Get the Little Man

Last week in Buffalo 500 manufacturers, gathered in a "Defense Clinic" to hear how they could help in the defense program, nearly had their heads blown off. Up rose young (32) Francis J. Trecker, OPMite, to tell them that much of the U.S.'s available defense capacity was still idle, that if prime contractors did not begin to farm out part of their defense work the Government would force them to -- "and it won't be on your terms."

Last June when the first $9,000,000,000 phase started, most defense orders went to big manufacturers who could be relied on to turn out the work. Over 85% of the large contracts were let to 80 companies. Three companies (Du Pont, Bethlehem Steel, General Motors) willingly or unwillingly took 23% of the contracts, while most of the 184,244 U.S. manufacturing companies got none. Last February OPM set up the Defense Contract Service division to spread the defense load by encouraging the big firms to subcontract. For its head, OPM picked hard-hitting Robert Lee Mehornay, a onetime Army captain.

Mehornay 's first point of attack was to locate the idle capacity. As a guide, he used the recent N.A.M. survey of 18,000 machine-tool plants which had turned up 157,000 partially idle machines. In New York State another incomplete survey (ordered by Governor Lehman) has already located 134,500 machine-hours per day available for defense. With two months to go before the DCS's much more detailed census is completed, Meornay has also started the second phase of his program: in all Federal Reserve District Banks and branch banks, DCS has established offices to help prime contractors find subcontractors. He has hired 125 engineers to help coordinate plant schedules, make cost estimates; another group, working hand in hand with the local banks, arranges lines of credit for small subcontractors. But subcontracting is not so easy as that.

Many big manufacturers, enjoying their first real business in ten years, are reluctant to share it. Furthermore, Navy and Army contracts hold the prime contractor responsible for quality and delivery dates, and in some cases prohibit subcontracting. In case of a mishap in subcontracting, DCS can take no responsibility. Moreover, many potential subcontractors are as fiercely independent as they are small, hate to take orders secondhand.

To overcome this resistance, Mehornay first tried persuasion. He borrowed from a Milwaukee machine shop $1-a-Year Men Francis Trecker and his brother Joseph to sell subcontracting as they had machines. They knew their subject. In 1939 their company (Kearney & Trecker) had started subcontracting with orders from the French Government. In Chicago, San Francisco, all over the country, the Trecker brothers held mass meetings whooping up subcontracting. Last week at Buffalo's "Defense Clinic," Francis saw several subcontracts signed before he left.

Another early-bird in subcontracting was Engineer Morris Llewellyn Cooke, onetime protege of famed Frederick W. ("Speedy") Taylor. Cooke thinks that the defense effort should extend even to the home, points to the British "bits and pieces" system which spread aircraft production to 6,500 small shops. But neither Cooke's writings nor the Treckers' barnstorming have yet produced large-scale results. Trecker himself estimates that more than 45% of the nation's defense capacity is still idle.

So last week Mehornay reverted to his Army ways and got tough. He said that unless there were more signs of cooperation soon he would: 1) have the Army write into the defense contracts a clause making subcontracting mandatory, or 2) have OPM withhold priorities from prime contractors who balked.

Already a few companies have made a start. Allison Engineering Co. (G.M. subsidiary) has farmed out 43% of its $69,000,000 defense work, Pontiac 64% of its $17,000,000. Best job of subcontracting has been done by Sperry Gyroscope Co., maker of precision aviation instruments. Starting two years ago, Sperry has farmed out 35% of its work to 45 subcontractors, has a special department to supervise the work. But these examples are only dress rehearsals to the real show to come. Next year, when the proposed $20,000,000,000 defense load is dumped into the lap of U.S. industry, the unused half of its capacity will have to be harnessed or the job will not get done.

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