A primary goal for this year in Aero is to reduce the average engineering hourly labor rate by 25%. It is being tracked every week. Leadership has flowed down supporting goals with misleading titles like "Grow HTS". Do not be fooled. The written objective is not "grow HTS" it is "Reduce Average Engineering Labor Rate". So far.. progress is way behind. I am sure they will find a way to spin it.
Post Mid-Year reviews we can expect new emphasis on this goal. Expect systematic reviews of existing work under the guise of making more people available "for revcog staffing". This is disingenuous. The HPD goal is to send work to low cost regions. RevCog fill can be fixed instantly with contract labor.
I'm an avionics engineer. math is what I do.
So ... let's get mathy about that "reduce rate by 25%" goal.
We know that domestic staff is 40% of the current workforce.
This is a high level goal and we only care about the average project.. not your specific
DOD work. Consider the average and assume from the start that work is split 40/60 matching the overall census numbers. law of averages.
Labor rates are proprietary so lets just set an arbitrary $100 USD/hr for a US worker and $50/hr for an low cost region worker. Not real numbers. just illustrative.
Example : 1000 hr project.
400 hrs @ $100/hr, 600 hrs @ $50/hr.
Average Hourly rate ? --> $70/hr.
Target hourly rate (25% lower) ? $70/hr * .75 = $52.5
New Hourly split?
50 hrs @ $100/hr, 950 hrs @ $50/hr
You could make this a little less grim by lowering the bottom rate.
Cutting that rate in half would give the high cost region about 216 labor hours vs 50.
So that gives us the long term census targets.
US workforce will need to be cut by 50% to 88% to meet the productivity goals set by Aerospace leadership.
But wait... you say the goal is "Grow HTS" ... okay. Still believe that?
What exactly would it take to organically grow low cost regions enough to reduce the average rate that much? Simple math. In the best case scenario we need to hit a labor ratio of 20/80. If we assume no domestic job loss then the low cost regions must DOUBLE their census from today's 63,000 people to 120,000 people to achieve the needed 20/80 split.
Which is more likely? Drop 20,000 US jobs... or Hire 60,000 India/China jobs ?
I don't need a quantum computer to see the future.
They tell us what is coming in the goals.
Vote me down if you think math lies.