Building the 21st Century National Aerospace Workforce

1
Building the 21st Century National Aerospace
Workforce
Right Skills, Right Place, Right Time

• ASME International,
• Congressional Briefing
• May 5, 2003
• Presentation by
• Joel Cutcher-Gershenfeld, MIT

For more information on aerospace workforce
research at MIT, see the publications presented
by MITs Labor Aerospace Research Agenda
http//mit.edu/ctpid/lara and MITs 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.
2
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
  MITs 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

6
Aerospace Workforce Knowledge, Skills and
Abilities A Conceptual Map

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)
Curriculum Innovation University / Industry
Skill Standards and Certification
Apprenticeships and OJT Initiatives
Industry/Workforce Skills Assessment
Knowledge Maintenance
Life-Long Learning Initiatives
Industry/Workforce Needs Assessment
Knowledge Utilization
Knowledge Acquisition
Knowledge Enhancement
Industry/Workforce Retention Initiatives
School-to-Work Initiatives
Displace Worker Initiatives
Aerospace Programs in the K-12 Schools
Knowledge-Driven Work Systems (Lean, Six
Sigma, etc.)
Knowledge Management
Skill and Knowledge Initiatives Across Individual
Careers/Lifecycles K-12 . . . College
University . . . Early Career . . . Mid-Career .
. . Retirement/Post-Retirement
Skill and Knowledge Initiatives Across Multiple
Enterprise Value Streams Basic Science . . .
Conception. . . Design/Development . . .
Production . . . Sales/Sustainment
Source MITs Labor Aerospace Research Agenda
7
Application to House (H.586 and Senate (S.309)
Aviation Revitalization Bills
ENVIRONMENTAL AIRCRAFT RD INITIATIVE ROTORCRAFT RD INITIATIVE CIVIL SUPERSONIC TRANSPORT RD INITIATIVE UNIVERSITY-BASED CENTERS FOR RESEARCH ON AVIATION TRAINING AIR TRAFFIC MANAGEMENT RD INITIATIVE.

• Focus of Funding
• Environmental Aircraft RD Initiative
• Rotorcraft Aircraft RD Initiative
• Civil Supersonic Transport RD Initiative
• University-Based Centers for Research on Aviation
  Training
• Aviation Weather Research
• Air Traffic Management RD Initiative

• High Leverage Applications
• Knowledge the Demand for labor
• Assessment of current and future RD 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 RD
  investment forward across value streams
• . . . All broadening the focus beyond training to
  knowledge-driven, lean work systems

8
Ensuring a Pivotal Impact of RD 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 RD investment
• Reinvigorate the aerospace vision A renewed
  sense of wonder and excitement!

Right Skills, Right Place, Right Time
9
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
11
Individual Survey Data Next Generation in
Aerospace
I would highly recommend that my children work
in this industry (Agree or Strongly Agree, n482)
12
Chart 1 US and EU Aerospace Employment since
1980
13
Chart 2 Major Non-U.S. Aerospace Employer
Countries since 1980 ( gt 30,000 employees with
time series data available)
14
Chart 3 Sales and Employment for U.S. Aerospace
Industry (SIC 372 and 376) since 1980
15
Chart 4 Sales and EmploymentSIC 372 - Aircraft
and Part since 1980
16
Chart 5 Sales and EmploymentSIC 376 - Guided
Missiles, Space Vehicles, and Parts since 1980
17
Chart 6 Sales and Employment for EU Aerospace
Industry since 1980
18
Chart 7 Sales and Employment forCanadian
Aerospace Industry since 1984
19
Chart 8 Sales and Employment for Brazilian
Aerospace Industry since 1995
20
Chart 9 Sales and Employment for Japanese
Aerospace Industry since 1988
21
U.S. engines and parts imports as a share of
total aircraft sales, 1981-2000
22
Instability and program cost/schedule performance
Source of Program Cost Growth Government Sample Average Annual Cost Growth (N101) Contractor Sample Average Annual Cost Growth (N80)
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
Table 1. Average Annual Program Cost Growth and
Its Sources
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

• 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

• 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
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
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
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
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
Russia, CIS 4
Europe 35
Canada, Mexico 23
Japan, China, Korea 22
US 95
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
Russia, CIS 5
Europe 75
Canada, Mexico 56
Japan, China, Korea 50
US 98
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
Russia, CIS 1
Europe 18
Canada, Mexico 7
Japan, China, Korea 11
US 40
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
Russia, CIS 6
Europe 22
Canada, Mexico 10
Japan, China, Korea 11
US 50
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
Russia, CIS 6
Europe 66
Canada, Mexico 25
Japan, China, Korea 31
US 92
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
Russia, CIS 20
Europe 58
Canada, Mexico 33
Japan, China, Korea 68
US 73
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.