Soaring Through Turbulence: Top Aerospace Industry Trends and the Essential Role of Negotiation

By RED BEAR June 15, 2023 | 7 min read

The aerospace industry has always carried a reputation for innovation and progress.

But, in 2023, the sector is facing significant challenges from intense supply chain disruptions, hiring challenges, and pressure to adapt alongside emerging markets.

Regardless of these challenges, aerospace professionals can learn to navigate this turbulence by integrating effective negotiation training into their businesses. 

RED BEAR Negotiation Training helps transform individuals into world-class negotiators. Our training is built from the ground up to offer your team unforgettable learning experiences that focus on the tested principles and behaviors that drive successful negotiations.

Let’s explore the top trends facing the aerospace industry in 2023 and learn how the right negotiation training can help industry professionals succeed in these often tense environments.

Navigating Aerospace Supply Chain Disruptions

Much like other industries, the aerospace sector is facing significant challenges from supply chain disruptions.

In fact, around 47% of aerospace and defense companies report seeing supply chain issues in the past year, with an average cost of $184 million per disruption.

Moreover, the A&D supply chain consists of multiple supplier tiers, creating a complex environment that feels the brunt of supply chain disruptions more intensely. The average aerospace business might work with upwards of 12,000 suppliers — leading to unique challenges like supplier visibility.

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Disruptions affect manufacturing plans by raising costs and can heighten the impact of shortages in materials and essential components.

Negotiation training is essential to managing complex vendor and supplier relationships, helping organizations secure better deals and service commitments. By focusing on tested principles and behaviors, individuals can learn to successfully navigate negotiations around priority status, faster delivery times, or even map out contingency plans for periods of possible high disruption.

Another solution to possible supply chain disruptions is finding risk allocation opportunities in contracts.

That could mean negotiating clauses that specify what happens during a disruption, like cost adjustments, timeline shifts, or finding alternative agreements. It could also mean diversifying supplier relationships. 

In this regard, negotiation training from RED BEAR can help teams understand the power of using both collaborative and competitive approaches to negotiations that help establish beneficial and fair terms with new partners that result in win-win outcomes. 

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With research showing 90% of surveyed manufacturing executives have experienced an increased frequency of disruptions, it’s essential for aerospace organizations to leverage the power of negotiation to develop robust solutions to supply chain disruption issues.

Of course, supply issues are only one challenge facing the industry. While aerospace leaders are trying to make sense of this new era of disruption, hiring problems are growing.

Addressing Challenges in Hiring and Talent Retention

As the industry grows, new technology develops, and the talent pool becomes hyper-globalized, hiring is becoming a thorny issue for the industry.

Data from one leading aerospace OEM paints a clear picture of this challenge.

The OEM aerospace leader argues that the sector will require a whopping 610,000 technicians for the maintenance division alone in the upcoming decades. The North American region by itself accounts for about 22% of this hiring need.

Additionally, across the industry, about 50,000 positions remain unfilled, with an overwhelming majority in technology.

Attracting top talent with a potentially limited supply is challenging. Negotiation training can help businesses effectively convey the value they offer to prospective hires and persuade them to join an organization. This might mean using an effective concessions strategy to move through negotiations around salary, benefits, or working conditions. 

Once an organization hires, they then need to work on retention. 

Again, negotiation training can help with discussions around fair wage increases, opportunities for progression, or better working conditions. Moreover, offering negotiation training to team members is an excellent way to invest in your employees and provide opportunities for growth through learning and development efforts.

Lastly, negotiation training, specifically cross-cultural negotiation training, will be critical to navigating the global market of talent. 

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Given the demand for technicians is a global issue, organizations with a firm understanding of cultural nuances and the ability to master virtual negotiation will be necessary to flourish in this environment.

While hiring challenges are hampering the speed of growth, that hasn't stopped innovation in emerging markets. 

Embracing Emerging Markets

While advancements in markets such as space, supersonics/hypersonics, and advanced air mobility (AAM) have seen some steady growth in the last decade, 2023 is likely an important year in terms of investment, the evolution of tech, and proactive discussion around regulation.

According to research from Deloitte, aerospace organizations are most likely to invest in space-related tech and AAM in 2023.

There’s also the rise of urban air mobility (UAM) and electrical vertical take-off and landing (eVTOL) vehicles. For eVTOL vehicles, in particular, the industry is seeing interesting developments.

While the FAA has only recently released airworthiness criteria for eVTOL vehicles, major players in commercial aviation are already making massive investments in the technology.

To navigate this upcoming shift in the industry, skilled negotiators will be necessary to master partnership negotiations. These discussions often involve multiple stakeholders, from the government to private tech companies.

This will be essential to succeeding in emerging markets like eVTOL, where aerospace firms, regulators, and other stakeholders need to reach cooperative agreements to move forward.

On the topic of regulators, as these new fields grow, so will the regulatory landscape.

Finding solid ground in these environments means developing robust approaches to negotiation that help individuals manage information skillfully to find solutions in complex regulator negotiations.

Since these markets are so new, it’s also about developing new beneficial regulations as well as ensuring compliance with existing ones.

Alongside establishing valuable vendor and supplier relationships, organizations will also need to engage with investors. This might involve showcasing the potential of a technology, which will involve understanding a business's full range and strength of power during negotiations.

Harnessing the Satellite Market Boom in Aerospace

While some might argue the satellite industry is currently seeing its emergence as a heavy market for investment, its longstanding history over the past half-decade puts it in a different category from markets like AAM or eVTOL.

Combine the falling costs of launching satellites with the massive demand for geospatial intelligence and valuable satellite imagery, and you can see why the sector is set to see a boom in 2023 and beyond. To put this into perspective, the majority of commercial space activity today revolves around launching satellites.

This has spurred a huge number of mergers and acquisitions with companies focused on launching and maintaining satellite communication, in particular, combining to offer better services and products to organizations looking to utilize satellite data.

When it comes to mergers and acquisitions, negotiation training is essential.

Teams will need to secure favorable terms with satellite companies, achieve strategic objectives, preserve existing relationships, and facilitate a smooth post-merger integration.

Much like the other trends on our list, the growth of the satellite market will highlight the need for better contract negotiations with clients, supplier negotiations around materials or services, collaborative partnerships around tech sharing or co-development opportunities, and negotiations around space usage.

It will also stress the importance of compliance negotiations as this new era of the satellite industry is international in nature, and companies will need to leverage the power of cross-cultural negotiation training to facilitate needs for orbital slots and frequencies that require diplomacy, conflict resolution skills, and complex multi-party negotiation capabilities. 

Safe Landing: Why Negotiation Training is Essential for the Aerospace Industry

From emerging markets to supply chain disruptions, 2023 is presenting some unique challenges to aerospace professionals. 

One essential skill set individuals can master to navigate these trends is negotiation.

Being able to adapt and feel comfortable in tense negotiations as well as using competitive and collaborative approaches to establish creative win-win outcomes can help businesses find success in these often uncertain environments.

RED BEAR Negotiation Training can help your team define its edge with world-class training experiences that balance the competitive, collaborative, and creative aspects of negotiation to help your team find opportunities in any situation.

If you’re ready to master and refine your negotiation process, reach out to the RED BEAR team today.

Fill out our contact form and we will be back to you in no later than one business day.

 

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