In regard to Bruce Vernyi's article ``Dow, Exxon deals promote metallocenes,'' Aug. 12, Page 5: Vernyi quotes analyst Paul Raman as estimating pretax profit from the Dow/BP joint venture at $385 million a year. This venture is similar to the one formed by Exxon and Union Carbide, where existing sales of polyethylene and licensing/royalty income are excluded. Thus, the new venture would capture licensing and royalty income from metallocene and Innovene technology from inception on.
While the per-pound amount of royalty and licensing charges are a secret, we are talking pennies a pound of new metallocene sales and conversions of existing plants and new PE construction based on BP's process.
To us, the PaineWebber estimate looks high by a factor of 10.We advise discretion in using Wall Street sources, as these busy people tend to skim the surface on many issues and frequently make hasty prognostications. A purchasing manager reading this article would undoubtedly put undue pressure on Dow and Union Carbide, if they thought this amount of fat was in the licensing/royalty for this technology. Your readers deserve better.
Fred H. Siemer
F.H. Siemer & Co. Inc.
I'M SURPRISED AT THE ABSENCE OF SCREAMING FROM READING THE ARTICLE [``COURT RULES MAXI-BLAST SALESMAN BROKE CONTRACT,'' AUG. 5, PAGE 4] THAT DETAILED A JUDGE'S DECISION TO PENALIZE A MAN'S EFFORTS TO RECYCLE A POLISHING COMPOUND MANUFAC
TURED BY MAXI-BLAST INC. BECAUSE SUCH RECYCLATE REDUCED THE INCOME OF A SELLER OF VIRGIN MATERIAL. DIDN'T ANYONE SEE THE PRECEDENT SET BY SUCH IF THAT DECISION GOES UNCONTESTED? FIRST IT IS A POLISHING MATERIAL, THEN COULD COME LUMBER, GLASS, PLASTICS AND STEEL! ``ANYONE WHO HURTS MY BUSINESS WILL GET SUED!'' SUE THE RECYCLERS AND SCRAP YARDS THEY'RE HURTING MY BUSINESS. NO, I DID NOT IGNORE THAT JUDGE'S OTHER REMARKS BUT SUCH RAISES QUESTIONS THAT A FIRED EMPLOYEE WO ULD TAKE A VISITOR THROUGH THE PLANT AFTERWARDS. I ALSO WONDER IF HE SUGGESTED THAT MAXI-BLAST GO INTO THE RECY CLING BUSINESS BUT WAS TURNED DOWN. IF THAT WAS THE CASE, AND IF IT COULD BE PROVED THAT HE DIDN'T HAVE THAT IDEA BEFORE HIS
EMPLOYMENT THERE, THEN MAXI-BLAST AND THE JUDGE MIGHT HAVE HAD A SOUND FOUNDATION FOR PENALIZING HIM.
HOWEVER, THE CLAIM ABOUT A RECYCLATE HURTING THE BUSINESS OF A VIRGIN MATERIAL MUST NOT BE ALLOWED TO GO UNQUESTIONED.