Developing the 21 Century Aerospace Workforceweb.mit.edu/ctpid/lara/pdfs/CTPIDLunch.pdf · Ø Case...

1 -- Labor Aerospace Research Agenda © 2001 Massachusetts Institute of Technology

Developing the 21st CenturyAerospace Workforce

MIT Center for Technology, Policy and Industrial Development

Lunch Presentation, October 2001

“Right Skills, Right Place, Right Time”

DevelopingDevelopingThe 21The 21stst Century Century

Aerospace WorkforceAerospace Workforce


OverviewOverview

Ø Introduction to the “Labor AerospaceResearch Agenda”

Ø Sample Research Findings on Instability

Ø A Call to Action on Instability and InstitutionalInfrastructure

Ø Draft Outline for White Paper for PresidentialCommission on the Future of the U.S.Aerospace Industry




Introduction to LaborIntroduction to Labor

Aerospace Research AgendaAerospace Research Agenda

Ø Sponsor: USAF ManTech

Ø Lead Partners: UAW and IAM

Ø Principal investigators and ResearchTeam:

Ø Tom Kochan (Co-PI), Joel Cutcher-Gershenfeld (Co-PI), Betty Barrett,Rob Scott, Takashi Inaba, EricPartlan, Shannon O’Callighan,Kevin Long, and other teammembers

Ø Links to LAI:

Ø Organizations and People,Knowledge Deployment, OtherResearch/Product Teams, andCurriculum Development

Ø Funding:

Ø ~$300K/yr

Ø Focus:

Ø Impact of instability on employmentand workplace innovation in theaerospace industry

Ø Social capital and institutionalinfrastructure

Ø Methods

Ø National random sample survey(194 facilities)

Ø Individual surveys (400+ surveys)

Ø Case studies (6)

Ø Collective bargaining contractanalysis

Ø Archival data analysis




LARA: Phases I and IILARA: Phases I and II

Phase IØ Instability and employment

Ø National Random Survey (194facilities)

Ø Individual Surveys (400+)

Ø Case Studies (6)

Ø Collective Bargaining Analysis

Ø Activity Based Costing Analysis

Ø Global Supply Chain/StrategicAlliance Exploration

Ø Conference Presentations andBriefings

June 2000 LAI Executive; March 2000LAI Plenary; January 2000 “Enhancingthe Effectiveness of the NationalWorkforce”

Phase IIØ Instability and employment

Ø Intellectual Capital &Institutional Infrastructure

Ø Panel Study Follow-up onNational Survey

Ø Policy Recommendations

Ø Case Studies (1-2)

Ø Collective Bargaining Guide

Ø Global Supply Chain/StrategicAlliance Chart

Ø Conference Presentations,Briefings, Articles, Website andother Knowledge Deployment

May 2000 LAI Executive; April

LAI Plenary




Products Made by IAM & UAWProducts Made by IAM & UAW

MembersMembers




Why Worry About Instability?Why Worry About Instability?

0100200300400500600700800900

1,0001,1001,2001,3001,400

1985 1987 1989 1991 1993 1995 1997 1999

Year

(In

Th

ou

sa

nd

s)

Source: AIAPrepared by: IAM Strategic Resources Department

PullPullPull

FlowFlowFlow

StabilityStabilityStability

T1 T2 T3 T4 T5 T6 T7 T8 T9 T10

Inte

rdep

ende

nce

Time

Total U.S. Aerospace Employment




Why Worry About Instability?Why Worry About Instability?

SOURCE: Credit Suisse First Bank 1980 1982 1984 1986 1988 1990 1992 1994 1996 1997

BOMBARDIERBOEING

RAYTHEON

BDM (CAR LYLE)

LOCKHEEDMARTIN

NORTHROPGRUMMAN

DE HAVILLAND AIRCRAFTBOEING

ARGO SYSTEMSUTL

LITTON PRECISION GEARROCKWELL INTERNATIONAL

MCDONNELL-DOUGLAS

HUGHESGENERAL MOTORS

BET PLC’S REDIFFUSION SIMULATIONGENERAL DYNAMICS MISSILE DIVISION

MAGNAVOXREMCO SARAYTHEON

STC PLC-NAVIGATION SYSTEMSTRW-LSI PRODUCTS

CORPORATE JETSE-SYSTEMS

TEXAS INSTRUMENTS DSEG

HONEYWELL-ELECTRO-OPTICSFAIRCHILD WESTERN SYSTEM

GOODYEAR AEROSPACEXEROX-DEFENSE/AEROSPACE DIVISION

NARDA MICROWAVELORALNYCOR

FORD AEROSPACEBDM INTERNATIONAL

LIBRASCOPELTV-MISSILE BUSINESSIBM-FEDERAL SYSTEMS

UNISYS DEFENSEGENERAL DYNAMICS-FORT WORTH

MELSANDERS ASSOCIATES

LOCKHEEDMARTIN MARIETTA

GOULD OCEAN SYSTEM DIVISIONGENERAL ELECTRIC-AEROSPACE

GENERAL DYNAMICS SPACE BUSINESS

NORTHROPLTV-AIRCRAFT OPERATIONS

GRUMMANWESTINGHOUSE ESG




What is at Stake?What is at Stake?

Consider One Form of InstabilityConsider One Form of Instability

"the money spent on canceled programs inrecent years could have bought:– 1,000 Abrams tanks,

– 100 F-16 Fighters

– 1,000 AMRAAM missiles

– 10 Titan Launch Vehicles

– 20 Joint STARS Aircraft

– 10,000 Javelin missiles

– 70,000 MLRS Rockets, and

– one nuclear attack submarine."

"Acquisition Reform Dream or Mirage?" Norm Augustine. Army RD&A,September/October 1996.




U.S. Engines and Parts Imports as aU.S. Engines and Parts Imports as a

Share of Total Aircraft Sales, 1981-2000Share 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

of U

.S. A

ircr

aft

Sal

es (

Per

cen

t)




ContextualFactors

•Labor Markets

•Product Markets/Industry Segment

•Product Mix

•Public Policy

•Location, Size,Union Status, andDemographics

ProgramInstability

•Funding

•Technology

•OrganizationalChange

Work PracticeAdoption &Diffusion

•Tangible andIntangible

•Manufacturing andEngineering

•Lean and otherWorkplaceInnovations

Outcomes

•Employment

•EconomicPerformance

•OrganizationalLearning

Business & Labor Mitigation Strategies

•Training Initiatives

•Product diversification

•Worker Flexibility

Conceptual Model:Conceptual Model:

Facility SurveyFacility Survey




Highlights From CasesHighlights From Cases

Ø Types of instability:

Ø Funding/orders

Ø Shift from R&D toproduction funds

Ø Fluctuations in demand forprimary product in facility

Ø Technology

Ø Changes in customerrequirements

Ø Shifts in materials

Ø Rapid pace of change incomputer capabilities)

Ø Environmental constraints

Ø OrganizationalØ Acquisition/layoffs

Ø Mergers/restructuring

Ø Relocation of productsamong facilities

Ø Two-tier relationshipbetween sister facilities

Ø Demographics --retirements/gaps in pasthiring, skill shortages

Ø Turnover -- management,engineering, and hourly




Highlights From Cases (cont.)Highlights From Cases (cont.)

Ø Observed mitigation strategies:

Ø Business Strategy

Ø Increase proportion of commercial business sought

Ø Shift in product mix to increase focus on space

Ø Human Resource Management/Industrial Relations

Ø Cross-training/flexible utilization/teams

Ø Informal no-layoff practice

Ø Labor-management partnership

Ø Employee involvement

Ø Intensified training of hourly and salaried employees

Ø Co-location of engineers, teams

Ø Two-tier wage system

Ø Multi-facility transfer agreements




Facility Survey: Survey ResponseFacility Survey: Survey Response

Rate, Facility and Respondent ProfileRate, Facility and Respondent Profile

Ø Population and Sample

Ø Estimated Population: approx. 5,000

Ø Sample Size: two mailings to 2,123, with 2 follow-up card mailings andover 900 follow-up calls – many bad addresses, many no longer in industry

Ø Valid Responses: 198

Ø Facility Profile Distribution Size Year

Ø Airframes and Mechanical Systems (n=54) 27.4% 1,051 1971

Ø Engines and Propulsion (n=19) 9.6% 880 1969

Ø Space and Missiles (n=8)* 4% 1,738 1971

Ø Avionics and Electronic Systems (n=40) 30.3% 318 1977

Ø Second/Third Tier Suppliers and Others (n=76) 38.6% 262 1976

Ø Respondent experience in Aerospace 20.5 years

* Note that 33 facilities listed space or missiles as a secondary sector, but not as primary sector




Facility Survey:Facility Survey:

Sources of Instability Sources of Instability

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Changes inproduct demand

Changes incustomer

requirements

Changes ingovernment

budgets

Mergers/acquisitions

Changes inleadership vision

Focus on Four Categories of Instability

Budget and Market Instability

Changes in Product Demand, Changes in Government Budgets, Changes inCompany Budgets, Changes in Government Acquisition

Technology Instability

Changes in Customer Requirements/Technical Design, Changes inEquipment/Technology, Problems from Technical Challenges,

Organizational Instability

Mergers/Acquisitions, Changes in Leadership Vision, Re-Engineering/Re-Structuring, Voluntary Staff Turnover

Supply-Chain Instability

Changes in Supplier Performance, Problems of Cooperation with Customers/Partners/Suppliers, Subcontracting of Work, Reducing the Number of Suppliers

% o

f F

acilit

ies S

ele

cti

ng

Ite

m a

s M

ost

Sig

nif

ican

t




High Levels of Instability andHigh Levels of Instability and

Facility SizeFacility Size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Funding and MarketInstability

Technology Instability Organizational Instability Supply Chain Instability

Under 100 employees (n=93)101-250 employees (n=44)

251-500 employees (n=16)

501-1000 employees (n=11)Over 1000 employees (n=26)

Remedies to Instability Have to Be Sensitive to Facility Size




Impact of Instability onImpact of Instability on

Retention of Critical SkillsRetention of Critical Skills

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% Reporting increased loss of people with critical skills

Funding & Market InstabilityFunding & Market Instability

Less Technology Instability More Technology Instability

Less Organizational InstabilityMore Organizational Instability

Less Supply Chain InstabilityMore Supply Chain Instability




Facility Survey: Reported Use of MitigationFacility Survey: Reported Use of Mitigation

Practices Practices –– Five Most Extensively Used Practices Five Most Extensively Used Practices

(past 3 yrs)(past 3 yrs)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cross-training Employeetraining/skills devt.

Long-term supplieragreements

Computer-aidedmanufacturing

Increasedemployee control

Never

Limited

Extensive




Facility Survey: Reported Use of MitigationFacility Survey: Reported Use of Mitigation

Practices Practices –– Five Least Extensively Used Practices Five Least Extensively Used Practices

(past 3 yrs)(past 3 yrs)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Formalemployment

security

Early retirement Work in from otherfacilities

Sending people toother facilities

Work sharing

NeverLimitedExtensive




Facility Survey: Selected InnovationsFacility Survey: Selected Innovations

and Employment Changeand Employment Change

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

With LeanProduction

(n=78)

Without LeanProduction

With HPWO(n=25)

WithoutHPWO

With KaizenProcess(n=58)

WithoutKaizen

Process

Employment Decrease

No Change in Employment

Employment Increase




Future Prospects for the U.S.Future Prospects for the U.S.

Aerospace EnterpriseAerospace Enterprise

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)




““Enhancing the Effectiveness ofEnhancing the Effectiveness of

our National Workforceour National Workforce””

Ø Workshop held January 2000Ø Approximately 65 participants – industry, labor, government, university

Ø Featured presentations on instability, HPWO and other innovations, policy dialogue

Ø Workshop Recommendations covering:Ø Fostering partnership with the workforce

Ø Identifying/addressing sources of instability that impact the workforce &innovation

Ø Supporting a broad definition of “lean” aimed at industry revitalization

Ø Briefing for LAI executives

Ø Briefing for DoD, Congressional officials and others

Ø Exploring industry-level and other initiatives

”One key principle and message I’m taking away from this session is that we can’timplement lean principles without partnership with the workforce. We should have beenhighlighting this 4 years ago so there is a sense of urgency here about this.”

Ø Sheila Widnall, MIT, at “Enhancing the Effectiveness of Our National Workforce” (January 2000)




A Call to Action:A Call to Action:

LAI Executive BoardLAI Executive BoardØ Dimensions of an employment crisis in Aerospace:Ø Increasing skill shortagesØ Changing skill mix in a post-cold war era

Ø Reduced investment in training and development

Ø Divisive and immobilizing concerns over job securityØ Industry has lost over 500,000 jobs since 1990

Ø Demographic “cliff”Ø Average age of IAM members is 44 in the Commercial Sector and 53 in

Defense – with over 20% eligible to retire in next 3 years

Ø Global competitive dynamicsØ Projected loss of jobs and revenue due to increased global

competition

Ø Projected increase in foreign content – with complex implications

Ø Projected job growth in European Aerospace Industry

Ø Inability to attract and retain a 21st Century workforce




Sample Human Capital Issues inSample Human Capital Issues inLean Enterprise ValueLean Enterprise Value

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

SR71SR71SC4ASC4AX21X21X19X19C141C141B70B70

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

Retired Retired

Retired Retired

Experience: 1-2 ProgramsExperience: 1-2 Programs

1950s1950s 1960s1960s 1970s1970s 1980s1980s 1990s1990s 2000s2000s 2010s2010s 2020s2020s 2030s2030s

Mid Career Mid Career

Very Very Few Few

Experience: 1 ProgramExperience: 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+ ProgramsExperience: 6+ Programs Retiring Retiring

40 Year Career Span40 Year Career Span

Source: RAND Study (chart by Northrop Grumman) -- Vertical Bars: Military Aircraft Program StartsVertical Bars: Military Aircraft Program Starts




Draft Overview of theDraft Overview of the

White PaperWhite Paper

Executive Summary

Forward by Sheila Widnall

Preface on LARA and LAI

1.0 Statement of the Problem

Ø 1.1 Challenges in Attractingand Retaining a 21st CenturyWorkforce

Ø 1.2 Inadequate Infrastructurefor Enabling Wise Investmentin Human Capital

Ø 1.3 Limited Mechanisms forDiffusing Best PracticesAcross the AerospaceEnterprise

Ø 2.0 Root causes and Research Findings

Ø 2.1 The end of the Cold War and the rise ofglobal competition

Ø 2.2 Industry “maturity” with reducedopportunities for innovation

Ø 2.3 Instability in funding, technology, andorganizations

Ø 2.4 Disincentives to train and invest inhuman capital – market failure

Ø 2.5 Slow rate of diffusion of workplaceinnovation (linking social and technicaldimensions)

Ø 2.6 Gaps in training and developmentinfrastructure

Ø 2.7 Gaps in workforce skill mix, curricularequirements, and educational completion

Ø 2.8 Imports, offsets and other globaldynamics

Ø 2.9 Underlying assumption thatresponsibility lies at the level of theindividual firm/facility




Draft Overview of theDraft Overview of the

White Paper (cont.)White Paper (cont.)

Ø 3.0 Selected Innovative Models andLinkagesØ 3.1 School-to-work transition

programs in selected communities

Ø 3.2 Lean/high performanceworkplace transformation initiativesin selected locations

Ø 3.3 Joint training partnershipsamong major employers andunions

Ø 3.4 Industry-level forecasting andtraining in Canada

Ø 3.5 Linking R&D funding toworkforce attraction andintellectual capital development

Ø 3.6 Core challenge: Moving beyond“islands of success”Ø Note: There are additional topics

and examples that will be added tothis section

Ø 4.0 Conclusions andRecommendations

Ø 4.1 Public Policy Priority ProtectingInvestment in Intellectual Capital

Ø 4.2 Aerospace Capability Network

Ø 4.3 National Training andDevelopment Partnership

Ø 4.4 Regional and Local WorkforceInitiatives

Ø 4.5 Innovation by Government asan Employer

Ø 4.6 R&D Investment DrivingDemand for the 21st CenturyWorkforce

Developing the 21 Century Aerospace Workforceweb.mit.edu/ctpid/lara/pdfs/CTPIDLunch.pdf · Ø Case...

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