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By Bill Lewandowski, AIA Vice President, Supplier Management In addition to our usual meeting agenda of examining supplier issues, Supplier Management Council meetings over the last two years have taken a "back to basics" approach by providing opportunities for SMC members to experience, first-hand, diverse sectors of the aerospace industry. For example, we covered commercial aviation at the Boeing 737 production line in Seattle; tackled space in a visit to the Kennedy Space Center to see the NASA Space Station facility, the Boeing and Lockheed Martin facilities, and launch pads; and addressed after-market by touring the Lockheed Martin-GE engine overhaul facility and the Boeing tanker and cargo aircraft repair, maintenance, and overhaul facilities. At the July meeting in Colorado Springs, SMC members visited the Air Force Academy where military leaders who use our equipment to protect national security begin their training. The October meeting in Atlanta will give our members yet another opportunity to further broaden their basic education in a visit to the Lockheed Martin facility in Marietta, Ga., where the F-22 Raptor aircraft and the C-130 cargo plane are assembled. July SMC Meeting Highlights Speakers at our July meeting included Clay Jones, chairman, president, and CEO of Rockwell Collins and AIA Board of Governors' vice chairman. He spoke about the future of the industry, emphasizing the catalysts that could bring about change and the value of business ethics as the backbone upon which the prosperity of the industry must be built. (See excerpts from his remarks elsewhere in this edition of The Suppliers' Voice.) Also, Col. Keith Birkholz, a seasoned U.S. Marine, spoke about the military effort in Iraq — both the good and the bad — from a soldier's view. Presentations about supplier issues, such as the impact of export control regulations on suppliers, export control compliance, the benefits of the Small Business Innovative Research Program, and the growing problem with counterfeit and sub-standard replacement parts, were also on the agenda Richard Aboulafia from the Teal Group of aviation and aerospace consultants wrapped up our meeting with an interesting forecast of aerospace and defense growth over the next 10 years. He projected continued growth in civil aircraft production through at least 2016. Boeing would hold its lead in worldwide aircraft manufacturing, he said, and there would be continued strength in worldwide military fighter aircraft and rotorcraft markets. Jones Gives Industry Views in Remarks to the SMC The aerospace industry "has become a catalyst for world trade, economic growth, international investment, tourism, and the unprecedented pace of globalization that we're seeing today." That's a view from Clay Jones, vice chairman of AIA's Board of Governors, who addressed the association's Supplier Management Council meeting in Colorado Springs, Colo., in late July. Jones is chairman, president, and chief executive officer of AIA member company Rockwell Collins. "You only have to go as far as AIA's Web site to appreciate the pace of growth (the industry) is experiencing," he added. "We saw the surging civil aircraft market boost the aerospace industry in 2006, with total sales increasing to $184 billion and a record level for the third year in a row. "Newspapers and aerospace trade journals are awash with headlines foretelling the continued growth of our industry and predictions for air traffic to double — or triple — by 2020," Jones pointed out. "We're seeing the airline industry reinvent itself through new business models and restructuring, making everything from airline operations to maintenance and repair more efficient." Aerospace is witnessing new technologies that are making aircraft lighter, more fuel efficient, quieter, and increasingly friendly to the environment, the industry executive said. In addition, Jones said he believes the government market will continue to see a strong military budget, though perhaps not growing at recent rates. The DoD long-range budget forecast projects an increase from $432 billion in fiscal 2007 to $536 billion in fiscal 2012, he said. "Despite the uncertainty of a 2008 presidential election," he cautioned, "we still live in a dangerous and unpredictable world. While there seems to be increasing pressure in Congress and from the American people to bring our troops home from Iraq, I don't believe we'll see a situation that would call for any significant reduction in the defense budget as long as the security of the American people remains a crucial concern." Almost everywhere within the aerospace and defense industry — from commercial markets to the military — things look relatively good, according to Jones. "But if you're like me," he pointed out, "you probably resist sitting back and relaxing during good times like these, and instead you might feel this is the appropriate time to at least consider events that could limit the growth of our industry. A bit of paranoia can be a good thing. And if you're trying to manage those potential risk factors, you might have even grouped your concerns and apprehension into three buckets. In the first bucket are those things our industry can't really influence, but we must be prepared to respond to. Second are those things we can hopefully influence, but it's going to take a lot of help to get us where we want to go. And in the third bucket is something over which we have absolute and total control. "Let me begin with those things our industry can't really influence," Jones said. "In this category are challenges like a world-wide recession or a pandemic or a major terrorist attack." The second bucket, Jones went on, contains "things we can hopefully influence, but it will to take a lot of help to get us where we want to go. In this category are challenges like modernizing the air traffic control system, U.S. competitiveness, and export controls. "Clearly, we haven't moved out very fast on the Next Generation Air Transportation System, and we need to continue to influence our government leaders and help where we can," he said. "Today, more people are flying, more airplanes are being built, and if there's one area where we have consensus across our industry, it's that the current system is not able to meet the capacity requirements of the future. The third bucket, he continued, is "something over which we have absolute and total control and is in fact a top AIA issue for 2007: Advance Ethical Business Practices Worldwide. "At the end of the day," Jones said, "business ethics has to be driven from the top, set by the top executive who lives the example. "Creating an ethical culture is not just monitoring compliance with laws and policies," he added, "but also perceptions that are created through actions. "And, ultimately, it's building trust," he said. (Find the full text of Jones' remarks here) 2007 Associate Member/SMC Events
SMC: 10 Years and Counting AIA's Supplier Management Council in 2007 is celebrating 10 years of leadership on behalf of America's aerospace suppliers. Formed with 20 pioneering members, a decade later the council is a mature body of strength and influence in the aerospace and defense industry, bolstered by a dynamic roster of 172 AIA associate members. Welcome to the newest associate members: Sanmina-SCI |
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