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AEROSPACE: IS THE VIETNAM HANGOVER ENDING?

By Michael Millenson |

The Dallas-Fort Worth area (particularly Fort Worth) is one of the major aerospace manufacturing centers in the country and, indeed, the world. Here, General Dynamics makes the F-16 fighter, a lightweight plane that the U.S. Air Force and our European allies will rely upon heavily at least through the 1980’s. Here, Vought Corp., whose A-7 attack plane was the workhorse of the Navy during Vietnam, makes large subsections of commercial airliners. Here, Bell Helicopter Textron makes almost half the helicopters produced in the U.S. each year.

The roots of the local aerospace industry stretch back to the military needs of World War II. In April 1942, Consolidated Aircraft Co. opened a B-24 “Liberator” plant that would later evolve into the Fort Worth division of General Dynamics. Then North American Aviation began putting together B-25’s in Grand Prairie, in a facility attractive enough to lure Chance Vought (later Vought Corp.) from Connecticut in 1948.

And, in 1951, Larry Bell liked the flying weather here well enough to build a carbon copy of his Buffalo, N.Y. Bell Aircraft Corp. facilities in Fort Worth and call the new location home. (In 1960, Bell was bought by Textron Inc. of Providence, R.I.)

Together, the “Big Three” manufacturers employ close to 32,000 persons, support an annual payroll of more than $600 million, and had combined sales in 1978 of over $2.1 billion.

The appeal of good weather, an experienced labor force, and a hospitable economic climate endures today. For instance, the North American subsidiary of French aerospace giant Aerospatiale is located in Grand Prairie. Begun as a tiny subsidiary of LTV Corp. in 1969, Aerospatiale Helicopter Corp. now assembles and customizes copters worth $45 million in sales yearly. (The copter frames are built in France and shipped here.) AHC employs 230 workers for a $10-million annual payroll and expects those numbers to double within the next three to five years.

The large aerospace manufacturers bring satellite manufacturers with them. At least 50 smaller firms in Addison, Weatherford, and points in-between are listed as manufacturers of the specialized aircraft parts that large companies find uneconomical to make in-house.

The amount of money the large companies spend locally is impressive. Bell Helicopter Textron, for instance, estimates that in 1978 it gave purchase orders of one type or another (including office supplies, janitorial services, and the like) to 1500 local subcontractors. Total value: $124 million. Vought Corp. estimates that it spent $54 million on local purchases in 1978. General Dynamics says it puts $100 million yearly into subcontracts. (The company estimates its local economic impact at $600 million annually.)

The specialized subcontractors also draw business from other parts of the country. For instance, Hexcel Corp., an Arlington machining shop, has received over $450,000 from McDonnell Douglas Corp. in St. Louis, a big area subcontractor, to produce honeycomb cores to strengthen portions of the F-18A fighter-attack plane.

That plane, now passing through its prototype tests, has already brought $1.7 million in subcontracts to this area, McDonnell Douglas estimates. Since the company has commitments to buy 1400 of the planes by 1992, the order books and payrolls of local subcontractors are sure to increase sharply.

Major non-manufacturing firms (excluding the airlines, a story in themselves) provide important services to the aerospace industry. The Greenville Division of Dallas-based E-Systems Inc., for instance, does a great deal of classified military work on airborne communication and navigation systems. The division also modifies large corporate planes and commercial airliners. Its payroll in 1978 was $28 million, while local purchases amounted to $4 million. Other important aerospace service firms include Cooper Airmotive, based in Houston, which overhauls corporate aircraft in Dallas and other Texas cities; Rockwell International’s Collins division, whose Dallas headquarters oversees production of avionics systems elsewhere; and Texas Instruments, which also produces some avionics equipment.

Mitsubishi Aircraft International, headquartered in Dallas since October 1977, is the home base for corporate planes actually manufactured in San Angelo. The company, part of Mitsubishi Heavy Industries Ltd., Tokyo, employs 45 persons here (payroll: $1.5 million), but predicts major expansions here and in San Angelo if plans for a new jet, in addition to its two turbo-props, work out.

Like Mitsubishi, other aerospace firms in the area are optimistic. The industry as a whole has been through some rough times: The post-Vietnam hangover dropped employment sharply after 1968, as government demand for helicopters, planes, and the technology of space exploration went inexorably downhill.

The past several years, however, have seen an upbeat trend, thanks to a booming commercial airliner market, corporate demand for business planes and copters, and the need to replace a generation of aging military craft. General Dynamics, with a workforce approaching 14,000, enjoys a promise of $16.5 billion worth of Air Force orders for F-16’s. There are also prospective foreign buyers, including, perhaps, a $2.34-billion Canadian purchase. (That order, to be decided later this year, pits the F-16 against McDonnell’s F-18A.) General Dynamics’ manned bomber program, now close to comatose, may be revived by a Congress increasingly worried by Soviet military capabilities.

Vought Corp., LTV’s subsidiary, employs about 9000 workers in this area. It won an important subcontract in February to build tail sections on Boeing’s new wide-body, medium-range plane, the 767. The company will face tough competition for a similar contract on the sister 757 plane later this year. Military contracts also remain important to Vought, which has faced considerable belt-tightening as its A-7 production fades into the sunset.

Bell Helicopter Textron, meanwhile, is closely monitoring this month’s mail for a U.S. Coast Guard announcement of its choice to supply 200 medium-range copters over a several-year period. Bell, with 8700 employees, has high hopes that its new Model 222, just coming into production, will win that contract. Even without it, though, Bell expects the 222, a light twin-engine ship, to please enough corporate buyers to keep Bell comfortably in the lead spot of U.S. and world helicopter manufacturers.

The Coast Guard copter contest bears one similarity to the Canadian decision over fighter planes: Whatever company wins, Dallas/Fort Worth can’t lose. For the Coast Guard contest, Bell’s only competitor is its Tarrant County neighbor, Grand Prairie’s Aerospatiale Helicopter Corp. In Canada, General Dynamics’ F-16 is up against the F-18A of McDonnell Douglas.

The forecast has to be that the aerospace industry will continue to fly high here for some time to come.

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