Trouble in Paradise

In wartime, when the U.S. was footing the bill, brotherly love and production soared and sang at Cleveland's bountiful, brash Jack & Heintz, Inc., makers of plane equipment. Associates (employes) luxuriated in hot showers and Turkish baths, cheek by jowl with pink-jowled President William S. Jack, got free insurance and Florida vacations. Out of their sky-high wages ($5,000 a year and up) they gratefully sank $15,000,000 in preferred stock in Jahco to finance a still rosier postwar future. But peace and cutbacks brought trouble to this production paradise. By last week Jahco's eight plants, two still owned by the Defense Plant Corp., were shut down. All of the associates, except clerical help, were laid off indefinitely. There was no sign of reconversion.

Bare Cupboard. To the associates went a cosy if disillusioned letter from Bill Jack.

Said he: "We now find ourselves without any product for postwar. ... It will take us six months to a year to settle with the . . . armed forces the many complicated details in dollar value of inventories before we know where we stand financially. In this period of time we will complete our . . . development of products to be manufactured in peacetime." Those who wished, he added, could turn in their stock, and get every penny of their money back.

As to what products Jahco might eventually make, Bill Jack gave no hint. Associates gossiped about electric motors and ball bearings, which Jahco made during the war, or an engine for light cars, like the one it had been developing for the Army.

Something had also happened to Jahco's perfect friendship with A.F. of L.'s International Association of Machinists, with which Bill Jack had long boasted a closed-shop contract. The trouble had started when union bigwigs, who looked sourly on Jahco's stock-selling plan, warned associates against buying. Associates went right on buying anyway, rubbed it into wary union officials by assigning their voting rights to Bill Jack and Vice President Ralph Heintz as trustees. When the V-J layoffs started, the squabble broke out again, this time over veteran seniority provisions. Result: Jahco must appear before NLRB on charges of "coercing" its associates by interfering with the election of union officials.

But Tomorrow. None of this had discouraged ebullient Mr. Jack. No matter how much stock his associates cash in, he is still well heeled. On an initial investment of $100,000 in 1940, Jahco has piled up a wartime profit of $4,135,881, after taxes. This gives Bill Jack plenty of confidence to talk enthusiastically, if vaguely, of the wonders to come in his "plan for tomorrow," when Jahco opens again. His plan includes an annual wage to all associates and a quarterly division with them of 50% of all profits. His associates, now trying to find other jobs, hoped "tomorrow'' would not be too long a-coming.

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