Document baEdzM8xzYXzzrnaNzwXrR6Ng

An a c o n d a Co p p e r Min in g Co mp a n y .25 Broadway, New 'York 4. N.Y October 10, 1945 Mr, F. Laist, Vice President in Charge of Metallurgical Operations Anaconda Copper Mining Company Building Subject: Post-War Program for the Sale of White Lead-in-Oil Dear Mr. Laist: When I arrived in East Chicago Monday, Mr, Hurless not only had all the data covering the sales situation in the various lead-in-oil districts, but he also had Mr. Brownell and Mr. Street available for conference. Mr. Johnson and Mr. Knox also joined the discussion, and we scent several hours going into the subject of lead-in-oil produc tion and sales. This sales program also has to do with the problem of taking care of the salesmen who have returned, or who expect to return, in the near future from service in the Armed Forces. Prior to the War, our sales in white lead-in-oil averaged approximately 2500 sons per year. Tgisf..additional tonnage was a great "Kelp to t.ie white Lead Plant because the extra tonnage enabled the plant to operate at a reasonable o~peratxng cost per ton! In other words, when' the production of totar~wfiite"lead in the Whlte/Leaa Plant exceeds 5.000 6.ouu eons. the operation usually refurnS~a~"profits--"Below that figure, it is seldom possible to make a profit unless variations in the pig lead market as compared with the price of white lead leave an unusually large margin between tne two. The discussion was not 'under way for any great length of time before it was evident that what the men have found in the field checks with what I have been able to learn from talking to 'the: Lead Industries Association land the Association Of Paint and varnish and-others. There is still some straight lead-in-oil; business which means white leacT* irTche pasted palnc form. nofBggrt..ready to us57 THW majority of~~the' white lead sold for straight white lead paint, however, is BBSIng manufactured principally by the rational 4nitT~Cead Company. Eagle Picher has followed suit to a certairi~extent, N11500 PNYC0000938* 'Ur. F. Laist -2- October 10, 1945 and some paint companies are filling in their line with straight lead-in-oil paint in order to protect their mixed paint market. National's sales price to the dealer for this straight leacT~paiht in mosTTiases is approxlmaTeiy equaT_td~Tne: cost~of~ producing a similar pain~b~"F70.3. cur plant at_Chical'cT. rh""ifhe~d'pirnon_df ail concerned", in which I Cdnchr7"?tational,E market for this type of paint is going to increase if, they maintain their present safes policy. This situation vastly alters the outlook for our sale of straight leSd^ihidil paste of the same composition as we produced prior to the liar. Having settied,the above, we proceeded to analyze the different districts, principally located between the afea r.oTtn of the Ohio P.iver and'east' 5f~TSe"!3TssTs-t ppi, because'Erie sale oi iead-in-oil in any other t.prri tn-ry in the"United'States was, to a large extent, unprofitable even praor to"Xhs..jvar.'' "It"was evident from the information the Sales DeparthSht1 obtained that there were still territories where demand for iead-in-oil paste will result in the sale of a considerable tonnage of that product. This being the case, we web|k byeri the :duties of each of the salesmen in the different districts and have decided to recommend to you tnat we[,,addlthe'ib|iiiit&l^hfc','o'fl;'i%)prpxiaateiy three men to the sales force. Seyelifel1 of ''the', 'dry!- .blgneult, salesmen would, under this scheme, ^ereng^scine time selling leath=rtn-oli in :sucE~ar~ea~s as GrteatertNevy^piork.j.l'hlilsiaBliahia., Bbstony eta.:1 In 'addition, v;e| 'WouiGNaddf^jtws^hen whose sole 'duty^would be to sell lead-ir.o.il lh,the'^i|4bhb:|;|i;, ahhi:;:Ghb^ter::.Chicago'areas. This propo sal will, entpfl.l/ialbPS'tihf 'Approximately''|2Q per ton for the sale of lead-in-oil, and should, under present conditions, enable us tot'il'lllhlli'lbb^lm^tely, 1CC&'' tons of; lead-in-oil per year,. ,'For;oK'two>,,htarting in 1946, the analy sis of the sales figures indicates that we should also sell between 5000 and 6000 tons of dry white lead. If we were to return to the old program whereby we spent from $100,000 to f110,000 per year selling lead-inoil, our cost par ton of products sold 7,'ould likely jump to ?60-$70 per ton. Such cost for selling lead-in-oil is not justified and would not result in corresponding reduction in working cost for dry lead. The plans which we are proposing would cost approximately $20,000 per year. They will enable us' to take care of three of the returned Veterans, one who is already working at East Chicago. Also they will enable us to keep our product oh the market until we can see just what will result under post-war building boom conditions from National's sales policy and efforts looking toward the sale of straight lead-in-oil paint.' PNYC000093S* Mr. F. Laist October 10, 1045 -3- Someone may ask why we do not plan to compete with National on the" basis of-prod\jg'irig~5H~~J5Ta'conda ~paih't~5omoorsS5~~oi' straight lead^fn-oll arid drier, etc. In'TThe~first gli.ce we only have' one plant and couia nofprOdUce paint, except' for'~.b.ale In the~~Gf eater Chicago area .--with- any hope of-maJting a profit on any such venture. In addition, I do not believejge should- get into the paint business , particu larly i ,ve are continuing to sell to many ol* our customers for:. dry lead. More important, I do net believe we could sake-ajiyr'S'dney trying to sell paint on a Small volume basis. There may, however, possibly be a way to compete in the Greater Chicago area with National in connection with their sale" of, straight, white lead paint. I refer to the pos sibility of producing pulp lead-in-oil or some special product along that line1, ibaS- could be Shipped in large', size return able containers:, to t;wo-oir three medium size paint companies in the"'area nfhtiome:d> If such enterprising companies can be found'who are dhxijd'us to compete with National, the combina tion''with. taem as Indicated, they to produce whits lead paint under their'osvh: brand;..and; take'cars'of1, all.'the selling, ad vertising,, "etc,.,., mightt:.enjabild';us td pick up another thousand tons of white lead'bulSineisS.'St:i,yeiy low sales cost. Such a yob is .one\thit mud't. belharidied: very, carefully and checked by''the. legal., P'epartmidt' aad'.ianagCJteht,,prior tb making any formal arringea^ntS'.': Mr. adrld'ld' arid. Mir, Brownell will rive their attention to this matter in the. near future. If the above proposal involving an additional sales, expenditure of approximately $20,000 per year is satisfactory,. I would appreciate ydir so advising. Yours very ,fc?uly, > O. . , F.0.Case:!lc cc - Mr. J. R. Hobbins PNYC00009386