Status of Everything Attachments

[Gator6x4]

Skilled nursing did a 2 million addition and the contractor offered a guaranteed material price for an additional fee... covered concrete, framing, drywall roofing, plumbing and electrical... HVAC had a lead time so ordered the day contract inked.

Materials skyrocketed hundreds of thousands but the faculty was protected as was the contractor...

When I was building my present home, I prepaid for a lot of materials and this saved me money. Pre paying for Heating and Air, light refracting UV deflecting double insulated windows and a double insulated atrium door in the den saved me a ton of money.

As a word of caution before prepaying for anything this day and time in your life journey. Know who you are dealing with, there previous history etc before engaging in a pre-paid deal with them or you might end up holding a snipe bag in a ditch waiting for the snipe to arrive.

For those who do not know what a Snipe is read this:

Snipe hunt - Wikipedia

en.wikipedia.org

 

[5030]

Personally speaking, my machine and fab shop business has taken no less than 5 materials cost increases in the last 18 months and I cannot negotiate a lowert price because I don't buy enough material. I'm small potatoes in that respect.

Getting to the point where I cringe every time I call my supplier for material as I know the cost will increase.

All about inflation and materials availability I guess and lately, I've been getting steel made offshore as well, mostly Mexico.

 

[rbstern]

Pretty difficult to do a hedge contract with the small amount of steel EA was buying. Plus while steel prices fluctuate, the price of steel isn't that big of a factor in a 400 pound implement that sells for $3000.

Sorry, but no.

First of all, commodity steel contracts are close to 2/lb right now. Will cost more in finished sheet, bar stock, or round stock form that a manufacturer like EA would buy from a wholesale supplier. Which means the steel in the implement you described is going to be at least 30% of the implement price, and a much higher percentage of the total manufacturing cost; probably something like 60%. In other words, an area where cost predictability/control is important to the business.

For discussion sake, let's assume 300 implements a month, with an average of 400 pounds per implement. That's 120,000 pounds of steel. 60 tons. At current steel prices, that's in the ballpark of a quarter of a million dollars worth of steel per month. Again, without accounting for wholesale/formed steel price markups. And with recent steel prices during COVID, easily as high as $350K/mo. Not a "small amount," by any measure, for a small manufacturing firm.

There are two ways to hedge that: Directly, by simply buying enough steel commodity options (with an option expiration length approximately the same amount of time as expected steel inventory turnover). Or, by hiring a firm that specializes in such hedges; big companies hedge their own commodities with staff analysts doing the work. The rest of the commodity hedging market is served by firms who specialize in providing such a service to small and mid-sized businesses. Either approach is a manageable solution for a small manufacturing firm buying several million dollars worth of steel per year.

It ain't rocket science. As a business practice, it's been perfected for this very reason.

They could have done this. I doubt they were doing it. But it's a good way to inject stability into a commodity-dependent manufacturing business. Makes the cost of manufacturing far more predictable, and that can be passed along to consumers in the form of more stable pricing over time. The monthly fees for hedging might add $10 or $20 to the price of an implement, but it prevents the business from having to raise implement prices every time steel swings dramatically.

 

[5030]

Only 'hedge' I have on my materials cost is my company checkbook.

 

[rbstern]

Only 'hedge' I have on my materials cost is my company checkbook.

And that may be the right choice for your situation.

Hedging isn't right for every business. But if you are buying $250K of a commodity each month and it represents a substantial input to your cost of goods and services, and want any kind of pricing stability, it's an appropriate tool. That's my only argument.

 

[nova3930]

Meanwhile, the Conover Police are working on a criminal case against Ted. They are looking for as many unfulfilled prepaid orders they can find, especially those that have not been refunded. Willing to bet there may be some federal charges also since this involved interstate commerce.

Something may come of that but I doubt it. The fraud statutes all have an element of intent that would be hard to prove with what was until recently a going concern delivering implements albeit slowly. Basically they'll be trying to prove that money was taken with no intent to ever deliver a product, which absent some mustache twisting evil "I'm gonna take these suckers for a ride" document, any attorney worth their salt is going to beat to pieces. I can see the scum sucking lawyer argument now, "My client was a legitimate business, taking orders and payment for future delivery, and just got caught by a bad business environment."

Misappropriating corporate funds might be more likely, but even then, depending on how the corporation is structured it's not necessarily illegal to strip corporate funds for personal use, so long as it's appropriately categorized and paid as either W2 income, dividends, etc. especially if all the shareholders are family or something like that, which I'd almost bet is the case.

 

[3 Horse Ranch]

Something may come of that but I doubt it. The fraud statutes all have an element of intent that would be hard to prove with what was until recently a going concern delivering implements albeit slowly. Basically they'll be trying to prove that money was taken with no intent to ever deliver a product, which absent some mustache twisting evil "I'm gonna take these suckers for a ride" document, any attorney worth their salt is going to beat to pieces. I can see the scum sucking lawyer argument now, "My client was a legitimate business, taking orders and payment for future delivery, and just got caught by a bad business environment."

Misappropriating corporate funds might be more likely, but even then, depending on how the corporation is structured it's not necessarily illegal to strip corporate funds for personal use, so long as it's appropriately categorized and paid as either W2 income, dividends, etc. especially if all the shareholders are family or something like that, which I'd almost bet is the case.

Offering a 10% discount in the last few months of operation after the bank had filed notice of foreclosure indicates intent to defraud. Not difficult to establish at all. If he didn't have $10 million in his back pocket to satisfy the bank he knew, barring winning the Powerball lottery. that he would not be able to fulfill those new orders or refund the customer since he was already 5-6 months backlogged and millions in debt. Offering 10% discount was a conscious effort to get the undecided person to jump at the opportunity and give him a bit more cash.
Had he not offered the 10%, it would be more difficult to make a fraud case, but he gave the prosecutors a gift.

 

[3 Horse Ranch]

It's not a bad model. It's just missing a key leg: The standard approach to make that model work is commodities hedge contracts.

The airlines do it with fuel, to make the cost predictable, since they are selling tickets well in advance of providing service, and fuel costs are the biggest uncontrolled variable in providing the service.

Sorry, but no.

In order to hedge, one has to be able to pay the bills. EA may have hedged at one time, but they have been on a payment before delivery basis for a while according to post by those who claimed to work there, and owed substantial amounts to their suppliers, freight companies, etc.

 

[ultrarunner]

Offering a 10% discount in the last few months of operation after the bank had filed notice of foreclosure indicates intent to defraud. Not difficult to establish at all. If he didn't have $10 million in his back pocket to satisfy the bank he knew, barring winning the Powerball lottery. that he would not be able to fulfill those new orders or refund the customer since he was already 5-6 months backlogged and millions in debt. Offering 10% discount was a conscious effort to get the undecided person to jump at the opportunity and give him a bit more cash.
Had he not offered the 10%, it would be more difficult to make a fraud case, but he gave the prosecutors a gift.

I remember that and passed it on to a guy looking for a grapple…

He almost ordered but hesitated…

I’m sure I would have heard about it if he had ordered and a problem developed…

 

[nova3930]

Offering a 10% discount in the last few months of operation after the bank had filed notice of foreclosure indicates intent to defraud. Not difficult to establish at all. If he didn't have $10 million in his back pocket to satisfy the bank he knew, barring winning the Powerball lottery. that he would not be able to fulfill those new orders or refund the customer since he was already 5-6 months backlogged and millions in debt. Offering 10% discount was a conscious effort to get the undecided person to jump at the opportunity and give him a bit more cash.
Had he not offered the 10%, it would be more difficult to make a fraud case, but he gave the prosecutors a gift.

you can argue that as the DA...and any lawyer worth their salt is going to argue it was a last ditch effort to generate cash flow and keep the wheels from coming off completely.

 

[stuckmotor]

Most of these mathematical discussions make my head spin. The big question for me is, "What will we do without Peanut?"

 

[shooterdon]

We can speculate all we want.

Ted will go to court and it will be settled. I hope he goes to jail because I believe he is a crook,,,but I am judgmental.

The people who got taken are unlikely to see anything unless their CC company steps up. Not sure how debt cards work, but those who paid by check are toast.

 

[D2Cat]

Every lawyer is going to say whatever they have to, to protect their paying client. That's their job. Try to make every point they can to make someone think they meant well and good.

Both sides sling enough mud on the wall and hope enough folks buy their bait and side with them. That's why those with the most money have a better chance of no conviction.

 

[3 Horse Ranch]

you can argue that as the DA...and any lawyer worth their salt is going to argue it was a last ditch effort to generate cash flow and keep the wheels from coming off completely.

Look up the "Reasonable Man" legal definition.

 

[5030]

As usual, the 'mouthpieces' make money and everyone else looses.

 

[Rich_Z]

Well, I got the Top Dog Attachments 60" grapple on Wednesday, 02-28-2024, that I ordered on 02-22-2024. They shipped it out the same day I placed the order. Quite a breath of fresh air buying a grapple that way. And it appears to be just fine for what I wanted.

And I got a full refund from my credit card company for the order placed with EA back in September.

So unless there are any new wrinkles that appear, I am ready to put this unpleasant experience behind me and move on.

 

[Lineman North Florida]

Well, I got the Top Dog Attachments 60" grapple on Wednesday, 02-28-2024, that I ordered on 02-22-2024. They shipped it out the same day I placed the order. Quite a breath of fresh air buying a grapple that way. And it appears to be just fine for what I wanted.

And I got a full refund from my credit card company for the order placed with EA back in September.

So unless there are any new wrinkles that appear, I am ready to put this unpleasant experience behind me and move on.

Glad it all worked out for you, that's business and the way it should be, the supposed best grapple on the face of the earth is no good to you when you can't get it delivered as agreed, but you have a grapple now,enjoy it, a bird in the hand beats two in the bush.

 

[MoKelly]

And I got a full refund from my credit card company for the order placed with EA back in September.

So unless there are any new wrinkles that appear, I am ready to put this unpleasant experience behind me and move on.

That is great. It really shows why paying with a credit card provides maximum protection and can be worth a lot.

 

[buckeyefarmer]

That is great. It really shows why paying with a credit card provides maximum protection and can be worth a lot.

I got screwed once even paying with a credit card, I've forgotten the details, except that my CC company would not help me. I had disputed a charge for something that never got delivered. Why I tend to not use mastercard. Any I never intentionally use debit card for anything, although I have a couple times by mistake.

 

[jyoutz]

I got screwed once even paying with a credit card, I've forgotten the details, except that my CC company would not help me. I had disputed a charge for something that never got delivered. Why I tend to not use mastercard. Any I never intentionally use debit card for anything, although I have a couple times by mistake.

I have even had my bank refund money for a dispute using my debit card.