Industry Panel LtGen John T. Sheridan, Commander, …secure.afa.org/events/natlsymp/2008/scripts/Industry_Panel.pdfCraig Cooning, The Boeing Company . Michael Glass, United Launch

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Industry Panel

LtGen John T. Sheridan, Commander, Space Missile Center Brian A. Arnold, Raytheon Company Craig Cooning, The Boeing Company

Michael Glass, United Launch Alliance Frederick L. Ricker, Northrop-Grumman Corporation

Joanne Maguire, Lockheed Martin Corporation David W. Thompson, Orbital Sciences Corporation

Global Warfare Symposium

18 November 2008

Moderator: Ladies and gentlemen, welcome back to the next session. This is one I’m really excited about. Before I introduce our Moderator for this great panel, I understand we have a real hero among us and I would like to ask Colonel Buzz Aldrin to stand up and be recognized. [Applause]. The Moderator of this panel is responsible for managing research, development, design, acquisition and sustainment of space and missile systems, launch, command and control, and operational satellite systems. He’s responsible for over 6,500 employees nationwide and an annual budget in excess of $10 billion. He’s buying the drinks tonight, just in case anybody’s curious. [Laughter]. He’s also the Air Force Program Executive Officer for Space. Ladies and gentlemen, please join me in welcoming the Commander of Space and Missile Systems Center and our military host for this event, Lieutenant General Tom Sheridan. [Applause]. LtGen Sheridan: Thanks very much. Good afternoon everybody, and welcome to AFA’s Industry Panel as the last item of business this evening on this part of the conference. I’d like to point out that you’re also here as part of Air Force Week Los Angeles. The first time we’ve tried this. It’s been ongoing now for more than ten days and I can tell you by the time we’re done ere at the end of this week we will have probably touched about five million people in the greater Los Angeles area as far as getting the word out about the Air Force. I know many of you have had a part in this with us,

Industry Panel – 11/18/08 2

and thank you very much for all the work all of you have done. A recent AFA Executive Forum Report stated, “Space activities can contribute immensely to any enduring leadership strategy. Maintaining a strong presence in space is critical for protecting the U.S. economy at home and projecting it abroad ensuring homeland national and international security and strengthening innovation and education for the next generation.” In today’s panel discussion on “Industry’s plan and vision for the future, top issues for the next administration”, we will explore these issues and the importance of that leadership strategy. We’ve gathered together an impressive and influential group of leaders in America’s space industry. They include, joining me on stage here today, from your left, Brian Arnold, Lieutenant General, United States Air Force (Retired) from Raytheon Space and Airborne Systems. Craig Cooning, Major General U.S. Air Force (Retired) from Boeing Space and Intelligence Systems. Ms. Joanne Maguire from Lockheed Martin Space Systems. Mr. Fred Ricker, Northrop- Grumman Military Systems. Mr. Dave Thompson, Orbital Sciences Corporation. And Mr. Mike Gass, United Launch Alliance. [Applause]. Each of our panelists will be afforded time for their remarks, about eight minutes each if I could suggest. After all panelists have spoken we will open our remaining time which we’re going to try to preserve for you for questions from the floor. So please do submit your questions. The cadets will bring them forward, and we’ll certainly get your questions aired. We’re going to stop at 1730 because we know we have other things going on tonight and we need time for all of us to breathe before the evening’s activities. Our first speaker is Brian Arnold, Vice President and General Manager of Space systems at Raytheon Company’s Space and Airborne Systems Business Unit. As a retired lieutenant general in the United States Air Force he brings an exceptional portfolio of experience leading space and air superiority programs spanning 34 years. Space Systems produces space and space qualified solutions for defense and civil applications.



Prior to joining Raytheon General Arnold served as Commander, Space and Missile Systems Center, Air Force Space Command, Los Angeles Air Force Base. He is also the recipient of the 2005 General Bernard A. Schriever Award for the most significant contribution to the mission of the United States Air Force missile and space programs. General Arnold? [Applause]. LtGen (Ret) Arnold: Thank you very much. Thank you for allowing me to be on this great panel. Thanks to Mike Dunn, great show here so far. Joe Sutter, good to see you. Buzz, always good to see you. Also how about a round of applause for General Lance Lord here who just walked in? [Applause]. We were asked to speak as though we were talking to the new administration as they prepare to take office so we’re going to give some cerebral thought to this in about eight minutes apiece. In my remarks I thought I would talk about these things on the chart here, basically how we would look first to reinvigorate a very robust national space policy that would help guide not only industry but also our military and our civil side as we go forward. Secondly, to recognize the growing dependence of the U.S. on our space capabilities. Third, to look at the global competitive posture of the U.S. space industry. And finally, to reflect on the strengthening of our U.S. educational system and our investment into future space leaders. With that I’ll just touch on some of these themes that I have on this next chart. First of all, with respect to reinvigorating a clear and robust national space policy I think we ought to take a look and complete the homework from the Allard Commission. I was part of the 2000 Rumsfeld report on space and I believe we probably did two-thirds to three-quarters of the recommendations from that panel. Now we have a whole other set from the Allard Commission. I would say we ought to take the best of those recommendations and move forward and the other ones we ought to maybe continue to contemplate. The second part of that, though, I think we need to begin to emphasize the need for a clear national space policy. It comes at a time when U.S. space leadership is



increasingly threatened. Space policy is critical to the commitment of technology and the infrastructure necessary for us to maintain our global leadership. We in industry have maintained a sizeable investment, if you will, in our own independent research and development, in facilities, in training a high staff, skilled base there. But it’s a partnership between industry and the government and we need to continue to push that. Clearly technology innovation is a core, especially in our business, so we need to continue to have that as top level funding effort as we go forward. Third, I believe we need to continue to push for restoration of what I would call the National Space Council. At this time I would recommend it would be led by the President versus the Vice President as in maybe offered in previous administrations. The key task would be to develop, implement and sustain a national space policy. This is the only way to deal effectively, I believe, with the national issues of the space sector, especially when they’re driven by so many stakeholders out there with a broad range of users and needs in the federal organizations. Our primary issue is how to sustain a long term national commitment to a strong space enterprise. I believe the most important thing for our government that they can do for us in industry is to provide us some stability. By that I mean stability with respect to acquisition processes in order to create an environment of mutual success. Secondly, stable funding which promotes in turn the retention of those critical skills that are so important to our business. It also permits the deployment of an experienced workforce over a long period of time. We found that stability in budgets and staff along with a stable experience and requirements is a common theme to very successful space programs, so obviously that would be in our best interest. The second topic, recognizing the growing dependence of the U.S. on various space capabilities, particularly in the roles of the military/national security/civil and commercial space and the way they play into maintaining our enduring way of life. I took particular interest in the 8th Air Force’s Commander’s comments about nuclear weapons and monitoring. Obviously the treaty verification, the



tracking of nuke weapons have never been more important than they are today dealing with rogue countries like North Korea and Iran, and I would offer a very very unstable Pakistan. In terms of the other national security needs, the COMs, the weather, the warning and the ISR, clearly we need to continue to upgrade those, but I believe we need a very strong focus on protection of those vital assets and also very improved situation awareness. I believe both of those are urgently needed. With respect to civil space I would offer we need to continue to monitor our changing environment. We need to focus on the post-disaster homeland security efforts that we get and also continue to improve our GPS as a free service supporting the global economy with precise timing, navigation and global positioning. Finally in the areas of commercial I believe we nee dot continue to leverage commercial communications and overhead imagery sources as a very cost-effective way to complement government-owned assets. The third topic, improving our global competitive posture for U.S. space industry, I believe we should offer a reform to the export control policy. Export control no longer protects strategic space technologies. In some cases I would offer they represent a threat. Current policies have forced off-shore investments in key technologies to create parity with U.S. industry in some areas, thereby enabling global competition. Outdated controls protect many technologies and systems readily available in other countries. Export controls in a way kind of harm U.S. firms by curtailing our ability to compete globally. Finally, I believe the new administration must reform export controls with a focus to limit those technology restrictions to truly those most clear to U.S. representatives of leadership and national security. Finally, the last topic, the strengthening of the U.S. educational system and our investment to future leaders. AS when Buzz Aldrin took his first trip to the moon in 1969, that inspired an entire generation of folks to come into the science and technology career field. Today many of those that came in in 1969 and that era are getting ready to retire. System engineering, I would say, is actually becoming somewhat of a lost art. According to the Department of Labor, 51 percent more jobs today require science, engineering and technical skills than in 1998.



Science and engineering are basic to the ability as a nation to defend ourselves and improve our industry yet American public schools fail to emphasize the importance of math and science. At Raytheon we have a program called Math Moves You and it’s confronting this issue by stimulating the interest in middle schoolers on this critical subject. However we need similar programs at the state and national level, sponsored both by industry and I would offer government leaders. So in closing, I see the top four issues that I would offer to the Obama administration, again, reinvigorate the national space policy for the U.S.; ensure that our essential space capabilities that we rely on daily are achieved and are secure; third, maintain a close relationship and a shared vision between industry and the government to address those critical industrial base issues; and finally, to implement a robust campaign to attract, develop and retain top talent to ensure U.S. leadership in space for the future. Thank you. [Applause]. LtGen Sheridan: Thank you, Brian. Our second panelist today is Craig Cooning, Vice President and General Manager of Boeing’s Space and Intelligence Systems. He’s responsible for the leadership of the people, the programs and the assets of the company’s military, civil and commercial satellite systems as well as the spectral lab subsidiary. Prior to joining Boeing in September of 2005, General Cooning served as the Director of Space Acquisition in the Office of the Under Secretary of the Air Force. He served in a broad range of acquisition and logistics positions and as Program Executive Officer for all space programs. Twice as a major weapons systems director, as a commander, and as a warranted contracting officer. Craig? MajGen Cooning: Thank you, General Sheridan. Again, I applaud everybody for Air Force Week. The fact that you could actually touch about five million people in this past week, I think at least half of them were on the 405 as you went up and down in Southern California here. [Laughter]. But I think this is a great opportunity for us to get



together and just talk about the challenges and some possible solutions for the Obama administration. What is President-Elect Obama going to be facing? What are some of the challenges that I think we need to tee up for him? Clearly the one thing I think we need is an enduring and sustainable space architecture. When I say enduring, I want to underline that. It seems the recent space program, as soon as we define an architecture, that gets changed. And clearly that whipsaw effect around the industrial base has a negative affect on our ability to provide the assets that this nation needs in space. It is a very cyclical nature within this industry. We are in a retreating marketplace across the board within space. And that is causing us to shrink our industrial base within all the primes and within the industry as well. One of the other things that it does, and we know that, when people see a declining marketplace, our ability to attract the best and the brightest is a lot more difficult. I applaud the efforts that our colleagues in Raytheon are doing with regard to trying to attract the young folks. In Boeing we do a very similar type program. We do it also through the summer internships. But we need excitement for this industry in order to sustain it. The other thing, and we talked a little bit about this in some of the panel discussions that we had yesterday, right now the developmental cycles are being increased across the board on most of these space programs. A lot of times by the time a weapon system is actually fielded, or a space system is fielded, in some cases it’s actually obsolete. Because we don’t have the volume, there’s a lot of loss of learning between programs, from one program to another. And guess what? The world is catching up to our capabilities. We’ve seen that demonstrated in spades over the past year, particularly with the Chinese. Space is a contested environment. We don’t have the freedom of the seas like we used to have in years past. So one of the things that I think we need to do is look at our overall space architecture. On my next slide I’ll talk a little bit more about that. Clearly, there are enduring needs that I think we all agree upon within the realm of space. Space we need secure, survivable, mobile, assured on-demand connectivity. We need space situational awareness. We need real time asset position velocity and time. We need to be able t



collaborate, discover, message, process, ISR or other capabilities anywhere, and we need global persistent awareness. And oh by the way, and I’m sure Mike Gass is going to talk about this, low cost space transportation. In order to do some of those things we need to be looking at a new way of doing business and I think a lot of that can be done by changing our architectural efforts. If you look at a different vector, if you look at where we are now, I would say we’re in a current vicious cycle. We’ve created systems where there’s no tolerance for failure whatsoever. We continue to require these explicit satellite capabilities on the first satellite system that comes out of the chute and we have a very expensive space access. We do what is more likely called an integrated architecture presently, so when we take a space system and pile lots of requirements and different payloads on a single space system, we’re dependent upon the longest schedule of the one sensor or the one payload that actually is going to take the longest to produce and we can’t stand failure. One of the other options that we have, and that’s to create more of a virtual cycle, and that’s to get back in the business of incremental development. Shorter focus missions with responsive and low cost access. The way you can do that is by gluing together a variety of different systems to minimize the interdependencies of a single asset, but to capitalize on the ability to glue together all the parts. The nation for sure has a lot of space challenges out there in front of it, but we have to change the way we do business presently into a more segregated architecture that will derive benefits earlier for our space warfighters. Thank you very much. [Applause]. LtGen Sheridan: Thank you, Craig. Ms. Joanne Maguire is Executive Vice President of Lockheed Martin Space Systems Company and an officer of Lockheed Martin Corporation. Under her leadership SSC provides a full spectrum of advanced technology systems for national security, civil and commercial customers. Chief products include human space flight systems, a full range of remote sensing, navigation, meteorological and



communication satellites, strategic and missile defense systems, space observatories, and interplanetary spacecraft. In 2008 Ms. Maguire was named one of the top 50 women in technology by Corporate Board Member Magazine. Joanne? Ms. Maguire: Thanks, Tom. It’s really great to be here with all of you this afternoon. It’s always wonderful to be in Southern California on a fall afternoon, and it’s a distinct pleasure to share this forum with all of you military leaders, industry leaders as well, and my colleagues here on the panel. I don’t need to tell this audience that space has become central to every part of our American way of life. We rely on space capabilities for information and entertainment, for banking, for navigation and communications, for weather forecasting and climate monitoring. From above, space underpins our global information grid. When it comes to national security space we have in the last decade seen an extraordinary emergence of space as absolutely essential to those charged not only with fighting wars and winning them but avoiding them as well. In 1961 John F. Kennedy created a bold challenge for our nation, and I’ll quote him. “Now is the time to take longer strides. Time for a great new American enterprise. Time for this nation to take a clearly leading role in space achievement which in many ways may hold the key to our future on earth.” Students flocked to fields of engineering, math, physics and science. Industry made huge capital investments. And U.S. leadership conceived, formulated, planned and executed programs that excite a nation. The national and commercial economic benefits that accrued from that investment in space we enjoy today. They are the culmination of some long term deeply held commitments that we would do well to emulate today. Today we can no longer declare ourselves the unquestioned leader in space. Other countries have witnessed the technological, strategic and economic advantages that accrue to a nation with a vibrant space program and they are acting decisively. With China, India



and Japan all taking bold steps in space, are we as a nation willing to stand by, let them pass us up, fall out of first place? As President-Elect Barack Obama recently stated, “With India’s launch of its first unmanned lunar spacecraft following closely on the heels of China’s first space walk, we are reminded just how urgently the United States must revitalize its space program if we are to remain the undisputed leader in space, science and technology.” Today in space we’re entering a period of transition. We’re approaching end game on an unprecedented modernization thrust in national security space. You know it. You’ve lived it. It’s SBIRS, it’s Wideband Global System, Advanced EHF, MUOS, GPS to name a few. And we are embarking on an ambitious new human space exploration program. Further, the effects of a complex, dynamic and interdependent global economy are being felt today with an unprecedented impact. So as we commence a new administration, the time is right to pause and think critically about the path ahead. So how might we advise this new administration to not only preserve our position in space but extend it? I would say there are probably three key pieces of advice I’d offer. First, I would say our next steps need to be guided by a coherent plan that reflects a thoughtful strategy. Now that strategy, what does it need to comprise? I would say it needs to comprise technology, U.S. security interests, education, fiscal realities, and it has to acknowledge the increasing number of space-faring nations. Today it is absolutely beyond the scope of any existing single space agency to chart a path forward that comprehensively addresses the myriad of issues we confront. Elevated thinking for space is now urgently needed. No pun intended. There are a number of studies that are recommending how we might approach getting to a more cohesive view. Some specific suggestions include reviving the National Space Council or creating an Interagency Working Group on Space. Whatever the forum, that forum and that organization, that group, must be empowered, must be equipped to manage our efforts in space holistically so



that we can assure that they are integrated, coordinated and synergistic. As taxpayers we should demand that. This strategic oversight is clearly needed to address both the threats and the opportunities ahead. From space as a contested environment, as my colleagues have mentioned, to global opportunities for collaboration in civilian space efforts, to matters of export control and education, to name a few. With that strategy in hand, what else might we go after? I would say a second major initiative we should consider as we cross this threshold into an Obama administration is building a renewed sense of partnership between government and industry in the space enterprise. On the government side, as General Arnold has mentioned, the most impactful actions would be those that aim to stabilize acquisition. Becoming more predictable in the timing and the scale of efforts sought. More thoughtful about when to invoke competition. More willing to buy in economic quantities. How frustration it is for all of us to be asked to build one spacecraft. Have the factory go dark. Then be asked, well, could you build another one for us? Finally, we should be more open to orderly spirals as General Cooning has mentioned. There are things we can do that would dramatically lower the risk of advancing our capabilities in space. Now it’s not just on government. Partnership as you know is a two-way street. For industry’s part, we can do more to be a dependable partner. Making the investments in time, energy and resources to improve our program execution in all that it entails -- planning, systems engineering, supply chain management, you name it. Together we’ve made great strides in mission success and we should take pride in that. But to reclaim our rightful place as masters of our own destiny in space, we need to continue to rebuild our credibility by meeting commitments, cost and schedule, not just ultimate performance. Credibility will return when we together execute with excellence. With that renewed credibility we must together advocate creative and affordable new solutions to our nation’s pressing problems. So we should revamp strategy, we should renew partnership. But what should we do about raw material? I



think probably the single largest issue we have been nibbling around the edges on is the need, not just in the space community but across the United States economy, the need for a viable plan to cultivate scientific, engineering and mathematical talent that will ensure our technological prowess and competitiveness well into the 21st Century. The 2001 U.S. Commission on National Security for the 21st Century I think said it pretty well. Quote, “Second only to a weapon of mass destruction detonating in an American city, we can think of nothing more dangerous to U.S. security than a failure to manage properly science, technology and education for the common good over the next quarter century.” Each of us needs to do our utmost to promote policies supportive of strengthening our stem education at every level. There is much we can do on the local level to support our schools. I have yet to see a teacher decline an offer by a committed space professional to come and talk to their class about space, satellites, rockets, and the math and science that underpins it all. On a larger scale, we are desperately in need of a compelling vision that we are committed to communicate and to pursue as we look for our future as a nation in space. I have every confidence that with such a vision we could indeed reignite a whole generation’s enthusiasm for science and technology. So three things, much like General Arnold said. Strategy, partnership, and a renewed commitment to building the workforce of the future. Thanks again, General Sheridan, for asking us to participate in this forum. I look forward to engaging in dialogue with you, the audience, and my fellow panel members. [Applause]. LtGen Sheridan: Thank you, Joanne. Mr. Fred Ricker is Vice President and General Manager of Northrop-Grumman Military Systems Division. This division is responsible for the acquisition and execution of all spiral development programs and operational programs associated with the United States Air Force Missile Defense Agency and other military customers. Prior to this position Mr. Ricker served as Vice President and Program Director for the Space Tracking and



Surveillance System, STSS. His previous career experience includes serving as the Deputy of Programs, the organization responsible for the management, development, deployment and operation of space systems and other deliverable end items produced by the Northrop-Grumman Space Technology Corporation. Prior to that he was Vice President and Program Director of the National Polar Orbiting Operational Environmental Satellite System, NPOOSS. Fred? Mr. Ricker: Thank you, General. I’d like to thank AFA for the opportunity to be here, to be part of this panel. We looked at the topic of this conference, Global Warfare, and decided to dissect those words a little bit and see what those would mean and the implications of them. When we think of global, of course, it’s a reach that goes to places where we may not have control. I think one of the things I want to explore a little bit is the idea that that global reach is primarily achieved through a space infrastructure. When you think about warfare, warfare is something that many people think of as something in an active sense that’s going on, but I want to think of it more in terms of averting conflict, or if you have conflict that starts to arise, how you deal with it. The most successful way, in both cases, is to be prepared. So one of the by-lines of my comments has to do with preparation. In order to have preparation we have to be able to deal with and collect intelligence about our adversaries, we need to know what they’re up to, what kind of intentions they have, and form strategies around those. We must also be able to deal with situations that might arise and have the tactical capabilities for that. Then we want to be able to have that global infrastructure that gives us that ability to deliver those tactical capabilities when the need arises. One can look at our abilities, and in current times we’re in a pretty good position to deploy our Navy close to almost any shore in the world. We can certainly deliver air power, fly UAVs in areas where we have air superiority. There are many places where we can do that. But to be able



to tie all that together and deal with this at a global level we still need to really rely on a strong space infrastructure. Preparation costs dollars and it takes advanced planning, as several other of the panelists have talked about. We can do this kind of planning, but most of the job of being prepared for these kinds of events is left to the operational space constellations. You can provide these combination of global constellations, can talk about putting up capabilities that address regional areas. The ability to tie both of those together, layer them if you will, and integrate them and operate them in an integrated fashion is really the ultimate objective here. The traditional operational constellations we all know about. These include those for intelligence, for communications, for navigation and missile warning. We’ve also been able to witness the fact that these constellations have delivered long service, long beyond the design lives of those particular constellations. We’ve also been able to observe over time how those constellations have delivered performance and benefits that go beyond the original intents of their designs. They’ve been able to take advantage of that fact because those constellations have flexibility and a robustness to them. So they’re able to adjust to particular kinds of new threats that might occur, see different kinds of objects that because of just the laws of physics you can do that, deal with different electromagnetic wave forms because we have the flexibility to do that. These operational constellations have been effective in allowing us to deal with not only the challenges that they were designed for, but address unforeseen challenges of the time. Of course challenges continue to come upon us. The challenges that we face now and as we look ahead are becoming a little more difficult and the existing constellations themselves are not going to be able to address all of those. So what would we add to that? What kind of additional threats are we dealing with? Our ground infrastructures and naval forces are certainly going to be targets in the future. General Obering in his comments on Tuesday of this week to an NDIA group made the observation that adversaries of ours are no longer necessarily putting energy into building massive air forces. Instead they’re putting a lot of their investments



into missile systems. These missiles, we see the results of North Korea, the Iranians, others who have been developing capabilities over time because they have access to technology, and as those developments continue to move forward, we see expanded range for these kinds of weapons, more payload carrying capability, and higher accuracy. These are all being developed by adversaries. When we think about some of the advances I China, they’ve already been mentioned. Once again, the ability to provide anti-satellite capability, ability to attack us in cyberspace. These are things that China’s investing in as a way to deal with our advantages and potentially put us in a vulnerable position so that our asymmetric advantage will no longer play out. In a thoughtful way, we need to take what we have as a current infrastructure in space and add to it once again with operational constellations. More can be done. We need to be able to take the challenges that I talked about, turn that into a persistent global surveillance and tracking for missile defense. We need the space situational awareness that’s been mentioned. And space protection, just to address the infrastructure that we have. We can take a lot of our traditional systems and talk about integrating them, tying them together with some of these newer constellations in a way that gives more benefits from the integration of the data and the fusion that comes with that data. We can yield benefits that go well beyond what the individual systems might deliver. An example of that might be taking what we have currently with missile warning, taking existing capabilities in terms of ONIR. We can tie those together with a space sensor system like you might see with STSS, and all of a sudden you’ve given yourself a global capability to observe and witness various kinds of threats and deal with them effectively. So the idea of tying systems together gives us a certain amount of robustness. In fact when you talk about putting additional systems on orbit to deal with additional threats, we still want to be observant of the fact that when we deploy these things we must be thoughtful in the way that we address the individual systems. We want our adversaries to know that we have protection. We are going to ensure survivability of these systems, that we will have that persistent surveillance that we’re looking for. We will have the dependable navigation and the robustness that we get when



we have this kind of layer of global and regional capabilities. So thinking back on these comments, we sit here in Beverly Hills, the month of November, pretty nice weather outside. Other parts of the nation starting to think about winter. Rounding up sand that’s been set aside; putting spreaders on trucks; getting plows put in front. There will be a time not too soon from now where people will start to be separated from their homes and work through blinding snow storms. They’ll have other hardships, people getting from their homes to grocery stores. So the elected officials in those communities, the people who have responsibilities for dealing with that kind of, what happens when the weather goes south and you have to deal with the snow storms, they are judged based on how well they prepared. They are judged based on the fact that they’re able to keep the roads open. They’re not so much judged on the fact that the sand has been sitting in the piles during the summer time. The plows and the spreaders have been sitting off to the side while the trucks have been doing other duties. It all comes into play when the adversity sets, that the community has been prepared and able to deal with it. I think we’re at this point in a global situation where there’s still a little bit of an opportunity for planning. We don’t want to lose sight of the fact that planning is so crucial and so important to deal with potentialities that would befall us with global warfare. Thank you very much for listening, and I look forward to questions as well. [Applause]. LtGen Sheridan: Thank you, Fred. Mr. Dave Thompson is Chairman and Chief Executive Officer of Orbital Sciences Corporation. He has been the Chairman and CEO of Orbital since co-founding the space technology company in 1982. Orbital is one of America’s leading space-related R&D and manufacturing companies with 2007 revenues in excess of $1 billion; with a work force of approximately 3400 people. Before starting Orbital, Mr. Thompson was Special Assistant to the President of Hughes Aircraft Companies Missile Systems Group and was a project manager and engineer on advanced rocket engines at NASA’s Marshall Space Flight Center.



As a result of his work at Orbital, he was awarded the National Medal of Technology by President George H.W. Bush, for his leadership of the company’s Pegasus launch vehicle team. Mr. Thompson is a Fellow of the American Institute of Aeronautics and Astronautics, the American Astronomical Society and the Royal Aeronautical Society. Dave? Mr. Thompson: General Sheridan, thank you. Congratulations to the Air Force Association for this symposium and for the work to broaden the appreciation of the Air Force’s contribution to our country with the activities going on this week in Southern California. And good afternoon, ladies and gentlemen. I thought I would offer a few observations and maybe a little different perspective on some of the challenges and opportunities that are confronting military space programs from the vantage point of a smaller space systems manufacturer with a nearly equal balance in our business between defense and non-defense space programs. There is certainly no shortage of challenges and problems facing the national security space community these days. In the Air Force’s continuing efforts to provide space force enhancement, space control capabilities and the essential space support services to allow these very effective forms of force multipliers to continue to serve in so many fundamental ways to our armed forces, we are all aware that there is today and there will probably be in the future even greater pressure on defense budgets. It may only be a few years from now that we look back on the present time of some $180 billion or so in combined research and development and procurement spending in fiscal year 2009 as being the good old days. In addition, I think we all are aware of wavering support from both Congress and even within the Pentagon itself to many important military space programs, I think brought about tin part because of perhaps an under-appreciation for the relevance of space in our current national defense strategy. Also due to some of the well known difficulties in acquisition programs of the past decade that have led to longer development cycles, substantial cost increase, and in some cases the prospect of significant gaps in orbit capability. Despite terrific ingenuity on the part of Air Force operators in finding new and creative ways to use our existing systems to do things they were not originally designed to do.



As already pointed out by several of my fellow panelists this afternoon, we’re all aware of an increasing vulnerability of both ground based and space borne assets to not only natural hazards in the space environment, but increasingly to the possibility of manmade threats as well. I forget who first said this, but I think in view of the challenges we face it’s a particularly inspiring quote that goes something to the effect that “large opportunities often masquerade as what appear to be insurmountable challenges”. If that’s true for us then we’ve certainly got a lot of large opportunities ahead. I’d like to just comment on two of those here. First, some alternative space architectures that may be permitted by current technology to serve certain mission areas that have not been developed in the past; and second, new business models, expanded modes of cooperation between the U.S. government and our domestic commercial space sector in ways that could benefit both. In the first case, I’ll just draw a somewhat of a distinction between what I would call the traditional architecture for most of our operational space systems that probably has an aircraft analogy in our front line fighters and bomber fleets, the F-22 and the B-2 today, where we use a fairly small number of large, very capable, very impressive, often multi-mission platforms to develop the kind of and provide the kind of space capabilities that have come into their own over the past 10 or 15 years. These systems, though, as you’ve heard before are often plagued by fairly long development and deployment cycles. So it’s natural to think about, as technology has advanced, what alternative approaches we might take to disaggregate some of the functions on these large platforms into a greater number of smaller and in many cases single mission systems that offer still impressive performance and capacity, but not quite up to the standards of some of the larger systems that are in service today. These smaller systems, from an engineering and production standpoint these are not simple systems, but they are a little easier to develop and test so they can be developed and deployed on fairly short cycles. This has a couple of positive side effects. One of those is the allowance of quick spirals in terms of the technology that goes into succeeding blocks of these systems. Another side effect, though, that we’ve seen at my company which is quite positive in terms of career



development and retention are the benefits that go along to a 30 or a 35 year old engineer who by the time they’ve been in our industry for six or eight or ten years has had the chance to go through three or four or some cases five spacecraft or launch vehicle development and deployment cycles. And that’s something that I think is not only exciting to our younger technical people, but it builds up a terrific base of experience that then can be drawn on for the following 25 or 30 years later in their careers. The aircraft analogue here would be probably most usefully drawn to the UAVs -- the Global Hawks and Predators that started out with a certain amount of skepticism when they were introduced but which I think we would all agree today have well exceeded expectations in the ways that they’ve been employed in recent years. Clearly we often find ourselves up against very stubborn and pesky laws of physics that do not allow disaggregated architectures to be used for all missions, but almost equally clearly we have to be careful that we’re not over-investing in traditional approaches when we reach points of diminishing return on those systems. The Air Force never has cost overruns in its space programs, so I couldn’t draw on actual military space data to illustrate another interesting point about these smaller architectures. [Laughter]. Instead I used NASA data from the past decade or so. There are about 30 space science programs that our civilian space agency’s carried out during that time. I just plotted on this graphic the results of, as those programs have been completed, the cost increases that have occurred compared to their original cost. You can see they sort of fall into a couple of categories. Missions that had an original cost including their ground segment as well as their launch vehicles of $500 million or less, which tend to be less complex, typically higher technology readiness levels, shorter cycles and so on, that came in within reasonable amounts of their original cost, averaging about a 15 percent total cost increase due to a variety of factors as they ran through their deployment cycles. Then a group of medium missions that didn’t do quite as well, overrunning on average a little over 50 percent. Then a handful of very large missions really pushing the state of the art, doing things that have never been done before, and as a result experiencing fairly high levels of cost growth. In fact of these 30 or so missions, ten percent of them, the three big ones, contributed about 70 percent of the total cost growth that NASA experienced.



What that has meant for the civilian space agency has been that basically they get to spend Congress’ appropriations for about four years on their planned missions, and then every fifth year they take a breather and fund all the overruns. Clearly that’s not something we would like to see in the future. So that’s another potential benefit of some of these disaggregated missions when the laws of physics and other factors permit. Finally, let me also cite another new approach that we’ve actually been using for quite some time but I think we may be able to expand this to the mutual benefit of both military space programs and commercial satellite operators in the future. For as long as I can remember dating back if not to the ‘60s certainly to the 1970s, the Defense Department and the U.S. commercial communication satellite operators have worked together in a very productive partnership. The commercial satellite sector today operates over 225 geosynchronous satellites that provide various kinds of communication coverage to virtually the entire globe, offering geographic ubiquity, fast response, capacity deployment, and ever-increasing economic efficiency to commercial as well as governmental customers. In fact the history of this industry has been one of consistent improvements in its economic performance. On average, commercial satellite manufacturers have achieved about a ten percent per year improvement in the capital cost per unit of communication capacity for three decades. So if you compound a ten percent improvement over 30 years, it turns out you get about a 25-fold improvement in the capital cost per unit of communication capacity which is very impressive. Accordingly, in addition to growing their non-government businesses many times over, commercial ComSat operations today provide over 80 percent of the bandwidth used by our armed forces that are deployed around the world. Commercial satellite networks power the Global Hawks and the Predators, they transfer data to and from the battlefield providing really life saving information superiority to our soldiers and our airmen who are deployed overseas. They also provide a lot of basic communications connectivity that allows the biggest business enterprise in the world, namely the U.S. Department of Defense, to operate so effectively on a global basis. These same commercial operators working hand in hand with the Defense Department have invested in a variety of security enhancing technologies that include things like



command encryption and anti-jamming controls in their satellites, and they provide through the simple fact of the numbers of satellites that they have, a level of operational resilience through their fleet proliferation. So this has been a real success story that’s been building now for decades. But I think an even more productive and more multi-faceted partnership can be established as we look out over the coming decade. I think one of the important steps forward to make this multi-layered partnership really blossom is going to be to move away from single year, often funding through the various supplementals that have characterized the last five or six years to longer term planning and budgeting within the baseline military programs for commercial satellite capacity. This is going to be more important for the commercial operators too, because they are now much more closely matching their investment in new satellite capacity to their known customer demand. It’s no longer a case of building it and hoping customers will come. This industry has matured to the point that they’re very carefully managing their new capacity additions with what they know their customers’ long term needs are going to be. A second area that has just started to be pioneered by SMC over the past couple of years and several I think pioneering ventures involve the use of excess capacity in terms of power and mass and physical real estate on commercial communication satellites to carry out technology demonstration and even some operational missions by hosting secondary government payloads on commercial satellites. This is something that the U.S. satellite manufacturers can make available to U.S.-flagged carriers like IntelSat, SES Americom and others with perhaps as many as three to five opportunities every year to fly DoD secondary payloads on these commercial satellites. Finally I think we’ll see expanded opportunities for cooperation on improved space situational awareness and other security measures that will make commercial satellites even more capable of serving critical defense needs in the future. In conclusion, following along the lines of these examples and other similar new approaches, I’m hopeful that the Air Force and its partners in the U.S. industrial base will be able to redouble our efforts over the next couple of years to translate some of today’s very tough challenges into tomorrow’s even greater opportunities.



Thank you very much. [Applause]. LtGen Sheridan: Thank you, Dave. Mr. Mike Gass is President and CEO of United Launch Alliance. In this role Mr. Gass serves as the principal strategic leader, overseeing all business management and operations. Before joining ULA Mr. Gass served as Vice President and General Manager of Space Transportation for Lockheed Martin Space Systems Company, responsible for the Atlas, Titan and Advanced Space Transportation product lines and all space launch activity. Prior to this assignment Mr. Gass served as Vice President, Atlas Evolved Expendable Launch Vehicle programs for Lockheed Martin Space Systems, and as Vice President of the Atlas Launch Vehicle program. He was responsible for the Atlas II, III and V launch vehicle programs and held additional senior operational and management positions. Mr. Gass also served as Vice President of Production and Material Operations with responsibility across all Lockheed Martin Astronautics Launch Vehicle and Spacecraft programs. Mr. Gass: Thank you, General Sheridan. Thank you. [Applause]. Thank you AFA and thank all of you for still being here at 5:00 o’clock on a beautiful day. [Laughter]. Knowing I was going to be last on the panel, I’m going to build on the theme that Joanne inspired us with a quote from President Kennedy and choose not only to tell the new administration what they need to do for us, but we must also tell them what we can do for them in these difficult times. So it’s really a blend of we’ve got to be able to innovate and continue to extract value from our capabilities and be able to do that in these difficult economic and national security difficult times. Let me start with a picture. Many of you may see a picture of dancing rockets, and I’d like to share with you what I see.



One, I see an incredible great family portrait that many of you have contributed to. Each of you in this organization in probably some small way or very large way had a key part in delivering this incredible capability. I also see a hundred years of experience built on the shoulders of predecessors, some difficult lessons learned and experiences they had in achieving the capability that we are leveraging today. I also see a successful evolved program, building on some heritage. General Cooning shared earlier about how do we continue to leverage other investments? How do we continue to build on those architectures and extract more and more capability? I also see one of the many national security systems that were recapitalized in the ‘90s. I think some of use 11 out of 12 or 12 out of 13 of our major national security systems were recapitalized at the early capability is just coming on line here in the 2000’s and the late 2000’s, but I also see this project as one where the Congress got a great deal. This is one where it was delivered on schedule, within budget. I also see an opportunity for lots of innovation. Last night we had an opportunity to go to the California Space Theme Awards and see Colonel Parkinson get an award, a lifetime achievement award. What struck me was his comments about GPS and being the program leader for NAVSTAR and not being able to envision all the capability that was able to be extracted out of the system, both militarily, civil, science, as well as commercial opportunities. I think we have that same opportunity to innovate and build off of these EELV systems. So what do we tell the administration? We tell them what we can do for innovation, and we need to share what we need from policy architecture to many things that my colleagues just shared so that we can deliver on those innovations. Launch is often called the truck. We deliver the energy to fight gravity that delivers those space affects and those key payloads that many of my colleagues build and deliver. We must continue to improve reliability. We’ve got a great track record. I stopped counting mission success streaks. It doesn’t matter. It’s the next one that counts. The systems, the processes, they don’t remember those streaks. We’ve got to be on guard. I always tell folks if I stop taking Pepto-Bismol and my



antacid before launch, it’s time to retire. If you’re not scared, you don’t understand the business. [Laughter]. Space is and will remain a key strategic environment. We must maintain that strategic asymmetric advantage. We must continue to exploit our situational awareness. We must improve our operational responsiveness and mission flexibility. Also we need to utilize space for building strategic alliances. That family picture has many global partnerships embedded in those systems. May of those global partnership were started when the administration encouraged global partnerships as part of space programs. Then we went to don’t do it. Are we going to go back? We need that consistency. We need the constancy of purpose and we need to understand the strategic benefits of it. Earlier, listening to Colonel Utterback share Pacific Rim opportunities, I look at some of those great programs -- JSF, C-130 -- all have huge strategic alliances in their development, and then when they get deployed how they’re utilized in the field for operational. I think we have the same need inside space and we need that administrative policy leadership to guide us which direction we’re going. Launch must continue to be more cost effective. Everybody complains about launch costs. That family picture halved the cost of delivering payloads into space, and the question now is what have you done for me lately. We know that. We need to continue to improve. But I’d leave that it’s time for us to leverage the investments, the recapitalizations. We need to build on those investments, extract more value out of them, make them more operational, more responsive, more reliable. General Greaves. We learned a lot from this experience with STP. You had to lead an incredibly challenging operational mission there. Five payloads at one time. The whole goal was to be able to innovate and deliver different kinds of capabilities with one mission. We were extracting value out of that one launch for numerous purposes. One of the ones I’m most proud of on that picture is the opportunity that was created for the cadets out at the Air Force Academy. I had the opportunity last week to go to the dedication of the Space Control Center that was dedicated in former Secretary Wynne’s name, and have the opportunity to meet with some of those cadets and see what they’re doing in being hands-on, involved in space. These kinds of capabilities are available for us in space today and leveraging capabilities.



The age of every launch is performance limited is over. The days that we had unique boosters for every mission is over. We have the capability to be more operational, more flexible, more innovative. We just need to learn from these lessons and continue to build on them, not be afraid of them. Thank you, General Greaves, for your leadership to get us through that learning experience. When we look at this, these are just a whole series of ideas of how we extract more capabilities. Putting more secondary payloads, dual payloads, putting things that fly off the booster for low earth orbit capability. Experiments, real mission capability needs, if you will. In some cases covert or camouflaged. One of the great comments somebody once said is why don’t we just put dummy payloads up. Let the enemy try to figure out what they are and use some of their resources chasing some of these other payloads. Some of these ideas are back to the future. In the 1960s one of the people in our organization looked at our records. There were 200 experiments considered on the Atlas program for secondary payloads. Sixty-seven of them actually flew in about a seven year period of time. People were innovating. Quick turnaround, finding windows of opportunity. And I’m sure an incredible amount of lessons and operational capability was extracted from it. But these also represent opportunities for global partnerships with many of our strategic allies. Many of these projects are already underway with some of our key allies around the world. David just shared about hosted payloads. A great opportunity for asymmetric capability. But when we talk to some of those key customers, some of the things they are is afraid to work with us in the U.S. partly due to policy, partly due to our, if you will, arrogance of it needs to be singular focus. We have to change and be able to extract the value of those hosted payloads. It is an asymmetric capability. I always love the comment of putting a DoD payload on the same satellite that’s broadcasting Al-Jazeera. [Laughter]. What are we doing? At the end of the day at ULA we have to be focused on operational excellence. We brand operational excellence as perfect product delivery.



We’re very proud of our record of mission success and we consider that the perfect product. But we’re not satisfied yet with our delivery. How we got to that mission. It’s fraught with lots of challenges, lots of last minute diving catches, lots of processes, lots of process escapes. We don’t call that perfect delivery yet. We have to strive for perfect delivery. We’re in that pursuit of perfection, knowing full well that we’ll achieve excellence in that pursuit. Thanks to the great Vince Lombardi for reminding us of that. When we do deliver that perfect delivery, we’ll have program success and along with that perfect product have mission success. With that, we’ll be able to build on our credibility and be able to share with the benefit of credibility recommendations to the administration of what we need -- that stable architecture, those policies that enable strengthening our industrial base, strengthening our educational system, and be able to deliver more value for our nation’s critical resources. Thank you. [Applause]. LtGen Sheridan: Thank you, Mike. Looking at my watch here I think we’ve probably got about ten minutes for questions to hold to the 1730 stop time, so Todd, have we got some good ones from the audience? This one’s on STEM. With 30 to 40 percent of the aerospace industry eligible for retirement in the next three to five years, how are the military civil servants and their industry counterparts hiring, mentoring and promoting the younger work force to lead and take charge as qualified individuals? We touched on this a little bit in a couple of the talks but I’d open that one up to any panel members who would like to comment. Panelist: We’re all focused on the demographics of our workforce, but I’m incredibly, if you will, on the optimistic side of the capability of our nation. There are things we have to do, but the quality of the students that are being prepared by our university systems are great.



We all know we have to be more efficient, so the sheer numbers are different, if you will. Just as David talked about the capabilities, the multiplier effect of efficiency on the communication satellites, we’re getting more productivity out of our new employees. We have to develop them, we have to do the knowledge transfer to make sure all those hundreds of years of experience gets cast into their brain so that they can lead in the future. The capabilities are there. What we’re worried about, and I know I’m personally involved in it in the state of Colorado is the linkage of the education system. Everybody’s budget pressured and may of our great institutions for science and math are being challenged. We need to be great advocates of maintaining their capabilities so that they continue to deliver the pipeline of key individuals that we need. Panelist: I would just comment that at Northrop one of the things we’ve been doing is maintaining a pretty active campus recruiting program. We continue to hire people right out of college. And when we make assignments we make sure there’s at least a mentor for those people to spend time with. We generally like to assign teams of people to a project so if there’s a ratio of one mentor and a couple of new people to go with that, at least it’s an opportunity to get those folks engaged very quickly in the dialogues that happen with more senior engineers and help pull them along and give them additional responsibility. Panelist: If I could also add, like my colleagues at the table, we have active college recruiting and internships. But I think probably one of the biggest things is to generate excitement in the career field. One of the ways you do that, and I know Dave talked about it as well, is to shorten the cycle times. Let somebody see the fruits of their efforts. By having systems from start to finish that span about four years instead of about 10 or 12 years, we’ll be able to generate that excitement again. LtGen Sheridan: One more question I think we have time to tackle from two or three aspects. It’s about TSPRR, Total System Performance Reliability and Responsibility. The question is, has the pendulum swung too far to correct the perceived deficiencies of TSPRR? And have the laws of TSPRR been correctly diagnosed? Therefore, do we have the right approach at this point in time based on what we’ve learned back in the ‘90s? [Laughter].


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Panelist: I think the issue that we’ve encountered in TSPRR was probably, we did probably over-react to the difficulties that some of our TSPRR programs had. Notably SBIRS. I think the issue really revolved around total system performance responsibility became total system performance relegation and was translated into government gets a crack at just changing the requirements willy-nilly because the contractor has total responsibility for delivering. I also think that TSPRR was a very powerful construct on programs like U-2 upgrades and maintenance. It’s a more challenging construct to employ on a development program. But as far as the pendulum swinging too far, I do fear that we are disintegrating activities in a way that is almost in reaction to TSPRR as opposed to being thoughtful about how to go get best value for the warfighter. It is very challenging for I think the government acquisition cadre today to administer --

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Documents

Industry Panel LtGen John T. Sheridan, Commander, …secure.afa.org/events/natlsymp/2008/scripts/Industry_Panel.pdfCraig Cooning, The Boeing Company . Michael Glass, United Launch