FOR CHILDREN of certain age, say 40 years and older, the mention of certain names will stir deep feelings, a collection of important memories not shared by those who are too young to remember.
These names are imaginative emblems of a special time in the national history, a period when events were terrible and glorious and more fantastic than most other eras in America's fantastic past. I will mention some of these names:
Grumman Hellcat. Lockheed Lightning. Curtiss P-40. Douglas C-47. Northrop P-61 Black Widow. Vought Corsair. Boeing B-17 Flying Fortress. North American P-51 Mustang. Republic Thunderbolt.
Everyone over 40 recongnizes the great airplanes of World War II and the aircraft companies which built them. Each name evokes a brave sense of daring the wild blue yonder. Even children who never flew memorized every name and silhouette in the sky as our contribution to the "war effort."
Those fighter planes and bombers were all propeller-driven, all incredibly small alongside today's behemoth jets. Yet they are still the most convenient statement of America's innate capacities -- the resources and imagination and awesome industrial muscle which were mobilized to full potential by that national crisis. It was extraordinary what this country could do, when it needed to do it.
United by the war, politicians put aside the usual arguments over government spending, subsidies, government-financed research, government controls of wages, prices and profits.
The government built a lot of factories and turned them over to private companies to operate. The government ordered airplanes, world without end, and the infant aircraft industry rolled them out in dizzying variety and at heroic production speeds. Making a Market
IN BUSINESS terms, World War II made a market for airplanes on which the aircraft companies were able to grow strong. After the war, America had a new industrial giant in place, an industry which would dominate world aircraft sales, commercial and military, for the next generation.
This was our national legacy from World War II -- the industrial base for the long properity which this nation has enjoyed ever since. Government spending and government risktaking nutured the infancy of the great postwar industries -- atomic energy, plastic and synthetics, advanced electronics, computers, jet propulsion, among others. Every living American benefitted, one way or another.
And yet this also must be said: Americans are still paying dearly for the glory of those old airplanes. We are paying billions in wasted dollars, consumed by subsidized and unneeded capacity in the aircraft industry. Worse than the wasted dollars, we still tolerate the distoriting effect which this excess capacity has on defense planning and U.S. foreign policy. The government and the industry -- interwined as they have always been -- have a joint stake in selling more and more arms to the world and in endlessly elaborating on America's own arsenal. The alternative, which no one wants to face, requires killing off a few famous old names.
Revisionist historians of the Left would argue that this is what the Cold War is really all about -- making markets for the defense contractors of World War II. Their agrument goes like this:
Cold War ideologies conjure fearful visions of World War III, which, thus, justify permanent arms production on a massive scale which, in turn, keeps those factories humming, almost as though World War Ii/ never ended.
That version of history is too cynical, too simplistic for most of us, but it touches on something true about U.S. policy today and yesterday. Having raised a mighty industry from infancy, the government lacks the courage to confront its bloated offspring and reduce it to a proper size. To politicians of every stripe, Republicn and Demorcatic conservative and liberal, that sounds like infanticide and they won't touch it. Excess Capacity
THAT HAPPENED to the great names fo World War II? A few companies like Curtiss-Wright have moved away from military aircraft sales. Several compaines merged (MCDonnell and Douglas, Fairchild and Republic) and others were absorbed by huge conglomerates (North AMERICAN BY Rockwell, Vought by LTV, Consolidated Vultee by General Dynamics, Ryan by Teledyne). But that still leaves 12 major airplane manugacturers and five helicopter companies, all bidding furiously for the available business.
To put the problem luntly, America has too many airplane companies. If two or three of them went out of business, the industry would still have abundant extra capacity for the future. As it is, the aircraft industry is roughly twice as large as it needs to be in order to produce all the comercial and military airplanes needed between now and 1990.
The Defense Department, as the principal customer, picks up most of the cost of this unneeded capacity. Conservatively estimated, maintaining this excess eats lup $300 million to $500 million a year. This wasteful government spending -- which is pure inflation since it produces nothing -- pays for unneeded employes, for idle factories and depots, for the inflated costs of airplanes and helicopters which are manufactured at inefficiently low production rates.
The above facts are not exaggerated claims from antiwar zealots or pacifist nervous-meillies. These facts are from the Pentagon, reported by a special joint study group which courageously explored this sensitive subject and proposed a long list of alternative policies to confront the problem. The report was issued quietly in the last days of the Ford administration and, as far as I can determine, it promptly disappeared beneath the waves. 2.000 Football Fields
THE FINDINGS were drawn by colonels and captains, admirals and generals and Defense budget analysts, so one may reasonalby assume that they do not approach the aircraft industry with hostility. Here are a few provocative points which their report made:
If all of the aircraft companies geared up for full employment, oiperating three shifts a day, they would produce four times more airplanes than the United States or foreign customers will need in the next decade. Even operating at one-shift capacity, they would produce too many airplanes.
Even during the "surge" production of the Vietnam war, when both military and commercial orders reached simultaneous peaks, the industry was still operating below its nominal one-shift capacity.
The defense budget pays for something like 30 million square feet in excess factory space. This dead space is equivalent to 2,000 football fields, about a third of it government-owned. It costs about $60 million a year.
Industry and government could close about eight major production centers, save $310 million a year and still have plenty of competition and "surge" capacity in the event of war.
The aircraft industry has become top-heavy with the overhead costs of maintaining nonproduction employes, the managers and engineers and others who do not make airplanes but who plan, design and sell them. In 1975, for the first time, these nonproduction employes outnumbered the production employes.
So what we have is a government-in-dustry relationship which covers itself with elaborate pretensions, complicated rules for procurement which pretend to an arm's-length standard. Behind these functions is the absurd reality -- a subsidized marketplace which doesn't make any sense, in economic terms. The government keeps the companies afloat. It stages great contests among them -- design competitions and complex bidding games -- but ultimately the government must keep them afloat. If the Pentagon falls short in this obligation, Congress or the White House usually step in to save the day.
When Lockheed was on the ropes, the government bailed it out with a loan guarantee. Last year, when Vought was in trouble, Congress ordered a special purchase of Vought planes, even though the Pentagon didn't want them. Every year, it seems, Congress buys more F-14s from Grumman than the Pentagon ordered.
This juggling goes in, season after season, obscured by a lot of fancy theoretical arguments about which new planes are best and which ones fit the defenxe strategies. Ultimately, the purchases have another strategic goal -- keeping each factory open with at least a little "warm production." as the Pentagon calls it. World Salesman
THIS INEFFICIENCY probably hurts the national defense in the long run because in inflates the cost of every airplane the government buys. Stretching out production runs and spreading the orders around means the armed services get fewer planes and each plane costs more delivered at a slower schedule. It pressures the Pentagon into becoming world salesman for the planes because, if Iran, Saudi Arabia or another country puts in an order for F-15s or F-16s, that means more U.S. production and that LOWERS THE OVERHEAD COSTS THE Pentagon itself has to pay for each plane.
But here is the devilish part. Despite the government's constant patronage and subsidy, these airplane companies are still extremely insecure. Because there simply isn't enough business to go around. As a result, nearly every season, ine or two of them are in serious danger of collapse, belly-up bankruptcy. Meanwhile, several others will be "surging" with big contracts.
From the desperate companies, salesmen will scour the world, aided by U.S. diplomats and military officers, in search of foreign buyers. Desperate lobbyists will blanket Capitol Hill, pleading for special consideration, special orders.
This fierce competition explains, in part, why some famous old aircraft names have become tranished in recent years with scandal. Lockheed, Grumman, Northrop have new connotations for younger citizens: bigtime corporate bribery or illegal political slush funds. Ugly corporate behavior flourishes when company survival depends upon political decisions.
Since the government finances the heavy costs of maintaining this extra capacity, the government, in effect, is still taking he risks for he aircraft industry, just as it did in the crisis time of World War II.
If conservative politicians were more alert or more true to their stated principles, they would pounce on this situation, denouncing the Pentagon subsidies as a monstrous distortion of the risk-taking values of a free market. Convervatives, of course, tend to be the most zealous defenders of this particular wedding of government and private industry. A Forbidden Question
WHY DO President Carter's inflation fighters duck this problem when the savings could e so enormous? Because it would require them to ask a forbidden political question: Whose airplane factory shall the government close?
Certainly not Sen. Jackson's Boeing or Sen. Tower's General Dynamics. Surely not Sen. Moynihan's Grumman or Sen. Cranston's Northrop. Definitely not Sen. Eagleton's McDonnell-Doublas or Sen. Glenn's Rockwell.
Well, then, how about President Carter's Lockheed? Forget it. Notwithstanding its noble rhetoric, the Carter administration is busy buying airplanes and selling them to U.S. allies.
The awkward reality is that this industry has a natural political base which makes it nearly impossible for Congress or the Executive branch to pursue national solutions. A modern pork barrel, sustained by log-rolling in the classic tradition. From the 11 states which have major airframe plants, the House of Representatives draws 198 of its members. Some of those representatives won't vote for every airplane every time, of course, but we haven't yet counted the other political components which go into the airplane -- engines, electronics and air bases. When these votes are added, the industry has something close to a permanent majority in Congress. Perhaps this explains why Congress Permanently supports bigger defense budgets.