1. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Building the 21 st Century Air Force Top 10 Questions

2. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 2 #10 “What are the Air Force’s priorities?”

3. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 3 USAF Priorities Our priorities are clear: -- Winning the Global War on Terrorism -- Developing and caring for our Airmen -- Modernizing and recapitalizing our aircraft and equipment - 2006 Air Force Posture Statement The U.S. Air Force must remain ready to Fly and Fight

4. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 4 #9 “How will we pay for these things?”

5. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 5 “We will fund transformation through … organizational efficiencies, process efficiencies, reduction of legacy systems and manpower while sustaining GWOT and ongoing operations in support of the Joint Fight.” - Michael W. Wynne, SECAF Funding Our Priorities

6. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 6 #8 “Why are we bringing down our end strength in a time of war?”

7. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 7 Personnel costs have increased 51% over the last ten years -- but number of personnel has remained relatively constant Rising Personnel Costs Today’s Fiscal Environment Rising Personnel Costs Aging Aircraft Inventory Cost to Operate the Fleet Fiscal Environment

8. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 8 Increasing Operating Costs Aircraft readiness rates steady, but costs to operate and maintain fleet over the last decade are up 87% MC Rates Steady Costs Growing Today’s Fiscal Environment Rising Personnel Costs Aging Aircraft Inventory Cost to Operate the Fleet Fiscal Environment

9. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 9 Today’s Fiscal Environment Aging alone is not the issue – it is the decreasing military utility of some aircraft Increasing Age of Aircraft Avg Age in 2005: 23.5 Years Avg Age in 2005: 23.5 Years Avg Age in 1973: 9 Years Avg Age in 1973: 9 Years Rising Personnel Costs Aging Aircraft Inventory Cost to Operate the Fleet Fiscal Environment

10. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 10 Today’s Fiscal Environment Budget growth is slowing Fiscal Realities 10% Growth Slowing Rising Personnel Costs Aging Aircraft Inventory Cost to Operate the Fleet Fiscal Environment

11. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 11 #7 “How big are the cuts, and when will they occur?”

12. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 12 … These are significant cuts, but… PBD720 End Strength Reductions

13. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 13 Strategy: Threat-based Organization: 13 MAJCOMs, 27 FOAs/DRUs 137 Major Inst’s Basing concept: Garrison-based Weapon Systems: adequate #’s, avg age 17 yrs Force: 600K Active Duty Endstrength 1989 We’ve Been Here Before… Strategy: Capabilities-based Organization: 9 MAJCOMs, 39 FOAs/DRUs, 84 Major Installations Basing concept: AEF, semi-expeditionary Weapon Systems: avg age 23.5 yrs Force: 360K Active Duty Endstrength 2006 - 40% Strategy: Capabilities- based, budget constrained Org’n: fewer / much reduced MAJCOMs, FOAs, DRUs, Inst’s Basing concept: nearly 100% expeditionary Weapon Systems: recapitalization Force: 315K AD Strength 2011 - 12%

14. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 14 #6 “So what’s our gameplan?”

15. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 15 Predictable environment, conventional threats Unpredictable environment, asymmetric threats Size, mass … large force structure Agility, speed, precision, lethality … smaller force structure Garrison-based force, geographically focused Expeditionary, deployable forces, effects-focused Large mgmt HQs, manpower- intensive processes, “Checkers checking checkers” WFHQs, streamlined mgmt HQs, very efficient processes, “Flatter organizations, leveraging technology & reaching back for support” 21 st Century20 th Century First, It Calls for a New Mindset This is a different Air Force we’re building…not “the same, but smaller”

16. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 16 Three Avenues of Attack Personnel Services Delivery Transformation Logistics Consolidations Comm & Info Restructuring Mil to Civ Conversions AFSO21 Efficiencies ??? Functional communities & MAJCOMs need to take a hard look within. - Less MAJCOM / Mgmt HQ Heavy - More focused on the Joint fight - Better prepare leaders to be J/CFACCs, JTF/CCs, & ultimately COCOMs B-52 Redux, accelerated U2 retirement, etc. Financial Mgmt Transformation Active Duty Military

17. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 17 Reduce Legacy Systems Some force structure changes (e.g., retiring weapon systems) will be legislatively problematic If we’re not successful, we’ll need to get more reductions from the other two avenues of attack

18. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 18 Process Efficiencies Processes (personnel, logistics, comm, etc.) must be addressed “end to end,” not just locally or regionally Must develop process improvements that… Are enterprise-wide Produce substantial savings MAJCOM involvement / support for these initiatives is critical

19. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 19 Organizational Efficiencies ROE 1. Organize around WFHQs – win today’s warfight & prevent / prepare for tomorrow’s 2. Reach back for base operating support / policy / advice 3. Eliminate manning overages & resist temptation to peanut-butter spread the reductions 4. Fix existing manning & billet shortages; grow in some areas Eliminating redundancies & streamlining organizations will make it possible to field a more capable force of military, civilians & contractors & provide the resources for recapitalization.

20. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 20 #5 “How will we reduce management headquarters?”

21. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 21 We simply must challenge old assumptions & be willing to do things differently We have to figure out where work is done … at management HQs, at MAJCOMS, & at field level We must eliminate redundancies in our structures & processes We must be willing to reach back for support … big paradigm shift If your operations tempo remains high, & your manpower has to be reduced, you simply must have a smaller, more efficient management structure. Reducing Management Headquarters

22. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 22 #4 “How will we shape the force?”

23. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 23 Slicing Down the Side of the Pyramid “We will take this reduction by slicing down the side of the pyramid.” - Michael W. Wynne, SECAF “I will not wait to be told to reduce the G.O. Corps … I’ll start there.” - Gen T. Michael Moseley, CSAF Airmen G.O.’s

24. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 24 Officer FY06 Ending Inventory 0 1000 2000 3000 4000 5000 Inventory FY11 Sustainment 2006 2005 2004 200320022001 2000 1999 1998 1997 19961995 1994 19931992 1991 19901989 1988 19871986 1985 1983198419811980 1979 19781977 1982 Force Shaping Board Voluntary Separation Pay Selective Early Retirement Board

25. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 25 Enlisted FY06 Ending Inventory Years of Service CJR

26. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 26 Spaces to Faces Planned Force Shaping Tools ENLISTED PROGRAMSFY06FY07FY08FY09FY10FY11 Career Job Reservation DOS Rollback Voluntary Separations (ADSC Waiver) SERB OFFICER PROGRAMSFY06FY07FY08FY09FY10FY11 Force Shaping Board Voluntary Separation Pay ($) SERB If Req’d “

27. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 27 Active Officers Active Enlisted Civilian ARC -9.2K -31.7K 2K -20.6K * * PB 720 shows a Net 2K reduction in civilian growth A Closer Look at the Reductions

28. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 28 #3 “What are we doing for those who will leave the Air Force?”

29. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 29 Reaching Out to Those Who Will Leave Provide rationale for the reductions – this isn’t arbitrary Express gratitude for their outstanding Service to our country & Air Force Encourage continued service – Blue to Green, Palace Chase, Federal / non-Federal Civil Service Offer robust Transition Services Job Fairs, Resume preparation, employment & relocation information, etc. Pursue Congressional authorities for additional separation incentives Keep the process open & transparent – communicate via web sites, focus groups, Spread-the-Word teams, etc.

30. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 30 #2 “What are we doing to help those who will remain behind?”

31. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 31 Supporting Those Who Remain With Us Provide recapitalized & modernized aircraft & equipment Offer robust Force Development across the Total Force – meaningful education, training, & assignment opportunities Enhance Quality of Life … new / improved housing, childcare centers, fitness centers, etc. Provide world-class healthcare & a comprehensive compensation pkg Maximize deployment predictability via the AEF construct

32. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 32 #1 “What can I do to help?”

33. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 33 Helping Build the 21 st Century Air Force Look for better ways to do business – if you have a good idea, now is the time to speak up! Be proud of who you are & what you do – Airmen save lives! Be an ambassador for the Air Force – communicate what we’re about – our heritage, support to the GWOT, etc. Live our Core Values – Integrity First, Service Above Self, Excellence in All We Do Keep a positive attitude – we’ve survived draw downs before, & we’ll get through this one