At that point the company would have the cash to do something else. The equipment will pay for itself in months. This has been going on for several years.
They take a bath on it for sure and waste capital that they could have used to improve their company in a way that makes them stronger.
I can tell this guy has never been in high volume manufacturing. This is a great opportunity to scrap old equipment affordably while having the depreciation write-off available on the new equipment. That's a winner.
Instead they just added equipment they may never need again and have to mothball while they lay off workers they no longer need. Not a great way to run a business and not a fair way to treat employees.
Having a job for two years beats no job at all. Temps get paid a lot for exactly that reason. Some people like that lifestyle.
Don't tell me that the margins can't support it the short term capacity burst. These guys are making a fortune. That's why they're not adding capacity. It's bad MBA disease.
You are wrong about small caliber ammunition... the OEM’s do not see the price flux/margins, market players/middlemen do... you are way wrong... Do you work in the ammunition manufacturing business? I do.
It is not MBA disease... its called being smart. In 2010 and 2011 so many Firearms and ammunition companies were stuck with product and capacity cause the 2010 elections put the TEA party in and over night guns and ammo demand disappeared.