demise of aerospace, The

Flight Journal, Dec 1999

Since 1989, more than half of the workers in aerospace have lost their jobs. In any other business, this would be considered a national disaster. In modern America, it is a "peace dividend."

American aerospace is headed for a crash. In an effort to justify ever shrinking defense budgets, the government is holding on to the notion that no new military aircraft designs will be needed for at least 30 years. At the same time, existing programs are being cut or canceled. The policy seems to be to spend the absolute minimum required to just barely win a future war. The national-security implications of this policy are frightening. We can pay now in gold or later in blood.

The current administration has also forced a dramatic consolidation within the industry. In 1990, there were eight prime airframe contractors in the U.S. Now, there are two (or three, if you still count Northrop Grumman). The companies that built the majority of the aircraft now in service with the U.S. military have gone.

CEOs and boards of directors are under enormous pressure from Wall Street to deliver short-term financial performance. When combined with an executive compensation scheme that emphasizes stock price as the goal, the result has been devastating.

In an industry in which product cycles are measured in decades, short-term thinking and cost-cutting rule the day. Layoffs and plant closures are everyday occurrences.

Irreplaceable facilities are being destroyed to reduce overhead. One company has already bulldozed two wind-tunnel facilities. As this is being written, its last wind tunnel is slated for destruction within a year. The same company has just disposed of its technical library, claiming that it cost too much overhead and "... all that information is on the Internet." The same week, most engineers had their Internet access revoked to reduce "data-processing overhead costs" by saving $7 per person per month. (The executives' bonus budget the previous year exceeded $150 million, and the company bought a shiny new Citation X bizjet to ferry them around.)

The result is a profound malaise within aerospace engineering. The spirit of innovation that led American aerospace to a world-dominating position is fast dying. It has been buried under a pile of financial spreadsheets formulated by "business"-oriented people whose knowledge of aircraft does not extend beyond the first-class cabin.

We are in danger of losing the technical capability to design successful airplanes and spacecraft. Engineering is taught by an apprenticeship system. A new graduate with an engineering degree is not yet an engineer. Real engineering is learned by working with experienced people. It takes about five years for the "apprentice" to gain enough experience to be a full-fledged engineer. It takes much longer to achieve the ability to lead a design effort.

The demographics of the workforce herald trouble. The average age of working aerospace engineers in the U.S., according to one source, is 49. There are very few young people because the industry has been shrinking rather than growing for the last 10 years.

Ahead is a die-off of knowledge. Within five years, half of the engineers currently working in aerospace will be eligible for retirement. Most will take it, since current conditions leave little reason to stay.

By then, the remainder will be nearing 50. If they have not already been laid off, they will be planning to work for at most another five to seven years. This is just barely time to train successors before they, too, have gone.

Unless things change dramatically within the next five years, we can look forward to a shrunken aerospace industry populated primarily by inexperienced people. They will not have worked on actual flight hardware and will have had little or no time to learn from the old hands.

This may not be the worst case. We may not have many engineers at all. Most of the incentives that attracted my generation into aerospace engineering have gone. We wanted to build flying machines. We knew that we wouldn't get rich doing it, but we expected interesting work, a reasonable standard of living, a bit of respect and, eventually, a pension. All of this has changed.

Few programs survive to build hardware. When a program does go forward, the result is painfully predictable. Before first flight, the buy will be cut and the program stretched to "save money." When the cost increases caused by the stretch-out appear, the politicos shift their attack to the unit cost and question the need for the program. The airplane will be attacked as too expensive, unnecessary and technically flawed. No matter how successful the machine, the headlines tell the public that it is an expensive failure.

In such an atmosphere, it is hard to fault management for refusing to make an investment. If a program is more likely to be canceled than to survive, it is not worth the investment it takes to win the contract. The interesting assignments are few and far between. Modifying 40-year-old airframes to carry new avionics does not inspire.