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 AIA UPDATE: September 2008, Volume 13, No. 2
Modernization Delays Will Affect New Administration's Budget Planning The next president will face significant policy choices in defense because military modernization has been chronically delayed, according to a recently released AIA report. In the decade of 2010-2019, the United States must change course or risk falling behind other global powers, the association cautions. "Defense Modernization: Today's Choices for Tomorrow's Readiness" provides specific recommendations and cost of failure consequences for nine weapon system sectors in addition to logistics and science and technology activities. It details the policy choices outlined in an earlier AIA paper on modernization. "Current events on the world stage between Russia and Georgia support the underlying premise in this report," AIA President and CEO Marion Blakey said. "We can't predict where future conflicts will arise, but our national security strategy should be based on full-spectrum dominance." In the Tactical Aircraft chapter, the report points out that the United States has not lost a single ground soldier to enemy air attack in more than 50 years. This security advantage, however, is at risk because more than 50 percent of U.S. Air Force, Navy and Marine Corps fighter aircraft will require replacement over the next 10-to-15 years. The report notes that failure to develop long-range strike platforms could render U.S. forces unable to influence events in some of the most dangerous areas of the world, threatening the status of the United States as a global power. "One of the first tasks of the new administration will be to develop a new forward-looking defense plan," said Blakey. "This report provides detailed analysis that will help the new defense team make a realistic assessment of the aerospace challenges facing our country's national security." AIA has developed a package of 10 election issues that it is providing to the candidates and their staff. The election package, the first defense modernization report, "U.S. Defense Modernization: Readiness Now and for the Future," and the latest report are all available online at www.aia-aerospace.org. AIA Source: jj.gertler@aia-aerospace.org AEROSPACE FOCUS: Defense Modernization  First Quarter 2008 Indicators Confirm Continuing Growth The U.S. aerospace industry has done well through the current economic downturn with year-over-year financial indicators affirming the steady pace of industry growth. During this year's first quarter, aerospace manufacturers generated sales of $57 billion, earnings of $5 billion and $68 billion in orders, all significantly higher than comparable 2007 levels. The weak U.S. dollar continues to make U.S. aerospace products attractive to overseas customers, and international airliners are snapping up production slots for large civil aircraft, adding to the record backlog. This was evident at the recent Farnborough International Airshow where aircraft manufacturers received record orders, illustrating the industry's resilience in the face of a volatile economic environment. First quarter aerospace sales and orders typically dip compared to characteristically stronger fourth quarters. This year was no exception as sales backed off seven percent from the previous quarter's record $61 billion, and orders were down 19 percent compared to the last quarter of 2007. Historical data indicates that aerospace business is likely to rebound off of a slow start, and accelerate later in the year. AIA Source: william.chadwick@aia-aerospace.org Viewpoint: National Security Space Systems Need Support By Marion C. Blakey, AIA President and CEO After years of U.S. battlefield successes in Afghanistan and Iraq, Americans are familiar with the equipment that allows our warfighters to prevail and keeps them safe. From mine-resistant, ambush-protected vehicles to Bell-Boeing's V-22 Osprey tiltrotor to General Atomics' Reaper unmanned aircraft, the advanced technological systems that aerospace companies design and produce are instantly recognizable by millions of Americans. But there's another facet to our military success, one every bit as important as well-known hardware but little recognized. It's our stable of National Security Space (NSS) assets that allows our men and women in uniform to defeat the enemy and stay secure. On the modern battlefield, virtually every aspect of military operations is dependent on space systems. Communications, command and control, surveillance, weapons guidance — the list of space-supported functions is not only long but also features just about every vital military function. These technologies help save American lives and provide our military with critical intelligence on our nation's most dangerous enemies. Some systems also have important civilian applications. For example, Global Positioning System technology is used by civilian pilots, mariners, farmers, railroads and millions of drivers with GPS units on their dashboards. Unfortunately, NSS assets need some serious attention. The hardware — namely, satellites — is aging and degrading at a time when our military is more and more reliant on it. Some systems, including GPS satellites, are nearing or exceeding their planned lifespan. This comes when foreign interests like Russia and the European Union are taking steps to modernize their satellite fleets. Also, in the coming decade, the Defense Department expects demand for satellite communications alone to jump dramatically — more than tenfold by 2015. This means we must increase our capabilities to ensure that national security needs aren't left behind. In addition, NSS systems are vulnerable to attack as China's anti-satellite test last year proved in dramatic fashion. Programs to replace the systems and introduce new capabilities have been delayed and could result in gaps in critical coverage. Obviously, this isn't acceptable when it comes to our critical national security space technologies. There are several important steps needed to address the issue:
WASHINGTON WATCH: AIA Trains Industry on Europe's REACH AIA's Environment, Safety and Health Committee recently conducted three training workshops on REACH, the European Union's Registration, Evaluation and Authorization initiative intended to regulate chemical use and products in EU markets. The workshops, which took place in Maryland, Minnesota and Arizona, were designed to help the aerospace industry prepare for REACH by
REACH training modules are posted on AIA's Web site at www.aia-aerospace.org under Issues/Environment, Safety and Health. AIA Source: elaine.guth@aia-aerospace.org WASHINGTON WATCH: Workforce Survey Reveals Challenges Ahead Aviation Week and Space Technology magazine's 2008 workforce survey supports industry's efforts to attract, train and retain workers. Survey data points to a workforce base facing challenges in the near future as more and more workers become eligible to retire — 13 percent, or 82,000, this year alone — and not enough experienced young workers ready to fill the ranks because 22 percent of the workforce is under the age of 35. Attracting workers in the 35-45 age group and retaining young professionals who are leaving at higher rates than the industry's overall average are among the most challenging issues, according to the survey. Despite continued efforts to improve representation, the survey also found no measurable increase in female and underrepresented minorities in the workforce — 26 percent and 27 percent, respectively. The survey's advisory committee includes AIA President and CEO Marion Blakey. It offered several recommendations to improve the industry's workforce, including driving down the attrition level among young professionals who leave aerospace for other fields and developing public messages that share the achievements and positive impact of the aerospace industry. Other potential actions include encouraging work/life balance in the workplace and reinforcing and promoting the fact that learning and professional development opportunities for aerospace and defense employees exceed other high-tech industries. AIA Source: daphne.dador@aia-aerospace.org WASHINGTON WATCH: Association Forms Counterfeit Parts IPT AIA has established an integrated project team (IPT) to develop measures to prevent counterfeit parts and material from entering the supply chain, jeopardizing the performance, reliability and safety of aerospace and defense products. Members of the Counterfeit Parts IPT include representatives from government agencies, original equipment manufacturers, industry associations and independent distributors. Because many aerospace and defense industry parts, subsystems and materials face extended use, they are subject to wear and obsolescence. As the age of a system grows, replacement parts become susceptible to counterfeiters because original equipment might no longer be available through franchised, authorized or approved suppliers, leading to risks for U.S. manufacturers and the government. The Counterfeit Parts IPT grew out of the need for a consistent set of standards and inspection requirements. The team believes that these requirements should flow throughout the supply chain to lessen the risk of counterfeit parts. IPT objectives include examining current acquisition and procurement policies to 1) determine if they prevent the introduction of counterfeit parts and materials into aerospace, space and defense products, 2) define steps that government and industry should take to ensure that the risk of introducing counterfeit parts and materials is minimized and 3) review enforcement policies intended to block the introduction of counterfeit products into the United States. AIA Source: matt.williams@aia-aerospace.org Aviation Needs a Global Approach to Climate Change to Meet Challenge of Carbon-neutral Aviation Growth and a Carbon-free Future The global environmental policy debate is focused on climate change, yet noise and local air quality could also constrain efforts to reduce aviation carbon dioxide emissions. In addition to airframe and engine technology, eliminating airport congestion and air traffic delay is crucial to reducing aviation emissions. Although climate change is the issue du jour, the Airports Council International points out that noise is the biggest obstacle to reducing congestion. Local air quality is second on the council's list. AIA is working to establish a global policy atmosphere that opens the door on a new pioneering age to meet the challenge of carbon-neutral aviation growth. The United Nation's International Civil Aviation Organization (ICAO) is the only truly global forum in which this can be achieved. The Kyoto Protocol expires in 2012 and the process for developing subsequent actions has been established. Under the Kyoto agreement, countries are directed to pursue limitation or reduction of emissions from international aviation through ICAO. The ICAO Assembly has developed guidance on emissions trading and voluntary measures. Its environmental resolutions encourage contracting states to limit emissions trading or voluntary measures to their domestic airlines until an ICAO framework is agreed to. At the direction of the September 2007 ICAO Assembly, the ICAO Council formed a sub-ministerial Group on International Aviation and Climate Change (GIACC) to develop an aggressive program of action identifying CO2 goals for international aviation and options for meeting them that reflect "the shared vision and strong will" of all contracting states. The GIACC action plan is slated for delivery next summer. A comprehensive work program has been established to meet this deadline, and the stage is now set for establishing a global policy that will meet the challenge of carbon-neutral aviation growth. The aviation industry is committed to aggressively addressing the challenge of climate change. Civil aviation manufacturers are developing new technologies that accelerate the rapid progress made since the early 1960s in drastically reducing the environmental footprint of aviation. The role of aviation in reducing total greenhouse gas emissions must be considered. While the industry has always expanded the frontiers of what is technically possible, aviation has only one energy source — hydrocarbon-based fuels. Today, the aviation industry is working to fulfill its commitment to carbon-neutral growth and is seeking ways to pioneer a carbon-free future. AIA Source: howard.aylesworth@aia-aerospace.org Sen. Kyl Stresses Importance of Space Systems and Missile Defense to U.S. National Security Sen. Jon Kyl (R-Ariz.), a long-time supporter of missile defense and space programs, discussed the value of a strong national defense and the important role of national security space systems at a recent meeting organized by aerospace industry missile defense advocates, including AIA. (See a related Viewpoint column on National Security Space by AIA President and CEO Marion Blakey here.) Other hosts of the July breakfast meeting with Kyl were the George Marshall Institute and the Space Transportation Association. Discussion ranged from congressional funding for space systems under the next administration to possible upcoming changes to International Traffic in Arms Regulations. In response to a question on space protection and situational awareness, Kyl pointed out that "space protection is part of the solution." Kyl serves as Republican whip in the Senate, making him the second ranking member of Senate GOP leadership. AIA, the George Marshall Institute and the Space Transportation Association formed the missile defense working group to bring together industry and the research community on the importance of missile defense programs. AIA Source: mailto:mike.conschafter@aia-aerospace.org State Department's Final Rule on Civil Aviation Exports Boosts Aerospace, Eliminates Confusion A recently released clarification of rules governing the export of civil aviation items will be a shot in the arm for the aerospace industry and American exports. The State Department issued the final rule to eliminate ongoing confusion over implementation of section 17(c) of the Export Administration Act. While the act gave the Commerce Department export control jurisdiction over civil aviation parts, it has been unclear which parts could still be labeled "military" and subject to more stringent rules. Congressional attention to the matter was led by Reps. Don Manzullo and Brad Sherman and the Congressional Export Control Working Group. "The administration and Congress have both demonstrated real leadership on this matter," AIA President and CEO Marion Blakey said. "Resolving this confusing issue will help cement one of our industry's great strengths, our $60 billion foreign trade surplus." Before the State Department's clarification, the line was blurred between commercial aviation items that were regulated as civil items by the Commerce Department and those that had military applications that are not allowed on civil aircraft. The latter are on the U.S. munitions list and are subject to stringent export regulation. The new rule makes it clear to companies what export licenses, if any, are required to sell items overseas and whether they can be used in civil aviation. The move is the latest step in a string of efforts by the administration to modernize the U.S. export control system. AIA has long advocated for that goal, leading the Coalition for Security and Competitiveness in pushing for improvements. The administration used coalition recommendations as a basis for a slate of modernization improvements earlier this year. AIA Source: remy.nathan@aia-aerospace.org AIA Reviewing Options for FAA Funding and Programs in Fiscal 09 Reauthorization Failure of Congress to approve FAA reauthorization this year means that current funding will be extended into fiscal 2009 at current levels — with no increases for the Next-Generation Air Transportation System and other pressing programs. An extension, for at least a year, of the reauthorization is expected in order to coincide with the arrival of the new administration and its policy agenda. A lengthy extension, however, would provide AIA members an opportunity to reconsider some FAA programs and funding in the current reauthorization proposal and consider new ones. AIA is reviewing the items and will work with the new administration and appropriate congressional committees to achieve AIA's goals in the next FAA reauthorization. AIA Source: susan.mertes@aia-aerospace.org Association Opposes License Fees to Fund State Department Export Control System The State Department's Directorate of Defense Trade Controls (DDTC) has issued a proposed rule that would increase company registration fees to fund long-needed infrastructure improvements and export licensing operations. The rule was issued in response to a provision in National Security Presidential Directive 56 that has led the State Department to propose collecting $22 million annually through a per license charge on the 5,200 U.S. companies registered with the DDTC in an attempt by the directorate to become 75 percent self-financed. Currently, the majority of DDTC funding comes through the normal State Department budgeting process. Some funding comes from a per company annual registration fee of $1,750. AIA will oppose the proposal for several reasons:
AIA has submitted comments in response to the Federal Register notice announcing the rule. The Association also continues to voice its concerns in meetings with the State and Defense departments and congressional leadership. AIA Source: remy.nathan@aia-aerospace.org |