SIC 3724 Aircraft Engines and Engine Parts
SIC 3724
This industry includes establishments primarily engaged in manufacturing aircraft engines and engine parts. This industry also includes establishments owned by aircraft engine manufacturers and primarily engaged in research and development on aircraft engines and engine parts, whether from enterprise funds or on a contract or fee basis. Also included are establishments engaged in repairing and rebuilding aircraft engines on a factory basis. Establishments primarily engaged in manufacturing guided missile and space vehicle propulsion units and parts are classified in SIC 3764: Guided Missile and Space Vehicle Propulsion Units and Propulsion Unit Parts; those manufacturing aircraft intake and exhaust valves and pistons are classified in SIC 3592: Carburetors, Pistons, Piston Rings, and Valves; and those manufacturing aircraft internal combustion engine filters are classified in SIC 3714: Motor Vehicle Parts and Accessories. Establishments primarily engaged in the repair of aircraft engines, except on a factory basis, are classified in SIC 4581: Airports, Flying Fields, and Airport Terminal Services; and research and development on aircraft engines on a contract or fee basis by establishments not owned by aircraft engine manufacturers are classified in SIC 8731: Commercial Physical and Biological Research.
336412
Aircraft Engine and Engine Parts Manufacturing
The total value of shipments of aircraft engines and engine parts was approximately $23.73 billion in 2003, according to the U.S. Census Bureau. This amount represented a decrease from 2002 levels of $24.25 billion and 2001 levels of $27.49 billion. The consumption of aircraft engines is obviously a function of aircraft production and usually a multiple function due to the fact that many aircraft have several engines. The health of the aircraft industry is well documented under SIC 3721. Although military aerospace remained strong during the first half of the 2000s, the larger aircraft industry was feeling the negative effects of a downturn in the air transportation sector. This downturn affected orders for new aircraft and thus had an impact on the market for aircraft engines. By 2004 there were signs that the civil aerospace industry was picking up, which boded well for the engine and engine parts sector.
The world aircraft engine industry is dominated by three companies: General Electric (GE); Pratt & Whitney, which is a division of United Technologies Corp.; and Rolls-Royce. Each of these companies achieved its leading role through the successful development of jet engine models for commercial aircraft, though GE and Pratt & Whitney maintained significant interest in the development of engines for military aircraft. The big three offered jet engines in nearly every thrust range and competed with each other for use on commercial aircraft produced by Boeing and Airbus S.A.S. Several other engine manufacturers, including Textron Inc.'s Lycoming, were primarily involved with small jet turbines and piston engines, which power propeller-driven aircraft.
The manufacture of aircraft engines was once controlled by the same companies assembling aircraft and operating airlines, but industry regulation initiated in 1934 forced aircraft engine manufacturers to work independently of aircraft manufacturers. This antitrust legislation is partly responsible for the intense competition that characterizes the aircraft engine industry, in which each of the leading engine makers seeks to provide engines to fit the requirements of a wide range of aircraft. Engine companies are typically chosen to design an engine at the concept stage of a new aircraft. Once the engine is developed, the engine builder may try to adapt the design for other aircraft. In fact, it is common to find the same engine on a variety of competing aircraft. Engine manufacturers rarely develop an engine that is not capable of multiple applications.
For decades following the end of World War II, military funding supplied much of the research and development money that allowed U.S. manufacturers to continually upgrade their engines. Technical breakthroughs achieved on military projects found their way into commercial engine applications, thus allowing engine manufacturers to achieve substantial profits from commercial engine sales. This arrangement changed significantly after the end of the cold war when the U.S. military budget decreased dramatically. Thus, engine manufacturers were increasingly faced with incorporating the cost of research and development spending into the price of their engines.
The leading American aircraft engine manufacturers are divisions of larger corporations. For example, Pratt & Whitney is a division of United Technologies, GE Aircraft Engines is a unit of General Electric, and Lycoming is part of Textron. Pratt & Whitney and GE are thought to possess an advantage over their British competitor, Rolls-Royce, because of their corporate support, which allows them to better withstand industry cycles.
The development of powered aviation, which began with the Wright Brothers in 1903, fell mainly to those who understood engines, rather than those who understood flight. In fact, aeronautical scientists—such as Samuel P. Langley, who was perhaps the first to describe the dynamics of lift over a wing—had very little to do with powered aircraft. Instead, a pair of bicycle mechanics, Wilbur and Orville Wright, and a motorcycle mechanic named Glenn Curtiss, were the first to demonstrate propeller-driven aircraft. In fact, Curtiss gained an early lead over the Wrights and a third aviator, Glenn Martin, precisely because he knew how to build lighter, more powerful motors. The first ten years of motorized flight were pioneered by eccentric inventors working out of their garages by night and flying in air shows by day. These barnstormers relied on show earnings to pay for their building efforts, and many died in the process.
Industrial support for aviation did not materialize until European aviators demonstrated the strategic use of aircraft in World War I. Major industrial involvement in the United States occurred only after the U.S. Army requested funding for aviation projects. Financiers and industrial magnates were drawn to the industry not by their love of aviation, but by the opportunity to enrich themselves with government contracts. Some of the earliest investors in aircraft ventures were automobile manufacturers and automobile fleet owners. They sponsored specific aircraft builders and later pulled dishonest financial stunts to take control of aircraft builders' fledgling companies.
Edward Deeds, founder of Delco and the first to commercialize an electric starter, formed a one-sided partnership with the well-known Orville Wright called the Dayton-Wright Company. The company built engines, but no aircraft. The company was later acquired by William Boyce Thompson, who established the first American aircraft combine. Thompson acquired the patents owned by Wright and later Martin; he bought the rights to a light, European-designed engine called the Hispano-Suiza, and he acquired the facilities of the Simplex Automobile Company in which to build his engines. Shut out from the management of the company by Thompson and unhappy at only building engines, Wright retired and Martin started another company.
Unwilling to allow any single group of financiers to corner the aviation industry, U.S. government officials created the Aircraft Production Board to oversee the development of the American aviation industry. This board was soon dominated by the automobile industry, which assembled an industrial federation called the Manufacturers Aircraft Association. Auto manufacturers, led by the Packard and Hall-Scott Motor Car companies, convinced the Aircraft Production Board to support the mass production of a single type of aircraft motor—a 400-horsepower, 8-cylinder model called the "Liberty." As evidence of the industry's widespread complicity, this huge water-cooled engine featured an unnecessary electronic ignition system supplied by Delco. Completely inappropriate for use on existing aircraft designs, the monstrosity was better suited for a truck or a boat than an aircraft.
Under pressure from auto manufacturers, the government ordered the production of 11,000 Liberty engines. This action so infuriated Donald Douglas, the leading aircraft designer on the board, that he resigned his position and returned to making airplanes for Glenn Martin. Confident of the program's failure, he, like many other aircraft manufacturers, simply ignored the Liberty. Despite problems with Delco's starter and with the reconfiguration of the Liberty into an even larger 12-cylinder engine, the government remained perfectly comfortable entrusting the future of aviation to such experienced transportation pioneers as Packard, Hudson, Nash, and Ford.
An Indianapolis, Indiana, engine builder named Jim Allison recognized the futility of placing the huge Liberty motor in the light aircraft of the day and decided to build a light engine of his own. As he pursued the development of lighter engines, he stumbled across a variety of high-quality manufacturing techniques. Engines, he discovered, ran most efficiently at about 30,000 rotations per minute, while propellers generated the greatest amount of thrust at about 2,000 rotations. What was required was a precisely machined reduction gear. Allison was the first major manufacturer to perfect an engine and clutch mechanism with acceptable tolerances. His lead in this area greatly advanced the Allison reputation and provided the company with hundreds of profitable orders.
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