Aerospace industry fears economy will clip wings

December 13, 1990|By Ted Shelsby | Ted Shelsby,Sun Staff Correspondent

WASHINGTON -- Donald Fuqua, president of the Aerospace Industries Association, projected a "less than rosy" outlook in the year ahead for the nation's major defense and aerospace contractors but stressed that the picture is "not as dismal as some have painted it."

Speaking at the trade group's annual year-end review and forecast lunch at the Grand Hyatt Hotel, Mr. Fuqua said the final 1990 figures are expected to show a 5 percent decline in the number of aerospace and defense workers. This translates into a loss of 69,000 jobs.

For 1991, he predicted that employment will fall 2.3 percent, which would mean the loss of 29,000 more jobs.

According to figures released by the trade group, defense workers are feeling more of the pain of the industry's economic belt-tightening than their commercial aerospace counterparts.

Employment in the military aircraft sector, for example, is expected to be down 10.2 percent this year and 8.9 percent more in 1991. That would mean a loss of 35,000 workers this year and 27,000 more in 1991.

Two of Maryland's larger defense contractors -- Westinghouse Electric Corp. and Martin Marietta Corp. -- are expected to be affected differently by the shrinking defense budget. Westinghouse, the state's largest manufacturer with about 16,000 workers, anticipates stable employment in the years ahead.

But Martin Marietta expects to lay off 5 percent to 8 percent of its 1,200 workers at a Glen Burnie plant that produces electronic listening devices used to find and track enemy surface ships and submarines.

Mr. Fuqua told the approximately 400 people attending yesterday's forecast meeting "that the industry might be able to maintain something close to current activity and employment levels by expanding sales to foreign customers."

He noted that increased exports would be good not only for U.S. companies but for the country as well, by reducing unit costs through increased production and longer production runs.

It's not going to be easy to pick up more foreign sales, Mr. Fuqua told the meeting. "Our major competitors are looking in the same direction as we are because they face a similar problem: They need more foreign sales to compensate for their loss of domestic defense business as their own military establishments downsize," he said.

He said that competition in the international aerospace market is expected to "escalate from fierce to furious" in the years ahead.

Mr. Fuqua, a former Florida congressman, said the biggest obstacles to increased exports are federal government policies, practices and attitudes that limit the industry's ability to sell abroad.

He said that the government needs to work in partnership with the industry, supporting marketing efforts to the same extent that competitor governments support their industries.

"We need elimination of those policies still in effect that hamper civil and military export sales," he said.

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