Graham Warwick/WASHINGTON DC
Some time next year, aerospace leaders hope, the next US President will convene a commission on the future of their industry. High on the agenda will be reversing the decline in aerospace research and development (R&D) spending that many believe has put at risk US leadership in an industry that is critical to national security and economic prosperity.
Advocates have been pushing for some time for a presidential commission to examine the issues facing the aerospace industry and to develop a long-term vision for its future. Now Congress has taken heed and passed an amendment to the 2001 defence budget requiring the next Administration to establish a presidential commission chartered to develop a "comprehensive, integrated approach" to government policies affecting the industry.
"The presidential commission will happen next year," says John Douglass, president of the US Aerospace Industries Association (AIA). He has been pushing the idea for two years and says industry is pinning its hopes on the commission reversing the decline in US Government support for aerospace.
Difficult transition
Aerospace is undergoing a difficult transition, Douglass says, from an industry built around US national security to one reliant on the global economy. Sales have switched from 70% defence to 70% commercial in that last few years, exposing US manufacturers to international competition. The result has been a decline in the US share of the world market, which many blame on the lack of government support for aerospace.
As several government agencies are involved, a presidential commission is seen as the best way of achieving a comprehensive long-term solution. "Not all institutions in the USA have recognised the transition and, even in those that have, the degree of understanding varies," Douglass says. "No single agency can change government policy in a coherent way. They all change in different ways, at different rates. The commission is a way to re-orient things."
Under the Reagan Administration, the Packard Commission rewrote the relationship between the US military and industry, gave birth to acquisition reform, and brought to prominence reformists such as former defence secretary William Perry, who was instrumental in reshaping both the military and the industry to face post-Cold War realities.
Douglass served on the Packard Commission and has high hopes for a presidential commission on the aerospace industry. But strong leadership will be needed for it to be effective, he acknowledges. "A commission is as effective as the leadership wants it to be," he says. "Packard was very effective."
The industry is already moving to draw up the list of issues to be examined and to suggest members of the 10- to 17-person commission. "There is a good consensus within industry on the issues and we know who we want on it," Douglass says. "We will have a well-developed package available."
According to the AIA, the biggest challenge facing the industry is the lack of government understanding of the role aerospace plays, and the competition it faces, in the global economy. Hindered by inadequate funding for R&D, greater competition for financial and human resources, and outmoded export controls, US industry is being inhibited from "capitalising on its technological lead in the international market", the AIA argues.
One of the bigger issues the commission will have to tackle is that of government's role in funding aerospace R&D in a global, commercial market environment. Traditionally in the USA, the bulk of government R&D funding has been provided through the Department of Defense (DoD) to develop military technologies that have later been adapted by companies to commercial applications.
This reality was recognised in the 1992 US-European agreement limiting government support for the development of large civil aircraft. This allowed European governments to provide up to 33% of the launch aid required for Airbus Industrie programmes in acceptance of the fact that Boeing's commercial aircraft have benefited from technology developments funded by the DoD, as well as NASA.
The reality has changed, Douglass says, with the dramatic post-Cold War reduction in US defence spending. In the late 1980s, the DoD spent almost $50 billion a year on R&D. Today it is just over $30 billion and declining. Cuts have also been felt at NASA and other agencies funding R&D. As a result, total US government spending on aerospace R&D fell below $20 billion last year. "The aerospace share of national research and development investment declined from a high of 25% in 1987 to below 8% in 1997, and is still declining," says Douglass.
Not only is the DoD spending less on R&D is absolute terms, it is also focusing its reduced resources on purely military technologies, such as stealth, which have little or no commercial application. In addition, the Pentagon has shifted a substantial amount of its R&D funding towards the space sector and away from aeronautics - a move that has been mirrored by NASA, to the detriment of its aircraft-related research programmes.
At the same time, the US share of the world commercial aircraft market has declined in the face of increased competition from Airbus. This is of great concern to the AIA, as Boeing airliners make up the largest part of industry's annual sales and ensure that aerospace has the largest trade surplus (exports minus imports) of any US manufacturing industry. After steady increases over the past few years, the AIA is projecting a decline in both sales and surplus this year as Boeing's production rates decrease.
Douglass believes these factors combine to produce a different picture of relative USand European government support for commercial aircraft development today compared with a decade ago. Lower spin-off benefits from military R&D and substantially reduced spending on aeronautics R&D in the USA, coupled with Airbus' increasing market share, call into question the basic tenets of the 1992 large civil aircraft agreement, he suggests.
Inappropriate support
While the Clinton Administration continues to press the European Union to reduce or eliminate launch aid for Airbus programmes, the US industry continues to push for increased government R&D funding. But it may not prove that simple. Congress has already signalled that the existence of only one large commercial aircraft manufacturer in the USA raises concerns about "inappropriate government support for a private company".
The concerns are prompted, in part, by the debacle which befell NASA's substantial High Speed Research (HSR) programme in 1998 following the merger of Boeing and McDonnell Douglas. Both manufacturers had been working collaboratively with NASA on high-speed civil transports, but the HSR programme had to be cancelled when the newly merged Boeing decided there was no near-term market for a second-generation supersonic airliner.
Douglass plays down these concerns, arguing that Boeing aircraft are the product of "hundreds of manufacturers". These companies, and not just Boeing, would be the beneficiaries of increased R&D funding, he argues. Douglass accepts that, as result, Airbus would also benefit through its US suppliers, but he believes Europe has a vested interest in the health of US aerospace R&D.
"When it comes to research into the future airspace system, Europe and the USA have all the same public interests - ecology, fuel efficiency and safety. Then there is the increasing interconnection of the industrial bases," he says. "We have to get to grips with common interests without creating trade barriers."
If Douglass has his way, Europe will be given an opportunity to express its views to the presidential commission - politicians permitting. "The common interests of Airbus and Boeing should make an accommodation by the two governments easier," he believes. "We have to move beyond [trade barriers] and find ways to inform legislators on the real issues."
The real issues include securing sufficient R&D investment to achieve breakthroughs - and not just incremental improvements - in those areas that are constraining the growth of commercial aviation, principally safety, capacity, noise and emissions. Already, some progress is being made.
NASA has restructured its aerospace research programmes to support 10 technology goals aligned under three "pillars", one of which is global civil aviation. Goals include reducing accident rates, noise levels and emissions; increasing aviation system throughput; and reducing travel time and costs.
In addition, NASA has begun co-operating more closely with the US Federal Aviation Administration, agreeing complementary goals in aviation safety, system efficiency, noise and emissions. Within the partnership, NASA leads on long-term "stretch" goals and technology investment, while the FAA leads on near-term goals, certification and implementation.
NASA's efforts continue to be constrained by tight budgets. Out of its 2001 budget request of over $14 billion, less than $1.2 billion is set aside for aerospace R&D. Under $200 million is earmarked for its key aeronautics "focused programmes": aviation safety; aviation system capacity; quiet aircraft technology (QAT); small aircraft transportation system (SATS); and ultra-efficient engine technology.
In contrast, $235 million has been requested to begin a five-year, $6 billion programme to demonstrate competing second-generation reusable launch vehicles. This compares with the $69 million NASA plans to spend over the next five years on SATS, to demonstrate an entirely new mode of transport using small aircraft to link the USA's thousands of small airports; or the $100 million set aside for QAT, to develop technology to contain aircraft noise within the airport boundaries.
Justifying the agency's lurch towards the space side of the aerospace R&D equation, NASA Administrator Dan Goldin argues that "technologies relevant for progress in both air and space transportation are increasingly overlapping and synergistic". He wants to break down the "cultural barriers" between aeronautics and space. "We cannot afford to work as though space and aviation were two entirely different industries that demand separate technology programmes."
Shift to space
"The shift to space is a problem," says Douglass. "There is not enough money in NASA aeronautics programmes to produce technology demonstrators, which means there is no bridge between technology development and technology insertion." Industry and Congress are supportive of NASA, he says, but feel the cutbacks in aeronautics have gone too far.
Douglass and Goldin are agreed that government still has a role to play in funding aerospace R&D. "Where there is high risk there is a role for government," says Douglass, while Goldin says the rates of return are too low for commercial investment in anything other than evolutionary product development, yet revolutionary technology advances are required to meet US transportation needs. "Government investment, therefore, plays a crucial role."
The AIA believes a gradual increase in national aerospace R&D investment totalling $70 billion over the next five years would be sufficient to maintain the industry's position as a "major engine of US economic growth". This would increase aerospace R&D funding from its 1999 level of just over $17 billion to $40 billion by 2005. Industry would provide $20 billion of the additional funding, with government providing the other $50 billion.
Next year's presidential commission will consider all sides of the aerospace R&D funding issue, but Douglass believes the technologies the US industry needs to develop to be competitive globally are all in the public interest. "We do not see this as corporate welfare."
Source: Flight International
