Chapter 747 - 349: Premium

Scranton, Cole Specialty Steel Pipe Manufacturing.

David Cole sat in his somewhat dated office, leisurely sipping a cup of coffee as he watched the bustling production lines in the factory through the glass window.

He had been running this factory for twenty years.

For a very long time, he’d had to grovel just to get by.

His main clients were the energy giants drilling for natural gas in the Marcellus Shale Area.

The purchasing managers for those giants were incredibly arrogant. Banking on the sheer volume of their orders, they squeezed his prices down to nothing.

David could only struggle to survive on meager profit margins, constantly on guard against them using "supply chain optimization" as an excuse to shift orders to cheaper overseas contractors.

He had grown used to forcing smiles and chasing late payments.

He had assumed this would continue until his factory went bankrupt, or he got out of the business altogether.

The turning point came two years ago.

Back then, the Industrial Revival Alliance had just been established in Pittsburgh.

Because David was on friendly terms with the Mayor of Scranton, Joe Byers, and perhaps because his factory still had a solid technical foundation, he received an invitation.

The Industrial Revival Alliance invited him to join its supply chain network.

But the invitation came with conditions.

Joining the Alliance meant submitting to its oversight and accepting centralized production coordination from its headquarters.

It reminded David of that red country, the one whose society was driven by planned directives.

He hadn’t studied history and knew nothing about macroeconomics. Terms that seemed to violate free-market principles made him extremely nervous.

But looking at his half-empty order book and the desperate hope for overtime in his workers’ eyes, he signed the papers anyway.

The risk of a potential restriction wasn’t in the same league as the risk of turning down ready-made orders.

As it turned out, his gamble paid off.

For the past two years, he had faced almost no restrictions, and the factory had been running at full capacity.

It even made him start thinking about expanding his production lines.

However, a long period without restrictions didn’t mean there would never be any.

Just a few days ago, he received an urgent directive from the Alliance headquarters.

Raise the price of all steel pipes exported to natural gas drillers across the board, and delay deliveries under the pretext of insufficient production capacity.

At first, David was startled.

He worried this move would infuriate the energy giants, causing him to lose clients or even face a lawsuit.

But when he spoke privately with his peers and discovered that everyone in Western Pennsylvania, from the machine shops in Erie to the cement plants in Johnston, had received the same directive, he suddenly understood something.

’This is a coordinated hunt.’

Before, he was a small fish facing a behemoth alone; now, he was a member of the wolfpack.

The tables had turned.

Things were different now.

SLAM!

The office door was thrown open.

John, a senior purchasing manager for EQT Group’s Pennsylvania division, stormed in.

His face was contorted with rage, and he was waving a fax in his hand.

"David! What the hell are you playing at?"

John slammed the document onto the desk in front of David, his voice so loud it nearly drowned out the roar of the factory machinery.

"Those high-pressure seamless steel pipes for the Delaware River liquefied natural gas export pipeline—why are they marked for delayed delivery? And what’s the deal with this new price quote?"

John jabbed a finger at the numbers on the page, his hand trembling.

"A thirty percent price hike? Are you insane? We have an annual framework agreement!"

David set down his coffee cup, not even bothering to stand.

He leaned back in his chair and looked at the purchasing manager who had once made him so anxious, feeling an unprecedented sense of calm wash over him.

He even felt an impulse to laugh.

"John, have a seat," David said, gesturing to the chair opposite him.

"I’m not sitting! I want an explanation, right now! If those pipes don’t arrive on-site on time, construction on the entire export terminal will grind to a halt! We’re talking millions of US Dollars in losses per day!" John roared.

David picked up the price quote in a slow, deliberate manner.

"John, I’m very sorry." The apology on David’s face was so fake he didn’t even believe it himself. "As you know, the whole state of Pennsylvania is in the middle of a massive infrastructure boom."

David stood up, walked to the window, and pointed to the finished steel pipes in the yard, all of which bore labels that read: "Exclusively for the Pittsburgh Revival Alliance."

"Pittsburgh is expanding its Inland Port, Erie is building a new industrial park, and then there’s that much-talked-about nuclear power plant restart project."

"My factory is running around the clock. Our entire production capacity has been booked solid by the Revival Alliance."

David turned back to John and spread his hands.

"I really can’t squeeze your pipes in. My workers are already putting in so much overtime they’re about to drop dead."

"This is a breach of contract!" John seethed. "I can sue you!"

"You can sue. The legal department will handle it." David shrugged. "But lawsuits take time. Can you afford to wait? Can that hundred-billion-dollar overseas order of yours afford to wait?"

David walked back to his desk and picked up his cup again.

"If you’re really in a hurry for this shipment, it’s not like there are no options."

David’s tone became casual, as if he were discussing some trivial matter.

"Pay up."

"I’ll have to borrow production capacity from other factories at a premium, pay my workers triple for overtime, and I might even have to turn down some of the Alliance’s less critical internal orders. Someone has to cover those costs."