Costs arising from these and other changes,
including the costs of delays in completion, were charged to Woody's account.
Project overrun finally became reality when actual expenditures exceeded the
budget and it was apparent to everyone that the project was at best only 85%
complete. Cashman was forced to scramble for an additional line of credit in
project financing at prime plus 2-1/2%, an excessive premium given Woody's credit
rating. From then on, Woody's were in a fire fighting mode and their ability
to control the project diminished rapidly. They found themselves throwing money
at every problem in an effort to get the plant operational.
During Woody═s period of plant upgrading,
construction activity in the region fell dramatically with general demand for
Woody═s products falling similarly. Even though Sharpe launched an expensive
marketing effort to try to regain customer loyalty, it had only a marginal effect.