Manufacturing and war: Lessons from WW II
‘In a war, you cannot throw Power Points or pdfs at your enemy.’ The commentator Gray Connolly recently said something to this effect. It was in response to blithe comparisons of the size of the Russian economy with the combined Spanish and Portuguese economies. In a war a country’s manufacturing capability matters and much of services revenue may not be directly useful. This was shown recently in the conflict between Russia and Ukraine where Russia has often made more war material than all of the North Atlantic Treaty Organisation (NATO) put together. This lesson should never have been forgotten by Americans. The United States outproduced Germany, Japan and Italy combined by the end of second World War. This, when they had very low capacity to build war related material when the war began. What they did have was a very strong manufacturing base. Time to revisit this bit of history.
Most of the facts and stories in this post are from the book Freedom’s Forge by Arthur Herman. I intersperse them with my own observations and comments. Let us begin with a look at how much demand a war puts on manufacturing.
Moving from peacetime to war footing
The phrase ‘war footing’ is sometimes used casually. It shouldn’t be. The numbers out of the US show why. In 1939, the US army had 325 tanks. Over the period of the war, the US produced 86,000! That is more than 250 x. This is war footing. If all the ‘Flying Fortress’ bombers (12,731) were laid from wing tip to wing tip they would cover the distance from Washington DC to New York City! And this was not the only plane built. This is ‘war footing.’
Before the war, aircraft manufacturing companies were producing around 90 planes a month. President Rossevelt announced that the country would produce 50,000 planes a year. Hitler was not impressed. “What is America but beauty queens, millionaires, stupid records, and Hollywood?” he asked. By the end of the war, he had his answer.
The requirement for munitions during peace is a small fraction of the requirement during war. After all, no one is destroying your tanks or downing your planes in peacetime. The challenge for any country is that it cannot set up and maintain factories that produce such large quantities of munitions. The United States of 1939 had an additional challenge. The country was in one of its periodic isolationist phases.
After the first World War, there were allegations that business and financial interests had influenced the participation of the US in the first World War and benefited from it. In the mid 1930s, the US had set up a committee to investigate these allegations. The committee, known as Nye committee, drew connections between the participation of the country in the war with the profits made by the munitions industry and banks. Naturally, there were a lot of negative feelings about the arms industry. People believed that businesses in the US had profited from both sides in wars. Phrases such as “Merchants of death” (Maut ke saudagar in Hindi) were used. More concretely, the US passed many “Neutrality Acts” in the 1930s. These acts prevented US companies from selling munitions to all participants in a war. The generally anti war sentiment as well as the ‘Great Depression’ which had begun in 1929 meant that the conditions of the munitions industry in the country was worse than normal.
As the chances of the United States’ participation in war increased, the President Franklin D Roosevelt (FDR), constituted a National Defence Advisory Commission. This commission was to advise him on how the US could meet the expected high demand for munitions. One of the key members of this commission was Bill Knudsen. Knudsen was the President at General Motors at the time. He had spent most of his life contributing to the mass manufacturing revolution, first in Ford and then in General Motors. Knudsen recognised that the required numbers could be made mainly by specialised manufacturing companies and not just by munitions companies.
If Ford and General Motors and Chrysler could make cars in large numbers, why couldn’t they make tanks, he asked?
Can I see a tank before I build them?
In 1940, the British approached the United States to make tanks. The British said that they would need a thousand a month. The army officers were stunned because at that time one company — American Car and Foundry — was barely making thirteen a month. This was when the US army itself wanted another 1,000 a month.To get anywhere close to these numbers, not only a new facility, but also a new way of making tanks would be needed. Knudsen approached the automobile industry. Chrysler agreed to build the tanks even though the Chief Engineer for Chrysler had never seen one in action.
The Chrysler management decided to rely on the army blueprints for making the M3. However, they soon realised that this was not necessarily a good strategy. The army’s design had not taken the progress made by the automobile industry into account. For example, the army design used springs that had been abandoned by the automotive industry a long time ago. Another example was that the tanks were supposed to use air cooled engines which did not work well in hot weather. One of the biggest problems was the use of rivets. The army wanted steel plates to be joined together by rivets. Riveting many thick plates together raised the cost a lot. But the army thought that the alternative — welding — would not be able to handle the rough handling that a tank endured. Eventually Chrysler was able to convince the army. It turned out that not only was welding cheaper but also it was safer. Dislodged rivets played havoc inside a tank.
Another similar example came from the Great Lakes area of the country. The Manitowoc Shipbuilding Company made small cargo vessels. It was approached to make submarines. Here is Arthur Herman,
“It made small cargo vessels for the carrying trade on the Great Lakes when in mid-1942 Electric Boat of Groton came to them with a proposition. Let us use your yards and facilities and laborers, they said, and our engineers, foremen and production managers will train them to make submarines. The Manitowoc men were startled but game to try. Before, two years were out, twenty-eight Navy submarines would be launched from Manitowoc.”
The shipping company made twenty-eight submarines in less than two years! This theme would play out over and over again in the war years. Manufacturers would make products very different from what they had been building. Many times they would modify the product and make it better and cheaper.
How could companies that made cars and boats make tanks and submarines? How could they train their workers so quickly? To answer these questions, let us understand what mass manufacturing is.
What is mass manufacturing?
Bill Knudsen had been the director of wartime production for Ford in World War I. His insight from the time was critical. Herman reports,
“…the process of mass-producing war material was no different than mass-producing anything else. Once you broke it down to as many interchangeable parts as possible, and arranged for the parts to come together in a continuous assembly line, you could make as many of what was needed, as quickly as needed, and as fast as anyone demanded — all the while driving the cost down the more you produced.”
In this system the initial setup may take time but then the output rises exponentially.
“In the first year after a production order, output was bound to triple; in the second, it would jump by a factor of seven,; at the end of the third year, the only limit on output were material and labor — whether it was trucks or artillery pieces or bombs or planes.”
Note that the limits on output were material and labor. Not skilled labor. The practice of working with relatively unskilled labour was started by Henry Ford and others much before the second World War.
Send us your naive and unskilled
Henry Ford introduced the system of mass manufacturing to the automobile industry. In this system, every component of the final product was made with a very high level of precision. Often an individual worker would make the same part over and over again with the help of machine tools. Parts would be assembled by different workers into sub-assemblies and eventually the final products.
In this system, unskilled workers were not a bug but almost a feature. One of the promises of mass manufacturing is that more can be done with workers who have lesser skill. In his book Behemoth, Joshua B. Freeman has this to say about mass manufacturing in automobiles ushered in by Henry Ford,
“Specialized machines also were a strategy to deal with severe shortages, high wages and union orientation of skilled workers in Detroit as the automobile industry took off.”
He dives in further,
“Ford engineers called their jigs and fixtures “farmers’ tools,” since they allowed the new workers to produce high quality parts, lessening the need for skilled machinists and their craft culture. (preferring workers with no craft background had a long history among American manufacturers; arms maker Samuel Colt once said “the more ignorant a man was, the more brains he has for my purpose.”).
“Speed, dexterity, and endurance, not knowledge and skill, were the attributes needed for assembly-line work.”
What could this system achieve? For one, it could build engines that were as good as those built by Rolls Royce.
As smooth as a Rolls Royce
Hitler had taken over France. Britain feared it was next and the Royal Air Force fought a bloody war in the skies with the German Luftwaffe. To make up for losses, British factories were producing sixteen hundred planes a month. However, there was no capacity to produce the Merlin engines of Rolls-Royce which many planes used. The British came to Knudsen who in turn approached the Packard Motor Car Company to make these engines. Packard got the plans for the engines from the Brits but discovered that they had to rewrite them. Arthur Herman says,
“They not only had to be translated from English to American measurements, but made exact enough to fit the mathematical tolerance level the auto industry demanded for mass production — one thousandth of an inch.”
Also,
“The difference was that whereas the English Merlin was still made by hand, with workmen still shaping every part to fit each particular motor, Packard’s mass-production approach allowed relatively unskilled labor to do the same job three times faster. Indeed, one-third of Packard’s new employees were women who had never set foot on a factory floor.”
During the war Packard would build 55,000 engines. The Packard made engine was as reliable and resilient as the British made one.
This kind of story was repeated all around the country and the demand for munitions sucked in all kinds of people as factory workers. Here is Arthur Herman,
“School-teachers, salesmen, clerks, hairdressers, bank tellers, and housewives became skilled aviation workers, learning to cut aluminium sheets, lay out electric cable, or buck and rivet for ten hours a stretch.”
Many women joined the factory workforce. One of them was Mrs. Longstreet, who joined the workforce when she was eighty. Another woman worker, who became very famous later, was Norma Jean Dougherty. The army used her photo in many recruitment ads because she was good looking. After the war, she dyed her hair and changed her name to Marlyn Monore and went on to become a famous actor.
How was it possible to make complex machinery like aircraft engines with totally inexperienced workers?
Product and process designers and tool makers
For unskilled people to be able to perform prodigious feats of production, very skilled people had to design the factories and the process for making the munitions. And then perhaps even more skilled people had to make the machines that made machines. Also, the unskilled labour had to be taught basic skills by experienced skilled hands. America had all three sets of people.
One thing that kept jumping out while reading Freedom’s Forge is how many capable people staffed the senior levels of American manufacturing. People who had the experience of designing and running many factories and products. Oftentimes these people had begun as workers and understood the manufacturing process deeply.
William Knudsen was an immigrant from Denmark. He had pushed carts as a six year old. He then co-built the first tandem bike in the country. When he migrated to the US, he “…found work reaming holes in steel plates for Navy torpedo boats for seventeen and a half cents a day..”. He was a big part of Ford’s mass manufacturing revolution. He had developed most of Ford’s twenty-eight branch factories. Knudsen ended up being in charge of America’s war manufacturing effort and then a Lieutenant General in the army. He was not the only one with such a background.
Jesse Vincent was the Chief Engineer of Packard when it made the Merlin engines. A farmer’s son, Jesse quit school in eighth grade. He learned mechanical engineering through a correspondence school. He was not just someone who could design a good production line, he had many technological breakthroughs to his credit including
“First four-wheel brakes, the first air conditioning, the first power booster brakes and the first independently manufactured automatic transmission…”
There were many such people in the US manufacturing industry. People who really understood machines. From design to the last detail of production. There were also excellent architects who were able to design and build factories at astonishing speeds.
In these factories, they needed machines that made machines. Machine Tools in other words. Here is Herman describing Machine Tools,
“They can drill; they can bore; they can …They can take steel, cast iron, brass and aluminium and mill, grind and shear and press them into parts..”
Also,
“The machine tool makers were its elite, its master sergeants — …One admirer dubbed them the “Master builders of the Industrial Revolution”
In 1940, there were around 200 machine tool makers in the US. Knudsen went to see Fred Grier, the president of Cincinnati Milling Machine and the president of Machine Tool Builders’ association. Bill Knudsen told him that he wanted production of machine tools in America to double, redouble and redouble again — all inside a year. The machine tools industry delivered and this was foundational in the jump in numbers seen across the country.
Incidentally, the Machine Tools industry in the US is now decimated. This has been given as a reason by army spokespersons for the inability of the US to meet requirements of Ukraine for artillery shells. Earlier, Tim Cook, the Apple CEO, has compared the tooling capabilities of China and the US.
“In the US, you could have a meeting of tooling engineers, and I’m not sure we could fill the room.” In China, however, “you could fill multiple football fields….”
In WWII, the US had a lot of expertise. On the back of such expertise, even entrepreneurs who had no previous experience of manufacturing took on big contracts. What is really interesting is that these new entrepreneurs and workers totally changed how manufacturing is done. One of the most striking cases is that of Henry Kaiser and Liberty ships.
War is the mother of necessity
Britain depended on imports for lots of its raw material and food. Knowing this, Germany attacked its merchant shipping with submarines (in the first world war, the Royal Navy had successfully blockaded Germany, causing severe food shortages). German U Boats would wait outside the US East coast ports and sink ships that came out. Even as the losses mounted, the demand for these ships increased. This is because Britain needed extra munitions that came mainly from the US. Once the US joined the war, merchant shipping capacity was needed not just to supply Britain but also to supply its own forces in the Pacific and elsewhere. There was no way that the traditional shipbuilding industry could meet this demand. The answer? Liberty ships.
Everything about the Liberty ship was standardised. Not only were all the parts for the six hundred or so of the subcontractors standardised, the yards to build the ships were standardised too. The engine was to be an old and heavy reciprocating engine — E-2. Not because it was a great engine — there were many better. But because this engine could be made easily by many companies. The ship was made with as many straight lines as possible so that it could be welded which took less time than riveting. The biggest Liberty ship makers were Henry Kaiser and his associates.
Kaiser, a contractor most famous for constructing the Hoover dam, jumped at this opportunity. Over the period of a year, he and his associate companies set up shipbuilding facilities all over the country. These facilities ramped up sharply. In summer of 1941, the Richmond shipyard employed 4,000 people. By the end of 1942 the number had increased to 80,000 and a year later 1,00,000. However, the real ramp up was in the speed of shipbuilding.
The first ship that the group built took 253 days. By the tenth ship they were down to 154 days. Continuous process improvements took this number to below 100 days. Then someone thought of prefabrication.
The challenge in building ships was that they were made sequentially. First the outer structure would be made, then the inner structure and then all the fittings would be put in. The sequential nature limited how much the ship building time could be reduced. Why not build things in parallel? One reason was that the structures inside the main hull were very heavy. Take deckhouses. They were made of slabs of steel, the heaviest of which would be 72 tons and the lightest 45. When the shipyards finally started pre fabricating these, the completed deckhouse had to be lifted by four cranes together and put into the hull! Soon more and more parts of the ships started being prefabricated.
Henry Kaiser encouraged a competition between his son, Edgar Kaiser, and Clay Bradford — a Kaiser executive and an almost son — to reduce the build time. Soon it came down to the 80s and then to below 50 and then soon to less than 20. Then, Edgar Kaiser’s shipyard built the ship Joseph Teal in 10 days! President Rossevelt himself came to the shipyard to launch it. A little while later, Clay Bradoford’s shipyard made a complete ship in 5 days! Of course, the build time was not actually 5 days. These times were achieved by a lot of prefabrication and by ensuring that the shipyards had a large inventory of all the parts they needed. But that was the point. Debottlenecking means reducing the time for the critical bottleneck.
Mass manufacturing totally changed the way ships were built. And that changed the war. Winston Churchill said this about the Liberty Ships,
“The foundation of all our hopes and schemes was the immense shipbuilding program of the United States.”
Necessity spurred innovation in logistics too. For example, General Motors (GM) discovered that “eight Liberty ships could carry the same number of two-and-a-half ton trucks disassembled as one hundred could carry fully assembled.” So, they started sites for assembly in all kinds of unusual places. The first two assembly plants were set up in Tunisia. To supply Russia with these trucks, GM set up a plant at the northern end of the Persian Gulf. For labour “GM trained five thousand Iranians in the mass-production methods of Detroit, so that they could put together a complete truck in less than thirty minutes.”
The stories I have mentioned may give the impression that manufacturing munitions was like turning on a switch. Of course, it was not so. There were great difficulties and the story of Ford and B-24 illustrates some of these difficulties very well.
B-24 and Willow Run
The bomber plane was made by Consolidated Aircraft, a conventional aircraft manufacturing company. The company thought that they could ramp up their production to one plane a day. That was not going to be enough. Ford was approached to help them with parts. However, an executive in the company thought that they could make the whole plane and that too much faster.
Ford and the government of the US invested money to make a humongous factory at Willow Run, near Detroit. The project ran into severe trouble right from the beginning. Ford underestimated the complexity of making a plane. Herman writes,
“A car demanded 15,000 parts; a B-24 almost half a million, plus 300,000 rivets in five hundred different sizes.”
Additionally, it was very difficult to get workers at Willow Run. Ford could get only 15,000 by the end of May. Part of the problem was that there was a demand for workers all around the country. But there were site specific problems too. The Willow Run site was too far from the town and the road to it was bad. There was no place for workers to live and those who came lived in trailers and tents.
Ford also made early mistakes because it did not know too much about plane production. For example, the aircraft manufacturers of the time made their molds from rubber and soft metal alloys. Ford engineers scoffed at this. They argued that such dies would not last and hence were not suitable for mass production. However, when they used steel dies, they found that those damaged soft Aluminium parts and more and more parts had to be remade. Then there was the challenge that the design of the aircraft kept changing constantly.
When Ford asked Consolidated for the blueprints of the plant, they were informed that “there weren’t any — certainly not any complete set.” On top of that the design of the aircraft kept evolving. This was partly because the Air Force command demanded changes based on battlefield conditions. Partly it was because the designers kept discovering ways to improve performance. In the first year, “the Air Force ordered 575 master changes alone”. Their “attitude was that learning from battlefield experience was what warplanes are all about.” and that those changes could literally be the difference between life and death. The Air Force was right in its demands for changes but it played havoc with manufacturing. The challenge was overcome with a big change in how the planes were made.
Knudsen decided that the specs for the production at the Ford factory would be frozen. The planes made in the factory would then be modified at another place especially equipped to do so. As the existing aircraft manufacturers were already very busy, it was the airlines that stepped in. The personnel and material of the airlines were used at twelve different modification centers. All the changes worked and B-24 began to be produced in large numbers.
The first completed B-24 came out in September 1942. In January 1943, 74 came out. By October, 300 planes were coming off the line in Willow Run. By 1944, 500 planes were being built every month. The plane used to require two hundred thousand man-hours to make. Ford bought it down to eighteen thousand hours.
One of Kaiser’s associated companies, Bechtel-McCone, also opened a modification centre. In this center, the B-24 was modified to B-24 VLR (Very Long Range). This B-24 was instrumental in closing the so-called Atlantic Gap. In this wide stretch South East of Iceland, German U boats attacked Allied shipping. No bomber could patrol this wide gap until the B-24 VLR came along. The long range of the VLR and its ability to carry huge payloads meant that the German U boats were shut out of this area. In the first twenty days of March, the Germans sank ninety-seven Allied merchant ships. In the last ten days, this was reduced to one.
Ford managed to mass produce the B-24 before the war ended. The stresses involved in getting the production process started had a very high cost though. Herman says
“The constant tensions over the Willow Run almost certainly contributed to Henry Ford’s son Edsel’s health problems. He died in March 1943.”
Edsel was not the only one to die. In 1942–43 the death of American workers in war related industries was twenty times greater than that of American servicemen killed or wounded during the same years. Of course, the period is before the American troops landed in Europe but this statistic is still startling. Blue collar workers were not the only ones.
“One hundred and eight-nine senior GM officials died on the job during those five years of intense mobilization and activity. The obituary pages of the American Machinist in those years show the names of one corporate executive after another who “died unexpectedly of a heart attack’ or was cut down “after a brief illness.””
These costs also paid for astonishing successes. Entrepreneurs, sometimes with no experience in manufacturing, were able to produce munitions in very large numbers. They improved the design of these munitions and also how they were made. What did they have going for them?
What do business leaders want?
Over the last ten years, I have had long conversations with business leaders all across India. In these conversations, I ask the question, ‘Why can’t you grow faster?’ and then I listen. Oftentimes these conversations go on for two hours. Almost every business leader ends up talking about demand most of the time. They would grow, they say, if there is a demand for their product and if the price they are getting is more than the cost. When they talk about costs, they talk a lot about the cost of debt. Issues like skills of workers or ‘regulatory cholesterol’ are way smaller concerns than demand and cost of capital.
The manufacturers in the US did not have to either worry about demand or about funding. Very early in the war, Knudsen persuaded the President of the United States to do away with competitive bidding in the procurement process. The contracts were cost plus and the US poured a lot of money into these. In the war period 100 Billion Dollar worth of contracts were signed. As a reference of the level where it started, in 1940, FDR had to send an urgent message to the Congress to increase the appropriation for the army from 24 Million Dollars to 700 Million! Many times, hefty advance payments were made to the producers. It was relatively easy for entrepreneurs to get funding on the basis of these contracts. Additionally, the government itself invested in many of the projects.
Of course, I am not suggesting that governments should get rid of competitive bidding. After all, many people attribute the rise of the Military Industrial Complex to the cost plus bidding that began in WWII. However, it is still instructive to see what entrepreneurs can achieve when their biggest concerns — demand and cost of funding — are taken care of.
These entrepreneurs, though, definitely need many subcontractors to do the actual work.
A web of subcontractors
General Motors (GM) was responsible for 10% of the war production. However, a lot of the work was done by its nearly 20,000 subcontractors. These subcontractors included a tool company that had three employees and operated from the garage of the owner. It also included companies like Timken which had branches in many cities and made everything from machine tools to axles.
The relationships between these subcontractors could be quite complex. As Herman writes,
“When, for example, General Motors subcontractor Yellow Truck and Coach Company was under the contract to the Timken-Detroit Axle Company, at the same time Timken was under contract to Yellow, because Yellow also made an essential component that Timken needed to make the axles it sent back to Yellow to make the wheel assemblies, which it then forwarded on to a General Motors plant to complete a military truck.”
Why such complex relationships? The short answer is evolution. Markets are a mechanism for taking on all the complexity of raw material availability and prices, technical competence, managerial competence, labour availability and competence, distances and many other factors and coming up with solutions of bewildering complexity. This web cannot be willed into existence by a government, as the experience of the Soviet Union has shown us.
It takes an ecosystem to raise a well equipped army
The current Vice President of the United States recently tweeted this.
The current US administration is trying to rebuild its manufacturing capabilities and national security is one of the stated reasons for doing so. This rebuilding would require building a manufacturing ecosystem.
What is a manufacturing ecosystem? It is large companies that have expertise in manufacturing. It is experienced engineers and architects who can design new factories. It is machine tool companies that can equip these factories. It is skilled workers who can train others. It is also a web of hundreds of thousands of small and medium sized companies that work as suppliers to large companies.
Now specialised companies may be needed to produce high end weapons like today’s fighter planes. But, the ecosystem would provide the artillery tubes and shells, the drones, the medicines and the million others things a country would need.
If your country has such an ecosystem,you can hope to put up a fight. If not, you have to hope that your friends supply you with the required material. What happens if you do not have the capability, and if your friends stop supporting you?
You would have to throw ppts at your enemy and hope that the harsh words hurt them.
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This post is part of a series on Make in India. The story How did China become a manufacturing superpower in this series has got a lot of attention.
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Thanks to Sanjay for spotting a typo!
