There have been numerous comparisons between the automotive and aerospace industries, and an October 2009 article from Aviation Week even asked, “Could Wichita become the next Detroit?” Many aircraft suppliers are learning from the automotive industry and some have recruited executives from the sector. Given the recent turmoil and challenges faced by the cyclicality of the automotive industry and its participants, the actions taken may provide valuable insights for the aerospace industry, which has historically also endured its share of volatility.
During the past 18 months, the automotive industry experienced one of the worst periods in its history. All industry participants, from original equipment manufacturers (OEMs) and suppliers, to automotive dealers, were affected. Suppliers experienced significant volume declines, immense liquidity constraints and a severe tightening of the credit markets. Few companies were adequately prepared, and all were required to adapt quickly to the new economic conditions and take significant actions to remain viable. This time period can truly be characterized as a fight for survival in which there were many casualties.
While the extraordinary government aid at the OEM level clearly helped to stabilize the industry, we have found that supplier survival came down to the following key factors…
Seaport-Enhanced (Seaport-e) is a $5.3 billion multiple-award umbrella contract that let the US Navy and Marine Corps use an integrated approach to contracting for support services. Most requests involve engineering, financial, and program management support. Receiving an award makes a firm eligible to big on jobs under a pre-set contract vehicle, and the SeaPort-e portal provides a standardized means of soliciting bids and awarding task orders.
In FY 2010, the US Navy awarded indefinite-delivery/ indefinite-quantity multiple-award contracts to 556 contractors. These contracts are in addition to the existing 1,675 contracts previously awarded under the SeaPort Enhanced (SeaPort-e) acquisition program…
Lockheed Martin Corp. in Akron, OH received a $16.7 million undefinitized ceiling priced order under a previously awarded contract, to build various components for the MK54 vertical launched ASROC (anti-submarine rocket) missiles. Work will be performed in Akron, OH, and is expected to be complete by August 2012. This contract was not competitively awarded by the US Naval Inventory Control Point in Mechanicsburg, PA (N00104-07-G-0726, #0006). See also FBO solicitation.
The Mk-54 is the USA’s newest lightweight torpedo, replacing the older Mk-46. The RUM-139 VL-ASROC can be crudely described as a rocket attached to a break-away torpedo, which offers a number of advantages. One is an expanded firing range of up to 15 nautical miles or so. Another is the ability to load VL-ASROCs into Mk.41 vertical launch systems. A loaded cell can give even ships without deck-mounted torpedo tubes a snap-response capability against enemy submarines.