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LABORATORY REPORT FOR 1949 The year 1949 was the 25th anniversary of the establishment of the laboratory as a separate department of the company. A few oomparIsons between the 1924 and 1949 laboratories may be of historical interest. In 1924, the laboratory consisted of 24 young and very inexperienced chemists and assistants. In four years, this group mushroomed into an organization of 77 persons, but then receded to its prewar size of 57 persons. Only two of our 1924 chemists had paint experienoa-- one 5 years; the other 7 years. The 1924 laboratory occupied 10.000 sq. ft. of floor spaoe and its first year of operation cost $5o,284. Only oil varnish and oil enamel problems then required consideration. In 1949* the laboratory was composed of 61 persons with an average experience of ten years. The 23 key employees averaged 18 years in experience. The laboratory now occupies 23*000 sq. ft. of floor space and its 1949 operations cost #228,133. Today's problems concern every conceivable type of paint composition; only a quarter of our work now pertains to oil varnish or oil enamel problems. Our early laboratory organization suffered from the usual faults of rapid growth. Cooperation was poor, there was a oertaln amount of interlaboratory rivalry, and the personnel had an incomplete knowledge of company policy. With all its wsaknesses, the 1924 laboratory was a boldly-conceived and ambitious undertaking for that time. Almost overnight, our laboratory became the second largest in the entire paint industry. Figures reported by the National Paint, Varnish and Lacquer Association in 1930 indicated that our laboratory then outranked the laboratories of Devoe & Reynolds, Pittsburgh Plate Glass Co. (Paint Division), and Ault & wiborg in size. Since 1930, the laboratories of Devoe & Reynolds and of Pittsburgh Plate Glass Co. (Paint Division) have increased about nine-fold in size. Ault & wiborg laboratories have doubled in size. Our laboratory is 50$ larger than it was in 1930. While we no longer oocupy the unique position we did in the 1924-1930 period, laboratories in general have become oommonplaoe. The size of our laboratory, today, is more consistent with our sales volume than it was 25 years ago. Today's laboratory is more efficient, better organized, and better coordinated than was its 1924 counterpart. Our laboratory still ranks among the seven largest in the paint Industry. TRADE SALKS DEVELOPMENTS After almost s deoade of topsy-turvy raw material conditions, we have at last reached a time when all listed items have been changed -2- back to their prewar quality or better. Current formula changes reflect substantial quality improvements or cost revisions. The return to normalcy is best illustrated by the following figures. Year Number Formula Changes Among g. S. Listed Items 1949 1948 194? 59 105 526 While fewer formula changes are now being made, they require more intensive preparatory work than typloal postwar changes. With formula stability has oome a demand for a large amount of editorial work. During 1949. the laboratory issued 63 Technioal Department Bulletins, 53 Faint Manufacturing Bulletins, and 33 Formula Analysis Bulletins. The preparation, checking, repro duction, and distribution of these bulletins takes a sizeable segment of the time which the laboratory devotes to trade sales work. The more important 1949 developments in the trade sales field are outlined below: The New Vltrallte Enamel Gloaa, Eggshell. and tTnderooatlng - During 1949> we encountered seeding in Gloss White. The seeding was oaused by reaction between the vehicle and the zinc oxide whioh had been a component in the formula since its original development. Seeding was eliminated by the simple expedient of leaving out zinc oxide, but thie step diminished the color permanency of our product. We have resorted to strong bluing to compensate for the elimination of zinc oxide, and as a result our enamels have better initial whiteness than any competing enamel. Our approach to the color problem differs from that of the duPont Co. The lattlr oompany is apparently working on the principle that color permanency is far more important than initial whiteness. Their enamels start out by being very gray but change little upon exposure to subdued light. Our enamels start out by being brilliantly white but undergo far greater change and end up slightly grayer and yellower than duPont enamels. More recently, we have encountered bad settling in certain batches of gloss colors. The problem hae been temporarily met by elimi nating the extended titanium pigment that is the cause of settling, but this has resulted in a lose of profit. A more desirable permanent solution is being sought. The Eggshell was materially improved in working qualities and "stay put" properties during 1949. This was accomplished with a cost saving that amounted to |2000 during the past year. A more economical manufacturing procedure for The New Vltrallte Enamel Gloss White was adopted in 1949. We now produoe this 0007-PTL-000923 3 enamel In 1100 gallon batohes. We purchase the base resin in tank oar quantities with consequent cost savings. Laboratory work on The New Vitralite Enamels and Undercoating oost the company 13551 in 1949 > or a little more than 4 cents for every gallon we produced (total production of all New Vitralite produots was 82,715 gallons). "61* Actinic Enamel White Gloss - $754 was expended in improving the working qualities, "stay put" properties, and color permanency of this product. Lyt-all Double Duty Primer - In spite of record production at Buffalo end Kansas City (140,555 gallons for year 1949; 12# above 1948), oomplaints received primarily along the eastern seaboard forced ua to develop a better sealing primer. Laboratory work cost #850. The laboratory also developed a special spot sealer for patohed walls and an emulsion type wall primer for use on wet plaster and dry wall construction. The latter product carried a development oost of $1785. Lyt-all Hydrogloss was made "odorless" (oost of #216) and Lyt-all Flowing Flat wasTTmproved with respect to non-settling (coat $166) House Paint - Laboratory work amounted to #2394 in 1949 and resulted in an improved working, better hiding, lower oost white. Approximately $1300 was saved daring 1949 ee a result of this formula change; a saving of several times this amount can be expeoted in 1950. Our brown and maroon house paints were also improved with respeot to color and gloss permaaenoy. Ceiling Blue was revised to eliminate color fading in the paokage. House paint Exterior Primer was lowered in C03t in an amount which saved us about $5000 in 1949. Effeoto White was reduoed 17 cents per gallon during the year due to ihe use ot resins purchased in tank car quantities and due to large size batches, while our 1949 production of Iffecto White was double 1948 production, our over-all production of white enamel showed a 25% shrinkage, most of which was represented by "61" q. D. Enamel White. Cellu-Tone was developed on an "odorless" formula at a cost of $698. Thl8 formula is to be field tested in the near future. Alkatlte Finish was made available in several additional colors at a coat of . "61" Enamel UnderooatLag was produced with easier working qualities and with reduoed sagging tendencies at a oost of $1361. 0007-PTL-000924 Transportation Finishes - a total of #7369 was spent on developments in "the transportation "field. Of this amount, #1433 was spent on speoific sales problems for railway oar builders and another #2149 was spent on speoifio sales problems for fleet, bus, and truck owners and manufacturers. The remaining #3767 went into baslo research work. #2524 was spent on automotive lacquer studies. During the past ten or fifteen years, we have had virtually no automotive lacquer business end consequently have made little effort to keep up-to-date in this field. Lest year, we were forced to fill title gap in our knowledge as a result of export business on lacquers and because we had included lacquers in our transportation line. Another #1263 was spent on research work devoted to making faster drying primers for transportation work. It seems doubtful whether our current or potential transportation business warrants the amount of technical effort we are pouring into this field. We are suddenly being expected to supply every conceivable type of coating that might be used on railway equipment or commercial vehicles. We never attempted to cover the entire field in the past; possibly we are being overly ambitious in our current transportation planning. grinding Liquids - #726 was spent in matching liquids used by the Tuttle Paint k Glass Co. and some business seems to be resulting from this effort. We also spent #519 in matching liquids used by Jamestown Finishing Products (for the Industrial Sales Department) but no business has so far resulted. INDUSTRIAL SALS3 DEVELOPMENTS During 1949, we produced 18,000 gallons of fabric coatings, moat of which went to Uaartz-Kason, Inc. In this same period, we expended #9#072 on laboratory work, #1346 of which was spent on specific sales problems for Haartz-Kason, Inc. This represents an average development oost of 50 cents for each gallon sold, or four times the average development oost of all industrial products. It also represents the largest sum ever spent in one year on such a restricted field of activity. It was made necessary by developments in the fabric coating field itself. Heretofore, Haartz-Kason, Inc. has made its football oovera, baby carriage topping, and raincoats by applying nitrocellulose laoquer on cloth-backed rubber sheeting. Because of production advantages, this company is now converting to the use of vinyl organosol compositions in place of laoquer. An organosol is a mushy substance of high solids made by dispersing vinyl resin in non-solvent. These compositions are applied direct to doth, thus eliminating the rubber layer and all the problems assooiated with rubber. A baking operation causes the resin particles to fuse together into a continuous film. Only time will tell whether we have been justified in this "re-tooling" expense. Even though much work has been done, more will be required to match the efforts of our competition. 0007-PTL-000925 5- A great deal of industrial interest is being shown in styrenatad alkyds. Coatings made from these alkyds dry out of dust with lacquer speed, but require from 1 to 1-1/2 hours to dry hard as compared with 30 minutes for lacquer. Styrenated alkyds produce films with better build than is possible with lacquer, but they are inclined to be brittle. They will probably fill a very definite niche in the future, but so far we have no large scale users. $2274 was spent on research work on styrenated alkyds in 1949. Our wrinkle finish volume amounted to 86,923 gallons in 1949> or about 6$ more than it did in 1948. 60# of our 1949 wrinkle finish sales went to two customers--Royal Typewriter (34,000 gallons) and International Business Machines (16,600 gallons). A total of $3819 was spent in the laboratory on wrinkle finish developments, 80$ of whioh went into work on speoifio sales problems. We developed 130 different wrinkle finishes in 1949. Hammered metal finishes (which we sell under the name of Bammertex) have offered some competition to wrinkle finishes, but we sold only 5000 gallons in 1949. We believe we have one of the best one ooat hammered metal finishes on the market. American Radiator It Standard Sanitary Corn, and Karkel Electric Products may become substantial users. $1381 was spent on solving speoifio sales problems involving hammered metal effeota. Sales of metal decorating finishes dropped from. 114,300 gallons in 1948 to 110,600 gallons in 1949* Most of the shrinkage ocourred in pigmented items. The "hottest" topio in the metal decorating field last year was non-scorch varnish (i.e. one that does not discolor during seam soldering of cans). While we succeeded in solving the problem of discoloration, the big4stumbling block has been to obtain satisfactory appearance when the varnish is applied over wet lithographic inks. One customer, Hazel-Atlas Class Co., has purchased 500 gallons of our original non-soorch varnish. Our biggest potential customer, Brooklyn Metal Decorating Co., has procrastinated in making tests of our experimental varnishes, thus delaying laboratory development work. A total of $5537 was spent on metal decorating research, of which $1731 was expended on speoifio sales problems. $3806 was spent on research, 90$ of which went into the non-soorch varnish problem. A total of 60 new metal decorating finishes were developed in 1949. In the oollapsible tube field, sales also dropped, although the decrease was not great. In 1949, we produced 15,900 gallons of tube coatings in the U. S. and 2,300 gallons in Canada; in 1948, production amounted to 17,000 gallons and 2,000 gallons, respectively. In order to insure our position in the oollapsible tube Industry, we expended $6355 in laboratory work in 1949, of whioh $4854 went into research. We developed 64 tube ooatings during the year, from 1946 to 1949> inclusive, we have spent $21,836 on laboratory work aimed at business in the collapsible tube industry. Our production during this period amounted to 85,500 gallons. This is equivalent to an average development cost 0007-PTL-000926 6- of 25 cents for every gallon we sold during the four years; If 1949 only le given consideration, eaoh gallon of tube coating production oost us 35 oeats, or three times the development oost of the average industrial item. It is hard to justify this heavy and continued development program in the light of steadily declining production. Our V. S. production has dropped 66 since 1946; our Canadian production, on the other hand, has risen steadily but constitutes a small segment of our over-all production. Our prinolpal tube coating customer. Wheeling Stamping Co.,is employing a low bake (180F.) cycle and we are supposedly receiving 95# of their business. This company has been dabbling with a high bake (300F.) cycle. Vinyl resin coatings wsre submitted for experimental use on the high bake cycle but were reported to have failed on Colgate-Palmolive-Peet immersion tests. The same vinyl ooating met with an enthusiastic response at Modern Containers in Canada and we have so far sold 200 gallons to this account. Our sale of tube coatings to other accounts--Standard Specialty & Tube Co., National Collapsible Tube Co., Peerless Tube Co., Sun Tube and Turner-White--has been negligible. Sleekoat (lubricant and protective coating for automobile springs) sales boomed during 1949. 47.000 gallons were sold to Ford Motor Co. in the U. S. and 2000 gallons were sold in Canada. Increased volume was due primarily to steady employment in the steel and automotive Industries. Sleekoat is now considered unnecessary and will not be used on 1950 oars. We have been attempting to interest spring producers in a lead powder composition as a substitute for the graphite ooating previously sold as Sleekoat, but tests are still inconclusive. Laboratory work amounted to $601 on this work in 1949. We are currently supplying 247 different oolors to Talon for uee on zippers. Conmar and other fastener aooounts buy the same oolors. 44 new oolors were established in 1949. Laboratory work on slide fasteners amounted to #603 during the year. Oae of our problem aooounts is Masell Mfg. Co. This company produces metal cabinets and file boxes which are finished by dipping in a low priced green baking enamel, in view of the price angle and the method of application, color flotation is a perpetual menace. We sold 3000 gallons of one produot developed early in 1949; we sold 1500 gallons of a later revision, and then 1000 gallons of a second revision. 3000 gallons of the latest development are on order. This final formula appears to be the most satisfactory one that Masell Mfg. Co. has purchased. Fight blaok baking enamels were produoed In sizable volume. In the 8&rgate, they accounted for 18,000 gallons of production (only 3% total industrial production). White baking enamels accounted for another 32,600 gallons of production (5# total industrial production), although the volume was spread over 30 items. Our business In the high bake white field has been slowly Increasing 0007-PTL-000927 T 7- durlng the past few years as indicated below: 1949 1948 1947 32,600 gallons 28,700 27,000 " The trend in high bake whites has bean in the direction of high pigmentation and high gloss. Ve have been hard put to meet the gloss standards established by our competitors for we have no Banbury, Baker-Perkins, or other dispersion equipment that is generally considered necessary for the production of high bake whites. Bow auoh our sales suffered because of this has never been clearly indicated. Likewise, we do not know how muoh our volume would be increased if we had superior equipment. #3210 was spent on laboratory work connected with high bake white develop* ment, #2376 of which went into researoh. Carborundum Co. problems required laboratory work which amounted to #861 in 1949* The Carborundum Co. waterproof sandpaper for the automotive Industry is how superior to the leading competitive papers and as a result, the company is obtaining more than 50)6 of the total automotive business. Our adhesives are used on this paper aa well as on other types of industrial and repaint sandpapers. Our production of Carborundum Co. adhesives amounted to only 12,500 gallons in 1949, because the Carborundum Co. started the year with an inventory of 38,000 gallons or enough material for seven months normal production. The Armstrong Cork Co., ordinarily our biggest laoquer customer, purchased only #13,000 worth of coatings in 1949. The wall tile division of this company was virtually closed*down for about a third of the year because It could obtain no Masonite (due to the Masonite Corp. strike). This fact, coupled with a changeover in colors, was largely responsible for our poor 1949 sales showing. We are currently matching the new laoquer color standards of this aocount. One big unsolved technical problem remains, i.e. the development of a suitable underooating. While a vast amount of work was done on the underooating problem in 1949, no satisfactory formula was developed. A total of #1990 was spent on laboratory work for this account, of which #1338 was covered by laboratory requisitions; the remainder was handled on a researoh basis. #582 was spent on laboratory work for other wall tile accounts. gQUIFMENT The Physloal Testing Laboratory was completely air conditioned in 1949 at a oost of about #3400. This room is now maintained at 77F. and at a R. H. of 50# throughout the year. All of the large paint manufacturers have installed similar rooms in recent years. Because temperature and/or humidity affect paint oh&racteristios, such as drying, viscosity, gloss, elasticity, and package stability, standard test conditions enable chemists to make precise studies 0007-PTL-000928 -8- of these properties. It is hoped that our room will enable as to overoome one of the most annoying features of present day eggshell finishes, i.e. their tendenoy to vary in gloss with the atmospheric conditions at the time of application. We have also adopted 777* as the standard reference temperature at whioh all viscosity and gravity determinations are made. Heretofore, only one of our control laboratories used 777. as a reference temperature; all others used 70F. 77F. is nearer the average annual room temperature of laboratory rooms than is 707. and is, therefore, easier to control. It is also the referenoe standard preferred by our industry. While this move seems like a small and inconsequential metter, it was strongly opposed and involved tedious preparatory work before our records could be changed. The following new small equipment was acquired during 1949: Laboratory size Hy-R Speed Mill, cost #485 Abbe Laboratory 6-Jar Mill, oost #347 Constant Temperature Bath, cost #150 Strobosooplo Timer for Viscosimeter, oost #20 Research work is becoming more and more complicated with each passing year. Hew and expensive testing gadgets are constantly being developed and adopted by our Industry or by our industrial customers. Hew and also expensive testing methods cure always being devised. Keeping up-to-date in laboratory equipment and testing methods is an endless job. Not the least confusing aspect of research is .the ever growing volume of literature, which has to be studied, or at least scanned, in order to keep up-to-date. Our research library now subscribes to or receives gratis 38 weekly or monthly publications. They cover the following fields: Scientific publications on paint Other scientific magazines Paint industry magazines Business or professional magazines House organs devoted to technical developments Total 4 9 7 8 10 38 Scientific books are likewise being published in ever increasing numbers. Last year, our library acquired 17 new books. We now have about 600 volumes on our shelves. Our library with its bound volumes of the four most important scientific magazines probably has a resale value of over #5000. Many of our old books are extremely valuable beoause they are out of print. Our bound volumes of "Chemical Abstracts", for example, are worth about #1500, although they probably oost us less then one quarter this amount. 0007-PTL-000929 -9- COMPLAINTS Complaint Beoord - Buffalo Faotory Tear Total Complaints Reoeived Per Cent Justified Complaint Index* 1949 1948 1947 1946 1940 1939 248 34 228 38 141 38 82 43 248 22 264 31 Number of complaints per million gallons of manufactured goodB 96 76 52 31 134 138 1949 was the fourth consecutive year in which the number of complaints and the complaint Index have risen. The one bright spot is the decline in justified complaints. The distribution of complaints by sales offices together with related data are tabulated below: Originating Sales Div. No. Complaints No. Complaint Records Reported by Sales Offices Cash Settlements i Central Western Industrial Eastern Canadian Total 115 62 60 41 7 285 (3) 91 41 0 38 __ 2 172 None 8 135.00 Not known $1440.35 f. None $1575.35 (1) Based on information in Complaint Records (2) |1293.43 of this amount went to one aocount, the Armstrong Cork Co. (3) This total does not agree with the total in the previous table, because it lnoludes subsidiary oompany products as well as Buffalomade products. With the exception of the Central Sales Division, our sales divisions registered fewer complaints in 1949 than in 1948. The Central Sales Division registered twice as many complaints in 1949 than it did in 1948. In fact, 4<# of all 1949 oomplaints originated with the Central Sales Division. The imbalance between complaints recorded by the Central Sales Division and other trade sales divisions is apparently caused by differences in office policy. The Central Sales Division registers 0007-PTL-000930 every complaint with the laboratory; the Eastern Sales Division (and probably the Western Sales Division) attempts to screen out those complaints that are obviously unjust or are due to well known oauses. Our sales offices should be guided by a single policy, but it is difficult to decide which of the two prevailing policies is better. Laboratory complaint investigations cost $2400 in 1949* If we applied the Central Sales Division praotloe to ell offices, the cost of complaint investigations would probably be double what it now is. Furthermore, additional olerloal expense would be involved. Complaints fall into three general categories: (1) those involving liquid paint--such as complaints about viscosity, working, settling, skinning, eto.; (2) those Involving the appearance of the fresh paint job--such as complaints about color, gloss, hiding, leveling, streaking, etc.; and (3) those involving performance--such as complaints about adhesion, durability, washability, etc. The 1949 soore on this basis follows: No. Per cent of Per cent Justified in Classification Complaints All Complaints Each Classification Liquid Paint Appearance Performance Total 125 134 26 285 44% 47 9 100% 45% 25 8 Performance oomplaints were few in number and few were justified. Liquid paint criticisms produoed the highest yield of justified complaints. Most of these oomplaints are tied to the keeping qualities of our products. Unfortunately, today*s paint vehloles are inherently more sensitive to temperature and age than the slow- drying vehloles of a deoade or two ago. In 1949* ten oomplaints were due to factory oarelessness--something that was unheard of a few years ago. Three complaints resulted from mislabeling; two were caused by contamination; and five were due to faulty sealing or short filling of containers. PERSONNEL 0007-PTL-000931 Labor turnover decreased to the lowest figure in ten years. The following table indicates the trend during this period: Resigned Transferred to other divisions of company Discharged Enlisted or drafted Total separations Average, Number Employees Separation Rate 1949 1948 1946 1942 1940 7 9 17 32 2 1mm 2 4 4m* 2 - 1 -1 2 - 7 9 23 61 60 57 42 55 8 55 11% 15% 40% 76% (1) 15% (2) (1) All time peak in turnover (2) Average prewar (1935-1940, Inol.) turnover was 17$ No one lias left the employ of the laboratory in five months. We are gradually supplanting young women with young men. At present, 26$ of our technical employees are women; a year ago, 33$ were women. A plan of rotating the more promising young male laboratory employees from Job to job is being tried in an effort to broaden their experience and training. LABORATORY EXPENSE The oost of the laboratory in terms of our over-all production and sales is shown below: Cost Of Research and Cost of Manufacturing Formulating (1) _______Services 1949 1948 1940 1949 1948 1940 Per gallon of Buffalo Factory Production Per gallon of Combined Buffalo and Fort Frie Faotory Production 4.3* 3.4* 3.7* 4.0* 2.7* , (2) 2.2* (2) As per cent of Dollar Value of Sales of all products made at Buffalo and Port Brie 1.5$ 1.3$ 1.8$ (1) Research and Formulating costs exclude that portion of paint work whioh benefits subsidiary companies, but includes oost of paint work for benefit of Fort Frie faotory. (2) Prior to 1947, Fort Frie production control was handled at Buffalo but control oosts were not segregated to show cost of work for Buffalo faotory only. All research and formulating of Canadian produots is still performed in the Buffalo laboratory. 0007-PTL-000932 12 Prom the above table, it la obvious that the ooet of research per gallon of product ion hae risen appreciably since 1948--due to shrinkage in production as well as to increased laboratory operating expenses. In terms of sales, research cost only slightly more than it did in 1948, but less than it did in 1940. The actual cost of operating the laboratory in 1949 was #228,133 or 9% more than in 1948. The increase was due almost entirely to salaries and wages. Money spent on laboratory work was distributed as follows: Activity 1949 1948 1945 Research Speolal Sales Problems (Laboratory Requisitions) Manufacturing Servioes Total # 67,700 # 60,800 # 30,000 ,600 *800 60,800 87.800 59,000 61.100 #228,100 #209,400 #150,100 The above figures indicate that expenditures on researoh have mounted appreciably since 1945, when of course our researoh activities were curbed by laok of personnel. Expenditures on special sales problems have remained fairly constant. Work for the benefit of the faotory is also mounting steadily. Part of this is explained by the faot that the laboratory is today doing a considerable amount of work that probably should be done by the faotory. Of the #63,600 spent on special sales problems in 1949, 77% or #49,100 was paid by the sales divisions in ths form of laboratory charges. In 1948, 82% of special sales work underwritten by the sales divisions. Of the #131,300 spent on researoh and sales problems in 1949, 62% or #81,000 directly benefited the Industrial Sales Division. Another #15,000 was applied on paint problems for our subsidiary companies and our Port Erie faotory. The remaining #35,300 was applied on research and formulating problems ooaoerned with Pratt & Lambert trade sales specialties. The money spent in solving industrial sales problems in 1949 amounted to an average of 12.7 cents for every gallon produced at our Buffalo and Port Erie plants. In 1945, this figure was 5.8 cents. Laboratory effort for the benefit 6t industrial sales in 1949 represented 4*5% of the dollar value of our combined TJ. s. and Canadian industrial business, the lion*a share of whioh was of course done in the U. S. An artiole published in the December 1949 issue of the "Official Digest" implied that two firms, Rinahed-Heson and Grand Rapids Varnish Co.--both aotive in the industrial field--spent 4% of each sales dollar for laboratory development work. Our 4*5% figure ie higher than this average, and there is little doubt in my mind that we are now doing more laboratory work aimed at the cultivation of industrial easterners 0007-PTL-000933 -13- than is justified by current industrial sales. If Industrial sales do not increase in 1950, it is my opinion that we should decrease the size of our industrial laboratory by at least one employee. Our industrial business is peculiar in that we seem to go after so many accounts that have unusual problems. We have few aooounts that buy simple staples, like white baking enamel or plain blaok enamel. Possibly the white and blaok business is too simple, and is therefore highly competitive and unprofitable by our standards. Maybe our standards are false. We certainly did not make the industrial sales profit we thought we did in 1949 when consideration is given to the #44,000 whloh was absorbed in faotory oosts to cover researoh work benefiting the Industrial Sales Division and the additional subsidy of #2280 (as a monthly rebate of #190) which was also absorbed in faotory costs. By contrast, laboratory work on trade sales specialties seems unduly modest. It amounted to 1.6 cents for every gallon of these specialties produced at the Buffalo and Fort Erie plants (paint excepted). In 1945, the corresponding figure ms 1.4 cents. In 1949, laboratory effort on specialty items represented 0.6% of the dollar value of combined U. 3. and Canadian trade sales, paint excepted, quoting again from the December 1949 "Offioial Digest", 2% is commonly accepted as a sound figure for trade sales laboratory work. If this yardstick is aooepted, we appear to be farther out of line on trade sales work than we are in industrial work, but in the opposite direction. GENERAL COMMENTS The effectiveness of laboratory work might be improved if some solution oould be found for the following problems: f 1) The laboratory lacks dose knowledge of trade sales painter problems and customer needs. Laboratory personnel has virtually no direct contact with our customers. The weaknesses of our products remain unknown unless they are serious enough to be the subject of complaint. The laboratory does not have any speolfic knowledge of what our customers need, unless that need becomes so urgent that sales are affeoted. This ignorance of the oustomer side of our business is a missing link in our laboratory operations. It could be corrected by enabling selected laboratory personnel to spend a small percentage of their time in the field (with our salesmen). If such a plan were to be successful, it would require the sympathy and support of the sales organization. It would cost at most #2000 per year, but it oould result in new ideas worth many times this amount. One successful oompany (Olin Industries) allocates 12% of its laboratory budget to so-oalled market surveys by its researoh group leaders. 0007-PTL-000934 -14- 2} Our laboratory has grown mlddle-eged and is also a victim of excessive inbreeding. We need fresh ideas and new approaches to oar formulating problems. It is an aooeptsd fact that new scientific discoveries come predominantly from young men between 25 and 35 years of age.' The average age of our 23 key laboratory employees is 39 years, only four of these men are under 35 and three are 32 to 34 years of age. If we do not adopt a policy of hiring one new and young chemist of high oalibre each year for the next few years, our laboratory in 19o0 will be made up almost entirely of personnel past their peak of creative effort (or they will be inexperlenoed, if hired at that time). Even though we hire a new man at age 25. then give him five years of training and experience, he has only five years left for his best creative endeavors. The only real objection to the above program is one of cost. Since we have little labor turnover, a new employee would be an extra employee--at least until suoh time as some other employee resigned or was discharged. The program would add $3000 to the payroll during the first year of operation, but the annual oost should taper off in subsequent years due to normal turnover. Delaying this program will not hamper us in the immediate future, but we will pay a penalty in another decade. 3) One of our most serious problems is the inadequacy of field testing facilities for evaluating new trade sales formulas and formula changes. Our present practice is to send samples to our branoh offices and/or our subsidiaries for oomment. These organizations are rarely able to persuade painter customers to make tests under ideal conditions (i.e. side-by-side comparisons of the experimental paint with the standard paint on a properly prepared surface with proper equipment) or even in a halfsatisfactory way (i.e. with a complete report on the more Important features, suoh as working, sagging, drying, gloss, eto.). After waiting weeks or months, we receive conflicting and sometimes misleading reports that help little in making a sound business decision on the new formula. It is difficult to eliminate personal prejudice when the sales office and/or the cooperating painter know the Identity of produots being tested. The laboratory itself has been equally unsuooessful in arranging painter tests, although laboratory teats are "blindfold" tests. Unfortunately, laboratory tests have to be bootlegged to avoid offending our local distributor and our local salesman, neither of whom likea the idea of giving away samples in return for a test. 0007-PTL-000935 -15 SUMMARY OF LABORATORY WORK 1949 New Products Developed 1,603 Sales Problems Submitted to Laboratory 1,790 Sales problems Reported 1,811 New Researoh Problems Assigned 60 Research Problems Completed 66 New Raw Materials Investigated 353 Raw Material Shipments Tested 2,156 Batches Tested by Buffalo Control Labs. 16,365 Batches Tested by Fort Brie Control Labs. 2,135 Service Calls Made by Technical Employees 139 Technical Department Bulletins Issued Paint Manufacturing Bulletins Issued Formula Analysis Bulletins Issued 63 53 33 1948 1,632 1.810 1,815 50 85 342 2,438 f 16,783 1,938 146 56 58 None'*' *New activity undertaken in 1949 0007-PTL-000936 February 23, 1950 T l a b o r a t o r y r s po r t f o r 1949 * f / 0007-PTL-000921 N15493