in 1957 there were about 68,000 of those vehicles made. We supplied them 68,000 times 8. Our capacity which we tooled for, for the Government during the war, we can produce well over 1 million pieces per month without any trouble at all, to reduce it to the number of people would be a little difficult. We run it every day in the production line.

Mr. McCORMACK. It is still an important order?

Mr. WEYBURNE. Very important.

Mr. McCORMACK. You would like to get it today, would you?
Mr. WEYBURNE. Very much.

Mr. BROWN. How many Jeeps does the Government own, do you know?

Mr. WEYBURNE. During the war, they built approximately 600,000 Jeeps; that could be plus or minus a few, Mr. Brown, but we did make

Mr. BROWN. How many spare brake bands did they have for the total of 600,000 Jeeps?

Mr. WEYBURNE. You are asking me now, how many spare parts we built for the Government? Forty million pieces.

Mr. BROWN. I am just wondering, and this is going afield for a minute, but I sat on a committee you know which found that for other vehicles they had 104 years' supply of repair parts that they had bought that the Government had bought.

Nobody thought they might possibly change the model in 104 years, so we paid for those parts, the taxpayers, and I am just wondering how much of these purchasers were unnecessary, unneeded, and were wasteful, and brought about this condition facing us now, whether there wasn't a pretty good-forgive me, but perhaps there was a pretty good job of salesmanship done, as well as some lack of judgment in the purchasing department of the Government, or the Procurement Division, in the first place?

Mr. WEYBURNE. Well, Mr. Brown

Mr. BROWN. In other words, I am a little cynical any more. I have sat around here so long I have become cynical.

Mr. WEYBURNE. Sure. I will try to explain it this way: We received orders direct from the Government and direct from WillysOverland. At this particular time, there was no sales involved.

Mr. BROWN. You didn't have to sell the Government, they came out running after you, but they didn't hesitate to buy everything they could find, did they?

Mr. WEYBURNE. It was bought through the Ordnance; yes, sir. Mr. BROWN. That is right.

Mr. WEYBURNE. We had historical background to develop those figures for them, to help them in the automotive industry. We ran many, many tests at Aberdeen in our own proving grounds, and with the type of service that most of the Jeeps were probably going to be subjected to, it looked like 10 to 15 to 1 spare parts were needed. They were running through mud and water, and brake linings are made of asbestos and resins; it is just like running them against the grinding wheel when you run them in sand and water.

So, there could have been-had the war lasted a while longer, the spare parts would have been necessary.

Mr. McCORMACK. Were you aware of this order, of the 268 tons coming back into the United States?

Mr. WEYBURNE. No, sir.

Mr. McCORMACK. Did you feel it in your sales?

Mr. WEYBURNE. We feel it through our aftermarket distribution channels. We will get calls from our distributors in our very active markets where I suppose some of this has been sold, saying, "What is going on here? We see a lot of Willys-Overland linings in the market at prices way below what we are paying for them. Is this your material?"

Mr. McCORMACK. Do you get any calls of that kind?

Mr. WEYBURNE. Yes. We have had distributors ask that several times.

Mr. McCORMACK. Since this quantity came into the United States? Mr. WEYBURNE. I'm not positive of that. I don't know the date of entry here.

Mr. McCORMACK. What was the date of entry?

Mr. McGARRY. The entry was June 9, 1957.

Mr. BROWN. A little over a year ago.

Mr. WEYBURNE. It probably would take them 6 or 7 months before whoever was distributing them could get them on the market. I can't say we have had definitely on this particular item, but

Mr. BROWN. Let me ask one other question right there. These brake linings manufactured during the war would be as good today as the new ones?

Mr. WEYBURNE. Yes, sir.

Mr. BROWN. There is no deterioration to them?

Mr. WEYBURNE. No, sir.

Mr. McGARRY. Do you believe, Mr. Weyburne, that this brake lining could be in short supply or in any way beneficial to the economy of this country by coming in as foreign excess property? Mr. WEYBURNE. It very definitely could not be beneficial.

Mr. MCGARRY. It is not in short supply?

Mr. WEYBURNE. No, sir; it is not.

Mr. McGARRY. It has not been for the last few years?
Go ahead, sir.

Mr. BROWN. May I ask another question that comes to my mind. You say the Government is still using the same type of jeep and so forth and so on. The Government is selling these brake linings as surplus. Is the Government buying any new brake linings from you now for its use?

Mr. WEYBURNE. Yes. Mr. Brown, the Government today, you still have Ordnance bids coming out for this.

Mr. BROWN. In other words, Ordnance of the United States Army, or whoever has control of these jeeps, are buying with 1 hand, or through 1 agent, are buying these surplus linings that you say are just as good as the new ones. They are now buying new ones still and selling the old ones at the same time?

Mr. WEYBURNE. Yes, sir.

Mr. BROWN. Some other agency of the Government. That is pretty stupid; don't you think?

Mr.WEYBURNE. We feel that way about it.

Mr. BROWN. Did you ever wonder, up at your concern, about your Federal taxes?

Mr. WEYBURNE. We are very much concerned, because we have never been able to win a Government award; we are tooled for it and can make it cheaper than anybody else.

Mr. BROWN. You still sell the Government on one hand, while the Government is selling the same product as surplus?

Mr. WEYBURNE. We haven't been able to win an award, because it is an open bid. I think the surplus lining

Mr. BROWN. You don't sell the Government?

Mr. WEYBURNE. We try.

Mr. BROWN. Oh, I see. But the Government is still buying, to your knowledge?

Mr. WEYBURNE. Yes, sir, buying that part number.

Mr. BROWN. And being manufactured by other concerns because you can't meet the price; is that it?

Mr. WEYBURNE. I am concerned that it is not being won by the other concerns that are manufacturing. I think it is surplus material that somebody has given to them.

Mr. BROWN. Have you sold any at all to the Government recently? Mr. WEYBURNE. Not lately; no.

Mr. BROWN. But they are buying from somebody else?

Mr. WEYBURNE. Other part numbers, but not this particular part number.

Mr. BROWN. Are they buying them from the same people to whom they sold them, these brake linings?

Mr. WEYBURNE. I don't know that.

Mr. BROWN. Well, I mean, are they the same brake linings, are they buying today back again the same brake linings that they sold as surplus?

Mr. WEYBURNE. Yes, sir.

Mr. BROWN. The Government is doing that?

Mr. WEYBURNE. The Government is.

Mr. McCORMACK. Have you got the record as to what these brake linings were sold for, the acquisition value, and what they were sold for?

Mr. McGARRY. Yes, sir.

Mr. BROWN. I think that indicates, Mr. Chairman, they ought to have somebody in from the procurement end of the Defense Department, or the Army, somewhere, somebody, somehow, to explain such a situation.

Mr. McCORMACK. Put it in the record what the acquisition costs are, and what they sold for.

Mr. McGARRY. Mr. Chairman, I have in my hand a sales offering conducted by the military in Germany, contract No. DA-(S)-91-529EUC-512.

Now, Mr. Weyburne, I would like to ask you at this time to review that page of the sales offering and tell this committee if anyMr. McCORMACK. What was the acquisition value as shown there, and what was it sold for, that particular lot? Do you have it there?

Mr. McGARRY. It is on the sheet; yes, sir.

Is any of your material on that sheet, Mr. Weyburne?
Mr. WEYBURNE. In the first line, it represents kits?
Mr. McGARRY. Yes, sir.

Do you recognize your brake lining?

Mr. WEYBURNE. No. I can only say that if it is in these quantities, again there is no other vehicle that linings were purchased for in this quantity, other than for this, and I would suspect this was the same material as you showed me on this other document.

Mr. MCGARRY. In other words, it just doesn't have your indicia or trademark, but from the quantities and from the knowledge that you were the exclusive supplier of that item, it would indicate it is your material?

Mr. WEYBURNE. And from the prices on here.

Mr. McGARRY. Well, the record should note at this time, then, Mr. Chairman, that the successful bidder on this sale is also the party to whom the import permit was awarded, who brought the brake lining into the United States, and signed the consumer entry document in his own handwriting. This brake lining was manufactured by the Marshall-Eclipse division.

Mr. WEYBURNE, you will notice the price per item on there. Do you see it on that sheet?

Mr. WEYBURNE. Yes, sir.

Mr. MCGARRY. What does one of those kits sell for?

Mr. WEYBURNE. Well, if this is from overseas, from out of the country, I think our price to Ordnance was around $1.25 per kit.

Mr. McGARRY. May we state for the record what the price on the sheet says?

Mr. ŴEYBURNE. From 21 cents to 34 cents.

Mr. McGARRY. That is what the military sold it for; is that correct? Mr. WEYBURNE. Yes, sir.

Mr. MCGARRY. Now, what did you sell that to the military for?

Mr. WEYBURNE. On the 34-cent kit which I imagine is a front brake kit, about $1.25.

Mr. MCGARRY. Would you say these goods are unused?

Mr. WEYBURNE. Yes, sir.

Mr. MCGARRY. It is rather unlikely that they use brake lining and throw them back in a kit?

Mr. WEYBURNE. It is pretty near impossible to do it.

Mr. McGARRY. Right.

So these goods are American goods, and they are returned to this country. Is it possible that item could be sold for less than the cost of production?

Mr. WEYBURNE. Definitely.

Mr. MCGARRY. That would be rather devastating to your industry, wouldn't it?

Mr. WEYBURNE. Not only to us, but it involves other manufacturers as well.

Mr. McGARRY. May I have that document back, please?

Mr. WEYBURNE. Yes.

(Document handed to counsel.)

Mr. MCGARRY. A little while ago, Mr. Weyburne, you indicated you thought some of this surplus that was getting back here was being resold to the Government; is that right?

Mr. WEYBURNE. Yes, sir.

Mr. McGARRY. Upon what do you base that opinion!

Mr. WEYBURNE. The Ordnance issues invitations to bid on quantities of various sizes of linings to fit various vehicles, which they are operating. Invariably there will be a part number in there which involves a quarter ton, let's call it the jeep, which is the linings we were discussing in this document.

We put our regular price in of so much a 4-piece kit, including rivets and the box.

We have never been able to get one of those awards, because our price has been pretty standard. We have come down over the years, but somebody always licks us by 50 percent.

We can't find out what the lining is, because all the bid says is "Marshall-Eclipse division lining, or equal." We don't know what they are getting.

Mr. McGARRY. Would it be possible for anyone to manufacture something new and underbid you by 50 percent, or any other company? Mr. WEYBURNE. No, sir, it would not.

Chairman DAWSON. Is it your opinion that it is entering the current market?

Mr. WEYBURNE. Yes, sir, Mr. Chairman.

Mr. McCORMACK. In addition to that, it is being repurchased by the Government; is that right?

Mr. WEYBURNE. I very definitely think that that could be a fact. Mr. BROWN. The Government is not buying from you, as they did buy?

Mr. WEYBURNE. No.

Mr. BROWN. The Government bought from you during the war? Mr. WEYBURNE. Yes, sir.

Mr. BROWN. But they are not buying from you now?

Mr. WEYBURNE. No.

Mr. BROWN. Their supplies and repair parts for these jeeps?
Mr. WEYBURNE. No.

Mr. BROWN. So therefore they have to be buying from someone else?

Mr. WEYBURNE. Yes.

Mr. BROWN. There is no one else that manufactures these kits, is there?

Mr. WEYBURNE. Yes, sir.

Mr. BROWN. There are other people?

Mr. WEYBURNE. There are a number of people.

Mr. BROWN. That manufacture them now?

Mr. WEYBURNE. There are probably 20 good manufacturers of brake lining that could manufacture this kit.

Mr. BROWN. Do you know whether or not, then, they are underbidding you? Do you know who gets the contract?

Mr. WEYBURNE. After the bid is let it is public, it is open to the public, and we get the bids, so we can see what each company, Raybestos, Johns-Manville, American Brake Lock, all of them bid. Everybody has their prices published, and there is always one in there, as I say, 50 percent below.

Mr. BROWN. Is it these other manufacturing concerns that are winning these bids, or is it somebody that is not known in the industry as a manufacturer?

Mr. WEYBURNE. Not known in the industry as a manufacturer.