Following World War II, the American aerospace industry underwent a significant transformation from an industry that primarily depended on federal government military orders and mail contract subsidies to one that increasingly relied on the civilian sector and the construction of passenger aircraft. Nevertheless, the government had a central stake in the aircraft industry's success: the Soviet threat required assembly lines for military aircraft that remained constantly open, and the flow of aerospace products could not be halted or even slowed for long periods of time without posing dangers to national security.
New technologies and the need to surpass the Soviet Union's military capabilities dictated industry practices that had not existed in the years between World Wars I and II. Aerospace manufacturers now had to retain skilled workers, keep plant space and equipment available, and conduct ongoing research and development (R&D) on weapons, all the while attempting to stay competitive in commercial aircraft design and sales. When possible, these new demands led to "dual use" designs of aircraft, such as the KC-135 tanker and the Boeing 747 airborne laser laboratory. Most of the time, however, the demands of the Air Force and U.S. Navy—the two largest purchasers of military aircraft—meant not only that companies had to develop separate military aircraft that had no civilian use, but that the specific needs of the different service branches required a different airplane for each branch.
Procurement of aircraft thus became extremely costly, and some politicians expressed concern about what they saw as waste. John F. Kennedy's secretary of defense, Robert McNamara, in an attempt to streamline procurement, oversaw a program to build a joint-service fighter aircraft, the TFX (Tactical Fighter Experimental), designed by General Dynamics and Grumman. McNamara's effort was a disaster: the Navy and Air Force had vastly different requirements for a fighter plane. Attempting to meet both sets of requirements increased the weight and diminished the performance of the airplane until it was no longer a fighter plane. Although ultimately the aircraft that emerged from the program proved effective, it was not a fighter but a bomber, called the F-111B. From that program, both the Pentagon and the aerospace industry learned that there was no inexpensive way to ensure top performance of weapons systems.
Whereas in the interwar years the U.S. government had kept many aviation firms alive by postal subsidies,
the scope and cost of Cold War weapons programs made that impossible. Instead, the government settled on long-term procurement contracts that were both geographically and politically balanced to ensure the support of Congress. For example, Grumman, based in New York, received a contract for the famous F-14 Tomcat fighter, while McDonnell Douglas (Missouri) won the contract for the F-15E Strike Eagle; Lockheed Martin (California) received orders for the F-16 Fighting Falcon; and Boeing (Washington and Kansas) was given orders for the Army's Longbow helicopter. Although each of these weapons has performed exceptionally well in service, there is no question that political pressures to ensure that various parts of the nation received federal largesse played a role in the ultimate selection of the contractor.
Cold War realities also dictated that most aircraft manufacturers also move into missile, electronics, and satellite work. Major companies all either formed their own missile/rocket divisions or merged with independent space firms, as occurred with Martin-Marietta Corporation. The Martin Company founded its missile division in the 1950s, for example, and in 1956 signed a famous deal with the U.S. Navy to produce Polaris/Poseidon missiles for the ballistic missile submarine fleet. Even so, at the end of the Cold War there were massive layoffs in the industry, whose overall employment fell in some states by half.
As the cost of aircraft and missiles soared with each new advance, the Pentagon found that it could not purchase as many units of any aircraft, reducing the numbers of total contracts and thus competitors. Lockheed Corporation, for example, after its commercial L-1011 failed to generate anticipated sales, nearly closed its doors before the federal government arranged a massive bailout in 1974. The Lockheed rescue illustrated the government's concern that several competitors remain viable for aerospace weapons.
By the 1990s, only Boeing, with its massive commercial division and successful designs, was not substantially dependent on government contracts for its survival. Waves of mergers, such as that of Lockheed-Martin-Marietta in 1995, left only a handful of aerospace manufacturers. With the end of the Cold War, however, the sheer numbers of weapons needed by the government declined, and instead the emphasis shifted to highly capable, fully integrated aircraft such as the Joint Strike Fighter and the Bell-Textron Cobra Helicopter. The performance of the F-117 Stealth Night Hawk, the tactical aircraft of both the Navy and Air Force, and the helicopters and transport planes of the Army and Marines in the Gulf War, Afghanistan, and Iraq, all suggest that the aerospace industry has met the new demands and continues to produce fighting machines second to none.
In the twenty-first century, the war on terror and the wars in Afghanistan and Iraq have introduced new demands for national security, eliminating the "peace bonus" expected when the Cold War ended in 1991. With increased spending on defense, including aircraft and missiles, the military-industrial complex that President Eisenhower warned of in 1961 continues to play a major part in the American economy and society. However, despite the somewhat increased defense spending, the aerospace industry is not in good shape: the September 11, 2001 attack severely damaged it.
Bilstein, Roger. The American Aerospace Industry: From Workshop to Global Enterprise. New York: Twayne Publishers, 1996.
Coulam, Robert F. Illusions of Choice: the F-111 and the Problem of Weapons Acquisition Reform. Princeton, NJ: Princeton University Press, 1977.
Schweikart, Larry. "Hypersonic Hopes: Planning for NASP, 1982–1990." Air Power History 41 (1994): 36–48.
Schweikart, Larry. "Policy Lessons of the National Aerospace Plane: Apex to Termination, 1992–1995." In Studies in Aeronautical Research and Development, edited by Roger Launius. College Station: Texas A&M University Press, 1999.