Dire warnings of an aerospace brain drain have been issued for so many years that it's easy to tune them out. Four years ago, a presidential commission predicted a "devastating loss of skill, experience and intellectual capital." Across the U.S., CEOs say the industry is not attracting nearly enough young engineers to replace the baby boomers that will start retiring in large numbers in the next few years. This magazine sounded the alarm in 1999, then 2000 and again in 2003.

Yet the aerospace and defense (A&D) industry has managed to keep up with recent surges in demand from the military and commercial sectors, in part by becoming more productive. In 1990 about 1.1 million U.S. aerospace workers were needed to generate approximately $200 billion in sales, adjusting for inflation. Last year, just 624,000 workers produced $184 billion in sales. In high-profile programs, finding talent is not an issue. Larry Lawson, the general manager of Lockheed Martin's F-22 program, says he has no problem signing top-flight talent out of universities.

Problem solved? Hardly. The alarming truth is that the A&D industry is not attracting nearly enough skilled workers, particularly engineers, to replace those getting ready to retire. The looming shortfall, underscored in two workforce studies undertaken for Aviation Week & Space Technology by Bain & Co. and Deloitte Consulting, threatens to sap the industry's vitality and could make it harder for the U.S. military to maintain its enviable technological edge over the long run.

The long shadow of an aging workforce is cast across the entire industry, from military scientists to commercial pilots to maintenance, repair and overhaul technicians. But the danger is most acute in engineering. "Engineering is the core of what makes companies successful, and it is by far the function that is most constrained by supply," says Michael Goldberg, lead partner in Bain's A&D practice.

By next year, an estimated one-in-four U.S. aerospace workers will be eligible to retire; nearly one-in-three civilian scientific and technical workers in the Defense Dept. have already reached that milestone (see p. 48). And the full impact of the graying workforce hasn't hit yet. In 2011, an 18-year-long wave of baby boomers will start collecting Social Security and Medicare benefits. Another problem: massive layoffs during the consolidations of the 1990s that left the defense industry with a shortage of middle-aged talent. This means the tasks of many retirees could fall to younger, less-experienced workers. "We need to go out and basically generate a new workforce of knowledge workers to replace those experienced people who are going out the door," says Clay Jones, president/CEO of Rockwell Collins.

Finding those workers will be a daunting challenge. U.S. students show an alarmingly low interest in science and math. And for those that do go into engineering, aerospace doesn't have the cachet it did during the Cold War and Apollo program. Today's engineering graduates rank A&D low--if not dead last--on their list of industries providing desirable employment, far behind high tech and professional services (AW&ST Jan. 15, p. 72). Just 7% of students at 15 top engineering schools interviewed for the Bain study expect to pursue a career in A&D.

"It was not even in my consciousness as an engineering graduate in 1968 that I had an opportunity to make a lot of money," says Lester L. Lyles, a retired four-star U.S. Air Force general who is now a technology consultant. "The young people today have so much more available to them and so many other opportunities to make money quickly. Silicon Valley sort of galvanized that. I don't think the interest in coming up to be a pure engineer is there anymore."

The implications for the nation's future are huge. In 2005, U.S. universities awarded 70,000 bachelor's degrees in engineering and 41,000 master's and Ph.D.s, according to the Education Dept. While most of the bachelor's degrees went to Americans, just over half of the advanced degrees were earned by citizens of other countries. A growing number of those graduates are taking their brainpower back home. Meanwhile, the number of engineers being minted overseas is soaring. Some oft-cited estimates say China is turning out 600,000 engineers a year and India 350,000. While critics have challenged those estimates as inflated, there is no question of the trend. Raytheon Chairman/CEO William H. Swanson uses a more conservative estimate of 400,000 Chinese graduates. "Cut it in half, it's still a huge number," he says.

China's new military engineering abilities were on display last month when it successfully tested an anti-satellite weapon (AW&ST Jan. 22, p. 24). "Is it going to take the Chinese scaring the hell out of somebody by putting their own observable satellites over the U.S. or creating their own missile defense system?" asks Jim Schwendinger, the lead partner in Deloitte Consulting's A&D practice. "I don't know, but it seems to me that we're more passive than we should be. These guys are on a much steeper trajectory than most North Americans or Europeans grasp."

Of course, the swelling ranks of overseas engineers also presents an opportunity for aerospace companies: a new source of labor, especially on the commercial side of the business. Today, only 5% of Rockwell Collins' engineering workforce is outside of the U.S. Jones says that will have to change. "If we can't find them here we've got to fish where the fish are," he says. "We're going to China, to India, to Eastern Europe, where they have very talented people that can fill some of these gaps."