which they have reclaimed and then forward to disposal those items which there is no requirement for. As an example of an item which they have screened, they put an electric ground powered generator in there that cost the Air Force forty-three-hundred-odd dollars. The generator itself was obsolete. but the motor was a caterpillar engine which we use today and for which we have requirements. The engine would have cost the Air Force $3,000, and if we estimate, had we sold that as a unit we would have received approximately $600, but through reclamation, we retained that engine at a value of $3,000, and put it back into service immediately. Mr. BALWAN. You would have received how much? Colonel RAMME. About $600. Mr. BALWAN. On the basis of your present merchandising proce dures for getting rid of it? Colonel RAMME. Yes, sir. Mr. RIEHLMAN. You reclaimed it at a value of $3,000 and put in back into service? Colonel RAMME. Yes, sir. Reclamation processes an average of 800,000 pounds a month, and the monthly savings of these parts reclaimed is $850,000 to $900,000, which is a sizable saving. The average cost of operating that yard is about $56,000 a month. MCCLELLAN AIR FORCE BASE EXHIBIT No. 20 RECLAMATION 1. Operating regulations and authority: AFR 66-19, AMCR 21-730. AFM 67-1, vol. XIII, July 19, 1953. (a) Mutilization of defective parts. Presidential Proclamation No. 2776. (a) Demilitarization and declassi 4. Actions by reclamation: (a) Screen against save lists. (b) Reclaim useful components; rehabilitate if possible. (c) Declassify and demilitarize materials as required. Square feet (d) Return material to stock or transfer to disposal as appropriate. 5. Material processed: 800,000 pounds monthly. 6. Monthly savings (tangible): $850,000 to $900,000 (average). 399,089 36, 205 187, 884 175,000 170 Mr. RIEHLMAN. I just question, Mr. Holifield and members of the committee, if we want to get into this aluminum sweater program. We have made no study of it, and the Senate Small Business Committee has been active in it. Mr. HOLIFIELD. Could you give us, as a matter of general informstion, just a quick résumé. I don't know whether we are equipped from the standpoint of research on our staff to really go into the thing, but give us a real quick overall on it. We didn't want to get into it completely. Colonel RAMME. The aluminum sweater is physically located in the reclamation yard. In size, it is about 9 feet by 18 feet and about 10 feet high. Mr. RIEHLMAN. It is a smelter, isn't it? Colonel RAMME. It is for melting aluminum into ingots, and it's gas fed for heat. Mr. HOLIFIELD. In other words, you reduce it to scrap right here on the base? Colonel RAMME. That's right, sir, and that goes back to the requirement for demilitarization and declassification. They run scrap through the sweater and accomplish both at the same time. Mr. HOLIFIELD. This seems to me, from what I know of it, and I don't know much, that is a good thing from the standpoint of preventing scrap materials getting out of scrap and into the civilian supply system. A great deal of material after World War I was sold as scrap, but later on appeared as nonscrap items, or usable items. Colonel RAMME. Plus the fact that we can run it through here. cheaper than we can demilitarize it manually and handle it. Mr. THOMAS. Yes, Mr. Holifield, I think that is the No. 1 thing, as you say, the substantial amount of money in the operation. But No. 2, is that to demilitarize it through the sweater, all you have to do is make a couple of cuts in the fuselage and the wing and you run it through. If you are going to sell it as scrap, you have to break it down pretty much by hand and then bale it, and it's very costly. Mr. RIEHLMAN. Well, we saw the same operation, Mr. Secretary, at Jacksonville, Fla., at the naval base down there where they are doing the same thing. Mr. THOMAS. The Navy has three, the Air Force thought they had 4, they found out they have 6 now. Mr. BALWAN. Mr. Holifield, the reason that this has become a problem, there have been several complaints that this is a commercial activity which commercial enterprise could do a lot more economically than the military. There have been some objections on the part of small business about the military doing this, and that is why it has received attention from both the Senate and the House. Colonel RAMME. Now, B-29's, which we in the Air Force have disposed of as surplus; to demilitarize that airplane takes 1,270 manhours. To run it through the sweater takes 780 man-hours. So we have saved 400 man-hours already, just demilitarizing them. To store the wings and surfaces takes about 1,000 square feet prior to sweating. After it's gone through the sweater, we only need 50 square feet. The sale of those items by pound for scrap aluminum would be about 72 cents. We estimate we're going to get 16 cents a pound after it's gone through the sweater. So, from our viewpoint, you save all the way around. The small business of which you speak, undoubtedly are making that profit which we are now saving to the Government, and I can easily see why they would be interested in what we are doing because we are taking away what they formerly were able to receive. Mr. RIEHLMAN. We need those small-business men, you know, in the country paying taxes, too. You have to take that into consideration. Colonel RAMME. Yes, sir. Mr. THOMAS. We made them put in their costs, all their overhead and their depreciation, costs and everything, so they do have a comparable cost we think; and when you get through, there is a very substantial saving to the Government. Colonel RAMME. We have listed on this chart some of those savings, sir. Running through the aluminum sweater here, the estimated value of the sales of the aluminum ingots on hand, less the cost of production gives us the net revenue of $92,000. These ingots were produced from 950,000 pounds of scrap aluminum. The same scrap under the old method, without smelting would bring $74,000 and it would cost us $19,000 to demilitarize it and cut it up in sections we could handle, or a net return to the Government of $55,000. The difference, monetarily, of this particular scrap generated within the last 22 months, is $37,000. MCCLELLAN AIR FORCE BASE EXHIBIT No. 21 ALUMINUM SWEATING FURNACE Statements of operations (August 11-October 31, 1953) 1. Operating expenses: Operating labor__. Incidental materials_. Utilities Depreciation of furnace___ Depreciation of mobile equipment_. Furnace maintenance. Applied overhead_. Total_--_ 2. Production: Aluminum, 646,551 pounds at $0.16 per ingot pound... Waste, 71,944 pounds-- Total (950,180 pounds) 3. Capital value of sweating furnace (construction): $4,286. 48 57. 10 2,305. 44 208. 09 455.91 301.33 4, 476. 14 12, 090. 49 103, 448. 16 778.95 673. 75 104,900. 86 Labor Material_. Applied overhead__. Total Anticipated life, 15 years. Annual depreciation rate, $832.34. Comparative analysis of net revenue 3, 201.78 5,939.98 3, 343. 30 12, 485. 06 MCCLELLAN AIR FORCE BASE EXHIBIT NO. 22 ALUMINUM SWEATER 1. REASONS FOR INSTALLATION (a) To provide a greater monetary return from scrap. (1) The sweater has been operated 16 hours per day for most of the workdays since August 11, 1953. During this period 950,180 pounds of scrap have been fed into the sweater. Under the old manual method scrap was sold at $0.0789 per pound. 950,180 pounds, at $0.0789_. Less $0.0202 per pound handling cost-- Net revenue potential (without sweating). $74, 969. 20 19, 193. 64 55, 775. 56 With utilization of the sweater the 950,180 pounds of scrap produced the following: Aluminum ingots 646,551 pounds at $0.16 per pound__. Total. Less operating cost‒‒‒‒‒ Net revenue potential__-. Less revenue potential without sweater Net increase in potential revenue___ $103, 448. 16 778.95 673.75 104,900. 86 12, 090. 49 92,810. 27 55, 775. 56 37, 034. 81 (b) To increase efficiency and effectiveness in the demilitarization of material. The aluminum sweater completely demilitarizes all material placed therein and without any possible chance for error. The old hand generation method required the use of arc welders, sledge hammers, hydraulic presses, and other unsafe and inefficient means. (c) To reduce equipment and handling costs. Prior to installing the sweater, the following equipment was required to transport material from reclamation to disposal: 1 each Michigan crane, 10-ton capacity 1 each C-2 truck and 40-foot trailer Under new method the following is required: 1 each gas-electric crane 1 each tug and 4 dollies Comparable costs of the two methods based on processing 1 B-29 aircraft With old method wrecked aircraft were cut into parts to accomplish demilitarization. Material was bulky, had to handle, edge were sharp, presenting, a hazard to employees, compared to the smooth, compact ingots which are easily handled with a small crane. A saving in man-hours is realized in not having to secure material with ropes. Ingots, due to their weight do not require tying. d. To reduce expenditure of man-hours. Statistics maintained in demilitarizing 257,304 pounds of scrap revealed that 1,273.2 man-hours were expended, using the old manual method. The same amount of scrap was processed through the sweater with the expenditure of 793 man-hours. e. To save storage space. Using a wrecked B-29 as the criteria, 1,000 square feet of storage area was required prior to the sweating operation. Sweating reduces the same B-29 into 22 ingots requiring 50 square feet when stacked. This results in a storage area saving of 95 percent. 2. CAPITAL AND OPERATING COST a. Capital value of aluminum sweating furnace: (3) Annual depreciation rate---- b. Cost of operation (Aug. 11, 1953, through Oct. 31, 1953): (1) Labor (2247.0 hours). 4, 476. 14 57. 10 Electricity. (5) Depreciation of furnace__ (6) Depreciation of mobile operation equipment_. Total__. $2, 209.44 2,305. 44 208.09 455.91 301.33 12, 090. 49 3. AVERAGE DAILY COST AND PRODUCTION (BASED ON OCTOBER 1953) -per day. 23 .009807 (5) Direct cost of producing 1 pound of ingot aluminum__. 4. PRODUCTION CAPACITY Based on experience of operating the sweater since August 11, 1953, operating 16 hours per day, the estimated daily production is 20,000 pounds. 5. FUTURE USE Greater utilization of the sweater will be realized in the future by experience gained in the operation thereof. Thirty-pound "finger" molds are on procurement and will replace current 1,000-pound molds. The "finger" molds will operate within a conveyor and will provide automatic pouring and emptying. Due to the reduced weight of the ingot, easier handling will be realized and result in a saving in man-power and equipment. 6. STOCKS OF ALUMINUM INGOTS AND VALUE To date the entire 646,551 pounds of ingots are on hand awaiting sale. At 16 cents per pound, $103,448.16 will be realized therefrom. There were 721 ingots produced at an average weight of 897 pounds each. 7. MISCELLANEOUS INFORMATION The cost of installing the sweater and operating costs are provided from disposal revenue. Personnel involved in sweater functions are charged to project 400 funds, which receives funds from the miscellaneous receipts account derived from disposal sales. |