May 28, 2017 1:34 pm

Trump and Aircraft Manufacturing

November 11, 2016       admin       0 comments   | Aviation Articles
aircraft-manufacturing

How will Trump’s presidency affect Aircraft Manufacturing?

Donald Trump stunned Americans and the World at large with his landslide victory on Tuesday. Most people were relying on the media polls and expected Hillary Clinton to win. So now that the unbelievable has happened, what’s the way forward? Trade and industry were key voting points for the republican demographic. Trump knew this and used them as strong key campaigning objectives. It is rather evident that future policies created by the incoming president will affect global aviation.

Trump’s emphasis was and is on returning jobs and industries to America. Looking specifically at aviation, how will this happen. There are many aviation manufacturers based in the United States. There are companies such as Boeing – 156,000 employees and Lockheed Martin – 126,000 employees. America also has several private aviation manufacturers such as Cessna – 8500 employees and Piper Aircraft – 1417 employees.

These aviation manufacturers are affected directly by international trade. The dual global import/export market effect makes it hard for these manufacturers to be competitive in world trade. Factors such as cheap labor in rival markets, high import prices for raw materials, high taxes, etc. have greatly affected the pricing of American manufactured aircraft.

Global aviation manufacturing has become very competitive. This is true for large, medium and small scale aircraft manufacturers. We have Airbus competing with Boeing for the large jet market, Canada’s Bombardier also beating Boeing in the Regional Jet market, and many small aircraft manufacturers entering the race to compete with Cessna and Piper.

Looking back at what has truly affected the American aircraft manufacturers. We must first appreciate the fact that the recession in or around 2008 did not just paralyze the general economy but greatly affected the aviation industry. With a lot of job cuts and layoffs during that period, and a lot of hourly cuts, aircraft manufacturing went down. Other long term factors such as the 9/11 attacks also led to job reduction and layoffs.

So, while I can’t say or predict what Trump will do. Here are a few things he can do to help aviation manufacturers. (1) See how to bring outsourced work back to the U. S – this will involve a combination of tax cuts and job incentives, (2) Figure out how to reduce tax on imported raw materials, (3) Reduction on finished imported products that can be produced in the U. S – higher taxes on this, (4) Improve capital formation and cash flow, and (5) Create better social and political participation from the private sector.

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