Document 9YqOrjj4m1enR5q33oJyED1R

Archsore bootember 25, 1963 iensral Mr. K...........hUsflJCLll J0HK3-MAWVILLB SHIPifcWTi* J. _. Abbey - sad CC: lasers. Hat Through August 31 with Coaasnta h. t-ieyer - Arckaore -i. Jnith - Ardmore Legal DepWm^i j r-;s x-< 'or :. rl. Powers - Ardmore j. ..ULson - Pool! fy memorandum to you of July 15 on Johns-Manvllla shipments gave a sunoory of the Tirst six laonthe of 1963. The following material suppxements that memo. Fhe July shipments were the largest total for a month that Johns-risnville has ever tods, -ill plants exceot iicme snipped overthe contract minimum and two, ~igurd and .d.lmington exceodod the contract maximum for the month. Losever, august wnioments fall book but still were eoout equal to tha soma month In 1962. Aitslde of February, Johns---iazrvllle nos snipped in excess of the total contract minimum for every month in 1963 and will prouacly ship in excess of the total minimum for tha year. baaed on experience to data including Johna-Xazrville, oestvall, and the Industry, however, it would ap>ear Johns-rfamrilla will not ship tha contract minimum footage of board products for 1963 from Acme oy alaost kOf>, nor from Akron or Brunswick. This means a penalty payment by Johns--anville to beat*all per the contract. In this regard, a penalty of ; 9b,329.00 was ritten off oy beatwall for 1961 because of startup problems, .tg&in in 1962, tne penalty, . 57,753.00, was written off. Johns--lanville plastor sales continue to oe indifferent to poor. Johns---tanvxlle joint system sales were uetter in tne past turee months tut are still poor in comparison with the total board sales oaaed on tne rcti~ of sales oy nestwall on Joint s\etam to board sales. Johnsfianville's general complaint of insufficient profits should only be considered in light of the following pointsi 1. In February, 1963 a major change in the contract was agreed on by wnioh the beatwall price to Johns-rionvllls was baaed on a percentage discount from the current beatwall F.G.b. mill price. There was no cosh dis count, no further reference to freight absorption ana no quarterly review. Exhibit A, dated February 15, 1963, the fifth revision of prices (the Lxhioit; since the original contraot of January, 1961, gave the first set of prices under this new method, idiile it represented many adjust ments, some up, some down, by and large, the net cost to Johns--anvllls on the four products which com -rise about 95% of Johns---ianvtllo sales including (in order cx i^ortancej regular wellboerd, 3/8" board, 5/3" fire rated board, and 3/6" lath were all less then at the start of the contract. SGP 0002431 t, ... ... cCaskill 3 age 2 xirin.. ..ic . x;na .ne contract nae ceen x:j ahist.'hiee nero :.:.vp csen several ^enerai ones increases to one trace. hsse include: _ iuj.tist. x?61s -1.60 increase on 3/J" oara anx 5/3" l-th. iO oanucrv 1762: l.CG increase on ;*. y1 ..no 5/J" regular board and i/d" -irestOD and *2. CO on foxlbactc oroducts. 15 . overnoer 1962: wl.GO increase on ' refrulsr ~oara, ^ ! -no 5/v" fire3too, j/i" oacicer, end wn^, ~engtn lath, -l.>u on x'oil cacK orouucts. * -~i.-ust. *363: l.oo increase on rocruxar coaro. l.>0 on 3/3" acKfcr, *nd 2.5c on lorn; l3ngth lath. lease note o.iat airing t.6se vo veers, ^xx oi.stsr oroducto nave gone ; >l*0o. -here nas oeen no once enunge in Joint wyetem nrices. lsoj .he on inax jcnicit u .:Xi less than . iters cut now includes nrsctically uJL jpsu.; nroaucts r.aae tv ..ejiwall oxcoct rooi csck na industrial iteres. I- was ouiv ..itn tue ranseu metnod ox' setting Johns---anTllle pricee under the February, 1963 contract change, that it was possible to reflect prica increases ahj decreases rxane to the trade ruickly end equitacly, The price changes ogust 1, 1963 brou-jht on the sixth revtsion to .Jtnioit ith toe change _n ^ns contract februarr, x?63, -11 -oeexal ricm.. ..iiich .an grovni ..arm <e two . aars operation tare ccrico.Li.eci, hese i.ad seen ana r: aasict </onns---anville to \eet j.rocLiic cornontitivo oiiuatioas or oontiijjxhi low troiit taxes (on tneir coot/. ..ia nniL ..wo cocce.sions -aoe ...nee ooruar:, 19o3 aro recent ;=.nu induas e ~.15 per cwt. allowance on coaro snioments out oi AKron into iev xorx city ana tong island to incourc.-.o Jonns---tanville to naxe suen shipments ana release cone of the pressure on ilnington, ^ncl c- cancellation ox' cue orico -ncrcaae cn joaro out oi ..c:*e xnto tne otate ox' Texas only, oecauee the August 1 ioorease did not hold firm in that citato. 3. General nerxet conoitions on ypsa.r` ooaru products rssuxtea in genaral allowances to the trade in February, 1963. Johns-narrvlHe had to :xeet the situation ana tills cost to than nas ceen tne suo.ject of many ai3cusalona md letters. ou iave our reco'itoeadations \mich essentially are a com promise Art: not a:, agreement to pay nil Johns--<anvllle is asking. i'hus fer oestwail has resisted assistance in CalifcrniE, faxes, rnd other markets, ..nere Joans- envilie has rsportea competition. *f tie oarxet .rad nelJ fir. , uxTing tne soring and 9-jh.ier ns ned been thou mt last viator, Johns-- xnviLa vreuxa hare ceen oretty close r.-j x-ne 13/. oroxit they eep bringing up. eetwall cannot guarantee a ...jecil'ic jrox'it iolesu justwall xavs '. acre Jonn3-'anville i.a/ sain ^ or conversely -.mere the> cannot snip;. .. ..t t/iXrdnxrton nje to .no terrific uexano cn uie ciant cacacity, ^aera has oeen snippea into the nant from rdaron to supplement i.ie o.ock. -estu&JLl notifies Jonns- iamrxlie in cna again early in June that beginning with June Aestwaxl would cnarte Johns--irnnlle v .3o per cwt. on all ..oara SGP 0002432 '*. <1. -teCasklH 'a** 3 ahi^nents in excess ox' 3,&X>,0GQ square feet each month ana snov tae casrge as & separata item on eacn invoice. aohna-<-*anville has refusea to pay this charge and nad deducted on eacn invoice v.-nere it appeared. There arc now 166 deductions on shipments for June sod July totaling v23,261.9d. This net.xod of pricing was stopped in August end oestvaU suggested a prorated scheme on the aJcron ooard in your latter ox* August d to Johns* *anville. This showed *>1,766.12 for June and v,596.JO far July* Johns* 'surrille has riot acknowled ea his letter, reviewing the figures an error was notea. fhe Johns-danville percentage for uuly should have oeen 29.lx rattier than tne 36.1 shown wnich would xcake the cnarge only vl,3JJO.d2. -or august, tohns-iianmlle snipaente reoresented 26.1x5 ax' the .card ship* xents out oi -U'nington. Applying this percentage to the v-.36g- per cwt. freight and *2.50 per ton nancling and storage charges on 2,012,750 pounds of board oroaucts shir-pea from Akron to Millington gives 2,611.33 for uohna---anvilie. The total for three months then is bd,6od.3o. 5. Johns- ianrille has requested additional discount at several plants out refer ^alnly to hUbiogton. ft has oeipointed out that with the continued high proportion of Johne~rfanvllls soles on the 1eland brings their prefit down on Wilmington. For instance in June, lx0 of Johns-tfanvilla irhlpnents from WiIslington vent onto the Island And netted only aoout llj4 to thee. To bring tne net profit to 161 out of the plant, Johns-iianville would have to get coout 22* on the other bOt of tneir shipments. In August, Johns* Uxnville's shipments onto tae ialana were aoout 351 of these wllmingtoa shipments. rhe comnany figures for tne wilnington plant snow a gross profit of 27.ul, or. tne natarial oestwaxl sold x'or the first six months in 1963. for this same period oeetwall'a gross profit on the soles uohns-rlanville made wee 26.9/v. during this sa-te period beslwall gave Johns-ilanviUe a 23> discount on tne -till price on the .-tain items. Increasin., tois 1. to 26a would drop tiestwall's profit to 23*6) while increasing it 2* to 25>, would decrease Beetvall'e profit to 22.3 (all profits ore gross before selling ana administrative costs are considered, of greater significance, the 1 change would have meant destvsil would have to give J-H 611,923 on the first six months of 1963 or $23,b66 for tae 2 change. o. In the natter of Johns-Msnvllle complaints repairing some payment, a long fetter was sent co Johns-danvllle several months ago pointing out they were not following up on nxany snail complaints and losing them oy default (fail* ure to answer simple questionsj and were wasting taeir time x-ygulng over the amount of adjustment oestvall would give Johns*-ianville on the large ones wnen very generally xieatwall has iven all that can be done under the contract. _n this regard, Johns-oanville nad deducted from tneir -cur rent payrsnts at linington -153.65 on an old adjustment. destwall has already yiven them acout -2,763. -"his ia covered in a separate letter to Jonns--ianville dated September 19. You aao a copy of this. In conclusion, you can see the matter of proolane and adjustments are a two way street. Piiooly stated, Johns-Hanville wants xiestvall to take over more of the cost of their ceing in tne .gypsum ouslnesa. SGP 0002433