Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-11-24
Aircraft Orders
Indicate Fresh
Profit Gains
$50, 900. 900 Output
A Month Predicted
By Turn of Year
Special Dispat ch TO The Star.

Special Dispatch to The Star.
NEW YORK, Nov. 23.-Aircrafl
output is steadily rising and deliv-
cries, now averaging at least $751;
900 900 monthly, will probably reach
$50 900, 900 a month or better by the
turn of the year, according to sur
vey published by the Standard Sta
tstics Co.
The industry's order backlog is
over $500 900 900 at present; a ST.
900 ,000, 900 program to construct H.
900 bombers and orders for 10000
additional planes from the British
are pending. The rising trend of
shipments should continue for some
time and should produce earnings
substantially better than those cur
rently, even in the face of the heavy
tax burden.
The vast aircraft production pro-
| gram now is passing from its pre-
liminary into the development stage.
Ordering for the initial broad pro-
gram designed to bring this country's
Army and Navy air forces to a total
of IS, 600 planes by mid-1942 has now
been largely completed.
Early in October the Army let the
last of the contracts to complete the
second of its two programs calling
for a total of 1854 planes. The
status of the Nays purchases is less
definite, but it is believed that orders
or commitments have been placed
for most of the 1000 planes author
lied.
Supplemental Programs Started.
The development of supplemental
programs is now beginning. Dis
cussions already are well under way
on a program to construct $4,000
bombers at a cost of approximately
81, 600, 00O, 900. including plant and
tools. The program may be enlarged
by an additional 5000 planes. Con-
gtess will probably be asked for the
necessary appropriations in the near
future. To accelerate production it
is planned to have fuselages and
tail and wing assemblies fabricated
by the automobile and other in
dustries: the aircraft companies
would assemble the parts in theii
own plants or in new Government
financed plants to be constructed
probably on a fixed-fee basis.
In addition, it is expected that
Great Britain soon will be granted
permission to negotiate for another
10000 planes. Placement of these
orders would virtually double the
already huge amount of foreign
business on hand. The new plant
facilities to be required for this ad-
ditional business may be financed
by British capital.
Including foreign orders Of well
ever 81 1000 ,000, 900, the industry's
backlog Of orders for planes. engines
and parts currently is estimated to
be over $500, 000, 10000. The huge
additional amount of business in
prospect indicates that even this
figure will be far below the peak
which proably will not be seen for
another year or so, at least.
Deliveries Mounting.
To accommodate the tremendous
volumes, further extensive plant ex-
pansion is being undertaken. 1t is
estimated that contracts totaling
| over 1925 900 900 for new plant and
equipment have been let within the
past month or so. to supplement
the large sums previously authorized
| for such purposes.
Additional large amounts will be
so expended to effectuate the bomb
er program, and more If British
financed plants are undertaken.
Many of the new plants now being
constructed, particularly the engine
plants, will not be in production I'M
til late 1941. of course. 1t will prob
ably be mid-1942 before the industry
attains the planned production of
5000 planes month.
Meanwhile, the completion Of
plant expansion undertaken at an
earlier date is enabling the industry
to step up its output steadily Deliv-
cries of planes, engines, and parts
are now averaging around SIS ,000,-
900 month, as compared with $45,-
DOC 900 three months ago and $780,
600 900 monthly in the early part
of 1910. The increase in shipments
will be accelerated in coming
months as additional facilities be-
come available, and deliveries may
be up to $50, 000, 900 month or bet
ter by the beginning OF 1941.
Exports still account for at least
half of the total output. The drop
in September exports to $22 ,940, 900
from $37 $3.50 600 in August is not re-
garded as any fundamental change
in trend. On the contrary, exports
will probably reach levels comfort
ably ahead of the August total in
the months to come.
Profis Outlook Good.
Although the earnings outlook for
aircraft makers is beset with many
uncertainties, the prospective sharp
increases in deliveries assure extern
sion of the uptrend recently begun.
1t is not unlikely. of course, that
profit margins on domestic military
business will be relatively narrow
for some time.
Contract prices theoretically allow
for the sharp increases in amortiza-
ton charges, as well as the costs OF
training new workmen and of the
large amount of overtime work to
be necessary.
Nevertheless, because plants and
working forces have been, and will
continue to be, expanded rapidly,
there will undoubtedly be many I'M
usual expenses and ineficiencies to
keep costs high until production has
reached and held for time the in
creased pace scheduled.
On the other hand, profit margins
on foreign deliveries promise to
continue liberal; initial production
difficulties on such business have
long since been passed. This bust