Senator KENNEDY of Massachusetts. Our next witness this morning will be Mr. Robert E. Flanagan, supervisor of educational services of the General Dynamics Electric Boat Division, Quincy, Mass.

I am happy to have the opportunity to introduce you, Mr. Flanagan, to the members of the subcommittee. I want to state how proud I am to have the opportunity to extend a word of welcome to Mr. Flanagan and the General Dynamics Co.

They came into Massachusetts in 1963, where they bought the Fore River shipyard. They brought a new and dynamic management team to Quincy and the Fore River shipyard; they have demonstrated the effective concept of efficiency in the production of shipbuilding and in the Fore River shipyard and they have also been extremely enlightened in developing a program of on-the-job training.

They are one of the finest companies and corporations in the country today and I think their experience with the on-the-job training program will be extremely helpful to this subcommittee. So I want to say how delighted I am to welcome you here and to say that I certainly respect the great work that your company as a corporation has done in Massachusetts and the contribution it is making.

I think that your experience with this on-the-job training program will be of great interest to the members of this committee and I welcome you.

STATEMENT OF ROBERT E. FLANAGAN, SUPERVISOR OF EDUCATIONAL SERVICES, GENERAL DYNAMICS ELECTRIC BOAT DIVISION, QUINCY, MASS.

Mr. FLANAGAN. Thank you, Mr. Chairman.

My name is Robert E. Flanagan. I am supervisor of educational services for the Electric Boat Division of General Dynamics at Quincy, Mass.

Senator Clark's letter of invitation to appear before this committee indicated you are currently evaluating on-the-job training programs under the Manpower Development and Training Act, and exploring means whereby employers may be encouraged to undertake additional training.

I certainly welcome the opportunity to share with you some of my experiences with MDTA programs. However, I would like to confine my remarks to those programs in which I have been personally involved for the past 18 months, namely, those concerning our Quincy shipbuilding facility.

While we have had considerable experience with institutional MDTA training programs since 1964, we have only recently entered into on-the-job training programs in depth. The reason for our gradual entry into on-the-job training was our own desire to proceed slowly, to gain experience through a pilot project and to produce a high-quality instructional program that would gain acceptance from our own personnel.

Our first major effort was to prepare and present briefings and explanations of on-the-job training to our top management and to secure their general approval. We then continued our presentations to middle and first-line management and to union representatives. Our efforts were rewarded when a departmental manager voluntarily requested on-the-job training for employees in the welding department.

We selected, as a pilot group, 200 welders in the unskilled and semiskilled classifications. Many of these people were graduates of institutional MDTA training. We spent considerable time and effort in preparation. We developed the curriculum, selected instructors from within our ranks, prepared and presented an instructor-training course, established administrative processes and completed a myriad of details completely on our own.

We had applied to the local office of the Bureau of Apprenticeship and Training for program approval April 13, 1965. This was received August 9, 1965. Oddly enough, our first program was processed much faster than any of our succeeding requests. I believe processing time will be reduced eventually, but it is a highly significant deterrent to program implementation.

Our welding program was approved for 26 weeks. We had sought a longer period, but were informed that the program had to be restricted to keep per trainee costs under $600. We are well aware that other organizations have been granted training periods up to 52 weeks. We feel that certain of our skills require training periods in excess of 26 weeks.

We began our pilot program with 200 trainees. Unfortunately, changes in our work schedule necessitated a temporary reduction in force so that the full complement received training for only 9 weeks. Thereafter a gradual reduction ensued so that only 72 trainees completed the entire course.

It should be mentioned that approximately 25 trainees were removed from the program because of their promotion to journeymen classifi

cations.

One startling statistic emerged from our first training program. The trainee group accident rate was 60 percent lower than the overall departmental rate. I attribute this to the instructor training course and the obviously excellent job the instructors did with their trainees.

Our second program was combined with an apprenticeship effort. We established a formal apprentice program for 120 persons in September 1965. We had previously applied in June for these apprentices to receive on-the-job instruction under MDTA. Approval was received late in October and the program established January 3, 1966. It is now proving what we consider to be one of the best apprenticeship training programs in the Nation.

We recently received MDTA on-the-job training contracts amounting to over $260,000. These programs are scheduled to begin February 28, 1966. The contracts will enable us to provide training for 550 unskilled and semiskilled personnel in the trades of pipefitter, shipfitter, grinders, sheet metal workers, and inside machinists. All of the trainees are new or recent hires, and are largely concentrated in the unskilled ranks. This program is an absolute necessity because of the acute shortage of skilled personnel in these trades in this area.

Our new programs indicate our management has thoroughly accepted MDTA on-the-job training as a solution to the labor shortage. We applied on December 29, 1965, for 1966 programs involving 120 shipfitter trainees, 120 welders, and 50 additional inside machinists trainees. In addition, we are currently preparing new proposals we have recently had requested from departmental managers.

In general, we are well on the way to extensive utilization of MDTA on-the-job training programs. We feel our experience enables us to

make a few recommendations for your consideration which may encourage the use of the program by other employers.

These recommendations are

(1) Reduce the time necessary to administratively process a program so it can be responsive to the skill requirements in an

area.

(2) Promote better understanding among the cognizant agencies so they can better advise industry as to the purpose and intent of on-the-job training under MDTA.

(3) Encourage the Government agencies to aggressively seek out employers regarding on-the-job training as a means of meeting their skill needs.

Senator KENNEDY of Massachusetts. I want to thank you, Mr. Flanagan. In your third point you said:

Encourage the Government agencies to aggressively seek out employers regarding on-the-job training as a means of meeting their skill needs.

We have been asking some questions of the various witnesses who have appeared here as to how they first got interested in on-the-job training. Was this something which your educational services first initiated for their members or did the Department of Labor seek you people out to see whether you would be interested in it?

Mr. FLANAGAN. Our first experience was with institutional programs, and frankly it was almost by accident that we discovered that OJT, or on-the-job training, was available.

Senator KENNEDY of Massachusetts. So the initiative really came from within General Dynamics rather than from direct contact?

Mr. FLANAGAN. I would say the initiative has come almost wholly from within our concern.

Senator KENNEDY of Massachusetts. You indicated as well, and made the recommendation: "Reducing the time necessary to administratively process the program."

We have also heard the last day or so testimony which indicated that probably the prime delay is in the local administration in the sense that either the contract has the problem of getting the approval of local labor union officials or the problem of delays in the Bureau of Employment Security or some other administrative delay at the local level.

Is this your experience as well, or was it in the processing down here in Washington? Could you give us any information as to what your experience shows is the cause of the delay and whether you have any particular recommendation as to how it could be helped?

Mr. FLANAGAN. I think to be perfectly fair to the people who are trying to administer these programs, that we in industry have to recognize that they have been assigned this additional task in addition to their normal duties. They have had several other Government projects over which they have cognizance, and I think that given time and given a little greater interchange of information between those people who are responsible for the institutional phase of MDTA and those people who are responsible for OJT, that these things will

work themselves out.

I am aware of the $75,000 limitation. As a result, we are breaking up all our programs. Instead of having one $260,000 multiprogram

as we had in the past, we are going to break them up into smaller ones and let our local office review them.

I think it is just that it is new to them, that most of the agencies I have dealt with have been highly cooperative, but it is a matter of interchange between the Federal and the State and the local people that is just going to take a little time and we feel that our effort in this direction has helped.

We have had other major companies within the State approach us and ask us for the benefit of our experience and hopefully we will see a lot more OJT in the Massachusetts area.

Senator KENNEDY of Massachusetts. You also mentioned that your training time was restricted by cost per trainee factors. What recommendations would you make in this area?

Mr. FLANAGAN. Well, I think that the agencies involved have to consider what we are trying to develop as far as a skill is concerned. We certainly cannot-if I may make an example make a qualified welder, a marine welder, in a 26-week period. I would like to give you an example that under our marine welder apprenticeship, which is a 2-year period, our apprentice received approximately 750 hours of actual instruction.

Now, if we give even semiskilled and unskilled welders 26 weeks of training at a ratio of 1 instructor for every 10 students, theoretically this would average out to approximately 4 hours per week per student, which would be less than 150 hours of training.

My recommendation is that where major companies have been granted 44 weeks and 52 weeks to train people in skills that are not as highly specialized as ours, that the Bureau of Apprenticeship and Training in the Department of Labor consider what we are trying to develop a little more closely.

I have been working with them on this, but I think that they are frankly restricted by the cost involved. If we were to give a trainee 52 weeks, it would double our costs, from approximately $520 now to $1,040.

Senator KENNEDY of Massachusetts. Are you suggesting that perhaps the emphasis ought to be on less trainees and more extensive training?

Mr. FLANAGAN. No; I feel that the emphasis should be on as much training as is required, at least, to bring the trainee up to the semiskilled category.

Senator KENNEDY of Massachusetts. Are you satisfied with the incentive suggested by the Federal Government to stimulate this program for corporations such as General Dynamics?

Mr. FLANAGAN. May I ask a question? What incentives have been provided?

Senator KENNEDY of Massachusetts. The financial incentive.

Mr. FLANAGAN. This is at our cost. There is no profit involved; we are simply receiving reimbursement of cost.

Senator KENNEDY of Massachusetts. But the Government bears the cost of training for the first year?

Mr. FLANAGAN. The Government bears the cost of our instructional personnel for the period approved.

Senator KENNEDY of Massachusetts. So that is some kind of initiative?

Mr. FLANAGAN. Well, we frankly think we are getting some tremendous benefits out of the program. Naturally, we can reduce our advertising expenditures if we can develop the people locally instead of seeking them from other areas. Our low accident rate on on-thejob training is also a highly contributing factor.

Senator KENNEDY of Massachusetts. Would you have an on-the-job training program if you did not have this kind of support by the Federal Government?

Mr. FLANAGAN. Yes, but not to the extent that we have it currently.

Our on-the-job training program would consist of putting an unskilled operator with a skilled operator and advising the skilled operator to teach him.

The difference between on-the-job training under MDTA is that we relieve the skilled operator from any productive assignment and he puts the unskilled man on the machine and he directs his activity.

In addition, we put them through a formal job instructor training course and it is much more effective. I hope that eventually industry will implement formal type on-the-job training programs such as we have under MDTA. I hope that our statistics will prove that it pays. Senator KENNEDY of Massachusetts. Would you have any additional recommendations which you could make after your experience that would increase the participation of the Federal Government besides just providing for the funds to set up a training program?

Mr. FLANAGAN. Well, not particularly for our corporation, because we are able to absorb the cost of developing and implementing a program, but I think that the committee should consider the cost of developing and implementing the program for the smaller business. people.

Senator KENNEDY of Massachusetts. Referring specifically to the tax incentive program which has been suggested, on which we have had some hearings. Would you favor this kind of approach?

Mr. FLANAGAN. I certainly could not deny it, if I understand what you are referring to. There was a measure introduced about a year or so ago for companies that had apprenticeship programs to be allowed a tax deduction of a certain amount of their expenditure for apprenticeship.

I think we must encourage

that.

Senator KENNEDY of Massachusetts. Could you give us any indication or idea how you would expand on-the-job training if such incentives were given?

Mr. FLANAGAN. I think we are getting enough benefit, Senator, with our size, and we are sufficiently saving on our recruiting costs and on our accidents that we are quite happy, but there may be smaller organizations that should definitely receive this type of assistance.

Senator KENNEDY of Massachusetts. I want to thank you very much, Mr. Flanagan, for coming down here and testifying before the committee. We certainly appreciate your helpful testimony.

Mr. FLANAGAN. Thank you, sir.

Senator KENNEDY of Massachusetts. I wish you good luck on your return to Boston.

Mr. Reese Hammond.

Mr. Hammond, we welcome you to this subcommittee. I want to include your testimony and the appendix in its entirety in the record