Is Harman giving people the shaft?

I think it's more about Harman backing out on shipping stoves to the dealers, stoves that were on order, if I read the article correctly.

Freddy pretty much hit the nail on the head. On top of that, if the expanded work force sees this as a time-limited job for skilled workers, the morale always drops to zero, and probably the quality of the piece.

From what I hear it was the dealers who put in big number projections for their future allocations that got cut back to their past years numbers.
Look at it from the manufactures point of view, using projections based on the past 1,5 and 10 year trend lines is just good sense from a capital point. This blip caught everyone off guard. I doubt this same dealer sold 450 stoves in the same period over the past 5 years. Sure they saw it early and put 450 on their projected sales form. The factory just does not increase production in a short time frame and they got hammered with orders so now they have to divide up the pie. No one likes to tell a customer that the stove they ordered will be late by 2-9 months but that is what happens when there is a rush on a product.
At least they are at the head of the line. I heard people in a stove store thinking they were early trying to buy a pellet stove today. You should have seen the look the wife shot the husband when they were told current stock, even floor models, were all sold and incoming stock was spoken for until November. Guess who wanted to shop earlier!
The store would not take any money because they had no idea what was going to come in after that. They took a name and number.
Maybe oil will keep dropping because of reduced world demand and oil will be $2/gallon this winter!

Because of some of the earlier posts I was wondering if this is the case. I could see if they had issues and couldn't deliver on some of the stoves promised but as the article reads it's pretty shady to be leading both the consumer and the dealer on like that if in fact that is what they did. For example as mentioned by the one store owner in the article they ordered X amount of other supplies in anticipation of these stoves. Now they are going to be stuck with a bunch of material they won't sell for a very long time.

Wood'nCoal wrote:This whole story doesn't sound good for Harman. Too bad Dane isn't as good of a businessman as he is a stove designer. With the new plant one would think they could meet the demand or at least provide more product then the article indicates.

I believe the new plant was what got them in trouble, this is really secondhand knowledge but from my understanding they filed for bankruptcy and/or sold the company because they weren't making enough to cover the costs of the new plant. I'm sure they are making more than enough now but getting out of the starting gate with a new facility with all that debt hanging over your head....

The dealers were selling stock not yet received. Pre-selling stoves they thought they would get.
If that store sold that many stoves in years past then Harman should have had the capacity to build that many and deliver them to that dealer.
My guess is that the numbers turned into Harman for forecast sales was significantly higher than in years past, if so the dealer must share some of the blame and expense of this sales model.
Harman acknowledged the problem and offered money to offset the lack of timely arrival of the projected delivery of the forecast sales.
The stove orders will eventually arrive just not in time to meet everyones expectations.

Another thought is Harman is so far in the red that they can't get the additional suplies needed to make the stoves. Once you file for bankruptcy all the steel and other things you order now become C.O.D. and your suppliers don't even want to bother with you especially the steel companies. I know the number of steel vendors is consolidating/ merging at an alarming rate. Ryerson-tull and American steel are buying everybody up. So if you get on there bad side by not paying your bill on time it would be tough luck charlie. So bottom line they don't have the capital to get the parts to build the stoves and boilers.

CapeCoaler wrote:The dealers were selling stock not yet received. Pre-selling stoves they thought they would get.

I understand that but again as the article reads Harman was promising delivery of these units. Barring any unforeseen catastrophic event I don't see how they couldn't know they wouldn't be able to deliver the units in the quantities ordered. e.g if a dealer orders 150 units and you know that you're not going to be able to deliver them.... At some point you have to say we can't sell you that many. Over selling by a small margin is one thing but these appear to be well oversold beyond what would be considered reasonable.

I'm just talking out of my ass though and speculating.

jpen1 wrote:Once you file for bankruptcy all the steel and other things you order now become C.O.D

I'd have to look it up but I believe it was imminent bankruptcy and they were bought out by a much larger company instead.

I think both Harman and the dealer should have seen this train wreck coming.
I would still like to know if this dealer sold that many stoves on a regular basis in years past.
I started picking up used stoves before it was here and told my friends and family to get their stoves very early in the season.
'irrational over exuberance' on the dealers part and a lack of communication earlier in the season on behalf of Harman.
Bird in the hand is worth two in the bush.

Here is the story First he built a few Thousands Pellet Stoves for 3 Overseas companies Then he had to built a new Huge Factory To House them until the orders where filled Before he built the new Building he was using local farmers building
to store them in before the contracts where filled All 3 contracts where dropped by the 3 Overseas companies He was

stuck with all of the stoves so between the money he loss on the contracts and the new Huge factory he just built he was in a big hole so he had two things he could to sell out or go bankrupt It comes down to a few Bad business deals and greed on his Part everyone from the local Area knows this story

http://blog.pennlive.com/business/2007/ ... faxba.html

http://www.centralpennbusiness.com/arti ... ?aID=67304

I am a Harman dealer and to say that I am disturbed with Harman is an understatement. I am a small dealer and sell less that 50 stoves a year including pellet wood and coal. When I place an order from Harman, or anybody for that matter I get a price and a shipping date. I don't sell units that I speculate that I will receive, only units that I receive firm ship data from Harman.

As an example, I special ordered an Accentra insert for a customer May 15 and received confermation of a June 22 ship date. In the mean time I bought all the installation material and the customer bought four tons of pellets. Then I got a notice from Harman that any stoves shipped after Aug 4 would be subject to a 7% price increase. OK so far as I expected the insert in June. June came and went with no insert delivered and no word from Harman. In the mean time I ordered other stoves for inventory and received ship dates on those also. Having firm ship dates I felt secure selling those stoves. Then Harman told us that stove delivery was running long and they would fax us the new delivery schedule. We, the dealers waited for four weeks before we were told. Of the 40 stoves I have ordered I am only going to get 3. Ironicly the first unit I ordered, the insert is the last one I will get next march.

I don't care what their financial state is in or help at the factory but if they can't deliver why give us shipping dates. The last two units I ordered were magnun stokers and was told June 2009 shipping. I can live with that as I can convey that date to a customer and they can decide to wait or buy another product.

I am fortunate that I only require a $100 dollar deposit so credit card fees and refunds are not going to hurt but it is auful hard to face a customer that trusted you and passed on other heating appliances. For those that choose to wait until March or when I get the stoves I offered the pre price increase price. Those that don't want to wait get an apology and a refund.

What I have to ask myself is can I trust Harman not to do it again. I like their products but I don't like the stress

Sorry to vent, wife is getting weary of it


Steve

It's too bad. Seems Harman doesn't even communicate well with it's dealers.

My Harman is a great stove, extremely well built and I expect it will last many years.

If I were considering a new stove or boiler I would go with Leisure Line or EFM, mainly because of the quality of the product and representation here on the forum. You can get the answers you need right here.

In business the worst mistake you can make is over promise and under deliver. It's supposed to be the other way around, for example "I'll have you stove on Sept. 20" and then you call the customer on Sept. 5 and say "Your stove arrived today".

A satisfied customer may tell 2 or 3 others, a dissatisfied customer tells 10 or more others.

CapeCoaler wrote:I think both Harman and the dealer should have seen this train wreck coming.
I would still like to know if this dealer sold that many stoves on a regular basis in years past.
I started picking up used stoves before it was here and told my friends and family to get their stoves very early in the season.
'irrational over exuberance' on the dealers part and a lack of communication earlier in the season on behalf of Harman.
Bird in the hand is worth two in the bush.

I wonder if Harmon knew they were way overbooked but just did not want to lose the sale knowing that by the time it was discovered it would be to late for the customer to jump ship.

Or maybe they are just totally screwed up. I bet it is pretty chaotic due to new ownership which brings a totally new corporate culture not to mention an overwhelming order book.

They do have what appears to be a very very well engineered product. My new VF3000 boiler is not only put together like a swiss watch it looks comparatively high tech/modern.

This is a very tough business no doubt. No one knows for sure what oil prices will be tomorrow let alone next year. Would you expand and borrow millions? Apparently Dane did and got smoked. Thats what worries me about the coal suppliers. Will they now spend/expand to keep up with demand? I am betting they won't, that is why I am buying a tractor trailer load.

I DO NOT blame Harmon for being unable to keep up with demand. All manufacturers are getting slammed with orders. I know it isn't easy to ramp up production, finding good help, expensive machines on production line, etc. And, I really understand the danger of unsold inventory. (Dad's a farmer. Imagine the horror of a storage shed packed with $1.5 million in potatoes, it's February, and you haven't sold any! Been there and done that. Luckily, the orders came in and we moved them. Worked lots of overtime. Got ulcers and other stress related medical problems.)

I DO blame Harman for poor communication with their dealers. When the orders came flooding in, they should have known they couldn't deliver and let people know sooner. Around here, dealers were saying 6-8 weeks for delivery. Then, one day, they were calling customers to say it might be November. A couple of days later it was next year!

If a customer walks in and is told that a stove ordered today will arrive next May, that's one thing. It's quite another to tell someone that a stove they ordered two months ago, that had a confirmed ship date, has been pushed to next year or canceled.

Hello,

Thank you for the information in this thread. I just put $500 down on a DVC-500 on Tuesday. (the stores last one) You think there will be problems if parts or warranty stuff will be needed? This is my first stove, I was feeling very confident with the purchase until reading this. I live in upstate NY, Im not sure how many different stoves are available to me locally.

ty,
GR

The stress of it all did give me reason to indulge deeply in one of the last truly American products one last time before being sold overseas

BUDWEISER