[TR] An expensive lesson

[Don Hiscock]

John, that kinda hurts -- I believe it completely, but it still hurts to
hear how close we came to having the best quality from the OEM suppliers
survive.  Some of us may be reminded of the quote "we have met the enemy
and he is us" from the comic strip Pogo by Walt Kelly more than 45 years
ago...
[image: Inline image 1]

On Sat, Nov 7, 2015 at 9:38 AM, John Macartney <john.macartney at ukpips.org.uk
> wrote:

> From the mid 80's to the early 90's, I was running a parts resourcing
> company for a major UK engineering group. Our principal interest was an all
> makes parts programme for Japanese cars in the middle and far east markets
> -
> but we also had many approaches from various US based parts companies
> (chains and independents) needing stuff for British cars. Simply, there was
> nothing we could not supply and we had plenty of O.E.'s (e.g. Lucas, SU,
> Dunlop, Sankey, Laycock, Borg & Beck, Lockheed, Triplex) willing to
> participate. We knew the pricing from these firms was keen and they were
> always happy to quote for parts that had basically reached end of life in
> terms of vehicle manufacturer need so were effectively on longer term run
> out. That said, the firms themselves were happy to keep on making the stuff
> for as long as the demand was reasonably constant. We did plenty of
> peripheral business with LBC parts in Europe, Australia, New Zealand, South
> Africa, a worthwhile amount in Canada - but very little in the US
>
> The problem was that over that period - and both prior to and later on, the
> US$ was weak against Sterling and those seeking to buy from us steadfastly
> refused to accept that if they wanted a quality OE part from a recognised
> brand, they'd got to pay for it. All our US customers continually
> complained
> the end user selling price was the only thing that mattered and why
> wouldn't
> we take that on board? I lost count of the number of times I was given US$
> selling prices that were way below our own cost prices (our selling price
> less 5%) in sterling and our suppliers weren't interested. It might have
> helped if the US order volumes reflected those in our other LBC markets -
> but most did not.
>
> In the end, we pulled out of the whole market because neither we nor our
> manufacturing suppliers were willing to trade at a loss. That was all a
> long
> time ago but the moral still applies that "if you want Rolls Royce or even
> dependable quality, you won't get it for loose change or peanuts."  And
> also
> if you buy in one strong currency and sell in another strong currency
> you've
> *got* to hedge your bets on exchange rate movements.
>
> Perhaps this is why so many now find themselves buying parts made in Taiwan
> from monkey metal because only those parts fit US$ pricing criteria?
>
> Jonmac
>
>
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