TRANSITION: Turn on the Heat

The War Department last week turned the heat on the avalanche of contract cancellation work that U.S. industry faces at war’s end. The furnace to be used for this job was called, in governmental gobbledygook. Predetermination of Contract Cancellation. That jawbreaker meant something quite simple: war contractors can now pretend that their contracts have actually been canceled. Thus they can clear out of the way much of the time-eating labor that would hold up a swift shift to making peace goods.

The plan is the work of dark, smart Brigadier General Albert Jesse Browning, 45, the Utah-born ex-wallpaper manufacturer who is the Army’s assistant director of materiel. General Browning carefully tested the plan on some 15 companies, then had it approved by Contract Settlement Boss Robert Hinckley. The plan permits contractors right now to begin filling out the forms needed to wind up a contract, and to work out an agreement on costs and profits, to take effect the moment the contract is actually canceled.

For example, Studebaker Corp. “predetermined” one contract, found that $1,061,000 worth of materials would be valueless except as scrap when the contract is ended. Studebaker offered to buy the materials for $15,590. Come actual cancellation, Studebaker will simply send in its check, move the materials aside so as to lose no time shifting to auto production. Estimated time saved: 30 days.

The big drawback is that the plan comes late. Even optimistic General Browning fears that it may prove a better cushion for industry against the shock of the end of the Japanese rather than the German war.