THE ECONOMIC WEEKLY January 23, 1965

to the Chief Minister, is also not with­ the Centre. What will be tried though, siderations will dictate petty favours, out significance. are small acts of defiance, which if nobody seems to be particularly pushed through, could build confi­ bothered. And the opposition is still* It is now rumoured that a new align­ dence, rally the cohorts and lead to weak enough to be treated as irrele­ ment is taking shape in the Andhra bigger things. vant. Congress power elite. A C Subba Reddy from Nellore and a strong man But what is all the quarrel about? All this is creating a vacuum both in his own right seems to be emerging Perhaps, Sanjeeva Reddy is all for the inside the Congress and in the South as the direct plenipotentiary of Andh- Durgapur line while Brahmananda as a whole. It is a peculiar problem ra's man in the all-India Syndicate. Reddy insists on loyalty to the Bhuba- since the vacuum seems pretty full of Against this powerful combination, neswar approach? Even to pose the noises, scramblings, posturings and the Brahmananda Reddy is forming an axis conflict in this context causes Homeric like. Moreover, if nature is said to with APCC President Thimma Reddy mifth. To their credit it must be abhore vacuum the Congress politi­ and Finance Minister Chenna Reddy. said that the protagonists do not even cians seem to thrive within one. The These positions have not crystallised take the trouble to put on any ideo­ danger is that the people may well as yet and each is rather warily feel­ logical togas. Their quarrel is strictly begin to despair and abhore politics ing out the other. They are all cons­ pragmatic — over the spoils of office and politicians of all kinds. This cious that any open attack on San- and on the question of personality would prepare the ground for someone jeeva Reddy's citadels would be inop­ assertion. If in the process there is or some collective or some alignment portune at the moment. Thus, for an amount of political instability and of collectives to think in terms of example, there was no overt opposi­ if the bureaucrat is simultaneously partyless politics, with the army and tion to his son-in-law being the official harassed and pleased, since many the civilians playing a far more im­ Congress candidate to till the Assemb­ minor decisions will now be his alone portant role than parliamentary demo­ ly vacancy created by his elevation to while simultaneously factional con- cracy now allows them.

From the End The Bloated Aircraft Industry THE aircraft workers protest decided. This company is also en­ the Comet, the Lightning, and the march to London (precipitated gaged in the Concord project and, in Seavixen; the Tyne used in the French by rumours of large-scale cuts in the the military held, it produces the Breguet Atlantic, the German Trans- industry) and Harold Wilson's Che­ Lightning, the Jet Provost and the all CI60 and the Short plane; quers dinner invitation to representa­ following : , Blood­ the Spey used in the Trident, the tives of Britain's aircraft industry, hound, Vigilant, ET316 and Swinghre. One Eleven and the Friend­ bring into prominence once more the It employs a total of 40,000 workers. ship; the military Dart used in the future of this large and expensive in­ The next large group is the Hawker HS 748; the Medway used in HS 681; dustry which currently employs some Siddeley Aviation Group employing and the military Spey used in Buc­ 250,000 people. 39,000 workers. It is made up of Haw­ caneer, McDonnell Phantom, and a No final decision on this important ker Blackburn, Whitworth and number of other engines. subject can be taken, however, before . It produces the HS748, The other large engine group, the the Plowden Committee (which has the HS681, the Argosy, the Trident Siddeley engine group produces been set up to enquire into this in­ and the Comet, and, in the military the Olympus used in the Concord and dustry) publishes its report. In the sphere, the HS125, the Sea Vixen, also in TSR2 and the Vulcan ; meantime, it is worth taking a look the Buccaneer, the HS Kestrel, the HS the Viper used in the Indian Hindu­ at the present shape of the industry. PI154 and the rockets, Firestreak. stan fighter; the Jet Provost, HS 125 Redtop, Bluestreak, , Seas lug It has been obvious for quite a long and a number of engines used in Heli­ and AS 37. time that Britain's aircraft industry is copters. too large for Britain's needs. Six years still remains an in­ While no definite decisions have yet ago the Conservatives attempted a dependent organisation. It produces, been made by the Government, there half-hearted plan to reduce the size of among others, the Dart Herald aero­ is no doubt at all that it is firmly re­ the industry, and under Mr Duncan plane. and Harland solved to reduce the size of the British Sandys, the large number of private of Belfast produce the Turbo Skyvan aircraft industry by 1970 to approxi­ companies in the aircraft industry and the Belfast. mately 11 times the size of the French were merged into a few large groups. The two main aeroengine companies aircraft industry which employs bet­ At present, the British aircraft in­ are the Rolls-Royce Aero Engine ween 100,000 and 150,000 men. The dustry consists of a few aircraft build­ Division, employing 34,500 workers object of Wilson's dinner was to can­ ing concerns and two aero-engine and producing the Dart, used in Con- vass the views of the industry about manufacturers. vair 240, HS 748, HS Argosy, Hand- the most economic set-up for itself. The British Aircraft Cdrporation ley Page Herald, the Japanese aircraft But plans of this sort must naturally was formed, out of the merger of NAMC YS 11, the Dutch Fokker be long-term. It begins to appear as Bristol, Vickers Armstrong and Eng­ Friendship, and the U S Grumman if the main brunt of rationalisation lish Electric. They produce the YC-1.0, Gulf stream. It also produces the Con­ will fall on the British Aircraft Cor­ the BAC One Eleven and the contro­ way engine used in the VC-10, the poration, which is involved both in versial TSR2 whose future is still un- Avon engine used in the Caravelle, the Concord and the TSR2. If both 115 January 23, 1965 THE ECONOMIC WEEKLY the Concord and the TSR2 are cancel­ the war thousands of millions of port discusses some of the plans which led, BAC will be in real trouble, and pounds have been sunk into it; ab­ will help the U S industry to survive. it would then be left entirely depend­ andoned aviation projects have cost One approach is diversification, with ent on the declining production of the U K more than £300 m since 1951, aeroframe makers diversifying into the VC-10s and the BAC One Eleven According to a recent estimate made missiles for Instance. Another solution and some work. The main by the Economist, it costs an average is to apply the industry's research to criticism of the TSR2 is not only that of £2,000 per man to maintain the air­ other areas such as urban mass trans­ it is too expensive (it is likely to cost craft industry, or something rather portation and the exploitation of ocean about £3m a piece against the pre­ more than £500m a year at its present resources. This, however, is a very vious limit of £2.5m), but that it is size or £5,000m in the decade that it long-term project. The report also too sophisticated for the defence re­ takes to design and deliver a new comments on the failure to diversify quirements of the U K. Cuts on this aircraft. The current cost of develop­ into commercial markets. American plane would make a major contribu­ ing new engines alone ranges from companies seem unable to exploit their tion towards the estimated £950m £20m to £100m depending on their experience outside the industry, the saving on defence expenditure over the complexity. best American companies have, how­ next 10 years. It is likely that a com­ ever, transformed their aeroframe Low Productivity promise on this subject will be reach­ makers into "centres of invention, re­ ed, as well as a compromise on Haw­ Compared with the aircraft industry search, development and custom pro­ ker Siddeley's planes. Here, the very in other countries, productivity in the duction". British industry is not high. The expensive P1154 supersonic VTOL pro­ Better Use of Skills ject might be abandoned, and the Americans are said to obtain three Much on these lines could also be earlier vertical take-off plane, the times the production per man that done for the British aircraft industry. P1127, developed. The last moment the British do, and they use a larger Some of the suggestions that are be­ invitation to Short Brothers and liar- proportion of unskilled workers. It is ing mooted are that the Government land of Belfast probably implies a re­ interesting to note that 10 per cent could speed the building of a new prieve for the company's big Belfast of British qualified manpower works in for which there is an immedi­ Freighter which is due for completion the aircraft industry. Foreign cur­ ate market, or that Britain should very shortly. The efficiency of Britain's rency earned by the industry last year manufacture American aircraft under aero engine manufacturers is not in was a little under £100m; the French licence, but with British aero engines. doubt since British aero engines earned almost the same amount al­ A significant part of the British air­ power half the world's civil jet air­ though they use one-third of the man­ craft industry could be more effective­ liners and . So the British power, mainly through the sales ly employed elsewhere. Most of the engine firms will probably emerge of their successful Caravelle. 250,000 aircraft workers are not spe­ unscathed. Wilson's concern with the state of cifically aircraft engineers, but skilled Dependence on Defence Orders the aircraft industry is understand­ men who happen to be employed in Many would like the aircraft in­ able. That streamlining is essential the aircraft industry. With the crying dustry to be devoted solely to the pro­ nobody doubts, and indeed it will not shortage of skilled labour in other in­ duction of civil aircraft—Mr Cousins mean the end of the industry, but dustries, which has now reached crisis has said that he would rather build the creation of more efficient and proportion, transfers could, with pro­ freight-carriers than bomb-carriers—, economic organisation. Hawker Sidde- per planning, be made to the benefit but in the present state of the in- ley are already embarking on many of all. There is a growing demand for dustry unless many more orders for branches of advanced industry outside electronic skills and about onethird exports are received (which in face aeroplanes. The Canadian aircraft in­ of the investment in modern military of intense competition from other dustry, which had grown on defence aircraft is in electronics. Some of this aircraft manufacturers seems unlikely) contracts, some years ago went skill could be used to produce more the industry will be heavily dependent through a similar crisis, from which it efficient electronic aids in civil avia­ on military orders. has emerged by drastic cutting down tion or to meet the need for electro­ nic instruments in medicine and in in­ In the post-war period, the British in men and design teams. It is now a dustry. The machine tool and other aircraft industry grew because of ex­ smaller and more efficient industry precision manufacturing industries port orders from a number of coun­ earning more money than it has ever done. could be enriched by talent which is tries who were anxious to re-equip now taken up by the aircraft industry. A great deal of rethinking will have with new jets their air forces which The Government itself could encourage to be done about Britain's aircraft had been shattered during the war. various industries like "aircushion industry. Indeed, if Duncan Sandys' Now many of these countries not only craft", monorails, hospital equipment, famous "rationalisation" project for have a sufficient number of jets, but special-purpose building systems, to are also manufacturing them them- the industry had been more carefully name but a few. selves. thought out and planned, much of the In any reorganisation of the aircraft present crisis could have been avoid­ To support the British aircraft in­ industry, the Government has a duty ed The U S aircraft industry is al- dustry at its present size and cost is to see that sub-contracting contracts ready planning for necessary contrac- an uneconomic proposition, and it is are spread out over as wide a field as tion, and all the leading American necessary that the Government should possible. The French, for example companies are attempting to adjust take firm action to reduce the in­ make it a practice to subcontract Jo themselves: to severe over-capacity dustry's size, particularly in the mili­ unsuccessful companies, and thus and a declining market The American tary held, at the same time making share out the work. consultants, Arthur D little Incorpo- adequate plans to absorb the redund­ There is no doubt at all that the rated have recently published a detail­ ant skilled labour which is urgently aircraft industry needs overhaul Since ed assessment of these efforts. This re required in other industries.

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