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AIA’s Douglass calls for U.S. relaxation of export controls

 - June 18, 2007, 7:29 AM

The retiring president and CEO of the Aerospace Industries Association of America, John Douglass, said modifying the U.S export control system could double the trade surplus from the present record $55 million. “We have to get rid of a Cold War philosophy that puts many civil products in the military domain,” he told Aviation International News in an exclusive interview.

Douglass, who will retire on December 31 after almost 10 years at the helm of AIA, said relaxing the controls would lead to a commensurate increase in U.S aerospace employment “and make our exportable military products less expensive because there could be far more use of interchangeable equipment between the civil and military sectors.”

He considers the failure to change the export laws one of his main regrets after a period in office described as one of “exceptional leadership” by AIA chairman William Swanson. Douglass welcomes the Bush administration’s softening of its stance on the UK on a bilateral export deal but worries it will run into opposition from the “hard guys” in Congress.

During his tenure Douglass has presided over a doubling of membership in the AIA, to 103 companies, while the Supplier Management Council has grown from 24 to 172 members. “That means we’ve got a lot more political strength in Washington and we find we’re being listened to a lot more,” he remarked.

One of the resulting successes has been to get the administration and Congress to act on aerospace recruitment, which was in danger of suffering severe losses as critical personnel retired but weren’t being replaced. Douglass pointed out that today’s workforce amounts to 630,000 manufacturing employees, “which is one quarter of one percent of the U.S population. They brought in a $55 million trade surplus last year, which makes them a very valuable part of it.”

Although Douglass plans a move into politics after leaving the AIA, on the Democratic side, he admits the Republican Bush administration “has been good to the industry. In 2000, for example, we asked for a big increase in R&D funding and they gave us more than we asked for, in fact they gave us $200 million more than they’d given the Clinton administration over six years.”

Douglass also provided a steadying influence during the industry slump that followed the 9/11 attacks, presiding over the creation of the Commission on the Future of the U.S Aerospace Industry, which led to a number of major initiatives, including a push for a new U.S.-wide, and eventually global, air traffic management system. Other outcomes included the decision to replace the Space Shuttle as part of a total reexamination of U.S space policy.

The U.S industry now “knows where it is and where it wants to go,” said Douglass, with the exception of one item: planning for the future of national security. “We’re too focused on Afghanistan and Iraq. But what’s our long-term strategy? We need to have a flexible, responsive national security system,” he said, adding that it is also a “long-term issue for the industry” in terms of what equipment it will be asked to provide for the defense of the U.S.

“The military-industrial complex may seem to be stronger than ever,” said Douglass, “but there is a degree of fragility, because as the industry has consolidated, more and more portions of it have come down to only suppliers, which brings up competition issues.”

He proposes that as a result of cooperation between the U.S and its closest European allies may have to be extended to include the European industrial base. “But of course that will have to wait until the export licensing issue is resolved,” he added.

Cynics might note that the traditional mudslinging between the U.S. and European aerospace industries has slackened as Boeing’s fortunes have improved and Airbus confronts financial problems and severe delays.

Douglass admits, “We’re not picking a fight this year,” but points also to the likely resolution of the dispute by the World Trade Organization before the end of the year.
He said the outcome will lead to a new set of rules that will have to be observed by all countries wishing to get into the aerospace business. “It will provide guidelines on government assistance that everyone will have to comply with,” Douglass concluded.