Vertical Lift Aviation Industry Day October 27, 2009 Vertical Lift - PDF document

Vertical Lift Aviation Industry Day October 27, 2009

Vertical Lift Aviation Industry Day A First Step Towards the Future of Vertical Lift Aviation Tony Melita Office of Land Warfare and Munitions Office of the Secretary of Defense

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Purpose of Industry Day To engage interested members of the U.S. Vertical Lift Aviation Private Sector to consider the benefits and opportunities of entering into an OTA with the DoD. For the purposes of this meeting, the U.S. Vertical Lift Aviation Private Sector is defined as: U.S. companies, including U.S. companies under foreign ownership, control or influence (FOCI), that are both “FOCI-mitigated” and possess a facility clearance level (FCL) for the appropriate classification.

Why Do This Now? OSD sees urgent problems… …that neither the DoD nor individual companies alone can fix…. But we can collaboratively address them with a long-term commitment!

Agenda An OSD Perspective Mike Walsh and Overview of Ongoing Activities Partnering with the DoD: Consortium Construct Denise Scott and Proposed Way Forward Steve Talmadge Q&A All

An OSD Perspective And Overview of Ongoing Activities Mike Walsh OSD (AT&L)

Vertical Lift: Meeting Mission Needs • “Aircraft of necessity” in two theaters since 2003; millions of hours flown • Very harsh environment for rotary wing aircraft • Utilization sustained at very high rates • Operational availability, readiness, and reliability far exceed expectations • Impressive logistics support

…But Challenges Remain Between October 2001 and December 2008: 469 fatalities & 327 rotorcraft lost Number corrected since presentation Oct 01-Dec 08 % of % of Loss Rate 1 Losses Fatalities Combat Hostile Action 20 30 2.6 Combat Non-hostile 40 40 5.1 Non-Combat 40 30 1.7 1. Per 100K flight hours, >80% of losses not due to hostile action

Army Modernization: Aviation and UAS

FOUO USMC Date: 23 May 2007 LtCol Schaefer: Version 11 of 11

Vertical Lift Inventory • Comprise about half of DoD manned aircraft: – Army: 66%; Marines: 15%;Navy:15%; USAF: 4% – Slight increase projected • Aircraft age: – New models starting to field – Most of inventory between 10 and 20 years old – Oldest aircraft 25-40 years old • Breakdown by function/missions: – 60% medium / utility – 25% attack and reconnaissance – 15% heavy lift / cargo

Major Production Ramps Are Underway NOW 200 180 160 140 UH-60M 120 # of A/C 100 MH-60S 80 MH-60R 60 V-22MV 40 V-22CV 20 UH-1Y AH-1Z 0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2016 FY 2017 FY 2018 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2014 FY 2015

Historical Perspective: DoD Rotary Wing Aircraft Origins New Starts New Starts Cancelled XC-142 COTS Impact of Impact of * Increasing Increasing X-22 Cost & Cost & CH-47A XH-59 Complexity Complexity CH-46A XV-15 CH-53A AH-64A AH-1G UH-60A MV-22A AH-56A XCH-62A RAH-66A 1980s 1990s 2000s 1960s 1970s CH-47F VH-71A CH-47D OH-58D CH-47B/C AH-64D CH-46E UH-60L ARH-70A * CH-53D UH-1Y CH-53E MH-47E AH-1J UH-72A * AH-1Z AH-1S/F MH-60K MH-47G MH-60S AH-1T AH-1W AH-64D BL III UH-60M Derivative Mods Mods & & Derivative Impact of Impact of CH-53K Budget Budget Remans Remans CSAR-X Constraints Constraints ARH (again)

FY09 President’s Budget S&T Program (BA 1-3) Defense Technology Area Funding ($M) Battlespace • Total FY09 S&T $11.48B Environments, Nuclear • 2.22% of DoD Funding 231 Information Technology, Other, 654 Systems 230 Technology, Biomedical, 1,835 268 Space Platforms, 456 Human Systems, 425 Sensors, Electronics, Materials and Electronic /Processes, Warfare, 1,731 571 Chemical • Air Platforms S&T $813M /Biological • 7.1% of DoD S&T Defense, 600 Ground and (Not including related areas, e.g. Sea Vehicles, electronics, materials, etc.) 557 Basic Air Platforms, Research, 813 Weapons, 1,699 1,145 15

FY09 Air Platforms and Rotary Wing Vehicle S&T Budgets Aircraft Power Rotary Wing Vehicle S&T 7% Ballistic ~$110M in FY09 PBR Protection Turbine 1% (Does not include propulsion) Engines 31% SOCOM 4% Fixed-Wing DARPA Vehicles 16% 35% Unmanned Aerial Vehicles (UAVs) Navy 6% 5% Rotary-Wing High-Speed/ Vehicles Hypersonics 14% 6% Air Platforms S&T By Technology Sub-Area Army 75%

Development Cycle Time for Helicopters Projections Overall Development Time Takes about 3 Times Longer Now Than in the 60s the 60s Overall Development Time Takes about 3 Times Longer Now Than in NOTE: REGRESSIONS ARE A LINEAR FIT 17

Average Development Time by System Type 180 160 New Starts 140 Mods 120 100 80 60 40 20 0 Source: OSD/USAF Study

Resources - People Engineering Talent Pool -- 2009 Execution Window 700 600 S&E Graduates (000s) 600 500 375 400 300 Millions of Workers 200 75 100 0 China India USA • Aerospace Industries face acute shortages of skilled workers in the future No active US rotorcraft RDT&E after Apache Blk III and CH-53K • • Talent at home will be shrinking – but will be expanding globally – Void in experience & knowledge – Qualified labor will be in high demand and hard to attract – Most future post graduate students will be overseas • Global industry trends will impact defense contractors and their supply chains

Diagnosis: Industry Provides What DoD Wants • DoD’s rotary wing “portfolio”: stable inventory – investment dominated by production and sustainment – production capacity limited by decreasing supply base – mistakenly viewed as readily-available, low-value commodities – poor credibility due to recurring acquisition failures – rotary wing programs relatively low within Services’ priorities • Industry’s military business base: stagnant – stable oligopoly with business vice aerospace goals – sustaining DoD’s inventory is best profit; only growth area – inventory replacement comprises extensive modifications to legacy designs – development programs are limited, derivative-designs; no new designs; little new technology • Major industry initiatives unlikely without DoD investment

Diagnosis (continued) •DoD’s future “demand signal” unclear - no new-starts within FYDP (VXX? CVLSP? CSAR-X? AAS?) - technology base unable to support leap-ahead possibilities - OSD and Services’ S&T interests fragmented • Reality not consistent with common perception that vertical lift aircraft are: easy, cheap, and readily available, i.e. a commodity • Acquisition failures undermine credibility of sector

Decision-oriented approach to Capability Choices, Programming Options, and Acquisition Alternatives 2030 2035 2009 2015 2020 2025 MISSION SERVICE Tied to Army OH-58D replacement MH/AH-6J Attack OH-58D Pending decision on armed recon analysis (KW) Armed AH-64D ARMY ARMY Recon USMC USMC Firescout Scout AH-1W ISR 2046 2011 AH-1Z 2043 UH-1Y 2010 VH-60N VH-3/60 2040 VH-3D Utility MV-22B Medevac CH-53D CH-53K SOF USMC USMC UH-72A ASW ARMY ARMY SUW UH-60M USN USN Transport USCG USCG MH-60R Assault USAF USAF MH-60S VertRep MH-65C/DE SAR Mine CM MH-60T CSAR CV-22B ICD in work CVLSP* CH/MH-47 Heavy Lift D/F/G ARMY ARMY Mine CM USN ~2050 USN MH-53E SOF USMC USMC CH-53K CH-53E Initial Operational Capability Estimated Half-life Estimated End of Useful Life DP 1: SLEP or New Start Technology Development DP 2: New Start EMD 22 * Not Program of Record

Decision-oriented approach to Capability Choices, Programming Options, and Acquisition Alternatives 2030 2035 2009 2015 2020 2025 MISSION SERVICE Tied to Army OH-58D replacement MH/AH-6J E E Attack OH-58D Pending decision on armed recon analysis (KW) Armed N N AH-64D ARMY ARMY Recon USMC USMC D D Firescout Scout AH-1W ISR 2046 2011 AH-1Z O O 2043 UH-1Y 2010 VH-60N F F VH-3/60 2040 VH-3D Utility MV-22B Medevac CH-53D CH-53K SOF USMC USMC P P UH-72A • 50% of Decision Points ASW ARMY ARMY SUW R R UH-60M USN USN occur within next 10 yrs Transport USCG USCG O MH-60R O Assault • 85% within next 15 USAF USAF MH-60S VertRep D D MH-65C/DE SAR U U Mine CM MH-60T C CSAR C CV-22B ICD in work T CVLSP* T I I CH/MH-47 Heavy Lift D/F/G ARMY ARMY O O Mine CM USN ~2050 USN MH-53E SOF USMC USMC N N CH-53K CH-53E Initial Operational Capability Estimated Half-life Estimated End of Useful Life DP 1: SLEP or New Start Technology Development DP 2: New Start EMD 23 * Not Program of Record

Prognosis • Military demand implies little inventory growth. • Replacement and increased capability appear to be the future challenges that would stimulate growth: • More production capacity than demand; potential consolidation? • Aging workforce; no “noble work;” what attracts new talent? • Bid protests are incentivized by rare, competitive opportunities • Supply chain already critical • Aging workforce; no “magic” in stable situation to attract imagination / new talent • Preserving critical engineering skills will increase production overhead costs • US technological leadership in doubt • Congressional oversight or “reform” efforts will not provide the solution