MANUFACTURING: Victims of Defense

Last week, as the May Federal Reserve production index hit a new all-time high (see chart), a young OPMite named Peter R. Nehemkis Jr.* predicted that one-third of U.S. industry might be soon shut down for lack of business. Because of defense priorities, he said, ten industries are already facing eclipse. Chief victims, moreover, would be little businessmen. "It is one of the profound ironies of our defense effort that its total effect may well be to obliterate smaller enterprises. . . ."

Nehemkis did not name his ten doomed industries. But the manufacturers of die castings and their customers were probably among them. Last week the die-casting industry was a mirror of the inequities and ironies of a defense boom.

Over 95% of die castings (formed by forcing molten metal under pressure into steel) are made out of aluminum and zinc, both of which are under priority control. Without aluminum and zinc, the die-casting industry must fold up. Die castings are essential to countless defense products. Yet defense orders (which carry priorities) amount to less than 15% of the industry's business today.

It is estimated that by July 1942 there will be an aluminum shortage of at least 200,000 tons. The die casters need about 15,000 tons of aluminum a year to stay in business. The steel industry, using ¾ Ib. of aluminum (as a cleanser) to make a ton of steel, is now using about 30,000 tons. When steel uses aluminum, it uses it up completely, and around a quarter of its products require virgin metal. But die castings need only scrap, and represent a scrap reservoir. Yet all steel has an A-10 or better priority rating on aluminum, while die castings limp along in the Bs, getting only 10 to 40% of their 1940 consumption.

To conserve zinc, automakers have been urged to cut down on castings. They have not been asked to cut use of galvanized iron and steel, which in normal times consumes three times as much zinc as die casting. As substitutes for castings, they have turned to brass (which annually takes twice as much zinc as die castings or steel**).

The die-casting industry employs less than 25,000 workers and represents only 125 independent companies, most of them very small. But quite apart from the crucial 15% of its production that goes to defense, its demise would leave a colossal gap in the U.S. economy—through its 5,000-odd normal customers. Die castings are a sine qua non of hundreds of consumer goods from zippers to outboard motors, from clocks to vacuum cleaners, from fire extinguishers to drug dispensers, from an essential small piston rod for automobiles to a whole radiator grille.

Big customers like Singer (sewing machines, irons, etc.), could probably survive the loss of die castings, since they can fill their factories with defense business eventually, in many cases already have enough to live on. But Singer has some 20,000 salesmen, who are not trained for defense work, and who would then have nothing to sell. As for small users of die castings without defense work, many are in the soup already. Some victims: