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July 2008
To our valued dealers,
As communicated previously, our cost for raw material has risen sharply since the fourth quarter of 2007. Most notably steel products have increased as much as 80%. Additionally we have seen significant escalation in the cost of wood, packaging materials, paint and energy costs.
To help offset these increases we instituted a steel surcharge pricing program. Our objective is to recover the additional costs, provide you our dealers advance notice, and have a tool that can adjust as the market dictates. The initial surcharge of $.06 per pound started with deliveries on March 17. We adjusted to $.11 for deliveries April 14 and set the surcharge at $.20 for deliveries beginning June 1.
Today we are announcing the steel surcharge will adjust to $.28/lb for deliveries July 1, 2008 or later.
Effective today sales, customer service, and engineering departments will use the new surcharge for quotes based on July or later delivery. Quotes will be honored for 15 days to order and good for 45 days from date of quote to shipping.
Lean manufacturing programs instituted at both our California and Kentucky facilities enable the manufacture to order of standard materials in as little as one to two weeks. Many items are carried in stock for immediate delivery. We are prepared to accept orders for June shipping at the $.20 surcharge.
Thank you for your understanding. We continue to believe that the situation is temporary and look forward to republishing a new list price without surcharges when steel costs find stability.
Sincerely,
Jim Mierke
Vice President of Sales
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