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2007 Speeches
Jim Albaugh

Jim Albaugh

President and Chief Executive

Boeing Integrated Defense Systems

"Address to Aspen Institute Italia"

Rome, Italy

May 10, 2007

I appreciate the opportunity to be here today to talk about the future of aerospace and defense in a rapidly-changing global environment.

I had the honor of speaking at the Aspen Ideas Festival in Colorado last July... and was impressed with the incredible exchange of ideas and different perspectives. I hope to have such an exchange with you today.

It's always great to come back to Italy and meet with leaders of government, military, and industry... and of course to indulge in your world-class food and wine.

I always feel very welcome in Italy and I always look forward to seeing my good friend Rinaldo Petrignani and our Boeing team here in Rome. Whenever I walk the halls of Italian Government with the Ambasciatore I feel like I'm with a rock star!

The best thing about my job is getting to try out our products. Of course, it may just be part of a business concept that goes back at least to the Second World War. Back during that war it was determined that parachute packers had an unacceptable record: nineteen out of twenty chutes opened. The manager discovered that by allowing his packers the pleasure of testing their products by jumping from a plane, quality rose to 100%.

Of course... that's not an entirely new concept. Right here in Rome... the builders of the aqueducts were asked to stand beneath the arches of these amazing structures to demonstrate their confidence in their work.

As I mentioned... I also get to try out our products... F-15... F/A-18... C-17... Apache... But when I get into these airplanes, the one thing I don't worry about is getting back to the ground safely. I know that these airplanes and the thousands of parts that go into them will work perfectly.

And I know our customers feel the same way. Every time an astronaut goes up in a shuttle... every time an airman gets into one of our fighter aircraft...Every time someone gets on a Boeing commercial airplane... they do it with full confidence in the safety and reliability of our products.

Here I'd like to thank our Italian industry partners who have teamed with us on commercial, space, and defense programs and who have contributed so much to make this possible.

It can be argued that no industry shaped our world more in the 20th Century than aerospace...

Innovations in aerospace defined the past century by changing...

And Boeing - along with our partners around the world - will change this century as well. We're off to a good start: The 787 is the most radical change in commercial aviation since the 707. The modernization program we are doing for the US Army, Future Combat Systems, will transform the way the warfighters perform their mission. And sometime in the near future, Boeing will play a role in the next generation of space exploration as we return to the moon and travel on to Mars.

The significant difference is that in the 21st Century Boeing will rely more than ever on our relationships with global partners as we address the rapidly changing threat environment, issues of homeland security, the impact of globalization and the environmental challenges our world faces.

I get excited when I think about us going back to the moon and eventually on to Mars. It will require fresh approaches... and the use of new technologies; just as it did 38 years ago when Neil Armstrong changed the world forever by walking on the lunar surface for the first time.

The same is true in meeting the defense needs of the United States and our friends and allies around the world. To make our armed services more capable... more survivable... and more lethal... across a broad spectrum of threats...we have to do more than just evolve the weapon systems of the cold war.

If we are to continue to ensure that our warfighters never have a "fair fight"... to ensure that they can carry out their missions and return safely... new approaches must be utilized.

This is truly the challenge industry, government and academia faces. And these are, indeed, challenging times. During the Cold War - we knew who our enemies were... and we trusted them not to use weapons of mass destruction. Today... we often don't know who our enemies are... but we know that if given the chance... they will.

Presently, along with traditional threats we also face irregular... catastrophic... disruptive threats. As a result, military planners must shift away from total reliance on a traditional portfolio of capabilities designed to address the conflicts of the 20th century... to the full spectrum of agile, responsive capabilities necessary to defend against the peer threat, as well as, terrorist attacks, secular conflicts, and cyber warfare.

It's no longer just about who has the most ships, planes and tanks... it's also about who has information superiority. It's about who has the ability to rapidly adapt and utilize emerging disruptive technologies. And it's about doing all of this against a backdrop of defense budget pressure ... on both sides of the Atlantic.

In our Defense Department... and in defense ministries throughout the world... there are too many requirements chasing too few dollars. Despite what I'm sure the taxpayers see as rather lofty defense budgets.

Budget pressures are particularly acute in Italy, Germany and the United Kingdom. In Europe the problem goes beyond mere budget pressures. Despite foreign-originated terrorist attacks on your own soil... the perception of external threat is small. Meanwhile, programs to specifically address the kinds of threats I have mentioned fall below the funding that is available, particularly in the areas of: intelligence, surveillance, reconnaissance; situational awareness; mobility; and integrated command and control.

My fear is that Europe may be abdicating the predominant defense role for the region to the United States... even as U.S. policy and involvement in the Middle East complicates trans-Atlantic relations.

In 2005... the EU nations together spent $35 billion on procurement and another $12 billion on research and development. By contrast... the U.S. spent $103 billion on procurement and $71 billion on R&D. It's a gap that can't be allowed to continue if we are to jointly confront the very real threats that we face.

It all adds up to very difficult choices going forward.

As threats evolve... we must also evolve our ability to respond.

In the United States, we have made progress, especially in the area of network-centric capabilities. That is, the power of space, air, ground and even underwater sensors... to collect data... to turn that data into information and knowledge... and to share that knowledge through a network to improve situational awareness, decision-making and overall system effectiveness.

Other industries are already moving in the direction of using sensors and communications systems to enable shared data, information management and decision-making. We see the results every day in: inventory tracking, financial management, and in the future it will transform air traffic management.

In my view... global defense and homeland security also require the application of network-centric solutions... and the global situational awareness and integrated command and control capability it provides.

Failure to develop these areas leaves us vulnerable to enemies who are increasingly using the internet, information operations, and cyber warfare to further their ambitions.

The question is: how can we provide the relevant adaptive defense capabilities necessary? Government and industry must remove the roadblocks to rapidly acquiring the capabilities needed to meet changing threats.

Today, bringing a new weapon system into use can take decades. By then, the threat will have changed several times, often making a huge investment irrelevant. For example... the U.S. Army's Comanche... a stealthy scout helicopter that even after tens of millions of dollars of investment it became outdated by developments in unmanned aerial vehicles.

We must change from defining products in terms of features... to defining them in terms of what capabilities are required .... thus allowing industry the option of being more innovative in how they define the solution.

Rather than responding to the threats of our enemies, we must anticipate their actions and invest in systems to counter their tactics. In doing so we must tap into the trillions of dollars being invested in technology around the world....instead of trying to develop it ourselves.

We must focus on disruptive technologies that will change the playing field, like, technologies like lasers, robotics, unmanned aerial vehicles, data fusion and data mining.

We must think in terms of enhancing existing systems rather than the lengthy and costly process of developing new ones. For example: is it prudent to invest precious limited resources in developing so-called "next-generation" systems, when one could achieve 80% of the desired capability at 20% of the cost by evolving existing systems... at less risk and much faster?

Finally... the threats are global... the development of capabilities should also be global.

Research and development spending for defense is down. Perhaps by pooling money, talent and the intellectual capacity of government, industry and academia among all of our friends and allies we can better meet our evolving needs.

As I mentioned, more and more we are seeing that innovation, research and development originate from the global private sector. Indeed... the U.S. is certainly importing more than fashion and Ferraris from Italy. Today... the U.S. is a net-importer of technology from throughout the world.

As a result, all of our companies must adapt. Companies will be only as good as their ability to utilize technologies from whatever source worldwide.

Giving customers the best solutions means giving them the best of industry - whether that comes from America, Europe, or Asia.

There are models for this level of teaming, bringing together the best of government, industry and academia. In fact, you can see this approach here in Italy where there are a number of advanced aerospace districts, in Naples, Puglia, Piemonte and, more recently here in the local region of Lazio.

These districts bring together numerous companies, universities and research and development centers, all supporting thousands of jobs, and all leveraged by public-private investment.

It's a model for the future.

It's a future where companies will increasingly focus on a few core competencies. As a result, they will become more dependent on partners.

Instead of competing, we will have to cooperate. Instead of building walls, we will have to open new lines of communication. Instead of withholding ideas, we will have to share them.

A barrier to this is the U.S. Export Control Policy. In my view, export control policies should apply to CRITICAL technologies only, not the broad list that exists today. In addition, the process for export control licensing in the U.S. needs to be streamlined and funding for licensing provided. Today, the process is understaffed, underfunded and cumbersome.

While I'm on the subject of government and industry coming together in a global way to address new threats, it's important for me to address a different kind of threat. It's a threat where Europeans have shown strong leadership: climate change brought about by high-carbon emissions.

In meeting this threat, the cost of failure is also high.

I am pleased by the steps Boeing has taken in this area. We have launched a new organization to integrate and expand environmental initiatives across Boeing, and to work with suppliers and customers to address the environmental impact of our products. An example of such a partnership was that announced recently between Boeing and Virgin Atlantic to minimize the impact aerospace has on the environment. Finmeccanica will be part of this as they do their fuselage work for the 787.

Of course, we won't be able to successfully address any of the threats we face... from global terrorism to global warming... without addressing a final issue: the need for a talented, highly-skilled aerospace workforce.

Our industry workforce is aging. The average age of an aerospace engineer today is 54 years old. At the same time, we are simply not producing enough of the scientists and engineers of the future.

Twenty years ago, the U.S. was producing some 75,000 science and engineering graduates every year... This year, we will graduate about 50,000. Meanwhile, India will graduate about 300,000! China? About 700,000 - every year!

In short, in coming decades we will have too few workers... with too few skills... and, what I'm afraid of: with too little interest in aerospace.

How can science and engineering. . . that is, how can aerospace. . . prevent this "intellectual disarmament?" How can aerospace attract the best and brightest?

As an industry, we can start by becoming more attractive to younger people. Ultimately, perhaps the best way to attract future generations to aerospace is to dare young people to dream again - with great goals that challenge us to explore new frontiers.

Whether in the United States or here in Europe... schools, colleges and universities must inspire and train the engineers, scientists and technologists needed for a new age of innovation.

And Italy can certainly play a role in this. I know that a country that gave the world Leonardo da Vinci... a man with an intellectual curiosity and a vision for human flight in the 15th Century... will continue to play a role in inspiring innovation in the 21st Century...

The events of the past six years remind us that we live in a dangerous world. Together we must have the vision... the will... and the desire to direct our collective energies to ensure peace.

As retiring Army Chief of Staff... General Pete Schoomaker recently said, "We are in for a long war... and we are closer to the beginning than the end." I fear he may be right.

I know there are many from the military here. I'm just an engineer. I have never worn a uniform. And despite my comments on technology and capabilities, I want you to know that, despite all I've said today, I understand that ... in the final analysis... it comes down to our troops. It comes down to our men and women in uniform and their training, discipline, leadership, courage and sacrifice.

As I close. I'm reminded of Italian astronaut Roberto Vittori. He was the youngest ESA astronaut at the time of his first mission to the International Space Station.

Back in 2002, he was on his way to board his Soyuz capsule for his mission to the Space Station. His wife rode with him out to the pad at Baikonur.

A photographer captured the moment. It was a photo that caught both the worry and the pride in her eyes. Later, after Roberto saw the photo, he called it the best photo of his mission. He said, "Every time I look at those eyes I see that she was with me, sharing the risk, but also the privilege of being part of such an endeavor."

And that is the thought I would leave you with...

The people of the U.S. and Italy continue to have a strong bond of friendship and shared identity. We have worked together on fabulous and important projects from the International Space Station to the 787.

I know that going forward we will have the privilege of continuing to define our world in this century.