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JU fL c'S

Technology and Its Impact
on Labor in Four Industries
U.S. Department of Labor
Bureau of Labor Statistics
May 1986
Bulletin 2242

Technology and Its Impact
on Labor in Four Industries
U.S. Department of Labor
William E. Brock, Secretary
Bureau of Labor Statistics
Janet L. Norwood, Commissioner
May 1986
Bulletin 2242

For sa le by th e S u p erin ten d en t o f D ocum ents, U .S. G overnm ent P r in tin g Office, W ash in gton , D.C. 20402


i -


' V ,



This bulletin appraises some of the major technological
changes emerging among selected American industries
and discusses the impact of these changes on pro­
ductivity and labor over the next 5 to 10 years. It con­
tains separate reports on the following four industries:
Tires and inner tubes (SIC 3011); aluminum (SIC 3334, 54,
55); aerospace (sic 372, 376); and commercial banking
(Sic 602).
This publication is one of a series which presents the
results of the Bureau’s continuing research on produc­
tivity and technological developments in major industries.
Previous bulletins in this series are included in the list of
b l s publications on technological change at the end of
this bulletin.
The bulletin was prepared in the Bureau’s Office of
Productivity and Technology, Jerome A. Mark,

Associate Commissioner, under the direction of Charles
W. Ardolini, Chief, Division of Industry Productivity and
Technology Studies. Individual industry reports were
written under the supervision of Rose N. Zeisel and
Richard W. Riche, by A. Harvey Belitsky (tires and in­
ner tubes); Richard W. Lyon (aluminum); Charles L. Bell
(aerospace); and Robert V. Critchlow (commercial
The Bureau wishes to thank the following orga­
nizations for providing the photographs used in this
study: Farrel Company (Emhart Machinery Group);
LTA Aerospace and Defense Company; and NCR
Material in this publication, other than photographs,
is in the public domain and, with appropriate credit, may
be reproduced without permission.


1. Tires and inner tubes.........................................................................................................
2. A lum inum ...........................................................................................................................
3. Aerospace ...........................................................................................................................
4. Commercial b an k in g ..........................................................................................................


1. Major
2. Major
3. Major
4. Major




in tires ...................................................................................
in alu m in u m .........................................................................
in aerospace...........................................................................
in commercial banking .......................................................

1. Output per employee hour and related data,tires and inner tubes, 1970-84 ............
2. Employment in tires and inner tubes, 1970-84, and projections, 1984-95 ................
3. Output per employee hour and related data, primary aluminum, 1970-84 ...............
4. Output per employee hour and related data, aluminum rolling, drawing,
and extruding, 1970-84....................................................................................................
5. Employment in primary aluminum, 1970-84..................................................................
6. Employment in aluminum rolling, drawing, and extruding, 1970-84 ........................
7. Output and employee hours, aircraft and parts, 1972-82 .............................................
8. Output and employee hours, missiles and space vehicles, 1972-82 .............................
9. Employment in aircraft and parts, 1970-84, and projections, 1984-95 ....................
10. Output per employee hour and related data, commercial banking, 1970-83 ............
11. Employment in commercial banking, 1970-84, and projections, 1984-95 ................


Other BLS publications on technological change......................................................................




Chapter 1. Tires and Inner Tubes


In 1983, radial tires accounted for about 73 percent
of all passenger tires: At least 84 percent of originalequipment tires and 70 percent of replacement tires. Ex­
cluding the bias-ply temporary spare tires, with which the
newest automobiles are equipped, virtually all originalequipment passenger tires were radial in 1983. In the com­
bined truck and bus tire market, radials accounted for
about 36 percent of all tires: 47 percent of originalequipment tires and 34 percent of replacement tires. Dif­
fusion of radials on commercial vehicles is expected to
Technological improvements in tire belting materials
(usually steel wire) are not expected to alter unit labor
requirements significantly. Moreover, use of fiberglass
belt tires by automobile manufacturers is not expected
to increase, as had been anticipated. Some newer synthetic
materials, such as aramid, are more durable (5 times
stronger than steel), lighter in weight, and run cooler than
steel-belted tires, and, therefore, may last longer.
Another development—the so-called “ run-flat” tire—
could eliminate the spare tire. However, it is still in an
experimental stage of development.
Currently, the major technological improvements are
the increasing application of microprocessor controls and
the use of computer controls. While robot development
and application are underway in the larger plants, accord­
ing to industry spokesmen, data are not available on this
technology. The effects of these technologies on labor re­
quirements vary considerably, as summarized in table 1
and discussed below.

The conversion of most of the industry’s capacity to
the production of radial tires, along with the total or par­
tial closing of 26 plants during the period 1973-84, has
greatly affected the tire and inner tube industry (SIC
The application of microprocessor-controlled in­
struments in tire manufacturing has advanced the pace
of automation. However, the linkage of microprocessor
controls to a central computer is only likely to become
significant in the next 10 years, and the robot is still in
the experimental stage in tire plants.
The output of tires declined at an average annual rate
of - 1.4 percent during 1973-84, but, assuming improve­
ment in auto sales, the outlook is for a modest growth
in output, despite the greatly improved service life of tires
and substantial tire imports.
An average annual rate of productivity increase of 4.2
percent during 1973-84 was associated with a substantially
greater decline in employee hours than in output. The
productivity improvement was related primarily to the
installation of new equipment to accommodate the shift
in demand to radial tires.
In constant dollars, average annual plant and equip­
ment outlays for the period 1970-82 were more than 10
percent higher than during 1960-70 because the industry
found it necessary to make sizable investments in plant
and equipment to produce radial tires.
Employment declined at an average annual rate of
- 1 .7 percent during 1970-84, but there were sharp
cyclical fluctuations during the period. In 1984, 94,000
persons were working in tire establishments, the lowest
number since the early 1940’s, and the decline is expected
to continue. On the basis of its moderate version of
economic growth, b l s projects an average annual decline
of about 1 percent for the period 1984-95. It is likely that
there will be greater worker involvement in the manage­
ment of the production process.

Microprocessor controls

The application of microelectronic technology—
especially microprocessor controls—in new equipment
and its adaptation to older machinery is greatly advanc­
ing the pace of automation in the industry. Microelec­
tronic changes contrast sharply with such traditional
changes as faster machines and better conveyorization.
A microprocessor-controlled instrument ( m c i ) controls
functions in any programmable sequence and has several
operating advantages over an instrument comprised of
extensive relay controls, or mechanical switches that con­
trol electrical current. An MCI, consisting of a large-scale,
integrated circuit or a set of integrated circuits, performs
the functions of a central processing unit and is often used
in combination with sensor devices. M Ci’s are cost effec­
tive at individual process levels where the greater power
and range of computers are not required.

Technology in the 1980’s
The conversion to the production of radial tires, which
started in the early 1970’s, has had a major influence on
the industry. The technological changes (together with
cyclical movements) affected employment, productivity,
labor-management relations, and other aspects of the
structure of the industry.

tral research and development facilities of tire manufac­
turing companies.
The technological improvements in controls have been
generally limited to some processes of tire manufactur­
ing, or to only portions of processes. The processes in­
clude: Stock preparation and mixing of materials; com­
ponent preparation or extrusion of treads, beads, belts,
and plies; calendering, in which liquid rubber is applied to
steel, fiberglass, or polyester webs to form the plies; tire­
building, in which components are assembled on building
drums; molding and curing, in which steam and tempera­
ture cycles are controlled; and testing and inspection.
While M Ci’s have been applied to all of the tire
manufacturing processes, substantial reductions in unit
labor requirements have resulted in only the two follow­
ing processes.

The principal improvements from the use of M Ci’s are
usually evident in the reduction of defective parts and are
associated with slightly lower unit labor requirements.
Materials savings and energy conservation are additional
Moreover, operators can adapt quite readily to M Ci’s.
The MCI may have a programmable controller, and the
machine’s operator only needs to select a combination
of letters and numbers in order to make parameter
changes. In addition, the variables of a process usually
only require monitoring the measurements of components
or stock that are on continuous display. Monitoring is
aided by alarms that are set to prevent problems with
material or a machine. The MCI is simpler than a network
of relay controls, which may require considerable labor
for wiring, debugging, and maintenance. However,
maintenance personnel need a knowledge of electronics
to maintain MCI equipment.
There is some uncertainty as to the rate of diffusion
of m c i ’s . Athough the larger tire manufacturers are
known to have undertaken substantial development of
these technological improvements, data on their utiliza­
tion are unavailable. Also, many companies have made
substantive changes in the innovations introduced by
firms mainly engaged in developing and manufacturing
tire-producing equipment.
The linkage of microprocessor controls to a central
computer and the utilization of robots are primarily in
the experimental stage within single plants or at the cen­

MCI in tirebuilding. Unlike the application of only m c i ’s
in most of the processes, at least two plants have con­
solidated their tirebuilding microprocessors into a
computer-controlled station. In these plants, virtually full
automation of the process occurs after tire components
are taken to a station, and a computer program
automatically controls the building of the tires. This
automated process is applied to 10-20 percent of
passenger radial tires.
Labor requirements are sharply reduced in what is the
most labor-intensive process, with only one or two
workers needed to monitor a station.

Table 1. Major technology changes in tires

Labor implications

Computer-like device, consisting o f a
large-scale integrated circuit or set of
circuits which perform the functions
o f a central processing unit. A con­
troller on the MCI is programmable.
MCI replaces a large network of relay

Operator on simplest MCI’s only needs
to manipulate programmed symbols;
no training needed for operator
familiar with relay controls. May be
associated with slightly lower labor

See tirebuilding and testing below.

MCI in tirebuilding

Consists o f consolidation o f micro­
processors into a computer-controlled
station. Full automation after tire
components are taken to station.

Sharply reduces the most laborintensive process since only 1 or 2
workers needed to monitor the

Used for 10-20 percent o f passenger
radial tire capacity. Diffusion expected
to increase rapidly during next 5-10

MCI in testing and inspection

Microprocessors, which may be coor­
dinated with a computer, used in ac­
quiring data from testing instru­
ments. Greatly increases amount of
data received, automatically proc­
essed, and used for rapid decision­

Sharp overall reduction in labor re­
quirements, including some workers
engaged in visual inspection. Replaces
operators who analyzed X-rays and
made decisions.

MCI’s found in more than 80 percent o f
the largest firms; likely to be diffused
to all firms within less than 10 years.

Linkage o f microprocessor controls
into host computer

All or most processes in tire manu­
facturing can be coordinated by

Labor requirements are sharply re­
duced in some processes.

Usage is expected to accelerate from a
modest level during next 5-10 years.

Computer-aided design (CAD)

A great deal o f modeling is possible,
and tread designs can be derived
much more rapidly.

The need

CAD may account for 75 percent o f all
design work, and continued increase is


instrumentation (MCI)


Computer applications:


for drafters is greatly

sharply reduced. The displaced workers include the rather
skilled operators who analyzed X-rays, graphs, and charts
and then made decisions on the basis of much less data
than are currently available. Fewer workers are also
needed for visual inspection.
The use of m c i ’s in this process is found in more than
80 percent of the facilities of the largest firms, and is likely
to be diffused to all firms within less than 10 years.
Computer applications

The diffusion of microprocessor controls that are
linked into so-called host computers is expected to
accelerate from a modest level during the next 5-10 years.
Several of the larger companies are working on computers
to control (or coordinate) all or most of the processes in
tire manufacturing. The linkage of various controls into
a central computer can insure the overall efficiency of
individual microprocessors. The declining cost of the
computer memory and the availability of more powerful
microprocessors could facilitate linkage with a central
While computer control does not significantly reduce
labor requirements in all of the processes, necessary
technical adjustments are made more efficiently than by
an operator. For example, in calendering, the computer
presents a model of the process, and any needed adjust­
ment can be made automatically.
Tire manufacturers are also applying computers in im­
portant ways that are not directly associated with pro­
duction. For instance, perhaps 75 percent of all design
work is performed by computer-aided design (CA D). Dif­
fusion of the technology is expected to increase because
it sharply reduces unit labor requirements. C A D, which
permits a great deal of modeling, is very extensively used
to derive tread designs and is much faster than designing
without computers, c a d has resulted in a considerable
reduction in the number of drafters required. For exam­
ple, in the mold design department of one plant, the
number of drafters was reduced 80 percent.

A n o p e ra to r p ro g ra m s a m ic ro p ro c e s s o r-c o n tro lle d b a tc h -m ix in g
s y s te m th a t p ro c e s s e s ru b b e r c o m p o u n d s .

There are at least two obstacles to the development
of this automated process by more manufacturers of
radial tires. They are: (1) The complication of an addi­
tional tirebuilding stage for radials that is absent in the
production of bias and bias-belted tires; and (2) the wide
variety of tire types and sizes that need to be produced.
Nevertheless, it is expected that the use of this technology
will increase in the next 5-10 years.

Robot applications

According to industry representatives, a variety of dif­
ferent robot applications by the larger tire manufacturers
is underway, but data on the extent and nature of their
use are unavailable. Since special handling equipment is
less costly than robots, and considerable variation exists
in product mix, robots may not yet be widely applicable.
But one company is using robots, at least experimentally,
in tirebuilding. The robots load and unload components
from conveyors and pick up and combine components.
It was also reported that robots can perform rather
sophisticated tasks, including design work. Greater use
of robots is expected and may be stimulated by systems
under development which incorporate 10 to 20 independ­
ent microprocessors.

MCI in testing and inspection. The use of micro­
processors to acquire data from testing instruments has
greatly increased the amount of data that can be received,
automatically processed, and used for rapid decision­
making. M Ci’s are used in two forms of testing: (1 ) Tire
endurance, which is otherwise tested by an imaging
system that uses X-ray; and (2) tire uniformity, which is
primarily related to balance and assumes special impor­
tance with regard to radial tires. In at least one plant of
a large manufacturing company, testing for uniformity
is coordinated by a computer that relies on programming
from the firm’s research and development facility.
In some plants, the number of workers required in
testing and inspection in radial tire production has been

Output and Productivity Trends

a tiny fraction of the tread life of normal spare
Basically, however, the outlook for tire production is
tied to the automobile market and to tire imports.


About 209 million passenger car, truck, and bus tires
were produced in 1984. This was 11 percent below the
peak number of tires produced in 1977, but roughly at
the level of output in 1974.
The output of tires fluctuated sharply in 1970-84,
largely in response to two major recessions. On average
for the 14 years, output registered a small annual decline
of - 0 .5 percent (chart 1). During the first years
(1970-73), output increased at an exceptionally rapid rate
of 7.6 percent annually, but this was offset by an average
decline of - 1 .4 percent in the next 11 years, 1973-84.
In the latter period, output fell in six of the years, in­
cluding double-digit rates of decline in 1975 and 1980.
The industry’s output experience in 1970-84 contrasted
sharply with the very rapid rate of output growth during
Even during 1960-75, when the average annual rate
of increase in output was 5.0 percent, the rate of in­
crease grew smaller in successive 5-year periods. Pas­
senger car tires, which accounted for 83 percent of
all tires (passenger car plus truck and bus) produced
in 1984, have been greatly affected by cyclical and
secular changes in both the original-equipment and
replacement tire markets. Replacement tires accounted
for 70-79 percent of domestic passenger car tires in
Several reasons account for the declining output of
passenger car tires over the decade. The greater longevity
of tires has been an important factor in the replacement
market. Within a short period of time, tire service
life has been doubled as a result of, first, the wide adop­
tion of bias-belted tires and, later, of steel-belted radial
tires. Similarly, the longer wearing rear tires on the
rapidly growing share of automobiles with front-wheel
drive more than offset the faster wearing front tires on
such cars. Moreover, when gasoline prices increased
and remained relatively high, the average annual miles
driven in passenger cars declined, and, until recent
years, this had a negative impact on the replacement tire
The original-equipment tire market has, of course,
been severely depressed by the reduction in domestic car
sales. Sales of new cars averaged 6.7 million during
1980-84, only 79 percent of the average sales in the
previous 5 years and at the levels of 1960-64.
While greatly improved service life will place
limits on expansion in passenger tire output, some
analysts believe that the outlook is for modest growth
in view of the higher average age of cars, the pos­
sibility of a greater number of miles being driven,
and an increase in the number of people of driving
age. A further factor is the weight-saving “ mini­
spares” on most new automobiles, which have only


Tire imports (passenger car plus truck and bus tires)
have increased almost steadily since 1970, as did the ratio
of imports to new supply (product shipments plus im­
ports). The ratio stood at 9 percent in 1973 and rose to
about 16 percent in 1984. These imports, moreover, do
not include the tires mounted on imported vehicles. In
1984, the market share (in units) of imported passenger
cars was 23 percent, up from 15 percent in 1973.
Sharp competition exists not only from imports,
but, more recently, from tire plants established in the
United States by foreign firms. In the last few years, one
of the foreign firms with plants in this country has
become the sixth largest tire producer. The six largest
tiremakers account for more than 80 percent of total tire
The export/shipment ratio was about 4 percent in
1984, compared with 2 percent in 1970 and 2 1 /2 percent
in 1973. A potential expansion in U.S. tire exports is
related to the faster annual growth anticipated in
passenger car registrations abroad than in the United

Productivity increased during 1970-84 at an average
annual rate of 3.2 percent, compared with 4.0 percent
during 1960-70. However, the productivity advances in
the two periods were associated with vastly different
changes in output and hours. During 1960-70, output rose
6.0 percent annually, while employee hours grew at onethird that rate. In contrast, the productivity increase dur­
ing 1970-84 was associated with a decline in output ( - 0.5
percent annually) and a very sharp drop in hours ( - 3 .6
percent). In the early years of the last decade (1970-73),
productivity increased less than 3.0 percent annually, but
thereafter, in 1973-84, rose more rapidly at the rate of
4.2 percent per year.
The productivity increase during 1973-84 reflected to
a large extent the removal from production of older
equipment. Of particular note were 26 plant closings
within the 11 years.1 The degree of obsolescence of
tiremaking equipment was considerably lowered in that
period, in part because 21 of the 26 plants which closed
were manufacturers of bias-ply tires. Specialized and
more efficient equipment to accommodate the growing
demand for radial tires had not been fully installed in
many of those plants. In the 6 years ended in 1984, pro­
ductivity rose at an annual rate of 6.4 percent as the drop
in hours far outstripped the decline in output.
'Two were partial closings.


Chart 1. Output per employee hour and related data, tires and inner tubes, 1970-84
(Index, 1977=100)

Source: Bureau of Labor Statistics.


A foreign firm is apparently the leader in the develop­
ment of a liquid-injection molded tire that would repre­
sent a revolutionary shift in the technical production of
tires. U.S. tire manufacturers have made modest outlays
in attempting to develop such a tire.3

Capital expenditures

While dollar outlays for plant and equipment were
$235.6 million in 1982, or only about 10 percent less than
in 1970, the expenditures in constant dollars2 were about
55 percent less in 1982 than in 1970. However, the average
annual outlays for the entire period 1970-82 in constant
dollars were more than 10 percent higher than during
Large capital expenditures were made in the late
1960’s, primarily for equipment and facilities to effect
the shift from production of bias-ply to bias-belted tires.
However, a preference for radial tires soon required
retooling outlays that were considerably greater than the
sizable ones required for bias-belted tires.
By the end of 1971 and during the following years,
capital expenditures were concentrated on radials, includ­
ing new plants to produce only radials and the retooling
of bias-tire facilities in older plants to produce radial tires.
Real outlays for the 4 years 1971-74 averaged $326 mil­
lion, or about 7.0 percent higher than the relatively high
outlays in the previous 4 years. The large outlays needed
to produce radial tires affected several processes, includ­
ing tirebuilding (machines involving two steps rather than
one step) and curing (special segmented tire molds).
While the economic slump in 1981 and 1982 kept
capital outlays at comparatively low levels, industry
reports suggest that capital outlays related to radial tires
rose considerably in 1983.
In general, only the largest firms have been able to in­
vest in the newest automated equipment because of their
involvement in profitable areas of both tire distribution
and of nontire operations. The largest firms distribute
tires through company-owned stores and dealerships
which have enabled them to supply much of the replace­
ment tire market. Three of the largest firms have under­
taken large investments to diversify into more profitable
nontire forms of production, both in rubber and other
fields, to offset declines in automobile sales or price
cutting in tires.

Employment and Occupational Outlook

In 1984, an average of 94,000 persons were working
in tire manufacturing plants, the lowest number since
the early 1940’s. From 1970 to 1984, employment
declined at an average annual rate of —1.7 percent. Sharp
cyclical fluctuations occurred during this 14-year period
(chart 2).
During 1970-73, employment rose steadily at an
average annual rate of 4.0 percent. The increase continued
into 1974 when the industry was retooling for radials, and
employment reached 137,000, the highest level since 1946.
In 1975 and 1976, employment dropped sharply in
response to the slowdown in auto sales and tire replace­
ment sales.
Employment picked up after a lengthy strike in 1976
and stayed relatively high during 1977-79. But in 1980-83,
employment declined each year, at an average annual rate
of - 6 .2 percent for the 3 years. The sharp declines in
employment reflected the fact that half of the 26 plant
closings that occurred from 1973 to 1983 took place dur­
ing 1980-83. In 1984, employment held at approximately
the 1983 level.
A marked shift in the geographical location of the
rubber industry’s employment can be largely attributed
to the closing of older plants. Some of the closed plants
were absorbed by other companies, but, in 1983, there
were only 44 plants still in operation, contrasted with
about 60 at the start of 1973. Although other com­
munities were severely affected, most plant closings and
job losses occurred in Akron, Ohio. Closings in Akron
and in other Ohio cities accounted for 39 percent of
the more than 23,500 workers who were affected by
job dislocations during 1973-83. Two Western States
(California, and to a lesser extent, Colorado) accounted
for 24 percent of the workers who were at least tem­
porarily unemployed, and the New England States,
Pennsylvania, and Maryland accounted for 21 percent
of the laid-off workers. Michigan and the Southern States
sustained the remaining, smaller portion of job
By 1980, employment opportunities were highly con­
centrated in the Southern States. As a result of new plants
and major investments in existing plants, more than
two-thirds of total tire capacity was located in the South,
or nearly double the share of capacity in that region in

Research and development

Data on research and development ( r &d ) outlays are
unavailable for tire manufacturing. It is believed, how­
ever, that most manufacturers—especially those which
provide original-equipment tires—have made substantial
outlays for development and have been instrumental in
some important technological changes. Most recently,
U.S. manufacturers have been able to produce truck
radials that can be retreaded, as was possible much earlier
on foreign makes. At the same time, firms that supply the
tire manufacturers with machinery and materials have
developed technological advances in tire manufacture.
2 Capital expenditures deflated by the implicit price deflator for
producers’ durable equipment.

3 Business Week, Dec. 26, 1983, pp. 44B, 44D.


Chart 2. Em ploym ent in tires and inner tubes, 1970-84, and projections, 1984-95
Employees (thousands)

Employees (thousands)






Source: Bureau of Labor S ta tis tic s .

The ratio of production workers to all employees was
generally over 70 percent during 1970-84. This relatively
stable ratio reflects the difficulty of fully automating and
coordinating the control of the tire manufacturing proc­
esses and the fact that production of a radial tire requires
more labor per tire than a nonradial tire. The average ratio
of production workers to all employees was slightly higher
in the tire industry than in total manufacturing in 1984.
The Bureau of Labor Statistics, on the basis of its
moderate version of economic growth, projects an annual
decline of about 1 percent in the industry’s overall em­
ployment to 1995 from the very low level in 1984.4
Based on this projection, employment in 1995 would con­
tinue to be well below the levels of the first half of the

As indicated in the technology section, the use of
4 bls projections for industry employment in 1995 are based on
three alternative versions o f economic growth. For details on assump­
tions and methodology used to develop these projections, see the
Monthly Labor Review, November 1985.


microprocessor controls has not required radical
adjustments by the workers trained in older technologies.
In general, the number of operators and maintenance
workers has not been sharply reduced. No entirely new
jobs have resulted from the technological changes; the
duties for some occupations have been simplified.
However, the use of computers to coordinate micro­
processor-controlled instruments and computer-aided
design can have considerable impact upon some occupa­
tions. With computers controlling instruments, the
number of operators needed is sharply reduced and only
a small number of programmers may be required,
especially if the software is developed at a firm’s central
R & D facilities. Computer-assisted drafting greatly reduces
the need for drafters, but a stronger background in
mathematics is required for those still employed in design.
Major changes have occurred in the job duties of
maintenance workers and some other occupations as
result of management’s attempt to reduce labor re­
quirements and improve efficiency. Workers in the
various traditional craft occupations have been replaced
by a much smaller number of multicraft maintenance

workers. In one company, 3 basic classifications that have
replaced the previous 10-12 crafts are: Mechanicmachinist, electrician-instrument repairer, and general
craft worker (involving primarily the pipefitter and welder
duties). The multicraft workers can make needed repairs
in about 90 percent of the breakdowns to which they are
referred. For the remaining 10 percent of the cases—those
with sophisticated hydraulic or electrical problems—
salaried workers having such specialized expertise are
called upon. In addition, certain work rules that affect
downtime have been eliminated by transferring minor
tasks from maintenance workers to production workers.
Intraplant transportation of materials and components
is apparently far from automated or even mechanically
controlled, and therefore, numerous lower skilled jobs
remain. In one moderate-size radial tire plant visited,
bicycles with large baskets were widely used to transfer
material. In most of the plants without computercontrolled instruments in the tirebuilding process, the oc­
cupations continue to require considerable strength,
especially in truck tirebuilding.

laid-off workers receive preference at another plant of a
particular company only if hiring is taking place at the plant
and none of the plant’s own employees are on layoff.
While a supplemental unemployment benefit ( s u b )
program has provided considerable income security to
workers incurring layoffs, the program has afforded in­
adequate assistance to many workers affected by plant
closings. Since the funds in all of the SUB programs are
maintained on an individual company basis, many funds
were depleted as a result of the numerous closings that
occurred during the past 10 years.
The URW has secured a letter of agreement that pro­
vides for both 6 months’ advance notice from a firm in­
tending to close a plant and the right to negotiate over
keeping the plant in operation. Since plant closings have
occurred mainly because of a market shift away from the
bias tires produced in older plants, it has proven feasible
to sustain operations in only one plant and part of
another plant as a result of this agreement. However, the
agreement also provides for labor-management negotia­
tions over how a plant closing is executed, including
bargaining over various benefits.
At least two of the larger companies have provided
their permanently laid-off workers with counseling
regarding employment in another industry or even
another occupation. Officials of these companies, with
assistance of a union representative, have used their con­
tacts with other employers and have also offered sug­
gestions in looking for employment, writing a resume,
and taking advantage of available public training
Beginning in 1976, the bargaining contract has pro­
vided workers with various forms of financial assistance
when plant closings have not been avoidable. For exam­
ple, laid-off workers can retire with full pension benefits
if they have 25 years of service. Workers who are ineligi­
ble for retirement can receive special separation payments
that are graduated on the basis of years of service, with
such payments being in lieu of any deferred pension
The apprenticeship training for the three basic job
classifications that cover many maintenance skills has
considerably changed from the traditional program. The
course is 20 to 24 months long as opposed to the earlier
48-month course. While most of the training continues
to be on the job, a home-study form of training consisting
of numerous relatively short learning units with specific
objectives is also provided.
Arrangements are likely to continue for additional
worker involvement in the management of production pro­
cesses, initiated in at least some of the larger firms during re­
cent years. A rationale for such involvement is the interest in
lowering absenteeism. In several plants that have par­
ticipative management, the workers are given the oppor­
tunity to discuss or suggest improvements in production or
to make suggestions about improving their own jobs.

Adjustment of workers to technological change

Programs to protect the worker from the adverse
effects of changes in machinery and methods may be in­
corporated into union contracts or they may be informal
arrangements between workers and management. In
general, such programs are more prevalent and detailed
in formal contracts.
Formal labor-management contracts with the United
Rubber, Cork, Linoleum and Plastic Workers of America
(URW) cover nearly 80 percent of the production workers
in this industry, somewhat lower than the percentage of
workers covered in 1970. The decline in union coverage
is primarily associated with the numerous plant closings
in the highly organized North and the new facilities often
located in rural southern communities that have a lower
rate of unionization.
Although the bargaining agreements do not include
a requirement for advance notice of technological
change, it is often the practice of management to
inform a local URW representative about the intended
introduction of a technological change. The plant­
wide seniority system which prevails in agreements
provides a measure of job security when technological
change takes place. While a recent agreement placed
some limitations on the number of laid-off workers
who may transfer into another job classification,
workers whose jobs are eliminated may use their se­
niority to qualify for training that will enable them to
displace workers in other positions who have less
A small proportion of all permanently laid-off tire
workers have used their transfer rights under a preferen­
tial hiring clause to secure employment in other plants
covered by the URW’s master contract. Under the clause,

Jeszeck, Charles A. Plant Dispersion and Collective Bargaining in the
Rubber Tire Industry, Ph.D. dissertation. University o f California,
Berkeley, 1982.

Acquarulo, L.A., Jr., and A.J. Notte. “Automatic Control o f Polymer
Mixing,” Elastomerics, November 1983, pp. 17-22.
Alexander, K. “ Tire Trends for the Next Decade,” Rubber World,
January 1981.

Morton, G.F. and G.B. Quinton. “ Manufacturing Techniques,” in Rub­
ber Technology and Manufacture, edited by C.B. Blow and C.
Hepburn. London, Butterworth Scientific, 1982.

Al-Shaikh, A ., P. deFeo, and N. Leffler. “ Multivariable Calender
Weight Control for the Tire Industry,” in Multivariable Control

Systems, Proceedings o f the Second Annual Advanced Control Con­
ference. Barrington, 111., Technical Publishing Company, 1975.

Pawlowski, Henry A ., John P. Koontz, and Robert I. Barker. “ Incor­
poration o f Microprocessors into Rubber Quality Control Instrumen­
tation,” Rubber World, July 1983, pp. 29-30, 36.

Dick, John S. “ How Technological Innovations Have Affected the Tire
Industry’s Structure,” Parts I-VI, Elastomerics, September 1980, pp.
43-48; October 1980, pp. 36-41; November 1980, pp. 42-47; December
1980, pp. 47-52; January 1981, pp. 25-30; and February 1981, pp.

Rapetski, Walter A. “The Outlook for Rubber Processing Equipment,”
Rubber World, January 1983, pp. 24-26.


Chapter 2. Aluminum


primary aluminum and fabricating were well above the
average in all manufacturing.
Employment in the segments of the aluminum industry
covered in this bulletin declined from 91,700 to 82,600
workers—by 9.9 percent—over the period 1970-84. The
sharpest rate of decline was in primary smelters. Employ­
ment in both sectors fell during the mid-1970’s and dur­
ing 1980-82 when the general economy was weak.
However, prospects for employment growth appear im­
proved based on an increase in demand for aluminum
associated with the upturn in the economy which began
in 1983.
New technology has not resulted in widespread
displacement; the general market demand for aluminum
has been the major factor affecting the level of employ­
ment. Although most occupations are expected to con­
tinue to involve generally the same skills, innovations such
as computer process control and advanced instrumenta­
tion have modified job requirements of some key occupa­
tions, including potline tenders and rolling mill operators.
Their duties involve more extensive monitoring of pro­
duction operations from modern control stations and
fewer manual tasks.
In newly constructed plants where state-of-the-art
technology is in place, the number of potline tenders, roll­
ing mill operators, and other production workers per unit
of output is less.
Importantly, energy requirements in new plants are
sharply lower than in older facilities. The aluminum in­
dustry has made substantial progress in energy conser­
vation; the Aluminum Association reports that a pound
of aluminum in 1983 shipped as a finished or semifinished
product required nearly 22 percent less energy than in
The aluminum industry is highly unionized, and work
force adjustments associated with new technology and
other changes have been handled in the context of general
provisions of collective bargaining agreements.

Technological changes in the aluminum industry (sic
3334 and 3353-55) primarily involve modification of con­
ventional processes rather than radical changes in
technology. Specific innovations being introduced include
improvements in the vessels (or pots) in which molten
aluminum is produced by an electrolytic process, more
energy-efficient furnaces that produce anodes used in the
pots, the introduction of computer control and advanced
instrumentation, continuous casting, and improved
material handling. Benefits include lower energy and
labor requirements and higher quality.
Output in the aluminum industry is responsive to
developments in the general economy. In primary
aluminum, output increased at an average annual rate of
only 0.6 percent during 1970-84; in the fabricating sector,
which includes rolling, drawing, and extruding mills, out­
put increased at a higher 2.0-percent annual rate. In both
sectors, output gains were highest during the earlier years
of this period and fell sharply during 1974-75 and
1981-82, periods when the economy was depressed. The
outlook is for aluminum shipments to extend recent gains
and to increase over the next several years, with the largest
markets in containers and packaging, building and con­
struction, and transportation. However, prospects for
primary production are less favorable as high power costs,
increased imports of ingots, and recycling of aluminium
are expected to result in further reductions in U.S.
Productivity (output per employee hour) increased in
both primary aluminum and fabricating during 1970-84.
In primary aluminum, output per employee hour in­
creased at an average annual rate of only 1.0 percent over
this period—well below the gains achieved in fabricating
mills, where output per employee hour rose at an annual
rate of 2.7 percent. In both sectors, productivity declined
during the recession period 1974-75, but increased signifi­
cantly from 1982 to 1984 as output rose in the economic
Between 1970 and 1981, the aluminum industry
allocated $3.7 billion (constant 1972 dollars) to increase
capacity and improve efficiency. The largest share of
spending (57 percent) was by firms in the fabricating
sector. The aluminum industry is capital intensive, and
capital expenditures per production worker in both

Industry Structure
The industry covered in this bulletin consists of both
primary plants (or smelters) (sic 3334), where alumina,
refined from bauxite, is converted to aluminum through
an electrolytic process, and the fabricating sector of the
industry (sic 3353, 54, 55), where aluminum is converted


into sheet, plate, bar, tubing, and other basic shapes
through rolling, drawing, and extruding operations.1
The aluminum industry has grown rapidly, particularly
since World War II, and shipments of aluminum products
exceed those of copper and other leading nonferrous
metals. Aluminum is a versatile metal, lightweight and
corrosion resistant, and is used for products ranging from
beverage containers to missiles and jets. The top three
markets in 1983 were containers and packaging, building
and construction, and transportation.
Because the industry is energy intensive, primary alu­
minum plants are located near sources of abundant
power. Establishments engaged in fabricating aluminum
products are more widely dispersed and located closer to
In 1984, about 82,600 workers were employed in the
sectors of the industry covered by this bulletin, with
nearly 3 out of 4 employees engaged in rolling, drawing,
and extruding operations.

Technology in the 1980’s
Technological change in the aluminum industry
generally involves an improvement in a segment of
the process of smelting and fabricating aluminum
within an existing plant. When new facilities are
constructed, however, the level of technology is gen­
erally higher than in older plants, and energy costs
and labor requirements per unit of output are lower. New
technology has allowed some plants to remain com­
The industry examined excludes establishments primarily engaged
in recovery o f aluminum from scrap (the secondary industry), which
is part o f sic 3341, secondary smelting and refining o f nonferrous
metals. Also excluded are aluminum foundries (castings), which are
classified as sic 3361, and aluminum forgings, which are part o f sic
3463, nonferrous forgings.

petitive, thereby maintaining jobs and capacity in the
United States.
The aluminum industry has been spending substantial
sums to modernize plant and equipment. Specific innova­
tions in primary plants include improvements in the
design of the pots, where molten aluminum is produced
by an electrolytic reduction process; the installation of
improved linings and insulation in the pots; and the in­
troduction of computer process control to monitor pro­
duction. Other innovations include new types of furnaces
which lower energy and labor requirements in the pro­
duction of the carbon anodes used in the “ prebaked
anode” pots, and improved casting equipment to pro­
duce billets and ingots for shipment to fabricating plants.
In the development stage are innovations such as direct
reduction and electrolysis of aluminum chloride, which
differ significantly from the long-standing Hall-Heroult
method of producing aluminum.
In aluminum fabrication, improvements in rolling and
drawing mills include computer control, advanced in­
strumentation, and larger capacity equipment. In ex­
truding operations, more powerful and more highly
automated presses and material handling systems are
major changes. In addition, dies used in extruding presses
are being are being produced by computer-aided design
and computer-aided manufacturing ( c a d / c a m ) methods
which improve product quality, and some applications
of continuous extrusion systems are being introduced.
Continuous casting is a highly efficient process in limited
use to produce mill stock for finished rolled products.
A description of major technological improvements
in the aluminum industry, their impact on labor, and
prospects for further diffusion are summarized in table
2. A more extensive discussion of the impact of
technology on the work force is contained in the section
on employment and occupational trends.

Table 2. Major technology changes in aluminum


Labor implications

Larger reduction cells, or pots, that
handle higher currents, allow greater
production without increased voltage.
Other changes include larger, more
efficient anodes; computer process
control; use o f silicon rectifiers in
place o f the less efficient mercury arc
type in converting power to direct
current used in potlines; addition of
lithium compounds to electrolyte to
increase conductivity; raising propor­
tion o f aluminum fluoride in elec­
trolyte to increase efficiency; and
improved material to line and insulate
pots which save energy and extend
their service life.

Increased efficiency and capacity of
reduction pots has resulted in fewer
pots per potline in new smelters.
Thus, requirements for potline
monitors, potliners, anode tenders,
carbon setters, and others involved in
potline operations, per unit o f out­
put, are reduced in these plants. In­
crease in anode size and modification
o f cathode design also have increased


Primary aluminum
Improved Hall-Heroult reduction

Technological improvements that ex­
tend the production life o f potlines
have reduced maintenance require­
ments slightly.


Adopted most extensively in newly con­
structed potlines built to increase
capacity or to replace obsolete facilities.
Changes are less extensive in the older

Table 2. Major technology changes in aluminum—Continued
Labor implications
Improved anode baking

Improved casting


New furnace designs which improve
flue combustion and improved refrac­
tories which allow less heat loss in­
crease fuel efficiency and furnace pro­
ductivity in baking the carbon anodes
used in reduction pots. More uniform
baking temperatures improve anode
quality, making possible lower energy
use in reduction pots. Large multipur­
pose cranes are used to charge and
discharge furnaces.

Increased productivity o f new baking
furnaces low ers unit labor re­
quirements for furnace operators and
other workers. More automatic oper­
ation will increase monitoring and
lessen manual duties o f operators.

Most anode baking improvements ac­
company modern furnace facilities being
installed in new smelters.

New computer-controlled direct chill
casters with larger cylinder strokes and
improved mold assemblies increase the
size and number o f billets and ingots
cast per drop. Lower scrap rates, faster
m old preparation, and reduced
maintenance are also benefits o f im­
proved casters. Control systems on
new equipment monitor temperature
precisely with multiple digital readouts
available to operators.

Both startup and operating labor re­
quirements for new casters are lower
than for old machines. A casting
operator and an assistant, aided by a
material handling worker for ingot
loading, comprise the machine crew at
one installation. Maintenance costs are
lower with the new equipment.

Advances in casting technology are in­
troduced most extensively in new
casthouses and the modernization o f ex­
isting ones. (Casting improvements
described here generally apply also to
casting op eration s in fab ricating
establishments with remelt facilities.)

Basic equipment improvements in­
creasing productivity in aluminum
rolling include wider mills with more
powerful drives and larger coils. Im­
proved mill rolls and lubricants also in­
crease efficiency and quality.

Increased productivity and yield in new
and renovated mills enable plants to
operate at a given capacity with fewer
mills and employees than formerly.

The benefits o f computers, advanced in­
strumentation, and equipment im­
provements that can be “ added on” to
existing mills are expected to result in in­
dustrywide adoption o f these new

Computers and advanced instrumenta­
tion regulate mill speed and product
variables. Computers are also applied
to control sawing, milling, and other
plant operations and in casthouses.

Rolling mill operators and helpers are
among occupations affected by com­
puter control and automation of
material handling.

Material-handling tasks are being
automated in rolling mills. Some mills
use computer-controlled cranes to
transport coils.

Use of computers requires operators
and machine tenders to be involved in
more monitoring and fewer manual
tasks. Training will be required for
em p loyees associated with new

Productivity in extruding is being in­
creased by more powerful presses;
alloys that improve billet quality and
allow faster extrusion speeds; and
computer-based programmable control
systems. Extrusion dies produced by
computer-aided design and manufac­
turing (CAD/CAM ) techniques in­
crease press efficiency and product

A fully automated extrusion line re­
quires a minimum crew o f two, com­
pared with seven in a less mechanized
plant. Stretcher operators and helpers,
saw helpers, and die-head men are
eliminated in computerized systems.
The material handling job o f runner is
not required when a computercontrolled puller is used. Press
operators are being trained to operate
terminals that monitor the status of ex­
truding operations.

Highly automated extrusion systems are
in use in only a few plants. Adoption of
new technology is typically on a
“ building block” or a piecemeal basis.
New presses being installed incorporate
programmable controllers, and they are
being added to existing presses.

Continuous extrusion for a limited
number o f products is just coming in­
to commercial use.

Significant reduction in labor in some
product lines will result.

Diffusion is limited but expected to in­
crease as continuous feedstock availa­
bility increases.

Molten metal is converted directly in­
to aluminum sheet, bypassing casting,
ingot preparation, and hot rolling
operations. Liquid metal is directed
through a nozzle into a cavity be­
tween rotating sets o f water-cooled
cylinders and is immediately solidi­
fied and forms a continuous sheet.
This sheet is wound into coils to be
cold rolled to produce aluminum mill
sheet and foil products. Continuous
casting is used to produce redraw rod.

Substitution o f continuous casting to
produce reroll stock or rod eliminates
several production jobs including
casting operator and helpers, ingot
cutting and scalp ing m achine
operators, oven tenders, and hot roll­
ing mill operators and helpers. Also,
requirements for material handling
o c cu p a tio n s,
inclu ding
operators and truckdrivers, are reduc­
ed with continuous casting.

Continuous casting is used by only a few
establishments. However, this highly
regarded technology will be adopted
more widely when aging facilities are
replaced, and in mills where capacity is
to be expanded.

Projected energy savings will be weighed
against furnace replacement costs in
deciding whether to adopt these im­
provements in existing anode plants.

Aluminum fabrication
Improved rolling mill operations

Improved aluminum extruding

Computer control is being extended to
prepress billet shearing and handling as
well as pulling, stretching, and sawing
o f extruded shapes. Heat treating
operations also are being placed under
computer control.

Continuous casting


the new reduction plant have substantially greater
capacity than the older pots. In the new plant, despite
25 percent fewer pots in the production line, capacity is
13 percent greater, and energy and labor requirements
per unit of output are sharply lower.
Improvements in materials which line and insulate the
pots also are raising efficiency. Improved carbon
materials and new techniques for installing linings save
electrical energy and extend the life of the pots. Conse­
quently, labor requirements for potliners, who maintain
the linings, are cut back. Some of the new linings last
3 times longer than those used in the early 1960’s.
Power consumption also is reduced by replacing
mercury arc rectifiers with more efficient silicon rectifiers
to convert alternating current to direct current for the
electrolytic process. Energy savings of 3 percent have been
reported following this change. In many smelters, use of
electricity also is decreased by adding lithium compounds
to the electrolyte to increase conductivity. The consump­
tion of electrical energy is further reduced by raising the
proportion of aluminum fluoride in the electrolyte.
Computer monitoring of potlines has resulted in more
efficient use of labor and electricity. Heat generated in
the electrolyte with a given current depends on the
distance between the anode and the cathode. Closer con­
trol of this spacing by computers enables temperature in
the electrolyte to be maintained at optimum levels more
In addition, computers and microprocessors control
feeding the alumina to the cell and the frequency and
duration of the “ anode effect.’’3 The computers deal
with most operational instability unaided, but have the
capability to alert the pot monitors to those pots requir­
ing attention. The computers also accumulate and display
data on the performance of each production unit.

Primary Aluminum Production
Aluminum is produced by the Hall-Heroult electrolytic
reduction process, which has long been the only com­
mercial production method. Although improvements in
the process have been adopted, production and
maintenance workers have been only marginally affected
by these changes.
The impact of technology on employment can be more
fully understood by a review of the process of producing
aluminum. In the Hall-Heroult process, molten cryolite
(a fluoride of sodium and aluminum) is maintained at
nearly 1,000 degrees centigrade in carbon-lined steel cells
or pots. From 100 to 240 pots may be connected in elec­
trical series to form a potline which is overseen by
employees called potline monitors—one of the largest
production worker categories. The cryolite serves as an
electrolyte and as a solvent for the aluminum oxide
(alumina) which is added to it. Carbon anodes located
above the pots extend into the electrolyte. When direct
current passes through the electrolyte to the cathodic car­
bon linings in the pots, the alumina in solution is decom­
posed into aluminum and oxygen. The oxygen is released
as carbon dioxide.2
Periodically, the molten aluminum is siphoned into
crucibles and poured directly into ingot molds or into
holding furnaces for refining and alloying before casting
into ingots and billets. Molten metal also may be
transported from the smelter to fabricating plants.
The modern Hall-Heroult method, although un­
changed in principle, differs from the early process.
Substantial productivity gains and energy savings have
been achieved through improved equipment, materials,
and process control.
Aluminum reduction (smelting) consumes large
amounts of electricity, which accounts for about onethird of the total cost of primary aluminum production.
Thus, the industry has given major emphasis to increas­
ing electrical efficiency. Energy conservation received
added impetus from sharply rising costs during the energy
crisis in the 1970’s.
Improvements in the design of the pot increase effi­
ciency and reduce labor requirements for potline monitors
and other workers on the production line. Also, anodes
and pots of greater size accept more amperage and pro­
duce more aluminum with greater energy efficiency.
Comparing the potline of a new reduction plant (or
smelter) with one built approximately a decade earlier il­
lustrates the gains associated with technological im­
provements. High amperage, low current density pots in

Several major improvements are being incorporated
in modern furnaces which produce the prebaked anodes
used in the pots. Better insulated and more tightly sealed
furnace refractories lower heat loss; new flue designs im­
prove anode quality and extend flue life; and a system
that automatically maintains furnace drafts within
precise, preset limits provides more efficient furnace
operation than manual control. Gains of more than 100
percent in fuel efficiency and furnace productivity have
been reported. Moreover, average flue life is increased
by 50 percent or more and the improved carbon quality
of the anodes increases current efficiency and reduces
carbon consumption in the reduction pots.

2 The prebaked anode system is used by about two-thirds o f the
smelters in the United States. The Soderberg electrolytic reduction cell,
the other major system, uses a continuous anode which is controlled
in a different manner than the prebaked anode. Although labor re­
quirements in the Soderberg system are lower, more electrical energy
is required.

The normal concentration o f alumina is in the range o f 3 to 10
percent, which provides sufficient resistance in the bath to maintain
optimum operating temperature. When the alumina concentration falls
below 3 percent, the resistance increases sharply, and the voltage drop
across the pot increases sharply. This phenomenon is known as the
“ anode effect.” .

Improved anode baking


Large multipurpose cranes also are used in modern
furnace installations to place anodes into the baking pits
and to cover them with a blanket of coke. These cranes
also extract the coke from the pits by vacuum and then
remove the anodes. Productivity is increased since one
man operating the crane can load and unload the furnace.

potliners (in part), and rodding anode renewers who,
combined, comprise one of the largest groups of plantworkers. A major producer and the U.S. Department of
Energy are constructing laboratory pilot cells or pots in­
corporating these improvements.
Direct reduction. Direct or carbothermic reduction
processes utilize high temperatures—obtained in arc or
blast furnaces—to produce aluminum from aluminum­
bearing ores, or from refined alumina. Unit energy re­
quirements are greatly reduced in these processes. One
direct reduction system being developed that is attractive
to producers eliminates the refining step required to pro­
duce alumina for the Hall-Heroult process. Moreover,
since domestic aluminum-bearing ores of lower purity can
be used, dependence on foreign supplies of bauxite would
be lessened.5 Capital investment would probably be
lower than for Hall-Heroult smelting because anode
plants would no longer be required and output from a
single production unit would be greater.
The labor impact also would be significant, with anode
rebuilders and carbon setters among occupations no
longer required. However, refining steps beyond initial
smelting would be needed to ensure an acceptable final
product, and one drawback of this type of direct reduc­
tion is the impurities that remain after processing. A long­
term project to investigate the technical feasibility of this
process is underway with support from the U.S. Depart­
ment of Energy.
Technology for direct or carbothermic reduction of
refined alumina to aluminum metal without substantial
impurities is under development; technical feasibility has
already been demonstrated in a small pilot project. This
technology reportedly has the potential to substantially
lower energy, labor, and capital cost relative to a modern
electrolytic plant.

Improved casthouse operations

Molten metal from the smelter is transported to the
casthouse, transferred into holding furnaces, alloyed, and
poured into molds to produce billets and ingots for ship­
ment to fabricating plants.4 In the casthouses, extrusion
and rolling ingots are produced by the direct chill (DC)
process, using a vertical or horizontal caster. In a typical
vertical caster, as metal enters the mold, the mold base
is lowered through a water spray which chills the newly
formed ingot as it moves downward through the mold.
Ingot length is limited by the depth to which the mold
bottom can be lowered. Longer lengths can be produced
horizontally, where the constraint of casting pit depth is
Casters of improved design with advanced control
systems increase productivity in modernized casthouse
operations. A vertical caster, introduced as part of a
general plant modernization at one mill, increased pro­
duction sharply compared to less advanced equipment in
the older plant section. The new machine allows ingot
molds to be located closer together and increases the size
and number of ingots cast in a single “ drop.” The new
casters operate with a smaller crew—one operator, one
assistant, and a helper to load ingots for heat treating.
Other benefits include reduced maintenance, lower scrap
rates, and faster preparation of the mold between casting
cycles. A modern control system on the new casters
monitors temperature and features various digital

Electrolysis o f aluminum chloride. This new process
combines alumina with chlorine in a chemical reactor to
produce aluminum chloride, which is then electrolyzed
to produce aluminum and chlorine. The chlorine is
recycled to the reactor in a closed system.
Unlike the Hall-Heroult method, the chloride system
can process a wide variety of aluminum-bearing materials
and is not limited to bauxite. Moreover, pollution may
well be less than in the Hall-Heroult process, which re­
quires that potentially harmful fluoride gas be collected.
In addition, the chloride process reportedly uses 30 per­
cent less energy than the most efficient Hall-Heroult
potlines—a substantial cost saving.
The labor requirements of a chloride process plant
would differ considerably from those of a Hall-Heroult

Technologies under development

Improvements in the Hall-Heroult process and new
methods undergoing development have long-range poten­
tial to reduce labor, capital, energy, and material re­
quirements in primary aluminum production. However,
the new methods are not expected to be applied commer­
cially in the near future.
Inert anode. Development of an inert anode for the HallHeroult process is being attempted which, when used with
a refractory metal cathode also being developed, would
eliminate carbon consumption and the facilities and labor
required to prepare and change anodes. Affected
employees would include anode tenders, carbon setters,

A portion—often substantial—o f potline output may be shipped
Hall-Heroult pots require alumina refined from bauxite by the
in molten state to users within trucking distance o f the plant, thus
Bayer process. Over 90 percent o f the bauxite is obtained outside the
eliminating smelter casting costs and the expense o f remelting by
fabricators. One major producer ships about 40 percent o f total reduc­
United States. The present method o f producing aluminum is often
tion plant output in this manner.
referred to as the Bayer-Hall process.


Material handling also is undergoing extensive automa­
tion in rolling mills. In cold rolling mills, for example,
computer-controlled cranes transport coils from storage
bins to a conveyor to be carried to a preparation station.
At this point, sensors feed data on the coil to the mill
computer, which sets up the rolling operation. The coil
is automatically loaded and threaded into the mill and
removed from the mill after rolling. At several plants,
the rolls that compress the strip are being changed
automatically. In one instance, the new procedure takes
5 minutes, compared with 45 minutes for older mills in
the plant. Occupations affected by these advances include
crane operators and material handling laborers. However,
more electronics technicians and maintenance workers are
needed in establishments introducing these changes.

smelter. Anode tenders and others engaged in anode
building and replacement would no longer be needed. On
the other hand, new positions would be required because
a chemical reactor is needed in the process. Jobs involv­
ing maintenance and console monitoring could be ex­
pected to increase.

Aluminum Fabrication
Rolling, drawing, and extruding establishments
manufacture a variety of semifabricated aluminum prod­
ucts. Improvements in traditional methods, the use of
more efficient processes, advances in material handling,
and improved control of production are increasing pro­
ductivity in fabricating plants. These innovations raise
quality and reduce unit labor, capital, and energy
The most significant development in aluminum
fabrication is the widespread adoption of computers and
advanced instrumentation. Improved control has in­
creased performance of processing and material handl­
ing equipment. Examples of applications of process con­
trol and other improvements are examined below in the
operations in which they are employed.

Extruding operations

More powerful presses, automated production and
material handling systems, and improved dies and con­
tinuous extrusion systems are among key innovations in­
creasing productivity in aluminum extruding. Average
press size currently is about 50 percent greater than in
the early 1970’s, and the greater extrudability of new billet
alloys can be handled more effectively. Almost all new
presses are equipped with programmable control systems,
and they are being added to existing presses. Other im­
provements in press controls include automatic systems
to regulate extrusion speed. These advances reduce scrap
formation, a major concern of the industry.
Extrusion production steps before and after the press
operation also are being modernized by computer con­
trol and other advances. In new press systems, aluminum
is transported automatically from heat treatment to a
shear and cut into computer-selected billet lengths.
Extrusions leaving the press are guided along the runout
table by a computer-controlled puller to their pro­
grammed length, automatically moved on to be stretch­
ed to programmed tensions, sawed into predetermined
lengths, and loaded onto carts for movement into and
from aging ovens. The only manual handling in modern
computerized systems involves packaging finished
Automated extrusion systems require a minimum crew
of two (the press and saw operators) compared with a
crew of seven on conventional presses. Although
automated systems eliminate traditional jobs, including
stretcher operators and helpers, they require program­
mers and other computer personnel and additional
maintenance workers. Automated extrusion systems
probably are not feasible for most smaller establishments
because production runs are short and the systems are
expensive. However, some degree of new technology will
be adopted consistent with their resources and produc­
tion patterns.
Dies used in extruding presses are being produced by
computer-aided design and manufacturing ( c a d / c a m )

Rolling mill operations

Advances in equipment and improved control over
processing increase efficiency in rolling mill operations.
Extended mill widths, more powerful drives, and process­
ing of larger coils are prominent improvements in
aluminum rolling mills. Improved rolls and rolling
lubricants also increase productivity and quality. In
addition to improvements in basic equipment, computer
control of mill speeds and product variables such as strip
gauge and shape allow mills to run at higher speeds,
increase product quality, and reduce waste products.
Many of the advances in rolling technology that will
be adopted more widely over the next decade are already
installed in a large foil plant which is a leader in apply­
ing new technology. These include computer-based shape
and gauge controls, new rolls in which the shape of the
strip can be changed during operation to maintain uni­
formity, and improved lubrication procedures to reduce
breaks in the aluminum strip. A new rolling mill intro­
duced at this plant operates at speeds up to 7,500 feet
per minute, 3 times faster than older mills.
At this facility, where some older mills were retrofitted
with advanced controls and improved rolls, speed in­
creased 50 percent, and foil quality improved. Renova­
tion of additional mills is planned, with computer con­
trol to be extended plantwide. In addition, more than 50
percent of the rolling mills are scheduled to be closed,
with no loss of capacity anticipated. Although crew size
in retrofitted mills is the same as before modernization,
fewer crews will be required as the number of mills is cut

techniques which improve die quality. In turn, these highquality dies raise press efficiency and product quality in
extrusion establishments.
Continuous extrusion systems for selected hollow and
solid shapes are beginning to appear which are capable
of significantly lowering labor requirements and reduc­
ing scrap for selected products.

industry improved as the economy recovered and primary
production increased by 2.4 percent from 1982 to 1983.
In 1984, this expansion continued, but by midyear,
sharply higher imports, rising inventories, and declining
prices for aluminum ingot were reported.7 However,
output for the full year 1984 increased 22.4 percent over
Output in the fabricating sector (rolling, drawing, and
extruding) generally followed the pattern described for
primary aluminum. Fabricated products are more
numerous than primary products and include such items
as flat rolled basic shapes including sheet, plate, and foil,
and extruded products such as rods, bars, shapes, and
Over the period 1970-84, output of fabricated products
increased at an average annual rate of 2.0 percent. Dur­
ing the early period 1970-73, demand for aluminum was
strong, and output increased at an average annual rate
of 16.3 percent. Between 1973 and 1978, however, the
annual rate of increase fell sharply to 1.7 percent, and
during 1978-84, declined at an annual rate of 2.1 percent.
The general economic downturn also affected this sec­
tor adversely. In 1975, output in aluminum rolling, draw­
ing, and extruding declined by 29.7 percent; in 1982 by
12.3 percent. However, output in the fabricating sector
recovered more sharply than in primary aluminum in
1983, increasing by 15.3 percent, as the economy
recovered from recession and demand for aluminum
products was strong. Output in this sector increased an
additional 7.0 percent in 1984.
Aluminum production is expected to continue to
increase through the 1980’s, with containers and packag­
ing, building and construction, and transportation re­
maining the largest markets. The use of aluminum in
autos and trucks, for example, is expected to increase
from 137 pounds per vehicle in 1985 to about 200 pounds
by 1990.8
According to the U.S. Department of Commerce, total
shipments of aluminum are expected to increase at a com­
pound annual rate of about 3.5 percent through 1989.9
However, most expansion of primary aluminum capacity
may be overseas because energy and other costs are ex­
pected to remain high in the United States. Moreover,
increased imports of aluminum ingots and increased
recycling also will lower demand for primary aluminum
from U.S. plants.

Continuous casting

Continuous casting is a highly efficient method to pro­
duce mill reroll stock for processing into finished rolled
products. In one type of continuous caster, molten metal
is forced through a nozzle into the space between two
rotating, water-cooled casting cylinders where it solidifies
and forms a continuous strip which is wound into coils.
In continuous casting, the conventional steps of casting
and cutting of ingots, machining to eliminate surface
defects, and heat treating are eliminated along with
material handling tasks associated with these operations.
Hot rolling also is eliminated or reduced to one stage.
Continuous casting reduces labor, capital, and energy (it
uses less than a third of the energy required in the con­
ventional method). Specific jobs eliminated in continuous
casting include ingot casting operators and hot rolling mill
operators. Also, fewer material handling workers, in­
cluding crane operators and truckdrivers, are required.
Continuous casting is used by only a few mills, mainly
in the production of reroll stock for further reduction by
cold rolling for end use in beverage cans and foil wrap­
ping. However, expanded use of the process for other
rolled products is expected.

Output and Productivity Outlook

Output in the primary aluminum industry, mainly
ingots of varied shapes and sizes, increased at an average
annual rate of only 0.6 percent between 1970 and 1984.
(See charts 3 and 4.) The rate was highest during the early
period, 1970-73, 3.9 percent compared with 1.1 percent
during the middle period, 1973-78, and a 4.0-percent rate
of decline during 1978-84.
Output in the aluminum industry is responsive to
developments in the general economy; output in primary
aluminum fell by 20.3 percent from 1974 to 1975 and by
27.1 percent from 1981 to 1982, periods when the
economy turned downward. The latter period of slack
demand led to closings of six primary aluminum plants,
with an estimated annual capacity of nearly 800,000 short
tons idle at the end of 1982.6 In addition, some potlines
in operating plants were closed; the U.S. Bureau of Mines
reported a total of about 2.5 million tons of idle capacity
at the end of 1982. By 1983, however, prospects for the


Productivity (output per employee hour) increased in
both primary aluminum and fabricating over the period
1970-84 (charts 3 and 4). However, the productivity gain
in rolling, drawing, and extruding mills over this period
1985 U.S. Industrial Outlook, U.S. Department o f Commerce,
International Trade Administration, chap. 20, p. 20-8.

%Ibid., p. 20-10.

6 1983 U.S. Industrial Outlook, U.S. Department o f Commerce,
Bureau o f Industrial Economics, chap. 19, p. 19-10.

9 Ibid.


was substantially higher than in primary aluminum. The
productivity change in both sectors was characterized by
substantial variation in rate and direction.
Productivity in primary aluminum increased at a rela­
tively modest average annual rate of 1.0 percent between
1970 and 1984. During 1970-73, however, output per em­
ployee hour increased by an annual rate of 2.1 percent,
and output increased by 3.9 percent, more than double the
1.8-percent annual rate of increase in employee hours. Be­
tween 1973 and 1978, however, output per employee hour
declined at an annual rate of 0.7 percent. This period in­
cluded the 1974-75 recession, when output per employee
hour fell by 13.2 percent. Productivity improved markedly
from 1978 to 1984, with output per employee hour in­
creasing at an average annual rate of 3.2 percent. In 1984,
output per employee hour in primary aluminum rose
sharply—by 10.1 percent—as output increased by 22.4
percent and employee hours rose a lesser 11.1 percent.
Productivity in aluminum fabrication increased at a
relatively strong average annual rate of 2.7 percent dur­
ing 1970-84. Over this period, output increased at an
annual rate of 2.0 percent, and employee hours declined
at an annual rate of 0.7 percent. The productivity gain
in aluminum rolling, drawing, and extruding was the
greatest in 1970-73; output per employee hour rose by
a substantial average annual rate of 13.0 percent as out­
put surged at an annual rate of 16.3 percent and employee
hours rose at a lower annual rate of 2.9 percent.
The productivity growth rate slowed markedly during
1973-78, however, with output per employee hour increas­
ing at an average annual rate of 2.2 percent. As in primary
aluminum, output per employee hour in fabricating fell
during the recession period 1974-75, down by 9.2 percent.
During 1978-83, output per employee hour increased at
a slower annual rate of 1.8 percent. However, in 1983,
output per employee hour rose sharply by 11.3 percent,
as output gains associated with economic recovery greatly
exceeded expansion in employee hours. A slightly higher
increase in output compared to employee hours in 1984
resulted in an additional productivity gain of 0.2 percent.
Productivity change is difficult to assess since measures
of output per employee hour reflect a number of inter­
related factors, including technology, capital investment
per worker, utilization of capacity, skill and effort of the
work force and management, and other related factors.
The specific contribution of labor, capital, or any other
variable cannot be determined. However, if projections
of a higher volume of shipments of aluminum through
the second half of the 1980’s are realized, and investment
in new technology continues as expected, the productivity
record of the industry could improve.

for aluminum products has intensified. During 1970-81,
these industries spent $3.7 billion (constant 1972 dollars)
to increase capacity and improve efficiency. 10
Spending by primary aluminum plants totaled $1.6
billion in real terms over the period, with a high of $214.4
million in 1981. Marked swings in annual investment in
primary aluminum reflect, in part, the comparatively
small number of producers in the industry. The cost of
establishing a new smelter will raise the level of industry
expenditures significantly. For example, a new smelter
constructed during the latter part of this period cost $350
million in current dollars.
Primary aluminum capacity increased almost 40 percent
between 1970 and 1982 as new smelters were constructed
and existing plants were expanded and upgraded. How­
ever, as indicated earlier, industry experts anticipate that
future major additions to primary aluminum capacity will
be overseas where energy costs are lower. Thus, future
domestic spending for new projects may be reduced.
Fabricating establishments invested $2.1 billion (con­
stant dollars) between 1970 and 1981 in new plant and
equipment, including a high of $255.5 million in 1980.
While a consistent pattern of increasing annual invest­
ment was not evident, the trend of capital spending
reflected anticipated increases in production.
Capital expenditures per production worker in primary
aluminum and aluminum fabrication have been higher
than in all manufacturing. The average per production
worker in aluminum fabrication between 1970 and 1981
exceeded all manufacturing by 61 percent, while the
average in the highly capital-intensive primary industry
exceeded that for all manufacturing by 165 percent.

Employment and Occupational Trends

Employment in the primary aluminum and rolling,
drawing, and extruding sectors of the industry combined
declined from 91,700 to 82,600 workers over the period
1970-84, or by 9.9 percent. (See charts 5 and 6.) Sixty
percent of the decline was in rolling, drawing, and ex­
truding mills, which employed more than 70 percent of
the work force in 1984 in the two sectors combined. Pro­
duction workers made up about 75 percent of the work
force and accounted for nearly the entire downturn in
employment over this period. Employment in both sectors
of the industry moved sharply lower during the decline
in the economy during the mid-1970’s and during 1980-82.
The change in demand for aluminum rather than new
technology was the most significant factor affecting the
level of employment over this period.
Prospects for employment growth appear more favor-

Capital expenditures in the primary aluminum and
aluminum fabricating sectors have been rising as demand

10 U.S. Department of Commerce, Bureau of Industrial Economics,
Office o f Research, Analysis, and Statistics.


able for both primary aluminum and rolling, drawing,
and extruding mills, based on projected gains in ship­
ments and the upturn in the economy which began in 1983.
A more detailed analysis of employment trends in primary
aluminum and in fabricating mills is presented below.


b l s projections of employment by occupation are not
available for primary aluminum or fabricating; however
the trends in technology suggest some changes for the next
decade. Although new technology is lowering unit labor
requirements of pot tenders, casting operators, rolling
mill operators, and other workers in primary and fabrica­
Primary aluminum. In 1984, a total of 23,100 employees
tion plants, widespread displacement is not anticipated.
worked in the primary mills which convert alumina to
Moreover, most occupations in aluminum production and
aluminum—well below the 26,700 employed in 1970.
fabrication into the mid-1990’s are expected to involve
Employment moved generally higher throughout the
generally the same skills and duties as in the past, with
1970’s, and peaked at 32,800 in 1980. The periods 1974-75
several important exceptions discussed below.
and 1980-83 were exceptions to the general rise in employ­
The work force changes accompanying technological
ment over this period. Between 1980 and 1983, employ­
in the aluminum industry are generally
ment declined by 35 percent as demand for aluminum
in other capital-intensive industries, such
slackened and by 1983 had fallen to the lowest level in
The introduction of computer process
the period. Some less efficient plants which closed dur­
instrumentation in potline and roll­
ing this period are not expected to reopen.
modified the jobs of potline
An examination of employment data shown in chart
to include more exten­
5 provides a broader view of employment change in
from modern­
primary aluminum. During 1970-73, employment in­
creased at an average annual rate of 1.9 percent, slowed
for these
slightly during 1973-78 to an annual growth rate of 1.3
in the
percent, and declined during the more recent period,
1978- 83, at an annual rate of 7.4 percent. An employ­
ment gain of 7.9 percent in 1984 accompanied the
who monitor and maintain them. Furthermore, the
substantial increase in production in this sector and
improvement in equipment to move molten metal
marked a reversal from the 1980-83 decline.
products through production steps affects
Rolling, drawing, and extruding. Employment in this sec­
occupations in primary aluminum and
tor declined from 65,000 to 59,500 workers over the
fabrication operations, with improved handling and lower
period 1970-84. The downward trend in employment
labor requirements generally accompanying these changes.
followed a somewhat different pattern compared to
Because the production of aluminum is capital and
primary aluminum. The rate of decline between 1973 and
energy intensive, most changes involve modifications of
1975, which included a recession, was much more severe,
portions of the production process, rather than the con­
at an annual rate of 12.0 percent compared to 4.8 per­
struction of entirely new plants. When expensive new facil­
cent in primary aluminum. The precipitousness of this
ities are constructed, however, they incorporate the latest
decline is illustrated by the fact that 1973 was the highest
technologies, which require less energy and labor than
level of employment in rolling, drawing, and extruding
older facilities. In new mills, for example, the number of
mills over the period 1970-84, and the number employed
potline tenders and liners, rolling mill operators, and re­
in 1975 was the lowest. However, the trend differed for
lated production workers required for comparable levels
these two sectors of the industry during the more recent
of output are lower than in less modernized facilities.
period 1979-83. Although employment in fabricating mills
Moreover, some experts foresee that new technology may
fell off sharply, at an annual rate of 6.0 percent during
1979- 82, the decline in the primary sector, which took result in combining jobs, that is, workers increasingly will
take responsibility for several tasks, such as both the
place from 1980 to 1983, was far greater—at an annual
operation and maintenance of rolling and extrusion
rate of 14.5 percent.
equipment. Although unit labor requirements are lower
As indicated in chart 6, the employment situation in
in new plants, it is important to keep in mind that the
rolling, drawing, and extruding mills appeared to worsen
major incentive to modernization—particularly in pri­
progressively over the longer span 1970-82. Between 1970
mary aluminum plants—is to lower energy costs.
and 1973, employment increased at an annual rate of 1.4
The extent to which mechanization of aluminum
percent, turned down over the years 1973-78 at an annual
reduction and fabrication processes will affect the struc­
rate of 0.3 percent, and experienced a further deteriora­
ture of the work force will depend on several key fac­
tion during 1978-82, when employment moved sharply
tors, including the availability of funds for moderniza­
lower at an annual rate of 4.4 percent. Between 1982 and
tion, the impact of foreign competition, and the general
1984, however, employment increased at an annual rate
outlook for the industry.
of 3.3 percent.


Chart 3. Output per employee hour and related data, primary aluminum , 1970-84
(Index, 1977 = 100)

Source: Bureau of Labor S ta tis tic s .


Chart 4. O utput per employee hour and related data, aluminum rolling, drawing, and extruding,
(Index, 1977 = 100)

Source: Bureau of Labor Statistics.


Chart 5. Em ployment in primary aluminum , 1970-84
Employees (in thousands)

Employees (in thousands)

1 Least squares trends m ethod.
Source: Bureau of the C ensus. 1984 em p loym ent e stim ated by the Bureau of Labor S ta tis tic s .

Adjustment of workers to technological change

The aluminum industry is highly unionized. The
United Steelworkers of America ( a f l -c i o ) and the
Aluminum, Brick and Glass Workers International Union
( a f l -c i o ) represent the majority of process and mainte­
nance workers.
The introduction of new technology has not resulted
in widespread displacement, and work force adjustments
to advanced process control technology, continuous
casting, and other innovations have been handled in the
context of general provisions of collective bargaining
agreements related to seniority, training, wage rate deter­
mination, and related topics. The collective bargaining
agreements negotiated between major producers and

unions include a requirement that the union be notified
90 days in advance of plant shutdowns.
The aluminum industry is among the U.S. industries
which have faced increased competition in domestic and
foreign markets and is now recovering from a period of
depressed demand. Accordingly, the 3-year collective
bargaining agreement negotiated in 1983 between major
producers and unions recognized problems faced by the
industry, and included major wage and benefit conces­
sions by the unions to reduce costs. These include no
general wage increase; a reduction in cost-of-living
benefits, and a cutback in other benefits. Some benefits
were strengthened, but the net effect was a slowdown in
the rise of wage and benefit costs. A 1985 contract be-

Chart 6. Employment in aluminum rolling, drawing, and extruding, 1970-84
Employees (in thousands)

Employees (in thousands)

1 Least squares trends m ethod.
Source: Bureau of the C ensus. 1984 em p loym ent e s tim a te d by the Bureau of Labor S tatistics.

tween a major producer and the United Steelworkers
superseded the 1983 agreement and involved a cutback
in wages and benefits in exchange for the issuance of com­
pany stock to the employees. The union also received a
seat on the company’s board of directors.
These concessions are expected to strengthen job
security, as some plants scheduled for closing will remain
in operation because of a lower cost structure. Moreover,


additional funds will be available to modernize and gener­
ally improve the competitive position of the industry. On
the other hand, supplementary agreements negotiated at
some plants over the past several years have cut back crew
size on potlines and in other operations. Some firms
which have instituted labor cutbacks have allowed early
retirement to ease the impact on the work force.

Parks, K. W. and L. L Young. “ Alcoa’s Ring Furnace Technology,”
Light Metal Age, June 1983, pp. 20-21.

Altan, Taylan and Carl F. Billhardt. “ Application o f cad / cam in
Extrusion—A Management Overview,” Light Metal Age, October
1983, pp. 24 and following.

Pennington, Neiland. “ Reynolds Modernizes Sheet Mill; Updates
Market Strategy,” Modern Metals, April 1983, pp. 54 and following.

Aluminum—Profile o f the Industry, edited by Jeffrey Keeff. New York,
McGraw-Hill, Inc., 1982, 201 pp.

Regan, Robert J. “ Steady Gains in Output and Prices Mark Aluminum’s
Recovery,” Iron Age, Oct. 21, 1983, pp. 49 and following.

“ An Ultra Modern Aluminum Smelter,” Light Metal Age, December
1980, pp. 10-13.

Riedlinger, Tom. “ Reynolds Goes Continuous; Gains Sheet/Foil
M uscle,” Modern Metals, July 1980, pp. 52 and following.

Baumgardner, Luke H. and Frank X. McCawley. “ Aluminum,”
Mineral Commodity Profile. U.S. Department o f the Interior, Bureau
o f Mines, 1983.
Brondyke, Kenneth J. “ The Aluminum Industry in 1982 and Outlook
for the 80’s ,” Journal o f Metals, April 1983, pp. 63 and following.

Russell, Allen S. “ Pitfalls and Pleasures in New Aluminum Process
Development,” address delivered at American Institute o f Mining,
Metallurgical and Petroleum Engineers, Inc., meeting, Chicago, 111.,
Feb. 24, 1981.

“ Extrusion Technology Conference Spotlights Automation Advances,”
Modern Metals, May 1984, pp. 6 and following.

The Aluminum Association. Aluminum: A Vital U.S. Industry in a
Highly Competitive World Market, 1984, 59 pp.

Haupin, Warren E. and William B. Frank. “ Electrometallurgy of
Aluminum,” Comprehensive Treatise o f Electrometallurgy, Vol. 2.
New York, Plenum Publishing Corporation, 1981, pp. 301-25.

The Aluminum Association. Energy Conservation and the Aluminum
Industry, 1984, 9 pp.
“ The Blaw-Knox Inflatable Crown Roll System,” Light Metal Age,
April 1983, p. 16.

“ Hot Top Caster Doubles Extrusion Billet Production,” Modern
Metals, January 1983, pp. 34-35.

U.S. Department o f Labor, Bureau o f Labor Statistics. Industry Wage

Survey: Nonferrous Metal Manufacturing Industries, February 1981,

“ Introduction to the Alusuisse Caster II Process,” Light Metal Age,
June 1983, pp. 10, 12.

Bulletin 2167, December 1983.


Chapter 3. Aerospace


the economy. In the missiles and space vehicles industry,
employment generally declined during the early to
mid-1970’s, then rose sharply in the late 1970’s and early
1980’s. BLS projects that employment in 1995 for this in­
dustry will be sharply higher than in 1984, increasing at
a rate of 2.2 percent annually over the period, assuming
moderate growth of the economy.

The aerospace industry (sic 372, aircraft and parts;
sic 376, missiles and space vehicles) has been in the
forefront in adopting computer technologies to improve
product quality and reliability and increase labor produc­
tivity. This has taken the form of automating the machine
tools used in production through widespread use of com­
puter numerical control and computer-aided design and
manufacture, and, with less frequency, industrial robots.
Adoption of new technologies has been stimulated, in
part, by the need to develop less labor-intensive means
of manufacturing new products, such as composite
materials, to replace metals in aircraft.
BLS has not developed a productivity measure for the
aerospace industry because of the complexity of the indus­
try and the limitations of available data. The data avail­
able suggest that in the aircraft and parts industry, output
per employee hour rose at a modest rate during the period
1972-82, as real output increased at only a slightly more
rapid rate than employee hours. These trends compare
unfavorably with the earlier years, 1960-73, when pro­
ductivity growth was more substantial. In the missiles and
space vehicles industry, productivity showed little or no
growth during 1972-82 as shipments fell at approximately
the same modest rate as employee hours.
Real investment in the aircraft and parts industry
slipped sharply in the early 1970’s, to its lowest level in
two decades, then turned around during the late 1970’s
and peaked in 1980. The low level of investment during
the early years is attributable to excess capacity as a result
of the winding down of the Vietnam War and the
economic recession. The upturn during the late 1970’s oc­
curred as output expanded rapidly. In the missiles and
space vehicles industry, investment also declined errati­
cally through most of the early 1970’s, to its lowest level
since the mid-1950’s, before increasing sharply in the late
1970’s and early 1980’s. Nevertheless, the 1981 peak was
only half the record 1967 level of investment.
Employment in the aircraft and parts industry
fluctuated widely during the 1970-84 period due to chang­
ing economic and political conditions. Overall, employ­
ment grew an average of 0.9 percent annually, but, by
1984, it was about one-third below its Vietnam-era peak.
b l s projects that by 1995 employment in this industry
will approximate the 1970 level, an increase of 1.1 per­
cent annually from 1984, assuming moderate growth of

Industry Structure
The aerospace industry is one of the most highly con­
centrated large industries due to the enormous capital re­
quirements for aerospace projects, long startup period
for each project, economies of scale, and the hightechnology nature of the industry. In the commercial
aviation sector, there are currently only three manufac­
turers, and, in the jet engine market, two producers have
an overwhelming share. The military and general avia­
tion sectors are less concentrated, although through con­
solidations the number of producers is declining. The
growing internationalization of the industry is likely to
cause some restructuring of these sectors, however.
A large number of suppliers and job shops subcon­
tract to the principal aircraft and engine manufacturers.
For example, one large airframe builder has a network
of 3,500 subcontractors and suppliers (not all classified
as aerospace) which together produce about half the com­
ponents of each plane. Competition is intense among
these companies, which, for the most part, are relatively
small, having less than 250 workers, in contrast to the
very large size of the prime contractors.

Technology in the 1980’s
The major focus of technological improvement has
been the automation of machine tools used in produc­
tion. Automation has taken the form of widespread use of
numerical control ( n c ), ranging from comparatively sim­
ple hand-used NC to minicomputer- and microprocessorbased units (i.e., computer numerical control, c n c ), to
large and complex direct numerical control (D N C )
systems. These technologies improve product quality and
lower unit labor requirements. Also, industrial robots are
being adopted in production areas characterized by long
production runs and simple, repetitive steps. Their ap­
plication in this industry is limited, however, because
complexity and small batch runs are the norm.

and parts industry had the largest number of NC
machines of any industry—7,500—amounting to 14 per­
cent of the total for all metalworking industries.1 By
1983, there were 8,800 NC machines in the aircraft and
parts industry,2 which accounted for 9 percent of that
industry’s machine tools, a proportion exceeded by only
one other metalworking industry. In the missiles and
space vehicles industry, about 8 percent of all machine
tools were NC.
Basic NC, a major step towards automating the
machining process, features an electronic controller which
automatically directs machine movement by reading
coded instructions in digital form. The instructions, which
are most commonly transmitted to the machine by means
of perforated tape, indicate the moves, sequences, tools,
and motions that the machinery will need to produce the

The development of several new aircraft products has
been a major stimulus for the diffusion of new manufac­
turing technologies. In particular, greater acceptance of
composite materials in aircraft as a substitute for heavier
weight metals has led to the development of new fabri­
cating techniques to replace more labor-intensive conven­
tional methods. Also, use of harder steels than tool steel
has led to the diffusion of laser and electrochemical
The major technology changes in the aerospace in­
dustry, their implications for labor and their diffusion
are summarized in table 3.
Numerical control

The numerical control of machine tools is used
throughout the aerospace industry. NC technology, first
developed in rudimentary form by a defense subcon­
tractor for the production of complex aircraft and missile
parts during the late 1940’s, was adopted on a large scale
during the 1960’s and early 1970’s. In 1978, the aircraft

1 “ The 13th Annual Inventory of Metalworking Equipment, 1983,”

American Machinist, November 1983, pp. 113-44.
2 Ibid.

Table 3. Major technology changes in aerospace


Labor implications

Numerical control (NC)

Machine tool movement controlled
automatically by electronic con­
troller. Instructions are transmitted to
machine by perforated tape, punchcard, etc. Reduces setup time, in­
creases operating rates and accuracy
compared to manual operations.

Reduces unit labor requirements for
machine operators. Requires less skill
than manual operation o f tools.
Creates new position of programmer.

In 1983, 9 percent o f all machine tools
in the aircraft industry and 8 percent in
the missile industry had NC, CNC, or

Computer numerical control (CNC)

Microcomputer located on machine
tool controls operations. Makes pro­
gram changes easier than for simple
NC unit. With CNC, tool can be con­
nected to master computer.

Substantially lowers unit labor re­
quirements for programming and
machining. Allows the consolidation
o f three jobs—computer program­
mer, maintainer, and machinist—into
one position under certain conditions.
Reduces skill requirements for pro­
gramming and machining.

Accounts for a rising proportion o f NC
machine tools in use. Rapid growth
stimulated by increased capability of
CNC machines and sharp declines in
microcomputer costs. Continued rapid
diffusion expected.

Direct numerical control (DNC)

Master computer “ supervises” opera­
tions o f individual CNC machine
tools on shop floor.

Similar to CNC.

Diffusion generally limited to largest
plants. Aircraft industry use more ex­
tensive than most other industries. Dif­
fusion increasing.

Computer-aided design/computeraided manufacture (C AD/CAM )

CAD is a highly efficient computerized
drafting tool in the form o f a CRT;
allows operator to easily alter or
rotate parts designs. Designs can be
stored in central com puter or
transferred to other areas. CAM con­
trols machine operation and material
handling on shop floor. Improves

Reduces unit labor requirements for
drafters and programmers. With
CAD, time required to design a part
can be cut between one-eighth and
one-half that necessary for manual
drafting. Most workers can be re­
trained to operate C A D /C A M in a
relatively short time.

Extensively adopted by large aircraft and
parts manufacturers in last decade. Dif­
fusion expanding to smaller firms due
to falling prices and improved capa­
bility. Some major firms are requiring
that their subcontractors have
C A D /C A M to facilitate intercompany
transfer o f data and drawings.

Industrial robot

Manipulator (i.e., arm or machine)
moves tool parts or materials through
programmed motions to perform
variety o f simple tasks, e.g., drilling
holes, spray painting, or welding.

Substantially boosts productivity; e.g.,
where it formerly took five workers
6 hours to manually paint an aircraft
section, with painting robot, two
workers are required in the same

78 robots in operation in aircraft industry
in 1983; diffusion low due to batchoriented nature of much of aircraft pro­
duction. Expanded use expected in
areas which can be readily automated.

Flexible manufacturing system

Computer-controlled work stations are
linked by sophisticated materials
handling system. Allows randomized
routing o f parts. Can accommodate
the machining o f a wide range of
products. Reduces inventory costs.

Reduces unit labor requirements by
two-thirds compared to conventional
equipment. Requires only unskilled
workers to load and unload system on
the shop floor. Highly skilled elec­
tronic technicians are required for

Two systems have become operational
within the last 2 years. Two others are
under construction.



two workers 5 days to produce the same amount of tubing
using conventional equipment.
Labor savings can also result from job consolidations
once a c n c unit is brought online. In some cases, three
separate jobs—computer programmer, machine maintainer, and machinist—can be merged into one job on
the shop floor. This is possible largely because of the
relative simplicity of CNC programming compared to NC.
Older NC equipment generally requires highly skilled pro­
grammers while the new CNC technology is simple enough
to use so that a worker with limited programming ex­
perience can become proficient. However, in many
plants, management separates programming from
machine tool operation. By increasing the division of
labor (rather than consolidating it), management is able
to remove much of the decisionmaking and discretion
from the shop floor and, therefore, can fill the machine
operator’s job with a less skilled worker.
Diffusion of CNC machine tools in the aerospace in­
dustry has increased because c n c has substantially
greater capability than NC, and has become more
affordable as the cost of computers has fallen.

n c can substantially boost productivity by reducing
downtime relative to older methods. One major area of
time savings is setup. By cutting down on setup time,
actual operating time can be increased. Whereas the
average conventional tool may be operating only about
15 to 20 percent of each shift; with NC, it conceivably
could be operating up to 40 percent of the shift.
Use of NC also reduces requirements for skilled labor.
For example, the position of template maker is eliminated
because machine movement is automatically controlled
by tape. Typically, a manufacturing engineer will deter­
mine machine movement, while a computer programmer
will program the tapes.
Requirements for skilled machinists are also reduced.
With conventional equipment, the machinist generally
has to make each part separately. With the n c equip­
ment, the machinist sets up the equipment and ensures
that it is working properly and a lower skilled operator
then monitors the machine’s operation.
Other advantages of the NC include closer tolerances,
higher speeds, and considerable scrap savings. With n c ,
the parts are more consistent because the same program
can be used to make the part each time it is produced,
while with a manually guided machine tool, the pieces
may be subject to some variation, depending on the
machinist’s skill.

Direct numerical control

Closely related to c n c is direct numerical control
which is used in some very large aircraft plants.
With a d n c system, a central computer is able to pro­
gram and run simultaneously a number of CNC machines
on the factory floor. The shop-floor machines in turn in­
dicate to the central controlling computer when its com­
mands are carried out. At one large plant which manufac­
tures gas turbine aircraft engines, a central computer
“ supervises” the operation of 103 CNC machine tools,
as well as an automated material handling system. Addi­
tional c n c machine tools are being added to the system.
Productivity is substantially boosted with DNC. For in­
stance, at one large aircraft plant with d n c , the plant’s
tools are now cutting metal 38 percent of the time that
they are in operation compared to 15 percent previously.
Generally, the same labor is required for d n c as CNC.
However, unlike CNC, the worker does not have to enter
data at his own work station; rather, data are sent
automatically to his station from the central computer.
( d n c ),

Computer numerical control

A more sophisticated type of automated machine con­
trol which substantially reduces unit labor requirements is
computer numerical control ( c n c ). This technology be­
came a feasible alternative to basic NC during the mid1970’s. In a c n c unit, a minicomputer is used to control
basic NC functions by means of programs which are
stored in the minicomputer’s memory. When a part is to
be machined, a stored program is retrieved from the com­
puter’s memory, and the operation is then performed,
with the computer element becoming the control unit.
CNC has several features which give it a substantial
edge over a simple NC unit. First, the machine operator
can easily modify the program on a CNC unit by revis­
ing the data stored in the computer, rather than sending
a punchtape back to the computer room for the pro­
grammer to rewrite. Moreover, the computer is more
reliable than tape; the tape, tape puncher, and tape reader
of a simple NC machine can frequently malfunction. A
third major advantage of CNC over n c is that the c n c
units can be connected to other master computers ( d n c ,
which is discussed below).
Unit labor reductions can be substantial with CNC,
when compared to conventional equipment. For instance,
at one aircraft manufacturing plant which installed three
computer-controlled tube-bending machines to bend both
aluminum and steel, one operator can produce 60 pieces
of tubing in less than half a day.3 By contrast, it took

Computer-aided design/computer-aided

Computer-aided design/computer-aided manufacture
is yet another computer application which
was first developed for the aerospace industry. This
technology facilitates both the design and manufacture
of parts and can substantially increase productivity, c a d
can operate independently of c a m , but greater efficiency
results when the two systems are closely coordinated.
The CAD system serves as a highly sophisticated draft­
ing tool. The design engineer or drafter is provided with
an electronic drafting board in the form of a cathode ray
(c a d / c a m )

3 Iron Age, July 14, 1982, p. 64.


puter prices and improvements in the technology, it is
spreading to smaller firms. Some of the major aircraft
manufacturers are requesting that their suppliers and sub­
contractors be equipped with c a d / c a m to facilitate in­
tercompany transfer of drawings and data.

tube (CRT) on which parts and assemblies can be
displayed. The system allows the engineer to easily switch
or rotate design variations, as the computer adjusts every
line, angle, and cross-section. The completed design can
be stored in the central computer or passed through the
computer directly to the manufacturing operations (i.e.,
manufacturing engineers, programmers, etc.).
The second part of the technology, c a m , is the ap­
plication of computers to integrate design with the
manufacturing process. With a sophisticated c a d / c a m
system, manufacturing engineers can pull computer­
generated designs and modeling data from a computer,
then use the computer and stored information to design
the tooling, fixtures, and control procedures needed
to make the piece, c a m also serves as a system to con­
trol the operations of machine tools (which may be
c n c or robots) on the shop floor and can be used for
The productivity advantage of this technology—
whether CAD alone or the integrated c a d / c a m system—is
substantial. With c a d alone, the time required to design
a part is frequently cut to between one-eighth to one-half
of that necessary for manual drafting. For instance, one
large plant which manufactures helicopter blades recently
installed a c a d / c a m system; the engineering of parts now
takes only one-eighth to one-fourth as long as the
conventional method of detailing from blueprints. Time
savings result not only because drafting is facilitated
but because the design and data can be transferred
through the computer from the design shop to the
manufacturing shop several miles away in seconds. Under
the old system, a drafter in the manufacturing shop would
have to duplicate the design-shop drawing by super­
imposing a piece of paper and hand copying it line by
An additional advantage of c a d / c a m is that it is con­
siderably more accurate than drafting by hand;
c a d / c a m - manufactured parts can be finished to closer
tolerances and with fewer errors. This provides major sav­
ings during subsequent assembly operations because the
closer tolerances make assembly simpler and less costly.
Also, because the programming of parts can be done so
quickly with c a d / c a m , it becomes economically feasible
to program for even very small batch production.
In many cases, workers are retrained to operate a
CAD/CAM system. At one aircraft plant, 100 workers
(design engineers, tool engineers, structural designers, and
drafters) underwent a 6-month, in-house training pro­
gram when the new c a d / c a m system was installed. No
workers were laid off at that time. More recently, new
drafters were given a 3-week, 3-hour-per-day training pro­
gram to become fully functional on the c a d / c a m system.
Since 1974, when c a d / c a m systems first came into
use, they have been widely diffused throughout the
aerospace industry. Initially, the technology was adopted
by the major aerospace companies, but, with lower com­

Industrial robots

Industrial robots are being adopted by aerospace
manufacturers to do simple manual tasks such as drill­
ing holes, spray painting, and welding. These functions
are comparatively easy to adapt to robots because the
paths the robot is to follow are predictable, the tasks are
repetitive, and little sensing capability is required. Robots
are also being used to some degree to lay graphite on com­
posite production lines.
Large productivity gains are associated with the
adoption of industrial robots. For example, after a major
aircraft manufacturer installed a robot in the plant’s
vertical tail construction station, unit labor require­
ments were reduced by almost two-thirds. Formerly, it
took a worker a full day to drill all the necessary holes
in a graphite epoxy skin; with the robot, he can drill
between two and three skins each day.4 The original
operator was retrained to operate the robot. At a second
aircraft plant, a spray-painting robot was installed to
paint airplane sections. Previously, using conventional
equipment, five workers needed 8 hours to manually paint
the aircraft section; with the robot, only two workers
are required to paint the piece in the same period of
tim e.5
Product reliability is another factor favoring the dif­
fusion of robots. Error is reduced because robotproduced parts are the same every time, and they are of
consistently high quality. And since parts can be made
to closer tolerances, subsequent assembly operations are
Despite the apparent advantages, diffusion of the
robot is low in aerospace relative to high-volume in­
dustries such as automobiles and appliances. A 1983
survey revealed 78 robots in the aircraft industry out of
a total of 2,744 in all metalworking industries.6 The low
diffusion is attributable to the nature of aerospace pro­
duction, which is largely batch or job oriented. Never­
theless, diffusion is expected to increase in those areas
which can be automated. One aircraft manufacturer who
had eight robots in 1982 predicted that the company
would have 40 within the next several years.7 At a
second plant with three robots, management plans to add
dozens more as part of a $1 billion modernization
program .8
4 Iron Age, July 14, 1984, p. 63.
5 Aviation Week and Space Technology, Aug. 2, 1982, p. 78.
6 “ The 13th Annual Inventory o f Metalworking Equipment,
1983,” American Machinist, November 1983.
1 Aviation Week and Space Technology, Aug. 2, 1982, p. 77.
%Ibid., April 19, 1984, p. 27.


Flexible manufacturing system

downtime and improving machine utilization and mate­
rial handling, thereby cutting unit labor requirements.
One FMS is designed to result in 80- to 85-percent
machine-time use, compared to 15 to 25 percent for con­
ventional manufacturing setups.9 Another advantage of
this system is that inventory costs can be minimized since
new parts can be so readily and cheaply produced.

On the cutting edge of technological development in
the aerospace industry is the flexible manufacturing sys­
tem (FMS), which can reduce downtime and unit labor re­
quirements. At one plant with an FMS, unit labor require­
ments to produce parts were reduced to an average of only
one-third of that required for conventional equipment.
An FMS consists of a series of computer-controlled
work stations which are linked by a sophisticated
material-handling system to transport work pieces from
one station to the next. The system allows the randomized
routing of parts to different work stations, rather than
necessarily running them in a straight line through the
stations. In addition, the system can be sufficiently flex­
ible to accommodate the machining of a wide range of
products through use of quick-change, automated tool­
ing and computer control. For example, at one plant pro­
ducing fuselage sections for the B-l bomber, 541 different
parts can be produced with relatively quick changeover
of tooling. By contrast, a conventional transfer line is
typically designed to machine a single piece.
The major advantage of flexible manufacturing is that
it allows more economical production of small quantities
of a variety of parts. This is achieved through reducing

Output and Productivity Trends

Output in the aerospace industry is highly volatile, as a
result of both changing economic conditions and differing
perceptions of the Nation’s defense requirements (chart 7
and 8). While there is no definitive measure of output,
available data10 indicate sharp fluctuations, but relatively
good overall growth. In the 1972-82 period, estimates of real
output growth range from 3 1/2 percent (Census) to 4 1/2
percent (Federal Reserve). The rate of output growth for all
durable goods was 2.4 percent during that period (BLS).
9 Aviation Week and Space Technology, Aug. 2, 1982, pp. 46-47.
10 Bureau o f the Census, Census o f Manufactures, deflated value
o f shipments; Board of Governors o f the Federal Reserve Board, Index
o f Industrial Production.

Operators monitor a flexible manufacturing system used to machine fuselage parts.


Chart 7. Output and em ployee hours, aircraft and parts, 1972-82
(Index, 1977 = 100)

(Index, 1977 = 100)

1 Based on data from the Bureau of the C ensus and the Bureau of Labor S tatistics.
2 D eflated value of ship m ents based on Bureau of the C ensus and Bureau of Labor S ta tis tic s data.
Source: Bureau of Labor S tatistics.

Output in the aircraft and parts industry declined dur­
ing the early 1970’s due to the 1970 recession (which collasped the commercial aircraft market) and to reduced
military demand associated with the winding down of the
Vietnam War. It increased in 1973, only to fall again as
a result of the 1974-75 recession. The late 1970’s and 1980
were marked by a sharp rise in production due to strength
in the civil aircraft sector which was offset to some degree
by a decline in military production.
During the early 1980’s, aircraft production was
depressed by recession, high interest rates, and greater
foreign competition. Commercial large transport and
general aviation aircraft production was hurt by lower
corporate profits, the restructuring of domestic airlines,
and stiff competition overseas. Unit sales were especially
depressed in the general aviation sector, falling from
17,811 in 1978 to 4,266 in 1982. Dollar sales were not
hurt as much because of a change of product mix in favor
of higher priced turbo and commuter jets. Weakness in
these important sectors was partially offset by gains in
the military sector.
The growing internationalization of the aircraft in­
dustry has contributed to the decline in domestic output
in recent years. Foreign producers have gained an in­

creased share of the global aircraft market, which had
historically been overwhelmingly dominated by U.S.
manufacturers. For the period 1964-79, U.S. commer­
cial jets represented almost 90 percent of the annual
global market. Between 1980 and early 1984, the U.S.
share of the wide-body transport aircraft market, which
accounts for almost half of the total large transport
market (dollar value), was estimated to be 68 percent.11
Moreover, foreign producers have been able to make
substantial inroads into the U.S. aircraft market, with
their greatest penetration in the general aviation sector
(36-percent share in 1982 compared to 10 percent in 1978)
and the helicopter sector (35-percent share in 1982 com­
pared to 14 percent in 1978).
During the remainder of the decade, output growth in
the aircraft and parts industry is expected to be strong, in
large part due to high military demand. The prospects for
commercial transport are also expected to improve, because
the existing airfleet is aging, noisy, and fuel inefficient.
Output in the missiles and space vehicles industry is,
like aircraft, highly volatile. It declined sharply during

U.S. Department o f Commerce, International Trade Adminis­

Chart 8. O utput and employee hours, missiles and space vehicles, 1972-82
(Index, 1977=100)

(Index, 1977 = 100)

1 Based on data from the Bureau of the Census and the Bureau of Labor S ta tis tic s .
2 D eflated value of s hip m ents based on data from Bureau of the C ensus and Bureau of Labor S ta tis tic s .
Source: Bureau of Labor S ta tis tic s .

most of the 1970’s to reach a low in 1977, then rebounded
as the Nation began to rebuild its defenses. The missiles
and space vehicles industry has become the most rapidly
growing aerospace sector, with space products its most
dynamic segment. A strong export market has also
boosted sales. Overall, for the entire period 1972-82, out­
put declined by about 1 percent annually because of the
weakness in early years.
Output growth is expected to continue for the missiles
and space vehicles industry if the country follows
through on its planned defense expenditures. The Depart­
ment of Commerce projects very rapid growth in the
missiles and space vehicles sector during the remainder
of the decade and only slightly less rapid growth for
shipments of space propulsion units and space vehicle
equipm ent.12

approximately 3 1/2 to 4 1/2 percent annually during
those years (see above), while employee hours (based on
Bureau of the Census data) rose by about 3 percent
The small decline in the ratio of payroll to value added
through 1981 (0.7 percent annually) would also indicate
relatively slow productivity growth. The low growth con­
trasts with the stronger productivity increase of the
1960-73 years when aircraft industry output rose more
than 3 percent and employee hours fell by about 1 per­
cent annually.13
The slower growth in productivity during the latter
period can be at least in part attributed to the volatile
shifts in output, with delayed adjustments in employment.
The growing complexity of the product (such as increas­
ing amounts of electronic gear) and more frequent
changes in design have also been cited as causes for the
limited productivity gains.

Available data suggest that output per employee hour
in the aircraft and parts industry increased at a modest
rate during the period 1972-82 (no earlier or later data
available). Real output is estimated to have increased by

12 1985 U.S. Industrial Outlook, U.S. Department o f Commerce,
International Trade Administration, p. 37-10.
13 Technological Change and Manpower Trends in Five Industries,
Bulletin 1856, Bureau o f Labor Statistics, pp. 38-39.


any other manufacturing industry and nearly one-fourth
the r&d expenditures o f all industries.
Moreover, r&d funding as a percentage of net sales

In the missiles and space vehicles industry, available
d a ta 14 suggest that productivity showed little or no in­
crease between 1972 and 1982. During those years,
shipments declined by slightly more than 1 percent an­
nually while employee hours decreased at approximately
the same rate.

in aerospace is far higher than in most other industries,
amounting to 18.3 percent in 1982, compared to only 3.7
percent in all manufacturing industries. The level of ex­
penditures increased modestly (in constant dollars)
between 1970 and 1982.
The Federal Government contributes a large share of
these expenditures. In 1982, Federal funds accounted for
nearly three-fourths of total aerospace funds for r&d .
These Federal outlays were more than half of total
Federal R&D expenditures.
A portion of Federal Government R&D outlays is used
to fund programs designed to improve production
methods in defense contractor plants. One program
(Technology Modernization or TechMod) helps manufac­
turers pay for the implementation of new technologies
in plants. A second major program (Manufacturing Tech­
nology or ManTech) is designed to develop productivity­
enhancing manufacturing technologies. At least onequarter of 1984 funding for ManTech was concerned with
computer-aided m anufacturing.16

Capital expenditures

Following the decline in the early 1970’s, real capital
expenditures in the aircraft and parts industry increased
very sharply.15 They reached a peak in 1980, at well over
twice the 1970 level, then fell slightly in 1981 (latest
available data).
The low level of expenditures during the early
1970’s—lower than at any time since the late 1940’s—
was largely due to the accumulation of substantial excess
capacity during the Vietnam War buildup of the late
1960’s and the recession in the early 1970’s. In contrast,
investment was pushed upward by rising production levels
and new aircraft programs during the late 1970’s.
In current dollars, aircraft industry capital expen­
ditures were $1.6 billion in 1981, or nearly 5 times the
dollar outlays in 1970. Investment is being largely directed
toward modernizing existing facilities.
Capital expenditures per employee have been below
the average for all manufacturing industries although the
spread has narrowed in recent years. For the years
1972-74, the level of capital expenditures per employee
in the aircraft industry was less than one-third the average
in all manufacturing industries; for the period 1979-81,
it averaged one-quarter less.
In the guided missiles and space vehicles industry, real
capital expenditures increased sharply in the late 1970’s
after years of decline, and nearly doubled between 1978
and 1981. Despite the recent sharp rise, the 1981 level was
only slightly more than half the peak expenditures of
1967. In current dollars, $369 million was spent in 1981.
The upward trend during the late 1970’s was associated
with rising capacity utilization, the Nation’s military
buildup, and expansion of the space program. Due to ex­
pected expansion of numerous weapons and space pro­
grams, continued rapid real increase in capital expen­
ditures is likely.

Employment and Occupational Outlook

Employment in the aircraft and parts industry is
characterized by sharp fluctuations associated with chang­
ing economic and political conditions (chart 9). It rose
rapidly during the Vietnam War buildup, to a peak of
846,000 in 1968, then declined precipitously between 1968
and 1972 as the war wound down and the economic
climate deteriorated.
Between 1972 and 1974, aircraft employment rose
slightly, only to fall again during the 1974-75 recession.
The years 1977-80 were marked by rapid growth, as pro­
duction reached record levels in the commercial and
general aviation sectors.
Between 1980 and 1983, employment moved sharply
downward, falling by 11 percent, to 578,000, almost
one-third below its Vietnam-era peak. It rebounded
slightly to 596,000 in 1984, with the increase in aircraft
For the entire period 1970-84, employment in the air­
craft and parts industry grew by 0.9 percent annually,
triple the rate for durable goods manufacturing.
In the guided missiles and space vehicles industry,
employment generally declined between 1972 and
1977, then increased sharply in the late 1970’s and early
BLS projects that, between 1984 and 1995, employ-

Research and development

The aerospace industry has historically been a leader
in research and development (r&d ) spending. In 1982, for
instance, outlays for r&d were $14.0 billion, more than

14 Bureau o f the Census hours and deflated value of Census
15 U.S. Department of Commerce, Bureau of Industrial Economics,
Office o f Research, Analysis, and Statistics.


“ Employment, Education, and the Workplace,” Computerized

Manufacturing Automation, pp. 314-17.


9. Em ploym ent in aircraft and parts, 1970-84, and projections, 1984-95
•yees (thousands)

Employees (thousc






......... ................................





Production workers



A verage annual p ercen t ch an ge 1
A ll em ployees


1984-95 projection (moderate)2.................

... 0.9
...-7 .4
...-1 .1
... 0.6
... 1.1


P ro du ction w orkers



I___ I








^Least squares trends m ethod for historical data, com pound in terest m ethod for projections.
2See te xt foo tnote 17.
Source: Bureau of Labor S tatistics.


... 0.3
...-7 .9
... - 2.1
... -1 .3



ment in the aircraft industry will rise at an average
annual rate of 1.1 percent, to 670,000,17 assuming
moderate growth in the economy. This trend would
bring employment back to exceed its 1970 level. The
missiles and space vehicles industry is expected to in­
crease at a more rapid rate of 2.2 percent annually, to

The use of technological innovations in the produc­
tion process and the increasing sophistication of aircraft
are contributing to a shift in the occupational com­
position of the aircraft and parts industry. New produc­
tion methods are reducing requirements for a wide
range of production workers (such as machine tool cut­
ting and forming operators), while increasing the demand
for highly educated and skilled professional and tech­
nical workers, such as electronic technicians, computer
programmers, engineers, and other technically trained
personnel. This is particularly true for CNC equipment,
where computer programmers are replacing machine
operators and machinists.
In both the aircraft and the missiles and space vehicles
industries, the ratio of production workers to total
employment is very low relative to other industries. For
instance, in 1984, production workers accounted for 48
percent of total employment in the aircraft industry, and
33 percent in the missiles and space vehicles industry. By
contrast, they accounted for 67 percent of total employ­
ment in all durable goods industries. The low proportion
of production workers is associated with the increased
sophistication of the technologies which require relatively
more professional and technical personnel.
b l s occupational projections for the aircraft industry
for 1995 suggest that these trends will continue, i.e., that
the share of production worker employment will decline.
Professional and technical workers, and managers and
related workers are expected to increase. An employment
gain of 25 percent is projected for engineers, who already
accounted for almost one-seventh of total employment
in 1984. Other occupations which are expected to grow
rapidly are electrical and electronic technicians and com­
puter programmers.
In the missiles and space vehicles industry, BLS pro­
jects that by 1995 the patterns of change will be similar
to those in the aircraft industry. Engineering occupations,
one-fourth of all jobs in 1984, will grow by about onethird from 1984 to 1995.
Adjustment of workers to technological change

Programs to protect employees from the adverse
17 bls projections for industry employment in 1995 are based on
three alternative versions o f economic growth. For details on assump­
tions and methodology used to develop these projections, see the
Monthly Labor Review, November 1985.
18 Ibid.

effects of changes in machinery and methods of produc­
tion may be incorporated into contracts, or they may be
informal arrangements between labor and management.
In general, such programs are more prevalent and detailed
in industries which negotiate formal labor-management
agreements. Contract provisions to assist workers in their
adjustment to technological and associated changes may
cover wage rates, job assignments, retraining, transfer
rights, layoff procedures, and advance notice of changes
planned by management, e.g., machine changes or plant
closings. They may include various types of income
maintenance programs, such as supplementary unemploy­
ment benefits or severance pay.
A large proportion of production workers employed
by the major contractors in the aircraft and parts industry
are represented by labor-management agreements. By
contrast, many of the subcontractors and suppliers are
not unionized. The major union is the International
Association of Machinists and Aerospace Workers ( i a m ).
Other unions representing smaller numbers of produc­
tion workers include the United Auto Workers ( u a w ),
the International Brotherhood of Electrical Workers
( i b e w ), and the International Union of Electrical
Workers (IU E ). Professional and technical workers are
represented at one large aircraft plant by the Seattle
Professional Engineering Association. Most professional
and technical workers unions are unaffiliated, local
While recognizing that it is to the “ mutual benefit of
both the union and the company to utilize the most ef­
fective machines, processes, (and) methods,” one major
union has been concerned with dislocation and has
pushed for additional provisions to help ease worker ad­
justment to technological change. In negotiations con­
cluded at a major aircraft plant in December 1983, this
union won the right to advance notification of manage­
ment plans to introduce new technology. According to
the contract the company will, no less than annually, pro­
vide a briefing to the union of the company’s plans for
the introduction of new technology and will identify its
likely impact on job skills.19
In the event that jobs are eliminated due to tech­
nological change, some assistance, such as retraining, has
been included in some negotiated contracts. For exam­
ple, at one plant, a training program is being developed
for current and laid-off employees to qualify them for
employment in jobs involving new technology. Priority
for training is to be given to laid-off workers with recall
rights. At a second plant, a negotiated agreement includes
a letter specifying that the company will establish a com­
mittee to deal with new technologies with the goal of
assuring that employees who are directly laid off due to

Agreement Between The Boeing Company and International
Association o f Machinists and Aerospace Workers, 1983, p. 86.


the event of layoff although no direct reference is made
to technology.

the introduction of new machinery and equipment will
be offered retraining in the event that equivalent job op­
portunities are not available elsewhere.20
Other major industry contracts provide for severance
payments, supplementary unemployment benefits (SUB),
and seniority regulations governing layoff and recall in

Agreement Between Lockheed-Georgia Company and Interna­
tional Association o f Machinists and Aerospace Workers, 1983,
pp. 196-97.

“ Advanced Composites: They Are Now Stronger and Cheaper,” Iron
Age, Oct. 3, 1983, pp. 69-73.

“ In Search o f Aircraft,” Iron Age, July 14, 1982, pp. 60-72.
“ Mantech Program Aims To Make Factory o f Future a Reality in
Defense,” Industrial Engineer, February 1984, pp. 46-51.

Aerospace Industries Association o f America. Aerospace Facts and
Figures, 1983/84, July 1983, and 1984/85, September 1984.

Selected articles, Aviation Week & Space Technology, Aug. 2, 1982.

“ Bargaining in Aerospace Comes Down to Earth,” Business Week,
Sept. 26, 1983, pp. 38-39.

“ The 13th Annual Inventory o f Metalworking Equipment, 1983,”
American Machinist, November 1983, pp. 113-44.

Bluestone, Jordan, and Sullivan. Aircraft Industry Dynamics. An
Analysis o f Competition, Capital, and Labor. Auburn Press, 1981.

U.S. Congress, Office o f Technology Assessment. Computerized
“ In cad / cam Usage, Aircraft Leads the W ay,” Iron Age, Jan. 15,
1979, pp. 71-72.

Manufacturing Automation: Employment, Education, and the
Workplace, April 1984.


Chapter 4. Commercial Banking

Employment in most occupations is expected to in­
crease through the mid-1990’s as demand for commer­
cial banking continues to rise. Growth should be highest
for managerial and some professional and technical
workers, while growth for clerical workers—the largest
group of employees in commercial banking—will be very
small. Employment for bank tellers, about 23 percent of
the industry work force in 1984, will increase only slightly
by 1995 due to further automation of teller functions.
The banking industry makes extensive use of training
programs for people entering the industry as well as for
those who need further training to meet the demands of
new jobs or changing technologies. Training programs
include formal classwork, sometimes involving video
training techniques, and on-the-job training.

The commercial banking industry (SIC 602) has been
expanding. Between 1970 and 1983, the volume of serv­
ices and transactions in commercial banks increased,
employment rose, and banks added branches to attract
customers by making services more convenient.1
Advances in technology make it possible for banks to
process the substantial increase in the volume of checks
and other documents and to improve efficiency of
employees in occupations ranging from managers to
check processors. Most of the changes involve electronic
computers, video terminal networks, electronic transfer
of funds, and high-speed check sorting.
Output of commercial banks (as measured by the b l s
composite index of deposits, loans, and trust services) in­
creased by an average annual rate of 4.7 percent between
1970 and 1983. The rate of increase was uneven; the largest
increase was in the early and middle years of this span, and
between 1982 and 1983. Between 1978 and 1983, output in­
creased at a significantly lower annual rate of 2.6 percent.
Productivity in commercial banking (output per
employee hour) increased at an average annual rate of
only 0.8 percent during 1970-83, as the rate of growth in
employee hours—despite mechanization—nearly matched
the rate of expansion in output. During 1978-83, the pro­
ductivity record worsened as output per employee hour
declined at an average annual rate of 0.4 percent when
the rate of growth in employee hours exceeded the rate
of expansion in output through 1981. The situation
changed considerably in 1982-83, as output grew much
more rapidly than employee hours.
Employment in commercial banks totaled 1.5 million
in 1984; BLS projects a further rise to about 1.7 million
employees in 1995. Between 1970 and 1984, employment
increased at an average annual rate of 3.7 percent, and
a somewhat slower growth rate is anticipated through the
mid-1990’s. The structure of employment has changed—
the proportion of nonsupervisory workers has declined
as automation of bank operations has increased. Women
accounted for a substantial and growing share of the work
force in commercial banks, 72 percent in 1984.

Technology in the 1980’s
A number of technological changes are taking place in
commercial banks which affect job skills and employment
requirements. Advances in computer technology make
possible a growing number of automated customer serv­
ices and internal banking procedures. Networks of online
video terminals allow bank tellers and managers quick
access to customer records, and require tellers, book­
keepers, and managerial personnel to be familiar with
computer systems and equipment. Also, demand is strong
for computer specialists. Automatic teller machines and
point-of-sale terminals reduce labor requirements for tellers
and for those who proof and sort checks. Despite automa­
tion, however, processing bank checks remains labor in­
tensive, as each check going through the banking system
must be handled several times. High-speed check-sorting
machines are available, but proofing and coding the checks
prior to sorting continues to limit major productivity im­
provement. A description of major technological changes
in commercial banking, their impact on labor, and pros­
pects for further diffusion are presented in table 4.
Computerization of bank functions

The commercial banking industry covered by this bulletin is de­
fined as Standard Industrial Classification (sic) 602, commercial and
stock savings banks. Included are banks and trust companies which
accept deposits for the public and extend credit through loans and
investments. Mutual savings banks are excluded.


The most important area of technological change in­
volves a wide assortment of electronic data processing and
electronic funds transfer operations that are based on ap­
plications of computer technology. The financial services
industry, of which commercial banks are a major por­
tion, is second only to the U.S. Government in the
number of computers in use.

Table 4. Major technology changes in commercial banking


Labor implications

Computerization o f bank functions

Computers and software packages are
used in clearinghouse debits, recon­
ciliation o f customer accounts,
payroll deposits, depository transfer
o f checks, balance reporting, and
some trust deposit accounting opera­

Bank managers need a knowledge o f
computer operations. Tellers and
some other personnel must be train­
ed to use online video terminals and
other computer peripheral equip­
ment. Labor requirements in some
operations are lower. Demand for
programmers is growing.

In 1984, nearly all commercial banks had
some computerized operations, up
from 21 percent o f all banks in 1965.

Online terminals and other teller

Video screen computer terminals con­
nected online to a bank’s central com­
puter. Primarily used by bank tellers;
to a lesser extent by loan officers and
other bank personnel for access to
customer records. Some online ter­
minals provide electronic journaling
capability which eliminates need for
tellers to make lengthy adding
machine tapes o f daily transactions.

Tellers and others who work with
customers must be trained to use
video terminals. Customer transac­
tions and accounting tasks can be ac­
complished more quickly. One bank
estimates that teller productivity in­
creased by 20 percent after online
terminals were adopted.

Online terminals are being introduced in
larger banks, especially those with a
number o f branches. One large bank
has over 1,000 video terminals installed
in branches.

Automatic teller machines (ATM ’s)
provide many o f the services o f a
human bank teller. ATM ’s usually
are located on exterior bank walls or
other places accessible to customers
during nonbanking hours. Customer
withdrawals, the primary ATM tran­
saction, are made in cash, thereby
reducing the volume o f checks proc­
essed by banks using ATM ’s.

ATM ’s reduce the rate o f growth in
employment o f tellers.

The number o f ATM ’s has grown from
about 2,000 in 1973, to almost 60,000
in 1984. Experts foresee a further ex­
pansion in use o f ATM ’s over the next

In automated clearing houses (ACH),
debit and credit transactions between
banks are made electronically without
transfer o f paper. Transaction time
and costs are decreased.

Impact o f ACH operations cannot
be determined completely, but pro­
ductivity in affected applications is

ACH transactions have grown from 50
million in 1976 to more than 557 million
in 1984, and further growth is expected.

Wire funds transfer systems provide
electronic transfer o f large dollar
transactions between banks for bank,
corporation, or U .S. Government
financial activities.

Probable decline in the number o f
clerical employees needed to handled
these transactions.

Widely used in medium and large banks,
and in growing use in small banks.

Point-of-sale (POS) terminals provide
immediate charges to a person’s
checking account for purchases made
at retail outlets where POS terminals
have been installed, such as super­
markets and gasoline stations.

Point-of-sale terminals could reduce
labor requirements for tellers.

Point-of-sale terminals are in very limited
use, but installations are expected to

Proofing and encoding machines print
the dollar amount o f each check in
magnetic ink character recognition
(M ICR) characters for machine

Demand for proofing and encoding
machine operators, an entry level job,
will probably increase only slowly as
check volume moves higher. Produc­
tivity o f check sorters has risen
significantly as the speed o f new
equipment has increased.

All banks use proofing and encoding
machines and checksorting machines.
Only the largest banks have the volume
to justify the larger and faster models.


T eller-op erated cash dispensing
machines provide cash in specified
amounts faster and more accurately
than tellers can do manually counting
the cash.
Electronic funds transfer (EFT)

Check processing equipment

High-speed sorting machines read
MICR characters and sort checks by
bank and individual account number
at speeds up to 100,000 checks per

available), up from 21 percent in 1965. The location of
computer processing—onsite for the user bank, or
offsite—also has changed over time. In 1965, only 6 per­
cent of banks had onsite computers and 15 percent used

Computer applications have grown rapidly in the
banking industry. According to the American Bankers
Association ( a b a ) , 97 percent of all banks had com­
puterized operations in 1980 (most recent survey

offsite computers.2 By 1980, 26 percent of all banks had
onsite computer operations, while 71 percent used the
computer facilities of correspondent banks or computer
service bureaus. Looking ahead to 1990, an estimated 90
percent of all banks will have onsite computer capacity,
due in part to developments in microelectronics
As computer use has grown, expenditures for hard­
ware, software, and salaries of computer staff have
moved higher. Computer-related expenses have grown
most rapidly for large banks (assets of $500 million and
over) and accounted for about 9 percent of their operating
expenses in 1980. This is not surprising since 75 percent
of large banks were using onsite computers by 1980 (com­
pared to only 23 percent of small banks and 45 percent
of medium-sized banks). Many large banks also provide
offsite computer services to smaller correspondent
A number of customer services have been comput­
erized. Those mentioned most frequently in the a b a
survey include automated clearinghouse (AC H ) debits
(offered by 56 percent of banks), automated reconcilia­
tion of customer accounts (44 percent), automatic payroll
deposit (39 percent), ACH credit origination and
depository transfer of checks (32 percent), and automated
reporting of account balances (25 percent).5 In large
trust departments, most accounting operations are com­
puterized, but only about one-third to one-half of other
operations (securities management, tax preparation, stock
transfers, etc.) are automated.
The economic benefits available from computerization
are illustrated by a bank that installed equipment to
automate the handling of a large commercial customer’s
daily deposit. The deposit consisted of 16-19 bags of coins
and currency which had to be counted twice for accuracy.
Three tellers spent 5 hours every day processing the
deposit. To automate the processing of this deposit, the
bank installed a minicomputer, a coin sorter/counter, and
a currency/document counter. With this equipment, the
deposit is now made by one teller, working for 1 hour,
assisted for one-half hour by a second teller. The sav­
ings that resulted paid for the new equipment in 10
m onths.6

electronics technology. This equipment improves produc­
tivity of bank personnel and increases services available
to customers.
Online teller terminals. These video terminals are becom­
ing more widely used because they increase productivity
of bank tellers. The terminal networks are used primarily
to respond to customer balance inquires and to post
customer transactions. Tellers respond to requests for
bank balances in a few seconds with online terminals,
compared to several minutes by former methods. One
bank estimates that productivity of tellers rose by 20 per­
cent after an online teller terminal system was installed.7
The video screens in modern terminal networks also can
be used to relay messages to tellers concerning lost or
stolen credit cards or checks, changes in foreign exchange
rates, and related matters.
The first online terminals, introduced in the early
1960’s in savings banks, were installed to speed up
customer service at teller stations in branches of savings
banks, and did not have video screens. Although com­
mercial banks were slower to adopt online terminals, their
interest increased following the tremendous growth in the
number of commercial bank branches during the 1960’s
and 1970’s. Moreover, the capabilities of online teller ter­
minals improved significantly over this period. In 1974,
the Bank of America installed terminals in more than
1,000 branches in California, and has expanded this net­
work to include almost 10,000 terminals.8
Electronic journaling is another facet of online teller
systems that contributes to increased teller efficiency. It
eliminates the need for tellers to make lengthy adding
machine tapes to validate all of the transactions that occur
each day. Rather, the transactions are electronically
entered, stored, and recalled. It is also possible for tellers
to move from one teller station to another during peak
work periods, as each teller has an individual identifica­
tion code within the terminal system. One bank estimates
that electronic journaling added a 4- to 5-percent pro­
ductivity increase for tellers to the 20 percent already
gained from faster response to customer balance inquiry
and transactions posting.9
Teller-operated cash-dispensing machines. These
machines, a fairly recent addition to teller stations, are
boxes which contain currency (and sometimes travelers’
checks) in various denominations. Tellers use terminals
or special keyboards to dispense cash more rapidly than
by hand. These teller-operated machines keep track of
the amount of cash dispensed, thus eliminating the need
to recount the cash before giving it to customers—an ad­
ditional productivity gain for tellers.

Online terminals and other teller aids

Online terminals for bank tellers and administrative
personnel, teller-operated cash-dispensing machines at
teller stations, and other electronically operated equip­
ment have evolved from developments in computer and
2 National Operations/Automation Survey 1981, American Bankers
Association, 1981, p. 7.
3 William R. Synnott, “ Shock Talk: Prospects for the Next Round
o f Technological Leverage,” ABA Banking Journal, May 1983, p. 45.
4 National Operations/Automation Survey 1981, p. 7.
5 Ibid., p. 15.
6 “ Ten-Month Payback From Automating Big Deposits,” aba
Banking Journal, April 1982, p. 96.

7 William Friis, “ Electronic Journaling Helps Truncate Paper in
Branches,” ab a Banking Journal, January 1983, p. 82.
8 William Friis, “ A 20-Year Retrospective on Teller Terminals,”
ab a Banking Journal, April 1982, p. 76.
9 Ibid.


Online administrative (or "platform”) terminals. These
terminals are used by most banks that use online teller
terminals. Platform terminals carry out a variety of func­
tions for bank administrators—responding to customer
inquiries, resolving problems with checking account
reconciliations, changing names and addresses in
customer files, displaying listings of overdrawn or inac­
tive accounts, and other activities. Increasingly, online
terminals are being used to evaluate loan applications or
make investment recommendations. Online terminals im­
prove the speed with which bank personnel can get ac­
cess to customer records, which increases productivity and
improves service for customers.
Electronic funds transfer systems

Electronic funds transfer ( e f t ) procedures have gained
importance as banks have sought more efficient methods
to process a growing volume of transactions, primarily
checks. An estimated 40 billion checks were processed in
eft systems rely heavily on computer and communica­
tion technology as indicated by the definition provided

“ The common factor in these systems is that they
speed the transfer of funds by communicating in­
formation relating to payments by electronic means
rather than by use of paper instruments as is
predominant today. Thus, e f t systems are de­
signed to replace manual processes with electronic
data processing and to speed the flow of funds
through high speed data transmission.” 11
The major technologies used to transfer funds elec­
tronically include automatic teller machines, automated
clearing houses, wire funds transfer services, and pointof-sale terminals.

Customer carries out banking transactions on an automated teller

1971) perform a range of functions, which include dispen­
sing cash, verifying account balances, transferring funds
between accounts, and making payments of recurring
bills. ATM ’s reportedly can perform 90 percent of the
transaction functions provided at a teller’s window.13
Among the potential uses for ATM ’s are dispensing
travelers’ checks and money orders.
Despite mechanization, employment of bank tellers
has grown over the years to handle the increasing volume
of checks in the banking industry. Two industry surveys
indicate that the growing use of ATM's will reduce the de­
mand for tellers in the future. In one survey of 457 bank­
ing establishments, 44 percent of the respondents said that
ATM ’s either had already eliminated one or more human
tellers or would reduce the need for additional tellers in
the future.14
Another survey, covering 200 bank executives, focused
on projected changes in the number of bank branches
during 1983-88. About 19 percent of all fully staffed
branches are expected to close during this period. Those
branches that remain in service are expected to be staffed

Automatic teller machines. The number of automatic
teller machines ( a t m ’s) and cash dispensing machines is
expanding rapidly. There were an estimated 60,000 teller
machines in use by 1984, up from 1,935 in 1973.12 Since
these machines perform many routine functions of a bank
teller, their widespread use has implications for tellers and
operating procedures, and for bank customer services.
Teller machines activated by customer-inserted credit
cards and “ debit” cards (plastic bank cards, each with
a strip of magnetically coded information) were intro­
duced in the United States in 1969. Cash dispensing
machines (which account for about 1 percent of all teller
machines) perform only the single function of dispens­
ing cash. The more sophisticated a t m ’s (introduced in
10 Estimate provided by the Bank Administration Institute.
11 William C. Niblack, “ Development o f Electronic Funds Transfer
Systems,” Federal Reserve Bank o f St. Louis Review, September 1976,
p. 10.
12 Linda Fenner Zimmer, “ atm ’s 1983: A Critical Assessment,”
The Magazine o f Bank Administration, May 1984.

13 “ Virginia ATM Pioneer Is Still Innovative,” ABA Banking

Journal, June 1982, p. 72.
14 Linda Fenner Zimmer, “ atm Installations Surge,” The Magazine

o f Bank Administration, May 1980, pp. 30-31.


and then, unless both parties have accounts in the same
bank, is sent to the payer’s bank—often through another
bank or a clearing house designed to handle such trans­
actions. The estimated 40 billion checks that go through
the financial system each year require considerable time
and labor to process.
When payment is made using ACH, the process differs
markedly. With ACH, debit and credit items are electronic
signals, usually encoded on reels of computer-generated
magnetic tape. The tape contains the amount of various
payments; the names, bank numbers, and account
numbers of those receiving payments; and the names of
the parties making payments. It is this information that
is transmitted—not individual pieces of paper.
Automated clearing house operations have been in­
creasing in importance. The U.S. Government first made
extensive use of the system in the early 1970’s for U.S.
Treasury disbursement of Social Security payments,
Federal Government payrolls and benefits, and other
items. Local, private, automated clearing houses were
organized; and in 1976, a national ACH association was
formed. In 1976, 50 million ACH transactions took place,
92 percent of which originated with the U.S. Treasury.
The process has grown rapidly, especially for private
banking; of the 556.6 million transactions reported in
1984, private banking accounted for 61 percent.19
The impact of ACH upon labor requirements is dif­
ficult to determine precisely, since ACH uses the same
computer equipment that banks use for other electronic
data processing and fund transfer operations. Thus,
banks involved in ACH operations must allocate some
computer staff time to handling a c h data. As ACH opera­
tions grow, there may well be an increase in demand for
computer personnel.

by fewer employees, who will use automated equipment
extensively. ATM ’s were singled out as the most impor­
tant factor in this change, according to 58 percent of the
respondents. In-lobby a t m ’s and other customeroperated equipment are expected to reduce the number
of tellers by 17 percent.15
One advantage of a t m ’s is that they reduce the volume
of checks that enter into the bank’s operating systems—
checks that must be sorted, processed, and in many in­
stances returned to the customers. Reducing check
volume is very important to banks. About a decade ago,
the banking industry feared that its capacity to process
checks would be overwhelmed by the rapidly growing
volume of checks. However, faster, more sophisticated
check processing and sorting equipment has been in­
troduced which is capable of handling any foreseeable
volume of checks adequately. Nonetheless, a huge volume
of checks goes through the banking system each year,
representing a considerable cost to the industry. New
technology that can reduce this cost is welcome. The
extent to which a t m ’s reduce the use of checks is uncer­
tain, but they contribute to some decrease—possibly as
much as 7 percent in 1983.16
Banks of all sizes use teller machines: A 1981 survey
of over 800 banks reported that 14 percent of all small
banks, over one-half of medium-sized banks, and roughly
three-fourths of the large banks reported one or more
ATM ’s in use during 1980.17 Most teller machines were
located on a bank’s own premises; about 90 percent in
1979.18 Lobby locations proved unpopular—once inside
the bank, customers apparently prefer to deal with a
human teller. The most popular location is the outside
wall of a bank building, where they provide 24-hour
banking service to customers.
Acceptance of offsite a t m locations has been slower
among both banks and customers—but this is changing,
especially with the advent of a t m networks. As banks
fulfill their needs for onsite ATM ’s, they increasingly are
being installed offsite in shopping centers, supermarkets,
college campuses, hospitals, gas stations, and other loca­
tions convenient to the public.

Wire funds transfer services, e f t systems have been
developed to handle large dollar transactions between
banks. The Federal Reserve Board operates the largest
system — FedWire — which is used for large volume
interbank payments, such as the sale of reserve account
balances between banks and the transfer of large bank
and corporate balances. FedWire is also used to transfer
U.S. Treasury and Federal agency securities. FedWire
handled 38 million fund transfers with a value of $84
trillion, and 5.5 million security transfers valued at $35
trillion, in 1983.
There are two other large wire funds transfer systems:
The Clearing House Interbank Payments Systems (CHIPS)
is operated by the New York City Clearing House
Association, and handles most of the international
payments in the United States. In 1983, c h i p s processed
19 million transactions valued at $57 trillion. The Pay­
ment and Telecommunications Service Corporation

Automated clearing houses. Automated clearing houses
(ACH) carry out debit and credit transactions between
parties electronically. With electronic methods, transac­
tions are more rapid and less expensive than with paper
When payment is made by conventional check, for ex­
ample, the check is deposited in the receiving party’s bank
15 “ Survey Predicts 19% Fewer Branches by ‘88,” ABA Banking
Journal, August 1983, p. 108.
16 Linda Fenner Zimmer, The Status o f Retail Payment Systems in
the U.S., an address to the National atm Conference, Dec. 10, 1984,
p. 8.
17 National Operations/Automation Survey 1981, p. 15.
18 Linda Fenner Zimmer, “ atm Installations Surge,” p. 30.



Data provided by National Automated Clearinghouse Asso­

(Bankwire and Cash Wire) serves a network of about 180
member banks, providing funds transfers similar to FedWire, but at a slightly lower cost. Bankwire processed
1.8 million transactions, for a value of about $8 trillion,
in 1983.
Use of wire funds transfers is growing and may well
reduce the need for clerical workers. Prior to the use of
EFT technology, fund transfers were made in a series of
separate, nonautomated clerical operations. Individual
clerks would receive orders, verify accounts, and make
transactions. Using e f t technology, one clerk can take
an order by phone, enter the order in a CRT terminal, and
the computerized accounting systems handle the rest of
the operation. Industry experts believe that the number
of clerical people has already declined somewhat, and will
decline further—but there are no solid statistical data on
clerical employment in this area at present.

Processing bank checks

Despite substantial investment in new technology,
processing checks remains labor intensive. Tellers typi­
cally receive checks first, as part of customer deposits,
and send them to the proofing and encoding area in com­
mercial banks in bundles, usually accompanied by adding
machine tapes showing totals for each bundle of checks.
Proofing and encoding operations are the most laborintensive portions of check handling. Proofing machine
operators read the dollar amount of each check, use a
keyboard to enter these numbers into the proofing
machine, then insert the check into a slot in the proofing
machine, which prints (encodes) the dollar amount onto
the check in magnetic ink character recognition (MICR)
characters. Once the value of the check has been encoded
on the MICR line, along with the bank and individual ac­
count numbers, the check can be processed by machine.
Proofing and encoding checks will remain labor intensive,
since significant improvements in equipment are not an­
ticipated over the next few years.
Doing proofing and encoding is an entry level job.
Training is on the job and turnover is high. Output is
dependent upon operator skill and motivation, but an
operator typically handles between 1,300 and 2,000 checks
an hour.
After checks are encoded, they are sorted for return
to bank customers. High-speed sorting equipment reads
the m i c r lines on checks. Commercial banks with more
advanced equipment can electronically record the m i c r
data on tape, photocopy both sides of each check, and
sort the checks by a number of criteria—at a speed of
up to 100,000 checks an hour. Machines with this capacity
have been available since the mid-1970’s.
Sorting machine operators must meet higher skill re­
quirements than proofing and coding machine operators.
Training involves some classwork as well as on-the-job
training. People who succeed at this job often have the
potential to become computer operators. There is more
physical activity, less boredom, and lower turnover
associated with sorting machine work than with proof­
ing and coding operations.

Point-of-sale terminals. Establishing point-of-sale (POS)
networks requires cooperation between banks and retail
merchants. The merchants install computer-controlled
electronic checkout terminals that accept the debit cards
banks issue to their customers for automated teller
machines, or sometimes just for use in the POS terminals.
When customers make a purchase, they insert their debit
card into the merchant’s checkout terminal, push the
proper buttons on the terminal and in seconds, the
customer’s bank account is debited for the amount of the
purchase and the store’s account is credited for the
amount of the sale. The merchant’s checkout terminal
is linked to the bank’s computer system. If merchant and
customer use different banks, a central switching and
processing center handles transactions between the two
POS terminals reduce labor requirements of tellers.
When a merchant is paid by check, bank personnel have
to process that check. However, when the transaction is
carried out using a debit card and a POS terminal, manual
processing is eliminated.
Several POS terminal systems are in use around the
United States. These are all local systems involving
primarily supermarkets and gasoline stations.
Point-of-sale systems probably will continue to grow,
although the rate of growth is uncertain. Banks have the
computer and electronic capability, but retail merchants
have been relunctant to invest in electronic equipment.
Also consumers have resisted using debit cards, which re­
quire that terminals be manipulated and personal iden­
tification numbers be used, and which cause consumer
bank accounts to be debited immediately. (By one
estimate, for example, only 30 percent of eligible bank
customers use a t m ’s , the first step toward participation
in various electronic funds transactions).20

Output and Productivity

The BLS output index for commercial banks is based on
three major banking activities: Demand deposit transac­
tions; lending for commercial, consumer, and real estate
purposes; and activities related to trusts and estates.21
In aggregating these three measures to obtain an output index,
the labor requirement per unit o f each o f the major categories o f serv­
ice in a base period was used to combine dissimilar activities. For addi­
tional information on the methodology o f constructing the output in­
dex and a more detailed account of trends in output in commercial bank­
ing, see Horst Brand and John Duke, “ Productivity in Commercial
Banking: Computers Spur the Advance,” Monthly Labor Review,
December 1982, pp. 19-27.

20 Bill Streeter, “ EFT Is Back. This Time It May Stay,” ABA Bank­

ing Journal, September 1983, p. 135.


Technology is only one factor that determines produc­
tivity change in commercial banks. Changes in complex­
ity of banking tasks, in the skill of the work force, and
in the location of facilities and organization of work also
can be important factors that influence productivity
change. For example, the rapid spread of bank branches
over this period is considered by some experts to have
slowed productivity growth because more labor and other
inputs were required per unit of output at these locations,
compared to the main offices. Also, commercial banks
offer a number of new and more complex services, and
most industry people believe that employment would have
grown even more rapidly if the new, laborsaving equip­
ment had not become available.
The productivity record in commercial banks varied
considerably from year to year with economic conditions.
In each of the recession years of 1974 and 1980, for ex­
ample, productivity declined by over 6 percent when
output fell off as demand for commercial banking
services slowed and employee hours continued to move
higher, by 6.3 and 4.4 percent, respectively. In contrast,
productivity gains well above average occurred in years
with peak demand for banking services, such as 1973,
1976, 1977, and 1983, when output per employee hour
increased by more than 5 percent from the preceding year.
The growth in bank branch offices, a major change
in industry structure, has had an impact on productivity
and employment. The number of commercial bank of­
fices (main offices and branch offices) grew from 35,585
in 1970 to 55,960 in 1983—an increase of 57 percent. The
number of commercial banks grew by less than 10 per­
cent. But the number of branches rose rapidly—from
21,880 in 1970 to 40,913 in 1983—an increase of 87
Commercial banks began expanding their branches to
attract new deposits — often from competing banks. The
proportion of banks with branches increased from 29 per­
cent in 1970 to 47 percent of all commercial banks in 1983.
The growth in branch offices has increased banking
employment because each branch requires at least a small
staff. But this may have had a negative impact on pro­
ductivity: Industry observers are in agreement that
economies of scale have declined as a result of the growth
in branches. A branch banking system requires more
employee hours per unit of output than does a larger,
centralized bank.24

Output of commercial banks increased by an average
annual rate of 4.7 percent between 1970 and 1983.22
However, the rate of increase slowed significantly within
this period: During 1970-73, for example, output in­
creased at a high average annual rate of 8.7 percent,
slowed to an annual rate of 5.4 percent for the middle
period 1973-78, and to a lower 2.6-percent annual rate
during 1978-83. Between 1970 and 1983, output gains
were achieved in 11 of 13 years; declines were recorded
only in 1974 and 1980 (chart 10).
Demand and time deposits grew steadily between 1970
and 1980, dropping slightly in 1981, then growing through
1983. Strong growth in demand deposits, especially dur­
ing the late 1960’s and early 1970’s, spurred the develop­
ment of e f t and other new technologies. Expansion of
financial transactions, such as stock transfers and com­
modity futures contracts, have increased the number of
fund transfers that go through the banking system.
Growth in time deposits held by commercial banks has
been even more rapid than in demand deposits.
The volume of bank loans is strongly affected by the
general level of economic activity. Between 1970 and
1981, the overall loan index declined in 1974, 1975, 1979,
and 1980—and rose in the other years. Commercial and
credit card loans grew fairly steadily from 1972 through
1979, declined in 1980, and increased slightly each year
through 1983. Consumer loans declined from 1978
through 1980, then increased through 1983. Real estate
loans, sensitive to mortgage interest rates, dropped
sharply between 1978 and 1980, but rose again in 1981,
and grew strongly in 1982 and 1983.
Trust services have been the most stable portion of
commercial banking output, following a generally up­
ward pattern, but leveling out in 1983. Increases in the
number of employee benefit accounts and pension plans
have contributed to expanded trust services.

Productivity in commercial banking rose only slightly
during 1970-83—a period of expansion in bank facilities
and services. Over these years, the b l s index of output
per employee hour increased at an average annual rate
of only 0.8 percent. Although output of commercial
banks rose at a more robust annual rate of 4.7 percent
over this period as the economy moved to higher levels,
the productivity gain was slight because employee hours
also rose at a relatively brisk annual rate of 3.9 percent.
Employee hours gained sharply, despite substantial in­
vestment by banks for computers, ATM’s, and the other
technologies that lower labor requirements of tellers and
other bank staff. In 1982 and 1983, however, output in­
creased sharply—by 4.5 percent in 1982 and 9.6 percent
in 1983. In contrast, employee hours rose only slightly
(1.6 percent) in 1982 and fell (0.6 percent) in 1983.

Employment and Occupational Trends

Employment in commercial banks rose steadily over
the past decade as demand for a growing array of bank­
ing services increased (chart 11). In 1984, commercial

Latest year available for bls output and productivity measures
in commercial banking.


23 Federal Deposit Insurance Corporation (fdic) data.
24 “ Productivity in Commercial Banking,” pp. 19 and 25.

Chart 10. Output per employee hour and related data, commercial banking, 1970-83
(Index, 1977 = 100)



■ 80
■ 50




■ 90








-] 130





Source: Bureau of Labor S tatistics.












Chart 11. Employment in commercial banking, 1970-84, and projections, 1984-95
Employees (thousands)

Employees (thousands)








1Least squares trends method for historical data, compound interest method for projections.
2See footnote 25 in text.
3Data for nonsupervisory workers are not available for years prior to 1972.
Source: Bureau of Labor Statistics.

banks employed 1,520,000 workers—570,800 more than
in 1970. The average annual growth rate over this period
was 3.7 percent. The outlook through 1995 is for employ­
ment in commercial banks to move slightly higher, at a
much lower rate of growth. According to the moderate
BLS projection, employment in commercial banks may
total about 1.7 million in 1995, an annual growth rate
of 0.9 percent.25
The composition of employment in commercial bank25 bls projections for industry employment in 1995 are based on
three alternative versions o f economic growth. For details on assump­
tions and methodology used to develop these projections, see Monthly
Labor Review, November 1985.


ing has changed over the past decade. The number of
nonsupervisory workers grew from 823,300 in 197226 to
apeak of 1,126,200 in 1981, then fell to 1,119,800 in 1984.
Much of this decline is attributed to the increased use of
computers, terminals, and EFT operations. In 1972, non­
supervisory workers accounted for 80 percent of the work
force; by 1984, however, they constituted slightly less than
74 percent of employment. The proportion of nonsuper­
visory workers will probably continue to decline, but the
number of people employed is expected to increase until
1995, as demand for banking services continues to rise.
Data on employment o f nonsupervisory workers are not available
for years prior to 1972.

the coming decade, commercial banks are expected to
continue their longstanding commitment to employee
training. Both new employees and those presently
employed will need training to use new equipment and
procedures. Layoffs and other possible adverse effects
of new technology are not expected, and employment in
all major occupational groups is expected to rise.
Training programs in the banking industry vary from
informal on-the-job training for entry level positions to
academic programs at colleges, universities, and the
American Institute of Banking. Most training related to
the introduction of new technology is handled by pro­
grams within each bank. These training programs typi­
cally involve classroom work and on-the-job training.
Role playing is often used for positions that involve
meeting customers—such as tellers and loan officers.
Video training programs have been developed to assist
in classroom training for a range of positions. Prepack­
aged video training programs are available, or banks can
use the equipment to develop their own programs.
Regional networks of banks have pooled their resources
and established central libraries of training tapes cover­
ing a number of jobs and situations.
New banking technology has had a significant impact
on bank tellers, the largest occupation in the industry.
Banks have long had training programs for new tellers.
Teller training programs typically extend from 2 to 4
weeks, and involve a combination of classroom work (in­
cluding video training programs), role playing, and obser­
vation of actual banking operations. The introduction of
new equipment, such as online video terminal networks,
has modified training programs for new tellers and
necessitated some retraining for tellers already at work.
In response to the growth in a t m use, some banks are
redefining teller duties, anticipating that tellers will spend
less time taking deposits and cashing checks and will
spend more time informing customers of various bank­
ing services, helping them decide which services are most
useful, and directing them to the proper bank staff per­
sonnel for further information.
Relatively few employees in commercial banks are
affiliated with unions; consequently, the extent and type
of training and other work force adjustments are rarely
spelled out in formal collective bargaining contracts. Data
on union membership in commercial banks are not
available. However, in the broader financial industry
which involves all banking, credit agencies, and security
and commodity services, less than 3 percent of all wage
and salary workers were represented by labor organiza­
tions in 1980.28

Commercial banks are a major employer of women,
who staff about 7 out of every 10 positions. In 1984, the
number of women in the industry totaled 1,092,100, com­
pared to 659,400 in 1972.27 Moreover, women make up
a steadily larger share of the industry work force,
accounting for almost 72 percent of employment in 1984,
compared to 64 percent in 1972.

Very little change is expected in the occupational struc­
ture of commercial banking by 1995. BLS occupational
projections indicate that employment in most occupations
is expected to grow, even though the rate of growth for
some occupations will be below the industry average so
that they will be less important by 1995 than they are now.
Managerial occupations, along with a number of
related professional and technical occupations, should
grow more rapidly than the industry average. Managers
are expected to grow by more than 22 percent. All
computer-related occupations also are expected to in­
crease sharply: Systems analysts and programmers by 38
percent; and computer and peripheral equipment
operators by 23 percent. But all of the computer-related
jobs will account for only 3 percent of banking employ­
ment in 1995—up only slightly over their share in 1984.
There are a number of different clerical occupations
in commercial banking. Combined, they constitute the
largest occupational group in the industry. While the
number of people in clerical occupations is expected to
increase by 1995, they will account for a smaller portion
of industry employment than at present. Clerks involved
with financial records processing should grow by about
8 percent. Information clerks (new accounts, general in­
formation, travellers’ check issuance, etc.) will grow a
little faster, maintaining their present share of employ­
ment. The number of file clerks is expected to decline
slightly over the period. Growing use of electronic data
processing in commercial banks is probably the major
reason that employment in clerical operations is not ex­
pected to keep up with growth in other occupations.
Bank tellers, one of several clerical occupations, are
the largest single occupation in commerical banking (ac­
counting for almost 23 percent of total employment).
Employment for tellers is expected to grow by 1995, but
by less than 3 percent as the banking industry makes
greater use of automated bank branches and automatic
teller machines.
Adjustment of workers to technological change

As new technologies are used more extensively over

Earnings and Other Characteristics o f Organized Workers, May
1980. Bureau o f Labor Statistics, Bulletin 2105, September 1981,

27 Data on employment o f women are not available for years prior
to 1972.

pp. 15, 17.


“ Roundtable o f Experts Ponders Payment Systems o f the Future,”
a b a B anking Journal, September 1981, pp. 48 and following.

Brand, Horst and John Duke. “ Productivity in Commercial Bank­
ing: Computers Spur the Advance,” M o n th ly L a b o r R eview ,
December 1982, pp. 19-27.

Streeter, Bill, “ eft I s Back. This Time It May Stay,”
Journal, September 1983, pp. 130 and following.

Fenner Zimmer, Linda, “ atm Installations Surge,” The M agazin e o f
B ank A d m in istra tio n , May 1980, pp. 29-33.

“ Survey Predicts 19% Fewer Branches by ‘88,”
August 1983, pp. 108, 110.

Fenner Zimmer, Linda, “ atm ’s 1983: A Critical Assessment,” The
M agazin e o f B a n k A d m in istra tio n , May 1984.
Fenner Zimmer, Linda. The S tatu s o f R eta il P aym en ts S ystem s in th e
U .S ., address to The National atm Conference, Dec. 10, 1984.
Friis, William. “ A 20-Year Retrospective on Teller Terminals,”
B anking Journal, April 1982, pp. 71 and following.



B anking

B anking Journal,

Synnott, William R. “ Shock Talk: Prospects for the Next Round o f
Technological L everage,” a b a B ankin g Journal, May 1983, pp. 45
and following.


“ Ten-Month Payback From Automating Big Deposits,”
Journal, April 1982, p. 96.

Friis, William. “ Electronic Journaling Helps Truncate Paper in
Branches,” a b a B anking Journal, January 1983, pp. 82 and



U.S. Department o f Labor, Bureau o f Labor Statistics. E arnings a n d
O th er C haracteristics o f O rganized L abor, M a y 1980, Bulletin 2105,
September 1981.

N a tio n a l O peration s /A u to m a tio n S u rvey 1981, American Banking

Association, 1981, 142 pp.
Niblack, William C. “ Development o f Electronic Funds Transfer
Systems,” F ederal R eserve B an k o f St. L ou is R eview , September
1976, pp. 10-13, 16-18.

“ Virginia atm Pioneer Is Still Innovative,”
1982, p. 72.



Banking Journal, June

Other BLS Publications
on Technological Change

current and potential impact on productivity, employ­
ment, and occupations.

Bulletins still in print may be purchased from the
Superintendent of Documents, Washington, D.C. 20402,
or from the Bureau of Labor Statistics, Publications Sales
Center, P.O. Box 2145, Chicago, 111. 60690. Out-of-print
publications are available at many public and school
libraries and at Government depository libraries. Publica­
tions marked with an asterisk (*) also are available on
microfiche and in paper copy from the National Technical
Information Service, U.S. Department of Commerce,
5285 Port Royal Road, Springfield, Va. 22161.

Technology, Productivity, and Labor in the Bituminous
Coal Industry, 1950-79* (Bulletin 2072, 1981), 69 pp. Out
of print.
Chartbook with tables and text; appraises some of the
major structural and technological changes in the
bituminous coal industry and their impact on labor.
Technology and Labor in Five Industries* (Bulletin 2033,
1979), 50 pp. Out of print.
Appraises major technological changes emerging in
bakery products, concrete, air transportation, telephone
communication, and insurance, and discusses their cur­
rent and potential impact on productivity, employment,
and occupations.

The Impact o f Technology on Labor in Four Industries
(Bulletin 2228, 1985), 49 pp. Price $2.25.
Appraises major technological changes emerging in
textiles, paper and paperboard, steel, and motor vehicles,
and discusses their current and potential impact on pro­
ductivity, employment, and occupations.

Technological Change and Its Labor Impact in Five
Energy Industries* (Bulletin 2005, 1979), 64 pp. Out of
Appraises major technological changes emerging in
coal mining, oil and gas extraction, petroleum refining,
petroleum pipeline transportation, and electric and gas
utilities, and discusses their current and potential impact
on productivity, employment, and occupations.

Technological Change and Its Labor Impact in Four In­
dustries (Bulletin 2182, 1984), 44 pp. Price $2.
Appraises major technological changes emerging in
hosiery, folding paperboard boxes, metal cans, and laun­
dry and cleaning, and discusses their current and poten­
tial impact on productivity, em ploym ent, and

Technological Change and Its Labor Impact in Five
Industries* (Bulletin 1961, 1977), 56 pp. Out of print.
Appraises major technological changes emerging in ap­
parel, footwear, motor vehicles, railroads, and retail
trade, and discusses their current and potential impact
on productivity, employment, and occupations.

The Impact o f Technology on Labor in Five Industries
(Bulletin 2137, 1982), 60 pp. Price $5.
Appraises major technological changes emerging in
printing and publishing, water transportation, copper ore
mining, fabricated structural metal, and intercity truck­
ing, and discusses their current and potential impact on
productivity, employment, and occupations.

Technological Change and Manpower Trends in Five
Industries* (Bulletin 1856, 1975), 58 pp. Out of print.
Appraises major technological changes emerging in
pulp and paper, hydraulic cement, steel, aircraft and
missiles, and wholesale trade, and discusses their current
and potential impact on productivity, employment, and

Technology and Labor in Four Industries* (Bulletin 2104,
1982), 46 pp. Out of print.
Appraises major technological changes emerging in
meat products, foundries, metalworking machinery, and
electrical and electronic equipment and discusses their

irU.S. GOVERNMENT PRINTING OFFICE: 1986 — 491-543/54341


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