Aerospace Industry Economic Indicator revealed by Dr. Saul Barr

by YankeeJim | April 15, 2010 at 06:08 am
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Arlington Virginia, April 9, 2010 -- Dr. Saul Barr and Brig Gen Robert Mansfield Jr. (ret), Embry-Riddle Aeronautical University-Worldwide briefed representatives of the combined boards of the National Defense Industrial Association (NDIA) and the Association for Enterprise Information (AFEI) introducing research published as “Aerospace Economic Report and Outlook 2010.

Sandwiched between enthusiastic remarks by BG Mansfield (ret), economist Saul Barr described a case for optimism about the aerospace manufacturing sector and the US economy. This being a defense insiders meeting, there is no question that Mansfield wanted to make the best case for the strategic importance of aerospace manufacturing, and the data presented surely supported this.

Mansfield’s message was directed to the aerospace industry supply chain comprising thousands of small and midsize businesses, describing the big picture and economic forces in which growth segments are made clear by economic analysis.

“We want the supply chain to continue to invest in best practices and to address opportunities intelligently. To do that, suppliers must be shown the opportunity, and that requires drilling down into the economics. For instance, MRO is an expanding sector, though foreign suppliers are capturing more of the opportunity than our US suppliers.”

The former Air Force general’s belief is that having manufacturing performed by US suppliers is essential for national security and for preserving US technology advantage where it resides in the aerospace community. There were suggestions among the industry representatives that procurement policy and other implications for defense industrial policy should be considered by the Obama administration because effective policy can 1) positively impact job creation and preservation and 2) preserve and protect technology advantage that is essential to national military and economic security.

General Mansfield discussed the inclination of the Chinese and Russians to invest in aerospace because they have money and they see the strategic benefits. At the same time, he acknowledged that US aerospace manufacturers’ supply chains are increasingly global. Sometimes it is good business to have foreign customers for airplanes participating in the supply chain as in the case of Boeing Commercial Airplanes and the Lockheed Joint Strike Fighter.

However, achieving the right mix of foreign and domestic production and dependencies requires strategic consideration with regard to impact on preserving technology advantage.

There are real challenges to being competitive that include labor cost, and quality and technology advancement. American manufacturers may not be able to win on labor cost, though can maintain a competitive advantage through technological leadership. A part of technological leadership is manufacturing processes that apply information technology in optimal ways, for instance.

“Transforming manufacturing through continuous improvement can be a hard sell without tying the outcome to profitability,” said Mansfield.

Dr. Saul Barr presented a comprehensive overview of the aerospace manufacturing industry and predicted that the growth rate for 2010 for the aerospace sector could be 7.7% or about twice the rate of the recovering US economy that he said will be 3.8%. This is based upon detailed analysis provided in the published report.

The data and formulations used for this determination are published in Embry-Riddle’s publication that is available through the university. Dr. Barr would like to see the Aerospace Economic Index included in market reporting by business channels as he believes it can be a true bellwether for the economy.




“Space Coast workers anxious ahead of Obama's speech today on NASA's future

ByEliot Kleinberg

Palm Beach Post Staff WriterSmall Type

COCOA BEACH — Back when the guys with the Right Stuff first started bellying up to the bar here at the Surf a half century ago, the Space Coast wasn't called that. It was just a sparse stretch of U.S. 1, dotted with gas stations and mom-and-pop motels.

Photos of the original Mercury astronauts hang at the entryway to this beachfront restaurant and bar — there's John Glenn in 1962, his motorcade passing right by the Surf — as do the faces of those who followed them, through Gemini, Apollo, and, for the last three decades, the Space Shuttle.

But the last shuttle flight is set for this fall. After that? For the folks knocking back brews, this isn't Happy Hour; more like Anxious Hour. They want to know whether they'll have a job next year.

President Obama comes to town today to deliver specifics.

Parts of the plan were reported Wednesday; they say the White House will back off on the idea, outlined in February in its proposed budget, to shelve the Orion rocket, which was to replace the shuttle.

Orion still won't go to the moon. Instead, it will be used as an unmanned emergency vehicle that would lash up alongside the International Space Station as an emergency return vehicle, the White House said.

And NASA would put billions into research to speed up development of a massive rocket that would send people and cargo to deep space, although it didn't say where. It would pick a design by 2015.

"A rocket without a destination would be a giant leap backward for America's space program," Florida U.S. Sen. George LeMieux, who's submitted a bill to preserve the Constellation program, said Wednesday. "Promises to make decisions later will surrender our leadership in manned space exploration."

The Obama space plan still relies on private companies to fly to the space station. Russia currently charges about $50 million per passenger. The commercial space industry on Tuesday released a study saying that would result in 11,800 jobs. But Space Coast groups have estimated a net local job loss of anywhere from 7,000 to 23,000.

The White House says its new plan would mean 2,500 more Florida jobs than the one outlined by then-president George W. Bush and since discarded by the White House.

On Wednesday, U.S. Rep. Suzanne Kosmas, whose district includes the Kennedy Space Center and has submitted a bill that would give space workers incentives to convert to teachers, called the new plan "an encouraging development."

But on Monday, Marion Blakey, head of the Aerospace Industries Association, told the Forum Club of the Palm Beaches, "The best and the brightest are not going to hang around on the assumption that at some point our space program is going to start up again."

Meanwhile, thousands of space workers, politicians and leaders of local businesses held a "Save our Space" rally in Cocoa on Sunday.

Bob Sirianni, who sells real estate and vacation properties, moved from Pittsburgh two decades ago. He doesn't know this place when there wasn't a space shuttle. The day he and his family arrived, he says, they unpacked and "left that afternoon for the Kennedy Space Center."

It's an economic triangle; the economic clout of the space workers, the general tourism that dates back to the area's early surfing days, and the tourism directly from the space program, which can draw tens of thousands for a single shuttle launch.

And, Sirianni said, finishing off his Grey Goose martini, if the tourists who still come see empty storefronts, they'll be turned off and plan to go elsewhere.

"Everybody's going to get hurt," said Gene Kolsch, head waiter for two decades. "There's no doubt about it."

Neil Armstrong, the first man to step on the moon, as well as other veteran Apollo astronauts and former senior NASA managers, had attacked the February Obama plan, saying it meant the death knell for America's leadership in space.

More than two dozen Apollo-era veterans signed a letter calling the plan a "misguided proposal that forces NASA out of human space operations for the foreseeable future."

And in an open letter Monday from Space Florida, the Florida AFL-CIO, the Associated Industries of Florida and the Economic Development Commission of Florida's Space Coast said, in part, "your administration's commitment to our nation's overall human spaceflight endeavor, as well as tens of thousands of jobs related to the space industry in Florida and across the country, are in question."



 


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"The best and the brightest are not going to hang around on the assumption that at some point our space program is going to start up again." Marion Blakey, AIA

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