You stated he likes machining and did good work for a while. It could be he was gaming the system which others said. Could be a lifestyle problem...we all chased the girls when we were young. Multiple studies have shown you NEED 8hrs of sleep. ......
I wrote a reply yesterday, and the "Women weaken legs" concept was definitely a theory. But I did have any ideas for motivation other than to suspend without pay for a week and just decided it would not work.
Slept on it and this popped into my head. Tell him he has to get up to speed. Each day you are going to give him a days work and he cannot leave until it is done.
Also, a couple of days in, possibly after an improved days work, explain how the business works, overhead, expenses profit margin and loss. A business that does not compete goes under. Enough detail so he can understand you are not able to pay him to sit on his hands, just can't. Tell him when you are gone some other guy maybe him, will telling some other young guy the same thing. This will teach him to set goals and that the world, business and otherwise, is competitive just like sports. He is a player on your team and you both have competitors.
Also, this is a limited offer due to longer days are not profitable and coaches cannot play the game for their players. Set goals, compete and win. Winning, at first, is job satisfaction and later as he can see for himself, it is more responsibility, respect and earnings.
Oh ya, that girl or maybe another might stick around.
If he is truly hopeless, he will be gone in two weeks. Do not forget to keep score.