Trigger warning - Candid Manufacturing Commentary Connor’s article is great, and asks a lot of the right questions. But I almost fell off my chair at the attached chart. A machine shop with fewer than 20 employees is too small. Not being rude, I’m not sure how they are even viable? It must require heroic sacrifice from everyone involved. This explains much of the discourse on X of recent years. Such small machine shops are not normal. All the shops I have visited in US were 50+ people and I honestly was not aware of this dramatic skew to the low end. First of all, that’s too small to train new machinists. It’s just too expensive and too burdensome to train new workers if they are >5% of your throughout. That’s half your margin. Gone. If you have only 5 employees then training a new person means the company operates at a loss for 2-3 years. Heroic sacrifice. Machining is made-to-order, orders are lumpy, you cannot absorb volatility unless you have scale. Volatility bears a cost. Above a certain size the volatility smoothes out, suddenly you can manage and plan things. Below this size things want to break up like floating ice. I’m surprised it’s sustainable? The average machine shop size in Europe is 106 employees. In USA it is 6! Further European machine shops are shrinking due to China-pressure and many European shops are worried about getting too small and their economics breaking, according to the chart below they are on average 20x bigger than American shops. Looking at the chart below I would guess most of these businesses struggle to break even year on year? It is also incredible that only 9 shops in USA have more than 500 employees?? Germany has 12,066 machine shops and 700 of them have more than 500 employees. Seven hundred to nine! The US industrial base looks to be shattered. To which I mean it is fragmented in the extreme. It needs massive consolidation to create more viability. This might be unpopular, but come on now. You need to put a lot of machine units on a single site, two aisles of 15-20 bays with a central throughway and you need a full 100ft span and 25 ton SWL runway crane coverage overhead with 100s of ft of rail. This is a minimalist setup. Anything less will lose money due to volatility and underutilisation. The level of duplicated effort across 8,000 shops with fewer than 5 staff is a tragedy. This is not good capital allocation, and the market seems to be screaming it. Just make them bigger, duh. How did this happen? Because this is not the shape of the industrial base that won WWII.