VOLUME 41 NO. 2
The pandemic has impacted the price of materials and components used in the equipment manufactured by this company. More accurately, the reaction to this pandemic brought on supply chain problems and inflation that have pushed prices up. A large factor in inflation is the amount of money the federal government has provided. A small example is occurring as this is being written. Oregon’s legislature is currently in a month-long session. One item, to be addressed, is how the state is going to spend the two billion dollars left over from the Federal funds received by Oregon.
Delays in shipping are a big factor for items coming from overseas. One European motor manufacturer’s normal delivery of eight to ten weeks is now sixteen to eighteen weeks. They can provide earlier delivery if their customer is willing to pay a significant expedite fee. There is a two month wait for stainless steel grease fittings that the regular supplier normally has in stock. Normally, this item is immediately available from several venders in this area. Reaction to supply chain problems, by this company, is adding to the problem. Gem’s stainless steel inventory has been significantly increased and components for existing jobs are being ordered and delivered sooner than normal.
Stainless steel is the pandemic price increase leader. These prices are the price paid by large users for product supplied by steel warehouses. Since the late 1960’s, stainless steel has been a commodity. In the early 1960’s, it was a specialty product with a normal price of one dollar per pound for type 304. Note that other items on this list, which are parts of Gem’s finished product, rarely show price decreases.
The drop in health insurance cost between 2018 and 2020 recognizes the change from a preferred provider (PPO) plan to a high deductible plan to take advantage of health saving accounts. This change took place over several years. Gem offered the high deductible plan as an option in 2006 shortly after HSA’s became available. Price for the high deductible plan first shows in 2020. Another major change will reduce future health insurance cost increases. Last year this company changed health insurance to a carrier who also provides medical care. The price shown above is for a family plan using the insurer’s medical service. The family plan using outside medical providers costs $1449 per month. Employees, who want to use outside medical providers pay the difference.