WORLD WAR II BOOM
From the very beginning, D. W. Onan did not have
ambitions to develop his business into a giant operation. It wasn't that he had
a grand scheme to grow to about 100 employees in one modern, spacious plant and
then stay that size. Onan's long-range
game plan was much more vague. He wanted
a business that was small enough so he could walk around the plant and greet
any of his workers by name, know their problems and goals and chat with them as
a friend. He wanted a business big
enough to provide him and his family a comfortable living but small enough so
that he and his sons. Bud and Bob, could run all aspects of it.
There were times during the formative years of the
1920s and especially during the depression years of the 1930s when some of
Onan's suppliers, his financial backers and even some employees wondered if the
company would even survive. But D. W.
Onan himself was always supremely confident the business would succeed, and
even though he was impatient occasionally about the early growth, he never doubted
that eventually he would have the size company he wanted.
The year 1940 probably came closest the Onan’s idea
of the perfect- sized business. The Onan
Company produced 3,540 generator sets that year, it had about 100 employees,
and total revenues were $855,846.
The next year the U.S. entered World War II and the
desperate needs of the military for dependable portable electric plants took
top priority, and D. W. Onan completely lost control of his plans for orderly
During the next five years, Onan was manufacturing
as many as 70,000 generator sets annually, had as many as 2,500 employees in
five different plants in the Twin Cities, was sub-contracting work to 82 other
companies with 5,500 workers, and had annual sales as high as $50 million. From the beginning of 1942 through the middle
of 1945 all of the Onan company's production went to the U.S. military and its
The Onan Company wasn't alone in the abrupt switch
from peacetime operations to frantic military production. Manufacturing companies throughout the
country that could possibly handle items needed for the war went through the
trauma, and Minnesota firms especially were affected. U.S. military officials were concerned that
locations on both the East and West Coasts would be vulnerable to enemy bomber
attacks, and they chose sites in interior states whenever possible for defense
production. Minnesota was an ideal
state, located far away from both coasts, and it had hundreds of efficient
plants that could convert their facilities to making wartime goods.
Even in November 1941, the month before the U.S.
officially declared war on Japan and Germany, Minnesota companies were awarded
$346 million in defense contracts.
Military production by firms in this state totaled billions of dollars
before the war ended.
Minneapolis-based Honeywell, for example, produced
aircraft controls and, later, even bombsights.
General Mills, Pillsbury, Green Giant, Geo A. Hormel and other Minnesota
food companies, switched to making products for the growing allied military
force around the world. The 3M Co. in
St. Paul manufactured a variety of military goods. Minneapolis Moline and the St. Paul branch of
International Harvester converted from farm equipment to producers of
armaments, and the Ford Motor Co. assembly plant in St. Paul built military
There were seven large shipbuilding yards
constructed in Duluth, and the Cargill Co. built Navy tankers at facilities
near Savage. Military officials even had
a government-owned arsenal in the state, the Twin City Ordnance Plant at New
Brighton, which produced ammunition 24 hours a day, seven days a week.
Most of the manufacturing facilities that switched
to wartime production didn't experience the rapid expansion that the Onan
company had, but a few had even more dramatic growth. The Northern Pump Co. in Minneapolis, for
instance, was a small firm with 50 employees making fire engine pumps in
1940. Before World War II ended.
Northern Pump, whose name was by then Northern Ordnance Co., was in a $20
million plant in Fridley with 15,000 workers, manufacturing gun mounts and
related equipment and machinery for the U.S. Navy on an around—the-clock
basis. It was the Navy's largest
ordnance producer and early in the war it was the country's largest defense
plant that had started from scratch.
One of the reasons the Onan company experienced
such tremendous growth during the war was the fact it became involved in
military production more than two years before the Japanese attacked Pearl
Harbor on Dec. 7, 1941.
Onan's first major military customer was Great
Britain, starting in 1939. Unable to
find dependable portable power plants either in their own country or in Europe,
the British turned to Onan for hundreds of small A.C. generator sets for military
radio transmitters and other communications operations. The British also needed a special direct
current generator for charging batteries. The British military had high praise
for the equipment purchased from Onan, especially because of its trouble-free
operation and its durability. The word was passed on to U.S. military
authorities, who were making plans for a quick buildup of defense equipment in
the very likely event America would get involved in the war.
The first orders from the U.S. military came in
late 1940 and early 1941, and even though the Onan reputation was well known,
some very stringent testing was required before any units could be shipped.
In January 1941, the Onan company received an order
from the U.S. Army for 400 small generator sets, provided that a prototype of
the set could pass a 1,000 hour endurance test.
The test ended in the middle of the night and the government inspector
was due at the Onan plant the next morning.
An anxious group of Onan workers, including D.W. Onan, carefully checked
out the tested equipment, but not knowing the requirements, they could only
hope it passed.
One of -the concerned workers said, "I just
don't believe this unit is pulling what it should after 1,000 hours. I'm sure the government is going to expect it
to have more power. Let's grind the
valves and get it in better shape." D. W. Onan cut him short: "Not on
your life. The government can cancel the
contract if it isn't satisfied, but we're not going to cheat."
When the government inspector arrived in the
morning, he checked the tested unit and then suggested they grind the
valves. When that was accomplished, he
said he was more than satisfied, and
that if grinding the valves was all the maintenance it needed after 1,000 hours
there was nothing to worry about.
D. W. Onan's honesty had paid off once again.
With the U.S. military orders coming in on top of
the British demand, plus the civilian business, things were beginning to get
hectic at the Onan plant. In January
1941, Onan produced 269 units with 147 employees, but the volume increased each
month during the year climaxing with December business that saw 1,011 generator
sets manufactured. The Onan company now
had a crew of 324 workers.
Onan sales in 1941 totaled $2.9 million compared to
less than a million dollars the year before, but the real growth was yet to
come. Revenues in 1942 jumped to $14 million.
They reached $32.5 million the following year and approached $50 million
As men and machines were added at the Royalston
plant, conditions became so crowded it was difficult to find an aisle to walk
down. More space was desperately needed,
and there simply wasn't time to construct a new building large enough to handle
all production. In the first two years of the war, as production increased each
week, D. W. Onan expanded the Royalston plant as much as possible, and then
leased four other buildings in Minneapolis.
These included one that had been used by the
Caterpillar Tractor Co. as a manufacturing plant. The U.S. government condemned the facility on
the grounds it was being used for civilian production and made the building
available to Onan on a lease basis in the summer of 1941. The plant, located at 2515 University Avenue
Southeast, was purchased by Onan in 1944.
Other buildings leased by Onan during the war years
included the Highland plant across the alley from the original Royalston
facility, the Arrowhead plant at Stinson Boulevard and Broadway Street
Northeast, and the Madison plant on Madison Avenue Southeast. With all five
plants, Onan had manufacturing floor space equal to six city blocks, but it
still wasn't enough to handle all the government orders pouring in. Much of the engine production that Onan
couldn't handle was sub-contracted to the Continental Motor Co. in Muskegon,
One of the major headaches throughout the war years
was the great variety of equipment needed by the various branches of the
military. Onan produced 65 different
models of generators and 40 types of internal combustion engines to drive the
generators. There were 41 separate
branches of the armed forces ordering generator sets from Onan, ranging from
350-watt to 35,000-watt units. Many of the parts going into the generator sets
were made by more than 80 subcontractors for Onan.
Space to assemble the generator sets wasn't the
only problem. Scarce equipment was
needed, and there wasn't time to wait for it to be built. In the first several
months of the war, the Onan Company bought more than 700 pieces of used
equipment and machine tools and converted them for its use. More than 200 new
pieces of equipment also were purchased as they became available.
Onan generator sets were used in literally hundreds
of different applications by the military, including those used for lights for
surgeons in field hospitals, for X-ray machines, for mobile telephones and
radio communication, for mess halls, weather bureaus and to operate electrical
equipment on large guns, radar equipment and PT boats. More than half of all
the portable electric plants used by the allied forces during World War II were
produced by Onan.
Onan quickly established a reputation with the
military as a resourceful and imaginative company, qualities the government
badly needed as it raced from one crisis to another. In the early days of the war, military
officials promised D. W. Onan he would not have to worry about getting critical
supplies, the necessary plants, manpower or financing, because war production
took top priority and the U.S. government would see that Onan had everything it
needed. Unfortunately, it didn't work out that way. Other than condemning the Caterpillar plant
near the University of Minnesota for Onan's use, the government rarely was
effective in getting things accomplished in time for Onan to meet its tight
schedules. Part of the reason was the impatient attitude of the people at Onan.
While waiting for government action, they usually went ahead on their own and
did what was necessary. This so
impressed the military that they more and more tossed tough problems to Onan,
knowing that somehow they would get solved.
A good example was the assignment the Navy
originally gave to Westinghouse, but the task was solved only after Onan
stepped into the picture. Early in the war, the U.S. Navy needed a way to keep
track of what the Japanese were doing on the Pacific Islands they had
captured. The Navy asked Westinghouse to
make some portable, waterproof radio transmitters that could be dropped from
destroyers into the ocean near these islands.
U.S. spies on the islands would then pick up the radios, using small
boats, smuggle them ashore and set up secret surveillance stations. They then could report Japanese activities on
the islands to the U.S.
Westinghouse had no problem designing the
lightweight aluminum radios, and it tried to build a small electric plant to
power the radios but gave up in frustration.
The Navy told Westinghouse to go to Onan for help. Jim Hoiby, chief
engineer at Onan, recalls, "Westinghouse came to us for a lightweight
800-cycle generator set. We adapted the
OTC engine—our first two-cylinder opposed engine—and built it out of
aluminum. But we had never even seen an
800-cycle generator and none was available commercially. The Navy used them on
some of its aircraft, but we couldn't get clearance to study them. I learned that a Navy plane with this type
generator was at the Navy airbase in the Twin Cities, and although I couldn't
get authorization from officials there to let me inspect it, some Navy friends
smuggled him on the base and I went to the plane like I owned it, studied the
generator and left with no one the wiser.
Then I went to the University and gleaned some design information from a
professional paper I found on high-speed inductor-alternators."
So, from his surreptitious visit to the airbase and
the information obtained from an academic paper, Hoiby and his men were able to
design and build a dependable 800-cycle generator set, and the Westinghouse project was a success.
It seemed that every time Onan solved a tough problem for the military, it gave
them reason to hand Onan even a tougher problem. Jack McFail, manager of Experimental
Department at Onan during the war, says, "The military kept us plenty
busy, all right. They wanted maximum
life and minimum service. They pushed us to extend the time that our units
could run before they needed oil added or changed. Every quart of oil had to be shipped in, so
it was always in short supply. When we'd
lengthened the time our sets could run without service from 100 hours to 200
hours, they wanted 400. When we gave
them 400, they wanted 800.
One of the big bottlenecks during the war was
getting the necessary parts from suppliers to keep production flowing. It was especially hard to get enough magnetos
and governors for the generator sets in the early months of the war. Jim Hoiby
remembers the Onan production manager came storming into his office and said
they just couldn't meet delivery schedules with those items short all the
time. Hoiby paced up and down for a few
minutes, and then said, "All right, we just have to build our own magnetos
and governors." He called a few of
his engineers together, told them the problem and within a few weeks, Onan was
manufacturing its own magnetos and governors in the quantities needed to keep
production on schedule.
Rings and cylinders also were in short supply most
of the time, but it was just impossible for Onan to manufacture every part that
was needed for assembly. Whenever
possible an outside supplier was used, even if Onan had to set one up in
business. Paul Millerbernd, a blacksmith at Winsted, Minnesota, a small town
west of the Twin Cities, came into the Onan plant one day early in the war and
said his small business had been cut off from its steel supply and there was
nothing for him to do. The people at
Onan handed him a generator frame ring and asked, "Could you make this if
we supplied the steel and the machines to do it?" Millerbernd took the ring back to his shop, worked all
night, and came back the next day with one he had made. It was perfect. Millerbernd didn't have the
equipment to mass produce the rings, however, so he and D. W. Onan made a trip
to Chicago where they found a used piece of equipment that would do the job. Millerbernd also didn't have the $10,000 the
machine cost, so Onan bought the machine and let Millerbernd pay for it over
the next few months as he received payment for the rings he supplied.
Finding enough manpower during the war also was a
major problem for the Onan company. It
was not only necessary to hire enough people to keep pace with the growing
number of orders, but hundreds of Onan workers were called to military service.
Prior to the war, all the production workers at
Onan were men, and the first woman wasn’t hired until after the war
started. She was Mrs. Harold Paukert,
who replaced her husband on the Onan assembly line when he went into the U.S.
Army. His job, and then hers, was
winding armatures, only her more nimble fingers did a much faster job. In fact, during the war, women were able to
increase production by 50 percent in many of the tedious assembly jobs at the
plant. Eventually, women made up about
20 percent of the work force at Onan, and they since have always played an
important part in the success of the company. [ But not in the production shop.
During the 1920s and 1930s, the Onan company was
constantly in financial trouble, and the war corrected that to an extent, but
the tremendous growth didn't make the company or the Onan family as wealthy as
you might expect. D.W. Onan, who didn't,
or couldn't, use the banks for financing during the depression years, was a
regular (and favored) customer during World War II. His backlog of military orders was all the
collateral needed to get any loan he wanted.
But the government made certain that no business
would find it easy to get overly rich out of the war effort. Excess profit taxes by the federal government
claimed nearly all earnings over a modest amount, and even top executives were
limited to what they could earn. President Franklin Roosevelt ordered early in
the war a flat limit of $25,000 a year in salary for any executive in the U.S.
to make certain no one would benefit too much from the crisis facing the
country. Extraordinarily high personal
income taxes also made it difficult for an individual to keep more than a
In many ways, however, World War II was a boon to
the Onan Company. It gave it valuable expertise in generator technology, it
spread the Onan reputation to millions of additional people throughout the
world, it allowed the company to amass equipment and plants it could use after
the war, it opened up financial relations with banks, and it put the company in
the soundest condition it had been in since it was founded.
But the war produced many negative results,
too. D.W. Onan was forced to run a
company many times larger than he ever wanted, and even though he and his sons.
Bud and Bob, and their top managers had to work long, hard hours seven days a
week, they benefited only modestly in a financial sense. Also, there was a
constant, gnawing concern on the part of the Onans that when the war ended, and
all military production was abruptly halted, the company would face a serious
crisis — one that easily could kill the business. How could Onan possibly
survive with its gigantic overhead if sales would plummet almost overnight from
$50 million a year to the pre-war $800,000 annual revenues?
The Onans also were concerned about laying off
hundreds of hard working, loyal employees.
And would the Onans be able to find work for the more than 400 former
employees who were called into military service and were guaranteed to get their
old jobs back? As World War II began to wind down and thoughts started to turn
to converting to civilian production again, the Onans were mighty concerned
about a whole new set of problems.
Link to Related Subject- ELECTRIC PLANTS — GENERATOR SETS — POWER PLANTS