Aircraft Industry

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AIRCRAFT INDUSTRY

AIRCRAFT INDUSTRY. The Wright brothers' successful flights on 17 December 1903 were the culmination of a century of experimentation on both sides of the Atlantic. The reality of powered, controlled flight was not recognized for almost five more years, however. The U.S. Army ordered a Wright flyer in 1908, and in 1909 Glenn Curtiss and his associates made the first commercial sale of a flyer, an act that led the Wright brothers to sue Curtiss for patent infringement. The formation of the Curtiss-Herring and Wright Companies (both in 1909) for series production followed. Other aspirants, most significantly Glenn Martin in California, formed companies in 1911, and the military services ordered flyers for observation and training. Combat roles for aircraft were not yet envisaged, and scheduled passenger service was undeveloped since early aircraft were not capable of carrying substantial loads.

World War I

Aviation remained little more than a curiosity until World War I (1914–1918) but progressed rapidly in Europe as combat roles developed. Concerns about the European lead in aviation prompted Congress to establish the National Advisory Committee for Aeronautics (NACA) in 1915 to support aviation research and development. When the United States entered the war in 1917, few manufacturers were active, and none had experience with mass production. The government left production in private hands during the war buildup rather than establishing state ownership, as was sometimes proposed, although the Naval Aircraft Factory was established. The small industry received major support as Congress appropriated large sums for aircraft, and several new firms were formed to fulfill war orders. Several European aircraft were selected for production in preference to domestic designs, and the automobile industry became heavily involved with both aircraft and engines. However, the war ended before American production could have a major impact. Nagging problems cast the fledgling industry in a bad light, but investigation concluded that most problems were due to inexperience and overambitious goals.

Between the Wars

Peace brought massive contract cancellations and the failure of many firms. The remaining active firms were also stressed. Despite the depressed state of the industry—only 263 new aircraft were built in 1922—technical development continued, and aircraft capabilities increased. Notable military designs included the Martin MB-2 bomber and the first fighters by such firms as Thomas-Morse, Chance-Vought, and Boeing. Most civil flying was recreational, facilitated by cheap military surplus trainers, such as the Curtiss JN-4 Jenny. Airmail began in 1918 and grew steadily, attaining coast-to-coast routes by 1924. Aeromarine Airways began limited passenger service in 1919 between Florida and Cuba in flying boats, but losses forced an end to the service in 1923.

The Manufacturers Aircraft Association and the Aeronautical Chamber of Commerce were formed in 1917 and 1922, respectively, to represent the industry's interests. The U.S. Army Engineering Division and the U.S. Navy Bureau of Aeronautics began to support development and testing. Exciting new records set by Americans, such as a new world altitude record of 34,508 feet in 1921 and a speed record of 223 miles per hour in 1922, spurred interest in the industry. The National Air Races, which began in 1920, enhanced public interest, and experiments with oxygen, parachutes, and aerial refueling added to aviation's potential. The first nonstop coast-to-coast flight in 1923 and the first global flight in 1924 by an army team were impressive achievements. Efficient air-cooled radial engines, such as the Wright Whirlwind, were also significant. The Lawson L-4 of 1920, with a capacity of eighteen passengers, was probably the first airliner, although it was only experimental.

Few could afford new private aircraft, but several firms, notably Travel Air, Stearman, Weaver (WACO), and Laird (Swallow), entered the field. Beyond sport flying and barnstorming exhibitions, practical private roles included aerial photography and surveying, crop dusting, bush flying in remote areas, and, to a small extent, business flying by large corporations.

National aviation policy developed slowly, but several investigative boards led to the Airmail Act of 1925 and the Air Commerce Act of 1926. Commercial airmail led to the formation of several carriers, and the Bureau of Air Commerce under the Department of Commerce under-took airways and airport development and licensing, maintenance, and training standards. Military aviation gained greater autonomy with the establishment of the Army Air Corps in 1926, and the military services started five-year aircraft procurement programs. The epic solo flight across the Atlantic by Charles Lindbergh in 1927 spurred a major aviation boom. The possibilities of aviation appeared unlimited, and both military and civil aircraft output expanded. More people wanted to learn to fly, and new aircraft firms entered the field. Another major development during the boom was the formation of large aviation holding companies with Wall Street financing as aviation appeared to become a major industry. The largest companies were United Aircraft and Transport Corporation (UATC), Curtiss-Wright, Detroit Aircraft, Aviation Corporation (AVCO), and North American Aviation, originally an investment firm in which General Motors held a major holding. The new giants acquired many existing firms and integrated most sectors of aviation, including aircraft production, airmail and passenger services, flying schools, and engine, propeller, and instrument production.

With the boom, scheduled commercial service, largely subsidized by airmail, grew rapidly. Passenger aircraft, such as the legendary Ford trimotor, the Boeing 80, and the Fokker series, led the way. But all were slow, uncomfortable, and noisy, and a coast-to-coast trip was a major and expensive undertaking requiring numerous stops.

The Great Depression ended the boom, and many firms failed. Stock prices of the holding companies fell farther than most. Military orders slowed as the five-year plans were completed, and private aircraft demand virtually disappeared. Yet advances during this otherwise grim period resulted in nothing less than a design revolution. The NACA reduced drag with airfoils and streamlined engine cowlings faired into the nose and wings. Monocoque fuselages, enclosed cockpits, replacement of biplanes with more efficient monoplanes, sophisticated instruments, refined aviation gasoline, increased engine power, retractable landing gear, and wider use of aluminum structures enabled greater performance and safety advances. The Martin B-10, the first modern bomber, and the Boeing 247, the first modern airliner, appeared in the early 1930s, followed in 1935 by the Seversky P-35 fighter, the Boeing B-17 bomber, the Consolidated XP3Y flying boat, and the Douglas DC-3 airliner, which led their categories.

With the DC-3, airlines could operate profitably on passenger services without airmail subsidies, and this type became the world standard. Transoceanic air transportation also began in 1935 with large, luxurious Martin, Sikorsky, and Boeing flying boats, as water-landing capability in an emergency was required for safety. Production was small, however, and World War II (1939–1945) and the eventual proven superiority of large land planes ended this brief romantic era. Despite impressive technical advances, the industry struggled for profitability. Exports became critical, although such efforts frequently conflicted with American neutrality.

The personal flying sector also advanced. The market for light, two-seat models, such as the Taylor (later Piper) Cub and the Aeronca C-3 began to grow after 1935. The fast, powerful Beech Model 17 biplane and such cabin monoplanes as the Stinson Detroiter and Reliant, the Cessna Sky master, and the Spartan Executive were significant business models, but many companies simply could not survive in a small market. Concurrently, the rotating-wing autogiro was widely anticipated as the solution to mass airplane ownership. The first American model was tested in 1928 by Harold Pitcairn, but a substantial market never developed.

A more modern industry structure gradually evolved. The ambitious Detroit Aircraft Corporation suffered bankruptcy in 1932, and antitrust concerns led to the breakup of the remaining holding companies by 1934, largely separating manufacturing and transport. Boeing again became independent from UATC, and North American transformed into a manufacturer, moved to southern California, and sought scarce military contracts. Despite the otherwise gloomy outlook, such important firms as Grumman, a revived Lockheed (from Detroit Aircraft), Bell, Vultee (originally part of AVCO), Northrop, Republic, and McDonnell were established in the 1929 to 1939 period, and production was increasingly located in southern California.

By 1938, as war approached, U.S. military forces were weak by world standards, and military aircraft orders remained low. Industry employment was only 36,000 workers, and over the thirty years of its history the industry had produced only about 50,000 aircraft, both military and civil, with one-third of that total produced between 1917 and 1918. Sound designs led to increased foreign demand, however, and military exports, always controversial, helped the industry survive until domestic demand rose. British orders in 1938 provided a major boost to industry finances and production capacity. With the onset of war, British and French purchasing commissions placed massive orders. Civil aviation benefited from

the establishment of the autonomous Civil Aeronautics Authority (CAA) in 1938 to succeed the Bureau of Air Commerce. The CAA promoted development of more advanced airliners among other activities.

World War II

The industry reached its greatest heights during World War II, when it produced some 300,000 aircraft over four years. Massive government assistance, including construction of giant defense plants, several of which survived into the twenty-first century, and large-scale transformation of the automobile and other industries into aircraft and engine production contributed to the achievement. The buildup was not free of production and contract problems, but a small number of labor disputes or shortages of critical supplies and wide employment of women workers aided the production success. Light aircraft companies produced their models for military roles and subcontracted to larger firms. Manufacturing, largely situated on the east and west coasts before the war, spread throughout the country.

The war spurred rapid technological advances, and aircraft companies cooperated to an unprecedented degree on technical matters. Pressurization, radar, further engine advances, and flush riveting extended aircraft capabilities. Two wartime developments led aviation's future: the helicopter and the jet engine. Both had been envisaged since the beginning of flight, but they did not reach practical application until the war. Igor Sikorsky tested the first American helicopter in 1939, and it entered into active service during the last year of the war. The United States acquired British jet technology, and contracts for further development were awarded to such firms as Allison (a division of General Motors), Pratt and Whitney, General Electric, and Westinghouse, which soon gained the capability to develop new jet engines. The United States also benefited from captured German technology in delta and swept wings, rocket engines, and missiles. The Aircraft Industries Association (later the Aerospace Industries Association) succeeded the Aeronautical Chamber of Commerce as the chief industry trade association in 1945.

After World War II

Victory resulted in massive contract cancellations and a severe industry contraction, but business recovered with the Cold War buildup. The United States strengthened its domination of world airliner markets with the four-engine Lockheed Constellation and the Douglas DC-4, which originally served as wartime military transports, and their successors. Progress was not without problems, however, as airliner demand expanded and contracted according to business conditions with repercussions for manufacturers.

A wide though unrealistic expectation of mass private airplane ownership in the postwar era was fueled by prosperity and large numbers of military-trained pilots who desired their own planes. Production, mostly of small two-seat trainers, reached record levels in 1946, but the boom soon ended. Several manufacturers went into bankruptcy, and established companies such as Piper were imperiled. Orders for military variants of light aircraft during the Korean War (1950–1953) buildup helped, but private and utility aviation did not regain growth until the mid-1950s. Agricultural aviation, originally involving conversions of such types as the Stearman biplane trainer, became a growth market from 1953 on. Piper, Cessna, Grumman, Call, and others produced specialized agricultural aircraft.

Military-supported research and development led to impressive progress in the 1950s. Jet and rocket power, area-ruled fuselages, advanced wing platforms, and titanium in structures enabled supersonic flight, even from aircraft carriers. By 1954, the aircraft industry had become the largest American industrial employer, the preeminent technological industry, and the linchpin of national security in a nuclear world. All companies enjoyed busy factories with Cold War demands, exemplified by the licensing of the high-priority Boeing B-47 to Douglas and Lockheed. Despite the American companies' world leadership in military and commercial aircraft, light aircraft, missiles, and helicopters, the future of the industry looked bleak in many respects by the end of the decade. Production never again approached wartime levels, and each succeeding aircraft generation was far more complex and expensive than the last, making development beyond the capabilities of smaller firms. Several major firms incurred large financial losses. Mergers were regarded as

both inevitable and essential, yet most companies were still dominated by the founders or by long-serving executives, who were reluctant to exit aircraft production or to merge.

The industry structure in 1960 remained similar to that at the end of the World War II. Merger proposals additionally were subject not only to military influence but to antitrust review. The number of firms slowly declined with the dearth of new programs, falling production, cost overruns, and management difficulties. Such renowned companies as Douglas, North American, Convair, Chance-Vought, and Republic eventually disappeared through merger after 1960. Bell transformed entirely to helicopters and the pioneer firm Martin exited aircraft development. Such changes raised concerns about the declining competitive environment.

The British had pioneered jet airliners, but U.S. military technology directly benefited airliner development. American airliners soon dominated the world market, equipping some 90 percent of the world fleet outside the Soviet bloc. Foreign designs were simply uncompetitive. Profitability remained elusive, however, and Convair, Lockheed, and finally Douglas abandoned the field. Business or executive flying grew steadily with twin-engine models, led by the prewar Beech Model 18, becoming significant factors. Piper, Cessna, and the new Aero Design firm also developed business twins. Even larger transports were used by corporations, although most were conversions of smaller wartime bombers and transports.

Progress with efficient smaller engines led to new executive models, such as the Grumman Gulfstream turboprop and the Lockheed and North American business jets. The growing market also aided diversification efforts of primarily military contractors. The Learjet, whose development began in Switzerland, flew in 1963 and spurred further growth in that sector. Single-engine light aircraft, numerically the most important segment, made steady progress with more comfortable, all-metal, tricycle-gear models, some with turbo-charged engines. Private flying remained too expensive for the public, however, and business flying dominated general aviation, the term used for all aviation outside military and scheduled commercial operations.

The industry was further transformed by the growing space and missile programs supported by the National Aeronautics and Space Administration (NASA), formed in 1958 to succeed NACA. Such programs involved not only the aircraft industry but also other technology companies, including the "big three" automakers. The aircraft industry became known as the aerospace industry, and guided missiles and the manned space program assumed large portions of total business. Martin, Douglas, North American, Grumman, and Boeing led the Mercury, Gemini, and triumphant Apollo programs.

The Vietnam War (U.S. involvement 1964–1975) spurred strong demand for helicopters in armed combat, and civil applications increased as well. Turbine power increased capabilities markedly. American fighters, led by the McConnell F-4 Phantom, were widely exported. General aviation manufacturers prospered, and the leading firms of Piper, Cessna, and Beech eventually became subsidiaries of large conglomerates. Demand for small business jets was highly cyclical, but long-term growth attracted new competitors, including the significant Cessna Citation series.

The aircraft industry was consistently the leading American industrial exporter. Composite structural materials, stealth technology, supersonic turbofan engines, and increasing computer use for design and in the cockpit were all impressive, but the number of prime contractors still declined as aircraft service lives were extended and new programs became more rare in the post-Vietnam era. Total aircraft production had declined from some 18,000 in 1969 to under 3,000 in 1987. General aviation production suffered the sharpest drop. Fairchild exited aircraft in 1986, and in the 1990s Grumman merged with Northrop, General Dynamics sold its military aircraft division to Lockheed, Martin and Lockheed merged, and Boeing acquired McDonnell Douglas and the remaining North American aerospace operations from Rockwell. Only two major military contractors, Lockheed Martin and Boeing, remained. With plant closings, southern California was no longer the center of the industry.

The end of the Cold War led to a decline in defense spending as a percentage of the GDP. New aircraft and missile programs declined in urgency. The space program also declined over time. The aerospace industry was no longer the leading industrial employer, as employment dropped below 1 million in 1993 and continued to fall. Concerns rose that technical capability would be lost and that aging aircraft would increase maintenance difficulties and would endanger military readiness. Commercial business displaced military as the largest sector of the industry, but the European Airbus consortium gained strength in the 1980s, posing a credible threat to American dominance.

Out-of-control product liability costs almost destroyed small aircraft production from the early 1980s until legislation eased the problem in 1994. At that time single-engine aircraft production began to recover. Innovative new firms, such as Lancair and Cirrus Design, became significant. Earlier rising aircraft prices had created strong growth in the kit or homebuilt segment, which provided opportunities for entrepreneurs in the field. General aviation remained vulnerable, however, because it was the first sector hurt in a recession and the slowest to recover. Even the respected Mooney firm suffered bankruptcy in the 2001 slowdown.

The aerospace industry became increasingly globalized, as components for many aircraft were constructed in other countries. Great Britain became a partner in the important Joint Strike Fighter (JSF) program awarded to Lockheed Martin in 2001. Several general aviation and helicopter programs were developed multinationally or received foreign financing. Despite its long decline, aerospace was still critical to national security and global competitiveness but could survive only with highly diversified technology companies with lessened dependence on military contracts.