HAVING always professed their faith in know-how, Americans have built empires of technology unparalleled in the world. The largest and for at least 25 years the most exciting of these has been the aerospace industry—the high-performance, high-speed realm of planes and missiles. Each year it has received barely conceivable billions from the national treasury, and each year its products seemed to transport Americans higher, faster and farther than ever before. After the U.S. Senate voted last week to shoot down the supersonic transport, which would have been the costliest commercial product in the nation's history, there were widespread new fears about the future of this proud industry. Barring the increasingly slim chance that the SST contractors will be able to continue work with private financing, the Senate vote killed—or at least postponed indefinitely—a machine that the U.S. had long assumed would be the basis of the next generation of commercial aircraft.
The SST decision was just the latest of many blows to the aerospace industry. The industry's biggest customer, the Defense Department, has cut back considerably on its orders for military planes and missiles. Following the course of the nation's disengagement from Viet Nam, defense funds have been pared for two straight years. The decreasing fervor for space feats has also hurt. The National Aeronautics and Space Administration this year has a budget of $3 billion, or a little more than half as much as three years ago.
The other major aerospace customer, the airline industry, has been set back by the general economic slump and is contracting for almost no new equipment. A confidential White House study estimates that airlines will suffer a $134 million loss on operations in 1971. Says Karl G. Harr Jr., president of the Aerospace Industries Association of America, in painful understatement: "We've got a severe weather problem."
Austerity Program
In the resulting turbulence, aerospace sales have fallen from a high of $28.9 billion in 1968 to an estimated $23.5 billion for 1971. Although the industry remains the nation's largest manufacturing employer, it has been forced to go on an austerity program and order massive job chopping (see box, page 78). Aerospace firms now employ just over one million Americans, down more than 25% from three years ago. The total is expected to shrink by year's end to 962,000, the lowest since 1958. Boeing, the contractor for the SST, expects to "bottom out" this year in the Puget Sound area at 29,500, down from 44,000 at present. Pink layoff slips will be sent to 7,000 at Boeing early this week.
To keep its employment high, the industry requires a steady flow of new development contracts. Aerospace labor is needed largely during the research and testing phases of a project. It is then that thousands of specialists have to draw patterns, cast molds, make tools —and build, test out and put together countless parts. Once a craft goes into production, machines can take over a much bigger part of the work. Because the SST was at a stage in which it had high manpower requirements, the Senate vote last week was a severe shock to the industry.