Aerospace industry, U.S. Summary

  • Last updated on November 10, 2022

Manufacturers directly involved in the production of aircraft, engines, and ancillary products for use in aviation and space travel.

The Aerospace Industry Through 1945

The United States’ adventure in aviation went from its first flight in 1903 to flights to the Moon in 1969. Despite this impressive record of accomplishment, aircraft manufacturing proved to be a difficult business. Early companies, notably the Wright Company, founded by Wilbur and Orville Wright, and the Curtiss Aeroplane Company, established by Glenn H. Curtiss, sold a handful of planes to the military but did not find a lasting market for their aircraft. The federal government recognized the importance of aviation by establishing the National Advisory Committee for Aeronautics in 1915 but did little to help struggling manufacturers. Although World War I forced the United States to produce greater numbers of aircraft, most American pilots flew French planes during the conflict.

Although U.S. airplanes did not make an impact during the war, they did serve to train postwar aviation enthusiasts. These surplus planes undercut manufacturers to some degree, but the demand for increased performance gave companies an opportunity to introduce new designs. Despite widespread interest in aviation in the years leading up to World War II, the industry catered primarily to the military. Even companies, such as Boeing and Lockheed, that aggressively targeted the commercial market with private planes and airliners looked to the military for a significant proportion of their business. Other companies, notably Grumman and Douglas, dealt almost exclusively with the military.

World War II put a stop to commercial aviation plans and forced all manufacturers to focus on military aircraft. The leaders of the U.S. postwar industry clearly emerged during this period. Boeing, North American, Lockheed, Grumman, and Douglas all established themselves as mainstays in aerospace manufacturing. The war also necessitated enormous advances in technology. By the end of the war, jet fighters had taken to the air, heralding the future of the aviation industry. Finally, World War II established aviation as an indispensable component of both military and civilian life in the years to follow.

Postwar Industry Trends

The aerospace industry became increasingly important during the Cold War. The United States relied on technology to offset the numerical advantage of the Soviet Union. Many of the aircraft manufacturers that had done well during World War II remained at the forefront of the industry. These companies concentrated on four areas: military aircraft, missiles, rockets and space exploration vehicles, and commercial aircraft. The advent of space exploration prompted journalists to coin the term “aerospace” in the 1950’s, reflecting the new era of U.S. aviation manufacturers. The aircraft, aerospace, and parts industry had become the largest U.S. employer by 1959, and cities connected to the industry, including Los Angeles, Seattle, and Phoenix, exploded in population.

Military Aircraft

Aerospace manufacturers worked hard to win lucrative government contracts following World War II. The United States demanded advanced fighters and bombers to meet the Soviet threat. While these contracts provided the backbone of the industry, they also placed extraordinary demands on the manufacturers. The new planes required expensive engines and complicated alloys, both of which added a great deal of expense to the planes. Construction of the aircraft usually necessitated new techniques and equipment. Government designs often included overly complicated ideas that added to the weight of the aircraft. The industry did not help matters by overpaying executives and using unnecessarily expensive components. These problems led the U.S. Congress to require new levels of bureaucracy and paperwork to control costs. Furthermore, Congress could decide at any point to cancel a project, leaving the contractors heavily in debt with no potential market.

Despite these problems, aerospace companies could not disregard the billions of dollars that the government contracts offered. The enormous sums granted to various manufacturers also allowed much more funding for research and development, accelerating advances in technology. The United States ended World War II somewhat behind Great Britain in jet engine construction, but by the mid-1950’s, American manufacturers Pratt & Whitney and General Electric had become the leaders in jet technology. The increasing reliance on computers in the design stage led to continual improvements in microtechnology. Talented individuals such as Clarence “Kelly” Johnson at Lockheed and Ed Heinemann at Douglas created brilliant designs that exceeded government specifications and kept costs down.

The biggest problems aerospace manufacturers faced after World War II were not the technical demands of the new aircraft. Given enough time and money, men such as Johnson and Heinemann could overcome those obstacles. Unfortunately, the political demands of the defense issue often took precedence. Companies simply could not afford to spend several years and millions of dollars to develop an aircraft that would not enter service. Consequently, manufacturers went to great lengths to make their projects successful. Lockheed received a considerable amount of bad publicity in the 1970’s when investigations revealed that the company had relied heavily on bribery to ensure foreign contracts for its F-104 fighter during the preceding decade. Northrop also suffered for its use of bribery in the Middle East in an effort to find a market for its F-S fighter. Even companies that avoided politics could not disregard the new era in the industry. In the late 1960’s, Grumman expanded its facilities to begin manufacturing the Gulfstream II corporate jet. The company, which had always eschewed marketing, placed its new facility in Savannah, Georgia, which was represented by an important member of the House Armed Services Committee and the home state of another influential member of the Senate Armed Services Committee.

American defense cutbacks forced manufacturers to consider other markets. In the mid-1970’s, General Dynamics designed the single-engine F-16 fighter. The lower cost associated with using only one engine made the plane attractive to European nations with limited budgets. General Dynamics did have to allow European countries to manufacture some of the planes, but the consortium reduced costs for all companies and promoted sales around the world. Difficulties in controlling costs finally forced U.S. competitors to begin working together as well. Northrop, with little experience in carrier aircraft, had to turn to McDonnell Douglas for help with a new carrier-based fighter. The result, the F-18 Hornet, became a great success. Not only did the Navy and Marine Corps adopt the plane, but its low cost ensured brisk sales to air forces around the world. The F-18 program convinced manufacturers that collaboration had become necessary to control spiraling costs.

The early 1980’s saw a resurgence in Cold War tensions. President Jimmy Carter reinstated previously canceled programs such as the MX Peacekeeper intercontinental ballistic missile (ICBM) and the B-1 bomber. The new U.S. military buildup offered greater opportunities for military manufacturers, but these advantages were offset by the fact that the government demanded small numbers of extremely complex aircraft. This trend accelerated after the end of the Cold War, as the United States slashed its defense budget even further. The Air Force could not afford advanced programs such as the F-22 fighter and B-2 bomber, the Navy canceled its search for a new attack plane after well-publicized cost overruns, and crashes of new aircraft eroded public confidence, leaving manufacturers to fight over a shrinking sector.

Missiles

As military aircraft contracts forced manufacturers into hard-fought competition, America’s missile program gradually came to represent a larger share of the industry’s production. Between 1956 and 1961, airframe companies increased the percentage of missiles within their military business from 5 percent to 44 percent. In missile technology, many of the same manufacturers that dominated aircraft production also took a leading role in missile development, but companies such as TRW and Morton Thiokol made significant contributions to the industry.

The United States saw missiles as an important part of the nation’s Cold War arsenal. The government took great pains to secure the services of Germany’s leading missile designers at the end of World War II, but the growing Soviet threat made the development of ballistic missiles a high priority. These weapons, like the aircraft and space vehicles of the Cold War, proved much too expensive for individual companies. Missile projects required subcontracting and cooperation between manufacturers. By 1960, U.S. ballistic missile projects included two thousand contractors and forty thousand employees.

In the late 1950’s, the United States’ first intermediate range ballistic missiles (IRBM) entered service. Thor, produced by Douglas, and Jupiter, produced by Chrysler, went into installations in Britain, Italy, and Turkey. The United States soon succeeded in fielding ICBMs, which could be launched from the United States and attack targets within the Soviet Union. The first two ICBM programs were Atlas and Titan. These programs used separate contractors for each major system in order to facilitate competition and force companies to deliver their products on time.

The Air Force did not like the complicated Atlas and Titan missiles and granted a contract to Boeing to manufacture the Minuteman, which entered service in 1962. The Minuteman program did not use separate contractors for each system, but allowed Boeing to subcontract the component manufacturing. Morton Thiokol, Aerojet-General, Hercules Incorporated, North American, Sylvania, Avco, and General Electric all supplied systems for the Minuteman, which were then assembled by Boeing. This approach proved much more effective, and Boeing produced more than one thousand Minutemen, making the missile the foundation of the U.S. ICBM arsenal, even after the MX Peacekeeper missile entered service in the 1980’s.

Space Exploration

American interest in rocket technology before World War II scarcely existed. Robert H. Goddard conducted pioneering research in the field, but few people gave his theories much notice. During World War II, tactical rockets for battlefield use proved their effectiveness and teams at American universities and corporations began work on the weapons. The success of these weapons combined with the German breakthroughs in ballistic missile technology ensured that rockets would be a key component of national defense.

A logical outgrowth of work on ballistic missiles was the idea of space travel. Goddard had theorized about using rockets to reach the Moon, and the conquest of space quickly became an important Cold War achievement. The Soviet Union’s successful launch of Sputnik in October, 1957, revealed that the U.S. space program lagged behind its rival. In response, the United States took a number of drastic steps to improve the nation’s position in the space race. Schools instituted new curriculums with heavy emphasis on math and science, while the government combined military and civilian rocket research and in 1958 created a new agency, the National Aeronautics and Space Administration (NASA), to replace the National Advisory Committee for Aeronautics (NACA).

The Soviet lead in the space race allowed it to put the first human in space in 1961, but the United States soon made up the gap. The focused space program administered by NASA stressed corporate cooperation rather than competition. The tremendous cost of developing space vehicles prevented any one company from dominating the field. Instead of using one contractor, NASA used components from a wide variety of manufacturers to create finished products. Companies that failed to meet NASA’s specifications and deadlines risked losing contracts after having spent millions of dollars on research and development. Grumman, General Electric, and North American all revamped their manufacturing and management techniques after aggressive analysis from NASA.

The Apollo Moon-landing program illustrated NASA’s approach. No individual company could develop the equipment necessary for such a task. The agency used a variety of contractors to produce a handful of rockets and spacecraft. The Saturn rockets that carried the crews to the moon were a result of components produced by companies including Chrysler, Boeing, and North American. The Saturn V rocket stood 363 feet high and had a diameter of 33 feet, dwarfing any rocket the United States had yet produced. The huge size required companies to invest in new jigs and welding fixtures, new techniques in fabrication, and static test stands that were far larger than any in existence. The research and development and production costs of the Saturn rockets alone totaled $9.3 billion. Grumman, the main contractor for the Lunar Module, also faced tremendous challenges and suffered through numerous delays and cost overruns before delivering the finished product. The companies involved often complained about NASA’s unrealistic expectations, but the two sides generally found mutually agreeable solutions and manufacturers often found ways to streamline their manufacturing processes.

Following the conclusion of the Apollo Program in 1972, American interest in space exploration waned. NASA conducted Skylab missions and a joint mission with the Soviet Union in 1975, but these offered little financial security for contractors. When the United States launched the first space shuttle mission in 1981, the space program enjoyed a brief resurgence, but this comeback ended with the explosion of the shuttle Challenger in 1986. NASA resumed crewed flights two years later, but the enthusiastic days of Apollo had gone forever. The increasing costs of space missions forced NASA to increase its participation in joint international missions. Despite these setbacks, contractors found new ways to remain active in space missions. In 1989, private corporations took over the launching of commercial payloads from NASA. McDonnell Douglas, Martin Marietta, and General Dynamics all sent satellites into orbit at less than half the cost of a space shuttle mission.

Commercial Aircraft

The United States’ affluence and desire for travel following World War II represented an important market for aerospace manufacturers. Companies used the technology developed for the military during the war to produce faster and more comfortable passenger planes. Just as with military aircraft, the more advanced civilian designs proved more costly, and a failed project could leave a manufacturer deeply in debt. Even a successful design could require years to become profitable.

Douglas and Lockheed led the immediate postwar commercial programs. The DC family from Douglas and Lockheed’s Constellation provided both intercontinental and transatlantic service and proved very popular. However, these piston-engine planes did not represent the future of the commercial airline industry. Britain’s De Havilland Comet, the world’s first jet airliner, entered service in 1952, proving that just as in the military sector, American companies trailed their British competitors in passenger jet technology. Unfortunately for De Havilland, a number of mysterious accidents grounded the Comets for two years, giving American manufacturers time to cut into De Havilland’s technological lead.

Leaders Douglas and Lockheed did not embrace jet airliners as enthusiastically as did Boeing. The Seattle-based company realized that the company’s development costs for the B-52 bomber, KC-135 tanker, and a civilian airliner would be prohibitive unless Boeing could coordinate efforts on all three aircraft. Boeing used the same basic design for both the KC-135 and what would become known as the 707, the most successful U.S. first-generation jet airliner, which entered service in 1958.

This method of combining operations helped manufacturers offset some of the risk involved in developing new aircraft. Douglas managed to lengthen its DC-8 jet by 37 feet in the mid-1960’s, offering room for seventy more passengers. Boeing found that its 707 design did not allow for the same modifications, giving Douglas a significant advantage in the market. Boeing soon recaptured its position at the forefront of airliner manufacturing by developing the world’s first jumbojet. Based on Boeing’s failed attempt to win the Air Force’s competition to build an enormous new transport, the Boeing team modified their design into the 747, which rolled off the assembly line in 1968.

These methods helped manufacturers to control costs and to insure themselves to some extent against failure. Companies also advertised their planes in travel magazines, hoping to win passenger loyalty. However, creating a new design always entailed financial risk. When Boeing began work on the new 727 in the early 1960’s, the company found that it would have to sell three hundred of the planes simply to break even. The 727 became remarkably successful, but the three-hundred-plane total was the equivalent of the entire production runs of commercial airliners twenty years earlier. The enormous sums of money that aerospace companies spent on research and production of military, space, and civilian aircraft eventually came back to haunt the manufacturers. In the late 1960’s and early 1970’s, companies faced the twin threats of reduced military budgets and a slumping economy. Boeing had to cut its workforce by nearly two-thirds, and Lockheed, staggering under the burden of producing the massive C-S Galaxy transport and new L-1011 airliner, nearly went out of business. Lockheed remained afloat solely because the federal government guaranteed the company’s credit to potential lenders. High costs also forced some companies to merge, including the 1965 merger of McDonnell and Douglas. Merger trends continued through the remainder of the twentieth century, as manufacturers found themselves unable to compete in the changing marketplace.

This time of transition and economic distress eventually passed, and the commercial sector of the industry emerged with a clear structure. Boeing led U.S. airliner producers and followed up its earlier designs with new airplanes, including the 737, 757, 767, and the next generation of airliners, the 777. McDonnell Douglas and Lockheed maintained secondary positions, while European consortium Airbus entered the U.S. market, providing stiff new competition for Boeing. The U.S. aerospace industry finished the twentieth century as the world’s leader, but changing government and commercial needs forced manufacturers to cut costs in order to remain competitive.

Bibliography
  • Bilstein, Roger. The American Aerospace Industry: From Workshop to Global Enterprise. New York: Twayne, 1996. A solid historical examination of corporate development in American aviation that also examines the role of general aviation manufacturers, such as Cessna and Piper.
  • _______. Flight in America: From the Wrights to the Astronauts. Rev. ed. Baltimore: Johns Hopkins University Press, 1994. A good overview of aviation and space travel that also examines technological trends in aviation.
  • Pisano, Dominick, and Cathleen Lewis, eds. Air and Space History: An Annotated Bibliography. New York: Garland, 1988. An extraordinarily thorough bibliographical guide covering a wide range of topics in flight, including economic, political, technical, and corporate subjects.

Airplanes

Boeing

Lockheed Martin

McDonnell Douglas

Manufacturers

Mergers

National Advisory Committee for Aeronautics

National Aeronautics and Space Administration

Space shuttle

Spaceflight

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