Guided Missile and Space Vehicle Parts and Auxiliary Equipment, NEC

SIC 3769

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing guided missile and space vehicle parts and auxiliary equipment, not elsewhere classified. This industry also includes establishments owned by manufacturers of guided missile and space vehicle parts and auxiliary equipment, not elsewhere classified, and primarily engaged in research and development on such products, whether from enterprise funds or on a contract or fee basis. Establishments primarily engaged in manufacturing navigational and guidance systems are classified in SIC 3812: Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments. Research and development on guided missile and space vehicle parts, on a contract or fee basis by establishments not owned by manufacturers of such products, are classified in SIC 8731: Commercial Physical and Biological Research.

Products manufactured by this industry are mostly airframe assemblies for guided missiles, castings for missiles and missile components, nose cones for guided missiles, and space capsules for space vehicles.

According to the U.S. Census Bureau, the value of product shipments for guided missile and space vehicle parts and auxiliary equipment fell by approximately 48 percent between 1992 and 1997. The sector of the industry showing the biggest decline was production for U.S. government military customers--not including manufacture of airframes and space capsules. Shipment values in 1997 were just 33 percent higher than 1992 levels. Nonetheless, the industry saw slight gains in shipments to nonmilitary government customers and commercial customers--between 1992 and 1997, those sectors combined jumped 36 percent.

The Annual Survey of Manufactures reported that the value of product shipments for guided missile and space vehicle parts and auxiliary equipment decreased throughout the late 1990s and early 2000s. Shipments fell from $1.1 billion in 1998 to $903.8 million in 1999, $839.7 million in 2000, and $796.1 million in 2001.

Sales for individual companies plummeted during the late 1990s as government contracts continued to shrink. Combined with the constant dismantling of missiles and reduced spending on space missions, this was detrimental for the health of the industry. Unlike many companies in the industry, leader Rockwell Collins was able to grow into the 2000s by researching and developing products and applications for both the defense and commercial markets. While the economy was unstable after the September 11, 2001, terrorist attacks on the World Trade Center, the defense sector grew both domestically and abroad.

The growth and stability of this industry are dependent on manufacturers of complete guided missiles and space vehicles, SIC 3761: Manufacturers of Guided Missiles and Space Vehicles, who act as primary contractors in the manufacturing of these products. Both industries rely largely on the world political situation that dictates military needs and on the competitiveness of the world market for space exploration and commercial space ventures, mainly in launching communications satellites.
Positive indicators for the industry included a thriving market in satellite services, whereas developments in the U.S. Space Program had less certain consequences for the industry as the twenty-first century began. Research and development for guided missile and space vehicle equipment and auxiliary parts followed the trend of the aerospace industry as a whole in its focus on reduced-cost reusable products, and the 2000s brought a research focus on global positioning systems (GPS) and the possible application for improvement of weapons systems. The United States continued to dominate the missile industry. In particular, there was almost no competition for the Advanced Medium-Range Air-to-Air Missile (AMRAAM), according to U.S. Industry and Trade Outlook.

In 2007, there were 45 firms operating 51 establishments in the industry. Nearly all the companies were small, with more than 74 percent employing fewer than 100 workers. The number of workers in this industry fell dramatically throughout the late twentieth century, from a high in 1985 of 33,700 to 6,068 in 1999. By the first decade of the twenty-first century, employment figures had rebounded somewhat, reaching 7,057 in 2008.

Manufacturing jobs in the industry were predicted to decrease as companies moved operations overseas to save on labor costs and manufacturing technologies made human intervention less necessary. Jobs most affected included precision assemblers, inspectors, and machinists, as well as secretarial and clerical workers. Employment in the engineering sector of the industry, however, was expected to increase at an annual rate of about 10 percent between 2008 and 2018, according to the Bureau of Labor Statistics.

Like other sectors of the aerospace industry, U. S. space vehicle equipment exports exceeded imports in the late 2000s. In 2008, this industry exported more than $644 million in equipment, representing a 28 percent increase compared to five years earlier. Imports totaled $537.6 million, a decrease of 3.4 percent since 2003.

Industry leaders in 2010 included Rockwell Collins Inc. of Cedar Rapids, Iowa, with annual sales of $4.4 billion and 19,300 employees, and Ball Aerospace & Technologies Corp. of Boulder, Colorado, with $383 million in annual sales in the mid-2000s and 3,000 employees. Diversified industry giants included Lockheed Martin Corp. of Bethesda, Maryland, with 2009 sales of $45 billion and 45,000 employees; The Boeing Company, with $68 billion in sales in 2009 and 157,100 employees; and the Northrop Grumman Corp. with $33.7 billion and 120,700 employees.

In 2010, the United States remained the world leader in defense spending, although the Deloitte Global Manufacturing Industry Group predicted U.S. spending in defense research and development would decrease by five percent by 2011 and the base budget for defense spending would increase only 1.8 percent--barely enough to keep up with inflation. Nevertheless, there was hope for related manufacturing industries, according to Tom Captain of Deloitte. As he stated in Investment Weekly News in August 2010, "Despite these growth challenges, the industry remains resilient and performing better than many other sectors hit hard by the recession. The imperative now will be to cut costs and grow top line revenue in new areas to demonstrate to global markets the ability to grow profits again."

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