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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
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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
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Media Engagement: AIA LoEs & Priorities
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Evolving and Enhancing Our Messaging
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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
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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
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AIA LOE #2: Space
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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
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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
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AIA LOE #2: International Trade
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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
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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
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Supplier Management Council
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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
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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
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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/
Mapping the Recovery – Open Discussion
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