Index AIA Expresses Sympathy for Terrorism Victims, Resolve for Nation’s Defense, and Support for U.S. Airline Industry Stakeholders Urge Program to Aid Airlines Commission Targets November Start The President's WASHINGTON PIPELINE: In War Against Terrorism We Stand United Congress Moving Quickly on Defense Authorizations General Atomics Is New AIA Member Association’s First Regional Meeting Held in Northeast; Format Could Be Extended Presidential Aerospace Commission: A Cross Section of Key Capabilities Government Review of Munitions List Is Making Headway Association Adds Two New Staffers AIA Suggests Joint Task Force on FAA Resource Issues Viewpoint: NASA Needs R&D Funding Industry Sales Estimate Lowered in Wake of Terrorist Attack First Half Shipments and Backlog Rise, Orders Drop

AIA Expresses Sympathy for Terrorism Victims, Resolve for Nation’s Defense, and Support for U.S. Airline Industry

On behalf of the members of the association, AIA President John W. Douglass issued the following statement in support of America’s airline industry in the aftermath of the terrorist attacks of September 11:

The 200 companies of the Aerospace Industries Association express our deepest sympathy to families of the victims of the terrorist attacks, including those from our member companies who lost their lives in this tragedy.

Our companies stand in solidarity with the president as he formulates a national security strategy to deal with America’s war on international terrorism. We fully support the actions taken by the president and Secretary of Transportation Norman Mineta. We urge our leaders in government to take every action possible to end global terrorism and return the skies of America safely to the American people.

We also stand in solidarity with our colleagues in the airline industry. We urge the government to support America’s airlines by immediately approving a combination of loan guarantees, tax suspensions, and cash infusions for the airlines and by assuming responsibility for security at the nation’s airports. We cannot ask America’s airlines to stand alone against state-sponsored terrorism in these hours of threat to our nation’s security.

In the war against international terrorism, only the federal government has complete access to the full range of information and resources needed to provide complete security for America’s air transport system. Federal authorities should immediately take full control of the air passenger screening process, elevate the visibility of law enforcement at our airports, and expand the sky marshal program.

Working as a team, Americans in government and in industry can and will defeat international terrorism.

Return to Index  
 

The group of aviation and aerospace organizations that began earlier this year building a stakeholder coalition on common issues has asked President Bush to support America’s aviation industry with loan guarantees, security management, and other federal actions.

The letter was sent to Bush, Chief of Staff Andrew Card, Transportation Secretary Norman Mineta, and FAA Administrator Jane Garvey.

"…the associations that represent the manufacturers, the airlines, other commercial and general aviation operators, the airport operators, the aviation maintenance providers, the unions, and professional societies stand in solidarity with you as your administration formulates a national security strategy to deal with America’s war on international terrorism," the letter stated.

"We fully support the actions you and Secretary of Transportation Norman Mineta have taken to end global terrorism and return the skies of America safely to the American people," it added.

The stakeholders urged the president "to support America’s aviation industry by immediately approving a combination of loan guarantees, tax suspensions, and cash infusions for the aviation industry and by assuming responsibility for security at the nation’s airports. We cannot ask America’s aviation industry to stand alone against state-sponsored terrorism in these hours of threat to our nation’s security.

"In the war against international terrorism only the federal government has complete access to the full range of information and resources needed to provide complete security for America’s air transport system," the joint communication pointed out.

Federal authorities should take full control of the airline passenger screening process, elevate the visibility of law enforcement at airports and expand the federal air marshal program, the stakeholders said.

Return to Index  
 

The Presidential Commission on the Future of the U.S. Aerospace Industry is planning to get underway with its first public meeting on Tuesday, November 27.

That will follow by several weeks the first organizational meeting of the commissioners and staff that was scheduled for early October. It was a closed-door session so that members and staff could begin to organize functions and get to know each other.

One of the 12 commissioners is AIA President and Chief Executive Officer John W. Douglass. President Bush last month announced six intended appointments, including Douglass, to the panel. Congressional leaders appointed the other six members.

The selection of a chairman hasn’t yet been announced.

Douglass said that he is looking forward to serving on the commission and thanked the president and Congress for having the foresight to establish the commission. He said that he is "honored to be part of such a strong team.

"The commission will chart the course for the aerospace industry in the 21st century," the association president added.

Return to Index  
 

Sixty-eight years ago, when the nation was held captive by a spiraling economic depression, Franklin Delano Roosevelt said in his first inaugural address that the only thing Americans had to fear was "fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."

Today, as the nation emerges from a period of mourning for the victims of the terrorist attacks, Americans are stricken with another nameless, unreasoning terror — the loss of our sense of national security and, once again, our economic security as well.

Roosevelt knew that the American people could never pull themselves out of the depression unless they pulled together, renewed their faith in one another and in the nation, and vanquished the fear that paralyzed all movement forward. As we prepare now to crush worldwide terrorism, we also begin the battle against unreasoning fear.

With the help of the federal government, the aerospace industry is committed to developing new technologies and procedures to assure the traveling public that it is indeed safe to fly. AIA has presented testimony to Congress in support of federal takeover of air passenger screening, expanding the sky marshal program, and elevating the visibility of law enforcement at our airports.

We have also asked the government to help stabilize the airline industry by enacting legislation for a combination of loan guarantees, tax suspensions, and cash infusions.

As public confidence rebuilds and air travel returns to former levels, all economic sectors of air transportation — the airlines and air cargo carriers, aircraft manufacturers, airport vendors, airline caterers, motels, car rentals, restaurants, and travel agencies will once again hum with activity.

In the war against international terrorism, the aerospace industry will support the president and the Defense Department in their efforts to do whatever is necessary to deter and defeat terrorist activity. Aerospace will play a major role in this fight, creating products that will support the men and women who protect freedom and stand guard over our homeland to prevent future attacks.

If we are to live in a world without fear, we must pull together, renew our faith in our nation and in each other, and begin to move forward. The great majority of the world’s citizens want to respect the liberty of others and live in peace, but those universal rights were threatened September 11 by acts of international aggression.

It is our determination to restore our nation’s sense of safety and well-being by supporting our country’s efforts to bring an end to international lawlessness and to work together for what Roosevelt called "the triumph of law and moral principles in order that peace, justice, and confidence may prevail in the world."

Return to Index  
 

Both House and Senate defense authorization committees reported out their respective bills in early September as the nation prepared to wage a long-term campaign against terrorism in the wake of the September 11 attacks on the United States.

Both bills contain a number of provisions of concern to AIA members.

The House bill includes the so-called Abercrombie amendment that would drastically curtail DoD outsourcing by requiring the burdensome A-76 process for virtually all future outsourcing decisions.

Also, House legislation again includes the Army ‘s contractor manpower reporting regulations that were withdrawn after strong AIA opposition earlier this year.

In addition, the House bill mandates a further reduction of 13,000 positions in the size of the defense acquisition workforce.

The Senate bill includes language that would streamline production contract awards in cases where cooperative agreements were used for prototyping projects. In direct opposition to the House, the Senate bill contains a provision that would place a moratorium on further reductions of the defense acquisition workforce.

Also, the Senate bill would make the DoD Mentor-Protégé test program permanent and place new paperwork requirements on DoD contracting officers attempting to bundle contracts.

Both the House and Senate bills will include language supported by AIA to allow the Presidential Commission on the Future of the U.S. Aerospace Industry a full year to carry out its work.

At press time, both the House and Senate were preparing for rapid floor consideration of their bills with limited amendments and debate.

Given the current international campaign against terrorism, AIA is working closely with the staffs of the House and Senate to modify or eliminate provisions that will encumber the ability of industry to support U.S. military operations around the globe.

Congress is expected to complete its legislative activity and adjourn by the end of October.

Return to Index  
 

One of AIA’s newest members is General Atomics (GA), one of the world’s leading resources for high-technology systems development and nuclear technology.

With deep roots in nuclear technologies, GA carries out the largest and most successful fusion program in private industry. The company has been the primary developer of modular helium-cooled nuclear power reactor systems, some of which have operated for more than 40 years.

GA and its affiliated companies also manufacture, operate, and service unmanned aircraft (UAVs) and provide information technologies, nuclear instrumentation, superconducting magnets, systems for hazardous material destruction, and many other products and services for government and industry. The firm has 1,600 employees.

The company’s main facilities are in San Diego. It also has operations in Denver, Los Alamos, N.M., and Washington, D.C., as well as Moscow, Tokyo, Adelaide, Australia, and Berlin and Dresden in Germany.

Return to Index  
 

The association last month conducted its first-of-a-kind regional meeting of member companies in the Northeast region of the United States. President John Douglass, who is committed to meeting with each member of AIA, said schedule pressures in Washington led to the two-day regional meeting format.

AIA shaped the first regional meeting to address global issues and company needs and continue a dialogue within the aerospace community.

Frank "Skip" Kundahl, president of Teleflex, Inc./TFX Sermatech Mal Tool & Engineering, hosted the historic session in Hartford, Conn.

The first day involved nine AIA member companies. On the second day, 11 Supplier Management Council members joined in the discussions.

Rep. John Larson (D-Conn.), a member of the House Armed Services and Science committees, spoke to the attendees.

Feedback from participants indicated that the meeting was effective, and AIA will plan additional regional meetings next year, Douglass noted. A report on the regional sessions will be made to the association’s Board of Governors in November, he added.

Return to Index  
 

President Bush and Congress have completed their selections to the Presidential Commission on the Future of the U.S. Aerospace Industry. The panel is targeted to begin its public sessions on November 27. Thumbnail biographies and photos of

the commissioners are featured on these two pages.

Buzz Aldrin is a former astronaut who walked in space on Gemini 12 and explored the moon on Apollo 11, the first lunar landing mission. He also is president of Starcraft Enterprises, his own firm.

Aldrin entered the U.S. Air Force after graduating third in his class from the U.S. Military Academy at West Point. He was an F-86 fighter pilot in Korea.

Before being selected as an astronaut by NASA, Aldrin earned a doctorate in astronautics from the Massachusetts Institute of Technology (MIT). His concept of space rendezvous formulated at MIT was widely used on NASA missions.

After returning to active Air Force duty, Aldrin commanded the Test Pilots School at Edwards Air Force Base.

Edward M. Bolen is president and chief executive officer of the General Aviation Manufacturers Association (GAMA). He earlier served the association as senior vice president and general counsel.

In addition, he is chairman of the Management Advisory Council, an industry panel to the FAA.

Before joining GAMA, Bolen was majority general counsel to the Senate Committee on Labor and Human Resources.

Bolen received a bachelor of arts degree in economics from the University of Kansas. He is a graduate of the Tulane University School of Law and earned a master of laws degree from the Georgetown University Law Center.

R. Thomas Buffenbarger is international president of the International Association of Machinists and Aerospace Workers (IAM).

He took on his first leadership post in the IAM at the age of 20 when he was elected shop steward of his apprenticeship class at General Electric’s jet engine plant in Evandale, Ohio.

After holding several increasingly responsible union positions in Ohio, Buffenbarger came to IAM headquarters in Washington where he moved up the organizational ladder until election to his present post in 1997.

He has chaired a blue ribbon commission of the IAM that convened 40 separate town hall meetings across North America.

Neil de Grasse Tyson is the Frederick P. Rose director of the Hayden Planetarium in New York City.

As an astronomer, Tyson’s professional research interests primarily address problems related to star formation models for dwarf galaxies, exploding stars, and the chemical evolution history of the Milky Way’s galactic bulge.

He obtains data from telescopes in California, New Mexico, Arizona, and the Andes Mountains in Chile and writes a monthly essay for Natural History magazine.

A native of New York City, Tyson earned a bachelor of arts degree in physics from Harvard and a doctorate in astrophysics from Columbia University.

John W. Douglass is president, chief executive officer, and general manager of the Aerospace Industries Association (AIA), which represents U.S. manufacturers of aerospace equipment.

Earlier, Douglass served as assistant secretary of the Navy for research, development, and acquisition. After retiring from the U.S. Air Force as a brigadier general in 1992, he was foreign policy and science and technology advisor to Sen. Sam Nunn.

Also, Douglass served as President Reagan’s representative on the Defense Management Commission chaired by David Packard.

Douglass earned an undergraduate degree from the University of Florida and advanced degrees from Texas Tech University and Fairleigh Dickinson University.

Tillie K. Fowler joined the Washington, D.C., office of Holland & Knight as a partner earlier this year after serving four terms in the U.S. House of Representatives from the 4th district of Florida.

As vice chairman of the Republican Conference, Fowler was the highest ranking woman in an elected leadership position when she retired.

She was first elected to Congress in 1992 and became a member of the House Armed Services Committee and the House Transportation Committee.

Fowler earned both her bachelor’s degree and law degree from Emory University.

John J. Hamre is president and chief executive officer of the Center for Strategic & International Studies (CSIS).

Before joining CSIS, Hamre was deputy secretary of defense and under secretary of defense (comptroller). As comptroller, he was responsible for the defense budget and management improvement programs.

Earlier, Hamre was a staff member of the Senate Armed Services Committee and deputy assistant director for national security and international affairs for the Congressional Budget Office.

He earned a doctorate from the School of Advanced International Studies at Johns Hopkins University and a bachelor’s degree from Augustana College in Sioux Falls, S.D.

F. Whitten Peters, a partner in the Williams & Connolly law firm in Washington, D.C., was recently the secretary of the U.S. Air Force.

He earlier was under secretary and acting secretary of the Air Force. Before that Peters was the principal deputy general counsel of the Defense Department where he worked on issues that ranged from countering domestic terrorism to acquisition reform.

As a litigation partner at Williams & Connolly, Peters specializes in complex civil and criminal litigation. He has written extensively on acquisition reform, legal ethics, and criminal law.

Peters, a graduate of the Harvard Law School, earned a master of science degree in economics from the London School of Economics.

William Schneider, Jr., is chairman of DoD’s Defense Science Board and president of International Planning Services, Inc., an international trade and finance advisory firm.

An economist and defense analyst, Schneider earlier served as under secretary of state for security assistance, science, and technology and as associate director for national security and international affairs at the Office of Management and Budget.

He is a consultant to the State, Defense, and Energy departments. Schneider earned a doctorate from New York University.

Robert J. Stevens is president and chief operating officer and a member of the Board of Directors of Lockheed Martin Corporation.

Stevens previously served as the corporation’s chief financial officer and held a number of senior executive positions in its Energy and Environment Sector and Air Traffic Management.

A native of Pennsylvania, Stevens earned a master’s degree in business from Columbia University, a master’s degree in engineering from the Polytechnic University of New York, and an undergraduate degree from Slippery Rock University.

Bob Walker is chairman and chief executive officer of The Wexler Group, a Washington, D.C., government affairs organization.

The former congressman from Pennsylvania had been chairman of the House Science Committee and a long-time member of the House Republican leadership.

A leader in advancing the U.S. space program, Walker was the first sitting House member awarded the Distinguished Service Medal by NASA.

Walker earned a bachelor’s degree in education from Millersville University and a master’s in political science from the University of Delaware.

Heidi Wood is a vice president and senior aerospace and defense analyst with Morgan

Stanley Dean Witter. She directs global equity coverage of aerospace, defense, and defense electronics companies in coordination with analyst teams in London and Singapore.

Wood has been ranked among leading analysts in the aerospace and defense securities sector by the Reuter’s 2000 survey and Greenwich Associates. Before joining Morgan Stanley, Wood was a junior analyst for aerospace/defense at SG Cowen, a financial consultant at Shearson Lehman Hutton and Wedbush Morgan.

She received a bachelor of arts degree from Brown University.

Return to Index  
 

Review of a quarter of the munitions list that determines what military goods and technologies are subject to export controls each year — one of the Defense Trade Security Initiatives (DTSI) undertaken by U.S. officials last year — is progressing.

The Defense Department (DoD) has completed its review of the first quarter of the list and forwarded its recommendations to the State Department, the agency responsible for the administration of export controls.

DoD also has started to review the next quarter of the munitions list and hopes to complete that work before the end of the year, well ahead of the planned schedule.

The State Department is reviewing the first set of DoD recommendations and hopes to make public soon agreed upon changes.

AIA believes that categories of items on the munitions list that are only modifications of commercially available products should be eliminated so that State and DoD employees can concentrate on controlling products and technologies that are uniquely military in nature.

Return to Index  
 

Two departments in AIA have added professional staff to further strengthen the association’s commitment to addressing a wide range of issues affecting the aerospace industry.

Annary Aytch has joined AIA as director of intellectual property and industrial security.

Aytch earned bachelor’s degrees in mathematics and English from Alabama A&M University and a juris doctorate from Duquesne University with specialization in intellectual property and international law. Aytch is completing studies for an MBA specializing in finance and electronic commerce.

She clerked for Pennsylvania Superior Court Judge Justin M. Johnson, was editor of the Duquesne Business Law Journal, and served as a SHARP Fellowship intern with NASA.

In addition, Aytch was co-president of Duquesne University’s Women’s Law Association and senior editor of the law school magazine, Juris.

Beth Van Emburgh has joined AIA’s Civil Aviation Department as Manager of Aircraft Noise and Emissions.

A graduate of Gettysburg College in Pennsylvania, Van Emburgh began her aviation career in 1997 with the Public Affairs Department of United Parcel Service in Washington.

She comes to AIA after three years in regulatory affairs at the American Association of Airport Executives (AAAE).

Van Emburgh worked on technology issues at AAAE and says she looks forward to being involved in the dynamics of aircraft noise and emissions issues. She will participate in Committee on Aviation Environmental Protection (CAEP) working groups, supporting AIA members on environmental standards.

Return to Index  
 

AIA has asked the Federal Aviation Administration (FAA) to form a joint agency/industry task force to address agency resource issues.

The association said it wants to ensure that the aerospace industry isn’t constrained in developing its business.

The comments were delivered at an FAA public meeting in late August to hear industry views on four proposals concerning the FAA’s Effective Resource Utilization Team effort.

FAA’s four proposals are:

• Eliminating certain "one only" supplemental type certificates for foreign-registered aircraft.

• Prioritizing all incoming type certification projects based on the completeness of the applicant’s up-front planning.

• Prohibiting U.S. manufacturers from using suppliers from non-bilateral agreement countries.

• Requiring organizations that employ three or more Designated Manufacturing Inspection Representatives to establish an Organizational Designated Airworthiness Representative.

The proposals reflect FAA’s assessment of current and projected agency certification resources in light of the continuing expansion of industry projects and industry’s use of foreign suppliers and reliance on international sales.

Others who offered comments at the hearing included AIA member companies Boeing and General Dynamics’ Gulfstream. The General Aviation Manufacturers Association also expressed its views.

In its comments at the hearing, AIA discussed the global nature of the industry and provided a context in which to assess the FAA proposals. The association plans to submit written comments by October 22.

Presentations by FAA and industry are posted on AIA’s Web site:

www.aia-aerospace.org.

Return to Index  
 

AIA is recommending adding $20 billion to the National Aeronautics and Space Administration (NASA) budget over the next five years to help remedy the agency’s funding decline in the last decade.

The drop in funds has occurred at a time of budget surpluses when other federal agencies have received increased monies. The decline also has been affected by inflation, cutting purchasing power of the agency even more.

As in many situations of declining budgets, what suffers most is funding for research and development. While some funding has been provided for development of new launch technologies, it hasn’t been enough to fully develop new vehicles.

For example, funding for NASA’s Space Launch Initiative over five years totals about 10 percent of what was spent to develop the Space Shuttle. Funding for aeronautics research, meanwhile, has been reduced to almost nothing.

At the same time, NASA infrastructure needed for both research and operations has fallen into disrepair. And many Space Shuttle upgrades needed for safety, reliability, and efficient operation have been put off indefinitely.

The additional funds would be added to the following accounts: $3.6 billion for infrastructure, $1.2 billion for aircraft technologies (noise and emissions, safety, and air traffic control), $137 million for rotorcraft technologies, and $4.6 billion for reusable launch vehicles.

In addition, $4.6 billion would be added to accounts for Earth, space, and biological sciences, and $4.6 billion would be added for human space flight. Other technologies would receive the remaining $273 million.

AIA considers added funds for NASA to be a small down payment on the future of U.S. space and aeronautics programs. If the nation is to maintain its technological and economic lead in aerospace in the face of increasingly government-supported foreign competition, such investment is sorely needed.

Aerospace manufacturing is the single largest positive contributor to the U.S. balance of trade and is responsible for a significant number of American jobs.

Return to Index  
 

AIA has lowered its estimate for aerospace industry sales based on revised delivery projections of its manufacturers in the wake of last week’s terrorist attacks.

Commercial aircraft and parts sales are expected to decline by approximately $2 billion from the previous estimate. Total industry sales will decline only by $400 million, to $143.3 billion from the $143.7 billion in sales in 2000.

Before the events of September 11, the Aerospace Industries Association had predicted industry sales of $145.3 billion, a $1.6 billion sales increase this year from 2000.

John Douglass, AIA president and CEO, said that industry sales could decline as much as $5.6 billion in 2002, and by $6.7 billion in 2003. Increased sales in space and defense markets could offset to some extent the decline in commercial sales, he said, depending on the way the administration responds to the crisis.

"An air campaign would have a different impact than a campaign involving the movement of large to moderate ground and naval forces," he said, adding, "Space sales will probably increase in any event." Douglass also said the final balance in sales will depend in large degree on how quickly the Defense Department adds funds to its procurement and spares budget. "A lot will depend on the immediate stress on the operations and maintenance budget," he said.

AIA will continue to refine its sales estimates as actions in the war against terrorism unfold.

Return to Index  
 

Earlier this year, aerospace industry shipments rose 2.7 percent in the first half to an annualized $155 billion. Similarly, the backlog of unfilled orders rose $2.9 billion to $233 billion.

Despite a drop from last year’s record, net new orders received during the first half totaled $161 billion on an annualized basis.

The Census Bureau, which collects and publishes this industry data, now provides greater detail in its monthly report (i.e., civil versus military and aircraft versus avionics). For more information, see Series 26 at www.aia-aerospace.org/stats/aero_stats/aero_stats.cfm.

Figures for the Guided Missiles, Space Vehicles, and Parts sector aren’t reported at this time, but AIA is working with the Census Bureau to remedy the situation.

Return to Index