“What the fuck are you trying to do to us?” the Vice President of the coal division walked right up to me as we were waiting for the early morning trip underground and jabbed his finger in my chest. “Just trying to save you some money.” I replied.
The trip to the coal face, miles under the Atlantic ocean, was always frightening. The miners around me all turned off their lamps so we sped down the incline in total darkness. It was cold. When a light did flash at the roof from time to time it revealed buckling arches and timbers askew in the older sections.
Unlike the miners I traveled with, my trips underground were short and infrequent. As the 25 year old president of Eastern Carbide Tools Ltd. I oversaw the development and testing of the carbide tipped mining bits we refurbished and manufactured at our plant. We were developing a new locking device for bits used at the coalface in Lingan Colliery.
When I was identified as a young and promising entrepreneur by the federal business development agency active in the region, Venture Founders suggested we rebuild the carbide tipped mining bits. The local coal company consumed over 100,000 of them each year and paid about $14.- each for them. As we reviewed the computer printed P&L forecasts the VF consultants brought back from Boston, we could not believe our eyes.
“There is so much profit in the re-manufacturing of these bits, we have to fudge your costs or no-one will believe these forecasts are accurate.” That was the professional advice I received. What these venture capitalists overlooked was the underlying reason why the coal company was willing to pay such a high price for their equipment. And it took me seven years and two near bankruptcies involving major corporate shakeups to find out.