The U.S. aerospace industry, seeking to promote itself as a source of much-needed jobs, appealed for up to $6.4 billion from the government's bailout fund but denied that it was seeking a taxpayer handout.

The call for infrastructure investment from the industry's leading lobby group came as the White House advocated policies to improve the business climate for manufacturers amid double-digit unemployment.

"This industry doesn't have its hand out and we're not asking for a bailout," Marion Blakey, chief executive of the Aerospace Industries Association, told the annual Reuters Aerospace and Defense Summit.

Blakey said tapping some $6.4 billion of unused money in the year-old Troubled Asset Relief Program (TARP) to help aviation programs could create up to 150,000 jobs. It would also help the economy in the long run by streamlining an aging navigation system that airlines and aviation experts agree must be modernized.

"If they are going to start tapping TARP funds for jobs, we believe very strongly that aviation infrastructure should be right at the front of the line," said Blakey, who headed the Federal Aviation Administration during the Bush administration.

Senior U.S. Treasury counselor Gene Sperling, responding to a question on Capitol Hill about Blakey's suggestion, said that future decisions on TARP funding were up to Congress.

Blakey also suggested that President Barack Obama could borrow a page
from French President Nicolas Sarkozy's playbook to boost his economy. A jumbo stimulus loan championed by the conservative French leader could be a model for job-boosting investments needed in the U.S. aerospace industry, she said.

"(We) have folks looking at it right now because we were encouraged by how ... forward-leaning they are being in Europe on this, and perhaps it is a model for us," said Blakey, a prominent Republican.

Her remarks contained an unusually warm endorsement for traditionally interventionist French policies, demonstrating how the economic crisis has upset the status quo on both sides of the Atlantic.

Sarkozy, anxious to take a lead in responding to the global crisis, has been portrayed in France as a rival to Obama on the world stage and is reported to have criticized the U.S. leader in private over some of his actions since he took office.

The $700 billion TARP program was created last year by lawmakers to rescue U.S. banks amid a credit freeze that threatened to destabilize the financial system.

It was extended to struggling automakers, their finance arms, and suppliers in a step that was criticized by Republicans as going beyond the law's original intent. The Treasury Department recently extended TARP until October 2010.

Democratic lawmakers have suggested unused TARP money be deployed to lift the sluggish economy and combat a 10 percent unemployment rate.

The Treasury Department has said it is working on "a number of fronts" to use TARP money to boost lending to small businesses. TARP resources have grown in recent weeks as big banks scramble to repay billions in bailout money.

Efforts in Congress to produce a blueprint for air traffic modernization are moving slowly with funding questions dominating the debate. Struggling U.S. airlines have said they cannot afford the multibillion-dollar investment now.

Blakey said the industry would stand behind up to $6.4 billion from TARP that could pay for near-term upgrades to the air traffic system.

Blakey's group represents big and small aerospace manufacturers who stand to play a vital role in modernizing the air traffic network.

Aerospace and defense is a cyclical industry and is in a flat to downward trend. A report by Aviation Week, AIA, and other associations in August that job cuts in 2009 at aerospace and defense companies could reach 30,000 or about 4.5 percent of the work force.

Layoffs, the groups said, were expected to continue into 2010 but the overall downturn was not anticipated to be as severe as previous cutbacks and some areas will need more engineering and other specialized workers.

However, David Hess, president of aircraft engine maker Pratt & Whitney, a unit of United Technologies, said Pentagon budget cuts have raised concerns about sustaining the industrial base.

"Clearly I think it could be a benefit to the industry and a benefit to jobs if we were to continue some of those programs right now," Hess told the Reuters summit.