Flat Spin

Le Bourget 2009 should have been festive event as it passed a major milestone in its history–it has been 100 years since the first Paris aerospace salon. But beyond the t-shirts, baseball caps, etc. that marked the occasion there were few signs of celebration. (Because of some disruptions in the show’s two-year rotation due to the First and Second World Wars this 48th expo–rather than the 50th that will take place in 2013–marked 100 years since the very first Le Bourget in 1909.)

Two years ago in Rio de Janeiro at the Latin American Defense and Aerospace (LAAD) show, an official I know from Dassault Aviation, the premiere French aerospace firm, said to me something I will not forget for some time. “Anti-Americanism is of course quite popular around the world,” he said. “But I–as a Frenchman–will never forget that it was after all the Americans who liberated my country during the war.”

It was refreshing to hear someone speak the truth and in a way that might not have resonated well on a barstool in some Paris café or in some posh dining salon of one of the more ostentatious Paris arrondissements. As an American who lives abroad and whose nation is regularly accused of being responsible for all the worlds ills from global warming to the spread of the NIH1 flu virus it was a much welcomed and heartwarming gesture of fraternalism.

A few months later at Le Bourget in June 2007 I saw the same chap, who told me “I see an almost child-like optimism about the future of the aerospace business. I am not sure it is well-founded.” This mood was reflected in the motif of the t-shirts, brochures, refrigerator magnets and other souvenirs being sold that year. The artwork was a grade-school style montage of airplanes, clouds, and buildings representing the air show site–all done in pastel shades bordered with a thick black outline around each object like a child’s coloring book.

This year a slightly modified version of this toddler-level art class imagery was still being used by the air show organizers. However, the child-like optimism was gone. My Dassault friend showed himself to be prescient beyond that of most of the other analysts, Wall Street investment advisers and London-based aerospace industry “experts.”

Dassault is a company that epitomizes what we think of when we conjure up images of high-technology conceived and developed in France. Subtle sophistication intertwined with remarkable achievements in design, as seen in its Rafale fighter aircraft. Immaculate attention to detail, new-age materials, and cockpit designs that are more like something from the set of a Star Trek movie than a 21st century aircraft.

The company is also (like much of the rest of French defense sector) quite secretive. The corporation gives few press conferences about its defense business and negotiations with foreign countries about sales of their military products are rarely revealed until after all the contracts have been signed. Stories about what Dassault is and is not doing in the international defense export market do appear in the French and foreign press, but almost never attributable to a named source within the company. And what can and cannot be said by Dassault is all carefully worded in order not to stray outside the guidelines allowed by the French MoD’s Délégation Générale pour l’Armement (DGA), the government agency that coordinates weapons development and foreign military sales.

A visit to the Dassault corporate headquarters located in the Paris suburb of Saint Cloud is a journey to the pinnacle of French aviation. The well-cared-for compound of buildings has–as with any other major corporation with defense business–a controlled perimeter, but not so intimidating and not enforced by as many armed guards as a Boeing or Lockheed Martin plant in the United States would be. Press events are not held on the grounds of the headquarters building. Instead, they take place across the road from the grandiose wrought-iron gates on the river entrance to the compound (at night this entrance intimidates almost to the level of Willy Wonka’s closed-to-the-world chocolate factory) on-board a spacious two-level houseboat that is permanently moored on the Seine river.

The vessel is named the “Talisman,” which was also the title of the biography of the company’s founder, Marcel Dassault, and its bright white exterior is emblazoned with the corporate green, four-leaved clover logo next to the vessel’s name. The current CEO and Chairman, Charles Edelstenne, came on board to give his usual pre-Le Bourget State of Dassault Address the Friday before the show and was his customary down-to-business self.

“We could have hoped for more favourable circumstances to celebrate the one hundredth anniversary of the Paris Air Show. After four years of growth in business aviation, our industry is faced with a profound crisis. Nearly 17,000 jobs have already been lost at manufacturers in both North and South America.”

Edelstenne’s statement captures the essence of the problem with most aerospace firms worldwide. The majority of companies that build military aircraft have a much larger and more profitable business of building commercial aircraft–and it is that commercial business that gives the companies the economies of scale that they need in order to be able to afford their military production lines.

In Dassault’s case, their very successful line of Falcon business jets makes it possible to keep the Rafale fighter in production. America’s Boeing is in the same situation. Without its 737, 747, 777, and other commercial airliner programs, it could not sustain production of the F/A-18E/F Super Hornet and F-15E Strike Eagle. For these companies the defense part of their portfolio is a distant second-order priority to their civil aviation market.

For the moment, however, the tables are turned in this business. Every day of its first four professional, trade days Le Bourget usually sees a flurry of multi-billion dollar deals for airliners and business jets, but this year was a much different picture. The current world-wide economic downturn has given commercial aviation the business equivalent of a sucking chest wound. Europe’s Airbus consortium announced an all-time low of only two medium-sized sales of airliner aircraft–one to a low-cost Hungarian carrier and another to a Chinese airline–and Boeing’s sales announcements were limited to one buy of just two aeroplanes for the entire week.

These circumstances make the defence part of aerospace far more important that it has been in a number of years. The message from both U.S. and European aerospace companies is that they are pushing hard for sales of military hardware to foreign countries. But, because of commitments by many of these nations to military operations outside their borders and their involvement in multinational programs like Lockheed Martin’s F-35 Joint Strike Fighter, there are not a lot of nations with enough cash in their treasuries to afford a major purchase.

Two of the most important fighter aircraft competitions that are underway are the F-X2 programme in Brazil, which should be decided by the end of the summer, and the Medium-Multirole Combat Aircraft (M-MRCA) tender in India. The Força Aérea Brasileira (FAB) will end up purchasing as many as 120 aircraft, and will select from between the Dassault Rafale, Boeing’s F/A-18E/F Super Hornet, and the Saab Aerospace JAS-39 Gripen-NG. India will buy between 190 and 300 fighters over the next decade from one of six competitors–the three aircraft that are already being evaluated by the FAB in Brazil, plus Lockheed Martin’s F-16E/F, Russia’s Mikoyan MiG-35 and the European Consortium’s Eurofighter Typhoon.

While this type of an environment is something that Russian and European manufacturers are accustomed to, it is rare for U.S. aerospace industry to be in the position they find themselves in now. Our own armed forces are not buying in numbers sufficient to sustain business at the level necessary to keep operations running for the long-term. Furthermore, we are seeing a point within the next 12-16 months where several major U.S. defense programs will see their order books run out–leaving them in the position of either somehow generating more orders or shutting down production lines.

All of which leads to a disturbing view of the future. Aerospace technology is one of the few areas in which the United States leads the rest of the world and has a competitive advantage not only in design, but also in manufacture. Many products are developed in the United States, but then they are manufactured in a dimly-lit factory somewhere in southern China’s Guangdong province so they can be sold at your local Wal-Mart. Fortunately, U.S.-designed aircraft are not in this category–not yet, anyway. Fighter jets, radars, missiles, navigation systems, etc. are some of the few manufactured items left in the world that still have a “made in USA” label on them.

Making Washington the owner is no answer. There is no General Motors-type solution for aerospace. However, more government spending–usually an unusual position for anyone from the conservative side of the political spectrum to advocate–is probably the only solution to avoid a collapse of at least part of the U.S. military aerospace sector.

Two decades ago there were more than half a dozen companies in the United States that designed and built fighter aircraft. Today there are only two: Lockheed Martin and the McDonnell-Douglas plant in St. Louis that is now owned by the Boeing company. Any more bumps in the road economically and that number could eventually shrink to just one. Having just one firm that supplies major weapon systems to the U.S. government is usually not the best of all worlds.

Even though the U.S. military is in a sense the biggest socialist economy in the world (“there is–after all–only one buyer,” said a long-time U.S. Army foreign military analyst), competition has always been good for the weapons business. U.S. military aerospace has two competing radar firms in Northrop Grumman and Raytheon, two military jet engine manufacturers in Pratt & Whitney and General Electric, and so on. The “bump in the road” for Boeing happened the week after Le Bourget with a triad of announcements. The first was that there would be a significant delay in the first flight of the new 787 Dreamliner and no new target has been set. Australian carrier QANTAS has already cancelled part of its 787 order and Boeing’s relations with other airlines are less then civil.

The Qatar Airways CEO, Akhbar Al Baker, one of the Dreamliner’s biggest customers with orders and options for 60 aircraft, told the press at Le Bourget “the writing is on the wall for Boeing and they don’t care. They’re too busy having lunches and dinners. Boeing doesn’t realize how much they’re hurting their customers’ plans. They’re very much mistaken if they think we’re going to give them much more time on the issue. Then Boeing will be left with a load of parked planes. It may be that we become an exclusive Airbus customer.”

Testing of the new-era Boeing 787 airliner, constructed mostly of composite materials has, in the words of Boeing officials, revealed “a divergence of observables from analysis” in some of the critical, load-bearing parts of the aircraft’s structure. Which is a clever way of saying that computer modeling of composite structures is still–even after more than 20 years–not infallible in predicting whether or not composite materials will perform as reliably as conventional aluminum and titanium alloys.

(No one is immune from this problem, either. Although the flight recorders have not yet been found and there is still very little data to go on, the recovery of pieces of the Airbus A330 from the ill-fated Air France flight 447 has prompted questions about the use of composites in critical load-bearing areas in that aircraft’s design as well. Recovery of the intact tail section and other portions of the A330 reveals that it suffered a structural failure in the air, well before any impact with the ocean.)

The debate about how much use of composites and where will go on and on, but the more near-term problem is how to breathe some life into the U.S. aerospace industry. The chance to do so exists, but it stands a good chance of falling victim to traditional Washington partisan squabbling. A fight is shaping up in the U.S. Congress over the House and Senate wanting to fund production of more Lockheed Martin F-22 Raptor fighter aircraft and the Obama White House vowing to veto any defense spending bill that calls for additional procurement.

F-22 is without a doubt a complex, expensive to operate piece of machinery. Its availability rates may still leave something to be desired. It is not much use to forces engaged in the global war on terror. But, now that $32 billion has been spent on R&D and with some 95,000 jobs directly or indirectly linked to its continued production, truncating the program at 187 aircraft seems like a poor return on the taxpayer’s investment–and another blow to an already ailing U.S. aerospace industry.

Although these mundane national security considerations seldom work their way to the forefront of these arguments, the fact remains that Russia and China continue to develop more sophisticated fighter aircraft, more advanced air defense systems, and longer-ranged and more capable radars and detection systems. F-22 may seem like overkill now, but the day may come before too long when the occupant of the White House wishes he or she had more of them to put in the field.

And–last but not least–after such a low-key and generally downbeat 100 years of Le Bourget, it would be nice for U.S. aerospace to have something to celebrate. More F-22 production might not save Lockheed Martin and Boeing, but it would send the message that the United States is serious about supporting a strategically important industry at a critical time.

Reuben F. Johnson is a regular contributor to THE WEEKLY STANDARD Online.