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Reaching New Heights in Aerospace and Defense Manufacturing

Press Release: December 08, 2009

Miami, FL, December 8, 2009 - FOR IMMEDIATE RELEASE

In an increasingly globalized world, the aerospace and defense manufacturing industry is playing a key role in reducing the gap between continents. As technologies advance even further, flying across vast terrains will turn into a routine for many more individuals. Tom Burbage, Executive Vice President and General Manager, F-35 JSF Program Integrations, Lockheed Martin Aeronautics Company, a speaker at the marcus evans Aerospace & Defense Manufacturing Summit 2010, taking place in Florida, February 1012, shares his thoughts on the latest opportunities in the industry, greening of the production process and his outlook for the next few years.

What are some of the challenges experienced by senior manufacturing executives in the aerospace and defense industry? What strategies would you recommend to overcome those issues?

Tom Burbage: There are a number of challenges. We are moving to a new level of technology in manufacturing, optimizing production and plant operations. We are implementing some new digitally driven procedures, which allow us to engineer in a 3-D engineering model environment. That will help us discover better ways of building and designing products that are producible in the long run. In our factory here, we are building three generations of fighter type airplanes, using completely different processes; methods that changed as the manufacturing thought process evolved over time.

Secondly, the current economic environment makes it difficult to plan for the long-term. If you look at Boeing, Airbus or Lockheed Martin airplanes, they all require high volumes of production to get economies of scale. As you bring on capacity, planning ahead is a requirement. Trying to optimize the capacity of your factories (which support your products) with the actual demand factor, however, is more complicated today than it has ever been. There is a risk of putting in more capacity than you need, driving the costs higher, or less capacity than you need, in which case you will not be able to satisfy the demand for your product.

What specific challenges are you facing?

Tom Burbage: Raw materials go through cycles that are influenced by both demand and cost of production. Two years ago, for example, it was projected that there would be a shortfall in supply for some of these materials, specifically composite fiber and high grade aluminum, so the price fluctuated. A number of large programs have now been delayed, slowing down the demand cycle, and the financial crisis has depressed prices. It has been a very dynamic situation. We are thus making long-term agreements with raw material suppliers and sub-contractors to try and dampen out the effects of the cycles, which can take us from one extreme to the other, in a short period of time.

We have nine partner countries on the F-35 project, all with their own internal processes for budget and procurement decisions. We therefore have to manage a very complex set of relationships, on top of managing a product which in itself is very complex. We work with military services, procuring agencies and congressional type bodies. On the industrial side, we have to forge relationships and try to match up capabilities with opportunities. Trying to create a sense of stability around all this is our biggest priority right now.

In your opinion, what opportunities has the crisis created in the aerospace and defense industry?

Tom Burbage: There are both opportunities and challenges, but sometimes it is hard to tell one from the other. From my perspective, the economic crisis has put pressure on defense budgets across all our partner countries. The overall value and priority of the program becomes paramount when that happens. If you are not the highest priority program, chances are you are going to suffer from reduced funding or even cancellations in some cases. On the other hand, there is an opportunity there. If you are of high priority, then you will be funded at the expense of other opportunities.

What are your thoughts on greening aerospace and defense manufacturing? Are you, for example, using any of your old equipment?

Tom Burbage: We are introducing a new set of manufacturing standards as we launch the F-35 project. Bringing on an airplane that has very tight tolerance control (meaning that we can control the variation across the surface of the airplane to within roughly the width of a human hair) we need new machines for these advanced manufacturing techniques. Re-using machines is thus not something we can do much of. We actually had to re-tool to the next generation of machines in some cases, as technology progressed in the ten year gap between the start of two of our programs.

The focus that we have as we bring on these new capabilities is completely orientated around being environmentally friendly. When we design our facilities, decide on materials and methods to use, we take the environment into serious consideration. As a result, we have received awards for our efforts, including a national award for the green processes and procedures that we had put in place on the F-22 program.

What are your plans for 2010?

Tom Burbage: We are always trying to streamline, become more efficient and reduce the labor content. We brought in Toyota executives from the automobile industry to help us plan the F-35 moving production line, to allow a higher production rate. That required a new way of thinking about our processes. 2010 will be a very interesting year for the F-35 project, as we introduce new manufacturing techniques and tools. The next challenge is to take this new capability, increase our capacity and go from building one airplane a month (which we are producing today) to about one a day, which we plan to manufacture in about five years. It is a very exciting time to be a part of this industry, as we are now able to do things that we could have only dreamt of a few years ago.

What are some of the developments we can expect from this industry in the coming few years?

Tom Burbage: We are constantly pushing these products to perform in ways never tried before, driving a transformation in the manufacturing industry in terms of complexity, tolerance control and volume of production. We will see a lot of new concepts, approaches and technologies emerge over the next few years, which will facilitate in delivering even superior products.

Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

Tel: + 357 22 849 313
Email: [email protected]

About the Aerospace & Defense Manufacturing Summit 2010

This unique forum will take place at the Doral Golf Resort & Spa, Miami, Florida, February 10-12, 2010. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on the F-35 Global Production System, combating counterfeit products, production optimization and the greening of aerospace and defense manufacturing.

For more information please send an email to [email protected] or visit the event website at http://www.aerospacedefensesummit.com/TomBurbageInterview.

Please note that the summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the worlds leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit http://www.marcusevans.com.

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Notes to editors

For more information, please contact:

Sarin Kouyoumdjian-GurunlianSarin Kouyoumdjian-Gurunlian

Tel: 44 203 002 300 244 203 002 300 2

Email: [email protected]@marcusevanscy.com

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