Business Agreement

People were astounded to hear early last week that not one single fighting airplane was even on order as a result of the new emergency defense program. But by week's end thousands of planes--about 4,200--were almost on order. This progress was no thanks to the elected statesmen of the people. They were still trying to make up their minds on rules about profits and taxes and other political jackstraws.

Planes were at last on order--almost on order--thanks to the willingness of the aviation industry to start spending money without any guarantee that they were ever going to get it back. Six key points of U. S. defense are Curtiss-Wright, Lockheed, Douglas, Consolidated, North American and Glenn L. Martin. Representatives of these six met in Washington with big Bill Knudsen of NDAC, went away with a businessman's agreement that what they probably would get in time from the Government was: 1) estimated cost plus 7% on their contracts; 2) the right to charge off (amortize) plant expansion investment within five years.

Gratifying result was that this week manufacturers buzzed through the Army and Navy offices ironing out last wrinkles before signing the $80,000,000 in contracts already waiting for them. Meanwhile, from NDAC came word of one big manufacturer who had gone ahead building without contracts, hoping for the best. At Inglewood, Calif., production-wise President James Howard Kindelberger of North American Aviation has been turning out advanced training planes, stacking them on the shelf, for delivery. Boss of a company that is 29.1% owned by Bill Knudsen's General Motors Corp., "Dutch" Kindelberger was banking on promises and the urgent necessity of emergency armament. In producing the planes that the services will need first and most in 1941, he was away out in front.

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