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Trends and Challenges in Aerospace Offsets (1999) / Chapter Skim
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Panel VI: Emerging Challenges and Diverging Interests
Pages 65-72

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From page 65...
... Current Trends The aerospace industry has undergone a process of consolidation, restructuring, and downsizing over the past decade. This process was driven by a downturn in the commercial aircraft industry and by deep cuts in the defense sector.
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From page 66...
... The defense sector is also the focus of a drive toward greater utilization of commercial technologies and practices, as previous speakers mentioned. This includes utilizing the commercial industrial base to meet military requirements.
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From page 67...
... Eighty-five percent of firms in the industry have established this type of longterm purchase agreement with their key suppliers. The major reason given was to reduce costs, followed closely by a desire to minimize future price fluctuations and to realize mutual performance improvements.
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From page 68...
... In particular, he remains concerned as to what are the long-run national security implications of greater military reliance on the commercial industrial and technological base as that industrial base becomes increasingly internationalized. The situation can be characterized as a prisoners' dilemma, requiring negotiations with our allies.
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From page 69...
... Specifically, he commented on a similar situation concerning the national security implications of the military moving to the commercial technological base as pointed out in the presentation. The technology involved was high-performance computing.
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From page 70...
... There is no governmental authority to go further. There is authority to control technology transfers for national security purposes, but not for competitiveness consequences.
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From page 71...
... He closed by noting that coalition warfare and the U.S. ability to ramp up defense production very quickly are important keys to national security.
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From page 72...
... defense industrial base. Offsets are not bad per se, but there are bad offsets.
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Key Terms

  • aerospace industry
  • industrial base
  • kelley noted
  • undersecretary reinsch
  • bozdogan referred

  • prime contractors
  • supplier partnerships
  • military requirements
  • commercial industrial
  • supplier chain

  • production operations
  • foreign sales
  • security implications
  • lean aerospace
  • defense sector

  • cost reductions
  • defense production
  • technological base
  • foreign governments
  • performance improvements

  • commercial aircraft
  • key suppliers
  • aerospace initiative
  • defense activities
  • mutual improvements

  • production costs
  • enhance supplier
  • control technology
  • control processes
  • initiative collects


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