1 -- labor aerospace research agenda © 2002 massachusetts institute of technology developing the 21...
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1 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Developing the 21st Century Aerospace
Workforce
Presentation to:
May 2002
MIT Labor Aerospace Research Agenda (LARA),
Center for Technology, Policy and Industrial Development, MIT
http://mit.edu/ctpid/lara
“Right Skills, Right Place, Right Time”
2 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Key ChallengesKey Challenges
Demographic “cliff” Average age of production workers is 44 in the Commercial Sector and 53 in
Defense
BLS estimates 20-30% of the engineering and production workforce will retire within five years
Increasing skill shortages/changing skill mix Inadequate number of scientists and engineers in the educational pipeline and/or
demonstrating an interest in aerospace
Inadequate number of apprentices in the pipeline and lack of incentive for individual establishment or firm to make these investments in the absence of an overall industry commitment to do so
Changing skill mix – increased importance of information and science-based technologies, communications and team-based interaction skills, and other shifts in skills needed for development/production of aerospace products/services
Reduced attractiveness of aerospace; increased competition from other industries
Reduced innovation in products, processes and services
Declining appeal of aerospace for current and next generation workforce. Less than 20% of current workforce would encourage their children to pursue careers in
aerospace
Increased attractiveness of other sectors for the “best and brightest”
3 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Key Challenges Key Challenges (cont.)(cont.)
Divisive & potentially immobilizing concerns over job security & instability Industry has lost over 500,000 jobs since 1990
Destabilizing shifts as a result of industry concentration, frequent shifts in government spending, rapidly changing technologies, suppliers seeking business out of aerospace, and changing corporate leadership vision and strategies
Fundamental changes in the nature of work and labor management relations Importance of stability for continuous improvement in new work systems and the
diffusion and sustainability of labor-management partnerships
Islands of innovation in work systems and labor-management relations exist, while the majority of relationships reflect a traditional arms length, command and control mode. Aerospace lags other industries in the use of knowledge-driven work systems and supporting labor-management partnerships
Aerospace lags other industries in use of knowledge-driven work systems and supporting labor-management relationships
Global competitive dynamics Projected loss of U.S. jobs and revenue due to increased global competition
Projected increase in foreign content; projected job growth in European Aerospace
4 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Recommendation 1: Recommendation 1: Interagency Aerospace Interagency Aerospace Workforce Task ForceWorkforce Task Force
Create a cross-departmental task force – spanning the Departments of Defense, Labor, Education and Commerce – to coordinate government workforce initiatives centered on attracting and retaining a 21st Century workforce with the skills and capabilities needed to support a world-class aerospace industry.
Charge this Task Force to fund or otherwise help ensure world-class apprenticeship and training programs for production and technical workers and the educational programs needed for ensuring a steady and adequate supply of engineers, scientists, and managers for the aerospace industry.
5 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Recommendation 2: Recommendation 2: Aerospace Capability Network Aerospace Capability Network
Create and fund an Aerospace Capability Network to develop public/private partnerships in which all key stakeholders—business, labor, government, and community groups—coordinate activities such as: Development of aerospace skill standards and
certification programs, Dissemination of information on occupations and job
availability, Grants for demonstration projects at local and regional
levels to foster the growth of aerospace-related industry and mitigate the impact of instability on employment and program performance and to facilitate worker mobility across firms when necessary.
6 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Recommendation 3:Recommendation 3:Aerospace Industry Innovation Aerospace Industry Innovation
& Promotion& Promotion
Develop and implement a strategy for diffusing best practices in career development, employment relations, and life-long learning across the industry.
Mount a national campaign to attract public attention to opportunities within the aerospace industry targeted to primary schools, secondary schools, community colleges and universities coordinated through the Aerospace Capability Network and funded through public and private sources.
7 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Recommendation 4: Skills and Recommendation 4: Skills and Employment Relations Employment Relations
Requirements Statement Requirements Statement
Defense Department procurement contracts in excess of a designated amount (such as, for example, $50 million) should include “Skills and Employment Relations Requirements Statement” which would include:
The primary skills and capabilities anticipated as essential for execution of the contract
An assessment of investment required to develop/maintain these skills and capabilities over the project or product life-cycle
An assessment of the quality of the work systems and labor-management relationships in place and plans for continuous improvements in these domains over the life of the project/contract
Workforce impact statements and plans associated with major shifts in government funding
An assessment of skills and capabilities associated with work that will be placed outside of the U.S. (with specific number of jobs involved and verification of adherence to international labor standards).
8 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Concluding CommentConcluding Comment
All of the above recommendations require substantial contributions from public and private sectors – not just contributions of funds, but of leadership time and attention
We call for a deep commitment to fundamental cultural change in this industry – valuing human capital as the key to future success.
9 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Appendix: Selected Appendix: Selected Supporting MaterialsSupporting Materials
Recommendation 1: Aerospace Workforce Investment
and
Recommendation 2: Aerospace Capability NetworkWhy worry about instability?Highlights from case studies on InstabilityInstability and program performanceInstability and the loss of critical skillsMitigation of Instability – most common and least common practices
Recommendation 3: Aerospace Industry PromotionDeclining experience levelsLooking ahead to the next generation
Recommendation 4: Human Capital Impact StatementsFundamental changes in the nature of work Sales and employmentImports and employment
Background on MIT’s Labor Aerospace Research Agenda (LARA)Overview on LARASample LARA Publications
10 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Why Worry About Why Worry About Instability?Instability?
0100200300400500600700800900
1,0001,1001,2001,3001,400
1985 1987 1989 1991 1993 1995 1997 1999
Year
(In
Thou
sand
s)
Source: AIAPrepared by: IAM Strategic Resources Department
PullPullPullPull
FlowFlowFlowFlow
StabilityStabilityStabilityStability
T1 T2 T3 T4 T5 T6 T7 T8 T9 T10
Inte
rdep
ende
nce
Time
Total U.S. Aerospace Employment
11 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Highlights From Case Highlights From Case Studies on InstabilityStudies on Instability
Types of instability: Funding/orders
Shift from R&D to production funds
Fluctuations in demand for primary product in facility
Technology Changes in customer
requirements
Shifts in materials
Rapid pace of change in computer capabilities)
Environmental constraints
Organizational Acquisition/layoffs
Mergers/restructuring
Relocation of products among facilities
Two-tier relationship between sister facilities
Demographics -- retirements/gaps in past hiring, skill shortages
Turnover -- management, engineering, and hourly
12 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Highlights From Case Highlights From Case Studies on Instability Studies on Instability
(cont.)(cont.) Observed mitigation strategies:
Business Strategy Increase proportion of commercial business sought
Shift in product mix to increase focus on space
Human Resource Management/Industrial Relations Cross-training/flexible utilization/teams
Informal no-layoff practice
Labor-management partnership
Employee involvement
Intensified training of hourly and salaried employees
Co-location of engineers, teams
Two-tier wage system
Multi-facility transfer agreements
13 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Instability and Instability and Program Performance Program Performance
Table 1. Average Annual Program Cost Growth and Its Sources
Source of Program Cost Growth
Government Sample Average
Annual Cost Growth (N=101)
Contractor Sample Average
Annual Cost Growth (N=80)
Budget or Funding Instability
2.3% 1.8%
Technical Difficulties 2.4% 2.7%
Requirements Changes 2.5% 2.7%
Other 0.1% 0.8%
Total 7.3% 8.0%
Source of Program Schedule Slip Government Sample Average Schedule
Slip (N= 76)
Contractor Sample Average Schedule
Slip (N= 66)
Budget or Funding Instability 8.2% 7.8%
Technical Difficulties 6.3% 5.8%
Requirements Changes 5.0% 3.4%
Other 4.2% 4.0%
Total 23.7% 21.0%
Mean Baseline (months) 85 70
Table 2. Sources of Program Schedule Slip
Source: Eric Rebentisch, MIT Lean Aerospace Initiative, 1996
14 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Instability and Instability and Loss of Critical Loss of Critical
SkillsSkillsPercent of Facilities Reporting Loss of People with Critical Skills
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Budget or FundingInstability
Instability Associatedwith New Technology
OrganizationalInstability
Supply Chain Instability
Organizations Reporting Low Levels of Instability
Organizations Reporting High Levels of Instability
Source: MIT Labor Aerospace Research Agenda National Facility Survey, 1999 (n=194)
15 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Facility Survey: Reported Use of Facility Survey: Reported Use of Mitigation Practices – Five Most Mitigation Practices – Five Most
Extensively Used Practices (past 3 Extensively Used Practices (past 3 yrs) yrs)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cross-training Employeetraining/skills devt.
Long-term supplieragreements
Computer-aidedmanufacturing
Increasedemployee control
Never
LimitedExtensive
Source: MIT Labor Aerospace Research Agenda National Facility Survey, 1999 (n=194)
16 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Facility Survey: Reported Use of Facility Survey: Reported Use of Mitigation Practices – Five Least Mitigation Practices – Five Least
Extensively Used Practices (past 3 Extensively Used Practices (past 3 yrs) yrs)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Formalemployment
security
Early retirement Work in from otherfacilities
Sending people toother facilities
Work sharing
NeverLimitedExtensive
Source: MIT Labor Aerospace Research Agenda National Facility Survey, 1999 (n=194)
17 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Declining Experience Levels -- Declining Experience Levels -- Military Aircraft ProgramsMilitary Aircraft Programs
XP5Y XFYXP5Y XFYA2D F8UA2D F8UXC120 F6M1XC120 F6M1F4D U2F4D U2F3H SY3F3H SY3B52 F105B52 F105A3D X13A3D X13X3 C133X3 C133S2F F107S2F F107X2 B58X2 B58F10F F106F10F F106F2Y F5DF2Y F5DF100 X14F100 X14B57 C140B57 C140F102 T2F102 T2R3Y1 F4R3Y1 F4F104 A5F104 A5A4D T39A4D T39B66 T38B66 T38F11F AQ1F11F AQ1C130 X15C130 X15F101 F5AF101 F5AT37 X1BT37 X1B
A6A6B52B52
SR71SR71SC4ASC4AX21X21X19X19
C141C141B70B70
XC142XC142F111F111A7A7
OV10OV10X22X22
X26BX26BX5AX5AX24X24
F14F14S8S8
YA9YA9A10A10F15F15F18F18
YF-17YF-17B1B1
YC15YC15YC14YC14AV8bAV8bF/A18F/A18
F117F117F20F20X29X29T46T46T45T45B2B2
V22V22
F22 EMDF22 EMDYF22YF22YF23YF23
JSF X36JSF X36JSF X37JSF X37
C17C17JSF EMDJSF EMD
UCAVUCAV BXBX
RetiredRetired
RetiredRetired
Experience: 1-2 ProgramsExperience: 1-2 Programs
1950s1950s 1960s1960s 1970s1970s 1980s1980s 1990s1990s 2000s2000s 2010s2010s 2020s2020s 2030s2030s
Mid CareerMid Career
VeryVery FewFew
Experience: 1 ProgramExperience: 1 Program
“We believe that a declining experience level has been a contributing factor to the
problems we observe in many recent aircraftprograms.”
RAND
Experience: 6+ ProgramsExperience: 6+ Programs RetiringRetiring
40 Year Career Span40 Year Career Span
Source: RAND Study (chart by Northrop Grumman) -- Vertical Bars: Military Aircraft Program StartsVertical Bars: Military Aircraft Program Starts
18 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Future Prospects for Future Prospects for the U.S. Aerospace the U.S. Aerospace
EnterpriseEnterprise
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Engineers ProductionWorkers
Managers/Supervisors
Technicians/Specialists
“I would highly recommend that my children work in this industry”(Agree or Strongly Agree, n=482)
19 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Fundamental Changes Fundamental Changes in the Nature of Work in the Nature of Work
Social Technical
Systems Systems
Craft Production Decentralized Enterprises Custom Manufacture
Mastery of Craft Specialized Tools
Mass Production Vertical Hierarchies Assembly Line
Scientific management Interchangeable Parts
Knowledge-Driven Work Global, Network Alliances Flexible Specialization
Team-Based Work Systems Information Systems
Adapted from: “Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices” (Oxford University Press, 1998)
20 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Sales and Sales and EmploymentEmployment
Aerospace Aircraft Sales and Employment: 1960-2000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1960 1965 1970 1975 1980 1985 1990 1995 2000
(source: Aerospace Industries Association, Aerospace Facts and Figures, 2000 )
Em
plo
yem
ent
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
Sal
es (
tho
usa
nd
s)
Total Employment
Sales (Deflated, 1992=100)
21 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Imports and Imports and EmploymentEmployment
U.S. engines and parts imports as a share of total aircraft sales, 1981-2000U.S. engines and parts imports as a share of total aircraft sales, 1981-2000
4
6
8
10
12
14
16
18
20
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
Year
Sh
are
of
U.S
. A
irc
ra
ft S
ale
s (
Pe
rc
en
t)
22 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Overview on the Labor Overview on the Labor Aerospace Research Agenda Aerospace Research Agenda
(LARA)(LARA)
Sponsor: USAF ManTech
Lead Partners: IAM and other Labor Organizations in Aerospace
Principal investigators and Research Team:
Tom Kochan (Co-PI), Joel Cutcher-Gershenfeld (Co-PI), Betty Barrett, Rob Scott, Takashi Inaba, Eric Partlan, Shannon O’Callighan, Kevin Long, and other team members
Links to MIT’s Lean Aerospace Initiative (LAI):
Organizations and People, Knowledge Deployment, Other Research/Product Teams, and Curriculum Development
Funding: ~$300K/yr
Focus: Impact of instability on employment
and workplace innovation in the aerospace industry
Investments in social capital and institutional infrastructure driving future success in aerospace
Methods National random sample facility
surveys
Individual surveys
Case studies
Collective bargaining contract analysis
Archival data analysis
Conferences and working sessions
23 -- Labor Aerospace Research Agenda © 2002 Massachusetts Institute of Technology
Sample LARA PublicationsSample LARA Publications(available at (available at http://http://mit.edu/ctpid/laramit.edu/ctpid/lara))
Resource Guide: Collective Bargaining in the Face of Instability: A Resource for Workers and Employers in the U.S.
Aerospace Industry
Case Studies: A Decade of Learning
International Association of Machinists and Boeing Joint Programs
Transformation Through Employee Involvement and Workplace Training: The Challenge of a Changing Business Context
Rocketdyne Propulsion and Power and the United Automobile Workers
Employing Activity Based Costing and Management Practices Within the Aerospace Industry: Sustaining the Drive for Lean
Boeing Commercial Airplane Group, Wichita Division and the International Association of Machinists
Fostering Workplace Innovation and Labor-Management Partnership: The Challenge of Strategic Shifts in Business Operations
Pratt and Whitney (UTC) and the International Association of Machinists
Fostering Continuous Improvement in a Changing Business ContextTextron Systems
From Three to One: Integrating a High Performance Work Organization Process, Lean Production, and Activity Based Costing Change Initiatives
Boeing Commercial Airplane Group, Wichita Division and the International Association of Machinists
Note: LARA Research is also incorporated into Lean Enterprise Value: Insights from MIT’s Lean Aerospace Initiative (Palgrave, 2002)