.infassets.com/system/documents/79/original/Machinery_Website_Summary_New.pdf?1267046818
http://www.infassets.com/system/documents/80/original/Parts_Components_Inventory_With_Pricing.pdf?1266951231
I live 5 blocks from the FADAL facility in Chatsworth. Only a few cars are ever out front anymore. The last few moving trucks were there a few weeks back. Someone mentioned a while back they were transferring manufacturing to the parent company back east. I knew that not to be true as a few of the guys that worked there go to my gym down the street and were not offered any transfer opportunity. That said, a very big shop up in Santa Clarita is ordering big machines like they're going out of style! : )
-- Bill
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On Thu, 25 Feb 2010 10:07:03 -0800, Garlicdude

<snip> ==========What does this mean? What impact is this going to have? Causes?
Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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wrote:

They won the race to the bottom?

None unless you own one. C'mon George! Embrace the change! We don't need manufacturing anymore. The government will take care of all of us with money borrowed from China.

Bottom line: the market decided that among the thousands of VMC's available, Fadals weren't worth buying. Probably loads of reasons why that's so.
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wrote:

The race was fixed....

Plenty of spare Fadal parts out there and no reason the iron can't be reground and retrofitted.

My take is that Fadal was purchased by a multinational conglomerate ( Mag ) and liquefied with the sole intent and purpose being to stifle competition.
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To what end? They don't do well in that end of the market with any of their brands. So they bought their way in with a company that used to do well and proved that if you can't compete in a market segmnent on your own, you're poor management skills will kill whatever company you buy that was otherwise successful.
I doubt that their plan was to lose the $180 million that G&L paid back in '95 or whenever. And I doubt Mag looked at G&L and thought that it would be worth $631 million to put them out of business. They would have been better off spending that money to put Haas under if their goal was to dominate the US market.
I've come to the conclusion that machine tool companies can't be owned by big conglomorates. Big companies won't invest in R&D, new technologies, and won't keep the cash reserves necessary to carry them through economic downturns.
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Dan, did you see the projected year end results for Mori Seiki?
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No but I loked and found this -
http://www.moriseiki.com/english/ir/announce/pdf/fy2009_ 3shihanki_kessan_ex_e.pdf
It looks like they are about $8-1/2 million in the shit which is not too bad for a company of their size.
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Dan

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Dan, take a closer look at the second sentence on page 17. YIKES!
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About 38 million USD or 9 1/2 million loss per Q. I'll tell you this, they aren't special. Every MTB is in the shit for the year.
Mori can sell between $170-200 million USD in a normal year. So one normal year could wipe out the loss and maybe even have a little left over for karaoke. But they are a long ways away from having a normal year. Like everyone else they are cutting heads and costs every way possible. I don't see any immediate danger of them going under.
But I'll bet they wish they didn't build their shiny new headquarters out here, and instead stuck it out for a few more years in their old place.
They are going to start building machines either here or in CA soon.
They must like paying taxes.
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Dan, they lost 388 MILLION dollars, or 34.5 BILLION yen!
I certainly don't see them going under either, I just found the sheer dollar amount of loss staggering. They are a billion dollar company, so even in that sense, so the number is still mind blowing to me, even relative to their gross sales.
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Read through attachment linked below and you'll see that they spent a lot of money on fixed assets and securities (DMG stock) as well as took some write offs. Plus they bought the Magnescale business from Sony, so there's a lot of one time charges in that number.
http://www.moriseiki.com/english/ir/announce/pdf/fy2009_ 3shihanki_kessan_e.pdf
On balance they are in good shape, but the amount of money they are spending during a downturn gives me pause. But if they realize a payoff in sales from offering glass scales standard or as a low cost option, and if the deal with DMG pays off then they will look smart for being bold. If it doesn't work out then it will look like they were taking risky gambles that they shouldn't have and they might end up being bought out or being run by a new CEO.
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Dan


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Yeah, they definitely spent a lot of money on one time expansion stuff, but all of that stuff still only added up to 190 million dollars. Even a $200 million operating loss is nothing to scoff at for a billion dollar company. It will be interesting to see what they do with the scale business. They sure have been introducing a lot of neat machines lately.
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I've heard that they want to make some majority of their models sub micron accurate by a certain date in the fairly near future.
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All machinery--even the cheapest chinese crap imports are sub-micron accurate---at least to a projected tolerance of several hundred light years / arc segment--just you need to chart it all out into your kinematic system using John R. Carroll's ( provisional patent pending ) fog box is all...
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On Sun, 28 Feb 2010 09:31:43 -0800 (PST), Joe788
<snip>

=======I don't know how the tax laws are structured in Japan, but this may well be a "paper loss" as a result of transfer pricing that shifts their international profits to a no/low tax haven such as Aruba or Macau. http://en.wikipedia.org/wiki/Transfer_pricing http://www.itinet.org/transferpricing/methods.htm
The way this works is that the machines are sold at a loss or minimal profits to a external [to Japan] subsidiary or trading company, who then sells the machines at close to full list. Thus the profits accumulate in the subsidiary, and if Japan is like the US, are not taxable [by Japan] until these are repatriated to the central corporation. The central corporation can use these untaxed profits for investments in other countries, including buying out their competition.
The ease with which transnational corporations can shift profits and evade taxes is one of their major problems.
Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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<snip>

======This has the ring of truth.
Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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Yep. Just look at what Haas has done with their control in the last 10-12 years. And then look at what Fadal has done with theirs.
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Joe788 wrote:

Fadal's with Fanuc controls, drives, and servos are far superior to the machines with MP and old CNC88 controls.
To my knowledge Haas doesn't have anything like Fanuc's HPCC, AICC, or APC, so despite Haas's user friendliness Fadal still won until the plug got pulled.
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On Sat, 27 Feb 2010 17:29:45 +0000 (UTC), Black Dragon
<snip>

<snip>
So how/why did Fadel step on their lolly?
Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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