ENGINEERS: A DROPOUT PROBLEM FOR THE U.S. Published By: NYT, 03/27/1983, by Andrew Pollack WITH the bachelor's and master's degrees in mechanical engineering t hat Peter B. Franz possesses, he could be helping the nation battle J apan for technological leadership. Instead, Mr. Franz runs a beer a nd wine store in Cheshire, Mass. After having been dismissed as heado f research and development of a textile company a few years ago, he f ound companies were not interested in hiring a 45-year-old engineer.N ow that he has started his own business, he said, he finds it much m ore enjoyable than engineering. Mr. Franz is not alone. At a time when the nation is decrying a shortage of engineers, and engineering schools are filled to the breaking point, many older engineers are leaving the profession for a variety of reasons. This exodus has been lamented by industry and Government officials, including President Reagan, who are concerned, for example, that the United States, with twice the population of Japan, produces fewer engineers each year than that nation. And it raises questions for the growing number of people considering careers in engineering: Is it a lifetime career or one with few growth opportunities after the first few years? If it is not a lifetime career, are engineering students being trained under false assumptions? In a letter to Technology Review, the alumni magazine of the Massachusetts Institute of Technology, Mr. Franz urges older alumni to inform students that engineering might not be so desirable 20 years after graduation. The departure of engineers for other professions also tends to belie any claims that there is a shortage of them, further confusing an already muddy picture. Resolving the confusion is becoming a national concern as the stakes in the international high-technology competition grow. Much of the concern so far has centered on whether there is or will be an overall shortage of engineers. Many executives predict a longterm shortage of engineers, which will be felt again as the economy continues its rise out of recession. But the current situation is somewhat tight, and engineers are not immune to layoffs. Last October, engineering students at the University of Missouri began lining up to sign up for job interviews the day before the signups, and slept in the school's hallways. ''Our general feeling is that there is no monstrous shortage of engineers,'' said Fred W. Garry, vice president of corporate engineering and manufacturing of the General Electric Company, who said their may be modest spot shortages in some disciplines like electronic engineerig. Patrick J. Sheridan, executive director of the Engineering Manpower Commission of the American Association of Engineering Societies, an umbrella group representing engineering professional groups, said there are now 9 percent fewer job openings now than a year ago for engineers. Still, engineers had only a 2.4 percent unemployment rate for 1982, far better than the nation's average. Yet another concern has been on technical education. Perhaps in response to a perceived shortage, enrollments in engineering schools have been swelling, but the schools cannot handle the increased demand. With industry salaries so high, few students are staying to attend graduate school and to teach. Some 9 percent of engineering faculty positions were vacant and of the engineering Ph.D. students 41 percent were foreigners in the last academic year, according to the American Society for Engineering Education. The high salary differentials have also led to a severe shortage in high school science and math teachers. While concern is great over those factors, attention is also starting to turn to the overlooked subject of whether working engineers are being utilized well. By some estimates, 50,000 engineers leave the profession each year, almost as many as the 67,000 who received new bachelor's degrees in engineering last year. ''Companies are complaining there is a shortage of engineers,'' said Lotte Bailyn, professor of organizational psychology and management at the Sloan School of Management at M.I.T. ''What they're really complaining about is that there is a shortage of young engineers.'' No one is quite sure how serious a problem the exodus is, or whether it is more of a problem in engineering than in other professions. But there is certainly a recognition that engineering manpower question cannot be resolved without taking into account the working engineer. If engineers are not working as engineers for reasons that could be corrected it could alleviate any shortage and reduce the strain on the schools. The National Research Council has formed a committee to study the education and utilization of engineers. Jerrier Haddad, a retired vice president of I.B.M. who heads the committee, said most previous studies have focused too narrowly on the problems of the engineering schools. Some evidence is available, however. Professor Bailyn in 1970 surveyed 878 M.I.T. alumni who had received engineering degrees 11 to 19 years earlier. Only 152 were still in engineering. By 1978, 25 percent of the remaining 152 had departed. In an informal and admittedly unscientific survey by Institute, the newspaper of the Institute for Electrical and Electronic Engineers, 81 percent of the respondents felt there was no nationwide shortage of engineers. More than 60 percent said that engineers were being underutilized, either because their skills had become obsolete or because they spent time on menial tasks such as photocopying, which could be done by others with less skill. The reasons that engineering is a ''leaky bucket,'' are varied, but one is clearly obsolescence. Particularly in fast changing fields like electronics, it is difficult for older engineers to stay current. Sometimes an entire specialty is made obsolete by the birth of a new technology, such as when the transistor replaced the vacuum tube. F. Karl Willenbrock, Cecil H. Green Professor of Engineering at Southern Methodist University, said that an electrical engineer now nearing the end of a 40-year career would have received his training at a time when there were no transistors, no computers, no lasers and no satellites - all developments that have created entire industries. ''The half-life of an engineer is about five years,'' said Terry L. Gildea, technical training manager of the Hewlett-Packard Company, explaining that after five years, half of what an engineer knows is obsolete. The remedy, obviously, is to keep engineers up to date. While some companies such as General Electric, International Business Machines and Bell Laboratories spend a great deal of time and effort on employee education, there is a feeling that such efforts are not widespread enough. Keeping up to date is often viewed as the responsibility of the individual engineer, not of the employer, and it is viewed as optional. Further, it is difficult for an engineer in mid-career to take a year off and go back to school. One idea that is attracting interest is ''lifelong cooperative education,'' as advocated in a recent report by four M.I.T. professors of electrical engineering and computer science. The report suggests that engineers be continually educated as part of their jobs, in somewhat the same way that machines undergo continual maintenance. The universities, with industry help, could do the job, said Robert M. Fano, an author of the M.I.T. report. It would take about 10 percent of working time to take the equivalent of a one-term course every year, Mr. Fano predicted. The report suggests that new technologies such as computers and video cassettes could be used to help in training. About 200 Hewlett-Packard engineers in places such as Boise, Idaho, and Waltham, Mass., for instance, are now taking Stanford University courses on videotape. The professor's lectures are taped, then shown to the engineers at their workplace in the presence of a tutor, a company employee who is not so expert in the subject as the professor but is well versed enough to lead a discussion. Mr. Gildea said the Hewlett-Packard employees' grades were better than the regular students'. But lifelong cooperative education would require restructuring of both industry and universities. Some universities might be uncomfortable about awarding degrees to students who never set foot on campus. Yet if degrees or some other symbol of accomplishment are not awarded, there may be a tendency for students not to try as hard or for course quality to deteriorate. Professor Bailyn of the Sloan School, however, contends that lifelong cooperative education only addresses part of the problem. Even if engineers stay current, she said, there are many other barriers to their remaining engineers. After a while, she said, careers in engineering tend to stagnate because advancing higher in the corporation entails switching into management. Salaries of engineers also tend to level off after 15 years. When an engineer moves to management for those reasons, she said, it not only depletes the supply of engineers but also could add a rather weak manager. One way around this problem is the so-called dual-career ladder - one for managers and one for engineers. That enables a technical person to advance up the technical ladder without having to switch to management. Texas Instruments Inc., for instance, lists its technical fellows on its annual report alongside the names of its corporate officers. Another possible solution is for an engineer to hire himself as an independent consultant. Yet, Professor Bailyn said, the technical career ladder in practice is still not accorded the prestige of the management ladder. Some however do not think migration out of engineering is necessarily bad. ''Their training makes them good managers,'' said Mr. Sheridan of the Engineering Manpower Commission, who, like others, thinks a technological society could use more engineers in high positions. Some go even further and say that the entire profession of engineering suffers from a lack of pride and professionalism. In Japan, being an engineer is one of the most prestigous jobs, while in the United States it is often viewed as less desirable than professions such as law or medicine. Partly, this results from the anti-technology feeling widespread in the 1960's and 1970's, which is now ebbing. Indeed, engineering schools are now attracting higher-quality students than they were 5 or 10 years ago, according to Daniel C. Drucker, dean of the College of Engineering at the University of Illinois. Others say that while engineering is a profession in name, like law or medicine, it is really not one in practice. Engineers are trained as undergraduates, not in professional schools. They usually work for companies rather than being independent professionals. The result is that engineers identify less with the profession of engineering and more with their employers, leading to a desire to move up in the corporate ranks even if it means leaving engineering, noted William R. Upthegrove, professsor of engineering at the University of Oklahoma. ''The entire profession is underprofessional,'' said Samuel C. Florman, president of a Scarsdale, N.Y., construction company and author of ''The Existential Pleasures of Engineering'' and other books on the profession. Yet another area receiving attention is the utilization of engineers. It is thought that many engineers spend much of their day doing drawings, photocopying or other work that could be done by others with less training, freeing the engineers for more efficient use of their time. ''Engineers are horribly mis- and under-used'' said Irwin Feerst, who heads an organization he calls the Committee of Concerned EE's, in Massapequa, L.I. Mr. Feerst is a vociferous critic of professional engineering societies, industry and universities, contending that all of them neglect the interests of the working engineer. ''There's nothing wrong with a young person's wanting to be an engineer,'' said Mr. Feerst, ''as long as he is aware of the myths.'' Illustrations: graph of median salaries of American engineers, 1982 (page 15) drawings