Part 9

Page 720
image 85 of 100

This transcription is complete

FRIDAY, 31st AUGUST, 1917.

(At Perth.)

Present: B. L. Clarkson, Esq. (Acting Chairman). H. H. Paynter, Esq., F. E. Venn, Esq.

FRANK ERNEST SHAW, Acting Manager State Implement Works, sworn and examined:

10286. By Mr. CLARKSON: When did you go in as Acting Manager ?—26th May, 1915.

10287. Do the Works show a profit ?—No.

10288. What are the chief causes of that ?—First, capitalisation; then there is the lack of modern machine tools; the lack of appliances for collecting and handling in the shops, and the present unsettled conditions which militate against our getting material in payable quantities. Instead of being able to buy big parcels we have to buy catch as catch can, and consequently we have to pay very high prices. In normal time, when can indent, it will be possible to rectify that disability, but it will be necessary to scrap or sell a quantity of the plant and get modern machines.

10289. The longer you continue to use the present inefficient machines the longer you will lose money, the quicker they are got rid if, the better in the interests of economy ?—In respect of many of the tools, yes.

10290. What is the capitalised value there now ?—About £90,000.

10291. And what amount do you estimate approximately is inefficient? - Let me put it another way. I think the Works could be carried on in a proper way with a capitalisation of £40,000.

10292. So it is over capitalised by practically £50,000 ?—Yes, and unfortunately over capitalised by the purchase of plant that was obsolete at the time it was purchased. I might qualify that and say that a large portion of the plant was brought from the Triumph Plough Company, of South Australia (in liquidation). Other portions were bought from Natimuk, Victoria, and other portions from Haydon, of Victoria Park, while still more was transferred from the Harbour Works. There were also sundry purchases of new and second-hand machinery piecemeal. Many machines were absolutely obsolete and should never have been installed.

10293-4. Would much attention be required to make the buildings as efficient as you would like?—The lay-out of the Works does not lend itself to a proper sequence of handling of material. In works of that class, there should be a pass-on system, with no back loading. We have blacksmith's mingling with machinists and others. It should be one straight ahead process from the raw material right through, and we should have a proper system of runways. In some of the buildings these could be installed, but in other shops the roofs are too low and the structure is not suitable for the installation of runways.

10295. How do the costs of the machinery you manufacture compare with the price lists of other firms ?—There Is not a big margin between our costs and their price lists.

10296. How do you sell your machines, at cost ?—No, the sales branch is administered from Perth. I give them my manufacturing costs, and to those they ass their selling costs, plus any profit which they think necessary to meet contingencies. It was stated that 16 per cent. was required to sell agricultural implements, but since then I have been told that that margin will not cover it. When I spoke about what I considered the excessive cost of distribution, they pointed out that spare parts sales take a lot of collecting, which makes it very heavy. For instance, half of the value of the part is spent in postage stamps. I think the efficiency of the sales night be increased, perhaps by this new scheme of farmers having their own country representation.

10297. Have you in the past had any definite scheme of distribution in the country ?—Prior to my taking charge it was all under the manager. This was altered at my request, with the requests of one or two others, that I should have untrammelled freedom at the Works. There were three depots manned by our own officers on a weekly salary, at Kellerberrin, Narrogin, and Geraldton; all other centres were looked after by agents on commission.

10298. Generally speaking, has your farm machinery given satisfaction to your clients ?—The first year I was there we had a fairly good number of complaints, but those complaints arose from the 1914 machines. In respect of the 1915 machines, we had what I considered very satisfactory reports, while last year's machines have proved better still. We have instances of complete breakdown, and when we investigate we might find a small initial failure was due to some faulty part, but the users of the machine have followed it up and made a complete wreck by continuing to use the machine. The ploughs, disc cultivators and similar implements have been very well spoken of and, practically speaking, we have had no trouble.

10299. Do you know of anything standing in the way of your making the manufacture of agricultural machinery a success ?—I do not think so. The prices that have been obtained in the past by outside people would show a very fair profit, and I think it can