"The automobile industry is the outstanding major industry capable of producing a much larger volume of defense materials * * * the automobile industry constitutes our largest available reserve, contained in any single industry, of productive power for defense."

Why is it that the contribution from this major industrial power to our nationaldefense program has been, comparatively speaking, negligible? Out of 250,000 workers employed by General Motors in June 1941, only 34,000 were employed in national-defense work. And at the present time our estimates would indicate that no more than 45,000 General Motors' workers are producing for the nationaldefense program. The same ratio of defense to nondefense work appears to prevail throughout the industry. National defense production in the auto industry has been made up primarily of magnificent reports of plant construction and engineering aspirations. Not one-tenth of the basic productive power in the industry, even at this time of world crisis, has been directed toward ends of national defense. It is in this situation that the explanation of a tragic paradoxthreatening unemployment to skilled workers and productive equipment of the automobile industry at a time of national emergency-is to be found.

In November of 1940 our union made certain proposals to the Office of Production Management and to the automobile industry for the speedy and complete development of national-defense production in automobile plants. A plan to achieve this purpose was worked out at my suggestion by one of our officers, Mr. Walter P. Reuther, with the assistance of designers and skilled craftsmen of the industry. This plan proposed the following:

1. That the excess productive capacity of the automobile industry be at once mobilized for defense. Mr. Reuther demonstrated that tremendous resources in machinery and equipment were used in the automobile industry only at certain periods of the year. With the leveling off of production schedules, such equipment would become available for immediate diversion to national-defense production.

2. That the tooling resources of the automobile industry, including men and equipment, be diverted immediately toward a general tooling up of the industry for national defense purposes. With at least 200,000 machine tools available in the industry, operated by a large mass of the most skilled workers in the country, this tremendous machine-producing power could have been directed toward the retooling of auto equipment for the production of aircraft and other items of national defense importance. Such utilization of automobile machine-tool capacity would have meant postponement of the annual model change-over for the industry.

Had steps been undertaken back in November of 1940 to call upon the productive power of the auto industry for national-defense purposes, we would not now be facing a tragic crisis of unemployment and retarded production. Had industry and Government been willing to undertake this essential task, defense jobs developed in the industry would now be more than sufficient to absorb the full complement of automobile workers displaced by curtailment of regular automobile production.

In emphasizing this point, I am not seeking primarily to criticize representatives of industry and government responsible for this failure. I am emphasizing it because it is my conviction that the basic elements of the Reuther plan are still applicable and must be brought to bear if we are to find a way out of the present impossible situation. The key to our whole problem, in my opinion, lies in the acceleration of conversion from regular automobile to national-defense production. For this purpose the basic thesis of the Reuther plan that present automobile machine tools and factories may be readily adapted to national-defense purposes is still of the most vital importance. Automobile machine tools and the skilled craftsmen to operate them are still available for the rapid transformation of this industry. This can be done, and will be done, provided Government and industry authorities are willing to cooperate with labor in the full coordination of all production and tooling facilities in this industry in a major campaign to make Flint, Detroit, and the other centers of automobile production main resources in the drive to out-produce Hitlerism.

Auto workers throughout the country believe that a major crime against national defense and their own welfare has been perpetrated in this refusal of industry to prepare adequately for national defense. Major automobile companies have preferred not to tamper with their regular productive equipment. They have hesitated to do anything which might interfere with their capacity to expand production in the highly competitive production of automobiles. Instead they have accepted Government funds for the building of new defense plants and the

60396-41-pt. 18- -14

purchase of new machine tools. They have accepted only such defense orders as might be produced in these plants without interference to their "business as usual" program.

Auto workers recognize that this policy of expanding "business as usual” and accepting defense work as a marginal activity may well prove an expensive one to the country at large.

For the past few months, as the world situation has become more and more critical, well over 20,000 tool and die makers have been operating the machine tools of the auto industry in producing the tools, dies, jogs, and fixtures necessary to the production of new model cars. These critically important men and equipment have been devoting their full energies to the creation of more attractive automobiles; and from advance advertising, these automobiles appear to be very attractive indeed. But I fear that they have been produced at the very high price of unemployment to automobile workers and slow-down to the national defense program.

In concluding the discussion at this point, I may say, on behalf of my organization, that automobile workers are now ready as they have been in the past to take the most energetic steps in cooperation with industry and Government for meeting this situation.

In the interests of national defense, in the interests of economic security for automobile workers, immediate steps must be taken for the speedy transformation of the auto industry into a basic section of the American "arsenal of democracy."

SHORTAGES

It is true at the present time that one element of the Reuther plan cannot now be carried through, and that is the continuation of regular automobile production while surplus facilities are changed over to national defense production. This cannot be done because supplies of steel, aluminum, nickel, zinc, copper, and other essential elements are insufficient to maintain both regular auto production and all-out production for national defense.

For this situation auto workers place responsibility on the monopolistic "business as usual" practices adhered to by major producers of these essential materials. We have seen the evidence brought forward by the Truman committee's investigation of the aluminum monopoly. We are familiar with the resistance to expansion of steel productive facilities carried through by the American Iron and Steel Institute and certain officials no longer connected with the Office of Production Management. But we are happy to see that the American public is at last becoming conscious of these problems; that steps are at last being taken through Government agencies such as the Supply Priorities and Allocations Board for organizing full productive capacity. We believe that such steps will, in the long run, solve the problem of the automobile worker, and that in solving his problem, the problem of the Nation as a whole will be met.

IMMEDIATE STEPS

As I have indicated before, the problem of unemployment in the automobile industry depends for its solution upon a speedy transition to full national defense production. This means the elimination of red tape in awarding contracts in all places where priority unemployment threatens; this means the all-out utilization of the engineering, designing, and tooling facilities in the auto industry in a coordinated program of national defense tooling; this means, above everything else, an abandonment of "business as usual" psychology in a full power drive for defense production.

At the best, however, this cannot be an immediate solution to the auto worker's problem. Mistakes have been made for which the auto worker is going to have to pay the bill in unemployment and economic insecurity for a period of some months. To meet this situation, therefore, the United Automobile, Aircraft, and Agricultural Implement Workers, Congress of Industrial Organizations, brings forward the following program:

1 Last winter when major energies of auto corporations should have been directed toward converting plants to arms production, they were instead engaged in a record-smashing passenger car production and sales campaign. That brought big profits out of defense prosperity. But now last winter's "business as usual" is going to mean "unemployment as usual" for auto workers.

These plants will doubtless be highly efficient plants capable of asserting dominance in the aircraft industry following the completion of our defense program. They are more valuable, therefore, to their present owners than a regular automobile factory tooled up for defense production upon an emergency basis. Such factories might not be able to meet peacetime aircraft competition.

1. Full and complete enforcement of Office of Production Management principles for employment security to automobile workers.

In recent weeks a series of meetings on this problem has been held in the city of Detroit between officials of industry, the U. A. W.-C. I. O., and the Office of Production Management. Through these meetings a policy for transferring experienced automobile workers to defense jobs through channels of the United States Employment Service has been worked out. This policy guarantees that developing defense jobs will go first to experienced automobile workers in order of their seniority, and that younger workers will be secured in their employment on regular automobile production. This is the essential principle of the Buffalo plan. But to become effective that principle must be secured by more adequate machinery in its application; must be confirmed by more active cooperation from the employers of defense labor.

2. Protection of the economic security of displaced automobile workers.

Even in such a city as Buffalo, N. Y., where tremendous demand for nationaldefense labor is developing, the Buffalo plan by itself has provided employment up to September 20 for only 1,200 out of 3,600 unemployed automobile workers. In centers such as Detroit, Flint, and other cities of Michigan, where there will be no immediate expansion in over-all employment, the ratio of men finding defense jobs to those unemployed will be considerably smaller for some time. These workers must be protected by more adequate unemployment compensation. With rising living costs, with generally chaotic economic conditions, unemployment benefit payments must be increased. A sum of $110,000,000 at the disposal of the Michigan Unemployment Compensation Commission indicates that this may be done through a specially called session of the Michigan State Legislature.

I am advised also that in England at the present time, workers undergoing training for national defense receive wages equal to their normal full-time wages. It is the responsibility of both industry and Government to provide such compensation to groups of automobile workers who may require new skills for their employment in the national defense program.

3. A moratorium on debts for unemployed automobile workers.

With the high rate of employment and weekly earnings prevailing in the industry during recent months, many auto workers have undertaken heavy financial responsibilities. They must not, in this period of emergency, be deprived of their homes, their furniture, or of their automobiles. Protection of these workers is basic to the maintenance of morale among them and in the communities in which they live.

4. Increased production and employment in national-defense plants.

The recent meeting of the international executive board of the U. A. W.-C. I. O. has called for the adoption of an additional shift with proper overtime payment in all automobile-industry national-defense plants. This would increase the hours of operation in national-defense plants to 160 per week and would provide employment for at least 25 percent more automobile workers. Such a development should be given the serious consideration of industry and Government. 5. The adoption of the Murray plan for the automobile and other industries.

The Murray plan calls for the adoption of industry councils representative of labor, industry, and government in each one of the basic defense industries throughout the country. In the automobile industry, such a council would have responsibility for the placement of contracts, for the utilization through subcontracting of all the productive facilities, both in large plants and small plants, for the coordination of tooling and productive equipment in an all-out production drive, and for the protection of labor's democratic rights as a thing essential to productive morale.

The principle must be recognized that national-defense production should not be the private concern of powerful monopoly interests. It is a vital concern of the workers involved, and of the Nation through its government, as well as the executives of major industry. Fuller recognition of this fact will be the foundation for future successful progress in our defense program.

(The following was received subsequent to the hearing and is made a part of the record, in accordance with instructions from the chairman:)

SUPPLEMENTARY STATEMENT OF R. J. THOMAS, INTERNATIONAL PRESIDENT, UNITED AUTOMOBILE, AIRCRAFT, AND AGRICUL TURAL IMPLEMENT WORKERS, CONGRESS OF INDUSTRIAL

ORGANIZATIONS

AUTOMOBILE CAPACITY FOR DEFENSE PRODUCTION

For the last 9 or 10 months considerable discussion has been going on regarding the adaptability of automobile plants and equipment for defense production. It has been the position of the U. A. W.-C. I. O. that the large bulk of automobile productive machinery could be adapted to various types of defense production within a comparatively short period. This could be done as proposed by Mr. Walter P. Reuther, by the coordination of the tooling facilities of the auto industry for the production of the jigs, fixtures, and tools essential to making defense plants out of auto plants.

* *

Representatives of the automobile manufacturers have urged strongly an opposing point of view. Said Mr. Alfred P. Sloan, Jr., chairman of the General Motors Corporation, on November 20, 1940: "* Automobile plants are not adaptable to the manufacture of other products. Repeated surveys have indicated, for instance, that only about 10 or 15 percent of the machinery and equipment in an automobile factory can be utilized for the production of special defense material." Mr. Sloan added, "It is usually necessary to provide new facilities, including machinery and tools."

It was on the basis of thi position that the automobile industry, the Office of Production Management, and the United States Army and Navy have, up to the present time, at least, followed a program of building new plants and of developing new production equipment instead of utilizing facilities already available.

There is strong evidence to support the position of the U. A. W.-C. I. O. Advice received from a large number of engineers and designers, who are involved in both the automotive and aircraft industry, indicates beyond question that the proportion of machinery and equipment available for early change-over is many times higher than the estimate of 10 to 15 percent made by Mr. Sloan in the statement quoted above. According to these men whose daily work is the solution of tooling and production problems, at the very least, 50 percent of the productive equipment of the automobile industry is available for change-over to defense work within a period of from 3 to 6 months.

LIST OF NEWLY INSTALLED MACHINES

Aircraft machine tools differ from those used in the auto industry only in the jigs and fixtures employed. In this connection I should like to list machines newly constructed and installed in the Allison division of the General Motors Corporation in the city of Detroit. These machines listed are installed for the production of aircraft parts and duplicate existing automobile-plant machinery: Grinding machines: Cincinnati centerless, Exlo internal and external, Bland, Norton, Landis, Blanchard, Brown & Sharpe, (Bryant) and Held. (These machines are used to produce the following parts which are common to both aircraft and automobile motors: Camshafts, crankshafts, bearings, connecting rods, wrist pins.) Milling machines: Milwaukee, Cincinnati, Sunstrand, and Brown & Sharpe. Keller machines: Wickes lathes, Greenlee lathes, and Cincinnati lathes. Spline machines: Sunstrand and Brown & Sharpe. Hones: Exlo and Wickes.

FIGURES OF GENERAL MOTORS PRESIDENT CITED

It is interesting to note that in his speech of September 10, 1941, Mr. C. E. Wilson, president of the General Motors Corporation, expresses opinions which seem to be at variance with those expressed months before by Mr. Sloan. Says Mr. Wilson: "General Motors has a productive capacity and has been producing approximately 8 percent of the total durable goods produced in the United States. On this basis the corporation's proportion of the defense program for this type of material would be about 8 percent."

Mr. Wilson is here assuming that general capacity to produce consumers' durable goods is directly transferable to capacity in the production of defense goods.

That is the position which our union has been taking for the last 10 months. We believe it most unfortunate that a recognition of this fact has not been made by Government or industry up until this comparatively late stage of our defense program.

Because of this failure, the General Motors Corporation can report that out of $1,350,000,000 production of finished durable goods during the first 6 months of 1941, only $131,000,000 worth of that production was in the field of national defense. This corporation, with 8 percent of America's total durable-goods capacity, has devoted less than one-tenth of that capacity to defense production up to the present time.

Even more unfortunate, however, will be the effects of this policy in the months to come when the full curtailment of auto production takes place throughout the industry. Then auto workers will pay the penalty in unemployment for apathetic national-defense preparation. If this had not been true, if a recognition of the auto industry's responsibility toward national defense had come some months ago, preparation for a change-over might now be well under way. The necessary engineering work, the work in designing and tooling, could have been carried through without interference with regular automobile production during the early months of 1941. True, the introduction of new models for 1942 would have been postponed, but some 30,000,000 hours of skilled labor in the utilization of essential machine tools might have been diverted from producing new model cars to open the way for gigantic national-defense production.

"BUSINESS AS USUAL"

But the conception of "business as usual" triumphed in governmental agencies as well as in the industry itself. New models were allowed. The largest group of skilled workers in the country labored long hours to produce sleeker curves and fancier grillwork. As a result, we are only now beginning the program of retooling for defense production, which should have been initiated early in the winter of 1941. In consequence, automobile workers are left to face an extended period of unemployment-a period of unemployment which might well have been obviated by early planning for defense retooling.

Even at the present time, both industry and Government have failed to take adequate steps to coordinate the full tooling facilities of the auto industry for the change-over to defense production. A survey conducted by the Detroit and Wayne County Tool, Die, and Engineering Council in 34 Detroit automobile plants indicates that out of a total of 1,577 machine tools, 337 of those tools are idle throughout the week. The remainder are being operated at an average of 70.4 hours per week. With capacity operations of all these machines on the basis of a 160-hour week, total weekly operation would be equal to 252,320 machinehours. Instead, actual machine-hours are in the neighborhood of 87,296. This means that these tools, which are the most essential and most critical to the defense program, and of crucial importance to retooling the entire industry, are at the present date being employed at no more than 35 percent of full capacity.

COORDINATION IN USE OF EQUIPMENT URGED

In the opinion of the U. A. W.-C. I. O., this is a startling situation. It is our conviction that immediate steps by authorities of the Army, Navy, and other Government agencies should be taken to coordinate this reservoir of unused equipment for the full and immediate transition of the auto industry as a whole to defense production. This is the key to an early solution of the employment problems now confronting auto workers. Even more important, it can be made a key to the solution of America's basic problem-the problem of producing arms in sufficient quantities to frustrate Nazi designs for world domination.

I have been advised by many local unions in our organization of another problem which has developed in connection with securing full defense production and employment. Information received by my office indicates that considerable difficulty has been encountered in adjusting specifications established by the ordnance departments of the armed forces to the necessities of mass production. Too often the specifications had been rigidly established some years ago and are adhered to at the expense of efficient production methods. The auto industry, for instance, has developed many time-saving techniques for welding. These