AVIATION: The Cats of MIG Alley

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With the P-51, Kindelberger made good use of mass-production techniques. His methods: 1) design a plane with production problems in mind; 2) break down the most complicated jobs into simple separate functions; 3) keep the air frame from "getting too big too fast," i.e., don't make workers crawl in on their bellies if they can do the job before the parts are joined. North American's World War II production: 15,670 Mustangs, 9,816 B-25s and 15,498 trainers.

Rising Fortune. At war's end, like other planemakers, North American went into a dive. Its employment dropped from 91,000 to 5,000, its order backlog from 8,800 planes to 24. But unlike most of his competitors, Dutch Kindelberger shunned such products as aluminum canoes and caskets to take up the slack; he started producing the four-seater Navion private plane instead. As costs rose and orders sank, the Navion flopped (loss: $8,000,000) and Kindelberger sold off the project to Ryan Aeronautical in 1947. But with the Navion project, he was able to keep his topflight engineers working on new military designs, landed contracts for the B45 four-jet light bomber and the Navy's attack plane, the AJi, in addition to the F-86 Sabre.

Since then, North American's fortunes have climbed steadily. Five years ago, with sales of $94 million, it earned $6,800,000. Last year, with sales of $315 million, it netted $7,800,000, and its backlog of $1.5 billion is fourth biggest in the industry. Last week it declared a dividend of 75¢ a share, making the year's total 25¢ more than the $1.25 the year before. One project that Dutch Kindelberger hopes will pay off some day: atomic energy. One of the biggest contractors with the AEC, North American got into atomic energy after the war in hopes of developing it to power planes and missiles. Kindelberger decided (and Washington agrees) that atomic planes will not be possible for years, and dropped the project. Instead, his engineers designed a reactor that may point the way to commercial atomic power (TIME, June 15).

Kindelberger has fared just as well as his company. He gets $140,000 a year, plus $11,000 a year for a retirement fund.

The New Bosses. In the past, Kindelberger has done his share of griping at Washington inefficiency, particularly the Air Force's system of shuttling green officers in & out of procurement jobs, and its habit of not knowing exactly what it wants. But, he has nothing but good to say about the Pentagon's new civilian bosses; he is not worried about the projected $5 billion cut in the Air Force budget, since none of North American's contracts has been affected. He is hopeful, in fact, that the new team will develop a long-range air program for the U.S. to avoid the feasts and famines of the past.

By this, Kindelberger does not mean a program to freeze designs. Says he: "Such talk is as silly as freezing the design on a flintlock rifle when the enemy has a Garand. The first sketch of a plane is only the bare bones, and by the time you've finished you even have new bones." Nor does he mean any kind of subsidy program. "Over the long haul," says Kindelberger, "there is no practicable substitute for competition in maintaining the quality of product. Nobody has yet come up with a solution of how to spoon-feed an industry without stifling it."