Radio age research, manufacturing, communications, broadcasting, television (1941)

th.ise the cijuipmfnt anJ the l.ick of volume to liquidate the cost of the facilities in a reasonable time. Many small businesses serve large businesses by being specialists in one or more fields of manufacture. Small business functions effectively when it is able to serve several other businesses, either large or small, because it li.is facilities which can be operated economically due to the combined volume of its customers. Furthermore, their business is flexible and can be readily adapted to the changing requirements of their many customers. In addition to cost, the utilization of subcontractors frequently speeds delivery of completed items. By work- mg closely with his subcontractor, a prime manufacturer can so arrange schedules that the many components pro- duced by outside firms will arrive at production lines in time to permit final assembly not only in the most effi- cient and least costly manner but also in time to meet specified deadlines. Prompt delivery, particularly on mili- tary contracts, can be vital. The prime contractor who assumes the responsibility for such delivery to the mili- tary relieves the Government of the hundreds of details involved when many companies, both big and little, are teamed together to produce weapons and related devices under military contract. More often than not, this re- sponsibiliy involves far more than mere engineering assistance, expediting of required raw materials, and sometimes financing of needed materials. The prime contractor also supplements the work of Government inspectors and frequently sees to it that contracted components meet Government specifications. The testing and inspection facilities required for many military items often are intricate and many small busi- ness firms could neither equip, staff, nor finance them. Thus it is true, at least insofar as our company is concerned, that a prime contractor contributes far more than the engineering of a new device and its assembly and production. W"alkie-Talkie Cited as Typical I would like to mention a few examples to illustrate our work with subcontractors on defense orders gen- erally. They are more or less typical. One of a great many devices we are working on today is the walkie-talkie for the Signal Corps. The walkie- talkie is a portable radio station containing its own trans- mitter, its own microphone and earphone circuits, and its own power supply. It is designed to be carried on a soldier's back like a knaps.ick. The w.ilkie-talkie being used right now in Korea performs the same general function as the walkie-talkie that w.is first introduced and used in World War II. But there are several major differences. As you can appreciate, weight is of major impor- tance— particularly since the walkie-talkie is intended for use by troops in battle where maneuverability can frequently mean the difference between life and death. The old walkie-talkie weighed 50 pounds. Our new walkie-talkie weighs 2-1 pounds — .1 rcdm tion In wiiirlu of over bO^'c. In addition, the new walkie-talkie has a range that is almost double that of the earlier model. In many other ways too — such as its ability to withstand pro- longed immersion in water — the new walkie-talkie is a much more effective instrument. After our design work w,is completed and accepted by the Signal Corps, we established our production schedules. To help with this important task, we called on 1S5 suppliers of precision parts. Some of these sup- pliers are classified by the Government as large business firms. But most of them are small. In fact IM (or 71'7 ) of the 185 companies collaborating with us on the new walkie-talkie are small business firms. 61% of Dollar Voliiine to Small Business In dollar volume the amount of subcontracted busi- ness to large business is 39'^r and 6K; to small business. We recently completed an analysis of another of our military contracts — this one covers a classified elec- tronics system being made for the Air Force. Parts and supplies for this contract are coming to us from many scattered sections of the country — from Lake City, Minn.; Aurora, HI.; Muskegon, Mich.; Wyn- cote. Pa.; Waltham, Mass.; Davenport, Iowa; Dayton, Ohio; and even Hollywood. Calif. The 307 subcontractors teamed with RCA on this contract are located in 18 states. We sent out a ques- tionnaire to these subcontr.ictors to find out where they, in turn, were purch.ising their raw materials and com- ponents. Sixty of them replied. These sixrj' are buying from 365 different suppliers located in 25 states. Of the 365 sub-subcontractors, 55 per cent are large concerns and 45 per cent are "small business." It is natural that the percentage here is slightly in favor of large business because our sub-subcontractors include copper and brass manufacturers, steel concerns and chemical producers. I am well aware of the fact that the small business man today is f.iced with unusual difficulties, just as we are. I realize, too. that the necessary procedures for getting into defense production are foreign to his normal way of doing business. Tlie point to emphasize, how- ever, is that they are necessary. If the small business man will accept these conditions and adjust his way of doing business to the economic conditions which prevail. I sincerely feel he will find the means to keep his busi- ness going. RADIO AGE 19