A few days after Corrigan's visit, both Eisenbach and Henk came in to see Thorborg. Eisenbach came because he felt that since tests had indicated that the plastic ring had at least four times the wearing properties of the steel ring, it would completely destroy demand for the steel ring. He understood, however, that the price of the competitive ring was high, and he felt that the decision to sell the plastic ring only in markets where it was sold by competitors was a good one. He observed, “In this way we will probably be able to continue supplying the steel ring until stocks, at least of processed parts, are used up.”
Henk still strongly opposed sales of any steel rings once the plastic ones became available. If steel rings were sold in some areas, he argued, while plastic rings were being sold elsewhere, customers who purchased steel rings would eventually find out. This would harm the sale of Precision Worldwide machines-the selling price of which was many times that of the rings. He produced figures to show that if the selling price of both rings remained at $1,350.00 per hundred, the additional profit from the plastic rings (manufactured at a cost of $279.65 per hundred versus the $1,107.90 per hundred for steel rings) would more than recover the value of the steel inventory, and do so within less than a year at present volume levels. Thorborg refused to change the decision of the previous meeting but agreed to have another discussion within a week.
A few days after Corrigan's visit, both Eisenbach and Henk came in to see Thorborg. Eisenbach came because he felt that since tests had indicated that the plastic ring had at least four times the wearing properties of the steel ring, it would completely destroy demand for the steel ring. He understood, however, that the price of the competitive ring was high, and he felt that the decision to sell the plastic ring only in markets where it was sold by competitors was a good one. He observed, “In this way we will probably be able to continue supplying the steel ring until stocks, at least of processed parts, are used up.” Henk still strongly opposed sales of any steel rings once the plastic ones became available. If steel rings were sold in some areas, he argued, while plastic rings were being sold elsewhere, customers who purchased steel rings would eventually find out. This would harm the sale of Precision Worldwide machines-the selling price of which was many times that of the rings. He produced figures to show that if the selling price of both rings remained at $1,350.00 per hundred, the additional profit from the plastic rings (manufactured at a cost of $279.65 per hundred versus the $1,107.90 per hundred for steel rings) would more than recover the value of the steel inventory, and do so within less than a year at present volume levels. Thorborg refused to change the decision of the previous meeting but agreed to have another discussion within a week.
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