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It is a matter of some surprise to old-line, pre-Depression financiers that Douglas Aircraft Co., managed by these draughtsmen and joystick-wielders, has made money. It has always made money. For the last fiscal year the company reported a record profit of $1,081,513, and in the first quarter of this year deliveries rose approximately 100% and profits rose $169,420 (to $406,771) over those of the first quarter of 1937. In the last fiscal year Douglas Aircraft delivered 303 planes of 13 types, 194 to the Air Corps and Navy (so far his most dependable customers), 107 to commercial lines, two abroad. This year deliveries are going faster, and the factory is turning out better than one plane a day. Last year the company could afford to pay its president a salary of $43,433. Shooting experimental arrows like DC-4, whose cost ($1,634,612) will not be made up until about 50 DC-4s, are sold, is the reason why Douglas Aircraft does not make even more money than it does.
"It Takes 'Umph' Labor costs Douglas Aircraft 43% of its outlay on every plane. In headaches the toll is far greater. Labor among the 7,197 Douglas workers has resulted in two serious strikes, one at Santa Monica in February 1937, one at the Northrop Division of Douglas near Inglewood, Calif., last September. After the Northrop deadlock broke, strikers were rehired only if they agreed to sign a contract promising never again to strike, damage property, sabotage planes.
Since the strikes, Donald Douglas has showered his men with paternal pamphlets, generously peppered with platitudes and quotation marks. Typical example: "YOUR JOB AND MINE. A heart to heart talk with the boss. It takes 'umph' to be in this business. . . . We have to 'know our stuff.' . . . Efficiency calls for harmony, and harmony needs understanding. ... If you have a suggestion or complaint, don't keep it 'on ice' or let it 'burn you up.' Tell me all about it in your own words."
But neither this paternalism or slight wage increases and bonuses have cleared the corporate head. Month ago NLRB found Douglas guilty of violating the Wagner Act in the Santa Monica strike, ordered reinstatement of 45 workers, with back pay. Last week, after a Douglas appeal for rehearing had been denied by the 9th Circuit Court of Appeals in San Francisco, NLRB itself reopened the case. Meanwhile, Douglas' Santa Monica workers had umph enough to put finishing touches to DC-4. Now it is up to Carl Cover and the ship itself. If DC-4 is UP to the Douglas snuff—and providing enough passengers are eventually enticed by its numerous charms into flying, so that its operation will prove financially worth while—it will trace a high, rising curve not only for Douglas Aircraft but for all U. S. commercial aviation.
* Approximate cost of a DC-4 will be $447,000.