Destructive Creation. Mark R. Wilson
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equipment, pumps, and valves. A typical World War II bomber comprised more than 165,000 parts, as well as 150,000 rivets; each of its engines comprised more than 1,400 distinct parts.102 To acquire many of these goods, prime contractors purchased from smaller manufacturers.
The placement of contracts (prime and sub) with smaller companies was promoted by civilian and military officials in Washington. Well aware that this was favored by Congress, they also regarded it as a way to achieve production goals faster, by reducing the burdens on the overloaded plants of prime contractors. Starting in 1940–41, Undersecretary of War Patterson used strongly worded memos to order the procurement services to do more to spread the work. In February 1941, OPM created a new Defense Contract Service (succeeded later that year by a Division of Contract Distribution), charged with boosting the participation of smaller companies. These efforts by civilian and military officials were redoubled in 1942, before and after Congress passed the Small Business Act, which set up the Smaller War Plants Corporation.103
Washington’s policy of enlisting smaller firms was so vigorous that it created opposition among military procurement officers who believed that the initiatives sometimes went too far. In August 1941, General Levin H. Campbell, Jr., then assistant chief of the Army’s Ordnance Department, complained privately that OPM seemed to be pursuing “the objective of having every Tom, Dick and Harry make [armor piercing] cores.” To Campbell, it seemed that trying to get several companies in the auto industry to make the cores might create some jobs but “will be much more costly than it would be were we to build our own plant for this production.” There were similar sentiments in the Navy Department, where some officials tried to push back against subcontracting policies that they believed detracted from efficiency.104
Subcontracting became even more prevalent after Pearl Harbor, when existing prime contractors were deluged with new orders. Leading airframe makers such as Lockheed and Grumman, whose limited plant space made them eager to find outside vendors, used subcontractors to supply half the total value of the finished airframes. Across the airframe industry as a whole, over a third of the total value of military orders was being subcontracted by 1944. Sperry Gyroscope, the nation’s leading manufacturer of complex avionics and gun directing systems, subcontracted half the value of its orders. Chrysler, a pioneer in subcontracting in the prewar auto industry, claimed that the GOCO tank arsenal that it operated added only about a quarter of the total value of finished tanks. The rest was provided by more than six hundred subcontractors and providers of governmentfurnished equipment, located in twenty states.105
For many midsize manufacturers, which did not typically act as managers of giant new GOCO plants, World War II required industrial conversion. At a few companies, this transition from civilian to military work started well before Pearl Harbor. One early bird was the A. O. Smith Corporation of Milwaukee, a successful independent manufacturer of automobile frames and pipe that had been a major manufacturer of bombs during World War I. In the late 1930s, A. O. Smith executives were already communicating with the Ordnance Department about future bomb production; before Pearl Harbor, they already had $7 million worth of bomb contracts.106 Other early converters included the Armstrong Cork Company and the York Safe & Lock Company, both located in south central Pennsylvania. Both began to solicit military orders in the late 1930s; both became important World War II prime contractors, as major suppliers of shells, cartridge cases, and gun mounts.107
For the hundreds of midsize manufacturers that did not undertake any significant conversion until after Pearl Harbor, the transition was not always associated with expansion or prosperity. Forced to stop their normal business by government, these companies sometimes found the war years difficult. In Bristol, Connecticut, for instance, the E. Ingraham Company, a midsize family-owned manufacturer of clocks and watches, had to stop making those goods in early 1942. The company converted entirely to the production of parts for time fuses for antiaircraft shells, along with bullet cores and other war products. It did so using its existing factory space, which, after its normal business ceased, was more than ample. The number of workers at the company actually decreased during the war; revenues would not recover until the later 1940s, after it reconverted to its normal business.108
Many important conversions and expansions were accomplished by turning manufacturers of civilian goods into licensee military contractors. Such arrangements had been used in 1940–41 to bring the automakers into the war program. But they also involved independent firms that were merely large, as well as those that were truly modest in size. In 1941, the AAF told the Sperry Corporation that it would need to license the manufacture of its .50 caliber machine-gun turrets, used in B-17 and B-24 bombers. The first of the Sperry licensees was the Briggs Manufacturing Company, a leading auto-body manufacturer in Detroit, which would make the turrets in a new $9 million DPC plant. The second was a smaller firm, the Emerson Electric Company, a manufacturer of small motors, fans, and welding equipment in St. Louis, which already had some small Navy orders.109
After Pearl Harbor, licensing arrangements continued to bring new companies into the war economy. By the end of the war, two dozen companies were manufacturing complex Sperry-designed products—including gun directors, gyrocompasses, autopilots, bomb sights, and turrets—to fill substantial prime contracts with the military.110 Some of the licensees, including GM, Chrysler, and Ford, were giant corporations, far larger than Sperry itself. But many were midsize corporations whose prewar revenues of between $25 million and $75 million a year made them less than a tenth the size of the giant automakers. Such was the scale of Toledo’s Electric Auto-Lite Company, a supplier of auto parts; it was also the size of many companies in the office equipment industry, including National Cash Register, International Business Machines (IBM), Burroughs Adding Machine Company, and Victor Adding Machine Company. All these companies became licensees of either Sperry or Norden, the other top designer of bombsights.111
Besides the several midsize manufacturers that converted to war production as licensees, several dozen firms were transformed by war demand into sizable enterprises. Concentrated in the aircraft industry, many of these “war babies” were suppliers of components for planes. One of these was the Elastic Stop Nut Corporation, founded as a small enterprise in the late 1930s, which became the leading manufacturer of the self-locking nuts used by the millions of airframe manufacturers. (A single bomber required 40,000 of the nuts.) By 1943, Elastic Stop Nut was running two $5 million plants, in New Jersey and Nebraska, which had been paid for by a combination of DPC and private funds; its annual sales had reached $40 million.112 In San Diego, the Solar Aircraft Company specialized in the manufacture of stainless-steel exhaust manifolds for aircraft. During the year ended April 1939, its gross sales were only about $0.5 million. Four years later, Solar Aircraft’s sales were $22.4 million, most of which came in the form of subcontracts with the airframe makers.113
A more prominent war baby was Jack & Heintz, Inc., a manufacturer of aircraft starters, founded in 1940. Before the end of 1941, this infant independent company had over $22 million worth of military orders. By 1944, Jack & Heintz had eight thousand employees, who worked in several Cleveland-area plants that together amounted to a million square feet of factory space. Financed by a combination of private and DPC funds, the $20 million worth of new war plant managed by Jack & Heintz produced thousands of airplane starters, as well as Sperry-designed autopilots. By war’s end, Jack & Heintz would fill $421 million worth of prime contracts. This made it one of the nation’s top hundred prime contractors.114
As the case of Jack & Heintz suggests, the participation of smaller companies in military contracting is easier to see if we consider the local level. Naturally, if we consider only the very largest plants and contractors at the national level, we cannot help but emphasize the role of big businesses—which by 1942 included the major airframe and aero engine makers, along with established industrial giants. However, by examining the local (micro) level, it is possible to appreciate the very considerable involvement of smaller enterprises as prime contractors and operators of publicly financed plant. The Cleveland area, where Jack & Heintz had its plants, is a case in point. Cleveland was home to two large GM facilities, as well as plants owned by other large corporations, including GE, Kennecott Copper, Republic Steel, and Standard Oil of Ohio. But forty other companies in the Cleveland area held at least $10 million worth of prime contracts.