Document 6brpObojbaMMmzKmqXQLveRJR

Arr.more ?*r. A. f. :'eyep 1-17-62 General Sales BESTWAIX - JOHHS-WANVIIXS CONTRACT ON GYPSUM PTOHJCTS ________ 0. B.eot Hr. Malcolm Keyer - Ardmore Mr. Bersellus - Ardmore Mr. R. L. Smith - Ardmore Legal*^, ./ ' Aa you know, during the 1961 year I worked closely under the subject contract to be sure that everything possible was done to make It work. This Included getting proper packaging, label*, stocks and following through to be sure all details were properly carried out. An analysis of the shipments oorapared to contract quantities by plant on a day, week, month and year has been made, Bach month J-M quantities have Increased to the point where they are approaching nationally, the minimum quantities provided in the contract. For Instance, in the month of December, J-H sales on a 3/8" basis amount to 855 of the contrast minimum for all of the plants around the country Including, Row Orleans and Wilmington. You realise that Wilmington la not yet In operation and the ship ment of material out of Hew Orleans no where approaches what it should be due to the late start* Zt should be apparent then that J-M sales are going very well In other areas* Referring to the December performance by pirate, JT-K exceeded their mlnlmuns out of Akron by about 6%; by t|JS one of Ft, Dodge} by approximately 275 out of Grand Rapide and by over 1005 out of Sigurd* J-M sold approximately 505 of their minimum out of Aeme| 455 of tho mini mum out of Blue Rapids} 715 of tho minimum out of Bruaawiok and about 605 of tho minimum out of Row Qrloana* A study of these < quantities indicate about 955 of J-M sales is In four products, i 3/3* and 1/2* vallboard, 3/8* lath and 5/8* Flretard (Firestop}. While the proportions very. 1/2* wellboard has been generally 505 of tho saloe, 3/3* lath lOR to 2OR, 3/8" board 185 to 235 end 5/8* Flretard, 55 to 175* Conversely, J-M*a performance on Joint System materials and Plaster Produets other then gypsum lath, wee for practical purposes, nil. I would suggest consideration bo given to ecsio changes In 1962 in tho oontraet. If necessary to gain tho boat advantage possible for Beatwell* 1. Change the cash discount polley of tho Bestwall Gypsise Company from 25 on tho 10th of tho month following la? voicing to 25 45 days from date of invoice.* This of I -2 r. A* L. Meyer course effects the entire operation of Bestvall but it would help on two scores. ;`oet important and insofar as the Bestwall J-M arrangement is concerned. It would help alleviate the /pressure on the plants that haa oeourred at the end of the vmonth since August In 1961 at three of the plants and which 1 feel will oeotr starting probably In April or definitely no later than Kay at those saiae plants and be a vary difficult problem at praetleally all Baatwall plants in August for the remainder of 1962. The 2 10th has a tendenoy to foree dealars to buy late In the month In an effort to teke advani tage of tha discounting sat up. The suggested change would I take any Incantivs sway from tha dsalsrs to place their orders at a certain time and it would give each dealer tha 1 same terms insofar aa when he had his material ordered and \ shipped* The problem of course la tied in with competitive gypsum manufacturers, but In this regard Baatwall would be answer* lng to a degree the pressure of Bestwell salesmen to offer extended terms to meet competition end at the earns time would net be developing excesalve extended terms* In other words, this changs would be helpful In meeting the continued reguest to offer 60 day terms* It will else help Insofar aa the ten* deney on the pert of the customer to send their oheeks In on the 11th and 12th and still teke the dlseount. Finally, it seems possible that such a change In the terms would distribute the load In the Aoeountlng Department* 2* It le suggested that penalties Insofar os the first year of tha eontraot against J-M for failure to sell the minimum quantities of wallboard should be eencelled but only on the basis of tha problems 2*K had in getting started* analties should be enforced far 1961 end the years following* it it suggested that the question of penalties bo .reviewed : to allow J-M some eredlt for taking more then the mlnlmuma out of some plant to aesqpeneste for net taking the mlnlaums out of all planta* The penalty by plants foreee J-M te sell out of all planta and le desirable In the suoeessful operation of Baatwall* However, giving ppgslbly 2$ eredlt on their plus sales out of some plants against^ their poor seloe out of other plants wbuld alleviate seme difficult situations* U. It is suggested a penalty arrangement should be sat up to cover bag goods* J-K haa dona nothing om plaster*, Their sales to date seam to reflect acceptance by e salesmen of e plaster order if It is offered to him but no solicitation* Analysing* the sale of board products, lath represents 1S SGP 0024645 -3- A, L* :Jsyer of their total spIss In feeember and from the study of fheir performance in t'ra rast several months, tt is roac.ible J-.Vfs sale of loth will commence to approach 2eatwall's p oportion of lath to board soles and probably be naar 20% in 1962* Certainly J-M ought to make an effort to sell the plaster over J-K lath* 5, Whether it is put in the contrast or in a aaparats letter, something should be put In writing to oover the point that is discussed so much by J-M people as to their "guaranteed profit*. They hare periodically referred to this ea 1$( It la Impossible to establish this in vie* of the many lteaa involved. It would seem they take the attitude that if they don't make 18# on an Item, then Bestwall does not vent J-M to sell it* Again analysing their sales in the past year, they talk a great deal about thair poor profit on sheathing, wood grain, foil boards, ets* yet their sale of these item on a total footage amounts to lass than 5% of the total boards sold* Tt can be assumed that if J-M wishes to get more board business, they are going to bo forced to sell the low profit items to got earload orders, but bn the other hand. It should bo emphasized somehow that they must sell these low profit Items to help In the balancing of etook* This lnelutfss Joint System material and plaatar* Tf this oannot be worked out In seme manner as indicated above. It le suggested that the eontraet be altered and J-M be required to pay for the peekages including bags, tapes, labels as well as storage space on the alow moving ltame to tha extent that it will compensate Bestwall for stocking them* Furthermore, with J-M making this payment, Bestwall should refuse to make shipment of these items exespt undsr J-M label end should have them under J-M label to taka care of such requirements*. 6* Finally, It le suggested that the Gypsum Plant Managers masting would be an excellent tine for Mr. Malcolm Meyer to make seem remarks before the entire group along the lines of the meeting of November 1, 1961. As Z resell, Mr* Mayer expressed tha Idas that ultimately Johns-Manvilla would have every Item available from tha Gypsum Plants to Bestwall under J-M labels* SGP 0024646