851.248/309a: Telegram

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

1558. Your no. 3019, December 21, 6 p.m. The Department after careful study and consultation with experts of the War Department has ascertained that:

The American airplane industry is in a position to increase its output considerably and with little delay if engines can be obtained. The airplane companies are turning down orders because of the shortage of engines. This shortage is due in large part to the fact that the French have placed orders with American engine manufacturers for such a number of engines to be shipped to France for installation in planes to be constructed in France that, although the three manufacturers of engines for military airplanes are appreciably expanding their plants, the output of engines will not be sufficient until 1941 to [Page 527] supply engines to be installed in American built planes beyond the number now on order. The French and British Governments have together ordered 5,500 engines for installation on planes to be built abroad. If the French would permit American engine manufacturers to deliver a large proportion of their output in 1940 to American plane manufacturers, the latter could accept orders for a large number of additional planes for the French Government. Such an arrangement would enable American plane manufacturers to increase their output of planes for the French to the extent of an additional 2,000 to 3,000 planes during the next 12 months.
Vast and practically unlimited additional productive capacity of complete airplanes in this country could be created if present airplane plants were moderately expanded but such expanded plants could not attain production to capacity until after the elapse of from 10 to 14 months after orders justifying such expansion were placed. Such expansion would, of course, have to be financed by the governments placing the orders. The controlling factor in airplane expansion in this country is engine production. If foreign governments desire to obtain vast numbers of planes with deliveries beginning a year from now, they will have to finance further expansion of the plants of the three principal engine manufacturers.
The French, British, Canadian and Australian Governments now have 2,223 planes on order, undelivered, in this country. These orders are placed, however, with six companies only. At least 11 other American companies could construct satisfactory military planes. Obviously, it is essential that the French and British first arrive at an agreement between themselves as to a program of purchases. The Anglo-French Purchasing Commission could then work out the problems involved in increased purchases with the Army and Navy Munitions Board. That Board is prepared to give the Commission all assistance consistent with the neutrality of this Government and officers of the Board have, informally, expressed the opinion that arrangements for substantial increase in deliveries during 1940 could be worked out if representatives of the Purchasing Commission could sit down and discuss the details with officers of the Board and with representatives of the airplane manufacturers and the engine manufacturers. If, as would appear, the French Government does not have attached to the Purchasing Commission officers competent to deal satisfactorily with such problems, it would seem that that defect can be easily remedied by the French Government. If the French wish to obtain additional planes in this country in the very near future and vast numbers of planes to be delivered in 1941 and thereafter, there should be no further delay in the placing of orders.
It is true that the problem of machine-tool production referred to in your telegram under acknowledgment must be considered in connection with any vast expansion of the American airplane industry. If the output of the industry is to be greatly expanded during the year 1941 the problem of machine-tool production would immediately arise.