1996 – Packard Speeches

Box 5, Folder 47 – General Speeches

 

January, 1996, Reading ‘The Wonderful ‘One Hoss Shay’

 

1/96, Copy of typewritten text of Oliver Wendell Holmes’ poem, ‘The Deacon’s Masterpiece’, or ‘The Wonderful One Hoss Shay’

 

Packard attended the 1996 HP General Managers meeting and, concluded a discussion of quality control  by  reading this poem to the managers.

 

 

Box 5, Folder 48 – General Speeches

 

January 18, 1996, HP Board Retirement for Bill Haynes and Shirley Hufstedler, no location stated

 

1/18/96, Copy of the typed text of his speech

 

“I was fortunate to be asked to join the board of Chevron in 1972. Otto Miller was the chairman, and upon his retirement in 1974, Bill Haynes was designated to follow him.

 

“For the next nine years or so, I had the opportunity to visit many of the Chevron activities around the world. I learned that Chevron had contributed to the welfare of those foreign cities and countries where they were involved. I also learned that Chevron was far more complicated than I thought before I joined their board! They had to be closely involved with many countries where they drilled and produced their oil. I also learned that there was a radical change developing and their foreign activity was going to be much more complicated in the future.

 

“The Hewlett-Packard Company was not very large at the time I joined the Chevron board. We had just introduced our hand-held calculators in 1972 and HP sales that year were $483 million with profits of $38 million. We thought that our business would grow very rapidly in the next few years and that our foreign business would become a much larger part of the total.

 

“It was very interesting to learn about the world-wide involvement of Chevron and Bill Haynes had a broad role in the major activities of the company. I didn’t think that HP was large enough at that time to ask Bill to join our board after he became chairman of Chevron. I also realized that he would be very busy during his first few years as chairman at Chevron.

 

“HP grew very rapidly during the next few years and in 1981 our sales were $3.528 billion and we asked Bill to join our board. He was elected at our shareholder’s meeting, February 24, 1981.

 

“Bill Haynes made a great contribution to our company during his term on the board of HP. His world-wide involvement in Chevron helped us in the expansion of our world-wide involvement.

 

“In 1990 we had some problems at HP. Bill took the lead on a board committee to help us get these problems solved. They did so, and HP has continued its expansion through this last year. Our sales in 1995 grew to $31.519 billion with a profit of $2.433 billion, and we expect our growth to continue at about the same rate in the future.

 

“Bill, we thank you for the excellent advice and counsel you have given us. We will miss you and we hope that we will see you often in the future.

 

“Bill and Rita, we all wish you many, many happy years ahead.

 

David Packard

Chairman Emeritus

Hewlett-Packard Company

 

 

Box 5, Folder 49 – General speeches

 

February 24, 1996 Monterey Bay Aquarium, New Wing Opening

 

“Ladies and Gentlemen:

 

“I am very pleased that you could join us at this historic event – the opening of the New Wing of the Monterey Bay Aquarium.

 

“The first wing of the Aquarium was opened just twelve years ago. My family had never been involved in an aquarium before, but I was optimistic and thought it would be successful because we had excellent people helping us in every aspect of the design and construction.

 

“Our plan was based on the concept that the Aquarium should be designed to depict the habitats of the Monterey Bay. We also thought it should be educational as well as enjoyable and we hoped that the people who live in this area would come to think of it as ‘their’ Aquarium.

 

“Many of you here tonight have given us outstanding support in building this New Wing. I hope all of you will think of this as ‘your’ Aquarium. We want you all to enjoy it and we want you to feel free to give us your advice and counsel on things that will improve your Aquarium,

 

“There are, of course, some aspects we could have done better, but there were not very many. I think it is fair to say that many people think the Monterey Bay Aquarium is one of the best in the world. We want to keep it that way.

 

“We do have one of the best sites for an Aquarium. We have access to raw seawater from the Bay, and many of the exhibits could not have been done as well, in fact some could not have been done at all without that resource.

 

“There were two aspects of the Monterey Bay that were not included in the original plan. One was the outer boundary of the Bay where the habitats result from the interaction of the waters of the outer bay, and the waters of the Great Pacific Ocean which extends beyond the horizon to the west. That is the focus of the new Outer Bay exhibits you see here tonight.

 

“The Outer Bay and Open Sea are vast habitats which are home to large numbers of fast-swimming open sea fish such as tunas. We recognized early on that depicting these animals and habitats was going to be a challenging undertaking. We also realized that it would take a large building, large tanks and very advanced water systems. We decided that in order to do it right we needed to ask for some support from our friends and colleagues in the community, and established a goal to raise $20 million to complete these exhibits. The Aquarium had never before undertaken a major capital fund drive, and we were uncertain whether we would be successful. I am extremely pleased to say that, thanks to all of you here tonight, we were successful in meeting our goal. I am peronally very grateful to you – the response has been overwhelming to me and I really appreciate your support.

 

“The other habitat which was not adequately included in the first wing was the deep waters in the vast canyons of the Bay. Until now, technology was not available to fully explore these areas. This has been the focus of the Monterey Bay Aquarium Research Institute (or MBARI).

 

“With the opening of this New Wing this year, we have a new deep water research system. This includes a new ocean research ship. The Western Flyer, and a new unmanned remote operating vehicle (ROV) which will go down to 12,000 feet below the surface of the Bay. This will go down to the deep waters of the canyons for exploration and research for the next few years.

 

“From the work of the highly skilled people at the Aquarium and MBARI and at other ocean research organizations around the Bay, we will add new exhibits, and real time views of the vast marine life which lives in these deep waters.

 

“The Western Flyer can go from here to Hawaii without refueling, and that is the longest span in a trip around the world.

 

“We hope to have some trips in the Bay from Moss Landing scheduled in the future and we will endeavor to have an opportunity for each of you to enjoy a ride out into the ocean on this fabulous ship.

 

“As you can see, the people involved in the Aquarium and MBARI have their focus on the future. We will be continuing to work on bringing new information to the public about the oceans and their importance. The new Outer Bay Wing is a major step toward this goal, and I offer my thanks to each one of you for your support of our capital campaign which made this new wing of the Aquarium possible. I hope you are as proud of our accomplishemnt as I am, and I hope you enjoy this evening of celebration.”

 

 

Box 5, Folder 50 – General Speeches

 

March 7, 1996, Remarks at Sigma Xi Forum on Science, Technology, and The Global society, San Diego, CA

 

3/7/96, Copy of typed transcript from tape made of Packard’s remarks at this Forum

 

“Ladies and Gentlemen,

 

“I am pleased to be part of this Sigma Xi forum and find that what I’ve heard thus far has been very stimulating. There are several things I want to talk about. The first thing I want to show you is a copy of Charles Dickens’ classic story A Christmas Carol, which was taken entirely off the Internet and reproduced with ink jet printers. Look at the quality of the color on that. These books are made one at a time, and the cost is about fourteen dollars a book, mostly in the binding. So in the future, if you don’t happen to have a library, you can still get whatever you want. We’re working with the Library of Congress to make more books available on the Internet. This is something we hope will make a contribution to the future.

 

“The next thing I want to talk about is high-intensity, light-emitting diodes. We have been producing these for some time. It turns out that if the tail lights, brake lights and turn signals on an automobile – if the incandescent lights are replaced with light emitting-diodes  – it will give you one extra mile per gallon of gasoline. It will save that much energy. We just announced a very large program devoted to this, and the plant that we’re building down here is part of it. This is going to be a very important activity.

 

“The next thing I want to talk about has to do with a basic change in our concept of science.

All the technology we put into place right after World War II was based on a theory that the atom was the smallest particle in the world. It had neutrons and protons. From that you start the periodic table, and you design an atom bomb, and it met all the requirements of that time. Shortly after World War II, we and our allies undertook a massive program in high-energy physics. We did that because we thought we might find something that would give us a decisive advantage over our adversaries. That did not happen.

 

“What did happen is that we discovered the atom is not the smallest particle in the world. It consists of ten smaller particles, with various forces – I don’t completely understand them myself. But the fundamental difference is this: With the science we had at the end of World War II, you could reproduce things that occurred in nature. You could make artificial diamonds, for example. With the science we now have, we can make things that do not occur in nature. We can make articles that are harder than diamonds. We’ve already done that. And the range of things that have come out of this is just astounding. I think that’s going to be a tremendously importat contribution in the years ahead.

 

“Now, the other thing I want to talk about is the basic level of research and development that’s being conducted in this country. Our company, on a worldwide basis, does about three billion dollars worth of research per year, and with the growth we’re generating, we’re adding two billion dollars a year of new research and development. The reason we’re not adding more than that is because we simply cannot find enough people to do that much fundamental research every year.

 

“We would spend three billion if we could, but there are just not enough people available. We simply cannot hire good people rapidly enough. I don’t know what that suggests in terms of our worldwide situation, but I think it really says that basically there is a lot more support for research and development from the industrial world than some of the members [of Sigma Xi] have talked about. But too many companies today are entirely focused on the next quarter. What counts is the long run, but they’ve completely distorted the emphasis on what you do, and if that could be corrected, it would be a tremendous improvement. We can’t operate this world on a quarter-to-quarter basis.

 

“That concludes what I wanted to talk about today, and thank you Mr. Chairman for allowing me to be here to make this presentation.

 

5/6/96, Copy of letter to Gretchen Dennis, Packard’s secretary, from J. Renee Keever, Director of Development, Sigma Xi Society enclosing a dopy of the transcript made of Packard’s remarks.”

 

David Packard passed away March 26, 1996

1995 – Packard Speeches

Box 5, Folder 42A – General Speeches

 

January 5, 1995, Remarks at Memorial Service for Jack L. Shepard, Stanford Memorial Church

 

1/5/95, Copy of typewritten, with large type, text of speech

 

Packard says he has known Jack Shepard for many years, “and I have admired his many leadership activities since he graduated Stanford in 1953.

 

Packard tells of “developing a close personal relationship” with Shepard while working with him on the fund raising project at Stanford, called PACE. He says he and Jack “spent many days together, rounding up cattle on our San Jose Ranch and hunting and fishing together.

 

“Jack was a leader in all of his many lifetime activities. Jack made a better world for everyone his life touched.”

 

 

1/3/95, Copy of typewritten biographical summary of Jack Shepard

1/4/95, Typewritten copy of more extensive biography

1/5/95, Photocopy of cover of memorial service program

Undated, Copy of typewritten note to Packard saying Mrs. Shepard asked if he would says a few words at his memorial service

 

 

Box 5, Folder 42B – General Speeches

 

March 10, 1995, Remarks at Colorado College, Denver, CO

 

3/10/95, Copy of typewritten text of speech

 

Packard says he feels very close to the College – “as I would had I been a student here.”

 

He tells of his mother and father both graduating here in the class of 1902. “My father was the captain of the football team which won the state championship in 1902. I spent many hours listening to him and his teammates of that championship team talk about it – they remembered every play, in every game and every detail of each game.”

 

Packard’s father wanted him to follow in his footsteps as a lawyer, but he says he had “already decided to be an engineer.” He says the University of Colorado at Boulder had a fine engineering school, and he had “always assumed he would attend college there.”

 

But he explains that his plans for college changed after he drove his mother and sister to California in 1929. In Palo Alto they visited one of his mother’s classmates, a Mrs. Neff, whose daughter, Alice, was attending Stanford. He says Alice took him on a tour of Stanford and he learned they also had a good engineering school. So he applied at both schools and says he was “rather surprised that I was admitted [at Stanford].”

 

“When I graduated.” he continues, “I received a job offer from GE in Schenectady, New York. Through a series of events I spent only three and one half years at GE, and with Bill Hewlett I established the Hewlett-Packard Company in 1939.

 

Packard says he wants to “talk about a major change which is now taking place in the world. This change will make the twenty-first century much more interesting and much more complex than the twentieth century has been. He explains how up until World War II science taught that the atom was the smallest particle in the universe. After WW II we “discovered that the atom was not the smallest particle in the universe We learned that an atom was made up of ten smaller particles, that there were weak forces and strong forces within the atom which did not follow Newtonian laws of gravity.

 

“With the earlier image of the atom we could construct things that occurred in nature, like artificial diamonds. With the new knowledge, we can construct materials that do not occur in nature, materials harder than diamonds, glass that is ductile, and many more materials that were not available to us in the past.”

 

“We are beginning to see how genetic engineering will make plants and animals that are used for food much more efficient and will make it possible to provide food for a rapid increase in the world population.

 

“Even more exciting is the possibility of incorporating genetic products with large scale integrated circuits in ways no one ever thought of in the past.

 

“I had the honor of addressing the graduating class in 1964. I predicted some of the things that would happen during their lifetime – that we would travel in space and that a man would walk on the moon.

 

“I am quite sure some, if not most of that graduating class, did not believe that what I told them would happen. I received an invitation from that graduating class to join them at their 25th reunion, because everything I predicted at their graduation had come true.

 

“I do not expect what I have told you today to come true during my lifetime, but I am quite sure it will during yours.

 

“This brings me to another prediction. Within the next few years there will be a major change in college and university education. Every graduate will have had to take a basic course in science. For in the future there can not be a liberal education without a basic course in science.

 

I am working with the president of Stanford to incorporate this change within the next few years. I would Colorado College to do the same.”

 

“President Mohrman and distinguished members of the faculty, I feel greatly honored to speak with you here today. Colorado College is considered to be one of the best private colleges in the country. I hope whatever help I can provide in funding will help you to keep it that way.”

 

 

Box 5, Folder 43 – General Speeches

 

March 29, 1995, Remarks on Hewlett and Packard Receiving the Lemelson-MIT Award

 

The Lemelson-MIT Prize  Program was established in 1994 to recognize the nation’s most talented inventors and innovators and to establish positive role models for American youngsters. The program’s Lifetime Achievement Award honors individuals for career-long accomplishments in invention and innovation.

 

3/29/95, Copy of typewritten draft of Packard’s speech

 

Packard says “It is a special pleasure to share this recognition with my lifetime business partner and friend, Bill Hewlett.

 

“The success of our company,” Packard says, “since its beginning in 1939 has been highly dependent on new products. We wanted all of our new products to be important contributions to the progress of technology.

 

“Fortunately, we have been able to make a number of important contributions; beginning with the resistance stabilized audio oscillator which Bill Hewlett invented when he was still working in Fred Terman’s laboratory at Stanford.

 

“Most of the progress of technology in the world in the last half of the twentieth century came from new products, many of which were developed largely in our universities all across the country.

 

“Closely following the end of World War II both we and our allies mounted a large program in high energy physics. We did this because we thought they might find something which would give us a decisive advantage over our adversaries.

 

“That did not happen – but from this activity we learned that an atom was not the smallest particle in the universe. Instead, an atom had 10 separate particles and had weak forces and strong forces that did not follow the Newtonian laws of gravity.

 

“With this new discovery we can make things that do not occur in nature. We can make materials harder than diamonds and glass that is ductile, and this new knowledge is the basis for genetic engineering.

 

“What this means is that the exponential growth of the twenty-first century will be far larger than the exponential growth we have achieved since Bill Hewlett and I started our company in 1939,

 

“It is unfortunate that our federal government has not recognized this great opportunity for the twenty-first century. Sometime, hopefully soon, they will recognize the great mistake they are making and get our country back on the right track again.

 

“I applaud Mr. Lemelson and MIT for recognizing this important need and establishing this award.

 

“I also want to thank Mr. Thurow and the selection committee.

 

“This award will enable the young inventor who will receive the $500,000 to make some important contribution to technology during his professional career.

 

“These contributions will be important in expanding our technology in the next century. From this will come a better life for all of the people in our country, indeed, for all of the people in the world.”

 

3/29/95, Copy of news release describing the award and Hewlett and Packard’s careers

 

 

 

Box 5, Folder 43A – General Speeches

 

April 10, 1995, Founders of the Future – Remarks at Dinner Honoring William Hewlett and David Packard, Burnham Pavilion, Stanford University.

 

4/10/95, Copy of typewritten text of speech by Packard

 

“President Casper,

distinguished members of the Board of Trustees, ladies and gentlemen.

 

“The success Bill and I have enjoyed and the company we built has been entirely dependent on Stanford.

 

“Without Fred Terman’s counsel and guidance, the Hewlett-Packard Company would never have been started.

 

“Our company has had the benefit from the beginning, of inventions developed in the laboratories of Stanford and the scientists and engineers who were educated there.

 

“The purpose of this New Science and Engineering quadrangle we are funding is to make available to generations of young people in the future, the same kind of opportunities Bill and I have had.

 

“As I looked over the list of guests here tonight it became evident that every one of you has been helpful to Bill and me and to our company. On behalf of both of us, I want to thank you.

 

“I met with President Casper last week and he said he did not know what was going to happen in the future.

 

“I told him I was glad to hear him say that, because those people who think they know everything are very annoying to those of us who do!

 

“The technology we have used in the twentieth century was based on science which had developed over several thousand years and was largely in place at the beginning of this century.

 

“That science considered the atom to be the smallest particle in the universe. The atom had a nucleus consisting of protons and neutrons circled by rings of electrons.

 

“From that image the Periodic Table was built, the atom bomb was designed and we could duplicate some of the materials that occur in nature, such as artificial diamonds.

 

“Right after the end of World War II the United States, our allies in Europe and the Soviet Union embarked on a very large program of high energy physics.

 

“we did this because we thought we might discover something which would give us a decisive advantage over our adversaries. I am quite sure the scientists involved considered there might be some other outcome from this massive project. None of the participants found anything that would be a decisive advantage.

 

“They discovered something that is considerably more important – that an atom is not the smallest article in the universe, that it contains ten smaller particles which are influenced by forces that do not follow Newton’s laws of gravity.

 

“From this new knowledge it is possible to make things that do not occur in nature such as materials harder than diamonds, glass that is ductile and, indeed, this new knowledge provided the basis for genetic engineering. I am quite sure that no one can predict the outcome, but there will be opportunity for ingenuity in the 21st century vastly greater than  anything in the past.”

 

4/10/95, Copy of the printed invitation to this dinner

4/10/95, Copy of typewritten speech made on this occasion by Stanford President, Gerhard Casper. He describes in interesting detail the long and productive relationship that existed between Stanford and David Packard and Bill Hewlett.

 

 

Box 5, Folder 44 – General Speeches

 

June 8, 1995, Entrepreneurship and the High Technology Revolution, The Independent Institute, San Francisco, CA

 

Packard was being honored by the Institute. David Theroux, President of the Institute chaired the occasion and George P. Shultz and Edwin Zschau spoke about their experiences with knowing Packard. The Institute invites experts on social and economic issues, especially as they relate to important new books. Thus the discussions frequently related to issues described in Packard’s recent book The HP Way.

 

6/8/95, Copy of typewritten transcript of the speakers at this event: Theroux acting as Chairman, Shultz and Zschau talking about Packard, Packard’s address,  and then Theroux putting questions to Packard for comment.

 

Packard says he and Bill Hewlett lived through various social and economic periods as they grew up – the ‘Roaring Twenties’ when they were in grade school, and the Great Depression when they were in college.

 

“The experience both of us had during [the depression] period,” Packard says, “was responsible for some of the important policies we followed as we built our company. Those policies we followed included our strong policy to finance our company by reinvesting our profits to finance our growth and to avoid any long-term debt. My experience as a youth in our Pueblo, Colorado, neighborhood gave me a strong dedication to the importance of philanthropy, and a strong commitment to the importance of fishing!

 

“Some of the other important policies and practices were the result of the advice we received from Fred Terman at Stanford University.

 

“We did not have any master plan about what we thought we might accomplish in the future. In the beginning, we simply wanted to create jobs for ourselves. In those days, one could live on three dollars a day. And, that is what the job I took with General Electric Company paid in 1935.

 

“We did decide at the beginning that we wanted to do something that was new and useful. We did not want to duplicate products that were already in the market – we did not want to be a ‘me too’ company.

 

“In the spring of 1934, I received a job offer from the General Electric Company. Fred Terman encouraged me to take that job. He said I would learn many things that would be helpful when we started our own company. He also thought Bill would benefit from some additional graduate education.

 

“My job at the General Electric Company did not start until the spring of 1935. When I arrived at G.E. I first met with Mr. Boring who had interviewed me at Stanford and knew I was interested in electronics, which was then called radio engineering. He told me there was no future for radio engineering at G.E. and that I should concentrate my work there on motors, generators and power transmission systems. I have often thought of the irony of that advice because the Hewlett-Packard Company is now much larger than the entire General Electric Company was at that time.

 

“Subsequently, our company limited its involvement to electronic instruments during the 1950s, but in the middle of the 1960s we began our involvement in digital products, including electronic calculators and computers. We had to take considerable time to catch up in this field. We were not in a position to attract the best talent from outside the company, and the leadership in the company came mostly from our own engineers who had concentrated their work on electronic instruments.

 

“In the decade of the 1970s, we built up our strength in computers and we were able to attract some important talent in this field. As our strength has grown, we have now become one of the best computer companies in the world. Today, our company has thousands of products and customers all over the world.

 

“There is no way any chief executive officer of a major company today can know everything involved and be able to make all the decisions. One of the reasons why the problem of bureaucracies can develop results from the fact that a chief executive officer will have a number of people covering all these matters, trying to advise the chief executive on all of what is happening in all the areas of operations.

 

“Now we got to a point one time when to approve any major sales decision, we had to receive approval from fourteen committees. Well, we fixed that problem by cutting it down to one. Instead, people involved in operations all around the company received responsibility themselves to decide what they wanted to do. It was their responsibility to make sure that their decisions fit in with what was the company’s on-line goals in the field. For example, without such responsibility, by the time top management discovered that there existed a problem with a computer in the system and attempted to correct the situation, another situation would have developed, altering the earlier problem altogether.

 

“Not every company has the problems that we have – a very large number of products or a very large number of customers all over the world. Some companies have a much smaller group of customers, but in many ways, the same group of management principles apply.

 

“There are in fact several things a chief executive officer must do. One of them is to make sure that there is a strong internal audit capability because you simply cannot have innovative accounting policies. That has to be reinforced very rigidly, and in some cases, companies come into some areas needing an audit committee which if not followed can cause a company a lot of trouble.

 

“Now, the second thing, of course you have to have a common experience, have common warranty policies, and a number of those things. And then the chief executive officer also has the responsibility to look for new areas in which the company can make a contribution. And doing so, of course, what’s important is having the advice and counsel of all those people throughout the company.

 

“These are the sort of principles that I discuss in our book because they are important to success.”

 

After Packard’s remarks David Theroux submits several questions from the audience to him for his response.

 

Q. What worries you most when thinking ahead, particularly when thinking of your own family, children and grandchildren?

 

A. “I am concerned that the young people of the future have the same opportunities that Bill and I have had. And, we believe that it is our responsibility to do what we can to make that come about.”

 

Q. Thank you for your contributions, please share with us your vision of what high tech will be like in the  year 2000?

 

A. “Something that is very important that has caught on in the world in the 20th century. Of all the technology that was used up to the end of World War II, technology since has changed everything for the future. Science had developed over a number of years leading to the development of the atomic bomb. But right after World War II, both we and our allies in response to the Soviet Union, undertook a major program in high energy physics, including the work at the Stanford Linear Accelerator.  We believed that we might discover something that would give us a decisive advantage over our enemies. But, that did not happen. What did happen was that we learned that the atom was not the smallest particle in the world. The atom contains smaller particles held in place by the weak and strong forces which do not obey the Newtonian Law of Gravity.

 

“Now, the fundamental difference that is very important compared with the earlier technology that could create such substances as an artificial diamond, was that you could make things that did not occur in nature. And this change is the basis for example for today’s field of genetic engineering.

 

“However, if you look at the large-scale integrated circuit, which is the basis for all computers today, they are really just plainer devices. They don’t have three dimensions. But with the new technology, they will have three dimensions. And, that will provide many, many more options to consider for the future. I look at this as something extremely exciting and offering new possibilities which are hard to imagine. We are not just going to have an information super-highway, we will have a whole new world of new kinds of products, new kinds of things to do. And, we will be developing new jobs for a lot more people with these options from this tremendous new science.”

 

Q. What trends do you see today that are positive and which concern you?

 

A. “We have spent the better part of the 20th century dealing with communism. Now that we have gotten rid of it, we don’t really know what to do. Many of the post-communist countries of the world are having serious problems, such as we see in Bosnia. And, it is not at all clear how we can solve these problems. It might be done through the United Nations or other international organizations, but it will take the firm commitment of the United States for that to happen. And, the American people don’t want to get involved in a commitment of that kind – it would be like Vietnam again. Now that means that these areas of the world are going to suffer great losses. We certainly are not in a position to provide any optimal solutions.”

 

Q. At the ten year mark of Hewlett-Packard, there were about 200 employees, did you envision at that time that HP would be 100,000 strong and such a success today?

 

A. “We certainly did not envision that the company would ever be as large as it is today. We thought that we would be successful, but never foresaw this size. Bill and I have said many times that because the principles of the HP way apply, as the company gets larger, its success depended entirely on the results of the people involved. Fortunately, that is what has happened, and in publishing The HP Way, we have had a tremendous response from the 100,000 employees all over the world.”

 

Q. What lessons can you share with us about management succession and what is the role of former leadership?

 

A.”I have always felt that any company that is really strong has management and people who will take over as time goes on. Filling positions from inside and doing the job very well, we are in very good shape. We have quite a number of people coming along. However, this poses one problem for us that we know about. Some of our people have become targets for other companies. And, Bill and I have always taken the position that if they want to do something to promote themselves, then more power t them.”

 

Q. Please comment on the many lawsuits increasingly taking place in the high technology industry, i.e. Microsoft, Intel, etc.?

 

A. “I have a lot of lawyer friends, and I have said may times that there are too many lawyers in the field. And, I have a joke about this: What is the difference between a dog run over on the highway and a lawyer run over on the highway? The skidmarks in front of the dog.”

 

Q. How well did your management philosophy work for the Department of Defense and what changes in government bureaucracy do you suggest?

 

A. ”We were interested in putting into effect at the Department of Defense some of our HP policies like ‘Management by Walking Around.’ Many of you know that Bob McNamara hated professional military people, and that was well known even then. But, I believed that we should really have them on our side. So, I made a point of having them come to our offices and similarly visit them in their offices.”

 

Q. How is HP solving the problem caused by the overload of information from the information highway? How do you process all this information in a 24 hour day.

 

A. “It is certainly clear that the information highway will generate more information than anyone can handle, and it will take discipline on the management level. On the other hand, having this information available is so important that we are going to be way ahead of the game by doing that. Our foundation is working on a program with the Library of congress. The Library of Congress has the largest collection of books and documents of anywhere in the world. We have been working to develop a course in American history with the Library of Congress people and several professors who are teaching American history. That program is going along very well. If you’re studying a particular city, you could just look up what it looked like 100 years ago. It’s an exciting program and it will be great for children and will have a tremendous amount of potential.”

 

 

Box 5, Folder 45 – General Speeches

 

November 8, 1995 – A salute to Dream Builders, Tech Museum of Innovation, San Jose, CA

 

11/8/95, Copy of typewritten text of speech, very large type

 

“I want to express my appreciation to John Warnock and the Board of the Tech Museum for honoring me with their Chairman’s Award. I am very pleased to accept it.

 

“Tonight’s theme is ‘dreams.’ And making them come true. Everyone has dreams about what they want to do, or who they want to be in the future. When Bill Hewlett and I started our company 56 years ago, a couple could live on $100 per month. I do not recall that we had any grandiose dreams about what we wanted to do, although we probably dreamed about having $500 per month sometime in the future.

 

“I can recall only one specific dream I had – I saw our company name in neon lights – I saw it not from every freeway in the world – but from El Camino Real on the way into San Francisco.

 

“I am sure it is safe to say that we all have dreams. Some people dream about becoming rich – or about making more money – although it seems to me that when one has enough money to buy or do any thing they want, dreaming about making more money does not seem very rational – but then when I think about it, who am I to tell anyone what they should dream?

 

“In my own case, I did not dream about much until our foundation decided to have some of its own programs. It was then that I dreamed about making the Monterey Bay Aquarium the best aquarium in the world, and I dreamed about making the Children’s Hospital at Stanford the best medical facility for children in the world. I also dreamed about making the Monterey Bay Aquarium Research Institute the best ocean science center in the world and making everything our foundation did, the very best in the world.

 

“In doing that, I also wanted to make the Hewlett-Packard Company the best in the world, which I guess was my dream from the very beginning in 1939. I did not think of it as a dream, but Bill and I wanted our company to make a contribution in everything we did – we did not want to be just a ‘me too’ company. And from all reports, we are achieving our goal.

 

“Once again, I thank you for this honor, and I look forward to the partnership between the Monterey Bay Aquarium, MBARI and the Tech Museum of Innovation in producing the ‘live link’ exhibit enabling people to experience exploration of the world’s oceans on a real-time basis right along with our scientists.

 

“I suppose you could also call this, ‘building on our dreams,’”

 

 

Box 5, Folder 45A – General Speeches

 

December 1, 1995, Barney Oliver Memorial

 

12/1/95, Copy of typewritten remarks by Packard

 

“I first met Barney Oliver 62 years ago. In the fall quarter of my senior year at Stanford, I enrolled in Professor Terman’s graduate course called ‘Radio Engineering.’ I was the first undergraduate allowed to take this course. A junior from Cal Tech enrolled at Stanford at the same time. He asked Fred Terman if he could also take this radio engineering class, and Professor Terman allowed him to do so with the stipulation that if he failed in the first mid-quarter examination he would have to drop out. Barney not only had the highest grade in that examination, he also got the highest grade in the class in every examination that year!

 

“In the spring of 1934, all the engineering students at Stanford began to worry about finding a job when they graduated. Bill Hewlett, Ed Porter and I decided that we would form our own company of we did not find satisfactory jobs, and Barney Oliver agreed to join us. It turned out that I received a job offer from the General Electric Company in Schenectady, New York. Professor Terman advised me to take that job because I would learn many things there that would be helpful when we eventually started our own company. He said that Bill Hewlett would benefit from several years of graduate work. After graduating, Barney took a job at the Bell Telephone Laboratories where he did some pioneering work with John Pierce on information theory. When the U.S. became involved in World War II, he shifted his work to radar.

 

“Bill Hewlett and I convinced him to join us at HP in 1952.

 

“Barney was not only a brilliant scientist, but also a great human being. I have never known anyone who did not like Barney. He also had a great sense of humor. On one occasion, Art Fong, one of our Chinese engineers, asked Barney to give him an evaluation on whether the project Art was working on would succeed. Barney’s response was, ‘It does not have a Chinaman’s chance!’

 

‘This statement from one of our HP employees sums up what everyone thought of Barney.”

 

‘It is one of the saddest tasks I have ever undertaken to inform you that this Thanksgiving evening, our dear friend, mentor, colleague and my boss, Barney Oliver, died of a heart attack. Barney was a good friend to a lot of people. I learned to admire and respect him during my nine years working with him. He was very generous, caring and always had time to chat if you came by his office.’

 

“After 62 years of working with Barney Oliver I consider him not only one of the best scientists I have ever known, but also one of the best friends I ever had.”

Box 4, Folder 46 – General Speeches

 

December 7, 1995, IEEE Computer Society Award

 

12/7/95, Acceptance Remarks to IEEE Computer Society

 

“Bill Hewlett and I thank you very much for this award. It is indeed a great honor to be numbered among the very distinguished people who have received this award in past years.

 

“While the program outlines how HP became involved in the computer business, I thought it might be interesting to cover this in more detail.

 

“In 1964 HP’s worldwide sales were $125 million and not one cent was from computers.

 

“In 1994 HP’s worldwide sales were $24 billion and 78% was from computers!

 

“This was a remarkable transformation of our company. It would be nice to say that we saw the profound effect computers would have on our business, and that we prepared ourselves to take early advantage of the computer age, Unfortunately, our record does not justify such pride. It is more accurate to say that we were pushed into computers by the revolution that was changing electronics.

 

“We did realize that computers could improve the accuracy of an instrument by ten fold or more, and a computer could format the output so it would be the most useful for the user.

 

“I thought we might gain some time by acquiring one of the small computer companies. I took a trip to New England to investigate several of the computer companies there. It turned out that the Digital Equipment Company (DEC), was the best by far, but I decided not to try to acquire DEC because we would have a difficult time correlating some of their basic policies with ours,

 

“I also visited Wang Laboratories where they were designing an electronic calculator. It was so complex that I decided we should not plan to get into the electronic calculator business.

 

“All of that changed, however, when a young man named Tom Osborne paid a visit to HP in 1966. Tom had worked across the bay for a mechanical calculator company, Smith Corona Marchant, a supplier of mechanical calculators. Tom had built a typewriter sized electronic calculator and had been showing it to possible buyers, but with no success.

 

“At HP he showed it to one of our senior engineers, Paul Stoft, and to Barney Oliver, and later to Bill Hewlett and me. We recognized that Tom had a little powerhouse of a machine that might be developed into a desk top calculator that swiftly and silently could calculate trigonometric, logarithmic, and hyperbolic functions and could be programmable as well. It would make obsolete, noisy mechanical calculators and the cumbersome tables of functions that crammed the engineer’s bookshelves.

 

“Working with Tom Osborne, a team of HP engineers developed the Model 9100 desktop calculator, highly successful in the market place, a truly innovative design. It was before the days of large-scale integrated circuits and used discreet components and a 14 layer printed circuit as the read-only memory.

 

“The most exciting part of the electronic calculator development was still to come. We had an excellent development program of light emitting diodes in our laboratory, but none of our divisions were interested in using them. With the event of large-scale integrated circuits which could be used as memory and as data processors, it became possible to meet Bill Hewlett’s challenge of developing an electronic calculator that would fit in your shirt pocket. Our development team did this and we introduced the HP Model 35 and later the HP Model 65. Sales for these calculators and their descendents total over 15 million units.

 

“After about two years, many other companies were making competitive calculators which drove the price sharply down. We did not follow the price down, but in the end we made more profit than any of these competitors.

 

“Getting back to the computer development, two of our engineers, Paul Stoft and Kay Magleby were experimenting with designing a computer. They gave me a vision of an HP computer controlling HP instruments that were connected to plotters and printers.

 

“Following this vision, in September 1964 we authorized the development of an HP computer which was to become our Model 2116. We found that we were selling more Model 2116s as stand-alone computers, than as controllers for instruments.

 

“Through a series of other steps our Model 2116 became, in 1972, our first general purpose computer, the HP 3000. This computer with its MPE operating system became one of the computer industry’s more enduring operating systems. More than twenty years after its introduction its descendant machines are just now entering their obsolescent phase. In the intervening years we designed many other computers and printers and plotters, until we are today one of the best computer companies in the world.

 

“As we look toward the future we see that there has been a watershed change that will have a profound effect on the computer industry. All of the technology that was used during the 20th century was based on science that was largely in place by 1900. This science was based on the concept that an atom was the smallest particle in the universe. It was thought the atom had a nucleus consisting of protons and neutrons, with rings of electrons around it. From this image the periodic table could be constructed and the atom bomb could be designed.

 

“Shortly after World War II the U.S. and its Allies, and the Soviet Union undertook a massive program in high energy physics. They did this because they thought something might be discovered that would give them decisive advantage over their adversaries.

 

“That did not happen. What did happen was that they discovered that the atom was not the smallest particle in the universe, that an atom contained ten smaller particles which had forces within the atom that did not follow the laws of Newtonian physics.

 

“With the old concept of the atom one could construct things that occur in nature, such as an artificial diamond. With the new science it is now possible to construct things that do not appear in nature, such as materials harder than diamonds. This new science covers the basic laws of genetic engineering, and it is difficult or impossible to predict what can be done. From this I predict it is going to be an exciting time for you people who will spend your lives in the 21st century.

 

“Again let me tell you that Bill Hewlett and I consider it to be a very great honor to be included among the distinguished people who have already received this honor.

 

“I will close by wishing you an exciting and  productive time in the 21st century.”

 

12/15/95, Copy of a typewritten letter from Gretchen Dennis, Packard’s secretary, to Professor J. A. N. Lee, at Virginia Tech sendinghim a copy of the above speech.

1990 – Packard Speeches

Box 5, Folder 38 – General Speeches

 

January 27, 1990, Science and Technology – Preserving American Leadership, The Business – Higher Education Forum, Tucson, AZ

 

1/27/90, Copy of typewritten text of Packard’s speech.

 

After saying that he is honored to be invited to participate in this roundtable session, Packard says he has been involved in many of the key issues which will be discussed at one time or another during the 50 years of his professional career….

 

“There is one thing I have learned about this subject, it is a very complex issue and there are no simple solutions. I have followed the work of the Business-Higher Education Forum over the past several years, and I think your work has been very constructive, but I do not think you have found all of the right answers and I will suggest several things we might want to discuss this morning.

 

Packard says that he believes that the most important measure that could be used to determine if we are preserving American leadership in science is “whether or not we are able to use our science and technology to keep the quality of life and the standard of living in the United States at the forefront of all of the nations of the world. This means that converting scientific and engineering knowledge into the best products and services should be the main goal. I would like to see us reduce our relative expenditures on some of the big science programs; high energy physics and manned space programs, for example, and increase our research and education in the central scientific disciplines; physics, chemistry, biology, mathematics, earth science, ocean science and engineering for example. The one big science program that should receive continuing high level funding is medicine and health care, but this field has some problems too, some of which you discussed yesterday.

 

“In these terms, science and technology leadership requires at least the following three things:

 

  1. An adequate number of scientists and engineers in the front ranks of their peers world-wide, measured not only by their knowledge, but also by their creativity, or innovative spirit.
  2. Adequate financial resources for university research and teaching, and for industry to build efficient facilities to compete on a world-wide basis.
  3. An environment in which scientists, engineers, teachers, university and business executives can devote their time and their energy to their professional work.

 

The high level funding by the federal government for research and education began at the end of World War II. The GI Bill gave educational opportunities to the men and women who served their country in uniform. Some studies have indicated that the GI Bill did more to enable young minority people, Blacks in particular, to improve their status in our society than anything that has been done since the 1960’s.I strongly recommend that this forum look into that situation because what we have been doing recently in the field of education for our young Black people is not working very well. This might call for financial support to be provided for an individual to attend any school or university for which the individual is qualified.

 

Packard looks at how the high level of federal funding for research and development at American universities began. “It was at the instigation of the scientists who established and operated the National Defense Research Committee and the Office of Scientific Research and Development during the War. He quotes Vannevar Bush as saying ‘We gathered the best team of hard-working devoted men ever brought together…for such a task. Congress gave us appropriations in lump sums and trusted us to decide on what projects to spend the money.’ Packard continues, saying “Grants were made to promising research teams at a number of our universities and these people were allowed to pursue their research with a minimum of oversight. We have gone far astray from that practice, which made possible a tremendous accomplishment during the war with only half a billion dollars.” Packard describes some dangers foreseen by Dr. Bush:

 

[Allowing] “industry-wide combinations, either of managers or labor leaders, to exact undue prices or wreck an industry at the expense of the public.”

 

[Permitting] “special interests [to raid] the treasury, unbalancing the budget, and destroying the national credit upon which the whole world depends.”

 

‘Shutting off the source of venture capital, and enmeshing in the red tape of bureaucracy the new small pioneering firm that should be encouraged to build the great industry of the future’

 

Packard says that Bush’s concerns fortunately did not develop rapidly and the United States enjoyed two decades of “unprecedented progress and leadership in science and technology. About the middle of the 1960’s this great progress and leadership began to deteriorate and it has been almost all downhill since. Everything Dr. Bush predicted as dangers are now with us, and I think they are much worse than he could have imagined. I realize it is not possible to turn back the clock, but there are a number of things that could be done to greatly improve the situation.”

 

To consider these Packard says he would like to return to the three things he said were necessary to preserve America’s leadership in science and technology. “We clearly need an adequate number of scientists and engineers in the front ranks of their peers, but this is not a simple problem. We need them at all levels, not just the PhD’s at the top. Japan is ahead of us in some important areas not because they have better people at the top of the pyramid; they don’t. They are doing better in the mundane engineering and design job. They are beating us on quality, not basic science. They are beating us in the application of the technology that we have developed. They are creative in a sense, but their great strength is in meticulous attention to detail in both the design and the manufacture of their high technology products. They have had an advantage in low cost labor and capital, but American people now buy Japanese products because they have better quality. The United States lost its leadership in random access memories not because of Japanese lower cost but because of Japanese higher quality.

 

“It seems to me that it is the responsibility of you educators to look at this problem on a much broader base. I think we must find ways to instill in our young people a better appreciation of what it takes to win, the importance of knowledge and hard work. I do not think there is any reason to have set quotas for minorities, for either students or faculty members, at the graduate level of the prestigious research universities. That is not where the opportunities are for the majority of the Black and Hispanic young people. You do them a great disservice by lowering the standards and establishing special programs, for in doing this you are sending them a strong message that they are inferior. This suggests that you business people should not give money to universities for scholarships for minority people unless the recipients are fully qualified to compete with their classmates. The problem is that there are not enough high school graduates who are fully qualified to go around. That means to me that the problem is primarily how to improve the education and the motivation of the young minority people before they reach the university level. I feel quite sure that we must do a better job for these people beginning with their early years. Their first eight years, I think, are the most critical. This means that it will take time to do what is needed. It will be the end of the decade of the 1990’s before these young people who are in grade school are at the university level. We must, therefore, direct a major effort to improve our educational system at the high school level and at the later years of grade school to made a significant improvement in the decade of the 1990’s. I think, however, to do what we all would like to do will require a major effort for our young people during their first eight years, and I do not think it is possible to get our young Black people up to the position they deserve unless we can get them started right in the beginning. We have to take a much longer view of this educational challenge. I know the pressures are great to set numerical quotas, to generate numbers to make the situation look good. I think it is time we look at the facts and call a spade a spade.

 

“Continuing education is extremely important in this field of high technology which is moving so fast that much of what one learns in school is out of date in just a few short years. Many companies have good continuing education programs with schools and universities but more should be done. This forum is an ideal place to address this problem.”

 

Packard moves on to his second requirement for science and technology leadership – adequate financial resources for university research and industrial facilities. “There are a few special issues in the area of financial support” he says, “that deserve more attention from this Forum. Our leading research universities must have the best facilities and equipment, but their overhead costs are getting out of hand. Some of this is caused by a proliferation of programs to help minorities, expanded activities to attract students, and of course to deal with the red tape involved in government support of various kinds. I can not think of a better project for this forum than for industry members to give the universities some help in controlling their overhead costs.

 

Packard turn to his third requirement for leadership: an environment in which scientists, engineers, educators and business people can do their professional work.

 

“I think that probably the most important way the federal government can help industry commercialize technology is to provide a favorable environment for business and industry to develop, manufacture and market high technology products and services.

 

“Over the years the federal government has gone far beyond such a simple role and there is no way we could turn the clock back even if we wanted to, but I think one of the most serious problems we have on the basic issue we are discussing today is that business and industry in the United States are operating in such an adverse environment that it will be virtually impossible for America to maintain its world-wide leadership in science and technology unless the environment is improved. Any significant improvement will require a drastic change in federal policy and action.

 

“Let me call your attention to several of the specific problems. The first is hostile takeovers financed by junk bonds. These have sapped the strength of a number of important companies in the United States. In some cases loading a company with a level of debt that will require the use of all future earnings just for debt service for years to come….The threat of hostile takeovers is also encouraging American firms to take actions such as using profits to buy-back their stock instead of strengthening their research, manufacturing, and marketing capability.

 

“The university members of this organization deserve a considerable blame for this unfortunate situation. Most of your business schools have spent far too much time teaching the principles of financial manipulation instead of sound industrial management during the past few years.

 

“A second problem is that of the savings and loan situation. It is generally agreed that to be competitive in the future, the U.S. industry needs a larger source of lower cost capital. The common suggestion to solve this problem is to increase the savings rate of the American people. Here in the savings and loan business we have a situation in which billions of dollars of the savings of the American people have gone down the drain for no useful  purpose whatever, and the American taxpayer will have to foot the bill. The only attractive proposal I have seen that might lower the cost of capital for business and industry is to eliminate the double taxation of dividends.

 

“The federal government provides billions of dollars to support research and some of it goes go into research that helps industry commercialize technology, but a very large part goes into defense, space and high energy physics. The advocates of these large programs claim they help the  economy in general and the high-tech industry in particular by the fall-out effect. There has indeed been some very important fall-out in certain areas. For example, the American aircraft industry is the undisputed leader in the world because it has benefited from research in all aspects of aerospace technology done by the Defense Department and NASA. The computer industry had some benefit from defense research in the early years but in the past two decades the defense research policy in computers has been so bad that computer technology and practice in D.O.D. is years behind the private sector, and the same thing is true in large scale integrated circuits. The Defense Department is justifiably concerned about this situation and that is why they are strong supporters of Semitech, and U.S. Memories. In most cases I think we will do better to concentrate our research on what we want to achieve and not just hope to get the benefit of fall-out from the big ticket programs. I think the government involvement in such programs as Semitech will be one-way streets with the traffic signs all in the wrong direction as far as industry is concerned. And with the micro-management that will be contributed by our Congress, there is no way they an be very efficient anyway.”

 

Packard sees some other problems related to government support of research and development both for universities and industry. “It has a political element that can not be eliminated but could be handled better. Popular programs like medicine, space and high energy physics receive large funding that is not always well related to the basic welfare of the country. I do not see a serious problem with federal support of medical research. Its primary goal is the welfare of the American people. Since this subject was discussed yesterday I do not think we should discuss it further today.

 

“The Apollo project was a great triumph that clearly demonstrated American leadership in space to the world. The trouble is that we have not been able to find an adequate encore, and I think it is time to admit that there may not be one. High energy physics gave us nuclear weapons and nuclear energy as well as important fundamental knowledge about mater and energy. I think space research and high energy physics research should, from here on, involve international cooperation and international funding. I want to emphasize that I think federal funds would serve to preserve American leadership better if they went to increased support for research and teaching in some of the disciplines of basic sciences and engineering instead of for these big ticket programs.”

 

“Packard sees another problem with federal support of science and technology and that “is the congressional pork barrel which distorts the application of federal funds for university research and teaching, and influences the location of large research projects such as the super-collider. State governments also try to influence the location of industry. These political influences are not all bad. It does not make much difference where the super-collider is located if the space and the geology are all right. I think the work that many states do to try to help develop international business for companies in their state is mostly a waste of time and money, but  it is not a large problem in any case. These political influences make it difficult to allocate resources in the optimum way.

 

To summarize, Packard says he does not think “American leadership in space or high energy physics or exclusive American leadership in any other area of science and technology is a necessary, or even a ;possible goal for the future. For about two decades following World War II the United States enjoyed a dominant position of leadership, but there is no way we can regain that position. It is quite possible for the quality of life for the people in America to continue to improve without continuing American leadership in all of these large, highly visible projects. However it would be a devastating blow to the spirit of our country for us to fall seriously behind the other leading nations in the world in every area of science and technology. We must not let that happen, and of course that is why we are all here today.

 

“There are some other things we could discuss this morning; the tremendous burden placed on American industry by excessive and unrealistic government regulations, how the defense department could do a better job in making its vast expenditures for research and development make a better contribution in dealing with these problems, the research and development tax credit, and capital gains taxes. I am sure there are other issues that might be of interest, but I will conclude my remarks at this point.”

 

 

1/25/90, Copy of program agenda

11/16/89, Copy of letter to Packard from Jana Harris, Forum Administrative Assistant, giving details on travel, accommodations etc.

1/17/90, Copy of HP travel order for company plane

 

 

Box 5, Folder 38A – General Speeches

 

April 24, 1990, Statement Before the House Committee on Armed Services  Investigations Subcommittee, Washington D. C.

 

4/24/90, Copy of typewritten text of statement

 

Packard starts by saying he appreciates the opportunity to provide his opinion on the proposal they have developed to create an Acquisition Corps within each of the military services. He says he has reviewed the proposal and in his opinion it “will not work very well, it will not improve the acquisition process, and if anything it will make the DOD acquisition process worse.

 

“There are some aspects of your proposal which, if properly applied, might help. In order to not be completely negative I will give you some suggestions about how something along the lines you are considering might be developed to improve the acquisition of equipment, materials and services by the DoD.

 

Packard says he understands the proposal is to apply an Acquisition Corps “across essentially all of the present acquisition workforces of each of the military services, and other acquisition activities of the DoD. The plan would be an effort to improve the professional status of all of the personnel, civilian and military. Additional educational opportunities would be offered to encourage professional development, and a more professional compensation policy would be put in place for the civilian force. Military personnel in acquisition work would be expected to make a career commitment and be advanced in rank by competition within the corps, not in competition with other general or flag officers. There would be more stringent requirements on civilians at senior level also.”

 

While Packard sees these as reasonable objectives, he says “The problem is that you are proposing still another layer of micromanagement by the Congress on the DoD acquisition activity when the most serious overall problem with DoD acquisition is already too much micromanagement of DoD by the Congress.

 

Packard recalls the Blue Ribbon Commission on Defense Management which he chaired in 1985 and 1986, and says, “…many of the Commission’s recommendations were included in important legislation approved by the Congress, and are now in place. Many of the ideas in the proposal we are discussing here today were included in the recommendations of the Commission.

 

“To give you some understanding about why I think this proposal we are discussing will not help I would like to recall for you several of the key recommendations of the Commission that have not been implemented.” And Packard draws quotes from the Commission’s Interim Report, dated February 28, 1986. [See speech dated May 5, 1986 for his contemporary review of the Interim Report, as well as a list of other speeches bearing on this Commission’s work.]

 

from Page 16 of the Interim Report:

‘Establishing short, unambiguous lines of authority would streamline the acquisition process and cut through bureaucratic red tape. By this means, the Department of Defense (DoD) should substantially reduce the number of acquisition personnel.’

 

Packard says their proposal would “establish more ambiguous lines of authority, more red tape, and I do not see how it would reduce the number of acquisition personnel or streamline the acquisition process.”

Also from page 16:

‘Congress should work with the Administration to recodify all federal statutes governing procurement into a single government-wide procurement statute. This recodification should aim not only at consolidation, but more importantly, at simplification and consistency.’

 

Packard’s comment on the current proposal as compared to the Commission’s recommendation was, “I do not think your proposal contributes anything useful to this recommendation which I think is very important.”

 

Another quote from page 16 of the Interim Report:

‘DoD must be able to attract, retain, and motivate well qualified acquisition personnel. Significant improvements, along the lines of those recommended in November 1985 by the National Academy of Public Administration, should be made in the senior-level appointment system.’

 

Packard adds to this quote from the Report saying, “This paragraph goes on to recommend flexible personnel management policies, a better compensation plan for senior acquisition personnel and contracting officers as well as scientists and engineers. It proposes better education and experience criteria for professionalization of career paths….”

 

“This paragraph,” he says, “relates squarely on what you are trying to do by establishing an Acquisition Corps. In your proposal you have included most of the things the Commission recommended.”

 

Packard comments that while he doesn’t think the plan they are proposing will work, they “are obviously trying to do the right thing,” and, given this positive objective, he says he would like to make a recommendation.

 

“I think you should establish a joint task force with the Office of the Secretary of Defense to develop the legislation to what is necessary to attract and retain the caliber of people needed to elevate the DoD acquisition program to a level of excellence. You should ask for advice from industry about any new legislation.

 

Packard says that if the defense acquisition process is to be improved “it will be absolutely necessary to establish [an] environment conducive to high quality professional work in Acquisition.” And to remind the members of the Subcommittee what he means by the “proper environment,” he says he wants to recall a statement he made in the foreword of the Blue Ribbon Commission’s Interim Report:

 

‘Excellence in defense management will not and can not emerge by legislation or directive. Excellence requires the opposite – responsibility and authority placed firmly in the hands of those at the working level, who have knowledge and enthusiasm for the tasks at hand. To accomplish this, ways must be found to restore a sense of shared purpose and mutual confidence among Congress, DoD, and Industry. Each must forsake its current ways of doing business in favor of a renewed quest for excellence.

 

‘Congress must resist its inveterate tendency to legislate management practices and organizational details for DoD. Excellence in defense management will not come from legislative efforts to control and arrange the minutest aspects of DoD’s operations. Congress can more usefully contribute by concentrating on larger, often neglected issues of overall defense posture and military performance.

 

‘DoD must displace systems and structures that measure quality by regulatory compliance and solve problems by executive fiat. Excellence in defense management can not be achieved by the numerous management layers, large staffs, and countless regulations in place today. It depends, as the Commission has observed, on reducing all of these by adhering closely to basic, common sense principles; giving a few capable people the authority and responsibility to do their job, maintaining short lines of communication, holding people accountable for results.

 

‘Defense contractors and DoD must each assume responsibility for improved self-governance to assure the integrity of the contacting process. Excellence in defense management will not be achieved through legions of government auditors, inspectors, and investigators.  It depends on the honest partnership of thousands of responsible contractors and DoD, each equally committed to proper control of its own operations.’

 

Packard says he thinks that statement “was the most important recommendation that was made by our Commission. This recommendation has not been implemented. I think your proposal of an Acquisition Corps opens the door for an opportunity to make a contribution of historic significance to the improvement of defense acquisition.”

 

Packard says he wishes to comment on several of the issues raised in their proposal which give him concern – “not with the intent to be critical, but to try to be helpful.”

 

“As I interpret your proposal you intend that the existing acquisition stature would not be changed, and that the new requirements would be imposed as a sort of matrix across them all. I think this would be a mistake. I think there should be only one acquisition organization to each service, and the kind of educational, experience, promotional and compensation changes you are proposing should be directly incorporated into each service activity, not added as one more layer on top of what is already there.

 

“There should be more uniformity among the service acquisition programs for the lower level activity which is purchasing a vast array of what might be called housekeeping equipment, materials and services. I do not see any need for military officers to be involved.” And he goes on to suggest the elimination of excess specifications for products in this area, and more reliance on the purchase of commercial products.

 

Packard refers to those areas in the report now before the Subcommittee which discuss the issue of military officers vs. civilians in certain positions, particularly those activities involving weapons and weapons systems. “It is very important,” he says, “to have military experience and judgment in the consideration of what weapons to develop and what weapons to acquire. It is desirable to have some good business, or industrial experience, as well. This issue was given extensive consideration by the Commission, and as you may recall, the basic decision on the type and level of military forces was assigned to a team of three offices, the Chairman of the Joint Chiefs of Staff, the Vice Chairman of the Joint Chiefs of Staff, and the Assistant Secretary of Defense for Acquisitions ASD(A). The legislation to do this has been enacted and the structure is in place. I do not know how well it is working, but I still feel strongly this is the proper arrangement for making these important decisions even though it may take more time to have the arrangement working effectively.”

 

He says he has raised this issue because their proposal has suggested that “the Acquisition Corps be given some authority in this area.. It is, in my opinion, not necessary to give the Acquisition Corps any specific authority in this area as long as the ASD(A) has overall authority to establish policy and to evaluate the performance of the Acquisition Corps of each service or agency”

 

Responding to a proposal that acquisition personnel be given authority ‘similar to the independence of an accountant or inspector general,’ Packard says quality cannot be inspected into a product or an organization. “Until and unless the Congress gets over the idea that more inspectors and more auditors will help the DoD acquire better material and better services at a lower cost, defense acquisition will continue to be a sorry mess – it will not get better.”

 

On the proposal that acquisition personnel should have college degrees, Packard feels that, while college degrees should not be a requirement, he does agree acquisition personnel “must have considerable knowledge about how to do their work. It would be much better to have a series of examinations, uniform across the services, and a minimum score on the examination should be required. The knowledge necessary to pass the examination could be acquired by college courses, home study or simply from experience.

 

“These jobs are not going to be very attractive to college graduates unless they are really made much more professional, and I think there will be a larger choice of good candidates if college degrees are not required.”

 

“You also recommend the establishment of a new Acquisition University. I think you should recommend consolidating the courses that are already being offered into an existing institution and not establish a new one.”

 

Packard closes by offering to respond to any questions.

 

3/9/90, Letter to Packard from U.S. House of Representatives, Nicholas Mavroules, Chairman, and Larry J. Hopkins, Ranking Minority Member. Letter encloses a draft copy of the proposal on an acquisition workforce for Packard’s review

3/12/90, Copy of a press release from the House of Representatives announcing the release of the draft proposal for review by all concerned

3/22/90, Letter to Packard from Nicholas Mavroules, Investigations subcommittee, inviting him to testify before the Subcommittee on the proposal being circulated

4/13/90, Copy of a letter to Packard from Donald J. Atwood, although not so identified, known to be Deputy Secretary of Defense in 1990. The letter is not signed but a handwritten note on the copy, is signed “Don” and says he has attached the report they discussed. This report presents the current acquisition organization in the DoD.

4/18/90, Copy of a letter to Packard from Nicholas Mavroules confirming their Subcommittee meeting on April 24m and he attaches a list of issues and questions he would like Packard to comment on.

4/20/90, Copy of a letter to Packard from Bernie McKay and Eben Tisdale, of HP’s Government Relations office in Washington D. C. commenting on the proposal

5/10/90, Note to Packard from Joyce C. Bova  of the Armed Services Committee staff enclosing a copy of his comments before the Subcommittee. She asks that Packard edit his remarks and return the copy to her. She also asks that he supply answers to questions attached. A transmittal sheet shows the edited remarks were returned on May 31, 1990

Box 5, Folder 39 – General Speeches

 

September 12, 1990, presentation of the American Electronics Association Medal of Achievement to John Young, San Jose, CA

 

9/12/90, Typewritten text of Packard’s remarks

 

If he were to make a short presentation Packard says he could say that this award to John Young “…would be well justified by reminding you of the record; of the overall growth and success of the company since John took over in 1977. In 1976,” he continues, “ the last year before John took charge, HP revenue was $1,123, 584. Net earnings were $90,841. We had 32,200 employees. We produced 3600 different products. Our computer business was about 49% of the total.

 

“By 1989, under John’s leadership, total revenue had grown ten times to $11.9 billion. We had 95,000 employees and more than 10,000 different products. We had become one of the major players in the computer industry, and in the United States we had moved up to No. 39 in the Fortune 500 listing. I could add more facts and figures to demonstrate that John’s achievement in his leadership of the Hewlett Packard Company has been impressive indeed.”

 

Packard adds that he “…could also give…ample justification of the award by reminding you of what John’s peers in the industry think of him. During the last few years he has received many awards for his achievement’s. Among the recent awards: he was selected as the ‘Best Executive of the Year’ by the Electronics Business Magazine in 1989. He was given the award for Distinguished Public Service by the National Science Foundation in 1990, and last year in the Electronics Business magazine survey of the best executives and the best companies, John received the highest percentage of responses; 63.8% for best executive.

 

“I do not want to rest here,” Packard says, “for John’s record of achievement is far more impressive than these facts and figures I have given you would indicate.

 

“Achievement is to a large extent the setting of worthy goals and then living up to them. John has done that over and over again in his work with our company, both before and after he took charge in 1977.”

 

Packard says that “During his career with our company John has made a number of individual achievements which involve setting goals for himself or his management team and then achieving them. I want to tell you about two of his very important achievements as the CEO of our company. He recognized that our company would be expanding over the years ahead, we would have more customers, more products, and that to be successful we would have to compete in the world-wide market place. He properly recognized this would require us to develop and put in place the best possible service for our customers, wherever they might be, and for every one o our products they might be using. He established this goal for his management and the accomplishment has been impressive. In nearly every survey during the last several years Hewlett Packard has been at the top of the list in the quality of our customer service. This required the enthusiastic support of plants in 24 U.S. cities and 15 foreign countries, and sales offices in 140 U.S. cities and some 300 sales offices in 92 other countries, a real tribute to John’s leadership.

 

“John also recognized that the quality of our products would be a major factor in our ability to compete in our world-wide markets. He set a goal for the company to make a ten to one improvement in the quality of our products and made this a high priority challenge for everyone. The company has not quite reached this goal of his on an overall basis, but many of the manufacturing facilities have reached or exceeded the goal John set for them.

 

“During his tenure as President and CEO of our company John has taken time to help with issues important to the local community, issues at the national level of importance to our industry and to our nation, and he is recognized as one of the leading statesmen of industry by the governments of industrialized countries all over the world. He was appointed by President Reagan in 1983 to be Chairman of the President’s Commission on Industrial Competitiveness, and John was selected to be its Chairman. Of course it could have been that no one else wanted the job, but I am sure he was elected by the members as a sincere recognition of his leadership ability. I consider John’s work in trying to make our country more competitive to be another real achievement.

 

“There is one more thing I want to say about John’s achievements during the past decade. It has been a decade of unbelievably rapid change. The ability of computers to collect. store, analyze and distribute data and information has increased by orders of magnitude in just a few years. And so has our ability to communicate on a world wide basis. Some people think this ability is far in excess of the information and data that is worth all this effort. As usual we find there is nothing new about this idea. In 1854 Henry David Thoreau made this statement in his book, Walden: ‘Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end, …. We are in great haste to construct a magnetic telegraph from Maine to Texas, but Maine and Texas, it may be, have nothing important to communicate.”

 

“There is a very serious and important aspect to this tremendous rate of progress in the electronics industry during the past decade that has made John Young’s achievements more difficult and therefore more impressive.

 

Without any doubt the technology that has increased the speed and efficiency of communication and travel on a world wide basis during the past decade is the driving force that brought an end to the cold war. This opens up a completely new ball game for the 21st Century. We do not know yet what this really means for the current  Mid-East crisis is only the first inning.

 

“And now one final word. It has been long recognized that behind every successful man is a strong, capable woman. Tonight I want to rephrase that statement and tell you that standing shoulder to shoulder with John Young is a very strong, very capable woman, his wife Rosemary.

 

“I could say many more things about John Young’s accomplishments. I hope you know by now that I think this award is richly deserved. John, it is with great respect and with great admiration that I present this award to you tonight.”

 

9/12/90, Copy of printed program of the Medal of Achievement Award ceremony at the 47th Annual Meeting of the American Electronics Association.

9/21/90, Letter to Packard from Dick Iverson, AEA President, thanking him for presenting the Award to John Young, and enclosing a copy of a picture [see Packard picture file] of Young and Packard at the podium.

9/16/90, Newspaper clipping from the San Jose Mercury News covering the Award ceremony with excerpts from Young’s speech at the time.

1988 – Packard Speeches

Box 5, Folder 26 – General Speeches

 

January 18, 1988, Observations on the INF treaty and Other National Security Issues, Menlo Park, CA

 

1/18/88, Typewritten text of Packard’s speech.

 

Although the folder for this speech does not reveal who the audience is, Packard says he fools “greatly honored to be able to appear before this distinguished audience …and add a word of warm welcome to that you have received from Warren Christopher.” He says he is appearing in an unofficial capacity and will be expressing some personal views on the INF Treaty and “some other aspects of U.S. National Security.

 

Packard begins with “a brief summary “ of the main points of the treaty. This is a rather detailed accounting of the types of missiles, both Soviet and American, and what restrictions are placed on them, and which are to be eliminated. He explains that the U.S. must approve the treaty before it can be ratified. Packard says “It is far from a good treaty but I think it should be ratified, and I think it will be ratified.””

 

Packard reviews the advantages and disadvantages of the treaty for the Soviet Union and the U.S. and concludes that the U.S. “should ratify the INF Treaty and be cautiously guided by what the Soviets now do rather than what they say.

 

Talking about the defense budget Packard says the Reagan administration has made a substantial increase in the Defense budget, about 100% during the first six years and this bought a real increase in both the strength and the morale of U.S. military forces. The increases were largely based on the wish lists of the Services and by 1985 examples of fraud, waste, and abuse were being cited by many members of the Congress and the Media and the credibility of the Defense Department was in jeopardy.”

 

Packard mentions the President’s Commission on the Defense Budget [which he chaired] without going into detail on its recommendations. He says he mentions it only to “highlight the importance of the report of the Commission On Integrated Long-Term Strategy which was released on January 12. “If our defense funds could be devoted to support the kind of forces that would be needed by this recent report,” he says, “the present budget level of just under three hundred billion dollars would be quite adequate to support U.S. Armed Forces of utmost strength and readiness. Unfortunately this is not likely to happen for our Congress considers the defense budget first as a pork barrel for the benefit of their members and only incidentally as the necessary means to provide the military strength adequate to support our leadership of the Nations of the Free World.

 

“[If] the INF Treaty is ratified …what follows will be a real test of the resolve of the United States to continue to meet its obligations to its allies and friends around the world. It is absolutely essential that the Defense budget be kept at the present level until we see what happens after we ratify the Treaty. The year 1988 is certain to be a turning point of historic importance. I hope and pray as I know you do that it will be a turning point toward a better world. The outcome is not yet determined, the important decisions have not yet been made.”

 

2/23/88, Handwritten note from Sidney Drell to Packard enclosing a copy of his [Mr. Drell’s] testimony before the Senate Committee on Foreign Affairs on February 18th

2/12/88, Copy of a letter Packard sent to all HP General Managers enclosing a copy of his remarks on the INF Treaty.. A note from Bob Kirkwood suggesting this distribution is attached.

3/22/88, Copy of a letter written by HP General Manager Don Curtis to the two Senators of his State of Idaho where he enclosed a copy of Packard’s remarks on the INF Treaty, adding some thoughts of his own. A copy of Curtis’ letter was directed to Packard.

4/12/88, Copy of a letter from Packard to Don Curtis saying The thoughts that you have brought to their attention are very good.

 

 

Box 5, Folder 27 – General Speeches

 

March 1, 1988 , Ethics – The Essential Element of a Free Society, The Thomas Jefferson Research Center, Beverly Hills, CA

 

3/1/88, Typewritten text of Packard’s speech. There is no background material in this folder which would indicate how Packard happened to be at this place to make this speech, but his first words give a clue: “It is a great honor for me to be here to join in the celebration of the 25th year of the Thomas Jefferson Research Center. I am very flattered to be able to join the select group of distinguished people who have received the ‘Responsible American’ award in recent years. I sincerely believe the work being done here at this center and by its disciples all across the country is extremely important because of the serious degradation of our country’s moral standards during the past three decades.”

 

Packard says he will begin with a few observations on the general subject of ethics, and then offer some opinions on ethics as found in the operations of the Defense Department procurement  system.

 

“Ethics,” he says, “ is considered to be a branch of moral philosophy, the study and the practice of what is right and what is wrong, what is good and what is bad. Ethics is closely related to religion, and there are many who believe that what is right and what is wrong comes from the word of God. The consideration and practice of what is right and what is wrong [has] been undertaken over the centuries by people of different religions, with different supreme beings, and codes of ethics have often governed the actions of groups of people without the involvement of religion at all. Ethics is above all a subject of extreme importance to every group of people who interact together for the ethics of the people in the group determine how the people get along together, whether they are happy and mutually supportive and productive and thus enjoy a high quality of life, or whether they are antagonistic, unhappy and unproductive. Groups of criminals often have strong codes of ethics that enforce individual discipline very effectively. We generally however consider ethics as an important determinant of good behavior in a group of people and that is the context I will use in my following remarks.”

 

Packard notes that the consideration of ethics is not new, and he mentions the work of thoughtful people like Socrates, Plato, and Aristotle. “It is interesting to note,” he says, “that these early philosophers considered ethics as being a desirable ingredient of politics, and in listening to the current political campaign it seems as though we haven’t learned much in these last two thousand years.”

 

Many people have believed that fear is what motivates good behavior, Packard observes. “Ruthless enforcement of laws and regulations does seem to result in more uniform behavior among the people of a group, and it may be said the more ruthless the enforcement, the more uniform the performance,  – this of course is the essence of tyranny, the antithesis of a free society.”

 

Packard sees that “…while we may not know all the answers to the physical universe we have an understanding of our physical world that is infinitely better than that of two thousand years ago. Yet our understanding of ethics, of morality, of human behavior has by no means reached the point of common acceptance in the world. The concept of ethics, however, what is right or wrong, what is good or bad for the individual person and for the society as a whole has not reach a state of common agreement during these last two thousand years.

 

“This is a subject that can not be resolved by rigorous scientific procedures, but will be resolved by the strength of conviction of the individuals on one side or the other. The ethics of the Judeo-Christian tradition has demonstrated that it provides a much better opportunity for the individual, a more productive environment, and in every aspect a higher quality of life for the majority of the individual people in the society. The ethics of the Japanese society, which has an entirely different origin has had a similar result. The more effective performance of the free market economy is one demonstration of the benefits that come from an environment of individual freedom contrasted with an environment of tyranny.”

 

Switching to the subject of the business world Packard says that “…business managers have found that their organizations are more productive when the people in the organization are given the opportunity to use their abilities in ways they think best for the common objectives of the organization rather than in ways dictated from the leaders at the top. For the environment of individual freedom to be effective it is essential that there be a common set of objectives, a common ethic, accepted and adhered to by the people in the organization. Honesty, fair play, consideration of others, are necessary complements to hard work, intelligence, skill, and ingenuity in an efficient organization of any kind.

The more complex the role of an organization the more important it is to have a commonly accepted code of ethics, particularly if it is desirable to achieve the maximum benefit of the hard work, intelligence, skill, and ingenuity of the individual people in the organization.

 

“This brings me,” Packard says, “to the subject of the role of ethics in military procurement.”

 

Packard first outlines the some of the complexities of the U.S. Department of Defense. “The Department annually conducts business with some 60,000 prime contractors and hundreds of thousands of other suppliers and subcontractors. In 1985 the Department placed contracts worth approximately $160 billion, seventy percent of which went to a group of 100 contractors. Twenty five contractors did business of $1 billion or more, 147 did $100 million or more, and almost 6,000 did $1 million or more….This vast and important enterprise is almost impossible to manage on an effective basis because of the size and breadth of its activities and because of the political environment in which it exists. The Congress must authorize the plans and the budgets for the Department, and appropriate the necessary funds. Every member of the Congress has a constituency that is affected by Defense Department activities, and each of the services has its own constituency. Because defense procurement involves expenditures in every congressional district and every State, the members of the Congress deal with defense procurement to a very large extent as if the budget was their personal pork barrel. To make matters worse, many members of the Congress think they have become experts in Defense Management, and there has been far too much legislation in recent years on management issues that should have been left to the Department. It is indeed unfortunate that our Congress has, in many ways, the lowest level of ethical performance of any of the parties involved in Defense activity.

 

Packard says that, “Given the size and complexity of the department, and the political environment [in which] it operates,  it should not be surprising that there has been considerable criticism over the years, charges of waste and abuse of one kind or another, and of mismanagement, and fraud. There have been innumerable studies and reports on these problems, one of the latest being by President Reagan’s Blue Ribbon Commission on Defense Management, with which I was involved and which I will refer to as the commission. These studies have made generally similar findings. Mismanagement and waste, and fraud have been found and have been dealt with to some extent, but whether or not these problems are worse than might be expected in [an] activity of  this size complexity, the general public has continually demanded that waste, fraud and abuse be eliminated from defense procurement.”

 

Packard notes that ever since the 1950s every new administration has tried to deal with these problems. “The response to the charges of mismanagement in Defense,” he says, “ have been generally in the form of additional rules and regulations put in place by department or legislative action. These rules and regulations have become so extensive and so complex, that further expansion of them seems to be adding waste without eliminating much abuse and fraud. It requires 600 pages of small print just to summarize the Defense procurement regulations. The more recent recommendations for improvement have been strongly in favor of reducing and simplifying the rules and regulations,  rather than further increasing them.

 

“At the beginning of the Reagan Administration the Secretary of Defense put in stronger procedures to enforce the rules and  regulations. This was done by assigning inspector generals to procurement activities and by enlarging and strengthening the audit activity in both the Defense Department and the defense industry. This approach caused a very antagonistic relationship between the Department and the defense industry, it slowed the procurement process, and it has generated an environment which is counter productive to high quality, low cost development and production in the defense industry.

 

“Examples of waste and abuse are found in the activities of the major defense contractors. Theses include charging of exorbitant prices for spare parts, mischarging costs to their contracts, giving gifts or other favors to government officials, falsifying test results, etc. The Department is responsible for some of these problems, as well as the Industry.

 

“The high priced spare parts issue was primarily caused by two bad practices; first, contractors following the regulations of the Department which called for the same kind of documentation, packaging, etc. for one item that is required for a large number of items. Second, in many of the cases a small number of items had to be manufactured on a special order which resulted in high unit costs that were reflected in the pricing. The use of a little more common sense by both the Department and the Industry would have avoided these problems, but unfortunately there has been little opportunity to use common sense in the whole procurement business.

 

“A problem that was more serious was the mischarging of costs to contracts by the defense Contractors. This was caused by a perverse set of incentives established by many if not most defense contractors for their lower level managers. The performance and the compensation of these managers was evaluated by the financial results of their division or department and they thus had an incentive to switch labor and material costs from one contract to another to make their financial performance look good. This often happened when there were both fixed price and cost plus contracts in the same department. Adequate rules and regulations were in place, but these managers were seldom given a clear message by top management that honesty and integrity had to come above financial results in performing their job.”

 

After describing some cases of fraud that occurred Packard says that “The Commission concluded that many of these problems were caused by a lack of ethical behavior by both the Department and the defense contractors and the situation could be greatly improved with a commitment to more ethical behavior by both parties. It is abundantly clear from the record that even more rules and regulations and the more rigorous enforcement of the rules and regulations has not worked, in fact it has caused other problems that are in many ways more serious.

 

“From discussions with some of the major defense contractors it became apparent that they were seriously concerned about these problems and anxious to take some remedial action. Many of the defense contractors had already established codes of ethics but many had not and in very few cases were the codes of ethics fully understood or rigorously followed at the lower levels of management. At a meeting with a dozen or so of the chief executives of the major defense contractors in the spring of 1985 it was quite evident that they were all anxious to take some positive action to correct these deficiencies in their performance. Following this meeting a number of them worked together to develop a Defense Industry Initiative, (‘DII’) to establish a procedure of self-governance to deal with the problems in industry on a voluntary basis.

 

“The DII identifies six critical elements as necessary for effective self governance: (1) codes of conduct; (2) employee training; (3) reporting of violations by employees; (4) procedures for voluntary disclosure; (5) responsibility to the industry; and (6) public accountability. This is a remarkable endeavor by the leaders of the defense industry, a real ray of sunshine in an otherwise dismal situation. It  was privately endorsed by Secretary Weinberger and President Reagan, I believe it will be enthusiastically supported by the department under Secretary Carlucci and I hope this approach will eventually be strongly supported by the Congress.”

 

Extensive inspection and the imposition of penalties for infraction has a very negative effect on the quality of work being done by defense contractors. Largely because of increasing  competition from Japanese companies which have achieved both high quality and low costs for their products by more extensive employee participation, United States companies have been giving employees more freedom in how they do their work. This has improved quality and reduced costs here in the U.S. just as it has done in Japan. This is not an entirely new principle for it is well established in management practices that quality must be built into the product, it can not be obtained by inspection. If the work is done right in the first place as it should be, less inspection is needed not more. In some circumstances too much inspection can actually reduce the quality of a product, and cases of this were reported to the commission.”

 

“It should be thoroughly understood that adoption and implementation of self governance by the industry even with the full support of the department and the congress will not immediately solve all of the problems. It will take some time to reduce acts of malfeasance in large companies to an acceptable level, and problems which occurred in the past will continue to come to light. Thus there will continue to be reports in the news media which will make it appear from time to time that self governance is not working very well.

 

“A good example of where self governance can be very helpful is the issue of ‘whistle blowers’, individuals in an organization who try to bring problems they see from the level of their work to the attention of the top managers of the organization. The Defense Department has not handled this problem well, and ‘whistle blowers’ have traditionally been given a hard time by their superiors in the Department. Industry has not been much better, but when the chief executive officer encourages people at all levels to report problems and this is incorporated in the culture of the company many more problems will be discovered and corrective action will be taken before the problem gets out of hand. Regulations and legal action have not worked well in dealing with this problem. For effective action, mutual trust must be established, and here codes of ethics and self governance is absolutely necessary.”

 

“There are several things the Defense Department must do if this voluntary effort by industry is to be successful. First it must clarify its regulation so that contractors can know what is expected, so they can properly structure their internal procedures and controls. If both parties do not know exactly what is expected, arguments and disputes are bound to occur. This is a big task because there are too many regulations, and many of them are conflicting. The right type of contract must be chosen for the work to be done, for example fixed price contracts for the procurement of equipment that has not been developed are an invitation to disaster. The Defense Department must honestly and publicly support the industry program otherwise it could be turned into a tool for prosecution, investigation and the enforcement of unreasonable claims and thus be completely undermined.

 

“To summarize the situation, waste, fraud and abuse have been present in defense procurement for a long time. They have been dealt with by ever increasing legislation and regulation. There have  been more and more regulations, and recently a campaign to increase the enforcement of the regulations. None of this effort has reduced waste, fraud and abuse in defense procurement, in fact it is, particularly waste, worse than ever. In consideration of all aspects of this problem it appears that self governance is a better course for both the Department and the Industry, and regulation and legal action should be restricted to those areas where self governance clearly will not work. The adoption and self enforcement of codes of ethics will reduce the incentives for these bad practices in industry and at the same time stimulate better quality of work and lower cost products. It will encourage trust and cooperation between the department and its Contractors and this will reduce the time needed to put high technology weapons in the field. The people of the United States have every reason to expect their Defense Department and their Congress as well as their defense industry to establish and maintain the highest ethical standards in providing the military strength to support the leadership of the United States in the affairs of the world. I hope the Thomas Jefferson Research Center will continue its strong support of good ethical behavior in the Defense Department and throughout our entire society.”

 

3/8/88, Copy of a letter from Packard to John F. Welch, Jr.,. GE, enclosing a copy of this speech

3/15/88, Letter to Packard from Paul W. McCracken saying his speech was ‘right on’.

3/10/88, Note, presumably typed by Packard’s secretary, saying copies his speech have been sent to all members of the Armed Services committee in the Senate of the House. Lists of these people are attached.

3/23/88, Letter to Packard from Frank Carlucci, Secretary of Defense, thanking him for the copy of his speech. Mr. Carlucci says “You are right, I endorse the approach.’ He encourages Packard to keep speaking out.

3/25/88, Letter to Packard from Nicholas F. Brady thanking him for the copy of his speech

4/4/88, Letter to Packard from Bill Nichols, Chairman, House Committee on Armed Services. He says ‘I appreciate receiving a copy of your recent speech on ethics in defense procurement. I agree that the defense industry needs to develop comprehensive and self-governing codes of behavior. Nevertheless, I believe that such a program will not supplant the need for appropriate laws, regulations and enforcement mechanisms from outside the industry and that the Congress has a duty to develop the necessary laws and to conduct oversight as to their enforcement and observance.’

4/11/88, Letter to Packard from Samuel S. Stratton, member House Committee on Armed Services, saying his views are outstanding, and they are trying to uphold the goals to which he refers.

4/12/88, Letter to Packard from Senator Strom Thurmond, member of the Committee on Armed Services, thanking him for the copy of his speech. He says ‘While fraud should not be excused, we must remember that human frailty plays a major role in such mistakes. I applaud industry efforts to improve their performance, but I know that their response is largely due to the outstanding work you did with the Packard commission. We all owe you a debt of gratitude for all you have done.’

4/12/88, Letter to Packard from Sanford N. McDonnell, Chairman Emeritus, McConnell Douglas  company, thanking him for the copy of his speech. He also thanks him ‘on behalf of industry for pushing the Defense Industry Initiative of Self-Governance.

5/4/88, Letter to Packard from Carla A. Hills complimenting him on his speech. ‘Absolutely first rate,’ she says.

 

 

Box 5, Folder 28 – General Speeches

 

March 22, 1988 – Philanthropy in America, East Bay Community Foundation 60th Anniversary, Berkeley, CA

 

3/22/88, Copy of the typewritten text of Packard’s speech

 

After congratulating the members on their Anniversary and the good work they are doing, Packard says he “…appreciates the opportunity to make some observations about the importance of private philanthropy with the hope it will encourage additional support for your fine organization.

 

Packard takes a moment to give his audience the definition of philanthropy, saying “The word comes from the derivation of a Greek word which means ‘lover of mankind’, and has come to mean an action or an institution designed to promote human welfare….We commonly speak of Charitable Foundations. The word Charity comes from a Latin word …love and thus the words Philanthropy and Charity mean essentially the same thing, Brotherly Love.

 

“Charitable Foundations,” he says, “have existed since ancient times.” And Packard says he found in the Encyclopedia that Renaissance merchants created numerous foundations for educational and charitable purposes. And he says he learned they were criticized by Adam Smith for their poor management.

 

Packard observes that there were few Charitable Foundations in the United States before the 20th century when their growth was prolific. “The conquest of America, from the establishment of the early colonies on the east coast to the Westward Movement of people across the continent provided a rather special ground for the expansion of charitable activity….The various church groups established hospitals, schools and universities, as well as providing help for the poor.”

 

Packard tells of recently receiving information from the Historical Society in Pueblo Colorado, his home town, describing the establishment of a hospital their in 1881. A newspaper at the time drew attention to the ‘suffering’ of tent dwellers in the town and asked if were any Christian Ladies association which would ‘take the matter in hand.’  Packard says “The Christian ladies did step forward [and]established the ladies Benefit Union which included ladies from all of the churches in Pueblo…”

 

“Although there has been a great expansion in charitable activity in this century  I have the impression that the major priorities have not changed very much. Religion has had the highest priority over the centuries, and religion still receives the largest amount of charitable support today. The care of the ill, hospitals and medical activity to relieve suffering and to save people from dying has also, historically had  high priority and receives the next to the highest amount of charitable support today.”

 

Since the 1960s there has been a tremendous increase in Federal outlays for a wide range of activities intended to improve the quality of life in our country. Direct Benefit Payments for individuals for the fiscal year 1989 are expected to take 43% of the federal budget, well over 400 billions of dollars. This compares with National Defense at 27%, or just under 300 billions of dollars. These domestic payments include Social Security, Medicare, Unemployment compensation, Civil Service Retirement, Veterans Pensions, Temporary Employment Assistance, Medicaid, aid to families with Dependent children, supplemental security Income, food Stamps, Public Housing, and Child Nutrition. These major programs are nearly all over ten billion dollars each. In addition there are dozens of other federal programs in the realm of Public Charity.  National endowment for the Arts and for the Humanities on and on ad-finitum. [sic] As one looks at the magnitude and breadth of this Public Charity program in the United States one should wonder what is left for Private Charity, yet Private Charity has been increasing about as rapidly as Public Charity.

 

“There are several reasons why there continues to be an important role for Private Charity from both Individuals and Corporations. Probably the most important is that these federal Programs are not doing what they are intended to do and this is quite obvious to people at the local level. Your foundation funds programs in the Arts, in community Services, in Education, help for seniors, help for Youth, and Health and in other areas that receive substantial federal money. The level of your support is not large but the good that you do is very substantial. You know from personal knowledge where the money will be most useful, and the involvement of people who care, your members, your staff and your donors is often as important as the money you provide.

 

The second reason why people who are concerned want to become involved on a personal basis is because they are very troubled about the waste and mismanagement of the Federal Programs. These are Pork Barrels for the members of the Congress, the are riddled with red-tape, and the funds are appropriated not in accordance with the real needs but all too often on the basis of the most effective lobbies.

 

“I have seen some of these things from within the Federal Government, and I have been involved with a number of charitable activities in the private sector. From my personal experience I feel very strongly that community foundations such as yours play a very important role in improving the quality of life in our Country.

 

“I have noted that your Foundation receives contributions from corporations. Charitable contributions by corporations in the United States is a recent , but very important, development. Before 1950 it had not been clearly established that a business corporation had the authority to make a charitable gift. I can recall discussions among groups of corporate leaders in the 1940s that questioned whether they had any responsibility beyond tha5t to their shareholders. Many thought labor was merely a commodity to be bought and sold on the open market, and that Charity had no place in corporate affairs. There was an important change in corporate thinking after World War II, and some of the enlightened leaders began to make charitable contributions to universities and other private institutions. Such contributions were challenged in a legal action, A. P. Smith Mfg. Company vs. Barlow that went to the Supreme Court. In the year 1953 the authority to make charitable gifts when the gift would advance the general interests of the corporation and its shareholders. The tax laws were changed to allow the deduction of charitable contributions up to 5% of profits before taxes. During the following years corporations developed a rationale for charitable contributions but very few made contributions up to the 5% limit, about 1% of profits before taxes was the average for a number of years. The general rationale was established on the theory that the success of a corporation was influenced by the social environment in which it operated and that theory is widely accepted today. The quality of education in both the local community and in the nation came to be considered important by corporate management, and this will become even more important as we move further into an economy based on knowledge rather than raw materials, energy supply, and transportation. Corporate charity has now become legitimate for essentially everything that will improve the quality of life in the community, and is an important source of support for your Foundation.

 

“Although the rational and legal base for corporate contributions has been firmly established the actual level of giving, in my opinion, is not as high as it should be. Many new companies are simply too busy with other important things.. I think this is an area of opportunity for this foundation to do some educational, missionary work if you will, with the companies in your community. You can provide services the smaller companies need to establish a good company contributions program, With your record of fine performance you should continue to receive good support from the larger companies in your community.

 

“There is another recent development that I want to bring to your attention. That is cooperation between the Public Sector and the Private Sector in charitable activity. The wolf Trap Foundation for the Performing Arts in Washington D.C. which is operated by a private foundation with substantial funding from the National Park Service is a good example. There are may other examples, some here in the local area. Discussions with officials in the cities and counties where you operate could be mutually beneficial.

 

“There are other things I could talk about in regard to community Foundations such as yours. Because of the time, however, I will close by simply saying to all of you who are involved in the East Bay Community Foundation  Happy Anniversary! You are doing a great job, keep up the good work.”

 

3/22/88, Printed program for the Celebration

Undated, Typewritten note from Margaret Paull, Packard’s secretary, providing information from the encyclopedia on the Supreme Court case concerning the right of corporation to contribute money for charitable purposes.

 

 

Box 5, Folder 28A – General speeches

 

April 15, 1988, Remarks at Arnold and Mabel Dinner, celetrating their gift of the Beckman Center.  No location given but likely at the Center in Irvine CA.

 

4/15/88, Copy of typewritten text of speech

 

Packard says he is “pleased to join the audience in thanking Arnold and Mabel Beckman for their wonderful gift of a Center for the National Academies of Science and Engineering here on the west coast. And he adds that he is especially pleased because “I think it is about time someone recognized that not all of the scientific knowledge and wisdom in the United States resides in Washington D.C. or any where else on the east coast.”

 

He acknowledges that “the Company [Arnold Beckman] founded in 1935 served in many ways as a model for Bill Hewlett and me when we decided to start our own company in 1939. Although Bill and I did not know Arnold at the time we started our company, we did know about his company and his success was a great inspiration to us. It was only recently I learned that Mabel kept the books for their new firm just as my wife, Lucile, kept books for our new firm four years later. In a very real sense many companies have been trying to follow in Arnold’s footsteps, but he has had a long and energetic stride in everything he has done, and has remained a leader throughout his remarkable career.

 

Noting that Beckman’s life has spanned the entire twentieth century, Packard says he “found it very interesting to go back and review some of the exciting things that have happened since [Arnold Beckman] was born in the month of April, 88 years ago. Electrical power distribution in the United States had begun only four years before Arnold’s birthday and the Olds Motor Works proudly displayed six different models of the horseless carriage to be sold during Arnold’s first year of life. Steam railroads were still the main means of mechanical transportation on land, the automobile industry, and aviation were just in their beginning stages. Wireless transmission had been demonstrated a few years before Arnold was born, but it would take a few years more before voice or music could be transmitted and received. Arnold was eight years old when Lee De Forest invented the vacuum tube in Palo Alto, but he was twenty years old before vacuum tubes began to be widely applied in radio broadcasting and in radio receivers.”

 

Beckman earned his BS from the University of Illinois in 1922, and his MS Degree in 1923, and Packard tells how he became a research associate in the Bell Laboratories in 1924, “a time when some of the most important research in electrical communication theory was being done.” Beckman received his Ph.D from Cal Tech in 1928.

 

Packard says it is quite likely that the depression of the early thirties had an “important influence on his decision to establish his own company in 1935 to develop instrumentation for the field of chemistry. The success of the Beckman Instrument company is ample evidence,” Packard says, “of Arnold’s expertise in his professional field. But he brought to that company not only technical expertise but, even more important, a commitment to excellence in every aspect of the company’s work, and in every aspect of his own life.

 

“…Arnold has been an outstanding citizen of his local community and of our Nation. He was responsible for bringing Bill Shockley to northern California and thus he played a key role in the development of Silicon Valley. He was the president of the California Chamber of commerce in 1967 and 1968, and was very influential in helping to shape California’s favorable environment for high technology industry. At the national level he was a member of the President’s Air Quality Board from 1970 to 1974, and his advice has been requested on many occasions by Presidents and by the Congress. He is a member of numerous  scientific societies and of the National Academy of Engineering, to mention only a few of his many activities.

 

“We are here tonight to thank Arnold and Mabel Beckman for this wonderful gift of the Beckman Center, but also to honor them as two of the great citizens of the twentieth century.”

 

Thinking about the progress of technology over the past 88 years Packard says “…there has been much speculation about what is likely to come about in the twenty-first century. Will young people in the United States have the same opportunity in the next century that Arnold and Mabel had in their Century? Can the United States maintain its important lead in technology, and what can be done to make this happen? I know we can learn from the experience of our honorees.”

 

Two factors were essential in Arnold’s success, Packard says, “…a close association with university research at the frontiers of science, and a superb education at two of the nation’s outstanding research universities. I believe it is quite evident from the record of technical progress in the United States during the twentieth century that the advancement of knowledge by university research and the education of scientists and engineers by our universities have been two of the basic foundation building stones of the United States’ leadership in technology over the entire twentieth century These are building stones that must be maintained and strengthened if we are to keep our leadership over the next century.”

 

However, Packard sees some “troubling developments” within American universities. “They are having difficulty keeping the best people on their faculties, and all too many young people in the United States are dropping their graduate education for more lucrative jobs in industry. Federal support for universities, while it is still quite large, has become inefficient. Faculty people spend far too much time applying for Federal grants and reporting on how the money was used. Federal grants are also uncertain in timing and thus make it difficult to achieve the continuity of research effort by faculty members. It is often said that a faculty appointment to do research work is little more than a hunting license for Federal funds. These are problems that must be corrected and to correct them will require some hard work in the political arena.

 

“As most of you know, our primary and secondary educational system is also in serious trouble today. This trouble is the result of decisions made in the 1960s to convert our educational establishment from its dedication to education to a dedication to social reform. The adoption of racial quotas, bussing to obtain racial balance in the schools, and promoting and graduating students who had not met the educational goals required of others, were a disservice to those who needed help as well as damaging to the quality of education in the United States.”

 

Packard also sees that the world itself has changed, “in many important and irreversible ways,” during the past 88 years. “In 1900 it took days to cross the Atlantic Ocean and weeks to travel around the world. Communication was largely by letter and it took considerable time and study to know what was going on in other counties. Today, we can see much of what is happening anywhere in the world while it is still happening, and we can be in any major city in the world in only a few hours. The twenty-first century will be an international century. Leadership in international affairs will be a basic ingredient of success, whether in political affairs or in business. It is the height of folly to think the United States can isolate itself from the rest of the world with trade barriers and continue to have a healthy economy. I should note that by 1980 the Beckman company’s international business was already over fifty percent of its domestic business and was growing faster. More than half of Hewlett-Packard’s business is now in international markets and we compete successfully with dozens of firms from other countries in nearly every aspect of our business.”

 

Packard points to another major change in high technology business that has taken place since Arnold Beckman started his company. “All electronic products have become much more complex and much more capital is now required to start a new business. I do not know how much capital Dr. Beckman had to start his company in 1935 but not very much was needed, a few thousands of dollars would have been quite adequate. Today very expensive equipment, and very expensive facilities are required,  investments in the millions of dollars are needed to start a new company.”

 

On the other hand, Packard says some things needed to start a high technology company have not changed. “Vision to see that something new is possible, hard work and determination to bring that vision to life, and a dedication to integrity are still immutable elements of success that Arnold brought to his work in large measure. These will continue to be essential elements of success for every business endeavor in the next century as well.

 

“Many people,” Packard says, “are asking the Federal Government to take whatever action is necessary to insure that the United States maintains its leadership in high technology and keeps a competitive advantage in the world economy. You may already be able to judge from what I have said that there are some things the Federal government should do, in fact must do. The first is to restore the heath of our universities. This requires more attractive support for university research, and better incentives for our young people to continue their graduate education. The Federal Government can also help in obtaining better education at the primary and secondary level for all our young people in mathematics and science, as well as in the arts and humanities. This will require more thoughtful participation of parents and people in the local community, not just more money from Washington.

 

“Second, the Federal Government must continue to make venture capital available for the obvious reason that innovation has become very expensive in many important fields. This really means that the tax on capital gains should be lower than the tax on income from investments which have little or no risk in losing capital. In recent years there has been too much venture capital driven by the desire to make a fast buck rather than to create something of value. A holding period of at least one year should be imposed on new venture capital to reduce the speculative pressures but new venture capital will continue to be important.

 

“Third, the Federal Government, recognizing that high technology business will be competing in the world wide economy, must take whatever steps as may be necessary to maintain a ‘level playing field’ for U.S. business firms in the world wide economy. This, like many other things, is easier said than done. A level playing field for one industry may be a steep uphill slope for another. It is essential that the Congress address the trade issue on a broad, objective basis, not simply on the basis of what has been happening to a particular industry in a local district or state.”

 

In a contrary vein, Packard believes some of the things the Federal Government is trying to do don’t make “any sense at all. “The Federal Government’s support of special programs like Semitek.” he says, “is a complete waste of not only the taxpayers money, but the waste of valuable scientific talent as well. Federal support of efforts to put more emphasis on manufacturing technology are also in my view a waste of time and money. Manufacturing technology is available in abundant supply for anyone who wants it. What we need is a change in the attitude of the leaders of U.S. industry. When they decide that manufacturing [technology] is important they can find it and put it in place with no great difficulty.

 

“In conclusion, I want to say again that it has been a great privilege for me to be with you tonight to honor Arnold and Mabel Beckman, and to thank them for their magnificent gift of the Beckman Center. And as we approach the end of the twentieth century I hope we can learn from the great things they have done for us throughout this century. They will continue to be an inspiration to all to try to do what can be done to make equally exciting and productive opportunities for those who will follow in the next century.”

 

4/25/88, Copy of a letter from Packard to Dr. Arnold Beckman sending him a copy of the remarks he intends to give at the Beckman Center.

 

 

Box 5, Folder 29 – General Speeches

 

June 4, 1988, Commencement Address, Santa Clara University, Santa Clara, CA

 

6/4/88, Copy of typewritten text of Packard’s speech

 

Clipped to this            this copy is a note to Packard from his secretary, asking if it is OK “to send Santa Clara U a copy of your speech (as attached)… they wish to put some quotes in one of their publications….Then on the note is a handwritten answer from Packard which says “I was going to edit this but I will not have time –send it as is.”

In his commencement speech Packard congratulates the graduates and also  the faculty, President Rewak, and the members of the administration who “have worked so hard during the past few years to raise the University of Santa Clara to such a high standard of excellence.

 

“In several way,” Packard says, “this University has made an unusual contribution to the young men and women who have studied here. Those who have attended the academic programs have had the benefit of inspiring teachers, and of courses that have been kept at the frontiers of knowledge in all of the disciplines involved. Equally important, I believe the University of Santa Clara has been able to instill a real understanding of the importance of personal integrity, a commitment to honesty, fair play, and personal responsibility, in its students more effectively than many other of our great universities today. I am quite certain that all of you who are graduating here today will in the years to come realize that the two most important assets you will ever have are your knowledge and your integrity. The store of knowledge available to you will continue to expand for as long as you live and you must continue to study and learn as much as you can wherever your future life may lead. Your integrity on the other hand is an invariant and must be protected with unfailing determination from whatever temptations you may encounter.

 

“54 years have gone by since I received by undergraduate degree from Stanford in 1934. I do not remember who the commencement speaker was that year and I do not have the slightest idea what he or she said. I assure you I expect no more of you who are here today. Commencement speakers are expected to deliver a message that will be useful or at least interesting to the graduating class, or to use the platform to deliver a message of importance to the community at large. I have given a certain amount of thought about how I could fulfill either of these responsibilities here today.

 

My first impulse was to do some speculating about what the future, say the first half of the twentieth [sic] century, might hold for you in your professional careers. Engineering, business management, and education, are all areas in which I have been involved over many years, and are areas where I understand many of you who are graduating here today plan to do your work. But then I thought about how a prediction accurately describing what has actually happened in the 54 years since my graduation in 1934 would have been perceived by my graduating class at that time. Predictions about the development of television, further refinements of the automobile, and the development of better aeroplanes would have sounded reasonable. Predictions that a man would be landed on the moon and brought back safely would have been considered completely incredible. That nuclear weapons powerful enough to destroy the major cities and much of the population of the world  in the matter of just a few hours might have been considered possible by those students who had taken a course in physics. Predictions that it would be possible to put a million active elements, each roughly equivalent to a vacuum tube of that day, on a single chip of silicon the size of one’s finger nail would have been considered impossible even by those of us who had studied electronics. Predictions of the amazing developments that have been made in medicine, that all but three of the most common diseases would be brought under control, and that life expectancy would be doubled in the twentieth century, or that we would be able to control the genetic development of plants and animals rapidly and with predictable results would have been received with great skepticism. Anyone making some of these predictions in 1934 would, to say the least, have had a serious problem in credibility.”

 

Packard tells his audience that while he was at Stanford he had the opportunity to study a course in American History, and engage in some independent study about the westward movement of the United States. Living in Colorado he read with great interest about the finding of gold, establishing great ranches, fighting off Indian raids and so on. He says he decided, back then in 1934, that he had been born 100 years too late. “I had missed all the challenge and excitement and would have to look forward to little more than a mundane career as a professional engineer.”

 

Packard says he and Bill Hewlett had already decided that they would start their own business immediately after graduation if they couldn’t get a job first to obtain some practical experience. Packard tells of obtaining a job with General Electric Company in Schenectady, New York. Arriving in Schenectady he looked for a job in radio engineering or electronics. However, when the advisor at GE heard of this Packard says he explained that there was no future in electronics. “He advised me,” Packard says, “to take an assignment in a department working on motors or generators, electric railroad engines or power generating plants, or in several other areas where he thought there might be a good opportunity for me. Needless to say I did not take his advice but rather found a job in the Vacuum Tube Engineering department where I had an interesting time for three years and learned a great deal that turned out to be very useful when we started our company in 1939.”

 

“While I did decide against making any very specific predictions about what the future might hold for you who are graduating here today, I strongly believe that the challenges and opportunities for you will be much greater than they were for me and my classmates in 1934 –  if for no other reason than that you will be starting from a much higher level of both intellectual and economic activity.

 

“Without any doubt the twentieth century will become known as the Century of America, the century when the United States became the strongest country in the world and assumed the leadership of the free world. It is important to note that our country did not actively seek this position of leadership it was thrust on us by default. Since the middle of this century, after the devastation of world War II, there were only two countries strong enough to exert substantial leadership in the world, the United States and the Soviet Union. Unfortunately President Roosevelt and his advisors failed to understand the motivation and intent of Stalin and the Soviet Union at the end of the war and the seeds of the cold war were thus planted with the help of our own leaders. This was not surprising for the current of isolationism has run strong in the United States since the early days of our history. Woodrow Wilson had offered an enlightened plan of leadership after World War I only to be shot down by the isolationists in the Congress. There are still very strong currents of isolationism running in our country as we come to the end of this century.

 

“There are two very important developments going on in the world today that are likely to threaten the world leadership of the United States and certainly will have an impact on the careers of you who are graduating today.

 

“The first development is the result of the tremendous pace of world wide communication and world wide travel. We have now reached the point that no major business enterprise can hope to be successful unless it is prepared to compete in the world wide market place.

 

“The second important development is that communism has finally been recognized as a complete failure in providing the economic benefits it promised its people as well as a complete failure in the economic competition it predicted for the free enterprise system. This is what the changes going on in Mainland China are all about. This is what the successes of economic development in Korea, Taiwan, Hong Kong, Singapore, and of course Japan are all about.

 

“It would be utter folly to predict that these changes will bring about a ‘Brave New World’ in any short period of time. Forces of isolation will continue to be active in the United States and there will be pressures on the Congress to protect domestic business from foreign competition. Socialistic pressures will continue to encourage the Congress to distribute the tax dollars you pay to those who are unwilling or unable to support themselves. The leadership and the entrenched bureaucracy in the Soviet Union may not yet be ready to admit the failure of their system. I think however the die has been cast and it is now only a matter of time before there are some real changes in the world that come from the changes in the forces that influence the relationship among the nations of the world.

 

“Even if these changes going on in the world are for real it does not imply that the leadership position of the United States will improve or that our historical relationship with Western Europe will be as important in the future as it has been in the past. The gross national production of the countries on the western rim of the Pacific is increasing at over twice the rate of that in the United States and the countries in Europe, and they are achieving considerable success at the forefront of high technology. If the present trends continue the markets of the Western Pacific nations will be larger than the markets of the European Nations in less than ten years and their technology could be at a higher level. The economy of the United States will still be the largest and most attractive in the world until the end of this century but if we continue to look inward our world leadership position will certainly continue to decline.

 

“There is certainly no manifest destiny to determine the continuing world leadership of the United States. This is a challenge and a burden that will fall largely on the shoulders of your generation. There will continue to be conflict and change in the world of your time, for there is little evidence that human nature has changed in any significant way. There is however a very good chance that we are at the beginning of a watershed change in the world along the general lines I have outlined. If so you are in for a very exciting and challenging experience in the years that lie ahead.

 

“Good luck and God bless you each and every one.”

 

 

6/4/88, Copy of the printed program for the Graduate Commencement

4/5/88, Letter to Packard from William J. Rewak, S.C. President  inviting him to be the commencement speaker and receive an honorary degree

4/25/88, Copy of a letter from Packard to President Rewak accepting his invitation to speak at the commencement exercises

4/24/85, Copy of a letter to Packard from President Rewak thanking him for his pledge of $1,250,000. He says they plan to use the money “to award fellowships to persons who are recent recipients of doctoral degrees.

4/30/88, Copy of the printed program for a dinner in recognition of President Rewak who is resigning his post at Santa Clara University

5/1/88, Copy of a letter to Packard from President Rewak giving some details related to the commencement ceremony

5/3/88, Memo to Packard from HP VP Bill Terry saying he was very pleased Packard was able to accept the invitation to speak at the commencement

5/13/88, Letter to Packard from Kenneth E. Haughton, Dean of the Engineering School, inviting Packard to have lunch with the staff

6/17/88, Letter to Packard from President Rewak thanking him for speaking at the commencement and for his “generous support of Santa Clara over the years”

 

Newspaper clippings:

5/25/88, From unnamed paper announcing that Packard will be the commencement speaker

6/4/88, From the Times Tribune covering Packard’s speech

 

 

Box 5, Folder 30 – General Speeches

 

July 14, 1988, Lessons We Have Not Learned in the Procurement of Military Weapons and Equipment, Acquisition Leadership Conference of the Defense Systems Management College, Ft. Belvoir, VA

 

See speech dated March 26, 1986 for complete list of speeches covering work of the Commission

 

7/14/88, Copy of the typewritten text of Packard’s speech

 

Packard says it is a special occasion for him to be here at the Defense Systems Management College “because I was involved in the establishment of this [college] when I was the Deputy Secretary of Defense some 18 years ago.”

 

He says the College was established “because it is absolutely essential to have an adequate number of men and women thoroughly knowledgeable about the complex and important work of military research and development and procurement. The College has done an excellent job in the role we envisioned for it ever since it was established. The role of the College is more important today than it was when it was founded, because Defense Procurement has become much more complex and more demanding of the people who are involved than it was 18 years ago.

 

Packard congratulates [Defense] Secretary [Frank] Carlucci for sponsoring this conference, and also Under Secretary [Robert] Costello for developing the “excellent” agenda for the meeting. “I also want all of you to know how much I appreciate the invitation to be with you here today.”

 

Packard mentions the President’s Blue Ribbon Commission on Defense Management which he chaired in 1985, and says “…it is frankly embarrassing to often receive more credit than I deserve. The report of the Commission…was not a report on my personal recommendations but a consensus of the recommendations of all of the members of the Commission. Every member of the Commission contributed and Secretary Carlucci was one of the most effective members of all.”

 

Packard says there has been some progress in implementing the Commission’s recommendations, but he adds that “the recent disclosures about the extensive investigation of defense procurement emphasizes the fact that our country still has a problem of major dimension n the management of the Defense Department and the Defense Industry, despite a great deal of effort over nearly three decades to improve the situation.”

 

Saying that although he was not able to attend any of the  discussions taking place at the conference earlier in the day, he says he will .“make some observations about how I see the progress that has been made. My remarks will be strictly my personal views, I have not discussed them with any other member of the Commission. I will try to cover most of the issues you have on the agenda for the day, and I understand there will be time for discussion after my formal remarks so we can pick up issues that I have missed, and time for rebuttal if you do not agree with what I have said.

 

“In considering what can be done to achieve real improvement in Defense Acquisition, it is essential,: he says, “to understand that the examples of fraud and connivance that have recently been disclosed as well as many of such examples that have come to light in the past are not the problems but rather are symptoms of the problems.

 

“The real cause of the problems that we attempted to deal with in the work of the Commission and that have been highlighted in recent reports is that defense procurement has been micromanaged to death, and in effect criminalized during the past seven years by the combined actions of the Defense Department and the Congress. It is hard to understand how this came about during an administration dedicated to free enterprise. The actions that have been taken in defense procurement by the Administration and the Congress, assigning inspector generals to the acquisition business, bringing criminal action against people like Jim Beggs, wiretapping offices in the Defense Department and the Defense industry, and such are actions that would be taken in the most tyrannical type of a police state. Such actions are the antithesis of the very fundamental concepts of a free society and a free enterprise economy. It is very hard for me to understand how this came about during an administration dedicated to free enterprise.

 

“In my opinion, the Congress has been the major cause of this disastrous situation, but the Department must share the blame. Together, they have created an environment in which honest and efficient military acquisition is impossible to implement.”

 

Packard quotes some passages from a report prepared by a law firm [McKenna, Conner, and Cuneo] which he says “has had more experience in DOD acquisition affairs than almost any other law firm in the country:

 

‘Over the past seven years,’ the report says, ‘we have seen both a rapid growth in defense spending and an even more dramatic growth in the imposition of new laws and regulations on the Aerospace and Defense Industry. In fact, there have been more changes in laws and regulations affecting the industry in the last seven years than there had been in the proceeding twenty five years.

 

‘Congress has not come to grips with the nature and the dimension of their responsibility. First it loudly proclaims that the industry should be guided by the principles of free enterprise, capitalism and competition which have shaped all industry in our country. Then it sets out to legislate and regulate the industry to such a profound extent as to make the application of these principles utterly impossible.’

 

Continuing with his speech, Packard says “The DOD and the Defense Industry must also share the blame for this disastrous situation but they are the actors on the stage that has been designed and put in place by the Congress. Unless the procedures can be changed to put the incentives back in the right place for the DOD and for the Defense Industry the situation will only continue to deteriorate. I say this despite the fact that I know there are an encouraging number of areas of significant improvement including those on the agenda today.”

 

“I do not have any simple solution to propose,” Packard says. “In fact, I do not believe there is a simple solution. I am sure, however, that Defense Procurement can be put back on the right track but it will require continuing attention to the issues you are discussing here today to implement them effectively. Real and lasting improvement will also require better cooperation among all of the parties involved the congress, the Department, and the Industry. The Congress is in many ways the key element in this problem. Let me emphasize again, unless there is a major change in the attitude and the actions of the Congress there is absolutely no possibility that this country can ever have an efficient military acquisition system.”

 

“As you know, there have been many studies of this problem. One of the latest was The President’s Blue Ribbon Commission on Defense Management, which I chaired and which made its recommendations to The President in June of 1986. There have been numerous other studies over the past twenty-five years and they nearly all have made similar recommendations. Professor J. Ronald Fox, a member of the Harvard Graduate School of Business, has devoted his career to this subject. He makes a number of important observations and recommendations in his recent book entitled The Defense Management Challenge. He notes that studies on this subject repeatedly urged Congress and the Defense Department to correct five basic deficiencies: [Packard quotes from Professor Fox’s book.]

 

  1. ‘Setting requirements for the most sophisticated systems attainable often irrespective of cost;
  2. Underestimating schedules and costs of major programs, distorting the decision making process for the allocation of the national budget; [ Packard adds “deliberately doing so.”]
  3. Changes in programs and contract requirements caused by changes in military user preferences, leading to annual or more frequent changes in program funding levels, initiated by Congress and the DOD itself;
  4. Lack of incentives for contractors and government personnel to reduce program costs; and
  5. Failure to develop sufficient numbers of military and civilian personnel with training and experience in business management and in dealing with industrial firms to oversee the development and production of enormous, highly technical industrial programs.’

 

Packard continues, saying “I realize that all five of these issues are being covered in your agenda today, but I want to make some observations about them on the basis of the recommendations of our Commission.

 

“One of the most important recommendations of our commission was on National Security Planning and Budgeting which relates to setting the requirements, and minimizing the changes in programs and funding levels. The Commission defined the problem as follows:-

 

‘Today there is no rational system whereby the Executive Branch and the Congress reach coherent and enduring agreement on national military strategy, the forces to carry it out, and the funding that should be provided – in light of the overall economy and competing claims on national resources. The absence of such a system contributes substantially to the instability and uncertainty that plague our defense programs. These cause imbalances in our military forces and increase the costs of procuring military equipment.’

 

“This subject was discussed extensively with people in DOD and in the Congress during the course of the Commission’s work. There are several facets to this problem. One is the lack of adequate consideration by both the Executive Branch and the Congress as to what our world wide military strategy should be, a second is the pressures of the military services to promote their individual strategies and their pet weapons, and the third is the practice of the Congress to appropriate funds that are not wanted or needed by DOD or the Military Services. This ‘PORK BARREL’ practice by the Congress causes a very large waste of funds in the procurement system. It is probably the largest waste of all if the military base issue is included. This is certainly a waste of the taxpayer’s money, far larger than any possible waste that might have been caused by the current scandal

 

Packard cites some actions that have been taken to address this problem. “The role of the Chairman of the Joint Chiefs has been strengthened so that he now has adequate authority to exert a positive influence in developing a ‘Coherent and enduring’ national military strategy. He also has the authority to over ride the other Joint chiefs in deciding what military weapons and systems to procure. This is an important step in the right direction but nothing significant has come of it yet.  The Commission On Integrated Long-Term Strategy has developed an excellent report on this issue, entitled Discriminate Deterrence, which seems to me to be a good start in developing a coherent National Military Strategy, but I have not heard about any serious discussion of this proposal or any other proposal that will do what the Commission recommended. I have not seen any evidence either that the Chairman in his new role has had much influence in getting the services to put the interest of the Country ahead of their own self interest.

 

Packard says that the Commission expected it would take some time for the Chairman to do the important things in his new role – developing the staff, overcoming bureaucratic tradition – and the strong support of the President, the Secretary of Defense, and the Congress would be required. “The Commission knew it would take time, measured in years not months, but we thought it would be a very positive development and have a very high pay off for the benefit of our country. I can not give anyone very high marks for the implementation of this important recommendation of the Commission so far.

 

“Multi-year funding is absolutely necessary to implement enduring agreement on military forces, and as I am sure you know billions of dollars would be saved. There has been some support for multi-year funding by the armed service committees, but the appropriation committees have adamantly refused to consider multi-year funding. The excuse they use is that there are so many problems in defense procurement that the Defense Department can not be trusted and must be monitored year by year. The real reason the Congress will not approve multi-year funding is that to do so would severely limit their ‘pork barrel’ opportunities. I can see only one way to deal with the selfish ‘PORK BARREL’ practices of the  Congress. They must be brought to the attention of the people all across the country. If the voters can be made aware of the magnitude and the seriousness of this problem perhaps it an be brought under better control.

 

Packard sees another “devastating effect of this disgraceful Congressional practice. It is absolutely unethical behavior. How can the Congress expect ethical behavior from the DOD and the Defense Industry when it sets such a bad example of ethical behavior at the top!”

 

Packard talks a bit about another recommendation of the Commission having to do with the need for the DOD to “attract, retain, and motivate well qualified acquisition personnel.”

 

He says he believes “the involvement of military people in acquisition is essential but if they are involved they must be officers who have opted for a career in procurement. The McKenna , Conner & Cuneo report puts it this way: ‘It has become quite clear that the DOD acquisition process is far too complex to be managed by military non-careerists who will be rotated to other unrelated assignments as often as every two years; no amount of intensive training will equip such individuals …to cope with the process.’

 

Packard adds that “In my opinion the same principle applies to lawyers at the Secretarial level. That was essentially the reason the Commission recommended the establishment of an Under Secretary position to be filled by a person with appropriate experience to oversee the entire military acquisition process. That office has been established and it is occupied by a capable person. Bob Costello is doing a fine job, but here again time will be required, probably measured in years rather than months to do what the Commission hoped could be done.”

 

In considering the number of people involved in military procurement, Packard refers to the conference paper entitled “Assessment of the similarities/differences between the service acquisition organization.’ He says that this title “indicates to me that you do not even understand the problem. To have three or four chains of command involved in a service acquisition organization is manifestly absurd. The Commission intended to give you the message that there should be only one, and apparently you did not get the message. We realized that our recommendations would require some major changes from past practice, and that it would be difficult for people in the services to face up to a major change from what they have been doing in the past. I think you have flunked out on this issue.”

 

Packard says “I now think the only way to deal with this issue is to recommend to the Congress that they mandate at least a 20% reduction in the number of people in DOD and in the Services who are involved in procurement.. I am absolutely sure you would do a better job with 20% fewer people.”

 

“I would also recommend a corresponding cut in the staff levels of the relevant Congressional Committees. How to get such a reduction is another question, especially since the recent trends are all in the opposite direction. Perhaps it would be possible to get both of the Presidential candidates to include in their platforms this election year the recommendation to support such a reduction in both Defense procurement people and Congressional staff of Defense committees.

 

Packard says he does not like to be so “…negative about the progress that has been made in implementing the Commission’s recommendations because I know you have made many positive steps in the right direction but they do not get at the heart of the problem. The breakdown of the procurement system is caused by two things, the attempt by the Congress to impose competition in a situation in which real competition in the conventional context is virtually impossible to achieve, and to try to impose it by a myriad of unrealistic rules and regulations enforced by ‘police state’ tactics.

 

“The question about how to manage the development and production of major military weapons and systems has been a major priority of every Secretary of Defense since 1960. The McNamara solution was ‘total package procurement.’ This appeared to be an obvious solution, get a bid for the whole job at the beginning and then hold the contractor responsible. The problem was, and is, that it is impossible for anyone to know how much it is going to cost to develop and produce a complex new weapon system that has never been built before. Contractors would bid or negotiate the best deal they could to get the job. I spent considerable time when I was at the Pentagon trying to resolve the problems that resulted from this approach. I visited several contractors who were in trouble, behind schedule and above cost on their programs. In several cases the work was in areas where I had some experience and after inspecting the work I usually met with the CEO of the company. In most cases I told him I was sure he must have known at the time he made the bid that the price was too low and the delivery time was too short. When I asked him why he did this the reply was almost always ‘That was the only way we could get the job.’

 

“The misplaced emphasis on competition which has been the recent practice has had the same result. I know you can cite substantial savings from this so called competition and some of it has been very real. On the big programs the competition is in brochurermanship, in meeting a bunch of ‘mickey mouse’ requirements that have absolutely nothing to do with selecting the most qualified firm to do the job. One could do just as good a job, as I have said many times, in awarding the major contracts by putting the names of qualified bidders on the wall and throwing darts. This would also save a lot of time and money.”

 

Packard looks at some of the other options for resolving the procurement problem at DOD. “It has been suggested that a completely civilian procurement organization be established to handle the procurement of all military weapons and systems for the services. This would be along the lines of the acquisition system used in Great Britain. Our Commission considered this option and concluded it was not a viable option. There would be severe political opposition, it would be hard to attract, keep, and motivate enough good people to do the job sell, given the existing civil service system. In addition, the British system does not work very well.

 

“It has been suggested that the defense industry should be nationalized, major production facilities converted into arsenals, owned by the government, but possibly operated by private companies in the same way some of our national laboratories are managed. This option would certainly have severe politician opposition and would be in the face [of] world wide trends in the opposite direction. I believe, however, there is a high probability this will be the only option available if the present practice of requiring contractors to make heavier investment of facilities, cost share research and development, and in the name of competition require programs to be broken down to uneconomical packages so there can be two producers instead of one. It has been estimated that the unfunded liabilities of the defense industry resulting from these practices are approaching ten billion dollars and under present contracting practices the industry has no possibility of generating funds to cover these liabilities.

 

“A much simpler option would be to go back to the contracting policies that have been used in the past. These would include cost plus contracts with incentives based on performance, and the use of prototyping to provide legitimate competition on smaller systems and sub-systems, and more extensive use of commercial products.

 

“ It seems to me the best solution would be to find an objective way to measure the performance of the defense contractors and to award contracts based on demonstrated performance, rather than on paperwork proposals. To do this it would be necessary to establish the rules to evaluate past performance. These would include actual cost compared to estimated cost, meeting delivery schedules, actual performance of the product, and other relevant verifiable data. An appropriate rating of the various factors would be needed. I would include the falsification of test data, of labor charges and other types of connivance or fraud as an absolute prohibition of any future contracts, for a year at the least and perhaps permanently. If such rules were established and the contractors knew about the rules and penalties when the contracts were awarded it would be  real incentive for better performances. Inspectors and auditors would still be needed but much fewer would be required. I am quite certain that a system along these lines would get the entire acquisition system on the right track, would provide our military forces with better equipment deployed more rapidly and at a lower cost.

 

“Under this approach all new major development programs would be awarded to a contractor that has a good record of past performance. In addition the contractor would also be disqualified for the production contract if he failed to meet established criteria in the development contract. I am convinced that a procurement program along these lines could be developed and that it would put the incentives for good performance in the right place. Fewer people would be needed in the DOD to manage such a program. It would be necessary for the Congress to get out of the micro-management business and the Congress would have to refrain from influencing or overriding the selection of the contractor by the DOD

 

“An acquisition program along these lines would not require a major change in the organization of DOD except to reduce the number of people involved with acquisition. It would not subtract from the need for better strategic planning, in fact it would give the DOD and the Congress more time to devote to strategic planning and it would still require program stability. Most important it could reduce or even eliminate the red tape and free the energy, enthusiasm and creativity of the talented people in the Defense Department and the Defense Industry to design and develop the best military equipment for our armed forces. I hope you people at this leadership conference will give serious consideration to an approach to defense acquisition along these lines.

 

“I want to conclude by saying that I know you are all here at this conference to explore together ways to do a better job in the acquisition business. I congratulate you on the good progress you have made, but as you can judge from what I have said while you have made a good start you still have a long way to go. Thank you for listening to me and now I will try to respond to your questions.”

 

4/25/88, Letter to Packard from Defense Secretary Frank Carlucci, telling him of the a one day Acquisition Leadership conference to be held at the Defense Systems Management College, to ‘decide which major issues need to be tackled next,’ and he invites Packard to be the luncheon speaker.

5/13/88, Copy of a letter from Packard to Secretary Carlucci accepting his invitation

9/28/88, Letter to Packard from Under Secretary of Defense Costello thanking him for his ‘outstanding contribution ‘ to the conference.

Undated page from Defense News covering Packard’s speech

 

 

Box 5, Folder 31 – General Speeches

 

July 22, 1988, Friday Afternoon Lakeside Talk on Lessons We Have Not Learned in Defense Acquisition Management, given at The Bohemian Grove, CA

 

7/22/88, Typed copy of the text of Packard’s speech

 

This speech covers the same ground as the preceding speech made on July 14, 1988, so we have not repeated it again. See speech dated March 26, 1986 for complete list of speeches covering work of the Commission.

 

No background letters or documents were in this folder.

 

 

Box 5, Folder 32 – General Speeches

 

July 27, 1988, Testimony before the Senate Armed Services Committee, Washington D. C.

 

7/27/88, Copy of typewritten text of Packard’s speech to this Senate Committee. Since his speech is almost identical with the July 14 speech, and others on the subject of the Commission on Defense Management, it is not detailed here again. See speech dated March 26, 1986 for complete list of speeches covering work of the Commission.

 

4/12/88, Copy of a letter from Packard to Lt. Gen. Brent Scowcroft and James Woolsey sending each of them a draft of the speech Packard proposes present to the Senate Hearing asking for any “notes or suggestions.” He offers to modify the statement to read from all of them, or to coordinate should they wish to prepare their own statements.

7/27/88, Copy of a PR release from HP PR to HP managers covering Packard’s testimony

7/27/88, Letter to Packard from Herbert Fenster of the Law firm McKenna, Conner & Cuneo, thanking him for his testimony before the Senate Armed Services Committee. He also urges Packard to remain active in trying to resolve the defense problems. He attaches a copy of a letter he has written [dated July 27, 1988] to Senator Sam Nunn, Chairman of the Senate Armed Services Committee, giving supplemental information on a question Nunn asked of Packard during his testimony.

7/29/88, Letter to Packard from John C. Warnecke, congratulating him on his testimony.

8/22/88, Note from Herbert Hetu, Aerospace Industries Association enclosing a copy of their publication, Key Speeches, containing an article covering Packard’s testimony.

8/24/88, Copy of a letter from Packard to Barbara Braucht of the Senate Committee returning transcripts of his testimony on July 27th.

9/14/88, Letter to Packard from Charles J. Pillliod, Jr. saying that he had received a copy of Packard’s testimony

 

Background material:

4/12/88, Letter from Herbert L. Fenster, of the law firm McKenna, Conner & Cuneo to Senator Phil Gramm commenting on legislation

7/11/88, Copy of an article in the Defense Daily giving  comments by former DOD employee, Richard DeLauer

7/12/88, Copy of a speech by Senator Alan J. Dixon before the Armed Services Committee on the subject of the Defense Acquisition Process

7/13/88, Copy of a statement by R. James Woolsey before the Senate Armed Services Committee

7/13/88, Copy of a statement given by Donald E. Sowle before the Subcommittee on Legislation and National Security

7/29/88, Copy of  Inside the Pentagon, weekly industry publication

9/2/88, Another copy of Inside the Pentagon

Undated, copy of Senate Bill S. 2621 to expand the responsibilities of the Under Secretary of Defense for Acquisition, along with a page from the Congressional Record including testimony of the subject

 

News Clippings covering Packard’s testimony

7/18/88, Defense News

7/26/88, San Jose News

7/28/88, The San Francisco Chronicle

7/28/88, The Washington Post

7/28/88, The New York Times

8/1/88, Defense News

Undated United Press International

 

 

Box 5, Folder 32A – General Speeches

 

September 13, 1988, Remarks at Groundbreaking Ceremony, Monterey Bay Aquarium Research Instate Institute, Moss Landing, CA

 

9/13/88, Copy of typewritten text of speech. The speech is titled “The Role of the Monterey Bay Aquarium Research Institute.”

 

Packard says that when they were planning the Monterey Bay Aquarium they realized having a significant research program would be desirable. “The first priority for this research,” he says, “would be to develop and maintain the best possible environment for the marine life to be displayed. We also knew that the Monterey Bay was one of the most attractive locations on the west coast of the United States for the study of marine and ocean science, and that the Monterey Bay had the potential of becoming a center of world class marine and ocean research.”

 

Packard tells how, in the summer of 1985, a one-man man underwater vehicle made an excursion 2000 feet down in the waters of Monterey Bay. People from the Aquarium provided video equipment, and Packard says the success of this expedition “clearly indicated that there was an unusual opportunity to develop an extensive deep water research program in the Monterey Bay.” However, rather than have the Aquarium take on the research program directly, they decided to establish a separate foundation specifically for the research work. The Monterey Bay Aquarium Research Institute, MBARI, was established in 1987 to plan and execute a major research program in the Monterey Bay.

 

Packard explains that most research in the oceans of the world has been done within the first 2000 feet because it is within that depth that resources of any economic value are found. And he goes on the say that the “Average depth of the oceans of the world is about 10,000 feet and thus we know very little about a vast part of the oceans….The canyons in the Monterey Bay reach a depth of 5000 feet a short distance off shore, and beyond the canyons the ocean floor reaches 10,000 feet just a few miles from land. This bay thus provides an ideal location for research in deep ocean waters.

 

“Underwater vehicles that take people down to depths in the ocean for research are very expensive to operate. Fortunately it is now possible to design and operate unmanned vehicles for underwater research that can take excellent video pictures, collect all kinds of data, place equipment on the ocean floor or on the walls of the canyons, retrieve specimens and samples of material, and in fact, do everything necessary for a good research program. The Monterey Bay Aquarium Research Institute is now proceeding in this exciting endeavor and the groundbreaking here at Moss Landing is a major milestone in our work.”

 

Packard says that over the past few years he has had the opportunity to study science and technology in many countries around the world, and has concluded that the United States is in danger of losing its leadership in technology and becoming a second rate nation if it does not change the way scientific research and education are supported at the federal and state level.

 

“For example,” he says, “scientists and educators who receive federal support for their work spend far too much time applying for grants and reporting on how the money they receive is used. Research in nearly every field of science requires expensive equipment and instrumentation and many research organizations do not provide adequate equipment and facilities for their scientists. In planning the organizational structure of MBARI we have tried to provide an environment for the scientists and engineers in the organization that will enable them to devote their time and talents to science and engineering, and to have adequate equipment and facilities for their work. We will be providing operating funding for the foundation at the level of five million dollars a year and we have provided the funds for the start-up costs for buildings and equipment so that the scientists and engineers in the organiztion can do their research work without having to waste their time applying for grants and reporting on how the money is spent….

 

Packard says that, in planning the buildings for the research site, they have found that the local regulatory process has delayed their work and increased its cost…. “There are too many people and organizations involved in regulation. Their action follows rigid procedures that have no room for the application of common sense.”

 

While he would like to be optimistic, Packard says he is “not very encouraged by what we have encountered so far in planning and building this facility in Moss Landing.”

 

He says he can be “a bit more optimistic in telling you what I hope MBARI can achieve in its research work. With the people, the facilities and the equipment we now have in place we will be able to build a data base over a long period of time covering all of the scientific aspects of the Monterey Bay. This will include the physical and chemical characteristics of the water and the ocean floor, the geology under the bay, the life and habits of the inhabitants of the bay, plants, invertebrates, fish and marine mammals. It will involve the observation of all aspects of marine life in its natural habitat and the collection of specimens from all levels in the bay. With this wealth of scientific information that has never before been available, it will be possible to plan and implement better management practices for the economic resources of the bay. It will be possible to understand better the problems of pollution in the bay and to deal with them more effectively. I am convinced that the research by MBARI will bring a much better understanding of and appreciation for the Monterey Bay, and make it a more valuable resource for our state and for our nation.

 

We have already developed a close association with the other marine research activities located around the bay and we have representatives on our board of directors from the most important major marine research organizations in the United States. It was my hope in establishing this research institute that it might enable the Monterey Bay to become a center of world class marine research before the end of this century.

 

Packard takes a few moments introduce three of the major people at MBARI: Dr. Richard Barber, the Director of Research, Mike Lee, who is responsible to design, build and operate the scientific equipment and equipment at the Institute, and Derek Baylis who made a major contribution to the innovative design of the Monterey Bay Aquarium and who has the responsibility for the design and the building and operation of the support facilities for MBARI.

 

He also introduces their state representative, Sam Farr, and Marc del Piero, Chairman of their County Commission.

 

“In closing, I want to assure you it is an important event for MBARI to have this groundbreaking ceremony here today. In a rather short period of time we have brought together an outstanding team of scientists and engineers. We have designed and built a very complex underwater vehicle, obtained and equipped a mother ship from which we can now operate the underwater vehicle and begin our research work. What is so disappointing is that, in this same period of time, we have not been able to obtain the final approvals for the building and dock we need here at Moss Landing. This is a first-hand example of the deadening effect of over-regulation on scientific work in the United States and in the State of California. It is a dark cloud on the horizon of the future of our country. If this situation can not be corrected, our country will, without any doubt whatsoever, forfeit its leadership in science and technology and become a second-rate nation in the early years of the twenty-first century. We simply can not afford to let that happen. We must find a better way to deal with these problems.”

 

 

Box 5, Folder 33 – General  Speeches

 

October 27, 1988, National Security Issues for the 1990s and Beyond, Western Briefing Conference, Bureau of National Affairs and Federal Bar Association, San Francisco, CA

 

Packard was invited by Herbert L. Fenster, McKenna, Conner & Cuneo, to be the keynote speaker at this conference.

 

10/27/88, Copy of typewritten text of Packard’s remarks at this conference

 

Packard says he believes we are involved in a “watershed change in affairs of the world, a change that will influence our foreign affairs as well as our national affairs….” He says he would like to present his views on this subject “with the hope that the discussions in your meetings will be forward looking toward the great opportunity which I think is within our reach.”

 

Packard points to the major confrontation between the United States and the Soviet Union since World War II – one which has involved the major nations of the world as well. “That confrontation,” he says, “has been an ideologic [sic] conflict of the goals and values of the Communist Societies and The Free Societies of the world. It has been this confrontation that has shaped our foreign policy and our national security policy. It has been a major determinate in the kinds of weapons we have procured and the size and deployment of our military forces.”

 

“…people all over the world,” Packard believes, “are beginning to see … that Communism has not been able to deliver on the hopes it held out for the people in the countries where it has prevailed. “And,” he continues, “people all over the world have begun to see, quite clearly, that Communism has not been able to compete with the free enterprise economies, let alone destroy them as it once predicted.” Packard says he sees the results of this change, “In [Asia], in Europe, including the Soviet Union, and in the United States. More and more people now recognize the basic potentials of free enterprise in the economy. What we are seeing is a world wide wave of growing support for the conservative philosophy, the values of personal freedom in economic affairs as well as in private affairs. And I think people are finally beginning to realize that socialism can not function without an authoritarian government, that socialism and individual freedom are not compatible.”

 

Packard cautions, however, that even though these forces that he has described may be at work, changes will be slow in coming. “What this means,” he says, “is that any policies or actions that are based on the belief that a fundamental shift is in motion must be carefully hedged against [the] possibility of a reversal or at least a very long period of implementation. The road from here to where we would like to be will be long, steep, twisty, and bumpy, as usual.”

 

“If these changes that I have postulated are indeed under way they will have a major impact on United States national security policy and on our entire National Defense Establishment. I assume you have judged, from what I have already said, that I firmly believe these things I have outlined are already at work in the world. I really think this has given us an unusual window of opportunity, the kind that comes, at best, only a few times in any century.

 

“This world wide watershed change is very closely related to the task of improving the management of our defense establishment. You will be discussing a number of important problems today, all generally related to the problem of improving the military acquisition process. As our recent Commission on Defense Management pointed out there are a great many actions that can be taken to get more military capability for the tax dollars that are being spent. The greatest waste of all is to develop the wrong weapons and deploy the wrong forces.”

 

“…it is quite evident,” Packard feels, “ that we have not had an optimum mix of weapons and forces for the job to be done.” He believes that the Korean conflict will soon be resolve and that U.S. forces will no longer be required there.  There will be pressures to reduce our forces in Europe, and pressures to reduce our forces at home. These must be resisted, particularly at this time because these important changes that are now gong on around the world are not et permanent. They could weaken or reverse in the absence of a strong U.S. resolve to support these changes with the military capability to back up that resolve. Our ground forces have been tailored in large part to deal with a Soviet attack through the central European front. That problem may become less important. Even with the most optomistic senario [sic] there will still be conflict around the world that will threaten U.S. interests and special forces will be needed to deal with them. The role of the Navy will change. I think we are likely to need fewer aircraft carriers and different capabilities in the naval forces. Clearly, with limited resources and different problems to deal with it is more important than ever to acquire and support the optimum mix of military equipment and forces.

 

“There are two other causes of major waste in our procurement system, the Congress appropriates money for military equipment that is neither needed or wanted by our professional military people, I believe it was something like 4.5 billions of dollars this year. Because of political greed we spend billions of dollars, year after year, for military bases that do not contribute one iota to our defense capability. These three issues cause a much larger waste of taxpayers dollars than any of the issues that are on the agenda for this meeting.”

 

“The other two important issues involved in getting more defense capability for our dollars, the addiction to their self interest by the members of the Congress of the United States, to put their personal welfare ahead of the welfare of their country in appropriating money for weapons that are not needed and for military bases that are not needed, are issues that are difficult to deal with in this political world. They are however, the largest causes of waste and abuse in defense management and they must not be overlooked.

 

Packard says he thinks the only way  to bring about improvements in this political arena is “to do what we can, whenever we can, to expose the hypocracy [sic] of the many members of the Congress who continue to put their personal welfare ahead of the welfare of our country on the very important issues of National Security. I do not have to name names, some of the worst members of the Congress in this wasteful practice are from this area.

 

Packard turns to the agenda for the meeting.

 

“You have a number of subjects on the agenda involving the legal aspects of Defense Procurement. In my opinion the most effective way, in fact I think the only way, to deal with most of these legal problems is to do whatever can be done to encourage the defense industry to develop a strong commitment to self governance.

 

“The Defense industry has as you know a very poor reputation in the mind of the public. This will not be changed by legal actions of any kind. I think you all know that the legal profession is no Great White Knight in search of justice for all, in the mind of the public either. The image of the Defense Industry can only be improved when the public perceives that the Industry has wholeheartedly accepted the very special responsibility it has to the men and women in our armed forces. That requires, in my humble opinion, a total and complete commitment by every company producing material or services for our armed forces to do the best that can be done in every possible way.

 

“Freedom can only thrive when the people who enjoy that freedom behave in a way that is not only acceptable to but is supported by the general public that surrounds them. If they do not do so the government will impose the necessary regulations on them. The defense Industry companies, large or small, who violate this important trust are eroding the very foundations of our free enterprise system. This is an issue that is in my opinion more important than any of the issues you have on your agenda today. I hope you can find time to discuss it before you adjourn.

 

“I note that tomorrow you will be discussing defense funding cutbacks and increasing competition for the dollars that will be available.

 

These are important subjects. I do not believe there is any possibility of major increases in the defense funding, barring some unforeseeable crisis. The most that an be expected is about the present level with increases to accommodate inflation. I think that is all that is really needed, if we can make some reasonable improvements in the way we spend our Defense dollars. I have already discussed the areas where large savings could be made; deciding on the right weapons and military forces in the first place, treating the pork barrel addiction of the members of the Congress. A wholehearted commitment to self governance is, in my opinion the only way to deal with the poor public image of the industry, and in the long range view it is the only way that even more extensive federal regulation can be avoided.

 

“You should continue to work on the many mundane problems that are involved, good day to day management practices, correcting practices, rights for whistle-blowers, commercial products and commercial practices, quality versus price, and fraud and abuse of one kind and another which can never be completely eliminated, and all the rest.

 

“In all of our concern about improving the management of our Defense Establishment we must keep everlastingly in mind the fact that America can not continue to be the Great Leader of the Free World unless our country is willing to support and nurture a superior military capability.

 

“I know this is not supposed to be a political forum and I would not want to mention any names. I think you can conclude from what I have said who I intend to vote for and who I hope all of you here today will vote to be our next President. This election will be a watershed election, it will determine whether or not America will go forward to accept the great challenges that lie on the horizons of the future.”

 

8/30/88, Letter to Packard from Herbert L. Fenster of McKenna, Conner & Cuneo, confirming his invitation to be the keynote speaker at the Western Briefing Conference, held annually for the principal executives and counsel of the major defense contractors.

9/22/88, Letter to Packard from Herbert Fenster thanking him for agreeing to speak at their conference

10/27-28/88, Copy of the printed program for the conference

10/27/88, Copy of registration form for the conference

 

1987 – Packard Speeches

Box 5, Folder 24 – General Speeches

 

May 20, 1987, National Science Board, Vannevar Bush Award, Washington D. C.

 

Packard was recovering from a back operation and was unable to attend the dinner award.

 

5/20/87, Copy of the printed invitation to the dinner

5/20/87, Copy of S. J. Buschsbaum remarks accepting the award on behalf of Packard

2/25/87, Letter to Packard from Roland W. Schmitt, National Science Board, telling him he has been selected to receive the 1987 Vannevar Bush Award

3/18/87, Copy of a letter from Packard to Roland W. Schmitt saying he and Mrs. Packard would be pleased to attend the award dinner

4/8/87, Letter to Packard from W. O. Baker, AT&T, congratulating him on being selected for the Vannevar Bush Award. He attaches a copy of a speech he had made at a similar award dinner in 1981.

4/23/87, Copy of a letter from Packard to W. O. Baker, saying he is recovering from a back operation and will not be able to travel to Washington to receive the award

4/23/87, Copy of a letter to Dr. Roland W. Schmitt from Packard’s secretary, Margaret Paull, transmitting a note from Packard to be read at the dinner saying he is honored to receive the award and explaining his recuperation prevents his travelling to Washington

5/18/87, Letter to Packard from President Reagan congratulating him on receiving the award

5/20/87, Copy of a press release from the National Science Foundation announcing presentation of the Vannevar Bush Award to Packard. Biographical information on Packard is attached.

5/20/87, Copy of the text of  Dr. Schmitt’s comments in making the award presentation at the dinner. He explains that Mr. Packard is recuperating nicely from surgery and that Solomon Buchbaum will accept the award in Packard’s honor.

5/13/87, Copy of a letter from Packard to Dr. Solomon J. Buchbaum, saying he would honored to have the Doctor accept the award for him

5/22/87, Copy of a letter from Packard to Dr. Solomon J. Buchbaum thanking him for accepting the Vannevar Bush Award in his behalf

Undated letter from Dr. Buchbaum to Packard saying it was an honor to accept the award for Packard. He encloses a copy of his remarks on that occasion.

6/4/87, Copy of a letter from Packard to Dr. Buchbaum thanking him for the copy of his comments at the dinner

Several letters of congratulations to Packard on his receiving the Vannevar Bush Award

9/7/89, Note from Margaret Paull to Packard attaching the file on documents relating to this award. She reminds him that he had not been able to attend.

 

 

Box 5, Folder 25 – General Speeches

 

October 14, 1987, Remarks on Accepting the George C. Marshall Medal

 

10/14/87, Typewritten text of Packard’s speech

 

Packard says he would like to discuss a few of the management principles that General Marshall followed, and which, he feels, are important in the management of industrial affairs as well as military affairs.

 

“One of these principles,” Packard says, “is to establish sound objectives and to have them fully supported by the people who are involved…..His papers continually reflect the importance he gave to sound plans and to the need to develop support for those plans by agreement rather than by command.”

 

“Another principle of good management is to select the best people for the job, give them responsibility and authority, and back them up when they need help.”

 

Packard gives the example of General Groves who Marshall chose to manage the Manhattan Project. While Marshall tried to follow the project, he soon found he could not keep up and left it to General Groves to manage.

 

Packard says that “One of the most important things that could be done to improve defense management is to do better overall planning for our military activities. We would benefit from continually asking the questions General Marshall asked and making the important decisions; 1st – as to what we are not going to do, and 2nd – as to what we must be prepared to do.”

 

Referring to the work done by the President’s Commission on Defense Management, Packard says their first recommendations to improve military planning was to “change the structure of the joint chiefs and this has been done by the Congress and the Department. The chairman was given more authority to be able to develop better plans for joint operations and overall military strategy. A vice chairman has been appointed to give the unified and specified commands a larger influence in the planning process. These changes are intended to give professional military people a more effective role in defense planning.”

 

One of the other recommendations the Commission made on planning was to establish a longer time for the planning and the implementation of the acquisition work. While the Department of Defense does plan on a five year basis, the Congress provides financial support year by year. This causes programs to be cancelled or stretched out and instead of being done on an efficient basis, billions of dollars are being wasted. An even more serious problem is that the Congress has become involved in detailed legislation which adds cost and seldom achieves what is intended. For example, it now takes longer than ever to deploy new technology weapons and we are throwing away whatever technical advantage we have over the Soviets. This is a very serious problem which has triggered by far too many detailed regulations on procurement imposed on the Department by the Congress. Thus we have strayed a long way from the kind of planning General Marshall considered so important in the mobilization and training of the military forces and in the development and acquisition of the weapons to win World War II.

 

“Better planning simply can not be done unless the members of the Congress will change their ways and consider our defense establishment essential to our leadership of the free world, and to our survival as a free nation instead of treating the Department of Defense as their personal pork barrel for the benefit of their constituents.”

 

“Our Commission made several recommendations intended to get the Department back to General Marshall’s normal practice of picking a responsible man and leaving him great freedom to carry out his assignment. The management of research and development and procurement in the Department has strayed far from this principle. In fact, it has been getting worse year by year in this regard..”

 

“Our Commission recommended that a new undersecretary job be established and be given the sole responsibility for managing defense acquisition, including a strong input in the planning process and full responsibility for establishing the overall Department policies for research, development and procurement, and this new under secretary be a man with industrial management experience. That has been done but it has not worked out as we had hoped. Perhaps we were expecting too much to establish a new job in as organization that had been working together for six years. Despite the fact that Secretary Weinberger gave the new undersecretary good support, it required that many other people in both OSD and the services had to get out of the procurement business which they were not willing to do. The next administration could do a much better job in implementing the Commission’s recommendations if the people involved are really interested in improving defense management.

 

“The Commission believed that the implementation of its recommendations in the acquisition area would result in a substantial  reduction in the number of people in both OSD and the services in acquisition work, including research and development. There would be better weapons, lower costs, and we would be able to put new technology into the field much more rapidly. We should have recommended to the Congress that it should have first mandated a reduction of about twenty-five percent in the number of people in the acquisition area. With a reduction of that magnitude there would still be more than enough people left to do the job right. The Defense Department is simply not able to make this kind of a reduction in people without a mandate from the Congress, and I strongly urge the Congress to take this action.,

 

“In closing I want to emphasize that we do have considerable military capability at this time, good men and women in the services, equipment generally superior to that of our potential adversaries, and a high level of morale. We are simply paying too high a price for what we are getting, and the whole acquisition process is in the worst condition ever. Perhaps it is too much to hope that someday the Department will get its house in order and the Congress will see the error of its ways, for that is the only way our great country will again be able to enjoy the excellence in defense management that General Marshall demonstrated so well.

 

“There are, fortunately, some areas in the Department where General Marshall’s management practices are being followed. Even though it will be difficult or even impossible to make significant improvements in the overall management of the Department, I want to encourage the men and women in the Army to continue to seek ways to expand the areas in which General Marshall’s principles can be applied, to develop centers of excellence in the management of your job in spite of all the regulations and red tape. This will do honor to the memory of General Marshall and it will do honor to your service to your country.”

 

1/16/87, Letter to Packard from Maj. Gen. Ret. Robert F. Cocklin, informing him that the Association of the United States Army has selected him as the 1987 recipient of the George Catlett Marshall Medal.

2/9/87, Copy of a letter from Packard to Gen, Cocklin saying “Frankly I do not believe that I am particularly qualified to receive the award…”

2/17/87, Letter to Packard from Gen. Cocklin asking that he reconsider

4/23/87, Letter to Packard from Gen. Cocklin telling that the announcement of his selection for the Marshall Medal will be released shortly

8/17/87, Letter to Packard from Gen. Cocklin giving information on arrangements for the dinner

10/20/87, Copies of letters from Packard sending copies of his speech to 16 prominent people

10/21/87, Letter to Packard from Norman R. Augustine  congratulating him on receiving the Marshall Medal

10/26/87, Letter from Frank Carlucci, The White House, thanking Packard for the copy of his speech, and saying ‘Right on target.!’

10/21/87, Letter to Packard from Gen. Cocklin thanking him for his participation at the AUSA’s Annual Meeting

10/26/87, Letter to Packard from Carla Hills, congratulating on receiving the Medal

10/26/87, Letter to Packard from William P. Clark thanking him for his address

11/27/87, Letter to Packard from Charles J. Pilliod, Jr. Ambassador to Mexico, thanking him for sending a copy of his speech

 

Publications and news clippings

6/5/87, Clipping from the Wall Street Journal with an article written by Antonio Martino discussing the Marshall Plan

May 1987, clipping from Army magazine announcing forthcoming presentation of Medal to Packard

May 1987 issue of Army magazine

March 1987 issue of ‘Topics’, a publication of the George C. Marshall Foundation

1996 Annual report of The George C. Marshall Foundation

 

 

Box 5, Folder 25A – General Speeches

 

November 3, 1987 – Child Health and our Nation’s Future, David Packard and Richard E, Behrman, M.D. Center for the Future of Children, The David and Lucile Packard Foundation.

 

11/3/87, Copy of typed text of speech

 

“As a nation,” Packard says, “we are overlooking the most fundamental step required to provide for our economic welfare and quality of life in the next century. It is not a matter of protecting the commerce of oil or reducing our national debt, as important as these may be. We can fulfill our responsibilities to the next generation and maintain our competitive posture in the worldwide economy only if today’s children become healthy, productive adults. This requires that children have adequate health care during their early years, giving them a proper foundation for succeeding in their education.”

 

Packard emphasizes that meeting this goal will require a long range view. “Statements by the administration to the effect that we can’t afford major initiatives now to deal with those living in poverty (forty percent of whom are children), of the 31 million who don’t have health insurance ( a third of whom are children), are missing the point. For our own well-being, as well as theirs, we cannot afford to ignore the children in these groups…. We can’t afford to squander our natural human resources by failing to produce physically and mentally healthy children.”

 

Packard agrees there are honest differences of opinion on how to address the important educational and social issues that affect children, he says “…there is no debate about the proposition that all children should be provided basic medical care. Good health is a prerequisite to being able to learn, to develop normally, and to being able to work to one’s full potential.”

 

“At the very least, we should start now by providing all pregnant women and newborns each year with a basic insurance plan. We propose the following:

 

  1. A health benefit package similar to that proposed by the American academy of Pediatrics would be required for all insurance policies and should be included in every employee’s health insurance benefit package.

 

  1. For those children whose parents cannot afford a policy directly or through employers, coverage should be purchased for them through a combination of income-graduated, parent paid premiums, public funds financed by a payroll tax on employers and employees, and allocations from state and federal budgets. It is reasonable the public funds come from those whose families will benefit in the future from the good health of all children.

 

  1. The plan should include appropriate cost-saving measures such as managed care.”

 

“Children are our future and the future is now. Every CEO knows that today’s decisions determine tomorrow’s bottom line. Failure to act as well as think strategically leads to loss of productivity or competitiveness, or both. Failure to address the health needs of today’s children is similarly insidious in its consequences, We mortgage our future as a nation to a much greater extent by this negligence than by our failure to reduce the federal budget deficit.”

1985 – Packard Speeches

Box 5, Folder 9 – General Speeches

 

February 6, 1985 – Council of 100 Business Leadership Award, Arizona State University, Phoenix, AZ

 

Packard was selected as the first recipient of this award and these are the remarks he presented on that occasion

 

2/6/85, Handwritten 3X5” cards, written by Packard outlining his remarks. These are very brief and cryptic.

 

“Attention on President Reagan’s budget and State of the Union Address. Tax reform, deficit, what the economy will do, interest rates

 

“I don’t have any special insight on these issues. I don’t like a lot of things I have been hearing.

 

“US – Japan Advisory Commission [See speech folder 11/27/84].

Appointed by President Reagan and Prime Minister Nakasone, May 1983

8 US members

7 Japanese members

Held 8 meetings

Made report to Pres. And PM September 1984

[He lists the names of all the members]

 

“[Commission considered] all aspects of US- Japan relationships

Yen/$ relationship

Agriculture, industrial policy

Security, technology

Long range serious

 

“US-Japan relationship over past four decades has developed into most unusual relationship between two major nations.

Complete dependence after war

1960 [Japan production] 1/12 of US

Today ½, nearly equal on per capita basis

 

“US & Japan [together] 1/3 of world production, ¾ of Pacific Basin

Wide range of common interests

Few areas of basic conflict

New era of lasting peace, prosperity in Pacific Basin

 

“There are some problems, these must be managed better in future

Trade

US – Japan’s largest market for manufactured products

Japan – US’ largest agricultural [market]

 

“Bilateral deficit

20 Billion 1983 – 30 billion 1984

Will probably grow further, 1985 Automobile, Electronic equipment

 

“Character of Japan’s economy

Export manufactured goods to pay for energy, raw materials and food

US – large domestic market much less incentive to export

 

“Strong dollar, weak yen. 1979 costs more nearly equal yen below 200/$ Since 1979 cost spread 30%

 

“Japan labor practices

Heavy emphasis on quality

Automobile 1975 2.9 B

Auto costs 1981 13.7B

Quota on Japanese automobiles, increased costs by $1000

Electronic Products 15B last year

 

“What can be done?

Voluntary action – open Japanese market

Quotas – tariffs, protections

Japanese know problem serious

Japan does not have advantage in technology

Better management

More competitive spirit

Better teamwork between industry and government

Better education

 

“Some progress

US must work harder at Japanese market

Industry cooperation

Agriculture

Security Situation in Pacific

US, Japan, PRC

Developing countries doing well

The US-Japan relationship is one of the brightest spots in a troubled world

We must give it a high priority”

 

10/12/84, Letter to Packard from Marilyn Seymann, Ph.D., telling him that he has “been selected as the first recipient of the Council of 100 Business Leadership Award”

1/31/85, Typewritten sheet listing Packard’s schedule for the day of the award, February 6, 1985

1/31/85, Typewritten note from Laurie O’Brien, Arizona State, enclosing a typewritten membership list of the Council of 100

2/7/85, Letter to Packard from L. William Seidman, Dean College of Business, Arizona State, saying it was an honor to have him visit with them and receive the Award

2/11/85, Letter to Packard from Ron K. Schilling, Arizona State, enclosing copies of some press articles

2/14/85, Letter to Packard from Anne Marie Shanks, Development Director of the Arizona Center for Law in the Public Interest, enclosing a news article  from the Business Journal

 

 

Box 5, Folder 10 – General  Speeches

 

September 9, 1985, Interex Conference, Washington D. C.

Packard was invited to speak at the 1985 Interex North American Conference, a group devoted to the interests of users of HP equipment, particularly computers.

 

Packard says he is not going to discuss specific products or programs, explaining that both he and Bill Hewlett have not been involved in the day to day business of the company. He does say that the main message he wants to give is that “…the HP computer users groups have become very important to our company because we have had a strong commitment to HP users from the very early days of the company.” He contrasts the typical characteristics of users when HP made general purpose electronic instruments –  “essentially all electronic engineers,” with those of the users of HP’s computer products, “people of all kinds, in every aspect of the economy.”

 

He makes the point that when most of their customers were engineers they understood their needs very well and had a good rapport with them; but now, with a much more diverse group he says, “It would be impossible for us to keep in good contact with all of our users without organizations like these users groups.”

 

Continuing on the subject of change, Packard says, “Some people have suggested that Hewlett-Packard is changing from a company dominated by engineers to a company dominated by marketing. I do not see it that way at all.

 

“From the beginning we had a close coupling between our development engineers, our manufacturing people and the users of our products. We have always had strong connections between engineering and marketing. Our basic philosophy in this regard has not changed at all but has simply been adapted to a new and vastly larger group of users. The development of the HP users groups has made these possible and you have become important members of our team.

 

“From the beginning we had a close coupling between our development engineers, our manufacturing people and the users of our products. We have always had strong connections between engineering and marketing. Our basic philosophy in this regard has not changed at all but has simply been adapted to a new and vastly larger group of users. The development of the HP users groups has made these possible and you have become important members of our team.

 

“In the early days of our company we required just as much understanding of what HP users needed and wanted as we do today. The essential difference was that the users of electronic instruments were a small, reasonably coherent group with a limited variety of requirements. We concentrated our work on the development of general purpose products in order to have as many users as possible, but the number was still relatively small.

 

“We had a special advantage,” he says, “in that all of our technical people in our development laboratories and in our factories and in our marketing organization were electronic engineers, and so were almost all of our customers. We knew that if we developed a new electronic voltmeter or a

signal generator that would do a better job for us in our laboratories and our factories, it would also do a better job for our customers.

 

Packard says they would allude to that relationship as the ‘next bench syndrome.’ “If the engineer at the next bench in the HP laboratories thought the new development was going to be a useful product, it would almost always be a commercial success when we put it on the market.”

 

Packard talks about the organization of the company – a large number of relatively small divisions, each having responsibility for a specific group of products. “This structure,” he says, “enabled our development people to specialize in the needs of the users of that product group. Thus this particular management structure was determined in large part to maintain the most effective relationship with the users of our products. We could have developed larger manufacturing organizations which might have had better efficiency in production. There were two considerations that influenced this choice of structure. One was that we believed it would enable us to remain closer to our users. The other was we felt a smaller unit would provide a more friendly, more personal and a more cooperative environment for our employees.”

 

“This particular corporate structure did not work as well when we became involved in computers and closely related data products such as computer peripherals, and during the last few years we have modified the relationship between our divisions to accommodate the important relationship between products in groups

 

“Our products were much simpler in the early days, often with only five to ten active elements or vacuum tubes, in contrast to millions of active elements in computer systems today.

 

“Even though the problems we dealt with were vastly simpler than the products of today, and even though we had a good understanding of what our users might need, we still gave our users a great deal of personal attention.”

 

“The corporate structure that we had developed to support the users of general purpose electronic instruments worked fairly well during the early years of our involvement with computers, but we were already beginning to deal with a larger and more complex group of users of HP products. We had entered the field of medical electronics and electronic instruments for chemical analysis and we soon learned that the ‘next bench syndrome’ was no longer working.

 

“ We tried a number of different approaches to establish better rapport with this new group of users in medicine and chemistry. We used doctors and chemists as consultants, established ties with university people in these fields and with medical schools and hospitals. It took time to learn how to work effectively with this new group of HP users but we now have a very good position in both of these fields.

 

“It was not long after we became involved in the computer business that we realized we were really in the business of developing and marketing general purpose computers and related data products and that we had a great opportunity in a vastly larger and more complex market.

 

“I do not think any of us felt that new basic principles were involved in the computer market. We simply had to find a better way to serve a new and much larger group of users and we have found it.

 

“You people who are here tonight and all the other members of the HP users groups around the world have become an important part of the HP team. Because you are members of our team I want to say a word about some of the basic HP objectives which I do not see as changing in any significant way.

 

“One of our objectives has always been to make a contribution to our field of endeavor, not to be just a ‘me-too’  company. We have tried to be at the forefront of new technology and we will continue to endeavor to do that. As I think you  all know, we have always supported a relatively large research and development program. Over the years we have often been first in applying new technology to a new product. That emphasis will not change and in fact, should be enlarged because we will try to find ways to apply the latest technology not only in hardware but in computer architecture and artificial intelligence.”

 

Packard speaks of the importance of basic integrity. “One of the most important assets of any organization is its basic integrity. We have always expected all of our people to adhere to the highest  standards of integrity in everything they do related to our business. We expect all of our people to play it straight with our customers, with our suppliers, with each other and with the public at large. We expect no less of each of you in our user groups.”

 

“Now I suppose all of you want me to say something about the Spectrum program. The program is going well but we will not tell you anything this week about performance, price or delivery. I want to tell you a story that will explain why.

 

“As some of you may remember, I served as Deputy Secretary of Defense from 1969 until 1972.  During that time I dealt with many problems in the development of new weapons. They wouldn’t perform up to specifications or they cost more than predicted, often both. I concluded that the basic problem was that these new weapons were quite often put into production before they were fully developed and almost always before they had been fully tested in the environment in which they were expected to operate.

 

“I put into effect some new regulations to insure that production would not start until development and testing had been completed. After I left those regulations were largely disregarded and the problems I tried to deal with are still there.

 

“Shortly after I came back to HP we started to develop the 3000 computer. I thought our people at HP were smart enough not to announce the performance of a new product before it had been developed and tested to make sure it would meet the published specifications. I did not get back into the day to day detail of these developments but we did have a full scale review of the project when the new product was ready for the market.

 

“I had been back a couple of years when we had the full scale review of the 3000 project. We found much to my embarrassment that it would barely support itself and wouldn’t even come close to meeting the target performance specifications. Worse yet, literature had been published and distributed to customers six months before this review.

 

“We had to send the team back to the lab and it took nearly another year before this model 3000 would perform to its published specifications.

 

“I know that all of our developing and marketing people got the message at that time. It would not bode well for them to forget today.

 

“The happy outcome was a good product, for as you know the 3000 series which began with that incident has done very well. I do not have the slightest doubt but that Spectrum will do better.”

 

Packard says he would like to conclude with a word about the future.

 

“As far as the general outlook for the computer business is concerned I am very optimistic. There is considerable distance yet to go in hardware. There are probably several orders of magnitude yet to go in DSI geometry. There are opportunities for improvement in materials. There are a number of attractive improvements in software. There will be better mass storage, better terminals, printers and communication. In general, computers will continue to become more powerful and less expensive for some time to come.

 

“The opportunities will be  just as exciting in computer applications, the work most of you here are involved in. We are not using computers very effectively in education and I predict impressive gains in this field in the years ahead.

 

“Good progress is being made in business management but there is much yet to be done all the way from small business to large and complex manufacturing. Super computers will become less expensive and make it possible to better deal with some of the big, complex problems of the next century.

 

“Hewlett-Packard is proud to be at the forefront of this exciting field and we intend to say there. We are especially pleased to have these user groups working with us. All of our people involved in the computer business have recognized that the HP computer users are not just important customers, you are also key players on our team – and it’s going to continue to be a winning team.”

 

10/17/84, Letter to Pam Tower, HP User Group Liaison, from Christopher C. Sieger, Conference Chairman extending an invitation to Packard to speak at the 1985 Interex North American Conference to be held in Washington D. C.

1/11/85, Letter to Packard from Christopher Sieger saying he is gratified to learn that Packard has accepted their invitation to speak at the Conference and giving details of the arrangements

2/14/85, HP internal memo to Packard from Dick Harmon of Press Relations saying that a reporter of INTERACT magazine would like to interview him before the Conference for a promotional article, and he gives several sample questions

9/26/85, Internal HP memo from Pam Tower to Packard thanking him for speaking at the Conference

Undated, Copy of the Bylaws of the International Users Group for HP Computer Professionals

 

 

Box 5, Folder 11 –  General Speeches

 

September 17, 1985 – Statement before the Subcommittee on Trade, Committee on Ways and Means, U.S. House of Representatives, Washington D. C.

 

9/17/85, Typewritten text of Packard’s speech

 

Packard says he is “delighted” to appear before this Subcommittee to give his views on the U.S. trade deficit, as well as possible ways that might be taken to bring exports and imports into better balance. “This is an extremely important subject”, he says, “and I congratulate you and your associates for holding this hearing and for working to develop a legislative response to deal with our country’s unprecedented and growing trade deficit.

 

“Packard says he plans to describe what he believes [are] some of the major causes of the deficit, as well as comment on the difficulties he sees in the proposed import surcharge bills before Congress.

 

The U.S. Trade Deficit

 

Packard says he sees several reasons for the severe deterioration in the U.S. Trade balance.

 

  1. “The consistently high value of the dollar abroad has caused sharp declines in U.S. exports and dramatic increases in imports. The strength of the dollar is a direct result of the reputation of the U.S. as a ‘safe haven’ for foreign funds, a strong U.S. economic performance, and extraordinarily high U.S. interest rates – in turn a direct result of massive and ever growing federal budget deficits.

 

  1. “The huge U.S. market has been an almost irresistible attraction to many foreign competitors. In order to gain market share, many of these firms are willing to sell here at lower profit margins than are acceptable to U.S. suppliers.

 

  1. “Our exporters face tariff and non-tariff barriers abroad, that are often more than our foreign competitors face in this country. The European Community has high tariffs on many products and heavily subsidizes agriculture. Many of the newly industrialized countries – South Korea, Taiwan, India, Mexico. Brazil and others  — have high tariffs, import quotas and licensing requirements, and restrictions on incoming investment. Although some of these may be justifiable as temporary debt reduction measures, U.S. exporters have been strongly affected by reduced trade with the less developed areas of the world, especially the high debt countries in South America. Japan has lowered some trade barriers in recent years and has removed most legal restrictions to its markets. Nevertheless, Japan still retains some quotas and other restrictions. In addition its traditional buying habits, close industry-government relations and archaic distribution systems make it an extremely difficult market to penetrate. Moreover, the Japanese export industries of such concern to us today grew strong in a domestic market that was protected from U.S. competitors until well past the time when our firms enjoyed a competitive advantage and could build a market in Japan.

 

“The Federal Reserve estimates that last year’s $123 billion trade deficit cost the U.S. some two million jobs and 2-3 percent lost growth in gross national product. These estimates, however, must be put in perspective,” he says. The Federal Government has been spending more than it has been taking in, he explains. “As a result imports of both goods and capital have been absolutely essential to U.S. economic growth since 1983. Lower priced foreign goods have helped moderate inflation while imports of foreign capital have offset the shortfall, estimated to be equal to about forty percent of domestic savings, needed to finance both the U.S. budget deficit and an investment boom. If foreign sources of capital had not been available the federal Reserve would have had to either expand the money supply, which would have increased inflation, or permit a strong rise in interest rates. Either action would have reduced growth rates.

 

“Though some U.S. workers have been displaced by imports, 7.3 million new jobs were created between 1982-84 without a surge in inflation. Estimates are that imports reduced the inflation rate by 1.0-1.5 percent by pressuring domestic producers to maintain competitive prices and resist demands for excessive wage increases. As a result, many U.S. firms have moved or are moving to modernize plants and adopt efficient manufacturing processes.

 

  1. “U.S. business has traditionally focused its efforts on the domestic market while export markets have had second priority. This preoccupation with domestic concerns has meant that in certain areas, United States business has not kept up with its foreign competitors. These competitors have been able to produce higher quality, lower priced products by increasing their capital investments and productivity, and by becoming more technically sophisticated.

 

Congressional Response

 

Packard says the Administration has not done enough to stem the growth of the trade deficit. “Furthermore, the efforts of some government agencies have actually increased the deficit. for example, the Defense Department has authorized co-production of U.S. designed weapons in several foreign countries. These arrangements have made significant contributions to our trade deficit, while at the same time increasing the cost of the weapons to the U.S. taxpayers. Some of these actions have been based on legitimate non-economic reasons; but if the effort on the U.S. trade deficit had been considered, I’m sure not all of these co-production arrangements would have been approved.”

 

With the Administration’s lack of attention on stemming the trade deficit, Packard says the pressure has been on Congress to try to narrow the trade gap – mainly by imposing temporary import surcharges. He says he thinks these surcharges are a bad idea for several reasons:

 

  1. “Even if such surcharges are permissible under our GATT obligations, other countries would be certain to demand compensation or to retaliate by closing parts of their markets to U.S. products. The result would be more lost U.S. jobs (and less tax revenues to apply against the federal deficit!).

 

  1. “The imposition of an across-the-board import surcharge would severely limit the ability of the developing countries to repay their debts.

 

  1. “Such measures would immeasurably complicate the efforts of the U.S. Trade Representative to maintain an open international trading system and to conduct further liberalizing negotiations with our trading partners.

 

  1. “Broad surcharges would not focus on specific import situations and therefore, would not serve to stimulate the bilateral negotiations necessary to achieve permanent solutions.

 

  1. “U.S. consumers will bear the brunt of increased prices for imported and, inevitably, U.S. products. The inflationary impact of surcharges is likely to be enormous and its effect on low income consumers most severe.

 

Packard says that a current bill under consideration in the House (H.R. 3035) has many of the same problems. He explains that this bill would establish a 25 percent across-the-board surcharge imposed on the imports from specific countries, those that:

 

  1. “Limit access to their own markets;

 

  1. “Run a substantial trade surplus with the United States and/or the entire world; and,

 

  1. “Do not take steps to reduce their surpluses by 5 percent the first year and 10 percent each year thereafter.”

 

Packard agrees that “Conceptually, there are some positive points to [this feature of H.R. 3035]. First” he says, “it sends a strong message from the Congress to some of our trading partners and to the Executive Branch that there is strong public support for decisive action to reduce our trade deficit. Second, it is designed to reduce the trade deficit by putting in place a prospective weapon that can be used if certain countries do not take action to reduce their trade surpluses. Finally, the import surcharge could be removed quickly once a country reduced its trade imbalance.

 

But, Packard says H.R. 3035 is not an “acceptable response to our present trade problem.”

 

He outlines some specific problems he sees:

 

  1. “The statistical provisions that would be used to determine when the ‘standby’ surcharges would be employed and which countries they would affect seem to me to be quite arbitrary. There is no reason to assert that drastic action should be considered to reduce imports when the trade deficit of a country such as the United States exceeds 1.5 percent of Gross National Product. Several major European countries, including the U.K. and Italy, ran merchandise trade deficits in the 5.5 percent range in the 1970’s. The U.S. would have been aghast at that time if they had proposed surcharge measures such as these to reduce their deficits or, for example, to ‘open’ the U.S. market to more British woolens or to more Italian suits and shoes.

 

  1. Continuing his critique of what he sees as problems with H.R. 3035,  Packard says that “The rather arbitrary exclusion of petroleum trade from the ‘formula’ may discriminate against a whole sector of developing countries and even Japan and the European Community (except the U.K.) that rely upon imported oil to operate their economies. It’s difficult for me to see how any country’s trade activities can be properly evaluated by excluding such a vital commodity. For example, $55 billion of the $123 billion 1984 U.S. trade deficit was due to imports of crude oil and petroleum products.

 

  1. “I believe,” he says, “H.R. 3035 contains an overly mechanical set of thresholds, levels and action points. International trade is complex and constantly changing and no one is smart enough to be able to prescribe appropriate actions several years in advance. For this reason, I favor provisions that permit a flexible response rather than some sort of doomsday device; which, set to go off more or less automatically years in the future, could produce completely unexpected results.

 

  1. “The surcharge provisions of the bill hit quite hard at the newly industrialized countries most of whom need to export to help pay their debts. If we consider current account balances, a more accurate way than simple exports and imports to view international transactions because they capture trade in services including interest and royalty payments, Brazil was $1.8 billion in deficit in 1984 and is projected to be about the same in 1985.  This year, Brazil must make $10 billion in payments on its $100 billion debt (owed in large part to U.S. banks). This amount virtually eliminates its projected overall $12.9 billion trade surplus. South Korea, although not in as desperate shape, ran both a $1.1 billion trade deficit and a $1.4 billion current account deficit in 1984, and its current account is projected to be $1.7 in the red this year. It must meet nearly $5 billion in payments on its $49 billion debt in 1985. Taiwan is the only one of the three newly industrialized countries most affected by HR. 3035 that has an increasing current account surplus and low debt. Even so, projections are that Taiwan’s trade surplus will decrease over the next two years.”

 

“…these [newly industrialized] countries view as major barriers any restrictions the U.S. places on products such as textiles, apparel, shoes, and steel where the have a clear comparative advantage. It is unrealistic to think that they will not attempt to protect these and other important industries. We should expect protectionism and be working with them to define standards by which we can assure that such protectionism is temporary and does not support continued inefficiencies.

 

  1. As another problem with surcharges imposed by H.R. 3035, Packard says that “No authority exists for a GATT member country to impose large tariff increases on all the exports of one or a limited number of other countries simply because its trade deficit, either with an individual country or overall, has reached certain predetermined, arbitrary levels. To comply with GATT, any action a country takes to restrict market access must apply to all other GATT members and be limited to a specific imported product (or products) that are causing serious injury. GATT members affected by such actions have a right to receive compensation or to retaliate.

 

“I believe,” Packard says, “the prospects for retaliation would be quite limited – after all, this would hardly be in the interest of countries that wish to remain major exporters to the U.S. market. Nevertheless, the bill, if enacted by the United States, the leading country in the industrialized world, would signal a major shift toward a ‘market sharing’ approach to world trade, away from the concept that trade flows should be primarily determined by market forces. The legislation would distort trade and stunt growth rates as many countries, developed and developing, began to ‘manage’ their trade with the United States and the world to avoid punitive duties that would be imposed if the arbitrary levels within the bill was exceeded. These maneuvers could deprive sectors of the U.S. economy of the most efficiently produced goods at the lowest prices.

 

“In addition, a possible, even likely, consequence of U.S. action would be passage of similar legislation in both industrialized and developing countries, with each defining ‘excessive trade deficits’ to suit its own needs. Under these conditions countries would soon have to negotiate annually with each other to determine the amount and character of trade they would accept!

 

Trade Relations With Japan

 

“Our trade relationship with Japan, the cause of $37 billion of last years’ $123 billion U.S. trade deficit, is especially important. Japan presently bears the brunt of U.S. criticism for loss of export related jobs and the deterioration of our international trade. In part, this is due to past history. In the 1960’s Japanese textile imports caused a reduction in U.S. textile employment – a market that Japan subsequently lost as well. Then it was television sets, then steel, then autos and now we see our high technology semiconductor-conductor, computer, and communication markets threatened by Japanese imports. It is also due to a certain amount of envy and frustration. There is no denying Japan exports high-quality, well-styled, favorably-priced products which have created a market of well-satisfied U.S. customers. There is also no doubt that for a variety of reasons the Japanese market is extraordinarily difficult to penetrate.

 

“My recent experience,” Packard says, “as the U.S. Co-chairman of the U.S.-Japan Advisory commission has led me to two conclusions. First, the current large U.S. deficit in trade with Japan poses very real risks for both countries. Second, I believe Japanese leaders recognize that a substantial part of the solution to the problem of their U.S. and worldwide trade imbalance rests with them. Let me elaborate on these two points and then suggest a way our country can provide an impetus to help our Japanese trading partners make the kinds of fundamental changes required.”

 

Packard says he believes the “Japanese know that they cannot prosper in the long run by selling into economies which have continuing, negative balances of trade. For trade to endure over time, it must be mutually beneficial to the countries involved. Such is not the case in the current U.S.-Japan trade relationship. Further, the growing perception of Japanese market protection coupled with a Japanese export drive to the U.S. market undermines a commitment to an open trading environment.

 

“This negative view of the Japanese approach to trade results from specific Japanese actions. Because their economy is so dependent on adding value for export, they have not pursued policies which might encourage domestic consumption, imports, or unrestricted investment abroad. Thus far, business and government leaders have been politically unable to adjust these policies or to moderate their exports. On the  other hand, the policy of the United States, for example in unilaterally opening our telecommunications market without seeking reciprocal agreements, have provided little incentive for the Japanese to change their policies.

 

“We need a strategy for dealing specifically with Japanese trade over the short and long term. As a means of addressing the long-term issue of U.S.-Japan trade, a member of the Advisory Commission has proposed affirmative action to reach:

 

1.  “Agreement on the principle that a persisting, lopsided trade balance between us can have a dangerously destabilizing effect on the relationship;

 

  1. “Agreement on an objective of bringing under control our current trade imbalance by concerted actions to progressively reduce its size.

 

  1. “Agreement on a program of specific goals and timetables for achieving this objective, such as actions to gain more access to Japanese markets, restrain various Japanese exports, encourage more Japanese investment in U.S. production facilities, stimulate more imports by Japan, and adjust the yen-dollar exchange rate; and,

 

  1. “Agreement on a mechanism for periodically examining and

adjusting good faith actions taken to achieve established goals.

 

“These are all positive steps for correcting the current misalignment. However, nothing will happen until they are put into effect, and given the enormity of our trade deficit, this should be as soon as possible. In my opinion, the only course of action that will have a significant immediate effect on our trade imbalance with Japan is for the United States to:

 

  1. “Determine by the end of this year (and each succeeding year) the specific amounts on an industry sector, by industry sector basis, by which we want to change our trade deficit with Japan – hopefully reduced, but certainly not increased;

 

  1. “Construct specific short-term time tables for the achievement of such changes; and,

 

  1. “Establish appropriate sanctions such as import quotas that would be applied to limit access to the U.S. Market if the timetables were not met.

 

“With these measures in place, the four points listed by my fellow commissioner could be pursued with the Japanese and their agreement sought to the specific amounts we have previously determined our trade imbalance should be changed. If, at the end of the first six months of 1986, (and each succeeding year) it is determined that the timetables are not being met, the previously determined sanctions would be imposed to remain in effect until the changes have occurred, and the timetables restored.”

 

“There is a concern that arbitrary quotas or other restrictions might present some dangers. However given the size of Japan’s trade surplus with the United States, its desire to remain a major factor in our market and the selectivity of the approach I’m advocating, I don’t think Japan would press a case for compensation in the GATT, or seek to retaliate. Indeed, I believe continuation of the current trade imbalance and the tension it creates pose even graver concerns. The measures I’ve suggested, could have substantial impact on the future growth of the bilateral deficit. Hopefully, they would be used to achieve more openness in the Japanese market were any sanctions quickly removed upon achieving the desired results. I don’t think our Japanese partners would consider them unfair, and hopefully such measures would provide the much needed impetus they require to address the long-range actions vital to the continued health of our trading relationship.

 

 

Alternate Approaches

 

“Restricting access to the U.S. market through quotas or import surcharges, whether ‘triggered’ automatically or not, is a cumbersome process, difficult to achieve with any degree of precision and certainly not a long range solution. Several longer range steps come to mind which I believe would reduce trade restrictions and lower the large and growing U.S. trade deficit:

 

  1. “Our government needs to make U.S. trade policy a high priority. The government must recognize that free (or freer) trade, while an excellent goal, cannot be achieved unilaterally. It requires consideration and cooperation from our trading partners. This means that engaging in multi-lateral and bi-lateral trade negotiations and working to strengthen the GATT is not enough. The U.S. must, in addition, rigorously defend its rights. For example, the little used provisions of Section 301 of the Trade Act of 1974 can and should be a powerful tool to stimulate negotiations and, if necessary penalize our trading partners for their unfair trade practices, including those which restrict our ability to sell in their markets. 301 actions, judiciously and aggressively used, would strengthen the world trading community rather that invite retaliation. Countries realize when the are doing something wrong and, if not corrected will, like children, soon engage in other wrong or illegal acts.

 

“More laws are not needed to permit the Administration to make trade policy a high priority. Instead, the Administration needs to make better use of the laws the Congress has already provided to obtain fair and equal trade practices. One way to help in this process would be for the President to give the U.S. Trade Representative more influence in making trade decisions. If this were to occur, trade decisions could be reached more quickly and without being subject to so many political considerations.”

 

“The Administration also needs to make a serious effort to correct various self-imposed practices which have an adverse effect on U.S. exports. These include unnecessary restrictions under the Export Administration and the Foreign Corrupt Practices Acts, the effects of various U.S. tax measures, and limitations on export financing.”

 

“The Congress can make an important contribution to the reduction of our trade deficit by taking actions that will help United States industry become more efficient. Among these actions are those which will encourage capital formation, reduce the costs of meeting regulatory requirements, stimulate the modernization of manufacturing facilities, and encourage increased investments in research and development, including R&D to improve manufacturing technology.

 

  1. “The U.S. government must get its own economic house in order. This means a substantial reduction of the Federal budget deficit, preferably through cuts in spending; a leaner and more effective defense program, some reduction in ‘automatic’ entitlements, and actual curtailment or elimination of some programs. If sufficient cuts should prove impossible, an increase in taxes will be required.”

 

  1. U.S. productivity must be increased. This means corporations must take a somewhat longer view, modernizing production facilities, insisting on competitive labor settlements and, above all, assessing the need for increased productivity against foreign, as well as domestic, competition.

 

  1. U.S. businesses should be encouraged to go after foreign markets, and particularly the Japanese market. In doing so, it is essential to realize that these markets have to be approached very differently from those of the U.S. Patience, persistence, understanding and a willingness to invest for the long term are all required. However, whenever it becomes apparent that foreign governments or competitors are acting unfairly or not in accord with their agreements they have undertaken, U.S. businesses should not hesitate to move quickly and publicly to make their concerns known to the U.S. Trade Representative, nor should they shy away from preparing and filing the paperwork necessary to support their claims. Standing up for U.S. rights will do much to restore the world’s trading system to vigorous good health.

 

  1. “The government and the business community should actively support changes necessary to update the GATT and bring more international trade transactions under its auspices. The principle of non-discrimination must be reinforced to reduce the number of actions taken outside the GATT such as ‘voluntary restraint’ agreements, agricultural subsidies and quotas, limits on textile and apparel imports, etc. Third World countries should no longer be able to exempt themselves easily from the principles and standards of the GATT since such actions tend to keep trade barriers in place in both the developing and industrialized worlds. Finally, the GATT codes, principally those on subsidies and government procurement, need strengthening and the GATT dispute settlement process should be reformed to speed decisions and reduce political considerations.”

 

 

Box 5, Folder 12 – General Speeches

 

October 22, 1985, Statement Before Science Policy Task Force, Committee on Science & Technology, U.S. House of Representatives

 

10/22/85, Copy of typewritten text of Packard’s remarks to the Committee

 

Packard says he is pleased to be here “to discuss the subject of science in the mission agencies and the government laboratories. This…is a subject that is of considerable interest to me”

 

“The Federal government has provided an enormous amount of support for American science during the last four decades. It is in a large part because of this massive Federal support that the United States has taken a leadership role in science over the rest of the world.”

 

“Although the Federal support for American science has been very large in magnitude, it has not been as effective as it should have been. I believe there are a number of specific things that could be done to improve the way the Federal government supports American science, in the agencies, in the Federal laboratories and in the colleges and universities of our country. I would like to make some observations on how I believe our Federal science policy should be improved.

 

Saying that “Progress in science comes from two basic endeavors, people who think, and people who carefully design and conduct experiments,” Packard offers two guidelines for supporting science.

 

“First: The scientists are the ‘people who think.’ They should be selected and supported on the basis of the quality of their scientific work, not simply on how well they can write a proposal asking for support. When they are supported, they should not be burdened with preparing unnecessary progress reports, effort reporting and other unnecessary work which takes away the time in which they are to do their real work.

 

“Second: Scientists must have the proper equipment in order to carefully design and conduct experiments. The equipment needed to keep scientific work at the forefront of scientific knowledge is much more complex and more expensive today than it was in the past. Modern instruments are more accurate and often include computation capability which makes them much more efficient. It is a serious handicap for a scientist to have inadequate equipment and facilities for the work to be done.”

 

Packard also offers “specific recommendations on how the agencies can do a much better job in selecting the scientists they want to support.”

 

Packard says he believes the “peer review process should not be carried too far.…[This process] should focus more on what the scientist has actually done, not just on what he says he can do.”

 

“In our report on the Federal laboratories [See speech May 27, 1984, Report on Federal Laboratory Review Panel] we recommended that each laboratory have a review committee and that the review committee should report not to the laboratory director but to the agency or organization responsible for the laboratory. It was intended that this review committee work would serve to reduce the number of routine reports required of the laboratory. An objective review of work done by a review committee of peers would be a much better way to evaluate the performance of a laboratory.”

 

“After a scientist, either in a Federal laboratory or at a college or university, has demonstrated good work, that program should be supported to provide long time stability for the work; no routine progress reports but a periodic evaluation of performance by the review committee should be made.”

 

“Research at colleges and universities deserves continuing support, particularly what is generally known as basic research. Federal agencies and Federal laboratories find it difficult to place research contracts at universities because of the many detailed requirements placed on the contracting procedures.

 

“All Federal agencies and Federal laboratories should be given specific authority to give contracts to colleges and universities on a sole source basis. There is absolutely no place for competitive bidding for research placed with colleges and universities.”

 

“I expect it is too much to ask the Congress to refrain from ‘log rolling’ activities where research at colleges and universities is involved. It would be great if this work could be supported strictly on the basis of its contribution to the quality of American science.

 

“Universities are also having a problem with the equipment and facilities available for their research people. The Federal government has done a fine job in the area of high energy physics where facilities costing hundreds of millions of dollars have been provided. There are many areas of science which may make a much more important contribution to our economic well being, the health of our citizens, and the quality of life than high energy physics. A few tens of millions of dollars for equipment and facilities would bring a big return in the productivity of scientific work in these other areas.”

 

Talking about tax credits for equipment corporations give to colleges and universities, Packard says one problem is that, while all companies should give equipment to universities where quality work is being done, some use this as an advertising or sales gimmick.”

 

Another problem [he sees] with the tax credit program is that it does not extend to all colleges and universities on the basis of their real need. “The tax credit program should be supplemented by direct grants for equipment by Federal agencies. The Federal agencies will receive more for their money if they take the responsibility for providing equipment where it is needed in the programs they support.”

 

Packard says the Department of Energy “has a special problem that needs to be corrected….Our committee on the Federal laboratories noted this problem and I have discussed it with two Secretaries of the department but the bureaucracy has refused to change.

 

“The DoE treats research grants like contracts to do construction rather than contracts to do research. They have field offices that look over the work being done, they require monthly reports. This requires paper work by the ton. Most of it useless and this poses a large and unnecessary burden on the people doing the research work. They do this to the laboratories they support and they also do it to the people in universities doing research.”

 

Packard says this apparatus should be phased out, thereby saving many millions of dollars a year, and provide scientists an environment where they would have more time to do scientific work instead of paper work.

 

“I want to say a word about government owned – government operated laboratories….Because these laboratories are under civil service regulations they are not able to hire, motivate or retain the best scientific people, scientists and engineers. Our laboratory committee recommended that these Federal laboratories be allowed to establish a better personnel management program. This could be patterned after an experimental program which has been operating at the Navel Ordnance Laboratory at China Lake in California. I visited this laboratory and discussed the program with the director. He has been able to improve the quality of his professional staff because of this program. I hope your committee will support this program we recommended.

 

“I note that the Department of Defense has proposed a similar program for all of the professional people in the department. I believe that would be a big step forward and I support their program. It may be difficult for the Congress to take the big step at this time but I hope they will at least support the smaller step we are recommending for the Federal laboratories only.

 

“All federally owned laboratories are not federally operated and one choice would be to put all of the laboratories under private sector management. I do not believe it would be wise to do so. I believe the present mix of federally operated and company operated laboratories is about right, but if the Federal government is going to operate a laboratory, it should be able to do so with a commitment to excellence and under policies that would encourage excellence. That is not the case today.

 

“The Federal laboratory Panel recommended that research people should be allowed to spend part of their time on ideas of their own choice. This would include areas of science other than that of their main program. We thought at least 5% of free time should be allowed, some Committee members thought it should be 10%. This idea is one that is supported by almost everyone who has had experience administering a scientific project.

 

“This free time is probably the most important source of innovative ideas. Innovative ideas sometimes come from the laboratory director. Innovative ideas that contribute to the quality of American science never come from the Federal bureaucracy. Their ‘innovative ideas’ almost always do the opposite.

 

“The idea of independent research and development (IRD) for defense programs was originally based on an understanding of the importance of giving scientists and engineers some time free from their assigned work to explore their own innovative ideas.

 

“This program was effectively destroyed by the ‘Mansfield Amendment’ in 1970 when the Congress required IRD to be limited to ideas related to military work. This required that the justification for IRD be documented to demonstrate the independent work had a military potential. While this requirement has been repealed, the practice has not improved very much. This country would receive much better commercial fall out benefit from the vast sums of money spent on military research and development if the original idea for having independent research and development were restored.

 

“I hope some of these ideas will be useful to this Committee in its work to help assure that Federal support for science and technology will be as effective as possible. I know that many other committees of the Congress, probably too many, are involved in this issue. I believe, however, this Committee is in a good position to provide leadership and for that reason, I appreciate the opportunity to give you my recommendations.

 

“I will be please to respond to your questions.”

 

No other papers in folder

 

1984 – Packard Speeches

Box 5, Folder 3A – General speeches

 

February 7, 1984, Productivity, Fairmont Hotel, San Francisco, CA – an HP sponsored Executive Luncheon with an emphasis on top management of HP customers.

 

2/7/84, Copy of speech handwritten by Packard on yellow, notebook paper

 

Packard looks at the decline in growth of productivity in the U.S. since World War II.  He says the U.S. gained 3% per year from 1948 – 1965; 2% from 1965 – 1972; 1% per year from 1972 – 1979. Saying other countries have done much better he cites some examples:

France, West Germany, Italy: Late 1960-mid 1970s – 5-6%/year

                        Japan: 1967-1973 –10%/yr, fell to 4% 1973-1979, well ahead of U.S.

 

He points out that the U.S. came out of WW II with a high level of productivity while Europe and Japan had to rebuild economies that were destroyed in the war. The U.S. also had the highest standard of living and a large share of the export market. He says things began to change from the 1960s to the 1980s.

 

“I can not propose to explain what caused this change. In part it was simply these other countries catching up. And we helped them with massive aid and __?___ open markets for their products. There was a significant change in our educational system in the 1960s and early 1970s to try and provide more opportunities for minority groups and those thought to be disadvantaged. The emphasis changed from education for excellence to education for everybody, excellent or not. This was not all bad, but it was also not all good for our nation.

 

“Research and development – the generation of new knowledge and applying it to make better products and better services is without any doubt the most important source of productivity improvement – which, after all, is best defined as making a better world for more people.

 

“Before WW II the center of R&D for the world was Europe. The U.S. was not far behind and Japan was known best for its ability to copy from abroad and had a poor reputation for the quality of its products. WW II made the United States the undisputed leader of the world in research and development. By winning the war the U.S. position as the world leader in R&D was determined for the next two decades that followed.

 

“Thus, by the end of the 1960s a new world equilibrium in R&D was being established. There is no reason to assume that the U.S. could have maintained its position of leadership forever.

 

“On the otherhand, the position of leadership in world wide R&D gave the U.S. an advantage that it should take advantage of for the future welfare of the country. Hewlett-Packard has been in the center of this drama of R&D for the last 45 years. And I can assure you that we did not see these trends in this great drama with any great clarity. I think we have learned some lessons that have helped with our success. And I think we are in a unique position to help improve the productivity of our economy in the years ahead.

 

Bill Hewlett and I are engineers by profession and we devoted the first 25 years of our work in our company to designing and manufacturing electronic instruments to improve the productivity of electronic engineers. One of our early mottos was “Inexpensive quality,”  and we did design and manufacture electronic instruments that enabled electronic engineers all over the world to do their work more efficiently.

 

“We are here today to talk about productivity, not just for electronic engineers, which has been our business for 45 years, but to talk about productivity for our entire economy – administration, marketing, manufacturing, distribution and, of course, engineering.

 

“I do not suggest by any means that we have all of the answers. In fact one of the messages that this program is intended to convey is that to improve productivity with computers is a cooperative endeavor. It involves hardware suppliers, software suppliers and the user, all working together to analyze the problem and to select the best solution.

 

“The reason I have asked you to join me here for lunch today is that to achieve real productivity improvements from the application of computer technology requires a better understanding by top management of what it is all about.

 

“Now I am not smart enough to give you the exact answer to this question. I would like to note some of the things that the Hewlett-Packard Productivity Program will suggest that your people consider.

 

  1. “A large centralized computer system is not likely to be the right way to go in applying computers to your management problems. There are several reasons for this recommendation.
    1. Your computers should be adapted to improve the efficiency of your people. A study on engineering use of computers showed that if the routine non-productive work of engineers could be eliminated by computers, an order of magnitude of improvement of engineering productivity could be achieved. Your engineeres know what will improve their productivity and if each engineer is given a work station that has network capability with other engineers, and not just across to a big central computer, a very large improvement in productivity can be achieved. In one recent survey engineers responded that they were spending as much as 80% of their time doing non-engineering tasks. This is the kind of work computers should eliminate for them. So they will have more than just 20% of their time doing creative work.”

 

2/7/84, Copy of printed program for the “Executive Luncheon”

11/8/83, Internal HP memo from Dave Lyon to Packard inviting him to speak at the Productivity ’84 Executive Luncheon

1/26/84, Memo to Packard from Dave Lyon thanking him for meeting with him to discuss plans for the luncheon

2/1/84, Copy of a memo from Packard to Dave Lyon asking for some specific examples of productivity improvement.e.g. inventory control

6/23/80, Copy of a page from the U.S. News and World Report containing a Q and A with Packard discussing the subject of productivity

 

 

Box 5, Folder 4 – General Speeches

 

March 13, 1984, Japan and U.S. Cooperating in High Tech

 

3/13/84, Typewritten text of Packard’s talk

Packard says this is an important subject because “advanced technology is moving forward very rapidly in every aspect of our society today and promises great things for all of us and our children and our grandchildren.”

 

Packard sees Japan and the U.S. at the forefront of this high technology revolution and he says “…the question we are here to discuss at this conference is how can we cooperate to improve the contributions of technology to our respective societies and to the rest of the world as well.”

 

Since the production of new products and services is a competitive process, Packard asks “…why should we cooperate in high technology, why shouldn’t  we just compete and let the cards fall where they will.”

 

Before discussing the question of “cooperation or competition,” Packard relates a story which took place in Palo Alto when HP had about ten employees. He and Bill Hewlett had decided to develop and manufacture general purpose electronic instruments. The leading company in that field was General Radio, founded by Melville Eastham. Mr. Eastham called on Dave and Bill in 1939 and they expected him to be critical because they had decided to go into competition with him.

 

“Mr. Eastham, much to our amazement, relates Packard, “said he thought competition would be good for both of us. Not for the obvious reason that it would encourage both of our companies to work harder but for a much more important and much less obvious reason.

 

“He said that given the rapidly advancing electronic technology both of our companies were bound to develop new instruments utilizing new principles and new concepts in measurement. He said these new ideas would catch on much faster if two or three firms proposed them than if they were the exclusive product of only one firm.

 

“We have had many areas of friendly cooperation and this friendly cooperation has helped us both succeed in our business enterprises. We used to meet at least once a year – visited each others labs.”

 

 

“Thus,” Packard says, “I became convinced early in my professional career that cooperation and competition are not mutually exclusive but indeed can and should be beneficial to both parties. We had a firm policy not to copy a competitors product but to do better. And we had an open door policy at our laboratories.”

 

“I believe that all of our firms which are engaged in new technology products will benefit from a relatively free flow of new knowledge. In fact, in the field of electronics there has been a great deal of cooperation in the exchange of new technology both here in the United States and between the U.S. and Japan.”

 

Packard agrees “There are occasional areas where a technological break through can be made by an individual company and can be exploited by exclusive protection. In most cases, additional participants will accelerate the product’s development and the public acceptance of a uniquely new product. In today’s maze of new technology, cooperation, even among competitors, will advance the cause of all.”

 

“Actually, this is a very complicated problem that is being discussed at this conference because, while it is possible to make a good cause for cooperation in general, when one looks at specific situations one can find areas where broad cooperation is important, also areas where new technology must be tightly controlled, for example in areas of national security and also where a private firm has an unique position in some new technology.

 

“Cooperation between our two countries is very important in basic research. In searching for new ideas it is often the collaboration of several people that results in a major contribution. A few new basic scientific concepts are the result of an individual’s contribution. More often it is a team effort or the synergism of several different approaches to a study of the problem. This, in my view, argues for the most extensive cooperation among laboratories doing basic research work. Anyone who has been working in the field of high technology, electronics, genetic engineering, aeronautics – whatever – knows about a great many things to be done if only the technology were available.

 

“I think there is no doubt that the advance of high technology will be accelerated by extensive cooperation, not only between the United States and Japan but among all nations in basic research.”

 

“This recommendation for more cooperation in basic research may not have much meaning for those of you in small, high technology companies when you are working day and night to get out that new product. In the long run you will succeed or fail by the market acceptance of your new product. Your chance of success will be much greater if you can develop a new product, clearly ahead of the field. To do this the technology must be available and you must know about it. In the final analysis all of us in the high technology industry live on the output of basic research activity.

 

Packard says he would now like to discuss “some of the specific ways high technology companies can cooperate in their work.

 

“One important approach is licensing of patents or know how. Over the years our company has received a great deal of technological assistance through cross licensing In the field of electronics most patents are generally available through reasonable license terms.

 

“The strategy most firms follow is to have an aggressive patent policy to obtain as many patents as possible and then to use patents to negotiate license agreements for  other technology to support their work.

 

“We prefer to do this through broad, royalty free cross licenses with a lump sum prepayment negotiated to balance the respective contributions of the two parties.”

 

“We have enjoyed excellent cooperation with Japanese firms in negotiating cross license agreements and both parties have benefited from this cooperation.

 

“We have also undertaken a number of joint ventures in R&D with Japanese firms. We have preferred not to have highly structured agreements and this seems to match the Japanese approach.

 

“The agreement will be generally about two pages long. Instead of trying to anticipate all the problems and cover them in the agreement in detail, we simply include a statement to the effect that if difficulties are encountered, we will endeavor to sit down with them and negotiate a solution.

 

“It is my impression that the most effective benefits our company has received from R&D agreements come about when a good personal relationship develops between the people who are actually doing the research work. That approach has worked for us for many years here in the United States and during the last few years it seems to be working for us the same way in Japan.

 

“There are some problems in getting a good working relationship started with Japanese partners. One our people have noted was that you have to make at least two trips to Japan just to get acquainted with your prospective partner, to develop some understanding and confidence. After both parties are satisfied there will be some mutual benefit in the relationship, good working relations between the people doing the research work seem to become established and not much top level attention is needed to keep the program moving ahead.”

 

Packard describes some new approaches to cooperation in the field of biotechnology. “These are in effect research partnerships with large front end payments to help carry the relatively high cost of new product development in this field. …This approach provides an important means of access to this new technology but it is much too early to know how well this approach will pay off for the participants.”

 

“Military weaponry,” he says, “is one other area of cooperation that is beginning to open up to industry in U.S. and Japan.

 

“As you know,” Packard says, “a large part of the total R&D expenditure in the United States is for military work. Total R&D spending in U.S. is in excess of $90 billion and federal spending is about 47% of the total. It is interesting to note in passing that private R&D funding reached that of the U.S. government in 1978 and is increasing faster than federal funding.

 

“Private funding for R&D in the United States exceeds that of Japan and West Germany combined.

 

“But defense spending on R&D is substantial and there is an opportunity for Japanese industry to receive some benefit from this work.

 

“The basic Japanese policy for the development and production of defense equipment which was announced in 1970 stated Japanese government preference for acquiring military equipment from Japanese domestic R&D and production efforts. Japan has been developing and manufacturing military equipment for its self defense forces. This equipment includes armored personnel carriers, tanks, telecommunication and electronic equipment.

 

“Also, Japan has licensed production of the F15 fighter, the P3C anti submarine aircraft, the Hawk surface to air missile, as well as other items. Most of this equipment is licensed from U.S. firms but also some licenses from European firms are involved.

 

“Recently there has been some discussion of joint U.S.-Japanese development of military equipment in Japan. I believe this would provide an excellent opportunity for cooperation between our countries. Japanese know how in high tech electronics and in high quality production could make a very useful contribution to our joint military capability. Such joint R&D would also provide useful fall out for civilian products. In addition, many such products could be dual purpose, useful that is for both military and civilian applications. Japan could consider the export of dual purpose equipment although probably not the export of strictly military products.

 

“Let me conclude by saying that I believe this is a very important subject on the agenda of this conference. Japan and the United States have an increasingly important role of sharing world leadership in the future.

 

“The question is not which country will develop a dominant position for there will no longer be an overall dominant position in high tech industry in the future. One country may excel in certain areas while the other country will excel in others. With the rapid progress in the generations of new knowledge through basic research the situation will be continually changing. The years ahead will provide unlimited opportunities for both of our countries. The opportunities will be better for both of us if we can maintain an atmosphere of cooperative competition in high technology.”

 

3/13-14/84, Copy of the printed program for the conference

3/13/84, Copy of a printed pamphlet containing a brief biography of the speakers

3/14/84, Copy of a printed invitation from the officers of The Japan Society of Northern California to a reception the evening of 3/14/84

9/7/83, Letter to Packard from Maria Simpson, Project Director for The Conference Board inviting him to be one of the speakers at their conference on Japanese-American cooperation.

9/27/83, Letter to Packard from Maria Simpson saying she is delighted that he has agreed to speak at their conference, and giving information on conference arrangements.

11/30/83, Letter to Packard from Phyllis R. Herbert conference manager for The Conference Board, discussing arrangements for the conference.

1/19/84, Letter to Packard from Joseph L. Near, Director Public Relations for The Conference Board, asking for a copy of the text for this speech to be furnished to the press.

2/6/84, Letter to Packard from Phyllis Herbert discussing conference arrangements

2/27/84, Letter to Packard from Phyllis R. Herbert, conference manager for The Conference Board, discussing arrangements for the conference.

3/13/84, Copy of a typewritten sheet entitled, ‘Notes of Session Procedures for Speakers’

3/13/84, Copies of two charts showing ratio of research spending to GNP for several countries

 

 

Box 5, Folder 5 – General Speeches

 

May 13-14, 1984, 100 Years from the Carbon Arc to the Silicon Chip, IEEE Centennial, Boston MA

 

5/14/84, Copy of typewritten text of Packard’s speech

 

Packard says he was recently sitting on the deck of his house in Los Altos Hills at dusk, watching the thousands of lights coming on below – all over Silicon Valley. There were the bright sodium vapor lights along the highways, incandescent lights, traffic lights, many colored signs, airplane lights, diesel electric trains, satellites in the sky. There were power lines, telephone lines – over a thousand laboratories and factories making silicon chips and computers.

And he thought how much the world had changed since 1884 when AIEE was founded. What would he have seen from this spot a hundred years ago, in 1884, he wondered.

 

“There might have been a few bright carbon arc lights here and there across the valley. There would have been a telegraph line along the railroad where the trains were drawn by steam locomotives. There would be no power lines, no telephone lines. A few kerosene lamps might be seen moving along the road on wagons or buggies drawn by horses. There were probably a few DC motors here and there but they would not have been visible. The valley would have been covered with apricot orchards and vineyards and farms, but there were no factories of any consequence. It was not yet the age of electricity in the Santa Clara Valley, nor anywhere else, but that age was about to dawn.

 

“By 1884”, Packard says, ”electrical theory had been fairly well understood although the existence of the electron had not yet been demonstrated. During the previous century the relationship between voltage, current, magnetic field and even the theory of electromagnetic radiation had been worked out. There had been Gilbert and Ohm of Germany, Gersted of Denmark, Ampere of France, Volta of Italy, Benjamin Franklin and Henry of the U.S., Faraday of England and many others….It was in 1864 that James Clerk Maxwell expressed the basic laws of electromagnetic radiation by his famous equations.”

 

“By 1884,” Packard says, “there was not only considerable theory established about electrical phenomena but there also had been some practical use of electricity. The electrical telegraph on land had been in use for forty years, the trans-Atlantic cable for eighteen years. The direct current generator had been in use for twelve years, there was extensive use of the carbon arc for outdoor lighting.”

 

Packard says the American Institute of Electrical Engineers (AIEE) was founded in 1884 – “for the dissemination of information about electric power, illumination and telegraphy through publications and meetings. The time was right, for in the two decades that followed, the development and application of electrical equipment expanded at an explosive rate.”

 

Packard tells how Nicolas Tesla announced the development of the AC motor in a paper read before a IEEE meeting in May, 1888. “George Westinghouse recognized the importance of Tesla’s work. He acquired the rights to Tesla’s patents and engaged his services, and in October of 1880, only two years later, the Westinghouse Company was awarded a contract for three, 5000 horsepower, three phase, 25 cycle, 2000 volt generators for Niagara Falls. Power was transmitted from Niagara Falls to Buffalo, a distance of 22 miles, using three phase current at 11,000 volts, a short time later.

 

“From then on the generation and distribution of electric power and the conversion of electrical power to mechanical by AC motors proceeded to expand rapidly…,” Packard adds. “It is interesting to note that electrical machinery and transmission were the subjects of nearly half of all the papers in the AIEE transactions during the first twenty years of the Institute.

 

“Illumination was the second subject included in the purpose of the AIEE, but only 10% of the papers published before 1905 were on this subject. Carbon arc lighting was in widespread use in 1884. Incandescent lamps had been built and had just become practical a year or two before. It was the development of the carbon filament for incandescent lamps by Edison in the U.S. and Swan in England at about the same time that made incandescent lamps practical.”

 

Packard says “One can see this situation of simultaneous invention repeated over and over again during the past century. This is the result of the fact that when basic technical knowledge is widely disseminated throughout the world, a way to use that knowledge to solve a common problem often occurs to several people at about the same time.”

 

As a sidelight, Packard says he can not resist the temptation to comment on the “grossly misguided current proposal by our Defense Department to censor the publication of the results of basic research funded by the Department at U.S. universities. I am quite certain that this proposal, if carried out, will do considerable damage to the advancement of all technology in the United States including technology useful for military purposes. It will not seriously hamper the Soviets’ progress in technology for military equipment unless an impregnable barrier to the transfer of technical knowledge can be place around the Soviet Union and this, of course, is impossible.

 

“Telegraphy was another area to be addressed by the newly formed Institute. There was not much more to be done in telegraphy over wires, but the telephone became a practical device available for the public shortly after 1884. Telephone service was offered to the public in Cambridge, Massachusetts in May of 1877, after Alexander Graham Bell had been given priority in his invention by the Patent Office in 1876.”

 

Packard makes a point of saying that he thinks the forced breakup of the American Telephone and Telegraph Company was a great mistake. “The assured result that I see already developing is that our country will most likely have much worse telephone service in the future and it will cost all of the users more.”

 

:”It was wireless transmission that provided the greatest attraction for scientists and engineers as the 19th century came to an end. Marconi is widely recognized as the father of radio. In 1901 he sent a wireless signal across the Atlantic. He deserves much of the credit for the development of wireless telegraphy and the radio that followed.”

 

“It has been a mystery to me,” Packard says, “that some important work done in Palo Alto, California has seldom been recognized as an important contribution to the beginnings of radio. I read about Marconi, Fessenden, Alexanderson’s high frequency alternator but not much about the Poulsen arc. Thus, I am going to take this opportunity to tell you about an important contribution to radio that took place in Palo Alto, I might say Silicon Valley, just after the turn of the century. In keeping with the title of my talk tonight I want to make the point that the carbon arc was important, not only in the beginning of electrical illumination, but the carbon arc was also important in the beginnings of wireless telephony which became radio.

 

“Young Cy Elwell made a deal to acquire the American rights to the Poulsen arc, ordered a set of equipment to be delivered, and returned to San Francisco to raise the money to pay for the deal he had made. He set up the equipment in Sacramento and San Francisco and invited potential investors to talk over the system. The demonstration was a great success, the money was raised, including an investment by David Starr Jordan, then President of Stanford University. This resulted in the establishment of the Federal Telegraph Company in Palo Alto about 1906.

 

“The Poulsen arc became the most important source of radio frequency energy for the U.S. Navy through World War I, and large Poulsen arc transmitters were still being produced in Palo Alto in the 1920s, after the vacuum tube had taken over for both the transmission and reception of radio waves.”

 

“It may be interesting to you to note that a very large electromagnet was manufactured by the Federal Telegraph company in the 1920s, after the vacuum tube had taken over, for one of the last Poulsen arc systems. This magnet was later used by Professor Lawrence at Berkeley to make the first cyclotron which opened the door to high energy physics.

 

“The AIEE did not become extensively involved in radio, and so in 1912 a new organization was established, the Institute of Radio Engineers [IRE]. The AIEE continued a minor interest in radio and through the 1930s and 1940s, when I became actively involved in the profession, an occasional paper of importance to the field, that by then had become known as electronics, was published by the AIEE.”

 

Packard tells how, around 1924, he hooked up his first vacuum tube radio in Pueblo, Colorado, and was able to hear WHO from Des Moines  Iowa.

 

“Through the 1920s radio broadcasting continued to develop, and there were more electronic phonographs, talking pictures, and some industrial applications of electronics in the early 1930s.

 

“But even in 1935 the electrical engineering profession was not quite sure about the importance or the future of radio. I studied radio engineering under Professor Fred Terman at Stanford in 1934 and the field had not yet become known as electronics at that time.,

 

“I was fortunate to get a job with General Electric when I graduated from Stanford in 1934. When I arrived in Schenectady, I expressed by interest in radio or electronics. My advisors from the company were convinced there was no future in electronics at the General Electric Company and recommended that I become involved in the more important areas of electrical engineering, such as power generation or transmission, or electric motors or other areas of electrical engineering that held great promise for the future – but electronics –no!

 

Packard says he hopes the audience will forgive him for expressing a bit of personal pride in this matter, “for next year it will be fifty years from the time I received that advice about my future career in electronics from my General Electric advisors. Today the Hewlett-Packard Company is larger than General Electric was at that time, and my Company has as much capability in electronics as the General Electric Company has today.

 

Packard tells of the transistor being invented in 1947, and integrated circuits being developed in the 1960s. In each case it took about ten years for this new technology to come into its own.

 

“The relative importance of electrical and electronic engineering was recognized by merging the AIEE and the IRE into the IEEE in 1963.

 

“Most, if not all of you, here tonight have been involved in the exciting things that have happened since that time. But the silicon chip has replaced the carbon arc and offers a very exciting future.

 

“I think it bodes well for the future of our profession and our industry that these 100 years have ended in a decade of excitement and challenge even greater than the decade of challenge at the beginning, 100 years ago.

 

Packard talks a bit about the past contributions of the IEEE before giving his thoughts about the future.

 

“Our institute has performed well its original objective of disseminating information about electrical and electronics engineering work.

 

“It has provided a strong incentive for scientists and engineers by providing a platform where they can present their work to their peers and receive accolades if the work is deserving. The IEEE has helped with standards and measures without which progress would have been difficult.

 

“Our institute has helped with the education of young men and young women –many more women today – as scientists and engineers. And the IEEE has been involved in governmental affairs from its early days.

 

“It is especially important to note that the IEEE began to develop a strong interest and involvement in the social responsibility of engineering in its early years. This subject has become of great importance during the last two decades since the work of electrical and electronics engineering has become more pervasive throughout the affairs of the world.

 

“I hope very much that the IEEE will play an even stronger and more effective role in the social aspects of our professional work during the next 100 years.

 

“During the past 100 years our profession has devoted its attention to producing electrical energy and electrical products to make the necessities of life: food, shelter, transportation, more readily available. In the next 100 years our profession will be much more involved in improving the quality of life.

 

“As the preservation of the environment and the conservation of our available energy have become high priority objectives during the past few years, all too many policies have been established and regulations adopted without adequate consideration of the basic engineering principles involved.

 

“I believe one of the most important challenges for the IEEE as it enters its second century is to make a more effective contribution to these important concerns of the society.

 

“Our work will of course involve technical innovation and development, but our profession must become more effective in dealing with the social aspects of our work.

 

“The generation and distribution of electrical energy will continue to be an important job during the next 100 years. We must find ways to use electrical energy more effectively and to generate it with less dependence on fossil fuels.

 

“One very important challenge will be to make nuclear energy safer, more reliable and more acceptable to the public. Nuclear energy has fallen into disfavor in recent years but I am sure it will come back to its rightful place sometime in the future.

 

“Our profession will do exciting things in space. There will be both manned and unmanned work stations in space and perhaps a manned station on the moon by the turn of the century.

 

“I doubt that we will see a large solar energy space station beaming large amounts of electrical energy to the earth with microwaves, but I could be wrong.

 

“I am sure the electric automobile will be in widespread use long before the end of the next 100 years. There will be a permanent shortage of fossil fuels and we will not be able to afford to squander the diminishing supplies on personal automobile transportation. I am quite sure the electrical engineering profession will come to the rescue on this problem long before 2084.

 

Packard believes the silicon chip “will continue as a star performer throughout the next 100 years. The capability of these remarkable devices will increase by several orders of magnitude and their effective cost will continue to come down.

 

“We are clearly becoming a society of information and communication rather than a society of industry. Nevertheless, industry will continue to expand the production of goods and services and energy. Industry will simply become much more efficient in using materials, energy and manpower, and the silicon ship is already becoming involved in improving the performance of the smoke stack industries.

 

“As we become a society of information and communication, I suggest to you that the IEEE could make an immense contribution by helping the world to become not only a society of information and communication, but a society of wisdom and communication. Information and communication are essential elements in achieving wisdom and I believe this is a real challenge to think about.

 

“One of the exciting new fields of technology is genetic engineering. This work will certainly expand our ability to control disease and extend the span of human life.

 

“In 1900 life expectancy was a little over 40 years in the industrialized countries. A child born this year will have a life expectancy of 80 years. Some people believe that life expectancy could again double in the next 100 years, in good part as the result of genetic engineering.

 

“I find this an awesome prospect and I raise it partly to indicate the excitement about the future in other fields. But also genetic engineering may have some impact on our profession in addition to offering the participants a longer and more productive life.

 

“There is an electrical aspect to most biological phenomenon. The human brain is an electronic computer with infinitely more capability than anything we can now design and build. Genetic engineering just might make biological material available to replace the silicon chip. This could bring many orders of magnitude of improvement in computers, electrical sensors, and perhaps other devices. Work is already being done in this field.

 

“I would like to conclude with a general observation about the opportunities of the next 100 years. It is a well known and widely applicable principle that the rate of change is proportional to the level of activity. This assumes that the process is not resource limited – or  artificially limited in some way.

 

“Some aspects of electrical and electronic engineering will be resource limited in the next century and the rate of progress will be slow. Many opportunities, on the other hand, will be dependent only on human imagination and human ingenuity which are, of course, unlimited. And there will be areas of exponential growth for us in the future.

 

“We can take much pride in the accomplishments of the IEEE over the past 100 years. We can look forward to the next 100 years not only with hope, but I believe confidence that the second 100 years of the IEEE will be even more challenging, and more productive than the first.

 

“I only wish I were young enough to start all over again.”

 

5/13/84, Copy of printed Schedule of the IEEE Centennial Celebration

5/13/84,  Copy of pamphlet with brief schedule of events

5/13/84, Copy of typewritten sheet  summarizing a history of IEEE

5/26/82,  Letter to Packard from Dr. Robert E. Larson, Institute President, inviting his participation in the 1984 Centennial Day celebration.

6/14/82, Copy of a letter from Packard to Dr. Robert E. :Larson saying, “While I am reluctant to give a commitment this far in advance, I would be pleased to take this assignment subject to the ‘fortunes of nature’ between now and then.”

4/2/84, Letter to Packard from Richard J. Gowen, 1984 IEEE President, thanking him for agreeing to be ‘their speaker.’

5/3/84, Letter to Packard from D. S, Brereton, of IEEE, giving details of the Celebration

5/3/84, Letter to Packard from Thomas C, White, IEEE, discussing press arrangements

5/9/84, Copy of a letter to Thomas White from Margaret Paull, [Packard’s secretary], enclosing a copy of Packard’s speech

5/14/84, Copy of  room bill for Packard from The Westin Hotel in Boston

5/29/84, Copy of a telegram to Packard from Walker Cisler, Chairman Overseas Advisory Associates, Inc., asking for a copy of his speech

5/30/84, Letter to Packard from Joe Millington, HP Personnel Representative, saying he has been an employee for 10 months. He asks for a copy of Packard’s speech, and says ‘it is such a joy to work for our company.’

 

Newspaper clippings covering speech:

5/20/84, Boston Globe

5/20/84, Photocopy of article from Boston Sunday Globe

5/27/84, Mass High Tech, photograph only

5/28/84, Computerworld Weekly

5/28/84, Photocopy of clipping from Mass High Tech

 

 

Box 5, Folder 6 – General Speeches

 

May 27, 1984, Report On Federal Laboratory Review Panel

 

5/27/84, Typewritten text of Packard’s remarks

Packard had chaired the Federal Laboratory Review Panel in 1982, and he was asked by the American Association for the Advancement of Science to comment, at a symposium they were holding, on their findings and what progress had been made by the laboratories since then.

 

In his remarks Packard says the Review Panel was appointed in March, 1982, and asked to “look at the laboratory missions, identify impediments to performance and determine whether the nation is getting the optimum return on its substantial investment at the Federal Laboratories.

 

Packard explains that with some 700 Federal laboratories it was not possible to physically visit each one. As an alternate the Panel decided to visit laboratories supported by The Department of Defense, Agriculture, Commerce, Energy, Health and Human Services and National Aeronautics and Space Administration. The Panel members met with top agency representatives responsible for laboratory management, reviewed past studies, invited comments from industry and university people. Most of the Panel members had worked with Federal laboratories and brought their own experiences as well.

 

Packard says the Panel “identified many highly competent scientists and engineers, important research programs and unique large research facilities at the Federal laboratories. The magnitude of many of the programs and facilities were beyond the means of universities and industry and thus had a unique role in the advancement of science and technology.

 

“The Panel also noted,” he says, “a number of serious deficiencies at the Federal laboratories that limit both the quality and cost effectiveness of the work being done there. These deficiencies are not entirely new but have become more serious in recent years and the Panel decided it was time for these deficiencies to be corrected.

 

Packard presents the recommendations of the Panel:

 

Recommendations on the subject of missions:

 

1.1    “As a top management priority, Federal agencies should re-examine the missions of their laboratories.

1.2   The size of each Federal laboratory should be determined by its mission and the quality of its work.

 

“We noted that the preservation of the laboratory is not a mission, but we did not recommend that any specific laboratory should be terminated.”

 

“The second finding of the Panel related to personnel at the Federal laboratories. Many of the laboratories are having difficulty in attracting, motivating and retaining qualified scientists and engineers. The most serious problems were at laboratories under Civil Service regulations. Even at some of the laboratories which were contractor operated there were less than optimal personnel policies.

 

“The Panel made several recommendations in the personnel area:

 

2.1  “Administrative and legislative actions should be undertaken to create personnel systems for scientific and technical people independent of current Civil Service procedures.

2.2   Contracts governing government owned, contractor operated laboratories should be administered so as to permit the contractor to carry out an independent salary administration.

2.3   Personnel ceilings should not be used in addition to budgetary control of Federal laboratories.

 

Re resource funding:

 

3.1    “The Congress and Office of Management and Budget should authorize funding for the Federal laboratories on a predictable multiyear basis so research activities can be properly planned.

3.2    At least 5% and preferably up to 10% of the annual funds should be devoted to independent research and  development at the laboratory director’s discretion.

3.3    Federal laboratories should be allowed to carry remaining funds into the next fiscal year.”

 

Fourth finding, management:

 

“There was far too much detailed direction of laboratory activities from agency headquarters and lack of accountability for the quality and relevance of the work being done. Far too many reports were being required.”

 

Recommendations:

1.1    “Each Federal laboratory should have a more effective oversight function, generally a committee responsible for assuming the continuing excellence of the laboratory.

1.2    Federal agencies should rely to a greater extent on a peer review process for funding basic research.

1.3    The laboratory director should be appointed for a finite term and be held accountable for the quality, relevance and productivity of the laboratory.

1.4    The administration and the Congress should work together to strengthen the DOE laboratories. In particular, the Congress should make a substantial reduction in the oversight of DOE research and development.”

 

The fifth finding – “laboratories too isolated from universities, industry, and other users of their research.”

 

Recommendations:

 

5.1    “Federal laboratories should encourage more access to their facilities by universities and industry.

5.2    Laboratories should have more flexibility in contracting to be able to contract with universities and industry for research.

5.3    DOD laboratories should have a larger role in working with military operating forces.

 

“The report of the Panel was reviewed by the full White House Science Council and submitted to Dr. Keyworth in May of 1983.

 

“I had the opportunity to brief the President and the Cabinet on the report in July of 1983 and in August the President directed the Office of Science and Technology Policy and the Office of Management and Budget to respond to the central thrust of the report.

 

“I also briefed the Secretary of Defense, the Secretary of the Department of Energy, the director of NASA and was assured of their support in implementing the recommendations.

 

“In response to the President’s memorandum, the Federal Coordinating Council for Science, Engineering (FCCSET), and Technology established a Committee on Federal Laboratories to  monitor implementation of the Panel’s recommendations. The FCCSET  was asked to report on July 1, 1984 the progress of implementation of the recommendations.”

 

“In general, the direct agency response to our recommendations has been good but it is too early to determine how much real improvement will come from this response.

 

“Packard says, “Some reductions have been made in the size of the laboratories and at least the panel’s recommendations in respect to laboratory size have been recognized.

 

“In the personnel issue there has been a good deal of work done in:

The Development of model legislation –

Assessment of actions that can be taken without legislation –

An examination of the operation of government owned, contractor operated laboratory operating policies – and

The collection of proper statistical information.

 

“While good progress has been made in developing the necessary model legislation to get laboratory personnel administration out from under Civil Service procedures, it is not yet clear whether the appropriate legislation can be enacted.

 

“Some of the bureaucracy that will be affected is having second thoughts and it will probably take a good deal of work with the Congress to get legislation passed. We may need the support of organizations like the AAAs to get this job done.

 

“The model legislation included these key features:

  1. Permits agencies to establish alternative personnel systems
  2. Applies to scientific and technical personnel in Federal laboratories and throughout agencies if broader coverage is deemed essential
  3. Bases pay on performance rather than longevity
  4. Creates broad pay bands
  5. Simplifies job classifications
  6. Allows pay cap to be waived for up to five percent for specifically qualified scientific and technical people
  7. Permits agency head to classify positions and fix compensation to be competitive with comparable positions outside government
  8. Allows inclusion of positions now in the Senior Executive Service
  9. Permits Naval Weapons center and Naval Ocean Systems Center personnel systems to become permanent.

 

“There are some personnel actions that do not require legislation that are recommended by the interagency working group.

 

  1. “Exclude Federal laboratories from current proposal to reduce the number of employees in Civil Service grades 11 through 15.
  2. Allocate to the laboratories more positions for specially qualified scientific and technical personnel under provisions of 5 USC 3104.
  3. Provide government operated laboratories with blanket permanent direct hire authority for all professional, scientific and technical positions in the laboratories.
  4. Provide government operated laboratories with blanket, direct hire excepted service appointment authority for research associates.
  5. Include special rate schedules for engineers and other manpower shortage occupations in annual cost of living adjustments.

 

“There are considerations underway about what can be done to eliminate personnel ceilings and allow the laboratories to be under budget control only.

 

“The interagency group is working on multiyear funding for R & D. This will have to be considered by OMB and requires agreement of the administration and the Congress.

 

“It will take further work to get multiyear funding approved for the Federal laboratories but I believe it can be done.

 

“Considerable progress has been made to increase discretionary funds for the Federal laboratories.

 

“Carryover funding situation is quite variable. DOE and DOT and DOC have no time limit on R & D appropriations. The DOD has two year obligation authority but DOD…[end of text].”

 

A sheet handwritten by Packard contains some additional notes – but difficult to decipher:

 

“Legislation –

 

“Missions should be set by Administration

 

“Might require [  ?  ] reports on what missions should be.

 

“Put some DOD [   ?   ] in other than DOD laboratories.”

 

10/7/83, Letter to Packard from Albert H. Teich, Manager, Science Policy Studies of the American Association for the Advancement of Science inviting Packard to speak at a symposium entitled ‘The Role of Federal Laboratories: Toward a New National Policy?’

10/19/83, Copy of a letter from Packard to Albert H. Teich saying he would be pleased to speak at their symposium

10/25/83, Letter to Packard from Albert H. Teich saying he is pleased Packard will be able to participate and discussing possible dates.

11/8/84, Copy of a letter from Packard to Albert H. Teich discussing dates

1/18/84, Letter to Packard from Albert Teich discussing possible topics for Packard to cover

1/27/84, Copy of a letter from Packard to Albert Teich with further discussion of topics.

3/5/84, Copy of a flyer from AAAS to symposium speakers discussing copies of speech text

5/30/84, Copy of status report  on a ‘Utilization Study – Pilot Stage, which involved visits to five companies, including HP, preceded by questionnaires to be completed by company lab personnel

June 1984, Note to Packard from John Adam, Associate Editor of the ‘Spectrum’ attaching an article they with to publish covering Packard’s speech at the symposium. A pencilled notation thereon says “Called OK 6/19/84.

 

 

Box 5, Folder 7 – General Speeches

 

June 13-15, 1984, New Products From Advanced Technology, German/American Seminar, Bonn, Germany

The seminar was entitled “Venture Financing and Foundation of Technology-Oriented Companies

 

Typewritten text of Packard’s speech

 

Packard says that he is pleased to participate in this conference “on how to contribute to economic growth and create new jobs by developing new products based on advanced technology.”

 

Rather than simply telling of his experiences at the Hewlett-Packard Company, he says he would like to first look at the subject from an “historical view,” – describing some general principles “that encourage success in new product development, and these same principles have resulted in successful new product development in many places and over a very long rime in the past.”

 

“The first principle,” Packard says, “is that the driving force for the development of new products is not technology, not money, but the imagination of people. Basic technical knowledge often makes it possible to do things that could not be done otherwise.” He adds that a complete understanding of the basic scientific principles involved isn’t always necessary – and he gives Edison’s development of the electric light bulb, and deForest’s invention of the vacuum tube as examples.

 

He also gives a corollary of the first principle “…there are many examples where new scientific principles have been discovered and it took time, and often someone other than the scientist who discovered the principles, for a useful new product based on those findings to be developed. A good example of this situation is in the early development of wireless, or radio.

 

“James Clerk Maxwell developed the scientific theory of electromagnetic radiation in 1865. Over twenty years later Hertz devised a rather simple experiment to demonstrate that electromagnetic waves actually existed. Ten years later Marconi in England and Professor Popov in Russia achieved wireless transmission of signals over distances measured in miles.

 

“There is often a delay between the scientific discovery and the successful product even in recent years. The transistor was demonstrated first in 1947, but it was nearly ten years before it came into widespread use.”

 

Packard gives two reasons why a new discovery may not be converted quickly into widespread use. “The scientist working at the forefront of new knowledge is often not interested in new products. More important, particularly in today’s world, a new product requires a large combination of scientific knowledge, not just one new idea. Often an innovative development requires a team of people working together and bringing a wide range of knowledge to the development.”

 

Packard says he raises this point because it is often thought that if a country would only increase its support of basic research, the development of new high technology products would be increased. “Most new basic science,” he says, “is available to anyone in the world (with a few exceptions that are classified for national security reasons), and so the differences among countries in their development of new products can not be explained on the basis of the scientific knowledge available to people working on new products.”

 

Packard emphasizes the point with the example of Japan and the

U.S.S.R.  “Japan does very little basic research, yet has perhaps the most impressive new product program in the world today. Japan simply depends on basic research done in other countries.

 

“The U.S.S.R. has one of the best programs of basic research of any country today, yet has the least impressive new product development program. The U.S.S.R. is at least a decade behind the United States and Japan in electronic products. The Soviets try very hard to catch up by buying or stealing new product ideas from the United States, but for that matter, so does Japan.”

 

Packard says the Hewlett-Packard Company “does little basic research. All of our company’s new products are based on scientific knowledge that is available to virtually everyone else in the world. We do some very important research that has helped us achieve a lead in many new products over the years, and I would like to tell you what we do.

 

“To be useful for new product work, research has to be focused. Our company decided to concentrate on general purpose electronic measuring instruments from the beginning in 1939. Our first few products were based on the ‘feedback principle’ that was developed at the Bell Telephone Laboratories a few years earlier. We also realized that if, instead of using the knowledge available to everyone else, we could get ahead of the game by research, it would give us an important advantage. Accordingly, we have done a great deal of research in fields that would be directly applicable to our products and we have often been able to gain a lead on our competitors.

 

“Industrial research of the kind we have done at Hewlett-Packard is very important to the development of new high technology products, but to be effective it must be highly focused.”

 

“Highly focused industrial research can make an important contribution to new product development but at the same time, many companies have successful new product programs without much industrial research of any kind.

 

“Money can be an important factor in encouraging new product development. Money is important as an incentive to motivate innovative people and it is often a necessity to support experimental work and development work. The need for money varies greatly in different situations. Bill Hewlett and I started the Hewlett-Packard Company in 1939 with an investment of only $500. The dollars were larger in those days, but it did not require a great deal of equipment either to experiment or to build a product in electronics in 1939. The situation is different today. Work in large scale integrated circuits requires millions of dollars worth of facilities and equipment. The development of a new product in the field of genetic engineering is costing in the range of $50 million before the product can be marketed. The development of a new commercial jet aircraft may require the investment of $2 billion before the first aircraft can be delivered to a customer.”

 

“In the case of Hewlett-Packard Company, we spend about 10% of our sales dollar on new product development and with these funds, we finance hundreds of new product projects in some fifty of our divisions all over the world.

 

“The $500 million dollars we spent last year in new product development will add billions of dollars to our sales over the next few years. In 1983 over two thirds of our orders were for products introduced during the past four years.”

 

“I know there has been a great deal of talk about commercial fall out from government funded research and development, including that done for military purposes. There has been some important fall out such as the development of commercial jet aircraft from military jet aircraft. I would not consider this to be an area where a major contribution to the development of new commercial products can be made. There is, however, a great deal of research and development being supported by governments all over the world. The extent to which this work might make a more effective contribution of new commercial products should receive continuing attention.

 

“Last year I chaired a panel to study the U.S. Federal Laboratories. There are some 700 of them and they are supported at a level of nearly $20 billion. The panel recommended that a closer relation between the Federal Laboratories be established and that the laboratories should not undertake the development of commercial products without industry participation.

 

“Thus far,” Packard says, “I have talked about research and money, and I have intended to convey the idea both are important to better new product development. I hope you may have concluded that I do not believe these are the most important factors.

“It is said that necessity is the mother of invention, and any successful new product is the result of a person or a group of people deciding there is a need for a new product or service and having the imagination and the motivation to develop the product or service.

 

“I do not know whether a person’s imagination and therefore his innovative ability can be developed, but certainly it can be identified and encouraged. It seems to me then, that identifying and encouraging innovative people may be the most important thing that can be done to improve the effectiveness of new product development, whether it be in a company or in a country.

 

“We have given this matter a great deal of consideration in the Hewlett-Packard Company from the very beginning. In the first few years, Bill Hewlett and I participated actively in the development of our first products. Our first product came from a very innovative idea that Bill Hewlett had on the negative feed back principle. He did this work while he was still in the laboratory at Stanford.

 

“As the company grew, we realized our future would be determined by our ability to attract and motivate engineers to develop successful new products. With help and encouragement from Professor Frederick Terman

we undertook to identify as many bright young graduates as we could afford to hire each year from the leading technical universities across the United States.

 

“In hiring young people from U.S. universities, we learned that some universities like Stanford had given their students a good deal of encouragement in becoming involved in innovative new product work, sometimes to the point of encouraging them to go out after graduation and start new companies. This is clearly the reason why over a thousand new electronics companies have been established around Stanford University in Silicon Valley over the last two decades.”

 

“While I do not believe that the way we have approached the problem of new product development at the Hewlett-Packard Company is the only way to do the job, it has at least been moderately successful.

 

“In the first place, it became clear that it was essential to know what a potential customer might need and might want before a new product project went too far. Often the need was known before the project was started, but the customer’s ideas were always helpful as the development progressed. Thus we tried to establish and maintain a close relationship between our development engineers, our customers, and we also kept our marketing people closely involved. Often it was the marketing people who came up with an idea for a new product.

“We also realized that the cost and quality of a new product was highly dependent on our manufacturing capability. We decided it was essential to bring manufacturing people into every new product development program at an early stage, and as a corollary, keep development people involved

until the production of a new product was going smoothly.

 

“Thus we came to understand that an effective new product program was a team effort involving development people, manufacturing people and marketing people.”

 

“These ideas encouraged us to structure the Hewlett-Packard Company into a relatively large number of small divisions, each with an area of product responsibility, and each with the responsibility to develop, manufacture and sell products to provide leadership, if  possible, in its product area. The company has over fifty such divisions world wide.

 

“Each division has a great deal of autonomy, is measured by its performance and requires a minimum of overall guidance from top management. Top management does have the responsibility to see that performance standards are set and performance is evaluated. There are also a number of policies, financial and personnel for example, that are kept as uniform as possible on a company wide basis.

 

“It is interesting, and I believe important, to point out that the country where these divisions have been located has not made much difference in their performance  We have several divisions located in the Federal Republic of Germany, and they have been just as effective in developing successful new products as those in the United States, Japan, or elsewhere.

 

“In conclusion, I believe the actions which can be taken at the government level to improve new product development are very limited. I do not believe Japanese industrial policy has been anywhere as important as the highly competitive and highly energetic work of Japanese people in the Japanese success story.

 

“The Government can be helpful in some areas of tax policy to encourage venture and reward success. Perhaps the most important thing any government can do is to help establish an environment in industry and education that encourages entrepreneurship and rewards successful innovation.

 

“Before concluding I would like to say a word about what I think are the fields of opportunity today. Predictions about the future of science are always risky, but there are at least several good areas of opportunity for the next decades.

 

“Electronics will continue to be an area of opportunity for innovative new products. The field of general purpose computers is becoming very competitive and the chance for success for a new firm or a new venture in this field is not very high. Many small firms that entered this field during the last few years are going to fail, a number have already gone bankrupt.

 

“There is talk about the opportunity to develop a super computer. This is a limited field and it would be very difficult for a new firm to compete with those already working in this area.

 

“On the other hand, microprocessors and electronic sensors are invading every facet of the world’s economy. It would seem to me that this field is still one of great opportunity.

 

“Genetic engineering is a new area of great promise in high technology and appears to have almost an unlimited future. There are still some hurdles to overcome – the regulatory process has not yet been stabilized. Manufacturing costs and quality control have not been demonstrated. There are some real challenges in this field, but challenges make an opportunity for innovation.

 

“The development of better products in old established fields is often limited by the materials available and this innovative work on new materials will certainly result in the improvement of older products and also exciting new ones.

 

“In conclusion, I am quite sure the opportunities to develop successful new high technology products will be just as great in the years ahead as they have been at any time in the past.

 

“I wish I were young enough to start all over again.”

 

Undated, Two pages of notes, handwritten by Packard. It is not clear whether he used these with the above talk or not.

 

The outline starts with –

“Group I

 

“I Entrepreneurship

 

“Small business not viewed with great favor

Government procurement policy changed

Major corporations should be encouraged

 

Government should make reports on progress

Tax concessions should be given to small companies

Red tape on auditing books could be cut

Help should be given to prospective people

Fulbright scholarships

Industrial parks

Government help should be given

Publish magazine for tech firms”

 

“Group 2

 

[No notes]

 

“Group 3

 

“Positive relationship between entrepreneurs and venture capital people

Venture capital – risk involvement

Active note – partnership relationship”

 

6/11/84, Travel and meeting schedule for Mr. and Mrs. Packard

6/13/84, Typewritten seminar schedule for Mr. and Mrs. Packard

6/13/84, Printed copy of the seminar program – written in English on one side, German on the other

6/13/84, Typewritten list of seminar participants from the United States

6/13/84, Typewritten list of seminar participants from Germany

6/13/84, Typewritten program for a banquet to be held and June 13. Dr. Risenhuber, Federal Minister of Research and Technology will preside and speak.

6/13/84, Typewritten list of seminar speakers giving a short biography of each – in German

6/13/84, Copy of typewritten list of what appears to be the names and addresses of seminar attendees

6/13/84, Copies of what appear to be worksheets for three work groups – typewritten and written in German

6/14/84, Typewritten seating arrangement for luncheon and English translation of remarks to be given by Chancellor Kohl

6/14/84, Typewritten copy of speech at the seminar by Peter L. Wolken, entitled ‘Experience Gained with Venture Capital in the United States of America’

6/15/84, Copy of typewritten speech given at the seminar by Dr. Otto Graf Lambsdorff

 

Newspaper clipping

6/5/84, San Francisco Chronicle discussing  Chancellor Kohl’s relations with the press

 

3/29/84, Copy of a telex from Arthur Burns, Ambassador to Germany to Packard asking if he will participate in a seminar on technological innovation being organized by Chancellor kohl in Germany

4/13/84, Copy of a letter from Packard to Eberhard Knoblauch General Manager of HP in Germany, telling him of the seminar and asking that he give Packard any thoughts he may have on why Germany “is not keeping up with the U.S. and Japan in technology

5/9/84, Copy of a letter to Packard from Dr.  Heinz Riesenhuber inviting him to participate in the seminar

5/23/84, Copy of a letter to Packard from Dr. Peter R. Weilemann, discussing arrangements for the seminar.

6/13/84, Copy of an invitation from Dr. Heinz Riesenhuber to Mr. and Mrs. Packard for dinner on the evening of 6/13

6/14/84, Copy of an invitation to Packard inviting him to lunch on June 13

6/14/84, Copy of an invitation from Ambassador Burns inviting Mr. and Mrs. Packard to a reception 6/14

6/14/84, Hand printed letter to Mr. and Mrs. Packard from George and Walburga Kieferle, who says he designed several HP buildings in Germany, and wants to send some flowers

 

 

Box 5, Folder 8 – General Speeches

 

November 27, 1984, U.S. Japan Relations, New York, NY

 

11/27/84, Copy of typewritten text of Packard’s speech

 

Packard says he is glad to be here to discuss the report of the United States-Japan Advisory Commission. “The Commission began its work in May of 1983 and submitted its final report to President Reagan and Prime Minister Nakasone on September 17, 1984.

 

“The Commission was asked,” he says, “to consider all aspects of the U.S.-Japan relationship, not just trade and economic affairs. The full commission held four meetings with both U.S. and Japanese members present and both sides met a number of times and in addition, there were a number of informal meetings among the various members.”

 

Packard says he was pleased they were able to have “very frank as well as friendly discussions.”

 

When they started, Packard says he “had serious doubts that we could contribute much that world be useful since the subject of U.S.-Japan relations had already been studied in every aspect by literally hundreds of knowledgeable people. If nothing else, I hope our report will at least help to underscore the great importance of the U.S.-Japan relationship to both countries, and particularly to the future of peace and prosperity in the entire Western Pacific region.”

 

Packard says the most important message of the report of the commission is contained in the introduction which he proceeds to read [and which is quoted herewith].

 

‘The Japan-United States relationship over the past four decades has developed into one of the most unusual relationships between two major nations. Beginning with almost complete dependence on understanding and assistance from the United States, Japan has risen from the ashes of World War II to become one of the world’s powerful nations. As recently as 1960, Japan’s economy was only one-twelfth the size of the American economy. Today it is almost half, and its per capita income is nearly equivalent to the U. S. level. Our two countries together account for one-third of the world’s annual production of goods and services and three-fourths that of the Pacific basin nations.

 

‘The Japan-United States bond has become strong because of a wide range of common interests and attitudes, and because there have been few, if any, areas of basic conflict. It is fair to say that no two countries in the world share the essential ingredients of a vital bilateral relationship – economic, political and security ties – in greater degree than the United States and Japan.

 

‘The future success of this relationship is of great significance to world peace and prosperity, especially to that of the Pacific basin region. We believe that if Japan and the United States can manage their relations well and build even stronger bonds of cooperation, they have the capability to lead the Pacific region into a new era of progress and lasting peace. Our cooperation can be a powerful force propelling the developing countries of East Asia and the Pacific toward living standards comparable to those of the advanced, industrial democracies. It will also be of tremendous importance to our own prosperity and that of other advanced countries.

 

‘The U.S.-Japan Advisory Commission has studied nearly every aspect of our relationship: economic, including industrial, agricultural, and financial relations; security affairs; political and diplomatic relationships; and scientific and technological relations. We have noted particularly that as economic interdependence has increased, points of friction and conflict have increased. We do not believe these problems have arisen because of any divergence of basic national interests. We believe, however, that a more effective management arrangement is required to deal properly with the many complex problems that occur between the two countries.

 

‘Improving the management of the relationship, in our judgment, is the key challenge to the leaders  of the two countries. The section that follows, which highlights this crucial issue, proposes solutions intended to break out of the pattern of recurrent cycles with peaks of friction and frenetic negotiation. In view of differences on our governments and administrative structures, each government will have to work out the details of improved management arrangements. The essential ingredients, however, call for the President and Prime Minister to set overall U.S.-Japan policy; establish and periodically review both short-term and long-term agendas; and assure that internal mechanisms for implementing decisions and monitoring performance are well in place, with provision for coordinated input by appropriate government agencies as well as representatives of the private sector.’

 

Returning to his own text, Packard says “There are going to be continuing problems of trade, of financial relations, of security affairs, political and diplomatic relationships, scientific and technological relationships.

 

“There is no way these problems can be solved once and for all. They are not being managed very well and they could get out of hand. They simply must be managed better. Better management requires the attention and leadership of the President and the Prime Minister. We believe President Reagan and Prime Minister Nakasome know and understand this. They have an historic opportunity to establish a pattern of leadership in managing the U.S.-Japan relationship that can result in a long era of peace and prosperity in the Pacific Basin.”

 

Saying that he is sure his audience is aware that this relationship has not been handled well, Packard proposes taking a look at some of the issues.

 

“Trade attracts most attention. Japanese exports to the United States have been going up at the rate of 19% per year while U.S. exports to Japan have been going up at only 12%.

 

“Last year the U.S. trade deficit with Japan was about 20 billion. This year it will be over 30 billion and it will increase again in 1985. This balance is between a very large export of manufactured goods by Japan over a smaller but still important export of agricultural and forest products and some raw materials by the United States.

 

“We are Japan’s largest market for manufactured goods and they are our largest market for agricultural products.

 

“From a macro-economic standpoint there is no need for the bilateral trade between the U.S. and Japan to be balanced. The dollars we give Japan for manufactured goods eventually get back to us one way or another. For example, they go to the Mid-East to buy oil for Japan and come back to the U.S. to finance our federal deficit.

 

“The problem is that the Japanese exports to the U.S. cost jobs in the U.S. and even threatens entire industries. The problem is exacerbated by the fact that the Japanese market is by no means completely open to goods manufactured in the United States. Also the market for agricultural goods in Japan is not completely open to U.S. agricultural products even though Japan is the largest U.S. market for agricultural products.”

 

Looking at the reasons why Japanese markets are not completely open, Packard says “Japan has very small resources of energy and raw materials and a shortage of food and must sell its manufactured products abroad to pay for energy, raw materials and food. This fact is thoroughly understood by the Japanese bureaucracy and the Japanese people as well. They have, really, no economic incentive to import manufactured products.

 

“This is reflected in bureaucratic action and is the cause of many of the non-tariff barriers to the import of manufactured goods.”

 

As an example, Packard tells of reports of small merchants in Japan putting American products on the back shelf while featuring local Japanese products. He contrasts this with the U.S. where department stores will feature Japanese imports in special sales.

 

Packard says their study showed up a very interesting thing concerning how Japanese and Americans perceive each other. “About 70% of the Japanese” he says, “feel friendly toward the United States. Of those who feel friendly, 38% said it was because of strong economic and trade ties, 23% because of close security relationships and 20% because we are both a democracy; but only 5% because we are friendly and likable.

 

“I suspect the fact that Americans are not really very well liked in Japan has something to do with the difficulty we have in selling our products there.

 

“There is another serious problem we have in penetrating the Japanese market with U.S. products. Very few American business people, or for that matter other Americans, can speak Japanese. Thus there is very poor communications with people in Japan at the working level. On the other hand, nearly all Japanese business people who have anything to do with U.S. markets can speak English.

 

Packard concludes from this that there are several things that can be done to increase the penetration of U.S. manufactured products into the Japanese market:

 

“One is to have a bureaucracy in Japan more interested in U.S. imports. Here the leadership of the Prime Minister is the key. (The bureaucracy was very critical of our report. Prime Minister Nakasone told them all to read it and do something about it.)

 

“Second, there should be increased private sector discussions of the problem. Most of the business leaders in Japan realize that the trade deficit has become a major problem. Discussions industry by industry will be productive and should be encouraged.

 

“Third, U.S. business should learn more about the Japanese market, the tastes and desires of the Japanese consumer. This will take time for more business people will have to learn Japanese, which is no easy matter.

 

“I might comment here that Americans don’t as a whole feel personally very friendly with Japanese people either. This is not surprising since we have completely different cultural backgrounds, religions, family customs, etc. This cultural barrier to a better understanding is breaking down, but it will take time. At least it is moving in a positive direction.

 

Turning to common national security problems, Packard says “Japan is making an immense contribution to the U.S. security position in the Western Pacific. One needs only to consider what the U.S. capability in that area would be without the availability of Japanese ports for our ships or Japanese bases for our aircraft.

 

“The security relationship is fortunately moving in a positive direction. Cooperation between the U.S. military people and the Japanese self defense people is excellent.

 

“Japan is now much more aware of the Soviet threat in the Western Pacific and has agreed to undertake the defense of the sea lanes 1000 miles from Japan.

 

“The Commission recommended that the United States should stop complaining about the percent of GNP spent on defense in Japan and instead concentrate on joint efforts to increase the effectiveness of our security forces in that theater. In particular, we recommended that the Japanese ability to produce high quality high technology products should be harnessed more effectively to improve our joint military capability.

 

“While it would be desirable for Japan to carry a larger share of the national security burden in the Western Pacific it must be recognized that this must continue to be largely the responsibility of the United States.

 

“A completely rearmed Japan would be a matter of great concern to all of the people in that area. People in that area have not forgotten how it was when Japan was the dominant power and actually occupied Korea, parts of China, the Philippines, Malaysia and Singapore, and even threatened northern Australia.

 

“Despite the historical involvement of Japan in the Western Pacific , it can have a very positive influence in diplomacy and in economic aid in the future.

 

“Many of the developing nations in the Western Pacific have a free enterprise economy and must have receptive markets for their products. Japan and the United States must keep their markets open for the industrial products of these developing countries – Korea, Taiwan, Mainland China, and all the rest. This will cause additional strains on both the Japanese and the U.S. economy.”

 

Looking at the subject of industrial policy, Packard says it has two distinct elements. “One is the appropriate role of the government and the private sector in the national economy. The second question is the degree to which the relationship affects the competitiveness on a country.

 

“Both the United States and Japan have industrial policies. Japan’s policy is directed more at increasing foreign trade than the U.S. policy, which has a stronger focus on the domestic economy.

 

“Our recommendations suggest that both the past Japanese industrial policy and the past U.S. industrial policy have developed on the basis of the economic objectives of the two countries and there is no reason to bring them into any sort of conformity. If anything, the U.S. has more to learn from Japan about how to utilize industrial policy than the other way around. At the same time, there is no reason for the United States to try to emulate the Japanese industrial policy.”

 

Packard turns to the recommendations made by the commission regarding the flow of trade between Japan and the U.S. and he says “A major cause in the growth of the imbalance has been the different macroeconomic policy mixes in Japan and the United States. We recommended that U.S. interest rates should be reduced and Japan’s growth rate should be increased by increasing its domestic investment and reducing its saving rate. While these adjustments would, we believe, help in reducing the trade imbalance, both countries maintain these policies for a number of other reasons. I doubt that our recommendations in regard to macroeconomic policy will have much influence on either government.

 

“The exchange rate is a major factor in the trade imbalance between the United States and Japan and it also makes U.S. industry less competitive with Japanese industry in other world markets.

 

“This issue was considered in detail last fall and the Commission made a number of recommendations that would help make the yen more of an international currency.

 

“Our recommendations were given to President Reagan and Secretary Regan before the President’s trip to Japan last fall. In the meeting last November, the Prime Minister agreed to implement many of the recommendations.

 

“There was excellent follow-up work by Secretary Regan. In May of this year the U.S. Treasury Department and the Japanese Minister of Finance agreed to a number of important measures relating to the internationalizing of the yen and the liberation of the capital markets in Japan. These steps alone will not correct the yen-dollar imbalance but they are a significant step in the right direction.

 

“We hope that these steps toward financial deregulation will not be viewed in Japan as dictated by foreign pressures but as a desirable path in Japan’s own economic interest.

 

“In the meantime as you know the dollar has continued to strengthen in relation to the yen and it will continue to be strong as interest rates are high and the United States is considered a safe haven for investment.

 

“We discussed the desirability of Government intervention in trade matters and agreed that it should be avoided or at the most be only temporary to allow breathing time for industries to adjust to market forces. We also felt it would be desirable for such actions to be voluntary and with substantial industry to industry involvement.

 

“The quota on Japanese automobiles is a good case in point. It was generally accepted by the industry in both countries. The automobile industries in both Japan and the United States have benefited at the expense of the American consumer who is now paying higher prices for both Japanese and American automobiles. At the same time, the quota has resulted in more jobs in the United States, including jobs created by Japanese investment in manufacturing plants in the U.S.

 

“Although the Commission agreed that the quota on U.S. imports of Japanese automobiles should not be a permanent arrangement, we did not recommend a specific time table to eliminate the quotas.”

 

11/1/84, Letter to Packard from David MacEachon of the Japan Society saying they are delighted he has agreed to discuss the Report on U.S.-Japanese relations

11/1/84, Letter to Packard from Emi Lynn Yamauchi, Press Attaché in the U.S. Embassy in Japan, sending a copy of a speech recently made by Ambassador Mansfield on the subject of U.S.-Japan relations

11/13/84, Copy of a letter from Packard to David MacEachon discussing travel times

11/27/84, Printed flyer invitation to hear Mr. Packard’s address ‘Challenges and Opportunities in United States-Japan Relations

Undated, Publication of the Foreign Policy Association

1983 – Packard Speeches

Box 5, Folder 1 – General Speeches, includes correspondence relating to speeches

 

February 2, 1983, High Technology, High Stakes: An Agenda for the Eighties, Washington D. C.

 

This speech was presented at a conference entitled High Technology Industries: Public Policies for the 1980s. Packard refers to it as an appraisal of America’s high-technology industries and the competitive challenges they face.

 

2/2/83, Typewritten text of Packard’s speech.

 

Packard says he is “gratified” to see the attention high technology has been receiving in a public policy debate. He says “It’s about time.”

 

“Its about time this country recognized the vital importance of its high technology industries.

 

“It’s about time we gave a serious appraisal of the competitive challenges faced by U.S. high technology.

 

“It’s about time we looked at public policies that affect this vital sector of our economy.”

 

And he adds the thought that he hopes people in Washington D. C, are listening.

 

Packard says his remarks will focus mostly on the electronics industry, although “…much of what I have to say will apply to all of what we call high-technology – industries characterized by rapid technical innovation and growth.

 

Packard adds his perspective on just how vital the high technology sector is to the American economy.

 

“If you were to make a graph for sales of U.S. electronic products, the curve would make a very dramatic upward swing over the past few decades:

 

$12 billion in 1960

$28 billion in 1970

$113 billion in 1981

 

“That gives electronics a compound rate of about 15 percent a year – definitely a growth industry. In fact, over the last decade, the growth rate for electronics was twice the rate of growth in our national GNP.”

 

“In the computer industry, technical advances have resulted in productivity increases of around 30 percent a year. That has meant lower prices and increased performance of computer equipment.”

 

“Electronics is currently the world’s ninth largest industry. It’s expected to be fourth largest by the end of this decade. In the year 2000, it will rank second in size only to energy.

 

“In an era where America’s older industries are facing growing competition from abroad, declining sales and growing unemployment, electronics is a real hopeful sector of our economy. Our electronics industry plays a vital role in America’s balance of trade, too. Last year, the industry produced a $10 billion balance of trade surplus for this country, if you exclude consumer electronics.”

 

“Electronics makes another key contribution to our nation.” he says. “That is the decisive element of superiority it adds to our  military capability. This is a strategic issue we must not overlook.

 

“So why is this conference being held?, “ he asks. “I believe the answer goes beyond a growing recognition of high technology’s importance. There is increasing concern that we as a country are slipping in our position as world leaders in high technology.

 

“I’m not happy to say it, but I share that view. There are a number of ways the trend manifests itself:

 

  • A decline in patents issued for U.S. innovation,
  • A decreasing share of world trade for the U.S. in key high technology areas,
  • A total national expenditure on basic scientific research that has showed little real growth,
  • A shortage of scientists and engineers, and
  • An increasingly strained university and college system for the training of these people.

 

“These unfortunate trends exist in a wider context, and that is the increasing competition this country faces from abroad in electronics and other high technology sectors.

 

“Other countries have decided that electronics is a good industry for them to have, too. And they’re doing their best to grab a bigger piece of the action. So our world leadership in electronics is facing a mounting challenge. Japan, France, Great Britain, West Germany, Mexico, Brazil – all have targeted the electronics industry as the sector where they as a nation want to focus their efforts.”

 

Although believing that not all of these efforts will be successful, Packard sees some “disturbing signs.”

 

  • “The U.S. has a trade deficit with Japan in consumer electronics that grew from $3.5 billion in 1980 to $6 billion last year.

 

  • The Japanese have captured 70 percent of the worldwide market for 64K dynamic RAMS, an important building block of advanced electronic products. Right now they have a 60 percent share of the U.S. market for these devices.

 

  • Japanese export growth in high technology has been greater than 20 percent annually, a greater growth rate than here in the U.S.”

 

“If we have learned any lesson from rising imports and declining employment in the auto or steel industries, it should be this: We cannot assume that this country does not face competition. We cannot assume that we will automatically retain our leadership position in high technology.

 

“We must act, and the time to act is now.”

 

Packard says he is not suggesting that the U.S. adopt “the kinds of direct governmental targeting that are being practiced abroad. What I am suggesting is that this country formulate a national response to the competition we face from abroad. That strategy should be consistent with our own free market system. We should be building on our strengths and buttressing our weak spots.”

 

Packard sees no simple answer to the problems the U.S. faces. “But we must not be discouraged by the complexity of the issues. Complex problems can be solved – ask any engineer who has designed an electronic device. The hardest thing to do is to define the problem and start tackling it. That task we are doing here today, and I hope we can maintain our forward momentum.”

 

Referring to a subject discussed earlier in the conference, International Trade and Capital Formation, Packard says he would like to add his thoughts on this issue.

“In international trade, I urge our continued support for open markets both here and abroad. We must resist the impulse to protect high technology from foreign imports. Import controls are counter-productive in the long run. They lead to higher prices for U.S. consumers and less efficient, weaker industries.”

 

“Let me add my name to the list of those urging our trading partners to remove all non-tariff barriers to high technology trade.”

 

Packard says he was pleased to see that the conference has also included a discussion of capital formation. Referring to the well known fact that he and Bill Hewlett started HP with a stake of just over $500, he says he is “not so sure we could get by with that sum if we were starting today. High technology industries are becoming increasingly more capital-intensive.

 

“The cost and availability of capital in this country can put U.S. firms at a real disadvantage compared to their competitors abroad. Several recent studies have shown that capital costs for American firms are higher than those of their international competitors.”

 

He mentions one study that stated that “capital costs were the greatest single factor that helped the Japanese in their recent incursion into the U.S. market.”

 

“The recent reduction in the capital gains tax has been helpful. I think we should go beyond this and reduce the capital gains tax to zero for new capital that is actually invested in our industry. This would include venture capital or new issues of stock by any company. This reduction in capital gains tax would apply only to investments which add to capital availability. Capital gains from shares of stock which are already publicly held should continue to be taxed at a  reasonable rate.

 

“We need to explore this proposal and all the issues of capital formation and growth-oriented tax policies. It would be a real tragedy if all this country’s innovative and entrepreneurial spirit went to waste just because money is expensive and hard to come by.”

 

Having mentioned entrepreneurial spirit, Packard says he wants to focus the rest of his remarks on “technological innovation and the people who make it happen.”

 

Packard repeats his earlier statement to the effect that “our national strategy to maintain U.S. competitiveness in high technology should build on our strengths as a nation. The area of technical creativity is this country’s greatest strength.

 

“America’s technological edge dates from World War II, when the Federal government gave a real boost to scientific research. Governmental support for basic science began right after World War II and continued into the 1950s, when the Office of Naval Research spearheaded major efforts in some of our strong research universities.

 

“In addition, in the field of electronics, this country benefited from post-war prohibitions on electronics research in Japan and Germany. We had, so to speak, a free hand in the industry for more than a decade.

 

“Since the beginning of the 1960s, that technological lead has been gradually whittled away. While we still spend a greater percentage of our GNP on research and development than any other country R&D funding is growing faster abroad than it is here. Only industrial spending on R&D has shown any real growth in the past decade. There has been little, if any, real growth in the amount spent on basic research by our government or universities. The sole exception would be research in high energy physics, and this has yet to produce anything useful for our economy.

 

“We’re not making the most efficient use of our federal research funding, either. Our federal government spent $44 billion on R&D last year. But little of that money went for research in areas that might lead to new, commercial technologies.

 

“This year, three-fourths of federal R&D funding will be in defense and aerospace. Neither of these areas has produced as much commercial fallout as is often suggested by the departments managing these programs.

 

“In fact when defense-related funding is subtracted from total U.S. R&D spending, this country actually spends a smaller percentage of its GNP on research than Japan or West Germany.”

 

And we could get more for our money on what the government does spend on research, Packard contends. “We could do a more effective job of transferring technologies from our federal research laboratories to the commercial sector. That would cost us little or nothing.

 

“Our more than 700 federal research laboratories  could be made more effective. These labs often have poorly defined research goals. In some cases their goals change directions too frequently. For others, their research goals may have needed revision long ago. In any case, our labs could benefit from sound management principles – well-defined goals, strategic plans to accomplish those goals, and regular re-evaluation of results.

 

“When Congress reviews the activities of our federal labs, it is on these broad areas it should focus. Too often, Congressional oversight means a line-by-line review of each item on a lab’s budget – an exercise that is far more time-consuming than either Congress or lab staff can afford. The kind of oversight provided or federal labs has resulted in what we call micro-management – many detailed procedural proscriptions and little direction on overall mission for the labs.

 

Packard says he recently participated in a task force which studied the federal labs and identified “some 2,700 Federal R&D program elements that are considered by 54 different committees and subcommittees of Congress. That means our research scientists are spending a lot of their time researching the intricacies of the Congressional maze. I’m not sure that’s a technology that we could commercialize and sell  abroad.

 

“Industrial research and development has been the one sector where spending has seen real growth over the last decade. I think that’s a trend we should encourage. The R&D tax credits of 1981 were a move in the right direction and should be renewed when they come up for revision in 1985.

 

“We should also be looking for ways to make it easier for high technology companies to share the heavy costs of research. We are seeing a number of new vehicles being developed to help pool industry resources. The Microelectronics and Computer Technology Corporation, the Semiconductor Research cooperative, and the Center for Integrated Circuits at Stanford University are examples.

 

“As our high technology companies look for ways to collaborate on research – something done widely by our foreign competitors – we must assure them that they can cooperate without fear of being charged with anti-trust violations.

 

“There is one last arena where we conduct research that I have waited until now to discuss because it is, perhaps the most important. I’m thinking of our universities which have outstanding research programs involving their faculty and graduate students.

 

“”These universities play a key role because they have two vital functions in our high technology competition. They conduct much of this country’s basic research, and they produce the highly trained technical people this country needs to maintain its lead in high technology.

 

“Our fine research universities need some help if they are going to continue to provide this country with new technologies and the  people to put them into practice.

“Our universities need better equipment to conduct basic scientific research. It is difficult to create state-of-the art technologies on outdated equipment, and that’s all too many of our universities have.

 

“Federal support of university research has been declining. The task force I participated in identified several billion dollars of savings in our federal research budget that could be achieved through better management. Those savings should be realized, and a large part of the resulting funds should be channeled to our research universities.

 

“We also need to look at ways to ease the strain between our universities and the federal government. One way to improve the relationship would be to adopt the National Science Foundation policy on indirect cost reimbursement. We should not be wasting our time and energy on debates over funding formulas.

 

“There is another reason to be worried about our universities that goes beyond outdated facilities and equipment. Our higher educational system simply does not have the capacity to produce the number of scientists and engineers our country needs to stay ahead of the rest of the world.

 

“More students now want to pursue technical courses, but must be turned away. There aren’t enough teachers to handle the demand. Right now, more than 1,000 faculty positions in engineering are vacant. Higher wages paid by industry, coupled with the  obsolete equipment I mentioned, are causing some of our most talented technical people to leave careers in teaching and university research. Fewer PhD.s are being granted to American students, and fewer of them are electing to teach.”

 

“And Packard asks. “Where shall we go if there is no one to teach our future scientists?”

 

“When I started these remarks I mentioned some trends that I find worrisome. One was Japanese incursions into the high technology market, and another was a shortage of technically trained people. Japan produces two-and-a-half times as many engineering graduates per  capita as we do here. They have recognized that highly skilled people are a prime national resource in the competition for high technology trade. So should we.

 

“We should be giving our people a better technical grounding for reasons that go beyond the well-being of our high technology industries. The jobs of the future will require technical literacy. We owe it to all our people to ensure that they can enter these new, growing job areas. And there is one last reason we should be making sure our human resources have technical skills: Working in high technology is just plain fun. I can testify to that from experience.”

 

Packard says he should end his remarks with “some kind of assurance that I know we as a nation are up to the challenges we face from abroad. I believe that America will continue to prevail in the area of high technology.

 

“I have given you an assurance, but it is a conditional one. The condition is this: That we, as a country, begin to take action now. Let’s not wait around until things are finally bad enough to be almost beyond repair.

 

“High technology is part of the greatness of America. Let’s keep a picture of that greatness in our mind and dedicate ourselves to maintain it. The ones who benefit most from that vision will be those who will follow in our footsteps.

 

“Thank you”.

 

2/1-1/83, Printed copy of the conference program

2/1/83, Typewritten list of biographies of the conference speakers

2/1/83, Draft of a speech to be given at the conference by William C. Norris, Chairman, Control Data Corp., titled Technological Cooperation: a National Priority

2/1/83, Draft of a speech to be given by Senator William V. Roth, Jr., no title

2/1/83, Draft of a speech to be given by Lionel H. Olmer, Under Secretary, International Trade Administration, titled Maintaining U.S. Competitiveness In High Technology

1/15/83, Article reprinted from the National Journal, written by F. Karl Willenbrock, titled Human Resource Needs for High Technology Industry

1/22/83, Reprint of an article in the National Journal written by William K. Krist, Ass’t. U.S. Trade Representative, titled The U.S. Response to Foreign Industrial Policies

1/22/83, Reprint of an article in the National Journal written by Harold E. Fitzgibbons, Director Hambros Bank Ltd., titled A European Perspective on U.S. High Technology Competition

12/18/82, Reprint of an article in the National Journal written by Paul Freedenberg titled U.S. Export Controls: Issues for High Technology Industries

1/1/83, Reprint of an article in the National Journal written by Paul Oosterhuis, Partner, Hogan and Hartson, titled High Technology Industries and Tax Policy in the 1980s

1/8/83, Reprint of an article in the National Journal, written by Robert D. Hormats, Vice President for International Corporate Finance, Goldman, Sachs & Co., titled High Technology Industries and the Challenges of International Competition

10/28/82, Letter to Packard from Anthony C. Stout, Chairman, The Government Research Corporation, inviting Packard to address the conference

 

1/3/83, Letter to Robert Kirkwood, HP Director of Government Affairs, from Charles P. Heeter Jr. Director Trade and International Affairs, enclosing information pertinent to the conference

1/6/83, Letter to Margaret Paull [Packard’s Secretary],from Barbara Norris Conference Director, discussing hotel arrangements

1/17/83, Letter to Packard from Robert Kirkwood discussing a breakfast meeting of Congressmen to which John Young was invited. Kirkwood asks if Packard could make it.

1/26/83, Letter to Packard from Alan Smith asking for a copy of his speech

1/26/83, Letter to Packard from Anthony C, Stout saying he is delighted Packard has agreed to participate in the conference and discussing arrangements. He encloses a preliminary program

2/11/83, Letter to Packard from Rep. Norman Mineta thanking him for attending the breakfast meeting

2/17/83, Letter to Packard from Anthony C. Stout, Conference chairman, thanking him for participating in the conference

 

 

Box 5, Folder 2 – General Speeches

 

October 25, 1983, Why Not Protectionism,  competing with Japan in the eighties, Cleveland, OH

 

1/25/83, Text of Packard’s speech. It is handwritten by Packard with the exception of a few pages which appear to be inserted from a typewritten copy of a previous speech.

 

In discussing competition with Japan, Packard says the issue is “Can we maintain and nurture free trade in this decade or are we going to face an increase in protectionism?”

 

He says this is an issue that involves “not only bilateral trade with Japan, but multilateral trade of both countries with all the other countries of the world.

 

“There is very little free trade in the world today and virtually every country has protectionism of one kind or another.

 

“I want to talk about some of the current trade issues involving the U.S. and Japan, but I thought it might be interesting to remind you of some of the things Adam Smith wrote on the subject. He is considered to be the father  – or at least a most effective advocate of free trade.

 

Professor E. G. West recently published a book entitled ‘Adam smith and his Words.’ And I want to quote a few excerpts [and Packard inserts about six typewritten pages mainly quoted from Professor West’s book which are digested below]:

‘Adam Smith was born in Scotland in 1723. He went to Glasgow University where he matriculated at the age of fourteen. He lectured in moral philosophy at the University from 1751 to 1763 when he went to France to tutor the Duke of Buccleugh. Returning to Scotland in 1767 he spent most of his time working on The Wealth of Nations. He died in 1790.

 

‘During Smith’s time protectionism was at its height. Excessive restrictions on trade between England and France [caused them] to divert their trade to the more distant colonies of the two countries.’

 

‘If those two countries, however, were to consider their real interest, without either mercantile jealousy or national animosity, the commerce of France might be more advantageous  to Great Britain than that of any other country, and for the same reason that of Great Britain to France.’

 

‘But being neighbors, they are necessarily enemies, and the wealth and power of each becomes, upon that account, more formidable to the  other, and what would increase the advantage of national friendship, serves only to inflame the violence of national animosity.’

 

‘A nation that would enrich itself by foreign trade, is certainly most likely to do so when its neighbors are all rich, industrious, and commercial nations. A great nation surrounded on all sides by wandering savages and poor barbarians might, no doubt, acquire riches by the cultivation of its own lands, and by its own interior commerce, but not by foreign trade.’

 

‘The simple fact is, of course, that in normal trade all parties gain, there exist mutual gains from trade.’

 

Returning to his own text, Packard says that Adam Smith seems to have been fully aware of the difficulties of devising a suitable political framework wherein the beneficial operations of the free market could best operate….the play of individual self-interest can take place not only in the market place but also at the ballot ox and in the political process. These two separate stages of activity give rise to conflict and inconsistency. Acting in their capacity as consumers who accept one product and reject another, individuals constitute a potent through dispersed force making for market efficiency. However, in their capacity of producers, individuals often recognize that, in majority-voting democracies, their self-interest is more effectively promoted by political lobbying to secure special protection and privileges for their particular occupation or trade. This, although as Adam Smith said, ‘The sole end of economic activity should be consumption,’ in practice, because of the particular political framework, the interests of producers often predominate. Hence the following rather pessimistic conclusion of Adam Smith:

 

‘To expect, indeed that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it.’

 

Packard continues, saying, “With sentiments like these, Smith would have been surprised at the extent of the triumph of free trade policies over the next century. He underestimated the power of his own influence and that of other economists to come. Disciples and admirers emerged everywhere. Developing the Scottish professor’s arguments and presenting them with his own particularly devastating kind of wit, the French economist Bastiat, for instance, made a telling onslaught upon entrenched monopoly positions in France. By 1850 Disraeli was confident that ‘Protection is not only dead , but damned.”

 

“Thus,” Packard continues, “this is not a new subject we are discussing today, although protectionism is not quite dead and not yet measurably damned we have made considerable progress toward Disraeli’s pronouncement in the 133 years since it was made.

 

“Now I want to remind you of some of the special characteristics of U.S.- Japan trade. The United States is the largest export market for Japanese products accounting for 26% of Japanese exports in 1982. On the other hand, Japan accounted for only 10% of U.S. exports in 1982. Canada, Western Europe, Latin America, other countries in South East Asia and some other important areas – the Middle East, are larger markets for U.S. products than Japan.

 

“If we look at the bilateral trade between U.S. and Japan there are several things which should be noted. U.S. buys mostly manufactured goods from Japan and sells a very large amount of agricultural products. It has been said that there are more acres in the U.S. producing food for Japan than there are in Japan. The bilateral deficit in trade has been growing rapidly over the last few years.

 

“In 1982 Japan had a surplus of over $17 billion. Exports from Japan to the U.S. have been growing at the rate of 16% per year while U.S. exports to Japan have been growing at about 9%. The 1983 bilateral trade imbalance is expected to be around $22-24 billion. If this trend continues the deficit will double in 5 years – could reach 50 billion by 1988 or 1989..

 

“I am fully convinced that the growth of this imbalance must be brought under better control and indeed that is one recommendation made by the U.S.- Japan Advisory Commission to President and Prime Minister and agreed to by both U.S. and Japan.

 

“I do not mean the bilateral trade should be brought into balance – [but] we will have some real problems if it is allowed to get much larger. $24 billion will provide pay for 2 million jobs at $12,000 per year, and as you all know every direct job has a multiplier of at least two. This means that the 1983 bilateral trade imbalance is costing the United States about 4 million jobs. I say there is a limit to all good things and if this problem is not solved in any other way it will most certainly result in more protectionism of one form or another against imports from Japan.

 

“I am sure most of you know there are a dozen or so bills now before the Congress, from requiring substantial domestic control in products imported from Japan, to quotas and other protectionist measures. I don’t see how Congressional action could possibly be held off at the 50 billion [level].

 

“The yen to dollar ratio has been a subject of much discussion recently and is certainly one important factor in U.S. Japan trade competition, not only bilateral but world wide.

 

“Japan could probably get along in their economy with a yen at 200/$ as well as one at 240/$, which has been the level during most of the year.

 

“Over 50% of  Japanese imports are from South East Asia, the Middle East and Africa. These are largely for energy and raw materials, and they are paid for largely in $. Japan would be better off if they had to pay only 200 yen for those $ than 240 yen.

 

“Japan gets these $ by the export of manufactured products and they would end up with fewer yen for each $ they receive but their economy could balance just as well at a 200 yen/$ as at a 240 yen/$. Many in the Japanese business community agree to this and I do not see much concern about bringing the $ down to the 200 yen level except in those industries where industrial product trade is important.

 

“Even though there is undisputed agreement that we and Japan would be better off with the yen around 200, 180 would be even better. And even though it is quite likely that many of our other trade problems would be much more manageable with a yen at 200 or below the question is how to get there.

 

:”High U.S. interest rates and the prospect of high interest rates continuing over the next few years, because of the prospect of very large U.S. federal deficits continuing for several years, is certainly a major cause of the strength of the $ against the yen and most other currencies.

 

I believe that if the Congress and the Administration knew how many jobs the strong dollar and high interest rates are costing in the United States something might get done. If one includes our total export trade and several key areas such as housing and automobile finance – failure to reduce the Federal Deficit is costing us at least 6 million U.S. jobs.

 

“Some people have accused Japan of manipulating the yen but I see no evidence of that. There are some things Japan can do to strengthen the yen and I hope the forthcoming meeting between President Reagan and Prime Minister Nakasone will result in some helpful action.

 

“I mentioned agriculture as an area where the U.S. has substantial exports to Japan – $6-8 level. Agriculture is also one of the most highly protected areas in the Japanese economy.

 

Let me give you some figures:

 

Rice $/cwt       54.7 – 21.8

Wheat $/bu      20.2 – 5.3

Soybeans $/bu 31.4 – 7.2

Barley/Corn

$/bu     16.6 – 3.3

 

I don’t have figures for beef, citrus, and other important agriculture products but the U.S. – Japan Advisory Commission has a research project underway to help understand this problem and see what if anything can be done about it. In effect, the Japanese consumer is subsidizing Japanese Agriculture to the extent of between $3- 4 billion annually.

 

“Japan has taken several actions to encourage the increased import of U.S. industrial products. And Prime Minister Nakasone has encouraged Japanese industry to do more. I think it will probably be possible to generate some increase in the export of U.S. industrial products to Japan but I do not see any great break-through.

 

“The fact is that Japanese industry is fiercely competitive  – puts a high emphasis on quality and service, and U.S. customers are buying more products simply because they are better or cheaper or both. I do not believe this is the result of their Industrial Policy, although it probably has been of some help in certain areas.

 

“The Japanese do have some real advantage in labor costs. [Over the ]Last five years or so [they have had] less inflation and better control of wages.

[Note to himself to] Describe YHP wage situation.

 

Also, large scale use of cottage industries and sub-contractors. Japanese Farmers [receive] 25% [of their] income from farm products, and 75% from part time work.

 

We can not expect them to change these practices and it would be impossible to expect U.S. labor to accept pay reductions.

 

“American industry is recognizing some of the advantages of Japanese emphasis on quality – more quality circles in the U.S.

 

“Not very effective yet – HP DRAM purchases – quality, service, price – 80% to Japan.

 

“There are a number of industry to industry consultations going on: steel, automobiles, semiconductors. Not always successful but should be encouraged.

 

“Industrial Policy. Micro and macro.

 

“Japanese example on micro policies not adaptable to U.S.. We are not organized to operate that way. We have had some very bad examples. The Mansfield Amendment on R&D, the Brooks law on DOD computer purchases. There are some things we can and should do in many areas:

 

Education

R&D

Capital formation

Regulations

Better communications between business and government

 

“In summary, we are facing a very difficult and very complex problem in foreign trade, and U.S. Japan trade is a very important part.

 

“I hope we can work together to find solutions – it will take patience and understanding.

 

“The alternative [is] to go to more protectionist actions [which] would in the long run do economic damage to both the U.S. and Japan. And would have a dangerous impact on our long range relationships. As two of the most important nations of the world that must continue to work together as friends, not only through the decade of the 1980s, but through many decades ahead including those in the next century.”

 

 

 

10/25/83, Copy of printed program for the seminar

6/29/83, Letter to Packard from T. Dixon Long, Western Reserve College, and Emory C. Swank, President, Cleveland Council on World Affairs, asking to present the keynote speech on the topic of ‘Why Not Protectionism?’

A draft of the program is attached.

7/14/83, Letter to Packard from Messrs. Long and Swank, saying they are pleased he has agreed to speak at their seminar.

7/22/83, Copy of a letter from Packard to Emory Swank sending biographic material

8/18,83, Letter to Packard from E. M. de Windt, Chief Executive Officer, Eaton Corp. suggesting he spend the evening before the seminar at Eaton House where they have scheduled a working breakfast for the principle speakers and staff. He also invites Packard to dinner the evening before.

9/19/83, Letter to Packard from Emory Swank asking for the time of Packard’s arrival so they can meet him

9/30/83, Letter to Packard from Professor Yoshi Tsurumi who will also speak at the seminar enclosing some material relevant to his presentation.

10/24/83, Letter to Packard from E. M. de Windt, saying he will meet him at 6 P.M. and he attaches a list of the dinner guests and a copy of the program for the seminar

11/4/83, Letter to Packard from Emory Swank, thanking him for speaking at their seminar. He encloses a check of $500 honorarium.

11/7/83, Business card from Emory Swank enclosing a photograph taken of people at the seminar

11/8/83, Copy of a letter from Packard to Emory Swank returning the honorarium check suggesting they use the money for future programs on Japan

 

 

Box 5, Folder 3 – General Speeches

 

November 21, 1983, AEA 40th Anniversary Dinner, The Challenge Ahead, Santa Clara, CA November 21, 1983  In view of the founding role both Packard and Hewlett

played in the start of WCEMA – WEMA – AEA they were both asked to give their perspectives on the challenge ahead

 

11/21/83, Copy of Packard’s remarks handwritten on 3×5” cards

 

Packard says he wants to give a brief report on the U.S.-Japan Commission.

 

“U.S. – Japan relations are important – two longest economies

 

“Partnership important for security of Western Pacific

 

“They will continue to be tough competitors but must avoid protectionism

 

“Fifty years ago Bill and I, were seniors at Stanford. The outlook was not very promising. Few jobs

 

“Bill and I had no grandiose plan

 

“Job at GE paid $90 a month, janitor $.25/hour, gas 10 cents, suit $25, room and board $30, car $600-$700.

 

“Japan had invaded China.  No feeling that the U.S. was international

 

“If someone had predicted in 1933 all of the exciting things that were going to happen in the next 50 years, and I would be involved in some part of it, I would have [thought it] a fairy tale.

 

“Without any doubt [the] next 50 years will be just as exciting.

 

“One can see only a few years ahead at best – for our industry.

 

“Computers and data products [will]continue growth

 

“Software limited

“Many years of growth without new technology. It has become an all electronic world – electronics cheaper, more capable, more reliable.

 

“Robots – Japan has 8000, will have 20,000 by 1985 – U.S. not far behind

 

“Genetic engineering. The new field of opportunity.

 

“Already great growth in health care – 48 years [was the] life span in 1900, now it is 72 – for a child born today, 83. The life span will continue to increase. Already human growth hormone interferon – drugs to improve memory.

 

“It is quite likely that the rate of aging can be reduced and a life expectancy of 150 years is not out of the question.

 

“Space will be an area of opportunity – manned space station – the ultimate clean room, high vacuum, zero gravity, no contamination. Material from noon or asteroids. Planning is being done on moon station.

 

“Energy has been a subject of great interest and activity. Fossil fuels will be around but sometime in the next fifty years nuclear energy will be recognized as the only and a better source.

 

“The nuclear technology will be either fusion of some type of breeder reactor. In the short term, high temperature gas cooled reactors.

“Military weapons will continue to be increasingly electronic – U.S. superiority will prevail.

 

“I suppose most of you watched ’The Day After’ last night. Unfortunately there is no possible alternative to deterrence of nuclear war by the policy of assured mutual destruction.

 

“An extensive study has just been completed which indicates that it may be possible to build an effective defense against nuclear missiles and next year’s budget will have funding to begin work on nuclear missile defense.

 

“Industrial policy- What can be done to improve the future of our industry?

 

  1. Education
  2. Research and development
  3. Capital formation
  4. Regulatory process

 

“The next 50 years will be as full of challenge, excitement and opportunity  [as the last 50 years].”

 

11/21/83, Copy of printed program for the AEA 40th Anniversary Dinner and 1983 Annual Meeting

11/21/83, Copy of printed invitation to the dinner

10/11/83, Letter to Packard from Ed Ferrey, President of AEA, confirming their invitation to speak at the dinner.

11/4/83, Copy of a letter to Ed. Ferrey from Lewis Howard saying he will not be able to make it to the dinner.

11/11/83, Letter to Packard from Ed. Ferrey giving information about the dinner and guests. He encloses a Pamphlet titled AEA’s Statement of Purpose and Objectives

11/18/83, Letter to Packard enclosing a list of people who have accepted an invitation to attend the dinner

11/25/83, Letter to Packard from Ed. Ferrey thanking him and Bill Hewlett for speaking at the dinner. He includes this statement: ‘Over the years I have heard you speak from a number of platforms, but in my opinion your message this leek was the most interesting and most meaningful speech you have given to an audience of electronics executives.’

9/26/30, Copy of a special report – Mission to Japan.

11/22/83, Newspaper clipping from The Peninsula Times covering the dinner.

1971 – Packard Speeches

Box 2, Folder 14 – Department of Defense

 

February 18, 1971, Symposium at Fort Rucker, AL. It is not clear who the audience was, probably officers in the Armed Forces.

 

2/18/71, Typewritten text of Packard’s talk. Written in outline format.

Saying that he has now been on the job for two years and two months, Packard says that, “In addition to dealing with day-to-day problems, we have had some opportunity to look down the road – Force Planning, based on Nixon Doctrine – President’s statement on future U. S. foreign policy.

 

Force planning based on realities:

 

  1. Build-up of  Soviet strategic forces – conventional forces more important.
  2. NATO-Warsaw pact is not only potential area of conflict:

 

Middle-East

Asia

Probably not South America and Africa south of Sahara

  1. Fiscal realities – human programs; no tax increase
  2. Domestic political realities – zero draft; manpower limit

 

Conventional forces of US and allies must be designed to provide credible deterrent. Guidelines for future forces:

 

  1. Maintain credible nuclear deterrent non-nuclear force

 

  1. with friends and allies
  2. with lower manpower levels
  3. at about present budget level

(1)     continuing rise in manpower cost:

53% of budget

2.5M cost 13B – 1964

2.5M cost 29B – 1972

We must do a better job in applying technology to conventional tactical warfare. We must find more effective, more efficient, ways to develop and procure military hardware.

 

Both requirements dictate better decisions on what to develop – the issue you have been discussing here.

Some lessons have been learned in Vietnam and some others – very important lessons – were learned during the middle east crisis last year.

 

Unfortunately, the Defense Department system has a very poor ability to learn anything – even the obvious.

 

One has to only look at two things – photographs of areas bombed in Vietnam and expenditures made over the last few years for conventional ordnance expended there – to conclude our so-called air power – particularly interdiction – has been very ineffective – disgracefully so. I am pleased to report that very substantial improvements have been achieved during the past two years – gunships, guided weapons, and improved tactics.

 

We have begun to see what can be done – and the key point is that substantial improvements in effectiveness can be achieved with substantially lower costs both in dollars and in lives.

 

Sensors – better night vision – better range finders – better ordinance – all have given our ground forces greatly increased capability over what they had five years ago.

 

I know you have been discussing some of these things at this conference.

 

I am greatly troubled that what gains as have been made – in spite of system, DCPG – sensor, etc.

 

Not all good – speed-cost, gunships – small group, system – two years, back to small group – 6 months.

 

We are entering an exciting era in the things you are discussing here.

 

New imagination – what to do – get out into real world – fort Hood – operational jesting – development needs to be coupled better with requirements.

 

Service staff – wrong way – get the development people out with operational people -–tell the paper shufflers to go home.

 

We are going to try some new approaches, DCPG – Defense Special Projects Group, DSPG.

 

We are setting up new group for tactical communications, Tri Tac. Battle short around system.

 

More reliance on hardware, less paper.

 

New aircraft designs – new weapon system concept, no total package procurement.

 

Good old fashioned approach. Design it before you produce it.

 

Cost incentive contracts for development – fixed price – hold to it.

 

Better management – Services.

 

The future

 

Smaller forces – if credible deterrence must be more effective. Must get more for defense dollar – need your help – it won’t be done in the Pentagon. Want to be done by Service staff people – must be done at working level.

 

 

Box 2, Folder 15 – Department of Defense

 

March 3, 1971, Council on Foreign Relations

 

3/3/71, Typewritten text , in outline format, of Packard’s talk.

 

1. Immediately after taking office in 1969 extensive reviews were undertaken by the Nixon Administration to reorient United States foreign Policy for the 1970s.

 

A   A changed  — and changing – world environment.

  1. Frustration with role in Vietnam.
  2. Need for more federal resources to help solve domestic problems.

 

(1)     Changes in free world

(2)     Changes in communist world

 

  1.  Studies under Security Council machinery and real issues – Vietnam, Mid-East, Korea, SALT

 

2.  President Nixon’s statement in Guam in the summer of 1969 and his November  1969 address to the nation laid out elements of new partnership.

 

  1. U.S. will keep all treaty commitments.
  2. U.S. shall provide shield if a nuclear power threatens the freedom of a nation allied with us or one whose survival we consider vital to our security
  3. In cases involving other type of aggression we will provide military and economic assistance but look to nation threatened to provide manpower for its defense.

 

3. The President’s statement on U.S. foreign policy for the 1970s released last week reflects these realities.

 

  1. A major American role in the world remains indispensable.

 

Middle East – NATO – Asia

  1. Other nation can and should assume a greater responsibility for their sake as well as ours.

 

  1. The change in the strategic relationship calls for new approaches – new doctrines. Parity – more reliance on non-nuclear.

 

  1. Changes in the communist world present different challenges and new opportunities. Sino/Soviet conflict – real. Keep open communication Soviets – open China.

 

  1.  Defense planning has been undertaken since 1969 to be consistent with this evolving policy for the 1970s

 

  1. To implement the Nixon Doctrine.
  2. To accommodate a reordering of  federal resource priorities – larger share for human needs – smaller share for defense needs.

 

  1.  Some problems in implementing a defense program to meet these objectives.

 

A. Growing Soviet military strength – strategic nuclear – naval forces in particular.

 

  1.  Increased cost of military manpower, e. g. 1972 = 185% of 1964 for military pay vs. 125% for goods and services. 2.5 million military force cost $13B in 1964 but $29B in 1971.  All volunteer force.

 

  1. All allies are stronger but traditional reliance on U.S. difficult to change.

 

  1. During these past two years we have taken some important steps to implement the Nixon Doctrine.

 

  1. Vietnam – 549,000 U.S. troops in 1968 – 330,000 now and 284,000 May 1, 1971. ARVN forces now carry major combat role there.
  2. South Korea – 20,000 fewer U.S. troops – more equipment aid for ROK.
  3. Reductions – 12,000 in Japan, 5,000 in Okinawa, 16,000 in Thailand, 9,000 in Philippines – worldwide government personnel reductions – 86,000 people.
  4. The Nixon Doctrine calls for Fewer people but more aid — MAP supplemental of $1B approved closing days of 1970.
  5. Defense budget has gone from 9.5% of GNP in 1968 to a projected 7.8% for FY 72 – from 42.5% of federal budget to 31.6%
  6. People adjustments have been substantial

 

Military

Civilian

Defense Related

Total

 

Defense budget lower force levels

Higher R & D

More readiness

A budget realistic deterrence

 

  1. The most important test of the Nixon Doctrine is in southeast Asia.

 

  1. Early in 1969 it appeared that negotiations were not a likely route to an acceptable solution in VN
  2. Vietnamization emphasized. Military progress excellent – million man VDN forces – capability demonstrated in Cambodia. Some problems which will take a little more time – will be solved. We are close to time when no U.S. forces needed – won’t withdraw until POW issue solved.

 

  1. Southeast Asia,  Vietnamization was a new policy begun in spring of 1969.

 

  1. Planning – how to get U.S. forces out in six months
  2. SVN handle situation if NVN left country

 

Idea was feasible – it should support negotiations – alternate if negotiations failed.

Leadership and training

Logistic capability – supply – repair

Communications

Intelligence

Tactical Air – B-52d, Laos interdiction, air defense

Naval – Riverine –coastal

Much progress made – Fall ’69 visit

New capability – fight enemy

Supplies and sanctuaries – Cambodia & Laos

Supplies through Sianoukville

Cambodian operation

Over 20,000 tons – PRC – successful

Cut supplies

Lowered casualties

Cambodian response

Nationalistic Spirit

30,000 to 200,000

Fair capability – improving

Changed enemy tactics

Small unit operations

Terror remains high

Harassment in Cambodia

Isolate Phnom Penh

ARVN forces very effective

Beginning of dry season

Major supply effort through Laos

If successful, support activities in SVN and Cambodia

Possible to move on ground to disrupt supply movement in Laos

Increased ARVN capability

Low activity in south

Expected tough fight – North bad to respond –(contrast    Cambodia)

Already some success – 900,000 # rice

Will require two or three weeks more to get clear picture.

Vietnamization already clearly successful – military

Economic – time business friends go look

Political

Withdrawal of U.S. troops continue

Prisoner of Wear problem

Negotiations bring end

Guerrilla fighting continue

Fighting just fade down

 

  1. What does the future hold for the Nixon Doctrine

 

Partnership

Strength

Negotiation

 

Partnership – friends and allies not only carry larger share of burden – but have larger voice in determining the best approach to their own problems.

 

Strength – the realities of the world dictate that U.S. leadership must be backed by strength – not only U.S. strength but strength of our friends and allies.

 

  1. Vietnam must be strong enough to handle its own problems
  2. The strength of Jordan in handling Fedayeen problem a good example

 

We must negotiate from a position of strength – SALT – Mideast

 

A look ahead shows us on a difficult course. We are embarked on that course and are making progress. If we can move ahead with a sense of unity and a sense of purpose, I am convinced we can indeed reach the President’s goal – a generation in peace.

 

 

Box 2, Folder 16 – Department of Defense

 

March 24, 1971, The Department of Defense in a Generation of Peace, IEEE Convention and Exposition, New York City

3/24/71, Typewritten text of Packard’s speech, includes handwritten notations by him.

 

Packard apologizes for a “bit of nostalgia” and notes that, up until he joined the Department of Defense in 1969 he had attended the IEE annual Convention every year since 1940. He says these three decades have been “the center of action” – “exiting and expansive times for the electronic profession.” He adds that “They were exciting and expansive times for me, too.”

 

Packard says that prior to World War II, electronics “was radio and communications.”  In these early days the industry was not “highly dependent upon national defense funds to support its research, or to keep its factories going.” But, “As weapons production built up in 1941 in response to the war in Europe and the Pacific, defense requirements became a substantial factor in the electronics industry.”

 

“There was no better place to observe – as well as to be a part of – this great drama of electronics as it unfolded over these past three decades than to have been here, year after year, at this Annual IEEE Convention and Show.”

 

“During those exciting years there was no nonsense about basic research having to be directly related – in an immediately obvious, provable way – to known military requirements. If Defense experts thought it was good research, it was supported.

 

“Independent research and development was viewed as an essential element of progress, and it was recognized that new knowledge would flow from such research to the benefit of society at large and that it then would support the nation’s defense effort indirectly, if not directly.”

 

“A few years ago” Packard says, “a changing attitude began to develop in this country toward Defense-supported research. In fact, the attitude began to change in respect to all research.

 

“Underlying this change  was the realization that the products of science are not always purely beneficial to mankind; that more wisdom and more judgment should enter into the decisions about how science should be applied to the needs and problems of the world. Disillusionment and concern about the Vietnam war was certainly a factor in these changing attitudes.

 

“Many people at all levels of government and science have come to believe during these past few years that it is time to think through again some of our past axioms. One sees evidence that this is happening by looking at this convention’s program. I see more broad philosophical issues being addressed in the papers presented here this week than was the case ten years ago.”

 

“The Defense Department has had a very important and, I believe, constructive role in this rethinking, rededication, and revitalization.”

 

“President Nixon does not intend for the United States to back away from its role of world leadership. We do intend to exercise our power for peace. I find myself troubled, however, because our vision is too often blurred by domestic bickering and by partisan politics in matters related to world affairs. Apparently, this is nothing new, however. DeTocqueville stated the case very well in a special reference to the United States 140 years ago.” Packard reads this 1830 quote from DeTocqueville:

 

‘Foreign politics demand scarcely any of those qualities which are peculiar to a democracy. They require, on the contrary, the perfect use of almost all those in which it is deficient. A democracy can only with great difficulties regulate the details of an important undertaking, persevere in a fixed design and work out its execution in spite of serious obstacles. It cannot combine its measures with secrecy or avert their consequences  with patience.’

 

Packard refers to President Nixon’s statement regarding a new course for United States leadership: ’No goal could be greater than to make the next generation the first in this century in which America is at peace with every nation in the world.’

 

Packard says that, since he and Secretary Laird came to the Depart of Defense in the spring of 1969, “…we have been working hard on a reassessment of our military commitments and our military forces against the background of a changed –and still changing –world. We want to be sure our future forces will provide the Realistic Deterrence necessary for a generation of peace.”

 

Packard talks about trying to balance the goal of providing this deterrence, against such problems as the continuing frustration over the unresolved situation in Southeast Asia, large Federal deficits, and increasing defense spending. “I sincerely believe”, he says, [ that in planning our nation’s military forces we have recognized] “the realistic need and desire of our nation’s people to have a larger share of federal resources applied to domestic problems and programs.”

 

“We are winding down U.S. involvement in Southeast Asia.”

 

“In 1968 the Defense budget was 9 ½  percent of the gross national product. For the fiscal year beginning next July it will be down to 6.8 percent of the gross national product.”

 

“The additional $23 billion which would be required in 1972 to support forces at the level they were in 1968 has been applied to domestic programs”

 

“…it is not an easy task to be sure we can have adequate capability at lower force levels.

 

“During the past few years, the soviets have been building up their nuclear forces. They now have forces equal to ours, and their build-up is continuing. They are building a navy capable of world-wide operations, and they continue to improve their tactical nuclear and conventional ground force capability on the Warsaw Pact front. The Communist Chinese are continuing to develop their nuclear weapons and missiles to deliver  them. They, too, are building submarines and naval forces, and they maintain large armies with modern weapons. There is no evident reduction of subversion, terrorism, or violence anywhere in the world.

 

“In the face of these challenges, our Defense task is to develop and to support United States military capability adequate to deter the use of these forces by those countries that have them. We recognize we must do this with lower manpower levels and reasonable budgets in the future.”

 

“We have some favorable factors on our side, Our friends and allies around the world have increasing military capability backed by increasing economic strength. This is true in Korea and Indo-China, in Taiwan and Japan. Our NATO allies recognize they should do more, and they have the wherewithall to do more.

 

“There are hopeful developments in the Middle East – hope for a successful negotiation supported and sustained subsequently by adequate deterrent strength.”

 

“The essential requirement toward achieving Realistic Deterrence with lower forces is that we focus on capabilities rather than on mere units of forces.

 

“It is very clear that there is much support and historical precedent for great attention on numbers of ships, airplanes, and divisions. It is equally clear that we easily can be misled into the mistaken assumption that these numbers alone contain useful information about capabilities.”

 

“Better application of technology, new and old, can enhance the capability of our military forces – land, sea, and air. That is why we are requesting in the Fiscal 72 Budget increased finds for Research and Development. I am referring here to a real increase, not just enough to overcome inflation, but enough to really increase our Research and Development over the level of effort of the past two years.

 

“If approved, this real increase in the R&D budget will impact directly on the members of this society and this industry. The increase reflects both the end of transition budgets and a conscious decision to return to this nation’s greatest source of relative strength – technology – to provide forces for Realistic Deterrence at realistic budget levels.

 

“It is my honest opinion that if we are to maintain forces that ensure Realistic Deterrence with lower budget levels and fewer men and women in uniform then the most important contribution we can make toward better capability is to increase the effectiveness of our DEFENSE research and Development program. That’s the message I bring you tonight. And, I believe congress will support this emphasis on Research and Development because I believe they will agree that this country simply cannot afford to risk the future security of our people to both lower forces and inferior weapons.”

 

“I do not know how many of you here tonight are interested in doing Research and Development for the defense Department in the future. I hope you have not all been misled into believing that the only fields worthy of scientific and intellectual effort are health and environment. I hope some of you are still willing to work on national security problems. I want to tell you – we need you; your nation needs you. And we need your best efforts and new initiative now.

 

“Let’s all understand that if Congress approves my request for increased research and development funding in FY 1972, it has a binding commitment from me – a personal pledge – that research and development programs will be better managed in the future than they have been in the past.

 

“If you tell us you can develop a new system for national defense, we will expect you to build it, test it, and prove to us that it works; and we will expect that before we buy production quantities.

 

“Gentlemen, there is going to be no more brochure engineering. We want hardware that works – not paper that claims it’s going to work. And working hardware is what I’m going to get – hardware that increases the capabilities of our smaller forces.

 

“There are, in fact, some very important and exciting jobs to be done. We are going to encourage those new initiatives. We are going to place more dependence on technology in the future. We are going to defend this greatest, freest nation in history. And with your help, she will remain free.”

 

3/24/71, Copy of  Press Release issued by the Department of Defense containing full text of Packard’s speech.

3/24/71, Copy of IEEE 71 Annual Banquet program

11/2/70,  Copy of letter to Packard from Emmet G. Cameron, IEEE, inviting him to speak at the International Exposition and Conference banquet in New York on March 24, 1971.

11/7/70, Copy of memorandum to Packard from Daniel Z Henkin, Assistant Secretary of Defense, recommending that Packard to accept IEEE’s invitation.

11/12/70, Copy of letter to Emmet G. Cameron, IEEE, from Julian R. Levine, Assistant Secretary of Defense, accepting, on behalf of Packard,  the invitation to speak on 3/24/71.

2/9/71, Letter to Packard from Emmet G. Cameron of IEEE giving details on the dinner arrangements.

2/19/71, Copy of letter to Emmet G. Cameron, IEEE,  from Packard confirming his attendance at the 3/24/71 event.

2/23/71, Copy of letter to J. H. Schumacher from Margaret Paull, Packard’s secretary, discussing hotel arrangements.

Undated, Schedule of day of 3/24/71

3/29/71, Letter to Packard from Thomas H. O’Brien saying he enjoyed Packard’s speech.

Undated,  Two Flyers from a local anti-military group attacking Packard personally.

 

 

Box 2, Folder 17 – Department of Defense

 

April 8, 1971, WEMA, San Francisco, CA

 

4/8/71, Copy of transcription of speech

 

Referring rather jokingly to recent dissent activities [and the fact that this speech was moved from Palo Alto to San Francisco by the DOD for security reasons] Packard says “I can tell you in all sincerity that the Department of Defense has made considerable progress during these past two and a half years under the leadership of my good friend Mel Laird.” And he says he wants to talk about three areas in particular where he believes some contributions have been made.

 

”The first is in the realm of international policy.

 

“Second, is in the reorder of the priorities of the Federal government.

 

“And the third is the changes that we have made in the management of the Department of Defense.

 

Saying that President Nixon “has set our country on a new course in foreign policy for the decade of the 1970s,” Packard refers to the President’s statement by saying  “no goal could be greater than to make the next generation the first in this country in which America has been at peace with every nation of the world. This has been a major transition in our national policy and in our foreign policy, and the Defense Department has had a substantial role in the development of this new foreign policy.”

 

Packard says “It is our objective to move this country from an era of confrontation into an era of negotiation.” And he cites examples where negotiation has been taking place: with the Soviet Union on arms limitation, with the North Vietnamese trying to solve the problems in Southeast Asia, in the Middle East, and with China.

 

“In addition to negotiations, there are two other pillars to this Nixon Doctrine, the pillar of partnership and the pillar of strength.

 

“And as the President has explained, the central thesis of the Nixon Doctrine, is that the United States will participate in the necessary defense and support of our allies and friends; that America cannot and will not conceive all of the plans, design all of the programs, execute all of the decisions, pay all of the bills, provide all of the manpower, and undertake all of the defense for the Free nations of the world.”

 

Packard says there are three elements to the Nixon Doctrine:

 

“The United States will keep all of its treaty commitments.

 

“Second, we will provide a shield if a nuclear power threatens the freedom of a nation allied with us or a nation whose survival we consider vital to our own security.

 

“And third, in the case of non-nuclear aggression, we will furnish such military and economic assistance as is required and as is appropriate.

 

“Vietnamization is the first major application of the Nixon Doctrine, and I am particularly proud of our Vietnamization program, because it was Secretary Laird and I, I believe, who first recognized in the spring of 1969, that it was very unlikely that there could be any profitable, substantial, effective results from the Paris negotiations, short of turning all of Southeast Asia over to the Communists, and, that indeed, a different solution had to be found to that problem.”

 

Packard gives some statistics showing the reduction of forces in Vietnam: “In 1969, the United States had an authorized military strength of 549,000 in South Vietnam….In May of this year, less than a month from now, the authorized strength will be down to 284,000. By Christmas of this year, we will be down to 180,000…”

 

Packard adds the thought that “This war will end not when the United States forces go home. This war will end when the North Vietnamese forces go home.”

 

“But as we emphasize partnership and negotiation in implementing this Nixon Doctrine, we must maintain a sufficient military strength of our own United States military forces. We cannot overlook the fact that the Soviets, the Chinese, in fact all aggressor nations and potential aggressor nations, respect strength.”

 

Packard tells of lessons learned in dealing with the “Jordan crises last fall.”

 

“First, it is important for the United States to have armed forces ready for unexpected developments.

 

“Second, the Soviet Navy is a growing threat to our ability to support our friends in the Mideast.

 

“Third, a very serious development was avoided primarily because Jordan had the military strength to solve her own problems. This stemmed in a large part from past American help.

 

“And, fourth, the existence of allies and friends in an area is crucial if the United States is to cope with a crisis in that area.”

 

“Now in reorienting our defense programs to support the Nixon Doctrine these past two and a quarter years, we have also been able to bring about a very substantial reordering of the Federal priorities. As you in this audience sell know, we are spending less on defense. No one wants to give us much credit for helping provide for more—for non-defense domestic programs, but that is in fact what we have done.

 

“In 1969, the Defense budget was nine and one-half per cent of the Gross National Product. In 1972, it will be 6.8 per cent of the Gross National product. This is the lowest it has been since 1951 when it was 6.7 per cent of the Gross national Product.

 

“The reallocation of resources within the Federal budget has brought defense down to 32 per cent for fiscal 1972. It averaged 51.4 per cent in the decade of the 50s, 32.4 per cent in the decade of the 60s, and I am confident that we can provide this country the military strength to support the Nixon Doctrine with an average of less than 30 per cent of the Federal budget in the decade of the 70s.

 

“The non-defense programs of this country received less than 50 per cent of the Federal budget in the decade of the 50s, less than 50 per cent of the Federal budget in the decade of the 60s, but will average more than 70 per cent of the Federal budget in the decade of the 70s.

 

“Now let me outline for you some of the problems we have in planning our military forces with adequate strength to support the Nixon doctrine for the decade of the 70s. To hopefully achieve this generation of peace we must have the strength to deter war; we must have strength adequate for a realistic deterrent. This must include our strategic nuclear forces as well as our conventional forces.

 

“Let me cite some of the problems we have, and some of the figures:

 

“In 1968, Defense outlays were $78 billion. In that year there were 4.8 million men and women on the payrolls of the Defense Department, military and civilian. In 1972 Defense Department outlays will be $76 billion. This $76 billion, however, will support only three and one-half million military men. To put it another way, it would cost us in 1972, $23 billion more than we plan to spend if we were to support the forces we had in 1968.”

 

“A part of our problem has been inflation, as I am sure you know. But our problem is primarily one of military pay. We have been asking the young men of our country to not only devote two years of their life to military services when they are drafted but we have been asking them also to make a very substantial financial contribution. It depends a little bit on the service and on the number of dependents and so forth, but as a ball park figure, pay and allowances for people who go into the service, first year, second year, amounts to about $2500 a year. We train young people to go into the New York police force and get $9,000 a year; they can go into other areas and get comparable amounts. So, in effect, we have been asking our young people in this country to contribute two years of their life in uniform and probably at least $10,000 in terms of their potential enemy [should be earnings].”

 

Packard says they are trying to correct this situation. He shows how military pay is rising faster than inflation.

 

“We have already said we will have in 1972, about three and a half-million people altogether on DOD payrolls, military and civilian. In 1964, there were about the same…actually 3.6 million. Pay and related costs for these 3.6 million people in 1964 were $22 billion. Pay and related costs for three and a half million people in 1972 will be $39 billion, almost twice as much.“

 

“So it is not an easy task to be sure that we can have the necessary military strength to support the Nixon doctrine with the budget levels I have suggested. It is not clear that we are going to be able to have the adequate capability at lower force levels, although, as I will now try and outline for you, I am convinced myself that this can be done.”

 

“But,” Packard says, “we have some problems to face.” And he describes the military buildup of both the Soviets and the Chinese.

 

“In the face of these challenges our defense task then is to develop and support the forces that will have the military capability adequate to deter the use of the forces by those countries that have them. We must recognize that this will have to be done with lower manpower levels and reasonable budgets in the future. Now the important word here is capability. Now a deterrence can be realistic only if our forces have capability.”

 

Even though “Our friends and allies around the world have increasing military capability, backed by increasing economic strength….Nevertheless, our Nation’s defense programs place before us some very demanding tasks “

 

“The essential requirement toward achieving realistic deterrence with lower military forces, is that we focus on the capabilities of these forces rather than on more units of forces.”

 

“As an example, we can be concerned about the number of our tactical air squadrons and make assumptions about their capabilities to the foreign missions. We could double the numbers of our airplanes at costs of billions of dollars, and thus, increase the capabilities, at least on paper.

“But we have elected instead, and we are going to provide improved weapons for our aircraft, and we believe by doing this, we can improve the capability of our forces by factors of 3 and 4, with only modest increases in expenditures.”

 

“There are, I am convinced, many, many things we can do to substantially improve the capability of our forces, things that we have not done effectively in the past, and I am confident that by applying a better—making a better application of our technology to our military problems,  that this job can be done. And that is why we are requesting in Fiscal 1972 budget, increased funds for research and development. And I am referring here to a real increase, not just enough to overcome inflation but enough to really increase our research and development over the level of effort over the past two years.

 

“If approved, this real increase in R&D can, of course, impact directly on the members of this industry. This increase reflects both the end of transition budgets and a constant decision to return to this Nation’s source of relative strength, its technology to provide forces for the realistic deterrents we need for the decade of the 70s at realistic budget levels.”

 

Packard gives some specific objectives in their 1972 budget.

 

“We are requesting $7.8 billion in the 72 budget [compared to $7 billion in the 71 budget]. We have a budget request based—focused on three significant areas. One is to make sure that we can maintain an adequate level of basic research in the military areas so that there will be no surprises, so that we are not likely to encounter a military sputnik over the years ahead.

 

“Second, we are requesting the Congress to address the question of funding the important research and development programs to make sure that they are funded so that they can be managed efficiently. And funding has been a problem in many ways. If you go back and change the funding of the programming every year it is impossible to have that program managed in an efficient way.

 

“And third, and perhaps most important, we are trying to place new emphasis on areas which hopefully can give us a quantum jump in our capability. New initiatives, as we call them. Some of these are already underway, but many of them are considered to be too expensive. The services would rather have a thousand 500-pound bombs than one weapon that would really do the job that might cost $200,000 or something like that. And we finally, I think, are getting our military people to come around to recognize these facts.

 

“It is my honest opinion that if we are to maintain forces that will insure the realistic deterrents at lower budget levels, the most important contribution we can make toward better capability is to increase the effectiveness of our defense research and development program.

 

“That is the message I bring to you here tonight, and I believe the Congress will support this emphasis on research and development because I believe they will agree that this country simply cannot afford to take the risks to the security of our people and to our position in world leadership with both lower forces and inferior weapons.

 

“Now whether an increase now in research and development for defense will bring back the good old days to your profession and to your industry, I cannot predict. I do not know how many of you here tonight are interested in doing research and development for the Defense Department in the future. I hope you have not all been misled into believing that the only field worthy of scientific and intellectual effort are health and environment. I hope some of you are still willing to work on national security problems. I want to tell you, we need you. Your Nation needs you, and we need your best efforts and your new initiatives now.

 

“And let us all understand that if the Congress includes my request for increased research and development funding for 1972, it has a binding commitment from me, a personal commitment, that research and development programs in the future will be better managed than they have been in the past.

 

“If you tell us you can develop a new system for national defense, we will expect you to build it, test it, and prove to us that it works, and we will expect that before we buy production quantities.

 

“Gentlemen, there is going to be less of this brochure engineering than there has been in the past. We want hardware that works, and not paper that claims it is going to work. And working hardware is what we are going to get, hardware that will increase the capability of our smaller forces.

 

“There are in fact some very important and exciting jobs to be done, and I have been very encouraged as I travel around the country and see some of the things that we are doing. It is a tremendously thrilling thing to see the enthusiasm and capability that we have in this area. We are going to place more dependence on technology in the future, and we are going to defend this greatest free nation in the history, and with your help, she will remain free.

 

“It has been a great honor and a pleasure for me to be with you here tonight. As I said in the beginning, I think it is a little unfortunate that here the leaders of the industry in this area are unwilling to stand up to that bunch of radicals down the peninsula. I just want to remind all of you that they want to destroy everything our country stands for, what you and I have been working together these past three decades to achieve. The Dave Harrises, the Jane Fondas, and all of those who support them, I want to remind you are your deadly enemies. They want to destroy you as well as me. Don’t let them do it.” [Notation in transcript: – Standing ovation]

 

1/4/71, Letter to Packard from R. L. Conlisk, WEMA, discussing details of the forthcoming WEMA banquet.

1/25/71, Letter to Packard from James N. Donovan, Varian, saying he is delighted Packard will be speaking.

3/25/71, Letter to Packard from Ed Ferry, WEMA, discussing the banquet and the audience. A copy of the program is attached.

4/16/71,  Letter to Packard from Ed Ferry, thanking him for speaking to WEMA.

3/30/71,  Strongly negative editorial from the Stanford Daily

Another neutral newspaper clipping, paper unknown

Eleven letters to Packard in support of his speech nineteen letters against what he was saying.

Box 2, Folder 18 – Department of Defense

 

April 29, 1971, Conference on Domestic Action, Ft. McNair

It is not clear exactly what Domestic Action refers to, but judging from Packard’s comments it must have to do with people

.

4/29/71, Typewritten text of Packard’s talk – written in semi-outline format.

 

Packard thanks the audience for their “achievements over the past two years,” adding that their program has the strong support of both Secretary Laird and himself. “We have reports that many have done outstanding jobs in the many areas of domestic Action. Yet, it is also the nature of DA that much more can and should be done. I note that the main theme of this conference addresses what needs to be done.”

 

Packard says he would like to speak “informally” for a few minutes about two  :

points

 

“First,  despite all the debate you see in the press about the costs of our weapons systems and the size of our procurement accounts – by far the most costly resource in DOD is people.

 

“Second, DOD has been an active participant in the current reordering of national priorities, and these priorities have shifted to programs that emphasize people.

 

“People as a Resource”

 

“—In both military and civilian organizations the senior people by the nature of their work tend to become insulated from the problems of individuals. Must guard against this. All the effort within DOD to manage dollars, to improve technology, to make progress in attaining a peaceful world – all the effort depends on the people who make up DOD – men and women, civilian and military.

 

“—Effectiveness is not just efficiency. It includes the satisfaction one feels in doing his job. A great strength of the DAP is that people get a great deal of personal satisfaction in my being part of such an effort.

 

“—No one can be effective unless he had self respect and a sense of individual dignity. DOD efforts in equal opportunity are directed toward this.

 

Packard says that while the above points may be well understood, “What is not generally recognized is how much people cost and how fast these costs are going up.

 

 

“– Within DOD, pay and related costs have increased by $17.6 billion since FY 64, our pre-Vietnam base year. This is an increase of over 80%. Yet over the same period, defense manpower has decreased 3.5% In short, we are paying a great deal more for less people than we did eight years ago.

 

“– Another measure is that in 1964 43% of the defense dollar was for pay and related costs. It is now 52% — an increase of almost 10%. Put another way, over half our budget is for people.

 

“—When you return to your organization, it may be useful for you to point out just how much our manpower costs us. You can properly sell most Domestic Action projects on the proposition that they enable DOD to get better performance and effectiveness from each individual. Clearly, we must do this in a period of declining budgets and rising cost.

 

Reordering of National Priorities

 

“—This is a problem of communication and understanding. Few people appreciate the extent to which national priorities have been changed.

 

“—Critics of DOD talk about the need to stop the increase in Defense spending and the need to reduce defense programs.

 

“—These critics argue that defense is a source of funds for other Federal programs that are under-funded in the areas of education, health, housing, welfare, mass transit, the environment, and many others.

 

“—In fact, this reordering has already taken place and DOD has played a leading role.

“—The FY 72 Defense budget is 6.8% of GNP, the lowest since 1951. It is 32.1% of the total Federal budget, the lowest since 1950.

 

“—Our Defense budget for “72 is $76B which is 50% higher than for 1964. The non-

Defense portion of the budget for the same period is 230% higher. This says the non-Defense increase is four times that for defense.

 

“—My point is that we in DOD have actively supported and agreed with this change of emphasis in the Federal budget. Our first obligation, of course, is providing adequate security for this country, and in general we believe that this shift has gone about as far as it can.

 

“—The DOD DAP is additional evidence of our interest in increasing the emphasis on human values and goals. This audience is very familiar with the details of  that program. Truly, the DAP does get double duty for the dollars allocated to defense. This is an added increment to those parts of the non-Defense dollar devoted to human programs.

 

“Conclusion

 

“—This conference is one way of spreading the word that domestic action has the strong support of Secretary Laird and myself.

 

“—I wish you good luck in your conference.

 

“—I am sure that at next year’s conference each activity and department will report ‘We have done more.’

 

 

Box 2, Folder 19 – Department of Defense

 

May 19, 1971, Remarks at U. S. Investment Conference, Washington D. C.

 

5/19/71, Typewritten text of Packard’s remarks

 

Packard’s remarks are essentially a summary of the Department of Defense’s position on Vietnam  and the fiscal budget. His audience is apparently made up of investment analysts.

 

He says that “…our move into Cambodia for an essential, short, military operation may make it seem to the foreign observer that our policies and our aspirations have changed. They have not. On Vietnam we are anxious to keep the negotiations going.”

 

“North Vietnam has refused to negotiate on any basis short of allowing them to take over South Vietnam. That is why we are pursuing the alternate course we call Vietnamization. The sole purpose of the Cambodian operation is to accelerate the progress of Vietnamization.

 

“The world is in a period of rapid change and whatever changes come about on the world-wide scene will be influenced by attitudes inside the United States. If the American people seem to be too disunited to assume any international responsibility, there will be a vacuum of leadership that will encourage conflict in the international sphere. It is our hope that the United States can exercise leadership to bring about the change President Nixon envisioned when he said we must move from an era of confrontation to an era of negotiation. Unfortunately, here at home we seem to be going in the opposite direction.

 

“We believe it is time to bring more than two decades of confrontation during the cold war into a period of negotiation in which countries of the world can begin to devote to peaceful constructive ends at least some portion of the vast resources and energies which have formerly been devoted to increasing military power.”

 

Packard says that the Nixon administration policies have re-directed Federal resources from defense to non-defense programs.  He says “This has placed a stringent requirement on DOD to maintain strength of military forces at lower levels of expenditure” And he gives the numbers going from $78.7B in FY 1969 to $71.8B in FY 1971.

 

“One of the important objectives of this exercise is to apply more of the nation’s resources to domestic programs. The reallocation of financial resources is significant. The resulting reallocation of people will – already has – generated some serious problems.”

 

Packard says “…we are doing what we can in helping local communities.”  However he adds that “The Federal mechanism is not as effective as the market place in allocation of resources in the American economy.

 

“The skills of the aerospace industry cannot be quickly reorientated (sic). The impact on professionals, scientists, engineers, young graduates. Impact on scientific progress.”

 

“What does this mean for the investment community?

 

(1)  “DOD budget and therefore defense-related industries will be lower and will continue lower if we are indeed able to move the world scene from confrontation to negotiation.”

 

(2)  “The transition to lower defense spending will cause dislocations in economy and the transition will take time….These budget actions are a major reorientation of our priorities. This should be ample evidence that we mean what we say.”

 

(3)   “It is not a safe course for the United States or its free world allies to go very far in this direction unless the Communist countries are willing – by agreement or by their actions – to move ahead on a similar course.”

 

(4)  “If the domestic attitude of the U.S. does not respond, if this country refuses to accept its proper responsibility in international affairs, the results for the world could become drastic and traumatic – particularly for people who wish to maintain their freedom.”

 

 

Box 2, Folder 20 – Department of Defense

 

August 3, 1971, Speech at the Defense Management School, Fort Belvoir, VA

This was the opening day ceremony of the school and the audience consisted of representatives from each of the three military departments, staff, faculty, students and wives of DSMS, and selected persons including contractors who contributed to the establishment of the facility.

 

8/3/71, Typewritten text of Packard’s speech, with some handwritten notations by him.

 

Packard says it gives him “more than the usual pleasure to be with you here today for the opening of the Defense Systems Management School.” And he explains that the school “…had its origins two and a half years ago in the discussions and assessments we made as we sought ways to improve the management of our development and procurement programs.

 

“There was no doubt about the need for improvement. As we reviewed program after program –the F-111, the C-5A, the Mark 48, the MBT-70, the Cheyenne, and many more, it was almost impossible to find a major program that was not in trouble. All were behind schedule, although in most cases this was because impossible schedules had been set at the beginning of the program. All showed large cost growths and again, in many cases, this was because unrealistic cost targets had been set or because the Services had accepted “buy-ins” by the contractors. This was a shocking experience for me – case after case of just plain poor management by the largest department of the government and by well-known and large firms in the industry.

 

“The Congress and the public were critical of this gross mismanagement of this country’s resources and talent. And well they should have been.

 

“As we sought to discover reasons for this dismal performance and to find ways for improvement, several conclusions came to the surface. One conclusion was that if we wanted better management of these important programs, we must have better managers in charge. The so-called “system,” – the attitudes and practices that had been developed and were condoned over the years – had a great deal to do with the situation. But, given that all of the other factors could be corrected, it was clear to me that putting better managers in charge would do more to bring about improvement than anything else.

 

“And that is why we are here today. This Defense Systems Management School has been established for the specific purpose of making a substantial improvement in the capability and effectiveness of managers for the important development and production of the Department of Defense.

 

“We want this school to become the Academy of Management for the Department and for all four Services. We want it to be a school of high distinction where the best of modern management practices are taught. We want it to become a center of research for the improvement of managerial practices. We wanted it to be located in the Washington area where it can both have an influence on and be influenced by the high level people and policies of the department.

 

“Now, I have a special hope for this important new endeavor we are christening here today. I hope it will be a practical school for, after all, management is a practical profession. Management is getting things done – good management is getting things done right. That is what this school is for – to help us get things done right.

 

“Toward that end I have some specific suggestions for the policy guidance of this school. First, I want you to remember that the quality of any school is determined only by the quality of the faculty and the quality of its students.”

 

“As to the faculty,  I hope you will be able to attract and select the best people for your permanent staff I hope you will also bring in distinguished men from the ranks of public and private management for lectures, seminars and other activities which will expose your students to the best practices of good management throughout the country.

 

“As to your students, I hope you will establish high standards for admission. You should admit no student from any Service unless he is committed to a career in management. Today’s problems of defense management are just too large to be handled by the two-year wonder. These jobs can be done right only by men committed to a career in management I hope you will not waste your time, your energies, and your resources on any others.

 

“Don’t rely on computers to solve your management problems. Computers can’t think. What we need most of all is more good judgment. Plain common sense – the ability to make a good decision and stand up for it.

 

“I am pleased to note that you have assembled a fine faculty and a fine group of students for the opening session.”

 

“Finally, I want you to know that this Defense Systems Management School we are opening here today has the complete support of my office. I have high hopes for what you can accomplish with this new endeavor. I assure you that Secretary Laird and I consider this a very important step in the all important goal of giving this country more and better defense for the billions of dollars we have to spend.

 

“You are entering upon a new and an exciting and important journey here today. If you and those that follow you do your job well, you can make an enormous contribution to your country. You have my encouragement, my support, and my blessing.”

 

7/9/81, Letter to Packard from Brig. Gen. William E. Thurman, Defense Systems Management College, thanking Packard for speaking at their “Unveiling Ceremony.” The General says, “The day would not have been complete without you because of your efforts toward making the defense systems Management College what it is today. We speak of you often and use many of your thoughts with each class to establish the purpose of the College.,”

 

 

Box 2, Folder 21 – Department of Defense

 

August 11, 1971, Major Defense Systems Acquisition, DOD/NSIA Symposium,

Washington D. C.

 

8/11/71, Typewritten text of Packard’s speech.

 

Packard says he is pleased that this symposium is being held at this time. ”During these past two and a half years we have been giving this subject a great deal of attention as you know. We have made what I believe is a good start in delineating some new policies and procedures which will make it possible for the Department and the Services to work more effectively with the Industry. I believe these new policies and procedures will enable the government to obtain more and better equipment for the billions of dollars of the taxpayers’ money that are being spent. I believe also these new policies can result in a stronger, healthier defense-related industry in the future.”

 

Packard says there will be continuing pressures on the defense budget and funds available for defense systems and equipment will be limited. This limitation, he says, is the result of a general anti-defense attitude in the country, and large cost over-runs by the Services and by industry. “There is no way to avoid this criticism except to do a better job in the future.

 

“When a system ends costing twice as much as the original contract target, as did the C-5A for example, there is no explanation but to admit it was bad management….The only answer is to find a way to do these jobs right and I presume that is why we are here today.”

 

Proceeding to outline some new policies and procedures, Packard says that “The first step for a successful Major Defense Systems Acquisition is to make the right decisions in the beginning. To do this is not a simple matter.” He goes over some examples of reasons this decision can be difficult.

 

Saying that “We are doing a number of things which we believe will enable better decisions to be made at the beginning of a major program,” he gives some specifics.

 

“First, we in the Department of Defense are going to better describe and understand what we want and need. As a part of this you can expect us to focus more on effectiveness and less on platforms. For example, in many cases it is just very much more efficient and practical to double the capability of weapons than it is to double the number of platforms to deliver the present weapons. Secondly, we are taking a broader perspective on what we already have and what we might need….We first describe what we want to be able to do within … functional areas, look at what we already have, and then identify what needs to be done.”

 

“We want to keep programs in Advanced Development longer, until we are sure we know what we are doing. We want to put more reliance on hardware and less on paper studies in Advanced Development.”

 

“…As an example, the AX program is based upon competitive prototypes that will be built and tested before we approve this system for procurement or select a contractor. In the case of the B-1, there will be a prototype before we approve this system for acquisition. The HARPOON missile will be expensively tested and developed in preproduction form before production is approved.”

 

“As I reviewed program after program beginning in the spring of 1969, almost all were in trouble from a common fault – production had been started before engineering development was finished. I am sure you all know all about this problem. Several important policies and procedures have been established to help avoid the disastrous results of concurrency:

 

  1. “We will not use total package procurement contracts on major programs;

 

  1. “In general, major development contracts will be cost-incentive type with performance milestones rather than calendar milestones, and will require close working relationships between Service managers and Industry managers;

 

  1. “Fixed-price production contracts will be negotiated on major programs after the development has proceeded far enough that we know what we are to produce, and we know it will work the way we want it to work.

 

“Again, we have established procedures to assure that programs are in fact set up the way they should be – that appropriate milestones of performance are established and are met before the program moves ahead.

 

“What we are proposing is very simple – these major acquisition programs will turn out better only if they are managed better. There is no better way to improve the management of a program than to get a better manager and give him the responsibility and authority to manage, We are making some progress in this direction. All of the Services have accepted the need to select better people for program management.

 

“We opened a new school last week at Fort Belvoir to improve management training. We have made some progress to clarify and improve the authority of the project manager. We have not yet gone as far as we need to go. The decision making process on many programs is still too much of a committee process in most of the Services. Worse than that, the members of the committees that make the decisions often know very little about the project except what they have been told and the decisions are often driven by the wrong considerations. There is, however, already considerable improvement.

 

“Two and a half years ago we had only a few programs that were going the way they should. Often I would go to a briefing on the status of a project and was completely disgusted with what I heard. Last week I was briefed on the status of four projects by one of the Services and I came away very proud of the way these projects were being managed.

 

‘There is, then, some hope we can, working together – the Services, the Office of the Secretary of Defense, and the Industry – do this job of “Major Defense Systems Acquisition  the way this country should expect us to do it. I hope we will gain a better understanding of how to do the job the way it should be done. I wish to emphasize that better management of these important programs is a responsibility above the parochial interests of the Services and above the selfish interests of the Industry. This would be a big challenge in times of rising budgets and enthusiasm for defense – it is an even greater challenge for us in the environment of this decade of the 1970s.”

 

8/11/71, Copy of DOD News Release with full text of Packard’s speech

 

 

Box 2, Folder 22 – Department of Defense

 

September 10, 1971, Federal Bar Association, New Orleans, LA

 

9/10/71, Typewritten text of Packard’s speech

 

“Today,” Packard says, “The rate of change in both domestic and foreign affairs perhaps exceeds any previously experienced. Our problem today is to guide and fashion these forces of change with wisdom and patience so that change is accomplished in a peaceful and orderly way. I believe the President’s programs – foreign and domestic – provide the basis for bringing about change in such a way that we can and we will move away from war and violence and toward lasting peace.

 

“It is our job in the Defense Department to provide the military strength adequate to support the President’s foreign policy for the decade of the 1970s.” And Packard refers to other priorities of the Defense Department. “We have substantially reduced the defense share of the Federal budget to enable the nation to devote more resources to the attainment of non-defense goals. But we believe that, without adequate national security strength, all these other goals in fields of domestic policy would be placed in jeopardy.

 

“We have reoriented our national defense programs in keeping with the Nixon Doctrine and our supporting National Security Strategy of Realistic Deterrence. In the process we have made significant reductions in the levels of our military forces.. In achieving these results, the greatly scale of our Vietnam involvement has been a major accomplishment. This and other reductions have made it possible to cut the cost of our defense forces from 9.5% of the Gross national Product in FY 1968 to only 6.8% in FY 1972.”

 

“We have now gone as far as we safely can go in reducing the defense budget. Further reductions in the defense budget below the present level could be very dangerous to our position of world leadership in the decade ahead.”

 

“In 1964 the United States had a significant superiority in strategic nuclear forces over the Soviet Union. The Peoples Republic of China had no nuclear forces.

 

“Today, the situation is vastly different. The Soviets not only have larger land-based inter-continental missiles than we, they have about 40% more of such weapons than we have. Their submarine-based nuclear force is growing by leaps and bounds and will be equal in size to ours in two or three years. In other aspects as well, their nuclear forces have been rapidly expanded since 1964.

 

“The result of this Soviet buildup is that now the Soviet Union stands on a par with us in overall offensive strategic power and surpasses us in defensive strategic weapons systems. The Peoples Republic of China also has tested nuclear weapons and missiles, and could, therefore, have in this decade a strategic force capable of threatening our friends and allies in Asia and perhaps even the U. S.

 

“Hopefully, we may, by careful negotiations with the Soviets, be able eventually to reduce the level of destructive nuclear power possessed by both sides to a lower level. But I believe we cannot and must not, under any circumstances, make unilateral reductions in the already-restrained levels of our nuclear forces, as some recommend.”

 

“Even with an agreement – which might be reached in the near future – I do not anticipate that there could be a significant and immediate reduction in the Defense Budget, particularly in view of rising manpower costs as we move toward an all-volunteer force.

 

“Another area of concern is Naval Forces. This is so because of the large Soviet Naval buildup since 1964. In that year, we had a decisive superiority in every class of combat ship in both numbers and capability except for non-nuclear submarines. During the past few years the Soviets have greatly expanded their naval forces, and now they can challenge our Navy in the Mediterranean and elsewhere, sending impressive naval task forces throughout the world’s oceans.

 

“Our planning for the future must include funds to strengthen our Navy, and it does.”

 

“…the national strength we need to give enlightened leadership to this troubled world is more…than just military strength. It includes our moral strength and our economic strength. This was explicitly taken into account when we framed our National Security Strategy of Realistic Deterrence. This strategy is embodied in our new Total force concept which seeks to utilize all appropriate resources for deterrence  — U.S. and the free world – in order to capitalize best on all available assets. Moral and economic strength are part and parcel of the overall strength necessary for this country to exercise its role in world affairs and to work in pursuit of President Nixon’s goal of achieving a generation of peace.”

 

“We need strength and moral fiber at home in order to succeed abroad. A nation that is weak internally and timid in spirit, cannot provide stabilizing leadership in international affairs.”

 

“I deplore any attitude that says – let Washington solve all problems. I have been in government long enough to know that Washington alone simply cannot do it.

 

“I believe it is very important that we arrest any attitude of increasing dependence on Washington. We must instead reemphasize our proven traditional concept that individuals working together in every part of this country – South, North, East and West – have the brains and energy to solve most of the problems that affect their daily lives.”

 

“Individual responsibility, decentralization of political power, and voluntary action in a pluralistic society are sources of American national strength. And there are other sources of our national strength to be protected and cultivated – free speech, full, open and enlightened debate on national policies, and a system of impartial justice based on law.

 

“Differences of opinion on the domestic front are not evidence of weakness. It is the nature of a democracy that we encourage a free exchange of ideas and must have constructive and peaceful dissent. But how dissent is expressed is important. Dissent expressed in violence is anarchy, not democracy. Democracy requires that we recognize one another’s rights. Violence is the antithesis of reasoned dissent and a denial of the rights of others.

 

“I need not explain to this audience that free debate, the rule of law, and the integrity of the process of law enforcement are essential ingredients of our national strength. Nor need I remind you of your obligation as members of the bar to uphold these things. It may be true that some countries can be at least temporarily strong without these things – but not the United States.”

 

“These historic principles need not, and do not, block needed change. On the contrary, they facilitate change. In my experience both prior to and within the Department of Defense, I have found that rational discussion among reasonable men can lead to change on both sides. We seek the opportunity to talk with those interested in change.”

 

“The Federal government must serve all of the people all of the time. It cannot yield to violence and disruption by a militant minority. And, your government – and the great majority of the American people – are determined that threats to bring the people’s government to a halt will not be permitted to succeed.

 

“In summary, I believe that we must emphasize a sense of responsibility in our deliberations and in our debates and actions to bring about change. This administration is taking steps to move toward peace and justice in a responsible fashion.”

 

Packard says despite the troubled times he is encouraged by the progress made over the past two and a half years.

 

“On the international front, we are well on our way to ending American military involvement in Vietnam without abandoning our friends in that part of the world. We are talking to the Soviet Union about strategic arms limitations, but we remain firm against precipitous, unilateral reductions. Navy Under Secretary John Warner will begin important talks with the Soviets next month on items of mutual interest to the two leading sea powers. There has been some hopeful progress recently on Berlin, and the President has reopened communications with the Peoples Republic of China.

 

“On the domestic front, I see signs of progress in drug control, in race relations, in reducing poverty and suffering, in educational opportunities, in controlling pollution, in fighting crime and toward new economic prosperity.

 

“I particularly applaud the President’s recent moves on the economic front. I believe these actions clearly recognize the fundamental problems underlying the serious inflationary pressures as well as the changing pattern of world economics.

 

“We may not reach the millenium in the 1970s but I believe we are off to a good start. I am confident that your organization, under the leadership of Normand Poirier and Dick Kleindienst, will continue to make a great contribution to the preservation of the vitality of our democracy – preservation of the vitality of our democracy – preservation of a national environment of excellence in which each individual can make his and here contribution to progress to prosperity and to peace for the next generation and beyond.”

 

9/10/71, Press Release from Department of Defense with full text of Packard’s speech

9/10/71, Copy of the program of the Federal Bar Association Annual Convention

9/10/71, Typewritten copy of speech given at this Convention by John Warner Director , Ocean Affairs – amended by hand written notations.

7/20/71, Letter to Margaret Paull (Packard’s Secretary) from Elaine Crane Assistant to Deputy Attorney General Richard Kleindienst talking about details of the banquet at the Convention.

8/20/71, Letter to Packard from Marshall Gardner , The Federal Bar Association, discussing details of Packard’s trip to New Orleans.

9/9/71, Memorandum from Col. James Boatner giving itinerary for Packard’s trip to New Orleans.

 

 

Box 2, Folder 23 – Department of Defense

 

November 4, 1971, Meeting With Newsmen

 

11/4/71, Typewritten transcription of question and answer session Packard had with newsmen.

 

Packard starts by introducing Dr. Albert C. Hall who, he explains, will be the new Assistant Secretary of Defense for Intelligence. Packard goes on to discuss the intelligence field and what he has in mind for this job.

 

“Let me go back now and talk about intelligence in general terms, and in terms of the three areas that we sometimes think about, which is national intelligence, tactical intelligence, and technical intelligence. National intelligence is that information and its interpretation that is needed by the President, his Cabinet, the Secretary and other officials to make important decisions.”

 

“Tactical intelligence, I think, is just about self-explanatory. That’s what the field commander needs to command his forces and this is, of course, a very critical matter because the extent to which he knows what the enemy is going to do, he’s in a position then to command his forces in a more effective way.

 

“…as we address the question of what kind of new weapons we should develop, it’s very important that we have some understanding about the characteristics of the enemy weapons because we are anxious to either have superior weapons, weapons that will be able to counter whatever the enemy capability may be.”

 

In response to questions as to the specific nature of Dr. Hall’s position Packard says he (Dr. hall) will be coordinating the budget control of the intelligence operations, but will not be supervising the operations themselves.

 

Another question asks about two complaints; one, that with each Service and the CIA “doing their own thing” there is no direct civilian control, and two, with all the “mountains” of data collected whoever gets time to read it all?

 

In answer to the first question Packard says “…our problem [in gathering all types of intelligence] is not to say there can be only one intelligence activity because the issue is just too complex, but to try to be sure that we bring all of these into focus….We will be looking at those issues – the balance between technical, tactical and national intelligence and the balance between those people who are involved in those areas, [is] going to be a very important part of [Dr. Hall’s] job.

 

“On the use of resources, this again is an issue and as I’ve intimated you have two problems in intelligence. One is to collect all the information that’s available and the second is to be able to understand what that information means. We have already spent some time in addressing this matter of balance between how much information we’re collecting and our ability to utilize it effectively, and that again will be something that will be continually addressed.”

 

Q: The questioner says he understands there are 140,000 people or so on the Defense Department payroll involved in intelligence. And he asks if this number will be cut.

 

A: Packard says “I couldn’t give you any judgment about what reductions, if any, can be made. I’m confident from what I know about it that we can do a more efficient job of managing these resources, but I just can’t give you any specific predictions nor even a very good calibration point that I can confirm to you today.”

 

Q: “Again, without centralized authority, Mr. Secretary, what can you do about the problem of redundancy?”

 

A: “The way you worry about the redundancy of functions is to be able to examine what this group is doing and to be able to do that in relation to what some other group is doing If you find there are duplications that are not appropriate, you can make the necessary changes. I think one way to consider these staff jobs, and this applies not only to intelligence but to other jobs, one of the responsibilities is to make sure that there’s not unnecessary duplication and second to assure that we’re not leaving something out, and this applies to DDR&E and other people as well as this function.

 

Q: “Let me raise another criticism and see what your answer will be. The criticism would be that a businessman’s approach to intelligence is the wrong technique and the wrong place. Intelligence by its nature has to be inefficient, has to be redundant, and that to use normal business efficiency methods is going to deprive you of some opposing intelligence views from the field.”

 

A: “I think that’s perhaps an oversimplification, but there is something to that, and it relates to the sort of thing I talked about in national intelligence. It’s impossible to have one crystal ball that’s going to be perfect, and I’m not at all troubled with maybe having two separate groups involved in certain of these things simply because you have no assurance that one group is going to do it right and maybe have a little competition is a helpful thing, so I don’t think you just go through this and say there can be no duplication.

 

Q: A questioner asks about foreign aid.

 

A: ”I’d be very glad to say a word about foreign aid. As a good many of you know, I’ve been working very closely in this foreign affairs area since I came out here. I started out working closely with Dr. Kissinger, the NSC, and doing some of the analysis that resulted in the backup for the Nixon Doctrine; the decision that we would move toward more reliance on our friends and allies, that we would move from an era of confrontation into an era of negotiation has been something that I’ve been very much interested in and very close to. I think that most of you know probably that I have supported the President very strongly, even in the Cambodian incident, and so I’m fully and enthusiastically behind the things that the President has been doing these past 2 ½ years and I’ve been frankly very pleased to have had some part in working with the White House and the President in supporting this program.

 

“To me, the Senate action last Friday was an absolute disaster. Here at the time when we’re trying to move into a new and, I think, very important inter-national posture where the President has moved out into some areas which I see as beginning a new era in the United States relationship with the rest of the world, not only the Free World but the entire world, and for at this time the Senate to undercut this whole program by voting against foreign aid, by turning down the foreign aid bill, is just about the worst thing that could have happened.

 

“The thing that troubles me in particular is that I don’t believe that a good many of the Senators who were involved in this really understand what a serious blow they’ve given to this matter.”

 

“The trouble with the situation is that the damage has been done, and the confidence that our friends and allies and other people around the world can have in what we will do in the future to support them and to work with them has been seriously undercut by this Senate action. It will help if the full foreign aid request of the President is reinstated, either through a continuing resolution—and this as you know will have to be done before the 15th of this month because that’s when the present continuing resolution runs out – or by a substantial reinstatement of the original request, I think any piecemeal program that cuts in any substantive way to military assistance or economic assistance will just confirm the fears that have been generated by this action.”

 

Q: The questioner says that critics say it is meaningless to “shower” arms on a country if the population is not behind the local government; and asks why that won’t happen in Cambodia.

 

A: “I just can assure you that we’ve learned a lesson. We’re not going to get involved in Cambodia. We have a very low presence there, but at the same time the Cambodians are very anxious to defend their country and the thing that everybody forgets is there’s one way for this war to end in a hurry and that’s just for the North Vietnamese to go home.

 

Q: A questioner asks if there is a direct link between the cutoff of aid and withdrawal of troops from South Vietnam.

 

A: The answer is no, and I would not want to comment about the withdrawal of troops. As you know, the President is going to make an announcement here in a couple of weeks and I think we’ll just wait and see what he says about that matter.

 

Q: Mr. Secretary, it’s not clear to me whether you’re saying this is a disaster no matter what happens from now on or whether you think there’s some way to save the chestnut and that’s to back out of the fire.

 

A: “What I’m saying is that I think a significant amount of damage has been done almost no matter what happens.”

 

Q: “Secretary Packard, are you just inferring that our allies are going to lose confidence or do you have specific concerns from certain countries?

 

A: I can’t fill in specific details today, but we’ve had specific concerns from a great many very important people.

 

Q: I wonder as you survey the legislative wreckage, and you said that you did not anticipate the shellacking you got in the senate, and it’s been pretty clear that Senator Symington and others on the Hill don’t trust the Pentagon and what it’s doing in these foreign countries before you’re not giving them an adequate amount of information, and yesterday we went around about how tight your ISA is about telling what it’s doing in the world and what the military loans are doing, and they won’t even admit when you call them and say what are you doing about this aerospace plan in Greece, and we could go on and on. My question is, have you perhaps thought about reassessing what you do say publicly to try and explain what this military aid is all about and what you’re trying to do and what concessionary loans are and what they’re buying with them and where they’re going. I think you have a credibility gap.

 

A: I don’t want to answer those specific questions, but I’m quite willing to admit that we’ve failed to get the story over. As I said, I’ve been working in this issue very closely. I’ve been very enthusiastic about it. I think it’s the right way to go and somehow we haven’t gotten the story over. What we can do to improve in the future I’m sure we will give some consideration to. I can’t talk about specific actions.

 

 

Box 2, Folder 24 – Department of Defense

 

November 21, 1971, Society of Medical consultants to the Armed Forces

 

11/21/71, Ten 3×5 inch cards upon which Packard wrote an outline of his comments.

 

Thanks for 26 years of important contributions

 

Medical practice and medical research are important to Services.

 

Acknowledge Dr. Richard Wilbut

 

This has been an interesting and busy three years for Department – much criticism’ but satisfying progress

 

Changes in organization and management philosophy

 

Re-ordering of priorities:  DOD budget 9.5% if GNP to 6.8%

 

Development of Foreign Policy for the decade of 1970s

 

President Nixon has made a historic transition from an era of confrontation into an era of negotiation

 

Post WW II Foreign Policy – Dominant military, dominant economic

 

Containment of Communism NATO, CENTO, SEATO, DOREA, JAPAN

 

The world has changed from period which spawned this policy

 

Soviet military strength, economy growth – Europe, Japan, also Korea, Thailand, Taipei

 

Split in Communist Block – competition between free world remains but war between major powers is not attractive…Negotiation, Strength, Partnership

 

Vietnam – Most influential

 

Indo China – key to stabilization of SEA

Korea, Japan

 

NATO – U. S. Must remain

 

Mid-East, South Asia and Indian Ocean

 

Negotiation – Salt, Berlin, MBFR, Mid-East

 

Foreign Aid essential

 

Moral of friends essential

 

World relations are going through major changes

 

President Nixon has shown great leadership – he needs our support

 

11/3/71, Letter to Packard from Bernard Pisani, M.D., society of Medical Consultants to the Armed Forces, discussing details of their Meeting

Undated, Typewritten draft of outline “for possible remarks to Society of Medical Consultants to the Armed Forces.” Source not clear.

1970 – Packard Speeches

Box 1, Folder 51 – Department of Defense

 

January 10, 1970, Launching of Bluefish, Electric Boat Co., Groton CN

 

1/10/70, Typewritten text of Packard’s speech.

 

Packard says he is “honored to play a part in the launching of this fine ship.” But he adds that “I am here only because of the function Mrs. Packard performs today in her role as sponsor…”

 

Packard reflects on the significance of the launching by noting that “today precedes by just seven days the anniversary of that winter morning in 1955, here at the Electric Boat Division of General Dynamics, when Commander Eugene Wilkinson ordered the crew of the NAUTILUS to cast off her lines. As most of you know, Rear Admiral – soon to be Vice Admiral – Wilkinson is here with us today, and I offer my personal congratulations to him for the important contributions he has made over the years to the nuclear power program.”

 

Packard also pays tribute to Vice Admiral Hyman G. Rickover – “the man who played the key role in the development of nuclear propulsion technology.” [Rickover was not present, Packard notes]

 

Referring to Rickover’s “pioneering work”, Packard says that “it takes extraordinary effort and dedication to transform vision into reality. Prior to NAUTILUS, there was no true submarine. Our early submarines using batteries and diesel engines were required to come to the surface frequently to charge their batteries and obtain oxygen for their crews….Only by harnessing the atom was man able to achieve the first true submersible, a ship that was at home under the water rather than on its surface.”

 

Packard mentions some of the achievements of the early nuclear boats: “On her shakedown cruise in 1955, in only 84 hours NAUTILUS traveled submerged more than 1300 miles – a distance greater by a factor of ten than previously traveled by a continuously submerged submarine.

 

“In August 1958, NAUTILUS …crossed from the Pacific to the Atlantic under the North Pole during a four-day, 1800 mile voyage. In that same month SKATE reached the North Pole and in the following year pushed her way through the ice to surface at the geographic North Pole.

 

“In 1960, TRITON, following the route taken by Magellan over 400 years earlier, went completely around the world in 83 days and traveled 36,000 miles without surfacing.”

 

“But in sharp contrast even with this impressive durability, the nuclear fuel installed in the BLUEFISH will provide power for about 400,000 miles of travel while costing slightly less than the NAUTILUS fuel.”

 

“The advent of nuclear submarines made possible the development of one of our most important strategic weapons. Even while the NAUTILUS was still undergoing operational testing, the Navy began development of the sea-based ballistic missile…. The POLARIS projects a new dimension of sea power, and the 41 POLARIS Fleet Ballistic missile submarines we now have in operation constitute a vital pillar of this nation’s security.”

 

“Nuclear propulsion has not been limited to submarines. The Navy presently has one nuclear powered aircraft carrier, a nuclear powered cruiser and two nuclear powered guided missile frigates. Today we are building the USS NIMITZ, our second nuclear powered aircraft carrier. We are also building two new nuclear frigates, the keel for the first of which, the CALIFORNIA, will be laid down later this month These ships provide the foundation of a nuclear powered surface Navy that can go anywhere in the world at instant notice.

 

“Why do we build such ships? As Secretary of Defense Laird has recently stated, we build them to keep the peace.

 

“If history teaches anything, it is surely that weakness invites attack. Our military power is our peace insurance. But military power is not enough: it must by backed up by an unshakable national resolve to defend our vital interests throughout the world.

 

“The Soviet Union understands seapower and she is mounting a formidable challenge to our ability to control the seas in wartime. It is clear that sea power will continue to be an indispensable instrument of our national policies and those of the Free World alliance, and that is why we continue to build those ships necessary to maintain a Navy equal to any challenge we may face.”

 

Returning to the BLUEFISH Packard says “She incorporates thousands of technical advances developed by our scientists and engineers over the last decade and a half. She represents one of the most sophisticated and complex weapon systems that can be built today.”

 

“All of you here at Electric Boat can take pride in this ship – a symbol of the finest effort of American industry and labor.

 

“I am enormously proud of the men and women who serve in uniform of our country. I am told that there are representatives of 38 nuclear submarines here today, and it is fitting that their wives are here as well, since they too share the sacrifices inherent in military service.

 

“Finally, we have that small group of men who will one day take BLUEFISH to sea. It is their judgment and skill which will make BLUEFISH an effective, fighting ship – a proud addition to the Navy. On behalf of your country I wish you and BLUEFISH success – and smooth sailing.”

 

1/10/70, Typewritten address from President Nixon apparently read by someone at the launching ceremony.

1/7/70, Copy of a telegram from Vice Admiral Rickover to Mrs. Packard congratulating her for being a sponsor of the BLUEFISH.

Undated, Copy of suggested guest list for the ceremony.

 

 

Box 1, Folder 52 – Department of Defense

 

February 13, 1970,  American Management Association, Gantt Medal Award, Chicago IL

Mr. Packard spoke at this luncheon after receiving the 1969 Henry Laurence Gantt Memorial Medal which is given annually by the American Management Association and the American Society of Mechanical Engineers. The Medal is awarded for “distinguished achievement in management as a service to the community.” The recipients are “leaders who have demonstrated a profound understanding of management as something beyond the pursuit of profits for an organization or self-aggrandizement for an individual.”

 

2/13/70, Typewritten copy of speech by Packard with some of his handwritten notations.

 

Packard says  he is grateful for this award, but he is not sure whether it is in recognition of his work in the private sector, or for his present activities as Deputy Secretary of Defense. He notes “with some dismay” that 1969, the year he was away, was the best year Hewlett-Packard Company has had. And as for his governmental assignment, Packard concludes “that members of the Board are not regular readers of certain daily newspapers. If they did, their decision would certainly have been otherwise.”

 

Packard says he plans “to wear this medal whenever I testify before congressional committees.”

 

Packard talks about the differences between management in private industry and in the Defense Department – “sheer size…4.6 million people, military and civilian. ..assets of $200 billion. The Department annually engages in more than 200,000 procurement actions of $10,000 or more involving more than 100,000 prime and sub-contractors. It manages installations and facilities, equipment and manpower in all 50 states and in more than 100 foreign countries.”

 

“A second difference between management in the Department of Defense and in a private enterprise is in evaluating results. We have no profit and loss statement to work against. The weapons we build for the defense of our country serve the country best if they never have to be used. This is most emphatically true of our nuclear weapons.

 

“The performance of the Department of Defense can be measured only by the extent to which the Department contributes to the overall interest of the nation. All management decisions in the Department must be measured against this all-important criterion.

 

“Since so much of the business of defense is preparation to avert possible future calamity, only after many years will we be able to determine with complete assurance whether we are doing the right things in the right amount and in the right way today.”

 

Packard cites “two additional factors that make Defense management a difficult  — indeed, a hazardous – occupation.

 

“The first factor is the opposition to things military on the part of an articulate body of public opinion. When a large number of people view an enterprise with suspicion or hostility, the problem of giving effective management to that enterprise is compounded.”

 

“The second factor that currently adds to the difficulty of managing the Defense Department is the fact that the Department is no longer a growth industry. On the contrary, it is now in the throes of rather rapid shrinkage.”

 

Packard cites reductions in expenditures and manpower in FY 70 and planned for FY 71.

 

“While these special management problems are inherent in the Department, and are not likely to change, we have taken a number of steps during the past year which I believe are in the direction of much needed improvement.

 

“Three important steps are directed toward making better decisions on the size and character of military forces which are needed to support the national interest. These are the key decisions which must be made before questions relating to the kinds and numbers of weapons to be developed and procured can be addressed.

 

“Fist,  the National Security Council machinery has been revitalized to evaluate more carefully what the worldwide commitments of the United States should be, and what military force levels are necessary to support those commitments.

 

“Second, a new arm of the National Security Council has been established called the Defense Program Review Committee to address questions of defense policy at the level of specific military programs. The PackardRC has the task of considering major defense matters, not only from a military standpoint, but also from a broader viewpoint. In particular, this group addresses defense matters in relation to the non-defense priorities of the nation and recommends resource allocation between defense and non-defense programs.

 

“Third, we have made changes in procedures within the Department of Defense for developing budgets, five-year plans, and programs. The changes, which provide for more effective participation by the Joint Chiefs and the military services, are producing more realistic planning and budgeting and better teamwork among the services.”

 

Packard then turns to a problem they have been addressing – “the question of how to improve the management of the development and procurement of specific weapons and equipment. With the great furor this last year about cost growth and cost overruns, it should come as no surprise that we in the Defense Department are also concerned.

 

“As one examines programs which are in trouble – and we find lots of examples – there are some conclusions that can be drawn about the origins of the problems.

 

“It is clear that the problems of developing new and complex weapons and equipment have, in nearly every case, been under-estimated with the result that early estimates of both cost and time required for development proved faulty.

 

“Too much emphasis has been placed on meeting rigid time schedules with the result that production was undertaken too often before development was finished. The short cut of rushing into production before resolving the problems encountered in research and development has been costly.

 

“Altogether, too little attention has been given to controlling cost.

 

“Program managers have been rotated out of their jobs before they became fully effective to be replaced by new managers without prior experience with their programs.

 

“Authority and responsibility have been diffused among many offices and individuals so that decision making has been retarded.”

 

Packard then describes “one fundamental change in management concepts that is gradually being introduced in the Defense Department which I think will lead to improvement across-the-board -–the concept of selective decentralization.

 

“We believe that more decentralization will improve management efficiency. This involves reducing the number of layers of management, and a more precise definition of the responsibility and authority of various offices in the OSD and in the Services.”

 

“When Secretary Laird and I assumed office, it seemed that too many decisions had to be made at the top and that too detailed a supervision of operation was carried on in the Office of Secretary of Defense. We are shifting to the military services more decision making authority.”

 

“Increased authority at lower levels requires increased responsibility for results.

 

“This means more emphasis on people and so I cannot conclude a discussion of management of the Defense Department without a word about people, who, as you know, are far more important to successful management than procedures.

 

“We are seeking to open up channels through which bright ideas down the line can be brought to the attention of those at the top. We are seeking to broaden the flow of information on Defense policy throughout the Department. And we are doing our utmost to assure that no barriers exist to the upward movement of talented people – particularly barriers based on race or creed or national origin.”

 

“Successful management of the Department of Defense depends to an important degree on the quality of management in the private industry of our nation. This is true for a number of reasons. Those who come to us to fill managerial positions often have had experience and training in private industry. Further, we must look to industry to produce the equipment and the arms with which our armed forces defend our nation.

 

“At the present time the Department of Defense is taking advantage of the managerial talent of the private sector in the study of its organization and operation that has been undertaken by the Blue Ribbon Commission chaired by Gilbert Fitzhugh, Chief Executive Officer of the Metropolitan Life Insurance Company. The report of this Commission, expected in mid-1970 after its year long study, should result in greater efficiency and effectiveness in the use of the resources committed to defense.”

 

“I accept this medal, established in memory of a great pioneer of good management, Henry Laurence Gantt, with a commitment to do my best to apply those principles to the job of making sure this country receives maximum value for every dollar spent on defenses.”

 

12/13/70, AMA Program for the Conference and Gantt Award

2/13/70, Press release issued by the DoD Public Affairs office containing the complete text of Packard’s speech.

2/13/70, Copy of the program for the award event.

12/2/69, Letter to Packard from Theodore T. Miller, Chairman Gantt Medal Board of Award acknowledging Packard’s willingness to receive the Gantt Award.

12/10/69, Press release from AMA announcing Gantt Award.

12/16/69, Letter to Packard from Fred Lee, AMA, discussing details of the award ceremony.

12/23/69, Letter to Packard from Richard R. Deupree, saying the AMA had invited him to the Gantt Award honoring Packard, and he is sorry he will not be able to attend.

1/6/70, Copy of a letter from Packard to Lawrence A. Kimpton, Director, Standard Oil Company of Indiana expressing his appreciation that Mr. Klimpton will present him at the Gantt Award.

1/12/70, Copy of a letter from Fred E. Lee, AMA, to Lawrence A. Kimpton saying the AMA is happy to hear he will present Packard at the Gantt Award, and asking for a copy of his remarks.

1/18/70, Letter to Packard from Lawrence A. Kimpton saying it will be a pleasure to present Packard at the Gantt Award.

1/21/70, Letter to Packard from Fred E. Lee asking for Packard’s travel plans.

1/12/70, Copy of letter to Packard from John McClane AMA, asking for a copy of Packard’s speech if prepared.

1/13/70, Letter to Packard from Professor Paul E. Holden, Stanford, who says he received the Gantt Award in 1941. He regrets he will not be able to attend the presentation to Packard

1/22/70, Copy of letter to John McClane, AMA, saying Packard will not have a copy of his speech ready in advance.

12/14/71, Letter to Packard from Robert G. Butler, AMA , inviting Packard to the Gantt Award ceremony for the 1971 recipient. Packard has written “No”  at the bottom.

2/12/70, Copy of a telegram to Packard from Mel Laird congratulating him on receiving the award.

Also included are several pamphlets about the AMA and the Gantt Award

 

 

Box 1, Folder 53 – Department of Defense

 

February 19, 1970, Consequences of the Nixon Doctrine, American Enterprise Institute, Washington D. C.

 

2/19/70, Typewritten text of speech by Packard.

 

Packard says it is a pleasure to join the American Enterprise Institute at their annual banquet. He recognizes the contribution the AEI has made “to the improvement of communication and the elevation of the level of debate about public policy issues.”

 

Packard continues saying “One of the things I have learned in the course of approximately one year in public office is the difficulty of effective communication between government and the public. In every controversy in which the Department of Defense has been involved during the past year…we have had great difficulty in obtaining public understanding of the real issues. And a useful dialog on public policy is not possible without such understanding. I am aware also that there are some who permit their emotions to take charge in their consideration of certain issues and who do not want to understand.”

 

“So I am grateful for the help that an organization like AEI provides in offering objective analysis of policy alternatives. The clarification of issues is a great service to the strengthening of the political process by which the American people have chosen to govern themselves.”

 

Packard says there are many things he could talk about –“fires to put out – problems with new weapons procurement – problems with new weapons procurement – cost growth and – yes, cost overruns – to mention a few of the things that currently absorb my time and attention.

 

“This evening, however, I want to explore some aspects of the significant and profound change in the nation’s foreign and defense policy now in process of implementation.”

 

The new policy was announced by President Nixon during a TV address to the nation, and Packard lists the primary points:

 

“First, the United States will keep all of its treaty commitments.

 

“Second, we shall provide a shield if a nuclear power threatens the freedom of a nation allied with us or of a nation whose survival we consider vital to our security.

 

“Third, in cases involving other types of aggression, we shall furnish military aid and economic assistance when requested in accordance with our treaty commitments. But we shall look to the nation directly threatened to assume the primary responsibility of providing the manpower for its defense.”

 

“The Nixon Doctrine is a new policy for the United States, better attuned both to international reality and to the mood of the American people in the 1970s.

 

“Within our country a feeling had spread that the United States had become the world’s policeman and thereby had overcommitted itself. The long conflict in Vietnam with no end in sight and the growing strains of critical domestic problems had resulted in widespread disillusionment which focused on our foreign policy.

 

“The people of other nations which looked to us for protection had developed a kind of love-hate relationship toward us. Even while expecting continued support and defense from the United States, such nations became restive under what seemed to them excessive American tutelage, and, in some of them, anti-Americanism in varying degrees became part of their standard political rhetoric.”

 

Packard does say that “It should not be overlooked that these facts on international life, although they suggested the need for a new policy for the 1970s, do indicate that past policy was appropriate in the period in which it was developed. In most respects it achieved its objectives of providing effective security and fostering development for our friends and allies.”

 

“One of the dangers that faced the nation last year – and it is a continuing danger – is the possibility of overreaction against policies that were no longer appropriate. The swing of the pendulum from a policy that had become too paternalistic, both for the American people and for other nations, could very easily be so strong as to take us to the opposite extreme of isolationism and rejection of any international responsibility.

 

“The Nixon Doctrine avoids both extremes. It reaffirms our international responsibility and serves notice that we will not be a drop-out from the world community. At the same time it makes clear that we will not be the world policeman or the world fire brigade.

 

 

“The essence of the Nixon Doctrine is that the responsibility for international security should be shared. While the United States will continue to bear an important part of the burden, other nations will be expected to assume a greater responsibility in providing for their own defense.”

 

Packard says that “In Vietnam the first application of the Nixon doctrine is taking place. There, in an orderly way, the responsibility for combat is being transferred to the Armed Forces of Vietnam, and American troop strength and involvement in the conflict are being reduced.”

 

“A basic consequence of the Nixon Doctrine is reflected in the larger slice of the budget devoted to domestic needs and the smaller slice to defense. In fiscal year 1971, for the first time in 20 years the share of the federal budget devoted to human resources will exceed that allotted to military purposes.”

 

“This does not reflect any downgrading of defense.

 

“The protection of the nation is our first responsibility, and we must always maintain the strength required for this task

 

“Keeping this responsibility in mind, we are making cuts of some magnitude in the Defense budget. In current dollars, the Department’s expenditure in fiscal year 1971 is estimated at $6.9 billion less than in fiscal year 1969. In real terms, however, the reduction is almost twice this amount – a whopping $12.8 billion. This is the true measure of the program reduction that is being accomplished.”

 

Packard points out that these figures “portend some very important implications for the economy of the nation….There will …be important reorientation of resources.

 

“The curtailment of the claims on the nation’s resources for defense means a drastic shrinkage in the demand for manpower both for the armed forces and for employment in defense industry. We estimate that more than one million fewer men will be employed directly by the Defense Department or by private industry in defense-related production by June 30, 1971 than were on June 30, 1969. This should bring an easing of tight labor markets and of one source of the inflationary pressures that have troubled the economy.”

 

“On the other hand, Packard points out that “Over the longer time this transition of resources from defense to human needs poses problems which will impact on the entire economy  of the country. The problems of transferring scientists and engineers from defense problems to human problems is not easy….Unless other opportunities for employment become available, we must recognize the obvious fact that as total jobs in the industry are reduced, national unemployment could rise and the brunt could fall on those who are just beginning to make some progress toward their rightful aspirations.”

 

Packard says that in formulating their budget recommendations, Secretary Laird and he have been mindful of the “dangers of cutting too abruptly and too deeply….We believe that any reduction in the Defense budget beyond that submitted to congress would run serious risks of the kind I have described.”

 

Packard moves on to a discussion of the implications the Nixon Doctrine will have regarding the “long standing policy of assistance to friendly foreign nations.

 

“If our friends and allies are to assume an expanded role in defending themselves, certain steps must be taken to improve their military capabilities. Since many of these nations are still economically less developed countries, they are unable to stretch their won financial resources to acquire the military equipment, supplies, and services which they need immediately….”…there is a real need to get ahead quickly with the task of replacing obsolescent equipment.”

 

Since these countries will not be able to pay out the large funds required immediately, Packard says “…the Foreign Military Sales Act, and particularly its provisions for credit and credit guarantees for the lesser developed countries, will become an increasingly important tool for the furtherance of our common foreign policy objectives.”

 

Packard also says the Military Assistance Program can be considered  to assist those countries where “cash and credit sales will not suffice to meet essential needs.”

 

“Yesterday, in his message to the Congress entitles United States Foreign Policy for the 1970s, President Nixon spoke of the three cornerstones of a foreign policy that seeks to restore and maintain peace – partnership, strength, and willingness to negotiate.

 

“ I have chosen tonight to speak about the first of these, the concept of partnership as the President is implementing it.

 

“But these three principles are indivisible. Our foreign policy must be guided by all three if it is to make progress toward the goal of peace.

 

“The new road to peace on which we have begun will be long and arduous. We have embarked on a course of policy which the President declared is “an adventure realized not in the exhilaration of a single moment, but in the lasting rewards of patient, detailed and specific efforts – a step at a time.”

 

“We are far from the end of this road to peace, but we have taken our first steps.”

 

2/19/70, Copy of press release from the DOD with the complete text of Packard’s speech.

 

 

Box 1, Folder 54 – Department of Defense

 

February 26, 1970, University of Rochester College of Business Administration

 

2/26/70, Copy of typewritten text of speech by Packard. This speech is very similar to that which Packard gave to the American Management Association on the occasion of his receiving the Gantt Medal. Also included in this file is an outline of  his remarks at the University of Rochester. The following first gives a digest of from the text of the speech at the AMA, and then notes from his handwritten notes. It would appear he used both in his address at the U. of R.

From the AMA address text:

Packard says that the job of managing the Department of Defense “includes all aspects of management that are involved in any enterprise”… but he cites a few differences:

 

The first being size. “The Department currently employs 4.6 million people, military and civilian – almost as many as the 30 largest industrial companies. It is spending $77 billion dollars in the current fiscal year. Its assets run in the neighborhood of $200 billion, more than the combined assets of the 75 largest companies. In the private sector of the economy, more than two million workers are employed to fill defense orders. The Department annually engages in more than 200,00 procurement actions of $10,000 or more involving more than 100,000 prime and sub-contractors. It manages installations and facilities, equipment and manpower in all 50 states and in more than 100 foreign countries.”

 

“A second difference between management in the Department of Defense and in a private enterprise is in evaluating results. We have no profit and loss statement to work against. The weapons we build for the defense of our country serve the country best if they never have to be used. This is most emphatically true of our nuclear weapons.

 

“The performance of the Department of Defense can be measured only by the extent to which the Department contributes to the overall interest of the nation. All management decisions in the Department must be measured against this all-important criterion.

 

“Since so much of the business of defense is preparation to avert possible future calamity, only after many years will we be able to determine with complete assurance whether we are doing the right things in the right amount and in the right way today.”

 

Packard adds that there are “…two additional factors make Defense management a difficult – indeed, a hazardous – occupation.

 

The first factor is the opposition to things m8litary on the part of an articulate body of public opinion. When a large number of people view an enterprise with suspicion or hostility, the problem of giving effective management to that enterprise is compounded.”

 

Packard makes it clear he is not complaining about close scrutiny by Congress , the press, or the public, all of which he agrees are quite proper and necessary. “If it is responsible, it is wholesome and can be a spur to more efficient operation. When, however, surveillance is exercised in a way that needlessly erodes morale, it does not contribute to good management.”

 

“The second factor that currently adds to the difficulty of managing the Defense Department is the fact that the Department is no longer a growth industry. On the contrary, it is now in the throes of rather rapid shrinkage.”

 

“In the period from last June 30 through the next fiscal year, the military forces will have been reduced by 551,000 men and the civilian work force, by 130,000. Expenditures in FY 69 were $78.7 billion,…and we will spend less than $72 billion in FY 71.”

 

Packard says that while these special problems are not likely to change, they have implemented a number of steps over the past year toward improvement.

 

“Three important steps are directed toward making better decisions on the size and character of military forces which are needed to support the national interest. These are the key decisions which must be made before questions relating to the kinds and numbers of weapons to be developed and procured can be addressed.

 

“First, the National Security Council machinery has been revitalized to evaluate more carefully what the worldwide commitments of the United States should be, and what military force levels are necessary to support those commitments.”

 

Packard says the National Security Council has made a comprehensive study of the nation’s needs, and  “On the basis of that study, Defense needs have been allotted their place in a scheme of national priorities.”

 

“Second, a new arm of the National Security council has been established called the Defense program Review committee to address questions of Defense Policy at the level of specific military programs.”

 

“Third, we have made changes in procedures within the Department of Defense for developing budgets, five-year plans, and programs.”

 

“We have also been addressing the question of how to improve the management of the development and procurement of specific weapons and equipment. With the great furor this last year about cost growth and cost overruns, it should come as no surprise that we in the Defense Department are also concerned.”

 

“As one examines programs which are in trouble – and we find lots of examples – there are some conclusions that can be drawn about the origins of the problems.

 

“It is clear that the problems of developing new and complex weapons and equipment have, in nearly every case, been under-estimated with the result that early estimates of both cost and time required for development proved faulty.

 

“Too much emphasis has been placed on meeting rigid time schedules with the result that production was undertaken too often before development was finished. The short cut of rushing into production before resolving the problems encountered in research and development has been costly.

 

“Altogether, too little attention has been given to controlling cost.

 

“Program managers have been rotated out of their jobs before they became fully effective to be replaced by new managers without prior experience with their programs.”

 

“Authority and responsibility have been diffused among many offices and individuals so that decision making has been retarded.

 

“Changes in funding from year to year have required expensive modifications of programs.

 

“These deficiencies all have contributed to the well-publicized problem of cost growth for military equipment. In addition to these deficiencies, inflation has been an important contributing cause.”

 

Saying that he while he will not try to detail the changes introduced to secure more realistic cost estimates and better monitoring of progress through development and production, he mentions one fundamental change in management concepts that is being introduced:

 

“We believe that more decentralization will improve management efficiency. This involves reducing the number of layers of management, and a more precise definition of the responsibility and authority of various offices in the OSD and in the Services. Action to do this has been started during the past year, and again, we intend to proceed further during the FY 71 budget period.

 

“When Secretary Laird and I assumed office, it seemed that too many decisions had to be made at the top and that too detailed a supervision of operation was carried on in the Office of Secretary of Defense. We are shifting to the military services more decision making authority.”

 

Saying that these measures to decentralize the decision making process will put more emphasis on people, Packard talks about the importance of people.

 

“We are seeking to open up channels through which bright ideas down the line can be brought to the attention of those at the top. We are seeking to broaden the flow of information on Defense policy throughout the Department. And we are doing our utmost to assure that no barriers exist to the upward movement of talented people – particularly barriers based on race or creed or national origin.

 

“We want every person in the Defense Department to be proud of his organization and to feel tat he is an important person doing a vital job.”

 

Another point Packard emphasizes is that “Successful management of the Department of Defense depends to an important degree on the quality of management in the private industry of our nation. This is true for a number of reasons. Those who come to us to fill managerial positions often have had experience and training in private industry. Further, we must look to industry to produce the equipment and the arms with which our armed forces defend our nation.”

 

From Packard’s handwritten notes titled U. of R. College of Business Administration

 

“Interesting experience [Referring to his time with the Department of Defense.]

 

“Basic principles same [DOD and private industry]

 

[Management] Done through people”

 

“Some differences

[DOD] Complex organization

Services  – dual reporting

 

The complexity of the organization makes problems – as does size.

 

“Role of System Analyst

 

Performed a very important function in:

More objective evaluation of programs

Overall deployment of assets into balanced force structure.

 

“Services have developed capability and they should evaluate their own programs.

 

“Too much of a decision making function instead of an aid to decision making.

 

“Those who are responsible for implementing a decision should have part in making it.

 

“If people don’t accept decision they can find effective ways of thwarting it.

 

“There are judgments from experience and other factors that must be taken into account.

 

 

2/26/70, Program for Packard’s speech at University of Rochester, Guest Lecturer Series

 

Box Listing

Box 1, Stanford……………………….1957–1961; Folders 1/1–1/8

            HP Management………………1957–1994; Folders 1/9–1/35

Department of Defense……….1969–1970; Folders 1/36-1/54

Box 2,  Department of Defense………1970–1972; Folders 2/1-2/25

General Speeches……………..1954–1965; Folders 2/26-2/71

Box 3, General Speeches……………..1966–1974; Folders 3/1-3/49

Box 4, General Speeches……………..1975–1982; Folders 4/1-4/38

Box 5, General Speeches …………….1983–1995; Folders 5/1-5/46

 

Box 2, Folder 1 – Department of Defense

 

April 14, 1970, St. Louis Chamber of Commerce and American Ordnance Association, St. Louis, MO

 

4/14/70. Typewritten text of Packard’s speech with notations handwritten by Packard.

 

After repeating a quotation from Lincoln, Packard says “Lincoln’s words remind us that there is more to national security than military power and that serious threats to the security of a nation may arise within a society as well as from outside.

 

“Recognizing these truths President Nixon has been guided, not by a limited, but by a comprehensive concept of national security in designing his legislative program and the budget which he submitted to Congress in January.

 

“That National budget is characterized as a reversal of national priorities. Its most striking characteristic, when it is compared with the budgets of the preceding 20 years, is that it puts defense spending in second place. For the first time since our nation went to war in defense of South Korea, spending by the national government for human resource programs will exceed spending for defense purposes.”

 

“These are severe cuts that are being made in military spending, but these reductions are consistent with the Nixon Doctrine which looks to our friends and allies to carry a larger share of their own defense. The reductions will allow our country to spend more on non-defense activities, $25 billion more in 1971 than in 1969.

 

The decisions which underlie the President’s budget are the result of the most vigorous, searching, and comprehensive consideration of our national needs and resources that has ever been undertaken in Washington.”

 

“The group which makes the study and offers its recommendations to the President is the National Security Council. This agency is now performing the functions originally envisaged for it. The Council addresses the fundamental issues of foreign policy, clarifies our basic purposes, examines all alternatives, and recommends actions. It is the President, of course, who makes decisions.

 

“The major issues of defense requirements in relation to other claims on the budget are treated on systematic and integrated fashion by another group known as the

Defense Program Review committee.

 

“What is important to remember as that the Defense Program Review Committee and through it, the National Security Council, look to the totality of national needs and resources in making recommendations on the allocation of resources to defense purposes. They consider how much defense and what kind are needed to support United States interests around the world. They consider our domestic needs as well, weighing proposed defense expenditure against alternative uses of equal resources for meeting domestic problems. Finally, they consider what we can afford, weighing both international and domestic expenditure on the scale of the economy’s output.”

 

Packard says few would disagree that there are pressing domestic needs requiring greater governmental outlays: housing, education, health care, environment, crime, manpower training….

 

“…inflation remains a matter of serious concern, calling for restraint in total federal expenditure….

 

“Defense spending is being reduced so that more resources can be applied to urgent domestic problems without fueling further the fires of inflation.”

 

“I believe this step-up of non-defense spending can be justified in terms of national security. The first reason for making more of the good things of life available to many who cannot now attain them is that this is the right thing to do. But to reduce injustice, to end discrimination, to eliminate deprivation also dampens stride and conflict, and promotes the unity of purpose that is essential to security.

 

“There is little security for a nation whose people are not unified in some common purpose by a bond of mutual respect and trust. There is little security for  nation if a substantial number of its people believe they are left out of its society. There is little security for a nation if a large number of its people believe that it stands for nothing worth defending.”

 

Packard says the Department of Defense “engages in many activities which can and do make an important contribution to the resolution of domestic problems.

 

“As an example, the Department of Defense for some time has stressed the principle of equal opportunity. Within the military forces it has gone a long way toward attaining this goal. It has labored with considerable success to open up housing accommodations in the neighborhood of military installations to all who wear the uniform. It has required private contractors with whom it hoes business to meet the full requirements of the law in offering equal opportunity in employment.”

 

“There are many more things we do. We provide our young people in uniform extensive education and training which greatly improves the ability of many to achieve success in their future lives as civilians.

 

“We have many bases and facilities – and people – involved in effective summer programs for underprivileged children.

 

“We stand ready to assist states, cities, and local communities in the cases of disaster.

 

“I want to ,make it clear that merely spending more on domestic problems and less on defense is not a panacea for domestic strife. Yet, it can help as part of a coordinated program that goes to the causes of the conflicts which trouble the nation The new direction in which the President’s budget points is one in which the nation should move – always exercising care to avoid dangers of excessive reduction of our defense capability. “

 

With plans underway to reduce defense forces by more than 600,000 Packard acknowledges that some might ask “whether our security from outside threats will be adequately protected….

 

“It is true that we do not yet perceive any substantial abatement of the trouble and strife around the world that led the nation to build up its armed forces to the levels they had reached when President Nixon took office.

 

“The cuts that are being made in our armed forces are made possible, not because threats to peace have lessened, but because we expect other nations to assume more of the responsibility which we have been carrying for their defense.”

 

“This process is now in operation in Vietnam where 115,000 American troops have been replaced by South Vietnamese.”

 

“There is one area in which we cannot afford to lower our forces. We must maintain a credible deterrent against nuclear war. Hat is why we are asking congressional approval to proceed further toward the development and deployment of the SAFEGUARD antiballistic missile system.

 

“We hope that a meaningful agreement on strategic arms limitation will be reached by the representatives of our country and of the Soviet Union. It would be a mistake, however, to base our program on the assumption that an agreement will be reached.

 

“Our security in every sense inextricably linked to a healthy economy. Without the vast productive capacity of our economy, without its dramatic technological progress, without the brain power and skill of management and labor, we would have neither the weapons that provide security from threats from without nor the material well-being that helps to give security from threats within.

 

“There are some who say we must neglect our needs at home in order to discharge our international responsibilities. Others say we must return to isolationism in order to give adequate attention to domestic problems. President Nixon rejects both of these extremes.

 

“Last June, the President expressed his views to the graduates of the Air force Academy. He said”

 

“A nation needs many qualities, but it needs faith and confidence above all. Skeptics do not build societies; the idealists are the builders. Only societies that believe in themselves can rise to their challenges. Let us not, then, pose a false choice between meeting our responsibilities abroad and meeting the needs of our people at home. We shall meet both or we shall meet neither.”

 

4/14/70, Copy of Press release issued by DOD Public Affairs office providing complete text of Packard’s speech in St. Louis.

 

 

 

Box 2, Folder 2 – Department of Defense

 

April 24, 1970, Thomas Jefferson Awards Banquet, Washington D. C.

This was a banquet to honor the men and women in the Armed Forces news organization.

 

4/24/70, Typewritten text of Packard’s speech.

 

Packard says it is “a pleasure to be here with Lowell Thomas, Herb Klein, Dan Henkin, general Westmoreland and the top professionals of America’s new business….”

 

Packard talks about his experience with communications in the Hewlett-Packard  Company. He says they didn’t have much need to communicate with the public at large, but “I quickly came to the conclusion that a company newspaper increased greatly the effectiveness of a business organization. It was an essential means of communication with the employees.” He adds that he “has had an opportunity to look over the winning entries and it is clear that the unit, base, and shipboard papers and publications serve a similar vital functions with our Service people worldwide.”

 

“Americans want to know what is going on and this desire stays with them when they become members of the Armed forces. So it is a responsibility of the Department of Defense – though perhaps one of our less well known responsibilities – to assure that our soldiers, sailors, airmen and marines continue to get the news – continue to be well informed – regardless of where they happen to be stationed.”

 

“To achieve this,” Packard says, “we publish more than 1900 newspapers and maintain more than 400 military radio and television stations throughout the world. The source of most of the national and international news transmitted over these networks is the civilian news media – the AP and UPI, the other syndicates and the national networks.”

 

“When Secretary Laird took office 15 months ago, he set as a major and primary objective establishing the credibility of the Department of Defense. This policy requires that maximum information be made available to the men and women in uniform as well as to the civilian population. The news and information which come through military news channels must be straightforward and factual, and neither tinted nor slanted.”

 

Packard singles out for special commendation “those who edit and staff the newspapers which serve many of our bases and major tactical units. They are the unsung heroes of the military news business. These newspapers – many published on mimeograph machines – are the military version of the small daily and the home town weekly. They provide the serviceman with the “news he can use”.

 

“These news papers keep the serviceman up to date on what is happening in his own back yard, and provide him with timely information important to his personal advancement and welfare. He looks to them for news about his friends and his outfit, and for information pertaining to his assignments, his promotions, his pay and allowances. It is the one newspaper in which he has a better than even chance of seeing his own name in print. This is the newspaper that he sends home to his family and friends.

 

“These military newspapers play a vital role in maintaining the morale of our military forces, and I am indeed pleased that they are being given special recognition here tonight, along with their more glamorous relatives, the military magazines and radio and television stations.”

 

Packard expresses his “appreciation and the gratitude of the entire Defense Department to the publishers of Time, Newsweek, and the Readers’ digest, for their sponsorship of the awards being given here tonight. I also thank the eminent representatives of the fourth Estate who have gives so freely of their valuable time to participate in the Symposium the Defense Department is proud to be associated with them in this endeavor.

 

“The Thomas Jefferson Symposium testifies to the desire and determination of the Department of Defense that servicemen be well informed, for it provides unexcelled training for more than 400 of our information specialists from all the services and from all parts of the world. We depend on these able, enthusiastic, and dedicated men and women to keep our armed forces informed about the events of the times, their heritage as American citizens, and their role in national defense.

 

“Through this Symposium, they have met, learned from, and, I am sure, been inspired by this group of top professional men from American journalism – a group which includes the co-dean of the Pentagon news corps, Mr. Charles Corddry of the Baltimore Sun.

 

“The Department is indeed proud to sponsor this Seminar. I am sure that our military information specialists have been enriched by this experience and that they will go back to their assignments with renewed confidence and inspiration. Some, I know, will return here next year to receive one of the Thomas Jefferson awards.

 

“On behalf of Secretary Laird and myself, I want to congratulate all of you young men and women who took part in this symposium. We recognize the tremendous importance of your work, and we are proud of the manner in which you are doing it.

 

“Thank you very much.”

 

 

Box 2, Folder 3 – Department of Defense

 

April 30, 1970, Crozier Award, American Ordnance Association Washington

 

4/30/70, Copy of the press release issued by the Public Affairs office which provides the complete text of  Packard’s speech. Attached to the press release is a note by Packard’s secretary, Margaret Paull, saying “Col. Furlong did not bring back the original of this speech after the dinner presentation.”

 

Packard says he accepts the Crozier on behalf of  the people he represents – “the military and civilian employees of the Department of Defense. These are the men and women who keep our armaments ready and thereby contribute to the maintenance of peace.”

 

Packard gives some background on Major General Crozier who was Chief of Ordnance of the United States Army for17 years – from 1901 to 1918.

 

“Because of the responsibility he bore for arming American forces during the initial period of our nation’s participation in the First World War, General Crozier was aware of the heavy costs of unpreparedness.”

 

Packard tells how when WW I began our armed forces were about the size of Sweden’s. During the war we had to rely on our allies for tanks, artillery, and airplanes. “Of  23,000  tanks on order in the United States, only 76 had been completed at the time of the Armistice.”

 

In WW II we were unprepared again. “As late as 1938, we were spending no more, to acquire armored vehicles than for horses, wagons, saddles, and harnesses.”

 

“World War II was followed by another period of neglect of our armed forces. When war broke out in Korea, again the nation was unready.”

 

“I is no exaggeration to say that our nation has been poorly prepared for three of the four major conflicts in which it has become involved in this century. The costs of unpreparedness in lives and in treasure have been tragically high. In the past, time has been granted to us to recover from initial setbacks, to arm, and finally to win the day.

 

“In the nuclear world of today, we cannot count on time to be our ally. We must be prepared at all times or we will not survive.”

 

“There are great pressures toward  a reduction of our military power in the decade of the 1970’s. The pressures come from the domestic front, both economic and political.

 

“We in the Department recognize the urgency of unmet domestic needs and the seriousness of the problem of inflation. To permit increased federal spending to meet these needs without further fueling the fires of inflation, the President has made significant cuts in the level of defense expenditures.

 

“The course we are following is a realistic course, not because of any significant lessening of the antagonism and tensions around the world, but because of the increasing ability of our friends and allies to carry a larger share of the burden of their own security. It will be a safe course if reductions are limited and carefully controlled to maintain a foundation of strength adequate and responsive to potential contingencies of the future. This foundation must include an adequate nuclear deterrent.”

 

“There are strong pressures, however, for reductions that go far beyond those which President Nixon has approved.

 

“The greatest concern that I have at the present time is that defense cutbacks will go beyond the point of prudent risk. The greatest responsibility that Secretary Laird and I have is to keep the nation on the course of orderly reduction in defense and to maintain a capability that will protect the American people in the years ahead.

 

“Our past experience should teach us that an inadequate level of defense spending is an illusory form of economy. In a month or two, a war eats up the savings realized over the course of many years by inadequate funding of defense. In a future war, unpreparedness would be more than costly It would be suicidal.”

 

“We must remember that in the past five years, the United States has stabilized deployment of strategic offensive weapons, while the Soviet Union has accelerated both their development and their deployment. Our nation has made no basic change in the force levels set in 1965-67. On the other hand, the Soviet Union continues to add to its total of strategic nuclear weapons. And, as we have recently seen, the Chinese are still on their technological track to a ballistic missile.

 

“As Secretary Laird and I have pointed out, it is not the strategic balance that exists today that disturbs us but the momentum established by the Soviet Union in its vigorous development deployment of strategic offensive weapons. The vigor of the Soviet effort is indicated by the fact that Russia now has more land-based ICBM’s than the United States. Nor can we forget the progress of Communist China toward an ICBM capability.

 

“For these reasons, the President has recommended to congress a modest addition to the SAFEGUARD Anti-Ballistic Missile program which was approved last year.”

 

“To forego the SAFEGUARD deployment is a gamble this country cannot afford to take.

 

“The course toward which President Nixon is steering the nation is in the direction of peace. His policy is one of responsible internationalism It does not contemplate a United States which will patrol the world as a global policeman nor a United States which abdicates responsibility and cowers in isolationism.

 
“Successful implementation of the President’s foreign policy requires a strong defense posture for our country as far into the future as any of us can see.

 

“The consequences of past failure to maintain such a posture are the casualties of three wars which have occurred in the lifetime of most of us here this evening.

 

“Let us not in the future be forced again to mourn the loss of young Americans who died because their country let its sword rusts. Let us not forget that, on our preparedness and our national resolve, depends the survival of our country.”

 

 

Box 2, Folder 4 – Department of Defense

 

May 12, 1970, National Association of Manufacturers, NAM Directors Luncheon,

Washington D. C.

5/12/70, Typewritten text of speech

 

Packard tells the audience that his remarks are “off-the-record and off-the-cuff.”

 

Packard describes the “major re-examination of the nations policies and priorities” which was recently undertaken. “This re-examination has resulted in what has come to be  known as the Nixon Doctrine based on three principles: partnership, strength, and negotiation.”

 

“This has resulted in a major re-direction of federal resources from defense into non-defense programs.” Packard gives some specific examples:

 

1. Redirection of resources with a balanced or surplus budget to maintain fight against inflation.

 

2. Direct larger share of resources into non-defense programs

.

  1. This has placed a stringent requirement on DOD to maintain strength of military forces at lower levels of expenditure –

 

FY 1969 – 78.7 B

FY 1970 – 77 B

FY 1971 – 71.8 B “

 

“Tremendous challenge to DOD and defense industry to improve new weapons development efficiency. We can do much to build a smaller but more effective military establishment.

 

“One of the important objectives of this exercise is to apply more of the nation’s resources to domestic programs. The reallocation of financial resources is significant. The resulting reallocation of people will – already is – generating some serious problems.

 

  1. We are doing what we can in helping local communities.
  2. The federal mechanism is not effective market place.
  3. The skills of the aerospace industry cannot be quickly reorientated. The impact on professionals – scientists – engineers – young graduates.
  4. Impact on lower job levels – the underprivileged”

 

“We have a special responsibility to help those fine young men and women who have been serving their country in the Armed Services when they are released to the civilian job market.”

 

“I make a special plea to the NAM to join with business and industry throughout America to five special priority in jobs to those men and women who have served their country…particularly over those who have burned their draft cards and made disruptive attacks on the great educational institutions of America.

 

“We all protest the right of protest – Our country must continue to face change as it has from its beginning some 200 years ago. It is that small minority that advocates the destruction of American system by force that must be  – and I am confident it will be – brought under control.

 

“And let me emphasize – I believe the young ;people have something to say….It is only a small minority of faculty and students who are bent on destruction – and let me repeat – that small militant minority must be brought under control.

 

Packard moves on to Cambodia

 

He explains that the North Vietnamese have refused to negotiate in Paris—and that the U. S. has instituted a policy of  “Vietnamization”  – gradually replacing American forces with South Vietnamese, which has been successful.

 

“The North Vietnamese have recognized the success of Vietnamization by changing their strategy. Their strategy is to operate harassing attacks against cities, villages hamlets and military installations. Their ability to do this is to a large extent determined by the fact that they have established large bases inside Cambodia along the border. This territory is occupied by the North Vietnamese. This occupation has been accepted by Sihanouk for the past four or five years. This has given the opportunity to the North Vietnamese to build up substantial installations and stacks of supplies in these sanctuary areas.”

 

when Lon Nol took over in Cambodia he requested the North Vietnamese to leave, and made it abundantly clear that he considered they were there in violation of the neutrality of Cambodia.

 

“This made it possible for us to undertake action against these bases on the first of this month. This was by far the most effective military action that could be undertaken to hasten the progress of Vietnamization.”

 

Packard concludes with a progress report on this operation, which he says has exceeded their expectations.

 

“Some 1200 tons of munitions have been discovered already and the amount is increasing every day.

 

“This includes thousands of weapons, millions of rounds of ammunition – 6 million rounds of 51 caliber anti-caliber ammo – used against helicopters – over 1800 tins of rice.”

 

“In addition, a large amount of medical supplies have been captured. One estimate is that 24,000 pounds of medical supplies will support a 320-bed division-level hospital for from 90 to 100 days ….”

 

Packard says that “The U. S. ground troop involvement will be complete by or before the end of June.

 

“We do not intend to enlarge our involvement in Southeast Asia – in fact, this action will bring closer the time when our boys will all be out of fighting I hope you will give your full support to the President in his decision – I hope when you go back to your local communities you will encourage your friends and associates to join with us all in supporting this important decision.”

 

5/12/70, Typewritten sheet listing the consequences of the FY 71 budget

5/12/70, Handwritten notes by Packard for speech

5/12/70, Typewritten transcription of tape made of Packard speech – incomplete.

3/31/70, Copy of letter to Packard from Edward C. Uhl Fairchild Hiller expressing appreciation that Packard willing to speak to NAM and giving details for luncheon.

 

 

 

Box 2, Folder 5 – Department of Defense

 

May 15, 1970, Armed Forces Day, Chamber of Commerce, Ft. Worth TX

 

5/15/70, Typewritten text of speech, with handwritten notations by Packard

 

Packard says Armed Forces Day is a time to reflect on the mission of the armed forces, grateful recognition of the service and sacrifice of the three and a quarter million men and women in uniform, and a time to show special regard for our service men who are striving to assure the peace in South east Asia.

 

He asks for special help in assisting the two million men and women who will be leaving military service over the next two years, help the 75% or so who will be looking for civilian jobs.

 

But Packard’s main topic is Cambodia. He goes over the reasons we are fighting there, and what the results have been.

 

“To gain perspective on this subject, one must understand President Nixon’s Vietnam policy, for the action in Cambodia is directed toward achievement of the objective of ending the war in Vietnam on terms which will assure freedom of choice for the people in south Vietnam. Those Americans who dissent in the name of freedom of choice should be the first to support this freedom for the South Vietnamese.

 

“One year ago yesterday, President Nixon offered in a speech to the nation and the world to negotiate a fair and generous peace to bring the war to an immediate end. The only point which the President insisted a peace settlement must contain is preservation of the right of the people of South Vietnam to determine their own destiny. Everything else, the President asserted, is negotiable.”

 

“Although we have not given up attempts to reach peace at the conference table, the failure to make progress by means of diplomacy forced the President to find an alternative route toward his objective – a route which Hanoi could not blockade by the tactic of non-cooperation.

 

“This route is called Vietnamization.”  Packard explains that this program is gradually replacing American forces with those from South Vietnam. “By the middle of next year, we will have turned over all combat operations to the South Vietnamese forces.”

 

“In short we have been methodically reducing our forces in Vietnam and we plan to continue that reduction. We plan to do this in an orderly way as South Vietnam attains even greater capability to defend herself.

 

“What is now being done in Cambodia is not a reversal of our policy to reduce our involvement in southeast Asia There is no change in our objective. On the contrary, it is a carefully considered plan to hasten the achievement of our objective.”

 

Packard explains how the North Vietnamese occupied border land in Cambodia for bases and supply dumps – with the acceptance of Cambodia’s leader Prince Sihanouk. For political reasons the U.S. did not attack these sanctuaries for over five years. But as the North Vietnamese were squeezed out of South Vietnam their v]bases in Cambodia took on more importance. When Lon Nol replaced Sihanouk he ordered the North Vietnamese out of Cambodia. The U. S. felt free to attack the North Vietnamese in Cambodia ”As long as these bases remain, the war could continue indefinitely and inconclusively. As long as the bases remained, the risks were substantial as more and more American troops were pulled out of South Vietnam.”

 

“It is solely because of the importance of the border areas to the success of our Vietnamization plan that we are helping clean them out.

 

“The action we are taking has been limited by the President both in terms of territory and of time The President has set a June 30 deadline on these operations and limited penetration by American troops to areas within 30 kilometers of the border.

 

“Some might question the wisdom of letting the enemy know where we will fight and when we will stop. The President has done so in this instance because he wants the American people to understand that this is a temporary and limited operation and that he – more than anyone else in this country – wants the war brought to an end.

 

Packard describes “the massive haul” of military supplies captured in Cambodia – supplies , tanks, ammo food that cannot be used against South Vietnam.

 

“We hope that we shall be able to celebrate an Armed Forces Day soon in a peaceful world in which no American is involved in combat anywhere. The coming of that day is being hastened by what our military forces are doing this day with patient courage.

 

“Let us who are not exposed to the danger and privation they must bear show the same patience and steadfastness.”

 

5/15/70 – News release from DOD Public affairs office including complete text of Packard’s speech.

 

 

Box 2. Folder 6 – Department of Defense

 

May 28, 1970, Formulation of Defense Policy, Naval War College, Newport , RI

5/28/70, Typewritten copy of Packard’s speech, including copies of projection slides which he refers to in his address. All this material is marked “SECRET”.

 

“I. INTRODUCTION”

Packard says that he wants to talk about “the formulation of defense policy at the highest levels in our government. This decision-,making process is not confined to the Department of Defense; the issues involved directly concern many more. The role of the Defense Department and the other Executive Agencies concerned is advisory. The decisions are for the President and the Congress.

 

“ Slide 1,         FORMULATION OF DEFENSE POLICY

 

  1. National Security Objectives
  2. Strategies
  3. Resources”

 

 

Speaking about the points on the first slide, Packard says that formulating defense policy is a three-fold process:

 

“First national security objectives are determined; next, strategies are devised to achieve these objectives; finally, resources are allocated to accomplish the objectives. Once defense policy is set, it is our job in DOD to provide the most efficient implementation of the objectives with the resources available.”

 

Packard tells his audience that there are two basic reasons why it is important that they understand  the process for formulating defense policy: “First we in DOD cannot expect to perform our role effectively unless we understand the rationale of decisions made largely outside of the Department, determining the objectives established and budgets allotted; second, and even more important, although basic defense policy decisions are made by the President, they are made by him with the advice of his national security advisors. Thus we have a crucial role in this determination of defense policy. To make decisions on defense issues, the President must be informed, and information relating to defense comes to the President from the Secretary of Defense and the Joint Chiefs of Staff., his key advisors on defense policy. The preparation of this information is the product of many minds in DOD, and for those who are participating in this preparation now or in the future, it is essential that the issues involved in the formulation of national security policy are understood.”

 

“II. “THE ISSUES INVOLVED IN DETEREMINING DEFENSE POLICY”

 

“Slide 2,          ISSUES FOR DEFENSE POLICY

 

Strategic

Immediate Threat to U.S.

 

General Purpose

Assist Allies”

 

“Defense policy involves two principal elements for consideration,” Packard says, “strategic forces and general purpose forces.” He says that the only immediate military threat to our national survival is the strategic nuclear forces of the Soviet Union. “It is therefore obvious that we must provide an adequate defense against this threat. The strategic issues involves are essentially the proper response to the present threat, the anticipation of future threat, and the appropriate levels of confidence in our forces. These are relatively technical issues which are primarily our concern within DOD.”

 

Packard explains that the utilization of general purpose forces is a more complex problem. “These forces are designed primarily to defend our interests in other parts of the world – including assistance to our allies – not to defend our own territory. To determine what level of general purpose forces we should maintain, we must carefully evaluate our national interests in various areas of the world, assess the m8litary threat to these interest, estimate the capabilities of our allies to defend themselves, and finally, determine what U.S. military forces are necessary to protect our interest.

 

“You might think that after making this analysis, we then simply provide enough defense funds for the forces which are determined to be necessary. Unfortunately, the problem is not so simple; one crucial consideration has yet to be mentioned – the limited national resources available. This unavo8dable reality is often difficult to understand in a country with a GNP of close to one trillion dollars and the theoretical capability of affording a much larger defense budget than it now has or has had since [World]War II. The problem is that there competing claims for these resources.

 

“Slide 3,          RESOURCE ALLOCATION PROBLEM

 

Sector                                      Competitors

 

Total Economy                       Public vs. Government

 

Government                            Federal vs. State and Local

 

Federal Government               Defense vs. Domestic

 

Defense                                   Strategic vs. Gen Purpose vs. R&D, etc.

 

Strategic                                  ICBM vs. SLBM vs. Bombers, etc.”

 

 

Packard briefly mentions the fist two  listed, Total Economy [government vs. funds from the private sector via taxes] and, within the Government, the competition between federal, state and local governments for public revenues.

“Finally, and most significantly, there is a great competition within the federal government, including within DOD, for these remaining, limited resources. To be sure, a greater allocation of resources to defense means greater national security. However, the size of the allocation is necessarily restricted by competing demands which are also essential for this country’s well-being. The objective is to establish a reasonable balance between the security desirable and the funds available.

 

“This ever present problem has been especially acute in recent years. In order to cope with it, one of the President’s first actions upon assuming office was to order a sweeping review of national defense policy in National Security Study Memorandum 3, or NSSM-3”  Packard says he wants to describe the major steps in that review, “both to give you a background for the defense policy decisions which flowed from it, and to illustrate my broader theme of how defense policy is formulated. The review considered both strategic and general purpose forces, but for the reasons I have already mentioned, I will discuss only the general purpose forces section of the review.

 

III. THE NSSM-3 REVIEW OF GENEREAL PURPOSE FORCES

  1. Organization and Plan of the Study

 

Slide 4             NSSM-3 STUDY PARTICIPANTS

 

Defense Department

State Department

CIA

Treasury Department

BOB

CEA

NSC Staff

 

Packard notes that “National Defense Policy at the most basic levels is not the sole concern of the Department of Defense, and in accord with this reality the NSSM-3 Review was a joint effort of all government agencies directly concerned with national security.” And he refers to the list on the slide.

 

“Among the participating agencies, the Defense Department had a principal responsibility for most of the issues involved, and I served as Chairman of the interagency group.

 

 

 

 

 

 

 

Slide 5,                        METHODOLOGY

 

  • Alternative Strategies
  • Alternate Forces and Costs
  • Five-Year Economic Projections
  • Domestic Programs and Costs

 

“The group’s methodology was as follows:

1.We postulated a broad range of alternative national strategies.

 

2. For each alternative, we designed a set of military forces and estimated their annual cost.

 

3. For a time horizon of the next five years, we projected GNP federal revenues, uncontrollable expenditures, and the residual for controllable programs, including defense.

 

4. We considered sets of domestic programs, with estimated annual costs, as illustrative competitors for the controllable federal resources.

 

“Last summer, the study was forwarded to the National Security council for review and then to the President for decision. No recommendations were made by the study group, although the President’s advisors, including the Secretary of Defense and the Chairman of the Joint Chiefs of Staff, expressed individual recommendations. The result was a Presidential decision last fall which defined a general purpose forces strategy and set annual defense budgets for the next five years for planning purposes.

 

“B The Alternative Defense Policies

 

Packard says the first step in the NSSM-3 Review was the design of a wide range of so-called national “strategies”. However, he admits the choice of the word strategy may have been “unfortunate,” and had created some communications problems. So, he explains what they meant by the term strategy. “I know that you normally regard the development of strategy as the responsibility of the Joint Chiefs of Staff….What we meant by strategy was a broad set of national defense objectives which form the foundation of defense policy.

 

Slide 6,                        STRATEGY

 

President and Secretary of Defense

What is to be done

 

Joint Chiefs of Staff

How to do it

 

 

The establishment of such policy in the Executive Branch is the responsibility of the President and the Secretary of Defense. Of course such policy decisions are subject to the review of congress. The responsibility of the Joint Chiefs is primarily to recommend yow the forces should be employed to achieve the national objectives.”

 

Packard says the “NSSM-3 review initially considered nine alternative strategies, ranging from an isolationist fortress America concept to a strategy which would have provided forward deployed forces to conduct sustained conventional defenses simultaneously against the Warsaw Pact in Europe and against the Chinese in Southeast Asia and Korea.”

 

However, Packard explains, they soon focused on five strategies, the other four being “either infeasible or undesirable.”

 

Slide 7,                        ALTERNATIVE STRATEGIES

 

  1. NATO  Initial Defense and Assistance for Allies in Asia
  2. NATO Initial Defense or Joint Defense in Asia (Korea or Southeast Asia)
  3. NATO Initial Defense and Joint Defense in Asia (Korea or Southeast Asia)
  4. Sustained NATO Defense and Holding Action in Asia or Initial Defense of NATO and Joint Defense of Asia (Korea and Southeast Asia)
  5. Total NATO Defense and Joint Defense of Asia (Korea and Southeast Asia)

 

 

 

Slide 8,                        VARIABLES IN STRATEGY

 

Geographic Areas

How many at the same time

Warning

Capability of Allies

 

 

Packard says “These five alternative strategies embodied four key variables:”

 

“1.The geographic areas for which we would consider the use of military forces.”

 

“2. The number of objectives we wanted to be able to meet at the same time.”

 

“3. Strategic warning.”

 

“4. Reliance we would place on capabilities of allies.”

 

“Slide 9,                      SEPARATE EVALUATIONS

 

State: – Foreign Reactions

CIA — Enemy Capabilities and Reactions

JCS – Military Risk”

 

“Each strategy was evaluated in terms of its major military risks and foreign policy implications. To this end, the State Department led a study which examined the likely impact of each strategy on our allies and on our foreign policy, and the CIA directed a group examination which estimated the capabilities of potential enemies and how they might react to the various strategies.”

 

“Slide 10,                    STRATEGY ONE

 

NATO Initial Defense and Assistance for Asian Allies

 

 

Major Risks – CIA and JCS

 

NATO: Cannot meet surprise attack following concealed mobilization

 

Asia: No conventional capability vs. CHICOM

 

JCS Comment: Inadequacy evident to all

 

Foreign Reactions – State Department

 

NATO: None, probability of Warsaw Pact aggression unchanged

 

Asia: Acceptable, pace reductions;

CHICOM might increase support for wars of national liberation”

 

“Strategy 1 would allow for forces to conduct an initial defense of NATO Europe while at the same time assisting Asia Allies against a non-Chinese attack. The major risks as assessed by the CIA and the JCS would be as follows: For NATO, allied forces would not be able to meet a surprise attack by the Warsaw Pact following concealed mobilization: for Asia, there would be no conventional capability against Communist China. The JCS contended that the overall inadequacy of the projected force structure to satisfy our defense commitments in Asia, even without a simultaneous European requirement, would be evident to all.

The State Department anticipated the foreign reactions to be essentially unchanged. For NATO, there would be no reaction from our allies since this alternative would not alter current NATO strategy in any significant way. The probability of Warsaw Pact aggression was also predicted to remain unchanged. In Asia, the strategy should be acceptable to our allies, especially if the reductions were made over a period of years. The State Department noted that Communist China might increase support for wars of national liberation.

 

“Slide 11,                    STRATEGY TWO

 

NATO Initial Defense OR Joint Defense in Asia

 

Major Risks – CIA and JCS

NATO: Cannot meet surprise attack following concealed mobilization

Delay in NATO if engaged in Asia

Coordinated Warsaw Pact CHICOM            unlikely – likely

 

Foreign Reactions  – State Department

No adverse reaction if they perceive U.S. maintain commitments”

“Strategy two dictated that the U.S. would be equipped to provide an initial defense of NATO Europe or a joint defense of Asia. (Asia being defined for these purposes as Korea or Southeast Asia). There would be a major capability in one theater and a reduced capability in the other, non-war, theater. NATO forces would again be incapable of meeting a surprise attack following concealed mobilization. Moreover, if U.S. forces were involved in Asia, there would be a corresponding delay in meeting required force deployments to Europe for initial defense. Concerning the possibility of a coordinated attack by the Warsaw Pact and Communist China, opinion was divided. As for foreign reaction, no adverse response would be expected as long as our allies considered U.S. policy as adhering to present commitments in all regions.”

 

 

 

 

 

 

 

 

 

 

“Slide 12,                                STRATEGY THREE

 

NATO Initial Defense AND Joint Defense in Asia

 

Major Risks – CIA and JCS

 

NATO: Cannot meet surprise attack following

concealed mobilization

Asia: Only one contingency

 

Foreign Reactions – State Department

 

None anticipated”

 

 

“Strategy 3 would provide sufficient forces for the U.S. to conduct simultaneously an initial defense of NATO Europe, a defense of Korea or Southeast Asia against a Chinese invasion, and forces to assist an ally threatened by a proxy war. The primary to NATO would again be that the forces could not meet a surprise attack following concealed mobilization. The main risk to Asia would be the fact that since this strategy would provide forces for only one mainland contingency against Communist China, U.S. Forces would not defend Korea and Southeast Asia simultaneously. No key foreign reactions would be anticipated.”

 

“Slide 13,                                STRATEGY FOUR

 

Sustained NATO Defense and Holding in Asia

OR

 

Initial NATO Defense and Joint Defense in Asia

 

Major Risks – CIA and JCS

NATO: Cannot meet surprise attack following concealed mobilization

Disengagement in Asia could delay in NATO

 

Foreign Reactions – State Department

NATO allies find  unacceptable sustained nuclear or non-nuclear conflict in Europe

 

Emphasis on conventional capability viewed as weakening deterrent

 

JCS non concur with State Department evaluation on sustained defense”

“Turning to strategy 4, this alternative wold provide forces for a sustained U S. defense of NATO and a simultaneous holding action against a Chinese invasion of both Korea and Southeast Asia. The same risk to NAATO noted in the first three alternatives would be present: an incapability of meeting a Warsaw Pact surprise attack following a period of concealed mobilization. Moreover, disengagement from Asia and redeployment and reorientation to Europe would perhaps create such a delay that losses would be suffered by NATO countries As for foreign reaction, the State Department hypothesized that our NATO allies would view as unacceptable any strategy which contemplated sustained combat, either nuclear or non-nuclear, in Europe The State Department also concluded that with any U.S. increase in its conventional forces, there would be a weakening of the link between our conventional and nuclear force deterrents. The JCS disagreed with this assessment of NATO reaction, contending that such a strategy would be acceptable to these countries.

 

Slide 14,                                  STRATEGY FIVE

 

Total NATO Defense AND Joint Defense of Korea and SEA

 

 

Major Risks – CIA and JCS

 

No Major Military Risks

 

Foreign Reactions – State Department

 

NATO:  Allies oppose conventional defense as eroding nuclear deterrent

JCS non-concur with erosion of deterrent thought

If we deploy additional forces to Europe Soviets will increase their deployments

 

Finally, Strategy 5 would establish forces for a total NATO defense, designed to meet a surprise attack of the Warsaw Pact following a period of concealed mobilization, and a simultaneous joint defense of Asia. This strategy would not present any major military risks. In terms of foreign reaction, the State Department anticipated the same grounds for objection by NATO Allies as in Strategy 4. Again, the JCS disagreed with this assessment. Both agreed that if we were to deploy additional forces to Europe, the Soviets would increase their general purpose forces.

 

  1. Developing Military Forces to Implement the Strategies.

 

For each strategy, the group developed the military force structure which would be needed. This phase of the NSSM-3 Review was performed primarily within DOD. The careful study which this issue received within the Department revealed a great difference of opinion on the level of forces which would e adequate for each strategy.

 

As a result, the study included two sets of forces for each strategy, one proposed by the Secretary of Defense and another by the Joint Chiefs of Staff. This difference is attributed to contrasting understandings of what is meant by forces “adequate” for a strategy. The JCS believed that substantially higher levels of forces were needed for each strategy. The forces proposed by the JCS would ensure a high degree of confidence in meeting the strategies. The force levels proposed by the Secretary of Defense were based on a different judgment regarding the acceptable amount of risk.

 

“Slide 15                     FORCE SUMMARY

 

FY65      FY71      1          2          3          4          5

 

Active Divisions      192            17B

SecDef                                        133      141      17B      20B      242

JCS                                             182      202      212      212      212

 

Tactical Air Wings   39              39                                                                                         SecDef                         35        40        48B            83B               982                                    JCS                              41     47        56        60        69

 

Attack Carriers        16              15                                                                             SecDef                         11        11        11        11        11

JCS                                             12        14        16        17        19

 

SSNs                        21              52

SecDef                                        78        78        78        78        78

JCS                                             78        78        78        78        78”

 

A force summary chart illustrates the representative general purpose force levels presented by the Secretary of Defense and the JCS for these five strategies. I want to emphasize that these were representative forces. There was no intent that these specific levels or balances would be those finally recommended by either the Secretary of Defense of the JCS. The chart also includes force levels for fiscal years 65 and 71 with which the various levels for each strategy can be compared.

 

 

 

 

“Slide 16                                 STRATEGIC FORCES

 

  • Over 1,000 mm and Titan ICBMs

 

  • Over 350 B-52s

 

  • 656 Polaris/Poseidon on 41 SUBs

 

  • SAFEGUARD

 

  • Limited Air Defense

 

Cost:                       Direct  –     $8 B

 

Overhead  –    $10 B

 

Total:                $18 B”

 

 

“Turning briefly to strategic force levels, the next chart is a summary of strategic forces and their costs, assumed in preparing the total defense budget for this study. These levels generally represent the result of our earlier examination of strategic issues.”

 

“Slide 17                     Costs of Alternate Forces

 

$ Billions Average 1971-75

 

Outlays

 

1             2             3             4             5

 

Sec Def          72           76           81           93          102

 

 

JCS                84           90           98          103        112”

 

 

“After developing the force structures, we then provided estimates of the annual costs of each for the different strategies.”

 

 

 

 

 

“Slide 18,                    Resources

 

1970          1971          1972          1973          1974          1975

 

Receipts                      199            205            221            237            255            273

Less Tax Reform       —             -2              -7              -10             -11             -12

Net                              199            203            214            227            244            261

 

Uncontrollable

Outlays                       116            126            134            140            145            152

 

Net for Controllable

Programs                  83              77              80              87              99            109”

 

“The third major phase of the study was an examination of the resources which were potentially available for defense. This section of the NSSM-3 Review was conducted by the Bureau of the Budget, the Council of Economic Advisors, and the Treasury Department. They first projected GNP for the next five years. Assuming the existing tax structure, which at that time did not include the recent tax reform, they then estimated federal revenues for the same period. Next, they estimated the relatively fixed, or uncontrollable, demands on the federal budget. These items are those which cannot be varied except by major legislative changes, and include such things as interest on the national debt, social security and various health and welfare programs, veteran’s benefits, and farm support. Subtracting the uncontrollables from the total revenues yielded a sum which was potentially available for discretionary, or controllable programs, including defense”.

 

E. Domestic Programs

 

“Slide 19                     DOMESTIC PROGRAMS

 

  1. Welfare Reform, Revenue Sharing, Mass Transit, Education, Crime Control, Highway Safety, Pollution Control, Child Care

 

  1. Airway Modernization, Expanded Aid to High Education, Mental Health, International Development

 

  1. Urban Renewal, Expanded Medicade, Recreation Programs, Post Office Modernization

 

  1. Accelerated Space Program, Expanded food Stamp Program, SST, Merchant Marine Modernization”

 

“The economic group also prepared another part of the review, which was perhaps the most original aspect of the study. Possible new domestic programs of the Federal Government were grouped into for tiers. The first tier consisted of programs to which the Administration had already made some commitment. The other tiers represented increasingly ambitious domestic programs. The placing of the various programs into each tier was not precise, and estimates of proper priorities could easily differ. The essential aim was to estimate explicitly the costs of alternative sets of domestic programs so they could be compared with the alternate defense strategies.”

 

 

“Slide 20                     The President’s Problem for FY 1973

 

 

Net Available for Controllable Programs – $87 B

 

Alternate Demands

 

Defense Strategies       1                2                3                4                5

71              75              82              96              108

 

Domestic Tiers           1                2                3                4                                                    15        20        28        40”

 

“The next chart indicates the relation of the domestic tiers to the defense alternatives and the funding options available for decision. For example, it reveals that Strategies 4 and 5 would not permit funding of even the first tier of domestic programs without raising taxes. None of the defense programs would allow the third or fourth tier to be funded. Within Strategies 1, 2, and 3, the greater the defense program the fewer the available funds for domestic programs. Naturally, the choices are hard ones. They are made even more difficult by the fact that since the NSSM-3 study, future federal revenues will be significantly reduced as a result of the Tax Reform Act of 1970.If NSSM-3 were updated, the table would show that no additional domestic program is compatible with any defense alternative other than Strategy 1 To be sure, the constraints set by the study and indicated on the chart were not absolute. The level of funds available could be altered through the exercise of any of four possible options: a tax increase, deficit financing, a modification of Presidential initiatives, and a reduction in programs now established by legislation.”

 

F. The President’s Problem

 

“With this content, NSSM-3 brought before the President in concrete terms a range of defense strategies and domestic programs, and an estimate of national resources. The President’s problem was to find the most reasonable balance. Again, the funding levels were not concrete and could be changed through the adoption of one of the available options. However, the likelihood of these options being exercised must be considered. In the face of the recent tax cut, it is difficult to advise the President that he should raise taxes; in the midst of inflation, deficit financing is hardly attractive; it is unlikely that much can be done to curtail spending on existing uncontrollable programs.

 

“Thus, one of the inescapable realities made apparent by the NSSM-3 Review is that in deciding defense policy the President has only a very narrow range of options with which to work. No one option is entirely satisfactory, The resources are limited; the legitimate claimants are many. It is not just the President who must be aware of this reality. All government agencies and the people formulating Policy

Within them must recognize the problem and structure their advice with the facts and limitations squarely in mind.

 

 

IV THE DEFENSE PROGRAM REVIEW COMMITTEE

 

“The issues examined in NSSM-3 did not disappear after the study was submitted and the President had made his decision. Issues of national security and budgeting have been and always will be subjects of government concern. Therefore, late last year, the President established a new organization, the Defense Program Review Committee, to undertake continuing studies of defense policy and resource allocation. As in NSSM-3, the Committee’s analysis of these considerations is not made in the vacuum of national security objectives. The p9litical, diplomatic, and economic implications of resource allocation are also examined, and it is only after these factors are weighed that priorities are established. To this end, one of the Committee’s responsibilities is to keep NSSM-3 up to date. Such as by noting revised economic projections and changes in the international situation The Committee is also refining the ISSM-3 analysis, for in many ways NSSM-3 was a pioneer effort. The PackardRC is clarifying our understanding of the strategy the President has chosen and the threats we face, and we in DOD are looking particularly at the general purpose force structures which are needed to implement the strategy.

 

“The members of the Defense Program Review Committee are essentially the same group which developed NSSM-3, with the President’s Assistant for Domestic Programs, John D. Ehrlichman, periodically joining them Mr. Ehrlichman is in the process of setting up a Domestic Affairs Council which will subject domestic programs to the same type of evaluation which defense issues receive from the National Security Council and the Defense Program Review Committee.

 

“The Objective of each of these groups is to provide the President with the best possible information and advice on the complex issues he must decide. The issues are essentially defined in terms of resource allocation. The underlying consideration, as I noted before, is that the resources available are limited. Because of this, the federal government simply cannot provide finds for all the ends it would like to achieve. Allocations must be determined and the basis for them involves much more than issues of accounting. Very difficult choices in terms of benefits, values, and priorities must be made, and for the President to make the best decision , he must have the best information and advice. This was the intent of NSSM-3 and is the continuing intent of the PackardRC.

 

“V. CONCLUSION

  1. Determining Defense Policy

 

“I have tried to explain the issues which the President must consider in determining defense policy and budgets. Too often I have heard grumblings in the Pentagon that “The fiscal tail is wagging the strategic dog.” This phrase recognizes the relation of resources to policy, but it grossly oversimplifies the problem. We must have sufficient forces for national security, but in deciding how much is sufficient, we must resolve complex issues involving the evaluation of national interests and risks and the creation of priorities. A determination of defense policy made in absence of a consideration of these issues would be meaningless.

 

“B. Pressures on Defense Budgets

 

“Once we in DOD have performed our roles as advisors to the President, and after decisions on defense policy have been made, our job shifts to implementing the decisions as efficiently as possible. In this capacity, it is our explicit responsibility to provide the President with as much military capability as possible within the resources allocated to defense. This allocation is based on assumptions regarding levels of risk and commitment. As implementors of the President’s policy we must make every effort to maximize the limited resources which we have available. The force levels upon which risk levels and commitment were based and resources determined must be sought. If the force levels cannot be achieved with the funds available, the result may not be an allocation of more funds to defense. Instead, the reluctant response may initially be to accept lower levels of commitments. The responsibility of DOD is here obvious.

 

“In designing force structures, we have to consider the President’s resource problems. If we believed those problems could be easily solved, or that they are only temporary, we would be making serious mistakes in designing forces. The facts are that the defense budget has declined for the last three years as a percentage of GNP; it now has the lowest share (35%) of the federal budget since 1950.

 

“Despite the decline, you can understand the pressures on the defense budget by looking at estimates for FY 71. Revenues will be about $200 billion, uncontrollables about $90 billion. The FY 71 defense budget, therefore, represents about two-thirds of all funds subject to the President’s discretion.

 

“We must recognize that the budget squeeze is not just a temporary phenomenon but rather a permanent fact of life. We must consider realistic fiscal limits to design efficient, balanced force structures for the future.”

 

3/19/70, Copy of letter to Packard from Daniel Henkin, Public Affairs Department saying the Vice Admiral Richard G. Colbert invites Packard to be the principal speaker  at the Military Strategy Study.

 

 

Box 2, Folder 7 – Department of Defense

 

June 3, 1970, Remarks of David Packard, Deputy Secretary of Defense at Graduation Ceremony of the 1970 Marine Corps Command and Staff College, Quantico, VA

 

6/3/70, Typewritten text of Packard’s address with some handwritten notations.

 

Packard notes that about 25% of those graduating are from other branches of the U.S. armed services, or are serving with the armed forces of other countries. “I am sure this group, who are not Marines, must share my great respect for the United States Marine Corps.

 

“Marines are proud,” he says, “and they have a right to be for many reasons. One of the reasons is the talent for innovation which the Marine Corps has shown.”

 

Packard gives several examples of this innovation. “It was a group of dedicated Marine officers centered here at Quantico who evolved the doctrine of amphibious operations – a doctrine which guided the armed forces in warfare in the Pacific during World War II and which still serves as our basic doctrine.”

 

“In 1965 when the survival of South Vietnam hung in the balance, the Marines went in first – mainly because, true to the motto the Corps, they were ready.

 

“In Vietnam, faced with a new kind of war in which our country had had no recent experience, Americans quickly learned how to fight it.

 

“It was the Marines who first put into effect a civic action program in Vietnam, recognizing that the struggle was more than a military contest. It was the Marines who devised the Combined Action Program which has been so effective a means of developing the capacity of the South Vietnamese forces to defend their country.”

 

Packard tells the graduates “Now that you have finished your course of study here at Quantico you are looking forward to the next step ahead in your careers. I suspect that the question ‘What lies ahead?’ is very much on your minds.

 

“We are going through a very troubled period in the history of the world. It is always difficult to foresee what the future holds, and especially difficult in a period of rapid change such as we are in today. But the future can be influenced by what people want it to be, and we therefore have a responsibility to chart a course for the future and to do our best to hold to that course.

 

“A society is the image of the individuals. It is not what [we] read in the papers. It is not the minority of dissidents. You men here today represent the best. I speak for the majority in saying we are proud. As individuals you can influence the future – [with] higher standards for your personal life – [and] as members of the Armed forces.” [This paragraph is handwritten in by Packard and is a little cryptic.]

 

“Packard says that the role of the Armed forces of this country “is to support and advance the interests of the United States in whatever way is necessary, and wherever they may be.” He asks, “What, then, is the direction in which we want to go in the future?

 

“President Nixon has charted the course well when he said we want to move in our relations with other nations around the world from an era of confrontation to an era of negotiation.”

 

“The Nixon Doctrine, while reaffirming our treaty commitments and our determination to offer a shield against nuclear powers, declares it to be our policy to expect other nations to assume primary responsibility for furnishing the manpower needed for their defense.

 

“The essence of the Nixon Doctrine is a partnership between the United States and other nations in which responsibility for international peace and security is a shared responsibility instead of one borne in disproprotionate [sic] measure by our country.”

 

Packard points to Vietnam, where the responsibility for combat is being transferred to the Armed Forces of [South] Vietnam, as the first application of the Nixon Doctrine. “And,” he says, “American troop strength and involvement in the conflict are being reduced.

 

“I need not tell this audience, which includes so many who have served in Vietnam, how important the current operations in Cambodia are to the attainment of our objectives. Crippling the enemy sanctuaries across the border reduces substantially the risks involved both for our remaining forces and for the people of South Vietnam as we continue to reduce our troop strength in Southeast Asia. One very gratifying result of the Cambodian operation is the demonstration of the capacity of the Armed Forces of Vietnam to conduct effective combat operations on their own.

 

“Our diminishing involvement in Southeast Asia and the increased assumption by other nations of responsibility for their defense make it possible to reduce our military forces and our defense budget.

 

“This, in turn, will allow a larger share of federal resources to go into domestic programs in the future.”

 

Packard says that budget reductions “can be offset to some degree by better use of resources.”

 

But he goes on to say that “It must be recognized, however, that increased efficiency will not be enough to make up for all the military cutbacks required by this reorientation of federal resources. Immediate combat capability will be lessened by the time we finish trimming the armed forces down to a size that fits the constraints of the federal budget.

 

“In terms of program, the part of our budget that is being most drastically reduced is General Purpose Forces. Our strategic forces under the Nixon Doctrine have a responsibility that is undiminished. If there is to be a nuclear capability for the protection of the nations of the Free World, it must be supplied by the United States.”

 

“Nor can we safely reduce spending for research and development in the present climate in international affairs. The military strength which our nation will have five or ten years from now will depend on the quantity and quality of our research and development effort today.”

 

“As our forces are cut, we must remember that there is a reasonable level of safety for our people and their vital interests throughout the world which must be maintained. To permit our military power to decline below that level is to tempt potential aggressors to action that can shatter the uneasy peace that exists in many trouble spots around the globe.

 

“Peacekeeping is the purpose of our Armed Forces. I need not tell those in this audience – more than 80 percent of whom have served in Vietnam – that we want peace. We want peace. We want an honorable peace in Southeast Asia as speedily as it can be attained. We want to see peace restored in the Middle East. We want to have peace maintained everywhere else in the world.

 

“If there is anything that our past experience demonstrates, it is that military weakness is not the way to achieve or preserve peace. And so, as we reduce our military forces, we must stop short of the level at which they can no longer effectively do their share in peacekeeping. The military power of our country must always be a credible deterrent to aggression which could threaten our people and their interests.”

 

“This, then, is the role of the Marine Corps for the future course ahead. The Marines must continue as the elite unit of the United States Armed Forces – well trained – combat ready – poised to respond quickly as an element of force to support the interests of the United States wherever they may be. In short, we are depending on you men who are graduating here today to carry forward in the proud tradition of the United States Marine Corps.

 

“We wish you success and the satisfaction of accomplishment in the years ahead. We are confident you will met this challenge and this responsibility wisely, courageously, and effectively.”

 

 

Box 2, Folder 8 – Department of Defense

 

June 24, 1970, Defense Policies for the 1970s,  The Brooking Institution, Washington D. C.

 

6/24/70, Handwritten outline for address, written by Packard. The complete text is quoted as written.

 

“ DOD responsibility to provide military capability necessary to support U.S. interests and commitments around the world.

 

Direct threat to security of U.S. very small

 

Policy since WW II

 

Limitation of Communist expansion and influence

Europe –Nato-Mideast-Asia-Korea-India-Pakistan-Iran

Treaties

Military Aid

Direct involvement

 

Changing world

 

Soviet strength

Nuclear – High Level

Naval   –   High R & D

Ground force

 

Sino-Soviet Conflict

Attitude of Allies

Domestic problems

 

Strategic Nuclear Problem

 

Soviet build-up of forces

Land based ICBMs

40% more operational or under construction

Considerably more payload

 

Sea based missiles

Equal force operational 1974

ABM Operational around Moscow

 

Very heavy Air Defense

 

Expenditures in recent years about twice U.S.

We have superiority in bombers

MIRV [Multiple Independent Re-entry Vehicle] will provide assured penetration but lower total destination force

 

SAFEGUARD ahead of Soviet ABM

 

Criteria for Sufficiency

  1. Assured destruction
  2. No incentive first strike
  3. Soviets would not come out significantly better

 

The possibilities of an Agreement

 

Strategic forces – 12 Billion

Great field for peaceniks – fellow travelers and do-gooders – infiltrate of real enemy

 

General Purpose Forces

 

NATO – Alternatives

  1. Maintain present forces

2.   Reduce present forces

  1. Mutual force reduction

 

NATO commitment forces cost both manpower level and cost of new systems

Tac Air

Tanks

Character of other weapons

 

Alternatives

1.  More reliance on allies

2.  Encourage cooperation among free world forces

  1.                            3.  Continue to take direct responsibility

 

Naval Forces

 

These issues must be translated into specific forces – planning must take into account

 

  1. Current situation and future trends – long lead time
    1. Readiness – active forces
    2. Reserves and training
    3. Future forces – weapons for 1975-1980
    4. Research and development

 

  1. Other demands on federal budget – domestic vs. military priorities
  2. Fiscal policy – surplus – deficit – inflation

 

 

Defense Department has taken lead in planning

 

  1. We have the largest discretionary share of Federal budget

Going down 4.5% – 3.4%

  1. Have best analytical capability on budget matters – also have largest                             number on Monday morning quarterbacks.
  2. Have taken lead in planning NSSM 3 – PackardRC [National Security Study Memorandum – Defense Program Review Committee]”

 

The balance of the outline is a list of statistics. Several pages of statistical reports are attached for reference

 

 

Box 2, Folder 9 – Department of Defense

 

August 20, 1970, New Policies in Defense Management, Armed Forces Management Association, Los Angeles CA

 

This was the 17th Annual Conference of this association of defense contractors. Packard was the dinner speaker.

 

8/20/70, Typewritten text of Packard’s address, with many handwritten notations by him.

 

“Many of you…may expect me to talk about what a grand job we have all done and how necessary we are for one another. I am not going to do that. I am going to talk about the things we have been doing wrong and the things that we have to do better. Let’s face it — the fact is that there has been bad management of many Defense programs in the past….most of this waste of taxpayer’s dollars has been due to bad management, both in the Department of Defense and in the Defense industry. We can and will do something about that.”

 

“Frankly, ladies and gentlemen, in Defense procurement, we have a real mess on our hands. It has been a mess for a long time and that fact is just recently showing up. The question you and I have to face up to is what are we going to do to clean it up.

 

“Let me first mention two things that won’t help.

 

“It won’t help for Congress to legislate detailed and inflexible rules governing procurement.

 

“Nor will it help to put the General Accounting Office in the process of making management decisions. The GAO deserves the highest marks for auditing, but the talents of a good auditor are not identical with those of a good manager.”

 

Packard says there is a lot of pressure to insert Congress and the GAO into the details of day to day management decisions in the Department of Defense. “Until we in the Department and you in defense industry demonstrate that working together we can provide capable and efficient management, these pressures will continue. In fact they will get worse.

 

“I have been in this job now for 19 months. Frankly, I am ashamed I have not been able to do very many of the things that need to be done to improve the situation I found here in January 1969. The most frustrating thing is that we know how we ought to manage – you, me all of us – and we refuse to make the changes we all know should be made.”

 

“We must find a way to do this job right, and you bear as much responsibility as I do.

 

“We need good people – and by that I mean you – who will step up to their responsibilities. That is what decentralization is all about.

 

Packard says that he recently issued a memorandum [May 28, 1970] of guidelines for Major Weapons System Acquisition. “There is nothing in this memorandum that you don’t already know. As a matter of fact, the management principles in my memorandum are so simple that anyone who could not have written the memorandum himself doesn’t belong in management.”

 

Packard says Admiral Rickover came to see him after he issued his memorandum. “He told me that the principles were great but that if we couldn’t get to the system that sits on top of the manager, nothing useful would happen. He is right.

 

“I know Secretary Laird and I bear the responsibility for the system in the Department of Defense, and I am going to keep working at it. But you in industry bear a similar responsibility, and I expect you to do the same thing.”

 

“In my memo I talked about policies for development of new weapons. The lesson that comes through loud and clear here is we should buy only what we need – not weapons you or anyone else thinks they can develop to do something that doesn’t need to be done. The Defense Department has been led down the garden path for years on sophisticated systems that you promised would do all kinds of things for some optimistic cost. Too frequently we have been wrong in listening to you, and more frequently you have been unable to deliver on either of these promises – what it would do or what it would cost. And we all in the past have too often been guilty of over-optimism on our cost estimates and over-demanding in our requirements.

“We share the blame together, but the mistakes of the past cannot be repeated if we are to provide for the nation’s defenses in today’s climate of a critical public and a critical Congress. We are going to buy only things that we need, and we are going to make sure they work before we buy. We must know what we are going to do and how to do it before we go into production. We are not going to put new weapons into development until we are sure we need them, and we are not going to put new weapons into production until we are sure that they work.

 

“This has been a short speech. I have tried to speak very frankly and directly this evening because the problem is very real. It is you people here tonight and the Department of Defense that must take action to solve these problems. We recognize that these problems cannot be solved overnight and perhaps some of them cannot be solved at all, but it is very clear that it is unacceptable to continue to do business as we have done it in the past.

 

“The things I have had to say tonight and the things I said in my

memorandum are simple. Many times we have done a bad job – we must do a better one. We must know what we are doing before we do it, and we must manage these programs better. We have many obstacles in front of us and most of them we created ourselves. We have given our critics the opportunity to find us at fault, and we run the danger that their efforts to direct Defense management will just compound the mistakes in the Department. We don’t need more supervision and more people in the act. We need fewer people. The system in the Department of defense is going to change. Secretary Laird and I are going to demand it. I expect you who are here tonight and everyone else who does business with the Department of Defense to do the same. That is all I have to say.”

 

8/20/70, Press release from the DOD Public Affairs Office containing the complete text of Packard’s speech.

8/20/70,  Copy of the printed program for the conference

8/20/70,  Copy of the program and guest list.

10/28/70 Letter to Packard from Robert R. Gros, VP, Pacific Gas and Electric, complimenting him on his talk. A newspaper clipping covering the event is attached.

 

 

Box 2, Folder 10 – Department of Defense

 

September 18, 1970, Department of Defense Airlie House Conference

 

9/18/70, Typewritten text of Packard’s remarks. The last three pages are handwritten in outline format. Packard is speaking to a group of DOD managers at what appears to be a two day “retreat.” These remarks are preliminary to group discussions on some of the current problems.

 

Packard says at their meeting a year ago he didn’t say much. But at this meeting he hopes “we can address some of the issues we must address in a honest, frank, and straight-forward manner, and I am sure if we do so this meeting will contribute to our ability to work together and get some things done which must be done.”

 

“Our department has been subject to criticism on a daily basis,” he says, “from the press, the Congress, and the public at large….”

 

“It will certainly serve no useful purpose for us to deplore the situation in which we find the Department of Defense, to apologize, to feel sorry for ourselves, or to otherwise pass the buck because…the buck stops here – stops with you and me, with all of us who are in this room and at this conference this week. We are the ones who are going to do something about it, if something, indeed, is to be done.”

 

Packard says that “It is my job today to tell you what I think we must do.” He admits he will not be right all of the time, but “whether the course I recommend is basically right or wrong, [will depend on] whether you people in this room agree that this is the way we should go or not. If I make a recommendation on a particular course of action, and you who are responsible to implement that course of action  agree with the recommendation, that course is bound to be successful. If you don’t agree, no matter what the merit or logic or justice of the recommendation , if you think it is wrong, if your heart is not in it, if you are motivated by selfish interests instead of the welfare of the organization, or if for a myriad of other possible reasons you do not support a course of action, that course  of action will very probably be unsuccessful, and therefore wrong. This, of course, is why I want you to participate in making the final decision. [His handwritten note here says “Participative Management” which is a strong HP management practice.]”

 

“…now lets [sic] get down to the problem,” Packard says. “We can begin with the very simple proposition that I expressed in a recent speech…to Defense Managers and Defense Contractors, that Defense procurement is a mess, and it will continue to be a mess until you who are here in this room do something about it. And, you really have not done anything about it yet.

 

“I have most of my professional career working at the job of management. The definition of Management is very simple – Management is getting things done through people. There is a very simple formula for achieving good management. First, you get good people on the job. Second, you create an organization structure and an environment so that they can get something done.”

 

Packard adds that “What we really mean is, if we want a good job done, we must put a good manager in charge, but we must also add – in charge of something that he is good at. The personnel policies of the Services do not achieve this objective, and it will be impossible for the Services to turn in a good performance unless they recognize this fact – and do something about it.”

 

“I am pleased that we have ‘People Problems’ first on the Agenda. I know we have all kinds of people problems. The Draft, Reduction of forces, Minority problems, Drug Usage, etc. Lets [sic] spend some time today on the important subject – ‘How can we do a better job with fewer people’ – thats [sic] the People Problem we have. Everywhere I look I still see too many people, not too few. We can have a lean – mean military force with fewer people and fewer dollars than we have today.

 

“The second corollary of good management is once you have selected a good man to do the job, let him do it. In the Department of Defense, I think you will all agree that we violate the second principle, if anything, more than the first.”

 

[At this point Packard slips into handwritten, outline format.]

 

“Most of people who monitor a project don’t know a darned thing about it.

 

“Have to make major changes in organization structure. I am sure in procurement, Military Command.

 

“Haven’t done very much yet in getting at heart of problem.

 

“Blue Ribbon Panel

Operations

Resources

Evaluation

 

“Plan to proceed –

 

“Directives

Management systems ???

Design new products so they can be transported where they will be used.

 

Next step

Some business plans redundant – cancel directives – change.

 

People will follow.

 

Let’s spend this PM & tomorrow discussing some things that will do what needs to be done.”

 

 

Box 2, Folder 11 – Department of Defense

 

October 21, 1970, American Institute of Aeronautics and Astronautics, Corporate Member Luncheon, Houston, TX

 

10/21/70, Typewritten text of Packard’s speech, with handwritten notations by him.

Packard is speaking to a large group of industry people anxious to hear

more about the current DOD major weapons systems acquisition policies.

 

Packard says that the U.S. is in a period of  “transition…from a wartime to a peacetime economy. [The President] has called  for a reordering of priorities in the way Federal funds are to be spent – a smaller share for defense and a larger share for non-defense domestic programs.

 

“We are moving also,” Packard says, “in new directions in our foreign policy.

 

“President Nixon proposes to build the foreign policy of the United States in the decade of the 1970s on the three pillars of Strength, Partnership, and Negotiation.”

 

As to the first pillar, Strength, he says “We must…ensure that the strength of our Armed Forces does not fall below an acceptable level,

 

Our country must have –

Forces to offset the growing Soviet military strength

 

Our country must have –

Forces to provide a pillar of strength supporting our foreign policy.

 

“The big question today is this: Can our country have these forces at a lower cost so as to release federal resources for the many non-defense needs of the country?”

 

“We in the Department of Defense have addressed this problem to the best of our ability in preparing the Fiscal Year 1971 budget which is now before the Congress.”

 

Packard says they have been able to keep important national security programs in the budget “only by making substantial reductions in a number of other areas. We have cut manpower and reduced the number of over-age ships being operated by the Navy.”

 

As to the second pillar of Nixon’s foreign policy, Partnership, Packard says “…we are forging a new kind of partnership. Partnership for the future in which our partners carry a larger share of the burden.”

 

“They must pick up their share of freedom’s burden. This principle applies in NATO, in the Mideast, in southeast, in Korea, and in Japan.”

 

Packard moves on the third major principle of Nixon’s foreign policy, Negotiation. “President Nixon has announced that we wish to move from an era of confrontation to an era of negotiation.” He cites efforts with the North Vietnamese in Paris, with the Soviets in Helsinki and Vienna, with the Chinese in Warsaw, as well as with those continuing to fight in the Middle East.

 

“Our world-wide record in seeding meaningful negotiations for peace is quite clear, and we intend to continue to pursue this objective as long as we have any realistic hopes of progress.”

 

Saying that the Nixon Administration has a big job to do, he asks

“Can the job be done with a lower defense budget? This will depend on whether our partners will accept a larger share of the responsibility.” And he adds that “It will depend on whether we can, in fact, get more defense for a dollar.

 

“The first steps Mel Laird and I took in the spring of 1969 were to find places where the defense budget could be reduced in ways which would not unacceptably damage our strength.

 

“Our Vietnamization program was an important step in that direction. It has been a major factor in allowing us to reduce our defense budget without jeopardizing our national objectives.

 

“I also have looked at a great many weapons development programs since I have been in this job. More recently I have looked at some of the Defense Department overhead activities and costs. And, I am convinced that this country has in past years not been getting a very good deal for the money the Defense Department has been spending. The taxpayers have good reason to expect better performance.”

 

“We spent a great deal of time in getting the Fiscal Year 1971 budget to the lowest possible level consistent with national security considerations. It is, as we have said many times, a bare bones budget.”

 

“Meanwhile, we recognize past Defense short-comings and waste. And, we are moving to correct them.”

 

Packard summarizes the problems:

 

“First, we have wasted billions of dollars on programs that were started and then abandoned. Billions of dollars have been wasted in the past because there has been no hard-nosed decision making about what to do and what not to do. Perhaps such a process is not possible, but a better job must be done.”

 

“We urgently need better decision making procedures on the question of what new weapons to develop and produce. The services have a hard time being objective, cost effective analyses are limited. What we need is more objectivity and more common sense, and these are commodities in limited supply; especially I find, in Washington.

 

“I circulated a memorandum on May 28 throughout the Department in an attempt to summarize my impressions up to that point on what is wrong with the defense procurement process, and what might be done to improve it. [See Packard speech August 20, 1970, New Policies in Defense Management]

 

“I have been very encouraged by the response to my views in that memorandum both from the Department and from Industry, which, of course, will be affected. The most important thing I tried to say was that the only way the Department can be managed better is by more decentralization.

 

“If decentralization is to work, the military services have to step up to their responsibility. This means that they must always put the welfare of the United States ahead of the desires of the Army, the Navy, the Marines, and the Air force. They try to do this. They try very hard. But sometimes it doesn’t quite work out right when it comes to deciding about what new weapons need to be developed and produced. This problem will not be resolved by having system analysis types making decisions – or for that matter, other Secretary of Defense offices. We just have to get the decision-making process and the implementation of programs down to a lower level.

 

“This is what I mean by decentralization, and this is the only way the Defense Department is going to discharge its responsibility to the taxpayers. Both the decision-making and the implementation have to be improved.”

 

Packard says the reaction to his May 28, 1970 memo has been favorable. “I believe we have a commitment at all levels in the Department [of Defense] – and I sense in industry as well – to support the policies outlined in my memorandum….That is the all important first step. It remains to be seen whether we can keep going forward.”

 

In conclusion, Packard says he would like to give a report on “where we stand on the process of reducing budgets.

 

“Two things have been happening to the Defense budget.

 

“The first has been the impact of inflation. This has been a particularly serious problem for Defense because so much of our budget goes to pay for people, and because personnel costs have risen much more rapidly than costs in other areas. So, in talking about the Defense budget, I would put it in terms not just of dollars but in dollars-of-purchasing-power.

 

“The second thing that has happened to the Defense budget, at least since this Administration has come into office, has been that the dollars allocated to Defense have gone down. As an example of these two effects, the FY 71 budget in purchasing power is $17 bullion dollars below the FY 68 budget. The FY 71 budget will result in a smaller Army, fewer wings for the Air Force, fewer ships for the Navy – a smaller military force in total. We will keep the important new weapons programs, but most will be at lower procurement levels or stretched out in time.”

 

“In purchasing power for our peacetime forces, the forces we will maintain when we are out of Vietnam, the FY 71 budget is $2 billion below the FY 1960 budget. I think this makes it very clear that the 1971 budget is in every sense a rock-bottom bare-bones budget.”

 

“In summary, we have been planning for leaner military forces for the future. These plans are already made and to a large degree already implemented. This country cannot afford to accept a lower level of defense than is provided by the FY 71 expenditure rate of 71.8 billion dollars – which is in the budget we have submitted to the Congress.”

 

6/29/70, Copy of letter to Packard from James J. Harford, American Institute of Aeronautics and Astronautics, asking Packard if he would be willing to speak to the annual meeting of the members, and, in particular, review the “New Guidelines for Major Weapons Systems Acquisition” Packard distributed.

 

6/29/70, Copy of letter from James J. Harford, AIAA, to Robert C. Seamans, Jr., Secretary of the Air Force, asking if he would be willing to write Packard endorsing the invitation to speak to the AIAA.

 

7/2/1970, Copy of letter to Packard from Robert C. Seamans, Jr., Secretary of the Air Force, endorsing Harford’s invitation.

 

7/8/70, Copy of letter from Packard to James J. Harford saying he accepts the invitation to speak to members of the AIAA.

 

8/3/70, Letter to Packard from James J. Harford, thanking him for accepting their invitation to speak to members.

 

10/2/70, Copy of letter to Packard from Albert C. hall, AIAA, providing several questions members have about the new guidelines.

 

10/20/70, Letter to Packard from Jerry W. Friedman, Deputy Assistant Secretary, giving details of their trip to Houston, where they will visit Oveta Culp Hobby and the editorial staff of the Houston Post, prior to the luncheon with the AIAA. Friedman provides some “talking points” for the meeting with the Post people.

10/29/70, Letter to Packard from Oveta Culp Hobby, thanking him for the visit with them.

 

 

Box 2, Folder 12 – Department of Defense

 

October 26, 1970, Keynote Address to The Instrument Society of America Conference, Philadelphia, PA

 

10/26/70, Typewritten text of Packard’s address with some handwritten notations.

 

Packard says he plans to talk “about where we have been and where we might be going in Department of Defense supported Research and Development.

 

“Ever since the end of World War II research and development supported by the Department of Defense has provided the major support for expansion of nearly all U. S. technology.”

 

Packard gives several examples of products, in common use in civilian life, that were originally developed through research for military use:

 

Electronics – radar, communications, computers

Aviation – turbojet turbofan engines, Boeing 707 from military C-135, light observation helicopters

Materials – aluminum, titanium, glass-reinforced plastics (composites)

Satellites – communications, navigation, mapping, weather observation

Medical – treatment of severely burned patients, helicopter evacuation, vaccine for meningitis

 

“The space program, together with expanding defense research, brought the total U.S. government research and development expenditures to a peak of about $13 billion in 1966 and 1967; defense was about half of that.

 

But now in 1970 the total U.S. government research and development is going down to a level of around $11 billion, with both space and defense declining rapidly and with defense still about half the total.

 

Packard says he is very concerned about this decline in total research and development: “It has grave implications for the future economic growth of the United States, because defense supported research over the past twenty-five years has been a decisive factor in both this country’s military capability and its economic growth.

 

“The men who set the pattern for military research and development  in the United States after World War II had great vision and wisdom….They realized that a major, well conceived program of defense research and development could help assure for the United States the military strength necessary for world leadership. More important, they recognized that defense research and development required the broadest possible bases of technology and technical education. And, they recognized that research and education are the job of this nation’s universities; that this was where the pay-off would be the best.

 

“I saw this military-supported combination of research and education blossom at Stanford, just as it blossomed at MIT, Cal Tech, and other universities throughout the country. It was Department of Defense support for research-and-engineering education at Stanford which enabled that university to develop into one of the great engineering schools of the world.”

 

“…we face the possibility of continually decreasing Defense Department expenditures for research and development because of radically – and I mean that in a strict definition – changed attitudes in the universities, in the scientific community, and among some elements of the general population. These attitudes are reflected, of course, in the Congress; and they seem to be bringing about a response which, in my opinion, could result in a significant and dangerous change from the quarter century of great technological progress of the past in the United States.”

 

Packard says he has “two questions of great concern …about this situation.

 

“First, what does it mean for the future military capability and therefore security of our country?

 

“Second, what does it mean for the future technological and educational base of the country and therefore for its potential for economic and social development?”

 

Looking first at the impact of a lower national research and development effort on our future defense capability, Packard points out that “…the world is no less hostile than it has been. In fact, the threat of conflict and violence is, if anything, increasing….One can hardly deny that forces of subversion and revolution inside the boundaries of many free world countries are expanding at an alarming rate, not only in traditionally troubled areas like the Middle East, but even right here at home in the United States, in Canada and in South America.

 

“At the present time we are from two to four years ahead of the Soviet Union in every important area of weapons technology….Our weapons are better now because we developed a substantial lead in technology during World War II. And we have maintained high enough levels of research and development to stay ahead ever since….If we ever lose the lead we now have in all major areas of military technology, we will inevitably face the prospect of having to accept a Sputnik not just in one or two unimportant areas now and then, but the prospect of a Sputnik in every important area of military weapons, in strategic nuclear forces, in naval forces, and in conventional ground forces. No responsible administration official, not any member of Congress, can afford, in my opinion, to take that gamble with the future security of our nation and the future safety of our people.”

 

Packard makes it clear he is not just “making a case for higher military budgets. “…we have already recognized the desire of President Nixon and of our people, to have fewer dollars spent on defense, and more federal dollars available for non-defense programs.”

 

“We have recognized the fact that nearly all our free-world friends and allies have rapidly growing economies, and can therefore be expected to carry a larger share of our mutual defense burden. We have recognized that through negotiation it may be possible to reduce the levels of armament, particularly in the strategic area. We also believe negotiation is the best way to resolve the problems of the Middle East and of Southeast Asia.”

 

“But, as we have lower levels of forces we cannot afford to have at the same time inferior weapons. We have superior weapons now, and the reason we do is that up until this time we have had a larger and better military research and development program than the Soviet Union.

 

Unfortunately, the House has cut back this year our request for research and development funds, and unless we can reverse this trend there will be only one possible result – the Soviet Union will come to have a larger and better military R&D effort, and in due course, will have superior weapons in every category.”

 

Packard says he realizes it is not necessary that R&D be supported by the Defense Department. “It can be supported by other federal funds. However, we must remind ourselves that we get a double benefit from defense supported research and development. A high level of R&D is the only way we can be assured of superior weapons in the future. And on the average, a defense dollar supporting R&D will contribute to this country’s economic and social progress just as effectively as a non-defense dollar supporting R&D.

 

“I am not particularly troubled that a few university faculties have chosen not to support defense-funded research. I do not think that has much effect on our ability to get the necessary R&D done. There are many other universities where defense support is welcome, and there are many scientists and engineers to do the work.

 

“In summary, research and development has been a key element of our nation’s strength, the source of a better life for our people and the decisive element in assuring their security. Our society and the world around us present ever increasing demands on our imagination and technical excellence. Mel Laird and I accept our responsibility to see that these demands are accurately described to the Congress and the American people.”

 

10/26/70, Press release from the Department of Defense containing the full text of Packard’s speech.

10/26/70, Silver Jubilee Souvenir Program from the Instrument Society of America.

10/26/70, Copy of list of  ISA Conference Sponsors.

11/11/70, Letter to Packard from Herbert S. Kinder, ISA Executive Director, expressing appreciation for Packard’s speech, and sending to Packard an Honorary Member pin.

 

 

Box 2, Folder 13 – Department of Defense

 

December 7, 1970, Defense Management Concepts, National War College, Washington D.C.

 

12/7/70, Typewritten text of Packard’s address.

 

Talking to future military managers Packard says he intends to “talk about “the management of the Defense Department”….adding that “I am not sure the Department can be managed….”

 

“…management is people, it is working with people…[it is] deciding what to do and doing it.”

 

“Sometimes we put too much emphasis on the doing-it part and not as much emphasis as we should on deciding what to do. But, …decisions and actions are very seldom completely separable. They need reiteration. You decide what you want to do, and then when you try to do it, you find there are some problems.

 

“Then, of course, in any program of management you need an evaluation procedure which simply is one to try to evaluate whether your decisions and your evaluation are effective.

 

“Everyone would like to think of management as a precise science, and there is a good deal of work in this direction….But I think there is an equally valid view that management is just about as much as art as a science, and because it has to do with people, emotions and sometimes, as I have said, just plain luck or plain fate have a lot to do with whether the decision comes out to be right, whether the job that you do is the right one.”

 

“Systems analysis and these other approaches have their place, but there are other elements in making good decisions, and I think there are two or three things that I keep in mind….”

 

“The first…is to have all the facts and understand them.

 

“Second is to listen to all opinions.”

 

“Another thing I have found: that it often helps to take a little time and think about the problem…be sure you have thought all aspects through.”

 

“As I look back over my experience in the business community, I can see many cases where poor management –meaning poor results from management action—was much more the result of poor decisions being made in the first place rather than poor implementation of those decisions. So I think I would say without any qualification that the most important step in any management is to decide what to do and be sure that you are doing the right thing, because even if you do the wrong thing well, it is not going to come out the right way.”

 

“…this is one of our big problems in managing the Defense Department—to determine what the level of our military forces shall be and what we shall provide in terms of the character of the forces, the types of weapons, and so forth. If the decision on the levels of forces is wrong or the kinds of weapons we select are wrong, then it is pretty hard to make the overall end result come out right.

 

“We have talked about decentralization, and we are working toward implementing more decentralization in our management program. Secretary Laird talks about “participative management.” I sometimes talk about “management by objective.” [A strong Hewlett-Packard practice.] I think we have to be careful in characterizing an approach to management in any simple terms. There are some things in management that can be decentralized; there are some things that cannot.

 

“I think we begin with the basic proposition that the decisions relating to the character and level of the forces are decisions which cannot be made by formula, by fiscal analysis; they cannot be made by decentralized decisions. But they have to be influenced realities—the fiscal realities, the political realities, both domestic and foreign. They are affected by uncertain decisions of the enemy, and they are also affected by uncertain decisions of our friends.”

 

“I would like to spend a few minutes telling you what the procedures are and how we are going about this job in the Government today, trying to determine the size and character of our military forces for the future, because this is, as I say, in many ways the most important management decision. This decision, as I have already indicated, cannot be decentralized. It cannot be made by DOD alone, let alone by JCS or the Services. This decision…has to be made on a centralized basis by the highest authority of Government. It has to be the President and the Cabinet who make the final determination on the size and the character of the forces….I do not mean what specific kinds of weapons and so forth, but the questions of how many divisions, how the forces are configured between air, naval and ground forces. These are decisions which affect the overall decisions of the country.”

 

“The President has requested the National Security Council to address certain key decisions which need to be made and to advise him. The Security Council in turn has tasked the various agencies in the Government to study the question and to make recommendations which eventually go to the Security Council and then to the President. We call this the NSSM approach because it starts out with a National Security Study Memorandum which outlines the problem that is to be studied/ and it ends up with a NSDM, a decision by the Security Council.

 

“A great may subjects relating to the future of our military forces have been addressed through this process.. One of the first exercises was what we refer to as NSSM 3. It was a study directed at the alternatives that were available to the President in terms of various levels of military forces that might be needed for the future, related to the domestic priorities of the country.”

 

“During the year studies were directed to provide an understanding and guidance for the Strategic Arms Limitation Talks; NATO, the Mid East, and a great many of these subjects which relate to the question as to what the level and character of our military forces for the future should be were addressed. These questions are not questions which can be analyzed at one time, a decision made, and that decision then hold forever or for even a reasonable period of time. These decisions have to be continually recycled and reevaluated because conditions change.

 

“In order for an evaluation on a continuing basis, another mechanism, again under the Security council, was set up, called the Defense Program Review Committee. This was simply a small group set up to address and evaluate some of these questions on a continuing basis. Secretary Laird in particular was anxious to have the force level and military budget questions examined continually in relation to the domestic priorities of the country, the domestic priorities of the Federal government, and these in terms of the resources which might be available.”

 

“In the early stages of these studies, beginning in early 1969, it is my judgment that we tended to rely rather heavily upon the systems analysis approach; in fact, some of the early recommendations were criticized  (and I think properly so) by some of our military people as being too much systems analysis oriented.

 

“I think we have moved in these studies toward a better balance. We are still using systems analysis procedures to address these questions, but we are getting the judgments and evaluations of the Joint Chiefs more effectively involved and of the Services themselves.”

 

“We are trying to get the political, both domestic and foreign, considerations worked into the equation a little better. I cite this to simply emphasize that these decisions which relate to the future level and character of our military forces are not decisions that can or should be decentralized. They must be made at the highest level of the Government, but if they are going to be made as well as possible, they must include interests from all people involved.”

 

“Let me move on now and talk a little about some of the things we are doing to implement the decisions, the specific plans and force levels and convert them into budgets and specific long-range plans.”

 

“The system has been established. It starts with strategy guidance which is prepared by the Joint Chiefs….I think sometimes in the past the JCS strategy has provided a little different guideline for decision-making; and that being the case, it makes it difficult to base specific decisions on the strategy guidance.

 

“The general feeling has been that it is desirable for the JCS to provide strategy guidance and force levels without fiscal constraints. There may be some argument foe this to be done, but I have some concern as to whether this is really an effective way to go about it, and we have been moving gradually to try to get the fiscal constraints considered earlier in the game and, I think also, to get some of the political and other constraints considered a little more carefully.

 

“It would be my hope that we can work together on this program and eventually have the strategy guidance that the JCS prepare be consistent with the overall strategy guidance of the Administration and the OSD, of course.

 

“The specific forces are then tailored to the strategy guidance. This has been done by a rather complex and rigid system  of procedures in which very rigid guidance has been given to the Services. The complaint has been that the Services have not had a chance to provide the initiative in addressing these problems but, rather, have been in the position of only being able to respond to programs that were generated by OSD and generally Systems Analysis.

 

“We have been trying to change the emphasis here and move in a direction so that the Services can in fact provide the basic initiative in tailoring the forces to meet the strategic guidance….I think we have made some progress in this direction.

 

“…I think there are two things that the Office of the Secretary needs to do in this matter.

 

“One of them is that it is very important to make sure that the forces that are proposed by the Services are in balance and consistent with the requirements of the overall strategy. This, of course, can be done to a large extent by the JCS, but there still seem to be certain questions that they have difficulty in addressing in a completely unbiased manner. I think it is going to continue to be necessary for the OSD to make some judgments about balances between forces.”

 

“So as I see it, what our role should be is to make sure the strategy guidance is right, because if we do not know what that is, if that is not defined on an acceptable basis, then all of the planning e do from that point on is going to be somewhat faulty.

 

“Once the strategy is accepted, the Services should have a very large role in recommending forces, both in terms of levels and specific forces, but the OSD will, as I have said, I think, still have to have a place in determining the balance, the question of how may ground force divisions, how many carriers, how many wings. To some extent this is difficult to resolve and has to be resolved on an overall basis.

 

“There are a great many details in preparing the budget, and it is very necessary that we make sure there is consistency in another way. For example, if the strategy that is decided upon is to provide forces, say, for a 90-day conventional war in NATO, it is important that all three Services have the support necessary, the supplies, the logistics for that agreed period. It is unacceptable if the Army has a 90-day supply and the Air force has only a 10-day supply.”

 

Packard says he would like to spend a little time “talking about the things we are doing on the weapons system procurement business because this is a whole range of decisions made, in a sense, down at the lower level but nevertheless very important because tremendous amounts of money are spent here. Here both our decision-making and the efficiency with which we implement the programs are important.”

 

“What we are trying to do is to recognize that the decisions relating to the requirements, the characteristics we would like to have in the weapon the technological problems involved in developing and achieving those requirements are not separable subjects but they are interrelated.

 

“One of the troubles we have had is that the Service people (and quite understandably) have proposed they would like a particular weapon that would have certain characteristics, and they want the best characteristics that can be achieved. The scientists and the contractors have been inclined to promise more than they can actually perform; so many of the systems have gotten off to a bad start in that the are trying to do something that is not quite feasible. This has driven the thing to some very bad situations in the management.”

 

“We are trying to encourage our Service people to address more attention to the tradeoffs early in the game, to spend more time on the advanced development aspects before a system goes into full-scale development, to make sure that technical uncertainties have been eliminated to a reasonable extent (you can never eliminate them completely until you are all done with the job) and to make sure that the tradeoffs between the desired performance and the performance that can be achieved on a reasonable basis are balanced out.

 

“We are emphasizing what was the situation before, but I think we are emphasizing it perhaps in a little more effective way, that here we can decentralize the implementation responsibility to the Services, that the role of the OSD is not to make the detailed decisions for the Services on these weapons systems programs but to make the decisions as to whether the program should go ahead, to provide a capability for evaluation to determine whether the program is far enough along to go ahead, whether it is consistent with resource allocations and so forth. But the Services themselves should be able to and should have the responsibility to manage their own programs.”

 

“I think one of the troubles has been that in the past a good many of the detailed decisions have been made or at least second-guessed by OSD offices. This tended to discourage the Services.”

 

“…I think it has been helpful to try to get over to our OSD offices that they do have specific functions to do, but, as someone put it, everybody does not have to be in on everything.”

 

“We are moving, then, toward trying to provide more flexibility in the development program so that tradeoffs on these matters can be considered as development progresses. This brings us to the conclusion that the total package procurement process is not a very satisfactory process for any development that involves a reasonable degree of uncertainty. There may be places where this can be used, but we are moving toward the general guidance that a cost plus incentive type of contract is desirable for the major development programs, and it is desirable because this reflects the fact that a better job can be done if these matters can be traded off during the entire development program and if we do not come down on a hard schedule, a hard level of requirements. In other words, if you can precisely define the product that you are buying and if you are absolutely sure that your contractor can make the product that is exactly as you have defined it, then a total package procurement might be realistic. This is hardly ever the case in a major weapon system program.

 

“There are questions about how effective it is to use a cost plus incentive contract—doesn’t this just allow the program to run wide open? The answer is that there is a corollary requirement, and that is that these programs have to be managed better by the Services. The concept under the total package procurement was that once the specifications were set down and given, you had a competition; great American industry could bring its resources together and do the job and the Services really did not have to pay much attention to it except to see what came out at the end; if it met the requirements, to pay the bill, and that was all there was to it.

 

“I think we have learned by some rather sad experience that this is not possible, that these programs need to be managed right, need to be managed more closely; and if they are to be managed more closely, we have to have the best possible project managers. Those project managers must have some decision-making authority, and we have to minimize the number of people and the amount of effort that is directed at looking over their shoulder and second-guessing them.”

 

Packard says they have made some progress in changing the procurement system, “But most of the Services have not yet faced up to the problem that they may have to change the structure of their organization to some extent because we have still within the Services a tendency for too many people to have to be in on decisions too far down the line.

 

“What we would like to achieve here would be a system wherein the project manager is a good man, with experience, selected for the job, given the assignment long enough to get the job done effectively, not be pulled out for some other assignment when he is halfway through it, at an inappropriate point—and with some authority to make decisions, tradeoffs, and so forth, and with the review authority, both within the Service and at the OSD level in terms of whether he has or has not achieved certain accomplishments on the program.

 

‘We have moved in this direction. We have set up milestones, and at the OSD level we are trying to ask the Services for an evaluation only at the appropriate point.

 

“Many times the program gets into advanced development at sort of a low level and builds up, and I think this is all right. I think some initiative at that end of the line is a good thing. But, as the program builds up, the decision has to be made as to whether to go ahead with the formal development program—in other words, undertake to develop and put the equipment in the forces. That is the point at which we intend to keep the decision-making at the OSD level because we want to be sure that the decision is compatible with the overall planning.

 

“It may be possible as we move down the line to delegate this decision-making point to the Services at a lower level, but for the time being, at least, we want to monitor it.

 

“There are certain milestones in the development program which relate to whether the technical objectives have been achieved, whether the fiscal guidelines (the cost guidelines) have been exceeded, and those milestones are selected, hopefully, at meaningful points (not too many of them) so that the project manager can be left alone to do his job up to that point. But these evaluation points are places where the OSD, in terms of whether additional funds should be released or for other reasons, may want to get in on the decision.

 

”When the development is complete and the decision to go ahead with production is in order-because in the case we have set the development up on a cost incentive basis, we want to try not to establish a firm schedule for production, at least until we are down to development to a certain degree—the point at which the decision is to go ahead with full-scale production is an important one. We are anxious to make sure that the development is far enough along to eliminate the uncertainties. This is a  point of decision where the OSD will still be involved. I think these points of decision where the OSD should still be involved should relate to some extent to the points at which some of the major staff groups in the Services should be involved.

 

“One of the troubles now is that when we call for a review at the OSD level, then the project manager is often asked to review at every level from where he is right up to the OSD because everybody wants to know what he is going to tell the OSD. This seems to me to be a kind of wasteful process. There should be some way we can combine these things. We are working on some things in this direction.

 

“One of the problems that is still difficult to resolve is the question of which Service should have the responsibility for a particular program. We have been addressing some of these on the basis of trying to get the responsible Services to sit down together and see if they themselves can figure out a logical way to do the job. I prefer this approach because if they agree among themselves, this is the right way to go; it is much more likely to work than if somebody at the OSD level directs them to do it one way or the other.”

 

“I have been actually very encouraged by the response we have had in trying to move ahead in some of these ideas. I have had, as I expressed at the beginning, some concern as to how far we are going, but we are moving ahead with the basic objective, first, of trying to find a better way to get the overall major decisions made to work with the other people in the Administration and with all the people in the department, because the basic decision on force level and character of forces is the prime decision.

 

“We are moving in the direction of trying to bring the Services into a more responsible role in all of the areas involved, and we are trying to cut back on the amount of red tape and the amount of control that has been heretofore centralized at the OSD level, some of which have not been looked at for a long time, and some of which, as I have said, address themselves more to the importance of reporting than to the importance of getting the job done that is supposed to be done.”

 

“We are going to try to continue to move in that direction and find some ways in which we can eliminate unnecessary work and give people more responsibility. In order to do this we will, of course, have to rely very heavily on everyone in the department and everyone in the Service moving ahead and putting their shoulder to the wheel.

 

“Obviously, progress can be made to the extent the people in the organization agree that we are going in the right direction and accept what we are trying to do. It is for that reason that I put a good deal of emphasis on what Secretary Laird calls “participative management.” This is really based on the basic proposition that if people are involved in making decisions which influence them they are much more likely to be effective in implementing those decisions. This has a good deal to do with decentralization, but I do not want anybody to misunderstand this matter of decentralization. It does not mean we an decentralize everything in the department. There are a great many things which cannot be decentralized to the department from mother areas of the Government. There are some decisions that just have to be centralized, but they should have the participation of those who are affected, and we are trying to do this to the extent we can.”

 

12/7/70, Carbon copy of text of Packard’s address, with handwritten notations by Packard. Marked as an official document of the National War College

12/7/70, Reproduced copy of above.

12/14/70, Letter to Packard from R. L. Dalton, National War College, sending stenotypist transcription of his speech for markup.