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Mr. HARRISON. Except for filler work which we need to round out our operation and make it economical.
I can see nothing in the operation that would cause any decrease in commercial procurement. I can only see things that would cause increases in commercial procurement.
ELECTRONIC CoMPOSITION EQUIPMENT
The installation of this electronic composition equipment which we will put in next February is going to produce a tremendous amount of composition which we are now unable to do, and we are not expecting to press up to handle this material. This is going to have to be bought because we are not going to be able to handle it. DISTRIBUTION SERVICE
Let me say this, too, Senator. We are asking for 100,000 square feet of additional space to be used for a distribution service which we cannot now offer the departments. The initial distribution of the products of our plant—we now have to put it on skids or box it, send it over to the departments, they break it down and send it back to the post office for distribution. We can save millions of dollars by handling this; so take the 100,000 square feet which we are allocating to this distribution out of the total and we are only asking for about a 20-percent increase in this space. Senator MonroNEY. Is the Superintendent of Documents included in that 100,000 feet? Mr. HARRIsoN. No, sir; this would be a new service. Senator MonroNEY. That would be a storage facility uncommon to normal printing plants, would it not? Mr. HARRISON. That is correct, sir; exactly so. Senator MoWRoNEY. How much would that space occupy?
Mr. HARRIsoN. The Superintendent of Documents—about 350,000 square feet.
Senator MonroNEY. So, combining the two, how much extra floor space do you have? How much floor space do you have that would not normally be associated with an average type printing plant?
Mr. HARRIsoN. Well, at least 25 percent of the space would be used in nonprinting operations, and I think the percentage would run higher than that.
§. MoNRoNEY. Are you including in there your paper storage which you say has to be abnormally high because the various types of printing that you have to do requires stockpiles of order stocks?
Mr. HARRIsoN. We handle over 600 different lots of paper.
Actually this additional space which sounds like a vast amount is just about going to be enough to clear the aisles in our plant today.
ANTICIPATED YEARLY SAVINGs
Senator ProxMIRE. Do you have a breakdown of your saving? You have an excellent brief memorandum here, I have page 11 and page 11a, but your annual gross saving is $2,984,000, and I am wondering what part of that, if any, would be by handling business that is not contracted out—none? Mr. HARRISON. This is savings in our inplant productions and this is broken down on page 10 of the brochure which you have. This reflects the operation as it was 2 years ago. We have not attempted to bring this up to date, so that saving, we think, would even be increased because of the increased costs of operation.
REPLACEMENT o EQUIPMENT
Senator MoWRONEY. Is this $49 million figure inclusive of your equipment? Mr. HARRISON. No, sir; that does not include equipment, except built-in equipment, Senator. Senator MoWRONEY. Your normal printing equipment will either be moved from the old location or replaced with new equipment. Mr. HARRISON. That is right, sir. Senator MoWRONEY. Have you any estimate of how much new equipment will be put in as you leave the old building? I am sure you will try to modernize. It would be foolish to modernize the plant and use obsolete press equipment. Mr. HARRISON. We are forecasting the completion of this building at least 4 years from now, and perhaps a little more. Within the next 12 months we will have examined as nearly as we can, every piece of equipment in our plant to see whether we think in 4 years it is going to be something we can move or if it will pay us to move it or if it will pay us to junk it and buy new or trade it in on new equipment. But this we hope to be able to cover out of our operating funds.
AMORTIZATION THROUGH SAVINGS
Senator MonroNEY. And I believe you say that you can save enough money in how many years to pay for this?
Mr. HARRIson. In 11 years.
Senator MonroNEY. The savings in the overhead costs of an in-line plant versus an up and down plant would allow that to be paid out in 11 years?
Mr. HARRIsoN. Overall. That is right.
DISPOSITION OF PRESENT BUILDINGS
Senator ProxMIRE. $1.5 million of that $4.5 million savings is based on your estimate of rentals of the old building? I have looked at the old building and, as Chairman Hayden just mentioned to me, he is dead right, it is a building that raises some uestion in mind at least, as to its attractiveness to people who would like to locate an office. I cannot imagine going into that building if I had a small business of any kind and wanted office facilities. All of the new buildings that are going up around town, this $3 a square foot estimate, have you revised that in view of the present rental situation here in Washington? Mr. HARRIsoN. We know good rental space is higher than that. Air conditioned, well lighted, like our office space is.
Senator MonroNEY. Industrial space, you will note, comes to almost 1 million feet, 322,000 square feet will be costed out at $1 per square foot for dead storage, and the other industrial space at $1.50 per square foot, which is 594,933 square feet. Senator ProxMIRE. How old is that? Mr. HARRIson. Building 3 about 1940, building 4 about the same time, the others were in 1903 and 1929; we have had no shortage of "Pogo for these buildings. r. Schmidt could talk on that, but we have had any number of people in to look it over Senator ProxMIRE. Is that right? Mr. SchMIDT. Yes, sir. These are Government departments that are o either using inadequate space or rented space that could fit into this. Senator ProxMIRE. My wife's grandfather worked in the old Printing Office down there; it must have been around 1910, I guess it is your oldest building, but except for—how much of your space is in the buildings built since 1940? Roughly, half? Mr. HARRIsoN. Less than half. Building 3 has 564,000 square feet; the oldest building, building 1, has 468,000 square feet; building 2, which is built just on the rear of building 1, has 178,000; and our warehouse across North Capitol, which the Post Office Department wants very badly, has 162,000. so ProxMIRE. There has been no discussion or talk of the possibility if you evacuated, of o leveling this building? Mr. HARRIsoN. That would be up to the GSA. I would think the building would be much too valuable to do that. Senator PROxMIRE. In spite of its age. Senator MoMRONEY. Not 1940. Mr. HARRIsoN. They are well maintained and for certain uses they would suit admirably for office space or light uses, but they are no longer adequate for the type of equipment that the printing industry is developing today. Senator PRoxMIRE. I want to thank you very much, and I want to thank you, sir.
NEW COMMERCIAL PRINTING PLANTS
Senator MonroNEY. I would like to ask a question of the Charles T. Main representative.
Is it a fact that in the development of new types of printing plants the trend is toward a one-line, one-story operation wherever possible?
Mr. FLINT. Yes, sir.
Senator MonroNEY. That the up and down type of building is a relic of the past?
Mr. FLINT. Yes, sir; with a few exceptions.
Senator MoWRoNEY. We hear from the printing industry that the Donnelley Co. has a multistory operation. I have seen the plant along the old railroad tracks, that it is all up and down, that it does not have the broad, in-line development.
Mr. FLINT. With the one exception or few exceptions, I think you will find that the new addition for the National Geographic Magazine, all production is on one level. I think if you go through the lant you will find that insofar as it is possible for them to do so or the individual publications they can handle, they put as much of the production facility on one floor as they can. This does not eliminate the necessity for moving paper vertically, and this I understand and know. And they have made attempts within their complex of buildings to put conveyor systems and automation in as far as they can go, but it reaches a point where economics will not permit you to go any further with automation and they do have bottlenecks which I think they will readily admit they have, which do increase their costs of operation. Senator MoWRoNEY. In other words, it is impossible to install much automation as you said earlier in an up and down, old-fashioned plant—because of the space to get the automation equipment in 7 Mr. FLINT. That is correct. Senator MoMRONEY. And the in-line is easier to install and can be put in at the time the building is built and, therefore, the cost of automating a plant would be very greatly reduced; would it not? Mr. FLINT. This is correct.
Senator MoMRONEY. And the labor cost is what percentage, may I ask, or considered in the industry of the finished job?
Mr. FLINT. I would rather Mr. Harrison answer.
Mr. HARRISON. About two-thirds.
Senator MoMRONEY. You figure two-thirds of the cost of the job would be in labor. So if you can more efficiently use your labor and reduce the cross haul and the wasted time and so in moving paper up and down, and across, into an in-line production, that you are working on two-thirds of the cost?
Mr. FLINT. Yes, sir.
Senator MoMRONEY. And if you are able to effect savings in 11 years, you would have amortized your plant in that time, you might #. from savings? The plant would have, perhaps what, a 50-year 1Ie 4
Mr. FLINT. We would expect that; yes.
INITIAL SPACE DISTRIBUTION
Mr. HARRISON. Senator, there is one other thing we must not lose sight of, this is the tremendous savings in the handling of the initial distribution, which can again run as much as the savings which we have found to be possible in materials handling, because this again is materials handling.
Senator MonroNEY. I think it would be helpful to us to have in the record the amount of space in the building that will be office space, the amount that will be actual printing production space, the amount that will be storage space, the amount that will be space for the document room, and the space for the packaging room for the various departments. So we will have some way of judging, shall we say, the extracurricular space requirements of this plant over and against the normal requirements that would be generated in the customary commercial plant.
(The information referred to appears on page 193.)
IN-LINE TREND IN PRINTING PLANTS
Senator MonroNEY. Also if you could get from Mr. Main's people examples of new printing, new major printing plants that have been built in the last 4 or 5 years, whether they are built on a multilevel as a general rule or on a straight line, single level operation. Could that be supplied for the record? Mr. HARRIsoN. We can. Last year we gave Q'. pictures of man new printing plants throughout the country and our staff has visited, I would say, the majority of the large printing plants throughout the United States, and we are able also to speak from firsthand knowledge that this one-floor production is not just an exception; it is the trend in the industry. Senator MoWRoNEY. In other words, may I ask Mr. Main's representative, if the Government Printing Office or the Congress were to project an eight-story building today and ask you to build a new buildino you think that they were just a little bit off their rocker? r. FLINT. We would recommend against it, sir. That is what we are being paid for, to give our opinion based upon our knowledge and experience, so we would strongly recommend against it. Senator Mon RoNEY. Thank you. That answers my question. (The information requested follows:)