Document 655Zz58wwRRJov4VKywOD6Led

FILE NAME: Kennecott (KENN) DATE: 1929-1944 DOC#: KENN016 DOCUMENT DESCRIPTION: Progress Report [Excerpts] Johns-Manville JO H N S-M A N V IL L E PROGRESS REPORT 1929-1944 New York JOHNS-MANVILLE CORPORATION MA RC H 1944 A RECORD OF ACCO M PLISH M EN TS OF TH E JOHNS-MANVILLE O RGAN IZATIO N IN T H E YEA R S 1929-1944 L ewis H. B rown Elected President, March 15, 1929 THE CREED OF MANAGEMENT 2 sfe We who are responsible for the management of business in supplying the needs of the public for goods and services and who recognize our obligations to stockholders and employees, believe T hat we should constantly seek to provide better values at lower costs so that more of our people can enjoy more of the world's goods. T hat we should strive to develop the efficiency of industry so as to earn a fair return for the investing public and provide the highest possible reward for the productivity of labor. T hat we should stimulate the genius of science and utilize the methods of research to improve old products and create new ones so as to con tinuously provide new fields of employment for the present and the coining generations. T hat management should encourage fair trade practices in business which, whether effected by competition or cooperation,, will be so shaped as to be for the best interest of our customers and of society as a whole. T hat it is management's duty to be alert to its own shortcomings, to the need for improvement, and to new requirements of society, while always recognizing the responsibility of its trusteeship. T hat business in this country has never been what it could be and never what it yet will be. T hat Business, Labor, Government and Agriculture working hand in hand can provide jobs and the opportunity for all to work for security without loss of our liberty and rights as free men. FRO M A SPEECH B Y LEW IS H. BROWN, PRESIDENT, JO H N S-M A N V ILLE CORPORATION, BEFO R E T H E SEVEN TH IN TER N A T IO N A L M A N A G E M EN T CONGRESS, A T W ASHINGTON, D. C. JOHNS-MANVILLE DIRECTORS W A L T E R H. A L D R ID G E President Texas GulE Sulphur Company LEW IS H. BROW N President Johns-Manville Corporation ENDERS M. VO O RH EES Chairman, Finance Committee United Slates Steel Corporation JO H N W. H A N E S Chairman, Executive Committee United States Lines Company R O B E R T W. LEA Vice President Johns-Manville Corporation W ILLIA M R. SE IG L E Chairman of the Board Johns-Manville Corporation Deceased F R A N C I S D. B A R T O W Partner J. P. Morgan & Company G EO RG E W H ITN EY Partner J. P. Morgan & Company IN T H E YEARS S I N C E 1929 W A L T E R A. JE S S U P President Carnegie Corporation of New York E. T . STA N N A RD President K-ennecott Copper Corporation H E N R Y C. A L E X A N D E R Vice President J. P. Morgan 8cCo., Incorporated H. EDW ARD M A N V ILLE, JR . ist Lieutenant in the United States Army H. EDW ARD M A N V ILLE Chairman of the Board Johns-Manville Corporation G EO R G E B. E V E R IT T President Montgomery Ward & Company A L F R E D P. SLO AN , JR . Chairman General Motors Corporation C LA R EN C E M. W O O LLEY Chairman, American Radiator & Standard Sanitary Corporation ME MB E R S OF T H E O F F I C E R S BOAF LEWIS H. BROWN President Johns-Manville Corporation LOUIS R. HOFF Vice President Johns-Manville Corporation ROBERT W. LEA Vice President Johns-Manville Corporation CLIFFORD F. RASSWEILEI Vice President Johns-Manville Corporation MYRON J. BOEDEKER Comptroller Johns-Manville Corporation ALVIN BROWN Assistant to Vice President Johns-Manville Corporation VANDIVER BROWN Secretaiy Johns-Manville Corporation LESLIE M. CASSIDY Vice President Johns-Manville Sales Corporation ROGER HACKNEY X reasurer Johns-Manville Corporation JOHN P. KOTTCAMP Vice President Johns-Manville Products Corporation THOMAS K. MI AL Vice President Johns-Manville Sales Corporation HARRY M. SHACKELFORI Vice Piesident Johns-Manville Sales Corporation IN THE YEARS SI NCE 1929 SAMUEL A. WILLIAMS Vice President Johns-Manville Corporation JA M ES S. ADAMS Vice President Johns-Manville Corporation +WILLIAM R. SEIGLE Chairman of Board Johns-Manville Corporation EN D ERS M. VOORHEES Vice President Johns-Manville Corporation EDWIN S. CROSBY Vice President Johns-Manville Sales Corporation A R TH U R S. ELSENBAST Vice President Johns-Manville Sales Corporation ADRAIN R. FISHER Vice President Johns-Manville Prod nets Corporation JOHN P. SYME Director of Industrial Relations JOHN H. T R E N T Vice President Johns-Manville Sales Corporation fP H IL L IP A. ANDREWS Vice President Johns Manville Sales Corporation fCH ARLES H. RO BERTS Treasurer Johns-Manville Corporation Now President, Standard Brands, Inc. fDeceased while in company service Now Chairman, Finance Committee, United States Steel Corporation 1938 A FT ER TH E EXPERIEN CE OF TH E LONG DEPRESSION, IT took little to undermine confidence. Renewed depression, succeeding so swiftly upon gradual recovery, was devastating. From 139 at its highest, durable goods production fell to 65 in 10 months. This was a descent which, in the long depression, had consumed more than two years. The decline in general production was equally precipitate. At the end of six months the company's operations showed a loss of $25,000 with no evidence of interruption of the downward trend. Prudence demanded retrenchment. Dividends on the common stock were suspended from the beginning of the year. Attack upon costs and expenses was renewed. Salaries were reduced by 5% to 12 % at the beginning of July. But there were many increases in costs of operation which could not be controlled. Expansion of productive facilities went steadily forward, however, and the major program was largely completed. Watson began operation in October and Richmond in December. The power plant at Manville was completed. Dust elimination equipment costing $135,000 was in stalled in the Asbestos mills. Nearly $200,000 was devoted to ovens for the manufacture of superfelt, the improved rock wool batt. The effect of the program upon the distribution of investment in fixed assets was notable. The aggregate net value was little changed from 1929. But, whereas in 1929 the value of mineral properties exceeded $10 million and machinery and equipment was less than $6 million, now the former was reduced .I3I/2 million by depletion provisions while the latter was increased by nearly $3 million. Thus, the materials of production were being replaced by the more dynamic tools of production. This steady devotion to the foundations of enduring progress despite the tremors of economic disruption was evidence of the wisdom of the financing of the previous year. Capital expenditures again exceeded $4 million, reaching a total of $ 12 million for the three years. Workingcapital was drawn upon to the extent of $2 million, but at over $ 17 million it remained ample. With the provision of a fund of $235,000, later to reach and be stabilized.at about $425,000, the company now became a self-insurer of its workmen's compensation risk at all but three of the smaller plants. It insured itself against extraordinary hazards, moreover, at a modest cost. The first annual jobholders' report was rendered, dealing with operations in 1937 and with the affairs of the company in general. In introducing this report, Mr. Brown said: " It has long been the custom for business firms to issue annual reports to their stockholders --the persons whose money invested in a company makes it possible to build factories, buy materials, create employment, sell to customers on credit, and provide for future expansion. I propose this year to make a report to the jobholders --the persons whose time and labor invested in JohnsManville make it possible to manufacture, distribute, and sell our products. . . . The united efforts of all have made possible this year of MA FACTORY AT WATSON, CALIFORNIA progress and achievement in spite of bad times which reduced business during the latter part of 1937." It was a step in industrial relationship which many companies were to follow. This year brought an unusual number of changes in the manage ment group. W. R. Seigle, chairman of the board and director of research, 39 years in the company's service, died after a brief illness. He had long believed that research is the touchstone of industrial progress. So devoted was he to this belief that beginning in 1916 he had devoted his own funds to research; the facilities thus created had been purchased by the company in 1930 and research activities cen tralized at Manville under his direction. Alfred P. Sloan, Jr., and Clarence Woolley retired as directors after serving nine and eight years respectively. E. T . Stannard, president of Kennecott Corporation, and Dr. Walter A. Jessup, president of the Carnegie Foundation for the [58] Advancement of Teaching, were elected to these places. C. H. Roberts succeeded Arthur Olsen as treasurer. The close of the year brought reassurance to industry. The duration of the recurrent depression was to be brief in proportion as its onset had been rapid. There was to be another year before complete recovery from its effects, but the beginning of that recovery was under way. Sales were so far improved in the latter part that they amounted to $47 million for the year, not much lower than in 1936. At this level, in the face of increased production costs, the cost ratio could not but suffer; but expenses were well controlled, and the year afforded earnings of $ii/^ million. These amounted to $1.09 per share of common. A dividend of 50 cents per share was paid at the close of the year. In an address to the Seventh International Management Congress FACTO RY AT RICHMOND, INDIANA [ 59" in Washington, Mr. Brown proposed a creed of management. In seven beliefs Mr. Brown expressed his ideals of increasing utility of produc tion, efficiency in industry, research, fair business practices, cooperation between business, labor, government, and agriculture, and, in his own words: "That it is management's duty to be alert to its own shortcom ings, to the need for improvement, and to new requirements of society, while always recognizing the responsibility of its trusteeship. That business in this country has never been what it could be and never what it will yet be." [ 60 ]