Planemakers' Prospects

One afternoon last week, workers on B-29s in Boeing's Seattle and Renton, Wash, plants lifted their heads at the sudden blare of loudspeakers. In short, crisp sentences, the bad news came. The U.S. Army, which had planned to cut back Boeing's B-29 production gradually, had suddenly decided to swing the big ax. Instead of 122 B-29s this month, it wanted only 50; instead of 20 next month, it wanted only ten.

Next day, the Seattle plant shut down entirely; the Renton plant closed everything but the final assembly line. Cheerfully, 21,200 of the 29,000 workers lined up outside the plants to be paid off (see cut). Said one, grinning: "I knew it wouldn't last much longer anyway."

But there was no smile on the face of new Boeing President William M. Allen, a thin, balding legal counsel of Boeing for 20 years. He had just stepped into his new job.

Ironically, the company whose planes had done more than any other to bomb Japan into submission had been hit harder, dollarwise, than any other plane company by contract cancellations. Boeing already has on hand almost enough sub-assemblies for all the B-29s the Army will take in the next three months. The company had no choice but to stay closed until it can trim its force down to the small number needed to put out the few B-29s wanted (only five or six a month by April).

By the end of August, the Army & Navy had canceled $12.5 billion in plane contracts, with another $7 billion soon to go. Many a planemaker hoped that a temporary bottom had been reached.

If so, the drop, steep as it had been, had still not been as hard as expected. The industry, which had employed 1,250,000 just before the fighting stopped, will probably be down to 250,000 by the first of next month. And at that point planemakers hoped the layoffs would stop. Looking at their backlogs, they had reason to think so.

Soft Cushion. The Army plans as they shaped up last week were to spend $800,000,000 for planes and parts up to June 1947, plus another $500,000,000 for experimental work. In all, the Army wants only 2,128 planes, including everything from helicopters to jet fighters. As OWMR John W. Snyder has already approved the Army program, it has a good chance of getting past Congress.

But Reconversion Boss Snyder is far from satisfied with the Navy program. When the Navy first came in with a list of 5,578 planes, he sent it back for pruning. Before OWMR is through, the order may be slashed to 2,654 planes. If Army & Navy plans go through, the industry can count on Government orders of some $87,000,000 a month for the next 22 months, in addition to civilian orders already on hand. For these reasons planemakers were far cockier about the future than they had expected to be a month ago.

Lockheed for Leadership. Lockheed felt fine and said so. It had been able to trim its peak payroll of 80,000 to 38,000 before the end of the war, has laid off 1,000 since. When production of its famed P-38 Lightning was ended, it shifted the workers to its new 550 m.p.h. jet fighter, the Shooting Star. Though cut back, Lockheed will still turn out 40 a month, biggest production of any Army fighter. On top of its backlog in military orders, they have a whopping $150,000,000 in civilian orders for their shark-sleek transport, the Constellation, and other commercial planes. And they still have an ace up their sleeve: the super-transport, the Constitution, which reportedly will carry 157 passengers.

The Globemaster. Planemaker Donald Douglas, who once feared he would have to shut up shop when peace came, had done just that with some plants. But he was still in production. Last week, he wheeled out of his Long Beach, Calif., hangar the biggest commercial land plane in the world and gave it a test flight. It is the Globemaster, a military version of the Douglas DC-7, a 77-ton giant in which he expects to carry 108 passengers around the world at 300 m.p.h. with only two necessary stops on the way (see cut). In his pocket he already has Army orders for one or two Globemasters a month, and hopes for more from the airlines. Although his wartime payroll of 165,000 has shrunk to 26,000 (he closed down three Government-owned plants in Tulsa, Oklahoma City and Chicago last week) he hopes that military and civilian orders will keep the three plants at Santa Monica running.

Of the Navy's planemakers, Long Island's Grumman Aircraft Engineering Corp. was, as expected, in good health. After the Jap surrender, Grumman stopped making its famed Hellcat and laid off all of its 22,000 workers, then hired some 5,000 back. By last week, Grumman was shaken down to production of two Navy pursuit ships, the Bearcat and the Tigercat. They still have Navy orders for production at a rate of 75 a month. This was far below Grumman's war peak of 658 planes a month but well above their best peacetime volume.

Thunderbolt. How much sales of small private planes will put in the industry's pocket is still anybody's guess. But it might be far bigger than gloomy Guses have predicted. Example: when the Government put on sale 5,000 surplus small planes, some 40,000 people bid for them.

Most of the warplane makers have been content to leave the small plane market alone, so far. But not Republic Aviation Corp. It already has a foot in the door, and as soon as it winds up production of its Thunderbolt, it plans to set up an assembly line for its four-place amphibian, the Seabee. Republic said that it already has orders for 3,500 on hand, hopes to turn out 5,000 in the next year.

Totting up all of this business, Army & Navy, airlines and private flyers, planemakers see no reason why they should not sell some $1 billion in planes in the next year. That is nothing like the $16.7 billion-a-year war business. But it would be three times the best prewar year.

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