The Hollow Men - Episode 16
Rick and Drew learn of Fidelity Magellan, the tank business reaches a new level of craziness, Rick and Drew make a big deposit, and J.T. tells Rick and Drew of his and Sue's Gardendale plans.
Last week in Episode 15 Bud gets his nerve up and asks the important questions (and more importantly hears the answers he was hoping for), and Rick and Drew learn a few lessons about Uncle Bill and Drew's Dad during a Sunday afternoon at Golden Acres Country Club.
A plan for the future
At our monthly lunch with Uncle Bill we learned of the investment opportunity he had been keeping an eye on.
“Fidelity Magellan is a mutual fund, a way to diversify your investment easily by letting the fund manager decide what stocks and other investments to purchase. You take advantage of the leverage of a large amount of people, and as a result, a large amount of money being invested. Risk is lowered, because your money is diversified, spread across a large number of investments, practically down to the penny. It's been around for a long while, since the early 60's, but it has been closed to new investors since 1965. It is now open to new investors, and you two should be putting money into it. I opened an account in 1964, been putting money into it ever since and have been more than pleased with the results. My stake doubled in 1965 and again in 1969. A CD returning 11% can't beat that kind of return. A CD is nice and safe and you two been doing real good by them, but now it is time for you to diversify your money. Here's my suggestion, as CD's mature, take every other one and invest it in Fidelity Magellan. By doing this, over time you will have half your money in short term CD's, so you will have guaranteed returns that mature in a short time and the other half in a mutual fund where the chance for greater return is better and the liquidity is much better than CD's.”
“Before we take the plunge is there anything we can look at, to get a good feel about it?”
“Get a copy of Money, Fortune or some other business magazine. I think you will like what you read.”
He pulled a business card out of his jacket pocket.
“Here, this is a friend of mine and he handles investments at the American Bank of Commerce building downtown. He can tell you more, set up an account for you and get things going when you're ready.”
We took his card, finished lunch and went back to work.
That evening I drove out to Permian Mall and went to the Walden's bookstore. I went straight to the magazine and newspaper section and picked up copies of Forbes, Fortune, Money, Business Week and the Wall Street Journal. After dinner I went to my room and read. Everything I came across mentioning Fidelity Magellan and its manager Peter Lynch was positive. He took over management of the fund in 1977 and that year Fidelity Magellan had posted an annual return of over 14 %. In 1978 the fund had an annual return of over 31%, in 1979 over 50%, in 1980 nearly 70%. Things weren't going nearly as good since the fund was opened back up to the public, but nearly everyone expected great things from the fund and Lynch once he got over the influx of new money to the fund. Right now sounded like an excellent time to invest.
I brought the magazines and the Wall Street Journal to work the next day. Over lunch Rick and I talked about Fidelity Magellan. We both felt it was a good idea.
We were gamblers. Hell, we made a big gamble with VP Tanks. Sure, we thought it through, we thought it over nose to tail, but in the end, we placed our bets and decided to see where things took us. It's about making a decision, believing in it, then riding it out. It isn't blind faith, it is faith, with a wary eye. We made our decision. We called Thomas Norton, the investment manager that Uncle Bill knew and on Thursday morning we met with him. We read through the paper work, signed all we needed to do and each set up a personal account. Thomas was a little surprised at how fast we wanted to move. He suggested we get the account set up then think about what we wanted to do. We told him no, that we planned to invest in Fidelity Magellan and that if he wasn't willing to do that we would find someone who would. He decided he wanted our business. We funded our account with $5000 each and watched as the order was submitted. We walked out as investors in Fidelity Magellan.
Nothing but pure insanity
The mail on the second Monday of July 1981 included a fat 12” by 9” envelope from New Mexico Chemicals in Hobbs, New Mexico. I opened the envelope and found inside a letter and a large E size drawing. The letter requested that we bid on 10 hopper tanks, referencing the drawing and asked if we could respond by the close of business Friday, July 24 via phone or U.S. Mail. I unfolded the drawing and groaned.
“What's up?”
“This is one screwed up, specialized tank. It will be a pain to quote and build. I'm tempted to just throw it in the trash, after all we've got more than six months buffer right now and that's just with standard storage tanks.”
The tank in question was six feet in diameter with a four foot long shell or body. On top was a standard flanged and dished head, with a 20” raised face slip on flange as a manhole, a 4” input flange and a 2” vent coupling. On the body was an 8” washout flange. Halfway down the body on the inside was a mesh iron platform, sitting on top of rolled angle iron welded to the inside of the tank body. This is where it got strange. Connected to the shell or body was a cone, six feet in diameter where it connected to the shell, and going down to 10” diameter on the other end. The cone was three feet high. Attached to the bottom of the cone was an 8” length of 10” pipe with a 10” raised face slip on flange. There were also two 2” drain couplings on the cone. The entire tank from cone to head was a little over eight feet in length. The last piece of strangeness was that it really wasn't a tank, it was a vessel, to be designed for 150 pounds internal pressure according to ASME Section VII and IX standards.
On one hand, getting this built would be a challenge and kind of interesting, on the other hand it was sure easy selling standard storage tanks. I was intrigued by the chance, it would be an interesting tank to draw, to figure out how the pieces would go together and how to provide to SouthWestern Tank the information they would need to bid on it. I could make a guess at the cost, but that is all it would be a guess. I would have to hand this over to Ned to price, and that was probably more trouble than it was worth. Selling tanks was easy, we just took SouthWestern's latest price sheet, marked up their price from 20 to 30% depending on who the end customer was, figured out the rest of the setup costs and put our markup on it and we were done. This one would take more effort and I just wasn't sure it was worth it. I put the letter and the drawing aside and spent the rest of the day on our bread and butter, tanks.
At 6:00, Mary Ann left for the day and Rick and I sat back with a couple of beers to talk about things.
“What was up with that package from New Mexico?”
“A strange, a real strange tank. Not the usual thing by any way you look at it. If we take it one, we need to make sure we make good money off it, to make it worth awhile. I'll have to make a brand new construction drawing, SouthWestern will have to bid it based off my drawing. There's just a lot more work in it than what we've become used to.”
“Yeah, doesn't sound like anything we really want to do.”
“Yeah.”
Rick nodded his head, took a sip from his beer and then said “You're going to draw it up anyway, aren't you?”
“Yeah. I want to see how the pieces will fit together.”
“Well, hell, if you're going to do that you might as well have SouthWestern bid on it. No need to waste your time drawing it.”
“Yeah, I guess so.”
“When are you going to draw it up?”
“Tonight. Figure I'll stay around for a little bit, do it after hours so it doesn't interfere with our day to day business.”
“Fine, I'll leave you to it. See you in the morning?”
“Of course, I shouldn't be here too long. I ought to get the drawing done in a couple of hours.”
All in all, it took about two and a half hours. I spent the first half hour figuring out how to lay the elevation and horizontal views of the tank out and what kind of construction blow-ups I would need. Then I had to run the calculations to figure out how thick the shell would be. Figuring out the cone was the hard part, I had never done that before. Once I had the calculations done, I started drawing. About 8:30 I finished the drawing, ran two prints of it and folded the prints up. Before I locked up for the night I left a note for Rick on his desk telling him that I was going to drop off the drawings at SouthWestern first thing in the morning and would be at our office by 8:00. I then turned off the lights, locked the doors and took the prints home with me.
The next morning I drove to SouthWestern Tank. I saw Bucky first since his desk was right by the front door. Jim was already out in the shop. Carey was in Ned's office talking to Ned.
“Well, look who the God damn cat drug in.”
“Hey, Carey, how are you doing?”
“Damn good, God damn good as always. How are you, Drew? You got any business for us on this God damn fine day?”
“Maybe, maybe I have something for Ned.” I handed Ned the two drawings. “Can I get a quote on ten of these things? Make sure you make a nice profit on them because I'm not all that sure I'm interested in having them built.”
Ned unfolded the prints, looked them over for a minute before he spoke.
“What the fuck? These are just strange, damn strange.”
“I know, I know. And they're vessels, not tanks, so that's why I need you to look them over, Ned. If you don't want to bid on them, just let me know. I don't mind telling the guy we don't fool around with this kind of shit.”
“Hmm, they are strange, but they are sort of interesting. When do you need a price?
“By Tuesday of next week. The guy says he wants a price by a week from Friday. I still need to work out the coating, trucking and setup cost, but I can do that while you're working up what it will cost to make them.”
“Okay, anything else?”
“No, that's it for now. I think Rick will be coming over later this week to place a large tank order. How's the work buffer looking this month?”
“190 days for tanks, 120 days for vessels.”
“Okay, I'll keep that in mind when I talk to the guy that wants the damn things. The day he places the order, as long as he does it this month, he should be able to get them to his plant in New Mexico in 150 days, allowing us some time for finish and set-up.”
“Sounds good, I should have you a price by the end of the week.”
Ned was true to his word. Thursday afternoon he called me.
“Drew, we can build ten of these things for $3700 a piece.”
“Good enough profit for you at that price?”
“Yeah, we should make a little more than our standard 15%, but that's to be expected, that cone is going to be an interesting piece of work.”
“You're right about that. If we actually do bid this one and get the work, I want to be there when you roll the cones. I've never seen that.”
“Neither have I.”
We both laughed at that.
$3700 a piece for SouthWestern to build them. I had estimated the coating to be another $1500 per vessel, trucking would run about $5000 for all ten vessels and setup would run about $1000 for all ten vessels. Add it all up and our cost would be around $5800 a vessel. Adding 20% to that, a reasonable profit, would be $1180 markup for us, for a total selling price of $6960 per vessel. I wrote it all down, prepared our offer letter and thought about the whole thing for awhile. A part of me didn't want the work, it just seemed like a pain in the ass and on that Thursday, that part of me won out.
I didn't think about those strange coned things again until Tuesday when Mary Ann answered the phone. She talked to the person on the other end of the line for a moment, then put her hand over the mouthpiece.
“Drew, New Mexico Chemicals out of Hobbs is on the line, the guy is saying he sent you some drawings.”
I almost waved her off, but didn't. I took the call. Peter Tilden was on the phone, he had sent us the drawings and wanted to know if we were planning to respond.
“Well, sir, we're real busy these days and I'm not sure if we could do you justice. We've got a lot of work in our backlog and it might take us awhile to get these tanks built.”
Peter was determined and a good salesman. By the time I hung up the phone I had agreed to work him up a price and call him back on Thursday. To be safe I ran a credit check on New Mexico Chemicals. They paid their bills. I checked with a couple of tank companies in New Mexico and they both said that New Mexico Chemicals was a great company to do business with and that Peter Tilden was an honest businessman. Damn, I was sort of looking for an excuse to not go any further with this deal and so far hadn't been able to find one.
I waited nearly all day before I called on Thursday. At 5:30 pm I finally called New Mexico Chemicals. As I was dialing the phone I decided I really didn't want the work and I hate making long distance calls so I upped the per vessel price from $6960 to $7500. I asked for Peter Tilden and was placed on hold. I didn't like the on hold music and really didn't want the business so I bumped the price again, this time to $8500. Peter got on the line and I didn't like the sound of his voice, so when he asked for the price, I bumped it up again.
“Well, Peter, we can make you those vessels for $12,500 a piece. You said you were interested in ten of them right?”
He was quiet for a moment then said “$12,500 each? Hmm, I'll take 25 of them.”
I was stunned.
“Uh, you want 25 of them?”
“Yeah, when can I get them?”
I hadn't expected this at all and had to think quick on my feet. I knew 25 at once would be too big of a job for SouthWestern Tank, I had to spread the delivery out.
“You can get the first five in 180 days, then you will get five a month for the next four months after that.”
“Damn, that the best you can do?”
“Yeah, that's the best I can do. I told you earlier this week we're busy.”
“Okay, then that will have to do. Let me give you a verbal purchase order over the phone. You send me a formal offer letter, explaining the details and I'll get the paper purchase order to you in the mail within 24 hours of me receiving the offer letter.”
I was scrambling for time to think. Okay, he wanted 25 tanks at a cost to us of $5800 each, that came to $145,000 cash, cash we had to cover until the checks started coming in from New Mexico Chemicals.
“Peter, this is a big deal for us. We normally cover the construction costs ourselves until we get the first money from you. But here's the problem, we have to buy a lot of material for an order of 25 vessels and we just don't keep that much cash around.”
“I can't pay you for all of the tanks up front. How about once you get the paper PO you send me an invoice for, I don't know, let's say 40% of the entire order. That would be...”
I could hear Peter punching in numbers on a calculator in the background.
“Okay, a total order of $312,500. Damn, that's a lot of money.” Peter chuckled to himself. “40% of that would be... $125,000. You send me an invoice for $125,000 as soon as you get the paper PO and we'll get it paid. You're net 30 right?”
“Right, net 30. Hey, I've got an idea, can you give me the PO number on the phone? Then I could create the invoice today and send it out tomorrow. Just to get things rolling, what do you think?”
“Yeah, I can do that. I'll go grab a PO, give me a minute.” He was back quicker than that. “PO number 198-2778.”
“198-2778. Got it. I'll send an invoice out today. That'll be net 30 from tomorrow the 24th, so we can expect a check for $125,000 to be in the mail to us by no later than August 24th, correct?”
“Correct.”
We talked for a few minutes longer. After I hung up the phone, I leaned back in my chair. I had just closed a deal for $312,500, from a new customer, from which we would make over $167,000 profit. That was the biggest single deal in the history of VP Tanks. Damn, that was insane.
Rick had been meeting with contractors for most of the afternoon and walked in the office a few minutes later. He must have sensed something was going on, probably by the look of blank exhaustion and surprise on my face. He waited until Mary Ann had left for the day before he asked any questions.
“Drew, what's going on? I can tell something is going on.”
“I talked to that guy in New Mexico.”
“Guess we didn't get the deal? The look on your face is hard to read, but my best guess is that we didn't get the job.”
“We got the job.”
“Oh. Well, then what's the... Oh, shit, you underbid him, didn't you? Is that it, you fucked up the bid? Oh, shit! That's why we're supposed to verify each other's bids, so we don't make that kind of mistake. God damn, what are we going do now?”
“I didn't underbid, not by a long shot. We could make a nice profit selling those tanks for $6900 each. I didn't sell them for $6900.” I told Rick I didn't like making long distance calls, that I didn't like the on-hold music and that I particularly didn't like the sound of Peter Tilden's voice that afternoon.
“I told him the tanks would cost $12,500 a piece. Hell, I figured that he would back off that price. He didn't.”
“God damn, you sold ten tanks for $12,500 each? Shit, that's fucking fantastic!”
I shook my head. “No, I didn't sell him ten tanks. Once he heard the price he wanted 25 tanks. Rick, he bought 25 tanks, 25 God damn tanks. Rick, I just closed a deal for $312,500.”
This time Rick had the blank look on his face. He stared at me and mouthed “$312, 500?” I nodded my head yes. He mouthed it again. I nodded yes again. Then the logical part of him kicked in.
“Oh, God, what kind of delivery did you promise him? You didn't promise them all at once did you?”
“Nope, he gets the first five in 180 days after we get a formal PO. Then he gets five a month from that point on. Oh yeah, because of the cash outlay, he offered to cut a check for 40% of the total, $125,000. He gave me a PO number over the phone. I'm going to send the invoice tomorrow which means he will cut a check for $125,000 to us by August 24th. We don't have to put any cash out on this one.”
It was Rick's turn to have a look of blank surprise on his face. “Whew, that's good. Damn, a $312,500 deal, and the customer is going to cover our costs up front? That's fucking insane.”
“Yeah, it's fucking insane. About all we have to do is deliver on it. I can't wait until I tell Ned that we got the job. Shit, he sold the tanks to us for $3700 a piece.”
We drank a few beers that night just trying to get our minds around the situation. It was official, the world had gone crazy. It might have already been crazy, but this was the day we officially realized we would have to find some way to cope with the insanity. So far, the coping looked to be mighty profitable.
The rest of 1981 went well. By September we had enough business going to start juggling a third assembly line. The only thing that was a little bothersome was the $1.00 a barrel drop in the price of oil in the last quarter of 1981 and the $1.15 a barrel drop in January 1982. The rig count continued to climb, save for a slight drop in January. The work buffer stayed steady at 190 days, with a drop in January 1982 of 10 days. In fact, all three measures took a dip in January 1982, my intuition was aroused and I decided to keep a close and objective eye on things the next several months.
There was a problem, it was a challenge to think objectively or negatively. We were still closing deals every month and our overall revenue numbers continued to increase month by month, even taking into account the large burp we saw in July 1981 when we got the New Mexico Chemicals deal.
Peter Tilden was true to his word. I sent out the formal proposal with an invoice for $125,000 via Friday's mail. Wednesday of the next week he called to tell me the proposal and invoice had arrived. The next morning he sent out the official PO via U.S. Mail and by Tuesday of the next week the PO had arrived at our office. The 180 day countdown to delivering the first five tanks began on August 4th. That meant the first five tanks would need to be delivered by the first week of February 1982. If all went to schedule the last five tanks would be delivered and set up the first week of June 1982.
Peter called again on August 19th to tell me that the check for $125,000 was in the mail. The check arrived Monday. I called my Uncle Bill's secretary just to make sure he was in the office then Rick and I both drove down to NBO to deposit it. We stood quietly in line with the check and the deposit slip. When it was our turn we walked over to the teller. It was Courtney Barnes, she was a year younger than us, had graduated from Permian in 1977 and was working full time at the bank while going to night classes at Odessa College. She was also rather cute.
“Hey boys, how are you today? How's the tank business? What can I do for you?”
“We just have a small deposit.” As Rick spoke he handed her the deposit slip and the check.
She looked everything over, then stared, first at the deposit slip, then the check and finally us.
“Uh... I've never... well, I mean...”
“Just call my Uncle Bill over, he probably needs to see this.”
She nodded her head yes, picked up the phone and punched in Uncle Bill's extension. She said a few quiet words. I turned around and saw that Uncle Bill's secretary was on the phone. I waved at her. She smiled, waved back, hung up the phone and walked into Uncle Bill's office. A minute later Uncle Bill walked out, looked our way, saw us and walked towards us.
“Drew, Rick, what's going on?”
“Unc, we just have a small deposit to make but I think Courtney wants your okay before she goes any further.”
Courtney nodded yes.
Uncle Bill, looking a little exasperated, took the deposit slip and check from Courtney and looked them both over. His eyes widened but he kept his cool.
“Hmm, nothing seems irregular here, Courtney. Go ahead and make the deposit.” He handed the deposit slip and check to Courtney. Turning to us he said “Boys, there will be a hold on this deposit until we verify the New Mexico Chemicals account has the full amount for us. It will probably take a few days, maybe a business week before the money is in your account.”
Courtney processed the deposit and gave the receipt to Rick.
“Thank you Courtney, it is always a pleasure to see your smiling face.”
She blushed a little, but I'm not sure if it was due to Rick's words or just the whole situation.
“Boys, come on back to my office. I'm sure there's something you want to tell me.”
Back in Uncle Bill's office I told him the whole story of New Mexico Chemicals.
“Whew, that is a deal. And you don't have to deliver the first tank for another four to five months?”
“Yep, four to five months. That check covered almost the entire estimated cost. Once we start delivering, every check we get from them will be pure profit.”
Uncle Bill was right, the following Monday we saw a cleared deposit of $125,000 in our business account. VP Tanks had been doing well, quite well, better than either one of us had anticipated, but we never expected something like this. We generally kept one to two months working capital in our business checking account, enough to cover our fixed expenses (rent on our shop/office, Mary Ann's pay, other office expenses, including keeping the refrigerator well stocked with beer) and our operating expenses (to pay for manufacturing, painting, coating, scaffolding, trucking, and final setup of tanks at the customer location). We also kept another $50,000 making a little interest in a money market account, but the rest we were moving in to our own personal accounts. We decided to, for now, to move $100,000 over to the money market account and leave $25,000 in our operating account. Once the work for New Mexico Chemicals started up we wanted easy and fast access to the original $125,000 so all future payments could be treated as profit to us.
Once the $125,000 check had cleared I called Ned at SouthWestern Tanks and told him that I was ordering 25 of the vessels for $3700 each. I heard a loud whistle on the other end of the line.
“Twenty-five of them? Damn, that's a big order. That's...” I could hear Ned punching the calculator over the phone. “Thats $92,500. Damn, Drew, that's a lot. We can't deliver all of that in four months, that would take over the entire vessel bay, hell that would take over the entire shop, including both tank bays.”
“Don't worry, you don't have to. All I need is five of them in 120 to 150 days, then five a month for the next four months after the first delivery. How does that sound?”
“A lot better, I can live with that. Now, for such a big order...”
“I think I know where you are going. You would like a little money up front to buy materials, right?”
“Yep, you read my mind.”
“We can do that, we told the customer the same thing and he's willing to pay part of the money upfront to get the work going. How much do you need and when do you need it?”
Ned thought for a moment before he answered.
“Thirty thousand sixty days from now. That should give us plenty of time to order all of the material and have it in inventory when it comes time to start building these things.”
“You got it, let me look at the calendar... that looks I'll be bringing you a check for thirty thousand around October 23rd. I'll bring it to you a week earlier so you can get it deposited and have the money in the SouthWestern Tanks account by the end of October, just in time to buy some Halloween candy. How does that sound?”
Ned laughed before he spoke. “Excellent, God damn excellent.”
“All right, I'll write up a formal order today with all the details and get it out in tomorrow's mail.”
“Perfect, always like doing business with you boys.”
“Same here.”
We told all our contractors that we now had work lined up for them going well into the early summer of 1982.
Our biggest challenge was staying atop the wave and an awful lot of our time was spent in customer and contractor management. Not all of our contractors thought six months ahead so we met with them several times each and every month to make sure everyone was focused on the right things. Customers were a different matter, we now had a lot of customers but every customer thought they were our number one customer. We decided to split our customer list into three lists: paying customers, potential customers (those who had either requested a bid or ones we had submitted a bid to) and prospects. Then we divided each list in half roughly alphabetically. I got the first half, Rick got the second half and we made sure we touched base with every paying customer and potential customer at least once a month. We didn't pay attention to the prospects, we were too busy to do so right now.
The morning of October 23rd I wrote a check for $30,000 payable to SouthWestern Tanks. At 8:30 Rick and I drove over to SouthWestern Tanks. We walked in, got the usual line from Bucky and Carey. We found Jim and Ned in Ned's office.
“Morning, boys, I hope you have a nice check for me?”
“Yes, Ned, we do.” I handed Ned the check. He held it up to the fluorescent light and said to Jim.
“I don't know, Jim. Can we trust these boys?”
“Trust, then verify. As soon as that check clears we'll start buying the materials.”
“Sounds good to me. Do you have anything else for us this fine morning?”
“Yes, turns out we have. I need to place an additional ten 500 barrel tanks on order. These will be for Northern Natural Gas. I'll bring the nameplates for you once you start building them.”
“Rick, that's good news. We like building those tanks for Northern, nothing fancy, not like this bullshit, coned piece of ugliness that Drew came up with. You are our favorite VP Tanks rep.”
“Jim, really appreciate the loyalty. If it wasn't for me working here in the first place nothing about this beautiful relationship would exist.”
“Drew, if it wasn't for the patience and mentoring by Ned and me, you wouldn't have lasted long enough here to amount to anything.”
“I think he has you there, Drew. What say we leave them to do their fine work?”
I nodded yes to Rick. As we walked out the door I turned back and told Ned “When you get ready to start rolling the cones, let me know. I want to come out and watch that.”
“Shall do.”
Ned called us late the next week to tell us the check had cleared and he was putting together the orders for the material.
Halloween passed and November came in. About the middle of the month we were wrapping up the day when J.T. walked into our office. He had been working at Shell Oil in Midland since he graduated from Texas Tech in 1980.
“Evening, boys. I was hoping I would catch you before you left for the day.”
“Damn, you sure look nice in your suit and tie. Why, wish we had known you were coming by, we would have cleaned up the place a bit. Best we can do is offer you a clean place to sit and a beer.”
Rick got off his chair, grabbed a dishrag from the kitchen sink and quickly dusted his chair off. While he was doing that I drank the last of my beer, got up and grabbed three more beers out of the refrigerator, handing one to J.T., one to Rick and keeping the other for myself.
J.T. nodded thanks, opened his beer, sat down and took a long drink.
“Ah, man, that does taste good. I usually don't have anything to drink until Friday after I get home from work.”
“Don't tell Sue, she still gives us a hard time about how we nearly ruined her reputation when Elizabeth and Bud left for Texas Tech last year.”
“How are they?”
“Doing good. Elizabeth is as smart as ever and is burning right along in English. Bud is doing better than I ever thought he would. He's sneaky smart. At the pace they're going they should graduate right on schedule.”
“Good, that's good.”
“So, what are you doing here, hanging out with oil field trash like Rick and me?”
J.T. smiled at that. “You're no more oil field trash than me. I just have nicer clothes.”
He took another long drink and then spoke.
“Just wanted you two to know that Sue and I are buying a house in Gardendale. It's a nice house, three bedrooms, 1 ½ baths, about 1800 square feet. It's sitting on three acres, but there's empty land on all sides that add up to ten acres. I'm hoping that over the next few years we'll buy that too.”
Gardendale is a small community north and east of Odessa but still within Ector County. People who move there usually buy a few acres to keep plenty of room between them and their neighbors. I never spent much time there but some of the parents of people I went to school with had moved out there or were planning to in order to get away from the big city of Odessa which was now getting close to 90,000 people.
“Damn, congratulations! When are you moving in?”
“More importantly, when's the open house? You can't call it home until your closest oil field trash friends have a chance to trash the place up.”
“We hope to get all the paperwork done the first of December. Sue's plan is to have a combination open house and New Year's Eve party. I wanted to let you know because she would be pissed, at you, at me, if you don't come.”
“Hmm, Gardendale. That could be a long dangerous drive after too many beers on a night we generally avoid, you know, all those damn amateurs driving on the road.”
“She thought about that. You two are more than welcome to sober up before you leave.”
“What's she fixing for New Year's day lunch?”
“I told her you two would think of along those lines. Both our parents are coming over for New Year's lunch so I would really appreciate if you could manage to leave before 11:00 am. Sue will make you a nice breakfast, but we were planning to spend New Year's Day with our families.”
“I'm a little hurt J.T., I always thought of you as the too good brother I never had.”
Rick said “I always thought of him as the sober brother I never had, well, not until Robert came in from the wild a few years back.”
“Shit, I knew you would understand, can't say I've missed you two's sarcasm much.”
“Ah, J.T., you know we got to knock you down a little. Don't worry, we'll be long gone before any of our family shows up, but it will still be a damn good party. Who else do you plan to have over?”
“Don't know yet, but I figure most of us will be in town for the holidays. Drew, can you check with Jack and see if he can make it? I was also wondering when the next time Kate gets a leave.”
“Don't know, but I'll see what I can find out. Haven't talked to Jack in awhile, but I could drop by the Blessing's house and see what they know.”
The next week I dropped by the Blessing house. Mrs. Blessing was home. I asked about Jack, Kate and Janey. Jack had finished the management program at HEB and was working as an assistant manager at an HEB store in north Austin. Kate was now a procurement officer in the Army and was stationed in Killeen, Texas, in between Austin and Ft. Worth on I-35. Janey had graduated from the Texas A&M with a degree in agronomy of all things, and was working for a golf course design firm. Mrs. Blessing told me that both Jack and Kate were hoping to be in town during the holidays. I asked her to say hello to Mr. Blessing and walked home.
In December Ned called to say they were ready to start rolling the cones. I came over the next morning and watched the first cones get rolled. It took three tries to get the first one rolled right, but after that the team knew what to do and by lunchtime had it down. Ned said he planned to get all twenty-five cones rolled and welded, then they would roll and weld the cylinders. His plan was to get all of the parts built up and in inventory then build the first five vessels at once, like an assembly line. He didn't plan to start assembling the first vessels until the end of December, which meant I should have them for painting and coating in early January, right on schedule.
Author’s note
The story of the strange coned vessels and New Mexico Chemicals is a true story though the names have been changed to protect the innocent. I was working at Western Tank Company of Odessa in early 1980 when Don Williams, the CEO of Western Tank Company of Odessa, dropped by the shop office and handed me a large envelope from a New Mexico company. Inside the envelop was a request for bid for ten strange coned vessels.
I procrastinated. The tank and vessel business was good, there was no selling. All one had to do was decide who you wanted to do business with. I finally completed the bid and called New Mexico, but I didn’t like how the phone rang so I increased the price, I didn’t like the on hold music so I increased the price and I didn’t like the sound of the person’s voice so I increased the price again. What started as out as $3700 per vessel with a good 15-20% profit built in, turned out to be $9500 a vessel. The bid was accepted on the phone and a week later we had a physical Purchase Order. After a job was complete Don would come over to the shop office to review financials with the person who managed the job. The cost to deliver each vessel was $3100. I had sold each vessel for $9500, a profit of $6400 per vessel (a total of $64,000 for the ten vessels), or over 200% profit per vessel, just a wee bit more than Don’s target profit of 15-20%. I knew all of this while Don walked me through the costs, the sale price and the, as he called it, “obscene profit.” I told him I messed up, that I had overestimated the construction costs because of the strange cones. Yeah, I lied to Don. I had marked up the job because I didn’t want it. Don thought it over for a moment and asked me to give the company a call, thank them for their business and now that we knew how to build the vessels that if they needed more we could make them for $5600 each. Don said we can’t come out and admit what they really cost us, but we can give them a good break if they want to do more business with us. I did call the company up and said what Don had asked me to say. Shortly after we received an order for several 500 barrel tanks from the company and were told to expect an order for some more of the strange coned things.
I left Western Tank Company of Odessa in August of 1980 to be a full time student at UTPB (graduating from there in May of 1981).
Jim Cochran, a friend of mine from my Odessa youth, referred to New Year’s Eve as “rookie night” - that’s where Drew’s comment about “amateur night” came from.
Next week in Episode 17 the whole gang shows up at Sue and J.T,’s house in Gardendale for New Year’s Eve, and Rick and Drew learn from Mike Garrett they had sand and starch.