Members of the Aerospace Industries Association (AIA) are urging Congress to address inflation, an economic reality impacting small businesses and suppliers in the aerospace and defense industries.
In a letter to leaders in the House and Senate last week, the AIA said the most important step Congress can take to help companies is to fully fund the government through full-year appropriations and not continuing resolutions.
“As you know, inflation is a national challenge affecting businesses across the country. Costs for manufacturing inputs remain persistently high – in some cases, the prices of parts and materials are 100 to 200 percent over normal levels,” the letter reads. “Inflation is also creating delivery delays, driving up costs even further. Small businesses are being particularly hard hit by rising costs and associated uncertainty.”
AIA said members of the defense industrial base face unique challenges, coupled with growing demand. With inflation on the rise, the costs for manufacturing remain high, the members said in their letter, with the prices of some parts and materials costing up to 200 percent their normal levels. Additionally, delivery delays are driving costs up further, the letter said. In one example, the AIA said a small business member faced such significant delays they were forced to buy their own vans to deliver products. Rising labor costs are also an issue, the letter said.
“Our industry will not be able to produce the number of items the Pentagon needs if inflation is not addressed and will unfortunately cause more small businesses to leave the defense industrial base,” the letter said. “Businesses cannot assume all of the financial risk — so they choose not to bid for contracts, fixed-price or otherwise, at all.”