# Automation, Machining, and a Coal Mine: What Vertical Integration Buys You | Ep. 51

- Show: [Lights Out](https://hardwarepodcasts.com/podcast/lights-out)
- Published: 2026-10-09
- Length: 52m
- Episode: 51
- Page: https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51
- Listen: https://8819970d-2c51-481c-b08a-4d2a806885b2.libsyn.com/automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51

## Summary

Michael McHale, founder of PSA Systems, explains how his vertically integrated automation integrator and machine shop in Pennsylvania grew from $900,000 in revenue to over $30 million by owning fabrication, machining, and engineering capabilities in-house. He discusses the capital-intensive nature of modern manufacturing, citing an $800,000 five-axis mill that cost nearly a million to install, and advocates for a five-year strategic plan over short-term EBITDA chasing. McHale also details PSA's rollout of IBM Watson for enterprise AI workflow automation, emphasizing the need for data guardrails when handling Department of Defense contracts, and shares his philosophy that employee prosperity is the true measure of business success.

## Chapters

- [0:00](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=0) Introduction: Michael McHale and PSA Systems
- [2:44](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=164) Automation Demand and Skilled Headcount Growth
- [5:41](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=341) Vertical Integration and the Machine Shop Arms Race
- [12:18](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=738) Long-Term Strategy vs. Short-Term ROI
- [18:31](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=1111) IBM Watson AI Rollout and Workflow Automation
- [28:46](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=1726) Enterprise AI Guardrails and CMMC Compliance
- [33:23](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=2003) PSA Systems Growth and Vertical Integration
- [38:15](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=2295) Coal Mine Acquisition and Turnkey Services
- [43:27](https://hardwarepodcasts.com/podcast/lights-out/2026-10-09-automation-machining-and-a-coal-mine-what-vertical-integration-buys-you-ep-51#t=2607) Entrepreneurial Roller Coaster and Employee Success

## Topics

- [Scaling production](https://hardwarepodcasts.com/topic/scaling-production)
- [AI & machine learning](https://hardwarepodcasts.com/topic/ai-and-machine-learning)
- [Manufacturing partners & offshoring](https://hardwarepodcasts.com/topic/manufacturing-partners)
- [Pricing, margins & unit economics](https://hardwarepodcasts.com/topic/pricing-and-unit-economics)
- [Leadership, teams & culture](https://hardwarepodcasts.com/topic/leadership-and-culture)

## Most relevant to

companies scaling up

## Mentioned

- PSA Systems (company)
- IBM Watson (tool)
- Hennig (company)
- Navu (tool)
- Fastums (company)
- Claude (tool)
- General Dynamics (company)
- Nvidia (company)

## Related episodes from other shows

- [211: How Vertical Integration Helps Kwik Trip Achieve Manufacturing Excellence with Paul Blank and Scott Schiebel](https://hardwarepodcasts.com/podcast/manufacturing-happy-hour/2024-11-12-211-how-vertical-integration-helps-kwik-trip-achieve-manufacturing-excellence-wi) (Manufacturing Happy Hour)
- [276: 2026 Automation Industry Outlook, Live from the A3 Business Forum](https://hardwarepodcasts.com/podcast/manufacturing-happy-hour/2026-02-24-276-2026-automation-industry-outlook-live-from-the-a3-business-forum) (Manufacturing Happy Hour)
- [160: Buying a Manufacturing Company and Reimagining Upskilling with Bill Berrien, CEO of Pindel Global Precision](https://hardwarepodcasts.com/podcast/manufacturing-happy-hour/2023-11-07-160-buying-a-manufacturing-company-and-reimagining-upskilling-with-bill-berrien) (Manufacturing Happy Hour)
- [277: The Future of CAM Software and Elevating the Status of Manufacturing Jobs with Mastercam President Russ Bukowski](https://hardwarepodcasts.com/podcast/manufacturing-happy-hour/2026-03-03-277-the-future-of-cam-software-and-elevating-the-status-of-manufacturing-jobs-wi) (Manufacturing Happy Hour)
- [The Success of MATRIC: Evolution, Automation and Future Growth Strategies with VP Bradley Turner](https://hardwarepodcasts.com/podcast/ems-c-level/2023-10-30-the-success-of-matric-evolution-automation-and-future-growth-strategies-with-vp) (EMS@C-LEVEL)

## Citing this page

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