Titanium Past, Present, and Future (1983) / Chapter Skim
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Chapter 12: Incentives and Disincentives
Chapter 12: Incentives and Disincentives
Pages 163-170
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From page 163... ...
However, it cannot be expected to meet suddenly imposed, extraordinary military demands. Timely additions to the established objective of the strategic stockpile and use of provisions of the Defense Production Act, aided by a return to the rapid tax amortization provisions of the Internal Revenue Act, would be sufficient to stimulate industry to accept its share of the burden if these measures were applied judiciously and funded consistently.
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From page 164... ...
The Markets The development of titanium as a continuously profitable industry, able to modernize as needed, has been seriously handicapped by the industry's misperceptions of forthcoming military demands for aircraft and their engines. The civilian aircraft industry, recently the largest single market for titanium, although volatile, is not so unstable as to be unmanageable from the corporate point of view in a market economy (see Figure 1)
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From page 165... ...
These do not include major, now unforeseen, military demands or some large potential new uses that are not yet firm and may not develop. The panel was impressed with the will of the industry to grow and to t eke ri sks involved in improvi ng technology and expanding to meet anticipated growth in the market .
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From page 166... ...
In wartime, such consolidation and analyses are two of the prime essentials, but it is equally important during peacetime since it minimizes security risks. The excessive cost of hurried expansion of raw material production facilities in times of emergency far exceeds, by orders of magnitude, the maintenance of a small organization needed to keep material requirement figures up to date.
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From page 167... ...
The estimated probable ultimate net cost as of September 1974 -- the last report on borrowing authority -- was $129 million, about 15 percent of the gross transactions certified. Stockpiles Economic Stockpiles The panel was made aware of suggestions that an economic stockpiling program would solve the dilemma of periodic titanium shortfalls (i.e., a procedure in which contracts would be let to provide titanium in an approved f ohm for delivery to a stockpile, the material to be released in times of shortages and purchased in times of surplus capacity)
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From page 168... ...
, markets have been severely disrupted; the presence of an economic stockpile overhanging the market has inhibited expansions to meet new demands. Under the strategic stockpile principle, every pound of domestic capacity is good for 3 pounds of material in stockpile since the calculations in setting stockpile goals involve calculations of capacities safely available to the economy under stress for a determined period of time, currently 3 years of conventional war.
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From page 169... ...
Suppliers are faced frequently with making temporary allocations and, in some cases, they have temporarily assumed government prerogatives. In one case, the only important buyer was the Air Force and its sup pit ers of titanium component s .
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From page 170... ...
Congress has already acted on granting some tax credits for this purpose at the time of writing this report; perhaps additional tax credit incent ive s may be worth considering . REFERENCES Battelle Columbus Laboratories.
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