No, it’s not a typo in the headline. This is still the 2018 Forecast issue, and an array of aerospace experts weigh in on risks and opportunities for the coming year, starting on page 34. However, I am affording you the luxury of 20-20 hindsight via this fantasy retrospective. By propelling you a year into the future, you can look back at 2018 with satisfaction on the wise decisions you made.
Good thing you paid attention to the small news items about raw-material price increases this year when you did, and secured adequate material supplies before you had to pay more. The economy was booming, production was strong, and everything looked promising for a successful year. But you knew that historically, those conditions create an environment ripe for inflation, especially with demand up and production capabilities stretched thin for the metals used in manufacturing aircraft components. For example, you saw that Inconel scrap prices in Alabama more than doubled in value in January compared to the same time in 2017. You paid attention when aluminum spot prices went up and warehouse stock levels were reported to be low as 2018 began. When a supplier announced lead times for sourcing titanium had increased from 12 weeks to 20 weeks and for customers to expect prices to rise 3% to 4%, you took steps to make sure you had adequate stock on hand.
Interest rates have been historically low, but the Federal Reserve slightly raised the rate as 2017 ended and hinted it would continue to raise interest rates in 2018. You anticipated this, negotiating loans for expansion before interest rates went up, so you had ready cash for those inflationary increases in the cost of doing business.
It was a challenging year for recruiting new talent in aerospace, but at least you redoubled initiatives to ensure young, talented people will consider a career in manufacturing. The task became even more difficult last January, when recreational marijuana use became legal for adults in California. The entire U.S. West Coast, Nevada, and Colorado – states with well-established aerospace industries – suddenly faced increasing competition in hiring drug-free employees.
Despite the Western states (plus Alaska, Massachusetts, and District of Columbia) that allow recreational marijuana, its use is still against federal law. Regulations mandating drug-free workplaces for federal contractors did not change, nor the risk of contract termination, payment suspension, or contractor debarment for violations.
Knowing that drug use often starts before adulthood, you reached out to local trade schools and high-school guidance counsellors and invited grade-school students to participate in your Manufacturing Day event in October. You got involved in sponsoring science, technology, engineering, and math (STEM) activities such as robotics competitions and code-a-thons, and made a convincing case for staying drug-free to keep doors open to a rewarding career in manufacturing – with all its awesome technologies.
You didn’t do all these things in 2018 and suffered the consequences? Wait, there’s time to make amends. The year is still young. – Eric