Mr. Purvis Buys New Planes

The basic fact about aircraft manufacture is that no customer ever gets an up-to-date airplane. By the time the first ships of any order are delivered, a better plane is under test, a still better one is taking shape on the drawing boards. But to foreign purchasers of U. S.-made military planes this principle of initial obsolescence has long been complicated by a Federal regulation that made their buys relatively more out-of-date than a motorcar with a floorboard gearshift is in 1940. The rule: no aircraft type could be sold for export until it had been in U. S. Army or Navy service for one year.

Against this rule the Allies made no headway so long as World War II was merely a threat. The French bought obsolescent Curtiss P-36s, surprised most U. S. airmen after war came by showing that they could put on a first-class show against the more advanced Messerschmitt log. The British bought Lockheed Hudsons, North American trainers, long past the secret stage. The one-year rule was first broken last September when the French were allowed to buy a new Douglas attack-bomber. Everybody knew the reason: the Air Corps was already interested in a new and better Douglas, now in production.

When Arthur Blaikie Purvis became head of the British Purchasing Commission last November, he set out with associates of the French Commission to see what could be done at Washington. To get the Army's latest, Mr. Purvis & friends had many a persuasive argument. Strongest to many an aircraft manufacturer was that the Allies had plenty of money to spend, might not spend it freely unless they got the best. Strongest to the Army and Navy was that Allied purchases would shoulder the development expense of better ships hitherto borne by the U. S. military services. Compelling to many a politician was the fact that most U. S. citizens (83.1% by FORTUNE'S poll) want the Allies to beat the Germans, would just as soon give the Allies all the help they will pay for in cash.

Few weeks ago it became known that the one-year rule has been chucked out the window. Douglas' new bomber, Bell's cannon-carrying pursuit ship Airacobra, Curtiss' P-40D pursuit, the new two-engined Lockheed and Grumman pursuits were released for sale to the Allies. Along with them went the Army Air Corps' most prized engine design: the liquid-cooled, 12-cylinder Allison.

Last week in Washington the Anglo-French Purchasing Board released figures that put aviation indisputably at the head of the war-baby class. To U. S. aircraft and engine manufacturers had gone recent and new orders of more than $200,000,000. for something like 2,450 planes, 3,200 engines. Total of all U. S. aircraft pur chases by the Allies since the outbreak of war: $650,000,000, almost three times the total of aircraft sales for 1939, more than twice the aggregate value of U. S. aero nautical exports to the world market in the past 18 years. More was to come. Before the Allies have finished the "first phase" of their aircraft procurement program (reputedly within the next few months), they will place another $350,000,000 of orders for delivery in the next 18 months. Manufacturers, hanging on the tail of a high-flying business kite, expect the orders in plenty of time for delivery of ships early in 1942 if they are still needed.

The Allies got the late models they wanted, but U. S. Government and industry drove a hard bargain. The Allies will reimburse the Army and Navy for the cost of developing the ships they now buy (guesstimate: $5,000,000 to $6,000,000).

Furthermore, the Allies will pay some manufacturers the cost of expanding their plants. To two of the big three military engine builders, Wright Aeronautical and United Aircraft (Pratt & Whitney engines) already has gone some $5,000,000 in French money, an outright grant for building new plant capacity. Last week close-mouthed Arthur Purvis announced that more plant money was going to the engine builders, not only Wright Aeronautical and Pratt & Whitney but General Motors' Allison division. With such help, production of the big (and only) three highpowered engine builders should by year's end hit an annual productive rate of around 30,000 (present rate: 20,000).

No man to tell all he knows, Britain's Purvis last week gave no breakdown of his first $200,000,000-plus in orders for the newest model U. S. ships. But the general division was soon noised about. To Douglas went the big slice: $75,000,000 for 750 attack-bombers. Curtiss got around $57,000,000 for 1,500 new pursuits. Bell $18,000,000 for 200 Airacobras. To the three engine builders went some $52,000,000, most ($34,000,000) to Allison, already busy with expansion of its Indianapolis plant and making some parts (e. g., crank and camshafts) in G. M.'s Cadillac factory. Among plants in line for next orders: Martin, Lockheed (reported expecting $125,000,000 for pursuits and bombers), possibly Grumman and Consolidated, which makes flying boats and bombers. Also in line was many another plant, if not for its own product at least for farmed-out orders, or for aircraft parts. To labor, to the overworked machine-tool industry, to instrument makers like Sperry and Pioneer, to accessory builders will go an undetermined slice of the business. With a backlog of around $900,000,000 in unfilled orders, the aircraft industry is too busy to worry about who gets every dollar & cent.

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