At Issue; 34; The Defense Cutback

Once cut back, composite, take one. National Educational Television presents. At Issue, a weekly commentary on events and people in the news. At Issue this week, when economy strikes, an examination of the effect of defense cutbacks in two American cities. For nearly a quarter century, the business of making armaments has been a way of life for millions of American workers. Although the nation demobilized rapidly after World War II, it was not long before the Korean conflict forced another military buildup. Britain came still more defense spending, made necessary by the long Cold War. When President Kennedy took office in 1961, hopes were high for a leveling off in military

spending. But the Cuban Missile Crisis and a new Soviet threat to Berlin led to still higher outlays. In the three Kennedy years, spending for all military purposes rose 25%. It remained for President Johnson to push our defense-oriented economy in a new direction. Little more than a month after taking office, he announced he would shut down every archaic military base and take the money to meet what he called the unfilled needs of the American people. As he told the annual convention of the U.S. Chamber of Commerce... In doing what we've done, we have endeavored to shut down unneeded installations of other war. We've closed down some obsolete, unnecessary, what you might call, illustrative, capital reports in this missile aid. They've been carried over from other time and other needs, but no one has really walked

in and said, I'm pulling down the curtain. We've done that so we can sustain the muscle of our might to have more muscles for these times and the times come. I can tell you, with positive assurance that your country has never been stronger military than it is at this hour. Two long lists of government installations and military bases have been announced by Defense Secretary Robert McNamara for eventual shutdown, and spending for military hardware and research will drop nearly $2 billion in the new fiscal year. Impact of these cuts already is being felt in the Boston area. Defense contracts have been terminated, and the historic Watertown Arsenal is slated

to close. More than 1600 jobs at the Arsenal are at stake. The Massachusetts Congressional delegation has protested and asked Secretary McNamara to reverse it. The outlook is bleak. Andrew Stern talks with Arsenal Crane Operator Lewis Howe. That seems to be a pretty automated piece of equipment, Mr. Howe. Yes, it is. One of the newest ones in the in the arsenal. How long have you had this piece of machinery? Well, it's been in the building about six months ago, but actually an operation a little over four. I see. How does it work, exactly? It is a remote control radio operated. It enables the rigor to make its own lifts and operate as crane directly from the port. I see. And so there's nobody in the little booth running... Nobody's up in the Gavott Halls, sir. Well, now you've heard that there are plans to close this base, to close the arsenal. How will that affect you?

Well, it all depends on what the anchor is towards re-employment in another agency. It stands right now. We really don't know. We know we will be here until the end of the year. Do you think you're going to have to move out of the Boston area? The way it looks right now, I'm afraid so, sir. How long have you lived in this area? All my work for 24 years. How would you feel about moving? Well, firstly I would go to where the new appointment may be offered to try it out for a while and work hard to move my family down. I wouldn't want to move everything out all at once. Mitchell-Sangelo, chief of methods at the arsenal, speculates on his job outlook. Well, I personally don't care. I'm confident with my experiences and talents that I have here. I'll probably even get a better job. But I do believe that closing the arsenal is a great loss to the country, especially the work we've done in the past and what we're doing presently. Other people just perform as well as we did, and the past we did. But you're not worried personally that you'll find another job.

Personally, from the work I do for the country right here, I don't like to be received well out of the industry. Mr. Manuel Dunabidian is president of the National Association of Government Employees here at the Watertown Arsenal. How do you feel about the loss of jobs? I don't know. I think that President Johnson should think of visiting this area directly after this place is closed. There's another poverty area here in our country. All right, and how about Mr. Charles Highland, who is the assistant chief of industries here at the arsenal? How do you feel about the job situation here? Truthfully, it's a little early for me to say anything intelligent about this. I don't really have any idea where I would go at the moment. Like everyone else, I have a feeling that I can always get a job, but who knows what, and who knows where. And in any case, it's going to be an economic hardship. Well, don't you feel with a strange, a changing concept and strategy,

and a greater reliance on automatic systems, on missile systems, on the Polaris system, that much of the equipment which is being manufactured for conventional wars is out of date? No, I don't think so. I don't think that we will ever get away from conventional warfare, and the conventional tools of warfare. And I think that you'll agree with me if you look at it objectively, that although we have an edge in atomic weapons and missile systems, we can never do away with the foot soldier and the old audience, and we don't dare do away with it, because just as soon as somebody over there pushes a button, and we push the button, we're all done anyway. The prospects for watertown are not entirely bleak. The arsenal occupies some valuable land. Chairman of the Watertown Selection, John Ryan. Maybe the buildings can be utilized for some NASA buildings.

Maybe the workforce of the arsenal can be incorporated in sort of date, can remain and work for NASA, because it is a research institution I understand. And at the same time, we have 119 acres of land available here. NASA may not need all of that land. I would like to see them sent to here, take whatever land they need, and the remaining land that they are now occupying, return to the town of Watertown, so that we can add it to our tax base. At the Boston Naval Yard, the situation is somewhat different. No closing date has been announced, but it is one of 11 shipyards whose future is in doubt. Despite announcements that jobs would be offered to all employees, the men are nevertheless worried.

It would be a difficult thing for me personally. I have four children. None of them in a position to support themselves. I have a house naturally margaged. And so it would be a real hardship, because I don't know where I could get another job. I've been a ship fitter for 23 years in this yard. And about 25 years altogether, I'm 48, going on 49 years old, and it's it to be hard to get a job, even as a ship fitter. I mean, they would know what a yard would want to hire a man as old as I am. What am I supposed to make in a grave mistake? I think this is established right here as a better shipyard. And regardless of what other shipyard they want to put it against, that's the quality is high. You know, we are meant to make the costs a little bit high, but they want quality and we give them to them. I think it's a mistake on President Johnson's part. He's going around the country preaching war and poverty, war and unemployment. At the same time, he's creating unemployment and creating poverty throughout the shipyard districts throughout the country. And I think it's a policy all the way through. Supposing they offer me a job in some other shipyard, naval shipyard,

that would mean uprooting. I might family has lived in this town a hundred years. I wouldn't feel like pulling up and taking another job in another town or in another city. If I was offered a job at this pay and it Boston nationally, I'd love it, but I don't see it. And as far as retraining is concerned, you hear a lot about it. I haven't seen any of it. We see that the private jobs come in here. There's no comparison, absolutely. We have two, you might say two bases. We live up to a rigid set of rules and we know that they don't. They're not required to. I don't see how you can compare them. If they want to allow us to, our standards to be lowered, we can do, we can do a job cheaper, cut and conscious. We're not allowed to do that. Every job we do here is supposed to be a hundred percent. That's not so in a private job. We know this because we have people who moonlight. In other words, they work in these private jobs nights, two or three nights a week. They're highly skilled. They know their business are naturally.

These private jobs grab them. So when they say that there's two standards, definitely. So we're supposed to economize and get here to rigid standards. On the other hand, they claim they can do a cheaper. If they allow us to drop out the standards. Right now, I brought to my attention to a recent magazine that Japan has a backlog of three million tons of shipbuilding. A lot of that has been sublet from the United States shipbuilding contract as two Japan. Their subcontracting was Spain, England and France. They're creating prosperity over there at the same time downgrading prosperity here. Creating unemployment and bringing France and Spain a little bit Japan away up. And I don't think it's fair. The technical and intellectual resources of the Massachusetts Institute of Technology have been responsible for bringing many defense contracts to the Boston area.

General James McCormick, a vice president of the Institute and president of the Chamber of Commerce, contrasts government operations with those in the private sector. Well, there are rewards and satisfactions of government service that can't be matched by industry, but by and large, they're not the sort of rewards and incentives that oil the years of production industry. Industry, even though I'd be working with government funds, has freedoms of action in managing its affairs, which are not allowed and are really not allowable in government service. There are incentives also in industry, competitive industry, that keep them running scared so people work harder. There are flexibilities of action also in selecting the talent that is most productive and paying whatever it takes to get it,

which government can't do on its own roles. Just as a generality industry is geared, motivated, philosophically adjusted to the sorts of things that industry does and these are by and large not government-type tasks. Now, there are many technological plans in the area, particularly around Route 128, which are very largely dependent upon department of defense contracts. Now, should we go into a much larger disarmament move, how do you think these companies are prepared for it? The sort of technologies that have been developed in defense work will in due course translate into many commercial civil applications into the general economy. Again, this text I'm doing, it'll take some time. But how will these firms be able to convert to commercial products or have commercial spin-offs?

The smart operator is thinking all the time about other applications of the new developments that are coming along in his company, whether in translation from military work to other government works such as space or the atomic energy commissions program, or whether in translation all the way from the sorts of things that the government buys and for all the practical purposes of monopoly market in, to the sorts of things that will sell generally over the counters and electronics and TV and communications tape recorded. But aren't there particular problems in developing and selling a commercial product that are quite different than making weapon systems for the department of defense? The government is buying against tolerances of a millionth of an inch and demanded lifetimes of a thousand crash uses and the housewife is buying against tolerances of a quarter of an inch. And if it's used ten times and thrown away, it's made its point. They're quite different markets.

Now, what about the regional pressures when a community learns that a base or an arsenal is going to close? There's not only congressional pressure put on the defense department in Washington, but there are all sorts of local delegations that go to Washington to plead their case. How does this affect the defense department? The President's Secretary seems to stand up pretty well under such assaults. Just off the route 128 complex circling the Boston area lies the Abco Corporation. Some 70% of their business is dependent on department of defense contracts. Doug Kenna, Abco's general manager on the company's prospects. The general role that we play is to project what the defensive systems will be able to do in the future and to design offensive systems that are capable of defeating the projected defensive systems. We do not see any diminution at the present time of the Russian defensive effort and as long as it continues as is currently

guest by our intelligence people, we expect to stay very actively involved in development of new kinds of penetration systems for the ballistic missile force. Let us assume that disarmament talks in the next few years do reach some point of fruition. How would this affect your company? Well, it would cause a complete reorientation in some phases of the company. We're working though in several areas that we think will be very large areas regardless of the military situation. The prime emphasis that we have here now in this division for the future is in the general area of planetary landing spacecraft. This is all, of course, part of the peaceful space program. These are extremely large programs from the standpoint of people required of technology required. And we think that this kind of work will go on for many, many years and it is not dependent generally on the international political situation.

Now, beyond that, we are actively developing, have been for several years commercial businesses, commercial applications for many of the things that have been derived from the military effort. Here in this particular division we have three new commercial businesses that we have started in the last two years that are basically outgrowth for the military work. So I think there's extreme enthusiasm here for doing this kind of work. We spend most of our waking hours designing systems that kill X millions of people at one fell swoop. So it's extremely refreshing for us to work on something that has the other sort of an end objective. Common problems bridge the 1,400 miles between Boston and Wichita, Kansas. Six years ago, the Boeing company employed 36,000 workers at its Wichita plant to make B-52s. Two bedroom houses rented for $175 a month

and workers slept in them in shifts. Today, fewer than 16,000 men and women are on the Boeing payrolls. The Air Force no longer is ordering new B-52s. Most of the unemployed have left town on to new defense work at Tulsa or St. Louis or back to the farm. Just how well has Wichita bounced back from the Boeing layoffs? We ask the chief editorial writer of the Wichita Eagle and Beacon, Martin Perry. Well, it's bounced back in a number of different ways. One thing I think you should remember is that these ups and downs in Wichita's economy go way back into our history. We have a history of being what one might call a boom in bust economy. We've had the cattle boom, we've had the oil boom, and we had the aircraft boom, and we had the defense boom. Now with Boeing accounting for some 44% of manufacturing in the Wichita area and with the recent disappointments they've had with the TFX contract

and the recently announced delay of the supersonic transport program, what would be the effect on the Wichita economy if Boeing cut back any further? Well, it could be serious. The fact that we have survived earlier cutbacks, which seem as though they might result in grass growing in the streets and this sort of thing, suggests to me, and I think to most responsible people in the community, that we can survive other setbacks also. We've done quite a good deal of groundwork in attracting new industry. There is an example of this. We have some other small acquisitions, bit by bit we're growing. The companies that are here are expanding. We added a million square feet of the plant space last year in existing companies

so that our economy is gradually becoming more diversified. Now admittedly, 44% is a large amount of defense industry. And if it all went by the board, we'd be in real trouble. I can't conceive of Boeing being completely wiped out in the near future. The bustle here on Boeing's Wichita flight line gives no hint of the hard fact that employment has dropped 50% in the last five years. Most of the remaining workforce still finds its fate tied directly to these B-52s, probably the last of this nation's mass-produced man bombers. Prospects for Boeing were somewhat frightened last week with the president's announcement that work on the supersonic transport would continue. Boeing official Herb Hollinger comments on the Wichita facilities' current status. Mr. Hollinger, could you tell me what kind of work Boeing is doing out here in Wichita right now?

Yes, we're modifying and modernizing the B-52s' status fortress for the United States Air Force. You're not building any more of them right now. No, the last B-52 came off the production line in the plant right over across the road here in 1962. And these airplanes here are in for the modernization as programmed by the Air Force. Is top management really thinking in terms of the day in which the aircraft business might be much smaller than what it is today? Well, that really is a rather difficult question to answer. We did take the name airplane out of our company name a few years ago. We're now known as the Boeing company rather than the Boeing airplane company, but yet this is not to say that we would overlook any possibility in the aviation field, in the aerospace field.

We're pretty generally committed in this broad area. In terms of company policy when workers are about to be laid off, how much notice can you give to people? And what can you do for them in terms of helping them out? Well, we always like to give just as much notice as possible, weeks if possible. Certainly several days there have been cases, of course, where we're talking in terms of hours. This depends on some rather sudden changes in military requirements. And when the word comes through that the contract has changed or that delivery schedules change, we have to adjust automatically. And unfortunately there have been times when the layoff notice has been eight hours, 16 hours, 24 hours. We avoid this naturally as much as we possibly can. You think that there is any way that possibly better planning could avoid this kind of harsh layoffs? Well, I suppose yes, better planning somewhere, but the question would be just where and who's planning?

The best place for effective planning to begin is at the local level. Grip Brown, president of Wichita's Chamber of Commerce, was asked if the Boeing company had given town officials adequate warning prior to previous mass layoffs. Yes, actually they started during World War II, saying now at the end of the war we're going to cut back because our contracts are only for the wartime period. And they did after World War II, they cut way back. Then the city still did nothing except more or less ring its hands. And within four years you know the Korean War came along and we were right back up on a war footing. Again Boeing warned the city that at the end of the Korean War Wichita had to do something to get diversified. And they did nothing. When this finally last cut back that we were discussing this morning in 1957, finally Wichita did something and started then this diversification program organized a convention office here through the chamber and set out to be a major competitor for tourist trade for example. In Washington Stern talked to Massachusetts congressman Bradford Morse about the role congressman play when their constituencies are affected by economic cutbacks.

Well there are several things that we can do number one. I think that we must to the full extent we can ensure that the industrial activities in my area receive its fair share of the defense production that's going to continue. In the years ahead that's point number one. On the other hand I think we've got to mobilize the thinking of people in the community and the federal establishment and the state government as well. Insofar as planning for the necessary conversion that is coming about and this is one of the things that I've been quite active in. Had there been any planning prior to these cuts? I'm sure that each of the companies has been aware of the economic hardship which the cuts would bring about. But the extent of the organized planning I cannot say I don't think there has been. We have an army of the new jobless men with one and two degrees highly educated people with great skills and great training who have found themselves in their early 40s or late 40s unemployed.

Their problem is the most difficult one and many of these people are coming to Washington. Many of them are going to teaching but many of them are finding nothing. I recall at the end of World War II the aircraft industry in Los Angeles in particular facing a very severe reconversion problem. We went into all sorts of things. Lockheed built prefabricated aluminum houses, North American went into the life plane business. Ryan, an aeronautical went into making aluminum coffins. Had a wonderful slogan for flying or dying sea rions. Well in due course the military orders built up again and they reconverted to the thing they did best. But they were scratching and in one way or another they were making it. Managers of defense plants seem perplexed about how to forge their nuclear aid swords into plowshares. Workers nurtured on arms money, sharing the burden and benefits of the arms race find it hard to believe that the Pentagon's economy drive may mark them as obsolete.

As a result the nation's armaments complex has shown little taste for long range conversion planning. But like it or not the defense squeeze is effect. Watertown and Wichita stand as a warning to those communities which would like to delay thinking about the unthinkable. Defense cutbacks do not mean an end to defense spending. Military preparedness will cost tens of billions of dollars for years to come. But when economy strikes some people and some communities get hurt. At stake immediately is easing dislocation and reconversion. Otherwise economics and politics will inhibit future cutbacks even when they are strategically sound. And possibly prevent major armaments slashes even when they are diplomatically feasible. The National Educational Television