Labor Day 2009 (Part 2 of 3)

Partly cloudy skies...

While preparing the previous thread, I came across some material, which is moderately encouraging. I wish it were more dramatically so, but the fact it was not all bad news, is in itself, encouraging

As bleak as things might seem, Reuters, Aug 24 reports:

"U.S. aerospace and defense firms are expected to cut about 30,000 jobs in 2009, or about 4.5 percent of the workforce, and layoffs are likely to continue in 2010, according to a study by Aviation Week and several industry associations.

"The group's annual workforce survey concluded that total job losses in the sector could reach 10 percent, but said that was still far below the 40 percent cut seen after the end of the Cold War, when defense spending was pared back sharply."

Frankly, I was somewhat surprised to see the losses were -only- 4.5 percent. That's not much comfort to anyone in that 4.5 percent group, but it's encouraging to know 95.5% of the aerospace workforce is still employed. The good news for our friends in the 4.5 percent group is, turnover is typically several percent at most companies, potentially creating openings for many- theoretically almost everyone who is out of work. Things won't quite work out that way for all, but hopefully, it will for some.

The 10 percent number of potential cutbacks is also a mixed bag; growth would be good news, but "only" bottoming out at 10 percent reduction, is 400 percent better than bottoming out with a 40 percent reduction. (Lots of percentages/statistics there- some saying about statistics and the people who use them...but still, moderately encouraging news).

While the general economy slowly improves (some), there are pending developments which might bring good news.

The Air Force KC-X tanker program is being re-competed, with a new Request for Proposal expected soon. Some opine that the World Trade Organization ruling against Airbus might favor a Boeing bid, and create jobs more US jobs than a Northrop-Grumman/Airbus venture (sorry for our friends in Europe). On the other hand, I've heard the opinion that the only way there will EVER be a new tanker program, unencumbered with legal protests, is for the pentagon to award both teams a contract, presumable for a smaller, and a larger, version. (And with mid-term elections coming up, that would give politicians the opportunity to create even more jobs, with two programs. Oh, I forgot- the process is not political... :).

Also, from the Reuters article, "Retirement eligibility was expected to increase from 13 percent this year to 18 percent in 2011 and 20 percent in 2013, compared with just 5.7 percent in 2008." This seems like a HUGE pending opportunity. Again, actual realization will be somewhat less than desired, as with many 401K's being temporarily (or worse) down, many who could retire will elect to wait. But- many will not.

The 787 -might- evolve from a delightful parade float (especially if you have 80 knot parades or so), to an actual flight article (even if the management at Boeing has to borrow the Goodyear blimp to "float" it before the end of the year). Hopefully, there will be some jobs created by this program next year.

The U.S.Army Airborne Common Sensor platform -might- get going. (Or not, right away, anyway). But, it's been in the works for 10 years, without being cancelled outright, so there is some traction out there for it somewhere. (I think the tanker competition "only" started 8 or 9 years ago!). More tangibly, there are a number of similar small programs in work.

Cirrus seems to be recovering (perhaps despite 85 layoffs announced a few weeks ago). The Cessna Skycatcher will be on the market soon (assembly, service, flight instructor jobs). Diamond seems to be proceeding with some interesting piston planes (the D-50 looks nice!), regardless of the D-Jet.

The Honda program continues to progress, Eclipse is open again in some vestige, Piper continues working on their SEJ, and there are a multitude of Regional Jets (Russian, Chinese, Japanese) in development- from which the supplier base will benefit. Spirit Aerostructures continues to do relatively well.

And Gulfstream is rock'n with their new G-250 and G-650 programs. Not that they haven't had layoffs and furloughs this year as well, but they are big-time committed to these great platforms, and I think that reflects "enthusiasm" over the future.

From the above Reuters report:
"The report showed the aerospace and defense companies were still hiring despite the downturn, and had 21,000 job openings as of April 1 when the data were collected, down from 32,000 a year ago".

The "end of the rainbow" might still be a few months down the road. There are still some storm clouds in the vicinity, and it might be raining where you are at right now, but at least there are some rays of sunshine starting to peek through. We all wish good cheer to our friends who need it now.