“WE CANNOT AFFORD TO BUY NEW MACHINERY”
“We cannot afford to buy new machinery,” is a statement made recently by the president of a successful manufacturing concern employing several hundred people and having an established Dun & Bradstreet rating of AA1.
From the time this firm was a small operation, it has consistently purchased used or rebuilt production equipment. Consequently its investment for machinery has been held far below 50% of what it would have been had new machinery been purchased.
Any well-informed operating executive knows that the efficiency of a production tool or a power plant machine does not depreciate so rapidly that a matter of five to ten or sometimes twenty years will automatically make it obsolete.
Many of the plants that have been liquidated during the past year have contained a large number of late type machines that were purchased brand new. So it is obvious that new machinery is not the only answer to a successful operation. We have in mind a manufacturing business which was liquidated recently. It had been started by an established firm, financially successful as jobbers, which had decided to manufacture the line it was jobbing. The latest models of new machinery were purchased for the plant, but after a comparatively short period, the flush of postwar orders subsided, and it soon found itself in financial difficulties.
Now we don’t want to convey the idea that it is foolish to buy new equipment. The selection of machinery and equipment for any kind of a production operation requires practical knowledge and experience. This is where the machinery and equipment dealer becomes an important contributing factor. The success of his business demands an extensive knowledge of production and his know-how will help the purchaser answer his own question, “Shall I buy new or used equipment?
The dealer knows there are many applications where a new unit would be more efficient, and he would be foolish not to recommend the new installation for the job. But he also knows there are thousands of instances where the purchase of used or rebuilt equipment will provide production economy without sacrificing efficiency.
The number of such instances is revealed by the fact that the total annual sales volume in used and rebuilt industrial equipment totals in the millions of dollars.