Supply Chain Is Unsung Hero Of The U.S. Aerospace and Defense
New data finds supply chain generates majority of U.S. A&D exports; foreign A&D customers crucial to American manufacturing
The commitment of the United States to international trade in aerospace and defense was prominently on display at the opening of the Farnborough International Airshow this week, punctuated by the first official flyover of the event by a Lockheed Martin F-35, and the opening of The Boeing Company’s Centennial Pavilion to launch its “second century of aerospace.”
Hand-in-hand with the marquee-name manufacturers exhibiting at the show this week, America’s supply chain, largely comprised of small- and medium-sized enterprises with fewer than 250 employees, stands out as the unsung hero of the U.S. aerospace and defense export economy.
According to new data compiled by the Aerospace Industries Association (AIA), the A&D industry is the third largest U.S. exporter, accounting for $142 billion, last year—nine percent of all American exports, and a trade surplus of $81 billion. In 2014, the supply chain generated 58 percent of the nation’s total A&D exports, $78 billion.
The numbers affirm the crucial importance of global partnerships and investment to America’s A&D manufacturing base, led by supply chain companies whose technologies and innovations can be found on tens of thousands of programs and platforms around the world.
“The U.S. aerospace and defense industry benefits significantly from increased demand for U.S. civil aviation, satellite, and defense products generated by greater economic linkages with other parts of the world,” said AIA CEO David Melcher. “Trade agreements like TPP and TTIP as well as the level playing field provided by the U.S. ExIm Bank not only help secure the initial sale of major systems and platforms produced by large companies, but ensure that U.S. small- and medium-sized companies can generate exports for decades more to keep this equipment operating effectively and efficiently.”
At Farnborough, the competitive scope and scale of U.S. technology and innovation was on full display, with 360-plus American exhibitors on site, nearly one-quarter of the show’s projected total, the largest international contingent outside of the UK. More than 220 are exhibiting in the U.S. International Pavilion, representing 31 states, including 14 state pavilions. Fifty-five percent of pavilion exhibitors are SMEs.
“Farnborough 2016 is a one-of-a-kind opportunity for America’s finest aerospace companies to showcase their latest technologies and remind global firms of the many reasons they should look to the United States to find new suppliers and expand their operations,” said U.S. Commerce Secretary Penny Pritzker. “Our strong workforce, consistent investments in research and development, proven track record of safety, and access to overseas markets make the United States the best place in the world for global aerospace companies to do business.”
Speaking alongside Melcher at the opening of the Pavilion, Pritzker underscored the role the public sector plays in supporting innovation in the aerospace industry.
“The American private sector is not alone in its quest to create twenty-first century tools for the aerospace industry,” she said. “Our public sector significantly contributes to research and development in partnership with our world-class universities and laboratories. For example, agencies like DARPA and NASA are collaborating with U.S. entrepreneurs to creatively address engineering problems in rocket propulsion and in-orbit operations. At the same time, state governments are working to create welcoming environments for foreign investment in aerospace and other sectors. Such resources and collaborations add measurable, competitive value for U.S. companies across the supply chain.”
From high-profile multinational programs such as the F-35, to more discreet partnerships such as Essex Industries’ recently announced UAE and Asian distribution agreements or the Dual Diploma Master of Engineering Degree program announced by the University of Cincinnati and France’s University of Bordeaux, U.S. exhibitors at Farnborough exemplify America’s full-spectrum approach to global trade and national defense.