Can The United States Afford Not To Dominate The Tiltrotor Aerospace Market?

Submitted Testimony by Frank J. Gaffney, Jr.

before

the House Public Works and Transportation Committee

Subcommittee on Aviation

25 April 1990

Tiltrotor: The Next FSX?

Slightly over a year ago, a furious debate swept Washington and the Nation. Members of this Committee, others in the Congress, Cabinet officers in the new Bush Administration, policy analysts and leading industrialists were aghast at the imminent prospect of a technology in which the United States leads the world — state-of-the-art aerospace design and manufacturing — being sold off to the Japanese.

At that time, the issue was the so-called FSX, an advanced fighter aircraft Japan planned to design and develop with the assistance of the American manufacturer of the F-16, General Dynamics. Legitimate questions were raised about the wisdom of this transaction:

• Would it do for the Japanese aircraft manufacturing industry what Detroit had done several decades earlier for Tokyo’s then-nascent automobile industry?

 

• Would the United States lose its competitive edge in this technological field and dominant world market share as it has in so many others, from computer chips to VCRs?

 

• Would the search for short-term profits prompt a U.S. companies to sell the United States’ technological "seed-corn," and in so doing make it likely that this country would shortly become a net importer, instead of an exporter, of derivative products?

Unfortunately, the same questions might well be posed today about another aerospace technology in which the United States currently enjoys a decisive competitive advantage — thanks to a farsighted and ambitious Defense Department program and the congressional support it has long received: the V-22 "Osprey" tiltrotor aircraft.

Worse yet, I fear that — as with the original FSX fiasco — unless Congress once again demands an executive branch "course correction," this critical advantage will be lost.

V-22: State of the American Art

As members of this Committee are well aware, the Bush Administration has decided to abandon the V-22 tiltrotor program. Ironically, this decision comes just as the government’s eight-year, $2 billion-plus investment aimed at realizing the potential of the tiltrotor technology is beginning to pay off. Thanks to this sustained investment, myriad engineering challenges have been overcome that previously precluded a single aircraft design from taking-off and landing like helicopters and flying horizontally like conventional airplanes.

Killing the Osprey: An Incredibly Shortsighted Decision

The Administration’s decision is the more bizarre — if not simply irresponsible — for its being patently out of step with emerging realities in several areas:

The Burgeoning Defense Requirement

 

First, the Defense Department’s need for tiltrotor capabilities was formally recognized back in 1982. It was deemed then to be essential for as many as eleven different military missions. These ranged from transporting Marine and Army units and much of their equipment into battle, to search and rescue, special forces and electronic warfare operations. Today, the armed forces see the V-22 as appropriate to more than two dozen functions — including the increasingly important task of drug interdiction.

A Godsend for Civilian Transportation

 

Second, the applicability of tiltrotor technology to a variety of civil purposes has become ever more widely appreciated. To cite just one, in an era of increasingly gridlocked urban airports and inadequate service to many rural communities following airline deregulation, the V-22 promises cost-effective solutions to intractable transportation problems.

Incredible as it may seem, however, in his recent, 126-page Statement of National Transportation Policy — much of which was devoted to addressing the critical aviation-related infrastructure problems — Secretary of Transportation Sam Skinner made but two passing references to the contribution tiltrotor technology could make to solving such problems. Instead, he chose to emphasize the need to build new airports and expanding existing ones to the tune of $30-plus billion, a need that could be radically reduced were the United States instead to exploit the vastly cheaper "vertiport" approach possible with tiltrotors.

The Foreign Dimension

 

Third, other nations facing similar logistical problems are under no illusion about the brilliant future for tiltrotors in their domestic markets as well as in the international aerospace industry. In particular, Japan’s limited useful land mass makes such a system an imperative for its transportation needs in the 1990s and beyond.

Not surprisingly, several of these nations are actively pursuing their own variants of the V-22. Leading European companies (including Aerospatiale, Westland, and MBB) have teamed together to form an organization called Eurofar for the purpose of developing and marketing a tiltrotor aircraft for commercial and military markets. The Soviet Union’s Mil Design Bureau is reported to have as many as three different tiltrotor designs under development for various military applications.

Last but not least, Japan is also aggressively seeking to acquire this technology. Its Ishida group has touted a similar system, designated the TW-68, which was displayed at last year’s Paris Air Show. Interestingly, the TW-68 is being developed by a team of designers formerly employed by Bell Helicopter, the company that (together with Boeing Helicopter) has been readying the V-22.

In fact, so keen is Japan’s interest in the Osprey technology that Bell was the only companywe will build it." visited by the minister of the Japanese Ministry of International Trade and Industry (MITI), Hikaru Matsunaga, during his visit earlier this year to the United States. At the end of his tour of the V-22 line, he confided to Bell’s CEO, "If you produce this aircraft, I guarantee you we will buy it; if you do not, I guarantee you

Need I say more about the FSX parallel?

Why is the U.S. V-22 An Endangered Species?

In a paper published by the Center for Security Policy last February entitled The Next FSX Fiasco?, we identified in some detail the factors that produced the Defense Department’s astonishingly shortsighted decision to terminate the V-22. While many of these factors involve analytical techniques and the weighting of departmental priorities that are outside the purview of this Committee, I believe one is not: The unwillingness of the key organization within the Office of the Secretary of Defense — Program Analysis and Evaluation (PA&E) — to attach appropriate value to the benefit that will accrue to the Nation as a whole from a given defense program.

Indeed, an appreciation of this value was evidently entirely absent from the PA&E calculations that underpinned that organization’s — and ultimately Secretary Cheney’s — opposition to operationalizing the V-22. There was simply no place in the Pentagon’s deliberations for this powerful argument: If the armed forces help create an industrial infrastructure for tiltrotor technology and validate its performance (something airlines simply cannot afford to do on their own when radically new technologies are first introduced — as our experience with the helicopter, the jet engine and the wide-body jet, among others, have shown), the return to the taxpayer in terms of new employment opportunities, improved transportation services and increased export potential will make the money initially invested doubly well spent.

Similarly missing from the PA&E analysis was any assessment of the cost the United Stateswere, as a result, obliged instead to buy this technology back from the Japanese or other sources. Since someone is going to develop a derivative of the V-22 and since an aircraft with those capabilities is going to continue to be the preferred approach for a variety of military and civilian purposes, it appears inevitable that this country would eventually have to import such systems — or manufacture them here under license. might ultimately incur if it were to pass up the opportunity to be the world’s leading manufacturer of tiltrotor systems and

Getting the Most Out of Defense Investments

Let me be clear, I am not among those who believe that we ought to use the defense budget as a jobs program or that we should be pursuing military programs for other than legitimate defense purposes. I am, nonetheless, convinced that where clear military requirements do exist for a system — as is certainly the case with the V-22 — if the Defense Department’s investment in it is likely to pay larger dividends to the taxpayer through commercial and other spin-offs, that consideration should be very much a factor in the decision whether to proceed with development, production and operational validation of that system.

Rarely has this been more true than at the present time, when the defense budget is shrinking and the competition for federal resources is becoming more intense than ever. Under these circumstances, a special premium should be placed on the allocation of Defense Department resources in ways that provide multiplied benefits to the Nation.

Congress Must Save the Osprey

I commend those of you in the Congress who are determined to preserve the United States’ preeminent position in the area of tiltrotor technology. Your motivations are diverse: appropriate concerns about America’s industrial base and the danger of a new FSX fiasco; recognition of the urgent need in the emerging so-called Post-Cold War world to provide the Marine Corps (and other elements of the U.S. armed forces) with systems like the Osprey that maximize the flexibility and mobility crucial to effective power projection missions; appreciation that the tiltrotor is the ideal instrument for performing a variety of drug interdiction and related functions; and of course, the recognition that the Osprey can make a dramatic contribution to revolutionizing the air transportation systems, both in this country and abroad. But the bottom line is the same — the United States must proceed with production and operational use of the V-22.

Fortunately, a congressional rescue mission can be effected fairly easily, thanks to the Osprey contractors’ commitment to the program and that of the Marines — who, to their lasting credit, have never wavered (despite intense pressure from the Office of the Secretary of Defense) in their insistence that the Osprey is the Corps’ top procurement priority. The V-22 contractors have offered to restructure the program so as to reduce up-front costs somewhat and the Marine Corps can identify specific offsets (for example, the PA&E-imposed helicopter purchase and M-1 tanks) that they are prepared to give up. Following such a strategy would permit Capitol Hill to save the tiltrotor without savaging other Defense Department accounts.

If, as now seems inevitable, Congress is going to make radical changes in other defense programs, it would be well advised to keep in mind the following priorities: Invest in high technology that will serve multiple purposes — ideally, both military and civilian — and will support the national quest for technological competitiveness; equip the armed forces with systems that will enhance their flexibility, mobility and interoperability; and eschew the advice of those who would have the country make penny-wise and pound-foolish decisions, particularly those who would squander enormous investments made in the development of key systems just at the point where the pay-off is in sight.

If Congress follows these guidelines, it will fund the tiltrotor, irrespective of the budget level ultimately decided upon for the Defense Department. In doing so, it will provide a clear indication that at least the legislative branch recognizes the United States’ long-run technological requirements and that it is prepared to ensure they are met.