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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)

 

U.S. Aerospace Manufacturing: Industry Overview and Prospects
Michaela D. Platzer, Specialist in Industrial Organization and Business
December 3, 2009
http://opencrs.com/document/R40967/2009-12-03/download/1013/
[full-text, 13 pages]

 

Summary

Aircraft and automobile manufacturing are considered by many to be the technological backbones

of the U.S. manufacturing base. As the Obama Administration and Congress debate how to

strengthen American manufacturing, aerospace is likely to receive considerable attention. Like

other manufacturing industries, the worldwide recession has affected aerospace manufacturing,

with both the defense and commercial sides of the industry facing difficult business conditions for

the near and medium term. This report primarily provides a snapshot of the U.S. commercial

(non-defense, non-space) aerospace manufacturing industry and a discussion of major trends

affecting the future of this industry.

 

The large commercial jet aviation market is a duopoly shared by the U.S. aircraft manufacturer

Boeing and the European aircraft maker Airbus, with fierce competition between these two

companies. The regional jet market is dominated by two non-U.S. headquartered manufacturers,

Brazil’s Embraer and Canada’s Bombardier, both of which utilize a high level of U.S.-produced

content in their products. The general aviation market includes companies such as Cessna and

Gulfstream.

 

Aerospace manufacturing is an important part of the U.S. manufacturing base. It comprised 2.8%

of the nation’s manufacturing workforce in 2008 and employed over 500,000 Americans in highskilled

and high-wage jobs. More than half (61%) of the nation’s aerospace industry jobs are

located in six states: Washington state, California, Texas, Kansas, Connecticut, and Arizona.

Several smaller aerospace manufacturing clusters are found in states such as Florida, Georgia,

Ohio, Missouri, and Alabama. Other aerospace centers are beginning to emerge in southern states,

such as South Carolina, where Boeing is now building a second production line to produce the

787 Dreamliner. Aerospace manufacturing contributes significantly to the U.S. economy, with

total sales by aerospace manufacturers (including defense and space) comprising 1.4% of the U.S.

gross domestic product in 2008.

 

U.S. aircraft manufacturers depend heavily on the international market for their sales. The

aerospace industry sold more than $95 billion in aerospace vehicles and equipment (including

defense and space) to overseas customers in markets such as Japan, France, Germany, and the

United Kingdom, and imported over $37 billion in aerospace products from abroad, providing a

significant positive contribution of $57.7 billion to the U.S. trade balance in 2008. Increasingly,

other markets are becoming important as an opportunity to increase U.S. sales, but also because

of the potential for future competitors to challenge the U.S. aerospace industry’s competitive

position. U.S. aerospace exports to China have increased since 2003, totaling $5.5 billion in 2008.

At the same time, some analysts maintain that China could become a global competitor in the

commercial aerospace market. Already, China is working to develop airplanes that could become

globally competitive in both the regional jet and large commercial jet aviation market. Russia has

stated that it wants to become the world’s third-largest aircraft manufacturer by 2015.

 

Congress has been discussing issues affecting the competitiveness of the U.S. aerospace

manufacturing industry for most of this decade. Among the concerns and issues affecting the

future of the commercial sector of the industry are export control policies, environmental

concerns, and an aging aerospace workforce. Additionally, the United States and the European

Union are engaged in a long-running trade dispute over subsidies, with each side claiming the

other subsidizes its domestic companies.

 

Contents

Introduction ...............................................................................................................................1

Aerospace Manufacturing Industry Overview..............................................................................1

Aerospace Manufacturing Workforce ....................................................................................1

Economic Impact of Aerospace Manufacturing .....................................................................2

Aerospace Trade ...................................................................................................................3

The Commercial Jet Aircraft Market .....................................................................................4

The Regional Jet Market .......................................................................................................6

The General Aviation (GA) Aircraft Market ..........................................................................7

Potential Future Competition in the Aircraft Manufacturing Sector ..............................................8

Public Policy Issues ....................................................................................................................8

Export Controls.....................................................................................................................9

Environmental Concerns .......................................................................................................9

Aerospace Workforce Issues..................................................................................................9

Tables

Table 1. Boeing and Airbus Net Orders and Deliveries, 2000-2009..............................................5

Contacts

Author Contact Information ......................................................................................................10

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
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16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
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