The A large and established aerospace production line is a national resource or so it seems to many high officers in the armed services. corporation's managers, shareholders, bankers, engineers, and workers, of course, will enthusiastically agree. The Defense Department would find it risky and even reckless to allow a large production line to wither and die for lack of a large production contract. This is especially so because for each of the aircraft production sectors (large bombers, fighters, and military transports), there are actually only a few potential production lines out of the nine major lines we have listed. Large bombers are likely to be competed for and produced by only General Dynamics, Rockwell International, and Boeing; fighters and fighter-bombers by only General Dynamics, Rockwell International, Boeing, McDonnell division, Grumman, and Vought; and military transports by only Boeing, Lockheed-Georgia, Douglas division and, for small transports, Grumman. Thus, there is at least latent pressure upon the Defense Department from many sources to award a new major contract to a production line when an old major contract is phasing out. Further, the disruption of the production line will be least and the efficiency of the product would seem highest if the new contract is structurally similar to the old, in the same functional category or production sector, i.e., is a follow-on contract. contract renovates both the large and established aerospace corporation that produces the weapons system and the military organization that deploys it. Such a This latest constraint or rather compulsion imposed on weapons procurement by industrial structure might be called the follow-on imperative and contrasted with the official imperative. The official imperative for weapons procurement could be phrased as follows: If strategic considerations determine that a military service needs a new weapons system, it will solicit bids from several competing companies; ordinarily, the service will award the contract to the company with the most cost-effective design. The follow-on imperative is rather different: If one of the nine production lines is opening up, it will receive a new major contract from a military service (or from NASA); ordinarily, the new contract will be structurally similar to the old, i.e., a follow-on contract. The follow-on imperative can perhaps explain the production line and the product structure of 15 out of 17 major contracts awarded from 1960 to 1977: (1) Minuteman III follow-on to Minuteman, (2) MX follow-on to Minuteman III, (3) Poseidon follow-on to Polaris, (4) Trident follow-on to Poseidon, (5) C-141 follow-on to C-130, (6) C-5A follow-on to C-141, (7) C-141 stretch and C-5A modification contracts, (8) F-14 follow-on to F-111 major subcontracting, (9) F-15 follow-on to F-4, (10) F-16 follow-on to F-111, (11) A-7 follow-on to F-8, (12) Spartan follow-on to Nike Zeus, (13) space shuttle follow-on to Apollo, (14) F-111 after B-58 (superficially a less certain case, but the two places are structurally similar, with the F-111 being a relatively large fighter bomber and the B-58 being a relatively small bomber), (15) B-1 delayed follow-on to B-70. In regard to another contract, Apollo, North American might have been Predicted by the follow-on imperative to receive the award: it was already NASA's largest contractor. Finally, in regard to still another contract, the STOL transport (C-15), the timing of Douglas' development contract can perhaps be explained by the phasing out of production of the Spartan anti-missile missile. 96-305 - 77 - 6 The imperatives of the industrial structure are reinforced, not suprisingly, by the imperatives of the political system. Six of the production lines are located in states which loom large in the Electoral College: California (Lockheed-Missiles and Space, Rockwell, and Douglas division of McDonnell Douglas), Texas (General Dynamics and Vought), and New York (Grumman). It might be said, however, that one should expect most contracts to be follow-on contracts. Production of the original system should give an aerospace corporation a competitive edge in technical experience and expertise which will win for it the next system awarded in the same production sector. But in at least three major cases (the government has kept other cases secret), the Source Selection Board chose, on technical grounds, a different corporation than the one already producing a similar system; the contract became a follow-on contract only when the Board was overruled by higher officials. With the F-111, the original, technical choice was Boeing, rather than General Dynamics; with the C-5A, it was Boeing rather than Lockheed; and with Apollo, it was Martin rather than North American. More importantly, it is not always obvious that there should be any new system at all in an old production sector. This is especially so because of the recent evaluation of the six functional categories or production sectors. The aerospace systems within them or follow-on contracts of course are becoming progressively more complex and expensive. In addition, bombers and anti-missile missiles seem to be obsolete; many fighter-bombers and fighters may become obsolete in the future because of the advent of precision-guided munitions; and ICBM's (MIRV's and especially MX) are becoming more destabilizing strategically because of their high accuracy or "first The analysis of weapons procurement presented here may have implications for the future. The Table indicates that recently the pressure on U.S. procurement policies has become especially intense. In 1977, the United States is confronted with the impending phase-out of four major aerospace projects and thus with the opening up of four major production lines: (1) the B-1 and Rockwell International, (2) Minuteman III and Boeing, (3) the C-5A and C-141 modification programs and Lockheed-Georgia, and (4) the A-7 and Vought. International is receiving partial compensation through the space shuttle program. Boeing will probably receive compensation through the MX or the cruise missile program. But Lockheed-Georgia and Vought each face an uncertain future and raise a serious problem. Rockwell In the public debate over weapons policy and changing priorities, four major alternative paths for major production lines have been proposed: 1. Convert production lines from aerospace to non-aerospace production. Mass transportation and waste disposal systems are the alternatives most often suggested. The normal experience of aerospace corporations with such conversions, however, has been quite limited in scope or in success, and their executives generally take a pessimistic view of the possibilities. Significant progress down this path in the next decade is unlikely. |