Document wDJdZzJp16DjGQvbXg766bzQE

I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 LOS ANGELES COUNTY SUPERIOR COURT TRANSWESTERN PIPELINE CO Plaintiff, V. MONSANTO CO., Defendant. ) ) ) ) ) Civil Action ) No. BC-026959 ) ) ) Deposition of THOMAS L. GOSSAGE, taken pursuant to notice before Phillip S. Storch, Registered Professional Reporter, in the Offices of Hercules Corporation, 1313 North Market Street, Wilmington, Delaware, on Thursday, August 6, 1992, beginning at approximately 11:30- a.m., there being present: APPEARANCES: SHEARMAN & STERLING BY: JAMES P. TALLON, ESQUIRE Attorney for the Plaintiff ' LAW OFFICES OF BRONSON, BRONSON & McKINNON BY: DONALD F. ZIMMER, ESQUIRE Attorney for the Defendant 1400 CORBETT & ASSOCIATES Registered Professional Reporters French Street Wilmington, DE 19801 (302) 571-0510 CORBETT & ASSOCIATES HARTOLDMONOQ25543 I THOMAS L. GOSSAGE 2 1 THOMAS L. GOSSAGE, having first 2 been duly sworn according to law, was examined and 3 testified as follows: 4 EXAMINATION 5 BY MR. TALLON: 6 Q. Mr. Gossage, are you currently the 7 Chairman and Chief Executive Officer of Hercules, 8 Incorporated? 9 A. Iam. 1 0 Q. How long have you held that position? 11 A. Since January of 1991. 12 Q. Is Hercules either a purchaser of 1 3 products from Monsanto Co. or a supplier of product 14 to Monsanto? 15 A. To my knowledge, we do not supply anything 16 to them. They do supply to us. 17 Q. Did you become employed by Monsanto in 18 1961? 19 A. Yes. 2 0 Q. In 1970, did you become a Director of 2 1 Sales of the Functional Fluids Group of the Organic 22 Chemicals Division? 2 3 A. Yes. 24 Q. Was that approximately in October of CORBETT & ASSOCIATES HARTOLDMON0025544 : I THOMAS L. GOSSAGE 3 1 1970? 2 A. Either October or November. 3 Q. Was the Functional Fluids Group of the 4 Organic Chemicals Division renamed in November 5 1970, the Special Chemicals Group -- the Specialty 6 Chemicals Group? 7 A. I think it was actually in January of 8 1971. What did you refer to it as? 9 Q. Specialty Chemicals. 10 . A. Yes. But I think it was January of 1971. 11 Q. And did the Specialty Chemicals Group 12 merge the Functional Fluids Group and the Paper 1 3 Chemicals Group? . 14 A. Yes. 15 Q. Did you have overall responsibility for 16 sales in both of those groups after the merger of 17 the two? 18 A. Sales and marketing. 19 Q. You held the position as Director of Sales 2 0 for that group until 1975? 2 1 A. Yes, except the title was changed 2 2 somewhere in the middle to Director of Marketing. 2 3 It was just a title change. No change in the work 2 4 responsibilities. CORBETT & ASSOCIATES HARTOLDMON0025545 THOMAS L. GOSSAGE 4 1 Q. And what year did you leave the employ of 2 Monsanto? 3 A. 1988, February. 4 Q. What was your last position with Monsanto? 5 A. With Monsanto Company, it was Group 6 Vice-President, Managing Director and Senior 7 Vice-President of Monsanto Chemical Company. 8 Q. In October of 1970, did you report to 9 Howard Bergen? 1 0 A. Yes. 11 Q. What was his position at that time? 12 A. Business Director. 13 Q. Did you continue to report to Mr. Bergen 14 throughout the period you held the title of Director 15 of Sales or, later, Director of Marketing? 1 6 A. Yes. 17 Q. Did Norman T. Johnson report to you in 18 your capacity as Director of Sales or Director of 19 Marketing? 2 0 A. Yes. 2 1 Q. What was his position? 22 . A. When I first joined the group, he probably 2 3 was Product Manager of Industrial Fluids, in the 2 4 reorganization that took place in the CORBETT & ASSOCIATES HARTOLDMONOQ25546 I THOMAS L. GOSSAGE 5 1 consolidation. In January of 1971, he became 2 Director of Sales for the combined group. 3 Q. Director of Sales, reporting to you? 4 A. To me. 5 Q. Did Roger Hatton report to you? 6 A. He did not report directly to me. I'm not K 7 sure during the whole five years^ ^5ut at least 8 during part of that time, he reported to someone, 9 who reported to me. 1 0 Q. To whom did Roger Hatton report? 1 1 A. There were times when he reported to a 12 Frank Langenfeld, and there were times when he 13 reported to a Larry Bradford. 14 Q. In 1970 and 1971, do you know what Roger 15 Hatton's job responsibilities were? 16 A. I believe when I joined the group in 1970, 17 he was more involved in the Sl;.yugaai product line, 18 the aviation hydraulic fluid. In the restructuring, 19 which probably took place at the beginning of 1971, 2 0 he would have also had responsibility for the 2 1 industrial fluids. It was kind of a technical 2 2 support role within the marketing organization. His 2 3 exact title, I can't remember. 24 Q. Was the function of the technical services CORBETT & ASSOCIATES HARTOLDMON0025547 I THOMAS L. GOSSAGE 6 1 or support within the Functional Fluids Group to 2 assist salesmen in making sales to customers? 3 A . Yes. 4 Q. Beginning in approximately October 1970, 5 what were your responsibilities as Director of 6 Sales? 7 A. I had responsibility for managing the 8 sales organization and the product or marketing 9 organization. 10 Q. And what did management of the sales 11 organization entail at that time? 12 A. I certainly had responsibility for 1 3 recommending the strategic and tactical plans for 14 each one of the business areas -- product areas, I 15 should say, instead of business. I had 16 responsibility for recommending pricing action. I 17 had responsibility for establishing a relationship 18 with the major customers and for maintaining our 19 market position with each of those customers. I had 2 0 responsibility for developing the salespeople and 2 1 marketing people who were under my responsibility. 2 2 Q. As part of your understanding of the sales 2 3 organization of Monsanto from 1970 through 1975, was 2 4 it important to you that salesmen in the field had CORBETT & ASSOCIATES VONOfl M^svt HARTOLDMON0025548 THOMAS L. GOSSAGE 7 1 an understanding of the application to which the 2 products they were selling were being used? 3 MR. ZIMMER: When you say 4 understanding, counselor, do you mean a technical 5 understanding, a practical understanding? What do 6 you mean by that? 7 MR. TALLON: I mean understanding 8 as used in the normal course. 9 MR. ZIMMER: I think it has a 10 special meaning here since it's been a returning 11 theme. So I'm confused by what you mean. 12 THE WITNESS: Could you repeat the 1 3 question, please? 14 MR. TALLON: Read it back, please. 15 (The reporter read back the last 16 question.) 17 THE WITNESS: It was important that 18 they had an understanding as to how the product was 19 to be used and it was important for them to have an 2 0 understanding of how the customer made the 2 1 purchasing decision. They were not necessarily 2 2 expected to know the details of how the customer 2 3 used the product. 24 . And I might add to that, because we CORBETT & ASSOCIATES ` HARTOLDMON0025549 THOMAS L. GOSSAGE 8 1 went through a transition, as we approached December 2 of 1970, the salesmen tended to be specialists. We 3 had.transfer salesmen, dielectric salesmen. An, ' e+c 4 industrial fluids salesmen. With the restructuring A 5 and combination of the businesses between functional 6 and paper chemicals, and the naming of Norm Johnson 7 as Field Sales Director, and the restructuring of 8 the business, we moved in early 1971 -- my memory 9 would suggest it was early 1971 -- into a general 10 sales organization and we had to go through a step 1 1 of retraining those salesmen. They, of course, 1 2 became less and less expert in any particular field 1 3 because they had a much broader product line than 14 they had previously. 15 The important thing was they 16 understood the product and they understood what the 17 customer wanted through a purchasing decision. 18 Q. Over what period time was this training 19 taking place? 2 0 A. I think it was ongoing throughout the time 2 1 that I was involved, the five-year period. The 2 2 intensity would have been in '71, when we 2 3 restructured. 2 4 Q. You indicated in your answer that it would CORBETT & ASSOCIATES HARTOLDMON0025550 I THOMAS L. GOSSAGE 9 1 not necessarily be the case that the salesmen 2 understood the technicalities of the product. Would 3 there be some occasions where the salesmen 4 understood those technicalities? 5 MR. ZIMMER: Objection, 6 speculation. 7 A. There were certainly some salesmen prior 8 to 1971 who were specific to dielectrics. They were 9 technical people and clearly understood those 10 products going through the Dielectrics Section. We 11 had a few salesmen in heat transfer fluids prior to 12 1971 that were experts in all areas of heat transfer 13 fluids. We may have had a salesman who knew about 14 heat transfer fluids but not a lot about other 1 5 app1ications. 1 6 Q. Was it possible to find in 1970 or '71, 17 salesmen who were familiar with the technical 18 details of the use of some of the industrial fluids? 19 A. Say that again. 2 0 Q. Would it have surprised you, in 1970 or in 2 1 1971, to have found salesmen within your 2 2 organization who were as familiar with the details 2 3 of the application of Monsanto products that were 2 4 industrial fluids as others were familiar with the ' CORBETT & ASSOCIATES HARTOLDMON0025551 THOMAS L. GOSSAGE 10 1 application to dielectrics or heat transfer fluids? 2 A. I think that heat transfer fluids and 3 dielectric fluids were so specific that the salesmen 4 tended to be quite knowledgeable. 5 Industrial fluids is a much broader 6 range of products and applications and my memory 7 would be we did not have that kind of detailed sales 8 expertise in that broader line of industrial fluids 9 Q. Did any salesmen in the field report 10 directly to you? 11 A . No . 12 Q Did salesmen in the field report to a 13 local or regional sales manager who then reported on 14 to someone in St. Louis? 15 A . After the reorganization at the beginning . 16 of 1971, they all reported through a regional 17 manager. Then, from that regional manager, into 18 St. Louis. Prior to that time, some of those 19 salesmen reported directly to someone in St. Louis. 2 0 Q. Did a salesman in the field ever report to 2 1 you directly after you assumed the position of 2 2 Director of Sales? 2 3 A . No . 24 Q. When you took over the job as Director of CORBETT & ASSOCIATES HARTOLDMON0025552 THOMAS L. GOSSAGE 11 1 Sales in approximately October of 1970, was the 2 business of the Functional Fluids Group divided 3 essentially between aviation and aerospace fluids, 4 dielectric fluids, heat transfer fluids and 5 industrial fluids? 6 A. Yes . 7 Q. Was the greatest percentage of the total 8 gross profits of the business group attributable to 9 the sale of dielectric fluids during your experience 10 with that group? 11 A. I'm not sure what you mean by greatest 12 percent. More than any of the other three? 1 3 Q. Yes. 14 A . Yes . 15 Q. During the period that you were Director 16 of Sales or, later, Director of Marketing, did you 17 ever become familiar with the products sold under 18 the trade name Turbinol 153? 19 A. Repeat the question again. 2 0 Q. During the period that you served as 2 1 Director of Sales, did you become familiar with a 2 2 product sold under the name of Turbinol 153? 2 3 A. I was aware of the name Turbinol 153. 2 4 Q. When you testified you were aware of the CORBETT & ASSOCIATES HARTOLDMONOQ25553 I THOMAS L. GOSSAGE 12 1 name, do you mean that that was the only thing that 2 you were aware of; that there was a name out there, 3 Turbinol 153? 4 A . No. I knew who the customer was. 5 Q. Who was the customer? 6 A . Texas Eastern. 7 Q . Texas Eastern Transmission Company? 8 A . Yes. But in my mind it is Texas Eastern. 9 I wasn't familiar with the third name. 10 Q Are you also familiar with the products 11 sold under the name MCS-153? 12 A . I'm familiar with the name. 1 3 Q. Do you understand MCS-153 and Turbinol 14 153 to be the same product? 15 A. The terminology MCS would imply that the 1 6 product was in the customer's hands but not yet 17 commercialized. 18 Q . Does the MCS stands for Monsanto sample? 19 A . I think probably. 2 0 Q. Do you know the composition, as you sit 2 1 here today, of Turbinol 153? 2 2 A. No. I didn't then either. 2 3 Q. During the period that you served as 2 4 Director of Sales or Director of Marketing for the CORBETT & ASSOCIATES ' HARTOLDMON0025554 .I THOMAS L. GOSSAGE i3 1 Functional Fluids Group or the Specialty Chemicals 2 Group, did you have any direct contact with persons 3 you believed to be representatives of Texas Eastern? 4 A. As I think back on it, I think I never had 5 any personal contact with them. 6 Q. During the period that you served as 7 Director of Sales of the Functional Fluids Group or 8 Director of Marketing of the Specialty Chemicals 9 Group, did you ever have any direct contact with 1 0 persons you believed to be representatives of 11 Transwestern Pipeline Company? 12 A . No . 13 Q. Are you familiar with an organization . 14 named Transwestern Pipeline Company? 15 A . No . 16 Q. During the period that you served as 17 Director of Sales or Director of Marketing, were 18 you aware, so far as you recall today, of 19 Transwestern Pipeline Company? 2 0 A. No . 2 1 Q. As you sit here today, do you know the 2 2 relationship between Transwestern Pipeline Company 2 3 and Texas Eastern Transmission Company, as it 2 4 existed in the 1970's? CORBETT & ASSOCIATES HARTOLDMONOQ25555 y THOMAS L. GOSSAGE 14 1 A . NO . 2 Q. During the period that you served as 3 Director of Sales or Director of Marketing, did you 4 understand that someone reporting to you had 5 responsibility for direct contact with Texas 6 Eastern? 7 A. I certainly remember that Larry Bradford 8 had contact with Texas Eastern. 9 Q. What, Mr. Gossage, is your recollection of 10 the involvement that Mr. Bradford had with Texas 11 Eastern? 1 2 A. I remember that Larry was involved in our 1 3 termination of that product with Texas Eastern. In 14 a meeting -- I don't know that I can say meetings - 15 but a meeting in which he had that he was going to 1 6 go down to terminate or withdraw the product from 17 them . 18 Q. Do you have a recollection of 19 approximately when Mr. Bradford had the meeting to 2 0 which you refer? 2 1 A. No . 2 2 Q. Do you have a recollection of having 2 3 discussed with Mr. Bradford termination of sales of 24 the product, Turbinol 153, to Texas Eastern? . CORBETT & ASSOCIATES HARTOLDMONOQ25556  THOMAS L. GOSSAGE 15 1 A. I remember that there were discussions 2 between Larry and myself about the termination of 3 the product with them. But no details. 4 Q. Understanding that due to the passage of 5 time the precise details of a conversation taking 6 place a number of years ago may have eluded you at 7 this point, do you recall anything regarding the sum 8 or substance of those conversations? 9 A. I remember that he felt it was going to be 1 0 a difficult meeting. And I believe that he 11 telephoned me after the meeting and gave me some 1 2 summation of what had transpired. And my memory is 1 3 that it was a tough meeting. 14 Q. Were you involved, Mr. Gossage, in the 1 5 decision-making process which yielded a decision to 16 no longer sell Turbinol 153 to Texas Eastern? 17 A. I was involved in the decision to 18 terminate those products, along with a group of 1 9 other products, to the sale -- the selling of them 2 0 to customers. 2 1 Q. What group of products are you referring 2 2 to in your last answer? 2 3 A. I think the Santovac, which were similar A 2 4 fluids sold for vacuum pumps, and Turbinol 153 were CORBETT & ASSOCIATES HARTOLDMON0025557 l THOMAS L. GOSSAGE 16 1 all in a group that were terminated at approximately 2 the same time. 3 Q. Approximately what time period are you 4 referring to? 5 A. I don't know. I would put it generally in 6 the 1972 time frame. 7 Q. Mr. Gossage, are you able to state what is 8 the first occasion on which you recall having a 9 discussion with respect to the termination of sales 10 of the product, Turbinol 153, to Texas Eastern? 11 THE WITNESS: Repeat the question. 12 (The reporter read back the last 13 question.) 14 THE WITNESS: No. 15 BY MR. TALLON: 1 6 Q. In your answer a moment ago, you indicated 1 7 in your discussions with Mr. Bradford regarding the 18 termination of sales of Turbinol 153 to Texas 19 Eastern, that Mr. Bradford had left you with the 2 0 impression that he had anticipated that his meeting 2 1 with Texas Eastern would be a difficult meeting. Do 2 2 you recollect why it was Mr. Bradford expressed that 2 3 he believed it would be a difficult meeting? 2 4 A. No . CORBETT & ASSOCIATES HART OLDMON0025558 i THOMAS L. GOSSAGE 17 1 Q. Do you have any understanding of why it 2 was anticipated that it would be a difficult 3 meeting? 4 A . No . 5 Q. Do you know what the annual sales of 6 Turbinol were in terms of dollars or pounds? 7 A . No . 8 Q. Do you have an understanding as to the 9 relative size of the sales to Texas Eastern, as 1 0 compared to, say, General Electric? 11 A. Extremely small. 12 Q. You indicated, Mr. Gossage, that 1 3 Mr. Bradford telephoned you -- or you believed he 14 telephoned you after meeting with representatives of 15 Texas Eastern. Do you recollect, as you sit here 16 today, any aspect of the telephone report that 17 Mr. Bradford made to you? 1 8 A. Only that he reported it was a difficult 19 meeting. 2 0 Q. And as you sit here today, are you able to 2 1 add anything to the concept of it having been a 2 2 difficult meeting other than the general concept 2 3 that it was a difficult meeting? 2 4 A. No. That's the only memory I have of it. CORBETT & ASSOCIATES HARTOLDMON0025559 THOMAS L. GOSSAGE 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16' 17 18 19 20 21 22 23 24 Q. Can you describe, if you recollect, some of the factors that went into your decision-making with respect to the decision to terminate sales of Turbinol 153? A. No . Q. You have no recollection of what factors you considered? A . No . Q. Do you know, Mr. Gossage, whether Mr. Bradford was accompanied to meet with representatives of Texas Eastern by any other employee or representative of Monsanto? A. I don't know. . Q. Do you have a recollection of who besides yourself was involved in the decision-making process which concluded with the decision to cease sales of Turbinol 153 to Texas Eastern? A. I would not have been in a position to make that decision on my own. Certainly, Howard Bergen would have been involved in the process, along with Larry Bradford -- and Norm Johnson. Q. Do you have a recollection as to whether or not Roger Hatton had any input to that decision-making process? CORBETT & ASSOCIATES HARTOLDMON0025560 THOMAS L. GOSSAGE 19 1 A. I have no memory of the meeting, itself, 2 or Roger having been there. Roger normally would 3 have been advising Bradford, but would not have sat 4 in on the meeting. 5 Q. Do you have a recollection as to whether 6 or not Mr. Papageorge was involved in the 7 decision-making process of terminating the sale of 8 Turbinol 153? 9 A. I have no memory of the meeting, nor his 10 being there. He was involved throughout the 11 withdrawal of PCB in most of the decisions that 12 related to one product or another's 13 discontinuation. 14 Q. Do you have a present understanding as to 15 the use to which Texas Eastern was putting Turbinol 1 6 153? 17 A. Only that it was going into their turbines 18 for pumping gas through pipelines. 19 Q. During the period that you served as 2 0 Director of Sales, did you personally have any 2 1 contact with representatives of Columbia Gulf 2 2 Transmission Corporation? 2 3 A . No . 2 4 Q. Do you know whether Turbinol 153 was sold CORBETT & ASSOCIATES PtNGAU(. )X UAVuN tN NJu/ lUl? l ALt>H IH>NDA HARTOLDMON0025561 l THOMAS L. GOSSAGE 20 1 to Columbia Gulf? 2 A . No . 3 Q. During the period that you served as 4 Director of Sales or Director of Marketing, did you 5 have any responsibility with respect to labeling of 6 Monsanto products? 7 A . No . 8 Q. Did you ever approve labeling with respect 9 to Monsanto products? 10 A. I don't remember doing so. It would 11 probably have been done at a lower level; someone 12 reporting to me. 1 3 Q. Do you have any recollection of 14 participating in any decision-making process 15 regarding application of a warning or a label to 16 products which were composed of polychlorinated 17 biphenyls? 18 A. I don't have any memory of it. 19 MR. TALLON: Let me show you a 2 0 document, Mr. Gossage, which, for the record, we 2 1 will mark as Gossage 1. It is a single-page 2 2 document bearing production number TRAN 000007: 2 3 (Gossage Deposition Exhibit No. 1 2 4 was marked for identification.) CORBETT & ASSOCIATES HART OLDMON0025562 THOMAS L. GOSSAGE 21 1 BY MR. TALLON: 2 Q. Have you had an opportunity to read the 3 language that appears in the upper right-hand corner 4 of that exhibit, Mr. Gossage? 5 A. Yes. 6 Q. Do you have any recollection of having 7 reviewed language such as the language which appears 8 on Gossage 1 for inclusion on a product label while 9 you served as Director of Sales and Marketing? 10 A . No . 1 1 MR. TALLON: Let me show you a 12 document, Mr. Gossage, which I will ask the Court 13 Reporter to mark as Gossage Exhibit 2 for' 14 identification. It's a multi-page document bearing 15 production number TRAN 085833 through 085850. 16 (Gossage Deposition Exhibit No. 2 17 was marked for identification.) 18 BY MR. TALLON: 1 9 Q. Will you take a moment to review that, 2 0 Mr. Gossage? 2 1 MR. ZIMMER: Do you want him to 2 2 read the whole thing? 2 3 MR. TALLON: No. I am mostly 24 interested in the first couple of pages. CORBETT & ASSOCIATES HARTOLDMON0025563 i THOMAS L. GOSSAGE 22 1 A. Okay. 2 Q. Mr. Gossage, after you took on your 3 position as Director of Sales in October of 1970, do 4 you recollect having seen the memorandum which is 5 before you as Gossage Exhibit 2? 6 A . No . 7 Q. After you became Director of Sales, do you 8 have a recollection of ever having discussed with 9 Mr. Johnson whether customer guestions with respect 10 to PCB should be responded to orally rather than in 11 writing? 12 A . No . 13 Q. After becoming Director of Sales, did 14 Mr. Johnson ever express to you that if a customer 15 wanted to sell fluid back or give fluid back to 16 Monsanto, Monsanto would refuse to do so? 17 A . No . 18 Q. Let me show you a document which has 19 already been marked as Texas Eastern Exhibit 122, 2 0 and ask you if, after you became Director of Sales, 2 1 you ever saw this document or a document which 2 2 incorporated any of the text which is incorporated 2 3 on Texas Eastern Exhibit 122. 2 4 . THE WITNESS: Can you read that, CORBETT & ASSOCIATES ' HARTOLDMON0025564 THOMAS L. GOSSAGE 23 1 please? 2 (The reporter read back the last 3 question.) 4 THE WITNESS: I don't remember ever 5 having seen the document. 6 The second part of your question 7 has to do with whether I have any memory of any 8 parts of this anywhere else? 9 BY MR. TALLON: 1 0 Q. Yes. 11 A. Well, there are terms in here that are 12 familiar to me, but I don't remember any parts 1 3 appearing anywhere else. 1 4 Q. To which terms are you referring? 15 A. Turbinol 153, I'm familiar with. To say 1 6 something is a closed system, I'm familiar with that 17 terminology. OS-81, I have some recollection of 18 that. But I have no memory of any other content of 19 this appearing on any other memos. 2 0 Q. What is your understanding of the meaning 2 1 of the term, closed system? 2 2 A. That it is in the context of PCB's; that 2 3 it is an application where the product can be 2 4 captured or contained and not get into the CORBETT & ASSOCIATES HARTOLDMON0025565 i THOMAS L. GOSSAGE 24 1 environment. 2 Q. How does that contrast with the term, open 3 system, if you have an understanding of the term, 4 open system? 5 A. Open system was not one that was 6 frequently used but it would be the reverse of 7 that. That would be the application where the 8 product could escape to the environment. 9 Q. Do you have an understanding of whether 10 the term, closed system, was used in Monsanto in the 11 early seventies to mean a system where there was 1 2 zero percent chance of PCB fluids escaping into the 1 3 environment? 14 A. No . 1 5 Q. During the period that you served as 1 6 Director of Sales or Director of Marketing, did you 17 have any direct contact with representatives of 18 Westinghouse? 19 A. Yes. 2 0 Q. Do you have any recollection of having 2 1 worked with representatives of Westinghouse and 2 2 contract language having to do with, the termination 2 3 of dielectric fluid sales to them? 2 4 A. Yes. CORBETT & ASSOCIATES HARTOLDMON0025566 I THOMAS L. GOSSAGE 25 1 MR. TALLON: Let me show you a 2 document which we will mark as Exhibit 3 for 3 identification. For the record, this document is a 4 two-page letter, bearing the date of November 9, 5 1970, and it appears to be signed by T.L. Gossage, 6 Director of Sales, Functional Fluids. This does not 7 have a production number. 8 (Gossage Deposition Exhibit No. 3 9 was marked for identification.) 10 THE WITNESS: Do you want me to 11 read this? 12 Q. Yes, please. 1 3 A. Okay. 14 Q. Have you read that document, sir? 15 A . Yes. 16 Q. Do you recollect having written that 17 document to Keith Kelly of Westinghouse Electric 18 Corporation in November of 1970? 19 A. I certainly recall the letter. I can't 2 0 say that I remember writing it. 2 1 Q. Is that your signature which appears on 2 2 the second page of the exhibit, mid-page? 2 3 A. Yes. 24 Q. And on the second page following your CORBETT & ASSOCIATES HARTOLDMON0025567 THOMAS L. GOSSAGE 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 signature there's a stroke and then the initials LSC. . A. Yes . Q. Ordinarily that designation is used to indicate the secretary who typed the letter. A . Yes . Q. Do you recollect someone bearing the initials LSC was your secretary in November of 1970? A . No . Q. Do you recollect, Mr. Gossage, what contract is referred to in the letter dated November 9, 1970? A. I know that we had a contract for dielectric fluid with Westinghouse, Bloomington. Keith Kelly was the head of purchasing there. When I came into the job -- there had been a period of time in which we didn't have a signed agreement with Westinghouse, and this letter is a result of a meeting between myself and Keith Kelly and others from both of our companies, in which we were trying to resolve the differences on that contract. And this is an attempt to do that. Q. What differences existed as of the time of the meeting to which you refer? CORBETT & ASSOCIATES HARTOLDMON0025568 .I THOMAS L. GOSSAGE 27 1 A. Primarily their signing the termination 2 clause in the agreement. 3 Q. And the termination clause had to do with 4 the availability of a replacement product for 5 PCB-based dielectric fluids? 6 A. The termination clause had to do with our 7 taking the position that if industry -- and I'm 8 speaking of the dielectric capacitor and transformer 9 industry -- did not maintain close control over the 10 use of the PCB products and/or if, in our own 1 1 manufacturing facilities, we could not prevent the 12 product from going into the environment, that we 13 reserved the right to terminate the agreement. But 14 if they did, our intention would be to keep 15 supplying the industry until a replacement was 16 available. 17 Q. Do you know whether the sales to 18 Westinghouse were for sales of, for lack of a better 19 term, raw Aroclor rather than a mixed product? 2 0 A. Well, I do know what you mean by that. 2 1 There were some cases where we were 2 2 putting additives into what you just described as 2 3 raw PCB's or raw Aroclors. My memory would be that 2 4 Westinghouse purchased both straight -- what you CORBETT & ASSOCIATES HARTOLDMON0025569 THOMAS L. GOSSAGE 28 1 call raw -- PCB's and also some products with 2 additives in them. So I think they brought both. 3 MR. TALLON: Let me show you a 4 document which I will ask the Court Reporter to mark 5 as Gossage Exhibit 4 for identification, a one-page 6 document entitled Sales Contract, with Westinghouse 7 Electric Corporation of Bloomington, Indiana, and 8 apparently dated June 1970. This document does not 9 have a production number either. 10 (Gossage Deposition Exhibit No. 4 11 was marked for identification.) 12 THE WITNESS: I can't read that. 1 3 Do you want me to read this particular section? 14 BY MR. TALLON: 15 Q. Well, that was going to be part of my 16 plan, to question you about that, yes. 1 7 A. I need a magnifying glass. 18 Q. I will have to speak to Mr. Zimmer about 19 getting better copy. 2 0 Do you recognize that document? 2 1 A. Yes. I think I can say I recognize it. I 2 2 don't know what it is. ' 2 3 Q. It is a sales contract for Aroclor 1242 to 2 4 Westinghouse; correct? CORBETT & ASSOCIATES HARTOLDMON0025570 .t THOMAS L. GOSSAGE 29 1 A. Yes. 2 Q. During the period you served as Director 3 of Sales, do you recollect having seen sales 4 contracts to other purchasers of PCB-based products 5 from Monsanto, which included the language starting 6 towards the bottom third of the paper, beginning, 7 "It is understood that," and ending, "90 days prior 8 written notice"? 9 A. Repeat the question. Do I remember seeing 10 other sales contracts that had this clause in it? 11 Q . Yes. 12 A. Yes. I think I have seen other contracts 1 3 that have this or a similar clause in it. 14 Q. Do you recollect which customers of ' 15 Monsanto had contracts? 1 6 A. General Electric -- well, I remember 17 General Electric had contracts and I certainly 18 remember having seen General Electric contracts. 19 Q. Do you recollect having seen a sales 2 0 contract of Texas Eastern which included the 2 1 language which appears here? 2 2 A. No. . 2 3 Q. Do you recollect having negotiated with 2 4 representatives of Texas Eastern regarding the . CORBETT & ASSOCIATES HARTOLDMON0025571 THOMAS L. GOSSAGE 30 1 principles of termination of the product? 2 A . No . 3 Q. Looking for a moment, again, at the letter 4 of November 9, 1970, do you have a recollection of 5 ever having written a letter, a similar letter, to 6 Texas Eastern? 7 MR. ZIMMER: It lacks foundation. 8 THE WITNESS: What did you say? 9 MR. TALLON: He said it lacks 10 foundation. Technical objection. 11 The question is whether or not you 1 2 recollect having written a similar letter to Texas 1 3 Eastern. ' 14 THE WITNESS: I would never have 15 written a letter to Texas Eastern. 16 BY MR. TALLON: 17 Q. During the time that you served as 18 Director of Sales, Mr. Gossage, was there a program 19 to reformulate some of the PCB-based products? 2 0 A. In any number of applications? 2 1 Q . Yes . 2 2 A. Yes. 2 3 Q. And as best you recall, what was the 2 4 reason for planning to reformulate some of the CORBETT & ASSOCIATES HARTOLDMON0025572 THOMAS L. GOSSAGE 31 1 products? 2 A. Because we would have determined that they 3 were not closed systems and that they -- that we 4 could not assure ourselves that the product would be 5 kept out of the environment. 6 Q. Do you have a recollection of whether 7 there was any program to reformulate Turbinol 153? 8 A. No. I don't have any memory of that. 9 Q. Do you have any recollection of whether 10 there was a program to reformulate Pydraul products? 11 A. Yes. 1 2 Q. To what use were Pydraul products used, in 1 3 general? 1 4 A. hydraulic applications and any number of 15 industrial applications. 16 Q. In use in a hydraulic system, would the 17 Pydraul products being used in an open system or 18 closed system, as you understood it at that time? 19 A. At the time of reformulation? 2 0 Q. Yes. 21 A. That there a disproportionate amount 22 of applications which were not closed systems. 2 3 Q. Disproportionate amount of applications 24 that were not Pydraul products? CORBETT & ASSOCIATES HARTOLDMON0025573 I THOMAS L. GOSSAGE 32 1 A. Yes. 2 Q. What applications do you recall where the 3 Pydraul products were not being used in the closed 4 systems? 5 A. At least, in the plants that I visited and 6 the customers I visited, I saw applications where 7 the fluid was being used in punching, stamping, 8 forming metal parts where the hydraulic fluid was 9 escaping from the equipment into sewer collection 1 0 systems. 11 Q. What were the circumstances under which 12 you decided to visit plants where the Pydraul 1 3 products were being used? 14 A. It would have been a normal part of my job 15 to visit with major customers. But equally 16 important for me was to get some sense of how the 17 products were being used. It was in either or both 18 of those contexts that I would have visited major 19 customers. 2 0 Q. Did you ever visit an installation where 2 1 Turbinol 153 was being used by any customers? 2 2 A. No. I should say no, not to my 2 3 knowledge. I don't think so. 2 4 Q. During the early days of services as CORBETT & ASSOCIATES HARTOLDMON0025574 _I THOMAS L. GOSSAGE 33 1 Director of Sales, do you recall recommending an 2 increase in the price per pound of PCB-based 3 products? 4 A. Again, broadly in applications? 5 Q . Yes. 6 A. Yes. 7 Q. Do you recollect that part of the reason 8 that you recommended an increase in the price per 9 pound of PCB-based products was that Monsanto was 1 0 incurring certain costs due to the investigation of 11 PCB contamination of the environment? 12 A. No. I don't remember that. 13 MR. TALLON: Let me show you a 14 document which we will ask the Court Reporter to 1 5 mark as the next exhibit in order. It is a one-page 16 document dated January 18, 1971, bearing production 17 number 0 6 6 4 4 7 . 18 (Gossage Deposition Exhibit No. 5 19 was marked for identification.) 2 0 BY MR. TALLON: 2 1 Q. Do you remember seeing that memo? 2 2 A. No. 2 3 Q. Do you remember asking Mr. Papageorge for 2 4 information about expenditures during 1970, for the CORBETT & ASSOCIATES HARTOLDMON0025575 THOMAS L. GOSSAGE 34 1 Monsanto Aroclor Defense Program? 2 A. No . 3 Q. Do you know what is meant by the phrase, 4 Aroclor Defense Program? 5 A . No . 6 MR. TALLON: Let me show you a 7 document which we will mark as the next exhibit in 8 order, bearing production number TRAN 066446, dated 9 January 25, 1971. 10 (Gossage Deposition Exhibit No. 6 11 was marked for identification.) 1 2 (A brief recess was taken.) 13 BY MR. TALLON: 14 Q. Take a moment and review Exhibit 6, 15 please. 1 6 A . Okay. 17 Q. Have you reviewed that? 18 A. Yes. 19 Q. Do you recollect having written that memo 2 0 to Mr. Johnson in 1971? 2 1 A . No . 2 2 Q. Do you have a recollection of what 2 3 MCS-1016 was? 2 4 A. It is a very low polychlorinated biphenyl CORBETT & ASSOCIATES HARTOLDMONOQ25576 . I ----------------------------------------------------------------------------------------------------------------------------------------------------------- THOMAS I^T^SOSSAGE 35 1 liquid^ the were looking to^the higher-chlorinated 2 PCB ' s . * 3 Q. Was it being looked at for inclusion of 4 any particular product or products? 5 A. I would associate it with dielectrics. 6 Q. Would you associates it with Turbinol 153? 7 A. I have no memory the-g.oa'f tor. 8 Q. Did you ever hear that Turbinol 153 was 9 being formulated to be terminated on phosphate 10 esters? 11 A. I don't remember that. 12 MR. TALLON: Let me show you a 1 3 document that we will have the Court Reporter mark 14 as the next exhibit in order. It's a two-page memo 15 bearing production numbers STR-006187 and '6188. . 1 6 (Gossage Deposition Exhibit No. 7 17 was marked for identification.) 18 BY MR. TALLON: 19 Q. Have you read that? 2 0 A. Yes. 2 1 Q. Do you recall getting a copy of this memo 2 2 in or about January 1971? 2 3 A. No . 2 4 Q. Are you listed as one of the recipients of CORBETT & ASSOCIATES HARTOLDMON0025577 THOMAS L. GOSSAGE 36 1 the memo on the first page in the second column? 2 A. Yes . 3 Q. Do you have any recollection that Pydraul 4 products were terminated by January 1971? 5 A. Yes. 6 Q. Do you have a recollection of ever having 7 discussed with Mr. Johnson or anyone else whether 8 existing inventory of product should be sold before 9 new formulations were shipped to customers? 10 A . No . 11 Q. Do you recall ever correcting Mr'. Johnson 12 in connection with any statement he made not to ship 1 3 new formulations to customers before exhausting old 14 formulations? 15 A . No . 16 Q. Do you recall whether Pydraul A-200-B was 17 a replacement product for Pydraul A-200? 18 A. Yes. 19 Q. Do you recall whether Pydraul A-200-B 2 0 produced a low gross profit for Monsanto? 2 1 A . No . 2 2 Q. Do you recall ever hearing Mr. Johnson say 2 3 or hearing that Mr. Johnson had said that sales of 24 Pydraul A-200-B would be discouraged because it CORBETT & ASSOCIATES HARTOLDMONOQ25578 THOMAS L. GOSSAGE 37 1 produced a low gross profit? 2 A . No . 3 Q. Did you ever hear Mr. Johnson say that he 4 preferred to promote Pydraul F-9-A or Pydraul 312-A 5 in preference to Pydraul A-200-B? 6 A . No . 7 Q. Did you ever hear anyone in your sales 8 organization say that they preferred to promote 9 Pydraul F-9-A or Pydraul 312-A as a substitute for 10 Pydraul A-200 in preference to A-200-B? 11 A. I have no memory of that. 1 2 MR. TALLON: I asked you a moment 13 ago, Mr. Gossage, whether you recalled ever hearing 14 that it was proposed that Turbinol 153 be 15 reformulated with a phosphate ester. Let me now 16 show you a document which is not yet marked as an 17 exhibit, but will be in a moment, and which bears 18 production numbers TRAN 004966 and '4967. 19 (Gossage Deposition Exhibit No. 8 2 0 was marked for identification.) 2 1 THE WITNESS: Okay. 2 2 BY MR. TALLON: 2 3 Q. Have you read that? 2 4 A. Yes. CORBETT & ASSOCIATES I HARTOLDMON0025579 THOMAS L. GOSSAGE 1 Q. Does your review of the last paragraph on 2 Page 2 of this memorandum now marked as an exhibit 3 refresh your recollection in any respect with 4 respect to a plan to reformulate Turbinol 153? 5 A . No . 6 Q. Do you have any knowledge or recollection 7 whether General Electric was approached with respect 8 to the use of an NC ester in their gas turbines? 9 A. No, I don't. 10 Q. Did you have any contact at all with 11 General Electric respecting the use of Monsanto 12 products in General Electric-manufactured gas 13 turbines? 14 A . No . 15 MR. TALLON: Let me show you a 16 document, Mr. Gossage, which is dated October 6, 17 1970. It is titled, "PCB Environmental Problem 18 September Status Report," and bears production 19 numbers TRAN 003455 through 003467. 2 0 (Gossage Deposition Exhibit No. 9 2 1 was marked for identification.) 2 2 THE WITNESS: Do you want me to 2 3 read it? 2 4 BY MR. TALLON: ' CORBETT & ASSOCIATES HARTOLDMON0025580 THOMAS L. GOSSAGE 39 1 Q. Well, I will save you the trouble of 2 reading the whole document. I will tell you, if you 3 read the first page and then Page 5, under the 4 title, Industrial Hydraulics. 5 A. Okay. 6 Q. Do you have a recollection of having 7 received this memorandum from Mr. Papageorge in 8 October 1970? 9 A . No . 10 Q. Is the handwritten lettering on the first 1 1 page "PCB" yours? 12 A. I don't think so. 13 Q. Do you have a recollection of ever hearing 14 from Mr. Papageorge that Monsanto must insure that 1 5 warnings to customers are fully documented? 1 6 A. No . 17 Q. Do you recollect ever having taken any 18 steps as Director of Sales to instruct persons 19 reporting to you to insure warnings to customers 2 0 were fully documented? 2 1 A. No . 2 2 Q. Look for a moment, if you would, 2 3 Mr. Gossage, at Page 5 of the memorandum, under the 24 caption Industrial Hydraulics. The memorandum CORBETT St ASSOCIATES P lN O A U U i U A V U N N t. N.J U /00.' l AS^ K UUNUA HARTOLDMON0025581 THOMAS L. GOSSAGE 40 1 states that, "The removal of Aroclor 1242 from all 2 Pydrauls will require reformulation of A-200, 281, 3 540, 312, 230, 135, 150, MCS-153 and MCS-974." 4 Do you see that? 5 A. Yes . 6 Q. Does review of that sentence in this 7 memorandum refresh your recollection in any respect 8 as to whether you were part of a program considering 9 a reformulation of MCS-153 or Turbinol 153? 1 0 A . No . 11 Q. Do you have a recollection of any 12 conversation regarding reformulation of MCS-153 or 1 3 Turbinol 153 in early October of 1970? 14 A . No . 15 Q. In early October of 1970, you were just 16 taking on your position as Director of Sales? 17 MR. ZIMMER: That mischaracterizes 18 his testimony. It was October or November. 19 THE WITNESS: That's right. It was 2 0 October or November. 2 1 BY MR. TALLON: 2 2 Q. Your immediate job prior to taking on the 2 3 job of Director of Sales was in another - 24 A. It was in another division called New CORBETT & ASSOCIATES HARTOLDMON0025582 THOMAS L. GOSSAGE 41 1 Enterprise. 2 Q. Did the New Enterprise Division have 3 anything to do with the sales or marketing of the 4 PCB-based products? 5 A . No . 6 Q. Does the fact this memorandum was being 7 sent to you indicate that by October 6th you had 8 taken on or expected to take on the job of Director 9 of Sales of the Functional Fluids Group? 10 MR. ZIMMER: That calls for 1 1 speculation. ' 12 A . I don't know. 1 3 Q. Is there an organizing principle that you 14 can discern for the persons who are recipients of 15 this memo from Mr. Papageorge? 16 MR. ZIMMER: Same objection. 17 THE WITNESS: If he's objecting - 18 MR. ZIMMER: If you know, tell him. 19 MR. TALLON: If you know, you can 2 0 answer. He is not telling you not to answer. 2 1 THE WITNESS: I just don't remember 2 2 when I joined the unit. Does this suggest anything 2 3 to me? No. It doesn't suggest anything to me. BY 2 4 MR. TALLON: CORBETT & ASSOCIATES HART OLDMON0025583 THOMAS L. GOSSAGE 42 1 Q. Then the last question I had asked you is 2 whether there was a organizing principle which you 3 could discern -- I'm looking at the names of the 4 persons who are recipients of this memorandum from 5 Mr. Papageorge. 6 A. These are people who were either in the 7 Plasticizer Business Group or Functional Fluids, or 8 staff groups which would have been in support of 9 those two groups . 10 MR. TALLON: Okay. Do you want to 11 take your lunch break? 12 THE WITNESS: Yes, unless there are 1 3 two more questions that you want to get to some 14 point. 15 (A luncheon recess was taken.) 1 6 BY MR. TALLON: Owec-y 17 Q. Did you know a Wink e-Ionn.e (ph.)? 18 A . Yes. 19 Q. What was his position at Monsanto in the 2 0 early seventies? 2 1 A. He was the assistant general manager of 2 2 the Organic Division, or when the Organic Division 2 3 was named Industrial Chemical Company. He had some 2 4 other similar title. But I don't remember. But CORBETT & ASSOCIATES HARTOLDMON0025584 THOMAS L. GOSSAGE 43 1 that would have all been in the '70 to '75 time 2 period. 3 Q. cutty Did you report to Mr. Qaty* between '70 and 4 '75? 5 A. Not directly. 6 Q. Did you report to Mr. Cunningham, who 7 reported to Mr. Corey? 8 A. It is the other way around. Cunningham 9 was the senior-most person and Corey would have 1 0 reported to Cunningham. And Bergen would have 11 reported to Corey. 12 Q. When you left Monsanto, did you take with 1 3 you any desk calendars or personal note calendars 14 dating from the seventies? 15 A. I didn't, no. 16 Q. Did you maintain any pocket calendars, or 17 the like, from the early seventies? 18 A. No . 19 Q. When you left Monsanto, did you take with 2 0 you any documents relating to your service as 2 1 Director of Sales or Director of Marketing? 2 2 A . No . 2 3 Q. Have you ever heard the term, approved 2 4 list, used in connection with the sale of PCB-based CORBETT & ASSOCIATES HARTOLDMON0025585 .I THOMAS L. GOSSAGE 44 1 products to customers from '70 through '75? 2 A. Yes. 3 Q. What does that term mean to you? 4 A. That certain customers were on the 5 approved list for us to sell PCB products to. 6 Q. Some customers were approved for sales and 7 some were not? 8 A. Yes. 9 Q. What's the distinguishing criteria between 10 approved and not approved, if you recall? 11 A. A customer that had not bought from us in 12 the past would not have been approved until we 13 understood who they were and what they were doing. Ok 14 And depending upon the application, maybe even visit ' 1 5 their facility. 16 Q. Is it fair to say, then, that a customer 17 on the approved list was one about whom Monsanto 18 knew who the customer was and what they were doing? fcK* 19 A. ^ certainly knew who the customer was and 2 0 generally what they were doing, yes; what 2 1 application they were using the product for. 2 2 Q. Did the type of application have any 2 3 impact on whether or not the customer was on the 24 approved list? CORBETT & ASSOCIATES HARTOLDMON0025586 i THOMAS L. GOSSAGE 45 1 A. Yes. Certainly, as we got out of 2 applications like plasticizers and like the Pydraul 3 product line, the list of approving and having 4 people approved or not approved was to give us some 5 assurance that they weren't companies coming back in 6 buying products with applications that we had 7 discontinued. 8 Q. As of the end of 1971, what applications 9 had been discontinued, if you recall? 10 A. First plasticizers. And I can't tell you 11 exactly when the complete transition took place on 12 Pydrauls, but somewhere in that time period we 13 either had discontinued or were in the. process of 14 discontinuing all PCT's. 15 Q. Polychlorinated terphenyls? 1 6 A. Yes. 17 Q. Were dielectric fluids still sold after 18 1972? 19 A. Yes. 2 0 Q. PCB dielectric fluids, I meant by that 2 1 quest ion. 22 A . Yes. 2 3 Q. The approved list, who was in charge of 24 determining whether customers could be on the CORBETT & ASSOCIATES HARTOLDMON0025587 :I THOMAS L. GOSSAGE 46 1 approved list or not? 2 A. I don't remember. 3 Q. Did you have any responsibility for 4 determining whether customers were on the approved 5 list or not? 6 A . No . 7 Q. Did someone working for you have 8 responsibility for determining whether customers 9 were on the approved list or not? 1 0 A. That would be my memory. 1 1 Q. In fact, was more than one person 1 2 responsible for various product groups, such as one 13 person or more than one person for dielectrics or 14 one person or more than one person for industrial 1 5 fluids? 1 6 A. It would probably be people representing 17 both the Marketing Group or what you would call the 18 Product Group, and the Sales Group. 19 Q. After you became Director of Sales in 2 0 October or November of 1970, was there a gradual 2 1 process of winding down the sales of PCB-based 2 2 products in industrial fluid applications? 2 3 A. Certainly, as that includes Pydrauls, yes. 2 4 Q. Were there continuing efforts to make new CORBETT & ASSOCIATES HARTOLDMON0025588 THOMAS L. GOSSAGE 47 1 sales and attract new efforts -- or new customers 2 with respect to Pydraul products in 1971, so far as 3 you know? 4 A. Pydraul products are PCB's. They are the A 5 terphenyls and the phosphate esters. They all came 6 under the name Pydrauls, yes. We were all trying to 7 capture customers. ^<*3 8 Q. Let's draw our attention to ^PL^-based 9 Pydrauls. Were there continuing efforts to garner 10 customers for Pydraul products? 11 A. We were not soliciting customers after we 1 2 decided to discontinue PCB Pydrauls. 13 Q. When in time did you make that decision? 14 A. I don't recall specifically, but somewhere 1 5 at the end of 1970 or early 1971. 1 6 Q. Would it have surprised you to learn that 17 salesmen were attempting to garner new customers for 18 Turbinol 153 in 1971? 19 A. I wouldn't have any reaction, one way or 2 0 the other. I don't put that in the same category as 2 1 Pydrauls. 2 2 Q. Why is that? ' 2 3 A. Pydraul is Pydraul and Turbinol is 2 4 Turbinol. CORBETT & ASSOCIATES HARTOLDMON0025589 THOMAS L. GOSSAGE 48 1 Q. Wasn't the Turbinol associated with 2 Pydrauls in terms of the organization of Industrial 3 Chemicals Group? 4 A. Not to my memory. It was in a separate 5 category. 6 Q. Which category was it in? 7 A. I can only remember the kinds of reports 8 that I would see that would report on our financial 9 results on Pydrauls and financial results on other 10 industrial fluids which would have been the Santovac 11 products and the Turbinols. I think those were in 12 the same category, and Pydrauls were in a different 13 category. 14 Q. Is it your recollection that there was 15 more than one Turbinol product? 1 6 A. No. Neither that there was more than one 17 or only one. I have no memory of that. 18 MR. TALLON: Let me show you a 19 document which I will ask the Court Reporter to mark 2 0 as the next exhibit in order, a one-page document 2 1 dated September 20, 1971, bearing production number 2 2 TRAN 085106. . 2 3 (Gossage Deposition Exhibit No. 10 2 4 was marked for identification.) CORBETT & ASSOCIATES HARTOLDMON0025590 I THOMAS L. GOSSAGE 49 1 MR. TALLON: I will note for the 2 record that one of the carbon copies listed on the 3 right-hand corner is Mr. Gossage. 4 THE WITNESS: Okay. 5 BY MR. TALLON: 6 Q. Have you had a chance to review that, 7 Mr. Gossage? 8 A. Yes. 9 Q. Do you have a recollection of receiving 10 that memo from Dr. Richard in September 1971? 11 A . No . 12 Q. Do you have a recollection that Turbinol 13 153 was excepted from a program to reformulate 14 Pydrau1s ? 15 A . No . 16 Q. Do you have a recollection of learning in 17 any context or at any time that Turbinol 153 was 18 excepted from a reformulation program? 19 A. No . 2 0 Q. I had asked you earlier today whether you 2 1 had any recollection of dealing directly with 2 2 representatives at Columbia Gulf Transmission 2 3 Corporation. I believe your answer was that you did 2 4 not have such a recollection; correct? CORBETT & ASSOCIATES HARTOLDMON0025591 I THOMAS L. GOSSAGE 50 . .\ 1 A . Columbia Gulf or Columbia Gas. 2 Q. Columbia Gulf. 3 A . No, neither one. My memory was you said 4 Columbia Gas. But, no, either one of them. I guess 5 Columbia Gas might be a local Wilmington company. 6 I'm not sure. 7 Q. I think so. 8 Do you have any recollection of 9 sales efforts with respect to Columbia Gulf 1 0 Transmission Company? 1 1 A . No . 12 Q. Does looking at this document, which I 13 will ask the Court Reporter to mark as the next 14 exhibit in order, a call report dated November 4, 15 1971, and bearing production number TRAN 004380 1 6 through ' 4383 , refresh your recollection in any 17 respect as to whether you are familiar or recollect 18 sales efforts to Columbia Gulf Transmission 19 Company? 2 0 (Gossage Deposition Exhibit No. 11 2 1 was marked for identification.) 2 2 A . No . 2 3 Q. Do you have any recollection of having 24 heard that a company to whom Monsanto was attempting CORBETT & ASSOCIATES HART OLDMON0025592 I THOMAS L. GOSSAGE 51 1 to sell product was experiencing a loss of the 2 product in their natural gas compressors without 3 regard to whether you particularly remember Columbia 4 Gulf? 5 A. No . 6 Q. Are you familiar with something known as 7 the East Coast Terminal Episode? 8 A. No . 9 MR. TALLON: Let me show you a 1 0 document which we will mark as the next exhibit in 11 order; a one-page memorandum dated November 16, 12 1971, from T.L. Gossage to C.P. Cunningham, bearing 1 3 production number TRAN 005156. 14 (Gossage Deposition Exhibit No. 12 15 was marked for identification.) 1 6 THE WITNESS: Okay. 17 BY MR. TALLON: 18 Q. Have you reviewed that? 19 A. Yes. 2 0 Q. Do you recollect having written that 2 1 memorandum to Mr. Cunningham in November of 1971? 2 2 A. No. 2 3 Q. Do you recognize the handwriting that 24 appears on the upper half of the document? CORBETT & ASSOCIATES HARTOLDMON0025593 I THOMAS L. GOSSAGE 52 1 A. Not the handwriting. I recognize the 2 signature. 3 Q. Is it Mr. Cunningham's signature? 4 A. Yes. 5 Q. Do you recollect ever having a discussion 6 with Mr. Corey or Mr. Cunningham, in which either 7 expressed to you, in words or in substance, that the 8 Aroc1or-approved customer list concept was full of 9 holes? 1 0 A . No . 11 Q. Do you recall any discussions of any kind 12 with respect to either Cunningham or Corey, with 1 3 respect to the approved customer list? 14 A. Say that again? 15 Q. Do you recall any discussions of any kind . 1 6 with either Cunningham or Corey, regarding the 17 approved customer list? 18 A . No . 1 9 Q. The memorandum that is signed, is that 2 0 your signature? 2 1 A. Yes. 2 2 Q. The initials PH appear after yOur 2 3 signature. Do you recollect whether in 1971 you had 2 4 a secretary whose initials were PH? CORBETT & ASSOCIATES HARTOLDMONOQ25594 i THOMAS L. GOSSAGE 53 1 A. Yes. 2 Q. And do you recall her full name or his 3 full name? 4 A. Pat 5 Q. Was it an element of being on the approved 6 customer list whether a particular application was a 7 closed application or an open application? 8 A. I don't know the answer to that. 9 Q. Well, the memorandum refers to Turbinol 1 0 153 as a miscellaneous industrial fluid application 11 and indicates that it is also considered a closed 12 system. Do you recollect from what source you 1 3 garnered the information that Turbinol 153 was 1 4 considered to be used in a closed system? 15 MR. ZIMMER: Objection. No 1 6 foundation. 17 A. No. Let me state, I think, for the 18 record that I'm not confirming that I wrote this 19 letter. I'm confirming that this is my signature. 2 0 Frequently my correspondence is written by one of 2 1 our people. 2 2 MR. ZIMMER: That's why I objected. 2 3 Q. Do you have a recollection that someone 2 4 else wrote this particular memorandum for you? CORBETT & ASSOCIATES HARTOLDMON0025595 THOMAS L. GOSSAGE 54 1 A . No . 2 Q. Do you recollect, Mr. Gossage, whether 3 the approved list was phased out at a point in time 4 and that, in fact, no further sales of PCB-based 5 industrial fluids were made? 6 A. Totally in any application? 7 Q. Except for dielectrics. 8 A. I don't know that by the time I left the 9 position in 1975 whether there were only 10 dielectrics left or not. 11 Q. Do you know whether the approved list was 12 phased out over time? 1 3 A. In each application, as referred to in 14 Paragraph 2, as we went out of a particular area 15 shown there as Therminol, companies, as they 1 6 converted to some other product, would be shifted 17 from the approved to the not approved, so they 18 couldn't come back and buy again. I think that 19 practice was generally followed in each of the 2 0 areas. 2 1 Q. Having reviewed this memorandum, do you 22 have any greater recollection of what is meant by 2 3 the term, the East Coast Terminal Episode? 24 A. No. CORBETT & ASSOCIATES HARTOLDMON0025596 THOMAS L. GOSSAGE 55 1 Q. Let me show you another document, a 2 multi-page memo dated November 17, 1971, from C.L. 3 Bradford and N.T. Johnson to T.L. Gossage. It 4 refers to production numbers TRAN 005029 through 5 005032. 6 I will tell you, Mr. Gossage, I am 7 particularly interested in the first paragraph and 8 the discussion concerning Turbinol 153. It 9 continues on to Page 2. 1 0 (Gossage Deposition Exhibit No. 13 11 was marked for identification.) 12 BY MR. TALLON: 1 3 Q. Do you recollect having received a copy of 14 this memo from Mr. Bradford and Mr. Johnson in or 15 about November 1971? 1 6 A. No . 17 Q. Do you recollect ever having asked 18 Mr. Bradford or Mr. Johnson to consider and report 19 to you on the results of removing completely 2 0 polychlorinated biphenyls and terphenyls from 2 1 industrial fluids? 2 2 A. No . 2 3 Q. Do you recollect personally giving 2 4 consideration of what would happen to the sales of CORBETT & ASSOCIATES HARTOLDMON0025597 THOMAS L. GOSSAGE 55 1 industrial fluids if PCB or PCT properties were 2 removed ? 3 A. Absolutely not. 4 Q. Do you recall it being an issue at all? 5 A. I recall we were operating under the 6 practice of getting rid of the products that we 7 thought were of environmental concern without 8 thought to what the profit impact would be. 9 Q. Was part of the efforts of withdrawing PCB 10 and PCT products an attempt to keep market share? 1 1 A . Yes. 12 Q. Does reviewing the portion of the 1 3 memorandum under the caption Turbinol 153 refresh 14 your recollection in any respect as to whether or 15 not Monsanto, or someone working for you, had 16 contact with General Electric concerning a 17 substitute product for use in General Electric 18 turbines? 19 A . No . 2 0 Q. Just one other question on this memo, 2 1 Mr. Gossage. The last sentence of the portion of 2 2 the memorandum addressed to Turbinol 15 3', on Page 2 2 3 states that, "Our 1972 budget for this product is 2 4 325,000 pounds at $107,000, all of which we expect CORBETT & ASSOCIATES HARTOLDMON0025598 THOMAS L. GOSSAGE 57 1 to lose if we withdraw from the market," and so on. 2 MR. ZIMMER: Why don't we read the 3 rest. 4 THE WITNESS: "With less than the 5 notice recommended above." 6 BY MR. TALLON: 7 Q. Do you have a recollection as to whether 3 the figures quoted there, 325,000 pounds at 9 $107,000, are accurate depictions of the number of 10 pounds sold and at what profit? 11 A . No . 1 2 Q. Do you recall what the total sales budget 13 for your group was in 1972? 14 A . No . 15 Q. Do you have a sense of the relative amount 1 6 of sales attributable to Turbinol in 1972? 17 A . No . 18 Well, I'll put this number in 19 perspective for you. I can't tell you what the '72 2 0 budget was. But a figure of about 70 million 2 1 dollars in revenues would be the kind of sales 2 2 revenues generally in that time period. 70 is in 2 3 the context of -- $107,000 compared to about 70 2 4 million dollars. CORBETT & ASSOCIATES HARTOLDMON0025599 I THOMAS L. GOSSAGE 58 1 Q. Do you recollect ever having asked 2 Mr. Johnson and/or Jerry Davidson to prepare an 3 Industrial Hydraulic Fluids Transition Plan? 4 A . No . 5 MR. TALLON: Let me just show you a 6 document which we will ask the Court Reporter to 7 mark as the next exhibit. It is a memorandum dated 8 December 8, 1971, from C.L. Bradford and 9 J.H. Davidson to T.L. Gossage, entitled Industrial 10 Hydraulic Fluids Transition Plan, production numbers 11 TRAN 005033 through 005049. 12 (Gossage Deposition Exhibit No. 14 1 3 was marked for identification.) 1 4 THE WITNESS: Do you want me to 15 read the whole thing? 16 BY MR. TALLON: 17 Q. I was going to ask you about the situation 18 which appears on Page 1, the objective which also 19 appears on Page 1, the General Motors portion on 2 0 Page 2, and the customer notification portion on 2 1 Page 4. 2 2 Feel free, please. I don't want to 2 3 limit you, if you feel like you need to read the 24 entire thing. CORBETT & ASSOCIATES HARTOLDMON0025600 I THOMAS L. GOSSAGE 59 1 A. I will scan it. I just want to know what 2 you wanted me to focus on. 3 Is that it? 4 Q. Yes. 5 A. Customer notification, you said? 6 Q. Yes. 7 A. Okay. 8 Q. Do you recollect having received a copy 9 of this Industrial Hydraulic Fluids Transition Plan 10 from Mr. Bradford or Mr. Davidson? 1 1 A . No . 12 Q. Do you recall asking for a copy of this 1 3 Industrial Hydraulic Fluids Transition Plan, having 14 reviewed this memorandum? 15 A. No . 16 Q. Do you recall whether the objective stated 17 under the objective portion on Page 1 of this 18 memorandum is consistent or inconsistent with your 19 objectives during the period 1971 and '12, with 2 0 respect to PCB and PCT sales? 2 1 A. Could you restate that for me? 2 2 (The reporter read back the last 2 3 question.) 2 4 THE WITNESS: No. I don't have any CORBETT & ASSOCIATES HARTOLDMON0025601 I THOMAS L. GOSSAGE 60 1 memory, either way, of it. 2 Q No recollection -- 3 A . Whether it is consistent with or different 4 f r om . 5 Q Are you able to state whether you disagree 6 whether this was the objective at the time, or you 7 simply don't recall? 8 A . I just don't recall. 9 Q. Do you recall whether General Motors was a 10 customer with respect to industrial hydraulic 11 fluids? 12 A . Yes. 13 Q And was General Motors the single largest 14 customer for industrial hydraulic fluids? 1 5 A . I don't remember. They were big. 1 6 Q Do you recall what application General 17 Motors used industrial fluids for? 18 A . They had any number of applications in any 19 number of their plants, one or two of which I 2 0 remember visiting. But I can't either list the 2 1 applications or -- but there were certainly more 2 2 than one 2 3 Q. So it's fair to say that there was more 2 4 than one product involved? CORBETT & ASSOCIATES PfcNOAL) U J b A Y U N N t NJ U/U02 lA U K t t O N U A HARTOLDMON0025602 THOMAS L. GOSSAGE 61 1 A. More than one Pydraul formulation, yes. 2 Q. With respect to the caption, Customer 3 Notification, which appears on Page 4 of this memo, 4 Mr. Gossage, do you recollect having heard from 5 Mr. Bradford that the Chevrolet Division of General 6 Motors was irritated with respect to correspondence 7 from Monsanto regarding PCB's? 8 A . No . 9 Q. Do you recall any comment made by any 10 person concerning the state of happiness of 11 Chevrolet Division with Monsanto in the early 12 seventies, as related to PCB's? 1 3 A. No. 1 4 Q. Do you recall ever having asked 15 Mr. Bradford to remove this section of the memo or 1 6 to delete it, the section entitled Customer 17 Notification. 1 8 A . No . 19 Q. Do you know whether he did? 2 0 A. No. 2 1 Q. Would it surprise you to learn that he 2 2 did? ' 2 3 MR. ZIMMER: Assumes facts not in 2 4 evidence. CORBETT & ASSOCIATES I HARTOLDMON0025603 THOMAS L. GOSSAGE 62 1 A. 2 other. I don't have any reaction, one way or the 3 MR. ZIMMER: Are you talking about 4 this memo, whether that portion was removed? 5 MR. TALLON: That's what I am 6 talking about, yes. 7 MR. ZIMMER: I think we are 8 confusing a couple of different things, the letter, 9 itself, or this memo. 10 BY MR. TALLON: 11 Q. You were testifying earlier this morning 12 about your recollection of communications with 13 Mr. Bradford concerning his communications, with 14 Texas. Eastern. Other than the specific comments you 15 made this morning about Mr. Bradford, and that 1 6 meeting, do you have a recollection of discussing 17 Texas Eastern with anyone else employed by Monsanto? 18 A . No . 19 Q. Do you have a recollection of discussing 2 0 with anyone the product Turbinol 153 during the 2 1 period that you were Director of Sales? 2 2 A. No. `. 2 3 MR. TALLON: Let me show you a 24 document which we will mark as the next exhibit in ' CORBETT & ASSOCIATES HARTOLDMON0025604 I THOMAS L. GOSSAGE 63 1 order, a memorandum from R.E. Hatton to C.L. 2 Bradford, dated December 13, 1971, bearing 3 production numbers TEX 000798 through '800, to which 4 is attached a one-paged memo from C.L. Bradford to 5 T.L. Gossage, dated December 15, 1971, entitled 6 Santovac 1 and 2/Turbinol 153 Transition Program. 7 (Gossage Deposition Exhibit No. 15 8 was marked for identification.) 9 THE WITNESS: Do you want me to 10 read both memos now? 11 BY MR. TALLON: 1 2 Q. Please. 13 A. Oka y. 14 Q. I noticed, Mr. Gossage, you were just 15 glancing at the handwritten note on the first page. 16 Do you recognize that handwriting? 17 A . Yes. 18 Q. Is it yours? 19 A. Yes. 2 0 Q. Does that say, first word, no? 2 1 A. Yes. 2 2 Q. And then, hold harmless now, exclamation 2 3 point? 2 4 A. Yes. CORBETT & ASSOCIATES HARTOLDMON0025605 THOMAS L. GOSSAGE 64 1 Q. And then does it say change over ASAP? 2 A. Yes. 3 Q. And then does it say target June? 4 A. Yes. 5 Q. Do you recollect having made those notes? 6 A . No . 7 Q. Do you recollect having received a copy of 8 this memorandum from Mr. Bradford, or any other 9 source? 10 A. No . 11 Q. Does having reviewed this memorandum 1 2 refresh your recollection about any other 1 3 discussions you may have had with Mr. Bradford 14 Concerning Texas Eastern? 15 A . No . 16 Q. Do you recollect having made the 17 notations? 18 A . No . 1 9 Q. What significance, if any, do these 2 0 notations hold for you today? 2 1 MR. ZIMMER: Lacks foundation. 2 2 A. None. 2 3 Q. Do you interpret the phrase, hold harmless 2 4 now, exclamation point, to indicate to you that you CORBETT & ASSOCIATES HARTOLDMON0025606 THOMAS L. GOSSAGE 65 1 were desirous of having Texas Eastern signing a hold 2 harmless agreement in December or January, '71 or 3 '72? 4 MR. ZIMMER: His job is not to 5 interpret what it means now. He doesn't recall 6 making them, nor why he made them -- unless he has a 7 refreshed recollection from reading it -- 8 MR. TALLON: I am not asking for a 9 refreshed recollection. I'm asking him if that's 1 0 what it means to him. 11 MR. ZIMMER: Like I said, the 1 2 document speaks for itself. He says he doesn't have 13 any knowledge about it. So it is going to be tough 1 4 for him to interpret that any more than you or I can 15 do so . 1 6 MR. TALLON: The witness made the 17 notation on the document. I am asking him if it 18 means to him he was desirous to get a hold harmless 19 agreement from Texas Eastern as soon as possible. 2 0 THE WITNESS: I can't draw any 2 1 conclusion from it. 22 BY MR. TALLON: 2 3 Q. This means nothing to you, whatsoever? 2 4 A . No . CORBETT & ASSOCIATES HARTOLDMON0025607 THOMAS L. GOSSAGE 66 1 Q. Do you know what hold harmless agreement 2 or hold harmless refers to in the text of this 3 memorandum? 4 A. A hold harmless is a contractual 5 condition we place on a number of customers that if 6 they were going to continue to buy from us that it 7 was against our best judgment and they would have to 8 hold us harmless from any further or any future 9 litigation. 1 0 Q. Under what circumstances were the hold 11 harmless agreements solicited from Monsanto 1 2 customers? 1 3 A. It was a result of the corporate 14 management of Monsanto insisting that if we were *'*4+ 15 going to ooncidcr selling 'te-ho-m certain applications, 1 6 we would only do so if the customer would enter into 1 7 such a contractual agreement. 18 Q. To which customers -- and by that I mean 19 by name -- was this policy applied, as best you 2 0 recall? 2 1 A. As I best recall, it was applied to all 2 2 customers at a point in time when the corporation 2 3 decided they did not want to continue any further 2 4 risk in this area without an understanding from the CORBETT & ASSOCIATES HARTOLDMON0025608 I THOMAS L. GOSSAGE 67 1 customers that we would be held harmless. 2 Q. By all customers, are you referring to all 3 customers of PCB-based products or all customers of 4 industrial fluids -- 5 A. All customers of PCB-based products. 6 Q. Were hold harmless agreements solicited 7 from General Electric or Westinghouse? 8 A. Absolutely. 9 Q. Were they obtained? 1 0 A. Absolutely. 1 1 Q. Did Texas Eastern give Monsanto a hold 1 2 harmless? 1 3 A. I don't know. 14 Q. Did you have discussions with other 15 officers or executives of Monsanto -- strike that. . 1 6 Did you discuss the hold harmless 17 policy with anyone at Monsanto in late 1971? 1 8 A. I don't remember discussing it with 1 9 anyone. As I indicated, it was a decision taken by 2 0 the senior management of Monsanto, and given to us 2 1 in the Business Group to implement. 2 2 Q. When you refer to Duoinas-a--Gl otip, you are 2 3 referring to what, the Corporate Management 2 4 Committee? . CORBETT & ASSOCIATES HARTOLDMON0025609 THOMAS L. GOSSAGE 68 1 A. Yes. 2 Q. To your knowledge, was Mr. Bergen 3 consulted at all with respect to hold harmless 4 agreements? 5 A. Not that I recall. 6 Q. Were you consulted by corporate management 7 with respect to hold harmless agreements? 8 A . No . 9 Q. And what was your understanding, if you 10 recall, as to why a hold harmless was being 1 1 solicited from Texas Eastern? 12 A. I don't. 13 Q. Do you have a recollection as to when 1 4 sales of Turbinol to Texas Eastern were terminated? 15 A . No . 1 6 MR. TALLON: Let me show you a 17 document, a memorandum' dated February 8, 1972, from 18 T.L. Gossage to H.S. Bergen, bearing production 19 numbers TRAN 005195 through '5200. 2 0 Mark that as the next exhibit, 2 1 please. 2 2 (Gossage Deposition Exhibit No. 16 2 3 was marked for identification.) 2 4 BY MR. TALLON: CORBETT & ASSOCIATES HARTOLDMON0025610 t THOMAS L. GOSSAGE 69 1 Q. Will you just take a moment, please, and 2 read this exhibit? You can read as much of it as 3 you like to familiarize yourself with the exhibit. 4 I will only ask you about the last paragraph on the 5 last page. 6 A. The next-to-last page? 7 Q. The last page, Page 5, of the textural 8 pages. 9 A. The last paragraph or last two paragraphs? 10 Q. The paragraph beginning Santovac 1. 11 A. Okay. 12 Q. Does reading the last paragraph on Page 5 13 of this February 8, 1972 memo refresh your 14 recollection as to when Turbinol 153 sales to Texas 15 Eastern were discontinued? 1 6 A. No . 17 MR. TALLON: Let me show you a 18 document which we will mark as the next exhibit in 19 order, which is a memorandum dated January 4, 1972, 2 0 from T.L. Gossage to a number of people, including 2 1 H.R. Ford. 2 2 (Gossage Deposition Exhibit No. 17 2 3 was marked for identification.) 2 4 THE WITNESS: Okay. CORBETT & ASSOCIATES HARTOLDMON0025611 i THOMAS L. GOSSAGE 70 1 BY MR. TALLON: 2 Q. Did you review that, Mr. Gossage? 3 A. Yes. 4 Q. Do you recall sending that memorandum out 5 in January 1972? 6 A . No . 7 Q. You indicated a few moments ago that, as 8 of the time you left your position as Director of 9 Marketing in 1975, sales of PCB-based products were 1 0 still being made to certain customers. 11 A. Yes. 12 Q. And forgive me if you have already 13 answered this, but were those sales to customers 14 other than customers using the products for 15 dielectric fluids? 16 A. I think I said in the early question -- I 17 think you did ask that question and I said I don't 18 know whether other applications were still being 19 sold. I do remember dielectric was still being 2 0 sold . 2 1 MR. TALLON: Okay. Thank you. I'm 2 2 sorry to say that that's it. 2 3 (The Deposition concluded at 2:30 24 p.m. ) CORBETT & ASSOCIATES HARTOLDMON0025612 THOMAS L. GOSSAGE 71 1 I HAVE READ THE FOREGOING 2 DEPOSITION, AND IT IS TRUE AND CORRECT TO THE BEST 3 OF MY KNOWL DGE . 4 5 6 THOMAS' GOSSAGE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 CORBETT & ASSOCIATES HARTOLDMON0025613 1 INDEX 2 DEPONENT: THOMAS L. GOSSAGE 3 Examination by Mr. Tallon 4 5 E X H I B ITS 6 GOSSAGE DEPOSITION EXHIBITS 7 '1 Label 8 2 Memo dated February 26 , 1970 9 3 Letter dated November 9, 1970 1 0 4 Sales Contract 1 1 5 Memo dated January 18 , 197 1 12 6 Memo dated January 2 5 , 197 1 1 3 7 Memo dated January 25, 19 7 1 14 8 Memo dated September 16, 1971 15 9 16 10 Memo dated October 6, 1970 Memo dated September 20, 1971 1 7 11 1 8 12 Memo dated November 9, 1971 Memo dated November 16 , 197 1 19 1 3 Memo dated November 17 , 1971 2 0 14 2 1 15 Memo dated December 8 , 197 1 Memo dated December 13 , 197 1 2 2 16 2 3 17 24 Memo dated February 8 , 1972 Memo dated J anuary 4, 1972 CORBETT & ASSOCIATES 72 PAGE 2 MARKED 20 21 25 28 33 34 35 ` 37 38 48 50 51 55 58 63 68 69 HARTOLDMON0025614 73 1 CERTIFICATE 2 STATE OF DELAWARE) ) 3 NEW CASTLE COUNTY) 4 I, Phillip S. Storch, Registered 5 Professional Reporter and Notary Public within and 6 for the County and State aforesaid, do hereby 7 certify that the foregoing deposition of THOMAS L. 8 GOSSAGE, was taken before me, pursuant to notice, at 9 the time and place indicated; that said deponent was 10 by me duly sworn to tell the truth, the whole truth, 11 and nothing but the truth; that the testimony of 12 said deponent was correctly recorded in machine 1 3 shorthand by me and thereafter transcribed under my 14 supervision with computer-aided transcription; that 15 the deposition is a true record of the testimony 16 given by the witness; and that I am neither of 17 counsel nor kin to any party in said action, nor 18 interested in the outcome thereof. 19 WITNESS my hand and official seal 2 0 thi s_/_j'2!L<^ay of September A.D., 1992. 21 22 Phillip S. Storch 23 24 CORBETT & ASSOCIATES HARTOLDMON0025615 ATTACH TO THE DEPOSITION OF Thomas L. Gossa^e IN THE MATTER OF Transwestern Pioeline Co. vs. Monsanto Co. TAKEN Thursdav. Aueust 6. 1992 ERRATA SHEET INSTRUCTIONS: After reading the transcript of your deposition, please note any change of correction and the reason therefore on this sheet. Do not make and marks or notations on the transcript itself. Please sign and date this sheet and return it to the court reporter whose name appears on the transcript. Thank you. PAGE LINE CHANGE OR CORRECTION * REASON Numerous soelline. Rrammatical. and context errors shown on the following oases: 5. 8. 10. 15. 28. 81. 85. 42. 4 3. 44. 47. 50. 58. 66. and 67. I have read the foregoing transcript of my deposition and, except for any corrections or changes noted above, I hereby subscribe to the transcript as an accurate record of the statements made by me. Dated: October 14. 1992 (Signat ponent) SWORN TO AND SUBSCRIBED BEFORE ME THIS __199d . " day of NOTARY Carol M. Kelleher My Conir.'jis?icn Expires 11/14/94 HARTOLDMONOQ25616 THOMAS L. GOSSAGE 71 1 I HAVE READ THE FOREGOING 2 DEPOSITION, AND IT IS TRUE AND CORRECT TO THE BEST 3 OF MY KNOWLEDGE. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 CORBETT & ASSOCIATES i HARTOLDMONOQ25617 This product contains polychlorinated bi phenyls, which some studies have shown may be an environmental contaminant. Extreme care should be taken to prevent any entry in to the environment through spills, leakage, use, disposal, vaporization or otherwise. . 1020 V' > 9 s A I ' N I * v TRAN 0OOOO7 , - '<[, HARTOLDMON0025618 / Monsanto1 MOM (NAME ft LOCATION) N. T. Johnson St. Louis February 16, 1970 POLLUTION LETTER TO P. Craska - Wilmington C. Clay - St. Louis J. H. Davidson - Los Angeles R. A. Damiani - Chicago G. F. Fague - Detroit R.A. Garcia - Akron R. Garnsworthy - Melbourne J. A. .Heilala * Akron' / R. Irwin - Houston.'' . J. S. Pullman - New York J. J. Roder - Chicago R, Giles - Melbourne P. J. A. Marsh - Brussels R. Enrhardt - New York T. W. One son - Montreal J. N. Haggart - Brussels V. Morse - St. Louis J. Brydon - Montreal R. Graham - New York P. G. Benignus J.G. Bryant D. E. Roush R. Fa D.A. Hall D. R. Pogue D. F. Smith D.A. Olson 7/ Attached is a list of questions and answers which may be asked of ' . you by customers receiving our Aroclor-PCB letter. You can give / verbal answers; no answers should be given in writing. If the ' * customer asks a question you can't answer or if he wants an i answer in writing, then send his questions to me and we will . answer from here. We want to avoid any situation where a customer wants to return . fluid. The new reformulated products will be available within a month. We would prefer that the customer use qp his current /inventory and purchase Pydraul 625A, Pydraul ACA, Pydraul ACA / Winter Grade and Pydraul 540A when available. He will then top off with the new fluid and eventually all Aroclor 1254 and Aroclor 1260 will be out of his system. We don't want to take fluid back. Sell him the replacement. We must be very positive in our approach with each customer ' ' relative to our decision to eliminate the use of Aroclor 1254 and Aroclor 1260 in our Pydraul products. We (your customer and Monsanto) are not interested in using a.product which may present a problem to our environment. We certainly have no reason to be defensive or apologetic about making this change. The decision to change makes good sense and our customers should commend us, not criticize our actions. No an e has forced us to make this / :/ TRAN 085833 IN.IS HARTOLDMON0025619 2 change. We Have done it to keep our customers out of possible trouble. They should appreciate our effort, and stay with us as a customer on the reformulated Pydrauls. To make this change has cost us research monies and time. Fortunately, we possess the technical skills to make a change in our formulations without affecting the performance of products. Be positive. Take the offense. Don't let a customer or competitor intimidate you. I doubt if our competitors know whether their product could present a problem to our environment. You might ask your customer, if he has ever asked Houghton or Stauffer, Carbine, etc. about the effects of their products. We should also recognize (point this out to your customer) we ' must clean-up. The Chemical Week article gives him an idea of laws in effect in his state. Read this yourself. Be familiar with the data on each state in which your customers are located. Use this in your discussions. ' We have no replacement products for Aroclor 1254 and Aroclor 1260. * We will continue to make these products; however, customers , will have to use their own judgement on continued use. We can't afford to lose one dollar of business. Our attitude in discussing this subject with our customer will be the deciding factor in our success or failure in retaining all our present business. Good luck. ,- (We have also attached a copy of the letter sent to transformer customers. ) - J / N. T. Johnson lb TRAN 085834 HARTOLDMON0025620 Monsanto Mon*nto Company 000 N. Llndfcrjh Bovlcvard St. loul, Mldourl 03100 Phone 014) 0B4-1OOO February 9, 1970 V***MC CHCMICAlt OMSfON Dear Sirs Recently several newspaper and magazine articles have been published indicating that Polychlorinated Biphenyls (PCBs) have been discovered at some points in some marine, aquatic and wildlife environments. The quantities detected are said to be in the parts per million and parts per billion categories. It is claimed that the PCBs found strongly resemble chlorinated biphenyls containing 541 and 60% chlorine by weight. Products which are sold by Monsanto under the trade names of Aroclox 1254 and 1260 do contain chlorinated biphenyls. In addition to Aroolor 1254 and 1260, Monsanto sells certain functional fluids containing Aroclor 1254. These include Pydraul 625, Pydraul AC, Pydraul AC - Winter Grade, Pydraul* 540, Therminol PR-3 and certain dielectric formulations. Several other companies around the world also produce products containing chlorinated biphenyls. As your supplier of Aroclor 1254 and 1260 and formulated products containing 1254, we wish to alert you to the potential problem of environmental contamination as referred to in the newspaper and magazine articles. We would like to point out the following additional facte. 1. Products such as Pydraul 90, 135, 230, 312, A-200, P-9, 150 and 60, Turbinol 153 and Therminol FR-1 and FR-2 are not formulated with Aroclor* 1254 or 1260. 2. PCBs with a chlorine content of less than 54% have not . been found in the environment and appear to present no potential problem to the environment. TRAN 085835 HARTOLDMON0025621 2 We have developed, and ara now tasting, naw formulations to raplaca tha Aroclor*1254 and 1260 components in our Pydraul* products. Tha naw products appear to be equal in performance and to have similar physical properties. We feel that all possible care should be taken in the applica tion, processing and effluent disposal of these products to prevent them becoming environmental contaminants. Of interest to you may be an article in Chemical Week, October 29, 1969 regarding water pollution standards set by each state in the Union. It is attached. This article reflects that good manu facturing practice in the future may require that no products used by any company should find their way into waterways. Sincerely yours. nlc Attachment /(- * v Donald A. Olson Director of Sales Functional Fluids Group TRAN 085636 HARTOLDMON0025622 Monsanto Monsanto Company 000 N. Llndbargh Boulivird St. Louis. Mitsouil 63186 Phonp: (314) 084-1000 OfiOAHtC CHEMICAL t DMSIOH February 18, 1970 Dear Sir: Recently several newspaper and magazine articles have been published indicating that Polychlorinated Biphenyls (PCBs) have been discovered at some points in some marine, aquatic and wildlife environments. The quantities detected are said to be in the parts per million and parts per billion categories. It is claimed that the PCBs found strongly resemble chlorinated biphenyls containing 54% and 60% chlorine by weight. Products which are sold by Monsanto under the trade names of ArocloiQ 1254 and 1260 do contain chlorinated biphenyls. In addition to Aroclox 1254 and 1260, Monsanto sells certain functional fluids containing Aroclor 12 54, These include Pydraul 625, Pydrauf AC, Pydraul AC - Winter Grade, Pydraul 540, Therminof FR-3 and certain dielectric formulations. Several other companies around the world also produce products containing chlorinated biphenyls. As your supplier of Aroclox 1254 and 1260 and formulated products containing 1254, we wish to alert you to the potential problem of environ mental contamination as referred to in the newspaper and magazine arti cles. We would like to point out the following additional facts: 1. Products such as Pydrau 90,135, 230, 312, A-200, F-9, 150, and 60, Turbinol 153 agd Therminol FR-1 and FR-2 are not formulated with Aroclor 1254 or 1260. 2. PCBs with a chlorine content of less than 54% have not been found in the environment and appear to present no potential problem to the environment. TRAN 005637 HARTOLDMON0025623 2 We have developed! and are now testing* new formulations to replace the Arodor1254 and 1260 components in our Pydraui products. The new products appear to be equal in performance and to have similar physical properties. We feel that all possible care should be taken in the application, processing and effluent disposal of these products to prevent them becoming environ mental contaminants. Of interest to you may be an article in Chemical Week, October 29, 1969, regarding water pollution standards set by each state in the Union. It is attached. This article reflects that good manufacturing practice in the future may require that no product used by any company should find their way into waterways. We realise that you have marketed or may now market transformers and other electrical equipment containing dielectric fluids which include Aroclor 1254 and 1260. Although these fluids are sealed into such equip ment it is recognised that occasionally the fluid may be lost through leaks resulting from equipment misuse or equipment repair necessitating replace ment of the fluid. Since the dielectric fluid contained in this equipment is only an incidental part of the over-all unit manufactured by you, we are not notifying the purchasers of such equipment of the potential environmental contamination problem described in this letter. We do recommend, however, that you notify such equipment users of this problem. Sincerely yours, lb Attachment Donald A. Olson Director of Sales Functional Fluids Group TRAN 065836 HARTOLDMON0025624 POSSIBLE CUSTOMER QUESTIONS ON PCBs Question 1 What article# have appeared on the Will you send me copies? Answer; In the U. S., newspaper articlos have appeared in the San Francisco Chronicle on Feb. 24, 1969, the San Francisco Examiner on' Feb, 25, 1969, and the Hartford Times on Aug. 3, 1969. Numerous articles were generated by the Wisconsin "DDT Hearings" in . May,' 1969. At the hearings, witnesses discussed the problem of PCBs as "interfering substances" in their search for DDT in . . the environment. PCBs, they said, produced peaks on a gas chromatograph similar to the ^>eaks produced by DDT. In no case was PCB indicted at the Wisconsin hearings. ` '/ / Copies of the articles will be made available on request. Regional .managers should contact E.V. John, Public Relations Manager Organic Chemicals Division, in St. Louis and copies will be for- ` warded to the customer through the regional manager's office. In addition to the newspaper articles mentioned above, there have been radio broadcasts. At the timo of the San Francisco Chroniclo and Examiner articles, radios in tho San Francisco area slIso carried the story. In August, tho sports editor of tho Hartford Times syndicated a radio broadcast on the subject of PCBs, and in Dec., 1969,'the Canadian Broadcasting po. (radio) carried an interview they taped with a member of our mo dical department. ' // ' \ Ques' tio--n --Z // / ' ** *t \ . _* Were Monsnato's Aroclors specifically mentioned in these articles? If so, which ^nes? ' / - 'v .' TRAN 085839 HART OLDMONOQ25625 Answcr z Monsanto's Aroclors were mentioned in some of the articles but . only in the San Francisco Chronicle story in Feb,, 1969, was Aroclor 1262 specifically mentioned by number. In several of the articles, Monsanto was also identified as the sole U.S. producer of polychlorinated biphenyls, marketed under the tradename of Aroclor. 1 Question 3 What did the articles on tho PCB problem say? Answer Since the outset of the "PCB problem", when the first article, appeared in tho U.S. press in Feb., 1969, the whole question has been closely interwoven with the question of DDT as a possible environmental contaminant. . The San Francisco Chronicle article carried a headline, "A Menacing New Pollutant." In rather sensational style, it identified PCB as a threat to birds and humans, highly toxic in & gaseous j state and related to known cancer-causers. PCB presence in the environment is rising swiftly, the article stated. The Examiner article called PCB a "plastic pollutant in the Bay and Mothers* Milk." This article called PCB an "alarming" new chemical pollutant that is playing a role in the declining peregrine falcon population, has Uen found in mothers' milk, and is the "latest addition to a growing list of chemicals in the ocean---- the newest symptom of man's chemical invasion of the ocean. " ' These two articles quoted Dr. Robert Risebrough, a researcher at the Institute of Marine Resources in the University of California's^ Department of Nutritional Scientists, on the detrimental effects of PCBs. Later Dr, Risebrough said he had been misquoted in some newspaper stories. . : The Hartford Times story called PCB pollution a "new puzzle. " Less sensational than the.San Francisco, articles, the Times gave an account of PCBs boing found in the environment arid the studies under way to determine their biological effects. This article, . says Dr. Risebrough, tends to clear PCB of blame. TRAN 085840 HARTOLDMON0025626 Articles generated by the Wisconsin DDT hearings'generally discussed PCB as an interfering' substance'discoverod in scientists1 search for DDT in the environment. Dr./Risebrough said at the hearings that there was no proof at the foment that PCB alone can cause thin eggshells, one of the phenomenon . that he had discovered in studying thy<feclining population of the peregrine falcon. // LEGISLATION Question 1 Aro thoro any Fodo ral/Stato/local laws undor which tho use or discharge of Aroclors could be prohibited? Answer; / `/ No existing Federal, State, or local laws prohibit the discharge of Aroclors. However, in & number of states the basic water pollution control legislation is so broad that state agencies can prohibit chemicals,- deemed necessary, from being discharged. // Question Z / Is the DDT and tho PCB problem related? Answer i I I We arc not a manufacturer of DDT or other chlorinated hydrocarbon pesticide and, thcroforc, have no knowledge of the seriousness of the charges against DDT other than what has been so widely publicized on TV, in the press and in technical journals. To the extent that both DDT and PCB are chlorinated hydrocarbons, then there is a similarity. They are sufficiently different in their chemical structures , however, that it would be entirely wrong to assume that both behave /in the same way in the environment. There is another and more / obvious difference. DDT and other chlorinated hydrocarbon pesticides were specifically designed for a job that obviously leads to their being scattered in wide spread fashion across the countryside. Rain, birds, wind, insects further scatter these pesticides in an uncontrollable manner. PCBs are not used in this fashion and . TRAN 085841 / HARTOLDMON0025627 4 Monsanto has never sought to promote this. This, we believe, is an important distinction that should not be overlooked if DDT and PCB are linked as a common pollutant of the environment. To our knowledge PCBs have never been identified^in the absence of DBT or other chlorinated hydrocarbon pesticides. Question 3 . Could it be PCB that's causing the environmental problems and not DDT? ' Answer: We believe that present-day GLC afid mass spectrometrie techniques are sufficiently accurate to be able to differentiate between DDT, related pesticides, their metabolites and PCB. Question 4 What authority do State and local governments have in banning/ controlling the use of PCBs. Answer: . . They do have authority to ban or control use of any substances ' they consider harmful. ' , ` EFFLUENT AND ITS CONTROL Question 1 - How do I dispose of Aroclor 1254/1260, etc. effluent from my plant ? . ' Answer: `' / We would suggest collecting all process effluent, equipment washings, tank or drum washings and then rogularly taking to the nearest /. toxic materials dump. You may also be able to use a sanitary land fill if permits arc issued for this in your locality. We don't / recommend foeding this material to local sewage treatment plants or taking out to sea in drums for dumping. These methods do not / ./ I / TRAN 065642 i A' HARTOLDMON0025628 5 // /solve the problem of contamination. We are working on the disposal of these materials by incineration and biodegradation/ Our work in these areas has-not yet reached the stage where/ ' we can offer practical suggestions. It'is of interest to note/ however, that research is underway fo find catalysts to make DOT self-destructive. The possibility exists that we coul< find catalysts that would destroy PCBs in settling tanks con* structed to catch all your effluents. / >' Question 2 / Can 1 test my effluent to see if my,effluent har no Ayoclor 1254, etc. ? . . '/ ; Answer: / Yes. Analytical equipment is available that can do this if the proper technique is used. The basis of/he method is GL.C or gas liquid chromatography. Are you or anyone in your company familiar with this? Do you'have GLC equipment? If you do, we can send you a description of a method that could.identify PCB. If not,/there may be a good analytical testing laboratory in the vicinity where you could send samples and rely on the res; ts if you want to test your effluent.. Question 3 What is a "safe1 PCB level for of; uont leaving my plant? / Answer: / As our letter points out, parts por million (ppm) and parts per billion (ppb) have been mentioned in the published articles. There is still a lot of doub/as to how absolute any quoted ' values are. To bring this^into the realms of reality, this definition of ppm and ppomay help clarify things. / 1 ' To give you a practical example, the escape of one-two gallons per day could lead t/samples in a stream beside the plant showing 10-30 ppb on analysis. . .. ' TRAN 085843 HARTOLDMON0025629 / Question 4 You must have quite a control problem at your plants--I would think Monsanto's Aroclor plants are/the major polluters--how are you handling control?/ Answer: The Aroclor products wc make to se^l at a profit, so economics dictate maximum housekeeping, minimum loses. The Aroclor process is a "dry process" or closed systom. Question 5 /^ How does Monsanto think Aroclor* can got into tho environment and cause so much pollution^? Answer: . Disposal, leakage from/systems using it, spills, etc.< Question 6 . If I analyze my effluent stream and find ppb there, how do 1 ` know it didn't come from air-borne contamination or was present in the process water that I pump from the XYZ river into my plant? / Answer: Analyze wator entering your plant and compare. Thero is a mcthod.availablo for sampling air. - Question 7 ' You seem to think from the tone of your letter that the source ' of pollution is from effluent disposal into streams. In .my process, Aroclor 1254, 1260, etc. vapors escape. What pre- / / cautions can 1 take to prevent (a) employee problems and / / (b) escape of vapors into the atmosphere? / ' / ... / / / / TRAN 085844 / ! :> !: HARTOLDMON0025630 7 Answer (7): / ' Articles on PCB interference with pesticides analysis have mentioned the possibility of loss to the atmosphere from vaporization when Aroclors are heated. We find this hard , to believe and it warrants considerable investigation. TOXICITY /: ' /. ' Question 1 . If PCB is a danger to fish and birds, how about humans 7 . / Answer: ' The amounts being found in the environment are not considered a danger to humans or fish. The whole question on chlorinated pesticides relates to birds. Question 2 ' Are Aroclor 1254/1260, etc. more toxic than other Aroclors? Why? / ; Answer: \ . . / i , There is a difference in toxicity depending on degree of chlorination. This is not to say that higher chlorination is more toxic than lower chlorination. The alleged PCB problem is not really related to dogreo of toxicity. j I / HARTOLDMON0025631 8 Question 2*c What's the difference between a chlorinated biphenyl and a terphenyl? / . Answer: A terphenyl has three bonzenos linked togethor and biphenyl only two. They are, therefore, similar but different, just as naphthalene is different from benzene. ' Question 3* /' / / Why should PCB be an environmental'contaminant and chlorinated terphenyls not? Answer: I don't think there'is any positive answer on this and I can't give you any theories. However, I would emphasize/that not - all PCBs appear to be contaminants. Those such as Aroclor 1221, 1232, and 1242 haven't been identified in marine, aquatic and wildlife environments. Chlorinated terphenyls - at least/those made by Monsanto-- have not been identified in th ' ment either. Question 4 Since you sell other PCBs beside Aroclor 1254 and 1260, why are they not found in the environment?/ ' Answer: - One reason could be that they biodegrade and hence never build up to a level where they can bo labelled persistent contaminant: Therefore, although you would find ii in an effluent stream if you analyzed it just after you poured PCB into it, its absence when a river, for example, is analyzed downstream at a later date would indicate degradation^- bacterial organisms.' We are actively working on this aspect of biodegradability in our laboratories at this time. Results of this type of work won't come to hand quickly but our preliminary work on PCBs of less th lorinc looks promising. . TRAN 085846 / HARTOLDMON0025632 Quest! on 5 In your letter, you make no1 mention of Aroclor 1262 and 1268. What is their status? . Answer: It could be that their semi-solid/solid water insoluble nature means they are far, far less likely to become "mobile" r contaminants. It could be that their structural differences f from Aroclor 1254 and 1260 are responsible for the apparent / - lack of a problem. In any event, they have not been identified by scientists in the environment and--believe me-- a lot of '/ scientists seem to be looking for PCBs. ' /' Question 6* Both Aroclor 5460 and 1260 contain 60% chlorine. Why is one a problem (1260) and apparently not the other (5460)? I Answer: / A terphenyl has three benzenes linked together and biphenyl only two. They are, therefore, similar but different, just as naphthalene is different from benzene. I would emphasize that not all PCBs appear to be contaminants. Those such as Aroclor 1221, 1232, and 1342 haven't been identified in marine, aquatic and wildlife environments. Chlorinated terphenyls--at least those made by Monsanto-- have not been identified in the environment,either. ' Question 7* / / Does this PCB problem mean that you have discontinued efforts to get Aroclor 5460 approved by FDA? Answer: No. / n ./ ./ / L. . /' L V / / ,/ / TRAN 085847 HART OLDMON0025633 Question S1-1* Is the reason for not resubmitting your petition to the FOA for approval of Arodor 5460 due to this PCB publicity? Answer: No. Question 9 What's the problem then? Answer: We aro bringing a new solid Arodor plant on-stre the next two-thrcc months. We want to make sur< the same quality Arodor 5460 wo used in our feed studios for the FDA. Once we're sure that's O. K feel it will be--then we'll get the petition moving i FDA clearances do take time. j Question 10 Does this PCB publicity mean that FDA approval < Arodor 5460 is not going to be'obtained? Answer: We have no reason to think the two things are related. Arodor 5460 is not chemically a PCB.-' The delay resulted from the need to set up certain analytical methods to satisfy l/DA. This involved analytical instrumentation and is being completed now. It is my understanding we plan to re ' r petition although I personally don't know the exact da . / /containers Question 1 Joe Doe buys all my used Arodor drums without me having to wash them. I get $3. 00 a piece/ 1 can't afford to wash them out. Even if I did* what would I do with' the washings? * ii TRAN 085848 HARTOLDMON0025634 Jl (Question 1 con't) What should I do ? Shoule/l toll Joe Doo ? Will Monsanto take them back or pay me $3y00 plus my costs to take them to a dump? Answer: Don't have an answer at this time. We just don't know. / . APPLICATIONS Question 1* Could Aroclor 1254/1260 escape from my sealant/adhesive/ coating.whatever into the environment? ' Answer: This will depend entirely on the final use to which your product is used--its ultimate disposition. ,/ Question 2* My product X contains Aroclor 1254/1260. What should 1 tell my customers ? , 1 ' /~ / Answer: Tell your customer--We want to advise you of a possible environ mental problem. Without knowing what your customer does with product X, this is hard to answer. (We would say that ' it would not seem wise to use Aroclor 1254 or 1260 for keeping dust down on the roads, for use in dental sealing compounds or as carriers for pesticides. ) 'j Only if you suspect or are told/thia is / ./ / Question 3 what'the application is. ' / Does Monsanto intend to continue manufacture of Aroclor 1254/ 1260, etc. ? .- 1/ : f. t / r / / /! /1 V / / TRAN 085849 HARTOLDMON0025635 Answer (3): v 1 have been given no indication otherwise. / / 12 Question 4* / .! Should I look for replacement for Arodor 1254/1260, etc. ? Answer V ' I think only you can decide this. How easy would this be for - you? Do you have any other replacement product in mind? . Question 5* '' / .' / ' Does Monsanto have replacement products for Arodor 1254 and 1260 ? / '' ' Answer: '/ / ' j. ' As you know, we have over eighty plasticizers in our line and there's quite a bit of product interplay so it is possible that ' there is another product in our line that might replace them. What resin do you use? Perhaps we could look at these re sin/plasticizer Selector Charts in the back of the Blue Book. I've got it with me. ' / .: , ; i Question 6* \ Is Monsanto working on replacements for Aroclor 1254 and 1260? Answer: ' i ! These research fellows are always busy on things like that. To some people Aroclor 1254 and 1260 have draw^backs.-- quite apart from present publicity on PCB. Aroclor 1254 is fairly volatile. Aroclor 1260 is very viscous and difficult to handle. For polysulfide sealants, for example, the technic people in St. Louis have just sent us-data on products that wiU behave better than Aroclor 1254 in polysulfide sealants. . Maybe there's something here for you to look at. Let's go over it. .' TRAM 085850 / / HARTOLDMON0025636 Monsanto CfMH ' / / >. too fc icmipoefh *>** V- ft (mu f)<M '** riMt AMI tM.fDOO ' / November 5, 1S70 Hr. Keith Kelly `' ; . Menager of Furchaelng .. . Tower Systens ' . Westlnghouae lectrle Corporation Bax *1*1 Bloomington, Indiana <*7^01 . Bear Keith: At our meeting in St. Louis on ;0 October you asked that Konronto clarify several Items relative to tne Aroclor 12b2 sales contract between our respective companies. . . First, I want to confirm that our existing contract, by this letter. Is erpanbed to Include Aroclor 1232. We . request thut Vertlnghousc ure the sane precautions that you now do wltn /.rosier 32*2 to prevent tne product from entering into the environment throui^i spills, 1 ear.age, disposal, vuporisatlon or otnerwise. Only those applications where the product can he totally contained should be considered. At your convenience I would lU.e V.'cstinghouse'e estimated requirements through June 1575* .` \ . ` -- The second item Is the contract termination clause. . ' Originally the clause.wee added to the contract to protect : . " against the unknown. At the time, Monsanto did not know - r ' , If the industry, in their use of the Aroclors, could and . ..v'.-- ; would be willing to "close the system" and prevent the : : ; produets from entering Into the environment. We did not know whether Monsanto could "clone the system" vrlthln our ?n production facilities. Both the electrical industry ' t , and Monsanto have made considerable progress in the last ' ; v six months. *.- .. . ' . \ Monsanto* management le committed to continuing the supply of . this product to the electrical Industry ec long ae all ` . . customers continue to take the action necessary to preventthe Aroclors from entering Into the environment and until' . a suitable alternate product available. . r . : ' This la now the Intent of the termination clause. Monsanto will terminate an agreement with a given cuotoecr if the . Vq\\W: / / w- ;* * v CJ. , * ,N.\- HARTOLDMON0025637 4 r; % * -. . x -2- fir. Keith Kelly .. ,' November 9, 1570 Wcctingnouce Electric Corporation -. ... . . _ indurtry In Generc_l or that specific customer doee not .. adequately prevent the product from entering the ' . i cnvlrouscnt. Ksnsanto coy teralnate ti* agreement ir a . rultablc substitute product heeoses available. - . 1 hope this adequately covers your company's concern of . .. r.on.'sntc'c Aroslor plans for the future. As I said In ` the -t. Louis neetlng, It is very ln;ortant that we open up the ccrsrur.icatlons between our companies respective mat>agtncnts. !'c should proceed with urrangeaents for a ; meeting In St. Louis In the near future. . Very truly yours, . /lae tT L. Corrage . Director of Sales Functional Fluids' if i. I?: % 1- HARTOLDMON0025638 C1,4s Tc*. /f / AS /r<u./cS - 7 4'/J / 4<; ^ Du* to seS/eral serious fires, in 1958 a larg* gas transmission !i company jdecided to use a fire resistant lubricant j.n their gas :I turbines.[ They chose OS-01, containing PCB'c, because it gave them maximum fire resistance and good lubrication. Both proper ties are jexceedingly important. A turbine installation many timec .i will cost over a million dollars and, since they are pumping natural I gas in 3,0+ inch lines at up to 1000 psi, an explosion can Kill and mutilate [>ver a wide area, cause tremendous property damage and '! disrupt Ivjital gas service to homes arid Industry. Tfce -f 1 loW-up-frCdcrct~t~6~05^01 was -Turbinol-i-frdr~BB%r-9C**s. In 1970, our- sales of Turbinol 153 were 325 M pounds and through July, I 1971 were! 92 M pounds. It should be pointed out that Turbinol 153 iI has serv,o}l its function well 6ir.ee t.o df.t.e there are over 400,000 I' I; operating' hours on the fluid with no instances of fire, explosion 'i . or dgath.' Vto_flhoQa>'n stay in this market because with care the user can ii control |e^y fluid losses to tho environment end her us.* it would !; be very (difficult and expensive to convert to another fluid. Gas |i turbine [lubricant systems are closed loop. Any Turbinol 153 thet i: ' might po,s^ibly leak past seals and into the gas stream is removed with othejr liquids in regularly installed pipeline KnocK-out traps. Major leaks would be quickly detected since low lubricant level - automatic illy shuts the turbine down. Note also that once a turbine ii HARTOLDMON0025639 is brokehjin on one fluid, it is not advisable to change to another.: Ilf we withdrew Turbinol 153 from the market, users would be forced to perhaps rebuild their turbines and revert :[ back to |fjLanvnable and explosive petroleum oil. ;i 1! We belieyji the ease with which Turbinol 153 can be controlled, the relative safety it brings to hasardous pipeline operations and the dependability and reliability of continued gas supply it offers to|the ultimate users more than justify our continuing to supply Tujrbinol 153. ` oo*17 HARTOLDMON0025640 V;>*--?.*'' : '*." t * ,v>. v-1. //T/'rv-^-:?<**<^;r-rvv/' ;' -v.V..V :;' - V ***'** ' SAUI CflfHTiACT':;.^.;;'.7 ,,C*v. 'i;,, . ..: . . .. *b ' T" -m 'm'* * ^ *' '* 'A *** '** * *"* ** * J 4 "?* * ' , ' * , ~ laOiLBDTTBOIlMUhiktlkjtihoiuuM* IflaMcttrrjlUa CCmtnioewnUtiMm \* ' i * '>- Vif'-*''5'..' 1 V.v* ' . ,* *4 C, bpieltn U*UU / - j>o edict tn m - ItonJtgw, WUti 47401 . V, ' J -V - -.< * vl PLAINTIFFS EXHIBITOS ja^f/riC. My U N SO. Ifl) .* -r.' . 1I IrtclM 1242 (ItirlMi fBJ IIU 1} ; * ; *_ ./*. . !'/;/ r. ; , ** r ' . *' . UAMTTTT PAtMlNr TVNHI l^rr'a ftrtUl vryuiroaaaia MtiutW itl_ Utlti (J) July 1970-Juaa ten rn\2,*00,000 { (J) July itU'iwc 1972 9,000.000'paanlt (J) July l72Jtaa 1972 *.9.201.000 yaa4e Hat 90 4aya . .; . * r.o.. Xlllnala n lUHtu, (n(|ht iIImI ao4 yrcyalt, .. ' * v* . , # * , 1 Task aavai (IQ.ICJO tar Caatract nylnc it tkt t< f tbrra yaara aalaaa aataalai by Ktutl atrtaent. .. . . , . ....... ^ . aptcmi U (a nltntMt that fka yi*4cU aall baraun4tr caattta yal,cblafinact4 blybasyla, vlUli am atuilca bnt abavn * uy ba aa inliatstiul ctrtt'.luat< Suyac ayrtea tt aaa . Ita teat rfferte tt yrataut a.uth yrtlctu Im aatarlaj taka *'i'V! ^ tba ntineut thcaach tyllla, Iaake|, aia, lltyetel, aayarlaaCtaa at atncrwlta. la tba event Calltt lettnliu that* la atto , ta ynd;t cnirlMtlta t( tba anvltt>nacat it la aaeaaaary ; ta 41tcoatfaa Ute aala ta r.yar el yalycblatlaatal fctpbcayta* ' _ far tba ayrltccslona caatcrlaed by tuyar. laliar aiy tcaslaata . . tkla Attievnt st.any tlaa by |(tlt| ttyn at laaat alaaty (90) 'J 4ayt ytlat wrtttaa aatica. . ' , - -VS :1 ,f' yj XJ B'ml rtf m k lMa( a .Ww Mini Tf y ; tad irlrwt iilin lUrtf dtp fie* dPt tfraf. tfkkai-^aiUw-H. ^ f *.. real___ Jana II,.It70____ : *'C MONSANTO COMPANY.; V- /' ; ---------..-r *.*>*-:rt-Z?''-:- '.rlJA *rr ,J* *''*'*' * ' Baaa 14 A. Olaaa * . /. ' ' I ___ falta Olractar __ ______ . vma. //aVW.-- ------------------ 1 tm* faaatUaal VlaMi------------- -- ^ i.ii *. h_ (a.-. , .. 9 SPKPSSBRi C7^ . HARTOLDMON0025641 f Monsanto ,pm ....... IX...QN, y. b. PAPAQEOROE - ST. LOUIS u*'' January 18, 1971 1970 PCB EXPENDITURES TO X--r\T. L. (Jossage Actual expenditures during 1970 for our Aroclor defense program are estimated as follows: Expense Toxicity Studies Research Engineering Manufacturing Administration & Staff Departments 166,600 337,000 50,000 170,000 163,100 Total expense Capital U. S. Plants Newport $886,700 131,000 16,000 Total capital $1^7,000 Grand Total $1,033,700 W. B. PAPAQEOROE iw 10 mi w it TRAN 066447 (jvf-t ts^ -C I HARTOLDMONOQ25642 T. L. GOSSAGE - ST. LOUIS JANUARY 25. 1971 1970 PCB EXPENDITURES N. T. JOHNSON - NJOHN C. L. BRADFORD - CBRAD J. R. FALLON - JPALL The estimated expenditures during 1970 for our Aroclor defense program were $1,033,700. This includes about $#87,000 in expenses Including toxicity studies, research and engineering, manufacturing and administration and staff departments. The capital expenditures total $147,000. This capital does not' Include the NCS 1016 facility. While these numbers are not for publication, you might want to pass them on in general terms to some of your field salesmen at least those totally Involved with dielectric customers. /ise T. L. GOSSAGE \ \ TRAN 066*46 (/OS.* y HARTOLDMON0025643 I Monsanto radM .* ( N. T. Johnson - St. Louis Geueral Offices January 25, 1971 PYDRAUL REFORMULATION ,, LETTER TO CUSTOMERS J. A. Ha ilala - Akron R.A. Garcia - Akron R. A. Damiani - Chicago G. F. Fague - Detroit G. R. Graham - New York J. S. Pullman - New York D. Hamil - St. Louis R.S. Bevacqua - Los Angeles P. D. Craska - Wilmington D. GoodwiUie - Montreal T. W. One son - Montreal R.F. Garnsworthy - Melbourne R. B. Giles - Melbourne R. L. Crabtree - Atlanta A. Keene - Atlanta S. Berry - Cincinnati M. L. Mart - Cincinnati E. Palaezolo - Detroit B. Barrett - Everett J. Antil - Houston A. B. Capps - Atlanta R. J. Christman - Atlanta E. L. Shimley - Atlanta H. R. Ford - Atlanta P. H. Lewis - Chicago A. J. Re go - Cincinnati J. G. Fredarikaon - Detroit P. G. Haislmaier - Everett L. C. Shelton - Seattle M. Davies - Los Angeles M. Maginnis - New York R. Ehrhardt - New York D. McCloskey - Santa Clara F. Stupfell - Seattle M. J. Tingle - Wilmington C. L. Clay - CCLAY C.L. Curtis - CCURT T. L. Goss age - TGOSS W.R. Richard - WRICH L. R. Stark - LSTAR ____D. F. Smith - DSMIT Bradford - CBRAD . J."R. Fallon - JFALL G. G. Kosup r GKOSU L. D. Shand - LSHAN J. N. Haggart - Brussels ' P. J. A. Marsh - Brussels V. C. Gaerlan - Hong Kong A. Arpino * Brussels T. Ishijima - Tokyo MJL H. J. Richardson - Everett S. F. Sylvester - Everett D. W. Stagea - Houston L. R. Johnson - New York P. L. Slayton - New York D. R. Hansen - Santa Clara C. Boutin - Santa Clara J. W. Corbett - Wilmington SIR 0C6187 ( *3' HARTOLDMON0025644 Monsanto ......... ...... T| ....... .. TO c N. T. Johnson - NJOHN_______ January 25, 1971 PYDRAUL REFORMULATION LETTER TO CUSTOMERS Attached Diatributioa List ce ( On February 1 a letter will be sent to all Pydraul 312, Pydraul 135, Pydraul 230, Pydraul 540 A and Pydraul A*200 customer* announcing th new formulations containing no polychlorinated biphenyl. A copy of this letter ia attached. The new formulationa will be deaignated Pydraul 312 A, Pydraul 135 A, Pydraul 230 A, Pydraul 540 B and Pydraul A-200-B. We are bringing in raw materiala to the Queeny plant now nrf will initiate production aa aoon aa all old raw materiala are conaumed. . The exact change over date on each formulation will vary by product. Every effort must be made by yourself, your sales correspondent, and the currently operating COP system to move the old formulations first. We still have some inventory of Pydraul F-9, Pydraul AC and Pydraul b2S--theae must be moved in the next 60 days. . All Pydraul A-200 customers maybe switched to Pydraul A-200-B. but we would prefer to promote Pydraul F-9-A or Pydraul 312 A to . them. Though Pydraul A-200-B will be available, it produces low gross profit. Therefore, it will not be listed in our new literature and we should not encourage any customer to use it. If you have any questions or problem customers let us know. We would prefer not to ship the new formulations to any customer until the old formulations have been sold out from the Queeny plant or warehouses ia your area. There will be exceptions, but they must be minimized. N. T. Johnson lb STR 006166 HARTOLDMON0025645 I Monsanto i m<i4I i N AMI A l or A1 , C. L. Bradford - Q. 0. UA1( September 16, 1971 ftun *i c i PCB WORK - STATUS fll I M| NCI TO W. Papageorge pc & ` >r' 1 > cc R. E, Hatton J. H. Davidson T. L. Qossage L, R. Stark P. D, Fowlkes Bill, some of the current efforts concerning PCB^ are as follows: 1. Research Is reviewing whether we can substitute MCS 1109 for Aroclor 1221 in our two products Aroclor 6037 and MCS 1004. If so. we will request permission to make the ohange from our customers If the decision Is made not to use Aroclor 1221 any more. 2. Wynn Oil Is currently using Aroclor 5460, but have just asked us whether they can get Aroclor 6040 In quan tities plus they want to know what other blends of Aroclor 5460 and Aroclor 1221 they can get. Research la also looking at blends of MCS 1109 and Aroclor 5460 to answer their question. 3. On Santovac, we have put together a program to Insure that these products are used as wisely as possible. The program oonslsts of: a. Contacting a "sensitive list" of customers by personal phone call to make sure that their applications are not In food related businesses. b. Put the "food label" on all shipments of Santovac 1 and 2 as we are currently doing on all Thermlnol shipments. c. Send a letter to all users telling them of the problems with PCB's and recommending that they get out of It if they can not control It or If they are using It In food related CONFIDENTIAL businesses. TRAN 004966 J g. HARTOLDMONOQ25646 I 2 d. Follow up these letters by field salesmen calls. e. Establish a list of approved users for COP. f. Work out a method with COP so that all new users are alerted to the problem. We have completed some of the work Buch as making some telephone calls to people on the "sensitive list". Issued instructions to put the food label on all shipments of Santovac and we have now a letter approved by yourself and Legal to mall to all the customers. 4. On Turblnol 153, we do not plan to approach Texas Eastern until we have received approval from General Electric for use of one of our new NC esters in gas turbines. /pep C. eraaiora COMPANY CONFIDENTIAL TRAN OON'*7 I HART OLDMON0025647 Monsanto W. B. PAPAOBORQE - ST. LOUIS OCTOBER 6, 1970 PCI* ENVIRONMFNTAL PROBLEM :;W,TIHK.R STATUS REPORT _ r.j. a . March - BRUSSELS w. s. Clark J. R. Durland - TOKYO M. W. Farrar - 2nd Street E. V. John R. E. Keller - 2nd Street R. M. Kountz $. L. Gossage P. S. Park W. R. Richard J. R. Savage E. P. Wheeler H. Si Bergen J. Mason J. E. Springgate GENERAL: Performance against the PCB plan was reviewed with the CMC on September 14. Overall the committee was satis fied with the progress whloh has been made and compli mented the various departments In the Division who have been Involved In the action. However, it was emphasized that we must continue to emphasize to all remaining users of PCB'8 the Importance of preventing escape to the environment and we muBt ensure that these warnings are fully documented so that they will support the action we have taken In this area should we become Involved In legal actions. Two variances from the original plan were requested and approved: 1. NCR - As the customer has proved unwilling to com mit himself to a take or pay contract. It was agreed that we can go ahead on the basis of pro ducing MIPB In existing equipment or using toll manufacturing facilities ensuring that a satis factory level of profitability Is maintained. The emphasis here was to phase 1242 out of NCR formulations as soon as possible. 2. It was recognized that good progress Is being made In reformulating industrial/hydraulic fluids and that It was not easy to completely replace PCB's with alternate material. In view of the progress made, an extension of a further three months (l.e. end first quarter 1971) was granted to enable TRAN 003455 I If * HARTOLDMON0025648 2- us to reformulate those products still containing Aroclor 1242. It was emphasized, however, that this would be the last extension granted and if we are not successful in reformulating, it will be necessary to discontinue the business in spite of the significant gross profit involved. Preparations are underway to test the disposal of solid waste contaminated with Aroclors in Biviro-Chem Systems pilot unit in St. Charles, Mo. Solid wastes from transformer and capacitor manufactures will be intro duced into the unit during the week of October 12. Negotiations are continuing with Rollins-Purle, Inc. to establish their capabilities and cost of incineration of liquid Aroclor waste. MARKETING: The withdrawal of Aroclor plasticizers from the market appears to have been completed with very few loose ends. Only a couple of companies have called claiming that they had not heard of our withdrawal, and to date these inquiries have not caused any significant problems. Our distributors are well on their way to zero inventories of the Aroclors, having pretty well matched their pur chases from Monsanto with firm orders from their cus tomers. It does not appear that there will be any extensive returning of unsold materials. Orders for the products which will replace the withdrawn Aroclors in the market are starting to come ini. It will be several months before substantial volumes are be ing sold, however, as most companies have some inven tory of the old products in stock. Two major items of information indicate that the replacement program is progressing well. The first is that 3M has replaced Aroclors 1254 and 4465 with Aroclor 5442 in five product lines in the Industrial Tape and Electro Products Division, lhe second is that Thlokol states that Santlclzer 261 now has the inside track ahead of all other produots Including chlorinated paraffins as a replacement for Aroclors 1254 and 1260. ENGINEERING: . Waste Incineration - CEA 2415 Design is in progress both internally and at John Zlnck'B. Approval drawings for the Incinerator are expected the week of October 7. TRAN 003456 HARTOLDMON0025649 -3- Aroclor Distillation - CEA 2^417 Definitive design is in progress. Because of recent decisions by Corporate and Division Management, market ing forecasts for MCS 1016 have been reduced. Accord ingly, elements of the project are being reviewed with the Idea of reducing the scope of work. Trlbutyl Phosphate - CEA 2371 The project scope report is being reviewed by the plant. The II building explosion and subsequent related work has delayed this plant review. A preliminary estimate has been developed. Timing of the project has become critical so pre-approval funds will be requested for engineering and commitment of long-delivery equipment. N-C Phosphate Although Research has had success in bench scale oper ation, it has been decided to prove out the process in the E-E building at JFQ. Thus, the latest schedule for having process assurance is March 1971. Project development will not be resumed until after the process is proven. EUROPE: An Informal meeting was held with the Directors of some of the voluntary societies, e.g. British Trust, Tor Ornothology, and they expressed considerable satisfaction at the responsible attitude adopted by Monsanto in Northern America and the U.K. The N.E.R.C. REPORT on the Irish Sea incident is now expected to be published November/December. We have been promised a copy of the latest draft. ' Further contact with the other European manufacturers has not yet yielded agreement on when or how to act and it has not yet been possible to arrange a decision making meeting with them. TRAN 003457 HARTOLDMON0025650 -4- MEDICAL: The latest status reports on the dog and rat chronic feeding studies, rat reproduction studies and chicken toxicity, reproduction and residue studies were re viewed with representatives of the National Institute of Environmental Health Sciences, Bureau of Commercial Fisheries Laboratory, Food and Drug Administration, U.S. Department of Agriculture and the Patuxent Wildlife Research Center. PUBLIC RELATIONS The July news release, stating our position to withdraw from certain PCB markets, was used in whole or in part by 13 more major newspapers. Total to date is 22. as the month closed, plant management at Pensacola spec ulated Monsanto may be sued by the Southeast Fisheries Association, Inc. for polluting Escambia Bay with PCB. At this writing, the suit has not been filed. A pre paredness statement was drafted for use by the Plant Manager, should a suit develop. RESEARCH: Carbonless Carbon Paper Solvents NCR now seems more committed to MIPB-2 as replacement for Aroclor 1242. It appears that an additional 100,000 lbs will be required for full scale trial with a "firm" answer expected late 1970 or early 1971. Assistance haB been provided the plant in preparing for the upcoming run of MIPB. An amendment was written to allow the manufacture of a MIPB containing higher (1.3 vs. 0.6) ratios of propylene to biphenyl. The most recent information indicates that this higher ratio material will not be needed by NCR. Manufacturing Is searching for a location to make larger quantities of MIPB. Nashua likes a blend of Aroclor 5442/HB-40-1/4 as a dye solvent even though Its viscosity 1b above their "upper limit". Three more blends are being sent them to help zero in on the proper ratio. . TRAN 003450 HARTOLDMONOQ25651 I 5 Print fade on Nashua Clay coated paper la caused by light (as with NCR paper) but not by excess solvent. Use of a resin or rubber to extract excess solvent (beneficial In NCR paper) is harmful In the Nashua system. Hydrogenation of the aliphatic double bond In AMS Dimer (liquid) eliminates most of the odor and reduced print fade, making this a very good hydrocarbon solvent. Acute toxicity tests show the mono and dlchlorlnated AMS Dimer to be comparable to Aroclors of corresponding viscosities. The solid and liquid AMS Dimers and Iso propyl biphenyl like HB-40 are "practically non-toxic" (or safe) but are noticeably more irritating to rabbit skin. Twenty four hour patch tests on one person showed no irritation from any of these materials. Industrial Hydraulics The removal of Aroclor 12^2 from all Pydrauls will require reformulation of A-200, 281, 5^0, 312, 230, 135, 150, MCS 153 and MCS 97** The Pydraul 312 reformulation Is farthest along. Fire resistance of the new formulation is greater than the fire resistance of Pydraul 312. Performance In the V-105C was excellent. Samples were sent to Ford for evaluation. It will be desirable to make the hydraulic fluid applica tion into a closed loop system. We cannot expect to stop leaks but we can expeot to minimise contamination of water by (l) minimizing run-off to sewers; (2) treating con taminated water by adsorption (Anniston had no detectable PCB after passing through a limestone bed); (3) recycling adsorbents to remove Aroclor by squeezing, by extraction or by devolatilization-destruction. Aroclor Pollution Study - Anniston In the 13 day pilot run, initial concentrations of 1000 8000 ppb Aroclor in waste water were reduced to a range of O-15-.PPb upon passing through a series of packed carbon beds1 at an average flow rate of 25 cc/min. Over 99# of Aroclor removal occurred In the prefilter. This unusual reduction Is believed to be due to the filtration of solid on which Aroolor was adsorbed. In tests run at higher flow rates (0.5 gpnv^ft.2) through the prefilter, these plugged the prefilter. The study is presently being divided into two phases; l) feasibility studies for continuous solids (with Aroclor) removal from limestone pit effluent and 2) carbon adsorption from the clear stream at the Aroclor sump* TRAN 003459 I HARTOLDMONOQ25652 -6- There was a temporary delay In the shipment of the pilot adsorption unit.2 Start-up Is now targeted for 9/23. 1 The adsorber consisted of a prefilter (3.5 inch diameter tube packed to 5*3 inch bed depth) and a series of one (l) Inch diameter oolumns packed to a total bed depth of 13.5. 2 Pittsburgh Carbon (Calgon Division) rental unit contain ing pumps, 5 inch diameter columns, etc. Determination of Polychlorinated Biphenyl Residues In Rats from $6 day Aroclor feeding Studies One of the more significant objectives of the AroclorQivironment program has been to develop a more complete picture of what occurs to Aroclor products once they are released to the ecosystem, lhe importance of this infor mation is two fold, first It can be used to guide the development of a more "degradable" Aroclor product and secondly, the general methods developed to study the current Aroclor products can be used to determine the degree of control that must be exercised over the replace ment products to avoid similar problems with these mater ials In the future. As a part of achieving this overall objective. Industrial Bio-Test Laboratories was requested to carry out a 30 day tissue collection study In albino rats with Aroclor 1242, Aroclor 1254 and Aroclor 1260. This report deals with the subsequent analysis of these tissues for residual PCB's. Summary: The results of this study demonstrate that the residual PCB levels In all tissues decreased significantly as the degree of chlorination and the dietary exposure level of the material fed decreased. Additionally, It was observed that the amount of Isomeric alteration Increased as the degree of chlorination decreased re* suiting In the fact that the major PCB isomers retained by the rats fed Aroclor 1242 were those predominantly present in Aroclor 1254 and Aroolor 1260. There were no significant differences In the type of Isomeric alteration from tissue to tissue or between sexes. Aroclor - Environmental Program - St. Louis Preliminary testing by the National Water Quality Labora tory at Duluth, Minnesota of the toleranoe of fish and fish food organisms (survival and reproduction) to our Aroclor products has indicated that Aroclor 5442 is much more toxic to Daphnla than any of the PCB's. Eleven reserve samples of production Aroclor 5442, one of which was used in test, have been received from Anniston to determine If TRAN 003460 HARTOLDMON0025653 I any water soluble tramp component(s) could be responsible for the alleged Increased toxicity. Initial results indicate that the pH of the water used to extract and/or solubilize the Aroclor 5442 is not changed; however, a number of EC active components can be isolated from the water extracts via a hexane extraction. An attempt will be made to identify these components. A meeting was held to review the status of the residue analysis of the Bio-Test Laboratories tissues. It was agreed that the work should proceed and that in terms of current priorities the tissues from the chronic rat study should be done first, followed by the fish toxicity Btudy, and then by the chronic chicken study. Provisions have been made for shipment of the rat tissues and fish samples to Monsanto. Arrangements have also been made to have samples of fish from the semi-annual Anniston area survey and samples of shrimp from three locations around our Pensacola collected, quick frozen and shipped to St. Louis for confirmatory residue analysis. Environmental Studies - Ruabon The paper entitled 'Askarels - Environmental Pollution' was presented at the CIORE conference in Paris. This was welcomed by the delegates as a useful guide to good practice and suggestions were made for wider publication. A modified version of this paper is being made available for the PCB conference organized by the Swedish National i'iivlronment Protection Board at Stockholm on Sept. 29. The draft of the report on the deaths of sea-birds on the Irish Sea is now being made available to Monsanto, but we have not yet received a copy. Blodegratlon Testing - St. Louis Functional Fluids Testing of Aroclor 1242, Aroclor 1254, MCS 1016 and fractionated Aroclor 1130 in our semi-continuous activated sludge units is continuing. Calculation of ED/OC analyses for the first five weeks of operation have been completed. Due to the high degree of soatter in the data, no conclusions can be made at this stage concerning differences in bio degradation rates. The souroe of the scatter is currently being investigated. One of the units has been equipped with a stirrer to determine if agitation is a significant factor. Five additional units are now being added to our setup to permit simultaneous testing of a greater number of products. Testing of trichlorobenzene, Arobromchlor 1232, and Gulf 200 TRAN 003461 HARTOLDMON0025654  -8- Bright Stock will be started shortly. Testing of the chlorinated terphenyls, e.g., Aroclor 5**32, is awaiting the development of the necessary analytical methodology. Several enrichment tests involving biphenyl-acclimated sludge and nutrient feed withdrawal are also planned. Plasticizers A three-day sampling of the HB-40 and mono-isopropyl bi phenyl (MIPD) semi-continuous activated sludge units nine weeks after the previous sampling period has shown sig nificant changes in the biodegradation rates. For MIPB, disappearance rates for the three days by UV analyses were 75, 70 and 77 per cent compared with the mean of 67 per cent in the previous sampling period. OC analyses indicate that the predominant mono-isopropyl biphenyl components are almost completely degraded during the cycle, leaving as the undegraded portion the dialkylated components. For HB-40, the previous sampling period had shown essentially a zero disappearance rate with a high degree of scatter. IXiring the three-day period, dis appearance rates of 5^ 52 and 58 per oent were found. From GC analyses, it appears that the one-ring hydrogenated components are more readily degradable them the two- ring hydrogenated components. Feeding of the MIPB and HB-40 is continuing. An additional sampling period is planned to determine if any further significant changes will occur. Five additional units are now being added to our setup to permit simultaneous testing of a greater number of products. Testing of Aroclor 1221 will be started in one of the new units. Biodegradation Testing - Ruabon In the presenoe of lower chlorine isomers and biphenyl we appear to have succeeded in degrading the key hexa- chlorlnated isomer with the biphenyl-active soil culture Cg, but the penta-chlorinated Isomer has not degraded under these conditions. Work is being initiated to check whether any of the "non-degradable" isomers (e.g. 'dichlor- blphenyl) can be degraded under these more severe conditions. The sensitivity of the analytical technique used was not high enough to show conclusively whether HB-40 was de graded by C. This is being repeated using a higher con centration. Progress continues in the development of OLC-Mass spect rometry techniques to allow Identification and quantifi cation of residues remaining after prolonged biodegradation tests on various products. TRAN 003462 HARTOLDMON0025655 -9- I MANUFACTURINQ Anniston Plant PCB Levels In Snow Creek Average PCB loss for the month was high at 2600 ppb or 52 lbs/day, largely as a result of one very bad day (400 lbs). Contributing causes were: ' 1. The old limestone pit was overloaded and solid sludges were carried through, # 2. Detergent cleaning of the department, 3. Sewering of excessive amounts of muriatic acid. Since the new limestone bed was placed in service on September 23, pit effluent has been at 0-3 ppb PCB's. However, leaching of PCB's from the creek bed results in a plant effluent level of 90 - 240ppb or 1.1 - 2.8 lbs/day, gradually declining. The plant believes that the new pit can handle ordinary upsets and peak loads. Regulatory Action Telephone contact continued with the Alabama Water Improvement Commission. However, a planned meeting did not take place due to Illness of AWIC members. Pressure for routine submission of analytical data Is not Intense at this time. Department Suspended Aroclor Control An experimental skimmer operated very well removing the PCB laden scum which accumulates in the new sump. SolId Wastes____ Solid waste data for evaluation of dispo&d methods has been accumulated. A report will be Issued In October. TRAN 003463 HARTOLDMON0025656 -10- W. Q, Krummrlch Plant PCB Levels In Sewer Current losses to the river from the treatment plant range from 12 to 71*2 ppb with an average loss of 311 ppb for 11 samples. This is an equivalent average loss of 71. 5 lbs/day. Projects To Reduce Sewered PCB^ From Aroclor Department. blow Tank Demister (Estimate 2031) project construction is underway with completion scheduled for October. A Process Amendment was approved. Project for about $30,000 to provide paving, curbs, trenches and catch basin In tank car and tank truck loading areas will be added to the incineration project to speed approval. Program To Eliminate Sewered PCB1a From Using Departments Departments 2**3 and 244 ' Plans are to replace the Therminol PR-1 with Thermlnol 55. Lab work has been conducted to verify that there is no reaction between Therminol 33 And any process materials. Engineering is underway on system modifications required for use of Therminol 55* Target date for changeover is 12/1//0. Department 21*5 The major problem here is air pollution from the supply tank vent. Our target is to scope a solution and prepare an estimate by 11/1. Changeover to a different fluid is undesirable in this department due to the high fire potential. . Dcpartmejnt 251 No work has yet been done on the lubrication and hydraulic type systems in this department. Department 239 Work is in progress to develop project premise. We expect to eliminate two pumps and a cooler in the Therminol lines. (Pending results of thermal stability of Santophen 1 residue). The project will Include a new expansion tank with submerged TRAN 003464 HARTOLDMON0025657 11- W. 0. Krummrloh Plant Department 239 (Confd) pump. We also plan to upgrade controls and make furnace operation more reliable. How to sump the area around potential splllB Is Btlll unresolved. To go to a flammable heat transfer fluid Is considered too great a process safety hazard In this area. Department 255 Plans are to replace FR-2 with Therminol 66 by 11/15/70. Department 248 No progress has been made to date. A definite plan will be developed by 11/1/70 with the objective of solving any problems by 1/1/71, Department 258 (DPS) The unit Is still down and most likely will not be started up again. The material on the pad has been removed. Department 270 A 53-gallon drum has been placed under the vent. Chat soaked with Aroclor around the furnace must still be replaced. Department 275 ' A 55-gallon drum must still be placed under the vent line (the vent will have to be shortened to do this). Chat around the furnace still needs to be replaced. Department 27? Work completed. Drum placed under surge tank vent. Buckets placed to collect material from drip pans under Therminol circulating pumps. Department 222 Unit in start-up. No visible source of loss observed. Estimate 2292 will be revised. This is the project to provide 150,000 gallons of storage for scrap Aroclor. A plant level earnings expense estimate will be prepared* * TRAN 003463 HARTOLDMON0025658 -12- W. G. Krtimmrloh Plant Department 222 (Confd) to cover the cost of altering.the storage tanks. The 4,000 gallon trailer originally used to haul Aroclors to Queeny Plant will be used for scrap Aroclor hauling In the plant. PCB Levels In Atmosphere Vapor losses from the.Aroclor Department are estimated at 2.3 #/day now and 1.6#/day after the Installation of the blow tank demister. 1. Scrubber Stack (from blow tank drowning Jet) 0.90#/day This Is a measured quantity. With Installation of the demister and closing the batch blow tanks, air flow should be decreased to about 20g of present flow. Assuming the concentration to be the same, loss would be reduced to 2#/day. 2. Fume Removal Stack (from drowning area and sampling stations") 0.03#/day This is an estimated quantity based on most vapors coming from the drumming station and assuming 10,000,000 #/year drummed, and 1242 vapor pressure at 80C. Samples are being taken to verify. 3. Aroclor Transfers Within Department l34#/day This Is an estimated quantity assuming 7CM #/year production and 2. 3 transfers/pound at 100aC. Samples will be taken at storage vents to verify. 4. Steam Jets - unknown Will be measured. TKAN 003466 HARTOLDMON0025659 13- W. 0. Krummrieh Plant PCB Rework Project (Estimate 2095) Phase II ' % Phase III Construction sufficiently complete to allow unloading tank cars to the rework still. . Design package will be completed by mid-October. This project will b added to the incineration project for approval. Phase III will be held up until approval Is received. This will mean that material will be reworked direct from tank cars until the Phase III storage facilities are Installed. .. W. B. PAPAGEOROE ms TRAN 003*67 HARTOLDMON0025660 Monsanto ic*iioni w. R. Richard - T3A 4TC suajtcr Segtfilnber 20, 1971 jL REFORMULATIONS Cl t*f NC4 TO : 1i CZiRoos - 1760 ce H. S. Bergen O. DeGarmo T. L. Qossage P. J. Holzapfel R. M. Kountz J. Mason R- savage - e?s; - 17^0 - E2SL - B2N - FU\:,\ - e2S.\ - B2K2 To keep the record straight on chlorinated products In Pydraul products, Specialty Products first removed Aroclor 1248, 1254 and 1260 as agreed with management in 1970. v/e believed these were the non-degrading products being found In the environment. Research next developed formulations to remove all chlorinated biphenyls from PydraulsT^feeling this would be a desirable step. (Exceptions were Turblnol 155 and Pydraul being sold in Germany where we could not pass the fire tests.) Management agreed to remove chlorinated biphenyls from Pydraul in 1971. The list of present Pydraul products is given on page 2 and 3 of the attached. The "book" assembled by 0. DeOarmo omitted several reformulations, Pydraul A-200B, Pydraul 5^0B, which eliminated the use of Aroclor 1242. Research and Marketing are now trying to prepare for the replacement of PCT, should this become desirable. Key products are NCP and N*CP plus certain VI improvers which are reo.uired. We need project approvals for changes in EE-Bldg, plus successful trial production this month on NCP. I hope you approve of the efforts we have made and are mak ing to control chlorinated components, phosphate ester toxicity, fire resistance and to maintain continued customer service for Pydraul fluids. /is Attach. uu (2 . W. R. Richard in v r. TRAN 085106 Io HARTOLDMONOQ25661 SANTO COMPANY Louis, Missouri November 9, 1971 CALL REPORT NO. 1971-22 cc s T. L. Oossage - B2SL J. P. Herber - T30 L. R. Stark - W4A W. R. Richard - T3A D. W. Stegen - 1460 H. R. Ford - 1070 COLUMBIA OULF TRANSMISSION CO. ^wton, Texae _ Date of Call: Present for Columbia Qulf: Present for Monsanto: November 4, 1971 Mr. Richard Lambert (Operations) Mr. Herb Van Dyne (Purchasing) Mr. Orave (Purchasing) C. L. Bradford D. W. Stegen R. E. Hatton Summary; Because of the high loss of Turblnol 153 through the seals of new Ingersoll Rand natural gas compressors, Columbia Oulf has replaced it with Pyrquel 150. A review of the problem indicates that no known reason exists for the high consumption or Turblnol 153 compared to Pyrquel 150. It was Monsanto's contention that the high experience factor on Turblnol 153 Indicated that It was a workable product In similar units. It was agreed that Monsanto would accept all unused fluid for credit and that questions, concerning the disposition of used fluid and expenses Involved with this problem would be resolved at a later meeting. It was further agreed that Monsanto would discuss this problem further with Ingersoll Rand. Columbia Oulf indicated an interest In further work with Monsanto and appeared receptive to a dlsousslon of the new phosphate ester fluids at some future date. Details: This visit was made at the direct request of the Purchasing Department of Columbia Oulf for an limaedlate meeting with Monsanto personnel. The stated purpose was to review Columbia Oulf problems with Turblnol 153 In new gas turbine/ natural gas compressor unlta. These problems Involve exceptionally high fluid losses. The early part of the meeting was devoted to a review of problems with the use of Turblnol 153 In the new unlta at Stanton, Kentucky, at Delhi, Louisiana and at Inverness, Mississippi. Brief mention was made of the visits of Monsanto personnel to Stanton and to Delhi. Mr. Lambert COfor r v ^ CONFIDENTIAL TRAN 00A380 J ]\ HARTOLDMON0025662 r Call Report No. 1971-22 Columbia Oulf Tranamlealon Co Page Two updated thoae present on the current status of the problems. He stated that high losses were continuing at Stanton even after air leaks into the main lubricant pump had been repaired. This had previously been stated to be the major cause of the problem. It was emphasized again that the Turblnol 133 loss la through the compressor seals Into the pipeline. Mr. Lambert also stated that losses remained high at Delhi, sometimes being as much as 14 gallons per hour. The Inverness unit, which Is quite similar to the Delhi unit, also showed high consumption rates of Turblnol 153 on start-up (which occurred around October 30). ' New information was presented by Mr. Lambert on the current status of the new stations. The Delhi unit has been cleaned and converted to Pyrquel 150. The unit then operated satisfactorily on Pyrquel 150 and after 30 hours had lost somewhat less than 60 gallons of fluid. (A complete description of the Delhi unit Is given In Call Report 1971 21.) During the dlsoueslon of Delhi experience, the question was raised as to the reported problmes with Pyrquel 150 at the Centerville Station which Is supposed to be similar in design to the Delhi unit. Mr. Lambert stated unequivocally that, although quite high losses had been experienced during start-up, the unit was running satis factorily with low fluid consumption. The Stanton unit has been completely drained of Turblnol 153, cleaned and Is awaiting the delivery of a tanktruck of Pyrquel 150. (Information received 11/8 from Dave Moy of Columbia Oulf Indicated that the unit had run approximately 60 hours and had consumed a 55 gallon drum of fluid. He still considers this to be high but certainly considerably lower than with Turblnol 153*) During the discussion of the Stanton unit questions were raised concerning the approval of Pyrquel 150 for the Oeneral Electric Industrial turbine driving the Ingeraoll Rand compressor. (See Call Report 1971-18 for details.) Mr. Lambert Indicated that they had checked with Oeneral Electric and that Oeneral Electric had approved Pyrquel 150 for that type gas turbine. Questions were raised by Monsanto with regard to the proper per formance of Pyrquel 150 in this unit, particularly with regard to coking problems on some of the Interior bearings. It wae stated that Monsanto has developed a more thermally stable group of phosphate esters and will be working with Oeneral Electrlo for approval as bearing lubricants. It was also Indicated that we would like to discuss thaee with Columbia Oulf and hopefully obtain a field test some time In the future. COMPANY CONFIDENTIAL TRAN 004301 HART OLDMON0025663 r Call Report No. 1971-22 Columbia Oulf Transmission Co. Page Three On the technical level, Mr. Lambert and the Monsanto group discussed various opinions as to why the high seal loss was occurring but it was Impossible to develop any definitive answers (as expected based upon previous calls and discussions). During the entire meeting It was repeatedly emphasized that Turblnol 133 was not a poor fluid, that Monsanto had done considerable work to Indicate that it was equivalent to Pyrquel 130 In all properties thought to be important for this application and that Turblnol 133 had performed very satisfactorily In Texas Eastern units over a number of years. The major difference appears to be the Ingersoll Rand compressor design and. In particular, the high pressure differential aoross the seals and the complex design of the seals themselves. Monsanto was shown for the first time the Ingersoll Rand specifications for the fluid to be used In their compressors. These specifications were taken directly from the Stauffer literature by Ingersoll Rand and the lubricant was called out by name. This then led to a discussion on why Columbia dulf had selected Turblnol 133# why Ingersoll Rand was not fully aware of the properties of Turblnol 133 and why coordination appears to have been poor between the three groups Involved, namely Monsanto, Columbia Oulf and Ingersoll Rand. It was pointed out by Monsanto that we felt we had Informed all these groups concerning the product. However, If this has not been true. It was not through design, but through laok of communications and In ability to contact the oorrect people. During the discussion, questions were raised conoemlng the large amounts of money Involved and responsibilities for this. Monsanto stated that they would accept the return of all unopened, unused fluid for credit. Columbia Oulf Purchasing mentioned that since the "inferior fluid" had caused all of the problems, Monsanto would be expected to share In the expenses. The concept of "inferior fluid" was indicated not to be acceptable to Monsanto since we felt that we had done all we could to help and that Turblnol 133 was a workable turbine lubricant and had satisfactorily lubricated and sealed natural gas compressors for a number of years. The meeting ended with the stateswnt by Columbia dulf that they would convert all of their reaialnlng units to Pyrquel 130 at this tlsw. They also lndloated that they did not want to close the door completely on future relations with Monsanto. They suggested that we visit Ingersoll Rand to discuss seal deelgn and fluids In greater detail. With COMPANY v 1 CONFIDENTIAL TRAN 00A3S2 HARTOLDMON0025664 r Cali Heport No. iyyi-^a Columbia Oulf Tranemlaalon Co Page Pour regard to the disposition of the used fluids and other financial considerations Involved, Purchasing suggested that another meeting be held In a week to 10 days after additional information had been gathered by Columbia Oulf with regard to performance of Fyrquel 150 in the units and by Monsanto with regard to the Ingersoll Rand seal design and fluid performance problems. Based upon these discussions, the following actions will be taken: Monsanto will visit Ingersoll Rand and O.E. Schenectady with regard to Turblnol 153 and phosphate ester lubricants, the files will be reviewed to determine the past history on fluid selection and support and a technical presentation on Monsanto's all phosphate ester fluids will be made to Columbia Oulf personnel after the current problems are resolved. /pep R. E. Hatton COMPANY CONFIDENTIAL TRAN 00A383 HARTOLDMONOQ25665 Monsanto fftOM INAMI tOCAllOMl B2SL T. L. Gossage November 16, 1971 AROCLOR APPROVED CUSTOMER LIST Ml I HI NCI TO A2NA C, P. Cunningham NOV J B2SA H. 8. Bergen B2SA J. Maeon B28K W. B. Papageorge I You requested coplea of our approved customer list for aroclor products. These are broken down into three areast Thermlnol PR fluids, dielectric^ fluids, and miscellaneous industrial fluids. Copies of each era attach The Thermlnol PR list contains virtually all purchasers over the last three to four years and Is separated by "approved" and "not*approved" status. As ve proceed through the transition of converting customers from PR to non-FR fluids, we will continue to move purchasers from the approved to not-approved status. This list became effective November 9. Prior to that time and since the East Coast Terminal episode, we have been approving orders on a case-by-case basis, aach order requiring the approval of the product group plus either Bill Papageorge or me. imp / V /YI ^ The dielectric fluids approved customer list became effective October 29. Likewise, prior to that date all orders were being approved on a case-by case basis. For transformers, only manufacturers and 0,B, and Westlnghouae Service Centers are approved. Transformer refills continue to be approved on a case-by-caae basis with no blanket approvals* Prior to filling a re fill order, we receive confirmation of fluid use and method of disposal of old fluid. The capacitor fluid list Includes all approved capacitor manu facturers. The miscellaneous Industrial fluid list Includes Santovec 1 and Santovac 2 products. These are aroclors going Into closed vacuum pump systems. The customer approval date Is noted on the list. The other miscellaneous Industrial fluid application la Turblnol 153, also considered a closed system. In this case, there are only two approved customers - Texas Eastern Transmission Corporation and Columbia Gulf Transmission Company. If you have any questions concerning our procedures for controlling customers and customer approval, please let me know* ___ T. L. Goesage COMPANY CONFIDENTIAL /ph Bnc, IRAN 005156 9 III tt 6!> HARTOLDMON0025666 Monsanto f P*(.i iMU| * lOt*'*ONi 0 L. Bradford/N. T. Johnson e*i. November 17, 1971 ftuajtci CHLORINATED TERfHENYLS TO T. L. Gossage V/e have given considerable thought to your posed question what would happen should we completely remove polychlorinated biphenyls and polychlorinated terphenyls from our industrial fluids. Following are our observations. SANTOVAC Santovac 1 and 2 will be dead if we remove polychlor inated biphenyls from our product line. They are only saleable because of the special properties of fCBs, so we recommend no replacement products for them. The combined budgets for 1972 are 176,000 poundo and 187,000 high gross profit (68$) dollars. Removal of Santovacs from the market will cause some hardship and scrambling on the part of our customers since in some diffusion pumps it appears only the Aroclors will work. However, other than some ill will, we expect no adverse effects to our company. TURBINOL 153 We have one customer for this PCB-containing product, Texas Eastern Transmission Corporation. They u3e it as a lubricant in 18 or eo turbine-compressor combinations, each installation being worth or more. They are the major supplier of natural gas to the East Coast Including New York City. To our knowledge, there Is no approved fire resistant lubricant that can directly replace Turbinol 153. The beat candidate would be a straight phosphate ester, but for a reasonable change-over General Electric (the turbine manufacturer) should first approve the product and then Texas Eastern would probably require 5,000 hours of running time before agreeing to the switch. r COMPANY CONFIDENTIAL TRAN 003Q29 (^V ${ 13 HARTOLDMONOQ25667 I -2- To avoid the possibility of shutting this pipeline down, and/or causing such a great expense to this customer that they would sue us, we recommend giving them 8 months grace from the time G. E. has approved an alternate fire resistant fluid - hopefully our own straight phosphate ester. In addition, we recommend Monsanto absorbing the cost to incinerate their current charge of Turblnol 153 (estimated at 54,000 gallons - a cost to Monsanto for incineration and freight equaling $27,000) plus providing them a free charge of straight phosphate ester, should they decide to remain with us. Our 1972 budget for this product is 325,000 pounds at $107,000 - all of which wc expect to lose if we withdraw from the market with less than the notice recommended abo^e. PYDRAUL & MISCELLANEOUS INDUSTRIAL FLUIDS In addition to the products above, we have 10 Pydraul fluids and 5 miscellaneous industrial fluids that contain polychlorinated terphenyls. Our domestic 1972 budget for these products is 14,664,000 pounds and $3,742,000. If we stop using PCTs without fully tested NC/N2C ester formulations, inventoried replacement products, and 90 days thereafter for conversion, we will lose all of this business. Note the NC/N2C ester formulations. We do not think it realistic to think that we could convert customers to interim formulations and then convert them later to NC/NgC products. If inventoried product and fully tested formulations were available on 1/1/72, and we were given 90 days to convert customers, we would estimate our 1972 sales to be 9*683,000 pounds and $2,646,000. Our losses then would be 4,981,000 pounds and $1,096,000. We would expect to retain 52# of the business on new products. Assuming availability on 1/1/72 of inventoried products and fully tested formulations but given 180 days to convert customers, we estimate 1972 sales of 12,764,000 pounds and $3 ,287,000. This represents a loss of 1,900,000 pounds and $455,000. We would expect to retain 11% of the business. REPLACEMENT FLUIDS One assumption of all these calculations is that our new formulations will be compatible with our current products except for Turblnol 153, Pydraul 150A and the air compressor lubricants including Pydraul ACA, Pydraul AC Wintergrade 23, and Pydraul 625A. COMPANY CONFIDENTIAL THAN 005030 HARTOLDMON0025668 -3- For Pydraul 150A our replacement product would not be compatible. The VI Improver In Pydraul 150A Is soluble only in the chlorinated terphenyls. Therefore, we recom mend that Monsanto replace free of charge our customers' current fill (estimated at 50,000 gallons) and absorb the expense of incinerating 50,000 gallons of returned fluid ($25,000 cost). The replacement product would be Pydraul 30E, For the air compressor lubricants we recommend replacing free of charge approximately 25,000 gallons of fluid now out in the industry and incinerating that amount at our own expense. Cost of incineration and freight would probably be around $12,500, and the replacement products would be Pydraul 30E, Pydraul 65?. and Pydraul 115E, Since all other new products would be compatible with the old, we would recommend simply adding the new to the old as makeup. This, of course, would mean gradual loss to the environment of all PCTs and PCBs in our current customers' systems. The alternative would be to replace their current charge of fluid with new fluids and incin erate their old fluid, all at our expense. A rough estimate of the amount of fluid involved in that opera tion would be 20ffl pounds. SUMMARY In summary, if we withdraw from this market with little notice to our customers, say by 1/1/J2, the industry we serve must find a source for over 16M pounds of fire resistant fluids, on an annual basis. The 1972 require ments would actually be larger since many customers would have to take initial fills for conversion. There may not be enough phosphate ester capacity available to satisfy these needs. The result would be plants going to water glycol or non-fire resistant petroleum oils to keep oper ating. Any resultant fires or inferior performance might possibly be laid at Monsanto's doorstep and result in law suits. Even with no fires, such a precipitous withdrawal of supply by us would create much long term ill with such industrial giants as General Motors, Alcoa, Armco Steel, Inland Steel, Republic Steel, United States Steel, Johnson Motors, Ralston Purina and Texas Eastern, to name a few. COMPANY CONFIDENTIAL T*Mt 053>- HARTOLDMONOQ25669 We recommend that If the decision is to withdraw, we do it in an orderly manner that will allow our customers of 10 or 20 years adequate time to choose and get delivery on acceptable replacement products. /pep C. L, Bradford N. T. Johnson COMPANY CONFIDENTIAL TRAN 005032 HARTOLDMON0025670 I C. L. Bradford/J. H. Davidson - 0. 0 December 8, 1971 INDUSTRIAL HYDRAULIC FLUIDS TRANSITION PLAN T. L. Oosaage N. T. Johnson R. E. Hatton J. R. Savage - B2NB J. Solarl - 1760 J. F. Kerber - T30 L. R. Stark - W4a D. H. Bolllger - P4WC 4 - ^ 1' 1 L-0~ t*v ^ The Situation In the past, our major strength in the Industrial hydraulic fluids business was our low cost chlorinated raw materials giving superior fire resistance to our fluids. These same materials had good solubility with oil and allowed us to formulate the Pydraul 312 series. The result was a very real and sizeable competitive advantage in terms of both quality and price over other synthetic fire resistant fluids. Our position is changing. We cannot use either polychlor inated biphenyls or polychlorinated terphenyls. This leaves us with a line of resale water glycol fluids (available now), a straight phosphate eater (available shortly), and a lower cost oil-phosphate ester blend promised for the first quarter of 1972. In terras of quality, we will have the advantages of greater stability and the fact that we are not tied to cresyllc acids. In terms of coat, none of these new products will give us any significant advantage over our competitors. In addition, the changeover (the second in a year) will create an adverse affect, particularly on our major customers, of whloh the top five account for 42 of our business and the top 20 of which account for 60%. This means that when the transition has been completed, we could be left with considerably less market share than we now have, with ill will at certain customers and potential accounts, and with no cost advantage to regain our position. Our sales growth in the future will not be as steep as our sales growth in the past, and our base will be less. I Objective Our objective in this transition program simply stated is to be out of PCB'a/PCT's by June 30, 1972, to salvage as large a share of the market as possible at a profit, and to be left with zero inventory of our current fluids. We expect to keep at least 50jf of our business, but we must take several steps as quickly as possible in order to achieve this. COMPANY TRAN 005033 CONFIDENT/AL HARTOLDMON0025671 2 Oeneral Motors 0. N. alone accounts for 1B% of our business. We must move Immediately to convert 0. N. to our phosphate eater fluid. The Chevrolet Division, which is over half of the 0. N. business and which will probably determine what oourse 0. H. takes, has told us that they will drain and flush all PCB containing fluids from their machines and refill with a new product. We will try to sell them our phosphate ester fluid at list price and charge fully for incineration of the old fluid. If necessary to salvage the business, we will capitulate on incineration and give some price concession on initial fill. In return, we will ask for a three year supply period to recover our oosts. We will not sell a low price phosphate eater as a replacement for A200B. If General Motors goes to the phosphate ester and if we sell a low priced phosphate ester to one location, we might be forced to sell it to all of them. IXie to the large share of our total business that 0. M. represents, selling to them at a low price would undermine the profitability of our total Pydraul program. In addition, due to their else, it is possible that suoh a move would deteriorate the pricing of the phosphate esters at all aceounts. Johnson Motors Johnson Motors is having difficulty with the State of Illinois because of too high phenolios discharge in their effluent. However, they appear to be sold on the most fire resistant synthetlo fluid, which means phosphate esters, and all phosphate ester fluids will create phenolles in their effluent. We have gone to them and suggested they move to our straight phosphate ester to avoid PCB problems and that they solve their phenolles problem with treatment of their effluent. In terms of prlolng and incineration, we will handle then In the same way as Oeneral Motors and, if necessary, make the same concessions. Check Point This should be a check point in our plan. If either Oeneral Motors or Johnson Motors are lost, ws should re evaluate our situation and decide again how best to proceed. COMPANY CONFIDENTIAL TR*N 0501' HARTOLDMON0025672 -3- Seleotor I Accounts After testing the water with Oeneral Motors and Johnson Motors and as soon as sufficient phosphate ester becomes available, we will move to oonvert all Selector I aocounts to straight phosphate esters. Selector II Accounts We will proceed at onoe to develop, test and get Paotory Mutual approval on a line of truly fire resistant oil/ phosphate ester fluids. As soon as the development Job is done and as soon as phosphate ester for these fluids becomes available, we will begin converting all Seleotor II acoounte to these new products. It may be necessary to raise prices on these fluids depending on the amount of phosphate ester necessary to give adequate fire resistance. . Reclamation We should move now to work with Plndett Service Co. on reclamation of the Pydraul fluids. This means quoting, in conjunction with Plndett, for reclamation business wherever we can be competitive. If it turns out that due to geography we cannot be competitive In conjunction with Plndett in all locations, we will establish relation ships with other reclaimers in those locales. Capaolty Note that reclamation ultimately could have a negative affeot on our voluae of new fluid sales. This along with our loss of business during the transition must be taken into consideration when planning the capacity of our new phosphate ester plant. Vital 29 Type Fluids Withdrawal of ourrent Pydraul 312A type fluids from the market and Introducing replacement fluids at higher prloes may force customer* to go to either higher prloed phos phate sstsr fluids, inferior quality watar glyool fluids, or the Vital 29/Daaoo 300 typa flulde which, in our opinion, are not fire reeletant. To combat this, ones ws determine COMPANY CONFIDENTIAL TRAN 005035 HARTOLDMON0025673 -4- whether the phosphate ester content of our replaoenent fluid Is significantly higher than Vital 29, we should go immediately to Factory Mutual, explain the situation on the fire resistance of these fluids and aak for Faotory Mutual's position. In any case, we should call this question of firs resistance to Factory Mutual's attention when they coise to St. Louis to test and approve our Selector II fluids. If they remove their approval, that should solve the problem. If not and If Vital 29 does start picking up business, we will develop a fluid in direct competition with Vital 29 and Daseo 300. Customer notification On April 15. 1971 we sent out a letter to the Pydraul mailing list saying "There are now no PCBe in any of our Pydraul fluids." This letter is not true and has irritated the Chevrolet Division of General Motors and probably anyone else who knows that it is not true. We will cowsunlc*te immediately to the same customers clearly stating that tne letter was somewhat in error and giving them the facts on the PCB contamination. If possible, we can temper this with our plans for future fluids. However, getting the infonsetion to our customers before they get this information from our competitors should be our primary consideration. Field Sales/Product Group Relationship Major aooounta where the Product Group may directly assist in conversion are listed in Appendix H. Current opinion is that all other accounts can be handled directly by the Field Salesmen (assuming we do have Selector II replace ments ). To help prepare the salesmen for this transition, a meeting will be held in St. Louis which will focus on strategic salesmen and their managers who will be in attendance. At the meeting we will lay out for them why we must reformulate, the reasons we will give the customer, replacement products with prices and benaflts relative to our old products and competition, pollution aspects of PCBe, PCTs, and phosphate eaters with a discussion of phenollos, B.O.D. and C.O.D., and oil contamination, and the legal aspects of our situation. We will leave them with a "Transition Handbook". Also at thla meeting we will specifically define who will handle what accounts, the order in which they will be handled, and the timing. TRAN 005036 company confidential HARTOLDMON0025674 5- Advsrtlslng To counter the negative effeota of refonaulatlon, we should plan and exeoute an advertlalng program that will explain why w# are making this move and point out the advantages of our new fluids versus competition. This program should begin now. Appendices Attached are appendloes which give some background on what our new Seleotor I and Seleotor II fluids will be along with their costs, prices and gross profit) what a typical conversion might cost us depending upon whether we get full prloe for the fluid and who pays for incineration) a list of our major customers/and what our profitability for 1972 may look like based on certain assumptions of conversion rates and costs of our new produots. C. L. Bradford /W Attachments J. H. Davidson COMPANY CONFIDENTIAL TRAN 005037 HARTOLDMON0025675 APPENDIX A COMPANY CQXFBEKTIAL Fluid Selector 1 Proposed Pydraul Line and Pricing __________ '_______ ____________ P,, ri.ci.ng1 T/T__ T/L Prum9 10-T/L Drums 5-9 Drums 1-4 Drums Pydraul 10 E Pydraul 29 E-LT Pydraul 30 E Pydraul 50 E Pydraul 65 E Pydraul 95 E Pydraul 115 E 4. 55 3. 60 Quote Quote Quote Quote Quote 4.75 3. 80 3. 65 3.65 3.75 3.85 3.95 4.95 4. 00 3. 75 3.75 3. 85 3.95 4. 05 5.00 4.05 3.80 3.80 3.90 4.00 4.10 5.10 4. 15 3. 85 3. 85 3. 95 4. 05 4.15 ^ Selector 2 Pydraul 135 C Pydraul 230 C Pydraul 312 C Pydraul 540 C 2. 25 2. 25 2.15 2.15 2.45 2.45 2. 35 2. 35 2.65 2. 65 2. 55 2. 55 2. 70 2. 70 2. 60 2. 60 2. 80 2. 80 2. 70 2. 70 / *5 gallon can pricing - add . 25/gallon to 1-4 drum price ^These prices are based on the fluids containing approximately 60% phosphate ester and development of a shear stable polymer to assure permanent fire resistance. COMPANY CONFIDENTIAL THAU 005038 HARTOLDMONOQ25676 APPENDIX B Pydraul Profitability Fluid Selector 1 lbs. /gal. 1 Cost-Short Term (Dixie CP) Cost-Long Term* Gross S. P. (Monsanto CP) (10-T/L Drums) I Long Term Gross Profit 2 \ \ 9.1 Pydraul 10 E mm .191/lb .545/lb 63% 9.4 Pydraul 29 E-LT .222/lb . 215/lb . 425/lb 4 5% 9.9 Pydraul 30 E . 204/lb .198/lb .378/lb 43% 9. 8 Pydraul 50 E .227/lb . 213/lb .383/lb 4 0% 9.7 Pydraul 65 E . 268/lb .238/lb .396/lb 35% ..7 Pyd raul 95 E .285/lb .250/lb . 407/lb 34% 9. 6 Pydraul 115 E . 295/lb . 256/lb . 422/lb 35% Selector 2 8.44 Pyd raul135 C 8.44 Pyd raul 230 C 8.44 Pyd raul 312 C 8.49 Pydraul 540 C .170/lb .168/lb .170/lb .175/lb .165/lb .160/lb .160/lb .165/lb .314/lb . 314/lb . 302/lb . 302/lb 42% 44% 4 0% 38% * Finished Product Cost Including Conversion and Drum Costs Average Freight and Warehousing at $. 03/pound TRAN 005039 HARTOLDMON0025677 APPENDIX C Pydraul Blends V?' V v-f P(P f^c All prices, costs and profit figures based on the following blends. * . +/' ,\t Pydraul 10 E Pydraul 60 Pydraul 65 E fl' K* Pydraul 29 E-LT N CP - 35% S-Z141 - 63% Polymer - 2% Pyd raul 90 E Pydraul 30 E^ 7 n* .S N,CP -40% TPP 50% 21 CDP -50% 1/ <S 1*0 t V*c - Z* T'*^'4" Pydraul 115 E Pydraul 50 E N2CP TPP Z<0 7f \3< 7oCii i *" rz; c - NP 7-6% tpp e+% i7 -f rt-u-w Pydraul 135 C 1n2CP 20% S141 46% Oil 33+% Polymer < 1% NCP 88% TPP -B% io. r "t ( u (--f* i>c - z*u Pydraul 230 C N CP 41% S141 16% Oil 42+% Polymer <.1% NCP 100% Cc liTt Pydraul 312 C N CP 46% S 141 9% Oil 44+% Polyme r <1% cs, A ** t o t,*4 It & A: flt" aV * *' Pydraul 540 G N2CP 56% Oil 43+% Polyme r <1% f ()CVt *' I tHuP' Oil could be Sunoco 800 N, Mobil 750 or H 230 but cost of all i s $.04/pound > * - rv CoMfMNV cNFIDENtial 1*AN 005040 HARTOLDMON0025678 APPENDIX D Typical Customer Conversion Customer Used for Calculations: Chevrolet - Bay City Date for calculation of cost to customer and cost to Monsanto for conversion from Pydraul 312 A to Pydraul 65 Et _____ _____ _____ Machine Capacity = 50 machines x 300 gallons/machine = 15, 000 gallons Flushing fluid = 15, 000 gallons petroleum oil Freight Cost * $2. 00/cwt. = $. 22/gallon Cost of Incineration = $. 03/pound Case 1 Chevy Bay City pays full price for new fluid plus flushing fluid plus freight for returned fluid plus $. 03/pound to incinerate returned fluid. A. Cost to Chevy 1. 15, 000 gallons Pydraul 65 E @ $3. 45/gallon 2. 15, 000 gallons oil flushing fluid @ $. 50/gallon 3. 15, 000 gallons (138, 000 lbs. ) 312 A plus 15, 000 gallons (112, 000 lbs. ) oil incineration @ $.03/pound 4. Freight on returned fluid: 250,000 lb6. x .02/pound $51, 175 7, 500 7, 500 5, 000 TOTAL Cost $71, 175 Cost per Gallon of new fluid = $4. 74/gallon (Does not include labor or downtime ) All calculations based on bulk inventory cost of $0, 223 per pound for Pydraul 65 E which assumes Monsanto manufacture of cumyl phenol at 30^/pound COMPANY CONFIDENTIAL TRAN 005041 HARTOLDMON0025679 (Case 1 Con't) B. Gross Profit to Monsanto Sales: 15,000 gallons @ $3. 45/gallon COGS: 138, 000 pounds x , 223/pound Freight: 146, 000 pounds x . 02/pound Gross Profit % Gross Profit = 17, 581 51, 175 - 2, 920 36. 4% $51,175 30, 774 $20, 401 2, 920 $17, 581 Case II Chevy - Bay City pays full price for new fluid plus flushing fluid but Monsanto pays for incineration cost and freight. A. Co6t to Chevy 15, 000 gallons Pydraul 65 E @ $3. 45/gallon 15, 000 gallons oil flushing fluid @ $, 50/gallon = $51,175 = 7, 500 TOTAL Cost = $58*675 Cost per gallon new. fluid * $3, 92/gallon (Does not include labor or downtime) B. Gross Profit to Monsanto Gross Sales Lees: COGS $30, 774 Freight (New 2,920 Fluid) Incineration Cost 7, 500 Froight (Returned 5, 000 Fluid) _ Gross Profit % Gross Profit * 4, 981 _ ln 51,175 - 2920 " 1 * 7# = $51,175 = $46,194 $4, 981 COMPANY CONFIDENTIAL TRAH 005042 HARTOLDMON0025680 Case III Chevy-Bay City pays full price for fluid but Monsanto pays for flushing fluid plus incineration costs and freight A. Co6t to Chevy 15, 000 gallons Pydraul 65 E = $51,175 Cost per gallon new Fluid (Does not include labor or downtime) s $3. 45/gallon B, Gross Profit to Monsanto Gross Sales COGS Freight(New Fluid) Flushing Fluid Incineration Cost Freight (Returned Fluid) 30,774 2, 920 7, 500 7, 500 5, 000 Net Loss = $51,175 = 53, 694 = ($2, 519 ) COMPANY CONFIDENTIAL TRAN 0050*3 HARTOLDMON0025681 Top Twenty Customers for Pydraul A Customer t+ Products 1 General Motors 2 Johnson Motors 312-A, A-200-B . A-200-B 3 Armco Steel Most Pydrauls 1971 Projected Pounds ooo's Dollars ooo's 2, 860 760 1, 200 350 1, 030 300 4 Alcoa F-9-A, A-200-B, 150-A 600 210 5 Republic Steel 6 Inland Steel 135-A, 150-A 135-A, 150-A {W/G 20) 540 180 (155) 200 55 (30) 7 U. S. Steel 312-A, 135-A 285 80 8 Keystone Steel F-9-A, 150-A 195 75 9 Florida Steel 312-A, 230-A 325 75 10 Kelsey Hayes 230-A, 312-A 250 65 Briggs & Stratton 312-A . 240 60 12 Texas Eastern Turbinol 153 175 60 13 Laclede Steel F-9-A 120 50 14 Reynolds Metals 135-A, F-9-A (W/G 20) 110 (65) 38 (12) 15 Phelps Dodge F-9-A (W/G 20) 120 (45) 41 (9) 16 Dow 540-B 200 50 17 General Electric 312-A 180 45 18 Caterpillar 312-A 170 45 19 Lester Industries 312-A 150 40 20 Bethlehem Steel 230-A, 312-A, 150-A 100 35 21 All Other Pydraul Accounts 5237 1566 TOTAL 14,267 (265) 4, 200 (51) -ig nificant Industrial Aroclor Accounts ' * * Radiator Specialties Cincinnati Milacron Aroclor 6037 MCS 1004 x 68 iS COMPANY CONFIDENTIAL 0050** HARTOLDMON0025682 APPENDIX F 1972 Financial Results Case 1 1972 financial results as currently budgeted: Product (ooo's lbs) Volume Pydraul 60 45 Pydraul 150-A 1000 Pydraul A-200-B 2300 Pydraul F-9-A . 1150 Pydraul 625-A 275 Pydraul AC-A 600 Pydraul AC-A W. G. 24 Turbinol 153 325 Sub Total 5719 Pydraul 135-A 1400 Pydraul 230-A 240 Pydraul 312-A 6850 Pydraul 540-B 125 Sub Total 8615 Total 14,334 Projected 1971 Results 14,267 (Based on October actual) (Projected 1971 results 15,076 based on 3/31/71 x 4) (ooo's $) Sales 22 400 621 380 83 192 7 107 1812 336 59 1507 26 1928 3740 4200 4416 (ooo1 6 $) Gross Profit 9 185 171 148 24 67 -36 640 98 16 407 7 528 1168 1270 COMPANY CONFIDENTIAL 1385 TRAN 0050*5 * * *.*.* - T..*. <*/. t* - - HARTOLDMON0025683 APPENDIX F 1972 Financial Results Case II A. (1) Selector 1 fluids sold at 75% 1972 budget volume through 3/31/72 (2) NCP fluids replace Selector 1 fluids on 3/31/71 sjid sold at 50% 1972 budget volume from 3/31/72 through end of 1972 B. (1) Selector 2 fluids sold at 75% of 1972 budget volume through 6/30/72, (2) NCP/oil fluids replace Selector 2 fluids on 6/30/72 and sold at 50% 1972 budget volume from 6/30/72 through end of 1972 C. General Motors plants on NCP from 1/1/72 but at the same relative rates as A and B above. A-200-B to 50 E 312-A to 65 E Product^ Volume (ooo's lbs) Sales (ooo's) Gross Profit2 (ooo's $) Selector 1 t Uo Pydraul 10 E f i !' Pydraul 29 E-LT j.,u/U*^pydraul 30 E Pydraul 50 E ? iv.4 t pydraul 65 E *>'**1/ , , __ _ /*< .i Pydraul 95 E icifl Pydraul 115 E Sub Total 45 560 193 1910 1225 340 152 4425 22 222 63 656 437 128 59 1587 9 101 31 261 147 43 18 610 Selector 2 Pydraul 135 C Pydraul 230-C Pydraul 312 C Pydraul 540 C Sub Total TOTAL 825 144 2800 72 3841 8266 263 39 689 17 1008 2595 72 12 221 5 company 310 CONFIDENt/Ai 920 ^Financial results for new products include results for old products as specified above - Based on our cost long term* Appendix B TRAN 005046 HARTOLDMON0025684 APPENDIX G Incineration Costs Gallons* 100, 000 150, 000 200, 000 250,000 300,000 400, 000 500, 000 Incin. Cost @ $. 03/pound $ 28, 800 43, 200 57, 600 72,000 86, 400 115, 200 144, 000 Freight @ . 025/pound $24, 000 36, 000 48, 000 60, 000 72,000 96,000 120, 000 Total $52,800 79, 200 105, 600 132, 000 158, 400 211, 200 264,000 '(`Average density of fluid @1.15 = 9. 6 pounds/gallon COMPANY CONFIDENTIAL TRAN 005047 HARTOLDMON0025685 Monsanto appendix h ,.om ."! \ociiox, Norman T. Johnson___________________________________________________ November 24, 1971 " T. L. Goasage - B2S L * |l*|MCI TO : Pydraul Accounts C. L. Bradford B2S G ' The following are those accounts which I feel may require product group participation during the transition to reformulated Pydrauls: General Motors Central Foundry Chevrolet Pontiac Chevy Grey Iron Foundry Buick Chevrolet Bedford, Indiana Bay City Pontiac, Michigan Saginaw Saginaw Massena Outboard Marine Armco Steel Republic Steel Inland Steel Florida Steel Waukegan, Illinois Middletown, Ohio Chicago Chicago Tampa, Florida lndiantown, Florida Alcoa U.S. Steel Pedco Texas Eastern Transmission Kelsey Hayes Briggs &< Stratton Calumet Steel Cincinnati Milling Wynn Oil Radiator Specialties Marathon Oil Laclede Steel Carter Carburetor Pittebu rgh Pittsburgh Houston Houston Detroit Milwaukee Chicago Cincinnati, Ohio Los Angeles, California Charlotte, N. C. Detroit St. Louis St. Louis ' ' COMPANY CONFIDENTIAL TRA* 005048 N tO *t V lt 9 HARTOLDMON0025686 C. Li. Bradford November 24, 1971 Page 2 1 would hope that all other industrial fluids accounts can be handled directly by the salesmen. However, if we have no low cost Pydraul replacement the need for product group assistance to retain the business will be substantially increased. lb COMPANY CONFIDENTIAL TRAN 005049 HARTOLDMON0025687 D0506182 Monsanto .......... . .oc.r o- ' ...... R. E. Hatton - 0. 0. December 13, 1971 TORBZNOL 133 FROORAM to : Co L. Bradford 1 Tha program to atop supplying PCB containing Turblnol 153 to Taxaa Eastern Transmission Corp. (our only customer) Involves the following basic steps: a.Inform them by personal visit that Turblnol 153 will not be available after June 1, 1972 (except under "hold harmless" conditions If necessary), b. sell then and Oeneral Electric on converting to MCS 1223 (all phosphate ester fluid) and c. asalst In conversion and disposal of used fluid. Successful accomplishment of this program Involves a number of actions which are detailed below. a. Visit to Texas Eastern should Involve appropriate Monsanto personnel and Texas Eastern purchasing, operations and engineering groups. This visit should be scheduled to coincide with or closely follow the general Monsanto PCB announcements . b. The cut-off date of June 1, 1972 should be firm. However, If turbine and gas com pressor change over from Turblnol 153 cannot be accomplished by then, a "hold harmless" agreement must be negotiated. c. Conversion to MCS 1223 In gas turbines will require both Oeneral Electric and Texas Eastern approvals. Ve will probably need Texas Eastern help in expediting 0. E. approval. Oas compressor OEM acceptance an4/r approvals will be required but less difficulties are expected. d. To Insure 0. S. cooperation, their technical, engineering, production and marketing should be Informed of our program promptly after the Texas Eastern visit. * o r* 1 TtX CcC75o \< HARTOLDMON0025688 MONSANTO D0506183 2 Va should cooparata fully with Taxaa Eastern during tba eonvaralon and aubaaquant atart-upa.' Propar disposal of usad Turblnol 153 uat ba arrangad. f. Plaid aalaa and turblna aanufaeturars othar than 0. E. ahould ba lnformd of thaaa actions and thalr reasons, 1) to pravant contlnuad damaga to our laaga by "nora chlorlna/baarlng problem" and 2) to ba aura all potantlal Turblnol 153 cuatonars do not daslgn to uaa this fluid and ara aware of our all phosphata astar turblna lubricants. /pep R. E. Hatton TEA O.C759 HARTOLDMON0025689 CLg D0506184 C. L. Bradford January 7, 1972 R. E. Hatton TORBXMOL 153 WITHDRAWAL PLAN REH Nano to CLB - 12/13/71 . CLB Memo to TLB - 12/15/71 Turblnol 153 Program * Santovae 1 4 2/Turblnol 153 Tranaltlon Program T. L. Ooaaaga B2SL Tom, aupplementlng Roger Hatton*a and ay previous memos to you, following is our plan for moving Texas Eistern Transmission Corporation away from Turblnol 153 and hopefully to one of our own aubatltute fluids. Date Action 1/14/72 Present our hold harmless agreement to Texas Eastern indicating that we will sell them no more fluid after January 15, 1972 unlesa they sign thla agreement, and in any case,, we will not sell them any Turblnol 153 after June 30, 1972. On that aama date we would hope to present them a aubatltute fluid. 2/15/72 Start a field trial on an alternate fluid In one of Texas Eastern's turbines. 6/3/72 Begin selling Texas Eastern our new fluid and stop sales of Turblnol 153* Attached is a copy of the hold harmleas agreement which we expect to have Texaa Eastern sign. ` /pap Attachment C. L. Bradford 11A CCCeGC HARTOLDMON0025690 Monsanto 'Cl TO c. L. Bradford - 0. 0 December 15, 1971 SANTOVAC 1 and 2/TURBINOL 153 TRANSITION PROORAM CC R. E. Hatton T. L. doesage Ton, attached are two nemos to me fron Roger Hatton outlining the atepa that will be necessary to get out of tho Santovac 1 and 2 business and the Turblnol 153 business. We will start on the Santovac 1 and 2 program as soon as you tell us the date we should get out of the business. Turblnol 153 *111 be coordinated with our total Pydraul program. Your comments, please. /pep Attachments C. L. Bradford MONSANTO D0506181 TcX CCC7S? HARTOLDMON0025691 Monsanto T. L. GoiMgcMift* iNIMI ft |ih*MONi February 8, 1972 SPECIALTY PRODUCTS MONTHLY REPORT JANUARY. 1972_____________ See distribution list attached z.:$ TO : H. S. BERGEN 4 CP' Sales Summary January domestic sales are estimated at $3.625M, 5% above a budget of 53.437M. By major Business Group headings, domestic sales are estimated as followsi Hydraulics and Lubricants, $132M; Dielectrics, $622Mt Process Fluids, $32BM| Latex Binders, $40M; Paper and Wood Chemicals, $1.234M> PCB/PCT, $669M; FRP, $600M. Monthly sales budgets by these same major Business Group headings are not yet available. U. 8. export sales for January are estimated at $550m, 8% over a budget of $509M. Ex-U.S.A. sales are estimated at $5SOM, 2% over a budget of $540M. Again, a breakdown of U.S. export and Ex-U.S.A. budgets by major Business Group headings are nojt yet available. Total worldwide__sales are estimated at $4.725M, 5% ahead of a budget of $4.406M. Over budget performance Which may even exceed these preliminary numbers, can be explained in part by high Plasticiser Aroclor (PCB/PCT) sales Which will continue through the first quarter of 1972 and are unbudgeted. Further, sales were strong in Dielectrics in January with customers trying to maintain enough inventory to prevent shutdowns While hold harmless letters are being executed. Paper and Wood Chemicals were under budget as a result of weakness in rosin Sise. Latex Binders was considerably below budget. Monsanto-Europe, as a group, report January sales of $610M, $187M over budget. Monsanto-Canada, as a group, reports January sales of $248M, 10% below budget. Hydraulics and Lubricants Hydraulics and Lubricants are estimated to be about on budget for the month. Mo major deviation in sales price or volume. Skydrol 500C gives evidence of oausing some elastomeric materials to stick to some metals under certain conditions. BOAC, Pan Am, and Boeing are evidencing much concern. The business outlook is generally good. Both the aluminum and airlines industries are projecting significant (10%) growth in '72 over '71. The Pydraul NC Ester program is on schedule. BAC in the U.K. has committed to two further years on Skydrol B/C. We have failed to regain the Skydrol business at Air Canada. COMPANY ' CONFIDENTIAL TRAN 005195 HARTOLDMON0025692 H. S. Bergen -2- February 8, 1972 Chrysler-Detroit hae ordered 10 drums of Santosafe W/g is for hop trial. The potential is 200M gallons annually. PordShefffield ordered 10 additional drums of Santosafe W/o 20 to continue their trial. We appear to have an excellent chance to get this 100M gallon per year account. Johnson Motors and Central Foundry are shop trialling new Pydraul Phosphate Ester fluids, Pydraul 50E and Pydraul 65E. Dielectrics Dielectric domestic sales are estimated at 30% over budget and $300M ahead of January 1971. Sales were strong in both capacitor and transformer fluids. Many customers altered their normal order pattern to get fluid before the 14 January deadline. So far, 10 out of 45 capacitor/transformer manufacturers have been approved. Approvals include General Electric and Westinghouse and roost of the large users. Dow and Dow Corning appear to be active at several accounts with candidate replace ment fluids for Aroclor 1016. Dielectric sales in Canada were strong - $2214 over budget. Mo dielectric fluids will be sold in Canada after 30 January without a hold harmless agreement. Most customers are expected to sign. 114 tons of Aroclor dielectric was shipped to Rumania. Europe booked 600 tons of Aroclor for Russia to be shipped before 30 June. Dielectric sales in the U.X. continue low. Process Fluids Domestic process fluid sales were below budget even with non-FR heat transfer fluids estimated at 178% of budget. Biphenyl was considerably off budget with no sales to Dow. Santosol sales to MCR were also off. Four new heat transfer systems were filled in January, totalling 90 drums of Therainol 55. In addition, Farmland Industries ordered a further 2,000 gallons of Therminol 66 for their new system bringing it to a 12,000 gallon system. 30 drums of Iherminol 55 and 285 drums of Iherminol 66 were shipped for system make-ups. Customers included Emery industries, PMC, Hooker, Union Carbide, and West Bend. Stauffer is promoting Cellutherm as a fire resistant replacement for FR at $5.50 gal. in truckload quantities. Dowtherm G is being seriously considered by Lever Brothers as an FR replacement and by Shell for a new system because of its high A.I.T. COMPANY - ONF/0ENT/AL TRAN 005196 HARTOLDMON0025693 H. S. Bergen - 3- February 8, 1972 Even though Dow did not order Biphenyl in January, we have received order* for 500M pounds to then in February. Santosol 340 sales were strong in Europe with shipments of $157M. Domestically, meetings*were held with both NCR and Nashua. We continue to maintain our supply position at both accounts. With our PCB situation as it is, we are realising no sales to Ciba Geigy against a budgeted sales of $22M. Latex Binders Latex sales were disappointing at about 45% of budget. The Textile Rubber anticipated purchases of two tank cars did not develop but their activity should pick up in February. Customer interest in the product in the carpet industry continues high. The outlook for February is considerably improved with a forecast of $300M pounds vs an estimated January performance of 175M pounds. Textile Rubber is now pushing BVCl under a 90 day cooperative program. lheir Vinatex subsidiary has three trials at three separate carpet mills. By the end of the month, they reported excellent results at Mercury Carpets and anticipated supplying at least a tank truck per week beginning sometime in February. Uniroyal in Dalton, Georgia ordered five drums of EVC1 for a trial with aluminum hydrate as a fire retardant saturant for needlepunch carpeting. Based upon their laboratory results, they are forecasting a 20 drum per week requirement. Globe Industries ran a 1 drum trial of EVCl on batting for the automotive industry. Their prime interest is fire retardancy and results were so encouraging that a longer trial will be made in February. Potential will vary between 1 tank truck per week to 2 tank trucks per month. C. L. Hauthaway & Sons continue to be quite bullish on becoming customers at the rate of at least 1 truckload per month in the near future. At Continental Can, BVCl continues to be the leader among the products they are looking at to replace solvent based beer can coatings. Here, FDA approval is a necessity. Their estimated potential is 4M pounds per year. Equitable Bag Company in Orange, Texas reported excellent wet rub results with Monflex in a commercial trial on shopping bags. They will be making an extended commercial run in February. Potential is 200M pounds per year at $.39 per pound. COMPANY CONFIDENTIAL '**" 005l'? HARTOLDMON0025694  > II ' H. S. Bergen 4 - February 8, 1972 Paper and Wood Chewleale Salee for the month domestically were strong in all areas except rosin size. Some expected January orders for rosin size were lost to Newphor and Cyfor-3. These products are being trialled at Fraser, Northwest Paper, Brown and Eastern Fine Paper. Our key domestic account for the month waa Weyerhaeuser coming in for $150M worth of PCW 10. In Canada, paper sales were $19M under budget. Zn Europe, Paper and Wood Chemicals were $21M over budget. Our Santo-Rez (wet strength resin) market program is being held up waiting for FDA approval. Once approved, we should see sig nificant increase in sales volume, the business outlook for the paper industry is showing signs of recovery. Fine paper mills Which constitute our major customers are still slow but projecting some increase this Spring. Boxboard industry is strong, in another major development. Garden States Paper ran two trials of RBS 109 biodegradable surfactant successfully. This is a key step in our total surfactant program with this company. $1.4M are involved. Continental Can. Hodge, Louisiana, ordered a tank car of Mersize TFL for evaluation. The potential is 2M pounds annually. Crown Zellerbach in Canada signed a contract for their total 1972 Elk Falls rosin size requirements. This amounts to $70K in business. Our price increase on PCW 10 at Weyerhaeuser has been settled. January sales were strong and the outlook for 1972 is good. Total Wood Chemical sales domestically is estimated at 104% of budget, the many small problems in establishing a relationship with Koppers continue but at no sacrifice to sales. in Europe, we booked 150 tons of Penta in Denmark at an 6% price increase, A Mersize trial was started in Belgium at Second Intermills. The potential is 400 tons. In Canada, Domtar took 5 tank trucks of rosin size. PCB/PCT Domestic sales were considerably over budget with unbudgeted Plasticiser Aroclor sales in excess of $300M. The withdrawal of both liquid and solid Plasticizer Aroclors is proceeding relatively smoothly. All customers have been notified and allocations have been established. Domestic shipments of solid Aroclors, particularly Aroclor 5460, were curtailed at the end of January in an effort to get all of our International shipments on the water in time to meet our March 31 cut-off deadline. - COMPANY* CONFIDENTIAL 005198 HARTOLDMON0025695 H. S. Bergen -5- February 8, 1972 Ho sales of PCB's for heat transfer systems were made domestically. All world areas began taking action to inform customers of the PCB/PCT withdrawal dates. In heat transfer, we estimate 11 customers have actually converted from PR to Therminol 55 or Therminol 66 with another 38 customers committed to convert. Several key customers may not stay with Monsanto. These include Rohr Corporation (5,000 gals.), 0. E. at Mount Vernon (8,000 gals.), Lubrisol (12,000 gals.) and Lever Brothers (3,000 gals.). Progress is good at Goodyear, Owens-Corning, Inmont, Sherwin-Williams, Reichold and FMC (165,000 gallons total). Santovac I and II has been discontinued. All customers have been notified. Turbinol 153 to Texas Eastern has been withdrawn from the market effective 31 January. Mo Turbinol 153 sales were made in January. The Pydraul withdrawal program is on schedule. We have written all known customers and have personally told our major accounts. All regions report things going well with little adverse reaction to date. Wynn Oil Company is very concerned about our withdrawal of the Aroclor products they are using. Their current products for crankcase, transmission and differential oils may be adversely affected. /br attachments T. L. Gossage COMPANY CONFIDENTIAL THAN 001199 HARTOLDMON0025696 H. S. Bergen ,February 8 1972 Dletrlbutiont B2SF 5040 5090 1070 5020 1800 B2SF B3NF B2SL P4MA 5040 B2MK B2SH B2HK T3A B2SL B2SJ> G4NA 1010 1650 B2SB B2SB A2MB C. L. Bradford* H. H. Dahlstrom H. F. Dixon/D. Goodwillie* H. R. Ford* R. B. Giles/R. Garnsworthy D. R. Hansen* H. T. Johnson* A. J. Koenig* G. G. Kosup* R. N. Founts* P. J. A. Nsrsh* W* B. Papageorge* C. Paton* E. M. Potter* W. R. Richard J. R. Savage* L. D. Shand* J. R. Sayers E. L. ShiMley* P. L. Slayton* D. L. Sliney B. G. Tibbetts* J. E. Tucker* COMPANY CONFIDENTIAL TRAN 005200 HARTOLDMON0025697 Monsanto fee* *! i ttc**'**1' T. L. Gossage - B2SL VC'tCT January 4, 1972 rr\ PCB/PCT IMPLEMENTATION Pitf f^tsteci - f-o ^ K JJKuB NJohnson - B2SJ Paton - B2SH L. Bradford - B2S0 TO : H. R. Ford - 1070 E. L. Shimley - 1010 D. R. Hansen - 1600 P. L. Slayton - 1650 D. V. Stegen - 1^60 CONFIDENTIAL Attached is a memo from W. R. Corey to C. P. Cunningham covering the PCB/PCT implementation program. This is sent to you to brW you up to date on activities in St. Louis. It can be discussed ~ with your salesmen, but should not be reproduced. You have received supplemental information from Gumming Paton covering specific activities in Therminol FR fluids. You and your salesmen who are involved in the Pydraul portion of this program will be briefed in St. Louis next week. Let me bring you up to date on what is happening in dielectrics. In late December, letters were sent out to all capacitor and transformer manufacturers notifying them of our plans to continue to sell dielectric fluids only to those customers who enter into a hold harmless and indemnity arrangement with Monsanto and who have the financial responsibility necessary to make such an arrangement meaningful. This was supplemented by personal visits by executives of Monsanto with Westinghouse and C E executives and by telephone calls to other key customers notifying them of our plans. Two types of letters were sent to our customers. Some customers were obviously financially responsible, and received letter 1 attached. Others were of undetermined financial responsibility and received letter 2 attached. You will note that the only difference in these two letters is that the second letter requires the customer to submit evidence of their financial responsibility. The hold harmless agreement was the same with both letters except that Monsanto executed those agreements attached to letter 1 customers and did not sign the agreement for letter 2 customers. Monsanto will sign the agreement for letter 2 easterners only after they have demonstrated financial responsibility. All inquiries concerning these letters on the agreement received by the field should be directed to Howard Bergen or in his absence to me. ,000303* t It lf-fC 300 *1 ) 2677 T 091838 ( ***** ll HARTOLDMON0025698 PCB/PCT IMPLEMENTATION PROGRAM January 4, 1972 Page Two Between now and 15 January, we are accenting orders for dielectric fluid, but are limiting customers t'o thel nurfflJTT BLrchasing pattern (l.e., no Inventorying future requirements). Ve have not sent letters to users of dielectric fluids other than jn>niifaeturgr of capacitors and transformers (l.e., transformer topup, repair shops or component manufacturers). Ve are continuing to supply these customers. Our plan is to discontinue supply to these customers after 15 January. Such customers win be prdpttrly notified it ATUture date and will be Informed that the fluids will be available only through transformer and capacitor manufacturers (i.e., transformer topup customers must go back to their transformer manufacturer for makeup fluid, repair shops likewise must go to their manu facturer for fluid, etc.). This should not be communicated to these customers at this time, or even discussed with capacitor and transformer manufacturers. Ve do expect the majority of our transformer and capacitor . customers to enter such an agreement with Monsanto. We do . expect a continuing dielectric business. Some of our customers will be upset and inconvenienced. VJe will attempt to minimize this. I expect each of you to support this program and to take all action necessary to assure that our field organization follows the policies of this program. At the same time, I expect all of us to do everything possible within the limits set forth in this program to maintain the best possible customer relations. If you have any questions or need any further clarification, please let me know. /JP Encs T. L. Gossage go003097 3C0 2678 T 091839 HARTOLDMONOQ25699