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Who foots the tab for lead-free gas? Laws banning lead are near. Whether oil or auto men suffer most rests on timing Leaded gasoline seems sure to go the way of the running board. This week, even President Nixon called for its elimination, adding a strong voice to an already powerful chorus. "Manufac turers are not only developing devices now to meet present and future federal emission standards, but are also, on their own initiative, preparing to put on the market by 1972 automobiles which will not require and must not use leaded gasoline," the President said. But auto makers and oil companies, bedmates for years, are squabbling over who should foot the tab for doing away with tetraethyl lead, which they created jointly 47 years ago to boost the octane rating of gasoline. Over the past few weeks the auto makers have tried to toss the hot po tato to the oil industry by inviting ma jor refiners to start taking lead out of gasoline so that Detroit could start building smog-less cars. With leaded gas, the auto makers said, cars cannot be made clean enough to meet Califor nia's 1974 anti-smog regulations. But last week, Atlantic Richfield Co. flipped the potato back in Detroit's lap. The company said it would produce lead-free gas in California next year, provided that enough cars were around to burn it. Within a few days, Getty Oil, Union Oil Co., Standard Oil Co. of California, and Standard Oil Co. (Ind.) said they, too, would have leadless gas available for the cars that would need it. Marking time. Now both industries are left waiting for California or Washing ton to mandate the next move, one that the oilmen figure could cost over $4-bil lion. The transition to lead-free gaso line will mean a major technical re structuring of at least one of the indus tries. Both have been committed heav ily to the use of tetraethyl lead since it was first developed in 1921 to elimi nate engine knock. Today, most automobiles have high compression engines that require ei ther 94 octane (regular) or 100 octane (premium) fuel. Oil companies produce high-octane gasolines in quantity by adding lead to gasoline with lower oc tane rating. Removing the lead would lower the octane rating at the pump by about six points, forcing auto makers to redesign engines. On the other hand, if auto makers insist on using engines that depend on a high-octane, lead-free gasoline, oil companies would have to use more costly refining processes to produce such leadless fuel in required quantities. Legislators and government officials are the ones who will probably decide who will do what to remove the lead, and they are now mulling anti-lead laws. Like it or not, the oil and auto in dustries dare not work out a formal agreement because the consent decree that ended a Justice Dept, suit against auto makers last fall enjoined the com- Henry Ford II: He has needled the oil companies to get the lead out. panies from exchanging information about smog controls. Target. For auto men, the removal of lead has long been a goal. Chemicals that accompany lead additives, such as hydrobromic and hydrochloric acids, corrode parts of the engine, muffler, and tailpipe, shortening a car's life. Recently, engineers working on anti pollution systems to meet California's 1974 emission standards found that lead had another bad side. It tends to coat the catalysts used to break down pollutants in mufflers, cutting the ef fectiveness of a catalytic muffler to only a few thousand miles at most. Charles Heinen, chief of emission con trol for Chrysler Corp., said complete removal of lead from gasoline was es sential if Detroit opted for that type of muffler, and the American Petroleum Institute agreed. While none of the Big Three auto makers admits yet to having a catalyst that is practical even with lead-free gasoline, each hopes that one can be de veloped. However, others claim that suitable catalysts are available now, and that removing lead would let them work better. John 0. Logan, president of Univer sal Oil Products Co., says UOP has an oxidizing catalyst that would break down hydrocarbons and carbon mon oxide to meet California's 1974 levels, and that the catalyst would last for 50,000 mi. on nonleaded gasoline. In Monrovia, Calif., Milton Farber, presi dent of the Anti-Pollution Corp. of America, says his catalyst would meet the 1974 levels on hydrocarbons, carbon monoxide, and nitrogen oxides for a car's life on lead-free fuel but would last only 12,000 mi. on leaded gas. Strong case. Lead poses other problems in efforts to produce a low-pollution car. Recirculation of exhaust gases into the combustion mixture to cut nitrogen oxides is more promising with non leaded gas. Afterburners to cut hydro carbons and carbon monoxide would also last longer with leadless fuel. The case against lead is made even stronger by the threat of federal regu lations to control emissions.of'particu late matter. Inorganic learf''accounts for a large portion of the solid material that comes from a car's exhaust. "If stringent control of particulates be comes a federal goal, as we expect," says General Motors President Edward N. Cole, "we know of no way presently that such control can be accomplished with lead in-gasoline." Only Ethyl Corp., which derives 102 BUSINESS WEEK: FEBRUARY 1A. 1970 TECHNOLOGY DSW 552157 STLCOPCB4090574 CalComp even makes software for the softwear makers. CalComp makes terrific plotters, all right. But it's really our software that makes our plotters the greatest. You see, nobody else offers you what we do. Over 3,000 programs of basic and functional software. Plus applications. Like our new automatic pattern grading for apparel makers. (Which figured out these paper patterns for different-size bikinis.) Like our general contouring pro gram. For precise maps of oil fields, oceans, weather and stars. Like a business program that generates financial graphs. An other that puts out PERT schedules. Another for CPM schedules. And still another that plots the flowchart of any other computer program. Like a subdivision mapping pro gram that rapidly plots lots of lot plots. Like a 3-D program that can actually draw three dimensional surfaces from any angle. And in any perspective. Even in stereo. And the best part is, CalComp software is ready and available for all kinds of CalComp plotters. Including our basic CalComp drum plotters, giant CalComp flatbed plotters and even speedy CalComp microfilm plotters. In fact, CalComp is the leader in computer graphics. With sales, service and software support in 34 cities around the world. So if you need help with some kind of graphics prob lem, call your nearest CalComp man today. You never had it so soft. TEACH YOUR COMPUTER TO DRAW. DSW 552158 STLCOPCB4090575 Witha Kodak premium, you get more than a premium. Marketing Representative in your area. He'll work with and for your marketing team. Provide you with the right incentives for consumers. Dealers. Salesmen. Employees. And then help you with all phases of the promotion. Your Kodak Incentive Representative will show you our no-fuss way to help make your next program a success. If you don't already know our man in your area, write: W W Tyner, Director of Premium Sales, Eastman Kodak Company, Rochester, N. Y 14650. 104 BUSINESS WEEK: FEBRUARY 14,1970 h h about 40% of its $509-million annual * sales from lead additives and share? 1 about 80% of the market with Du Pont, is making a strong case to keep lead in gasoline. Ethyl believes that Detroit can meet smog standards without tak ing lead out. To prove it, its engineers have adapted a "lean reactor" car which the company says would add less than $200 to the basic cost of a car. Cal ifornia's standards can be met, says Ethyl, by using a lean fuel-air mixture, by timing ignition precisely, and by us ing the excess oxygen to oxidize hydro- California may ban lead in gasoline completely by 1974 carbons in the car's exhaust system. Motor City's mood. Nonetheless, Detroit is inclined to insist on leadless gasoline while it pursues technology towards catalysts, recirculation, and after burners to meet the 1974 California limits. These standards likely will be come twice as tough in 1975. "The handwriting is on the wall," says Dr. A. J. Haagen-Smit, chairman of California's Air Resources Board. "Lead will go." The question remains under what conditions. The timing of lead's demise will be decided in part next month when a bill to phase it out in California comes be fore committee. The measure would trim lead additive levels from 2.5 grams per gal. down to nothing by Jan. 1, 1974. Most oil companies now use about 2.5 grams per gal., while only one--American Oil Co., a subsidiary of Standard Oil Co. (Ind.)-markets a completely leadless premium fuel in 25 Eastern and Southern states. Maneuver. Last December, the Automo bile Manufacturers Assn., at a state as sembly hearing, suggested eventual re moval of lead but declined to set a timetable. However, it is to the auto makers' advantage to support complete removal by 1974. Given that short a pe riod, oil companies would have to come up with a high-octane, leadless gasoline because about 37% of the state's cars then still would require a lead-free premium fuel. Detroit's ultimate goal is to continue manufacturing high-compression en gines requiring high-octane, but leadfree, fuel. But it will sacrifice at least some performance of high-compression engines'for a time. In a letter late last month to chairmen of 19 oil companies, Henry Ford II of Ford Motor Co. sub tly tried to win a concession: "I would . . . appreciate knowing how soon you think lead might be removed from pre mium-grade fuels so that we might again build new cars with more ef ficient engines." A statement by Chrysler Vice-President L. B. Bornhauser put it more bluntly. "A most sig- DSW 552159 TECHNOLOGY STLCOPCB4090576 800-325-3535 Sheraton Hotels and Motor Inns announce the reservation number to end all reservation numbers. 800-325-3535 The one reservation number for all Sheraton Hotels and Motor Inns in the world. 800-3256535 Call it free.Anytime from anywhere in the Continental United States. 800-3256535 Call it free anytime and you'll get an immediate confirmatioa 8006253535 Call it... or your travel agent will call it for you. jf-' CS) Sheraton Hotels & Motor Inns 800325-3535 A WORLDWIDE SERVICE OF ITT 5^60 OS'N STLCOPCB4090577 LOCATE YOUR NEW MANUFACTURING Kintpport OPERATION Bristol Johnson City KENTU^V-V'lnji^n ^ '^JfjQSPORTjSBjnpS^J ^nEl\lN ESS^E^joiXs^cirl /KNOXVILLE frT\ 10. CAROLINA 1 EVALUATE THIS AREA IN RESPECT TO YOUR SPECIFIC NEEDS WITH OUR EXPERTS DEVELOPED INDUSTRIAL PARK (750 ACRES) VOCATIONAL TRAINING (AT NO EXPENSE TO YOU! HIGHLY PRODUCTIVE LABOR LOW STABLE TAXES EXCELLENT LIVING CONDITIONS SULLIVAN COUNTY INDUSTRIAL AGENCY P.O. Box 365 Blountville, Tann. 37617 people finders for business and industry Need help? We are experts in matching people to jobs. And because we are nation wide our list of talent is huge. That's why we get results. Check with our agency in your City . . . and leave the searching to us. FREE! Just off the press, our new folder "People Finders" tells how we operate. Write. BUSINESS MEN'S CLEARING HOUSE, INC. OFFICES IN PRINCIPAL CITIES General Offices: 140 S. Dearborn, Chicago, III. 60603 A General Employment Enterprises Service 106 BUSINESS WEEK: FEBRUARY 14. 1970 nificant contribution that could be made by petroleum companies would be an effort to maintain present oc tane levels without the addition of lead," he said. The oil industry shudders at elimi nating lead overnight while keeping octane ratings high. To do so means blending more aromatics, which are high in hydrocarbons, with the lower- grade base. It could cost $4.2-billion na tionwide to change the refining pro cess, the American Petroleum Institute figures. The increase in operating costs would amount to slightly more than 25 per gal., API estimates, but the price on the pump could rise 45 a gal. or more say other observers. But Universal Oil's Logan claims that such figures are wrong and "self serving." He says the increased cost to the refiner could be lower than 15 per gal. He calls the California bill a "sen sible approach," and he claims that sev eral oil companies already have spoken to him about phasing out lead. Of course, Logan stands to benefit doubly if lead is removed from gasoline: He could sell both his octane-boosting technology to refiners and his anti emission catalytic converter to auto makers. Impasse. As things stand, both the oil companies and auto makers are at a stalemate and are largely at the mercy of state and federal legislators. The House subcommittee on public health may soon ask the oil companies to testify on the issue of leaded gaso line. Representative Edward Koch (D- N.Y.) has introduced a bill to ban the transportation, distribution, and sale of leaded gasoline in interstate com merce. It would be effective one year after enactment. And Representative Leonard Farbstein (D-N.Y.) has in troduced several bills aimed at elimi nating lead. One would deprive com panies selling leaded gasoline of their oil depletion allowances. Members of the California assem bly's transportation committee also will collect more information about phasing out lead. Prior to statements by Atlantic Richfield and Chrysler last week, the measure to eliminate lead completely in fuel by 1974 had a 50-50 chance of reaching the desk of Gover nor Ronald Reagan, reports one in sider. "Now the odds for passage have gone way up," he says. And President Nixon's address on the environment this week should make the odds even better. In the long run, of course, the con- sj^mer will help pay for eliminating leacTas-well as share in the benefits. It now appears an even trade-off: Higher-priced, lead-free gasoline will mean longer lasting smog devices, less wear on engines, and a longer life for cars. ' Italians try hand in a tough market Semiconductor technology is a singular American forte, and it would seem folly for a foreign company to try to crash the crowded U. S. market. But the Italians are coming anyway. The company is Society Generale Semiconduttori (SGS), an integrated circuit, transistor, and diode maker that collected around $40-million in sales last year, mostly in Europe. Within a year, SGS expects to add $3- million in sales in the U. S. market. Advantages. The Italian company holds a number of trumps that make it a serious contender. It is owned by Oli vetti, an Italian operation that has learned to master the U. S. terrain. And many SGS products are as ad vanced as the best made by Fairchild Camera & Instrument Corp., which un til 1968, held a one-third stake in SGS. The Italian company still has access to some Fairchild designs through licens ing agreements. Further, SGS has put up an assembly plant in the Far East* where the major U. S. companies also operate plants, to get the benefit of low-cost labor. So, SGS should be able to compete on price. Most important, SGS has recruited a respectable U. S. sales agent. Rather than go through Olivetti, which is in experienced in semiconductor market ing, SGS latched onto Varadyne, Inc., a 316-year-old Santa Monica (Calif.) elec tronics company. Renato Bonifacio, SGS group manu facturing director, says he likes Vara- dyne's rapid growth. Its fiscal 1968 sales were $833,000. For the year ending June 30, 1969, they were $4.6- million. Varadyne President Charles Tobias vows sales will be "in excess of $15-million" in fiscal 1970. Complementary. Tobias and Bonifacio add that because their product lines are complementary each gets broader mar ket opportunities. Varadyne specializes in linear integrated circuits, which shape or mold electrical, signals. SGS carries a broad line of digital circuits, which operate like switches, turning signals on and off. Such circuits, used heavily in computers, far out-sell linear devices. The linear market, now ex panding slowly, will blossom when ra dio and television set makers switch from tubes and transistors. While Varadyne makes several types of linear devices, it does not make many designed -for consumer products. But SGS does. DSW 552161 zCHNOLOGY STLCOPCB4090578 Wilbert Burks' budget seems bigger since his Quick Copies Center cut copying costs. Wilbert Burks is Commissioner of Printing and Reproduction for the city of Cleveland, Ohio. Like any other manager in the private sector, he works within a budget. When ever costs can be cut within the budget, there's more money to be spent elsewhere. To Wilbert Burks, cutting his copying costs meant ex pansion and improvement of his department's capabilities. That's why he looked into a new idea from A. B. Dick Company--the Quick Copies Center. After replac ing his two leased copiers with the new Quick Copies Center, Mr. Burks found that this system pro vided a much more economical way of doing jobs requiring more than ten copies. He also discovered that his Quick Copies Center is faster. Providing faster service at less cost has made his department more versatile, too. And the word is getting around. Now other departments in the city government submit jobs to Print ing and Reproduction which ordi- AB DICK narily were given to outside printers at greater cost to the city. This increase in business has en abled Wilbert Burks to purchase the Quick Copies Center he had originally planned only to lease. And he is considering the purchase of yet another Center just to handle the increased business. As a manager, you're probably faced with the high cost and delays in making copies too. If so, send for our free brochure, "It's Time to Take A Second Look." Write A. B. Dick Company, 5700 West Touhy Ave nue, Chicago, Illinois 60648. DSW 552162 STLCOPCB4090579