Growing the
Lean Community
An LAI Plenary Conference
Aerospace Employment
and Skills:
Past Performance and
Future Projections
April 11, 2001
Presented By:
Rob Scott
Economic Policy Institute
Research Sponsored (Jointly) By Labor Aerospace Research Agenda
Lean
Aerospace
Initiative
Background
Ø Industry has lost more than 500,000 jobs
since 1990
Ø Causes: Defense Collapse (87-93), huge
surge in output per worker
Ø Output per worker rises because of
productivity growth and outsourcing
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Lean
Aerospace
Initiative
MAJOR FUTURE THREATS TO
US OUTPUT AND EMPLOYMENT
Ø Airbus
Ø Growth in Outsourcing
Ø Declining Defense Spending
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Lean
Aerospace
Initiative
OUTPUT AND EMPLOYMENT IN
THE US
Ø Declining US Sales for the Past Decade
Ø US Sales and Employment are Closely
Related
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Lean
Aerospace
Initiative
U.S. Aerospace Sales 19872001
Figure 1
US Aerospace Sales 1987 - 2001
140,000
Total, including missles, space,
parts & services
millions of constant, 1987 dollars
120,000
100,000
80,000
60,000
Civil aircraft
40,000
Military aircraft
20,000
0
1987
1989
1991
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1993
1995
1997
1999
2001e
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Lean
Aerospace
Initiative
U.S. Aerospace Employment
and Sales 1987-2000
Figure 2
U.S. Aerospace Employment and Sales 1987 - 2000
1400
130
thousands of jobs
110
Total Sales
1200
100
1100
90
1000
80
Employment
900
70
800
billions of constant, 1987 dollars
120
1300
60
700
50
1987
1988
1989
1990
1991
1992
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1993
1994
1995
1996
1997
1998
1999 2000p
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Lean
Aerospace
Initiative
THE EUROPEAN THREAT
Ø Rising Aerospace Employment and Sales in
the EU
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Lean
Aerospace
Initiative
EU Aerospace Employment
and Sales 1980-1999
Figure 3
EU Aerospace Employment and Sales 1980 - 1999
70
600
Total Sales
65
Employment (thousands)
60
500
55
450
50
45
400
40
Employment
billions of constant 1999 euros
550
350
35
300
30
1980
1982
1984
1986
1988
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1990
1992
1994
1996
1998
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Lean
Aerospace
Initiative
INTERNATIONAL OUTSOURCING
Ø Overall trade balance has increased until
recently
Ø There are also indicators of rising foreign
content of domestic aircraft.
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U.S. Engines and Parts Imports as a
Share of Total Aircraft Sales, 19812000
Lean
Aerospace
Initiative
Figure 4
U.S. engines and parts imports as a share of total aircraft sales, 1981-2000
Share of U.S. Aircraft Sales (Percent)
20
18
16
14
12
10
8
6
4
1981
1983
1985
1987
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1989
1991
Year
1993
1995
1997
1999
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Lean
Aerospace
Initiative
IMPLICATIONS FOR U.S.
AEROSPACE EMPLOYMENT
Ø Major threats include:
ØInternational Outsourcing
ØAirbus
ØProductivity Growth
ØDeclining Defense Demand
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U.S. AIRCRAFT EMPLOYMENT
FORECAST, 2000-10
Lean
Aerospace
Initiative
Figure 5
U.S. Aircraft Employment Forecast, 2000-10
700
E
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o
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m
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(thousands)
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o
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1986
1989
1992
1995
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1998
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2004
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Lean
Aerospace
Initiative
FORECAST RESULTS
Ø Low Growth Scenario: 262,000 jobs lost
Ø Falling U.S. Share of World Market: 41.5%
Ø Productivity Growth: 34.6%
Ø Falling Demand: 12.4%
Ø Rising Share of Imported Parts and Engines:
11.5%
Key Assumptions and Sources:
•
Teal Group, “World Aircraft Overview, 1999”, World Military & Civil Aircraft Briefing. Charts: “Aircraft Production, Civil and
Military” and “The Big Aircraft Builders”
•
Boeing, “World demand for commercial airplanes,” Current Market Outlook, 2000.
•
All demand forecasts scaled up to equal total Aircraft, Engines and Parts Sales, as reported in Aerospace Industries
Association, 2000 Year-End Review and Forecast.
•
Direct employment losses estimated using the Bureau of Labor Statistics “Employment Requirements Table, 1998.” Two
percent annual productivity growth from 1999 through 2010 assumed in all scenarios.
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Lean
Aerospace
Initiative
SKILLS STRUCTURE OF THE
US AEROSPACE INDUSTRY
Ø Skilled production, professional specialty,
and technician jobs predominate
Ø Earnings are substantially higher than in
most other manufacturing industries
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Lean
Aerospace
Initiative
Aerospace Employment by
Occupation
Table 1
Employment of wage and salary workers in aerospace manufacturing by occupation, 1998
(Employment in thousands)
All occupations
Precision production, craft and repair
Machinists
Inspectors, testers, and graders, precision
Blue-collar worker supervisors
Aircraft mechanics and service technicians
Aircraft assemblers, precision
Electrical and electronic equipment assemblers
Professional specialty
Executive, administrative, and managerial
Operators, fabricators, and laborers
Administrative support, including clerical
Technicians and related
Service
All other occupations
Number
615
174
29
25
22
19
16
11
137
112
87
54
40
8
4
Percent
100
28.2
4.7
4
3.6
3.1
2.7
1.8
22.3
18.1
14.2
8.9
6.4
1.3
0.6
Source: Bureau of Labor Statistics, Career Guide to
Industries, Aerospace Manufacturing,
http://stats.bls.gov/oco/cg/cgs006.htm
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Lean
Aerospace
Initiative
CHANGING DEFENSE PRIORITIES
Ø Implications for Aerospace employment:
ØProcurement freeze and shift from aircraft
to Strategic Defense Initiative has
significant implications for the industry
skills mix
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Lean
Aerospace
Initiative
Skills Comparison Across
Aerospace Sectors
Fg
iure6
SelectedAerospaceIndustrySkils,1998
35.0
30.6
30.0
29.4
Share (percent)
25.0
20.0
15.0
10.0
14.9
13.3
15.7
13.7
7.6
5.3
5.0
1.2
7.2
1.6
6.8
3.0
6.2
5.9
2.8
5.9
3.9
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17 - Team Initials/Presenter - 041001 © 2001 Massachusetts Institute of Technology
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