U.S. Defense
Modernization
Readiness Now and for the Future
Aerospace Industries Association
1000 Wilson Boulevard, Suite 1700
Arlington, VA 22209-3928
703-358-1000
www.aia-aerospace.org
A Report and Recommendations
Prepared by the Aerospace Industries Association
April 2008
An AIA Report and
Recommendations:
U.S. Defense
Modernization
Readiness Now and for the Future
This study was produced under the direction
and leadership of the Aerospace Industries
Association’s National Security Council and the
Defense Policy and Budget Committee.
Introduction: Defense Budget
Challenges Ahead
The Aerospace Industries Association is deeply
concerned that three ongoing developments
within the defense budget will give U.S.
decisionmakers far less latitude and flexibility to
respond to long-deferred defense modernization
and recapitalization needs and requirements.
They are:
Inexorable growth in operations and
maintenance costs.
Rising personnel expenditures, including
future costs of recent increases in active
duty end strength.
Simultaneous needs for reset and
recapitalization.
These three developments, working in
combination, will require the next U.S.
administration to carefully formulate a
national strategy for sustained, adequate
and balanced resourcing for national
defense capabilities.
We present here an AIA Report on U.S.
Defense Modernization, a study and
recommendations based on our analysis
of this important national security matter.
U.S. Defense Modernization
“Modernization of
key national defense
capabilities will
require a generationlong national security
investment strategy
providing sufficient
and stable resourcing
to recapitalize all
defense sectors,
including aerospace.”
The preamble to the U.S. Constitution declares that
one of the fundamental purposes for which our form
of government was adopted is “to … provide for the
common defense.” The world of the 21st century is
increasingly dangerous — no nation can isolate itself
from the expansive set of threats emanating from
around the globe. Consequently, our national defense
must be an abiding concern and funding priority in
the years ahead.
For several generations America’s national security
has depended on sustained military superiority.
Whether monitoring suspected terrorist camps,
moving relief supplies to disaster areas or enforcing
no-fly zones, the United States has long relied on
possessing the world’s most advanced aerospace
systems. Manned flight was invented here, and air
power is now an enduring national asset.
That asset, however, is now in serious danger. Across
the fleet, aircraft are aging as never before. All of our
military services are in need of modernization and
recapitalization as a result of deferred procurement
following the fall of the Soviet Union. But the need
is particularly acute for the air arms of our military
forces. Emerging national security challenges of
the 21st century require renewed national focus
on the relevance of air power and attention to
accomplishing long-delayed defense modernization.
Upgrading key national defense capabilities and
maintaining readiness will require a generation-long
national security investment strategy that provides
sufficient and stable levels of resources to enable the
recapitalization of all our defense sectors, especially
aerospace.
At the same time, the political inheritance of the
next administration will be the Global War on
Terrorism (GWOT) and the need to continue devoting
sufficient resources to prevail in that conflict.
Given the likelihood of a growing competition for
national security resources, it is critical that defense
decisionmakers understand the nature of the crisis
and accept the implications that future resource
decisions will have on the totality of the U.S. defense
establishment and the defense industrial base
that supports it.
The forthcoming resource competition will pose
critical defense policy and planning choices for the
next administration. The United States has a long
history of demonstrated ability to fund defense at
much higher levels than its current 4 percent share
of Gross Domestic Product (GDP). However, federal
deficits, growing entitlement programs, pent-up
demand for other domestic spending and the cost
of the GWOT will place increased pressure on future
defense spending.
Indeed, there could be domestic political pressures
to level off, if not pull back, defense spending as
U.S. involvement in Iraq is reduced. In a larger
sense, national budgetary forces are present
that, if not addressed, will structurally inhibit
our ability to effectively supply the modernized
military equipment essential for maintaining our
technological advantage over the long term.
AIA is deeply concerned that three ongoing
developments within the defense budget will give
U.S. decisionmakers far less latitude and flexibility to
respond to long-deferred aerospace modernization
and recapitalization needs and requirements. The
three are:
I nexorable growth in operations and
maintenance costs.
ising personnel expenditures, including
R
future costs of recent increases in active
duty end strength.
imultaneous needs for reset and
S
recapitalization.
These three developments, working in combination,
will require the next administration to carefully
formulate a national strategy for sustained,
adequate and balanced resourcing for national
defense capabilities.
AIA believes that while the investment resources
proposed in the fiscal 2008-2013 Future Years Defense
Program (FYDP) represent a modest start towards
assuring future national security needs, the FYDP
itself doesn’t effectively address growing structural
challenges within the U.S. defense budget or the
mounting modernization and recapitalization bills
coming due as a result of years of deferred investment.
During the past 45 years, investment spending has
gone through peaks and valleys — exhibiting a cyclical
pattern largely consistent with that of overall defense
spending. Twice during this period investment spending
has dipped significantly — with the end of the Vietnam
War and the end of the Cold War. These were periods
in which defense spending also fell in real terms.
Investment spending rose during the late Cold War
years of the 1980s and post-9/11 period as defense
spending itself was increased and sustained politically.
Despite recent increases, base budget procurement is
still running well below the historic averages shown
prior to the end of the Cold War (see Figure 1 and
Table 1).
The procurement account dropped in real terms for
a 12-year period between fiscal 1986 and fiscal 1997,
only to slowly rise again beginning in fiscal 1998.
Since then, there have been moderate increases in
investment spending, heavily influenced recently by
growth in RDT&E and transformational programs.
These increases — while welcome — have come
against a smaller investment spending base that has
not kept up with long-term recapitalization demands.
Congressional Budget Office analysis indicates the need
for steady procurement funding of $120–150 billion per
year, in constant dollars, to modernize the current force.
While the investment accounts have been increasing,
procurement is still well below the required level and
comprises only about 20 percent of the defense budget.
There still is much catching up to do that will require
additional resources well above the current level.
This brief analysis underscores that the health of
investment spending is highly dependent on the
overall level of defense spending. It is our view
that the next administration must be much more
aggressive in bolstering out-year defense funding
projections, which have been constrained to meet tax
policy and deficit reduction objectives at the expense
of defense modernization requirements.
“DoD requires steady
procurement funding
of $120–150 billion
per year, in constant
dollars, to accomplish
modernization of the
current force.”
Now is the time to stabilize defense spending and
the investment portfolio and focus on modernization
and recapitalization for the future. The next
administration should focus priority attention on this
issue and also show increased diligence in addressing
the resource challenges within the defense budget
that could negatively impact force modernization.
Funding Challenges for
Defense Modernization
Even if the country were to increase defense spending,
the next administration will have to address emerging
resource challenges internal to the DoD budget. Several
ongoing trends portend an historic and critical shift
in DoD’s spending priorities and, ultimately, the size
and composition of the defense investment portfolio.
They must not be permitted to cascade uncontrollably
to the point that they inhibit our ability to sustain a
robust defense acquisition program and a responsive
industrial base.
The fact is, however, that these trends are already
observable. Funding for investment is gradually
being squeezed from the baseline defense budget as
military personnel and operations and maintenance
costs take an increasing share of defense resources.
By 2013, over a 25-year period, the operations and
support element of the budget will have more than
doubled — faster than the growth in the defense
budget itself. In contrast, investment will increase by
slightly more than 50 percent, well below the growth
path of the general budget.
These growth trends translate into a structural shift
in which investment will decline to only 35 percent
Figure 1. DoD Investment Funding in Constant FY2008 Dollars, Excluding GWOT Supplementals
Procurement
RDT & E
Korean War
250
9/11
200
Reagan Era
Buildup
WWII
F
Y
Vietnam
150
Post-Cold War
Deferred
Procurement
0
8
$
100
B
50
08
05
FY
02
FY
99
FY
96
FY
93
FY
90
FY
87
FY
84
FY
81
FY
78
FY
75
FY
72
FY
69
FY
66
FY
63
FY
60
FY
57
FY
54
FY
51
FY
48
FY
FY
FY
45
0
Source: Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for FY2008, March
2007, Table 6-8, pp. 113-115. GWOT Supplementals are excluded.
of the defense budget by 2013, well below the 41
percent level of fiscal 1988 (see Table 2).
defense plans and in budget guidance to the next
Quadrennial Defense Review (QDR).
This isn’t a mere percentage shift. It translates
into tens of billions of dollars migrating from the
investment portfolio into operations and support
(O&S) costs. These trends suggest an ongoing,
permanent change in composition of the defense
budget, one in which operations and support
consumes an ever-increasing share of the defense
budget. Continuing this trend beyond current
projections will make it even more difficult for
defense planners to adequately resource the
investment spending upon which our military
superiority and technological edge depends. The
next administration should address this serious
future resource challenge in developing long-range
The United States cannot afford to pull back
investment spending as it has done during past postwar defense drawdowns — the nature of the security
environment strongly mitigates against taking
such a risk during what may be a generation-long
war on terrorism. Instead, the next administration
should seek to reform DoD business management
practices and processes to ensure that they support,
rather than compete with, long-range defense
modernization and recapitalization requirements.
Inexorable Growth Trends in Operations and
Maintenance (O&M) Costs. For more than 40 years we
have seen steady growth in defense O&M costs above
the rate of inflation, despite continued efforts of
several administrations to constrain that growth (see
Figure 2). Future sources of further O&M cost growth
include rapid escalation in health care costs, growth in
non-capital purchases (supplies and material, energy,
facilities and equipment repairs), installation O&M
backlogs, improved pay for DoD civilians, O&M costs
associated with growth in active duty end strength and
funding for equipment reset. Left unchecked, these
inexorable O&M growth trends will generate more
funding demands than the current FYDP can support.
Therefore, unless the defense top line rises accordingly,
funding will likely have to migrate from materiel
investment to O&M to cover the cost growth.
AIA believes that the next administration, in order to
minimize pressures on the investment portfolio, must
make a dedicated effort to contain O&M costs and
eliminate the root causes of O&M cost growth above the
rate of inflation. A concerted effort should be made to
develop a long-term plan to reduce O&M costs by a few
percent annually by promoting DoD-wide management
efficiencies (including expansion of competitive
sourcing, performance-based logistics, performancebased agreements, service contracting, more energyefficient systems, etc.) and adopting more integrated
supply chain management. For example, DoD studies
indicate that sustainment accounts for up to 75 percent
of a weapon system’s life cycle cost and that broadly
applying government/industry partnerships integrating
cost containment principles across all phases of
weapon system life cycles could reduce O&M costs by
at least 20 percent.
Rising Personnel Expenditures. The recent decision to
increase the active duty end strength of the Army and
Marine Corps through fiscal 2012 (65,000 and 27,000,
respectively) was largely related to the increased
operating tempo in the wars in Iraq and Afghanistan.
The number of Army Brigade Combat Teams (BCTs)
will increase from 42 to 48 and Marine Expeditionary
Forces (MEF) will grow from 2.5 to 3.0 balanced MEFs.
The Congressional Budget Office (CBO) estimates the
total incremental cost of the end-strength increase
between fiscal 2007 and fiscal 2013 as being $108 billion
above previously planned levels (see Table 3). CBO also
identified the overwhelming majority — more than 75
percent — of the costs as unrelated to the investment
portfolio (military personnel, O&M,
military construction and family
housing). For this reason, the
fiscal 08-13 FYDP was increased to
accommodate these end-strength
costs. Without such an increase,
the modest investment growth
path that was laid out could not
have been sustained.
Table 1. FY1965–2010 Investment Spending, in Billions of Constant FY08 Dollars
FY
1965
FY
1970
FY
1975
FY
1980
FY
1985
FY
1990
FY
1995
FY
2000
FY
2005
FY
2010
Procurement
87.5
89.8
56.5
77.7
162.5
114.9
55.4
65.4
103.7
110.0
Proc as
% DoD
23.2%
20.4%
16.6%
21.0%
30.2%
24.2%
15.1%
17.7%
19.6%
22.1%
End-strength increases bring
RDT&E
37.9
36.0
29.0
29.8
54.0
52.8
44.6
46.3
74.1
73.8
with them the added costs of
RDT&E
10.0% 8.2%
8.5%
8.0%
10.0% 11.1% 12.2% 12.6% 14.0% 14.8%
as %
training, health care and force
DoD
modernization associated with the
Invest125.4 125.8 85.5
107.5 216.5 167.7 100.0 111.7 177.8 183.8
expansion of the force. These costs
ment $B
are “must pay” bills and, unlike
DoD
377.3 440.0 339.8 369.4 538.1 474.5 366.1 368.7 528.8 498.0
procurement and RDT&E, are not
Total $B
as amenable to annual funding
Invest33.2% 28.6% 25.2% 29.1% 40.2% 35.3% 27.3% 30.3% 33.6% 36.9%
ment %
adjustments. Consequently, the
DoD
decision to increase active duty
Source: Office of the Under Secretary of Defense (Comptroller), National Defense Budget Estimates for
end strength carries with it added
FY2008, March 2007, Table 6-8.
long-term cost burdens if the
DoD top line is not sustained or
increased — additional end strength ultimately
Table 2. Operations and Support Versus Investment as Percent of
DoD Budget
translates into an increase in fixed personnel costs
in the form of pay and benefits. These increased
FY2008
FY2013
costs must be accommodated via an increasing top
Budget Category
FY1988
Request
Projection
line in order to preclude erosion of investment and,
DoD Budget Total
$283.8B
$483.2B
$548.5B
hence, creation of a hollow force.
Military Personnel
76.6
118.9
145.2
In a volunteer military system, raising and sustaining
larger military forces is more expensive than in
the past. Even after recent increases, however, we
currently have a much smaller military than those
that fought in WWI, WWII, the Korean War, the
Vietnam War, the Cold War and even the Gulf War.
To counter the dangers of the 21st century with
highly capable but historically smaller forces,
the U.S. military must be equipped with modern
hardware that multiplies their force effectiveness
and provides greater reliability and survivability.
Our emphasis should continue to be on leveraging
the application of advanced military technologies to
maintain our superiority. The investment portfolio
should not be viewed as a discretionary bill
Operations &
Maintenance
81.6
165.3
196.0
Operations &
Support (O&S) Total
158.2
284.2
341.2
O&S Percent of DoD
Total
55.7%
58.8%
62.2%
Procurement
80.0
101.7
125.2
RDT&E
36.5
75.1
68.1
Investment Total
116.5
176.8
193.3
Investment Percent
of DoD Total
41.1%
36.6%
35.2%
Source: Office of the Under Secretary of Defense (Comptroller), National
Defense Budget Estimates for FY2008, March 2007, Table 6-8.
payer. Rather, modernization programs should be
resourced and managed in a manner that continues
to foster technological innovation and sustains
military lead-time advantages over our adversaries.
At the same time, U.S. defense planners must
provide for a balanced defense posture across all
services, capabilities and portfolios.
Simultaneous needs for both reset and recapitalization.
The DoD base budget is a peacetime budget.
Base budget expenditures must fit within
annual discretionary spending limits set by the
administration and Congress. Combat operations
in Iraq and Afghanistan, however, are treated as
emergency spending and are not subject to annual
discretionary spending ceilings. These combat
operations currently cost on the order of $170–190
billion per year. Within that total figure, procurement
for war-related replacement of materiel consumed,
destroyed or prematurely worn out by the war in
the fiscal 07 and fiscal 08 supplementals amounts
to $50–70 billion per year. Thus far, supplemental
appropriations to separately fund replacement of
war-related losses have protected the recapitalization
program in the baseline defense budget.
Absent a significant top line increase, any attempt
to fund reset requirements out of the baseline
budget (i.e., without supplementals) would place
tremendous stress on other service investment
needs by forcing absorption of wartime reset and
recapitalization within the normal budgeting process.
Such an approach could ultimately break essential
modernization programs. Thus, reset must be funded
as an increment above baseline defense needs through
supplemental defense appropriations. As former Army
Chief of Staff Peter Schoomaker noted in testimony
before the House Armed Services Committee in June
2006, “Reset is a cost of war … that must not be borne
at the expense of our modernization efforts. We must
not mortgage the future readiness of the force by
focusing our resources solely on current challenges.”
Supplementals should continue as long as necessary
to reconstitute wartime losses of all the services,
especially the Army and Marine Corps. The
current operational tempo in Iraq and Afghanistan
will require continued supplementals for reset
and recapitalization for several years after the
redeployment of U.S. forces.
Figure 2. O&M Costs Per Service Member, in Constant FY2008 Dollars
180,000
GWCT
160,000
1973: Beginning
of All Volunteer
Force
140,000
1967: Buildup to
463,000 US troops
in Vietnam
120,000
100,000
Demobilization
spike
After WW II
$ 80,000
60,000
March 8, 1965:
First US combat
troops (3500
Marines) land in
Vietnam
1975: Fall
of Vietnam
Reagan
Era
Buildup
1991
Gulf War
40,000
20,000
FY
4
FY 5
4
FY 7
4
FY 9
5
FY 1
5
FY 3
55
FY
5
FY 7
59
FY
6
FY 1
6
FY 3
6
FY 5
6
FY 7
6
FY 9
71
FY
7
FY 3
75
FY
7
FY 7
79
FY
8
FY 1
8
FY 3
8
FY 5
8
FY 7
8
FY 9
9
FY 1
FY 93
9
FY 5
9
FY 7
99
FY
0
FY 1
0
FY 3
0
FY 5
07
0
Source: AIA Analysis of data in Office of the Under Secretary of Defense (Comptroller), National Defense Budget
Estimates for FY2008, March 2007, Tables 6-8 and 7-5.
The Role of Air Power in the 2010
QDR and Defense Planning
AIA believes that the United States needs to
conduct within the context of the 2010 QDR a full
reassessment of the proper role of air power as the
most versatile component of national security. The
2006 QDR, with its primary emphasis on irregular
warfare, defeating terrorist networks and weapons
of mass destruction, tilted toward the kinds of
operations currently experienced in Iraq and
Afghanistan. Consideration of needs for the rest of
the broad spectrum of conflict has been minimized,
with procurement planning discussed largely in the
context of a hedge against any potential near-peer
competitor.
The 2010 QDR should assess the appropriate
balance among security challenges, such as
planning for near-peer regional conflicts while
also engaging in the Global War on Terrorism. The
enduring role of air power needs to be thoroughly
re-examined as a part of this assessment. In
particular, the 2010 QDR should re-evaluate the role
of air power in all potential conflict regions.
Modernization of military aerospace should be
done in a manner that eliminates the decadeslong phenomenon in which entire sectors are
out of production and not being modernized.
All military services face substantial aerospace
recapitalization funding challenges in the decade
ahead. Thus, the next administration’s plan should
address modernization requirements across all
key aerospace sectors of all the military services
— airlift, unmanned air vehicles, rotary wing
aircraft, missiles, space launch, precision-guided
munitions and command, control, communications,
computers, intelligence, surveillance and
reconnaissance (C4ISR) systems.
Resource Planning for Aerospace
Modernization
Maintaining U.S. technological superiority and
industrial pre-eminence in military aerospace
requires sustained investment. Air Force Secretary
Michael W. Wynne captured the problem succinctly:
“We’ll take delivery this coming year of about 60
aircraft. With a fleet of about 6,000 aircraft, this
makes a 100-year recapitalization rate.”
Our country’s current path for military aerospace
modernization is not viable. It won’t be possible to fix
the situation without additional, sustained resource
investment over the long term. The investment
requirements for major aircraft procurements,
their support equipment and sustainment are large
— often exceeding several billion dollars annually
for a single major aircraft program and hundreds
of millions for missiles, munitions and space
programs. In particular, the Air Force has a seriously
underfunded aircraft recapitalization program
when gauged against age parameters and mission
requirements (a fleet averaging 24 years old with 14
percent grounded or flying with mission-limiting
restrictions). Aerospace recapitalization is a national security
issue that deserves the attention of the 2008
presidential candidates and the next administration.
In developing a long-range strategy to modernize
the military, AIA recommends the following resource
planning approach:
Sustain a national consensus to adequately fund
national defense capability and readiness as a
high and enduring priority. We live in dangerous
times, and without robust national security there
can be no economic, social or cultural security.
The next administration should support growth
in the DoD top line to adequately fund military
personnel, operations and maintenance, and
modernization of systems and equipment to
provide required capabilities, credible deterrence
and force effectiveness across the full spectrum
of conflict. Investment must not become the bill
10
11
payer for a top line too low or
for operations and support costs
that are insufficiently funded.
Table 3. Incremental Costs of Army and USMC End Strength: Increase
Above QDR 2006 Force Level
Acknowledge that defense
2007
2008
2009
2010
2011
2012
2013
Total
modernization is already
Army - $ ES Level
$4.5B 9.5
12.1
12.9
11.2
10.0
9.4
$69.6B
36K
43K
50K
57K
64K
65K
65K
long overdue. We must not
USAR & ANG/ES
$0.0B 0.8
1.0
1.1
1.3
1.5
0.9
$6.7B
fall into the trap of thinking
_
1.3K
2.6K
3.9K
5.3K
6.8K
9.2K
that our military need be
USMC -$
$2.2B 4.1
5.3
5.7
5.9
5.0
3.5
$31.7B
capable in only that portion
ES Level
9K
14K
19K
24K
27K
27K
27K
of the spectrum of potential
Total/Yr
$6.7B 14.4
18.4
19.7
18.5
16.5
13.9
$107.9B
conflict in which it finds itself
Source: CBO, Estimated Cost of the Administration’s Proposal to Increase the Army’s and the Marine
currently engaged. To meet
Corps’ Personnel Levels, April 16, 2007, p.2
21st century challenges and
sustain our military superiority
in all areas of potential conflict,
Foster innovation and stability in DoD
modernization must be a priority across the
investment planning. This can be best
board. As part of adequately funding national
accomplished by establishing for the fiscal
defense, DoD needs to increase annual
2010 budget submission a Stable Program
procurement spending to a steady state range
Funding Account, similar to that proposed
of $120–150 billion, in constant dollars, simply
by the Defense Acquisition Performance
to modernize an aging, increasingly obsolete
Assessment Panel, for all Acquisition Category
and potentially vulnerable force. Defense
I programs from Milestone B through initial
modernization is the predicate for military
operating capability. A pilot program for
aerospace modernization.
capital budgeting is currently underway in
DoD. The time is right to apply this proposal
Realistically address the growing bow wave
on a broader scale in order to bring enhanced
of modernization requirements in military
budget and program stability to the DoD
aerospace. This should be done by providing
acquisition process.
growth and stability in not only aerospace
procurement but also in RDT&E. Aerospace
Support the concept of a floor for defense
technologies are integral to the electronics
spending. Incorporate into broad national
revolution occurring in military capabilities
budget planning the goal of defense being no
whether they are in aircraft, missiles, precision
less than 4 percent of GDP in order to prevent
munitions or the command and control,
the budget being drawn down to increase
communications, computers, intelligence,
funding for non-defense programs following
surveillance and reconnaissance systems
the eventual withdrawal of forces from Iraq
essential for future combat operations. The
and Afghanistan — the precise time when
next administration should develop a coherent
modernization and recapitalization of our
modernization plan to realistically address
forces will be most critical to our national
aerospace requirements that can last for
security.
decades to come.
AIA will provide extended discussion and support
for these positions for consideration by the next
administration. Also, the association is prepared to
assist the Defense Department by providing data
concerning industrial capacity and industry’s ability
to respond to increased resource investment.
AIA
Member Companies
L-3 Communications
3M Company
LAI International, Inc.
Accenture
LMI Aerospace, Inc.
Ancon Gear & Instrument
Corporation
Aerojet
Lockheed Martin Corporation
Arkwin Industries, Inc.
AeroVironment, Inc.
Lord Corporation
AirLaunch LLC
Martin-Baker America Inc.
Arrow/Zeus Electronics,
A division of Arrow Electronics
Agilent Technologies, Inc.
Meggitt Vibro-Meter Inc.
Allfast Fastening Systems, Inc.
Micro-Coax, Inc.
American Pacific Corporation
MicroSat Systems, Inc.
AmSafe Aviation
McKechnie Aerospace
AMT II Corporation
MOOG Inc.
Astronautics Corporation of
America
Hitachi Consulting
Rubbercraft
Hi-Temp Insulation Inc.
AVChem, Inc.
Sanmina-SCI Corporation
Hobart Machined Products, Inc.
Avnet Electronics Marketing
Hughes Bros. Aircrafters, Inc.
Sample Machining, Inc. dba
Bitec
Ballistic Recovery Systems, Inc.
IDD Aerospace Corp.
Banneker Industries, Inc.
Blenheim Capitol Services
Industrial Metals International
LTD
Brogdon Tool & Die, Inc.
Infotech Enterprises America
Sechan Electronics, Inc.
Brookfield Atlantic
Inmedius
Brush Wellman Inc.
Integrated Sourcing
SELEX Sensors and Airborne
Systems US Inc.
BTC Electronic Components
ION Corporation
Burton Industries Aerospace
Heat Treating, Inc.
JRH Electronics, LLC.
AUSCO, Inc.
B&E Group, LLC
The NORDAM Group
BAE Systems, Inc.
Barnes Aerospace
Northrop Grumman
Corporation
B/E Aerospace, Inc
NYLOK Corporation
The Boeing Company
Omega Air Inc.
Celestica Corporation
Oracle USA
California Manufacturing
Technology Consulting
Click Bond, Inc.
Pall Aeropower Corporation
Capo Industries Inc.
Click Commerce
Parker Aerospace
Celltron Inc.
Cobham
Pinkerton Government
Services, Inc
Chandler/May, Inc.
Crane Aerospace & Electronics
Curtiss-Wright Corporation
Curtiss-Wright Controls
Systems, Inc.
Metal Improvement Company
Dassault Falcon Jet Corporation
Doncasters, Inc.
DRS Technologies, Inc.
Ducommun Incorporated
Proficiency Inc.
Raytheon Company
Remmele Engineering, Inc.
Rockwell Collins
Rolls-Royce North America Inc.
RTI International Metals, Inc.
Satyam Computer Services Ltd
Renaissance Services
Athena Technologies, Inc.
National Machine Group
National Machine Company
National Aviation Products,
Inc.
National Technical Systems
PRIMUS Technologies
Corporation
Heartland Precision Fasteners
Aerospace Plating Company
Astronic
Natel Engineering Co., Inc.
Computer Sciences
Corporation
REMEC Defense & Space,
Inc.
Rodelco Electronics
Corporation
Andrews Space
Aurora Flight Sciences
HDL Research Lab, Inc.
Heizer Aerospace
Analytical Graphics, Inc.
ATK
Harvard Custom
Manufacturing
Cherokee Nation Distributors
Cincinnati Machine, A UNOVA
Company
CMC Electronics
Coalition Solutions Integrated,
Inc.
KPMG LLP-Risk Advisory
Services
Kreisler Manufacturing
Corporation
Kulite Semiconductor Products,
Inc.
Meyer Tool Inc.
Microsemi Corporation
Mid-State Aerospace Inc.
Consolidated Precision
Products
Morris Machine Company, Inc.
Mil Spec Sales Co.
MPC Products Corporation
Eaton Aerospace
SITA
Cytec Engineered Materials
Eclipse Aviation
Dassault Systems of America
EDS
Space Exploration Technologies
Corporation
Elbit Systems of America
Sparton Corporation
Data Conversion Laboratory,
Inc.
Embraer Aircraft Holding Inc.
Spirit AeroSystems
Dayton T. Brown Inc.
O’Neil & Associates, Inc.
Erickson Air-Crane
Incorporated
Textron Inc.
Delphi Corporation
Ohio Aerospace Institute
Timken Aerospace
Transmissions, LLC Purdy
Systems
Designed Metal Connections
Orion Industries
Doyle Center for
Manufacturing Technology
P3-North America, Inc.
United Technologies Corporation
Hamilton Sundstrand
Pratt & Whitney
Sikorsky
DynaBil Industries, Inc.
PCA Aerostructures
East West Associates
PCC Airfoils, LLC
EDAG Inc.
Vought Aircraft Industries, Inc.
Electronic/Fasteners, Inc.
Performance Software
Corporation
Woodward Governor Company
Emhart Teknologies, A Black &
Decker Company
Perillo Industries, Inc.
Plexus Corporation
General Electric Company
AIA Associate
Member Companies
Endicott Interconnect
Technologies, Inc.
GKN Aerospace
ADI American Distributors, Inc.
Goodrich Corporation
AirBorn Operating L.P.
Exotic Metals Forming
Company LLC
W.L. Gore & Associates, Inc.
Air Industries Machining
Corporation
Evergreen International
Exostar LLC
Flextronics International USA
FlightSafety International Inc.
General Atomics Aeronautical
Systems, Inc.
General Dynamics Corporation
Groen Brothers Aviation, Inc.
Harris Corporation
Hawker Beechcraft Corporation
HEICO Corporation
Hexcel Corporation
HITCO Carbon Composites
Honeywell Aerospace
IBM Corporation
ITT Corporation
Kaman Aerospace Corporation
Airfasco Industries, Inc.
Servotronics, Inc.
Sigma Metals, Inc.
Signal International
Southern California Braiding
Company
Spectralux Corporation
Spirit Electronics, Inc.
Science Applications
International Corporation
Esterline Technologies
Service Steel Aerospace
Spincraft
DuPont Company
ESIS, Inc.
Senior Aerospace
McCann Aerospace Machining
Corporation
Millitech, Inc.
Crestwood Technology Group
SEAKR Engineering
M/A-COM, Inc.
Co-Operative Industries
Defense, LLC
CPI Aero, Inc.
Sea Air Space Machining &
Molding
Navigant Consulting, Inc.
New Breed Corporation
NMC Group, Inc.
Nor-Ral Plastics Inc.
Norfil Manufacturing, Inc.
Parkway Products, Inc.
PGM of New England, LLC
Starwin Industries
Tedopres International, Inc.
TEK Precision Co. Ltd
Telephonics Corporation
Therm, Inc.
Thermal Solutions, Inc.
TIGHITCO, Inc.
Tiodize Co., Inc.
TMX Aerospace
Tri Polus Inc.
TTI, Inc.
TTM Technologies
TW Metals
UGS
UMA, Inc.
Unicircuit Inc.
United Performance Metals
Universal ID Systems, Division
of Commerce Overseas
Corporation
University of Tennessee –
Aerospace Defense Clearing
House
Unlimited Innovations
Vishay
Plymouth Extruded Shapes
Vulcanium Metals
Incorporated
Plymouth Tube Company
Waer Systems
Powerway, Inc.
Welding Metallurgy, Inc.
Fenn Technologies
Precision Gear
The Ferco Group
Precision Aircraft Machining
Company
West Cobb Engineering & Tool
Co. Inc.
ENSCO, Inc.
Albany Engineered Composites
Ferguson Perforating and Wire
Company
Alcoa Fastening Systems
Forrest Machining, Inc.
Alken Industries Inc.
Allegiant Global Services, LLC
Frontier Electronic Systems
Corporation
Allen Aircraft Products, Inc.
GEAR Software
American Brazing
Greene, Tweed & Company
AMETEK Aerospace & Defense
G.S. Precision, Inc.
Anaren Microwave, Inc.
GuardianEdge Technologies
H&S Swansons’ Tool Company
Precision Machine &
Manufacturing Co.
The Wharton School –
Executive Education
Wind River Systems
Precision Tube Bending
Windings, Inc.
PRTM Management
Consultants, LLC
World Graphics, Inc.
PTC
QuEST
Radant Technologies, Inc.
Ranal
Xerox Corporation
X-Ray Industries
XyEnterprise
Yarde Metals
The following is a list of images used in this report:
Cover: top row (l. to r.)
• Next-Generation bomber (Boeing artist’s rendition)
• UH-60 Black Hawk helicopter (U.S. Army photo)
• Predator B unmanned aircraft (Courtesy of General Atomics
Aeronautical Systems, Inc. All rights reserved.)
center row (l. to r.)
• Arleigh Burke-class guided missile destroyer (U.S. Navy photo)
• F-22 Raptor fighter (U.S. Air Force photo)
• C-17 Globemaster III transport (U.S. Air Force photo)
bottom row (l. to r.)
• Stryker armored vehicle (U.S. Army photo)
• F-35 Lightning II fighter (Lockheed Martin photo)
• Global Positioning System 11R-M satellite (Lockheed Martin
artist’s rendition)
Pg. 2:
F-35 Lightning II fighter (Lockheed Martin photo)
Pg. 4:
B-2 Spirit bomber (U.S. Air Force photo)
Pg. 6:
top to bottom
• Seawolf-class nuclear-powered attack submarine (General Dynamics
Electric Boat photo)
• Atlas V rocket (United Launch Alliance photo)
Pg. 8:
top to bottom
• U.S. Navy F/A-18C fighter (U.S. Navy photo)
• CV-22 Osprey tiltrotor (Bell Boeing photo)
• USS Enterprise nuclear-powered aircraft carrier (U.S. Navy photo)
Pg. 10:
top to bottom
• C-130J transport (Lockheed Martin photo)
• Shipboard Combat Direction Center (U.S. Navy photo)
• Patriot missile launcher (U.S. Army photo)
The Aerospace Industries Association of America
The Aerospace Industries Association of America
(AIA) was founded in 1919, only a few years after
the birth of flight.
Today, some 270 major aerospace and defense
companies and suppliers are members of
the association, embodying every hightechnology manufacturing segment of the
U.S. aerospace and defense industry from
commercial aviation and avionics, to manned
and unmanned defense systems, to space
technologies and satellite communications.
AIA represents the nation’s leading
designers, manufacturers and providers of:
Civil, military, and business aircraft
Helicopters
Unmanned aerial vehicles
Space systems
Aircraft engines
Missiles
Materiel and related components
Equipment
Services
Information technology
Aerospace Industries Association
1000 Wilson Boulevard, Suite 1700
Arlington, VA 22209-3928
703-358-1000
www.aia-aerospace.org