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Investing in a Market

As we are all painfully aware, much of the manufacturing base that was once domestically owned has been supplanted by companies from overseas.

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As we are all painfully aware, much of the manufacturing base that was once domestically owned has been supplanted by companies from overseas. Many of these companies simply set up sales and distribution offices here, and while they employee some citizens, the bulk of their investments remain in the home country. However, there are exceptions. One of these is a cutting tool manufacturer named Horn USA. Located in Franklin TN, Horn not only sells tools in the United States, but it manufactures them here as well.

Here's what happened: For better or worse, the United States is one of a couple of countries that still uses the Imperial system of weights and measures. When Horn tried to sell to the U.S. market more than a decade ago, it quickly realized that taking orders for tools in inches meant that those tools would be treated as specials in the factory in Germany. This turned out to be untenable as the tools cost more and delivery times suffered.

Being German, Horn is pragmatic. The company decided to set up operations in Tennessee so it could manufacture Imperial cutting tools as standard.

I was able to visit Horn in Germany a while back, and I wrote an article about how they make indexible inserts. The story also gives some background on the company’s more-than-cursory participation in the U.S. market.