Document Qgrn2nvo88RDjBmaM2qxvRKgE

FRICTIT1 1'ATI:r.'.IALS ST.A~TD.t'..i.\.DS Ii.!STI'i'UTI:, IJC., 2-210 ItOUTE i/4, PA?.AiillS, :;.J. 07652 :1!:i.iUTES <)F 7IIE A:.UUAL ~IEZTii.TG of the FRICTIO:i ;!A'l'ERIALS STA:.;J)ARDS Ii.iSTITUTE, Ii.!C. Pednesday and Thursday, June 13 and 14, 1979 at Ocean ~eef Club, Key Largo, Florida I:.E~:BERS PRESE:i.iT REPRESEHTATIVES Abex Corporation Bendix Co~poration Brassbestos llanufacturing Corp. Carlisle Corporation General i:Iotors Corporation Lear-Siegler Inc. _iuturn Corporation P. T. Brake Lining Company H.K. Porter Company Raybestos-!.!anhattan Inc. ReddaHay ~1anufacturing Co. Thiokol Chemical Corporation S .:~. ~Tellrlan Corporation ~fueeling 3rake Block R. L. Cutler F. E. Hessier u. Simon R. Perritt (Proxy from E. Zacharias) R. J. Kick D. J. Oeilvie J. H. Greenen Stuart Comins ~J. 11. Sleeth R. R. ~Ioalli J. H. :tloore J. P. Gallagher G. A. Carrigan L. Bureess PROXY AVAILABLE Scan-Pac i:1fg., Inc. :r. A. Scandrett (Proxy to E. w. Drislane) OTHERS ?RESEi.JT Abex Corporation R. E. ~Ielson (6/13) Bendix Corporation :.ieavy Vehicle Systems Group R. E. Elliott Delco-li:oraine Division R. E. Kettering ~uturn Corporation J. L. I1ellatf H.~. Porter Company R, I!. Hartman Raybes tos-l!anhattan, Inc. D. E. Cunningham 11. J. Russell Redd~1ay ~!anufacturing Company F. H. Barton J. E. Clegg S.I<. Hellman Corporation R. Kaminski c. Hilson TJheeling Brake Bloclt It. Burgess G. Stratton Robert P. Gorman, Esquire J. Z. Jackson Distinguished Guest J. L. i1cGovern, Jr. Federation of Eurooean l1anufacturers of Friction :laterlals (FIDlFH) R. Join Friction :raterials Standards Institute I:. U, Drislane Hr. :ressier, President, called this meeting to order at 1:45 P.rt. FMSI 02157 -2- Jun~ 13 & 14, 1979 _:ll:UTF.:S :.:-F JlJJi.': 2C-29, 1')78 ~!EETI!~G The minutt!S of the meeting ~eld June 28-29, 1978 had been distributed. :ro corrections Here suggested, Upon motion duly made, seconded and unanimously passed, it was; P~SOLVED: That the minutes of the June 28-29, 1976 ~teeting be accepted as ~~ritten. PRESIDEliT 1S REPORT Hr. Hessier, President, reported on actitivities for the 1978-79 fiscal year. lle commented on publication of the "Friction Uaterials Hork Practices Guide, 11 the History of the Institute that was prepared immediately after the June 1978 lleeting, and publication of the "1979 Brake Block Identification Catalog." !!r. !lessier also noted the grantina of trademark registrations to Ft1S and FHSI and resolution of a question concerning the Consumer Product Safety Commission jurisdiction on which a question was raised at the June 1978 Ueeting. It uas noted that the National Hitt,hway Traffic Safety Administration has responsibility for automotive friction materials regulations and these are not under the jurisdiction of the Consumer Product Safety Commission. Hr. Hessier also addressed questions that uould be raised at the meeting concerning an "Asbestos Health Hazards Compensation Act" and recent contacts by the Institute l1ith the Toxic Substances Control Office of the Environmental Protection Agency. He thanked those who had contributed of their time in furthering the interests of the Institute and the industry. Upon motion duly made, secondttd and unanimously passed, it was; RESOLVED: To accept the :President's Report as written. REPORr OW BOARD OF DIRECTORS ACTIVITIES This report covers activities of the Board of Directors since the Annual Uembership Ueeting in June 1978. It 7as reported at the June 19, 1978 session of the~ Hembership Meeting that the Board of Directors had elected the following Officers for 1978-79 terms: Hr. Francis E. Uessier, :President; Hr. Ronald R. Uoalli, Vice-President; Hr. Hilliam F. Messier, Treasurer; I1r. Edtfard H. Drislane, Secretary. At the Board of Director& Ueeting it was voted to retain Gorman and Cole as Legal Counsel for the 1978-79 year. The Board of Directors voted to accept the expens~ budget of $91,250 for the 1978-79 fiscal year. The Board of Directors voted to retain the prior year's fee formula for the 1978-79 year. During the year, the Board of Directors took several actions by mail ballot. In addition, they reviewed and made recommendations on other items of concern to the~ Institute. They asked the Asbestos Study Committee to review the proposed "Friction l1aterials Uork Practices Guide" and make reco~ndations to the Board of Directors. Acting on recommendations by the Asbestos Study Committee, the Board voted to proceed with publication of the "Friction ~Iaterials Work Practices Guide. 11 The Directors reviewed FMSI 02158 :!Il.WTES OF Tl~.l: AITi.IUAL ~~EETillG -3- June 13 & 14, 1979 a report on the Ft1SI Qualified Enployel:! Pension Plan. Tht!y revieHed the delinquent receivable fron the Hayes-Albion Corporation and recommended pursuit of collection !"lithout use of a collection agency or legal firm. They asked Counsel to revieu the Consumer Product Safety Act to see if asbestos-containing brake linings nere a consumer product under definition of the act. Acting on recommendations of the Asbestos Study Committee and Legal Counsel, they decided that representation would not be made to the Consumer Product Safety Commission as regards recall procedures for brake linings. The Board of Directors voted to accept the name changes of t~-10 Regional Hembers. One !Tas Francisco Stedile, S.A. of Brazil to Fras-Le, S.A. The other ~as Rusco de Colombia to Colfriccion, S.A. The Directors concurred on investment of Institute funds in U.S. Treasury obligations and they voted to transfer funds from a savings account to the Hhitehall Honey Narket Fund. The Directors concurred in extending an invitation to Hr. J. L. iJcGovern to address the Friction Materials Standards Institute at the June 1979 i1eeting. The Directors reviewed procedures as regards granting others permission to use the Institute copyrights and trademarks. The Directors voted to accept the application of the Guardian Corporation of Brighton, !1assachusetts to serve as an Active Hember of the Institute. At the Board Heeting held on June 12, 1979 reports by Officers and Committee Chairmen rere read and resolutions toJere passed accepting the reports. There were two recent applications for membership trhich had been considered by the Hembership Committee by mail ballot immediately prior to the meeting. One was an application for Regional r:embership from Canadian Distex Corporation of Canada and the other an application for Licensee r,Iembership from Lima International Parts of Lima, Ohio. Both of these applications had been recommended for acceptance by the }1embership Committee and were also recommended for acceptance by the Board of Directors at that meeting. Upon recommendation of the Delegate from Auto Friction Corporation, the Board voted to transfer membership of Auto Friction Corporation to P.T. Brake. Lining Company, Inc. The Directors voted to pursue ~ collection through Legal Counsel of the $850 receivable fron Hayes-Albion 8orporntion. This Hayes-~lbion receivable is fran their failure to pay the last hnlf of its annual fee in the year it resigned its membership. In the fee formula area, the Directors indicated that Friction Materials Corporation of Israel (doing business as lnterfriction) is participating in the brake lining category as tfell as in the clutch facing category. The Directors stated that participation in a category, for Regional Member fee formula purposes, is accomplished if the Regional l1ember offers to sell a product using the r-!SI copyrights or trademarks. They directed that Legal Counsel tighten up the description to indicate participation where a Regional l!ember is offering that product for sale. The Directors voted for a new fee schedule which approximates a 10% increase over the 1978-79 schedule. The schedule is as follatoJs: Activel1embers: $1,050 Basic Fee plus $700 per category Regional Hembers with Active Member rights: same fee:: as Active }!embers Regional ~lember Regular: $1,450 Regional ~1ember Association: $2,400 Licensee: $550 FMSI 02159 i:IlllUTES OF THE Aili.lUAL MEETING -4- June 13 & 14, 1979 Upon revie,_.ing the report of the Public Ralations Cotm!littee, it ras recommended that the Institute offer the "Friction Hnterials Work Practices Guide'' to APRA, ASIA AHD CFS for their distribution. After review of the Data Book and Technical ~eport, the Directors referred a question as regards listing of metallic lininc rel~nses to the Data Book & Technical Committee. In the asbestos area, the Directors discussed EPA's proposed Voluntary Action Program for friction materials. They reviewed the letter that was received from Johns-i:lanville suggesting Institute cooperation ~o~ith the Office of Toxic Substances Control. They also discussed the Illinois Insitute of Technology (IIT) Research Institute report which alleged that a major source of asbestos exposure in the environment comes from exposures in brake repair shops. They also reviewed a legislative draft for an "Asbestos Health Hazards Compensation Act." After considerable discussion the Board directed that the Asbestos Study Committee develop plans for an Institute response to the Board concerning both EPA's Voluntary Action Program and the legislative draft on the Compensation Act. As regards the Institute Development Committee, the Board of Directors considered expansion of the Institute to accomodate manufacturers ~mo did not manufacture friction materials. It "as decided not to expand the Institute to include manufacturers such as Aimco as Active Hembers. As regards the annual meeting, the Board of Directors decided not to extend invitations to wives to attend the next meeting and selected the Homestead in Hot Springs, Virginia as the site for the June 1980 Meeting. There were discussions concerning enforcement of the Institute's copyrights and trademarks and it was suggested that the Institute again extend an invitation to Virginia Friction Products to join the Institute as an Active llember. The Board reviewed a report by the Secretary concerning changes in insurance and information on an "Errors and Omissions" !>Olicy. An application had been filed for an "Errors and Omissions" policy but no action l-7ill be taken until the coverage and the rates have been ascertained. The Directors reviewed a letter from Legal Counsel concerning Officer and Director ~xposur~ and directed that Counsel draw up a plan for indemnification of Officers and Board Hembers for tort liability to third persons. The Board was advised that the trust agreement for Hiss Duschek' s pension had not been prepared prior to the Board r:Ieeting. Counsel advised that ht: had draft copies of this trust agreement ~dth him. However, these would have to be revised as the Board voted to increase the pension payments to !Iiss Duschek from $6,000 a year to $6,600 a year. The Board reviewed a report by the Secretary on his attendance at the Federation of European lianufacturers of Friction Materials (FEMFM) meeting in England in Uay this year. The foregoing is a report on activities of the Board of Directors since the June 19 78 Ueetings. Upon motion duly made, seconded and unanimously passed, it lTas; RESOLVED: To accept the Secretary's report on activities of the Board of Directors for the 1978-79 fiscal year. FMSI 02160 ~:IJUTES OF TK!!: A.'mUAL :mETING -5- June 13 & 14, 1J79 TREASUP.ER 1 S REPORT Hr. H. F. a~ssier is Treasurer of the Institute. 11r. Messier indicated that because of other commitments at B~ndix he would be unable to attend the 1979 Annual Ueeting and asked that the Secretary read his report. The Secretary read the Treasurer's report. In summary, the report noted that the Institute projected about $2,000 excess of income over expenses for the 1978-79 fiscal year. The report included a conventional balance sheet and an income and expense statement, along with an analysis of variances from budget. The report concluded that the Institute had a healthy financial position. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the Treasurer's Report as written. BRAKE PERFORHAL'lCE STUDY C011NITTEE REPORT Hr. Nelson, Chairman of the Brake Performance Study Committee, delivered this report. He reported on the review and suggested changes the committee made to the Defense Construction Supply Center concerning Federal Brrute Lining Specification HH-L-361. Suggestions were made to the Defense Construction Supply Center on friction and wear levels using the J-661 quality control procedure. The Chairman reported in detail on the recommendations that the Committee made to the Defense Construction Supply Center on this specification. In addition, he noted the changes to DOT 121 (Air Brake Systems Standard) and a suggestion and recommendation that the NHTSA interpretation of the court decision be circulated to the lfurnbership. His report covered the NHTSA' s five year plan for rule-making ~7hich had several items concerning aftermarket brrute linings and automotive brake systems. In addition, iir. aelson mentioned the Vehicle Equipment Safety Commission's V-14 Regulation for a brake wear warning device, and a recommendation made to the Vehicle Equipment Safety Commission concerning the height of the lining manufacturer's identification on the edge of drum brake linings. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the report of the Brake Performance Study Committee as tnitten. FEDERATION OF EUROPEAL'i IlA!IUFACTURERS OF FRICTION UATERIALS (FEMFU) It was suggested that with completion of Hr. Nelson's report that it would be appropriate to discuss activities in Europe at this time. The Secretary lfas asked to read his report on his atte~dance at the European Federation's meeting in England in Hay 1979. In this report, he reported on their Permanent TechnicalComcittee's activities on correlatiOn of vehicle tests and Chase machine tests. He indicated that there ~1ere some areas of correlation but difficulties with correlating the 80 MPH hot friction test. The Secretary reported to the Federation on activities in the United States including items such as the UHTSA five year plan, publication of the Institute's "Friction Uaterials l?ork Practices Guide," a legislative draft prepared by an industry group for an "Asbestos Health Hazards Compensation Act," and the general subject of asbestos in friction materials in the United States. FMSI 02161 :lliWTES OF THE AlTHUAL MEETnW -6- June 13 & 14, 1979 In this report, the Secretary noted Tork being done by FEllFl::t experts for the International Standards Organization (ISO). Other items noted v1ere a warning sign for asbestos materials in Great Britain, and a slide program entitled "Asbestos--Fighting a Killer," promoted by an international union. After the Secretary's report on activities at the Federation's meeting in Nay, lfr. Robert Join of the Federation amplified on certain activities in Europe. A question was asked about the United Kingdom label on friction material packages in the context of a labelling scheme for all carcinogenic products. The possibility of extending the United Kingdom's labelling suggestions to the European community was noted. In discussion, it was noted that in the United States the OSHA asbestos warning labels are on most US products. The British system has a special logo or symbol, ~~hich is a circle a in red colors. Mr. Join indicated that he would send a copy of this suggested symbol. Further, Ur. Join commented that the "OE only" concept in Europe is dying, and that replacement friction material manufacturers' views are now being accepted. Mr. Join was complimented on his Federations's work on correlation between Chase friction machine tests and vehicles, and it was indicated that this is a difficult and expensive program. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the Secretary's report on the Federation of European Manufacturers of Friction Haterials (FEt.fii'M) Meeting. iIBERSHIP COUtliTTEE REPORT Hr. Gordon Carrigan, Chairman of the l1embership Committee delivered his committee's report. Tie indicated the increase in membership. He noted also that there had been several changes in recent weeks which prevented him froc preparing a final report until the week immediately prior to the meeting. Among recent activities was the acceptance of the application by the Guardian Corporation of Brighton, Massachusetts to serve as an Active Hember of the Institute. The Guardian Corporation's application had been handled by mail ballot and the :Hembership voted Guardian Corporation in as an Active Member just prior to the meeting. tlr. Carrigan noted the recent application received from Canadian-Distex application and the Lima-International application. Both the Canadian-Distex application and the Lima-International application were then reveiwed at the Board of Directors meeting, and the Board voted to recommend acceptance of these ttfo applicants as Regional liember and Licensee Member respectively in the Institute. The Secretary indicated that the Canadian-Distex application could be considered for balloting at this Uembership Meeting. It was necessary to have three-quarters of the Active !~mbers vote affirmatively on accepting a aember. As of June 13, 19 79 there were 18 Active Members. This 'tTould require an affirmative vote of 14 Active Hembers. There were 14 Active UelQ}:Iers attending this meeting, including the proxy from Ur. Zacharias of Carlisle Corporation held by Ur. Perritt. This proxy had been received prior to the Annual i:!eeting. An additional proxy was available for voting by the Secretary, from Hr. Scandrett of Scan-Pac. This would make 15, with 14 vote~ necessary for accepting a new member. , FMSI 02162 "IDUTES 0F 'I'HE Al!:TUAL :IEETWG -7- June 13 & 14, 1979 Upon motion duly rnf\de, seconded and unanil!l.ously passed, it .-1as; 3ESOLVED: To acc~pt the application for Regional lienbership filed by Canadian-Distex Corporation of Hontreal, Quebec, Canada. Upon motion duly made, seconded and unanimously passed, it ~Yas; P~SOLVED: To accept the application for Licensee ilembership filed by Lima International Parts and Sales of Lima, Ohio. At the Board of Directors T!leeting uhich preceded the Annual :i.i~mbership Heeting, Hr. Stuart Comins, Delegate from Auto Friction Corporation, asked that its membership be transferred to a sister corporation, P.T. Brake Lining Company, Inc. At the Board Heeting a resolution ~o~as passed unanimously accepting the transfer of membership from Auto Friction Corporation to P.T. Brake Lining Company, Inc. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the ltembership Conmittee report as written. PUBLIC RELATIONS COl~1ITTEE REPORT Mr. Simon, Chairman of the Public Relations Committee reported on activities for the 1978-79 fiscal year. He mentioned releases to the trade press including the election of officers, the address that. Hr. Baynes of Delco-l'loraine gave at our June 1978 Heeting, and publication of the "Friction Materials Hark Practices Guide." 1-fr. Simon thanked the President, iir. iiessier for his assistance during the fiscal year. I1r. Simon noted that over 40,000 copies of the "Friction Haterials '7ork Practices Guide" had been distributed to Hembers, and additional copies had been sent directly to outsiders. At the Board lteeting on June 12, 1979 it was recommended that the Institute contact other aftermarket organizations such as APRA, ASIA,. and CFS. These '~auld be contacted to seek their additional distribution. of the booklets. These would be provided by the Institute on a no-charge basis. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the report of the Public Relations Committee as '~ritten. BUDGET COMMITTEE REPORT Mr. Ogilvie, Chairman of the Budget Committee read his committee's report. This report presented a line by line budget amount for each of the major expense categories. It noted that the major expense items are salaries, rent, pension expense and legal expense, ~-Thich altogether account for about 80% of the budget. These items are decided by actions of the Board of Directors--particularly salary and pension expense. The report FMSI 02163 :tmUTES OF THE AifJ.lUAL ::SETHrG -8- June 13 & 14, 1979 recommended a 1979-80 expense budget of $95,810 '117hich '1!1as about a 5% increase over the budget for the previous fiscal year. At the Board of Directors meetin8 on June 12, the pension payments to 11iss Duschek were increased by $600 which tiould bring the new proposed budget to $96,410, about a 5-1/2% increase over that of 1978-79. At this point questions tTere raised concerning write-offs of receivables by the Institute. It was noted at the June 12, 1979 Board ?1eeting that the Institute would continue to pursue collection of the Hayes-Albion receivable for $850 for the annual fee for the last half of the 1977-78 fiscal year. In the meanwhile, a receivable of $500 from Implementos !Ietalicos Lara, S.A. of Venezuela had been tTritten-off because of non-payment of dues. There had been no activity with Implementos Metalicos in the 1978-79 fiscal year. An earlier write-off of a fee receivable was that of Silver Line 4 or 5 years ago. The Institute received a small settlement on that receivable from the Bankruptcy Court in Los Angeles, California. A member questioned details of the pension plan where over $500 is paid to Connecticut General Life Insurance Corporation to file the paper work required by EP~SA. It was suggested that it might be simpler and less costly for the Institute, and better for those who receive pensions, if Individual Retirement Accounts or Keogh Plans could be used; The Secretary indicated his interest in such plans but that in their present form the Keogh Plan is only for the self-employed and the IRA does not permit a benefit level equivalent to that provided under the Institute Plan. If the benefits to the retiree from an IRA Plan could match the FMSI Plan, it would be in the best interests of the Institute to discontinue its Pension Plan and have employees move to an IRA plan. Upon motion duly made, seconded and unanimously passed, it was; RES~LVED: To accept the Budget Committee report as written. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the 1978-79 expense budget of $96,410, which includes a $600 increase in the pension payments to Hiss Duschek. HOMINATI~G COMUITTEE REPORT Ur. J. H. Greenen, Chairman of the Nominating Committee reported. He advised that the following three directors' two year terms were expiring as of June 30, 1979: Hr. Ronald L. Cutler, Abex Corporation; l!r. Ronald R. Moalli, Raybestos-Uanhattan, Inc. and Mr. Francis E. Messier, Bendix Corporation. l~. Greenen also advised that terms for the follmnng four directors will not expire until June 30, 1980: !1r. HilHam Simon, Brassbestos l\fanufacturing Corporation; Ur. J. H. Greenen, i~uturn Corporation; Mr. Stuart Comins, P.T. Brake Lining Company, Inc. and Hr. G. A. Carrigan, S.K. Wellman Corporation. !Ir. Greenen submitted the names of Mr. Cutler, Hr. Moalli, and Ur. Uessier for nomination to the two year terms starting on July 1, 1979 to expire on June 30, 1981. This would continue the three directors on the ~ard for :u~<Jther two year tem. A motion tlas made that the nominations h~ closed. The Chairman asked tlhether there t.rere any nominations from the FMSI 02164 iiiNUTES OF TH2 Ai'ITIUAL :LIEETING -9- June 13 & 14, 1979 floor. A member recommended that Hr. Kaminski of the S.K. Hellman Corporation be nominated for the tuo year term as Director commencing July 1, 1979 and expiring June 30, 19 81. The Secretary advised that Ur. Kaminski's name could not be placed in nomination, as Ur. Gordon Carrigan of S.K. l.Jellman already served on the Board. A nember then placed the name of Mr. John Hoare of Reddaway Manufacturing Corporation in nomination for a two year term as Director. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: That nominations for the Board of Directors be closed. Ur. Greenen appointed Hr. Drislane, Secretary; Mr. Jackson, Legal Counsel and 11r. Kick of the l1embership to supervise the collection and counting of ballots from the Met:lbers for election of the three Board Hembers for the terms comencing July 1, 1979 and ending on June 30, 1981. Counsel advised that according to the Constitution and By-Laws a simple majority of the members present would be required to elect Directors. Hr. Drislane, Secretary, collected ballots from Delegates and authorized representatives of the Uembers. Fourteen ballots ~'lere collected. By majority vote the following three directors were elected for the two year terms: Mr. Ronald L. Cutler, Abex Corporation; !tr. Ronald R. Noalli, Raybestos-Uanhattan, Inc.; and l1r. Francis E. Hessier, Bendix Corporation. ASBESTOS STUDY COUMITTEE REPORT Mr. Barry Wagner, is Chairman of the Asbestos Study Committee. The Secretary read l:Ir. Wagner's report. Hr. Wagner reported on ~~ork that the Committee had completed. In particular he pointed to the "Friction Uatel:ials Work Practices Guide" ~1hich was published during this past fiscal year. Over 40,000 copies were then sold to the Uembership. This booklet was completed by the Committee and the Task Force in the early part of the-1978-79 fiscal year. Mr. t-lagner pointed to his concern on industry sponsored legislation proposing a ''federal" Asbestos Health Hazards Compensation Act. He was particularly concerned by the proposed financing of a compensation fund based on a tonnage assessment imposed upon industry llr. Wagner questioned the effects that such legislation could hav on friction materials manufacturers. Mr. Wagner also pointed to recent activity by the Environmental Protection. Agency's Office of Toxic Substances Control. A report prepared for them by the liT Research Institute, pointed to brake repairs as an area of concern as regards asbestos exposure. The Chairman asked for input from the Directors and Members on an industry position, and recommendations on how to support such a position. An area of immediate concern in !1r. l1agner's report was the legislative draft of an "Asbestos Health Hazards Compensation Act." A draft had been circulated to the !!embership in Uay 1979. In the original draft manufactur~rs of automotive friction-materials were considered to be Class I parties ~ho would be assessed $325 per ton bas~d on consumption 15 years prior to its contribution. It was pointed out that friction materi~l& manufacturers were subsequently dropped into a Class II. category where the assessment ~iould be $32.50 per ton. Whether this was occasioned by the friction materials manufacturers' reaction to this draft legislation is not certain. FMSI 02165 :liNUTES OF THE AIUIUAL 1ffiETii1G -10- June 13 & 14, 1979 A member questioned some definitions concerning the "respons ib le party." In the draft this indicates that it is a corporation, partnership, joint enterprise or other entity engaged in (1) the manufacture and sale of any product or substance containing asbestos, and (2) the import for sale or distribution of products containin~ asbestos. Then there is a reference to tobacco manufacturers. One question concerned ~~ho is the 11first processor." Hhere a friction materials manufacturer purchases all yarn t'7ith the asbestos in the yarn t-1ouldn' t the provider of the asbestos yarn be the first processor? Or would it be the processor t'lho finishes the asbestos yam and sells it first as a finished product. It was suggested that an answer cannot be made at this meeting. Definitions of items such as a first processor would be part of the complications of such legislation. As indicated, the "responsible party" doe apply to importers but it ~-1ould be difficult to assess importers of friction materials 15 years ago to pay in current years. If such legisl~tion were to be effective in 1980 manufacturers would then pay their first assessments based on 1965 asbestos consumption. In response to a question, the Secretary indicated that it was his belief that Johns-Manville was the main proponent of the suggested legislation. Also in response to a question, the Secretary indicated that he had called the Asbestos Information Association (AIA) and Mr. Pigg indicated that the AIA had no position on this legislation. However a member suggested that it is likely that AIA would have a different position than would a friction materials manufacturer. A member suggested that with these problems facing our industry that the situation is similar to conditions in the middle 60's when the various states were proposing safety legislation for brake linings and the Federal Government was proposing regulations after passage of the National Traffic and ~lotor Vehicle Safety Act. It was suggested that the industry should make a solid presentation to the Federal regulatory authorities concerning proposed regulations effecting friction materials manufacturers. It ~'las stated that at the Board of Directors Heeting on June 12, the Directors planned to ask the Asbestos Study Committee to make recommendations concerning the Institute's position in the areas of an "Asbestos Health Hazards Compensation Act, 11 and regulations by the EPA's Office of Toxic Substances Control. It asked what supporting data d~ we have for an industry position. 't-Jhat type of supporting data would the Institute need? How would the Institute go about getting this data? It was recommended by the Board that the Asbestos Study Committee come back to the Board with a plan for action by the Institute. After such a plan is presented the Board would act on planned activities and positions for the Institute. It was suggested that in some cases the Delegates would need the support of their management. They might be asked to have people serve on a Task Force concerning these problems. It was stated that the Institute does not have the information necessary to present a solid case to Washington. The Institute will need good information, statistics and perhaps medical history. ~~ile it was suggested that the Institute and its members should be responsive to the regulatory input, a member. asked what could be done now. At this point, a member suggested that one thing that could be done was to tTrite letters to Senators or Congressman concerning the problems our industry faces in their districts. At this point the President, Ur. Uessier, showed a special report that uas put out by the United States Chamber of Commerce entitled "A Letterwriters Guide to Congress." It was suggested that this was a ~7ortht-Thile report and copies should be distributed to the Membership. The Secretary was directed to have copies distributed. FMSI 02166 iiiinJTES OF THE AlEWAL l1EETE1G -11- June 13 & 14, 1979 A member stated that there t>Tas Canadian data available concerning asbestos exposure studies that might be of interest, Ur. Carrigan tMs asked if he could get the name of this Canadian study and send it to the Institute. It was suggested that if Institute members have their own, or have access to fiber count information in brrute repair shops, and have any medical history or other on such repair shops, this could be most valuable. Hr. Join commented on the Horld Health Organization's conclusion concerning asbestos as a carcinogen. The Asbestos Study Committee uill be asked to gather information and present proposals for the Institute as regards representing friction materials manufacturers t'1ith regulatory authorities. It was stated that the Asbestos Information Association has been quite strong in their representations concerning the overall asbestos industry~ but they have not been able to articulate vi~~oints of the friction materials industry. As regards the report prepared by the Illinois Institute of TeChnology Research Institute (IIT report) there t>Tere comments made that some of the conclusions in this report t-rere rather "squishy." Several rebuttals are being made to the IlT Research report, but a main problem is that they are extrapolating results from the studies by Mount Sinai Hospital on N~T York !lunicipal Garages to the general repair shop. The general repair shop does not grind or machine brake linings and their main exposure comes from bl~>Ting out the tTear debris. There is a question as to whether there is any real release of asbestos fibers as such by this particular operation. All studies show that the asbestos fibers in wear debris. are quite short and cannot be measured under the OSRA definition of a fiber longer than 2 ~cron length. However, Dr. Selikoff's team., t>Torking with the ~iJ'orld Health Organization, has apparently come to a conclusion that there is no safe level for asbestos exposure. Hount Sinai alleges that the fibers shorter than 1 micron that cannot be vi~Ted optically . are just as hazardous as the longer fiber asbestos. Upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To accept the report of the Asbestos Study Committee as uritten. FEE FOIU1ULA COHlliTTEE REPORT .-. '. ~ Hr. Jim Hellow; Clairman. of the Fee Formula:- Collllllitte.e"'repo~~ed. The ~~ritten r:epozot that had been prepared prior to- the meeting,- was based on categories. reported by Activa. llemben and assll&emente. on Regional l1embers and Licensees based on the fee schedule in effect for the 1978-79 year. Based on this fee formula, using last year's rates. the projected fee income for 1979-80 would have been $82,350. r~. Mellow advised that at the Board of Directors meetina on June 12 the Directors voted an increase of approximately 10% in the fee formula. This was made to project fee income 'of approximately $90,000. Hr. t1el1Q.W indicated the following fee structure as voted by the Board of Directors. Active 11embers: Basic fee: $1,050 per member Categories: $700 per reported category. Regional ~!embers with US rights: same fee structure as Active Members Regional !!ember regular: Increase fee to $1,450 Regional Hember Associations: Increase fee to $2, 400 Licensee Uembers: Increase fee to $550 FMSI 02167 -12- June 13 & 14, 1979 Upon motion duly made, seconded and unanimously passed, it ~1as; RES1LVED: To accept the Fee Formula l:!.eport as written ~lith the revisions voted by the Board of !Jirectors. Ii.IVEST::EHT ADVISORY CIJl1HITTEE REPORT ~Ir. Simon, Chairman of the Investment Advisory Cotm!littee delivered his committee's report. In sul!lt!lary Hr. Simon reported that approximately $45,000 had been transferred from time-deposits into US agency obligations paying a little over 9%. Also, the Institute invested some of its funds in the Phitehall Honey ~!arket Fund managed by the Vanguard Group. This fund has been payine approximately 10% interest. Investment balances projected at June 30 showed about a $5,000 increase over that shown on June 30, 1978. A question \7as raised concernin~ the expense budget for a non-profit corpora.tion. The Institute's investments sh0'!7 about $175,000 balance, whichis approximately the same as the Institute's retained earnings on the balance sheet. A question was asked as to what accumulation of capital a non-profit corporation could have. Counsel indicated that the accepted rule by the Internal Revenue Service is that a non-profit organization can have retained earnings approximating 2-1/2 times its annual expenses. There is no problem for the Institute at this time, as the 2-1/2 figure would permit accumulated retained earnings of over $225,000. Upon motion duly made, seconded and unanimously passed, it l7as; PSOLVED: That the report of the Investment Advisory Committee be accepted as written. Ii~STITUTE DEVELOPtlENT COMt1ITTEE REPORT Hr. P.on Cutler serves as Chairman of the Institute Development Committee. There ltas no l7ritten report for this committee as Hr. Cutler met tfith other members of the committee on June 12 to review items referred to it. An item referred to the Institute Development Committee concerned the possible enlargement of the Institute to include manufacturers who did not manufacture friction materials. This was occasioned by a request of Aimco Industries Limited of Canada to be considered as an Active Uember of the Institute. This lTas discussed at the June 12 Board of Directors Meeting and the Directors, by a vote of 6 to 1, decided that they would not consider enlarging the Institute to include companies that do not l!lanufacture friction materials. As regards the specific request of Aimco, it was noted that they had been accomodated in that a representative from Aimco had been invited to sit as an Associate on our Data Book and Technical Committee. In response to a question, the type of member who would have been considered had the Institute considered expansion would be manufacturers such as Aimco, Wagner, EIS and others. FMSI 02168 -13- June 13 & 14, 1979 DA'::A J0f)K AND TEC:ilUC&'.L CC'''!!ITTEE rtEPORT Hr. Phil Grim is Chairman of tht:! Data Book and Technical Cornmittet:!, The Secretary read ~~r. Grim's report, This report covered items such as membership of the committee and treatment of the Institute's reeiatt:!red trademarks in Institute catalogs. Hr. Grim advised that a net'l printer had been taken on for printing of the "19 79 Supplement to the 1978 Brake Shoe Identification Catalog." 3e also discussed items such as possible computerized typesetting of catalogs and various technical matters. Upon motion duly made, seconded and unanimously passed, it Has; filiSOLVED: To accept the report of the Data Book and Technical Committee as t'lritten. :liSTO!tiCAL SALES !tEPO!cr The Secretary reported on the Historical Sales Program for calendar year 1978. He showed the list of all members ~rho had reported during calendar 1978. It uas noted that of 18 Active ~lembers, 14 reported at least once during calendar 1978. It was also pointed out that 4 Regional !!embers tdth the rights of Active :tembers had reported statistics at one time during calendar 1978. A member stated that it would be well to try to get additional reports from members to get better sales statistics information. The Secretary indicated that some members had difficulty with the Historical Sales Program this past year. For example, Hr. Carrigan t'las unable to report Hellman figures because of difficulties t'1ith computers for two recent installments but had now started reporting again. !ir. Burge!;!s indicated that they had bt:!en subpoenaed by the Federal government concerning their sales statistics and tY"ere no longer participating in the program for that reason . Because of changes at Safeguard their last report t,yaa missing. and because of chanBes at Lear-Siegler in ]e"t-1 Castle, the report for the last quarter was not sent in. Hr. Ogilvie ''las asked if he t'lould contact !lr. Anderson in Danville to file these statistics. The Secretary indicated that certain members did not participate because they ~rere not marketing automotive type friction materials. Some industrial product infornntion does not fall into the type of reporting categories used in our program. Upon motion duly made,. seconded and unanimously passed, it was; RESOLVED: To accept the report on Historical Sales as N"ritten. ANNUAL 1-fEETING COllHITTEE REPORT Ur. Ross Kettt:!ring, Chairman of tht:! Annual Ueeting Cocmrl.ttee read th4:! report. His report recommt:!nded that tht:! Institute return to the Ocean Reef Club in 1980, In case there t'7es dissatisfaction with Ocean Reef, the Committee recommended the Homestead in Hot Springs, Virginia. In addition, the report made recommendations on inviting wives to the Annual Meeting, and if so resorts in the area near Disney Horld t'lere suggested. FMSI 02169 ~IINUTES OF THE ANNUAL HEETI:lG -14- June 13 & 14, 1979 At the Board of Directors lteeting on June 12, 1979, because of the dissatisfaction expressed uith Ocean Reef Club, the Board voted to accept the recommendation to attend the Homestead in Hot Springs, Virginia in June 1980. Also, at that meeting, the Board voted against the recommendation to invite wives to attend the Annual I:eeting. Upon motion duly made, seconded and unanimously passed, it was; P~SOLVED: To accept the report of the Annual Meeting Committee as written. OTHER BUSINESS There being no further items on the agenda, the President asked if there were other items of business to be conducted. A member asked about the Aimco request to become an Active Hember. It was explained that one reason that Aimco had requested Hembership ~-1as to participate more fully in decisions as regards lining and shoe assignments and also to provide information of this nature to the Institute. The Aimco request was somewhat satisfied by the appointment of a representative from Aimco as an Associate member of the Data Book and Technical Committee. A representative from Aimco has continued to serve on this committee. A question arose as concerns use of the P'USI numbers and problems with manufacturers who might not be eligible for Institute Membership. The Secretary advised that he had received an application from World Auto Parts in Buffalo, New York. ~-Torld Auto Parts was not a manufacturer of either friction materials or shoes and and was not eligible to serve as either an Active Member or a Licensee. World Auto Parts was anxious to use the copyrighted Ft-1SI numbers and trademarks in marketing their products. They operate on an exchangebasis, taking old cores and reselling them for use in the aftermarket. It was suggested that perhaps something could be done to make a licensee type membership available on a fee basis to manufacturers like World Auto Parts even though they were not now eligible for Membership. This question was referred to the Institute Development Committee for their recommendations. ****" There being no other business brought to the attention of the Membership, upon motion duly made, seconded and unanimously passed, it was; RESOLVED: To adjourn. Adjourned: 10:00 AM E. W. Drislane Secretary FMS\ 02170