AIA Wants More Aerospace Exports, Ex-Im Bank Solution, End to Sequester Threat

Aerospace Industries Association (AIA) President David Melcher laid out his organization’s priorities for next year at a luncheon today.  Among his top 10 priorities are clearing the way for aerospace and defense exports, resolving the quorum issue at the Export-Import (Ex-Im) Bank, and repealing the 2011 Budget Control Act (BCA) and its sequester provisions.

Lt. Gen. Melcher (Ret.) took the reins of AIA after a 32-year career in the Army and 7 years in industry.  After leaving the Army in 2008, he joined ITT Corporation and became the first chief executive of Excelis after it was spun off from ITT in 2011.  He remained there through its acquisition by Harris Corporation in May 2015.  A month later he became President and CEO of AIA, succeeding Marion Blakey, who is now head of Rolls Royce North America.  

Melcher said that he met with Donald Trump during the campaign to discuss AIA’s position papers on key issues for the next President (as well as with senior advisers to the Clinton campaign).  He said the President-elect “listened carefully to our views on the need to beef up investments in defense capabilities and to spur high tech innovation.”  Melcher praised Trump’s pick of Gen. James Mattis (Ret.) as his nominee for Secretary of Defense: “I count General Mattis as a friend and I think he’s an outstanding choice.”

The bulk of Melcher’s comments were directed toward the aerospace and defense industries broadly, rather than specific agencies or programs.  Exports were a major theme. 

AIA is seeking a resolution to the stalemate over the Export-Import Bank.  AIA was one of the leaders in getting Congress to reauthorize the bank, but has been unable to convince the Senate to confirm new members of its Board.  The Bank should have five Board members and three are required as a quorum to approve loans of more than $10 million.  There are only two Board members now.  Senators who oppose the Bank are blocking new nominees, hamstringing what it can do.

He also called on the government to ease barriers to exports of Unmanned Aircraft Systems (UAS) created by the Missile Technology Control Regime (MTCR).  He asserts that  the United States could lose its leadership “in a potential $80 billion market.”

A “21st Century Commercial Space Competitiveness Strategy” that encourages “commercial space export opportunities” that will “ensure we have a healthy space industrial base” is also needed, he said.

Getting rid of the 2011 BCA and its spending caps is another priority.   “BCA has set a spending level far below what’s required to secure our nation and our allies…. Let’s fund our military based on clear eyed assessments of where power and presence are necessary, and not tie this to arbitrary limits.”

Melcher laid out four “megatrends” identified by senior representatives of AIA member companies — a veritable who’s who of the U.S. aerospace industry ranging from Aerojet Rocketdyne to Virgin Galactic (but with notable exceptions like SpaceX and Blue Origin).   These megatrends are “strong headwinds that affect policy making in Washington” and need attention:  the state of deficit politics, smart regulations, U.S. leadership in a global economy, and transition to a digital global economy.

The United States needs to “make a conscious decision to invest in national security, civil space, aeronautics and 21st century air transportation systems” if it wants to be innovative, job-creating, and inspirational.