California's Small Aerospace Suppliers Surviving Defense Downsizing.
Abstract
Six years after Congress began reducing defense outlays, small California machine shops and aircraft parts suppliers remain highly dependent on the aerospace industry. Many firms in these two segments of the state's small defense aerospace supplier base have not branched into production of cutting-edge products for commercial customers. And other firms in these segments also may face shortages of software and product design engineers and of skilled machinists. So concludes a recent RAND analysis of the impact of defense downsizing on California companies. The study investigated how 25 small, California-based suppliers in the defense aerospace industry machine shops and aircraft parts makers; 11 electronics firms and materials firms-weathered the Pentagon's budget downturns of the early 1990s. But while noting these warning signs for several of the industry's subgroups, the RAND study found that much of California's small aerospace supplier base has survived the slide in Pentagon business, turning to commercial customers and other lines of production, increasing their productivity and, if necessary, reducing their work forces to compensate for lost defense aerospace revenues. Indeed, the state's small aerospace supplier infrastructure remains fundamentally intact, despite drops in defense revenues and overall employment levels. Few, if any, small aerospace suppliers intend to relocate from California, with its rich sources of customers, suppliers, and employees.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 01, 1996
- Accession Number
- ADA322395
Entities
Organizations
- RAND Corporation