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Implications of an Air Force Budget Downturn on the Aircraft Industrial Base

Implications of an Air Force Budget Downturn on the Aircraft Industrial Base: An Exploratory Analysis

Mark V. Arena
John C. Graser
Paul DeLuca
Copyright Date: 2013
Published by: RAND Corporation
Pages: 58
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  • Book Info
    Implications of an Air Force Budget Downturn on the Aircraft Industrial Base
    Book Description:

    The U.S. Air Force is facing a number of challenges as a result of the current defense budget downturn along with the uncertainty of its timing and magnitude. RAND examined the challenge of modernizing the Air Force’s aircraft fleet while trying to sustain the industrial base with limited funding, considering six budget strategies for aircraft procurement: from a new high-tech fleet to sustaining and modifying the existing one.

    eISBN: 978-0-8330-8373-9
    Subjects: History, Technology

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-x)
  6. Summary
    (pp. xi-xii)
  7. Acknowledgments
    (pp. xiii-xiv)
  8. Abbreviations
    (pp. xv-xvi)
  9. 1. Introduction
    (pp. 1-2)

    The United States is facing a downturn in defense spending that it has not seen since the mid-1980s. Targets for these spending cutbacks are on the order of $450 billion over the next decade, and there is a possibility of even more cutbacks, depending on the outcome of congressional budget negotiations.¹ Defense acquisition spending is not immune, and it is likely that a significant portion of these savings will come from defense procurement and research, development, test, and evaluation (RDT&E) spending. Thus, the ability of the United States to recapitalize its forces at the close of two wars will be...

  10. 2. How Is the Current Situation Different From the Downturn in the Mid-1980s?
    (pp. 3-10)

    The first question leads us to examine budget patterns and trends to infer what might be likely in the current budget downturn, as shown in Figure 2.1.

    There are a number of factors that constrain the ability of the Air Force to recapitalize its fleet. Figure 2.1 shows how these factors result in a decreasing ability of the Air Force to buy new aircraft. RDT&E spending is at an all-time high for aircraft (although some dispute this trend as will be discussed in the next section). This high funding level is driven by a number of factors:

    Advanced threats require...

  11. 3. What Can We Learn from Prior Industrial Base Assessments to Inform Decisions for the Future?
    (pp. 11-24)

    The AIB is a vital capability that the Air Force relies upon to develop, produce, and support its aircraft fleet; thus, its health is of strategic importance. Without these capabilities, the Air Force may not be able to field the systems it needs to meet future requirements. In this section, we summarize information and lessons from prior studies of the AIB to help inform the Air Force’s budget decisions. Many of these studies have explored the AIB’s health (or lack thereof). We’ll examine the concerns about the AIB raised by these evaluations and try to set some of these concerns...

  12. 4. What Are the Investment Options for Aircraft Acquisition? How Might They Affect the Industrial Base?
    (pp. 25-30)

    In this chapter, we explore a range of potential investment options open to the Air Force and consider their implications for the industrial base. The review of these options is not meant to be a detailed budget exploration of programs and quantities, but rather a discussion of potential funding strategies and their pros and cons. We only explore options within the aircraft funding accounts. We do not explore the larger funding trades open to the Air Force (such as spending more on aircraft procurement while reducing procurement in satellites, or changes to force levels and personnel to reduce operations and...

  13. 5. Options and Potential Issues
    (pp. 31-34)

    Finally, we conclude with a summary of the options open to the Air Force and some other issues it may want to address.

    As we introduced in the first section of this report, there are ongoing trends constraining the Air Force’s ability to modernize. Regardless of the investment strategy selected, these issues need to be addressed to gain additional budget flexibility. One longterm trend we identify is the increasing unit procurement cost over the aircraft generations. With a real growth in cost of just over 4 percent per year, the ability of the Air Force to maintain significant force levels...

  14. Appendix
    (pp. 35-38)
  15. Bibliography
    (pp. 39-42)