The technological aspect of the inevitable conversion to the metric system of measurement will pose no major problem to the nation's tool and die industry, a Congressional subcommittee was told.

An industry spokesman warned, however, that the value of existing non-metric capital equipment in the metalworking industries may depreciate sharply as newer, metrically equipped machinery is eventually introduced, causing an adverse economic impact on private capital investment.

In testimony before the House Small Business Subcommittee on Metrication, Syracuse, NY, businessman Donald W. Darrone told congressmen that his industry favors a vigorous capital recovery policy on the part of Government to offset such a potential impact and to pave the way for an orderly and speedy conversion to the metric system. Darrone, president of Allen Tool Corp., Syracuse, currently serves as Metric Committee chairman of the 1500-member National Tool, Die and Precision Machining Association.

Potential Impact on Residual Values

While his industry has no great fears about the change-over to metrication, Darrone told legislators, the potential impact of the expected conversion process on residual values of non-metric equipment may cause some apprehension among businessmen in the metalworking field.

"What about the resale value of partially-depreciated non-metric equipment," he asked. "There will be considerable reluctance to buy it and second-hand or salvage values will drop substantially."

The impact of this devaluation of existing equipment will be a general erosion of private capital investment, which will also mean a shrinkage in the resources available to carry out the replacement and modernization needed to convert to metric and to maintain the industry's competitive capability in world markets, he said.

Capital Recovery Policy

To counter such potential problems, Darrone urged subcommittee members to recommend to the Congress a vigorous policy of capital recovery, including reinstitution of the investment tax credit as an essential counterpart to metric transition. "Furthermore," he noted, "the depreciation laws and regulations should be amended, as necessary, to permit additional write-offs reflecting the substantial decline in residual values that metrication will create."

In examining other potential problems that may occur in the transition to the metric system, Darrone indicated the possibility of a slight loss of efficiency and productivity as a company converts and/or retains metrically. He added, however, that such a problem could be effectively moderated by government efforts to bring the metric system into all vocational and on the job training programs. "Industry or company programs that offer a means of implementing this education would merit some government assistance," he indicated.

Expansion of Inventories

Similarly, Darrone said, a troublesome but inevitable consequence of metric conversion will be the need for metalworking firms to stock extra amounts of standard size metal stock, cutting tools, components and like items. "Standard bar stock sizes that may have some even number inches may not be easily adaptable, and therefore standard metric sizes will develop," he said. "A firm in the process of transition may be forced to expand its material inventories and its space to accommodate the change.

"Significant help on this problem," he noted, "could come from the efforts of government and our standards organizations to establish new standard sizes that would alleviate the need to maintain duplicate material inventories."

Faster and With Less Fuss

In his statement to the subcommittee, however, Darrone stressed that such problems should be easily overcome through long-range preparation and planning on the part of industry and government.

"Metrication is going to happen, and we aren't against it," he stated. "Our industry has no great fears about the change. In fact, we'll probably get there faster and with less fuss than many of the larger companies. The nature and extent of any burden associated with the change will depend on the timing and psychology our country adopts. These matters should be thought through now." MF