Trouble In Aluminum

Only eight months ago, the Office of Defense Mobilization decided that the U.S. had plenty of aluminum. It announced that the expansion program, aided by fast tax write-off certificates of necessity, was being overdone, canceled a third round of expansion that had been pending for two years.

Last week it looked as if ODM had been too optimistic. Before a House Small Business subcommittee appeared several small businessmen, complaining about an aluminum shortage. Furthermore, they charged that the industry's Big Three--Aluminum Corp. of America, Reynolds and Kaiser--were discriminating against independent fabricators. Roger Widing, whose East Rochester, N.Y. company makes aluminum storm doors and windows, said that last year he received 336,000 Ibs. a month; now he is getting 75,000 Ibs. Widing suspected that the producers have been keeping their own fabricating divisions operating by cutting his supply.

Georgetown University Professor Leonard Emmerglick, once the Justice Department's expert in the Alcoa antitrust case, chimed in. Soon after the Korean war began, ODM decided to add 1,800,000 Ibs. to U.S. capacity, and push total production to 3.2 billion Ibs. by 1955. It gave the Big Three fast tax write-off allowances for new plants and proceeded to buy any new production the companies could not sell in the open market. In return, the Big Three agreed to deliver one-third of the new plant output to independent fabricators. But, charged Emmerglick, they have been failing to do so. In reply, Alcoa Vice President Donovan Wilmot declared that his company had lived up to its ODM contracts by shipping the specified amount of aluminum to inde pendent fabricators. The shortage, he said, has been caused by the Government stock piling program.

Reynolds Metals President Richard Reynolds Jr. also blamed the stockpile, asserting that ODM could ease the short age if it would slow up its purchases. Nevertheless, in view of the "tremendous new demand" for aluminum, Reynolds announced that this year "we are going to undertake expansion ... of 50 million Ibs."

With the heat thus turned on ODM Chief Arthur Flemming, it looked as if he would ease up on stockpile buying. He las already released 150 million Ibs. of aluminum originally headed for the stockpile in the first six months of this year, slow industry wants him to release another 250 million Ibs. in the last half. Said Flemming: "It does not make sense to . . . stockpile [a specific amount] if that tends to undermine seriously the economy." It also looked as if Flemming was going to spur a third round of expansion by handing out fast tax write-offs.

St. Joseph Lead Co. and Pittsburgh Consolidation Coal decided that this would be all the help they needed to put .hem in the aluminum business. The companies told ODM that they jointly plan to build an $85 million aluminum plant with an annual capacity of up to 66,000 tons. Thus the Big Three, which becomes the Big Four later this year when Anaconda Copper gets its 60,000-ton aluminum smelter operating, may turn into a Big Five within a few years.

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