JU fLc'S

Technology and Its Impact

on Labor in Four Industries

Tires/A!uminum

Aerospace/Banking

U.S. Department of Labor 

Bureau of Labor Statistics 

May 1986

Bulletin 2242
Technology and Its Impact

on Labor in Four Industries

Tires/Aluminum

Aerospace/Banking

U.S. Department of Labor 

William E. Brock, Secretary

Bureau of Labor Statistics 

Janet L. Norwood, Commissioner 

May 1986

Bulletin 2242

For sale by the Superintendent of D ocum ents, U.S. G overnm ent P rin tin g Office, W ashington, D.C. 20402
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' V ,
Preface

This bulletin appraises some of the major technological 

changes emerging among selected American industries 

and discusses the impact of these changes on productivity and labor over the next 5 to 10 years. It contains separate reports on the following four industries: 

Tires and inner tubes (SIC 3011); aluminum (SIC 3334, 54, 

55); aerospace (sic 372, 376); and commercial banking 

(Sic 602).

This publication is one of a series which presents the 

results of the Bureau’s continuing research on productivity and technological developments in major industries. 

Previous bulletins in this series are included in the list of 

b l s publications on technological change at the end of 

this bulletin.

The bulletin was prepared in the Bureau’s Office of 

Productivity and Technology, Jerome A. Mark,

Associate Commissioner, under the direction of Charles 

W. Ardolini, Chief, Division of Industry Productivity and 

Technology Studies. Individual industry reports were 

written under the supervision of Rose N. Zeisel and 

Richard W. Riche, by A. Harvey Belitsky (tires and inner tubes); Richard W. Lyon (aluminum); Charles L. Bell 

(aerospace); and Robert V. Critchlow (commercial 

banking).

The Bureau wishes to thank the following organizations for providing the photographs used in this 

study: Farrel Company (Emhart Machinery Group); 

LTA Aerospace and Defense Company; and NCR 

Corporation.

Material in this publication, other than photographs, 

is in the public domain and, with appropriate credit, may 

be reproduced without permission.

Contents

Page

Chapters:

1. Tires and inner tubes......................................................................................................... 1

2. A lum inum ........................................................................................................................... 10

3. Aerospace ........................................................................................................................... 24

4. Commercial banking.......................................................................................................... 35

Tables:

1. Major technology changes in tires ................................................................................... 2

2. Major technology changes in alum inum ......................................................................... 11

3. Major technology changes in aerospace........................................................................... 25

4. Major technology changes in commercial banking ....................................................... 36

Charts:

1. Output per employee hour and related data, tires and inner tubes, 1970-84 ............ 5

2. Employment in tires and inner tubes, 1970-84, and projections, 1984-95 ................ 7

3. Output per employee hour and related data, primary aluminum, 1970-84 ............... 18

4. Output per employee hour and related data, aluminum rolling, drawing,

and extruding, 1970-84.................................................................................................... 19

5. Employment in primary aluminum, 1970-84.................................................................. 21

6. Employment in aluminum rolling, drawing, and extruding, 1970-84 ........................ 22

7. Output and employee hours, aircraft and parts, 1972-82 ............................................. 29

8. Output and employee hours, missiles and space vehicles, 1972-82 ............................. 30

9. Employment in aircraft and parts, 1970-84, and projections, 1984-95 .................... 32

10. Output per employee hour and related data, commercial banking, 1970-83 ............ 42

11. Employment in commercial banking, 1970-84, and projections, 1984-95 ................ 43

Other BLS publications on technological change...................................................................... 46

v
Chapter 1. Tires and Inner Tubes

Summary

The conversion of most of the industry’s capacity to 

the production of radial tires, along with the total or partial closing of 26 plants during the period 1973-84, has 

greatly affected the tire and inner tube industry (SIC

3011).

The application of microprocessor-controlled instruments in tire manufacturing has advanced the pace 

of automation. However, the linkage of microprocessor 

controls to a central computer is only likely to become 

significant in the next 10 years, and the robot is still in 

the experimental stage in tire plants.

The output of tires declined at an average annual rate 

of - 1.4 percent during 1973-84, but, assuming improvement in auto sales, the outlook is for a modest growth 

in output, despite the greatly improved service life of tires 

and substantial tire imports.

An average annual rate of productivity increase of 4.2 

percent during 1973-84 was associated with a substantially 

greater decline in employee hours than in output. The 

productivity improvement was related primarily to the 

installation of new equipment to accommodate the shift 

in demand to radial tires.

In constant dollars, average annual plant and equipment outlays for the period 1970-82 were more than 10 

percent higher than during 1960-70 because the industry 

found it necessary to make sizable investments in plant 

and equipment to produce radial tires.

Employment declined at an average annual rate of 

-1 .7 percent during 1970-84, but there were sharp 

cyclical fluctuations during the period. In 1984, 94,000 

persons were working in tire establishments, the lowest 

number since the early 1940’s, and the decline is expected 

to continue. On the basis of its moderate version of 

economic growth, b l s projects an average annual decline 

of about 1 percent for the period 1984-95. It is likely that 

there will be greater worker involvement in the management of the production process.

Technology in the 1980’s

The conversion to the production of radial tires, which 

started in the early 1970’s, has had a major influence on 

the industry. The technological changes (together with 

cyclical movements) affected employment, productivity, 

labor-management relations, and other aspects of the 

structure of the industry.

In 1983, radial tires accounted for about 73 percent 

of all passenger tires: At least 84 percent of originalequipment tires and 70 percent of replacement tires. Excluding the bias-ply temporary spare tires, with which the 

newest automobiles are equipped, virtually all originalequipment passenger tires were radial in 1983. In the combined truck and bus tire market, radials accounted for 

about 36 percent of all tires: 47 percent of originalequipment tires and 34 percent of replacement tires. Diffusion of radials on commercial vehicles is expected to 

continue.

Technological improvements in tire belting materials 

(usually steel wire) are not expected to alter unit labor 

requirements significantly. Moreover, use of fiberglass 

belt tires by automobile manufacturers is not expected 

to increase, as had been anticipated. Some newer synthetic 

materials, such as aramid, are more durable (5 times 

stronger than steel), lighter in weight, and run cooler than 

steel-belted tires, and, therefore, may last longer.

Another development—the so-called “ run-flat” tire— 

could eliminate the spare tire. However, it is still in an 

experimental stage of development.

Currently, the major technological improvements are 

the increasing application of microprocessor controls and 

the use of computer controls. While robot development 

and application are underway in the larger plants, according to industry spokesmen, data are not available on this 

technology. The effects of these technologies on labor requirements vary considerably, as summarized in table 1 

and discussed below.

Microprocessor controls

The application of microelectronic technology— 

especially microprocessor controls—in new equipment 

and its adaptation to older machinery is greatly advancing the pace of automation in the industry. Microelectronic changes contrast sharply with such traditional 

changes as faster machines and better conveyorization.

A microprocessor-controlled instrument (m c i) controls 

functions in any programmable sequence and has several 

operating advantages over an instrument comprised of 

extensive relay controls, or mechanical switches that control electrical current. An MCI, consisting of a large-scale, 

integrated circuit or a set of integrated circuits, performs 

the functions of a central processing unit and is often used 

in combination with sensor devices. MCi’s are cost effective at individual process levels where the greater power 

and range of computers are not required.

1
The principal improvements from the use of MCi’s are 

usually evident in the reduction of defective parts and are 

associated with slightly lower unit labor requirements. 

Materials savings and energy conservation are additional 

benefits.

Moreover, operators can adapt quite readily to MCi’s.

The MCI may have a programmable controller, and the 

machine’s operator only needs to select a combination 

of letters and numbers in order to make parameter 

changes. In addition, the variables of a process usually 

only require monitoring the measurements of components 

or stock that are on continuous display. Monitoring is 

aided by alarms that are set to prevent problems with 

material or a machine. The MCI is simpler than a network 

of relay controls, which may require considerable labor 

for wiring, debugging, and maintenance. However, 

maintenance personnel need a knowledge of electronics 

to maintain MCI equipment.

There is some uncertainty as to the rate of diffusion 

of m c i ’s. Athough the larger tire manufacturers are 

known to have undertaken substantial development of 

these technological improvements, data on their utilization are unavailable. Also, many companies have made 

substantive changes in the innovations introduced by 

firms mainly engaged in developing and manufacturing 

tire-producing equipment.

The linkage of microprocessor controls to a central 

computer and the utilization of robots are primarily in 

the experimental stage within single plants or at the central research and development facilities of tire manufacturing companies.

The technological improvements in controls have been 

generally limited to some processes of tire manufacturing, or to only portions of processes. The processes include: Stock preparation and mixing of materials; component preparation or extrusion of treads, beads, belts, 

and plies; calendering, in which liquid rubber is applied to 

steel, fiberglass, or polyester webs to form the plies; tirebuilding, in which components are assembled on building 

drums; molding and curing, in which steam and temperature cycles are controlled; and testing and inspection.

While M Ci’s have been applied to all of the tire 

manufacturing processes, substantial reductions in unit 

labor requirements have resulted in only the two following processes.

MCI in tirebuilding. Unlike the application of only m c i ’s

in most of the processes, at least two plants have consolidated their tirebuilding microprocessors into a 

computer-controlled station. In these plants, virtually full 

automation of the process occurs after tire components 

are taken to a station, and a computer program 

automatically controls the building of the tires. This 

automated process is applied to 10-20 percent of 

passenger radial tires.

Labor requirements are sharply reduced in what is the 

most labor-intensive process, with only one or two 

workers needed to monitor a station.

Table 1. Major technology changes in tires

Technology Description Labor implications Diffusion

Microprocessor-controlled

instrumentation (MCI)

Computer-like device, consisting of a

large-scale integrated circuit or set of

circuits which perform the functions

of a central processing unit. A controller on the MCI is programmable.

MCI replaces a large network of relay

controls.

Operator on simplest MCI’s only needs

to manipulate programmed symbols;

no training needed for operator

familiar with relay controls. May be

associated with slightly lower labor

requirements.

See tirebuilding and testing below.

MCI in tirebuilding Consists of consolidation of microprocessors into a computer-controlled

station. Full automation after tire

components are taken to station.

Sharply reduces the most laborintensive process since only 1 or 2

workers needed to monitor the

station.

Used for 10-20 percent of passenger

radial tire capacity. Diffusion expected

to increase rapidly during next 5-10

years.

MCI in testing and inspection Microprocessors, which may be coordinated with a computer, used in acquiring data from testing instruments. Greatly increases amount of

data received, automatically processed, and used for rapid decisionmaking.

Sharp overall reduction in labor requirements, including some workers

engaged in visual inspection. Replaces

operators who analyzed X-rays and

made decisions.

MCI’s found in more than 80 percent of

the largest firms; likely to be diffused

to all firms within less than 10 years.

Computer applications:

Linkage o f microprocessor controls

into host computer

All or most processes in tire manufacturing can be coordinated by

computer.

Labor requirements are sharply reduced in some processes.

Usage is expected to accelerate from a

modest level during next 5-10 years.

Computer-aided design (CAD) A great deal of modeling is possible,

and tread designs can be derived

much more rapidly.

The need for drafters is greatly

reduced.

CAD may account for 75 percent of all

design work, and continued increase is

expected.

2
An o p erato r p ro g ram s a m icro processor-controlled batch-m ixing

system th at processes ru b b er com pou nds.

There are at least two obstacles to the development 

of this automated process by more manufacturers of 

radial tires. They are: (1) The complication of an additional tirebuilding stage for radials that is absent in the 

production of bias and bias-belted tires; and (2) the wide 

variety of tire types and sizes that need to be produced. 

Nevertheless, it is expected that the use of this technology 

will increase in the next 5-10 years.

MCI in testing and inspection. The use of microprocessors to acquire data from testing instruments has 

greatly increased the amount of data that can be received, 

automatically processed, and used for rapid decisionmaking. M Ci’s are used in two forms of testing: (1 ) Tire 

endurance, which is otherwise tested by an imaging 

system that uses X-ray; and (2) tire uniformity, which is 

primarily related to balance and assumes special importance with regard to radial tires. In at least one plant of 

a large manufacturing company, testing for uniformity 

is coordinated by a computer that relies on programming 

from the firm’s research and development facility.

In some plants, the number of workers required in 

testing and inspection in radial tire production has been

sharply reduced. The displaced workers include the rather 

skilled operators who analyzed X-rays, graphs, and charts 

and then made decisions on the basis of much less data 

than are currently available. Fewer workers are also 

needed for visual inspection.

The use of m c i ’s in this process is found in more than 

80 percent of the facilities of the largest firms, and is likely 

to be diffused to all firms within less than 10 years.

Computer applications

The diffusion of microprocessor controls that are 

linked into so-called host computers is expected to 

accelerate from a modest level during the next 5-10 years. 

Several of the larger companies are working on computers 

to control (or coordinate) all or most of the processes in 

tire manufacturing. The linkage of various controls into 

a central computer can insure the overall efficiency of 

individual microprocessors. The declining cost of the 

computer memory and the availability of more powerful 

microprocessors could facilitate linkage with a central 

computer.

While computer control does not significantly reduce 

labor requirements in all of the processes, necessary 

technical adjustments are made more efficiently than by 

an operator. For example, in calendering, the computer 

presents a model of the process, and any needed adjustment can be made automatically.

Tire manufacturers are also applying computers in important ways that are not directly associated with production. For instance, perhaps 75 percent of all design 

work is performed by computer-aided design (CAD). Diffusion of the technology is expected to increase because 

it sharply reduces unit labor requirements. CAD, which 

permits a great deal of modeling, is very extensively used 

to derive tread designs and is much faster than designing 

without computers, c a d has resulted in a considerable 

reduction in the number of drafters required. For example, in the mold design department of one plant, the 

number of drafters was reduced 80 percent.

Robot applications

According to industry representatives, a variety of different robot applications by the larger tire manufacturers 

is underway, but data on the extent and nature of their 

use are unavailable. Since special handling equipment is 

less costly than robots, and considerable variation exists 

in product mix, robots may not yet be widely applicable. 

But one company is using robots, at least experimentally, 

in tirebuilding. The robots load and unload components 

from conveyors and pick up and combine components. 

It was also reported that robots can perform rather 

sophisticated tasks, including design work. Greater use 

of robots is expected and may be stimulated by systems 

under development which incorporate 10 to 20 independent microprocessors.

3
Output and Productivity Trends

Output

About 209 million passenger car, truck, and bus tires 

were produced in 1984. This was 11 percent below the 

peak number of tires produced in 1977, but roughly at 

the level of output in 1974.

The output of tires fluctuated sharply in 1970-84, 

largely in response to two major recessions. On average 

for the 14 years, output registered a small annual decline 

of -0 .5 percent (chart 1). During the first years 

(1970-73), output increased at an exceptionally rapid rate 

of 7.6 percent annually, but this was offset by an average 

decline of -1 .4 percent in the next 11 years, 1973-84. 

In the latter period, output fell in six of the years, including double-digit rates of decline in 1975 and 1980. 

The industry’s output experience in 1970-84 contrasted 

sharply with the very rapid rate of output growth during 

1960-70.

Even during 1960-75, when the average annual rate 

of increase in output was 5.0 percent, the rate of increase grew smaller in successive 5-year periods. Passenger car tires, which accounted for 83 percent of 

all tires (passenger car plus truck and bus) produced 

in 1984, have been greatly affected by cyclical and 

secular changes in both the original-equipment and 

replacement tire markets. Replacement tires accounted 

for 70-79 percent of domestic passenger car tires in 

1970-84.

Several reasons account for the declining output of 

passenger car tires over the decade. The greater longevity 

of tires has been an important factor in the replacement 

market. Within a short period of time, tire service 

life has been doubled as a result of, first, the wide adoption of bias-belted tires and, later, of steel-belted radial 

tires. Similarly, the longer wearing rear tires on the 

rapidly growing share of automobiles with front-wheel 

drive more than offset the faster wearing front tires on 

such cars. Moreover, when gasoline prices increased 

and remained relatively high, the average annual miles 

driven in passenger cars declined, and, until recent 

years, this had a negative impact on the replacement tire 

market.

The original-equipment tire market has, of course, 

been severely depressed by the reduction in domestic car 

sales. Sales of new cars averaged 6.7 million during 

1980-84, only 79 percent of the average sales in the 

previous 5 years and at the levels of 1960-64.

While greatly improved service life will place 

limits on expansion in passenger tire output, some 

analysts believe that the outlook is for modest growth 

in view of the higher average age of cars, the possibility of a greater number of miles being driven, 

and an increase in the number of people of driving 

age. A further factor is the weight-saving “ minispares” on most new automobiles, which have only

a tiny fraction of the tread life of normal spare 

tires.

Basically, however, the outlook for tire production is 

tied to the automobile market and to tire imports.

Imports

Tire imports (passenger car plus truck and bus tires) 

have increased almost steadily since 1970, as did the ratio 

of imports to new supply (product shipments plus imports). The ratio stood at 9 percent in 1973 and rose to 

about 16 percent in 1984. These imports, moreover, do 

not include the tires mounted on imported vehicles. In 

1984, the market share (in units) of imported passenger 

cars was 23 percent, up from 15 percent in 1973.

Sharp competition exists not only from imports, 

but, more recently, from tire plants established in the 

United States by foreign firms. In the last few years, one 

of the foreign firms with plants in this country has 

become the sixth largest tire producer. The six largest 

tiremakers account for more than 80 percent of total tire 

production.

The export/shipment ratio was about 4 percent in 

1984, compared with 2 percent in 1970 and 2 1/2 percent 

in 1973. A potential expansion in U.S. tire exports is 

related to the faster annual growth anticipated in 

passenger car registrations abroad than in the United 

States.

Productivity

Productivity increased during 1970-84 at an average 

annual rate of 3.2 percent, compared with 4.0 percent 

during 1960-70. However, the productivity advances in 

the two periods were associated with vastly different 

changes in output and hours. During 1960-70, output rose

6.0 percent annually, while employee hours grew at onethird that rate. In contrast, the productivity increase during 1970-84 was associated with a decline in output ( - 0.5 

percent annually) and a very sharp drop in hours ( -3 .6 

percent). In the early years of the last decade (1970-73), 

productivity increased less than 3.0 percent annually, but 

thereafter, in 1973-84, rose more rapidly at the rate of 

4.2 percent per year.

The productivity increase during 1973-84 reflected to 

a large extent the removal from production of older 

equipment. Of particular note were 26 plant closings 

within the 11 years.1 The degree of obsolescence of 

tiremaking equipment was considerably lowered in that 

period, in part because 21 of the 26 plants which closed 

were manufacturers of bias-ply tires. Specialized and 

more efficient equipment to accommodate the growing 

demand for radial tires had not been fully installed in 

many of those plants. In the 6 years ended in 1984, productivity rose at an annual rate of 6.4 percent as the drop 

in hours far outstripped the decline in output.

'Two were partial closings.

4
Chart 1. Output per employee hour and related data, tires and inner tubes, 1970-84

(Index, 1977=100)

Source: Bureau of Labor Statistics.

5
Investment

Capital expenditures

While dollar outlays for plant and equipment were 

$235.6 million in 1982, or only about 10 percent less than 

in 1970, the expenditures in constant dollars2 were about 

55 percent less in 1982 than in 1970. However, the average 

annual outlays for the entire period 1970-82 in constant 

dollars were more than 10 percent higher than during 

1960-70.

Large capital expenditures were made in the late 

1960’s, primarily for equipment and facilities to effect 

the shift from production of bias-ply to bias-belted tires. 

However, a preference for radial tires soon required 

retooling outlays that were considerably greater than the 

sizable ones required for bias-belted tires.

By the end of 1971 and during the following years, 

capital expenditures were concentrated on radials, including new plants to produce only radials and the retooling 

of bias-tire facilities in older plants to produce radial tires. 

Real outlays for the 4 years 1971-74 averaged $326 million, or about 7.0 percent higher than the relatively high 

outlays in the previous 4 years. The large outlays needed 

to produce radial tires affected several processes, including tirebuilding (machines involving two steps rather than 

one step) and curing (special segmented tire molds).

While the economic slump in 1981 and 1982 kept 

capital outlays at comparatively low levels, industry 

reports suggest that capital outlays related to radial tires 

rose considerably in 1983.

In general, only the largest firms have been able to invest in the newest automated equipment because of their 

involvement in profitable areas of both tire distribution 

and of nontire operations. The largest firms distribute 

tires through company-owned stores and dealerships 

which have enabled them to supply much of the replacement tire market. Three of the largest firms have undertaken large investments to diversify into more profitable 

nontire forms of production, both in rubber and other 

fields, to offset declines in automobile sales or price 

cutting in tires.

Research and development

Data on research and development (r &d ) outlays are 

unavailable for tire manufacturing. It is believed, however, that most manufacturers—especially those which 

provide original-equipment tires—have made substantial 

outlays for development and have been instrumental in 

some important technological changes. Most recently, 

U.S. manufacturers have been able to produce truck 

radials that can be retreaded, as was possible much earlier 

on foreign makes. At the same time, firms that supply the 

tire manufacturers with machinery and materials have 

developed technological advances in tire manufacture.

2 Capital expenditures deflated by the implicit price deflator for

producers’ durable equipment.

A foreign firm is apparently the leader in the development of a liquid-injection molded tire that would represent a revolutionary shift in the technical production of 

tires. U.S. tire manufacturers have made modest outlays 

in attempting to develop such a tire.3

Employment and Occupational Outlook

Employment

In 1984, an average of 94,000 persons were working 

in tire manufacturing plants, the lowest number since 

the early 1940’s. From 1970 to 1984, employment 

declined at an average annual rate of — 1.7 percent. Sharp 

cyclical fluctuations occurred during this 14-year period 

(chart 2).

During 1970-73, employment rose steadily at an 

average annual rate of 4.0 percent. The increase continued 

into 1974 when the industry was retooling for radials, and 

employment reached 137,000, the highest level since 1946. 

In 1975 and 1976, employment dropped sharply in 

response to the slowdown in auto sales and tire replacement sales.

Employment picked up after a lengthy strike in 1976 

and stayed relatively high during 1977-79. But in 1980-83, 

employment declined each year, at an average annual rate 

of -6 .2 percent for the 3 years. The sharp declines in 

employment reflected the fact that half of the 26 plant 

closings that occurred from 1973 to 1983 took place during 1980-83. In 1984, employment held at approximately 

the 1983 level.

A marked shift in the geographical location of the 

rubber industry’s employment can be largely attributed 

to the closing of older plants. Some of the closed plants 

were absorbed by other companies, but, in 1983, there 

were only 44 plants still in operation, contrasted with 

about 60 at the start of 1973. Although other communities were severely affected, most plant closings and 

job losses occurred in Akron, Ohio. Closings in Akron 

and in other Ohio cities accounted for 39 percent of 

the more than 23,500 workers who were affected by 

job dislocations during 1973-83. Two Western States 

(California, and to a lesser extent, Colorado) accounted 

for 24 percent of the workers who were at least temporarily unemployed, and the New England States, 

Pennsylvania, and Maryland accounted for 21 percent 

of the laid-off workers. Michigan and the Southern States 

sustained the remaining, smaller portion of job 

dislocations.

By 1980, employment opportunities were highly concentrated in the Southern States. As a result of new plants 

and major investments in existing plants, more than 

two-thirds of total tire capacity was located in the South, 

or nearly double the share of capacity in that region in 

1970.

3 Business Week, Dec. 26, 1983, pp. 44B, 44D.

6
Chart 2. Employment in tires and inner tubes, 1970-84, and projections, 1984-95

Employees (thousands) Employees (thousands)

140

120

100

80

60

0

Source: Bureau of Labor Statistics.

The ratio of production workers to all employees was 

generally over 70 percent during 1970-84. This relatively 

stable ratio reflects the difficulty of fully automating and 

coordinating the control of the tire manufacturing processes and the fact that production of a radial tire requires 

more labor per tire than a nonradial tire. The average ratio 

of production workers to all employees was slightly higher 

in the tire industry than in total manufacturing in 1984.

The Bureau of Labor Statistics, on the basis of its 

moderate version of economic growth, projects an annual 

decline of about 1 percent in the industry’s overall employment to 1995 from the very low level in 1984.4 

Based on this projection, employment in 1995 would continue to be well below the levels of the first half of the 

1980’s.

Occupations

As indicated in the technology section, the use of

4 bls projections for industry employment in 1995 are based on

three alternative versions of economic growth. For details on assumptions and methodology used to develop these projections, see the

Monthly Labor Review, November 1985.

microprocessor controls has not required radical 

adjustments by the workers trained in older technologies. 

In general, the number of operators and maintenance 

workers has not been sharply reduced. No entirely new 

jobs have resulted from the technological changes; the 

duties for some occupations have been simplified.

However, the use of computers to coordinate microprocessor-controlled instruments and computer-aided 

design can have considerable impact upon some occupations. With computers controlling instruments, the 

number of operators needed is sharply reduced and only 

a small number of programmers may be required, 

especially if the software is developed at a firm’s central 

R & D facilities. Computer-assisted drafting greatly reduces 

the need for drafters, but a stronger background in 

mathematics is required for those still employed in design.

Major changes have occurred in the job duties of 

maintenance workers and some other occupations as 

result of management’s attempt to reduce labor requirements and improve efficiency. Workers in the 

various traditional craft occupations have been replaced 

by a much smaller number of multicraft maintenance

7
workers. In one company, 3 basic classifications that have 

replaced the previous 10-12 crafts are: Mechanicmachinist, electrician-instrument repairer, and general 

craft worker (involving primarily the pipefitter and welder 

duties). The multicraft workers can make needed repairs 

in about 90 percent of the breakdowns to which they are 

referred. For the remaining 10 percent of the cases—those 

with sophisticated hydraulic or electrical problems— 

salaried workers having such specialized expertise are 

called upon. In addition, certain work rules that affect 

downtime have been eliminated by transferring minor 

tasks from maintenance workers to production workers.

Intraplant transportation of materials and components 

is apparently far from automated or even mechanically 

controlled, and therefore, numerous lower skilled jobs 

remain. In one moderate-size radial tire plant visited, 

bicycles with large baskets were widely used to transfer 

material. In most of the plants without computercontrolled instruments in the tirebuilding process, the occupations continue to require considerable strength, 

especially in truck tirebuilding.

Adjustment of workers to technological change

Programs to protect the worker from the adverse 

effects of changes in machinery and methods may be incorporated into union contracts or they may be informal 

arrangements between workers and management. In 

general, such programs are more prevalent and detailed 

in formal contracts.

Formal labor-management contracts with the United 

Rubber, Cork, Linoleum and Plastic Workers of America 

(URW) cover nearly 80 percent of the production workers 

in this industry, somewhat lower than the percentage of 

workers covered in 1970. The decline in union coverage 

is primarily associated with the numerous plant closings 

in the highly organized North and the new facilities often 

located in rural southern communities that have a lower 

rate of unionization.

Although the bargaining agreements do not include 

a requirement for advance notice of technological 

change, it is often the practice of management to 

inform a local URW representative about the intended 

introduction of a technological change. The plantwide seniority system which prevails in agreements 

provides a measure of job security when technological 

change takes place. While a recent agreement placed 

some limitations on the number of laid-off workers 

who may transfer into another job classification, 

workers whose jobs are eliminated may use their seniority to qualify for training that will enable them to 

displace workers in other positions who have less 

seniority.

A small proportion of all permanently laid-off tire 

workers have used their transfer rights under a preferential hiring clause to secure employment in other plants 

covered by the URW’s master contract. Under the clause,

laid-off workers receive preference at another plant of a 

particular company only if hiring is taking place at the plant 

and none of the plant’s own employees are on layoff.

While a supplemental unemployment benefit (s u b )

program has provided considerable income security to 

workers incurring layoffs, the program has afforded inadequate assistance to many workers affected by plant 

closings. Since the funds in all of the SUB programs are 

maintained on an individual company basis, many funds 

were depleted as a result of the numerous closings that 

occurred during the past 10 years.

The URW has secured a letter of agreement that provides for both 6 months’ advance notice from a firm intending to close a plant and the right to negotiate over 

keeping the plant in operation. Since plant closings have 

occurred mainly because of a market shift away from the 

bias tires produced in older plants, it has proven feasible 

to sustain operations in only one plant and part of 

another plant as a result of this agreement. However, the 

agreement also provides for labor-management negotiations over how a plant closing is executed, including 

bargaining over various benefits.

At least two of the larger companies have provided 

their permanently laid-off workers with counseling 

regarding employment in another industry or even 

another occupation. Officials of these companies, with 

assistance of a union representative, have used their contacts with other employers and have also offered suggestions in looking for employment, writing a resume, 

and taking advantage of available public training 

opportunities.

Beginning in 1976, the bargaining contract has provided workers with various forms of financial assistance 

when plant closings have not been avoidable. For example, laid-off workers can retire with full pension benefits 

if they have 25 years of service. Workers who are ineligible for retirement can receive special separation payments 

that are graduated on the basis of years of service, with 

such payments being in lieu of any deferred pension 

benefits.

The apprenticeship training for the three basic job 

classifications that cover many maintenance skills has 

considerably changed from the traditional program. The 

course is 20 to 24 months long as opposed to the earlier 

48-month course. While most of the training continues 

to be on the job, a home-study form of training consisting 

of numerous relatively short learning units with specific 

objectives is also provided.

Arrangements are likely to continue for additional 

worker involvement in the management of production processes, initiated in at least some of the larger firms during recent years. A rationale for such involvement is the interest in 

lowering absenteeism. In several plants that have participative management, the workers are given the opportunity to discuss or suggest improvements in production or 

to make suggestions about improving their own jobs.

8
SELECTED REFERENCES

Acquarulo, L.A., Jr., and A.J. Notte. “Automatic Control of Polymer

Mixing,” Elastomerics, November 1983, pp. 17-22.

Alexander, K. “ Tire Trends for the Next Decade,” Rubber World,

January 1981.

Al-Shaikh, A ., P. deFeo, and N. Leffler. “ Multivariable Calender

Weight Control for the Tire Industry,” in Multivariable Control

Systems, Proceedings o f the Second Annual Advanced Control Conference. Barrington, 111., Technical Publishing Company, 1975.

Dick, John S. “ How Technological Innovations Have Affected the Tire

Industry’s Structure,” Parts I-VI, Elastomerics, September 1980, pp.

43-48; October 1980, pp. 36-41; November 1980, pp. 42-47; December

1980, pp. 47-52; January 1981, pp. 25-30; and February 1981, pp.

42-47.

Jeszeck, Charles A. Plant Dispersion and Collective Bargaining in the

Rubber Tire Industry, Ph.D. dissertation. University of California,

Berkeley, 1982.

Morton, G.F. and G.B. Quinton. “ Manufacturing Techniques,” in Rubber Technology and Manufacture, edited by C.B. Blow and C.

Hepburn. London, Butterworth Scientific, 1982.

Pawlowski, Henry A ., John P. Koontz, and Robert I. Barker. “ Incorporation of Microprocessors into Rubber Quality Control Instrumentation,” Rubber World, July 1983, pp. 29-30, 36.

Rapetski, Walter A. “The Outlook for Rubber Processing Equipment,”

Rubber World, January 1983, pp. 24-26.

9
Chapter 2. Aluminum

Summary

Technological changes in the aluminum industry (sic 

3334 and 3353-55) primarily involve modification of conventional processes rather than radical changes in 

technology. Specific innovations being introduced include 

improvements in the vessels (or pots) in which molten 

aluminum is produced by an electrolytic process, more 

energy-efficient furnaces that produce anodes used in the 

pots, the introduction of computer control and advanced 

instrumentation, continuous casting, and improved 

material handling. Benefits include lower energy and 

labor requirements and higher quality.

Output in the aluminum industry is responsive to 

developments in the general economy. In primary 

aluminum, output increased at an average annual rate of 

only 0.6 percent during 1970-84; in the fabricating sector, 

which includes rolling, drawing, and extruding mills, output increased at a higher 2.0-percent annual rate. In both 

sectors, output gains were highest during the earlier years 

of this period and fell sharply during 1974-75 and 

1981-82, periods when the economy was depressed. The 

outlook is for aluminum shipments to extend recent gains 

and to increase over the next several years, with the largest 

markets in containers and packaging, building and construction, and transportation. However, prospects for 

primary production are less favorable as high power costs, 

increased imports of ingots, and recycling of aluminium 

are expected to result in further reductions in U.S. 

capacity.

Productivity (output per employee hour) increased in 

both primary aluminum and fabricating during 1970-84. 

In primary aluminum, output per employee hour increased at an average annual rate of only 1.0 percent over 

this period—well below the gains achieved in fabricating 

mills, where output per employee hour rose at an annual 

rate of 2.7 percent. In both sectors, productivity declined 

during the recession period 1974-75, but increased significantly from 1982 to 1984 as output rose in the economic 

recovery.

Between 1970 and 1981, the aluminum industry 

allocated $3.7 billion (constant 1972 dollars) to increase 

capacity and improve efficiency. The largest share of 

spending (57 percent) was by firms in the fabricating 

sector. The aluminum industry is capital intensive, and 

capital expenditures per production worker in both

primary aluminum and fabricating were well above the 

average in all manufacturing.

Employment in the segments of the aluminum industry 

covered in this bulletin declined from 91,700 to 82,600 

workers—by 9.9 percent—over the period 1970-84. The 

sharpest rate of decline was in primary smelters. Employment in both sectors fell during the mid-1970’s and during 1980-82 when the general economy was weak. 

However, prospects for employment growth appear improved based on an increase in demand for aluminum 

associated with the upturn in the economy which began 

in 1983.

New technology has not resulted in widespread 

displacement; the general market demand for aluminum 

has been the major factor affecting the level of employment. Although most occupations are expected to continue to involve generally the same skills, innovations such 

as computer process control and advanced instrumentation have modified job requirements of some key occupations, including potline tenders and rolling mill operators. 

Their duties involve more extensive monitoring of production operations from modern control stations and 

fewer manual tasks.

In newly constructed plants where state-of-the-art 

technology is in place, the number of potline tenders, rolling mill operators, and other production workers per unit 

of output is less.

Importantly, energy requirements in new plants are 

sharply lower than in older facilities. The aluminum industry has made substantial progress in energy conservation; the Aluminum Association reports that a pound 

of aluminum in 1983 shipped as a finished or semifinished 

product required nearly 22 percent less energy than in 

1972.

The aluminum industry is highly unionized, and work 

force adjustments associated with new technology and 

other changes have been handled in the context of general 

provisions of collective bargaining agreements.

Industry Structure

The industry covered in this bulletin consists of both 

primary plants (or smelters) (sic 3334), where alumina, 

refined from bauxite, is converted to aluminum through 

an electrolytic process, and the fabricating sector of the 

industry (sic 3353, 54, 55), where aluminum is converted

10
into sheet, plate, bar, tubing, and other basic shapes 

through rolling, drawing, and extruding operations.1

The aluminum industry has grown rapidly, particularly 

since World War II, and shipments of aluminum products 

exceed those of copper and other leading nonferrous 

metals. Aluminum is a versatile metal, lightweight and 

corrosion resistant, and is used for products ranging from 

beverage containers to missiles and jets. The top three 

markets in 1983 were containers and packaging, building 

and construction, and transportation.

Because the industry is energy intensive, primary aluminum plants are located near sources of abundant 

power. Establishments engaged in fabricating aluminum 

products are more widely dispersed and located closer to 

markets.

In 1984, about 82,600 workers were employed in the 

sectors of the industry covered by this bulletin, with 

nearly 3 out of 4 employees engaged in rolling, drawing, 

and extruding operations.

Technology in the 1980’s

Technological change in the aluminum industry 

generally involves an improvement in a segment of 

the process of smelting and fabricating aluminum 

within an existing plant. When new facilities are 

constructed, however, the level of technology is generally higher than in older plants, and energy costs 

and labor requirements per unit of output are lower. New 

technology has allowed some plants to remain com1 The industry examined excludes establishments primarily engaged

in recovery of aluminum from scrap (the secondary industry), which

is part of sic 3341, secondary smelting and refining of nonferrous

metals. Also excluded are aluminum foundries (castings), which are

classified as sic 3361, and aluminum forgings, which are part of sic

3463, nonferrous forgings.

petitive, thereby maintaining jobs and capacity in the 

United States.

The aluminum industry has been spending substantial 

sums to modernize plant and equipment. Specific innovations in primary plants include improvements in the 

design of the pots, where molten aluminum is produced 

by an electrolytic reduction process; the installation of 

improved linings and insulation in the pots; and the introduction of computer process control to monitor production. Other innovations include new types of furnaces 

which lower energy and labor requirements in the production of the carbon anodes used in the “ prebaked 

anode” pots, and improved casting equipment to produce billets and ingots for shipment to fabricating plants. 

In the development stage are innovations such as direct 

reduction and electrolysis of aluminum chloride, which 

differ significantly from the long-standing Hall-Heroult 

method of producing aluminum.

In aluminum fabrication, improvements in rolling and 

drawing mills include computer control, advanced instrumentation, and larger capacity equipment. In extruding operations, more powerful and more highly 

automated presses and material handling systems are 

major changes. In addition, dies used in extruding presses 

are being are being produced by computer-aided design 

and computer-aided manufacturing (c a d / c a m ) methods 

which improve product quality, and some applications 

of continuous extrusion systems are being introduced. 

Continuous casting is a highly efficient process in limited 

use to produce mill stock for finished rolled products.

A description of major technological improvements 

in the aluminum industry, their impact on labor, and 

prospects for further diffusion are summarized in table 

2. A more extensive discussion of the impact of 

technology on the work force is contained in the section 

on employment and occupational trends.

Table 2. Major technology changes in aluminum

Primary aluminum

Improved Hall-Heroult reduction

technology

Larger reduction cells, or pots, that

handle higher currents, allow greater

production without increased voltage.

Other changes include larger, more

efficient anodes; computer process

control; use of silicon rectifiers in

place of the less efficient mercury arc

type in converting power to direct

current used in potlines; addition of

lithium compounds to electrolyte to

increase conductivity; raising proportion of aluminum fluoride in electrolyte to increase efficiency; and

improved material to line and insulate

pots which save energy and extend

their service life.

Increased efficiency and capacity of

reduction pots has resulted in fewer

pots per potline in new smelters.

Thus, requirements for potline

monitors, potliners, anode tenders,

carbon setters, and others involved in

potline operations, per unit of output, are reduced in these plants. Increase in anode size and modification

of cathode design also have increased

productivity.

Technological improvements that extend the production life of potlines

have reduced maintenance requirements slightly.

Adopted most extensively in newly constructed potlines built to increase

capacity or to replace obsolete facilities.

Changes are less extensive in the older

potlines.

Technology Description Labor implications Diffusion

11
Table 2. Major technology changes in aluminum—Continued

Diffusion

Improved anode baking

Improved casting

Aluminum fabrication

Improved rolling mill operations

Improved aluminum extruding

operations

Continuous casting

New furnace designs which improve

flue combustion and improved refractories which allow less heat loss increase fuel efficiency and furnace productivity in baking the carbon anodes

used in reduction pots. More uniform

baking temperatures improve anode

quality, making possible lower energy

use in reduction pots. Large multipurpose cranes are used to charge and

discharge furnaces.

New computer-controlled direct chill

casters with larger cylinder strokes and

improved mold assemblies increase the

size and number of billets and ingots

cast per drop. Lower scrap rates, faster

mold preparation, and reduced

maintenance are also benefits of improved casters. Control systems on

new equipment monitor temperature

precisely with multiple digital readouts

available to operators.

Basic equipment improvements increasing productivity in aluminum

rolling include wider mills with more

powerful drives and larger coils. Improved mill rolls and lubricants also increase efficiency and quality.

Computers and advanced instrumentation regulate mill speed and product

variables. Computers are also applied

to control sawing, milling, and other

plant operations and in casthouses.

Material-handling tasks are being

automated in rolling mills. Some mills

use computer-controlled cranes to

transport coils.

Productivity in extruding is being increased by more powerful presses;

alloys that improve billet quality and

allow faster extrusion speeds; and

computer-based programmable control

systems. Extrusion dies produced by

computer-aided design and manufacturing (CAD/CAM ) techniques increase press efficiency and product

quality.

Computer control is being extended to

prepress billet shearing and handling as

well as pulling, stretching, and sawing

o f extruded shapes. Heat treating

operations also are being placed under

computer control.

Continuous extrusion for a limited

number of products is just coming into commercial use.

Molten metal is converted directly into aluminum sheet, bypassing casting,

ingot preparation, and hot rolling

operations. Liquid metal is directed

through a nozzle into a cavity between rotating sets of water-cooled

cylinders and is immediately solidified and forms a continuous sheet.

This sheet is wound into coils to be

cold rolled to produce aluminum mill

sheet and foil products. Continuous

casting is used to produce redraw rod.

Increased productivity of new baking

furnaces lowers unit labor requirements for furnace operators and

other workers. More automatic operation will increase monitoring and

lessen manual duties of operators.

Both startup and operating labor requirements for new casters are lower

than for old machines. A casting

operator and an assistant, aided by a

material handling worker for ingot

loading, comprise the machine crew at

one installation. Maintenance costs are

lower with the new equipment.

Increased productivity and yield in new

and renovated mills enable plants to

operate at a given capacity with fewer

mills and employees than formerly.

Rolling mill operators and helpers are

among occupations affected by computer control and automation of

material handling.

Use of computers requires operators

and machine tenders to be involved in

more monitoring and fewer manual

tasks. Training will be required for

em ployees associated with new

technology.

A fully automated extrusion line requires a minimum crew of two, compared with seven in a less mechanized

plant. Stretcher operators and helpers,

saw helpers, and die-head men are

eliminated in computerized systems.

The material handling job of runner is

not required when a computercontrolled puller is used. Press

operators are being trained to operate

terminals that monitor the status of extruding operations.

Significant reduction in labor in some

product lines will result.

Substitution of continuous casting to

produce reroll stock or rod eliminates

several production jobs including

casting operator and helpers, ingot

cutting and scalping machine

operators, oven tenders, and hot rolling mill operators and helpers. Also,

requirements for material handling

occu pation s, including crane

operators and truckdrivers, are reduced with continuous casting.

Most anode baking improvements accompany modern furnace facilities being

installed in new smelters.

Projected energy savings will be weighed

against furnace replacement costs in

deciding whether to adopt these improvements in existing anode plants.

Advances in casting technology are introduced most extensively in new

casthouses and the modernization of existing ones. (Casting improvements

described here generally apply also to

casting operations in fabricating

establishments with remelt facilities.)

The benefits of computers, advanced instrumentation, and equipment improvements that can be “ added on” to

existing mills are expected to result in industrywide adoption of these new

technologies.

Highly automated extrusion systems are

in use in only a few plants. Adoption of

new technology is typically on a

“ building block” or a piecemeal basis.

New presses being installed incorporate

programmable controllers, and they are

being added to existing presses.

Diffusion is limited but expected to increase as continuous feedstock availability increases.

Continuous casting is used by only a few

establishments. However, this highly

regarded technology will be adopted

more widely when aging facilities are

replaced, and in mills where capacity is

to be expanded.

Labor implications

12
Primary Aluminum Production

Aluminum is produced by the Hall-Heroult electrolytic 

reduction process, which has long been the only commercial production method. Although improvements in 

the process have been adopted, production and 

maintenance workers have been only marginally affected 

by these changes.

The impact of technology on employment can be more 

fully understood by a review of the process of producing 

aluminum. In the Hall-Heroult process, molten cryolite 

(a fluoride of sodium and aluminum) is maintained at 

nearly 1,000 degrees centigrade in carbon-lined steel cells 

or pots. From 100 to 240 pots may be connected in electrical series to form a potline which is overseen by 

employees called potline monitors—one of the largest 

production worker categories. The cryolite serves as an 

electrolyte and as a solvent for the aluminum oxide 

(alumina) which is added to it. Carbon anodes located 

above the pots extend into the electrolyte. When direct 

current passes through the electrolyte to the cathodic carbon linings in the pots, the alumina in solution is decomposed into aluminum and oxygen. The oxygen is released 

as carbon dioxide.2

Periodically, the molten aluminum is siphoned into 

crucibles and poured directly into ingot molds or into 

holding furnaces for refining and alloying before casting 

into ingots and billets. Molten metal also may be 

transported from the smelter to fabricating plants.

The modern Hall-Heroult method, although unchanged in principle, differs from the early process. 

Substantial productivity gains and energy savings have 

been achieved through improved equipment, materials, 

and process control.

Aluminum reduction (smelting) consumes large 

amounts of electricity, which accounts for about onethird of the total cost of primary aluminum production. 

Thus, the industry has given major emphasis to increasing electrical efficiency. Energy conservation received 

added impetus from sharply rising costs during the energy 

crisis in the 1970’s.

Improvements in the design of the pot increase efficiency and reduce labor requirements for potline monitors 

and other workers on the production line. Also, anodes 

and pots of greater size accept more amperage and produce more aluminum with greater energy efficiency.

Comparing the potline of a new reduction plant (or 

smelter) with one built approximately a decade earlier illustrates the gains associated with technological improvements. High amperage, low current density pots in

2 The prebaked anode system is used by about two-thirds of the

smelters in the United States. The Soderberg electrolytic reduction cell,

the other major system, uses a continuous anode which is controlled

in a different manner than the prebaked anode. Although labor requirements in the Soderberg system are lower, more electrical energy

is required.

the new reduction plant have substantially greater 

capacity than the older pots. In the new plant, despite 

25 percent fewer pots in the production line, capacity is 

13 percent greater, and energy and labor requirements 

per unit of output are sharply lower.

Improvements in materials which line and insulate the 

pots also are raising efficiency. Improved carbon 

materials and new techniques for installing linings save 

electrical energy and extend the life of the pots. Consequently, labor requirements for potliners, who maintain 

the linings, are cut back. Some of the new linings last 

3 times longer than those used in the early 1960’s.

Power consumption also is reduced by replacing 

mercury arc rectifiers with more efficient silicon rectifiers 

to convert alternating current to direct current for the 

electrolytic process. Energy savings of 3 percent have been 

reported following this change. In many smelters, use of 

electricity also is decreased by adding lithium compounds 

to the electrolyte to increase conductivity. The consumption of electrical energy is further reduced by raising the 

proportion of aluminum fluoride in the electrolyte.

Computer monitoring of potlines has resulted in more 

efficient use of labor and electricity. Heat generated in 

the electrolyte with a given current depends on the 

distance between the anode and the cathode. Closer control of this spacing by computers enables temperature in 

the electrolyte to be maintained at optimum levels more 

consistently.

In addition, computers and microprocessors control 

feeding the alumina to the cell and the frequency and 

duration of the “ anode effect.’’3 The computers deal 

with most operational instability unaided, but have the 

capability to alert the pot monitors to those pots requiring attention. The computers also accumulate and display 

data on the performance of each production unit.

Improved anode baking

Several major improvements are being incorporated 

in modern furnaces which produce the prebaked anodes 

used in the pots. Better insulated and more tightly sealed 

furnace refractories lower heat loss; new flue designs improve anode quality and extend flue life; and a system 

that automatically maintains furnace drafts within 

precise, preset limits provides more efficient furnace 

operation than manual control. Gains of more than 100 

percent in fuel efficiency and furnace productivity have 

been reported. Moreover, average flue life is increased 

by 50 percent or more and the improved carbon quality 

of the anodes increases current efficiency and reduces 

carbon consumption in the reduction pots.

3 The normal concentration of alumina is in the range of 3 to 10

percent, which provides sufficient resistance in the bath to maintain

optimum operating temperature. When the alumina concentration falls

below 3 percent, the resistance increases sharply, and the voltage drop

across the pot increases sharply. This phenomenon is known as the

“ anode effect.” .

13
Large multipurpose cranes also are used in modern 

furnace installations to place anodes into the baking pits 

and to cover them with a blanket of coke. These cranes 

also extract the coke from the pits by vacuum and then 

remove the anodes. Productivity is increased since one 

man operating the crane can load and unload the furnace.

Improved casthouse operations

Molten metal from the smelter is transported to the 

casthouse, transferred into holding furnaces, alloyed, and 

poured into molds to produce billets and ingots for shipment to fabricating plants.4 In the casthouses, extrusion 

and rolling ingots are produced by the direct chill (DC)

process, using a vertical or horizontal caster. In a typical 

vertical caster, as metal enters the mold, the mold base 

is lowered through a water spray which chills the newly 

formed ingot as it moves downward through the mold. 

Ingot length is limited by the depth to which the mold 

bottom can be lowered. Longer lengths can be produced 

horizontally, where the constraint of casting pit depth is 

removed.

Casters of improved design with advanced control 

systems increase productivity in modernized casthouse 

operations. A vertical caster, introduced as part of a 

general plant modernization at one mill, increased production sharply compared to less advanced equipment in 

the older plant section. The new machine allows ingot 

molds to be located closer together and increases the size 

and number of ingots cast in a single “ drop.” The new 

casters operate with a smaller crew—one operator, one 

assistant, and a helper to load ingots for heat treating. 

Other benefits include reduced maintenance, lower scrap 

rates, and faster preparation of the mold between casting 

cycles. A modern control system on the new casters 

monitors temperature and features various digital 

readouts.

Technologies under development

Improvements in the Hall-Heroult process and new 

methods undergoing development have long-range potential to reduce labor, capital, energy, and material requirements in primary aluminum production. However, 

the new methods are not expected to be applied commercially in the near future.

Inert anode. Development of an inert anode for the HallHeroult process is being attempted which, when used with 

a refractory metal cathode also being developed, would 

eliminate carbon consumption and the facilities and labor 

required to prepare and change anodes. Affected 

employees would include anode tenders, carbon setters,

4 A portion—often substantial—of potline output may be shipped

in molten state to users within trucking distance of the plant, thus

eliminating smelter casting costs and the expense of remelting by

fabricators. One major producer ships about 40 percent of total reduction plant output in this manner.

potliners (in part), and rodding anode renewers who, 

combined, comprise one of the largest groups of plantworkers. A major producer and the U.S. Department of 

Energy are constructing laboratory pilot cells or pots incorporating these improvements.

Direct reduction. Direct or carbothermic reduction 

processes utilize high temperatures—obtained in arc or 

blast furnaces—to produce aluminum from aluminumbearing ores, or from refined alumina. Unit energy requirements are greatly reduced in these processes. One 

direct reduction system being developed that is attractive 

to producers eliminates the refining step required to produce alumina for the Hall-Heroult process. Moreover, 

since domestic aluminum-bearing ores of lower purity can 

be used, dependence on foreign supplies of bauxite would 

be lessened.5 Capital investment would probably be 

lower than for Hall-Heroult smelting because anode 

plants would no longer be required and output from a 

single production unit would be greater.

The labor impact also would be significant, with anode 

rebuilders and carbon setters among occupations no 

longer required. However, refining steps beyond initial 

smelting would be needed to ensure an acceptable final 

product, and one drawback of this type of direct reduction is the impurities that remain after processing. A longterm project to investigate the technical feasibility of this 

process is underway with support from the U.S. Department of Energy.

Technology for direct or carbothermic reduction of 

refined alumina to aluminum metal without substantial 

impurities is under development; technical feasibility has 

already been demonstrated in a small pilot project. This 

technology reportedly has the potential to substantially 

lower energy, labor, and capital cost relative to a modern 

electrolytic plant.

Electrolysis o f aluminum chloride. This new process 

combines alumina with chlorine in a chemical reactor to 

produce aluminum chloride, which is then electrolyzed 

to produce aluminum and chlorine. The chlorine is 

recycled to the reactor in a closed system.

Unlike the Hall-Heroult method, the chloride system 

can process a wide variety of aluminum-bearing materials 

and is not limited to bauxite. Moreover, pollution may 

well be less than in the Hall-Heroult process, which requires that potentially harmful fluoride gas be collected. 

In addition, the chloride process reportedly uses 30 percent less energy than the most efficient Hall-Heroult 

potlines—a substantial cost saving.

The labor requirements of a chloride process plant 

would differ considerably from those of a Hall-Heroult

5 Hall-Heroult pots require alumina refined from bauxite by the

Bayer process. Over 90 percent of the bauxite is obtained outside the

United States. The present method of producing aluminum is often

referred to as the Bayer-Hall process.

14
smelter. Anode tenders and others engaged in anode 

building and replacement would no longer be needed. On 

the other hand, new positions would be required because 

a chemical reactor is needed in the process. Jobs involving maintenance and console monitoring could be expected to increase.

Aluminum Fabrication

Rolling, drawing, and extruding establishments 

manufacture a variety of semifabricated aluminum products. Improvements in traditional methods, the use of 

more efficient processes, advances in material handling, 

and improved control of production are increasing productivity in fabricating plants. These innovations raise 

quality and reduce unit labor, capital, and energy 

requirements.

The most significant development in aluminum 

fabrication is the widespread adoption of computers and 

advanced instrumentation. Improved control has increased performance of processing and material handling equipment. Examples of applications of process control and other improvements are examined below in the 

operations in which they are employed.

Rolling mill operations

Advances in equipment and improved control over 

processing increase efficiency in rolling mill operations. 

Extended mill widths, more powerful drives, and processing of larger coils are prominent improvements in 

aluminum rolling mills. Improved rolls and rolling 

lubricants also increase productivity and quality. In 

addition to improvements in basic equipment, computer 

control of mill speeds and product variables such as strip 

gauge and shape allow mills to run at higher speeds, 

increase product quality, and reduce waste products.

Many of the advances in rolling technology that will 

be adopted more widely over the next decade are already 

installed in a large foil plant which is a leader in applying new technology. These include computer-based shape 

and gauge controls, new rolls in which the shape of the 

strip can be changed during operation to maintain uniformity, and improved lubrication procedures to reduce 

breaks in the aluminum strip. A new rolling mill introduced at this plant operates at speeds up to 7,500 feet 

per minute, 3 times faster than older mills.

At this facility, where some older mills were retrofitted 

with advanced controls and improved rolls, speed increased 50 percent, and foil quality improved. Renovation of additional mills is planned, with computer control to be extended plantwide. In addition, more than 50 

percent of the rolling mills are scheduled to be closed, 

with no loss of capacity anticipated. Although crew size 

in retrofitted mills is the same as before modernization, 

fewer crews will be required as the number of mills is cut 

back.

Material handling also is undergoing extensive automation in rolling mills. In cold rolling mills, for example, 

computer-controlled cranes transport coils from storage 

bins to a conveyor to be carried to a preparation station. 

At this point, sensors feed data on the coil to the mill 

computer, which sets up the rolling operation. The coil 

is automatically loaded and threaded into the mill and 

removed from the mill after rolling. At several plants, 

the rolls that compress the strip are being changed 

automatically. In one instance, the new procedure takes 

5 minutes, compared with 45 minutes for older mills in 

the plant. Occupations affected by these advances include 

crane operators and material handling laborers. However, 

more electronics technicians and maintenance workers are 

needed in establishments introducing these changes.

Extruding operations

More powerful presses, automated production and 

material handling systems, and improved dies and continuous extrusion systems are among key innovations increasing productivity in aluminum extruding. Average 

press size currently is about 50 percent greater than in 

the early 1970’s, and the greater extrudability of new billet 

alloys can be handled more effectively. Almost all new 

presses are equipped with programmable control systems, 

and they are being added to existing presses. Other improvements in press controls include automatic systems 

to regulate extrusion speed. These advances reduce scrap 

formation, a major concern of the industry.

Extrusion production steps before and after the press 

operation also are being modernized by computer control and other advances. In new press systems, aluminum 

is transported automatically from heat treatment to a 

shear and cut into computer-selected billet lengths. 

Extrusions leaving the press are guided along the runout 

table by a computer-controlled puller to their programmed length, automatically moved on to be stretched to programmed tensions, sawed into predetermined 

lengths, and loaded onto carts for movement into and 

from aging ovens. The only manual handling in modern 

computerized systems involves packaging finished 

extrusions.

Automated extrusion systems require a minimum crew 

of two (the press and saw operators) compared with a 

crew of seven on conventional presses. Although 

automated systems eliminate traditional jobs, including 

stretcher operators and helpers, they require programmers and other computer personnel and additional 

maintenance workers. Automated extrusion systems 

probably are not feasible for most smaller establishments 

because production runs are short and the systems are 

expensive. However, some degree of new technology will 

be adopted consistent with their resources and production patterns.

Dies used in extruding presses are being produced by 

computer-aided design and manufacturing (c a d / c a m )

15
techniques which improve die quality. In turn, these highquality dies raise press efficiency and product quality in 

extrusion establishments.

Continuous extrusion systems for selected hollow and 

solid shapes are beginning to appear which are capable 

of significantly lowering labor requirements and reducing scrap for selected products.

Continuous casting

Continuous casting is a highly efficient method to produce mill reroll stock for processing into finished rolled 

products. In one type of continuous caster, molten metal 

is forced through a nozzle into the space between two 

rotating, water-cooled casting cylinders where it solidifies 

and forms a continuous strip which is wound into coils. 

In continuous casting, the conventional steps of casting 

and cutting of ingots, machining to eliminate surface 

defects, and heat treating are eliminated along with 

material handling tasks associated with these operations. 

Hot rolling also is eliminated or reduced to one stage. 

Continuous casting reduces labor, capital, and energy (it 

uses less than a third of the energy required in the conventional method). Specific jobs eliminated in continuous 

casting include ingot casting operators and hot rolling mill 

operators. Also, fewer material handling workers, including crane operators and truckdrivers, are required.

Continuous casting is used by only a few mills, mainly 

in the production of reroll stock for further reduction by 

cold rolling for end use in beverage cans and foil wrapping. However, expanded use of the process for other 

rolled products is expected.

Output and Productivity Outlook

Output

Output in the primary aluminum industry, mainly 

ingots of varied shapes and sizes, increased at an average 

annual rate of only 0.6 percent between 1970 and 1984. 

(See charts 3 and 4.) The rate was highest during the early 

period, 1970-73, 3.9 percent compared with 1.1 percent 

during the middle period, 1973-78, and a 4.0-percent rate 

of decline during 1978-84.

Output in the aluminum industry is responsive to 

developments in the general economy; output in primary 

aluminum fell by 20.3 percent from 1974 to 1975 and by 

27.1 percent from 1981 to 1982, periods when the 

economy turned downward. The latter period of slack 

demand led to closings of six primary aluminum plants, 

with an estimated annual capacity of nearly 800,000 short 

tons idle at the end of 1982.6 In addition, some potlines 

in operating plants were closed; the U.S. Bureau of Mines 

reported a total of about 2.5 million tons of idle capacity 

at the end of 1982. By 1983, however, prospects for the

6 1983 U.S. Industrial Outlook, U.S. Department of Commerce,

Bureau of Industrial Economics, chap. 19, p. 19-10.

industry improved as the economy recovered and primary 

production increased by 2.4 percent from 1982 to 1983. 

In 1984, this expansion continued, but by midyear, 

sharply higher imports, rising inventories, and declining 

prices for aluminum ingot were reported.7 However, 

output for the full year 1984 increased 22.4 percent over 

1983.

Output in the fabricating sector (rolling, drawing, and 

extruding) generally followed the pattern described for 

primary aluminum. Fabricated products are more 

numerous than primary products and include such items 

as flat rolled basic shapes including sheet, plate, and foil, 

and extruded products such as rods, bars, shapes, and 

tubing.

Over the period 1970-84, output of fabricated products 

increased at an average annual rate of 2.0 percent. During the early period 1970-73, demand for aluminum was 

strong, and output increased at an average annual rate 

of 16.3 percent. Between 1973 and 1978, however, the 

annual rate of increase fell sharply to 1.7 percent, and 

during 1978-84, declined at an annual rate of 2.1 percent.

The general economic downturn also affected this sector adversely. In 1975, output in aluminum rolling, drawing, and extruding declined by 29.7 percent; in 1982 by 

12.3 percent. However, output in the fabricating sector 

recovered more sharply than in primary aluminum in 

1983, increasing by 15.3 percent, as the economy 

recovered from recession and demand for aluminum 

products was strong. Output in this sector increased an 

additional 7.0 percent in 1984.

Aluminum production is expected to continue to 

increase through the 1980’s, with containers and packaging, building and construction, and transportation remaining the largest markets. The use of aluminum in 

autos and trucks, for example, is expected to increase 

from 137 pounds per vehicle in 1985 to about 200 pounds 

by 1990.8

According to the U.S. Department of Commerce, total 

shipments of aluminum are expected to increase at a compound annual rate of about 3.5 percent through 1989.9 

However, most expansion of primary aluminum capacity 

may be overseas because energy and other costs are expected to remain high in the United States. Moreover, 

increased imports of aluminum ingots and increased 

recycling also will lower demand for primary aluminum 

from U.S. plants.

Productivity

Productivity (output per employee hour) increased in 

both primary aluminum and fabricating over the period 

1970-84 (charts 3 and 4). However, the productivity gain 

in rolling, drawing, and extruding mills over this period

7 1985 U.S. Industrial Outlook, U.S. Department of Commerce,

International Trade Administration, chap. 20, p. 20-8.

% Ibid., p. 20-10.

9 Ibid.

16
was substantially higher than in primary aluminum. The 

productivity change in both sectors was characterized by 

substantial variation in rate and direction.

Productivity in primary aluminum increased at a relatively modest average annual rate of 1.0 percent between 

1970 and 1984. During 1970-73, however, output per employee hour increased by an annual rate of 2.1 percent, 

and output increased by 3.9 percent, more than double the 

1.8-percent annual rate of increase in employee hours. Between 1973 and 1978, however, output per employee hour 

declined at an annual rate of 0.7 percent. This period included the 1974-75 recession, when output per employee 

hour fell by 13.2 percent. Productivity improved markedly 

from 1978 to 1984, with output per employee hour increasing at an average annual rate of 3.2 percent. In 1984, 

output per employee hour in primary aluminum rose 

sharply—by 10.1 percent—as output increased by 22.4 

percent and employee hours rose a lesser 11.1 percent.

Productivity in aluminum fabrication increased at a 

relatively strong average annual rate of 2.7 percent during 1970-84. Over this period, output increased at an 

annual rate of 2.0 percent, and employee hours declined 

at an annual rate of 0.7 percent. The productivity gain 

in aluminum rolling, drawing, and extruding was the 

greatest in 1970-73; output per employee hour rose by 

a substantial average annual rate of 13.0 percent as output surged at an annual rate of 16.3 percent and employee 

hours rose at a lower annual rate of 2.9 percent.

The productivity growth rate slowed markedly during 

1973-78, however, with output per employee hour increasing at an average annual rate of 2.2 percent. As in primary 

aluminum, output per employee hour in fabricating fell 

during the recession period 1974-75, down by 9.2 percent. 

During 1978-83, output per employee hour increased at 

a slower annual rate of 1.8 percent. However, in 1983, 

output per employee hour rose sharply by 11.3 percent, 

as output gains associated with economic recovery greatly 

exceeded expansion in employee hours. A slightly higher 

increase in output compared to employee hours in 1984 

resulted in an additional productivity gain of 0.2 percent.

Productivity change is difficult to assess since measures 

of output per employee hour reflect a number of interrelated factors, including technology, capital investment 

per worker, utilization of capacity, skill and effort of the 

work force and management, and other related factors. 

The specific contribution of labor, capital, or any other 

variable cannot be determined. However, if projections 

of a higher volume of shipments of aluminum through 

the second half of the 1980’s are realized, and investment 

in new technology continues as expected, the productivity 

record of the industry could improve.

Investment

Capital expenditures in the primary aluminum and 

aluminum fabricating sectors have been rising as demand

for aluminum products has intensified. During 1970-81, 

these industries spent $3.7 billion (constant 1972 dollars) 

to increase capacity and improve efficiency. 10

Spending by primary aluminum plants totaled $1.6 

billion in real terms over the period, with a high of $214.4 

million in 1981. Marked swings in annual investment in 

primary aluminum reflect, in part, the comparatively 

small number of producers in the industry. The cost of 

establishing a new smelter will raise the level of industry 

expenditures significantly. For example, a new smelter 

constructed during the latter part of this period cost $350 

million in current dollars.

Primary aluminum capacity increased almost 40 percent 

between 1970 and 1982 as new smelters were constructed 

and existing plants were expanded and upgraded. However, as indicated earlier, industry experts anticipate that 

future major additions to primary aluminum capacity will 

be overseas where energy costs are lower. Thus, future 

domestic spending for new projects may be reduced.

Fabricating establishments invested $2.1 billion (constant dollars) between 1970 and 1981 in new plant and 

equipment, including a high of $255.5 million in 1980. 

While a consistent pattern of increasing annual investment was not evident, the trend of capital spending 

reflected anticipated increases in production.

Capital expenditures per production worker in primary 

aluminum and aluminum fabrication have been higher 

than in all manufacturing. The average per production 

worker in aluminum fabrication between 1970 and 1981 

exceeded all manufacturing by 61 percent, while the 

average in the highly capital-intensive primary industry 

exceeded that for all manufacturing by 165 percent.

Employment and Occupational Trends

Employment

Employment in the primary aluminum and rolling, 

drawing, and extruding sectors of the industry combined 

declined from 91,700 to 82,600 workers over the period 

1970-84, or by 9.9 percent. (See charts 5 and 6.) Sixty 

percent of the decline was in rolling, drawing, and extruding mills, which employed more than 70 percent of 

the work force in 1984 in the two sectors combined. Production workers made up about 75 percent of the work 

force and accounted for nearly the entire downturn in 

employment over this period. Employment in both sectors 

of the industry moved sharply lower during the decline 

in the economy during the mid-1970’s and during 1980-82. 

The change in demand for aluminum rather than new 

technology was the most significant factor affecting the 

level of employment over this period.

Prospects for employment growth appear more favor10 U.S. Department of Commerce, Bureau of Industrial Economics,

Office of Research, Analysis, and Statistics.

17
able for both primary aluminum and rolling, drawing, 

and extruding mills, based on projected gains in shipments and the upturn in the economy which began in 1983. 

A more detailed analysis of employment trends in primary 

aluminum and in fabricating mills is presented below.

Primary aluminum. In 1984, a total of 23,100 employees 

worked in the primary mills which convert alumina to 

aluminum—well below the 26,700 employed in 1970. 

Employment moved generally higher throughout the 

1970’s, and peaked at 32,800 in 1980. The periods 1974-75 

and 1980-83 were exceptions to the general rise in employment over this period. Between 1980 and 1983, employment declined by 35 percent as demand for aluminum 

slackened and by 1983 had fallen to the lowest level in 

the period. Some less efficient plants which closed during this period are not expected to reopen.

An examination of employment data shown in chart 

5 provides a broader view of employment change in 

primary aluminum. During 1970-73, employment increased at an average annual rate of 1.9 percent, slowed 

slightly during 1973-78 to an annual growth rate of 1.3 

percent, and declined during the more recent period,

1978- 83, at an annual rate of 7.4 percent. An employment gain of 7.9 percent in 1984 accompanied the 

substantial increase in production in this sector and 

marked a reversal from the 1980-83 decline.

Rolling, drawing, and extruding. Employment in this sector declined from 65,000 to 59,500 workers over the 

period 1970-84. The downward trend in employment 

followed a somewhat different pattern compared to 

primary aluminum. The rate of decline between 1973 and 

1975, which included a recession, was much more severe, 

at an annual rate of 12.0 percent compared to 4.8 percent in primary aluminum. The precipitousness of this 

decline is illustrated by the fact that 1973 was the highest 

level of employment in rolling, drawing, and extruding 

mills over the period 1970-84, and the number employed 

in 1975 was the lowest. However, the trend differed for 

these two sectors of the industry during the more recent 

period 1979-83. Although employment in fabricating mills 

fell off sharply, at an annual rate of 6.0 percent during

1979- 82, the decline in the primary sector, which took 

place from 1980 to 1983, was far greater—at an annual 

rate of 14.5 percent.

As indicated in chart 6, the employment situation in 

rolling, drawing, and extruding mills appeared to worsen 

progressively over the longer span 1970-82. Between 1970 

and 1973, employment increased at an annual rate of 1.4 

percent, turned down over the years 1973-78 at an annual 

rate of 0.3 percent, and experienced a further deterioration during 1978-82, when employment moved sharply 

lower at an annual rate of 4.4 percent. Between 1982 and 

1984, however, employment increased at an annual rate 

of 3.3 percent.

Occupations

b l s projections of employment by occupation are not 

available for primary aluminum or fabricating; however 

the trends in technology suggest some changes for the next 

decade. Although new technology is lowering unit labor 

requirements of pot tenders, casting operators, rolling 

mill operators, and other workers in primary and fabrication plants, widespread displacement is not anticipated. 

Moreover, most occupations in aluminum production and 

fabrication into the mid-1990’s are expected to involve 

generally the same skills and duties as in the past, with 

several important exceptions discussed below.

The work force changes accompanying technological 

improvements in the aluminum industry are generally 

similar to those in other capital-intensive industries, such 

as steel and paper. The introduction of computer process 

control and advanced instrumentation in potline and rolling mill operations has modified the jobs of potline 

tenders and rolling mill operators to include more extensive monitoring of production operations from modernized control stations and less direct manual involvement. 

Maintenance skills are reportedly higher for these 

systems. In primary aluminum, improvements in the 

design of the pots and the materials used to line them 

reduce labor requirements of pot tenders and potliners 

who monitor and maintain them. Furthermore, the 

general improvement in equipment to move molten metal 

and fabricated products through production steps affects 

a wide range of occupations in primary aluminum and 

fabrication operations, with improved handling and lower 

labor requirements generally accompanying these changes.

Because the production of aluminum is capital and 

energy intensive, most changes involve modifications of 

portions of the production process, rather than the construction of entirely new plants. When expensive new facilities are constructed, however, they incorporate the latest 

technologies, which require less energy and labor than 

older facilities. In new mills, for example, the number of 

potline tenders and liners, rolling mill operators, and related production workers required for comparable levels 

of output are lower than in less modernized facilities. 

Moreover, some experts foresee that new technology may 

result in combining jobs, that is, workers increasingly will 

take responsibility for several tasks, such as both the 

operation and maintenance of rolling and extrusion 

equipment. Although unit labor requirements are lower 

in new plants, it is important to keep in mind that the 

major incentive to modernization—particularly in primary aluminum plants—is to lower energy costs.

The extent to which mechanization of aluminum 

reduction and fabrication processes will affect the structure of the work force will depend on several key factors, including the availability of funds for modernization, the impact of foreign competition, and the general 

outlook for the industry.

18
Chart 3. Output per employee hour and related data, primary aluminum, 1970-84

(Index, 1977 = 100)

Source: Bureau of Labor Statistics.

19
Chart 4. Output per employee hour and related data, aluminum rolling, drawing, and extruding,

1970-84

(Index, 1977 = 100)

Source: Bureau of Labor Statistics.

20
Chart 5. Employment in primary aluminum, 1970-84

Employees (in thousands) Employees (in thousands)

1 Least squares trends method.

Source: Bureau of the Census. 1984 employm ent estim ated by the Bureau of Labor Statistics.

Adjustment of workers to technological change

The aluminum industry is highly unionized. The 

United Steelworkers of America (a f l -c io ) and the 

Aluminum, Brick and Glass Workers International Union 

(a f l -c io ) represent the majority of process and maintenance workers.

The introduction of new technology has not resulted 

in widespread displacement, and work force adjustments 

to advanced process control technology, continuous 

casting, and other innovations have been handled in the 

context of general provisions of collective bargaining 

agreements related to seniority, training, wage rate determination, and related topics. The collective bargaining 

agreements negotiated between major producers and

unions include a requirement that the union be notified 

90 days in advance of plant shutdowns.

The aluminum industry is among the U.S. industries 

which have faced increased competition in domestic and 

foreign markets and is now recovering from a period of 

depressed demand. Accordingly, the 3-year collective 

bargaining agreement negotiated in 1983 between major 

producers and unions recognized problems faced by the 

industry, and included major wage and benefit concessions by the unions to reduce costs. These include no 

general wage increase; a reduction in cost-of-living 

benefits, and a cutback in other benefits. Some benefits 

were strengthened, but the net effect was a slowdown in 

the rise of wage and benefit costs. A 1985 contract be21
Chart 6. Employment in aluminum rolling, drawing, and extruding, 1970-84

Employees (in thousands) Employees (in thousands)

1 Least squares trends method.

Source: Bureau of the Census. 1984 employm ent estim ated by the Bureau of Labor Statistics.

tween a major producer and the United Steelworkers 

superseded the 1983 agreement and involved a cutback 

in wages and benefits in exchange for the issuance of company stock to the employees. The union also received a 

seat on the company’s board of directors.

These concessions are expected to strengthen job 

security, as some plants scheduled for closing will remain 

in operation because of a lower cost structure. Moreover,

additional funds will be available to modernize and generally improve the competitive position of the industry. On 

the other hand, supplementary agreements negotiated at 

some plants over the past several years have cut back crew 

size on potlines and in other operations. Some firms 

which have instituted labor cutbacks have allowed early 

retirement to ease the impact on the work force.

22
SELECTED REFERENCES

Altan, Taylan and Carl F. Billhardt. “ Application of cad/ cam in

Extrusion—A Management Overview,” Light Metal Age, October

1983, pp. 24 and following.

Aluminum—Profile o f the Industry, edited by Jeffrey Keeff. New York,

McGraw-Hill, Inc., 1982, 201 pp.

“ An Ultra Modern Aluminum Smelter,” Light Metal Age, December

1980, pp. 10-13.

Baumgardner, Luke H. and Frank X. McCawley. “ Aluminum,”

Mineral Commodity Profile. U.S. Department of the Interior, Bureau

of Mines, 1983.

Brondyke, Kenneth J. “ The Aluminum Industry in 1982 and Outlook

for the 80’s,” Journal o f Metals, April 1983, pp. 63 and following.

“ Extrusion Technology Conference Spotlights Automation Advances,”

Modern Metals, May 1984, pp. 6 and following.

Haupin, Warren E. and William B. Frank. “ Electrometallurgy of

Aluminum,” Comprehensive Treatise o f Electrometallurgy, Vol. 2.

New York, Plenum Publishing Corporation, 1981, pp. 301-25.

“ Hot Top Caster Doubles Extrusion Billet Production,” Modern

Metals, January 1983, pp. 34-35.

“ Introduction to the Alusuisse Caster II Process,” Light Metal Age,

June 1983, pp. 10, 12.

Parks, K. W. and L. L Young. “ Alcoa’s Ring Furnace Technology,”

Light Metal Age, June 1983, pp. 20-21.

Pennington, Neiland. “ Reynolds Modernizes Sheet Mill; Updates

Market Strategy,” Modern Metals, April 1983, pp. 54 and following.

Regan, Robert J. “ Steady Gains in Output and Prices Mark Aluminum’s

Recovery,” Iron Age, Oct. 21, 1983, pp. 49 and following.

Riedlinger, Tom. “ Reynolds Goes Continuous; Gains Sheet/Foil

Muscle,” Modern Metals, July 1980, pp. 52 and following.

Russell, Allen S. “ Pitfalls and Pleasures in New Aluminum Process

Development,” address delivered at American Institute of Mining,

Metallurgical and Petroleum Engineers, Inc., meeting, Chicago, 111.,

Feb. 24, 1981.

The Aluminum Association. Aluminum: A Vital U.S. Industry in a

Highly Competitive World Market, 1984, 59 pp.

The Aluminum Association. Energy Conservation and the Aluminum

Industry, 1984, 9 pp.

“ The Blaw-Knox Inflatable Crown Roll System,” Light Metal Age,

April 1983, p. 16.

U.S. Department of Labor, Bureau of Labor Statistics. Industry Wage

Survey: Nonferrous Metal Manufacturing Industries, February 1981,

Bulletin 2167, December 1983.

23
Chapter 3. Aerospace

Summary

The aerospace industry (sic 372, aircraft and parts; 

sic 376, missiles and space vehicles) has been in the 

forefront in adopting computer technologies to improve 

product quality and reliability and increase labor productivity. This has taken the form of automating the machine 

tools used in production through widespread use of computer numerical control and computer-aided design and 

manufacture, and, with less frequency, industrial robots. 

Adoption of new technologies has been stimulated, in 

part, by the need to develop less labor-intensive means 

of manufacturing new products, such as composite 

materials, to replace metals in aircraft.

BLS has not developed a productivity measure for the 

aerospace industry because of the complexity of the industry and the limitations of available data. The data available suggest that in the aircraft and parts industry, output 

per employee hour rose at a modest rate during the period 

1972-82, as real output increased at only a slightly more 

rapid rate than employee hours. These trends compare 

unfavorably with the earlier years, 1960-73, when productivity growth was more substantial. In the missiles and 

space vehicles industry, productivity showed little or no 

growth during 1972-82 as shipments fell at approximately 

the same modest rate as employee hours.

Real investment in the aircraft and parts industry 

slipped sharply in the early 1970’s, to its lowest level in 

two decades, then turned around during the late 1970’s 

and peaked in 1980. The low level of investment during 

the early years is attributable to excess capacity as a result 

of the winding down of the Vietnam War and the 

economic recession. The upturn during the late 1970’s occurred as output expanded rapidly. In the missiles and 

space vehicles industry, investment also declined erratically through most of the early 1970’s, to its lowest level 

since the mid-1950’s, before increasing sharply in the late 

1970’s and early 1980’s. Nevertheless, the 1981 peak was 

only half the record 1967 level of investment.

Employment in the aircraft and parts industry 

fluctuated widely during the 1970-84 period due to changing economic and political conditions. Overall, employment grew an average of 0.9 percent annually, but, by 

1984, it was about one-third below its Vietnam-era peak. 

b l s projects that by 1995 employment in this industry 

will approximate the 1970 level, an increase of 1.1 percent annually from 1984, assuming moderate growth of

the economy. In the missiles and space vehicles industry, 

employment generally declined during the early to 

mid-1970’s, then rose sharply in the late 1970’s and early 

1980’s. BLS projects that employment in 1995 for this industry will be sharply higher than in 1984, increasing at 

a rate of 2.2 percent annually over the period, assuming 

moderate growth of the economy.

Industry Structure

The aerospace industry is one of the most highly concentrated large industries due to the enormous capital requirements for aerospace projects, long startup period 

for each project, economies of scale, and the hightechnology nature of the industry. In the commercial 

aviation sector, there are currently only three manufacturers, and, in the jet engine market, two producers have 

an overwhelming share. The military and general aviation sectors are less concentrated, although through consolidations the number of producers is declining. The 

growing internationalization of the industry is likely to 

cause some restructuring of these sectors, however.

A large number of suppliers and job shops subcontract to the principal aircraft and engine manufacturers. 

For example, one large airframe builder has a network 

of 3,500 subcontractors and suppliers (not all classified 

as aerospace) which together produce about half the components of each plane. Competition is intense among 

these companies, which, for the most part, are relatively 

small, having less than 250 workers, in contrast to the 

very large size of the prime contractors.

Technology in the 1980’s

The major focus of technological improvement has 

been the automation of machine tools used in production. Automation has taken the form of widespread use of 

numerical control (n c ), ranging from comparatively simple hand-used NC to minicomputer- and microprocessorbased units (i.e., computer numerical control, c n c ), to 

large and complex direct numerical control (DNC)

systems. These technologies improve product quality and 

lower unit labor requirements. Also, industrial robots are 

being adopted in production areas characterized by long 

production runs and simple, repetitive steps. Their application in this industry is limited, however, because 

complexity and small batch runs are the norm.

24
The development of several new aircraft products has 

been a major stimulus for the diffusion of new manufacturing technologies. In particular, greater acceptance of 

composite materials in aircraft as a substitute for heavier 

weight metals has led to the development of new fabricating techniques to replace more labor-intensive conventional methods. Also, use of harder steels than tool steel 

has led to the diffusion of laser and electrochemical 

equipment.

The major technology changes in the aerospace industry, their implications for labor and their diffusion 

are summarized in table 3.

Numerical control

The numerical control of machine tools is used 

throughout the aerospace industry. NC technology, first 

developed in rudimentary form by a defense subcontractor for the production of complex aircraft and missile 

parts during the late 1940’s, was adopted on a large scale 

during the 1960’s and early 1970’s. In 1978, the aircraft

and parts industry had the largest number of NC

machines of any industry—7,500—amounting to 14 percent of the total for all metalworking industries.1 By 

1983, there were 8,800 NC machines in the aircraft and 

parts industry,2 which accounted for 9 percent of that 

industry’s machine tools, a proportion exceeded by only 

one other metalworking industry. In the missiles and 

space vehicles industry, about 8 percent of all machine 

tools were NC.

Basic NC, a major step towards automating the 

machining process, features an electronic controller which 

automatically directs machine movement by reading 

coded instructions in digital form. The instructions, which 

are most commonly transmitted to the machine by means 

of perforated tape, indicate the moves, sequences, tools, 

and motions that the machinery will need to produce the 

part.

1 “ The 13th Annual Inventory of Metalworking Equipment, 1983,”

American Machinist, November 1983, pp. 113-44.

2 Ibid.

Table 3. Major technology changes in aerospace

Technology Description Labor implications Diffusion

Numerical control (NC) Machine tool movement controlled

automatically by electronic controller. Instructions are transmitted to

machine by perforated tape, punchcard, etc. Reduces setup time, increases operating rates and accuracy

compared to manual operations.

Reduces unit labor requirements for

machine operators. Requires less skill

than manual operation of tools.

Creates new position of programmer.

In 1983, 9 percent of all machine tools

in the aircraft industry and 8 percent in

the missile industry had NC, CNC, or

DNC.

Computer numerical control (CNC) Microcomputer located on machine

tool controls operations. Makes program changes easier than for simple

NC unit. With CNC, tool can be connected to master computer.

Substantially lowers unit labor requirements for programming and

machining. Allows the consolidation

of three jobs—computer programmer, maintainer, and machinist—into

one position under certain conditions.

Reduces skill requirements for programming and machining.

Accounts for a rising proportion of NC

machine tools in use. Rapid growth

stimulated by increased capability of

CNC machines and sharp declines in

microcomputer costs. Continued rapid

diffusion expected.

Direct numerical control (DNC) Master computer “ supervises” operations of individual CNC machine

tools on shop floor.

Similar to CNC. Diffusion generally limited to largest

plants. Aircraft industry use more extensive than most other industries. Diffusion increasing.

Computer-aided design/computeraided manufacture (CAD/CAM )

CAD is a highly efficient computerized

drafting tool in the form of a CRT;

allows operator to easily alter or

rotate parts designs. Designs can be

stored in central computer or

transferred to other areas. CAM controls machine operation and material

handling on shop floor. Improves

accuracy.

Reduces unit labor requirements for

drafters and programmers. With

CAD, time required to design a part

can be cut between one-eighth and

one-half that necessary for manual

drafting. Most workers can be retrained to operate CAD/CAM in a

relatively short time.

Extensively adopted by large aircraft and

parts manufacturers in last decade. Diffusion expanding to smaller firms due

to falling prices and improved capability. Some major firms are requiring

that their subcontractors have

CAD/CAM to facilitate intercompany

transfer of data and drawings.

Industrial robot Manipulator (i.e., arm or machine)

moves tool parts or materials through

programmed motions to perform

variety of simple tasks, e.g., drilling

holes, spray painting, or welding.

Substantially boosts productivity; e.g.,

where it formerly took five workers

6 hours to manually paint an aircraft

section, with painting robot, two

workers are required in the same

time.

78 robots in operation in aircraft industry

in 1983; diffusion low due to batchoriented nature of much of aircraft production. Expanded use expected in

areas which can be readily automated.

Flexible manufacturing system Computer-controlled work stations are

linked by sophisticated materials

handling system. Allows randomized

routing of parts. Can accommodate

the machining of a wide range of

products. Reduces inventory costs.

Reduces unit labor requirements by

two-thirds compared to conventional

equipment. Requires only unskilled

workers to load and unload system on

the shop floor. Highly skilled electronic technicians are required for

maintenance.

Two systems have become operational

within the last 2 years. Two others are

under construction.

25
n c can substantially boost productivity by reducing 

downtime relative to older methods. One major area of 

time savings is setup. By cutting down on setup time, 

actual operating time can be increased. Whereas the 

average conventional tool may be operating only about 

15 to 20 percent of each shift; with NC, it conceivably 

could be operating up to 40 percent of the shift.

Use of NC also reduces requirements for skilled labor. 

For example, the position of template maker is eliminated 

because machine movement is automatically controlled 

by tape. Typically, a manufacturing engineer will determine machine movement, while a computer programmer 

will program the tapes.

Requirements for skilled machinists are also reduced. 

With conventional equipment, the machinist generally 

has to make each part separately. With the n c equipment, the machinist sets up the equipment and ensures 

that it is working properly and a lower skilled operator 

then monitors the machine’s operation.

Other advantages of the NC include closer tolerances, 

higher speeds, and considerable scrap savings. With n c ,

the parts are more consistent because the same program 

can be used to make the part each time it is produced, 

while with a manually guided machine tool, the pieces 

may be subject to some variation, depending on the 

machinist’s skill.

Computer numerical control

A more sophisticated type of automated machine control which substantially reduces unit labor requirements is 

computer numerical control (c n c ). This technology became a feasible alternative to basic NC during the mid1970’s. In a c n c unit, a minicomputer is used to control 

basic NC functions by means of programs which are 

stored in the minicomputer’s memory. When a part is to 

be machined, a stored program is retrieved from the computer’s memory, and the operation is then performed, 

with the computer element becoming the control unit.

CNC has several features which give it a substantial 

edge over a simple NC unit. First, the machine operator 

can easily modify the program on a CNC unit by revising the data stored in the computer, rather than sending 

a punchtape back to the computer room for the programmer to rewrite. Moreover, the computer is more 

reliable than tape; the tape, tape puncher, and tape reader 

of a simple NC machine can frequently malfunction. A 

third major advantage of CNC over n c is that the c n c

units can be connected to other master computers (d n c ,

which is discussed below).

Unit labor reductions can be substantial with CNC,

when compared to conventional equipment. For instance, 

at one aircraft manufacturing plant which installed three 

computer-controlled tube-bending machines to bend both 

aluminum and steel, one operator can produce 60 pieces 

of tubing in less than half a day.3 By contrast, it took

3 Iron Age, July 14, 1982, p. 64.

two workers 5 days to produce the same amount of tubing 

using conventional equipment.

Labor savings can also result from job consolidations 

once a c n c unit is brought online. In some cases, three 

separate jobs—computer programmer, machine maintainer, and machinist—can be merged into one job on 

the shop floor. This is possible largely because of the 

relative simplicity of CNC programming compared to NC.

Older NC equipment generally requires highly skilled programmers while the new CNC technology is simple enough 

to use so that a worker with limited programming experience can become proficient. However, in many 

plants, management separates programming from 

machine tool operation. By increasing the division of 

labor (rather than consolidating it), management is able 

to remove much of the decisionmaking and discretion 

from the shop floor and, therefore, can fill the machine 

operator’s job with a less skilled worker.

Diffusion of CNC machine tools in the aerospace industry has increased because c n c has substantially 

greater capability than NC, and has become more 

affordable as the cost of computers has fallen.

Direct numerical control

Closely related to c n c is direct numerical control 

( d n c ), which is used in some very large aircraft plants. 

With a d n c system, a central computer is able to program and run simultaneously a number of CNC machines 

on the factory floor. The shop-floor machines in turn indicate to the central controlling computer when its commands are carried out. At one large plant which manufactures gas turbine aircraft engines, a central computer 

“ supervises” the operation of 103 CNC machine tools, 

as well as an automated material handling system. Additional c n c machine tools are being added to the system.

Productivity is substantially boosted with DNC. For instance, at one large aircraft plant with d n c , the plant’s 

tools are now cutting metal 38 percent of the time that 

they are in operation compared to 15 percent previously.

Generally, the same labor is required for d n c as CNC.

However, unlike CNC, the worker does not have to enter 

data at his own work station; rather, data are sent 

automatically to his station from the central computer.

Computer-aided design/computer-aided

manufacture

Computer-aided design/computer-aided manufacture 

(c a d / c a m ) is yet another computer application which 

was first developed for the aerospace industry. This 

technology facilitates both the design and manufacture 

of parts and can substantially increase productivity, c a d

can operate independently of c a m , but greater efficiency 

results when the two systems are closely coordinated.

The CAD system serves as a highly sophisticated drafting tool. The design engineer or drafter is provided with 

an electronic drafting board in the form of a cathode ray

26
tube (CRT) on which parts and assemblies can be 

displayed. The system allows the engineer to easily switch 

or rotate design variations, as the computer adjusts every 

line, angle, and cross-section. The completed design can 

be stored in the central computer or passed through the 

computer directly to the manufacturing operations (i.e., 

manufacturing engineers, programmers, etc.).

The second part of the technology, c a m , is the application of computers to integrate design with the 

manufacturing process. With a sophisticated c a d / c a m

system, manufacturing engineers can pull computergenerated designs and modeling data from a computer, 

then use the computer and stored information to design 

the tooling, fixtures, and control procedures needed 

to make the piece, c a m also serves as a system to control the operations of machine tools (which may be 

c n c or robots) on the shop floor and can be used for 

planning.

The productivity advantage of this technology— 

whether CAD alone or the integrated c a d / c a m system—is 

substantial. With c a d alone, the time required to design 

a part is frequently cut to between one-eighth to one-half 

of that necessary for manual drafting. For instance, one 

large plant which manufactures helicopter blades recently 

installed a c a d / c a m system; the engineering of parts now 

takes only one-eighth to one-fourth as long as the 

conventional method of detailing from blueprints. Time 

savings result not only because drafting is facilitated 

but because the design and data can be transferred 

through the computer from the design shop to the 

manufacturing shop several miles away in seconds. Under 

the old system, a drafter in the manufacturing shop would 

have to duplicate the design-shop drawing by superimposing a piece of paper and hand copying it line by 

line.

An additional advantage of c a d / c a m is that it is considerably more accurate than drafting by hand; 

c a d / c a m - manufactured parts can be finished to closer 

tolerances and with fewer errors. This provides major savings during subsequent assembly operations because the 

closer tolerances make assembly simpler and less costly. 

Also, because the programming of parts can be done so 

quickly with c a d / c a m , it becomes economically feasible 

to program for even very small batch production.

In many cases, workers are retrained to operate a 

CAD/CAM system. At one aircraft plant, 100 workers 

(design engineers, tool engineers, structural designers, and 

drafters) underwent a 6-month, in-house training program when the new c a d / c a m system was installed. No 

workers were laid off at that time. More recently, new 

drafters were given a 3-week, 3-hour-per-day training program to become fully functional on the c a d / c a m system.

Since 1974, when c a d / c a m systems first came into 

use, they have been widely diffused throughout the 

aerospace industry. Initially, the technology was adopted 

by the major aerospace companies, but, with lower computer prices and improvements in the technology, it is 

spreading to smaller firms. Some of the major aircraft 

manufacturers are requesting that their suppliers and subcontractors be equipped with c a d / c a m to facilitate intercompany transfer of drawings and data.

Industrial robots

Industrial robots are being adopted by aerospace 

manufacturers to do simple manual tasks such as drilling holes, spray painting, and welding. These functions 

are comparatively easy to adapt to robots because the 

paths the robot is to follow are predictable, the tasks are 

repetitive, and little sensing capability is required. Robots 

are also being used to some degree to lay graphite on composite production lines.

Large productivity gains are associated with the 

adoption of industrial robots. For example, after a major 

aircraft manufacturer installed a robot in the plant’s 

vertical tail construction station, unit labor requirements were reduced by almost two-thirds. Formerly, it 

took a worker a full day to drill all the necessary holes 

in a graphite epoxy skin; with the robot, he can drill 

between two and three skins each day.4 The original 

operator was retrained to operate the robot. At a second 

aircraft plant, a spray-painting robot was installed to 

paint airplane sections. Previously, using conventional 

equipment, five workers needed 8 hours to manually paint 

the aircraft section; with the robot, only two workers 

are required to paint the piece in the same period of 

time.5

Product reliability is another factor favoring the diffusion of robots. Error is reduced because robotproduced parts are the same every time, and they are of 

consistently high quality. And since parts can be made 

to closer tolerances, subsequent assembly operations are 

facilitated.

Despite the apparent advantages, diffusion of the 

robot is low in aerospace relative to high-volume industries such as automobiles and appliances. A 1983 

survey revealed 78 robots in the aircraft industry out of 

a total of 2,744 in all metalworking industries.6 The low 

diffusion is attributable to the nature of aerospace production, which is largely batch or job oriented. Nevertheless, diffusion is expected to increase in those areas 

which can be automated. One aircraft manufacturer who 

had eight robots in 1982 predicted that the company 

would have 40 within the next several years.7 At a 

second plant with three robots, management plans to add 

dozens more as part of a $1 billion modernization 

program.8

4 Iron Age, July 14, 1984, p. 63.

5 Aviation Week and Space Technology, Aug. 2, 1982, p. 78.

6 “ The 13th Annual Inventory of Metalworking Equipment,

1983,” American Machinist, November 1983.

1 Aviation Week and Space Technology, Aug. 2, 1982, p. 77.

%Ibid., April 19, 1984, p. 27.

27
Flexible manufacturing system

On the cutting edge of technological development in 

the aerospace industry is the flexible manufacturing system (FMS), which can reduce downtime and unit labor requirements. At one plant with an FMS, unit labor requirements to produce parts were reduced to an average of only 

one-third of that required for conventional equipment.

An FMS consists of a series of computer-controlled 

work stations which are linked by a sophisticated 

material-handling system to transport work pieces from 

one station to the next. The system allows the randomized 

routing of parts to different work stations, rather than 

necessarily running them in a straight line through the 

stations. In addition, the system can be sufficiently flexible to accommodate the machining of a wide range of 

products through use of quick-change, automated tooling and computer control. For example, at one plant producing fuselage sections for the B-l bomber, 541 different 

parts can be produced with relatively quick changeover 

of tooling. By contrast, a conventional transfer line is 

typically designed to machine a single piece.

The major advantage of flexible manufacturing is that 

it allows more economical production of small quantities 

of a variety of parts. This is achieved through reducing

downtime and improving machine utilization and material handling, thereby cutting unit labor requirements. 

One FMS is designed to result in 80- to 85-percent 

machine-time use, compared to 15 to 25 percent for conventional manufacturing setups.9 Another advantage of 

this system is that inventory costs can be minimized since 

new parts can be so readily and cheaply produced.

Output and Productivity Trends

Output

Output in the aerospace industry is highly volatile, as a 

result of both changing economic conditions and differing 

perceptions of the Nation’s defense requirements (chart 7 

and 8). While there is no definitive measure of output, 

available data10 indicate sharp fluctuations, but relatively 

good overall growth. In the 1972-82 period, estimates of real 

output growth range from 3 1/2 percent (Census) to 4 1/2 

percent (Federal Reserve). The rate of output growth for all 

durable goods was 2.4 percent during that period (BLS).

9 Aviation Week and Space Technology, Aug. 2, 1982, pp. 46-47.

10 Bureau of the Census, Census o f Manufactures, deflated value

of shipments; Board of Governors of the Federal Reserve Board, Index

of Industrial Production.

Operators monitor a flexible manufacturing system used to machine fuselage parts.

28
Chart 7. Output and employee hours, aircraft and parts, 1972-82

(Index, 1977 = 100) (Index, 1977 = 100)

1 Based on data from the Bureau of the Census and the Bureau of Labor Statistics.

2Deflated value of shipments based on Bureau of the Census and Bureau of Labor Statistics data.

Source: Bureau of Labor Statistics.

Output in the aircraft and parts industry declined during the early 1970’s due to the 1970 recession (which collasped the commercial aircraft market) and to reduced 

military demand associated with the winding down of the 

Vietnam War. It increased in 1973, only to fall again as 

a result of the 1974-75 recession. The late 1970’s and 1980 

were marked by a sharp rise in production due to strength 

in the civil aircraft sector which was offset to some degree 

by a decline in military production.

During the early 1980’s, aircraft production was 

depressed by recession, high interest rates, and greater 

foreign competition. Commercial large transport and 

general aviation aircraft production was hurt by lower 

corporate profits, the restructuring of domestic airlines, 

and stiff competition overseas. Unit sales were especially 

depressed in the general aviation sector, falling from 

17,811 in 1978 to 4,266 in 1982. Dollar sales were not 

hurt as much because of a change of product mix in favor 

of higher priced turbo and commuter jets. Weakness in 

these important sectors was partially offset by gains in 

the military sector.

The growing internationalization of the aircraft industry has contributed to the decline in domestic output 

in recent years. Foreign producers have gained an increased share of the global aircraft market, which had 

historically been overwhelmingly dominated by U.S. 

manufacturers. For the period 1964-79, U.S. commercial jets represented almost 90 percent of the annual 

global market. Between 1980 and early 1984, the U.S. 

share of the wide-body transport aircraft market, which 

accounts for almost half of the total large transport 

market (dollar value), was estimated to be 68 percent.11

Moreover, foreign producers have been able to make 

substantial inroads into the U.S. aircraft market, with 

their greatest penetration in the general aviation sector 

(36-percent share in 1982 compared to 10 percent in 1978) 

and the helicopter sector (35-percent share in 1982 compared to 14 percent in 1978).

During the remainder of the decade, output growth in 

the aircraft and parts industry is expected to be strong, in 

large part due to high military demand. The prospects for 

commercial transport are also expected to improve, because 

the existing airfleet is aging, noisy, and fuel inefficient.

Output in the missiles and space vehicles industry is, 

like aircraft, highly volatile. It declined sharply during

11 U.S. Department of Commerce, International Trade Administration.

29
Chart 8. Output and employee hours, missiles and space vehicles, 1972-82

(Index, 1977=100) (Index, 1977 = 100)

1 Based on data from the Bureau of the Census and the Bureau of Labor Statistics.

2Deflated value of shipments based on data from Bureau of the Census and Bureau of Labor Statistics.

Source: Bureau of Labor Statistics.

most of the 1970’s to reach a low in 1977, then rebounded 

as the Nation began to rebuild its defenses. The missiles 

and space vehicles industry has become the most rapidly 

growing aerospace sector, with space products its most 

dynamic segment. A strong export market has also 

boosted sales. Overall, for the entire period 1972-82, output declined by about 1 percent annually because of the 

weakness in early years.

Output growth is expected to continue for the missiles 

and space vehicles industry if the country follows 

through on its planned defense expenditures. The Department of Commerce projects very rapid growth in the 

missiles and space vehicles sector during the remainder 

of the decade and only slightly less rapid growth for 

shipments of space propulsion units and space vehicle 

equipment.12

Productivity

Available data suggest that output per employee hour 

in the aircraft and parts industry increased at a modest 

rate during the period 1972-82 (no earlier or later data 

available). Real output is estimated to have increased by

approximately 3 1/2 to 4 1/2 percent annually during 

those years (see above), while employee hours (based on 

Bureau of the Census data) rose by about 3 percent 

annually.

The small decline in the ratio of payroll to value added 

through 1981 (0.7 percent annually) would also indicate 

relatively slow productivity growth. The low growth contrasts with the stronger productivity increase of the 

1960-73 years when aircraft industry output rose more 

than 3 percent and employee hours fell by about 1 percent annually.13

The slower growth in productivity during the latter 

period can be at least in part attributed to the volatile 

shifts in output, with delayed adjustments in employment. 

The growing complexity of the product (such as increasing amounts of electronic gear) and more frequent 

changes in design have also been cited as causes for the 

limited productivity gains.

12 1985 U.S. Industrial Outlook, U.S. Department of Commerce,

International Trade Administration, p. 37-10.

13 Technological Change and Manpower Trends in Five Industries,

Bulletin 1856, Bureau of Labor Statistics, pp. 38-39.

30
In the missiles and space vehicles industry, available 

data14 suggest that productivity showed little or no increase between 1972 and 1982. During those years, 

shipments declined by slightly more than 1 percent annually while employee hours decreased at approximately 

the same rate.

Investment

Capital expenditures

Following the decline in the early 1970’s, real capital 

expenditures in the aircraft and parts industry increased 

very sharply.15 They reached a peak in 1980, at well over 

twice the 1970 level, then fell slightly in 1981 (latest 

available data).

The low level of expenditures during the early 

1970’s—lower than at any time since the late 1940’s— 

was largely due to the accumulation of substantial excess 

capacity during the Vietnam War buildup of the late 

1960’s and the recession in the early 1970’s. In contrast, 

investment was pushed upward by rising production levels 

and new aircraft programs during the late 1970’s.

In current dollars, aircraft industry capital expenditures were $1.6 billion in 1981, or nearly 5 times the 

dollar outlays in 1970. Investment is being largely directed 

toward modernizing existing facilities.

Capital expenditures per employee have been below 

the average for all manufacturing industries although the 

spread has narrowed in recent years. For the years 

1972-74, the level of capital expenditures per employee 

in the aircraft industry was less than one-third the average 

in all manufacturing industries; for the period 1979-81, 

it averaged one-quarter less.

In the guided missiles and space vehicles industry, real 

capital expenditures increased sharply in the late 1970’s 

after years of decline, and nearly doubled between 1978 

and 1981. Despite the recent sharp rise, the 1981 level was 

only slightly more than half the peak expenditures of 

1967. In current dollars, $369 million was spent in 1981.

The upward trend during the late 1970’s was associated 

with rising capacity utilization, the Nation’s military 

buildup, and expansion of the space program. Due to expected expansion of numerous weapons and space programs, continued rapid real increase in capital expenditures is likely.

Research and development

The aerospace industry has historically been a leader 

in research and development (r&d) spending. In 1982, for 

instance, outlays for r&d were $14.0 billion, more than

14 Bureau of the Census hours and deflated value of Census

shipments.

15 U.S. Department of Commerce, Bureau of Industrial Economics,

Office of Research, Analysis, and Statistics.

any other manufacturing industry and nearly one-fourth

the r&d expenditures of all industries.

Moreover, r&d funding as a percentage of net sales 

in aerospace is far higher than in most other industries, 

amounting to 18.3 percent in 1982, compared to only 3.7 

percent in all manufacturing industries. The level of expenditures increased modestly (in constant dollars) 

between 1970 and 1982.

The Federal Government contributes a large share of 

these expenditures. In 1982, Federal funds accounted for 

nearly three-fourths of total aerospace funds for r&d .

These Federal outlays were more than half of total 

Federal R&D expenditures.

A portion of Federal Government R&D outlays is used 

to fund programs designed to improve production 

methods in defense contractor plants. One program 

(Technology Modernization or TechMod) helps manufacturers pay for the implementation of new technologies 

in plants. A second major program (Manufacturing Technology or ManTech) is designed to develop productivityenhancing manufacturing technologies. At least onequarter of 1984 funding for ManTech was concerned with 

computer-aided manufacturing.16

Employment and Occupational Outlook

Employment

Employment in the aircraft and parts industry is 

characterized by sharp fluctuations associated with changing economic and political conditions (chart 9). It rose 

rapidly during the Vietnam War buildup, to a peak of

846,000 in 1968, then declined precipitously between 1968 

and 1972 as the war wound down and the economic 

climate deteriorated.

Between 1972 and 1974, aircraft employment rose 

slightly, only to fall again during the 1974-75 recession. 

The years 1977-80 were marked by rapid growth, as production reached record levels in the commercial and 

general aviation sectors.

Between 1980 and 1983, employment moved sharply 

downward, falling by 11 percent, to 578,000, almost 

one-third below its Vietnam-era peak. It rebounded 

slightly to 596,000 in 1984, with the increase in aircraft 

orders.

For the entire period 1970-84, employment in the aircraft and parts industry grew by 0.9 percent annually, 

triple the rate for durable goods manufacturing.

In the guided missiles and space vehicles industry, 

employment generally declined between 1972 and 

1977, then increased sharply in the late 1970’s and early 

1980’s.

BLS projects that, between 1984 and 1995, employ16 “ Employment, Education, and the Workplace,” Computerized

Manufacturing Automation, pp. 314-17.

31
800

700

600

500

400

300

200

100

0

800

700

600

500

400

300

200

100

0

9. Employment in aircraft and parts, 1970-84, and projections, 1984-95

•yees (thousands) Employees (thousc

Moderate „*#•***

......... ................................

...........................

Production workers

A verage annual percen t change1

A ll em ployees

1970-84........................................................ ... 0.9

1970-73..................................................... ...-7.4

1973-78..................................................... ...-1.1

1978-84..................................................... ... 0.6

1984-95 projection (moderate)2................. ... 1.1

P roduction workers

1970-84........................................................ ... 0.3

1970-73..................................................... ...-7.9

1973-78..................................................... ... - 2.1

1978-84..................................................... ... -1 .3

I___ I

1975 1980

I I I I 

1985 1990

^Least squares trends method for historical data, compound interest method for projections.

2See text footnote 17.

Source: Bureau of Labor Statistics.

32
ment in the aircraft industry will rise at an average 

annual rate of 1.1 percent, to 670,000,17 assuming 

moderate growth in the economy. This trend would 

bring employment back to exceed its 1970 level. The 

missiles and space vehicles industry is expected to increase at a more rapid rate of 2.2 percent annually, to 

196,000.18

Occupations

The use of technological innovations in the production process and the increasing sophistication of aircraft 

are contributing to a shift in the occupational composition of the aircraft and parts industry. New production methods are reducing requirements for a wide 

range of production workers (such as machine tool cutting and forming operators), while increasing the demand 

for highly educated and skilled professional and technical workers, such as electronic technicians, computer 

programmers, engineers, and other technically trained 

personnel. This is particularly true for CNC equipment, 

where computer programmers are replacing machine 

operators and machinists.

In both the aircraft and the missiles and space vehicles 

industries, the ratio of production workers to total 

employment is very low relative to other industries. For 

instance, in 1984, production workers accounted for 48 

percent of total employment in the aircraft industry, and 

33 percent in the missiles and space vehicles industry. By 

contrast, they accounted for 67 percent of total employment in all durable goods industries. The low proportion 

of production workers is associated with the increased 

sophistication of the technologies which require relatively 

more professional and technical personnel.

b l s occupational projections for the aircraft industry 

for 1995 suggest that these trends will continue, i.e., that 

the share of production worker employment will decline. 

Professional and technical workers, and managers and 

related workers are expected to increase. An employment 

gain of 25 percent is projected for engineers, who already 

accounted for almost one-seventh of total employment 

in 1984. Other occupations which are expected to grow 

rapidly are electrical and electronic technicians and computer programmers.

In the missiles and space vehicles industry, BLS projects that by 1995 the patterns of change will be similar 

to those in the aircraft industry. Engineering occupations, 

one-fourth of all jobs in 1984, will grow by about onethird from 1984 to 1995.

Adjustment of workers to technological change

Programs to protect employees from the adverse

17 bls projections for industry employment in 1995 are based on

three alternative versions of economic growth. For details on assumptions and methodology used to develop these projections, see the

Monthly Labor Review, November 1985.

18 Ibid.

effects of changes in machinery and methods of production may be incorporated into contracts, or they may be 

informal arrangements between labor and management. 

In general, such programs are more prevalent and detailed 

in industries which negotiate formal labor-management 

agreements. Contract provisions to assist workers in their 

adjustment to technological and associated changes may 

cover wage rates, job assignments, retraining, transfer 

rights, layoff procedures, and advance notice of changes 

planned by management, e.g., machine changes or plant 

closings. They may include various types of income 

maintenance programs, such as supplementary unemployment benefits or severance pay.

A large proportion of production workers employed 

by the major contractors in the aircraft and parts industry 

are represented by labor-management agreements. By 

contrast, many of the subcontractors and suppliers are 

not unionized. The major union is the International 

Association of Machinists and Aerospace Workers (i a m ).

Other unions representing smaller numbers of production workers include the United Auto Workers (u a w ),

the International Brotherhood of Electrical Workers 

(i b e w ), and the International Union of Electrical 

Workers (IUE). Professional and technical workers are 

represented at one large aircraft plant by the Seattle 

Professional Engineering Association. Most professional 

and technical workers unions are unaffiliated, local 

units.

While recognizing that it is to the “ mutual benefit of 

both the union and the company to utilize the most effective machines, processes, (and) methods,” one major 

union has been concerned with dislocation and has 

pushed for additional provisions to help ease worker adjustment to technological change. In negotiations concluded at a major aircraft plant in December 1983, this 

union won the right to advance notification of management plans to introduce new technology. According to 

the contract the company will, no less than annually, provide a briefing to the union of the company’s plans for 

the introduction of new technology and will identify its 

likely impact on job skills.19

In the event that jobs are eliminated due to technological change, some assistance, such as retraining, has 

been included in some negotiated contracts. For example, at one plant, a training program is being developed 

for current and laid-off employees to qualify them for 

employment in jobs involving new technology. Priority 

for training is to be given to laid-off workers with recall 

rights. At a second plant, a negotiated agreement includes 

a letter specifying that the company will establish a committee to deal with new technologies with the goal of 

assuring that employees who are directly laid off due to

19 Agreement Between The Boeing Company and International

Association o f Machinists and Aerospace Workers, 1983, p. 86.

33
the introduction of new machinery and equipment will 

be offered retraining in the event that equivalent job opportunities are not available elsewhere.20

Other major industry contracts provide for severance 

payments, supplementary unemployment benefits (SUB),

and seniority regulations governing layoff and recall in

the event of layoff although no direct reference is made 

to technology.

20 Agreement Between Lockheed-Georgia Company and International Association o f Machinists and Aerospace Workers, 1983,

pp. 196-97.

SELECTED REFERENCES

“ Advanced Composites: They Are Now Stronger and Cheaper,” Iron

Age, Oct. 3, 1983, pp. 69-73.

Aerospace Industries Association of America. Aerospace Facts and

Figures, 1983/84, July 1983, and 1984/85, September 1984.

“ Bargaining in Aerospace Comes Down to Earth,” Business Week,

Sept. 26, 1983, pp. 38-39.

Bluestone, Jordan, and Sullivan. Aircraft Industry Dynamics. An

Analysis o f Competition, Capital, and Labor. Auburn Press, 1981.

“ In cad/cam Usage, Aircraft Leads the Way,” Iron Age, Jan. 15,

1979, pp. 71-72.

“ In Search of Aircraft,” Iron Age, July 14, 1982, pp. 60-72.

“ Mantech Program Aims To Make Factory of Future a Reality in

Defense,” Industrial Engineer, February 1984, pp. 46-51.

Selected articles, Aviation Week & Space Technology, Aug. 2, 1982.

“ The 13th Annual Inventory of Metalworking Equipment, 1983,”

American Machinist, November 1983, pp. 113-44.

U.S. Congress, Office of Technology Assessment. Computerized

Manufacturing Automation: Employment, Education, and the

Workplace, April 1984.

34
Chapter 4. Commercial Banking

Summary

The commercial banking industry (SIC 602) has been 

expanding. Between 1970 and 1983, the volume of services and transactions in commercial banks increased, 

employment rose, and banks added branches to attract 

customers by making services more convenient.1

Advances in technology make it possible for banks to 

process the substantial increase in the volume of checks 

and other documents and to improve efficiency of 

employees in occupations ranging from managers to 

check processors. Most of the changes involve electronic 

computers, video terminal networks, electronic transfer 

of funds, and high-speed check sorting.

Output of commercial banks (as measured by the b l s

composite index of deposits, loans, and trust services) increased by an average annual rate of 4.7 percent between 

1970 and 1983. The rate of increase was uneven; the largest 

increase was in the early and middle years of this span, and 

between 1982 and 1983. Between 1978 and 1983, output increased at a significantly lower annual rate of 2.6 percent.

Productivity in commercial banking (output per 

employee hour) increased at an average annual rate of 

only 0.8 percent during 1970-83, as the rate of growth in 

employee hours—despite mechanization—nearly matched 

the rate of expansion in output. During 1978-83, the productivity record worsened as output per employee hour 

declined at an average annual rate of 0.4 percent when 

the rate of growth in employee hours exceeded the rate 

of expansion in output through 1981. The situation 

changed considerably in 1982-83, as output grew much 

more rapidly than employee hours.

Employment in commercial banks totaled 1.5 million 

in 1984; BLS projects a further rise to about 1.7 million 

employees in 1995. Between 1970 and 1984, employment 

increased at an average annual rate of 3.7 percent, and 

a somewhat slower growth rate is anticipated through the 

mid-1990’s. The structure of employment has changed— 

the proportion of nonsupervisory workers has declined 

as automation of bank operations has increased. Women 

accounted for a substantial and growing share of the work 

force in commercial banks, 72 percent in 1984.

1 The commercial banking industry covered by this bulletin is defined as Standard Industrial Classification (sic) 602, commercial and

stock savings banks. Included are banks and trust companies which

accept deposits for the public and extend credit through loans and

investments. Mutual savings banks are excluded.

Employment in most occupations is expected to increase through the mid-1990’s as demand for commercial banking continues to rise. Growth should be highest 

for managerial and some professional and technical 

workers, while growth for clerical workers—the largest 

group of employees in commercial banking—will be very 

small. Employment for bank tellers, about 23 percent of 

the industry work force in 1984, will increase only slightly 

by 1995 due to further automation of teller functions.

The banking industry makes extensive use of training 

programs for people entering the industry as well as for 

those who need further training to meet the demands of 

new jobs or changing technologies. Training programs 

include formal classwork, sometimes involving video 

training techniques, and on-the-job training.

Technology in the 1980’s

A number of technological changes are taking place in 

commercial banks which affect job skills and employment 

requirements. Advances in computer technology make 

possible a growing number of automated customer services and internal banking procedures. Networks of online 

video terminals allow bank tellers and managers quick 

access to customer records, and require tellers, bookkeepers, and managerial personnel to be familiar with 

computer systems and equipment. Also, demand is strong 

for computer specialists. Automatic teller machines and 

point-of-sale terminals reduce labor requirements for tellers 

and for those who proof and sort checks. Despite automation, however, processing bank checks remains labor intensive, as each check going through the banking system 

must be handled several times. High-speed check-sorting 

machines are available, but proofing and coding the checks 

prior to sorting continues to limit major productivity improvement. A description of major technological changes 

in commercial banking, their impact on labor, and prospects for further diffusion are presented in table 4.

Computerization of bank functions

The most important area of technological change involves a wide assortment of electronic data processing and 

electronic funds transfer operations that are based on applications of computer technology. The financial services 

industry, of which commercial banks are a major portion, is second only to the U.S. Government in the 

number of computers in use.

35
Table 4. Major technology changes in commercial banking

Technology Description Labor implications Diffusion

Computerization o f bank functions Computers and software packages are

used in clearinghouse debits, reconciliation o f customer accounts,

payroll deposits, depository transfer

of checks, balance reporting, and

some trust deposit accounting operations.

Bank managers need a knowledge of

computer operations. Tellers and

some other personnel must be trained to use online video terminals and

other computer peripheral equipment. Labor requirements in some

operations are lower. Demand for

programmers is growing.

In 1984, nearly all commercial banks had

some computerized operations, up

from 21 percent of all banks in 1965.

Online terminals and other teller

aids

Video screen computer terminals connected online to a bank’s central computer. Primarily used by bank tellers;

to a lesser extent by loan officers and

other bank personnel for access to

customer records. Some online terminals provide electronic journaling

capability which eliminates need for

tellers to make lengthy adding

machine tapes of daily transactions.

Tellers and others who work with

customers must be trained to use

video terminals. Customer transactions and accounting tasks can be accomplished more quickly. One bank

estimates that teller productivity increased by 20 percent after online

terminals were adopted.

Online terminals are being introduced in

larger banks, especially those with a

number o f branches. One large bank

has over 1,000 video terminals installed

in branches.

T eller-operated cash dispensing

machines provide cash in specified

amounts faster and more accurately

than tellers can do manually counting

the cash.

Electronic funds transfer (EFT)

systems

Automatic teller machines (ATM’s)

provide many of the services o f a

human bank teller. ATM’s usually

are located on exterior bank walls or

other places accessible to customers

during nonbanking hours. Customer

withdrawals, the primary ATM transaction, are made in cash, thereby

reducing the volume of checks processed by banks using ATM’s.

ATM’s reduce the rate of growth in

employment o f tellers.

The number of ATM’s has grown from

about 2,000 in 1973, to almost 60,000

in 1984. Experts foresee a further expansion in use of ATM’s over the next

decade.

In automated clearing houses (ACH),

debit and credit transactions between

banks are made electronically without

transfer of paper. Transaction time

and costs are decreased.

Impact of ACH operations cannot

be determined completely, but productivity in affected applications is

higher.

ACH transactions have grown from 50

million in 1976 to more than 557 million

in 1984, and further growth is expected.

Wire funds transfer systems provide

electronic transfer o f large dollar

transactions between banks for bank,

corporation, or U.S. Government

financial activities.

Probable decline in the number of

clerical employees needed to handled

these transactions.

Widely used in medium and large banks,

and in growing use in small banks.

Point-of-sale (POS) terminals provide

immediate charges to a person’s

checking account for purchases made

at retail outlets where POS terminals

have been installed, such as supermarkets and gasoline stations.

Point-of-sale terminals could reduce

labor requirements for tellers.

Point-of-sale terminals are in very limited

use, but installations are expected to

increase.

Check processing equipment Proofing and encoding machines print

the dollar amount of each check in

magnetic ink character recognition

(MICR) characters for machine

reading.

Demand for proofing and encoding

machine operators, an entry level job,

will probably increase only slowly as

check volume moves higher. Productivity of check sorters has risen

significantly as the speed of new

equipment has increased.

All banks use proofing and encoding

machines and checksorting machines.

Only the largest banks have the volume

to justify the larger and faster models.

High-speed sorting machines read

MICR characters and sort checks by

bank and individual account number

at speeds up to 100,000 checks per

hour.

Computer applications have grown rapidly in the 

banking industry. According to the American Bankers 

Association ( a b a ) , 97 percent of all banks had computerized operations in 1980 (most recent survey

available), up from 21 percent in 1965. The location of 

computer processing—onsite for the user bank, or 

offsite—also has changed over time. In 1965, only 6 percent of banks had onsite computers and 15 percent used

36
offsite computers.2 By 1980, 26 percent of all banks had 

onsite computer operations, while 71 percent used the 

computer facilities of correspondent banks or computer 

service bureaus. Looking ahead to 1990, an estimated 90 

percent of all banks will have onsite computer capacity, 

due in part to developments in microelectronics 

technology.3

As computer use has grown, expenditures for hardware, software, and salaries of computer staff have 

moved higher. Computer-related expenses have grown 

most rapidly for large banks (assets of $500 million and 

over) and accounted for about 9 percent of their operating 

expenses in 1980. This is not surprising since 75 percent 

of large banks were using onsite computers by 1980 (compared to only 23 percent of small banks and 45 percent 

of medium-sized banks). Many large banks also provide 

offsite computer services to smaller correspondent 

banks.4

A number of customer services have been computerized. Those mentioned most frequently in the a b a

survey include automated clearinghouse (ACH) debits 

(offered by 56 percent of banks), automated reconciliation of customer accounts (44 percent), automatic payroll 

deposit (39 percent), ACH credit origination and 

depository transfer of checks (32 percent), and automated 

reporting of account balances (25 percent).5 In large 

trust departments, most accounting operations are computerized, but only about one-third to one-half of other 

operations (securities management, tax preparation, stock 

transfers, etc.) are automated.

The economic benefits available from computerization 

are illustrated by a bank that installed equipment to 

automate the handling of a large commercial customer’s 

daily deposit. The deposit consisted of 16-19 bags of coins 

and currency which had to be counted twice for accuracy. 

Three tellers spent 5 hours every day processing the 

deposit. To automate the processing of this deposit, the 

bank installed a minicomputer, a coin sorter/counter, and 

a currency/document counter. With this equipment, the 

deposit is now made by one teller, working for 1 hour, 

assisted for one-half hour by a second teller. The savings that resulted paid for the new equipment in 10 

months.6

Online terminals and other teller aids

Online terminals for bank tellers and administrative 

personnel, teller-operated cash-dispensing machines at 

teller stations, and other electronically operated equipment have evolved from developments in computer and

2 National Operations/Automation Survey 1981, American Bankers

Association, 1981, p. 7.

3 William R. Synnott, “ Shock Talk: Prospects for the Next Round

of Technological Leverage,” ABA Banking Journal, May 1983, p. 45.

4 National Operations/Automation Survey 1981, p. 7.

5 Ibid., p. 15.

6 “Ten-Month Payback From Automating Big Deposits,” aba

Banking Journal, April 1982, p. 96.

electronics technology. This equipment improves productivity of bank personnel and increases services available 

to customers.

Online teller terminals. These video terminals are becoming more widely used because they increase productivity 

of bank tellers. The terminal networks are used primarily 

to respond to customer balance inquires and to post 

customer transactions. Tellers respond to requests for 

bank balances in a few seconds with online terminals, 

compared to several minutes by former methods. One 

bank estimates that productivity of tellers rose by 20 percent after an online teller terminal system was installed.7 

The video screens in modern terminal networks also can 

be used to relay messages to tellers concerning lost or 

stolen credit cards or checks, changes in foreign exchange 

rates, and related matters.

The first online terminals, introduced in the early 

1960’s in savings banks, were installed to speed up 

customer service at teller stations in branches of savings 

banks, and did not have video screens. Although commercial banks were slower to adopt online terminals, their 

interest increased following the tremendous growth in the 

number of commercial bank branches during the 1960’s 

and 1970’s. Moreover, the capabilities of online teller terminals improved significantly over this period. In 1974, 

the Bank of America installed terminals in more than

1,000 branches in California, and has expanded this network to include almost 10,000 terminals.8

Electronic journaling is another facet of online teller 

systems that contributes to increased teller efficiency. It 

eliminates the need for tellers to make lengthy adding 

machine tapes to validate all of the transactions that occur 

each day. Rather, the transactions are electronically 

entered, stored, and recalled. It is also possible for tellers 

to move from one teller station to another during peak 

work periods, as each teller has an individual identification code within the terminal system. One bank estimates 

that electronic journaling added a 4- to 5-percent productivity increase for tellers to the 20 percent already 

gained from faster response to customer balance inquiry 

and transactions posting.9

Teller-operated cash-dispensing machines. These 

machines, a fairly recent addition to teller stations, are 

boxes which contain currency (and sometimes travelers’ 

checks) in various denominations. Tellers use terminals 

or special keyboards to dispense cash more rapidly than 

by hand. These teller-operated machines keep track of 

the amount of cash dispensed, thus eliminating the need 

to recount the cash before giving it to customers—an additional productivity gain for tellers.

7 William Friis, “ Electronic Journaling Helps Truncate Paper in

Branches,” aba Banking Journal, January 1983, p. 82.

8 William Friis, “ A 20-Year Retrospective on Teller Terminals,”

aba Banking Journal, April 1982, p. 76.

9 Ibid.

37
Online administrative (or "platform”) terminals. These 

terminals are used by most banks that use online teller 

terminals. Platform terminals carry out a variety of functions for bank administrators—responding to customer 

inquiries, resolving problems with checking account 

reconciliations, changing names and addresses in 

customer files, displaying listings of overdrawn or inactive accounts, and other activities. Increasingly, online 

terminals are being used to evaluate loan applications or 

make investment recommendations. Online terminals improve the speed with which bank personnel can get access to customer records, which increases productivity and 

improves service for customers.

Electronic funds transfer systems

Electronic funds transfer (e f t ) procedures have gained 

importance as banks have sought more efficient methods 

to process a growing volume of transactions, primarily 

checks. An estimated 40 billion checks were processed in 

1984.10

eft systems rely heavily on computer and communication technology as indicated by the definition provided

below:

“ The common factor in these systems is that they 

speed the transfer of funds by communicating information relating to payments by electronic means 

rather than by use of paper instruments as is 

predominant today. Thus, e f t systems are designed to replace manual processes with electronic 

data processing and to speed the flow of funds 

through high speed data transmission.” 11 

The major technologies used to transfer funds electronically include automatic teller machines, automated 

clearing houses, wire funds transfer services, and pointof-sale terminals.

Automatic teller machines. The number of automatic 

teller machines (a t m ’s) and cash dispensing machines is 

expanding rapidly. There were an estimated 60,000 teller 

machines in use by 1984, up from 1,935 in 1973.12 Since 

these machines perform many routine functions of a bank 

teller, their widespread use has implications for tellers and 

operating procedures, and for bank customer services.

Teller machines activated by customer-inserted credit 

cards and “ debit” cards (plastic bank cards, each with 

a strip of magnetically coded information) were introduced in the United States in 1969. Cash dispensing 

machines (which account for about 1 percent of all teller 

machines) perform only the single function of dispensing cash. The more sophisticated a t m ’s (introduced in

10 Estimate provided by the Bank Administration Institute.

11 William C. Niblack, “ Development of Electronic Funds Transfer

Systems,” Federal Reserve Bank o f St. Louis Review, September 1976,

p. 10.

12 Linda Fenner Zimmer, “ atm’s 1983: A Critical Assessment,”

The Magazine o f Bank Administration, May 1984.

Customer carries out banking transactions on an automated teller

machine.

1971) perform a range of functions, which include dispensing cash, verifying account balances, transferring funds 

between accounts, and making payments of recurring 

bills. ATM’s reportedly can perform 90 percent of the 

transaction functions provided at a teller’s window.13 

Among the potential uses for ATM’s are dispensing 

travelers’ checks and money orders.

Despite mechanization, employment of bank tellers 

has grown over the years to handle the increasing volume 

of checks in the banking industry. Two industry surveys 

indicate that the growing use of ATM's will reduce the demand for tellers in the future. In one survey of 457 banking establishments, 44 percent of the respondents said that 

ATM’s either had already eliminated one or more human 

tellers or would reduce the need for additional tellers in 

the future.14

Another survey, covering 200 bank executives, focused 

on projected changes in the number of bank branches 

during 1983-88. About 19 percent of all fully staffed 

branches are expected to close during this period. Those 

branches that remain in service are expected to be staffed

13 “ Virginia ATM Pioneer Is Still Innovative,” ABA Banking

Journal, June 1982, p. 72.

14 Linda Fenner Zimmer, “ atm Installations Surge,” The Magazine

o f Bank Administration, May 1980, pp. 30-31.

38
by fewer employees, who will use automated equipment 

extensively. ATM’s were singled out as the most important factor in this change, according to 58 percent of the 

respondents. In-lobby a t m ’s and other customeroperated equipment are expected to reduce the number 

of tellers by 17 percent.15

One advantage of a t m ’s is that they reduce the volume 

of checks that enter into the bank’s operating systems— 

checks that must be sorted, processed, and in many instances returned to the customers. Reducing check 

volume is very important to banks. About a decade ago, 

the banking industry feared that its capacity to process 

checks would be overwhelmed by the rapidly growing 

volume of checks. However, faster, more sophisticated 

check processing and sorting equipment has been introduced which is capable of handling any foreseeable 

volume of checks adequately. Nonetheless, a huge volume 

of checks goes through the banking system each year, 

representing a considerable cost to the industry. New 

technology that can reduce this cost is welcome. The 

extent to which a t m ’s reduce the use of checks is uncertain, but they contribute to some decrease—possibly as 

much as 7 percent in 1983.16

Banks of all sizes use teller machines: A 1981 survey 

of over 800 banks reported that 14 percent of all small 

banks, over one-half of medium-sized banks, and roughly 

three-fourths of the large banks reported one or more 

ATM’s in use during 1980.17 Most teller machines were 

located on a bank’s own premises; about 90 percent in 

1979.18 Lobby locations proved unpopular—once inside 

the bank, customers apparently prefer to deal with a 

human teller. The most popular location is the outside 

wall of a bank building, where they provide 24-hour 

banking service to customers.

Acceptance of offsite a t m locations has been slower 

among both banks and customers—but this is changing, 

especially with the advent of a t m networks. As banks 

fulfill their needs for onsite ATM’s, they increasingly are 

being installed offsite in shopping centers, supermarkets, 

college campuses, hospitals, gas stations, and other locations convenient to the public.

Automated clearing houses. Automated clearing houses 

(ACH) carry out debit and credit transactions between 

parties electronically. With electronic methods, transactions are more rapid and less expensive than with paper 

checks.

When payment is made by conventional check, for example, the check is deposited in the receiving party’s bank

15 “ Survey Predicts 19% Fewer Branches by ‘88,” ABA Banking

Journal, August 1983, p. 108.

16 Linda Fenner Zimmer, The Status o f Retail Payment Systems in

the U.S., an address to the National atm Conference, Dec. 10, 1984,

p. 8.

17 National Operations/Automation Survey 1981, p. 15.

18 Linda Fenner Zimmer, “ atm Installations Surge,” p. 30.

and then, unless both parties have accounts in the same 

bank, is sent to the payer’s bank—often through another 

bank or a clearing house designed to handle such transactions. The estimated 40 billion checks that go through 

the financial system each year require considerable time 

and labor to process.

When payment is made using ACH, the process differs 

markedly. With ACH, debit and credit items are electronic 

signals, usually encoded on reels of computer-generated 

magnetic tape. The tape contains the amount of various 

payments; the names, bank numbers, and account 

numbers of those receiving payments; and the names of 

the parties making payments. It is this information that 

is transmitted—not individual pieces of paper.

Automated clearing house operations have been increasing in importance. The U.S. Government first made 

extensive use of the system in the early 1970’s for U.S. 

Treasury disbursement of Social Security payments, 

Federal Government payrolls and benefits, and other 

items. Local, private, automated clearing houses were 

organized; and in 1976, a national ACH association was 

formed. In 1976, 50 million ACH transactions took place, 

92 percent of which originated with the U.S. Treasury. 

The process has grown rapidly, especially for private 

banking; of the 556.6 million transactions reported in 

1984, private banking accounted for 61 percent.19

The impact of ACH upon labor requirements is difficult to determine precisely, since ACH uses the same 

computer equipment that banks use for other electronic 

data processing and fund transfer operations. Thus, 

banks involved in ACH operations must allocate some 

computer staff time to handling a c h data. As ACH operations grow, there may well be an increase in demand for 

computer personnel.

Wire funds transfer services, e f t systems have been 

developed to handle large dollar transactions between 

banks. The Federal Reserve Board operates the largest 

system — FedWire — which is used for large volume 

interbank payments, such as the sale of reserve account 

balances between banks and the transfer of large bank 

and corporate balances. FedWire is also used to transfer 

U.S. Treasury and Federal agency securities. FedWire 

handled 38 million fund transfers with a value of $84 

trillion, and 5.5 million security transfers valued at $35 

trillion, in 1983.

There are two other large wire funds transfer systems: 

The Clearing House Interbank Payments Systems (CHIPS)

is operated by the New York City Clearing House 

Association, and handles most of the international 

payments in the United States. In 1983, c h i p s processed 

19 million transactions valued at $57 trillion. The Payment and Telecommunications Service Corporation

19 Data provided by National Automated Clearinghouse Association.

39
(Bankwire and Cash Wire) serves a network of about 180 

member banks, providing funds transfers similar to FedWire, but at a slightly lower cost. Bankwire processed 

1.8 million transactions, for a value of about $8 trillion, 

in 1983.

Use of wire funds transfers is growing and may well 

reduce the need for clerical workers. Prior to the use of 

EFT technology, fund transfers were made in a series of 

separate, nonautomated clerical operations. Individual 

clerks would receive orders, verify accounts, and make 

transactions. Using e f t technology, one clerk can take 

an order by phone, enter the order in a CRT terminal, and 

the computerized accounting systems handle the rest of 

the operation. Industry experts believe that the number 

of clerical people has already declined somewhat, and will 

decline further—but there are no solid statistical data on 

clerical employment in this area at present.

Point-of-sale terminals. Establishing point-of-sale (POS)

networks requires cooperation between banks and retail 

merchants. The merchants install computer-controlled 

electronic checkout terminals that accept the debit cards 

banks issue to their customers for automated teller 

machines, or sometimes just for use in the POS terminals. 

When customers make a purchase, they insert their debit 

card into the merchant’s checkout terminal, push the 

proper buttons on the terminal and in seconds, the 

customer’s bank account is debited for the amount of the 

purchase and the store’s account is credited for the 

amount of the sale. The merchant’s checkout terminal 

is linked to the bank’s computer system. If merchant and 

customer use different banks, a central switching and 

processing center handles transactions between the two 

banks.

POS terminals reduce labor requirements of tellers. 

When a merchant is paid by check, bank personnel have 

to process that check. However, when the transaction is 

carried out using a debit card and a POS terminal, manual 

processing is eliminated.

Several POS terminal systems are in use around the 

United States. These are all local systems involving 

primarily supermarkets and gasoline stations.

Point-of-sale systems probably will continue to grow, 

although the rate of growth is uncertain. Banks have the 

computer and electronic capability, but retail merchants 

have been relunctant to invest in electronic equipment. 

Also consumers have resisted using debit cards, which require that terminals be manipulated and personal identification numbers be used, and which cause consumer 

bank accounts to be debited immediately. (By one 

estimate, for example, only 30 percent of eligible bank 

customers use a t m ’s, the first step toward participation 

in various electronic funds transactions).20

20 Bill Streeter, “ EFT Is Back. This Time It May Stay,” ABA Banking Journal, September 1983, p. 135.

Processing bank checks

Despite substantial investment in new technology, 

processing checks remains labor intensive. Tellers typically receive checks first, as part of customer deposits, 

and send them to the proofing and encoding area in commercial banks in bundles, usually accompanied by adding 

machine tapes showing totals for each bundle of checks.

Proofing and encoding operations are the most laborintensive portions of check handling. Proofing machine 

operators read the dollar amount of each check, use a 

keyboard to enter these numbers into the proofing 

machine, then insert the check into a slot in the proofing 

machine, which prints (encodes) the dollar amount onto 

the check in magnetic ink character recognition (MICR)

characters. Once the value of the check has been encoded 

on the MICR line, along with the bank and individual account numbers, the check can be processed by machine. 

Proofing and encoding checks will remain labor intensive, 

since significant improvements in equipment are not anticipated over the next few years.

Doing proofing and encoding is an entry level job. 

Training is on the job and turnover is high. Output is 

dependent upon operator skill and motivation, but an 

operator typically handles between 1,300 and 2,000 checks 

an hour.

After checks are encoded, they are sorted for return 

to bank customers. High-speed sorting equipment reads 

the m ic r lines on checks. Commercial banks with more 

advanced equipment can electronically record the m ic r

data on tape, photocopy both sides of each check, and 

sort the checks by a number of criteria—at a speed of 

up to 100,000 checks an hour. Machines with this capacity 

have been available since the mid-1970’s.

Sorting machine operators must meet higher skill requirements than proofing and coding machine operators. 

Training involves some classwork as well as on-the-job 

training. People who succeed at this job often have the 

potential to become computer operators. There is more 

physical activity, less boredom, and lower turnover 

associated with sorting machine work than with proofing and coding operations.

Output and Productivity

Output

The BLS output index for commercial banks is based on 

three major banking activities: Demand deposit transactions; lending for commercial, consumer, and real estate 

purposes; and activities related to trusts and estates.21

21 In aggregating these three measures to obtain an output index,

the labor requirement per unit of each of the major categories of service in a base period was used to combine dissimilar activities. For additional information on the methodology of constructing the output index and a more detailed account of trends in output in commercial banking, see Horst Brand and John Duke, “ Productivity in Commercial

Banking: Computers Spur the Advance,” Monthly Labor Review,

December 1982, pp. 19-27.

40
Output of commercial banks increased by an average 

annual rate of 4.7 percent between 1970 and 1983.22 

However, the rate of increase slowed significantly within 

this period: During 1970-73, for example, output increased at a high average annual rate of 8.7 percent, 

slowed to an annual rate of 5.4 percent for the middle 

period 1973-78, and to a lower 2.6-percent annual rate 

during 1978-83. Between 1970 and 1983, output gains 

were achieved in 11 of 13 years; declines were recorded 

only in 1974 and 1980 (chart 10).

Demand and time deposits grew steadily between 1970 

and 1980, dropping slightly in 1981, then growing through 

1983. Strong growth in demand deposits, especially during the late 1960’s and early 1970’s, spurred the development of e f t and other new technologies. Expansion of 

financial transactions, such as stock transfers and commodity futures contracts, have increased the number of 

fund transfers that go through the banking system. 

Growth in time deposits held by commercial banks has 

been even more rapid than in demand deposits.

The volume of bank loans is strongly affected by the 

general level of economic activity. Between 1970 and 

1981, the overall loan index declined in 1974, 1975, 1979, 

and 1980—and rose in the other years. Commercial and 

credit card loans grew fairly steadily from 1972 through 

1979, declined in 1980, and increased slightly each year 

through 1983. Consumer loans declined from 1978 

through 1980, then increased through 1983. Real estate 

loans, sensitive to mortgage interest rates, dropped 

sharply between 1978 and 1980, but rose again in 1981, 

and grew strongly in 1982 and 1983.

Trust services have been the most stable portion of 

commercial banking output, following a generally upward pattern, but leveling out in 1983. Increases in the 

number of employee benefit accounts and pension plans 

have contributed to expanded trust services.

Productivity

Productivity in commercial banking rose only slightly 

during 1970-83—a period of expansion in bank facilities 

and services. Over these years, the b l s index of output 

per employee hour increased at an average annual rate 

of only 0.8 percent. Although output of commercial 

banks rose at a more robust annual rate of 4.7 percent 

over this period as the economy moved to higher levels, 

the productivity gain was slight because employee hours 

also rose at a relatively brisk annual rate of 3.9 percent. 

Employee hours gained sharply, despite substantial investment by banks for computers, ATM’s, and the other 

technologies that lower labor requirements of tellers and 

other bank staff. In 1982 and 1983, however, output increased sharply—by 4.5 percent in 1982 and 9.6 percent 

in 1983. In contrast, employee hours rose only slightly 

(1.6 percent) in 1982 and fell (0.6 percent) in 1983.

22 Latest year available for bls output and productivity measures

in commercial banking.

Technology is only one factor that determines productivity change in commercial banks. Changes in complexity of banking tasks, in the skill of the work force, and 

in the location of facilities and organization of work also 

can be important factors that influence productivity 

change. For example, the rapid spread of bank branches 

over this period is considered by some experts to have 

slowed productivity growth because more labor and other 

inputs were required per unit of output at these locations, 

compared to the main offices. Also, commercial banks 

offer a number of new and more complex services, and 

most industry people believe that employment would have 

grown even more rapidly if the new, laborsaving equipment had not become available.

The productivity record in commercial banks varied 

considerably from year to year with economic conditions. 

In each of the recession years of 1974 and 1980, for example, productivity declined by over 6 percent when 

output fell off as demand for commercial banking 

services slowed and employee hours continued to move 

higher, by 6.3 and 4.4 percent, respectively. In contrast, 

productivity gains well above average occurred in years 

with peak demand for banking services, such as 1973, 

1976, 1977, and 1983, when output per employee hour 

increased by more than 5 percent from the preceding year.

The growth in bank branch offices, a major change 

in industry structure, has had an impact on productivity 

and employment. The number of commercial bank offices (main offices and branch offices) grew from 35,585 

in 1970 to 55,960 in 1983—an increase of 57 percent. The 

number of commercial banks grew by less than 10 percent. But the number of branches rose rapidly—from 

21,880 in 1970 to 40,913 in 1983—an increase of 87 

percent.23

Commercial banks began expanding their branches to 

attract new deposits — often from competing banks. The 

proportion of banks with branches increased from 29 percent in 1970 to 47 percent of all commercial banks in 1983.

The growth in branch offices has increased banking 

employment because each branch requires at least a small 

staff. But this may have had a negative impact on productivity: Industry observers are in agreement that 

economies of scale have declined as a result of the growth 

in branches. A branch banking system requires more 

employee hours per unit of output than does a larger, 

centralized bank.24

Employment and Occupational Trends

Employment

Employment in commercial banks rose steadily over 

the past decade as demand for a growing array of banking services increased (chart 11). In 1984, commercial

23 Federal Deposit Insurance Corporation (fdic) data.

24 “ Productivity in Commercial Banking,” pp. 19 and 25.

41
Chart 10. Output per employee hour and related data, commercial banking, 1970-83

(Index, 1977 = 100)

Source: Bureau of Labor Statistics.

Ratio

scale

130 

■ 120 

110 

100 

90

■ 80 

70

60

■ 50

130

■ 120 

■ 110 

■ 100

■ 90

■ 80

- 70

- 60

- 50

-] 130

- 120 

- 110 

- 100

- 90

- 80

- 70

- 60

- 50

42
Chart 11. Employment in commercial banking, 1970-84, and projections, 1984-95

Employees (thousands) Employees (thousands)

1,800

1,600

1,400

1,200

1,000

800

0

1 Least squares trends method for historical data, compound interest method for projections.

2See footnote 25 in text.

3Data for nonsupervisory workers are not available for years prior to 1972.

Source: Bureau of Labor Statistics.

banks employed 1,520,000 workers—570,800 more than 

in 1970. The average annual growth rate over this period 

was 3.7 percent. The outlook through 1995 is for employment in commercial banks to move slightly higher, at a 

much lower rate of growth. According to the moderate 

BLS projection, employment in commercial banks may 

total about 1.7 million in 1995, an annual growth rate 

of 0.9 percent.25

The composition of employment in commercial bank25 bls projections for industry employment in 1995 are based on

three alternative versions of economic growth. For details on assumptions and methodology used to develop these projections, see Monthly

Labor Review, November 1985.

ing has changed over the past decade. The number of 

nonsupervisory workers grew from 823,300 in 197226 to 

apeak of 1,126,200 in 1981, then fell to 1,119,800 in 1984. 

Much of this decline is attributed to the increased use of 

computers, terminals, and EFT operations. In 1972, nonsupervisory workers accounted for 80 percent of the work 

force; by 1984, however, they constituted slightly less than 

74 percent of employment. The proportion of nonsupervisory workers will probably continue to decline, but the 

number of people employed is expected to increase until 

1995, as demand for banking services continues to rise.

26 Data on employment of nonsupervisory workers are not available

for years prior to 1972.

43
Commercial banks are a major employer of women, 

who staff about 7 out of every 10 positions. In 1984, the 

number of women in the industry totaled 1,092,100, compared to 659,400 in 1972.27 Moreover, women make up 

a steadily larger share of the industry work force, 

accounting for almost 72 percent of employment in 1984, 

compared to 64 percent in 1972.

Occupations

Very little change is expected in the occupational structure of commercial banking by 1995. BLS occupational 

projections indicate that employment in most occupations 

is expected to grow, even though the rate of growth for 

some occupations will be below the industry average so 

that they will be less important by 1995 than they are now.

Managerial occupations, along with a number of 

related professional and technical occupations, should 

grow more rapidly than the industry average. Managers 

are expected to grow by more than 22 percent. All 

computer-related occupations also are expected to increase sharply: Systems analysts and programmers by 38 

percent; and computer and peripheral equipment 

operators by 23 percent. But all of the computer-related 

jobs will account for only 3 percent of banking employment in 1995—up only slightly over their share in 1984.

There are a number of different clerical occupations 

in commercial banking. Combined, they constitute the 

largest occupational group in the industry. While the 

number of people in clerical occupations is expected to 

increase by 1995, they will account for a smaller portion 

of industry employment than at present. Clerks involved 

with financial records processing should grow by about 

8 percent. Information clerks (new accounts, general information, travellers’ check issuance, etc.) will grow a 

little faster, maintaining their present share of employment. The number of file clerks is expected to decline 

slightly over the period. Growing use of electronic data 

processing in commercial banks is probably the major 

reason that employment in clerical operations is not expected to keep up with growth in other occupations.

Bank tellers, one of several clerical occupations, are 

the largest single occupation in commerical banking (accounting for almost 23 percent of total employment). 

Employment for tellers is expected to grow by 1995, but 

by less than 3 percent as the banking industry makes 

greater use of automated bank branches and automatic 

teller machines.

Adjustment of workers to technological change

As new technologies are used more extensively over

27 Data on employment of women are not available for years prior

to 1972.

the coming decade, commercial banks are expected to 

continue their longstanding commitment to employee 

training. Both new employees and those presently 

employed will need training to use new equipment and 

procedures. Layoffs and other possible adverse effects 

of new technology are not expected, and employment in 

all major occupational groups is expected to rise.

Training programs in the banking industry vary from 

informal on-the-job training for entry level positions to 

academic programs at colleges, universities, and the 

American Institute of Banking. Most training related to 

the introduction of new technology is handled by programs within each bank. These training programs typically involve classroom work and on-the-job training. 

Role playing is often used for positions that involve 

meeting customers—such as tellers and loan officers. 

Video training programs have been developed to assist 

in classroom training for a range of positions. Prepackaged video training programs are available, or banks can 

use the equipment to develop their own programs. 

Regional networks of banks have pooled their resources 

and established central libraries of training tapes covering a number of jobs and situations.

New banking technology has had a significant impact 

on bank tellers, the largest occupation in the industry. 

Banks have long had training programs for new tellers. 

Teller training programs typically extend from 2 to 4 

weeks, and involve a combination of classroom work (including video training programs), role playing, and observation of actual banking operations. The introduction of 

new equipment, such as online video terminal networks, 

has modified training programs for new tellers and 

necessitated some retraining for tellers already at work. 

In response to the growth in a t m use, some banks are 

redefining teller duties, anticipating that tellers will spend 

less time taking deposits and cashing checks and will 

spend more time informing customers of various banking services, helping them decide which services are most 

useful, and directing them to the proper bank staff personnel for further information.

Relatively few employees in commercial banks are 

affiliated with unions; consequently, the extent and type 

of training and other work force adjustments are rarely 

spelled out in formal collective bargaining contracts. Data 

on union membership in commercial banks are not 

available. However, in the broader financial industry 

which involves all banking, credit agencies, and security 

and commodity services, less than 3 percent of all wage 

and salary workers were represented by labor organizations in 1980.28

28 Earnings and Other Characteristics o f Organized Workers, May

1980. Bureau of Labor Statistics, Bulletin 2105, September 1981,

pp. 15, 17.

44
SELECTED REFERENCES

Brand, Horst and John Duke. “ Productivity in Commercial Banking: Computers Spur the Advance,” M onthly L a b o r Review ,

December 1982, pp. 19-27.

Fenner Zimmer, Linda, “ atm Installations Surge,” The M agazine o f

Bank A dm inistration, May 1980, pp. 29-33.

Fenner Zimmer, Linda, “ atm’s 1983: A Critical Assessment,” The

M agazine o f B ank A dm inistration, May 1984.

Fenner Zimmer, Linda. The Status o f R etail P aym ents System s in the

U .S., address to The National atm Conference, Dec. 10, 1984.

Friis, William. “ A 20-Year Retrospective on Teller Terminals,” a b a

Banking Journal, April 1982, pp. 71 and following.

Friis, William. “ Electronic Journaling Helps Truncate Paper in

Branches,” a b a Banking Journal, January 1983, pp. 82 and

following.

N ational O perations /A u to m a tio n Survey 1981, American Banking

Association, 1981, 142 pp.

Niblack, William C. “ Development of Electronic Funds Transfer

Systems,” Federal R eserve Bank o f St. L ouis R eview , September

1976, pp. 10-13, 16-18.

“ Roundtable of Experts Ponders Payment Systems of the Future,”

a b a Banking Journal, September 1981, pp. 48 and following.

Streeter, Bill, “ eft Is Back. This Time It May Stay,” a b a Banking

Journal, September 1983, pp. 130 and following.

“ Survey Predicts 19% Fewer Branches by ‘88,” a b a Banking Journal,

August 1983, pp. 108, 110.

Synnott, William R. “ Shock Talk: Prospects for the Next Round of

Technological L everage,” a b a Banking Journal, May 1983, pp. 45

and following.

“ Ten-Month Payback From Automating Big Deposits,” a b a Banking

Journal, April 1982, p. 96.

U.S. Department of Labor, Bureau of Labor Statistics. Earnings and

O ther Characteristics o f Organized L abor, M ay 1980, Bulletin 2105,

September 1981.

“ Virginia atm Pioneer Is Still Innovative,” a b a Banking Journal, June

1982, p. 72.

45
Other BLS Publications

on Technological Change

Bulletins still in print may be purchased from the 

Superintendent of Documents, Washington, D.C. 20402, 

or from the Bureau of Labor Statistics, Publications Sales 

Center, P.O. Box 2145, Chicago, 111. 60690. Out-of-print 

publications are available at many public and school 

libraries and at Government depository libraries. Publications marked with an asterisk (*) also are available on 

microfiche and in paper copy from the National Technical 

Information Service, U.S. Department of Commerce, 

5285 Port Royal Road, Springfield, Va. 22161.

The Impact o f Technology on Labor in Four Industries

(Bulletin 2228, 1985), 49 pp. Price $2.25.

Appraises major technological changes emerging in 

textiles, paper and paperboard, steel, and motor vehicles, 

and discusses their current and potential impact on productivity, employment, and occupations.

Technological Change and Its Labor Impact in Four Industries (Bulletin 2182, 1984), 44 pp. Price $2.

Appraises major technological changes emerging in 

hosiery, folding paperboard boxes, metal cans, and laundry and cleaning, and discusses their current and potential impact on productivity, employment, and 

occupations.

The Impact o f Technology on Labor in Five Industries

(Bulletin 2137, 1982), 60 pp. Price $5.

Appraises major technological changes emerging in 

printing and publishing, water transportation, copper ore 

mining, fabricated structural metal, and intercity trucking, and discusses their current and potential impact on 

productivity, employment, and occupations.

Technology and Labor in Four Industries* (Bulletin 2104, 

1982), 46 pp. Out of print.

Appraises major technological changes emerging in 

meat products, foundries, metalworking machinery, and 

electrical and electronic equipment and discusses their

current and potential impact on productivity, employment, and occupations.

Technology, Productivity, and Labor in the Bituminous

Coal Industry, 1950-79* (Bulletin 2072, 1981), 69 pp. Out 

of print.

Chartbook with tables and text; appraises some of the 

major structural and technological changes in the 

bituminous coal industry and their impact on labor.

Technology and Labor in Five Industries* (Bulletin 2033, 

1979), 50 pp. Out of print.

Appraises major technological changes emerging in 

bakery products, concrete, air transportation, telephone 

communication, and insurance, and discusses their current and potential impact on productivity, employment, 

and occupations.

Technological Change and Its Labor Impact in Five

Energy Industries* (Bulletin 2005, 1979), 64 pp. Out of 

print.

Appraises major technological changes emerging in 

coal mining, oil and gas extraction, petroleum refining, 

petroleum pipeline transportation, and electric and gas 

utilities, and discusses their current and potential impact 

on productivity, employment, and occupations.

Technological Change and Its Labor Impact in Five

Industries* (Bulletin 1961, 1977), 56 pp. Out of print.

Appraises major technological changes emerging in apparel, footwear, motor vehicles, railroads, and retail 

trade, and discusses their current and potential impact 

on productivity, employment, and occupations.

Technological Change and Manpower Trends in Five

Industries* (Bulletin 1856, 1975), 58 pp. Out of print.

Appraises major technological changes emerging in 

pulp and paper, hydraulic cement, steel, aircraft and 

missiles, and wholesale trade, and discusses their current 

and potential impact on productivity, employment, and 

occupations.

irU.S. GOVERNMENT PRINTING OFFICE: 1986 — 491-543/54341

46
Bureau of Labor Statistics

Regional Offices

Region I

John F. Kennedy Federal Building 

Government Center 

Boston, Mass. 02203 

Phone: (617) 223-6761

Region II

Suite 3400 

1515 Broadway 

New York, N Y. 10036 

Phone: (212) 944-3121

Region III

3535 Market Street 

P.0 Box 13309 

Philadelphia, Pa. 19101 

Phone: (215) 596-1154

Region IV

1371 Peachtree Street, N.E. 

Atlanta, Ga. 30367 

Phone: (404) 347-4418

Region V

9th Floor

Federal Office Building 

230 S. Dearborn Street 

Chicago, III. 60604 

Phone: (312) 353-1880

Region VI

Federal Building 

525 Griffin St., Rm. 221 

Dallas, Tex. 75202 

Phone: (214) 767-6971

Regions VII and VIII

911 Walnut Street 

Kansas City, Mo. 64106 

Phone: (816) 374-2481

Regions IX and X

450 Golden Gate Avenue 

Box 36017

San Francisco, Calif. 94102 

Phone: (415) 556-4678