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L 1 .3 .'
TECHNOLOGICAL
TRENDS IN MAJOR
AMERICAN INDUSTRIES
Bulletin No. 1474
UNITED STATES DEPARTMENT OF LABOR
W. Willard Wirtz, Secretary
BUREAU OF LABOR STATISTICS
Arthur M. Ross, Commissioner
TECHNOLOGICAL
TRENDS IN MAJOR
AMERICAN INDUSTRIES
Bulletin No. 1474
F e b ru a ry 1966
UNITED STATES DEPARTMENT OF LABOR
W. Willard Wirtz, Secretary
BUREAU OF LABOR STATISTICS
Arthur M. Ross, Commissioner
For sale by the Superintendent o f Documents, U.S. Government Printing Office, Washington, D.C. 20402 - Price $1.50
Preface
This bulletin appraises some of the major technological changes emerging
among American industries and projects the impact of these changes over the next
5 to 10 years.
The Manpower Development and Training Act of 1962 requires the Secretary
of Labor to “ evaluate the impact of and benefits and problems created by automa
tion, technological progress and other changes in the structure of production and
demand on the use of the Nation’s human resources; establish techniques and
methods for detecting in advance the potential impact of such developments; . .
This publication helps meet that requirement by evaluating the general effects
that current and probable future technological developments will have on patterns
of employment, occupations, and issues requiring labor-management adjustment.
It extends and updates the report, Technological Trends in 36 Major American
Industries, which was issued in 1964 for the President’s Advisory Committee on
Labor-Management Policy.
The bulletin was prepared in the Division of Technological Studies, under the
direction of Edgar Weinberg, Chief, as part of the Bureau’s research program on
productivity and technological developments under the general direction of Leon
Greenberg, Assistant Commissioner. The reports on individual industries were
written under the direct supervision of John Macut, Chief, Branch of Innovation
Studies and John Shott, Chief, Branch of Industry Outlook Studies. Staff members
who prepared studies of various industries were: Robert Adams, Robert Ball,
Robert Barry, Gordon Chapman, Audrey Freedman, Arthur Herman, Richard
Johnson, Stephen Keyes, Richard Lyon, Richard Riche, and Rose Zeisel. Susan
Casher and Mable Elliott assisted in the preparation.
Also utilized in the preparation of this report was manpower research conducted
as part of other Bureau of Labor Statistics’ programs, especially in the Division of
Manpower and Occupational Outlook, Sol Swerdloff, Chief, and in the Division of
Economic Growth, Jack Alterman, Director.
Preparation of this bulletin could not have been accomplished without the
assistance of hundreds of experts in companies, government agencies, trade associa
tions, trade journals, unions, and universities, who patiently and carefully answered
queries and reviewed preliminary drafts. The Bureau of Labor Statistics is deeply
grateful for their cooperation and aid.
Credits for published photographs are listed below: American Cement Co.,
American Gas Association, American Machine and Foundry Co., American Tele
phone and Telegraph Co., American Trucking Association, Atomic Energy Com
mission, Atomics International, Bucyrus-Erie Co., Cincinnati Milling and Grinding
Machines, Inc., Crompton and Knowles Corp. and Leesona Corp., Firestone Tire and
Rubber Co., General Motors Corp., Great Lakes Steel Corp., Greenlee Brothers and
Co., Guntert and Zimmerman Construction Division, Inc., Honeywell, Inc., Illinois
Central Railroad, International Paper Co., International Typographical Union,
Kaiser Industries, Metropolitan Life Insurance Co., Monsanto Chemical Co.,
National Forest Products Association, Phoenix Cement Co., Port of New York
Authority, Shaake Packing Co., Inc., The Sheffield Corp., The Southern Railway
System, Unit Rig and Equipment Co., and Willcox and Gibbs Sewing Machine Co.
iii
Contents
Page
Part I. Introduction ______________________________ __________________________________________ .
Meaning of technological change_______________________, ________________________________
Technological change, productivity, and employment
_____ ___________________________
Technological development in perspective____ ____________________________________________
Part II. Summary and implications _________________________________________________________
Summary of major trends__________________________________________________________________
Some implications of technological changes ____________________________________________
Part III. Scope, method, sources, and limitations ____________________________________________
Scope of reports____________________________________________________________________________
Method of preparing technological forecasts______________________________________________
Sources of statistical data and projections_______________________________________________
Limitations and qualifications______________________________________________________________
Part IV. Industry reports
___________________________________________________________________
Mining:
Copper ore mining________________
Bituminous coal mining_______________________________________________________________
Crude petroleum and natural g a s . ___________________________________________________
Contract construction _____________________________________________________________________
Manufacturing:
Durable goods:
Lumber and wood products (except furniture) ________________________________
Furniture and fixtures________ _________________________________ : _______________
Glass containers__________________________________________________________________
Hydraulic cem ent________________________________________________________________
Concrete, gypsum, and plaster products_____ ____________________________________
Iron and steel_____________________________________________________________________
Foundries_________________________________________________________________________
Aluminum ________________________________________________________________________
Electrical machinery, equipment, and supplies__________________________________
Motor vehicles and equipment____________________________________________________
Aircraft, and missiles and space vehicles_______________________________________
Instruments and related products_______________________________________________
Nondurable goods:
Meat products____________________________________________________________________
Dairy products___________________________________________________________________
Flour and other grain mill products_____________________________________________
Bakery products_________________
Malt liquors______________________________________________________________________
Tobacco products________________________________________________________________
Textile mill products______________________________________________________________
Apparel __________________________________________________________________________
Pulp, paper, and board___________________________________________________________
Printing and publishing__________________________________________
Synthetic materials and plastics products_______________________________________
Petroleum refining_________________________________________________________ J____
Tires and inner tubes________________
Footwear (except rubber)________________________________________________________
Transportation:
R ailroads______________________________________________________________________________
Motor fr e ig h t _____________
Water transportation ________________________________________________________________
Air transportation____________________________________________________________________
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Contents— Continued
Page
Part IV. Industry Reports— Continued
Communications and utilities:
Telephone communication_____________________________________________________________
Electric power and gas__________________________________________
Wholesale and retail trade_________________________________
B a n k in g ____________________________________________________________________________________
Insurance ca rriers_________________________________________________________________________
Federal Government____________
Part V. Selected bibliography
___________________________________________________________
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Technological Trends in Major American Industries
PART I. INTRODUCTION
This bulletin provides information about sig
nificant developments in technology in major
American industries.
Historically, the introduction and use of new
products, machines, methods, and materials
have resulted in economic and social g" ns, but
such technological innovation also has affected
employment levels, and skills and job security
of employees. Advance knowledge and under
standing of impending technological change
could help companies, unions, and government
to formulate in advance appropriate retrain
ing and readjustment policies to minimize its
disrupting effects on individual workers.
The basic definitions and concepts of techno
logical change and its relation to productivity
and employment are presented in the introduc
tion. Part II summarizes broad technological
developments and their implications. Part III
presents the methods of analysis, the limitations
of the study, and sources of information. Part
IV comprises the 40 reports on major indus
tries. Part V presents a bibliography on tech
nological change, and manpower trends and
adjustments.
gineers. Inventions are developed, tested, and
evaluated by industry before they are put on
the market. The adoption period is the most
significant period in terms of economic impact.
Industry’s acceptance of an innovation is
neither automatic nor immediate. Expected
savings over existing technology must be large
enough to induce the first users to invest in the
new equipment. Once profitability of the new
process or product is proven, acceptance by the
bulk of the industry accelerates. In practice,
adoption of an innovation in an industry
depends on many nontechnical factors, invest
ment decisions by individual firms being in
fluenced by market prospects, competitive con
ditions, capital requirements, character of
management, union attitude, government codes
and regulations, and other factors. Thus, the
pace of technological change is closely related
to the rate of gross investment, the level of
economic activity, and the changing structure
of production and demand.
Technological
Change,
Employment
and
The rate of technological advance (including
small as well as major improvements in ma
chinery and managerial arrangements) gener
ally is measured in terms of productivity, cus
tomarily output per man-hour. Increased output
from given inputs means rising productivity.
While technological change is the most impor
tant factor in the growth of productivity, it is
not the sole factor. The trend of productivity
is also influenced by nontechnical factors, such
as rate of capacity utilization and long-term im
provements in skill and education level of the
work force, and in the ability and knowledge of
management.
Gains as well as losses in employment may
result from the introduction of machinery even
if the direct effect on a specific operation is la
bor saving. The innovation may reduce total
unit cost to such an extent that sales increase
M e a n in g o f T e c h n o lo g ic a l C h an ge
In this study, the term “ technological change”
means the introduction of new arrangements
in the process of production and distribution
which make possible new or improved products
or services. The basic characteristic of techno
logical change is that it permits resources to be
utilized more efficiently. For a given amount
of output, less capital, labor, and material in
puts may be required; or the same amount of
resources may allow greater output to be pro
duced.
The introduction of new machines, processes,
or products also can be considered as a step in
a sequence that extends over a fairly long
period. The accumulation of knowledge, un
derlying technological progress, represents the
work of many scientists, inventors, and en
Productivity,
1
2
more sharply than the reduction in unit labor
requirements or may'permit work to be done
that hitherto was uneconomic. In these cases,
additional employees are required.
Job losses may result in other instances be
cause of inability to expand sales sufficiently.
Changes in consumer’s technology or inroads
of competitive materials or products may result
in lower sales and add to the number of work
ers displaced. In some cases, the total number
o f jobs may be reduced but the company may
retrain and reassign workers to other vacancies.
Under competitive conditions, firms that make
cost-cutting changes may expand their share
of the market but at the expense of higher cost
plants which may be forced to close.
In all cases, expanding levels of economic
activity facilitate overall adjustment to lowered
manpower requirements in a plant or industry,
since displaced workers are better able to find
new employment in other expanding plants. On
the other hand, declining business activity in
creases the difficulties of adjustment because
fewer employment opportunities are available
to displaced workers.
Over the longrun and for the entire economy,
output generally has increased with advancing
productivity. New products, processes, and
equipment have contributed to expansion of
investment, consumption, and job opportunities
by making cost reductions possible; living stand
ards have risen along with greater leisure for
the average worker. Over short periods, how
ever, employment opportunities have not always
expanded sufficiently to match the growth in
number of people seeking work, including those
workers displaced by laborsaving technology.
Unemployment resulting from such maladjust
ment is particularly aggravated when techno
logical change leads to higher skill requirements
and many of those who are unemployed lack
education and training. Expansion of total out
put and retraining are therefore keys to the
solution of unemployment problems.
Technological Development in Perspective
Three stages of development characterize the
continuing industrial revolution: The Age of
Mechanization began with the introduction of
power-driven machinery, the displacement of
the handicraft worker, and the rise of the fac
tory system. In the Age of Mass Production,
the factory worker’s job became a faster opera
tion; mechanical conveyors carried a highly
standardized product to the work place; power
production was transferred from steam-driven
shaft and belt systems for each factory to cen
tral electric power generating stations.
A third phase, an Age of Science and Tech
nology, which began after World War II,
emphasizes research and development by the
Federal Government and private corporations.
This research already has resulted in such un
foreseen developments as electronic computers,
nuclear energy, jet propulsion, space technol
ogy, and automation of industrial processes.
Continued rapid growth of population (and
markets), increasing foreign competition, and
pressure for higher living standards are stimu
lating ever greater efforts to increase output at
lower cost by improving technology.
Popularly, the term “ automation” is applied
to all types of technological change that econo
mize on the use of labor. The technical mean
ing includes automatic controls, electronic com
puters, highly automatic transfer machines, and
new methods of managerial organization. Auto
mation removes the worker from the direct,
step-by-step control of operations and increases
the importance of technical planners, programers, and engineers.
The future probably will be characterized by
a continuing emphasis on social innovations to
cope with problems raised by advances in tech
nology. Such innovations include improvements
in the education and training of young people,
measures for retraining and increasing the mo
bility of the labor force, and more adequate
provisions for maintenance of income of unem
ployed workers. The Employment Act of 1946
gives explicit consideration to measures to
achieve and maintain a high level of employ
ment. A third field of social invention involves
labor and management in the creation of new
collective bargaining approaches to deal with
problems of technological change. These and
other measures will constitute the social frame
work for future technological advances.
PART II. SUMMARY AND IMPLICATIONS
to the use of computers at numerous service
centers.
The technical possibilities of computers are
being extended constantly. The potential speed
and storage capacity of the latest computer
models are several hundred times faster than
earlier models. “ Third generation” computers,
now available in various capacity models, utilize
faster microcircuits instead of transistors.
Major advances in auxiliary equipment, such as
data communication systems, optical character
recognition machines, and high-speed printers
will make it possible to realize more fully the
potentialities of high-speed electronic data
processing.
Timesharing of computer programing— a
technique now being tested— would permit dif
ferent users in different locations to use the
same computer at the same time. The different
users communicate with a computer at the same
time, as in a telephone system. Timesharing is
particularly important in many scientific re
search and engineering applications where the
need for rapid calculation is critical but inter
mittent.
The ultimate impact of computers is open to
much speculation. The most extensive uses, so
far, are in large-scale routine data processing
operations such as accounting, billing, inventory
control, production planning and control, and in
scientific and engineering applications. Elec
tronic data processing also is being extended
gradually, where economically feasible, to opera
tions connected more directly with production.
Computers are used, for example, in the print
ing industry, to speed preparation of control
tapes which guide typesetting machines; in
crude petroleum and natural gas, to store and
retrieve information; in the automobile indus
try, to design and draft new car models; on
railroads, to keep account of the location of
freight cars; and by airlines, for intercompany
control of seat inventory; in oil exploration and
in construction, to schedule operations. Compu
ters are also used in process control industries
and with numerical control of machine tools—
applications which are discussed in sections
below.
Part II describes trends in nine broad areas
of technological innovation and discusses briefly
some implications. Although each of these areas
is considered separately, specific changes in any
one of the broad groupings are often related to
changes in others. Advances in transportation,
for example, involve electronic data processing,
instrumentation, communication systems, and
new materials handling concepts. The overall
contribution of each broad development cannot
be measured precisely; but some examples from
specific industries, described in Part IV, are
presented.
Summary of Major Trends
Computerization of Data Processing. The intro
duction and development of the electronic com
puter have resulted in far-reaching technologi
cal applications not generally anticipated when
the computer was invented 20 years ago. The
computer’s enormous capabilities are measured
by the amount of information it can store, the
number of basic instructions it can perform per
second, and the reliability of its operation. Be
cause data-processing operations are found in
a wide range of scientific, business, and indus
trial activities, the potential for productivity
gains could be significant.
The electronic computer was first used com
mercially for data processing in 1951. By mid1965, the total number of digital computer
systems installed, according to one unofficial
estimate, was about 25,000. Additional thou
sands are on order. The manufacture of elec
tronic data-processing equipment has become
a billion dollar industry, the value of shipments
in 1964 reaching about three times the 1959
value.
Electronic computers are being used in all
branches of industry, business, and govern
ment. Six industrial sectors have the bulk of
the installations: Federal Government, insur
ance, banks, and aerospace, electrical machinery,
and automobile industries. Most of the large
corporations in the United States have com
puters, and smaller businesses, for whom an
installation may be uneconomical, have access
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4
Greater Instrumentation and Process Control.
More precise and varied instrumentation ex
tends human sensory capabilities and opens new
possibilities for scientific advance and industrial
automatization. Complex and novel instruments
are necessary for launching and tracking satel
lites, for operating oceanographic laboratories,
and for constructing multimillion dollar electron
accelerators.
Advances in scientific instrumentation result
in improved industrial technology. New and
unusually sensitive devices, developed in labora
tories for measuring and controlling very high
temperature, vacuum or radiation, are making
possible extra high purification of metals, freeze
drying of foods, testing of space vehicles and
other new industrial processes. Examples of
new or increasing industrial applications of in
struments are X-rays and radioisotopes for in
specting castings in foundries, electronic de
vices for counting seeds and determining flour
particle size in flour milling, instruments for
detecting potential engine breakdowns in motor
freight and electronic inspecting devices to
check quality and weight in cigarette manufac
ture.
In process industries, instruments and in
tegrated systems of control devices to regulate
automatically chemical and physical changes in
liquids and gases are becoming a basic part of
plant design. Processing variables such as level,
flow, temperature, or pressure are measured
continuously and recorded, and held at desired
values by servomechanisms which open and
close valves and operate pumps under rigidly
controlled conditions. Centralization of all in
strument readings and controls in one control
panel achieves significant laborsavings.
Applications of centralized control instru
mentation are found in systems for regulating
pumps, tanks, and gathering lines in the crude
petroleum and natural gas industry; systems of
microphones, closed-circuit TV and X-ray spec
trometers in cement production; and X-ray
analysis and instrumentation for quality con
trol of the concentrator in copper mining.
As more quantitative knowledge is acquired
about the nature of various chemical processes,
and instruments are improved, process indus
tries are expected to use computers increasingly
for control. Complex computations based on
vast quantities of data from instruments can be
made rapidly and accurately on computers and
the results fed back to the operator who sets the
controls. A more advanced type of computer
process control known as closed-loop control
bypasses the operator and sets the controls au
tomatically. Improved quality and greater reli
ability, as well as savings in labor and capital
per unit of output are said to be possible.
According to a McGraw-Hill annual survey,
about 400 process computers, by early 1965, had
been installed in process industries, chiefly, pe
troleum refining; paper manufacturing; tex
tiles; steel mill finishing operations; chemical,
cement, and electric power plants; and oil
pipelines. Substantial growth is anticipated
with estimates for 1970 ranging from 1,500 to
4,000 installations. Less than a dozen closedloop control systems are being tested or are in
operation. Technical complexities, lack of en
gineering skills and cost are some obstacles to
more rapid growth.
Trend Toward Increased Mechanization. Im
provements in machinery that do not involve
drastic departure from conventional design will
continue to be an important factor in raising
productivity in many industries. Faster opera
tion, larger size, automatic loading and unload
ing devices, and automatic lubrication signifi
cantly reduce the amount of labor required per
unit of output. The integration of a number of
separate operations into one large specialized
machine which performs a long cycle of opera
tions with a minimum of intervention by the
machine tender constitutes a more advanced
type of mechanization.
Examples of greater mechanization are found
in many industries: faster textile machine
speeds with larger packages of stock; continu
ous steel casting machines that require one-half
the number of steps in conventional ingot cast
ing; machinery in meatpacking for continuous
production of frankfurters; tape controlled line
casting machines in printing; faster, larger ca
pacity machines in tire and tube manufacture;
railroad track maintenance equipment that
takes the place of two or more machines and
larger crews; and slip-form pavers combining
several operations that reduce the number of
laborers employed in highway construction.
5
Other examples are mechanical “ lumber
jacks” to cut trees in the lumber industry;
larger capacity stripping equipment in copper
mining; greater use of larger continuous coal
mining machines; and a machine that combines
a number of operations in shirtmaking.
As fabricating operations become highly
mechanized, new ways are sought to achieve
laborsavings in moving goods and materials
from one plant operation to the next. Mecha
nized materials handling often is introduced or
improved to utilize more fully the high speed
and large capacity of modernized fabricating
equipment. Sales of materials-handling equip
ment (conveyors, cranes, hoists, industrial
trucks, and elevators) are expected to amount
to about $2 billion in 1965.
Among the important improvements and in
novations in materials handling are more
powerful, faster and more maneuverable models
of forklift trucks, hoists, cranes (including
tower cranes) and larger earthmoving equip
ment in construction, pneumatic conveyors for
moving granular materials in bakeries, and a
combination of unmanned trucks with remote
computer control by large wholesalers, retail
depart?nent and chain stores, and air freight
terminals.
Progress in Communication. A broad range of
advances in communication probably will be
among the important factors in the growth of
the economy over the next 5 to 10 years. Data
transmission, via telephone, is expected to be
come an important adjunct of electronic data
processing. Fast copying machines, color tele
vision, color printing, video tape recorders,
Polaroid color cameras, teaching machines, and
new devices for speeding the mail are some of
the innovations that are creating opportunities
for new investment and employment growth.
More spectacular are the prospects of high
quality international communications via com
munication satellites. Rapid growth of over
seas telephone service contributes to and results
from a large-scale expansion of international
business operations. The global extension of
communications builds on an evergrowing do
mestic telecommunications system of increasing
complexity, automaticity, and diversity of
services.
Business organizations are installing new
communication techniques to speed transmis
sion of information, facilitate remote control of
hazardous work processes and increase relia
bility of operations. The railroads, for example,
are increasing their use of microwave, closedcircuit television and two-way radio; the possi
bility of connecting the push-button telephone
to a computer at banks to permit payment of
bills is being tested; closed-circuit TV systems
are used to monitor paper and pulp operations
from remote stations; and multistore organi
zations are linked to a central computer, to fa
cilitate more efficient managerial control in
wholesaling and retailing.
Advances in Metalworking Operations. Ad
vances in metalworking technology have farreaching implications, not only because metal
working industries comprise a large sector of
manufacturing, but because cost savings in pro
ducing industrial machinery stimulate mechani
zation. Cheaper machinery could ultimately
mean a faster pace of technological change in
many sectors of the economy.
Metalcutting and metal-forming tools are be
ing improved constantly. Increased power,
faster loading and unloading, and greater preci
sion, flexibility, and versatility raise produc
tivity of machine tools. Possibly of greater
significance in the long run are new concepts in
metalworking— numerical control,
electro
chemical, and electrical discharge machining—
which have been developed largely as a result of
the influence of the aerospace and electronics
industries.
Numerical control is a technique for auto
matic operation of machine tools. Numerically
coded instructions are recorded in advance on
punched cards or magnetic tape and are inter
preted by an electronic device to guide the tool.
In some complicated applications, computers
are used to prepare tapes.
First used commercially in 1957, numerical
control is still in an early stage of application.
About 7,000 numerically controlled machine
tools were estimated to have been installed by
fall 1965, constituting only a small fraction of
the about 2 million machine tools in place. The
aircraft and missiles, motor vehicles, and ma
chinery industries are the principal users, but
6
almost every metalworking industry has a few
installations.
A fairly rapid growth is expected over the
next 5 to 10 years as the advantages of numeri
cal control are better understood and as pro
graming is simplified. The laborsavings per
unit of output in machining operations could be
substantial. Important advantages are its great
accuracy and its flexibility and applicability to
small orders which form a large proportion of
total machine shop work. The motor vehicle in
dustry, for example, is expected to make in
creasing use of numerical control to fabricate
tools and dies for its mass production machines.
Electrochemical and electrical discharge ma
chining utilize electronic techniques to remove
or shape metal parts. These techniques are par
ticularly suited for machining hard alloy metals
used in aircraft and motor vehicle production
where conventional techniques are extremely
expensive.
Developments in Energy and Power. New
sources of energy, more efficient generation,
and new ways of transporting energy are being
developed to meet the ever increasing require
ments of modern industry and urbanized
society.
The search for new sources and methods of
producing energy is continuing in many direc
tions. More oil will be sought from newly ex
plored offshore sources; but no less important
is secondary recovery in older fields. The possi
ble development of oil shale deposits would in
crease known reserves manyfold and would
create a new industry in some western States.
After nearly two decades of development, a
few nuclear power plants are in operation and
others are planned; but only a very small frac
tion of total electric power is expected to come
from nuclear plants over the next decade. Un
conventional methods— e.g., fuel cells which
would dispense with conventional generators—
are aso being investigated as possible supple
ments to existing methods.
Some technological developments continue to
result in reductions in requirements of labor,
capital, and raw materials per unit of output.
In petroleum refining, for example, processing
innovations result in greater yields from crude
oil. The trend toward coordination and inter
change of electric power on a regional basis is
expected to reduce substantially plant capacity
requirements.
The development of the “ unitized train” — a
specialized, low-cost fast service between coal
mine and utility— is of great importance in
maintaining coal’s position as the principal
source of fuel for electric power generation.
However, this growing low-cost form of trans
portation may face competition from “ coal by
wire”— i.e., the extra high voltage transmission
of large quantities of power over fairly long
distances— in some cases from generating
plants located at the mine head.
Advances in Transportation. A variety of in
novations in all modes of transportation will
continue to improve productivity in transporta
tion industries over the next 5 to 10 years.
More powerful diesel-electric railroad loco
motives can haul longer trains at higher speeds
and with greater loads. Electronic control sys
tems in classification yards and centralized
traffic control also increase speed of rail traffic.
Piggy-back service, which combines the hauling
capacity of railroads with the flexibility of
trucks, is expanding rapidly.
By 1970, practically all aircraft of scheduled
airlines will be medium- and large-size jets. As
faster aircraft are introduced, new, more reli
able air traffic control systems are being in
stalled and ground activities, including ticket
ing and baggage handling, are being speeded.
Three new types of aircraft (supersonic, sub
sonic, and jet convertible) are under develop
ment.
Motor trucks equipped with more powerful
engines, and constructed of light weight metals
will probably increase capacity of equipment
within legal weight limitations. In addition,
highway improvements may permit larger and
heavier trucks and higher average speeds.
In water transportation, pressure for tech
nological improvements results primarily from
a need to reduce costs to meet foreign competi
tion. Faster ships with more automatic con
trols and significant changes in ship design to
reduce labor requirements in cargo handling are
being built. Hydrofoils and ground effect ma
chines will be in limited use for intraurban
travel by 1970. A few all-container ships now in
7
service drastically reduce loading and unloading
time.
New Materials, Products, and Processes. The
development of new products and materials
continues to be important sources of technologi
cal change and economic growth. Research and
development (R&D) is directed, to a great ex
tent, toward the creation of new products. New
products also involve the development of new
methods and types of equipment.
The increasing utilization of a wide range of
synthetic materials is one of the most pervasive
developments. Through “ molecular engineer
ing,” chemists are developing ways of modify
ing plastic materials to obtain specified proper
ties. Synthetic materials are uniform in quality
and often require less labor because certain
preparatory steps are not needed. Plastics are
increasingy substituted for other materials in
construction, footwear, furniture, tires and
tires, motor vehicles, and such substitutions have
had a major impact on the textile industry.
Technological innovations in food processing
increasingly are concerned with making food
more resistant to spoilage. These changes
could have important effects on food distribu
tion methods. For example, freeze drying and
irradiation make possible meat storage for
longer periods; sterilization of milk increases
shelflife to 6 months; and freezing of bakery
products allows regular baking schedules
(thereby regularizing hours of bakery employ
ees), more varied output and less frequent de
livery by suppliers. In the malt liquor industry,
the beer concentration process, if adopted,
would facilitate bulk shipment with less trans
portation labor.
Managerial and Related Techniques. Besides
the “ hardware” of technology, new techniques
of scientific management are likely to be sources
of greater productivity. Scientific management
was originated over 60 years ago in efforts to
improve productivity by studying the individual
worker performing a single task. Over the
years, the scope of scientific management has
been steadily extended to include questions of
a broader nature. Since World War II, the em
phasis has been on management’s decisionmak
ing function and on mathematical techniques
for handling quantitative information about
business operations.
New tools include operations research,
mathematical programing, critical path meth
ods, and program evaluation and review tech
nique (PE R T). These systematic techniques
of analyzing and controlling large complex proj
ects have been applied in the construction, in
strument, aircraft, and electrical machinery in
dustries. They are applicable to major areas of
management, including finance, production, and
marketing. In the future, the computer may
facilitate wider application of mathematical
techniques to the solution of business problems.
Some Implications of Technological Change
Prospective technological developments sug
gest a number of implications for manpower
trends and adjustments.
1.
All industries ivill be affected, to some de
gree, by prospective changes in equipment,
methods of production, materials, and products.
Industries where extensive change will occur in
clude steel, textiles, electric machinery, syn
thetic materials, aluminum, telephone, water
transportation, air transport, electric power,
insurance and banking. Competition from other
materials and from foreign producers, greater
complexity in production and defense require
ments, increasing volume of business, and tech
nological breakthroughs from research and
development are some factors that foster the in
troduction of new techniques in these industries.
In other industries, technological changes
will continue to be limited. Among these are
apparel, furniture, footwear, foundries, and
dairy. Consumer taste, preference for frequent
style changes, custom nature of the work, job
lot production, and dominance of small firms
with little capital tend to retard the rate of
mechanization.
Technological changes take place within a
complex network of interrelated industries. All
industries are affected not only by changes from
within but also by changes that occur among
purchasers of their output and suppliers of ma
terials for processing. The substantial curtail
ment of ingot casting implicit in the growth of
continuous casting in the steel industry, for
example, will curtail demand for ingot molds,
8
one of the large tonnage products of the foundry
industry.
2.
“ Automation,” as technically defined, ivill
become increasingly important in many indus
tries, but changes along past lines of techno
logical development will remain highly signifi
cant. Computers, automatic controls, and
transfer machines are being introduced gradu
ally in many industries. Their application, as
in the case of other technological changes, de
pends on an assessment of costs relative to
possible future returns. Economic feasibility
remains the governing consideration.
Continuing improvements in existing proc
esses or products in some cases limit the intro
duction of more radical technological changes.
In electric power, for example, reduction in the
cost of coal through improved transportation
tends to delay the introduction of nuclear power
generation. The appearance of manmade ma
terials for making shoes is stimulating leather
producers to improve their competitive posi
tion. Because of such competition, the timing
of many changes is often difficult to predict, and
changes in one field often have unforeseen and
far-reaching effects in others.
3.
Employment prospects in the industries
studied are generally favorable. The table shows
the changes expected by 1970. Of the 40 indus
tries, employment is expected to rise in 17, with
about 26 million workers or about 77 percent of
all employees in those industries covered by the
study.
The prospects are less promising in 13 indus
tries where employment by 1970 will probably
be lower than in 1964. Increasing demand in
these industries will not compensate for the re
duction in unit labor requirements, and even
Employment in 1957 and 1964 and Prospects for 1970
E m p lo y m e n t
I n d u s tr y
1957
(th o u s a n d s )
1964
( th ou sa n d s)
P ercent
change
C o n cr e te , g y p s u m a n d p la s t e r p r o d u c ts ..................................................................................................
C o n tr a c t c o n s t r u c tio n
.......................................................................................................................................
E le c tr ic a l m a c h in e r y , e q u ip m e n t, an d s u p p lie s
F ed era l g o v e r n m e n t .........................................................................................................................................
F o u n d r ie s .................................................................................................. ............................................................
F u r n it u r e an d fix tu res
G lass c o n ta in e r s .....................................................................................................................................
In s tr u m e n ts a n d rela ted p r o d u c ts ...........................................................................................................
I n s u r a n c e c a r r ie r s ................................................................................................................................................
M o to r f r e i g h t .................................................................................................... .....................................................
P r in t in g an d p u b lis h in g ........................................................
P u lp , p a p e r , a n d b o a r d
................................................................................................................................
S y n th e tic m a teria ls an d p la s tic s p r o d u c ts .............................................................................................
W h o le s a le a n d reta il tr a d e .............................................................................................................................
148.4
1,210.1
602.9
1140.1
2,923.0
1,343.8
2,217.0
306.5
374.0
54.3
342.1
'8 13.6
804.2
870.0
226.4
'2 44.2
10,886.0
190.8
1,302.0
764.4
172.1
3,056.0
1,548.4
2,348.0
286.3
406.0
60.4
369.3
895.2
919.8
950.5
220.9
354.0
12,132.0
28.6
7.6
26.8
22.8
4.6
15.2
5.9
— 6.6
8.6
11.2
8.0
10.0
14.4
9.3
— 2.4
45.0
11.4
In d u s tr ie s w h e r e e m p lo y m e n t b y 1970 w ill p r o b a b ly b e lo w e r :
B a k e r y p r o d u c ts ...................................................................................................................................................
B itu m in o u s coa l ..............................................................................................................................................
D a ir y p r o d u c ts ..........................
..................................................................................................................
F lo u r an d o th e r g r a in m ill p r o d u c ts .........................................................................................................
H y d r a u lic c e m e n t ...................................................................................................................................................
L u m b e r a n d w o o d p r o d u c t s ..............................................................................................................................
M a lt liq u ors ............................................................................................................................................................
M ea t p r o d u c ts .......................................................................................................................................................
P e tr o le u m r e fin in g ...............................................................................
R a ilr o a d s
..............................................................................................................................................
T e x t ile m ill p r o d u c ts ............................................................................................................................................
T o b a c c o p r o d u c ts
................................................................................................................................................
W a t e r t r a n s p o r t a t io n .........................................................................................................................................
302.5
229.8
'319.1
27.1
41.6
655.3
77.4
333.1
153.9
985.0
981.1
71.5
2231.7
289.9
136.0
288.6
21.9
34.5
602.5
61.9
313.6
113.9
665.0
891.1
62.9
222.3
— 4.1
— 40.8
— 9.6
— 19.2
— 17.1
— 8.1
-2 0 .0
— 5.8
— 26.0
-3 2 .5
— 9.2
— 12.0
— 4.0
I n d u s tr ie s w h e r e e m p lo y m e n t b y 1970 w ill p r o b a b ly b e o n ly s lig h tly c h a n g e d , o r
is u n c e r t a in :
A i r c r a ft , a n d m issiles a n d s p a c e v eh icles ....................................................................................
A lu m in u m ...................................................................................................................................................................
C o p p e r o r e m in in g
....................................................................................................................
C ru d e p e tr o le u m a n d n a tu ra l g a s .....................................
E le c t r ic p o w e r a n d g a s
F o o t w e a r (e x c e p t r u b b e r ) ..............................................................................................................................
I r o n a n d steel
.....................................................................................................................................
M o t o r v eh icles an d e q u ip m e n t .......................................................................................................................
T e le p h o n e c o m m u n ic a tio n ................................................................................................................................
T ir e s a n d in n e r tu bes .......................................................................................................................................
'8 48.0
65.0
32.3
344.0
581.8
235.0
719.9
769.3
768.2
96.9
790.6
76.4
27.1
289.4
575.9
213.3
629.4
755.4
706.1
85.8
-
In d u stries w h e r e e m p lo y m e n t b y 1970 w ill p r o b a b ly be h ig h e r :
A i r t r a n s p o r t a t io n ............................................................................................................................................
A p p a r e l ........................................................................................................................................................................
1 1958.
2 1959.
6.8
17.5
-1 6 .1
— 15.9
— 1.0
— 9.2
— 12.6
- 1.8
— 8.1
— 11.5
9
with higher output, employment may decline.
This group of industries employs about 3.7
million.
Projections for a third group, with about 4.1
million employees or 12 percent of the employ
ment covered, show only a slight decline or a
slight increase in employment by 1970, or the
outlook is uncertain.
4.
Prospective technological changes will
continue to reduce the proportion of jobs involv
ing primarily physical and manual ability and
to increase the need for jobs requiring ability to
work with data and information. No attempt
was made to quantify these changes in this re
port, but several broad trends can be described.
The proportion of the labor force engaged in
materials handling will continue to be reduced.
A few operators of mechanized handling equip
ment or conveyors can often do the work done
by a number of manual materials handlers.
Among operatives, faster and larger auto
matic machinery reduces the number employed
per unit of output in jobs involving direct, stepby-step manual manipulation, loading and un
loading, or tending of equipment. Increasingly,
the function of the factory operative is to patrol
a number of automatic machines and to be re
sponsive to signals indicating breakdown.
In process industries, the typical operator will
monitor a wide panel of control instruments and
record information for interpretation. The con
trol operator performs as a skilled watchman,
with duties demanding patience, alertness to
malfunctioning, and a sense of responsibility
for costly equipment.
In many industries, maintenance and repair
work is becoming increasingly important or is
being changed as new types of equipment are in
troduced. Complex electronic equipment, such
as numerical controls and computers, require
specially trained electronic maintenance work
ers. On the other hand, routine maintenance on
new equipment is often reduced by means of
devices for automatic lubrication of machinery.
Technological advances may also result in
new requirements for some skilled craftsmen.
Instrumentation, for example, requires the
flour miller to supplement his “ rule of thumb”
methods with a knowledge of more scientific
procedures. New materials and processes re
quire construction craftsmen, printers, and
power plant operators to learn new skills and
update their knowledge.
Electronic data processing (EDP) will re
duce the relative proportion of routine office
jobs, especially in repetitive manual record
keeping work, but will require new and higher
grade jobs to plan, program, and operate such
systems.
The narrowing of opportunities in low-skilled
work and the trend toward greater knowledge
requirements in many fields of work underscore
the importance of broad education and training
as preparation for work. With the prospect of
marked changes in jobs over his working life,
the American worker will have great need for
adaptability and flexibility in the years ahead.
5.
This study indicates the inevitability and
pervasiveness of technological change and un
derscores the importance of developing ade
quate plans to facilitate manpower adjustment.
Management and labor have adopted a great
diversity of measures, ranging from on-the-job
retraining to comprehensive programs for job
security. The coverage and scope of these meas
ures vary from industry to industry depending
on economic and other conditions. The govern
ment’s training, counseling, and placement
services, together with the Nation’s educational
system, remain the focus of efforts to prepare
young persons who are entering the labor mar
ket and to assist unemployed adults to meet the
requirements of advancing technology. Meas
ures to maintain a high rate of employment
remain the basic condition for the success of
adjustment programs.
PART III. SCOPE, METHOD, SOURCES, AND LIMITATIONS
dustry structure, consumer taste, and govern
ment regulations are discussed. Trends in
expenditures on new plant and equipment and
on research and development which have an
important bearing on the rate and direction of
technological change are noted.
The manpower implications of technological
change are discussed in terms of trends in em
ployment and of changes in the structure and
content of jobs. Occupations that are created
and those that are decreased are identified
wherever possible. Employment prospects for
1970 are indicated in qualitative terms, i.e.,
whether employment will be higher, lower, or
about the same as in 1964.
The final section of each industry report de
scribes briefly some problems of adjustment and
some examples of formal and informal measures
that are being used in the industry to ease the
introduction of technological change. The ex
tent of provisions in collective bargaining agree
ments pertaining to early retirement, severance
pay, and similar measures and the nature of
private and government training programs are
noted briefly, wherever available. It is recog
nized that virtually every collective bargaining
agreement relates in some way to job security,
but the emphasis in this section is on recent
specific efforts to adjust to advancing technol
ogy. This section is illustrative rather than
comprehensive.
Scope of Reports
Industry Coverage. Major industries are cov
ered in 40 separate reports. Some reports cover
a group of industries: for example, tobacco
covers both cigar and cigarette industries. The
number of individual industries covered, i.e.,
four-digit Standard Industrial Classification
(SIC) industries, is therefore much greater
than 40. Employment in the industries covered
totaled 33.8 million in 1964 or 58 percent of
nonfarm employment.
The industries covered were selected so that
most of the major branches of industrial activ
ity, i.e., mining, construction, manufacturing,
transportation, trade, utilities, finance, and gov
ernment would be represented. Within manu
facturing, most of the industries surveyed em
ploy at least 100,000 persons. Agriculture and
the service industries such as hotels and hospi
tals, are among major exclusions.
Content of Industry Reports. Each industry re
port deals with three broad aspects of change:
outlook for technology and markets; manpower
trends and outlook; and some issues and exam
ples of labor-management adjustment.
The emphasis is on the outlook for technologi
cal changes. Major innovations in equipment,
processes, and materials are described in terms
of their relation to the older technology and to
the proportion of employment affected. Inno
vations not yet fully tested are mentioned but
are not extensively covered. The outlook for new
products and for growth in the industry’s total
output over the next 5 years is evaluated in
relation to past trends and to factors affecting
future demand.
The descriptions of innovations indicate some
advantages that are reported or claimed, such
as laborsavings, quality improvements, fuel
and material economies, greater accuracy, and
new markets. Estimates of current and 197075 importance in terms of proportion of firms
using the new technology or of total output pro
duced by it are presented wherever such data
are available. Factors affecting adoption of
technical innovations, such as capital cost, in
Method of Preparing Technological Forecasts
The preparation of technological forecasts
involved research into published sources, con
sultation with experts, and analysis of statisti
cal data.
Publications pertaining to technological
trends, economic developments, and manpower
problems in each industry were reviewed inten
sively. Technical and trade journals, govern
ment reports, books, trade association year
books, and reference works were sources of
information about the current state of technol
ogy and important prospective developments.
Annual reports from leading corporations in
each industry were reviewed for information
10
about new plants, processes, and products. Gov
ernment studies of trends in productivity, em
ployment, occupational requirements, and col
lective bargaining were analyzed. (A selected
bibliography on technological advances and
manpower implications in each industry is
appended to each report.)
Interviews with experts were an important
phase of the preparation. A few plants which
have introduced important technological ad
vances were visited to observe operations. Staff
researchers also attended conferences, seminars,
and trade shows. About 250 officials of com
panies, unions, trade associations, and govern
ment agencies were interviewed in preparing
industry reports.
A preliminary industry report based on anal
ysis of information assembled from various
sources was prepared. This appraisal required
first an estimate of the potential magnitude of
the reduction in labor requirements per unit in
a particular operation or department and an
assessment of the impact of the change on the
productivity of the industry as a whole. The
proportion of total man-hours involved in the
operation and how rapidly the change is intro
duced were important variables in making this
assessment. In practice, the statistical data
were rarely available for such refined estima
tion. Assessing the impact therefore became a
matter of interpretative analysis based on all
the available information about past and
prospective trends.
The preliminary report presented projections
of industry employment to 1970. Possible
changes in demand for the industry’s output as
well as the impact of laborsaving developments
were taken into account. Past trends in output
and prospective market trends were the prin
cipal basis for projections. (Data used in
making projections are discussed below.)
A critical step in final report preparation was
a review of its validity and adequacy by indus
try experts. Preliminary reports were sent to
10 to 15 experts in each industry including offi
cials of leading corporations (such as vice presi
dents in charge of research or manufacturing),
union research directors, trade association di
rectors, editors of trade publications, and gov
ernment and university specialists. Their com
ments and suggestions were taken into account
in the final industry report. Of the 453 individ
uals to whom preliminary reports were sent,
close to 400 replied. Since these reports were
often reviewed in some organizations by several
staff members, the total number of reviewers
was greater. Replies ranged from detailed re
views to general appraisals of the report as a
whole. Some reviewers furnished additional in
formation about technological trends. In a few
cases, follow-up consultations clarified points
of criticism and resolved differences of opinion.
This review procedure was designed in an effort
to assure that these studies reflect as closely as
possible authoritative opinion about each
industry.
Sources o f Statistical Data and Projections
Statistical data pertaining to productivity,
production, employment trends, investment, and
R&D provide a quantitative basis for assessing
the implications of technological change. They
are shown in charts and tables and are analyzed
in the text.
Productivity. Indexes of output per man-hour
are available for 17 of the 40 industry reports.
Indexes of Output per Man-Hour for Selected
Industries 1939 and, 1947-63 (BLS Report 301),
is the source for 15 indexes; indexes for two
food industries are from Marketing and Trans
portation Situation (U.S. Department of Agri
culture, Economic Research Service, February
1965).
For most industries, rates of change, based on
the compound interest method, were computed
for the periods from 1947 to 1957 and from
1957 to 1963 or 1964. These terminal years
were selected because they were periods of
fairly high rates of capacity utilization. The
influence of the business cycle on the indicated
rate of change is thereby reduced. These rates
may differ from those calculated on the basis of
the least squares trend of logarithms of the an
nual index numbers, which reflect the year-toyear changes rather than changes between
terminal years.
Production. Production trends in each industry
also are analyzed. Output indexes, developed
by the Bureau’s Division of Productivity
12
Measurement in conjunction with measures of
trends in output per man-hour, were the basis
of analysis in some industries. For many manu
facturing- industries, the Federal Reserve
Board (FRB) indexes of production were used
as indicators of the trend in output. The sources
for these indexes were two FRB publications:
Industrial Production, 1957-59 Base (Board of
Governors of the Federal Reserve System,
1962), and Industrial Production Indexes, 19616U (September 1965). For the nonmanufactur
ing industries, measures of output based on na
tional income statistics or on data from regula
tory agencies were utilized. Because these
measures often are not consistent with concepts
of output used in BLS productivity measure
ment, indexes of output per man-hour con
structed from them may not be representative
of productivity trends.
Various sources were used in projecting fu
ture trends in output. For a number of indus
tries, projections presented in Resources in
America's Future, by H. Landsberg, L. Fischmann, and J. L. Fisher, published for Resources
for the Future, Inc., by the Johns Hopkins
Press, 1963, are cited. Projections from gov
ernment and trade sources also were used for
some industries. The sources are cited in the
text.
Employment. Employment data (all employees
and production workers) for most of the indus
tries covered are from the publication Employ
ment and Earnings Statistics for the United
States, 1909-6I (BLS Bulletin 1312-2). For
f.
some industries, data on employment from the
Bureau of Census Annual Survey and Census of
Manufacturers were used to assure consistency
with production and productivity series. Census
employment series are noted in the text.
Projections of industry employment shown
in this report are consistent with levels pro
jected by the Bureau’s Division of Manpower
and Occupational Outlook and the Division of
Economic Growth on the assumption of a 3percent unemployment rate in 1970.
Investment and, Research. Principal sources of
statistics on expenditures for plant and equip
ment were the Census and Annual Surveys of
Manufactures published by the Bureau of the
Census. For nonmanufacturing industries,
data from the Securities and Exchange Com
mission and the McGraw-Hill Co. were used.
The National Science Foundation was the prin
cipal source of data on expenditures for re
search and development and employment of
scientists and engineers in R&D.
Occupational Data. Data on the occupational
distribution of employment in a number of in
dustries are based on the 1960 Census of Popu
lation. For some industries, Industry Wage
Surveys, prepared by the Bureau’s Division of
Occupational Pay, provided data about the oc
cupational structure. The Occupational Outlook
Handbook, 1963-6U Edition (BLS Bulletin
1375) was an important source of information
about occupational trends.
Adjustments to Technological Change. Statisti
cal information on the prevalence of provisions
in collective bargaining agreements which per
tain to adjustments to technological change are
available for a limited number of industries
from the following studies by the Bureau’s Di
vision of Industrial and Labor Relations: Sev
erance Pay and Layoff Benefit Plans (BLS Bul
letin 1425-2, 1965) ; Supplemental Unemploy
ment Benefit Plans and Wage-Employment
Guarantees (BLS Bulletin 1425-3, 1965) ; and
Labor Mobility and Private Pension Plans:
Study of Vesting, Early Retirement, and Porta
bility Provisions (BLS Bulletin 1407, 1964).
Summaries of agreements in Recent Collective
Bargaining and Technological Change (BLS
Report 266, March 1964) and in the monthly
BLS report, Current Wage Developments were
also used.
Limitations and Qualifications
Some limitations of the study must be kept
in mind. They indicate not only some qualifica
tions of the information but suggest some areas
for future research and improvement.
First, it should be recognized that projections
of future technological changes are necessarily
complex and uncertain. Efforts were made to
avoid emphasizing spectacular but unrepresent
ative changes and to include all significant
changes. Projections were based on informa
tion available in 1965 and reflect the opinions of
13
industry experts as of that date. New technical
and economic developments, not foreseen in
1965, may arise over the next 5 to 10 years
which will require reevaluation of developments
now pending. Changes in government expendi
tures for defense purposes, for example, could
alter significantly the outlook in defense related
industries.
Second, quantitative data about the extent,
pace, and implications of technological change
are fragmentary. Statistical information about
the status of important developments, for exam
ple, is available for only a few industries and
innovations, and data about their manpower ef
fects are typically not available. Statements
about the implications of technological change
therefore, are based on judgment, approxima
tion, and interpretative analysis of all the
available information.
Third, projections of technological change by
industry experts often are made without ex
plicit reference to changes taking place in other
industries. Yet a characteristic of advancing
technology is the complex interrelationships
among industries. Technological changes not
only affect directly the industries where they
are introduced but may have an indirect impact
on industries which supply materials or fuels
consumed or which produce a competitive prod
uct or service. In the future, the Bureau’s re
search program on economic growth, which
takes explicit account of the interdependence of
industries, will provide a basis for improving
estimates of future levels of output and employ
ment.
Finally, this report surveys developments in
a fairly large number of industries. Accord
ingly, the analysis of technological changes and
their manpower implications in each industry
has been deliberately made concise. More in
tensive research will be necessary to determine
more fully the manpower implications of tech
nological changes, such as their effects on pro
ductivity, the structure, content, and educa
tional and training requirements of jobs, and
the benefits and problems of various methods
of adjustment. Future research may involve,
for example, the collection of occupational in
formation from advanced plants and the de
velopment of improved techniques for analyzing
factors influencing the direction and pace of
technological change.
PART IV. INDUSTRY REPORTS
The Copper Ore Mining Industry (SIC 1 0 2 )
of growth for the 1947-64 period, in recover
able copper produced, was 2.4 percent per year.
Increasing use of copper scrap and improve
ments in ore processing, however, are expected
to become more important in compensating
for anticipated decline in the grade of ore.
Summary of Outlook Through 1970
Production of copper ore is expected to con
tinue to rise over the next 5 years. Most of this
growth in output will come from the demand
for copper due to the expanded activity pro
jected for communications and building con
struction. Output per employee will probably
continue to increase as equipment and methods
are improved. Newly developed methods of
mining, improved beneficiation techniques,
larger and more powerful equipment, and a
widening variety of automatic machines will be
the primary technological advances.
Total employment will probably remain near
current levels, the proportion of production
workers continuing a slight decline. Occupa
tions, skills, and job duties of workers are
changing as new equipment and processes are
being introduced. More truckdrivers and re
pairmen (automobile and electronic) will be
needed. Union contracts with major producers,
negotiated in 1964, provided supplementary
unemployment and termination benefits.
Extraction of ore by open-pit methods ivill con
tinue to dominate copper mining. Eighty-two
percent of copper ore came from open-pit mines
in 1964 compared with less than 60 percent
prior to World War II. It will continue to be
the major method of mining ores because it
is the most economical means of extracting ore
deposits near the ground surface— the major
types of ore supply in the United States. Block
caving and room and pillar mining are the two
most important methods of mining underground
deposits. These two low-cost, large-scale pro
duction methods accounted for approximately
Outlook for Technology and Markets
Production is expected to continue to increase
at a significant rate. Output of copper ore
increased by more than 3 percent a year over
the 1947-64 period. The rate for 1947-57,
however, was 4.1 percent, well above the 2.6percent rate for the 1957-64 period. Because
of increasing demand for copper arising from
expansion in electronics, durable goods manu
facturing, communications, electrical utilities,
and residential construction, industry experts
predict continued growth in output of copper
ore through 1970.
Since the average amount of usable copper
that can be obtained from a ton of copper ore
has been declining, as richer deposits are ex
hausted, total output measured in terms of
tons of recoverable copper is not increasing
as rapidly as total tons of ore mined. The rate
Copper ore is loaded into an 85-ton off-highway truck.
14
15
12 percent of copper ore output in 1963. No
substantial change in the relative importance
of copper mining methods is expected in the
next 5 years.
Conversion of ore haulage from rail to trucks
continues to win acceptance. This is especially
true in and around open pits where maneuver
ability and flexibility are important. The shift
has taken place gradually over the past 15
years, becoming more accelerated in the past
5 years. In early 1965, only 4 of 18 major
open-pit mines were using rail as their main
haulage system. The switch to trucks elimi
nates tracklaying and moving crews, but re
quires more truckdrivers and automotive me
chanics. One major producer estimates that
conversion to truck haulage at one pit would
result in total mining costs being reduced by
as much as 12 percent.
Trend to larger size trucks may he tempered
by individual conditions. Considerable prog
ress continues to be made in increasing the
capacity and horsepower of trucks in general
use. Typical 30-ton trucks with 150 horsepower
of 20 years ago have given way to 60- to 80ton units with 700 horsepower. Trucks with
up to 120-ton capacity are also being used.
Research is now underway to determine the
economies of particular conditions and maxi
mum truck capacity. Because breakdown,
maintenance, and repair of a few extra large
capacity trucks may seriously delay haulage
of ore, some producers may limit the capacity
of trucks used to the more typical 60- to 80ton units, even though a larger number of
trucks will be required. A great deal of in
terest has centered recently around the pos
sible use of electric wheel and diesel-electric
trucks to gain added economic benefits through
decreased engine wear, maintenance, and fuel
costs. Several pits are using them on an experi
mental basis.
Train haulage will he retained for longer hauls.
Trains are still heavily favored for distances
of about 3 miles or more. Automatic controls
make the use of trains more economical, allow
ing reductions in the size of operating crews
from two to one. Unloading of railroad cars
is expedited by improved techniques of dump
ing and made more automatic by remote-con
trolled positioning of cars. These innovations
require fewer operating personnel and reduce
requirements for laborers.
Mining equipment continues trend toward in
creased power and capacity. Skips which haul
over 40 cubic yards, blasthole drills capable of
drilling 15-inch holes, huge scrapers and loaders
are examples of the trend that is expected to
continue toward larger mining machinery.
Shovels are also becoming larger. Ten- and 15cubic yard capacity shovels are now common
compared to 7- or 8-cubic yard shovels in use
only a few years ago. Because of simplified
controls and features such as automatic lubri
cation, work crews are being reduced. For
example, shovel crews of three men are being
replaced by one-man operators.
A highly automated copper concentrator, the
first of its kind, serves as a model for future
ore processing. The high degree of instrumen
tation in this concentrator, which became oper
ative in 1964, allows significant reductions in
operating personnel and enables the entire
process to be monitored remotely by one man
from a central control room. These operations
include grinding, chemical and waterflows, flo
tation of ore, closed-circuit TV monitoring, and
X-ray analysis of materials. In addition to
substantial labor savings, the widespread use
of instrumentation in this system allows greater
control of quality through assaying of copper
by fluorescent X-ray spectrography and atomic
absorption devices on moving pulp streams.
While a computer as part of this system is
used to store data automatically, transmit data
through printouts, and measure performance,
it is not yet used to control the processes di
rectly.
By grinding ore on ore, the grinding mills
in this concentrator permit cost savings by
eliminating the conventional use of steel grind
ing balls, eliminating undesirable steel particles
entering the ore and obtaining a higher grind
ing capacity. Similar grinding mills have been
installed since, and more are expected to be in-
16
EMPLOYMENT, OUTPUT, AND OUTPUT PER MAN-HOUR
IN COPPER ORE MINING
Thousands of Employees
1947
Source:
' 49
'51
Bureau of Labor Statistics.
' 53
*55
'57
*59
*6 1
'63
19 65
17
stalled in the near future. Their use, however,
is limited to the processing of certain combina
tions of hard and soft ores.
New developments in drilling and blasting in
crease production levels and lower costs and
manpower requirements. The angle-drilling
technique, introduced in the late 1950’s, will
continue to grow in use in open-pit drilling.
Improved fragmentation, reduction in amount
of secondary blasting, and lowering of over
all mining costs by as much as 10 percent are
some of its economic benefits. Lower man-hour
requirements in loading broken ore and in
secondary blasting account for a large part of
the decrease in cost. Ammonium nitrate and
fuel-oil explosive, introduced in this country
a decade ago, will continue to be the most widely
used type of explosive in copper mining. Slurry
and gel explosives, developed more recently,
may become more important where a more
powerful explosive is required.
Bacteria leaching could revolutionize copper
recovery. The continuing depletion of highgrade deposits has created a need for more
effective methods for recovering copper from
low-grade ores. One promising process is the
controlled use of micro-organisms in conjunc
tion with conventional leaching (use of wateracid solution to dissolve copper minerals from
ore) to increase significantly the rate of leach
ing reaction. Extensive research has already
led to a substantial investment for future re
search and pilot operation by one company.
New devices and techniques for breaking rock
are under development. The use of a high-fre
quency electromagnetic field for breaking rock
is well into the development stage. A water
cannon has been developed that shoots bursts
of water at 50,000 psi, which is well above the
breaking strength of most rock. Air decking,
an improved blasting technique utilizing air
spaces between charges in open-pit blastholes,
is a further development for improving frag
mentation. The use of nuclear explosives for
stripping overburden for open-pit mining is
being investigated, but application seems to
be restricted to areas of semi-isolation and to
overburden depths of 200 feet or more. Experi
ments are also being conducted to determine the
feasibility of using nuclear explosives in con
junction with conventional underground block
caving mining. Significant changes in productiv
ity and labor requirements may occur as these
developments become commercially applicable.
Manpower Trends and Outlook
Groivth in productivity is expected to continue
at about the 1947-64 rate. Productivity, as
measured by output of ore, should continue
to increase at about the same annual rate of
growth as in the 1947-64 period, over 3 percent
for output per all-employee and over 4 percent
for output per production worker man-hour.
Output per all-employee increased at an annual
average rate of 5.3 percent between 1957 and
1964, substantially above the 2.5-percent rate
between 1947 and 1957. Output per produc
tion worker man-hour increased at about 4
percent during the earlier period and about
5 percent during the latter. In terms of cop
per recovered from ore, both output per all
employee and output per production worker
man-hour from 1957 to 1964 were about the
same as that for copper ores in the same period
and somewhat lower in the 1947-57 period.
Employment is
stable. Total
27,500 in 1947
annual rate of
expected to remain relatively
employment increased from
to 32,300 in 1957, an average
1.6 percent. By 1964, employ-
Average annual percent change
All employees
1947-57 __________________________________
1.6
1957-64 ___________________________________ - 2 . 4
Production workers
1947-57 __________________________________
.9
1957-64 ___________________________________ - 2 . 9
Output
1947-57 __________________________________
4.1
1957-64 __________________________________
2.6
Output per employee
1947-57 __________________________________
2.5
1957-64 __________________________________
5.3
Output per production worker man-hour
1947-57 __________________________________
4.2
1957-64 __________________________________
5.1
18
ment had declined to 27,100, or a rate of 2.4
percent per year since 1957. As larger capacity,
more highly automatic equipment is utilized,
it will be possible for a work force averaging
around the 1964 level to produce the antici
pated larger output.
Changes in occupational structure ivill continue.
The number of production workers increased
at an average annual rate of 0.9 percent be
tween 1947 and 1957, increasing from 24,700
to 27,100. During the period 1957-64, the
number dropped at a rate of 2.9 percent per
year, to 22,000. Production workers as a per
cent of total employment declined from 90
percent in 1947 to 84 percent in 1957. By 1964,
the proportion of production workers declined
to 81 percent, having slowed down considerably.
This deceleration in trend is likely to continue.
Types of occupations continue to undergo
change. Demand for mechanics, truckdrivers,
electricians, technicians, and machine operators
has increased while a large number of unskilled
laborers, such as trackmen, have been virtually
eliminated. Radio operators and electronics re
pairmen are expected to increase in importance
as use of radio and TV become more widespread
for communications and monitoring.
Some Issues and Examples of Adjustment
In-plant training programs are being used by
some companies to ease the impact of techno
logical change. For example, during a recent
changeover from rail to truck haulage, one
company, in close cooperation with the union,
established an apprenticeship program for me
chanics and training courses for drivers. Dis
placed employees were selected for these pro
grams on the basis of aptitude, although few
had any previous experience in either of the two
jobs. Another company which recently intro
duced two-way radios in mobile equipment and
closed-circuit TV systems for pit monitoring,
set up training programs for both operators and
maintenance personnel.
Shortage of underground copper miners may
be ynet by relocating displaced coal miners. Al
though the two mining methods differ consider
ably, one copper producer has recruited over
550 displaced coal miners from Appalachia to
meet a labor shortage in its underground facili
ties. Because of an expected continued shortage
of copper miners, the program to relocate dis
placed coal miners is expected to continue.
Negotiations continue to involve provisions to
lessen automation impact. Agreements in 1964
between union and major producers contain the
stipulation that a permanent employee, nor
mally one on the job 90 days or more, will not
be laid off because of automation, technological
changes, or new work methods. The latest con
tracts also generally contain, for the first time,
provisions for supplemental unemployment and
severance pay benefits. These provisions pro
vide for setting up a fund for each employee, to
be withdrawn during layoffs or paid in a lump
sum on retirement to supplement the worker’s
regular pension.
Selected References
Technological Developments
Engineering and Mining Journal (Issue on Open Pit Technology), November 1964,
pp. 81-101.
McMahon, A. D. Copper, A Materials Survey, Bureau of Mines, IC 8225, 1965.
340 pp.
“ Mining Technology in 1964,” Mining Engineering, February 1965, pp. 91-99.
Orr, David H. Jr. and Felix G. Berra. “ One-Man Remote Control Rail Haulage,”
Mining Engineering, April 1965, pp. 75-79.
Russell, Paul L. “ Stripping Overburden With Nuclear Explosives,” Mining Engi
neering, June 1964, pp. 76-80.
Sutton, J. A. and J. D. Corrick. Leaching Copper Sulfide Minerals With Selected
Autotrophic Bacteria, Bureau of Mines, RI 6423, 1964. 23 pp.
Wideman, F. L. “ Copper,” Minerals Facts and Problems, 1965 Edition, Bulletin 630,
Bureau of Mines.
------ . “ Copper,” Minerals Yearbook, 1964, Vol. 1, Bureau of Mines, 1965.
Wimsley, W. H. “ The Open Pit Mining Industry Today,” Mining Congress Journal,
February 1965, pp. 36-39 and 41.
Wraith, William Jr. and F. G. Fulmor. “ Anaconda’s Butte Concentrator,” Mining
Engineering, May 1964, pp. 54-78.
Manpower Trends and Adjustments
Bogart, John R. “ Electronic Eyes and Ears Monitor Pit Operations,” Metal Mining
and Processing, March 1964, pp. 48-52.
Crawford, J. 0 .; C. A. Garner; and G. A. Kniepp. “ From Coal to Copper,” Employ
ment Service Revieiv, Bureau of Employment Security, October 1964, pp. 28-30
and 33.
Current Wage Developments, No. 201, Bureau of Labor Statistics, Sept. 1, 1964,
pp. 3 and 22-23.
Shilling, R. W. “ Conversion From Rail to Truck Haulage at the Chino Pit,” Mining
Congress Journal, April 1964, pp. 29-32 and 43.
The Bituminous Coal Mining Industry (SIC 1 2 )
of the electric power industry (coal’s most im
portant market) and on an increasing export
demand.
The National Power Survey (1963) by the
Federal Power Commission estimates that by
1980, almost 500 million tons of coal will be
required for power generation alone. A sub
stantial part of this expansion in demand is
expected from the growth of extra high voltage
transmission of electric power, a development
stimulating construction of generating plants
at the mine mouth. The National Power Survey
also predicts about 25 percent of all new gen
erating capacity in 1980 to be mine-mouth
plants.
According to a study made for the U.S.
Department of the Interior’s Office of Coal Re
search, export sales may rise from 47 million
tons in 1963 to between 80 and 138 million tons
by 1970. Other export projections range be
tween 140 and 150 million tons. Estimates of
comparative productivity in 1963 showed U.S.
output per worker more than five times higher
than the highest average for European nations.
Summary of Outlook Through 1 97 0
Coal output is expected to rise significantly
through 1970. Most of the increase in demand
for coal will come from the electric power in
dustry, where cost of coal for fuel is being
lowered by improvements in energy transpor
tation, such as high voltage transmission of
electricity and unit train shipments of coal, as
well as advances in mining technology. Among
the principal technological developments are:
More intensive use of continuous mining ma
chines, the possible spread of longwall mining
methods, and increasing utilization of giant
earth moving equipment by surface mines.
Continued increases in output per man-hour
are projected through 1970, due in part, to in
creasing concentration of production in more
efficient mines; in part, to introduction of more
effective mining techniques. Continued declines
in employment are also expected, particularly
in mines unable to meet increasingly stringent
competitive conditions in the coal industry.
Reduced retirement age, liberalization of pen
sions, and voluntary relocation of displaced
miners are among the measures being used in
efforts to modify the impact of declining em
ployment.
Unitized trains ividen markets for coal. Unit
ized trains haul coal at bargain rates directly
from a single producer to a single consumer.
They carry 7,000 to 10,000 tons per trip, travel
at near passenger train speeds, bypass all classi
fication yards, and save an average of $1.50
a ton on the delivered price of coal to users, in
many cases gaining a competitive advantage
over other fuels. One large utility, for example,
will use 2 to 2.5 million tons of coal annually
at a plant originally intended to use oil.
Developed in 1960, unit trains by 1965 were
hauling 25 percent of total railroad coal ton
nage. Estimates are that up to 50 percent of
all coal hauled by railroads in 1970 may be in
unit trains. New mines designed to supply a
single customer by unit train shipment, plans
for trainloads of 15,000 to 20,000 tons, and more
advanced “ integral” unit trains owned by utility
companies, all tend to support forecasts of unit
train shipments of coal by 1980 at about onehalf the present cost of oil by pipeline. Other
Outlook for Technology and Markets
Output of coal is expected to continue a rise
which began in 1962. Coal output of 487 million
tons in 1964 exceeded 1963 production by more
than 28 million tons. One industry source es
timates production at 595 million tons by 1970
and several sources project an annual output of
800 to 900 million tons for 1980. Based on 1964
production, these projected levels represent an
increase of between 3 and 4 percent compounded
annually. A growth rate of 2.9 percent has been
maintained since 1958.
Improved competitive position is reflected in
the rising demand for coal in electric utility and
export markets. Projections of increased coal
production are founded on the growing demand
20
21
developments in coal transports, such as im
proved barge tows and possibly coal slurry pipe
lines, also may advance the competitive position
of coal in particular markets.
Use of continuous mining machines is increas
ing. The 1,030 machines in operation in 1963
represented a net increase of 69 units over
1962. Continuous mining machines produced
39 percent of underground coal in 1964, as com
pared with 27 percent at the beginning of the
decade. One industry expert predicts that con
tinuous mining machine production will reach
49 percent of total underground output by
1970.
In 1963, continuous mining machines were
used by 332 mines, while 139 mines used only
continuous mining machines. Productivity in
those mines using only continuous mining ma
chines was 8 percent greater than in mines
using conventional mechanical methods and 25
percent greater than the average for all under
ground mines, including hand loaded mines.
Other technological advances achieve better ma
chine utilization. “ Continuous” mining ma
chines are currently estimated to be in actual
production less than two-thirds of the time.
Modular constructed machines are returned to
service more quickly after breakdown, as en
tire sections are removed and replaced and the
damaged parts then repaired without interrupt
ing production. Improved conveyor systems,
now being installed, remove coal faster with less
idle time for the machine. Improved reliability
of AC-powered equipment has caused a swing
to AC current in mining. Experts believe very
few new mines using DC current will be opened.
Other improvements that result in greater ma
chine utilization include transistorized equip
ment control circuits (less prone to failure),
and improved lighting and dust control equip
ment.
Greater capacity stripping equipment extends
scope of surface mining. A 180-cubic yard
shovel, soon to become the largest available, will
permit the removal of thicker overburden, thus
helping to extend the reach of surface mining.
As late as 1960, the largest shovel was 85 cubic
yards. Also significant for greater productivity
are the steady increases in power and average
capacity of smaller shovels and increased use
of auxiliary equipment such as trucks, bull
dozers, coal drills, and rippers. In 1963, shovels
and draglines of more than 6 cubic yard ca
pacity constituted 16 percent of all shovels,
compared with 12 percent in 1958. These im
provements have helped surface mines increase
their share of total coal output from 28.3 per
cent in 1958 to 33.9 percent in 1964. Output
per man-day rose from 21.5 to 28.7 tons— more
than double the productivity of underground
mines. The rates of increase in the percentage
of coal from surface mining and in the produc
tivity of such mines are expected to decrease as
average overburden becomes thicker.
Longwall mining with self-advancing roof sup
ports could be a basis for continuing produc
tivity increases. In longwall mining, coal is cut
from a face of 300 to 1,000 feet as compared
with 9 to 30 feet in room and pillar mining.
Pushbutton operated, hydraulically powered
roof supports advance toward the surface to
be mined, as a cutter, traveling on rails atop
the face conveyor, removes the coal and dumps
it onto the conveyor. The roof is permitted to
cave in behind the machinery as it moves for-
Miner on top of twin trucks dramatizes bucket size of
new stripping shovel.
22
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
UNDERGROUND COAL MINED BY CONTINUOUS MINING
MACHINES IN BITUMINOUS COAL MINES
Thousands of Employees
Index (1957-59-100)
Ratio Scale
Percent
100
75
50
25
0
1947
Sources:
49
51
53
55
57
59
61
63
Underground coal mined, Bureau of Mines; employment, output and output per man-hour,
Bureau of Labor Statistics.
1965
23
ward. Permanent roof supports are thus needed
only in passageways.
The repetitive nature of the longwall produc
tion cycle lends itself well to automatic opera
tion. In Great Britain, for example, several
remotely operated longwall faces (ROLF) are
in operation, controlled by single operators at
electronic control panels, located 60 feet or more
from the surface to be cut. Plans to substitute
computers for the operators are well advanced.
According to industry experts, face produc
tivity of U.S. longwall mining has ranged be
tween 45 and 66 tons per manshift. Continuous
mining machines in room and pillar mines hav6
done as well, but under generally better mining
conditions. One company operating a longwall
system claims a 25-percent saving in labor cost
over continuous mining under the same condi
tions, and a 45-percent reduction in total costs
compared with conventional equipment.
Application of mechanized longwall mining
to U.S. coal beds began in 1951 as an experiment
conducted jointly by the Bureau of Mines and
private industry. By 1963, the new system
produced 816,000 tons. Six longwall mines were
in operation in 1964 and operation of additional
mines began in 1965. Among the major impedi
ments, however, to rapid diffusion of longwall
mining in the United States are the very high
initial outlays for equipment and presently long
time lag between the beginning of construction
and commercial production.
Research and development expenditures are
rising. A recent survey by U.S. Department of
Interior’s Office of Coal Research indicated that
annual expenditures for coal research by all
interested organizations amounted to between
$20 and $25 million in 1964, as compared with
$17 million disclosed in a 1955 survey. Since
its inception in 1960, the Office of Coal Re
search has awarded about $17 million in con
tracts. During the same period, expenditures
by the Bureau of Mines for coal research
amounted to $40 million.
Key research opportunities exist in discover
ing methods of reducing the cost of mining,
transporting and utilizing coal resources in the
electric power industry, and in developing lowcost methods of converting coal into liquid
and/or gaseous fuels. Other R&D efforts are
directed toward making lignite and other lowgrade coals profitable to use. Low-grade coals
constitute about 60 percent of U.S. reserves, and
satisfactory conclusion of such research, com
bined with modern energy transportation meth
ods, could enlarge the markets for these prod
ucts and open up new coal mining employment
opportunities in western States.
Expenditures for new plant and equipment are
increasing. Estimated 1964 expenditures of
about $350 million (based on a 6-month survey
by a leading industry journal) are near the
highest ever registered and may be compared
with annual averages of $265 million between
1950 and 1957, and $130 million between 1957
and 1963. Annual capital expenditures are ex
pected to remain high in the immediate future
and may rise as capacity is expanded to meet
increased market demands. Capital investment
per ton in surface mines was more than double
that of underground mines in 1964.
New technology is changing the structure of
industry. The new technology favors larger
producing units. Large mines account for an
increasingly greater share of total output. Coal
mining companies also have tended to merge
into larger companies, in part to meet higher
capital requirements. At the same time, how
ever, the existence of many unemployed miners
willing to work for less than union wages has
prompted the opening of a great many nonunion
mines, some of which are too small to be counted
in official production and employment data.
Manpower Trends and Adjustments
Productivity is expected to grow at a rapid rate.
Output per man-hour increased at an annual
average rate of 7.6 percent between 1957 and
1964 compared with a rate of 5.6 percent be
tween 1947 and 1957. Another measure of pro
ductivity, “ tons per man-day” , increased from
12.8 to 16.8 tons between 1960 and 1964, about
1 ton per year. If the annual increase in tons
per man-day reached 1.5 tons, output per manday would amount to almost 25 tons in 1970.
Increased productivity is due to the tendency
toward concentration of production in more
efficient mines as well as a general increase in
efficiency.
24
Employment decline is expected to continue but
at a lower rate. Between 1947 and 1964, em
ployment fell by 289,600 jobs; 195,800 jobs
were lost in the first 10 years; 93,800 during
the last 7. Employment averaged 136,000 in
1964. At current annual productivity rates,
each million tons of increased demand is the
rough equivalent of 300 additional man-years
of employment. Nevertheless, by 1970, employ
ment in bituminous coal mining is expected to
contract further as increases in productivity
more than offset increases in demand.
Average annual percent change
All employees
1947-57 ___________________________________ - 6 . 0
1957-64 ___________________________________ - 7 . 2
Production workers
1947-57 ______________________
-6 .4
1957-64 __________________
-7 .9
Output
1947-57 ___________________________________ - 2 . 3
1957-64 __________________________________ - .1
Output per production worker man-hour
1947-57 __________________________________
5.6
1957-64 __________________________________
7.6
Work in mines is becoming steadier, more hours
per week, more days per year. The mine work
week has risen irregularly to 39.3 hours in 1964
— 3.5 hours longer than in 1960. Average weekly
hours are expected to continue this gradual rise
as the demand for coal increases. The average
number of days worked per year will probably
continue increasing also. The average of 225
days worked in 1964 was the highest since 1948;
20 days more than in 1963. Industry estimates
of an attainable work year are about 240 days;
the Bureau of Mines, however, estimates ca
pacity on the basis of 280 days per year.
Changes in occupational structure are resulting
from new methods of mining. The ratio of
nonproduction workers to all employees is in
creasing. In 1964, nonproduction workers con
stituted 12 percent of employment as compared
with 4.5 percent in 1950 and 11.5 percent in
1960.
Experts believe that by 1970 continued
mechanization will have caused a shift in the
occupational groupings of underground produc
tion workers resulting in about a 10-percent
increase in maintenance workers and a 10-per
cent decrease in face workers. In 1962, main
tenance workers comprised approximately 19
percent of underground mining employment;
face workers, about 50 percent. The other 31
percent of workers in underground mines con
sisted of nonsection underground workers such
as haulage, ventilation, and construction men,
and outside workers such as tipple operators,
truckdrivers, and car droppers.
Recent liberalization of eligibility requirements
and benefit amounts for retirement may cushion
employment decline. Beginning in 1965, the age
at which workers may retire on full benefits
was lowered from 60 to 55 years and the serv
ice requirement from 30 years to 20. Industry
experts estimated that as a result, about 10,000
miners would be added to Welfare and Retire
ment Fund rolls. At the same time, payments to
retired miners from the Fund were raised to
$85 monthly (from $75).
Mineworkers have increased job security. The
1964 wage contract between the United Mine
Workers of America (Ind.) and the Bituminous
Coal Operators Association continued a tradi
tional emphasis on higher wages. However,
provisions to improve job security included the
substitution of minewide seniority for job clas
sification seniority. The contract also provided
for a staggered vacation period, permitting 52
weeks of operation in the coal industry in
order to enhance the security of coal miners by
insuring that the industry will be able to fully
utilize all of the new techniques and meet, to
the fullest possible degree, the needs of its
customers.
On-the-job training for operating and main
tenance personnel is being expanded. As min
ing becomes more highly mechanized, formal
and on-the-job training in mining methods, as
well as in safety, are being introduced. Re
search sponsored by the American Mining
Congress, for example, has found that the
proper training of continuous mining machine
operators can increase face crew output by sub
stantial amounts. Another example is the train
ing of mine mechanics, accustomed to repairing
25
DC equipment, to work on AC electrical equip
ment which is being installed in increasing
amounts. Some companies are providing formal
course work in electrical theory as well as its
practical application.
Government retraining 'programs are aiding
displaced miners. About 600 former coal min
ers were among the approximately 9,000 per
sons in Appalachia who have secured training
under the Area Redevelopment and Manpower
Development and Training Acts, as of 1964.
Most of the miners were trained for other
skilled jobs.
A program for relocating displaced coal miners
in hard rock mining areas of the West is ex
pected to grow. Recruitment of bituminous
miners has started in Virginia, West Virginia,
Pennsylvania, and Kentucky to meet a shortage
of hard rock miners in the Butte, Mont., area.
Since the program began, 220 workers from
West Virginia alone have been recruited and the
State had requests for 200 more during 1965.
Labor and management are working to improve
the industry’s market outlook. The UMWA is
continuing to cooperate with coal producers,
electric utilities, and railroads in the National
Coal Policy Conference to accelerate the expan
sion of coal markets through such means as
promoting increased consumption of electricity
and working for continued restrictions on the
import of residual fuel oil.
Selected References
Technological Developments
Perry, Harry W. Revolution in Coal Transport— Is it Near? A paper delivered
before the Symposium on Coal of the American Association for the Advancement
of Science, Philadelphia, 1962.
U.S. Department of the Interior. Report to the Panel on Civilian Technology on
Coal Slurry Pipe Lines, May 1962 (Mimeo).
Snouffer, R. D. and Hansen, Victor D. “ The Unit Train, Planning, Operating,
Financing,” Coal Age, March 1964, pp. 54-61.
“ How Tunnelton Designed for Unit Train Shipment,’’ Coal Age, April 1964, pp.
78-87.
Woomer, J. W. New Frontiers in the Coal Mining Process. Paper delivered before
the Coal Symposium of the American Association for the Advancement of Science,
Philadelphia, 1962.
Federal Power Commission. The National Power Survey, Washington, October 1964.
Evans, M. Albert. “ Longwalling with Powered Roof Supports,” Coal Age, Septem
ber 1963, pp. 82-90.
Shupe, D. B. “ Longwall Progress at Eastern Associated Mines,” Coal Age, Septem
ber 1964, pp. 76-78.
26
Selected R eferences— Continued
Manpower Trends and Adjustments
Technological Change and Productivity in the Bituminous Coal Industry, 1920-1960
(BLS Bulletin 1305, 1961).
Industry Wage Survey, Bituminous Coal Mining, November 1962, Pts. I and II
(BLS Bulletin 1383, 1963).
“ The Coal Miners and the New Coal Contract,” Monthly Labor Review, May 1964,
p. III.
Sail, George W. “ Advancing Technology Saves an Industry,” Mining Congress
Journal, February 1965.
Vogely, William A. “ Technological Change and Demand,” Monthly Labor Review,
August 1964, pp. 891-892.
Christenson, Carroll L. Economic Redevelopment in Bituminous Coal, Boston,
Harvard University Press, 1962.
The Crude Petroleum and Natural Gas Industry (SIC 1 3 )
tanks, and gathering lines used to operate oil
wells. Using a LACT system, oil is automati
cally pumped, sampled, monitored, metered, and
transferred through treating facilities to trans
mission pipelines for shipment to refineries.
While initially, LACT units were installed on
individual leases, systems for transferring the
production of adjoining leases or entire fields
are being introduced.
By the end of 1963, there were more than
1,500 LACT units handling about 50 percent of
crude production in Colorado, Kentucky, Utah,
and Wyoming. LACT has been adopted more
rapidly by large producers who have more leases
and can be more flexible in the introduction of
new equipment. The greater economies from
large operations are facilitating the trend
towards LACT centralized operations.
Computers are being introduced in conjunc
tion with centralized LACT systems. One new
LACT system being installed will use a digital
computer for automatic remote control. As
many as 2,000 wells in this system can be moni
tored and controlled from a central location.
Another installation is monitoring 270 operat
ing wells in five isolated oil fields as far away
as 160 miles from the company’s operating
center. The system monitors performance and
logs data on a continuous basis.
According to surveys by the Oil and Gas Jour
nal, the largest savings achieved by LACT
systems have come from reduction of labor
spent in manual gaging and switching of tanks.
Capital investment is saved, since fewer stor
age and transfer tanks are needed. It is claimed
that substantial savings are also realized with
LACT through greater accuracy of measure
ment and better quality control and equipment
maintenance. The advantage of the computer,
added to the already great savings in labor and
investment achieved by using automatic de
vices, is greater control over the system and an
increased ability to handle detail.
Summary of Outlook Through 197 0
Over the next few years, output is expected
to increase at a faster rate than in the past
10 years. Drilling activity is expected to rise
slightly, and production of oil and gas to con
tinue a steady increase. Major technical devel
opments are taking place in all phases of the
industry, including advances in offshore opera
tions; in drilling, both offshore and on land;
in secondary and thermal recovery from heavy
oils; in recovery from shale oil and tar sands;
and in gas processing, storage, and transporta
tion. Wider application of computers and auto
matic control is anticipated. Employment is
likely to be moderately lower in 1970.
Outlook for Technology and Markets
Some improvement is expected in the industry’s
slow rate of growth in production. The industry
includes exploration, drilling, oil- and gas-well
operation and maintenance, operation of gas
plants, and the operations of gathering lines.
Total production of this industry, according to
the Federal Reserve Board index, grew at an
average annual rate of 4.6 percent between 1947
and 1957, and only 1.1 percent a year between
1957 and 1964.
The rate of growth in crude oil output be
tween 1947 and 1957 averaged 3.5 percent annu
ally, compared with a rate of 1 percent between
1957 and 1964. New industrial markets for
natural gas and gas liquids, and conversion by
utilities to natural gas following construction
of pipeline networks, resulted in an increase
in the rate of output of 8 percent annually
between 1947 and 1957. The average increase
in output of 4.8 percent a year between 1957
and 1964, may be increased somewhat as new
uses and products are developed.
011 production is being automated rapidly by
means of a method called “ lease automatic cus
tody transfer” (LACT). LACT equipment, in
troduced in 1955, includes an electrical and
pneumatic system of instruments and controls
for the pumps, treating equipment, storage
Applications for computers are growing. Com
puters are being introduced in exploration,
discovery and drilling, for data logging and
analysis; in recovery and pipeline transfer op
27
28
erations for program'scheduling; and in engi
neering and research for process simulation and
systems analysis. The number of digital com
puters for process control in use by the industry
increased from three at the end of 1963 to nine
by March 1965.
Data-processing systems are also being intro
duced for storage and retrieval of information
related to research and exploration. One such
system will include information on 500,000 oil
and gas wells in a six-State area. Referred to
as the Mid-Continent Well Data System, it will
be operated on a share basis by oil companies
in the area. In another system, stored geophysi
cal data can be recalled, sorted, and calculated
with simplified programing so that scientists
can use the system without programing special
ists. Such systems, in addition to saving labor
and paperwork, give the user greater control
over a wider range of material and free him
from routine duties.
Exploration and drilling operations are becom
ing more efficient. There is an increasing trend
toward deeper exploration and more thorough
analysis of information on older fields. Im
provements in discovery techniques utilize elec
trical, gravimetric, magnetic, and seismic meth
ods. Aerial photography, or photogeology, is
using infrared techniques and efforts are be
ing made to apply lasers for scanning. Use of
computers for processing geophysical data in
discovery operations has been increasing. Elec
tronic data processing is being used with seis
mic instruments and continuous logging.
As drilling activity has declined, there has
been greater attention to reducing operating
costs. New deep drilling equipment, including
slim hole equipment, the turbo-corer, percussion
drilling, the downhole electric motor, and flex
ible drill stem, are some of the methods being
developed to make deeper operations more
economical.
Drilling and servicing operations are being
facilitated by using lighter equipment, includ
ing aluminum drill pipe and gas turbine power
plants which make possible prefabricated and
portable drilling rigs. Aluminum drill pipe is
being used, especially in deeper wells, because
it is lighter, more elastic, and more corrosion
resistant than steel pipe. Automation of drill
ing operations is being extended by use of auto
matic pipe handling systems and electronic in
strumentation including continuous monitoring
and sampling.
Improved techniques are being used in oil ivell
servicing, secondary recovery, and development
of new oil deposits. Increasing attention is be
ing given to maintaining pressure at producing
wells by various techniques which include the
secondary recovery of older fields and the re
covery of heavier oils. In addition to the injec
tion of water or gas or combinations of both,
new developments include the use of a range of
chemical solutions, enriched gas to maintain
well pressures close to original levels, and
thermal methods.
Since 1952, there has been a steady increase
in thermal projects using heated water, steam,
and underground combustion. In 1963, there
were about 100 such projects and about 20 new
projects were being started. Forcing steam at
about 400°F through a special injection well
into the formation has been found to increase
production by about 10 times. Combustion or
in situ fireflooding recovery involves the injec
tion of gas and air into the oil bearing forma
tion. In one such project, involving injection
wells and 55 producing wells in a 480-acre area,
production was increased in some wells by
20 times.
Secondary recovery of older fields accounted
for about 17 percent of total production in 1950,
increased to 33 percent in 1963, and is expected
by the U.S. Bureau of Mines to rise to 38 per
cent by 1970. Efforts are being made to apply
thermal recovery methods to the primary pro
duction of heavy oil deposits in California, Wyo
ming, Oklahoma, Texas, Missouri, and Kansas
where large reserves of crude oil are too heavy
to be produced by conventional methods.
Offshore activities are increasing rapidly. Off
shore wells drilled increased from 248 in 1954
to 707 in 1963. Over 2,700 offshore wells pro
duced about 175 million barrels of oil, an in
crease of more than 500 percent over 1954, and
767 billion cubic feet of gas, an increase of
almost 900 percent over 1954. Offshore areas
of Louisiana are major centers of operations,
and drilling in the area is projected to increase
29
EMPLOYMENT AND OUTPUT IN THE CRUDE
PETROLEUM AND NATURAL GAS INDUSTRY
Sources:
Employment, Bureau of Labor Statistics; output, Federal Reserve Board.
30
about 3 percent annually through 1970. Texas
and California also have offshore operations and
some development is underway in Alaska, Ore
gon, and Washington.
Improvements in offshore technology are
making possible the expansion of operations
into deeper waters beyond State jurisdictions,
on leases from the Federal Government. Be
ginning at about 40 feet in 1950, drilling is now
carried on in water as deep as 600 feet with
possible future depths of at least 1,000 feet.
A change from stationary platforms to mobile
drilling rigs and subsea wellheads, oil storage,
and pipelines has extended the range of drilling
and production.
Advances in subsea working methods and
equipment include the use of remote control
systems and development of work submarines
and diving bells. Divers have extended their
working depth to 500 feet and it is claimed that
improvements in equipment in a few years will
enable men to work at 1,000 feet. However, it
is claimed that new robots—mechanical apparata manipulated from the surface— are faster,
more agile, can do heavier and more complex
work for longer periods and at greater depths,
and with greater freedom from interruption in
rough weather. Television is being used to
monitor robot underwater operations.
Gas 'processing capacities are growing rapidly.
The number and size of plants for treating natu
ral gas (elimination of impurities) and for pro
ducing gas liquids have shown steady increases.
There were 839 plants in 1964, with an average
output of 66.3 million cubic feet a day, com
pared with 783 plants averaging 60.6 million
cubic feet a day in 1962. Most new gas proc
essing plants are larger, are more highly
automated, and have lower maintenance re
quirements. The new plants, using refrigerated
absorption, produce liquids more efficiently and
with lower operating temperatures.
The increasing production of natural gas and
gas liquids is made possible by rapid growth in
transmission and storage capacity. Storage ca
pacity of underground pools for natural gas
increased 15 times between 1947 and 1963; un
derground storage capacity for gas liquids grew
from about 200,000 barrels in 1950 to nearly
98 million barrels in 1963.
Research and development (R&D) activities are
increasing. Development of oil shale deposits
in Colorado, Utah, and Wyoming and the tar
sands of Alberta, Canada, is a major area of
research activity. Although years of R&D ap
parently are making commercial production
feasible, these sources are expected to have only
a minor impact on production in the next 5 to
10 years.
From the oil shale deposits (marlstone that
contains kerogen) having an estimated reserve
of 1 to 2 trillion barrels, about 80 billion barrels
of oil are believed to be economically recoverable
using existing technology. Ability to exploit
these deposits would increase known reserves
manyfold. Separation methods being consid
ered include heating mined shale either by cook
ing in a retort, by burning, or by passing heated
gases or liquids through the shale. Another
possibility is in situ combustion in which the
shale is fired as situated underground. A num
ber of oil companies are engaged in research on
commercial methods for producing oil from the
Alberta tar sands, reserves of which are esti
mated at 300 billion barrels.
Other activities include R&D on tools and
instruments for exploration, drilling, and ex
traction. Experimental projects by government
agencies are providing more advanced equip
ment and methods. The National Science Foun
dation has committed about $72 million to
Project Mohole. The Atomic Energy Commis
sion, in conjunction with its underground test
ing program, also is providing information that
is useful for advancing industry technology, and
the U.S. Bureau of Mines conducts and supports
research and development on a wide range of
drilling and recovery problems.
Manpower Trends and Adjustments
Employment is likely to decline moderately.
Total employment in the crude petroleum and
natural gas industry declined from 344,000 in
1957 to 288,600 in 1964, an average annual
decrease of about 2.4 percent. During 1947-57,
employment had increased. The faster growth
of output over the next few years is not ex
pected to be sufficient to offset improved meth
ods, resulting in a moderate decline in employ
ment.
31
Average annual percent change
All employees
1947-57 __________________________________
3.3
1957-64
-2 .4
Production workers
1947-57 _____________ , ___________________
2.4
1957-64 ___________________________________ - 3 . 8
Output
1947-57 __________________________________
4.6
1957-64 __________________________________
1.1
Production worker jobs have been declining
more rapidly than total employment. As a per
cent of total employment, production worker
employment fell from 77 percent in 1957, to
about 70 percent in 1964. Between 1950 and
1960, according to the U.S. Bureau of the Cen
sus, the proportion of professional and technical
workers increased from 9 to 14 percent, while
laborers declined from 51 to 41 percent.
The introduction of LACT systems probably
will mean a greater decline of pumpers than of
other occupations in extraction operations. The
duties of pumpers, an occupation accounting for
half of the field employment in 1960, involve
adjusting valves, reading meters, making daily
production reports, and checking pressures in
gaging and switching of tanks. Many of these
duties under the LACT system are performed
automatically and are subject to remote control.
With decreases in drilling activity, total em
ployment in drilling oil and gas wells declined.
Roughnecks, who perform the least skilled
duties in drilling operations and constituted the
largest occupational group in drilling in 1960,
have experienced considerable declines. Future
increases in drilling activity may result in
shortages in specific occupations such as rotary
drillers, although employment levels are ex
pected to remain low.
Some union-management agreements contained
job security provisions. Of the 21 major agree
ments studied (effective in 1965), four con
tained provisions for severance pay. In addi
tion, 12 of the agreements contained provisions
concerned with reduction-in-force procedures,
including job transfer rights, and 10 specified
limits on minimum work crew size.
Selected References
An Appraisal of the Petroleum Industry of the United States. U.S. Department of
the Interior, January 1965.
Farrar, G. L. “ Computer Control in the Oil Industry/’ The Oil and Gas Journal,
Oct. 26, 1964, pp. 89-119.
Farrar, G. L. “ Petroleum Engineering” in McGraw-Hill Yearbook of Science and
Technology, 1964, McGraw-Hill Inc., New York, 1964.
Fisher, F. M. Supply and Costs in the U.S. Petroleum Industry, Johns Hopkins
Press, Baltimore, Md., 1964.
Hobbs, Mel. “ Advancements in Drilling Industry,” World Oil, Feb. 15, 1965, pp.
67-76.
Lawrence, C. J. “ New Robot is Deep-Sea Roughneck,” The Oil and Gas Journal,
July 15, 1963, pp. 108-116.
“ Oil Makes Deepwater Plans,” The Oil and Gas Journal, Dec. 28, 1964, pp. 81-85.
Scott, John. “ Louisiana Offshore,” Petroleum Management, July 1964, pp. 73-87.
Wage Structure: Crude Petroleum and Natural Gas Production, 1960. (BLS Report
181, March 1961).
de Nevers, Noel. “ The Secondary Recovery of Petroleum,” Scientific American,
July 1965, pp. 35-42.
The Contract Construction Industry (SIC 1 5 , 1 6 , and 1 7 )
Outlook for Technology and Markets
dollars, annual increases in output amounted to
9.4 percent and 4.2 percent, respectively.
Comparison of projections of the value of
new construction in constant dollars from four
major industry authorities shows an expected
annual increase of about 3 to 5 percent between
1965 and 1970, an annual increase well above
that for the 1957-64 period. Of the various
types of construction, housing (which accounted
for 40 percent of new construction in 1964),
and highway construction probably will lead in
this anticipated growth, reflecting an expected
sharp rise in household formations and con
tinued activity in the Interstate and Defense
Highways program. Construction of plants and
office buildings should increase. Government
programs such as aid to urban transportation,
aid to schools, and urban housing development
contribute to the prospect for a high rate of
growth through 1970.
Output of construction for the next 5 years is
expected to rise at a faster rate than during the
1957 to 196U period. The average annual in
crease in output as measured by value of new
construction put in place (contract construction
comprising about three-fourths of this total) in
1957-59 dollars was 5.4 percent during the
1947-57 period, and 2.4 percent during the
1957-64 period. When measured in current
Improvements in earthmoving machinery are
resulting in increased efficiency. Continuing
increases in the size, capacity, power, speed, and
durability of earthmoving equipment, such as
trucks, tractors, scrapers, and shovels, are re
sulting in the moving of many times the amount
of material that was previously possible, and
occasional reductions in operating labor. For
example, scrapers now have speeds double those
Summary of Outlook Through 197 0
Changes in technology in the construction
industry are expected to continue to evolve
slowly as more efficient production equipment,
improvements in materials handling, increased
prefabrication of building components, changes
in architectural and engineering design, and
new and improved construction materials are
adopted. These technological changes are ex
pected to continue to reduce unit labor require
ments, but the effects on employment will be
more than offset by the anticipated increases in
growth in construction. Employment in skilled
trades is expected to increase, but at uneven
rates because of the varying effects of tech
nology. Employment of laborers will probably
increase only slightly over the 1965 level.
33
of a few years ago and two or three bowls,
rather than one, each with 50 percent greater
capacity. Earth augers that dig shafts and
mechanical moles that bore tunnels are replac
ing much hand labor and a number of smaller
machines in tunnel, sewer, and pipeline con
struction. A machine called the “ octopus,”
essentially a tractor with a front-end loader
and back hoe, replaces two or three pieces of
equipment and their operators and is increas
ingly being used in a wide variety of small exca
vating jobs. Wheel excavators of the type used
in strip mining, first introduced in construction
in 1964, dig, convey, and load material continu
ously and, compared with conventional shovels,
significantly increase speed of excavation for
dams, reservoirs, and other extremely large
earthmoving projects. At least three wheel
excavators are used in the industry and pros
pects for more widespread application are
favorable.
Netv 'portable construction equipment and hand
tools are increasingly being introduced. This
equipment, used in all types of building con
struction to reduce unit labor requirements, job
costs, and completion time, includes power
trowels, paint and plaster spraying guns, power
nailing and stapling machines, and motorized
wheelbarrows. The use of plaster spraying
guns and pumping machines, for example, can
reduce considerably the time required to apply
plaster. This equipment doubles the amount of
plaster a worker can apply in a day and enables
a single plasterer to keep a larger number of
workers busy to flatten and smooth the freshly
sprayed plaster.
Advances in material-handling equipment con
tinue to minimize handling problems and to de
crease manpower requirements. Improvements
in forklift trucks, conveyor-belt systems, motor
ized wheelbarrows, pneumatic pipe systems, and
conventional cranes are facilitating the moving
and handling of construction materials.
Another important development in material
handling is the tower crane. Introduced into
this country f v
,om Europe around 1959, tower
cranes numbered an estimated 300 in 1963, have
increased in use, and are expected to have wide
spread use in the future. Especially useful in
the construction of tall buildings, tower cranes
can be used to deliver material to any part of
the top of a tall building— not just near the edge
as do conventional crawler cranes— and to hoist
material to greater heights. Because tower
cranes can be used to deliver material where it
is required, labor crews normally needed to shift
material about when using conventional cranes
are significantly reduced. For example, the use
of a tower crane in the construction of one build
ing enabled the reduction of crews of men work
ing with concrete from 20 men to 5. In another
job, one tower crane replaced two crawler
cranes.
Significant advances continue to be made in pav
ing. Major advances in both asphalt and con
crete paving, which are improving the quality
of highways and reducing unit labor require
ments, construction costs, and completion time
of construction jobs, include more portable and
automatically controlled mixing plants; larger
capacity and higher speed transit mix trucks;
and more automatic, electronically controlled
grading and paving machines.
Still another significant advance in concrete
paving is the slip-form method which eliminates
the fixed side forms used in conventional pav
ing. Instead, forms are a part of the paving
machine (slip-form paver) and slide forward
with it leaving the concrete slab edges unsup
ported. This method of paving reduces costs
by eliminating the need for crews to erect and
remove forms. In addition, one slip-form paver
can do the work of three conventional paving
machines, thus reducing the number of ma
chine operators and concrete finishers required.
Accepted for production use in the last decade,
52 slip-form pavers are now used throughout
the country. Some experts predict that in 10
years all concrete highways will be built by
slip-form paving. Slip-forming techniques are
also being increasingly applied to airport run
way construction, to parking lot paving, and,
more recently, to the construction of concrete
walls of buildings.
Further progress in improving paving meth
ods and techniques may result from standard
ization of highway construction specifications
now being considered by the Bureau of Public
Roads, the American Association of State High-
34
EMPLOYMENT AND VALUE OF NEW CONSTRUCTION IN THE
CONTRACT CONSTRUCTION INDUSTRY
Billions of Dollars
8 0
i--------------------------------------------------------------------------------------------------------
VALUE OF NEW CONSTRUCTION
20
—
0
I
19 47
Sources:
'49
1
'51
'5 3
[
'55
'5 7
I
'59
'61
I
'6 3
Employment, Bureau of Labor Statistics; value of new construction, Bureau of the Census.
1965
35
way Officials, and other highway construction
organizations.
Standardization of dimensions of construction
materials and in design (modular coordination)
decreases labor and material requirements.
Since 1956, the U.S. Army Corps of Engineers
has required modular coordination for all its
projects and the Veterans Administration for
its hospitals since 1960. This system, utilizing a
standard unit of measurement of 4 inches and
its multiples, also is gaining in use in commer
cial construction. Of the 878 products listed
in the 1963 edition of Building Products Regis
ter which could be modular, 505 were available
in modular sizes.
Modular coordination enables contractors to
make more rapid and accurate estimates and
affords reductions in on-site labor and materials
costs. The Modular Building Standards Asso
ciation claims that this system can result in a
7- to 10-percent saving in total construction
costs. According to a contractor who has used
both modular and nonmodular materials on
similar projects, the savings in field labor are
about 10 to 15 percent, overall labor savings
from 1 to 6 percent, and there are additional
savings in materials and time. For architects,
the principles of modular coordination enable
designing to be done faster and more accurately.
For manufacturers, the standardized system of
measurement could mean smaller inventories,
reduced cataloging, and mass-production econo
mies.
The trend toward prefabrication (preassembly
of building components in manufacturing
plants) will accelerate. According to the Home
Manufacturers Association, annual production
of prefabricated houses may more than double
between 1964 and 1975. Prestressed concrete
structural elements used for larger buildings
and heavy construction, such as beams, roof and
floor slabs, columns, and pilings, may increase
by 150 percent between 1964 and 1970.
Among the major factors contributing to this
advancing trend toward prefabrication are
the significant savings possible in time, mate
rials and on-site labor requirements, the higher
degree of quality control possible in factories,
and the greater opportunities for economies of
large-scale production and mass-production
techniques in construction. For example, a
carpenter can install a complete prefabricated
door (prehung in its frame with hardware
attached) in about one-tenth to one-sixth the
time usually required to hang a door in the
conventional manner. According to one home
builder, the walls and roof of a conventional
wood-framed house which require about 500
man-hours to build on-site, can, with prefabri
cated components, be built (including off-site
manufacture of components and on-site erec
tion) in 200 man-hours or less.
Prefabrication of building components in fac
tories makes possible significant reductions in
labor required in construction (SIC 15, 16, and
17) while facilitating increases in employment
in industries supplying construction materials.
New and improved materials continue to reduce
significantly material and labor costs. By 1970,
new products introduced during the decade of
the 1960’s are expected to account for a sub
stantial portion of all building products sold in
this country, reflecting the continuing advances
in plastics, steel, concrete, paints, and other
materials.
Plastics offer the advantage of ease of han
dling, ease of maintenance, and ability to be
molded to extremely close tolerances and, thus,
are expected to be widely used for an increasing
number of applications such as piping, interior
wall panels, exterior wall sections, insulation
and moisture proofing, and roofing. Prestressed
concrete products, expected to double in sales
by 1970, offer considerable labor and other cost
savings in many uses. Developments in struc
tural design using high strength steel products
can reduce the frame weight of buildings by as
much as one-half in some instances, thereby
resulting in significant material and labor cost
savings. Aluminum siding, increasingly used
for all types of buildings, can already be ob
tained with a factory finish guaranteed to last
30 years, reducing significantly manpower
needs for exterior maintenance. Laminated
wood beams, considered less expensive in some
spans and more fire resistant than materials
conventionally used, are being used increasingly
in the construction of warehouses, retail stores,
and light industrial and commercial buildings.
36
New paints require less on-site preparation,
flow more smoothly, go on in fewer coats, and
last longer, thus reducing costs and substan
tially reducing maintenance requirements. Ad
hesives are being more widely used to save time
and reduce costs in floor bonding, exterior wall
section fabrication, and in drywall erection.
Because of its excellent fire-retardant qualities
and low cost, gypsum board will probably in
crease in use for interior wall systems in com
mercial and residential buildings.
Improvements in design are continually being
made. New concepts of architectural and en
gineering design make possible cost savings and
productivity increases. More than a dozen new
structural design concepts— all directed toward
the economical utilization of space, materials,
and the lowering of costs— have emerged since
1945. For example, plastic design, which en
ables an engineer to design beyond the elastic
limit of steel, resulted in the construction of
a warehouse for which 841 tons of steel were
used, 141 tons (about 14 percent) less than the
conventional design required. Space frame de
sign, as used in thinshell construction, which
utilizes form rather than the property of the
materials to derive strength, will probably be
come more prevalent now that electronic com
puters are available to overcome the difficulty
of manually performing the lengthy and timeconsuming mathematical analysis required.
New systematic scheduling techniques are gain
ing acceptance among large contractors on com
plex projects. Techniques such as the Program
Evaluation and Review Technique (PERT) and
the Critical Path Method (CPM ), particularly
when used in conjunction with electronic com
puters, significantly improve management’s
capability to plan, schedule, coordinate, and
monitor all steps involved in the completion of
a complicated construction project. Basically,
PERT and CPM are systems for charting the
workflow of an entire construction project in
detail. They provide a fast and flexible means
of estimating the time required for each con
struction operation and completed project; of
identifying potential bottlenecks; of coordinat
ing interdependent operations; and of allocat
ing and optimizing labor, materials, and equip
ment in order to reduce the total cost and
performance time. These new scheduling tech
niques also are being used increasingly by large
contractors to aid in multiproject planning,
subcontracting, and preproposal planning.
Computers are being used increasingly for a
variety of functions. Used mainly by large con
tractors engaged in large scale heavy construc
tion and in commercial and industrial building,
computers are being utilized to aid in design,
production scheduling, subcontracting, and bid
estimating. In bridge design, for example, com
puters are being used to help designers deter
mine alternative designs for structures and the
stresses that construction materials will convey.
Currently, practically all State highway depart
ments and the U.S. Bureau of Public Roads use
computers as an aid in highway and bridge
construction.
Manpower Trends and Adjustments
Employment may exceed its 1957-6U average
annual rate of increase. Total employment in
creased from 2 million in 1947 to 2.9 million in
1957, an average annual rate of 4 percent. By
1964, employment had increased to 3.1 million
at an average rate of 0.6 percent annually since
1957. Construction worker (production) em
ployment followed the same pattern but at
slightly lower levels during both periods.
Growth in employment over the next 5 years
may exceed that of the 1957-64 period because
of an anticipated rise in construction activity.
Average annual percent change
All employees
1947-57 ____________________________________
4.0
1957-64 __________________________________
.6
Construction workers
1947-57 ____________________________________
3.7
1957-64 __________________________________
.4
New construction put in place, value in 1957-59
dollars
1947-57 ____________________________________
5.4
1957-64 ____________________________________
2.4
New construction put in place, value in current
dollars
1947-57 ____________________________________
9.4
1957-64 ____________________________________
4.3
37
However, employment will not grow as rap
idly as construction volume because continued
technological advances permit greater output
per worker.
Extent of increase in employment will vary
among skilled workers. Employment of con
crete finishers, plumbers and pipefitters, roof
ers, structural-metal workers, lathers, and
sheet-metal workers will probably grow faster
than that of other skilled workers in construc
tion because technological changes affecting
their trades are not expected to offset the em
ployment generated by the anticipated increase
in volume of construction. The number of jobs
for operating engineers, bricklayers, stonema
sons, tile and marble setters, slaters, electri
cians, and plasterers is expected to increase at
or about the average for all trades because the
expected increase in the need for their skills will
be offset to some extent by new equipment, new
methods, and increasing use of prefabricated
components. Employment of painters and car
penters is expected to increase less than that
of most skilled workers mainly because of
longer-lasting, easier-to-apply paints and off
site preparation of materials, which make pos
sible reductions in construction employment
while generating employment in the industries
which produce the building materials.
Changes in technology will slotv employment
growth of construction laborers. Employment
of laborers (including helpers and tenders),
who numbered nearly 800,000 in 1964, is ex
pected to grow only slightly because such func
tions as loading and unloading materials at the
worksite, shoveling and grading earth, stacking
and carrying materials, and other laboring
tasks are generally being mechanized. For ex
ample, the use of pumps and conveyors instead
of conventional wheelbarrows to move concrete,
utilization of slip-form paving, and the substi
tution of tower cranes for conventional cranes
tend to reduce laboring crews by one-half or
more.
Increased winter activity may mitigate widely
fluctuating employment. Due to the highly sea
sonal nature of construction work in most parts
of the country, over one-third more construction
workers are employed in the summer than in the
winter. In 1964, for example, total employment
ranged from 2.5 million in January to 3.4 mil
lion in July and August. Advances in con
struction techniques and materials, however, if
widely adopted may tend to reduce these wide
fluctuations in the future. One of the most
important methods facilitating winter construc
tion is the sheltering of the building site by a
wood frame covered with sheet plastic.
Retraining programs promote new techniques.
In 1964, there were over 340 training programs
for journeymen plumbers and pipefitters re
sulting from the plan established by the plumb
ers’ and pipefitters’ union in 1955 to retrain
older craftsmen in new techniques. Similar
programs have been established by other build
ing trade unions. Also, retraining for eligible
unemployed construction workers is provided
for under the Manpower and Development
Training Act; for example, 200 unemployed
members of a 3,600-man local of the Union of
Operating Engineers have been trained in the
operation of the latest construction equipment.
Multiplicity of diverse building codes creates
problems in the introduction of new materials.
Nonstandardized and static building codes
throughout the country frequently do not pro
vide for the use of new construction materials
and methods. For example, use of some prefab
ricated components and plastic pipe is not per
mitted by codes in many localities. Such groups
as urban and suburban developers, contractor
and architect associations, and local govern
ments are promoting the replacement of tradi
tional codes, which specify the materials to be
used, by codes under which performance re
quirements determine the material that can be
used. One potential advantage of such a change
is a substantial reduction in construction cost.
A developer who built houses in two adjoining
areas— one under a traditional code, the other
under a performance code— claims that there
was a substantial differential, favoring the per
formance code, on identical houses.
38
Selected R eferences
Technological Developments
“ The Big Change in Today’s Prefab Market,” House and Home, December 1964,
pp. 69-77.
“ The Building Industry,” The Role and Effect of Technology in the Nation’s Econ
omy part 5. Hearings before a Subcommittee of the Select Committee on Small
Business, U.S. Senate, 88th Cong., 1st sess., 1964, pp. 607-628.
“ Construction Equipment,” Engineering News-Record, Feb. 21, 1963, pp. 43-72.
Lokken, E. C. “ What’s New in Concrete Paving,” Civil Engineering, March 1964,
pp. 54-57.
“ Modular Building, Is It Reducing Construction Costs?” Constructor, November
1963, pp. 25-27.
“ The New Housing Industry: part 7, Technology’s Promise and Performance,”
House and Home, November 1963, pp. 83-117.
“ New Methods Gain for Walls, Framing, Thin Shells,” Engineering News-Record,
Jan. 23, 1964, pp. 54-56.
Ray, Gordon K. and Harold J. Halm. “ Fifteen Years of Slip-Form Paving,” Journal
of the American Concrete Institute, February 1965, pp. 145-159.
Stern, E. L. “ Productivity Gains Hold Down Rise in Road Building Costs,” Engi
neering News-Record, Sept. 16, 1965, pp. 94-95.
“ Useful Nuclear Explosives,” International Science and Technology, February 1965,
pp. 54-60.
Manpower Trends and Adjustments
Ball, Claiborne M. “ Employment Effects of Construction Expenditures,” Monthly
Labor Review, February 1965, pp. 154-158.
Beinhauer, Frank H. “ A Hard Look at Apprentice Training in Construction,”
Constructor, February 1965, pp. 38-40.
Clague, Ewan. “ The Economics of the Construction Industry,” Constructor, Feb
ruary 1965, pp. 22-24.
Kelly, Edward T. “ New National Joint Board for Settlement of Jurisdictional
Disputes,” Constructor, March 1965, pp. 26-27.
Kheel, Theodore W. “ How the 25-Hour Week Has Worked,” Jobs, Men, and
Machines, Charles Markham, editor, Frederick A. Praeger, 1964.
Manpower Needs in the Construction Industry, Building and Construction Trades
Department, Executive Council, AFL-CIO, November 1963.
The Lumber and W ood Products Industry (SIC 2 4 )
cent, respectively, in 1962.) Consumption of
plywood is increasing because it covers a given
area more rapidly than previously used ma
terials.
Summary of Outlook Through 1970
Output of the lumber and wood products in
dustry will continue to rise slowly, with more
rapid growth in plywood, veneer, particle board,
and miscellaneous wood products. Because of
continuing modernization of sawmills and plan
ing mills and continuing competitive inroads on
wood markets by other materials, employment
may be somewhat lower by 1970 than in 1964.
New opportunities are opening in the expanding
sectors, especially in the South.
New lumber products are being developed to
enhance wood’s competitive position. Lumber
and laminated wood products, for example, are
treated with fire-retarding chemicals allowing
wood to compete more effectively with nonflam
mable materials in structural uses. Chemical
treatment for wood preservation against insect
and water damage also will aid wood’s competi
tive position.
Overlays of plastic and resin impregnated
paper on lumber may allow lower grades to be
used for siding and other purposes requiring
weather resistance or good paintable surfaces.
Use of overlays reduces maintenance and may
provide competitive cost advantages. The tech
nique holds promise for future use, although
limited at present to use on plywood.
Outlook for Technology and Markets
Output of lumber and wood products will con
tinue to expand gradually. The Federal Re
serve Board’s index of output increased at an
annual rate of 0.8 percent between 1947 and
1957, but nearly three times faster between
1957 and 1964. Lumber production for 1970 is
projected by the U.S. Forest Service at 34.6 bil
lion board feet— about 4 percent above 1962;
and for 1980, about 13 percent above 1962. Ply
wood production is projected to require 9 billion
board feet of timber in 1970— about 52 percent
above the amount required for the 1962 output;
and for 1980, about 80 percent above the 1962
level.
Industry SIC 24 contains five 3-digit indus
tries: SIC 241— logging camps and contrac
tors ; SIC 242— sawmills and planing mills; SIC
243— millwork, veneer, plywood, and prefabri
cated structures; SIC 244— wooden containers;
SIC 249— miscellaneous wood products.
By 1970, per capita lumber consumption,
according to U.S. Forest Service estimates, will
be about 5 percent lower than in 1962; by 1980,
about 10 percent lower. On the other hand, per
capita consumption of veneer and plywood in
1970, compared to 1962, is expected to have
increased by about 34 percent and by about 42
percent in 1980. (Of total lumber and plywood
consumption, imports constituted 11 and 13 per
Portable tower which replaces natural spar tree is used to
assemble logs for shipment to the mill.
39
40
Some finishes on wood now are cured rapidly
by irradiation and irradiation of wood impreg
nated with plastics has resulted in increases in
some strength characteristics of as much as
100 percent. While the latter application for
irradiation is not yet economically feasible,
research aimed at lower costs continues.
New harvesting and transportation equipment
and techniques are increasing logging efficiency.
The natural spar tree (tree with top removed),
used to assemble logs at a central loading point
for shipment to the mill (high lead logging),
is being replaced by a portable steel spar. About
350 of the latter were in use in 1964 and one
official of a major producing firm expects them
soon to replace the natural spar completely in
that company’s operations. Portable spars com
bine strength with mobility, can be rigged in
2 to 3 hours compared to the 2 to 3 days re
quired for natural spar tree rigging, and handle
more logs per hour.
Where yarding is not done by high lead
methods (natural or portable spar), improved
tractors assemble logs more quickly at central
loading areas. New front end loaders and lift
ing equipment shorten time required to put
these logs on trailers, and improved techniques,
such as preloading of trailers, further increase
the number of logs handled per hour.
For harvesting smaller diameter logs, two
new machines eliminate much manual labor.
The smaller “ mechanical lumberjack” cuts pulp
wood size trees up to 19 inches in diameter.
Operated by one man, this machine cuts off the
tree, felling always in the same direction, then
picks it up, delimbs, and cuts it into 6 to 8-foot
lengths which are caught and held in a sling
which then opens to drop logs on the truck.
Twenty-five of these machines are already in
use for pulp wood operations in several south
ern locations. The larger machine, costing about
$60,000, may be used to delimb and fell trees
up to 24 inches in diameter and can produce
hourly the daily output of an experienced logger
equipped with a chain saw. Six of these ma
chines are in use in the United States.
Experiments continue on use of helicopters
and on balloon logging. Balloons may be feasible
over difficult terrain where conventional high
lead logging can not be used. Present experi
ments indicate that they would be economically
competitive in many situations, although still
under development. The helicopter is limited in
possible use. Logs large enough to be used for
lumber may be hauled by helicopter, but part
of its lift capacity may not be used because two
logs may be over the helicopter’s capacity. This
limit on lift capacity, combined with high op
erating costs, may restrict usefulness of heli
copters in harvesting. One study indicates that
to utilize carrying capacity fully, the hauling of
small pulp logs would constitute the ideal heli
copter use.
Saivmills are increasing their efficiency through
use of better saws. High-speed gang saws,
known as “ scragmills,” are being used exten
sively in the manufacture of studs from small
logs. These mills use two or more circular saws
mounted on the same mandrel to reduce the log
to cants 4 inches thick. The cants are further
reduced by a second set of saws to 2 x 4-inch
studs. Scragmills substantially reduce the cost
of producing studs. Some of the new saws used
on secondary sawing equipment are thinner,
thereby removing a smaller kerf (the amount of
wood that is turned into sawdust) and are
coated with carbide steel to extend their use
between sharpening. These saws reduce work
done by the skilled saw filer, although new skills
and machinery are needed.
Another innovation in sawing— the Griffin
Mill— uses a succession of circular saws, each
saw taking a deeper cut than the preceding one.
Lower power requirements and reduction in
waste, because of the use of its sawdust parti
cles suitable for pulping, are some advantages.
A newly introduced special chipper reduces
small logs directly to cant size (sides squared)
by chipping the sides, rather than sawing them,
and saves labor in handling of slabs. Formerly,
a log was reduced to cants by sawing off the
sides, thus producing waste slabs later con
verted to chips.
Mechanical graders increase efficiency in grad
ing of lumber. A recently developed electrome
chanical stress grader (machine grading is
presently limited to lumber no greater than 2
inches in thickness) may result in more efficient
use of structural lumber. When visual methods
41
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES IN
LUMBER AND WOOD PRODUCTS
Thousands of Employees
Index (1957-59=100)
Ratio Sca)e
Millions of Dollars
400
300
200
100
0
19 5 1
Sources:
'5 3
'5 5
'5 7
'5 9
*6 I
'6 3
1965
Employment and output, Bureau of Labor Statistics; expenditures, Bureau of Census
42
of stress grading are used, architects usually
tend to specify larger than necessary material
to assure required strength. The machine, by
more precisely measuring stress values, will
tend to eliminate such over-specification. Com
petition from steel and concrete may stimulate
producers to avoid the excess safety factor
allowances involved in visual grading.
Machine graded lumber, estimated at from
1 to 4 percent of the 1963 production, but gain
ing acceptance rapidly, is said to yield revenue
of about $8 to $10 more per thousand board feet
to the producer than the same lumber conven
tionally graded. Estimates on the time required
for wide adoption of machine stress grading
range from a few to more than ten years. Be
cause such grading so far has limited applica
tion, and is generally supplemented by some
visual grading on the same pieces, impact on
the skilled visual grader may be minimized.
Improved gas jet and high frequency dryers
(kilns) season lumber more quickly. Improved
convection gas dryers speed up moisture re
moval as does a new, highly automatic, high
frequency dryer capable of handling sawn lum
ber up to 6 inches in thickness. Both methods
(the latter a European adaptation of the high
frequency principle) reduce floor space re
quirements and accelerate operations, thereby
reducing unit labor requirements.
Growth in number of plywood plants and
changes in their geographic distribution will'
continue. According to the U.S. Department of
Commerce, the number of softwood plywood
plants increased from 96 in 1954 to 156 in 1963.
Many new plants are in the capacity range of
90 million to 100 million square feet (%-inch
basis), in contrast to older plants of approxi
mately one-half that size.
Although concentrated on the West Coast,
the industry is growing rapidly in the South.
Following the first southern softwood plywood
plant in 1964, 4 more were quickly established
and 20 more are under construction or planned.
A faster rate of expansion of capacity in the
South is considered likely because new equip
ment now can process the small diameter South
ern Pine, thereby enabling southern producers
to take advantage of their lower transportation
costs to eastern markets relative to Northwest
producers of plywood. Ten years ago, plywood
producers were considered efficient if they pro
duced 100 square feet (%-inch basis) for each
direct man-hour— now they are producing 250.
Improved sorter systems reduce manual han
dling. Electronic devices with “ memories” in
crease efficiency by allowing a console operator
to cut and designate lumber for resawing or
transferral by conveyors to saw, kiln, or storage
areas without manual handling. Unskilled mill
employees working as offbearers behind saws
and as sorters are the principal occupations
affected by mechanical handling.
Rapid expansion of the particle board industry
is expected to continue. Output of particle board
plants has grown at an annual rate of about
16 percent from 1959 to 1964 and estimates are
that 1965 output will be 26 percent above its
1964 level. In 1966, production is expected to be
42 percent above the 1965 level and sales are
expected to reach $100 million. Particle board,
made from wood chips, resins and waxes, by
means of extrusion or pressing, is stable in com
position and can be worked by standard wood
processing techniques. It is used as underlayment, sheathing, and as core material for other
products such as furniture and cabinets. In
1964, 53 plants were in operation with concen
trations in the South and West.
Increased production per man indicates impact
of advances in sawmill technology. In 1955,
sawmills were planned so that 1,000 board feet
were produced per man per shift. Many mills
built since that time were planned to produce
3,000 to 4,000 board feet per man, and this level
is still acceptable to some producers. However,
newly planned and constructed mills are now
designed to produce 10,000 board feet or more
per man per shift.
Capital expenditures are increasing sharply.
Capital expenditures for SIC 24 averaged about
$279.5 million over the 1957-60 period. In 1963,
they rose to $381 million— 30 percent above
1962 and 19 percent above the previous high—
about $320 million in 1960. They remained at
a high level in 1964 ($369 million).
Research and development is conducted by a
few major companies. National Science Foun
dation estimates R&D expenditures for the
43
industry (including' furniture, but excluding
paper and pulp) at about $10 million each year,
1960-63. Much research is conducted by the
U.S. Forest Service, some areas being growing,
cutting and seasoning of wood, stress grading,
chemical wood treatment, and use of chemicals
derived from wood. Primary emphasis of pri
vate research is on increased salvage of former
waste material, as well as fireproofing and code
work.
Manpower Trends and Adjustments
Outlook is for some decline in employment.
From 1947 to 1964, employment (all employees)
in the lumber and wood products industry de
clined by 242,500 to 602,500, an annual rate of
decline of 2.0 percent. However, 1964 employ
ment was about 10,000 higher than in 1963.
For the 1947-64 period, production workers de
clined by 252,800 to 530,200, an average annual
rate of decline of 2.2 percent. Between 1957
and 1964, the annual rate of decline was 1.5
percent for production workers and 1.2 for all
employees.
Employment reduction in the logging camp
and contractor classification, and in sawmills,
comprising in 1964 over 56 percent of total em
ployment, or 340,100, accounted for most of the
decline. Wooden container manufacturing em
ployment also decreased, from 43,200 in 1958
to 34,900 in 1964. Millwork employment has
increased from 67,500 in 1958 to 69,500 in 1964.
Employment in miscellaneous wood products
(encompassing wood preserving, production of
pallets and particle board, and other manufac
tured products) has grown from 55,700 in
1958 to 70,100 in 1964. Veneer and plywood
Average annual percent change
All employees
1947-57 ___________________________________ - 2 . 5
1957-64 ___________________________________ - 1 . 2
Production workers
1947-57 . 1 __________________
-2 .8
1957-64 _________________
-1 .5
Output
1947-57 __________________________________
.8
1957-64 __________________________________
2.3
employment has increased from about 61,000 in
1958 to over 70,500 in 1964. Employment in
these two industries (with 23 percent of lum
ber and wood products employment) is expected
to continue increasing.
Occupational requirements are changing. As a
percent of all workers, nonproduction workers
rose from about 7 percent in 1947 to about 12
percent in 1963 and 1964. Mechanization is de
creasing the physical labor required in such
occupations as offbearer, feeder, turner, and
loader. As a result of mechanization, declines
also appear to be taking place in these specific
occupations: blocksetter, stationary boiler fire
man, car and truck loader, logdeckman, kiln
drying stacker, air drying or storage stacker,
offbearer for machine and headrigs, and watch
man.
Another type of change is the increasing
number of men operating larger capacity equip
ment. For example, while the number of trimmermen operating 2 and 3 saw machines seems
to be declining, the number of men operating
saws with 11 blades has increased.
New jobs are emerging as machine-sorter op
erator, tipple man, cutoff sawyer, and console
operator who perform the operations previously
handled by many more job categories such as
catcher, turner, feeder, lumber straightener,
dogger, trailer, and block setter. Workers, now
stationed behind panel boards, control opera
tions and actuate equipment by pressing but
tons, pulling switches and pressing pedals.
These new jobs require knowledge of lumber,
and motor coordination and manual dexterity
instead of the physical strength necessary for
the occupations being gradually eliminated.
Labor and management, through collective bar
gaining, are beginning to give more attention
to adjustments. In one large company having
over 5,000 employees, union and management
set up a joint committee in June 1963 to study
problems generated by technological change.
Another agreement provides local job protec
tion by promoting local products in competition
with those from outside the State, by means of
an employer financed fund. One 1962 contract,
covering 15,000 workers of several companies
44
within a specified geographic area, provides
that employees may take pension rights with
them when moving from one employer to
another.
Government funded training is being given at
all skill levels. Over 2,000 persons in the lum
ber and wood products industry were trained
in 1964, under the Area Redevelopment Act and
the Manpower Development and Training A ct:
some at professional levels as forestry aids;
some as skilled workers, such as grader, saw op
erator, finish patcher, and equipment (woods)
operator. Semiskilled occupations for which
workers were trained include lumber inspector,
veneer grader, all around logger, sanding ma
chine operator and variety saw operator. Also
covered in this category are occupations in the
plywood industry— veneer clipper and drier
operator, lathe operator and glue spreader.
Selected References
“ Automatic sorting system affects many mill operations,” Forest Industries, April
1964, pp. 108-109.
Barnes, Sam, Associate Editor. “ Wood Technology,” Machine Design, July 30, 1964,
pp. 78-85.
“ Buschcombine puts meaning into engineered production,” Forest Industries, Sep
tember 1964, pp. 64-65.
“ Extensive mechanization in new Southern plywood plant,” Forest Industries,
November 1964, pp. 84-87.
Freas, Alan D. U.S. Department of Agriculture, Forest Service, “ Machine Grading
of Lumber for Stiffness and Strength,” Presented to Fifth FAO Conference on
Wood Technology, Madison, Wis., 1963.
Guthrie, John A. and Armstrong, George R. Western Forest Industry— An Eco
nomic Outlook, The Johns Hopkins Press, 1961.
Hair, Dwight. The Economic Importance of Timber in the United States, Miscel
laneous Publication 941, U.S. Department of Agriculture, Forest Service, 1963.
“ Sending a plant back to school,” Business Week, Nov. 28, 1964, pp. 65-66.
Sherman, Dean F. “ The plywood industry— Where it is— Where it is going,” Forest
Industries, January 1964, pp. 35-39.
Industry Wage Survey, Southern Sawmills and Planing Mills, June 1962 (BLS
Bulletin 1361, 1963).
Timber Trends in the United States, Forest Resource Report No. 17, U.S. Depart
ment of Agriculture, Forest Service, February 1965.
Wage Structure: West Coast Saivmilling, July 1959 (BLS Report 156, 1960).
Zivnuska, John A. “ The Future of Wood in a Competitive Market,” Paper presented
to 1963 convention of the Society of American Foresters, at Longview, Wash.
The Furniture and Fixtures Manufacturing Industry (SIC 2 5 )
in some areas of stock removal, turning out
more uniform products and with fewer rejects.
About 8 to 10 percent of wood furniture pro
duction workers are engaged in sanding opera
tions, and planer operatives less than 1 percent.
Summary of Outlook Through 1970
Greater demand for furniture will result from
increases in new family formation and dispos
able income. A more rapid diffusion of tech
nological innovations, including multipurpose
fabricating and materials-handling equipment,
improvements in finishes and their application,
and increasing use of plastics and metal, appears
likely. The marketing advantages and prospec
tive economies of modern mass production tech
niques are expected to accelerate the trend to
larger company size.
A moderate growth in employment is ex
pected to result from increased output despite
technological advances promising greater effi
ciency in manufacturing operations.
Improved woodworking machinery consider
ably lowers labor requirements. Industry
sources estimate that about 85 percent of the
shaping requirements of the average plant can
be handled by a new automatic contour-profiler.
This machine, operated by unskilled labor, pro
duces shaped parts 2 to 5 times faster than the
previous method of marking, bandsawing, and
handshaping. The new profiler, with one op
erative, is said to pay for itself in about 2 years,
while yielding a volume of production which
required two operatives or more using the
previous method.
Routers for producing cutouts in wood or for
decorative grooving over flat and curved sur
faces can now be programed (template-con
trolled) for automatic continuous routing of
intricate patterns. (Programing is controlled
by a unique cam and sensing system that is easy
to set in the shop.) Unskilled operators need
only to feed material to the machine; in some
Outlook for Technology and Markets
Higher rates of family growth and disposable
incomes are expected to stimulate expansion in
furniture production. The projected increase of
approximately 18 percent in the family-forming
age group (20 to 34) compared with a 6- to
8-percent total population growth between 1965
and 1970, should strengthen the market for resi
dential housing and complementary furnish
ings. An increasing proportion of families own
ing homefurnishings, and rising disposable
incomes will increase demand for furniture and
fixtures. According to estimates by Resources
for the Future, Inc., private purchases of furni
ture and fixtures increased at an average annual
rate of 2.9 percent between 1950 and 1960, and
are projected to increase at an average of 4 per
cent annually between 1960 and 1970.
Significant technological changes include more
efficient sanding. Multiple-stage belt sanders
eliminate a number of manual handling steps
required in conventional methods. One such
sander is said by industry sources to produce
with 2 operators in 8 hours, as much as 10
operators in equal time can produce on 2-drum
and 6-belt sanders. In another application,
widebelt sanders, in combination with coated
abrasives, are replacing conventional planing
Worker loads hydraulic-feed vertical gang borer equipped with
hopper feed.
45
46
applications, even feeding is automatic. A more
advanced design, being tested, can make threedimension router cuts without a wood inter
mediate pattern, by following a simple black-onwhite line drawing. Taken together, the router
and profiler developments may affect as many
as 2 percent of the wood furniture production
workers.
Numerous advances have been made to re
duce downtime and increase flexibility of ma
chinery. New molders are fitted with cartridgetype spindle units which permit quick pattern
changeover; spindle extensions for dado work
and attachments for drilling, dovetailing, and
sanding have been developed for automatic
tenoners. Also, faster spindle operations and
reduced maintenance are attained by the adop
tion of carbide-tipped blades, automatic lubri
cation, and sealed and nylon bearings.
Increased use of automatic equipment is lower
ing materials-handling requirements. Auto
matic stackers, conveyors, and hoppers are
eliminating stockpiling of work in process and
reducing the need for tailboys (unskilled as
sistants to convey materials between machines
or processes). For flat stock, automatic panelfeeders are used to feed sanders, roller coaters,
or conveyors leading to tenon machines; and
automatic transfer (chain drive) units move
stock between such shaping machines as tenon
ers and molders.
Assembly operations are faster. The use of
pneumatic power clamps and assembly ma
chines is speeding the assembly of frames, case
ends, drawers, and chairs, while requiring fewer
and less-skilled workers. One machine takes
parts directly from a tenoner, feeds metal parts
from hoppers, inserts these parts, drives pins
or nails, and ejects a completed shelving onto
a conveyor at a rate of 7 to 10 per minute, and
only one operative is required to load the hop
pers and pinners. Another machine takes
panels, aligns and joins them perfectly square,
drives staples to hold the assembly true while
the glue dries, and permits the assembly of a
kitchen cabinet by one man every 60 seconds.
Faster upholstering and frame assembly with
less operator fatigue are promoted significantly
by improved power-driven fastening equipment
such as nailers, staplers, tackers, and clippers.
One new tacker enables an unskilled operator,
with little practice, to drive tacks 5 to 8 times
faster than the most experienced hand nailers*
merely by pressing the nose of the tool against
the work surface. Some fastening tools are
built into jigs. For example, the new frame
nailer clamps and fastens complete furniture
frames in 2 seconds.
Electronic gluing is a potentially significant
gluing technique. Gluing with radiofrequency
(heating the whole wood mass uniformly and
not just the surface) is a high-speed process
beginning to be used increasingly in furniture
manufacturing. However, its full economic
advantages cannot be realized until there is
further improvement in some other factors
associated with good gluing techniques, such
as resin formulations and control of wood mois
ture content.
Finishing materials are much improved. Air
drying and baking time of many finishes stead
ily are being shortened to reduce process time
cycles. Coatings are becoming more specialized
and fitted precisely to their purpose. For in
stance, new synthetic materials (conversion
lacquers and sealers) possess great toughness
and will withstand most household reagents;
finely ground pigments and new type thinners
permit toners to penetrate wood more deeply
and to extend the range of wood colors; some
metal furniture finishes do not require a primer
for adhesion, but have excellent resistance to
abrasion. Bleaching systems are expensive, but
economies are being created by new bleach solu
tions which eliminate the need for neutralizing
washes and permit faster bleaching schedules.
Force-dry ovens significantly decrease the time
required for finishing operations. High tem
perature, force drying of finishes by use of gasfired convection or ceramic-type infrared ovens
(some with individually controlled, multiple
temperature zones to meet the needs of special
ized finishing materials) drastically cuts finish
ing time and labor. Such high temperature
ovens raise surface temperature to about 135 °F.
and permit sealers and lacquers to dry in 1 to
5 minutes instead of hours. One recently devel-
47
EMPLOYMENT AND CAPITAL EXPENDITURES IN THE
FURNITURE AND FIXTURES INDUSTRY
Thousands of Employees
120
100
80
60
40
20
0
1951
So u rce s:
'5 2
‘5 3
'5 4
'5 5
'5 6 '5 7
'5 8
E m p lo y m e n t, B u re a u o f L a b o r S t a t is t ic s ; e x p e n d it u r e s ,
'5 9
B u re a u
'6 0
o f th e
'61
C e n su s.
’6 2
'6 3
*64 1965
48
oped force-dry system, using a special pallet
conveyor, is said by industry experts to elimi
nate all manual handling through the finishing
process.
The installation of this system at one modern
plant resulted in 20 more cabinets being pro
duced each hour with the help of three fewer
men; total finishing and drying time was cut
from 8 hours to less than 4 hours.
This new force-dry system requires the em
ployment of especially alert foremen to insure
steady, continued operation of the line at all
stations. Slowdowns or breakdowns at any one
point, that would lower but not disrupt produc
tion in the conventional system, are a serious
interruption to production in the new system.
Nevertheless, the industry is finding the new
finishing method efficient. Two years after its
introduction in 1962, approximately 90 such
systems had been designed and installed.
Electrostatic spray painting systems are reduc
ing labor and material costs. In these systems,
spray guns operate automatically as the unfin
ished objects pass through critical points on a
conveyor line. Paint savings of up to 50 percent
are claimed over conventional manual air-spray
methods; laborsavings depend upon the type of
objects sprayed. The spray guns are actuated
either by conveyor projections that trip over
air valves, or by use of an electric (electronic)
eye device. Irregularly shaped objects can now
be sprayed by a new electrical mechanism which
memorizes spray patterns. But the automatic
spray system works best in mass production of
uniform parts, especially when the parts have
simple shapes.
Electrostatic finishing, previously practical
only for metal pieces, has now been made pos
sible for wood by a recently developed solvent
which endows wood with electrical conductivity.
However, questions remain as to permanency of
adhesion, stability of the wood with aging, and
applicability to other materials such as stain,
filler, sealer, glaze, etc.
Plastics are being used increasingly in furni
ture. Examples of plastic materials in furniture
making are plastic laminates; tough new plas
tics for shells and frames; and urethane or
vinyl foams for cushioning that can be molded
in contoured forms or foamed in place ( “ oneshot” molding), thus eliminating complexities
of coil springs, fiber stuffing, and wood assem
bly. Greater freedom in styling, lighter weight,
easier assembly, greater adaptability to mass
production techniques, and longer life with little
maintenance are some advantages of the new
materials.
Use of plastics for furniture is increasingly
important. In 1964, about 15 percent more vinyl
and 12 percent more flexible urethane foam
went into furniture upholstery than in 1963.
An already sizable market continues to grow
for plastics in school furniture, and plastics
appear to be making significant breakthroughs
in auditorium and stadium seating, where a
great market potential is indicated. The Los
Angeles Coliseum, for example, has ordered
46,000 blow-molded high density polyethylene
seats, and has an additional 20,500 for delivery
in 1966; in the 41,000-seat stadium at Houston,
Tex., some 75,000 pounds of flexible urethane
foam covered the seats.
Irradiated woods may be used in furniture pro
duction. Studies on production and commercial
feasibility of radiation-processed composites of
plastics and wood for furniture are being spon
sored by the Atomic Energy Commission and a
number of industrial firms. Tests indicate that
such new composite materials can be made to
retain the grain structure of natural wood while
increasing resistance to scuffing, abrasion,
warping, and damage by harmful chemical
agents. A range of colors is made possible by
combining dyes with the plastics material.
Fabrication of the new material into products
such as furniture requires no more than con
ventional woodworking machinery. The ad
vantages of aesthetic appeal and ease of main
tenance of irradiated woods may be offset by
high costs of producing the material.
Use of steel, aluminum, and other metals facili
tates mass production of furniture and widens
design possibilities. The movement to suburban
living and increased use of durable metal furni
ture by institutions are expected to bring in
creasing use of light-weight metals.
49
Adoption of modern technology is being facili
tated by a trend to larger company size. %
The
industry expects that the trend from small,
family-held concerns will continue and that by
1975 there may be several furniture manufac
turers in the $100 million annual sales class. It
is believed that larger sized public corporations
will afford the industry a stronger potential for
modern mass-production techniques. Modern
equipment designed for quantity runs is often
not economically feasible for the low production
volume of many small companies.
Investment for plant and equipment has been
very high in the last 3 years. Expenditures for
new plant and equipment were $96 million in
1962, $110 million in 1963 and $105.6 million
in 1964, in all of these years exceeding the 1956
record of $92.4 million. Expanding demand
should cause higher levels of investment to be
maintained over the next few years.
Manpower Trends and Adjustments
A moderate increase in employment is expected.
Employment increased at an average annual
rate of 1.2 percent between 1957 and 1964,
reaching a total of 406,000 in 1964. Anticipated
output expansion is expected to sustain current
employment growth rates. Employment will
probably grow faster in the South, where the
increase averaged 3.5 percent annually between
1957 and 1963.
Average annual percent change
All employees
1947-57 __________________________________
1957-64
Production workers
1947-57 __________________________________
1957-64 __________________________________
1.1
1.2
.6
.9
Occupational structure is changing. Production
worker jobs are expected to increase more
slowly than total employment. Production work
ers as a percent of total employment declined
from 88 percent in 1947 to 83 percent in 1964.
Between 1950 and 1960, white-collar employ
ment (according to Census data) increased
from 17.1 to 19.4 percent of total employment.
This group comprised managers, officials, pro
prietors, and professional, technical, clerical,
and sales workers. Among blue-collar jobs, the
number of mechanics and repairmen increased
43 percent to about 7,400; upholsterers showed
a rise of only 1 percent to 19,000; the number
of cabinetmakers declined sharply by 13 per
cent to 23,200. The number of laborers declined
by 12.4 percent to 18,000. Plant operatives in
creased by 15 percent to 186,800, and continued
to comprise approximately one-half of all em
ployment in the industry.
Training periods for some jobs have been short
ened by technological changes. Such traditional
handicraft woodworking skills as shaping, join
ing, and finishing have been simplified by mod
ern machinery; upholstery work is made less
complicated by the use of precut, preformed,
and stretch materials; painting has been mecha
nized by automatic spray and flow-coating tech
niques. Some machines, however, continue to
rely for their operation on a high degree of skill.
For example, the multi-spindle carving ma
chines, while vastly improved, still depend com
pletely on the skill of the operator, who must
have considerable experience in order to turn
out a reasonable quantity of good work.
Occupational training is being sponsored by the
Federal Government. Manpower Development
and Training Act funds are being provided for
institutional and on-the-job training for skilled,
semiskilled, and apprenticeship furniture manu
facturing occupations such as upholstering,
cabinetmaking, and finishing.
A number of collective bargaining agreements
ease the impact of job displacement. Of 15 ma
jor agreements in 1963, covering 26,000 work
ers, three contracts for 4,600 workers provided
severance pay and layoff benefits; one contract
for about 1,100 workers provided supplemen
tary unemployment benefits. Early retirement
is provided in some pension programs.
50
Selected R eferences
“ Wide Belts Offer Automation, Accuracy, and Abrasive Planing,” Furniture Design
and Manufacturing, May 1964, pp. 56-61.
“ Trends in Woodworking Machinery,” Western Furniture Manufacturing, May
1964, pp. 20-21.
“ Improved Assembly Techniques Cut Costs,” Furniture Manufacturer, November
1961, pp. 18-22 ff.
“ What Every Young Man Should Know About New Finishing Materials,” Furniture
Design and Manufacturing, June 1963, pp. 29-31 and 65-66.
“ Automatic Electrostatic and Manual Steam Spraying,” Industrial Finishing,
November 1963, pp. 32-34 ff.
“ Electrostatic Wood Finishing— A Reality At Last,” Furniture Design and Manu
facturing, April 1963, pp. 55-57.
“ Cornwell’s DeBurgh System Halves Finishing Time,” Furniture Design and Manu
facturing, August 1963, pp. 24-26 ff.
“ Molded Frames and Upholstery,” Modern Plastics, May 1961, pp. 176-177 ff.
“ A Dedicated Search for Excellence,” Furniture Design and Manufacturing, Sep
tember 1963, pp. 20-33 ff.
“ Biggest Western Furniture Plant Streamlines Operation,” Furniture Design and
Manufacturing, November 1963, pp. 24 ff.
“ Furniture Makers Join Retailers, Other Home Lines in Look at Decade Ahead,”
Wood and Wood Products, September 1965, pp. 34, 36.
Industry Wage Survey— Wood Household Furniture, Except Upholstered, July 1962,
(BLS Bulletin 1369, 1963). 58 pp.
The Glass Containers Industry (SIC 3 2 2 1 )
most tripled between 1959 and 1964, metal can
shipments increased about 17 percent. Most of
the gain was realized from sales of the nonreturnable glass bottle. Cans took about 40 per
cent of the package beer market in 1959 and
41 percent in 1964, while nonreturnable bottles
increased from 6 to 16 percent of total filling
during the same years.
Container weight in pounds per gross, an
important cost factor in manufacturing and
shipping, is expected, according to industry
sources, to fall from 82 pounds in 1960 to a pos
sible low of 73-75 pounds in 1970.
Summary of Outlook Through 1 97 0
Output probably will continue to rise at the
moderate rate of recent years. The industry is
emphasizing product improvement. Major ad
vances include lighter weight containers, a
faster, less costly coloring process, new color
shades to screen ultraviolet rays, and improved
techniques of permanent decoration (labeling).
Glass container making equipment already op
erates at a high degree of automaticity. Im
proved refractories are increasing product qual
ity. Surface treatments which have decreased
breakage facilitate the introduction of faster,
more efficient equipment in packing and han
dling operations. The moderate rate of increase
in employment and in output per man-hour are
expected to be maintained.
Production facilities are being expanded and
modernized. Batch house operations, which
formerly required that three or four men spend
30 to 40 minutes to prepare a batch of raw ma
terials for the furnace, now are handled by one
man using automatic weighing devices in 5 to
10 minutes, thus increasing the output per man
hour for this operation by about 12 times.
Superior fusion cast refractories have a 4to 5-year life compared with 12 to 16 months for
the old type of refractory, and eliminate much
shutdown time for repair and rebuilding.
Outlook for Technology and Markets
Output of containers has increased significantly
since 1957. Output (based on BLS weighted
index) increased at an average annual rate of
1.6 percent from 1947 to 1957; and at an annual
rate of 3.5 percent from 1957 to 1963. Resources
For the Future, Inc. estimates that the average
annual rate of increase in shipments of glass
containers over the period 1960-70 will range
from 2.2 to 5 percent. (Shipments from 1960-64
increased at an average annual rate of 4.5
percent.)
Recently glass containers have become available
in a wide variety of colors. A new coloring
process greatly expedites and expands the pro
duction of containers of many different colors,
the coloring (frit) being added to an individual
forehearth as the glass moves from the furnace
to the forming machines. Usually, the coloring
materials are added to the furnace, making the
entire output from all forehearths a single color
glass. Change of color requires draining and
flushing of a complete furnace, with accompany
ing production loss of several days time.
Whereas production has been limited to 8
standard colors, a new coloring process will
provide virtually an unlimited number of colors.
Additional colors to block ultraviolet rays
have been developed. Because amber, the con
ventional color used to block ultraviolet rays,
lacks merchandising appeal, new ultraviolet
blocking greens, competitive in cost to standard
greens, have been developed.
The industry, through product innovation, is
meeting competition of other types of containers. Many traditional markets for glass con
tainers, such as milk and household products,
have been penetrated by paper, metal, and
blown plastic containers; however, these losses
have been largely offset by large gains in glass
containers for baby foods, spices, liquid shorten
ings, orange juice, instant coffee, and conven
ience foods.
In the beer market, which takes 18 percent of
the industry’s output, the industry is meeting
competition from metal cans with the nonreturnable glass bottle. While the number of glass
containers produced for the beer industry al
51
52
New surface treatments reducing scratches and
breakage facilitate labeling and reduce handling
costs. Three or more recently developed sur
face protecting treatments are already widely
used. One water-soluble coating, made from
vegetable stearic acid, protects the container
surface from the time of manufacture until it
is subjected to water. Another, a water-repel
lent coating made from silicones and organic
acids, provides adequate surface protection but
requires the development of new adhesives to
overcome labeling difficulties. Polyethylene and
other resins are used with success.
More permanent chemical surface treatments
have been recently developed. These provide a
high degree of scratch resistance (up to 100
pounds force to scratch the bottles) on both wet
and dry bottles. The new treatments also pro
vide good lubricity (less friction) and the over
all results are stronger bottles and improved
handling in the bottler’s operation. One manu
facturer ships such containers on automatically
handled pallets holding 10,000 containers with
out dividers, and claims that this new glass sur
face can effect substantial savings in reduced
handling costs.
Plastic coating of glass containers also pro
tects against breakage and surface scratches
during handling. Such a coating also facilitates
decoration, but new labels for each of 20 to
25 “ round trips” make paper labels for return
able bottles more costly. Although not a new
process, permanent labeling of the glass itself
is being used by an increasing number of glass
container manufacturers in place of a paper
label. Permanent labeling may be accomplished
by fusing an enamel onto the glass surface.
Usually the application is by a screening proc
ess. A recently introduced technique in which
the enamel label is applied cold is less costly
than conventional, fired-on enameling.
Electrostatic printing is in the experimental
stage for permanent labeling of glass contain
ers. Ceramic powders are electrostatically held
where the impression is desired, and this dec
oration is fired in a conventional annealing
oven or lehr. If this process is successful, ini
tial application will be to returnable beverage
containers, and with lower costs the process
may become commercially feasible for per
manent labeling of nonreturnable bottles.
An old process used for decorating glass dinnerware and ceramics with designs or pictures
is sometimes used for permanent labeling of
glass containers. The decoration is a ceramic
transfer in which the label and other decoration
are “ glued” to the container. The application
can be performed by unskilled labor.
labeling for wider eye appeal in off-the-shelf
sales to consumers.
Improved surface treatments increase the speed
of packing. Packing lines for glass containers
operate at normal speeds of 100 to 300 contain
ers a minute, and higher speeds are possible
when certain pieces of the line are set in mul
tiple rows. Equipment under development is
expected to handle 1,000 containers a minute
with no increase in breakage.
Improved decoration for permanent labeling is
being developed to enhance marketing appeal.
Decoration (label, printed matter, design) in
volves a wide variety of processes, such as glu
ing on paper, etching, cutting, engraving, sil
vering, enameling, and coloring, all of which
advertise the contents and make glass contain
ers attractive consumer packages.
For a single application (nonreturnable use),
paper labels are the least expensive form of
New inspection techniques and full mechaniza
tion of bottle handling methods now are being
employed. Until several years ago, inspection
of the finished glass container was primarily
by manual operation, with four or five girls
visually inspecting only 90 to 100 containers
per minute. Significant improvements in auto
matic inspection equipment and mechanization
programs to provide single line inspection and
automatic packing have reduced the need for
manual inspection to the point where one girl,
particularly in the case of longrun volume, now
is able to inspect as many as 150 containers per
minute.
Capital expenditures and research and develop
ment have shoivn substantial annual increases.
Capital outlays increased from $31.2 million in
1958 to a total of $59.2 million in 1964. Six new
plants have been built since 1963 and four more
are planned. Some of the new plants represent
53
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN THE GLASS CONTAINERS
INDUSTRY
Index (1957-59=100)
Ratio Scale
Data for 1948 not available
Sources:
Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
54
relocation of manufacturing facilities to centers
of consumption. In 1963, there were 113 plants
in the industry. Estimated annual expenditures
for R&D increased from about $10 million in
1962 to $15 to $20 million in 1964.
Manpower Trends and Adjustments
Output per man-hour probably ivill rise at a
moderate rate. Output per all employee man
hour and output per production worker man
hour increased at the same average annual rate,
0.5 percent during the 1947-57 period; the rate
of increase for both groups rose to 1.8 percent
during the 1957-63 period. It seems likely that
the trends in output per man-hour for the more
recent period will continue for the next few
years.
Employment is expected to continue increasing
at a moderate rate. Total employment (Census)
rose from 47,100 in 1947 to 54,300 in 1957 at the
average annual rate of 1.4 percent a year. In
1964, total employment was 60,400, increasing
at an annual rate of 1.6 percent a year since
1957. Production workers rose from 41,900 in
1947 to 48,400 in 1957 or 1.5 percent a year, and
also rose 1.5 percent yearly after 1957 to 53,800
in 1964. Further output and plant expansion
during the next 10 years is expected to more
than offset the anticipated job loss on product
handling, inspection, and packing lines, which
will become more mechanized.
Portability of pensions has been provided under
industrywide contract. Under a new contract,
covering about 60 percent of the workers, an
employee 40 years of age or older, who has had
at least 15 years’ service with a glass container
manufacturer, may— if his services have been
terminated because of a shutdown or curtail
ment due to automation— enter employment
with another manufacturer participating in the
Average annual percent change
All employees
1947-57 __________________________________
1957-64 __________________________________
Production workers
1947-57 __________________________________
1957-64 __________________________________
Output
1947-57 __________________________________
1957-63 ______ , __________________________
Output per all-employee man-hour
1947-57 __________________________________
1957-63 ______________________ •
___________
Output per production worker man-hour
1947-57 __________________________________
1957-63 __________________________________
1.4
1.6
1.5
1.5
1.6
3.5
.5
1.8
.5
1.8
contract and retain for pension purposes all
accredited years of service with his original
employer. The contract also provides that a
covered member who is at least age 50 and has
15 years’ service will receive his earned pension
benefits at retirement age, regardless of cause
of termination (other than disciplinary).
Problems arising out of technological change
are under continuous labor-management study.
The National Glass Container Labor-Manage
ment Committee, established in 1958, is com
posed of eight company representatives, the
Glass Container Manufacturers Institute Di
rector of Labor Relations, the International
President, and the chief officers of the Interna
tional Union. The committee was established to
review problems under terms of the contract
and discuss matters of mutual concern, prior to
actual contract negotiation. Among subjects
covered at periodic meetings of the committee
are technological change and its effect on em
ployment, the long-range outlook for glass con
tainers, and employee problems due to plant
relocation.
55
Selected R eferences
Bowman, E. W. and J. H. Williams. “ Annealing of Glass With the Automated Zonal
Lehr,” National Glass Budget, Feb. 6, 1965, pp. 16-19.
“ Continuous Study of Critical Problems, The Glass Container Industry,” in Creative
Collective Bargaining: Meeting Today’s Challenges to Lab or-Management Rela
tions. James J. Healy, editor. Prentice-Hall, Inc., 1965, pp. 229-243.
“ Glass,” Chemical and Engineering News, Nov. 16, 1964, pp. 80-96.
Griswold, Hugh T. and Charlton P. Whittier. “ Innovation in Glass Containers,”
Food Technology, October 1962, pp. 78-81.
Grutzner, Charles. “ The Glass Container Industry Is Expanding,” Industrial Bul
letin, New York State Department of Labor, April 1962, pp. 5-10.
Hackett, J. W. and H. A. Steigelman. “ Surface Treatment of Glass,” Modern Pack
aging, September 1961, pp. 146-148.
Industry Wage Survey, Pressed or Blown Glass and Glassware (BLS Bulletin 1423,
May 1964).
“ Light-Protective Glass,” Modern Packaging, September 1960, pp. 109-111.
Meigh, Edward. “ The Development of the Automatic Glass Bottle Machine,” Glass
Technology, February 1960, pp. 25-50.
Pilsbury, Richard C. “ From R & D : Better Glass for Packagers,” Modern Packag
ing, December 1964, pp. 104-107.
“ Text of P & M Pact With Explanations,” GBBA Horizons, March 1965, Glass Bottle
Blowers Association, Philadelphia. 22 pp.
The Hydraulic Cement Industry (SIC 3 2 4 )
Plants.are becoming larger. From 1950 to 1960,
average plant capacity rose from 1.6 million
barrels per year to 2.2 million barrels, and is
expected to maintain its upward trend. For
example, one midwestern firm has announced
plans for a plant of 7 million barrels’ capacity
which will feature the largest kiln in the world
— 760 feet long and 25 feet in diameter. Size
of working unit, in terms of product tonnage
per unit, has about tripled in the past 10 years.
In the past 5 years, kilns over 500 feet in length
have become common; average kiln length grew
from 188 feet in 1950 to 201 feet in 1954, and
is still rising. Early in 1965, one new western
plant replaced 13 smaller kilns with two new
530-foot kilns, increasing capacity by 50 per
cent and substantially reducing fuel costs and
manpower requirements. In an eastern plant
that was modernized in 1964, eight small wet
grinding mills were replaced by one mill of
greater capacity, five old kilns were replaced
by a single large one, and two large finishing
mills replaced six old grinding mills. The in
creased size of equipment has been a major fac
tor in reducing unit labor requirements.
Summary of Outlook Through 1970
Prospects for a faster rate of growth in out
put over the next few years depend primarily
on construction activity. Output per man-hour
will continue to increase at a faster rate as new
and larger cement plants are put into produc
tion. Technological advances in the cement in
dustry include more extensive and complex
instrumentation and computer control, im
provements in handling and shipping, and new
techniques for reducing maintenance costs.
Employment will probably continue to de
cline. The jobs of production workers will in
volve, to an increasing extent, monitoring and
maintenance of complex instruments. Occupa
tional changes tend to reduce sharp distinctions
between production and technical workers, and
may create problems of labor-management
relations.
Outlook for Technology and Markets
Cement production may rise faster in the next
5 years than in the past 5. Most of this increase
will be due to an anticipated rise in construction
activity. Cement production rose at a rate of
2.5 percent per year during 1957-63. Accord
ing to industry experts, output may rise at an
average of about 3 percent a year between 1963
and 1970, yielding about 445 million barrels of
cement annually by 1970.
Instrumentation is becoming more extensive
and complex. Meters, gages, indicators, scales,
and similar instruments are being utilized in
creasingly in the production of cement to meas
ure flow, temperature and pressure in kilns,
density and weight of materials, and many
other process variables. In recent years, the
number has increased and quality of such meas
urement devices has improved. Centralized con
trol of instrumentation, being used increas
ingly, reduces labor requirements significantly.
Modern mills feature control panels with re
cording instruments monitored by a small staff.
Instruments used in many recently built
plants provide sonic mill control for grinding.
Microphones are tuned to pick up various sound
levels from the grinding mill; feedback from
microphones regulates the flow or amount of
material to the mill, and thus the fineness of
the product being ground. Closed-circuit TV
systems for remote monitoring of key opera
Capacity is expected to continue to exceed pro
duction. The cement industry operated at about
75 percent of capacity, or with an excess of
over 100 million barrels per year, from 1960 to
1964. Production capacity was about 490 mil
lion barrels in 1964. Net planned expansion in
1965 is estimated at about 18 million barrels.
While some excess capacity is the result of sea
sonal construction demands, a considerable part
is in obsolete plants which will be under com
petitive pressures from new, more modern fa
cilities. Although some obsolete plants may be
shut down, excess capacity will probably con
tinue to remain a major problem through 1970.
56
57
tions are becoming commonplace. X-ray spec
trometers for raw materials and product analy
sis, and radiation absorption instruments for
continuous weighing are also being introduced.
This equipment tends to reduce labor require
ments, as well as maintain quality control and
conserve raw materials and fuel. For example,
the costs of operating an X-ray spectrometer,
including maintenance, in one plant were con
siderably less than the costs of performing the
same tests by conventional methods, if more
than one shift was operated. The saving was
achieved mainly because operation of the X-ray
spectrometer required the full laboratory staff,
including mix chemists, only on the day shift.
Since efficiency of cementmaking revolves
around the close control of sintering in rotary
kilns, instrumentation of kilns is particularly
highly developed. As kilns become larger, con
trol of speed, temperature, fuel and other vari
ables becomes more critical and the accuracy
of instrument measurements more important.
Automatic lubrication, longer life refractories,
and dust control and recovery equipment which
improves draft and minimizes heat loss, also
increase kiln efficiency.
Prospects are favorable for more extensive use
of computers. Late in 1962, computers were
either installed or being installed at 13 plants.
In 1963, a California plant became the first to
feature complete on-line, closed-loop computer
control; the computer automatically and con
tinuously calculates raw mix, controls kiln burn
ing, and prepares periodic reports for manage
ment. Four other plants now use computers in
process control.
Benefits derived from computer control in
clude more uniform product quality, fuller
utilization of equipment capacity, reduced fuel
costs, greater production with the same labor
force, and increased life of kiln lining. No con
trol system is designed today without considera
tion and provision for future computer control.
Within 5 to 10 years, most new cement plants
will incorporate a computer as part of the basic
process system.
Investment in controls is increasing. Invest
ment for controls (instruments and computers)
in cement plants has climbed from an average
of 3 percent to around 5 percent of annual
capital investment in the past few years, and
may rise to 8 percent by 1970. Since units of
production are becoming larger and costlier,
an increase in this ratio is limited. However,
larger, more complex units create the multiple
relationships which make controls desirable and
economical.
Many changes in distribution are undenvay.
Shipments by truck continue to gain steadily
over rail shipments. In 1961, trucks became the
dominant method of shipping and in 1964 ac
counted for about 66 percent of all Portland
cement shipments. Plants located near water
ways are using barges increasingly for ship
ments to distribution terminals.
Bulk movements continue to increase over
other methods. Over 87 percent of portland
cement was shipped by bulk in 1964, a record
high; the rest was shipped mainly in paper
bags. In 1958, 79 percent of shipments were
made in bulk. Bulk shipments were made pos
sible by pneumatic handling and require less
manual labor for loading and unloading.
New distribution terminals afford marketing
oAvantages. These facilities, where cement is
stored, enable the large capacity plants to ex
tend their marketing areas beyond the tradi-
Operator and trouble shooter monitor automatic controls and
computer which control cement plant operations.
58
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR,
AND CAPITAL EXPENDITURES IN HYDRAULIC CEMENT
Thousands of Employees
Index (1957-59=100)
19 47
49
Ratio Scale
51
53
55
57
59
61
63
1965
. .................. Data for 1948 not available
Sources: Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
59
tional 200 to 300 mile radius of the plant. At
the end of 1964, an estimated 200 distribution
terminals were in operation, virtually all built
since 1960. Since trucking1 with fewer barrels
,
of cement per load, placed a premium on quick
and frequent service, plants located some dis
tance from the market area found themselves
less competitive than they were under the rail
system of delivery. Activity in building these
facilities has apparently slowed down.
Plant and equipment expenditures will prSbably remain near the average level of the past
7 years. From 1958 to 1964, expenditures for
plant and equipment fluctuated between a high
of $119 million in 1959 and a low of $94 million
in 1964, averaging $107 million a year. Late in
1964, at least 12 companies reported that they
would be building new plants or completely
remodeling old, obsolete ones in the next few
years. Some companies also are expanding or
building new research facilities.
Research and development on new types of ce
ment and concrete may lead to increased de
mand. To take up the slack between capacity
and consumption, the industry is undertaking
research to extend the uses of cement through
company and trade association programs. De
mand for cement is also enhanced by research
done by producers of concrete products. Thus,
development of prestressed concrete, soilcement paving, thin-shell roofs, expansive con
crete, lightweight concretes, white cement, and
numerous precast concrete products is creating
a great demand for cement.
Progress continues in reducing fuel and power
requirements. Fifteen years ago, an average
dry process plant used about 1 million B.t.u. per
barrel of cement, and the average wet process
plant used about 1.4 million B.t.u. per barrel.
Plants averaged about 0.9 and 1.0 million B.t.u.
per barrel, respectively, in 1963. Lower fuel re
quirements reflect the increasing size and effi
ciency of kilns. New, larger machinery, on the
other hand, require added power. Nevertheless,
average kilowatt-hours per barrel of cement
have been reduced from 21 to 23 in 1950 to 18
to 20 in 1963. Coal is still the main type of fuel,
with 59 plants using it as their sole source of
kiln heat in 1964; 52 other plants used coal with
gas or oil.
Manpower Trends and Adjustments
Output per man-hour will probably continue to
rise rapidly. Output per all-employee man-hour
increased at an average annual rate of 5.3 per
cent between 1957 and 1963; the annual rate
between 1947 and 1957 was 4.7 percent. The
growth rate of output per production worker
man-hour was slightly higher during both peri
ods. A higher rate of capacity utilization and
the opening of large, technically up-to-date
plants is expected to result in a higher rate of
growth over the next 5 years, compared with
the 1957-63 period.
Employment is expected to continue to decline.
The outlook is for a continuing decline in em
ployment, despite an anticipated faster growth
in output, because greater productivity is ex
pected. However, the rate of decline will prob
ably be slower than during 1957-64. Total em
ployment (Census data) in 1957 was 41,600, the
postwar peak, which was well above the 1947
level of 35,700. By 1964, employment declined
to about 34,500, at a rate of 2.6 percent a year
since 1957.
Average annual percent change
All employees
1947-57 __________________________________
1.5
1957-64 _____________ - ___________________ - 2 . 6
Production workers
1947-57 __________________________________
1.6
1957-64 ___________________________________ - 3 . 6
Output
1947-57 __________________________________
4.0
1957-63 __________________________________
2.5
Output per all-employee man-hour
1947-57 __________________________________
4.7
1957-63 __________________________________
5.3
Output per production worker man-hour
1947-57 __________________________________
4.9
1957-63 __________________________________
6.0
Production workers are declining relatively
faster than total employment. Between 1957
and 1964, production worker employment de
clined 1 percent a year faster than total employ
60
ment. The ratio of production workers to total
employment declined from 86 percent in 1947
to 81 percent in 1964, largely because of plant
mechanization. Part of this decline also re
flected slightly lower capacity utilization. As
capacity is more fully utilized, the decline in
the ratio may be slowed, since employment in
administrative, technical, clerical, and sales
work may not increase as much as in production
worker jobs.
New jobs involving monitoring and mainte
nance of instruments appear in automated
plants. The console room technician, one of the
key new jobs, consolidates the work previously
done by five separate people in the conven
tional type of cement plant: kilnburner, finish
operator, raw grinder, crusher operator, and
blending tank operator. Normally, four tech
nicians are employed in a plant and work
around-the-clock shifts in the console room.
They monitor panels of the console, observe the
crusher and kiln by means of closed-circuit tele
vision, operate the automatic control board, and
adjust, start, and stop most plant operations.
Frequently they must make independent judg
ment as to the corrective action needed when
trouble is indicated.
Another key job is that of instrumentation
technician. His job, along with his supervisor,
the instrumentation engineer, is to oversee the
electrical wiring of the console room and its
equipment. His work is more like that of a
highly skilled maintenance worker than that
of an electrical technician. Console and instru
mentation technicians normally receive inten
sive formal training before assuming their
duties, and then on-the-job training for several
months.
Maintenance will receive greater attention.
Maintenance accounts for a large share of total
production man-hours. One industry source
estimates that maintenance now requires at
least 60 percent of production man-hours in
milling. In the larger plants, maintenance ab
sorbs a relatively large share of costs because
of the need to keep large units operating full
time during peak demand periods. Cement
producers are requiring automatic built-in ma
chinery maintenance, such as automatic lubri
cation and simplicity of design in order to
reduce maintenance time and costs.
Questions have arisen over including technical
employees in the bargaining unit at an auto
mated cement plant. The National Labor Rela
tions Board decided in 1962 that some technical
employees in a highly automated cement plant
should be included in a production unit. A
Federal court opinion upholding the NLRB’s
decision asserted that “ Automation must neces
sarily bring to industry a new concept of
operational and maintenance functions . . . .
So, too, automation may bring to the technician
and operational employee a much closer rela
tionship and community of interest.”
Workers are seeking provisions for greater job
security. Efforts are being intensified to im
prove job security through expansion of the
basic supplemental unemployment benefit plan,
higher compensation for overtime work, im
proved pensions, and higher severance pay.
Major collective bargaining agreements in 1965,
affecting a majority of cement workers, in
cluded provisions guaranteeing to workers 95
percent of their previous wage rates on trans
fer to lower rated jobs necessitated by introduc
tion of new equipment. Other job security meas
ures included substantial improvements in
SUB plans; early retirement for employees
affected by plant shutdowns or permanent lay
off; and a job security clause stating that em
ployees would not be terminated as a result of
mechanization, automation, change in produc
tion methods, installation of new or larger
equipment, the combining of jobs, or the elimi
nation of jobs.
Selected References
Technological Developments
Barton, William R. “ Cement,” Minerals Facts and Problems, 1965 Edition, Bulletin
630, Bureau of Mines.
------ . “ Cement,” Minerals Yearbook, 1964, Vol. 1, Bureau of Mines, 1965.
Bergstrom, John H. “ Cement Plants of the Sixties,” Rock Products Mining and
Processing, May 1964, pp. 77-88.
Blau, Robert E. “ Cement Industry Weather vanes,” Rock Products, May 1963,
pp. 80-85.
“ Cement Strives to Pour the Proper Profit Mix,” Business Week, July 17, 1965,
pp. 144-146 ff.
“ Economics of Cement Production,” Construction Review, Business and Defense
Services Administration, Dec. 1964, pp. 4-7.
Guccione, Eugene. “ New Developments in Cement Making,” Chemical Engineering,
Nov. 23, 1964, pp. 112-114.
Prokorney, E. J. “ Computer Process Automation— Current Practices and Future
Possibilities in the Cement Field,” Minerals Processing, August 1963, pp. 20-22.
“ Review of the Cement Industry,” Pit and Quarry, February 1965, pp. 107-111
and 144.
Rock Products, (Annual Cement Issue), May 1965, 208 pp.
Trauffer, Walter E. “ Cement,” Pit and Quarry, (Annual Forecast), January 1965,
pp. 86-97 and 110.
Manpower Trends and Adjustments
1965 Collective Bargaining Agreement, Ideal Cement Company and United Cement,
Lime and Gypsum Workers International Union, May 1965, (mimeographed),
21 pp.
Current Wage Developments, No. 211, Bureau of Labor Statistics, July 1, 1965,
pp. 4-5 and 20-21.
Decisions of National Labor Relations Board, V. 137 Supplemental Decision and
Direction of Election, Dewey Portland Cement Company and United Cement,
Lime and Gypsum Workers International Union, Case No. 16-RC-2899, June 27,
1962, pp. 944-950.
Hastings, Norman. “ Cement Plant Instrument Maintenance Experience,” Minerals
Processing, February 1964, pp. 30-33.
The Concrete, Gypsum, and Plaster Products Industry (SIC 3 2 7 )
seeable future. Sales of prestressed concrete
have increased since its introduction in 1950
to over $200 million annually in 1964. By 1970,
sales are expected to more than double.
Other prefabricated concrete products such
as culvert and sewer pipe, lightweight blocks,
block panels, and decorative components are
also expected to grow in importance. Moreover,
growth in the use of prefabricated gypsum
products is expected to continue. About 56 per
cent of gypsum used or sold in 1964 was in the
form of prefabricated building products, com
pared with 51 percent in 1958. However, unless
new uses or products in the prefabricated field
can be developed for gypsum, increased compe
tition from alternative materials such as ply
wood, aluminum, and plastics could restrain
future growth.
Summary of Outlook Through 197 0
Growth of output is expected to continue at
the present high rate if construction activity
continues to increase. Technological advances,
featuring new products, prefabricated products
(particularly prestressed concrete), improved
methods of concrete curing, more efficient pro
duction equipment, and instrumentation, con
tinue to advance productivity. Employment is
expected to rise because of increasing demand.
Unskilled manual occupations may decline while
those requiring machine-instrument operating
and maintenance skills may increase.
Outlook for Technology and Markets
Production is expected to continue to increase
at a high rate. According to the Federal Re
serve Board index, output increased at an av
erage annual rate of 4.9 percent between 1957
and 1964, substantially lower than the 8.2-per
cent rate for the period 1947-57. If construction
activity continues to expand, production will
probably continue to increase near present rates
during the next 5 years.
Changes in steel technology increase markets
for lime. The rapid growth of basic oxygen
converter steelmaking has been a major factor
in the improved demand for lime. Oxygen con
verters use about 125 pounds of lime per ton
as fluxing, about five times as much as in openhearth steel processing. Increased use of oxy
gen converters to produce high carbon steel will
further increase demand for lime used as a flux.
Some 1970 estimates project total consumption
of lime by the steel industry, the largest single
consumer, at about 4 million tons, 80 percent
more than the 1964 level. Another important
growing market is soil stabilization for high
way construction where use of lime should
exceed a million tons by 1970.
Prestressed concrete and other prefabricated
concrete and gypsum products are expected to
increase in importance. Prestressed concrete
(concrete reinforced with tensioned steel) is
replacing steel, lumber, and ordinary reinforced
concrete in many structural building applica
tions. When used instead of structural steel,
prestressed concrete containing 1 ton of hightensile steel can replace as much as 7 tons of
ordinary structural steel. Standardization of
prestressed concrete sections produced on a
mass production basis makes the material eco
nomical and adaptable for bridge and building
construction. Large-span and multistory build
ings are considered by some experts to offer
the best markets for prestressed concrete dur
ing the next decade. Prestressed units such as
floor and roof slabs, beams, columns, and wall
panels will probably be made available as stand
ard stock items in a variety of sizes, similar to
those of lumber and steel products, in the fore
Use of ready-mixed concrete ivill continue to
reduce on-site construction labor requirements.
Use of ready-mixed concrete, replacing con
crete prepared at the construction site, continues
to shift labor requirements from on-site con
struction to ready-mix plants and increases
opportunities for economies of large-scale pro
duction techniques. In 1964, the output of
ready-mixed concrete amounted to nearly 160
million cubic yards, or more than triple the out
put in 1950. Advances in instrument control of
the batching plant continue to improve product
62
quality, and larger capacity, higher speed
transit-mix trucks are providing more eco
nomical delivery.
Continued product improvements enhance fu
ture groivth of markets for concrete. Expansive
concrete, for example, which was introduced on
a developmental basis in 1964, expands just
enough to offset natural shrinkage, thus over
coming to a large extent the tendency of ordi
nary concrete to crack when drying. Also, in
contrast with ordinary concrete, the new con
crete makes possible the pouring of large areas
of concrete without joints, is completely water
proof, and will not crack when properly rein
forced. Expansive concrete reportedly has
longer life and greater load strength than or
dinary concrete. Although the new concrete
is relatively more expensive than regular con
crete, various users report that its improved
qualities more than offset the additional cost.
Research is underway to improve further the
properties of expansive concrete and to expand
its applications.
Concrete made with lightweight materials
(such as expanded clay, shale, slag and fly ash)
is being used on an increasingly wider scale.
Significant advantages of concrete made with
lightweight materials are weight reduction of
about one-third without significant loss of
strength and improved insulation and accoustical properties. Labor requirements for handling
are generally lower than for the heavier regular
concrete.
Applications of epoxy materials are being de
veloped that may open up possibilities for
greater use of concrete products. Epoxy ma
terials replace mortar for joining prefabricated
concrete units. Because of the significantly in
creased strength of the bond, some experts
speculate that in the future it may be possible to
build complete structures by gluing precast con
crete units together. Used as a coating, epoxies
may greatly expand the use of concrete prod
ucts where waterproof and chemical-resistant
properties are essential, as in the use of concrete
pipe for disposal of industrial wastes. It can
also be used to provide concrete surfaces, such
as highways and floors, with improved skidresistant and wearing properties.
Improved methods of concrete curing (speeding
up the hardening process) continue to win wider
acceptance. Compared to the traditional method
of moist curing, steam curing reduces the time
required for curing concrete products from sev
eral days to about 24 hours, and minimizes
shrinkage, thereby reducing cement require
ments and increasing strength of concrete prod
ucts. Curing in pressurized chambers (auto
claves) , a further development of steam curing,
is just beginning to win wide acceptance in the
industry. Easily adaptable to mechanization of
materials handling, autoclave curing further
reduces curing time and increases product
quality. Since the curing cycle is significantly
speeded up, orders can be filled more rapidly—
reducing the need for maintaining large, space
consuming inventories. With continuing em
phasis on better quality concrete products, cur
ing by autoclave is expected to be used more
widely in the future.
Precast concrete structural wall panels are lowered into place.
64
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES IN
CONCRETE, GYPSUM, AND PLASTER PRODUCTS
Thousands of Employees
20 0
EMPLOYMENT
I 50
All Employe
Producti on Worke rs
100
50
0
1
|
Index (1957-59=100)
I 5 0
1947
Sources:
'49
|
|
|
J
___ i___
|
|
Ratio Scale
'63
1965
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures, Bureau of the Census.
65
New systems of steam generation for autoclave
curing will probably gain wider acceptance.
Recently developed systems eliminate the con
ventional use of a high pressure steam boiler,
and thus remove the need for a licensed fireman
or engineer. For example, curing costs have
been reduced as much as 46 percent because of
manpower savings achieved through the use of
the Petrotherm method. Using this method,
steam is produced by circulating hot oil through
pipe submerged in water in the floor of the au
toclave. In addition, these new systems produce
concrete products of more uniform quality by
completely saturating the curing chamber with
steam, eliminate the need of boiler-housing, and
reduce space requirements.
Greater use of improved equipment in concrete
block plants is expected to reduce labor require
ments. A trade association sample survey of
86 concrete block plants showed, in 1962, that 55
percent of the plants surveyed were mechanized
in at least one of the four major steps of pro
duction— an increase of 16 percent over 1961.
In recent years, about 7 or 8 percent of the
1,800 block plants have mechanized annually
either raw materials handling, proportioning of
raw materials (batching), mixing of concrete,
or block handling. By 1970, it is predicted that
about 80 percent of all block plants will be
mechanized in at least one of these four major
steps of production. Use of new block forming
machines and mechanization of loading, unload
ing, and stacking— operations usually per
formed manually— can substantially increase
output per man-hour; in some cases, as much as
100 percent.
replacing manual data logging in ready-mix
operations.
Centralized control of instruments— essen
tially a panel localizing all indicating, monitor
ing, and adjusting instruments— is being used
more widely in the production of ready-mixed
concrete, gypsum wallboard, and lime. Signifi
cant reductions in unit manpower requirements
are achieved because of the increased efficiency
of the entire operation. For example, manpower
requirements to produce 10 tons of lime have
been reduced to 1 man-hour when control is
centered around the kiln— controlling raw ma
terial flows, sintering, fuel mixture, draft, tem
perature, and auxiliary equipment. Product
quality and output capability are also improved
substantially. In a ready-mixed concrete plant,
switching from manual to centralized control of
batching resulted in doubling its output with
the same number of employees. Further ex
tension of automatic control, by incorporating
computers directly into the control system, is
foreseen by some engineers. At present, a few
computers are being used in the industry to
furnish data necessary for accurate centralized
control.
Plant and equipment outlays should continue to
remain high. Expenditures for new plant and
equipment were $224 million in 1964, the high
est in the period 1958-64. Expenditures may
continue at a high level during the next 5 years
because of anticipated continued mechanization
of operations throughout the industry and ex
pansion in production facilities for prestressed
concrete.
Manpower Trends and Adjustments
Instrumentation is expanding in use. Gages,
scales, meters, indicators, and similar instru
ments are being used increasingly to control
weighing of raw materials, measurement of
flow, temperature control, and other process
variables. In advanced plants, automatic con
veying and storing of raw materials are moni
tored by closed-circuit television. Radio dis
patching of ready-mixed concrete trucks is
nearly a standard procedure. Automatic re
cording of weights of raw materials, of batch
ing time, and of delivery truck identification by
digital, graphic, or photographic recorders is
Employment is expected to continue to rise. To
tal employment increased from 140,100 to 172,100 between 1958 and 1964, rising at an average
annual rate of 3.5 percent. Production worker
employment increased at a slightly lower rate
for the period, averaging 3.0 percent per year.
Employment is expected to continue to increase
as long as construction activity increases.
Changes in occupational structure will probably
continue. The ratio of production workers to
total employment has declined only slightly,
66
Average annual percent change
All employees
1958-64 ____________________________
Production workers
1958-64 __________________________________
Output
1947-57 __________________________________
1957-64 __________________________________
3.5
3.0
8.2
4.9
from 80 percent in 1958 to 78 percent in 1964.
It is anticipated that this decline will continue
but will not be accelerated to any great extent
by increased mechanization.
Introduction of advanced machinery tends
to change manual duties to machine-tending du
ties, to require new maintenance skills, and re
duce manpower requirements in some occupa
tions. Services of licensed boiler engineers and
firemen, for example, are being eliminated by
new systems of steam generation for autoclave
curing. Manual laborers, called lime pickers,
who are required to pick out unburned chunks
of limestone from vertical kiln operations, are
not needed on the increasingly popular rotary
or circular-hearth kilns. With the introduction
of a cubing machine, the jobs of laborers
(cubers) who stack concrete blocks manually
are eliminated and transferred to a machine
operator. Functions of maintenance men are
changing to include maintenance of instruments
and electronic devices as well as mechanical
equipment. In the concrete block industry, the
offbearer man, a manual laborer who handles
blocks in the curing process, is being replaced
by a loading and unloading machine.
A key new job in the industry is the controlboard operator. In the manual system of con
trol, determining and maintaining the correct
mix of raw materials, size of aggregate, and
water content in the proportioning and mixing
of concrete depend on judgment and experience
of the batch man. In modernized plants, these
variables are measured and automatically con
trolled. A control-board operator at a central
console presets predetermined variables by
turning set screws or entering punchcard in
formation and monitors instruments on the con
sole to verify the accuracy and consistency of
the mix. Where corrections to preset specifica
tions are indicated, he adjusts the proper dial,
knob, or set screw. He must be able to make the
necessary adjustments to produce custom mixes
and odd size batches of concrete.
Prefabricated products are expected to continue
to shift employment away from on-site con
struction. Increasing use of prefabricated con
crete and gypsum products creates some new
jobs in the concrete industry, while facilitating
reductions of on-site manpower requirements
in the construction industry. For example, in
the production of concrete block panels for wall
construction, an automatic block-laying machine
manned by a crew of 3 (operator, wall finisher,
and yardman) can lay 2,000 blocks a day— a
work load that normally requires 10 masons and
5 tenders to perform.
On-the-job retraining plays an important part
in adjustments to technological change. Al
though long-range planning for manpower ad
justments is not typical, employees are usually
transferred and retrained to handle new opera
tions. However, one problem that has arisen
with centralized instrument controls involves
the training of skilled, manual operators who as
console operators find difficulty in coping with
complex panels displaying lights, dials, switches,
and instruments.
67
Selected R eferences
Technological Developments
Barton, William R. “ Gypsum,” Mineral Facts and Problems, 1965 Edition, Bureau
of Mines, 1965.
Bell, Joseph N. “ A Second Look at Expansive Cement,” Concrete Products, June
1965, pp. 31-35.
Gertler, Sidney. “ The Prestressed Concrete Products Industry,” Construction
Review, Business and Defense Services Administration, June 1961, pp. 5-12.
Gugliotta, Paul. “ Modern Concrete Design,” International Science and Technology,
December 1963, pp. 54-61.
“ Guide for Use of Epoxy Compounds With Concrete,” Journal of the American
Concrete Institute, September 1962, pp. 1121-1142.
Li, Shu-T’ien. “ Expansive Cement Concretes— A Review,” Journal of the American
Concrete Institute, June 1965, pp. 689-706.
Lin, Tung Yen. “ Revolution in Concrete,” Architectural Forum, May 1961, pp.
121-127.
“ New Markets for Lime,” Rock Products, July 1964, pp. 93-95.
Pearson, A. S. and F. Asce. “ Lightweight- Aggregate From Fly Ash,” Civil Engi
neering, September 1964, pp. 51-53.
Utley, Harry F. “ Reno Operator Doubles Output With Remote, Automatic Setup,”
Modern Concrete, May 1965, pp. 64-65.
White, Roy C. and Edward J. Pokorney. “ Automatic Technology in the Lime
Industry,” Nonmetallic Minerals Processing, November 1962, pp. 17-22.
“ The Wonderful World of Epoxies,” Concrete Products, November 1964, pp. 46-49
and 62.
Manpower Trends and Adjustments
“ Block Laying Enters Machine Age,” Concrete Products, January 1965, pp. 58-60 If.
Miller, Harry J. “ How a Florida Block Maker Cut His Curing Cost 46 Percent,”
Modern Concrete, April 1964, pp. 50-52 and 66.
“ Technical Bulletin on Production Efficiency, 1962,” Concrete Masonry Association,
Arlington, Va., 1963, 9 pp. (mimeographed).
“ Trends in the Use of Prestressed Concrete,” Construction Review, Business and
Defense Services Administration, January 1965, p. 11.
The Iron and Steel Industry (SIC 3 3 1 )
grow relatively faster than total domestic de
mand over the next decade.
Summary of Outlook Through 197 0
Technological changes affecting a wide range
of iron and steelmaking processes are being
adopted. Major improvements in blast fur
nace operations include use of more highly beneficiated materials and supplementary fuel in
jection. Significant advances in steel production
methods are basic oxygen steelmaking, vacuum
refining, continuous casting, automatic controls,
and general expediting of finishing operations.
Increases in output per man-hour over the next
5 years are expected to exceed somewhat the
1957-64 average rate as continued high levels
of capital spending result in the spread of recent
technological advances.
Output is expected to increase at a slow rate.
Employment may be lower, especially for pro
duction workers. Job opportunities will favor
professional, technical, and skilled workers in
creasingly. Measures designed to alleviate the
impact of technological change include exten
sive seniority provisions, extended vacations,
early retirement, retraining programs, separa
tion and layoff benefit plans, restrictions on
subcontracting, and the Kaiser and the Alan
Wood Plans of job security and sharing in
benefits of technological change.
Steel imports are increasing. Imports of steel
mill products amounted to only 1.2 percent of
the total tonnage marketed in the United States
in 1955, but by 1964 increased to 6.44 million
tons, or 7.3 percent. Imports in 1965 will be
about 10 percent of the market.
Higher performance, greater reliability, and
closer tolerances are being obtained in steel
products. Competition from such materials as
aluminum, plastics, cement, and glass; and in
terest in meeting the requirements of the space,
oceanography, defense and atomic energy pro
grams are strong incentives to product innova
tion. Super-clean steels are being made by
vacuum processes in order to develop improved
physical and mechanical properties. Other new
products are lightweight structural, high
strength maraging steels, plastic-coated steels
to resist corrosion, thinner and stronger pipe,
tin-free steel plate for container use, tin-coated
steel foil 0.002 inches thick (thinner foil with
gages of 0.0004 inches is experimental), and
aluminum (or other metal) vapor coated steel,
expected to be in production in 1966. One effect
of these developments is to reduce overall steel
user requirements in terms of weight. This
tends to depress the rate of increase in ingot
tonnage marketed.
Outlook for Technology and Markets
Steel production is expected to increase at a
slow rate. Steel ingot output increased from
84.9 million net tons in 1947 to 112.7 million net
tons in 1957. In 1964, 126.9 million ingot tons
of steel were produced, the highest on record.
Output is expected to increase to about 135 mil
lion tons by 1970, according to some industry
sources. Dollar sales may increase at a faster
rate than tonnage because of the growing
volume of “ higher value” products.
Blast furnace productivity continues to in
crease. In 1950, the average output of pig iron
per blast furnace day in the U.S. was 848 net
tons compared to 1,182 net tons in 1960 and
1,444 net tons in 1964. Some new modern fur
naces produce at a rate of more than 3,000 tons
a day (the best furnaces were producing at
about 2,000 tons a day 5 years ago), and one
4,000-ton-per-day furnace is now in operation
abroad. The number of high-output blast fur
naces, with probable lower labor requirements
per ton of hot metal, is expected to increase.
Beneficiated ores, especially pellets and sinter,
are an important factor in increasing efficiency
of blast furnace operations and improving metal
Steel production is growing in Midwest area.
Additional steel production facilities are being
established in the Detroit-Chicago region to
service the automobile, appliance, railroad,
farm equipment, construction, and other mar
kets. The Midwest steel demand is expected to
68
69
composition. Total iron ore agglomerates (pel
lets, sinter, nodules, briquettes) constitute an
increasing proportion of iron ore materials
used- in blast furnaces, rising from 28 percent
in 1957 to 63 percent in 1964. Prepared feeds
in 1964 included 54 million net tons of sinter and
29 million net tons of pellets, pellet production
growing 421 percent between 1957-64 com
pared with 75 percent for sinter. Pellet produc
tion is expected to increase by 52 percent to
about 44 million net tons by 1970. Self-fluxing
iron ore agglomerates, simplifying blast fur
nace functions, also increase furnace efficiency.
Successful automation of blast furnace opera
tions may require preparation of all materials
in the blast furnace charge, including more
precise size, shape, and composition of coke,
flux, and other charge materials. Economies in
iron production are offset somewhat by the ad
ditional facilities and labor required inbeneficiation and preparation of furnace burden materi
als. Some increase in employment may take
place in the iron ore mining industry (SIC 101)
as a result of the new beneficiation techniques
making economically feasible the recovery, con
centration, and agglomeration of low-grade iron
ore (taconite) into pellets.
Injection of hydrocarbons (natural gas, oil,
and coal), together with oxygen enrichment of
the furnace blast, increases output and tends to
lower furnace costs by partially replacing coke,
a more expensive input. Since 1959, about 40
percent of U.S. blast furnaces have adopted
some form of hydrocarbon injection, predomi
nantly in the form of natural gas. An industry
source states (January 1965) that 16 operating
furnaces in the U.S. are equipped for fuel oil
injection. Initial trials with coal injection indi
cate that coal could replace coke as a furnace
fuel with an upper limit of about 20 percent re
placement of coke or 30 percent when combined
with higher blast temperatures and oxygen en
richment. Direct savings vary from plant to
plant but could be significant because the cost
of coal is roughly one-half that of coke. Diffi
culty persists, however, in the handling of the
various supplementary fuels, especially coal.
The trend to higher output furnaces is aided
also by the development of thinner but stronger
refractories, extending the working volume.
Tons of white-hot pig iron are poured into the mouth of a 300-ton basic oxygen steelmaking furnace.
70
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN THE IRON AND STEEL
INDUSTRY
Thousands of Employees
1947
49
5|
53
55
57
59
61
63
1965
Millions of Dollars
1800
EXPENDITURES FOR NEW PLANT
AND EQUIPMENT
965
Sources:
Employment, output, and output per man-hour, Bureau of Labor Statistics; expenditures, American Iron and Steel Institute.
71
Capacity of blast furnaces is further expanded
by the adoption of higher furnace top pressures,
since gaseous reduction is increased, thus rais
ing (shaft) efficiency.
By 1970, it is expected that the basic oxygen
process could account for about 35 to U5 percent
of the steel produced in the U.S., surpassing the
output of open hearths. In 1964, basic oxygen
production was 15.4 million tons, or 12.1 percent
of the total, rising from 0.3 percent in 1955. In
October 1965, there were at least 39 basic oxy
gen converters (37 basic oxygen furnaces, and
2 Kaldo or rotating furnaces) in the U.S., with
at least 20 more being built or planned.
The basic oxygen process is being adopted
because of lower production and capital costs,
a faster production rate, and high product
quality. Because of rapid changes in size and
operating techniques, comparative costs of pro
duction vary over a wide range. Some estimates
indicate average conversion costs (i.e., operat
ing costs excluding metallics) for the basic oxy
gen furnace (BOF) of approximately $12 to
$14 an ingot ton compared with $15 to $17 for
most open-hearth shops. Initial capital invest
ment is approximately $10 to $26 per ton an
nual capacity compared with $19 to $50 for
open hearths and about $11 to $28 for electric
furnaces. Oxygen costs are claimed to be gen
erally lower than fuel charges for the open
hearth or power for electric furnaces. Savings
also accrue from the small physical size and
simplicity of the BOF. Refractory consump
tion is less than 20 pounds per ton of steel com
pared with about 75 for the open hearth.
BOF cost savings are being extended by ef
forts to increase the economically feasible
proportion of scrap used in this process (likely
to remain a less expensive input than hot
metal). Premelting of scrap may make possi
ble a higher scrap charge than the standard 30
percent. Stainless and other highly alloyed steel
can now be refined in basic oxygen furnaces.
The BOF has a high rate of output, turning
out a “ heat” of steel in less than 1 hour in con
trast to 4 to 8 hours for the open hearth with
oxygen practice, and 10 to 12 hours for the con
ventional open hearth. The average heat size
is expected to increase from about 140 tons in
mid-1965 to about 160 tons by 1967. (BOF’s
outside the U.S. averaged about 90 tons per
heat in 1964.) Larger capacity basic oxygen
furnaces with capacities from 250 to 300 tons
are now in operation.
Industry replacement of open hearths by
BOF’s is on the order of one BOF for several
open hearths. At one plant, two 250-ton BOF’s
with a combined annual capacity of 2.2 million
tons are replacing 14 open hearths with a ca
pacity of 1.9 million tons. Most of the new
furnaces are replacing older units mainly to
reduce costs and, to some extent, to expand
capacity.
Replacement of open hearths by BOF’s may be
slowed by improved open hearth practices. In
troduction of oxygen, faster charging, high fir
ing rates, and the use of supplementary fuel
(gas, oil) with oxygen (surface blown into the
melt by means of oxy-fuel lances) are increas
ing output rates at low additional costs in open
hearth furnaces. At least one-third of all open
hearths use oxygen lances and make at least 60
percent of open hearth steel.
Continuous casting of steel is gaining accept
ance. As of mid-1965, 9 continuous casting in
stallations were in operation in the United
States (2 on an experimental basis) and an
other 12 were under construction. Consider
ably less than 1 percent of all steel produced in
the United States in 1965 was continuously cast,
but there are industry estimates that by 1970,
this ratio may reach 5 percent.
In continuous casting, molten steel is poured
into the top of an oscillating mold, cooled with
water spray, and an uninterrupted length of
steel is withdrawn from the bottom in the form
of semifinished products such as billets and
blooms. Steps involved in pouring steel into
ingot molds, stripping, reheating, and rough
rolling ingots into semifinished products are
eliminated, resulting in a possible 30- to 50percent capital investment savings over con
ventional ingot casting for certain grades of
steel. Savings in operating cost are estimated
at about 10 percent since yield of usable semi
finished product per ton of molten metal is in
creased from 80-86 percent to 94-98 percent,
labor requirements are considerably reduced,
and utility requirements (oil, gas, power) are
72
lower. Precise cost estimates in terms of both
capital investment and operating costs are un
certain because of insufficient experience and
rapid changes in technique associated with con
tinuous casting.
Various economic and technical factors may
impede adoption of continuous casting. Heavy
investment in conventional equipment, lack of
consistent quality in certain grades of steel,
fear of premature obsolescence by reason of the
fast-moving technology itself, and inability to
handle large tonnage heats may deter rapid
acceptance. Some plants will want to retain
the flexibility of blooming and slabbing mills
to facilitate serving a large variety of small
orders.
In another form of direct casting— pressure
casting— molten metal is forced through a re
fractory tube into a graphite mold. First intro
duced in 1963, pressure casting has almost as
high a yield ratio as continuous casting and is
said to be more flexible in the range of grades,
sizes and shapes that it can produce although its
laborsavings may be less. At least two plants
now commercially produce pressure cast steel
and four more units are being built.
Vacuum refining will be a growing 'practice. To
improve product quality, steel is being refined
by degassing or melting in vacuum chambers to
remove trapped hydrogen, oxygen, and nitro
gen. Improved fabricating characteristics plus
mechanical and metallurgical properties are
gained which broaden use of steel and extend
the life of steel products. Bearings, gears, air
craft, and missiles which must have superior
mechanical and physical properties are major
applications. Also, surface quality improve
ments and an increase in the ability of the steel
making plant to produce steels of unusual com
positions may well extend the use of vacuum
treatment for large tonnage items, such as
carbon sheet steels.
At least 40 degassing units are in operation,
most of them installed within the past 4 to 5
years. The two vacuum melting processes most
in use are induction and arc (consumable elec
trode) melting. Between 1962 and 1964, com
bined vacuum induction and melting capacity
rose to 600 million pounds from 500 million
pounds.
Vacuum refining may be combined with the
fast basic oxygen process and with continuous
casting to facilitate the flow of clean steel
through the continuous casting machine.
Vacuum refining steel reduces hydrogen content
to a very low level, permitting elimination of
long, slow cooling cycles for some higher
strength steels. Reduction (i.e., removal) of
oxide inclusions improves rolling yields (possi
bly by 3 percent), metal workability, and sur
face finishes. Vacuum processes increase man
power requirements and add to refining costs,
but these may be offset by the savings in the
finishing department.
Computer usage has been rising rapidly. Some
process computers are being used to collect and
refine data for off-line analysis, some are used
as laboratory research calculators, and others
are used on-line, directly connected to the proc
ess through sensing or other signal devices that
can prepare and display instructions to human
operators. A trade journal article indicated at
least 40 on-line process control computers as of
1963 in the steel industry— the first having been
installed in 1959.
At least three blast furnaces have digital
programing to initiate, monitor, and record the
charging of raw materials into the blast fur
nace according to a predetermined ratio and at
a certain rate. Much improvement has been
made in probes and sensing devices for gaging
stock level, temperature, and chemical composi
tion, but continuous measurement of internal
conditions within the furnace (as well as knowl
edge of smelting variables) is still insufficient
for establishment of a workable closed-loop
system.
In the basic oxygen process, control com
puters are used principally for calculating the
proper charge of materials and for data collec
tion. In some operations, computers control
weighing and feeding of charge materials, lance
position, oxygen flow rate, and blowing time.
Possibility of complete closed-loop control for
basic oxygen steelmaking is being advanced by
improved instruments for continuous deter
mination of batch temperature and carbon
content.
A process control system has been applied
with apparent success to an electric arc furnace
73
to issue guide instructions for the operator to
follow during the steelmaking process. The
computer calculates charging practice, sched
ules and times furnace operations, and moni
tors and controls electrical load distribution for
multiple furnaces.
Rolling and finishing operations are faster,
more continuous, and increasingly automated.
Of the 40 process computers listed by the 1963
survey, at least 21 of these control rolling and
finishing operations (at least 8 in reversing
mills, 7 in strip mills, and 6 in galvanizing, tin,
and annealing lines). Results claimed are more
consistent steel quality, reduction of scrap,
faster changes in machine setup, faster proc
essing, and lower costs. In advanced hot-strip
mill systems, the computer automatically keeps
track of slabs, sets the mill pace, determines mill
settings, controls temperatures, and logs pro
duction data. About 12 more computers for
hot-strip mills are being installed or manufac
tured.
Closed-loop controls, requiring only start-up
by the operator, were successfully started on at
least one annealing line in 1963. The computer
directly controls furnace temperature and line
speeds through feedback signals from a continu
ous hardness gage. According to one estimate,
annual savings of $3 million to $5 million are
possible from computer operation of a sheet
mill of 1 million ton capacity. Considerable
advances in inspection, testing, and quality con
trol (electro-magnetic, X-ray, pneumatic, ultra
sonic, and other automated or highly mecha
nized systems), and especially in in-process
automatic inspection, have facilitated com
puterized operations.
Other developments speeding up production
in rolling and finishing operations include a
combination slab-plate mill that can be changed
from slab to plate production in an hour, ul
trasonic cleaning, and hydrochloric acid pick
ling. Improved products have resulted from
such new finishing processes as vapor deposi
tion of metals upon steel, annealing in special
atmospheres, and processes to impart different
surface textures and patterns to steel.
Expenditures for new plant and equipment are
expected to reach record levels. Estimated 1964
expenditures of $1.59 billion are second only to
the record of $1.72 billion for 1957 and compare
with an annual average of $0.89 billion between
1947 and 1957, and $1.23 billion from 1957 to
1964. Capital expenditures are expected to be
$1.7 billion in 1965, and to exceed $2 billion in
1966. A McGraw-Hill survey indicated that
capital expenditures in the steel industry may
average almost $2 billion annually over the next
10 years. At least two-thirds of the planned
capital spending will be going toward replace
ment and modernization, compared with less
than 55 percent for all manufacturing.
Research and development expenditures have
risen considerably in the last few years. Accord
ing to the National Science Foundation, funds
for R&D in primary ferrous products reached
$109 million in 1963, an increase from $64 mil
lion in 1957. The size of research staffs has
tripled over the past 12 years. An estimated
6,000 scientists, engineers and supporting re
search personnel were employed by steel firms
in 1964. Many steel companies have established
laboratories for research and for development
of new products and improvement of processes.
Twenty-two steel companies are currently par
ticipating with the U.S. Bureau of Mines in
metallurgical studies and in the operation of a
small experimental blast furnace at Bruceton,
Pa.
Manpower Trends and Outlook
Output per man-hour may increase at faster
rates over the 196U— period than in 1957-6U
70
.
Output per all-employee man-hour increased at
an average annual rate of 2.4 percent (least
squares computation) during 1957-64. The an
nual rate of increase for output per production
worker man-hour was 2.3 percent. (These rates
reflect the influence of changes in operating rate
as well as in technology.) Between 1957 and
1964, output (as measured by the BLS com
posite index) increased at a rate of 1.7 percent
a year (least squares computation).
Diffusion of technological advances and ris
ing production probably will result in an aver
age rate of increase in output per man-hour be
tween 1964 and 1970 that exceeds the 1957-64
average. Output is expected to grow at a faster
74
rate also. According to a McGraw-Hill study
(in April 1965), various major producers (as
suming an economy growth of 3.5 percent) ex
pect an average gain of 2.5 percent a year in
output (as indicated by steel shipments) be
tween 1963 and 1975; if the economy grows at
a 4-percent rate, the rate would be 3 percent a
year.
The level of employment, particularly for pro
duction workers, may be lower in 1970 than in
1964. Employment in 1964 was 629,400, the
highest since 1957 (except for the post-strike
year 1960). The 1964 level, however, was 90,500 (or 12.6 percent) below the 1957 level.
Production worker employment declined rela
tively more than total employment so that the
ratio of production workers to all employees
declined from 83.4 percent in 1957 to 82.0 per
cent in 1964. Between 1947 and 1957, while
total employment increased by 64,100, the ratio
of production workers to all employees declined
from 87.7 percent to 83.4 percent.
Average annual percent change *
All employees
0.9
1947-57 __________________________________
1957-64 ___________________________________ - 1 . 9
Production workers
1947-57 __________________________________
.5
1957-64 ___________________________________ - 2 . 2
Output
1957-64 __________________________________
1.7
Output per all-employee man-hour
1957-64 __________________________________
2.4
Output per production worker man-hour
1957-64 __________________________________
2.3
* B a sed on th e
in d e x n u m b ers.
least
sq u ares • tr e n d
of
th e
lo g a r ith m s
of
th e
Occupational distribution is undergoing a
change in favor of professional, technical, and
skilled workers. Between 1950 and 1960, ac
cording to Census data, cutbacks in laborers,
service workers and operatives occurred; the
number of professional and technical workers
increased substantially and skilled craftsmen
and foremen remained about the same.
The number of unskilled and semiskilled
workers, about 70 percent of all employees, is
expected to decrease over the next 5 to 10 years
at a faster rate than overall employment. Op
portunities for skilled plant personnel will prob
ably rise, especially for maintenance workers,
as machinery and instruments become increas
ingly complex. However, as a result of new
methods and pushbutton operations, some jobs
requiring a high degree of skill (e.g., the “ first
helper” in steelmaking furnaces) have been re
placed by jobs having lower skill requirements.
Expanding R&D programs provide prospects
for engineers, scientists, laboratory aides, and
other technical personnel. Electronic computer
programers and personnel trained in data proc
essing for computer-controlled machines will be
in demand.
Some Issues and Examples of Adjustment
Collective bargaining agreements are providing
greater job and income security. Extensive
seniority provisions include early retirement: a
worker who is 55 or more years old and whose
combined age and length of service equal 75, or
any employee who has at least 15 years of con
tinuous service and whose combined age and
years of service equal 80, may retire on immedi
ate pension; any employee who is 40 or more
years of age and who has 15 or more years of
service who is affected by shutdown is eligible
for a deferred vested pension at age 65; accord
ing to the 1965 agreement, effective August 1,
1966, employees with 30 years’ service can re
tire on full pension regardless of age.
An extended vacation plan became effective
in 1964 to provide 13-week vacations every 5
years for the senior half of the workers in each
contracting company. This plan has been modi
fied by the 1965 collective bargaining agree
ments to enable employees to take pay instead
of time off for a portion of the 13 weeks.
Agreement provisions aimed at job security
include restrictions on subcontracting, and dis
cussion of limitations on overtime work while
employees are on layoff.
The Kaiser Steel (1963) and Alan Wood
(1965) Plans are designed specifically to pro
vide protection in event of layoffs and income
loss as a result of technological change. Em
ployees also are given a share in cost savings
from production efficiencies.
75
A number of protective arrangements exist to
help the worker facing layoff or termination.
Over 50 percent of the major collective bargain
ing agreements in the steel industry in 1962,
covering 83 percent of all workers, contained
severance pay or layoff benefit plans. Supple
mentary unemployment benefits (SUB) are
provided in all major bargaining agreements.
SUB plans now provide compensation for a
short workweek.
Job transfer can now occur without loss of
seniority rights, although transfer may involve
movement to an unskilled status. Interregional
job transfers under the 1965 agreement were
extended to include employees with 5 years of
service or more. Moving allowances were in
creased substantially for those who relocate to
a plant at least 50 miles from the former job.
Training and retraining programs are being
provided for jobs made more complicated by
modern technology. At one company, for ex
ample, a program has been in effect since 1962
to retrain electrical personnel for efficient main
tenance of modern electrical equipment and
controls. These updating and upgrading pro
grams consist of classroom and laboratory
training of up to 5 years. Most companies con
duct some form of apprenticeship program to
meet their maintenance requirements. There
are such programs for about 20 different crafts
in the steel industry, usually of 3 to 4 years’
duration, consisting mainly of shop training
and classes. Under the 1965 bargaining agree
ment, joint industry-union committees will be
set up to study apprenticeship programs, re
training, and testing of personnel.
Selected References
Crabtree, S. A. “ Steel Finishing,” Iron and Steel Engineer, November 1963, pp.
84-87.
Current Wage Developments, No. 213, BLS, Sept. 1, 1965, pp. 1-2.
Forrest, A. G. “ Nondestructive Testing: A Progress Report,” Blast Furnace and
Steel Plant, January 1965, pp. 37-43.
Gallagher, L. V. and Old, B. S. “ The Continuous Casting of Steel,” Scientific Ameri
can, December 1963, pp. 2-16.
Impact of Steelmaking Trends on Suppliers, Battelle Memorial Institute, Columbus,
Ohio, Oct. 30,1964.
Indexes of Output Per Man-Hour, Steel Industry, 1957-63, Bureau of Labor Sta
tistics, November 1964. 17 pp.
Kirkland, R. W. “ Process Computers— Their Place in the Steel Industry,” Iron and
Steel Engineer, February 1965, pp. 115-124.
Kobrin, C. L. “ Blast Furnaces Charge Back,” The Iron Age, June 17, 1965, pp.
59-63.
Madsen, I. E. “ Developments in the Iron and Steel Industry During 1964,” Iron and
Steel Engineer, January 1965, pp. D -l through D-78.
McGannon, Harold E., editor. The Making, Shaping and Treating of Steel, 8th edi
tion, 1964, United States Steel Corp., Pittsburgh, Pa.
McManus, G. L. “ The Direct Casting Controversy,” The Iron Age, August 5, 1965,
pp. 53-57.
Miller, W. E. “ Application of Automation and Automatic Techniques to Metal Roll
ing and Processing,” Blast Furnace and Steel Plant, August 1964, pp. 692-699
and 705.
Oram, J. E. “ Summary of Recent Automation Developments in the Iron and Steel
making Process,” Iron and Steel Engineer, April 1965, pp. 139-144.
76
Selected R eferences— Continued
Price, F. C. “ The New Technology of Iron and Steel,” Chemical Engineering,
Sept. 14, 1964, pp. 179-194.
Stone, J. K. “ LD Basic Oxygen Steelmaking— Its Growth and Development,”
Journal of Metals, August 1963, pp. 20-23.
“ Vacuum Degassing: Key to Better Steels,” Metal Progress, September 1964,
pp. 74-80.
Wage Chronology: U.S. Steel Corporation 1937-6U (BLS Report 186, Revised
1965). 42 pp.
The Foundry Industry (SIC 3 3 2 , 3 3 6 )
will affect adversely the market for this gray
iron foundry product. Steel industry experts
speculate that by 1970 about 5 percent of steel
output may be continuously cast, compared with
considerably less than 1 percent in 1965. In
addition, growing acceptance of competitive ma
terials such as plastics and nylon may, in certain
uses, such as automobile instrument panels, re
sult in their substitution for nonferrous cast
ings, particularly diecastings.
Summary of Outlook Through 1970
Foundry expenditures for new plant and
equipment are increasing as the outlook for
sales of castings to automotive and other metal
working industries improves. Continuing im
provements in the various steps of existing
foundry technology are expected to lead to sub
stantial increases in efficiency. Major changes
underway include further diffusion of improved
equipment and processes, greater mechaniza
tion of materials handling, and a continuing
trend toward greater concentration of produc
tion in larger, more efficient foundries. In
creases in employment may continue; however,
such a trend depends on the rate of growth of
the metalworking industries. Unskilled occu
pations will likely be reduced while technologi
cal changes may be expected to generate addi
tional employment in technical and maintenance
work.
Advances in foundry metallurgy are strengthen
ing the position of founding as a metal-forming
process. Many metal parts, formerly produced
by competitive processes such as forging, weld
ing, and stamping are being redesigned as cast
ings. For example, automobile crankshafts and
connecting rods, long produced only as steel
forgings, are being cast successfully in the im
proved casting materials, pearlitic malleable
and nodular (ductile) iron. Shipments of nodu
lar iron, which is also being used increasingly
for cast iron water and gas mains, increased
over 200 percent between 1958 and 1964. These
shipments accounted for 3.4 percent of total
gray iron shipments in the latter year while
those of pearlitic malleable iron in the same
period increased from 18 to 26 percent of all
malleable iron shipments.
The casting process is being relied on increas
ingly in the manufacture of small, intricate
parts and in the shaping of hard-to-machine
alloys used in aerospace applications. The hard
ness of the alloys used in jet engine blades, for
example, precludes, economically and often
technically, any other method of fabrication.
Outlook for Technology and Markets
Production of castings is expected to continue
the rise which began in 1962. This upward
trend in growth is due to the anticipated ex
pansion of production in the motor vehicles and
parts, machine tool, industrial machinery, and
other industries within the metalworking sec
tor— which, combined, consume approximately
two-thirds of all castings produced. Output of
iron and steel (ferrous) castings (Federal Re
serve Board index) increased at an average
annual rate of 1.6 percent between 1957 and
1964, exceeding the rate of 0.3 percent for the
1947-57 period. The growth rate for nonferrous castings was 1 percent between 1957
and 1964, but between 1961 and 1964, was 7.6
percent. During the 1947-57 period, nonferrous
castings output increased at the rate of 2.4
percent a year.
The trend is toward few er but more mechanized
foundries. Historically, a large number of
highly competitive, small firms with little capi
tal have produced a wide range of different
shapes and sizes of castings in small lots. Over
50 percent of all foundries in 1962 had fewer
than 20 employees, and over 70 percent, fewer
than 50. The total number of foundries rose
from 5,452 in 1946 to a postwar high of 5,758
in 1956, then decreased at a fairly steady rate
to 5,029 in 1964.
Changing technologies in other industries may
reduce the market for some castings. For ex
ample, the growing use of continuous casting in
steel production, which eliminates ingot molds,
77
78
This decline in the number of foundries be
tween 1956 and 1964 has been due, in large
measure, to the closing of smaller foundries.
Foundries with fewer than 20 employees ac
counted for over 60 percent of this decline.
Some further displacement of small, inefficient
foundries may be expected as the trend toward
fewer but more mechanized producers con
tinues.
Continued mechanization of materials handling
is expected to be one of the major factors in
reducing man-hour requirements. The continu
ing introduction of materials-handling equip
ment, such as conveyors and trucks, may be
expected to reduce foundry unit labor require
ments substantially, and to mitigate the impact
of the expected increase in output on employ
ment. Various types of conveyor installations,
for example, are reported to reduce man-hour
requirements by at least 50 percent in metal
pouring, to as much as 90 percent in the han
dling of sand and dry bond materials.
In molding and coremaking, the growing use
of pneumatic and other types of conveyors, sand
feeders, and mold and flask-handling equip
ment may also reduce labor requirements per
unit of output. According to a recent industry
survey, within 2 years the number of foundries
with mechanized sand-handling systems will
increase from 32 to about 45 percent, while
those with mechanized mold-handling facilities
will increase from 15 to approximately 25 per
cent.
Improvements in speed, capacity, and automaticity of molding machines continue to in
crease significantly the efficiency of conven
tional sand molding. Advances include faster
mold cycles, increased numbers of machinecontrolled functions, larger flasks that can ac
commodate an increased number of different
patterns simultaneously, and adaptability to
automated mold handling. From 20 to 25 per
cent of all foundries, annually for the past sev
eral years, according to industry surveys, have
indicated plans to purchase molding machines,
a higher percentage than for any other type of
foundry equipment.
One new machine, suitable for jobbing found
ries, for example, increases the number of
patterns accommodated per flask from two to
four, and is capable of doubling output per
man-hour. The greatly increased productivity
of the newer molding machines is reflected in
the decline of about 20 percent in the number of
sand-molding machines between 1959 and 1963,
despite the continuing predominance of casting
by the sand-molding method.
Some experts see an eventual trend toward
flaskless molding for small castings in produc
tion foundries because of its potential substan
tial savings from the elimination of handling
and storage of flasks. Recently, several of these
machines have been installed, largely on an
experimental basis.
Specialized methods of molding are expected to
increase, but only gradually. Industry experts
estimate that specialized methods, which in
clude the shell, C 02 and investment and other
,
ceramic processes, are used for only 5 to 10
percent of all castings produced. The greater
costs of these specialized processes, due to more
expensive binders and patterns and/or the addi
tional investment necessary for special equip
ment, are expected to continue to restrict their
use. Applications are likely to remain limited
to instances where economies may be obtained
in subsequent machining, where extremely close
dimensional tolerances are a primary considera
tion, or, as in the case of the investment casting
of extremely hard alloys, where no other method
of fabrication is practicable or even possible.
Although the shell process also offers the ad
vantages of reducing significantly the amount
of sand and handling required in conventional
molding and adaptability to a higher degree of
mechanization, its economic application is gen
erally limited to mass production foundries. Of
the 5,029 foundries in the U.S. in 1964, only 578
were using the shell process in molding— a 15percent increase over 1958.
Growth of the C 0 2 process— essentially a re
placement of conventional (oil) binders with
sodium silicate which is cured by penetrating
the mold with carbon dioxide gas— may be ad
versely affected by the recent introduction of
air-setting and self-curing resin binders which
are being used increasingly for molds of all
sizes. A total of 757 foundries— 7 percent more
than in 1958— were using this process in 1964.
79
EMPLOYMENT AND OUTPUT IN IRON AND
STEEL FOUNDRIES
Thousands of Employees
2 80
EMPLOYMENT
260
240
220 —
\
V
\ }
\
200
\
180
J
s
J
s
/
\
All Employees
V
*
/
V
\
/
\
\
\/
1 M
\ f
,
/
/
\
✓
\
\
3roductio i Workers
160
A
*
V
/
>
/
N\
\
140
it
0
1947
Sources:
-49
'5 1
’53
'55
'57
*59
’61
Employment, Bureau of Labor Statistics; output, Federal Reserve Board
’63
1965
80
The relatively substantial recent increase—
42 percent since 1958— in the number of found
ries using the investment (lost wax) process,
the most precise but least mechanized of all
casting methods, reflects a growing reliance on
it for the fabrication of intricately designed
small parts and hard-to-machine alloys. Only
265 foundries in 1964, however, were involved.
Specialized processes and improved sand bind
ers are likely to reduce man-hour requirements
in coremaking. Use of the shell and C 02 proc
esses is expected to remain greater in coremak
ing than in molding because, in addition to pro
viding improved surfaces and dimensional ac
curacy, they eliminate the baking operation— a
time and labor consuming step in conventional
coremaking. In 1964, 1,208 foundries used the
shell process and 1,451 the C 02process for core
making— increases of 113 and 25 percent, re
spectively, since 1958.
The use of air-setting and self-curing resin
binders in coremaking is expected to expand.
The main application of these new bonding ma
terials probably will be the replacing of oil
binders in conventional coremaking for larger
castings and small quantity production. The
use of resin binders results in increased core
quality in many applications and significant
reductions in curing time. The “ hot box” proc
ess, another relatively new coremaking method,
is growing in use in high production foundries.
This process substitutes thermosetting resin
binders for conventional binders.
Coremaking is becoming increasingly mecha
nized. Improved core blowers, shooters, and
shell core machines are being introduced more
extensively to replace manual coremaking and
older equipment. Features such as faster oper
ating cycles, simultaneous production of several
cores, and adaptability to improved coremaking
materials make possible substantial reductions
in man-hour requirements. The introduction of
a double cavity core blower— adapted to produce
“ hot box” cores— can more than double the core
output. The greater productivity of new ma
chines is reflected in the decline of about 10
percent in the number of coremaking machines
in use between 1959 and 1963, without a reduc
tion in coremaking capacity. This trend will
probably continue.
Larger machines and more automatic control
are foreseen in diecasting. Machines of greater
size are expected to permit an increase in the
number of cavities per die and in the size of the
cast part. Steps in the process such as metal
feeding, casting removal, and die lubrication
will probably be controlled automatically in an
increasing number of foundries, improving cast
ing quality and leading to further increases in
output per man-hour. The greater efficiency
resulting from continued adoption of such ad
vances is reflected partially in the increase of
21 percent in output of diecastings between
1959 and 1963 while the number of diecasting
machines remained virtually constant.
Limited to the casting of nonferrous metals,
diecasting accounted for 53 percent of the total
output of nonferrous castings in 1964, com
pared with 46 percent in 1957 and 29 percent
in 1947. Because of the growing ability of the
process to produce larger size castings, its share
of total nonferrous output is expected to con
tinue to increase. Since diecasting is generally
more highly mechanized than the methods it
replaces, further reduction in man-hour require
ments in nonferrous casting can be expected.
The use of electric melting furnaces is increas
ing. The close control of melt temperature, in
creased use of scrap metal, and flexibility of
batch type melting, afforded by electric melting,
is leading to greater use of electric furnaces
both as primary melters and refining units.
The number of electric furnaces in use more
than doubled between 1947 and 1963; they ac
count for more than one-half of total steel cast
ings production and a significantly smaller but
growing proportion of iron castings output. Cu
polas, which are also being improved, will prob
ably remain the principal units for melting iron
in large quantities and are expected to be used
increasingly in combination with electric hold
ing furnaces.
Instrumentation is being improved and ex
panded. Increasing emphasis on improved prod
uct quality and efficiency of operation is ex-
81
EMPLOYMENT AND OUTPUT IN NONFERROUS
FOUNDRIES
Thousands of Employees
1947
Sources:
49
51
53
55
57
59
Employment, Bureau of Labor Statistics; output, Federal Reserve Board,
61
63
1965
82
pected to result in continued growth in the use
of precision instruments, including radiographic (X -ray), supersonic, pyrometer, and
radioisotope units in such operations as melt
ing, sand preparation, and inspection. Between
1953 and 1963, for example, the number of ra
diographic units in use more than doubled.
The use of computers for accounting and pro
duction functions is expected to increase, al
though at present only a few of the large found
ries have these facilities. In addition to data
processing for determining sand mixes, furnace
charges, and melting cycles, some experts fore
see computers applied in preparing data for
tape control systems used in connection with
molding and coremaking operations.
Investment in plant and equipment is increas
ing. Expenditures for new plant and equipment
have followed an irregular course since 1947,
but generally have risen in years when output
has increased. Continuing growth in expendi
tures over the next few years, while depending
greatly on future expectations, may accompany
the anticipated increasing output of the indus
try. The index of new equipment orders, pre
pared by the Foundry Equipment Manufactur
ers Association, showed that expenditures in
1964 were more than twice their 1957-59 level.
Eighty-three percent of the respondents in a
recent survey of gray iron foundries indicated
plans to make a major or substantial capital in
vestment in 1965; in 1960, only 40 percent indi
cated similar plans.
More attention is being directed to research and
development (R&D). Expenditures for R&D
by the foundry industry, although relatively
small, are increasing. Extensive studies are
being carried on in automotive technical centers
in such areas as basic metallurgy, molding ma
terials and methods, process control, and pro
duction equipment. Expanded research pro
grams are also being conducted by the Steel
Founders’ Society of America, the Malleable
Founders Society, the Gray and Ductile Iron
Founders’ Society, Inc., and other associations,
for their respective segments of the industry,
and by the American Foundrymen’s Society for
the total industry. For example, the American
Foundrymen’s Society recently increased its
budget for research and reorganized its re
search council to promote more effective indus
trywide research, establish closer liaison with
Government research in metallurgy, and coordi
nate its research activities with nonfoundry
technical societies in areas of common interest.
Manpower Trends and Adjustments
Employment is expected to rise above present
levels if recent growth rates of castings output
continue. Iron and steel foundry employment
(excluding foundries operating as a part of
another establishment) decreased from 233,500
in 1957 to 212,000 in 1964, or at an average an
nual rate of 1.4 percent compared with a rate
of decline of 1 percent between 1947 and 1957.
Nonferrous foundry employment (excluding
foundries operating as a part of another estab
lishment) rose slightly from 73,000 in 1957 to
74,300 in 1964, or at an average rate of 0.3 per
cent a year following a decreasing rate of 1.6
percent between 1947 and 1957. In both the
ferrous and nonferrous sectors, employment in
creased significantly between 1961 and 1964 at
average annual rates, respectively, of 4.3 and
5.3 percent.
The proportion of production workers to total
employment is relatively high in foundries,
comprising 86 percent in 1964 in the iron and
steel foundries and 83 percent in the nonferrous
foundries. The proportions are only slightly
lower than in 1947.
Upgrading of occupational structure is ex
pected to continue. Engineers, metallurgists,
and technicians are increasing in number as a
result of the growing emphasis on improved
mechanization, technology, and quality control.
Employment in these occupations more than
doubled between 1958 and 1963, and repre
sented nearly 4 percent of foundry employment
in 1963.
Increased mechanization may be expected to
continue to alter occupational skills as well as
reduce man-hour requirements of molders and
coremakers. These occupations, which include
the highly skilled hand molders and coremakers,
83
largest foundry occupational group, accounting
for about 20 percent of total foundry employ
ment in 1963.
Nonferrous foundries
Average annual percent change
All employees
1947-57
_ ___________________________ - _ — 1.6
.2
1957-64 __________________________ ____
Production workers
-2 .2
1947-57
______________________
.3
1957-64
__________ . . . . ____
Output
1947-57 _________________________________ _ 2.4
1957-64 _______ _
- ______________ _ 1.0
Iron and steel foundries
Average annual percent change
All employees
1947-57 ________ ______________________
1957-64
______
________________
Production workers
1947-57
_______________________________
1957-64 ___________ ___________________
Output
1947-57
_
_______________________
1957-64
______
. -1 .0
_ -1 .4
_ -1 .3
. — 1.5
.3
1.6
accounted for about 13 and 6 percent of total
foundry employment, respectively, in 1963.
The continuing mechanization of materials
handling will probably increase the number of
equipment operators and maintenance men
while reducing the number of unskilled labor
ers. Materials-handling workers constitute the
Training of employees is receiving increased
attention. In-plant training, particularly onthe-job instruction, is expected to remain as
the chief means of updating skills of present
employees and of filling new positions created
by technological advances. In addition, ex
panded formal training programs, such as those
sponsored by the Training and Research Insti
tute of the American Foundrymen’s Society,
provide technicians and key production person
nel with courses to keep abreast of changing
technologies such as hydraulic and electronic
controls. In an effort to attract technical per
sonnel to foundry work, the scholarship pro
gram of the Foundry Educational Foundation is
being broadened to include scholarship grants
for technical school training as well as engineer
ing grants for university study.
Some key collective bargaining agreements pro
vide income maintenance for displaced workers.
Supplemental unemployment benefit plans were
contained in 10 of 19 agreements in force in
1963, each covering 1,000 or more foundry
workers; provisions for severance pay were in
cluded in 6. Such payments have proven helpful
to workers displaced in the closing of obsolete
plants.
Selected R eferences
Technological Developments
“ Looking Forward to 1975,” Foundry, May 1965, pp. 104-125.
“ New Dimensions in Metalcasting,” Modern Castings, April 1964, pp. 83-100.
“ New Glow in the Foundry,” Dun’s Review and Modem Industry, August 1962,
pp. 30-32 ff.
“ Census of Casting Plants,” Foundry, April 1965, pp. 56-59.
“ Inventory of Foundry Equipment,” Foundry, April 1964, pp. 116-125.
Begeman, Myron L. and B. H. Amstead. Manufacturing Processes. New York,
John Wiley and Sons, Inc., 1963. pp. 43-140.
Cook, Glenn J. Engineered Castings. New York, The McGraw-Hill Book Company,
Inc., 1961. 257 pp.
84
Selective R eferences— Continued
Manpower Trends and Adjustments
Case Studies of Displaced Workers (BLS Bulletin 1408, 1964), pp. 79-88.
“ People in Foundries— 1975,” Foundry, May 1965, pp. 118-121.
U.S. Department of Labor, Bureau of Apprenticeship and Training. Foundry Train
ing Needs and Foundry Training Needs, Job Foundries, 1956 and 1957. Also
summarized by John S. McCauley in Monthly Labor Revietv, October 1957, pp.
1224-1228.
Ammer, Dean S. Mechanization and Manpower in Gray-Iron Foundries (prepared
for the Office of Manpower, Automation and Training, U.S. Department of
Labor). Bureau of Business and Economic Research, Northeastern University,
1965. 234 pp.
The Aluminum Industry (SIC 3 3 3 4 , 3 3 5 2 )
Demand for aluminum in many markets is
rising, in competition with steel, plastics, wood,
glass, and copper. In construction, aluminum is
increasingly used for nonstructural building
facing, siding, window frames, and roofing, in
place of steel, wood, and concrete. Demand for
aluminum in pipe is increasing as indicated by
such varied orders as those for culvert and irri
gation pipe and the 2-mile adjustable horizontal
support pipe for the copper accelerator tube in
the Stanford Linear Accelerator.
The high strength-to-weight ratio of alumi
num contributes to its growing importance in
transportation equipment. Aluminum used in
the average passenger automobile in model year
1964 was estimated at 72.4 pounds, a 2.4-pound
gain over 1963, and estimates are that the use
in the 1965 model year will average 74 pounds.
Slightly more than one-half of truck bodies are
now being made of aluminum. Use in truck
trailers, mobile homes, railroad containers, and
freight cars, new rapid transit trains, super
structures for passenger and freight marine
vessels, structures for small pleasure boats and
for aircraft, underscore the increasing impor
tance of aluminum in transportation.
The use of aluminum in electric power trans
mission lines, and for some consumer durables
such as air-conditioners is expanding. Citrus
juices are marketed extensively in aluminum
Summary of Outlook Through 1970
Improvements in the conventional electro
lytic-reduction method, such as increases in the
size of cells and anodes and greater use of ad
ditives, are expected to continue. Progress is
expected in the development of processes for
direct reduction of bauxite to aluminum. Con
tinuous casting, production of sheet from pel
lets, nondestructive testing and semicontinuous
annealing are important advances in rolling,
drawing, and extruding. Transportation of
molten metal to large users may increase.
Rapid expansion in output is expected to con
tinue for the next several years. Output per
man-hour (data available only for primary pro
duction, SIC 3334) is expected to continue in
creasing at a high rate, reflecting a rising level
of capital expenditures for additional capacity
and modernization. Employment will probably
stabilize at mid-1965 levels as reduction in unit
man-hour requirements is offset by growth in
output.
Outlook for Markets and Technology
Recent trends suggest rapid growth in output
will continue. The Bureau of Labor Statistics
index for primary aluminum output increased
at an average annual rate of 11.4 percent over
1947-57 period. Between 1957 and 1963, the
average annual growth was 5.7 percent, pri
mary production reaching 2.55 million tons in
1964.
In the fabrication sector (rolling, drawing,
and extruding, SIC 3352), the Federal Reserve
Board index showed growth in production of
semifabricated aluminum products (sheet, plate,
rod, bar and wire) at an average annual rate
of 7.2 percent for 1947 through 1957, and 8.5
percent per year, 1957 through 1964.
Resources for the Future, Inc., on the basis
of data terminating in 1960, projections antici
pate growth in the industry at annual average
rates of from 3.5 to 7.8 percent for 1960-70.
Production data for more recent years indicate
the higher rate to be the more likely.
Overhead crane moves a crucible of molten aluminum which has
just been removed from electrolytic reduction cells.
85
86
cans; tops for beer cans are now being- made of
aluminum, although the containers are still
mostly tin-plated steel. Thin aluminum sheets
are used in a sea water desalinization process.
The metal has also a wide variety of uses in the
space program. In the highly competitive area
of containers and packaging, use in 1964 was
16.7 percent above the 1963 level and 48 per
cent above 1962.
According to the Aluminum Association, the
1964 distribution of shipments was as follows
with respect to end purpose: building products
— 23.5 percent of total shipments; transporta
tion equipment— 22.3 percent; electric equip
ment— 11.7 percent; consumer durables— 10.7
percent; containers and packaging— 8 percent;
machinery and equipment— 7 percent; export—
8.1 percent; and other consumers— 8.7 percent.
New processes for primary production are be
ing perfected. Several new processes are being
explored in an effort to achieve one or more of
three objectives: to bypass the high capital
costs entailed in electrolytic-reduction, to pro
duce aluminum economically from a lower grade
of bauxite, or to use the clays abundant in the
earth’s crust as a source of aluminum. Two
promising methods, the subchloride and the
fused alumina processes, bypass the electrolyticreduction phase, reducing bauxite directly to
aluminum.
The subchloride and fused alumina processes
now in pilot plant operation could be placed in
commercial operation by 1970. Capital costs of
these and other new processes may be one-half
to two-thirds those of the conventional electro
lytic-reduction process, although the cost of
electricity may be about the same as for the
electrolytic process. Labor requirements are
not clearly indicated, but operating labor could
be reduced per unit of output by the use of
larger individual process units, while at the
same time maintenance labor requirements
might be somewhat higher.
An abundance of high grade bauxite, and the
large capital expenditures for those new proc
esses retaining electrolytic-reduction, are de
terrents to their intensive development. The
conventional Bayer-Hall process is expected to
continue as the principal bauxite reduction
process.
Improvements continue to be made in the 75year-old Bayer-Hall electrolytic-reduction proc
ess. The conventional method of producing alu
minum is a two-step operation in which bauxite
is processed mechanically and chemically to ob
tain alumina, which is then electrolytically re
duced to the metal, aluminum. New plants and
older plants undergoing expansion are incorpo
rating cells (in reduction phase) that are larger
and have improved design. The increase in size
of cells and anodes, plus development of new
materials for refractory linings, are expected to
extend the interval between cell rebuilding and
the changing of anodes, thus saving labor. Al
loying is being done in reduction cells (60 per
cent of the 1964 primary output), eliminating
the need for separate furnaces for this purpose.
One company reports that use of additives such
as lithium fluoride increases the efficiency of
cells up to 15 percent by shortening reduction
time and decreases unit labor costs. More wide
spread use of additives depends largely on lower
prices.
Continuous casting, fusing of pellets, and bloivmolding are expected to affect both semifabri
cating and end product fabricating. Continuous
casting, first developed in nonferrous operations
in the 1930’s, has only recently been used in
aluminum fabrication to produce substantial
quantities of rod, bar, strip and plate. It is esti
mated that 15 to 20 sheet, and 8 to 10 bar and
rod machines are in operation; additional units
are expected by 1970.
Continuous casting eliminates the need for
ingot casting, storage, and soaking pits, the
molten aluminum going directly from reduction
cells or alloying furnaces to casting wheels or
belts where it is cast and cooled before being
run on rolling stands. The lower capital costs
of continuous casting could induce some end
product fabricators to integrate backward for
the production of their own semifabricated
stock. One end product fabricator claims large
savings from backward integration.
However, because some alloys and products
cannot be fabricated by continuous casting, this
method is expected to remain supplementary to
standard facilities. Conventional stands will
continue to be used in the larger mills, those pro
ducing from 750,000 to 3 million pounds per
87
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN THE ALUMINUM INDUSTRY
Thousands of Employees
Data for 1948 not available
Sources:
Employment and expenditures, Bureau of the Census; 0utput and output per man-hour, Bureau of Labor Statistics.
88
year, because they can be used to produce more
varied products than can the continuous cast
ing units. Some large companies are establish
ing single product line mills which may be ex
pected to continue the increases in the efficiency
of the industry.
Blowmolding is an experimental technique
for shortcutting conventional canmaking proc
esses. This technique would bypass the making
of sheet, forming the can directly from molten
metal. If successful, this method, which uses a
machine costing around $100,000, could effect
substantial manpower and capital savings.
A new technique developed in 1963 fuses alu
minum pellets into sheets up to 36 inches wide.
Like continuous casting, pellet fusing elimi
nates the need for heavy ingot casting, storage,
and breakdown facilities. The lower capital
costs entailed in this technique may result in
backward integration of small and medium end
product fabricators. Such fabricators would
buy pellets from primary producers, and heat
and compact them into sheets for their own use.
Nondestructive testing allows better 'production
control. Radiographic testing, using magnetic
lines of flux, and ultrasonic testing, which re
veal interior irregularities of cast and rolled
products, are being rapidly adopted. Such new
methods make possible rapid correction in the
production process to achieve a more consistent
product. Economies are effected, according to
reports, because closer control of production
results in scrap saving and higher average
grades of metal.
Annealing shifts toward continuous processing.
In conventional batch handling methods, metal
coils are annealed and cooled in the same fur
nace, the whole cycle requiring from 12 to 14
hours. Improvements in the batch method in
volve three chambered furnaces in which three
coils of metal may be in different stages of the
cycle. The three chambers contain a common
inert atmosphere to prevent staining. The first
chamber serves to pre-heat the metal before it
enters the second, or annealing chamber; the
third chamber is used to cool the annealed coils.
This method cuts the time for the complete
cycle by one-half. Only one installation is in
use, but wider adoption is expected.
In another recently developed process, strip
metal up to one-eighth inch in thickness floats
on a directional air stream that suspends and
heats the metal, cooling it as it moves down the
line. The whole process can be completed in
seconds. Although information on rate of flow
is not available, the fact that only 2 men are
needed to tend the strip line, whereas 10 men
are needed for conventional batch handling, in
dicates significant labor saving. Two major in
stallations are in use.
Transportation of molten metal cuts costs. Alu
minum is now being sold and transported as
molten metal, thus eliminating the costs of cast
ing by primary producer and those of remelting
by the purchaser. Molten metal use is feasible
only for large users, since there is a critical
scheduling problem. In 1964, one major pro
ducer of primary aluminum sold 13 percent of
its production in the form of molten metal to
automotive casting plants.
Computers aid in production and office work. At
one plant, alloy metal proportions are deter
mined by computer in order to produce metals
with particular mechanical properties. Guess
work is eliminated and uniform quality is main
tained from melt to melt. In another plant, ap
plication of computers to office work has, in
addition to reducing the clerical force, resulted
in more rapid preparation of control reports to
management on inventory and sales; aided in
production scheduling; and halved the time
formerly required to close the books at the
month’s end.
Advances in the electric power industry allow
aluminum producers to locate near markets.
The production of aluminum consumes vast
amounts of electric power; the cost of power,
therefore, influences choice of plant location.
Recent advances in the technology of steam gen
erating power plants have made it possible to
locate new plants in the Ohio River Valley, close
to the major markets.
A significant increase in capacity is planned.
Capital expenditures in the industry were
$143.8 million in 1963 and $124 million in 1964.
Substantially higher levels are expected in the
89
next few years. The announced expansion in
primary capacity in excess of 500,000 tons and
the need for facilities to fabricate the addi
tional metal are cited by some experts as indi
cating that capital expenditures will total about
$1 billion between 1965 and 1970. The capacity
of the primary aluminum industry in 1970 is
expected to be about 3.8 million short tons—
the amount required to sustain the 1957-64
growth trend in primary output with facilities
operating at 95 percent of capacity. This would
be an expansion of about 50 percent over 1963
capacity.
Research and development expenditures are ex
pected to increase. Competition from other
metals and from nonmetals is expected to stimu
late research and development. Technical ad
vances of foreign competitors may also spur
R&D in an effort to avoid the necessity for
licensing arrangements with foreign firms for
newly developed processes. From an estimated
$30 million in 1962, R&D expenditures are ex
pected to increase to about $70 million annually
by 1975.
Manpower Trends and Adjustments
Output per man-hour will continue to increase
rapidly in primary production (SIC 333b).
Output per all employee man-hour increased at
the annual rate of 3.1 percent from 1947
through 1957, and 8 percent from 1957 through
1963. For production workers only, the rate
was higher from 1947 through 1957— 3.5 per
cent; it was 8 percent for 1957 through 1963.
The sharply higher rate for both groups in the
more recent period reflected the impact of new
capacity built since 1954. Growth probably will
continue at this high rate as new plants and
methods are introduced.
Total employment is expected to remain fairly
stable for primary production (SIC 333b) and
rolling, drawing, and extrusion (SIC 3352).
Total employment (Census data) in both sectors
rose from 36,300 in 1947 to 76,400 in 1964. For
1947 through 1957, the average annual gain in
employment was 6 percent for all employees and
5.4 percent for production workers. For the
years 1957 through 1964, the average annual
rate of gain slowed to 2.3 for all employees and
2.6 percent for production workers.
Employment in primary production reached
its peak, 21,100, in 1956. Employment declined
from 20,500 in 1957 to 18,133 in 1963, rising in
1964 to 20,295, still below the 1957 high. In
rolling, drawing, and extruding, employment
increased from 44,458 in 1957 to 56,063 in 1964,
an average annual increase of 3.4 percent.
Average annual percent change
All employees
1947-57
1957-64 _____________________
Production workers
1947-57 ______________
1957-64
Output
1947-57 ____________________________
1957-63 __________________________________
Output per all-employee man-hour
1947-57 __________________________
1957-63 _____________________________
.
Output per production worker man-hour
1947-57 __________________________________
1957-63 ____________________________________
2.3
5.4
2.6
11.4
5.7
3.1
8.0
3.5
8.0
New techniques may cause backward integra
tion and shift some employment to other indus
tries. Continuous casting and pellet fusing, by
cutting capital requirements necessary to form
molten metal into semifinished products, may in
duce end product fabricators to merge in order
to gain economies inherent in these techniques
that eliminate need for conventional heavy
equipment. Molten metal transportation to
casting plants owned by the automotive indus
tries could shift some employment from alu
minum to the automotive industry.
Early retirement is possible under the 1965
collective bargaining agreements. Retirement
with full benefits is possible after 30 years of
service. Workers may, after 2 years away from
the job because of plant shutdown, extended
layoff, or disability, elect to retire if their age
and continuous service total 75 at age 55; or,
if their age and continuous service total 80 or
more, they may retire at any age. They will
receive a $100 monthly supplemental pension
in addition to the regular monthly pension to
which they will be entitled. This supplemental
90
benefit will be paid until the worker is entitled
to receive full social security benefits.
Supplementary unemployment benefits (SUB)
are available. When laid off, workers covered
by the agreements receive SUB for a maximum
of 1 year at a rate which will bring their total
benefits (State and SUB) to 60 percent of
their average weekly wages.
Extended vacations were started in 196U Under
.
collective bargaining agreements concluded in
1963, one-half of the employees in each depart
ment who were eligible on the basis of seniority,
for regular vacations on December 31, 1963,
were vested with an extended vacation of 10
(consecutive) weeks with 13 weeks pay, effec
tive January 1, 1964. Coverage is to be ex
tended annually so that those employees who
become qualified for regular vacations in 1966,
1967, or 1968 also become qualified for ex
tended vacations. The company, insofar as
practicable, is to schedule employees for ex
tended vacations in approximately equal num
bers each year, such vacations to be granted
once in each 5-year period. The provision for
10-week extended vacations, negotiated in 1963,
has necessitated the training of men to replace
those who are on extended vacation, according
to officials of one plant.
Selected References
Addison, H. et al. “ Explosive Welding of Aluminum Alloys,” Welding Journal,
August 1963, pp. 359-364.
Cleaver, J. M. “ Productivity in an Expanding Industry,” Monthly Labor Review,
April 1965, pp. 373-377.
“ Computer bares secrets of quality: Asarco’s aluminum smelters,” Steel, July 29,
1963, p. 90.
“ Continuous casting line crops aluminum costs,” Steel, November 26, 1962, pp.
84-85.
“ Costs for building and operating aluminum producing plants,” Chemical Engineer
ing, September 2, 1963, pp. 120-121.
Klein, Frederick C. “ Alcoa, Steel Union Sign Three Year Pact Averting Strike;
Firm Raises Prices of Nearly All Fabricated Products,” Wall Street Journal,
June 1, 1965.
“ Siphon transfers molten aluminum; system prevents oxidation during semicontinuous casting,” Iron Age, March 5, 1964, pp. 68-69 .
Smith, J. M. “ The Aluminum Engine . . Let’s Take Another Look,” SAE Journal,
October 1964, pp. 90-95.
Stamper, J. W. “ Aluminum 1963,” 1963 Minerals Yearbook, Bureau of Mines,
U.S. Department of the Interior, 1964.
“ The Aluminum Industry: Its Problems and Progress,” Economic Review, Federal
Reserve Bank of Cleveland, March 1964.
“ Traveling Mold Casting Machine,” Light Metal Age, April 1964, pp. 11, 22.
The Electrical Machinery, Equipment, and Supplies Industry (SIC 3 6 )
sets may rise to over 5 million sets, compared
with 1.4 million sets in 1964, and that by 1970,
color sets may comprise about 50 percent of the
total TV sets in use in American homes, com
pared with 10 percent in late 1965.
New growth markets for manufacturers of
communication equipment are arising from the
development of business communication devices
such as data phones, facsimile transmission ap
paratus, telemetering equipment, and the sub
stitution of electronic telephone switching for
electromechanical systems. By the mid-1970’s,
a major manufacturer of communication equip
ment expects production of electronic switching
systems to account for the bulk of its total
production of these devices.
The development of solid state components,
microcircuits, and other electronic devices is
broadening applications of industrial process in
struments and controls. These new electronic
components which operate faster and are
smaller, lighter, and more reliable than tubes
Summary of Outlook Through 1970
Output will probably continue to increase at
the rate of the past few years, but could rise
faster if defense and space expenditures rise
sharply. Major technological advances under
way which are expected to reduce unit labor
requirements in certain operations include mini
aturization of electronic components and cir
cuits, mechanization of assembly, and contin
ued improvements in metalworking production
and materials handling equipment. Product in
novations for business communication, indus
trial automation, and consumer services are
also likely to be frequent. Employment is ex
pected to rise, with a substantial increase ex
pected for scientists, engineers, and technicians.
R&D outlays will continue to rank among the
highest in industry.
Outlook for Technology and Markets
Production of electrical machinery and equip
ment is expected to continue to increase at the
present rate. Production (FRB data) increased
at an average annual rate of 4.8 percent be
tween 1 9 5 7 -6 4 ; this was below the average
annual increase of 7.1 percent during the 1 9 4 7 57 period. Output (in terms of total value of
shipments) amounted to $31 billion in 1964,
over 50 percent accounted for by 3 of the 8 SIC
major subindustry groups— communication
equipment, household appliances, and electronic
components. Production will probably continue
to increase near the 1 95 7-6 4 rate over the next
5 years, rather than at the high rate of the first
postwar decade. The rate of growth, however,
may be raised by a higher level of defense and
space expenditures and by continued growth in
exports of electrical machinery and equipment.
Product improvements continue to provide new
markets. The anticipated rapid growth in sales
of color TV sets, for example, is attributed
mainly to improved picture quality, lower re
tail prices for color sets, and an increase in
number of color TV programs. In 1966, some
industry sources forecast that sales of color TV
Worker monitors automatic assembly and test equipment which
inserts transistors and other parts into terminal board covers.
91
92
and other conventional components, also are
facilitating- further quality improvements and
market acceptability of computers, numerical
control systems, and other products using elec
tronic components.
Electronic components such as printed■circuits,
transistors, and microcircuits involve more
widespread use of chemical and metallurgical
processing that replace mechanical manufac
turing and assembly. Although mechanical as
sembly is still needed, the production of printed
circuit boards, for example, replaces a substan
tial amount of mechanical wiring necessary in
conventional circuits by chemically etching cir
cuits on the copper foil surface of boards of
various laminates such as paper or plastics.
In contrast to the production of conventional
tubes where assembly is a major task, the manu
facture of transistors, their substitutes, in
volves principally the chemical-metallurgical
process of “ growing” silicon-germanium wafers
and assembly is less important.
The present trend to more widespread use
of microcircuits, involving even more extensive
chemical-metallurgical processes, will substi
tute further these processes for mechanical
manufacturing and assembly. Some experts
foresee excess capacity in conventional machin
ing and assembly facilities as chemical-metal
lurgical processes become more widespread.
Use of microcircuits is expected to become wide
spread. Microcircuits change radically the con
ventional method of mass wiring and assem
bly of separate transistors, capacitors, resistors,
and otjier components that form a complete cir
cuit. Essentially, they are miniaturized elec
tronic circuits consisting of a tiny latticework
of thin metal conductors mounted on material
such as glass or silicon. Microcircuits eliminate
many individual components and many manual
assembly operations, such as hand wiring,
needed in making conventional circuits, and
offer greater reliability, smaller size, less
weight, and lower power consumption. Since
they can be produced by even more automatic
equipment and processes than conventional cir
cuits, labor savings are anticipated.
First developed for missiles and satellites,
commercial and industrial application of micro
circuits is growing and in 1965 may equal or
surpass military and space applications. Cur
rently they are used principally in electronic
computers, but their use is expected to expand
to instruments, industrial controls, and massproduced consumer products. According to one
trade forecast, total sales of microcircuits may
reach $210 million by 1968, more than four
times 1964 sales. Further adoption of microcir
cuits may slow the growth rate of component
production from nearly 10 percent a year dur
ing recent years, to about 4 percent a year dur
ing 1967-72. This decreasing demand for com
ponents may cause an increasing number of
component-producing firms to move into microcircuit production.
Numerically controlled machine tools are likely
to be used more widely. Between 1954 and 1963,
335 numerically controlled machine tools were
shipped to the electrical machinery industry—
a very small proportion of all machine tools in
the industry; 49 percent were shipped after
mid-1962. The largest number of numerically
controlled tools have been installed in plants
making communication equipment. Numerical
control is a technique of automatically operat
ing and controlling machine tools through a sys
tem of electronic devices and coded instructions
on tape. This makes possible substantial reduc
tions in unit labor requirements, tooling costs,
lead time, and inventories relative to those re
quired by conventional machine tools. Some
examples disclose unit laborsavings of 25 to
80 percent, and savings in tooling costs of up
to 85 percent. Numerical control, particularly
suitable for the manufacture of different parts
in small volume, also offers greater flexibility
of production. The outlook for further adoption
of numerically controlled machine tools in the
electrical machinery industry is very favorable,
with significant implications for the nearly
150,000 workers in machining occupations.
Mechanization of assembly may become a major
factor in reducing man-hour requirements in
mass-produced items. Since assemblers com
prise the largest occupational group in the in
dustry— about 18 percent of all production
workers— continued emphasis on further
mechanization of component assembly, some of
93
EMPLOYMENT, OUTPUT* AND CAPITAL EXPENDITURES
IN ELECTRICAL MACHINERY, EQUIPMENT
AND SUPPLIES
Index (1957-59=100)
Ratio Scale
Millions of Dollars
$888.7
1951
Sources:
1953
1955
1957
1959
1961
1963
1965
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures, Bureau of Census.
94
which is already done by machine, is antici
pated. A recently installed assembly line, for
example, consists of conveyor-connected ma
chines which automatically insert a component
onto printed circuit boards, and automatic in
spection machines. The resuhTwas a reduction
in assemblers from 100 to 2, and an increas/in
production of more than 30 percent.
In the production of end products such as
electronic instruments, TV sets, radios, and
home appliances, where assembly is less mecha
nized than in component manufacture, signifi
cant laborsavings, and improved product qual
ity are being achieved by the introduction of
new soldering, welding, fastening, indexing, and
component feeding equipment.
Improved metalworking production equipment
and continuous flow lines are being more widely
adopted. Advances include increased speed, an
increased number of machine-controlled func
tions, adaptability to mechanization of mate
rials handling, and the combining of separate
operations in all types of production equipment.
One new combined drilling and tapping ma
chine, for example, reduced eight separate op
erations for making fractional horsepower mo
tors to two, with expected labor cost savings of
as much as 60 percent. In the production of
household electric lamps, a new automatic unit
operated by 2 workers— 1 feeding and 1 inspect
ing— replaced machinery requiring 30 workers
for the same rate of output.
Laborsavings are also being achieved by more
widespread adoption of continuous flow lines,
consisting of separate units of automatically
controlled production equipment (such as weld
ing, bending, forming, punching, and metalcut
ting machines) connected by the mechanized
transfer of parts. For example, a large firm
recently increased productivity and capacity
substantially by introducing an electronically
controlled production line— containing nine dif
ferent production operations— for the fabrica
tion of refrigerator and freezer doors.
Com puters are being used w idely fo r data proc
essing and to a lim ited extent fo r production
control. According to a 1965 McGraw-Hill sur
vey of large companies, 93 percent of the elec
trical machinery companies who supplied data
reported at least one computer installation—
amounting, in all, to 422 computers, or 13 per
cent of the total number of computers reported
for all manufacturing. Major applications in
clude accounting, inventory control, and pro
duction planning. Computers are also being
used in connection with control of production
processes, such as assembly of circuits and pro
duction of resistors. Twenty-seven percent of
the responding companies reported computers
applied for this use.
Expenditures for research and development ivill
continue to increase. R&D expenditures in the
electrical equipment industry (SIC 36) and
its chief industrial customer— communication
(SIC 48)— reached $2.5 billion in 1963, an
increase of 64 percent over 1956 outlays (Na
tional Science Foundation data). In 1963, they
accounted for 20 percent of the total R&D funds
for industry, second only to such outlays in the
aerospace industry. About 63 percent of this
research was financed by the Federal Govern
ment. R&D expenditures will likely continue
to rise to higher levels in future years, one
estimate projecting a level of $6.4 billion by
1974. Among the areas of research are space
technology, nuclear propulsion, laser technol
ogy, process control systems, and new products
for home and industry such as microwave cook
ing equipment, wall TV sets, ultrasonic dish
washers, video tape recorders, and medical
electronic instruments.
Capital spending may continue to rise. Capital
expenditures for new plant and equipment
reached $889 million in 1964, rising steadily
each year from a level of $450 million in 1958.
Investment in the electronic components and
communication equipment segments accounted
for 51 percent of the industry’s total expendi
ture in 1963. A McGraw-Hill survey of future
plans projects an industry total of $3.3 billion
from 1965 through 1968, or an average of over
$800 million annually. Investment for modern
ization and replacement is estimated to become
even more important, rising from two-thirds to
nearly three-fourths of planned total spending.
However, programs for expansion of capacity
remain significant. For example, one large firm
plans to spend $50 million to double color TV
95
tube and receiver output over the next 3 years
by adding new production facilities and creat
ing 2,000 new jobs.
Manpower Trends and Adjustments
Employment is expected to increase. Total em
ployment increased at an average annual rate
of 2.6 percent between 1947 and 1957, and in
creased at the slightly slower rate of 2.0 per
cent from 1957 to 1964. Total employment in
1964— 1,548,400— however, was slightly lower
than the number employed in 1962, primarily
reflecting the sharp employment decline in the
communication equipment sector (employing
about one-fourth of total industry employment),
largely the result of cutbacks in government
defense purchases. Total and subindustry em
ployment in 1965 indicated a reversal of this
downward trend. Production worker employ
ment followed the same general pattern during
these periods, increasing at an average annual
rate of 1.1 percent from 1957 to 1964. Relatively
high rates of growth in output, particularly in
electronic products, will probably lead to higher
levels of employment.
Occupations requiring special training will con
tinue to increase. Production worker jobs have
been increasing more slowly than administra
tive, sales, technical, professional, and clerical
jobs. Production workers as a percent of total
employment declined from 78 percent in 1947
to 67 percent in 1964. This ratio probably will
continue to decrease, but at a slower rate.
Employment of scientists, engineers, and
technicians is increasing as research and de
velopment programs are enlarged, and manu
facturing techniques and products become more
Average annual percent change
All employees
1947-57 __________________________
1957-64 ____________
Production workers
1947-57 ______
1957-64 ______ . __________________________
Output
1947-57 __________________________________
1957-64 ________________________________
2.6
2.0
1.7
1.1
7.1
4.8
complex. Employment of R&D scientists and
engineers in the electrical equipment and com
munication industries (SIC 36 and 48) in
creased by more than 75 percent between 195764, and is expected to increase by another 16
percent by 1968 to about 88,000. The number
of machinery repairmen, numerical control and
computer programers, and tool and die work
ers— jobs requiring special training— will also
continue to increase.
The rate of growth of employment opportuni
ties for assemblers and machine operators may
be slowed. The proportion of women assem
blers, comprising about two-thirds of the total,
however, probably will increase because of their
aptitude for miniaturized assembly and micro
scopic “ white room” work. Laborers, such as
materials handlers, are likely to decrease be
cause of further mechanization of materials
handling.
Production workers are a significantly smaller
proportion of total employment in plants pro
ducing military-space electronic products. A
BLS survey made in 1965 found that production
workers comprised 32 percent of the total work
force in establishments making military-space
electronic products, compared with 61 percent
in electronic firms making components, 60 per
cent in consumer products, and 57 percent in
firms making industrial-commercial products.
Substantially smaller proportions of semi
skilled assemblers, inspectors, and testers are
found in the production of military and space
items, and a significantly larger proportion of
engineers and technicians.
Job security and facilitating adjustment to new
technology are receiving increased emphasis in
labor-management negotiations. Of 98 major
agreements studied in the electrical machinery
industry, 37 in 1963, covering 223,000 em
ployees, had provisions for severance pay and
layoff benefit plans. Under requirements of a
typical plan included in this study, employees
must have completed at least 1 year of com
pany service to be eligible for graduated bene
fits which vary with length of service.
Joint union-management “ Automation Com
mittees” have been established under a few
96
agreements and some objectives are: To assess
the manpower impacts and requirements of new
technology; to study the adequacy of the job
evaluation system for new technologies; to
explore and recommend methods to minimize
displacement; and to make recommendations
for sharing the benefits of technological change.
Training is becoming increasingly important.
Changing products, equipment, and processes
require training for a wide range of occupations
and skills, including production and mainte
nance personnel, supervisors, technical sales
men, technicians, engineers, and scientists.
Training programs are also an important means
for providing new skills to workers displaced
by new technology. In addition to traditional
on-the-job training, some large companies em
phasize formal classroom training on company
premises, specially developed correspondence
courses, and evening vocational and college
courses.
Selected R eferences
Technological Developments
Dulberger, Leon H. and Joel A. Strasser. “ Electronics Markets— 1965,” Electronics,
Jan. 11, 1965, pp. 87-110; see also pp. i23-125.
Electronic Industries Association, Electronic Industries Yearbook, 1964, (Wash
ington, D.C., 1964), 73 pp.
“ Fabricating Sheet Metal Cylinders in Motor Frame Production,” Automation,
January 1963, pp. 58-60.
Hittinger, William C. and Morgan Sparks. “ Microelectronics,” Scientific American,
November 1965, pp. 57-70.
LaFond, Charles D., Michael Getler, and Rex Pay. “ Special Report on Microelec
tronics,” Missiles and Rockets, Feb. 3, 1964, pp. 23-63.
“ One Plant Does the Work of Three,” Factory, September 1964, pp. 106-108.
“ Tomorrow’s Plant Now,” Business Week, Aug. 1, 1964, pp. 52-53, 56.
“ Two Operations Replace Eight— Dual-Unit Machine Cuts Drilling and Tapping
Costs,” Machinery, February 1965, pp. 113-114.
Manpower Trends and Adjustments
Automation in General Electric— The Human Side of the Story. General Electric
Company (New York, N .Y.), 30 pp.
Docken, F. L. “ Make Change a Part of Training,” The Iron Age, Feb. 18, 1965,
pp. 87-89.
Employment Outlook and Changing Occupational Structure in Electronics Manu
facturing (BLS Bulletin 1363, 1963), 61 pp.
“ Is Incentive Pay Headed for the Shelf?” Business Week, June 27, 1964, pp. 51-52.
International Union of Electrical, Radio and Machine Workers, AFL-CIO. Presi
dent’s Report to the Eleventh Constitutional Convention. (Washington, Sept. 2125, 1964), 285 pp.
The Motor Vehicles and Equipment Industry (SIC 3 7 1 )
Mass production transfer machines are being
made increasingly flexible. New transfer lines
permit greater product flexibility than older
equipment by incorporating multipurpose ma
chines which, with a minimum of adjustment,
can produce a number of variations of a given
part. For example, two or three different en
gine blocks can now be machined on the same
production line.
Flexibility is being achieved also by design
ing storage areas for parts in process. This per
mits shutdown and maintenance of individual
working stations without stopping the entire
transfer line. Flexibility and significant sav
ings in retooling costs are also being achieved
by introducing “ building-block” transfer lines,
constructed from machinery and equipment con
sisting of interchangeable standardized modu
lar units. These lines can be modified to accom
modate changes in parts design or retooling for
car model changes, with a minimum of delay.
In addition, the number of automatic operations
performed on lines is increasing, including the
time-consuming functions of gaging and inspec
tion.
Summary of Outlook Through 1970
Technological advances are continuing in
practically all phases of motor vehicle produc
tion. Important changes include numerical con
trol and electronic machining, and mechanical
part assembly. Expanding research and devel
opment programs are emphasizing advanced
types of engines and computerized systems for
design and engineering.
A major capital investment program to ex
pand plant capacity is underway. Technological
changes are expected to continue to reduce unit
labor requirements, but future employment
levels will also depend on the volume of motor
vehicles output. Output is expected to be higher
in 1970 than in 1964. However, output projec
tions vary; as a consequence, estimates of the
level of employment in 1970 are uncertain.
Employment has risen since 1961, reversing a
downward trend that began in 1953.
Outlook for Technology and Markets
Output of motor vehicles is expected to reach
higher levels. Unit factory sales of domes
tically produced passenger cars, trucks, and
buses (Automobile Manufacturers Association
data) increased at an annual average rate of
4.2 percent from 1947 to 1957 and continued to
increase at the slightly lower rate of 3.7 per
cent a year from 1957 to 1964. During the more
recent period, 1961-64, a period of sustained
growth, unit sales grew 11.6 percent annually.
Sales during the first half of 1965 indicate an
other peak production year. Rising disposable
income, the growing number of multicar fami
lies, an increasing number of eligible drivers,
increasing use of trucks for short and long
hauls, and a high automobile scrappage rate
(5.8 million automobiles in 1964), will prob
ably continue to increase demand for motor
vehicles. Industry and other private forecasts
of automobile sales by 1970, for example, range
from 9 to 12.5 million units, 16 to 61 percent
above 1964.
Numerically controlled machine tools are being
introduced. Numerical control— a technique of
Engineer uses electric pencil to modify automobile design in
experimental computer design system.
97
98
automatic operation and control of machine
tools by electronic devices and coded tape in
structions— particularly suitable for manufac
ture of parts in small volume, has not found
widespread application in this mass production
industry. Between 1954 and 1963, 194 numeri
cally controlled machine tools were shipped to
the motor vehicles and equipment industry, a
very small fraction of the about 76,000 machine
tools installed in the industry. Numerical con
trol is expected to be used increasingly for the
vital function of fabrication of the tools and
dies needed in operating the industry’s many
high-volume parts producing machines, since
faster and more economical retooling processes
and a greater degree of flexibility in design
change are made possible.
forming to cold extrusion. Adoption of quick
die-change stamping presses, for example,
eliminates at least one-half the time and ex
pense of the former manual method of remov
ing, installing, and aligning dies when changing
the part produced.
Electrical discharge and electrochemical ma
chining are likely to be used more widely. In
contrast to the conventional machining tech
niques, applying mechanical force and cutting
tools, these new electronic metal removal proc
esses utilize electrical energy to shape metal
parts. In 1963, a total of about 100 electrical
discharge and electrochemical machine tools
were being used in the motor vehicles industry.
These new processes, however, are expected to
be used increasingly in machining of hard
metals— applications usually uneconomical and
often impossible by conventional processes.
Electrical discharge machining, which can
maintain extremely close tolerances, is being
used in making tools and dies. Much of the
costly and time-consuming hand labor now re
quired is eliminated and tooling lead time is
reduced substantially. Because of the higher
metal removal rates possible with electrochemi
cal machining, this process is being introduced
for repetitive production work.
Growing use of machines for assembly of massproduced parts may reduce man-hour require
ments. Although still quite limited, machines
which can perform automatically such opera
tions as screwdriving, nut running, riveting,
feeding, and aligning are being used increas
ingly for the assembly of mass produced parts.
The majority of assembly machines have com
bined mechanical and manual operations, the
more complex operations still being performed
by hand. Complete automatic assembly is also
being developed, but its application is expected
to be economically feasible for only a small
number of parts. Advantages of mechanized
assembly include improved product quality,
increased speed of output, and reduction both in
inventories and in man-hour requirements. For
example, introduction of a machine which, with
one operator, produces automatically 3 million
piston-rod assemblies a year replaced a 20-man
assembly line in one plant.
In contrast, assembly of major components
and final assembly of motor vehicles— already
highly conveyorized and utilizing many hand
power tools— are expected to remain largely
manual operations. The growing number of
models and accessory options tends to limit the
economic and technical feasibility of mechaniz
ing these operations further. However, more
efficient assembly is being achieved by use of
computers for quality control, and for regulat
ing the delivery and movement o f parts to work
stations on the conveyorized assembly line.
Improved techniques and equipment are con
tinuing to be introduced into various production
operations to reduce unit labor requirements.
These include, among others, simplified redesign
of parts, centralized monitoring of painting
operations, improved materials handling equip
ment, more advanced automatic grinding ma
chines, automatic spotwelding machines, ultra
sonic inspection equipment, and shift from hot
New materials are expected to play an increas
ing role in changing technology. While ferrous
castings and steel remain the most abundantly
used materials in motor vehicles, manufactur
ers are constantly introducing substitute mate
rials to improve quality, functional, or styling
requirements, or to reduce costs. Aluminum die
castings and extrusions, requiring less costly
and fewer processing operations, are being used
99
*T, FACTORY SALES, AND CAPITAL EXPENDITURES
IN MOTOR VEHICLES AND EQUIPMENT
of Employees
200
EMPLOYMENT
900
jtr All Employees
>
600
z
S "V
FVoductio i Worker s
300
1
0
j
Mill Dns of Units
I 0 MOTOR VEHICLES FACTORY SALES
U.S. PLANTS
9
a
7
6
5
4
EXPENDITURES FOR NEW PLANT AND
EQUIPMENT
3
1,000
800
6 00
400
200
0
2
I
0
|
|
19
So rces:
'49
____ 1
____
'51
'53
|
^
J
—
1958 '59 '60 '61
*62 '63
__1
___ ___ 1
____ ___ 1
___
'55
'57
*59
'61
'64
1
Employment, Bureau of Labor Statistics; motor vehicle factory sales, U.S. plants,
Automobile Manufacturers Association; expenditures, Bureau of the Census.
|
1
'63
1965
TOO
increasingly for numerous motor vehicle parts
such as trim moldings, gear housings, grilles,
and the engine block for one car model. Plastics
also are gaining rapidly in use for many parts.
Injection molded plastic instrument panel as
semblies, replacing die cast metal panel assem
blies, provide such advantages as lower tooling
costs, weight savings of up to 80 percent, and
elimination of many finishing operations. Parts
such as crankshafts and connecting rods, long
produced only as steel forgings, are now being
cast successfully in nodular iron— enabling re
ductions in cost of materials and processing.
Search for new techniques in design and engi
neering provides areas of intense development.
In an effort to cut lead time between design
conception and production (now 2 to 3 years
for a new car model), automobile manufactur
ers are already using computers widely for cal
culation of engineering data and are experi
menting with a limited number of numerically
controlled drafting machines. These machines,
automatically operated by tape containing in
structions prepared by a computer, produce
engineering drawings significantly faster than
can be done by draftsmen. In addition, com
puterized systems automating the entire en
gineering-design function are also in the ex
perimental stage. For example, clay model data
pickups using light or laser scanning, and
digitizing sketches (translating into numbers)
via cathode ray tube are among the more pub
licized and advanced computer input techniques
being developed. These systems may enable
rapid modifications of design and conversion of
design data into taped instructions to operate
numerically controlled drafting machines and
machine tools automatically.
Computers are being used widely for data
processing. According to a 1965 McGraw-Hill
survey of large companies in major industries,
all motor vehicle and parts companies respond
ing reported at least one computer installation,
giving a total of 382 computers. Major applica
tions included accounting, payrolls, inventory
control, production planning, and scientific and
engineering applications. Over 90 percent of
the companies reported plans to expand com
puter operations.
Research and development expenditures are ex
pected to increase substantially. Expenditures
for R&D in the motor vehicles and other trans
portation equipment industries— excluding air
craft and missiles— were $1.1 billion in 1963,
rising steadily each year from a level of $700
million in 1957. (These are National Science
Foundation data and the major portion of these
expenditures is attributed, in the same source,
to the motor vehicle industry.) A McGraw-Hill
survey projects continuing increases up to a
$1.4 billion total for 1968.
Areas of research include numerical control
techniques for design engineering and manufac
turing ; programed manipulators to handle
parts in, out, and between machines; process
control systems; laser welding; new bonding
adhesives, and expansion sheet-metal forming.
An important program is the continuing de
velopment of conventional and new engines for
trucks, buses, and automobiles, such as the
turbine engine, Sterling thermal engine, and
Wankel engine. Some industry sources predict
a limited number of turbine powered motor
vehicles available for sale in the early 1970’s.
Introduction of the turbine engine— which is
air cooled, requires a simple electrical system
using one sparkplug, and contains 80 percent
fewer moving parts than a conventional recipro
cating engine— may have significant implica
tions for manpower requirements, skills, manu
facturing methods, engine maintenance, and
repair.
Substantial gains in investment for plant and
equipment are anticipated. In 1964, expendi
tures for new plant and equipment amounted to
$940 million, rising irregularly from a level of
$344 million in 1958. Motor vehicle manufac
turers are engaged in a major program of capi
tal expenditures to modernize existing plants
and build new production facilities. A McGrawHill survey of investment plans indicated a con
tinuing high level of spending through 1968.
Major emphasis is to be on construction of new
plant capacity.
Manpower Trends and Outlook
Employment levels for 1970 depend largely on
projected demand, estimates of which vary
101
probably affect adversely the employment op
portunities of such highly skilled occupations
as machinist, tool-die maker, and pattern-model
All employees
1947-57 _____________________________
0.02
maker. The sizable occupation of welders,
1957-64 _______________________
- . 3accounting for about 5 percent of total employ
Production workers
ment in 1960, may also be affected by introduc
1947-57 ___________________________________ - . 4
tion of automatic welding techniques. Increas
1957-64 ___________________________
-.5
ing emphasis on efficiency of final assembly and
Motor vehicle factory sales, U.S.
plants
mechanization of part assembly probably will
1947-57 ___________________________________ 4.2
reduce the demand for assemblers—the largest
1957-64 ____________________________________ 3.7
single occupational group, comprising about 12
percent of total employment in 1960. Laborers,
declining by over 30 percent between 1950 and
widely. Between 1961 and 1964, total employ
1960, are expected to continue to decrease in
ment grew from 632,300 to 755,400, and con
number with increasing mechanization, par
tinued to increase to 846,900 in the first 6
ticularly of materials handling functions.
months of 1965. In the preceding period, 1947
to 1961, total employment followed an irregular
Some Issues and Examples of Adjustment
course reaching a peak of 917,300 in 1953 and
a low of 606,500 in 1958. Production worker
Early retirement programs are expected to open
employment also reached its peak in 1953, low
up some job opportunities. An agreement nego
in 1958, and has been growing steadily since
1961.
tiated by a major union and three large motor
vehicle firms in 1964 was designed to encour
Future employment trends will depend
age early retirement of long-service workers by
largely on the changes in demand as well as
reducing the age at which full retirement bene
on the effects of improved technology. If pro
fits could be obtained, from 65 to 62, and in
duction of automobiles in 1970 reaches only the
creasing pensions by more than 50 percent.
lower prediction of 9 million units, employment
Moreover, this agreement provides for substan
will then be lower than the anticipated level
tial supplementary payments to workers with
for 1965. If the higher predicted level of out
10 or more years of service who retire between
put is achieved (12.5 million automobiles),
the ages of 60 and 65, and to those between ages
employment in 1970 may exceed the 1965
employment level.
55 and 60 whose age plus years of service
equals at least 85. These supplemental benefits
are payable until the age of 65, at which time
Occupational structure is expected to continue
they are dropped and the worker receives the
to change. The ratio of production workers to
basic pension and social security benefits. It
total employment declined from 82 percent in
is expected that a substantial number of the
1947 to a low of 75 percent in 1958, and then
estimated 30,000 workers eligible for this plan
increased to 77 percent in 1964. Employment
will be induced to retire before the age of 65,
of engineers, designers, draftsmen, and tech
opening up some jobs and making possible
nicians is increasing as research, development,
advancement for younger workers.
design, and engineering functions are enlarged.
Between 1950 and 1960, these occupations (ac
cording to Census data) increased by more
Supplemental unemployment benefits (SUB)
than 70 percent. The future rate of growth of
and separation pay provide continuing income
these occupations, however, may decline as
for employees laid off. All major labor-manage
drafting machines and computer assisted sys
ment agreements provide supplementary unem
tems are introduced. Employment of program
ployment benefits (as well as hospital, surgical,
e d , systems analysts, and computer operators
and medical benefits) up to 52 weeks to workers
may increase.
who are temporarily laid off because of reduc
Among production workers, further use of
tion in force, plant closings, or shutdown of
numerical control and electronic machining will
specific operations. Workers who are laid off
Average annual percent change
102
for a continuous period of at least 12 months
are entitled to a lump-sum separation payment,
based on length of service and rate of pay. This
benefit, however, is reduced by the amount of
SUB and other company-financed benefits a
worker may have received.
Major lab or-management contracts 'provide
greater worker job security in plant closings
and other changes. Provisions include the right
of a worker whose job is discontinued to trans
fer to any job he can perform within the plant,
and with preferential rights to transfer to jobs
at any other company plant within a specific
geographic area. If work is transferred to an
other plant, employees have the right to request
transfer to the new plant, retaining full senior
ity, and to receive a relocation allowance when
the plants are at least 50 miles apart.
Selected References
Technological Developments
Carroll, William. Automotive Gas Turbines, Coda Publications, 1963. 120 pp.
“ Computers Speed the Design Cycle,” Business Week, Nov. 7, 1964, pp. 134-136.
Emerson, Charles. “ A Primer on Automatic Assembly,” American Machinist,
Feb. 15,1965, pp. 83-98.
Geschelin, Joseph. “ Major Engineering Trends,” Automotive Industries, May 15,
1965, pp. 73-74.
Gomolak, Louis S. “ Better and Faster Design by Machine,” Electronics, June 1,
1964, pp. 64-71.
Katke, Marvin L. “ The Challenge and Opportunity of Manufacturing,” Automotive
Industries, Feb. 1, 1965, pp. 19-21.
Machinery, December 1964 (Annual Automotive Production Number). 244 pp.
Outlook for Numerical Control of Machine Tools (BLS Bulletin 1437, 1965), 63 pp.
Manpower Trends and Adjustments
Bluestone, Irving. “ Automation, Collective Bargaining and Beyond,” Paper pre
sented to the Conference on the Manpower Implications of Automation, Dec. 8-10,
1964, Organization for Economic Co-Operation and Development, Washington.
Case Studies of Displaced Workers (BLS Bulletin 1408, 1964), pp. 23-46.
Denise, Malcolm L. “ Impact of Automation on Employment,” Hearings Before the
Subcommittee on Unemployment and the Impact of Automation, of the Commit
tee on Education and Labor, House of Representatives, 87th Cong., 1st sess.,
Washington, March and April 1961, pp. 509-574.
“ Early Retirement Plan Scores Big,” Business Week, May 22, 1965, pp. 166, 168.
Weber, Arnold R. “ The Interplant Transfer of Displaced Employees,” Adjusting
to Technological Change, Somers, G. G .; Cushman, E. L .; and Weinberg, N.,
editors, Harper and Row, 1963, pp. 95-142.
The Aircraft, and Missiles and Space Vehicles Industries (SIC 3 7 2 , 1 9 2 )
and supporting ground facilities and equipment
will be produced.
Summary of Outlook Through 1970
A wide range of advances in metalworking
technology are expected, including the continu
ing development of new space program mate
rials and the equipment and techniques for
utilizing them in fabrication, such as new
forming, joining, and metal removal methods.
The use of numerical control techniques is
expected to increase.
While the level of employment in the aircraft
and missiles industry has fluctuated widely
over the past 10 years, the 1970 employment
level is expected to be near or slightly below the
1964 level. Substantial changes in defense and
space program budgets, however, could alter the
prospects. Increases in the number of scientists,
engineers, and skilled workers are expected.
Extensive training and retraining programs
will continue to accommodate technological
changes.
Increases in research and development activity
are expected to continue. The aircraft and mis
siles industry embraces one of the world’s larg
est concentrations of R&D activities. In addi
tion to R&D related to commodity production,
a growing and substantial proportion of the
industry’s sales consists of receipts from gov
ernment agencies for R&D services only. Ac
cording to the National Science Foundation,
R&D expenditures in these categories for 1963
($4.8 billion) were almost double those for 1957,
and constituted 38 percent of total United
States R&D expenditure, compared with 32 per
cent in 1957.
Continuing expansion of the space program
is expected to cause an increase in R&D expendi
tures relative to total production. One organi
zation has predicted that by 1969, the industry’s
Outlook for Technology and Markets
Growth in industry’s output is likely to be
limited. Aircraft production, in decline between
1957 and 1963, rose in 1964 and is expected to
be slightly higher than the 1964 level in 1970.
The upturn in aircraft production is due largely
to aeronautical developments which have re
sulted in extensive programs for reequipment
of the Military Air Transport Service and civil
ian airlines with new jet planes and to the avail
ability of jet-powered planes and helicopters for
general aviation markets. Major types of air
craft which may add to production during the
1965-75 decade include the supersonic trans
port, a supersized cargo transport with a pas
senger transport version, and possibly a vertical
lift transport.
Missile production, especially strategic mis
siles, is expected to continue declining. Some
growth is expected in the production of space
vehicles and systems, although the number of
large space vehicles is not likely to increase be
yond the presently planned levels for 1969. Al
though the space program is largely research
and development, a few custom made vehicles
Machine tool operator monitors a numerically controlled
milling machine.
103
104
R&D budget will be 60 percent greater than its
production budget. The same organization es
timated that for 1963 the production and R&D
budgets were about equal.
Demand for new space vehicles and more
powerful means of propulsion, the need for de
veloping new equipment to do jobs already pro
gramed, and the hazard to humans of the space
environment make research, development, and
testing increasingly important to the industry.
Testing the properties of new materials, the
performance of subsystems and systems, and
structural and environmental testing, including
simulation of complete outerspace environ
ments, are examples of industry research activi
ties. In addition, research, development, and
testing of manned aircraft of the future, such as
vertical take-off and landing craft, and super
sonic and hypersonic transports seem likely to
increase in the next few years.
Expenditures for new plant and equipment re
flect the changing nature of the industry. Be
tween 1954 and 1963, expenditures for new
plant and equipment by 16 major aircraft com
panies totaled more than $2 billion. A peak of
plant and equipment expenditures in 1957 re
flected emphasis on missile production. Capital
spending declined after 1957, but rose to another
peak in 1963, with the increase in expenditures
for the space program. Almost all the new fa
cilities were reported to have been for R&D
programs. Investment in highly specialized fa
cilities is expected to continue.
New manufacturing operations increasingly in
volve materials that can withstand extreme tem
peratures, pressures and stresses. The skin of a
Mach 3 supersonic plane reaches an average
temperature of about 600°F in flight; turbine
inlet gas temperatures reach 2,000 to 2,500°F.,
and loads on turbine buckets reach 18,000 psi.
For space vehicles, where speeds of reentry
reach 25,000 m.p.h., demands are still greater.
It is estimated that by 1975, combustion tem
peratures of rocket engines will reach 6,000°F.
Likely developments, therefore, include new
methods of using titanium because of its ability
to withstand extremely high temperatures and
its high strength-to-weight ratio. Refractory
metals such as columbium, molybdenum, and
tantalum probably will not be used much before
1980. New alloys of these metals and composite
substances, such as metals and plastics, metals
and ceramics, ceramics and plastics, are being
developed. Aluminum and magnesium alloys
are expected to remain the basic structural ma
terials of subsonic vehicles, launch vehicles, and
the internal cores of many advanced models.
Titanium is of most interest currently for
rockets and space vehicles. Titanium, super
alloys, and refractory alloys will receive pref
erence as primary structural materials for su
personic and hypersonic vehicles. Reinforced
plastics will probably be used for secondary
structures, hot gas ducts, heat shields, radome
walls, rocket motor cases and nozzles, and plas
tic foams for thermal protection of all kinds.
Neiv methods of fabrication are being used on
new materials. New manufacturing techniques
and specially designed equipment are used to
work the new materials; in some cases, because
these materials are extremely hard and do not
lend themselves to fabrication by conventional
means; in other cases, because new materials
with high mechanical strength are best em
ployed in built-up structures using extremely
thin gage sheet. Metal forming and joining of
the new materials are expected to grow at the
expense of machining. Many products will be
made in final form in which machining is not
necessary.
More advanced methods of metal forming evolve
as use of the technique increases. According
to forecasts made by experts for the Aerospace
Industries Association (A IA ), metal forming
may rise from about 25 percent of fabrication
costs in 1964 to about 35 percent in 1975 be
cause of extensive use of sheet metals in space
vehicles. New forming methods include high
temperature and subzero forming, forming at
high energy rates, powder metallurgy, filament
winding, etc. Some of these methods are said to
require further development before extensive
capital outlays can be justified.
High temperature forming (over 600°F.)
will be necessary for titanium, refractory
metals, and other high strength alloys. Medium
and high pressure presses (2,000 to 200,000
psi), capable of exerting higher pressures over
105
EMPLOYMENT AND CAPITAL EXPENDITURES IN
THE AIRCRAFT, AND MISSILES AND SPACE
VEHICLES INDUSTRIES
Thousands of Employees
Thousands of Employees
125
100
75
50
25
0
1954
1956
1958
I960
1962
1964
1966
Millions of Dollars
400
300
200
100
0
1954
Sources:
'55
'56
*5 7
'58
*59
'60
'61
'62
'63
' 6 4 1965
Employment, Bureau of Labor Statistics; scientists and engineers, National Science Foundation ;
expenditures, from an Arthur D. Little, survey of 16 major companies.
106
larger areas, may become more important.
More chemical explosive forming may be used
for exceptionally large parts. Conventional
bulging methods will be increasingly improved.
Capacitor discharge forming is rapidly becom
ing a competitive metal forming method and
may make feasible operations formerly con
sidered impossible. Portability and flexibility
of capacitor discharge equipment will permit
on-site or in-position forming of parts which
previously required removal to shop areas. The
capability of the equipment to form large arti
cles is improving at a very rapid rate.
Welding is expected to increase as joining be
comes more important. In 1964, welding and
brazing are claimed to have accounted for about
12 percent of the fabrication costs of aerospace
systems and 30 percent of all joining opera
tions. The operation is expected to account for
about 28 percent of fabrication costs and 60 per
cent of joining operations by 1975, according to
AIA experts. Electron beam or laser welding
is expected to rise from 1 to 28 percent of all
welding. Diffusion bonding, a method of weld
ing metals of dissimilar properties and now
negligible, is expected to rise to 10 percent.
Frequently, these new methods are used be
cause small quantity production does not war
rant the use of older, high quantity methods.
Adhesive bonding will be used to fasten ablative
and insulating materials to structural members,
to bond composite structures, and in bonding
insulating materials themselves. Mechanical
fastening is expected to fall from around 60
percent to 30 percent of joining.
Metal removal is expected to decline relative to
other fabricating techniques. Despite improve
ments in conventional machine tools and rapid
development of new processes, AIA experts
expect metal removal to decline from about 63
percent of total fabrication costs in 1965, to
about 37 percent in 1975. Current research is
designed to improve conventional cutting tools,
adaptive controls, tool vibration control, meth
ods of automatic setup, and computer aided
design. New processes expected to become in
creasingly important in metal removal include
chemical milling, electrical discharge and ultra
sonic machining, and machining by electron
beams, lasers, and other newly developed meth
ods. Many products may be made in final form
in which machining will not be necessary.
Numerical control processes are expected to ex
pand to all phases of manufacturing. Changes
in work requirements, towards greater com
plexity and closer precision, as well as wider
product diversity, smaller sized lots, and more
frequent engineering changes, tend to increase
the need for numerical control. In 1964, more
than 600 numerical control tools were in use in
the industry. AIA experts expect more than
1,600 by 1975.
Early emphasis of numerical control (N /C )
equipment was on contour type machines, but
the greatest future growth is expected in posi
tional applications and combination and multi
purpose type machines. Entirely new types of
machines which are anticipated include tube
benders, lofting, drafting, and dimensional in
spection machines. Several new types of nu
merical control processes are also anticipated.
Computer programing of numerical control
tools is expected to increase and in many cases
the tape will be a direct computer input to the
machine. Major cost reductions are expected
from a universal programing system developed
cooperatively by the aerospace industry under
sponsorship of the Aerospace Industries Asso
ciation, which reduces setup time for all nu
merical control tools to a fraction of the time
previously required. Numerical control tools
already reduce unit labor requirements by an
estimated 20 to 80 percent, depending on the
application.
Because one N/C tool displaces more than one
conventional machine tool, the total number of
machine tools is likely to be reduced. By 1975,
the number of tools in the inventory is expected
to decline substantially while the value of the
stock of tools remains constant— reflecting the
high productivity of modern tools.
Plastics and ceramics fabrication. In general,
ceramics and plastics are formed by high tem
perature and/or high pressure methods. As
some of these materials are forced to meet de
sign specifications at 4,000 °F. or higher, fabri
cating temperatures and pressures are likely to
go higher. Some ceramics processing tech
107
niques now in rudimentary use which need addi
tional development include hot pressing, iso
static pressing, vapor deposition, plastic air
spraying, and filament winding.
Use of computers is expected to expand. Ac
cording to a 1965 McGraw-Hill survey on the
use of computers, all aerospace companies in
their sample use computers for accounting, in
ventory control, and production and planning
control. Ninety-two percent of the companies
use them in management science, and in scien
tific and engineering applications; 69 percent
in data acquisition; 54 percent in business fore
casting; and 31 percent in location selection or
for other purposes. Almost one-half of the firms
use computers in production line operations.
Nearly all of the firms believed their computers
had performed as well as or better than ex
pected and were planning to include additional
applications.
Manpower Trends and Outlook
Employment in 1970 may be only slightly below
the 196I level. Between 1958 and 1960, em
f.
ployment in aircraft (SIC 372) and missiles
and space vehicles (SIC 192) declined from
848,100 to 765,100, reflecting the decline in air
craft production. After 1961, these industries
were becoming increasingly involved in the
missile and space program with a resultant
rise in employment to 833,600 in 1963. With
deemphasis of missile production, employment
declined to 790,600 in 1964, and in 1970 may be
only slightly below the 1964 level.
Structural composition of the work force may
continue to change. Between 1958 and 1964,
production workers in aircraft and missiles de
clined from 526,300, or 62 percent of the work
force, to 407,000, 51 percent of the total. Pro-
Average annual percent change
All employees
1958-64 ___________________________________ - 1 . 2
Production workers
1958-64 __________________
-4 .2
Scientists and engineers
1957-64 __________________________________
8.8
duction workers are expected to remain at about
50 percent of total employment. Over the same
period, the number of scientists and engineers
rose from 59,000, or 18 percent, to 106,000, or
28 percent of the industry’s nonproduction
workers. This proportion is expected to in
crease. The National Science Foundation pro
jects industry scientist and engineer employ
ment in aircraft and missiles to reach 195,000
by 1970; requirements for research technicians
are projected to rise from 49,000 to 107,000.
Some Issues and Examples of Adjustments
Companies provide training to relieve skill
shortages. In the shift to space technology,
many aircraft companies had to undertake
extensive education and training programs.
Training was given both in-plant and at educa
tional institutions for all types of employees;
factory, office, semiprofessional, managerial,
and engineering. Many companies continue
in-plant retraining of workers whose jobs have
been eliminated by technological change. Many
workers, therefore, have learned by retraining
to perform tasks such as plasma welding,
chemical milling, and electrical discharge ma
chining, little known until recently.
However, shortages of skilled and profes
sional workers have continued to exist. Short
ages are particularly acute for physicists,
mathematicians, and electrical, mechanical,
and aeronautical engineers. Some companies
report shortages of skilled production workers
such as draftsmen, machinists, tool and die
makers, and electronic technicians.
U.S. Government training programs supple
ment those of aircraft and missile companies.
Training programs under the Manpower Devel
opment and Training Act of 1962 are relieving
shortages of basic skills. A single aircraft plant
placed 494 persons out of 626 trained in basic
machine shop operations, template, and tool
and die making. Other courses given specifi
cally for the aerospace industry are micro
miniaturization, arc welding, and electronic
mechanics.
State employment services aid industry and
displaced workers. In addition to interarea
108
recruiting, counseling, testing, and initiating
training programs, State employment agencies
are conducting research designed to maximize
the utilization of skilled aerospace workers who
have been displaced. In Washington State, for
example, the State employment agency, under
contract with the U.S. Department of Defense,
has conducted a study of the effect of the “ DynaSoar” contract cancellation on employees in
the Seattle area. Similarly, the New York State
Department of Labor has undertaken a study
of aerospace employees laid off in the NassauSuffolk area.
Hiring practices and severance pay plans reflect
the tendency toward short-term fluctuations in
employment. Sudden contract terminations re
sult in frequent periods of unemployment for
some workers. Companies receiving additional
contracts, however, customarily offer employ
ment to workers laid off by other companies.
A few companies have severance pay plans
under collective bargaining agreements which
provide payments dependent on absolute termi
nation and length of service. More prevalent,
however, is the “ extended layoff benefit plan,”
which differs from traditional plans largely in
that the employee need not be terminated to
receive payments and there is no explicit state
ment of termination. The employee receives a
lump-sum payment which supplements State
unemployment benefits, but retains job senior
ity, accrued vacation and sick leave, and in
surance benefit coverage, for an indeterminate
period.
Planned expansion in other markets may offset
possible declining domestic defense require
ments. Special industry committees have been
formed to boost U.S. participation in a multi
billion dollar new equipment program of Allied
Nations, to facilitate the continued conversion
from a production oriented technology to one
that is research oriented, and to create condi
tions permitting application of skills acquired
in systems research toward solution of other
major national problems. In California, for
example, aerospace companies are assisting in
the solution of such diverse and difficult prob
lems as integrated transportation systems, air
and water pollution control, worker retraining,
crime control, and the desalinization of sea
water.
Selected References
“ Aerospace Economics,” Aerospace, June 1963, pp. 2-11. Stanford Research
Institute.
Aerospace Employment, Labor Market Reports 102, 105, 111, 112. U.S. Depart
ment of Labor, Bureau of Employment Security, Washington.
Aerospace Facts and Figures, Aerospace Industries of America, Washington, 1964.
Aerospace Industries of America, Annual Report, 1963.
Aerospace-Technical Forecast, 1962-1972, Aerospace Industries Association of
America, Inc., Washington.
Brown, Edmund G. “ New Dimensions for Aerospace Technology,” Aerospace,
spring 1965, pp. 6-9.
Davis, Lt. Gen. W. Austin. “ Trends in Aerospace Technology,” The Sperryscope,
First Quarter 1965.
DMS, Inc. Aerospace, FY 1966-70, New Haven, Conn., 1965.
“ Fewer, Better Machine Tools,” American Machinist, July 5, 1965, pp. 80-82.
Miller, Thomas G. Jr. Strategies for Survival in the Aerospace Industries, Arthur
D. Little, Inc., 1964.
The Industry-Government Aerospace Relationship, Stanford Research Institute,
Menlo Park, Calif., May 1963.
The Instruments and Related Products Industry (SIC 3 8 )
medicine. The proposed conversion of U.S.
scientific measurement to the metric system
would expand the market for instruments.
Some of the expected new demand for instru
ments during the remainder of the decade will
probably be centered in industries specializing
in producing electronic instruments and may
not be reflected in data for this industry.
Summary of Outlook Through 1970
Product innovation, including development
of instruments of greater accuracy and relia
bility, smaller size, and increased sensitivity,
probably will continue to be the principal area
of advancing technology. Instrument makers
also are expected to give increasing attention
to the use of labor saving techniques, such as
numerical control, in their manufacturing op
erations. Increases in instrument output and
employment are anticipated through 1970, in
response to increasing market demand due to
greater industrial automation, growth of re
search and development, and expansion of space
and defense programs.
New markets for industrial instrumentation
will offer greatest growth potential. Most rapid
growth is expected from industries in early
stages of automation, such as mining, transpor
tation, and batch-type manufacturing indus
tries, including nonferrous metals, iron and
steel, water and waste treatment, control of air
pollution, and stone, clay, and glass products.
Capital spending in these industries is expected
to increase rapidly and the portion applicable
to instrumentation even more rapidly. Con
tinuous-process industries, which have long
been the largest volume market for instruments,
are expected to remain so at least until 1970.
A trade publication survey of 60 large instru-
Outlook for Technology and Markets
Rapid growth in output is expected to continue.
The Federal Reserve Board index for instru
ments and related products (SIC 38) advanced
at an average annual rate of 6.2 percent be
tween 1947 and 1957 and at the lower rate of
4.8 percent between 1957 and 1964, but still
above the growth rate for manufacturing. For
the diverse industries within the industry
group, however, growth trends vary markedly,
reflecting differing market demands and rates
of technological innovation. Production of sci
entific, industrial, and technical instruments
has been increasing consistently throughout the
entire 1947-64 period, at a considerably higher
rate than that for the group as a whole. Output
of surgical, medical, and dental instruments,
increased relatively more slowly and the do
mestic output of watches and clocks declined.
Many developments point to an increasing
demand for instruments: Continuing high
levels of spending for space and defense pro
grams, rapid growth of civil aviation and in
creasing complexity of air traffic control and
navigation facilities, expected growth of the
continuous-process industries, greater indus
trial automation, expanding medical care pro
grams, and increased spending for research and
development in such fields as oceanography and
Magnifying up to 100,000 times, the electron microscope is used to
aid scientific and industrial research.
109
110
ment-using companies indicated that by 1975,
10 to 15 percent of,their total spending for
plant and equipment would be for instrumenta
tion, as compared with mid-1965 averages of
3 to 5 percent. Some companies already were
spending 10 percent.
Product innovation is expected to remain the
most important aspect of technological develop
ment. Product innovation will mean continued
improvement of existing instruments and the
development of complete new families of instru
ments. Improvements in existing instruments
include smaller size, wider sensitivity ranges,
increased ruggedness, improved resolution in
optical instruments, and better stability in elec
trical and electronic instruments. Modern elec
tron microscopes, for example, have improved
vacuum and higher resolving power. The relia
bility of oscilloscopes is increasing, while power
requirements and size are being reduced.
New instrument families include radiation
detection, measuring and utilization instru
ments, infrared sensing instruments, and ultra
violet detecting and analytical apparatus, ultra
sonic detection instruments, a range of new
optical instruments associated with laser tech
nology, and instrumentation for advanced space
research. Newly developed nuclear magnetic
resonance instruments can identify and char
acterize organic molecules. Increasing use is
made of nuclear techniques, such as those in
volved in oil well logging, thickness and density
measurement with nuclear gages, the measure
ment of ground, air, and water contamination,
neutron activation analysis, and in nondestruc
tive testing with radioisotopes. The trend
towards more complex and multipurpose in
struments, greater miniaturization, increasing
precision, and an increased demand for inte
grated control systems is expected to continue.
Important product innovations are occurring in
photographic equipment and supplies. Included
are: instant picture processes and equipment,
self-loading and modular cameras, totally new
concepts such as “ holograms,” improved infra
red photographic devices and film, and the de
velopment of nonsilver, light sensitive materials
and equipment for using them. The latter have
proved valuable in the reproduction of office
documents and engineering drawings; future
opportunities are said to exist in image retrieval
systems, data storage, transmission and re
trieval, commercial printing, etc. Fiber optics,
a technique of bending light rays for photo
graphic and lighting purposes, television and
other optical applications, is a laboratory devel
opment expected to have wide application in the
future.
Industry is endeavoring to improve fabrication
methods. Instrument makers are expected to
direct increasing attention to the application
of labor saving techniques in their own opera
tions ; however, instrument manufacture is
characterized by short production runs of spe
cialized and varying products, and frequent
design changes which make the application of
automatic production methods difficult. These
methods may be used increasingly in fabricat
ing stages, but assembly, balancing, and cali
bration remain largely manual operations. Some
items, for which automatic equipment tech
nically could be used, often are produced in
insufficient volume to justify the cost of the
equipment.
Numerically controlled machine tools, notable
for increasing efficiency in job lot production,
are being used in instrument manufacturing.
In 1963, 68 numerically controlled tools were in
use and the number was increasing. Numeri
cally controlled machine tools reduce per unit
setup time associated with the use of conven
tional machine tools.
The practice of using high strength adhesives
to assemble instruments and parts is increasing.
The use of transfer devices, including conveyor
systems, is growing and more products are be
ing designed for portability and ease of han
dling in manufacturing.
Makers of specialized instruments are improv
ing production processes. The availability of
precision mechanical components for optical
equipment, for example, reduces the need for
highly skilled instrument makers in the process
of centering the optical and mechanical axes of
the instruments. Assembly can now be per
formed at the distributors’ level, permitting in
struments to be shipped unassembled instead of
being factory-assembled. This development al
lows dealers to offer greater selectivity without
increased inventories.
in
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES IN
INSTRUMENTS AND RELATED PRODUCTS
Index (1957-59=100)
Ratio Scale
Millions of Dollars
Sources:
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures, Bureau of the Census.
112
The application of computers in solving the
mathematics of optical physics and the develop
ment of low diffraction rare earth glasses are
new techniques utilized to produce superior
optical instruments in shorter time. Solid state
techniques and the use of integrated circuits are
important improvements in electronic instru
ments manufacturing. New numerical control
processes for circuit board etching and parts
insertion are being combined with automatic
soldering techniques, substantially reducing as
sembly labor requirements. Integrated circuits
eliminate many individual components and
many assembly operations, offer greater reli
ability, smaller size, and lower power consump
tion.
Automatic data 'processing and remote datacollection systems (RDC) are being used by a
few large companies. Information on comple
tion of individual operations, such as number of
parts completed and inspected, time required,
and hourly wage rates, is continuously trans
mitted to a remotely located computer. Total
inventory and costs and forecasts of completion
time for the project are calculated. RDC sys
tems are said to permit a constant check on
quality and costs and to obtain maximum utili
zation both of men and machines. In one large
company, for example, remote data-gathering
equipment installed in clean rooms (sealed,
pressurized, and dust free) is said to save
$40,000 a year above the cost of the equipment
by permitting workers to “ report” without leav
ing the room. Remote data gathering is said to
be most useful in operations involving exten
sive use of highly skilled labor. In reporting
labor costs on jobs, a system with 10 input sta
tions is said to replace from three to five clerks.
Ultimately, RDC may be incorporated in “ total
management information systems” which per
mit similar controls of the production process
from incoming orders to product shipment.
Other modern management methods in in
creasing usage, such as operations research,
critical path analysis, and PERT (Program
Evaluation and Review Technique), are facili
tated by a constant flow of accurate information
from remote data-gathering facilities.
The spread of quality control systems and equip
ment reflects demand for greater reliability. In
addition to extensive testing equipment, preven
tive systems, such as clean rooms, air-condition
ing and pressure systems are used increasingly,
especially in making scientific and engineering
instruments. Zero defect programs may spread
to instrument manufacturing. More complete
testing of each instrument part and use of as
sembly stations where completed instruments
are tested are said to be increasing.
A rising trend in research and development is
likely. Between 1956 and 1963, annual expendi
tures for research and development more than
doubled, rising from about $200 million to
nearly $500 million. Increased outlays were
accompanied by a 70-percent increase in em
ployment of scientists and engineers, from
10,200 to 17,200. Deeper involvement in pro
duction of complete systems will require
increased outlays for research into widely
differing industrial technologies. In addition,
considerable research will probably be devoted
to methods for improving their own production
processes.
Capital expenditures are expected to continue
rising. From an average of $96 million annu
ally between 1949 and 1956, expenditures for
new plant and equipment rose to an average of
$172 million between 1957 and 1963. Increased
investment is expected for additional capacity,
the necessary product diversification attendant
upon expanded systems technology, establish
ment of wide-scale service facilities, and the
equipment necessary to automate more of their
own functions.
Manpower Trends and Adjustments
Growth of employment will continue. Between
1947 and 1957, employment increased at an
average annual rate of 2.5 percent, rising from
267,000 to 342,100. Between 1957 and 1964,
the rate of growth declined to 1.1 percent com
pounded annually. Employment reached 369,300
employees in 1964. Despite the declining rate
113
Average annual percent change
All employees
1947-57 __________________________________
1957-64 __________________________________
Production workers
1947-57
1957-64 __________________________________
Output
1947-57 __________________________________
1957-64
2.5
1.1
.9
.1
6.2
4.8
of increase, employment in this industry has
grown several times as fast as the average for
total manufacturing during the entire postwar
period and continued growth is expected. Much
of the future employment arising from in
creased instrumentation, however, may be in
electrical machinery and electronics industries,
rather than in the instrument industry.
The structure of the work force is changing.
Between 1947 and 1964, the industry employed
an increasing proportion of nonproduction
workers. Production workers declined from
80 to 63 percent of total employment.
Women workers made up a significant por
tion of total industry employment in 1964, rang
ing from 23 percent in the scientific instruments
group to 57 percent in watches and clocks. Be
tween 1959 and 1964, employment of women
increased faster than total employment.
Some collective bargaining agreements contain
job security provisions. Of 22 major collective
bargaining agreements in effect in 1963, cover
ing 45,400 workers, 10 agreements covering
17,400 workers incorporated provisions for sev
erance pay or for extended layoff benefits to
protect workers who were dismissed or laid off
for extended periods. A few agreements also
contained clauses that restricted the subcon
tracting of production which is customarily
carried on in the plant.
Selected References
“ Controls Industry,” Investor News, Francis I. Dupont and Co., June 1964, pp.
12-18.
“ Instrument Users See No Way But Up,” ISA Journal, January 1965, pp. 18, 20.
Lee, A. E. “ What the Next Decade Holds for the Instrument Industry,” ISA Journal,
October 1964, pp. 69-72.
Rogers, John. “ Industrial Engineering at Autonetics,” The Journal of Industrial
Engineering, January-February 1965, pp. 19-22.
Schall, W. C. “ Instrumentation in the 60’s: The Big Shift Has Started,” ISA
Journal, October 1964, pp. 61-68.
Sprague, P. A. “ Some Reflections on Profits and Research in the Instrument Indus
try,” ISA Journal, May 1964, pp. 78-84.
Byrne, Francis P. “ Advances in Chemical Instrumentation,” Industrial Research,
June 1965, pp. 52-59.
Brunton, Donald C. “ Advances in Radiation Instrumentation,” Industrial Research,
June 1965, pp. 77-82.
“ Control Users Pinpoint the Potentials,” Control Engineering, January 1965, pp.
77-97.
Aldridge, Keith. “ The Boom is Just Beginning,” Control Engineering, January
1965, pp. 67-70.
U.S. Bureau of the Census and Defense Services Administration. Current Indus
trial Reports, Selected Instruments and Related Products, Series M38 B (6 3 )l,
Washington, D. C., 1965.
The Meat Products Industry (SIC 2 0 1 )
Summary of Outlook Through 197 0
Meat consumption is expected to continue its
gradual rise, stimulated both by population
growth and increases in per capita consump
tion. Extensive improvements in handling and
processing are being introduced, especially in
new plants being built near areas of concen
trated livestock feeding in the West. Employ
ment may continue to decline for several years,
but at a gradual rate. Shutdowns of large,
obsolete packing plants have caused serious
problems of worker adjustment.
Outlook for Technology and Markets
Meat 'production is expected to continue rising
at a moderate pace. Output (excluding poul
try) rose 1.7 percent a year during the 1947-57
period; 2.2 percent annually from 1957 to 1963,
according to the U.S. Department of Agricul
ture. Beef and veal production is expected to
rise most rapidly, from 17 billion pounds in
1963 to nearly 25 billion pounds by 1975; poul
try production, from 7 billion pounds to over
10 billion pounds. Pork, lamb, and mutton pro
duction will rise only very slightly.
fabricated foods, or sold as cut-up poultry parts.
Increasingly greater numbers of the big (25
pounds or over) “ institutional” turkeys are be
ing processed into turkey specialties. These are
killed in the fall, frozen, and then fabricated in
the spring, thus reducing seasonality of em
ployment. Rapidly growing demand for frozen,
cut-up chicken, and for prepared specialty
items, is increasing the amount of handling in
poultry plants, which are shifting from the
Midwest to the West Coast and the Southeast.
Livestock slaughtering plants are continuing to
shift westward. For example, Illinois, first
State in cattle slaughter in 1947, was sixth
in 1964; Iowa is now first. This movement is
induced by population shifts, obsolescence of
multistory central city plants, increasing use
of trucks, and economies of shipping carcasses,
quarters, and primal cuts rather than live ani
mals. The trend is toward specialized slaughter
ing and processing plants of medium size.
One of the most important technological innova
tions in recent years is the cattle on-the-rail
dressing system first introduced a decade ago.
About 65 percent of all cattle slaughter is now
done in rail system plants. Most large plants
employ the system, and medium-size plants are
rapidly installing it. In rail systems, stunned
cattle are hoisted to a high conveyor rail, on
which they are slaughtered and then moved
through all dressing operations to the chill
cooler. Workers, stationed on mechanized plat
forms which move vertically and horizontally
according to the requirements of each task, use
power knives and saws. Mechanical hide strip
pers, which grasp and peel the hide from the
carcass, substantially reduce the skilled hand
cutting operations once necessary to remove a
high-quality hide without damage.
Laborsavings per unit may be between 25 and
60 percent on the kill line. These savings are in
reduction of waiting time between performance
of individual tasks, which are now machinepaced and synchronized, and elimination of con
stant repositioning of the carcass necessary in
the older “ bed” system. Part of the improve
ment in efficiency reflects better utilization of
The extent of processing and fabrication within
the meat products industry is gradually in-creas
ing. Demand is growing for convenience foods
(e.g., frozen precooked dinners) and processed
meats (e.g., sausage, frankfurters, ham, and
bacon), which in 1964 totaled between one-third
and one-half of all meat produced. The rapidly
expanding institutional market (hotels, restau
rants) demands precut, portion-controlled,
ready-to-cook meats. Because of the economies
of breaking meat into these final cuts on a mass
basis, a growing proportion of fresh meat may
be boned, defatted, and cut to standard trim
either at processing plants or chain store cen
tral cutting facilities. Jobs may be shifted
slowly away from the retail store, into the
wholesaling or meat products industries.
Further processing of mass-produced poultry is
growing. About one-quarter of all poultry is
now processed into frozen dishes and similar
114
115
plant and equipment, capacity because of a
smoother inflow of cattle in new plants built
near livestock supplies. Roughly 10,000 to
14,000 workers are engaged in cattle dressing
and supporting operations prior to placing car
casses in the chill cooler.
Further mechanization is expected to reduce
labor requirements in hog dressing. Continuous
rail operations may be developed for slaughter
ing. Dehairing and shaving the carcass, and
butchering operations on the hog head are
affected. Automatic positioning and transfer
equipment, as well as contour sensing equip
ment which can guide mechanized knives, may
be used within a few years. A new method for
smoked and fresh pork which eliminates chill
ing prior to cutting, currently in experimental
stages, reduces processing time but requires
pork butchers to acquire new cutting skills.
Also, a machine which permits one worker to
view each carcass on a screen and guide cut
ters by marking major cuts on the screen image
with a pointer, is being tested.
plants unpleasant. About 3,000 to 3,500 men
work in rendering departments of meatpacking
plants.
Hide processing is undergoing rapid change.
The older dry salt method of curing is being
replaced by brine curing; labor requirements
per unit are reduced by 50 percent and proc
essing time is reduced from 1 month to 1 or 2
days. In the past 5 years, this new method has
been adopted in plants producing 80 percent of
all packer-cured hides (one-third of all cured
hides— the rest are cured by hide dealers).
A more advanced process (called “ beaming” )
which eliminates curing entirely, has been in
stalled in three meatpacking areas in conjunc
tion with packing plants. This beam process
will reduce labor requirements in hide dealers
and tanneries as well, because it takes the hide
one step further in the processing chain. By
1975, according to a U.S. Department of Agri
culture expert, at least one-fourth of all packer-
Mechanized, continuous frankfurter-making
systems are being installed rapidly. They join a
series of operations which emulsify, form (or
stuff and link), smoke, cook, chill, peel, wash,
and fully package frankfurters. Jobs in stuffing,
linking, and packaging are eliminated. Sausage
and prepared chub meats may soon be handled
in the same way. At the same time, trimming
jobs, in the preparation of raw materials for
sausage and frankfurters, are being reduced
by mechanical fat separator equipment using
low heat and agitation.
Highly mechanized rendering systems are being
installed in some large meatpacking plants.
About 20 percent of rendering done by the meat
industry is in plants with conveyor systems
(for handling raw materials and material in
process, as well as finished products) ; crushers;
and centralized control panels for all opera
tions. New rendering systems require one-third
as much labor as rendering departments which
rely on manual labor for shoveling raw ma
terial, manual control of tanks, and hand flush
ing and cleaning. Odors from open storage and
equipment make working conditions in old
Carcass it split at it travels on rail, by worker on moving platform .
116
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR ,AND
CAPITAL EXPENDITURES IN MEAT PRODUCTS
Thousands of Employees
Ratio Scale
Index (1957-59=100)
50
OUTPUT AND OUTPUT PER MAN-HOUR
EXPENDITURES FOR NEW PLANT
AND EQUIPMENT
Millions of Dollars
I 5 Or
70
60
'58
50
947
Sources:
'49
'51
'53
’55
'5 7
'5 9
'6 0 ‘61
'59
'6 2 *63
'6 1
*64
'63
1965
Employment, Bureau of Labor Statistics; output and output per man-hour, Department of Agriculture
expenditures, Bureau of the Census.
117
cured hides are expected to be processed by
beaming; over a quarter will be processed by
brine curing. Over one-fourth of the hides will
be used for products other than leather. This
last category, which includes such hide products
as collagen for edible sausage casing and medi
cal sutures, is a rapidly growing outlet for raw
hides.
Conveyors and mechanical equipment are being
introduced in poultry dressing. For some tasks,
productivity is increased 50 to 100 percent.
Electronic weighing and packaging machines,
continuous freezing units using liquefied gas,
and mechanical defeathering that processes up
to 9,000 chickens an hour, are being used. Low
wage rates in poultry packing plants, and the
small size of firms, are among the factors that
tend to retard technological change.
Neiv preserving techniques, such as freeze dry
ing and irradiation, are being accepted only
slowly. Irradiated bacon has been approved by
the Food and Drug Administration for public
sale, but is not yet commercially produced.
Problems of safety, taste alteration, costs (espe
cially with low volume production), and public
acceptance of irradiated meats remain to be
solved, although the Army is already beginning
to use irradiated bacon in its regular rations.
The chief advantage of irradiated meat is that
it permits the meat to be stored for longer
periods of time.
Freeze drying is already used by a few meat
packing and specialized drying plants. Products
are dried meat and poultry dices for dried soups
and prepared foods such as ready-mixed cas
seroles, and dried steaks and other cuts for
sportsmen. Meats comprise about 40 percent
of all freeze-dried foods at present. They have
the advantage of long life at room temperature,
and considerable weight reduction. For current
volume of production (2.3 million pounds,
dried weight), with current technology (batch
method of drying), processing costs exceed sav
ings on transportation and handling. Improve
ment of continuous drying techniques within
the next few years, and rising production vol
ume, however, may reduce processing costs
considerably. By 1975, one industry expert
expects that the volume of freeze-dried meats
may be as high as 177 million pounds. The
greatest end-use may be as ingredients in proc
essed convenience foods. Today, about 250
workers produce freeze-dried meats; by 1975,
about 4,000 workers may be required.
A deterrent to faster growth of both irradi
ated meats and dried meats is the relatively ad
vanced state of food handling in the United
States, and the presence of refrigerator and
freezer facilities in transportation, retail stores,
and private homes.
Investment in new plant and equipment rose to
a peak in 1964. The amount was $109.1 million
in 1958, $145.7 million in 1964. Modernization
has been stimulated by price pressure from re
tail chains as customers, and livestock growers
and dealers as suppliers. The construction of
new plants has been extensive, probably ac
counting for most of the capital expenditures
since 1961.
Manpower Trends and Outlook
Productivity in meatpacking and processing
may continue to rise rapidly over the next
5-year period. According to the U.S. Depart
ment of Agriculture, output per all employee
man-hour for the meatpacking and sausage and
prepared meats industry grew at an annual
rate of about 4.5 percent between 1957 and
1963, after a more gradual rise of 1.8 percent
annually during 1947-57. Because modernized
slaughtering plants are accounting for an in
creasing proportion of total production, the
rate of increase in output per man-hour may
continue at its current high rate.
Employment decline is likely to continue, at a
moderated pace, for the next few years. Pro
ductivity advance is expected to be greater than
increases in output. Between 1957 and 1964,
employment in meat products (including poul
try) declined from 333,100 to 313,600 or 0.9
percent a year— after rising 1.9 percent annu
ally from 1947 to 1957. The record of the 195864 period shows meatpacking plant employment
declining, sausage and prepared meats employ
ment remaining fairly steady, and employment
in poultry plants (nearly one-quarter of all
meat products employment) rising rapidly. The
118
Average annual percent change
All employees
1.9
1947-57 __________________________________
1957-64 __________________________________ - .9
Production workers
1947-57 __________________________________
1.7
1957-64 ___________________________________ - 1 . 1
Output
1947-57 _______________________________ - 1.7
1957-63 __________________________________
2.2
Output per all-employee man-hour
1947-57 _______________, __________________
1.8
1957-63 _______________
4.5
proportion of production workers (4 out of 5
workers) in the meat products industry has not
changed substantially since 1947.
Jobs occupied predominantly by women in meat
packing and processing have been reduced by
introduction of automatic equipment. Partly
because of mechanized and semiautomatic slic
ing, weighing, and packaging equipment for
processsed meats and bacon, and automatic
frankfurter and other sausage equipment, em
ployment of women in the meatpacking and
sausage and prepared meats industries declined
by about 4,800 between 1958 and 1964, or about
1.8 percent annually. Women account for nearly
one-third of all employees in sausage and pre
pared meats plants, and about a seventh of
the employees in meatpacking (slaughtering)
plants. In poultry plants, where women make
up half the work force, production growth
added about 5,800 women workers between 1958
and 1964.
Some Issues and Examples of Adjustment
Past closings of large meatpacking plants cre
ated complex problems of worker displacement.
In 1960, the two principal unions and the
Armour Company established an automation
committee to study ways of mitigating layoffs
among Armour workers. The committee re
ported in 1962 that when obsolete plants closed
down, laid-off meatpacking workers— often
middle-aged, and with less than high school
education— had difficulty in finding new jobs
because their skills were not usually transfer
able to jobs in other industries. Worker reluc
tance to accept lower wage rates for locally
available operative and service jobs, or to relo
cate (due to community attachment and inse
curity about moving), were also factors that
hindered the placement of meatpackers in new
jobs. Through programs sponsored by the
Automation Fund (supported by a companypaid royalty on shipments), unions, and the
government, retraining has been offered to
workers in a number of locations where plants
have been closed. The Automation Fund, how
ever, is not typical in the industry.
Some contracts negotiated over the past 5 years
include a variety of provisions for mitigating
the impact of plant or department closings. New
provisions include extensive transfer rights,
early retirement provisions, technological ad
justment pay, separation pay liberalization, and
wage policies for the new jobs. Technological
adjustment pay, negotiated in 1961 after some
experience under the Armour Automation
Fund, provides for guaranteed weekly mini
mum incomes to workers who have requested
transfers to a new plant (from a closed plant
or department), pending completion of trans
fer arrangements. Plant closings are preceded
by a 3-month notice to employees, who then may
choose to exercise transfer rights, early re
tirement (employees age 55 or over with 20
years of service), or accept separation pay.
Intensive bargaining has taken place over wage
rates for new jobs. The combination of two
jobs, or the substitution of a lower skilled ma
chine task for a higher skilled manual one,
creates new positions for which rates must be
set. In 1964, a new provision in master con
tracts maintains wage rates in some cases
where new equipment has changed the job but
not the end product. Grievance activity has
centered around rates for these changed jobs,
and on the faster pace of the machine-controlled
production lines. Changes in speed of slaughter
ing and dressing lines have led to some difficul
ties in labor-management negotiations.
Selected References
Technological Change
Bird, Kermit. The Aivakening Freeze-Drying Industry, U.S. Department of Agri
culture, Economic Research Service, January 1965, 13 pp.
“ De Graff of AMI Tells Them Some Retail Operations May Go Back to Packers to
Cut Distribution Costs,” The National Provisioner, June 1, 1963, pp. 20-22.
“ Methods and Equipment for Eviscerating Chickens,” Marketing Research Report,
No. 549, U.S. Department of Agriculture, October 1962, 55 pp.
“ More Meat, Better Meat, Lower Cost,” Meat, May 1963, pp. 24-28.
“ Rail Systems Cut Costs,” Meat, September 1964, pp. 26-29.
Thompson, John W. “ Marketing Pickled Hides,” Speech before the Tanner’s Council
of America, Edgewater Beach Hotel, Chicago, 111., Oct. 20, 1965.
Urbain, W. M., 0. S. Clemens, and H. P. Bonheimer. “ A Continuous Frankfurter
Process,” Food Technology, May 1963, pp. 26-31 and 34.
Webb, T. F. and D. R. Hammons. “ Fast Processing for Smoked Hams,” Agricultural
Marketing, U.S. Department of Agriculture, April 1965.
“ What About the Next Thirty Years?” Meat, July 1964, pp. 48-51, 84, 86.
Williams, Willard F. and Thomas T. Stout. Economics of the Livestock-Meat
Industry, New York, The MacMillan Company, 1964, 802 pp.
Manpower Trends and Adjustments
Conant, Eaton H. “ Report and Appraisal: The Armour Fund’s Sioux City Project,”
Monthly Labor Review, November 1965, pp. 1297-1301.
Industry Wage Survey: Meat Products (BLS Bulletin 1415, June 1964).
Officer’s Report and Proceedings, Fourteenth Constitutional Convention, United
Packinghouse, Food and Allied Workers, AFL-CIO, May 25-29, 1964.
“ The Fort Worth Project of the Armour Automation Committee,” Monthly Labor
Review, January 1964, pp. 53-57.
Wilcock, Richard C. and Walter H. Franke. Unwanted Workers (New York), The
Free Press of Glencoe, 1963, 340 pp.
The Dairy Products Industry (SIC 2 0 2 )
cleaned plant, is reduced. About half of all milk
is processed in plants using CIP; nearly all
plants now being constructed are engineered
with CIP built in, according to U.S. Depart
ment of Agriculture experts. By 1975, all fluid
milk and a large proportion of ice cream will
be produced through CIP equipment.
CIP, however, does not displace all hand
cleaning, which is still necessary for some
fittings, such as separator bowls and blades.
Automatic spray units are rapidly being in
stalled in holding tanks and mixing vats and
bulk tank delivery trucks. Automatic airoperated valves can be cleaned in place by auto
matically pulsing them while the cleaning solu
tion circulates; hand-operated valves must be
dismantled and cleaned in tubs. Developmental
work is being done with ultrasonic cleaning
techniques that use sound waves to agitate
cleaning solutions, producing a scrubbing action
in the crevices and inside tubing of assemblies
(such as centrifugal equipment).
Summary of Outlook Through 1970
Output will rise moderately during the next
5 years. An increasing proportion of fluid milk
and ice cream will be processed through cen
tralized control systems, and semiautomatic,
clean-in-place equipment will be installed widely
by 1970. Production will continue to shift to
larger, more efficient plants. Employment is
expected to continue to decline. The greatest
reductions will take place among unskilled and
semiskilled materials-handling jobs, and un
skilled cleaning jobs.
Outlook for Technology and Markets
1970 output probably will be moderately higher
than in 1964. While per capita consumption of
fluid milk (on a milk equivalent basis) may
decline slightly, U.S. Department of Agricul
ture experts anticipate that population growth
will cause total milk production to rise at a
rate of slightly less than 1 percent a year. More
pronounced drops in combined per capita con
sumption of condensed and evaporated milk are
expected to result in production declines for
these products of about 1 to 2 percent a year.
Production of butter, non-fat dry milk, and dry
whole milk will remain substantially the same.
On the other hand, production of cheese and
frozen desserts may rise between 1 and 2 per
cent a year. New products are not expected to
stimulate any significant growth in demand up
to 1970, although sales of liquid low-fat milk are
expected to increase.
An increasing proportion of fluid milk will be
processed through central control systems.
About 40 to 45 percent of all fluid milk is now
produced through centrally controlled systems.
Within the next decade, industry experts es
timate that about 85 percent of fluid milk will
be processed in central control plants, because
large new plants are being constructed with
centralized systems.
With a central system, a single operator can
control the flow of raw milk through the various
tanks, pipes, and processing equipment, using
remote switches located on a central panel; and
he can monitor the processing by means of in
struments that measure and record tempera
ture, weight, pressure, and other processing
variables. Under older systems, a small crew
of skilled workers was required to move among
tanks and lines, manually adjusting connec
tions, opening and closing valves, and initiating
each process step.
An industry expert estimates that of all
plants now using central control, 60 percent
have remote control of raw milk receiving, proc
essing, and filling operations; 30 percent cen
Semiautomatic, clean-in-place (C1P) equipment
is being installed in large volume operations.
CIP systems automatically circulate cleaning
solutions through pipes and valves (connecting
pasteurizers, deodorizers, homogenizers, and
heating and cooling equipment). CIP results in
a lowered bacteria count in the final product,
and less damage to equipment caused by daily
dismantling of valves and fittings. Dismantling
and cleaning work (involving chiefly unskilled
entry jo b s ), which accounts for between 20 and
40 percent of all man-hours in a manually
120
121
trally control the receiving and processing steps
only; and 10 percent have central control for
only one step, such as processing only, or receiv
ing only.
Centralized control incorporates CIP. Total
labor savings per unit of output, over manual
control and conventional cleaning, amount to
over 50 percent in processing operations. In
cleaning only, laborsavings are 60 percent or
greater, and problems in scheduling cleaning
labor are greatly simplified.
There is a trend toward continuous processing
of manufactured milk products, such as cheese
and ice cream. Methods which reduce acidify
ing time from hours to minutes, by direct addi
tion of food acid instead of by culturing, are in
developmental stages now. Mechanization of
cheddaring and other cheesemaking processes
will advance rapidly over the next 5 years, so
that by the early 1970’s, continuous hard and
cottage cheesemaking is likely to be in opera
tion in large cheese plants. A U.S. Department
of Agriculture expert expects that output per
man-hour in cheesemaking stages prior to aging
and packing will be doubled or even tripled by
these processes.
Large ice cream plants are installing central
ized control systems for some of their opera
tions. Within the next decade, an equipment
supplier estimates that about 65 percent of all
ice cream will be processed with some central
ized controls. Of the few plants now using this
system, about 20 percent have four-fifths of
their processing work under central control,
and 10 percent have about half of their process
ing so controlled. Recently introduced methods
for fast plate contact hardening make it pos
sible to move ice cream continuously— from
processing through packaging, hardening, pal
letization, and directly out to the delivery truck
— by reducing hardening time from about 15
hours to approximately one hour. This faster
processing makes production more responsive
to orders, thereby reducing labor-intensive
inventory handling in the cold room.
Fluid milk plants are using materials-handling
equipment and improving plant layout to reduce
rehandling labor. Some types of equipment that
are reducing heavy hand labor are: automatic
bottle and carton casers; case conveyors; and
equipment which automatically stacks cases
onto pallets for forklift truck or conveyor han
dling, or unstacks them for cleaning and refill
ing. Multiple handlings are eliminated by
conveyor patterns which permit continuous flow
of product from filling lines through cold stor
age, and simplified shipping and receiving dock
layouts which permit maximum use of palletiza
tion and extension of the conveyors onto trucks.
Second and third case handlings can be reduced
50 percent or more with an advanced type of
conveyor that balances uneven volumes of case
receipts with steady pace of case delivery to the
filling lines.
Manufacturing plants now are converting to
bulk tank reception. Insulated bulk tank trucks
pick up milk from refrigerated bulk farm tanks,
delivering their loads directly through hoses to
the milk plant holding tanks. According to a
U.S. Department of Agriculture study, labor
requirements per unit are reduced about 75 per
cent in the receiving operation in a plant re
ceiving between 5,000 and 14,000 gallons daily;
somewhat less in a slightly larger plant. Han
dling and washing of cans are eliminated, and
milk quality is maintained through constant
refrigeration and elimination of open pouring.
Bulk milk transport also has the effect of
broadening market areas. It permits inter
plant shipments that can divert excesses of raw
milk from fluid milk bottling to more distant
manufacturing plants. Plants producing most
of the fluid milk already are converted to bulk
tank reception; this conversion will probably
be completed in remaining plants within the
next 5 years. Manufactured product plants are
now converting at a rapid rate.
Milk supply is becoming somewhat less sea
sonal, thus mitigating extreme seasonality in
manufacturing such products as dry milk and
cheese. Technological factors reducing milk
supply seasonality include improved cow feed
ing practices and breeding cycles. Interplant
shipment systems and wider market areas for
raw milk reduce seasonality for some plants,
widen it for others. Between 1950 and 1964, the
122
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES
IN DAIRY PRODUCTS
Thousands of Employees
400
All Employees
EMPLOYMENT
300
200
Produc ion Worke r s ^
—
- —
100
___
0 ___ 1
1
___ ___ 1
____
___ 1
____ ___ 1
1
1
1
Index (1957-59=100)
I 50
1
Ratio Scale
OUTPUT
I 00
90
80
70
60
i l i
50
1947
‘4 9
Sources:
_ ___i ___i ___ _ _
_
i l i _ 1 ___i ___I i _ I _____ | __ i
'51
'53
*55
'57
'59
'6 1
'63
1965
Employment, Bure«u of La&O* Statistics; output, federal Reserve Board; expenditures, Bureau of the Census.
123
disparity between November (trough) raw milk
production and May (peak) production was re
duced from 54 percent to 31 percent. However,
further reductions are expected to be smaller.
Reduction of seasonality promotes more effi
cient plant operation and reduces layoffs and
seasonal hiring patterns. In some rural areas,
seasonal labor may be increasingly scarce. In
one university survey, plant managers reported
that they considered it would be more efficient
to maintain an experienced work force than to
rely solely on temporary seasonal hiring to run
milk manufacturing operations. Fluid milk
plants also are reducing operations to a 5- or
6-day week, rather than a 7-day week.
Fluid milk distribution patterns are changing.
Over the past decade, an increasing proportion
of milk has been sold through retail stores,
chiefly supermarkets. Home delivery (now
about 30 percent of all fluid milk sold) is ex
pected to continue declining as a proportion of
all milk sold. Store purchasing of milk (either
at supermarkets or convenience or dairy stores)
has been encouraged by relatively higher prices
for home-delivered milk; increased shelf-life of
milk due to improved farm methods, improved
sanitation and refrigeration at all stages of
processing and storage; development of larger
containers; and an increase in one-stop super
market shopping.
New preserving methods for fluid milk may
further alter distribution patterns. A new proc
ess which sterilizes milk, reducing or eliminat
ing the need for refrigeration and increasing
shelf-life to 6 months, could have a major effect
on the milk distribution system and the location
of fluid milk plants— if sterile milk is perfected
and accepted as a substitute for pasteurized
milk. Sterilized concentrated milk is also in
developmental stages. Fluid milk processing
would increase in low-cost milk producing
States, and the product could be shipped to such
areas as the Far West and Southwest, where
milk production costs are relatively high. Since
refrigeration would not be necessary, frequent
store or home delivery of milk would no longer
be required, and trucking and consumption pat
terns might take on the characteristics of the
canned food market.
Frozen concentrated milk is also in an early
developmental stage. If consumers accept this
product as a substitute for fresh milk, similar
changes in location of processing plants and
trucking would take place, although freezer
facilities would be necessary in trucks, stores,
and homes. Both types of product face prob
lems of taste and consumption habit.
The number of dairy products plants is declin
ing, while plant size is growing. The number
of dairy plants declined from 9,879 to 7,890, a
drop of 20 percent between 1958 and 1963,
while total output rose. The number of large
fluid milk plants (producing over 10 million
quarts a year) has increased 57 percent between
1950-51 and 1961-62; the number of small
plants (producing under 1 million quarts) fell
by 44 percent, according to the Federal Trade
Commission. Average plant size is expected to
continue increasing over the next decade, partly
because improved refrigeration, better roads,
and faster transportation methods insure prod
uct quality even when marketing areas cover
several States. The present rate of plant clos
ings is expected to decline by the early 1970’s.
The West Coast and South, however, are ex
pected to experience particularly extensive
plant consolidation in the near future.
Investment in new plant and equipment has
fluctuated around $200 million a year in the
past few years. Much of recent expenditure was
for large plants which service areas once cov
ered by a number of smaller plants. Consumer
preferences, governmental price and purity
regulation, and the perishable nature of the
product exert a limiting influence on changes in
dairy technology.
Manpower Trends and Outlook
Employment is expected to continue to decline.
Productivity increases exceeding the moderate
gains in output may continue to reduce em
ployment of production workers; declines
among drivers may continue due to further
changes in delivery practices. Total employ
ment fell from 319,100 to 288,600 between 1958
and 1964, at an average annual rate of 1.7 per
cent. Production workers declined more rapidly
124
All employees
1958-64 __________________________________ — 1.7
Production workers
1958-64 ___________________________________ - 4 . 9
Output
1947-57 __________________________________
2.4
1957-64 __________________________________
1.6
materials-handling equipment which extends
into trucks, may continue through the next dec
ade. If sterile or frozen concentrated milk is
generally accepted as a substitute for fresh milk
by the late 1970’s, drivers on home delivery
routes may be severely affected; wholesale
(store delivery) drivers will also experience
some reductions.
from 182,800 in 1958 to 134,700 in 1964, or at
an average annual rate of 4.9 percent. In the
fluid milk industry (which accounts for over
70 percent of all dairy employment), the cor
responding rate of decline for production work
ers between 1958 and 1964 was 6.2 percent.
Nonproduction workers in fluid milk plants (in
1964, about 60 percent of all fluid milk em
ployees) grew at an annual rate of 3.0 percent
during the same period. About two-thirds of
this group is comprised of driver-salesmen, or
routemen, who deliver milk to stores and homes.
One-third are office, managerial, or technical
and professional employees.
Office and other nonproduction jobs will not
increase substantially, although skill require
ments may rise. Office workers may decline
substantially, due to increased use of small com
puters for route accounting and inventory rec
ords. Technical personnel (chiefly laboratory
staff) and highly skilled maintenance workers
(specializing in instrumentation and control
system repair, heating and cooling equipment,
metalwork, and plumbing) will be needed in
small numbers in the large-scale plants which
account for an increasing proportion of milk
products. In smaller plants, maintenance and
repair are frequently done by a production
worker or an all-round maintenance man.
Average annual percent change
Process workers will decline gradually, ivhile
more rapid reductions will take place in mate
rials handling and cleaning jobs. The trend
toward larger plants, larger volume process
equipment, and centralized controls will permit
some reductions among processing employees
in milk and manufactured milk products plants.
Unskilled labor requirements in materials han
dling in cold rooms, warehousing, and bottle
cleaning will continue to fall rapidly. For ex
ample, the U.S. Department of Agriculture re
ports that in a model, medium-size plant, 4 of
the 6 men engaged in packaging and case han
dling could be eliminated by automatic casers,
stackers, unstackers, and case dividers. Two of
the four men engaged in receiving and proc
essing milk are eliminated by the central con
trol system. Special cleaning crews will be
reduced substantially to one part-time employee
in plants installing CIP and central control
equipment.
Four-week vacations after 20 years of service
have become common in some metropolitan
areas; scheduling is used to avoid layoffs during
the slack season. Some recently negotiated con
tracts provide 3 weeks after 10 years (or less)
of service, 4 weeks after 15 years. The third
and fourth week of vacation, in some areas, may
be scheduled by management and used to reduce
the work force on duty during slow seasons.
Routemen may continue to decline. The impact
on the industry of larger truck sizes, reduction
in number of stops due to supermarket volume
deliveries and less frequent home deliveries, and
A variety of approaches to adjustment has
been used in some major cities. In St. Louis, for
example, when the workweek for routemen was
reduced from 6 to 5 days, drivers were guaran
Some Issues and Examples of Adjustment
Early retirement provisions have been intro
duced in recent contracts. Pension programs,
often administered jointly by the union and
companies in a metropolitan area or region, are
being liberalized to permit early retirement—
as early as age 52 after 35 years of service, in
some cases— on reduced pensions. Compulsory
retirement at age 65 has been introduced in
some contracts.
125
teed their jobs for 1 year after the reduction.
The companies set up a bureau responsible for
assisting in the placement of surplus routemen
in jobs in other industries. At the end of the
year, all surplus routemen had obtained employ
ment elsewhere.
In Pittsburgh, a supplemental contract on
automation (covering both plant and route em
ployees) provides that the union will be given
advance notice of technological change, and that
a company introducing laborsaving equipment
will retain five employees who would otherwise
have been laid off. Additional employees who
are laid off are to be placed on an “ Automation
Unemployment List,” from which all Pitts
burgh companies covered by the areawide con
tract must hire (after their own laid-off em
ployees have been rehired). A maximum of
9 months of supplemental unemployment bene
fits are provided for workers on the list. In Chi
cago, where a similar automation clause has
been negotiated, SUB payments are to be in
creased according to the number of dependents
supported by the laid-off employee.
Selected R eferences
Technological Change
Fitzpatrick, John M., and Charles E. French. “ Impact of Seasonality of Milk Sup
plies on Labor Costs and Efficiency in Dairy Manufacturing Plants,” Research
Bulletin 774, Purdue University Agricultural Experiment Station, March 1964.
Graf, Truman F. “ Trends and Impact of Sterilized Dairy Products,” The Milk
Dealer, July 1964, pp. 44-46.
“ Layouts and Operating Criteria for Automation of Dairy Plants Processing Milk
and Half-and-Half,” Marketing Research Report 568. U.S. Department of Agri
culture, March 1963.
“ Layouts and Operating Criteria for Automation of Dairy Plants Processing Milk,
Half-and-Half, Cream, Chocolate Drink, and Buttermilk,” Marketing Research
Report 591. U.S. Department of Agriculture, September 1963.
O’Connell, Paul, and W. E. Snyder. “ Cost Analysis of Fluid Milk Processing and
Distribution in Colorado,” Technical Bulletin 86. Colorado State University
Experiment Station (no date).
Proceedings— Food in the Future: Concepts for Planning, Dairy and Food Indus
tries Supply Association, Washington, 1964.
Proceedings of the Thirteenth Annual Dairy Engineering Conference, Michigan
State University, 1965.
Saal, Herbert. “ Materials Handling, Some Guidelines and Principles,” American
Milk Review, July 1964, pp. 30-31, 48.
Manpower Trends and Adjustments
Industry Wage Survey, Fluid Milk Industry, September-0ctober 196U (BLS Bulletin
1464,1965).
Potter, Paul. “ What to Expect From Labor in ’65,” American Milk Review, January
1965, pp. 48-50.
The Flour and Other Grain Mill Products Industry (SIC 2 0 4 1 )
dialdehyde starch, is suitable for bonding in
terior grade plywood. Recently developed wheat
starch products are used for internal paper siz
ing, for external application to add both wet and
dry strengths to the paper, and as a warp sizing
in the textile industry. Efforts to fabricate in
sulating board and formed board products from
wheat and its byproducts are in the experi
mental stage.
Summary of Outlook Through 1970
Output is expected to continue to rise slowly
and the growth in output per man-hour is ex
pected to continue. Major mills are planning
modernization projects. The most significant
technological advances are pneumatic materials
handling, impact milling, and air classification.
Other innovations include quality control tech
niques and equipment. It is anticipated that
employment will continue to decline.
Output is expected to rise slowly. Output in
creased at an annual average rate of 1.6 percent
between 1957 and 1963 and is expected to in
crease at about the same rate through 1970.
From 1947 to 1957, output declined at an annual
rate of 2.1 percent. A leveling-off in the rate of
decline in per capita consumption during 195763, and the growth in population, reversed this
trend.
Pneumatic materials handling could greatly im
prove efficiency of the milling process and facili
tate loading of flour. Pneumatic materials han
dling in milling eliminates bucket elevators and
screw conveyors and the accompanying dead
pockets of flour particles that can be a source
of infestation. It also reduces the amount of
flour dust in the atmosphere and the accompany
ing fire hazard. Other advantages are improved
sanitation and reduced space requirements. In
addition, pneumatic conveying facilitates con
tinuous operation and the use of on-stream (in
process) analysis techniques.
New products are being developed in efforts to
increase consumption. Declining per capita con
sumption, as well as a decline in the industrial
utilization of wheat products, is stimulating
the development of improved and new products.
Agglomerated flour, introduced in 1964, is
formed by sprinkling regular, finely ground
flour and passing the resulting larger particles
over a sieve to obtain particles of a uniform size.
Flour made up of such particles is more ab
sorbent and thus mixes more readily than con
ventional flours. Although some use of agglom
erated flour by household consumers has been
reported, it has not yet been accepted by the
baking industry and its commercial impact thus
far has been negligible. Another new product,
a concentrated mixture of wheat starch and
insoluble protein, is used as a base for infant
and geriatric foods.
Some new products for industrial use are be
ing developed by the industry in a cooperative
program with the U.S. Department o f Agricul
ture. For example, a water-resistant glue, made
up of protein and a new starch product called
Impact milling can improve milling efficiency.
Impact milling machines can be used to replace
the present standard equipment at some stages
of the milling process, but it appears unlikely
that the conventional roller mill process will be
significantly displaced in the next decade.
In conventional roller milling, five sets of
corrugated break rolls are used in the break
section of the mill to fracture the wheat and to
free the endosperm portion; the endosperm por
tion is then reduced to flour in from six to nine
sets of smooth rolls in the reduction section of
the mill. When impact mills are used, the last
two sets of corrugated rolls in the break section,
and up to three or four sets of smooth rolls in
the reduction section may be replaced with im
pact mills. Here the particles of endosperm or
flour are hurled by centrifugal force against
pegs of stationary and moving impactors within
the impact milling machine.
Use of impact milling in the reduction section
reduces starch damage and elongation of parti
cles (a deficiency at the final stages of conven
tional m illing). Impact milling has been helpful
in particle size reduction for air classification of
Outlook for Technology and Markets
126
127
flour. Also, repair of an impact milling machine
does not require shutdown of the entire milling
process. Other advantages are that impact mills
are easier to regulate, can produce finer flour
than an all-roller operation, are easier to clean,
and may produce greater yields than conven
tional roller mills.
Air classification makes possible a more efficient
utilization of many wheats. Air classification
separates the finished product, flour, into frac
tions of higher and lower protein content. In
one type of air classifier, the flour is fluidized in
air and passes to the outer periphery of a high
speed revolving disc. Here the smaller and
lighter particles (the high-protein fraction) are
carried through the rotor by an air stream,
while the larger and heavier particles (the lowprotein fraction) are thrown out to the wall of
the classifier by centrifugal force.
This process makes possible the production,
from any wheat, of a flour having a desired
protein content. (Protein contents of wheat
differ by variety and class of wheat, as well as
from area to area, depending on soil and cli
mate.) The need to shut down a mill to adjust
to different area wheats can be eliminated.
Many wheats can produce either a low protein
flour for cake bakeries or a high protein flour
for bread bakeries. An industry source esti
mates that air classification is used on only
about three percent of total flour output.
Studies by the University of Nebraska indi
cate that new air classification equipment can
be paid for out of savings in transportation and
storage in a 6- to 24-month period, depending
on location of the plant. According to a 1965
survey by Northwestern Miller, about 9 percent
of survey respondents intended to purchase air
classification equipment.
Many new instruments make possible more sci
entific control and time savings in the milling
process. An electric seed counter using a photo
electric cell and a vibrator, for example, can
help forecast flour yield in about 3 minutes com
pared to 10 minutes required in the manual
method, and is more accurate. Another new
instrument using the principle of a medical
blood cell counter electronically determines par
ticle size in a few minutes, is claimed to be a
more accurate measure than air stream analy
sis and faster than the older weighing practices.
One new piece of equipment determines the
protein content in grain and flour, reducing ana
lytical time from hours to minutes. Another set
of instruments weighs a moving stream, im
proving the control of conditioning and process
ing. The new instruments for determining ker
nel weight, flour particle size, and protein
content make possible a rapid analysis of some
of the important factors in the milling process.
Instrumentation and laboratory analysis are
helping the craft skill of the head miller who
has been largely dependent on “ see and feel”
methods of determining the quality of the flour
through all stages of processing.
Irradiation to eliminate pests may afford some
advantages. Preliminary experiments by the
U.S. Department of Agriculture and the indus
try are in process to determine the net advan
tage, if any, of using irradiation for disinfesta
tion. Negative aspects, which must be overcome
before commercial use, are possible adverse ef
fects on the food value of the grain itself and
on the baking qualities of the irradiated flour.
Significant expenditure on new equipment is
indicated. Capital expenditures for 1964 totaled
$21.7 million compared to $31.1 million in 1959,
a year when mills spent heavily on air classifica
tion systems. Plant and equipment spending
probably will increase over the next few years
as plants are modernized. The Northwestern
Miller survey indicated that 128 mills represent
ing about 60 percent of U.S. flour milling ca
pacity, intended to engage in modernization
projects. Of the 128 mills, 81 declared their in
tention of investing in pneumatic conveying
equipment, 64 in general dust control equip
ment, 63 in new sifters, and 54 in purifiers.
Other major expenditures (at least 40 mills
participating) will be made on seed and im
purity removal, packing, bulk loading, and bulk
storage.
Manpower Trends and Adjustments
Outlook is for continued growth in productivity.
Output per man-hour increased at the annual
average rate of 4.3 percent for all employees
and 3.9 percent for production workers, from
1957 to 1963. The average annual rates of in-
128
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN THE FLOUR AND OTHER
GRAIN MILL PRODUCTS INDUSTRY
Thousands of Employees
50
_ OUTPUT AND OUTPUT PER MAN-HOUR
—
Output per Mari-Hour /
Al 1 Employ jes ^ y
tput
EXPENDITURES FOR NEW PLANT
AND EQUIPMENT
X '
>
_____ L
70
//
f/
e
^ Outp jt per M m-Hour
<
Prod uction W Drkers
60
1958 '59 '60 '61
5 0 ___ i___ ____1
___ ___ 1
___ ___ 1
___
1947
49
51
53
55
Sources:
'6 2 '6 3
1964
-L
57
59
63
965
Data for 1948 not available
Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
129
Average annual percent change
All employees
1947-57 ____________________________________—3.8
1957-64 ___________________
-3 .0
Production workers
1947-57 ___________________________________ - 4 . 3
1957-64 __________________________________ - 3 . 1
Output
1947-57 ___________________________________ - 2 . 1
1957-63 __________________________________
1.6
Output per all-employee man-hour
1947-57 __________________________________
2.7
1957-63 __________________________________
4.3
Output per production worker man-hour
1947-57
____________________________ .
3.4
1957-63 __________________________________
3.9
1957 and 1964, the annual rate of decline slowed,
to about 3 percent for both groups of workers,
from 27,085 to 21,930 for all employees and
from 19,931 to 15,985 for production workers.
It is probable that employment will continue to
decline, but at slower rates.
crease for the 1947-57 period were 2.7 percent
for all employees and 3.4 percent for production
workers.
Workers may be displaced as less efficient plants
are closed. A total of 814 plants, most of these
with fewer than 20 employees, were operating
in 1958 compared to 1,243 in 1947. The contrac
tion has continued. One large producer, for ex
ample, announced in June 1965, the closing of
9 of its 17 plants, displacing 1,400 employees.
Because of competitive pressures, increases in
transportation costs, and other factors, the
trend is to concentrate output in more efficient
mills and in mills closer to consumer markets, in
an effort to reduce overall costs of production.
Prospects are for decreasing employment. From
1947 to 1957, employment (Census data) in
flour and other grain mill products declined
from 39,597 to 27,085, an annual rate of decline
of 3.8 percent. Over the same period, produc
tion workers declined from 30,821 to 19,931, an
annual rate of decline of 4.3 percent. Between
Severance pay is provided to some displaced
workers under collective bargaining agree
ments. Two-fifths of the production workers
and nearly one-sixth of the office workers in
1961 were employed in mills having provisions
for severance pay in the event of displacement
because of technological change or mill closings.
Selected References
Cantor, S. M. and W. H. Harte. “ Recent Developments in Wheat Processing Tech
nology,” Chemurgic Digest, April-May 1963, pp. 3-4, 7.
Drake, Austin T. “ Developments in Milling Modernization,” Food Technology, April
1962, pp. 24-27.
Graham, John C. “ The Use of Air Classifiers in the Flour Milling Industry,” The
Northwestern Miller, May 1965, pp. 25-32.
Henoch, Ruth L. “ What Scientists and Mill Management Say of Grain and Flour
Irradiation Possibilities in 1964,” American Miller and Processor, May 1964,
pp. 9-11.
Industry Wage Survey, Flour and Other Grain Mill Products, November 1961 (BLS
Bulletin 1337,1962).
Johnson, Robert M. and Tyler F. Hartsing. “ Kernel Count as a Measure of Flour
Milling Yield,” The Northwestern Miller, Nov. 11, 1963, pp. 22-26.
Mast Jr., C. L. “ Your Future in Research,” The Northwestern Miller Jan. 20, 1964,
pp. 38-45.
Sloggett, Gordon R., Paul J. Mattern and Richard G. Walsh “ Air Classification of
Wheat Flour, A Case Study of the Economic Effects of Technological Progress,”
Part I, The Northwestern Miller, Feb. 17, 1964, pp. 12-18; and Part II, Mar. 7,
1964, pp. 11-18.
Speight, John. “ Fractionation of Flour,” The Northwestern Miller, Nov. 11, 1963,
pp. 39-50.
Trotter, W. K. and D. L. Miller. “ Economics of Air Classifying Typical Wheat
Flours,” American Miller and Processor, June 1964, pp. 8-11.
The Bakery Products Industry (SIC 2 0 5 1 and 2 0 5 2 )
Summary of Outlook Through 1 97 0
Modernization of bakery products plants in
volves the application of continuous processing
techniques to mixing, baking, wrapping, and
freezing of products; the use of computers in
warehousing and inventory control; and im
provements in materials handling. As newer
and more efficient production facilities are in
stalled, output per man-hour may rise at a
faster rate than during 1957-63. Output prob
ably will increase at the low rate of past years.
Employment decline is expected to continue be
cause of the slow growth in output and increas
ing pace of modernization.
Outlook for Technology and Markets
Output is expected to increase at the 1957-63
rate. Output increased at an annual rate of 1.4
percent between 1947 and 1957, and 1.5 percent
annually from 1957 to 1963, according to the
U.S. Department of Agriculture. Increasing de
mand for bakery products because of population
growth is expected to more than offset declining
per capita consumption of baked goods and
increased competition from prepared mixes.
Handling of wrapping materials in pallet loads
also has decreased materials handling man
hour requirements.
Some of the larger wholesale bakeries are using
centralized control panels for metering. Some
metering systems are adjusted automatically to
plant variations in temperature and humidity.
Some plants are using computers to regulate
the flow of raw materials. All materials are
stored in tanks to aid the direct metering mix
ing machines. In one major bakery, a digital
computer is used to select, meter, and control
the weight of five to nine dry and liquid raw
materials (the number of materials depending
on the product) in the flow from the storage
bins to the scale hoppers, with a 0.1 percent
accuracy. In order to begin the raw dough mix
ing, 16 individual steps are carried out by the
computer, which automatically controls valves,
motors, blowers, and electro-pneumatic and me
chanical devices.
Continuous mixing is helping to speed up bread
making in large bakeries. Breadmaking is be
coming more automated, the continuous mixing
method being an important step toward com
plete automation of the baking process. Con
tinuous mixing is automated only partially as
it can be continuous only after pre-fermented
brews are made in batches. Elimination or
reduction of brew fermentation time to a very
short period is necessary to complete automa
tion. Brew time has been reduced from 6 hours
required at the time of its introduction in 1954
to 2 to 2.5 hours today, compared with the 4 to
6 hour standard sponge and dough procedure.
Proofing and baking times are essentially the
same. Sifted flour, the batch mixture of pre
fermented brew and oxidizing solution, and
liquid or melted shortening are fed continu
ously at predetermined rates into a premixer.
The resulting dough is metered into a devel
oper in which it is stretched and folded over
and over by two counter rotating impellers, then
extruded, divided, and panned to the accuracy
of one gram per pound. Overall processing
Improvements in materials handling reduce
production time and manpower requirements
substantially. Pneumatic conveyors which un
load flour from railroad cars at the rate of 10
tons per hour are being used increasingly. Other
dry materials such as soda, salt, dry milk, and
sugar are unloaded in the same fashion. A
large bakery using pneumatic conveying can
increase productivity in bulk materials han
dling operations as much as 40 times. Use of
pneumatic conveying, however, is limited to
large bakeries.
New ways of handling sugars and reconsti
tuted milk in the liquid state, liquid yeast, and
fats and oils (a fluid shortening which is mix
ture of hard fat with a liquid oil), by pumping
them into storage tanks directly from trucks
and railroad cars, result in considerable saving
of time and labor over manual bulk handling.
130
131
time, from mixing to oven, is lowered substan
tially and provides a potential for a significant
increase in productivity.
Other advantages claimed for continuous mix
ing include improved sanitation due to simple
and effective cleaning, greater uniformity in
the final product, and floor space savings as high
as 60 percent over conventional equipment. The
new technique was originally limited to white,
rye, and whole wheat bread. Further research
and development is being devoted to the use of
continuous mixing for rolls and other specialty
products. Over 30 percent of all bread is made
by continuous mixing. However, the high cost
of the equipment makes this process uneco
nomical for bakers whose output is less than
100,000 pounds per week.
The combining of various dough preparation
stages into one machine that will mix, develop,
divide, and pan bread dough in one continuous
operation has linked automatic ingredient han
dling with dough preparation, the automati
cally controlled oven, and the depanner, slicer,
and wrapper.
Convey orization is being improved. New and
faster conveyorization techniques provide a con
tinuous movement of the panned dough through
proofing and through the oven to depanning,
cooling, slicing, wrapping, and labeling. New
travel ovens may be 100 to 300 feet in length,
gas fired, and fitted with continuous stainless
steel mesh bands for conveying the product
through the oven. Temperatures can be thermo
statically controlled through seven heat zones
to provide the required heat for specific prod
ucts. The continuity of conveyorization has
been enhanced further by the development of
new automated depanners that reduce drasti
cally the time for this operation. New glazed
pans require little or no greasing, and conse
quently, less cleaning which may result in some
reduction in manpower requirements in this
department.
Freezing of bakery products may change mar
keting and distribution structure. Most freezing
of bakery products is done in a freezing room
or tunnel cooled to about —40 °F., by a mechani
cal refrigeration system. A new method, in
experimental use only, uses a liquid nitrogen
mist to fast freeze the products at —320 °F.,
the lack of air preventing oxidation. Advan
tages of the new method are said to be improved
taste and preservation of the fresh quality, but
it has thus far been found too expensive to
apply on a commercial basis.
In 1961, 40 percent of 1,300 bakeries were
freezing part of their production, according to
a survey by the U.S. Department of Agricul
ture. Although freezing of bakery products
(freezing is applied to about 400 products) is
more prevalent among retail bakeries, a grow
ing proportion of wholesale output is being
frozen. Freezing enables the small retailer,
as well as the large wholesalers and supermar
kets, to maintain larger and more varied inven
tories, including a frozen dough inventory
which can be subsequently defrosted and baked
off as needed for sale.
One of the results of baking for frozen inven
tory may be to reduce or eliminate the uneven
utilization of labor and equipment characteris
tic of the industry, particularly in wholesale
bakeries. Some bakeries are shut down Satur
day, start baking again on Sunday, fresh prod
ucts being delivered early Monday. One study
of 20 wholesale bakery plants showed that Fri
day’s production was at 100-percent capacity,
but Tuesday’s average production was down to
57 percent, the average not including five plants
which were closed. Frozen distribution also
allows for less frequent delivery to retail out
lets, reduces significantly losses due to nonsaleable stale products, makes possible a larger
and more varied supply at distribution centers,
and, by widening geographical marketing areas,
increases competition among wholesalers and
between wholesale and retail bakeries.
Measures to control deterioration and increase
shelf life are being studied. One of the most
promising methods for increasing shelf life is
the use of microwave energy to inhibit bread
mold. In one experiment, microwave-treated
bread was free of mold after 10 days, while con
ventionally treated bread was moldy.
Research on the use of irradiation— i.e.,
gamma rays given off by radioactive substances
— to prevent spoilage has not been as extensive
on bakery products as on bacon, potatoes,
wheat, and some other products. The limited
132
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN THE BAKERY PRODUCTS
INDUSTRY
Thousands of Employees
EMPLOYMENT
^
A 1 Employ 5es
I5
r
/!
J _ O __
Prod uction W
—
0I I I I I
i
I
I
-—
■
Index (1957-59=100)
150
—
I
I
Ratio Scale
OUTPUT AND OUTPUT PER MAN-HOUR
IOO
90
80
70
1 9 5 8 ' 59 ' 60
60
1947
Sources:
I_______ I_______I_______ I_______I
'49
’5 1
*53
'5 5
I
'5 7
I
1
’5 9
‘ 61
'62 '63
'64
I_______I_______I
'6 1
*63
1965
Employment, Bureau of Labor Statistics; output and output per man-hour, Department of Agriculture.
133
research on bakery products, however, has not
yet proven irradiation successful as a means of
preservation. Success in this research might
have a significant impact on bakery marketing
practices and employment.
Electronic data processing (ED P) is being ap
plied to ivarehousing and inventory control.
Computer controlled cranes, capable of placing
pallet loads of the finished baked production in
1 of 650,000 locations within a warehouse, are
used by one midwest wholesale baker. Execut
ing 180,000 warehouse instructions every 3 sec
onds, the computer memorizes (and affirms)
where pallet loads have been placed. Each
customer’s order is filled on a predetermined
fifo (first in, first out) basis.
Some companies are using computers for
crediting daily production and sales data, to
reduce distribution costs. One bakery used a
computer to determine the profitability of their
product mix, and was able to reduce a line of
108 items to 85 by dropping 29 and adding 6
new, more profitable items. Accurate and up-todate records make possible more efficient truck
loadings in terms of saleable products with
fewer returns and less deterioration. Com
puterized bookkeeping is claimed to facilitate
collections, thereby enabling the routemen to
devote more time to sales.
Capital expenditures expected to be at a high
level. Capital expenditures averaged about $123
million annually between 1958 and 1963, and in
1965 are expected to exceed that level. Accord
ing to Baking Industry (Annual Survey num
ber, June 5, 1965), 34 percent of wholesale bak
eries would spend more than in 1964; 47 percent
would continue spending at the 1964 rate,
while only 17 percent of wholesalers covered
in the survey planned to spend less on capital
improvements in 1965 than in 1964. The survey
showed that in 1965, 15 percent of supermarket
bakery firms intended to purchase conveyors;
23 percent, mixers; 15 percent, ovens; and 31
percent, freezing and refrigeration equipment.
The survey also indicated a high potential
for future modernization. In five geographic
areas, comprising the entire country, bakers
were asked to evaluate the extent of “ automa
tion” in their plants, as they understood the
term. Results of the survey for large plants
showed that in two of the areas, only 55 percent
of the plants were considered to be partially
automated; in another area, 50 percent, and in
two areas, about 43 percent each. A negligible
proportion of large plants were reported fully
automated. Small- and medium-size bakeries
reported significantly smaller percentages par
tially automated than did large bakeries, in 4 of
the 5 districts.
Manpower Trends and Adjustments
Output per man-hour will probably continue
increasing through 1970. Output per all-em
ployee man-hour increased at an average annual
rate of 1.3 percent between 1947 and 1957; the
rate between 1957 and 1963 was slightly higher
— an average annual rate of 1.8 percent.
Employment is expected to decline slightly. Al
though employment probably will continue to
decline, slowly increasing demand for bakery
products from a growing population will tend
to hold the decline to a moderate rate. Employ
ment increased from 280,700 in 1947, to 302,500
in 1957, but between 1957 and 1964, declined
to 289,900.
Production worker employment— 166,500 in
1964— declined 1 percent annually from 1947
through 1957 and 1.4 percent annually between
1957 and 1964. As a percent of the work force,
production workers declined from 72.5 percent
in 1947 to 60.8 percent in 1957, and to 57.4 per-
Average annual percent change
All employees
1947-57 __________________________________
0.8
1957-64 ________________________________
- .6
Production workers
1947-57 ___________________________________ - 1 . 0
1957-64 ___________________________________ - 1 . 4
Output
1947-57 __________________________________
1.4
1957-63 __________________________________
1.5
Output per all-employee man-hour
1947-57 __________________________________
1.3
1957-63 _________________________ _ . .. . .. . _
1.8
134
cent in 1964. The decline in the proportion of
production workers reflects the sharp increase
in the number of deliverymen and routemen
over this period.
Need for technically trained personnel is ex
pected to increase. The baking industry is
establishing a National School in Baking Sci
ence and Management for the training of
highly skilled personnel, engineers, and scien
tists, for which there is an increasing demand.
Measures for adjustment have been included in
some contracts. Mechanization and automation
clauses providing up to 600 hours of pay— de
pending upon length of service— for employees
who are displaced as a result of technological
change have been incorporated in some con
tracts.
Coverage by pension and welfare funds is
portable in a large percent of the industry
where contractual relationships exist with a
union.
Selected References
Bayfield, E. G., and William E. Young. “ Flour Brew Studies,” Baker’s Digest, June
1965, pp. 50-54.
Cotton, Robert H. “ Food Standards Viewpoint of the Baking and Frozen Food
Industry,” Food Technology, November 1964, pp. 43-45.
Davis, Russell E. “ Outlook 1965,” Baking Industry, Jan. 2, 1965, pp. 21-28.
Faw, James E., Jr. “ Automation in the Bakery Industry,” Automation, July 1962,
pp. 127-129.
The Freezing of Commercial Bakery Products: Current Practices, Problems and
Prospects. U.S. Department of Agriculture, Economics Research Service, Market
ing Economics Division.
Gomolak, Louis S. “ Take Two Tons of Flour. . . . ,” Electronics, Apr. 20, 1964,
pp. 84-89.
Lipstreu, Otis and Kenneth A. Reed. Transition to Automation: A Study of People,
Production and Change, Series in Business No. 1, University of Colorado Press,
1964, 156 pp.
Matz, Samuel A. Baking Technology and Engineering (Westport, Conn., Avi Pub
lishing Company, 1960), 640 pp.
Miller, Ross. “ Automation for Increased Production,” Baking Industry, Feb. 1,
1964, pp. 29-31.
Snyder, James D. “ Food Irradiation, What’s in Store For Bakery Products and
Ingredients,” Bakery Industry, Oct. 10, 1964, pp. 29-31.
Walsh, Richard G., and Bert M. Evans. Economics of Change in Market Structure,
Conduct, and Performance in the Baking Industry 1947-1958, University of
Nebraska Studies, New series No. 28, December 1963.
The Malt Liquors Industry (SIC 2 0 8 2 )
of a centralized control panel graphically indi
cating progress through each cycle. One indus
try expert estimates that the typical plant of
1975 will be producing beer at about twice the
speed of the typical 1965 brewery, provided that
the whole plant is engineered on the higher
speed basis. Rapid brewing cycles are achieved
by shortening nonproductive time (for example,
in pumping liquid between tanks and in filtering
out solids during the brewing) and by integrat
ing each processing step.
Blending systems which keep raw material
flowing at rates which reproduce a preset
formula, regardless of slowdowns in one of the
component lines or in a pump which is feeding
materials, are now being introduced. Progress
Summary of Outlodk Through 1970
Beer production will probably increase at a
faster rate than in the decade 1955-65. As new
plants are built, old plants modernized and
obsolete ones closed, output per man-hour will
probably continue to rise at a fairly rapid rate.
Control instrumentation and mechanization of
cleaning and materials handling are among
major factors reducing unit labor requirements.
Future developments may include continuous
processing and the use of concentration. Em
ployment in the malt liquors industry probably
will continue to decline, but at a slower rate
than in the recent past. Labor-management
agreements have been adopted that shorten
worktime through provisions for early retire
ment and longer vacations.
Outlook for Technology and Markets
A rate of output growth exceeding recent rates
is expected. Output (BLS composite index)
increased at an annual rate of 0.8 percent be
tween 1947 and 1957, and 2.2 percent annually
from 1957 to 1963. Per capita consumption is
rising; it amounted to 15.9 gallons in 1964, com
pared with a low (in 1961) of 15 gallons. Many
industry experts believe that the rise in per
capita consumption will continue, due to a rela
tively greater increase in the population in the
20-40 age group during the decade 1965-75.
The introduction of new varieties of malt bev
erages, new container sizes (such as home
kegs), and emphasis on convenience packaging
(such as zip top cans) and response to adver
tising directed to previously nonbeer buying
consumers (women) are also among factors
contributing to more rapid growth.
Instrumentation and automatic controls inte
grating batch processing equipment signifi
cantly increase production capacity by de
creasing the time required to produce each
batch. Such systems permit programed regu
lation of process variables (temperature, pres
sure, flow, level, relative alkalinity), by means
Brewery workers check cooking control board and brew kettles in an
advanced brewery.
135
136
of the blending is indicated on a central control
panel.
Mechanized cleaning systems are being installed
in a few advanced plants. Automatic detergent
spraying equipment, installed in brew kettles,
fermenters, and wort and holding tanks, elimi
nates manual scrubbing. The hazards of serious
accidents, which can occur when workers enter
tanks too soon after use and are overcome by
heat or gasses, or are splashed by caustic wash
ing compounds, are greatly reduced. Hand
scrubbing of coolers, pasteurizers, bottle wash
ers, and other brewery equipment is minimized
by new chemical cleaners and additives, and by
improved equipment design.
Advanced wort cooling equipment with auto
matic cleaning is replacing coolers which re
quired 1 to V/> hours of hand scrubbing for
every 12 hours of operation. The new coolers
are safer because they are entirely enclosed.
They occupy only one-tenth the space needed for
earlier systems, and air conditioning the space
is no longer necessary. In one brewery where
two coolers are operated constantly at 330 bar
rels an hour, cleaning labor requirements have
been cut from two men per shift to one man
per shift.
Advances in packaging methods and materialshandling equipment are eliminating labor.
Faster packaging lines and more automatic
cleaning, filling, and labeling machines are be
ing installed to improve labor productivity in
packaging, where about three-fourths of all pro
duction workers are employed. Mechanical
equipment now being installed automatically
lifts bottles from cartons onto conveyors lead
ing to washing machines; a worker monitors
the line to prevent backup and breakage. In
some installations, cartons of returnable bottles
are removed from trucks mechanically onto
conveyors, where sensing machines sort and
divert the cartons onto specialized lines for
each bottle size.
Small improvements eliminate unpleasant job
duties. For example, label sludge, formerly re
moved by hand from bottle washing machines
at the end of each shift, is now drawn off by
extractors; washing machines remain in con
tinual operation. The declining proportion of
bottles which are returned, washed, and reused,
reduces the amount of cleaning work required
to prepare packages for filling.
Filtering beer just before it is packaged elimi
nates pasteurizing filled bottles and cans. The
very fine membrane filter removes yeast and
other organisms, preventing further fermenta
tion and spoilage in the stored package. One of
the several types of filters available was devel
oped as a result of defense research for the
Army Chemical Corps. At least 10 brewers now
are producing some filtered packaged beer, al
though this filtering method was introduced
only recently. The filtered product, which re
quires no refrigeration in storage, may be
labeled “ draft,” even when it is marketed in
cans. Costs of filtering systems are estimated
to be $12,000, about one-twentieth the cost of
pasteurizers of the same capacity. However,
aseptic filling equipment and sterile containers
become necessary. Another method of steriliz
ing beer prior to bottling is bulk pasteurization,
which deactivates or destroys spoilage orga
nisms by holding the beer a short time at high
temperatures under pressure. Aseptic filling
equipment is necessary.
Research is now being conducted on fermen
tation-retarding additives, which could elimi
nate both filtration and pasteurization. Ap
proval by the Food and Drug Administration
would be required before they could be used in
production.
Continuous processing, from mash mixing
through fermenting, is claimed to result in sig
nificant operating and capital savings. As of
1965, only one brewery had been designed and
erected for continuous processing. When con
tinuous flow processing is substituted for batch
methods, large holding vats and tanks are
eliminated. Raw materials flow steadily through
various cooking, filtering, and cooling stages
without worker intervention. It is claimed that
output of poor or spoiled beer is virtually elimi
nated, and cooking under high temperatures
improves the yield of malt, sugar, and hops.
Process time, and cleaning and maintenance
work, are reduced. Construction costs for a
two-story continuous processing plant are 25
percent lower than conventional five-story
breweries of equal capacity.
137
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR,
AND CAPITAL EXPENDITURES IN MALT LIQUORS
Thousands of Employees
150
-
OUTPUT AND OUTPUT PER MAN-HOUR
Output per Man-Hour
Employees \
—
Outp u tx
<Q---- c
Output per Man-Hour
Production Workers _
EXPENDITURES FOR NEW PLANT AND EQUIPMENT
Millions of Dollars
10 5 .4
I 00
60
9 5 8 '5 9 '60 '61 '6 2 '63 '6 4
50
Sources:
Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
138
On the other hand, improvements in batch
processing may reduce the advantages of con
tinuous processing. Some companies, for ex
ample, are adopting some parts of the continu
ous process (such as continuous fermentation)
in existing plants, but not installing the entire
continuous process. Some experts believe that
the possibility of difficult biological problems,
which do not arise in batch processing, where
equipment is cleaned after each use, may be a
major obstacle to rapid adoption of continuous
processing.
Widespread, adoption of the beer concentration
process, over the next 5 to 10 years, appears un
likely. These partial freezing processes remove
most of the water content of beer after fermen
tation but before final finishing. The concen
trate thus formed can then be reconstituted at
the same brewery in which it is made or else
where at small local plants by adding water and
carbon dioxide. Concentration has been reported
to reduce the aging (or lagering) process from
weeks to days or hours, eliminate refrigeration
in storage in some cases, and cut space require
ments drastically. Developers of the process
claim that a batch method brewery could utilize
its capacity more fully and mitigate seasonal
production peaks by increasing its production
during slack winter months, storing the produc
tion as concentrate (since it can be stored longer
without spoiling), and reconstituting and sell
ing stored concentrate during the peak season.
Shipping concentrate in bulk from a central
plant to local reconstitution and bottling plants
could cut jobs in trucking, railroad transporta
tion, and wholesaling. Packaging jobs in local
plants could be increased, while packaging em
ployment in the concentrate-producing centers
might be reduced.
Under 1965 Internal Revenue Service regula
tions, a producer of concentrate may ship it
only to its own reconstitution and bottling
plants (breweries), or may export it. The re
constituted product is subject to the same tax
as other beer and may be mixed with other beer,
except the bottled final product must be labeled
as made from concentrate. As of 1965, no com
pany in the United States was commercially
producing beer concentrate.
Some brewers’ associations and unions of
brewery and trucking workers who may be ad
versely affected by widespread adoption of the
concentration process are supporting legislation
that would prohibit domestic shipment of beer
concentrate outside the plant which produces it.
Expenditures for new plant and equipment in
creased from $72.9 million in 1958 to $105.4
million in 1964. The introduction of prefabri
cated warehouses and plant additions, and the
compact nature of newer processing equipment,
may allow substantial economies in future con
struction. In one prefabricated plant, for ex
ample, construction costs were reduced by onethird for a 250-barrel-a-day plant.
The total number of breweries dropped from
252 to 190 between 1958 and 1964. Small local
breweries accounted for most of this decline,
while large national brewers increased their
share of the market. Net plant losses between
1958 and 1963 were greatest in Middle Atlantic
and East North Central States, which produce
55 percent of malt liquors. Current new plant
construction is located chiefly in the West and
Southwest.
Manpower Trends and Outlook
Output per man-hour probably will continue to
rise at a fairly rapid rate. Output per all em
ployee man-hour increased at an average annual
rate of 2.6 percent during the 1947-57 period.
The growth rate between 1957 and 1963 was
sharply higher— 6.2 percent per year. Output
per production worker man-hour increased 3.7
percent annually from 1947 to 1957, and 515
percent annually from 1957 to 1963.
Employment decline may continue, but at a
moderated pace. Employment (Census) de
clined from 82,500 in 1947 to 77,400 in 1957, or
0.6 percent a year. By 1964, it had fallen to
61,900, declining at about 3.1 percent a year
after 1957. Production workers dropped by 2.2
percent a year between 1947 and 1957; and con
tinued to fall, at 2.8 percent a year, between
1957 and 1964. Although nonproduction work
ers (including truck-drivers) represented 23
139
Average annual percent change
All employees
1947-57 ___________________________________ - 0 . 6
1957-64 ___________________________________ - 3 . 1
Production workers
1947-57 ___________________________________ - 2 . 2
1957-64 ___________________________________ - 2 . 8
Output
1947-57 __________________________
.8
1957-63 __________________________________
2.2
Output per all-employee man-hour
1947-57 . .
2.6
1957-63 __________________________________
6.2
Output per production worker man-hour
1947-57 __________________________________
3.7
1957-63 __________________________________
5.5
percent of all employees in 1947, they had risen
to 34 percent of the total by 1957, and were
slightly below that level in 1964.
Occupational shifts will continue. Continuous
processing may reduce brewhouse jobs, which
comprise about 10 to 20 percent of the work
force in a highly instrumented batch brewery. A
kettleman controls operations from a central
ized control panel where the instruments are
displayed. A brewmaster is still required to
control quality. Among packaging workers,
further mechanization will continue to displace
materials-handling employees. New varieties of
packaging, however, may offset this trend to
some extent.
Some Issues and Examples of Adjustment
Provisions are being introduced in pension
plans to encourage early retirement. One con
tract, covering 5,000 workers, was revised in
1964 to provide “ retirement incentives,” up to
May 31, 1966: a monthly payment of $100 in
addition to the pension, for 3 years, to workers
retiring at age 65; and a higher monthly pay
ment to workers retiring between 60 and 65.
Another contract, covering 4,800 workers, per
mits retirement at age 60 after 10 years of
service, and requires retirement at 65.
An Employment Security Fund was established
in one 196U contract covering several thousand
employees. It provides supplementary unem
ployment benefits of up to $100 a week (includ
ing unemployment compensation when paid)
for up to 26 weeks for laid-off employees. Em
ployer contributions, amounting to 20 cents per
hour worked by permanent bottlers and 10 cents
per hour worked by other employees, support
the fund.
Longer vacations increasingly are being adopted
to shorten worktime per year and mitigate sea
sonality. Paid vacations recently were extended
by a number of major contracts, in some cases
to 7 weeks after 20 years of employment; 8
weeks after 25 years. Through some contracts,
efforts are made to mitigate the job impact of
seasonality. For example, vacations are sched
uled for slack winter months; a few contracts
require that all but 2 weeks be taken in the off
season. Others limit the proportion of employ
ees who may be off during late spring and sum
mer months. Ten to 11 holidays are specified in
some major brewery contracts, which further
shorten the work year; the holidays granted
may sometimes be “ banked” and taken with pay
during slack seasons.
Work rules in some contracts are varied ac
cording to layoff conditions. In one contract
covering several thousand employees at several
breweries, apprenticeship entry and the assign
ment of specific tasks to some job titles are lim
ited when regular employees are on layoff. Some
major contracts establish minimum numbers of
workers on such equipment as pasteurizing,
bottle-filling, or palletizing machines; truck
crew sizes and loads may also be specifically
limited. Work requirements and “ manpower
adequacy” are sometimes specifically made ar
bitrable. In addition, at least two major con
tracts provide for joint union-management com
mittees to resolve work load and scheduling
problems as they arise. Such committees also
function in other plants, even though not in
cluded as a contract item.
140
Selected R eferences
“ Automates Solids Handling,” Food Engineering, January 1963, pp. 70-71.
“ Beer Brews Better With Controls,” Instrumentation, Vol. 13, No. 3, 1960, pp. 4-6.
“ Beer Concentrates Procedures Clarified,” American Brewer, September 1963, p. 30.
“ Continuous Beermaking Makes Commercial Debut,” Chemical Engineering, Jan. 4,
1965, pp. 18-20.
Fallon, H. T. “ Tele-Processing System Links National Plants Together,” Modern
Breivery Age, pp. 32-33.
“ Fastest Beer-Can Line,” Modern Packaging, May 1962, pp. 116-120.
Feller, Karl F. Report to the Delegates of the Thirty-Sixth Convention of the Inter
national Union of United Breivery, Flour, Cereal, Softdrink and Distillery Work
ers of America, AFL-CIO-CLC, Baltimore, Md., August 1961.
Ford, Kenneth. “ Beer: Larger Markets, Tougher Competition,” Printers Ink,
Feb. 12, 1965, pp. 44, 46-48, 50.
Griesedieck, Joseph. “ The Next Ten Years in the Brewing Industry,” Brewers
Digest, December 1964, pp. 18-19.
International Labour Organisation, Health and Safety in the Food Products and
Drink Industries. Tripartite Technical Meeting for the Food Products and Drink
Industries, Geneva, 1963.
Malick, E. A. and G. H. Dale. “ Studies of Concentrated and Reconstituted Beers,”
a paper presented at the Annual Convention of the American Society of Brewing
Chemists, New York, N.Y., May 6, 1964.
Malick, Emil A., Lee H. Boyer, and Robert O. Dunn. “ The Optimising of Brewery
Output Through Continuous Beer Concentration and Computer Programing.”
Reprint from the October 1963 issue of the Brewers Digest, pp. 2-4 and 6-14.
U.S. Congress, House of Representatives, Committee on Ways and Means. Hearings
on Whether the Process of Manufacturing Beer Concentrate Will Necessitate
Amendments to the Internal Revenue Code, 88th Cong., 1st sess., Nov. 5, 1963,
Washington, 127 pp.
“ World’s Fastest Beer Bottling,” Modern Packaging, April 1963, pp. 180-183.
“ Wort Cooling at Pabst,” Modern Brewery Age, December 1964, pp. 34-35.
The Tobacco Products Industry (SIC 2 1 1 , 2 1 2 , 2 1 3 )
as a cigar binder and to a limited though in
creasing extent, as a cigar wrapper. This de
velopment affords substantial savings in mate
rial requirements since broken leaves and leaf
trimmings as well as whole leaves are utilized
in the manufacture of tobacco sheet. Also, un
like natural leaf, uniformity of dimension and
composition permits nearly complete consump
tion of tobacco sheet in its use as cigar binder
and wrapper.
The greater adaptability to mechanization of
tobacco sheet, compared with natural leaf, also
permits substantial savings in labor require
ments. For example, use of tobacco sheet makes
possible elimination of the manual binder laying
operation and the manual wrapper laying opera
tion required when making cigars from natural
leaf. In addition, the tedious, labor-consuming
process of removing the tobacco leaf rib is no
longer necessary.
Tobacco sheet has also been developed for use
in the manufacture of cigarettes. Shredded and
combined with natural leaf, tobacco sheet per
mits substantial material savings in cigarette
making by utilizing otherwise unusable tobacco.
Summary of Outlook Through 197 0
High rates of increase in output per man
hour in both cigar and cigarette and other to
bacco products manufacturing are expected to
be maintained as changes in technology continue
to be introduced. Major labor-saving techno
logical developments include expanded use of re
constituted tobacco sheet, more automatic, elec
tronically controlled processing equipment, a
wider variety of mechanized materials-handling
devices, and increased instrumentation. Em
ployment is likely to continue to decline in the
manufacture of cigars and cigarettes and other
tobacco products as gains in output per man
hour exceed those in output.
Outlook for Technology and Markets
Total output of tobacco products is expected to
continue to expand. Output of tobacco products
(BLS index) increased at an average annual
rate of 3 percent between 1957 and 1963, com
pared with a rate of increase of 1.2 percent from
1947 to 1957. Production of cigarettes and other
tobacco products (chewing tobacco, smoking to
bacco, and snuff) grew 3.7 percent a year dur
ing 1957-63, more than two and one-half times
the annual rate of increase from 1947 to 1957.
From 1957 to 1963, output of cigars grew 1.5
percent annually and 1 percent a year from
1947 to 1957. Primarily because of the popula
tion gain in the smoking age group (the number
of persons 18 years and over will grow at an
average rate of 1.5 percent a year from 1965 to
1970), total output of tobacco products is ex
pected to continue to increase. Rates of output
growth, however, are difficult to estimate be
cause of the uncertainty of future consumer
reaction to the issue of smoking and health.
Improvements in processing equipment continue
to increase efficiency in cigarette manufactur
ing. Equipment with electronic controls, auto
matic loading and unloading devices, and faster
operating cycles is resulting in reduced process
ing time and unit man-hour requirements from
tobacco processing to finished packaging. Un
loading attachments (accumulators) for filter
and cigarette-making machines, for example,
can eliminate the job of hand collection, increas
ing substantially the overall efficiency of these
operations. Latest available cigarette-making
machines, incorporating such features as au
tomatic filter attaching devices, are at least 50
percent faster than those of 10 years ago and
are capable of producing as many as 2,000 per
fectly finished cigarettes every minute. A cig
arette-packaging machine, now being intro
duced, is adaptable to an integrated flow system
of production and can produce 65 percent more
packaged units than machines presently in use.
Expanded use of reconstituted tobacco sheet is
expected in cigar and cigarette manufacturing.
This product is essentially a continuous sheet of
tobacco made from a mixture of finely ground
natural leaf materials and adhesives. It is being
substituted widely in place of natural leaf
141
142
Equipment for production of cigars is becoming
increasingly mechanized. Faster speeds, in
creased numbers of machine controlled func
tions, and combination of formerly separate
operations in all types of production equipment
— particularly cigarmaking
machines— are
among the advances. The introduction of auto
matic accumulators on cigarmaking machines,
for example, eliminates the task of manually
collecting finished cigars. Another cigarmaking
machine features a device to attach mouth
pieces to cigars automatically, with no reduc
tion in rate of output. Attachments to cigar
making machines for automatic feeding of to
bacco sheet for both binder and wrapper elimi
nate two manual operations and, in one machine
model, can increase output up to 20 percent.
Fully automatic machines for making cigars
with tobacco sheet wrapper and binder in a con
tinuous length, which is then cut automatically
to desired cigar size (rather than traditional
manufacture of cigars as individual units), are
being developed and are expected to be installed
by the larger cigar companies in the near fu
ture. The rate of output of these new machines
is expected to be 35 to 40 times as great as that
of equipment currently used.
Conveyor systems are reducing materials-handling requirements and improving process floiv.
Electronically controlled conveyors are being
introduced to feed precise amounts of different
cigarette tobaccos to automatic blending ma
chines. Improved tobacco distribution systems,
such as an electronically controlled pneumatic
tube system, are being installed which automati
cally air-clean blended tobacco and maintain a
predetermined amount of it at each of the cig
arette-making machines. Labor savings are also
being achieved in cigar and cigarette manufac
turing through more widespread integration of
several separate units of production equipment
by means of conveyors. Full integration of the
entire process— from tobacco preparation
through final packaging— has been accom
plished in only a few of the larger cigar and
cigarette companies.
Instrumentation is expanding. Increased em
phasis on improved product quality and produc
tion efficiency is resulting in the growing use of
precision instruments in most of the production
processes, principally in cigarette making. One
electronic inspection device, used in conjunction
with cigarette-making machines, checks the
quality and weight standards of 2,000 cigarettes
in less than 2 minutes, compared with the 3 to 4
hours required for hand inspection of the same
quantity. Another device on filter-plug-making
machines tests and measures automatically the
diameter of the plugs as they are being made.
Electronic devices used with packaging ma
chines automatically detect packages with miss
ing or defective cigarettes, foil, labels, or
stamps.
Business applications of electronic data proc
essing are becoming extensive. Computers— in
troduced into the industry during the past
several years— are expected to be used increas
ingly for accounting, payroll, operations analy
sis, inventory control, and engineering functions.
When in full service, a computer center recently
established by one large cigarette firm is to link
its offices, factories, and warehouses throughout
the country.
Production of cigars in f ewer but larger plants
is expected to continue. This trend is due largely
to the economies of large-scale production and
to equipment costs associated with the continu
ing mechanization of the industry. Between
1947 and 1963, according to the Bureau of
Census, the number of cigar manufacturing
plants fell substantially— from 822 to 192. At
the same time, average plant employment
Control line worker observes processing of reconstituted tobacco
sheet used as binder and wrapper in automatic cigar manufacturing.
143
doubled, and the percentage of plants with
fewer than 20 employees decreased from 77
percent to 57 percent. Further concentration
of cigarmaking will probably take place as
mechanization increases.
The cigarette industry, already highly con
centrated, is expected to continue to consist of
a relatively small number of large, highly
mechanized plants. Located in Virginia, North
Carolina, and Kentucky— cigarette manufac
turing establishments totaled 14 in 1963; their
average employment exceeded 2,500.
rettes and other tobacco products, output per.
man-hour for all employees and production
workers increased at 3.1 percent and 3.5 per
cent a year, respectively, between 1957 and 1963
— rates more than twice those of the earlier
period. Increases in output per man-hour for
all employees and production workers in cigar
manufacturing between 1957 and 1963 reached
the very high annual rates of 9.2 and 9.6 per
cent, respectively, after growing at the corre
sponding high annual rates of 5.1 and 5.2 per
cent from 1947 to 1957.
Research and development will probably in
crease. The cigarette manufacturers study such
matters as the composition of cigarette smoke,
smoke filtration, and production processes
equipment. Cigar manufacturers also are en
gaged in substantial research on product de
velopment, manufacturing processes, and
equipment development, particularly on improv
ing the manufacture and utilization of tobacco
sheet.
Employment is likely to continue to decline. Em
ployment (Census data) for total tobacco prod
ucts fell from 71,500 in 1957 to 62,900 in 1964,
or at an average annual rate of 1.9 percent.
Comprising 63 percent of the total industry em
ployment in 1964, employment in the cigarette
and other tobacco products segment rose at the
rate of 0.5 percent a year between 1957 and
1964, following a decline of 0.1 percent an
nually from 1947 to 1957. During 1959-64,
however, employment in this segment declined
at an annual rate of 1.6 percent although out
put increased.
Cigar manufacturing employment declined at
a rate of 5 percent a year between 1957 and
1964, exceeding the annual decrease of 3.5 per
cent during 1947-57. Because gains in output
per man-hour are likely to continue to exceed
those in output, a further decline in employ
ment in both cigar and cigarette and other to
bacco products is probable.
Capital spending is expected to increase. Ex
penditures for new plant and equipment in the
total tobacco products industry were $50.3 mil
lion in 1964, rising irregularly from a level of
$28.6 million in 1958. Investment in the ciga
rette and other tobacco products segment, which
accounted for 85 percent of the total industry
expenditures in 1964, also increased irregularly
during this period. Expenditures in cigar manu
facturing increased substantially in 1964 after
declining steadily between 1958 and 1963. Em
phasis on installing improved methods and
equipment throughout the tobacco products in
dustry and plans for construction of new, highly
mechanized cigar manufacturing plants by
several of the largest firms point toward a
growth in expenditures over the next few years.
Manpower Trends and Adjustments
Productivity will probably continue to increase
at a high rate. Output per all-employee man
hour and production worker man-hour for total
tobacco products increased at average annual
rates of 5.9 and 6.4 percent, respectively, be
tween 1957 and 1963; these rates were about
double the corresponding annual rates of 194757. In the larger segment of the industry, ciga
Continued change in occupational structure is
expected. Production workers represent a rela
tively high proportion of all employees in to
bacco products manufacturing, accounting in
1964 for 93 percent in the cigar industry and 89
percent in the manufacture of cigarettes and
other tobacco products. These proportions are
2 percentage points lower than those in 1947.
Engineers, scientists, and technicians are in
creasing in relative importance, due to the con
tinuing emphasis on improved mechanization,
product development, and quality control. Em
ployment in these occupations in all tobacco
products manufacturing approximately doubled
between 1950 and 1960.
Increased mechanization may be expected to
continue to alter man-hour requirements in
144
EMPLOYMENT, OUTPUT, AND OUTPUT PER MAN-HOUR
IN THE CIGARETTES AND OTHER TOBACCO PRODUCTS
INDUSTRY
Thousands of Employees
60
EMPLOYMENT
50
All Emp loyees
40
-------- - ^
——■ —
—
30
- —
■ -
—
^
Prodi ction Woirkers
■ “
20
I0
0
|
____1
___ ____1
___
Index (1957-59=100)
Sources:
___
|
1
____1
___ ___ 1
___ ___ 1
___
Ratio Scale
Employment, Bureau of Census; output and output per man-hour, Bureau of Labor Statistics.
145
EMPLOYMENT, OUTPUT, AND OUTPUT PER MAN-HOUR
IN THE CIGAR INDUSTRY
Thousands of Employees
Index (1957-59=100)
Sources:
Ratio Scale
Employment, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
146
T obacco Prodi/ cts (C igarettes,
etc.)
Average annual percent change
All employees
1947-57 _______________________________ - — 0.1
1957-64 __________________________________
0.5
Production workers
1947-57 ___________________________________ - 0 . 1
1957-64
0.1
Output
1947-57 __________________________________
1.4
1957-63 __________
3.7
Output per all-employee man-hour
1947-57 __________________________________
1.5
1957-63 __________________________________
3.1
Output per production worker man-hour
1947-57 __________________________________
1.5
1957-63 __________________________________
3.5
T obacco P roducts (C igars)
Average annual percent change
All employees
1947-57 ___________________________________ - 3 . 5
1957-64
-5 .0
Production workers
1947-57 ___________________________________ - 3 . 6
1957-64 ___________________________________ - 5 . 0
Output
1947-57 __________________________________
1.0
1957-63 __________________________________
1.5
Output per all-employee man-hour
1947-57 __________________________________
5.1
1957-63 __________________________________
9.2
Output per production worker man-hour
1947-57 __________________________________
5.2
1957-63 __________________________________
9.6
production occupations. Introduction of more
automatic equipment and more widespread use
of tobacco sheet will probably reduce further
the number of cigar machine operatives (includ
ing the wrapper and binder layer operators).
These workers accounted for 30 percent of pro
duction worker employment in cigar manufac
turing establishments in 1964, compared with
34 percent in 1961. Further reduction in the
number of cigarette-making machine operators
and “ catcher girls” (manual collectors of fin
ished cigarettes) are also likely. Employment
in these two occupations declined from 30 per
cent of total production worker employment in
cigarette manufacturing in 1960 to 28 percent
in 1965.
Increases in employment of machine adjust
ers and electronic maintenance men, however,
may be expected as more complex, electronically
controlled processing equipment is introduced.
The employment of inspectors also may continue
to rise. In cigarette manufacturing in 1965,
adjusters, inspection personnel, and mainte
nance employees accounted for 18 percent of
total production worker employment, compared
with 13 percent in 1960. These employees com
prise a relatively smaller but growing group in
cigar manufacturing; they accounted for 6 per
cent of all production workers in 1964.
Retraining programs are underway to meet
changing skill requirements. Classroom and onthe-job instruction for workers engaged in the
operation of new production equipment is being
intensified by many cigarette manufacturers.
Extensive instruction of office and management
personnel in computer use is also being under
taken. In the cigar industry, various skilled and
semi-skilled workers are being retrained under
the Manpower and Development Training Act
of 1962. In 1964, 28 on-the-job training pro
grams were established in various cigar plants;
nearly 400 workers were to receive additional
training in such occupations as maintenance
mechanic and wrapper layer.
147
Selected R eferences
Technological Developments
Alexander, Tom. “ Millions of People Just Won’t Smoke Cigars,” Fortune, Septem
ber 1965, pp. 165-167 If.
Morgenbesser, David. “ Cigaret Makers Push Diversification Plans,” The Journal of
Commerce, Nov. 10, 1964, p. 5.
“ Brown and Williamson Plans $26 Million Expansion,” Western Tobacco Journal,
August 1965, p. 30.
“ Philip Morris Launches Advanced Computer System,” Tobacco, Apr. 17, 1964,
pp. 11, 14.
Roberts, John. “ Molins at Milestone Seeks New Worlds to Conquer,” Tobacco,
Feb. 7, 1964, pp. 14, 24.
“ Cigarette Maker,” Tobacco, Apr. 3, 1964, p. 16.
Manpower Trends and Adjustments
Industry Wage Survey, Cigar Manufacturing, Ayrib-May 196U (BLS Bulletin 1436,
1965), 31 pp.
Industry Wage Survey, Cigarette Manufacturing, July-August 1965 (BLS Bulletin
1472), 16 pp.
Stetson, Damon. “ Tampa Undergoing Bumpy Transition as a Cigar Center,” The
New York Times, Mar. 3, 1964.
The Textile Mill Products Industry (SIC 2 2 )
near future may be affected by the degree to
which defense procurement increases. On the
other hand, expansion of imports may dampen
the growth rate.
Summary of Outlook Through 197 0
Interest in plant modernization is stronger in
this industry than at any time in the last 50
years. Capital expenditures for plant and equip
ment are expected to continue to rise. The push
for technological improvements is being stimu
lated by intensified efforts to meet foreign and
interfiber competition, an improved financial
position, and the emergence of larger companies
run by managers with more professional
training.
Major laborsaving technological develop
ments being introduced include faster, larger
capacity machines, mechanized materials han
dling, and continuous processing. Although out
put is expected to increase over the next few
years, employment will probably continue to
decline, but at a more moderate rate than in the
past 10 years. The emphasis of job require
ments is shifting from machine tending and
duties calling for manual dexterity to machine
watching and patroling.
Industry probably will continue to operate at
high rates despite an increase in productive ca
pacity. The rate of operation (according to
McGraw-Hill surveys) rose from 80 percent in
1957 to 96 percent in 1964— the preferred rate
in the industry. At the same time, productive
capacity has also increased. More intensive
machine utilization over a 3-shift day and
higher productivity per machine have more than
compensated for retirement of marginal mills
and obsolete equipment. In 1964, for example,
only slightly less cotton cloth (1.3 percent,
square yards) was produced than in 1954, but
with 18 percent fewer active spindles and 19
percent fewer active looms.
Synthetic fibers will continue to increase their
share of the market. Continuing growth in pro
duction of manmade fibers and fabrics results in
deeper market penetration, with lower unit
labor requirements than natural fibers. For ex
ample, manmade filament yarn does not require
conventional preparatory mill operations
through spinning. Manmade fibers (cellulosics
and noncellulosics) made up 41 percent of all
mill fiber consumed in 1964 (based on poun<
Outlook for Technology and Markets
Output will continue to rise at a moderate rate.
Output, according to the Federal Reserve Board,
rose 3.5 percent annually from 1957 to 1964,
considerably above the 1.3 percent rate from
1947 to 1957. Production, measured in terms of
fiber poundage consumed in textile mills,
reached a new high of 7.8 billion pounds in
1964, increasing at an annual rate of 3.2 percent
from 1957 to 1964, whereas from 1947 to 1957
mill fiber consumption had decreased slightly.
The growth rate was considerably higher from
1960 to 1964— 4.6 percent annually. The strong
est growth areas of fiber consumption have been
knit goods, tufted carpets, seamless hosiery,
and manmade broadwovens.
Textile output over the next 5 to 10 years
probably will rise at or above the 1957-64 rate
"of growth because of increasing disposable in
come and population growth, with a greater
proportion of teenagers and members of new
family formation age groups, the major textile
consumers. In addition, textile output in the
High speed loom is equipped with automated filling-handling
system that eliminates several steps in textile manufacture
148
149
data), compared to 29 percent in 1957. Twothirds of the increase was in noncellulosics (in
cluding nylon, polyester, acrylic, spandex and
olefin) which more than doubled their share of
all fiber consumption from 8 percent in 1957 to
18 percent in 1964.
The outlook is for a continued increase in
noncellulosic consumption, with estimates of
growth ranging from 5-10 percent annually
from 1964 to 1975. As a percentage of total
consumption, noncellulosics will increase sharply
by 1975. On the other hand, expanded research
on cotton, wool, and cellulosic fiber is strength
ening their competitive position. Legislation
reducing cotton prices to world market levels
has also given cotton a new boost relative to
synthetics, lessening the pressure to switch to
synthetics.
By 1970-75, total manmades will probably
make up more than 50 percent (in pounds) of
all fiber consumed in textile mills compared with
41 percent in 1964. Actually, manmades’ share
of the total fiber market is even greater when
measured in terms of the end product rather
than in fiber poundage consumed in the mill be
cause the number of square yards of cloth pro
duced from a pound of manmade fiber is greater
than the amount produced from a pound of
cotton or wool fiber.
machines replace the older models. In one
modernized cotton mill, for example, 206 card
ing machines recently replaced 600 earlier
models, and they deliver stock to an 85-pound
can compared with the previous 24-pound can.
Faster machine speeds with larger packages
are a major factor in reducing unit labor re
quirements. New carding machines operate at
more than 4 times the speed of 10 years ago,
drawing machines at 6 times the speed. Spindle
speeds were 10,000 r.p.m. in 1950, are 13,500
today, and 20,000 r.p.m. are now possible. Wind
ing speeds are at least double that of 10 to 15
years ago. Conventional loom speeds increased
25-50 percent in the past 15 years and shuttle
less looms may soon double the speed of weav
ing. Machine output of hosiery and other knit
ting equipment, due to multiple feeds, also is
rising very significantly. Carpets are now pro
duced mainly by high-speed tufting machinery,
rather than by the slower weaving process.
Faster machines are accompanied by larger
packages (laps, bobbins, and cans of stock), re
sulting in lower unit labor requirements. Labor
savings can also be achieved as relatively fewer
Built-in maintenance reduces maintenance re
quirements. Central lubrication and sealed an
tifriction bearings are examples of built-in
maintenance which results in less downtime,
lower unit costs, and improved quality. It is
claimed that roller bearings on new drawing
frames require oiling only once every 3 years
during overhaul compared with once a week on
older models. Some of the newest spinning
frames have gearing enclosed in oil baths, elimi
nating almost all lubrication and maintenance.
New model looms can be built with central
lubrication covering 75 percent of the necessary
points to be oiled. In one of the mills built most
recently, all production machines are equipped
with an automatic lubrication system in which
oil enters through lines in the floor and is
pumped to lubrication points on each machine
once every minute. Only a few mills are utiliz
ing central lubrication so far, but the outlook is
Improved conveyor systems and pneumatic
chutes may improve process flow and reduce
materials-handling operations. More wide
spread adoption of mechanical transfer of goods
between the many discrete textile processes is
significant, since materials handling comprises
5 to 15 percent of production costs. Improved
powered conveyors, hoists, monorails, tramrails,
and forklift trucks are being utilized increas
ingly at all steps, from raw material to finished
product. Mechanized handling is particularly
important in improving process flow in the
older multistory mill, and in handling heavy ma
chine packages, which are twice as heavy as
earlier packages. For example, automatic con
veyor systems now utilized in the newest mills
pick up the 80 to 90 pound lap and deliver it to a
lap storage indexer, from which it automati
cally moves to the carding machines, as needed.
Pneumatic stock conveyance, a more advanced
method which moves stock by air, also greatly
increases productivity but is costly and still
limited in use.
150
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES IN
TEXTILE MILL PRODUCTS
Thousands of Employees
1947
49
Millions of Dollars
Sources:
51
53
55
57
59
61
63
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures,
Securities and Exchange Commission.
1965
151
for gradually increased adoption of this tech
nique of saving maintenance labor.
Automated devices for cleaning and for atmos
pheric control are gaining industry acceptance.
Cleaning may constitute as much as 20 percent
of total labor costs in yarn mills. High speed
machinery intensifies the cleaning problem.
Cards, for example, which produce 40 pounds
an hour create considerably more lint and fly
than cards producing 20 pounds an hour. One
solution increasingly being adopted is the in
stallation of suction devices on the machine at
points of discharge. In addition, a traveling
monorail cleaner, which automatically blows
residue off machine frames, vacuums the floor,
and pneumatically carries the waste to the
waste room, is increasing mill efficiency.
A potentially useful process, still limited to a
few of the newest plants, is the system of total
air cleaning. This system forces the air down
from overhead ducts, carrying the lint laden air
with it, to ducts under the floor. The air is fil
tered of waste and returned to the overhead
ducts. Plant efficiency is increased, but the
system is said to be too costly for the average
mill.
Electronic instrumentation still is limited, hut
growing in importance. Stop motion devices,
and continuous automatic inspection, recording
and controlling instruments which replace vis
ual scanning or other slower methods of inspec
tion, reduce downtime and permit more efficient
quality control. An electronic device, for ex
ample, used in the winding operation, photoelectrically detects defects in the yarn and
automatically stops the winder for their
removal.
Some of the newer electronic devices activate
machine changes when a defect is detected. For
example, yarn thickness is controlled by a photo
electric cell on a drawing machine which detects
the difference in light passing through the yarn
and signals an electromagnetic clutch which
adjusts the machine accordingly.
Mechanical and electronic counters and cen
tral monitoring systems are being utilized in
creasingly for cost and quality control. An elec
tronic monitoring system, for example, which
records the performance of every loom on a
central console, visually and in printed reports,
is now economically feasible, but will be limited
to the newest mills.
Computers are used by large companies for data
processing and are being extended to control
finishing processes. According to a 1965
McGraw-Hill survey of large companies, 56
percent of textile companies responding re
ported computer installations. Major uses in
cluded accounting, inventory control, and
production planning.
The first computer control system for use
with a production process was installed in 1964
in a finishing plant. Uses in finishing involve
continuous analysis of processing data for con
trol of continuous bleaching and dyeing opera
tions, and dye color matching to determine the
cheapest combination of dyestuffs to match
colors. Until quite recently, color matching was
achieved largely by trial and error.
New textile products (less than 10 years old) in
1973 may be 35 percent of total sales. In 1963,
according to McGraw-Hill estimates, they con
stituted 22 percent. Fiber and product innova
tions such as easy-care finishes, stretch yarns,
laminated and coated fabrics, and nonwoven
fabrics may open new markets or displace more
conventional fabrics.
Some nonwovens (needlepunch and bonded)
bypass spinning, weaving, and knitting proc
esses and have much lower labor requirements
than woven fabrics. A very recent development
is the successful use of the needlepunch process
for blanket manufacture, which may result in
its application to other products. Bonded non
wovens (fiber fused by heat or chemicals), used
for clothing interlinings, disposable medical
items, and vinyl coated products, are also broad
ening their markets, but are not expected to
exceed 5 percent of textile production by 1970.
Progress is being made toward the goal of con
tinuous automatic manufacture, but this system
may be limited to specialized plants. Consolida
tion of two or more processes is a long-term de
velopment which has reduced significantly the
number of operations. One of the most impor
tant developments is an automatic winding at
tachment to the loom which eliminates quilling
152
as a separate process, greatly reducing labor
requirements. Perhaps as many as 10 to 15 per
cent of all looms now have this attachment,
primarily for use with coarser yarn, and the
proportion will increase.
A more advanced system of continuous manu
facture, in use in Japan, is being introduced for
the first time into one or two mills in the United
States, now under construction. This system in
tegrates bale opening through carding (elimi
nating picking) into one continuous system and
links together roving, spinning, and winding
operations, utilizing automatic bobbin doffing
machinery. Automatic doffing (removal of full
bobbins), one of the most time consuming oper
ations in a conventional mill, is now commer
cially feasible in the United States. Claims of
expected increases in output per man-hour in
this type of mill range from 70 percent to 100
percent above the conventional mills. Flexi
bility, however, is reduced and therefore this
system probably will be best suited to mills with
highly specialized production. By 1970, such
automated continuous spinning mills still will
be rather limited.
Plant and equipment expenditures reach new
highs. It is estimated that, in 1965, textile mills
invested over $1 billion, almost two and one-half
times the amount invested in 1957. In the last
5 years, investment increased following 12
years (1949-61) of fairly low investment. Ex
pectations are that, in the next 5 years, annual
investments will exceed current high levels.
The proportion of current expenditures for
new plants and plant expansion is much greater
than in the past. The capitalization ratio of one
of the newest mills (built in 1964) approxi
mated $50,000 per employee, compared with
$6,000 to $10,000 for older mills. In 1958, 70
percent of expenditures went into moderniza
tion, 30 percent into expansion; in 1965 invest
ment ratios were expected to be 55 and 45 per
cent respectively.
R&D expenditures will continue to increase
over the next few years. According to a
McGraw-Hill forecast, R&D outlays by textile
and apparel firms will reach a peak of $54 mil
lion in 1974, compared with $36 million in 1964.
Only $15 million was spent in 1957. In recent
years, a number of large diversified corpora
tions appeared— as a result of mergers and ac
quisitions— which have been better able finan
cially to undertake long range research and
development projects. As a ratio of sales, how
ever, R&D expenditures by the industry are
relatively small. Textile and apparel companies
engaging in R&D spent 0.5 percent of their net
sales on R&D in 1963. In addition, however,
substantial outlays were made by chemical com
panies for synthetic fiber research, by machine
companies for machine development, and by the
U.S. Department of Agriculture for natural
fiber and fabric research.
Manpower Trends and Adjustments
Employment probably will continue to decline
over the next, 5 years, but at a moderate rate.
Mill shutdowns and layoffs in the early postwar
period brought employment down to 981,100 in
1957, from the 1947 near-high of 1.3 million, a
rate of decline of 2.7 percent annually. In 1964,
employment stood at 891,100, a decline of 1.4
percent annually from 1957. Major factors re
sponsible for this long-term trend included de
clining exports, expanding imports, and chang
ing technology. The period, 1961-64, was the
first relatively stable period since the postwar
peak; employment declined only 0.1 percent an
nually. Expanding textile demand over the next
5 years may offset, to some extent, the effect of
reduced unit labor requirements and mill shut
downs, so that the rate of employment decline
may be moderate.
The production worker ratio has been de
creasing steadily but is still considerably above
the ratio for all manufacturing. In 1964, pro
duction workers accounted for 89 percent of all
Average annual percent change
All employees
1947-57 ___________________________________ - 2 . 7
1957-64 __________________________________ 1.4
Production workers
1947-57 __________________________________ - 3.1
1957-64 ___________________________________ - 1 . 5
Output
1947-57 __________________________________
1.3
1957-64 __________________________________
3.5
153
employees, compared to 94 in 1947 and 91 in
1957. As modernization moves ahead, this ratio
will probably continue to decline.
Technological changes affect all types of textile
occupations. Requirements for operators will
continue to be cut back significantly by faster
machines, larger packages, etc. These occupa
tions, including the major groups of spinners
and weavers, account for about two-thirds of
all textile jobs. Installation of new high-speed
cards and spindles, in one mill, for example,
reduced requirements for card tenders by 25
percent and spinners by 30 percent.
Unskilled labor, only a small proportion of
total jobs, will continue to be reduced by im
proved materials handling and mechanized
cleaning and oiling devices. Some newly mod
ernized mills report reductions of 25 percent in
unskilled jobs over the past 5 years. In some
new mills, not a single person is employed to
haul material.
Mechanization of cleaning will reduce tasks
previously performed by a machine tender, free
ing him for more skilled duties. For example,
with the newest system of total air cleaning, a
card tender’s cleaning duties occupy 10 to 15
percent of his time instead of the 65 percent
spent in conventional mills.
Skilled maintenance jobs are also reduced by
built-in maintenance features and reduction in
number of machines. Only one picker fixer, for
example, is required to service 14 new pickers;
on older models one was required for 10.
Greater need is expected for technical personnel.
The demand for engineers and technicians is
increasing. An air-conditioning system in a
large mill, for example, may require 7 to 8 tech
nical employees. The larger mills employ in
strument mechanics so that immediate quali
fied servicing can be available. More quality
control and waste control engineers will also
be required in the future.
New machinery requires operators to spend
more time machine watching and patroling.
The operator’s job is becoming one of machine
watching, rather than machine tending. Auto
matic picker machines, installed in only a few
mills today, for example, eliminate the opera
tor’s two major functions of weighing and
doffing, but he must continue to patrol the
lines of machines to detect malfunctioning, etc.
The spinner’s functions— creeling, piecing-up
broken ends, and cleaning— remain unchanged,
but they need to be performed less frequently,
permitting the worker to oversee more ma
chines. Larger packages, for example, reduce
creeling and new efficient high precision ma
chines require less piecing-up of yarn. Simi
larly, automatic doffing will substantially alter
the doffer’s job content. Instead of manually
doffing full bobbins and replacing them with
empty ones, the doffer now will start the auto
matic machine and oversee the machine’s opera
tion. Although operators’ duties are shifting
from operations requiring manual dexterity to
the patroling function, many industry experts
believe that the highly complex textile machin
ery requires a more responsible employee.
Greater emphasis is being placed on formal
training. More formal training programs for
operating and maintaining equipment are be
ing instituted, replacing traditional methods of
learning on the job as an assistant. Textile ma
chinery manufacturers now provide more train
ing programs, particularly for maintenance
men and technicians. Loom fixers, for example,
may be trained for 3 weeks at the loom factory.
With machinery manufacturers’ cooperation,
mills may maintain training equipment and
qualified personnel within their own premises.
154
Selected R eferences
Technological Developments
Dockray, George H. “ The Systemated Mill,” Textile Industries, February 1965,
pp. 59-66.
Enrick, Norbert Lloyd, Editor. Industrial Engineering Manual, Pt. II, Systems,
Procedures and Controls, January 1962, Southern Textile Methods and Standards
Assn., pp. 105-167.
Goldberg, J. B. “ Textile Research Achievements in 1964,” Textile Industries,
January 1965, pp. 83-94; February 1965, pp. 129-136.
“ The Mill of Tomorrow,” Textile World, May 1964, pp. 48-113.
Howell, L. D. The American Textile Industry, U.S. Department of Agriculture,
Economic Research Service. November 1964, 146 pp.
Wheeler, Willard C. “ Marketing, Key to Success in Textiles,” Modern Textiles
Magazine, January 1965, pp. 44-52.
“ Yarn Manufacturing Today: Is Automation’s Big Push Underway?,” Textile
World, June 1965, pp. 46-59.
Manpower Trends and Outlook
Barkin, Solomon. “ The Effect of Increased Productivity on the Labour Force and
its Deployment in the United States Cotton Textile Industry,” Productivity
Measurement Review, November 1964, pp. 39-57.
Industry Wage Survey, Wool Textiles, June 1962 (BLS Bulletin 1372, July 1963),
Cotton Textiles, May 1963 (BLS Bulletin 1410, August 1964), and Synthetic
Textiles, May 1963 (BLS Bulletin 1414, August 1964).
The Apparel Industry (SIC 2 3 )
formed primarily on manually operated ma
chines— will continue to be widely utilized, with
only minor modifications foreseen in the near
future. The industry is expected, therefore, to
remain highly labor intensive.
Summary of Outlook Through 1970
Despite recent trends toward larger firms,
larger capital expenditures, and development of
automatic equipment, apparel manufacturing
will probably remain one of the least mecha
nized of the manufacturing industries. Major
sources of productivity increases are expected
to continue to be the wider use of such manage
ment techniques as improved work methods,
more efficient work distribution, and improved
plant layout. The future may see greater use of
bonded fabrics and increasing utilization of
new techniques to produce garments that can
retain their press. Expanding production will
probably lead to continued growth in employ
ment levels.
Technological change is likely to he more rapid
among large-scale producers of standardized
types of clothing. Firms making shirts, pa
jamas, underwear, work clothing, and similar
staple goods, produce standardized goods for
inventory as well as for orders, enabling long
production runs for which mechanized equip
ment can be economical. These firms, which
tend to be larger than average, are among the
most mechanized in the industry and are ex
pected to continue to adopt improved equipment
to raise their productivity.
Outlook for Technology and Markets
Production engineering techniques are expected
to continue to he the major means of increasing
productivity. Time study methods, improving
the arrangement of equipment for a single
operation and improving the workflow of an
entire production process, afford significant
labor savings. Many manufacturers have con
tinued to gain increases in productivity by re
arranging their production facilities so as to
divide the work into a large number of very
small, simple operations, each done by an opera
tor using a single purpose machine, permitting
the work to be routed more efficiently from
operation to operation.
Moderate growth in production is foreseen. Ap
parel production (based on Federal Reserve
Board data) increased at an average annual
rate of 4.8 percent from 1957 to 1964, compared
to 2.7 percent per year from 1947 to 1957. Ex
panding population and increasing volume of
consumer expenditures are expected to lead to
continuing growth in demand. However, rising
imports— almost tripling in dollar value from
1957 to 1964— will probably fill a portion of this
demand.
Mechanization will continue to he hindered by
nonstandardized production. The apparel in
dustry is composed, for the most part, of a large
number of small firms with little capital, pro
ducing numerous styles, sizes, and types of
clothing, usually in small lots. Of the 28,000
establishments in 1963, about 55 percent had
fewer than 20 employees, and about 77 percent
had fewer than 50 employees. Because of short,
nonstandardized production runs and frequent
style changes, extensive mechanization of the
manufacturing processes continues to be diffi
cult and in some cases uneconomical. The preva
lent manufacturing system— the manual mov
ing of a stack of individual garment parts
through a series of individual operations, per
More widespread use of work handling aids and
machine attachments is expected to continue to
increase production efficiency. Equipment de
signed to reduce the large amount of time spent
by sewing-machine operators in positioning and
adjusting tasks is expected to be adopted more
widely. Machines such as needle positioners,
automatic thread cutters, and parts stackers
can increase productivity up to 50 percent in
the operations affected. In addition, hundreds
of small, laborsaving sewing-machine attach
ments are expected to continue to be used for
such operations as elastic fastening, pleating,
and hemming. High speed sewing machines,
155
156
thread trimmers, garment finishers, and auto
matic buttonhole machines are also likely to be
utilized to an increasing extent. Time savings
from each of these changes are very small, but
the cumulative effect may be significant.
New 'processes for making garments that retain
their press are becoming important. Utilizing
improved chemically treated fabrics and heat
curing techniques, manufacturers are expand
ing production of garments that can hold their
shape through a number of washings. These
new processes, widely used for men’s and boys’
trousers, and beginning to be used for shirts,
are expected to be utilized for men’s casual wear
and work clothing and for women’s sportswear
in the near future. Many technical and produc
tion problems remain to be solved, but present
methods consist of treating the fabrics at the
textile mill and curing either by the textile mill
before the garment is manufactured (precure)
or by the apparel firm after manufacture (post
cure). Precure techniques are being utilized
mainly for the light fabrics used for shirts;
post-cure methods are more applicable for
heavier fabrics such as those used for trousers.
Apparel firms utilizing the post-cure process
are required to use special ovens or high tem
perature presses to cure garments. Although
the purchase of this expensive equipment is
generally limited to large firms, small firms can
subcontract out the curing operations. “ Durable
press” processes are utilized presently mainly
for garments made from cotton-synthetic
blended fabrics. Research is underway to apply
similar techniques to other fabrics. Increased
production worker man-hours may be required
for the manufacture of garments utilizing
“ durable press” processes because of the addi
tional operations needed.
Fabric-to-fabric bonded materials and elec
tronic fusing of seams may lead to decreased
unit labor requirements. Production of gar
ments using bonded materials is increasing
rapidly. Consisting of two fabric layers or two
fabrics with a thin urethene foam layer in be
tween, bonded together by fabric finishing firms,
the use of these new materials reduces sharply
the amount of cutting and sewing needed for
manufacture of a garment. For example, an
apparel manufacturer using a lining bonded to
an outer fabric has to cut and sew the parts of
a garment only once. Using the traditional un
bonded materials, cutting and sewing of the
Transfer m achine recently introduced autom atically m anufactures the complete left front of men's shirts.
157
lining and the outer fabric entail separate
operations.
The electronic fusing of seams in garments
made from synthetic fabrics, still in the pilot
stage, would eliminate sewing operations en
tirely. This revolutionary development probably
would reduce substantially the unit labor re
quirements in some areas of apparel manu
facture.
New cloth cutting and patternmaking tech
niques are being utilized. Die-cutting machines
are being used presently by a small number of
firms to replace hand methods of cutting gar
ment components, resulting in significant labor
savings per unit. This method of cutting may
become more widespread in the future. New
pattern grading equipment, which produces a
number of different size copies of a master pat
tern at the same time, has led to substantial
productivity increases in this operation. New
pattern marking systems, which use photo
graphs of miniaturized patterns to preplan the
marking of actual size patterns, are also
being used increasingly. These miniaturized
marking systems minimize cloth wastage and
increase efficiency of marking workers by de
creasing pattern layout time. Electric cloth
spreading machines, which, some users report,
increase worker productivity as much as two
fold in this operation, are expected to continue
to replace hand methods in large firms.
Equipment combining a number of mechanized
operations is being introduced, primarily for
staple goods manufacturing. One of the most
significant recent developments— a unit for
making complete shirt fronts—moves parts
automatically between a number of different
machines which combine positioning, thread
cutting, assembling, and sewing operations.
Composed of two transfer lines, this machine
makes both the left and right front of a shirt
simultaneously, attaches pockets and buttons,
and makes buttonholes. This unit is claimed,
by the manufacturer, to be able to produce shirt
fronts more than five times faster than present
methods. So far, only one major firm has in
stalled this equipment.
Another laborsaving machine that has been
introduced recently is a unit for making com
plete dungaree pockets; it utilizes air jets to
move precut parts through the machine and
folds, lines, sews, and stacks the pockets auto
matically. Similar automatic equipment has
been developed for making shirt cuffs and col
lar bands. Another innovation is a photoline
tracing machine which runs a sewing head that
can follow a pencil, ink, or tape pattern inserted
in a control unit. Patterns can be changed in
minutes, making this machine very flexible and
adaptable for short-run production of small
garment parts. Also, recently introduced is a
highly flexible unit for sewing contour seams.
This development utilizes a pivoting sewing
head, guided by a photoelectric control, to fol
low the edge of the fabric. The high cost of
most of these machines will probably deter their
widespread use.
Use of conveyors in warehouses is expected to
increase. A number of large multiplant firms
have set up centralized garment distribution
centers, utilizing conveyorized warehouses, to
increase efficiency in distributing plant output.
One firm increased its peak shipping capacity
by 50 percent, while gaining a 32-percent total
labor savings, with such a conveyorized order
processing system. Since fast, efficient dis
tribution of apparel is of major importance
throughout the industry, it is probable that
conveyorized distribution centers will become
increasingly prevalent in the future.
Utilization of computers primarily for business
data processing is expected to grow. Many of
the large apparel firms are using or are plan
ning to install computers for business purposes.
One of the most important computer uses is
for sales analysis— allowing firms to adjust pro
duction quickly to the styles most in demand.
In addition, computers are being used increas
ingly for order processing, inventory control,
and accounting operations. For example, a
multiplant firm significantly speeded up the
preparation of order allocations and shipping
tickets and now processes as many as 120,000
garments a day. Computers are also beginning
to be used for manufacturing operations such
as pattern grading and marking.
A Government-industry cooperative program is
stimulating more technical research. The Na-
158
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES
IN THE APPAREL INDUSTRY
Thousands of Employees
1947
'49
Millions of Dollars
I 50
1951
Sources:
*51
1953
*53
1955
'55
1957
’5 7
1959
'59
'6 1
1961
'6 3
1965
1963
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures, Bureau of the Census.
159
tional Bureau of Standards of the U.S. Depart
ment of Commerce initiated a program in 1963
to assist the industry in improving production
processes, expanding collection and dissemi
nation of technical information, increasing
technical training of personnel, and assisting
university research dealing with the apparel
industry. In cooperation with the Apparel
Research Foundation, a grant of $190,000,
combining Federal and industry funds, was
awarded to an engineering firm to develop
equipment for the automatic conveying of mul
tiple plys of fabric from stacks to the sewing
machine, a process considered a bottleneck in
the mechanization of sewing operations. The
National Bureau of Standards is also testing
mathematical techniques of computer simula
tion to assist the industry in improving produc
tion operations. The final objective of this joint
effort is to develop a technical research pro
gram that can then be sustained wholly by the
industry, which so far has spent little for
research and development.
Expenditures for new plant and equipment are
expected to increase. The industry’s capital ex
penditures for new plant and equipment, among
the lowest per production worker among all
manufacturing industries, reached a peak of
$143 million ($123 per production worker) in
1963 as compared to $107 million ($100 per
production worker) in 1957, the previous post
war peak. One important factor likely to con
tribute to future growth in expenditures for
new plant and equipment is the continuing trend
in the industry toward mergers and acquisi
tions. This trend has resulted in a number of
large firms, many of which are concerned with
improving production efficiency through a con
tinuing investment in modern facilities and
equipment.
Manpower Trends and Adjustments
Employment will probably continue to increase.
Total employment increased at an average an
nual rate of 1.1 percent from 1957 to 1964, com
pared to a 0.5 percent yearly rate of increase
from 1947 to 1957. Production worker employ
ment grew at about the same rates during these
periods. Total employment and production
Average annual percent change
All employees
1947-57 __________________________________
1957-64 __________________________________
Production workers
1947-57 __________________________________
1957-64 __________________________________
Output
1947-57 __________________________________
1957-64 __________________________________
0.5
1.1
.2
1.1
2.7
4.8
worker employment reached their peak in 1964
— 1,302,000 and 1,157,000 workers, respectively.
These employment levels will probably continue
to increase, since expanding demand for ap
parel is expected to outweigh productivity gains
resulting from anticipated gradual changes in
technology. Displacement problems that may
occur because of technological change are ex
pected to be minimized by the high labor turn
over that has prevailed in this industry.
The ratio of production workers to total em
ployees is expected to remain substantially
above the all-manufacturing average. It de
clined slightly from 90.7 percent in 1947 to 88.9
percent in 1964.
Slight changes in occupational structure are
foreseen. The anticipated growth in demand for
sewing-machine operators is expected to be
affected only slightly by the adoption of new
technology. Sewing-machine operators, mostly
women, make up the largest occupational group
in the industry. This occupation accounted, in
1963, for about two-fifths of the production
workers making men’s and boys’ suits and
coats, about one-half making women’s and
misses’ dresses, and in 1961 for about threefifths making men’s and boys’ shirts and night
wear, and about 70 percent making work
clothing.
Production workers making styled garments,
such as dresses, suits and coats, will be affected
by the continuing shift from the tailor system,
using many skilled hand operations, to the sec
tion system utilizing many sewing-machine op
erators. However, producers of the more ex
pensive lines of styled garments—the least
mechanized establishments in the industry—
are expected to continue to utilize numerous
160
hand occupations su^h as sewers, finishers,
pressers, basters, button sewers, collar setters,
and tailors.
Technically trained personnel may be needed
for the new operations of curing and testing in
the post-curing method of manufacturing “ du
rable press” garments.
Unions and management are expected to con
tinue to cooperate in the adoption of new tech
nology. Both major unions, the International
Ladies’ Garment Workers’ Union (ILGWU)
and the Amalgamated Clothing Workers of
America (ACW A) have assisted in the intro
duction of new equipment in unionized estab
lishments, as part of a continuing program to
promote sound business conditions in the in
dustry. This policy of cooperation is stated
specifically in the current master agreement
between the ACWA and The Clothing Manu
facturers’ Association of the United States,
covering most of the workers in the men’s
clothing industry. An example of cooperation
between the ILGWU and manufacturers is the
voluntary establishment in 1964, of a continu
ing labor relations committee by this union
and a major women’s sportswear firm. One of
the topics of discussion on the agenda of this
committee is the adoption of new production
systems.
Lab or-management contracts provide for meas
ures to assure income protection and job and
wage security. A recent BLS study including
52 major agreements in effect during 1962-63
in the apparel industry, showed that 35 agree
ments covering nearly 250,000 workers con
tained provisions for severance pay, layoff bene
fit, and supplemental unemployment benefit
plans. Most of the contracts in force in mid1965 between the two major unions and apparel
manufacturers contained provisions assuring no
reduction in wages and no loss of jobs because
of technological change.
Selected References
On Technological Developments
Automatic Equipment and Work Aids in the Sewing Room, The American Apparel
Manufacturers Association, Washington, D.C., 1963. 32 pp.
“ Automation Showcase Section,” Southern Garment Manufacturer, January 1965,
pp. 56-73.
Case Studies of Productivity Increases in the Apparel Industry (unpublished), Kurt
Salmon Associates, Washington, D.C., 1965.
“ Centralized Warehouse Operation,” Apparel Manufacturer, January 1965, pp.
20- 21.
Friedman, W. F. “ Modernized Distribution Center,” Apparel Manufacturer, Janu
ary 1965, pp. 18-19.
“ Methods of Permanent Press Manufacturing,” Apparel Manufacturer, January
1965, pp. 22-25.
“ New Wrinkle in No Wrinkle Garb,” Business Week, Nov. 21, 1964, pp. 34-36.
“ Seventh Avenue Goes to Wall Street,” Forbes, July 1, 1964, pp. 24-29.
“ The Status of Automation,” Southern Garment Manufacturer, January 1965, pp.
36-37, 46.
On Manpower Trends and Adjustments
Industry Wage Survey: Men’s and Boys’ Suits aiiid Coats, October 1963, (BLS
Bulletin 1424, January 1965). 100 pp.
Report of the General Executive Board to the 32nd Convention, International Ladies
Garment Workers Union, May 12, 1965, Miami Beach, Fla., pp. 92-112.
The Pulp, Paper, and Board Industry (SIC 2 6 1 , 2 6 2 , 2 6 3 , 2 6 6 )
Other innovations being installed in pulp and
paper mills include highly mechanized paper roll
handling systems which transport paper rolls
with minimum of manual handling, and use of
industrial TV systems to monitor log conveying,
pulp washing, and other operations from re
mote stations. The increased productivity of
high-speed papermaking machines being intro
duced may encourage further mechanization of
materials handling to avoid costly production
bottlenecks.
Summary of Outlook Through 197 0
Output per man-hour probably will continue
to increase in the pulp, paper, and board indus
try at relatively high annual rates as enlarged
plans for modernization and expansion of
production facilities are realized. Continuous
digesters in pulp manufacturing; improved ma
terials handling systems in woodhandling, fin
ishing, and shipping operations; and more
extensive instrumentation will be key techno
logical innovations. New paper products may
emerge from expanded research and develop
ment programs now underway.
Although employment is expected to increase
through 1970, further gains in output per man
hour are expected to offset, to a large degree,
employment increases arising from gains in
output. But more engineers, scientists, techni
cians, marketing personnel, and skilled workers
will be needed. Measures for retraining those
already employed for new work and other ways
of accommodating technological changes may
receive more attention.
Installations of continuous pulping equipment
(digesters) are increasing. Continuous digest
ers with automatic controls eliminate the inter
mittent flow of wood chips and manual starting
and stopping of each batch of pulp. They have
been found to lower labor costs in pulping by
as much as 50 percent, steam requirements by
30 percent, and water needs by 10 percent.
Moreover, fiber yield is substantially higher
than in batch systems. Although batch process
ing will continue to be preferred by some mills,
experts foresee major expansion in application
of continuous digesters. In early 1965, they
represented probably less than 5 percent of all
pulping systems. By 1970, experts forecast that
most new installations and major additions to
chemical pulping capacity will probably involve
continuous pulping equipment.
Outlook for Technology and Markets
Production is expected to continue to increase
substantially. Production (BLS weighted in
dex) increased at an average annual rate of 4.5
percent between 1957-63, slightly above the 4.2
percent average annual increase during 194757. The rate of expansion in output may be
higher between 1965 and 1970, as growth in per
capita consumption of paper and board prod
ucts, population, and exports increase markets.
Materials handling systems are being further
mechanized and expanded. Some unified con
veyor systems which have been installed feature
centralized control units which allow materials
to move from step to step with a minimum of
labor. For example, in a large paper mill, em
ploying nearly 1,500 workers, replacement of
an obsolete woodroom, staffed by 127 workers,
with a new facility incorporating an extensive
conveyor network, more than doubled output
per worker in the operation.
Technicians examine data provided by a computer control system
installed on a paper machine.
161
162
Instrumentation and control systems are being
improved and expanded. Spending for indus
trial instruments in the pulp and paper industry
is rising: it was 45 percent greater in 1965
than in 1963. The trend is toward centralized
control systems, whereby an entire operation is
monitored on graphic panels by one or two em
ployees stationed in air-conditioned rooms.
Advances in electronics are leading to new
instrument applications. For example, beta
gages are being used on paper machines, pri
marily to measure and control paper thickness
thereby improving quality control. Other ad
vances include microwave techniques for meas
uring moisture content of paper and magnetic
flowmeters, first introduced in 1955, to measure
and control pulp flow.
Electronic computers are being used in connec
tion with process control on a limited basis.
More than 20 pulp and paper mills had control
computers in place or on order in early 1965.
Further expansion is anticipated in the use of
control computers. One large firm which in
stalled a computer control system for a con
tinuous digester anticipates savings of $250,000
annually because of increased output, higher
yield, lower chemical consumption, and re
duced maintenance. Computer control is also
being applied to other major processes in the
industry involving the wash plant, bleach plant,
and paper machine. The extension of com
puter control will likely be a major factor in
the projected rise in investment in controls
from an average 3-5 percent of plant costs in
1964, to about 12 percent by 1970.
Although computer control systems have po
tential for improving quality control and pro
ductivity, some difficulties have been reported
and at least two early users of computer sys
tems have removed them from operation. Prob
lems resulted from the use of inadequate instru
mentation in support of the computer control
system, failure to assign experienced process
and instrument engineers to computer projects,
and incomplete knowledge of the interaction of
production variables.
Semichemical pulping is growing in importance.
This process— involving a relatively brief
chemical treatment of chips, followed by me
chanical separation of the fibers— permits
higher yields from pulpwood than can be
achieved in full chemical systems. Semichemi
cal systems also utilize types of hardwoods
readily available but previously little used in
papermaking. Although semichemical pulp
comprised only 9 percent of total pulp output
in 1963, compared with 6 percent in 1953, wider
use of such systems is expected and some ex
perts predict that semichemical pulp may even
tually rank second in total pulp production.
Use of wood residue for pulping is gaining in
importance. Wood chips from sawmill residue,
such as slabs and edgings, accounts for about
40 percent of all pulpwood consumed in some
mills. A few mills, however, report using pur
chased chips almost exclusively, thereby achiev
ing labor and capital savings in woodyard and
woodroom operations. Although experts foresee
further expansion in use of sawmill residue,
they predict that an even faster growth in chip
utilization will result as use of portable chippers and barkers becomes more widespread.
Research and development expenditures are in
creasing. According to the National Science
Foundation, the paper and allied products in
dustry (SIC 26 which includes firms manufac
turing pulp, paper, and board, and converted
products) in 1963 spent $71 million on research
and development, or 45 percent more than in
1959. The number of R&D scientists and engi
neers in the paper and allied products industry
rose from 2,000 in 1959 to 2,900 in 1964, and
may number about 3,400 in 1968. Between 1965
and 1968, research and development expendi
tures, according to McGraw-Hill projections,
may increase by 19 percent.
The development of new paper products, in
cluding combinations of paper with plastics and
metals, is a major area of research and devel
opment. One leading firm has produced on a
paper machine a nonwoven fabric with some of
the characteristics of textiles. Another com
pany is marketing products manufactured from
waste bark, spent pulping liquor, and wood resi
due from sawmills. Some firms are building
modern technical centers to concentrate pres
ent R&D activities and to carry out expanded
research and development programs. Tech-
163
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN PULP, PAPER AND BOARD
Index (1957-59=100)
Sources:
Ratio Scale
Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
164
niques to reduce stream pollution are also being
developed.
Investment for plant and equipment probably
will continue to increase. Annual capital ex
penditures by the pulp, paper, and board in
dustry have, in general, been increasing steadily
since 1958, reaching a record $587 million in
1964. Forecasts indicate high levels of capital
spending will continue through 1970 because of
the substantial anticipated increase in demand.
Funds are expected to be allocated equally for
expansion and for replacement and moderniza
tion. Plants now under construction, some in
new locations, will be an important source of
new jobs.
Manpower Trends and Adjustments
Output per man-hour in the pulp, paper, and
board industry probably will continue to in
crease at a relatively high rate— probably above
U percent annually. Output per all employee
man-hour increased rapidly at an average an
nual rate of 4.9 percent during 1957-63, sub
stantially above the 3.4 percent annual growth
rate during 1947-57. Output per production
worker man-hour has been rising more rapidly
— 5.1 percent between 1957-63 and 3.9 percent
between 1947-57. Over a longer period 1947-63,
output per production worker man-hour rose at
an average annual rate of 4.3 percent.
Employment will probably increase only
slightly. Because of continued gains in output
per man-hour, the projected increase in output
may be handled without major increases in
industry employment. Total employment in the
pulp, paper, and board industry (Census data)
was 220,936 in 1964, compared to 197,000 in
1947. The ratio of non-production workers to
total employment probably will continue to rise
as firms hire more sales, marketing, and related
employees. The average weekly hours of pro
duction workers (excluding paperboard mills)
rose slightly from 43.2 in 1958 to 44 in 1964.
Average weekly overtime hours of production
workers increased from 4.7 to 5.7— substan
tially higher than in manufacturing.
Average annual percent change
All employees
1947-57 __________________________________
1957-64 ___________________________________ Production workers
1947-57 __________________________________
1957-64 __________________________________ Output
1947-57 __________________________________
1957-63 __________________________________
Output per all-employee man-hour
1947-57 __________________________________
1957-63 __________________________________
Output per production worker man-hour
1947-57 __________________________________
1957-63 __________________________________
1.4
A
.8
.7
4.2
4.5
3.4
4.9
3.9
5.1
Skilled and technical ivorkers are gaining in
relative importance. Employment of engineers,
scientists, technicians, and skilled workers is
rising faster than that of other occupational
groups. Scientific, technical, and marketing
personnel will continue to gain in relative im
portance as firms expand research and develop
ment programs over the next decade. Skilled
maintenance and repair workers will be needed
in greater numbers to service more complex
papermaking equipment. But experts foresee
less rapid expansion in employment of semi
skilled and unskilled workers, including helpers
and laborers, whose employment is reduced
as pulp and paper mills become more highly
mechanized.
Significant changes in job duties are residting
from technological innovations. Mills which in
troduced materials handling equipment and con
tinuous pulping equipment significantly reduced
the number of workers who moved materials or
manipulated machinery by hand, but created
some new jobs for workers who were required
to oversee a wider expansion of workflow, relate
one processing step to another, and regulate
operations by pushbutton control. For example,
a sawyer at a mill which installed a highly
mechanized woodroom now controls sawing op
erations from a control panel without direct
manual intervention. After the changeover, the
proportion that manual laborers comprised of
total woodroom employment declined signifi
cantly, and the proportion of machine operators
and tenders more than doubled.
165
Advance planning is, easing the impact of tech
nological change. The practice in adjusting to
technological change in many mills is to pro
vide advance notice of forthcoming technologi
cal innovations, to reassign workers displaced
by mechanization to jobs elsewhere in the plant
in accordance with seniority provisions of col
lective bargaining contracts, and, when neces
sary, to provide workers with new job skills
through retraining. Some mills have hired
temporary employees to carry on operations as
employees whose jobs were scheduled to be
eliminated were reassigned elsewhere within
the plant.
In-plant training programs are preparing work
ers for new jobs. Plant studies disclose that
workers reassigned to newly created positions
generally are retrained by company personnel
and by representatives from the equipment sup
plier to operate new equipment. Where changes
involve mechanization of materials handling,
training is typically brief and provided on the
job. The introduction of a new continuous pulp
ing system, however, requires more elaborate
training involving lectures, classroom instruc
tion, and training manuals. Maintenance em
ployees are also at times assigned to a formal
training program to acquire skills needed to
maintain modern equipment.
Selected References
On Technological Developments
Adams, David S. “ New Trends and Patterns in Material Handling in the Finishing
Room,” Paper Trade Journal, Dec. 9, 1963, pp. 36-40.
“ Continuous Digester in Manufacture of Paper Pulp,” Automation February 1964,
pp. 83-86.
Fox, E. C. “ Computer Control of the Continuous Digester at Gulf States,” Paper
Trade Journal, Nov. 4, 1963, pp. 36-39.
Guthrie, John A. and Armstrong, George R. Western Forest Industry: An Economic
Outlook. Published for Resources for the Future, Inc. (Baltimore, Johns Hopkins
Press, 1961), pp. 95-123.
Luke, David L. “ Pulp and Paper,” American Enterprise: The Next 10 Years,
Martin R. Gainsbrugh, editor (New York, The Macmillan Co., 1961), pp. 217-222.
Slatin, Benjamin. “ Long-Term Forecasts for the Pulp, Paper and Paperboard
Industry,” Paper Trade Journal, Dec. 16, 1963, pp. 36-43.
Van Derveer, Paul D. “ Instruments, Automation and the Pulp and Paper Industry,”
Paper Trade Journal, May 20, 1963, pp. 39-42.
On Manpower Trends and Adjustments
Adams, Wallace L. “ Apprenticeship Training for Paper Machine Crews,” Paper
Industry, August 1964, pp. 383-384.
Impact of Technological Change and Automation in the Pulp and Paper Industry
(BLS Bulletin 1347, 1962), 92 pp.
International Brotherhood of Pulp, Sulphite, and Paper Mill Workers. Automation
— Economic Implications and Impact Upon Collective Bargaining 2d ed., June
1964, 452 pp.
International Brotherhood of Pulp, Sulphite and Paper Mill Workers. Selected
Clauses in Collective Bargaining Agreements in the Pulp and Paper Industry
Related to Automation and Technological Change (Oct. 13, 1964), 62 pp.
Phillips, Paul L. “ Automation in Pulp and Paper,” I. U. D. Digest (Industrial Union
Department, AFL-CIO, summer 1957), pp. 35-40.
The Printing and Publishing Industry (SIC 2 7 )
offset presses. Industry sources state that by
1970, most of the weekly and smaller daily news
papers in the United States with less than
25,000 circulation probably will be printed on
offset presses. Many smaller newspapers are
finding it economically advantageous to con
tract or consolidate their printing in trade shops
or “ printing centers.”
In commercial printing plants, the number of
offset presses increased more than ninefold be
tween 1954 and 1963. Further applications of
this equipment throughout the printing indus
try depends on such factors as the supply of
skilled craftsmen, advances in offset versatility,
and competition from improved letterpress
equipment.
Summary of Outlook Through 197 0
Output of printed materials is expected to
continue to increase at relatively high rates.
As recent technological developments become
more widely adopted, productivity in key op
erations, particularly in composing room and
bindery processes, will increase significantly.
More widespread use of faster printing presses;
offset lithographic printing; gravure printing;
and methods of coded tape, computer-aided, and
photographic typesetting are among the major
changes underway.
Employment is expected to increase. Train
ing programs will continue to be expanded to
provide skills needed for new processes and
equipment. The pace of introduction of new
technology and measures for adjustment are
expected to be among the important issues of
labor-management negotiations.
Tape-controlled linecasting (metal typesetting)
machines are being improved and used more
ividely. By early 1965, for example, 800 of the
Nation’s 1,763 daily newspapers had converted
to tape-controlled (automatic) linecasting ma
chines. Substantial additional applications in
newspaper and other printing plants by 1975
are expected. More than 10,000 keyboard op
erated machines (teletypesetters) are being
Outlook for Technology and Markets
Production is expected to continue to increase.
Demand for books, newspapers, and other
printed media will rise as population, educa
tional level, leisure time, and per-capita income
used throughout the printing industry to pre
continue to increase. Output, according to the
Federal Reserve Board index, increased at an
average annual rate of 3.2 percent between 1957
and 1964— compared with 3.6 percent between
1947 and 1957. According to several industry
projections, printing output in 1980 will be
more than twice that of 1960, continuing at
about the 1947-64 rate.
pare the coded paper tapes needed to actuate
these laborsaving linecasting machines. Once
produced, tape data can be transmitted by wire
to printing plants located in different cities,
reperforated on other tapes automatically, and
used to operate automatic linecasting machines.
Faster automatic linecasting machines, some 50
percent more productive than earlier models,
are being marketed to keep pace with the larger
volume of tapes being produced by high-speed
electronic computers.
Offset lithographic printing is gaining in im
portance, particularly in small- and mediumsize firms. The shift from letterpress to offset
lithographic printing is increasing because of
its potential for fast setup, adaptability to the
photocomposition process, and improving photo
graphic reproduction. Capital expenditures in
1965 by the industry as a whole for offset litho
graphic presses are estimated to be more than
four times greater than for letterpresses.
In early 1965, 24 percent of the about 10,000
daily and weekly newspapers were printed on
Photocomposition (phototypesetting) is ex
pected to gain substantially in importance. This
process utilizes the principle of setting copy to
be printed on film or photosensitive paper
rather than being set in metal type. The opera
tion of phototypesetting equipment is generally
similar to that of its metal typesetting counter
parts, enabling metal typesetting workers to
operate them with minimum retraining; and,
166
167
like improved metal typesetting equipment,
phototypesetting machines feature automatic,
paper-tape operations.
At the present time, phototypesetting is used
primarily in composition of newspaper adver
tisements, and the number of newspapers using
such equipment has nearly tripled between 1957
and 1962. Phototypesetting equipment cur
rently being developed is expected to produce
significantly more lines of type per minute and
to use more styles and sizes of type. Because
of the potential economies of increased versa
tility and speedups of 50 times or more in pro
duction capability, prospects for more wide
spread use of phototypesetting throughout the
printing industry over the decade are very
favorable.
Electronic computers are being used more ex
tensively to speed the preparation of control
tape that guides typesetting machines. In this
process, copy is first converted to coded tape
by conventional methods, but the operations of
spacing the type into the exact length of the
printed line and hyphenation of words are
omitted. The tape is then fed into an electronic
computer programed to perform these opera
tions automatically. The computer also prepares
a new control tape containing both the new and
the previously prepared instructions for the
operation of tape-controlled linecasting and
phototypesetting machines. The computer justi
fies lines and hyphenates words significantly
faster than when performed manually by opera
tors on conventional tape perforator equipment.
In early 1965, more than 130 electronic com
puters were installed or on order for this use.
In the newspaper industry, computers in use
or on order more than tripled between 1963 and
1964. The outlook for increasing use of com
puters throughout the printing industry is very
favorable.
Additional economic advantages are being
sought through the introduction of recent aux
iliary technological developments. One news
paper, for example, has incorporated an optical
reading device with its computer system in an
attempt to increase output and eliminate man
ual re-keyboarding of tape prior to computer
processing. Computer centers, connected by
high-speed data transmission systems, are ex
pected to grow in number and importance, par
ticularly to service the smaller newspapers.
These centers provide small printing plants that
could not economically lease or purchase their
own computers, with the opportunity to utilize
and benefit from this technological advance.
Binding and finishing operations are becoming
increasingly mechanized. Automatic multipur
pose production machines, feeding mechanisms,
and conveyors are being introduced more exten
sively to replace manual tasks and single func
tion machines. Significant labor savings are
also realized by the integration of machines and
conveyors into a continuous flow system. The
introduction of an automatic line for binding
and related operations in one plant, for example,
reduced employment in affected functions by
23 percent.
The trend to more extensive use of color is ex
pected to continue. Electronic and other equip
ment has been developed for automatic color
separation and is replacing more costly and
less accurate manual techniques. These ad
vances make process color methods more eco
nomical for many small printing shops. Some
experts forecast that improved color processes
will bring about more widespread use of color
printing as an advertising medium. Facilities
for full process color are available in more than
50 percent of daily and Sunday newspapers.
Operator prepares perforated paper tape used to actuate
automatic phototypesetting equipment.
168
EMPLOYMENT, OUTPUT, AND CAPITAL EXPENDITURES
IN PRINTING AND PUBLISHING
Thousands of Employees
1000
EMPLOYMENT
800
^ All Employe!3S
6 00
—
m—
-------- * - — — —
—
^ Pro duction VYorkers
400
200
1
___
0 ___ 1
1
l
____1
___
l
|
Index (1957-59=100)
___ 1
___
|
Ratio Scale
Millions of Dollars
50 0
1951
Sources:
1953
1955
1957
1959
1961
1963
1965
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures, Bureau of the Census.
169
Faster printing presses and related equipment
with centralized and automatic control are be
ing introduced. New higher capacity presses
at some newspaper plants are rated to operate
at speeds twice as fast as those they replaced.
On some modern presses, control consoles are
designed so that virtually all running adjust
ments can be made by one man. Other trends
include the introduction of the significantly
faster web presses and more productive sheet
fed presses. Technological improvements in
gravure printing equipment and platemaking
techniques reportedly make this process more
competitive with offset and letterpress methods,
especially on longer runs. Forms of electro
static printing have promise of greater speed
and flexibility than conventional printing
presses, and commercial applications are ex
pected within a short time.
Research and development expenditures by the
printing and publishing industry are very
small, but are increasing. The major sources of
future new developments in printing equipment,
processes, and paper are expected to continue
to be the result of research carried on by in
dustry suppliers of equipment, film and chemi
cals, and the paper industry. Printing research
companies and associations, however, are re
portedly increasing their budgets. For example,
the budget of the American Newspaper Pub
lishers Association’s Research Institute in 1965
was about triple the budget for 1958, and re
search employment was about double. In order
to benefit fully from future new equipment
and processes, some experts believe that even
greater attention to research and development
may be needed.
Plant and equipment expenditures are increas
ing. Annual outlays for new plant and equip
ment (Census data) have exceeded $400 million
since 1960, and in 1964 reached $463 million—
a record high for the printing and publishing
industry. The outlook is for slowly rising
expenditures for new plant and equipment over
the next few years. According to one industry
survey, the largest share of investment for 1965
will be for offset presses. Factors impeding
faster growth of investment include the reluc
tance of some firms to replace old but service
able equipment; and the practice of leasing
rather than buying new equipment to avoid risk
of obsolescence and to eliminate maintenance.
Manpower Trends and Adjustments
Employment is expected to increase. Total em
ployment in printing and publishing (BLS
data) was 950,500 in 1964, 870,000 in 1957, and
721,000 in 1947. Between 1957 and 1964, em
ployment increased at an average annual rate of
1.3 percent, compared to 1.9 percent between
1947 and 1957. Although employment is likely
to continue to increase, the growth rate is ex
pected to continue to be significantly below the
production growth rate, because of greater effi
ciency provided by technological change.
Production worker employment is growing at a
slower rate than total employment. Between
1957 and 1964, the number of production work
ers increased at an average annual rate of 0.9
percent (from 563,700 to 601,400 workers), sig
nificantly below the 1.5 percent annual growth
rate during 1947-57. The ratio of production
workers to total employment fell steadily from
68 percent in 1947 to 63 percent in 1964, and
may continue to decline. The outlook, however,
is for continued moderate gains in production
worker employment.
Occupations and job skills are changing. Ad
vanced types of printing equipment, in many
instances, tend to change the duties of machine
operator to a monitor or tender, to eliminate
manual production and materials-handling
functions, and to create jobs requiring new
skills.
Average annual percent change
All employees
1947-57 ____________________________________
1.9
1957-64 ____________________________________
1.3
Production workers
1947-57 __________________________________
1.5
1957-64 _______________________
.9
Output
1947-57 ___________________________________
3.6
1957-64 ____________________________________
3.2
170
Tape-operated linecasting machines are dis
placing linotype operators but are creating new
jobs that involve preparing paper tape and
monitoring the linecasting machines during
production. In some smaller newspapers,
women typists are being trained to produce
paper tape by manipulating the typewriter-like
keyboards on teletypesetting tape perforators.
Plants mechanizing bindery processes are
reducing hand and single-function machine op
erations. Hand stitchers and bookbinders are
among occupations being replaced by new equip
ment. Some new jobs require monitoring multi
function equipment and automatic lines.
The outlook for skilled workers will remain
favorable over the next decade. Occupations
involving photographic skills will increase in
importance as phototypesetting and other cam
era processes gain in application. In general, a
knowledge of chemistry, physics, and electronics
will become increasingly important.
Adjustments to the advent of computer-pro
duced tapes for typesetting continue to be is
sues in labor-management negotiations. Under
terms of one recent contract agreement involv
ing several newspapers in a large metropolitan
city, union approval is required prior to adop
tion of new types of automatic machinery and
other technologies in composing rooms. This
involves, particularly, computer-produced tapes,
and tape which is transmitted to the newspaper
by wire services. Moreover, a portion of the
publisher’s savings from tape supplied by wire
services to automatically operated typesetting
machines are to be paid into an automation fund
which will be used to retrain printers, provide
benefits for early retirement, and supplement
existing welfare and pension funds.
Training programs to provide skills needed for
modern printing technology are being expanded
by unions, trade associations, and management.
For example, a national training center estab
lished by the International Typographical Un
ion (ITU) in the mid-1950’s provides members
from all over the country with an increasing
number of tuition-free courses to keep abreast
of changing technologies and skills. In addi
tion, members trained at this school often serve
as instructors in training programs carried on
in their own local unions. Some major contracts
provide eligible employees, whose jobs are elimi
nated, with retraining at company expense.
Joint management-union committees have also
been formed in some plants to oversee training.
Another example of union-sponsored training
is the long established school operated by the
International Printing Pressmen and Assist
ants’ Union of North America.
Labor-management negotiations are increas
ingly concerned with issues to increase job se
curity and facilitate adjustment to new tech
nologies. Of 37 key agreements in printing and
publishing, 6 agreements in 1963 covering
nearly 11,000 workers contain severance pay
and layoff benefit plans. Several contracts pro
vide for management to supply advance notice
— sometimes in writing— 90 days before a tech
nological change is introduced. Joint unionmanagement committees have been established
under some agreements to resolve staffing, wage
rates, and working conditions involving new
equipment. In the newspaper industry, labor
and management in early 1964 discussed under
taking joint factfinding studies of the past and
potential impact of new technology on employ
ment opportunities and means of avoiding juris
dictional disputes.
Selected References
Technological Developments
“ New Production Technology,” Book Production Magazine, December 1963, pp.
42a-48a.
“ The Next Big Jump is Near in Printing,” Business Week, Apr. 24, 1965, p. 92 ff.
“ Optimism Prevails for 1965— As Printers and Lithographers Reveal Buying
Plans,” Inland Printer/American Lithographer, January 1965, pp. 34-36.
Perry, John H., Jr. “ Perry, the Experimenter, Views Change in Printing,” Editor
and Publisher, June 13, 1964, p. 10.
Smith, Stanford. “ Technological Developments in Newspaper Publishing,” State
ment Before the Antitrust Sub-Committee of the House Judiciary Committee,
88th Cong., 1st sess., Mar. 14, 1963, 24 pp.
Technological Change— Its Impact on Industry in Metropolitan Chicago— Printing
and Publishing Industries. A Report by Corplan Associates of IIT Research
Institute, 1964, 44 pp.
Winkler, J. Homer. “ New Developments in the Printing Industry in the United
States,” The American Pressman, October 1963, pp. 6-7 ff.
Manpower Trends and Adjustments
Automation. Proceedings of the Printers’ Workshop Union Forum, April 28-29,
1962, Sheraton-Palace Hotel, San Francisco, Calif. Sponsored by San Francisco
Typographical Union, No. 21, 76 pp.
Goldstein, David H., M.D. and C. Raymond Hulsart. “ Automation: A Clinical
Study,” Journal of Occupational Medicine, April 1964, pp. 169-173.
“ Printers Prepare for Change,” Business Week, Aug. 31, 1963, pp. 68-70.
Scheid, Kenneth G. “ Graphic Arts Management— Are There Expensive Gaps?”
Book Production Magazine, November 1963, pp. 69-71.
The Synthetic Materials and Plastics Products Industry (SIC 2 8 2 , 3 0 7 9 )
fibers for 1970 is estimated, by an industry
source, as possibly more than 4.5 billion pounds,
which would mean an average annual rate of
gain from 1964 of 8.3 percent.
Plastics products (SIC 3079) include films,
sheets, rods, and miscellaneous items. Output
has been increasing at a very high rate between
1957 and 1964, and probably will continue to
increase at an average annual rate of greater
than 10 percent.
Summary of Outlook Through 1970
Introduction of new and improved synthetic
materials and products is expected to continue
at a rapid pace. Processing innovations include
larger, faster, more continuous equipment, new
combinations of molding and forming tech
niques, and foamed-in-place and ultrasonic join
ing techniques. Although these and other ad
vances, such as adaptations of materials for
more efficient processing, reduce unit labor
requirements, the rapid growth of output is
expected to result in higher employment levels
over the next 5 years. A number of companies
offer retraining programs to meet the frequent
changes in materials, products, and processing.
Some collective bargaining agreements contain
specific provisions to ease adjustment to tech
nological change.
Outlook for Technology and Markets
Total 'production of synthetic materials (SIC
282) and plastics products (SIC 3079) is ex
pected to continue its high rate of growth.
Synthetic materials include plastics, resins, rub
ber, and manmade fibers except glass. Output
increased at an average annual rate of 11.1 per
cent between 1947 and 1957 and 13.6 percent
between 1957 and 1964, according to the Fed
eral Reserve Board Index of Industrial Pro
duction (FRB index). A continuation of the
1957-64 growth rate is expected through 1970.
Output of plastics and synthetic resins (SIC
2821) , the fastest growing segment of the in
dustry, increased at an average annual rate of
17.8 percent between 1957 and 1964 (FRB) and
is expected to continue to increase at a high
rate.
Output of synthetic rubber materials (SIC
2822) is expected to maintain its postwar rate
of growth of about 6 to 7 percent annually
(FR B ).
Manmade fibers production (SIC 2823, 2824),
another fast-growing segment, increased at an
average annual rate of 8.3 percent between 1947
and 1957 and 10.4 percent annually between
1957 and 1964 (F R B ). Output of manmade
172
Plastics markets are expanding. Building con
struction, packaging, electronics, agriculture,
and automobile manufacture are major indus
trial markets with aerospace and defense indus
tries increasing in importance. Appliance,
housewares, and toys are major consumer mar
kets. Toughness, insulating properties, light
weight, resistance to chemicals, and ease of
fabrication make plastics competitive with
metals, glass, wood, and other materials.
In construction, with a 1964 consumption of
2.3 billion pounds, plastics are used increasingly
in wall boards and gutters and for glazing (as
a glass substitute). Use of plastics in construc
tion is expected by trade sources to increase
substantially by 1970.
Plastics pipe is being used increasingly for
residential plumbing, gas distribution, process,
and drainage purposes. Over 27,000 miles of
plastic pipe have been installed in the past 10
years. Excellent performance in rural areas
induced the Farmers Home Administration to
finance more than 10,000 miles since 1960. Sales
of plastic pipe are expected by the Plastics Pipe
Institute to triple by 1970.
Plastics use for container packaging of milk
and produce has been expanding at a rate of
more than 20 percent annually.
Plastics consumption per automobile has
increased steadily from an average of 21 pounds
in 1960 to an estimated 35 pounds for 1965;
it is expected by industry sources to reach 45
to 50 pounds by 1970.
The aerospace industry, drawing on a wide
range of plastics to meet its requirements for
lightweight structural materials, thermal insu
lation, sealants and other specialized needs, con-
173
sumes almost 15 million pounds annually. De
mand by this industry for plastics is expected
to more than triple by 1970.
Continued improvements in engineering plas
tics (acetals, ABS, rigid vinyl and others) are
bringing additional uses in building structures,
boats, automotive bodies, chemical plant equip
ment, appliance housing, and in competition
with exotic metals for specialized aerospace
applications. The output of foamed cellular
plastics— about 300 million pounds in 1964—
used extensively in appliances, is expected to
double by 1970.
Plastics materials are being modified to obtain
specific properties. Synthetic materials are pro
duced by blending and “ cooking” the intermedi
ate synthetic materials derived from the
processing of natural gas, petroleum, other
hydrocarbons, air, water, salt and limestone.
For instance, ethylene gas, when subjected to
extreme heat and pressure, becomes a solid sub
stance— PE resin, which can then be molded,
extruded, calendered, laminated, woven, or
otherwise shaped into synthetic products. Res
ins, plastics, synthetic rubber, and synthetic
fibers differ more in terms of external charac
teristics of the final product and method of
manufacture than in basic ingredients.
By polymer or molecular engineering, oldertype resins are being improved and new resins
such as the commercially successful polypro
pylene are being produced. Polystyrenes are
now relatively light and heat stable, chemically
resistant, and have greater flexibility. One new
material, ionomers, has a melt strength which
makes possible very thin coatings (up to 0.2 of
a mil). In one new application— power cable
insulation— ionomer resins show corona (elec
trical) resistance 100 times greater than typical
electric grade PE resin.
Another new plastic can conduct electricity
and can be applied as a liquid to produce a con
ductive surface on a common insulator, and, if
desired, a printed circuit. Some progress has
been made in developing plastics that maintain
dimensional stability at a wide range of tem
peratures. Some plastics are tailored to give
more efficient processing, such as new resins
which make possible faster curing.
Polymers are often combined with other ma
terials to produce desirable composites. Rubber
blends (copolymers) have low-temperature
flexibility, improved impact strength, and can
be fabricated into many parts at a fraction of
the cost of rubber parts for the same use. A
combination of plastics and metal such as poly
propylene core and aluminum provides high
strength, low cost, ease of production, machinability, weldability, stability, and sound and vi
bration damping. Plastics wood composites via
atomic radiation promise new markets for plas
tics in furniture construction.
Plastics also are being combined with other
plastics to produce superior products such as
new leather-like materials composed of a ure
thane polymer base reinforced with polyester.
Such materials, now used in footwear, may have
great potential application in a number of
industrial uses.
Larger, faster, more continuous and more com
plex equipment is being used in plastics proc
essing. Sheet forming with simultaneous threelevel printing, automatic forming procedures,
and high-speed plastics welders with automatic
feed have been developed. New machines and
mold designs, applied to compression, injection
and blow molding, are making possible fully
automatic transfer molding techniques. A new
parts stacker makes molding a continuous auto
matic operation from the stock material through
forming, cutting, and stacking the finished
product. These machines and equipment are
making possible considerable labor savings
Operators oversee computer console which monitors chemical plant
conditions and types out operating log sheets.
174
EMPLOYMENT, OUTPUT AND CAPITAL EXPENDITURES
IN THE SYNTHETIC MATERIALS INDUSTRY
Thousands of Employees
200
EMPLOYMENT
All Em[ >loyees ^
I 50
\
\
\
I 00
- -
Produc tion Work e r s ^
50
_
____ ____1
____ ____1 ___ ____1
___ ____1
____ ___ 1
___
___ 1
___ ___ 1
____ ___ 1
Index (1957-59=100)
1947
Sources:
‘4 9
i
Ratio Scale
'51
'53
‘55
'57
'59
'61
'6 3
1965
Employment, Bureau of Labor Statistics; output, Federal Reserve Board; expenditures, Bureau of the Census.
175
through more efficient materials handling and
faster processing.
A new system for producing phenolics, op
erated from a central control panel by punched
cards, combines a central blending system, mix
ing and automatic weigh-feeding unit to give
a better quality product and reduction in hold
ing time. Very recently, a continuous process
for making acrylic sheet has been developed in
place of the traditional complicated batch proc
ess, reducing costs considerably.
Fabricating methods are being combined for
faster production and better mixing of mate
rials. For example, extrusion injection com
bines use of the extruder screw with injection
molding, enabling the colorant to be mixed in
the molding process. Injection and compres
sion molding are combined in a form of transfer
molding in which plastics material is melted
and transferred to the cavity for shaping. De
velopment work is underway to combine ther
moforming and blow molding into a single
machine operation to produce hollow objects,
and to combine injection molding and thermo
forming operations to produce cup-shaped ob
jects. In each case, conventional competing
techniques are joined into one piece of equip
ment to do a more efficient job than either can
do separately, with resulting economies in labor
and materials.
Newly designed, larger equipment is being
used to perform operations hitherto considered
not feasible, such as injection molding of very
large integrated plastics components of auto
mobiles (instrument clusters, grilles, body and
fender panels). Large multicavity machines
are being developed to make, simultaneously,
such matching pairs of parts as fenders. Rota
tional molding of powdered resin is being
adapted to produce large and complicated
shapes as appliances, housewares, and furniture
at much less cost than other methods. Screw
injection, introduced in 1961, provides improved
moldings from a wider range of plastics mate
rials and is replacing other types of injection
molding equipment.
Some new processes are based on properties of
resins and plastics rather than on machine de
velopment. Foamed-in-place techniques have
advanced the application of various plastics,
especially polyurethane. Flexible polyurethane
foams can be cast directly to shape in molds.
In the frothing method, the foam is pre
expanded prior to molding (rather than pour
ing liquid ingredients and allowing them to rise
into a foam ), offering the advantage of lower
overall foam density and lower pressure buildup.
Recent progress in use of ultrasonics makes
possible the joining of rigid plastic parts at
areas remote from where the ultrasonic sealing
tool is applied. Ultrasonic vibration waves are
transmitted through the structure, thereby re
ducing labor and assembly fixture costs.
Other new plastics process techniques are
expansion molding, using the pressure of ex
panding propellant rather than external pres
sure; production of foam film by extrusion for
further fabrication; and a fluidized-bed process
for coating metals.
Newly formulated synthetic rubbers are in
creasing in importance. The advantageous prop
erties of some of the recently developed syn
thetic rubbers are resulting in their increasing
industrial use as adhesives, insulated wire, belt
ing, hose, rolls and tubing, and increasing con
sumer use as flooring, footwear, household
goods, toys, and in tire accessories and repair
materials. As a proportion of total new rubber
consumption (excluding reclaimed rubber),
synthetic rubber has risen from 51.3 percent
to 75.1 percent between 1954 and 1964. SBR
(styrene-butadiene rubber) continues to be the
predominant synthetic rubber, accounting for
about 70 percent of total synthetic consumption
in 1965.
The stereo, or stereoscopic, rubbers (poly
butadiene, polyisoprene, and ethylene-propylene
terpolymer) are estimated to be about 13 per
cent of total synthetic rubber consumption in
1965 and may be as much as 28 percent in 1975
compared to 54 percent for SBR. The new
stereos (in the pilot plant stage in 1960) have
already started to replace SBR in some applica
tions. For example, PBR (polybutadiene rub
ber) is increasingly used in tire production;
and EPT (ethylene-propylene terpolymer), in
troduced in 1964, is believed to have a poten
tially large market because of resilience and
rebound nearly equal to natural rubber, and
better chemical and aging properties. EPT’s
176
excellent insulating properties make it par
ticularly attractive to the wire and cable
industry.
Intensive research and development have re
sulted in a synthetic equivalent of natural rub
ber (cis-l,4-polyisopyrene) which is now in
commercial production. Processing techniques
are less complicated than for natural rubber,
and greater product uniformity is obtained be
cause of precise quality-controlled chemical
processes.
Faster new techniques and equipment, many
from plastics manufacturing, are being used in
synthetic rubber processing. The introduction
of new molding techniques has cut labor re
quirements, reduced scrap, and decreased the
proportion of rejects. Injection molding ma
chines of the automatic transfer type make
possible fast curing and accurate heat control.
Machines providing continuous mixing or
warm-up, with resulting reductions in capital
and labor requirements, are beginning to be
used. Major advances in calendering are being
used by rubber manufacturers, with resulting
improved accuracy and lower cost output. A
new technique in stock preparation using syn
thetic materials premixed with carbon has de
creased processing time for synthetic rubber
production.
New manmade fibers are being developed and
established fibers given new properties. Special
properties and end-uses for manmade fibers are
brought about by chemical modification and
coatings, or by chemical finishes, for durability,
strength, and dyeability. Manmade fibers offer
such advantageous properties as improved ther
mal insulation, control of luster, resistance to
wrinkling, and “ stretchability.” The market
for polyester has been improved by the use of
polyester in “ durable press” (no ironing) ap
parel fabrics. Space technology is making use
of synthetics because^of packageability, ease
of handling, and light weight; balloons for
deceleration and reentry vehicles are an ex
ample. Synthetic fibers are being used with
rubber and plastics to improve the strength
and resistance of conveyor belts to temperature
changes. Specialty fibers and filaments have
been developed for industrial uses, e.g., low
adhesion, plastic-coated glass fibers, and acrylic
fiber for cryogenic applications. New rayon
fibers (high wet modulus) are expected to im
prove their competitive position relative to
noncellulosics.
Process control computers are being more
widely used. First introduced in 1960, there
were about 30 digital-process control computers
(including several closed-loop systems) in
stalled or being installed for the production of
plastics and other synthetic materials as of mid1964. At least four of these computers were
used in the production of synthetic rubber and
the blending of rubber compounds. Five com
puters were used for process control studies or
in a pilot operation.
Capital expenditures are increasing. Expendi
tures on new plant and equipment for synthetic
materials (SIC 282) reached $476 million in
1964, up from $291.2 million in 1958. Capital
expenditures by the plastics products industry
(SIC 3079) has been steadily increasing from
$77.2 million in 1958 to $182.6 million in 1964.
Rising levels of demand, especially for poly
ethylene (P E ), polyvinylchloride (PV C ), poly
styrene, phenolics, and epoxies, are stimulat
ing plant expansions.
Research and development activities are exten
sive. Funds for R&D in the chemical industry
amounted to $1.3 billion in 1963 (National Sci
ence Foundation) and are expected to rise sub
stantially over the next 5 years. Trade sources
estimate that about 25 percent of the chemical
research funds are spent in plastics science.
Industrial research on polymer manufacturing
processes and attempts to improve properties
of polymer, for example through radiation, are
being increased. Emphasis is being placed on
stronger resins as well as interphase properties,
which are weak points in composite structures.
In synthetic rubber research, stereo rubbers
are stressed. The effort to produce a butadiene
or isoprene polymer of the most desirable char
acteristics in terms of green strength, tack,
processability, tensile strength, and dynamic
properties continues to be a major subject of
research. Other research is directed to the
mechanism of the action of chemicals as ac
177
celerators, antioxidants, and antiozonants for
synthetic rubbers.
Manmade fibers research is emphasizing im
provement of existing fibers for special prop
erties and uses rather than the development of
totally new fibers. The U.S. Air Force is under
taking research into forming useful new fibers
from nonmetallic materials possessing high
strength, high elastic modulus, and superior
high temperature performance properties for
use in aerospace systems.
Manpower Trends and Outlook
Output per man-hour in the manmade fiber in
dustry has been rising moderately. Productivity
indexes are available only for manmade fibers.
Between 1957-63, output per all employee man
hour increased at an average annual rate of 3.5
percent and output per production worker man
hour increased at 3.9 percent (compound inter
est computation).
Employment is expected to increase. Total em
ployment for the synthetic materials industry
(SIC 282) amounted to 143,000 in 1958, rose
at an average annual rate of 4.2 percent to
183,100 in 1964 or a total of 28 percent, and is
expected to continue to increase into the 1970’s.
During the 1958-64 period, employment in
creased 21 percent in plastics, 39 percent in
synthetic fibers, and 33 percent in synthetic
rubbers.
In the plastics products industry (SIC 3079),
employment increased from 101,200 in 1958 to
170,900 in 1964, a total of 69 percent, or at an
average annual rate of 9.1 percent. Employ
ment in plastics products is expected to continue
rising at rates higher than those for synthetic
materials.
Synthetic M aterials
Average annual percent change
All employees
1958-64 ______________________________
Production workers
1958-64 __________________________________
Output
1947-57 ____________________________
1957-64 ___________________________________
Proportion of production workers has remained
virtually the same since 1958. For the period
1958 to 1964, the proportion of production
workers to total employment in the synthetic
materials industry changed only slightly, from
67.6 percent to 67.2 percent. This stability in
the production-worker to all-employee ratio was
common to all the synthetic materials subcate
gories. The high proportion of nonproduction
workers reflects the great number of research
personnel. In the plastics products industry,
however, production workers were 79 percent
of all employees, the same ratio as in 1958.
More complex instrumentation, equipment, and
operations are requiring higher skill levels. For
example, skills needed by operators are getting
closer to those of technicians. There is a con
tinuing need to train laboratory aides and tech
nicians to perform tests, procedures, and other
tasks so that research scientists and engineering
staff personnel may devote their energies to
more important scientific work and for coordi
nation of all aspects of a project. In recognition
of the need for chemical and instrument tech
nicians in research and production, the U.S.
Office of Education has prepared 2-year posthigh school curricula.
A number of companies have retraining pro
grams. These companies provide extensive re
training in classroom, laboratory, or on the job.
One company conducted comprehensive retrain
ing for operations in a new plant replacing an
obsolescent plant, thereby holding to a mini
mum the number of workers who were laid off
or retired. At another company, under a col
lective bargaining agreement, workers dis
placed to lower paying jobs by technological
change retain their previous pay rates for 185
days, and workers whose jobs are eliminated
are given retraining and 3 months’ work in a
labor pool. At one company, reimbursement
for schooling for any chosen trade or occupation
is provided for those to be terminated.
4.2
4.1
11.1
13.6
Some contracts contain provisions concerning
procedures to be followed in event of techno
logical displacements. Among the contract
measures included are provisions for early
warning; discussion and consultation; agree
178
ment between union and management on the
date and time period of introduction of auto
matic processes; careful scheduling of the
change during the various stages of introduc
tion; retention of displaced employees where
possible on the basis of 'skill, without regard
to seniority; and transfers and benefits for dis
placed employees, based on seniority.
Selected References
“ A Technological Review of the Rubber Industry,” Rubber Age, December 1964,
pp. 389-396.
Burton, W. H. “ New Materials in the Chemical Industry,” Industrial Research,
November 1964, pp. 50-58.
Chemical Technology, A Suggested 2-year Post High School Curriculum, U.S.
Department of Health, Education, and Welfare, 1964.
D’lanni, J. D. “ Metamorphosis in Rubber,” Industrial Research, February 1964,
pp. 55-63.
Dubois, J. H. “ The Sophisticated Plastics— How They Will Affect Industry,”
Plastics World, May 1965, pp. 30-33.
Indexes of Output per Man-Hour, Man-made Fibers Industry, 1957-1963 (BLS,
October 1965).
“ New Chemicals and Materials,” Industrial Research, September 1965, pp. 74 ff.
“ Plastics Engineering,” Modern Plastics, March 1964, pp. 111-118.
“ Plastics 1964: Soaring Growth, Dynamic Complexity, New Directions,” Modern
Plastics, January 1965, pp. 76 ff.
Popper, H. “ CPI Manpower,” Chemical Engineering October 12, 1964, pp. 189-204.
Wage Chronology: American Viscose (BLS Report 277, September 1964).
Workman, R. E. “ The Rubber Industry, A Ten-Year Forecast,” Rubber Age, August
1965, pp. 49-54.
The Petroleum Refining Industry (SIC 2 9 1 )
of more crude oil to lighter hydrocarbons,
which, along with natural gas and gas liquids,
form the basis for petrochemical production.
The total output of petrochemicals rose at an
average annual rate of about 10 percent, from
18 billion pounds in 1956 to 35 billion pounds in
1963, and is expected, according to projections
by Resources for the Future, Inc., to continue to
rise from 6 to 11 percent yearly through 1970,
to as much as 71 billion pounds.
Summary o f Outlook Through 197 0
Increases in output per man-hour are ex
pected as expenditures for new plant and
equipment and for research and development in
crease. Computer control, improved instru
mentation, and new processing- techniques are
being adopted to obtain operating economies
and product quality improvements, especially
by the larger producing units in the industry.
Lower employment levels are expected, espe
cially for production workers, continuing the
declines which began in the 1950’s. Reductions
in unit labor requirements are not expected to
be offset by anticipated increases in total out
put. Employment decline in older plants, how
ever, may be partly offset by an increase in jobs
in the growing petrochemical sector of the in
dustry. Technological changes often require
extensive retraining of production workers, as
well as additional training for technical work
ers. Measures providing early retirement and
severance pay have been adopted.
New refinery processes are concentrated on im
proving product quality, raw material utiliza
tion, and efficiency of operation. Advances in
processing, utilizing longer lasting and more
stable catalysts, and more nearly optimized op
eration through closer control, result in signifi
cant increases in output of the most valuable
products, such as higher grade liquid products,
from each barrel of crude petroleum. Recent
developments in the hydrocracking process re
sult in upgrading heavy bottom oils to yield
substantially more higher value gasoline and
distillate products. Hydrocracking capacity,
introduced in 1960 is expected, according to
estimates made by the Oil and Gas Journal, to
grow 900 percent through 1970, replacing as
much as 10 percent of the industry’s catalytic
cracking capacity. The Bureau of Mines esti
mates that extension of these facilities could
ultimately result in significant reductions in
crude oil requirements.
Outlook for Technology and Markets
Production is expected to continue to rise
slowly. Through 1970, output is expected to
increase. Output grew at a rate of about 2 per
cent annually during 1957-63. This was sub
stantially lower than the average annual rate
of 5 percent during 1947-57, when railroad
dieselization, farm mechanization, substitution
of oil and gas for coal in home heating, and ex
panding automobile and aviation markets were
sources of increased demand. According to pro
jections of the output of petroleum products
prepared by Resources for the Future, Inc.,
the annual rate of growth from 1960 to 1970
may range between 1.5 and 3.9 percent. Ac
cording to U.S. Bureau of Mines estimates,
total U.S. consumption of petroleum products
rose about 3.4 percent yearly between 1953 and
1963 and is expected to rise at about the same
rate through 1970.
Computers are being used increasingly for
process control. According to annual surveys
by the Oil and Gas Journal, about 100 digital
control computers were in operation or planned
at the end of 1964, compared with about 60 at
the end of 1963. Of the 1964 total, 35 were for
petroleum refining compared with 25 a year
earlier, and 65 in petrochemical processing com
pared with 35 in 1963. The industry began us
ing process control computers in 1959, with
most of the installations made since 1962. This
development follows the increasing use of in
strumentation, which accounts for the high
degree of automatic operation characteristic of
oil refineries.
The production of petrochemicals is expected to
increase substantially. Growing demand for
synthetic materials is resulting in the diversion
179
180
Computers are being introduced to correlate
large volumes of data about processing vari
ables such as temperature, flow, and pressure.
In conventional plants, instruments sense, meas
ure, and record data, and operators manually
make the calculations and value adjustments
necessary for controlling processing. Most of
the computers now in use receive data in the
form of instrument signals, perform calcula
tions, and turn out operating instructions, but
the operator still makes the indicated adjust
ments. A few more advanced installations fea
ture closed-loop or unattended control, the com
puter giving signals that activate mechanisms
to position control valves, but complete refinery
control by computer is not yet considered en
tirely satisfactory.
Direct benefits of computer process control
include increased production, reduced operating
costs, and improved quality control. In some
cases, the savings have been found to amount to
$100,000 to $500,000 annually per installation.
Better technical and operating data, reduced
inventory requirements, and improved plant
safety have provided additional though intangi
ble savings. To a certain extent, computers per
mit complex calculations that would otherwise
not be made because of high cost. Since the net
result is more output with about the same work
force, productivity is increased.
By 1975, close to half of all refineries will
probably have some degree of computer process
control. The rate of adoption may be retarded
by the need to train technicians, the need for
more accurate and reliable instrumentation, and
problems in adapting certain types of processes
to computerization. The most successful appli
cations are expected in new plants. The rate of
introduction, therefore, may be quickened over
the next few years with the expected increase in
construction of new and larger plants.
The use of radioisotopes is increasing. Radio
isotopes are being used increasingly in gaging
and research to improve accuracy of measure
ment and quality control. Radiography, using
radioisotopes, permits on-stream inspection of
refining units, increasing operating reliability.
Radioisotope tracing techniques and radiation
are also being applied to the development of im
proved catalysts and are being introduced as a
more efficient and less complicated means of
processing petrochemicals.
Research and development activities are in
creasing. Expenditures for R&D by petroleum
companies, according to the National Science
Foundation, amounted to $182 million in 1956
and rose to $315 million in 1963. According to
McGraw-Hill, R&D expenditures planned by
the industry are expected to increase about 70
percent by 1974. The industry’s R&D expendi
tures as a percent of net sales rose from 0.8 per
cent in 1957 to 1 percent in 1961— a relatively
high ratio for a nondefense industry. The num
ber of R&D scientists and engineers rose from
6,900 to 9,000 in 1956-63.
Changes in demand have led to increased
spending on R&D related to product develop
ment. Chemical research by the petroleum in
dustry, according to U.S. Department of the In
terior estimates, rose from $51 million in 1957
to $72 million in 1964. According to industry
sources, there is a promising future demand for
petroleum-derived synthetic organic chemicals,
food supplements and nutrients, as well as agri
cultural chemicals, including fertilizer manu
facture.
Investment in new plant and equipment is in
creasing sharply. Expenditures for new plant
and equipment rose from $316 million in 1947
to a peak of around $877 million in 1957, and
declined to about $384 million in 1964. How
ever, expenditures are expected to rise more
than 100 percent in 1965 over 1964, both for
refining and for petrochemical plant and equip
ment. Over 80 percent of the industry’s capi
tal spending through 1967 will be for replace
ment and modernization, according to estimates
by McGraw-Hill.
Refineries are becoming increasingly larger,
more compact and complex. Between 1947 and
1963, the number of operating refineries de
creased from 361 to 282. The average size of
operating refineries increased by 144 percent,
from 14,700 barrels a day throughput capacity
to 35,700 barrels a day. As old plants are shut
down and new, larger plants built, these trends
will continue.
181
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN PETROLEUM REFINING
Thousands of Employees
200
1
EMPLO YMENT
^ All Em ployees
I5 0
—
—
—
. ^
I 00
'— — —
Product ion Work ers 4
50
7
ol
.
___ 1
____
1
1
1
1
i
____ 1 __
_
Index (1957-59=100)
i
1
Ratio Scale
___
____ ____l ___I __ l ___1 __ l __ I ___ l ___ I l ___
_
_ _
_ _ _
_
___ _
1__J___ L—_ | !____ ___ I
5 0
1947
49
51
53
55
57
59
61
63
.......... " Data for 1948 not available
Sources:
Employment and expenditures, Bureau of the Census; output and output per man-hour,
Bureau of Labor Statistics.
1965
182
Substantial economies are achieved by in
creasing- plant size. For example, the consolida
tion of three catalytic cracking units at one
refinery, each with a capacity of 30,000 barrels
a day, into one unit of 90,000 barrels a day re
sulted in an increase of three times the capacity
per employee. One factor in the building of
larger refineries is the availability of more du
rable components and corrosive-resistant met
als which reduce the frequency of costly shut
downs.
Manpower Trends and Adjustments
Output per man-hour will probably continue to
increase at the industry's high postwar rate of
growth— 5 to 6 percent a year. Output per all
employee man-hour rose at an average annual
rate of 6.6 percent from 1957-63, compared
with 5 percent during 1947-57. Output per
production worker man-hour increased at a
faster rate, 7 percent yearly from 1957 to 1963,
compared with an average annual rate of
5.7 percent in 1947-57.
Average annual percent change
All employees
0.5
1947-57 __________________________________
1957-64 ___________________________________ - 4 . 2
Production workers
1947-57 ___________________________________
.1
1957-64 ___________________________________ - 4 . 5
Output
1947-57 __________________________________
5.0
1957-63 __________________________________
2.0
Output per all-employee man-hour
1947-57 __________________________________
5.0
1957-63 __________________________________
6.6
Output per production worker man-hour
1947-57 _________________________________
5.7
1957-63 _________________________________
7.0
by the use of computers in engineering, auto
matic welding, and new construction techniques.
Employment is expected to continue the decline
which began in the 1950's, but probably at a
slower rate. Total employment, according to
the Bureau of the Census, which amounted to
145,800 in 1947 rose to 153,900 in 1957, and
then declined to 113,900 in 1964. Production
worker employment declined slightly from 113,800 in 1947 to 112,500 in 1957, but registered a
considerable decline to 81,700 in 1964. Oppor
tunities may be enlarged in the petrochemical
sector of the industry, particularly in the Gulf
States. At the same time, labor may be dis
placed at older, obsolete plants or units which
become too costly to operate.
Nature of operator's job is undergoing change.
In older plants, operators work mainly out of
doors, adjusting valves and taking readings. In
modernized units, operators monitor instru
ments displayed on control panels in office-like
rooms and make adjustments by pushing but
tons or levers. With integration of refinery
units and greater centralization, operators in
modernized plants often are required to have
some knowledge of processes in other parts of
the plant in addition to those in their own unit.
With computer control, the operator may need
to do less recording and calculating, although he
continues to have responsibility for detecting
or anticipating difficulty and making correc
tions as quickly as possible. Employers in mod
ernized plants often require new employees to
be high school graduates and to have some apti
tude in mathematics and science.
While total employment is expected to continue
its decline, production worker jobs are expected
to decline more rapidly. Production worker em
ployment as a percent of total employment fell
from 78 percent in 1947 to 72 percent in 1964.
Between 1950 and 1960, the number of mechan
ics, repairmen, pipefitters, and foremen in
creased, while the number of employees in serv
ice, semiskilled, and laborer occupations
declined substantially. Skilled craftsmen in
maintenance work may be increasingly affected
Unions seek limitations on subcontracting of
maintenance work. Some companies believe
that maintenance work for the more complex
new equipment can be performed more skill
fully by outside specialists than by refinery em
ployees. Also, with the increasing size and re
liability and improved metallurgy, it becomes
possible to reduce frequency of shutdowns for
maintenance. Refinery turn-arounds (periodic
general repair, inspection and cleaning of about
2 to 4 weeks’ duration) that formerly occurred
183
about once a year now are necessary only every
2 to 3 years. Technical advances have created a
need for a skilled, well-trained regular main
tenance force that makes up a large proportion
of refinery employment.
Unions have responded by pressure for
clauses in collective bargaining agreements that
would limit, in various ways, the use of subcon
tracting. Of 23 major collective bargaining
agreements (covering 1,000 or more workers)
in 1959, in the petroleum and related products
industry, 12 contained provisions limiting use of
subcontracting. By 1965, of 21 major contracts,
14 had subcontracting provisions. The issue of
subcontracting in this industry has from time
to time generated jurisdictional problems be
tween industrial and building trades unions.
Retraining programs are increasingly impor
tant. Employees on the job are generally re
trained for new technology. Training for
process integration which requires greater
knowledge of the overall refining process and of
instrumentation, in some cases, involves exten
sive classroom and on-the-job retraining. In one
plant undergoing modernization, training for
supervisors was conducted 6 months before
startup, and for operators and helpers, 3
months, before. Another company was able to
retrain its employees in a 6-week program.
Severance pay plans are receiving more atten
tion. Of 18 major collective bargaining agree
ments studied in the petroleum refining and
related industries, 6 (with nearly half of em
ployment covered by the study) had in 1963
severance pay and layoff benefit plans. A 1957
study of agreements in effect in 1955 and the
first half of 1956 showed that only 2 out of 27
major contracts contained severance pay plans.
For eligible workers, these plans provide cash
benefits generally based on length of service.
Special early retirement programs have been
worked out in some cases. Under special short
term provisions, workers at some modernized
refineries have been encouraged to retire early
by being paid larger allowances than the ac
tuarial equivalent of normal benefits under
regular retirement programs. This stimulus to
attrition is intended to reduce the impact of
employment reduction on younger employees.
Selected References
Technological Developments
An Appraisal of the Petroleum Industry of the United States, U.S. Department of
the Interior, January 1965.
“ Computer Control in the Oil Industry,” The Oil and Gas Journal, Oct. 26, 1964,
pp. 89-119.
“ Computer Control Makes Solid Gains in Processing,” The Oil and Gas Journal,
October 1962, pp. 84-101.
Lawrence, C. J. “ Signal Jumps Gasoline Yield to 90 Percent at Bakersfield,” The
Oil and Gas Journal, June 17, 1963, pp. 46-48.
Lawrence, J. H., Manowitz, B., and Loeb, B. S. Radioisotopes and Radiation,
McGraw-Hill, New York, 1964.
McKenna, G. E., Owen, C. H., and Hettick, G. R. “ Heavy Oil Catalytic Cracking Key
to Refinery Modernization,” The Oil and Gas Journal May 18, 1964, pp. 106-107.
Proceedings of the 29th Mid-Year Meeting of the American Petroleum Institute’s
Division of Refining, St. Louis, Mo., May 11-13, 1964.
184
Selected R eferences— Continued
Manpower Trends and Adjustments
A Case Study of a Modernized Petroleum Refinery (BLS Report 120, 1956).
Collective Bargaining Clauses: Dismissal Pay (BLS Bulletin 1216, 1 95 7), p. 2.
Industrial Retraining Programs for Technological Change (BLS Bulletin 1368,
1 9 6 3 ), pp. 7 -1 2 .
Petroleum and Gas Industries Manpower Requirements, 1962, Washington, D.C.,
National Petroleum Council, 1963.
Recent Collective Bargaining and Technological Change (BLS Report 266, 196 4),
pp. 1 3-14 .
Subcontracting Clauses in Major Collective Bargaining Agreements (BLS Bulletin
1304, 1 96 1).
The Tires and Inner Tubes Industry (SIC 3 0 1 )
percent of all new rubber consumed for tires
and related products; by 1964, it accounted for
74 percent. The outlook, according to Resources
for the Future, Inc., is for a continuing rise to as
high as 77 percent by 1970. Although expanded
research on natural rubber may improve its
competitive position, synthetic rubber will con
tinue to be favored over natural rubber because
of its greater reliability of supply, consistent
quality, higher curing temperature tolerance,
and the ability to meet a variety of desired
technical specifications. However, natural rub
ber, because of its relatively greater resistance
to heat build-up and the inadequate supply of
some synthetics, is likely to remain the major
material for large truck and off-the-road ve
hicle tires.
Summary of Outlook Through 1970
Production is expected to continue to rise to
new highs through 1970; the level of output
will depend largely on motor vehicle production.
Anticipated large outlays for new plant and
equipment and continuing technological changes
will increase output per man-hour, probably
at the 1957-63 rate. Major technological ad
vances being introduced include more mecha
nized and automatic materials-handling tech
niques ; faster, larger capacity machinery; more
extensive instrumentation and centralized ma
chine control; and process integration.
Future employment levels probably will re
main fairly stable; increases in output per man
hour enabling the industry to produce the in
creased output with about the same level of
employment. Job requirements are expected to
continue to emphasize a shift from manual
skills to machine tending and console moni
toring.
New synthetic rubbers may improve tire per
formance and reduce material costs. Styrenebutadiene (SBR), which accounts for about
four-fifths of synthetic tire rubber consump
tion, is expected to be displaced significantly
over the next several years by a new family of
polymers, the stereospecifics. This group, which
includes polybutadiene, polyisoprene, and
ethylene-propylene, represented only about a
Outlook for Technology and Markets
Output will continue to reach higher levels. Tire
and tube production (BLS index) rose at an
annual rate of 4.1 percent from 1957 to 1963,
substantially exceeding the rate of growth of 1
percent from 1947 to 1957. Tire and tube pro
duction in the next 5 years will probably grow at
rates faster than in the recent past, but the
levels of output will depend to a large degree on
the growth rate of motor vehicle production.
Synthetic rubber will continue to take a larger
share of the automobile tire market. In com
parison to natural rubber, synthetic rubber
eliminates several preparatory manufacturing
operations, reducing unit labor requirements.
Masticating, for example, a mechanical process
which conditions the rubber, is unnecessary for
synthetic rubber, since it arrives ready for
Banbury processing. Man-hours can also be
reduced by shifting the black-masterbatching
process from the tire plant to the chemical plant
where the synthetic rubber is produced.
In 1947, synthetic rubber accounted for 47
Machine operator controls automatic curing presses used for
vulcanization of tires.
185
186
seventh of synthetic tire rubber in 1964; the
outlook is for a rise to more than a third by
1975.
Greater resistance to heat build-up, abrasion,
and atmospheric deterioration are outstanding
characteristics of these new synthetics as com
pared to SBR. Also, in the long run, some may
offer considerable cost reductions as a result of
their potentially lower price.
Improved cord materials may result in better
tire quality. Nylon accounted for 49 percent
and rayon for 45 percent of total tire cord ma
terial in 1964. Rayon’s dominant position was
reversed for the first time in 1963, culminating
nylon’s continuous inroads over the past 10
years. While almost all original equipment
tires are made of rayon cord, about three-quar
ters of the replacement tire market— twice the
size of the original tire market and still grow
ing— utilizes nylon. Car manufacturers have
resisted nylon not only because of the higher
price, but also because, after standing for some
time, nylon tires tend to become slightly flat.
Intensive research is now underway to improve
both rayon and nylon properties.
Recent introduction of new methods of tire
construction, requiring more strength and ri
gidity in cords, may result in the use of new
materials, such as fiberglass and wire. Poly
ester, now accounting for only 3 percent of cord
production, also may become increasingly im
portant in the next 5 years.
Use of radial ply tires may gain considerable
momentum by 1970. Commonly used in Europe
for trucks and automobiles, radial ply tires
(plies placed straight across the width of a
tire instead of the conventional criss-cross
placement) have been available for several
years in the United States, for trucks and offthe-road vehicles only. They are expected to be
available for selected passenger cars in 1966.
Industry experts forecast that from 10 to 20
percent of original equipment tires will be
radial ply by 1970.
Compared to conventionl ply construction,
flexing of the tread is considerably reduced in
radial ply tires, resulting in lower heat build-up
and less tread wear. However, this type of tire
results in a relatively harder ride, and may ini
tially meet consumer resistance. Developments
in tire cord material and auto suspension may
alleviate this disadvantage. Radial ply tires are
more expensive to manufacture because of addi
tional production equipment and increased unit
man-hour requirements. New types of equip
ment, however, are being developed to simplify
the production process and reduce costs.
Continuing trend toward few er ply tires is ex
pected. The two-ply tire, marketed for the first
time in 1961, as a result of the development of
new high strength cord materials, has already
replaced the four-ply tire as standard on more
than 95 percent of new automobiles and is be
ginning to make inroads into the replacement
tire market. The present 10-ply truck tire—
which was reduced from 12-ply— is expected to
be further decreased to 4-ply in the near future.
Experts claim that tires with fewer, stronger
plies build up less heat with no less strength
than tires with more plies. Because fewer plies
are processed, production costs and unit man
hour requirements are somewhat lower.
Recent changes in tire design may affect unit
man-hour requirements. New product develop
ments, such as tread studs for better traction
and rounded shoulders for safer cornering, have
recently been marketed with prospects of gain
ing wide acceptance. Also, passenger-car snow
tires, while not new, have almost tripled in out
put from 1957 to 1964.
Some designs requiring more labor per unit
than conventional tires are increasing in impor
tance. For example, production of white sidewall tires, which almost doubled from 1957 to
1964, requires about 20 percent more man-hours
per tire. In 1964, white sidewalls made up more
than 60 percent of all passenger-car tires, and
the outlook is for a continuation of this upward
trend.
Tubeless passenger-car tires, which began
to replace the tube-type tire in 1955, accounted
for 92 percent of total passenger-car tires in
1964, and the outlook is for even wider use. De
spite the decline of the tube-type passenger-car
tire, output of tubes for passenger-car tires has
been fairly stable in recent years. Since unit
labor requirements for a tubeless tire are prob
ably about the same as those for a tube-type
187
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN TIRES AND INNER TUBES
Thousands of Employees
130
1 2 0 _ EMPLOYMENT
1I0 \
100
90
\
\
V
__All
\
80
——
1
N
"------
70
60
0
imployee s
- — — -—
Production Workers X
i
_ _ _ _
____! _ _ _ _ ! _ _ 1 _ _ !
_ _ _ _ _ _ _ _ _____ _ i_ _ 1
_ _ 1
_ _ ____
,
_ _ i____i____!_ _ 5
_ _
Index (1957-59=100)
Ratio Scale
50
-
OUTPUT AND OUTPUT PER MAN-HOUR
EXPENDITURES FOR NEW PUNT
AND EQUIPMENT
M
•x
>*
*
Millions of Dollars
150
i k
x V
^
Outp Lit per Mian-Hour
Proc uction ^ orkers
60
50
1947
•
Sources:
i
1
'4 9
■
'51
J_ L
_
i
'5 3
‘55
'5 7
'5 9
'61
'6 3
1965
Data for 1948 not available
Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
188
plus tube, employment effects resulting from
this continuing shift are likely to be minimal.
Improved machinery is reducing process time
and man-hour requirements. Automatic load
ing and unloading, and faster, larger capacity
machinery are being used increasingly in almost
all phases of production. For example, in the
major operation of curing, automatic loading
and unloading of the press, and adoption of
molds which absorb heat more rapidly, reduce
unit man-hour requirements substantially and
curing time by about a fourth.
Labor savings are also being achieved by the
continuing introduction of equipment which
combines previously separate operations. In
passenger-tire building, for example, the new
est mills utilize a highly automated one-station
operation with one skilled operator for combin
ing the basic tire parts, instead of the conven
tional method of processing through many sep
arate machine and manual operations. Another
example is a continuous finishing mixer which
can eliminate 3 of the 4 warm-up mills currently
utilized in a typical tire compound extrusion
process. This development is expected to reduce
operating costs for labor, power, and mainte
nance, but may be economically feasible only for
large volume production.
Improved materials-handling techniques are
steadily replacing manual conveyance. Inte
grated conveyor systems, specialized pallets,
bulk handling, and pelletization of stock are
some of the techniques now reducing manual
handling and promoting continuous flow line
production. Pelletization, which permits both
raw material and mixed stock to be conveyed
more easily, is not new to the industry, but is
becoming more important as mechanized han
dling increases. For example, carbon black pre
pared as pellets, rather than in powder form,
facilitates bulk shipment by railroad cars, and
complete conveyorized handling from car to
storage tank to the mixing operation, as needed.
This method of mechanized handling replaces
trucking of bags of carbon black and manual
loading into the mixer, reducing unit labor re
quirements and the hazard of air pollution.
More advanced instrumentation is rapidly de
veloping in all areas of tire manufacture. In
calendering (applying rubber compound to fab
ric cords), for example, radioisotope gages with
feedback controls are now generally used
throughout the industry to measure and control
the quantity of rubber applied. Since the flow
rate can be automatically set and held within
extremely close tolerance limits, savings in ma
terial costs and improvement in quality can be
substantial.
Centralized control of equipment and instru
mentation is becoming more important as a
means of increasing operational efficiency and
maintaining quality control. For example, cen
tralized control is used from raw material stor
age through mixing, and includes control of
weighing, loading, unloading, temperature, and
time. Such control systems, however, are lim
ited to the larger modernized plants— the
smaller, older mills still maintain largely manu
ally controlled compounding and mixing pro
cedures.
Computers are being applied increasingly to a
variety of data-processing functions. Computer
centers, servicing several tire plants in one
area, are maintained by all major rubber com
panies for a wide range of routine data-process
ing functions such as payroll, accounting, bill
ing, etc. In addition, these computer centers
are linked to suppliers, tire plants, and larger
customers, enabling the rapid collection, coordi
nation, and analyses of data, ranging from data
on raw material stock to information on market
ing outlets. Use of this computer network
reduces raw material and finished product in
ventories, permits automatic customer order
receipt, enables more efficient production plan
ning, and results in faster order filling.
Utilization of computers for scientific and
engineering applications is another expanding
function. Computers are being used increas
ingly, for example, for process optimization,
including optimization of compounding formu
las and of curing variables such as time and
temperature. Aimed at quality improvement
with minimum cost, such computer functions
will grow in importance.
189
Plant and equipment expenditures will continue
to fluctuate at high levels. Outlays for new
plant and equipment rose to a postwar peak of
$146.1 million in 1964, considerably above the
level of the 1950’s. Current indications point
to continued high investments for both moderni
zation and new plant capacity.
Manpower Trends and Outlook
Productivity is expected to continue to increase
at the recent high annual rate. Output per all
employee man-hour increased at an average an
nual rate of 6.5 percent between 1957 and 1963,
which was more than double the annual rate of
3 percent between 1947 and 1957. The annual
rate of growth of output per production worker
man-hour has been rising slightly faster— 6.6
percent between 1957 and 1963 and 3.3 percent
between 1947 and 1957. The outlook for the
next 5 years is for about the same annual rate
of growth as in the 1957 to 1963 period.
Employment probably will remain stable over
the next 5 years. Total employment (Census
data) was 85,800 in 1964 and declined at an
annual rate of 1.7 percent from 1957 to 1964,
about the same rate of decline as that from
1947 to 1957. In the most recent years, how
ever, employment has been relatively stable
with an annual decline of only 0.2 percent from
1961 to 1964. The outlook is for a continuation
of this stability in employment over the next 5
years, as lower unit labor requirements permit
Average annual percent change
All employees
1947-57 ___________________________________
1957-64
Production workers
1947-57 __________________________________
1957-64 ___________________________________
Output
1947-57 __________________________________
1957-63 __________________________________
Output per all-employee man-hour
1947-57 __________________________________
1957-63 __________________________________
Output per production worker man-hour
1947-57 __________________________________
1957-63 __________________________________
— 1.8
-1 .7
-2 .1
-2 .1
1.0
4.1
3.0
6.5
3.3
6.6
increased production with little change in em
ployment.
Production worker employment will show little
if any change. Production workers constituted
77 percent of all employees during the period
1961-64, declining from 79 percent in 1957 and
81 percent in 1947. From 1957 to 1964, produc
tion workers declined 2.1 percent annually, the
same rate of decline as that from 1947 to 1957.
During the more recent period 1961-64, produc
tion worker employment was relatively stable
and will probably remain stable through 1970.
The number of machine maintenance jobs is
not expected to change. Improved, self-lubri
cating, larger capacity machinery actually re
quires fewer maintenance men than do older,
smaller capacity machines. An increasing need
will develop, however, for maintenance men
with a knowledge of electronics, hydraulics, and
electrical control whose primary function will
be to determine the cause of a malfunction,
rather than to repair it. Although unskilled
materials-handling jobs are disappearing in
newer tire plants, multiple floor construction in
older mills still requires many laborers for
major trucking and hauling jobs.
Nonproduction ivorker employment probably
will show little change. From 1957 to 1964, the
number of nonproduction workers declined 0.6
percent annually compared with 0.7 percent
from 1947 to 1957. Although, from 1962 to
1964, employment of nonproduction workers
increased, it will probably show little, if any,
further change by 1970.
More extensive use of computers probably
will result in a decrease in employment of cleri
cal personnel. On the other hand, distribution,
marketing services, and research and develop
ment jobs are expected to increase over the next
5 years. Also, new jobs such as electronic and
instrumentation technicians are expanding in
central offices or main plants. These, however,
are relatively few in number and do not increase
in proportion to growth of production.
Skill requirements change as automation in
creases. In almost all modern plants, manual
skills are being replaced by machine tending or
console monitoring. Passenger-tire building,
190
Some Issues and Examples of Adjustment
Employment preference rights and retraining
are provided in some contracts. At least one
major contract provides laid-off employees with
employment preference in other company plants
when all their eligible laid-off employees have
been recalled and new employees are being hired
for work.
Company-sponsored maintenance training
programs to retrain maintenance workers are
now required, in at least one major contract,
whenever the company installs new equipment
or modernizes existing equipment which re
quires additional skill or knowledge.
New contract provisions extend layoff benefits.
More than 90 percent of the tire and tube pro
duction workers are in plants covered by labormanagement agreements with the United Rub
ber, Cork, Linoleum and Plastic Workers of
America, which include provisions for supple
mentary unemployment benefits (SUB). Re
cent major contract negotiations increased and
extended layoff payments under these SUB
provisions, and increased separation benefit
payments.
Wage adjustments for mechanization are
strengthened in new contracts. The 1965 major
contracts clarified, and in one instance, updated
the basis for determining the wage-rate adjust
ment for machine-controlled jobs. These adjust
ments protect the worker against loss of earn
ings as a result of reevaluation of piecework
rates for jobs in which a machine, rather than
the operator’s skill or effort, becomes the major
factor controlling output.
for example, a highly skilled manual job in
older plants, still requires a skilled operator
but his manual duties have been greatly
reduced.
Technical skills are increasing in some opera
tions. Calender and tread extruder operators,
for example, must now fully understand intri
cate instrumentation, such as radioisotope
gages, for proper adjustment. Maintenance
and machine repairmen also require greater
technical skill as machine complexity increases.
Selected References
Technological Developments
“ Appraisal, A Technological Review of the Rubber Industry,” Rubber Age, Decem
ber 1964, pp. 389-396.
“ How Much Can Akron Tell Detroit,” Business Week, Aug. 8, 1964, pp. 94-98.
Morton, Maurice. Introduction to Rubber Technology, ch. 20, 1959, pp. 517-539.
Mulligan, Bill. “ The Quiet Revolution in the Carbon Black Industry,” Rubber World,
July 1965, pp. 55-64.
“ Radial Ply Tires Blur Tire Cord Picture,” Chemical and Engineering News, Oct. 19,
1964, pp. 48, 50.
“ Review and Preview, 1964, 1965,” Rubber Age, January 1965, pp. 550-564.
Rubber Industry Facts, The Rubber Manufacturers Association, Inc., September
1964.
“ The Next Steps for Rubber,” Rubber World, June 1964, pp. 38-47.
Manpower Trends and Adjustments
Indexes of Output Per Man-Hour in the Tires and Inner Tubes Industry, 19U7-60,
Bureau of Labor Statistics, October 1962, 19 pp.
Industry Manpower Surveys: Tires and Tubes, Bureau of Employment Security,
March 1964, 15 pp.
Shils, Edward B. Automation and Industrial Relations, 1963, pp. 233-236.
The Footwear (Except Rubber) Industry (SIC 3 1 4 )
are difficult to automate. Despite early mecha
nization, footwear production remains a
labor intensive industry, with up to 150 sepa
rate operations needed for the manufacture of a
shoe. However, partly because of increasing
foreign competition (imports expanded almost
500 percent from 1957 to 1963) and competition
from low-cost rubber and canvas shoes (sales
doubled between 1957 and 1963), there is much
greater interest in new developments that
would change traditional techniques signifi
cantly.
Summary of Outlook Through 1 97 0
Footwear manufacturers are increasing their
expenditures on new plant and equipment to in
crease production efficiency. Growing competi
tion with foreign-produced leather footwear
and foreign and domestic rubber and canvas
footwear is encouraging the modernization of
equipment. The introduction of manmade mate
rials as a substitute for leather in uppers and
new systems for grading lasts and sizing shoes
are among the technological changes that could
also result in increasing the efficiency of a wide
range of production operations. Skilled as well
as semiskilled and unskilled workers would be
affected.
Employment will probably continue to de
cline. Determination of piece rates for jobs af
fected by mechanization will probably concern
labor and management to an increasing extent.
Introduction of manmade materials opens op
portunities for use of more automatic equip
ment. A number of manmade materials for
shoe uppers have been introduced recently.
Manufacturers claim that some of these substi
tutes have like or better properties than leather,
such as high porosity, scuff resistance, flexibil
ity, and durability. Unlike leather, manmade
materials are uniform in size and quality, per
mitting them to be cut in multiple layers on
automatic die cutting machines. This could
lead to operating economies, offsetting to a
large degree the higher cost of many of these
leather substitutes. Significant economic gains,
however, require much longer production runs
than is common in the industry at present.
Trade sources estimate that approximately 1
Outlook for Technology and Markets
Production is expected to increase moderately.
Domestic production of nonrubber footwear
grew at an average annual rate of 0.6 percent
per year from 1957 to 1964, compared with an
increase of 1.9 percent per year from 1947 to
1957. Since per-capita consumption of domestic
nonrubber footwear has tended to remain stable,
the major factor in future production trends
million pairs of shoes made from the leading
will be population growth. Production growth,
therefore, will tend to be gradual.
manmade material were sold in 1964. The fu
ture extent of adoption of manmade materials
will depend upon the success of producers in
winning consumer acceptance, their profita
bility to shoe manufacturers, and the reaction
of leather producers.
Market and style trends are expected to continue
to exert influence upon production techniques.
Light, flexible shoes, simpler shoe constructions,
and more casual type shoes, for example, aid
shoe manufacturers in efforts to simplify pro
duction processes; handsewn moccasins, boots,
and similar labor intensive styles, on the other
hand, tend to increase unit labor requirements.
Research is underway to develop better quality,
more uniform leather. Partly in response to
competition from manmade materials, efforts
are being made to overcome some of leather’s
disadvantages for automatic shoe production:
its irregular shapes, imperfections, and failure
to react uniformly to the stresses used in shoe
making. Such efforts may strengthen leather’s
position in the shoe market, which presently
utilizes about 80 percent of the leather indus
try’s output.
Foreign competition and competition from rub
ber and canvas footwear are influencing leather
shoe producers to take a greater interest in
technological improvements. Variations in sizes,
styles and the irregularity of leather, require
labor for adjusting and positioning tasks, which
191
192
A new method of trimming hides proposed
by the U.S. Department of Agriculture would
reduce some of the processing and handling
difficulties by cutting out the poorest sections
of the hide before tanning. Leather would be
produced in uniform rectangular shapes. An
other approach would develop leather suitable
for shoe uppers by breaking down raw hides
into their basic fibers and reconstituting them
into sheets with uniform properties. Research
is underway to develop new finishes for leather
to improve its properties; one such improved
leather has been introduced recently.
New processes reduce labor requirements in
bottoming. The injection molding machine, for
example, automatically molds a polyvinyl chlo
ride plastic shoe bottom, including heel and
sole, directly to a leather or synthetic shoe
upper and is particularly useful in making
men’s, children’s, and casual shoes.
Vulcanization equipment automatically molds
a complete rubber shoe bottom onto a leather or
fabric upper and is adapted to making boots,
workshoes and casual footwear.
These processes, by eliminating up to 30
traditional shoemaking operations, have re
duced substantially unit labor requirements in
shoe bottoming. Over 15 million pairs of shoes,
amounting to about 2.5 percent of nonrubber
production, were made by injection molding and
vulcanization techniques in 1963. Shoes made
by these processes are expected to gain an in
creasing share of the footwear market.
Neiv techniques speed lasting operations. A re
cent pilot installation of thermalasting ma
chinery, which molds a complete synthetic or
leather shoe upper to a last and cements the
parts together in three automatic operations,
has been reported as having good results. The
process, adapted to many types of shoes, com
bines a large number of previously separate
operations, omitting tacking, stapling, and pre
cementing. Lasting equipment combining even
more operations is under development.
Heat-setting machines, utilizing automatic
shoe transporters, are in somewhat more wide
spread use. These machines set the shape of the
shoes rapidly, after they are placed on a last,
by subjecting them to humid and then forced hot
air. Time on the last is cut from days to hours,
greatly reducing the manufacturer’s inventory
of lasts..
These two processes can be connected directly
by conveyors, thereby greatly speeding up
production.
A new method of last grading may lead to more
efficient operations. One of the most far-reach
ing developments in footwear manufacture is
geometric last grading, which is based upon the
concept of changing all last dimensions propor
tionately by the same percentage factor with
each size change. The arithmetic grading sys
tem, in general use since 1887, is based upon
adding fixed increments to length, width, and
girth for each size change and results in nonproportionate changes. Geometric grading al
lows the use of highly flexible, automatic equip
ment and therefore has great potential for
reducing labor required for adjusting and posi
tioning in shoemaking operations.
Two automatic machines, a heel-attaching
machine and a heel-trimming machine, were in
troduced as part of a geometric last grading
system in 1964 by a major shoe machinery firm.
The positioning of the last in the machinery is
controlled by a plate on the last, which allows
the machines to distinguish between right and
left shoes. The machines adjust themselves to
the size of the last automatically. Equipment
for the automatic transfer of shoes from one
machine to the next will soon be available, and
other automatic machinery is being developed.
The firm estimates that approximately 500,000
pairs of men’s shoes, using conventional shoe
sizes, will be processed by geometric last grad
ing equipment during 1965.
Production efficiency may be increased by a new
shoe sizing system. A new method of shoe siz
ing, recently introduced by a leading shoe man
ufacturer, is based on statistical studies of foot
sizes. The firm claims to be able to fit shoes
more accurately with a 40-percent reduction in
the number of sizes commonly manufactured.
This system is designed to cut retailers’ inven
tory and to increase efficiency through larger
production runs. However, since traditional
shoe size nomenclature is changed, the extent to
which this system will be adopted is difficult to
determine.
193
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN THE FOOTWEAR INDUSTRY,
(EXCEPT RUBBER)
Thousands of Employees
I 50
EXPENDITURES FOR NEW PLANT AND
EQUIPMENT
Output per Man-Hour
Production Workers
Millions of Dollars
70
60
1958
' 59
' 60
'61
'62
'6 3 '64
5 0 ____L
1947
49
5 1
53
55
57
59
6 1
63
1965
.................. Data for 1948 and 1953 not available
Sources:
Employment and expenditures, Bureau of the Census; output and output per man-hour, Bureau of Labor Statistics.
194
Mechanized materials handling techniques are
replacing manual methods. Conveyors are re
placing the rack and basket methods of trans
porting work from one operation to the next.
Some conveyor systems can be controlled by
means of a console, with one operator directing
the flow of work in a complete section, such as
a stitching room. A number of firms have re
cently built modern, one-story plants, especially
designed to utilize conveyors in conjunction
with other new equipment and processes.
Conveyors are also being utilized increas
ingly for warehouse facilities. One large manu
facturer is using computers to control a large
conveyorized distribution center which can re
ceive 50,000 pairs of shoes per day and can ship
40,000 pairs to 1,500 dealers in one 8-hour shift,
with fewer than 60 employees. It can handle
an inventory of 1.5 million shoes with 49,000
different size and style combinations, and it is
being used to distribute the output of 17 produc
tion facilities.
New manufacturing process for casual shoes
eliminates most traditional shoemaking opera
tions. A line of women’s casual shoes, intro
duced in late 1964, are made by means of a
vacuum-forming process which shapes and
forms the shoe so that the bottom and most of
the upper is made from a single piece of a spe
cially developed synthetic material. The process
eliminates conventional shoe parts including
insoles, sock lining, shanks, and box toes, and
does not require heel seat and toe lasting.
Investment for new plant and equipment is ex
panding. New capital expenditures per pro
duction worker continued to remain among the
lowest of all manufacturing industries, despite
an increase in recent years. Expenditures for
new plant and equipment were $15.1 million
per year or $74 per production worker in 1958
and expanded to $21.6 million, or $112 per
production worker, in 1964.
Manpower Trends and Adjustments
Moderate acceleration is expected in output per
man-hour. Output per man-hour of all employ
ees increased at an average annual rate of 2.6
percent per year from 1947 to 1957 but de
clined to an average rate of increase of 1.5 per
cent per year from 1957 to 1964. Output per
production worker man-hour increased at about
the same rates— 2.8 percent per year from 1947
to 1957 and 1.4 percent per year from 1957 to
1964. Larger capital investments will probably
quicken the pace of productivity advance.
Continued employment declines are likely. To
tal employment (Census) declined from 240,300
to 235,000 from 1947 to 1957, decreasing at an
average annual rate of 0.2 percent. It continued
to decline at an average annual rate of 1.4 per
cent from 1957 to 1964, dropping to an employ
ment level of 213,300. Production worker em
ployment followed essentially the same pattern,
also declining by about 27,000 jobs in the 194764 period. These trends are expected to con
tinue, leading to lower employment levels.
Occupational structure is shifting. Expanding
use of manmade materials for shoe uppers and
the development of more uniform leathers may
lead to a decline in the need for highly skilled
cutters and sorters. These occupations, mostly
all held by men, accounted for 3.5 to 5 percent
of the industry’s production workers in 1962
and have been among the highest paid occupa
tions in the industry.
Also likely to be affected adversely by the
expanding utilization of new techniques are
skilled and semiskilled workers in lasting and
bottoming operations. Consisting mostly of
men, these employees accounted for nearly 30
percent of all production workers.
Average annual percent change
All employees
1947-57 ___________________________________ - 0 . 2
1957-64 ______________________________
-1 .4
Production workers
1947-57 __________________________________ - .4
1957-64 _________________________
-1 .3
Output
1947-57
. . . ________________
1.9
1957-64 ___________________________
.6
Output per all-employee man-hour
1947-57 _____________________________
2.6
1957-64 __________________________________
1.5
Output per production worker man-hour
1947-57 __________________________________
2.8
1957-64
1.4
195
Widespread use of conveyors is expected to
cut the need for floor workers, who comprised
about 5 percent of total production workers in
1962. More than half of this group were women.
Conveyorization is also expected to increase the
productivity of other workers, such as machine
operators, who formerly had to spend much of
their time in handling materials and moving
work in process.
Since many of the traditional shoe processes
and construction methods will continue, some
occupations will remain unaffected or will in
crease in employment. For example, hand
stitchers for moccasins are expected to remain
in demand.
Technological innovations are leading to com
plex problems of wage determination. New au
tomatic equipment and processes have gradu
ally been reducing the need for manual skills.
Since about 70 percent of production workers
are paid on an incentive basis, complicated
problems of piece-rate determination will prob
ably arise in the future as production processes
become more machine oriented.
Recent labor-management agreements give job
preferences and wage guarantees to workers
affected by technological change. A contract
covering 7,000 workers in New England, for
example, stipulates that employees who are
displaced are to be given preference in assign
ment to jobs on the new or improved machinery.
An added provision gives preference to affected
employees for any job opening in their depart
ment. This contract also provides that previous
average hourly earnings are to be guaranteed
to employees required to use new or improved
machinery when utilizing the same or less skill.
New wage rates are to be negotiated if higher
skill is required.
An agreement with a major multiplant firm,
with headquarters in the Midwest, covering
about 22,000 workers, provides that the old pay
level will be maintained for workers on a new
machine until new piece rates are negotiated.
Selected R eferences
Technological Developments
“ A Computer Ships the Shoes,” Business Week, July 11, 1964.
“ A New Shoe-Sizing System,” Boot and Shoe Recorder, Oct. 15, 1964, pp. 37-40.
Boot and Shoe Recorder, June 1, 1964, 120 pp. (shoe technology issue).
Bright, James R. Automation and Management, Harvard University, Graduate
School of Business Administration, 1960, pp. 30-38.
Footwear Neivs, June 4, 1964, 68 pp. (Footwear Management Conference issue).
Thompson, John W. and Poats, Fredrick J. Economics of Segmenting Cattle Hides,
ERS Report 215, U.S. Department of Agriculture, 1965, 18 pp.
Thornton, J. H., Editor. Textbook of Footwear Manufacture, London, Temple Press
Books Ltd., 1964, 615 pp.
Manpower Trends and Adjustments
Indexes of Output Per Man-Hour, Footwear Industry, 19U7-63, Bureau of Labor
Statistics, July 1965, 17 pp.
Industry Wage Survey, Footwear, April 1962, Bulletin No. 1360, Bureau of Labor
Statistics, 1963, 71 pp.
Livernash, E. R. “ Collective Bargaining and Competitive Cost in the Shoe Industry,”
Monthly Labor Review, March 1957, pp. 310-315.
Shulz, George P. Pressures on Wage Decisions, John Wiley and Sons, Inc., 1951,
142 pp.
Railroads (SIC 4 0 1 )
Summary of Outlook Through 197 0
Output per man-hour is expected to continue
rising as expenditures for modernization ex
pand. New developments in technology will in
clude more powerful locomotives, rolling stock
of greater capacity and specialization, advances
in the unit train and piggyback, and higher
speed passenger trains between densely popu
lated areas. Improvements in track and road
bed construction and in maintenance equipment,
construction materials, and structures are ex
pected to bring further reductions in mainte
nance. Additional improved centralized traffic
control (CTC) systems and electronic classifica
tion yards; microwave and other communica
tions improvements; computers for traffic con
trol; and more pools of specialized equipment
are expected to advance efficiency in traffic
handling and equipment utilization.
Although employment reductions will con
tinue, the rate of decline is expected to slow
down as freight traffic increases in the late
1960’s. The impact of reductions in employ
ment on account of technological change will be
eased by recourse to normal attrition and pay
ment of separation allowances, as provided for
in recent collective bargaining agreements.
Outlook for Technology and Traffic
Increases in total revenue traffic are expected
to continue. Between 1947 and 1957, the Bu
reau of Labor Statistics index of combined pas
senger and freight traffic declined at an average
annual rate of 1.1 percent. For the period 1957
to 1963, the average rate of increase was only
0.5 percent but from 1961 to 1963, traffic in
creased by almost 12 percent. The estimated
ton mileage for 1965 approaches the peak levels
of World War II.
An increase in freight traffic is expected by
1970, and the Association of American Rail
roads (AAR ) anticipates a rise of about onethird by 1975, assuming that railroads main
tain their relative share of intercity traffic and
that national economic growth trends are main
tained. Freight traffic increases are expected
to more than offset continued declines in passen
ger traffic, although commuter traffic and high
speed trains serving densely populated areas
may increase passenger volume for some
carriers.
Piggyback service has been called uthe most sig
nificant recent development in transportation.”
Piggyback, or trailer-on-flat-car (TOFC) serv
ice, combines the more economical long haul of
the railroads with the greater flexibility and
economy of motortrucks for short distances.
From about 45,000 flatcars loaded with trailers
or containers in 1954, the 1964 total had
reached almost 900,000. According to AAR,
piggyback car loadings could reach 20 percent
of total car loadings in 1975, compared with 3
percent in 1964.
TOFC technology includes specially designed
flatcars, tunnel and track reconstruction, and
the design of terminal facilities for high volume
TOFC loading and unloading. The American
Standards Association has established standard
container sizes which will permit easier inter
change between railroad and other modes of
transport. Trailer Train, an organization of 40
railroads, has pooled thousands of TOFC cars
for improved service and higher rate of car
utilization. Trains of TOFC-loaded flatcars
operate on expedited schedules.
Fewer workers per truck are required for a
piggyback train than for individual truck-trailer
movement. In addition, TOFC transportation
requires less packing, bracing, rehandling and
clerical labor; generates fewer loss and damage
claims than boxcar shipments; permits rail
service to off-track shippers; and results in
greater flexibility, speed, and dependability.
Substantial modernization was effected in the
postwar years, and a rising rate of improvement
expenditure is indicated over the 10-year pe
riod, 1965-75. Between 1946 and 1965, the rail
roads invested more than $20 billion in capital
improvements, averaging about $1.1 billion an
nually. Capital expenditures amounted to $1.4
billion in 1964, and are estimated at $1.6 billion
for 1965. The industry (A A R ) has announced,
196
197
as a goal for the 10 years, 1965-75, expenditures
of $2 billion or more annually, about threefourths of which would be applied to improve
ments in motive power and rolling stock.
A new generation of diesel locomotives is ex
pected to result in better train performance.
Another generation of diesel-electric locomo
tives, now being delivered, ranges between
2.500 and 6,000 hp., compared with 1,200 to
1.500 hp. for earlier diesels. It is estimated
that 14,500 new diesels could replace the 30,000
old units and handle the current (1965) volume
of traffic. Savings in maintenance and operating
labor could come, not only from the operation of
fewer locomotives, but also from the lower
maintenance and operating costs per unit that
are claimed for the new diesels. These effects,
however, would be reduced if shorter trains
with higher hp. locomotives were run on more
frequent schedules. Traffic growth, at any rate,
is expected to require a substantial number of
additional diesels by 1975.
Twenty-one diesel-hydraulic locomotives— 18
of which were made in West Germany, three
made in the United States— are in experimental
use, but only on one railroad. Diesel hydraulics
are said to be advantageous for heavy hauling
on steep grades, and in high speed mainline
freight service; reduced maintenance require
ments are claimed. One carrier is seeking to
adapt a 15,000 hp. aircraft jet engine to a
locomotive, a power potential considerably
beyond present diesel technology.
Larger, more diverse, and more durable rolling
stock is available. With the design of better rail,
axles, wheels and trucks, load limits on rails
have been increasing, allowing rolling stock of
greater capacity. The use of aluminum and
light weight steels has allowed net weights to
rise relative to gross weights. Examples are
cars of 100-ton capacity compared with earlier
capacities of 50 to 70 tons; tank cars in which
the standard capacity— formerly 8,000 to 10,000 gallons— is now 30,000 gallons; flatcars,
Retarder operator controls the speed of coasting freight cars in classification yard.
198
formerly 45 to 80 feet in length are now 85 to
90 feet and carry two highway trailers or vancontainers. Conventional 50- and 70-ton coal
cars are being replaced by cars of 85 to 100 ton
capacity. A new car for coal and other bulk ma
terials has been built with a 7 to 1 ratio of
loaded to empty weight in comparison with the
2.6 to 1 ratio for earlier equipment.
Specialized cars include center discharge
cars for powder and pellets, special log cars,
lumber tie-down cars, and special racks to fit
the longer flat cars for automobile loading. New
methods of construction, providing all-door
boxcars, special flooring, and lining, facilitate
loading and unloading and reduce maintenance.
The use of gravity for unloading bulk materials
from hopper cars has been joined by pneumatic
and pressure differential type unloading de
vices. One carrier now offers 40 different cars,
compared with 8 in 1940.
The unit train is an outstanding example of
specialization. Unit trains use from 72 to 125
cars per train and haul from 7,000 to 10,000
tons of a single commodity from one large pro
ducer to one large consumer at sharply reduced
rates. Unit trains travel at near passenger train
speed and by-pass classification yards. With
the elimination of uncoupling, switching, and
weighing en route, and with the achievement
of fast turn-around time, very considerable sav
ings have been realized. Some unit trains are
weighed automatically while coupled and in
motion, with significant savings in labor.
While the most frequent use of unit trains
is in hauling coal to utilities, they also haul
grain, ores, cement and steel slabs. Many other
commodities also are being considered for unit
train transport. Some authorities believe that
unit trains made up of the new 30,000-gallon
tank cars could transport petroleum products
more economically than new pipelines and save
on pipeline construction.
Advanced unit trains, called “ integral trains,”
are owned by several electric utilities. Railroads
furnish motive power and right of way. Cars of
the integral trains are semipermanently coupled
and can be unlbaded, two at a time, by rotary
dumping devices. These trains are said to
produce still greater bulk transport economies.
Electronic yards speed freight classification for
transshipment or local delivery. Electronic
yards were first installed in the United States in
1952. By 1965, nearly 60 were in operation, but
only a few are fully automatic. In fully auto
matic yards, preprogramed digital computers
record the speed and weight of cars, operate
switches, apply retarders, and route the cars to
the appropriate trains. Semiautomatic yards
require an operator to switch the cars while an
analogue computer operates the retarder sys
tem. Older yards have manually operated elec
tro-pneumatic retarders and switches.
Electronic yard laborsavings accrue from the
consolidation of several yards into one, bring
ing drastic reductions in the number of em
ployees and time required for switching
operations both in the consolidated yard and
in other yards. Savings also result from re
duced damage due to rough handling of cars,
and from release of land for other purposes.
The latest development is the “ economatic”
yard— a semiautomatic yard to replace small,
flatyards which cannot be economically incor
porated into larger electronic yards. These
small, semiautomatic yards are said to serve
up to 10 classification tracks, and can handle
a maximum of three cars a minute, more than
double the switching rate of a flatyard, but
less than half that of a large yard. Only two
such yards were in operation in mid-1965, but
the manufacturer estimated that the industry
could accommodate 150 of these yards.
Centralized traffic control (CTC) circuits are
becoming more refined and mileage is increas
ing. Under CTC, a single operator at an elec
tronic console controls the simultaneous move
ments of all trains within a block of hundreds
of miles of track. Trains may be handled with
out prior scheduling or train orders. First
installed in 1927, CTC covers over 35,000 miles
of railroad (nearly 30 percent of mainline mile
age), almost half of which was installed after
1952. CTC reduces directly the need for train
dispatchers, towermen, and telegraphers. Main
tenance labor is curtailed because of reductions
in track and roadbed. CTC cuts down train
delays, makes possible higher average train
speeds, and contributes to improved safety.
199
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN RAILROADS
Index (1957-59=100)
Millions of Dollars
, 5 0 0 _____________
1947
Sources:
*49
Ratio Scale
EXPENDITURES FOR NEW PLANT AND EQUIPMENT
‘51
*53
*55
*57
*59
*61
*6 3
*65
Employment, output and output per man-hour, Bureau of Labor Statistics; expenditures, Securities and
Exchange Commission and Department of Commerce.
200
Modern CTC units have greater capacity than
earlier systems (i.e., control of more traffic
over greater mileage) and permit fully auto
matic train meets (switching to proper tracks).
Some have transistorized circuits and are
equipped to receive train control signals from
a digital computer.
Improved control systems (CTC, automatic
classification yards, etc.) indicate the possibility
of automated railroads. Improvements in train
control, such as CTC and automatic classifica
tion yards, suggest the eventual control of train
movements by computer. One railroad vice
president claims that computerized control of
crewless trains will be possible within 5 to 10
years.
In a few simplified situations, automated
trains are currently being operated. Iron ore
trains in Labrador and in Western United
States, for example, are now operated auto
matically (without crew) over short distances.
Japan’s Tokaido Line between Tokyo and Osaka
operates semiautomated trains. Thirty-five and
76-car automatic trains were successfully tested
(1960) over a 10-mile mainline section of a
Canadian railroad which includes a variety of
curves and grades. Rapid transit trains with
automatic controls are being built for the San
Francisco area (scheduled for completion 1970—
71). A computer will initiate makeup and
dispatching of trains, determine speed, halt a
train at a specified position, cause it to leave
the station, and in case of delays, reschedule
trains to prevent disorganization of established
schedules.
Automatic car identification systems (ACI)
are being developed. Infrared, radio frequency,
microwave, or other sensing devices will read
car identification numbers from a moving train,
regardless of speed and weather conditions.
The system, replacing existing visual identifica
tion, will store the information and, when re
quired, transmit it for automatic transcription
on tape. The system is expected to speed car
tracing, checking of car consists of (train de
scription), location of cars for maintenance,
monitoring of trains, identifying captive cars,
and generally aiding in freight car accounting.
To become effective nationwide, one system and
one type label must result.
Communications improvements are expected to
be introduced widely. To meet the rapidly in
creasing need for a high-volume and rapid-in
formation carrier, about 9,000 miles of microwave communications had been installed by
1964. Among other advances in communications
are direct dialing telephone systems and elec
tronic switching devices for teletype communi
cations. Two-way radio connections are used
increasingly between the CTC dispatcher and
trains en route, in end-to-end train communi
cations, in classification yards, on maintenance
vehicles, and in trucks and automobiles.
Use of computers is increasing and includes
more traffic operations. An AAR survey on
computer use in 1965 shows that, exclusive of
special-purpose machines, 44 railroads use 142
computers in 74 installations. Included in the
total are 19 large scale computers, 31 of medium
scale, and 92 of small scale.
Computers have been used largely for ac
counting and routine recordkeeping. Applica
tions are spreading rapidly to include car loca
tion and utilization, engineering studies, market
research, and inventory control. Future com
puter use in this area may include automated
pricing and the furnishing of tariff and rate
information. Computer simulation techniques
are expected to be used to provide answers to
problems involved in train operation, diesel
servicing, yard performance, and communica
tions network requirements.
About six roads have “ real time” computer
systems in various stages of planning or in
stallation. Real time computers obtain informa
tion as it develops and process it, making it
instantly available. One such system now being
installed will include two of the world’s largest
computers, and will be applied to general opera
tions, freight traffic, and accounting.
Improved machinery, materials, and techniques
indicate continued reduction in maintenance
labor requirements. More versatile equipment
requiring fewer workers is replacing a first
generation of maintenance machines. Examples
201
are machines that raise and line the track and
level and tamp the roadbed in a single opera
tion ; other machines pick up, clean, and return
to the roadbed old ballast rock, thus saving the
cost of new ballast; other units and equipment
combine snow removal and track cleaning, and
operate from track side, thereby minimizing
interference with traffic flow.
Some carriers are experimenting with track
recorder cars which analyze the roadbed con
dition electronically. In the future, recorder
cars may automatically punch roadbed informa
tion onto a card for analysis by a computer, or
feed it directly into a track maintenance ma
chine that signals the need for the appropriate
service.
The industrywide adoption of lubricating
pads has resulted in a sharp reduction in the
number of hotboxes. Car set-outs because of
hotboxes, averaged 1 per 0.2 million miles in
1958, compared to an average of 1 to every 1.2
million miles in 1964. Most new freight cars
have roller bearings which rarely overheat.
Electronic hotbox detectors also have been a
factor in reducing maintenance costs arising
from this problem.
Other developments minimize the need for
maintenance; more durable, longer service steel
rails; prestressed concrete for ties, bridges,
and buildings; new materials in freight car
construction; improved locomotives; wireless
microwave communications; use of better
methods and more durable materials in con
struction of roadbed and auxiliary structures
and in their maintenance. Continuing improve
ments in techniques of car servicing and main
tenance have sharply reduced the equipment
maintenance work force.
Emphasis on research and development is in
creasing. While the AAR Research Center is
the focal point of railroad research, research
and development also is carried on by the rail
road equipment and supply manufacturing
industries and most of the larger railroads.
Examples of research, development and testing
by the AAR Research Center are development
of prestressed concrete ties and bridges, new
roadbed stabilization techniques, surface hard
ening of rail, butt welding of continuous rail,
hotbox prevention and detection, coupled in
motion weighing, improved lubricating mate
rials, cushioned underframe cars, packaging
methods that minimize breakage of glass con
tainers, and methods of eliminating damage to
contents of other containers.
Substantial benefits are expected from a
major research and developmental program in
the technology of high speed ground transpor
tation, now underway. Recent legislation au
thorized research on a wide range of problems.
Several demonstration projects are scheduled.
One demonstration project authorized by the
U.S. Department of Commerce between Wash
ington, D.C., and New York City is being
planned. Plans call for self-propelled cars,
capable of operation at speeds up to 160 m.p.h.
to be operated at 100 m.p.h. during the demon
stration program. Funds have been provided
for a stretch of road between Trenton and
New Brunswick, New Jersey, to test track, cate
nary, and equipment at speeds up to 160 m.p.h.
Another project between Boston and Provi
dence is under consideration.
Manpower Trends and Adjustments
Output per man-hour will continue to rise. Be
tween 1947-57, output per production worker
man-hour rose 47 percent, increasing at an
average annual rate of 3.9 percent. Between
1957 and 1964, the annual rate of increase rose
to 6.2 percent, output per man-hour rising 53
percent over the 7-year period. Increased uti
lization of capacity, more advanced equipment,
and recent changes in work rules could ac
celerate the rate of increase in the 1965-75
decade.
Average annual percent change
All employees
1947-57 ______ - __________________________ - 3 . 1
1957-64 ___________________________________ - 5 . 5
Output
1947-57 ___________________________________ — 1.1
1957-64 ________________
.5
Output per all-employee man-hour
1947-57 __________________________________
3.7
1957-64 __________________________________
6.0
Output per production worker man-hour
1947-57 ______________
3.9
1957-64 __________________________________
6.2
202
Long run decline in railroad employment is
expected to continue but at a slower rate than
in the past. Between 1947 and 1957, employ
ment declined from 1.35 million to 0.98 million;
the decline between 1957 and 1964 amounted
to 320,000 with total employment in 1964 at
665,000. The total postwar decline was 687,000
workers, a rate of about 4.1 percent a year.
Despite rising productivity, offsetting growth
in rail traffic may hold future employment de
clines below past rates.
Additional changes are imminent in occupa
tional structure. Between 1954 and 1964, mech
anization of track maintenance reduced the
number of roadway and structural maintenance
workers by 50 percent, from 199,000 to 99,000.
Improved machinery is expected to result in
some further curtailment in maintenance
employment.
Reflecting the expansion in centralized traffic
control, employment of train dispatchers, towermen, and telegraphers, between 1953 and 1964,
declined by 36 percent, from over 42,800 to
27,500. Over the same period, employment of
yard brakemen and helpers declined by 19
percent, reflecting the impact of automatic
classification yards. Electricians declined by
21 percent and machinists by 35 percent. Every
category of equipment and stores maintenance
worker declined.
The total number of operating employees,
although declining slightly in absolute numbers
between 1954 and 1964, rose from 23 to 28
percent of total railroad employment. Possible
settlement of work rules, the increased pace
of modernization, continued decline of passen
ger service, and the prospect of mergers would
appear to mean declining employment oppor
tunities in train service.
Work rules dispute was temporarily halted in
196J A May 1964 ruling in the arbitration
f.
award of November 26, 1963, permitting the
railroads to remove firemen from freight and
yard diesels, halted at least temporarily a
dispute that had lasted from 1959. This award
expires in April 1966, and eventual disposition
of the problem is uncertain. Of 15,000 firemen
displaced, many were retired, promoted to en
gineer, received other railroad jobs, or obtained
jobs in other industries. The majority of the
firemen -not placed in other railroad jobs re
ceived severance pay. Most of those who became
unemployed were also eligible for weekly un
employment benefits. Eventually, additional
jobs of firemen will be eliminated, but expecta
tions are that future reductions in force will be
effected by attrition. Displacement of as many
as 20,000 additional operating employees has
been the subject of negotiations between the
unions and individual railroads.
Attrition and severance pay are to cushion dis
placement effect of new technology. Many rail
road management and labor agreements nego
tiated since 1961 have provided that, except
under certain conditions, all reductions in force
would be met through retirements, quits, or
other normal attrition. In other cases, where
employees are adversely affected by techno
logical change, severance pay is allowed. The
agreements affect both operating and nonop
erating employees, and include provision for
joint development of training programs to
facilitate replacement of separated workers
within the industry. Some of the agreements
limit the rate at which jobs can be reduced,
even as a result of attrition.
The Railroad Retirement Board operates em
ployment service for railroad workers. In 1964,
26,000 jobs were found for unemployed railroad
workers through the Board’s placement service,
about 10,000 of which were nonrailroad jobs. In
the same year, a total of 6,400 transfers were
reported under the partnership transfer pro
gram, a cooperative effort of railroad labor and
management, begun in 1956. In May 1964,
the Retirement Board began a special program
to find jobs for workers displaced as a result
of the work rules dispute.
Railroad workers get first choice of new rail
road jobs. Some railroads have retraining pro
grams to help railroad workers qualify for jobs
requiring new skills. Because of their previous
experience, retrained railroad workers were
thought to be somewhat more efficient in these
new jobs than workers new to the industry.
203
Selected References
Barriger, John W. Super Railroads for a Dynamic American Economy, New York,
1956, Simmons-Boardman Publishing Corp., 91 pp.
Behling, Burton N., and others. A Reviexv of Railroad Operations, Washington, D.C.,
Association of American Railroads, Annual.
Blake, Bond. “ Four Views of Train Control,” Control Engineering, Dec. 7, 1964,
pp. 62-68.
“ Control Users Pinpoint the Potentials,” Control Engineering, January 1965, p. 87.
Edwards, L. K. “ High Speed Tube Transportation,” Scientific American, August
1965, pp. 30-40.
High Speed Ground Transportation. Report 497 from the Senate Committee on
Commerce to Accompany S. 1588. 89th Cong., 1st sess., U.S. Senate, July 21, 1965.
Liggett, Robert D. “ The Future of Railroad Communications and Signals,” Progres
sive Railroading, July-August 1963, pp. 18-23.
“ Locomotives— Do More With Less,” Railway Age, Oct. 12, 1964, pp. 39-40.
McGee, G. M. Illustrations of Technological Improvements in Track Structures and
Equipment, Carrier Exhibit No. 23 before the Presidential Commission on Rules
and Practices Governing the Assignment and Compensation of Railroad Operating
Employees, 1961.
National Academy of Sciences, Science and Technology in the Railroad Industry,
Washington, August 1963.
Railway Systems and Management Association. Automated Information Manage
ment, Chicago, November 1964.
Technological Change and the Future of the Railways, Evanston, 111., The Trans
portation Center, Northwestern University, 1961.
Tierney, John. “ Rail Logistics Favor Big Trains,” Electrical World, Nov. 4, 1963,
pp. 86-89.
“ Trends in Signalling and Communication,” A Special Report, Railway Signalling
and Communication, October 1963, pp. 21-23.
The Motor Freight Industry (SIC 4 2 )
Summary of Outlook Through 197 0
Employment in the motor freight industry
will continue to grow, although not as rapidly
as the volume of traffic. Advances in technology
and their applications will result in larger, more
efficent terminals; improved engines; increas
ing use of diesels, particularly in lightweight
trucks; specialized vehicles; and improved de
sign and materials. Training needs will become
more urgent, as equipment and regulations be
come more complex. The trend toward larger
firms with greater capital resources facilitating
modernization is continuing.
Outlook for Traffic and Technology
Continued growth in traffic is expected. Traffic
ton-miles of regulated common carriers and
private, nonregulated motor carriers grew an
nually at a rate of 5.5 percent in the 1957-64
period, compared with the higher 1947-57 rate
of 9.5 percent. These carriers hauled the equiva
lent of 370.5 billion ton-miles in 1964 and esti
mates of 1970 traffic range from 470 billion
ton-miles, representing an average annual
growth
rate
of
4
percent
over the
period
1964-70, to 540 billion ton-miles, for an average
annual growth rate of 6.5 percent.
Between 1957 and 1962 (the most recent pe
riod for which data are available), traffic tonmiles for Class I, II, and III regulated carriers
grew at 5.7 percent.
The average carrier size is expected to continue
growing. Common carriers regulated by the
Interstate Commerce Commission (ICC) have
decreased from 19,597 in 1950 to 15,618 in 1963,
while the number of carriers having revenues
of $200,000 or more has increased from 2,053,
or 10.5 percent of the total, to 3,708, or 23.7
percent of the total.
Integrated transportation is aided by container
standardization. As container sizes become
standardized, motor freight transport will be
come more complementary to other carriers and
more goods will be interchanged among motor
truck, railroad, airline, and water. Unit labor
requirements at interchange points could be
reduced.
The trend is toward larger and more efficient
terminals. Mergers frequently result in con
solidation of terminal facilities in a given area,
although in some situations, separately located
terminals may result from attempts to give bet
ter service to a metropolitan area. One of the
main features of some of the larger new termi
nals (approximately 100 loading doors) is the
automatic dragline which, unattended, conducts
carts to and from dock loading and central sort
ing areas. Men working on the loading docks
now have the shipments brought to them auto
matically, saving time in truck loading.
Less-than-truckload (LTL) traffic is being
handled more efficiently. LTL traffic in 1964
made up 18 percent of total tonnage (signifi
cantly higher for common carriers) and ac
counted for about 60 percent of total shipments
and 37 percent of labor costs. By using cargo
cages (containers combining small LTL ship
ments), carriers obtain large increases in
pounds handled per man-hour. One man can
unload a trailer of cages in less than one-half
the time required for these same shipments
handled individually. Use of the cages is still
limited, however.
To speed paperwork in terminal operations,
some of the larger companies are installing
computers for data processing. The future
adoption of the combination bill of lading re
cently approved by conferences representing
shippers and carriers, may permit faster bill
ing for all sizes of carriers. The combination
bill, a multipart, reproducible form, allows the
carrier to utilize a single, standard document
filled out by the shipper to eliminate the tran
scription of data from a shipper’s nonstandard
form to a carrier’s bill of lading. Time and
labor savings of 40 to 50 percent of previous
co§ts, and additional savings from reduction in
delays and misrouted shipments are possible.
204
205
All these innovations in terminal operation
should reduce unit labor requirements at the
terminal, an area that includes approximately
20 percent of the industry’s employment.
Better design and lighter weight materials
for truck bodies reduce maintenance and in
crease payload. Swing-away cabs and foldaway fenders allow easy access to engine and
wiring areas. Aluminum and fiberglass lighten
the vehicle, in some instances by as much as
1,800 pounds, at costs approximating $1 per
pound above those of standard construction. An
industry official estimates that over 115 million
pounds of aluminum, 15 percent more than in
1964, will be used in truck construction in 1965
and that more than one-half of all truck bodies
ordered in 1964 were aluminum. This trend
to lightweight materials is expected to continue.
Vehicles are being specialized to meet varying
traffic and operating needs. Telescoping and
side-by-side lo-boy trailers allow special heavy
haulers to carry missiles, huge generators
(500,000 pounds), and the heavy equipment of
complete production lines. Power gates that
raise and lower heavy shipments to and from
the trailer floor save time and labor at facilities
that lack loading docks. Another trailer, still
experimental, and costing about $15,000 com
pared to approximately $5,000 for a standard
unit, uses air escaping in a thin stream from
check valves in the floor to “ float” palletized
freight. Manufacturer tests show that one
man, using this equipment, can unload 20 tons
of freight in less than 10 minutes. Savings in
man-hours, better load control, and less damage
to shipments should result.
New refrigerated trucks are available that
have thinner walls due to foamed-in-place poly
urethane insulation instead of fiberglass. To
meet performance requirements, refrigerated
trucks with certified BTU performance stand
ards are now being offered for sale. In multi
stop use, combinations of the mechanical and
liquid nitrogen refrigeration systems allow
quick recovery of low temperatures, mechanical
components maintaining required temperatures
economically.
Bulk carriage of products is increasing rapidly.
Double walled pressurized tanks transport liq
uid gases in quantities up to 12,000 gallons at
lower than —200°F. temperatures and do the
job more economically than was formerly pos
sible. Pneumatic loading is boosting the ton
nage hauled in dry bulk carriage of more than
70 products, including cement, alfalfa meal,
wood flour, and industrial chemicals. Pneu
matic carriage of cement by truck, for example,
beginning in 1958, gained rapidly, and by 1963
accounted for over 50 percent of all bulk ship
ments of cement in the United States.
A bulk carrier can be adapted to transport a
variety of products. Tanks that can be used for
hauling asphalt, for example, can haul gasoline.
Other tanks can be converted from liquid to dry
hauling, as in the case of molasses or grain.
Improvements are being made both in diesel and
gasoline engines. Turbo and supercharged die
sel and gasoline engines provide greater power
than standard engines and can be used at higher
altitudes without loss of power. Changes in
diesel injection systems have simplified main
tenance while allowing the engine to be light
ened and decreased in size, thereby making
feasible their use in lightweight trucks. From
1956 to 1963, diesel truck sales increased from
2.3 percent to about 4 percent of total truck
sales; sales of lightweight diesels increased
faster than all diesels.
A new diesel, now being developed for me
dium and heavy duty trucks, is claimed by its
This 60 to 65-foot "western double" can travel as far East as Ohio
before interchanging or unloading equipment.
206
EMPLOYMENT AND TON-MILES CARRIED IN THE
MOTOR FREIGHT INDUSTRY
1947
Sources:
'49
'51
'5 3
'55
'57
'59
'6 1
Employment, Bureau of Labor Statistics; ton-miles, Interstate Commerce Commission.
'63
'65
207
manufacturer to have a payload 45 percent
greater than its counterpart turbo-equipped
engine, and 85 percent above the conventional
diesel. Diesels generally reduce fuel and main
tenance costs, with savings from diesel opera
tions estimated at $12 to $14 per 1,000 miles.
A shorter period between overhauls is required
for turbo-equipped engines, owing to higher
operating pressures and temperatures, than for
conventional diesel engines.
Advances such as increasing compression,
lightweight alloy use, and new fuel injection
systems, as well as recently developed transis
torized ignition systems, may enhance the com
petitive position of the gasoline engine with
respect to the diesel, particularly in the light
truck field. The new fuel and ignition systems
are said by industry sources to extend engine
life and fuel economy. It is expected that tran
sistorized ignition systems will be used on a
large proportion of new gasoline engine trucks
by 1970.
Gas turbine engines, now under intensive de
velopment, are not yet economically feasible.
Continuing improvements in gasoline and diesel
engines will postpone the introduction of gas
turbines in significant numbers beyond 1970.
Other power sources under development are
the free-piston and Wankel engines.
Instrumentation eliminates guesswork from
much troubleshooting and 'preventive main
tenance. Some carriers are using spectrometers
to analyze engine oil for detection of potential
component breakdowns. Such analyses can pre
vent costly road repairs and save needless pre
ventive maintenance, by extending intervals at
which certain items must be checked or replaced
under present schedules. One carrier using this
type of analysis claims to have saved the price
of the spectrometer ($40,000) in 1 year.
The national system of interstate and defense
highways will add to efficiency of motor truck
ing. Forty-six percent of the system was open
to traffic (19,019 miles) and work was under
way on another 43 percent of the system by
December 31, 1964. These roads with more
lanes, better curvature and gradient, and
shorter distances between points, will save com
mercial vehicles a total of $3 billion annually,
the U.S. Bureau of Public Roads has estimated.
Because of the greater strength of the new sys
tem highways, the U.S. Department of Com
merce has proposed increases in allowable axle
and gross vehicle weights to be effective some
time after mid-1967. These new “ allowables”
would mean additional savings to commercial
operators.
The use of tandem trailers (“ doubles” ) is in
creasing. The number of States permitting one
tractor to pull two trailers in combinations 65
feet in length is increasing rapidly. States per
mitting these units on public highways, 14 in
1964, numbered 23 at the end of 1965. Doubles
are commonly 27 to 28 feet in length; however,
some doubles 40 feet in length are in operation
with combinations measuring 98 to 108 feet
overall. On the New York Thru way, the num
ber of carriers operating such 108-foot doubles
increased from 11 in 1963 to 26 in 1964.
Manpower Trends and Adjustments
Employment is expected to continue increasing.
There were 919,800 employees in the industry
in 1964 and the outlook is for a further rise
through 1970. Employment grew in the 194757 period at an average annual rate of 3.9 per
cent and in the 1957-64 period at 1.9 percent.
The proportion of nonproduction workers to
all employment has risen from 8.8 in 1958 to
9.0 in 1964, and the increase is likely to con
tinue. In relation to total work force, the num
bers of drivers and laborers are decreasing, and
sales, clerical, and managerial employees are
increasing. These changes are expected to con
tinue, reflecting increasing terminal and haul
ing efficiency, increasing amounts of paperwork,
Average annual percent change
All employees
1947-57 __________________________________
1957- 64 ________________________________
Production workers
1958- 64 ________________________________
Ton-mile index
1947-57 ____________________
1957-62 __________________________________
3.9
1.9
2.8
8.4
5.7
208
and greater sales e,ffort as competition with
other transportation modes intensifies.
Job protection efforts involve early retirement
and longer vacations. Pension ages are being
lowered. Also, the number of people qualified
for the 4-week vacation provided in the Na
tional Freight Agreement (1964-67) between
the Teamsters and Trucking Employer’s, Inc.,
has been expanded by lowering length of service
requirements. Under that agreement, carriers
will pay $5 to the Union Health and Welfare,
or Pension Fund, for each trailer moved piggy
back.
Selected References
Ruppenthal, Karl, ed. Perspectives in Transportation, Stanford University Gradu
ate School of Business, 1963, pp. 9-15, 63-80.
“ Transportation: The Age of the Specialist,” Dun’s Review, June 1964, Part II.
Whitmeyer, Marty. “ Halting Rust From the Inside,” Commercial Car Journal,
June 1964, pp. 98-101.
Riddle, Holger, senior ed. “ Transistorized Ignition Systems,” Fleet Owner, August
1964, pp. 99-106.
“ Unit Loads and Containerization: The State of the Art,” Transportation and
Distribution and Management, March 1964, pp. 25-35.
“ Simple Motor Oil Check Increases Truck Fleet Life,” Modern Plant Operation and
Maintenance, June 1963, pp. 14-15.
“ Operations Paperwork,” Fleet Oivner, March 1964, pp. 168-179.
“ Driver Training Schools,” Fleet Owner, April 1964, pp. 79-90.
“ New Shop Geared for Fast Line Haul Turnaround,” Commercial Car Journal,
June 1964, pp. 80-94.
“ New Truck/Trailer Developments,” Distribution Age, January 1964, pp. 47-50.
Lyndall, Jack, associate ed. “ Diesel Engines Today,” Fleet Owner, February, June,
August, December 1964, (Parts I— ).
IV
Hay, William H. An Introduction to Transportation Engineering, John Wiley &
Sons, Inc., 1961.
Swart, Bernie, associate ed. “ Refrigerated Truck Bodies,” Fleet Owner, February
1964, pp. 101-108.
The Water Transportation Industry (SIC 4 4 )
ships of 1,000 gross tons or over in the U.S.
registry declined from 1,145 in 1950 to 879
vessels in 1964. Of 318 vessels operating under
Government subsidy in 1964, the Maritime Ad
ministration (MARAD) expects that by 1970,
200 will have new equipment either through
refitting or by replacement of old ships with
new, under its mechanization program.
Because foreign ships have competitive ad
vantages in the form of lower operating costs,
some nonsubsidized ships, which are primarily
bulk carriers and perform nonscheduled opera
tions, are either being transferred to foreign
registry or are not being replaced when old and
inefficient. In the fiscal year 1964, 64 vessels
of over 1,000 gross tons were approved for
transfer and 16 were actually transferred, half
for scrap.
Summary of Outlook Through 1970
The maritime industry, both ashore and
afloat, is undergoing extensive modernization.
Major advances are being made in cargo han
dling, encompassing increased use of containers
and bulk handling, pallets in combination with
forklift trucks, particularly in the holds of
ships, and pier specialization. Changes in ship
design and in ship power plants, including cen
tral control and improved diesels, make pos
sible considerable laborsavings. Atomic power
for ship propulsion is expected to be limited to
one ship (the N.S. Savannah) in 1970.
Total waterborne commerce (foreign and do
mestic) is expected to continue increasing, but
the percent of foreign commerce carried by
ships operating under the U.S. flag may con
tinue to decline. Employment is expected to de
cline by 1970. In the longshoring section of the
industry, which handles the cargo for ships of
all registry, laborsavings through advancing
technology may be partially offset by an increase
in total commerce with only small declines in
employment. Shipboard employment will reflect
decreasing tonnage carried by U.S. ships, inade
quate replacement of obsolete ships in the un
subsidized sector of the industry, and mechani
zation and automation of ships in the total U.S.
merchant fleet.
A variety of innovations reduce manning for
ship operation and maintenance. In the new or
retrofitted ships (ships which incorporate new
controls subsequent to initial launching), cen
tral control of the power plant, including many
self-regulating features and automatic control
devices, may be combined with automatic data
logging, reducing the number of men on watch
by two (on three watches, by six). Reductions
in deck and engine nonwatch personnel range
from four to eight, accompanied by propor
tionate reductions in the steward’s department.
Total cuts range from 11 to 15 employees below
Outlook for Traffic and Technology
Foreign flag ships are carrying increasing
amounts of overseas cargo. Total U.S. water
borne commerce rose from 820.6 million short
tons in 1950 to 1,238.1 million short tons in
1964, an annual average gain of 3 percent.
While U.S. flag operators in 1950 carried about
40 percent of the 159 million short tons of for
eign trade cargo, in 1964 only about 10 percent
of the total 405 million tons went in U.S. flag
ships (excludes Army, Navy and Great Lakes
traffic). A continuation of the decline is
expected.
The subsidized fleet undergoes modernization
while overall decline continues. Oceangoing
A 35-foot trailer is loaded directly from truck to deck or
hold of a containership.
209
210
the conventional manning of 45-55. By mid1965,13 ships had been built with these changes.
It is estimated that the cost of mechanization
features may be recovered in from 1.6 to 3.8
years of operation for new ships and slightly
longer in retrofitted ships.
Numerous laborsaving changes in equipment
and procedures permit reductions in deck and
engine nonwatch personnel. New protective
coatings such as zinc silicate and epoxy paints,
for example, provide protection for years in
stead of the months from older paints, eliminat
ing endless rounds of chipping and painting;
however, high costs of the coverings still limit
their use. Redesign of rigging components is
reducing maintenance. Sealed and lubricated
cargo blocks are used in some ships, requiring
service at 4-year, rather than weekly intervals.
Aluminized wire ropes having a core lubricant
eliminate time-consuming weekly applications
of grease to prevent corrosion. New constant
tension winches and bowthruster units allow
docking operations with fewer men.
Advances are being made in power plants. New
ships with more powerful engines and better
design achieve speeds of over 20 knots com
pared with earlier speeds of 12 to 15 knots.
Two vessels in the nonsubsidized fleet have the
new steam propulsion unit design that reduces
the need for tending equipment at sea; recent
construction subsidy applications provide for
incorporation of these new designs into planned
ships for the subsidized sector of the industry.
New diesels for primary power have smaller
space and weight requirements than older types.
Industrial diesels used for ship propulsion, now
turbo-charged for greater power (up to 30,000
hp.), are at an advanced stage of development.
Diesels are used in many foreign and a few
domestic ships.
Propulsion by gas turbine holds promise for
future wider use. Turbines can be easily adapted
to central control, require relatively little atten
tion in operation at sea; their corrosion from
salt air is being overcome. A few military and
coast guard vessels are now powered by gas
turbines.
Greater use of atomic fission for marine
steam power plants appears to be at least 5 to
10 years in the future. The N.S. Savannah, now
under contract for commercial operation, is
likely to remain the only atomic commercial
ship in the U.S. fleet in 1970, although proposals
have been submitted to MARAD by several pri
vate companies for construction of additional
nuclear vessels.
Through 1970, steam will be the U.S. flag
operator’s prime mover, with diesels and gas
turbines used to power a few ships.
Significant changes in ship design reduce labor
requirements in cargo handling. Some ships
are constructed to accommodate special car
goes, such as lumber or newsprint. New cranes,
located either on the ship or dock, handle
heavier loads more rapidly and efficiently than
former cranes. Cargo hatches are mechanized
to speed opening and closing. A number of new
ships are of “ all hatch” construction so that a
maximum amount of cargo can be loaded in
the square of the hold by crane, eliminating
much heavy labor. Roll-on-roll-off ships, pri
marily ferries for trailers, are in commercial
and military use. More widespread future use
is possible, but economic factors (decreased
turn-around offset by space loss in longer trips)
limit use of roll-on-roll-off ships to relatively
short runs, when compared with other methods
of unitization.
Several ship lines now use containerization
extensively; 39 container ships are in opera
tion and 10 are being constructed at the present
time (mid-1965). One line carries 476 35-foot
trailers in a single container ship.
A proposal to build a ship to carry small
barges in transoceanic traffic is being consid
ered, the small barges to be loaded at inland
ports and floated to ocean ports for loading onto
the mother ship. Lower transportation costs
to and from inland ports, and the relief of some
ocean port congestion would be advantages.
Cargo handling devices are being introduced
to increase efficiency in loading and unloading.
Specialized piers, containers, prepalletization,
and new cranes all decrease cargo loading time.
Pallets, in combination with forklifts, also have
aided in reducing time spent in cargo handling
on the piers and in the ship holds.
Special pier equipment minimizes manual
handling of sugar, lumber, newsprint, and
211
EMPLOYMENT, WATERBORNE COMMERCE, AND
U.S. VESSELS IN WATERBORNE TRANSPORTATION
1947
'49
' 51
'53
'55
'57
*59
'6 1
*63
1965
Number of Vessels
2 5 0 0 ----------------------------------------------------------------------------------------------------------------------
Sources:
Employment, Bureau of Labor Statistics; warterborne commerce, Corp of Engineers;
number of vessels, U.S. Maritime Administration.
21 2
scrap. Clamshell shovels, for example, handle
sugar in bulk (on the West Coast, a conveyor
belt with buckets attached is used to transport
the sugar) ; lumber is bundled; newsprint rolls
are loaded using special adapters, conveyors, or
specialized forklift trucks; and scrap is loaded
with large magnets or through chutes.
Use of containers and pallets is expected to ex
pand in use. Containers speed loading, eliminate
losses from pilferage, reduce damage claims,
and, in an all-container ship, turn-around time
is cut from days to hours; however, some space
is lost in loading of containers. In some all con
tainer ships, freight now can be handled by two
gangs in place of the five to seven gangs often
required to load “ loose stow” cargo. An average
gang of 18 to 20 men loads about 25 tons of
loose stow per hour; a loaded container with
20-25 tons of freight can be loaded from the
dock into the hold of a container ship in about
2 y2 minutes, increasing output per man manyfold.
Prepalletization at the shipper’s plant is an
other method of unitizing freight. Prepalletized
freight eliminates manual handling previously
required to get cargo from the factory to the
truck, from the truck to dock, and onto the pal
let at the pier. Industry experts have estimated
that in the New York area only about 5 percent
of the general cargo loaded and about 3 percent
of the incoming general cargo now is contain
erized, but future growth is anticipated, par
ticularly in view of recently achieved interna
tional standards for container sizes and fittings.
Customs complications, inadequate handling
facilities in many ports, and the refusal of long
shore labor in some foreign countries to handle
this traffic may hinder more rapid utilization.
Hydrofoils and ground effect machines {GEM’s)
will be in limited use for travel over water
routes by 1970. Hydrofoils, used in Europe for
about 10 years, recently have been introduced
into the United States to shuttle passengers in
intraurban travel. Surveys indicate about 25
potential routes for hydrofoils and GEM’s in
the United States. A few passenger hydrofoils
are being used in the United States.
Hydrofoils fly on “ wings” submerged in the
water at cruising speeds of about 40 or more
miles per hour compared with 15 to 20 miles
per hour for conventional vessels; one being
tested Is designed to attain speeds up to 115
miles per hour. The largest hydrofoil in use
carries 150 passengers; one in the planning
stage would carry up to 300.
For the GEM, gas turbines supply both the
lift and directional force for the 50- to 100miles-per-hour speed on an air cushion 3 to
4 feet above ground or water. This craft, un
like many commercial hydrofoils (some hydros
have retractable foils), does not require special
docking facilities and is a strong competitor
on short runs for the passenger or high value
cargo which both must carry to be economically
feasible.
GEM service, operating two vehicles, started
in 1965 in the San Francisco area for ferry
service between airports, a service previously
performed by helicopters. Compared to heli
copters, the GEM requires less initial capital
outlay, and permits lower passenger mile costs;
passenger mile costs being about one-half those
for helicopters.
Progress in Inland Water Transportation
Barges are becoming larger and more special
ized. New barges are 195 feet long compared
with older barges of 175 feet. Open and cov
ered hoppers are the industry’s basic freight
units, but specialized barged such as the $750,000 cryogenic carrier are recent additions.
Navigational aids, such as radar, allow boats
to proceed in weather that formerly slowed or
halted the tows, while increased use of radios
further expedites river traffic.
Horsepower has increased in recently built
tugboats. A device known as the Kort nozzle (a
circular tube, built into a concavity in the hull
inside which the propeller is mounted) allows
the larger engines to be used efficiently in shal
low draft boats, increasing pushpower as much
as 25 percent. Of the tugboats (actually push
ers) in use on the Gulf Intracoastal and Missis
sippi River systems, about 27 percent are 1,000
horsepower or more and 100 feet or more in
length. A few new tugboats, 1.3 percent of
approximately 1,800 boats, have diesel engines
ranging from 4,000 to 8,500 hp. Larger boats
213
with higher horsepower are expected to replace
many of the older boats.
Expenditures to improve inland waterways
{Great Lakes, river, and intercoastal) aid traf
fic growth. Projects for improved navigation
o f inland waterways have accounted for ex
penditures of more than $200 million annually
from 1960 through 1964. Projects are scheduled
into 1970 for replacement of obsolete locks and
dams. Such improvements foster continued
growth in inland waterway freight traffic which
has risen in the past 20 years from 3.5 percent
to 10 percent of total intercity traffic.
Average annual percent change
All employees
1959-64 __________________________________ - 0 . 8
Output
1947-57 ______ - __________________________
4.0
1957-64 __________________________________
1.3
Employment in the Great Lakes-St. Lawrence
Seaway area declined from about 4,000 in 1959
to 2,800 in 1964. The decline may be attributed
to diversion of cargo to Canadian flag vessels, a
decline in ore traffic, and changes in technology
that allow the remaining cargo to be carried by
fewer ships.
Manpower Trends and Adjustments
Some decline in employment is expected by
1970. Bureau of Labor Statistics employment
for water transportation as of March 31, 1964,
was 222,300— a decline of 9,400 from the 1959
level or an average annual decline of 0.8 percent
from 1959. Four classes make up the total: deep
sea transportation, Great Lakes-St. Lawrence
Seaway transportation, local water transporta
tion, and services incidental to water transpor
tation.
Deep sea transportation employment de
clined slightly from 83,300 in March 1959 to
82,500 in 1964. If present labor-management
negotiations allow maximum anticipated man
ning cuts, the total could be somewhat lower by
1970. The transfer of ships to foreign registry,
and retirement of over-age ships from the nonsubsidized fleet may accelerate this decline;
however, one expert feels that the composition
o f the work force and the attrition rate may
lead to a shortage of personnel in 1970.
In local water transportation employment,
traffic increases have offset greater efficiency
from new laborsaving technology to stabilize
annual employment at about 30,000, through the
1959-64 period.
Employment in services incidental to water
transportation (about 50 percent longshore
men) has declined by 7,700 in the 1959-64
period, from 114,900 to 107,200, accounting for
82 percent of the decline in water transporta
tion employment. Despite prospective growth
in tonnage, some reduction in employment is
expected in these services.
Occupational changes arise from introduction
of new machinery and manning scales. Aboard
some retrofitted and new ships, two new ratings,
deck engine-mechanic and engineman, have been
created in the shift to central control. Experi
ence as electrician, junior engineer, or oiler is
considered important for the deck engine-me
chanic job; oiler, fireman-water tender, and
general engineroom experience for the engineman.
Employment of crane and derrick operators,
and bus, truck, and tractor drivers on the docks,
and particularly in ship holds, is expected to
continue increasing. Between 1950 and 1960,
Census data show that the number of crane and
derrick operators increased by more than 60
percent, while bus, truck, and tractor drivers
increased by more than 40 percent.
Laborers (primarily longshoremen) declined
in number from 58,000 to 53,000 in the same
period. Expected future declines in the em
ployment of laborers, caused by cuts in gang
sizes in some ports, as provided in recent labor
contracts, may be partially offset by traffic
increases.
Some Issues and Examples of Adjustment
Adjustment to mechanization is a primary issue
in the maritime industry. The anticipated dis
placement due to shipboard manning changes
involves about 2,000 jobs through 1970. A
mediation procedure was established in 1965
by shipowners and unions to resolve jurisdic
tional disputes resulting from the newly auto
214
mated machinery and procedures adopted
aboard recently built ships. One maritime un
ion, negotiating for 21,000 members, obtained
60 days of paid vacation after 1 year of con
tinuous service in the industry, up from the
previous level of 60 days for continuous em
ployment with one company or 30 days of vaca
tion for 1 year of employment in the industry.
New pension benefits are $150 per month, up
from $125 per month, effective in June 1965.
These pensions, paid after 20 years of service
regardless of age, are financed from the funds
provided by employers through the diversion of
the 25 cents per man-day which was paid into
an Employment Security Fund for the period
from July 1, 1963 through June 15, 1965. Re
tirement, with reduced benefits at age 65, is
permitted for those who do not have 20 years
of service.
Since June 16, 1965, the companies pay an
additional 25 cents per man-day into the Em
ployment Security Fund to aid in meeting the
impact of automation. A joint committee is to
be set up to investigate problems.
West Coast longshore industry Mechanization
and Modernization Pact. Employers pay $5 mil
lion a year until July 1966 into a fund which
is used for pension benefits, and to guarantee
wages to men registered at the time of the
agreement’s execution. Two million of the $5
million annually paid is viewed as payment to
the men for giving up rights in previously
negotiated work rules.
There is a flat guarantee against layoff and,
in addition, workers who receive less than 35
hours of straight-time pay in a week will be
brought up to that level. To date, it has not
been necessary to use the provision guarantee
ing wages.
Voluntary and mandatory early retirement
provisions are important parts of this settle
ment. Payments for early retirement are $220
per month from age 62, when retirement is
permitted, to age 65, when retirement is com
pulsory. When the worker retires at age 65,
he receives a lump sum of $7,920, equivalent
to 36 monthly payments of $220. Under manda
tory early retirement, agreed to in collective
bargaining, workers can be retired at age 62
with 22 years or more of service. Payments are
$100 a month above the $220 monthly payment
due upon voluntary retirement, until age 65,
when social security benefits may be drawn.
The mandatory provision has not been applied.
The longshore gang size will be reduced in New
York, but the force will have a Guaranteed An
nual Wage. Under the 1965 agreement, long
shoremen registered as of April 1, 1965, and
who work a total of 700 hours or more between
that date and April 1, 1966, are guaranteed
1,600 hours, or its equivalent in wages, for the
duration of the contract. The Guaranteed An
nual Wage was not included in other port settle
ments, although in Baltimore the employer
group guarantees, for the contract period, con
tributions for a minimum of 16 million man
hours to be paid into the pension and welfare
funds. The size of the general cargo gang will
be reduced starting April 1,1966, from 20 to 18,
and the following year, to 17 in New York.
Training programs have been established
through collective bargaining. New schools have
been set up through cooperation of labor unions
and steamship lines to train men for the new,
centrally controlled ships. The curriculum con
sists of 4 weeks’ academic and 2 weeks’ ship
board training. Many of the 100 men who have
graduated from the school have defrayed their
own expenses.
For the N.S. Savannah, the engineers had
special training prior to sailing. Another group
received 11 months training while the ship was
in operation.
Shortages of licensed engineers for recom
missioned ships for defense purposes have re
sulted in a program by the Marine Engineers
Beneficial Association (MEBA) and the Sea
farer’s International Union to upgrade unli
censed engineering employees to a licensed
status. Under the new sytem, pension and bene
fit rights earned in previously unlicensed status
will be credited to equivalent funds in the li
censed category, so that their benefits will be
paid on the basis of the combined credits. The
MEBA has waived its customary $1,000 initia
215
tion fee and trainees will receive $110 per week
for a period of 30 to 90 days, the duration of
the training period, depending upon the amount
of training required. Union officials expect that
about 250 unlicensed personnel will be upgraded
in the training program’s first year.
In addition to the unions’ programs, the De
partment of Labor, in cooperation with the
MEBA, is studying the feasibility of establish
ing a program to upgrade ship engineers. The
program would be financed by Manpower, De
velopment, and Training Act funds.
Selected References
Technology
Annual Report of the Maritime Administration, U.S. Department of Commerce,
October 1964.
Dillon, E. Scott; Fixman, Carl M .; and Tangerini, Caesar. Mechanization in the
Maritime Administration Cargo Ship Replacement Program, Maritime Adminis
tration, U.S. Department of Commerce, Presented to the Joint Meeting of the
Chesapeake and Philadelphia Sections of the Society of Naval Architects and
Marine Engineers, Oct. 17, 1964.
Erler, Raymond J. and Weinstock, Jack K. Technical Studies in Cargo Handling—
VIII, “ Re-examination of Automated Ships,” Report 61-68, University of Cali
fornia, Los Angeles, April 1962.
Maritime Cargo Transportation Conference. San Francisco Port Study: Descrip
tion and Analysis of Maritime Cargo Operations in a U.S. Port, Washington, D.C.,
National Academy of Sciences-National Research Council, 1964, 2v. (NRC
publication 1140A.)
Merchant Ship Automation Study, “ Summary and Recommendations,” No. 262
R 0011, Prepared by Norden Division, United Aircraft Corporation for Maritime
Administration, June 20, 1961.
Progress in Cargo Handling, Volume IV— Research, Proceedings of the Sixth Bien
nial Technical Conference of the International Cargo Handling Coordination
Association, London, October 1963, Fairplay Publications, Ltd., London, 1964.
Manpower
Fairley, Lincoln. “ ILWU-PMA Mechanization and Modernization Agreement,”
Labor Law Journal, July 1961, pp. 664-680.
Groom, Phyllis. “ Hiring Practices for Longshoremen,” Monthly Labor Review,
November 1965, pp. 1289-1306.
Hays, George. “ Automation in the Port of Baltimore,” Employment Service Revieiv,
U.S. Department of Labor, Manpower Administration, April 1965, pp. 23-24, 26.
Kennedy, Thomas. Automation Funds and Displaced Workers, Harvard University,
Division of Research, Graduate School of Business Administration, Cambridge,
Mass., 1962, pp. 70-128.
Kossoris, Max. “ Working Rules in West Coast Longshoring,” Monthly Labor
Revieiv, January 1961, pp. 1-10.
Shils, Edward B. “ Transportation’s Labor Crisis,” Harvard Business Review,
May-June 1964, pp. 84-98.
The Air Transportation Industry (SIC 4 5 1 , 4 5 2 )
percent, compounded annually, resulting in
nearly 4 billion ton-miles in 1970, compared
with 1.5 billion in 1963. The greater efficiency
of new jet freighters in collecting, handling, and
distributing cargo, is expected to stimulate sig
nificant rate reductions.
Summary of Outlook Through 197 0
Continuing increases in airline employment
are expected through 1970. Rising demand for
air transportation service will more than offset
growing efficiency in manpower utilization.
Short- and medium-range passenger craft and
convertible passenger-cargo planes will be em
phasized in new jet aircraft purchases. Addi
tions to the fleet, however, will depend on the
rate of growth of demand, and excess capacity
may be reduced. Continuing improvements are
anticipated in flight and nonflight equipment,
coupled with a larger role for electronics in all
areas of operation. Another round of new tech
nology, involving both subsonic and supersonic
transports and vertical or short takeoff and
landing craft, is a possibility by 1975.
Prospects of shortages of technical personnel
are resulting in the establishment of special
training programs. Many collective bargaining
agreements provide for training and retraining
programs to meet the impact of technological
change.
Outlook for Technology and Traffic
Growth of air traffic is 'projected at a high rate.
A measure of industry growth, overall revenue
ton-miles (combined passenger and cargo tonmiles), increased at an average annual rate of
15.8 percent between 1947 and 1957 and at the
slower rate of 10.1 percent between 1957 and
1964. Current industry estimates are that pas
senger traffic will show, through 1970, an an
nual increase of 7 to 10 percent assuming
continuation of favorable business conditions.
Between 1962 and 1964, passenger traffic in
creased at an average annual rate of 15 percent,
returning to its postwar level after growing at
the rate of 7 percent between 1959 and 1962, the
first years of the jet age. Since only a small
percentage of the population now travels by
air, a considerable longrun growth potential in
passenger air traffic is indicated.
Revenue ton-miles of aircargo more than
doubled between 1957 and 1963. Industry ex
perts expect aircargo to grow at more than 20
216
Emphasis in new passenger planes will he on
medium- and short-range jets. These planes
will release a number of long-range planes from
short-route to long-route service for which they
were designed. Some long-range planes includ
ing “ convertibles,” of improved design for rapid
conversion between cargo and passenger serv
ice probably will be acquired. As of January
1965, 663 turbojet aircraft were on order for
1965-69 delivery, and placement of more orders
was expected. The acquisitions are for addi
tional capacity and replacement of more than
1,000 aging piston planes. In mid-1965, jets
accounted for over 75 percent of total revenue
mileage.
In 1964, the first three-engine medium-range
jets (1,000-1,500 miles) were placed in service,
and in 1965, the first two-engine short-range
jets (100-1,000 miles) were delivered. These
second generation jets, well suited to small air
port operation, are speedier, more efficient, and
will provide greater comfort than the craft they
replace. Indicative of the extension of passen
ger service by jets is the fact that local service
airlines, none of which had previously flown
jets, are among the buyers of the short-range
craft. Estimates are for a minimum world mar
ket of 1,000 short-range jets by 1975. (His
torically, U.S. airlines have operated about 60
percent of all transport aircraft.)
An increase in the types of available all-cargo
aircraft will expand aircargo service. All-cargo
aircraft will fly directly between more cities.
Local service airlines are converting small pis
ton planes to all-cargo usage, medium-range jet
freighters are scheduled for delivery in 1966,
and the C-141 military freighter has been made
available for civilian use. The C-141 is a large
jet designed to carry one or more standard
containers interchangeable among railroads,
217
trucks, and ships. Loaded from the rear at
truck bed height, the airplane can take off fully
loaded from the 6,000-foot runways common
to some 600 U.S. airports, while only about 60
airports can handle other large-cargo jets. A
civilian version, with delivery possible for 1967,
will accommodate a much greater volume of
cargo, making possible a reduction in the cost
of airfreight at reasonably assumed load fac
tors (ratio of capacity to revenue tonnage). In
1964, U.S. airlines operated 32 jet freighters,
and 38 were on order. It is estimated that 125
or more large-cargo jets will be in service of
the airlines by 1970. In addition, the holds of
passenger jets carry substantial cargo tonnages.
A more automated air traffic control system is
due by 1975. The new system, built around
radar, automatic altitude reporting devices, and
electronic computers, is expected to provide
semi-automated en route control of air traffic
using fewer locations. Greatly improved termi
nal control also is contemplated. Airlines are
outfitting their planes with beacon transponder
equipment capable of automatically identifying
aircraft and reporting altitude to ground traffic
controllers. The Federal Aviation Agency
(FAA) is installing, at airports and inter
mediate stations, modern radar that will re
ceive and display altitude information received
from planes. Other important components of
the projected system, particularly the data proc
essors, are being evaluated in pilot operations
around the Nation. More advanced equipment
is being tested at the National Aviation Facili
ties Experimental Center. The new system is
expected to require fewer en route control posi
tions, and thus cause some reduction in FAA
control personnel; but increased amounts and
complexities of electronic equipment may re
quire more FAA maintenance personnel.
Self-contained navigation systems permit safe
transoceanic flight without ground based aids.
Two new self-contained navigation systems,
which permit reliable aircraft orientation with
out contact with ground equipment, are being
installed in transoceanic craft. These are Dopp
ler radar and a system of inertial navigation
based on precision gyroscopes. Both systems
may provide for greater flight frequency in
overseas airlanes, more efficient flight through
accurate navigation, and a capability for threeman operation of transoceanic jets instead of
the existing four-man crews.
All weather binding systems are being installed.
Present minimum landing requirements are
200-foot ceilings and one-half mile pilot visi
bility. It is estimated that more than half of
annual airline revenue losses, due to weather de
lay and cancellations, which amount to nearly
$100 million, could be eliminated by halving
these landing requirements. At least two air
lines are testing different versions of airborne
equipment (computers, radio altimeters, im
proved auto pilots, etc.), which, with suitable
airplane qualities, permit landings and takeoffs
at 100-foot ceilings and quarter-mile visibility.
The equipment utilizes improved localizer and
glide slope beams of the existing instrument
landing system. Installation in suitable air
transports may begin in 1966. Ultimate goals
of ceiling zero and visibility zero at major air
ports appear to be a decade away, although,
according to some authorities, 100-foot ceilings
may be adequate.
More complex electronic data-processing and
communications systems have been developed.
Computers are used increasingly in all airline
operations that demand data manipulation at a
rapid rate or in large amounts, such as mainte
nance flow control, flight planning, communica
tions switching, ticket reservations, inventory
New dimension in freight transport is marked by transfer of
railway containers between truck and jet freighter.
218
EMPLOYMENT, REVENUE TON-MILES, AND EQUIPMENT
IN THE AIR TRANSPORTATION INDUSTRY
T h o u san d s of Em ployees
B illio n s of M iles
Num ber of Tu rb o -Je t Tran sp o rts
6 00
1958
Sources:
'59
'60
'6 1
'62
’6 3
'64
*65
1966
Employment, Bureau of Labor Statistics; revenue ton-miles, The Civil Aeronautics Board; carrier fleet, Federal Aviation Agency.
219
control, transmission of air bills, preparation of
cargo invoices, and routine accounting func
tions.
There are 11 new airline reservations facili
ties which are integrated data exchange sys
tems that incorporate the world’s largest data
processors, many remote input devices, and
thousands of miles of communications. These
networks have enough excess capacity to accom
modate considerable industry growth.
In addition to processing its own reserva
tions, one company’s system can handle 30,000
daily calls from other airlines, record the pas
senger’s name and any special services re
quested; automatically advise the agent when
the passenger needs to be telephoned; compile
waiting lists for fully booked flights; and se
lect passengers on a priority basis when can
cellations occur. This system can maintain an
automatic check on ticket-time limits; convey
advice on space not likely to be used; and com
pute daily load factors by flight and by airport.
By means of this system, management can also
learn customer habits in making reservations,
the percentage of total business received from
other airlines, and the effect of advertising on
total reservations.
Three new types of air transports now under
development may dramatically increase the
scale of air transportation. The supersonic
transport (SST), designed to operate princi
pally in long haul markets at speeds up to 2,000
miles an hour, will reach the earth’s most dis
tant point in only 6 to 7 hours. Many problems
of engineering and economics yet are to be
resolved.
Another probability is a subsonic jet with
greatly improved convertibility between cargo
and passenger traffic, excellent short takeoff
and landing characteristics, and unique loading
methods. It will be capable of carrying 500 or
more passengers or 100 or more tons of cargo,
and doubling as an airbus or a freighter as the
need arises. With provisions for improved air
port access, this jet might make airlines com
petitive with buslines. As a freighter, it might
compete directly with trucks for many com
modities on shorter ranges. Both the SST’s
and the airbuses (or freighters) are potentially
several times as productive as today’s jets.
Finally, the metroplane, a vertical or very
short takeoff and landing craft (VSTOL), will
probably operate between city centers (less
than 500 miles apart), the distance in which
most travel occurs. VSTOL craft (probably
improved helicopters) also can decrease travel
time between the airport and midcity and sub
urban concentration points which now absorbs
a relatively large proportion of total trip time.
In the 1970’s, air transports virtually will be
flown by airborne computers capable of process
ing information from weather, navigation, and
traffic control satellites. The flight crews’ prin
cipal function likely will be to monitor the sys
tem and take over in emergencies. Radio re
porting will be largely automatic, eliminating
human reaction time, and freeing the pilot for
other duties. Collision avoidance systems may
be developed to advise the computer (or pilot)
of potential collision and suggest corrective
action.
Rise in expenditures for plant and equipment is
expected to contimie. Between 1958 and 1963,
the airlines spent more than $3 billion, pri
marily for new jet aircraft and ground support
facilities. Expenditures averaged more than
$500 million a year compared with around $225
million between 1950 and 1958. These trends
are expected to continue at an even faster pace.
Aircraft valued at $3.7 billion are scheduled for
delivery after 1964, and additional orders are
expected.
Manpower Trends and Adjustments
Continued rapid growth of employment is ex
pected. Between 1947 and 1957, employment
in air transportation grew at a compounded
average annual rate of 6.2 percent, rising from
82.000 workers to over 148,000. In the 1957-64
period, the growth rate slowed to 3.7 percent
annually, reflecting the impact of rapidly ad
vancing technology. Employment in 1964,
nevertheless, exceeded 190,000. Jet age em
ployment has been characterized by alternating
periods of rapid and slow growth. Of 42,000
wdrkers added since the first jet was flown,
23.000 were added before 1960 and 10,000 after
1963. In the future, growth is expected to
stabilize at about 4-percent-per-annum, with
220
Average annual percent change
All employees
1947-57 __________________________________
1957-64 __________________________________
Revenue ton-miles
1947-57 ___________________________________
1957-64 ___________________________________
6.2
3.7
15.8
10.1
the level of employment approaching or exceed
ing 300,000 by 1975.
Increased employment is accompanied by occu
pational change. A few occupations have dis
appeared; many others are shifting in relative
importance. Jobs of navigators in transoce
anic flight and flight engineers on jet aircraft,
for example, are being eliminated and the
workers retrained as pilots. Communications
operators’ employment is declining as the result
of more advanced radio and telecommunica
tions. Flight deck employment first declined
as jets replaced a larger number of piston
planes, but an upsurge in passenger traffic after
1962 required additional aircraft and higher
daily utilization rates and resulted in increased
flight deck employment.
Increases in field maintenance and overhaul
shop employment and shifts in employment
composition, involving fewer engine overhaul
mechanics and more airframe and systems me
chanics, reflect both the increased simplicity
and reliability of the jet engine and the in
creased complexity of the electrical, electronic,
hydraulic, and other aircraft systems. Air
freight sales and handling personnel may well
grow rapidly. Other airline employment may
increase somewhat because of the growing de
mand for air transportation and increasing size
of the industry.
Length and degree of training are increasing.
The airlines required 10 hours of training to
transfer a pilot from a small to a large piston
plane, but shifting that same pilot to a more
complex jet requires from 20 to 50 hours of
training. The initial costs of training cockpit
personnel of -piston planes to make the transi
tion to jet aircraft was many millions, exclusive
of the costs of new training equipment and
periodic rechecks.
Increases in training requirements also affect
a wide range of other operations including flight
planning, fuel management, emergency pro
cedures, maintenance, and ground operations.
For example, the operators of the world’s larg
est jet overhaul base claimed that up to 18
months are required to bring an engine over
haul mechanic to an acceptable level of effi
ciency, notwithstanding any previous experi
ence.
Training and retraining is a continuous proc
ess, affecting virtually all employees. In connec
tion with the installation of a large reservation
system, for example, the jobs of 1,000 clerks
and 85 supervisors were eliminated, and the
employees were transferred to other jobs after
appropriate retraining. Annual costs of train
ing and retraining have been estimated at
around $60 million. For supersonic planes,
training will be more rigorous, and more costly.
Threatened shortages of airline technical per
sonnel are forcing special programs. A decline
in the number of persons available from mili
tary aviation (one of the traditional sources of
airline flight and technical personnel) may in
dicate a future shortage of needed skills. The
Aviation Human Resources Study Board, con
vened by the Federal Aviation Agency, recom
mended in 1964 establishment of consolidated
industry training programs, use of on-the-job
and apprentice training programs, and utiliza
tion of Federal vocational education programs.
Adjustments of disputes over employment of
navigators and flight engineers have been made.
The introduction of jetplanes and new naviga
tional devices led to disputes over employment
of navigators and the three-way conflict be
tween the airlines, the pilots, and the flight en
gineers over the rights and duties associated
with the third seat in the jet cockpit.
One agreement provided for the ultimate
replacement of navigators by automatic equip
ment. The displaced employees were allowed
severance pay and continued participation in
group hospitalization insurance and pension
plans. Another agreement provided that flight
engineers, after training, should have prior
rights to employment as pilots or could accept
severance pay and continued participation in
221
group life and medical insurance plans and
pensions.
New agreements have been reached on man
ning the shorter range jets that utilize two-man
cockpit crews. The shorter range jets are
replacing DC-6’s and DC-7’s which are manned
by three men. It was estimated that 52 small
jets would 'eliminate about 250 jobs, the num
ber increasing as the number of new aircraft
increases.
Selected References
Technological Developments
Booda, Larry. “ New 12,000 Mile Cargo Aircraft Is Sought,” Aviation Week and
Space Technology, Nov. 18, 1963, pp. 26-27.
Craig, Thomas R. Forecast of Free World Air Freight Traffic. Report sponsored
by the Boeing Company, Renton, Wash., April 1964.
Halaby, Najeeb E. “ The Impact of the New Technology— The FAA View,” in Issues
and Challenges of Air Transportation II. Report of Symposium sponsored by the
Connecticut General Life Insurance Company, Hartford, Conn., May 15-17, 1963,
pp. E2-E10.
Hibbard, Hall W. “ The Lift Liner, Vertical Rising Airbus of Tomorrow.” Advance
paper prepared as background for Symposium, Issues and Challenges of Air
Transportation (supra).
Hoffman, David. “ Big Lift For Air Cargo,” Aerospace, June 1963, pp. 20-24.
Klavs, Phillip J. “ All Weather Landing Progress,” Aviation Week and Space
Technology, October 7, 1963, pp. 169-173.
U.S. Congress, Senate, U.S. Commercial Supersonic Aircraft Development Program,
Hearings Before the Aviation Subcommittee of the Senate Committee on Com
merce, 88th Cong., 1st sess., 1963.
Manpower Trends and Adjustments
Blum, Albert A. “ Fourth Man Out— Background of the Flight Engineer— Airline
Pilot Conflict,” Labor Law Journal, August 1962, pp. 649-657.
Employment Requirements and Changing Occupational Structure in Civil Aviation
(BLS Bulletin 1367, June 1964).
Federal Aviation Agency. Report of the Aviation Human Resources Study Board on
the Manpower Requirements of the Civil Aviation Industry, Oct. 1, 1964.
O’Brien, Joseph L. “ Automation and Job Security.” Remarks before the Labor
Relations Council of the National Chamber of Commerce, Boston, Mass., Aug. 14,
1964. (Mimeographed.)
Recent Collective Bargaining and Technological Change (BLS Report 266, March
1964), pp. 7-9.
The Telephone Communication Industry (SIC 4 8 1 )
networks for voice and data are already in
stalled in a few large corporations and the Fed
eral Government; by 1970, approximately 45
to 50 will be in service. Businesses using regu
lar telephone facilities can obtain service pack
ages which include direct long-distance dialing
from any extension, incoming calls dialable to
any extension, conference calls, internal dicta
tion systems using extension lines, paging and
alarm systems, devices to distribute calls among
a number of answering attendants, and auto
matic data transmission from remote input sta
tions to central computers.
Telephone facilities for television transmis
sion, including smaller closed-circuit facilities
for banks and retail stores, are also increasing.
Picturephone service, introduced in 1964, is
being used by business for sales promotion and
job interviews. New pushbutton telephones,
first installed in 1963, will eventually be able
to connect households with receivers and com
puters in banks, retail stores, and other busi
nesses. By 1970, individuals using the push
button telephone may be able to order merchan
dise, pay bills, make inquiries, and handle other
business transactions by communicating di
rectly with computers or related business ma
chines. Order takers, salespeople, and other
clerical workers in retail trade and service
industries may be affected.
Summary of Outlook Through 1 97 0
Telephone communications services are ex
pected to expand substantially. Services to
businesses may increase much more than serv
ices to households; long-distance and overseas
calls may grow faster than local traffic. Major
technological advances are taking place, in
cluding electronic switching, communications
via satellites, and a wide variety of automatic
equipment for operations and maintenance.
Employment may remain fairly stable or
rise slightly. The number of operators, clerical
workers, and employees placing wire and cable
will remain about the same. Employment of
highly skilled installers and repairmen who
work with business communications systems,
sales engineers who promote these services, and
central office craftsmen will increase. Skill
levels of nonsupervisory employees working
with some types of the newest equipment ap
pear to be rising. In this industry, manpower
planning and training techniques have been
used to adjust the work force to new equipment.
Outlook for Technology and Markets
A major expansion of services is expected. Tele
phones are expected to increase from 89 million
in 1964 to 118 million by 1970, or at roughly
5 percent a year. Long-distance (toll) calls
(5.2 billion in 1964) are expected to grow in
volume faster than local calls (about 112 billion
in 1964), rising about 7 percent a year to 15
billion by 1980. Long-distance calls may rise
even faster, due partly to lowered rates. It is
estimated that the “ after nine” long-distance
rate reduction in early 1963 stimulated 16 mil
lion additional calls during its first year. An
increasing proportion of operating revenues
is coming from special equipment and services
such as dataphone and private-line services.
In 1964, these amounted to 25 percent of op
erating revenues; a decade previously, only
10 percent.
Very rapid growth will take place in data com
munication. Data and facsimile transmission
enable businesses to link warehouses with sales
offices, to make and confirm reservations at any
number of remote locations (hotel and trans
portation systems), to transmit data from re
gional offices to a central computer (insurance
companies, banks), or to set type at a remote
printing plant. In 1965, data communication
installations are expected to total 40,000 sets,
and a rapid increase is in prospect.
Capacity of carrier systems is being greatly
expanded by developments in transmission, re
quiring less construction for each “ conversa
tion.” Microwave carrier systems have in
creased rapidly; they now carry half of all in
A variety of communications services to busi
ness is being introduced. Private switched
222
22 3
terstate long-distance communication. Most
importantly, the capacity of existing cable and
microwave routes is being expanded many times
by new transmission techniques, such as time
division multiplexing which squeezes more
conversations into each circuit. Advances in
frequency division multiplexing are also ex
panding transmission capacity. Currently ex
perimental, millimeter waveguide and laser
(light beam) transmission have a potential ca
pacity of thousands of times more circuits than
the most advanced present carriers. However,
because they are affected by weather, current
predictions for prototype waveguide systems by
the late 1970’s (or laser systems by the early
1980’s) envision underground or undersea tubes
to carry the beam.
Capacity for overseas telephoning is being ex
panded rapidly with growth in U.S. world trade.
Transistorized ocean cables, six times larger
than cables laid last year, are planned for 1968
— but will not be laid if satellite relay systems
are fully operating. By 1980, some industry
experts predict that satellite relay systems
(requiring a few ground stations, but no cables)
will be transmitting two-thirds of the interna
tional traffic, which is expected to increase twen
tyfold. The satellite will be able to relay broad
band microwave signals, permitting television,
data, and voice transmission.
Electronically switched central offices will per
mit a wide variety of new services and econo
mies.
Electronic switching, serving over
65,000 lines in 1965, will be extended to nearly
30 percent of all lines by 1975. Service changes
can be made simply by altering circuit “ mem
ory,” which now can be done only by physically
altering and rewiring equipment. Under cer
tain circumstances, electronic equipment takes
up only one-fifth the space required for present
electromechanical machines, and greatly re
duces maintenance— the system periodically
checks itself and identifies the location and na
ture of faults. On-site repair consists chiefly
of pulling out and replacing defective circuit
cards. The printed circuit card may be returned
to its manufacturer for rebuilding, or thrown
away.
Automatic long-distance dialing is being ex
tended. About 60 percent of all long-distance
calls in 1964 were dialed and automatically
Defective circuit card is replaced in telephone electronics central office after being located by computer.
224
billed; this proportion is expected to rise to
80 percent by 1970, 90 percent by 1975. New
Traffic Service Position (TSP) equipment auto
matically switches person-to-person, collect,
credit card, paystation, and other special serv
ice calls with only momentary operator inter
vention. By 1970, it is expected that TSP’s will
be installed throughout the Bell System, elimi
nating virtually all manual switchboards. By
the early 1970’s, also, it may be possible to dial
nearly everywhere in the world (operator over
seas dialing is growing rapidly at present).
Placing and maintenance of cable and ivire are
being simplified. By burying cable and wire
in new housing developments before landscap
ing, and by prewiring houses, office buildings,
and apartments during construction, subse
quent telephone installation is simplified. Wires
are being permanently assigned ( “ dedicated” )
from the central office to an address, eliminating
rearrangement each time service is disconnected
and a new customer moves in ; simplifying the
training of new engineering personnel; and re
ducing engineering, installation, and reconnect
costs. Placing cables under air or gas pressure
(which both protects the cable from water dam
age and expedites location of leaks), and use of
plastic insulation, simplified splices, and connec
tions, greatly cut maintenance time and skill
required.
Computers are extensively used. There are over
400 computers in the Bell System alone. Ap
plications cover a variety of functions: e.g.,
customer billing, traffic and plant planning,
equipment ordering, inventory control, line as
signment, directory composition, and directing
the flow of traffic through long-distance net
works. These functions affect professional and
clerical employees.
An optical scanner is now used in a least one
State to read all bill payments and feed data
into a computer which automatically updates
customer accounts. Computer searching as a
substitute for manual directory searching by
information operators is in trial stages (in
formation calls represent 2.5 percent of all
originating calls). Computer-directed semi
automatic answering of intercept calls (wrong
number, changed number, etc., representing 1
percent of all originating calls) is already
operating in one large city. After an operator
“ keys in” the called number, this system deter
mines the reason for intercepting the number,
“ remembers” the proper answer to be given to
the caller, then composes the answer from a re
corded vocabulary and “ responds” vocally to
the caller. A fully automatic system is under
development.
The fast pace of technological change is re
flected in heavy outlays for new construction
and research. Outlays for new plant and
equipment in 1965 are estimated at about $4.5
billion, about 10 percent more than in 1964. The
rapid technical advances in telephone communi
cations are based on extensive basic and applied
research in a wide variety of scientific fields.
Manpower Trends and Outlook
Employment is expected to remain fairly stable,
or rise slightly, over the 7iext 5 years. During
the period 1947-57, total employment rose about
2.8 percent a year, from 585,500 to 768,200. Be
tween 1957 and 1964, employment declined by
1.2 percent annually, to 706,100. Because of
technological advances, about the same number
of employees probably will be able to handle the
greatly increased volume of service projected
for 1970.
Occupational structure— altered in the past 15
years primarily by long-distance dialing— will
undergo further change. Conversion from man
ual switching of long-distance calls to operator
dialing, and then to customer dialing, has re
duced the proportion of operators from 46 per
cent of all employees in 1947 to 27 percent in
1964. In Class A carriers, the number of op
erators fell 83,000, or 32 percent. Further laborsavings are expected when long-distance
dialing is extended to person-to-person, collect,
and other special service calls. Customer dial
ing of station-to-station calls reduced labor re
quirements for an identical mix of calls by an
estimated 25 percent. An additional laborsav
ing of 25 to 30 percent is expected on special
service calls handled through TSP. Automatic
intercept, now being developed, could eventu
ally eliminate virtually all intercept operators.
22 5
EMPLOYMENT , NUMBER OF TELEPHONES, AND OPERATING
REVENUES IN TELEPHONE COMMUNICATION
Thousands of Employees
1947
'49
'51
'53
*55
'57
*59
'61
*63
1965
Billions of Dollars
Sources:
Employment, Bureau of Labor Statistics; telephones and revenues, U.S. Independent Telephone Association.
226
Average annual percent change
All employees
1947-57 __________________________________
2.8
1957- 64 _________________________________ — 1.2
Nonsupervisory employees
1958- 64 _________________________________ - 1 . 3
Number of telephones
1947-57 __________________________________
6.2
1957-64 __________________________________
4.8
Operating revenues
1947-57 __________________________________ 11.1
1957-64 ___________________ t _____________
7.7
Clerical employment is being reduced. Despite
expansion in business operations, nonsuper
visory clerical employment has stabilized at
about one-fifth of the total, but could decline as
a result of extended use of computers. Plant
clerks in line assignment groups will continue
to be reduced by “ dedicated” plant and com
puters. Some further reduction in accounting
employees may take place as electronic data
processing is extended; the impact has already
been felt in processing of customer bills. Cleri
cal sales jobs may increase.
Professional and semiprofessionnal employ
ment will continue to grow. The group includ
ing engineers, programers, analysts, etc., in
creased from 5 percent of all employees in 1947
to 10 percent in 1964. Some technical employ
ees who determine optimum traffic paths under
varying conditions may be affected by the in
troduction of computer control of the long
distance network, now in pilot stages.
Construction, installation, and maintenance em
ployees are becoming increasingly important.
By 1970 this group may include 1 out of 3 tele
phone workers. The number of installers and
repairmen is growing particularly rapidly de
spite laborsaving techniques enabling these em
ployees to handle their fast-increasing work
load more efficiently. Line and cable workers,
however, are declining in number as mecha
nized equipment, such as ditch-diggers and pole
placers, and self-supporting cable, eliminates
the heavy labor which required large crews.
With heavily equipped trucks, line construction
crews have been reduced from four or five men
in 1955 to two, with several trucks under a
single roving supervisor.
The skill level of some central office maintenance
workers may be lowered in electronic central
offices. Craftsmen who test and repair switch
ing and transmission equipment increased from
5 percent of all employees in 1947 to 9 percent
in 1964. However, highly skilled testing, faultlocating, and rewiring will decline in electronic
central offices; lower skilled maintenance work
ers will become relatively more important.
Some occupations requiring advanced technical
skill are evolving at the highest nonsupervisory
levels. For example, the installation and mainte
nance of data communication stations, radio
telephone, microwave, and private networks
require extensive advanced training (usually
provided by the telephone companies) ; radio
licenses in some cases; broad knowledge of the
telephone system; and responsibility for ex
pensive equipment and service maintenance.
Job combination is taking place. Widespread
use of polyethylene insulated cable, which sim
plifies splicing, has already blurred the onceclear distinction between cable splicers’ and
linemen’s duties. Long-distance dialing elimi
nated many specialized operator jobs, leaving
the remainder to be consolidated into a single
“ operator” job with a wider variety of tasks to
perform. Combination sales-engineering jobs
are growing with the demand for complex busi
ness communications systems. In the future, a
combination of sales, installation, and collection
work may be handled by one coin service
(paystation) man.
Some Issues and Examples of Adjustment
Labor displacement because of technological
change is being minimized through advance
planning. Changes are introduced gradually,
locality by locality, with advance notice of sev
eral years often given. Since a large proportion
of the groups affected have been women (op
erators and clerks) with relatively high turn
over, it has hitherto been possible to make most
adjustments in the work force by not filling
227
vacancies. Part-time and temporary employees
are hired during- the transition. Surplus em
ployees are offered transfers to other offices.
Movement is facilitated by the “ portability,”
within the Bell System, of pension rights and
such seniority rights as apply to length of va
cation and sick leave. Seniority in choice of
shifts and vacation dates, however, may be
temporarily lost by transferred employees.
Telephone companies operate extensive training
programs. Because of rapid technological
change, a telephone worker may go through sev
eral courses of training and retraining during
the course of his employment. New techniques
of instruction are being introduced, such as pro
gramed courses in basic electricity, operator
procedures and salesmanship. Taped training
programs, simulating actual traffic, are built
into the equipment for TSP operators.
Industry unions are seeking to upgrade pay
structures to take account of the impact of tech
nological change on jobs. A committee of the
Communications Workers of America studying
job structure in 1961, for example, concluded
that operators are now required to exercise
more judgment and handle a larger variety of
calls. After surveying 1,000 plant and clerical
employees, the committee reported that some
plant jobs which deal with installation and
maintenance of complex, modern equipment re
quire a higher level of skill than formerly. The
committee recommended the establishment of a
series of technician job titles for which pre
mium wage rates should be paid. It also found
that some clerical jobs require more judgment,
responsibility, or a broader knowledge of com
pany facilities than formerly.
Unions are seeking to restrict contracting out of
construction. A 1959 BLS study of subcontract
ing clauses indicated that 20 of the 79 major
contracts in the industry, covering about a third
of all workers under collective bargaining agree
ments, limited subcontracting to some extent.
In one recent arbitration case, the union unsuc
cessfully contested a new company practice (in
one area of the country) of contracting out the
placing of cable and wires to employees of the
building contractor, rather than having it done
by telephone workers.
Selected References
Technological Change
“ Gas Lenses Show Promise for Long Distance Laser Communication,” Bell Labora
tories Record, September 1964, pp. 294-295.
Goetschius, Herbert H. “ Microwave Today and Tomorrow,” Bell Telephone Maga
zine, Summer 1964, pp. 14-20.
Mallory, Frank. “ Planning for Obsolescence, Part I : Service Offering from Tomor
row’s Equipment,” Telephony, Nov. 7, 1964, pp. 65-66 and 160-161.
McKenzie, Alexander A. “ New Era in Telephony: Electronic Switching,” Elec
tronics, Oct. 19, 1964, pp. 71-86.
Trotter, Dr. Herbert. “ Communications in the Space Age,” Telephony, Nov. 3, 1962,
pp. 36-38 and 162-163.
USITA Traffic Bulletin. “ Information and Intercept Practices,” Telephony, May 16,
1964, pp. 35-37, 40.
228
Selected R eferences— Continued
Manpower Trends and Adjustments
Automation, Impact and Implications, prepared by the Diebold Group, Inc., for the
Communications Workers of America, AFL-CIO, April, 1965.
Beirne, Joseph A. The Job Revolution in Telephones, Communications Workers of
America, AFL-CIO Education Department, 1959.
Industrial Retraining Programs for Technological Change, (BLS Bulletin 1368,
1963), pp. 25-31.
Lovitt, B. J. “ Selecting and Developing Plant Men for the Future,” Telephony,
Nov. 7, 1964, pp. 80-81, 166.
Statement of Paul A. Gorman, Executive Vice President, American Telephone and
Telegraph Company, in New Views on Automation, Papers submitted to the Sub
committee on Automation and Energy Resources, Joint Economic Committee,
U.S. Congress, 1960.
Women Telephone Workers and Changing Technology, Women’s Bureau (Bulletin
286), 1963.
The Electric Power and Gas Industry (SIC 4 9 1 , 4 9 2 , and 4 9 3 )
natural gas (constituting over 98 percent of to
tal gas output) rose 7.4 percent annually from
1947 to 1957 and from 1957 to 1964 has ex
panded at an annual rate of 4.7 percent. Out
put is expected by the NPS to average an in
crease of about 3.6 percent annually between
1960 and 1980.
New processes in industry, such as in iron
and steelmaking, and increasing automation
and mechanization are expanding the industrial
uses of electric power and gas. More extensive
use of air conditioning and heating equipment,
including the heat pump and, recently, the heat
bank device for storing heat, are increasing
residential and commercial demand for electric
power. About 2 million homes are now electri
cally heated, and the industry aims for 19 mil
lion by 1980. Research has been recently inten
sified toward development of an electric batterypowered automobile, potentially significant in
counteracting air pollution, and estimated to
have a market for electric power which could
be large enough to double the industry’s present
sales.
Natural gas currently supplies about onethird of the energy requirement for homes, and
approximately 26 percent of the fuels used by
the electric utility industry. Total sales are
about 117 billion therms, and consumption is ex
pected to double in the next 20 years.
Summary of Outlook Through 1970
Output is expected to continue rising at about
the substantial rate of recent years. The high
annual rate of growth in output per man-hour is
expected to be maintained. Significant advances
in technology are occurring in the integration
and pooling of facilities using new transmission
techniques, in steam-electric generating plants,
nuclear power, special-purpose generators, au
tomatic and remote control equipment, con
struction and maintenance techniques, new
methods of power generation, and in techniques
of natural gas transmission, distribution, and
storage.
Stability in employment appears probable.
An increasing number of professional, techni
cal, and other skilled occupations will be re
quired as tasks increase in complexity. Con
tracting out of construction and maintenance
work is increasing. Retraining programs, nor
mal attrition, early retirement, severance pay,
and job transfers are being used by many com
panies in adjusting to technological change.
Outlook for Technology and Markets
Rapid growth in output is expected to continue.
The combined output of electricity and gas
(BLS composite weighted index) increased at
an average annual rate of 9.5 percent in the
period 1947-57, and 6.8 percent between 1957
and 1964. Net production of electric energy,
doubling on the average every decade through
out the industry’s 80-year history, grew at an
average annual rate of 8.2 percent between 1947
and 1964. The National Power Survey (NPS)
by the Federal Power Commission (FPC) esti
mates electric energy requirements will rise at
an average rate of 6.8 percent annually between
1960 and 1980, reaching 2.8 billion mw.h. in
1980 (a megawatt— mw.— equals 1,000 kilo
watts). Generating capacity has increased at
8.9 percent per year from 1947 to 1964. The
FPC expects capacity will rise to 542.5 million
kw. (including Canada, but excluding Alaska
and Hawaii) by 1980, an average annual growth
rate after 1960 of 7.6 percent. Production of
Process control computers are used increasingly
in electric power and gas operations. The elec
tric power industry, according to a survey by
Control Engineering (March 1965), had 120
digital process control computers, compared
with 80 in September 1963 and 17 in 1961. Gas
utility and pipeline companies had eight digital
process computers in dispatching and distrib
uting. Of the 120 process control computers in
electric power plants, 81 were in generating
plants and 39 in dispatching operations. Com
puter advantages in data logging, scanning,
alarming, and performance calculation tend to
make them standard equipment in new and in
many older large generating plants. Fuel sav
ings, increased safety, better records, and im
proved manpower utilization are claimed. Some
229
230
patch control from the system’s dispatching
center.
Of the 39 process control computers used in
dispatching in March 1965, 23 were being used
for economic dispatch and automatic load con
trol— operations principally concerned with dis
patching power over transmission lines and
coordination of generation and interchange.
The computer control system provides an effi
cient means of regulating and controlling gen
eration equipment to economically supply load
at proper voltage and frequency. The benefits
are direct dollar savings from instantaneous
signals, optimization of power production, con
tinuous generating unit control, and greater
reliability and accuracy. Less paperwork, rec
ordkeeping, and improved synchronization of
loads between cooperating utilities afford in
direct benefits.
One natural gas transmission company is us
ing automatic controls extensively. The control
of all gas flow and engines on the lines is exer
cised by the dispatcher on duty. Signals for
suction and discharge pressures, gas flow, and
engine speeds are transmitted over telephone
circuits and are displayed on the panel board in
front of the dispatcher. By pushing appropri
ate buttons on the control console, compressors
can be started and stopped and pressures con
trolled. Other companies are studying the feasi
bility of remote control systems.
(A) Fuel is loaded remotely into the reactor of a nuclear power
plant. (B) Electronic equipment is used to coordinate operations
of an entire gas pipeline system from a control center.
large plants have operations that are so compli
cated that safe operation requires a certain level
of automatic control.
Most power plant process control computers
are being used only for data processing, al
though control functions are possible and are
utilized in a few installations. As of 1965, three
installations have achieved full closed-loop con
trol in which an operator is needed only for ini
tial startup. Two separate computer systems
installed in one plant in 1964 serve two separate
generating units. These systems control initial
startup operations including checking prestart
conditions (performing prestart tests, boiler
ignition and warmup, and synchronization),
after which the unit is placed on economic dis
Remote controlled equipment is being used in
creasingly. Remote control devices are used in
conjunction with electronic data processing in
generating plants and dispatching operations
of electric utility systems and in the operation
of compressor stations of gas utility and pipe
line systems. Signals for remote monitoring
and control are carried by telemetry systems us
ing carrier current, leased telephone lines and,
more recently, by microwave. These systems
enable utilities to operate, over large areas, even
the most complex substations, with improved
reliability, efficiency, and safety and with sub
stantial savings in operating labor require
ments.
Size of steam-electric generating plants contin
ues to increase. Larger boilers and turbine gen
erators, increased plant size, and greater use of
231
outdoor construction, are sought because of re
sulting reductions in capital costs per kilowatt
of installed capacity and lower operating,
maintenance, and fuel costs per kilowatt hour
of electricity generated. The largest generating
unit in 1947 was about 208 m w.; in 1963, 650
m w .; and in 1965 a 1,000-mw. unit was in
stalled. A 900 mw. unit is scheduled for opera
tion in 1966, and one of 1,100 mw. is on order
for 1969.
Special mechanized equipment is being in
troduced to handle the increasing amounts of
coal needed in larger plants. In one installation,
coal is sent through a breaker machine which
produces pieces of uniform size and subse
quently is handled by an automatic stacking
reclaiming machine. Two control centers— one
at the car dumper house, the other in the plant’s
central control room— are used to operate the
entire system.
Use of improved special-purpose generators is
increasing. These generators, powered by gas
turbines, jet and diesel engines, are being used
increasingly to supply additional power during
peak load periods and for insulated service
areas. Such equipment is generally character
ized by lower equipment and installation costs
and lower labor requirements, but higher fuel
costs.
Pumped storage plants also are being used to
supply power during peak load periods. In
pumped storage hydroelectric plants, electric
energy, generated during nonpeak load periods,
is used to pump water from a lower pool to a
storage reservoir which is used in peak periods
to generate power. At present, 32 pumped stor
age projects are in operation, under construc
tion, or under active consideration, and an ad
ditional 69 sites have been identified as suitable
for development. The estimated total capacity
of all 101 sites is 36,000 mw.
Small, prepackaged gas turbine generating
plants, being introduced by the gas industry,
produce electricity on-site to meet lighting and
other demands for electricity in such commer
cial installations as apartment developments
and shopping centers. By the close of 1964,
there were about 200 so-called “ total energy’’
installations in addition to a growing number of
industrial gas turbine generators. Another pos
sible independent source for residential use may
be the natural gas fuel cell generator, which is
in experimental operation.
Advances in extra high voltage (E H V ) tech
nology make transmission of large blocks of
poiver more economical. Technological develop
ments in capacitors, conductors, conductor
hardware, transformers, and circuit breakers
have facilitated the application of alternating
current extra high voltage transmission (higher
than 230 kilovolts— kv.). Benefits from larger
generating units, coordinated pooling, exchange
of power, selection of more favorable generat
ing sites, and types of power supply are en
hanced by the use of extra high voltage electri
cal transmission. Several experimental test
installations are being used to resolve EHV
problems for voltages as high as 750 kv. Since
1955, over 4,000 circuit miles of 345 kv. line
have come into service, and additional lines are
under construction. During 1965, some 500 kv.
transmission facilities were energized and used
to transmit power. About 5,000 miles of 500 kv.
lines are planned for operation by the early
1970’s.
Improved EHV technology now makes pos
sible the transmission of large blocks of power
over longer distances, thereby making more at
tractive the development of large, remotely lo
cated hydro resources and the development of
mine-mouth plants (generating plants near
coal and lignite mines) in many sections of the
country. EHV transmission using direct cur
rent is also being constructed for economical
long distance point-to-point transmission.
Expansion continues in the integration and
pooling of poiver facilities. Increasing expendi
tures on coordination and integration are based
on assured high rates of increase in demand,
the economies of utilizing larger generating
facilities and associated transmission equip
ment, and the sharing of benefits due to diversi
ties of loads and resources. One major regional
intertie between the Pacific Northwest and the
Southwest is currently being conducted by sev
eral utilities, public and private. The FPC in
its National Power Survey suggested a possible
pattern of transmission by 1980 which includes
three major East-West EHV interties and
232
EMPLOYMENT, OUTPUT, OUTPUT PER MAN-HOUR, AND
CAPITAL EXPENDITURES IN ELECTRIC POWER AND GAS
Thousands of Employees
60 0
m m
m m
500
X
P r Dduction
—
— ■ :.............. 1 - ----------- ^
All i____1______ ~
nil C 1 1p iuyee5 ^
1
- —
Workers
400
\
1
Index (1957-59=100)
1
|
|
_____1
____ ____ 1
____ _____1
____
1
i
Ratio Scale
Sources: Employment, output, and output per man-hour. Bureau of Labor Statistics; expenditures, Securities and
Exchange Commission.
1
233
another long-distance interconnection between
the Northwest and Middle South, in lengths
ranging up to nearly 2,000 miles.
Improvements in technology have facilitated
expansion of transmission, distribution, and
storage of natural gas. New compressor sta
tions, powered by gas turbines, have simplicity
of design which, by ease of maintenance and
adaptability to automation and remote control,
save maintenance and operating labor. Re
cently developed techniques have made avail
able expanded facilities for underground stor
age pools for gas in depleted gas fields, salt
formations, and mined caverns, helping to as
sure greater reliability, flexibility, and economy
of supply. From 218,000 miles of natural gas
pipeline in 1945, the mileage has grown to about
736,000 miles in 1964. Larger diameter pipe is
being used, with one company having more than
11 miles of 42-inch diameter pipe in service.
Gas refrigeration (cryogenics) which reduces
a large volume of gas to a small volume of liq
uid (600-to-l reduction ratio at —259°F ),
makes gas storage more economical and pro
vides a local supply from which gas utilities can
meet peak demands. Shipment of liquefied gas
by water, rail, or truck is now commercially
feasible; shipments by sea from Mediterranean
to West European ports are on a regular sched
ule. Cryogenics may play a large role in the
desalting of sea water by a vacuum-freezing
vapor-compression process in which vaporized
gas or boil-off gas is used to refrigerate the salt
water to form ice.
Contracting out of construction and mainte
nance (with associated employment) to firms
outside the electric and gas utilities is increas
ing. Greater construction volume and larger,
more complicated plant and equipment are en
couraging contract construction of structural
items including all foundation work, and espe
cially construction of nuclear power plants.
Central maintenance (in which electric power
companies provide roving crews for their rou
tine plant-to-plant maintenance) is a growing
practice. Contracting for highly specialized
maintenance supervision also is increasing.
With the continuing search for gas reserves,
highly specialized contractors are increasingly
required to drill wells to 20,000 feet or more in
depths up to 600 feet of water at considerable
distances offshore, and to install pipeline sys
tems to bring gas to shore stations.
Construction and maintenance techniques are
undergoing change. Some of the innovations
in transmission system construction and mainte
nance include use of the helicopter, the aerial
lift, chemical weed control for maintaining
rights of way, use of lighter metals for struc
tures and conductors, and the barehand method
(in which the workman handling the energized
line becomes part of the circuit, with precau
tions against grounding such as working in
fiberglass buckets, and avoiding any other con
ductor) . These improvements have resulted in
reductions in work crew size, faster construc
tion and maintenance schedules, and changes in
work rules and practices. Using a helicopter to
carry men, materials, and even assembled struc
tures, one utility reduced overall construction
time of transmission lines by one-half. In one
company’s practice, use of the barehand method
with an aerial lift required about one-tenth of
the labor for conductor repair and about onefourth for insulator replacement compared to
conventional methods; the estimated annual
savings from barehand maintenance was about
$46,000 compared with the $30,000 purchase
price of the aerial lift.
Underground residential distribution (URD)
systems are being encouraged by greater con
cern with beauty of landscape and by economies
in improved materials and installation tech
niques (especially the use of aluminum in place
of copper conductors), reducing the costs of
placing distribution circuits underground.
Safety is increased for both utilities and the
public. Elimination of need for tree trimming
and of failure of overhead facilities as caused
by ice storms and hurricanes are significant
economic advantages. Tax benefits and Federal
grants for research on better, less expensive
ways to place lines underground have been sug
gested. There were about 250,000 single-family
dwelling units connected to URD systems in
234
the United States in 1965; by 1970, the number
may be five times greater.
productive could become commercially useful,
thereby increasing gas reserves.
Expenditures for neiv plant and equipment have
been rising steadily. According to Electrical
World, capital expenditures for the electric
utility industry amounted to $4.8 billion in 1964
and are expected to be $5.5 billion in 1968. Ac
cording to the American Gas Association
(A G A ), new gas utility and pipeline construc
tion expenditures were $1.7 billion in 1964 and
are forecast to amount to $1.8 billion in 1968.
Nuclear electric power development is being ac
celerated by government agencies, private elec
trical equipment manufacturers, and electric
utilities. A total of 17 nuclear power plants,
with 1,160 mw. capacity (total U.S. capacity in
1964 was 239,800 m w.), were in operation in
1964, some on an experimental basis. Of nine
new nuclear plants either under construction
or planned for operation by 1968, six will have
a capacity of 400 mw. or more each. By 1980,
as much as one-tenth of this country’s capacity
may be supplied by nuclear energy, according
to FPC projections. The AEC expects that by
the year 2000, all new steam-electric generating
plants will be operating on nuclear fuel.
An important factor in the growth of nuclear
power will be the development of technology for
reliable and commercially feasible breeder re
actor systems (which produce more fissionable
fuel than they consume). The successful com
mercial operation of the breeder reactor would
free nuclear plants from dependence on the
limited supply of uranium 235. In the process
of generating electrical power, the breeder re
actor would convert U-238 or thorium to fission
able fuel, some of which would be consumed in
place. The remainder of the converted materials
could be reprocessed to provide fissionable fuel
for the same reactor, or to fuel other reactors.
Prior to breeder reactors, the advanced reac
tors which are now in the prototype stage of
development are expected to relieve the depend
ence on limited resources of low cost U-235 by
reducing the requirement for U-235, and by
permitting the use of natural uranium while
still producing low cost energy. In addition,
these advanced converter reactors allow the
timely introduction of advancing technology to
the growing nuclear complex. These reactors
should be available for commercial service in
the mid-1970’s and the breeders sometime later.
According to the AEC, present types of nu
clear power plants (i.e., water-moderated and
water-cooled reactors) could be economically
feasible under any o f three conditions: if lo
cated in medium to high cost fuel areas; if
plants constructed have large capacities; and
if operation is at a high annual capacity factor.
Research ay,d development activities are in
creasing. R&D expenditures by the private
electric utility industry and its suppliers
amounted to about $152.7 million in 1964, ac
cording to the Edison Electric Institute. Of
this total, about $46.1 million was spent by the
major electric utilities and $1.1 million by the
Edison Electric Institute; the major electrical
equipment manufacturers spent $105.5 million
on the development of electric utility equipment,
8 percent above the $97.6 million spent in 1963.
Engineering application of computers, extra
high voltage transmission, magnetohydrody
namics (M HD), use of nuclear power for
desalinization, and electric heating are exam
ples of important R&D projects.
Through 1965, approximately $1.5 billion has
been spent on nuclear power development by the
Atomic Energy Commission (A E C ), and an ad
ditional $800 million by the utilities and major
reactor manufacturers. The AEC is now ex
pending $100-$150 million annually, compared
with $50 million by private industry, and these
rates are expected to continue.
Total R&D expenditures in the gas industry
by utilities, transmission companies, equipment
manufacturers and the AGA are estimated at
about $20 million for 1964. A prototype natural
gas fuel cell battery capable of delivering 25
watts at 6 volts has been developed by the In
stitute of Gas Technology, leading to the possi
bility of producing up to 20 kw.h. from a therm
of natural gas. Project Gasbuggy, a joint ven
ture of a gas company, the AEC and the Depart
ment of the Interior, is designed to explore the
feasibility of using nuclear explosions to frac
ture low permeable gas reservoirs. If this proj
ect is successful, reservoirs now considered un
235
One large plant (515 mw.) now under construc
tion (estimated completion date, 1968) at Oys
ter Creek, N. J., a medium fuel cost area, may
be the first, nuclear-fueled, commercially com
petitive steam-generating power plant in the
United States. The U.S. Department of In
terior, in cooperation with the AEC, is examin
ing the possibility of obtaining low-cost water
by combining large capacity power production
and large-scale water desalinization. Densely
populated areas such as Los Angeles and New
York can use sufficient water and electricity to
support economical operation of such dual-pur
pose nuclear power plants.
The operation of nuclear reactors requires
extensive safety arrangements. Safety reactor
features being developed include special instru
mentation and monitoring, multiple auxiliaries
to reduce risks of equipment and operation fail
ures, and shielding and containment structures
to contain any accidental release of radiation. In
addition, special consideration is given to the
location of plants to further minimize the haz
ard from any accidental release of explosion.
Since 1961, the AEC’s reactor R&D program
has included a wide range of engineering tests
and evaluation studies on safety of reactors.
More efficient methods for the processing,
storage, and disposal of radioactive materials
are under development, according to the AEC.
The problems of designing a successful disposal
system for nuclear waste have not yet been an
obstacle to the development of the industry, but
are becoming more acute.
New methods for producing electricity without
the conventional generator are being actively
investigated both in governmental and private
laboratories. Magnetohydrodynamics (MHD),
in which a jet of ionized gas or liquid metal
vapor is forced through a magnetic field to pro
duce electricity, with the gas or vapor replac
ing the armature of the conventional generator,
shows the most promise for commercial appli
cation. Despite materials problems because of
high temperatures (5,000°F) required to attain
electrical conductivity in the gas stream, MHD
appears to have the potential for becoming a
bulk power generator with great savings possi
ble when used in combination with a conven
tional steam plant. Recent progress in MHD
technology has made feasible the construction
of an experimental MHD plant, successful op
eration of which could lead to commercial de
velopment.
The problem of plasma (heat) containment
in controlled thermonuclear fusion reaction (in
which very light elements are made to collide,
forming heavier elements, and releasing energy
in the process) makes hazardous any forecast
for power generation from this source for the
immediate future. However, the enormous and
virtually inexhaustible energy potential means
that work on harnessing this source of power
undoubtedly will continue.
Other approaches: thermionic generators,
thermoelectric generators, fuel cells, and solar
cells require no moving parts, and may be able
to operate long periods without maintenance,
but have the common disadvantage of produc
ing direct current in small quantity at very low
voltage, in the order of one volt. Small size and
potential efficiency make these generators use
ful in space technology and as a power source
in remote areas.
Manpower Trends and Adjustments
Output per man-hour probably will continue to
increase at the industry’s historically high rate
— about 7 percent annually. Output per all em
ployee man-hour (combined private electric
and gas utilities) rose at an average annual rate
of 7.4 percent from 1947 to 1957, while output
per production worker man-hour rose about 8
percent annually. Between 1957 and 1964,
output per man-hour increased 6.9 percent an
nually for all employees and 7.4 percent for
production workers. Continued high rates of
productivity increase are anticipated due to
rising sales of gas and electricity and the impact
of technological innovations.
Stability in employment appears probable. To
tal employment, which amounted to 469,500 in
1947, rose to 581,800 in 1957 and declined to
575,900 in 1964. Production worker employ
ment which rose from 446,400 in 1947 to 523,300 in 1957, declined to 501,400 in 1964. The
proportion of production workers was 95 per
cent of total employment in 1947, and 87 per
cent in 1964. Reduction in unit labor require-
236
Average annual percent change
All employees
1947-57 __________________________________
1957-64 __________________________________ N onsupervisory
1947-57 __________________________________
1957-64 __________________________________ Output
1947-57 __________________________________
1957-64 __________________________________
Output per all-employee man-hour
1947-57 __________________________________
1957-64 __________________________________
Output per nonsupervisory worker man-hour
1947-57 __________________________________
1957-64 __________________________________
2.2
.1
1.6
.6
9.5
6.8
7.4
6.9
8.0
7.4
merits is expected to be offset by increases in
total output and expansion of service to new
consumer areas. (Employees in governmentowned utilities are not included in these
figures.)
A more skilled work force will be required. The
proportion of professional, technical, crafts
men, foremen, and kindred workers is now
about one-half of total employment and is ex
pected to increase through 1970 and 1975. The
proportion of operatives and kindred workers,
which has been declining, is expected to decline
even more through 1975 as a result of the use of
central control rooms and larger generating
units.
The ratio of clerical and kindred workers,
23.4 percent of all employment in 1960, is ex
pected to decline through 1970 and 1975, mainly
because routine clerical work is being handled
increasingly by computers. Meter readers, a
major occupational group, could be virtually
eliminated if an automatic meter reading sys
tem is successfully developed.
Nature of operator’s job is undergoing change.
Advances in process automation are making
possible the consolidation of previously sepa
rate jobs, diminishing the number of plant
operations required, but adding to the com
plexity of the operator’s duties and responsi
bilities. At one steam-electric plant, only a sin
gle operator per shift is required. Working
from a central control room, the operator uses
integrated automatic devices, automatic remote
controls, and closed circuit television for the
entire startup and shutdown operations, dis
placing substation, switchboard, and generator
operators. However, only a few such plants are
expected to be operating by 1970.
Older workers, being generally associated
with the operation of older plants, especially are
affected by generating plant modernization.
Older plants, so long as they are operable, are
usually placed on a standby basis to meet sea
sonal peaks, but shutdown through forced ob
solescence is increasing as a greater range of
special-purpose generators becomes available.
Provisions in a number of collective bargaining
agreements are concerned ivith contracting out
of work and separation of workers. The reduc
tion of seasonal peak and valley in demand for
electricity, with fewer employees from the
winter’s peak available for summer mainte
nance and construction work, is stimulating the
trend towards contracting out in these occupa
tions. Of 78 major collective bargaining agree
ments in the gas and electric utility industry
(1959), 44 contained provisions regarding the
use of subcontracting. Of 86 major agreements
(1963), 21, covering 50,000 workers, provided
severance pay and layoff benefit plans.
Government programs have trained thousands
of people in nuclear power technology. AEC
special fellowships provide for graduate study
in nuclear science and engineering, health,
physics, industrial hygiene, and industrial medi
cine. The Argonne Institute of Nuclear Science
and Engineering in Illinois, the Oak Ridge
School of Reactor Technology, and the Oak
Ridge Institute of Nuclear Studies in Tennessee,
have offered courses to AEC contractor employ
ees, private industry personnel, and college
students and faculty. The International Brother
hood of Electrical Workers, since 1959, has
provided training in industrial atomic energy
uses, hazards, and controls to its members.
Major technological changes usually are effected
sloivly, thus facilitating adjustments. Most
changes effecting substantial reductions in em
ployment opportunities require a fairly long
period for installation or conversion. One large
utility took 5 years for conversion to natural
237
gas; substation automation in the same utility,,
15 years. The introduction of electronic data
processing, which has a significant impact on
office employment, is usually accomplished over
a 3- to 5-year period, depending on the size of
the system. It is customary for electric and gas
utilities to transfer redundant workers and
effect permanent reductions in the work force
through attrition without forced layoff or re
tirement.
Selected References
Barthold, L. O. and H. G. Pfeiffer. “ High Voltage Power Transmission,” Scientific
American, May 1964, pp. 38-47.
Drewry, F. S. and J. R. Howard. “ Taking The Giant Step in Power Plant Automa
tion,” Instrument Society of America Journal, July 1964, p. 53.
National Power Survey, Vol. I and II. Federal Power Commission, 1964.
Civilian Nuclear Power. U.S. Atomic Energy Commission, March 1962.
“ Process Computer Scorecard Updated,” Control Engineering, March 1965, pp.
57-62.
Estimated Growth of Civilian Nuclear Power. U.S. Atomic Energy Commission,
March 1965.
The Nuclear Industry, 1965. U.S. Atomic Energy Commission, October 1965.
Program for Advancing Desalting Technology. U.S. Department of the Interior,
September 1964.
The Outlook For Central-Station Nuclear Power in the U.S., Arthur D. Little, Inc.,
Cambridge, Mass., September 1964.
Fundamental Nuclear Energy Research. U.S. Atomic Energy Commission, Decem
ber 1963.
Seaborg, G. T. “ Nuclear Power Comes of Age” (Remarks before the Annual Con
vention, Edison Electric Institute, May 4, 1965). U.S. Atomic Energy Commis
sion release, May 4, 1965.
Sporn, P. “ A Post-Oyster Creek Evaluation of the Current Status of Nuclear
Electric Generation,” in Nuclear Power Economics— Analysis and Comments—
196If, Joint Committee on Atomic Energy Print, 88th Cong., 2nd sess., October
1964.
Indexes of Output Per Man-Hour: Gas and Electric Utilities Industry, 1932-62.
U.S. Department of Labor, Bureau of Labor Statistics, 1964.
Manpower Planning to Adapt to New Technology at an Electric and Gas Utility:
A Case Study (BLS Report 293, April 1965). 30 pp.
“ The 1965 Utilities Conferences,” Electrical Worker Journal, May 1965.
The Wholesale and Retail Trade Industry (SIC 5 0 , 5 2 -5 9 )
to consumer, are now arriving at the retail store
attractively prepackaged and ready for the
shelf.
Centralized prepackaging of perishable food
items by retail chains for distribution to indi
vidual stores is, at present, the most widespread
application of prepackaging. Several recent
studies by the U.S. Department of Agriculture
on centralized processing and packaging of
meat and cheese indicate considerable savings
in man-hours over conventional retail store
back-room processing. It is generally expected
that centralized packaging will reduce packag
ing by individual stores of most meat and prod
uce sold by food chains in the next 5 to 10
years.
Summary o f Outlook Through 1 97 0
Growth in trade volume through 1970 is ex
pected to rise at higher rates than in 1960-63,
as population and disposable income increase.
Improvements in materials handling, new pack
aging techniques, and more extensive use of
computers for data processing, particularly in
large stores and warehouses, are among the
major changes underway. However, smaller
firms and many areas of trade are relatively un
affected by these changing technologies. Fur
ther diffusion of vending machines and other
types of self-service merchandising is also tak
ing place. Employment will continue to increase
at the same high rate as in the past 4 years,
despite increasing reductions in unit labor re
quirements resulting from technological ad
vances in a number of trade sectors. A large
part of the increase in retail employment is ex
pected to be among part-time workers, includ
ing many women and young workers.
New developments in packaging machines,
wrapping, and auxiliary equipment for food
prepackaging are reducing costs. This equip
ment is being used increasingly in food stores
to reduce back-room man-hour requirements on
meat, dairy, and produce. Many of these de
velopments can also be combined with advanced
materials-handling equipment, permitting flow
line production for volume prepackaging. For
example, one wholesale produce packing com
pany integrated an automatic produce feeder,
tray feeder, shrink-film tunnel type of packag
ing machine, and automatic labeler into one
production line, reducing packaging man-hours
by 15 percent. In addition to reducing directly
unit man-hours in wholesale trade, cheaper,
more efficient developments in packaging also
tend to reduce retail man-hours per unit by
making more economical the further extension
of prepackaging and self-servicing.
Outlook for Technology and Markets
Trade volume is expected to rise considerably.
Volume of trade, measured in terms of gross
national product originating in wholesale and
retail trade (in constant dollars), rose at an an
nual rate of 2.9 percent from 1957 to 1963. This
was slightly lower than the rate of increase of
3 percent in the previous 10-year period, 194757. A more rapid period of growth occurred
from 1960 to 1963, when the annual rate was
3.5 percent. Volume of trade from 1963 to 1970
could grow at about 4-4.5 percent annually ac
cording to some industry experts.
Extension of prepackaging to many lines of re
tail trade can be expected in the next 5 years.
Prepackaging by manufacturer or wholesaler
reduces retailers’ handling costs, improves
stock control, and minimizes in-store inventory.
In addition, easily identifiable prepackaged
items allow self-service selling, reducing sales
personnel. Some nondurable items (e.g., men’s
shirts, sheets, underwear), previously repacked
three or more times as they moved from factory
Computers are expected to be more widely used
for a variety of complex data-processing func
tions. At the present time, about 500 computers
are being used in approximately 300 of the larg
est retail firms throughout the country. By
1970-75, some industry experts expect the num
ber of retail firms using computers to triple.
Computer use in wholesale trade is probably
more extensive, but also limited to the largest
238
239
firms. As lower cost computer models become
available, and more flexible computer programs
are devised for use by data-processing centers,
the smaller firms will probably be able to take
advantage of some aspects of computerization.
Retail and wholesale use of computers is be
ing extended from accounting and billing func
tions to more efficient inventory control, sales
forecasting, work scheduling, and development
and measurement of merchandising and promo
tion techniques. In wholesale trade, use of com
puters for better utilization of warehouse space
and materials-handling equipment is of particu
lar importance. In addition to providing man
agement with a wide variety of pertinent in
formation each day (previously too costly or
time consuming to prepare), enabling closer
management control, unit man-hour require
ments in affected operations are generally lower.
For example, since the introduction of com
puters about 8 years ago, one large department
store has more than doubled its volume of sales,
while the size of its clerical staff has been re
duced.
New data-processing input equipment increases
computer potential. One major development
rapidly gaining acceptance in large retail chain
stores is the optical tape register. This manu
ally operated register records details of trans
actions directly onto a tape which is later opti
cally scanned for computer input. It not only
reduces man-hours of work by dispensing with
the need for manual tallying or card punching
but provides considerably more information
previously too costly to collect. Management
can be provided with daily reports on sales, or
stock turnover, subdivided by department or
item for rapid analysis. These registers can
be used by both large and small companies since
smaller firms, which usually do not have com
puters, can utilize data-processing centers to
process optical tapes. At the present time, there
are about 12,000 optical tape registers being
used in about 250 retail companies throughout
the country.
Still in the developmental stage is an auto
matic check-out register for use in supermar
kets. An optical scanner automatically reads
codes on purchased items which the register
translates into prices and automatically totals.
It also produces information that can be readily
processed by computers. Although this device
may be twice as fast as conventional registers,
reading and recording of merchandise is only a
small part of the overall check-out job. Its
adoption may, therefore, be limited until auto
matic bagging becomes practical, an operation
which takes up the major portion of the time
required for overall checkout.
Data-transmission systems are resulting in
more efficient managerial control. An impor
tant development in large multistore retail or
ganizations is the linking of the various stores
to a central computer by telephone or telegraph
wire, facilitating better control over customer
credit accounts, and more rapid transmission
of sales data for decisionmaking. A refinement
which further increases credit control, and
which has recently been installed in one large
department store, is an automatic push-button
telephone system enabling sales persons to com
municate directly, with the computer for imme
diate voice answerback credit authorization.
Data-transmission systems also link a few
wholesalers, and buying headquarters of chains,
directly to suppliers, reducing paper work, or
der filling, and storage costs. Still new, diffusion
of data-transmission systems, including auto
matic reordering, will increase as data-process
ing languages and equipment become more in
terchangeable. However, their use through
1970 will still be quite limited in number and
to the largest retail and wholesale firms.
Improvements in materials-handling equip
ment and techniques are reducing unit labor
requirements in warehousing. Fuller use of
conveyorized materials-handling equipment in
the moving of stock from truck to shelf is reduc
ing labor requirements in large retail stores.
More extensive use of palletization, powered
conveyors, forklift trucks, and other mechani
cal materials-handling equipment will continue
to reduce significantly manual handling in most
wholesale and retail warehouses. In addition,
some of the larger warehouses are introducing
more automatic handling systems by integrat
ing materials-handling equipment with various
types of electronic controls and computers. One
of the most advanced features of these systems
240
EMPLOYMENT AND GROSS NATIONAL PRODUCT
IN WHOLESALE AND RETAIL TRADE
1947
Sources:
'4 9
'51
'53
'5 5
'57
'59
'6 1
Employment, Bureau of Labor Statistics; gross national product, Department of Commerce.
'63
1965
241
is a punch card or tape-controlled order picker,
which automatically selects items of an order,
releases them from storage, and transports
them by conveyor to a predetermined place for
shipment.
Installation of these automatic systems is
quite limited and will probably continue to be
economically feasible only for fastmoving,
volume items in large warehouses. Small volume
items will continue to be picked manually, but
will have all paperwork prepared by computers
and will be transported by the electronically
controlled conveying systems. An important ad
vantage of these systems is that an increased
volume at peak periods can be handled without
requiring overtime of regular employees or
supplementary part-time workers. For exam
ple, in one large frozen food wholesale ware
house, in which automatic order picking, is
utilized for 70 percent of daily case shipments,
total daily man-hours were reduced by more
than 50 percent and hourly case shipments in
creased fourfold by the use of the computerintegrated materials-handling system.
Self-service merchandising is moving into a
number of retail trade areas. Self-service sell
ing, requiring fewer unit man-hours of han
dling and selling than conventional operations,
is already well established in supermarkets,
drugstores, and the growing number of discount
stores. It is also being introduced in depart
ment stores and variety stores, to reduce costs
and compete effectively with discount stores.
However, self-service in department stores will
probably be limited because of their effort to
maintain the benefits and appeal of personal
selling and customer service.
Machine vending, requiring fewer man-hours
per unit than conventional selling, continues to
increase. Although vending sales increased by
about 30 percent from 1961 to 1964, they ac
counted for less than 2 percent of total retail
sales in 1964. Cigarettes, soft drinks, and con
fections (which comprised 40, 19, and 13 per
cent respectively of total vending sales in 1964)
are expected to continue to be the major items
sold through vending machines. According to
some industry experts, by 1970, cigarettes sold
through vending machines may account for 25
percent of total cigarette sales, compared to 16
percent in 1961. Sales of soft drinks, candy,
and gum, which comprised 20 percent of total
sales of these items in 1961, are expected to
move up to 30 percent in 1970.
Prepared foods (hot canned foods, sand
wiches, pastry, complete hot meals, etc.), ac
counting for about 5 percent of total vending
sales in 1964, are expected to be the fastest
growing area. New vending technologies, such
as a microwave oven which heats frozen foods
in seconds, are expected to open new markets,
particularly in the area of institutional feeding
(schools, hospitals, industrial plants, etc.).
Automated merchandising eliminates the
need for sales personnel, but creates demand
for workers to stock, repair, and service vend
ing machines.
Manpower Trends and Adjustments
Employment will increase through 1970. Total
retail and wholesale trade employment increased
from 10.9 million in 1957 to 12.1 million in 1964,
an average annual growth rate of 1.6 percent
compared to a 2 percent rate between 1947 and
1957. From 1961 to 1964, the annual employ
ment growth rate increased to 2.3 percent. As
separate groups, retail employment (about 74
percent of total trade employment in 1964) and
wholesale employment (with 26 percent of the
total) increased at rates close to that of total
trade employment during these periods.
Total trade employment will probably con
tinue to rise through 1970, at about the high
1961-64 growth rate, despite reductions in unit
man-hour requirements in a number of trade
Average annual percent change
Total trade employment
1947-57 _____________
1957-64 __________________________________
Retail trade employment
1947-57 __________________________________
1957-64 __________________________________
Wholesale trade employment
1947-57 _______________ _______________ _
1957-64 __________________________________
GNP originating in total trade
1947-57 __________________________________
1957-63 __________________________________
2.0
1.6
1.9
1.7
2.1
1.5
3.0
2.9
242
sectors due to technological changes. Employ
ment growth will result from the anticipated
large increase in volume of trade, continued
growth of branch stores, and the fact that re
cent technological changes are not expected to
affect appreciably many areas of trade. In re
tail trade, for example, these include eating and
drinking places and automotive dealers, which
together comprise more than one-fourth of
retail trade employment. Also, growth in em
ployment in retail trade will reflect the increas
ing numbers of part-time workers, particularly
women and younger workers.
Structural composition of the workforce will
continue to change. The proportion of nonsupervisory workers to total employment com
prised 90 percent in 1964 in retail trade (ex
cluding eating and drinking places) and 85
percent in wholesale trade. Each of these pro
portions is slightly lower than in 1958. This
trend will probably continue, and the rate of
decline may accelerate.
Opportunities for sales personnel and mate
rials handlers will continue to grow, although
they may be slightly dampened by continuing
introduction of laborsaving changes in mer
chandising and warehousing. As use of com
puters increases, demand for programers, sys
tems analysts, engineers, and other various
types of personnel trained in computer data
processing will rise. The total number, how
ever, will continue to be relatively small. On
the other hand, more widespread use of com
puters and input equipment, such as the optical
tape register, will result in a decline in the de
mand for clerical personnel, an occupational
group that comprised about one-fifth of whole
sale trade and one-eighth of retail trade employ
ment in 1960.
Advanced planning and attrition in some in
stances have facilitated man-power adjustments
to technological change. A 38-percent reduction
in employment resulting from the installation
of an automatic computer-integrated materialshandling system at one wholesale warehouse of
consumer products, for example, was accom
plished by means of attrition and without any
layoffs. Similarly, another distributor of con
sumer products who introduced advanced materials-handling equipment avoided layoffs by
transferring displaced employees to positions
vacated by attrition in other departments.
Retraining is used as a method of adjustment
to changing technology. A large department
store, for example, has an agreement with the
Retail, Wholesale, and Department Store Union
to finance and operate a retraining program
for employees whose jobs are eliminated by ma
chines. Under provisions of the plan, an em
ployee can train for a job equal to or lower in
grade than the one from which he was displaced.
The length of training equals the number of
weeks of severance allowance the employee has
earned. Executive training in some large retail
firms is also receiving more widespread atten
tion, partially because of changes in technology
and operating methods.
24 3
Selected R eferences
Technological Developments
‘ ‘Automation of Tray Packaging,” Modern Packaging, February 1965, pp. 111-113.
Bartz, Daniel J. “ Computers: The Food Industry Challenge,” Progressive Grocer,
April 1965.
“ Computers Begin to Solve the Marketing Puzzle,” Business Week, Apr. 17, 1965,
pp. 114-138.
Ewing, John S. and Murphy, James. “ Impact of Automation on United States Retail
Food Distribution,” Journal of Retailing, Spring 1965, pp. 38-47.
“ Report from Chicago,” Modern Packaging, May 1965, pp. 147-154.
Schreiber, G. R. “ 1965 Census of the Industry,” Vend, March 1965, pp. 32-61.
Taylor, J. L., Jr. “ The Revolution in Retailing,” Credit and Financial Management,
December 1964, pp. 32-40.
U.S. Department of Agriculture, Agricultural Marketing Service, Centralized Proc
essing of Fresh Meat for Retail Stores, October 1963, 76 pp.
Manpower Trends and Adjustments
Official Proceedings, 2£th International Convention, Retail Clerks International
Association, June 24-28, 1963, 456 pp.
Roberts, Richard S., Jr. Management Decisions to Automate, Stanford Research
Institute, 1964, pp. 25-36.
The Banking Industry (SIC 6 0 )
Summary of Outlook Through 197 0
A wider variety and increased volume of
banking services are expected to keep employ
ment growing, despite extensive use of elec
tronic data processing. Both large and small
commercial banks are utilizing computers and
magnetic ink character recognition equipment,
and savings banks are starting computer ac
counting. Increasing use of data transmission
facilities is foreseen.
The rapid rise in supervisory personnel
should continue as banks establish more
branches and develop new services. Strong
demand for systems analysts, programers, and
other computer personnel is expected to con
tinue as automation is extended to more banks,
while the demand for bookkeepers will be
greatly diminished.
Outlook for Technology and Services
The banking sector will continue to expand as
more emphasis is placed upon services. The
number of demand deposit accounts is pro
jected to increase at an average annual rate of
3.4 percent between 1965 and 1970, compared to
3 percent between 1960 and 1965. The rise is
due, in part, to the increase in special checking
accounts, requiring no minimum balance, which
appeal to the small depositor. In addition, more
widespread use is expected of such services as
automatic deduction of insurance premiums
from checking accounts, general collection of
utility bills, and processing of charge account
payments mailed directly to banks, saving days
in crediting a firm’s account. Other new or ex
panded bank services are wider application of
installment credit, enlarged international bank
ing departments, and a number of nonfinancial
services for business firms, such as accumula
tion of marketing data.
While the number of banks has declined
slightly, from 14,714 to 14,266, between 1947
and 1964, the number of banking offices has in
creased steadily, at an average annual rate of
2.6 percent, between these years. Since 1962,
the number of banks, as well as branch offices,
has increased.
244
By 1970 the great majority of large commercial
banks will be using computers. Over 500 banks
have either installed computers or have them
on order. Most banks with at least $100 million
in deposits now use computers, and almost all
in this size group probably will be automated by
1970. In 1962, a Federal Reserve Board survey
of banks having at least $25 million in deposits
showed 344 of the 974 owning or renting com
puter systems. Several banks, primarily those
with deposits of $100 million or more, have
more than one computer. For example, one of
the largest banks has nine computers run on a
24-hour day, 5 ^ days each week, by a staff of
739. In addition to processing checks, this sys
tem handles stock transfers, loans, investment
studies, internal bookkeeping, and a check
reconciliation service.
More than half the banks having $50 million
to $99 million in deposits use computer facili
ties. The facilities are primarily purchased or
rented, although some banks contract for com
puter services with a city correspondent bank
or service bureau. It is estimated that 85 per
cent of these banks will process accounts by
computer in 1970, and that a substantial num
ber of smaller banks will have converted to
computer systems.
Having discovered that their own paperwork
often does not utilize all the computer time,
some banks offer computer services to custom
ers other than correspondent banks. The most
popular are account reconciliation and payroll
preparation which can be of advantage to all
types of businesses. Billing services for doctors,
florists, druggists, real estate firms, and other
businesses have also been established.
Magnetic ink character recognition speeds
check collection. The number of checks proc
essed by the Federal Reserve System, approxi
mately one-fourth of all checks handled by
banks, increased by 72 percent between 1954
and 1964. To handle the ever-increasing volume,
the industry, under the leadership of the Ameri
can Bankers Association, sponsored the devel
opment of magnetic ink character recognition
(M ICR), a replacement for manual handling.
Checks with stylized numbers printed in ink
245
containing iron oxide can be read and sorted
by a machine which magnetizes the ink. Cer
tain areas along the bottom edge of checks have
been designated for routing symbols, bank use
(such as account number), and amount en
coding. As the MICR reader-sorter sorts the
checks, this information may be recorded on
tape for computer processing. High speed
sorters handle up to 1,680 items a minute.
The Federal Reserve System has encouraged
banks to preprint routing symbols in magnetic
ink, noting that even those banks without MICR
reader-sorters benefit from faster check col
lection. In its February 1965 survey, the New
York Federal Reserve Bank reported that 92.3
percent of the 16 million checks handled by the
Federal Reserve System each day were pre
printed, compared to 19.5 percent in February
1961. The Federal Reserve now urges that
checks be amount encoded by the first bank to
receive a check for collection.
Slow speed, reader-sorters ivill replace manual
handling of checks in the smaller bank. One
manufacturer has introduced a slow speed
reader-sorter, operating at one-third the rate of
conventional MICR reader-sorters and selling
for one-third the price of the high speed equip
ment. Banks with less than $50 million in de
posits are likely customers for this equipment.
Electronic bookkeeping machines (’tronics)
are replacing conventional posting machines—
primarily in banks without computer facilities.
Ledger cards used with ’tronics have strips of
magnetic ink on the back which record the ac
count number, balance, column and line selec
tion, and check count. The bookkeeper updating
an account keys the account number, which is
verified by the machine, and if it matches the
ledger card, the keyboard unlocks and the trans
action is posted. The Tronic picks up the old
balance, adds or subtracts the new entry, com
putes the new balance, and enters it on the mag
netic strips. A visible record is printed simul
taneously on the front of the ledger. The only
operations required of the bookkeeper are key
ing the account number and value of the trans
action. Since a number is entered only once,
errors are reduced, as is the time required for
posting.
One industry expert estimates that at pres
ent about 3,000 banks have installed ’tronics.
Small banks, particularly those with $25 mil
lion to $50 million in deposits, are the largest
users of this equipment. Future use of ’tronics
depends, to a great extent, on further develop
ment of computer centers and the rate of adop
tion of additional services necessitating the use
of computers.
Savings accounts lag in computer applications.
Many commercial banks regard automation of
savings accounts as a low priority application.
By the end of 1964, one-quarter of the banks
using computers (including computer services)
had automated their savings accounts; this was
effected in less than 4 percent of all banks. To
eliminate some of the paperwork from savings
accounts, banks are adapting MICR to savings
and introducing no-passbook savings. The lat
ter, not yet legal in 15 States, facilitates depos
its, but requires special handling for with
drawals.
Computer manufacturers are establishing
on-line data processing centers for savings
banks in metropolitan areas. The first center,
scheduled to open in New York City this year,
will serve eight savings banks and one savings
and loan association. Participating banks must
guarantee 500,000 savings accounts and 100,000 mortgage loans. The New York banks in
the system are among the largest savings banks
in the country. There are also a few individual
banks with their own on-line computers. This
facility enables any teller in any branch to
handle any account transaction, as each window
posting machine is linked to a central computer
by leased telephone lines.
Closed circuit television is being applied in
banking. The teller in a drive-up banking sta
tion is being replaced in some areas by two-way
television and a system of pneumatic tubes. One
industry expert estimates at present 200 units
are installed. The teller remains in the bank,
near the necessary records, and teller and cus
tomer see each other on television. Two driveup stations may be handled by one teller during
slack hours. Television is also one of several
methods introduced for signature look-up.
246
EMPLOYMENT, NUMBER OF CHECKS HANDLED,
AND BANKS IN BANKING
Thousands of Employees
Billions of Checks
Number of Banks and Branches
16,000
BANKS AND BRANCHES
14 , 0 0 0
✓
—
Ba i k s *
12 , 0 0 0
*
10,000
^
Bran ches
8,000
6,000
—
---------
4.000
2.000
|
0
1947
Sources:
1
'49
____ 1
____
'5 1
’5 3
1
|
'55
____ 1
____
'57
*5 9
l
____ 1
____ ____ 1
____
'6 1
*6 3
* Excludes U.S. Government checks
Employment, Bureau of Labor Statistics; checks handled and number of banks and branches,
Federal Reserve Board.
1965
247
Bank use of data-transmission equipment and
machine-to-machine communication is expected
to increase. At present, transmission networks
are largely between banks, but the development
of pushbutton telephones, introduced in 1963,
will enable the telephone user to be connected
with a bank’s computer. Experiments are un
derway that will permit customers to pay bills
by using the telephone keyboard. A computer
will credit the store’s account and debit the
customer’s, either refusing to process over
drafts or handling them through a prearranged
line of credit.
Banks may soon clear large checks between
cities by long distance reproduction, and by
1975, the cost of transmitting facsimiles may be
lower than sending the documents themselves.
The feasibility of computers for on-line data
processing of commercial and loan teller opera
tions is being explored by several major banks,
and computer processing may be extended to
these areas within 5 years.
Manpower Trends and Adjustments
Employment is expected to continue to increase
— but at a decreasing rate. Between 1957 and
1964, employment averaged a 3.4 percent in
crease annually, compared to an annual growth
rate of 3.9 percent between 1947 and 1957. The
trend to retail banking— services to the small
depositor— has been largely responsible for the
high rate of increase in employment, with auto
mation tending to hold down employment in
some areas while increasing the number of
Average annual percent change
All employees
1947-57 __________________________________
3.9
1957-64 __________________________________
3.4
Number of checks handled by the Federal Reserve
System
1947-57 __________________________________
6.0
1957-64 __________________________________
5.5
Number of banking offices
Number of banks
1947-57 ______________________________ - 0 . 4
1957-64 _____________________________
0.2
Number of branches
1947-57
7.0
1957-64 _____________________________
8.7
services provided by banks. A 3-percent annual
growth in employment between 1964 and 1970
is forecast, increasing the number of bank
workers from 764,400 to over 900,000.
Bookkeepers are hardest hit by automation.
Electronic bookkeeping machines require about
one-half to two-thirds the personnel to do the
same job as conventional bookkeeping ma
chines do; computers can further reduce the
need for bookkeepers. For example, at one mul
tibranch bank, within 18 months after the start
of conversion to electronic data processing
(E D P ), the bookkeeping staff of 600 had been
reduced to 150, and the data processing staff
had grown to 122, a net reduction of 55 percent.
Very nearly all of the jobs eliminated were in
branch offices, while most of those created were
at the data center. Most banks experience a net
reduction in force of 40 to 50 percent in affected
operations.
Although on-line computer equipment may
enable a teller to serve more customers, con
tinued increase in the number of branch offices
means that more tellers will be needed. Some
of the decline in clerical employment is offset
by the creation of new jobs, such as keypunch
operators and MICR encoders.
The number of supervisory personnel has been
growing. The significant increase in the num
ber of bank branches— over 5,000 new offices
in the past decade— has necessitated more bank
officers, as has the growth of services to the
small depositor. In one bank, for example, a 5percent decline in total employment was accom
panied by a corresponding 5-percent increase in
the number of bank officials.
Introduction of automation has modified old
jobs and created new ones. The operations of
ficer, responsible for branch operations, no
longer has much detail work to supervise, since
bookkeeping has been removed from the branch
offices. He is now expected to spend more time
in the front office, handling customer relations.
In other cases, automation may eliminate only
part of a job, and in these instances part-time
workers may perform the remaining tasks.
The principal new occupations are EDP equip
ment operator, programer, systems analyst,
24 8
encoder, and EDP clerk. There is a strong de
mand for computer programers and systems
analysts, and the need for such trained person
nel is expected to increase as more banks
automate.
While a high percentage of bank employees are
women, their numbers have not increased as
rapidly as total employment. Since 1960, the
average annual rate of increase has been 3.0
percent for women, compared to 3.7 percent for
men. Women, however, still comprise more
than 60 percent of the banking labor force, and
hold many jobs which are not significantly af
fected by automation, such as secretaries, typ
ists, and tellers.
Heavy turnover of personnel in areas affected
by computer operations enables automation to
occur without layoffs. Since turnover among
women clerical employees is relatively high
and the length of time for computer installation
is fairly long, natural attrition is often used to
take care of labor displacements. For example,
at one large statewide bank, having more than
150 branches, the decision to automate was
spurred by the high turnover rate of bookkeep
ers. Requiring 2 months to train, the average
bookkeeper left after 8 or 9 months.
Selected R eferences
Technological Developments
Alson, Robert S., et al. Automation in Banking. New Brunswick, N.J., Rutgers
University Press (1963).
The American Bankers Association, Department of Automation and Marketing
Research. Automation and the Small Bank, New York, N.Y. (1964).
------ . National Automation Conference. Proceedings (1963).
Bratter, Herbert. “ Progress of Bank Automation,” Banking, September 1962, p. 47.
Eckert, James B. and Wyand, Robert R., II. “ Automation at Commercial Banks,”
Federal Reserve Bulletin, November 1962, p. 1408.
Feldman, John J. “ Savings Automation in the Nation’s Banks,” Banking, February
1965, p. 109.
Reistad, Dale L. “ The Impact of Automation on the Nation’s Banks,” Banking,
October 1964, p. 51; November 1964, p. 106.
Manpower Trends and Adjustment
Stanford Research Institute, Management Decisions to Automate, Report prepared
for Office of Manpower, Automation and Training, U.S. Department of Labor,
1964.
Wiener, Rose. “ Changing Manpower Requirements in Banking,” Monthly Labor
Review, September 1962, pp. 989-995.
Insurance Carriers (SIC 6 3 )
Summary of Outlook Through 1970
The number of insurance policies sold and
the variety of services provided by insurance
companies are expected to increase through the
rest of the 1960’s. All large- and medium-size
insurance companies now are using electronic
data-processing (EDP) equipment for office
work. Within the next 5 years, many insurance
companies will have developed their EDP ap
plications to the point where all major insur
ance office functions will be performed through
a computer system and numerous separate
handlings consolidated into one EDP flow. The
data transmission networks that are being in
stalled between home and field offices by the
larger carriers will result in less recordkeeping
in field locations and in faster policyholder
service.
Agents employed by carriers, employees in
sales-related occupations, and professional em
ployees are expected to increase. Clerical em
ployees, however, probably will not increase in
number, due to advances in electronic data-proc
essing systems. The industry may no longer be
a source of numerous opportunities at the entry
level for female high school graduates.
Property and casualty insurance sales also
are growing, particularly the “ package” policies
(e.g., homeowner’s and commercial multipleperil) . New types of coverage are being offered
to appeal to specialized markets such as hotels
and motels. There also is a trend toward offer
ing a variety of options that can be combined
into packages tailor-made to customers’ indi
vidual needs.
Health insurance sales are increasing as
medical costs rise. Medicare, which will be
administered partially by private insurance
companies, probably will increase the process
ing work of some carriers, and also may stim
ulate new demand for supplementary health
insurance.
Electronic data processing has been adopted
throughout the industry. Over 80 percent of all
insurance employees by 1963 worked in com
panies that had electronic computers. A BLS
survey in 1963 found that since 1954 about 300
companies had acquired more than 800 com
puters. Usually, EDP equipment is centralized
in the home office, but a few large, nationwide
companies have smaller computers located in
field and regional offices. Since 1960, companies
have been exchanging their older vacuum-tube
computers for faster and larger transistorized
Outlook for Technology and Markets
Insurance sales are expected to grow steadily
through the next decade. The amount of life
insurance in force increased 74 percent be
tween 1957 and 1964. Ordinary life insurance,
which accounts for nearly three-fifths of all in
surance in force, increased about 72 percent be
tween 1957 and 1964. Group insurance, which
requires relatively less sales effort and now ac
counts for about a third of all life insurance in
force, nearly doubled during this period. This
was due primarily to the inclusion of life insur
ance in employee benefit programs. Credit life
insurance, usually a form of group insurance,
is the fastest growing form of policy, although
it represents only 6 percent of all insurance in
force.
P ro g ra m e r a n d co n so le o p e ra to r ch eck co m p u ter print-outs.
249
250
models. Between 1965 and 1970, they will be
installing “third generation” computers with
very fast, random access memories.
telegraph lines had been installed between home
and field offices in 18 large companies included
in the BLS survey; 29 other surveyed com
panies had plans to install such a system. The
use of data transmission networks reduces the
Computer systems are being applied to a wide
number of records kept in field offices, by pro
variety of office operations. Companies in the
viding for direct connections between field per
BLS survey were using EDP for 11 major func
sonnel and home office computer files. Con
tions, on the average. Most often, EDP is used
sequently, policyholder service and premium
for the high-volume tasks of premium billing
collections are much more rapid. Information
and accounting, reserve and commission ac
requests, claims processing, and premium pay
counting, and for dividend accounting. Use of
ment information can be handled quickly, usu
EDP for these operations is reported to permit
ally on an overnight batch basis.
expansion of business and of types of policies
and options; improved policyholder service;
Within a few years, many major insurance
closer management control over losses and sales
carriers may link their computers and trans
agents ; and more efficient organization within
mission networks into a “ real time” system,
the company.
1 in which each transaction is processed as it
occurs. The home office computer will respond
instantaneously to information requests and
Consolidation of applications into an integrated
transaction orders from all field locations. Very
EDP system is taking place. Before consolida
small companies which do not install their own
tion, many separate operating departments,
computers may, through the use of data trans
each having only a part of the policy file, were
mission, begin to use service bureau computers
required to handle a wide variety of insurance
on a time-sharing basis.
office functions from premium billing to loan
accounting. As each function is programed for
EDP, it becomes possible to handle more tasks
Optical scanners are being installed to reduce
through a single master policy record contained
keypunching work. In most applications, the
in the computer file. Separate records and tabu
scanners are used to read premium payment
lating units are eliminated, fewer controls and
information from bill stubs returned by the
audits are required to keep all policy informa
policyholder. The scanner produces computertion in balance, and clerical posting jobs are
readable tape, from which the computer then
greatly reduced.
updates policy records automatically. In the
Sixty-six of the companies covered by the
near future, optical scanners may be used to
BLS survey had consolidated EDP systems by
“ read” office-originated forms for processing
policy loans or surrenders, or customer-marked
1963, although the fullest potential of consoli
dation had been reached in few of these offices.
forms such as policy applications or change
requests.
By 1970, consolidation of all major company
operations within the EDP system probably
will be completed in most companies having
Mergers and new marketing techniques are
computers. Computer manufacturers have de
altering industry organization. There is a con
veloped standard “ consolidated functions” pro
tinuing trend toward selling all lines of prop
grams for the insurance industry, and these
erty, casualty, and even life insurance by one
have been adopted by a number of medium
group of affiliated companies, or by merged
sized and small companies that recently in
property-casualty companies and a life affiliate.
stalled computers. Larger companies will move
In this way, one sales organization can offer a
more slowly in pulling major operations to
full range of insurance services, and home office
gether, because of the extent and variety of
recordkeeping can be integrated and simplified.
their business.
Property and casualty carriers are changing
to a direct billing system. Previously, agencies
Use of data transmission networks will grow
billed policyholders and then remitted pre
rapidly. Data transmission by telephone or
miums to the carriers. Direct billing from the
251
EMPLOYMENT AND NUMBER OF COMPUTERS IN THE
INSURANCE INDUSTRY
Thousands of Employees
1954
Source:
'55
'56
'57 ' 5 8
Bureau of Labor Statistics
'59
'60
'61
' 6 2 '6 3
‘ 64
1965
252
carrier’s home office eliminates some agency
recordkeeping and reduces service costs per
policy, by permitting computers in the carrier
home office to take over the full range of pre
mium billing and accounting activity. The
change to direct billing also facilitates more
consolidation of records through the EDP
system.
Increased competition among companies is
leading to new rating systems for automobile
and other types of policies, and to new combina
tions of coverage in the total package. The
growth of group insurance, direct sales appeals
to customers through advertising, and use of
new sales outlets also are causing changes in
traditional industry organization and in com
pany-agent relationships.
Manpower Trends and Adjustments
Insurance carrier employment will continue to
grow slowly in the next 5 years. Between 1958
and 1964, insurance carrier (SIC 63 only) em
ployment increased at an average rate of 1.6
percent a year. Office workers, who represent
about three-fourths of all insurance employees,
may grow at a slower rate because the number
of employees in clerical occupations probably
will not increase at all. The number of sales
agents (reported in SIC 63), however, is ex
pected to continue growing, increasing insur
ance carrier employment by a little over 10
percent by 1975.
Entry clerical jobs for girls will not be as nu
merous as formerly. As home offices consolidate
more operations within their EDP systems, and
field office recordkeeping is eliminated, entry
clerical jobs will be reduced. Although the high
rate of turnover among young clerks will con
tinue to provide some openings, job oppor
tunities for female high school graduates prob
ably will decrease, especially in cities such as
Des Moines, Omaha, Hartford, Jacksonville,
Portland (Maine), and Springfield (Illinois),
where insurance offices employ a significant
proportion of the clerical labor force.
EDP programing, systems analysis, and operat
ing jobs will continue to increase. It is esti
mated that about 19,000 people were working
Average annual percent change
All employees
1958-64 __________________________________
1.6
in EDP units in 1963. About 8,000 of these
employees were in occupations which did not
exist in 1950. Slightly over a fifth of the work
ers in EDP units were in planning and pro
graming occupations, and about 15 percent
were in computer console or related equipment
operation. Almost two-fifths of the EDP work
ers, however, were engaged in keypunching jobs
—the same type of work required in older
electric accounting machine units. Over a fifth
of the EDP staff were engaged in supporting
clerical work. They included computer tape
librarians, coding clerks, and receptionistsecretaries.
Fifty-five percent of the companies already
using computers reported, in the BLS survey,
that they expected the EDP jobs to increase
in their companies by 1966; nearly all of the
others expected no change. The reasons given
for expecting growth in EDP staff were plans
for additional applications— or for development
of sophisticated “ real time” systems— and ex
pected company growth. Subsequent discus
sions with industry experts indicated that the
trends as seen in 1963 are stilly valid for the
1966-70 period.
Keypunch operator jobs probably will not in
crease between 1965 and 1970. Automatic input
techniques (such as optical scanning), increased
use of “ turn-around” documents, consolidation
of records and separate processing units, and
the completion of EDP conversions by more
recently automated companies will result in a
decline in the growth rate of keypunch opera
tor jobs. Among the surveyed companies that
had plans to install optical scanners, for ex
ample, those that employed 40 percent of the
keypunch operators expected this group to
decline in size. A number of these companies
based their predictions on their optical scanning
plans. Among companies without plans for
optical scanning, those employing nearly 55
percent of the keypunch operators expected this
group to increase.
253
Tabulating machine operator jobs will decline
rapidly. About 70 percent of the surveyed com
panies that operated computers reported that
EDP had caused a decline in the number of
tabulating machine, or electric accounting ma
chine, operators. Most of these employees are
men. Companies employing nearly 80 percent
of the 4,400 tabulating machineOpperators still
employed in 1963 expected a further decline
by 1966. These card tabulating departments,
which have existed in some insurance companies
for many decades, will soon be virtually elim
inated from the industry.
Companies generally utilize attrition rather
than layoffs to reduce employment. Attrition
and transfer, often with retraining, usually has
been sufficient to adjust the occupational struc
ture to new EDP requirements. Industry
growth and relatively high turnover among
young women clerks provided sufficient open
ings to absorb EDP-affected employees. Infor
mation from case studies indicates that during
the first year or two after EDP has been sched
uled for installation, records conversion often
requires additional staff in clerical, supervisory,
and technical occupations. However, since most
insurance companies have already passed
through these initial adjustment stages, future
adjustment of the clerical work force to reduc
tions caused by increasingly consolidated sys
tems may be more difficult. Elimination of
recordkeeping from field offices may cause par
ticular problems for clerical workers, even if
transfers can be offered.
Most employees in EDP occupations in 1963
had been recruited from other jobs within the
company. Slightly over 70 percent of the EDP
staff had been recruited from other areas of
the company, according to the BLS survey.
Reliance on the company’s own personnel as a
source for EDP trainees was particularly
marked in filling positions for systems analyst,
EDP supervisor, computer console and periph
eral equipment operators, and supporting cleri
cal jobs. Maintenance of EDP equipment was
almost always contracted out to the equipment
manufacturer.
About 60 percent of all EDP unit workers were
women. Most women EDP employees (about
90 percent) were engaged in keypunch and
supporting clerical jobs such as those of tape
librarians, data typists, and coding, scheduling,
card, or tape file clerks. They constituted about
93 percent of all employees in these occupational
groups in 1963. Women comprised only 15
percent of the relatively highly skilled systems
analysts and programers. There were also few
women among console and peripheral-equip
ment operators, and EDP supervisory staff.
Shiftwork was found frequently among com
panies with EDP. About 55 percent of the com
panies in the BLS survey had evening or night
shift operators in EDP units. Relatively few
of these companies, however, had other office
units on shiftwork. In most cases, the fully
operating EDP unit may be run by a console
operator, and possibly one or two peripheral
equipment operators. Large batches of work,
such as a premium billing run, may be scheduled
regularly for night shifts. Some companies in
dicated that special night crews of keypunch
operators were recruited for particularly heavy
jobs of records conversion, especially during
the period immediately prior to the first EDP
installation. When computers are used in real
time network systems, shift operations may
be almost universal in the insurance industry,
although only a small staff in the home office
would be required to run the central computer;
field transmission would be automatic.
254
Selected R eferences
Technological Developments
“ Instant Information,” Best’s Insurance News, Life Edition, July 1965, pp. 27, 38.
Jones, W. Everett. “ The Effects of Electronics,” Best’s Insurance News, Life
Edition, July 1962, pp. 67-70.
Kornblum, Richard D. “ Insuring Profitable Policies,” Business Automation, June
1965, pp. 55-59, 70-72.
Life Office Management Association, EDP in Life Insurance, Proceedings of Auto
mation Forum (New York, Life Office Management Association, 1962).
Life Office Management Association, Toward Total Systems for Total Service, Pro
ceedings of Automation Forum (New York, Life Office Management Association)
1965.
Life Office Management Association, Automation Report No. 10, EDP Applicationt>
in Life Insurance Companies (New York, Life Office Management Association,
1965).
McLaughlin, J. G. “ Optical Scanning,” Best’s Insurance News, Life Edition,
December 1962, pp. 31, 42, 44.
Reading Machines for Data Processing; Their Prospective Employment Effects,
Manpower Report No. 7, Office of Manpower, Automation, and Training, U.S.
Department of Labor, 1963.
Manpower Trends and Outlook
Adjustments to the Introduction of Office Automation (BLS Bulletin 1276,
A Large Life Insurance Company Automates, Automation Program Report
Bureau of Employment Security, U.S. Department of Labor, 1964.
Impact of Office Automation in the Insurance Industry (BLS Bulletin 1468,
Industry Wage Survey, Life Insurance, May-July 1961 (BLS Bulletin 1324,
1960).
No. 3,
1965).
1962).
The Federal Government (SIC 9 1 )
vey indicates that 2,451 computers may be
installed in government agencies by mid-1966
— a gain of 85 percent over the number (1,326)
of computers installed by mid-1963. The impact
on employment will increase further as usage
is extended within the agencies having com
puters. Arrangements for government agencies
to share computers have been completed in 13
major cities including New York, Washington,
Chicago, and Los Angeles, and will be gradually
extended to agencies in other metropolitan
areas.
Electronic computers and related equipment
have made possible significant gains in pro
ductivity. For example, the Bureau of the
Census in 1961 performed— with fewer em
ployees— more than twice the volume of work
handled in 1952. It is widely recognized that
thousands of additional employees would be
needed to produce the work now processed by
electronic computers.
Summary of Outlook Through 1970
More widespread and intensive use of com
puters, electronic reading equipment, quick
copy devices, materials handling systems, and
data transmission and communications net
works is expected during the years ahead. Fur
ther significant gains in efficiency are likely,
particularly in routine clerical and in materials
handling functions.
Employment in the Federal government is
expected to increase but at a relatively low
annual rate. Some clerical jobs will be cut back.
But systems analysts, programers, and com
puter operators will increase. Through man
power planning and training programs, federal
agencies are seeking to minimize displacement
due to technological changes. Some experts
expect relocation of employees to be a major
problem.
Outlook for Technology
Optical scanning devices may be in widespread
use by the early 1970's. Agencies are exploring
the potential of optical character recognition
(OCR) equipment for automatically reading
printed and handwritten documents. Optical
scanning can extend the capability of electronic
data-processing by eliminating manual tran
scription and speeding the input of data to
computers. As the equipment scans and “ reads”
documents, the characters are transcribed auto
matically onto card or paper tape, or fed di
rectly into computers. According to the Civil
Service Commission (CSC), employment of
keypunch operators may be cut back by 50 to 90
percent, where adopted.
Electronic data-processing in government is
growing rapidly. First used by the Bureau of
the Census in 1951, an estimated 2,188 elec
tronic computers were in operation throughout
the Government by mid-1965 (exclusive of some
military and classified operations). Computer
operations are being applied to a wide variety
of routine clerical tasks including accounting,
check disbursing, insurance payments, tax re
turn processing, and inventory control. Com
puters are also being applied to a large number
of important scientific and engineering areas,
such as meteorology, missile and satellite track
ing and control, medicine, design and structural
engineering, and nuclear research.
More than 14,000 employees work as adminis
trators, analysts, programers, and operators on
digital computer systems. This figure does not
include thousands who are working in these
positions, but are not so classified, and military
personnel. In addition, thousands of keypunch
operators and clerical personnel are engaged in
EDP supporting tasks.
The outlook for 1970 is for substantial in
creases in computer use. A Budget Bureau sur
Communications systems are being extended
and improved. The Federal Telecommunications
System (F T S), expanded in February 1963,
now involves a network of leased long-distance
circuits interconnecting Federal civilian offices
in 406 metropolitan areas. Nearly all govern
ment agencies are or will soon be included in
the system which provides equipment capability
for telephone, teletypewriter, data transmis
sion, facsimile, and other communications
mediums.
255
256
By using FTS facilities, charges for telephone
service are significantly below comparable commerical rates, service is improved, and the
average number of telephones served per oper
ator is higher. A program is also underway
to consolidate switchboard facilities and to
install Centrex (automated) telephone equip
ment. In one recent consolidation, 54 PBX
stations were eliminated, resulting in a cut-back
of more than 80 operator positions.
Mechanization of Post Office operations is undenvay to handle the growing workload. Nearly
70 billion pieces of mail were handled by the
Post Office Department in 1964; the volume is
projected to reach 90 billion pieces by 1970 and
125 billion by 1980. Employment— 585,000 in
1964— is also expected to increase, but at a
lower rate than output. Mail processed per
man-year may rise by 21 percent between 1960
and 1980.
Mechanization of mail handling and sorting
— operations involving 30 percent of the work
force in a typical post office— is being studied.
One goal is to reduce by 50 percent the number
of times that first class mail is handled.
Research is underway to improve letter sort
ing machines by incorporating electronic mem
ory equipment and optical scanning devices.
This would eliminate manual keyboards on
letter sorters, along with human reading in
sorting about 80 percent of all letter mail. In
1963, 69 sorting machines were installed in
six large post offices. The potential is estimated
at 39-67 additional post offices which will re
quire between 188-388 more letter sorting
machines. Specialized numeric readers are un
der development for use with the new 5-digit
“ ZIP” code.
Improved parcel post and sacked mail sorting
machines are being used more extensively in
larger post offices. One automated parcel-post
system in a Miami, Fla., post office can handle
6,000 packages an hour— double the capacity
of the former manual system. Mechanical fac
ing-canceling machines, which require six
operators, are replacing manual procedures and
old style equipment, which required 10 men.
Magnetically controlled conveyor systems for
transporting and sorting mail trays and patron
self-service devices are also undergoing field
tests.
Mechanization may be stepped up under a
post office program to transfer mail workloads
from small post offices (which cannot support
extensive mechanization) to large volume post
offices.
Automation of materials handling is underway
in ivarehouse and supply operations. In the
General Services Administration’s (GSA) ma
jor supply depots, an integrated order process
ing and materials handling system is in opera
tion for supply distribution, from the receipt
of an order, to selection, packing, shipping, and
billing. Computers, located in each GSA Re
gional Office, automatically prepare nearly all
bills of lading and often provide automatic
shipment consolidation and routing. Modern
conveyor systems used in GSA warehouses
move goods with minimum manual handling.
In the Department of Defense, automated ma
terials handling equipment and electronic com
puters are also achieving significant laborsavings in supply operations.
Manpower Trends and Outlook
Output per man-hour in key Government opera
tions is increasing. A recent Budget Bureau
report cites examples of significant productivity
gains over the past decade in several agencies
which installed electronic computers and other
advances in technology. For example, in the
Veterans Administration’s Department of In
surance, output per man-hour increased at an
average annual rate of 9.8 percent between 1955
and 1962. In a division of the Treasury Depart
ment, the output of checks and bonds issued per
man-year more than tripled between 1949 and
1962.
Employment is expected to continue to rise but
only moderately. According to CSC projections,
total Federal Government employment may rise
by 68,000 workers between mid-1964 and mid1968, an average annual growth rate below 1
percent. Total employment in the Federal Gov
ernment was 2,348,000 in 1964, compared with
2,217,000 in 1957, and 1,892,000 in 1947. Be-
257
EMPLOYMENT AND NUMBER OF COMPUTERS IN
THE FEDERAL GOVERNMENT
Thousands of Employees
2 700
CIVILIAN EMPLOYMENT
2400
2100
800
7
Z
0
1947
Number of
2400
51
53
55
59
57
61
63
1965
2451
ELECTRONIC COMPUTERS
2100 1800 15 0 0
12 0 0
900 600 3 00
0
2
2
3
5
7
'5 3
10
'5 5
*57
'5 9
*6 1
65
67
Estim ated
Sources:
Employment, Civil Service Commission; computers, Bureau of the Budget.
258
Average annual percent change
Civilian employment, all employees
1947-57 ____________ ____ ________________
1957-64 __________________________________
1.6
.8
tween 1957 and 1964, employment grew at an
average annual rate of only 0.8 percent, 50 per
cent below the annual growth rate of 1.6 percent
between 1947-57.
Routine clerical jobs, including keypunchoperator positions, are expected to decrease
significantly in number as optical scanners and
other advances in automation equipment become
more prevalent. Accounting and statistical
clerical occupations, for example, may decline
by 14 percent between mid-1963 and mid-1968,
according to the Civil Service Commission.
Blue-collar employment is also projected to
decline significantly over the next few years.
Professional and technical workers are ex
pected to increase significantly. According to
CSC projections, this occupational group may
increase by 17 percent between 1964 and 1968,
as technical and scientific programs are ex
panded. Mathematicians, mathematical statis
ticians, educators, physical scientists, and en
gineers are occupations expected to show the
greatest growth rates.
Recruiting employees experienced in electronic
computer operations could be a major problem.
By 1968, the CSC estimates that the number
of employees in EDP positions may be 50 per
cent greater than in 1963, as agencies extend
computer operations. Systems analysts and pro
gram ed may be in especially short supply.
Middle managers and executives will need to
acquire additional skills and techniques to keep
pace with changing computer technology.
Training programs will become increasingly
important as computer applications become
more complex and experienced employees more
difficult to locate.
Federal agencies have tried to minimize dis
placement through manpower planning. Sepa
rations and reassignments due to automation
were minimal over a 3-year span in 16 agencies
surveyed by the CSC in 1963-64. In the con
version to electronic data-processing in the
Internal Revenue Service, attrition, advance
notice, transfer, and retraining helped avoid
layoffs. Special Civil Service Commission ac
tions including waiver of job qualification
standards during reassignments for some em
ployees displaced by EDP have also been helpful
in the IRS and other agencies. Growth in
agency programs and new positions created by
automation have also facilitated reassignment
of displaced employees. In the Post Office De
partment, the policy has been to mechanize
gradually so that manpower adjustments could
be facilitated through normal attrition and
regulation of hiring. Full-time career employ
ees reportedly would not be laid off.
Relocation of displaced employees may be the
foremost task facing Federal administrators.
The closing down of obsolete facilities in the
Department of Defense and other agencies may
involve transfer of thousands of employees to
jobs in new locations. In the IRS conversion to
computers, employees were found to be reluc
tant to sever community ties and undertake the
financial losses often associated with moving.
Some experts recommend complete reimburse
ment of moving expenses to encourage mobility,
and a coordinated effort by agencies to find jobs
elsewhere within the community for workers
who cannot relocate.
Reassignment and retraining may become more
difficult as automation eliminates routine jobs
to which displaced employees had been reas
signed in the past. Expansion of automation
may pose challenging problems for blue-collar
workers because their skills may not be as
adaptable to other occupations as are the skills
of white-collar workers. Older employees and
supervisors displaced by automation may also
need special attention, including retraining.
Rapid technological change is reportedly caus
ing skill obsolescence, downgrading, and job
displacement among civilian mechanics and
electricians. Thousands of jobs in defense in
stallations have been made obsolete as weapon
systems have become highly complex. Training
programs have been successful in preparing
displaced blue-collar employees for electronic
technician jobs and other positions. However,
259
some employees reportedly have experienced
difficulty in adjusting- to training and new
duties.
Special Federal Government and union groups
are exploring the manpower implications of
automation. The CSC’s Interagency Advisory
Group’s Committee on Automation and Man
power currently has several “ Task Forces”
investigating such topics as personnel adjust
ments required by automation; techniques for
projecting and reporting manpower require
ments; manning and utilization of electronic
computers; and prospects for future techno
logical innovations. A special committee of the
AFL-CIO Government Employes Council, rep
resenting 31 Federal and postal employee un
ions, has also been established recently to study
and report the effects of changing technology
on Federal workers.
Selected References
U.S. Bureau of the Budget, Executive Office of the President, Inventory of Auto
matic Data Processing Equipment in the Federal Government. (1965), 365 pp.
U.S. Bureau of the Budget, Executive Office of the President, Measuring Produc
tivity of Federal Government Organizations. (1964), 370 pp.
U.S. Bureau of the Budget, Executive Office of the President, War on Waste. (1965),
90 pp.
U.S. Civil Service Commission. Federal Workforce Outlook, Fiscal Years 19651968. (November 1964), 52 pp.
U.S. Congress, House of Representatives, Committee on Post Office and Civil Serv
ice. A Study of the Impact of Automation on Federal Employees. Prepared by
the United States Civil Service Commission. 88th Cong., 2d sess. (August 1964),
52 pp.
U.S. Congress, House of Representatives, Committee on Post Office and Civil Serv
ice. Use of Electronic Data Processing Equipment in the Federal Government.
(October 1963), 121 pp.
U.S. Department of Labor, Bureau of Labor Statistics. Impact of Office Automation
in the Internal Revenue Service, (BLS Bulletin 1364, 1963), 108 pp.
U.S. General Services Administration. Annual Reports of the Administrator of
General Services— Fiscal Years 1963 and 1964. (1964 and 1965).
U.S. Post Office Department. Annual Reports of the Postmaster General— 1963 and
1964. (1964 and 1965.)
U.S. Post Office Department. Research, Development, and Mechanization in the
U.S. Post Office Department. An Interim Report to the Postmaster General by
the Post Office Department Advisory Board. (February 1963), 65 pp.
PART V.
SELECTED BIBLIOGRAPHY
Technological Change and Forecasts
Ad Hoc Committee on the Triple Revolution. The Triple Revolution; An Appraisal
of the Major U.S. Crises and Proposals for Action, Washington, Maurer, Fleisher,
Zon and Associates, 1964. 29 pp.
The Age of Electronics, Edited by Carl F. J. Overhage, New York, McGraw-Hill
Book Co., 1962. 218 pp.
American Assembly, Columbia University. Automation and Technological Change.
Edited by John T. Dunlop, Englewood Cliffs, N.J., Prentice-Hall, 1962. 184 pp.
Aronson, Robert A. “ Perspective on Automation,” ILR Research, No. 3, 1965,
pp. 3-11.
Automation: A Discussion of Research Methods, Labour and Automation, Bulletin
No. 1, International Labour Office, Geneva, 1964. 276 pp.
Automation and Technological Changes, Proceedings of the Battelle-American
Assembly, May 9-11,1963, Battelle Memorial Institute, July 1963. 32 pp. (Papers
by James R. Bright and Donald N. Michael.)
Automation-Implications for the Future. Edited by M. Phillipson, New York,
Vintage Books, 1962. 456 pp.
Barach, Arnold and the Kiplinger Washington Editors. 1975 and the Changes to
Come, New York, Harper & Brothers, 1962. 195 pp.
Basic Research and National Goals, A report to the committee on Science and Astro
nautics, U.S. House of Representatives, by the National Academy of Sciences,
Washington, 1965. 336 pp.
Bell, Daniel. “ The Study of the Future,” The Public Interest, Fall 1965, pp. 119-130.
Berkeley, Edmund C. The Computer Revolution, New York, Doubleday and Co., Inc.,
1962. 249 pp.
Bright, James R. Automation and Management, Boston, Graduate School of Busi
ness Administration, Harvard University, 1958. 270 pp.
------ . “ Opportunity and Threat in Technological Change,” Harvard Business
Review, November/December 1963, pp. 76-86.
------ . Research, Development and Technological Innovation; An Introduction,
Homewood, 111., Richard D. Irwin, 1964. 783 pp.
------ . Editor. Technological Planning on the Corporate Level, Cambridge, Mass.,
Harvard Graduate School of Business Administration, 1962. 253 pp.
Brozen, Yale. Automation: The Impact of Technological Change, American Enter
prise Institute for Public Policy Research, March 1963. 47 pp.
Buckingham, Walter. Automation: Its Impact on Business and People, New York,
Harper & Brothers, 1961. 196 pp.
Burck, Gilbert. The Computer Age, New York, Harper & Row, 1964. 148 pp.
Charyk, Joseph V. “ The Role of Satellites in World Communications,” Proceedings
of Fifty-First National Foreign Trade Convention, 1964, pp. 86-98.
Clague, Ewan. Measurement of Technological Change, Paper for Conference on
Employment Problems of Automation and Advanced Technology, International
Institute for Labour Studies, Geneva, Switzerland, July 20-24, 1964, Washington,
U.S. Department of Labor, Bureau of Labor Statistics, 1964. 13 pp.
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Economics of R&D, Edited by Richard Tybout, Columbus, Ohio, Ohio State Uni
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Hearings Before the Commission on Manpower, Automation, and Technology, State
of California, November 19 and 20, 1964, San Francisco, Calif., 1965. 145 pp.
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Landsberg, Hans H., Leonard L. Fischman and Joseph L. Fisher. Resources in
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McGraw-Hill Yearbooks of Science and Technology, 1963,1964, and 1965, New York,
McGraw-Hill Book Co., Inc., 1963, 1964, and 1965/
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262
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Administration, Office of Manpower, Automation and Training, 1964. 34 pp.
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of Democratic Institutions, 1962. 48 pp.
------ . The Next Generation, New York, Random House, 1965. 218 pp.
National Bureau of Economic Research. The Rate and Direction of Inventive
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New Decision-Making Tools For Managers, Mathematical Programing as an Aid in
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Pierce, John R. “ Communications Technology and the Future,” Daedalus, Spring
1965, pp. 506-517.
Proceedings of the Institute of Radio Engineers. 50th Anniversary Issue, May 1962.
1447 pp.
“ The Promise and Problems of Technological Change,” Annual Report of the Coun
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“ Reading Machines for Data Processing: Their Prospective Employment Effects,”
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Scientific and Technical Manpower Resources, Washington, National Science Foun
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Survey of Computers and Computer Usage, New York, McGraw-Hill Book Co.,
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Technology and Social Change, Edited by Eli Ginzberg, New York, Columbia
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1963. 208 pp.
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Toward Better Utilization of Scientific and Engineering Talent, A Program for
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Transforming and Using Space-Research Knowledge ( Ten Diversified Views),
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An Introduction to Human Problems in the Machine Age, New York, McGrawHill Book Co., 1962. 469 pp.
“ What Automation Means to America,” Automation, Vol. 11, April 1964 (entire
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The World in 198U, Vol. 1 , Edited by Nigel Calder, Baltimore, Md., Penguin Books,
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Manpower Trends and Outlook
Alterman, Jack. “ Interindustry Employment Requirements,” Monthly Labor Review,
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Automation and the Challenge to Education, edited by Luther H. Evans and George
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Employment of Scientific and Technical Personnel in Industry, 1962, (BLS Bulletin
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Fulton, Joseph F. “ Employment Impact of Changing Defense Programs,” Monthly
Labor Review, May 1964, pp. 508-516.
Garfinkle, Stuart H. Job Changing and Manpoiver Training, Manpower Report
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Ginzberg, Eli. “ Automation and Minority Manpower: Challenge to Management,”
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------ . Dale L. Heistand, and Beatrice G. Rubens. The Pluralistic Economy, New
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Goldstein, Harold. “ BLS Occupational Trend Projections: An Appraisal,” Monthly
Labor Review, October 1963, pp. 1135-1138.
------ . “ Education and Worklife in a Changing Economy,” Occupational Outlook
Quarterly, September 1965, pp. 1-4.
Gordon, Margaret S. Retraining and Labor Market Adjustment in Western Europe,
Washington, U.S. Department of Labor, Manpower Administration, 1965. 230 pp.
------ . “ U.S. Manpower and Employment Policy— A Review Essay,” Monthly Labor
Review, November 1964, pp. 1314-1321.
Gordon, R. A. Has Structural Unemployment Worsened?, Berkeley, Calif., Institute
of Industrial Relations, University of California, 1964. 24 pp.
------ . Twenty Years of Economic and Industrial Change, Washington, U.S. Depart
ment of Labor, Manpower Administration, 1965. 45 pp.
Greenberg, Leon. The Relationship of Automation, Productivity, and Employment;
Current Developments in the United States, Washington, Bureau of Labor Statis
tics, June 1964. 10 pp.
------ . “ Statement Before the Subcommittee on Employment and Manpower,”
Nation’s Manpower Revolution, Vol. 5, U.S. Senate, Committee on Labor and
Public Welfare, 88th Cong., 1st sess., Sept. 26, 1963, pp. 1578-1596.
------ . and Edgar Weinberg. “ Technological Change, Productivity and Employ
ment,” Occupational Outlook Quarterly, Vol. 8, No. 3. September 1964, pp. 5-11.
Haber, W., L. Ferman, and J. Hudson. The Impact of Technological Change,
Kalamazoo, Mich., W. E. Upjohn Institute for Employment Research, 1963. 62 pp.
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1965, pp. 27-36.
Henle, Peter. “ Recent Growth of Paid Leisure for U.S. Workers,” Monthly Labor
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265
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Unemployment and the Impact of Automation. Washington, 87th Cong., 1st sess.,
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on Unemployment and the Impact of Automation, 1961. 793 pp.
International Labour Office. Health and Safety Aspects of Automation and Tech
nological Change, Washington, U.S. Department of Labor, Office of Manpower,
Automation and Training, 1964. 181 pp.
Jakubauskas, Edward B. “ Retraining— A Problem Created Through Equipment
Replacement,” Personnel Journal, November 1963, pp. 512-518.
Levine, Louis. “ Occupational Information and Changing Jobs,” Employment Service
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Levitan, Sar A. Federal Manpower Policies and Programs to Combat Unemploy
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41 pp.
------ . Reducing Worktime As A Means to Combat Unemployment, Kalamazoo,
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Liebhafsky, E. D. “ Improving the Operation of Labor Markets Through Employ
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pp. 317-325.
Lipstreu, Otis. “ Problem Areas in Training For Automated Work,” Training
Directors Journal, November 1964, pp. 12-15.
------ . “ Training Implications of Automation,” Journal of the American Society of
Training Directors, June 1960, pp. 48-51.
Long Term Manpower Projections (Proceedings of a Conference Conducted by the
Research Program on Unemployment and the American Economy, University of
California, June 25-26, 1964), edited by R. A. Gordon, Berkeley, University of
California, Institute of Industrial Relations, 1965. 64 pp.
Manpower Implications of Automation, papers by Leon Greenberg, Seymour L.
Wolfbein, Ewan Clague, Louis Levine, Robert C. Goodwin, and John P. Walsh,
Washington, U.S. Department of Labor, Manpower Administration, 1965. 86 pp.
Manpower Report of the President and a Report on Manpower Requirements,
Resources, Utilization, and Training, Washington, U.S. Department of Labor,
March 1965. 276 pp.
The Manpoiver Revolution, Its Policy Consequences. Excerpts from Senate Hearings
Before the Clark Committee, Garth Mangum, editor, Garden City, N.J., Double
day and Co., Inc., 1965.
Manor, Stella P. “ Geographic Changes in U.S. Employment from 1950 to 1960,”
Monthly Labor Review, January 1963, pp. 1-10.
Men Without Work, The Economics of Unemployment, edited by Stanley Lebergott,
Englewood Cliffs, N.J., Prentice-Hall, 1964. 183 pp.
Michael, Donald N. Cybernation and Social Change, Seminar on Manpower Policy
and Social Change, Washington, U.S. Department of Labor, Manpower Adminis
tration, 1964. 34 pp.
National Manpower Council. Government and Manpower: A Statement by the
National Manpoiver Council with Background Chapters by the Council Staff,
New York, Columbia University Press, 1964. 470 pp.
National Office Management Association. “ Impact of Automation on the Training
of Present and Future Office Employees,” Proceedings, NOMA Problem-Solving
Seminar, Willow Grove, Pa., June 1962. 68 pp.
Occupational Outlook Handbook, 1966-67 Edition, Washington, (BLS Bulletin 1450,
1965). 858 pp.
266
Organisation for Economic Co-operation and Development. Manpoiver Policy and
Programmes in the United States, New York, McGraw-Hill Book Co., 1964.
Ruttenberg, Stanley H. Manpower Needs of the Future, Report presented to Ameri
can Vocational Association Convention, December 1965, Washington, U.S. Depart
ment of Labor, Manpower Administration. 52 pp.
Rutzick, Max, and Sol Swerdloff. “ The Occupational Structure of U.S. Employment,
1940-60,” Monthly Labor Review, November 1962, pp. 1209-1213.
Salner, Edward. “ The Manpower Problems of Automation,” Employment Service
Review, October 1965, pp. 48, 51-54.
Scientists, Engineers, and Technicians in the 1960’s; Requirements and Supply,
Washington, Bureau of Labor Statistics, 1964. 68 pp.
Scott, W. H. Office Automation, Administrative and Human Problems, Paris,
Organisation for Economic Co-operation and Development, 1965. 103 pp.
Selected Readings in Employment and Manpower, 6 Vols., Washington, 88th Cong.,
2nd sess., U.S. Senate Committee on Labor and Public Welfare, Subcommittee on
Employment and Manpower, 1964-65.
Shultz, George P. “ Unemployment and Labor Market Policy,” Monthly Labor
Review, July 1963, pp. 808-810.
Silberman, Charles. “ Technology and the Labor Market, I and II,” Fortune,
January-February 1965.
Solow, Robert M. “ Technology and Unemployment,” The Public Interest, Fall 1965,
pp. 17-26.
Toward Full Employment: Proposals for a Comprehensive Employment and Man
power Policy in the United States, U.S. Senate, Committee on Labor and Public
Welfare, Subcommittee on Employment and Manpower, 88th Cong., 1st sess.,
Washington, 1964. 148 pp.
Unemployment and the American Economy, edited by Arthur M. Ross, New York,
John Wiley and Sons, 1964. 216 pp.
U.S. Department of Labor, Bureau of Apprenticeship and Training. Training of
Workers in American Industry, Research Division Report No. 1, Washington,
1964. 16 pp.
Weber, Arnold R. “ Automation and Retraining,” Proceedings, New York Uni
versity Conference on Labor, 1963, pp. 59-80.
------ . “ The Rich and the Poor: Employment in an Age of Automation,” Social
Service Review, Vol. 37, September 1963, pp. 249-262.
Wilcock, Richard C. and Walter H. Franke. Unwanted Workers, New York, Free
Press of Glencoe, 1963. 340 pp.
Wolfbein, Seymour L. “ Labor Trends, Manpower and Automation,” Man in A World
of Work, edited by Henry Borow, Boston, Houghton Mifflin Co., 1964, pp. 155-173.
------ . “ The Outlook for the Skilled Worker in the United States: Implications for
Guidance and Counseling,” Personnel and Guidance Journal, December 1961,
pp. 334-339.
Adjustments to Technological Change
Aaron, Benjamin. “ Reflections on the Legal Nature and Enforceability of Seniority
Rights,” Harvard Law Revieiv, June 1962, pp. 1532-1564.
“ Adaption to Technological Change Under Collective Bargaining,” Proceedings of
the Twelfth Annual Labor-Management Conference, April 12-13, 1962, pp. 1-15.
Adjusting to Technological Change, edited by Gerald G. Somers, Edward L. Cush
man, and Nat Weinberg, New York, Harper and Row, 1963. 230 pp.
267
Backman, Jules. “ Cushioning the Impact of Technological Change,” Labor Law
Journal, September 1962, pp. 731-746.
Bloch, Joseph W. “ Problems of Collective Bargaining in a Changing Technology—
Its Impact on Wages, Working Conditions and Fringes,” British Columbia Labour
Management Conference, 1963.
Bok, Derek and Max D. Kossoris. Methods of Adjusting to Automation and Tech
nological Change, prepared for the President’s Committee on Labor-Management
Policy. Washington, U.S. Department of Labor. 33 pp.
Creative Collective Bargaining: Meeting Today's Challenges to Labor-Management
Relations. Edited by James J. Healy, Englewood Cliffs, N.J., Prentice Hall, Inc.,
1965.
Employer Attitudes Toward Advance Notice of Technological Change. Washington,
U.S. Department of Labor, Bureau of Employment Security, June 1962. 41 pp.
Farwell, Donald F. Extended Vacations; An Innovation in Collective Bargaining,
Washington, Bureau of National Affairs, Inc., 1964. 153 pp.
Freidricks, Gunter. “ Planning Social Adjustment to Technological Change at the
Level of the Undertaking,” International Labour Review, August 1965, pp. 91-105.
Frye, Jack. “ Attrition in Job Elimination,” Labor Law Journal, September 1963,
pp. 809-817.
Ginsburg, Barry M. “ The Impact of Automation on Wage and Salary Administra
tion,” ILR Research, Nov. 1, 1963, pp. 3-9.
Gitlow, Abraham L. “ A Note On: Technological Change, Trade Union Structure
and the Appropriate Bargaining Unit,” Challenge, October 1964, pp. 28-29.
Gray, Arlen. “ Problems of Adjustment in the Automated Office,” Personnel, JulyAugust 1964, pp. 43-48.
Helfgott, Roy B. “ Easing the Impact of Technological Change on Employees: A
Conspectus of United States Experience,” International Labour Review, June
1965, pp. 28-37.
------ . and R. Beaumont. Management, Automation and People, New York, Indus
trial Relations Counselors, 1963. 378 pp.
Hildebrand, George H. “ The Use of Tripartite Bodies to Supplement Collective
Bargaining,” Labor Law Journal, July 1961, pp. 655-664.
Hoos, Ida R. “ The Personnel Administrator and Technological Change,” Public
Personnel Review, July 1963, pp. 152-157.
“ Humanizing Technological Change,” American Federationist, August 1964, pp.
11-16.
Kennedy, Thomas. Automation Funds and Displaced Workers, Boston, Harvard
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Killingsworth, Charles C. “ Collective-Bargaining Approaches to Employee Dis
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Railroad Commission, Appendix Volume IV, Studies Relating to Collective Bar
gaining Agreements and Practices Outside the Railroad Industry, Washington,
1962, pp. 194-228.
Kirsh, B. S. Automation and Collective Bargaining, New York, Central Book
Company, 1964. 219 pp.
Kossoris, Max. “ Early Retirement,” Industrial Relations, May 1965, pp. 1-28.
Kuhn, James and Ivar Berg. “ Bargaining and Work-Rule Disputes,” Social Research,
Winter 1964, pp. 466-481.
Labor Mobility and Private Pension Plans: Study of Vesting, Early Retirement and
Portability Provisions, Washington (BLS Bulletin 1407, 1964), 74 pp.
268
Lipstreu, Otis and Kenneth A. Reed. “ A New Look at the Organizational Implica
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Major Collective Bargaining Agreements, Severance Pay and Layoff Benefit Plans,
Washington (BLS Bulletin 1425-2, March 1965), 109 pp.
Major Collective Bargaining Agreements, Supplemental Unemployment Benefit
Plans and Wage-Employment Guarantees, Washington. (BLS Bulletin 1425-3,
June 1965). 107 pp.
McLaughlin, Richard P. “ Collective Bargaining— The New Trend,” Labor Law
Journal, August 1964, pp. 499-518.
Oswald, Rudolph. “ Easing Job Changes By Advance Notice,” AFL-CIO American
Federationist, December, 1965, pp. 13-17.
President’s Advisory Committee on Labor-Management Policy. Seminars on Private
Adjustments to Automation and Technological Change, Washington, May-June
1964, various paging.
------ . The Benefits and Problems Incident to Automation and Other Technological
Advances, Washington, 1962. 11 pp.
“ Protecting Job Rights Through Attrition Clauses,” AFL-CIO American Federa
tionist, June 1965 (reprint 5 pp.).
Recent Collective Bargaining and Technological Change, Washington, Bureau of
Labor Statistics, Report 266, March 1964. 14 pp.
Segal, Martin E. “ Pension Plans Limitations In Solving Job Problems,” The
Commercial and Financial Chronicle, Jan. 7, 1965, p. 164.
Seligman, Ben B. “ Men, Work, and the Automated Feast,” Commentary, July 1962,
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Shils, Edward B. Automation and Industrial Relations, New York, Holt, Rinehart
and Winston, Inc., 1963. 360 pp.
Soffer, Benson. “ Seniority Reform— One Answer to Displacement of the Older
Worker,” Personnel, March-April 1963, pp. 19-26.
Stern, James L. “ Automation— End or a New Day in Unionism?” , Annals of the
American Academy of Political Science, November 1963, pp. 25-35.
Taylor, George W., William Haber, John T. Dunlop and Others, Monthly Labor
Review, July 1965 (50th Anniversary Issue). 175 pp.
Williams, Laurence K. “ The Human Side of a Systems Change,” Systems and
Procedure Journal, July/August 1964.
Wirtz, Willard W. Labor and the Public Interest, New York, Harper and Row, 1964.
196 pp.
“ Worker Security in a Changing Economy,” Monthly Labor Review, June 1963,
entire issue.
Work Force Adjustments to Technological Change: Selected Employer Procedures,
Washington, U.S. Department of Labor, Manpower Administration, Bureau of
Employment Security, BES E-215, January 1963. 62 pp.
Bibliographies on Technological Change
Canadian Department of Labour. A Selected Bibliography on the Social and Eco
nomic Implications of Electronic Data Processing, Ottawa, Department of Labour,
March 1964. 75 pp.
Counselor's Guide to Occupational and Other Manpower Information: An Annotated
Bibliography of Selected Government Publications, Washington, Bureau of Labor
Statistics, Bulletin 1421, January 1964. 87 pp.
269
Current Projects on Economic and Social Implications of Science and Technology,
1961/, Washington, National Science Foundation. 180 pp.
Instructional Materials on Productivity and Automation: An Annotated Bibliog
raphy, by Omar Kussow; A descriptive list of films, by William Dunwiddie,
Madison, University of Wisconsin, Center for Productivity Motivation, 1965.
14 pp.
International Labour Office. A Review of Recent Soviet Literature on the Social
Aspects of Automation and Technological Change in the U.S.S.R., Geneva, 1964.
------ . Social Aspects of Automation, Geneva, 1963. 98 pp.
A Survey of Current Literature on Automation and Other Technological Changes,
1963-61/-, A Selected Annotated Bibliography, Washington, U.S. Department of
Labor, Manpower Administration, 1966 (in press).
* U.S. GOVERNMENT PRINTING OFFICE :
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(Bulletin 1468, 1965), 71 pp., 45 cents.
Survey of extent and future directions of EDP, manpower impact, and implications.
Im p a ct
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Describes personnel procedures and practices used to minimize hardships on employees.
M a n p o w e r P la n n in g
(Bulletin 1437, 1965), 63 pp., 40 cents.
Outlook for this key technological innovation in the metalworking industry and implications for productivity,
occupational requirements, training programs, employment, and industrial relations.
O u tlo o k f o r N u m e r ic a l C o n tr o l o f M a c h in e T o o ls
o f D i s p l a c e d W o r k e r s (Bulletin 1408, 1964), 94 pp., 50 cents.
Case studies of the post layoff experiences of nearly 3,000 workers formerly employed in the petroleum refining,
automotive equipment, glass jar, floor covering, and iron foundry industries.
C a se S tu d ie s
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Describes over 300 books, articles, reports, speeches, conference proceedings, and other readily available
materials.
Im p lic a tio n s
P r o g r a m s f o r T e c h n o lo g ic a l C h a n g e
(Bulletin 1368, 1963), 34 pp. Out of print, available in
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A study of the performance of older workers based on four case studies of industrial plants.
In d u str ia l R etr a in in g
o f O f f i c e A u t o m a t i o n i n t h e I n t e r n a l R e v e n u e S e r v i c e (Bulletin 1364, 1963), 74 pp. Out of print, available
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A case study highlighting manpower planning and employment impacts during a major conversion.
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General industry survey and three case studies highlighting implications of technological change.
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(Bulletin 1305, 1961), 136 pp.,
65 cents.
Trends in technology and productivity and implications for employment, unemployment, and wages.
to th e I n t r o d u c t io n o f O ffic e A u t o m a t i o n
(Bulletin 1276, 1960), 86 pp., 50 cents.
A study of some implications of the installation of electronic data processing in 20 offices in private industry,
with special reference to older workers.
A d ju s tm e n ts
o f A u t o m a t i c T e c h n o l o g y (Free)
A series of case studies of plants introducing automation. Describes changes and implications for productivity,
employment, occupational requirements, and industrial relations. Studies cover cases in electronics, insurance,
bakery, petroleum refining, and airline industries.
S tu d ie s
o f O u tp u t P e r M a n -H o u r f o r —
Private Economy, 1947-64. January 1965 (Free).
Selected Industries, 1939 and 1947-63. December 1965 (Free).
Footwear Industry, 1947-63. July 1965 (Free).
Gas and Electric Utilities Industry, 1932-62. April 1964 (Free).
Man-Made Fibers Industry, 1957-63. October 1965 (Free).
Primary Aluminum Industry, 1947-62. September 1964 (Free).
Steel Industry, 1957-63. November 1964 (Free).
In d ex es
Sales publications may be purchased from the Superintendent of Documents, Washington, D.C. 20402, or from
regional offices of the Bureau of Labor Statistics at the addresses shown below. Free publications are available,
as long as the supply lasts, from the Bureau of Labor Statistics, U.S. Department of Labor, Washington, D.C.
20212.
R e g io n a l
O ffic e s:
New England Region
18 Oliver Street
Boston, Mass. 02110
Middle Atlantic Region
341 Ninth Avenue
New York, N .Y . 10001
East Central Region
1365 Ontario Street
Cleveland, Ohio 44114
North Central Region
219 South Dearborn Street
Chicago, 111. 60603
Southern Region
1371 Peachtree Street, NE.
Suite 540
Atlanta, Ga. 30309
Western Region
450 Golden Gate Avenue
Box 36017
San Francisco, Calif. 94102
