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AIA CEO Eric Fanning: Labor ‘Biggest Limiting Factor’ in Aerospace & Defense Supply Chain

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Eric Fanning, president and CEO of the Aerospace Industries Association, cited the rigid requirements for defense contractors and retention challenges as the key forces pushing sector employees away.

“The biggest limiting factor we’re finding in the supply chain is labor,” Fanning, a previous recipient of the Wash100 Award, said in an interview with Defense News.

Executives of publicly traded defense companies have attributed major challenges in supply chain and financial performance to the lingering labor instability in the U.S.

Boeing, General Dynamics and Raytheon Technologies leaders mentioned in their companies’ respective earnings calls that labor shortage and workforce turnover led to higher operational costs in their third fiscal quarter.

Their sentiments echo the results of the 2022 Aerospace & Defense Workforce Study conducted by AIA, the American Institute of Aeronautics and Astronautics and professional services firm EY US.

The survey, which represented 800,000 employees globally and over 680,000 domestically, showed that compensation was the main reason that employees were leaving their jobs. Wages accounted for 78 percent of turnover, followed by 75 percent who left because of career advancement and 31 percent who resigned due to remote work or relocation opportunities.