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 AIA UPDATE: May 2008, Volume 12, No. 8
AIA Report Outlines Budget Challenge to Defense Modernization Although April 15 meant a tax payment deadline to most Americans, to AIA it signaled the release of a report revealing important challenges in spending that tax revenue wisely. "U.S. Defense Modernization: Readiness Now and for the Future" presents structural issues in the defense budget that will challenge the next president, regardless of the budget top line for the Defense Department. The report shows the pressures that increased spending on operations will exert on the defense modernization budget, requiring the next administration to make careful and deliberate choices to preserve American military readiness for possible future conflicts. "One reason we are issuing the report now is to let the candidates know of an important challenge that awaits the eventual president," AIA President and CEO Marion Blakey said. "Modernizing our defense equipment is vital to making sure our troops are as well-prepared as humanly possible for the challenges they face on the battlefield," she stated. While many of these issues are familiar to industry, they have been largely overlooked in the presidential campaign. AIA hopes the report — and a fuller study to be released this summer detailing specific sectors of the procurement budget — will inspire public interest and discussion of the importance of modernization. According to the report, the next administration will have to address financial resource challenges even if defense spending increases. At current rates, the operations and support element of the budget will have more than doubled between 1988 and 2013 — faster than the growth in the defense budget itself. In contrast, modernization investment will increase by slightly more than 50 percent, well below the growth path of the general budget. The report recommends a five-part approach for the next administration to ensure the technological superiority of the systems that defend our men and women in uniform:
AIA Source: jj.gertler@aia-aerospace.org Top 100 U.S. Teams Preparing to "Rocket The World" in Fly-offs Add "world championship" to the quest of U.S. teams competing in the AIA-sponsored Team America Rocketry Challenge this month. For the first time, the U.S. champion will compete against the winner of the British version of TARC for the world title at the Farnborough International Air Show in July. The U.S. national title and $60,000 in scholarships and other prizes will be decided May 17 when 100 teams meet at Great Meadow in The Plains, Va., for the sixth annual final fly-off. Finalists represent schools in 32 states and the District of Columbia. Teams are listed at rocketcontest.org. TARC presents teams with a dual challenge. This year, teams must launch their rocket as close as possible to an altitude of 750 feet with a flight time of 45 seconds. The payload of two raw eggs must return to the ground unbroken. AIA created TARC in 2003 to celebrate the centennial of flight and to generate interest in aerospace careers among young people. The aerospace and defense sector is facing a workforce crisis over the next decade as scientists and engineers lured to the industry by the space race and the Cold War retire. Almost 60 percent of the U.S. aerospace workforce is 45 or older, according to statistics compiled by AIA. AIA Source: audrey.koehler@aia-aerospace.org AEROSPACE FOCUS: House Aerospace Caucus  VIEWPOINT: Aerospace Workforce Needs a New Wave of Recruits for Industry's Future By Marion C. Blakey, AIA President and Chief Executive Officer In 2003 David Adelman was a senior at Oakton High School in Northern Virginia, enrolled in a physics class that included participation in a model rocket contest. The event — the AIA-sponsored Team America Rocketry Challenge — is aimed at interesting science-minded students like David in careers in the aerospace industry. Adelman took part in the initial TARC, which has since seen participation from more than 40,000 students around the country in its five-year run. The final fly-offs of the sixth installment are scheduled for May 17, and we expect another group of enthusiastic and creative competitors. This is good news when you look at the situation with the U.S. aerospace industry's workforce. Like many industries, aerospace is facing a wave of retirements of long-serving workers from the Baby Boom generation. But there are other factors that make it especially acute for our industry, and the bottom line is that we face a harmful shortage of skilled workers in the near future. Statistics show almost 60 percent of the U.S. aerospace workforce was age 45 or older in 2007. Now, 45 years old is by no means old. But, as we know, our industry is one in which people often stay in their jobs for decades. Many of these skilled, valued employees also started in their positions relatively young. So a significant number of workers age 45 or older are approaching retirement eligibility or are already there. Other data we've seen show that there are insufficient numbers of college students studying engineering and other related fields to replace the retiring workforce. We've also seen indicators that high school students are not graduating with the science and math proficiency that would prepare them for aerospace-related degrees. Our industry is doing a lot to address this issue on several levels. Most companies have their own initiatives to attract qualified job candidates, and many conduct campaigns to encourage science, technology, engineering and math education — often referred to as STEM initiatives. The Interagency Aerospace Revitalization Task Force, a group put together as a result of the work of Congressman Vern Ehlers of Michigan, has taken a very positive step forward. The task force recently released a report that emphasizes cooperation among government, industry, academia and other stakeholders to tackle the problem. It includes specific strategies to foster improvements:
AIA is co-hosting a forum in May, along with partners the American Institute of Aeronautics and Astronautics and the Aerospace Department Chairs Association, to share ideas on the workforce issue from many vantage points — industry, government, academia and others. The event includes representatives of several member companies, including BAE Systems CEO Walter Havenstein and others from Boeing, Rolls-Royce, Raytheon, and GE Aviation. And, of course, there's TARC. I mentioned Adelman earlier for a reason — he could be the poster boy for the success of the rocket challenge. He parlayed his participation into two internships with sponsor company Aerojet, ultimately leading to a full-time job when he graduated from the University of Virginia. It's the kind of outcome needed to ensure the stream of human capital essential to keeping aerospace a cornerstone of U.S. national security and economic strength. WASHINGTON WATCH: Blakey Testifies at ASA Mock Hearing on Export Controls Serious delays and inconsistent decisionmaking in processing military export authorizations have resulted in customers abroad cutting U.S.-made goods out of their designs, AIA President and CEO Marion Blakey pointed out during a mock hearing of the Aerospace States Association (ASA). Blakey also reiterated the need for a predictable, efficient and transparent export control system. "Companies not only face delays and unpredictability in the licensing process but also are confused by the rules and terrified of making a mistake and paying high costs to get help figuring out the system." Chaired by Vermont Lt. Gov. Brian Dubie, ASA's hearing addressed the competitiveness of the aerospace industry and the need for a modernized export control system. It included testimony from the State and Commerce departments as well as industry and university representatives. In her testimony Blakey asserted the need for grassroots outreach to Congress by small- and medium-sized aerospace companies on the impact of export controls on the aerospace industry's global competitiveness. "For too long, we have allowed this issue to remain an inside-the-beltway problem when its effects truly ripple across the country," she said. ASA is comprised of lieutenant governors seeking to expand aerospace jobs, bolster U.S. competitiveness and improve aerospace workforce development through science, technology, engineering and math education initiatives. AIA Source: joseph.lai@aia-aerospace.org WASHINGTON WATCH: NextGen Progress Graded by National Academies Participants in a workshop of the National Research Council of the National Academies have determined that poorly defined and scoped documents are impeding the progress of research and development planning activities of the Next Generation Air Transportation System. But remedial steps were suggested. The critical assessment was made recently after presentations by the Joint Planning and Development Office (JPDO) deputy executive director, the NextGen program's chief architect and the chairs of JPDO working groups. Workshop participants determined that the program's R&D planning had no flexible baseline for beginning systematic work and appraisal. In an unexpected discussion of requirements for a NextGen implementation office, the panel agreed that an independent program office with stable, long-term funding and cross-agency authority would be beneficial. That office would ideally be led by someone with experience managing large-scale projects, possibly from within the Defense Department, and would likely be placed within the FAA. JPDO was advised to focus on modeling and simulation to refine R&D options, emphasize regional demonstrations, promote early incremental implementation and consider return-on-investment. A formal report and conclusions from the National Academies' Aeronautics and Space Engineering Board is expected to be sent to JPDO by June 1. AIA Source: susan.mertes@aia-aerospace.org WASHINGTON WATCH: Caucus Policy Briefing Addresses Workforce Issues AIA and the House Aerospace Caucus presented a policy briefing on Capitol Hill in April to address aerospace workforce issues. Hosted by Co-Chairs Rep. Dave Weldon (R-Fla.) and Rep. Norm Dicks (D-Wash.), the event brought together members of Congress, key congressional staff and aerospace industry representatives. Discussion centered on the need to cultivate an internationally competitive aerospace workforce. Rep. Vernon Ehlers (R-Mich.), ranking Republican on the Research and Science Education Subcommittee of the House Science and Technology Committee, spoke about a recent report from the Interagency Aerospace Revitalization Task Force. The first of five annual reports to Congress, it offers strategies for meeting industry's growing talent demands. Ehlers sponsored legislation creating the task force in 2006. Also in the briefing, Scott Seymour, a retired executive of Northrop Grumman Integrated Systems, and Ken Diskin, senior vice president of human resources for Lockheed Martin Corporation, gave industry perspectives on the looming workforce crisis and the challenges it poses for industry. Both described company-specific efforts to encourage young people to pursue aerospace careers. Students from Lake Braddock High School in Burke, Va., who are participating in AIA's sixth annual Team American Rocketry Challenge attended the luncheon and answered questions from Reps. Weldon and Dicks about their ambitions in the aerospace industry. AIA Source: michael.berger@aia-aerospace.org Proposed State Department Rule Would Clarify Export Controls of Civil Aircraft Components The State Department has issued a proposed rule that would clarify the application of military export controls to civil aircraft components. The amendment to Section 17(c) of the Export Administration Act is aligned with legislation sponsored by Reps. Brad Sherman (D-Calif.) and Donald Manzullo (R-Ill.) and supported by AIA to improve the export control system. It places the export of FAA-certified parts and components under the jurisdiction of the Commerce Department rather than the defense trade licensing system at the State Department. Civil aviation companies have long been concerned that unpredictable interpretation of Section 17(c) by the State Department makes it unclear whether commercial products could sometimes be labeled as military items. Before taking final action, the State Department opened the proposal to a 30-day comment period that ended on May 12. AIA submitted its comments. The rule is available online at edocket.access.gpo.gov/2008/08-1122.htm. AIA Source: joseph.lai@aia-aerospace.org Aerospace Industry Sales in 2007 Set Trade Balance Mark U.S. exports of aerospace products reached nearly $97 billion in 2007, lifting the aerospace industry's trade balance to a record $60.4 billion. Civil aircraft exports, which accounted for almost 50 percent of total aerospace exports, dominated the growth. U.S. aerospace exports also were helped by strong foreign military sales as well as the U.S. dollar's decline. The top five export markets in 2007 were Japan, France, China, the United Kingdom and India. Notable are the inclusion of China and India, two rapidly developing economies actively expanding their fleets of commercial aircraft. Strong demand from these countries is expected to continue into the near future. Imports of aerospace products increased to $36.5 billion in 2007, up nearly 20 percent from 2006, reflecting an overall increase in the industry's global commercial activity. U.S. exporters of aerospace products see continuing opportunities around the world for their products. AIA Source: william.chadwick@aia-aerospace.org AIA Leaders Jones And Blakey Attend SBAC Conference AIA Chairman Clay Jones, president and CEO of Rockwell Collins, recently gave the keynote address at the annual conference of the Society of British Aerospace Companies in London. Jones' remarks are posted at aia-aerospace.com under the News & Events tab. Joined by AIA President and CEO Marion Blakey, Jones participated in a number of policy discussions with British and European aerospace leaders that emphasized the challenges and opportunities for cooperation in the global aerospace industry. The discourse produced an agenda for the annual CEO Dialogue among leaders of U.S. and European Union aerospace companies that will take place in July at the Farnborough International Airshow. At Farnborough, AIA leaders are expected to exchange ideas with their European counterparts to identify the policies to support and actions to take to address common concerns on ethical business practices, the environment and export controls. AIA Source: remy.nathan@aia-aerospace.org REACH Workshops Scheduled Before Phased Implementation of EU Environmental Program Preregistration under the European Union's Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation goes into effect June 1 with phased implementation before 2009. REACH entered into force throughout the EU in June 2007. It moves the burden of EU chemical regulation from the government to industry and will significantly change how aerospace companies buy and use chemicals. The regulation affects all chemicals, including alloys, paints and powders, used across the aerospace industry and those bought in the global supply chain outside the EU. AIA and major aerospace manufacturers recognize the impact this regulation could have on companies of any size. To help them understand REACH, the association has organized workshops available to AIA member companies and their suppliers at venues across the country. REACH workshop objectives:
June 10 St. Paul, Minn. (only U.S. citizens can attend due to facility security) July 10 Phoenix, Ariz. AIA Source: nancy.white@aia-aerospace.org Access to Commercial Technology in Jeopardy? AIA has teamed with several other industry associations in a coalition to avert a return to unnecessary and costly procurement specifications and the excessive oversight prevalent in the early 1980s. The coalition aims to remind federal agencies and Congress what federal procurement was like before the current streamlined acquisition process was established. During the past two decades, the aerospace industry has adapted to the government's push to use more commercial technology in defense products and services. Taxpayers benefit from commercial investment in research and development and longer learning curves. At the same time, the aerospace and defense industry is able to maintain a cost structure that makes U.S. products more competitive in the global market. Policymakers, however, seem to be backing away from the underlying presumption that access to commercial technology is vital to providing the nation with the best equipment and services available at the best possible price. The Defense Department and Congress have proposed and implemented changes that alter many of the commercial acquisition reforms put in place to encourage use of commercial technology. This reaction to isolated, but highly publicized, incidents of procurement abuse will result in higher costs to the government and less competitive prices for U.S. products and services in the global market. Failure to stop this backsliding will cause long-term damage to a large portion of the aerospace and defense industry that supports the government. AIA Source: terry.marlow@aia-aerospace.org AmSafe's Child Restraint System Is First Approved by FAA AIA's newest member is AmSafe, Inc., a world leader in safety and securement products for the aerospace, defense and ground transportation industries. The company's products are used on virtually every commercial aircraft in the world and include an array of air cargo control and passenger safety devices. Headquartered in Phoenix, Ariz., AmSafe has manufacturing and service facilities worldwide. Among its innovations, the firm developed the first aviation airbag restraint system now used aboard more than 25 commercial airlines and on more than 80 percent of the world's general aviation aircraft. AmSafe was the first company to receive FAA approval for a child restraint system designed specifically for use on airplanes. To learn more, go to amsafe.com. Association's Space Division Hosts Several Events with Decisionmakers AIA's Space Division recently conducted several important events related to space policy and funding issues. Paul Shawcross, chief of the science and space branch for the Office of Management and Budget (OMB), met with AIA members in March to discuss OMB's role in the annual budget process. He also described how the office provides in-depth information and "institutional memory" for the president and how OMB ensures that agencies develop and implement policies in accordance with administration priorities. Shawcross concluded with a detailed review of the 2009 presidential $17.6 billion budget request for NASA. In addition, AIA recently hosted its first Earth Observation Roundtable, led by AIA's Space Science Steering Committee Chairman Ron Birk, director of mission integration at Northrop Grumman Corporation. Participants included AIA members and representatives from the Alliance for Earth Observations, the American Institute of Aeronautics and Astronautics, the American Astronautical Society, the American Meteorological Society, the Center for Strategic and International Studies, the Planetary Society and the Space Enterprise Council. The roundtable agreed to recommend that the next president convene a group to shape a much-needed national monitoring system architecture that can provide a comprehensive information capacity to observation systems. The group is preparing a joint letter to presidential candidates, urging them to establish Earth observation activities as a national priority. The Space Council hosted a Hill Staffer Roundtable in April at which congressional staff gave their perspectives on the current legislative environment and the major issues they expect to push. Discussion centered on budgets for national security and civil space, key provisions that might appear in authorization bills and the upcoming presidential election. Attendees included Lee Arnold, legislative counsel for Rep. Tom Feeney (R-Fla.); Kari Bingen, professional staff for the House Armed Services Committee; and Rebeccah Ramey, military legislative assistant for Rep. Trent Franks (R-Ariz.). AIA Source: jp.stevens@aia-aerospace.org |
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