Hi David,
For tools demagnetisation use an magnetic field generated by an AC current.
Use the stator (fixed part) of an old AC (240Vac) motor. Connect a light bulb
(40 to 75w) in serie with the field winding an power it up with 240v.
Pass slowly the tool in the stator, thats all.
IMPORTANT:
Isolate all connections (240v may be lethal) & connect all metallics part to ground
Watch also the T° rise of the stator
For machine part , built a fixture to move the stator over the affected zone
2 or 3 time (distance varie with the power )
Select a bulb that give you the half of the normal motor current
pm