Mr. Chairman and members of the committee:

Thank you for the opportunity to testify before you today. My name is Charles Conner and I am the CEO of Alcon Tool Company, based in Akron, Ohio.
To give you some background about our company, Alcon Tool was founded in 1946 by my father and uncle and started out making posts to support floors for houses. Shortly thereafter my father and uncle started making knives for tire companies. A tire is made from many different pieces of rubber and fabric, each made in bulk or an economical size and then reduced to the size necessary for each size tire. The knives are used to both process the rubber and reduce the bulk size to the individual tire requirements. My uncle retired in 1979 and my father retired in 1982.

Another product line that we had was making molds for the firebrick industry. These are made from wear resistant steel that can stand up to a very abrasive mixture of clay and sand. The bricks are used in the steel making process. Technology and the migration of manufacturing from the U.S. has all but eliminated that product line. Steel is now being made in Eastern Europe and we hope to use some contacts with other knife companies to develop customers in Eastern Europe for what is left of the firebrick industry.
In early 2001, we determined that we had some unique talent and the ability to make many different products other than knives.

We now make pins for the wrists in earth moving equipment, knives to process food, parts for a distributor of guitar repair parts, ore crushes for use in making titanium, knives to cut steel belting for tires, knives for packaging, knives to shred old carpet, parts used in industrial shredders to grind up old tires both polyester and steel belted tires, knives for conditioning the edges of plastic pipe prior to welding (used in high pressure gas line), knives to cut cigarette paper, knives to cut wire braided hydraulic hose and paper cores (either of which could be used as a baseball bat), scoring blades to slit the top of a bun used to make premium chicken sandwiches for McDonald’s.

Our company started in Ohio. We invested in new equipment and buildings in Ohio without any assistance from the state. We are an Ohio company, and face many competitive challenges, but that’s not why I appear before you today. Instead, I want to talk about another issue important to the survivability of our company – this is the impact of estate taxes on my death or that of any of my partners.

As any other father who has an interest in a family business, I want to protect as best I can my children’s future and their ability to manage the business. I also want to minimize the prospect of having uninvolved, inexperienced family members of myself or my partners in the business after our death. In response to such hurdles, I have had to establish an irrevocable trust, effective upon my death, that my shares in the company would flow into. In addition, I have signed a buy/sell agreement which would execute a sale of shares back to the company and the trust (and therefore my wife and family) will receive fair value for my shares of stock.
I consider myself very lucky that I have been educated in estate planning and asset preservation. As a result, I feel the best interests of my family will be served if I happen to die prematurely. But others are not so educated, nor are they so fortunate.

Eliminating the estate tax can save Ohio jobs and can also reduce unproductive time and effort in planning to avoid the tax. Please understand that I am not saying this is the number one priority for my company and partners – however, I am saying that much of the time and effort I expended in the estate planning and tax avoidance process could have been more productively used in growing and managing my business.

I want to add a final word on the competition Alcon Tool faces globally. For example, competitors to my business in London, England incur total employment costs equal to $12.00 per hour per employee. A comparable number for Alcon Tool is approximately $ 25.00 per hour per employee. Compared to my English competitor at $12.00 an hour, my per employee cost is double.

Thank you again for the opportunity to testify before you today. I encourage the committee to vote favorably for a repeal of the estate tax. I would be happy to answer any questions you may have.

Thank you.