The Competitive Status of the U.S. Civil Aviation Manufacturing Industry: A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1985)

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OVERVIEW OF THE U.S. CIVIL AVIATION MANUFACTURING INDUSTRY 24 industry and contributes substantially to the overall strength and competitiveness of the U.S. economy. Furthermore, the experience gained from operating and maintaining a large, heterogeneous, intensively utilized commercial air fleet in itself constitutes a valuable technological resource that contributes to the national economy and security. These are some of the very reasons that foreign governments, both developed and developing, have targeted aviation as an important component of more general economic development programs.2 TABLE 1-5a U.S. Civil Aircraft Imports, 1978–1983 (millions of dollars) 1978 1979 1980 1981 1982 1983 Civil aircraft 284.5 508.6 969.1 1,336.2 1,266.0 892.2 total Transports 58.1 199.8 285.5 195.5 231.4 188.0 General 146.8 260.4 495.8 913.0 837.7 541.9 aviation Helicopters 28.0 21.6 53.9 105.4 84.9 89.5 Other 51.6 26.8 133.9 122.3 112.0 72.8 Civil aircraft Engines and — — 534.7 1,407.3 1,255.9 1,074.0 parts SOURCE: U.S. Bureau of the Census, Schedule B, Commodity by Country. TABLE 1-5b U.S. Civil Aircraft Exports, 1978–1983 (millions of dollars) 1978 1979 1980 1981 1982 1983 Civil aircraft 6,018 9,772 13,248 13,312 9,608 10,595 total Transports 2,558 4,998 6,727 7,180 3,839 4,683 General aviation 496 650 739 790 517 356 Helicopters 156 207 299 346 206 232 Other 277 875 556 784 783 420 Civil aircraft Engines and 2,116 3,220 4,436 3,915 3,997 3,954 parts SOURCE: U.S. Bureau of the Census, Schedule B, Commodity by Country. CONTRIBUTION OF THE INDUSTRY TO NATIONAL SECURITY A recent U.S. Office of Science and Technology Policy (OSTP) study highlighted the importance of aeronautics to national security.3 Among the key findings of the study were the following: • The United States depends heavily on technical superiority of military aircraft for national defense—approximately one-third of the Department of Defense (DOD) budget is for procurement, maintenance, and operation of aeronautical systems. 

OVERVIEW OF THE U.S. CIVIL AVIATION MANUFACTURING INDUSTRY 25 • A healthy, competitive civil aeronautics manufacturing industry reduces the cost of providing an essential military industrial base and wartime mobilization surge capacity. The contribution of civil aircraft manufacture to the military industrial base is provided principally in two ways. First, the teams that could develop and apply new design and production technology to new military aircraft are kept in a high state of readiness by the continuing requirements of the civil market, which in normal times accounts for some 80 percent of the total production weight of aircraft produced. The design and production techniques and systems developed in civil operations can be, and are, transferred to the defense sector. Second, the massive production base that is marshalled to manufacture civil aircraft is available as a wartime surge capacity. The many diverse items needed to manufacture a modern jetliner involve contributions from some 15,000 components manufacturers and materials suppliers. The items range from complex subassemblies and engines to avionics, electrical equipment, hydraulic and mechanical equipment and interiors, to nuts, bolts, and rivets. The skills and equipment needed are easily adapted to the production of military aircraft. Military requirements for new aircraft would not in themselves provide a sufficiently stable load to maintain the design and production teams in an adequate state of readiness for emergencies. The deterioration or disbanding of these teams would represent a strategic loss that would not quickly be repaired, no matter how serious the emergency. In addition, the cost benefits that come from shared overhead would be lost. These teams include not only the most visible top layer of scientists and engineers associated with design, but also thousands of skilled design, development, and production specialists working on such things as the development and production of components, sophisticated materials, advanced propulsion systems, electronics, controls, communications, and machine tools, as well as tens of thousands of skilled production workers. This vast network remains viable only if it is constantly challenged and employed. Civil aircraft manufacture provides the base load of work for this network. Civil aviation manufacturing also provides available, off-the-shelf aircraft for mission support for U.S. defense. Furthermore, the competitive drive for efficiency stimulates improvement in the productivity of this infrastructure by devising new machines and techniques for production, from which the military establishment also can benefit. This improvement occurs, of course, only if the aircraft industry is sufficiently profitable to be able to afford new equipment and training. This readiness-to serve capability helps reduce the start-up costs and time that