By Marina Malenic
LONDON–Executives of the largest U.S. aerospace company expressed concern this week that diminishing expenditures on research and development for Defense Department programs and technologies could harm the defense industry’s viability in the long run.
Twenty years ago, the sector saw more than 10 new Pentagon development programs emerge, said Dennis Muilenburg, president and CEO of Boeing‘s [BA] defense business.
“If you look back over the last decade, that’s dwindled down to perhaps a handful,” he said. “And if you look forward over the next 10 years, there are very few large-scale development programs that are just getting under way.”
Muilenburg was speaking at a press conference ahead of the Farnborough Air Show, which began yesterday outside London.
Boeing is funding some technologies on its own to maintain critical skills and work force, but such a business model is not indefinitely sustainable, said Chris Raymond, the company’s vice president for business development.
And because the overall U.S. defense budget is expected to stop growing dramatically in the coming years, Boeing plans to increase international sales from approximately 16 percent of defense revenues currently to 25 percent starting in the next fiscal year, company executives have said recently. Muilenburg said reform of what many in industry see as an outdated U.S. export control regime is essential to achieving that goal.
“We do believe that streamlining the export process is an important part of the equation,” he said.
The Obama administration has expressed a commitment to overhauling Cold War-era rules on exports and streamlining the system for selling sensitive U.S. technology abroad. Officials have recently announced a plan to create a new agency that will merge export licensing activities at the State and Commerce departments under a board of directors reporting directly to the president (Defense Daily, July 1).
Meanwhile, Boeing hopes to sell 30 more C-17 Globemaster cargo haulers internationally over the next five years to keep its production line running through at least 2013. That number would include the 10 aircraft India has requested, said Mark Kronenberg, vice president of international business development.
Muilenburg said Boeing is also in discussions with the British Royal Air Force, as well as potential buyers in the Middle East and Asia-Pacific regions. He declined to name the countries involved in the talks.
The U.S. Air Force has said that it has excess airlift capacity. Congressional supporters of the Pentagon’s plan to end its C-17 procurement said recently that fiscal concerns could finally spell an end to lawmakers’ multiyear streak of adding unwanted C-17’s to the department’s annual weapons buy (Defense Daily, July 14).