FILES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01315R000100060001-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 40
• Document Creation Date: December 16, 2016
• Document Release Date: September 8, 2004
• Sequence Number: 1
• Publication Date: April 16, 1977
• Content Type: LIST

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FILES DATES
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The Director of Central Intelligence
Wdshin{ton, O C. 20505
16 APR 1977
Dear Karl,
Thank you for your letter of March 31 and for your kind comments
concerning my new responsibilities. It is gratifying to know we
have the interest and support of people in influential positions
such as yourself.
I am well aware of the very important contribution the members
of the Aerospace Industries Association of America make to the
national defense and security of the United States. The
representatives of the industry you expect at your annual spring
conference is indeed a Who's Who of the aerospace industry. I very
much wish I could be with you in Williamsburg but unfortunately I am
completely scheduled during that period of May and just can't take
on any additional commitments. I very much appreciate your thinking
of me and regret that I am forced to decline.
Very best personal wishes to you and the AIA for a pleasant and
productive conference,
Yours,
STANSFIELD TURNER
Admiral, U.S. Navy
Mr. Karl G. Harr, Jr.
Aerospace Industries Association of America, Inc.
1725 De Sales St. N.W.
Washington, D.C. 20036
Drafted by: Herbert E, Hetu/mb; 12 Apr-) 77
Fist; Org-Addre ssee
l-DCI w/basic
1-ER wo/basic
1-A/DCI/PA w/basic (Cindy)
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AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA, INC.
March 31, 1977
Admiral Stansfield Turner
Director of Central Intelligence
Central Intelligence Agency
Washington, D.C.20505
Dear Stan:
Those of us who have known you over the years and have watched
your career evolve are especially pleased and proud that the President
selected you to carry the heavy responsibilities you now bear. As an
old friend and former Intelligence type, I have no doubt about the
superb leadership our Intelligence Community now has.
In past years this Association has been honored by appearances at
its annual spring conference by individuals such as one of your prede-
cessors, Alan Dulles, numerous Cabinet officers, and two Vice Presidents
of the United States. Our spring meeting, as you can deduce, is intended
to provide a platform for dialogue between the senior executives of one
of the most vital segments of American industry and representatives
of the government.
We believe this conference can provide you with a unique opportunity
to acquaint the aerospace industry's chief executives with the Carter
Administration's outlook on key international issues. Obviously, the
aerospace industry and the government play vital, mutually supportive
roles in the maintenance of our nation's military and economic strength.
Thus, we feel that we can function best in the national interest with
open and frank discussion of the government's hopes and plans for the
future. All such discussions, of course, are entirely off the record
and in the thirty years we have held this conference we have never been
embarrassed in this regard.
It is in that sense that I invite you to address our conference's
opening session at 6 p.m., Wednesday, May 18. The conference is held
at the Conference Center in Williamsburg, Virginia, a location which
could allow you to be "down and back" in a few hours.
Stan, I sincerely believe that the national interest would be well
served by your discussions with this group of men who play such an im-
portant supportive role to the government in the maintenance of our
national security. I also think you would enjoy it and I know we would.
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Adm. Stansfield Turner -2- March 31, 1977
I hope very much that you will be able to join us on the evening of
May 18 and look forward to your favorable reply.
A list of the expected industry attendees is attached.
Again, my congratulations on your appointment.
Yours very truly,
Kar G. Harr, Jr.
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 Approved For Release
AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA, INC.
AIA SENIOR REPRESENTATIVES
Donald S. Malmberg
President
William L. Gore
Senior Vice President
A. G. Handschumacher
Chairman
Mac C. Adams
Senior Vice President & Group Executive
William C. Purple
President
T. A. Wilson
Chairman & Chief Executive Officer
George H. Hanauer
President
Guy C. Shafer
Group Vice President
John W. Dixon
Chairman of the Board & President
Harry H. Wetzel
President & Chairman of the Board
Donald J. Grommesh
Vice President - Research & Engineering
David S. Lewis
Chairman & Chief Executive Officer
Gerhard Neumann
Vice President & Group Executive
James E. Knott
Vice President & General Manager
Lawrence H. Pomeroy
Division President
Aerospace Division
Abex Corporation
Aerojet-General Corporation
Aeronca, Inc.
Avco Corporation
Aerospace-Electronics Group
The Bendix Corporation
The Boeing Company
The Marquardt Company
CCI Corporation
Control Systems Division
Colt Industries Inc.
Chandler Evans Inc.
E-Systems, Inc.
The Garrett Corporation
Aircraft Division
Gates Learjet Corporation
General Dynamics Corporation
Aircraft Engine Group
General Electric Company
Detroit Diesel Allison Division
General Motors Corporation
Engineered Systems Company
B. F. Goodrich Company
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Morris B. Jobe
President
Joseph G. Gavin, Jr.
President
C. M. Martenson
Chairman & Chief Executive Officer
E. D. Crittenden, Jr.
General Manager
Goodyear Aerospace Corporation
Grumman Corporation
Heath Tecna Corporation
Industrial Systems Department
Hercules Incorporated
John W. Anderson
Vice President & Group Executive
Allen E. Puckett
President
John B. Jackson
President
Rand V. Araskog
Executive Vice President, ITT Corporation
H. J. Smead
President & Chief Operating Officer
K. Robert Hahn
Executive Vice President
Robert W. Haack
Chairman of the Board
T. G. Pownall
Executive Vice President, Martin
Marietta Corporation
S. N. McDonnell
President & Chief Executive Officer
Gerald J. Lynch
Chairman & Chief Executive Officer
Thomas V. Jones
Chairman & Chief Executive Officer
Gerard A. Fulham
Chairman of the Board & Chief Executive
Officer
D. Brainerd Holmes
President
Aerospace & Defense Group
Honeywell Inc.
Hughes Aircraft Company
Federal Systems Division
IBM Corporation
ITT Aerospace, Electronics,
Components & Energy. Group
Kaiser Aerospace & Electronics
Corporation
Lear Siegler, Inc.
Lockheed Aircraft Corporation
Martin Marietta Aerospace
McDonnell Douglas Corporation
Menasco Manufacturing Company
Northrop Corporation
Pneumo Corporation
Raytheon Company
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 -3-
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Irving K. Kessler
Group Vice President
Robert Anderson
President & Chief Executive Officer
Frederick W. Garry
Chairman, Chief Executive & President
William F. Schmied
Executive Vice President
Richard L. Gehring
Vice President, Defense ,& Aerospace
Carl L. Sadler
President
James L. Murray
President
Teck A. Wilson
President
Robert S. Ames
Senior Vice President
James M. Stone
Group Vice President, Government
Systems Group
RCA Corporation
Rockwell International Corporation
Rohr Industries, Inc.
The Singer Company
Sperry Rand Corporation
Sundstrand Corporation
Teledyne CAE
Teledyne Ryan Aeronautical
Textron, Inc.
Thiokol Corporation
L. S. Wyler
Chairman of the Board & Chief Executive
Officer
Richard D. DeLauer
Executive Vice President
Harry J. Gray
Chairman, President & Chief Executive
Officer
Paul Thayer
Chairman of the Board & Chief Executive
Officer, The LTV Corporation
Bernard J. Bannan
Chairman
T. J. Murrin
President
THE Corporation
United Technologies Corporation
Vought Corporation
Western Gear Corporation
Public Systems Company
Westinghouse Electric Corporation
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? ~~ .''_~ ' !~ is
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DATE RECEIVED:7 April 1977
1. INFORMATION REGARDING THE APPOINTMENT:
a. Source: Teel :-
b. Type of Event: Ad
c. Special occasion:
d. Date/Time:
e. Location:
f. Significant info:
3. RECOMMENDATIONS:
Schedule Regret
Wednesda
18 Ma
Conference Center
4. DCI DECISION:
a. SCHEDULE__
b. PASS TO: DDCI____
5. AIDE FINAL ACTION:___
D/DCI/IC
DATE OF EVENT: 18 May 1977
Karl G. Harr, Jr., Aerospace
Ltr Fm: Industries Assp. of America
Industries Association's springconference
1800 hours
viiiliamsbur Virginia
NO
Remarks
SEE ME_
D/DCI/NI OTHER:
6. INFORMATION ROUTING:
a COMMENTS: -- - -
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BEST COPY
Available
THROUGHOUT
FOLDER
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I CONTENTS
T. A. WILSON, Chairman of the Board
S. N. McDONNELL, Vice Chairman of the Board
KARL G. HARR, JR., President
SAMUEL L. WRIGHT, Vice President/Secretary
GEORGE F. COPSEY, Treasurer
T. A. WILSON, The Boeing Company
S. N. McDONNELL, McDonnell Douglas Corporation
T. G. POWNALL, Martin Marietta Corporation
KARL G. HARR, JR., Aerospace Industries Association
MARK MORTON, General Electric Company
GERALD J. LYNCH, Menasco Manufacturing Company
D. BRAINERD HOLMES, Raytheon Company
R. D. DeLAUER , TR W Inc.
2 Message to the Membership
4 Aerospace Operations Service
8 Aerospace Procurement Service
13 Aerospace Research Center
15 Aerospace Technical Council
21 International Service
23 Office of Public Affairs
25 Traffic Service
27 Organizational Chart
WILLIAM L. GORE, Senior Vice President, Aerojet-General Corporation
HENRY E. HOCKEIMER, President, Aeronutronic Ford Corporation
MAC C. ADAMS, Vice President & Group Executive, Avco Corporation
WILLIAM C. PURPLE, President, Aerospace-Electronics Group, The Bendix Corporation
T. A. WILSON, Chairman and Chief Executive Officer, The Boeing Company
JOHN W. DIXON, Chairman of the Board & President, E-Systems, Inc.
DAVID S. LEWIS, Chairman and Chief Executive Officer, General Dynamics Corporation
MARK MORTON, Vice President & Group Executive, Aerospace Group, General Electric Company
JAMES E. KNOTT, Vice President & General Manager, Detroit Diesel Allison Division, General Motors Corporation
C. B. McKEOWN, Executive Vice President, Engineered Systems Company, The B. F. Goodrich Company
A. E. PUCKETT, Executive Vice President, Hughes Aircraft Company
JOHN B. JACKSON, President, Federal Systems Division, IBM Corporation
RAND V. ARASKOG, Vice President & Group Executive, ITT Defense-Space Group
DANIEL J. HAUGHTON, Chairman of the Board, Lockheed Aircraft Corporation
PAUL THAYER, Chairman and Chief Executive Officer, The LTV Corporation
T. G. POWNALL, President, Martin Marietta Aerospace
S. N. McDONNELL, President & Chief Executive Officer, McDonnell Douglas Corporation
GERALD J. LYNCH, Chairman and Chief Executive Officer, Menasco Manufacturing Company
THOMAS V. JONES, Chairman and Chief Executive Officer, Northrop Corporation
D. BRAINERD HOLMES, President, Raytheon Company
ROBERT ANDERSON, President and Chief Executive Officer, Rockwell International Corporation
ROBERT E. McDONALD, President, Sperry Rand Corporation
BARRY J. SHILLITO, President, Teledyne Ryan Aeronautical
WILLIAM G. GISEL, President, Bell Aerospace Textron, Textron, Inc.
R. D. DeLAUER, Executive Vice President, TRW Inc.
HARRY J. GRAY, Chairman, President and Chief Executive Officer, United Technologies Corporation
KARL G. HARR, JR., President, Aerospace Industries Association
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Sales of the aerospace industry, the prime measurement
of industrial economic health, continued their growth in
1975, reaching approximately $28.4 billion, nearly reach-
ing the record $29 billion level achieved in 1968. Further,
sales in 1976 are expected to increase to $29.2 billion.
However, as the Association publicly stated at yearend,
the effect of inflation has substantially eroded the apparent
progress reflected in sales statistics. Measured against
constant 1968 dollars, 1975 sales were actually $10 billion
less than seven years ago.
AEROSPACE INDUSTRY SALES
1968-1976
(Billions of Dollars)
CU
RRENT DOLLARS
CONSTANT DOLLARS
(1968 = 100)
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Other 1975 economic highlights include the following: dustry's concern with respect to Cost Accounting Standard
. Exports achieved a new high of $7.8 billion, an in- 409' b three aerospace industry officials, rep-
liveries) of $700 million over 1974. Civil shipments (de- Testimony Y
liveries) accounted for approximately $5.6 billion of the to- resenting AIA, the Electronic Industries Association and
tal, a solid indication of the continued world-wide accep- the National Security Industrial Association, on Indepen-
tance of our commercial output. dent Research and Development and Bid and Proposal
? Backlog on hand increased nearly $1 billion during the (IR&D/B&P) costs before the Joint Economic Subcommit-
year to a total of $36.4 billion. tee on Priorities and Economy in Government, and the Se-
. Employment, based on statistics compiled by the nate Armed Services Subcommittee on Research and De-
Bureau of Labor Statistics and reports from AIA member velopment.
companies, continued to decline. Employment declined to A structural change in the Association was approved by
929,000 compared with 973,000 in 1974. Estimated the Executive Committee of the Board of Governors which
employment in 1976 is expected to decline further to decided that the interests of the industry no longer required
900,000 workers. a special, product-oriented element-the Transport Air-
? Industry net profits as a percentage of sates (after craft Council-and the Aerospace Technical Council was
taxes) decreased to 2.9 percent compared with 3.0 percent assigned responsibility for continuance of appropriate ac-
in 1974. The Federal Trade Commission, meanwhile, re- tivities.
ported an estimated net profit for all manufacturing corpo- The Association staff, with the assistance of key person-
rations of 4.5 percent. nel in member companies, maintained a high level of activ-
e By major categories, sales in 1975 amounted to $15.8 ity in various areas of importance to the industry. Following
billion for aircraft and related equipment, $5 billion for mis- sections of this Annual Report cover the highlights of these
sites, $3.2 billion for space equipment, and $4.4 billion for activities.
non-aerospace products produced in aerospace plants.
Among the most important matters addressed by the in-
dustry were the preservation of cost recovery by govern-
ment contractors of an equitable portion of its independent
technical efforts (Independent Research and Develop-
ment and Bid and Proposal activities); the effects of stan-
dards promulgated by the Cost Accounting Standards
Board; numerous aspects of foreign military sales; im-
provements in the major weapons system acquisition pro-
cess; solutions to the industry's capital formation prob-
lems; and reversal of the continued erosion of the nation's
technological base.
During the year AIA's president testified before Con-
gressional committees and/or submitted statements of in-
dustry positions on subjects of direct interest to the indus-
try.
These included:
? Testimony on research and development aspects of
the authorization legislation for the National Aeronautics
and Space Administration before the House Subcommit-
tee on Aviation and Transportation Research and De-
velopment; additional testimony was furnished to the sub-
committee later in the year.
. Testimony on Renegotiation Act amendments before
the House Banking, Currency and Housing Subcommittee
on General Oversight and Renegotiation.
. Testimony before the Senate Aeronautical and Space
Sciences Committee on aircraft fuel efficiency programs.
Further, various Councils and Services assisted several
officers of AIA member companies in the preparation of
Congressional testimony.
These included:
? Testimony before the House Banking, Currency and
Housing Subcommittee on Economic Stabilization and be-
fore the Senate Banking, Housing and Urban Affairs Sub-
committee on Production and Stabilization expressing in-
Respectfully submitted,
KARL G. HARR, JR.
President
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 he ~tQ pac O er trpr s Service is con-
m n ement fields of mitt
ufa - ~ + a assurance, subcontract
iY _Y1 -P
mat lel n nagement and aosf det very
ez,
~ ~f ~ e Its six cttrrirnf tees are aug-
me ~ i subcommittees, ad hoc groups of
look
+ ft,nle tasks related to new and
iced govern 'neat polt 1 S, regulations, etat-
to and_ rocedures, and initiate protects-
by ind tstry or ?vernrrtent re. nest--to im
prove nc s ry erformancez
Significant activities of the Service in 1975 included:
Computer Aided Manufacturing (CAM)
Interest continued very high in the application of the
computer to the manufacturing process and its impact on
productivity as evidenced by studies within the General
Accounting Office, DOD's Manufacturing Technology
programs, universities and not-for-profit organizations,
and supporting industry sectors.
Four separate studies were initiated and completed on
CAM-related areas directly applicable to aerospace: Au-
tomated Warehousing, Micro/Mini Computer utilization
within Aerospace Manufacturing, Design/Manufacturing
Interface, and Evaluation of Manufacturing Process/
Methods Analysis by Computer Simulation. Plans have
been completed and work initiated on the continuation of
two of these and five other studies have been started.
Review and Comment on Government Documents
A significant effort was applied to the review of proposed
new and revised specifications, military standards, and
regulations as well as follow-up on requesting changes on
issued documents that are objectionable. They include:
work measurement standards, production management,
nonconforming material, packaging and shipping,
priorities for natural gas, quality program requirements,
nondestructive inspection requirements, proposed ASPR
revision regarding government surveillance of prime con-
tractor management of critical subcontracts, and welder
performance qualification.
NAS 900 Series Machinery and Equipment
Specifications
Effort continues on the revision and development of new
specifications for machines, equipment, and standard
tools. Final coordination has been completed for new
specifications on Induction Tube Brazing Equipment, and
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LOUIS D. HILL
Northrop Corporation
Chairman, Spare Parts Committee
DANA M. COUND
Rockwell International Corporation
Chairman, Quality Assurance
Committee
W. PAUL FRECH, SR.
Lockheed Aircraft Corporation
Chairman, Manufacturing Committee
CHARLES T. FRANCHINA
Textron, Inc.
Chairman, Service Publications
Committee
OTTO F. JANSSEN, JR.
The Garrett Corporation
Chairman, Product Support
Committee
MICHAEL E. BARCHI
Hughes Aircraft Company
Chairman, Materiel Management
Committee
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Machine Plasma Arc Welding Equipment and Computer
Numerical Control. Liaison is maintained with other trade
associations and standards groups in the development
and revision of these specifications.
Laser Cutting of Aluminum Alloys
The Manufacturing Committee initiated a project on
evaluation of laser cutting of aluminum alloys, with partici-
pation by Materials and Structures Committee, assessing
physical properties of test specimens prepared by laser
cutting as compared with milled and blanked specimens.
After reviewing the favorable test results of the first phase,
Air Force Materials Laboratory has now funded a program
in higher powered lasers to develop optimized cutting
speeds and to prepare additional specimens for testing by
AIA member companies.
Quality Resources Study
An annual revision of AIA's continuing survey of quality
costs was conducted, which serves as a quality manage-
ment tool and a reference for various company manage-
ment functions concerned with quality costs and staffing.
Training and guidance was provided member companies
to assure that the survey questions would be uniformly
interpreted. Resultant data provided valid comparisons
with prior years and identified changes and trends in the
costs of quality assurance.
Socio-Economic Aspects of Subcontracting
Work continued with the Small Business Administration,
Department of Commerce, DOD, National Minority Pur-
chasing Council, NASA, and Bureau of Indian Affairs to
effectively utilize the capabilities of small and minority bus-
iness-in subcontracting. Position papers have been drafted
on mandatory set-asides, Commission on Government
Procurement Recommendations A-47 and A-48, voluntary
subcontract program, and make-or-buy.
Shortages and Energy
After the impact of shortages on the economy in 1975,
follow-up is being maintained with DOD and other gov-
ernment departments and agencies on both in-house and
outside studies of the future availability of materials and
early warning of impending shortages. Conservation of
energy is being highlighted in working with DOD and the
Department of Commerce SavEnergy program.
Integrated Logistics Support
Early in 1975, AIA members spearheaded a continuing
tri-association (AIA/EIA/NSIA) effort to revise succeeding
drafts of a proposed Navy handbook regarding logistic
support analysis requirements for aeronautical systems
and equipment.
The purpose of this handbook will be to improve the
integrated logistics support discipline by providing a pro-
cedural baseline from which logistic support design con-
straints and an analysis of the design to determine the
expected life cycle costs and systems effectiveness of the
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weapon system/equipment can be developed and pro- Favorable consideration of the AIA recommendations in
vided to the operating forces. the next edition of the Guide, scheduled for release during
Recommendations submitted to the Navy pinpointed May 1976, has been indicated. It is anticipated that the
incompatibilities with current DOD policy and standards subsequent implementation of this purchase order infor-
and existing Navy procedural instructions and proposed mation can result in substantial decreases in the use of
various changes in the context of the document which costly emergency spare parts ordering procedures to sup-
andrapll replenishment with cost reduc-
would improve its implementation by the logistics commun- plement normal inventory
ity, both Navy and industry. Subsequently, this draft docu- tions for both supplier
pand requirements for order proces-
sing was withdrawn by the Navy for further rewrite. nsing and invoicing techniques for the ATA supply/data
rpo-
Contractor Support of Future Army Aircraft Systems processing specification was completed with the i c Data
At the invitation of the Army, an industry study plan was ration of a new specification chapter on "Supply
completed on the subject of a prime manufacturer provid- Telecommunications Airline/Supplier."
ing the entire wholesale (or depot level) supply and This chapter describes an On-Line Order Processing
maintenance support during the first two years after an and Inquiry System which enables participating airlines to
aircraft system has been introduced into the Army inven- make instantaneous inquiries via telecommunications to
tory and its engineering design activity has stabilized. participating manufacturers' data base for prices and stock
This plan, which was presented to Army officials during availability. This system also provides a means to enter
May 1975, would use the integrated logistics support struc- purchase orders and determine delivery status of existing
to
ture and resource requirements established during en- purchase orders and allows manufacture rs/supp'
gineering development phases. It would provide for supply acknowledge or take exception to purchase orders placed.
support for all levels of maintenance, except depot level Although this system's initial costs are high, it should
maintenance of Government Furnished Property; provide soon pay for itself in the further simplification and standar-
for depot level maintenance support of all Contractor Fur- dization of order administration transactions between the
nished Property; set forth procedures for transition to Army airline and the supplier.
support and identify government facilities and services In separate review studies directed toward improving the
required at each operating site. ATA specification for manufacturers' technical data, indus-
This plan can be expanded as needed to cover each try recommendations were submitted to ATA proposing
event that can be controlled by cost, schedule and perfor- revisions in the policy and basic format requirements of
mance evaluation milestone dates agreed to by the con- structural repair manuals and the separation of aircraft
tractor and the Army. This plan is being evaluated by the recovery information from airplane maintenance manuals.
Army Aviation Systems Command. Additional liaison ac- These changes would group all data concerning airplane
tivities with the Army are anticipated during 1976 to define structural repair in the prime manufacturer's repair manual
further the Army logistics policy relative to Army aircraft thus overcoming the problems involved with the varying
support on a contractual basis. responsibilities assigned to associated manufacturers who
are, in some instances, subcontractors or vendors. For the
Air Transport Association Liaison latter, ATA approval of aircraft recovery information in a
Joint review efforts directed toward achieving more effi- separate document rather than in maintenance manuals
cient implementation of airline requirements for manufac- has been indicated. Instructions for this requirement will be
turers' product support, supply information, data proces- included in the next revision of the ATA specification.
sing and technical data publications have been ac- Another joint study effort concerned an updating of the
complished by AIA members on a continuing basis with ATA specification for ground equipment technical data.
their counterparts in the Air Transport Association. This specification establishes the minimum standards for
Many of these efforts have become international in the presentation of technical data related to the equipment
scope through the participation of other trade groups, such for maintenance, service, loading and movement of the
as the SBAC (Society of British Aerospace Companies) aircraft, its engines, components and accessory systems,
the French GIFAS (Groupement des Industries Francaises as well as other equipment related to airline operations.
Aeronautiques et Spatiales), the AEA (Association of The revisions incorporated are designed to provide
European Airlines) and most recently the German BDLI more consistency between illustrations and text and will
(Bundesverband der Deutschen Luft-und Raumfahrtindus- clarify the intent of certain requirements, making them
trie). more compatible with present practices and needs for
Earlier, AIA recommendations were presented to ATA ground equipment technical data.
for the clarification and revision of reference information
in the ATA World Airline Suppliers' Guide concerning the World Airlines Technical Operations Glossary
purchase order process between the airlines and their sup- -Sixth Edition
pliers. Although this Guide is not a contractual document, AIA continued its joint efforts with the Association ospatial it is considered a major reference baseline by the airlines, (AECMA), Europeene
des Air Transport Materiel rand the
both domestic and international, and by the manufac- International Air Transport Association (IATA) in preparing
turers/suppliers.
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an updated revision of the World Airlines Technical Opera-
tions Glossary.
The purpose of this glossary is to provide common defin-
itions of terms on a world-wide inter-industry communica-
tions basis which are relevant to the airlines maintenance
and engineering functional organizations, including their
interfaces with the manufacturers' engineering and pro-
duct support functional organizations. Based upon operat-
ing experiences gained since the release of the original
edition in 1970, a number of improvements were incorpo-
rated in the sixth edition of this Glossary, which is
scheduled for world-wide distribution in 1976.
Consolidation of Provisioning Documentation
Participation in a Council of Defense and Space Indus-
tries Association (CODSIA) project with the Department of
Defense, initiated at the beginning of 1972, was continued
during 1975. The goal of this joint effort is to develop
standard documentation for the selection and ordering of
spare parts while, at the same time, consolidating and
reducing the proliferation of various provisioning docu-
ments and specifications used by the military services.
Industry recommendations were provided to DOD for revi-
sions to the latest drafts of two DOD uniform provisioning
procedures standards to eliminate inconsistencies with
existing DOD policies.
These military standards prescribe the format and prep-
aration instructions for provisioning documentation and the
terms and conditions governing the provisioning of end
items and the contractor's responsibility relevant to these
items. Corrected versions of these standards are currently
being applied to new weapon systems.
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 During 1975, the Service continued efforts to obtain equit-
able and practical government procurement policies prac-
e o p c p c r rat rvic dap-
busrrt m Bement activities of
r e~ ~r companies, 1n the fields of, ,ount
, finan e rye ` to mints r to ro-
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A i ed Forst el :ase
tices and procedures affecting the business management
activities of the aerospace industry.
The year was marked by concentrated efforts in the
fields of Cost Accounting Standards, Independent Re-
search and Development (IR&D) and Bid and Proposal
(B&P) cost recovery, Occupational Safety and Health Act
(OSHA) implementation, Federal Patent Policy and Relia-
bility Improvement Warranties.
Independent Research and Development
and Bid and Proposal
Industry efforts and activities in connection with the
equitable recovery of independent research and develop-
ment (IR&D) and bid and proposal (B&P) costs continued
at a high level during 1975, particularly through the Tri-
Association Ad Hoc Committee on IR&D, chaired by
Thomas J. Murrin, Westinghouse.
After publication of the General Accounting Office Re-
port, "Contractors' Independent Research & Development
Program, Issues & Alternatives," dated June 5, 1975, and
after a number of delays, joint hearings were held during
September by the U.S. Senate Subcommittee on Re-
search and Development of the Committee on Armed Ser-
vices (Senator Thomas J. McIntyre, New Hampshire,
Chairman), and by the Subcommittee on Priorities and
Economy in Government of the Joint Economic Commit-
tee (Senator William Proxmire, Wisconsin, Chairman).
Representatives of the Tri-Association Ad Hoc Commit-
tee on IR&D presented testimony at these hearings.
The Tri-Association formal statements reflected indus-
try's views of and opposition to, overly-rigid governmental
control which would defeat the basic purposes of IR&D,
i.e., to permit industry to develop and maintain strong
competitive technological capabilities which, in turn, pro-
vide the nation a strong and healthy national industrial
security base.
 Approved For Release 2004/10/13 : CIA-RDP88-01315R000100060001-0
The'Tri-Association's representatives also participated
in informal "give and take" with the subcommittee mem-
bers on the advantageous aspects of IR&D/B&P aimed
toward acquainting the Congressional committees with
industry views on the subject. The majority of witnesses,
including those of the General Accounting Office, Depart-
ment of Defense, National Aeronautics and Space Ad-
ministration, Energy Research and Development Ad-
ministration, a panel of the Defense Science Board and the
Office of Federal Procurement Policy, substantially agreed
with industry views. Subsequent to the hearings, industry
comments were also filed on statements made by the
minority witnesses.
An interesting development during the hearings on
IR&D/B&P was the decision by ERDA to broaden the IR&D
policy of the former Atomic Energy Commission, (AEC),
under which IR&D costs were allowed only if the effort was
related to an AEC contract. This policy change recognizes
the benefits of IR&D to government agency programs.
AIA and the other associations in the Tri-Association
effort continue to pursue an educational and action prog-
ram in this key area.
The Senate Appropriations Committee Report on the
DOD 1976 appropriations bill placed a new IR&D/B&P
reporting requirement on DOD. It read in part:
"The Committee directs that, starting with the submis-
sion of the fiscal year 1977 budget the DOD include an
estimate of IR&D/B&P for the budget year as an informa-
tion exhibit in the research, development, test and
evaluation justification material. Quarterly reports are to
be made against the yearly plan to the Committees on
Appropriations."
Deferred IR&D costs continued to be the topic of meet-
ings and discussions with the ASPR Committee. Although
several meetings were held during 1975, this matter was
not resolved. However, it now appears that a solution to
this problem will be reached in 1976.
Several studies and active projects were underway at
year's end within Department of Defense, Air Force, Cost
Accounting Standards Board, Energy Research and De-
velopment Administration, regarding IR&D/D&P. The
Office of Federal Procurement Policy was engaged in
developing a government-wide IR&D/B&P policy, in the
form of an Office of Management and Budget Circular.
Value Engineering
Working through the Council of Defense and Space
Industry Associations (CODSIA) and at the invitation of the
DOD, comprehensive guidelines and suggested contract
clauses were developed to implement Value Engineering
in defense subcontracts. CODSIA's view and suggestion
were well received by DOD. CODSIA also transmitted
detailed comments to the General Services Administration
(GSA) on proposed coverage of Value Engineering which
in the Federal Procurement Regulation (FPR) was almost
identical to the existing ASPR. The FPR on this subject had
not been published at year's end.
Approved For Release 2004/10/1
Warranties
The Department of Defense is pursuing a new concept
entitled Reliability Improvement Warranty (RIW), the ob-
jective of which is to encourage design and design
changes in items to increase Mean Time Between Failure
(MTBF) and reduce Turn Around Time (TAT) for overhaul
and maintenance, thereby enhancing operational utiliza-
tion and lowering life cycle.
The concept calls for long term fixed-price arrangements
where engineering changes are introduced at no cost to
the government and the contractor agrees to repair or
replace items which fail, based on specified MTBF and TAT
values.
Industry's principal concerns are the bias in policy
statements toward fixed-price contracting before adequate
experience is available to permit reasonable predictions
and the many penalty provisions in structuring contracts.
CODSIA expressed these concerns and made recom-
mendations to the Office of the Secretary of Defense to
improve implementation of the concept. The latter recog-
DONALD G. SPEYER
The Bendix Corporation
Chairman, Procurement and Finance
Council
DEREK P. LAWRENCE
General Electric Company
Chairman, Patent Committee
JOHN W. DALE
Rockwell International Corporation
Chairman, Industrial Security
Committee
STANLEY M. LITTLE, JR.
The Boeing Company
Chairman, Industrial Relations
Committee
 Approved For Release 2004/10/13 : CIA-RDP88-01315R000100060001-0
nized the problems, and CODSIA is working with a Tri-
Service Group toward resolving the issues while pursuing
mutual objectives.
Office of Federal Procurement Policy (OFPP) which,
while responsible to the Congress, would have cognizance
of all Federal procurement policies. A principal pur-
pose of the OFPP was to bring uniformity, where feasible,
to the federal procurement process.
During 1975, the OFPP undertook to promulgate an
OMB Circular dealing with major acquisitions. Industry's
views on the proposed Circular were presented by S. N.
McDonnell to the OFPP at public hearings.
The OFPP also developed proposed legislation which
would consolidate the Federal Procurement Statutes.
This important matter is pending, and at the year's end,
AIA was preparing to testify on such proposed legislation.
Late in 1975, the OFPP issued its first Procurement
Regulation which would establish a Federal Procurement
Regulation System. Industry comments on the proposed
OFPR are being developed.
DOD Profit Study
The Department of Defense initiated a study in 1975 of
defense contractor profitability which has become known
as "DOD Profit Study '76." At the direction of the Board of
Governors, AIA did not formally participate in this study or
its requirements for company data. AIA, however, will con-
tinue to follow developments in order to provide available
information to member companies and to assure that the
study results are properly presented and reasonably inter-
preted.
Proprietary Information
Continuing concerns of industry have been the alloca-
tion of rights between the government and a contractor as
to technical data generated in the performance of a gov-
ernment contract as well as the appropriate protection of
proprietary information or data of a contractor used in the
performance of such contracts.
Because of the absence of a uniform federal policy on
this subject, AIA has undertaken the development of a
proposed Federal Policy on Proprietary Information and
Technical Data. The proposed policy will be completed
during 1976 and presented to concerned federal agencies.
Interpretations of the scope of the Freedom of Informa-
tion Act (FOIA) by federal agencies and the courts gave
rise to significant problems in the protection of proprietary
information submitted by a company to the government.
Those developments were closely monitored and member
companies were advised.
Patents
A major problem in the government/industry interface for
many years has been the allocation of rights to inventions
made in the performance of research and development
work under government contracts and any patents that
may mature, as well as the appropriate recognition of a
contractor's rights in privately developed patents.
This problem was complicated by the diverse patent
policies expressed by the Administration and the Congress
on various occasions. During 1975, the necessity for a
uniform Federal Patent Policy on this subject became ap-
parent. AIA developed, and expressed in the form of draft
legislation, a proposed Federal Patent Policy that would
equitably allocate the rights to inventions made during
research and development work under a government con-
tract and any patents on such inventions.
The proposed policy would also properly protect and
observe rights in a contractor's privately developed and
owned patents necessary for the reproduction of end items
developed and furnished under government contracts.
AIA's concept was presented to the Office of Federal
Procurement Policy (OFPP) with a recommendation that it
be included in efforts of the OFPP to consolidate the Fed-
eral Procurement Statutes. Additionally, AIA's proposed
Federal Patent Policy was presented to the Energy Re-
search and Development Administration (ERDA) during
public hearings held by that agency on its statutory patent
policies.
At the close of the year, the OFPP had not yet responded
to AIA's request and the results of the ERDA hearings had
not yet been published.
The DOD issued late in 1975 a complete revision of
ASPR coverage on patent rights. AIA is working with
CODSIA in the preparation and presentation of comments
on the revised ASPR.
Cost Accounting Standards
The promulgation of standards by the Cost Accounting
Standards Board under Public Law 91-379 continues to
require the application of significant Association efforts.
Eleven standards had been promulgated by the end of
1975 and were in effect, two had been published in the
Federal Register for comment, and a dozen standards
proposals were in various stages of development or study.
AIA, among others, was active in opposing the promul-
gation of Cost Accounting Standard 409-Depreciation of
Tangible Capital Assets-and in obtaining a Congres-
sional review of the Standard before appropriate subcom-
mittees of the Senate and House.
During such hearings senior member company and As-
sociation officers testified as to the probable adverse im-
pact of the Depreciation Standard on capital investments.
Although the Standard was not withdrawn or revised, the
Cost Accounting Standards Board is promulgating two
other Standards-Inflation Accounting and Cost of Capital.
These may offset some of the adverse effects of the De-
preciation Standard.
The Cost Accounting Standards Board held its first
Evaluation Conference in June. More than 300 people
attended which demonstrated the widespread interest in
the subject. AIA submitted written comments for the re-
cord, and also participated through CODSIA in the conduct
of an industry survey as to the economic impact of Cost
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 Approved For Release 2004/10/13 : CIA-RDP88-01315R000100060001-0
Accounting Standards. The results of this survey were
presented orally and in writing at the Conference.
The Chairman of the Cost Accounting Standards Board,
in the Board's 1975 Report to the Congress, stated that the
Board has undertaken a review and analysis of the matters
discussed at the Conference to determine any items war-
ranting action. AIA has prepared a Summary Analysis
Report of the Evaluation Conference for the use of its
members and other interested parties.
The Board published in 1975 for comment a proposed
Standard on "Allocation of Business Unit General and
Administrative Expenses to Cost Objectives." If promul-
gated in its present form the Standard would require the
G&A expenses be allocated using a cost input or similar
method. Companies required to change from a cost of
sales or similar output method could experience an indefi-
nite deferment of recovery of costs. AIA is supporting
CODSIA efforts to convince the Board that this Standard
should not be promulgated in its present form.
Impact of Inflation on Contracts
Efforts continued during 1975 to alleviate the impact of
inflation on government contracts, principally those with
the Department of Defense. Although some relief was
achieved in certain areas, i.e., the flow-through of unpre-
dictable cost increases due to inflation and the appropriate
exercise of option, other suggested areas such as adjust-
ing incentive targets and fees are still under consideration
by the DOD.
A significant effort to obtain an increase in the progress
payment rate was not effectuated when a request for ap-
proval for such an increase made by the DOD to the Office
of Management and Budget (OMB) was withdrawn. How-
ever, the concept of tieing the progress payment rate to
the cost of money bears further consideration and this will
be explored during 1976.
Product Liability
There have been significant advancements in AIA's ef-
forts in 1975 seeking to provide appropriate protection to
all parties concerned with damages resulting from an acci-
dent in either domestic or foreign air transportation. AIA
developed proposed legislation which was presented and
favorably received by cognizant committees in both the
Senate and House. Although the introduction of legislation
embodying AIA's proposed concept was not effectuated
during 1975, such action is anticipated in 1976. In addition,
the Air Transport Association (ATA) has appointed a com-
mittee of senior airline executives to work with AIA.
Industrial Relations and Security
Department of Labor's Office of Federal Contract Com-
pliance issued proposed rules for identifying persons who
continue to suffer the present effects of past discrimination
based on race, religion, sex or national origin, in eliminat-
ing the discrimination and in awarding back pay. AIA
submitted a statement recommending that the proposed
rules be withdrawn or, in the alternative, be suspended
pending the issuance of an acceptable economic impact
statement.
OSHA Standards
The Occupational Safety and Health Administration
(OSHA) published a proposed health standard for occupa-
tional exposure to noise. AIA submitted a statement and
testified at an OSHA public hearing on the proposed noise
standard, supporting a 90 decibel exposure limit, the av-
eraging of the noise exposure over a weeklong period, and
the use of personal protective equipment rather than costly
engineering and administrative controls.
AIA submitted a statement to OSHA on the criteria for a
recommended standard for an identification system for
occupationally hazardous materials, supporting the basic
premise of informing employees of actual or potential
hazards of chemicals in an effort to minimize risk.
AIA stated that no identification systems should be is-
sued unless it is practical, can be readily implemented by
all employers, is understandable to employees, can be
uniformly and equitably enforced by OSHA, and is consis-
tent with the precautionary labeling requirements of other
regulation agencies.
AIA testified on the proposed health standards for six
toxic substances used as industrial solvents (ketones).
OSHA issued a proposed health standard for occupational
exposure to beryllium. AIA pointed out that during the past
20 years AIA member companies have been among the
major users of beryllium metal. Usage has been principally
in the fabrication of structural parts under close industrial
hygiene controls.
While member companies were accumulating experi-
ence in working under the present health controls, they
have also developed practical methods of providing for the
protection of the worker. AIA's concern is that the pro-
posed health standard will force the use of impractical and
expensive methods which will in no way improve the pro-
tection of the worker.
AIA is presently accumulating data to prepare state-
ments on the three proposed health standards covering
trichloroethylene, ammonia and eleven toxic substances.
Industrial Security Proposals
Working with CODSIA, AIA presented recommenda-
tions on thirteen proposed changes to the DOD Industrial
Security Manual.
Close liaison was continued with the senior policy and
administration officials of the Defense Industrial Security
Program. Views were exchanged on the application and
interpretations of requirements of both the Defense Indust-
rial Security Program and the Industrial Facilities Protec-
tion Program.
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11
 Approved For Release 2004/10/13 : CIA-RDP88-01315R000100060001-0
Cogswell Awards
Twenty-nine facilities of member companies were
among the 54 winners of the 1975 James S. Cogswell
Industrial Security Awards for superior performance in car-
rying out security obligations on classified defense con-
tracts. The 54 winners were selected from about 12,000
industrial firms having DOD facility clearances to perform
classified contracts.
Renegotiation
Early in 1975, it appeared that the Congress would make
Renegotiation Act proceedings much more stringent that it
had been in the prior 25 years of the Act. AIA filed a
statement with the Joint Committee on Internal Revenue
Taxation and testified before the Subcommittee on Over-
sight and Renegotiation of the House Banking and Cur-
rency Committee.
Most-AIA recommendations were incorporated in a re-
port of the Joint Committee but very few appeared in the
report of the House Committee. The most onerous provi-
sions of the version which will probably go to the full House
from Committee in 1976 are:
. A requirement for division and product line renegotia-
tion;
. The specification of an accounting method which
would require substantial revision or separate books in
most companies;
. A requirement for payment of interest on excessive
profits from the renegotiated year rather than from the
Board's determination;
. Placement of the burden of proof upon the contractor
in the event of judicial appeal. Congress in 1975 extended
the Act in its present form until September 30, 1976, to
provide time for more deliberation on the issues. AIA prep-
arations continue for hearings in the Senate.
The Renegotiation Board proposed extensive revisions
to the Agency's reporting forms and instructions, which
would have required much more detailed data based on
unclear explanations. AIA participated in two hearings on
this matter under the Federal Reports Act before the Office
of Management and Budget. At year's end, it appears that
most of AIA's recommendations have been accommo-
dated.
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12
 Girt the
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Beginning with a special analysis of the Federal Budget
for Fiscal Year 1976, the Aerospace Research Center in
1975 continued to provide staff support for several AIA
activities. The output of the Center included published
reports, background material, participation in national
workshops, Congressional testimony and speeches given
by the Association's president. In addition, the Center was
responsible for drafts of policy statements and research
support on areas such as the Domestic Int
i
ernat
onal
Sales Corporation (DISC) and proposed standards from
the Cost Accounting Standards Board. The Center staff
contributed to the Tri-Association effort on government
competition with industry.
Investigation began on the question of U.S. military ex-
ports and resulted in a published analysis of the economic
dimensions of both orders and deliveries of U.S. military
goods and services to foreign nations. The Center also
drafted a primer on the topic which includes both a legisla-
tive history of appropriate statutes regarding U.S. military
exports and an explanation of the multiple regulations
which govern this special type of export business.
An extensive investigation of the problem of capital
formation in the U.S. aerospace industry was undertaken.
The study, which will be completed and published in
.. i 1976, assesses the recent history of capital formation in
the industry and recommends possible action to combat
the problem.
t#~
Foreign competition in the area of transport aircraft was
examined during the past year. The published report enti-
tled The Challenge of Foreign Competition in the Trans-
port Aircraft Market explores economic subsidies and
other advantages enjoyed by foreign manufacturers of
transport aircraft and the potential impact these might
have on the U.S. position in international markets over the
near term.
? 2 j
Work was completed on a study regarding the charac-
teristics of commercial aviation transport as a form of in-
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 Approved For Release 2004/10/13 : CIA-RDP88-01315R000100060001-0
tercity passenger transportation. A draft of the study, At-
tributes of Commercial Aviation Transport, is undergoing
final review.
Through the Center's Economic Data Services, Aero-
space Facts and Figures was published, as were the
Semi-Annual Employment Surveys and the Annual
Year-End Review and Forecast. EDS, in addition, con-
tinued to publish and disseminate data on imports, ex-
ports, production, and other statistical series of interest to
the industry. In support of other AIA services, EDS com-
piled information by way of questionnaires on several sub-
jects, the most important of which was in support of the
Association efforts on Cost Accounting Standards.
The Center continued its work on both technology
transfer and research and development intensity in the
aerospace industry. Draft reports on these studies have
been completed; final review of the drafts and possible
publication will be initiated during 1976.
Workshops on a national transportation policy con-
ducted by the Department of State were attended by the
president of AIA and ARC staff during 1975. The staff of
the Center also participated in workshops on barriers to
industrial innovation sponsored by the National Science
Foundation and the American Society of Association
Executives.
Review and cataloging of the Association's library was
completed during 1975. The project will now become an
ongoing effort.
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 dust 'top vet z body _ .
~ ii+ t overnment
The Council in 1975 continued to bring the industry view-
point and perspective before senior technical manage-
ment officials in the government for appropriate c
id
ons
-
eration as policy is being formulated. Primary attention
was focused on system acquisition policy matters, particu-
larly implementation of the recommendations of the Pro-
curement Commission. This involved support of the Con-
gressional hearings early in the year and the subsequent
development of an OMB Circular by the Office of Federal
Procurement Policy. The industry position on the draft
Circular placed heavy emphasis on the need for making
policy work at the contractual level and the omission in the
Circular of explicit policy declarations governing contrac-
tual relations between the government and the contrac-
tor. The omissions pointed out were particularly with re-
gard to having the procurement officials specify "what"
not "how" the contractor is to produce, as well as the
avoidance of program discontinuity. The need for cost
realism was equally emphasized.
At year's end public hearings by OFPP were held on
the final draft of the OMB Circular. The Council will be
assessing the effect of this Circular on the military ser
vices and agencies as it is implemented during 1976.
The Council also addressed the issues raised in a study
of weapons systems management by DOD's Acquisition
Advisory Group which recommends some potentially sig-
nificant changes by decentralizing and delegating pro-
gram decisions to the military services while providing
increased personal attention by the Deputy Secretary of
Defense in the areas of policy and major decisions.
Studies by some of the services cover the same ground.
Other systems acquisition elements that were reviewed
with government counterparts included the impact of
"buy-ins" on competitive procurement, and application of
the four step source selection process.
RFP Improvement
Considerable Council effort over the past year was de-
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 Approved For Release 2004/10/13
voted toward the objective of improving
(RFP's). The dichotomy of favorable top level
policy but continuing RFP's with requirements which un-
necessarily constrain the contractor's response has
prompted an acceleration of Association actions to
achieve better RFP's.
In addition to the RFP check list developed early in the
year, a new "umbrella" project was established to over-
see all new trends as they impact RFP's as well as the
many separate committee project activities which contri-
bute to improving the Statement of Work and other re-
quirements of the RFP. As an early action an evaluation
of current RFP's, after source selection, will be made in
the light of the current policy. Findings will be reported to
top level policy makers.
RFP, and by the contractor as a contractual requirement
during the full scale development phase.
Several position papers submitted to the DOD during
the year emphasized that the design-to-cost concept in
today's acquisition environment demands that there be
flexibility to trade off many of the design objectives in the
development process, and that the period during full scale
development offers the major opportunity for tailoring the
requirements of specification and standards.
Implementing Design-to-Cost
An AIA study completed in 1973 concluded that the
design-to-cost concept would not have a significant im-
pact on defense business unless positive action was
taken to ensure its effective implementation at all levels of
the DOD and industry. Since that time the Council has
worked with OSD staff in the development of sound
design-to-cost policy, and with the Joint Logistics Com-
manders in the development of effective implementation
procedures.
In early 1975, DOD published its Directive 5000.28
which expressed design-to-cost policies found to be gen-
erally well received within the industry. In May, the Coun-
cil made suggestions for revising the Joint Design-to-Cost
Guide to make its implementing procedures more compat-
ible with the policies of the new Directive. In September
the problems of implementation in current DOD programs
were addressed candidly in a panel discussion with OSD
representatives. Later, the Council reviewed a proposed
revision to the guide and was disappointed to find that it
contained little specific guidance
on of design to--cost pr ns
for effective contractual application
It was also found to contain practices which would
be unacceptable to industry.
Engineering and Configuration Management
Several projects in 1975 were involved with proposed
revisions to requirements documents in the area of En-
gineering and Configuration Management. One involved
the format and content of the basic program peculiar sys-
tem specification, and another the requirements for major
program technical reviews and audits.
AIA joined with other CODSIA members in pointing
out that these documents are typical of many which are
imposed at the contractual level which result in design
constraints and unnecessary program costs which are in-
consistent with DOD's top level acquisition policies which
emphasize design-to-cost trade-offs, hardware demon-
strations, and phased contracting commensurate with the
progressive resolution of risks and unknown factors.
AIA comments urged that in revising such documents,
the DOD take the opportunity to demonstrate that the
basic concepts of the Office of the Secretary of Defense
are more than words in a high level policy document.
They recommended that firm technical requirements not
be specified below the system level at the beginning of
Advanced Development nor below the subsystem level at
the beginning of Full Scale Development. Other recom-
mendations urged that initial product requirements be lim-
ited to mandatory performance requirements and de-
sign constraints, and that design reviews be limited in
scope and frequency and be scheduled to support major
program decisions.
Application of Military Specifications & Standards
Unnecessary costs attributable to improper application
of military specifications and standards in the system ac-
quisition process continue to be of major concern and
were the central issue of much cooperative DOD and in-
dustry effort in 1975.
The Council was involved in several aspects of this prob-
lem area. It supported the Defense Science Board study
which concluded that implementation of specifications
and standards is a major problem. It has also initiated a
project under which a position paper on the tailoring of
requirements is being developed. This project is addres-
sing the three aspects of tailoring; i.e., by the government
to contra t -b the contractor in his response to the
ior
Weapon System Software
Software for computer systems which are an integral
part of weapon systems became the focus of increased
management attention within the DOD. This increased
attention was justified on the basis that embedded com-
puter systems represent current annual expenditures of
more than $2 billion, with more than 70 percent of that
amount dedicated to software, and because software un-
reliability had become a major problem in operational
readiness and performance of weapon systems.
The Council contributed to DOD studies which con-
cluded that a major factor contributing to weapon system
problems is the lack of discipline and engineering rigor
applied to weapon system software acquisition.
Accordingly, the DOD and military services are plan-
ning corrective action to be implemented in the near fu-
ture. A statement of principles has been developed which
will be documented in a new DOD Directive. These will be
implemented by a Guide. AIA has contributed to the con-
cept that software should be treated as a configuration
item and that the acquisition principles applicable for
hardware should be applied to software. Further effort is
anticipated in support of the evolving Directive and Guide.
pr
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 Appr
SHEPARD M. ARKIN
Raytheon Company
Chairman, Aerospace Technical
Council
JOSEPH F. GRASS, III
The Boeing Company
Chairman, Rotorcraft Airworthiness
Requirements Committee
W. E. HENSLEIGH
Lockheed Aircraft Corporation
Chairman, Flight Test Operations
Committee
A. L. MCPIKE
McDonnell Douglas Corporation
Chairman, Aircraft Noise and
Emission Control Committee
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JAMES R. AMBROSE
Aeronutronic Ford Corporation
Chairman, Technical Management
Policy Group
K. F. HOLTBY
The Boeing Company
Chairman, Aviation Division
DR. M. BARON T. GEORGE
Avco Corporation
Chairman, Technical Specifications
Division
STEPHEN C. KAPERNAROS
J. T. MARSHALL, JR.
FORREST COOPER, JR.
TRW Inc.
United Technologies Corporation
General Electric Company
Technical Management
Chairman
Chairman, Civil Aviation
Chairman, Electronic Systems
,
Committee
Advisory Group
Committee
HEBER J. BADGER
The Boeing Company
Chairman, Transport Airworthiness
Requirements Committee
FRANCIS E. BRYANT
IBM Corporation
Chairman, National Aerospace
Standards Committee
W. K. BAUERMEISTER
The Boeing Company
Chairman, Propulsion Committee
KIMBALL C. CUMMINGS
Honeywell Inc.
Chairman, Materials and Structures
Committee
KEN W. TRUHN
The Bendix Corporation
Chairman, Standardization
Management Policy Group
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Engineering Disciplines and Requirements
The serious concern of the military services for reduc-
ing the operational and support costs associated with
weapon systems continues to be evident in numerous
new and revised specifications and standards dealing
with requirements for reliability, maintainability, and other
engineering disciplines.
Industry review of these documents continues to stress
the need for requirements which provide for flexibility in
the engineering trade-off process and compatibility with
design-to-cost requirements. A project was initiated to
prepare a position and recommendations on the most ap-
propriate and effective way for the government to specify
contractual requirements for the engineering factors to
assure the desired emphasis at minimal cost to the pro-
gram.
Management Systems and Data Requirements
In its follow-up on industry positions previously submit-
ted to the DOD, the Council continued to advocate more
recognition of and reliance upon the contractor's man-
agement systems and data for satisfying the govern-
ment's need for management information. This follow-up
has revealed that progress has been slow but encourag-
ing during the year. An OMB Circular and a DOD Directive
are emerging to implement the Procurement Commission
recommendation of 1973, which addressed this subject
area.
Legislation proposed during the year would have re-
quired the Services to procure development data for
major system designs in a form suitable for manufacture
by any other company. Such legislation also would have
further jeopardized the contractor's rights to protect pro-
prietary data. A Council project provided background in-
formation for the Congress and the DOD which helped
forestall such requirements.
A successful Council project which was completed in
1975 involved the basic DOD specification for drawing
requirements, MIL-D-1000. A DOD revision proposed in
1974 met many serious industry objections. An industry
group, chaired by a Council representative, worked in close
coordination with DOD representatives throughout 1975
to produce a revision which found mutual acceptance.
This version will avoid significant costs associated with
the earlier proposal.
Contractor Management System
Evaluation Program
Serious attention was given to the Air Force and Navy
programs which have recently been developed and are
being implemented to evaluate contractor management
systems by the use of Management System Indicators
(MSI's).
An attempt was made to assess the industry reaction to
the MSI approach and to determine whether there existed
a need to protest the approach. Results of surveys have
shown that though a serious potential impact is recog-
nized, a consensus for immediate protest did not yet exist
at the end of the year. Further assessment will be made
as implementation of the MSI approach evolves.
Civil Aviation
Civil aviation activities of the AIA were at a high level
during 1975. The ATC organization was modified to pro-
vide an Aviation Division which grouped all civil aviation
activities related to development, operations, regulatory
and environmental functions.
Data were assembled, analyzed and formulated to pro-
vide the basis for two reports by the Aerospace Research
Center. The first, The Challenge of Foreign Competition
in the Transport Aircraft Market was published in 1975;
the second, concerning attributes of commercial aviation
transportation, has been submitted to the Board of Gov-
ernor's Executive Committee for approval.
In response to requests by Congressional Subcommit-
tees, AIA positions were developed for hearings on Na-
tional Aeronautics and Space Administration R&D pro-
grams, NASA RDT&E Facilities requirement, NASA Fuel
Efficient Airplane Program and Federal Aviation Adminis-
tration R&D Programs. In addition the Association worked
with NASA in the development of the program to produce
the report, "Outlook for Aeronautics 1985-2000" and the
initial development of the proposal for the "Aviation Safety
Reporting System" which will supplant the ongoing FAA
"No Fault Reporting System."
Operations Review Program
Inaugurating the initial phase of its Operations Review
Program, the Federal Aviation Administration issued an
invitation to the aviation community to submit proposals
for addition or revision of its operating rules. Although the
Council did not initiate any proposals, it reviewed and
commented on many of the 900 proposals which have
potential effect on the design, manufacture and perform-
ance of transport aircraft and rotorcraft, or on a member
company's own flight operations. Council representatives
made significant contributions to the FAA-sponsored Op-
erations Review Conference in December 1975. FAA will
issue regulatory proposals to update the operating rules
during 1976.
Airworthiness Standards
The second phase of the Federal Aviation Adminis-
tration Biennial Airworthiness Review Program was
inaugurated during the year with the publication for review
and comment of more than 700 proposed rule changes
and additions covering airframe, flight, powerplant
equipment and systems.
The industry's views were also presented to the FAA on
such subjects as rapid decompression effects, smoke and
toxic gas emission from interior compartment materials,
ground proximity warning equipment, runway friction and
instrument flight rules for rotorcraft operations. At year's
end there was growing industry concern regarding po-
tential cost impacts resulting from later stages of this effort.
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Environmental Considerations
A major committment of resources by member com-
panies was required in 1975 to assure that realistic re-
quirements are developed from proposals by the Environ-
mental Protection Agency and FAA. Extensive prepara-
tions were made for hearings to be held early in 1976 on
EPA exhaust emission requirements to be effective in
1979. As now proposed, these requirements would im-
pose severe economic and operational penalties on air-
lines as well as a significant increase in fuel consumption.
A case is being made to hold these requirements in
abeyance pending the completion and evaluation of ongo-
ing development programs.
The FAA has currently proposed changes to the Noise
Requirements of the Federal Aviation Regulations which
would seriously hamper the orderly development of air
transportation by, in effect, barring the growth version of a
transport aircraft. These growth versions have tradition-
ally provided the high efficiencies needed for a viable air
transport system. The Council is developing counter-
proposals which would provide for equitable treatment of
derivative versions of transports and to better align FAA
and international requirements.
Propulsion System Data Requirements
and Regulations
Positions and recommendations were developed for
the numerous proposals for propulsion system regulation
originating from the 1974 Biennial Airworthiness Review.
The AIA has continued to be the primary source of infor-
mation on liquid rocket propellants for the Air Force Rock-
et Propulsion Laboratory and the Chemical Propulsion
Information Agency. In addition, specification review was
provided for NASA. A major effort in regard to military"
requirements has been the development of a rationale to
guide the military services towards consolidation, unifica-
tion and simplification of performance, design, develop-
ment and test requirements for aircraft engines. This pro-
gram should be brought to fruition in 1976.
U.S. Metric Conversion
At the end of 1975 President Ford signed legislation
which established a U.S. Metric Board to assist in the
planning and coordination of the ongoing change to the
metric system. While there is no compulsory aspect to the
legislation, the pace of conversion can be expected to
accelerate. As more and more suppliers are faced with
metric orders from large customers, and as metric parts
and components eventually become predominant and
less costly then their inch counterparts, metric will be-
come a business reality, not merely an either/or proposi-
tion.
The Council has chosen to use the unique mechanism
of the American National Metric Council to coordinate
aerospace planning, interface with other industries, and
have ready access to the U.S. Metric Board. Under the
auspices of the AIA the Aerospace Sector Committee was
formed and held its organizational meeting in November.
All segments of the industry are represented including the
FAA, DOD, the airlines, suppliers, and engineering and
professional societies. The planning of this Sector Com-
mittee appears to be well advanced and appropriate for
the current phase of metric conversion.
DOD/Industry Metrication
In anticipation of metric legislation but primarily to foster
NATO standardization, the Department of Defense issued
its policy on metrication in June. Starting in 1976, all re-
ports must use metric units and consideration must be
given to the appropriateness of metric design for all new
programs. The Council has been alerting DOD policy
makers to the practical realities of metrication, particularly
the need to recognize that it will be years before high
technology industries can economically produce systems
that are totally metric; in the interim the cost effective
approach is a hybrid design.
Another prerequisite to cost effective metrication is the
availability of metric aerospace hardware standards. The
Council has recognized the need for a cooperative
industry/DOD effort to avoid duplication and utilize limited
resources effectively.
A joint AIA/SAE (Society of Automotive Engineers) task
group identified a cadre of some 263 metric aerospace
standards basic to any metric design. These standards
tasks were apportioned, based upon prior responsibility
for specific product classes,, resulting in'the AIA being
responsible for 112, SAE 95 and DOD 56. During 1976 the
AIA will develop 12 standards with the balance of the 112
tentatively planned for completion by the end of 1980. The
SAE and DOD have initiated their tasks as well. This "be-
fore the fact" standardization can result in numerous be-
nefits for the participating organizations including im-
proved communication, material and energy conserva-
tion, reduced inventories and costs, and improved
technology, quality, and reliability. The experience and
cost associated with development of the initial 12 stan-
dards will be analyzed to determine the most effective
approach for processing the remainder.
International Standardization
With increased attention focused on standards and
standardization within NATO, GATT world trade confer-
ences and as part of licensed or offset production of
aerospace equipment both here and abroad, international
standards are becoming a significant consideration in
aerospace. Conversion to metric measure is also focus-
ing attention on the large body of foreign and international
standards, most of which are metric. AIA participation on
the international standardization committee for Aircraft
and Space Vehicles (ISO/TC-20) has increased sig-
nificantly and in 1975 the leadership of AIA participants at
international meetings resulted not only in increased ac-
ceptance of U.S. technical positions but also in accep-
tance of the U.S. approach to aerospace standardization.
A key issue was resolved when the international aero-
space community agreed with U.S. aerospace that two
threaded fastener systems are necessary-one for com-
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mercial grade fasteners and another for aerospace quality
products. The aerospace thread form is to be the metric
version of the "J" thread which U.S. aerospace developed
and proved over many years in its original inch version.
When the secretariat of ISO/TC-20 became available in
late 1975, the Council recommended that the Board of
Governors make a commitment of AIA support so that the
U.S. could seek this pivotal administrative role. This has
been accomplished and the AIA will be in a position to be
more directly involved in all aspects of international stan-
dardization that affect aerospace.
Another indicator of the trend toward the cooperative
development of international aerospace standards is in-
creased coordination between the AIA and the Society of
British Aerospace Companies and the Air Industries As-
sociation of Canada. This activity is particularly beneficial
to U.S. aerospace as the other countries are well into
conversion to metric measure.
National Aerospace Standards
National Aerospace Standards (NAS) comprise a
series of more than 1,300 voluntary, industry-established
standards defining mechanical and electrical hardware,
structural fasteners, large numerically controlled machine
tools, cargo pallets and containers, and airport planning.
During 1975, nine new standards were published, along
with revisions to 40 existing standards.
Electronic Systems
The 73 Electronic Design Practice Standards of MIL-
STD-454, developed by a tri-service-AIA-EIA working
group, are accepted by 12 components of the military
services, EIA and AIA as the Design Baseline Standards
for military equipment.
The working group revised 37 of these standards dur-
ing 1975 and has scheduled revision of the remaining 36
during 1976. This two-year revision cycle is necessitated
by the rapid change of technology. Keeping these stan-
dards current broadens their use and thus increases the
dollar savings from their repetitive use. The use of these
73 Standards during 1975 is estimated to have saved
over $25 million in design cost which would have required
use of more than 500 uncoordinated standards which
they superceded. New design practice standards under
development include environmental test limits and corro-
sion control.
AIA assisted another USAF-Navy-Army working group
in revising four key general specifications for electronic
equipment for aircraft, missiles, spacecraft and related
test equipment.
More than 10 years of controversy over Electrical
Characteristics Standards (MIL-STD-704) were resolved
in 1975 through the use of a newly formed Navy-USAF-
Army-AIA-SAE-RTCA working group. The same group
has been requested to develop further refinement of this
standard during 1976.
ing the 21/2- to 31/2-year lag between the actual use of
microcircuit devices and a formal fully qualified and spec-
ified device. This coupled with microcircuit technology
leapfrogging itself to produce a new generation of devices
nearly every two years, results in a large number of piece
part types with low quantities, requiring costly specifica-
tion and qualification by each user.
To cope with these problems the military has proposed
to utilize more of its limited resources for documentation
and qualification of new microcircuit devices entering
major system design. This could provide better control of
large scale integrated microcircuits (LSI) including mi-
croprocessors and memory type microcircuits, during the
period of highest potential procurement and prior to en-
trance of the next generation of these devices into system
design. The motivation for this resource reallocation is
improved availability, device cost, quality, life cycle cost,
and reliability.
AIA is monitoring closely the military interest in stan-
dard modules and Form Fit Function Standard black
boxes and systems for future application.
Material and Process Specifications
Industry review of government material and process
specifications provides government agencies preparing
these documents with current user experience and ad-
vice, and results in acceptable, usable documents of
minimum cost.
Specification reviews in 1975 covered such materials
andprocess items as aluminum, steel and titanium alloys;
coatings, elastomers and resins; and manufacturing proc-
esses covering adhesive bonding, soldering, welding
and heat treatment of metals. A review of published
documents reveals a high degree of acceptance of the
industry recommendation.
Council representatives are cooperating with the Mate-
rials Panel of the Defense Materiel Specifications and
Standards Board and the National Materials Advisory
Board of the National Research Council to improve the
development of materials and process specification and
utilize industry resources and documents.
Structural Design Criteria
Council representatives have been working with rep-
resentatives of the Air Force to develop acceptable struc-
tural design criteria requirements that will provide im-
proved structural integrity and service life at a minimum
cost impact. Industry specialists in structures and fracture
mechanics have met with Air Force structures specialists
to review specifications covering structural integrity,
durability and testing.
Organization Change
During the year, the Airworthiness Requirements Divi-
sion was re-designated the Aviation Division to reflect its
broader responsibilities
The Civil Aviation Adviso
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ry
roup
AIA has advised the military services of concern regard- was formed and is a part of the Aviation Division.
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For the third year in a row, aerospace exports rose appre-
ciably, even out-distancing Department of Commerce esti-
mates. In 1975 aerospace exports totaled $7.8 billion, with
civil aerospace exports (including transport aircraft,
helicopters, aircraft engines, general aviation aircraft and
aircraft parts and accessories) amounting to $5.6 billion;
military aerospace exports (including aircraft, missiles, en-
gines, avionics and all types of military aviation support
equipment) totaled $2.2 billion. This record aerospace ex-
port achievement proved to be a vital factor in the nation's
economy, especially during a period of economic stress.
While all major international developments in 1975 had a
decided influence on all types of aerospace exports, the
experiences of 1975 verified that there is no greater and
more decisive influence on U.S. civil and military aero-
space export programs than the policies, regulations and
attitudes of the federal government, including both the
Executive Branch and the Congress.
Foreign Military Sales (FMS)
The export of military aerospace products, closely con-
trolled by the Departments of State and Defense and to an
increasing degree by Congress, continued to be one of the
most universally misunderstood issues in the nation during
1975. Thus it was a major concern of the International
Committee during the year.
Legislation proposed by Senator Hubert H. Humphrey
introduced a new concept of export control of military prod-
ucts by placing the ultimate responsibility in the Legisla-
tive Branch. Industry and other critics believed its passage
would significantly reduce the nation's ability to utilize ex-
ports as a supporting instrument of economic and foreign
policy. This legislation, involving more extensive Congres-
sional control over aerospace exports, was being debated
at the end of the year.
The International Committee proposed and the Board of
Governors approved activation of an ad hoc committee to
review FMS policies and procedures.
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Domestic International Sales Corporation
Recognizing the importance of DISC to the industry, the
AIA Board of Governors formed an ad hoc committee to
support the retention of DISC. During 1975, AIA member
companies and Association staff worked closely with "The
Special Committee for U.S. Exports" in an effort to pre-
serve the DISC tax provisions, designed by Congress to
increase U.S. exports. The tax bill passed by Congress
before the Christmas recess contained no reference to
DISC, so the tax deferral treatment remained at year-end.
The Senate Finance Committee will start consideration of
a detailed tax bill in March, 1976. Industry holds that the
retention of DISC is important to preserving jobs in the U.S.
as well as serving as a significant incentive for U.S. aero-
space exports.
International Traffic in Arms Regulations
Potentially one of the most adverse actions leveled at
U.S. industry concerning military export programs in 1975
was the proposed changes to the International Traffic in
Arms Regulations which are administered by the Office of
Munitions Control, Department of State. Recognizing the
extensive negative impact on U.S.-manufactured military
aerospace exports, AIA requested an extension of time to
respond effectively to the proposed changes affecting
payment of fees and commissions previous to application
for export licenses for technical data and hardware and
approval of manufacturing licenses and technical assist-
ance agreements. U.S. industry would be placed at a
decided competitive disadvantage if these proposals are
adopted because foreign aerospace manufacturers are
not obligated to disclose their contractual arrangements.
AIA also supported Senate Resolution 265 which in-
structs the President's Special Trade Representative to
negotiate a code of international business practices at the
GATT negotiations. AIA emphasized that such a code
should preclude unilateral actions such as the proposed
changes to ITAR. The Senate had taken no action at the
end of 1975 and further appeals on industry's behalf may
be necessary as this appears to be the logical method of
dealing with an old and very serious international problem.
Export Financing
At the end of 1975, AIA learned that the Office of Man-
agement and Budget had proposed cuts on the order of a
billion dollars in the FY 1977 loan authorization level of
the Export-Import Bank of the U.S. Cuts of this magnitude
would prohibit Eximbank export financing of U.S.
manufactured commercial transport aircraft and would
eliminate loans to foreign nations having a per capita in-
come of more than $3,000.
AIA appealed to the Director of the Office of Manage-
ment and Budget to preserve the full capacity and effi-
ciency of Eximbank. Supporting data indicated that from
1970 to the end of 1975, $11 billion worth of transport
aircraft manufactured in the U.S. were for the export mar-
ket, a substantial portion of which was supported by the
Eximbank. These exports provided employment for
104,000 persons in 1975.
Because the loss of Eximbank financing would hav
e Cl"
extensive negative economic effect on the U.S. aerospace
industry in the increasingly competitive world marketplace,
AIA will continue to vigorously support the Eximbank.
International Trade Negotiations
During 1975, preparation for the GATT negotiations
continued as aerospace members of the Industry Sector
Advisory Committee met periodically with Commerce De-
partment and Special Trade Representative officials.
Supported by the International Committee and Associa-
tion staff, this group of selected aerospace trade experts
developed the Industry Sector Advisory Report.
In response to public notice issued by the Secretary of
the International Trade Commission, AIA in 1975 pre-
sented the position of the aerospace industry on the
economic impact of granting proposed concessions to be
considered in the forthcoming international negotiations.
Cooperation with Organized Labor
in the Aerospace Industry
Seeing the need for improvement of relations between
organized labor and the U.S. aerospace manufacturing
industry on international trade matters affecting the na-
tion's economy, the International Committee moved to-
ward a more open dialogue with labor in development of
industry-wide, consolidated positions on specific issues.
An important part of the International Committee 1975 fall
meeting was the opportunity afforded IAM officials to pre-
sent their views on significant international trade issues.
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The Office of Public Affairs in 1975 continued to focus its
primary efforts on the accomplishments of the aerospace
industry as the primary generator of high technology, as
well as providing information on such economic factors as
inflation and the problems of capital formation affecting the
industry. There was a substantial level of media inquiries
during the year on matters related to the industry.
Following are some of the major efforts:
Publications
Aerospace Magazine: This quarterly publication cov-
ered diverse subjects concerning the industry. Early in the
year feature articles included a salute to women in aero-
space as part of the International Women's Year proc-
laimed by the United Nations; a round-up on remotely pi-
loted vehicles; a preview of the Apollo-Soyuz mission; a
review of aerospace industry efforts in providing new
technical approaches to ground transportation systems;
and a report on the new generation of military aircraft in
production, test and design.
Other subjects included an article by Senator Frank E.
Moss on efforts by industry and government to develop
new technology and fuels to reduce the nation's reliance
on petroleum; the benefits of increased jobs and exports
brought about by the Domestic International Sales Corpo-
ration (DISC) legislation; a look-to-the-future article, au-
thored by Princeton Professor Gerard K. O'Neill, on the
establishment of space communities; a summary of future
air traffic systems written by Congressman Dale Milford,
Chairman of the House Subcommittee on Aviation and
a review
Transportation Research and Development, and
in
on accomplishments, challenges and opportunities
commercial air transportation.
Aerospace Perspectives: This publication, issued
periodically, continued to be an inexpensive yet effective
means of presenting a single subject of importance to the
industry. Issues have been widely quoted or reprinted in
full.
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Subjects in 1975 included aerospace exports, em-
phasizing their importance to national security and the
economy; the contributions of small business to the aero-
space industry; the vital role of investment capital in creat-
ing new jobs and keeping industry viable; an outlook of
the U.S. future in space; and the role of the helicopter in
law enforcement.
General Media: Five short "editorial" type articles were
disseminated to the general media during 1975, covering
the pollution of aircraft engine emissions compared to
other sources; the helicopter's mission as a rescue vehicle;
airports and their economic benefits; a review of DOD
spending and its relation to national priorities; and a "pie"
chart graphic showing the various percentage shares of
the major elements of the federal budget.
Directory of Helicopter Operators: The 1975 edition of
this publication lists the 5,222 helicopters in use by com-
mercial operators, companies, executive operators and
civil government agencies in the U.S., Canada and Puerto
Rico. The next edition of the Directory of Heliports will be
published in 1976. Other helicopter related publications
included the annual VTOL Aircraft Designation Chart; Di-
rectory of Helicopter Awards, 1944-1975,and the Federa-
tion Aeronautique Internationale Directory of Helicopter
Records.
Aerospace Facts and Figures, 1975/1976 was pub-
lished, again under the commercial promotion, sales and
distribution agreement with Aviation Week and Space
Technology, a McGraw-Hill publication. A similar agree-
h
ment
as been made for the 1976/1977 edition.
Advertising Program: A modest advertising program
was initiated in 1975 explaining industry accomplish-
ments and posture on problems. Six advertisements were
published covering the importance of aerospace to the
economy; the contributions of its exports; declining ex-
penditures for research and development; the problems
involved in the shortage of capital investment; the pay-off
on earth of space exploration programs; and the benefits
and advantages of commercial air travel.
Education Services
Efforts continue to aid those actively involved in aero-
space education at all curriculum levels. This sectionof the
Public Affairs staff handles educational correspondence;
conducts surveys through the Public Affairs Council as to
company interests and involvement in aerospace, career,
and economic education; communicates and cooperates
with both aerospace and non-aerospace organizations in-
volved in or providing educational services, and continues
to-analyze the potential educational resources of AIA staff
and member companies.
The service played a substantial role, in cooperation with
the National Aeronautics Association, the Air Transport
Association and the General Aviation Manufacturers As-
sociation in founding and continuing such major education
programs as the following:
1. The Journal of Aerospace Education, a professional
monthly (September through May) magazine devoted to
the promotion of aviation and space education at all levels
of learning, at the end of 1975 was being mailed to some
5,000 individuals.
2. The Directory of Aerospace Education is a complete
resource guide to materials and assistance for aviation and
space education. One hundred thousand copies of the
Directory were reprinted by the Federal Aviation Adminis-
stration for free distribution to individuals and institutions.
3. The National Council for Aerospace Education
serves as a national forum for the field providing the means
whereby representatives of the major organizations in the
field can review activities and developments and identify
areas for future-enhancement. The 1975 meetings were
the first time these organizations had come together to
discuss joint efforts.
4. Planning was Initiated for the American Society for
Aerospace Education to be created in 1976. It will be
the organizational banner under which earlier projects will
continue and new projects be initiated. Members of the
National Council for Aerospace Education unanimously
endorsed the Society concept at their November, 1975,
meeting in Washington, D.C.
Activities of President Harr
Mr. Harr attended and participated in numerous AIA
Council and Committee meetings, briefing them on the
major current projects of the Association.
In addition, Mr. Harr made several public speeches be-
fore such audiences-as the Board of Governors meeting of
the Electronic Industries Association; the semi-annual
meeting of the Air Industries Association of Canada in
Ottawa, Canada; the Sixth Annual National Conference,
National Investor Relations Institute; the Elfun Society,
General Electric Company; and the Year-End Review and
Forecast, presented before the Mid-East Region of the
Aviation/Space Writers Association. This latter speech has
become a highly productive effort in presenting industry
views before an audience of more than sixty working press
representatives.
A number of news releases were distributed during 1975
reporting upon testimony presented to the Congress by
President Harr and member company executives.
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 The decision of a U.S. District Court in Fort Worth, Texas,
AIA's
ra c e`rvice r sponsible for obt fining ant
i t iC` I "and
NY_ c hccsece to
e r n transpo on facilities'ar d service.
Within its area tf c ivity the Service repre-
s the . ssrciaation before tr~arspOrtetion
regulatory agencies, boards, associations of
carriers and the o tS.
in April highlighted a year of productive activity by
Traffic Service in representing the interests of its members
before courts and regulatory agencies in proceedings con-
cerned with the freight rates and services of commercial
carriers.
AIA intervention in the Fort Worth case was undertaken
to forestall attempts by motor carriers to assess, with sup-
port from staff personnel of the Interstate Commerce Com-
mission, unreasonably high freight rates on all parts and
components going into the manufacture of aircraft, re-
gardless of the stage of manufacture of such parts or their
common usage for purposes other than as aircraft
AIA
The court's findings favored the position supported by
and held the the higher rates were unlawful.
In addition to the foregoing case, Traffic Service in 1975
represented AIA in 19 additional proceedings before fed-
eral transportation regulatory agencies and carrier rate
bureaus. At issue were the freight rates on numerous
articles moving in support of aerospace manufacturing
programs plus the practices and procedures of carriers
which adversely affect the ability of AIA members to obtain
commercial transportation at optimum levels of economy
and service. Identifiable savings in the amount of
$2,228,218 resulted from the handling of such cases by
Traffic Service during 1975.
Traffic Committee Projects
The Traffic Committee is composed of the traffic, trans-
portation and distribution managers of AIA member com-
panies. Throughout the year the Committee coordinated
the interests of its members so as to permit Traffic Service
to undertake participation in the litigation discussed above.
The Committee also undertook numerous projects which
contributed to the effectiveness of the aerospace industry
in accomplishing overall goals and objectives.
To facilitate its activity in connection with such projects,
the Committee established several ad hoc task forces with
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initial responsibility to establish goals and objectives with
respect to given problems. The task forces thereafter de-
signed action programs and carried them forward so as to
attain their specific goals and objectives. The following are
representative programs which were undertaken by the
Traffic Committee and its task forces during 1975:
? Air Cargo Development: In coordination with person-
nel of the Civil Aeronautics Board and the National
Industrial Traffic League the task force identified prac-
tices and procedures of the carriers and the CAB
which impede the development of a viable air cargo
service.
? Travel and Personnel Movements: A task force made
an analysis of the experience of members in connec-
tion with the standard baggage liability levels of air-
lines and the practices of carriers with respect to the
settlement of claims for loss or damage to baggage.
? Data thus obtained were transmitted to the CAB for
the record in Docket 27859.
? Export/Import: A task force compiled, edited and pub-
lished changes to the AIA publication "An Introduction
to Export/Import Procedures." It also identified the
problems of members in connection with the exporta-
tion and importation of supplies and drafted a "white
paper" which detailed the effect on AIA members of
the practices and procedures of U.S. Customs in as-
sessing penalties. This is an on-going project and
actions seeking relief from.such practices will be con-
tinued.
? Household Goods: On a continuing basis a task force
reviewed the docket proposals of household goods
tariff bureaus to determine their impact on members
and thereafter recommended Committee action and
subsequent litigation as required.
? Department of Defense and NASA Requirements: A
task force maintained a continuing interface with
DOD and NASA traffic and transportation offices for
the purpose of reviewing proposed and existing re-
quirements of those agencies with respect to policies
affecting the movement of materiel under govern-
ment contracts. The task force was actively involved
in connection with the DOD requirements governing
the transmission of classified material.
? Department of Transportation Requirements:
Throughout the year a task force reviewed all notices
of rulemaking governing the requirements and regula-
tions of DOT affecting the transportation of hazardous
materials. AIA participation in several such rulemak-
ing proceedings was on the basis of position papers
prepared by the task force.
? Tariff Construction: A task force coordinated the in-
terests of members and prepared position papers
necessary for AIA participation in proceedings con-
cerning the tariff publications of air and surface car-
riers.
? Liability and Claims: A task force identified problems
of members with respect to the handling of loss and
damage of air cargo claims by air carriers. Thereafter
the task force accomplished coordination with the
carriers and the CAB in an effort to eliminate such
problems.
? Energy: The energy task force is responsible for keep-
ing membe
rs apprised of all energy developments,
including actions of regulatory agencies, which impact
on members' ability to obtain adequate transportation
service from common or private carriers.
Transportability: Task force projects undertaken in
this area during 1975 include coordination with federal
and state highway officials and highway heavy haulers
in efforts to obtain uniform permit re uir
to facilitate the highway movement of oversize ae o-
space shipments. The task force also coordinated the
interests of members and drafted AIA position papers
in response to requests for comment from DOD and
NASA on proposed transportability regulations of
those agencies.
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ORGANIZATIONAL CHART
(January 1, 1976)
The Aerospace Industries Association of
America, Inc. (AIA) is the national trade
association of companies in the United States
of America engaged in the research, develop-
ment and manufacturing of aerospace sys-
tems, including but not limited to manned
and unmanned aircraft, missiles and astro-
nautical vehicles, their propulsion or control
units, or associated equipment.
Association policy is determined by a
Board of Governors consisting of senior ex-
ecutives of twenty-six member companies
and the AIA President. The President, who
is also General Manager, is responsible to the
Board for execution of its policies.
Membership of the Association at the end
of the year totals 64, including 47 Division
A (manufacturing) members, 6 Division B
members, and 11 affiliate members.
OFFICE OF PUBLIC AFFAIRS
Carlyle H. Jones
Vice President
AEROSPACE TECHNICAL
COUNCIL
C. Ronald Lowry
Vice President
PRESIDENT
(General Manager)
Karl G. Harr, Jr.
AEROSPACE RESEARCH
CENTER
Director
Allen H. Skaggs
VICE PRES./SECRETARY
(Business Manager)
Samuel L. Wright
TREASURER
(Controller)
George F. Copsey
OFFICE OF
LEGISLATIVE COUNSEL
Lloyd R. Kuhn
Vice President
GENERAL COUNSEL
M. H. Wilner
AEROSPACE OPERATIONS
SERVICE
David A. Webster
AEROSPACE PROCUREMENT
SERVICE
F. O. Ohlson, Jr.
Vice President
INTERNATIONAL
SERVICE
M. J. Garrett
TRAFFIC SERVICE
A. J. O'Brien
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AIA MEMBERSHIP
MANUFACTURING MEMBERS
ABEX CORPORATION
AEROJET-GENERAL CORPORATION
AERONCA, INC.
AERONUTRONIC FORD CORPORATION
AVCO CORPORATION
THE BENDIX CORPORATION
THE BOEING COMPANY
CCI CORPORATION
The Marquardt Company
CHANDLER EVANS INC.
Control Systems Division of Colt Industries Inc.
E-SYSTEMS, INC.
THE GARRETT CORPORATION
GATES LEARJET CORPORATION
GENERAL DYNAMICS CORPORATION
GENERAL ELECTRIC COMPANY
Aircraft Engine Group
GENERAL MOTORS CORPORATION
Detroit Diesel Allison Division
THE B. F. GOODRICH COMPANY
Engineered Systems Co.
GOODYEAR AEROSPACE CORPORATION
HEATH TECNA CORPORATION
HERCULES INCORPORATED
HONEYWELL INC.
HUGHES AIRCRAFT COMPANY
IBM CORPORATION
Federal Systems Division
ITT AEROSPACE, ELECTRONICS, COMPONENTS
AND ENERGY GROUP
ITT Aerospace/Optical Division
ITT Avionics Division
ITT Defense Communications Division
KAISER AEROSPACE AND ELECTRONICS
CORPORATION
LEAR SIEGLER, INC.
LOCKHEED AIRCRAFT CORPORATION
MARTIN MARIETTA AEROSPACE
McDONNELL DOUGLAS CORPORATION
MENASCO MANUFACTURING COMPANY
NORTHROP CORPORATION
PNEUMO CORPORATION
RAYTHEON COMPANY
RCA CORPORATION
ROCKWELL INTERNATIONAL CORPORATION
ROHR INDUSTRIES, INC.
THE SINGER COMPANY
SPERRY RAND CORPORATION
SUNDSTRAND CORPORATION
TELEDYNE CAE
TELEDYNE RYAN AERONAUTICAL
TEXTRON, INC.
Bell Aerospace Textron
Bell Helicopter Textron
Hydraulic Research
THIOKOL CORPORATION
TRW INC.
UNITED TECHNOLOGIES CORPORATION
VOUGHT CORPORATION
WESTERN GEAR CORPORATION
WESTINGHOUSE ELECTRIC CORPORATION
Public Systems Company
AVIQUIPO, INC.
FRANK B. HALL AND COMPANY
Parker Aviation Division
BRUKNER, CLAYTON J.
CONDON, CYRILL HYDE
FALES, HERBERT G.
AIR CARRIER SERVICE CORP.
ASSOCIATED AEROSPACE ACTIVITIES, INC.
AVIATION WEEK & SPACE TECHNOLOGY
BRITISH AIRCRAFT CORP. (U.S.A.), INC.
COMMERCE OVERSEAS CORPORATION
COOPERS & LYBRAND
EASTERN AIRCRAFT CORP.
NATIONAL CREDIT OFFICE, INC.
TEXACO, INC.
TRANSAERO, INC.
U.S. AVIATION UNDERWRITERS, INC.
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