Industry Fears Budget Cuts Will Devastate Aerospace Sector

NATIONAL HARBOR, Md. — Looming defense cuts will lead to changes in the way the U.S. Air Force does business with industry, said Chief of Staff Gen. Norton A. Schwartz.
In a Sept. 20 keynote address at the Air Force Association's Air and Space Conference and Technology Exposition, Schwartz said there is no room anymore for companies to “over-promise only then to under-deliver.” There will be no blank checks for industry, and the military will not be able to have everything it wants.
During a panel discussion earlier, Aerospace Industries Association Vice President Fred Downey said that the Pentagon needs to work with industry to come up with a national aerospace and defense strategy to avoid devastating impacts to military aviation. The military’s aircraft inventory is aging fast, with B-52s and other platforms now more than 50 years old, he said, and atrophy already has begun to affect combat aircraft.
In 1960, 1,000 fighter jets were delivered to the military. Last year, there were just over 100. And the aerospace sector that once featured more than 150 companies, after consolidation, now has just a handful of large firms, Downey said.
Neil G. Kacena, advanced development programs deputy at Lockheed Martin’s aeronautics division, said future platforms will come with greater capabilities, they may take longer to field and cost more money over the long run.
Executives said that a spark in innovation is needed to stem lasting impacts from budget cuts. 
James M. Dodd, vice president of Advanced Boeing Military Aircraft, said that any breakthroughs industry can achieve may not find a ready and willing buyer in the military.
The Pentagon will be more discerning, Schwartz said.
“Future developments will have to be less ambitious,” he said. “Although historically the Defense Department has had more trade space to advance the state of the art, we now must be more calibrated in pushing the technological envelope.”
The Air Force can’t afford to pursue unproven technologies and may have to opt for modest and less exquisite programs, Schwartz said.
With fewer new programs, second- and third-tier vendors will go out of business, said Michael Griffin, a professor at the University of Alabama and former administrator of NASA. While China continues building up its industrial base, “we’re sitting back and allowing them to do that with little or no reply,” he said.
Boeing, Lockheed Martin, Northrop Grumman and General Dynamics all have announced the elimination of space-related positions in recent months. With less demand for new designs of spacecraft and related systems, executives fear that an exodus of critical talent will be a result of the new fiscal reality.
“If we turn our back on that skilled workforce that delivers that capability, we’ll never be able to build it again,” said Gary E. Payton, aerospace consultant and former deputy undersecretary of the Air Force for space programs.
American spacecraft last a long time, executives said, and companies have struggled to find a new generation of scientists that can come in and work on satellites that were built decades ago.
Air Force Space Command already is restructuring programs to reduce costs and investigating hosted payloads concepts, in which it can put its sensors on commercial satellites.
“But there is a limit to how far we can and should cut,” said commander Gen. William L. Shelton.
The Air Force must continue efforts related to space-based missile and nuclear warning systems, GPS or protected communications, he said.
One money-saving initiative is to launch smaller satellites. The Air Force Academy’s FalconSAT program, in which cadets build and launch their own satellites, holds promise, Shelton said, as the smaller assets don’t require as much infrastructure to launch.
Industry, too, is pushing forward. “We’re not sitting still,” Dodd said. “It’s not just a pity party.”
At Boeing, the focus is on data fusion and secure information sharing, electronic warfare and cybersecurity, precision navigation and directed energy, Dodd said.
The bottom line, Downey said, are programs. “If there aren’t programs, we won’t come out stronger as an industrial base.”

Topics: Aviation, Business Trends, Business Development, Doing Business with the Government, C4ISR, Defense Contracting, Defense Department, DOD Budget, Science and Engineering Technology, Research and Development, Space