View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

U N IT E D S T A T E S D E P A R T M E N T OF L A B O R
Frances Perkins, Secretary
BUREAU OF LABOR STATISTICS
Isador Lubin, Comm issioner (on leave)
A. F. Hinrichs, A ctin g Com m issioner

+

Reconversion Problems in the
Buffalo Industrial Area
Prepared in the

D ivision o f Productivity and Technological Development
W . Duane Evans, C hief

Bulletin 7\[o. 804
{R eprinted from the M

onthly

L abor R eview , December 19441

For sale by the Superintendent o f Documents, U. S. Government Printing Office
Washington 25, D. C. ' Price 10 cents




Letter of Transmittal
U n it e d S t a t e s D e p a r t m e n t of L a b o r ,
B u r e a u of L a b o r S t a t is t ic s ,

Washington, D. C,, December 19, 1944,
D,
1
The S e c r e t a r y of L a b o r :
pr<
I have the honor to transmit herewith a report on the reconversion problems
in the Buffalo industrial area. The survey, covering 40 companies which now
whic
provide about half of all jobs in manufacturing in the area, brings intc relief
into
many types of readjustment problems which must be met in the future.
This report was prepared by Celia Star Gody and Allan D. Searle, of the
Bureau's Productivity and Technological Development Division.
A. F. H in r ic h s , Acting Commissioner,
Commissi*
H o n . F r a n c e s P e r k in s ,

Secretary of Labor,

Contents
Page

Summary--------------------------------------------------------------------------------------------Buffalo industrial area_________________________________________________
Composition of sample covered in study________________________________
Current production and production plans_______________________________
Reconversion plans_______________________________________
Post-war production prospects--------------------------------------------------------------Post-war employment problems__________________________ - _____________
Effects of cutbacks_____________________________________________________
Suggestions for Government action— --------




(ii)

1
3
5
5
6
9
12
17
19

Bulletin 7\[o. 804 o f the
U nited States Bureau o f Labor Statistics
[Reprinted from the M onthly L ab or R e v ie w , December 1944]

Reconversion Problems in the Buffalo Industrial Area
Sum m ary

Anticipated reconversion problems and post-war production and
employment plans of manufacturers in the Buffalo (N. Y.) area were
studied recently by the Bureau of Labor Statistics. Buffalo is a
center of diversified heavy industry which has faced a labor shortage
throughout the war period. The survey, covering 40 companies which
now provide about half of all jobs in manufacturing in the area, brings
into relief many types of readjustment problems which must be met
in the future.
More than half of the surveyed plants can resume civilian produc­
tion without delay, as their war products are substantially the same
as their peacetime items. In the case of such firms, the principal
delay in providing employment may arise from market deficiencies
rather than technical reconversion problems. Only about one-fifth
of the plants will have to do a great amount of retooling, but some of
the largest employers are in this group. However, even where retool­
ing may take from 6 to 9 months, partial production can continue in
some instances.
Most company officials prefer that war orders be reduced gradually,
believing that this procedure will facilitate the orderly resumption of
civilian production and reduce the number of lay-offs necessary during
reconversion. About three-fourths of the plants can utilize economi­
cally, for the supply of civilian demands, any capacity released by
small cuts in war orders, but a few must be released from all war con­
tracts before conversion can be undertaken. All companies plan to
reduce working hours when the war is over, and only one small firm
contemplates a workweek in excess of 40 hours. Plants with sub­
contractors will cushion the impact of declines in production by cur­
tailing or eliminating such outside work.
More than a third of the companies have formulated marketing plans
or completed designs for civilian products. Six are planning entirely
new products, but in no case will pre-war items be entirely supplanted.
Although only a few plants need additional plant space to carry on
peacetime production, about half need some new machinery or equip­
ment, and several companies are definitely interested in purchasing
Government-owned equipment now in use.
Nearly all the companies expect production costs to be below present
levels but higher than during 1940. It is believed that wage rates will




(1)

2
remain at or near wartime figures but that overtime payments will
decline. Wartime increases in material prices are considered less
important than increased labor costs. At the same time, a number of
technological improvements which will partially offset higher labor
costs are reported.
About half of the companies anticipate the same volume of business
as before the war, some expect moderate gains, and only a few foresee
substantial increases. The outlook for several plants constructed
during the war is doubtful.
The surveyed companies were principally in the transportation
equipment, machinery, metals, chemicals, and stone, clay, and glass
industries. In 1939 these industries employed 74,000 workers in the
Buffalo area. Jobs for about 96,000 in these same industries after
the war are implied by the post-war plans of the surveyed companies,
as they are now formulated. This figure represents a substantial
increase from the pre-war level, but it is 26,000 under the goal of
122,000 jobs in the same industries set as an objective by the Niagara
Frontier Post-War Planning Council to insure full employment.
Women now constitute about one-third of the labor force in the
plants surveyed, but after the war the proportion is expected to be
only slightly above the pre-war level of 11 percent. Plants which
did not employ women before the war will generally not retain them
afterwards. Many women are expected to leave the labor market
voluntarily, and others will be displaced by returning veterans or laid
off in accordance with company and union seniority agreements.
All companies are planning to reemploy the men now with the
armed services. Some firms intend to go beyond legal requirements
in giving veterans special training, relaxing seniority rules, and making
special placement efforts, but many problems will arise. In several
plants, the number of former employees now in the armed services
exceeds total pre-war employment. Companies which have had
experience with returned veterans state that careful placement and
follow-up are necessary.
The firms surveyed are unanimous in recommending substantial
advance notice of contract reductions or revisions. All agree that
quick settlement of financial claims is essential; those with subcontracts
are especially concerned over possible delays. Prompt removal of
unusable Government-owned equipment and materials is urged.
Kapid but orderly removal of price, rationing, material, and manpower
controls is also recommended. Union representatives in the area
urge planning to insure full employment, including use of industry’s
tax refunds to meet this objective, and unemployment-insurance
programs to meet interim needs. They also suggest credits to foreign
nations to aid heavy industry in the United States.
Companies in the area will face a variety of problems in converting
to civilian production. Nevertheless, management officials state that
serious reconversion difficulties will not arise if the transition from war
to peace production is planned in an orderly manner. At the same
time, post-war employment may fall short of full-employment levels
if present company plans are not modified. Since this area is one of
diversified industry, its post-war position will probably be more
favorable than that of many other areas. This case study, therefore,
indicates the need for immediate Nation-wide planning if the generally
accepted goals of full employment of labor and resources are to bo




3
achieved. Evidently, full employment will not be attained without
a departure from thinking in terms of pre-war production volume and a
concerted attempt to develop policies which will promote a high level
of post-war production.
Buffalo Industrial Area

Manufacturing employment in the Buffalo region has doubled
during the war period. The area is a center of heavy industry and
produces a variety of basic products vital to the war program. In
addition, the automobile industry, always an important segment of
the area’s economy, has expanded greatly as a consequence of its
conversion to the manufacture of war goods— aircraft engines and
>arts for aircraft, ships, tanks, trucks, and shells. Finally, two very
arge aircraft plants are situated in the area,
Because of the great expansion in employment during the war period
and because of the diversification of industry, this region furnishes
an interesting case study of the problems which will be faced during
reconversion and afterwards. The Bureau of Labor Statistics,
therefore, at the request of the Statistics Division of the War Produc­
tion Board, undertook in June and July 1944 a study of the reconver­
sion problems and post-war outlook anticipated for the area.
Information was supplied by executives of 40 important manufac­
turing plants, representing about half of all manufacturing employ­
ment in the area, and by officials of trade-unions, employers’
associations, and Government agencies.
The Buffalo industrial area, consisting of Erie and Niagara Counties
in New York State, had a population of 958,000 in 1940. About 60
percent (576,000) of the total was in the city of Buffalo, which is an
important center for the manufacture of steel, automobiles, and
machinery. Niagara Falls (population 78,000), with its abundance
of electric power, has large chemical and electrometallurgical plants.
Other communities in the area are Lockport (24,000), Lackawanna
(24,000), North Tonawanda (20,000), Tonawanda (13,000), and
Kenmore (19,000).

{

INDUSTRIAL COMPOSITION OF THE AREA

In peacetime, manufacturing enterprises provided nearly 40, percent
of all employment in this area. M ost important were the manufacture
of iron and steel, which employed about 25,000 workers in 1939;
chemicals (13,000); machinery, including electrical (12,000); and
automobiles (10,000). Employment was also substantial in the
manufacture of paper products and stone, clay, and glass products.
Buffalo is a large flour-milling center and has other sizable food in­
dustries.
In 1940, more than 40 percent of the workers in the area were
employed in trade and service industries serving local needs, and
nearly 10 percent were in transportation and utilities. Agriculture
was relatively unimportant and accounted for less than 4 percent of
total employment in 1940.
Although local residents take pride in the fact that Buffalo’s
industries are not “ war babies,” the employment in new war plants
is very large. The area’s two largest aircraft plants alone employ a




4
substantial proportion of the total in all manufacturing and, in addi­
tion, there are several smaller new war plants which manufacture
machine guns, landing craft, and other direct war products.
WARTIME CHANGES IN EMPLOYMENT AND LABOR FORCE

Figures compiled by the New York State Department of Labor
from unemployment-insurance reports show that total insured employ­
ment in manufacturing industries jumped from an average of 138,000
during the year 1940 to 256,000 for the year 1943. No adequate
statistics are available for nonmanufacturing employment, but the
indications are that the increase during the war period has been small.
Despite the great advance in employment from peacetime levels,
there has been scarcely any increase in the civilian population of the
area. Estimates of the civilian population in November 1943, based
on registrations for War Ration Book 4, were only 4,000 above tho
figure reported in the 1940 Census of Population. It is believed that
persons moving into the area have numbered about 70,000, of whom
30,000 were in the labor force. The U. S. Employment Service
estimates that about half of these in-migrants will remain in the
area after the war.
The Negro population of this region is small, but there has been
some increase during the war period. In 1940 the number was 21,000.
The latest available estimate (generally considered a maximum) is
27,000, or less than 3 percent ot the total.
Buffalo has expanded its industrial activity largely by recruiting
women into the labor force, and its record in this respect is noteworthy.
In March 1940, about 26 percent of all women over 14 were in the
labor force. The U. S. Employment Service estimates that, in March
1944, 51 percent of all women over 14 were gainfully employed.
Women hav6 gone into lighter work in war plants, for the most part.
The heavy industries have not been able to draw on this source of
labor to the same extent, but some women are employed even in the
open-hearth and blast-furnace departments of steel mills, and sub­
stantial numbers are in chemicals, rubber, and machinery plants.
LABOR SUPPLY AND DEMAND

The Buffalo area has suffered an acute labor shortage throughout
the war* period, and the War Manpower Commission established a
controlled-referral plan as early as July 1943. Women were exempt
from the original plan, but were included after June 4, 1944, when
labor controls were tightened to provide a system of labor priorities
with definite plant employment ceilings.
The local U. S. Employment Service office estimates that in June
1944 the labor shortage amounted to 12,000 workers, excluding the
requirements of agriculture and construction. This figure is somewhat
less than those given for earlier months, and there are other indications
that the situation is becoming less critical. The shortage is more
pronounced in the heavy industries— especially steel foundries and to
some extent chemicals plants— than it is in the so-called “ glamor
plants” (such as aircraft) where the work is light and wages are
relatively high. Most of the manpower reserves— the unemployed,
women, in-migrants, and older workers—have already been utilized




5
and some workers are transferring to nonwar occupations or leaving
the labor market. The Employment Service estimates that approxi­
mately 700 women per month are currently leaving war industries,
about half for nonwar jobs and the other half to return to their homes.
Composition o f Sample Covered in Study

This report is based largely on interviews with representatives of
40 manufacturing plants, 36 of which were in existence in 1939. In
that year, the 36 plants accounted for 39 percent of the total number
of employees in manufacturing establishments reported by the Census
of Manufactures for the area. The 40 sample plants represented
approximately half of total manufacturing employment in May 1940.
The plants in the sample employed nearly 60 percent of all the
workers in the important metals and machinery industries in 1939.
The study’s coverage, in terms of 1939 employment, was virtually
complete for the automobile industry and amounted to 46 percent for
other transportation equipment. In the manufacture of iron and
steel, normally the largest industry group in the area, the sample
plants represented 66 percent of total 1939 employment; in nonferrous
metals, 47 percent; and in machinery (including electrical), 42 percent.
There was also substantial coverage in the manufacture of chemicals
(57 percent of 1939 total employment), and stone, clay, and glass
products (55 percent).
No companies were included in industries producing goods largely
for local use or in industries (such as those producing food, clothing,
leather, and wood products) in which wartime conditions have not
required substantial changes. Most of the plants canvassed were
fairly large employers. Among the sample plants, as in the area as a
whole, there were few producers of consumer durable goods other
than automobiles. Since reconversion problems for such producers
are different from those of plants producing basic materials and from
those of new war plants, the problems anticipated in this area may
not be completely typical of those which will arise in other sections
of the country.
Current Production and Production Plans
TYPE OF PRODUCT

Practically all of the plants included in the survey are producing
goods which directly or indirectly are for war use. Prime contractors
manufacture aircraft, guns, aircraft engines, and landing craft.
Other companies manufacture components for war items or supply
industrial equipment vitally needed in war plants. Among such
products are steel ingots and rolled steel, copper and copper-base
alloys, ferro-alloys, heat-transfer units (for ships, aircraft, and tanks),
aircraft parts, basic industrial chemicals, and war chemicals.
Although the products manufactured are essential in the war pro­
duction program, in the majority of plants they are similar to those
produced before the war. In general, plants producing chemicals,
rubber, stone, clay, and glass products, and basic metal products
have not changed their output substantially. Fabricators of metal
products and producers of machinery have changed specifications




6
somewhat, but are not making entirely new types of product. In
many cases, designs have been changed or war goods have been added
to other production.
The greatest changes in output have occurred in establishments
which produced automobiles and other transportation equipment
before the war and in the one plant which produced radios. Two
automobile plants are producing aircraft engines; a manufacturer of
automobile accessories has continued the manufacture of its peace­
time product but is also producing gun components. The radio
company is now producing radio transmitters and receivers for milltary use instead of receivers for automobiles and homes.
EXPECTATIONS AS TO WAR PRODUCTION

Most of the plant officials interviewed believed production schedules
would remain unchanged through the end of 1944. Commitments
were extremely variable, however, since some companies had long­
term contracts while others had a number of small contracts ending
at different dates. In many plants, definite production schedules
are not set in advance.
In six plants it was expected that production would decline sub­
stantially during 1944 or early in 1945. Most of these plants, which
together employ about 7,500 workers, are engaged in the manufacture
of components for ships. The largest company of the group, a pro­
ducer of aircraft parts, had already experienced cutbacks in produc­
tion schedules and anticipated further reductions.
Although most plants expected no substantial change in production
schedules during the remainder of 1944, the outlook for 1945 was, in
many cases, uncertain at the time of the interviews. However, two
producers of basic metals expected that there would be no change in
the volume of output for some time to come and a number of plants
producing nonwar commodities (paper, rayon, stone, clay, and glass
products) also expected that production levels would remain unaltered.
Many plants reported that more war business was available to them
than could be handled with their facilities, and frequently the lack
of manpower was the most important factor limiting production.
Reconversion Plans
RESUMPTION OF CIVILIAN PRODUCTION

Approximately three-fourths of the plants included in the sample
can utilize economically, to supply peacetime markets, the capacity
released by any small cut in war orders. The majority of these plants
are making their pre-war products, and hence no problem of allocation
of capacity between war and peace production is involved. A few
plants which have devoted all or part of their capacity to new war
items would also be able to schedule some civilian production if war
production declined even a small amount. One manufacturer of
automobile components could use the manpower freed by a 10 to 15
percent cutback in war orders to establish 3-shift operation on its
commercial assembly line. If the reduction in war output at this
plant amounted to 25 to 40 percent, however, civilian production
could not be undertaken for 90 days, and if the cut were larger, for
8 or 9 months.




7
One-fourth of the plants would not find it financially profitable to
convert any part of their facilities to civilian production unless war
production were substantially reduced. In one case, a 75-percent
reduction in war demand would be necessary to make feasible the
production of peacetime items, as the entire plant would have to be
rearranged and new equipment acquired. Two shipbuilding com­
panies would not “ break even” with less than a 50-percent drop in
war work, but would undertake the production of civilian goods with
a smaller decline in war output in order to obtain good will. In two
plants whose continued operation after the war is uncertain, all war
production would have to cease before civilian items could be
scheduled.
INDUSTRY PLANS

The managements of almost all plants visited have devoted some
thought to problems that may arise as war demand tapers off. There
is considerable variation, however, in the degree to which actual plans
have been formulated for resumption of peacetime production. More
than half of the plants need no definite programs for reconversion,
since their war products are essentially the same as their pre-war
products. In some of these companies, although no definite plans
have been made for post-war production, research staffs are engaged
in developmental work on new products. The principal firms in this
category are the chemicals plants, whose major post-war problem will
be that of markets. Establishments normally dependent on the
automobile industry will generally have to retool in order to resume
civilian production, but they are unable to make definite reconversion
plans until the situation in the automobile industry is clarified. They
are proceeding on the assumption that the first post-war cars will be
replicas of pre-war models.
Approximately a third of the plants have taken definite steps either
to develop new products or to plan marketing methods and develop
sales outlets. Only 6 companies expect to enter into the production
of brand-new items, and in no case will new items entirely supplant
pre-war products. Engineering is well advanced for such items as
steel desks, automatic window raisers for automobiles, and air-con­
ditioning equipment. Among other items planned are aluminum bus
and passenger-car bodies, and specialized cargo vessels and tugs.
Reconversion plans are not limited to the development of new types
of products, however. One radio company has completed a survey
of pre-war material suppliers to ascertain possible post-war prices.
Another plant has completed engineering on a new type of diesel
engine for post-war use and is attempting to get orders for post-war
deliveries of this and other engines. A small shipyard is designing a
line of power cruisers similar to its pre-war pleasure craft; it expects
to begin experimental building soon, having already obtained clearance
on materials. Marketing plans have been discussed and plans made
to level off seasonality of production and to maintain steady employ­
ment and high weekly earnings.
RECONVERSION PROBLEMS

Retooling will be a significant factor in only about a fifth of the
plants included in the sample, but some of the largest employers are
624113-45-----2




8
included in this group. Most of the plants in the automobile industry
will be compelled to do considerable retooling before production of
automobiles or parts can be resumed to any significant extent. Other
plants will have to retool before new products can be made.
In addition, there are problems involving disposition of Governmentown ed material, equipment, and facilities; acquisition of scarce materi­
als and components; and recruitment of sufficient manpower. In one
large war plant, almost all facilities are owned by the Defense Plant
Corporation, a factor which inhibits post-war planning. Several
other companies, including two shipyards, have Government-owned
machinery or materials which will have to be removed before civilian
production can be resumed. Availability of such materials as rubber,
steel, tools, fractional-horsepower motors, lumber, and boat accessories
wifi determine when some companies can resume peacetime operations.
Apparently, advance notice concerning availability of materials
would facilitate planning of civilian production. Recruitment of
manpower is expected to be a problem only if civilian production is
resumed during the war; adequate labor supplies will be available
afterward.
Company officials generally emphasized that reconversion will not
present serious problems if there is a gradual transition from war to
peace production. If all war production were ended suddenly,
difficult readjustment problems would arise.
TIME REQUIRED FOR RECONVERSION

Plant estimates of the time required to reconvert vary, ranging up
to several years. Average reconversion time, in cases in which re­
tooling is necessary, will probably be about 6 to 9 months, but some
plants could continue production during this period. Plants in the
automobile group can reconvert in from 3 to 9 months. Production
of certain new items contemplated by a few companies would require
a consideiably longer period. In general, reconversion for the
manufacture of pre-war items will require substantially less time than
the change to production of new products; for example, one plant
which can produce its pre-war item in 3 weeks would require 6 months
for a new product—steel desks.
Plants manufacturing their pre-war items during the war could, of
course, schedule civilian deliveries without delay and production
would be limited primarily by markets. Almost all plants in the
heavy industries (steel and chemicals), as well as several others, can
continue uninterrupted production. The shipbuilding companies can
resume normal production about 2 weeks after the yards are cleared
of Government-owned materials. The producers of nonferrous
metals would require a few weeks for reconversion, but one of them
could make the transition to civilian production with no delay if
foundry patterns for civilian products were made while war produc­
tion continued.
COMMUNITY PLANNING

Post-war planning on a community basis has been initiated by
business and civic organizations and by several labor unions. The
Niagara Frontier Post-War Planning Council includes representatives
of local government, business, and social agencies, and has prepared




9
a comprehensive study of the employment goals necessary for each
industry if full employment is to be attained. The Buffalo Chamber
of Commerce has a post-war planning committee which works closely
with the Niagara Frontier Planning Council and the local Committee
for Economic Development. Some city improvements are also being
considered, and a study of housing needs has been made.
Post-war planning by labor unions takes the form of adapting
national plans to local conditions. The national office of one C. I. O.
union is distributing questionnaires to all locals, requesting informa­
tion on reconversion and post-war problems. The locals in Buffalo
are cooperating and, in addition, have formed a subcommittee to work
with the union’s New York State committee on post-war planning.
Other union plans include the drive to obtain annual wage guaranties
and efforts to maintain weekly “ take-home” pay after the length of
the workweek is reduced. The Industrial Union Council of the
C. I. O. was contemplating the organization of a post-war planning
committee, but plans were still in the initial stages at the time of the
survey.
P ost-W a r Production Prospects

As already indicated, the types of products which will be manu­
factured in the post-war period will generally be the same as those
made before the war, and only a few companies plan to enter into
the manufacture of completely new items. New designs and new
models will, however, eventually be introduced, and several companies
report that improvements will be made in the quality of their products.
SPACE AND EQUIPMENT

Very few of the companies surveyed expect to expand plant space
after the war, and, in these, the additions will apparently be modest.
On the other hand, 22 of the 35 companies which are in a position to
assess their post-war needs report that some new equipment will be
acquired. In some cases, these purchases will represent only normal
or accumulated replacement needs. A few companies, however, plan
fairly extensive additions. One metals plant expects to install a
new bar mill; another may add a rod mill. Other plants will purchase
machine tools, foundry equipment, and welding instruments.
A number of companies indicated that they would have a definite
interest in purchasing some of the Government-owned equipment now
in their plants, if prices were satisfactory. One large company would
prefer to rent Government-owned equipment, with the fee based on
the number of hours the equipment is used, since it would not be in a
position to pay full rental value immediately following the war.
LEVEL OF PRODUCTION

Among the plants which provided estimates of the level of post-war
production, those whose normal products are automobiles and parts,
machinery, and radios were the most optimistic on the probable
outlook. An automobile company, for example, indicated that opera­
tions may be maintained at the present rate, even though employment
has nearly doubled during the war period. Plants manufacturing
chemicals and metal products foresee moderate advances in produc­




10
tion over pre-war records. Companies in the remaining industry
groups generally anticipate that post-war operations will be at about
the same rate as in 1940.
In all, 31 plants were able to furnish rough estimates of post-war
production levels. Sixteen of these plants anticipate that production
will be about the same as in the pre-war period, and 13 expect increases
of varying amounts: 3 anticipate advances of 20 to 25 percent over
pre-war levels, 5 expect even larger increases, and 5 state only that
production will be “ greater” than in 1940. Two plants which were
not in operation in 1939 expect to continue production after the war,
with sharply reduced volume.
Three of the plants visited may not remain in operation when war
production ends. The plant space used by one small company is
leased and will be returned to the owner company after the war. In
the other two cases, all facilities are Government-owned, and the
prospects for post-war operations are indefinite.
PRODUCTION COSTS

Nearly all the plant officials interviewed expressed the opinion
that post-war production costs would be above pre-war levels, but
few were able to estimate the extent of the increase. The most
important factor contributing to higher costs is expected to be the
rise in wage rates. It is generally believed that there will be no decline
in wage rates after the war, and several management representatives
expressed the opinion that there should be no such reductions. Costs
of materials were also reported to have advanced substantially,
although the increase is generally considered to be less important
than the rise in wage rates. In several cases, administrative expenses
have risen during the war period.
In most plants, production costs will probably be below present
levels, however. Premium payments for overtime work and for the
second and third shifts will be eliminated or substantially reduced.
In addition, company officials believe that the efficiency of the avail­
able labor force will be increased. On the other hand, a few plants
reported that the expected reduction in volume will result in higher
costs per unit of output, since overhead costs are a significant pro­
portion of total costs. These companies maintain that prices will
have to rise above present levels.
In only 4 plants is it anticipated that costs will be below the 1940
level, and in only one of these is a substantial reduction foreseen.
The declines are expected because of improvements in efficiency made
during the-war period.
WARTIME TECHNOLOGICAL DEVELOPMENTS

Part of the increase in wage rates and materials costs over peace­
time levels will be offset by improved efficiency resulting from wartime
technical developments. Although not all wartime developments will
be applicable to civilian production, moderate advances in efficiency
are expected in some instances. The improvements reported have
reduced labor requirements, lowered the costs of materials, or made
possible an improvement in the quality of the product.
Most significant have been the innovations in metalworking.
Improvements in welding techniques and substitution of welding for




11
riveting have resulted in improved efficiency. Alloys have been
improved and experience has been gained in welding alloyed materials.
Several companies state that quality control has been improved by the
use of electronic devices, including magna flux, gamma ray, and X-ray.
Experience gained in working to the close tolerances necessary on war
items will probably also prove of benefit in post-war production. Other
developments mentioned include greater use of tungsten carbide
cutting tools, stack drilling, the installation of automatic safety
devices on presses, the elimination of metal top dies by the use of rubber
forming blocks, and increased use of automatic machinery. In one
machinery plant which is producing essentially the same type of prod­
uct as in peacetime, output per man-hour has advanced 15 percent
since 1940. The rise is attributed to improved tooling, more complete
jigging, and the use of tungsten carbide cutting tools, as well as to
improved training of workers.
Knowledge of methods of working the light metals has made great
strides during the war period. A magnesium company reports that
labor requirements have been reduced and the amount of scrap
decreased by the development of superior molding machines and better
sand mixtures. In addition, better methods have been developed to
control the hazard of fire.
Improvements have also been made in processes other than metal­
working. Several chemicals plants, for example, report that there
have been technical developments which will carry over into peace­
time production, but few details are available.
A few companies stated that no significant technical developments
had occurred in their plants during the war period, but that they
hoped to make progress in this respect after the war. Some company
representatives believe that the machine tools available after the war
will be more efficient than those they now have, and expect increased
efficiency when new equipment is purchased. Research work being
conducted in some plants is expected, eventually, to be of benefit. In
at least one establishment, normal technical progress has been inter­
rupted during the war period because of the shortage of technical per­
sonnel and the difficulty of obtaining equipment and materials.
Not all wartime developments will be applicable to peacetime pro­
duction, however. Thus, very substantial gains have been made in
output per man-hour at one war plant, but most of the advance is
attributed to the large scale of production.
SUBCONTRACTING

A large number of the plants canvassed have been subcontracting
some of their work. In most cases, subcontracting will be eliminated
or sharply reduced after the war, and only two companies plan to
maintain the present proportion of subcontracting. Wherever pos­
sible, companies expect to reduce subcontracting, to weaken the impact
of future cutbacks, and some have already effected such reductions.
In many plants, subcontracting plays but a minor role in present
operations. The work sent out is usually machine-shop work which
could and would be done in the plant if facilities and manpower were
available. Such subcontracting will generally be discontinued or sub­
stantially curtailed when war production ends. Even some com­
panies which now subcontract a substantial part of all work will retain




12
only an inconsequential volume of subcontracting when war production
ends. Thus, one company which had subcontracted 70 percent of all
work, at the height of its production program, had reduced the pro­
portion to 30-40 percent as cutbacks were made; it is improbable that
any subcontracting at all will be continued by this plant after the
war. Similarly, a plant which now subcontracts work accounting for
75 percent of all expenditure on labor will continue very little sub­
contract work after the war.
Two companies expressed an interest in taking subcontract work for
new items after the war, if such work were available. In neither case,
however, had any definite plans for such work been made.
P ost-W a r Em ploym ent Problems
SIZE OF THE POST-WAR LABOR FORCE

Estimates of post-war employment prepared by plant officials are
necessarily tentative, depending as they do on expectations as to
general business conditions. Some of the company officials inter­
viewed were prepared to make rather definite estimates of their post­
war work force. Others, particularly those whose product is manu­
factured for sale to industrial users rather than to ultimate consumers,
were reluctant to express any judgment on the size of their post-war
labor force.
Rough estimates of post-war employment were available for 35 of
the 40 plants included in the sample survey. Plants in the transpor­
tation-equipment group (including automobiles and aircraft) expect
the greatest rise over 1939 employment— 63 percent— although
employment in aircraft will, of course, drop sharply from present levels.
Large advances over peacetime employment are also expected by
companies in the machinery (except electrical) group (49 percent) and
the stone, clay, and glass group (42 percent). The chemicals, nonferrous-metals, and electrical-machinery plants expect increases of 20
to 25 percent over 1939 employment levels. Iron and steel, the area’s
largest manufacturing industry in peacetime, will apparently have a
post-war labor force only 7 percent larger than before the war.
Spokesmen for local groups are generally optimistic about the
post-war employment outlook for the area. It is assumed that the
“ war babies” will present the only serious adjustment problems and
that the departure of women from the labor force will be sufficient to
prevent any widespread unemployment. Many other plants have
expanded enormously during the war period, however, and most of
them anticipate substantial reductions in force after the war.
It is interesting to compare the views on probable post-war employ­
ment expressed by plant officials with the estimates made by the Nia­
gara Frontier Post-War Planning Council on the employment goals
needed in manufacturing to provide full employment.2 The Planning
Council stated that 175,000 jobs would be required in manufacturing
if full employment were to be achieved, and presented a distribution
by major industry groups.
In several of the industry groups, the surveyed plants represented
a substantial proportion of total 1939 employment. For each of these
groups, the relative change in employment from 1939 to the post-war*
* Niagara Frontier Post-War Employment Goals (Buffalo, May 1943).




13
period, as judged on the basis of the plant interviews, was applied to
the total 1939 employment figure for the entire industry group as
given by the Census of Manufactures. The resulting estimates of
the numbers of post-war jobs implied by the present plans of employers
in each industry group, compared with 1939 employment and with
the Niagara Frontier full-employment goals, are shown in the accom­
panying table.

,

E m p loym en t in M an u factu rin g in B u ffa lo In d u strial A r m

[All figures in thousands]

Employment
in 19391

Industry

Transportation equipment (automobiles and other).......
Electrical machinery..... .....................................................
Machinery, except electrical...............................................
Iron and steel......................................................................
Nonferrous metals...............................................................
Chemicals.............................................................................
Stone, clay, and glass..........................................................
Total__________ __________________________
Other industries:

Paper
_ __ ___
Printing and publishing
_ ___
F ood __
Tpxt.ilas and apparel
W ood prodiiots
___ _ ......
Rubber
Petroleum, coal, and lpat.hp.r _
Miscellaneous _ _
Total

- -

______

. __

____

_

Post-war
employment
implied by
plant inter­
views 2

Full-employ­
ment goals *

15.6
4.9
6.9
24.9
2.9
12.8
5.6

25.5
5.9
10.3
26.8
.3.5
16.1
8.0

29.1
9.0
12.2
31.9
8.5
20.4
11.0

73.6

96.1

122.1

5.5
6.3
13.7
6.3
3.3
2.8
2.0
3.7

6.2
6.4
15.7
6.3
4.7
4.1
2.7
7.2

43.6

53.3

i Census of Manufactures, 1939.
* Obtained by applying to the figures shown in the preceding column the relative change in employment,
between 1939 and the post-war period, expected by the sample plants in each industry group. The sample
lants in the machinery (except electrical) group accounted for 28 percent of total employment in the group
i 1939. In the other industry groups employment in the reporting plants ranged from 46 to 66 percent of
the group totals reported by the Census of Manufactures for 1939.
*Niagara Frontier Post-War Employment Goals (Buffalo, May 1943).

S

It is apparent that the current plans of manufacturers, if carried into
effect without change, will yield greater employment in each industry
group than was recorded in 1939. For the surveyed industries taken
together, the estimated post-war figure is 96,000 compared with a
1939 total of 74,000. On the other hand, it does not appear that in
any of the groups will present plans lead to employment totals as
great as those considered necessary by the Niagara Frontier PostWar Planning Council to insure full employment.
Several qualifications regarding these comparisons should be noted.
First, the plants were combined in broad industry groups and only a
sample number was canvassed in each. To the extent that other
plants may have differing plans and expectations, the comparisons
may be unrepresentative. New plants may come into existence after
the war which will provide additional employment opportunities not
taken into account above. On the other hand, there is some evidence
that the estimates made by plant officials tended to be optimistic and
that the plants with the best post-war prospects were those most
willing to furnish estimates. Finally, all the estimates are based on
company plans as they are now formulated, and these plans may be
modified at any time as circumstances justify such changes.




14
Even with these limitations, however, it appears clear that post­
war employment in the industries represented by the sample plants
is likely to exceed substantially the pre-war level. Whether this
increase will meet the objective of jobs for all those in the area seeking
employment is less certain. The Niagara Frontier Post-War Planning
Council estimates of the number of jobs required in these industry
groups are interrelated with its estimates of employment goals for
trade and service and for other manufacturing industries. The goal
set for total employment is based on assumptions regarding the number
of persons withdrawing from the labor force and migrating from the
area. To the extent that these assumptions are realized, current
plans may have to be revised, if the desired goals are to be reached.
EMPLOYMENT DURING RECONVERSION

The technical problems of reconversion will not be serious in most
of the plants visited. Most companies envision the possibility, even
the probability, of a smooth transition in employment from wartime
to post-war operations. A few companies, however, anticipate sub­
stantial reductions in force for periods varying from a few weeks to
several months. One company, for example, estimates that during
a 60-day reconversion period employment will be only 700, compared
with a full-production total of 2,200. Reductions in force of 50
percent are foreseen by a few other companies which will have to do
a great amount of retooling. Technical requirements will not be the
sole determiners of the size of the work force during reconversion,
however. In several plants the volume of employment immediately
following the completion of war production may depend more on the
amount of business in sight than on the technical problems of retooling.
LAY-OFF PROCEDURE

As lay-offs become necessary, seniority will generally determine the
order of termination. It is probable, however, that seniority will
be much less important in the chemicals industry than in other in­
dustries, as most of the chemicals plants in the survey either have no
union agreements or have agreements with independent unions that
do not stress seniority to the same degree as do nationally affiliated
unions.
Practically all of the plants included in the survey are covered
by union agreements. Of the 40 plants, 22 have agreements with
C. I. O. unions (2 were being negotiated); 4 have agreements with
A. F. of L. unions; 7 with independent unions; 2 with District 50
of the United Mine Workers of America; 1 has a C. I. O. union in the
office and an A. F. of L. union in the plant; and 1 plant recognizes
both an independent and an A. F. of L. union. In general, the agree­
ments with nationally affiliated unions specify that seniority shall
determine lay-offs, while those with independent unions give manage­
ment more latitude to use qualifications or ability as a criterion,
although a few of the companies concerned have adopted seniority as
a matter of management policy.
Almost all plants will reduce hours before significant lay-offs are
made; only one small company expressed a desire to maintain the
48-hour week to provide high “ take-home” pay. Other companies will
return to a workweek of 40 or fewer hours as soon as permitted, as
an economy measure and to sustain employment.




15
SKILLS AND RETRAINING

When reductions in force occur, there will be many transfers from
job to job, and some retraining will be necessary. Management
officials anticipate few difficulties in effecting the transfers. On-thejob training will probably be the primary method used, and retraining
is expected to require from a few days to several months.
The skills required for post-war operations will be essentially the
same as those needed at present, since the nature of the product will
not change radically in most of the plants with the shift to civilian
production. Plants which have to do extensive retooling for peace­
time production will, of course, require toolmakers and skilled ma­
chinists, but in most cases the necessary workers are available. Where
shifts in skill requirements occur, they will sometimes be in the direc­
tion of greater skill, sometimes of lesser skill.
Although no special retraining of the work force will generally be
necessary, a number of plants expect to continue training programs
introduced dining the war period. Some are planning to maintain the
essential features of the Training Within Industry courses after the
war, and some will continue other training programs. A number of
companies anticipate the need for special training programs for re­
turning veterans. One plant expects to retrain veterans in the war­
time training school established in the pattern shop. This school
has been used very successfully during the war to train vocationalschool graduates as patternmakers and machinists.
EMPLOYMENT OF WOMEN

Women employees constituted 32 percent of the work force in the
40 sample plants in M ay 1944. In those plants in operation in 1939,
the proportion was only 11 percent. Among the plants in the sample,
the change between 1939 and M ay 1944 in the percentage of women
was from 15.3 to 38.6 in transportation equipment, from 6.5 to 18.1
in chemicals, from 2.0 to 16.2 in iron and steel, from 3.3 to 13.2 in
nonferrous metals, from 5.7 to 19.3 in machinery (except electrical),
from 17.3 to 37.5 in stone, clay, and glass, and from 33.9 to 37.5 in
electrical machinery.
Practically all companies expect very great reductions in the
employment of women after the war. In nearly half the plants,
management officials would prefer to have a smaller proportion em­
ployed after the war than at present. In these establishments,
management officials generally consider the work performance of
men superior to that of women. The work involved in the manufac­
ture of chemicals, metals, and machinery is believed to be too heavy
for women, except as a war-emergency measure. Other deterrents to
employment of women are also noted. Most important is the fact
that while women are suitable for certain operations, they cannot be
transferred easily from one job to another if the necessity arises.
If the size of the labor force is reduced substantially after the war, it
will be necessary to have employees who can perform several different
jobs. A few plants pointed out that turnover or absenteeism was
higher among women than among men. State laws setting up
special standards relating to the employment of women are also cited
as reasons for discontinuing their use, particularly in chemicals, where
heavy lifting or use of dangerous chemicals is involved.




16
Even in companies which report that the performance of women
has been satisfactory, a reduction in the proportion of women is ex­
pected because of voluntary withdrawals from the labor market and
the return of veterans. In some of these plants, the percentage of
women will probably remain somewhat above the pre-war figure,
particularly where new operations have been developed during the
war to make possible a greater utilization of women. The manage­
ment of one company would like to have women employees to the
extent of 25 percent of the total and will keep this proportion if the
union will agree. A company whose peacetime product is automo­
bile accessories finds that women are better than men on small
assemblies.
It seems clear that many women will be released as the labor force
is cut and as veterans return, whether as a result of management
policy or seniority arrangements. Most of the women employees
have little seniority and, in addition, a few of the union agreements
permit or require the release of women regardless of seniority. One
agreement states that women are to be employed in the plant only
for the duration. Another permits the employment of women on
men’s jobs only during the war, and thereafter the consent of the
union is required. At a few plants, the union agreements provide
for separate seniority lists for men and women.
The proportion of women employees after the war, therefore, may
be only slightly greater than in the pre-war period. Of the plants
sampled, the most favorable employment opportunities will exist in
those industries which employed substantial numbers of women in
peacetime— paper, electrical machinery (especially radio), and, to a
less extent, automobiles. The Niagara Frontier Post-War Planning
Council estimates that after the war 34 percent of all women over 14
will be j-p the labor force, as compared with 26 percent in 1940.
Apparently, the manufacturers canvassed do not expect to offer very
greatly increased employment opportunities for women.
EMPLOYMENT OF NEGROES

Although the Negro population of this area is small, several plants,
particularly foundries and chemicals plants, employ substantial num­
bers. In some companies, no Negroes were employed before the war
and, in others, the number has increased during the war period.
These employees generally have little seniority and may be displaced
by returning veterans. Most plant officials reported that the work
performance of the Negro employees was satisfactory and that it
would not be company policy to release them. Of 11 management
representatives who ventured to make estimates of post-war employ­
ment of Negroes, 5 stated that there would be no great change and the
other 6 expected some decreases because of the necessity for reemploy­
ing veterans.
EMPLOYMENT OF VETERANS

Local agencies and company officials are devoting increasing
attention to the problem of reemploying veterans. Since a satis­
factory employment adjustment is not always reached immediately,
the local office of the U. S. Employment Service has been working
with employer groups on the problem. Conferences of employment




17
managers with a pyschiatrist, who speaks on the problems of reem­
ploying ex-servicemen, have been arranged. Practically every plant
official interviewed was emphatic in his conviction that everything
possible would be done to reemploy veterans when they returned.
A number of plants expect to go beyond any legal requirements in
rehiring employees who return from the service. In some cases, the
company will not insist that the application for reemployment be
made within 40 days after discharge, as provided by law, or it will be
favorably disposed toward hiring veterans even if they are not
former employees of the company. The union local at one plant ex­
pressed its desire to help rehabilitate any veterans who might need
aid, even to the extent of abrogating seniority arrangements. Plans
are being made by another company not only to rehire veterans but
to train them for better jobs if they are qualified, since the manage­
ment recognizes that morale problems may arise if men with good
service experience are placed in menial tasks.
An example of detailed advance planning on reemployment of
veterans is provided by a company which is considering the employ­
ment of a full-time coordinator to place and follow up war veterans.
A card index is being prepared, giving the case history of each man
in service and including any new skills learned since he entered the
armed forces.
It is recognized that a number of problems will arise. In some
plants, the number of employees in the armed forces is equal to or
greater than the total pre-war employment; in others, as many as 6
or 7 men now in the armed forces held the same job prior to induction.
In some establishments most of the work is heavy, and the jobs which
disabled veterans can fill are limited in number. Plants which have
already had experience with returning veterans agree that careful
placement and follow-up are essential, and many companies expect
that some retraining program will be necessary for returning veterans.
In one company, it was anticipated that very serious problems
would arise if the Selective Service Act were interpreted to give
veterans absolute preference. Management here believes that vet­
erans should accumulate seniority while in the service but should
have no other special preference. It was reported that the union’s
position agreed with that taken by management.
Effects o f Cutbacks
RECENT EXPERIENCE

While cutbacks in war production have not yet been serious, the
experience thus far serves to indicate the problems which may arise
when war production generally declines. At the time of the survey,
16 of the plants included in the sample of 40 had already had cutbacks
in production owing to cancellation or revision of war contracts.
(One company had had no cutback in the usual sense, but had finished
a large war program and reverted to its normal peacetime activity.)
Of the 16 plants, 11 were compelled to lay off workers; the others were
able to avoid terminations by transferring employees to other work.
In all, some 5,000 workers had been laid off by June 1944. About
two-thirds of those terminated had been working in 5 plants produc­
ing items for the aircraft program. Over 60 percent of the workers laid




18
off were women. Most of the lay-offs were temporary (for retooling)
and some workers had already been recalled by June 1944.
Notice of cutbacks varied from advance warning of several months to
orders for immediate cessation of work. In one instance, a subcon­
tract for half-tracks was eliminated almost entirely, without advance
notice from the prime contractor, who had himself received no notice
from the procurement agency. Plant officials generally expressed the
opinion that advance notice should be given whenever possible, and
the indications are that those plants which received notice a month or
more in advance were able to readjust both employment and pro­
duction more effectively.
LAY-OFFS AND TRANSFERS

Ten of the 11 plants in which lay-offs were necessary selected the
workers to be terminated on the basis of seniority. Plant-wide
seniority was the criterion used in half of these plants, and depart­
mental seniority or seniority by noninterchangeable occupational
groups in the rest. In nine cases seniority provisions were incor­
porated in union agreements; one company used plant-wide seniority
as a matter of company policy. In addition, one company laid off
workers as the operations on which they were engaged were completed,
in accordance with the provisions of a master contract with various
A. F. of L. unions.
Transfers of workers usually followed the same plan as lay-offs; in
some plants transfers were an important part of the employmentadjustment process. One plant eliminated its third shift, laid off
50 workers, and transferred 400; another laid off 100 and transferred
100; a third laid off 400 and transferred 200. In most instances,
transfers were made at the same rates of pay. In two plants in which
wage decreases were the rule, there was a tendency for workers to
quit rather than to accept lower wages, as further lay-offs were an­
ticipated and little security could be offered.
Transfers required training of workers in some instances. On-thejob training was most prevalent, lasting from 2 or 3 days up to 5
months. In general, no new skills were required and in most plants
the training period took only a few weeks.
Notice of lay-offs was inadequate in a number of plants, partly
because the employer had received insufficient advance notice of cut­
backs. Some of the plants gave only 1 day’s notice and one plant
gave notice at the beginning of the shift that lay-offs were effective
at the end of the shift. On the other hand, two companies gave a
week’s notice whenever possible.
Unions generally received notice of lay-offs farther in advance, and
in some cases the unions participated in implementing the lay-off
procedure. Most companies discussed the cutbacks and lay-off
procedures with the unions or with the labor-management committees,
but one company merely informed the union that there would be
lay-offs.
Effect on morale.— The effect of cutbacks on the morale of workers
apparently varied both with the nature of the cutback—whether
temporary or permanent— and with the degree of union-management
cooperation attained. In two plants with labor-management com­
mittees, morale did not suffer and at one of these plants production




19
per worker actually increased. The most serious effect of cutbacks
on morale was found at a plant where there had been no word to
workers concerning the cutbacks, the union did not participate, and
there was no labor-management committee.
Effect in the community.— There are indications that the cutbacks
already experienced have resulted in some decrease in community
purchasing power, as well as in withdrawal of workers from the labor
market. Union representatives expressed the opinion that lack of
planning for transfers of workers from plants which had reduced
production to plants which needed workers had resulted in lower morale
and the return of women to their homes.
Suggestions fo r Government A ction

Plant suggestions.—Management representatives were unanimous
in their emphasis on the desirability of speedy audit or settlement
of contract claims; one subcontractor recommended settlement on a
plant-wide rather than on an individual contract basis. Companies
also indicated the need for adequate advance notice from Government
to prime contractors, and from prime contractors to subcontractors,
of changes in specifications and of contract terminations. In general,
gradual tapering off of war demand was considered preferable to
abrupt termination. Such gradual reduction would alleviate surplus
material problems, allow adequate notice to subcontractors, unions,
and workers, and permit more orderly planning for civilian produc­
tion. Two companies suggested that cutbacks be made first in plants
which are able to convert to other production.
Generally, wherever Government-owned equipment or material
cannot be utilized for peacetime production, plants desire its removal
from the premises as soon as possible. Sale of usable Government
property at reasonable prices is desired by plants having such equip­
ment, but one plant would prefer to rent the plant space and equip­
ment from the Defense Plant Corporation. Some plants believe that
the price of Government-owned equipment should be maintained, as
its cheap disposal to competitors would foster “ unfair competition.”
Almost all of the plants making suggestions recommend that war­
time material, manpower, and price controls be removed as soon as
possible, but that relaxation be gradual. Kapid release of materials
to plants receiving cutbacks was suggested, and one plant recommended
that certain standard surplus materials be earmarked for post-war use.
Among other suggestions were recommendations for Federal aid
for municipal public works, improvement of the New York State
Barge Canal, and relaxation of restrictions on industrial and municipal
power projects. In addition, interest was expressed in modification
of present policies of contract renegotiation, so that the normal
product of a company would be exempt. Elimination of the excessprofits tax was recommended, to enable industry to accumulate
reserves with which to finance reconversion.
Union suggestions.—Union representatives, like management offi­
cials, stressed the importance of a smooth transition from war to
peace production. A C. I. O. union suggested closer integration of
Army and Navy plans for cutbacks with manpower controls, so that
persons released in one plant could be quickly transferred to plants
where workers were needed. A representative of an A. F. of L. union




20
suggested that the Government make immediate plans for reemploy­
ment of workers laid off by small plants—particularly machine shops—
since these workers may be laid off before the large prime contractors
are cut back.
Practically all union representatives emphasized the need to plan
for full employment. Legislation was urged to provide for adequate
unemployment compensation during reconversion, retraining pro­
grams, and payment of travel costs of workers from war centers to
their homes. The need of heavy industry for post-war markets was
stressed, and long-term reconstruction credits to other nations to
stimulate demand for steel and other products of basic industry were
suggested. The regional office of one union expressed the opinion
that industries should be able to finance reconversion from tax refunds
and that the Government should see that such funds are used to
assure maximum employment.




FCffiVICTORY
BUY
U N IT E D
STATES

W AR
BON D S
AND

STAMPS

« . f . SOVUtHHKNT PR INTIII® O F F IC tiIM t