POSTED ON FEBRUARY 15, 2012:
The Next Fly-Off
What is the next proven path for a city so reliant on aerospace?
Aerospace and Tulsa have an historic opportunity.
Ever since Will Rogers' barnstorming days with Wiley Post, and Tulsa being this glowing monument to big oil and big money and the robber barons of the mid-20th century, the airplane business in town has been something of an artificial entanglement.
What we are witnessing in Green Country is a strange conflation of a slow moving eight year economic roll down at American Airlines and a still fresh, convulsive round of job cuts, benefit contractions and impending contractor implosions at one of the Country's biggest legacy airlines. The total costs and the geometry of this brutal transition are unknown: they will be clear only after American's bankruptcy negotiations are concluded later this year -- and maybe not even then. Some sources believe Tulsa could eventually see as much as $1 billion in reduced wages, product purchases, supplier outlays and secondary expenditures -- over a third of the fly world "space" in Tulsa.
We are a pioneer aviation community -- one showing all the bruises that comes with that status -- a standing that has a yin and yang like kinetics.
There are several scenarios for Tulsa's near and mid-run aerospace future. The workups featured here are synthesized from talks with over two dozen aerospace veterans, adventurous academics and entrepreneurs, aviation business folks and some politicos in a position to know. Some of the trajectories are daunting -- others are positive, even dazzling. But we'll have to act -- as Tulsa has in crafting our reanimation of downtown -- with strong plans, some passion, real imagination and big projects to form an aerospace future worth having.
As UTW readers surely know American Airlines (AA) has elected to lay off 13,000 workers nationally and at least 2,100 people in Tulsa. Cancellation of multi-million dollar contracts, a spin down of longstanding supplier networks and decisions on continued use of a big City owned hanger, diagnostic facilities and other assets -- assets that Tulsa taxpayers have subsidized to the tune of more that $35 million -- are also afoot. These second wave decisions may spawn additional Tulsa job cuts.
Jason Best is the Tulsa vice president of Local 514 of the Transport Workers Union, a five-year AA veteran, the parent, with his wife, of four kids under 8, and a maintenance control pro at American.
"A lot of people, including a large part of the 5,600 members in the Local are very concerned about wages, benefits and jobs, myself included..." He said that he moved to Tulsa with his wife about five years ago, and was told by AA that this was a place where he could retire and take care of his family and he believed it.
Jason Best, Tulsa Vice president of local 514 of the transport workers union
Best went on to say that he was "feeling a lot of anxiety and considerable uncertainty" because, on top of being witness to the recent cutback, he is among 230 American Airlines employees who may be moved to Dallas as part of a maintenance control technician consolidation rework within a year. This transition was announced in October of last year. Best and some of his colleagues are also worried that American may shuttle some of its maintenance work to out of country operations in Singapore and Latin America. He said "his objective -- everyone's mission at the Local, and the intent of people like State Rep. Eric Procter, who is working very hard with 514, and some of the folks in the business community -- was the same: to save as many jobs as possible." He hopes "that every one in the area could get on board for this grand goal."
Interested parties can visit isupportamericanjobs.com to sign a petition for AA/Local 514.
Tulsa's gross product -- the total aggregate economic activity in the seven county metro areas -- according to state estimates, is on the order of $40 billion, as of last year. If the national share of economic activity produced by aviation/aerospace is on the order of 5.2 percent, (around $1.2 trillion) this would suggest that Tulsa's simple share would be approximately $2 billion dollars annually -- an impressive driver. The reality is that Tulsa is more aerospace centric than many American metros, hence the true share may be closer to six percent of Tulsa's gross product or around $2.4 billion.
It looks as though the Metro Chamber's early estimate of the annual impact of the announced AA payroll cuts comes in at about $345 million (including reduced sales and property tax payments). This will produce something like a 15 percent direct reduction in aerospace outlays in Tulsa this year -- my very simple estimate excludes "output" related calculations and other exotic computations.
We do know that the impacts of the AA employment cutbacks will be wildly disproportional however: Owasso's AA employee contingent will see 1,000 jobs axed -- just under half of the announced total of 2,100 folks. And with a labor force of around 9,200 people, the cuts will directly impact more than 10 percent of the population and nearly 20 percent of the households in the suburb. Since the early '40s, Owasso has been tightly tethered to the aviation world --labor educator and city planner, Dr. Bruce Niemi, told me that his former city manager peers referred to the town as an "airport suburb."
"City officials, business people and the local chamber have been talking with the Tulsa Metropolitan Chamber, American Airlines reps, and folks from the Governor's office for the last couple of months..." said Chelsea Harkins, chief of economic development and communications for the City of Owasso, but the situation didn't really pop out until she saw the numbers and thought about all the community members, friends and neighbors who are impacted.
Harkins expects the layoff will have real affects on Owasso's housing market and on schools. She closed by saying "the people of Owasso are embracing the affected employees and asking how they can help. Owasso and new allies from across the area are thinking about recruiting a company to employ some of the AA workers and looking at hosting job fairs and other active initiatives."
Imagine, that post bankruptcy, AA is acquired by Delta Airlines: many observers believe that Delta's business culture, hub operations, supplier network geometry and other assets are wildly different from American's and that convulsive changes in employee utilization, contractor payrolls and Tulsa asset usage would take place almost immediately.
Now, What If?
Imagine, alternatively that American Airlines is acquired by Southwest Airlines, which some aviation pros perceived to be a much friendlier and better fitted player for the AA/Tulsa "ecology." A Southwest merger would have much smaller impacts on our status quo in terms of employment disruption and contractor usage patterns.
Oddly, Southwest, which lots of keen folks see as one of the golden players in U.S. commercial aviation, is now also one of the most heavily unionized, highest wage ventures in commercial aviation -- a situation that makes AA management excuses about wage levels and pension outlays look really weird, especially given the monumental 2003 billion dollar plus "hair cut" taken by AA pilots, mechanics and flight attendants.
According to some economic observers, the most powerful, on going difference between Southwest and AA is labor productivity -- how much typical workers get done in a unit block of time. Labor productivity is heavily influenced -- turning again to a recent overview from the renowned MIT Global Airline Industry Program -- by pay, labor/management climate, aggressive cross training of employees, and what some call "empowering" workers. On nearly all these dimensions, the MIT piece and other sources used in this essay suggest AA has been off the mark for a while now -- my several sources in Tulsa's aviation labor community support this analysis.
Rick Mullings, a Tulsa labor activist and AA veteran said just prior to the cut backs at American that "the current American Airline's management's inability to fully engage laborers outlook on re-crafting key practices" at the Tulsa operation, "is a big part of the challenge at the company."
He and a colleague independently described the "Working Together", initiative -- a massive maintenance re-engineering internal project jointly fashioned by labor and management teams at AA -- as "a great effort -- involving people who know the most about aircraft maintenance and operations -- field people -- into the decisions and improvements circle at AA." The project reportedly turned a cost center into a sweet revenue production spot for AA. Unfortunately, I was also told that the project had effectively come to an end.
Imagine, as Dr. Neil Tyson -- the chief of the Haden Planetarium in New York City and an astronomical professional/science celebrity of the first rank -- posits that Tulsa takes advantage of its longstanding aerospace legacy, its strong entrepreneurial heritage and its surprisingly deep early participation in the American shuttle program, and joins up with one or more of the private commercial space ventures. On a visit to Tulsa in late 2010, Tyson suggested that active engagement on the part of the Green Country's aerospace community in the nation's still nascent private space industry was not only logical, but also likely. He went on to say that plenty of other communities have a shot as well -- imaginative, local leadership could make it so in T-Town.
In the 2007 film Golden Compass, director Christopher Seitz's imagines a parallel universe, one crafted by sci-fi/fantasy writer Philip Pullman, in which human souls are separated from our bodies but housed in invisibly tethered, companion animals. The "soulful" animal companions, which never leave their principal's side, are living commentaries on the personalities of their human partners. Actress Nicole Kidman plays a gleaming villain in Golden: she has a spider monkey for a companion animal -- a creature always up for nasty, mysterious stuff. The adult hero of the film, played by Daniel Craig, is always accompanied by a noble, talking snow leopard, voiced by actress Kristin Scott Thomas.
Oklahoma State University professor and graduate program administrator/aerospace guru Dr. Jamey Jacobs, who runs the unmanned aerial vehicle (UAV) masters and doctoral engineering programs at OSU, believes that the world of the Golden Compass -- a techno based, fully secular version of it -- is not far away. He also believes that Oklahoman's can be prime designers of this strange new world -- and he ought to know.
Jacobs imagines that someday, very soon "most human beings will be accompanied by tiny, insect sized, aerial drone companions", their utility, he told me, will be multifold and will essentially bring a sea of change to the way most people will live -- these nano UAV's could work as feisty hubs that can relay every kind of communication; act as real time monitors of our health; and perform, as he sees it, as grand, semiautonomous personal aides and "life recorders" always at hand, providing us with continuous documentation, navigation and panoramic sensor detail on our surroundings, people, places, info and things we encounter.
Jacob's forecast may strike some as Orwellian and others as really weird, but the pace of drone/related technology development is torrid -- and amazingly Oklahoma is at the red-hot center this rollout! Jacobs and a host of other observers imagine dramatic employment, spin-off and mid-run development benefits if Oklahoma achieves "first mover" status in the drone space including the personal/nano-UAV arena.
Oklahoma's foray into robotic aviation is a super strong, high yield piece of our State's economic development strategy -- it may be the most stout, consciously crafted element. Oklahoma's UAV "project" has what technology and science writer Steven Johnson of Where Good Ideas Come From fame, might see as all the right stuff for a giant leap forward -- very aggressive political support from Gov. Fallin; a charismatic and imaginative scientific/organizational project leader in Dr. Stephan McKeever, who is an OSU physics professor and vice president of technology transfer, and who also serves as Gov. Fallin's science and technology chief; over $40 million in federal contract funds; and one of the few authorized UAV air test corridors in America. But more important than anything is the adventurous mini-culture, the élan of a fully energized faculty/graduate student posse (at OSU) -- a cadre that has been winning international design and engineering drone competitions for years. And we can add a passel of well-trained aerospace tech/pro folks -- in Tulsa, Oklahoma City and Lawton who might be up for a new, big ol' fly world gambit.
My first memory of flying was as a young child in the late '50s. I don't remember a lot of the details, but my mom and I were flying with my brother to Germany to be with my father -- an Army guy. I remember a huge panic and lots of confusion as we were flying over the Atlantic Ocean in route to Fulda, Germany -- a vast U.S. tank fortification and staging ground designed to forestall a Soviet conventional attack from Evil Empire. I was pretty young, so I only have a dim conception of what was going on -- the "event" that punctuated our flight didn't last very long and we landed safely. I remember thinking that it was all extremely exciting and everybody got off the plane really happy -- strangely, I've loved flying ever since.
My other hefty early "flying" moment was when I watched Stanley Kubrick's 1967 film 2001 as an early teen. One of the most memorable scenes -- the end flight of a giant airliner scale space plane in terminal rendezvous with a huge space station orbiting Earth. The shot sequence is one of the most famous in American cinema -- certainly one of the most iconic moments in science fiction. As the space plane commences it's final approach to the space station, our point of view is the space plane's cockpit -- a vista dominated by an array of strikingly beautiful digital guidance displays and the ultra darkness of space. We hear Johann Strauss's, The Blue Danube Waltz, in the background. Interesting, the space plane was emblazoned with a gigantic Pan Am logo. I thought this would be part of my adult world, as did many Boomer kids: a world festooned with feverish expectations of a flight/space centric future.
It was a "futures" zone populated with hypersonic airliners where you could get from say Austin, Tex. to Tokyo, Japan in less than four hours and come back that very same day to a late dinner in San Francisco. My imagined grownup world was also filled with flying cars: millions of dual use vehicles that could travel on surface streets but also join thousands of commuters flying hundreds of feet above the ground in loose, computer mediated pelotons. The future was to be, Walt Disney and others had promised, a world where "personal flight", space exploration, and "off world" tourism was in advanced play. Like so many kids who grew up in the '60s and early '70s, my entire kid peer group was certain that America would be a space faring society and trips to space stations, to the moon and to other spots would be epic, but regular parts of everyday life -- boy were we wrong!
Tyson said that "even though I can't take a 10am flight to the space station," NASA, the Jet Propulsion Laboratories, the European and Japan space communities had surveilled every world of any consequence in our solar system, except Pluto -- a result, he said is "not evident in Kubrick's shiny 2001 world."
He also said that this vast, permanent knowledge base and the technological, engineering and computation advances needed to make a successful automated planetary program possible, has hugely enriched our world. Tyson went on to add that the UAV/autonomous vehicle revolution, the most explosive growth thrust in aviation today, is arguably an unanticipated spin off of our planetary robotics program.
Tyson also said that he was optimistic that, what he called, President Obama's bold effort to take $6 billion from conventional space outlays to spark commercial launch, space tourism and other next stage space projects was "a masterstroke from both a strategic and a technical standpoint."
NASA, he said, "was a wonderful agency that facilitated the early exploration of space. Tyson believes the agency "had done its job" -- the next stage of America's adventure in space, he opined, would be lead by adventuresome private companies like Paypal founder Elon Musk's SpaceX venture and Richard Branson's space tourism project (and he could have added, a looming Chinese space gambit as well). These U.S. companies, he said, would use federal dollars and backing to ramrod a true space faring era. And some exciting, if still early stage commercial space work is advancing. Space.com writer Denise Chow wrote a piece that is typical of the little noticed, but increasing dramatic, spin-up of private space commercialization:
"The launch of the first privately built spaceship to the International Space Station is targeted for late March, but will most likely lift off in early April, a top NASA space station official said today (Feb. 2). The unmanned Dragon space capsule, built by California-based Space Exploration Technologies (SpaceX), was originally scheduled to launch on a demonstration flight to the orbiting complex on Feb. 7, but the company announced last month that more time is needed to prepare the vehicle for flight. The capsule will now launch no earlier than March 20, but a more precise date will be announced in the coming weeks, SpaceX and NASA officials have said."
Interestingly, recent Russian snafu's in carrying out slated U.S. astronaut space-station ferry work and other space launch efforts, post Shuttle, may accelerated the advent of the manned element of the U.S. private space effort.
And wildly we have a, just short of complete, space launch facility in western Oklahoma. "We are the only authorized Federal Aviation Administration sanctioned commercial space launch site in America," said Bill Khourie, the executive director of the Oklahoma Space Industrial Development Authority -- an operation with a set of plats in Burns Flats, Okla., not far from Elk City. "There are obviously some military and some federal launch sites, but we are the only space commercial facility that has been certified by the FAA. We are a developer -- we are bringing commercial space players and projects to our site and facilities: we have a giant runway that can accommodate commercial, federal and military space takeoffs and tests -- for conventional vertical, rocket launchers like Elon Musk's SpaceX and for horizon assent ventures like the Virgin Galactic/Burt Rutan aircraft project."
The operation has been underway since the '60s and is seeking firms, military users and joint ventures that want to use their certified runway and launch pad sites for commercial space projects and other aviation missions. Khourie said he and his board were working with a range of potential clients and projects including folks at several of America's private commercial space ventures and the UAV people at OSU.
State of Play-Aviation
What is the future of Green Country's involvement in America's aviation/aerospace industries? Some readers may know that 150,000 workers in Oklahoma rely heavily on paychecks and contractor dollars that have a direct connection to these industries. In Tulsa, over 26,000 workers are party to the hyperkinetic business ecology surrounding American Airlines and a host of much smaller, more or less dedicated players. And there are other Tulsa fly world players like Nordam that work in the industry on a more solo basis. It might help to get a global vantage on commercial aviation -- a market that is not the only piece of "fly world," but a part that is bedeviling Tulsa now. Here is how a recent analytic essay from MIT's Global Airlines program casts things from about 35,000 feet:
"On a global scale and especially in the United States, the airline industry has been in a financial crisis for much of this new century. The problems that began with the economic downturn at the beginning of 2001 reached almost catastrophic proportions after the terror attacks of Sept. 11, 2001. In the United States alone, the industry posted cumulative net losses of over $40 billion from 2001 to 2005, and only in 2006 was it able to return to the black with a total net profit of just over $3 billion... The industry crisis was most certainly exacerbated by the events of 9/11, which resulted in immediate layoffs and cutbacks of almost 20 percent in total system capacity, in anticipation of the inevitable decline in passenger traffic due to concerns about the safety of air travel. However, the airlines were in serious trouble well before 9/11, as the start of an economic downturn already had negatively affected the volume of business travel and average fares..."
So Tulsa has the giant American maintenance operation, several flight simulation companies/advanced training companies and a host of supplier operations that do exotic machine repair, airframe diagnostics, and a whole range of other activities; and we have a very healthy business jet and very small jet cluster of companies as well. Tulsa obviously has an army of talented, deeply experienced fly heads -- pilots, mechanics, flight attendants, ground ops and admin people who do the actual work of aviation.
Darryl Jenkins, a renowned aviation analyst, believes that fuel costs, labor outlays, debt loads, capacity issues and environmental drivers are viciously re-shaping commercial aviation. Jenkins writes that the future of American Airlines and all the big American commercial players will be determined by how their managements, the investor community, suppliers and their workers/unions confront these challenges.
The 13,000 people countrywide and 2,100 in Tulsa pushed to curbside by AA's re-set so far, are a portent of the road ahead. How important these still reverberating convulsions will be is not now obvious. But fly world's trajectory will also be shaped by how "big aviation" is pushed by novel stakeholders -- including Tulsa.
American Airline's bankruptcy declaration has been greeted with great despair in town, and AA management's announced goals of a billion new dollars in new revenue going forward has produced a lot of head scratching in business circles -- it looks to be an astonishingly difficult aspiration, and one that leads some analysts to think that a merger will soon be in prospect. In any event, if the bankruptcy works in accord with the way other legacy airline restructurings have played out, Tulsans who shoulder on for American and allied companies may see more reduced hours, even more job losses, and (just announced and very uncertain) "federalized" pension changes.
"The Americans Airline bankruptcy will certainly be an unpleasant event, but not in anyway be the end of the aerospace in Tulsa," said Mary Smith, a pilot and veteran -- basically a legendary local aerospace professional who heads up the Oklahoma Aerospace Alliance, a statewide association of big and small aerospace companies.
She sees an opportunity for smaller players to move up and for Tulsa to aggressively reposition/market tossed AA assets to healthy aerospace players, should they become available. Smith's Alliance, is a loose confederation of over 400 Oklahoma companies with a tight nexus to flying, keeping things flying, and America's space program.
In 2003, on a contingent basis, Tulsans approved a $350 million development/incentive package -- the funding was never collected. The notion was to get Boeing to locate the assembly plant for the Boeing 787, the breakout "Dreamliner" airliner (a hyper fuel-efficient aircraft), in Tulsa. In December 2003, Boeing chose Everett, Wash. and the Tulsa Boeing package was never put in place.
As Tulsa's Boeing proposition was written, Smith pushed for a provision that would've allowed usage of the funds even in the event that Boeing elected not to come to Tulsa -- unfortunately she and others (including this writer) didn't get their wish.
Smith told me that Boeing funds could've fired up a superb Green Country aerospace workforce development effort. She also said that having a bevy of pilots was part of the scene in Tulsa -- it was pretty easy for someone who wanted to get flight training to secure financial aid to do.
The "real challenge," she said, "was producing much larger numbers of topnotch engineering/design, and high level aerospace technical pro's -- TCC and others did a good job, but getting an area university to aggressively focus on aerospace engineering and design would be a big advance."
Smith had also imagined using "Boeing" money, had it been available, to fuel competitively selected local aviation company expansions and key efforts targeted at making Tulsa's aerospace infrastructure more agile and consistent with modern carrier, commercial operations and industrial repurposing.
She concluded by telling me that "she came to Tulsa because of American Airlines some years ago, and was grateful for that opportunity and the wonderful things that came with this great connection over the years." But she also reiterated that "Tulsa would be an aviation player no matter what the American Airlines folks decided."
As it happens, Tulsa is not the only community that's suffered as consequence of recent and ongoing convulsive changes in the aviation industry. A.G. Sulzberger, a business writer for the New York Times commented in January on Wichita's (Kan.) problems of late:
"The crowd gathered at the local headquarters for Boeing was euphoric. The company had just won one of the largest military contracts in history. Thousands of the resulting jobs, Boeing had promised, would be headed here, to the sprawling manufacturing complex where residents have been building airplanes for generations... That celebration last February was supposed to confirm this city's enduring status as the 'Air Capital of the World.' But less than a year later, on Jan. 4, Boeing executives solemnly gathered here for another announcement. The jobs would not be arriving after all, they said. Instead, they would shut down all of the company's local operations by the end of 2013."
The Jetsons Live
"It was always good to be lucky, it was better still to be good and lucky," McKeever said. He went on to tell me that this is what has happened with Oklahoma's Unmanned Aerial Vehicle (UAV) initiative.
Genuinely excited, he said that not only does the state, via the OSU project, have deep experience with airframe and vehicle design, but his faculty pros and graduate students have also developed enormous insight into payload systems, navigation and propulsion systems -- the whole array of engineering capabilities, software and hardware required to support a broad spectrum initiative (an effort that could yield employment, growth and new company starts for Oklahoma).
University Multispectral Laboratories (UML), the still new nonprofit research and development arm of Oklahoma State University has received a $45 million contract to work at the leading edge of UAV work. The funds will be used for an expansive set of applications in defense, security and allied work. The OSU contract also entails looking at how optical, electrical, radio frequency and acoustical sensors could be used in conjunction with UAV's.
The nonprofit arm that OSU uses to management much of its UAV work is owned by OSU and independently managed by Triton Scientific LLC, a Ponca City-based engineering and aviation systems company. OSU/UML has had an explosive ride: it is has become an overnight national focal point for a wide range of UAV technology development efforts for U.S. defense, security, intelligence and energy communities -- arguably the place is well positioned to get boatloads of challenging, fully commercial, autonomous vehicle work as well.
Mike Richardson, an aviation writer with national scope Aerospace Manufacturing, wrote in November that "Oklahoma is looking to establish itself as a world leader in the U.S. UAV industry by combining a wide range of industry assets in developing unmanned aerial systems for commercial, security and military uses... The Oklahoma Department of Commerce says the state possesses the most comprehensive R&D infrastructure for the UAV industry in the world and is home to the only UAV testing and training facility in the U.S. dedicated solely to the marketplace."
Richardson also writes that UAV and Oklahoma Gov. Fallin's Sci-Tech chief McKeever says "that this is where (OSU) our future UAV designers and engineers will come from... Back in the '60s, everyone was excited by rockets and space travel and we are beginning to see that kind of enthusiasm at the student level. Indeed when we announced the UAV specialized graduate option, we had 40 applicants in one week!"
McKeever also highlighted a critical but subtle connection between another rapidly developing high-yield front in Oklahoma's economic future and the UAV initiative: the Weather Research facility at Norman. OU's Weather Research Center has emerged as a world leader in weather forecasting, meteorological modeling, etc. Norman is also developing a new skill set in advanced radar systems. This is particularly relevant to fly world because unmanned aircraft need exceptional capacity in collision avoidance -- since there is no human on board, it's essential that flying bots have a knack for avoiding other aircraft: something which is part of what all of us would want before these systems become a big part of our airspace and our day-to-day lives.
With McKeever, Dr. Jacobs and a couple of other folks, I sensed a real urgency to emphasize the non-defense, commercial potential of "drone" development. Interestingly, New York Times writers Eric Schmitt and Michael Schmidt posted an illustrative article on U.S. State Department use of weapons free surveillance drones in Iraq:
"A month after the last American troops left Iraq, the State Department is operating a small fleet of surveillance drones here to help protect the United States Embassy and consulates, as well as American personnel. Some senior Iraqi officials expressed outrage at the program, saying the unarmed aircraft are an affront to Iraqi sovereignty.
The program was described by the department's diplomatic security branch in a little-noticed section of its most recent annual report and outlined in broad terms in a two-page online prospectus for companies that might bid on a contract to manage the program. It foreshadows a possible expansion of unmanned drone operations into the diplomatic arm of the American government; until now they have been mainly the province of the Pentagon and the Central Intelligence Agency... The State Department confirmed the existence of the program, calling the devices unmanned aerial vehicles, but it declined to provide details. 'The department does have a U.A.V. program,' it said in a statement without referring specifically to Iraq... The UAVs being utilized by the State Department are not armed, nor are they capable of being armed..."
While the State Department's project has clearly alarmed our Iraq allies, it is also a robust illustration of a great transformation -- use of drone fleets for critical oversight tasks that would require huge budgets, lots of aircraft and many pilots, absent robotic flyers. Law enforcement, agriculture, emergency management, natural resource identification and all sorts of environmental missions come to mind here -- arguably a hefty, high yield set of markets packed with employment and new firm start potential.
Back to School
How about tossing the pilots or at least most of them out, and using robotic airlines? If this sounds ridiculous or schizoid given our need to do job production, consider this: robotic surgery is now the modal method for doing prostate cancer surgery in America -- that's right, human surgeon/robotic hybrid teams do the hard, delicate and life-transforming work required to relieve many an American male of prostate cancer. The results are still coming in, but it looks like high quality human/robotic teams are more effective, in many cases, than human only teams.
The extent to which pilotless airliners would be vastly different from contemporary, highly automated commercial aircraft would shock a lot of people -- at least that is the vantage conveyed by William Langewiesche in his 2009 book Fly By Wire.
But drone cargo planes may come first: We can look at nascent U.S. military trials in Afghanistan and Pakistan of robotic cargo runs using unmanned supply helicopters. And what about the employment effects of robotics in commercial aviation?
The UAV aviation marketplace is growing at a torrid pace and offers tens of thousands of new jobs, start-up opportunities and next gen potentials to existing aerospace firms: it's important to know, according to McKeever, that the average military drone mission requires over 100 people on the ground to keep the drone in the air, on target and on mission. Already, according to the current issue of Jetwhine, more drone pilots are being trained than regular fly folk.
Change is Inevitable
Don McCorkell was one of the principal investors and a board member for Great Plains Airlines (GPA) here in Tulsa; he was also in the Oklahoma State legislature for 18 years, became a very successful electrical power plant developer and is an expert on economic development policy. GPA was a project that some Tulsans identify as an instance of local "crony" capitalism. But the reality was anything but.
"I think that people in Tulsa have really forgotten why the Great Plains project was initiated," he said. "Airlines have never been highly profitable enterprises like hedge funds or fashion shops or other things that we could name. [Airlines] are not jewel like investment prospects -- it wasn't near term gains that were driving investor interest in 2000 in the project," he said.
He told me he had been involved earlier in some City, State and Metro Chamber discussions about the way key investor firms perceive Tulsa.
"Specifically most venture capital (VC) and mezzanine funds (fund providers for maturing companies) find it impossible to fly to Tulsa and to fly out in a timely way. The hub system doesn't serve Tulsa well when it comes to that kind of business traveler. And out of state venture capital companies will fund Tulsa projects only if they/their representatives can get to and from Tulsa easily. Getting VC staffers, who typically oversee investor firm interests in and out without disrupting schedules was a tremendous problem in 2000 and is still a problem, as I understand it, in 2012."
Great Planes crashed in the end, McCorkell said, because "we weren't able to put together the four or five plane fleet required to breakeven...it bears remembering that we were trying to put the financing together immediately after 9/11 -- a time when aviation and the travel industry was in a great state of turmoil, and financing was hard to find- -- a time when confidence levels were very, very low. The truth is that we never got there... I put in over $1 million, as did several of the other principals, and for the record we lost it all -- I didn't make a dime and nobody else did either. But Tulsa is still a place that needs to have direct access to the coasts and to/from other critical spots, without a lot of hassle."
And the start up community and some of the high-yield technology and advance service firms that rely on risk capital will want to avoid funding Tulsa projects as long as there are basic travel barriers in play, McCorkell argued.
McCorkle also pushed, in the late '90s for an effort to diversify Tulsa's aerospace work beyond American Airline's portfolio. He and others, he said, felt that diversifying our aviation "project" was imperative. Being dependent "...on a single client is always problematic whether the entity holding the work is a company or a community," he said.
Tulsa's Next Billion in Aerospace
Tulsa should be looking aggressively, my sources suggest, at other opportunities in the aerospace/aviation sector that are a match for our workforce and the very unique business ecology that has grown up around America Airlines.
We live in the time that many called "the age of the City": a time when big national projects may not be in prospect, but a time when cities are becoming transformative agents by taking charge of their own futures by using imagination, savvy partnerships with private folks and innovative philanthropic partners. We could take heed of what business guru/writer Eric Reis conveys in his book The Lean Startup.
Reis insist that we have too many presumptions about what projects can get started where, and who can do what. Reis believes that ingenuity and persistence, and the ability to rethink a project that isn't working initially are way more important than being located in Silicon Valley, or for that matter, in Austin, Tex. This is already happening big time in Tulsa with endeavors like the Oklahoma Innovation Institute's supercomputer effort and our breakout OU/TU medical school -- and it looks a lot like the State's amazing UAV project as well.
So, where is the next trillion dollars in aerospace coming from nationally and where is Tulsa's next billion?
Part of the new job set, part of the new action will come from manufacturers like Boeing, which is using super light, composite materials to build large commercial planes. This is a continuing transformation that could expand the range of planes, reduce outsized dependence on congested hubs and dramatically impact fuel costs, which are approximately 20-25 percent of the operating outlays of commercial airline operations. Tulsans are well situated to join with large manufacturers, like Boeing, and smaller insurgent aircraft producers, like Bombardier, Eclipse, Embraer and others.
This is an opportunity that awaits Tulsa firms and workers who could learn the new skills. OSU's Helmerich Advanced Research Center is a key portal for using novel materials, including composites for medical/life science, construction and for aerospace. Developmental projects organized around attracting operations that can do composites in aerospace might be a high yield prospect. Writer John Newhouse in his 2007 book Boeing vs. Airbus, chronicles Boeing's decision to use Kawasaki Heavy Industry, Fuji and Honda to basically co-produce the groundbreaking Dreamliner aircraft, a machine that is made significantly with advanced composites -- materials that few American companies have used on the scale needed for commercial airline production. With our already great aerospace work force and some carefully crafted pilot projects, Tulsa could become a hot center for aerospace and advanced materials development and production.
Another emerging line, a potentially huge one, is what Atlantic writer James Fallows and others call "personal flight" in his fabled book Free Flight, from 2000. This sea change envisions broad scale use of very small jets, micro planes of every description and wild car/plane hybrids -- some of which are now in prototype/pre-commercial safety trials. When Fallows wrote Free Flight, it looked as though American companies, like Cirrus and Eclipse (firms featured in his book), might spawn a revolution in aviation by mass producing these small, relatively inexpensive planes with ultra-sophisticated autopilots, and redundant engine systems that would transform the flight/pilot experience. Some of these developments draw from NASA prototyping and joint venture projects in the late '90s and early '00s. 9/11 disrupted these plans and Cirrus and Eclipse were sold to foreign interests, but there is renewed interest in this arena and a small batch of new flying car starts seeking FAA safety approvals. Tulsa could be a party to this re-look by engaging the private players and working with OSU and others to craft demonstration projects.
Return of Lighter Than Air
Another avenue: the return of lighter than air vehicles -- that's right, dirigible and blimp technologies from the '30s have been re-imagined by a couple of German firms and Lockheed Martin in the U.S. The U.S. military is pushing this renaissance via its hot interest in using lighter than air vehicles to lift huge payloads -- entire tank units, modular hospitals and drone fleets -- all having tonnage well in excess of what conventional helicopters and even the largest regular plane can transport. This new aviation segment is particularly relevant for Tulsa because of our Port of Catoosa assets and our deep cargo/logistics management legacy from our Oil Capital days.
Novel engine systems are very much in play as fuel costs continue to sometimes exceed wage outlays at commercial airline operations -- and there is the need to ratchet down CO2 emissions from airliners. Already, the European Commission, in a decision that the U.S may contest, has voted to impose emission taxes on commercial air carriers. As it happens, OSU's UAV program is experimenting with electric, solar, biofuels, and fuel-cell/gas hybrid engines as a part of their work. Green engines might change the face of commercial aviation. There are joint ventures and lots of avenues for using OSU talent, TU's engineering department and it's national energy institute, and the bevy of engineering and design talents at Nordam, Spirit Aerospace other firms in Tulsa's rich aerospace ecology.
Time for Action
Aviation and space are clearly part of Tulsa's electric past: the question -- will they be vital, empowering parts of our future?
Airplanes and aviation will no doubt always be part of Tulsa, but will we be mere pawns in an imperial future dominated by the survivors of the still unfolding commercial aviation consolidation wars? Do we want to be "fly over" territory when disruptive aviation technologies like the long delayed "personal flying" market (think Jetson flying cars) finally get underway? Do we want to relinquish what looks like an astonishingly good pole position in current UAV technology? Or will T-Town weave a different future -- one that mobilizes our best talents and the crazy aspirations that animated the "Oil Capital," our pioneering water system, Black Wall St., Tulsa's adventurous early role in commercial aviation and other stand out endeavors?
We could be strongly anticipatory and audacious. We could use the AA crisis to launch a round of extraordinary local public/private partnerships and "accelerator" projects in the aviation arena. We could do so by crafting pilot projects, late stage pre-commercialization projects and by attracting start-up "bleeding edge" venture -- all might help us forestall more aviation worker layoffs and dramatically sharpen Tulsa's competitive position in the aerospace arena going forward.
I found no broad consensus on what to do about the AA crisis except to tell AA not to be evil. There is an earnest Metro Chamber attempt to find tenants, users, new firm, etc. for assets that AA 2.0 may soon have no need of and there are righteous, union driven efforts, to keep AA national management's feet to the fire.
What follows is a synthesis of some of notions that came from my over 22 discussions and readings on post AA "plays" and T-Town aerospace futures.
Fashion a private/public/university and philanthropically funded look at next-generation engines, fuels and air frame designs and next stage airliners -- a seeding project that would allow Tulsa private partners, academic folks and new comers from outside Tulsa to do pre-commercial and pilot projects on leading edge systems.
Kick off a multiparty training initiative that would allow aerospace workers/unions and small companies to master new skills and over the horizon systems -- unmanned aircraft systems, new materials, exotic fuel systems and allied topics.
Gin up an effort to help rapidly scale up the excellent unmanned aviation development project being lead by Gov. Fallin and Dr. McKeever -- an effort that is already positioning interested firms, university folks and startups to be players in the explosive unmanned aviation market space and the outsized developmental prospects associated with it.
Nationally, federal/FAA efforts to radically augment flight dynamics are apparently close to congressional approval. The proposed NextGen system would use a staple of satellite-based navigation systems to give pilots much a better sway in choosing safe altitudes, routes and speeds. Tulsa could push for being a demonstration site for NextGen and pledge to use local resources to round out federal dollars.
Part of the future of American commercial and general aviation entails using other advanced technologies (in addition to NextGen) to augment the capacity of existing runways, traffic control facilities and plane handling operations. This capacity building is needed to waylay congestion, forestall takeoff and landing delays, ratchet down hub bottleneck problems and other dysfunctions that account for mounting customer dissatisfaction with the system -- particularly the hub and spoke world dominated by American, United and the other older network airlines. Tulsa could explore anticipating, even demonstrating, some of the new technologies and approaches as a way to attract attention from conventional carrier operations and low-cost carrier ventures. A set of highly visible next step efforts, financed with local dollars, could also engender interest from the software, technology/avionics and computing venture that will be piloting and crafting these new systems.
Musk's SpaceX project, Branson's space tourism venture and Amazon founder's Jeff Bezos space venture will have to have many locations, many partners. Tulsa has many of the ingredients required to help support a larger, more ambitious space commercialization effort. Arguably, Tulsa should consider using Chamber assets, City Hall capital dollars and the kind of chutzpa that Gov. Fallin has manifested with the UAV project to secure interest from the existing crop of players.
Look at conducting a big aviation town meeting, perhaps as a part of the Metro Chambers upcoming "Envisioning" meet up, on aviation "futures" projects -- including a tight gaze at using the next Vision 2025 round to fund high yield efforts.
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