During World War II, Detroit automakers stopped passenger car production and put all their resources into tanks, military trucks, jeeps and other war materiel. Now, some distilleries are bottling hand sanitizer, while Hanesbrands is making masks.
The U.S. government took over Detroit and built entire industries during World War II. Are there lessons to be drawn for the coronavirus response?for its ties to China . Though the law stems from the Korean conflict, it is the Second World War that perhaps more closely mirrors the global battle that has broken out against the coronavirus, which has spread to every continent except Antarctica and chased billions of people out of their workplaces and into their homes. In response to the Nazi aggression in Europe and the Japanese bombing of Pearl Harbor, the U.S. created and alphabet soup of federal agencies that rivaled the New Deal. Among them were the War Production Board, the Office of War Mobilization, the Office of Price of Administration and the War Food Administration, just to name a handful. Yet, the government nearly fumbled the ball at first, trying to lure the private sector into building a war machine using financial tools such as tax incentives and accelerated write-offs of capital investments, said Alexander Field, an economics professor at the Leavey School of Business at Santa Clara University. “It was not snap our fingers, we are going to build 100,000 aircraft,” said Field, who is now writing an economic history of the period and sees parallels to today’s struggle against the coronavirus. “Many manufacturers did not want to use their own funds to build specialized facilities and acquire special-purpose machine tools to manufacture goods that they knew would have a limited shelf life. We bumbled a lot in World War II and with a really determined effort we could have screwed it up and lost the war.” Mark Wilson, a history professor at the University of North Carolina Charlotte, said the government ultimately realized that the fastest way to get the war materiel it needed was to simply finance the construction of new factories and then have private corporations with expertise run them — so-called GOCO plants — or to simply guarantee the government would purchase the products the private sector produced. Advertisement A worker at a Dodge plant converted to produce trucks for the U.S. Army in August 1942. (Corbis / Getty Images) “If you wait for the private companies and the bankers to calculate whether this is going to make sense for them economically, you can just create artificial delays,” said Wilson, who authored a 2016 book, “Destructive Creation,” which argues that plants newly built by the government to produce ships, aircraft, tanks and other key materiel played a bigger role in the war effort that conversions of existing plants. “They did it remarkably quickly in a matter of months, but it was not something you could turn on in a matter of days,” he said, adding that the pace could likely be sped by modern technology such as computer-aided design and modular construction (which the Chinese used to build their two hospitals). What is needed today are gear and supplies such as hospitals and beds, ventilators and masks, test kits and cleaning agents. And even if the production is vast, it would probably amount to a fraction of the $3 trillion or more in today’s dollars spent during World War II by industry and government on manufacturing and equipment, according to one estimate. Still, World War II can provide a road map, Wilson said, with the government guaranteeing the purchase of medical equipment, and encouraging and overseeing the licensing and sharing of proprietary designs, which was how General Motors and Ford were able to build aircraft engines designed by Pratt & Whitney in the 1940s. On a simpler level, Hanesbrand has already said it plans to share its mask design with other apparel makers. Wilson added that “great calamities” such as the Depression and World War II turned out to stretch for years, and authorities should not make the mistake of worrying about overproduction or waste and “not needing it in the end.” Field noted that whatever equipment healthcare providers do not need after the outbreak subsides could be stockpiled by the government for a strategic reserve. The giant war mobilization effort also had the effect of driving down the unemployment rate, which averaged 9.9% in 1941 but fell to less than 2% as the conflict ground on — a consideration today as millions are being laid off due to the virus outbreak. Americans also can take heart on how fast the government and manufacturers were able to respond when the U.S. faced a manufacturing crisis in 1942 after the Japanese invaded Singapore. That cut off 90% of the country’s supply of natural rubber, forcing the U.S. to establish a synthetic rubber industry at breakneck speed. “We had no domestic sources of natural rubber. That was a real potential catastrophe. It was close,” Field said, noting the government’s Defense Plant Corp. ultimately spent about $800 million to build 51 factories that were not privatized until 1955. Jerry McGinn, a former Defense Department official who oversaw implementation of the Defense Production Act from 2015 to 2018, said that building facilities under the act requires the government and companies to share the capital investment and for companies to document their expenses and pricing so profits are “fair and reasonable.” After the contract is over, the government then turns over ownership to the company for a nominal fee but retains perpetual rights to production when needed. Rows of army ambulances parked at a Dodge truck plant in Detroit in August 1942. (Arthur Siegel / Anthony Potter Collection / Getty Images) The current bureaucratic process, involving requests for proposals and other steps, to get rare-earth metals plants built will likely take about 18 months before dirt is even turned. However, McGinn said that the timeline could be sped up to deal with the coronavirus. “This being the Manhattan Project, you can accelerate dramatically by perhaps half, but it is just not going to happen in a week,” said McGinn, who is now executive director of the Center for Government Contracting at George Mason University’s business school. Another faster way for the government to contract for what it needs, he said, is for the government to simply “throw money” at an industry, such as by designing and producing goods through pilot projects. “There are lots of different ways that the government can engage with industry to meet a need, some of these are really rapid,” he said. Erik Gordon, a professor at the University of Michigan business school, said the auto industry initiative to speed the manufcature of respirators is moving ahead on its own. And while a cynic might call it a move to create good publicity for a round of bailouts, it also highlights how the automakers and their suppliers can “manufacture in large quantities once they get ramped up, once they get the right tools in place to make the actual parts that are needed.” But he said people often forget in our high-tech society that software can’t fix every problem, something to consider even as GM is working with a ventilator maker using proven, existing designs. “You have to extrude metal, you have to bend metal, you have to weld metal because there is no such thing as a software ventilator,” he said, estimating it would take at least a month to get factories retooled and start making the devices. Read more: Los Angeles Times
The manufacture and supply chain are not in USA any longer. trump doesn’t learn lessons The primary lesson to learn is that you need true leaders to make it happen, and sad to say we don't have one with Trump. We are not at war. Quit being drama queens. Because ALL out EFFIN manufacturing is in CHINA thanks to Clinton, Bush and OBama!
The gov't DPA was enacted in WWII; Don has invoked the DPA, but no orders have been placed yet as of today so a big question is why not? Yet fema told GM NOT to make ventilators❗️ Why⁉️
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