Eric Fanning, president and CEO of the Aerospace Industries Association, was previously the secretary of the U.S. Army. He spoke with Aviation Week Network just before the Singapore Airshow about pressures on the supply chain, budget and how industry is working to spur innovation and reduce carbon emissions.
AWN: What is your message for the show, and what opportunities do you see for U.S. aerospace companies in the Pacific?
You have the two big shows in Farnborough and Paris, but Singapore is right there behind them because of the economic and military importance of that region. There are lots of customers there, including a growing number on the military side. India is looking at fighters, and Japan has its future fighter program. Obviously, there is a big and growing commercial aviation market as well. There are lots of economic and business reasons for our members to be there. The message they’ll be bringing, and we’ll be reinforcing, is the quality of American products and the value of American partnerships.
What are the biggest challenges you see to the U.S. supply base and how are AIA’s companies managing through that?
One of the biggest challenges for the supply base but also for the primes is the unpredictable nature of the budget process and political process in Washington. It takes these companies a long time to invest in the technology and maintain the workforce. When there isn’t consistency and predictability about the future, it makes it hard to plan.
The industrial base has been put through some shocks with the trade and tariff issues that are going on. It can take a while for that to surface in our industry because big companies mitigate the disruption by stockpiling multiyear contracts. And also, the trade and tariff issues are layered upon each other, so it can be hard to sort out what the impacts are. A lot of the companies as they get smaller don’t have the cash reserves to withstand that kind of uncertainty.
How is AIA working to encourage environmental sustainability in the industry?
It’s a pretty compelling story, what manufacturers are doing to lower carbon emissions. Since 1990, they have cut emissions in half. That’s not averaging it per mile or per passenger. That’s cutting it in half as air travel has exploded.
And they have committed to take the 2005 levels and cut those in half by 2050 and find offsets for any year that levels go above. That 50% reduction is a combination of technology, better fuel and offsets.
The U.S. Congress has asked you to weigh in on how it can improve innovation in the Defense Department. What do you plan to suggest?
Since being on the industry side these last two years, I didn’t realize how badly the government misunderstands what incentivizes the private sector and what really causes them problems. There has to be more flexibility, not just on requirements but on the spend as well. If you did an analysis, I think that you’d see that so tightly controlling the spend and overseeing the spend actually winds up costing more money in the end.
I think it’s a combination of giving more flexibility to the program managers on the inside but then training them how to use the tools we give them. A former senior acquisition executive from the air force once said that for every program started at the Pentagon, they should say to themselves, “Do we have a plan to scale this and feed this and field this quickly?”
What do you expect to see in the fiscal 2021 budget season for the U.S.?
No matter what happens in the November presidential election, there will be some pressure on the budget. We have to at least have growth to cover inflation, because the problems we’re getting at will take a while to fix in a way that has a lasting impact. We’re not there yet. I always remind people: this is driven by the operational tempo and our forces around the globe. That has a cost to it. And as long as we continue to use the military in the way we’ve been using it, we need to support it adequately.
