Document gD58OgmbjNMdZQ4VE89VN5YGQ

FILE NAME: RT Vanderbilt (RTV) DATE: 1974 Nov 7 DOC#: RTV259 DOCUMENT DESCRIPTION: J-M Memo Stating RTV Informed J-M that Inserting Asbestos Caution Labels Would Cause Harm to Business 4J1 Johns-Manviile ; internal Correspondence T o : See belov/* F r o m : Paul Kotin, M.D. , 411 C o p ie s : S u b je c t: F. J. Solon, Jr. R. Carter TALC LABELIMG i! 5/ D a t e - . November 7, 1974 NOV 8 1974 , *W. R. Goodwin, 5W F. H. May, Jr., 5W J. A. McKinney, 5W L. Pundsack, R&D C. J. Sulewski, 2W W. L. VanDerbeek, 2S We have been informed by Mr. Robert Bacon, Assistant to the President of R. T. Vanderbilt Company (a major talc competitor) that J--M's decision to insert asbestos caution labels on all talc shipments will result in "irreparable damage" to Vanderbilt. Mr. Bacon requested that this matter be brought to the- attention of the highest level of management, and he stated that he was asking Mr. Hugh Vanderbilt, President of R. T. Vanderbilt, to call a senior officer at J-M to voice their concern and their belief that it is J - M 's intention to hurt their company. 1 The purpose of this memorandum is to alert you to the situation in the event you are contacted by Mr. Vanderbilt. Our decision to label talc was based on our conviction that J - M 's talc contains fibrous asbestos and in no,way reflects any intention ,to hurt or destroy., the., Vanderbilt Company. If you would', like additional details on' this matter, please call me. III. Influences A. External Labeling-- During June of 19 74 we discussed with various customers the possibility of labeling 1 our talc products. This resulted in an immediate loss of some accounts. Letters were sent to Our customers advising that the label would be affixed to our bags effective November 1, 1974. These letters were sent out in September of 1974. The results of the letter jn September and the actual labeling November 1 caused a further loss of customers. Our estimate of lost business on an annual basis was approximately 30 percent of our tonnage and 40 percent of our dollar volume. Please *Tfc . refer to my attached letter to P, Kotin which this effect. R. T. Vanderbilt and Pfizer (California talc) are not labeling. R. T. Vanderbilt is certifying their talcs are asbestos-free, but we have no knowledge that Pfizer is doing the same. Vie feel that Vanaerbil and Pfizer (California talc) will be required to label before the end of 1975. | The adverse publicity generated concerning asbestos i. ; and tremolite has been such that even if we could l ; remove the asbestos label from our talc, it would be some extended period of time, possibly a year or J more, before we could regain business lost to 1 asbes 'os-free talcs. ry 2. OSHA and Nlobn-- Jointly studying asbestos in talc. OSHA has requested NIOSH to study asbestos in iWf commercial talc, and NIOSH is studying asbestos ' content of talc mines with MESA. NIOSH considers Ifcr all particles of chrysotile and the amphiboles that have three-to-one aspect ratio and over 5 ju. as asbestos fibers. We expect increased activity from jw . state (particularly California) OSHA offices on our talc customers, because of tremolite. r 3. FD7-V-- Does not appear to be a problem at the moment. Their position; stated in the Federal Register March 14, 1975*withdraws their proposed ban of talc in food packaging. The proposedlbar. drew attention to asbestos ini talc and we will nave an uphill battle to get back market share We lost. i' i t-i s, 4. General Market Conditions-- See Talc Sales attached]: >i! j , a. Our ceramic and tile business remains relatively strong in spite of our problems. ;j b. Paint is weak due to the economy and our tremoiite/labeling problems. ,c. Our plastic business has all but disappeared due to the tremolite problem with the exception of Solo Cup which we started to sell in October of 1974. Solo remains strong but tremolite ant the label are an ever p esent potential problerj. Competition from Pfizer is fierce but we manage to hold on because Solo likes our product. d. Tremolite, the label, and quality, plus a poor:' business climate have combined to hurt our sales to the paper industry. Competitors- fromj Montana talcs have been only too eager to point out to our customers that our talcs contain asbestos fiber. This is very rough competition, and coupled with the economy and quality probleir makes for difficult marketing conditions, to say the least. e. Price increases-~Ue had planned a six percent n price increase for talc on an annual basis. Wp have implemented a three percent (annual basis;, increase and have met great customer resistance. It is doubtru. that a nix percent will be ; S.-- achieved in 1975. ^ decision to label by Vanderbilt and Pfizer could reduce the pressure on Desertalc and allow for selective price b increases. \ B- Internal Influences \ Vf 1. Ore Quality and Control Related torF. __ problems with ore quality came about when we were forced to above ground mining. The lack of sulectiv- mining has caused virtually;all of our, problems con cerning brightness and acid solubles. (The Mining Division is formulating a mining plan which should fc- w- completed soon to alleviate this problem. Problems encountered at the milling locations result in inability to meet F.P.S. stem primarily from the' crude ore being shipped from Warm Springs. This, hopefully, will be corrected by the mining plan * mentioned above. Other quality problems were caus< by grinds being too coarse and poor plant rnanagenoft Plans to traini and adequately staff quality contro] personnel have lbcen put into effect by Mining and Research. Plaijt management and supervision should /b lofci I improve dramatically when the Mining Division implem their new organization plan for Desert Minerals on April 1, 1975. IV. Action That We Plan to Minimize Unfortunate Influences A. Tremolite and the Label-- We are and will continue to educate our customers on the necessity of proper dust control not cnly for asbestos fiber, but for all dust which is required by OSHA. Our industrial hygiene studies are very helpful in this respect. We believe and are attempting to convince the customers that they must clean up their plants and control _<ust to comply with OSHA regulations. By so doing, he eliminates the problem of asbestos. i ! Viherever possible, we discuss bulk shipments to avoid | dust problems. j; B. Ore Quality-~This problem is critical and compounds our! problems with tremolite and the label. We are in \ constant contact with the Mining Division and . c-mmunicating our problems in this regard. The formu- j lation and implementation of a good sound mining program t* properly supervised, will eliminate this problem area. ' C. Qualif./ Control Problems at Grindino Locations-- Good quality crude is paramount, as it is the one area that the grinding plants have no control over. The training of plant quality control p- -sonnel so they know what they are looking for and can `erp1" - their results properly will alleviate the problems of coarse grind. This, rwith better plant management which should be accomplished with the new plant organization, should reduce these problems to a minimum. T. E. Remmers has : been assigned the responsibility of the key marketing liaison person to work and communicate to the mining 1 Division and to follow problem areas through, j f Recommendations e'i ' The initial crunch of lost business due to the label has ik been felt. Our business seems to have stabilized. We expect further erosion in paint and' possibly the loss of Solo Cup in plastics. Our ceramic business remains strongJ We believe we can regain some lost paper tonnage! with impxwvov, quality from Warm Springs and the grinding location During April we will phase out production from Los Angeles!; and move all production to Dunn. Some Cyclo-Fil may have t to be made at Los Angeles on an intermittent basis due to j; capacities at Dunn. The consolidation of virtually all i production at Dunn will cause Dunn to run at capacity for six-dry weeks. The concentration of managerial personnel i I \ 1 many quality, shipping, and outage problems we have been experiencing. ; The costs vised to arrive at net earnings with the revised forecast were submitted by the Mining Division. The cost includes the fixed cost for the tos Angeles Plant, which are estimated at $200,000 per year while closed down. If we were to dispose of this plantrthe fixed cost would be eliminated. The coot of operating Dunn and Warm Springs, in my judgment, appear to be overstated. We have never operated Dunn at full capacity with full management capa bilities which should insure better efficiency. We believe we still have a 45,000-plus ton per year business Mining Division believes this business concentrated at; Dunn will improve our profitability. We would like tOjStay in the California talc business at least until Penhorwdod comes on stream, to maintain continuity in the market.' The Desert Minerals operation should be reviewed for profitabili progress after May results are in. If this business, with the changes contemplated over, the next two months, can be made profitable, it will remain'-a good small business as Penhorwood should have virtually: no effect on Desert Minerals. sCJ