Document 47: "The Boeing Company and the Military-Metropolitan-Industrial Complex, 1945-1953"
Richard S. Kirkendall, "The Boeing Company and the Military-Metropolitan-Industrial Complex, 1945-1953," Pacific Northwest Quarterly 85
(October 1994), 137-49.
The years of Harry Truman's Presidency were crucial to the success of the Boeing Airplane Company. The president himself did not have close ties with the firm or great confidence in air power. but one part of the American state—the air force—recognized Boeing's ability to serve air force interests and was in a stronger position than ever before to pursue those interests. Furthermore, the company now had another ally willing to enter the political arena on its behalf. This was Seattle. The people there had a new commitment to Boeing. Taking advantage of cold war fears, air force leaders lobbied for funds to be spent on bombers, and Seattle people worked to draw that money to their city by way of Boeing. As a consequence of the successes of these two groups in the Truman years, the company acquired the resources it needed to become the world leader in building commercial jets....
The deteriorating international situation may have been the basic factor at work, but though it generated pressure for a military buildup, it did not dictate that money be spent on bombers. It only created opportunities for advocates of competing ways of defending the United States and fighting wars. There was, in other words, room for political influence, and the key players on Boeing's behalf at this time were the leaders of the air corps.
By mid-l945, however, another group of players had joined the game: people who identified with Seattle and championed its development. The war had increased Boeing's work force there from 4,000 in 1940 to about 50,000 in 1944. Seattle now hosted the biggest manufacturer in a state in which manufacturing was considerably more important than it had been before the war. Boeing depended heavily on government spending, and soon after the war ended, the negative side of that dependence became obvious to the company and the city as well. On September 5, 1945, the Army Air Forces ... slashed orders for the B-29, a Boeing-built bomber that had played a large role in the last year of the Pacific war. This move by its chief customer forced Boeing to dismiss over 20,000 workers, nearly half of the firm's work force in the city....
[Responding to the cuts, the Seattle Chamber of Commerce] staged a mass protest meeting in downtown Seattle. Many people considered Boeing's economic health essential to Seattle's welfare. Support for the company ran across class lines.... The campaign [to restore the cuts] failed. By year's end, Boeing employment in Seattle had dropped below 9,000. and the company closed the plant it used in nearby Renton, hurting that community....
Busily working to strengthen itself politically, the Army Air Forces had developed a postwar plan that posited the need for a strong military force and presented bombers as the most important form of military power. The plan called for a large air force ... backed up by a healthy, technologically advanced aircraft industry and controlled by a new branch of the armed forces, independent of the army and navy. In the summer of 1947, the airmen achieved one of their ambitions: what had been the United States Army Air Forces became the United States Air Force....
Neither humble nor politically passive, the leaders of the new air force were in fact shrewd. They recognized the importance for them of the aircraft industry, were troubled by its sharp decline since the war, and sought ways to strengthen it. They now obtained a new opportunity when President Truman appointed the Air Policy Commission, which he empowered to develop and propose a national policy on aviation.
The commission gave Boeing's president, William M. Allen, a chance to make a case for air power and the company. Testifying in the fall of 1947, Allen insisted that in the new world situation the U.S. must have "a usable striking force" and "be at all times prepared in the air." He also argued that the air force would suffer if Boeing continued to decline, for the company would lose its capacity to do research.... Allen clearly wanted the commission to recognize how important Boeing was and to recommend policies that would result in more business for the company....
Although he did not refer to the Soviet Union in his testimony, Allen was thinking in cold war terms by now, but the Truman administration favored economic aid as a means of fighting the cold war and feared that large increases in both aid and military spending would damage the economy. Furthermore, the president and his secretary of defense, James Forrestal, preferred a balanced buildup of three forms of military power—land and sea as well as air—to reliance on the air force.... A variety of groups and individuals, among them ... the army, the navy, and corporate executives interested in foreign markets, backed the president's policies.
Champions of air power, however, campaigned for a budget that would expand the air force farther, and the commission proposed late in 1947 that the nation base its defense on air power and develop the required industrial base. Stuart Symington, now secretary of the air force, fought for this proposal and picked up support in Congress where confidence in air power ran high.... [Many Congressmen felt that] reliance on air power would prevent the costs of security from rising too high and avoid the deployment of American troops in Western Europe. In the early months of 1948, ... Congress voted overwhelmingly [to] increase plane purchases from fewer than 2,000 ... to more than 5,000....
Even before passage of the military budget in the spring of 1948, Boeing had begun to expand. Emergence of both the cold war and the air force in 1946-47 stimulated the military market somewhat, and the company sold transports and bombers in that market. By mid-l947, Boeing had increased employment in Seattle to nearly 14,000 and, by the spring of 1948, to 18,400. During 1948, it began deliveries of the B-50, its improved version of the B-29, and also the Stratocruisers and Stratofreighters, moved forward on the development of jet bombers and guided missiles, and reopened government-owned plants in Renton and Wichita that it had operated during the war. Clearly, Boeing—and its communities—had benefited from the rise of the air force and now seemed poised to profit from increased congressional support.
At this juncture, much of Boeing's work force went out on strike.... After the war, agreement between management and labor that government should promote Boeing's development did not prevent the two from clashing on other issues. Management, representative of conservative forces in American industry and unable to be as generous to workers as more profitable companies, was determined to lower labor costs so as to strengthen the company's competitive position within the industry, but it encountered an equally determined work force, one eager to catch up with the rising cost of living.... Although the two sides disagreed on wages, seniority was the key issue. Allen, convinced that it generated inefficiencies, wanted greater freedom to transfer, lay off, and rehire workers.... After months of fruitless discussion, [the Machinists' Union went on strike] on April 22, 1948.
[Boeing President] Allen fought back. He ... advertised in a Seattle newspaper: "If the Company is to engage in substantial production in Seattle, it must have the opportunity of establishing, under a fair and workable labor contract, a satisfactory relationship with its factory employees," and then it transferred some work to plants elsewhere. The union charged that the company was "applying the Mohawk Valley Formula, ... a ... program designed to break strikes." That reference was to a technique sometimes employed by corporate managers whereby they threatened to move away if the community did not support them in a dispute with a union. Seattle citizens recognized Boeing's action as a clear threat....
The union president, Harold J. Gibson, spearheaded a petition campaign to persuade President Truman to pressure the company to negotiate. Noting that many of the strikers had produced B-17s and B-29s during the war, the petitioners claimed that Allen's stubbornness damaged workers, Seattle, the region, and national defense.... Obviously worried about the labor vote, [the Truman administration tried] to persuade Boeing to negotiate....
[Boeing's] refusal to negotiate with [the Machinists' Union] opened up an opportunity for another part of the labor movement. The local leader of the Teamsters, the powerful and ambitious Dave Beck, moved in and attempted to become the new bargaining agent for Boeing workers, arguing that the strike was hurting Seattle and warning that the company might shift operations to Wichita. Though other labor leaders and labor organizations denounced him, Beck did not back off ....
The strike ended on September 13, 1948. Machinists leaders, obviously fearful that if the strike continued the Teamsters would take over and Boeing would free itself from [the Machinists' Union], persuaded reluctant workers to return to work....
Well before the strike issues were resolved, the contest between the Machinists and the Teamsters had merged with another issue: Boeing's future and the future of Seattle. New thinking inside the air force threatened those futures, especially the city's.
Truman's victory in the 1948 election led to difficulties for the air force. Strengthened by the election, ... the president now ... advocated reductions in aircraft purchases.... [The] new budget [for the air force], though larger than Truman favored, was not nearly enough to satisfy air force leaders and Boeing.
Boeing employment in and near Seattle reached 25,800 by the summer of 1949, with 16,800 working on air force contracts, but federal spending cuts meant that the work force devoted to military production would be slashed by 6,400 by the following September when the B-50 contract would be fulfilled.... In the commercial sector, Boeing faced tough competition from Douglas, was losing money on the Stratocruiser, and had no work scheduled beyond 1949....
[Washington politicians were also angered by the air force's decision to build the B-47 bomber in Wichita rather than Seattle. Washington politicians from both parties complained loudly.] Democratic Senator Warren Magnuson ... met frequently during the summer with military officials and others in the capital.... The Republican governor, Arthur B. Langlie, ... charged that the air force, by wrecking the regional economy, would open up opportunities for Communists in West Coast politics....
Meanwhile, the Seattle Chamber of Commerce, on August 16, 1949, announced the establishment of the Save Boeing Committee, which soon became, more appropriately, the Keep Boeing—Defend Seattle Committee.
The battle for Seattle took on large proportions. In the city, business and labor organizations, fraternal and service groups, officials in local government and the political parties, veterans, and newspapers joined in. The range of participation indicated how valuable Boeing now seemed to the whole community. Furthermore, other groups, especially business and labor organizations, from as far away as Yakima, Walla Walla, and Spokane got involved in the cause, for the economic health of Boeing and Seattle affected eastern Washington markets for aluminum, fruit, and grain....
The campaigners made use of several arguments in publicizing the cause. Air force cutbacks harmed Boeing workers, who were being forced either to move away or to join the ranks of the unemployed. Air force policy would seriously damage the economy of Seattle and the Northwest. National security would suffer from the breaking up of a highly qualified work force. And finally, Seattle was no more [militarily] vulnerable than other parts of the country....
[T]he campaigners did eventually get what they wanted from [the air force]. While defending the decision to build the B-47 in Wichita, [air force leaders] assured citizens and lawmakers that the air force did not intend to move Boeing from the West Coast and promised the Seattle facility enough business to maintain employment well above the pre-World War II level....
Although Boeing employment in Seattle dropped close to 19,000 by the spring of 1950, ... [politicians'] battle for Seattle positioned the city to benefit from the military buildup proposed by the National Security Council in the early months of 1950. The [National Security Council] defined as global the Soviet challenge to which the United States must respond. Persuaded that military spending would stimulate rather than damage the economy, they called for development of all means required to frustrate Kremlin ambitions. Believing Soviet strength to be expanding dangerously and the likelihood of war to be increasing, they insisted that the U.S. be willing to spend about $50 billion per year on the armed forces. To make the U.S. capable of responding to every kind of military challenge, they urged that all three branches of the military be enlarged and strengthened.
[This new proposal from the National Security Council] expressed a change in thinking in high levels of government. Another change of significance for Boeing and Seattle had taken place in public opinion. Atomic and hydrogen weapons were now widely perceived not as something to be negotiated out of existence but as the best means of national defense. Nuclear bombs should be constructed and stockpiled to maintain American supremacy. "The dread destroyer of 1945 had become the shield of the Republic by 1950s," a historian has written of the change. Once such thinking was fully implemented, a firm that built a means of carrying [nuclear bombs] would surely prosper.
Truman's decision early in the summer of 1950 to intervene in the Korean War provided an opportunity to implement [the National Security Council's plan]. The military budget now soared from the $13.5 billion [in] 1951 to $50.4 billion [in] 1953....
Boeing received a large share of air force funds. It expanded its Seattle work force once again, ... constructed new buildings, [and] extended runways.... The most rapidly growing part of the manufacturing economy of Seattle and King County, [Boeing] employed 28,000 people there by the summer of 1951 to work on C-97s, guided missiles, a device for inflight refueling, B-50s, and the B-52. [When the Air Force placed an order for many more B-52 bombers in July 1952, during the Korean War, Boeing grew even faster.] ...
By then the company was making money, but [Boeing President] Bill Allen remained dissatisfied with the company's relations with the federal government. He disliked the outside control that came with the money and resented critics who charged that Boeing made too much from military sales. Dependence on government also brought with it uncertainty and [low] profit margins.... Perhaps, he reasoned, these drawbacks could be eliminated [by] success in the commercial market.
The company had begun to plan a jet airliner in 1949, and it had sought subsidies from the federal government in order to compete with the British, who were subsidized and ahead in developing a commercial jet. Boeing management found it "incredible" that federal funds "support our agricultural products, our ship building industries and our foreign commerce but no avenue is open to the United States Aircraft Manufacturers." It predicted that jet transports of the sort Boeing proposed would "assure our commercial world air supremacy for years to come."
Failing to get the proposed subsidy [and] fearful of the costs of building a jet airliner, ... Allen held back, but by 1952, large military contracts and improvement in company earnings encouraged him.... On April 22, he persuaded his board of directors to invest heavily in what became the 707. He moved before any of his American competitors....
The risky venture turned out to be a great success. Boeing would test the plane in 1954, begin to receive orders for it in 1955, begin deliveries in 1958, a year ahead of what was by then its chief competitor, Douglas's DC-8, and hold the lead in sales of commercial jets. The company achieved this success even though it was known mainly as a producer of bombers....
Although the company was seeking to reduce its dependence on government, government was the springboard for the change. Boeing's financial resources for [developing the 707] came from its sales to the military. The company gained the knowledge and the ability to [build the 707] from its experiences with jet bombers, the B-47 and the B-52. The decision to go forward with the 707, it should be noted, was made a week after the first flight of the B-52. At that point, Boeing had more experience with large jets than any of its American competitors.
In making the 707 decision, Allen was not trying to free Boeing from the ... political process. In fact, he planned to sell the 707 to the military as a tanker and transport as well as to the airlines, and he assumed that military business would continue to be very important for the company, perhaps its main activity.... His aim was simply to add a commercial market to the established military one. Boeing would remain in politics.
By the end of Truman's presidency [in 1953], Boeing operated in a [very friendly] political atmosphere.... The rising star of Washington State politics was Henry Jackson, elected to the Senate in 1952.... [Senator Jackson] saw nuclear weapons as the centerpiece of American defense forces and insisted that the U.S. must continue to have more bombs than the Soviet Union. Reliance upon them, he argued, as did other champions of air power, would be less expensive than reliance upon the "conventional" weapons of the army and navy. Jackson's conception of a strong America gave, of course, a large role to Boeing-built bombers.
It seems unlikely that a politician [hostile to] Boeing could have succeeded in Washington State politics [in the 1950s], for the people of the state's biggest city had developed a strong sense of dependence on the Boeing Company. They demonstrated that most obviously in the 1949 battle for the continued building of bombers in Seattle. Rallying to Boeing's defense, Seattle citizens sought to influence thinking and decisions within the air force. [Boeing's] subsequent economic success derived in significant part from its political successes during the Truman years....
Boeing succeeded first of all because it served the interests of [the air force]. After World War II, it received additional help from Seattle, for by expanding, the company served the city's interests in growth and jobs. [Seattle residents and Washington politicians] brought Boeing success in politics that enabled it to become the world leader in its specialty: producing jet-powered commercial airliners.