Private Industry Can Increase Its Role

TIME was when the maintenance problem of armies consisted of little more than shoeing horses and hammering out the dents in a knight's armor. But in today's supersonic and electronic age, the task of caring for a stable of increasingly complex weapons and equipment has become a major problem for the military, and a challenge and opportunity for private industry. Of the Defense Department's $7 billion maintenance budget in fiscal 1956, nearly $1.4 billion was for overhauling, and a fourth of this went to U.S. business for its part in maintaining the nation's arsenal. Though private business has made major inroads into a field once almost exclusive to the military, it is anxious to press even farther. The question now facing the Armed Forces: How far should industry be allowed to go?

The arguments for farming out more maintenance contracts, particularly for major overhauls, are impressive. Such contracts keep private facilities in readiness for total mobilization, encourage development breakthroughs by spreading know-how. With civilians doing more and more noncombat jobs, the services can concentrate more on battle training, prepare men for fighting instead of repairing typewriters or truck motors.

One of the biggest problems of the services is the need to train a man for two or three years for a technical job, only to lose him to private industry a few months later. This is a crucial loss in the supersonic age: while it took only two men to check out the 24 electronic boxes in the older F86D, it requires ten to check the F102B's 210 electronic boxes. Private industry strongly believes that a smarter and cheaper way would be to let business do the job; the military should follow the trend in private business, where many firms no longer try to maintain such equipment as trucks or electronic machines, but rent the equipment, let outsiders maintain it. And though private wages are higher than service pay, the difference is not so great, considering the cost of training and supporting a serviceman for several years.

The Air Force has taken the lead in recognizing the advantages of farming out maintenance. Starting in the hard-pressed days of the Korean war, it has increased private contracts to nearly 60% of the estimated $772 million it will spend (exclusive of servicemen's pay) on maintenance in fiscal 1957. While much of this was made necessary by the increasing complexity of aeronautical equipment and the short age of technicians, the Air Force is convinced that it is nonetheless getting a bargain--even though private contracts often cost more than military work. The expensive alternative, the Air Force recognizes, would be to invest heavily in new maintenance plants, hire more civil-service employees. The Air Force can even save money 'by utilizing the prime contractors who are producing planes and missiles, are already tooled up to repair and overhaul the weapons. Lockheed Aircraft, for example, has set up a separate subsidiary just to handle maintenance and overhaul, now employs more than 6,000 people, expects to do $50 million worth of work this year.

The Army, so far, has been reluctant to call on civilian help. It has only 10.6% of its total maintenance bill in private contracts in fiscal 1956. The Navy is lagging still farther behind with only 6%. The armed services should use private maintenance, many Navymen feel, only when it saves money. "It makes sense to go commercial," says Captain Robert M. Reynolds, maintenance chief of the Navy's Bureau of Aeronautics, "when you can ride on somebody else's costs, as in the case of the prime manufacturer." Otherwise, the Navy finds it hard to forget that costs in its own shops are $5 a manhour v. $8.18 in private shops. Yet, despite its reservations, the Navy is stepping up the jobs for private industry. Last week Dallas' Southwest Airmotive Corp. announced that it has been awarded the first Navy aircraft-engine overhaul contract to go to a nonmanufacturer since World War II.

No one really expects that private industry can take over all--or even the biggest part--of the maintenance job of the Armed Forces. But there are still many areas, notably in the Army and Navy, in which it could free servicemen for combat assignments without interfering with combat readiness. As weapons become more complex and technicians scarcer, the services will have to look more and more to private industry for help in maintaining the nation's military depots. Already military contracts for maintenance and overhaul have virtually created a new industry. Southern California Aircraft Corp., for example, started out as a service for executive planes, now deals almost exclusively in military maintenance. The Defense Department is in full accord with the farm-out trend, hopes to see it go much farther. Said a Defense official: "Anyone who isn't on the farm-out bandwagon by 1960 is gonna get kicked on."

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