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MARCH 12, 2003

Mr. Chairman, thank you for this opportunity to testify and report to you on the work of the Commission on the Future of the United States Aerospace Industry.

Let me begin with a few thoughts about the Commission's final product.

First, the recommendations made were unanimous. Despite a diverse group of Commissioners, whose diversity brought great strength to our deliberations, we were able to achieve unanimity in what we ultimately recommended. There remained some differences in detail about some of the narrative within the report, but we agreed on the nature of the problem faced by the aerospace sector and on the series of recommended paths for this nation to pursue.

Second, our overall vision of a 21st century where aerospace allows anyone and anything to go anywhere at anytime speaks to the mobility which we believe international leadership will require. The ability to move people, goods, services and munitions quickly to where they are needed when they are needed to be there is a definition for both global security and global economic leadership.

Let me if I can outline the recommendations made by the Commission and some of the reasoning behind those recommendations.

The integral role aerospace plays in our economy, our security, our mobility, and our values make global leadership in aviation and space a national imperative. Given the real and evolving challenges that confront our nation, government must commit to increased and sustained investment and must facilitate private investment in our national aerospace sector. The Commission therefore recommends that the United States boldly pioneer new frontiers in aerospace technology, commerce, and exploration.

The 20th century was America's century. Our nation thrived on previously unimagined advances in ground, air and space transportation, rapidly becoming the world leader in nearly every economic sector driven by the progress of science and technology.

One hundred years ago, the slogan "Anyone, Anything, Anywhere, Anytime" would have meant leaving home with transportation permitted and then allowing a week or two to travel between widely separated American cities. Today, New York to London is a day trip. A package of any size shipped today arrives tomorrow morning anywhere in the country.

What could "Anyone, Anything, Anywhere, Anytime" mean a century from now? A sub-orbital day trip between Japan and the United States? A lunar vacation? A Martian hiking expedition? Whatever our future holds, the aerospace sector will take us there, providing our nation and the world with the ability to move people, goods, services, and ideas wherever they are needed and wherever they are wanted.

We need a bold vision for air transportation that creates a new, highly automated "Interstate Skyway System." The system needs to be safe, secure, and efficient and accommodate the large volume and variety of civil and military aerospace vehicles the nation will require in coming years.

We also need an audacious vision of space exploration that recognizes the solar system as our backyard, the Milky Way galaxy as our neighborhood, and the universe as our hometown. We should do this not simply because it's fun or thrilling, or challenging, or enlightening…but because it represents a critical investment in our economic strength and ultimately in our capacity to defend ourselves.
It's America's choice.


The Commission recommends transformation of the U.S. air transportation system as a national priority. The transformation requires:

  • Rapid deployment of a new, highly automated Air Traffic Management (ATM) system beyond FAA's Operational Evolution Plan so robust that it will efficiently, safely, and securely accommodate an evolving variety and growing number of aerospace vehicles and civil and military operations.
  • Accelerated introduction of new aerospace systems by shifting from product to process certification and providing implementation support.
  • Streamlined new airport and runway development.

Delivering people and goods quickly and affordably - when and where needed.

Our air transportation system is severely limited in its ability to accommodate America's growing need for mobility. The basic system architecture, operational rules, and certification processes developed decades ago don't allow today's technologies to be fully utilized and don't allow needed innovations to be rapidly implemented. There are barriers to advancing our air mobility.

First, the U.S. air traffic management infrastructure is not scalable and is vulnerable. Air transportation's inherent speed advantage is being limited by air traffic infrastructure and operating concepts.

Second, revamped certification processes, procedural regulations, and airborne equipage innovation is needed. The bulk of certification and procedural regulations and processes were developed in an era whose time has passed and hasn't kept pace with new technologies. Furthermore, aircraft operators must equip with compatible hardware and systems in order for a modernized air traffic network to succeed.

Third, new runway and airport development takes too long. Meeting the nation's demand for air transportation and fully exploiting its benefits will require a ground infrastructure that accommodates significant traffic increases. Many of the nation's major airports are operating at capacity limits during large portions of the day.
In addition, the economic downturn and the substantial added security burden since 9/11 have seriously disrupted the economic health of the airline industry. Well-intentioned security policies have resulted in billions in post-9/11 costs and lost revenue and account for a large majority of the projected $9 billion in airline industry losses in 2002.

General aviation also has been acutely affected, manufacturers and suppliers are suffering significant losses in aircraft and equipment sales, and the overall impact is rippling through the rest of the U.S. economy.

And, as the forced contraction of the industry continues, small and midsize communities are being disconnected from the national air transportation system that is vital to their economies.

The U.S. government must assume full cost and responsibility for assuring the protection of our aviation system against terrorist attack. At the same time it must adopt rational security measures that facilitate public access to the air transportation system, and thereby encourage air travel.

The Commission recommends that the United States create a space imperative. The Department of Defense, NASA, and industry must partner in innovative aerospace technologies, especially in areas of propulsion and power. These innovations will enhance our national security, provide major spin-offs to our economy, accelerate the exploration of the near and distant universe with both human and robotic missions, and open up new opportunities for public space travel and commercial space endeavors in the 21st century.

The challenge we face on the space frontier is to build from dreams and concepts the political will to move forward to new technologies and destinations. For almost 20 years we have been satisfied to limit our dreams, rely upon proven technologies, and invest little in building public or political support for space initiatives. But the potential to do great things has never been clearer.

The Commission believes the nation would benefit from a joint effort by NASA and DoD to reduce significantly the cost and time required to access space. Such an effort would build on the capabilities of both organizations and provide the "critical mass" of funding needed to create the necessary breakthroughs in propulsion.

Investment in the development of more advanced propulsion systems will lead to faster transit times, improve operational flexibility, and reduce the radiation impact for long-duration, human exploration missions. Once the time to explore many parts of the solar system has been reduced to reasonable numbers, the political imperative to do what is now possible will be acted on.

A significant limiting factor in the performance of most spacecraft, including the International Space Station, is the amount of power that can be generated from solar energy, increasing available power could expand opportunities in military, civil, and commercial space applications. Once there is sufficient power in orbit to do real things, investment will be more likely.

New technologies open up opportunities for a next generation of satellites and launch systems for military operations, homeland defense, global protection, and air transportation management.

The Commission believes the nation needs a joint civil and military initiative to develop a core space infrastructure that will address emerging national needs.

Our national space infrastructure is aging. For example, the Vehicle Assembly Building at Kennedy Space Center has a 35-year old roof that requires frequent patching and other failures that have resulted from hurricanes and high winds. Replacement cost of infrastructure is $3.9 billion at the Kennedy Space Center and $3.0 billion at Cape Canaveral Air Force Station. Clearly a new operations and management structure is desirable for these facilities.

The civil and commercial aerospace sectors will look to space more in the future to develop new products and services and create new markets as they have for telecommunications and commercial remote sensing. The U.S. commercial space industry continues to lose access to markets as demand decreases and international competition increases. Government regulations and incentives are necessary to bolster this important market until there is a turn-around in demand.

The Commission believes that the search for knowledge will not only answer fundamental questions but also will inspire our children and provide a source of future products and services. This will require that the U.S. government sustain its long-standing commitment to science and space and continue to focus on international cooperative efforts.

The Commission recommends that the nation adopt a policy that invigorates and sustains the U.S. aerospace industrial base. This policy must include:

  • Procurement policies that include prototyping, spiral development, and other techniques that allow the continuous exercise of design and productions skills.
  • Stable funding for core capabilities without which the best and brightest won't enter the defense industry.
  • Removing barriers to international sales of defense products.
  • Removing barriers to defense procurement of commercial products and services.
  • Propagating defense technology into the civil sector, particularly in communication, navigation, and surveillance.
  • Sustaining critical technologies that aren't likely to be sustained by the commercial sector, e.g., space launch and solid rocket boosters.

A healthy aerospace industry is central to maintaining a safe and secure world. It provides the ability to:

  • Rapidly, safely; and securely send and receive information,
  • Move troops, equipment, and supplies to anywhere on the globe or into space at anytime, and
  • Prosecute effects-based warfare.

The effectiveness of American defense is a crucial determinant of world peace, prosperity, and stability. In the 21st century enabling technologies for vital military capabilities will come from the commercial sector as well as the defense sector. Today's military capabilities are at risk due to a threatened industrial base, workforce concerns, and the need to protect critical infrastructure.

The Defense Department should task the Defense Science Board to develop a national policy that will invigorate and sustain the U.S. aerospace industrial base. The policy should address issues such as mergers and acquisitions, procurement and budgeting policies, research and investment, technology transition, international sales, and workforce development.

The United States must continually develop new experimental systems in order to sustain the critical skills to conceive, develop, manufacture, and maintain advanced systems and provide expanded capabilities to warfighters.

The federal government and industry must partner to enhance the operational readiness and capability of new and legacy military aerospace systems. The government should fund research and technology development programs to reduce total ownership costs and environmental impacts and create a structured, timely, and adequately funded technology insertion process and reform procurement practices accordingly.

The Commission recommends that the federal government establish a national aerospace policy and promote aerospace by creating a government-wide management structure. This would include a White House policy coordinating council, an aerospace management office in the Office of Management and Budget, and a joint committee in Congress. The Commission further recommends the use of an annual sectoral budget to establish presidential space initiatives, and replace vertical decision-making with horizontally determined decisions in both authorizations and appropriations.

In the rapidly changing global economy, government leadership must be increasingly flexible, responsive, and oriented toward decision-making at macro levels. It must prioritize and promote aerospace within the government and in its interactions with the industry in order to realize the fullest potential of aerospace to the nation.

The development and implementation of federal aerospace policy is currently spread across multiple government agencies with oversight by numerous congressional committees. The government isn't organized to define national aerospace priorities, develop federal aerospace sector plans and budgets, manage programs that cross multiple departments and agencies, or foster a healthy aerospace sector in a global economy.

The federal government is organized vertically while national aerospace challenges are becoming more horizontal in nature. Without integration, national aerospace policy occurs either by default or piecemeal. The Commission believes that the U.S. government can only ensure U.S. aerospace leadership by leading itself. To do this, the executive and legislative branches need to be reoriented to better address national aerospace issues.

Maintaining a national aerospace policy should be a function assigned jointly to the National Security Council and the National Economic Council. They should establish an Aerospace Policy Coordinating Council to develop and implement an integrated national aerospace policy. OMB should create a Bureau of Aerospace Management that would translate the national policy into annual planning and budget guidance.

Federal departments and many agencies should establish offices of aerospace development to promote aerospace activities and align aerospace with their missions. A prudent response from Congress would be to organize a Joint Committee on Aerospace.

Government processes tend to be complex, lengthy, and inefficient. As a result, aerospace products and services developed and used by the government are more costly for the taxpayers and take longer to acquire. Also, aerospace products and services developed by industry for sale in the commercial marketplace take longer and cost more because of extensive government barriers resulting in lost market share and diminished profitability.

Government, industry, labor, and academia must work together as partners to transform the way they do business, allowing the nation to capitalize on the best ideas available and apply them rapidly to new aerospace products, processes, and services.

The Commission recommends that U.S. and multilateral regulations and policies be reformed to enable the movement of products and capital across international borders on a fully competitive basis and establish a level playing field for U.S. industry in the global marketplace. The U.S. export control regulations must be substantially overhauled, evolving from current restrictions on technologies through the review of transactions to controls on key capabilities enforced through process controls. The U.S. government should neutralize foreign government market intervention in areas such as subsidies, tax policy, export financing, and standards either through strengthening multilateral disciplines or providing similar support for U.S. industry as necessary.

A globally competitive U.S. aerospace industry

Open global markets are critical to the continued economic health of U.S. aerospace companies and to U.S. national security. The 2001 U.S. aerospace trade surplus was nearly $32 billion, the largest surplus of any U.S. manufacturing sector. However, the U.S. industry share of the global market has declined in key sectors over the last 20 years. We are on the brink of ceding our position as the top producer of large commercial aircraft and are losing market share in civil helicopters and aircraft engines. Much of this decline is a direct result of foreign government intervention and protectionist policies.

In order to remain global leaders, U.S. companies must remain at the forefront of technology innovation. They also must have access to global customers, suppliers, and partners.

The defense industrial base is falling farther and farther behind the commercial marketplace because it has to cope with excessive regulation. The current export control regime provides too little security and is choking American companies and preventing effective technology collaboration with others. U.S. export controls must be completely overhauled, and defense procurement policies must more effectively balance international collaboration and maintain U.S. industrial capacity in critical technologies and capabilities.

Although we are ahead of other countries in investment in military technology and capability, we are on the edge of dropping out of the race in the civil sector. Instead of continuing to invest, our government has increasingly pulled back from the civil aerospace market and left it up to U.S. companies to compete against competitors subsidized by their governments.

The Commission recommends a new business model designed to promote a healthy and growing U.S. aerospace industry. This model is driven by increased and sustained government investment and the adoption of innovative government and industry policies that stimulate the flow of capital into new and established public and private companies.

A strong and healthy U.S. aerospace industry that is attractive to investors.

The U.S. government budgeting and procurement system is extraordinarily complex and inefficient. Unpredictable and unstable government budgeting and funding creates a cycle that contributes to the diminished return on the government's investment in national security capabilities and serves as an impediment to long-term industry excellence.

A stable long-term investment budget is critical to the modernization and transformation goals of U.S. armed forces. The Commission advocates increasing the government's financial flexibility to make funding adjustments among and within programs.

In a call to revise program management policies, the Commission believes the use of multi-year contracting for both procurement and R&D programs will improve program stability and performance as well as produce needed cost savings.

The U.S. aerospace industry extends through a network of purchasers, subcontractors, suppliers, and partners - sometimes referred to as the supply chain. Each of the participants is intrinsically tied to the factors affecting the industry. Encouraging a climate that is attractive to new entrants, while stable enough for current players, will promote competition and innovation, add to efficiencies, and lower costs.

Certain U.S. tax and trade laws and regulations that affect a variety of industries weigh particularly heavily on defense and aerospace in competition with domestic commercial entities as well as in international markets.
Government and industry should work together to develop and implement training and exchange programs that would educate and expose their respective workforces to each other's challenges and responsibilities.
Government must develop and implement a policy regarding international cooperation in defense and aerospace that recognizes the global industrial base. The Commission urges a review of the policy regarding domestic and international business combinations.

The Commission recommends that the nation immediately reverse the decline in and promote the growth of a scientifically and technologically trained U.S. aerospace workforce. In addition, the nation must address the failure of math, science, and technology education of Americans. The breakdown of America's intellectual and industrial capacity is a threat to national security and our capability to continue as world leader. Congress and the administration must therefore:

  • Create an interagency task force that develops a national strategy on the aerospace workforce to attract public attention to the importance and opportunities within the aerospace industry.
  • Establish lifelong learning and individualized instruction as key elements of educational reform.
  • Make long-term investments in education and training with major emphasis in math and science so that the aerospace industry has access to a scientifically and technologically trained workforce.

A well educated, scientifically literate, and globally competitive aerospace workforce.

There is a major workforce crisis in the aerospace industry. Our nation has lost more than 600,000 scientific and technical aerospace jobs in the past 13 years. Those losses began as a result of reduced defense spending following the end of the Cold War. But subsequent contraction of the industry through mergers and acquisitions and the events of 9/11 have made that situation worse.

Due to these actions and events, many of the workers who have lost their jobs are unlikely to ever return to the industry. These losses, coupled with pending retirements over the next 10 years, represent a devastating loss of skill, experience, and intellectual capital to the industry. Few new young employees are in the "pipeline" to replace the aging aerospace workforce.

The aerospace industry has historically been cyclical and strongly driven by defense spending. Global competition, especially in commercial aviation, has risen rapidly since 1989, most notably from Europe, and is likely to grow.

The aerospace industry must have access to a scientifically and technologically trained workforce. In the long term, the Commission stresses that that action must be taken to improve mathematics and science education from K-12 through Ph.D.

It is likely that people entering the workforce now will hold five or more jobs in their lifetime, and the education system must be prepared to deliver training and education to meet these changing skill requirements and labor market needs.

The Commission recommends that the federal government significantly increase its investment in basic aerospace research, which enhances U.S. national security, enables breakthrough capabilities, and fosters an efficient, secure, and safe aerospace transportation system. The U.S. aerospace industry should take a leading role in applying research to product development.

U.S. preeminence in aerospace research and innovation.

In the past, aerospace led the technology revolution because of large public investment in research directed at national security imperatives and goals. Today, we have no integrated national aerospace consensus to guide policies and programs. This has resulted in unfocused government and industry investments spread over a range of research programs and aging infrastructure.

The lack of sufficient, sustained public funding for research, development, test, and evaluation infrastructure limits the nation's ability to address critical national challenges and to foster breakthrough aerospace capabilities that could enable a new era in aerospace leadership for America.

To provide focus for aerospace investments on developing breakthrough capabilities, the Commission suggests the government achieve, as a national priority, the following goals by 2010:

Air Transportation

  • Demonstrate an automated and integrated air transportation capability that would triple capacity by 2025.
  • Reduce aviation noise and emissions by 90 percent.
  • Reduce the aviation fatal accident rate by 90 percent.
  • Reduce transit time between two points on Earth by half.


  • Reduce cost and time to access by half.
  • Reduce transit time between two points in space by half.
  • Demonstrate the capability to monitor and surveil continuously Earth, its atmosphere, and space for a wide range of military, intelligence, civil, and commercial applications.

Time to Market

  • Reduce the transition time from technology demonstration to operational capability from years and decades to weeks and months.

Now I would like to turn to the specific questions you raised in your charter for this hearing.

On the issue of the Administration's budget proposals for research and their relationship to Commission recommendations, my assessment is that the Administration is moving aggressively in several areas to meet our goals. NASA's request for funding of Project Prometheus is very much in line with our recommendation that they move technologies emphasizing power and propulsion. DoD and NASA are cooperating on the National Aerospace Initiative that was specifically endorsed by the Commission. NASA and FAA are beginning cooperative efforts in an advanced air traffic management system, a major focus of our final report. The Administration's hydrogen program is in line with our recommendation for work on breakthrough energy capabilities.

On the issue of foreign competition, I would make two points. First, the global challenge comes from nations more focused than we are about the importance of aerospace technology and who are developing long-range plans to overcome the United States in an arena where we have had strategic and economic superiority. Second, our export control policies are preventing U.S. companies from selling product in world markets meaning that we are undermining the strength of our own aerospace supplier base.

Next, we are very concerned about workforce issues. The Commission said quite clearly that the aerospace sector requires a scientifically and technologically competent society. We recommended several things in the workforce arena, which are covered previously in my testimony, but I would point particularly to he suggestions that educational reform should emphasize individualized instructional programs and lifelong learning.
Finally, if there is one overriding conclusion of the Commission, it is that we must move toward horizontal decision-making as opposed to the vertical silo decision-making regime that characterizes government interaction with the aerospace industry. The aerospace mission cross cuts many different departments, agencies, programs, congressional committees, and subcommittees. Decisions made inside vertical silos are wasteful of taxpayers' dollars and destructive of the coordination needed to utilize aerospace resources to the fullest capacity.

For example, an advanced air traffic management system is absolutely vital to our continued leadership in aerospace. To get the system we need, there will have to be significant cooperation and funding coordination between FAA, NASA, NOAA, and DoD. That is a very tall order, but a very necessary process. No one of these agencies can do the multi-billion dollar expenditure necessary to get the new system in place, but a cooperative approach with each agency doing its own mission for its own reasons coordinating research and technology so that individual mission assets can be used broadly is the way we must go. DoD flew GPS for its own mission requirements, but the technology has become even more valuable as a broader mission. That is a market for the future.

Thank you for this opportunity to testify.



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