From Losing $100K a Month to Making $400K a Month

A mid-size U.S. manufacturer — a $60 million revenue operation serving the automotive supply chain — was bleeding money. Not slowly. Month after month, the company was losing between $80,000 and $100,000. The facility was running. The workers were working. Products were shipping. On the surface, it looked like a functioning business.

But underneath, something was structurally wrong. Leadership had theories. What they didn’t have was a diagnosis. This is the kind of situation that looks like an operations problem until someone looks at the numbers closely enough to see it’s actually a pricing problem.

John Hoffman — now FGP’s CFO Lead, and at the time stepping into the controller role at this manufacturer — asked for six weeks before drawing any conclusions. During those six weeks, he worked methodically across four areas: material costs, customer-by-customer pricing, labor, and the fixed cost structure — specifically, what it would actually take for the business to break even.

What he found wasn’t a production problem or a labor problem. The company had desperately wanted to win a major automotive customer. And win they did. But in their eagerness, they had kept cutting their price long after their main competitor had already dropped out of the bidding. They ended up pricing the work roughly 15% below market. In chasing the business, they had won it at a loss.

When John presented this to the plant manager — a 20-year veteran of the facility — the response was candid: “I guess I did not realize that.” That’s the thing about pricing decisions made under competitive pressure. The emotion of wanting the business overrides the math of making money on it.

John’s approach was systematic and sequenced. The diagnosis came first. Then the plan.

First, targeted headcount reductions brought the cost structure into better alignment with the revenue the business could actually support.

Second, John worked directly with material suppliers to improve terms where possible.

Third — and most importantly — he built a KPI tracking system and took it into every customer relationship. This was 2008 and 2009, the height of the financial crisis, and material costs were spiking. That created both a problem and an opening.

John developed a material surcharge program and applied it customer by customer — not as a blanket demand, but as a structured, data-backed conversation tailored to each relationship:

• Customers who cooperated on the surcharge didn’t receive a price increase. The surcharge covered material cost exposure 100% — which John notes is rare to achieve.
• One customer refused the surcharge entirely. They received a 30% price increase instead — and they paid it.
• The big automotive customer — the one originally priced at a loss — got a combination approach. John drove to their site, spent two days working through the contract language, found room for a surcharge, and negotiated a 15–20% price increase depending on the part.
• One customer walked. They took the work back in-house. John describes that as a win — the volume was filled with more profitable business, and the complexity that customer brought disappeared with them.

The business went from losing $80,000–$100,000 every month to generating $300,000–$400,000 in monthly profit. For a $60 million company, that is not a marginal improvement. It is a fundamental change in what the business is — and what its owner can do with it.

Customer relationships, rather than fraying under renegotiation pressure, came out stronger. Every relationship that stayed grew. The big automotive customer — originally the source of the problem — became the company’s most committed account, naming them as their sole supplier. That kind of outcome doesn’t happen by accident. It happens when you show up to a difficult conversation with the data to back you up and the persistence to see it through.