Bracing for an Economic Nose-Dive : Firm Was Key in Rise of S.D.’s Middle Class

General Dynamics is the quintessential example of the defense industry: secretive and cyclical, raising regional economies to new heights, only to plunge them downward when the military machine slows.

Notwithstanding its mercurial history, San Diego’s premier heavy-manufacturing company played a critical role in San Diego’s postwar growth, said Mary Scott, author of “San Diego: Air Capital of the West” and a research associate at the San Diego Aerospace Museum.

The company spawned Cubic Corp., Cohu and General Atomics. Just as important, it provided a welcome market for hundreds of smaller suppliers.

Convair gave San Diegans a chance to enter the middle class. The aerospace industry also gave blacks and Latinos their first crack at better-paying jobs, Scott said.

“Most people (in San Diego) really didn’t have much of anything” before Reuben H. Fleet opened his Consolidated Aircraft Co. in 1935, Scott said. But, with World War II approaching, Consolidated, which later merged with Vultee Aircraft to form Convair, soon had 44,000 employees.

“Convair truly did bring the middle class to San Diego,” said UC San Diego Professor Steven Erie. “These were well-paying jobs, the middle rung in the economic ladder . . . and, for a lot of poor people, this was the way into homeownership.”

After the war, General Dynamics’ high-paying hourly jobs “provided the social cement (in San Diego) for the middle class,” said Harley Shaiken, a UCSD professor and expert on the workplace. “These were the jobs that people aspired to and counted on.”

Still, Convair’s current problems are reminiscent of the company’s problems during the early 1960s.

General Dynamics Convair Division was flying high in 1961, with a record 47,000 San Diegans at work on aircraft and ballistic missile programs. But, within months, the bottom had fallen out. By 1963, local employment had tumbled to 26,000, beginning a slide that continued until the mid-1970s, when General Dynamics had fewer than 7,000 local employees.

General Dynamics had all sorts of problems.

Convair’s 880 and 990 model commercial jets were technologically sound, but sales were dwarfed by market leaders Boeing and Douglas Aircraft Co.’s 707s and DC-8s, recalled H. Cushman Dow, Convair’s San Diego-based legal counsel from 1961 to 1989.

Convair also was reeling from the loss of key Defense Department contracts.

The Air Force had stopped purchasing Convair’s F-102 and F-106 delta-winged fighter aircraft. General Dynamics had decided that future military aircraft--including the F-16--would be built at its Ft. Worth plant.

Convair also found itself with a vast but underused plant in Kearny Mesa, which was built to house production lines for the Atlas missiles that were part of the nation’s intercontinental ballistic missile program. Later, the missiles were used to carry Mercury space capsules and U.S. astronauts into space.

During the 1960s, General Dynamics also shifted some missile production capacity to Pomona.

And, adding insult to injury, General Dynamics transferred Convair’s West Coast headquarters function to New York from San Diego, stripping the division of whatever independence it had retained since being acquired by General Dynamics in 1954.

That move “made a difference . . . (because), in the final analysis, any of the big decisions would be made from New York,” Dow said.

Opinions vary on what caused General Dynamics’ tough times during the 1960s.

“We had the technology coming out of our ears,” said William F. Chana, who held a number of management positions at General Dynamics from 1941 to 1973. “We had the first delta-winged fighter, the first vertical-takeoff plane, the first supersonic seaplane. Convair, in its time, had technology equal to anybody in the industry.”

Unfortunately, other companies had equally capable fighters, the vertical-takeoff plane was ahead of its time and no one wanted a supersonic seaplane.

“Maybe the failure was at the top of the company,” Scott suggested. “They seemed to keep ending up with the wrong kind of airplane for the wrong time.”

Both Chana and Dow believe that Convair might still be a force in commercial aviation had it let Boeing and Douglas fight over the four-engine commercial jet market and instead had concentrated on building a twin-engine jet.

It took a long time, but the Convair Division, “having gone down in the ‘60s, clawed its way back up in the ‘70s,” Dow said.

Over the years, Convair fashioned a role as a generous, but nearly invisible, corporate citizen. Incredibly, only one executive from the division--long the county’s largest private employer--has ever served as president of the San Diego Greater San Diego Chamber of Commerce.

For that matter, Dow, who was chairman of the chamber in 1980, also was the only General Dynamics executive to lead the local Rotary Club, the Navy League and several other civic and business organizations.

“I think that was in keeping with the general company philosophy,” said Dow, who retired from General Dynamics in 1989. “We contributed funds and some people, but there weren’t a lot of (General Dynamics) people in high-visibility (volunteer) jobs.”

In fact, when Michael C. Keel, vice president of General Dynamics’ missiles and electronics division, spoke at a Chamber of Commerce function here earlier this year, he created a sensation in the business community, not so much for anything he said but by the mere fact that he spoke publicly at length and in some detail about General Dynamics.

Keel “said more during that meeting than any General Dynamics representative in 17 years,” chamber President Lee Grissom later said.