A Look at What’s in Store for Business and Workers : It won’t be dull, that’s for sure. The new year will see dramatic changes for U.S. industry and the American worker. Business writers at The Times polled experts on what is likely to happen in 1989. Here is their report. : AEROSPACE
Aerospace firms are facing some potentially bleak years ahead, as the Pentagon wrestles with a financial crisis brought on by overly optimistic budgeting during the Reagan Administration. The military services have spent billions of dollars for research and development of new weapons, but now they don’t have adequate funding to put all of those weapons into production.
The crisis resulted from dubious projections in the early 1980s that defense budgets would continue growing at a rapid clip. Not only have the procurement budgets stopped growing, but they have been contracting sharply on an inflation-adjusted basis.
The result is that at least some of the weapons that were developed at a cost of billions of dollars may never be built. Other systems will be stretched out into the future.
And new program starts will be curtailed for some time. The industry is not about to fall into the same abyss that it did after the Vietnam War, but growth will slow and profits will be squeezed by tight-fisted bureaucrats.
