I want to thank you for that generous introduction and this nice welcome. I also want to thank the Air Force Association and particularly the Florida Central Coast Chapter for setting this up for us. You all have done so much for our Air Force through the years. The combination of the members of the AFA, the active duty people who participate, and our folks from industry have been responsible for such a vital piece of the progress of this United States Air Force.

I would like to do things a little bit differently than the way that we have done these in the past. I am going to talk to you about the state of the Air Force now, looking back a little bit and looking forward, and set the stage, I think, for some of the discussions that we will have later on. This will tee up some of our other speakers who will come and talk to specific pieces of the direction that our Air Force is going, culminating with our acting secretary, who will give a fairly detailed run-down on what our budget for the future is going to look like.

Having said that, I want to tell you that after watching that video of those kids who are out there doing the things that this nation asks of them, selflessly serving in very, very dangerous situations, I could not be more proud of them.

I would like to go back just a little bit in history and remind everybody where we came from. We have downsized this Air Force of ours by 40 percent in every measure you can imagine. Whether it is manpower, whether it is dollars, and whether it is force structure. That was the peace dividend, and we have paid it. And now it is time to reinvest in our Air Force.

Current projections show us in a flat line that goes out into the future in force structure, in personnel, and in funding. I do not think that is going to happen, and I hope that does not happen.

We have a fixed force structure that is made up of different elements of our Air Force, and that is fairly well fixed for the future. But what has happened to us over the years is that we have not recapitalized the fleets that we have in the Air Force. The average age of our Air Force aircraft today is twenty years. In fifteen years, it will be thirty. So every three years we mature the force, our force ages two years.

Not much will change that. But what is happening to us is the cost of keeping that older maturing force on line is increasing, and the workload required to do that from all of our people in the Air Force continues to increase. And we must turn that situation around.

And the way that we plan to do that over the next few years is to revitalize the force, particularly our older aircraft. Venerable though they are, they have much life in them. If we can revitalize them with new avionics, with weapons capabilities, with upgraded wing and other structural parts that need to be put into these aircraft, we can keep them going for another thirty years.

They are substantially good out to the year about 2040. In the case of the bombers, we are upgrading them with the latest in stand-off munitions capability and precision attack. With respect to the C-5, we must re-engine the airplane and replace avionics to make sure that its departure rates meet the requirements that we have for the future.

Our tankers, are currently being upgraded with the Pacer Crag modification, and we will eventually get to two forms, rather than the twelve forms, of our C-130 force right now. That C-130 force currently has eleven models in about five different configurations. We will eventually go to a force of upgraded C-130Js and a force of common C-130X.

We also have to modernize our Air Force with revolutionary capability and evolutionary capability for aircraft which lose their capacity to do the jobs that we need them to do. The F-15 is ending up in an equal fight with some of the newer model aircraft that are being produced worldwide. And we must get revolutionary capability, such as the Airborne Laser, to take care of our problems that we have with respect to our theater missile defense.

We have to get more C-17s. And in fact, in our budget, we are upgrading the number that we are going to put into the inventory by another 14. The joint strike fighter is there to replace that aging fleet of aircraft that we have now in the A-10 and the F-16. And in space, we must invest to make it cheaper for us to get to space, and to put into space those kinds of things that integrate our forces and make us the world’s premier aerospace force.

In the meantime, the world ticks on. And we are engaged in this world in ways that we have not been for years. We are constantly on the go, either forward deployed or forward stationed, rapidly responding to crises across the globe. And our strategy requires us to reach out and engage our friends and allies, who will be our close associates for years and years to come, and keep that contact going. So this is very much an operations tempo issue for us.

And we have opened expeditionary locations across the globe, but have never come back into our budget and fixed the expeditionary nature of the support piece. Our operational forces are designed very, very well to move out, to move forward, to bed down, and to operate. But our support forces have never increased their capability to do this. We have always taken it from home stations, and left voids in our home stations where we continue to have to train and to take care of our forces and families that are left behind.

Our op tempo has grown. Desert Storm was a large spike -- almost four times the number of deployed forces that we have had in the past, particularly during the Cold War. And we are doing it with almost 40 percent of the strength we had.

And we have changed the composition of our Air Force. Now, only 50 percent of our Air Force is in blue suits. The rest are in the Guard and the Reserve, and our very, very good civilian work force.

And if you take our active duty force and look at how we use it, you find that about one-third of it does not deploy forward. It is in fixed locations doing space and doing some of our strategic missile work, and acquisitions, and schools and training.

And so, of the 64 percent that is deployable forward, 40 percent is always forward, either permanently stationed or deployed. And that puts very large pressure on our families, as we moved people from the CONUS to overseas, and then even deploy them from their overseas location, or separate the families as we deploy forward in our expeditionary mode.

Our Expeditionary Aerospace Force is one of our attempts to address that problem. And the EAF concept jibes right with the national military strategy of shaping, responding, and preparing. That is what we have to organize ourselves for in this chaotic world that we have. So we address it with a coherent force presence forward.

This is what are looking at, and you will hear briefings about this concept from Dick Hawley, and Don Cook, and others about how we are going to do this. What it does for the forward deployed CINC is provide him forces that are trained to the tasks that he needs. And what it supplies for our airmen is some stability and predictability in their lives.

And we will walk into the 21^st century and almost back to our roots of expeditionary operations as we did in World War I, and World War II, Korea, and Vietnam. We’ll be prepared to do this on a moment's notice but with some predictability in this day-to-day chaotic world that we live in.

Meanwhile, what has happened to us over the last years with underfunding in our spares account, with an aging force, with little or no modernization on the books, and without revitalization occurring, is readiness rates, overall, in the United States Air Force that have dropped 18 percent since 1996.

And Air Combat Command units in the top two categories of readiness have dropped over 50 percent. And since we prioritize our overseas and forward deployed units, our first indicator of downward trends in readiness occur stateside. And Dick Hawley's force in ACC is one of the problems that we must address.

As most of you know, we went forward to the administration with the support of the Secretary of Defense, to Congress, and the President, and told them that the United States Air Force, to be a viable force, needed about $5 billion more a year to take care of its readiness concerns and future modernization, which is the readiness of the future.

And we also asked them to help us with our people, particularly in fixing the pay and retirement systems. We have asked them to help us with readiness by putting dollars into our depot level reparables, and into maintenance on our aircraft, and to fill the supply bins that were drawn down so drastically over the drawdown period.

We have asked them to help us with our modernization, to accelerate it where it is economically feasible, and to help us fix our infrastructure. We ought to be good stewards of this infrastructure that we are given, and we also need to take down the amount of infrastructure that we have, because we have our forces spread too thinly over too many bases.

So I just wanted to give a backdrop to what we will be talking about for the rest of the time we are here, and particularly tell you where we are heading, and I think that is into the 21^st century, as this nation's Expeditionary Aerospace Force. And what must that force provide for this nation into the future? I think it is captioned in three statements.

We must be able to provide freedom from attack, not just for our forces, but for other forces, to our sister services, to our allies, and to our nation.

We have to have the freedom to maneuver. And by maneuver, I mean be able to move forces rapidly anywhere around the globe. And not just forces, but information through space. We are a space force.

We have to have the freedom to attack when necessary, to be able to leverage the great power of this United States Air Force to do the things that the nation asks us to do.

And we will do that through our core competencies. We will do it through all six of them, and we will have to do it at the tactical, strategic, and operational levels. And we will have to do it across the spectrum of conflict from humanitarian operations to even thermonuclear war. That is our task for the future, and where we are headed, and we will do it from above and beyond with some of the greatest folks that this nation has ever had in uniform, our folks in the United States Air Force.

It has been great being with you, and I look forward to your questions.

Gen. Shaud: Thank you very much, Chief. The array of questions run from strategic to operational to tactical, and that is the way we will go through them. First, we understand the Air Force is exploring the concept of strategic control. Why is this important in developing doctrine and force structure for the future? There have been some articles recently that take to task the Air Force approach to strategic control.

Gen. Ryan: Very clearly, the rubric of strategic control is one that is being bandied about, and I think that it is a fairly good one actually. I think that it in some ways encompasses the thoughts at the end of the briefing -- freedom from attack, freedom to maneuver, and freedom to attack.

That means that we have the capacity, and the capability, and the will to do what we need to do in almost any environment. And to take those freedoms and take them away from an adversary. I think that is a very important concept, because I think the days are gone when we put great armies on great armies into a mashing machine that produces carnage.

I think that the United States has resources that are asymmetrical that we can use, and one of those is aerospace power, to prevent the need to have great clashes of armies that produce such casualties.

That does not mean that we do not need all of our Services. In fact, they are vital to this nation's capability to assure the security of Americans. But it does say that you do not have to do it with brute force. That you may not have to use every arm of the Service or every piece of your capability, if you have the threat to use it.

And so I think that it is a fairly good construct, and we are working our way through how you talk about it and how you explain it. Not only in the terms of an Air Force application, but in terms of the national application.

Gen. Shaud: Thank you, Chief. The next question is also at this strategic level. And we had a colloquium, AFA did, recently on this subject. Where does the Air Force stand in its effort to integrate air and space?

Gen. Ryan: We are there, and we declare victory.

Gen. Shaud: It is done?

Gen. Ryan: We are here. That is what we do. We are an aerospace force so interlocked that you cannot pull it apart. Separating air and space is like separating mountains from valleys. It just does not make any operational sense. And it certainly does not make any tactical sense. And I do not think that it makes any strategic sense.

Gen. Shaud: I recall the video tape from last year with the airmen on the flight line, I believe at Langley, seeing space as an extension of our Air Force.

Gen. Ryan: Absolutely.

Gen. Shaud: The next question, now getting down to the operational level, a question that probably came up recently at Corona. How does the Air Force plan to increase pilot retention?

Gen. Ryan: As most of you know, we have done a myriad of things to try to increase our pilot retention. We have tried to limit the time that pilots are in areas where they cannot train; we are trying to put a 45 day limit on the operational aspect of it. So if they are not getting the training where they are, we can rotate them back so they can keep their skills up.

We have given downtime after they return to take care of their personal and professional life. We have worked on making sure that their families are well taken care of when they are not home. Not just pilots, but all of our forces that deploy forward.

We have instituted a bonus system and increased the flight pay for our pilots. We are working continually to try to find ways that we can keep those wonderful men and women in our United States Air Force. Because we must remember this, most of them or almost all of them have served faithfully in our Air Force.

They have done so for nine years, eight of which they flew. They are great human beings. We sent them to the Desert, and they have done it time and time again. They are great folks. They are wonderful Americans. And we want to keep them in our Air Force, and it is our problem if they do not stay, not their problem.

So we are working very, very hard on that. One of the ways that we must address our pilot problem in the Air Force is to make sure that the duties and missions that we give them are meaningful, and also make sure that their families are taken care of. Family security, I think, for all of our air crews, and indeed for every member of our Air Force that deploys overseas, is so important.

We are an Air Force family, we are a family. Most of the people in the United States Air Force are married. We must take care of that part of our business as much as we take care of the operational business.

We are also trying to produce our way out of the problem we have. We estimate that today we are 800 pilots short in the United States Air Force. And, depending on how we approach what happens in the next couple of years, we will be between 1000 and 2000 pilots short.

There is some good news. I am not predicting anything, because this is only a snippet of data. But in the first quarter of this fiscal year, our retention rate was up at about 45 percent, up from about a 27 percent take rate on the bonus, which gives you some hope.

And I think that there is a realization out there in our Air Force that the leadership is trying very hard, the leadership at the major command levels and at the national level, including the secretary and the President, to take care of the deficiencies we have with respect to readiness today.

Part of quality of life, particularly for our pilots, is aircraft that work, and part of the quality of life for our enlisted force that works so hard to make them fly, is parts in the bin to fix them right the first time.

So I think that there is a feeling of optimism out there. I feel it. And I think that there is a great ray of hope that we can put this Air Force on a vector into the future that makes it fully ready and fully capable.

Gen. Shaud: Chief, that question was about pilot retention, the next question is an extension of that. And really, you got right down to it, which is retaining our enlisted force too. The second term reenlistment rate has diminished somewhat. Is there any special message for the enlisted troops out here?

Gen. Ryan: Well, first of all, this is the first year since 1981 that we missed our retention goals in all three categories in our enlisted force. We did not miss them by much overall. But in some of our specialties, it was a big miss. Most of those are in the specialties that, quite honestly, in a vibrant economy, have other options that give them stability for their family and probably more money in their pocketbook.

But we have a lot of folks who are still staying with us, who appreciate and get much satisfaction from doing the jobs they do. We have the greatest enlisted corps that the world has ever seen in the United States Air Force. I could not ask for a better group of folks. We have to work hard to continue to retain them.

And that is why we are working so hard on the pay raises and pay table reform, retirement, and making sure that we do the bonuses that we need to do to help them through those decision points. So I am optimistic that enlisted retention will turn around too.

Gen. Shaud: Chief, the next question relates to downsizing, and this is a fair question through my lenses. What and how much has the Pentagon staff downsized with the Air Force reduction of some 40 percent?

Gen. Ryan: It has substantially downsized. There is a fixed cost of doing business that headquarters brings, whether you have one, or twenty, or two hundred out there. But we have cut headquarters, and eliminated headquarters across the Air Force, and downsized the ones we have.

Gen. Shaud: Chief, the next question is down at the tactical level. What role do you see for the unmanned aerial vehicles in the global architecture?

Gen. Ryan: An increasingly important role. We have had throughout the history of the Air Force some form of drone program going on somewhere in our Air Force, and right now that is growing. The Predator weapon system is a wonderful weapon system. We used it in the Bosnia air campaign very effectively, not only for reconnaissance but for Battle Damage Assessment. And, in fact, we even used it as part of an attempt at pilot rescue.

They are fearless. They will go out and die for their country, and you do not mourn. They are getting much more reliable, with much more capacity in smaller packages. I see a big place in our aerospace force for the drones.

Gen. Shaud: Sir, the next question is about air mobility. And it talks about the future of C-141s beyond the year 2006. Will it be extended, will it be replaced, or will we just flat lose the force structure?

Gen. Ryan: Right now, we do not plan to extend the life of the 141 beyond the 06 or 07 time frame. That is when they phase out, when the C-17 ramps in and is fully on board. It has been a wonderful airplane for the United States Air Force for years and years. But the C-17 is such a marvelous machine, you know, with the 90 plus percent in-commission rate, and departure reliability of 95 percent. It just does not get any better than that.

And sometimes, you have to let some of the older systems go, and in this case the 141 has been a great workhorse. And we will send it to that great place in Arizona where workhorses go.

Gen. Shaud: Sir, the final question has to do with the fighter force with reference to the F-22. Using the recent activities in Southwest Asia as a backdrop, if we had F-22s today, how would that change the nature of our air-to-air encounters, and the threat from the Iraqi Integrated Air Defense (IAD) systems?

Gen. Ryan: It would substantially reduce the threat from the IAD system, and it would probably end No Fly Zone violations. That is, that they would not know when it was there. They would not see it coming. And by the time they did, it would be too late. And the ground systems would not have a shot at it. So I think that it would make policing the No Fly Zone very, very effective. We would do it on our terms, instead of doing it on theirs.

Gen. Shaud: Sir, we appreciate having the flight lead of our great Air Force with us today. Thank you very much.

Gen. Ryan: It has been great being with you.

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