THE METALS AND CONTROLS CONTROVERSY
We now present a very intimate look inside the
early nuclear fuel business through a very provocative letter written to Dr.
Lee Davenport, President of Sylvania-Corning Nuclear by Jim V. There is
much sordid account in this letter, and at this present date (2012) I have
absolutely no idea how much of this letter is true, false, founded or
unfounded. What is important here to us in our look at Sylcor is NOT the
business-politics controversy at M&C (a direct Sylcor
competitor) we're about to uncover, but rather what Jim tells Davenport
about the implications it carries for Sylcor. Also important are Jim's
assessments of Sylcor's safety controls. I hope no one alive today, or
related to the principals mentioned in this letter, is offended - no harm is
meant or wished by publication of this letter.
This letter is dated August 21, 1958 and is
reproduced in entirety.
Dear Lee:
In the course of the past few weeks, the sordid
story of what transpired at Metals and Controls has gradually been unfolded to
me. The manner in which the situation apparently developed is such that I
felt you should be informed.
The following information is hearsay!
The major items of information were given me by
an official of the Atomic Energy Commission. The inside facts are purported
to have come from an executive in a competing company. We both know this
man, and his integrity is unimpeachable. Further, he is a close personal
associate of the principals.
Rathbun Willard, Chairman of the Board of Metals
and Controls, is in his late 70's; as a philanthropic gesture, he disposed of
certain blocks of stock as outright gifts to various educational
institutions. His legal advisers apparently did not take adequate steps
to insure retention of the proxy vote on these shares. One of the
colleges to whom such shares were given is purported to be Northeastern
University.
The story has it that Jerry Ottmar, President of
Metals and Controls Nuclear Company, was not on the best of terms with Carroll
Wilson, President of the parent corporation, ex-Admiral, and close associate of
Rickover. Working through friendly interests at Northeastern, Wilson
obtained the proxy votes held by that college, which together with other proxy
and personally held stock, gave him a sizable vote for control of the
Corporation. Wilson also called a special meeting of the Board of
Directors at a time when Mr. Willard was in Europe. Mr. Willard's
attorneys attempted to forestall the meeting to defer action on the proposed
agenda until Willard could return.
The meeting was deliberately called at such a
time because Mr. Willard has a known phobia against air travel. Mr.
Willard's attorneys were unsuccessful in their attempt to delay the
meeting. Despite his phobia, Mr. Willard made immediate arrangements to
return by air. The meeting was held on a Saturday; Mr. Willard was unable
to return until Sunday.
The following action is reported to have taken
place at the meeting: Mr. Wilson presented to the assembled Board of
Directors, minus Mr. Willard, documentary evidence charging Ottmar with
mal-administration. By a unanimous vote of the assembled Directors,
Ottmar was removed from office, and Carroll Wilson assumed the Presidency of
both companies.
Ottmar has not given up, and upon Willard's
return, the entire mess resolved into a free-for-all in which both Wilson and
Willard resigned. Wilson has been named Chairman of an advisory
committee, and George L. Williams, Treasurer, has become acting President of
both firms until such time as the issues can be resolved.
Up to this point, the situation would appear to
be typical of the machinations frequently found in the internal politics of
American Corporations. The following facts, and I use the word advisedly,
since they came to me from the person who is purported to have taken the
action, seemed to be worthy of your careful consideration. The
documentary evidence presented to the Board by Wilson is claimed to have
emanated from the Idaho Operations Office of the Atomic Energy
Commission. They were reported to be letters expressing dissatisfaction
with criticality control, production control, and health physics administration
at M&C. The Commission deplored the lack of concern and attention by
Jerry Ottmar on such matters which they maintained to be a major responsibility
of his position. It is claimed that these letters were intended to
correct a situation rather than to cause personal discomfiture to Mr.
Ottmar. Wilson probably played the part of an opportunist in using them
as he did. The Commission's attitude is that they do not feel sorry for
Mr. Ottmar since they held him responsible for what they considered to be
extremely lax and ultimately dangerous handling of the uranium administrative
problems, including as the officer expressed to me, one instance of
subcriticality, in which criticality was averted only by alert action on the
part of the AEC.
Another source has been quoted to me as saying
that, "The Admiral (Rickover) is not displeased."
I am fairly familiar with the production setup at
M&C, having administered the production phase in the Core Contract Group at
Bettis. The M&C system was not exemplary; but, I believe, and please
forgive me for the remark, was superior to Sylcor's. The AEC has the
prerogative to issue a cease operation order on any organization which it feels
is not operating in the best interests of safety. Several such orders
have already been issued. I am concerned that, with the influx of more
and more orders, we may find Sylcor operations have extended beyond the system
of controls that have worked so well in the past. The AEC's attitude,
should Sylcor become involved in any unfortunate incident, would undoubtedly be
conditioned by a reflection of the fact that the worst commercial accident to
date happened at Bayside {a Sylcor facility}. Certain of our contacts in
the west have not let me forget this fact. Perhaps my concern is
groundless. Certainly you have every right to tell me to stick to
marketing and refrain from comments on operations many miles removed from my sphere
of action.
However, the potential load of ETR {Engineering
Test Reactor, which Sylcor was making elements for} combined with the Fermi
elements presents a new production situation at Sylcor. ETR is under
Commission Administration by the same organization which spearheaded the
internal situation at M&C, and I felt that it would be unwise if I did not
immediately bring this story to your attention.
Because of the personalities involved, many of
whom have been associates in the past, I would appreciate your confidence with
respect to the disclosure of the contents of this letter. I informed Stan
Roboff that I was writing you concerning the M&C situation, and he
requested a copy promising not to reveal its contents and further agreeing to
destroy the copy after reading. I have a profound distaste for gossip
and/or gossipers. Since what I have said represents hearsay, I may have
placed myself in a position of repeating gossip. The potential significance
of the hearsay appeared to me to be so important to you and to Sylcor that I
can but trust you will receive its repetition as evidence of good
judgment. If not, I can but ask your indulgence in view of my good
intentions."
