These disruptions have undercut manufacturers' efforts to adjust to the defense cuts by transferring employees from defense to commercial product lines. At this time, both segments of the industry remain in a recession. Even significant international customers, such as the leasing company Guinness Peat Aviation Group of Ireland, have been forced to restructure in order to avoid bankruptcy and are canceling or rescheduling orders. Strong competition from the European-based Airbus Industrie is further exacerbating the effects of lower demand. While U.S. aircraft manufacturers maintain 65 percent of the current world backlog of firm orders for large aircraft , Airbus has established a firm control of the number 2 position with 34 percent and other European manufacturers with 1 percent.
Defense companies generate virtually their entire sales volume through government defense contracts.
Competing companies usually bid at the lowest figure to win the contract.