Q&A with AIA’s Fred Downey

US trade lobbying group the Aerospace Industries Association launched an interesting ad campaign today aimed at the incoming Barack Obama White House. The message: Don’t break a healthy defense industry in order to fix an ailing economy.

I talked to Fred Downey for a quick feature I’m writing based on the ad campaign. Downey recently joined AIA as vice president of national security, who previously served as the defense specialist on the staff of Senator Joe Lieberman.

THE DEW LINE: This is a very proactive move on your part, to come out with an advertising campaign before the new administration takes office. There’s so much uncertainty out there about what could happen, with the change in administration and the economic crisis. How concerned are you that defense could become a bill-payer for the economy?

DOWNEY: There’s noquestion that there’s a huge economic issue laying out there. … We think that oneof the things they shouldn’t do is cause harm to an economic engine that’srunning well in order to shore up those that are not. There are things they cando that can make that engine stutter or even jump the track. That’s a bad thingfor national security, number one. And it’s bad for the overall economy, number2.

TDL: The Obamaadministration will have to make a couple of quick decisions on key programs,like the F-22 and the C-17. Are your concerns focused on those programs or arethey broader than that?

DOWNEY: It’s broaderthan that We don’t take a position on a specific program. What I’m thinking ofis more along the lines is what happened at the demise of the Soviet Union. Some people declared a peace dividend. We can take moneyfrom defense for these other worthy needs. We believe here that it’s absolutelyimportant to have stability and predictability in the defense program side …that the overall level of defense spending needs to stay around the 4% levelthat we’ve been advocating for a while. There needs to be stability andpredictability in procurement funding … settle in the range of $120-$150billion on annual basis

TDL: Some peoplewould point to the Government Accountability Office report last spring that catalogedmassive budget overruns affecting a bunch of defense programs. They might saythat makes more sense to spend any extra dollar of taxpayer money in more productiveand efficient sectors of the economy, and where there’s not such a high-chancethat it could be wasted. How would you answer someone who raised that argument?

DOWNEY: I’d saytwo things. There clearly is inefficiencies in the acquisition system and theyneed to be fixed. But that doesn’t translate into free money for something else…. In point of fact that means military programs that are adversely affected andspecifically jobs that are at risk … If you’re worried about rising unemployment,that’s probably not something you want to do.

TDL: Back in the summer, the AIA briefed the Obama and McCain campaign staffs on the industry’s 4% spending recommendation. How was that message received by Obama’s team, in particular?

DOWNEY: The response was positive. The Obama team recognized that defense can’t be a bill payer for the rest of the economy. They recognized there are real and legitimate defense requirements and they need to be funded. The Obama team at the time was not interested — and rightly so — in crafting a detailed budget. The reality is that if they won — as they did — they fully intended to do a strategic review and review programs in that light. …We believe they should not look for ways to take money to apply it to somewhere else regardless to the strategic concerns or the economic concerns.

When you’re wrestling with a bunch of alligators, the long-term goal of draining the swamp seems to fade into the future and we just want to remind them while they’re dealing with alligators not to forget the long-term problem.


One Response to Q&A with AIA’s Fred Downey

  1. airplanejim 2 December, 2008 at 9:08 pm #

    I believe we have two distinct problems with cost overruns. While large programs are decided on a multitude of criteria, the overwhelming perception is “cost is king”. Since the government has historically covered cost overruns on large and “popular” programs, there is reason for the manufacturers to understate cost to win the program and manage the damage for cost overruns as they occur. The other problem is called “requirements creep”. Once a program in bid and won, the military come in and add all kinds of requirements that were never requested nor could be foreseen. I once worked for a fighter manufacturer who said they never built more than two aircraft that were the same due to government changes. The solution is a disciplined system that will cancel overrun programs and have the manufacturer build what was bid in the RFP. Any government afterthoughts (changes) be funded and bid on separate contracts.

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