Shakeup: Chapter II

To Judge Samuel Irving Rosenman's reorganization of defense (TIME, Sept. 8, ct ante) was added an important second chapter last week. If it worked, one of OPM's most conspicuously unlicked prob-lems--how to spread subcontracting--would be licked at last.

By executive order, OPM got a new branch having equal status with production, priorities, purchasing, materials. Its name: Division of Contract Distribution. Its duties: to break down big defense orders, spread the pieces among as many plants as possible. Its complementary objectives: 1) to put more U.S. productive capacity to work building guns; 2) to help civilian plants whose normal operations are shut off by priorities (see col. 2).

Utah and Wall Street's slim, shy Floyd Bostwick Odlum got the job. The president of Atlas Corp. has long had close contacts with parts of the New Deal, was tapped for OPM by Harry L. Hopkins. He has close associations also with Defenseman Donald Marr Nelson, and has been acting as part-time consultant to Leon Henderson for nearly six months.

Like priorities enforcement, subcontracting has been a failure. Last February OPM set up a Defense Contract Service under Robert Lee Mehornay, Kansas City furniture manufacturer and ex-Army captain. Later Production Chief John D. Biggers brought in William E. Levis, chairman of Owens-Illinois Glass Co. (of which Biggers was formerly president) to help Mehornay. But little manufacturers remained on the outside looking in; as of last month 75% of defense contracts had gone to 56 big firms. Last week's shakeup dropped Mehornay and Levis right out of the picture.

Odium stepped into one of Washington's hottest spots. Ahead lay many a fight with Army and Navy, who have yet to be convinced that subcontracting works. Ahead also was many a tussle with big contractors who prefer to take full responsibility (and profits) themselves. Besides straight subcontracting, another, still more difficult job faces Distributor Odlum. It is to go out and find the small specialized shops, super-artisan outfits, who have no defense contracts and wouldn't know how to go to Washington to get one. If he gets enough of them into the defense program. Odlum will not only speed up production but improve its quality too.

Odlum has the power, under an order issued by OPM last month, to write subcontracting requirements into defense contracts, even to pass up low bidders in favor of prime contractors who are willing to spread the work. No expert on the U.S.'s smaller industrial machine capacity, Odlum has always specialized in complicated, almost metaphysical empire building. Now he has to make little ones out of big ones.

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