THE PETERS COMPANY PROJECT

In 1980, Corwin accepted a specialty-product assignment from Peters Company

because of the potential for follow-on work. In 1981 and 1982, and again in 1983,
profitable follow-on contracts were received, and a good working relationship developed,
despite Peters’ reputation for being a difficult customer to work with.
318 CORWIN CORPORATION
President
Market
Support
Contracts
Project
Management
Dick Potts Dan West
R&D
Dr. Reddy
Engineering
Support
VP Marketing
Gene Frimel
VP Engineering
Dr. Royce
VP Manufacturing
Exhibit I. Organizational chart for Corwin Corporation
On December 7, 1982, Gene Frimel, the vice president of marketing at
Corwin, received a rather unusual phone call from Dr. Frank Delia, the marketing
vice president at Peters Company.
Frank Delia: “Gene, I have a rather strange problem on my hands. Our R&D
group has $250,000 committed for research toward development of a new rubber
product material, and we simply do not have the available personnel or talent to
undertake the project. We have to go outside. We’d like your company to do the
work. Our testing and R&D facilities are already overburdened.”
Gene Frimel: “Well, as you know, Frank, we are not a research group even
though we’ve done this once before for you. And furthermore, I would never be
able to sell our management on such an undertaking. Let some other company do
the R&D work and then we’ll take over on the production end.”
Delia: “Let me explain our position on this. We’ve been burned several times in
the past. Projects like this generate several patents, and the R&D company almost
always requires that our contracts give them royalties or first refusal for manufacturing
rights.”
Frimel: “I understand your problem, but it’s not within our capabilities. This
project, if undertaken, could disrupt parts of our organization. We’re already operating
lean in engineering.”
Delia: “Look, Gene! The bottom line is this:We have complete confidence in your
manufacturing ability to such a point that we’re willing to commit to a five-year production
contract if the product can be developed. That makes it extremely profitable
for you.”