John Pierce was a home builder who specialized in building high end, state of the art residences. The wealthy were his clientele, the men and women who earned enough money every year to buy three of the homes he would build for them.
John was in the midst of drawing up a contract for the Wescott’s in
John was a tall, lanky fellow, with dark brown hair and deep hazel eyes. His face was a mixture of the English and Hispanic blood that flowed through his veins, which provided him with a rugged good look that women found hard to ignore. He was also a very intelligent man, quick to wit and thorough in his contemplation of any problem. But good looks and intelligence weren’t any match for an angry customer, and John had the feeling that this family would be irate.
The Wescott’s were a lot like many of the people John had built homes for, wealthy, well-educated, and certain of what they wanted. Samuel Wescott was the CEO of a major oil company, and his wife and two children were nothing if not stunning both in appearance and confidence. Samuel was no different. All in all, the Wescott family was everyone’s picture of the ideal well-to-do family. They went to church, drove Mercedes Benz cars, dressed impeccably, gave to all sorts of charities, and let everyone know about it. They had an image to uphold, and they were very good at doing just that.
Samuel Wescott had been in oil all of his life. His father, and his father’s father had run the same company for nearly seventy years. There was a sense of entitlement that went with Samuel that John Pierce simply did not like. Whenever Samuel stepped into John’s office, he arrived with an air of superiority and expectation that made John want to bitch-slap him. But, he was a customer, and John treated him just as he treated all of his customers; with respect and dignity.
John often thought that it didn’t matter how he felt about a prospective owner, his job was to build what they wanted, and to do it in the best way he could. How he felt about that customer could never interfere with how he treated them and performed for them.
It was with this knowledge that John met Samuel in his office at Pierce Paradise Homes. Telling Samuel about the cost increase was not going to be fun, and he had no false illusions about that.
John was talking on the phone with his wife when Samuel walked in, talking with her about this very meeting. When he saw Samuel sit in the chair across from his desk, he let his wife know that he had to go, Mr. Wescott had just arrived.
“Good afternoon Mr. Wescott, how are you doing today?” John greeted him with.
‘Fine, Fine” Samuel Wescott replied in a somewhat bored tone. “You know, busy all the time. Look, I haven’t got a lot of time, so let’s just get down to brass tacks, shall we?”
“Very well, Mr. Wescott,” John answered.
“What’s this meeting all about, anyway?” asked Samuel.
John did not respond immediately. Instead, he mentally revisited his earlier calculations which had made this meeting necessary. He truly dreaded what he was about to say, but there it was, there was no way around it. He had to inform Mr. Wescott of the changes to the estimate.
“As I told you on the phone the other day, I have had to do some more investigation as to the costs of this project. Times being what they are, had you signed the estimate I showed you last week, this meeting would have been unnecessary. Having said that, let me just tell you bluntly; the initial cost estimate is no longer valid.” He watched Samuel’s eyes betray a flicker of anger which spurred John to finish what he had to say quickly, before Mr. Wescott could interrupt him.
“Knowing this, I re-estimated the costs associated with building your house, from the costs of materials, permits, labor…especially labor and travel, heavy equipment costs including fuel, and have come to the conclusion that the estimate for two million, three hundred and fifty thousand dollars is no longer do-able.”
John eyed Mr. Wescott from across his desk, being truly thankful that Samuel had agreed to meet him here. In Samuel’s office, he would have felt like a naughty ten year old about to be spanked as he delivered this information.
Pausing long enough to breathe, he continued, “The new total has to be two million, seven-hundred-two thousand, and five hundred dollars.”, being very careful to annunciate each syllable clearly.
There was a long silence shared between the two men. John was beginning to feel as if Mr. Wescott might just walk out without saying a word. He couldn’t have been so lucky.
“Am I to understand, Mr. Pierce, that because I refused to sign your little document last week, I am now being punished to the sum of almost four-hundred-fifty thousand dollars? Just what is this?” He said, clearly struggling to maintain his composure.
“No, Mr. Wescott,” John answered, “You aren’t being punished at all. But with the passage of so much time since we first began to talk about the money necessary for a project of this magnitude, my costs have increased so significantly that I can no longer offer you the same price that was available back then. That’s what this is.”
“And just what, may I ask, is causing this outrageous price increase?” Mr. Wescott angrily countered.
John shifted in his chair a little uncomfortably, and responded. “Mr. Wescott, are you aware that over the course of the last three months, gasoline and diesel prices have risen by over thirty percent?”
“Of course I’m aware, Mr. Pierce,” Samuel said in an aggravated tone. “What do you think I do for a living. I am well aware that certain factors demand that prices be raised, but I fail to see how those increases could cause you to raise the price of my house so much.”
“Mr. Wescott,” John began as calmly as he could manage. “In all fairness, you will notice that the cost of your house has not increased thirty percent., rather it has only increased fifteen percent. That increase is a fair increase, considering what it costs to run the heavy equipment we will need to build your home, not to mention the fact that my employees have to drive a lot further than they normally do for you, as well as all of the shipping costs to deliver everything that is needed for this project.”
Samuel Wescott was turning red, but he composed himself enough to ask, “Then break down these costs for me, explain it to me like I am a little child.”, he said, as if he was talking to one of his underlings. John did not like Mr. Wescott’s tone, but he held his sharp tongue, knowing he could have fared pretty well against someone such as Samuel Wescott, a man unaccustomed to being told “no”.
“Alright, I will, Mr. Wescott. The initial increase was ten percent, merely to cover the costs of transportation, shipping, and heavy equipment usage. That covers my increased cost caused solely by the price hikes in fuel. Then, I added another five percent in anticipation of further fuel cost increases. As you can see, our economy is not stable, I have to anticipate that fuel costs will continue to rise. It would be bad business for me to swallow those costs myself. They have to be passed on to the customer”, John finished with a gentle smile.
Mr. Wescott, rose in his chair like a snake about to strike. “I’ll grant you the cost of fuel increase. That at least makes sense to me. But what’s this non-sense about raising the price ‘in anticipation of further fuel cost increases’? ” he mimicked.
John looked squarely at Mr. Wescott, and answered, “I am only doing what I feel is necessary to protect all of my investment in this and other projects. Anticipatory price increases are not new to you, are they?” He asked sincerely.
And then it hit Samuel Wescott, like a ton of bricks. John could see the understanding form almost immediately within his eyes. Samuel said nothing in reply, but shrank into his chair, finally understanding what it felt like to be the little guy.
John ended the meeting as best he could by saying, “Don’t worry, Samuel, everything that can be done to keep the cost of this project down is being done. If you want to blame someone for this, blame the big oil companies; they’re the ones who caused this.”
And with that, he bid Mr. Wescott a good day.
Isn’t it ironic, he thought, as he watched a dejected Samuel Wescott walk out of his office.