With a rapid surge in long awaited, pent up travel demand, aerospace manufacturers brace for an extraordinary labor crunch.
At the beginning of last year, the unfamiliar Covid-19 pandemic abruptly brought air travel to an unexpected halt, obliterating jobs and eliminating the demand for new planes. Fast forward to today, the development and introduction of the Covid-19 vaccine continues to alleviate previous worries and escalate travel demand to make up for the previous year. In fact, Southwest Airlines peaked it’s order for their Boeing Co.’s 737 Max this week, and now expects that they will spend $1.5 billion on aircraft in the year 2022-more than double it’s previous projections. Simultaneously, United Airlines currently estimates an order of at least 100 Max Jets, and Boeing reports it’s fourth running month in May, where their orders surpassed cancellations. Serving as Boeing’s leading competitor, Airbus SE, rapidly executes company plans in order to outdo it’s pre-Covid growth with their best selling A320 series by 2023. While this raises doubts within the minds of most analysists, strong measures call for cut-throat competition, elevating the need for almost perfect supply chain. However, implementing this is easier said than done.
To make matters worse, aerospace suppliers already struggles to keep up with the fast pace of production targets from Airbus and Boeing even before the pandemic, where airline complaints regarding quality control and delays became common. Now, these previous issues indicate a monumental pressured situation with the struggle to rehire workers.
Upon the arrival of Covid-19, the government issued assistance to keep thousands of airline employees on payroll, whereas factory workers went without such assistance. Consequently, aerospace companies heavily depended on layoffs to cut their costs while preserving cash during the rout in air travel. Since the World Health Organization (WHO) announced the pandemic last March, both U.S.-based aerospace and defense companies have reported more than 115,000 job cuts. Additionally, there remains the debate in the aerospace market now arguing whether there will be enough passengers to whether there will be enough planes,
Eliminating 65,000 jobs throughout the pandemic, Boeing , General Electric Co. and Raytheon Technologies Corp have indicate that a high percentage of those cuts will remain permanent as they improve manufacturing processes and invest in automation. Inevitably, they will need to rehire factory workers and engineers.
For example, Raytheon states that over half of their eliminated jobs in its commercial aerospace divisions will return, and once these significant leaders return to the labor market, they’ll face intense competition from manufacturers alongside the current state of the economy. In April, U.S. job openings surged to 9.29 million according to the Bureau of Labor Statistics data released this week. Focusing in the manufacturing industry, climbing open postings reached a record 851,000 in April. Major companies complain and struggle with the difficulty of hiring people in these extreme circumstances. Furthermore, about 284,000 manufacturing workers quit their jobs in April, the most since January 2001.
In the grand scheme of it all, it’s understandable that many qualified employees steer clear of the aerospace manufacturers that got rid of them when times got tough.
In order to get workers back, aerospace companies must offer higher pay. Wages in the manufacturing industry climbed 4.8% in March compared with those in the previous year — but then notably jumped about 6% for those in the middle of job changes. In all honesty, this is a good problem for the industry to face- a recovery definitely beats the downfall cased by the pandemic. However, the path back to full recovery poses a significant amount of it’s own challenges and adversity.
As the aerospace industry enters a record breaking state of emergency of demand, now is the time time shift gears and hit full speed in preparation for a severe storm. With in depth knowledge of the aerospace industry, our team of experts can prove attentive guidance to ensuring that your supply chain execution is flawless, leaving no room for error as the competition stiffens during a labor shortage. Additionally, our thorough experience managing successful operations in aerospace/manufacturing facilities prove our abilities to invite adequate workers to your company to fill positions in order to reach high goals. Don’t wait until the situation escalates beyond repair, Contact us TODAY for a consultation.