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THE PRESENT ENVIRONMENT 70 developing countries have identified their civil aviation sectors for special support. These governments recognize that establishing a technology base in design and production is a mandatory concomitant of achieving commercial viability, and they will do whatever is necessary to create that base. The growing importance of international markets increases the likelihood that control of access to markets will be used as a lever for increasing participation in manufacture. The comparative technological position of foreign firms will almost inevitably improve. Consequently, it is no longer realistic to assume that leadership in virtually all aspects of aircraft design and manufactureâwhich the United States enjoyed for many yearsâwill continue to be sustainable. Internationalization of manufacture may well continue to grow, and the United States must recognize and accept the likelihood of foreign parity or leadership in some aspects of aircraft technology development and production. Preserving the viability of the U.S. companies capable of being systems integrators in developing, designing, manufacturing, and selling new aircraft is the key to preserving the critical mass of the infrastructure required for national security and for competitive leadership. Thus, initiating the actions that will retain the United States' overall technological leadership in a matrix of international cooperation requires special attention. It is important for the managers of the civil aircraft industry and of the supporting industrial substructure to determine those aspects of development, design, and production that are critical to maintaining competitive leadership. They must then allocate resources selectively to achieve that objective. How these choices evolve is a matter of private and public concern warranting careful attention. Exercising this kind of selectivity is complex and frequently involves painful choices, but in the face of the emerging international competition it cannot be avoided. Managing international interdependence in technology in a way that preserves overall leadership will call for vision and wisdom by U.S. managers in an arena in which they have had relatively little experience. PRESERVING HUMAN RESOURCES Civil aircraft manufacture demonstrates in extreme form the characteristics of a cyclical industry with high labor content. Abrupt variations in equipment purchases by both DOD and the airlines exacerbate the changes in volume. This characteristic of the industry imposes especially severe employment uncertainty on the skilled workers who design, test, and produce sophisticated
THE PRESENT ENVIRONMENT 71 modern aircraft, Technological obsolescence creates an additional element of uncertainty for the work force, For example, the introduction of new materials and processes, new production and assembly technologies, and methods of testing and quality control often generate a requirement for radically different skills. In the past the U.S. industry has responded to such change or cyclical fluctuations in orders by hiring or laying off production workers, engineers, and managers in pace with need. Foreign industries, constrained by laws and social practices, have tended to avoid expanding employment to meet demand peaks, have subsidized employment at low demand, and have in some cases resisted pressures for technical change that would increase productivity, Fortunately, U.S. workers and labor unions in the industry have long recognized the vital role of new technology in maintaining the health of this industry. In the heightened competitive climate of the aviation industry it is exceedingly important for management and workers and their union representatives to strengthen the dialogue on the introduction of new technology. Worker concerns over displacement, loss of income, and erosion of skills, if not adequately addressed and if blamed on technology, can turn into resistance to change that would be detrimental to the competitive position of the industry. The growing awareness of the important contribution that workers can make to improved productivity and quality, when they feel that they have truly participated in the process of technological innovation, represents a powerful opportunity for the industry to strengthen its competitive position. The assemblage of human skills and working team relationships in the aircraft manufacturing industry represent a priceless and irreplaceable national resource. A deterioration in financial performance or a long gap in the development and launch of new aircraft would seriously threaten the survival of these teams. If they were dispersed, the loss would be severeâpossibly irretrievable. The United States has not yet developed adequate mechanisms with which to dampen cyclical unemployment. Furthermore, the social and economic costs such unemployment generates are neither adequately quantified nor incorporated into the calculation of the economic contribution and performance of the industry. The fact that the timing of procurement for defense also makes no allowance for employment stability only exacerbates the problem. This is much less true in other countries. It is apparent that a major consideration in the drive of other governments to establish an indigenous aviation industry is the attractive employment level and skill content associated with aircraft manufacture. They also recognize the synergism between civil
THE PRESENT ENVIRONMENT 72 and military aviation. Such governments give high priority to employment stability, and they calculate the full social and economic costs of unemployment when negotiating sales and trade agreements. These costs, in fact, become a factor in setting prices, terms, and conditions for sale of aircraft. The goal is to achieve a more nearly level production rate and increased production efficiencies for these foreign manufacturers. If foreign manufacturers deliberately limited their market penetration to a level compatible with stable employment (a not unlikely scenario), U.S. manufacturers would be left to accommodate the even more cyclical portion that remained. U.S. manufacturers, no matter what they might wish, lack the resources to stabilize their production rate. Nor are they responsible for, or in a position to reap fully, the associated social and economic benefits that accrue to the nation from more stable employment. Some panel members believe that the mechanisms that other countries have established to ameliorate employment instability have imposed increased rigidity on their operations, reduced the ability of management to respond rapidly to changing competitive circumstances, and in turn resulted in restraints on technological innovation in the workplace. They fear that these stabilizing mechanisms would have the same inhibiting effect on the United States. Consequently, the desire of U.S. industry to maintain technological momentum and to avoid these disadvantages suggests the need to search for solutions less penalizing than the political and economic solutions being used in other countries. Other panel members, however, suggest that increased employment stability creates a more favorable environment for technological innovation in the workplace, and that the social and economic benefits of employment-stabilizing policies more than offset the costs of any increased operating rigidities. Among the problems that need urgent attention are: ⢠Retirement securityâDue to the large variations in employment, workers can complete an entire career in aircraft manufacture and never accumulate enough time with one employer to qualify for an adequate pension. It is reasonable for management, workers, and government to give specific attention to the development and implementation of policies and programs that allow workers to accrue retirement benefits commensurate with their employment experience, not just their attachments to individual employers. ⢠UnemploymentâIt is a responsibility of management, workers, and government to develop instruments that minimize employment instability and ameliorate, insofar as possible, the costs of periodic job loss, a condition that has been characteristic of the industry. The "migrant" skilled worker phenomenon has not yet been adequately addressed.
