851.248/184: Telegram

The Secretary of State to the Ambassador in France ( Bullitt )

290. Your No. 788, April 20, 11 a.m. On April 20, the Assistant Secretary of War had a conference with Knudsen of General Motors and Kreusser, President of Allison. He urged the necessity for the immediate expansion of the Allison plant in order that it may produce as soon as possible the 400 engines ordered plus the 800 which the War Department definitely proposes to order as soon as the necessary monies are appropriated. Knudsen agreed to recommend to the Board of General Motors that expenditure be authorized sufficient to step up production on a two-shift basis to eight per day. It seems almost certain that this recommendation will be approved. If so, the expansion will be begun immediately, and production will be stepped up as rapidly as possible with a view to the delivery of 1200 engines to this Government before December 1, 1940.

The possibility that the French might place an order for Allison engines was discussed at the conference. Knudsen was, however, unwilling to take that possibility into consideration in connection with the plans for expansion which must be initiated immediately in order to meet the urgent needs of the War Department. He felt that, from a business point of view, he could not authorize expenditure for further expansion based upon the possibility of additional orders which might never be placed or might be placed only after long delay.

The War Department believes that, if the French really intend to order Allison engines in quantity, it is to their interest to do so immediately in order that their order may be taken into consideration in connection with the expansion of the plant. Should the French place an order now, the War Department would recommend a conference of representatives of both governments and the manufacturer with a view to possible modification of the arrangements entered into with Knudsen. The War Department would be prepared to consider French needs sympathetically and to attempt to arrive at some agreement satisfactory to all concerned. The rate at which the production of the plant could be stepped up would depend somewhat upon the number of engines ordered before the details of expansion were planned. It is possible, but not probable, that the company might be able to improve upon the schedule reported in the Department’s No. 275 of April 18, 5 p.m.