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Arlington, Va. —The Aerospace Industries Association announces today that after her successful seven-year tenure as President and Chief Executive Officer, Marion C. Blakey will be leaving to take the position of President and CEO of Rolls Royce North America.
“AIA has been very fortunate to have Marion’s leadership over the last seven years,” said AIA Chairman and President and Chief Executive Officer of GE Aviation, David L. Joyce. “Under Marion’s guidance, AIA has elevated its role advocating in the best interests of the nation and the aerospace and defense industry.”
Beginning in November of 2007, Blakey’s tenure saw the achievement of numerous milestones for the industry. AIA’s advocacy played a key role in changing the classification of commercial satellites in 2014, enabling American manufacturers to better compete in the global market. AIA’s work in support of the Next Generation Air Transportation System has been widely recognized by industry and government.
In defense, Blakey led the establishment of a broad-ranging campaign to alert elected officials and the general public of the significant impact to our nation and the aerospace and defense industry of sequestration and budget cuts imposed under the Budget Control Act of 2011. The Association has also developed very creative uses of social media to increase the public’s appreciation of the importance of a strong aerospace industry, including NASA’s achievements.
“I’m very proud of AIA’s record of achievement these last seven years,” Blakey said. “I’d like to thank AIA’s Executive Committee, Board of Governors and the entire staff for their guidance, hard work and commitment. I strongly believe we’ve strengthened AIA and better positioned the organization and our member companies to inform and influence the debate on key issues facing our country and our industry in the coming years.”
“While we’re quickly moving forward to identify Marion’s successor,” Joyce said, “AIA has outstanding and dedicated staff who play a key role in AIA’s mission of driving the aerospace industry’s agenda and priorities. And those priorities remain clear: to advocate strongly for sound policy, sensible regulation and adequate budgets that support the necessary investments in our defense, civil aviation and space sectors to ensure that America’s aerospace and defense industry remains second to none.”
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on FAA’s issuance of proposed regulations for small unmanned aircraft systems (UAS).
Arlington, Va. — By issuing draft regulations for the use of small unmanned aircraft systems, FAA has taken an important step towards the integration of UAS into civil airspace. The issuance of these proposed regulations is a key element of government and industry efforts to foster safe operations in both civil and military applications of remotely piloted aircraft while further encouraging research and development of UAS technologies. We believe this step will pave the way for additional service organizations and industries to explore expanded operations and use of UAS technologies.
The aerospace industry will conduct a thorough review of the proposed regulations and provide FAA with feedback on their potential impact. Industry shares FAA’s concerns for the safety of both manned and unmanned aircraft. We anticipate that the exchange of views in the rulemaking process will result in a regulatory framework that will ensure safe UAS operations and expedite successful UAS integration into the national airspace.
The aerospace and defense industry applauds FAA for issuing the proposed rule and we look forward to working with FAA on integrating the next generation of aircraft into our nation's airspace.
Arlington, Va. — The Aerospace Industries Association offers its congratulations to Dr. Ashton “Ash” Carter on being confirmed by the United States Senate to succeed Defense Secretary Charles “Chuck” Hagel.
“Ash Carter brings extensive experience to the Department of Defense from his previous responsibilities there, most recently as Deputy Secretary of Defense,” said AIA President and CEO Marion C. Blakey. “His experience will be especially necessary as the country addresses critical decisions on national defense, the support of our armed forces and the men and women who serve.
Blakey added that the aerospace and defense industry will look forward to working closely with Secretary Carter. “Our industry stands ready to support Secretary Carter and the country’s national defense interests. It is an important time to ensure the nation has the funding needed to invest in new technology to address rising and unanticipated national security crises around the globe, as well as to keep our industry robust and internationally competitive. We also share a common commitment to acquisition reform where his expertise will be particularly vital.”
Blakey also recognized outgoing Secretary Hagel for his long dedication to serving his country. “Secretary Hagel served with distinction in the U.S. Army and continued to serve our nation in the Senate as well as in the Pentagon. Secretary Hagel performed his duties with honor and we’re grateful for his service.”
Statement by International Coordinating Council of Aerospace Industries Association Chairman Marion C. Blakey
Arlington, Va. — The International Coordinating Council of Aerospace Industries Association (ICCAIA) supports the international aerospace community as it seeks a timely and effective replacement for Halon, widely used as an aircraft fire extinguishing agent.
In a recent announcement, Airbus SAS, The Boeing Company, Bombardier Inc., Embraer S.A., Textron Inc., and the Ohio Aerospace Institute have initiated activities to form the Halon Alternatives for Aircraft Propulsion Systems (HAAPS) consortium. The announcement states “This international collaboration among aircraft manufacturers, fire extinguishing system suppliers, engine/auxiliary power unit/nacelle companies, and other key stakeholders aims to identify a common environmentally- acceptable non-halon fire extinguishing solution(s) for use in engine and auxiliary power unit (APU) fire zones”. The full text of the announcement can be found at http://www.oai.org/docs/Final-Approved-HAAPS-Press-Release-2015-01-26.pdf .
New production of Halon has been banned by international protocol on substances that deplete the Earth’s ozone layer. The European Union and International Civil Aviation Organization require the use of non-Halon engine and APU fire extinguishing alternatives on new design aircraft beginning this year. The EU also has set a requirement of 2040 to retrofit all existing aircraft.
With this in mind, ICCAIA supports the HAAPS consortium goal. We anticipate that this consortium will not only discover an acceptable solution to this challenge, but also shorten the time and expense required.
AIA is the premier trade association representing the nation's the nation’s leading aerospace and defense manufacturers and suppliers.
Purpose: The Director, Legislative Affairs supports development of the Association’s legislative program, communication of the aerospace and defense industry’s concerns and priorities to Congress, and apprising AIA members of Congressional actions and their impacts. In particular, the position is responsible for monitoring and reporting on pending legislation affecting the industry involving international trade programs and issues, recommending and implementing AIA positions and strategies to be undertaken in their regard, and advocating those positions before Congress and affected federal agencies. It is expected that this position will involve federal registration as a lobbyist.
Nature and Scope of Work: This position reports directly to the Vice President, Legislative Affairs, and provides primary legislative support to the International Affairs Division. Core duties and responsibilities are as follows:
Monitors Congressional activity, pertaining to aerospace trade and international affairs issues, and provides timely feedback to AIA members; recommends AIA positions and strategies for legislative advocacy to support AIA strategic goals.
Develops and maintains strong working relationships with Congressional staff and Members of Congress. Meets regularly with Congressional Members and staff, both independently and with others.
Works closely with member company representatives, broad and multi-industry coalitions, and other associations to develop, promulgate and advance industry positions.
Coordinates and assists the work of the Senate Aerospace Caucus, under the direction of Caucus co-chairs;
Coordinates with other staff and assists in preparation of AIA activities at major international air shows;
Reviews and contributes to articles, reports, electronic communications, and other written materials reporting on legislation and advancing industry positions. Assists in writing material for the Association's weekly Legislative Update as well as periodic internal and external reports.
Drafts Congressional testimony to be presented by AIA executives, and coordinates hearing activities to ensure a successful and responsive presentation.
Serves as the Association's central resource person on trade and international affairs legislative activities. As such, responds to inquiries from Congressional members and staff, member companies, and the public. Serves as staff liaison to AIA councils, committees and working groups with jurisdiction over this subject matter.
Qualifications: The following are qualifications for this position:
• Four year college degree required; degree in political science, international affairs or related concentration preferred
• Three to five years of experience on Capitol Hill, in the aerospace industry, and/or trade association preferred
• Excellent interpersonal, research, and communications skills (verbal and written)
• Proven skills in making presentations before small and large groups
• Knowledge of legislative and policy issues and programs as they relate to the aerospace and defense industry
To: March 18, 2015
The Executive Report is an AIA quarterly publication which provides news and information about our association membership, AIA initiatives and events, and other information from around the industry.
Featured this quarter in the Executive Report:
Remarks to International Aviation Club
EXCERPT FROM PREPARED REMARKS:
Marion C. Blakey, President and CEO, AIA
Wednesday, January 28, 2015
Gerry, thank you for that very kind introduction and good afternoon. It’s always great to join so many friends and colleagues at the start of a pivotal year for aviation.
We’ve seen such pivot points before and what a huge difference they can make. For example, last month, I joined many others in commemorating the seventieth anniversary of the Chicago Convention. In the same Hilton Hotel that hosted the Convention, it was clear that the 52 signatory nations did much more than create a body of rules for one transportation sector among many.
The Convention revolutionized how we live today in ways that simply could not have been imagined at the tail end of World War Two.
And it was remarkable that the Convention moved forward at a time when the swift end of the war was not assured. Indeed, with the ink on the Convention’s proclamation barely dry, the Battle of the Bulge erupted nine days later, prolonging the war in Europe for five bloody months. But the signers of the Convention knew that even in the darkest times one can imagine a better future and help bring it about.
Similarly, there was another war raging in our country over a century and a half ago, when a determined Abraham Lincoln pushed for the Transcontinental Railroad. Lincoln recognized the transformative power of this means of bringing people together would be well worth the enormous cost, even during a time of conflict.
Lincoln also took the long view about the value of education in affecting positive change. “The philosophy of the school room in one generation will be the philosophy of government in the next,” he said. I look here and see people well qualified to educate our current policy makers and the public about our industry’s vital role in positively shaping our modern world. And this year you will really need to be heard. And there are key decision points looming that require active educational efforts by all of us.
Policy makers in Washington, Montreal and in Europe will soon decide on policies that will have tremendous long-term implications for aviation and the global economy. For the sake of a future in which the safest form of transportation will become even safer, in which aviation makes greater strides to reduce global warming, and in which manufacturers of unique Unmanned Aircraft Systems will help save thousands of lives – we all need to be heard.
You know the stakes. Will we preserve industry’s innovative potential to make breakthrough leaps in safety and environmental technologies? Or will we burden industry with inefficient command-and-control regulations that stick us with costly, unproductive mandates?
With growing dynamic demand, will we adopt trade and export promotion policies that encourage our aviation manufacturers to compete internationally? Or will we get bogged down in polarizing political arguments that create uneven playing fields in the international marketplace?
Let’s hope that informed by enthusiastic advocacy efforts, policy makers world-wide will grasp the importance of today’s critical aviation issues. Let’s hope they make the right choices for the sake of our collective future.
Those choices are coming soon. In just a few days ICAO will host an important conference on aviation safety in Montreal. Given last year’s events, it’s appropriate that ICAO work to improve aircraft tracking and responses to planes in distress. We can avoid a repeat of the confusion following the tragic disappearance of Malaysia Airlines Flight 370.
In accomplishing this objective, however, let’s proceed with care. The rush of some regions to impose their own regulations is very counterproductive. It works against the broader safety goal we seek by forcing into the system inefficiencies, design complexities and a lack of harmonization. Many in this audience can spur rational progress by educating the decision makers in Montreal about this issue’s nuances.
In Montreal, the group I chair, the International Coordinating Council of Aerospace Industries Associations, ICCAIA, will call for a near-term focus on performance based requirements rather than prescriptive technology requirements for airline tracking. We believe a collaborative regulatory framework is the way to go, enabling various technology alternatives to be deployed over time.
Let me add one point about last year’s Malaysian Airlines incident regarding the need for all stakeholders to responsibly address aviation’s safety issues. And that most certainly includes the media.
Some time ago, as National Transportation Safety Board chairman among other accidents I dealt with the tragic loss of American Airlines Flight 587. In doing so, reporters lobbed at me tough but, for the most part, fair questions. What I experienced was a far cry from the sensationalized, wild speculation that occurred after the Malaysian incident. Believe it or not, one cable network’s anchor asked an expert if it were “preposterous” to imagine a black hole causing the aircraft’s disappearance. Preposterous indeed.
Obviously, that’s an extreme example. But let’s face it: We’ve come a long way from when the public could trust most major broadcasters to address serious issues thoughtfully as opposed to sensationally.
One means to ensure responsible aviation coverage is to educate people about what industry is doing to make aviation’s enviable overall safety record even better. AIA’s new report: “Industry Innovation and Government Oversight,” is one example of what we can all do to foster dialogue and greater understanding of complex issues. This report illustrates how industry-government collaboration on risk-based decision making, data sharing and safety promotion has led to significant safety improvements.
The report focuses on the certification and delegation system, through which the FAA is leveraging qualified industry expertise and organization to keep up with ever-increasing market demand for safer, innovative products.
AIA’s broader intent, as Congress turns to the FAA reauthorization bill is to safeguard the ongoing certification process against unnecessary regulatory changes. Perhaps Congress can even strengthen the process. By continuing to streamline and expand FAA delegation, industry will be able to offer new capabilities that will bolster aviation safety. This in turn will free FAA’s staff to focus on critical issues and long-term safety trends. Such actions will work to strengthen safety throughout the international system.
In the FAA bill, we believe Congress should also work to ensure that other national authorities have the incentive to adopt a streamlined process for aircraft certification. As the FAA remains the gold standard for certification, it makes no sense that U.S. manufacturers be charged millions to get other nations to certify equipment the FAA has already certified. This is another area where a spirit of harmonization makes eminent sense.
Of course no FAA discussion can neglect this year’s deadline for integrating civil Unmanned Aircraft Systems into the national airspace system. I think we all recognize that the congressional mandate placed a real burden on the FAA, one that is difficult to meet. And it’s clear that safety issues have been a major hold up for the small UAS rule and rules for other UAS categories.
While AIA and our member companies understand how these concerns are affecting the process, some perspective is in order.
Typically, the safety conversation boils down to two things: how to avoid collisions between piloted aircraft and UAS, and how to ensure that UAS safely land, even after the rare loss of communications links. But we should look at the broader picture. While banning civil UAS or slowing their introduction could marginally reduce an element of risk, doing so would demonstrably make our world less safe. UAS have tremendous life saving potential when lost people need to be found, when wildfires develop, tornadoes hit, and power lines, oil rigs and bridges need close inspection.
As the regulatory process moves forward, decision makers should take into account the need to balance justifiable safety concerns, with the significant safety gains we can realize from UAS operations. Again, education and engagement will hopefully lead to better policy-making.
The future of our aviation infrastructure is another major concern. As this audience well knows, but not all policy makers grasp, our nation’s air transportation system is experiencing serious capacity challenges, and other national systems are as well. Ongoing NextGen modernization efforts are making a major difference in helping to prevent congestion and delays, reduce carbon emissions, and improve safety.
But to be fully effective, NextGen must be fully funded and harmonized with the European SESAR system. Unfortunately, FAA’s NextGen budget for this fiscal year is $200 million below the Administration’s request of only two years ago. And if sequestration returns in Fiscal Year 2016, NextGen funding could further decline. This year AIA is urging Congress to take a hard look at needed investments for the future, and ensure that NextGen doesn’t fall behind. I hope you will join us in calling our lawmakers’ attention to this important issue.
A final note on aviation regulatory policies. I sincerely hope that ICAO reaches agreement next year on market-based mechanisms to reduce aviation’s carbon footprint. Through NextGen improvements to the management of traffic flow and through industry’s strong commitment to R&D on improved aircraft and engine designs and alternative jet fuels, we’re making tangible progress. We need policy makers to understand that haphazard, prescriptive regulations will only marginally make things better at great cost, and impede the game-changing breakthroughs that this industry is prepared to deliver.
Finally, I’d like to touch on economic and trade policies that can also aid our industry’s growth. We know the trend lines are positive. Last year with a big boost from civil aircraft sales abroad, which represent 88 percent of aerospace exports, overall U.S. aerospace exports grew from roughly $111 billion in 2013 to nearly $119 billion. Going forward, Boeing’s market outlook projects that over the next 20 years, the number of airline passengers will grow 4.2 percent each year, and cargo traffic 4.7 percent per year, well over projected annual world economic growth of 3.2 percent. As a result of this growth, Boeing anticipates airlines will need nearly 36,800 new airplanes in the next 20 years, valued at $5.2 trillion.
With these positive conditions helping to bolster an aerospace and defense industry hampered by budget austerity, you’d think certain things would be no-brainers for Congress to support. One example is passing trade agreements like the TransPacific Partnership that will expand significantly both cargo and passenger traffic between America and key Asian markets.
Another is supporting the continued operations of the Export Import Bank of the United States. This institution helps finance billions of U.S. aerospace exports, supports more than 200,000 jobs, and strengthens the defense industrial base by helping large, medium and small companies succeed in new markets abroad. Two years ago, Bank President and Chairman Fred Hochberg told this gathering that the Bank “has a more vital role than ever to ensure that capital goods keep flowing to help move the global economy forward.” I agree wholeheartedly.
Unfortunately, a few rigid ideologues in Congress have made it their crusade to halt the Bank’s operations. I imagine that there are foreign manufacturer representatives here who are flabbergasted that the U.S. would even consider declaring unilateral disarmament when it comes to the international arena of export promotion.
Well, I can tell you one thing for sure. AIA has taken up the fight for keeping Ex-Im going strong and we won’t stop until the Bank is fully reauthorized, hopefully before the June deadline the previous Congress imposed. And if you represent a manufacturer of everything from passenger to business jets, to helicopters that are sold abroad, and especially the parts and components that keep them flying, I know you’ll be there with us fighting every step of the way to make sure Congress knows the stakes and acts accordingly.
In closing, I hope that when this group is together a year from now we can look back and say that aviation policymakers rose to the occasion, and like the forgers of the Chicago Convention, helped aviation lead the way in creating a better world. I know there are some people in the audience who had the honor of meeting Welch Pogue as did I, the remarkable gentleman and Civil Aeronautics Board chairman who was the chief architect of the Chicago Convention. Before he passed away 12 years ago at the age of one hundred and three, Welch gave a speech in which he lamented that future international aviation agreements will be slow in coming. “But do not give up in despair,” he said. “Turn to those things that are possible.” It is in this spirit of hoping that working together we can achieve the gains that are possible, I thank you again for the opportunity to speak to you today and for all that you do to make our great aviation system even greater.
The aerospace industry depends on technical standards from more than one hundred different standards-developing organizations. If a recent government trend requiring that standards incorporated by reference into rulemakings be made available free on the internet is not reversed, the viability of these critical standards developers will be threatened and both the industry and its regulators and government customers will lose their invaluable services.
To: Oct. 2, 2015
To: May 21, 2015
The single most dangerous part about flying continues to be driving to the airport. The decades-long upward trend in aviation safety is largely a result of the partnership forged between industry and regulators who share the goal of making air travel as safe as possible.
Taken by any measure, aviation continues to top the list of the world’s safest forms of transportation. In terms of hours flown, number of passengers transported, and number of aircraft in the air – across commercial, general aviation and cargo sectors – the single most dangerous part about flying continues to be, in the words of one analyst, “driving to the airport."
In total, the decades-long upward trend in aviation safety reflects not only technological advances, and the continuous evolution of government regulations and policies, but also the partnership forged between industry and regulators who share the goal of making air travel as safe as possible. This sustained, joint approach – more than any single advancement– accounts for the significant improvement in air safety since the inception of flight.
Aerospace Industries Association (AIA), a non-profit corporation representing the nation’s leading aerospace manufacturers and suppliers, is seeking candidates for employment in its Communications Department. The position of Manager, Multimedia Communications reports to the Vice President and the Assistant Vice President of Communications, but is required to collaberatively interact with all members of the AIA team.
The accepted candidate will be working as an Multimedia Communications Manager with wide-ranging focus in the following areas:
• Multiple Internet site functionality, features and content development
• Social media execution and strategy
• Intranet technical support
• Manage external support vendors
• Video production
• Basic graphic design
• Website metrics, analytics and statistics tracking and reporting
The Multimedia Communications Manager is responsible for all aspects of AIA’s primary website as well as number of related websites and social media pages. As the sole web-related position at AIA, the Multimedia Communications Manager sets strategic goals for AIA’s web presence, and ensures the website is functional, well-designed and up-to-date. This position develops and features content that promotes AIA initiatives.
Social media outreach to key targets of AIA’s advocacy efforts is a central and growing area of focus for the organization and requires proven skills. Public outreach campaigns such as the Second to None (www.secondtonone.org) demand heightened proactive and reactive communication via outlets such as Twitter, Facebook, YouTube, Flicker, AIA Blog etc. The Multimedia Manager will lead these efforts both strategically and in terms of tactical implementation.
AIA is looking for a candidate with 2+ years of practical experience in website administration including:
• Knowledge of website usability methods and standards
• Experience with and understanding of web coding
• Experience and comfort with the following programs/platforms:
o Website Content Management Systems (CMS) (Expression Engine, Joomla!, WordPress, etc.)
o Microsoft Office Suite (Word, PowerPoint, Excel)
o Adobe Suite (Acrobat, Illustrator, Photoshop)
• A four-year college degree (or practical equivalent)
• Qualified applicants must be able to communicate effectively in written and spoken English
• Personal character and integrity, matched with self-motivation and a good work ethic
• Excellent project management skills and the ability to multitask a high volume of deliverables with attention to detail
• Capitol Hill experience is a plus
To: May 7, 2015
To register: http://bit.ly/1sCufi1
AIA, ASD, ATA e-Business Program
2015 S1000D User Forum
Actualizing S1000D - Making it real!
September 21-24, 2015
Omni San Diego Hotel
675 L Street
San Diego, California 92101
Hosted by the Aerospace Industries Association
Putting S1000D into practice, whether it’s deciding how to contract to it, converting legacy data, implementing a technical solution, or achieving your role as a supplier, can seem overwhelming. The objective of this User Forum is to bring real-world experience in contracting, alternate approaches to affordable and sensible conversion of legacy data, and optimizing project scope for supplier use. Attendees of the Forum will hear real use-cases and examples of successful strategies to pave the way for S1000D adoption.
This year's User Forum is sponsored by the Aerospace Industries Association.
This forum will feature:
• Tutorials and training
• Technical and management tracks
• Vendor demonstrations and presentations
• Updates on the latest developments of the S1000D Specification
• Integrated Logistics Support (ILS) Specifications Day (September 24, 2015)
User Forum registration opens May 2015
For more information and call for abstracts visit: www.s1000D.org
To: Sept. 24, 2015
For more information please visit: www.s1000D.org
To: June 4, 2015
In response to tasking by the FAA as defined in a letter dated July 3, 2013, titled, “Request
Formation of Advisory Group to Address Specific Engine and Installation Icing Issues”, the EIWG has
studied the issue of ground operations of turbine engines during heavy snow conditions. This report
provides the short term findings and recommendations.
To: October 1, 2015
Hosted by: UPS
To: March 25, 2015
Hosted by: The Boeing Company
To register: http://bit.ly/1zcqQCX
Revised Certification and Qualification Requirements for Non-destructive Test Personnel
Non-destructive testing (NDT) is a critical commodity for military and commercial aviation and other industries for detection of potential defects, cracks and other irregularities of virtually every part of the aircraft from the outer structures to the core airframe and propulsion systems.
NAS410 is a global, cornerstone standard for necessary qualification and certification of NDT personnel, and complete revisions to this standard will impact the aerospace industry. A complete revision of NAS410 was published in December 2014 and is available exclusively from IHS. Subscription customers are alerted and automatically receive revision 4.
A 1-hour webcast highlighting the changes in NAS410 was held on January 15, 2015. A recording of the webcast is available here.
The webcast covered new requirements for:
• non-film radiography examination
• level 3 certification
• effectivity, transition and experience hours
• NANDTBs (national aerospace non-destructive testing boards)
• maintaining certification
Chris Carnahan, Aerospace Industries Association, Director, Standardization
John P. Ellegood, Lockheed Martin Space Systems, AIA NDTSC Chairman
Louis R. Truckley, The Boeing Company, AIA NDTSC Executive Secretary
Jon W. Voeller, USAF Nondestructive Inspection Office, Senior Materials Engineer
Duration: 60 minutes
Year-End Review and Forecast
EXCERPT FROM PREPARED REMARKS:
Marion C. Blakey, President and CEO, AIA
December 17, 2014
Good afternoon. I’d like to thank Jennifer and the Communications Council for your great work this past year and congratulate Clif Berry for receiving the Lyman Award. Clif, we appreciate your service to our country and your outstanding body of work on aerospace and defense history.
My thanks also go out to L-3’s Chairman, President and CEO Michael Strianese for his great leadership of AIA’s Board of Governor’s this year. We look forward next year to having David Joyce, the President and CEO of GE Aviation as our Board Chairman and Marillyn Hewson, the CEO, President & Chairman of the Board of Lockheed Martin as our Vice Chairman.
Today, for the 50th time, we gather to celebrate an industry which keeps innovating, keeps saving and improving lives and keeps inspiring our youth. Just think of the future Mars explorers who were so excited to view the magnificent launch and splashdown of Orion twelve days ago. And that’s just one example of the kinds of things our industry does. With the FAA, we’re rebuilding our aviation infrastructure from the ground up – modernizing a 1950s-era radar-based system into a 21st Century satellite-based system. We’re doing cutting edge research on advanced aeronautics like hypersonic scramjets that could lead to significantly shorter trans-oceanic flight times.
But we also gather in a time of significant challenge as we witness unprecedented conflicts cascade around the globe. The events of 2014 remind us that new national security threats can come from old foes or materialize out of nowhere due to a chaotic region’s ongoing strife.
Twenty-fourteen began when the leader of a major power hosted an international event devoted to peaceful athletic competition. But shortly after the Olympic flame was doused, this strongman brazenly invaded a peaceful neighboring country. And then a group of thugs tried to rewrite the Middle East map and gain new adherents through tactics that would shame a barbarian. And tensions in the Far
East, never far submerged, have begun bubbling to the surface again.
Looking at the world’s dangers through either the rose colored glasses of a naïve isolationist or under the green eyeshade visor of a fiscal ideologue simply doesn’t work. It presents a false-color image of reality. It inhibits the clear headed thinking we desperately need about national security and America’s competitiveness.
Today, we’re announcing the results of a poll that shows the American people definitively share this judgment. Right after the election, AIA commissioned a Harris Company voter survey. Harris found that Americans widely recognize security threats are increasing, and are genuinely concerned that the U.S. is less secure than a year ago. We’re releasing findings from the survey today. Here are a few highlights:
• First, seventy-eight percent of voters believe the hostile activities of ISIS, al Qaeda and other groups contesting for control of Syria and Iraq represent an increasing national security threat.
• The concern about this threat is bipartisan; ninety percent of Republicans and 69 percent of Democrats are worried about our security as a result of what’s going on in the Middle East.
• Also, seventy-three percent say they believe the U.S. is less secure, due to cuts in planned military budgets of nearly $1 trillion over a decade.
I should warn members of Congress and potential presidential candidates to ignore the following survey finding at their own peril.
• Given the evolving and increased threats to America’s security, a solid sixty-nine percent of voters want to increase national security spending relative to the federal budget caps set more than three years ago. This view is shared by a majority of voters across party lines—83 percent of Republicans, 63 percent of Independents and 60 percent of Democrats.
• And the same number of voters—sixty-nine percent—say they would be more likely to support a candidate who wants to increase spending on national security.
These numbers don’t surprise me one iota. I’ve long felt the public understands the need to invest in national security, and in the aerospace technologies that propel economic advancement.
Unfortunately, public policies have not kept pace with public sentiment. But that’s not for lack of effort. You all know AIA’s Second to None public education campaign made a lot of noise about the risks of austerity imposed by the Budget Control Act.
And many officials agreed with our point that it’s irresponsible to make defense and domestic R&D investments bear the brunt of budget cuts. And while our companies did well in the FY2015 “Cromnibus” [CROM – ni- bus] bill that passed this weekend, including bumps in the budgets of FAA, NASA and NOAA, the budget caps still remain with us going forward. In addition, last night the Senate passed the short-term tax extenders bill including the R&D tax credit, which is of significant importance to our industry. But the Senate failed to pass an extension of the Terrorism Risk Insurance Act, so we’re not going to take our hand off the throttle with our messaging. And we’re going to add the voices of those pro-aerospace and defense voters to our effort.
In recent months the Second to None Campaign has morphed into a state-of-the-art on-line grass roots advocacy effort. We call it the Second to None Coalition. This is the first time ever that our industry has engaged in a major grass roots advocacy effort like those of other organized political movements of recent vintage. And in just the last week, we’ve added more than 13,000 members to our daily growing list of people who are ready to advocate forcefully to our elected officials on behalf of the investments we need to make to grow our economy and keep our nation safe.
We’ll welcome the voices of our coalition members in the coming months as AIA and our member companies engage with the new Congress and with the national political figures already making travel plans to visit balmy Iowa this winter.
Our message is that elected leaders must address the need for the U.S. to maintain our military superiority and keep ahead of the technology development curve. They also must recognize our military needs the capability to respond to new security challenges that often materialize due to major natural disasters and outbreaks of deadly disease such as the recent Ebola crisis.
We’ll also contend that the downward spiral of defense spending and federal R&D investment is leading to a dangerous decline in our highly skilled aerospace and defense workforce. Sadly, if we woke up tomorrow to a new crisis, we just can’t snap our fingers to get many of our skilled workers back. In addition, our skilled workforce must be reinvigorated as the baby boom generation of engineers and scientists begins to retire en mass.
A third message is that budget austerity undermines our ability to invest in critical R&D that leads to serendipitous breakthroughs like GPS. Our Lyman award winner, Clif Berry, tells us that when he first attended this luncheon 39 years ago, the Pentagon was just beginning to develop the GPS satellite navigation system. I have no doubt sitting amongst us is a bright engineer who’s working on the next great technological advance that will blow our socks off. But I also fear there’s a project manager in our midst who’s worried to death that the budget axe may kill the promising concept she’s working hard to support. Do we really want the U.S. sitting on the sidelines when the next great technological leap is launched at the Baikonur (Bike-a-Nor) Cosmodrome or occurs in China’s Center for Nanoscience and Technology?
All of these concerns translate into clear policy objectives that AIA is pursuing on the industry’s behalf. First and foremost, we’re telling Congress it’s high time they relegate the budget caps to the dumpster of bad policy ideas. The decade-long defense modernization holiday based on the dangerous illusion that history’s zealots have gone on holiday simply must end.
Clearly more and more legislators, alert to changing public opinion, want to address the defense cuts. But we also recognize a one-sided deal will not pass in this divided government. Congress should also take on the domestic R&D investment gap and address other domestic priorities, in the context—as we’ve long said—of a comprehensive deal involving revenue and entitlement reform.
As was the case in 2013, we’ll be pushing for congressional reauthorization of the Export Import Bank of the United States. Our manufacturers of civil passenger and business aircraft, helicopters, and satellites and their thousands of workers count on Ex-Im financial support to compete for international sales on a level playing field in this increasingly competitive marketplace.
This past year, even though we were told the Ex-Im deck was stacked against us on Capitol Hill we took the attitude of “Game On.” And let me tell you, we weren’t subtle about engaging Ex-Im’s foes by starkly pointing out the hazards of unilateral economic disarmament. And we knew we were having an impact when at a key congressional hearing Ex-Im President and Chairman Fred Hochberg held up one of our print ads to make a vivid point. What our ad essentially said is that the Chinese, Russians and French will eat our lunch, or more aptly, take away American jobs, if Congress doesn’t reauthorize the Bank.
Such advocacy helped win the battle, as Ex-Im was extended for nine months, but we’ve not yet won the war. You can count on AIA carrying forward the fight for a full reauthorization until a decisive victory is obtained.
AIA will also be very proactive when the FAA reauthorization bill comes up next year. We’re hoping for a solid bill that further streamlines the aircraft certification process, accelerates air traffic system modernization, and facilitates integration of unmanned aircraft into the National Airspace System. Further, we want the FAA enabled to freely support our superior aviation products in international forums. If we truly want a safer and more efficient global aviation system, buy American is a good place to start.
Turning to the Executive Branch, AIA will be pounding the pavement to push the Administration to produce tangible results for our industry. We hope to see in 2015 real movement on a National Defense Export Strategy and a broader aerospace and defense trade initiative.
We’re continuing to work with the State Department to reform the remaining categories of export controls. By the way, since the reforms started a year ago, there has been a sixty-four percent reduction in the number of ITAR licenses submitted to the State Department to export aircraft and aircraft engine parts. That corresponds to $14 billion in these less sensitive technologies being licensed through the more appropriate, less onerous Commerce system.
Next year we’ll also be working to ensure the Pentagon moves forward on needed defense acquisition system reform. Ash Carter is no stranger to this issue. We’re looking forward to his confirmation and we’re expecting he’ll provide the clear leadership that we need to achieve meaningful changes to a very cumbersome and inefficient system. The current system hurts our smaller firms, inhibits innovation and makes it harder to get needed equipment in the hands of our war fighters.
I suspect some of you may be thinking, Marion, you’ve spoken about a lot of policy issues but haven’t touched on your annual forecast numbers. Yes, this speech is a departure from the past, but we don’t want you to go away empty handed. In front of you is a card with simple directions that will allow you to download our entire year end review and forecast report.
I would like to mention one highlight from the report. Despite the downward pressure the federal budget situation has exerted on our industry, with a big boost from civil aircraft and space sales abroad, overall aerospace exports grew from roughly $111 billion in 2013 to nearly $119 billion. This resulted in a net surplus of nearly $61.2 billion, our best aerospace trade balance in history.
As you know, the Administration promised five years ago to double U.S. exports by next year. Make no mistake this industry is doing its part to make that pledge come true.
Let me close with a few thoughts as we look back on the past few years of paralyzing gridlock in Washington. An era I think it’s fair to describe as wrought with political polarization and dangerous procrastination.
I will offer two simple messages for members of the incoming 114th Congress, and say the same to the current Administration as well as to candidates gearing up for the 2016 elections. First, on behalf of the aerospace and defense industry, we make one simple request – please start listening.
So to the new Congress, remember the saying “Ideology knows the answer before the question has been asked.” Look at the polls – the American people are fed up with Washington, fed up with elected officials letting ideological extremism serve as an excuse for failing to listen to the public as opposed small factions of party activists. They demand that you ask the right experts the right questions.
Let me put my advice in the context of our industry. When the small business owner from your district tells you failure to reauthorize Ex-Im puts his workers at risk, listen first to this all-important voice from back home. Be sure you remember those words when folks at the Club for Growth tell you that your “club score” will go down if you don’t vote against the Bank. You know they’re hinting you might not see as many PAC dollars next cycle.
When the Joint Chiefs tell you American lives will be lost if we don’t restore defense investment to adequate levels….When an intelligence analyst tells you that defeating ISIS requires new strategies and new technologies for the war fighter….And when the wounded warrior at the VFW back home tells you that his mine resistant, ambush protected vehicle saved his life…listen very carefully.
And may the words of these real experts ring clearly in your ears when it’s time to go to the negotiating table and weigh America’s national security and investment needs up against our fiscal challenges.
Yes we can have a “grand bargain,” but one that doesn’t force us to sacrifice the very activities that make our nation strong and secure.
My final message for the 114th Congress and all candidates looking at a run in 2016 – is remember those sixty-nine percent of voters who want to back candidates who support more spending on national security. Ask yourself; am I ready to make the tough decisions in the next twelve months to protect America?
If not, we respectfully suggest you consider the words of Winston Churchill, who in a more dire time said, “the Americans will always do the right thing…after they’ve exhausted all the alternatives.” I sincerely hope you’re at that point.
With that, thank you again for the tremendous opportunity to speak to you at this, my eighth year end luncheon, and I’ll be happy to take your questions. When you step up to the microphones please identify yourself and your organization.
Arlington, Va. — The Aerospace Industries Association released data today from a study conducted on their behalf by Harris Poll showing that after discussing present and future security threats facing the United States, more than two thirds of registered voters (69 percent) say that given the evolving and increased threats to America’s security, the U.S. government should increase spending on America’s national security relative to the caps set more than three years ago. The same number (69 percent) says they would be more likely to support a candidate for public office who supports increased spending on national security. The study was conducted by telephone in November among over 800 registered voters.
“These numbers don’t surprise me one iota – the public understands the need to invest in national security, and the aerospace technologies that help provide that security and propel economic advancement,” said AIA President and CEO Marion C. Blakey. “The new Congress should sit up and listen to them attentively.”
A majority of voters across party lines (83 percent of Republicans, 63 percent of Independents and 60 percent of Democrats) share the sentiment that the U.S. government should increase national security spending relative to current budget caps. In addition, nearly four out of five voters (78 percent) say they believe threats to American security raised by increased activity from ISIS/ISL, al Qaeda and other groups in Syria and Iraq are increasing, including majorities of Republicans (90 percent), Independents (75 percent) and Democrats (69 percent). Finally, 73 percent say they believe the United States is less secure due to cuts of nearly $1 trillion over the 2012-2022 timeframe in planned budgets for the military, including majorities across the entire political spectrum (Republicans – 90 percent, Independents – 71 percent, Democrats – 55 percent).
“Public polls are at historic lows in terms of voter perceptions of Congress,” Blakey said. “If this new Congress is to restore any faith in our political process, they can start in January by revisiting the budget caps to reflect today's national security needs.”
The study was conducted November 13 – 16th, 2014 by telephone by Harris Poll on behalf of AIA among 818 registered voters nationally, with a sampling error of +/-3.6%. A full methodology is available upon request. Results are weighted to be representative of voters demographically and geographically across the United States.
Today, AIA held its 50th annual Year-End Review and Forecast. Along with providing an overview of the aerospace and defense industry, AIA released poll results that focus on the public's opinions about national security.
Arlington, Va. — F. Clifton “Clif” Berry, Jr., a long-time journalist, author and public relations professional in the aerospace and defense field, has been selected to receive the 2014 Lauren D. Lyman Award for outstanding achievement in aerospace communications.
“We’re delighted to recognize Clif Berry with this year’s Lyman Award,” said AIA President and CEO Marion C. Blakey. “His long service, unique insights and strong voice on our industry epitomize the qualities that Deac Lyman brought to his craft.”
Berry served in the U.S. Army for more than 20 years before retiring as a Lieutenant Colonel in 1975, including public affairs duties at the Office of the Assistant Secretary of Defense (Public Affairs). He went on to posts as editor at a wide variety of trade publications, including Armed Forces Journal, AIR FORCE Magazine, Air Power History and National Defense magazine. He has also written and packaged a lengthy list of non-fiction books on aerospace and defense topics. He served for more than two decades on the board of directors of Summit Aviation at Middletown, Delaware, and was a master parachutist and private pilot with land and seaplane ratings.
When asked about lessons learned, Berry said, “Do the research, ask questions, listen, learn and write.”
Berry will receive the award at AIA's 50th Annual Year-End Review and Forecast luncheon Wednesday, Dec. 17.
The award is named after Lauren “Deac” Lyman, a Pulitzer-prize winning aviation reporter with the New York Times who later had a distinguished career as a public relations executive with United Aircraft, a predecessor to United Technologies Corporation. First awarded in 1972, the prize goes to a journalist or public relations professional in aviation who exhibits Lyman’s high standard of excellence. UTC is the longtime sponsor of the award.
EXCERPT FROM PREPARED REMARKS:
Timothy Keating, Senior Vice President, Government Operations, The Boeing Company
December 12, 2014
Ex-Im is but one case study of the U.S. political system losing its bearing. Another is the legislative impasse over the size and composition of the federal budget. Through sequestration Congress has tried to address what really is a problem with entitlements and other forms of mandatory spending – which make up roughly two-thirds of federal outlays – by gutting discretionary spending.
Under current law more than $70 billion in immediate, across-the-board cuts to discretionary programs and activities will go into effect in Fiscal Year 2016, shared equally by defense and domestic agencies; all of which will be felt, one way or another, by the companies and communities represented in this room and across the state of Virginia.
Remember that projected defense budgets have already been cut significantly since the post-9/11 peak – by nearly $1 trillion when you include program cancellations and other reductions by Secretary Gates, the 2011 Budget Control Act, the sequester of 2013, and then Bipartisan Budget Act at the end of last year.
And because of the way sequestration is structured – with massive savings needed immediately and pay and benefits off-limits – a 10 percent top-line sequester amounts to significantly bigger cuts to training, maintenance, procurement, and research and development accounts; this at a time when the world is growing more turbulent and rival powers are modernizing their armed forces.
Companies like Boeing saw the writing on the wall and made some difficult, at times wrenching, changes to our workforce and geographic footprint to prepare for the defense downturn. The Department of Defense, by contrast, has been prevented from making the strategy-guided management choices necessary to maximize the funding available to sustain our military readiness and technology superiority.
Furthermore, with investment funding shrinking for military modernization it is all the more imperative to have a defense acquisition system that can make every dollar count – for the taxpayer and war fighter alike. We applaud the initiative of Senate and House Armed Services Committee leadership to solicit recommendations to further reform and, more importantly, improve defense acquisitions to reduce unnecessary red-tape while encouraging more innovation. Boeing is contributing to this effort and will provide the committees with its own list of recommended changes in a few weeks.
These management changes are so urgent because if sequestration returns – and stays for the rest of the decade – the U.S. defense and aerospace industry – most of which consists of small- and medium-sized firms in the 2nd and 3rd tier of the supply chain– will be forced to lay-off thousands of employees with unique military skills and close more factories and research labs. The lost capacity and capabilities resulting from these cuts cannot be rebuilt or brought back quickly if U.S. national security imperatives or budget priorities change in the future.
We can’t forget that sequester’s damage goes beyond the military to other key agencies of government – like Homeland Security, FAA, NASA, the FBI, NIH, and the State Department – that are important to public safety, future scientific breakthroughs, and America’s influence around the world.
Arlington, Va. — The Aerospace Industries Association presented its first Wright-Curtiss Legacy Award December 2 to U.S. Sen. Saxby Chambliss (R-Ga.), in recognition of his longtime support of the aerospace and defense industry.
Sen. Chambliss is a two-term Senator and was first elected to Congress as a representative of Georgia’s 8th District in 1994. Sen. Chambliss serves on the Senate Armed Services Committee, is currently vice chairman of the Senate Select Committee on Intelligence and co-chaired the Senate Aerospace Caucus. Throughout his nearly 20 years working on Capitol Hill, he has been widely recognized as a leading Senate expert on national security, homeland security and intelligence issues.
“The Wright-Curtiss Legacy Award recognizes a retiring legislator who has been a true champion of our industry. Senator Chambliss has been exactly that,” said AIA President and CEO Marion C. Blakey. “It is our honor to present the award, named for both Wright brothers and Glenn Curtiss, the aircraft industry’s founder, to Sen. Chambliss for his strong advocacy for America’s preeminence in aviation, space and defense. He has been true to the spirit in which the Wrights and Curtiss began this great American journey of success, innovation and leadership.”
“It has been an honor to serve as the co-chair of the Senate Aerospace Caucus and a pleasure working with AIA as advocates for the aerospace and defense industry,” said U.S. Sen. Saxby Chambliss. “Since the time of the Wright Brothers and Glenn Curtiss, the United States has been the world’s leader in the advancement of air and space capabilities. AIA is an integral part of that legacy and its continued support helps assure America’s place at the top of the field. I am proud of our accomplishments and honored to receive the first Wright-Curtiss Award.”
The new Wright-Curtiss Legacy Award is presented to retiring members of Congress who, across their tenure in office, have made a lasting impact on behalf of the aerospace and defense industry. The award, which recognizes an unwavering dedication to our industry’s commitment to national security, aviation and space endeavors, was presented to Sen. Chambliss at a Senate Aerospace Caucus reception on Capitol Hill.
(pictured left to right: Sen Saxby Chambliss (R-Ga.); The Honorable Frank Kendall – Undersecretary of Defense for Acquisition, Technology and Logistics; Incoming Senate Aerospace Caucus Co-Chair Sen. Jerry Moran (R-Kan.); Marion C. Blakey, President and Chief Executive Officer of the Aerospace Industries Association)
The future of America’s space program is here and we want you to meet some of the people who make it possible. Join us on December 3, 2014 for a live, on-line broadcast with some of the young engineers who are working to make the Orion EFT-1 mission a success.
AIA's National Aerospace Standards are now available in digital 3D. These 3D standards can help increase efficiency and simplify the design and manufacture of complex products.
Responsible for addressing issues and strategies related to communications with news media, decision makers, the aerospace and defense community, and the general public. The Council also discusses best practices in communications. AIA contact: Chip Sheller, Vice President, Communications.
On Wednesday, November 5, 2014, the National Aeronautic Association named AIA and the National Association of Rocketry (NAR) the 2014 recipients of the Frank G. Brewer Trophy.
On Wednesday, November 5, 2014, the National Aeronautic Association named AIA and the National Association of Rocketry (NAR) the 2014 recipients of the Frank G. Brewer Trophy. The award serves to recognize an “…individual, a group of individuals, or an organization for significant contributions of enduring value to aerospace education in the United States.”
AIA and NAR are presented with the Frank G. Brewer Trophy. From left to right: Betsy Schmit, Vice President, National Security, AIA; Bob Brown, President, Academy of Model Aeronautics; Trip Barber, TARC Manager, NAR.
Together, AIA and NAR organize the Team America Rocketry Challenge (TARC). This nation-wide youth program advances science, technology, engineering and mathematics education by challenging seventh through twelfth grade students to design, build and fly model rockets. Student’s rockets must meet specific design criteria and be flown within certain height and time windows in order to advance in the competition.
Since its establishment in 2003, TARC has involved over 60,000 students nationwide in its program.
Featured this quarter in the Executive Report: A message from Marion Blakey regarding the 2014 elections, Q&A with Aurora Flight Sciences' John S. Langford, a Farnborough Air Show recap and much more.
The Executive Report is an AIA quarterly publication which provides news and information about our association membership, AIA initiatives and events, and other information from around the industry.
Featured this quarter in the Executive Report:
Cybersecurity attacks continue to increase in frequency and sophistication for the aerospace and defense industries. A new requirement of contracting with the Department includes a new information security clause:
DFARS clause 252.204-7012 to safeguard Unclassified Controlled Technical Information (UCTI), effective November 13, 2013. The clause is required for all new DoD contracts and subcontracts and will affect companies of all sizes.
In this paper, AIA helps you understand:
The new DFARS clause and how to comply with Security and Incident Reporting Requirements
Marion C. Blakey, President and CEO, AIA
The 113th Congress will soon be in the history books, with a record for advancing long-term economic growth that's spotty at best. Indeed, there are a couple of significant actions legislators could take that would tangibly benefited jobs creation and business performance.
Unfortunately, partisan gridlock has gotten in the way.
The research and development tax credit, which provides an important incentive during these times of fiscal austerity for thousands of companies to make long-term investments in innovation, is critical to creating economic growth. At nearly $10 billion a year, this credit supports companies that invest working capital in basic research and in applied research aimed at the creation or improvement of products. More than 70 percent of the credit is used to fund the salaries of R&D workers who hold the kinds of high-quality jobs that fuel our national economy, with the remainder applied to investment in new plant and equipment. Unfortunately, although the House passed a permanent extension of the current credit, the Senate has yet to act, which may result in companies declining to make positive investment decisions in this climate of uncertainty.
Currently, the U.S. significantly trails other leading countries in providing incentives for companies to conduct research and development. The Information Technology and Innovation Foundation estimates the U.S. ranks 27 out of 42 countries in R&D tax incentive generosity, either through providing incentives such as cash grants or enhanced tax deductions. When you couple this fact with the high U.S. corporate income tax rate one must ask if we are on the right track or wrong track in terms of competitiveness. Action by the upcoming lame duck session of Congress or by the 114th Congress to make permanent and strengthen the existing R&D tax credit would move us in the right direction.
I’ve also written in the Washington Business Journal about the need to make permanent the operations of the Export Import Bank of the United States. The Ex-Im Bank helps finance the export of billions of U.S. goods and services at a net gain to the taxpayer, supports good American jobs — 205,000 last year — and strengthens the aerospace and defense industrial base by helping large, medium and small companies create new markets abroad, thus mitigating the impacts of budget austerity at home. Indeed, some of our industry’s greatest gains in recent years have come through Ex-Im aided sales abroad of passenger and general aviation aircraft, helicopters, launch vehicles and satellites.
Local companies have greatly benefitted from Ex-Im. In 2013, 52 Virginia companies assisted by Ex-Im exported $615 million in goods and services; 43 Maryland companies totaled $388 million in Ex-Im aided exports; and 13 District of Columbia companies had $57 million in exports boosted by Ex-Im.
As the congressional session wound down in September, Congress reauthorized Ex-Im for nine months. While the Bank will remain operational for certain until June, our industry and exporters need the long-term assurance that the Bank will be there for them.
EXCERPT FROM PREPARED REMARKS:
Timothy Keating, Senior Vice President, Government Operations, The Boeing Company
September 30, 2014
U.S. Aerospace & Competitiveness
We need to do a better job of explaining what aerospace means to this state - and to this country. During an era in which the U.S. has been effectively de-industrialized - with factories closed, company towns abandoned, and millions of jobs outsourced overseas - aerospace has remained one of the shining exceptions. We are one of the last business sectors that still employ large numbers of Americans at good wages and benefits to make things in this country - and then sell those best-in-class products around the world. These are the kinds of companies that were the mainstay of the U.S. economy when I grew up in a union household in Scranton, Pennsylvania; the kinds of companies that created the American middle class and made this country the most prosperous and powerful on earth.
And when you hear people complain that "we don't make things in this country anymore," consider that just Boeing alone employs roughly 160,000 people that either build things or directly support those who do. Then there are the 2.5 - to 3 million jobs supported by the U.S. aerospace industry overall through our collective supply chain- jobs that allow people to make a decent living.
Traditionally, U.S. aerospace companies have not competed on price. We have, and will continue to stay ahead through innovation. Yet, as foreign competitors improve their level of quality, we cannot be oblivious to the cost of doing business going forward. Here the relevant impact is not on our bottom line today or next year - but, in the case of Boeing, on our ability to sell an airplane to an international customer ten or 20 years from now.
Manufacturing executives, especially those in export-driven sectors, talk a lot about being competitive. But, frankly, it's not always clearly understood what exactly we are referring to- and how that affects the difficult choices made with respect to the many elements of our business. In fact, a lot of the more controversial management decisions by Boeing- affecting labor, our supply chain, geographic footprint, public policy - start to make a lot more sense when put in the context of a global market that is growing more crowded and less forgiving every year.
For example, when aerospace companies and other advanced manufacturers receive tax incentives to either continue operating in Washington or start new programs here, it is widely reported and criticized as some kind of big tax giveaway. In reality, the dollar numbers you hear quoted represent, at best, a partial discount for the added cost of doing business in this state versus another part of the county with less onerous tax levels, regulatory schemes, and costs of living. On balance, the preponderance of the benefit will go to the Washington economy and, ultimately, into the state treasury. Yet rarely is that the story getting out, which is most unfortunate when some politicians in Olympia begin to flirt with the idea of rescinding these incentives.
All told, there needs to be a more informed dialogue between the public and private sectors about how together we can compete on a global stage - not only against foreign companies, but with entire countries, even continents in the case of Airbus and Europe, that have put the power and resources of the state into supporting their domestic aerospace sectors.
Washington, D.C. Dysfunction
When it comes to state and local government, at least things are getting done - from trying to balance budgets to getting potholes filled. That has not been the case in Washington, D.C., for several years now. When I first came to Washington, D.C, nearly three decades ago the partisan zealots on the left and right might duke it out on TV. But behind the scenes the pragmatists, bridge-builders, and party elders would find ways to get things done. Today folks on opposite sides of the partisan divide, or of any given issue, just aren't talking with each other - out of a combination of hostility, ignorance or, in many cases, fear of angering their own "base," and inviting a primary challenge.
The result last year was budget sequestration, another blow to our country's shrinking defense industrial base, followed by a federal government shut-down - the latest in a series of 11th hour crises and 'cliffs' that replaced the regular, rational, and constitutional process of making laws and passing budgets.
Due to the leadership of Senator Murray, the Congress was able to come together last December with the Bipartisan Budget Act, which mitigated temporarily the impact of sequestration. In that same spirit - of principled yet pragmatic compromise - we have to find a way to make progress in a number of areas; areas in which powerful and polarizing forces are pushing in the opposite direction. The reasons are varied - deepening income inequality, demographic and cultural shifts, growing distrust of established institutions of all kinds, global business especially.
There is probably no more illustrative - or distressing - example of this phenomenon than the fight over the U.S. Export Import Bank.
As I mentioned earlier, aerospace has the distinction of being one of the last U.S. manufacturing sectors that is competitive on a global level, with a $72 billion positive balance of trade. It's no surprise that Boeing represents a big part of that surplus, with $49 billion in foreign sales last year.
A significant part of this growth is attributable to carriers in developing markets. For example, just last week, Ethiopian Airlines announced another commitment to Boeing, this time for 20 of the 737 Max., the largest single Boeing order by an African carrier. While the financing arrangement will be determined closer to delivery, Ethiopian Airlines has used the Export-Import Bank to buy Boeing airplanes in the past.
We appreciated Senator Cantwell's support as this deal was brought to fruition. She continues to be a champion of American manufacturing and the Ex-Im Bank in the U.S. Senate illustrating, once again, the importance of enlightened and engaged political leadership. As I mentioned at the beginning, the business we have chosen is one in which government's role is inescapable and public-private partnerships are essential.
This partnership is so important because the international market for aviation is not a level playing field. Just about every other developed country - and now a few developing nations as well -supports its domestic aerospace industry through credit guarantees, low-interest loans, or other means to boost exports. Boeing's major global competitor for commercial airliners, Airbus, has been lavishly and unlawfully subsidized by its European patrons - to the tune of $18 billion according to the World Trade Organization.
Airbus wants to control most of the global commercial airliner market and they are willing to use every tactic to achieve that goal - even selling their planes at a loss. Next up is China, which has poured tens of billions of dollars - directly or indirectly - into its state-owned aerospace company to develop airliners that will be able to compete directly with Boeing and Airbus.
In this environment, the Export-Import Bank gives American manufacturing a fighting chance in the global arena. Ex-Im has long enjoyed broad bi-partisan support in the Congress, and presidents ranging from Ronald Reagan to Barack Obama have favored its continued operation. In 2012 the Bank was re-authorized - but it was a near-run thing. This year many of the same groups - mostly far-right political consultants, think tanks, and congressmen - banded together in a fit of ideological road rage to kill the Bank The temporary extension recently enacted in many respects leaves us worse off than before. The extension is to next summer, when in all likelihood the Congress will be more Tea-Party friendly, more polarized, than even now. And a short-term extension does not provide business certainty - both for U.S. exporters and their potential foreign customers.
I won't mince words about the consequences of a failure to re-authorize the Export Import Bank. Slowly but surely Boeing would lose more airliner contracts to Airbus and eventually other foreign companies that are able to include official export credit as part of their sales pitch. We would survive, but would build and sell fewer planes and employ fewer workers. The same would apply to aerospace products like satellites and other high-end equipment for mining, construction, and energy.
Spending too long in Washington, D.C., can make you a bit jaded and hard to surprise - but it is still amazing to me that the people going after Ex-Im are basically willing to dismantle the U.S. aerospace industry and ship the jobs to France or China - all in order to raise some extra money and show their most rabid supporters that it is possible to kill a government program - irrespective of the real-world consequences.
D.C. Aerospace Agenda
And it's not just Ex-Im. Without action by the Congress budget sequestration will return in October 2015 - roughly $100 billion in across-the-board cuts to the military, NASA, FAA, Homeland Security, FBI, and more. All of which will be felt, one way or another, by the companies and communities represented in this room.
Through sequestration Congress has tried to address what really is an entitlements problem - remember that Social Security, Medicare, and Medicaid make up roughly two-thirds of federal outlays and are growing - by gutting discretionary spending.
Yet our collective industry efforts must go beyond mitigating or reversing the negative - Ex-Im and sequestration - to advancing a positive agenda that will move this economy forward and expand the proverbial pie when it comes to jobs, wages and living standards - all of which could help address the underlying sources of discontent that have shaped the political dynamics of recent years. At the top of the list would be the Trans-Pacific Partnership, which by one estimate could add another $80 billion annually to the U.S. economy. Then there is corporate tax reform and shifting to an effective top rate similar to our major global competitors - again, not a windfall, as some will no doubt characterize it, but a partial remedy to the unworkable situation we have today.
So all of us who care about the national strategic asset that is American aerospace - the workers we hire, the communities we support, the defense and security we provide for this country - need to redouble our efforts and make it clear how high the stakes are. We also need to be clear that we will remember who stood with us during these next critical months. And we need our state and local partners with us every step of the way.
What's required is something rare these days but, I believe, still possible in our nation's capital: real, old-fashioned legislating in which each side holds their nose and gives a little - whether on the Ex-Im bank, domestic spending, defense spending, free trade agreements, or taxes. All this would lift the dead weight of dysfunction that's hanging over our military, our industry, and the American economy.
As you can see, we have a lot of work to get done.
Check back in 2015 for more information on this show.
Check back in 2016 for more information regarding the next show.
Transitioning to lead-free electronics in the Aerospace and Defense (A&D) industry demands careful analysis and research into the performance, costs and availability of these materials. The Aerospace Industries Association sponsored a Joint Government and Industry Executive Forum for Lead-Free Electronics to examine the issues underlying implementation of these materials. The participants concluded a clear roadmap with discrete milestones, funding to accomplish these efforts and dedicated government leadership are key to the A&D industry’s successful transition.
Why is this issue so important? The A&D industry designs and manufactures products that carry more than three billion passengers worldwide on any given day as well as systems which are vital to our national security. Our ability to maintain public safety and assure our warfighters’ mission success cannot be compromised or risked.
In response to the 2003 European Union Directive on the Restriction of Hazardous Substances, the commercial electronics industry transitioned to lead-free (Pb-free) electronics. Although the A&D industry leverages consumer and commercial technologies to provide affordable design solutions, many of the foundational commercial material standards are inadequate when applied to A&D products. Therefore a growing technology gap between the industries has appeared. Investment is needed to bridge this gap, so that A&D systems can preserve access to affordable commercial technology, while continuing to provide the requisite performance and reliability. Based on experience, the A&D industry believes a nationally coordinated approach is the most efficient way to bridge this gap.
Arlington, Va. — The Aerospace Industries Association congratulates Robert L. “Bob” Hoover on his selection as the recipient of the 2014 Wright Brothers Memorial Trophy. The Wright Trophy is annually awarded to a living American for “…significant public service of enduring value to aviation in the United States.”
“I’m delighted with the decision to honor Bob Hoover with this year’s Wright Brothers Trophy,” said AIA President and CEO and 2013 Wright Trophy recipient Marion C. Blakey. “His service both as a military pilot and war hero, as well as his lengthy career as the world’s greatest air show pilot, is a shining inspiration to us all. He richly deserves this award.”
Hoover served in the U.S. Army Air Force during World War II, flying 58 successful missions before being shot down and captured by Germany. He later escaped from Stalag Luft 1 and returned to Allied lines in a stolen Focke-Wulf FW190. He was awarded the Distinguished Flying Cross, the Soldier's Medal for Valor, the Air Medal with Clusters, the Purple Heart, and the French Croix de Guerre. His civilian career as an air show pilot lasted more than 50 years. He is believed to have performed in more air shows, in more types of aircraft, in more countries and before more spectators than any other pilot in the history of aviation.
“This trophy is truly one of the most important, prestigious and historic awards in aviation and aerospace,” Blakey said. “I was honored to serve on this year’s selection committee and heartily applaud the decision to recognize Bob.”
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on FAA’s decision to permit limited use of unmanned aircraft systems (UAS) to produce motion pictures
Arlington, Va. — By permitting the use of unmanned aircraft systems in film production, FAA has taken the first of several necessary steps towards the integration of UAS into civil airspace while encouraging continued research and development of UAS technologies. The decision acknowledges the long history of safe operations in both civil and military applications of remotely piloted aircraft. We hope this will pave the way for additional services and industries to utilize UAS technologies.
The focus of these petitions clearly was on safe UAS operations, aligned with FAA’s legitimate concerns for the safety of both manned and unmanned aircraft. The proposed actions to ensure safe operations are sound and very much consistent with the safety focus of the FAA. These approved operations will provide FAA with real-world case studies and data that can expedite successful UAS integration, leading to further job creation and revenue growth around the country.
This country is the birthplace of the motion picture, television and aviation industries, and the United States has a significant technological advantage in this new frontier of aviation. The aerospace and defense industry applauds FAA for taking this step and we look forward to further progress in integrating the next generation of aircraft into our nation's airspace.
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OIG Audit fails to recognize ADS-B’s role within NextGen system of systems when calculating return on investment
Statement by Aerospace Industries Association President and CEO Marion C. Blakey
Arlington, Va. — The Department of Transportation Inspector General’s report on issues surrounding the Automatic Dependent Surveillance-Broadcast (ADS-B) system fails to state the obvious, that the infrastructure necessary to implement ADS-B is on time, on budget and on the job. It is imperative that to improve our air transportation system and to enhance safety for future generations, the aviation industry, operators and government must all do their part to make NextGen a success.
NextGen and the critical step forward that ADS-B provides were designed as investments with both immediate and long term value. The system, though far from completed, is already delivering a more efficient and safe airspace environment in places like Alaska and the Gulf of Mexico. The long term return on investment will be seen for decades as America’s competitiveness and the safety of the flying public improve dramatically. This report fails to recognize the long term benefits and return on taxpayer investment that the initial results signal as being on track.
In addition, recent press reports have mischaracterized certain aspects of the OIG audit – particularly with respect to the number of ground stations. The idea that “coverage gaps” exist which could compromise safety and incur additional costs is totally inaccurate. In fact, FAA’s contract had a baseline requirement to provide defined coverage rather than a certain number of ground stations. The contractor has exceeded the coverage requirement while remaining well within the fixed-price contract. With the completion of that contract, new interest from stakeholders including states and the general aviation community, new requirements have arisen – thus increasing demand for ADS-B beyond the original contract.
I like comparing what we are accomplishing in the skies with the initial development of highways across America. We had to build the infrastructure before all of the progress and benefits of that highway system would ultimately be realized by the nation. But once we did, onramps connected local roads to superhighways, leading to further investments in infrastructure such as gas stations and restaurants, increased commerce and hiring, and other intangible benefits. It’s a similar situation with ADS-B and NextGen. ADS-B functions as one of the onramps to the superhighway of NextGen’s system of systems. When fully implemented, NextGen will reduce flight delays, invigorate the economy, maintain our global aviation leadership, generate jobs, save fuel, reduce CO2 emissions and, most importantly, improve system-wide safety for passengers and crew.
There is no turning back on improving the safety and efficiency of the nation’s aviation infrastructure. Its success is critical to millions of Americans and it must not be jeopardized prematurely by unfairly condemning one element of the system before that system is fully realized. The Inspector General's audit report title itself identifies the crux of the problem, that full ADS-B benefits are limited due to delays in user equipage. As more users equip with the necessary advanced avionics, the benefits of the system will become more apparent.
Below is aerospace and defense B-roll footage that is approved for accredited media use only. Non-acredited media use of this imagery is striclty forbidden.
Get insights on defense trade, a recap of the 2014 National Aerospace Week, human spaceflight progress and more in this issue.