The next generation of manufacturing is not in Aerospace
Why aerospace manufacturing distorted the U.S. manufacturing ecosystem, and why rebuilding on that model will repeat the same mistakes.
Over the past few years, the U.S. has poured enormous funding into “re-industrialization,” much of which has gone toward aerospace and defense manufacturing startups. But in many ways, aerospace manufacturing is exactly what distorted, and ultimately weakened, the broader U.S. manufacturing ecosystem.
Look at the typical mom-and-pop machine shops in California. Most chase low-volume, ultra-precise CNC work. Click each to compare.
People celebrate getting a contract with Boeing to make one or two parts, instead of celebrating a contract with an early-stage hardware startup trying to build hundreds or thousands of units.
Aerospace work pays extremely well. Because a shop can earn more by producing fewer pieces, many shifted away from high volume production. That shift makes sense economically, but it's a disaster for the hardware sector.
| Factor | Aerospace | Volume |
|---|---|---|
| Revenue per part | $12,000+ | $2 to $12 |
| Parts per year | ~200 | 200,000+ |
| Gross margin | 60 to 80% | 8 to 15% |
| Setup complexity | High (worth it) | High (not worth it) |
| Client acquisition | 1 to 2 contracts/yr | Dozens of clients |
| Risk per job | Low (guaranteed pay) | High (scaling risk) |
Shops optimized for aerospace simply don't want low margin, high volume parts. Young hardware companies end up spending months searching for a production partner who can actually scale with them.
Manufacturing at its core is about volume: producing large quantities of parts consistently, cheaply, and quickly. But the aerospace model optimizes for the exact opposite.
If we are building the next generation of manufacturing in the U.S., it cannot be built on the aerospace model. It has to be built on volume, speed, and accessibility.
- Optimized forPrecision at any cost
- Typical order1 to 50 parts
- Quote turnaround1 to 2 weeks
- Production start6 to 12 weeks
- Iteration cycleMonths
- Startup friendly?Rarely
- Optimized forSpeed at volume
- Typical order1,000 to 100,000 parts
- Quote turnaroundSame day
- Production start3 to 7 days
- Iteration cycleDays
- Startup friendly?By default
The next generation of U.S. manufacturing cannot be built on the aerospace model. It has to be built on volume, speed, and accessibility: the very things that made Shenzhen the global hardware capital. That means realigning incentives so that machine shops want to serve startups, compressing tooling timelines so iteration is cheap, and building the infrastructure that makes producing 10,000 units as straightforward as producing 10.