Implications of an Air Force Budget Downturn on the Aircraft Industrial Base: An Exploratory Analysis
Abstract
The U.S. Air Force is facing a number of challenges as a result of the current defense budget downturn along with the uncertainty of its timing and magnitude. This report focuses on the challenge of modernizing the Air Force's aircraft fleet while trying to sustain the industrial base with limited funding. Complicating this challenge is that the pattern of Air Force spending has shifted dramatically away from new aircraft procurement since the previous spending downturn. Moreover, the emergence of a competitor with significant technical and economic capability is another major difference from the previous downturn. Therefore, there is a need for careful strategic management of investment choices--and this goes beyond just aircraft. The Air Force will first need to define its capability priorities that fit within budget constraints, then use those priorities to shape a budget strategy. We explore six different budget strategies for aircraft procurement: from a new high-tech fleet to sustaining and modifying the existing one. Each strategy under a constrained spending future results in challenges and issues for the industrial base. The Air Force will need to help mitigate industrial base problems that result from their chosen budget strategy--but some issues may be beyond their control. There are lessons from foreign acquisitions that the Air Force can leverage to avoid pitfalls. Most importantly, shortfalls in both industry and government skill bases can cause significant problems later during execution. Finding ways to sustain key skills during a spending downturn will be important for the future and potentially produce longer-term savings.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2013
- Accession Number
- ADA591779
Entities
People
- John C. Graser
- Mark V. Arena
- Paul Deluca
Organizations
- RAND Corporation