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FRIDAY, APRIL 9, 1943.

HOUSE OF REPRESENTATIVES,
COMMITTEE ON MILITARY AFFAIRS,

Washington, D. C. The committee met at 10 a. m., Hon. Andrew J. May (chairman) presiding.

The CHAIRMAN. The committee will please be in order, and we will continue hearings this morning on H. R. 2239, H. R. 1742, H. R. 1728, and H. R. 992.

The first witness this morning is Mr. H. G. Smith, representing the Shipbuilders' Council of New York. Mr. Smith, will you

tell us which one of these bills you are particularly interested in, give us. your statement, and make any observation you care to make?

RMAN:

STATEMENT OF H. GERRISH SMITH, PRESIDENT, SHIPBUILDERS

COUNCIL OF AMERICA

Mr. Smith. Yes, sir. I have a very brief statement which I would like very much to read, sir, because it brings out the points I have.

The CHAIRMAN. You may do so.

Mr. Smith. I am president of the Shipbuilders' Council of America, formerly the National Council of American Shipbuilders. It is an organization that represents among its membership every private shipyard in the country engaged in the building of major combatant vessels for the Navy, and a large majority of the yards building seagoing merchant vessels, and nearly all of the major ship repair yards. of the country engaged in the repair and conversion of both commercial and naval vessels. The membership of the council includes also many builders of machinery and equipment for ships.

Shipbuilding and ship repairing and its allied industries are engaged in the greatest program in the history of the world. Ships represent one of the largest single items in the Nation's war effort and the shipbuilding industry is proud of the record that it is the only industry which exceeded the production goal set by the President in 1942.

Naval ships of all types are being built in world record time and volume-details of which are a military secret. Reference can be made, however, to the merchant shipbuilding program.

During 1942 over 8,000,000 dead-weight tons of ships were completed and put into service. Notwithstanding that outstanding accomplishment, the program for 1943 dwarfs that of 1942. We are asked to more than double production in all classes of vessels, both naval and merchant, and it is fully expected that the volume of repair work will increase in proportion to the added tonnage and hazards as the war progresses.

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Shipbuilding requires a higher ratio of labor to total costs than any other industry. To put the matter another way, we depend more on labor and the personal equation for building ships than most war industries. Production lines as they are known in the aircraft industry, and mechanical means of production such as obtain in industries such as steel and petroleum, are not typical of the shipbuilding and ship repair business. The character of the work does not permit such methods. The degree of success with which the shipbuilding industry will meet its future increased obligations hinges upon two fundamental factors--first, the ability of the industry to secure and retain the necessary number of employees to perform the task and, second, the maximum productive efficiency of such employees. Any failure to meet either of these requirements can only result in failure of the shipbuilding effort to produce the ships.

Shipbuilding and ship repairing is a highly complex operation. As high as 36 separate skilled and special trades are employed in each shipyard. These include blacksmiths, shipfitters, riveters, drillers and reamers, welders, riggers, electricians, loftsmen and layers-out, chippers and caulkers in steel, boilermakers, bolters-up, machinists, steamfitters, punch and shear operators, rollermen, planer hands, crane operators, sheet metal workers, coppersmiths, pipefitters, plumbers, molders, metal polishers, buffers and platers, pressmen, joiners, boat builders, millmen, wood caulkers, painters, apprentices in most trades, helpers in all trades, and laborers.

Operations are carried on in yards covering many acres with numerous shipways and individual buildings. Employees are engaged in diversified occupations on vessels under construction on the building ways, on vessels in the wet basins, in fabrication shops and in the yard generally. They are cut off from each other separated by partitions and by distance.

Under such conditions top speed production of ships can be accomplished only if there is an adequate supply of properly trained and supervised manpower and precise timing and effective coordination of men and materials.

The manpower situation in the shipbuilding and ship-repairing industry is critical. The shipbuilding program for 1943 will require about 288,000,000 man-days of work as compared with about 172,800,000 man-days in 1942. An approximately equal number of mandays will be required in the production of materials and equipment for shipbuilding and ship repairing. The industry cannot meet its production schedules without an adequate force of technical employees, supervisory employees, and skilled labor. Included in this group are second-, third-, and fourth-year apprentices whose value to the shipyards because of their training is very great. The drain by the Selective Service on all of these classifications is very heavy and it is increasing rather than decreasing, and the preservation of these groups to the industry must be made if the industry is to meet its commitments.

In one of the shipyards employing over 25,000 men at the present time the following figures show employment and separations by classifications in the 6 months' period from September 16, 1942, to March 16, 1943:

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In other words 12,676 persons were employed to increase the force by about 2,500. The actual increase of force, therefore, is only onefifth of the hirings. This yard, whose actual employment on January 1, 1943, was 27,013, estimates that it will have to employ, during 1943, 27,500 employees to increase its force by an additional 2,300, and it expects that the separations in both the skilled and semiskilled classifications will be in excess of employment in these classifications. That actually occurred, in accordance with the figures I quoted you, during the last 6 months.

Another shipyard employing about 20,000 persons hired 30,500 in 1942 to increase its pay roll by 9,900, and during the first 2 months of 1943 it hired 5,116 persons to attain a net increase in employment of 1,200.

Another company employing about 150,000 men at the end of 1942 expects to increase its pay roll by 50,000 persons by the end of this year, and it is estimated that it will be necessary to hire 200,000 persons to accomplish this if present conditions continue.

Still another shipyard employing nearly 30,000 persons at the end of 1942 expects to hire over 15,000 during the year to increase its force by an additional 3,000.

The four shipbuilding companies referred to lost about 32,000 to the armed forces during the year out of a total employment of 138,000 at the beginning of 1942, and the critical situation arises from the fact that so many of these persons are taken from highly trained groups of employees whose efficiency is only acquired from many years of training and experience in the industry.

Hirings and separations are dependent to some extent on the geographical location and the labor market in that locality, but the situation is serious in all districts. Tne heavily increased demand for output on the shipbuilding and ship-repairing industry for 1943 involving such a large additional increase in force emphasizes the urgent necessity to preserve the industry's force of technical, supervisory, and skilled employees.

The following table shows the total experience of these four companies for 1942, which was much worse at the end of the year than at the beginning, and which has continually grown worse during the first quarter of this year. This is a summation of the results of those four companies and their experience during the year:

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That is for four companies only. We estimate, in the industry as a whole, that the average employment last year was approximately 600,000 in private shipyards, this last year, and this year it will be pretty close to a million, average. That does not taken into account the employees of a similar kind who are required in the Government navy yards.

To the extent that manpower is not utilized to the fullest extent, production will suffer as more men must be employed to make up for loss of efficiency:

Provision should be made by law to eliminate any practices which will result in a need for more labor than is necessary to do the job or which will decrease production in the slightest degree. This result the Smith bill, H. R. 2239, aims to accomplish.

Excessive manpower is required by artificial limitations calling for more men than necessary to do a given task. That is covered in one of the provisions of your bill. This practice is vicious and its elimination both from our industry and all others would materially increase available manpower. In some areas of the United States at the present time industry is already scratching the very bottom of the manpower barrel. The continued expansion of war plants and the accelerated demands of the armed services have created a most.. critical manpower situation. This industry is looking for men, and the elimination of practices which require two men to do the work of one will help us get them.

Excessive manpower is also required by failure of workers to produce to their utmost capacity.

If supervisory employees are permitted representation by or membership in labor organizations for purposes of collective bargaining, then the breakdown of discipline and production will result. There are several reasons why the industry feels that this is so.

1. Grievances are taken up with the supervisory personnel as the first step in their adjustment. This is fundamental to harmonious labor relations and it is a recognized provision in practically all labor agreements with management. In many cases the supervisor settles grievances on the spot without further procedure. This desirable practice would of necessity end if the supervisors themselves are members of the same union as the employees.

2. These supervisors, being part of management, must not be subject to the control of any other group; otherwise, consciously or unconsciously, favoritism sets in and discipline disappears. Grievances would be settled in the union lodge rather than in accordance with labor contract procedures.

3. Should supervisors become members of the same union as the men under them, the company could obviously not entrust the settlement of grievances to them. The effect of taking from the supervisory personnel the right to discuss and settle many grievances would be extremely detrimental. The grievance machinery would bog down; all grievances would have to go first to important executives whose time should be devoted to problems of production and not to a multitude of petty grievances which could be normally settled by the supervisory personnel having direct contact with the problem.

4. Supervisors have a direct responsibility in the hiring, training, disciplining, and discharging of employees. Favoritism toward one union or prejudice against another or against employees not members

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