AIA President and CEO Marion Blakey ()
Despite warnings of catastrophic damage to the defense industry as a result of the sequester, 2013 turned into a fairly average year, the Aerospace Industries Association (AIA) reported Wednesday.
In its annual year-end report AIA said that industry military aircraft sales dropped six percent, and missiles and space both dropped five percent. But despite those declines, an uptick of four percent on defense exports helped the industry and the Pentagon’s use of previously unobligated funds softened the blow. Net profit after taxes across the aerospace industry was up 17 percent to $23 billion.
“I recognize that there are going to be some naysayers out here who are going to be quick to point out that AIA’s gloomy past predictions about sequestration may not feel so gloomy in 2013,” AIA President and CEO Marion Blakey said at the association’s annual year-end lunch Wednesday.
“So let me address that now, head on. Yes, we certainly raised the alarm about what mindless budget cutting would do to national security and the economy — including remarks I gave at this very dinner last year. And I’m not going to walk away from either the tenor or the tone of those remarks. The fact is that we had a much different year than we anticipated because the sequester in 2013 was reduced and mitigated.”
Companies have also seen very strong profits during the past year, largely due to dramatic payroll cutting, which showed up in figures released by AIA. The aerospace industry as a whole employed 618,000 people in 2013 — down from 631,000 in 2012 — and is the lowest number the industry has seen since 2005.
The association also projected a strong 2014, with increases in essentially every defense category and overall sales up 5.5 percent.
On Tuesday the organization also announced that it had selected the leaders of its board for 2014. Michael Strianese, L-3 Communications CEO and 2013’s vice chair, will serve as chairman in 2014 with David Joyce, CEO of GE Aviation, filling in as the new vice chair. Strianese succeeds Wes Bush, Northrop Grumman CEO, who served as chair in 2013.