corporations which produce such systems. II. Aerospace Systems and Aerospace Corporations Aerospace systems. The major military aerospace systems produced for the U.S. government at some time during the period from 1960 to 1977 have been the following, grouped according to six functional categories or production sectors: (1) bombers: the B-52, B-58, B-70, and B-1 (only two prototypes of the B-70 were produced before it was cancelled, and probably only four prototypes of the B-1 will be produced, given President Carter's decision to cancel production of a larger number ); (2) fighter-bombers and fighters: the F-111, F-4, F-14, F-15, F-16, and A-7; (3) military transports: the C-130, C-141, and C-5A; (4) missile systems: Minuteman and Polaris and their MIRV successors or "followons," Minuteman III, Poseidon, and Trident; (5) anti-missile systems: ABM, including the Spartan and Sprint missiles; (6) space systems: the Apollo moon program and the space shuttle program, both having some military value or spin-offs. Major new military aerospace systems presently planned for production in the next few years are an STOL transport (probably the C-15), the cruise missile, and perhaps the MX missile, which would be a follow on to Minuteman III. These add up to 24 major military or military-related aerospace systems for the 1960's and 1970's. For most of the 24, the procurement of the system has involved or will involve expenditures which amount to at least $3 billion and, in some cases, as much as $15 billion. Aerospace Corporations. Lockheed. In 1960, there were a large number of aerospace corporations which produced military aircraft, missiles, or space systems. Four stood out, however, in the sense that each received in fiscal year 1961 military and space "prime contract awards" of some $1 billion or more: General Dynamics, North American, Boeing, and During the decade and a half since, each of these four corporations has continued to receive normally each year $1 billion or more in military and space contracts, although Boeing and North American Occasionally dropped below that amount. (North American changed its name in 1967 to North American Rockwell when it merged with a smaller company, Rockwell-Standard; the corporation again changed its name in 1973, to Rockwell International). In addition, some aerospace corporations which were minor contractors in 1960 expanded their military and space sales during the 1960's until they too reached the $1 billion level. McDonnell, which received military and space contracts of $295 million in FY 1961, greatly expanded its military sales, primarily with the In FY 1961, Douglas was awarded contracts of $341 million, much of which went to research and development programs for Skybolt, an air-tosurface missile cancelled in 1962, and for Nike Zeus, the first anti-missile missile; in FY 1966, the last year before the merger, Douglas was awarded contracts of $539 million. Since 1967, the merged corporation of McDonnell Douglas has normally received each year contracts of $1 billion or more. Grumman, another minor contractor in FY 1961 with contracts of $249 million, also greatly expanded its military and space sales, primarily with two large subcontracts awarded in the early 1960's, one for the aft fuselage of the F-111 and one for elements of the Apollo moon program. In 1968, Grumman also reached the $1 billion level. Thus, for the past decade or so, there have been six aerospace corporations which produce military aircraft, missiles, or space systems and which normally receive some $1 billion or more in military and space contracts each year from the U.S. government; in FY 1976, General Dynamics, Rockwell International, Boeing, Lockheed, McDonnell Douglas, and Grumman were each awarded contracts amounting to $1 billion or more. A seventh, smaller contractor should also be noted, the division of the conglomerate LTV, formerly Ling-Temco-Vought. Vought Vought is one of the largest aircraft producers after the big six; it is also part of a conglomerate with annual sales - commercial as well as military of more than $3 billion. Although it received less than $100 million in military and space contracts in FY 1961, Vought also expanded its military sales in the 1960's, primarily with the A-7 Corsair, which, like the F-4 Phantom, was used extensively in the Vietnamese war. We should consider Lockheed, which is normally the largest military contractor, as having two main military divisions, LockheedMissiles and Space, located in California, and Lockheed-Georgia. Similarly, we can split McDonnell Douglas into its McDonnell division in Missouri and its Douglas division in California. There are thus nine major production lines. (Another large aerospace corporation and a tenth major production line, Northrop, produces fighters for sale to foreign governments; we shall not discuss it here.) Given these aerospace systems and aerospace corporations, it is possible to construct an economic explanation for several cases of weapons procurement. We shall refer to this economic factor as "the follow-on imperative." III. The Follow-on Imperative and U.S. Defense Procurement We can chart the major military aerospace systems according to the production line to which the U.S. government awarded the contract and according to the years when major development or production phased in or out or is scheduled to do so. Some interesting patterns result (see Table). About the time a production line phases out production of one major government contract, it phases in production of a new one, usually within a year. In the case of new aircraft, which usually require Further, a development phase of about three years, the production line normally is awarded the contract for the new system about three years before production of the old one is scheduled to phase out. In the case of new missiles, the development phase usually is about two years. in most cases, the new contract is for a system which is structurally similar while technically superior to the system being phased out, i.e., the new contract is a follow-on contract. (An exception is Apollo, but (now Rockwell International) even here North American was NASA's largest contractor before the Apollo contract was awarded; in the case of the B-1, the follow-on was one step removed from the B-70.) |