Playing a high-stakes game of pricing
How could he afford to do that?
Marty is the same age as me and he retired this month. When I first met him, he showed me a yellowed copy of the New York Post. The date at the top was Feb. 3, 1947, and the story Marty shared was about his dad, Irving and his Uncle Morty, both oilmen.
One of the biggest snowstorms in New York City history had walloped the area and to make things worse, the oil bargemen were on strike. New York City’s Mayor O’Dwyer was beseeching the Department of the Navy to release some of its oil reserves for public use. He instituted a priority system so no oil company could favor one customer over another. He commanded police, firefighters and other city employees to ride along on the fuel oil trucks to ensure the rules were being obeyed.
Irv and Uncle Morty were young men who were just trying to keep their new business afloat during that brutal winter. Like everyone else, they were having a tough time finding oil to satisfy the needs of their customers. Irv spent an entire week at police headquarters trying to get some oil from the mayor’s Emergency Fuel Committee, but it was no dice.
So Irv drove his truck to Brooklyn and bought 800 gal. of fuel oil on the black market. The price was 20 cents a gal., and Irv was happy to pay it. He started making his deliveries on his way home because the weather was frigid and so many people were depending on him.
Now this is the part of the story where you might expect the oilman to rip off the customer, but that’s not what Irv did. He charged his customers 15 cents a gal. for that 20-cent oil because that was the agreement he had made with them before all this craziness stared. Irv was a man of his word.
When Marty was very young and heard this story for the first time, he mentioned to Irv that he had lost money on every sale. How could he afford to do that? Irv looked at him and said: “These people are our customers. They supported us when we started this business. They’ve stuck with us through good times and bad. They depend on us to keep them warm. Life is a long-term proposition, son. You have to do right by your customers, and you have to keep your word.”
At one point, Irv and Uncle Morty carried oil in 5-gal. cans over snowdrifts so their customers could have heat. There was so much snow on the ground the trucks simply couldn’t move in many of the streets, but they knew people were depending on them and life is a long-term proposition.
Marty’s brother is Al Levi, whom I named Ace Troubleshooter many years ago when we visited problem heating jobs. He writes for this fine magazine.
Marty’s other brother is Richie Levi, The Man Who Can Fix Anything, and for decades, these are the guys who have taken care of our comfort needs.
They made an interesting team. Al is brilliant at organizing businesses and he certainly left his mark on their family business. Richie really can fix anything and he never rolls his sleeves down. They’re always up, and Richie is always ready.
Marty was less visible. He spent his years working in the present and in the future, with a keen memory of the past and all that Irv and Uncle Morty had taught him. Marty bought the oil and set a guaranteed ceiling price for a full year. He’d charge less if the price of oil dropped, but never higher. This is an incredibly high-stakes game with millions of dollars at stake, and I don’t know how Marty did it for so many years.
Listen and learn
Irv, who had the size, shape and toughness of a steel-corner mailbox would call me and ask me if I would ride with him for a day. He did this a lot with me. I’d drive to his office and we’d get into his car. Irv always wore a shirt and tie and a well-worn sports coat; add a Mr. Rogers sweater when it got really cold. He wore thick-soled shoes that could trudge through snow and mud, and there was a quiet way about him. He liked my stories. I adored his.
We stopped by to listen to one of his customers who had a complaint. She was a woman of about Irv’s age and she started screaming at him as soon as she opened the door. Irv stood there, hat in hand, nodding his head, agreeing with her and saying he would make things right, and right now. All the while, he was smiling like a schoolboy.
When we got back into the car I asked Irv how he could smile in the presence of such a banshee. He said, “Dan, I just stood there thinking I could be married to this one, and when I realized that I’m not, I just had to smile.”
The day we buried Irv, I thought again of that day years before, and I smiled. He was a mensch. People we love never really die.
Marty would have customers like that woman on the phone every day. The price of oil would rise and fall, but never go above a ceiling price if the customer decided to join the in-house club last summer and pay the small membership fee for the year. With the volatility of the commodities market, it was madness not to take Marty up on the offer and join that club. Marty used the membership fees to buy commodity futures.
But some people think short-term. They’d pass on the offer to accept ceiling-price protection and then want in when it was too late. The whole purpose of the club was that by committing, Marty would know how much oil to buy for the year.
Could you do that and sleep nights? Could you look a year ahead and intuit what was going to happen on the world’s oil markets? Could you commit to futures and guarantee you’ll accept that physical product at a firm, agreed-upon price when the time arrived to take it? Will we have a mild winter this year, or will it be brutally cold? Will the price of natural gas cause people to switch from oil to gas? Will the C.O.D. guys woo customers away with a price that was a few pennies per gallon less, even though they don’t do any service?
What does your crystal ball tell you? Could you do this job?
I certainly couldn’t, but Marty did it year after year. I think about that a lot now that he’s done.
Al Levi organized the place when he was there. Richie Levi, who can fix anything, taught others how to work as hard as he works. But Marty Levi, with his testicular fortitude, walked what I think was the scariest path of all. He had to know what was going to happen in the future, while dealing with customers who scream in the present.
If he got it right, no one noticed or said, “Well done!” It was just expected of him.
If he was wrong, however, he lost and often in a big way. He would now have to deliver oil at prices lower than what he had to pay for the oil while still making payroll. He couldn’t go back to his customers and tell them they now had to pay more. He had given his word on that ceiling price, as had his father, Irving, and his Uncle Morty years before he was born. You make a promise; you keep it. That’s it.
Could you do that?
I’d go see Marty and we’d have lunch, but when I’d arrive he’d be on the phone with a customer who was arguing about the price of oil and threatening to leave. I’d stand off to the side of his desk, waiting and listening as Marty calmly tried to reason with the person. Sometimes he’d get through; other times he couldn’t. People think short-term these days.
I could not do what he did. Not even for a day. He had one of the scariest jobs there is in the heating industry. He did that job with grace.
And he kept the faith.
This article was originally titled “Marty” in the October 2016 print edition of Plumbing & Mechanical.