(Mr. Egbert mentioned he had received the latest report which showed a total of 4,607.)

4. Dealer Count

PARTS AND ACCESSORIES

1. Wax

Mr. Challinor reported that the wax we are using on the cars gets right into the paint, and it was very difficult to get off the cars at Las Vegas. Mr. Egbert asked if it was the same wax we had last year – we didn’t have any screams last year. Mr. Challinor answered that it was the same wax, but these had a particularly heavy coat on them; whereupon Mr. Whitmer noted that the thickness of the coating shouldn’t have had any effect.

2. Post Office Vehicle

Parts and Service have to submit a sample of the owner guide, the shop manual, and the time guide to Washington. That is, we have to have approval on the layouts that we intend to use. We plan to send a man to Washington this week to get their approval, and Mr. Challinor expects to get their approval – ours look much better than what Willys put out. We have to have the owner’s guide ready to go into the vehicle when it leaves the plant.

3. Dog-Tracking

We know of 3 cases that have reported this problem, but we are keeping it quiet. (The rear set of wheels is offset from the front.) We may bring these 3 Hawks back one at a time to correct them. Mr. de Blumenthal explained that the wheelbase is off print, and these units used frames built last August in the early production days – the vendor is standing behind this.

Mr. Challinor commented that the liaison with Parts and Service, Engineering, and Photographic on the post office vehicle and the ’64 model is perfect.

QUALITY CONTROL

1. Post Office Vehicle

We are setting up inspection procedures for Met-Pro so that when they start assembling the van at Lansdale, they will have something to follow. They planned to write up the inspection procedures after they started in production which is too late.

Our man looked at trucks presently in use by the Post Office so that we could have some idea as to what to set as a standard. From what we have looked at, they don’t seem to be too particular. If we can convince the Government representative that our job is as good as what is being produced now, we will have established a standard and won’t be trying to get something beyond what is necessary.

2. Parts and Service/Quality Control Meeting

In our meeting last week, we reviewed our program on quality control statistical sampling and our index on okayed cars. We feel it was a good communication program because they weren’t aware of what we were doing, and we didn’t know what they were doing. Among the subjects discussed were paint scratches and how some owners make complaints on paint when the damage has actually been caused by some minor accident.

PURCHASING

1. Post Office Vehicle

We are working very closely with Engineering and are also trying to get a bill of material. We will purchase all body material for Met-Pro. Mr. Feuer wondered about the legal problems, but Mr. Brown assured him that those details are all being worked out.

2. ’64 Tooling

There are some tight spots – one of the closest items was the door lock which was a late release – but as of now, we expect to be on target.

INDUSTRIAL RELATIONS

1. U. S. Savings Bonds Program

Participation on this program included 1,535 employees for a total deduction of $59,639 per month. This is up from 418 participants with $17,818 monthly deductions, or 16.6% increase in participation. The new total percent of participation is 22.7%. We feel it was a successful campaign.

2. Discharges for Theft

We fired two more plant employees on Thursday. These discharges turned about the sale of Mr. Hurwich of scrap aluminum core plates from our foundry, and the sales have been continuous and regular on a weekly basis for about 4 months. The employee we caught said he picked up the core plates at another employee’s home – and we can’t locate the other employee.

Mr. Gallagher suspects that the core plates were thrown over the fence in unlighted areas. He estimates the value to be about $27 new. Mr. Whitmer explained the value to the Corporation: the plates warp over a period of time and are taken out of service and melted down. Then new plates are made. The old plates were still good aluminum to us because we make new plates. As far as the employees are concerned, the value would be about 20 cents per pound.

We moved in early last week, but the police got involved which is really fouling us up on our arbitration cases coming up July 1. We did not prosecute, and the police were mad because the detectives worked on this and they are only interested in building up a record. The police could move on their own, but they face suit if the arrest is unfounded.

We told the police we are willing to cooperate, but the timing is poor for us. (We don’t think we have their understanding, however.) If we prosecute on these cases and we didn’t on the others, the Union will claim we didn’t really have a case on the other two. In other words, if we prosecute the present case and not the former, we are vulnerable – but if we don’t prosecute the present case, the police will be unhappy. Mr. Gallagher wondered why someone at Hurwich’s didn’t question this before: the total weight could be up into the thousands of pounds. Also, within a short time after we talk to the police, the Union is apprised of what went on.

Mr. Dredge asked that PR be kept posted if there is an arrest and/or an affidavit is signed because it being on public records, we may get involved in news stories.

LEGAL

Mr. Feuer had nothing to report.

FINANCIAL

1. Rust-Proofing

Mr. Rickus gave a few samples of costs:

Complete

Model Truck (Including Seams)* Seams Only*

*All prices ADP

In calculating these prices, we used the same markup that we use on the jobs themselves. The prices for the complete job run roughly $30, and for the seams alone about half of that. On the cabs with no box, it runs about $16 for the complete job and $7 for seams only.

Mr. Minkel commented that we can arrive at a decision now that we have cost figures and suggested that Mr. Bender meet with Mr. Corcoran.

2. 1964 Model Tooling

Last week we committed $60,000, with $4.5 million committed to date and about $2.2 million uncommitted. Through May, we have paid $765,000 against the $4.5 million.

3. Inventory Counters

Mr. Rickus mentioned that there seems to be some trouble getting counters for inventory, and Mr. Gallagher explained that our policy is that anyone in inventory or production control work has a responsibility to help count inventory. Beyond that, we get volunteers. Mr. Whitmer will check this with production control.

4. Government Work

At the end of June, our backlog of Government work will be just over $100 million. The body accounts for $6.4 million, the 2½-ton truck should be something under $18 million, and the 5-ton is about $78 million.

APPLIED RESEARCH

1. 1/8-Ton Cargo Carrier

We finally received the signed contract last week and have started working on the preliminary design.

2. 8-Ton and 2½-Ton Studies

We have been negotiating on these by phone with the District and are expecting the contracts momentarily.

3. ¼-Ton

We have not had a report on the disposition of that proposal.

4. 25K Loader for Marines

We expect to get word tomorrow or Wednesday as to the success of our proposal.

5. 5-Ton Contract

We have two people on tour this week to various Government installations for observing and testing of the 5-ton truck with multifuel engine. They will be in company with people from MOCOM and Hercules and will be in Aberdeen today, Yuma tomorrow, VEA in Chicago on Thursday, and Ft. Knox on Friday. Within the next few weeks, we expect to get one of these trucks assigned to Studebaker for our use and observation – we don’t know how long we will get to keep it.

6. M602

We have word that the RFP is being modified and will require resubmittal of the technical proposal at a later date. We do not know the timing on this new development, but apparently it has to do with the engineering package and some of the changes to this particular truck.

7. Suspension

We have the proposal in preparation. We expect to hear from the people at ATAC this week, after which the proposal will be finalized and submitted.

8. Main Battle Tank

At the moment, we are working on an electric drive for the tank with our Clarke Division and Westinghouse.

PUBLIC RELATIONS

1. Disc Brakes

We have a story on Page 1 of the Wall Street Journal today on our disc brakes and the desirability of their performance. We are getting more and more done in calling attention of people to disc brakes.

2. R4 Engine

Mr. Dredge requests that we move as fast as possible on our plans to price the R4 engine for ’64 so that we are not dragging our feet as far as announcement is concerned. We need a price to hang on them in order to announce them. This will be an expensive option, but it will be an option.

The R4 engine is the companion to the R3, but it is not supercharged. Mr. Dredge explained that this is a part of the Bonneville setup. The R4 is a hot, under-supercharged engine to qualify us for a run where superchargers put us out of class. We have been having trouble establishing horsepower on the R2 engine on drag strips where the engine has to be certified. If you don’t certify, they assign you where they want to. Initially, we plan to build something in the neighborhood of 100 engines.

3. Local Drag Strip Race

Sunday, at the local drag strip, a Lark ran and won its class with 13.2-13.5 seconds and 105-110 mph. We had 75 to 100 local youngsters clustered around the car asking questions.

MISCELLANEOUS

1. Executive Use of Courtesy and Pool Cars

At Mr. Egbert’s request, Mr. Minkel read the following note to the group:

“I note that several executives and other supervision have been making frequent use of courtesy cars and, in some cases, steady use. As long as the privilege is not overdone, it is okay to use a courtesy car in case of emergency or some unusual circumstance. Otherwise they are not to be used. I’ll expect the abuses to cease immediately.”

2. Minority Unrest

On Mr. Egbert’s behalf, Mr. Gallagher reported on the minority unrest as it relates to our employment. We now have three salaried Negroes: one man in Labor Relations, one secretary in Purchasing, and one secretary in Sales. The reports on their performance and ability to get along with people are excellent. Mr. Egbert’s thoughts are that, in view of the circumstances and to avoid problems, it would be well that we give qualified Negro applicants consideration in future hiring. It is understood that the staff group gives careful consideration to qualified Negro applicants, but somehow it has to get down to the supervisors at the lower levels who give the okay in hiring their people. We have to improve our position regarding Negroes on the salaried payroll, and we should keep this in mind in any hiring we may do in connection with the ’64.

Mr. Minkel commented that he and Mr. De Franco had received a note from Mr. Egbert to the effect that this had been discussed before, and we may have missed the boat by not voluntarily taking the lead. Now we may be forced to. Mr. Minkel noted that we have been deluged with promotion outfits who offer to promote us in colored circles. He has told them that we have our own organization – which is what he would tell anyone, black or white. We have quite a few colored people employed by dealers throughout the country. He mentioned a shop foreman of a dealer who is very good, and a dealer from Chicago who has one colored salesman and thinks he will hire another one. Concerning appointing a Negro dealer in Philadelphia, Mr. Minkel told Mr. Manning, our zone manager there, to go directly to NAACP and tell them we are looking for someone. (He made the same suggestion to a couple of dealers.) Nothing ever came of it after that; either they didn’t have anyone or they just wanted to make sure we would give them the opportunity. Sales has no objections to a Negro dealer so long as he has the requirements we have set for all our dealers.

Mr. Minkel observed that there are areas in which we might have a problem, e.g., while we can accept the situation and be as broadminded and willing to go along as possible, whether the dealers would go along with it is another thing. So far as Sales is concerned, it might be easier to have Negroes working in the area of service problems than it would to have them in promotion areas because we would have an almost impossible situation in the South. Mr. Challinor will consider whether we could use Negro Parts or Service men.

Mr. Gallagher reminded the group that the Negroes should be qualified; that is, if two colored and two white applicants were equally qualified, we should take the Negro.

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