Family Fortunes Part Nine

It wasn’t just that: Panhard’s brave new saloon was nearly torpedoed because of a disastrous budgeting error. “When we calculated the manufacturing costs at the beginning,” recalls Panhard,we worked out that the waste aluminium would be taken back by Aluminium Frangais at the price we’d bought the sheet aluminium. There was a large amount of scrap, as with all vehicles. With steel this isn’t crucial, because steel is cheap. But aluminium was sold at a high price. This miscalculation gave us a manufacturing cost that was almost unsupportable.Nobody noticed! It was a monumental mistake. We became aware that, when Aluminium Franjais took back the waste they paid roughly five times less than we’d calculated. That error represented our profit margin.”