[House Hearing, 117 Congress] [From the U.S. Government Publishing Office] MOVING UPWARDS AND ONWARDS: THE WORKFORCE AND INNOVATION NEEDS OF THE AVIATION AND AEROSPACE INDUSTRY ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON INNOVATION, ENTREPRENEURSHIP, AND WORKFORCE DEVELOPMENT OF THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTEENTH CONGRESS SECOND SESSION __________ HEARING HELD MAY 12, 2022 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 117-055 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 47-536 PDF WASHINGTON : 2022 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman JARED GOLDEN, Maine JASON CROW, Colorado SHARICE DAVIDS, Kansas KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota MARIE NEWMAN, Illinois CAROLYN BOURDEAUX, Georgia TROY CARTER, Louisiana JUDY CHU, California DWIGHT EVANS, Pennsylvania ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANDY KIM, New Jersey ANGIE CRAIG, Minnesota BLAINE LUETKEMEYER, Missouri, Ranking Member ROGER WILLIAMS, Texas PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania CLAUDIA TENNEY, New York ANDREW GARBARINO, New York YOUNG KIM, California BETH VAN DUYNE, Texas BYRON DONALDS, Florida MARIA SALAZAR, Florida SCOTT FITZGERALD, Wisconsin Melissa Jung, Majority Staff Director Ellen Harrington, Majority Deputy Staff Director David Planning, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Jason Crow.................................................. 1 Hon. Young Kim................................................... 2 WITNESSES Hon. Eric Fanning, President & Chief Executive Officer, Aerospace Industries Association, Arlington, VA.......................... 5 Ms. ML Mackey, Chief Executive Officer, Beacon Interactive Systems, Waltham, MA, testifying on behalf of the National Defense Industrial Association (NDIA).......................... 6 Mr. Blake Scholl, Founder & Chief Executive Officer, Boom Technology, Inc., Centennial, CO............................... 8 Ms. Judy Burns, President, Patriot Machine, St. Charles, MO...... 10 APPENDIX Prepared Statements: Hon. Eric Fanning, President & Chief Executive Officer, Aerospace Industries Association, Arlington, VA............ 23 Ms. ML Mackey, Chief Executive Officer, Beacon Interactive Systems, Waltham, MA, testifying on behalf of the National Defense Industrial Association (NDIA)...................... 28 Mr. Blake Scholl, Founder & Chief Executive Officer, Boom Technology, Inc., Centennial, CO........................... 31 Ms. Judy Burns, President, Patriot Machine, St. Charles, MO.. 39 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: NBAA - National Business Aviation Association................ 43 Pilot Supply by the Numbers.................................. 47 Pilot Retirement Age Facts................................... 48 MOVING UPWARDS AND ONWARDS: THE WORKFORCE AND INNOVATION NEEDS OF THE AVIATION AND AEROSPACE INDUSTRY ---------- THURSDAY, MAY 12, 2022 House of Representatives, Committee on Small Business, Subcommittee on Innovation, Entrepreneurship, and Workforce Development, Washington, DC. The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 2360, Rayburn House Office Building, Hon. Jason Crow [chairman of the Subcommittee] presiding. Present: Representatives Crow, Houlahan, Young Kim, Luetkemeyer, Williams, Tenney, and Garbarino. Chairman CROW. Good morning. I call this hearing to order. Without objection, the Chair is authorized to declare a recess at any time. I would like to begin by noting some important requirements. Standing House and Committee rules and practice will continue to during hybrid proceedings. All Members are reminded that they are expected to adhere to these rules, including decorum. House regulations require Members to be visible through a video connection throughout the proceeding, so please keep your cameras on. Also, please remember to remain muted until you are recognized to minimize background noise. In the event a Member encounters technical issues that prevent them from being recognized for their questioning, I will move to the next available Member of the same party and I will recognize that Member at the next appropriate timeslot provided they have returned to the proceeding. The U.S. aviation and aerospace industry is crucial to our national security and national defense capabilities. From commercial airliners to telecommunication satellites, the aerospace industry touches the lives of countless Americans every day. The industry also provides meaningful employment to over 2 million workers. These are great paying jobs that allow workers to further their careers and support their families. In 2020, aerospace workers averaged roughly $104,000 in wages and benefits. The impact of this industry extends beyond U.S. borders. Domestic aerospace companies are global leaders that export civil and military products to countries worldwide. In 2020 alone, the industry generated $874 billion in total industry sales revenue. The impact of this industry is big, but small businesses make up a substantial portion of the sector. For example, small entities comprise more than 90 percent of businesses in airline transportation, air transport support, and aviation manufacturing. Despite the successes of the aerospace industry, COVID has presented unprecedented challenges. Travel restrictions around global air traffic to a near halt in the early days of the pandemic. Since then, new variants and intermittent rising case counts have continued to depress commercial aviation's recovery. In January of this year, flights operated stood at 85.3 percent of pre-pandemic levels. But even with this decreased demand, companies are struggling to hire the right workers to keep up with the supply. This problem is not confined to the aerospace industry. Small businesses across the country are feeling the effect of an overall labor shortage. This worker shortfall is complex and connected to pandemic-related issues, like decreased legal immigration, early retirements, and a lack of childcare options for working parents. But even before the pandemic, the aerospace industry faced labor issues, including an aging workforce and the need to constantly upskill workers due to innovation. These problems have led to shortfalls in vital positions, including pilots and mechanics, and staffing shortages have led to record flight cancelations throughout early 2022, creating significant disruptions for travelers. The implications of this labor shortage also extend to our military. Studies predict significant shortfalls for Air Force and Navy pilots very soon. This is simply unacceptable. If the aerospace industry cannot find an adequate number of trained workers, our economy and national security will suffer. That is why we must use the tools at our disposal to ensure that workers have the necessary skills to fill these positions. The FAA Reauthorization Act of 2018 and the National Defense Authorization Act for Fiscal Year 2020 added training grants for the pilot workforce alongside aviation maintenance technical workers. The aerospace industry has also embraced apprenticeships as a model for attracting young workers and equipping them with the necessary skills to succeed. So today, we will deepen our understanding of this industry, examining these workforce initiatives and other policy solutions that can support workers in the aerospace sector as we work toward recovery. I would now like to yield to the Ranking Member, Mrs. Kim, for her opening statement. Ms. YOUNG KIM. Thank you, Chairman Crow. I want to thank you for holding this hearing, and I want to thank all of our witnesses for testifying today. Over the past few years, small businesses within the aviation and aerospace industries have been met with unparalleled economic headwinds, including labor shortages, supply chain disruptions, and soaring costs. These industries are vital to our economy as they produce both military and civil aircrafts, facilitate trade and tourism, and connect Americans worldwide. Small businesses play a key role in aviation and aerospace. According to the Census, statistics of the U.S. business, 94.3 percent of all firms that provide air transportation are considered small businesses and almost 88 percent of aerospace firms are small businesses. One of the biggest challenges these firms are facing is the unprecedented labor shortage. The most recent Job Openings and Labor Turnover Summary reported 11.5 million job vacancies. To make matters worse, employers continue to face record numbers of workers leaving their jobs. And in March, 4.5 million workers quit their jobs. These trends persist, even as nearly half of small business owners have reported job openings they could not fill. Worker shortages are not a new issue to the aviation and aerospace industries. In fact, this Committee held a hearing back in 2018 on this exact issue. Unfortunately, COVID-19 exacerbated the shortages by encouraging early retirements among airline and aerospace workers uncertain about their career prospects in a sector that was almost entirely shut down for months. According to the Regional Airline Association, the United States will lose about half of its pilots to retirement in the next 15 years. Further, a recent study found a lack of technical staff as the top disruptor for the aviation maintenance and repair sector over the next 5 years. A pilot and technician shortage affects not only the airlines but also the millions of Americans who fly each year. Another issue that is contributing to the worker shortage is the growing skills gap. These sectors rely on highly skilled workers to build aircrafts, satellites, missiles, and conduct maintenance and safety tests. According to a recent study by Deloitte, the manufacturing skills gap in the United States could result in 2.1 million unfilled jobs by 2030. The cost of these missing jobs could total $1 trillion in 2030 alone. The lack of skill labor is a major concern, and if not addressed, could have serious impacts on our economy. From finding and retraining skilled labor to supply chain issues and skyrocketing costs and disruptive inflation and energy prices, our small businesses are facing a multitude of economic hurdles that threaten to close their doors. I look forward to hearing from our witnesses today on how we can better support you, and I hope to work with my colleagues to find real solutions to elevate the increasing economic challenges that our small businesses are facing every day. Thank you, and I yield back. Chairman CROW. Thank you, Mrs. Kim. The gentlelady yields back. I would like to take a moment to explain how this hearing will proceed. Each witness will have 5 minutes to provide a statement and each Committee Member will have 5 minutes for questions. Please ensure that your microphone is on when you begin speaking and that you return it to mute when finished. We run a tight ship here, Mrs. Kim and I, so please stick with your 5 minutes so I do not have to gavel you out. So with that I would like to introduce our witnesses. Our first witness is Mr. Eric Fanning, President and CEO of the Aerospace Industries Association, the leading advocacy organization for the aerospace and defense industry. He has more than 25 years of distinguished government service. He previously served as Chief of Staff to the Secretary of Defense, Acting Secretary of the Air Force, and Deputy Undersecretary of the Navy. In 2016 and 2017, he served as the 22nd United States Secretary of the Army. He is the only person to have held senior appointments in all three military departments and the Office of the Secretary of Defense, which actually raises the question for me is when you tell military jokes, which service do you make fun of? So thank you, Mr. Fanning for joining us. I look forward to your testimony. Our next witness is ML Mackey, co-founder and CEO of Beacon Interactive Systems and Division Chair of the National Defense Industry Association Small Business Division. Ms. Mackey is an innovator and entrepreneur. Her company, Beacon, is a valued and rapidly-growing provider of mission-critical systems to the Department of Defense that helps drive efficiency, improves sustainability, and unleashes productivity. She is an advocate for small businesses, women's leadership, and STEM innovation. Ms. Mackey is an active Member of the NDIA's Workforce Project, and in 2021, served as the Board Chair of the National Small Business Association. Welcome, Ms. Mackey. It is a pleasure to have you on the panel. Our third witness is Mr. Blake Scholl, the CEO of Boom Supersonic, an end product supersonic aircraft company based in my district. Mr. Blake started Boom in his basement in September 2014 with the goal of making high-speed travel mainstream and enabling a new world of human connection. Prior to founding Boom, he held a leadership role at Amazon and cofounded the mobile tech startup, Kima Labs, which was later acquired by Groupon. Thank you, Mr. Scholl. I look forward to hearing about your experience. I will now yield to the Ranking Member to introduce our final witness. Mr. LUETKEMEYER. Thank you, Mr. Chairman and Ranking Member. I would like to welcome our final witness who is from my district, Ms. Judy Burns. Ms. Burns is the president and cofounder of Patriot Machine, Inc. Her company is headquartered in St. Charles, Missouri, which is in the eastern part of Missouri's 3rd Congressional District. Ms. Burns and her husband started this small business more than 30 years ago and the company has since expanded to 160 employees. Patriot Machine is a globally competitive aerospace manufacturer supplying highly complex structural parts and assemblies to America's largest aircraft manufacturers. The company prides itself on its cutting edge technology, skilled workforce, and advanced planning techniques. Patriot Machine continues to exhibit growth by recently adding a new advanced manufacturing facility with ample space for further expansion. Under Ms. Burns' expert leadership, Patriot Machine has received the Supplier of the Year Award on three separate occasions from the Boeing Company. Ms. Burns' other recognitions include Missouri's First Lady Award for success in the field of business innovation and the 2015 University if Missouri St. Louis Distinguished Alumni Award. I know Ms. Burns' experience as a small business owner and vast knowledge on innovation and workforce issues will be extremely beneficial to our hearing. Welcome, Ms. Burns, and thank you for taking time to testify before us today. And with that, Mr. Chairman, I yield back. Chairman CROW. Thank you. The Ranking Member yields back. Thank you all for joining us today. Mr. Fanning, you are recognized for 5 minutes. STATEMENTS OF ERIC FANNING, PRESIDENT AND CEO OF THE AEROSPACE INDUSTRIES ASSOCIATION; M.L. MACKEY, CEO AND A CO-FOUNDER OF BEACON INTERACTIVE SYSTEMS; BLAKE SCHOLL, FOUNDER & CEO, BOOM SUPERSONIC; JUDY BURNS, PRESIDENT, PATRIOT MACHINE STATEMENT OF HON. ERIC FANNING Mr. FANNING. Thank you, Chairman Crow, Ranking Member Kim, and Members of the Committee. Thank you for inviting me to be part of today's hearing. My name is Eric Fanning and I serve as the President and CEO of the Aerospace Industries Association (AIA). For over 100 years, AIA has advocated for America's aerospace and defense companies and the more than 2 million men and women who are the backbone of our industry. AIA thanks this committee for its ongoing leadership in listening and learning from A&D industry leaders to support and strengthen our industry. A crucial part of this effort is rightfully focused on our world-class workforce, which remains the bedrock of our industry's success. These men and women bring unparalleled experience and expertise, as well as tremendous heart to their work on behalf of America's military and our aviation transportation system. The A&D manufacturing base is a strategic asset for our nation, and the workforce is its cornerstone. The pandemic underscored how essential these employees are and reminded us of the unique capabilities they bring to bear in support of our security and safety each day. Without question, addressing our 21st century workforce needs is vital to our missions, our customers, and to America's national and economic security. Addressing the workforce needs of the A&D industrial base requires a strong partnership between government and industry. There are several ways AIA would like to work with government leaders and Congress to address these needs. This includes investing in STEM education, reskilling current employees for new technologies, expanding our country's training efforts to broaden talent pools, and increasing workforce diversity and inclusion efforts within the A&D industry. The workforce is strong but challenges persist. Economic conditions like record inflation and the length and severity of the pandemic are adding pressures to the budget, affecting the cost of personnel, goods, and services. This has a direct impact on employment, and ultimately, our customers. These concerns were top of mind when our Supplier Management Council assembled in New Hampshire a few weeks ago. Like so many in the U.S., the pandemic created unprecedented challenges for our workforce. In 2020 alone, decreasing demand for products due largely to the reduction in air travel cost our industry 87,000 jobs. Approximately 64 percent of these losses came from the shared A&D supply chain, comprising of thousands of small and medium-sized businesses. Inflation is exacerbating the continued pressure on employment. Another challenge the A&D industry faces is the aging of our workforce. An estimated 26 percent of our industry employees are over the age of 55, slightly higher than the U.S. total workforce. Given this disparity and a projected increase in retirements, it will be imperative to retain and develop the mid-career workforce, while also continuing to attract top talent. AIA and our Members are committed to strengthening the diversity, equity, and inclusion throughout our industry. I say more about this in my written testimony, but our companies are investing significant resources into the attraction and recruitment of diverse candidates to ensure we are accessing the full breadth of what the country has to offer and to build stronger teams. How can industry partner with government to support and strengthen the A&D workforce? Congress can expand federal support for apprenticeships and career technical education, while also removing barriers that are preventing companies from effectively competing for highly-skilled talent. This includes addressing the lengthy security clearance process which is historically slow and bureaucratic, leading to staffing delays and slowdowns for important national security projects. Additionally, Congress must address the harmful research and development tax change that went into effect in January 2022 that reduces cash flow and in turn will affect employment. Nearly 70 percent of R&D spending is for wages and salaries. This means that R&D spending is an investment in America's workforce, as well as innovation. At a time when we need to stay ahead of the growing competitive threat from China, we must continue to build and strengthen our world-class workforce. It is our employees that are incubators of innovation. Their skill will usher in the next generation of advancements that transform and empower our country in the world. We urge Members to delay this tax change during the bipartisan Innovation Act negotiations. Thank you for having me today for this important and timely hearing. I look forward to your questions. Chairman CROW. Thank you, Mr. Fanning. Ms. Mackey, you are recognized for 5 minutes. STATEMENT OF M.L. MACKEY Ms. MACKEY. Chairman Crow, Ranking Member Kim, and Members of the Committee, thank you for inviting me to appear before the Innovation, Entrepreneurship, and Workforce Subcommittee today. And thank you for your consistent efforts in supporting America's small business community. My name is ML Mackey, and I am the CEO of Beacon Interactive systems. Beacon delivers innovative, efficiency improving, digital capabilities to the U.S. Air Force. I am also here today in my role as the Chair of the Small Business Division of the National Defense Industrial Association (NDIA), the nation's oldest and largest defense industry association, comprised of nearly 1,800 corporate and over 63,000 individual members. So the challenge facing the aviation and aerospace industry today is a workforce challenge. How do we increasingly grow the innovation workforce to address both current and future needs? Whether it is a focus on the scientists and engineers developing and delivering innovative technology or the maintenance technicians, the airmen on the flight line, maintaining and sustaining aircraft, there is a workforce shortage across the board. To be successful we can either increase the workforce so that we have more people available, or we can increase the capacity of the resources in place. The most successful outcome will be an artful combination of the two. Using Beacon as an example, participating in federal R&D programs not only enabled us to further develop technology innovation for the maintainers on the flight line, it also enabled us to further develop our own innovative workforce. This developmental impact in terms of becoming an ever more innovative team is the multiplier effect of federal R&D funding. It is important to call out that the innovation workforce is not only comprised of the technical resources typically thought of in STEM discussions, but also the wider team of innovation thinkers necessary to bring a successful product forward. It includes the program managers, the analysts, and the extended teammates of our Air Force colleagues on the flight line. This is the diversity of thought and creativity that fuels successful innovation. This is the team federal R&D funds let us explore, find, and push the envelope to develop. Without this well-developed intentional diversity of thought, innovation happens in one-off moments not as the continuous engine critical to U.S. national security needs and the country's economic prosperity. At this point I would like to broaden the discussion to bring in input and recommendations from my fellow NDIA colleagues. At NDIA, we talk a lot about workforce training. The success and growth of the aerospace and defense industry is reliant on a robust and talented workforce. Technicians are a critical component to the overall operational safety of the industry and are playing a vital role in supporting the pandemic recovery efforts. Boeing's recently released Pilot and Technician Outlook 2021-2040 forecasted that 626,000 new maintenance technicians will be needed to meet operator and MRO demand to maintain the global commercial aviation fleet over the next 20 years. Maintenance technicians will play a critical role in restoring, inspecting, and preparing aircraft that have sat idle during the pandemic to meet airworthiness standards. As importantly the industry will need an influx of technicians familiar with electrical and hybrid motors and components to keep pace with the emerging advanced air mobility sector. The recommendation here is to both continue and accelerate investment in federal workforce training programs for upskilling of the existing workforce, as well as outreach efforts for future workforce development. Another topic we frequently discuss at NDIA is procurement visibility. The need for a clear demand signal from the federal government, while important across all industry participants, is especially true for small business. This is not limited to just to procurement or research and development; it is also needed for businesses providing aerospace services, spare parts, and support. A critical step the federal government, and particularly DoD, could take to send a clearer demand signal to industry regarding its priorities for aerospace systems' sustainment would be to provide additional detail in the operations and maintenance budget request regarding the materiel availability objective for each major weapon system and the resources required across the FYDP to achieve that objective. That kind of accountability and transparency on the part of the federal government would enable greater investment in innovation and workforce development. In closing, I will give voice to a third recommendation, which is more about how to think about federal R&D than actual steps to take. I am going to suggest we collectively adjust our thinking on R&D funding from a singular engagement to more of a continuum; that it should be viewed as more than just the specific outcome of the specific R&D funding. It should be understood as a continuous investment in developing the innovation workforce critical to the aviation and aerospace industry. With that, I will close my remarks. Again, I would like to thank you Chairman Crow, Ranking Member Kim, and Members of the Committee. Thank you for the opportunity to appear before you this morning and thank you for your continued efforts in helping the small business community. I would be pleased to respond to any of your questions. Chairman CROW. Thank you, Ms. Mackey. Mr. Scholl, you are recognized for 5 minutes. STATEMENT OF BLAKE SCHOLL Mr. SCHOLL. Well, good morning, Chair Crow, Ranking Member Kim, Members of the Committee. Thank you for having me here this morning. I am Blake Scholl, founder and CEO of Boom Supersonic, and I am pleased to talk about the importance of entrepreneurship, innovation in U.S. aerospace, and our efforts to safely and sustainably return supersonic passenger flight. At Boom, we have already built and tested XB1, which is history's first independently developed supersonic jet. In our hangar just outside of Denver, we have the world's only operational nonmilitary supersonic jet, and we are well on our way to launching a Supersonic Renaissance with manufacturing starting in 2 years where we will create thousands of jobs in our super factory in North Carolina. But big things start small. Not that long ago, Boom was a tiny band of innovators in my basement in Denver building a supersonic airliner markup out of cardboard, plywood, and chairs from Office Depot. At Boom, we believe in a world in which more people can go more places more often, and we are redefining long distance travel with Overture, our supersonic commercial airliner. And we are proud especially to be part of an American manufacturing renaissance that is so desperately needed in our country. We are developing our Overture airline to satisfy three objectives: speed, safety, and sustainability. Aboard Overture, London is just 3.5 hours from New York, and Sydney, Australia, will become as accessible as Honolulu is today. Ultimately, we envision a future in which all can benefit from high-speed flight and making the planet more accessible. Increasing travel speeds fosters greater human connection, but here in 2022, we actually fly no faster than we did 65 years at the dawn of the jet age, and I think that statis in innovation in aerospace is a big reason why we have workforce challenges. We have not inspired young people to enter careers in aerospace. But small startups are changing the face of innovation and aviation. They are innovative, nimble, and able to take risks. And this mindset is what propels startups to bring revolutionary products, like a supersonic airliner to the market. Businesses that do great things all start small. And thanks to fundamental advancements in the aviation industry and at Boom, safe supersonic flight will now be comfortable, affordable, and sustainable. And this acceleration in flight is possible thanks to a revolution in clean energy. Historically, revolutions in energy have powered improvements in the speed of travel. In the 19th century, coal powered the transition from sail to steam and from horses to railroads. In the first half of the 20th century, oil powered the transition into airplanes. In this decade, a revolution in alternative sustainable fuels will power the transition to supersonic flight. It takes new entrants like Boom to change the fundamental paradigm of travel, both in terms of speed and sustainability. And it is important to note that the United States is not the only country developing supersonic aircraft. China and Russia are very visible investing in speed. The U.S. has long been a global leader in aerospace, and at Boom, we are determined to see the country remain at the forefront of innovation. And we are grateful for the early support we have received from both commercial and military sectors. United Airlines has purchased 15 of our aircraft with an option for another 35, a deal that brings our order book to 70 aircraft. And by comparison, only 14 Concords ever entered service. The supersonic technology we are developing will also give new strategic options to the U.S. military. The outbreak of war in Ukraine has shown us how important it is to get critical people and critical things where they need to be quickly, and in the future, supersonic capability will enhance the effectiveness of American leaders, diplomats, and servicemembers. Through the Small Business Innovation Research program, we are also proud to have two contracts with the Air Force. Our most recent is a 3-year strategic cost-share STRATFI, strategic funding increase partnership which is a dollar for dollar match between the Air Force and Boom to accelerate R&D on Overture. But in reality, taxpayers are getting an even better deal. The Air Force is leveraging our private capital and there are 10 investor dollars for every 1 dollar the Air Force has committed. By teaming with Boom, the Air Force gets in on the ground floor of a transportation revolution that can continue to build U.S. air superiority. The Air Force's interest in our work sends a powerful signal to our investors, customers, and partners, validating the viability of our aircraft, and the SBIR program allows the Air Force to mature technologies down the road. When we are ready for procurement, the technology is ready and the option is there. To ensure that U.S. leadership in aerospace endures, government must continue to partner with innovative small business to nurture innovation and to facilitate the next generation of aerospace technology and inspire people to go into the field. So thank you very much for having me here today, and I look forward to answering your questions. Chairman CROW. Thank you, Mr. Scholl. Ms. Burns, you are now recognized for 5 minutes. STATEMENT OF JUDY BURNS Ms. BURNS. Chairman Jason Crow, Ranking Member Young Kim, Congressman Luetkemeyer, and other distinguished Members of the Subcommittee, thank you for the opportunity to testify in this hearing, and thanks much for the opportunities that allow small businesses to participate in the aerospace and defense industry. I am the president and cofounder of Patriot Machine. Over the past 31 years, my company has grown from my home's garage into a globally competitive aerospace manufacturer with 160 employees. Headquartered in St. Charles, Missouri, we supply a variety of highly complex structural parts and assemblies to America's largest aircraft manufacturers. From the beginning, innovation has been the key to thriving in a highly competitive environment. The long-term health of our company depends on regularly integrating new technologies and continually finding new and better ways to improve operations. While we pride ourselves on our culture of continuous improvement and problem solving, there are some challenges we cannot take on alone. The labor shortage in America affects all businesses. At Patriot Machine, we have seen a marked decline in the number of skilled applicants since early 2020. Increasingly, we are training new hires on the job because they come to us without the necessary manufacturing skills. We are developing internal programs that emphasize structured, on-the-job training, and mentorship, and also provide financial support for education that applies to our industry. The costs of recruiting, onboarding and training new hires are significant, particularly if those employees leave the company after a short period of employment, which sometimes happens with new hires who are not yet sure what career path they want to follow. We know employees are looking for opportunities to learn and grow and we are committed to helping them. This is why we would like to see an increase in federal funding for technical education and community college programs with a technical focus to help prepare the incoming workforce for careers in aerospace manufacturing. Meanwhile, the aerospace industry's supply chain disruptions and rising prices in our sector have only worsened in the perfect storm of recent events. The price and lead-time of raw materials has doubled. Labor force issues, rising costs and other factors have caused our suppliers to increase their pricing significantly. Yet even under these volatile conditions, Patriot is bound by long-term fixed price contracts with our customers. I encourage you to keep these challenges in mind when making decisions on the 2023 defense budget. The increase currently outlined, while helpful, does not provide significant growth due to inflation. Aerospace companies like ours depend on strong support for advanced development programs, which is R&D basically, and for our existing production programs. A combination of both helps us to stay ahead with technology, but also adds support for long-term stability. Lastly, we are a capital-intensive business with a need to make serious financial investments in assets that often do not pay off for years. This is especially true of the acquisition of our high-tech machinery and equipment, which can take several years between the initial purchase, manufacture and installation. Hiring, training and retaining individuals capable of programming and operating this equipment takes significant investment as well. Rising interest rates will make these acquisitions harder, too. One item which helped manage these high-cost hurdles was the Tax Cuts and Jobs Act of 2017, which temporarily increased the allowance of bonus depreciation to qualified property to 100 percent of the value of assets acquired that year. However, that percentage will be phased out by 2027. An extension of these benefits, and perhaps even a way of making these benefits known in advance and permanent, would help Patriot Machine and other small businesses plan for the future. Thank you again for letting me share my perspective as a small business owner in the aerospace manufacturing industry. Your investments in aerospace projects allow us to continually improve technologies and develop the next generation of the workforce and industry leaders Chairman CROW. Thank you, Ms. Burns. I will begin by recognizing myself for 5 minutes. Mr. Fanning, starting with you, there has been a lot of discussion about reinvigorating the U.S. manufacturing base, onshoring things that we lost in the 1980s and the 1990s to create the ecosystem again, particularly in advanced manufacturing, yet it remains a very sticky challenge of how we find that workforce again that we lost over the last couple of decades, those skills. I would love your thoughts on what is the best way for us to redevelop that pipeline of skilled workers, particularly with respect to advanced manufacturing? Mr. FANNING. Thank you for that question. That is something we spend a lot of time thinking about. Obviously, we are in strong favor of American manufacturing, but we are a big exporting industry as well, and so we recognize the importance of the global markets in that way. There are a number of things that we saw from COVID that point to what we would like to bring back to the United States, chips being one of them. I think we have cut in half the production of chips in the United States as we look for cheaper labor elsewhere. But as you pointed out, there is a labor problem already, which is slowing the recovery. A number of our businesses think they could recover faster and do more quicker if they just had access to the workforce. I think one of the big things is what programs are out there to train for what. I remember Secretary Acosta saying when he was labor secretary in the previous administration that he was down in Florida talking about needing to train for machinists, and a university said, we will create an associate degree program for that because that is the only money they could get access to from the federal government. So these are good, high-paying jobs that require high skills, so leaning into and investing more on the government side in apprenticeships, work study programs, and really targeting where we can go after underrepresented communities. That is a whole category, a whole group of people that we are not accessing and should be accessing and helping them get on paths for these jobs. Chairman CROW. And will that require us reaching into K through 12 and really starting that pipeline earlier and, you know, are there any programs that you think would help, you know, really invigorate people's interest frankly in middle school and high school in this area? Mr. FANNING. Even elementary school. I think you are absolutely right. We want to get the big end of the funnel as big as possible. I mean, our experience with STEM education is it is a series of offramps. You lose kids when they lose from elementary school to junior high, junior high to high, high to college. You are not finding people that are coming in later in life because they do not have the skills that they need that they learn in math and basic science. And so there are programs, NASA, FAA, Department of Education that try to inspire kids into STEM as early as elementary which is important because then you need to get them all the way through high school to get them into these other types of programs that we are talking about, the apprenticeship programs. Chairman CROW. Thank you. Mr. Scholl, we had a chance to talk earlier about the SBIR program and obviously, one of the things we talk about a lot within this industry and context is the issue of the so-called ``Valley of Death,'' you know, where you have a lot of great ideas and companies that fall off before they can really bring things to scale and bring things to market. So I would love to get your views on that and the importance of programs like the SBIR program for companies like yours. Mr. SCHOLL. Yeah, I think the SBIR program is super important as a bridge from zero to one for new technologies. Without that, for example, with the Air Force, we would have to go from nothing to having a product that is ready for a program of record procurement process. And the hurdle for that is very high. And what SBIR does is allow the DoD, the Air Force, to signal interest in a future product to encourage private sector development of that product before it is ready to be purchased. So it helps bridge that ``Valley of Death.'' It helps bring things along and ensures that the U.S. has an option to procure an innovative product when it is ready. Chairman CROW. Thank you. Ms. Mackey, comments on either of those questions, or both of them? Ms. MACKEY. Diversity in innovation is really about diversity. So I am intrigued by the experience that you have about bringing a product forward. I also find in the SBIR pipeline that there is an idea and a thought more than a product. So there are these different paths that I think are all valuable and really important to the process. I will share our experience with the SBIR program was about bringing a capability forward that manifested into a product idea during the SBIR initial investment, and then beyond that transitioned to the Navy and now it is transitioning to the Air Force. So I think the SBIR program is a really important piece of our economy. I think it is also important to the workforce in that it lets us try innovative new things that otherwise as a small business we might be more conservative on. It lets us attract the workers that you were talking about into doing interesting work. Chairman CROW. Great. Thank you. My time has expired. The Ranking Member, Mrs. Kim, is now recognized for 5 minutes. Ms. YOUNG KIM. Thank you. I would like to ask my first question to Ms. Burns joining us virtually. Thank you. In your testimony, you reference the many challenges of being a small business owner, including labor shortages, inflation, and supply chain disruptions. So these are the hurdles that we heard from other businesses as well. And they do impact businesses in this similar industry. So how is your business managing with all these economic headwinds? Ms. BURNS. Thank you. Thank you, Congressman Kim. We are taking it all in as much as possible. One of the things during COVID that was very helpful was the PPP funding and then also---- Ms. YOUNG KIM. We have technical difficulty. Ms. BURNS. Sorry. Sorry. We were critical infrastructure during COVID, which was very good because it allowed our workforce to continue to work through all of the COVID difficulties. We were in the middle of building a new building, which we were able to continue doing and we are ready for new work opportunities now. And we have our new equipment installed. Fortunately, before, the interest rates were low but now going forward interest rates are rising. That will be more difficult. We are doing the best we can of bringing in whoever we can to train and work on jobs but we are very, very, let's see, highly technical. So it does take a lot of training. Ms. YOUNG KIM. So you mentioned that your company provides internal workforce development programs to train and mentor your employees. So can you tell us a bit more about the types of programs you offer? And what is the biggest challenge your small business faces in training your workforce? Ms. BURNS. Well, we, let's see. We do a lot of different things for training. When we onboard people, we have a lot of different things we have to train on--safety, different processes, equipment. We have a lot of very tight tolerances on our parts, less than like a hair's thickness. Then we have to measure them and make sure they are all made to order correctly. And we just are, let's see, putting in processes to make sure that everybody gets the training they need. So, we just do the best we can. Ms. YOUNG KIM. Thank you very much. Thank you. I want to move on to Mr. Fanning. In your testimony, you discussed the AIA Members launching a successful apprentice program at Valley Community College in San Bernadino. My district has parts of San Bernardino. How has this program helped meet the company's labor demands and bring new employees to the sector? Mr. FANNING. The company is CAS, Certified Aviation Services I think in your district. It is a great example of a public-private partnership. So they join forces with the local community college and provide on-the-job training actually on the aircraft that they are servicing, and 70 hours of that program, of that worktime, counts towards the degree. And it provides a pipeline since those students, while they are getting their certificates, are already working at CAS. They are more inclined and CAS wants to capture them if they can. Ms. YOUNG KIM. And those are the things we want to highlight. So what can we do in Congress and as Members who represent those, like your community college, to highlight and raise awareness for apprenticeship programs like that? Mr. FANNING. Well, I think the demand exceeds what is available for some of those programs. So if we could increase the funding for those apprenticeships to provide for the schools, that type of training that the companies can tap into and partner with, I think you will see the demand will grow with whatever the funding is available for those partnerships. Ms. YOUNG KIM. What I am hearing is a lot of funding. Continue funding that is working. Mr. Scholl, how has your business recruited the next generation of skilled labor in the past? I know you talked about bringing the new generation and want to make sure that this industry has more next generation that is interested in continuing the work? Mr. SCHOLL. Thank you. I think the most important thing is inspiration. People at very early ages decide what is going to be exciting to go into and what they can see themselves going into. And so reaching our young people, yes, I think going all the way back to kindergarten, if not sooner, and help ensure people from all walks of life that exciting things are happening, innovation is happening in aerospace, and supporting them all the way through their career so they can go do something amazing, not just go and work on a new app for a cellphone. Ms. YOUNG KIM. Thank you. I think my time is up so I will yield back. Thank you. Chairman CROW. The gentlelady yields back. I will now recognize the gentleman from Texas, Mr. Williams, Vice Ranking Member of the Committee, for 5 minutes. Mr. WILLIAMS. Thank you, Mr. Chairman, and Ranking Member Kim. We talk about garages a lot today. It speaks pretty well for garages. So I want to congratulate you all. And I want to thank the witnesses for being here today. I appreciate that. As a small business owner for over 50 years--I am a car dealer so we can talk about supply chain and some stuff--but 51 years. I still own my business, employ hundreds of people back in Texas. I know firsthand that we are always looking for more mechanics, technicians, and other technical workers as we talked. Our country is facing a growing skills gap as younger generations are not joining the vocational workforce--we have talked about that--at a high enough rate that we need. And I was pleased to see that my bill, the Supporting Small Business in Career and Technical Education Act passed this Committee in our markup yesterday which provides CTE graduates with additional support as they enter the skilled workforce. While this bill is a great first step in connecting CTE professionals and as a lot of kids are dropping out of school they need this so they can realize they can do other things and not go back to school. Congress and the Biden administration need to do more to address the technical worker shortage that is hurting industries across the country. And of the business owners trying to currently hire workers, we talked about this this morning, an astounding 93 percent reported having only a few or no qualified applicants for the position they were trying to fill and that is because this administration is paying people not to work rather than to work and we have got to fix that. So, Ms. Burns. I have a question for you. As an aerospace manufacturer, I know this technical worker shortage is not news to you. Would you elaborate quickly on the biggest challenges your small business is facing when recruiting and training skilled workers, and how is your woman-owned business adapting to this skilled labor shortage? Ms. BURNS. Well, it is a challenge. And we are trying to get people however we can, basically. We are bringing in people that are in other career or maybe, you know, like other types of work that have not had more advanced training that can come in and grow their skills and their career in aerospace manufacturing. And sometimes they do not have, you know, schooling past high school and they are more mechanical and they like these types of jobs. And---- Mr. WILLIAMS. If I might interrupt you, it just shows that training is important and that sometimes you have to go get people from another company rather than training them; correct? Ms. BURNS. Yes. Actually, we try not to do that too much but there are a lot of people who are switching between aerospace jobs who are getting recruited to other aerospace companies as well. Mr. WILLIAMS. Well, thank you. I will have another question for you here in a minute. So, Biden is skyrocketing inflation. We talked about that. Everybody is affected with this inflation and we have got no fix to it right now according to this administration. Continues to create uncertainty and has replaced the labor shortage as the top concern for small business owners. And on top of that, the Bureau of Labor Statistics released its April Consumer Price Index reporting that consumer prices, and all of you saw this, increased by 8.3 percent, which is worse than experts expected. Plus, we have a negative GDP. Another month of raging inflation from this administration means more bad news for business owners like all of us. And so, as a business owner when you get this, you have got to decide whether to reduce capital investment, lay off, or cut pay for employees, or pass the costs along to consumers in order to offset these increased costs, and that is not that easy to pass it on. So these are difficult decisions business owners should not be forced to make, and so many people in Congress, my colleagues, never have to make it because they have never owned a business. That is a big problem. So let me ask you this quickly, Ms. Burns. Can you expand on how the rising costs of goods and gas and labor has impaired your business and your customers? I am sure you cannot pass it on to consumers. You just in many cases have to expense it; right? Ms. BURNS. Right. We are going to have to expense those costs. I am not quite sure how we are going to cover it yet but while we are increasing business, I would say there is one good thing in the business environment now. Since we are coming out of COVID there seem to be a lot of new opportunities, which I think, will help grow our business if we can make sure that we get enough qualified people to help expand. Mr. WILLIAMS. And I think you touched on that, too. And everybody did here. The tax cuts that we passed in 2016, we need to make them permanent. Everybody is taking advantage of those. That is the debate we had back and forth between the two parties, but the tax cuts did as much to help this economy as anything, and I am glad to hear our witnesses say that. So with that in mind, Mr. Chairman, I will yield back. Chairman CROW. Thank you. The gentleman yields back. I will now recognize the gentlelady from New York, Ms. Tenney, for 5 minutes. Ms. TENNEY. Thank you, Mr. Crow, Chairman Crow, and Ranking Member Young Kim for holding this meeting. And thank you to the witnesses for your time, your insight, and being business owners in a tough economy right now. I am honored to represent New York's 22nd Congressional District which stretches from the shores of Lake Ontario in the north, all the way to the Pennsylvania border and everything in between. This region has a strong innovation heritage and centuries of pioneers in the Industrial Revolution, starting back with the digging of the Erie Canal in my district. And it is also the birthplace of IBM, the headquarters for the Air Force Research Lab Directorate, otherwise known as Rome Lab, which is a greater center for innovation in our communities. The area around Rome Lab especially hosts a vibrant ecosystem of aerospace companies developing the future of drones and their potential to improve our lives and our national security. This is aided by the New York Unmanned Aerial Systems Test Site, which includes a state-of-the-art, 50-mile long testing corridor that stretches from Rome, New York, to Syracuse, New York. However, one of our biggest constraints holding back progress has been the bureaucratic uncertainty from the FAA and the federal government, as well as the inability to secure needed components. We need a federal rulemaking process that actively incorporates the needs of small businesses and not just the entrenched interests that tend to be larger. We also must ensure that regulators are fully transparent about their plans and intentions so small companies can plan and adapt. The shortage of components is tied to the country's decades-long failure to curate a strong domestic supply chain and a line of important products and parts. As our aerospace industry increasingly pushes the boundaries of technology, it becomes more and more evident and important to ensure that our companies can access the semiconductors and the specialized components they need. This is a crisis for national security and our manufacturing capacity. I want to first address my questions to Ms. Burns, and I want to say thank you for bringing up the 2017 Tax Cuts and Jobs Act and the need to make them permanent. That has been one of the greatest things that has happened to our small business community in upstate New York. We have finally gotten a breather from the oppressive tax and spend type of policies coming out of New York State from the federal side thanks to that Tax Cuts and Jobs Act. Not only has it give us more growth in terms of our small business community; it has given them a little bit of an edge against some of their bigger competitors. So thank you for that, and I appreciate my colleague mentioning it. I wanted to first ask you though, in your testimony you wrote how the aerospace industry supply chain disruptions and rising prices have only worsened and that these constraints make it harder to carry out your long-term contracts with your customers. Would you be able to give an example of some important products that you are unable to purchase domestically and have to import from foreign sources and where you have to import them from? Ms. BURNS. Okay. Thank you for the question. We actually only use U.S. made products for our manufacturing. We do not outsource or have any foreign sources for our product. It is all U.S. made. But some of the prices in materials, such as aluminum, titanium, stainless steel, those types of things have, you know, some of them have gone up like double. Aluminum, for instance, is much more expensive than it was previously. Ms. TENNEY. Is your aluminum and your titanium, are they domestically sourced through the companies or are they-- obviosuly, they are coming from somewhere else. Ms. BURNS. They are domestically sourced. Yes. So they are made in the U.S. and I do not know why but there seems to be a shortage of some things right now. A shortage of supply. I am not really totally sure why. Ms. TENNEY. Thank you. I think it has to do with our policies. I quickly want to ask Mr. Fanning a question, and thank you for your question, Ms. Burns. You wrote that a January 2022 tax change has significant impacted America's innovators and their ability to recuperate some of their research and development expenses. Can you talk more about how this tax change is harmful and how it is hurting small businesses? Mr. FANNING. The change that occurred this year was to amortize R&D investments over 5 years rather than getting the credit in the year the expense was made. Seventy percent of R&D comes out of the private sector, and 70 percent of R&D expenses go to wages and salaries. So it is good for the economy. It is good to attract new workforce, and it is good for small business because a lot of small businesses are pulled into the research and development programs. Simultaneous to that, China is doubling down and giving a 200 percent deduction for R&D expenses. And so we look at it both from an innovation standpoint but also from a national security standpoint that we are making a change that could disincentivize private investment in R&D. Ms. TENNEY. Thank you for that. I appreciate it. And I think my time has run out so I yield back. Thanks, Mr. Chairman and Ranking Member. Chairman CROW. Thank you. The gentlelady's time has expired. I will now recognize the gentlelady from Pennsylvania, Ms. Houlahan, for 5 minutes. Ms. HOULAHAN. Thank you. Thank you, Mr. Chair, and thank you to all of you all for being here today. As an engineer and a former Air Force officer, I understand the very critical role that this industry and your industry plays in supporting our nation's defenses and to promote innovation across our economy. In my community in Pennsylvania, Boeing employs approximately 462 of my constituents contributing to an estimate $492 million of annual economic impact throughout Pennsylvania. The industry's impact reverberates across all of our local economies and supports small businesses in manufacturing and innovation. A common theme that I have heard in your testimonies is the need for greater federal investments in STEM and STEAM workforce development. To address this need, I have introduced a bipartisan STEM Restart Act to provide funding to small and middle-sized businesses, STEM businesses in particular, to offer robust, paid, mid-career internships, known as returnships, for mid-career workers. This would particularly benefit women who are seeking to return or transition into the STEM workforce. For Mr. Fanning, could you please talk a little bit about how providing funding for flexible workforce development opportunities, such as the returnships that are created by the STEM Restart Act, would help address the workforce development and diversity challenges that are faced by the aerospace and defense industry? Mr. FANNING. I think one of the things we have learned from COVID is the value of flexibility when you can afford it. And oftentimes, people leave the workforce because they cannot balance the competing needs they have outside of their job. And so providing that flexibility, recognizing it, implementing what we have learned during COVID we think will entice more people back into the workforce, and in particular, as you pointed out, women, which will help diversify our workforce. Ms. HOULAHAN. I appreciate that. It has definitely been my personal experience that it was very hard to kind of balance everything when my family was young. To Ms. Mackey, in your testimony you spoke about the importance of federal investments in Research and Development. On this Committee, I have introduced other bipartisan legislation that would enhance SBA's SBIR and STTR programs which have been shown to provide significant returns on R&D investments at the Department of Defense. Could you speak to the importance of reauthorizing these programs and share your views on how the program can be enhanced? Ms. MACKEY. Yeah. So it is incredulous to many of my colleagues in industry, at trade associations, and the government that the SBIR is at risk of being reauthorized. What is it, $1.2 billion a year of innovation. And as you talked about, that first step to engage with the Department of Defense and bring mission critical technology forward. So to your first point, it is almost ludicrous that we are even considering whether we should reauthorize it. But of course, we should reauthorize it and focus more on it. One of the things, I was at a Harvard Business School event 2 weeks ago with a lot of leadership from DoD and there were a lot of students look about how can we get into national security and how can we bring our emerging technologies and entrepreneurial interests forward? And one of the conversations was, and it is a lot like what you said, that SBIR is a gateway. I hesitate to call it a gateway but a gateway into the community that is an easy path into what is a different place than traditional commercial contracting. So we are a nontraditional defense contractor. The SBIR program let us first explore things that our more risk averse customers would not have explored. And then it exposed us to a whole new marketplace that is quite compelling in terms of personal satisfaction in what you deliver. So I do not know if that answers your question or if there is anything else. Ms. HOULAHAN. No, I appreciate that. Thank you. And with the limited the that I have left, I am really happy to hear that there is increased attention back to our conversation about diversity and inclusion in the aerospace industry, particularly with regard to female representation. According to AIA's 2021 Aerospace and Defense Work Study, only 25 percent of the workers in the industry are women. Additional data has shown that nearly 90 percent of professional airline pilots are white men. So to Mr. Fanning, how is the industry making strides in training, recruiting, and retaining women as part of its commitment to increase diversity and inclusion? And what can we do to be helpful? Mr. FANNING. Well, first of all, it is a priority because as we need to grow our workforce and are in a hunt for talent, we need to make sure that we are accessing everything that is out there. And so if we are leaving some parts of the country off the table, it is not going to be very effective for our recruiting efforts. Aerospace and defense companies are doubling down on efforts to provide mentoring, to provide paths for development and career growth and promotion, to recruit from different areas than they have in the past to try and find that talent. And we are, back to the other conversation, doing a number of things to attract people into STEM earlier. For example, we run the world's largest student rocketry challenge, and we just partnered with the Girl Scouts this year to get more girls into the program, get them excited about STEM, and then find paths for them through middle school and high school and into the industry. Ms. HOULAHAN. Thank you. I know my time has run out. I will foot stomp again on the importance of returnships. I think we are doing our very best to bring young girls along but we have to keep them once we get them. So I appreciate it, and I yield back. Chairman CROW. The gentlelady yields back. I will now recognize the gentleman from New York, Mr. Garbarino, for 5 minutes. Mr. GARBARINO. Thank you, Mr. Chairman. And thank you to the Ranking Member for holding this hearing. And thank you to the witnesses for being here. A question for Mr. Fanning, and maybe Ms. Mackey can add on to what she thinks after he answers, but Mr. Fanning, the week before last, the Senate Armed Services Committee held a hearing regarding the health of the defense industry industrial base featuring the president/CEO of the Professional Services Council, David Berteau, and former Undersecretary of Defense for Acquisition and Sustainment, Ellen Lord. Our hearing focus today is a little bit broader than that but both witnesses spoke repeatedly about the need for industry to have a clear demand and signal from DoD. For example, Secretary Lord stated, ``If you do not have a clear demand cycle and you do not know what is being purchased over the next 5 years, you cannot invest your resources, whether that be you plant, your equipment, your tooling, your people, in something where you do not know where the return is. And because there has been such an erratic demand cycle and purchasing cycle, companies start to go out of business or they put themselves up for sale. So the most critical thing that the government could do is be very clear about how much of what is going to be procured over multiple years and then have long-term multiyear contracts.'' And then Mr. Berteau reinforced this key message by saying, ``In order to be successful, the company has to predict what DoD is going to need. They have to invest in that years in advance, and then they have to maintain that investment until such time as the contract is awarded. This is very lengthy.'' I am from Long Island. Northrup Grumman used to have a big footprint. They left Long Island but a lot of their subcontractors are still on Long Island and I have met with a bunch of them. They run through an organization called the DAPS. It is an aerospace and defense trade association. And all of them have said the same thing as what these two witnesses said, they need more clarity in what kind of money is being spent and what is going to happen. And it is not just limited to procurement though, either. It is also, as you heard from, you know, research and development. What could the federal government, in particular DoD, do to send a clear demand signal to industry regarding its priorities for aviation systems sustainment to enable greater involvement in innovation and workforce development? Mr. FANNING. Thank you for that question. And I agree completely with what David Berteau and Ellen Lord said. Having spent most of my life on the government side in the Pentagon, now working with industry, I see how industry has to guess oftentimes. Not only is the clarity not there all the time but the consistency is not there. And so the 5-year defense program provides some clarity but is not always consistent over those 5 years. And one key element that is missing from that is sustainment costs. Seventy percent of the lifecycle costs of what the Pentagon guys are actually in the sustainment of it. That is not included in the 5-year defense plan and that would be another element that would be very helpful for industry in its planning to take some of the guesswork out which would actually serve the Department of Defense better in the long run as well. Mr. GARBARINO. I appreciate that. Ms. Mackey, do you have anything to add about what the federal government and DoD can do? Ms. MACKEY. So I would just add that the reality, the picture from a small business owner and from my colleagues at NDIA, and that is in plain speak, our bottoms are closer to the bottom line. We do not need it be easier but we need it to be consistent. So all of the strategic advice that you just gave, as well as once you release a procurement, make sure that you stay consistent to how you said you wanted to acquire. We have businesses inside NDIA right now that are working issues of having invested in order to do some of these larger procurements that really take them to the next level and then the playing field changes at the last minute and the ability to absorb those fits and starts and changes is really hard for small business. So I think consistency is the piece that I would like to recommend from the small business perspective. Mr. GARBARINO. Yeah, the bigger businesses might be able to manage it better than the small businesses. I have heard that as well from the member companies in my district. And just quickly, I know I am running out of time soon, a couple of you all spoke about what your company or your member companies are doing for recruitment because workforce has been very tough to fill. And I know what community colleges are doing. There has been a big push to get community colleges involved. Are we seeing any resistance from high schools, or really specifically high schools from pushing people into these trade jobs instead of pushing them to colleges or have you seen high schools being willing to send people to be part of these programs, students? And that is for anybody who has experience. Mr. FANNING. I do not know that we are seeing resistance but I do know we need to do a better job of explaining to schools, and to parents, why these are good paths. These are high-paying jobs that can support families and are doing interesting things. And so I think that is one thing we have identified we need to do better at which is explain why these paths are good paths. Mr. GARBARINO. All right. Thank you so much. I have run out of time so I yield back. Thank you, Mr. Chairman. Chairman CROW. Thank you. The gentleman yields back. One of the things that this Committee does a lot is talk about the supply of pilots, which is essential to making a lot of this work. And as additional background and context on that issue I want to submit a paper into the record with substantially more background by the Airline Pilots Association to make sure that we are getting the pilots' perspective on training and supply pilots as well. So thank you again to our witnesses for testifying today. This hearing has showcased the importance of the aerospace industry to our nation. The pandemic created unprecedented challenges but today the sector is on its way to recovery. However, these labor shortages will continue to hold back this industry and the entire economy if they persist. So I am hopeful we can work together to advance workforce development solutions that help upskill workers and ensure that small businesses of all types can find the right employees. Without objection, Members have 5 legislative days to submit statements and supporting materials for the record. And I want to just thank again all of the witnesses for your perspective, and this is the type of stuff that is actually called legislating and getting things done. And this is one of the more bipartisan committees in Congress, and I look forward to working with all Members to actually get these things done. So if there is no further business to come before the Committee, without objection, we are adjourned. Thank you. [Whereupon, at 11:09 a.m., the subcommittee was adjourned.] A P P E N D I X [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [all]