How is the Financial Crisis Affecting the Aerospace Industry?

Courtesy of Lockheed Martin

With the financial crisis at its peak, very few people are discussing how the aerospace and defense industries will be affected.  Remembering back to the great depression, it was the aerospace and defense marketplaces that brought America out of its most financially turbulent era.  The manufacturing of military aircraft and other government projects created jobs at a faster rate than any other industry of the time.

The field of aerospace has been investigated for millennia, but modern aerospace began with the first powered flight at Kitty Hawk, North Carolina on December 16, 1903, by the Wright brothers. From there, aerospace has grown to be one of the most exciting, diverse, and fast paced fields of today. From the hot-air balloons of 18th century to the first wood-and-cloth plane of Wilbur and Orville Wright to the first manned mission to the moon on Apollo 11 to the new and exciting aircraft being developed by companies like Boeing, Airbus, and Bombardier, aerospace has come a long way in a little over a century.

So how will the financial crisis affect the aerospace market?  August Cole from the Wall Street Journal had this to say about the situation, “In the wake of Congress’s emergency action to rescue the nation’s financial system, some top leaders have made it clear that they must find ways to pay for it. Rep. John Murtha (D., Pa.), chairman of the House Appropriations Committee’s defense subcommittee, warned that the bailout will only increase the pressure on Pentagon officials to find ways to balance their needs for new programs with paying for ongoing military operations in Iraq and Afghanistan.  “No matter who wins the White House, the next president is going to be forced to decrease defense spending in order to respond to neglected domestic priorities,” Mr. Murtha said. “Because of this, the Defense Department is going to have to make tough budget decisions involving trade-offs between personnel, procurement and future weapons spending.”

It is key that the newly elected political regime understand the vital role that the aerospace and defense industries play for the economy.  If defense budgets are cut, that will force layoffs indstry-wide, which will further damage the economy.