ensures smooth and reliable operation without the need for expensive precision tolerances on tool holder 32 tool gripper 40 and the entire tool changer mechanism as best shown in fig1 u201c u u201d shaped pocket 79 of lower rigid gripper section 60 is also thinner than the height of slot 74 on tool holder 32 by between 0 020 and 0 050 inches to prevent interference as tool holder 32 is inserted or removed from composite tool gripper 40 as shown in fig4 5 and 6 r 8 type collet 50 has an inner bore 63 which mates with straight upper section 67 of tool holder 32 when straight upper section 67 of tool holder 32 is inserted into the inner bore 63 of collet 50 it is accurately located horizontally but not vertically to accomplish vertical location shoulder 64 on tool holder 32 as shown in fig1 must firmly engage the bottom surface 65 of spindle shaft 44 as shown in fig5 to ensure that shoulder 64 firmly engages the bottom surface of spindle shaft 44 tool holder 32 is vertically located when flat top 82 of gap 74 on tool holder 32 rests on upper surface 76 of lower rigid gripper section 60 these two mating horizontal surfaces ensure that tool holder 32 is accurately located vertically and also ensure that the longitudinal axis of tool holder 32 remains parallel to the axis of inner bore 63 of collet 50 finally as shown in fig1 the present invention.