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When the Machine Stopped: A Cautionary Tale from Industrial America
From the careful craftsmanship of machine tools to the ingenious crafting of a leverage buyout and the intricacies of a bitter trade dispute,Holland tells the life-and-death story of a machine tool company called Burgmaster. When the Machine Stopped speaks volumes on innovation,foreign and domestic competition,employee relations,leveraged buyouts,U.S. trade policy,and more. "Anyone who wants to understand American business must read When the Machine Stopped-Holland has written the best business book in years. "-Chicago Tribune "Fascinating-the fate of Burgmaster and its brethren is crucial to the U.S. industrial economy. "-Business Week
- GenresHistory
Hardcover
Published March 1, 1989
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March 20, 2025A whirlwind tour of the decline of the American manufacturing industry and its subordination to finance capital, from the point of view of one machine tools manufacturing company. (later one conglomerate, and later still a number of holding companies).
The story starts in the heyday of post-WWII military spending, where a fat defense budget and management with floor experience enable burgmaster to start fast and keep running. From there the story twists and turns through an acquisition, trade disputes, and finally a leveraged buy out, which inevitably ends to no one’s satisfaction.
It’s all interesting, but for me the stand out was the trade dispute but in which Burgmaster attempts to lobby the president to hobble Japanese machine tool imports by carving them out of existing capital goods tax write offs. It’s a revealing look at how the lines get drawn between free and fair trade (aka protectionism). Turns out it involves not only lobbying, but media circuses, and innovation in PR.
Through juxtaposing that dispute and the history of Burgmaster the book (mostly implicitly) raises questions about the common understanding of the difference between free and fair trade as well. e.g.
- Is it less fair to directly subsidize industries with gambling than it is to fund schools the same way, given the latter enables a specialized labor force.
- Is it more fair to subsidize your manufacturing base with bottomless military spending while limiting your competitors ability to spend on their military than it is to have a government organization to guide industrial policy?
- Is the pentagon a “perverse MITI” (by the epilogue the author is done playing coy)
Additionally the crash course in leveraged buy outs is great. Wild to hear that LBOs were fairly early in courting pension funds.
Found this a fascinating read. I don’t know if it’s right to say that it feels prescient, but it does feel like things from the end of this book (1987) to now have proceeded in a more or less straight line.
The story starts in the heyday of post-WWII military spending, where a fat defense budget and management with floor experience enable burgmaster to start fast and keep running. From there the story twists and turns through an acquisition, trade disputes, and finally a leveraged buy out, which inevitably ends to no one’s satisfaction.
It’s all interesting, but for me the stand out was the trade dispute but in which Burgmaster attempts to lobby the president to hobble Japanese machine tool imports by carving them out of existing capital goods tax write offs. It’s a revealing look at how the lines get drawn between free and fair trade (aka protectionism). Turns out it involves not only lobbying, but media circuses, and innovation in PR.
Through juxtaposing that dispute and the history of Burgmaster the book (mostly implicitly) raises questions about the common understanding of the difference between free and fair trade as well. e.g.
- Is it less fair to directly subsidize industries with gambling than it is to fund schools the same way, given the latter enables a specialized labor force.
- Is it more fair to subsidize your manufacturing base with bottomless military spending while limiting your competitors ability to spend on their military than it is to have a government organization to guide industrial policy?
- Is the pentagon a “perverse MITI” (by the epilogue the author is done playing coy)
Additionally the crash course in leveraged buy outs is great. Wild to hear that LBOs were fairly early in courting pension funds.
Found this a fascinating read. I don’t know if it’s right to say that it feels prescient, but it does feel like things from the end of this book (1987) to now have proceeded in a more or less straight line.
September 26, 2020
One of my dads books i decided to read but couldnt get into it, im sure he loved it
April 27, 2012
I read this in college.
Displaying 1 - 3 of 3 reviews