“What have you got there, Bill?” Foley wanted to know.
Knudsen showed him. It was two massive slabs of steel welded together around the outside. “They say welding’s not as secure as old-fashioned rivets,” Knudsen said, hoisting it up to his shoulder. “So I went to Detroit to get it done. Now I’m going to find those Ordnance people and show them.”44
It turned out the welding not only sped up production (RHA welded easily, without using the hundreds of costly rivets) but was actually safer, as the Army found out in December 1941 when it ran firing tests at the Aberdeen Proving Ground, north of Baltimore. The Ordnance people discovered that heavy machine gun fire could knock the M3’s rivets loose, which then became deadly projectiles flying around inside the tank.45 A direct hit by an artillery shell was even more lethal. It was too late to change for the Grant, but welding became standard for the next and most famous generation of American battle tanks: the M4 Sherman.
It was a historic turning point, and not just because of the welding. The contract Knudsen, the Army, and Jesse Jones’s office drew up on September 9, 1940, for the Reconstruction Finance Corporation to fund Continental’s production of Grant tank engines for Great Britain justified the expense as being “essential for the national defense of the United States.” It was the first time a government document acknowledged that supporting Great Britain against the Axis had become a national priority—indeed, as vital to America’s defense as supplying our own armed forces.46
But could Britain hold? That was the question to which no one dared to guess an answer.
Everything depended on the Royal Air Force. It had lost nearly half its airplanes in the battle for France. Fewer than seven hundred Spitfire and Hurricane fighters were ready to face an onslaught of thousands of German bombers and fighters. British factories were working flat-out to produce sixteen hundred planes a month. But those planes also needed engines, especially the twelve-cylinder in-line Merlin engines built by Rolls-Royce, which gave the Spitfire its crucial edge over the Nazis’ best fighters. No one in steel-starved Britain knew where they were going to come from in those numbers.
Purvis approached Knudsen. Could the Americans build the Merlins if Rolls-Royce supplied the plans? Knudsen said yes, and made yet another phone call, this time to his old friend Edsel Ford.
Although his name would live on by attachment to the company’s biggest marketing flop, Henry Ford’s eldest son was a shrewd manager of car production and men—and he trusted Bill Knudsen. Edsel agreed that Ford would produce nine thousand of the Merlin engines under a non-royalty license. Two-thirds of them were to be shipped back to Britain, and one-third would remain in the States to boost American airplane production.
A few days later, Knudsen’s phone rang. It was a subdued and chastened Edsel.
“Bill, we can’t make those motors for the British.”
Knudsen was stunned. “Why?”
“Father won’t do it.”
“But you’re president of the company,” Knudsen protested.
“I know,” Edsel Ford replied helplessly, “but Father won’t do it, and you know how he is.”47
Knudsen found an Army bomber to fly him to Detroit, and confronted the auto industry’s patriarch.
“Those motors for the British,” he said when he came into Ford’s office. “Edsel telephoned me and said you wouldn’t make them.”
“Nor will we.”
“There will be a hell of a stink about it if you don’t.”
But the old man was adamant. He was still in the throes of isolationist sentiment and strongly believed that the war in Europe was none of America’s business—and that any money used to prop up a tottering British Empire was money wasted. He had initially endorsed the Rolls-Royce Merlin engine contract when Edsel and production chief Charlie Sorensen described the engine’s superior performance and what a boon it would be for the Army Air Corps. But he had already told the press and the world that he would never make war supplies for any foreign nation—and when British air minister Lord Beaverbrook announced the Merlin as proof that America and Ford were now standing behind Britain, Henry Ford exploded with fury. The deal was off, he declared. And no amount of persuading or pleading from Knudsen could move him.
Their raised voices carried out into the hall. “You’re mixed up with some bad people in Washington,” people could hear Ford telling Knudsen, “and you’re headed for trouble.”48
Knudsen came back with, “We have your word you would make them. I told the president your decision, and he was very happy about it.”
At the mention of the hated Roosevelt, Ford blew his top. “We won’t build the engines at all,” he barked. “Withdraw the whole order. Take it to someone else. Let them build the engine; we won’t.”
The door was flung open and Knudsen headed down the hall. His face, according to one eyewitness, was purple with rage. Henry Ford kept shouting, “They want war, they want war.” Men who had known him almost forty years had never heard him more furious.49
For Knudsen it was a chilly silent drive to his summerhouse on Grosse Ile. In addition to delays and bottlenecks in airplane production (instead of 50,000 planes, they were looking at 3,750 for the balance of 1940), Knudsen now had one in engine production—not just for helping the British but America’s own defense buildup. Yet as he leaned back on his seat while the driver headed for the bridge over the Detroit River, Knudsen knew the flap with Ford was only part of a larger problem. America was not at war, yet Roosevelt, the British, and other policy makers were acting as if it were. They still assumed the nation’s industries could produce war materiel more or less on command. If rearmament wasn’t going to fall hopelessly and helplessly behind, something would have to be done to entice American business to get in the act, and fast.
The dreary struggle over amortization would drag on until September. Even those American businesses tempted to get into defense contracting for patriotic reasons still held back, fearful of being stuck with having to pay for retooling or hiring new workers in order to meet orders the government would never make.
The only solution was for the government to pay them—that is, in the form of advances on contracts for war work. This was something unimaginable in the parsimonious old prewar days—and drawing up contracts in which the government agreed to cover all costs while providing the contractor with a fixed fee set at 7 percent of costs was precisely what had set an outraged Congress in motion against the “merchants of death” after the First World War. But at Knudsen’s nod, the practice expanded, and on July 2 Congress gave its reluctant stamp of approval. From then until the end of the war, the War Department would put up more than $7 billion in advance payments to its civilian business contractors, and the Navy Department $2 billion—and the cost-plus contract would become standard.50
Many shook their heads over the new arrangements, especially in Congress. Senator Harry Truman, chairman of the Senate’s committee to investigate defense production, compared the whole thing to Santa Claus handing out gifts at a church Christmas party. Later, others would see in the new arrangements the ominous outlines of what would come to be called the military-industrial complex.
All the same, Knudsen, like the president himself, was painfully aware of the deadlines everyone faced that fateful summer. America’s way of thinking about how to arm for war, and how to pay for it, was about to undergo a radical change. Knudsen’s phone calls to his friends in Detroit had marked the first tentative steps in that direction.
That still left Knudsen with the problem of what do about the Rolls-Royce Merlins. When he got to Grosse Ile, he went to his study to make one more phone call. This one was to Alvan Macauley, chairman of Packard Motor Car Company.
“Alvan,” he said, “I’m leaving for Washington in a few hours and we need to talk.”51
For thirty years Macauley had been head of Packard, the maker of high-end luxury cars whose Model B, launched in 1900, introduced the first steering wheel and the first gas pedal
. Macauley was a strait-laced irritable man who detested people who had gold-capped teeth or jangled coins in their pockets—or insisted on sporting long names.52 His real passion, however, was keeping Packard competitive in a market increasingly dominated by Ford, Chrysler, and GM. He did this by making Packard’s sleek and powerful multicylindered sedans the gold standard of the luxury market; by being ready to admit mistakes when an ad campaign or new auto line misfired; and by hiring as his chief engineer a man of genuine automotive genius.
Jesse Vincent was an Arkansas farmer’s son who quit school after the eighth grade and learned his mechanical engineering through a correspondence school course. As historian James Ward notes, Vincent’s technological breakthroughs at Packard read like a history of the modern car: the first four-wheel brakes, the first air-conditioning, the first power booster brakes, and the first independently manufactured automatic transmission, the Ultramatic.53
During the First World War, Vincent also worked on the Liberty aircraft engine, and got to know Knudsen well. So it was no surprise when Knudsen’s doorbell rang and Vincent and Max Gilman, Packard’s president, were standing there at Macauley’s request.§ Knudsen explained his problem: a great aircraft engine, and no one to build it. Could Packard do the job?
Vincent and Gilman jumped at the chance to work on one of the world’s most advanced engines. Here was a chance to show off Packard’s engineering expertise, as well as an exciting challenge. Stealing a march on Henry Ford didn’t hurt, either.
Gilman told Knudsen he’d consider any deal the government wanted to put in front of him. The big Dane thanked him, and they shook hands as Knudsen headed for the door and his plane back to Washington. Two days later, on June 26, Gilman and Vincent found themselves in the nation’s capital, sitting across from Knudsen and his aviation expert, Dr. Mead, as Mead and his assistants explained the technical features of the Merlin XX engine. A day later they were back on the floor of the Packard plant, making plans for an entire new wing where they would be completing nine thousand of the British-designed engines.54
They still had no signed contract. All they had was Knudsen’s handshake and a box full of Merlin XX engine parts shipped over from Ford. Yet by the twenty-eighth, Vincent had his engineers in the drafting room, laying down schedules for completing each stage of the production process. The company built its own machine tools and dies for parts, built a new factory wing—and still had enough time and workers to bring out their latest car model for 1941, the Clipper.
The Merlin engine blueprints were so secret that the British government arranged for a battleship to carry them across the Atlantic. Morris Wilson was the Montreal banker Purvis arranged to pick them up, and when HMS Nelson docked, Wilson arrived armed with a large suitcase. The Nelson’s captain asked him what the case was for.
“To carry the plans, of course,” Wilson said.
The captain only laughed, then led him down into the hold. He pointed to a crate the size of a railway freight car, marked top secret.
“There are your plans, Mr. Wilson,” the captain said, and walked away.55
Back in Detroit, Vincent and his engineers discovered they had to rewrite this vast mass of paper and intricate specifications, from start to finish. They not only had to be translated from English to American measurements, but made exact enough to fit the mathematical tolerance level the auto industry demanded for mass production—one ten-thousandth of an inch.
Nonetheless, by August 1941 Gilman and Vincent had a working prototype for testing. It proved as reliable and resilient as its British counterpart. The difference was that whereas the English Merlin was still made by hand, with workmen still shaping every part to fit each particular motor, Packard’s mass-production approach allowed relatively unskilled labor to do the same job three times faster. Indeed, one-third of Packard’s new employees were women who had never set foot on a factory floor.56
The first nine finished engines came off the assembly line in January 1942. During the war Packard would build more than 55,000 of them. Vincent even developed a maritime version of the Merlin XX. This included a supercharged 1800-horsepower model, four of which could send a 104-foot Navy PT boat hurtling across the water at fifty miles an hour. The aircraft version would be installed not just on the British Spitfire, Hurricane, and the twin-engine Mosquito; it would power to victory the finest fighter plane of World War II, the P-51 Mustang.
It was one of the production triumphs of the war—one of many. Yet while the first nine engines had cost both the government and Packard more than $6.25 million, the company’s profit for the entire Merlin deal came to barely $6,000.57
Merlin engines weren’t the only things coming across the Atlantic that summer.
In August a team of British scientists and engineers arrived in New York on the liner Duchess of Richmond. Like the Magi in the Bible, they bore gifts of inestimable value—not frankincense and myrrh this time, but the fruits of British technology and science.
They included proximity fuses, a working model for a power-driven airplane gun turret, and the cavity magnetron, the heart of a device the Brits called RDF but the Americans called radar. The team also brought news of a new aeronautical principle called jet propulsion.58 All represented new breakthroughs in the science of warfare that might shift the strategic balance—but only if they could be industrially engineered and mass-manufactured. The British knew they couldn’t do it, but they sensed Bill Knudsen and his American friends could.
The supply line to Britain was becoming a two-way thoroughfare. British science and American Industrial know-how would become an unbeatable formula—and nowhere more decisively than in the last gift the men on the Duchess of Richmond were able to offer.
It was a discovery by a German scientist, of all people, named Otto Frisch. Scientists on both sides of the Atlantic were trying to figure out how to set off a nuclear chain reaction, and Frisch theorized that if you used a peculiar substance called uranium 235, only a few pounds of it would be needed to do the job.
Getting those few pounds was the difficult part. It would require a series of industrial processes no one had conceived of, let alone built. Yet two years after the Duchess of Richmond returned to Britain, a clutch of American companies—Allis Chalmers, Houdaille-Hershey, and DuPont among them—would gather in the deep Appalachian wilderness of Oak Ridge, Tennessee, to do just that. Under the code name “Manhattan Project,” their engineers would turn a formula on a chalkboard into the most decisive weapon of them all.
* * *
* Later the British got their own version, which they dubbed the Baltimore, which the U.S. Army Air Force also adopted and designated as the A-30.
† One of those would change the course of the war. British representatives went to North American Aviation to see if the California company would agree to build a rival firm’s plane, the Curtiss P-40. North American president James “Dutch” Kindelberger said he could design and build a much better fighter if they wanted. The British agreed, but only if he could deliver a flyable prototype in 120 days. What Kindelberger delivered in just 100 days became the best tactical fighter of World War II, the P-51 Mustang.
‡ A single Wright Cyclone 14-cylinder 1700-horsepower engine required 8,500 separate parts, 80,000 machine operations, and 50,000 inspections.
§ Max Gilman was a Wisconsin boy born to a family so poor he never mentioned them in the rarefied aristocratic atmosphere of Packard. Still, Alvan Macauley knew it took a tough, no-nonsense man to make a profitable luxury automobile, so Gilman was Vincent’s first choice as president when he stepped down in 1938.
Meeting of the Automobile Manufacturers Association, October 1940. Bill Knudsen sits fifth from left, beside Packard’s Alvan Macauley, on his left. Edsel Ford is second from left. GM’s Alfred Sloan stands third from right. Courtesy of the National Automotive History Collection, Detroit Public Library
I shall say it again and again and again: Your boys are not going to be sent into any foreign war.
—Franklin D. Roosevelt, October 30, 1940
BY OCTOBER, BILL Knudsen could report that he had overseen some 920 contracts worth nearly $3 billion for the Army and $6 billion for the Navy. More than five hundred companies had been drawn in to make everything from ships and tanks and aircraft engines to eleven new gunpowder and ammonia plants.1 The joke later would be that anyone with a lathe and a train ticket to Washington was getting a war contract.
Everyone, it seemed, except Henry Kaiser.
He wasn’t quite finished with work on the high dam at Grand Coulee when he learned a big buildup of America’s military was coming and large sums of federal money would be spent. For the next four months, he collared every administration official who was prepared to listen to what Henry Kaiser could do to help America prepare for war—if only the government would give him a contract.
Kaiser had behind him his team from Grand Coulee and Bonneville: his son Edgar, Clay Bedford, and chief engineer George Havas. The construction of Bonneville, an immense 1,027-foot dam holding back a larger volume of water than Boulder Dam, had taken four backbreaking years. “They said it couldn’t be done,” Kaiser said proudly, “but my kids went ahead and did it.”2 In his mind they were ready for anything—even breaking into an entirely new industry.*
The first Kaiser looked at was steel. All this war materiel was going to require more steel. Production among the major domestic suppliers was sharply down. Why not bring in a newcomer?
From the start this required a partner who knew something about steelmaking. Kaiser turned to the president of Republic Steel and the king of the Little Steel companies, sixty-three-year-old titan Tom Girdler. He was perfect for Kaiser. Tough and self-made and born in Clark’s County, Indiana, Girdler had worked in his uncle’s cement factory until graduating from Lehigh University at the turn of the century.3 Like Kaiser, he knew cement and construction. Like Kaiser, he had fought nonstop to grow his company in the teeth of the Depression (he became chairman of Republic three days before the Great Crash). Like Kaiser, he had a keen eye for new opportunities and talented subordinates.
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