FLUG REVUE November 2004: AIA president Douglass on current topics

JOHN W. DOUGLASS

President of the US Aerospace Industries Association

John W. Douglass

FLUG REVUE: Boeing is lobbying to end government launch support to Airbus. Now President Bush has vowed to bring this topic to the fore. What is the position of AIA here?

Douglass: AIA believes that it is helpful for the U.S. government to take a close look at the agreement to determine whether it is still in the best interest of the U.S. to remain in the agreement. And if not, it is time to renegotiate it or to cancel it outright. You know that the agreement is now 12 years old and much has changed since then. The U.S.´s understanding was that the subsidies should have been gradually diminished over time as Airbus became financially viable. That is undoubtedly the case now, and yet they still get the maximum rate. To that end, we fully support Boeing's position.

FLUG REVUE: European companies always complain of difficulties in cooperating with the U.S. on military programs, for example regarding tight technology export restrictions. What can be done to smooth things here?

Douglass: Well, one thing that could be done is for the European governments to make it clear that these arbitrary technology restrictions here in the United States are not helpful to NATO and the war on terror. Recently, the most vocal country in complaining was the United Kingdom and that has made some political impact in Washington because of the UK support for the United States in both Afghanistan and Iraq and in other places. But, in general, we need to hear more from America's allies about the difficulties these restrictions are causing. The restrictions are not in place on behalf of industry but because of political views in certain parts of the American government.

FLUG REVUE: A more open trade would be beneficial for all...?.

Douglass: Yes, particularly regarding routine items available on the global market place. But we feel very strongly that there are some technologies like nuclear and stealth that will need tight control in the future..

FLUG REVUE: Under these circumstances, is there a chance for big transatlantic mergers?

Douglass: It seems that this integration has slowed down a bit at the big-company level but it is still going on fairly busily at the level of small- and medium-sized companies. There is a general feeling in the United States that if you want to be on a European defense program you have to own a company somewhere in Europe. The reverse is also true. So we see a continuing interlocking of the defense and aerospace industrial base of Western Europe in the United States.

FLUG REVUE: How does AIA see the feasibility of the space plan of President Bush in light of NASA's financial problems and how can international participation be secured? What is the most pressing issue from your point of view?

Douglass: Clearly the program that President Bush has proposed is technically feasible - replacing the Shuttle, go back to the moon eventually and then perhaps even on to Mars. I think the way that international cooperation could be secured is for other governments to make it clear to NASA and to the American government that they want to participate and that the next generation of space vehicles should be international vehicles. I think that position would be warmly received here in the United States by our Congress. The ability for us all to pull our technology and our financial resources together in order to produce the very best human-rated space systems to keep humans in space over the next generation would be a positive thing. I do not see political barriers here.

FLUG REVUE: But the announcement that the ISS is no longer a central point for the US was not very well received by the partners who have made big investments. Now the US is a little bit seen as an unreliable partner.

Douglass: That is a difficult image to dispel and it's not just the ISS. As you know America is viewed from the outside as a nation that sometimes changes course quite suddenly. What is in favor in one administration may not be in favor of the next. But you have also to see that a large part of the money for the space station did come from the US and I think that, if there are to be joint future space stations or future space missions a more even sharing of funding would insure a more constant support for the program across all the nations.

FLUG REVUE: AIA is complaining that the US aeronautics research is in decline. Where do you see the most problems and what can be done to climb back?

Douglass: We are indeed very unhappy with the amount of research that NASA is doing in its aeronautical program, as it's been one of AIA's main objectives to increase this funding over time. We are bringing the subject to the political system, that is both President Bush and Senator Kerry, and we have some reason to believe that we can be successful. We pushed this already in the 2000 elections, and we've seen about $90 billion in aerospace research invested over and above the Clinton program in the last four years. We would like to see that amount increase another $30-35 billion over the next four years. We would recommend that almost all of that money goes to NASA for three things: aeronautics, new infrastructure and replacement for the shuttle. The other funding we need is for the Federal Aviation Administration so that they can continue to develop the new air traffic control system we need here in the United States.

FLUG REVUE: Do you see a strong recovery in the civil sector in the United States right now?

Douglass: We do see a recovery in air travel. We are now above where we were on September 11, 2001. So we anticipate that the commercial market will grow nicely again in the next few years.

FLUG REVUE: Regarding the military sector, can the US really sustain its record defense outlays for years, as the budget deficit is booming?

Douglass: Well, the percentage of the military budget to our gross domestic product is not extraordinary high, especially compared to the way it was at the height of the cold war. The realistic answer is: yes, the American economy can go on like this indefinitely, if the political leadership wants it to. That's the first point. The second point is that there is not a lot of political difference between President Bush and Kerry regarding how to execute the war on terrorism. They may have some substantial differences in tactics but both have promised that they are going to maintain a robust investment in the war on terrorism. So there isn't a huge political call to bring down the size of the defense budget. Right now, industry is pleased with the level of the defense program. We think it's a balanced program.

FLUG REVUE: The US aerospace workforce is aging. Are you doing something to attack this disturbing trend?

Douglass: Yes, we are. This is part of our political objectives with both the Democrats and the Republicans. We have made a proposal to our Department of Labor to create a nation-wide plan to train new aerospace workers to come in to our industry because we see very large numbers retiring over the next 5 to 10 years, just at a time when we see business increasing. And we are doing some other programs like a national rocket contest for high-school- and middle-school-aged kids to get them interested in aerospace and that has been very, very successful. We had over 16,000 high-school kids in that contest over the last two years.

FLUG REVUE: AIA has made it clear that the cost and frequency of airshows are too high What are your suggestions for rationalisation in this area?

Douglass: We would like to see Europe get on a cycle where they had one major airshow every two years. We know that this is extremely hard to do because the aerospace organizations in the UK and France make a substantial amount of money out of those airshows. But the real issue is that airshows were important in a time when there were a lot of new products coming on the market each year and there was really no other way to see them. Today there are much fewer new programs and the whole situation has changed. We still think airshows are important to have periodically but not at the pace we've now in Europe or in other parts of the world.

Questions by Karl Schwarz and Volker K. Thomalla

From page 19 of FLUG REVUE 11/2004

Last updated 13 October 2004

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