Another day in my business.. or "pissin' and moanin'"

[lendaddy]

I have to be blunt, this **** is killing us:

A good customer has a project we are involved in that uses several components. I spent a few weeks researching a couple that had potential for us and found a whale. They were taking it in the brown eye on one and I quoted it to them at 30% savings with much enthusiasm.

Two weeks later we finally get a meeting with the purchasing folks and when I bring it up I basically get the "yea thanks, we found an overseas supplier for 50% savings." (fwiw I can't touch that, it's barely above commodity material costs)

[vomit]

Now I can appreciate that they have to do what's best for them, but fukc

Then I open my mail to find a letter from the county telling me that unless I pay the tax on my equipment soon they will seize it(that's right we pay tax here for the right to own equipment).


If we don't land something big and soon...........

Just venting......

[lendaddy]

Maybe we'll start making Gererators and electric superchargers, I think that's where the market is moving

[Oh Haha]

Hey Joel,
I know kinda what you mean. I just found out today that we lost a pretty good account. I just met with my contact last week and everything was fine. We got a cancellation letter yesterday. They are changing companies because the plant manager thinks it's time and no matter what we were to offer, it was lost. The company that we took it from got it back, even though they did a crappt job and supposedly " burnt the bridge" when they left last time.

Ok, I don't own the company but it still is going to hurt my branch which could mean we may need to layoff an employee. While the big news is usually the UAW and their plight, it's the suppliers to them and the small shops that maybe suffer more.
We are actually moving away from manufacturing accounts and getting into the medical and education vending business. Less volatile and susceptible to market trends. Man, I thought I was the only one feeling crappy about business right now.
Hey, I'll honk when I'm in GR tomorrow. Won't have time to meet as we have class from 8 to 5 and then a three hour drive back to Flint. Yee ha!

[jim72911t]

I really hope things turn around for you, lendaddy. Manufacturing is a strange racket to be in, surely. I'll hear one story about a company that is busting at the seams, then another about a company that just closed it's doors.

May your next post be of the former variety.

Good luck,
Jim

Oh, I've never understood paying property tax on capital equipment, either. Maybe an accountant can explain it.

[Rot 911]

Lendaddy, businesses and to some extent people are so short sighted anymore. They are just looking for the easy or cheap way to go without thinking of long term consequences.

On a personal note 2 months after I was fired I am working a part time job and earning 50% less than my old job. We just have to keep hoping things will get better.

[lendaddy]

Originally posted by Oh Haha
Hey Joel,
I know kinda what you mean. I just found out today that we lost a pretty good account. I just met with my contact last week and everything was fine. We got a cancellation letter yesterday. They are changing companies because the plant manager thinks it's time and no matter what we were to offer, it was lost. The company that we took it from got it back, even though they did a crappt job and supposedly " burnt the bridge" when they left last time.

Ok, I don't own the company but it still is going to hurt my branch which could mean we may need to layoff an employee. While the big news is usually the UAW and their plight, it's the suppliers to them and the small shops that maybe suffer more.
We are actually moving away from manufacturing accounts and getting into the medical and education vending business. Less volatile and susceptible to market trends. Man, I thought I was the only one feeling crappy about business right now.
Hey, I'll honk when I'm in GR tomorrow. Won't have time to meet as we have class from 8 to 5 and then a three hour drive back to Flint. Yee ha!

Hey, if you're up for lunch let me know. I never know my schedule more than an hour ahead so.... but if things work out.

[lendaddy]

Originally posted by jim72911t
I really hope things turn around for you, lendaddy. Manufacturing is a strange racket to be in, surely. I'll hear one story about a company that is busting at the seams, then another about a company that just closed it's doors.

May your next post be of the former variety.

Good luck,
Jim

Oh, I've never understood paying property tax on capital equipment, either. Maybe an accountant can explain it.

Absolutely, some companies are kicking ass and all the rest are drowning(here in Michigan anyway).

We need to get out of our long/big run mentality, that stuff is all going overseas. Specialty is the game now, but I fear it's too little too late. Restructuring may be our only choice soon.

[lendaddy]

Originally posted by Kurt V
Lendaddy, businesses and to some extent people are so short sighted anymore. They are just looking for the easy or cheap way to go without thinking of long term consequences.

On a personal note 2 months after I was fired I am working a part time job and earning 50% less than my old job. We just have to keep hoping things will get better.

I agree Kurt and I have no personal animosity toward my customers as I understand their dilemma as well. I'm young(ish), I'll be fine either way. But it's my fathers company that he started right out of Vietnam so I think you see the problem.

I am an optimist, but it's getting tough and I think my optimism is bordering naivete now.

[jim72911t]

Originally posted by lendaddy
We need to get out of our long/big run mentality, that stuff is all going overseas. Specialty is the game now, but I fear it's too little too late. Restructuring may be our only choice soon.

len,
I didn't want to suggest a new plan for your business, since I am in no place to do so.

I'll just say that I've always been in short run manufacturing, niche markets, etc. You get a product to market, make your money, and get out. Then, it's on to the next one. China will always be able to make something cheaper, and will, if they see a market.

Focus on innovation, flexibility, short lead times, and quality. (there I go, offering advice, sorry)

All the best,
Jim

[lendaddy]

Originally posted by jim72911t
len,
I didn't want to suggest a new plan for your business, since I am in no place to do so.

I'll just say that I've always been in short run manufacturing, niche markets, etc. You get a product to market, make your money, and get out. Then, it's on to the next one. China will always be able to make something cheaper, and will, if they see a market.

Focus on innovation, flexibility, short lead times, and quality. (there I go, offering advice, sorry)

All the best,
Jim

No Jim I agree 100%, it's just that we've always been high volume production, that's what we know. We are not at all against the switch, it's just foreign to us.

I appreciate any advice I can get, even criticism. All information is good information.

[coloradoporsche]

They were taking it in the brown eye on one and I quoted it to them at 30% savings with much enthusiasm.

Two weeks later we finally get a meeting with the purchasing folks and when I bring it up I basically get the "yea thanks, we found an overseas supplier for 50% savings." (fwiw I can't touch that, it's barely above commodity material costs)

He who lives by the price cut, dies by the price cut.

[Shaun @ Tru6]

Originally posted by lendaddy
Absolutely, some companies are kicking ass and all the rest are drowning(here in Michigan anyway).

We need to get out of our long/big run mentality, that stuff is all going overseas. Specialty is the game now, but I fear it's too little too late. Restructuring may be our only choice soon.

Sorry to say, short run manufacturing is going overseas too. I wanted to keep all our clothing US made and have been paying 3X unit cost pre-duty & shipping to do so for our tops.

Getting into pants and jackets for boys, I honestly thought I could have 10K pair of pants made here in the US, a smallish, but very significant order. The sad fact is that NO ONE in this country is now producing pants for kids. All those plants have shut down. Turkey, Macau, Vietnam. Have to go in the next 30 days.

Sorry to hear it Joel. My best and only advice is to bet someone on the Internet to get your business back in the running. Worked for me.

[lendaddy]

Originally posted by coloradoporsche
He who lives by the price cut, dies by the price cut.

That's a fair point and I agree. We have always sold on our service but now we're losing on our price.

[lendaddy]

Originally posted by Shaun 84 Targa
Sorry to say, short run manufacturing is going overseas too. I wanted to keep all our clothing US made and have been paying 3X unit cost pre-duty & shipping to do so for our tops.

Getting into pants and jackets for boys, I honestly thought I could have 10K pair of pants made here in the US, a smallish, but very significant order. The sad fact is that NO ONE in this country is now producing pants for kids. All those plants have shut down. Turkey, Macau, Vietnam. Have to go in the next 30 days.

Sorry to hear it Joel. My best and only advice is to bet someone on the Internet to get your business back in the running. Worked for me.

Good stuff

Another buddy of mine owns an apparel company down the street from me. He has Disney and Nascar licenses and sells to department stores in the midwest. He now has next to nothing made in the US(vs 100% two years ago). I was talking to him two weeks ago and he said a shirt they were wholesaling for $13 a year ago is now $5 and there is no negotiation. But he was smart and fast and moved everything overseas.

[CurtEgerer]

It's incredibly bad here in Michigan as you know. The only remaining bank - Commerica - announced today it's leaving for Texas. That's right, there are no banks headquartered in Michigan anymore! Phizer left last month. It's a one-way parade. Our benevolent Governess' plan? It's simple: a NEW TAX on services to go along with our sales taxes and property taxes - that will drive several large insurance companies out of the state for sure!! And yes, as Len points out we businesses pay additional taxes EACH YEAR on the equipment we own and have ALREADY PAID SALES TAX ON (I wish I were making this up, but I'm not)

I just got back from a few days in Miami and am still getting over the shock and awe of the construction boom down there. I lost count of all the high-rises being built.

There's absolutely nothing being built here. There are no new business start-ups and there is no real estate selling in Michigan. We're on a sinking ship here boys and there's nobody at the helm.

[competentone]

Originally posted by lendaddy
Two weeks later we finally get a meeting with the purchasing folks and when I bring it up I basically get the "yea thanks, we found an overseas supplier for 50% savings." (fwiw I can't touch that, it's barely above commodity material costs)

I don't know what you're making, or what the overseas supplier is providing, but you may want to keep in touch with your (former?) customer. It is not uncommon for people to eventually realize that "cheaper" is not always the "least expensive."

If someone else can provide a product at "barely above commodity material costs" -- even considering the labor differences for overseas manufacture -- you have to expect there could be some quality differences.

[lendaddy]

Originally posted by CurtEgerer
It's incredibly bad here in Michigan as you know. The only remaining bank - Commerica - announced today it's leaving for Texas. That's right, there are no banks headquartered in Michigan anymore! Phizer left last month. It's a one-way parade. Our benevolent Governess' plan? It's simple: a NEW TAX on services to go along with our sales taxes and property taxes - that will drive several large insurance companies out of the state for sure!! And yes, as Len points out we businesses pay additional taxes EACH YEAR on the equipment we own and have ALREADY PAID SALES TAX ON (I wish I were making this up, but I'm not)

I just got back from a few days in Miami and am still getting over the shock and awe of the construction boom down there. I lost count of all the high-rises being built.

There's absolutely nothing being built here. There are no new business start-ups and there is no real estate selling in Michigan. We're on a sinking ship here boys and there's nobody at the helm.

The man tells no lies. Here in Grand Rapids we have "The Medical Mile" where they are building a bunch of medical facilities but breaking into that market is not proving fruitful for me (too small).

Our Gov. is an idiot of epic proportions. She honestly doesn't understand that she is driving business away. It's like she thinks screaming "it's not fair!!!" will solve our problems.

[lendaddy]

Originally posted by competentone
I don't know what you're making, or what the overseas supplier is providing, but you may want to keep in touch with your (former?) customer. It is not uncommon for people to eventually realize that "cheaper" is not always the "least expensive."

If someone else can provide a product at "barely above commodity material costs" -- even considering the labor differences for overseas manufacture -- you have to expect there could be some quality differences.

You are spot on, they actually told me in the meeting that they are not getting quality out of China and we may get it all back. But I won't make it that long and I told them so. It's not a good deal for them no matter what they do. They built entire plants over there but the results are so poor they are considering walking away.

[competentone]

Originally posted by lendaddy
You are spot on, they actually told me in the meeting that they are not geting quality out of China and we may get it all back. But I won't make it that long and I told them so. It's not a good deal for them no matter what they do.

Sounds like it could be a job for a super-salesperson. Sell the quality, persuade them that it's not worth it for them to take the "cheapest" route.

Do you have samples of their overseas-manufactured product? Maybe you can find more flaws in it than they are aware and demonstrate that the superior quality you offer is well worth it?

[CurtEgerer]

She was interviewed this morning on WJR regarding Comerica packing their bags and she made the most idiotic comment I've ever heard. Understand that several Comerica board members were very high-profile supporters in her campaign for re-election just last fall. First, she didn't even know they were leaving until yesterday (nor did she know Phizer was leaving and taking 3000+ jobs with them) - WTF is her and her staff doing all day long??!! Then she says she can't believe Comerica is looking out for their shareholders and not putting the community first!!!!!!!!!!!!!!!!!! Huh?? She has taken cluelessness to heights never before seen in the annals of American history.