The_Open_Door_deel1

J -73j
:i quantities of dry rubber are also sold by the Natural Rubber &
;• Latex Company (a wholly-owned subsidiary) to third parties in the
J U.S.A.
II The reality is much more complicated than it would seem to be at
|| first sight. In fact, Firestone's rubber pricing system has two
|i aspects: one is the fixing of the price, the other concerns the
|| deductions made by Firestone before the final buying price (paid
If to the Liberian farmers) is decided upon.
'.}, The price for any grade of latex is a FOB vessel Monrovia price
: i equal to the average of all prices received by Firestone from
j third party customers for the same grade during the preceding
I calender month, less one-half cent commission and all costs
1 incurred in marketing and in shipping. These costs include
i technical laboratory charges, ocean freight and insurance,
j applicable terminal and tank car charges and commercial marketing
•'•) and interest expenses.
•j As to dry block or crumb rubber, The Firestone Plantations Company
j is by the Firestone Tire & Rubber Company paid a price FOB vessel
j in Liberian ports equal to the Singapore price for comparable
; grades of international rubber, calculated as described above,
j less one-half cent per pound as commission. A further complication
I is that the Singapore grades are not comparable to most Liberian
I grades. Consequently the average price of Liberian rubber has
j always been lower than that from the Far East. Firestone, or any
! of the rubber concessions operating in Liberia never showed any
1 interest in eliminating this lack of specification by producing
Liberian rubber of an internationally accepted -standard.
•j It was not until 1977 that the Liberian Government made the
j decision to buy and process the rubber from Liberian-owned farms
i and plantations in order to process rubber to internationally
; recognized standards.
J Regarding the deductions made by Firestone: the one-half cent
; sales commission serves the purpose of covering the costs (mainly
i of an administrative nature) of Harbel's sales office when selling
• to the parent company and it probably includes a profit margin.
j The commercial marketing and interest expenses are charged to the
•j Firestone Plantations Company by the Natural Rubber and Latex
• Division of Firestone-Ohio; the deductions for technical
'l laboratory services are charged to the Firestone Plantations
Company by the Technical Laboratory of Firestone-Ohio (these
inter-company charges result in an understatement of the net
profits of the Firestone Plantations Company and affect the
amount of income tax received by the Liberian Government while
the sales proceeds of the Liberian rubber farmers are also
reduced). The shipments of rubber from Liberia are carried out by
the L. and C. Marine Transport Ltd, incorporated in Bermuda but a
wholly-owned subsidiary of the Firestone Tire & Rubber Company,
and they are during transportation insured by the Insurance
Company of North America, another wholly-owned Firestone
subsidiary.