Telling the Aerospace Story in an Era of Economic Decline

Remarks to the Aerospace Industries Association Communications Council

This is just about the bleakest holiday season I can remember, thanks to the unwinding of economic excesses that built up earlier in the decade.

I’m sure holidays were much worse during the Great Depression, but during my lifetime we have seldom seen things so bad — and there may be far worse to come.

So in the spirit of the moment if not the season, I decided to title my remarks, “Telling the Aerospace Story in an Era of Economic Decline.”

Over the next fifteen minutes, I would like to briefly touch on three topics…

• The severity of the economic problems our nation now faces.

• The impact those problems are having on the news industry with which we all deal.

• And the changes in public communications strategies that will be required to cope with current circumstances.

My basic thesis is that economic hard times are likely to improve the receptivity of the political system and the public to policies that would benefit the aerospace sector, but industry representatives are going to have to modify their tactics and tone to reach key audiences because everything about the communications environment is changing so fast.

Let’s begin, though, by trying to grasp just how serious the economic situation is.

Economic Decline

I’d like to read you some excerpts from an assessment of the U.S. economy that appeared early in the recent election cycle.

See if you can guess who said these things…

• “Since 1975, practically all of the gains in household income have gone to the top 20% of households.”

• “Problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups.”

• “Imported oil accounts for two-thirds of U.S. consumption.”

• “The merchandise trade deficit reached a record $847 billion in 2007.”

• “These problems caused a marked reduction in the value and status of the dollar worldwide.”

So who compiled this litany of economic shortcomings?

Was it Barack Obama? Joe Biden? Maybe Hillary Clinton?

Well, it wasn’t a politician at all — it was the Central Intelligence Agency in the most recent edition of its World Factbook.

The excerpts I just read you are what the nation’s leading intelligence agency thought about the U.S. economy before oil hit $140 a barrel and credit markets seized up.

Of course, the CIA also had some positive things to say too.

But my point is that while most people are preoccupied with the collapse in home and equity prices over the past year — and the resulting evaporation of $13 trillion in household net worth — our economic problems have actually been growing for a much longer period of time.

That’s why I used the phrase “economic decline” in the title to my remarks, rather than “downturn” or “recession.”

Let me give you a few examples of what I mean…

• In 1970, about a tenth of the manufactured goods sold in the U.S. were from overseas; today, over a third are.

• In 1980, the federal budget deficit totaled less than a trillion dollars; today, it’s over $10 trillion.

• In 1990, the United States had a trade deficit of about $30 billion; today, it’s over $700 billion.

• In 2000, median household income in the U.S. was $61,000; today, it’s below $60,000.

Now, if you consider each of these facts in isolation, you can find mitigating — or even positive — explanations for what looks like bad news.

But when you look at the whole picture, it’s clear that America’s economy is in decline.

The Bush years have witnessed the first economic expansion on record where household incomes shrank — despite tax cuts, despite constantly increasing entitlement outlays.

During the same eight years, America’s share of the global economy shrank too, from 31% to 27%.

Economic growth averaged an anemic 2% annually, and private-sector job growth was the lowest since World War Two, with most new jobs in areas like healthcare and education that are sustained largely with tax revenues.

So here’s the bottom line: that old Reagan magic of tax cuts, deregulation and free trade isn’t working anymore, and yet we have no idea what to do instead other than borrowing even more money from foreigners to prop up teetering credit markets.

Which means that if foreigners decide to stop lending the world’s largest debtor nation — formerly the world’s largest creditor nation — more money, we’re pretty much out of answers.

Personally, I think President-elect Obama is right when he says we can come back from the current economic crisis stronger than we were before.

But since we haven’t found a bottom yet, it’s possible that could take a decade or longer, and nobody is saying we will ever return to where we were in 1990, in terms of our global standing.

America is in economic trouble like it hasn’t seen in a long, long time.

So what does that mean for the news industry?

News Business

What it means is that the news business is disappearing even faster than it was before the credit crisis hit.

Look at the trends…

• Newspaper circulation continues to decline at a rate of about 3% per year, but advertising linage is shrinking at several times that rate, pushing several newspaper chains to the verge of bankruptcy.

• The circulation of news magazines is dropping even faster, with Time and Newsweek now only claiming about 3 million readers each per week, while perennial also-ran U.S. News looks likely to cease publication entirely.

• Viewership of evening news broadcasts is shrinking at a rate of about one million people per year, as it has for the last 25 years, leaving the total audience last year at an historic low of 23 million viewers — meaning that only 8% of televisions are tuned to the network news broadcasts on any given night.

• And viewership of cable news channels still stands at a small fraction of the number that watches network news shows, averaging about 3 million viewers in prime-time and half that number in daytime.

Since we know that there is substantial overlap between the audiences for newspapers, news magazines and television news, what these numbers collectively suggest is that for much of America, the news has simply ceased to exist as a daily focus of interest.

With so many different media available and entertainment outlets typically offering more colorful, enjoyable content, the national audience is gradually turning away from the news.

And while the migration of news consumers to the internet is theoretically giving them access to unprecedented depth and richness, research shows that in practice they spend only five or six minutes reading news online versus some multiple of that amount if they get their news from more traditional sources.

They may spend hours on-line each day, but during most of that time they are playing games, checking sports scores, looking at porn or doing other things that have little to do with staying current with the news of the day.

So it may be that we are witnessing not just the decline of the news business, but the decline of news itself as a socially significant phenomenon.

News as a mass phenomenon barely predated the Civil War and only came into its own with the spread of the penny press in the late 1800s.

The business subsequently went through several transformations, which we now nostalgically refer to using phrases such as the “golden age of radio” and the “golden age of television,” but with each subsequent transformation the range of available media expanded in a manner that further fragmented the audience.

The Worldwide Web is now completing the transition of the news business from a tightly hierarchical system dominated by New York elites into a nebulous morass of special-interest constituencies focused on narrow-gauge outlets such as blogs.

It may seem as though the developments damaging the news business today are driven by the same economic trends hurting Detroit, but as with our broader economic decline, the decline of the news business actually began decades ago and is only now reaching a point where the survival of the industry is called into question.

For example, many of us who were born in the early postwar period grew up with evening newspapers like the Philadelphia Bulletin and the Washington Star, but with advent of television all the evening papers disappeared.

Newspaper circulation in general peaked during the second Reagan Administration, so it shouldn’t come as any surprise that 20 years later we are looking at the possibility of major cities no longer having a daily newspaper in the near future.

The simple truth is that most of the public just doesn’t care enough about news in the traditional sense to pay attention to it on a daily basis, and now that there are numerous appealing alternatives it is voting with its feet.

So the news business as we have known it is dying.

That brings me to my third topic for today — how to tell the aerospace story in such unsettling times.

Aerospace Story

On that front, I have good news and bad news.

The good news is that the political system is more receptive today to themes concerning the economic benefits of a vibrant aerospace sector than at any other time in living memory.

The bad news, though, is that it has become harder to reach sizable, influential audiences with any themes about the sector, because reading and viewing behavior has become so fragmented.

Let’s look at those two trends separately.

With regard to audience receptivity, the reason people are more willing to listen to economic themes today is that they no longer take America’s prosperity or competitiveness for granted.

Most people are only dimly aware of the fact that over the last 25 years, the United States has largely lost its steel-making, commercial shipbuilding and consumer electronics industries.

But when you see the entire domestic automobile sector skirting bankruptcy, the stock market collapsing, house prices plummeting, and a million jobs going away in three months — well then you have to consider the possibility that the American Dream is in danger.

So the fact that the American aerospace industry is still a technology leader, that it remains an export powerhouse, that it continues to provide good pay and benefits to hundreds of thousands of employees — that matters more to people than it used to.

Some diehard critics of the sector might argue that your success is built partly on a steady flow of taxpayer dollars into military and civil aerospace programs, but that won’t matter to most people because the government is spending hundreds of billions of dollars right now to bailout sectors in distress, whereas the money it has spent on aerospace is clearly paying big dividends.

When President-elect Barack Obama says he wants to preserve millions of good-paying jobs in American manufacturing, aerospace is one of the few sectors that proves that goal is possible.

So you have got a good story to tell, and the public is ready to hear it.

But then we have that second issue, which is how to reach them.

Obviously, full-page ads in the Washington Post will only get you so far, and the mass media have long since stopped covering the sector on a day-to-day basis.

Quality coverage of aerospace is now largely confined to the trade press, but there you are mostly talking to yourself.

So how do you reach beyond your traditional constituencies to the broader electorate and society whose support is essential to sustaining your programs?

I would suggest five steps that the industry needs to take to tell its story better, each of which can be reduced a single word — research, imagination, coordination, discipline and money.

The first step is to do a rigorous study of how your target audiences get information about aerospace programs and priorities.

We know they don’t get it from the Washington Post, because the Post barely covers the sector at all.

So where do they go? Politico? Roll Call? Aviation Week? Blogs?

If you haven’t done a serious study, meaning a survey, then you don’t know where to focus your outreach efforts.

The second step is to show some imagination in leveraging any insights you have about how relevant audiences get their information.

If you don’t sponsor blogs then maybe you should, and if you do sponsor blogs maybe you should upgrade them, or make more of an effort to attract people to them.

Do you have a network of people who respond to internet postings about the sector, or do you just let postings get answered on an ad hoc basis where misconceptions are often allowed to go unchallenged?

Do you have a mechanism for pitching ideas on a regular basis to cable outlets, or think tanks, or organized labor — the kind of mechanism that builds up relationships over time?

You get my point — you need a campaign that is something more than the same old ideas.

The third step is to coordinate the public statements of your members and allies so that the same core themes are stated over and over again, until important audiences actually assimilate them.

Right now, each member in the association runs product advertising on a regular basis, but near as I can tell there is little effort to insert common themes like “Aerospace — America’s top exporter,” or “Aerospace — the Future Still Belongs to America.”

Why not have everyone in the sector agree on a few concise points that they will routinely incorporate into their advertising?

The fourth step is to show some discipline in sustaining a campaign, so it isn’t a ninety-day wonder.

The themes you want to convey are perennials that need to be repeated over and over again, for years to come.

People need to understand why it is so important to be the global leader in aerospace, and what it would mean to lose that status.

You don’t just say that once or twice, you remind them constantly, in every outlet you can find, and with a consistency that makes the message inescapable.

Finally, there is the matter of money.

This industry doesn’t devote much money to burnishing its image in the eyes of others.

It spends a lot of money pitching programs, but it expects the programs to make the case for the sector.

I would argue that when a sector is collectively as dependent on government funding and government policy as this one is, it ought to be putting more money into image advertising than the aerospace industry currently does.

I’m not talking about billions of dollars, but somebody has to tell your CEOs that the aerospace industry as such is invisible to most of America, and money needs to be spent so that the public has some sense of ownership about your achievements.

Well, I could go on, but why don’t I stop there and see what you think.