The great depression had a massive impact on both the United States military and civilian aircraft markets. In 1928, the last full calendar without any great depression impacts, 3,582 civil aircraft were sold valued at $17,194,000. During the same year 1,219 military aircraft were sold valued at $19,066,000. With the onset of the great depression both the military and civil markets plummeted.
The military market over the next eight years average 60% of their 1928 total units sold whereas the civil market only averaged 34% of their 1928 total units sold. By 1936 the military market recovered to 94% of their 1928 units sold level while the civil market was just starting to rebound and was at a 44% level of their 1928 units sold. On average the US aircraft industry sold 34.2% of their units to the military and 65.8% to the civilian market. However, by market valuation 60% was in the military market and 40% in the civilian market.
The Golden Years of Aviation
The Golden Years of Aviation are the period of aviation between the two world wars 1919 through 1939. By 1937 ninety-eight US aircraft manufacturers competed in the market space. However, the military market required higher levels of performance, engineering, manufacturing complexity, and investment. Thus, less than a fifth of the ninety-eight manufacturers produced military aircraft. The military market in the late 1930s accounted for 70% of the marketplace valuation and the larger aircraft manufacturers became more dependent upon military sales.
These golden years saw a major transformation in the aircraft industry going from fabric covered biplanes to aluminum cladded airliners, fighters, and bombers. Research and development moved from small garage shops to systematic engineering and laboratory facilities. New forms of manufacturing were required to form aircraft curved sections without incurring the high-cost presses utilized by automotive industry. The US aircraft manufacturers were learning the basics of program management.
Production Upgrades
Assembly line production and economies of scale transformed US industrial manufacturing into a juggernaut. Aircraft manufacturers were in a bind implementing these transformational practices as their production rates were low. Produce enough parts to achieve economy of scale and the parts might be obsolete before they are needed. Therefore, corporate financial analysts came into play working with engineers and program managers finding the best economic balance.
With the upsurge in civil and military aircraft manufacturers in a new industry saw ideas sprout forth at a high level. Employees traveled from one employer to the next taking lessons learned with them. Cross pollination of ideas was an American manufacturing strength implemented via conferences and symposiums both within an industry, across industries, with academia, with the government, and sometimes with all. Technology advances were copied and improved upon.
Financial incentives to improve technology and capture profits were protected by strong patent laws. Patented technology usage agreements between companies allowed the patenting company to maintain an income stream thus protecting their initial innovation investments.
Comparative Importance of US Military Civilian Aircraft Markets Data
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Source: Holley , Irving Brinton, Jr. “United States Army In World War II Special Studies Buying Aircraft: Materiel Procurement For The Army Air Forces.” 1964, Page 21, Center of Military History United States Army, Library of Congress Catalog Card Number: 64-60000, https://history.army.mil/html/books/011/11-2/index.html, Data accessed on July 12, 2022
Other US Production Data Links
US WW2 Production – Combat and Motor Vehicles
US WW2 Production – Guns and Munitions
US War Cost of Production by Category
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