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Tuesday, June 1, 2010

Editor's Note: Financial Stewards

Emily Feliz

In front of a standing-room-only crowd at the Dirksen Senate office building in early May, Sen. Christopher “Kit” Bond (R-Missouri) modified an oft-used soundbite heard around Washington, D.C. the U.S. aerospace industry is too important to fail.

No one is predicting the meltdown of the $214 billion U.S. aerospace industry, ala the U.S. automobile industry, any time soon. However, Bond and his fellow senator, Democrat Patty Murray of Washington state, see troubling signs ahead for the industry, notably a drop in the highly skilled engineering workforce and the lack of investment in new technologies. To combat this, the legislators officially launched a senatorial aerospace caucus, billing it as a group to formulate and promote a long-term and comprehensive national strategy for the aerospace industry. The focus is on the out years, beyond current budget cycles.

Comprehensive is putting it mildly, based on remarks made during the launch event, held May 6 on Capitol Hill. Murray, who serves on the Transportation and Defense subcommittees of the Senate Appropriations Committee, outlined the group’s priorities, ranging from engineering education initiatives in high schools and universities, to reforming the defense acquisition process, to increasing U.S. aerospace exports, to greater investment in FAA’s Next Generation Air Transportation System (NextGen).

“We will do everything we can to fulfill our mission of ensuring a strong, secure and competitive aerospace sector. And we will do it because it is of the utmost importance to the future of our workers, our national defense and our economy,” Murray told a gathering of more than 200 congressional staffers, aerospace industry representatives, journalists and military personnel at the caucus launch event.

How the caucus plans to move forward with this ambitious and diverse agenda is unclear at this point. Certainly no dollar figures were given for the potential cost of such a sweeping initiative. But with the aerospace industry impacting nearly every congressional district in every state, and with 24 senators signed-on to participate at this writing, the caucus has a solid foundation on which to build. The aim, Murray and Bond said, is to enlist 50 senators, or fully half of the Senate.

Immediately following these declarations of the need for higher investment in this program — and more money for that program — came a message of fiscal responsibility by Secretary of the Air Force Michael Donley.

“Affordability is a key criteria in an acquisition now more than ever,” Donley said. “This is a zero-sum environment, which is to say that in some respects the biggest threat to the defense budget is internal growth in the defense budget. We’re working very hard to cut and control costs and we’re looking for our long-term partners to help us to do the same.” The Air Force, he added, wishes to remain a “steward of the taxpayer’s resources.”

In that spirit, Donley said the Air Force will focus on getting the most bang for its buck on major programs such as the F-35 Lightning II, which by itself accounts for 15 percent of the service’s investment over the next five years. Likewise for the drawn-out KC-X tanker replacement program, a hot-button topic for Sen. Murray’s home state, and upgrading F-22 Raptors to a common configuration.

Donley also backed the industry’s platform of easing export controls that limit aerospace manufacturers, specifically with respect to commercial off-the-shelf (COTS) technologies, and ratifying bi-lateral agreements with close U.S. allies, namely the United Kingdom and Australia.

The fiscal responsibility theme was reinforced by Defense Secretary Robert Gates at the Navy League Sea-Air-Space Exposition held in National Harbor, Md., outside of Washington in May. “Defense budget expectations over time, not to mention any country’s strategic strength, are intrinsically linked to the overall financial and fiscal health of the nation,” he said.

“At the end of the day, we have to ask whether the nation can really afford a Navy that relies on $3-to-6 billion destroyers, $7 billion submarines and $11 billion carriers,” he added.

The U.S. aerospace industry is indeed too important to fail. But it appears destined for a little belt-tightening.

Emily Feliz is the managing editor of Avionics Magazine. You can reach her at efeliz@accessintel.com or 301-354-1820.

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