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Jorgensen Forge closing

I cant understand how the market can support these real estate prices.

Ever been to the vegas strip? All the big casinos have high end malls attached. Super high priced stores. Not a customer in them. Rent must be a fortune. But they are there, still open.
 
Las Vegas is weird, and sometimes there are "loss leader" things - there's a fancy mall because people think they like that, or part of a couple wants that, but it's mainly there to make it easier to get people to gamble. Also, recall they're heavily regulated, and their business may be changing in the face of the web as much as anybody else.

Seattle is a different story - for the most part the very high priced real estate is very active - either dwellings, offices, warehouses, or industry - all full, all active.
 
Jorgensen Forge is one of the old school manufacturing plants that somehow managed to stay afloat. With a FLEET of huge lathes, they manufactured ship propeller shafts, including the shafts for nuclear submarines. I thought it was nuts that a company in Seattle was making the shafts, and then shipping them to Electric Boat. One would think the east coast would have a shop that could do this work. Going into Jorgensen Forge and seeing at least ten lathes that are over one hundred feet long and even longer, is a pretty overwhelming experience.

I sold them the largest machine I've ever made a few years ago, to mill the keyways in the ship propeller shafts. Their lathes, most of which were at least fifty years old, weren't accurate enough to hold and mill keyways, so I made an eight foot slide to attach to the beds of their lathes to hold and move one of my largest milling heads with a right angle attachment. A really interesting project. An incredible group of very talented machinists worked there. A real loss for our country, another plant that once it's gone will never be replaced. Figures I learn of this on Practical Machinist.
 
That work is done in Erie, Pa at "national Forge".

I was told that they got the work from another vendor that couldn't hold spec.
 
if their largest customers were ship builders then maybe its a sign that ship building is declining in the USA
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a lot of government subsidized ship building has gone to those countries that help subsidize it.
 
I keep my boat right across the river from Jorgensen. BANG BANG BANG all nite long, lol. Those hammers are loud.

It'll be interesting to see how the development goes. The Duwamish is a Superfund site and very hard to get permission to do anything.

Some years back Boeing tried to give BFI to King County, but the county didn't want the liability. Least that was the story at the time...
 
Real estate prices are being driven in some ways by the Seattle version of "Silicon Valley" I think. Started with Microsoft and then add in Amazon.com which then spawned Blue Origin. Not to mention a huge number of spin off companies in the software industry that have spun out of MS covering about any and every industry you can think of . . .

Then there are the mainstays - Boeing has been building new facilities for the 777X program as well as building production capacity for a number of other aircraft - lots of feeder companies support these programs located in Seattle as well.

One of my son's best friends did running start through a local community college meaning that he graduated from High School with a 2 year Associates of Engineering degree - then went to the University of Washington in Seattle and earned a degree in Infomatics graduating at the ripe old age of 20 . . . picked up by Amazon for $104k / year salary to start.

When companies generate enough income to pay salaries like this - the consequence is that prices for everything go up in that region.
 
Even on nuclear submarine jobs, the profit margin for a forge/turning shop like that is going to be very small. The current owners are strictly money men, who bought it out of bankruptcy, and they are used to gigantic profits- If a smooth running Jorgensen made 5% a year, I would be amazed. Whereas the profit on turning this real estate over, once, is in the tens of millions. Short term financial thinking, aided by the hot real estate market.
Geographically, as mentioned, Seattle is not the best location for military shipbuilding- most is done in the gulf and on the east coast. The west coast naval shipyards do refits, but not much building vessels from scratch.

We actually have a thriving shipbuilding industry in the NW, but its on a smaller scale, usually topping out at ships around 300 feet long, so we have decent infrastructure for that size vessel, but not much call for battleship parts. Jorgensen was built by the government, during WW2, to diversify geographic locations of defense industries, when they thought there was a realistic chance the Japanese would actually attack the mainland USA. It was not located in Seattle due to commercial economic reasons, but because Puget Sound was a nice protected inland bay to build and repair naval vessels for the Pacific Theater. After the war, in the fifties, it became a sort of charity case for the Defense department- they wanted to keep essential manufacturing both operating and geographically distributed during the cold war, so "your tax dollars" supported big defense industry sites all over the country. But commercially, there was never enough work to keep this facility in Seattle, even in the fifties. As the government stops building the same type of giant steel weapons, and switches to littoral combat ships, there just isnt the same need to keep open a network of big government run shipyards- we are seeing the same forces that cause Jorgensen to close affecting the current auction of the battleship anchor chainmaking facility at the Boston Naval shipyard- that auction is running right now.

So- Real Estate prices in Seattle certainly are partly to blame, shortsighted turnaround finance guys are partly to blame, but, mostly, its the changing way military weapons are designed and built, and the switch from government owned facilities to private ones, which has been going on for fifty years now.
 
Not to worry....
There will soon be a yoga, a CrossFit, a Starbucks, two brewpubs and a liquor store there.
They can use the machines as ‘decor’.
 
Even on nuclear submarine jobs, the profit margin for a forge/turning shop like that is going to be very small. The current owners are strictly money men, who bought it out of bankruptcy, and they are used to gigantic profits- If a smooth running Jorgensen made 5% a year, I would be amazed. Whereas the profit on turning this real estate over, once, is in the tens of millions. Short term financial thinking, aided by the hot real estate market.
Geographically, as mentioned, Seattle is not the best location for military shipbuilding- most is done in the gulf and on the east coast. The west coast naval shipyards do refits, but not much building vessels from scratch.

We actually have a thriving shipbuilding industry in the NW, but its on a smaller scale, usually topping out at ships around 300 feet long, so we have decent infrastructure for that size vessel, but not much call for battleship parts. Jorgensen was built by the government, during WW2, to diversify geographic locations of defense industries, when they thought there was a realistic chance the Japanese would actually attack the mainland USA. It was not located in Seattle due to commercial economic reasons, but because Puget Sound was a nice protected inland bay to build and repair naval vessels for the Pacific Theater. After the war, in the fifties, it became a sort of charity case for the Defense department- they wanted to keep essential manufacturing both operating and geographically distributed during the cold war, so "your tax dollars" supported big defense industry sites all over the country. But commercially, there was never enough work to keep this facility in Seattle, even in the fifties. As the government stops building the same type of giant steel weapons, and switches to littoral combat ships, there just isnt the same need to keep open a network of big government run shipyards- we are seeing the same forces that cause Jorgensen to close affecting the current auction of the battleship anchor chainmaking facility at the Boston Naval shipyard- that auction is running right now.

So- Real Estate prices in Seattle certainly are partly to blame, shortsighted turnaround finance guys are partly to blame, but, mostly, its the changing way military weapons are designed and built, and the switch from government owned facilities to private ones, which has been going on for fifty years now.

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most ship building shops are government supported.
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in China i saw place building 1024 capacity sea container ships (which are small). i was invited for a tour cause they had large machines but not enough work to run them 5 days a week the whole year. they were looking for more work besides ship building to keep the big equipment running making stuff. it was German company partnership with Chinese government i believe.
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i have to believe the government was helping the business
 

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Currently, the majority of commercial shipbuilding is from China, Korea, and Japan. China and Korea subsidize and support their "private" companies that build ships. Japan claims not to, but the japanese banking system and interconnectiveness of companies means a japanese yard will be much less likely to go bankrupt, get bought out by wall street turnaround guys, or be worried about week to week stock prices.
So, in all three cases, our yards are at a huge disadvantage.

Shops like Jorgensen were dependent on the fact that we spend more on defense than the next ten countries combined, but there still is only so much work, and one 100 foot long new CNC lathe is going to put a few dozen 80 year old manuals out of business. And, as I mentioned, shipbuilding tech is changing. There are two new aircraft carriers under construction, and Trump wants 6 or 8 more- but even that, which is ten billion or so each, really would not strain ONE decent sized prop shaft shop- and my guess is there are still several shops in the USA who can do this work- so, again, we have excess capacity, very old and outdated facilities, and no real government impetus to support shipbuilding facilities just to have them sit idle.
 
Not this particular shop. This shop was, as I said, built in 1940 by the Navy, and run by Isaacson Forge works. This was a typical WW2 procedure, where the government built the building, bought the tools, and then gave Isaacson contracts to keep the shop busy. In 65, it was bought by Jorgensen.
The Navy, in general, tries to make sure there is US capacity for most of its stuff- I think there are some alloys, some electronics, and various other things that must be imported, but for something relatively simple like turning propellor shafts, my guess is that there are several government owned naval shipyards, and several private contractors, who can do what this shop did. But the current military spending is not about maintaining a lot of old machine shops- its more about pitting bidders against each other, even though they pay cost plus on most jobs. So they are not building buildings, and buying machine tools, and then giving them to private industry, like the did thru the early 60s. The Heavy Press program, for example, was 100% government funded, in the mid to late 50s. Then the presses were basically given to industry.
 
...So they are not building buildings, and buying machine tools, and then giving them to private industry, like the did thru the early 60s. The Heavy Press program, for example, was 100% government funded, in the mid to late 50s. Then the presses were basically given to industry.

Not hard to understand, given that the armed forces have been the largest consumer of those services. If you want to ensure the capabilities are there when you need them you have to subsidize them, as no way would ordinary industrial demand support them. No other choice.

Tough to see a big heavy engineering plant be scrapped by the sort of dicks you see on Million Dollar Listing, but that's life. A giant 80-year-old manual lathe would be a restorer's dream, but not much current worth beyond that. The need for the technology that won WW2 hasn't entirely disappeared but is less universally useful. Like he says, one 100-foot CNC lathe will probably outproduce, and will certainly outperform, a whole building full of wornout manual iron.
 
Not hard to understand, given that the armed forces have been the largest consumer of those services. If you want to ensure the capabilities are there when you need them you have to subsidize them, as no way would ordinary industrial demand support them. No other choice.

Tough to see a big heavy engineering plant be scrapped by the sort of dicks you see on Million Dollar Listing, but that's life. A giant 80-year-old manual lathe would be a restorer's dream, but not much current worth beyond that. The need for the technology that won WW2 hasn't entirely disappeared but is less universally useful. Like he says, one 100-foot CNC lathe will probably outproduce, and will certainly outperform, a whole building full of wornout manual iron.
Not sure, but it seems that just the seasoned castings and building would be worth the retrofit.
If there were sufficient market.
 








 
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