Based on what I have seen in these scenarios, the next tricks may be paychecks being held back for an extra week or weeks, then layoffs and either closing or a "company meeting" to announce that operations are shutting down or headed to Mexico or China. The owner should have faced the fact that his numbers were not adding up and either specialized in his better product line and/or possibly downsized to an affordable operating level. Since this is probably a corporation, the owner won't lose anything but the company. Start looking elsewhere asap.
Okay, so I'm late and catching up, but "Joe788" wrote on 17 Aug 2006 16:48:10 -0700 in alt.machines.cnc :
I still haven't seen a reason why it is bad make parts for customers cheaper. Or is the OP one of those who pays Manufacturers Suggested Retail price all the time, every time, regardless of the sticker?
OTOH, the shop I'm in just rebid a job at triple the price (didn't want it anymore). Still got the job (rats). Now the word is that the customer might take the job back "in-house". Good enough for us!
=========================================== When the numbers don't add up, the first "solution" is generally to fire the existing accountants, and hire some new ones that will provide more "accurate" numbers [that is, numbers the owner likes better]....
In all fairness, there is not (in most cases) some sinister plot by the machine shop owners, but rather a symptom of two parallel but separate factors: (1) the restructuring of the global economy because of "free trade" and instantaneous "free" communications provided by the internet; and (2) the ongoing revolution in manufacturing technology, in this context, primarily machine control through computerization/cnc. Either factor by itself would have been more than enough to cause profound and fundamental (that is agonizing) change to the machining industry at all levels from the operator to the owner. By acting in synergistic combination, these have greatly increased the speed and thus the perceived impact of the changes on/in the trade.
The speed and uncertainty of direction of change is such that "strategic" or long-term planning in the traditional sense, for nearly all activities, is rapidly becoming [or has become] impossible, with contingency/reactive/short-term planning the only other option.
The original post raised the question "Why are machine shops so stupid they will buy new machines & spend hundreds of thousands of dollars so they can make the customers parts cheaper." The answer is that somewhere, generally not in the United States, someone else has just purchased a new machine and will make the parts cheaper. The owner has no choice but to follow suit or get out of the business. The owner, for the factors listed in another posting, does not consider "getting out of the business" to be an option, although it may well be the logical/correct choice.
The advice to "start looking elsewhere ASAP" is very appropriate and should be acted on. The difficulty is the other CNC shops will be facing exactly the same challenges and problems, and more than likely will reach the same conclusions and attempt the same solutions, therefore it is time to consider alternatives, such as self-employment.
Gunner in one of his responses in the thread: "Re: Small verticle mill for home/hobby" in rec.crafts.metalworking details how several people are now operating one or two OmniTurn CNC machines literally in their garages. While this may involve you in zoning problems, it eliminates many of the expenses associated with a traditional shop, allowing lower prices and putting at least some of that money in your pocket. It also eliminates commuting costs, and the family members can help out as bar pushers/loaders.
Good luck on evaluating and exploiting new opportunities. I wish I could offer additional advice, as it is abundantly clear that the old solution of "more of the same only better" is not working for anyone.
Unka George (George McDuffee)
...and at the end of the fight is a tombstone white with the name of the late deceased, and the epitaph drear: ?A Fool lies here, who tried to hustle the East.?
Rudyard Kipling The Naulahka, ch. 5, heading (1892).
I have that problem with some parts we were bidding on. The other way out is I sub them out to qualified machinists that have a couple of machines in their basement and have no overhead and are semi retired. I concentrate on the large parts that require a reasonable overhead to accommodate the machines to do them. I run older machines and do a lot of manual work as well as cnc stuff. An older machine is slower but if you don't have to continuously watch it while its cutting parts I can run a manual machine at the same time and make out quite well.
wellllllllll, to this point, i would add, was in Home Depot yeasterday, and yes since last month American standard toilets have been replaced with toilets from China,(who else) Another point to remember when people will say the economy is going down the toilet, and you can say , "Yes, Chinese toilets!!!"