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FILE NAME Corning OC DATE 1972 Nov 13 DOC OC354 DOCUMENT DESCRIPTION Construction Group Manufacturing Monthly Report October 1972 . : . t ca] FIBERGLAS 3 FIBERGLAS 10 C. E. Peck subject CONSTRUCTION GROUP MANUFACTURING MONTHLY OCTOBER 1972 REPORT qa company correspondence from R. S. Grant date November 13 1972 CC The month of October was a very good month for manufacturing considering the mix of goods and the condition of M furnace in Santa Clara We completed the month with net sales of 32,336M and 28.7 gross margin The 9,269M gross margin was an time record To date the Construction Materials Plants have a gross margin of 27.8 This is tenth of a per cent below the time record set in 1959 . - We expect to be faced with a continued shortage of rail cars which will create some difficulty but we do not expect it to interfere with a good sales month M furnace is now up from rebuild and should contribute to profitability in November for a margin of 27.5 We The projections received from the plants are believe this to be conservative and we are striving to exceed 28 with a 9.2 million gross margin 3). NEWARK Net sales for October were 10,424M Gross margin was 29.3 with resulting gross profit dollars at an time high of 3049M for the Newark Plant inventory was 60.4 which is an improvement of 1.0 over Sept- ember results In general the plant performances were improved over Sept- ember The Wool Factory averaged a pack per day of 1.079 pounds The prod- uctivity of 15 and 16 Aerocor machines and the three Boxboard Filter machines was the best year The Marble factory completed its run shut down on schedule October 23 The Appliance Insulation manufact- and was as we continue to uring and service was improved over September experience the JM strike adjust and improve our overall effectiveness to this business as continues Shortage of rail equipment continues to be of major concern forcing large scale conversion to truck shipping and in some cases causing , relief in the near future The Molded delay in deliveries We do not see any Tile facility continues to be the most serious problem in the with plant The tile the facility and knockout section and deburring equipment is not feasible present product definition This equipment will have to be redesigned We limited capacity as an interim will attempt to operate the facility in will be measure The magnitude and economics of this style of productrio onll will con- determined this month Trials with the 5 high compression to date Major emphasis continues on com- time as they have been encouraging pleting 1972 profit improvement programs as we approach year WAXAHACHIE Gross and net sales are an time record The only other months that were Insula- to October were June and December 1969 and June 1970. Building close December 1969 which was an time record tion sales are the highest since and delivery Duct board sales are an time record Order backlogs are strong cycles on Duct Board are 56 days Flexible Duct 45 days Building Insulation continues on planned allocation 01 070 1089 1171 OC244-2 R1 C. E. Peck November 13 1972 ; Pg 2 pag. WAXAHACHIE Cont'd Inventories are exceptionally demand for each product line the low inventories which are construction period low ever since the rebuild due to the heavy Customer service has been excellent despite planned to continue low during the major V Manufacturing gain and gross margin represent a record operating month In addition to operations the August rebuild actual costs have resulted in a reserve credit of approximately 165M Projected manufacturing gain and margin less the reserve credit are 157M at 42.8 Cost savings due to the rebuild and 8th fiberizer are excellent KANSAS CITY The Kansas City plant had a manufacturing gain of 95M based on a plant valuation of 3,613M This valuation represents a record high for this year All production valuation net facilities performed sales total 6,191M at record resulting pack in a rates With the high gross margin for the month- " of 30.0 Along with high production during Process 333 in 7 days contributed the month the conversion of 71 Aerocor to to the financial improvements for the month This downtime was originally planned for 14 days Another highlight for the month is the trend in quality complaints The 12 complaints recorded for October represent the fourth consecutive month at this level Another key profit improvement item was the continued improvement on machine K This contributed to improvement in weight job efficiency in the Wool Factory November's gross margins are projected at 26.7 This drop is attributed to planned downtime on K furnace for major furnace repairs 3 machine is planned down for 4 days and 4 machine is planned down for 10 days During this time both machines will be reconditioned Along with this scheduled downtime the plant will be down for approximately 12 hours November 7 for work on stations and powerhouse Financial improvements will be noted during the month of November as will depend on the product mix a result of 71 Process 333 Pack per day but should approach experience on 72 Process 333 machine BARRINGTON Plant gross billings again exceeded the 6100M level with net sales just below 6000M Returns and allowances at 40M higher than September was the main implication in keeping the net sales figure down Continued followup on our C.O.I. showed an adverse trend in the last half of the month with roof sales increasing by 10 of the total sales and building reduced by a like amount With present inventory levels no immediate relief is seen from this situation Manufacturing performance though not at September record levels was very The wool area continued at a total building pack level of 400M lbs per day roof well over 330M lbs per day Gross margin for October was 26.3 and year will not be a Optimistic results from the advanced resin problem and high throughputs will continue trials on all indicate lines good with 24.6 this 01 070 1090 C. E. Peck November 13 Pg 3 1972 ae. BARRINGTON Cont'd We carry several cost implications into the month of November such as the holiday 44M labor contract increase 28M and maintenance consultation fees 20M In addition we will feel the penalty of considerably more fuel oil usage than previous months SANTA CLARA October net sales of 3,851M for Construction and 225M for Aerospace were well below plan and below the year date average The manufacturing gain of 82M and gross profit of 17.5 are also below the 1972 average Mix of goods again was unfavorable due to produces low cost out of inventory M line being down for rebuild which products Plant performances except for M line were above 100 November financial outlook is brighter as M line will be up and producing on the 6th M line rebuild expenses along with a holiday will hurt producing November results Continued emphasis is being placed on all other facilitfacilities ies to help offset these high costs by performing at peak efficiencies FAIRBURN October was a difficult month The decision late August to hold the ratios of our labor force that is female whites and blacks proved to be a back breaker Turnover continued at high level with two machine activity and the plant just plain ran out of applicants that met the they found themselves running lanes to blowing wool the baggers In addition the people they had were criteria As a result because they couldn't man inexperienced and poorly trained This is a bad combination to say the least They started experienc- ing field problems with poor packaging count order quantities etc. They temporarily abandoned hiring criteria and have hired enough people and are in daily training They have put on auditors to assist in count and visual appearance correction Also have added an hourly trainer per shift whose sole job is to work with the bagger crews in proper technique selection etc. These people are being directed by a salaried person whose job is training Salaried assistance was received from sister plants We're confident they're o.k. now It will take a month or so before the field is sure With all of this gross margin for October was 33.4 The machines overall ran well in October FG incinerator was repaired on 2 day downtime and is satisfactory It has successfully fired oil as alternate fuel The 3 day absentee 12 hour workday month - ~ accident and turnover Our feel is that the majority o trial was started October 2 We see trending down though still at high level rk force like it and will want to continue on it The union union election is s .ed for November 28 and 29. There has been the intense pressure we had last year The three unions involved the GBBA Teamsters and Trade Council of Northern Georgia have all had at least meeting at the local VFW There has been little handbilling not one 070 1091 1173 E. Peck November 13 1972 | Pg 4 ee BERLIN The full month of October was spent maximizing profit on final days of production and planning detail of asbestos free conversion on November Press performance hit a record high in October of 106.8 We returned a day reduced activity schedule to allow increased demand from the cylinders caused by the conversion to longer asbestos free cycles 10 13 to Considerable time is being spent to minimize 10 left 2-1-73 the date we start to bill AF at AF prices in Berlin after Construction started on Phase I of environmental control program and con- tractors have committed to December 4 1972 startup Critical plans will be submitted by contractor by November 6 1972 Phase I cost is now estimated at about 242,000 compared to original 901 at 116,000 New production statistics system was debugged on live data in October and will be on stream during the entire month of November Work was started to replace current planning systems with new composite planning and scheduling tools This system will be developed along with the completion of the production statistics QUALITY After experiencing three months of downward trends in quality complaints and adjustments during the third quarter the month of October resulted in a sharp increase in complaints and particularly adjustments which has completely reversed our previous trend toward improvement October adjustments for the Construction Materials Plants amounted to 31,823 or .098 of sales which is considerably over the monthly objective of .062 of sales date adjustments are .067 of sales Quality adjustments for one piece tub and showers amounted to 1,733 Vendors cost to 1,576 for October were backcharged 157 bringing Complaints on Bath Systems 4 in the net quality addition to the green stain problem on back walls is on the increase INDUSTRIAL ENGINEERING Construction Group Manufacturing labor control performance value added in labor reductions direct hourly per man per labor dollar Premium for October resulted crew manning salary overtime trends were in good levels and up at most plants especially Kansas City as well as period hourly and maintenance The high compression rollup unit on D machine continues to demonstrate mechanical success Plans are being formulated to run more extensive product recovery trials The Barrington robot building batt loader 901 is in the flow A ceiling panel film packaging unit is on order for Newark Engineering requests are in Toledo for film packaging and automatic film cutting requirements for the other producing plants A filter poly packaging program has been launched and equipment available in the marketplace 333 vacuum packaging is also commencing market testing CAPITAL date capital and reserve project expenditures through October 22,500M The total 1972 expenditure level is presently forecasted at 3,000M below the revised Group parameter of 31,000M 31,000M approximate 28,000M or 01 070 1092 174 . C. E. Peck November 13 Pg 5 1972 ; lg i CAPITAL Cont'd With approval in October of such major projects as V Conversion to AF Electric Melt and 92 Aerocor Conversion to Electric Melt our Group's 1973 approved expenditures are approaching 30,000M 901's in the approval flow which total approximately We currently have 1,600M with most of these funds to be spent in 1973. Each plant must assess the timing of new programs in conjunction with their business plans as we presently are headed toward an over expenditure of our 35,000M 1973 parameter MAJOR PROJECT STATUS as issued by P. Klein V Expansion O Waxahachie General Contractor Award Made Final contracts awarded for the fabrication of oven incinerator to Bigelow- Liptac and design and supply of all materials in the expanded batch facility to TECO Total construction package for civil structural mechanical and electrical for the duration of the construction phase from November 6 through . June , 1973 was awarded to Brown and Root of Houston decision to negotiate construction contract with Brown Texas Due to the and Root individual construction packages will no longer be assembled and issued through Purchasing for bidding This process will be replaced with issuing drawings to Brown and Root and developing developing a target price by December 15 Construction will bewill be started November 6 with Brown and Root moving on site with their field offices and their surveying layout group M Line - Santa Clara Electric Furnace Down for 2nd Rebuild M Rebuild remained on schedule despite having front wall fall in during drain The rebuild was 14 days We experienced forehearth The previous downtime took firing problems during the approximately 3 days longer first three days after startup which were related to a design improvement 5 and 6 Kansas City Electric Melt Furnace Conversion Costs Revised Design changes include a melter trench enlarged conditioning chamber and batch spreader which are being incorporated as corrective measures to overcome the T problems experienced Selection of Robicon as electrical firing system vendor was made in writing An additional 373M in costs is resulting from corrective furnace design changes and additional electrode cable runs between transformer room and electrodes Numerous problems regarding furnace interferences with building utilities and forming process areas have been and are being resolved as they are detected FG Oven Exhaust Incinerator Problems Corrected in October A four machine downtime October 5-8 permitted the incinerator firing change to combustion air on the Vorhees bers Proper operation of this incinerator effor Incentrate on improving forming section then permitted engineering liquid carryover and high smok on the cooling section Final contractor cleanup of miscellaneous work w one by November 30 Molded Tile Facility at Newark Requires Continued Major Effort Use of cloth on the molded tile surface has caused flashing separation and knock out devices and deburring equipment are not operable Re- problems in these areas although four molding presses are operating dseastiigsnfaicstonreicleyssarPyroduct appears good but prototyping of above problem operations are underway 01 070 1093 1175