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Building the 21st Century National Aerospace Workforce
ASME International,Congressional Briefing
May 5, 2003
Presentation by:Joel Cutcher-Gershenfeld, MIT
“Right Skills, Right Place, Right Time”
For more information on aerospace workforce research at MIT, see the publications presented by MIT’s Labor Aerospace Research Agenda http://mit.edu/ctpid/lara and MIT’s Lean Aerospace Initiative http://web.mit.edu/lean. For more information on the IAM and High Performance Work Organizations, see http://www.goiam.org under “visit IAM Headquarters.”
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Mission and Vision
• Overall Mission for the Aerospace Industry:– Enable the global movement of people and goods; – Enable the global acquisition and dissemination of
information and data;– Advance national security interests; and– Provide a source of inspiration by pushing the boundaries of
exploration and innovation Source: Lean Enterprise Value: Insights from MIT’s Lean Aerospace Initiative (Palgrave/MacMillan, 2002)
• 21st Century Workforce Vision:– Attract and retain a 21st Century aerospace workforce
with the skills, capabilities and commitment to enable transformation and success in the aerospace industry
3
Strategic Challenges in Aerospace
• Knowledge and Capability– Demographic “cliff” – Underutilization of women and minorities– Gaps in “pipelines” – skilled apprenticeships and
aerospace engineering programs– Outsourcing knowledge and skills– New technologies and changing skill mix requirements
• Competitive Challenges– Global competition and organizational instability– Institutional barriers, monuments and gaps in the “social
infrastructure”– Plummeting research and development spending– Reduced attractiveness of careers in aerospace
4
A New Mindset is Required
“Investing in R & D as a “pull” for the 21st Century workforce is not a new idea, but it gets to the root cause. . . How do we look at R & D from the point of view of building future capability – investing in human capital – not just completing a given project or program? This means that the definition of R & D priorities must be made with multiple stakeholders’ input to anticipate future needs – taking more of a long-term, strategic approach to such investments.”– Dr. Sheila Widnall, former Secretary of the U.S. Air Force and MIT
Institute Professor (in forward to Developing a 21st Century Aerospace Workforce, Policy White Paper submitted to the Commission on the Future of the United States Aerospace Industry, 2002)
5
Institutional Opportunities
• Aerospace Inter-Agency Task Force– Spanning the Department of Defense, NASA, FAA,
Departments of Labor, Education, Commerce and Homeland Security – to coordinate government aerospace workforce initiatives
• Aerospace Capability Network – Public/private partnerships spanning all key stakeholders –
business, labor, government, universities and community groups
• Industry Promotion and Development– National campaign on aerospace opportunities – primary
schools, secondary schools, community colleges and universities
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Aerospace Workforce Knowledge, Skills and Abilities: A Conceptual Map
Source: MIT’s Labor Aerospace Research Agenda
Apprenticeships and OJT Initiatives
Life-Long Learning Initiatives
Curriculum Innovation University / Industry
Displace Worker Initiatives
Industry/Workforce Skills Assessment
Industry/Workforce Retention Initiatives
Knowledge Management
School-to-Work Initiatives
Skill Standards and Certification
Government Policies and Initiatives (within and across agencies) on Aerospace Workforce
National, Regional & Local Aerospace Workforce Initiatives (Industry / Labor / Government)
Workplace-Specific Initiatives (public and private
facilities)
Knowledge-Driven Work Systems
(Lean, Six Sigma, etc.)
Industry/Workforce Needs Assessment
Aerospace Programs in the K-12 Schools
Knowledge Maintenance
Knowledge Enhancement
Knowledge Utilization
Knowledge Acquisition
Skill and Knowledge Initiatives Across Multiple Enterprise Value StreamsBasic Science . . . Conception. . . Design/Development . . . Production . . . Sales/Sustainment
Skill and Knowledge Initiatives Across Individual Careers/LifecyclesK-12 . . . College & University . . . Early Career . . . Mid-Career . . . Retirement/Post-Retirement
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Application to House (H.586 and Senate (S.309) Aviation Revitalization Bills
Focus of Funding:• Environmental Aircraft
R&D Initiative• Rotorcraft Aircraft
R&D Initiative• Civil Supersonic
Transport R&D Initiative
• University-Based Centers for Research on Aviation Training
• Aviation Weather Research
• Air Traffic Management R&D Initiative
High Leverage Applications:
• Knowledge & the Demand for labor– Assessment of current and future R&D
skill / knowledge requirements in each sector
• Knowledge & the Supply of labor– Assessment and action around
demographics (current distribution, prospective restructuring / retirements, and anticipated flow of new entrants)
• Knowledge Across Value Streams– Projecting skill / knowledge implications of
R&D investment forward across value streams
. . . All broadening the focus beyond training to knowledge-driven, lean work systems
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Ensuring a Pivotal Impact of R&D Investment in Aerospace
• Attract next generation aerospace workforce – the best and brightest
• Maintain knowledge and capability in the context of the “demographic cliff” and other challenges
• Optimize the current mix of knowledge, skills and abilities
• Identify future skill requirements
• Dual bottom line:
– A strong return on R&D investment
– Reinvigorate the aerospace vision – A renewed sense of wonder and excitement!
“Right Skills, Right Place, Right Time”
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Appendix
• Careers in aerospace – defense aerospace platforms by decade
• Individual survey data – next generation in aerospace• Aerospace employment and sales data• U.S. engines and parts imports as a share of total aircraft
sales, 1981-2000• Instability and program cost/schedule performance• National aerospace facility survey
– Apprenticeship data– Global footprint data
10
Careers in aerospace – lifetime defense aerospace platforms by entry decade
Source: RAND Study (chart by Northrop Grumman) -- Vertical Bars: Military Aircraft Program Starts
XP5Y XFYXP5Y XFYA2D F8UA2D F8UXC120 F6M1XC120 F6M1F4D U2F4D U2F3H SY3F3H SY3B52 F105B52 F105A3D X13A3D X13X3 C133X3 C133S2F F107S2F F107X2 B58X2 B58F10F F106F10F F106F2Y F5DF2Y F5DF100 X14F100 X14B57 C140B57 C140F102 T2F102 T2R3Y1 F4R3Y1 F4F104 A5F104 A5A4D T39A4D T39B66 T38B66 T38F11F AQ1F11F AQ1C130 X15C130 X15F101 F5AF101 F5AT37 X1BT37 X1B
A6A6B52B52
SR71SR71SC4ASC4AX21X21X19X19
C141C141B70B70
XC142XC142F111F111A7A7
OV10OV10X22X22
X26BX26BX5AX5AX24X24
F14F14S8S8
YA9YA9A10A10F15F15F18F18
YF-17YF-17B1B1
YC15YC15YC14YC14AV8bAV8bF/A18F/A18
F117F117F20F20X29X29T46T46T45T45B2B2
V22V22
F22 EMDF22 EMDYF22YF22YF23YF23
JSF X36JSF X36JSF X37JSF X37
C17C17JSF EMDJSF EMD
UCAVUCAV BXBX
RetiredRetired
RetiredRetired
1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s
Mid CareerMid Career
Experience: 1 Program
“We believe that a declining experience level has been a contributing factor to the
problems we observe in many recent aircraftprograms.”
RAND
Experience: 6+ Programs RetiringRetiring
40 Year Career Span
Experience: 1-2 Programs
11
Individual Survey Data – Next Generation in Aerospace
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Engineers Production Workers Managers/Supervisors
Technicians/Specialists
“I would highly recommend that my children work in this industry”(Agree or Strongly Agree, n=482)
12
Chart 1: US and EU Aerospace Employment since 1980
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1980 1985 1990 1995 2000
Year
Em
ploy
ees
United States European Union
13
Chart 2: Major Non-U.S. Aerospace Employer Countries since 1980
( > 30,000 employees with time series data available)
0
50,000
100,000
150,000
200,000
250,000
300,000
1980 1985 1990 1995 2000
Year
Em
ploy
ees
United Kingdom France Canada Germany Italy Japan
14
Chart 3: Sales and Employment for U.S. Aerospace Industry (SIC 372 and 376) since 1980
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1980 1985 1990 1995 2000
Year
Sa
les
(mill
ion
US
$)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Em
plo
yee
s
Sales Employment
Implicit Price Deflator 1996=100, Seasonally AdjustedSource: U.S. Department of Commerce, Bureau of Economic Analysis
15
Chart 4: Sales and EmploymentSIC 372 - Aircraft and Part since 1980
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1980 1985 1990 1995 2000
Year
Sh
ipm
en
ts (
$U
S M
illio
ns)
0
100
200
300
400
500
600
700
800
Em
plo
yee
s (t
ho
usa
nd
s)
Value of Shipments Employees
16
Chart 5: Sales and EmploymentSIC 376 - Guided Missiles, Space Vehicles, and
Parts since 1980
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1980 1985 1990 1995 2000
Year
Sh
ipm
en
ts($
US
Mill
ion
s)
0
50
100
150
200
250
Em
plo
yee
s (t
ho
usa
nd
s)
Value of Shipments Employees
17
Chart 6: Sales and Employment for EU Aerospace Industry since 1980
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
1980 1985 1990 1995 2000
Year
Sa
les
(mill
ion
20
00
Eu
ro)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Em
plo
yme
nt
Sales EmploymentDue to consortia and other issues with EU consolidation, country-level sales data is not compiled by AECMA. Source: Ulrich Fischer, Attaché Policy Research (AECMA).
18
Chart 7: Sales and Employment forCanadian Aerospace Industry since 1984
0
2000
4000
6000
8000
10000
12000
14000
16000
1984 1988 1992 1996 2000
Year
Sal
es (
US
$M)
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Em
ploy
ees
Sales Employees
19
Chart 8: Sales and Employment for Brazilian Aerospace Industry since 1995
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1995 1998 2001
Year
Sal
es (
US
$M)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Em
ploy
ees
Sales Employment
20
Chart 9: Sales and Employment for Japanese Aerospace Industry since 1988
0
200
400
600
800
1000
1200
1400
1988 1992 1996 2000
Year
Sal
es (b
illio
n ye
n)
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Em
ploy
ees
Sales Employees
21
U.S. engines and parts imports as a share of total aircraft sales, 1981-2000
4
6
8
10
12
14
16
18
20
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
Year
Sh
are o
f U
.S. A
ircraft
Sale
s (
Pe
rc
en
t)
22
Instability and program cost/schedule performance
Table 1. Average Annual Program Cost Growth and Its Sources
Source of Program Cost Growth
Government Sample Average
Annual Cost Growth (N=101)
Contractor Sample Average
Annual Cost Growth (N=80)
Budget or Funding Instability
2.3% 1.8%
Technical Difficulties 2.4% 2.7%
Requirements Changes 2.5% 2.7%
Other 0.1% 0.8%
Total 7.3% 8.0%
Source of Program Schedule Slip Government Sample Average Schedule
Slip (N= 76)
Contractor Sample Average Schedule
Slip (N= 66)
Budget or Funding Instability 8.2% 7.8%
Technical Difficulties 6.3% 5.8%
Requirements Changes 5.0% 3.4%
Other 4.2% 4.0%
Total 23.7% 21.0%
Mean Baseline (months) 85 70
Table 2. Sources of Program
Schedule Slip
Source: Eric Rebentisch, MIT Lean Aerospace Initiative, 1996
23
National Facility Survey: Overview and Process
• Overview:– A nationally representative sample of aerospace
facilities to examine instability, new work systems, skills & capability, intellectual capital, and related matters
• Process: – Sample drawn from national aerospace directory– Mailed survey to approximately 2500 facilities– Special panel established for respondents to
1999 National Facility Survey – drawn from same source
– Second mailing and follow-up telephone calls – Data presented based on 362 responses
• Note: Over 200 returned as “not in the aerospace industry” or returned to sender as bad addresses
CAUTION
• Cross-sectional data – longitudinal results in some cases
• Single respondents from facilities
• Post 9/11– current data but a major discontinuity
• Analysis just beginning
• Causality not always clear
24
Profile Data on Facilities and Respondents
Facility Profile• Average Number of Employees:
– 558 employees• Average Year Began Operations:
– 1976• Average % Sales to Largest
Customer:– 30%
• Average Number of Major Government Programs:– 5.4 Programs
• Average Number of Major Commercial Programs:– 8.9 Programs
• Product Volume – Primary Product:– Low: 60% Med: 32% High:
8%• Unionization Among
Respondents:– 15%
Industry Sector Distribution• Aircraft Frames/Structures:
24%• Aircraft Engines: 13%• Avionics:
15%• Spacecraft and Missiles:
6%• Other (mostly suppliers): 42%
Respondent Profile• Average Years of Experience in
Aerospace:– 24 years
• Average Age Range:– 46-55 years
• Average Education Level:– Undergraduate Degree and some
Graduate Education
25
Recent Changes in Employment: 1999 and 2002 Survey Data
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Increase in Employment OverPast Three Years
No Change in Employment OverPast Three Years
Decrease in Employment OverPast Three Years
1999 Survey
2002 Survey
More than half of aerospace facilities report a decrease in employment over the past three years – a deterioration from the employment picture in 1998.
26
Recent and Prospective Retirements: 2002 Survey Data
Percent of the Workforce Who RetiredOver the PAST Three Years
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Small Employers(Under 250employees,
n=285)
Mid-SizeEmployers (250-1000 employees,
n=48)
Large Employers(Over 1,000
employees, n=26)
Under 10%
10-20%
Over 20%
Percentage of the Workforce Eligable to Retire Over the NEXT Three Years
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Small Employers(Under 250employees,
n=285)
Mid-SizeEmployers (250-1000 employees,
n=49)
Large Employers(Over 1,000
employees, n=26)
Under 10%
10-20%
Over 20%
The proportion of the workforce eligible to retire in next three years is substantially higher than the past three years – with the greatest impact on large employers.
27
US DoL and Other Apprenticeship Programs: 2002 Survey
85% 85% 85% 85%
9% 10%8% 9%
3% 3% 3% 4%2% 0%
2% 1%0% 0% 1% 1%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Graduates of US DOLApprenticeship ProgramsOver Past Three Years
Currently in US DOLApprenticeshp Programs
Graduates of OtherApprenticeship Programs
Over Past Three Years
Currently in OtherApprenticeship Programs
No Apprenticeship Program
None over past 3 years
Under 5 people
5 to 10 people
Over 10 people
The vast majority (85%) of aerospace facilities do not have apprenticeship programs and of those that do, approximately 2/3 have had no graduates over the past three years and have no one in the programs.
28
Percent of US Respondents Reporting Suppliers in Each Location
US: 95%
Canada, Mexico: 23%
Japan, China, Korea: 22%
Europe: 35%
Russia, CIS: 4%
South America: 3%
Other: 3%
Key: Blue: Under 25%; Red: 25-50%; Green: Over 50%
29
Percent of US Respondents Reporting Customers in Each Location
US: 98%
Canada, Mexico: 56%
Japan, China, Korea: 50%
Europe: 75%
Russia, CIS: 5%
South America: 29%
Other: 18%
Key: Blue: Under 25%; Red: 25-50%; Green: Over 50%
30
Percent of US Respondents Reporting Joint Ventures in Each Location
US: 40%
Canada, Mexico: 7%
Japan, China, Korea: 11%
Europe: 18%
Russia, CIS: 1%
South America: 1%
Other: 3%
Key: Blue: Under 25%; Red: 25-50%; Green: Over 50%
31
Percent of US Respondents Reporting Strategic Partners in Each Location
US: 50%
Canada, Mexico: 10%
Japan, China, Korea: 11%
Europe: 22%
Russia, CIS: 6%
South America: 1%
Other: 5%
Key: Blue: Under 25%; Red: 25-50%; Green: Over 50%
32
Percent of US Respondents Reporting Current Competitors in Each Location
US: 92%
Canada, Mexico: 25%
Japan, China, Korea: 31%
Europe: 66%
Russia, CIS: 6%
South America: 5%
Other: 5%
Key: Blue: Under 25%; Red: 25-50%; Green: Over 50%
33
Percent of US Respondents Projecting Future Competitors in Each Location
US: 73%
Canada, Mexico: 33%
Japan, China, Korea: 68%
Europe: 58%
Russia, CIS: 20%
South America: 13%
Other: 10%
Key: Blue: Under 25%; Red: 25-50%; Green: Over 50%
34
Selected Written Comments on 2002 Surveys
• September 11 has had a severe impact on our industry which has influenced this survey. Airlines have received government support, however none of these funds have provided GSE manufacturers stability or longevity.
• Over the last two years we have been working very hard on upgrading Quality Systems (AS9000), implementing LEAN manufacturing, training, while at the same time diversifying the business and trying to penetrate new markets. Our products (cargo systems) are installed on older aircraft and those were affected heavily by the down turn in the economy as well as the events of sept. 11.
• Can't get domestic labor - skilled or otherwise. HELP!• Since September 11, 2001, there has been a significant downturn in the
volume of our business. I know for a fact that our facility and at least three of our most valued suppliers face an almost insurmountable challenge to stay afloat over the next 90 - 120 days if something doesn't change.
• We withdrew from the aerospace markets in 1997 and moved our manufacturing capabilities to the energy equipment markets.
• OEM's are using DOD funding to develop new technologies, practices & procedures and then turnaround and subcontract work overseas to the lowest bidder. They also utilize these advances on their commercial products which are primarily subcontracted to Asia & Mexico under the guise of mandatory offsets.
