Feds must increase and clarify aerospace support

After suffering a triple-whammy — a trade war, the 737 MAX grounding and a pandemic — the aerospace supply chain is in a precarious situation.

More federal support, and clarity about existing relief programs, is needed to sustain this critical sector of the economy and its highly skilled workforce.

The need is acute in Washington state, home to more than 1,400 aerospace-related companies that in recent years employed 136,000 people.

Substantial layoffs and furloughs have occurred in an industry that was already running lean. Yet this supply chain and workforce are crucial to national security and America’s industrial recovery.

One way to help is by adjusting the criteria for which companies may use a $17 billion loan fund, created in the March CARES Act, to help businesses critical to national security.

That fund was widely viewed as a set aside for Boeing, which balked at the terms and instead turned to the private market for financing.

Now, with relatively few companies utilizing the fund, Washington Sen. Maria Cantwell is rightly pressing the U.S. Treasury Department to extend it to the broader aerospace supply chain. That would require expanding eligibility beyond defense contractors with high-security clearances and extending the deadline for loan applications.

The federal government has stepped up in other ways to support this sector. The Pentagon is expediting payments to contractors, and prime contractors are pressed to keep the dollars flowing through to smaller companies.

Steady defense work has prevented a shutdown at Silicon Forest Electronics in Vancouver, Washington, where around 100 employees produce electronic components.

CEO Frank Nichols, a board member of the Pacific Northwest Aerospace Alliance, said less diversified companies aren’t faring as well.

The supply chain was severely impacted by the MAX grounding. That’s now compounded by a severe aviation downturn caused by the pandemic.

“Suddenly it really put a lot of people in a lot of hurt,” Nichols told this editorial board.

Other aerospace firms in Washington would get a “significant benefit” if the loan fund was flowing quicker and getting people back to work, he said.

Some companies in the sector have already taken advantage of paycheck-protection program loans. Substantial workforce-preservation aid could come with passage of the new HEROES Act or another relief plan.

The Treasury Department is busy. But adjusting the criteria and reopening applications for the $17 billion loan fund should be a priority.

That fix is a straightforward way to support more jobs and companies in the critical aerospace supply chain. It would clarify the menu of options for employers in the sector, so they can make the best choices to continue operations and employment of skilled workers that the industry, state and nation depend upon.