Costly Spoilage During Production of Redesigned $100 Bills
By Adam Dewitz
Back in October the Bureau Of Engraving And Printing announced the issue date of the redesigned $100 bills would be delayed citing a manufacturing problem:
The Bureau of Engraving and Printing manufactures Federal Reserve notes and has identified a problem with sporadic creasing of the paper during printing of the new $100 note, which was not apparent during extensive pre-production testing. As a consequence, the Federal Reserve will not have sufficient inventories to begin distributing the new $100 notes as planned.
CNBC talked to unnamed persons familiar with situation for more details:
* 1.1 billion of the new bills have been printed
* officials don’t know exactly how many of the 1.1 billion bills include the flaw
* speculation is as many as 30% of the bills included the flaw
* per-note cost of about 12 cents
* $120 million in spoilage
The Bureau is looking into automated inspection to find the defective bills:
Because officials don’t know how many of the 1.1 billion bills include the flaw, they have to hold them in the massive vaults until they are able to develop a mechanized system that can sort out the usable bills from the defects.