Industrial base studies nearly always cite the present moment as a critical period in which one faces decisions fraught with consequences. They are not always right about this, but, in the case of the industrial base supporting American airpower today, they are dead on. Momentous change did in fact occur in the year 2009, and that meant the United States military does face decisions fraught with consequences.
Back in 2008, a report from members of the blue-chip Defense Science Board outlined a coming crisis that would be felt across the defense industrial base. The key danger of that postulated crisis was that, “while competition still occurs between a few firms in each sector,” the US federal government “can no longer benefit from a highly competitive defense market.”
And that warning was issued well before Black Monday, April 6, 2009. On that date, the Defense Department announced a set of decisions affecting the Fiscal 2010 defense budget. These amendments called for termination of several critical defense aerospace programs, including the F-22 fighter, the C-17 airlifter, and the so-called Next Generation Bomber.
With these moves, the aerospace industry’s top customer more or less decamped from a significant share of the fixed wing military aircraft market. As a result, major risk now suffuses the entire aerospace industrial base. The question is to what extent the nation can manage that dramatically enlarged risk and keep it from doing serious harm to future national security.
B-25 bombers on the production line during World War II.
Consider the changes that now are in store:
The reality could not be clearer. The American arsenal of airpower, once a massive and thriving entity, has passed through a permanent transformation. This fact of life will exert an outsize impact on the Air Force, not to mention the Navy, Marine Corps, Army, and allies, as more and more aerospace workers exit the industry.
The huge Bush Administration defense “spending spree” of the early 2000s did little to stimulate development of the next generation of military aircraft. Military spending was focused heavily on the here and now—the re-equipping and resupplying of forces, including air forces, fighting in Iraq and Afghanistan. It was money that was expended, intentionally, on the present, not on the future.
Elements for Success
Dwindling major programs will unravel the decades-long process used to sustain US airpower. It is not simply a matter of running fewer programs for a smaller force. Major programs lie at the heart of everything from design innovation to training and seasoning of engineers and production specialists to sustaining company profits and investment. They provide the core of design teams, highly skilled production workers, and line managers who know how to move projects from computer screen to flight line and who constitute the most precious resource of the industry. The loss of major programs—and the people who work on them—creates a new level of uncertainty about whether the core elements driving the industry will even survive.
A C-17 over the Atlantic Ocean.
For six decades, industry was able to draw from a rich pool of talent. This may be ending, because two major changes are in motion.
First, the number of major fixed wing aircraft programs will fall as production lines close.
Second, there are few plans for new starts, which will curtail the number of programs reaching “first flight” in the 2010-19 decade. Together these facts will significantly reduce capacity and output across the industry. They lead inexorably to a decline in number of programs, and programs are key. Programs engage prime manufacturers as well as a range of partners and suppliers in large, productive ventures.
To view the industry from the standpoint of its programs is to gather the elements for success: customer demand and manufacturer supply. As programs diminish, jobs will also be lost and, with them, capacity. Major programs provide the primary conduit for extensive new hires of both professional and production personnel. Fewer programs will mean that fewer aerospace engineers and production specialists will be trained and gain the years of experience needed to generate new designs and run production lines efficiently. Education in science, technology, engineering, and math is an important part of this development, but equally critical is what happens to the individual worker long after he or she has left high school.
Over the century of US military aviation, business activity has been cyclical, with certain patterns coming, going, and then coming back again. However, the market has not seen indicators of a down cycle of this magnitude since 1920. That cycle lasted for some two decades, and ended only with the onset of World War II and its demand for vast numbers of military aircraft. Simply put, the model which has produced the American edge in airpower from P-51s to F-22s will start going out of business in 2011. Barring new serious and unforeseen threats, the program-driven model of innovation is unlikely to return.
The traditional model—innovation by competing major programs—actually evolved out of a pre-World War II period of aircraft development.
It is worth considering how World War II’s rapid growth was achieved. In retrospect, it appears that the United States mostly got lucky.
First, the growth was led by strong government investment and clear-cut direction. Plans came from the top: It was President Roosevelt himself who gave the order, in a famous speech, for the US to begin producing 50,000 airplanes per year.
Second, the technology of the day permitted rapid transfer of personnel from one metal-bending industry to the next. Much of the growth occurred by transferring engineers and production specialists from other disciplines and factory lines. Perhaps the most dramatic example was that all production of cars for civilians stopped in 1942.
Third, the American economy had ample unused capacity and therefore lots of room to expand rapidly. The storied production surge was possible in part because of the latent manufacturing capacity in the American economy. The late 1930s were still recession years with lower production. The US also had a much bigger population base than most of the other belligerents.
A YB-49 Flying Wing shown during a test flight. In 1981, the contract for a stealth bomber—later the B-2—was awarded to Northrop Grumman, which had not built a bomber since the 1940s.
Fourth, aircraft producers were able to tap excess labor. The lingering effects of the Great Depression had kept unemployment high. The growing aircraft industry was able to absorb many of these workers. The aerospace industry also hired more than half a million women to fill out its workforce. Transferable skills and an ability to break jobs down into tasks for which workers could be trained quickly were key. Workers eventually rewarded their employers with significant productivity gains as hours required to manufacture aircraft types plummeted from 1943 onward.
The results were amazing. In 1939, the US produced a measly 5,865 aircraft. From January 1940 through Aug. 14, 1945, America produced 303,717. That stupendous growth gave birth to the aerospace industry of today.
The last 129 major military fixed wing aircraft programs (for the Air Force and Navy) have much to tell about the workings of the industrial base. Consider the tally of first flights from 1950 on.
Getting a new aircraft to first flight represents the prowess of a design team, notwithstanding the ultimate production decisions or the fact that many first-flight articles demanded months or years of additional work to achieve production readiness. However, the fundamental measure of merit, over time, is the ability to innovate and meet new requirements. In this, programs are a valid measure.
Overall trends are dramatic. Of the last 129 programs, only 20 achieved their first flights in 1990 or later. Among these are standouts such as the two Advanced Tactical Fighter competitors—the YF-23 and YF-22 (later F-22).
It gets worse. A mere nine of those 129 programs reached first flight in the 2000s, beginning with the two F-35 X-plane candidates in 2000 and ending with the Boeing P-8A Poseidon in 2009. There were four different companies represented in the 2000s, including relatively new entrant General Atomics.
(These programs included major designs and modified designs in which substantial alterations were made. For example, the F/A-18A/B/C/D, the F/A-18E/F, and the F/A-18G are posted separately. However, the F-16 is counted just once despite its numerous and highly effective block upgrades.)
The chief criterion for inclusion was that the aircraft made first flight. Accordingly, the ill-fated Navy A-12 is absent, while the secret Tacit Blue aircraft is included because it made 135 test flights in the early 1980s.
Pan wide and it is easy to see why the lack of programs moving ahead worries so many. Distribution of work in the past spread a few new programs nearly every year among a base of more than a dozen companies. Top suppliers delivered a large number of new models. Grumman, for example, delivered 12 aircraft to first flight, from the derivative F9F-6 Cougar in 1951 to the X-29 in 1984.
Two YF-23 prototypes, which later lost out to the YF-22 in the Advanced Tactical Fighter competition, head out over the Mojave desert.
The diminished number of first flights represented the culmination of several trends, and the impact of this dramatic slowdown can be seen by reviewing one of the most successful program-based rivalries of all time.
From the early 1970s through today, those two firms—Lockheed and Northrop—have squared off against each other in highly directed competitions to develop stealth aircraft. They dominated the race until Boeing re-entered the fray in the mid-1990s. The competition started with the first prototype stealth fighter in the 1970s and has continued with concepts for a next generation bomber for 2018 and beyond. Along the way, the two medium-size aircraft manufacturers founded prior to World War II became two behemoths, Lockheed Martin and Northrop Grumman.
Keeping them as competitors was deemed so important that the US government nixed their proposed merger in 1998. The competition between these two leaders of advanced aircraft development has illustrated the key role of program-based competition in the health of the aerospace industry. The government encouraged each contender through ongoing contracts and a steady pace of new program work.
Lockheed made early strides with faceted aircraft such as the concept demonstrator that became the F-117. Northrop pursued curved shapes that owed much to the design team’s background in radar phenomenology and cruise missile shape reduction. Setting up a competition of facets vs. curves greatly oversimplified the problem but led to different approaches in significant features such as airframe design and application of radar absorbing materials.
The competition did not stop after Lockheed beat Northrop for the F-117 program. Northrop continued to work on a government contract for a battlespace control aircraft later named Tacit Blue. Each company had one win under its belt and felt it had narrowly lost to its rival when they squared off for a stealth bomber design.
In 1981, the B-2 stealth bomber program was awarded in great secrecy to Northrop—a contractor that had not built a bomber since it produced a few prototypes of the YB-49 Flying Wing in the 1940s. Production of the B-2 stimulated computer-aided design, composite fabrication, and a host of other developments across the aerospace industry.
An engineer on the winning Northrop team specifically credited the previous years of work as preparation for the victory. “We knew more about predicting radar cross section of three-dimensional shapes than anybody in the world because of the Air Force contracts experience,” he said.
The F-22 production line. Lockheed Martin was awarded the Advanced Tactical Fighter contract in 1991, and six years later the first production F-22 flew. (Lockheed Martin photo)
In the end, the Lockheed and Northrop bomber designs were distinct, just as intended. Lockheed gambled on a medium-size aircraft, while Northrop committed to a big, long-range bomber, and in those choices lay a key discriminator. “Because our airplane was designed to be smaller, the control surfaces on the wing were smaller, too, which meant we needed a small tail for added aerodynamic stability,” Lockheed Skunk Works honcho Ben R. Rich later explained. “Northrop had larger control surfaces and needed no tail at all,” Rich said, and that helped propel it to victory.
The momentum of competing design teams with nearly a decade of experience made it possible to then take on the immense challenge of a supersonic stealth fighter.
The Advanced Tactical Fighter was by far the toughest program in the stealth family. Both Lockheed and Northrop had studied the problem of a supersonic, stealth fighter in the late 1970s and found it to be extremely demanding. However, the Air Force took the plunge. In the early 1980s, it funded work on an ambitious set of requirements for the program later known as the F-22.
Industry was strong enough to handle it. The 1990 flyoff between Lockheed’s YF-22 and Northrop’s YF-23 again pitted two different philosophies against each other. Lockheed’s fighter emphasized maneuverability. Northrop’s elongated YF-23 offered significant stealth and range. In a mirror image of the airframe competition, the Air Force also tested a Pratt & Whitney engine against a General Electric engine.
The Air Force customer was left with a pleasant choice of aircraft with superb capabilities. Ultimately, the YF-22 was chosen in April 1991. The first production F-22 flew in 1997.
This time-proven system of keeping skilled competitors in the game is now in peril. Of course, the former rivals Lockheed Martin and Northrop Grumman are now teamed (along with BAE) on the F-35, but the decline in the aircraft procurement funding stream has been perhaps the single biggest factor leading to the recent narrowing of the aerospace industrial base. Beyond this, it illustrates that market forces are not given a free rein in determining procurement priorities.
The second factor that has undermined the power of market forces is the time lag from strategy development to program execution. In theory, national defense strategy drives spending (and shapes the market). In practice, there are more steps to the process, which takes more time, and they are critical to segments of the aerospace industrial base.
By the time programs reach production, national strategy often has become a blunt instrument to cut or curtail the program. The effect of termination is almost uniformly negative. Money and control dissipate. Program termination typically involves a contractual liability to pay fees to the prime contractor to defray costs. Cutting production short can involve similar contractual obligations. Termination frees up money, but it is typically production money that, by law, must be spent on production for other systems, sometimes in a very short time frame. In this case, there is little chance of taking large sums budgeted for production and transferring them to R&D accounts, for example.
Finally, it is important to note that this unusual “market” delivers not only aircraft but a second, vital byproduct. That byproduct is made up of the engineers, production workers, and experienced managers trained on a career of moving from one large program to the next.
Decisions under way will make it very difficult for the government to again compete two “dark titans” against each other to pursue distinct, innovative approaches to aircraft design. The problem is not just that firms may exit a market. Companies have moved in and out of fighter and bomber and transport production before. But the reason they could shift gears rested in part with having a pool of seasoned aerospace workers close to hand. Already, this capacity has shriveled.
Layoffs and retirements will shred much of the workforce, and major changes will start soon. Take the case of the C-17 production line in Long Beach, Calif. The line began in 1988 and has continued with constant improvements since. Much of the old tooling has been replaced, and just as important, workers continually evaluate better ways to accomplish tasks. The average worker on the C-17 line is more than 50 years old, with 20 years’ experience in aircraft production. Layoffs will begin as production winds down, and those C-17 workers looking for jobs after 2011 will not have the choices available to their West Coast counterparts of earlier decades. Military production on UAV lines continues at Northrop Grumman, General Atomics, and others. Commercial aerospace work is under way on the 787 in Seattle. But for most, the options are limited. A permanent share of capacity will be lost as these experienced workers move on.
An artist’s conception of a hypersonic global strike and global persistence attack aircraft.
Most corporations that successfully brought disruptive technologies into the active Air Force inventory were also working on aircraft with direct market application and, hence, customer encouragement. Northrop committed to the B-2 while at the peak of its F-5 sales. It invested in Global Hawk in an era rich with work on B-2 modifications and with F/A-18 work as a major supplier. Lockheed saw the F-22 through while maintaining a robust F-16 line. The No. 1 disruptive aircraft of late—the MQ-1 Predator—was developed by one of the very few remaining privately held companies in the industry, General Atomics. Not that the senior management of General Atomics was blind to profit-and-loss considerations. But their diversified corporate structure and ability to invest and aggressively market the MQ-1 and later the MQ-9 more closely resembled the 1930s aerospace innovators.
From these examples, it is apparent that the tension between disruptive innovation and sustaining technologies is a major characteristic of the industry. It is also the breach into which the government customer must step with a balanced agenda.
Lack of programs has now put that assumption in doubt. While it is far too early to declare the industry to be in a death spiral, it is time to take a firmer hand in extracting the seeds of innovation from a much narrower base.
The best way to illustrate this is to conclude with a final story—an important one. It concerns the dawn of the jet age.
The jet age shaped military and commercial aviation more than perhaps any other single development since the Wright brothers took off on the morning of Dec. 17, 1903. Today, the advances of jet propulsion have definitively separated American fighters such as the F-22 from Russian or Chinese rivals, pushing US aircraft far ahead.
Yet the early history of the jet engine in America was a difficult one. The most advanced research took place in Germany and Britain. Research began in earnest on the eve of World War II. Germany had pulled far ahead and managed to fit jet engines on the Me 262 before the end of World War II. Desperate efforts to halt German jet fighter production drove US planners to strike at some of the toughest targets of the strategic bombing campaign in the European Theater of Operations. The US had secret prototype jet aircraft, yet no American-made variant flew in combat in that war. Basically, the jet engine was still so complex and raw that there was doubt about investing in it, given the wartime needs for immediate production.
Had airmen adhered to the standards of investing only for “the wars we are in,” would the considerable research and development for the jet age have continued? While propeller-driven fighters such as the P-51 and the Marine Corps F4U Corsair saw service in Korea, it was the F-86 that matched the nimble MiG-15s over the Yalu River.
War is a mighty driver of innovation, yet it is not the only litmus test of sound aeronautical development. It takes a longer view of technology and military requirements to set a successful research and development program. That view resides in the various armed services.
Rebecca Grant is president of IRIS Independent Research, a defense consulting firm in Washington, D.C., and also serves as director, Mitchell Institute. Her most recent article for Air Force Magazine was “A Specter Haunts the Carrier,” which appeared in the December 2009 issue. This article is adapted from her paper, “The Vanishing Arsenal of Airpower,” published by the Mitchell Institute for Airpower Studies.
Daily Report: The day's top news on the US Air Force, airpower, and national security issues.
Daily Report: Read the day's top news on the US Air Force, airpower, and national security issues.
Tweets by @AirForceMag