Tariff-Touchy Organics Employ 116,000 People Benzenoid producers accounted for 13% of 1964 chemical jobs Nearly 116,000 people were employed by the benzenoid products industry in the U.S. at the end of 1964, according to a generally overlooked table in the back of the U.S. Tariff Commission's report (issued in January) on 1964 production and sales of synthetic organic chemicals. These are the jobs that could be affected if the U.S. accedes to European demands that the American selling price (ASP) method of valuing these chemicals for tariffs be eliminated. The jobs involved are in production, research, sales, administration, and other functions. All told, they make up about 13% of the chemical and allied products industry's total employment at the end of 1964. The Tariff Commission's statistics on employment came from a one-time survey made at the request of Christian Herter, former U.S. Secretary of State and now the President's Special Representative for Trade Negotiations. The statistics show that synthetic organic chemical producers employed 262,261 people at the end of 1964. Of these, 115,611 were in the benzenoid segment and 146,650 in the nonbenzenoid segment. In addition, there were some 13,000 jobs in the industries that produce coal tar, coal tar crudes, and petroleum crudes, the main raw materials for synthetic organics. The Synthetic Organic Chemical Manufacturers Association says the Tariff Commission report shows that well over 100,000 employees have a "direct stake" in the maintenance of a strong domestic benzenoid chemical industry. SOCMA is the spokesman for most of the major U.S. producers of synthetic organics. These jobs, it says, could be jeopardized by government action in the present Kennedy round of tariff negotiations in Geneva. The way SOCMA interprets the 1964 employment and output figures, the benzenoid portion of the industry requires about 7 5 % more labor per pound of production than does the nonbenzenoid segment. SOCMA says that U.S. manpower costs in the chemical industry are more than twice those of its foreign competitors. The association adds
that productivity (as dollar sales per employee) is rising faster for some European firms than it is for some U.S. firms (C&EN, Feb. 2 1 , page 2 6 ) . "Quite clearly," SOCMA says, "the domestic industry and its workers require a level of tariff protection which will help offset these lower foreign costs. Without this protection, a substantial portion of the industry would find itself in an extremely difficult position in trying to maintain its markets in this country in the face of intense foreign competition." For only a few products does the Tariff Commission split sales data into the benzenoid and nonbenzenoid segments (dyes and synthetic organic pigments are considered to be all benzenoid). These products are medicinal chemicals, flavor and perfume materials, plastics and resins, and surface active agents. In none of those product areas were sales of benzenoid materials per employee in 1964 up to the chemical and allied products industry's $38,000 average. For dyes, sales per employee in 1964 amounted to $28,244. In synthetic organic pigments, the figure was $21,689.
Business Gets Credit For 1965 Payments Help Pfizer International president Richard C. Fenton complained at a National Industrial Conference Board meeting at the Waldorf-Astoria Hotel in New York City that U.S. businessmen aren't getting due credit for helping reduce the nation's balance-of-payments deficit. Coincidentally, two cabinet officers the same day (Feb. 17) in the same hotel publicly acknowledged business help in reducing the 1965 deficit to $1.3 billion from $2.8 billion in 1964.
Pfizer's Richard C. Fenton
Secretary of Commerce John T. Connor told the Bond Club of New York that the 1965 accomplishment is a "tribute to the patriotism, initiative, and public responsibility of the bankers and businessmen" cooperating in the President's voluntary program. Speaking from the same platform as Mr. Fenton, Treasury Secretary Henry H. Fowler told the NICB meeting, "Without question, the lion's share of the credit for our excellent progress must go to our businesses and banks who participated in the program of voluntary restraint over private capital outflows." Final fourth-quarter reports from the 500 corporations participating in the 1965 program aren't yet in. But Secretary Connor says indications are that their expanded contribution to the balance of payments may well have approximated $1.7 billion. Mr. Fenton seems irked that much of the credit for the deficit cut has been given to banking. To make his point, he quotes from the New York Times: "The principal gains last year came from a reduction of $2.25 billion in bank loans to foreigners." Mr. Fenton doesn't agree with the Times appraisal. "Without detracting from the achievement of the banks, I must say that this statement fails to do justice to the industrial contribution. The fact is that there was no reduction in bank loans to foreigners, but simply a reduction in the previous huge increase in bank loans to foreigners. The real gain in the balance of payments in 1965 was the expanded contribution of the industrial companies, while banks showed admirable forbearance in not increasing their loans by more than $155 million." Mr. Fenton says the true contribution of the industrial sector should be properly reported and understood. "Otherwise, when further decisions about the voluntary program may have to be taken, we may find bad decisions being made through sheer misunderstanding of the facts." Secretary Connor seemed to be replying to Mr. Fenton's last point when he told the Bond Club, "We are much too aware of the massive contribution of overseas investment to our balance of payments, both in repatriated profits and export gains, to want it curtailed even moderately over the long haul. To do so would be a classic example of killing the goose that lays the golden egg." FEB. 28, 1966 C&EN
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