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Next Quarter: New Look
Executive Report
2016 TARC Competitors
at Rockets on the Hill
Inside this Issue
ExecutiveReport
A Quarterly Digest from the Aerospace Industries Association 2nd Quarter 2016
Q&A with CAE’s Andy Jazwick
Technology Innovation Focus
Farnborough Air Show Preview
Message
President’s
2016 OFFICERS
Marillyn Hewson, Chairman
Dennis A. Muilenburg, Vice Chairman
David F. Melcher, President & Chief Executive Officer
Ginette C. Colot, Secretary & Treasurer
AIA’s Agenda for America
2016 EXECUTIVE COMMITTEE The upcoming November 8th election promises to be one of the most consequential
William M. Brown
Chairman, President & Chief Executive Officer in American history. True to our organizational structure and tradition, AIA doesn’t take
Harris Corporation positions on individual candidates or parties. But we do seek to inform the candidates for
Wes Bush
Chairman, Chief Executive Officer & President elective office about the key issues that will determine our nation’s future course.
Northrop Grumman Corporation Unfortunately, up this this point the level of this year’s hyperbole-dominated policy
Gerard J. DeMuro
President & Chief Executive Officer discourse lacks the substance citizens deserve. And to the extent the candidates for
BAE Systems, Inc. President and Congress have addressed questions of concern to the aerospace and
Scott C. Donnelly defense community and the broader citizenry, a more thorough and elevated discussion
Chairman & Chief Executive Officer
Textron Inc. would be most welcome.
David P. Hess Yes, we’ve heard support for a strong military, but have the candidates really alerted the
Executive Vice President & Chief Customer Officer, Aerospace
United Technologies Corporation public to the fact that defense spending has gone down from an average of 4.4 percent
Marillyn Hewson of U.S. Gross Domestic Product from 1980-2014, to 3.2 percent of GDP last year and is
Chief Executive Officer, President & Chairman of the Board
Lockheed Martin Corporation projected to fall to 2.6 percent of GDP in 2020 despite the growing international threat
David L. Joyce environment? And what have we heard about the specific investments in procurement
President & Chief Executive Officer
GE Aviation and Research and Development that are needed to maintain our technological superiority
Thomas A. Kennedy or about the defense acquisition reforms that are required to enable industry to more
Chairman and Chief Executive Officer
Raytheon Company rapidly produce new systems for our warfighters?
Roger Krone True, the candidates have discussed educational achievement and jobs creation. Yet
Chief Executive Officer
Leidos Corporation we’ve seen a lack of urgency about American students’ trailing performance in STEM
Tim O. Mahoney fields—the U.S. ranks at the bottom third of all countries for graduating students with
President & Chief Executive Officer
Honeywell Aerospace science degrees—and about our industry’s looming skills gap due to the graying of
Dennis A. Muilenburg the workforce, with 18 percent of all U.S. aerospace engineers and 24 percent of all
Chairman, President & Chief Executive Officer
The Boeing Company aerospace manufacturing employees eligible for retirement.
Phebe Novakovic And if any of you hear a candidate mention the need to support civil aviation
Chairman & Chief Executive Officer
General Dynamics Corporation infrastructure modernization and maintain U.S. leadership in space, please tell me. I’d be
Kelly Ortberg pleasantly surprised.
Chief Executive Officer & President
Rockwell Collins As the voice of the American aerospace and defense community, AIA would be remiss
Mike Petters if we didn’t propose in detail what needs to be done to make our country stronger, safer
President & Chief Executive Officer
Huntington Ingalls Industries and more technologically robust. With the help of our policy councils, we’ve developed
Anne D. Shybunko-Moore white papers for presidential and congressional candidates on the following subjects:
President
GSE Dynamics, Inc. Defense; Security Cooperation; U.S. Leadership in Space; the National Aerospace System
Robert D. Strain & Next Gen; and the Aerospace Workforce and STEM.
President The white papers have the overarching recommendation that our leaders must commit
Ball Aerospace & Technologies Corp.
Michael T. Strianese to predictable budgets, fund robust investments in the technologies that make America
Chairman, President & Chief Executive Officer stronger, promote innovative partnerships, and repeal the damaging Budget Control
L-3 Communications
Cover: AIA’s Bob Durbin and David Melcher (far left front) with Team America Rocketry Challenge competitors
showcasing their handiwork in the Rotunda of the Russell Senate Office Building. Photo Credit: Dan Stohr/AIA.
DEPARTMENT OF DEFENSE DISCRETIONARY
BUDGET AUTHORITY AS A FUNCTION OF GDP
Fiscal Years 2001-2021
(In Billions of Dollars)
Credit: AIA (defense chart), NASA (SLS/Orion).
AIA’s White Papers call for a goal of spending four percent of U.S. GDP on defense and
for fully funding NASA’s Space Launch System and Orion Multipurpose Crew Vehicle.
“The white papers have the overarching recommendation that our leaders must commit
to predictable budgets, fund robust investments in the technologies that make America
stronger, promote innovative partnerships, and repeal the damaging Budget Control Act
of 2011, along with working toward meaningful tax and entitlement reforms that will
allow for adequate investments in long term national needs.”
Act of 2011, along with working toward meaningful tax and Unmanned Aircraft Systems and commercial spacecraft into
entitlement reforms that will allow for adequate investments our National Airspace.
in long term national needs. The white papers can be found • For STEM and workforce, we need legislation and regulatory
on our web site at: http://www.aia-aerospace.org/blog/view_ actions to create and expand access to STEM careers and
our_campaign_position_papers. the promotion of education and immigration policies that
Some specifics include: help build and retain a strong STEM-skilled work force.
• For defense, the next President must set a goal for spending Our white papers have already drawn the attention of the
of four percent of U.S. GDP or risk having forces that are presumptive presidential nominees of the Republican and
under-equipped, lacking vital technology, and stretched Democratic Party. They led directly to a meeting with Donald
dangerously thin. We also need a better balance between Trump in New York City on June 9th. I represented the aerospace
current readiness and investments in the future force and to and defense industry at this meeting alongside senior executives
advance significant acquisition policy reforms that encourage from a number of aerospace and defense companies. We have
innovation to support the warfighter. also reached out to Secretary Hillary Clinton’s campaign and
• On security cooperation, we need a National Security received a positive response about the opportunity to brief her.
Cooperation Strategy that – among other priorities – aligns Please take the time to read through these position papers.
U.S. industry programs and technology development with We need your help to drive continued interest in these issues
strategic security cooperation priorities and streamlines the in the presidential and congressional campaigns. The only way
technology review and approval process for priority security to demonstrate widespread support for these positions is for
cooperation transactions. our industry’s leaders, managers and workers make the effort
• In space, we must restore American access to space by fully to contact candidates for office. I urge you to do so. Talk to
funding the Space Launch System and Orion Multipurpose them about what matters most to our industry and the future
Crew Vehicle and NASA’s Commercial Crew and Cargo of our country. We’re counting on you to take our message to
programs, while developing new missions to expand the the candidates at this time when our voices need to be heard.
frontiers of science.
• With regard to civil aviation, we should give FAA long-term
capital planning and budgetary flexibility to effectively
implement complex infrastructure programs like NextGen, David F. Melcher
and accelerate reasonable rules to safely integrate President & Chief Executive Officer
EXECUTIVE REPORT 3
Q&A with Andy Jazwick
Vice President, Strategic Development
& Washington, DC Operations
CAE
AIA: How important is it for a company like yours, which is headquartered in Canada
but has a major American subsidiary company, to be involved with AIA?
Jazwick: Even with our Canadian affiliation, we view the U.S. as a critical market for
our simulation products and training services. In fact, 58 percent of the
global defense training market comes out of the U.S. As it relates to AIA, the
Credit: CAE
association is renowned for its services, advocacy and support for association
members, not just here in Washington, but globally. It’s important for us as a
company to be able to access key decision makers, whether it’s on Capitol Hill
or in the government agencies, and we’ve been very pleased to have joined AIA earlier this year for this purpose.
AIA: What policy issues that AIA addresses are most important to your company?
Jazwick: We, like many companies, are concerned about budget issues. As a business we do our best to plan and reduce
risk, so it would be nice to have regular budgets submitted and passed through the Congress in a timely fashion.
This also enables the Defense Department to better plan requirements and acquisition priorities. Our military’s
ultimate objective is readiness to perform whatever mission they may be asked to do. Simulation-based training
offers a very compelling value proposition for cost-effectively maintaining readiness, so as budgets become
tighter we are continually looking for ways to communicate that simulation is part of the solution to lowering costs
without sacrificing readiness or capability. We want to make sure that readiness and training continues to receive
the necessary funding in future budgets, and organizations like AIA help do that.
AIA: Does AIA’s work on expanding opportunities for companies to sell abroad help you out?
Jazwick: With respect to international marketing, we’ve had great meetings and interactions that have been hosted
by AIA with our U.S. government officials overseeing cooperative security activities. As a truly global company
with operations and training centers in 35 countries, we bring value to AIA’s work on expanding international
opportunities while also leveraging AIA contacts and relationships where we might need assistance.
Also, AIA has been front and center at all the key international airshows like Paris, Farnborough, Singapore and
Dubai. What your team does to facilitate interactions, exchanges, and activities not only with foreign government
officials, but also with the U.S. delegations that attend those events, and importantly, our industry “competimates,”
is most useful. AIA serves as a sort of Embassy when you go to these foreign venues. It’s very beneficial having
the AIA team there to support you in a variety of ways as our “industry ambassadors”. I’ve been with CAE for just
a little over a year, and it was great to be at the Dubai Air Show last year and see friendly faces such as Bridge
Littleton (Vice President for Membership) and the other members of the AIA team.
I also want to emphasize the importance of AIA in helping companies like ours navigate the waters of
Washington. We’re a medium sized training business and we’re just now opening up a Washington office. I’ve been
in Washington over 30 years and I know how critical it is to have access to individual subject matter experts. On
Foreign Military Sales it has been great to have Remy Nathan (Vice President, International Affairs) helping us
work with the State and Commerce Departments and the hard-working people at the Defense Security Cooperation
4 AEROSPACE INDUSTRIES ASSOCIATION
“We want to make sure that readiness and
training continues to receive the necessary
funding in future budgets, and organizations
like AIA help do that.”
Agency and the Pentagon. Having that network of subject
matter experts enables me to make a phone call and
say I need help on something and then get the support
Credit: CAE
needed on finding answers and solutions. That, frankly,
doesn’t exist in anything else in the aerospace and
U.S. Air Force MQ-1 Predator and MQ-9 Reaper aircrews receive
defense business that I’ve seen before. classroom, simulator and live-flying training.
AIA: How much does innovation feed into what your company does?
Jazwick: In the training and simulation business, you can imagine innovation, R&D and technology are all foundational
elements to our business. Particularly as live training becomes more and more costly, governments are looking to
cost effective solutions to make sure their fighting force is at its most ready state possible. From a training and
simulation perspective, virtual training is becoming a larger component of readiness issues. There will always be
live training, but the virtual component becomes more and more important. When a government buys the F-35
aircraft, those aircraft are really for operational purposes. You want to minimize the amount of flying that is done
on an incredibly expensive aircraft for training purposes. So the virtual training capability, not just for the F-35,
but other platforms in the land, naval and air domains becomes more and more critical. From an innovation and
technology perspective, we’re always looking at ways in which you can create a more realistic and immersive
virtual environment for training. You want the synthetic environment to look and feel as much like the real world
as you can. In the military market, the networking and interoperability of training systems is required to perform
realistic mission training, so as a company we are focusing a significant amount of R&D into making integrated
live-virtual-constructive training a reality.
Credit: CAE
Credit: CAE
Simulator training for C-130J Hercules aircraft. U.S. Navy’s P-8A flight simulators.
EXECUTIVE REPORT 5
AIA’s Remy Nathan Testifies on
Need to Improve FMS Process
R emy Nathan, AIA’s Vice President for International Affairs,
in May 11th testimony before the House Armed Services
Credit: CSPAN
Subcommittee on Oversight and Investigations, urged Congress
to improve the way the U.S. government manages the Foreign
Military Sales (FMS) process. our partners’ preferences for Firm Fixed Price contracts as
“Industry is not calling for reforms that are simply going opposed to Fixed Price Incentive Fee contracts that require a
to change ‘No’ to ‘Yes’ answers during reviews of potential commitment of up to 10 percent in additional “excess funds.”
defense exports,” said Nathan. “If the answer is ‘no’, we’re ok Second, contracting officers should definitize FMS contracts
“Let’s also have a sense of urgency for the yes calls so a potential partner turns
to the U.S. first, and not to countries like Russia and China, which increasingly
use defense exports to advance their strategic geopolitical objectives.”
with that. However, let it be a quick and early ‘no’ with industry- within 180 days of a qualifying proposal submission in order
government consultation to develop alternative proposals to to eliminate lengthy delays that “place an unnecessary and
meet our partners’ needs and advance U.S. national security burdensome level of risk on the U.S. foreign contractor and
objectives.” Nathan added, “Let’s also have a sense of urgency foreign customer.” And third, the Defense Department should
for the yes calls so a potential partner turns to the U.S. first, continue efforts to make determinations about whether a
and not to countries like Russia and China, which increasingly technology is releasable to a foreign partner “more predictable,
use defense exports to advance their strategic geopolitical efficient, and transparent.”
objectives. If we do this, industry will be better positioned During the hearing, subcommittee chairwoman Rep. Vicky
to make timely and correct investments and business Hartzler (R-Mo.) said, “It is vital to provide the opportunity for
development decisions to best support our warfighters and our allies to acquire military equipment and services to bolster
our allies and partners.” their security needs. It’s also important to note the benefits
Nathan called for three specific reforms and improvements the United States realizes from our allies’ collective safety,
to the FMS system: First, the government should honor especially as threats to democracy and freedom expand.”
Study Shows Robust Impact of A&D Industry
A IA in partnership with business information group IHS Inc., has released a study that quantifies the economic contribution
the aerospace and defense industry makes to the U.S. economy and provides an enhanced understanding of the industry’s
extensive supply chain, by economic sector at the national and state level.
The study, which is part of AIA’s effort to expand its data and analytical offerings, found that despite a complex mix of economic
headwinds, the U.S. A&D industry in 2015:
• Supported 1.7 million workers in the industrial base, or 13 percent of the nation’s manufacturing base, with about
531,000 jobs in the industry’s commercial aerospace segment (e.g. civil and general aviation aircraft, helicopters
and space systems) and 511,000 jobs in the defense and national security segment of the industry (e.g. military
aircraft, ground and sea systems, armaments and space systems).
• Produced an average labor income approximately 44 percent above the national average – $93,000 average labor
income per job – reflecting the highly skilled nature of the workforce.
• Generated $307 billion in economic value, representing 1.8 percent of total nominal Gross Domestic Product in
the U.S., and 10 percent of total U.S. manufacturing output.
• Generated $605 billion in sales revenue in 2015 – a one percent increase since 2013.
6 AEROSPACE INDUSTRIES ASSOCIATION
TECHNOLOGY INNOVATION FOCUS
Commercial Network Tracks Submarine Launched UAS’s
Space Debris Threats New to U.S. Arsenal
E fforts to track satellite orbits and potentially harmful
debris in space are being aided by the commercial
space industry. AIA member Analytical Graphics, Inc. (AGI)
established two years ago a Commercial Space Operations
Center, which was subsequently incorporated as its
affiliate ComSpOC Corp. ComSpOC fuses satellite-tracking
measurements from a geographically diverse set of optical,
passive RF, radars and other sensors to generate Space
Situational Awareness (SSA) data products.
ComSpOC customers include multiple commercial and
US government entities, including the U.S. Air Force, which is
receiving orbital data to complement their space surveillance
data sets, and The Boeing Company, which used the data
services to support early operations of the ABS-3A and
Credit: AeroVironment
Eutelsat 115 West B communications satellites.
ComSpOC has a growing ground based sensor network of
more than 70 optical sensors, long and short baseline RF
interferometric sensor networks on three continents, and two The Blackwing tube-launched UAS.
phased array radars. Aided by a 46-meter radio astronomy
antenna in Canada, ComSpOC will be able to track geostationary
resident space objects down to 10 centimeters in size. AGI T he U.S. Navy is deploying small Unmanned Aircraft Systems
(UAS) from submarines and undersea robotic vehicles.
After a decade of experimentation, the Navy has selected the
is confident ComSpOC will grow to track the same number of
objects in space as can be found in the public space catalog “Blackwing” miniature tube-launched UAS, manufactured by
by the end of this year. AeroVironment, for use as “eyes and ears” for the Navy surface
“The burgeoning space environment requires commercial fleet over highly defended waters and coastal areas as part of
services to develop informed and responsible behavior for its “anti-access area denial” strategy. The Navy has requested
all space actors,” said Paul Graziani, AGI chief executive funds in its fiscal year 2017 budget to buy 150 Blackwings,
officer. “The services ComSpOC provides are foundational to which have the advanced electronics typically found in much
the resurgence of commercial activity in space, and fill an larger UASs: electro-optical and infrared sensors, selected
important role in the overall fabric of SSA.” availability anti-spoofing module GPS and a secure digital
data link.
“In addition to operating from undersea vehicles, Blackwing
can also be integrated with and deployed from a wide
variety of surface vessels and mobile ground vehicles to
provide rapid response reconnaissance capabilities,” said Kirk
Flittle, AeroVironment vice president and general manager of
Credit: Analytical Graphics Inc.
unmanned aircraft systems.
The Blackwing UAS builds upon AeroVironment’s 30 years
of experience adapting small UAS such as the Raven, Wasp,
Puma and Switchblade for use by U.S. infantry units in finding
ComSpOC-determined orbits of active GEO satellites over the Americas. and striking targets.
EXECUTIVE REPORT 7
Executive Report Changes Coming
A “new” Executive Report is coming this fall. With a
completely revised and expanded layout, the Executive
Report will help our ability to get AIA’s message out to the
first time to help our members and other interested parties
reach other A&D companies and decision makers here in
Washington D.C. with their direct messages. And to expand
broader aerospace and defense community. our reach across communications platforms, the Executive
Please contact us with story ideas about member company Report will contain ties to our new website, while the website
innovations, people that are making a positive difference in will include a novel electronic version of the Executive Report.
our industry, or a guest editorial or advocacy column. You can We’re excited to bring you a more dynamic Executive Report.
send your ideas to: edward.goldstein@aia-aerospace.org. We hope you will look forward to the next issue!
Our expanded magazine also will include advertising for the
TARC Champs Headed to International Rocketry Challenge
O n July 14-15, the Odle Middle School “Space Potatoes” curtesy of TARC’s Diamond Sponsor, the Raytheon Company.
rocketry team from Bellevue, Wash., champions of the Lockheed Martin Corporation, Thales USA and 19 other
2016 Team America Rocketry Challenge, will take on contestants AIA member companies also sponsor AIA’s signature STEM
from Great Britain, France, and for the education program.
first time Japan, in the International Space Potatoes member Stephanie
Rocketry Challenge at the Farnborough Han is already considering a career in
International Airshow. Sponsored by rocketry and says the team’s careful
Credit: Keith Mordoff/AIA
AIA and the National Association of gathering of data throughout the year
Rocketry, this year’s TARC competition and preparing for TARC, “enabled us
featured 789 teams from all 50 states, to assume the performance of the
the District of Columbia and the U.S. The Space Potatoes receive the TARC rocket when we were in a rush at the
Virgin Islands. Nearly 5,000 students championship trophy. finals.” Speaking like a true mission
participated in TARC throughout the year. The Space Potatoes, controller, team captain Mikaela Ikeda says her role is to
comprised of Mikaela Ikeda (12), Larry Jing (14), Karl Deerkop “keep everyone in check. When people are getting worried, I
(14), Srivatshan (Sri) Sakthinarayanan (14) and Stephanie Han have to be the sane one and make sure everyone does their
(13), were awarded more than $20,000 in scholarships and jobs.” We know they will, and wish the Space Potatoes much
funds for their school and an all-expense paid trip to London success at Farnborough!
AIA Gearing Up for Farnborough Airshow
A t this summer’s Farnborough International Airshow
(July 11-17) AIA is sponsoring a number of events
highlighting the robust global partnerships taking flight which
AIA will convene a number of roundtables with senior
government officials in the Boardroom of our Operations Center
throughout the week. We will also host member companies
help strengthen U.S. national security and ensure our industry and distinguished guests at our President’s Reception on
remains competitive in the increasingly competitive global Sunday, July 10th at Grosvenor House, JW Marriott Hotel and
marketplace. during the U.S. Industry Reception at the U.S. Ambassador’s
Symbolic of these partnerships, for the first time at residence in London on Tuesday, July 12th. AIA members
Farnborough, an F-35 Lightning II advanced technology fighter interested in attending these receptions should contact:
aircraft manned by U.S. Marine Corps and British Royal Air Force Monika.Nielsen@aia-aerospace.org. Farnborough attendees
crews will make an appearance. are also welcome to stop by AIA’s booth in the U.S. Pavilion.
A E RO S PA C E INDUSTR IES ASSOC IATION
1000 Wilson Blvd. #1700 Arlington, VA 22209-3928 Phone 703.358.1000 www.aia-aerospace.org
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printer to place Additionally, it was printed at a carbon neutral facility, utilizing 100% renewable electricity in the form of wind and
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