Military spending on Boeing in Seattle, 1970-1994

Boeing Spending - 1974 to 1990

The purpose of this work is to research Boeing from the year of 1974 to the year of 1990 and identify the spending by Boeing for those years in terms of projects, expenditures on projects as well as the environment within the Aircraft production industry to those specific years and the shifts and transitions of the industry and how Boeing was affected or in turn effected the industry.

Beginning business July 15, 1916 under the name "B & W," Boeing was founded by Williams E. Boeing. "B & W" changed names first to that of "Pacific Aero" and then to "The Boeing Airplane Company." William Boeing was a Yale scholar and after he acquired his knowledge and learning about the design and assembly of airplanes he put his knowledge to use however due to the legislative changes in 1934 Boeing sold his market share. The Boeing Company continued on and the first flight of the Boeing "Clipper" took place in 1938. The "Clipper" was the large aircraft of it kind of the civilian type with a capacity of 90 passengers during daylight flights and 40 passenger capacities at night. The first regular run between the United States to Europe passenger service began in the year of 1939.

Producing a great number of Bombers by Boeing was done with the aid of many women who were factory workers in replacement of the men who were off at war and by March 1944 the production was revved up to 350 planes a month. Production took place at plants that were camouflaged with all manner of green bush and shrubbery to avoid enemy detection of the aircraft production.

When the war came to an end over 70,000 workers were said to have lost their jobs in the aircraft production business due to cancellations on bomber orders as well as a general drop in business across the board at the war's end. First used during the war, the C-97 helped Boeing of the post-war slump that all manufacturers of aircrafts wee affected by. The C-97 was used to evacuate casualties during the Korean War and the Kc-97 has a boom for use in aerial refueling with almost 900 of them being built by the year of 1958. The C-97 was to be the last propeller-driven plane built by Boeing. The field of rocket technology was entered by Boeing with the Ground-to-Air Pilot less Aircraft which was Boeings first missile. Cruising at speeds that were supersonic the GAPA reached altitude of 59,000 feet in November of 1949 and was the basis for the Bomarc missiles. The Bomarc missiles were the world's first long-range anti-aircraft missile and began mass production in 1957.

I. Boeing's Growth in the 1950's and 1960's:

Boeing accounted for approximately 9% of all U.S. exports in 1985. The air craft industry is comprised of 15,000 companies. Forbes Magazine reported in August of 1986 that Boeing was the only aircraft manufacturer that was making money building airlines. Stating that since the introduction of the 707 in 1958, the first successful commercial jetliner that Boeing had produced a succession of planes that had been profitable to Boeing as well as becoming industry standards. Boeing, it seems was having problems with the 7J7 which was a new propfan jet airliner. The airliner was revolutionary was that it was an "unducted fan engine" UDF. The UDF was said to burn two-third less fuel that the other short to mid-range airliner and one-third less that the latest turbofan-powered design airliner like the Airbus Industries A320. Fuel costs were reported to have been at the rate of 30% of operating costs. However, since the Saudis chose that moment to pump more crude oil and effectively drive down the prices on oil and prices went to aw low as 55 cents a gallon which was down $1.20 from fuel costs in 1983. Fuel prices were running at around 12% of the operating costs of the new Airbus A320.

The report sated that Boeing was already losing the market share to McDonald Douglas' MD-80 and DC-9 that sold for $43 million as well as Airbus Industries a-320. Boeing reportedly would have to spend between $4 billion and $5biolion on the new propfan as well as $1 billion from GE for the engine. The expected price-tag was stated to be around $70 million. Boeing stated in the report that "We are continuing to book airliner sales at a somewhat faster pace that I would have predicted at the beginning of the year." The competition was of an intense nature and margins were being squeezed at the time. In 1985 the revenues on commercial aircraft were at $8 billion with Boeing having an operating cost of $317 million, or 4.7%. Boeing's best prospects were reportedly with new programs but those were considered to be the most vulnerable due to the budgets that were imposed as well as delays and cancellations. One of those programs was the Advanced Tactical Fighter, ATF, which is a $45 billion dollar program.

Immediately after the war the most important program was the B-47 Stratojet bomber. This was America's first swept-wing multiengine bomber. This plane depended on the wind tunnel for its design and in fact, was the first which did. The wind-swept design was a concept that has been followed in the design of every large jet airplane since. The b-47 was followed by the B-52 Stratfortress which was the first long-range wind-swept heavy bomber; it was not only the first but probably was the most significant multiengine air craft that had been built to date. Originally conceived as a "straight-wing, propeller-driven bomber. However the Air Force informed Boeing in the year of 1948 to design a jet bomber instead. Realizing that Air Force might invite other competition for the project if they delayed the group and chief engineer Ed Wells and George Schairer locked themselves up in a hotel room and using only the notes with them and a slide rule designed a balsa model and proposal in the course of only a weekend and surprisingly the Air Force was in approval of the design and began production in 1951 with the first B-52A taking flight in August 1954. During the decade of the 1950's the B-52 broke numerous records of both distance and speed.

The cold war continued and the development of an intercontinental ballistic Missile System or ICBM with the development of the Minuteman ICBM started in 1958. The first test fire was on February 1, 1961 and it was operation by 1962. Minuteman missiles were operational by 1967 and installed as six various U.S. sites. The technology that was rocket-based was use in the design of the Dyna-Soar, a reusable space vehicle staffed with a crew. The project was cancelled with a loss of approximately 5000 jobs in 1963. The concept however, once again appeared in the Space Shuttle design. Boeing bought Vertol Aircraft. The visionaries of the day are said to have foreseen a day of airliners flying faster than the speed of sound transversing the Atlantic Ocean in only five hours. In the year of 1965 the first American SST (Supersonic Transport) was built. Competition abroad was stated to have the British and French in agreement to produce their own SST called Concorde. The know-how of the Soviet's in the KGB's version named the Tu-144 was named the first commercial SST to fly, the race was historically notable.

In 1964 $100 million was appropriated in the fiscal budget in developing the American SST. TWA and Pan AM came to the foreground with $2.1 million advance toward 21 SSTs. North American had a military SST, the Valkyrie however, Boeing beat out the Lockheed D-200- and the American NAC-60 Douglas creations. While surely noting the race between the British, French and Soviets, Boeing acted quickly and deliberately and were leading the 'super-sonic transport' race, they held the belief that delivery of the 'biggest', 'fastest', and 'most efficient' design that they would with a sleight of hand recapture the market share temporarily lost to the Europeans companies. Although the design never quiet worked properly. Boeings end resulted greatly resembled the Lockheed L-2000. Sonic Boom experiments on the part of the Air Force showed that the constant sonic booming was not appreciated demonstrated through the 5,000 claims filed for damages and the 8,000 complaints.

The SST is going to be built" declared President Richard M. Nixon on the 23rd day of September, 1969. Federal Funds to the tune of $500 million had already been devoted to the project at that point in time which was stated to be 'an unprecedented amount for a single non-military project.' Amid mounting pressure applied by Senator Proxmire and others toward cutting the spending of taxpayer money on that of a civilian project.

II. Boeing: The 1970's

In the early part of the decade of the 1970's a crisis of major proportions was faced by Boeing in terms of finance as well as in purpose it would seem. Boeing had utilized vast amounts of time, labor, energy, money and resources into the Apollo Program of the 1960's for the program finally to be cut to practically nothingness in the 1970's.

I. The Apollo Program:

Expenditures for the cost of the Apollo Program were in the total amount of $25.4 billion dollars. There were 11 manned Apollo flights, 381.7 kg of moon material was recovered during the course of the Apollo missions and although there are those who believe that the motivations for the Apollo missions were that of a "psycho-political" nature, the one gift that America and the world were given by the Apollo program was the realization of the reality of "how fragile the earth is."

At the time the Apollo program essentially caved in Boeing also was losing hope in the production of commercial aircraft as they had placed their hopes on the B747 and the price of producing the aircraft was much higher than originally predicted. Boeing had to let over 1/2 of the 80,000 it employed go in the Seattle operations alone. However, the B747 did finally enter into service in 1970. The Boeing 747 is "four-engine long-range airliner" and is said to have "changed the way of flying."

II. History of the Aircraft Industry in Brief:

The aircraft industry was the second largest employer in the United States after the automobile industry in the 1980's. Two studies were performed focusing on the loss of jobs in the United States during the years of the 1970's and 1980's. One looked at employment in manufacturing from 1972 to 1980 and the stated findings were that the economy had experienced a stagnation resulting in the 4.5% decline in manufacturing employment. Further that the demand for unskilled labor was down resulting in unemployment levels that ranged from 6% to 20% in all sectors of the manufacturing industry. Another stated factor voiced by Adrian Word an Economist from Sussex is that Third World exports are having a great affect and the problem is that "rationalism" is destroying jobs. The laborers in Third World countries will work for less hourly wages and will work longer hours. "Low-wage economics" had taken effect.

It appears that the multinational companies are not very active in the world trade markets and tend to keep production within a one-state area in a type of area specialization which keeps the whole product at a better overall value. It also appears that during this time Boeing was receiving thousands of foreign parts from approximately 160 different countries and furthermore was paying inflationary rates that were quiet simply exorbitantly outrageous prices. During this era the "price-gouging" of the airlines was in the news quite often and the knowledge that toilet seat for an aircraft ran in excess of $1,000 became common news.

II. Boeing's piece of the Space Pie

The Space Program is the never ending journey. When in the 1970's the creation of the first reusable spacecraft and as well the first capable of taxiing large satellites to and fro between earth and orbit the projected service time for the shuttle was projected to be a "life-time" of service or to be equal to 100 launches. The main purpose of the shuttle was the construction and service of the space stations. The realization of this purpose was fulfilled through the international space station presently in operation. Sadly, the shuttle did not have quite enough lifespan to follow the dream which was incidentally dashed against what must have been clouds of pure steel as Columbia caught fire on it's re-entrance into the earth's atmosphere killing each member of the culturally diverse crew in the Shuttles last flight. The Columbia's debris was scattered across many of the U.S. States as it blazed out in glory yet miserably in defeat.

III.Aviation Integration for Performance and Security:

In the beginning to the Shuttle program, Star Wars was President Reagan's pet project and government military spending was on the upward swing. The design of the Space Shuttle was said to be "radically different" than what NASA specifically needed but the Shuttle did meet the AF goals and was somewhat cheaper to fly. It has been stated that the regulation imposed by the Air Force is that which caused the craft to be so complex in design. One of the issues which affected the Shuttle was the inflationary environment of that time. Inflation was at the highest in recorded history which had the effect of driving cost up almost twice the original price.

However, taking into the account the aspects of inflationary effects the $500 million dollar ticket was still far too much in surpassing the original projection of $100 million. Even granting due consideration to the maintenance and servicing of aircraft the amount of $400 million dollars in difference from projected budget to actual budget is not explained. The design of the shuttle had four main components. The first component was the orbiter itself, which was reusable. Secondly there was an expendable external tank which loosened itself from the Shuttle exactly 8.5 minutes after take-off and at precisely 109 kilometers this external tank breaks loose and falls into the ocean where it remains unrecovered. This large external tanks attaches to fittings connecting it to two internal tanks one of which is at the forward of the shuttle and one at the aft. These two fuel tanks pump the fuel into the three main engines of the orbiter. The fuel in the pair of solid rocket boosters is a propellant composed of ammonium percolate which is an oxidizer that is 70% by weights and aluminum fuel 16% separated after laugh at 66 kilometers and recovered in the oceans as it is landed softly via a parachute. The shuttle's dimensions are as follows:

Space Shuttle: 184.2 feet tall

Orbiter: 122.17 feet long

Wingspan: 78.06 feet

Weight at lift off: 4.5 million pounds

Weight at the missions end: is 230,000 pounds

Maximum cargo to orbit: 63,500 pounds

Orbit: 115 to 400 statute miles

Shuttle velocity: 17,321 miles per hour.

While in the midst of war the different aircraft industry entities had pulled together and worked very well together collectively in the defense of the United States. However, the competitive nature of the industry was in full throttle during the days of Reagan's Star Wars Program. The original conception of the Space Shuttle was the design of an airliner type craft. After having landed the Orbiter would mate to its' system and within the span of approximately two weeks be prepared for another launch. At the time there were 25,000 workers in the Space Shuttle production, assembly, and design and operations employment. Numerous improvement have been made to the Shuttle however, the external design was never quite as it should have been which was painfully obvious with the descent of Columbia a couple of years ago.

The Space Shuttles final assembly took place at the Decatur, Alabama Boeing Plant on the Tennessee River where the shuttle was shipped in and out. A concrete driveway was poured to the docking area because the weight of the Shuttle would have cracked an asphalt paving.

IV. U.S. Trade in Commercial Aircraft and Parts (1970-2000)

During the 1970's and early 1980's Boeings production contracts on the B-52, the KC-135 and the Minutemen were all coming to an end. The word was for all salesmen to aggressively bid on new business and they did so underbidding contracts and even bidding and winning contracts that they did not have the specific know-how in making good the performance of. Boeings light helicopter deal at the time that of four different prototypes that are under a development contract in the amount of $2.8 billon. Production was to begin in 1996 and $220 million was already invested in the project.

The Chart bellows reflects the growth of ITT and can be traced to the competitive nature of the world air sector. Boeing and Airbus are mainly competitive in term of pricing, quality of product and reputation.

Commercial Airline Manufacturing:

During the late part of the 1970's Boeing Aerospace Corporation was studying concepts for a single stage rocket powered orbit vehicle that would use technology already existing. The project was called the name of "Reusable Aerospace Vehicle comprising a ground-based sled that would serve for acceleration of the aircraft to the speed needed for take-off on a conventional runway and a delta-winged piloted orbital vehicle. Called the RASV it was designed to be constructed of titanium and Rene-41, conventional refractory metals. The RASV would be powered by the main Space Shuttle Engines.