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It required no negotiation. It is clear one party was wrong. Why could that not have been accomplished without bothering you?

Mr. SIMKIN. The one I refer to is not an open and shut matter. Mr. JONAS. I am not now concerned with the real disputed cases but those which have no basis for dispute. You call up a man, tell him he wrong, and he calls off his strike. That is the type of case to which

is

I refer.

Mr. MOORE. By design these missile bases are rather remote. At times in the past you may find the local craftsmen of two opposing groups getting into a feud over certain work where the international people have certain commitments which provide for the resolution. The international man cannot be on all of these complex pads at one time.

In the past, too frequently, a local walkout would occur and it might be several days before the international man would get around to knowing about it, having it called to his attention, and taking constructive action.

There are voluntary means that the parties have agreed to for settling many of these. Often it happens that the international orders the people back to work and then with the mediator arranges for whatever process is necessary to resolve the case. The people agree to continue working while the dispute is disposed of.

In the past they have said they would stay out. Now we are able to get them to continue work and take it up in an orderly manner.

OFFICE EQUIPMENT

Mr. JONAS. Where are you going to get this new equipment, $2,500 worth of furniture?

Mr. EADY. Office equipment for the new men who are employed, desks and chairs.

Mr. JONAS. Who will use the replacements? I thought you were hiring these men to replace people you had sent to the missile sites. Mr. EADY. This is equipment for the new men.

Mr. MOORE. In all but two cases the men will retain their offices in the present spot and service the missile sites from their offices. At only two places do we expect the mediators will be officed at the site. Mr. JONAS. They will stay where they are?

Mr. SIMKIN. Yes. Mr. McClellan at Great Falls maintains his office there but he spends his time at two bases. He still maintains the office and does some other mediation work.

Mr. JONAS. He is merely assigned the new work?

Mr. SIMKIN. That is right. The missile site gets priority. He has

to take care of that regardless.

Then if we assign a second man to pick up his regular work he also will have to be provided with office facilities.

Mr. JONAS. Where do you expect to get this furniture?

Mr. EADY. Through GSA.

Mr. JONAS. Will you accept reconditioned furniture?

Mr. EADY. We have accepted it previously.

Mr. JONAS. Is this a firm estimate on what the furniture will cost? Is it an estimate on rebuilt or on new furniture?

Mr. EADY. I believe it includes both. It depends on the cost as to whether reconditioned furniture is better. It depends on the transportation and other things.

NEED FOR ADDITIONAL PERSONNEL

Mr. JENSEN. Here we have an agency which has done and is doing a good job with their present personnel. I have always hesitated having more personnel for an agency which has done and is doing a good job. I am always fearful that by adding personnel, such as is being requested here, you might hire someone who will throw a monkey wrench into the machinery and hinder your fine work.

I have on occasions very strenuously objected to adding personnel to agencies which were doing a good job, as you folks are doing.

I wonder if it would not be possible for you folks to continue doing your good job with the personnel you have without taking a chance of getting persons into your organization who might not understand their business? These people will be given responsibilities to go out and mediate and you will find that they have not done a good job and it thereby reflects on your fine work.

I am telling you frankly that I hesitate to give you additional personnel just for that reason.

Mr. SIMKIN. I think your concern is certainly a proper concern. We would feel the same way.

There are two considerations: First, we do an extremely careful job of screening our new men. The entire staff has spent a great deal of time. We have just taken on 10 new men this last month.

For each applicant we hire we perhaps get a total of 20, 25, or 30 applications. They are carefully screened, and I would say that this group we have hired, and the new group we are contemplating, is a superior group of men. They are extremely well qualified, and I think they will stack up as equal or better to the experienced men on our staff. I have been very much impressed by them.

Mr. JENSEN. But you know you are taking a chance. You know you have good men now. You know that when you add other personnel you are taking a chance of getting some poor men, men who will not do the job as your regular force is doing.

Mr. MOORE. We always have to hire new men. The attrition rate by retirement, death, resignation, runs 10 or 12 a year.

You should understand that we have in effect a 1-year probationary period. I believe we do the most intensive job of field indoctrination of any agency in existence. We take them under close observation. We do not permit them actually to mediate for a substantial period of time. We require them to work under and with seasoned mediators, under the regional directors.

Then before we consider them as mediators we bring them back into Washington. We get a full résumé of everything they have done. We spend another full week with them here reviewing everything they have done and everything that has happened for that year in the field before we even make the determination of whether we will keep them on the staff.

Through this type of supervision, by working with and under the older mediators, first it insulates us against the damage you speak of. We do not give them the opportunity to hurt us if they are inept.

It also trains them and gives us a final look to be sure they are competent before we add them to the regular staff. We are fully conscious of the problem you mention but we have to hire these people to maintain our present staff.

Now there is another problem I know Congress is always interested in: If you give us more staff we will always want to hold onto them. I think our service, for the record, has an excellent reputation in this area. Between 1955 and 2 years ago we voluntarily dropped our staff from about 235 down to 200. We found that the workload did not require it. We started in then and as our workload increased we have lagged. At the present time I say to you in all honesty we are placing a terrific burden on our staff. We have had heart attacks right and left. Both of our mediators in Memphis, Tenn., are in trouble with heart conditions. There is a limit to how far we can press these people. Now we have had to pull the "cream" of our staff off for this missile operation. It is too critical to the national defense to give the problem anything less than the best.

By way of illustration we have had eight men sent out to the west coast at our per diem expense simply to handle the bare minimum of regular workload that had to be handled. They have a Teamster strike threatening San Francisco today, the Bay area, the Western 11 States Teamsters contract. There is a lot of industry bargaining. You can do nothing other than provide proper mediation or you are going to have a wave of other economic strikes that will have as much impact as the missile strikes. We have to cover these things and at whatever cost, but there is a limit to how far we can press our staff. This is a critical problem, critical to our missiles, critical to our performing our function of maintaining economic peace

QUESTION AS TO NEED FOR ESTIMATE REQUESTED

Mr. THOMAS. We do not want to curtail your program. We understand we are in the process of spending anywhere from $3 billion to $5 billion on national defense more than we have spent in years gone by, and we understand you are going to have a tremendous workload. An ounce of prevention is not worth a pound, but a ton of cure. what Mr. Jensen is saying to you is, "Be careful. Do not overstaff. We want to cooperate with you."

So

We notice this budget is based on an annual basis and you will do well to get your staff in training on a 9 months' basis. Can you get along here with $145,000 or $150,000?

Mr. MOORE. I do not know how to answer you, sir, we get by with whatever

Mr. THOMAS. This is a 9 months' budget and you will have 9 out of the 12 months.

Mr. MOORE. This has been anticipated in a cost item.

Mr. THOMAS. No, you have not anticipated it. It is based on a 12 months' basis as some of your other elements are.

Mr. EADY. July 24 was the commencement date for this estimate. Mr. THOMAS. Look at your salaries. On the schedule it is on a 12 months' basis. If I am wrong, point it out.

Of course, you cannot buy your furniture-if you buy it in one month it is good, we hope, for years.

Mr. MOORE. As our Administrator says, he has to price this out in order to answer you firmly.

As an offset to the full 12 months' period, as he mentioned on the details we have called to your attention, we have had to send out to the west coast extra people and it has taken money, and we have already spent part of that. This is what we have to do in the way of offsetting if we do not get the appropriation.

Mr. THOMAS. You will get into a little trouble there if you get money for specific purposes and spend it for something else.

Mr. MOORE. We have to take care of the missiles.

Mr. THOMAS. Look at your green sheets and if I am in error, straighten me out. It is based on a 12 months' basis.

Mr. JONAS. It isn't for missiles. You have already taken care of them. This is for replacements in your regular establishment so do not wave the missile flag too much here. You are asking for these 16 people to go in your regular establishment. Not in the missile situation.

Mr. MOORE. Actually, sir, it is not quite as simple as that to ask because

Mr. JONAS. Well, you already have the people out at the missile bases.

Mr. MOORE. The question is how much time can we for instance, I mentioned Bob McClelland in Great Falls and we have mentioned this same thing in other places.

As it now stands if an important dispute arises in that area that he would normally handle What do we do; do we tell him, "Cease giving priorities to the missiles regardless of what happens and handle that?" Do we try to send someone in on per diem and travel to handle that dispute? It is not too simple.

Mr. THOMAS. We know you need some people and we are going to do right by you.

Mr. Jonas and Mr. Jensen have submitted the point that your budget is on an annual basis and you will do well to consume 9 months .of it.

Mr. JONAS. Mr. Chairman, may I make one other comment?
Mr. THOMAS. Yes.

Mr. JONAS. Did I not read a statement by Secretary Goldberg at some missile base the other day that the missile problem was settled now and everything was moving along swimmingly and we were having no troubles? Did you read that? I saw his picture, making a speech at a missile site.

Mr. SIMKIN. I was with Mr. Goldberg on this trip. It is very true, as we have indicated earlier, we have gotten a very good start on this missile program but the problem is by no means over. We have many headaches ahead and I do not think we can say that because we are ahead at the end of the first inning that we can let up on this. I think we have a terrific job to do for several years ahead.

Mr. JONAS. Well, I agree with you. My own idea is that Senator McClellan's hearings did about as much as anything else to bring the situation under control. If we could have some more of these

hearings I think it would help too.

Mr. THOMAS. Are there any further questions?

We thank you sincerely for coming over. You have been very helpful to us.

Mr. SIMKIN. We will be glad to submit the additional information you requested.

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Mr. THOMAS. Be sure to put in the record a breakdown of your 359 present employees between the District of Columbia and by number in the 7 regional offices.

Mr. MOORE. You want to know within the region where they are stationed or just in the region? For instance, in region 1, New York

Mr. THOMAS. If you can refer to them in the regions, that is satisfactory. We just want home base.

Thank you very much, gentlemen. We have been very delighted to have you with us. Come and see us again.

TUESDAY, AUGUST 8, 1961.

DEPARTMENT OF THE NAVY

SHIPBUILDING AND CONVERSION, NAVY

WITNESSES

REAR ADM. F. B. SCHULTZ, USN, ASSISTANT CHIEF, BUREAU OF SHIPS

REAR ADM. L. P. RAMAGE, USN, ASSISTANT CHIEF OF NAVAL OPERATIONS (FLEET OPERATIONS AND READINESS)

CAPT. L. B. MAYER, USN, HEAD, CARRIER BRANCH, BUREAU OF SHIPS

E. T. EWAN, ASSISTANT COMPTROLLER, BUREAU OF SHIPS

J. F. COVE, ASSISTANT COMPTROLLER FOR SHIPBUILDING AND CONVERSION, BUREAU OF SHIPS

REAR ADM. M. A. HIRSCH, USN, ASSISTANT COMPTROLLER, DIRECTOR OF BUDGET AND REPORTS

COMDR. H. B. McCLURE, USN, CHIEF STAFF OFFICER

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