What MakerBot exit means for N.Y.C. and the 3D business

New York Business Journal ^ | 2016 April 27 | Teresa Novellino

[CutePuppy]

It was a double whammy for Brooklyn and New York City manufacturing this week with news that 3D printer company MakerBot Industries would be laying off local workers as it shifts its production work, although not its headquarters, to China.

It is doing so through St. Petersburg, Florida-based Jabil Circuit (NYSE: JBL), one of the largest contract manufacturers in the world, which has facilities in China. The reasons behind this decision are myriad. Chief among them are the competitive headwinds in the 3D consumer printer business itself, and the high cost of doing business in New York City, ..... < snip >

..... Johan-Till Broer, MakerBot's director of public relations, said the move from the plant in Sunset Park, Brooklyn's Industry City complex would allow the company not just to cut costs, but also to be nimbler.

"The 3D printing market has been very volatile and we need to be able to scale production up or down more quickly, without the fixed costs associated with maintaining a factory in New York City," Broer told the New York Business Journal. "We also believe that the experience, resources and proven processes at Jabil will help us further improve product quality."

MakerBot, which is a subsidiary of Eden Prairie, Minnesota-based 3-D printing company Stratasys (Nasdaq: SYSS), is not disclosing the number of factory workers, whose salaries start at $10.75 per hour, will be affected beyond saying that it will be "a significant number" over the next couple of months. The company will retain its headquarters in downtown Brooklyn, where functions such as marketing, engineering, finance and legal are based.

"We will retain key personnel from the factory in-house in the areas of logistics, repair, planning, quality, and operations," Broer said. ..... < snip >

[CutePuppy]

High taxes, expensive mandates, onerous regulations, increasing costs of doing business (like increases in minimum wage, medical insurance, increases in mandatory paid leaves from work etc.) are forcing even the most creative and relatively high gross-margins businesses out of production in the U.S. If "inversions" to escape double or triple taxation are shut down by sleight of hand by DOJ, SEC or other administrative agencies, there will be plenty of companies doing design and manufacturing elsewhere, with the money flowing one way - out of the U.S. ...

10 years ago U.S. corporations had $2T in cash on their balance sheets — $1.2T in the U.S. and $800B outside; today corporations have about $3T in cash, of which $800B are in the U.S. and nearly $2.2T outside (which they cannot bring home, lest they be taxed another 45% tax on it, so they keep reinvesting it there, providing jobs, and building plants and other infrastructure.)

Tariffs, VATs and higher taxes are not going to fix this, more likely just exacerbate the exodus of capital from the U.S. and diminishing the capital formation in the U.S.

"Capital will always go where it's welcome, and stay where it's well treated" - Walter Wriston

"The bigger the government, the smaller the citizen" - Dennis Prager

"Big government is not the solution to our problems. Big government is the problem" - Ronald Reagan

"One of the great mistakes is to judge policies and programs by their intentions rather than their results" - Milton Friedman

[CincyRichieRich]

Makerbot was/is a cool company. I got into the 3D space, investing in the three big ones early on and sold somewhat after SYSS acquired Makerbot, i.e., before the bottom fell out. MB was a rebel, much like the Apple crowd, a bunch of libs who went against the grain. Hypocritical of them to be so involved in Chinese mfg.

Anyway, 3D printing, for me was a lot of fun to watch unfold. One of my best investments of all. I don’t own any of them now. It is moving into commoditization time. Once some get into the very high temp metal liquid printing (I think SSYS did/does some of this), then a winner in this space will occur. Imagine nozzles which can take incredibly high temp metal liquid (that is redundant) and cure it so fast it won’t oxidize...likely need nitrogen screening...very cool indeed. Oh well, enough for now.

[Attention Surplus Disorder]

This (3D printing) was an interesting saga with which I was completely uninvolved, tho a friend of mine has a makerbot and another got his clock cleaned on DDD stock. At the outset, this seemed like it was going to revolutionize life on earth but apparently there are few barriers to entry.

The stocks have certainly been poleaxed.

[Spktyr]

Already being done by Solid Concepts out of Texas. They 3D printed a stainless/Inconel 1911 as a demo.

https://en.wikipedia.org/wiki/Solid_Concepts_1911_DMLS

[TexasGator]

" high temp metal liquid (that is redundant) "

Mercury has a freezing point of −38.83 °

[CincyRichieRich]

" high temp metal liquid (that is redundant) " Mercury has a freezing point of −38.83 ° =================== Touche. I once broke a thermometer, poured it onto an old silver dollar...that was when I was 17 yrs old. The mercury disappeared. Very cool. Burning magnesium ribbon under water is always also a cool thing to do. I was lab assistant in high school chemistry; we did some great stuff.

[Axenolith]

Sintered though, not cast/laid as liquid. AFAIK, it might be just as solid, but it’d be nice to see 20 or 30k rounds through it :-)

[Spktyr]

It’s up to over 6000 rounds so far. Ammo costs money.

[Axenolith]

Sounds pretty proven there!

6K round = time for reloading equipment :-)

[nascarnation]

Interesting.
I assume their product target is aircraft engine stuff?

[Spktyr]

They’re a rapid prototyping/tool and die/low volume production outfit. Lots of different locations and clients, everything from spacecraft to aircraft to kids’ toys. The SpaceX SuperDraco rocket engine is 3D printed using Inconel and this process. And you can get turbo kits for many cars that have Inconel parts. Inconel is not just for aircraft any more and it’s been getting wider and wider use.

https://en.wikipedia.org/wiki/Inconel#Uses

https://en.wikipedia.org/wiki/Solid_Concepts