The local paper recently included us in a story about the steel tariffs and how they are effecting us. There was a shortage a few months back which was scary to say the least. Normally most of the steel products we need can be delivered next day. The lead time changed to a couple months for some items. We began to get calls from random people looking to buy steel from us as they couldn’t get it locally. Many of the steel suppliers ran low and began rationing it to their best customers making it impossible for smaller companies to source it. Some of the calls we got were from contractors and they said they would go out of business soon if they couldn’t get the steel they needed. Since April, we’ve heard of several (7 or 8) companies that went out of business because they couldn’t afford to pass the price increase to their customers. One of our local steel suppliers had to let go of all their drivers except one, and he is not keeping busy.
What does this all mean? Well it’s hard to say in the long run, especially since this trade war changes from day to day. But from October of last year to last week, the price of steel has gone up 30% for us. Last month we had to raise prices for steel top tables to compensate. Most likely later this month we’ll be doing an across the board price increase of 5% to 10%. Steel is the main material in our product, and with a huge increase in our cost, it has to be passed along to the client which is unfortunate. We aren’t making anymore money with the increase. It seems to be a lose / lose for now with manufacturers and end users. With our primary segment being the luxury market, it won’t affect us as harshly as others in my opinion. Also since we make a unique product, there isn’t as much competition.
Specialty steel like the 2″ nut and rod (see below) have spiked in price drastically. The nuts have gone up 248% and the rod 550% over the last few years. Every 2-3 weeks the steel mills are closing their books, re-evaluating the price, then opening them back up with a price increase. Spikes in price will lower demand. Lower demand will ultimately eliminate jobs. Harley and Telsa expects their pricing to go up $2000 to $20,000. When people can’t afford them anymore, they won’t buy. That can make imports more attractive price-wise. But if these imports are tariffed, then we can’t afford those either.
THE WILDWOOD TOP
We’ve had numerous requests for live edge tops recently, so many that we created a new live edge we call the Wildwood. We can make these in any size using oak, walnut and mahogany making it ideal for a desk or table. We’ve worked with live edge tops before and they have some inherent problems. For one they are hard to find in the correct size, they tend to warp, crack & split, and they are expensive. The Wildwood top eliminates all of these problems creating a top that is stable, sound, durable, repeatable, and less expensive.
Despite the uncertainty in our country and the world, we are keeping very busy with work! Our lead time is still at it’s all time highest of 14-16 weeks despite having more employees than ever. We are still looking for motivated competent fabricators, wood workers, a production manager and a finisher. So if you know anybody that you would recommend, have them send us a resume > [email protected].
We’ve been on a roll making new designs. Our R&D department is also creating context renders. I recently learned that term. If you don’t know, it’s a CAD drawing of a product in a computer rendered background. Here’s an example of our VI Beam in a context render: