Introduction
The aerospace industry has witnessed a sloppy growth over the past few years. This is facilitated by different factors based on the historical aspect or trend within the industry. Since it opened its doors back in 1930, Grumman has witnessed a tremendous growth and drop within the industry (Northrop Grumman, 2013). The company was initially founded by six members plus fifteen different employees within one year as they fulfilled the first government contract. The following analysis provides a clear analysis on the downsizing in the aerospace industry through focusing on the Grumman Aerospace Corp.
Analysis
Grumman military aircraft traces back in 1933 after the development of the FF-1 which is a Navy biplane fighter plus proceeding to the Navy intruders, current Navy F-14 Tomcat, and Army Mohawks(WWW.hq.nasa.gov). The company is also credited for producing the Ag-Cat for the crop spraying and dusting plus jet Gulfstream 11 Corporate transport among others. During the proffered period, the company was able to a competitive edge within the market through the diversification of services among other aspects Hennigan (2011). The award of a contract availed from Department of Transportation, the company diversified in the field of passenger conveyance under the Tracked Air Cushion Vehicle (TACRV) Northrop Grumman (2013). Under the proffered aspect, wind tunnel testing has largely been executed plus testing being scheduled based on Federal High Speed Ground Transportation Test Center based in Pueblo plus Grumman TACRV Colorado (Northrop Grumman, 2013). The notion attached to the proffered case aligns with the Grumman story built on the respective approaches above.
During the earlier existence of the company, it established a reputation based on the excellence in their design plus the manufacturing of the aircrafts, the qualities that were attached to the forefront especially during the Second World War. Based on the reputation on excellence and quality established by the company during the proffered period, the company was able to deliver over 17,000 combat plans although it won five Navy “E” production awards, receiving a Presidential Medal of Merit plus the establishment of unequalled production record on military with over 600 Hellcats within a one month window in a single plant(Northrop Grumman, 2013). The Grumman Hellcats, Avengers, Wildcats were produced hence accounting for over two thirds of the enemy aircraft that was involved in the destruction of the Pacific Theater Northrop Grumman (2013).
Furthermore, the reputation founded by the company over the period largely facilitated to the development of an admirable record especially in the commercial field as established by the company. Their commercial success can be traced in 1936 after the implementation of the amphibious Goose plus also via the current day success under Gulfstream 11 which was a twin jet corporate transport(Northrop Grumman, 2013). The company is also credited for the establishment of the global reputation on commercial craft especially based on their quality services and the durability among other factors.
The space age propelled the production of large amount of military aircrafts hence leading to the greatest period that the company witnessed expansion since the World War 11 (Northrop Grumman, 2013). The period also facilitated the establishment of the Grumman and the respective geographic location established on Long Island hence becoming one of the prime technological sources for the support of the US in space. The company contributed to the currently witnessed success within the organization creating a competitive edge within the industry. Such developments enabled the company expand on the operations, productions and the number of employees employed by the organization.
Back in 1969, the company accomplished a structural reorganization facilitating the growth of the organization based on the aerospace industry plus other diverse and competitive industries(Northrop Grumman, 2013). Over 40 years of operation, the company was termed as Grumman Aircraft Engineering Corporation. However, during the period two words: Aircraft Engineering were removed from the proffered title. The reorganization led to the formation of the parent organization referred to as Grumman Corporation, Grumman International, Inc, Grumman Allied Industries, Inc., Grumman Data Systems Corporation, and Montauk Aero Corporation (Northrop Grumman, 2013).
The proffered list of subsidiaries developed by the company aligns with the organizations marketing targets plus the leadership teams that are currently managerially and also operationally developing their own business objectives. These subsidiaries have also enabled the company create a competitive edge within the market while also ensuring other sources of capital are created within the organization. However, despite the proffered development and success witnessed by the organization in the recent past, the company has been experiencing downfalls on differing areas within the market forcing the organization develop strategies to lower the number of employees among other strategies. These downturn experienced within the industry are based on different factors witnessed within the industry and the organization in general. The following analysis stipulates some of the current or recent developments witnessed by the organization in relation to downsizing aerospace industry.
Back in 2011, Northrop Grumman planned to cut over 500 employees through offering buyouts as the aerospace industry has been downsizing through the anticipation of small Pentagon budget. The company proposed a voluntary buyout program aimed ensuring that 500 people(Northrop Grumman, 2013). The undertaking by the company was a second trend within a less than year period as the company’s operations recorded in Southern California which is home to over 23,00 employees under the aerospace division hence experiencing job losses. The company undertook the decision few weeks after relocating their corporate headquarters from Century City to Fall Church, Va. The relocation also witnessed sending of over 300 employees plus other high ranking executives to East CoastMuhammad El-Hassan (2013). The developments and the respective undertakings by the company are based on the marginal losses that the company has been experiencing in the last few years. The decision by the company to lay off some of their employees was attributed by the marginal losses recorded by the company in the recent years as facilitated by the failure to meet the expected financial objectives or goals.
In response to the undertaking by the organization, the company’ spokesman argued that the decision is based on the defense budget uncertainties with the pressures from the current and projected business being some of other factors facilitating the decision. The company adjustment on the budget by the end of the year availed some of the challenges on some of the undertakings that the company seeks to execute or achieve by 2012(Northrop Grumman, 2013). The company termed the step as vital towards addressing the affordability aimed at allowing the company competes effectively through a cost conscious marketplace.
The downsizing within the winder aerospace industry is reflected on the new budget as availed on the Washington reports based on the Congress decision tightening purse strings on the Pentagon. This is facilitated by the reduction in the number if attacks in United States soil especially after the September 11, 2001 terrorist attack that witnessed increase in the military spending by double digits annually Hennigan (2012). The reduction on the proffered spending largely attributes to the witnessed downsize within the industry affecting companies such as Northrop. Despite the success witnessed by the organization in the recent past in relation to the resources and financial resources witnessed within the organization, the company is currently faced with a challenge to due to the reduction on the government expenditure on military being one of the major source of the company’s resource. The reduction by hundreds of billions of dollars in military spending as projected within the industry is likely to have marginal implications on the company’s budget.
However, the downsizing in aerospace industry is not only affecting Northrop through the reduction of 500 jobs but also other companies such Boeing Co. that reduced over 900 of the 3,700 jobs located in the Long Beach plant housing the C-17 cargo jets. Lockheed Martin Corp is also another company affected by the downsizing aerospace economy where it reduced over 1,500 positions(Northrop Grumman, 2013). The implications are devastating not only to the company but also to the affected employees who are losing very good plus well paying jobs likely to have marginal implications to the economy in general.
The reduction in the number of employee is one of the strategic undertakings that the company is executing towards lowering the amount of spending. Aerospace giant company aimed at reducing the number of the employees under a long-term cost reduction initiative with no specific part within the program. The reductions on the expenditure occurred across the different functions and the organizations with the company arguing that the number of the reductions they had no specific number on the reduction across the sector.
The major cause of the downsize in aerospace industry despite the increasing need for space exploitation is based on only the reduction on the demands of such products but mainly on the reduction of spending budgets by the government. Furthermore, the increasing pressure by the military contractors towards reduction of costs towards adjusting on to the automatic and the cross the board spending cuts by the government are also some of the forces behind the experienced downsizing within the industry. Such developments among others have largely contributed to the downsizing economy among other entities. The response strategies by the company to operate within restrict budgetary allocations to suit the needs of the organizations aligns with some of the widely embraced strategies by some of the organizations currently. However, the effectiveness of these strategies towards enabling the organization achieves the set objectives has raised questions on the marginal implications it reflects to the society. The affected employees are forced to seek employment elsewhere within the highly competitive market. These undertakings among others have left the workers vulnerable to possible cuts by the organizations as the resources fails to meet the growing demand within the organizations. The notion attached to the proffered approach depicts the essence of developing effective strategic measures that enables the organizations address such issues while ensuring the needs of the employees and other stakeholders are incorporated in the developed policies.
Conclusion
Grumman Corp has witnessed marginal growth within the industry in the past years especially during the witnessed World Wars. However, after the settlement of peace in the global environment, companies dealing with military or aerospace entities have witnessed reduction in demand among other aspects. Grumman Corp, a giant aerospace company is one of the numerous companies affected by the downsizing aerospace market based on different aspects witnessed within the market. One of the sign of how the reduction on the government spending on aerospace market witnessed by Grumman is through the plan by the organization to reduce the number of jobs in the past few years to align with the strict financial demand. These undertakings among other strategic approaches executed by the company reflect the downsizing aerospace company as some of the competitors within the industry also follows on the same trend. The vulnerable undertakings are based on the fact that the government which is the major client of such an organization is reducing on military expenditure facilitated by the prolonged peace prior to the World Wars experienced in the past.
The analogy attached to the proffered analysis depicting the downsizing aerospace industry indicates how different strategic measures enacted by organizations to curb overspending are likely to have marginal impacts within the organization and the society in general. The fact that companies such as Boeing are also cutting on their expenditure through reduction on the number of employees (200) jobs through standardizing of the satellite designs indicates how organizations are reducing workers who initially executed initial designs or works within the organizations. However, with the current ISIS crises and rise of Russia among other emerging trends in the global scene is likely to propel the government to review the budget on military spending towards addressing such crises among others. The increasing efforts to restore peace in the global environment are the duty of world superpowers towards diluting the possibility of World Wars. Grumman Corp among other aerospace organizations are some of the companies that have largely been affected by the decision by the government to lower military spending which has been growing marginally in the past few years. The strategic approaches embraced by such affected organizations are having marginal impacts not only on the organization but also on the entire economy.
References
Northrop Grumman offers Voluntary layoffs at aerospace sector; Aerospace and Defense Muhammad El-Hassan, 2013, Daily Breeze
Northrop Grumman to cut 500 aerospace jobs; W.J, Hennigan, 2011, Los Angeles Times
Northrop Grumman to cut 200 jobs at two sites; W.J. Hennigan, 2012, Los Angeles Times
Northrop Grumman, 2013 Report
