CPC Back to Work Budget • Job Creation • Fair Individual Tax • Fair Corporate Tax • Defense • Health Care • Environment
FY 2014 Budget: Civilian Investment “To compete in the 21st Century economy and make America a magnet for jobs, the Budget invests in American innovation, reviving our manufacturing base and keeping our Nation at the forefront of technological advancement. And to ensure our energy security and combat climate change, it continues to focus on energy production, the development of clean energy alternatives, and the promotion of energy efficiency efforts in both the public and private sectors.” • One-time, $1 billion investment to launch a network of up to 15 manufacturing innovation institutes. • Increases nondefense research and development (R&D) investment by 9% above the 2012 levels. • Race-to-the-Top challenge to states to cut energy waste and modernize the grid • Creates an Energy Security Trust to fund research efforts that would help shift cars and trucks off oil, and making permanent the tax credit for renewable energy production. • Invests in repairing our existing infrastructure and building the infrastructure of tomorrow, including high-speed rail, high-tech schools, and power grids that are resilient to future extreme conditions. • Provides $50 billion for upfront infrastructure investments, including $40 billion for “Fix it First” projects, to invest immediately in repairing highways, bridges, transit systems, and airports nationwide; and $10 billion for competitive programs to encourage innovation in completing high-value infrastructure projects. • Establishes an independent National Infrastructure Bank to leverage private and public capital to support infrastructure projects of national and regional significance. • Creates America Fast Forward (AFF) Bonds to attract new sources of capital for infrastructure investment. • Dedicates funding for the development of high-speed rail to link communities across the country, the Next • Generation Air Transportation System (NexGen) to improve air travel and safety, and a robust long term increase in levels for core highways, transit, and highway safety programs. • Establishes a new goal of cutting timelines in half for major infrastructure projects in areas such as highways, bridges, railways, ports, waterways, pipelines, and renewable energy.
Conversion Hurdles • High performance v. cost controls • Single customer v. multiple customers • Low volume v. high volume • Cost-plus contracting v. normal market forces • Concurrency v. sell it when you know it works
The conversion failure poster child: Boeing Vertol • World War II pulled Boeing, the country's leading manufacturer of commercial aircraft, into building B-17 and then B-29 bombers for the U.S. Air Corps. Then: Cold War planes, e.g B-52s. • 1960: acquired the Vertol company, maker of military helicopters. Also focused on emerging surface mass transit market. • Legendary failure: First contract to build 150 light rail cars for the city of Boston. Concurrency: “Deployed” before tested, began to break down. Boeing failed to complete the contract, and lost millions. • The forgotten ending: Boeing managed to unlearn the military practices that had handicapped the project, and went on to build transit cars that have worked well in both San Francisco and Chicago.
Military contractors moving into the green economy: HybriDrive • During the 90’s Lockheed Martin adapted technology from the hydraulic systems of its military aircraft for a hybrid (gas/electric) bus drive train propulsion system it called HybriDrive • Technology Reinvestment Project Grant • Lockheed Martin sold this technology to BAE Systems (global defense and security company with approximately 100,000 employees worldwide) • In early 2012 there were almost 4,000 HybriDrive busses (transporting nearly two million passengers a day) deployed across the globe: • US Markets • By 2000, 125 busses powered by this system were operating on New York City Streets. In 2011 BAE Systems put HybriDrive Buses on the streets in San Francisco, Houston, Seattle, and Chicago • Foreign Markets • In 2008, the first HybriDrive powered buses were exported to London, Japan and Canada
Military contractors moving into the green economy: Bath Iron Works • Military contracting focus: building destroyers for the Navy: principally the USS Arleigh Burke (DDG 51) and the Zumwalt (DDG 1000 class) • 2009: $8 million ARRA grant (with an additional $14 million investment from other federal sources) to a public-private partnership (DeepCwind) led by the University of Maine to develop an offshore test center in 2010 • Late 2012 additional DoE grant to move from a testing center to developing a fully functional deepwater floating offshore wind energy project (New England Aqua Ventus I) off the coast Maine by 2017 • BIW is not only a part the research efforts of DeepCWind Consortia, but also is involved in the construction of Aqua Ventus I. • In 2011 BIW said that offshore wind production “will fill gaps in our workload and help to sustain employment levels.” However: offshore wind production “will never equal the volume of work in a naval surface.” • But: parent company General Dynamics stock rated: “Neutral” recommendation. Reason? Uncertainty in where the defense budget is headed.
Defense Transition Assistance • Community planning • Technical assistance • Job retraining • Finance • Technology Transfer • National Network for Manufacturing
Suggestions for Advocacy and Action • CPC “Back to Work” Budget • Federal Defense Transition Assistance • State Defense Transition Assistance • Local models