Evans, in answer to these
charges issued the following
statement: “We consider the
safety of all personnel in the
plant as well as that of the
residents of Naugatuck to be the
first consideration of manage-
ment in all decisions regarding
operations, regardless of cir-
cumstance.”
“At the present time oper-
ations are limited in scope and
are being achieved by crews
completely familiar in all oper-
ating procedure and safety
practices.”
“Indeed, these personnel are
normally responsible for the
training and direction of the
regular operators.”
Rzeszutek also said yester-
day that he is considering ask-
ing the membership of Local
218 at their next meeting to no
longer honor withdrawal cards
of personnel who have salaried
positions.
He said the union considers
these people “undesirable for
readmittance to the Local in the
event they are removed from
salary.”
Evans said yesterday, that
the plant was forced to start
production in order to service
key accounts which include de-
fense contracts.
An issue was raised yester-
day by Joseph Rzeszutek, pres-
ident of Local 218, as to the
safety of management oper-
ating production especially with
skeleton crews.
The striking Local circulated
handbills to this effect around
the borough yesterday.
SATURDAY
MAY 27, 1967
UniRoyal
Continued From Page 1
According to Rzeszutek, the
only items shipped from the
Chemical were “slabs of re-
claim”, slabs of rubber re-
claimed from old tires and
other rubber items.
“What are they going to do
with slabs of reclaim, drop them
from airplanes and smother the
Viet Cong?” he asked.
Rzeszutek, a veteran of com-
bat who “had been shot up a few
times” himself, resented the
implication that he and his union
were unpatriotic. He said he
could guarantee that not one
thing had been shipped from the
Chemical plant to Vietnam.
Management lawyer, Atty. J.
Kenneth Bradley, said Friday
that the production was “par-
tially” for the defense effort,
and partially “for use in other
parts of the country.” The only
additional information he would
give was that the items “are not
for use by ourselves.”
A company official was quot-
ed Thursday as saying the oper-
ation of plant by management
personnel was for the produc-
tion of some key items neces-
sary for the Vietnam defense
effort.
In asking for an end to picket
line difficulties, Gaffney sym-
pathized with the union mem-
bers who felt that “someone is
destroying. . .the right to live
and work.” “I trust we will
never have a hearing”, the judge
said, adding that he hoped he
would not be forced to issue
an injunction against the union.
Judge Gaffney on May 6 issued
a show cause order against
Local 45 of the United Rubber
Workers in connection with
picketing at the Footwear Divi-
sion, but a hearing has never
been held. There have been two
continuances and more are ex-
pected as long as the picketing
remains peaceful.
The judge said he hoped the
issuance of a show cause order
will have the same effect at the
Chemical plant.
The United Rubber Workers
have been on strike for five-
weeks. Negotiations on the mas-
ter contract, being held in Cin-
cinnati, Ohio, recessed Friday
until Wednesday.
Union officials said, “The union wishes to set the record straight on the qualifications of the supervisory personnel who operate the process equipment.
“Mr. John Evans, plant manager, stated that the supervisory personnel normally train the regular operators, when in fact, new or transferred operators are trained by qualified operators from the bargaining unit.
“Mr. Evans’ consideration for the safety of personnel, as well as the residents of Naugatuck, can be refuted by the fact that in some instances, it had taken months to force the company to correct safety hazards in the plant. It also has been necessary to resort to grievance procedure and use of the extreme measure of refusing to operate some process equipment.
“The inaccurate statements made by the factory manager of the Chemical can be attributed to his inexperience, due to the fact that he was only recently appointed to the post of factory manager,” the official claimed.
By Cynthia Baran
UniRoyal workers, members of the United Rubber Workers Union Local 45, received word Monday from both the union and the company that indicates that both parties are miles away from a strike settlement.
From the factory manager of the local footwear plant, John M. Smith, the employees received a letter stating, “The strike need not have occurred. Prior to the expiration of the contract, the company proposed one of the largest offers ever made to our employees. It also proposed that our factories keep operating on a day-to-day basis under the contract while a new one was finalized.”
“Our company has bargained and continues to bargain in good faith. Its negotiating representatives are making every effort to establish a basis for settlement. The union has made only minor changes in its original demands which were beyond reasonable or justifiable limits for our highly competitive industry.”
Monday afternoon, President of URW Local 45, George Froehlich, conducted a meeting for union members to inform them of negotiation proceedings in Cincinnati. That was the first time the membership had been called together since the strike began.
Froehlich reported the negotiations as the “wierdest” he has ever been in since 1942.” He claimed that company officials were being “arrogant and reluctant” to settle the strike.
In rebuttal to Smith’s letter, he said that the company had not proposed working on a day-to-day basis until 15 minutes before the contract deadline. At this time, according to Froehlich, nothing had been offered or settled by or with the company.
He added that while union officials had been willing to negotiate on weekends, Sundays, and even the Memorial Day holiday, the company officials were not.
Froehlich told the union members, that union officials were not bargaining for a “few pieces of silver.” The main issues, according to the president, concern “decent treatment of employees.”
The union members were informed that during the strike they are still covered by health
Please Turn to Page 14
GEORGE FROEHLICH, president of Local 45, United Rubber Workers, addressed union members in the Naugatuck High School auditorium Monday afternoon. Those in attendance gave the negotiating committee a vote of confidence in negotiating sessions in Ohio. –(News Photo by Baker)
PRESIDENT OF LOCAL 308 Edward Alves, is shown, center of picture, as he leaves, the pickets, this morning. Alves had instructed the pickets to remain calm and under no circumstances to become violent. Management was waiting in cars to enter the gate and the police force was approaching the gate to open the line. –(News photo by Nichols)
Alves questioned the decision of the management, criticizing its actions in attempting production with “unskilled personnel.” The union president further asserted that because of the “danger of work involved at the plant, a disaster could occur, not only endangering the lives and property of those in close proximity to the plant, but to also those in the neighborhood.”
Alves said the union has contacted the insurance company on whether they had been informed of the production work by the unskilled personnel and reported the insurance company had not been notified to date. He said periodic inspections are conducted at the plant due to the nature of work involved.
The mass picketing at the Synthetic Plant, makes the third plant of the Uniroyal company to be involved since the three plants were struck 41 days ago.
Both Locals 218 of the Chemical and 308 of Synthetic Plants have maintained around-the-clock picketing since the beginning of the strike.
Continued From Page 1
in early April, however, that it wouldn’t prohibit any of the member companies from reaching an independent agreement with the union satisfactory to itself.
The effect of the pact, Bommarito charged, has been interference with employes’ rights to engage in concerted activities guaranteed by law because their “exertion of economic pressure is diminished or destroyed.” The result has been, he held, that Firestone has refused and is refusing to bargain collectively, in violation of the law.
He reiterated earlier charges that the five rubber companies for 20 years have negotiated wage increases and other benefits that parallel or are in tandem with those in the auto industry but that “now they have refused” to follow this policy.
By a WALL STREET JOURNAL Staff Reporter
CLEVELAND—Contract negotiations between the United Rubber Workers Union and five major rubber companies may take a long step toward a settlement this week as sentiment appeared to grow for linking pension and welfare improvements into a single package with wages and other benefits.
This would be a departure from previous industry policy of keeping the usual two-year master wage contracts separate from the longer term pension and welfare agreements.
Strikes by the union have closed 39 plants of Firestone Tire & Rubber Co., Uniroyal Inc. and B. F. Goodrich Co. for 45 days. Contracts at those concerns expired April 20, as did those at Goodyear Tire & Rubber Co., whose plants have continued to operate on a day-to-day basis. Plants of General Tire & Rubber Co. also continued to operate since its contract expiration May 15.
Existing three-year pension and welfare agreements with Goodyear, Firestone, Uniroyal and Goodrich also are due to expire on Sept. 15, however, and the time proximity of the two rounds of negotiations has created a hurdle in reaching a wage contract agreement. Company executives, even before wage contract talks started, cited the prospect of facing two boosts in employment costs, plus two strike threats, in a single year.
More recently, with strike benefit funds about depleted by the lengthy work stoppages of some 51,000 employes of the three struck concerns, union officials were said to be becoming less adamant about keeping pension and welfare agreements separate from wage contracts.
While Peter Bommarito, URW international president, said a month ago the union was willing to consider a joint package proposal from the companies it is understood nothing more than exploratory discussions have taken place thus far in negotiations on this score.
At the weekend, however, a URW spkesman said the union would be “wide open to any proposals” from managements for wrapping up the two contracts in a single package. Company spokesmen also reiterated the contention that such a move common in most other industries, is “the most logical and sensible thing to do.”
Whether the resumption of talks, recessed since Thursday, between the union and Firestone, Goodyear, Goodrich and Uniroyal this morning will result in any moves toward a single, overall contract remains to be seen. But the belief of sources close to the negotiations indicated prospects are better than ever before.
One possibly sticky point is whether a single, overall agreement would be for two years or for three. Earlier pension and welfare agreements have been for as much as five years. But both union and company sources noted this could be an issue for negotiation.
Mr. Bommarito earlier disclosed he has called a meeting for June 25 and 27, in Cleveland, of union pension and welfare contract officials. A union spokesman said the meeting still is scheduled, but he indicated this would not necessarily rule out a possibility of negotiating a combined contract before then.
The union’s strike benefit fund, amounting to about $6.5 million at the start of the three-company strike, presumably is exhausted as a result of the prescribed $25 weekly payments to striking members. The union has called on working members for voluntary contributions
equivalent to one hour’s pay a week, but the extent of the response has not been disclosed.
Walter Reuther, president of the United Auto Workers union, has pledged striking rubber workers financial and other assistance in their dispute. But both UAW and URW officials decline to say whether any financial aid has been asked for or given.
Whatever the prospects for gaining an early single contract settlement, the union indicated at the weekend it intends to press its unfair labor practice charge against the five companies for their mutual strike aid pact reached last April 1.
In a complaint filed with the National Labor Relations Board regional office in Cleveland last week against Firestone, the union charged the pact thwarted free collective bargaining and is prolonging the strike against the three companies.
The union spokesman said identical complaints are in the mail to the NLRB against Uniroyal and Goodrich and will be followed today with complaints against Goodyear and General Tire.
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Talks between the five union negotiating teams and the companies will be recessed today so that the package can be studied and to permit union officers to attend the funeral of Garnet L. Patterson, URW general counsel who died Saturday. It is doubtful, however, that the proposal would be accepted without several counterproposals being made.
Contention most likely would develop, it is understood, over the companies’ continued plan for pay-boost differentials between tire workers and other employes, the length of the contract and the guaranteed annual wage provisions. A pay-boost differential has been contained in each of the last three wage contracts, though the margins were narrowed in the 1965 agreement. Mr. Bommarito has labeled the differentials as discriminatory, however.
But the proposal has activated the negotiations, which had become somewhat passive. Moreover, the size of the proposed pay boosts indicate substantially higher employment costs, pointing to increased prices. Executives of the companies had said the negotiations were likely to increase costs so much that price boosts would be necessary.
AKRON, OHIO (UPI) — United Rubber Workers President Peter Bommarito, said today that the United Rubber Workers had rejected an offer by the nation’s five leading rubber producers and that the URW was prepared to continue the strike for another month.
The URW had been offered a 38 cent per hour wage increase, an increase in pension, unemployment and welfare benefits.
Bommarito did not indicate what it would take for a settlement.
Strikers in the borough, out of work for 49-days, had their hopes of a settlement dashed with the announcement of the rejection today. The rejection coupled with the announcement of a cut in union weekly benefits from $25 to $15 was a bitter pill to swallow.
According to a letter received by UniRoyal employes today, the union rejected the proposal late Tuesday afternoon.
The UniRoyal letter received in today’s mail by employes, listing the companies offer in full is as follows:
June 8, 1967
Dear Fellow Employee:
The Company and Union negotiating committees have been meeting in Cincinnati since March 21 in an effort to negotiate a contract and wage agreement. The Union presented demands to the Company which would cost at least $1.40 per hour, as well as seriously impair its ability to operate its plants on a competitive basis. The Union presented a portion of these demands on April 12, but did not present its full proposal until 11 a.m. on April 19-just 37 hours before the strike deadline.
Prior to the strike deadline, the Company offered the Union a proposal on wages and benefits which was worth approximately 26 cents an hour. This was greater than the total settlement in 1965. The Company also offered to continue negotiations on a day-to-day basis in order to reach an agreement. The Union rejected this proposal. Two of the unions in the major rubber companies did agree to continue negotiations on this basis and their employees are still working. Your Union made no change in its position prior to the strike deadline.
Meanwhile, the Union criticized the Company’s proposal by stating that it amounted to only about a 2 1/2% increase, whereas other industries have made settlements amounting to about 5%. The Company pointed out to the Union that the 5% settlements to which they referred covered not only wage and contract matters but also pension and insurance benefits and that they afforded these industries a high degree of stability since they were generally for a three year period.
The Company told the union repeatedly that it could not increase its offer because it was faced with a large cost exposure when the pension and insurance agreement is opened for negotiation later this summer. Because this unknown factor acted as an obstacle to successfully concluding negotiations, an effort was made by the Company to open the pension and insurance negotiations now and attempts to negotiate all matters to a conclusion. This, of course, would provide improvements in pensions and insurance several months earlier in the year. This offer was made with full recognition that neither the Company nor the Union could insist that the other party negotiate on pensions and insurance at this time as a condition to settlement, but it was felt that this was a fair and reasonable method of resolving the problem.
In order that you may properly evaluate the situation, we felt you should know what the Company has offered. Following are the principal points in the proposal made to the Union on June 5, 1967:
Please Turn to Page 12
United States Rubber Company and Subsidiary Companies
Financial Briefs
1963 1962
Sales . . . . . . . . . . . . . . . . . . $980,230,000 $1,006,793,000
Federal and foreign income taxes . . . . . . . 24,274,000 22,619,000
Net Income. . . . . . . . . . . . . . . . . 22,105,000 25,694,000
Dividends paid: Preferred stock, $8.00 a share . 5,137,000 5,151,000
Common stock, $2.20 a share . . 12,854,000 12,909,000
Earnings retained in the business . . . . . . . 4,114,000 7,634,000
Net Income a Common Share . . . . . . . . . . $2.90 $3.50
Employees’ pay and benefits . . . . . . . . . 342,389,000 358,478,000
Plant and equipment expenditures* . . . . . . 44,648,000 39,200,000
Depreciation charged to earnings . . . . . . . 27,217,000 27,657,000
Interest on long term debt . . . . . . . . . . 5,338,000 5,310,000
Long term debt . . . . . . . . . . . . . . . 162,039,000 153,262,000
Working capital, net — amount . . . . . . . . 306,064,000 314,047,000
— ratio . . . . . . . . . . 3.0 3.2
Stockholders’ equity in business (net worth) . . 352,121,000 347,434,000
Book Value a Common Share . . . . . . . . . . $48.78 $48.08
largest and most diversified rubber company, our tire,
footwear and chemical business continues to expand.
Two Plants in Italy
At Turin in Italy we have a 50 per cent interest in Naugatuck-Rumianica, a producer of rubber and agricultural
chemicals, and other products that are sold throughout
the Common Market. In Milan, U. S. Rubber has acquired a majority interest in Rub-Co-Plast, a company
that will produce our line of coated fabrics and Royalite
products.
Information Center to Cut Costs
First of a series of management information and data
processing centers is nearing completion at Naugatuck,
Conn. The center’s modern electronic data processing
equipment will help speed such management functions as
purchasing, sales forecasting, production planning, inven-
A
B
C
D
Financial Review
1963 Sales and Profits Affected by Strikes
Although sales of most products in 1963 were equal to or better than 1962, strikes in four of our five tire plants seriously affected our sales of this major product.
A company-wide labor agreement with plants represented by the United Rubber, Cork, Linoleum and Plastic Workers of America was signed in June by the Company and officers of the Union. However, strikes were called in July by local unions at four of our five tire plants, over terms of local supplemental contracts.
One tire plant was reopened in mid-October, another in mid-November and a third was reopened in mid-December, with the fourth plant continuing on strike through the year end.
In addition, there was a 27 day strike at two of our chemical plants, a 10 day strike at a third chemical plant, and day strikes at one of our plastic plants and a 39 day strike at one of our Canadian footwear plants, the largest rubber footwear plant in Canada. The stoppage of production at these plants caused merchandise shortages which affected our ability to fill customers’ orders. As this report was written, all strikes had been settled.
Obviously, the cost of these strikes, both in loss of sales and higher expenses due to abnormal absorption of maintenance and other overhead expenses during the periods the plants were shut down, adversely affected our results from operations.
Sales Lower by 2.6% vs 1962
Notwithstanding the shortages of inventories caused by the strikes, our sales to customers in 1963 aggregated $980,230,000 – the second highest year in our history, being exceeded only by our peak year of 1962 when sales totaled $1,006,793,000.
Higher sales in domestic markets of footwear, foam rubber products, textiles and chemicals, and in practically all areas outside the U. S. A. helped to offset some of the decrease in domestic tire sales.
Other Income
“Other Income, Net” comprises $5,071,000 of dividends from affiliated companies, interest earned on loans to customers, securities and temporary investment of excess working cash, royalties from licensees, and other miscellaneous income items, less $1,967,000 of interest paid on short term bank loans, mostly in connection with foreign operations.
Undistributed earnings of affiliated companies (in which we own 50 per cent or less of the outstanding shares) are not included in our income. Equity in 1963 retained earnings was $362,000, equivalent to an additional six cents on our common shares.
Taxes
During 1963, we provided $24,274,000 for Federal and foreign income taxes. In addition, excise, social security, property and other taxes levied against the Company by Federal, State and local governments amounted to $83,207,000. These direct taxes aggregated $107,481,000, compared with $117,365,000 for the year 1962. In addition, in 1963, the company withheld $42,253,000 from employees’ wages and salaries for personal income and social security taxes.
The total of all taxes paid and collected was $149,734,000.
Foreign Exchange Losses
Foreign exchange losses charged against 1963 income amounted to $1,172,000, chiefly from currency devaluation in the Congo. Comparable losses in 1962 were $2,292,000, principally in Canada, Colombia, Argentina and Brazil.
United States Rubber Company and Subsidiary Companies
Liabilities
December 31
1963 1962
Current Liabilities
Accounts payable . . . . . . . . . . . . . . . . $ 66,997,403 $ 55,670,807
Foreign bank loans . . . . . . . . . . . . . . . 19,674,268 17,992,000
Current maturities of long term debt . . . . . . . 4,762,753 2,332,000
Accrued Federal income taxes . . . . . . . . . . . 11,920,634 12,536,580
Other accrued taxes, including foreign income taxes . 17,882,045 18,439,779
Other accrued liabilities . . . . . . . . . . . . . . 34,534,979 34,620,781
TOTAL CURRENT LIABILITIES . . . . . . . . . . 155,772,082 141,591,947
Long Term Debt
2½ % debentures due April 1, 1967 . . . . . . . . 8,000,000 10,500,000
2½ % debentures due May 1, 1976 . . . . . . . . . 21,436,000 24,215,000
3¾ % promissory notes due January 1, 1982 . . . . 50,000,000 50,000,000
3¾ % promissory notes due July 15, 1995 . . . . . 60,000,000 60,000,000
Foreign and domestic subsidiaries . . . . . . . . . 17,839,953 6,215,199
TOTAL LONG TERM DEBT . . . . . . . . . . . 157,275,953 150,930,199
Deferred Federal Income Taxes and Investment Credit . . . 10,207,482 4,174,528
Reserves
Foreign activities . . . . . . . . . . . . . . . . . 15,608,187 17,838,255
Retirement allowances . . . . . . . . . . . . . . 9,172,186 9,908,175
Insurance . . . . . . . . . . . . . . . . . . . . . 3,723,858 3,800,199
TOTAL RESERVES . . . . . . . . . . . . . . . 28,504,231 31,546,629
Minority Interests in Subsidiaries . . . . . . . . . . . . 11,718,766 11,506,355
Stockholders’ Equity
8% non-cumulative preferred stock, $100 par value:
Authorized and issued — 651,091 shares . . . . 65,109,100 65,109,100
Common stock, $5 par value:
Authorized — 10,000,000 shares
Issued — 5,900,844 shares 1963; 5,899,104 shares 1962 . 29,504,220 29,495,520
Capital surplus . . . . . . . . . . . . . . . . . . 30,358,441 30,272,800
Retained earnings . . . . . . . . . . . . . . . . . 230,930,670 226,816,682
355,902,431 351,694,102
Less: Treasury stock at cost
Preferred stock held for retirement — 9,000 shares 1,413,071 1,413,071
Common stock — 51,591 shares 1963;
62,000 shares 1962 . . . . . . . . . . . . . . . 2,368,705 2,846,614
3,781,776 4,259,685
TOTAL STOCKHOLDERS’ EQUITY . . . . . . . . 352,120,655 347,434,417
TOTAL . . . . . . . . . . . . . . . . . . . . . $715,599,169 $687,184,075
See Financial Notes on pages 19 and 20.
United States Rubber Company and Subsidiary Companies
Consolidated Income and Retained Earnings
1963 1962
Net sales $980,229,858 $1,006,792,650
Other income, net 3,104,402 3,678,822
Total Revenue 983,334,260 1,010,471,472
Cost of goods sold 771,803,722 803,532,053
Selling, administrative and general expenses 157,215,827 149,069,079
Total costs and expenses (including depreciation
of $27,216,802 in 1963 and $27,657,250 in 1962)
929,019,549 952,601,132
54,314,711 57,870,340
Interest on long term debt 5,337,805 5,310,465
Profit Before Income Taxes and Other Charges 48,976,906 52,559,875
Federal and foreign income taxes, less $2,395,000 in 1962
representing taxes paid on depreciation charged to prior years’
operations but not deducted for tax purposes in those years
(see note on page 19) 24,274,394 22,618,743
Restricted foreign earnings and minority interests
1,425,979 1,955,018
Foreign exchange losses 1,171,947 2,291,714
26,872,320 26,865,475
Net Income 22,104,586 25,694,400
Retained Earnings at beginning of year 226,816,682 219,182,691
248,921,268 244,877,091
Cash dividends – Preferred stock $8.00 a share 5,136,728 5,150,728
– Common stock $2.20 a share 12,853,870 12,909,681
17,990,598 18,060,409
Retained Earnings at end of year $230,930,670 $ 226,816,682
See Financial Notes on pages 19 and 20.
18
Capital Surplus
The increase of $85,641 in Capital Surplus represents the
excess of market value over par value of 1,740 common
shares issued under employees’ stock options, $63,510; and
the excess of market value over cost of 10,409 common
shares issued from treasury for the acquisition of domestic
subsidiaries, $22,131.
Retirement Allowances
The Retirement Allowance Plan provides generally for
retirement allowances to eligible employees or former em-
ployees beginning at age 65, based upon compensation and
length of service, less applicable statutory benefits. Subject
to continuance during the period of certain labor agree-
ments, the Plan may be repealed or modified as to employ-
ees in active service, and the allowances to all retired
employees may be proportionately reduced.
The stockholders at the Annual Meeting on April 19,
1960 approved the funding of the Plan as from January 1,
1960 as it relates, generally, to domestic employees. The
funds are in the custody of Independent Trustees to whom
the Company pays amounts, computed by independent
actuaries, sufficient to provide for no less than minimum
funding.
For retired employees not covered by funding, the Com-
pany charges allowances paid to current costs and, in addi-
tion, maintains a Retirement Allowance Reserve equivalent
to allowances payable to presently retired employees over
the next five years after application of 1963 income tax
rates.
In 1963, the net cost of current service funding and
interest on past service for domestic employees covered by
funded plans aggregated $14,820,979. In addition, $752,640
was paid to retired employees not covered by funded plans,
and reserves applicable thereto were increased by $378,317.
These amounts, before reduction for income taxes, aggre-
gated $15,951,936 of which $14,751,936 was absorbed in
1963 cost of operations and $1,200,000 (representing a
portion of the 1963 funding cost related to past service
cost) was applied to the Reserve for Retirement Allow-
ances. The balance in this reserve was $9,172,186 at Decem-
ber 31, 1963, of which $7,177,401 related to funded plans.
Class B Bonus and Management Incentive Plans
Net Income for 1963 was insufficient to produce bonuses
under the Class B Bonus and Management Incentive Plans.
In 1962, a total of $145,204 was awarded under the Class B
Bonus Plan, and the same amount was awarded under the
Management Incentive Plan.
Stock Options
At December 31, 1962, options with respect to 69,526
shares of common stock were held by officers and other
key employees. The options generally are not exercisable
for 18 months after grant and expire at varying dates which
in no case exceed ten years from date of granting.
During 1963, options were exercised with respect to
1,740 shares, options expired for 4,692 shares, and options
were granted for 5,400 shares.
Options were outstanding at December 31, 1963 to pur-
chase 68,494 shares of common stock at prices ranging
from $41.50 to $60.875 a share.
At December 31, 1963, after providing for shares appli-
cable to outstanding options, there remained 203,239 shares
of common stock available for granting further options.
Of these remaining shares, options for 7,640 shares were
granted on January 8, 1964 at $45.625 per share.
Commitments and Contingencies
The Company is contingently liable as a guarantor for
$9,815,000 promissory notes issued by a domestic affiliated
company; and to purchase $1,763,000 of long term deben-
tures of a foreign affiliated company.
The Company is committed to expend $3,225,000 in
1964 for a minority interest in a foreign affiliated company.
United States Rubber Company and Subsidiary Companies
Accountants’ Opinion
HASKINS & SELLS
CERTIFIED PUBLIC ACCOUNTANTS
TWO BROADWAY
NEW YORK 4
February 12, 1964
United States Rubber Company:
We have examined the consolidated balance sheet of United States Rubber Company and its subsidiary companies as of December 31, 1963 and the related statement of consolidated income and retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the accompanying consolidated balance sheet and statement of consolidated income and retained earnings present fairly the financial position of the companies at December 31, 1963 and the results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
Haskins & Sells.
Twenty-Year Summary
(Dollars in thousands except amounts per share)
SALES AND INCOME FINANCIAL
Year Net Per Cent Paid in Property, Plant &
Ended Sales Net of Sales Dividends Equipment
Dec. 31 Amount Common Retained Net Gross Provision for
1963 $ 980,230 $22,105 2.3 $17,991 $ 4,114 $306,064 $44,648 $27,217
1962 1,006,793 25,694 2.6 18,060 7,634 314,047 39,200 27,657
1961 940,399 27,096 2.9 17,860 9,236 311,495 39,795 25,711
1960 966,833 30,737 3.2 17,838 12,899 318,281 27,064 24,246
1959 , 976,766 35,580 3.6 16,956 18,624 312,222 25,311 24,409
1958 870,616 22,671 2.6 16,669 6,002 295,744 39,603 24,706
1957 873,583 29,695 3.4 16,343 13,352 282,032 36,115 22,743
1956 901,260 31,870 3.5 16,025 15,845 285,788 36,042 21,831
1955 925,539 33,559 3.6 15,812 17,747 259,757 35,282 19,627
1954 781,574 27,959 3.6 15,812 12,147 232,447 31,689 17,649
1953 838,451 32,732 3.9 15,812 16,920 231,256 26,033 16,016
1952 850,152 28,170 3.3 15,793 12,377 206,236 26,262 14,364
1951 837,222 30,366 3.6 15,775 14,591 177,030 21,022 13,999
1950 695,756 24,658 3.5 14,013 10,645 167,911 15,230 13,402
1949 517,440 15,100 2.9 10,492 4,608 167,939 16,185 13,328
1948 572,025 20,142 3.5 12,252 7,890 172,062 18,358 13,750
1947 580,968 21,753 3.7 12,250 9,503 170,152 27,566 11,580
1946 494,753 23,208 4.7 12,244 10,964 118,484 24,647 8,022
1945 471,506 13,025 2.8 8,727 4,298 110,071 26,644 37,477
1944 443,077 15,833 3.6 8,727 7,106 93,733 25,384 9,724
† Includes provision for renegotiation.
$ A stock dividend of 2% also paid.
United States Rubber Company and Subsidiary Companies
POSITION OTHER STATISTICS
Long Term Debt Capital Stock Employment & Earnings
Amount Interest Net Equity Dividends a Share Number of Holders Average Wages, Total Year
Owed Paid Worth Share* Preferred Common† Preferred Common Number of Employees Benefits Taxes Ended
Employees Dec. 31
$162,039 $5,338 $352,121 $48.78 $8 $2.20 8,196 34,593 60,103 $342,389 $107,481 1963
153,262 5,310 347,434 48.08 8 2.20 8,375 33,794 61,469 358,478 117,365 1962
152,013 5,320 337,489 46.62 8 2.20 8,460 30,535 60,086 337,533 111,106 1961
154,672 5,418 326,140 44.98 8 2.20 8,629 31,690 59,983 336,295 115,181 1960
159,920 5,520 312,634 42.74 8 2.05 8,781 30,873 61,149 330,240 125,218 1959
164,657 5,651 294,010 39.49 8 2.00 8,539 29,694 59,428 305,137 99,935 1958
169,030 5,740 289,109 38.64 8 2.00$ 8,591 27,013 60,136 314,109 96,786† 1957
174,484$ 5,751 271,240 36.17 8 2.00$ 8,743 25,823 63,929 331,470 92,203† 1956
156,325 4,357 254,332 33.17 8 2.00$ 9,070 24,904 63,550 324,382 95,626† 1955
120,896 3,736 236,585 30.01 8 2.00 9,364 24,390 60,726 290,963 80,052† 1954
120,896 3,737 224,373 27.84 8 2.00 9,683 23,586 67,549 303,447 97,260† 1953
102,719 2,761 207,454 24.84 8 2.00 9,755 21,348 65,745 269,791 116,111† 1952
77,724 2,040 194,627 22.64 8 2.00 9,839 16,362 65,083 257,829 126,297† 1951
77,744 2,208 180,035 20.03 8 1.67 9,992 15,480 59,069 216,832 89,913† 1950
92,812 2,384 169,391 18.14 8 1.00 10,592 15,541 56,521 183,866 51,979† 1949
98,000 2,429 163,199 17.03 8 1.33 10,711 15,410 64,208 208,545 61,173 1948
101,000 2,068 155,310 15.62 8 1.33 10,813 14,687 66,765 215,907 65,349 1947
40,000 918 145,697 13.92 8 1.33 10,771 13,707 61,499 190,048 62,367 1946
27,000 584 134,318 11.89 8 .67 10,665 12,657 70,739 188,318 47,026 1945
30,000 1,113 129,420 11.02 8 .67 10,595 12,332 78,347 195,807 57,584 1944
Board of Directors
H. E. Humphreys, Jr. Chairman of the Board
George R. Vila President and Chief Executive Officer
Eugene N. Beesley President, Eli Lilly and Company
J. Simpson Dean President, Nemours Corporation
George P. Edmonds Chairman, Wilmington Trust Company
Malcolm P. Ferguson President, Bendix Corporation
G. Arnold Hart President, Bank of Montreal
Harold H. Helm Chairman, Chemical Bank New York Trust Company
James P. Lewis President, Latex Fiber Industries, Inc.
John W. McGovern Retired as President, 1960
Robert J. McKim Chairman, Associated Dry Goods Corporation
John M. Schiff Partner of Kuhn, Loeb & Co.
W. Dent Smith President, Terminal Warehouses, Ltd.
Charles M. Spofford Partner, Davis Polk Wardwell Sunderland and Kiendl
Medley G. B. Whelpley Retired Corporate Executive
ADVISORY DIRECTORS
Herbert E. Smith, former Chairman and President
Thomas J. Needham, former Vice President
Officers of the Company
its divisions, departments and principal subsidiaries
H. E. Humphreys, Jr. Chairman, Board of Directors
George R. Vila President and Chief Executive Officer
Walter D. Baldwin Vice President, Corporate Sales
E. M. Cushing Vice President, Industrial Relations Department
Earle S. Ebers Vice President and Group Executive, polymers, fibers and chemicals
Frank J. McGrath Financial Vice President and Treasurer
C. William Pennington Vice President and Group Executive, tires, consumer and industrial products
Perce C. Rowe Vice President, Market Development
Leland M. White Vice President, Research and Engineering
G. T. Pownall Secretary
Claude H. Allard Vice President and General Manager, Textile Division
M. F. Anderson President, Dominion Rubber Company, Ltd.
Harold N. Barrett President, U. S. Rubber Tire Co.
F. Dudley Chittenden Vice President and General Manager, Naugatuck Chemical Division
Louis J. Healey President, Consumer and Industrial Products Division
Edward J. Higgins President, U. S. Rubber International Company
James P. Lewis President, Latex Fiber Industries, Inc.
Executive Committee:
Mr. Humphreys, Chairman;
Messrs. Vila, Edmonds,
McGovern, Schiff and Whelpley.
Salary and Bonus Committee:
Mr. McGovern, Chairman;
Messrs. Edmonds,
Schiff and Whelpley.
Audit Committee:
Mr. Edmonds, Chairman;
Messrs. Helm and Spofford.
United States Rubber Company
Rockefeller Center
1230 AVENUE OF THE AMERICAS • NEW YORK 20, N.Y.
OFFICE OF THE
CHAIRMAN OF THE BOARD
March 17, 1964
To the Stockholders of
UNITED STATES RUBBER COMPANY:
The annual meeting of stockholders of United States Rubber Company will be held on Tuesday, April 21, 1964, at 10:30 a.m., in the Starlight Roof of the Waldorf-Astoria Hotel, 106 Central Park South, New York, New York. At this meeting stockholders will be asked to elect a board of directors for the coming year, to decide whether the company’s Bonus Plan and its Management Incentive Plan shall each be continued in effect, to consider and act upon the adoption of a proposed 1964 Stock Option Plan, and to transact such other business as may properly come before the meeting.
Under the provisions of the company’s Bonus Plan and its Management Incentive Plan, the board of directors is required to submit to the stockholders, at intervals of no more than five years, the question of whether each of those plans shall be continued in effect. The board of directors has passed a resolution declaring it advisable, and recommending to the stockholders, that both plans be continued in effect in their respective existing forms.
A proposed 1964 Stock Option Plan, described in the accompanying proxy statement, has been formulated by the board of directors for consideration by the stockholders. The board of directors has passed a resolution declaring the adoption of such plan advisable and directing that the forthcoming annual meeting be called for the purpose, among others, of taking action thereon.
The board of directors has fixed March 4, 1964, at the close of business, as the record date for the determination of stockholders entitled to vote at the meeting.
Your vote is important. Please sign and return the accompanying proxy in the enclosed addressed envelope. If you attend the meeting and wish to vote in person, you may withdraw your proxy. If you are planning to attend the meeting, it will be greatly appreciated if you will notify Mr. G. T. Pownall, Secretary, so that we may send you an attendance card.
Sincerely yours,
H. E. HUMPHREYS, JR.
Chairman of the Board of Directors
Page 2
The thought of Christmas brings several things to mind. One is snow—and that speaks for itself; another is “that ole Christmas spirit” which unfortunately seems to come to many people only once a year; and another is safety.
We’ve all heard the expression before—have a safe Christmas. Well, here at the plant, I hope we all have a safe Christmas this year and next, and come to think of it, why not all the days in between. You all know that at Naugatuck we have just passed the milestone of working two million, that’s 2,000,000, manhours without a Lost Time Accident. We haven’t done that since 1961. That’s a tremendous and significant accomplishment and we should all be proud, and pleased, about it. After attaining this performance, I strangely found myself asking—”why has it taken us so long?” I ask myself, “why can’t we just keep on going?”
Jim Cronin [signature]
Wouldn’t that be a great Christmas present next year, working through all of 1976 without a Lost Time Accident. Strange as it may seem, this is one goal that is essentially under our full control. We can’t blame this on the Legislature in Hartford or the Congress in Washington—not even on the Governor or President. This is something that we, as employees of Uniroyal Chemical at Naugatuck, Conn., can claim full responsibility. It is, in a nut shell, strictly up to us.
Somehow, a happy Christmas helps to strengthen us. If we could minimize our exposure to accidents—at work, at home, on the road—we would, I’m sure, enjoy the spiritual and material joys of Christmastime even more. To attain this, we must not only be more aware of our own safety, but we must make others, particularly our family, more aware of their exposure to accidents. We have already seen how working together has reduced accidents and improved safety in the plant. We should instill this same positive attitude within our own family. Then we’ve really accomplished something.
With all this in mind, I would like to wish you and your families a very Merry, and Safe Christmas, and for next year, the return of reasonable prosperity.
[IMAGE: Photo of trees/spruces near a building]
In 1971, ninety five Colorado spruces were planted along the bank of the Naugatuck river; another 75 were planted in 1973. Besides improving the appearance of the plant, the trees add a touch of Christmas at this time of year. Naugatuck Chemical is probably the only industrial factory in the area with such a touch of green on its property. Over 100 hemlocks surround the scrap tire yard and 60 spreading yews were recently planted by the Main Entrance.
[IMAGE: Photo of woman and man looking at documents]
Theresa Martin, an Order Clerk, in the D/S department plans to continue her education at the Mattatuck Community College in a Business related course. She is one of several Naugatuck Chemical people who have fulfilled the requirements for a high school equivalency diploma, which she is showing to Alex Nole.
The Industrial Relations department has a set of preparation books for the tests and may be borrowed at any time.
A survey was recently made of the noise factors in over 129 buildings throughout the plant by Thomas Ennis, Engineering, and James Loman of the Safety Dept. in compliance with the Occupational Safety and Health Act (OSHA).
The purpose of the study was to determine the range of noise problems that may exist in each section or floor of a building in the plant. Basing their measurements on engineering procedures, they recorded over 875 noise soundings which are kept on file in the Safety department.
The results have been given to the department heads of the buildings who in turn consult the plant Engineering department for recommendations to diminish or eliminate the noise level in compliance with OSHA.
In areas where the level is higher than desirable, people working in the area are urged to wear the proper protective equipment until the condition is remedied.
Accidents in 1975 cost over $100,000. During the year there were 3 Lost Time Injuries and 26 Serious Injuries for a total of 29. Although this is a major improvement over the hospital, surgical, and medical costs of $238,359 in 1974 and prior years when injuries cost over $200,000 annually, it still represents a severe drain on the plant’s financial condition.
The average direct cost of a Lost Time accident is $15,000. Overtime and other indirect costs increase it 5 times more, according to estimates of the National Safety Council and the Safety department.
Accidents Can Be Avoided
Eighty-five percent of the injuries in the plant are person-caused. Not that the accidents are deliberate, but they could have been avoided by a greater safety awareness. Many of them are caused by “taking chances” or “short cuts” or by not using the proper safety equipment or procedures.
Fingers were the most common injuries, accounting for half of the 29 accidents that occurred during the year. All of them required sutures.
But incomparable to the medical and hospital costs is the unnecessary suffering to the employee, his family, and the people in the department of which the employee is a member.
[IMAGE: Photo of three men, one receiving a check]
Russell Volz, center, Chemical Production, receives a $286.00 check from James Cronin, Factory Manager, for his Idea that saved $2750.00 a year in valves. At right is Frank Commendatore.
Twenty people received $1116.00 for Ideas submitted during the year recommending different ways to save money in the operation of the plant.
The Ideas resulted in savings of $9449.00 at the Naugatuck location.
The highest award for the year $286.00 went to Russell Volz, Chemical Production, for reducing the number of valves used in the manufacture of J-Z-F. His idea resulted in a savings of $2750.
Another high award of $186.00 was made to Emil Rehel and Raymond Kubick, Chemical Maintenance, plus an additional $100. in small awards.
continued on page 3
Eric Johnson has been named Superintendent of Chemical Production.
He joined the Naugatuck Chemical plant in 1961 upon graduation from Clarkson College with a B.Ch.E. degree. He held several Engineering positions until 1968 when he was appointed General Foreman of Synthetic Production. In 1971 he was named Chief Process Engineer for Chemical Production and in 1973 was assigned to the Naugatuck Treatment Co. a subsidiary of Uniroyal, Inc.
[ADVERTISEMENT]
UNIROYAL WINTER PATROL
WHITEWALL
TWO FIBERGLASS BELTS/TWO POLYESTER CORD PLIES
SELF-CLEANING TREAD FOR TRACTION
[IMAGE: Tire illustration]
ADVANCE TIRE SERVICE
510 Meriden Rd.
Waterbury—756-7205
POUST’S SERVICE STATION
144 Rubber Ave.
Naugatuck—729-0433
MEZZIO’S
792 New Haven Rd.
Naugatuck—729-5988
• Double fiberglass belts for hazard protection and mileage
• 78 Series design for traction
6-21-67 [handwritten]
NAUGATUCK—Small negotiating teams from each of the five major rubber companies and the United Rubber Workers Union have been called for a special group meeting Thursday by the Federal Mediation and Conciliation Service.
The federal government has evidently decided that a 62-day-old strike involving over 51,000 people constitutes a problem requiring high-level action.
The meeting, scheduled to be held at 6 p.m. in Pittsburgh, Pa., will include teams of three management negotiators and three union negotiators from each of the five companies.
Although the full compliment of Uniroyal teams could not be learned Tuesday night, it was known that chief Uniroyal management negotiator will be Eugene Worchester and the chief Uniroyal union negotiator will be Herbert Dawson.
A URW local negotiator, contacted Tuesday, said that the union groups will choose the two
(Cont’d On Page 2—Uniroyal)
(Continued from Page One)
men to accompany Dawson today.
The announcement of this meeting represents one of the more significant aspects of the talks, although observers were hesitant to say whether it meant a possible breakthrough in the negotiations.
The meeting could go on for weeks, said a union observer, adding that union officials are tightening their jaws and preparing to hold out on their demands.
The feeling among union people, according to union spokesmen, is that government-included settlements generaly go in favor of management.
This represents the second attempt to get all five companies and the union to sit down at one table and talk.
A previous attempt failed when union negotiators from B. F. Goodrich refused to join because they did not want to talk in terms of a three-year contract agreement.
Union spokesmen from General Tire and Rubber Co. said that the gathering in Pittsburgh would not affect their scheduled walkout in two plants at midnight tonight.
Picketing by over 3,000 members of the URW at plants in Waco, Tex. and Akron, Ohio, will begin as scheduled, bringing the total number of URW members on strike to 54,100.
Goodyear, the only company not on strike, is continuing work on a day-to-day basis.
(Continued from Page One)
Uniroyal counsel J. Kenneth Bradley questioned Mengacci at some length about flare-ups at the gates early in May when pickets attempted to keep office personnel from entering the plant.
The three days of clashes between pickets and police resulted in arrests of 71 strikers and a warning from Judge Gaffney that he would issue an injunction against the union if the violence didn’t stop.
The judge Tuesday gave some hint as to how he will accept such a defense, when he interrupted Bradley during questioning about a meeting between union officials and John Smith, plant manager.
Mengacci quoted Smith as saying at that meeting that in his opinion, no agreement existed because of the picket line troubles.
Judge Gaffney declared, “I’m not concerned with what some Mr. Smith thought about whether the agreement was null and void—it does not substitute for my judgment.”
At another point, while Bradley cross-examined Mengacci about alleged offers by the company to have union members perform certain jobs at the plant, the judge chided the lawyer to “come to the issue here, whether or not there’s been a violation of this contract.”
Mengacci also claimed that the company had announced at a May 8 meeting that “it needed to get samples out and they (company officials) intended to start production on samples with supervisory help.”
The union official said that after union protests, Smith told Local 45 leaders at a meeting a week later that the company “would honor the agreement” not to go into production and plans to start work on the samples would be dropped.
Mengacci said the company announced at that time that it wanted to produce 400 to 500 pairs of shoes a day.
Joseph DeCarlo, a member of the union negotiating committee, and Walter Beckwith, a picket captain, also voiced the opinion that violence would break out in the picket lines if production is allowed to begin.
Continued From Page 1
only to realize that they all hadn’t been arrested. Much time was spent trying to figure out who the four were that they had arrested. Some pickets rode to the station in police cars but hadn’t been arrested. They all wanted to be booked. One picket, when asked why he was in the cruiser, said he wanted a ride to the station.
The following four persons were booked on breach of peace charges, released on $100 no cash bonds for appearance in Waterbury Circuit Court June 8, the same day that the pickets from the footwear plant and the Chemical plant are scheduled to appear.
John A. Painter, 38, Morris Rd., Prospect; Paul Laurenzi, 41, 30 Seery Rd., Wolcott, Jesse J. Silva, 23, 143 Cherry St., and Anthony Gambardella, 53 Birchwood Rd., Seymour.
Alves intends to stay in the borough only long enough to straighten out this matter and hopes to fly to Cincinnati to continue taking part in the negotiating sessions. A session is scheduled for 2 p.m. today but he doubts he will be there. Another session is scheduled for 10 a.m. tomorrow.
The show cause hearing between Local 218, chemical plant and UniRoyal is scheduled for tomorrow in Waterbury Superior Court. Judge Leo Gaffney set the date to allow the union officials time to show why a restraining injunction should not be imposed upon them.
No incidents have taken place at the Chemical Company since last week. Supervisory personnel has been allowed to enter the plant without incident. Production on a limited scale is being carried on at the plant.
Local 45 is also conducting peaceful picketing at the footwear plants. An injunction has been postponed as long as no violence is recorded.
Handwritten note at top right: 5-31
4-24-67 [handwritten date in top right corner]
Picketing has been resumed today at all UniRoyal plants in the borough following a weekend respite.
A token team of pickets is being maintained at all gates and no incidents have been reported.
Executives of the three borough Locals are being briefed at meetings today on the contract negotiating sessions held last week in Cincinnati.
The three local presidents, George Froehlich, Local 45; Joseph Rzeszutek, Local 218; and Edward Alves, Local 308, along with three additional policymaking session to be held in Cincinnati tomorrow evening.
The next negotiation session is called for Wednesday morning. Both management and labor representatives have said privately they see little chance of an early settlement.
Union demands for higher wages and a guaranteed minimum wage have been the most difficult issues to resolve. The Union seeks payments to laid off workers totaling 93 per cent of their regular wage.