Sometimes a bit of spending is wise
- By Susan M. Menke
- Jul 16, 2003
Alfred G. Hansen, EMS' billion-dollar man
After a 37-year Air Force career, four-star Gen. Alfred G. Hansen retired in 1989 and went back to work in the aerospace industry. Now president and chief executive officer of EMS Technologies Inc. of Atlanta, Hansen said his goal is to make EMS 'a billion-dollar company.'
The 1,700-employee wireless and satellite vendor earns about 35 percent of its $300 million annual revenue from U.S. and European defense organizations.
As head of the Logistics Command at Wright-Patterson Air Force Base, Ohio, Hansen oversaw five logistics centers and 12 specialized centers. Before joining EMS in 2001, he was executive vice president of Lockheed Martin Corp.'s aeronautical systems division.
Hansen received a bachelor's degree in business administration from Troy State University in Alabama and completed graduate programs at the Air Command and Staff College and the Air War College. He serves on several society and educational boards, including the board of the Air Force Academy's Falcon Foundation.
GCN chief technology editor Susan M. Menke interviewed Hansen by telephone.GCN: How is industry different from the Air Force in terms of money, pressure and performance
HANSEN: The last job I had in the Air Force was acquisition and logistics, and manufacturing on the repair side. My command had 110,000 people'about 95 percent civilians.
I had unions to deal with, the same things you would have in any industry'grievances and labor relations. We used many of the same systems used by industry: production control, financial, accounting. My role was to maximize the value of the money entrusted to me. I wasn't there to make a profit, I was there to make sure we increased efficiencies and minimized the amount of time for airplanes going through repair cycles.
We were the first Air Force organization to really focus on quality. We won the secretary's Eugene Zuckert Award, the equivalent of the civilian Malcolm Baldrige Award. One of my fellow four-stars said that he didn't quite understand what I was doing, but the results were great.GCN: So the differences were mainly about your focus?
HANSEN: I sort of squirm when somebody talks about my being a chief executive officer and having a chief financial officer and a chief operating officer. On the military side, the systems and objectives are different.
War inherently is not cost-efficient, and people who say you can take a process like just-in-time inventory control and apply it to the military don't know what they're talking about. Just in time'if it doesn't work'will cause higher casualties.
The military is always looking at insurance. Instead of just in time, perhaps what you'd want would be 150 percent of inventory.
To understand the demands and uncertainties of war, just look at Iraq. When [the president] had an opportunity to go for the leadership, they moved the schedule ahead two days. The shock and awe was supposed to take 16 days, but all of a sudden, soldiers and Marines were rolling 18 days before they were supposed to. The only way they could roll was to have good logistics.
Some people have said the logistics wasn't quite up to speed. Well, logistics is a tough business when you're maneuvering 100,000 troops and another 150,000 for support. I think they did very, very well. War is full of surprises. Hopefully, the next war, you'll do better.GCN: How about the pressures? Any different?
HANSEN: I felt tremendous pressure when I was in the Pentagon working the Air Force budget seven days a week, 14- or 15-hour days.
Everybody in the Pentagon in that period, at the beginning of the Reagan administration, was faced with large amounts of money and trying to make sure we spent it wisely.
With billions of dollars, the risk of waste is always there. You try to minimize it, but you're accused of buying $800 Allen wrenches. That money was for the test procedures, not the nickel-and-dime tool. Try to explain that to a congressperson.
One day when I was testifying, [then-Rep.] Barbara Boxer (D-Calif.) said to me, 'I hope you notice I'm wearing my most valuable jewelry.' She had an Allen wrench around her neck.
When you're in the military, you don't deal with Wall Street, which now takes at least 30 percent of my time.GCN: How is the Air Force changing?
HANSEN: I've been retired about 12 years. As I was leaving, there was lots of pressure for consolidation. I argued against consolidating the logistics and systems commands because they were totally different. I think history has more than likely shown that was not a smart consolidation.
The procurement problems with some weapons systems, whether space or aerospace platforms, would have gotten a lot more focus separately.
The truth was, people were looking for cost savings. When you slam two things together, there are cost savings initially, but then you pay the price later on.
The Air Force is considerably smaller now. The tempo has actually gotten higher, believe it or not, with fewer resources.
We were pretty robust during the Reagan era, and we went into an intense period during Desert Storm and burned up a lot of our resources and our prepositioning. Then during the Clinton administration, not a lot of money was put back. The Air Force downsized tremendously. There were 24 fighter wings in my time, and they're down around 10 now.
People try to label this as transformation. It's not transformation, it's taking an ax to the forces. There's a lot more reliance on the National Guard and reserves. I have people in my company who are deployed, they've been gone for quite some time.
I think you might see some questioning of the value of being in the Guard and the Reserves. There more than likely will be an evaluation of the mix, and there might be a move back to more active-duty personnel.GCN: What will the Air Force be like 10 years from now?
HANSEN: It's not going to change much from today, mainly because the weapons and support systems are not going to change much. The C-17 will be around, the F/A-22, the Joint Strike Fighter. They're all manned aircraft.
We're playing around somewhat with unmanned aerial vehicles, but I think the predominant characteristic will be manned vehicles. Twenty years out, you'll see a bigger role for UAVs.GCN: What's the future of the satellite industry?
HANSEN: We've seen some of it in Iraq. For years, people have talked about the fog of war. Now wireless and satellite communications have given commanders a tremendous insight into what's going on on the battlefield.
It's amazing to think about Gen. Tommy Franks sitting in his deployed command center, watching live video on the front lines. That's more than likely a first.
The difference between Desert Storm and the Iraqi liberation is tremendous. I don't know the multiple in how much more bandwidth was used in Iraq, but it's got to be huge. One of the big issues is bandwidth.
Bandwidth was very, very scarce in Iraq. There will have to be some major decisions by the Defense Department on how to handle future conflicts using high-demand UAVs and the other intelligence systems.
Everybody throws around the term network-centric'that's bandwidth, too. There's just not enough out there, mainly because the government said it was going to rely on commercial sources, and of course the industry has tanked.
We were supposed to put up 25 satellite payloads last year. About eight went up. The realization is starting to come that DOD is going to have to rely on its own satellites and not on the industry, which is driven not by defense requirements but by profit requirements. If there's no business, nobody is going to build satellites. They're failing'burning up at a couple per month.
There's going to be a big demand for satellite communications, and I think it's going to have to start to happen within the next six months or so because it takes a couple of years to get those little rascals up there.
I'm hearing more and more about putting up small, unactivated geosatellites in various places where there might be a future need for bandwidth.