U.S. Navy Fleet Readiness Center Southwest

One of the more fascinating aspects of my employment within the largest military organization on Earth is the occasional opportunity to peak behind the scenes at the infrastructure that maintains the US Navy and Marine Corp capabilities. Due to a recent assignment to attend a training event held at the Navy’s Coronado, California, I had the chance to learn about a limited facet of Fleet support … The aircraft repair and refurbishment facilities at Fleet Readiness Center (FRC) Southwest (commonly referred to as FRC San Diego or North Island).

Note: Nothing discussed here would be considered clearance-required information. The only access granted was perhaps a step above common base access permitted for normal, non-clearance business operations. No photographs were allowed or taken.

Our visit was arranged by my supervisors (NAVSUP Weapon Systems Support) through comparable supervision at the FRC for six visitors, including myself. Our focus was the maintenance of aircraft repairable assemblies, although our organization also deals heavily with shipboard systems.

As we drove to our pre-tour meet ‘n greet, we caught glimpses of the work going on. The most interesting was a hanger area full of older version F/A-18s going through tear downs we learned would lead to de-militarization of the aircraft and disposal through approved de-mil processes. One aircraft – which I think I saw – was a fanciful aircraft in unique painting purportedly used in the remake of Top Gun (i.e. Top Gun 2), serving as Maverick’s (Tom Cruise) ride!

Pretty sure I saw a glimpse of this aircraft in a teardown hanger.

Since the DoD frowns on old components finding their way onto Amazon and e-Bay. Most components are scrapped following the harvest of any special metals used in their original manufacture.

What strikes even the most experienced civilian desk jockey is the lengths in maintenance management, repair and refurbishment, quality artisanship, and exacting process the military services expend in maximizing the service longevity of its aircraft fleet! No small order when one gets the opportunity to see it first hand and dwells on the infinite amount of detail required to make those exacting processes flow.

Of course with operations so involved, so broad in scope, conducted both CONUS (contiguous U.S.) and OCONUS (outside CONUS), across large complex military facilities, not everything is perfect. Flaws develop in handling and processes; material get waylaid, mismanaged, lost; and facilities become disorganized and unimaginably cluttered.

But again, the Services (in my experience The Navy) have adapted to become more reactive and corrective in ensuring the most efficient and effective industrial facilities are available to support the War Fighter. FRC Southwest, for example, recently endured a reorganization and reinvention of its industrial facilities after an audit by a private consultant found much lacking in the efficacy of its operations.

I had been to several commercial defense facilities in my Navy aircraft support experience (e.g. McDonnell-Douglas, Sikorsky). But I had never seen a facility as clean, well-defined, exacting, and organized as the repair and refurbishment operations at FRC Southwest! Even the floors were clean enough to eat off.

Not that I would recommend that …

My own duties at NAVSUP WSS involve Contracting Officer Representative (COR) duties for a program elegantly titled Technical Assistance for Repairable Processing (TARP). This program manages the flow of retrograde material (i.e. used repairables which can be refurbished to like-new condition) from ships and aircraft units scattered all over the globe. These items can be as small as circuit cards to helicopter rotor heads and aircraft engines shipped to and fro in immense protective cans (many designed in part or in whole by coworkers, who labor only feet from my desk).

The point in all of this is to stress the Herculean effort the Services – at least The Navy – undertake to manage – as best as is possible – the service life and availability of crucial components needed by the War Fighter to conduct operations in an increasingly complex, technological world.

Meanwhile, back at FRC Southwest, we viewed F/A-18 wing panels awaiting either refurbishment and reassembly or demilitarization scattered about a huge warehouse/hanger bay in varying states of disrepair and dressing. In an enormous industrial space, you could see a spotless areas dedicated to various intake, evaluation, repair, and testing of components from Navy fighters, helicopters, aircraft and even ship engines all benefitting from a collection of artisans, trained and developed in exacting capabilities.

On a drive and park tour, we also viewed covered, open-sided building were four H-53 type helicopters were shown in the varying stages of refurbishment. From right to left, you could see one aircraft in the evaluation stage, then one in electronic and component removal, a third in complete strip-down/rebuild, and the fourth in completed/testing awaiting its first test flight before being released back into the fleet. From right to left, you saw old and fatigued evolving to almost new, ready-to-go condition. It was quite the impressive migration as each aircraft would be moved down the line to eventual service life extension.

All this benefits not just the War Fighter, but also the Taxpayer, who – in the end – receives more bang for the tax dollar in terms of the original investment in major military equipment!

The Fleet Readiness Centers in concert with a well-integrated supply and distribution network perform what many a civilian taxpayer would consider practical miracles in the capabilities demonstrated in maximizing the service life, performance, and availability of American military equipment. The sad truth is not many of my fellow civilian Navy employees get the opportunity to witness and thereby appreciate the fruit of their individual labors where the proverbial rubber meets the road!

As an NAVSUP employee with over 39 years of experience, even I am immensely impressed by the quality of the Navy’s industrial capability. And I have not seen more than a tiny sliver of total Navy effort. It is – quite frankly – an experience that every single NAVSUP employee who directly or indirectly affects the Navy’s repairable management, procurement, and support operations should be required to enjoy!

Glancing through the morning papers

Happy New Year, all!

New Year 2015 formed from sparking digits over black backgroundA few observations on interesting articles from today’s morning papers.

Foreboding in Kabul

Kabul, Afghanistan

Kabul, Afghanistan

Washington Post columnist, Pamela Constable, braves the desolation of a Kabul, Afghanistan largely abandoned by both Westerners and affluent Afghans as the Taliban closes in on what can only be described as a city waiting for the other shoe to drop.

Taliban terror attacks, suspicion, and dread of the potential return of extremist Islam has emptied a city still showing signs of its foreign-driven capitalistic Western influences. Constable braves suspicious stares as she takes a look behind the capital’s facade of urban bustle.

If you read the book, The Kite Runner (Khaled Hosseini), you develop an appreciation for how vibrant a city Kabul once was … before the Taliban rose to power the first time, before 9-11 and our just war to oust them, and 13 years of foreign occupation in attempts to prop up a government that most likely never had a chance to unify a “nation” artificially created out of tribal and religious chaos.

The natives, always the ones with their ears closest to the ground, are fleeing, if they can afford to flee, because they sense what’s next. All this to the surprise of absolutely no one!

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All about the frack … and taxes

One of our local Pennsylvania State Representatives, Madeleine Dean (D, Montgomery County) penned an op-ed in The Philadelphia Inquirer on the State’s “obligation to tax gas extraction”. This was a big issue in PA during the recent Governor’s race, where Democrat Tom Wolf ousted incumbent Republican Tom Corbett.

Of course many here – even Republicans – take the bait on making the natural gas industry (NGI) pay more for the privilege of extracting natural gas and – oh, by the way – providing Pennsylvania with a future of fuller employment in high-paying technical jobs and off-shoot business opportunity in support industries.

What many fail to realize is that the NGO already pays Impact Fees intended to offset the costs to infrastructure and to help local communities take full advantage of these developing opportunities. And let’s not forget, like all Pennsylvania businesses, they are saddled with the highest Corporate Tax Rate (9.99%) in the country!

The State faces a $2 billion deficit, a big chunk of which results from the loss of federal stimulus funding that former Governor Ed Rendell had specifically devoted to education funding. This damaged Corbett in the Governor’s race, despite not being of his doing.

Now I’m all in favor of Big C corporations chipping in to resolve fiscal problems in the state in which they may do quite well. But if you price the NGI out of production profits, all those cool, high-paying jobs and business opportunities will move elsewhere.

The current price of oil in the international market will be a huge influence in those decisions, a lesson not wasted on Saudi Arabia’s oil market decisions. Which also brings us to …

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We all scream for ice cream … especially in Venezuela

Another Washington Post piece by Nick Miroff looks at the “rocky road” of ice cream in Venezuela’s “melting economy”. The Heladeria Coromoto, an shop that boasted 863 flavors (!), including trout and mushroom in wine sauce (Yeah, I don’t get it either.), and a spot in the Guinness Book of World Records (undoubtedly for most bizarre flavors) closed in Merida.

The owner claims milk shortages as the cause; but of course the Madura Government blamed the owner’s status as an “opposition supporter .. in a low-intensity war against the present government.” This on the heels of a toilet paper panic (always a sign of impending social collapse) and shortages in basic food stuffs.

Hugo Chavez (left)

Hugo Chavez (left)

Of course it’s difficult to imagine a capitalist, even one in Venezuela, resorting to closing down a successful money-making venture in a “low-intensity war”.

What’s odder in all this is Venezuela’s status, sitting on the world’s largest petroleum reserves. How does such wealth, often used to sling barbs at U.S. foreign and domestic policy (See Citgo), become such a wasted commodity?

The HUGE Hugo Chavez socialist spending spree is raising it’s ugly head. Falling oil prices aren’t helping either, with Venezuela’s oil going for less than $50 a barrel, most likely the result of Saudi Arabia’s determination to drive the oil market’s value down and capture a much bigger market share.

Saudi Arabia?!?

That’s karma, baby!

Why Pennsylvania needs Public Sector pension reform

Governor Corbett discusses pension reform in Dresher

Governor Corbett discusses pension reform in Dresher

Last week I had an opportunity to attend one of Governor Tom Corbett‘s mini-town hall meetings on Pennsylvania‘s precarious public pension situation.

The Governor is spending a lot of time this Summer pushing the need for public sector pension reform to improve the State’s financial health and put a lid on spiraling property taxes.  The problem he is facing is that the Pennsylvanians who pay taxes do not view Pension Reform as a problem let alone a problem-with-high-priority.

Much of this disconnect comes from the plain fact that most voters do not understand how State pensions work; how much they cost; or how they affect the other real problems with which my fellow Pennsylvanians can readily identify.

Recent polls (Quinnipiac University 2013, Franklin & Marshall 2014) found that Pennsylvanians recognized Unemployment, the Economy, Education, and Taxes as the biggest problems being faced in the Keystone State. These opinions are even more disconcerting from a taxpayer’s point-of-view, because it illustrates a very basic fact about the magnitude of the pension problem …

Few appreciate how the State’s pension mess plays into the perceived problems in Education, Taxes and the Economic Health of Pennsylvania.

For that you must look at the numbers.

  • $47,000,000,000. (billion with a capital “B”) … The current pension funding gap in Pennsylvania
  • $65,000,000,000. (also with a “B”) … The projected pension gap by 2019.
  • 63 cents of every $1 in revenue … 63% of PA State revenue currently goes to cover State pension responsibilities
    • That is, $2 Billion per year, all covered by PA tax payers
  • $13,000. … The amount each Pennsylvanian would have to pay to cover the current pension fund gap.

State-pensionsForty-one percent (41%) of the annual State budget goes to Education funding.  Another 40% goes to support Health and Human Services (and yes, that’s BEFORE you factor in the potential of accepting ObamaCare’s proposed Medicaid expansion, which will be funded by the Federal Government to only 90% of costs after 2016) …

The budget percentages for Education and HHS are equally important in understanding the overall picture.  Why?

For one, they illustrate the impact both Education and Social Services have on the State budget.  When you spend 81-82% of your budget in two specific areas, it does not leave much room for the other good things State government can do.  These huge obligations place the State in a financial straight jacket.  Pension costs make up a significant burden to school districts and public healthcare providers insofar as those costs are a subset of whatever funding is provided by the State.

As an example, when a School District receives its annual budgeted funding, they must – each and every year – immediately set aside a significant portion of that funding to be applied towards that school district’s allotment of pension coverage.  As pensions costs grow, school districts are forced to pay more and more for their pension service; meaning they will have less and less to spend on actual education.

pension-reformSo when you speak of those “real problems” facing Pennsylvania … Education, Unemployment, the Economy and Taxes … there is a genuine, behind-the-scenes connection between pension costs obligations and all those REAL problems.  And more importantly, to financing any solutions to those REAL problems.

So what’s State and local Government to do?  What tough choices do you make now?  Do you raise Property Taxes again?  Do you raise Corporate Taxes in a state which is already has the HIGHEST corporate tax rate in the country?  Or do you do something about the most easily identifiable and underlying problem?

As a taxpayer, this is a chilling reality.  If you subscribe to the theory that high taxes kill Economic Growth, raising Corporate Taxes is not the BEST alternative.  (And yes, that also goes for a Job Creator like the Natural Gas Industry.)  Neither is raising Property Taxes, which is what school districts must do to meet the growing pension budget hole.

Pension reform won’t lower current property taxes however.  Replacing pension plans does nothing to alleviate the pension obligations already facing the State and local school districts.  It’s a solution for the future, by putting a lid on rising property taxes by replacing an unsustainable pension structure with one that lessens the future burden on taxpayers!

If you are not yet convinced, take a look at recent examples in countries like Greece and Italy, where excessive pension costs drove cataclysmic threats to economic stability.  Or take a look closer to home …

CT Emanuel_Method_04.JPG

Chicago Mayor – and former White House Chief-of-Staff Rahm Emanuel

When uber-Liberal Rahm Emanuel left the cozy confines of The White House as President Obama’s Chief-of-Staff to become the Mayor of Chicago, the first major initiative he undertook was to tackle Chicago’s financially threatening pension problem.  To take a peek at what could happen to cities in Pennsylvania if leaders do nothing, look at what has happened in Detroit!

The Rahm Emanuel story is critically important for one reason many people might overlook.  It illustrates that this is not a problem restricted to one political party or the other.  Pension costs with all its ramifications – from taxes to education to health services to economic vitality – is a Democrat and Republican problem.

So what is the real problem with Pennsylvania’s nightmare pension scenario?  It’s reliance upon Defined-Benefit public pensions …

This is not a new problem, not in the pubic sector, not in the private sector, not in the manufacturing sector, not in the financial industry.  Individual companies, whole industries, other States, even the Federal Government have recognized the threat to financial stability presented by growing defined-benefit pension obligations.

In the interest of full disclosure, I am employed in the Public Sector by the Federal Government since 1980.  In 1986 the federal government introduced a two-tier retirement system under the Federal Employees Retirement System Act of 1986.  The Act essentially grand-fathered all existing employees under the existing Civil Service Retirement System (CSRS), while requiring all new employees – hired after the laws effective date – to participate in the Federal Employees Retirement System (FERS).  The reasoning behind the switch from a Defined-Benefit CSRS to a hybrid Defined-Benefit/Defined-Contribution plan was much the same in 1986 as it is now for Pennsylvania in 2014.

This is pretty solid framework for changing Pennsylvania’s Pension Problem.  Allow those already vested in current defined-benefit pensions alone.  Address a change in pension structure only towards new employees at all levels of government!

In the Federal Government, FERS provides its own two-tiered approach, consisting of a Defined-Benefit where a minimum government contribution is mandated.  Then the federal government fully matches any employee contributions up to 5% of salary (the percentage matched drops on additional employee contributions) made to the Thrift Savings Plan (TSP), which acts essentially like a 401(k) with employees able to choose investment options of differing risk and return.

That the Federal Government is out in front of Pennsylvania on anything – by nearly three decades no less – should be more than a little troubling to Pennsylvania tax payers!  And this again is a problem whose responsibility falls squarely on BOTH political parties.

Former Gov Tom Ridge, not exactly the brightest light on pension sanity

Former Gov Tom Ridge, not exactly the brightest light on pension sanity

In 2001 it was the Tom Ridge Republican administration that cut a foggy-headed deal with the Pennsylvania House of Representatives, where both Democrats and Republicans agreed to significantly increase the pension benefits of Legislators, state workers, and teachers.  (Not surprisingly, those same Legislators all got fat pay increases as part of the deal!)  Then they compounded their stupidity by slashing the taxpayer contribution to service that very same pension obligation. 

It’s a case of an entire government turning a blind eye towards its very own economic future!

Changes to the way employee pensions are managed and financed have been rippling through the entire U.S. economy, most drastically of course in the private sector, where change depends not on the consensus of 250 State Legislators, who are so intimately tied to the very benefits economic reality demands must change.  It is virtually impossible – in this day and age – to find an employer who will provide an employee with a defined-benefit pension plan.

It’s a Republican-Democrat problem that will need both parties in the State Legislator to step up to the plate and get fixed.

Now, I’m not sure Governor Corbett’s approach is necessarily the best alternative for Pennsylvania’s particular pension situation. The devil is always in the details.  However, you must admire Corbett’s tenacity in pushing for pubic awareness of a problem very difficult to fully understand and always controversial … And for doing so during an election year!

That – my friends – is Leadership with all its risks and political exposures.  Like the national bi-annual conniption over Social Security insolvency, it’s always the first person who goes through the door that gets bloodied. 

Yet this is a problem to which even tax & spend liberal Tom Wolf has begun to awaken.  Oh wait a minute … That was for his furniture company, not necessarily the tax-paying citizens of Pennsylvania!

All politics aside, the message is clear.

If you live in Pennsylvania and believe that the REAL problems we face are Education, Taxes, and Economic Growth, you simply must recognize the threat that growing pension costs pose to the economic health of The Keystone State.  Tell this story to your Pennsylvania neighbors.  Let your voice be heard by demanding your State Representatives and Senators act together with Governor Corbett to address pension reform NOW!