Defense contractors are facing supply chain problems caused by the COVID-19 pandemic and are trying to find ways how to overcome such challenges, Defense News reported Tuesday.
An Aerospace Industries Association study has found that the aerospace and defense industry reported job losses of more than 87,000 in 2020 and John Luddy, vice president for national security policy at AIA, said 64 percent of those losses were associated with supply chain problems that weighed on small and medium-sized businesses across the country.
Luddy said financial challenges also posed problems on those businesses in addition to transport bottlenecks, backlogged ports, lack of raw materials and other supply chain issues.
“Because end-use manufacturers rely on the vital components and products those [small and medium-sized aerospace and defense] companies produce, such as bolts, wiring, hoses and electronics, those losses in employees, revenue and products had serious ripple effects throughout the rest of the A&D industry,” Luddy told the publication in a statement.
ML Mackey, chair of the small business division at the National Defense Industrial Association, also cited the impact of supply chain challenges on small firms with slimmer profit margins.
Mackey, who is also CEO of Beacon Interactive Systems, said those businesses tend to be “niche” companies that are critical to keeping weapons systems, aircraft and other military equipment operational.