Originally Posted by Chula Vista

I'm going to take people's advice and avoid further political discussions for a while. I apologize for being so angry and dickish towards some members.

For anyone interested, here's the full story of what happened to my company. I know, TOO LONG - but trust me it's an absolute wonderful tale of corporate greed. You'll enjoy it.

Over the course of 17 years we designed and developed 18 commercial loudspeakers for MegaCorp (MC). These were all manufactured by China Factory (CF) after we spents months getting them all set up back in 1998.

Commercial loudspeakers have transformers in them and are run by high power amps so that large numbers of them can be hooked up in series. Similar to transformers on telephone and electrical poles. They are installed in malls, airports, convention halls, sports arenas, etc. They also have to be designed to be 100% bullet proof since they double as the fire alarm system if needed. Lots of UL safety certifications required up front.

Late 2014 MC comes to us demanding a 5% price reduction. Then CF notifies us they are raising their prices by 6%. On September 4th, 2017 CF notifies us that are not shipping us any further MC products. Within a week MC says that since we can no longer support them they are going to start buying direct form CF.

Voila! By throwing us to the curb (and eliminating our margin) MC get's their reductions and CF makes more profits. Our business gets gutted by over 85% and eventually 32 of 35 people lose their jobs.

During the course of the lawsuit we found out the following:

- The VP of purchasing for MC got a huge bonus based on the price reductions.
- The owner of the CF and the VP of MC had begun putting the plan in place as early as April 2014.
- In those 17 years we'd placed approx. $50 million dollars in purchase orders with the CF.
- MC grossed over a quarter of a billion dollars in sales of those products.
- The commercial line we designed and developed has one of their highest profit margins and is still considered the industry standards to this day.
- MC was recently purchased by a HUGE South Korean company for a billion dollars more than what they did in sales in 2016.

And because of a miniscule technicality in our contract (that it took CF's lawyers more than two years to discover) they both walk away basically scott free. The 3 of us left from the original 35 employees have been running on fumes ever since.

Note that prior to our contract getting tossed both MC and CF were at the table ready to settle with us for around $16 million. Linda and I would have ended up with about $800 thousand after taxes.