All Member Update - Aerospace Industries Association...• Post May 20 –AIA/Avascent follow-on...

All Member Update This webinar begins at 11:00am EDT

06 | 03 | 2020

HOUSEKEEPING

• All attendees are muted upon entry and will remain on a hard mute for the duration of the meeting

• Questions can be submitted by typing the question in the Q&A panel. Questions are not anonymous, but they are private and will not be seen by other attendees.

COVID-19 Response and Road to RecoveryAerospace Industries Association

©Copyright, AF.mil

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AIA-AEROSPACE.ORG 4June 3, 2020

Communicating Through the Crisis


Calls:• Senator Daniel Sullivan – May 7

• Former SECAF Deborah James – May 7

• EPA Administrator Andrew Wheeler – May 11

• Luis Lizcano of FEMIA – May 14

• SECDEF Small-Group discussion – May 15

Letters/Media Statements/Remarks:• AIA Leadership Letter to Sen. Moran on PPP Legislation

• AIA Leadership Letter to Senate Commerce on COVID-19

impacts to Space programs

• AIA Statement for the Record on Ligado Spectrum

• AIA Liability Letter to Senate Judiciary Committee

• Testimony: Senate Commerce Committee Hearing

• Media Statement on Bipartisan Public-Private Partnership

Bill

• Interview with Stuart Varney Live on Fox Varney & Co.

• Interview with Doug Cameron of WSJ

• Interview with Dave McLaughlin of Bloomberg

• ICCAIA Board of Directors Meeting

• Remarks for International Forum on Business Ethical

Conduct and C&M International Webinar

June 3, 2020 AIA-AEROSPACE.ORG 6

AIA CEO Key Engagements since May 1

Media Engagement: Senate Hearing Coverage


Media Engagement: AIA LoEs & Priorities


Evolving and Enhancing Our Messaging

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9June 3, 2020

Continue to highlight workforce safety and economic well-being (LOE-1)• Media outreach on SecDef workforce letter (Politico, Defense One, and Inside Defense)

• White House OPL effort to feature good news/next steps for reopening and recovery

• A&D “essential” businesses taking care of employees & require access to testing and

PPE

Next steps for recovery and resilience (LOE-2)• Major press push on Senate Commerce hearing

• Continued background interviews on lessons being learned through the crisis

• Key messages for private-public job investment

Continue to highlight industry corporate citizenship/public health efforts

(LOE-3) • Forbes and Reuters story on Ventilator Partnership

• Continued social media amplification

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Prepare and Plan messaging for the new normal & recovery• AIA proposals; recovery framework and principles in development

• Educational opportunities to raise public confidence in “Return to Flight”

Advocacy and Outreach to Congress

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Press Congress for Needed Modifications to CARES Act

• Progress Payments for UCAs

• Eligibility Rules for $17 Billion National Security Set Aside

• Effect of Excise Tax Changes on Aviation Trust Fund

Press Congress for Additional Stimulus Legislation

• Private-Public Partnership for Aviation Manufacturers

• Change R&D Expense Amortization Tax Treatment

• Implementation Delay for FY19 NDAA Sec. 889

Engage on Macro-Level Issues Affecting the Broad Economy

• Temporary and Targeted Liability Protections for Businesses

• Relief for Defined Benefit Pension Plans

June 3, 2020

AIA LOE #1: Workforce


Summary Impacts/Outcomes• 8 Workforce Policy Council (WPC) meetings, including

one featuring NASA's Deputy Administrator

• 14 bi-weekly email updates, with detailed WPC call summaries and resources

• Provided the DOL a summary of member company best practices and efforts to help the COVID-19 response

• Developed a comprehensive COVID-19 mitigation and return-to-workplace best practices document

• 10+ requests to join re-energized WPC (4 ExCom CHROs)

AIA-McKinsey Workforce Initiative: Kicked off

April 23• Focus is aligning AIA/members workforce priorities

and developing thought leadership for public advocacy

• Comprises a WPC baseline survey, WashRep interviews, and HR Leader interviews

June 3, 2020

AIA LOE #2: DefenseMajor Progress and Outcomes

• Progress Payment rate change; DOD now expects +$4B cash flow

• Proposal to apply new PBP rates to current contracts oncase-by-case basis

• Proposed joint industry-DOD team to address common contracting issues, and improve broader efficiency of Section 3610 and other ‘equitable adjustment’ challenges

Liquidity• DOD: prime-to-supply chain cash flow is a 'good-news story'

Contracting• Broader concerns about cost/fee relief conveyed to DOD; under

consideration, possible legislative provision as fallback

Supply Chain and Workforce• SECDEF letter on importance of DIB/workforce issued May 4

• W/ DOD, seeking delay/relief from Section 889 telecon prohibitions

• NAS 413 (remote inspection implementation) adopted May 14

“Essential” Companies• Seeking USG/DOD guidance establishing federal threshold

requirements and ensuring access to PPE and testing for safe 'return-to-work’ / ‘continue-to-work’ operations at A&D facilities

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Objective

Examination of COVID-19-related effects on the DIB and the conditions necessary

for full recovery and greater resiliency against future external shocks to the ecosystem

Assessments➢ State of the industry pre-COVID (DIB analyzed, adapting to NDS; evolving

acquisition policies)

➢ Pandemic response impact on the industrial base (operations, supply chain, financials)

➢ Conditions to achieve full recovery and increase resiliency against future shocks (immediate/2020, mid-term/2021, long-term/FYDP)

Status➢ Partnered with Eric Chewning (McKinsey and Company), former DASD/Industrial

Policy and DOD lead for 2018 EO 13806 Industrial Base Assessment

➢ Developing work plan to include interviews with senior industry contracting and government affairs executives

➢ June 15 – Draft white paper to Bill Brown

➢ June 22 – Draft white paper to ExCom

➢ June 29 – Final paper

➢ AIA/McKinsey follow-on implementation TBD

Defense Ecosystem: COVID-19 Disruption & Recovery


AIA LOE #2: Space


Impacts and Outcomes

• Section 3610 civil space applicability and consistent agency guidance

• Offsite essentially letters and “space/aerospace” in CISA guidance

• Contract officer training, virtual inspections, and contract adjustment tracking

• Government engagement: letters, regular USG check-ins, member/joint-association calls with 8+ USG space speakers.

Continuing Efforts

• NASA return to workplace plans and implementation

• NASA/NOAA program impacts for supplemental or FY21 bills

• Contract adjustment; Continued flexibility and re-baselining

Enduring Focus Areas

• Space Force – acquisitions, organization and architecture

• NDAA – national security launch

• NASA – FY21 appropriation and authorization

• Regulatory – FCC orbital debris; commercial remote sensing

June 3, 2020

AIA Supply Chain Study


June 3, 2020

June 3, 2020

AIA LOE #2: Civil Aviation

Domestic Response Impacts and

Outcomes• Multi-trade group response team

• Expanding funding for FAA CLEEN programs

International Return to Flight Response

Integration• ATAG and ICAO COVID-19 Recovery Task

Forces

Enduring Focus Areas• Certification Reform

• Cybersecurity program funding

• Reallocation of L-Band Spectrum

• DOD Agility Prime Launch

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AIA Impact on Commercial Aviation Study

Objective• Conduct a joint assessment with Avascent on the

current state and future health of the airline sector and financial/workforce impact of government interventions for the manufacturers

• Determine the financial and human capital implications for manufacturing, service support, R&D activities, and Maintenance Repair and Overhaul (MRO) service providers

• Provide best practices and lessons learned from international initiatives and recommendations for aerospace manufacturers that will help guide policy and business decisions.

Status:• Completed analysis and review of impact of COVID-

19 on the airline and manufacturing industry, and provided preliminary industry recommendations

• May 15 – Draft paper to Spirit AeroSystems/Tom Gentile for review

• May 20 – Preview at ExCom Meeting

• Post May 20 – AIA/Avascent follow-on implementation actions and targeted industry recommendations TBD


AIA LOE #2: International Trade


Summary Impacts/Outcomes • Expansion of “essential” designation in Mexico beginning to

restore a $3 billion supply chain import pipeline that had dropped to 30% capacity

• Recommendations to DDTC will result in $20 million in defense export licensing cost savings this year for small/medium sized companies and new registrants

• Convened 7 dialogues to date with USG trade officials to recommend policy and process efficiencies in response to the COVID-19 crisis

Export Controls• Raising compliance challenges in new regulations enhancing

controls on civil aviation exports to China (e.g. definitions, thresholds, USG resources)

Duty Drawback• On May 1, CBP announced it will begin approving general

rulings; critical first step toward securing over $100 million in tariff refunds

June 3, 2020

AIA LOE #3: Corporate Citizenship & Public Health Response


Beginning to collect recent stories of AIA member corporate citizenship

contributions

Serve as a convener and a catalyst for timely and impactful public health

support efforts with our expertise in precision manufacturing at speed and

scale at a national level

• Partnership on “VentConnect” project has resulted in 10 Ventilator OEMs supported by over 60 suppliers (including 12 AIA members)

• Assisted in providing NYC, New Orleans, Illinois and Houston over 20K units of PPE in response to direct requests from federal agencies

June 3, 2020

Technical Operations and Standards

Continuing to advance Digital Transformation and Standards

LOE 1: Workforce• COVID-19 Impact on University Health, Research

Programs and Test Labs Study – American Society of Engineering Educators

LOE 2: Averting shipment delays for DCMA throughRemote Validation

• DCMA: “Interim Alternative Contract Insight for Technical Functional Specialists” and Technical Information Paper (T-TIP) 20-005

• National Aerospace Standard NAS413: “Remote Verification Implementation Guidance”

LOE 3: Community and Public Health• VentConnect

• PPE Support


Supplier Management Council


A community of practice focused on knowledge sharing, lessons learned & augmenting AIA’s advocacy & outreach.

Expanded Participation• All ExCom members now represented on Leadership

Committee

• Evaluating opportunities to expand to all SMC members

Sharing Real-Time Experiences• 12 evening meetings over 7 weeks sharing best practices

in managing COVID-19 impacts across the supply chain feeding into CCWGS and USG partner engagement

Supply Chain Risk Survey• Tools & processes to ID risk in the supply chain & efficacy

during pandemic

Supporting Advocacy/Outreach• Supply Chain/Small Business CEOs supporting media &

Congressional engagement

June 3, 2020

Enhanced Member Communications: A New Paradigm


Enhanced Two-Way Communications: New tools sharing critical resources and timely information to improve access/understanding of stimulus programs and focus on recovery

Website• Robust public & members-only COVID-19 webpages for ‘one stop

shop’ on updates from USG partners

Emails• 22 All member emails over 9 weeks providing critical updates,

serving as a conduit for AIA's "Calls to Action" & increased member engagement

Survey• Strong participation (81 companies) in member survey on need for

& use of CARES Act stimulus informing advocacy & outreach

Webinars• 4 webinars (>1100 attendees) co-hosted with McKinsey & KPMG

focused on the impact of COVID-19 on Civil & Defense industries, recovery for the A&D industry, and ramifications to the supply chain

June 3, 2020


UPCOMING AIA WEBINARS

For more information and to register for any of these webinars,

please visit the ‘Events’ page on the AIA website:

https://www.aia-aerospace.org/events/

https://www.aia-aerospace.org/events/

Mapping the Recovery – Open Discussion


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All Member Update - Aerospace Industries Association...• Post May 20 –AIA/Avascent follow-on...

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