Noble | Presidents Letters

Fly-In Club's President's Letter
by Chris Pilliod

41st president's Letter by Chris Pilliod

This is my 41st letter as president and it is ironic that the reason I am tardy with this missive is a new initiative my company
has ongoing with the United States Mint Public Law 111-302 passed on 14 December 2010 is titled "Coin Modernization,
Oversight, and Continuity Act of 2010." This potentially could manifest itself as the largest single coin act in the history of the
United States Mint. But the most exciting thing about all of this is… I have been a part of the process. The Mint in turn
contracted out the technical and commercial aspects to a third party to offer several new candidate alloys and manufacturing
processes. This engineering firm in turn contacted us to tap into our strength as alloy designers and processors.
Our part initiated in about May or June of this year but really did not kick into high gear until August when an entourage,
including Mint officials, visited our plant facility here in Reading, PA. It was a hot sweaty day in the middle of August which
originally was to simply be a morning plant tour followed by lunch and a one-hour meeting in our Conference office inside our
R and D facility. But that one hour would turn into two, then three, then four and then kept on going. Several coin collecting
friends would later ask me how long the meeting lasted.
I relayed the story to them that the office where we held the lively confabulation is located upstairs at the R and D building in
a corner room facing outside. A large window allows a full view of Evans Cemetery across Centre Avenue on the north side
of the city. I told them I didn't keep track of the time but I did watch them bury three different guys during the meeting.
But you can be proud of at least this team of government officials for what happened at lunch. We routinely provide nice box
lunches at the plant, designed by some outside caterer to special order. I personally like to indulge in the tuna fish on rye,
while a lot of my counterparts like to joke about my chip-aholic nature. A number of those attendees always seem to be
dieting, especially the women, so they won't partake of the bag of chips the caterer throws in each box.
So about halfway through lunch I slowly make the rounds of those not partaking of the Ruffles and put away a few extra bags
While the meeting transpires-I think my record is five or six. But until this meeting, and I have been in plenty of lunch
meetings, I have never seen a customer pull out their wallet and ask how much the box lunches cost in an effort to pay for
their own. But that's exactly what the Mint officials did, and they wouldn't take no for an answer. They reimbursed us the cost
of their own lunch, for Chrissakes…I, for one, was impressed. Once one drills down into the depth of the scope of this
legislative endeavor, it is indeed potentially very large in nature. Much of it is common knowledge, and many aspects I cannot
discuss. It is pretty plain math with the price of copper at $4 per pound and nickel being now close to $10 per pound
that a 5-cent piece is intrinsically worth more than 5-cents. So even if you could mine struck nickels ready to spend, it would
cost more than five cents.Likewise the cent costs more than a cent to produce So the legislation basically boils down to "find
a way to acceptably produce coinage at a lower cost without impacting the vending industry." While this directive sounds
simple, it ends up being extraordinarily complicated when subjected to every litmus test. For example, one of the costs of
producing a cent is plating the zinc strip with copper. So ask yourself, how can you eliminate the copper plating step in the
process and save a lot of money? The only metals with a copper color are gold and copper, so you can't. So you eliminate
the plating operation and you end up with a cent that looks like a dime. Just about everything is on the table, so naturally
quite large tentacles have grown as part of the brainstorming process and it is extraordinarily exciting to be a part of the entire
process. Even though I am on the team strictly as a technical resource, I have given them my opinion on many commercial
ideas; whether that ends up mattering or not, who knows? I have been strongly vocal on the importance of density, lobbying
against certain metals as candidates because of their light feel.

Lady Luck has been with me on this project. To be honest, I should not have ever been part of the team to begin with;
what we call "strip" product (flat metal which is manufactured to under ¼ inch thick and is sold in large coils for consumer
products) is not even my area of responsibility. But I had been working with the Commercial Manager in this area on a
plate project for the United States military to design a stronger under-armoring plate for blast resistance in tanks. One day,
she mentioned she had received a call from the Mint contractor asking us to get involved in developing potential candidates
and she asked me to be on the team because she remembered I was an avid numismatist and thought that would be of
benefit. At first I was sure she meant a new alloy for die steels, which we actively produce. But she was adamant in stating
it was for circulating coinage. "That can't be-- we don't do that, that's nonferrous stuff," I replied. "We may be doing it now,"
she responded. I left thinking she had to be wrong, and it must be boring die steel stuff. A week or two later I ran into the
Strip Development manager and he indeed confirmed to me that it is the strip product we were looking at, and really truly not
die steels... Shazzzzammmm! I thought to myself.
We sat down and began some initial brainstorming of candidates. Over the years, we have produced thousands of various
alloys and we pored over some potential candidates, dismissing this one, registering concerns about this other one,
reservations about this one. It was less a rigorous display of an engineering disciplined approach than it was whack-amole.
Work backwards with me here-potential volumes are huge. Just get out your Redbook and look up the total mintage for
cents in 1982, and then check out the nickel issuance for 1999. Multiply this by the weight of each denomination.
Then don't forget that to punch out a round planchets from a square you add a lot of loss, you have all seen the "webbing."
Then there are obvious yield losses through the Mill as well. Annually, we are now talking many many tons, not pounds.
During every conversation it seems like the Congressional "Super-Committee" is looking into this or looking into that, and no
stone is left unturned. So we'll see how all this plays out. The Mint would like to perform trial strikings in December and I
hope to reveal in more detail how all of this plays out.