'Talk about a hot mess': Fabrication shop accountant reveals a car manufacturer's money-grubbing scheme after they gripe about a $250 price difference on an invoice, halting production until they pay up

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    Cheezburger Image 10547688192
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    You need the parts but don't want to pay. Right S In the 70's (yes I am old) I worked for a small fabrication shop. I filled several roles. One was billing and one was accounts receivables. We
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    had a machine shop as well. One of our clients was a rather large maker of a specialty truck product. They would order certain parts from us to use on the trucks. This required the machine shop to make
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    the dies and then we would make the parts. They would constantly make changes. Our contract said they would pay for any increase in cost. Now the change orders might add 2 to 5 cents per part. They
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    would say alright and we would produce the new part. We would send the invoice for the new part. which would get rejected because the contract said the part was 35 cents each, not 38 cents each. I
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    would have to explain that they had changed the order so they had to pay the new price. They would refuse and would only pay the original price. Finally I stopped the plant from making the parts that
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    they were not paying the proper price for. They used a JIT (just in time) inventory system so they had no backstock in inventory when we stopped shipping. They called in a panic. Where were the parts. We
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    told they refused to pay so we refused to ship. We went back and forth for a few days, then we had a check and all change orders were approved. The week they were down cost them several hundreds
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    of thousands of dollars. The total of the difference between the original price and the new price on the parts was around $250 total. After the contracts were up, they found another machine shop. And they wanted the tools and dies we
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    made. Cost them a pretty penny for those and they balked, so we would not ship them out. More downtime. You would think they would learn but they started doing the other shop the same.
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    Blue Veritas731. Apparently, they weren't quite the 800 pound gorilla they thought they were.
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    davidkali. Junior execs only work 6 months at a time, save hundreds of thousands of dollars during their tenure, and move onto a new company with that on their resume, before the millions of dollars of losses long term. Short term profit vs long term profit. Only one earns you bonuses.
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    Liveitup199 One place I worked made engine parts for Ford. If you failed to deliver the parts on time and shut the plant down because of lack of parts. The company got fined $1 million a day.
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    FawnAndFeral ⚫ Lmao, just classic corporate penny-pinching gone wrong. They thought they were being clever, saving a few cents here and there, but they ended up biting themselves in the ass big
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    time. Just goes to show, ya gotta pay your dues, man. Short term savings ain't worth causing a friction with partners. Feel bad for the other shop now lol. Talk about a hot mess.
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    2lovesFL ⚫ FWIW, I watched a company get a contract for a very large corp, and that customer became more than half of their volume and profit, over a few years.
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    then the corp started to squeeze the mfg co, on price. Because that 1 customer had become so important, they had to meet their demands, next year same pressure to cut price, until they finally balked, and lost the contract, and had to downsize, and find new customers.
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    THat corp was known to do this over and over to smaller suppliers, becoming a majority of the suppliers volume, then squeezing them on price until it was no longer profitable.

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