Info

Sales $5,028,067 Costs:

Materials 1,860,385

Labor 905,052

Variable overhead 1,106,175

G&A 553,087

Contribution to profit 603,368 Exhibit!: Peerless Financial Data. 1983

order backlogs to 20 weeks. However, the owners were nearing retirement and didn't want to invest in new machinery, much less add capacity for the growing order backlog which had been building for years.

By 1974 the situation had reached the crisis point. The OPEC oil embargo provided the last straw, creating havoc in the saw blade market as in many other markets at the time as firms rushed to stockpile scare resources and critical materials, creating artificial shortages for everyone. At that point Ted Montague had appeared and, with the help of external funding, bought the firm from the original owners. Ted's previous business experience was in food processing and he had some concern about taking charge of a metal products company. But Ted found the 40 employees, 13 in the offices and 27 (divided among two shifts) on the shop floor, to be very helpful, particularly since they now had an owner who was interested in building the business back up.

Peerless survived the embargo, and the 1974 recession as well, so that by early 1976 Ted felt comfortable with his knowledge of the business. At that point he had a feel for what he believed were the more serious problems of the business and hired both a manufacturing manager and a manufacturing engineer. Con Wittkopp, to help him solve the problems.

The most shopworn machines at Peerless were the over 30-year-old grinding machines and vertical milling machines. Committed to staying in business, Ted arranged for capital financing to design and build a new facility and replace some of the aging equip-

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