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AIRLINE'S SUPPORT OF SST

Let me at this point answer directly the questions frequently raised about the real interest of our nation's airlines in our SST program. We have received letters of support for the SST from every major American international airline. Many of these airlines are now making their positions known publicly. I am confident that there can be no question remaining concerning the airline industry's support of our SST program and their reasons for that support.

SST FOR THE COMMON PEOPLE

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I also wish to point out what this airplane will accomplish in terms of bringing the world closer together—from the standpoint of trade, education, and social interchange. The old description of the "jet-set” as the only international travelers just does not apply any more. The international jet market is as large as it is diversified. As a matter of fact, projections show that by 1985 as many people will fly international routes as flew everywhere in the free world in 1970. That's a mighty big jet set.

By way of contrast, it is interesting to note that in the Rusian-made film glorifying the development of the TU-144, the narrator makes a very strong point that the benefits of this plane will be available to “us—the common people.” During these current hearings, your Committee will have an opportunity to see this film, which is currently being shown to the Russian people, as well as to prospective TU-144 purchasers.

How ironic it is that the Russians make their pitch to the common people, and we in the United States hear that the SST will benefit only “the few." Fortunately, four Administrations have recognized the true extent of the benefits and beneficiaries of this program and have rejected this simplistic view.

Equally as fortunate, such views have been rejected in the past. Just the other day someone brought to my attention a 1909 article entitled, "The Panama Canal As A Business Venture." The question was posed : "What does the building of the l'anama Canal by the United States mean to the citizens of the Country?” The article concluded : “The proper answer would seem to be as follows. An enormous sum, probably amounting to at least one half a billion of dollars, is to be taken from the pockets of two generations of taxpayers, in order to confer a slight benefit on the shippers of merchandise between the Atlantic and Pacific Oceans."

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ENVIRONMENTAL ASPECTS My next point concerns the environmental aspects of this program, which have generated perhaps the most heated controversy. First, let me put our program in perspective. We plan to build two test planes-not a fleet, as some would have you believe. This is a prime example of the “fly-before-you-buy" principle. These two aircraft will in no way cause harm to our environment.

Secondly, at the same time we have an ongoing program of environmental research, aimed at evaluating—and determining before the fact, not afterward -any adverse effects on our environment that might occur from extensive supersonic flight operations.

As you know, FAA rule-making and Congressional legislation, both now pending, would prevent flight overland at boom-producing speeds.

Already we know that the SST will be less noisy to the human ear on takeoff and landing than current intercontinental jets. And just two weeks ago our noise abatement committee was able to announce that sideline noise—the noise generated while the plane is on the ground at the airport-can be brought within the noise limitations required for new subsonic jets—a significant reduction from the noise levels typical of jet operations today. Thus, we have already overcome what until recently was a major concern. We are confident that if Congress enables us to move forward with the program we will resolve the remaining concerns just as successfully.

Never in the history of aviation, or any other mode of transportation, has a new machine been subjected to the amount of pre-flight study, research, planning and evaluation as our two SST prototypes. We are confident that enlightened American technology can overcome any problems that might develop. After all, a country which can send men to the moon at the same time it preserves the Everglades, a country that transmits color TV pictures from space at the same time it says no to super highways through historic sites, can be counted on to overcome possible problems with the SST.

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But I want to reiterate one thing I've said again and again. And I mean it. If testing of the two prototypes or the concurrent environmental research show that the SST will do irreparable harm to our environment, I will do everything possible to ensure that a U.S. SST does not fly in commercial service and this is a commitment I make on behalf of this Administration.

All evidence indicates that our SSTs now in development can fly within ont increasingly stringent environmental limits. But we must complete the prototype program and conduct sufficient tests to be sure.

To stop the prototype development now would leave to foreign interests the experimentation and the final decision on whether SST fleets can be put into the air without serious damage to the earth's environment. It seems strange to me that those persons in this country who oppose the supersonic transports would be content to leave such an important decision to foreign countries already committed to supersonic flight.

PERCENTAGE COMPLETION

Finally, the last major point that must be emphasized is that this program is now two thirds complete. We are nearing our goal of providing two flying prototypes which will verify for us as nothing else can the technical, economic, and environmental viability of the supersonic transport. The final answers in all these areas simply cannot be determined by more study, more component testing, or more ivory tower discussions. The only way to tell what needs to be known before such as aircraft can be flown commercially is to fly the prototypes and conduct an extensive test program. We are now ten years along his path. The U.S. Government has invested more than $860 million out of a total investment of $1.3 billion. Private industry-contractors and airlines-has presently invested more than $246 million out of its committed total investment of $403 million. We have accomplished too much, invested too much, and are too near our goal to let this all go down the drain with no tangible results.

This year we are asking for $290 million, which represents approximately three percent of our total Department of Transportation budget. Funding at lesser levels will increase total costs and increase development time. With significantly decreased funding, the experienced teams of scientists, designers and engineers working on this program would be disbanded. Thus, the program would suffer irreparable damage. The team of subcontractors would undoubtedly be dissolved and the U.S. Government would be faced with contract termination costs. To save the few dollars this year would, in my opinion, be counterproductive. This is a program which, unlike many others, is on schedule within cost and faces no insurmountable technical problems. We cannot and should not disrupt it by shaving off a few dollars in the name of economy. That, Mr. Chairman, would truly be false economy.

This is the moment of decision for this program, and in a larger sense for this nation's entire attitude toward the advancement of technology. As we stand on the threshold of commercial supersonic flight, we can decide either to keep or throw away this country's aviation leadership. We can decide to shrink from our responsibility to find the real answers on environmental effects, or we can conduct the necessary flight tests to find solutions. And this decision rests with you in the Congress.

The choice is yours. And history will judge the course which this Congress takes during the next 20 days. This Administration has not wavered in its support of the SST. We are supporting, in the strongest way possible, a bipartisan de cision made by four United States Presidents, a decision to build and test two experimental planes. We do not shrink from our responsibilities. We look forward to finding answers, not witsdrawing from our search. These two prototype aircraft will help

us find answers to many questions about civil supersonic flight. They will put performance and economic objectives to the test, and in concert with an intensive program of environmental research, exchange comprehension for apprehension and answer fears with facts.

Even at current production rates, no commercial U.S. SSTs will be moving down the runways until 1978. We cannot afford to further delay this program. We already know, for example, that the stoppage of this program now, combined with the anticipated substantial sales losses from our total family of aircraft, would result in total work-force reductions of about one-half a million persons by 1918. The annual adverse impact on balance of trade would total $1.5 to $2 billion per year.

SUMMARY

To sum up—we are in the process of building two of the best airplanes ever conceived by the most capable aeronautical experts in history. We are well down the road to construction of prototypes. A large segment of the American economy is at stake. A key segment of our future transportation system is at stake. The American aviation industry is at stake. U.S. technology is being called to account yet may not be allowed to find answers if the prototypes are not built.

Gentlemen, I submit that this Committee, and this Congress, should support progress, should encourage logical and reasonable testing, and should support the continuation of the SST program at the most efficient pace practical.

PROGRAM COSTS

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Chairman ELLENDER. Now Mr. Volpe, you stated that if Congress provides the $290 million you are asking for this fiscal year, and $235 million for 1972, the entire cost to the country will be about $1.3 billion?

Secretary VOLPE. It is $235 million, Mr. Chairman, for fiscal 1972; $290 million is the correct figure for fiscal 1971. I believe the actual figures for the totals, including those that have been appropriated in the past for Government participation, will be $1,342 million, and $403 million on the part of industry.

Chairman ELLENDER. Those are the figures that I have before me. What additional costs will there be to the Government, after the prototypes are built and tried out, in order to supply planes for private industry?

Secretary VOLPE. Mr. Chairman, members of the committee, I see no additional costs on the part of the Government after that stage. The only qualification I add to that—and I don't add a half dozen if's--is that this Nation at that time is in a position, and the airlines of this Nation are in a position, economically, as they were 2 or 3 years ago, and not in the rather uncertain phase that they are going through right now. But I certainly don't envision that the United States of America is going to continue at a level pace. It is going to get back into the swim, insofar as our economy is concerned, and as I think a great many people agree, it is on the upturn right now.

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GOVERNMENT ROYALTIES

Chairman ELLENDER. Now should this program be successful, as you indicate, to what extent would the money spent by the United States be returned by the users of the plane?

Secretary VOLPE. Well, Mr. Chairman, I am not in the habit of particularly wanting to commend a Democratic administration, but I must say, and I say this very earnestly, that the contracts that were made in 1966 and 1967, with both the Boeing Co. and General Electric, and who in turn have made contracts with subcontractors, are the finest contracts from the owner point of view that I have ever seen. I as a construction contractor doubt I might have taken on such an assignment, because it puts a very heavy penalty on the contractors, and the subcontractors, if they fail to meet either the deadline set for date, or the deadline set for cost. And the reason I said it would cost a great deal more if we delay longer is because the two people that are party to the contract have to keep their end of the bargain. If we just say, "Well, we are going to cut back," we can't expect them

to hold the cost level. As a matter of fact, based on the increases in wages and the other increases in costs, the fact that we have been able to keep this program at the current cost is rather amazing.

Chairman ELLENDER. Well, I like your commendation about the Democratic contract. But is it your opinion that the Federal Government may have a return of all moneys now being spent to build these prototypes from those who, in the future, use this new type

Secretary VOLPE. I am sorry I didn't address myself to that, Mr. Chairman. Chairman ELLENDER. That was the purpose of my question.

Secretary VOLPE. One of the reasons why I indicated that it was one of the finest contracts I have seen from the point of view of the owner is the fact that not only do you have cost sharing and participation in losses in effect in the contract, but also there is a royalty payment on each of these planes. This will return, in accordance with the best estimates that we can make, much more than the investment we will have made in the development of these two prototype planes.

Chairman ELLENDER. Thank you very much.
Senator Young?

AIR POLLUTION BY SR-71 Senator Young. Mr. Secretary, I think the overall capability of our SR-71 reconnaissance plane is classified, but I think it is generally known that the SR-71 flies as high and as fast as the proposed supersonic plane would. Has any study been made as to whether the SR-71 has caused any air pollution harmful to our environment?

Secretary VOLPE. Senator, I would prefer to have Bill Magruder, on my left, who is director of our SST program, give the answer to that.

Chairman ELLENDER. Mr. Magruder, you may proceed, sir.

Mr. MaGRUDER. Yes, Mr. Chairman, I came from Lockheed, and was an airplane designer and a pilot. I am familiar with that airplane; I have flown it. I have a letter in my possession which we can make available to the committee from Mr. Kelley Johnson, who is the designer, probably the outstanding airplane designer in the history of aviation, a two-time winner of the Collier Trophy, saying that in the thousands of hours that they have flown that airplane at these altitudes and speeds, and in the hundreds of thousands of miles that they have flown at this altitude in the U-2–he is also the designer of that airplane none of the effects that have been attributed to the SST have been observed.

I think we have to be very candid and say that the worry people have about flying at these altitudes are regular operations in the millions and millions of hours, and we are going to testify tomorrow with the top environmental scientists available here in this country on the exact effects that they would expect. I think I can summarize that by saying that they expect they would be insignificant, but we are going to do more research in order to improve our degree of confidence. We are 95 percent sure there would be no problem. We want to be better than Ivory Soap, 100 percent sure.

Chairman ELLENDER. Any further questions?

Senator PASTORE. Yes,
Senator Magnuson. May I ask a question?
Chairman ELLENDER. Senator Magnuson.

FAMILY OF AIRPLANES

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Senator Magnuson. Mr. Volpe, you stated here that about the other planes, and the reason that I think it ought to be brought out in the record, when you buy an airplane, as I understand it, say it is a $5 million plane, you buy about $10 million worth of spare parts, and once the airline gets involved in the spare parts thing, they are apt to stick with the first plane they bought. And this is a very important thing.

For instance, United Air Lines has already placed reserve delivery positions for six American SST's, and six Concordes. Now if they buy all these spare parts to keep the plane moving, they are not apt to move over, unless they know we are not going to go ahead. Isn't that true? This is United alone, and they are not a prominent overseas flier, they only go to Hawaii now, don't they?

Secretary VOLPE. Senator, that applies not only to United, that applies to many other airlines, including KLM, which, for instance, has bought almost nothing but American planes for the last 40 years.

GOVERNMENT ROYALTIES

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Senator Magnuson. Yes. Now one other quick question.

Every contract, and I have been involved in this long before I even thought Boeing would be involved in it, everybody is involved, 10, 11 years ago, but every contract and every commission that has been appointed, including the final commission, the Black commission, Eugene Black's, all suggested to be put in the contracts and it was put in all the contracts, a royalty repayment scheme to the Government. Is that correct?

Secretary VOLPE. That is correct, sir.

Senator MagxUSON. And if, say, 500 should be sold over a long period of time, we would then get almost a billion dollars more than we put in.

Secretary VOLPE. It is at least a billion dollars more.
Senator Magnuson. Approximately a billion dollars.
Chairman ELLENDER. Any further questions?
Senator BIBLE. Mr. Chairman, might I ask a question?

1971 FUNDING REQUISITE I want to clear up a few figures here, because I am not clear, Mr. Secretary.

Mr. VOLPE. Yes.

Senator BIBLE. On the amount that you need, for the fourth quarter of this fiscal year.

Secretary VOLPE. Yes.

Senator BIBLE. You keep referring to $290 million in fiscal year 1971. We had a little bit of a problem with that last year, as you remember.

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