VIEWPOINTS : Should Defense Firms Switch From Swords to Plowshares? : A move into civilian markets might seem wise, but many doubt its practicality.

T he recent announcements of major layoffs in Southern California by Hughes Aircraft and Northrop Corp. illustrate how hard the region can be hit by a slowdown in military spending. To protect communities against boom-and-bust economic cycles, peace activists, union leaders and others are urging military contractors to convert at least some of their production capacity to civilian use. But would that sort of changeover really be in the nation’s best interest? And are the contractors capable of switching to non-military businesses? Times researcher Melanie Pickett interviewed various experts on economic conversion . Excerpts from their comments follow:

A. Ernest Fitzgerald, author of “The Pentagonists: An Insider’s View of Waste, Mismanagement and Fraud in Defense Spending:”

“I don’t know what (else) these guys can do. . . . they’ve got to be hooked to the taxpayer’s umbilical cord. They’ve had it so soft for so many years that it’s like taking a bunch of aging jocks who’ve done nothing but sit around the bar at the country club and saying, ‘Gosh, we’re going to put you up against the L.A. Rams.’

“We don’t allow these giant firms to go bankrupt. . . . We have what amounts to survival of the least fit. I don’t see any reason in the world that they’d want to voluntarily give up that easy life. Why would they? What other customer is going to adjust your prices, your specifications and schedule to approximate what you actually do? It’s like shooting an arrow at a blank wall and then drawing a target around it.”

Seymour Melman, chairman of the National Commission for Economic Conversion and Disarmament and a Columbia University professor of industrial engineering:

“As now constituted, there’s very little that (military contractors) can move into. In fact, they are disabled from moving into just about anything. There’s a record of aerospace factories attempting to make something civilian. The Rohr Co. tried to make the BART (Bay Area Rapid Transit) trains; Westinghouse Military Electronics tried to make the electronic control systems for BART; Grumman tried to make a city bus; Boeing tried to make a trolley car. Every one of these was a catastrophic failure. Failure in terms of the reliability of what was produced. And failure financially. . . .

(To remedy that situation, Melman urged passage of the defense economic adjustment act, a bill proposed by U.S. Rep. Ted Weiss (D-New York) to require advance notice of major cutbacks at military plants.) “The cornerstone of (the legislation) is the provision that, as a condition of the contract with the Pentagon, military-serving factories, bases and laboratories above a given size--more than 100 people--have to establish an alternative-use committee, half named by the management, half named by the employees. The task of the alternative-use committee is to produce a complete technical economic plan for the use of people and facilities when the military work is done. In other words, Los Alamos would have to set up an alternative use committee and make proposals as to what the scientists, engineers and technologists in that place can be working on when the work for the Department of Defense is done.

“Obviously, this isn’t going to see light of day on the floor of the Congress as long as the members of Congress are stuck with military Keynesianism, the attempt to bring jobs and income to their districts by the military dollar--but that is obviously running out of steam. The senators from California aren’t going to be able to do a damn thing about the Northrop and Hughes contracts. The pork-barreling is over . . . because we’ve run out of resources.”

Henry Berkow, executive director of California Unions for a Comprehensive Mutual Test Ban and Economic Conversion for Jobs, Peace and National Security:

“The cutbacks are affecting the entire economy of the nation, primarily affecting places like Southern California, Virginia, Texas and even New York. . . . There’s a domino effect to all this. It’s not 6,000 workers here and 2,000 there. The layoffs affect the entire economy. . . .

“In the Soviet Union, they are taking the tanks that they’ve sent back and they’re converting them into plows and other things to use in farming. . . . They’ve turned over 2,000 plants from the military to social needs. Now, they need that, because they’ve been tied up in this war economy, too. But we need it here, too. . . . (Contractors) can be producing pretty much anything--they can produce machine parts, they can produce new machinery, they can produce material for bridges. The inner structure of our country is falling apart. Bridges are falling down, roads are caving in. There is much yet to be done.”

Michael Beltramo, a defense industry consultant:

“Even though it’s an admirable objective, I don’t know how realistic (conversion) is, given what’s going on in China and maybe what’s going on in Russia. I get real skeptical about these people that get the first outbreak of peace and everybody wants to scrap everything. As a lot of people point out, we’re in a no-growth period, a retrenchment period, in defense, but there’s still a whole lot of business out there. Even when you see the story on Hughes eliminating 6,000 positions, they talked about doing that by normal attrition. But there’s absolutely going to be a downturn in defense business. No doubt.”

Marion Anderson, director of Employment Research Associates, consultants on the economic impact of government policies:

“A basic concept of conversion and of conversion legislation is that these people have to be retrained. You do not necessarily have to retrain a factory worker who can make civilian electronics just as well as he or she can make military electronics, but if you have a salesman who has dealt only with generals and colonels, he might very well have to be retrained to deal with department stores. He or she is going to have to think differently and deal differently and, in fact, the whole product line has to be geared for something quite different.

“In the civilian economy, you don’t need to produce metals that can bear up under thousands of degrees of heat, because in most uses in the civilian economy you don’t have thousands of degrees of heat. On the other hand, the product has to be durable, relatively easy to maintain and it has to be quick and easy to fix. It also has to be competitive in price. . . .

“There are tremendous capital and infrastructural needs within the United States, and I have no question but that a number of the military manufacturers could fill some of it. You have a lot of very talented people, and they could start working on civilian goods.”

California Assemblyman Sam Farr (D-Carmel), chairman of the Assembly Committee for Economic Development and New Technology:

“What has happened historically in the aerospace industry when one company goes down is that another one goes up after getting a new contract. There hasn’t been a real major dislocation, but in light of what you’re seeing today, for the first time we may have permanent dislocations the likes of which we haven’t experienced since 1976-1977.

“From a state level, the information we’ve given, we’ve been able to warn these cities about how defense-dependent they’ve become. What we’ve not done a very good job of is on the conversion side of it. Now that you know you’re going to be susceptible to impact, what can you do about it? The closures have been faster than we’ve been able to put all our ducks in order.”

Lawrence Skantze, retired Air Force general:

“There’s a vast majority of the American people who want to feel that the defense budget is reasonable and will maintain an adequate and strong defense. I don’t think you’d have that same consensus to say ‘well now, let’s now spend that on solving pollution or homelessness. . . .’ You will never get the breadth of a consensus for that sort of thing that you can for defense, because the average person who is a taxpayer, middle income, doing their thing, working hard, recognizes they need a (national) defense and will support that.

“My experience has been, in the defense industry, there is some very bright, sharp people and, once challenged with the idea of being competitive outside the defense industry, I would feel very strongly they could do it.”

DR, Joe Crabtree / Los Angeles Times