Marion Blakey is the president and CEO of the Aerospace Industries Association.
AIA dailyLead editor Angela Giroux Scheide interviewed Blakey on her thoughts regarding how sequestration and the economy has affected the aerospace and defense industry. An edited transcript of their conversation follows.
Sequestration is slated to cut an additional $600 billion from defense over 10 years beginning in 2013. What is AIA doing to change the course of this outcome?
In short, everything we can. We believe the cuts will be devastating to our national security, economy and industry. With more than 1 million jobs at stake, our only option is to keep fighting. That means more rallies, more outreach to the press and ongoing efforts to educate policymakers and stakeholders across the country about the disastrous consequences of gutting the U.S. aerospace and defense industry. Aerospace and defense is Second to None and we intend to keep it that way.
How will the sequestration process affect civil space activities?
We don’t know precisely, but it’s not likely to be good. Overall, domestic discretionary programs will be cut by about 7%, but the cuts to NASA, NOAA and FAA space programs could be quite a bit worse because some think these investments can simply be postponed. But they really can’t.
In the wake of the Space Shuttle retirement, NASA is at a crucial stage in developing new commercial crew launch capabilities, completing important science missions and moving forward with exploration programs. All of these efforts are essential to our nation’s future in space, but they are threatened by the sequestration process. AIA will work vigorously to protect these crucial investments in our future.
What impact has the economic malaise and budget deficit had on the civil aviation market?
Right now, the civil aviation sector is seeing modest growth. But if fuel prices stabilize and the global economy rebounds, demand for business and commercial air travel will return and both the general aviation and commercial aircraft industry could see significant growth.
Large commercial aircraft backlogs are still strong, and 2011 saw some record-setting orders. Congress and the administration understand the value of Next Generation Air Transportation System, and the program is on schedule.
However, sequestration could cut FAA’s budget by 10%, which would fall disproportionately on the investment accounts and significantly delay NextGen. Without NextGen, civil aviation growth will be stymied because our current ATC system is too inefficient to accommodate projected traffic increases. The resultant air traffic gridlock will cost the U.S. economy up to $40 billion a year and tens of thousands of jobs.
Many U.S. aerospace and defense companies are trying to expand international growth opportunities. What are the prospects for U.S. competitiveness in the international marketplace?
To preserve and expand on our industry’s historical export surplus (more than $51 billion in 2010) requires a level playing field. Adequate access to export financing and robust U.S. government advocacy for civil, space and defense exports are fundamental necessities. Implementation of the administration’s Export Control Reform initiative in 2012 will also be critical.
The lack of predictability, efficiency and transparency in the current licensing system has damaged our industrial base in many key sectors and hurts our national security and foreign policy cooperation with close allies and partners. Even with the best technology, our members tell us that they’ve lost business to international competitors, with small businesses being most impacted.
Image courtesy of AIA.
This question-and-answer session was produced as part of SmartBrief’s 2011 Best Of reports, which capture the year’s most important stories in each industry. Sign up now for AIA dailyLead to get tomorrow’s report on the top must-read stories from the aerospace industry.