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By Peter Rettaliata  Peter Rettaliata, president of Air Industries Machining Corporation of Bay Shores, N.Y., is the associate member representative to the AIA Board of Governors and Executive Committee for 2006. He is also a member of the Supplier Management Council Executive Committee.The aerospace and defense industry is an all-too-rare bright spot in today’s economy, adding jobs and increasing revenue where other sectors see losses. But there are artificial barriers holding back international trade, a major booster to this important economic engine. The federal government has a regime of export control regulations aimed at ensuring that advanced weapons technology does not fall into the wrong international hands. But this laudable concept has gone awry, holding up sales of innocuous items like valves, hydraulic tubes, electric motors, and even things like steering wheels and dome lights. Ultimately, it is companies like Air Industries Machining Corp. that pay the price with lost business opportunities, unrealized revenue, and hampered growth. U.S. companies have long had business relationships with America’s closest friends and allies around the world. These links are good economically — the aerospace industry had a foreign trade surplus of $37 billion in 2005 — and strategically because we almost always go to war alongside our international allies. The government regulates these transactions with the U.S. Munitions List, which identifies weapons systems that should not go to unfriendly governments. To sell list items to allies, a company must receive a license from the State Department. The list has strayed from its original purpose, and today companies find themselves having to obtain licenses for commercial products readily available internationally. For example, my company makes components used on military aircraft that are on the munitions list. But the same or similar parts are used in commercial aircraft and are not considered classified or sensitive on their own, and they are widely available from other sources all over the world. The result is that foreign governments end up buying items from other suppliers in foreign countries, robbing U.S. companies of business. Time is the root of the problem. Most invitations to bid for contracts that involve foreign sales demand a response in either 30 or 60 days and, in most cases, small companies can’t get an export license in that time frame. So Air Industries and other small aerospace companies cannot even consider bidding for some potentially lucrative contracts because of export control red tape. In addition, if a company somehow gets the contract, it would have to secure another license to actually export the finished product. Aerospace and defense is an industry that is extremely global — many suppliers sell to U.S.-based Boeing and Europe-based Airbus. The current export control regime hampers the ability of many smaller American companies to benefit from this global market. The ultimate solution is that Congress must require that the State Department revamp and modernize the export control system to eliminate red tape for American companies. But we can make some progress even before we see that type of a legislative act. There is a window of opportunity during the remainder of the current administration to make the system more efficient by working directly with the State and Commerce departments through industry groups like AIA. A thorough review will reveal many items that don’t belong on the list at all. Export control system reform must also include a requirement that the munitions list undergo regular review and updating to make sure it doesn’t capture items that are commercial in nature and widely available. If we can make this a reality, the aerospace and defense industry will continue to thrive and be that beacon our economy needs. Exhibit with AIA at Farnborough As AIA gears up for the Farnborough International Airshow, the association is planning to provide co-located exhibit space for associate and regular member companies. By exhibiting with AIA, your company will benefit from networking, appointment assistance, and a synergy that won’t be found anywhere else. AIA’s booth will be located in Hall 3, a location with high traffic and exposure.
AIA members interested in exhibiting at Farnborough should contact Trish Ward at: 703-358-1061 or trish.ward@aia-aerospace.org. Hrenak Leads SMC in 2006 Vince Hrenak, Raytheon’s supply chain vice president, is continuing as chairman of AIA’s Supplier Management Council in 2006. Dennis Bent, BAE SYSTEMS vice president of operations and E & IS strategic sourcing, is serving as vice chairman. Hrenak agreed to remain chairman beyond his first term to ensure stability as AIA settles into a restructuring that created a new National Security Division and other initiatives. 2005 Amelia Earhart Award 
Vickie Wessel, president of Spirit Electronics of Scottsdale, Ariz., accepts the association’s 2005 Amelia Earhart Award from AIA President and Chief Executive Officer John W. Douglass. The award recognizes women who achieve excellence in the aerospace and defense industry. She represented suppliers on the association’s Board of Governors for the past two years and has worked as an advocate to Congress and the administration for small, disadvantaged businesses and women-owned small businesses. A recent Census Bureau report identified 6.5 million firms with female owners, an increase of 20 percent from 1997.
SMC Welcomes Newest Associate Members As of Feb. 1, 2006, AIA has 107 regular member and 166 associate member companies. New on AIA’s associate member roster are TW Metals, New Breed Corporation, Airfasco Industries, Satyam Computer Services Ltd, Airtechnics, Inc., and OTT Brothers Machine Co., Inc. 2006 Associate Member/SMC Events
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