Document 37bQwxmO7EaG8Kj2V0QVE0gkO

ro*M 2ltl-'U PKIMTKD IM U.tA W. * INTEROFFICE CORRESPONDENCE OAF Corporation JAN ^ COMPANY CONFIDENTIAL / 4' to Mr. R. W. Smith LOCATION 140 noM L. B. Stocks LOCATION 140 0AT1 December 29, 1975 Economic Impact of Proposed Asbestos Standard We have reviewed W. Fassuliotis' memo of December 16th and believe that if the new standards are adopted, we must invest the $154 M at Erie IGth Street needed to comply. The demand for our products continues to grow and we do not see any reversal of this growth pattern in the foreseeable future. Our reply to the specific questions are as follows: a and b) The $26,800 annual operating additional expense can be offset by price increases. That portion of the $154 M capital expense not offset by increased efficiency can also be offset by a price increase. c) With demand for product now exceeding supply, we do not anticipate any loss of sales volume due to a price increase. d and e) Of the numerous type products in our line, the only line for which there is currently a suitable substitute is Asbestos Saturating Felt for built up roofing. We understand that there are glass fiber products available for this end use. Since our long range plan is to up-grade our sales and profit by increasing our Asbestos Latex Gasketing sales, we do not see the loss of the Asbestos Saturating Felt market as a major or long-term problem. Glass Fiber-based products are not suitable for the gasket market! ' f) We do not anticipate the loss of anv business: however, we are sure l:hat some of our customers will resist acceptance of the new standards. g) An extended compliance schedule would be less disrupting and would lessen the economic impact. LBS:km MICH09214