Buy the latest up-to-date copy of this book, "Clash of Civilizations and the
International Military Industrial Complex"
The Three Pillars of
Security
N. America, Europe and CIS CSO
North American Pillar
The United States
is the biggest military spender in the world. In 2002, the US
Congress debated a Bush defense budget of $343.2 billion, an increase
of $32.6 billion over the previous year. The increase would bring US
military spending to more than half of all discretionary spending.
The largest
defense corporations are also based in the United States. In arming
the US, the so-called "Globocop," corporations derive the
most benefit because they are lavished with billions to come up with lethal
weapons, surveillance equipment, tanks, submarines, ships and
airplanes designed for a seemingly never-ending war.
While many
sectors in the US are suffering from the economic crunch, top weapons
manufacturers are awaiting new orders, hiring new people, looking for
new investments and gaining attention on the stock market.
The bond between
the US military establishment and defense corporations brought to
existence the "military-industrial complex" moniker. But
beyond being a label, the phrase resonates with the power and
influence of a partnership that has sustained America's arms
superiority and aided its economy.
Muscle of the US Economy
The military
industry is a dominant player in the US economy. Military orders
drive America's manufacturing sector. More than one-third of all
engineers and scientists in the US are engaged in military-related
jobs. Several sections of the country and a number of industrial
sectors, particularly shipbuilding and aerospace, are greatly
dependent upon military spending or foreign arms sales.
The Department of
Defense (DoD), together with the top defense corporations - or what
is known as the "military-industrial complex" - controls
the largest coordinated bloc of industry in the US.
In 2001, after
taking into account the emergency anti-terror funding and
supplemental appropriations to finance the war in Afghanistan, the
Pentagon's budget amounted to some $375 billion. In addition to the
rising annual Defense budget, military spending also eats up much of
the budgets of the Department of Energy and the National Aeronautics
and Space Administration. At present, it consumes about 55% of the
federal government's discretionary expenditures. Roughly 75% of
federal research and development expenditure is devoted to military
projects.
The top aerospace
and defense corporations, consisting of 11 companies, employ 901,258
people.� These corporations
mostly rely on DoD contracts. Most of these companies are also among
the top defense corporations in the whole world.
It is not surprising, therefore, that many Americans and their
elected representatives support continued Pentagon spending. The
military industry has become a huge and untouchable jobs program
employing directly and indirectly a large number of blue-collar
workers and a rising number of technical professionals. Defense
workers are kept in line by the fear of job loss and ensuing economic
crisis. This threat is also used to frustrate efforts to scale back
military production or to convert it to socially useful purposes.
Historically, the
US economy shook off economic depression during World Wars I and II
as establishments and factories vigorously worked to support the
American war machine. For a superpower like the US, war is an avenue
leading out of an economic slump since practically all economic
sectors become engaged in the country's war efforts. Aside from
boosting the local economy and generating jobs, the US also earned
from selling weapons to its wartime allies.
Exporting War
With the end of
the Cold War, and the Reagan weapons buying binge of the 1980s
started to slowdown, US weapons manufacturers began to give more
attention to foreign markets as a way to sustain their profit
margins.
In pursuit of
easy profits, practically all major weapons producing companies worldwide
are collectively pushing to boost their exports. US companies gained
market dominance, cornering 40-50% of the total global weapons market
in the 1990s.
Companies like Lockheed Martin and Boeing have
realized that the only way to expand their exports beyond present
levels is to open up new markets, by eliminating existing
restrictions of potential recipient states, or seek new government
subsidies that can be used to create more "cash paying
customers" (i.e., foreign clients that use US-supplied "cash"
to buy American weapons).
The absence of a
compelling reason for NATO expansion is more than offset by the
strong desire of powers-that-be to see the alliance broadened. While
military contractors are looking for new markets, the Pentagon is
seeking a new mission.
The military-industrial complex needs a mission
to justify its continued dominance, and NATO expansion is a good
candidate to fill that role. The September 11th attacks gave the
military-industrial complex further justification for increased military
production and an excuse to use war to boost the sagging US economy.
Oil Connection
Behind the
"war on terrorism" that the US supposedly waged against
Afghanistan are corporate interests involving oil. Without doubt, the
military-industrial complex has a stake in expanding areas to be
exploited for oil as well as protecting US oil sources.
According to
Ahmed Rashid, Central Asia correspondent for the Daily Telegraph and
the Far Eastern Economic Review, Afghanistan is the "shortest
route to the Persian Gulf from the gas resources of Turkmenistan and
Uzbekistan - from Northern Central Asia and Western Central Asia. It
is far shorter than the routes through Iran, the Caucuses or China.
Any pipeline would pass through only two countries, whereas at present
the pipeline is passing through seven or eight countries." Thus,
Afghanistan would be the best option for interested oil companies if
it were brought under control.
Both competing
oil companies - Bridas (Argentinian multinational) and Unocal
(American company) - had very close relationship with the Taliban. In
fact, the US government supported the Taliban's rise. There are a
number of reasons why America supported the Taliban.
Rashid said one
reason was that "the Taliban was vehemently anti-Iran and anti-Shia,
and this was the time of the dual containment policy when the US was
trying to hold in Iran and Iraq. And the Taliban fitted the bill very
well. Secondly, two US allies in the region, Pakistan and Saudi
Arabia, were supporting the Taliban. The third reason is that the US
wanted to build this pipeline. There was a lot of support from the
Pentagon and the State Department for the Unocal effort."
Another analyst,
Prof. Michael Klare, said the root of the war in Afghanistan lies in
America's efforts to dominate the oil resources of the Persian Gulf.
The US is protecting its interests in Saudi oil by defending the
royal family from being overthrown by extremists like Bin Laden and
replaced by a more doctrinaire Islamic rule.
The nature of US
protection for Saudi Arabia has evolved over time. At first, it was
provided through indirect forms of support such as military advisers
and arms aid. The direct presence of US military forces began to
increase over the years. Today, the US has between 5,000 and 10,000
soldiers on Saudi soil, and a much bigger number offshore, on ships
and the island of Bahrain.
According to
Klare, "the royal family has always provided US interests a
privileged position with respect to Saudi oil supplies, in terms of
both the access to oil and the pricing of oil."
In the OPEC, the
Saudi royal family has maintained warm relations with the US by
keeping prices at a level that does not burden the US economy so
much. There is apprehension that if the extremists took over, they
might deny US access to Saudi oil and/or increase prices, and thus
result in an even worse economic situation than the US is suffering
at present.
Afghanistan is
not the first time that the US has gone to war because of oil. The US
got involved in local conflicts in other countries because of its
interest in petroleum resources. It had been enmeshed in the internal
politics of Iran (it had very close relations with the overthrown
Shah). Klare said, "Historically, (the US) has been involved in
conflicts in Mexico over oil. (It is) now involved in Colombia in a
conflict that's as much about oil as it is about drugs." This is
because the US views oil as a national security concern. Thus, its
foreign and military policies involve the protection of its oil
sources.
Exciting Days for War Business
In December 2001,
the US Congress debated a Bush defense budget of $343.2 billion, an
increase of $32.6 billion over the previous year. The increase would
bring military spending to more than half of all discretionary
spending.
This is good news
to the weapons industry. While many sectors in the US are suffering
from the economic crunch, top weapons manufacturers are awaiting new
orders, hiring new people, looking for new investments and gaining
attention on the stock market.
A defense analyst
with the Lexington Institute said, "The whole mind set of
military spending changed on September 11. The most fundamental thing
about defense spending is that threats drive defense spending. It's
now going to be easier to fund almost anything."
These are
fruitful times for companies like Lockheed Martin, Raytheon, Northrop
Grumman and Boeing. The war in Afghanistan is definitely a success
despite friendly fire incidents, bombing accidents, mounting civilian
casualties and the recent crash of a $280 million B-1 bomber. The
Bush administration is already targeting new countries for military
action, with Somalia, Yemen and Iraq topping the list. Indeed, this
is a satisfying time to be in the war business.
"For a long
time, (the defense industry) just didn't seem like a sexy area that
has a lot of legs to it," said a partner at one options trading
firm. But all that has changed. In response to investor interest,
stock exchanges are thinking about creating a new Defense Index.
While Congress
worked out the versions of the military budgets, weapons
manufacturers and their supporters are confident that it will be big.
"With the [Bush] administration, we'll see a rebuilding of the
military to bring it back to where it was eight years ago," said
defense analyst Paul Nisbet. "We'll see a considerable
appreciation in defense stocks, as we saw in the Reagan years."
On January 17,
1961, in a nationally televised address delivered four days before
John F. Kennedy's inaugural, Dwight Eisenhower spoke about the perils
of the "unwarranted influence" exerted by the
"military-industrial complex." Four decades have passed and
the military-industrial complex - a phrase coined by Eisenhower's
speechwriters Ralph Williams and Malcolm Moos to describe the link
between the US military establishment and the arms industry - has
survived and gained dominance.
The US war
industry flourished during the Cold War, especially in the Reagan
weapons-buying spree years. Although weapons procurement eventually
did wind down, the US military budget is still bigger than it was
when Eisenhower warned about the military-industrial complex in 1961.
The US military budget amounts to more than $270 billion per year,
which in constant dollars remains near the peacetime Cold War average
during the period of intense US-Soviet rivalry (1950 to 1989).
Running out of enemies
Without the
rivalry from Russia, where is the threat that justifies spending
hundreds of billion dollars every year on war and preparations for
war? The Pentagon's answer is simple: there is no longer one powerful
adversary to contend with, but US forces still need to be equipped to
fight two major regional conflicts simultaneously against "rogue
states" like Iraq and North Korea.
According to
Michael Klare, author of Rogue States and Nuclear Outlaws, Colin
Powell devised the "two war strategy" once he realized that
the United States was "running out of enemies" large enough
to justify spending hundreds of billions on the Pentagon every year.
The United States
currently spends 19 times more on its military forces than all of the
Pentagon's so-called rogue states - Iran, Iraq, Sudan, Libya, Syria,
Cuba, and North Korea - combined. In fact, the United States and its
key allies (NATO, Japan, and South Korea) now account for 62% of total
global military spending, up from about 50% in the mid-1980s. In
short, despite repeated calls for higher military spending to remedy
the alleged "readiness crisis" facing US forces, the United
States and its allies currently account for a much higher share of
global military spending than they did at the height of the Reagan
military buildup in the mid-1980s.
The bombings of
US embassies in Kenya and Tanzania (August 1998), the missile tests
by Iran (July 1998) and North Korea (August 1998), the NATO's air war
in Kosovo (inaugurated on March 24, 1999), and the attacks on the
World Trade Center and Pentagon (September 11, 2001) make US military
buildup appear reasonable, and defense corporations are only too
happy to produce more lethal weapons.
Corporate War Profiteers
A look at the
huge corporations and their sphere of influence in the military
establishment and Congress sheds light on how enormous is the power
wielded by the arms industry.
At present,
Lockheed Martin is considered as the top weapons manufacturer in the
US. Lockheed Martin was created by merging Lockheed with Martin
Marietta, Loral Defense, the General Dynamics combat aircraft
division, and scores of other military companies to create a $35
billion behemoth that received over $18 billion in Pentagon
contracts.
Proof of its
power, Lockheed Martin and its allies in the weapons industry have
aggressively pushed for favorable treatment from the federal
government in the form of special subsidies, lucrative contracts for
well-funded weapons systems, and important changes in US policies on
arms sales and military technology transfers.
The military
merger boom that resulted in an "improved"
military-industrial complex began during the Clinton administration.
Then Defense Secretary Les Aspin and Undersecretary of Defense
William Perry decided to encourage mergers of defense firms. In a
meeting that Lockheed Martin's Norman Augustine refers to as the
"last supper," Perry bluntly told industry executives that
the Pentagon would not be ordering enough ships, planes, and tanks to
support the number of major military contractors that had been
sustained by the Reagan military buildup.
Funding for
weapons procurement, while still high by historical standards, was
declining significantly from the humongous levels they had reached
during the Reagan years. Hence, the Pentagon budget could no longer
support the same number of major defense contractors in the way it
did during the Reagan military boom.
Furthermore, the
Pentagon was in the process of decelerating production for
current-generation systems like the F-16 fighter and the M-1 tank to
make room for next-generation systems like the F-22 and the Joint
Strike Fighter. Cutting down the overhead by reducing the number of
underutilized military factories was the official rationale behind
the merger move.
Defense
corporations and their allies in Congress fiercely resisted closing
weapons production lines. Instead, they retrenched workers even as
industry profits hit near-record levels and industry executives earn
generous bonuses and huge salaries.
Interlocking Interests
The consolidation
of the weapons industry gives arms companies greater leverage over
the Pentagon. The Department of Defense has so few options left when
it comes to procuring a major weapons system. In 1998, when the
Pentagon awarded a $1.6 billion contract for the so-called
"systems architecture" for a National Missile Defense
system, the competition pitted Boeing against a partnership called
United Missile Defense, a team-up composed of Lockheed Martin, TRW
and Raytheon. When Boeing won the contract, TRW and Raytheon
immediately switched teams and became major subcontractors for Boeing
on the project.
In the area of
combat aircraft, Boeing is in partnership with Lockheed Martin on one
major system (the Air Force's F-22 stealth fighter plane) and in
competition on another (the next-generation Joint Strike Fighter).
These interlocking business relationships create an atmosphere
wherein it often makes more sense for the defense mega-corporations to
team up and wield their enormous political clout to increase the
Pentagon budget.
Post 9-11
Although Bush and
his top advisers keep on harping that their global campaign against
terrorism will be a "new kind of war," the largest
beneficiaries of the new weapons spending sparked by the September 11
attacks arethe big defense contractors like Boeing, Raytheon,
Lockheed Martin and Northrop Grumman.
Bulk of the new
funding will be channeled to longstanding pet projects of the
military-industrial complex and not to finance anti-terrorism
equipment or techniques. According to analysts, renewed Pentagon
spending will only benefit existing systems, many of which were
designed during the Cold War and have little or nothing to do with
the fight against terrorism.
The weapons
industry's main agenda of recent years - a massive, across-the-board
increase in military spending - has taken a giant leap forward after
September 11. Within days of the attacks, Congress signed off on a
$40-billion package for reconstruction and anti-terrorism efforts.
Secretary of Defense Donald Rumsfeld has compared the war on
terrorism with the Cold War, and a $400-billion military budget is in
the offing. Increased military activities are also expected to
invigorate the US economy since more weapons projects mean more
orders for the manufacturing sector.
US as Globocop
Beyond corporate
and institutional pressure for perennially high military spending,
there is also a strategic rationale - the idea that the United States
should retain the capability to serve as some kind of
"Globocop." The US has taken upon itself the task of
maintaining "order and stability," especially in the
perpetuation of "free markets."
The US is already
providing military assistance and special operations advisors to the
Philippines in the war against the Abu Sayyaf group, which the US
says has links with Osama bin Laden. In Yemen - where Bin Laden
attacked the USS Cole that killed 17 American sailors in 2000 -
Yemeni Special Forces, US-trained and armed with tanks, helicopters
and artillery, attacked a local al-Qaeda organization. Other
potential targets include Somalia, which is accused of hosting
terrorists, and Iraq, which is accused of developing weapons of mass
destruction.
Global force
projection remains the focus of Pentagon's strategy and budget. In
places where there are critical resources or potential US investments
at risk, such as the Persian Gulf and the oil-and-gas-rich Central
Asia, the Pentagon is preoccupied with providing weapons and
training, arranging access to bases, and prepositioning troops and
equipment in preparation for a possible military intervention at any
time.
Meanwhile, war
and war preparation mean more profits for US defense corporations.
These companies expand, hire more workers, embark on more projects,
and help prop up the US economy. But as the US military-industrial
complex grows, so does the danger of unprecedented annihilation of
innocent people.
TOP
US DEFENSE CORPORATIONS
Lockheed
Martin
Lockheed Martin is the world's largest weapons
manufacturer, a major player in the areas of nuclear weapons and
ballistic missile defense. The company got over $15 billion in
contracts from the Pentagon in 2000, plus an additional $2 billion
for nuclear weapons design work from the Department of Energy.
Lockheed Martin is the prime contractor for the
Trident II Submarine-Launched Ballistic Missile (SLBM), a
multiple-warhead, long-range missile that is produced for deployment
on the Trident submarine. The Trident II is the only long-range U.S.
nuclear missile currently in production.
Even as it profits from working on the next
generation of nuclear weapons, Lockheed Martin is also heavily
invested in ballistic missile defense.
Lockheed Martin's global presence stems from its
role as the world's largest arms exporting company. Its most
lucrative export item is the F-16 combat aircraft. The company has
sold over 3,000 F-16s to overseas customers since the mid-1970s, and
the client list for the plane includes Israel, Turkey, Pakistan,
Indonesia, Taiwan, South Korea, Thailand, Egypt, and Venezuela.
Lockheed Martin F-16s are co-produced in 10 countries, including
Turkey, where an F-16 assembly line in Ankara employs 2,000 workers.
In late 2001, the company won what has been touted
as "the largest defense contract in history," a $19 billion
development contract for the $200 billion Joint Strike Fighter (JSF)
program. Plans call for producing variants of the JSF for the U.S.
Air Force, Navy, and Marines, as well as for the Navy and Air Force
of the United Kingdom. Other countries that have been discussed as
potential customers for this "world aircraft" are Germany,
Turkey, and Israel.
Boeing
The Boeing Company is the 800-pound gorilla of US
aerospace. The firm is the world's largest aerospace company, the #1
manufacturer of commercial jets (barely ahead of Airbus), and the #3
defense contractor behind Lockheed Martin and Northrop Grumman. It
has two major segments: commercial airplanes and Integrated Defense
Systems. Boeing's commercial aircraft include the 767, 747, and the
737; military aircraft include the F/A-18 Hornet strike fighter, the
F-15 Eagle fighter-bomber, the C-17 Globemaster III transport, and
the AH-64D Apache helicopter. Boeing's space operations include
communications satellites, Delta rockets, missiles, the International
Space Station, and the Space Shuttle (with Lockheed).
Boeing is best known for its
planes, but its Integrated Defense Systems (IDS) unit -- formed when
Boeing combined its Military Aircraft & Missile Systems and Space
& Communications units -- has all the neat stuff. It includes
military aircraft (F/A-18E/F Super Hornet, F-15E Eagle, C-17
Globemaster III, AH-64D Apache Longbow, and V-22 Osprey) as well as
missiles (Harpoon, SLAM-ER, THAAD), airborne lasers, and Unmanned
Combat Air Vehicles (UCAV). IDS also makes the Delta family of launch
vehicles, is NASA's prime contractor for International Space Station,
supports the Space Shuttle program (a joint venture with Lockheed
Martin), and makes satellite-based information and communications
systems.
Boeing Integrated Defense Systems (IDS), based in St.
Louis, is a $23-billion business with capabilities in defense,
intelligence, communications and space. Boeing Integrated Defense
Systems is a recognized leader in providing end-to-end services for
large-scale systems that combine sophisticated communications
networks with air, land, sea and space-based platforms for global
military, government and commercial customers. With more than five
decades of expertise and the ingenuity of 78,000 employees, IDS is
well positioned to continue to grow its business and become the
world's premier space and defense company.
Boeing is the world's biggest commercial jet
producer, NASA's largest contractor, one of the Pentagon's top
contractors, and the US's largest exporter. Boeing and its
subsidiaries employ almost 200,000 people in 60 countries and 26
American states, with customers in 145 countries, and manufacturing
operations throughout the US, Canada, and Australia. Major operations
are in Seattle, Washington; Southern California; Wichita, Kansas; and
St. Louis, Missouri. Boeing has recently expanded or opened offices
in Brussels, Tokyo, Beijing, Hong Kong, London, Paris, Moscow, Ghana
and South Africa. Since 1997, when Boeing acquired defense giant McDonnell
Douglas, Boeing has ranked as the Pentagon's No. 2 contractor, second
only to Lockheed Martin.
After the September 11th attacks, Boeing's stock
plummeted 16.8%. Sales to commercial airlines constitute 60% of
Boeing's business. With decreasing orders for commercial aircraft,
Boeing expects to lose production of more than 1,000 airplanes.
Hence, Boeing is anticipating having to lay off as many as 30,000
employees by the end of 2002.
Although it is not specifically involved in the
development of nuclear weapons, Boeing's lead role in the National
Missile Defense (NMD) system will have an impact on the future role
of nuclear weapons in the US and in the world. Boeing's Space and
Communications Group division is involved in everything from
operating the Space Shuttle, to creating new satellite-based
information and communications services, and overseeing many of the
missile defense programs.
Together with Textron, Boeing is developing the
troubled V-22 Osprey aircraft for the Marine Corps, while Sikorsky
and Boeing have joined together to build the RAH-66 Comanche combat
helicopter for the Army. Buying nations include the United Kingdom,
Turkey, Israel, Egypt, Saudi Arabia, Greece, South Korea, Taiwan, and
Brazil.
Boeing also has a role in the development of each
of the three next-generation fighter aircraft, all of which were
conceived during the Cold War. These include the $62 billion F-22
being built with Lockheed Martin for the Air Force, the $46 billion
F/A 18 E-F Super Hornet being built by Boeing for the Navy, and
potentially the $200 billion Joint Strike Fighter to be used by the
Marines, Navy and the Air Force. Both Boeing and Lockheed Martin had
been competing for the JSF contract. In late October 2001, the
Pentagon awarded the JSF contract to Lockheed, but there has been
discussion of sharing some of the work with Boeing.
Selected
Products and Services
|
737-700
Airborne Early Warning & Control System (AEW&C)
|
Boeing
is under contract with Australia and Turkey to design and develop
AEW&C systems for those nations� defense forces.
|
|
767
Tanker/Transport
|
The
767 Tanker/Transport is the reliable, low-risk solution for
air-refueling and transport needs for military services around the
globe.
|
|
AH-64D
Apache Longbow
|
The
AH-64D Apache Longbow is the most lethal, survivable, deployable
and maintainable multimission combat helicopter in the world.
|
|
Airborne
Laser
|
As
the prime contractor for the U.S. Air Force Airborne Laser program,
Boeing will conduct the program definition and risk reduction
phase.
|
|
AV-8B
Harrier II Plus
|
The
multimission Harrier II Plus� unique
vertical/short-takeoff-and-landing capability and around-the-clock
availability allows the Harrier to perform most missions from
anywhere in the world where other tactical fixed wing aircraft
can�t operate.
|
|
Boeing
376, 601, and 702 satellites
|
Boeing
Satellite Systems is the world�s largest manufacturer of commercial
communications satellites, and a leader in military communications.
|
|
C-17
Globemaster III
|
The
C-17 Globemaster III is the most advanced, versatile airlifter ever
made. It is capable of flying long distances, carrying 169,000
pounds of payload and landing on short, austere runways close to
the front lines.
|
|
C-32A
Executive Transport
|
The
C-32A is a specially configured Boeing 757-200 for the U.S. Air
Force. The aircraft provides safe, reliable worldwide airlift for
the Vice President of the United States, U.S. Cabinet members and
other U.S. government officials.
|
|
C-40A
Military Transport
|
This
modified 737-700C jetliner increases the logistical capabilities of
the U.S. Navy�s worldwide fleet. It can be configured as an
all-passenger, all-cargo or combination of the two.
|
|
C-40B
Executive Transport
|
The
C-40B is a specially modified Boeing Business Jet that provides
high-performance, flexible, cost-effective airlift support for the
Commanders-in-Chief, senior government leadership and team travel.
|
|
CH-47
Chinook
|
The
CH-47 Chinook is the world�s most reliable and efficient heavy-lift
helicopter, operable in both military and civil missions.
|
|
Delta
family of rockets (Delta II, III, IV)
|
The
Boeing family of Delta launch vehicles has been designed to meet
the needs of commercial and U.S. government launch customers. The
expendable rockets offer a variety of launch options that can lift
payloads weighing 900 to 13,000 kg to orbit.
|
|
Explosive
Detection System machines (EDS) and Explosive Trace Detection
Machines (ETD)
|
The
U.S. Department of Transportation awarded a contract to Boeing to
install and maintain EDS and EDT machines at all 438 U.S.
commercial aviation airports by Dec. 31, 2002. The contract also
calls for the Boeing team to train approximately 30,000 airport baggage-screening
employees, and has options to support the fielded equipment for up
to five years after the contract completion date.
|
|
F/A-18E/F
Super Hornet
|
The
F/A-18E/F Super Hornet is the cornerstone of U.S. naval aviation
and the nation�s newest, most advanced strike fighter. Designed to
perform both air-to-air and ground attack or strike missions, the
Super Hornet provides all the capability, flexibility and
performance necessary to modernize the air or naval aviation forces
of any country.
|
|
F-15
Eagle
|
The
F-15E Eagle is the world�s most capable multirole fighter and the
backbone of the U.S. Air Force fleet. The
F-15E
carries payloads larger than any other tactical fighter but retains
the air-to-air capability. It can operate around the clock and in
any weather.
|
|
F-22
Raptor
|
Boeing
is teamed with Lockheed Martin, UTC Aerospace and the U.S. Air
Force to develop the F-22 Raptor as a replacement for the F-15C.
The fast, agile, stealthy F-22 will take over the air superiority role
with Air Combat Command starting in 2005.
|
|
Future
Combat Systems (FCS)
|
Boeing
was recently awarded a contract for the FCS program, which is a
networked system of improved communications links and lighter, more
mobile armored vehicles.
|
|
Future
Imagery Architecture
|
In
1999, a Boeing-led team was awarded the FIA � space imaging -
contract from the National Reconnaissance Office (NRO.
|
|
Global
Positioning System
|
Boeing
has built a total of 40 GPS satellites and is under contract to
build six follow-on Block IIF satellites with an option for
additional vehicles. Boeing is also under U.S. Air Force contract
to lead the ground control segment of the GPS constellation.
|
|
Ground-based
Midcourse Defense
|
Boeing
is the prime contractor for the Ground-based Midcourse Defense
(GMD) program, which is designed to defend the U.S. from a limited
ICBM attack. The program includes development, testing and
integration of all GMD elements.
|
|
International
Space Station
|
Boeing
is the prime contractor to NASA for the design, development and
on-orbit performance of the International Space Station. The first
components were joined in orbit in 1998.
|
|
Joint
Tactical Radio Systems
|
Boeing
was recently awarded a contract to develop the JTRS, a family of
software programmable radios that will provide military commanders
with significantly improved voice, video and data communications
capability across the armed forces.
|
|
Military
Aerospace Support
|
Military
Aerospace Support is unique in the aerospace industry � a single
organization offering the full spectrum of product and services to
reduce life-cycle costs and maximize readiness of military aircraft
in service with operators around the globe.
|
|
Munitions
(SLAM-ER, CALCM, JDAM, Harpoon)
|
A
world leader in all-weather precision munitions, Boeing covers a
wide spectrum of strike weapon capabilities. These include the
Standoff Land Attack Missile-Expanded Response (SLAM-ER), Joint
Direct Attack Munition (JDAM), Conventional Air-Launched Cruise
Missile (CALCM), Brimstone and improved Harpoon missiles.
|
|
RAH-66
Comanche
|
The
Boeing-Sikorsky team is developing the RAH-66 Comanche, a
twin-turbine, two-seat, armed reconnaissance helicopter slated to
enter service with the U.S. Army in 2006.
|
|
Sea
Launch Company, LLC
|
Sea
Launch is an ocean-based commercial launch service that provides a
heavy-lift capability coupled with direct equatorial insertion into
geosynchronous transfer orbit (GTO). The international partnership
includes Boeing Commercial Space Company, RSC Energia, Kvaerner,
the international Norwegian-based industrial Group, SDO Yuzhnoye/PO
Yuzhmash.
|
|
Space
Shuttle
|
The
Space Shuttle is the world�s only operational, reusable and human-rated
launch vehicle. Boeing builds, maintains, modifies and, as a United
Space Alliance partner, operates the Shuttle systems. Boeing also
builds, tests and maintains the Shuttle�s main reusable
liquid-fueled rocket engines.
|
|
T-45
Goshawk
|
The
two-seat Goshawk is the heart of the integrated T-45 Training
System, which the U.S. Navy employs to prepare pilots for the
fleet�s carrier-based jets.
|
|
Unmanned
Combat Air Vehicle
|
The
Unmanned Combat Air Vehicle (UCAV) could significantly increase
combat effectiveness while reducing the overall costs of
operations. The UCAV has a stealthy, tailless, 27-ft. airframe with
a 34-ft. wingspan. Its initial mission is suppression of enemy air
defenses.
|
|
V-22
Osprey
|
In
partnership with Textron, Boeing developed the revolutionary V-22
Osprey tiltrotor aircraft. Combining the speed and range of a
turboprop and the vertical lift of a helicopter, the V-22 can carry
up to 24 troops or 20,000 pounds of cargo at twice helicopter
speeds.
|
Raytheon
Raytheon is the third largest defense contractor
in the United States, behind Lockheed Martin and Boeing. The
Massachusetts-based conglomerate received more than $6.3 billion in Pentagon
contracts in 2000, accounting for over 37% of the firm's $16 billion
in revenues. By its own accounting, the company is involved in over
4,000 weapons programs. As its VP for Business Development Tom
Culligan puts it, "As a top tier defense electronics company,
our forte is to be a provider to major platform manufacturers, which
means you see Raytheon's brand name everywhere - from tanks and
rifles to ships, aircraft and UAVs (unmanned aerial vehicles)."
Raytheon's best-known product is probably the
Patriot air defense missile, which received massive publicity during
the 1991 Gulf conflict when it was used to defend against Iraqi Scud
missiles.
Another high-visibility system produced by
Raytheon is the Tomahawk land attack missile, which company promotional
materials describe as "the US Navy's weapon of choice."
According to Raytheon, "Tomahawk has played a crucial role in
several theater operations including: Operation Desert Storm, Bosnia,
Iraq and Kosovo. Over 300 Tomahawks were used in Operation Desert
Storm alone. Since Desert Storm in 1991, more than 1,000 Tomahawks
have been fired..."
Other Raytheon missile systems include the AIM-65
Maverick, an air-to-surface missile that the company describes as
"the most widely used precision guided munition in the free
world.integrated on virtually every fighter aircraft in the free
world ranging from the F-4 Phantom, F/A-18 Hornet, F-16 Falcon, AV-8B
Harrier, the JAS-39 Grippen, and most recently, the P-3C Orion";
the AIM-9 Sidewinder air-to-air missile; and the top-of-the-line
AIM-120 AMRAAM (Advanced Medium Range Air-to-Air Missile), which has
been sold to the US armed forces along with more than 20 other
nations, including recent controversial offers to Thailand and the
United Arab Emirates.
Raytheon also specializes in radar, surveillance,
and targeting systems that are used on most US-produced combat
aircraft, including the Air Force F-15, F-16, and F-22 fighter
planes; the Navy's V-22 "Osprey" tilt-rotor aircraft; and
the US Special Forces AC-130U and AC-130H airborne gun ships which
have been heavily utilized in the war in Afghanistan. Raytheon calls
this latest line of equipment "the Terminator family of
targeting systems."
The company is also a major arms exporter, with
billions in overseas arms sales in the past decade to a client list
that includes Israel, Egypt, Saudi Arabia, Turkey, Indonesia,
Malaysia, Oman, Singapore, Greece, Taiwan and South Korea.
General
Dynamics
General Dynamics (GD) is headquartered in Falls
Church, Virginia, and employs approximately 46,000 people worldwide.
GD and its subsidiaries have facilities throughout the United States,
including Connecticut, Rhode Island, Maine, Massachusetts,
California, Vermont, Pennsylvania, Arkansas, Ohio, Washington, North
Carolina, and Virginia, and international offices in Italy, England,
and Canada.
Defense contractor General
Dynamics brings it on by land, air, and sea. It operates in four
areas: marine (warships and nuclear submarines), aerospace (business
jets), information systems and technology (command and control
systems), and combat systems (tanks, amphibious assault vehicles, and
munitions). General Dynamics' Electric Boat subsidiary builds nuclear
submarines (Seawolf, Ohio, Los Angeles classes); Bath Iron Works
builds DDG 51 destroyers and LPD 17 landing craft; Land Systems
builds the M1 tank and Abrams combat vehicle; and Gulfstream
Aerospace makes business jets. General Dynamics derives almost 60% of
its revenue from the US government.
General Dynamics has leading market positions in
shipbuilding and marine systems, land and amphibious combat systems,
mission-critical information systems and technologies, and business
aviation. The company is a leading supplier of sophisticated defense
systems to the United States and its allies, and sets the world
standard in business jets. It has four major business segments �
Aerospace, Combat Systems, Information Systems and Technology, and
Marine Systems.
Our major products include the Virginia-class
nuclear-powered attack submarine, Arleigh Burke-class Aegis
destroyer, Abrams M1A2 digitized main battle tank, the Stryker
wheeled assault vehicle, medium-caliber munitions and gun systems,
advanced fiber-optics products, Sect�ra secure encryption wireless
phones, and the Gulfstream IV-SP� and Gulfstream V�
business jets. On our drawing boards and in our test facilities are
21st century platforms and systems like the Gulfstream
V-SP�, U.S. Marine Corps Advanced Amphibious Assault
Vehicle (AAAV), Navy SSGN guided missile submarines and the
next-generation communication systems for military and select
commercial customers. Additionally, we manage satellite ground
stations, supply construction material in the Midwest, and service a
variety of business aircraft.
General Dynamics was officially established February 21,
1952, although it has organizational roots dating back to the late
1800s. The company was formed after its predecessor and current
operating division, Electric Boat, acquired the aircraft company Canadair
Ltd. and began building the first nuclear-powered submarine, USS
Nautilus.
Through the years, General Dynamics has applied the
wisdom of its experience and insight to recognize and act on change
to build its position in the defense and technology business sectors.
Building upon its marine business, the company added its first Combat
Systems business unit, Land Systems, in 1982; its first Information
Systems and Technology business unit , Advanced Technology Systems,
in 1997; and returned to the aerospace business with Gulfstream in
1999.
Today, General Dynamics has leading market positions in
business aviation and aircraft services, land and amphibious combat
systems, mission-critical information systems and technologies, and
shipbuilding and marine systems. The company is a leading supplier of
sophisticated defense systems to the United States and its allies,
and sets the world standard in business jets. It is headquartered in
Falls Church, Virginia, employs approximately 54,000 people
worldwide, and has four main business segments: Aerospace, Combat
Systems, Information Systems and Technology, and Marine Systems.
GD
operates in four main areas:
Marine Systems - producing warships and nuclear
submarines
Aerospace - making business jets
Information Systems and Technology - designing command and control
systems
Combat Systems - making tanks, amphibious assault vehicles, weaponry,
and ammunition
General
Dynamics' subsidiary, Electric Boat of Groton, Connecticut builds the
Seawolf attack submarines; Bath Iron Works of Bath, Maine builds the
DDG 51 destroyers; Land Systems of Sterling Heights, Michigan builds
the M1 tank; and Gulfstream Aerospace of Savannah, Georgia makes
business jets. GD Marine Systems is the U.S. Navy's leading supplier
of combat vessels - including nuclear submarines, surface combatants,
and auxiliary ships.
General Dynamics Armament Systems (GDAS), a
division of General Dynamics, bought Saco Defense in June 2000. Saco
Defense, one of the world's leading producers of small and medium caliber
machine guns and cannon barrels and specializes in automatic weapons
for the military, is now called General Dynamics Weapons Systems.
Most recently, GDAS was awarded a $39 million
contract from the US Army for M2 machine guns, gun bolts, and barrels.
The company also received a $126.4 million order from the US Army and
Air Force for HYDRA-70 rocket systems, with a maximum potential value
of $1.2 billion over the next five years.
The US government has facilitated the sales and
giveaways (through its Foreign Military Sales and Excess Defense
Article programs) of M60 machine guns to Panama, Peru, Colombia and
Jordan; and M2 machine guns to Egypt, Greece, Thailand and Tunisia.
Northrop
Grumman
Northrop Grumman is a Los Angeles-based company
that manufactures planes and bombers dropping munitions on
Afghanistan, including the B-2 bomber, the F-14 fighter. The company
also makes the much-praised unmanned Global Hawk. The $10 million per
copy Global Hawk has been deployed to Afghanistan despite the fact that
it had not completed its testing requirements.
In addition to its planes and bombers, the
company's Maryland based Electronic Systems division makes high tech
systems like the Airborne Warning and Control Systems (AWACS), a
control center and a huge radar disc mounted atop a Boeing 707, which
serves "as the airborne nerve center for a military air
campaign."
Northrop Grumman is also responsible for ALQ-15
jamming device, used to protect jets from enemy radar-guided
missiles. As David Steigman, senior defense analyst for the Teal
Group, boasts, "Northrop Grumman's role is supplying the command
control communications and the intelligence surveillance systems to
find the bad guys and bop them in the head."
When Wall Street opened again on September 17,
2001, Northrop Grumman was ready to bob those bad guys and its stock
had risen 16% to $94 a share in anticipation of the coming war. Two
days after bombing in Afghanistan began, Northrop Grumman's stock had
reached a three-year high of $107.60 a share on the New York Stock
Exchange. The future looks bright and the company has job openings
for more than 1,000 employees. According to a recent article in the
financial magazine Barrons, Northrop Grumman is now seeking $2
billion in loans and equity investment to expand business
opportunities and acquisitions.
(((UTC Aerospace)))
put a page on united
technologies
(((Textron)))
put a page on Textron
(((Goodrich)))
(((Honeywell)))ED
Bombardier in Canada
Bombardier makes the goods to get
people moving. Its Bombardier Aerospace subsidiary (65% of sales
before it bought Adtranz) is the world's #3 maker of civil aircraft
behind Boeing and Airbus; the #1 regional aircraft maker (Canadair,
de Havilland), ahead of Embraer and Fairchild Dornier; and one of the
two largest makers of business jets (Challenger, Learjet), along with
Gulfstream. Its Bombardier Transportation division -- which added
DaimlerChrysler's Adtranz rail systems unit in 2001 -- is the world's
largest producer of railway equipment. Other Bombardier subsidiaries
produce Ski-Doo and Lynx snowmobiles, all-terrain vehicles, and
Sea-Doo personal watercraft. The Bombardier family controls the
company.
Bombardier Aerospace, Defence
Services is a respected expert in Fleet Management and Aviation
Training Management. By tailoring our capabilities into customized
solutions, we help customers extend the service life of military
aircraft, enhance operational requirements, and reduce fleet
operation and support costs.
European Pillar
There is also a very important change inside NATO
and between NATO and the EU which I shall mention below: Maybe you
have heard of a "European Pillar", a "European Security
and Defense Identity", "Common Security and Foreign
Policy" or "Common Security and Defense Policy" and
other phrases describing the emerging European Military Industrial
Complex.
For a number of years, the European Union has been
building a common European security and defense policy. An important
stage was reached at the Helsinki Summit in December 1999, where EU
leaders set themselves the goal of developing a rapid reaction force
by 2003. This force would consist of 50,000 - 60,000 troops, in
addition to air and naval elements, and would be deployable within 60
days and sustainable for up to a year. It would be used by the
European Union for humanitarian and rescue tasks, peacekeeping tasks
and tasks of combat forces in crisis management, including peacemaking
- these are the "Petersberg tasks" as agreed by the Western
European Union (WEU) in 1992, which were subsequently incorporated by
the European Union into the 1997 Amsterdam Treaty.
Allied leaders meeting in Washington in April 1999
expressed their readiness, in light of St. Malo and subsequent
developments in the European Union, to define and adopt the necessary
arrangements to allow ready access by the European Union to NATO
collective assets and capabilities for crisis management operations
where the Alliance as a whole is not engaged militarily. Meanwhile,
major shortfalls already identified in European defense capabilities
were confirmed during the Kosovo crisis.
EU summits in Cologne in June 1999 and Helsinki in
December 1999 led to important decisions on strengthening the EU's
common European security and defense policy (ESDP) and the
development of an EU rapid reaction capability by 2003. The first EU
High Representative for Common and Security Policy, former NATO
Secretary General Javier Solana, took office in October 1999, filling
the post for the first time since its creation by the Amsterdam
Treaty. Shortly after, he was also appointed Secretary General of the
WEU.
EU leaders at Helsinki acknowledged the Alliance's
role in crisis management, making clear that their objective in
developing an EU rapid reaction capability has no bearing on
collective defense but is designed to enable the European Union to
mount and lead crisis management operations in response to
international crises, where the Alliance as a whole is not engaged.
Those of the Western European Union's functions needed to take on the
Petersberg tasks are being taken over by the European Union. However,
the collective defense commitments of the WEU's modified Brussels
Treaty of 1954 are unaffected and will in future be safeguarded by a
residual WEU secretariat, as was decided at the WEU ministerial
meeting in Marseilles in November 2000.
EU-NATO
relations develop
The starting point for Allied discussions on the
practical military aspects of developing the NATO-EU relationship, in
particular EU ready access to the collective assets and capabilities
of the Alliance, is set out in paragraph 10 of the Washington Summit
Communiqu� in the following terms:
a.
Assured EU access to NATO planning
capabilities able to contribute to military planning for EU-led
operations;
b.
The presumption of availability to the
EU of pre-identified NATO capabilities and common assets for use in
EU-led operations;
c.
Identification of a range of European
command options for EU-led operations, further developing the role of
the Deputy Supreme Allied Commander, Europe, in order for him to
assume fully and effectively his European responsibilities;
d.
The further adaptation of NATO's
defense planning system to incorporate more comprehensively the
availability of forces for EU-led operations.
In parallel to the first discussions in the
EU-NATO ad hoc working groups, interim security arrangements between
NATO and the EU Council Secretariat entered into force at the end of
July 2000, facilitating the exchange of classified information. The
EU-NATO working group on Security Arrangements is working towards a
permanent security arrangement between the two organizations.
The decisions taken at the EU summit in Helsinki
in December 1999 mark a significant change in the evolution of
European security arrangements. The EU's intention to absorb the
Western European Union (WEU) in the near future, to create a European
rapid reaction corps of 50,000 - 60,000 troops by 2003 for operations
such as peacekeeping and regional crisis management, and to set up
the appropriate decision-making structures (including a Standing
Committee on Political and Security Affairs, a Military Committee,
and a military staff) indicate the Union's new determination to
become a serious security actor in its own right.
In addition to national units, a number of
multinational formations have been designated as Forces answerable to
EU
- The
Rapid Reaction Force;
- the EUROCORPS
(European Corps) - Belgium, France, Germany, Luxembourg and
Spain;
- the Multinational
Division (Central) - Belgium, Germany, Netherlands and the
United Kingdom;
- the UK/Netherlands
Amphibious Force;
- the EUROFOR
(Rapid Deployment Force) - France, Italy, Portugal and Spain;
- the EUROMARFOR
(European Maritime Force) - France, Italy, Portugal and Spain;
- the Headquarters of
the First German-Netherlands Corps;
- the Spanish-Italian
Amphibious Force;
- the
European Air Group (EAG) - Belgium, France, Germany, Italy,
Netherlands, Spain and the United Kingdom.
EU and NATO
adopt framework for co-operation
A joint declaration adopted by the European
Union and NATO on 16 December has opened the way for closer political
and military co-operation between the two organisations.
The landmark Declaration on the European Security and Defence
Policy (ESDP) provides a formal basis for co-operation between the
two organisations in the areas of crisis management and conflict
prevention. It outlines the political principles for EU-NATO
co-operation and gives the European Union assured access to NATO�s
planning and logistics capabilities for its own military operations.
NATO and the EU have successfully collaborated in crisis
management before, most notably in the former Yugoslav Republic of
Macedonia (1), but a formal framework for
co-operation did not previously exist.
�I have said many times standing here that
NATO-EU co-operation works in practice, but has not yet worked in
theory,� said NATO Secretary General Lord Robertson at a
press conference. �Today�s declaration and the work
completed over the weekend completes that. We will work in practice
and we will work in theory as well.�
EU-NATO Declaration on ESDP
THE EUROPEAN UNION AND THE NORTH
ATLANTIC TREATY ORGANISATION,
- �Welcome the strategic
partnership established between the European Union and NATO in
crisis management, founded on our shared values, the
indivisibility of our security and our determination to tackle the
challenges of the new Century;
- Welcome the continued
important role of NATO in crisis management and conflict
prevention, and reaffirm that NATO remains the foundation of the
collective defence of its members;
- Welcome the European Security
and Defence Policy (ESDP), whose purpose is to add to the range
of instruments already at the European Union�s disposal for
crisis management and conflict prevention in support of the
Common Foreign and Security Policy, the capacity to conduct EU-led
crisis management operations, including military operations
where NATO as a whole is not engaged;
- Reaffirm that a
stronger European role will help contribute to the vitality of
the Alliance, specifically in the field of crisis management;
- Reaffirm their
determination to strengthen their capabilities;
Declare that the relationship
between the European Union and NATO will be founded on the following
principles:
- Partnership: ensuring
that the crisis management activities of the two organisations
are mutually reinforcing, while recognising that the European
Union and NATO are organisations of a different nature;
- Effective mutual
consultation, dialogue, cooperation and transparency;
- Equality and due
regard for the decision-making autonomy and interests of the
European Union and NATO;
- Respect for the
interests of the Member States of the European Union and NATO;
- Respect for the
principles of the Charter of the United Nations, which underlie
the Treaty on European Union and the Washington Treaty, in order
to provide one of the indispensable foundations for a stable
Euro-Atlantic security environment, based on the commitment to
the peaceful resolution of disputes, in which no country would
be able to intimidate or coerce any other through the threat or
use of force, and also based on respect for treaty rights and
obligations as well as refraining from unilateral actions;
- Coherent, transparent
and mutually reinforcing development of the military capability
requirements common to the two organisations;
To this end:
- The European Union is
ensuring the fullest possible involvement of non-EU European
members of NATO within ESDP, implementing the relevant Nice
arrangements, as set out in the letter from the EU High
Representative on 13 December 2002;
- NATO is supporting
ESDP in accordance with the relevant Washington Summit
decisions, and is giving the European Union, inter alia and in
particular, assured access to NATO�s planning capabilities, as
set out in the NAC decisions on 13 December 2002;
- Both organisations
have recognised the need for arrangements to ensure the
coherent, transparent and mutually reinforcing development of
the capability requirements common to the two organisations,
with a spirit of openness.�
Germany and France have agreed to cooperate
on a spy satellite system that would cut Europe's reliance on US
military intelligence and revives an idea previously shelved as being
too expensive. Following a summit in the German town of Mainz the
French and German leaders said Berlin would acquire an all-weather
radar satellite system while Paris would bring its optical satellite
system into the joint project.
"Germany and France intend to develop an independent
European satellite reconnaissance system," a statement said
after German Chancellor Gerhard Schroeder met France's President
Jacques Chirac and Prime Minister Lionel Jospin. Plans for an
independent statellite system were hastened following European
reliance on US satellite information during last year's outlaw war
against Yugoslavia.
JDAMs
Most of the 30,000 bombs dropped by the US on Yugoslavia were
Joint Direct Attack Munition (JDAM) ordinance. JDAM's are precisely
guided to their targets by satellite signals day and night in any
weather as opposed to laser-guided munitions which are affected by
heavy cloud and rain.
"We recognised in Kosovo that we have to be able to stand
on our own two feet in the area of European reconnaissance. We can't
rely on delivery from outside of Europe," one German official
source said.
In other words the EU wants the ability to bomb who it likes
when it likes without relying on US technology.
Satellite plans
relaunched
Mr Schroeder's conservative predecessor Helmut Kohl pulled out
of an ambitious European satellite programme with France in 1997,
citing budget constraints. France was especially keen to build the
Helios II and Horus satellites to make Europe independent of
Washington's superior "spy in the sky" capabilities and
made the project a symbol of Europe's drive for its own military
identity, apart from NATO.
Germany has changed its mind since the technology is now
cheaper and because the United States refused to share all its
satellite intelligence with its EU allies during last year's
murderous attacks in the Balkans. During the Yugoslav conflict Germany
also used unmanned drones launched from bases in Macedonia to gather
aerial reconnaissance but some crashed and they could not operate in
poor weather.
Arms
consolidation drive
The drive towards creating a single military-industrial
complex in Europe was also strengthened when German Defense Secretary
Walther Stuetzle announced that Germany, France, Italy and the
Netherlands have ordered 366 NH90 military transport helicopters for
around �6 billion.
The Eurocopter unit of European Aeronautic Defense and Space
Company (EADS) - a merger of DaimlerChrysler's aerospace unit,
France's Aerospatiale Matra and Casa of Spain - has a 63 per cent
share of the NH 90 project. The NH 90 has become one of the world's
most drawn out military equipment programs which began in the 1980s
with the multi-billion pound Eurofighter.
Washington has attempted to slow down European arms
consolidation by linking up the US arms giant Raytheon with the
French arms group Thales. However, the Pentagon is very nervous about
sharing sensitive information with Thales, particularly around air
defense command systems.
Military
hardware slush funds
Another signal that the European arms manufacturers are
gearing up for an intense arms race is the building up of offshore
slush funds, to pay huge "commissions" to win contracts, to
avoid new anti-corruption rules. A London conference on financial
crime heard OECD chair of a working party on corruption Mark Peith
say: "many companies are building slush funds because they want
to retain the option to bribe."
The tradition of bribing countries to buy huge amounts of
armaments has been long employed by the US military-industrial
complex. For instance US defense secretary William Cohen secured
sales of �2,000 million of Lockheed Martin military hardware to Egypt
last year by offering huge "commissions" including �1,000
million in US military "aid."
Franco-German
axis
It seems that the axis driving the eurofederalist juggernaut
is keen to block further US advances in the growing arms race between
Washington and Brussels. The EU mandarins are also determined to
increase their own military capability in order to outflank their US
imperial rival in the race to grab control of the world's resources
for their own empires.
Thales
Surface-to-air missile systems
Thales is one of the world.s
leading specialists in land-based and naval anti-air systems for the
very short-, short- and medium-range segments of the market.
Thales' involvement ranges from missile production (the VT1,
Starstreak missile developed by its Northern Ireland subsidiary, and
the Hellfire and Longbow missiles being produced under US licence) to
integration of very short-, short- and medium-range missile systems
and fire control radars.
. Medium range: Thales
is taking part in major European missile system programmes, including
the PAAMS project to develop an anti-air missile system for future
French and Italian frigates, and the French-Italian Future
Surface-to-Air Family (FSAF) programme, which enters production in
2002. For this programme, Thales is developing the Arabel fire
control system. The naval version of Arabel will be used to protect
the aircraft-carrier Charles-de-Gaulle and Saudi Arabia's Sawari 2
frigates, and the land-based version will ultimately equip the
successor to the Hawk system.
. Short range: Thales
offers the most advanced missile system currently available on the
market, the Crotale NG (New Generation). This system is designed for
the air defence of civil and military sites as well as the protection
of armoured and mechanised land forces. It is currently in service
with the French Air Force and Navy and several export customers. Both
the naval and land-based versions use the VT1 hypervelocity missile.
In the very short-range market, Thales, the No. 2 missile
manufacturer in the United Kingdom, has supplied over 60,000 missiles
to sixty armed forces worldwide. In 2001, the company continued to
work on a contract awarded by the UK Ministry of Defence to supply
the new laser-guided Starstreak missile.
The company has also been selected by
Lockheed Martin to produce its Hellfire and Longbow anti-tank
missiles, which have been selected by the United Kingdom for its
Apache helicopters.
Armaments and propulsion
In armaments, TDA, a 50/50 subsidiary of
Thales and EADS, specialises
in four main areas: air-launched weapon systems (rockets and
bombs), munitronics or munition electronics (guided munitions, fuses
for artillery shells and bombs), weapon and missile components
(warheads, safety-and-arming units, non-lethal weapons), and
land-based weapon systems (mortars and munitions, anti-tank systems).
Thales' propulsion business is conducted by Bayern
Chemie/Protac, jointly owned with EADS GmbH, which supplies
solid-propellant rocket motors for major European tactical missile programmes
(MBDA), air-to-air missiles (Magic, Mica), ground-to-air missiles
(Crotale, Shahine and Patriot), anti-radar (Alarm) and anti-tank
programmes. Bayern Chemie/Protac is developing and producing the
solid fuel ramjet for the European Meteor programme.
As designer, prime contractor, systems
integrator and value-added service provider, Thales proposes a wide range of airborne system
solutions to meet the needs of operational forces for
intelligence, surveillance missions and airborne combat.
Intelligence
Thales won the prime contractorship for the French Navy's Minrem joint
ship-borne electromagnetic intelligence programme under an innovative
contract including the construction of both the hull and the payload.
This new award follows the recent delivery
of the Sarigue electronic intelligence aircraft, for which a major
through-life support contract was also signed in 2001, and confirms
Thales' leadership in
electromagnetic intelligence gathering.
Deliveries of Astac tactical intelligence pods to a number of
countries continued, and deployment by their armed forces is well
underway. In addition, Thales was selected to supply electronic
intelligence systems to the British Army.
Surveillance
Thales has been selected with a number of partners
to develop, produce and test a ground surveillance system demonstrator for Europe based
on active phased array technology. At the same time, the UK
authorities have selected Thales to design and develop a synthetic
aperture radar (SAR) pod demonstrator for the Royal Air Force. Thales
also continued to supply MSTAR battlefield surveillance radars to a
number of countries.
In Indonesia and Japan, the Group won two
important contracts for maritime
patrol systems. These contracts illustrate the growing
importance of this business, for which Thales recently established a
global centre of excellence in Canada.
Combat
Air: Thales is a major partner on the Rafale programme. The French
defence procurement agency's award of the development contract for
the Rafale F2 standard is a major landmark in the development of the
French combat aircraft.s weapon system. The Group is developing the
Rafale's "core system". At the same time, Thales is
investing in the development of an active antenna that will enable the
Rafale to stay ahead of the competition.
Thales is taking
an active part in developing the Mk2 standard of the Mirage 2000-5, an
aircraft that has demonstrated its exceptional qualities in combat on
several occasions. The Mirage 2000-5 is either on order or already in
service in a number of countries.
Naval: As the world's No. 1 exporter in the electronic warfare market,
Thales is the prime contractor of choice for electronic warfare
systems for the most recent naval vessels around the world: selected
by Brunei for its Waspada ships, and by the UK for Type 45
destroyers, Thales will also be working through a joint venture with
Elettronica to equip the French-Italian Horizon frigates.
Land: Thales delivers onboard computers for GIAT
Industries' Leclerc tank.
Missiles: Thales confirmed its
leadership in electromagnetic seekers by signing a major cooperation
agreement with MBDA. The two groups will pool their competencies to
produce seekers for the Aster, Mica and Meteor missiles. In all,
6,000 missiles will be produced by Thales and MBDA together.
Thales has also been awarded the contract for the Mafis fuse to equip
the US Navy.s JSOW (Joint Stand-Off Weapon).
The world market for defence communications
and information systems is worth an estimated 10 billion euros a
year. This market is currently experiencing strong growth, driven by increasing demand for
interoperability and for new services requiring higher levels
of systems integration. A number of battlespace digitisation programmes are taking shape in
different parts of the world, drawing extensively on the latest commercial telecom and Internet
technologies.
Thales was selected to produce the Aristote tactical network,
which is designed to provide end-to-end communications between operational
units in external theatres of operation and commanders in France. As
well as conventional voice, fax and data, the new system will support
IP (Internet Protocol) traffic for future tactical Internet
applications. For France's new Syracuse III satellite programme, Thales was selected by
Alcatel Space to develop the ground segment as well as security
equipment for both the ground-based systems and satellites.
The Group is a founding member of the
company that was appointed prime contractor in early 2001 on the multinational TACOMS Post 2000
programme to define future NATO interoperability standards for
tactical communication systems.
Thales is working on Command Control and Information System (CCIS) programmes
in a number of countries, including Belgium and Canada. In 2000, the
company was awarded the contract for the second version of the French
Army's SICF system, to
be delivered in 2003. France also launched production of the Atlas automated artillery fire
support system, confirming the systems dimension to the
Group's capabilities in battlefield
communications and command.
In early 2001, the company won a contract to
provide new functions, including tactical Internet services, for the successful PR4G tactical radio, which
has been selected by more than 30 countries. The contract includes an
order for a new, lightweight version of the radio designed to
accommodate future software radio standards.
Electronics accounts for a growing
proportion of naval equipment expenditure worldwide and is now worth roughly
as much as the platform and propulsion system combined, or an
estimated 30% of the total cost of a submarine, 40%-50% of the cost
of a frigate, and 60% of the cost of a patrol boat.
The agreement to set up a joint company with the French
shipbuilder DCN was signed in April 2002. The new company will
pool the partners' skills and resources in marketing and prime
contracting for warships and naval combat systems for export
programmes, cooperation programmes, and national programmes with
export potential. This
alliance illustrates Thales' ability to strengthen its ties with
major platform manufacturers without the burden of industrial
integration, and also offers a response to the globalisation of the
defence market while taking strictly national considerations
into account.
Surface naval businesses
Thales is currently prime contractor for the Sawari 2 programme, which
involves supplying three frigates to Saudi Arabia, equipped with the
Arabel multi-function anti-air fire control radar and the Aster missile
system. This nine-year contract follows the Sawari 1 programme, for
which Thales is now providing logistics support.
The Group is a partner on the French-Italian
Horizon programme.
France and Italy have already ordered one frigate each, with orders
for their second frigates expected later.
Thales is currently engaged in several
programmes as prime
contractor and combat systems integrator:
. the TFC programme being conducted by the Netherlands (LCF
frigates), Germany (F124 frigates) and Canada;
. the programme to equip four Meko A-2000 class corvettes for South
Africa;
. PAAMS (Principal Anti-Air Missile System), which is being developed
jointly by France, Italy and the United Kingdom for their
new-generation air defence frigates.
Underwater activities
Thales is a global front-runner in
underwater combat systems and the world's leading exporter of sonar
systems. Its industrial facilities are located in Australia, France
and the United Kingdom.
For submarines, in
2001, Thales booked orders for three sonar suites for the Royal
Navy's new Astute class submarine. In Australia, the group is a
member of the alliance in charge of upgrading the combat systems on
Collins class submarines. The company is also taking part in a number
of export programmes, supplying sonar systems for Pakistan's Agosta
submarines and Chile's Scorp�ne submarines.
For surface
vessels, the Royal Norwegian Navy's new frigates will be
equipped with the Captas Mk2 low-frequency towed array and a Sph�rion
4131S sonar.
France and Italy have also chosen Thales, in
partnership with WASS (Whitehead Alenia Sistemi Subacquei SpA, a
Finmeccanica company) to supply hull-mounted sonars for their Horizon
frigates.
In Australia, the company is continuing the
upgrade of six FFG7 frigates.
Multidomestic
Strategy
Thales
pursues an aggressive merger and acquisition strategy in which it
seeks domestic markets by buying out the local companies in several
nations.� Included in the
portfolio are:
In-flight
entertainment business of B/E Aerospace Inc. (51%) � United States
African Defence Systems (80%) � South
Africa
AIM-CMF software engineering -
Switzerland
AlliedSignal Aerospatiale Canada
(electro-optics division) - Canada
ADI (50%) - Australia
Avimo (optronics) (25%) -
Singapore/United Kingdom
Samsung Electronics (defence businesses)
(50%) � Republic of Korea
Embraer (5.7%) - Brazil
Shorts Missile Systems (increase from 50%
to 100%) � United Kingdom
Siemens (power grid tube business) -
Germany
L-3 Communications: joint venture in TCAS
(Traffic Alert and Collision Avoidance) systems � United States
Quintec Associates � United Kingdom
Racal � United Kingdom
BAE
BAE SYSTEMS is a global systems company dedicated to making
the intelligent connections needed to deliver innovative solutions to
our customers.� Their
world-class capabilities combine key in-depth skills in naval
platforms, military aircraft, electronics, systems integration and
other technologies. This enables BAE to offer outstanding
complementary capability to international customers across the main
defense sectors, the commercial world, as well as in the civil
aircraft market.
BAE�s
network of nearly 100,000 skilled and talented people of numerous nationalities
work together to provide this synergy of systems integration and best
practice for customers.
On 27 April 1999 British Aerospace plc (now known as BAE SYSTEMS
plc) agreed with The General Electric Company, plc (GEC) the proposed
merger of GEC's defence electronics business, Marconi Electronic
Systems, with BAE SYSTEMS. The military aspects of the merger were
subsequently considered by Her Majesty's Government under UK merger
control law. To remedy or prevent possible adverse effects of the
merger, the Secretary of State for Trade and Industry requested the
Director General of Fair Trading to seek Undertakings from BAE
SYSTEMS concerning the conduct of business by the new commercial
entity.
In order to meet this remit, Undertakings were given by BAE
SYSTEMS which were accepted by the Secretary of State for Trade and
Industry.
BAE works with a huge community of partners and
participating in joint ventures - collaborating with corporations
such as Astrium, AMS, MBDA, Airbus, STN Atlas and Saab as well as
working closely with major U.S. platform and sub-system manufacturers
such as Boeing, Lockheed Martin, and Raytheon. The number of joint
ventures and joint projects runs into hundreds.
MBDA is a leading global player in the design and
manufacture of missile systems. The company offers a comprehensive
product portfolio incorporating today's most advanced technology. The
complementary range of weapon systems offered by MBDA ensures the
most appropriate, accurate and reliable solution to each operational
requirement in the air, on land and at sea.
MBDA is the result of the merging of Matra BAe
Dynamics, EADS-Aerospatiale Matra Missiles and the missile activity
of AMS. BAE SYSTEMS holds a 37.5% interest in the company.
MBDA is able to:
�
Satisfy the requirements of the
world's three armed forces with 32 missile programmes currently in
production and a further 23 in development;
�
Arm all the European platforms;
�
Act either as prime contractor or
principal partner in the development of the major European
co-operation programmes;
�
Continue research and development
into future programmes such as anti-ballistic missile defence and
Future Offensive Airborne Systems (FOAS).
Visit
MBDA's web site www.mbda.net
AMS is a major European Joint
Venture owned equally by BAE SYSTEMS and Finmeccanica, and a world
leader in the provision of integrated defence and electronic systems.
A multinational company based in the UK, Italy, Germany and the
United states, AMS has an annual turnover in excess of �1.2bn, an
order book of �4bn and a customer base in well over 100 countries.
AMS operates in the fields of;
�
Air Defence and Battlefield Systems
�
Air Traffic Management Systems
�
Naval Systems
�
Simulation and Synthetic
Environments
�
Systems Integration
Customer
Support and Training
STN Atlas Elektronik GmbH, Bremen, with its naval
systems, simulation systems and land and airborne systems divisions is
one of the leading German companies in the field of defence
electronics and systems engineering. The company operates
internationally with about half of its turnover with customers
abroad. BAE SYSTEMS has a 49-percent stake in the company.
Technological activities at STN Atlas range from
signal processing to radar technology, navigation and communication,
hydroacoustics, sonar and high-frequency technology, optics/optronics
through to unmanned aerial vehicles, digital visual systems (virtual
reality) and command and weapons control systems. Based on its
wide-ranging systems capabilities, the company also acts as prime
contractor for system management, integration and logistics tasks in
various areas.
Gripen International is the company which acts as a prime
contracting organization, responsible for marketing, selling and
supporting the Gripen fighter worldwide. Gripen International is
owned jointly by SAAB AB of Sweden and BAE SYSTEMS of the United
Kingdom. The company was created in September 2001 as a natural
progression from the marketing Joint Venture between SAAB AB and BAE
SYSTEMS established in 1995. Gripen International combines the
strength of its two shareholder companies, which are among the
world's most experienced and respected manufacturers of combat
aircraft and defense equipment
Gripen is the first of the new generation, multi-role combat
aircraft to enter service. Using the latest available technology it
is capable of performing an extensive range of air-to-air and
air-to-surface operational missions and employing the latest weapons.
Gripen is designed to meet the demands of all current and future
threats, while at the same time meeting strict requirements for
flight safety, reliability, training efficiency and low operating
costs. Gripen is in service with the Swedish Air Force, and has also
been ordered by the South African Air Force and the Hungarian Air
Force.
Visit the
Gripen web site at: www.gripen.com
In line with BAE SYSTEMS' objective to improve shareholder
value through consolidation of the aerospace and defence industry, it
announced the purchase of a 35 percent share in Saab AB in April
1998. This strengthens ties between the two companies and enables a
consumer strategy to be pursued in a number of business areas
including combat aircraft, aerostructures, guided weapons, asset
management and training systems.
Visit Saab�s Web
Site (www.saab.se)
Astrium is the largest space company in Europe and is
75 percent owned by EADS and 25 percent owned by BAE SYSTEMS. Astrium
specialises in science programmes, civil and military Earth
observation and communications satellites and ground systems,
navigation constellations, launchers and space infrastructure.
Astrium has been prime contractor for more than 50
communications satellites. It provides complete turnkey satellite
systems, including network control stations, ground terminals and
communications services. The Company has in-house capability for
satellite payloads and spacecraft platforms, and a wide range of
space and ground equipment.
Russia/CIS������
Collective Security Organization Pillar
The
CIS Collective Security Treaty (CIS CST) signed in Tashkent in 1992 is
receiving a face lift. Russian President Vladimir Putin is urgently
exerting pressure on his Russophile allies to transform the CIS CST
into a military alliance modeled on the former Warsaw pact, rather
than the mere piece of paper which has existed. The first step in
this direction was the re-naming of the CIS CST as the CIS Collective
Security Organization (CIS CSO) in May.
The
12 states of the CIS have long been divided into two groups. Led by
Russia, the Russophile group consists of Belarus, Armenia,
Kazakhstan, Kirgizia and the de facto Russian protectorate of
Tajikistan. All six states favour close CIS integration in the
economic, political and security spheres and therefore are members of
the CIS CSO and the Eurasian Economic Community (EEC).
Both
the CIS CSO and the EEC are Putin's still weak alternatives to NATO
and the EU respectively. Of the CIS states only Ukraine, Georgia and
Azerbaijan have expressed an interest in joining NATO. Of these
Ukraine is the most likely candidate in five to 10 years and after
President Leonid Kuchma, who is persona non grata at NATO, retires
from office in 2004. Georgia and Azerbaijan are unlikely NATO
candidates because large proportions of their territories are
occupied by separatist forces covertly supported by neighboring
states and Russia.
Of
those CIS states which are not members of the CIS CSO or the EEC,
Moldova now has a communist president and communist-dominated
parliament. Although Moldova still adheres to its neutrality and has
ruled out joining the CIS CSO, it has informally agreed to join both
the EEC and the Russian-Belarusian union if Ukraine does so first.
Ukraine's
powerful elites are under intense pressure by Putin to join the EEC,
but are not considering either of the two other structures.�� Sources predict that as relations
will continue to sour with NATO and the US, Ukraine - which is not
one of the 12 states set to join the EU between 2004-2007 - will most
likely join the EEC in the next two years as Kuchma serves out his
term of office.
Although
six CIS states have not expressed an interest in Putin's twin
projects of the CIS CSO and EEC, they are subject to varying degrees
of Russian pressure and covert operations. Russia continues to
maintain military bases in Moldova, Ukraine and Georgia, making their
room for maneuver outside Russia's sphere of influence difficult.
At
the October CIS summit in Chisinau, Moldova, Putin unveiled plans to
deepen the integration of the security forces of the CIS CSO. He
insisted these documents should be ratified by their respective
parliaments no later than May 2003, to prevent them stalling and the
documents being ignored, which is the case for most CIS texts signed
at summits. At the Chisinau summit CIS CSO members signed a Charter
and legal framework.
Unlike
the Western system, the Russian Military Industrial Complex (MIC) is
organized into several and, in the main, distinct components:
R&D, design and prototyping, direct manufacture and some indirect
sub-contracting factories to the main factories. All these units are
very much bigger than in advanced industrial countries (AIC) and are,
for that as well as for other structural reasons, extremely
inefficient.
Secrecy, Soviet/Russian habits of exaggerating and producing data
without proper foundation all make it hard to determine, with even
sensible accuracy, the size and numbers involved in the defense
industries. � ���������������
These dinosaur MIC factories represent a massive section of
the resources of Russia. In Soviet times the State was primarily
organized for military purposes and the sums allocated were around a
third of GDP. This figure is now probably between 7-9% of GDP, which
itself is around 40% of what it was, ie the current defense
expenditure lies between 1/8th and 1/10th of the Soviet figure.
Hardly any of that is spent on new material purchases but most of the
key R&D and design centers receive enough funds to survive; they
of course keep on claiming that the figure is woefully inadequate.
None of the factories have been closed or liquidated in spite of the
fact that they are bankrupt, as Russian commentators regularly
report.
Nothing practical has happened during the 12 years of talk
about converting the MIC to making more civilian goods, to rescuing
them from making persistent losses. Indeed one must conclude that the
Russian leadership has every intention of retaining the old soviet
structure, size and organization of the MIC in spite of a drastically
reduced State budget and income. They propose to finance this ostensibly
through income from export of arms; the receipts of roughly $2Bn
yearly do not make this possible. One may confidently guess at their
reasons:
* Military
expenditure embraces most of the spend on "science",
prestige space projects and a highly visible armed force. These
elements traditionally command the respect of a vociferous and
perhaps significant section of the population, especially its
communist adherents, nationalists and chauvinists who would like to
believe that the role of Russia as a Great Power requires foreigners
to respect and fear the Armed Forces of Russia.
* The MIC embraces
the least bad elements of Russian manufacturing industry; apart from
military applications, there is little else of note in Soviet/Russian
civilian science nor in the design of civilian products and systems.
Soviet Russia has earned only 10 Nobel prizes in natural sciences,
the same as Holland with a twentieth of the population.
* The leadership,
whether military, political or scientific and technical, is accustomed
to the past, which by its own lights delivered successfully the
demands of the regime.
* They regard all
western advice as motivated by the will to destroy the basis of
science and technology and more especially of the military potential
based on the MIC.
* They seem to be
afraid to make the fundamental changes necessary, partly because the
process will take several decades and this does not match the
traditional Russian desire to do everything quickly.
* They fall into a
familiar trap; thinking that they need huge investments and new
technology to convert their defense factories successfully. They have
a history of throwing money lavishly at the factories; these were
usually hugely over-invested with new equipment which was often
misused. It is true that the average MIC factory is a poor place and
in an AIC would be closed, the equipment sold at auction, the site
razed to the ground and the work force retrained and dispersed. But
Russian realities do not allow that as a first step. It is indeed possible,
given the necessary authority, for a competent Chief Executive
Officer to return a profit reasonably quickly. But there are few if
any CEOs who really could perform in a competitive market fashion.
* It is also
possible that they realize that they are incapable of undertaking the
necessary reforms at the base of affairs on their own. They would
need a long period of foreign expertise applied within the MIC.
Russians are often proud, sensitive and insecure and such a step
would require them to swallow their pride, however tactfully the job
were to be done. Unfortunately much of the work, for example by
consultants appointed and funded by the EU program TACIS, has been
demonstrably inappropriate to the local circumstances. As a
consequence, little progress has been made.
This is a tragedy for Russia. The end result of successful
reconstruction would be to equip Russia with a far more effective
defence industry, whose real costs would be well below those
currently ruling; furthermore they would possess a wide range of
separate prime contractors of civilian products and services and a
normal structure, as in the AICs, of suppliers and sub-contractors to
both the military and civilian producers capable of competing for
their own and foreign civilian markets.
The consequence of their present stance is that the MIC will
continue to stagnate, to be under employed, to be a massive drain on
the resources of the state budgets at every level and to divert badly
needed resources from the essential tasks required to reverse the
negative trends in real wealth and health of the nation.
However, the MIC will remain capable of:
* responding to
the scenario set by the MOD for imaginative ideas for novel and
advanced weapon systems. Fewer may be offered than in Soviet times
for the military to choose from but some internal discipline will not
be detrimental to the end result.
* delivering for
export, to the MOD as well as to the para-military organs of the
State as many weapons and equipment as demanded, if and when finances
allow.
This capability will be worse than it was when ruled by the
inefficient but still operating Soviet parameters of the industrial
organisations. Good ideas were always degenerated and constrained by
industrial performance in Soviet times. The system will have
deteriorated further, for reasons discussed below.
There is, however, one significant source of improvement which
we must be aware of, namely the fact that the fSU is now barely
constrained from acquiring the latest electronic components, as well
as other high-tech components for weapon systems. These will be
incorporated in C3 equipment and in systems for control of machinery.
They can also buy most "state of the art" laboratory
instrumentation and production equipment. It is possible but unlikely
that the Russian system will, unaided by the transfer of "soft
technology", become competent at getting the results from their
purchases of laboratory and production hardware to which we are
accustomed. The upshot is that modern equipment will be installed in
military hardware but the high reject rates experienced in the
factories will only very slowly approximate to standards of the AICs.
|
|
Ulan-Ude Aviation
Industrial Assotiation
was founded SO years ago and specializes in
manufacturing of updated modifications of MI-8T helicopter and
trainer/attacker SU-25 UBK. U-UAIA pays special attention to
fitting its shops with modern
equipment and bringing in new technological processes
which enable to manufacture a wide variety of consumer goods of the
highest quality.
|
|
|
Nizhny Novgorod Aircraft
Building Plant "Sokol" Joint-Stock Company
- is one of the biggest enterprises of aircraft
industry in Russia, known world-wide as a manufacture of MiG
aircraft.
|
|
|
The Institute of Aircraft
Equipment (NIIAO),
as a leader in Russian aviation industry, is responsible
for research and development of airborne equipment and
integrated avionics systems for aircraft and helicopters.
|
|
|
"Samara
Machine-Building Design Bureau" Joint-Stock Company
("SMBDB")
possesses modern production and test bases and has an
experience in the design of aircraft gas-turbine and piston
engines, gas-transfer units and electric generators.
|
|
|
Kazan Helicopter Plant
is one of the primary manufacturers of medium-sized
helicopters in the world. Main product of the company is the Mi-17
helicopter, widely known upgrade of the Mi-8, which have gained an
excellent reputation during operation all over the world. Also
Kazan Helicopters launched the development of completely new light
helicopter, designated "ANSAT" and together with Mil
Design Bureau and Eurocopter Mi-38 medium helicopter.
|
|
|
Komsomolsk-on-Amur Aircraft
Production Association
There are few, if any, aircraft manufactur-ing
companies in Russia's eastern part and even in the whole of the
Asian-Pacific region, which can compare in terms of technological
stan-dards and scale of production to the Komsomolsk-on-Amur
Aircraft Production Association (its Russian acronym KnAAPO), one
of the recognized leaders of the Russian aircraft industry.
|
|
|
"Irkutsk Aviation
Industrial Association" Open Joint Stock Company (IAIA)
is a well-known manufacturer of the state-of-the-art
aircraft. The IAIA has supplied thousands of aircraft to the
Russian Air Force and made a great contribution to the defence
potential of the country.
|
|
|
Rockets MDB �Raduga�
|
|
|
Kamov Company
was created with the task of developing helicopters
for the Navy. Today the design bureau develops experimental and
prototype rotorcraft, makes helicopter modifications and produces
in quantities some of the types.
|
|
|
Gromov Flight Research
Institute
Disposing of high scientific-engineering potential
FRI has the possibility to perform effectively scientific, research
and test work in the interests of the development of aviation
science and technology.
|
|
|
Joint stock company
"Avialeasing" Corporation Ltd.
was founded in April 1996 by such aviation industry
giants as Joint Stock Company "Perm Motors Plc.", Joint
Stock Company "Aviadvigatel Plc." and specialising
consultancy firm "Ural Consulting." The Corporation is a
company taking up the rear in production and financial cycle of
enterprises of aviation and technical complex in a number of
republics and regions in Russia, tightly cooperating with local
authorities.
|
|
|
Beriev Aircraft Company
is the world leader in development of amphibious
aircraft.
|
|
|
Aviacor � Aircraft Works
Corp., JSC
has proven itself to be in the vanguard of the
russian aircraft industry. The enterprise primarily deals in
manufacturing of heavy civil aircraft.
|
|
|
Rybinsk Motors JSC
is a diversified engine manufacturing company. For 70
years the key activity of the company has been the production of
aircraft engines.
|
|
|
Tupolev's ASTC
|
|
|
"SUKHOI" Aircraft
Military and Industrial Complex
consolidates the designer and series plants producing
the "Su" type aircraft. "SUKHOI" Aviation
Military Production Corporation (AVPK) enterprises develop and
manufacture mostly aviation technical applications of military
purpose.
|
|
|
"Russian Aircraft
Corporation "MIG",
is the first Russian aircraft manufacturer who has
obtained the license and right to participate in military and
technical cooperation with foreign countries and independently trade
with defense products of their own on the world market as well as
to import similar products.
|
|
|
State Research Institute of
Aviation Systems (GosNIIAS)
is a Russian research center of aviation industry.
Many airborne systems in operational have gone through the complete
cycle of design and development at GosNIIAS.
|
|
|
Central Aerohydrodynamic
Institute TsAGI
As a result of many years of intensive research and
successful coupling of the achievements of designing new aircraft
of world standards, the Central Aerohydrodynamic Institute (TsAGI)
gained the highest scientific potential and great practical
possibilities for the development of aviation and aerospace
technology.
TsAGI scientists and specialists are prepared at
the highly professional level to implement research and development
in the area of aviation science and the creation of new pioneer
projects.
|
|
|
Research Institute of
Aviation Industry Economy
The Institute begins its history with the
organization in 1965 of the Major information computing center
(MICC), and with entrusting the Institute with the tasks on
information support of the work of the central staff of the
Ministry of aviation industry.
|
|
|
"Aviapribor" Corporation
is the leader among the Russian aviation industry in
development, production and support of avionics for aircraft of any
class and any mission. More than 30% of all Russian avionics is
manufactured by the enterprises of Aviapribor Corporation.
|
Description of the
Russian MIC
The Soviet MIC probably employed on military work 12-16
million people out of the working population of 67.7 million;
probably half that number directly in the factories of the prime contractors.
It employed over two thirds of all qualified scientists and engineers
(QSE). These, according to figures given by a deputy Minister for
Science in 1995, amounted to 2.7 million in 1991. Post Soviet Russia,
with an able-bodied population of around 71 million, retained between
60-80% of these totals; half in the Moscow Region and another quarter
in the St Petersburg Region. Nearly all the R&D and design
Institutes are there, with manufacturing scattered all over the
former Soviet Union. The defense budget for equipment, on R&D and
all phases up to and including manufacture in Soviet times was
secret. One recent article gave the following analysis, in percentage
terms of the defense budget for 1991 and 1995: Equipment 36.3% and
18.8%; R&D 13.6% and 18.8%; Manpower 38.6% and 54.6%. But there
is no provenance for these data and therefore little credence can be
given to them.
Official Russian pronouncements on the MIC, in common with
other matters, provide figures that vary according to the speaker and
his purpose in making the statement. Current estimates for the MIC of
the Russian Federation lie between:
* 2,700 and 4,000
factories
* 4-6 million
employees. In December 1997 Ya Urinson said that there are more than
2 million direct employees in 1,700 firms in eight sectors which will
be given priority (out of a total work force of about 40 million).
* 200-400 R&D
establishments. There are other estimates from equally knowledgeable
Russian leaders of the MIC. For example in 1995 Viktor Glukhikh, then
the hardened, Cold-War dedicated chairman of the State Committee for
the defence industries - since abolished - quoted 660 military
scientific institutes. To these must be added the many institutes of
the Academy of Sciences, sections of so-called civilian institutes of
higher education involved in research and teaching.
* between 800,000
and 1.2 million QSE (out of 2.7 million total in the last years of
the USSR). If indeed we accept the figure of 80% working for the
military then the USSR QSE in that role numbered 2.16 million. Other
reports say that between 800,000 and 1.2 million have left military
work since then. This would leave between 1-1.2 million in post. This
correlates quite well.
Many of the R&D and design Institutes are now
"hollow", like the Armed Forces themselves, with fewer
staff. The intention is not to close or merge them, but to maintain
their skeleton existence in the hope of later expansion again to
support only the military.
Regional
distribution
Russia has retained practically the whole of the creative and
intellectual ability of the USSR to conceive, design and make a
prototype of weapons and weapon systems. It has, however, lost to the
newly independent States a significant part of raw material deposits,
their primary conversion into semi-finished technical materials,
assembly factories and component manufactures. The loss of Baykonur
to Kazakhstan is also important for the testing of ICBMs and space
work. This has resulted in an expensive rental deal between the two
States and also some improvisation to substitute other stations
within the Russian Federation. Also lost is the vertical structure of
command within Russia and also within the old USSR from Ministry to
operating unit, with its system of instructing them to make products
and transfer to specified users. The factories have to make
horizontal arrangements between themselves. Much of this is arranged
through the inefficient system of barter or paying by issuing IOUs.
The Russians have been trying hard through the economic committee of
the CIS to revive the Soviet structure of cooperation. Belarus,
Ukraine and Russia have given formal approval but there is a long way
to go before this will produce practical results.�
Many of the uranium mines were in Siberia, Kazakhstan, Tajikistan
and Uzbekistan; one was in Estonia. Many of these were closed even
before the USSR collapsed. In 1990 20,000 tonnes was produced but the
demand was only 9,000 tonnes. All the enrichment plants were in the
RF, mostly in 10 closed cities. These have no other employment.
Much of the electronics industry was in Belarus and in Ukraine
which produced low grade silicon. Many western specialists have
worked in these factories; their standard is depressingly poor; most
of their products are uncompetitive. These factories depended on gold
and other minerals from Siberia. Russia was building a replacement
factory in Krasnoyarsk.
There is a heavy concentration of shipbuilding in Ukraine but
this depends on engineering supplies from across the USSR, especially
Russia. There is also a large tank factory and a missile factory in
Ukraine as well as the Antonov aircraft design, R&D and
manufacturing complex. Russia is trying hard to persuade the
Ukrainians not to compete but to collaborate with them in arms exports.
Rather than to name the regions with a heavy concentration and
dependency on the MIC, it was easier to identify the Regions of
Russia that had few if any defence industries. These are: Kuban,
Kuzbass, Tyumen, Bashkiria, Northern Siberia, Yakutia and Kamchatka.
On average the share of the MIC in the regional industry lies
between 30-40%, rising to 50-60% in some cases. Udmurtia was an
extreme case, where 14 defence factories produced 80% of the whole industrial
output of the Republic. They will have suffered accordingly from the
decline.
One speech
forward, two steps back on the conversion road
From the Gorbachev era onward the Government has talked a lot
about their determination to "convert" the MIC to make more
civilian goods for income and profit. The Soviet MIC made not only
war materiel but also nearly all the equipment that the Soviets
regarded as "high technology". This included washing
machines, TV, cameras, more recently computers and applied
electronics. The range was restricted, quality low, design obsolete
and indifferent, workmanship poor. They represent poor "value
for money". Consequently these goods could only be sold to
people who knew no better or who had no other choice. Now they do;
the richer people buy products from AICs and the poor from China,
Vietnam and the like, mostly brought in by the "shuttlers"
- individuals traveling and trading, usually liberally lubricating
their passage across frontiers. Their trade is not small: some
estimates suggest some billions of dollars. The MIC has no ability to
design and make things for a competitive market and as a result they
have lost nearly the whole of their market to imports.
Conversion was another of the slogans to which the Soviet people
had become accustomed. The Russians have had several goals for
conversion: firstly to turn more of the MIC over to designing and
making civilian products. This is even more of a failure than it has
been in the West. Secondly to reorganize the MIC along AIC lines,
including:
* Linking design,
R&D with manufacture. This has always been the case with some
sectors of the MIC, especially in aerospace and personal weaponry.
Not much progress has been evident elsewhere.
* Concentrating
lead factories with subsidiaries to emulate the AIC system of
widespread sub-contracting. Again not much movement is evident here;
prime contractors still prefer to make many components and articles
outside their core competence. This includes making pallets and
packing cases.
* Improving their
access to finance and presumably to financial skills through
Financial-Production Combines. Having in mind the reluctance of
Russian banks to invest in their own economy and their absence of
investment skills, this is an unpromising road. The union of the MIC
with financial institutions on the other hand adds to its political
'networking' and therefore influence within the ruling political and
commercial elite.
* Designating lead
priority areas which will supposedly receive preferential financing,
tax privileges etc. The problem here is exacerbated by the
designation of practically every significant sector as a
"priority".
The MIC was the best of Soviet industry and the Russian
leaders believed that a factory making tanks, aircraft or rocket
engines could turn over, due to the "high educational standards
of the scientists and engineers and the highly skilled
workforce" to making high quality saleable civilian products. A
few years later they began to realise that without application on the
spot of foreign skills, such as marketing, design etc, they were not
going to succeed. Consequently they tried to attract foreign firms to
"invest new money and technology in to the old military and
other factories". Like so many western ignoramuses about
manufacturing industry, they believed that these two ingredients
alone would solve their problems and convert their industry into a
force capable of competing in the world markets.
The west responded by funding and sending not only employees
of the management consulting firms but also engineers and technically
and commercially orientated industrialists to work as advisers at the
invitation of the governments and general directors of the MIC in
Russia and other former soviet countries.
Over the last ten or so years some competent western
industrial engineers worked in and visited MIC factories in various
industrial sectors. The factories are just that: lacking the normal
functions of a commercial firm, based on manufacturing, in an AIC,
such as R&D, design, marketing, business planning, technical
service to customers, quality assurance, relations with suppliers, a
proper financial department. The design bureaux are mostly separate
but even when they are contained within the firm as in MiG-MAPO, for
example, they lack experience of designing for markets other than the
military. When they are ordered or impelled to design civilian
products they start without the experience of decades of foreign
firms occupied in that business and consequently cannot design products
which are competitive. The Russian press has been full of examples of
such wasted efforts. Many of their engineers are reported to despise
civilian work as a prostitution of their skills.
The aircraft industry is, however, one area which has worked
hard at both collaborative and competitive projects with the West.
Its several reorganizations have resulted in a slimmed-down, more
efficient industry. Even here, however, they can talk glibly of the
need for 50-70 different types of aircraft.
Experience shows that the factories are not in a condition to
start new production aimed at competing in civilian markets. This is
in spite of the fact that the basic stock of machine tools is
adequate, some indeed is modern. The problems lie elsewhere, above all
in the mentality of managers, engineers and the work force. The
buildings allow considerable waste of energy, as does the incorrect
use of electrical and other equipment. The layout is poor, there is a
paucity of mechanical handling. Very few of these factories would
justify foreign investment; it would certainly be more profitable to
start again on a green field site, using foreign directors and senior
managers, with their own systems for effective control, supervision
and profit, importing raw materials and components, and the
establishment of distribution and after-sales networks.
Of the negative features the most important is the attitude of
many of the top level staff who are steeped in a culture which sees
the successful methods of the advanced countries as likely to lead to
the collapse of the defence industries. Most people in high places in
politics, the military and industry as well as the ordinary factory
designer and engineer looks with suspicion on advocacy of, for
example, reduction in size of design offices, R&D Institutes and
of the production factories and also their combination. The idea of
closing hopeless units and redirecting their resources to profitable
use is anathema. This has been advocated as a shock approach, not in
a sensible, gradual manner. Consequently the idea was dismissed out
of hand.
Even when a few general directors welcomed and were willing to
embrace essential foreign methods, it was clear that there was a
reluctance both amongst their juniors and seniors in Ministries of
Industry and Defense to allow those changes to take effect.
One must conclude that there are people at every level,
especially at the highest level of government, who have no intention
of abandoning the old Soviet system, numbers and inflated size of the
R&D, design institutes and the factories. This is in the face of
a shrinking of military orders in Russia to 16% of the 1990 totals
and the almost complete absence of official finances to support the
factories which were, or should have been, almost idle. The civilian
output of the factories, which in the last years of the USSR occupied
about 40% of their capacity, has also fallen to about 15%, thus the
factories are only using 30% of their potential.
By 1996 it was obvious that the Governments concerned wished
to re-establish the links between the various units of the MIC which
had been snapped by the break up of the USSR in 1991. Admittedly the
separation was not conducive to provide even the level of efficiency
and effectiveness that prevailed in the Soviet MIC.
An important MIC executive tacitly admitted recently that the
definition and purpose of "conversion" had changed since
Gorbachev's day when he wrote "Conversion means the production
of dual use goods which can easily be adapted from civilian purposes
to military and vice versa. That and nothing else."
"Science"
as an ikon and as a source of military excellence
Science, along with the Orthodox Church and the Army, forms a
triple base which must be supported to regain the Glory of Mother
Russia as a Great Power. Expenditure on science, it is said in papers
like "Rossiyisskaya Gazeta", not to mention the
nationalistic press such as "Zavtra", is essential in order
that the people can once again be proud of Russia. The former, for
example, is currently running a campaign for Russia to fund a new
space shuttle which will "bring back to Russia a new exploration
vehicle for the 21st Century. Russia was first into space and with
this project will regain its rightful place as the world's leading power
in the Cosmos". The paper appeals to ordinary listeners, who,
poor deluded fools, are urged to send the paper their savings to fund
the project which "the Government and the Fat Cats are too
unpatriotic and selfish to support."
In truth, Soviet and present Russian science has done little
of note or value except to serve the military. From many sides, not
surprisingly including the Academy of Sciences, come pleas to support
fundamental science, which is seen as the Glory of Mother Russia as
well as its backbone for the future. Fundamental science has been
little more than a cloak for long range brain storming and thinking
about advanced weaponry. Otherwise it has provided internal relief
for academics to write papers whose main value has been publication
in learned journals. Association with current scientists is
depressing; they seem never to have identified or solved important
practical questions. They have been isolated from the world's
literature for decades; this, coupled with a lifetime of subjection
to propaganda concerning the uniqueness and superiority of Soviet
science, leads many of them to claim advances and inventions that
"have no analogy in the world".
This would be no worse than in other countries were it not for
the absence of the application of good science in the practice of
medicine, engineering and agriculture.
The current regime seems quite oblivious to the idea of
re-training and redirecting its theoretically orientated people to
collaborating with people on the ground, solving their real problems
and helping to improve the national economy. Such a policy is treated
with contempt in every layer of society. No one is suggesting that it
is necessary to commercialize all science, but only a sensible
balance between targeted R&D and curiosity led investigations
which may or may not yield something useful in the future. One is
driven to conclude that there will be no change of heart in this
sector either; 'science' will continue to demand financial support
from the State and return very little. It remains a prestige area and
an essential in the minds of the rulers and others for the
development of Russia as a formidable Power deploying a frightening
array of weapons superior to the rest of the world.
Foreign sales of
Russian arms
Arms exports are handled by a Government firm
'Rosvooruzheniye'. Its provenance is interesting. In Soviet times
arms exports were handled by the enigmatically named engineering
directorate of the Ministry of External Trade. After the fall of the
USSR this became 'Oboronexport' (defence exports) and the 'Special
Technical Directorate' of Spetsvneshtekhnika (special technical
exports). These organisations became 'Rosvor'. Rosvor's reporting
authority has varied between ministries and the President himself. It
served a wide range of powerful interests. Rosvor is almost a
monopoly. It is 100% state owned but the arms contractors are
represented. It has some subsidiary firms; one 'Promexport' deals
with spare parts and service, 'Russian Technology' with licensing of
intellectual property. 'Rosvor' answers through the coordinating
inter-departmental council whose head was in 1997 Prime Minister
Chernomyrdin and his deputy Ya Urinson. Managerial changes will
continue.
94% of legal arms exports are reported to pass though its hands;
another nine arms manufacturers are entitled to trade abroad on their
own account. 'Rosvor', as it ia sometimes described, conveniently
means Russian thief. It is often accused of doing just that, taking
the proceeds, paying its huge bureaucracy, including serving military
officers salaries ten times those paid in the arms factories and
R&D offices. Rosvor is credited with paying meticulously its
taxes to the Federal Government, thus keeping the top people sweet.
Factory directors complain that they get only a small fraction of the
proceeds and then very late. Many of them want to bypass Rosvor and
some get that authority.
Heads of Rosvor can enrich themselves in anticipation of the
sack. Kotelkin, who came from running the MAPO Bank, was appointed in
1994 and was sacked in summer 1997 two days after Yel'tsin had
praised him and Rosvor. He had conveniently transferred to a new firm
'Kargotrans' all the assets and business of Rosvor's transportation
business. Its director is Yeremichev, Kotelkin's former deputy. It is
reported that large sums in dollars have gone to Cyprus.
The Government is relying on foreign arms sales to finance the
MIC, to keep it going at its soviet level in the hope of reconstituting
the whole soviet MIC by agreements within the CIS. In this way they
believe they will be able to rearm the Russian Armed Forces and
probably those of Belarus, Ukraine and other CIS states. There has
been a recent agreement for the Ukrainian and Russian MIC to
cooperate in making and selling in the first instance the large
transport plane from Antonov.
Analysis of the Russian arms exports however provides little
financial basis for optimism. Stripped of elements of sale for barter
to third world and other countries such as China, central and Eastern
Europe as well as arms provided to some of them in order to
extinguish old soviet debts only around $2m/annum is left as a
maximum in cash terms. There is no way that such a sum will support
the still vast MIC reported above, even if the whole revenue actually
reached the factories and is spent correctly.
The largest buyers of Russian arms are the Chinese, with whom
Russia is clearly embarked upon a program of military enlargement.
Professor Stephen Blank of the US Strategic Studies Institute
provides a list in Appendix 1 of his paper "The dynamics of
Russian weapon sales to China". These purchases, covering air,
sea and land systems as well as missiles, amount to well over $6Bn
over the last few years. The agreements give the Chinese the right to
develop and make some weapons; there are also collaborative
development programs, for example in aero engines. This trade may
well grow in the short term but must sooner or later provide
diminishing financial returns to Russia. Not all of the weapons
supplied have come from the factories, some, such as warships, come
from existing kit transferred from the Armed Forces. India is also
buying a similar range of equipment. The Russians have recently
improved their after sales service, providing depots for technician
training, spare parts and manuals in English. Other major targets for
Russian arms sales include Malaysia and Indonesia, but much of the
purchase price is paid in goods such as food. This barter trade is
according to a Russian Finance Minister only "30% efficient in
providing real money". The value of return to the factories from
all this much heralded trade has to be heavily discounted, especially
after deducting the shares taken by the trading companies such as
Rosvooruzheniye and the State in taxes.
This region is the main buyer of arms; other countries
represent a static or diminishing pattern of purchases. Russian arms
are less attractive to them than those of the West. China itself may
soon itself be another competitor to Russia. Some modest income might
be generated to the defense industries of the CIS from improved
collaboration with NATO and the partner countries. In the meantime
the finances of the MIC continue to be unpromising.
Armenia, Belarus,
Kazakhstan, Kirghizia, Russia and Tajikistan�
Being exclusively defensive, the Treaty
serves as a basis for creating similar regional structures, within
the framework of common collective security, in the East-European
(Russia-Belarus), Caucasian (Russia-Armenia) and Central Asian
(Russia, Kazakhstan, Kyrgyzstan and Tajikistan) directions with
ensuring their compatibility and cooperation.
The collective rapid deployment forces,
which have been formed by Russia, Kazakhstan, Kyrgyzstan and
Tajikistan, have already proved their ability to function and become
an appreciable factor in ensuring stability in the Central Asian
region. The ten-year history of the Treaty shows that it is necessary
for ensuring the security of its members. Speaking at the session of
the Council of Foreign and Defence Ministers, Russian Minister of
Foreign Affairs Igor Ivanov underscored that in questions of
regulating its relations with NATO, Russia intended to uphold also
the interests of its partners in the Collective Security Treaty.
As RIA Novosti was told by the Treaty's
Secretary General Valery Nikolayenko, the Treaty will become an
organisation "which would adequately and automatically react to
new challenges and threats of our time, which is the goal of Russian
President Vladimir Putin."
UKRAINE��� Military-Industrial Complex
At present, the military-industrial complex of Ukraine is the
most advanced and developed branch of the state's sector of economy.
It includes about 85 scientific organizations which are specialized
in the development of armaments and military equipment for different
usage. The air and space complex consists of 18 design bureaus and 64
enterprises.
In order to design and build ships and armaments for the
Ukrainian Navy, 15 research and development institutes, 40 design
bureaus and 67 plants have been brought together. This complex is
tasked to design heavy cruisers, build missile cruisers and big
antisubmarine warfare (ASW) cruisers, develop small ASW ships.
Rocketry and missilery equipment, rockets, missiles,
projectiles, and other munitions are designed and made at 6 design
bureaus and 28 plants.
Ukraine has certain scientific, technical and industrial basis
for the indigenous research, development and production of small
arms. A number of scientific-industrial corporations have started
R&D and production of small arms.�
The armor equipment is designed and manufactured at 3 design
bureaus and 27 plants.
The scientific and industrial potential of Ukraine makes it
possible to create and produce modern technical means of military
communications and automated control systems at 2 scientific-research
institutes and 13 plants.
2 scientific-research institutes and 53 plants produce power
supply batteries; 3 scientific-research institutes and 6 plants manufacture
intelligence and radio-electronic warfare equipment; 4 design bureaus
and 27 plants make engineer equipment and materiel.
The existing structure of the military-industrial complex of
Ukraine does not provide for the enclosed cycle of nomenclature of
weapons and military equipment for the Armed Forces. Thus, the aim of
military-technical cooperation is to create a cooperative system
within Ukraine and at international level to meet the needs of
industry in accessory parts and components, power supply batteries,
cells, materials etc.
������������������� The turbulent transformations that have been shaking Russia in the last ten years have produced a few winners and many losers.� Probably no other part of the Russian economy and society suffered more casualties than its former pride-the military-industrial complex (MIC). Having entered Gorbachev's perestroika at the height of its might and privilege, it now finds itself disgraced, isolated, underfinanced and shrinking beyond recognition. The optimistic plans for conversion of the Russian MIC have degenerated into a combination of incompetent government policies and largely unsuccessful and desperate self-help efforts of the military producers themselves. Many experts both inside and outside of the Russian MIC see the disintegration of its structures as a major threat to national and international security.
���� In its short but dramatic history, military conversion in the USSR/Russia went through several stages. The years of 1987 to 1991 were a period of "limited" conversion conducted according to the central plan (National Conversion Program). In 1992 the emphasis switched to market reforms with special hopes put on foreign investment in the Russian MIC. But investments never came and the introduction of the market only showed that most parts of the MIC have too little to offer to secure their own survival. This led to the novel concept of "export-oriented conversion" (sell more weapons abroad to finance conversion at home). But the ambitious goal of $10 billion annual revenue from arms exports never came close to being realized. Between 1987 and 1993 the volume of exports plummeted 90%, from a value of about $22 billion in 1987 to just $2 billion in 1993. With the failure of this last hope, most military enterprises came back to continued privatization and marketization as the realistic answer.
New Trends, New problems
���� According to the State Committee on Defense Industries, total production in military industries declined 42% during the first
half of 1994. The aviation industry was the most affected, with a slump of 49%. Military employment decreased by 16% from May 1993 to May 1994, while hidden unemployment grew to between 30% and 50%. The average annual salary in 1994 was almost a third less than the average for manufacturing.
���� The quality and technological potential of the MIC is decreasing rapidly. Some enterprises have already lost their former
high-tech capability and cannot even produce spare parts for existing weapons.
���� There are several cases of successful conversion to civilian production in a number of enterprises, such as the production of
satellite communication TV equipment at several enterprises of the military aerospace complex and the development of advanced
diagnostic equipment at the nuclear research facilities in the Ural area. On the whole, though, output in the civilian sector of the
military complex had the same rate of decline as the military sector.
���� The adjustment of military enterprises to market demand is proceeding in the following limited fashion:
���� (1) The first effective owners of military enterprises have started to appear. Though these people still do not fully own their
enterprises, they feel and behave like real owners who have full responsibility for them. This new attitude has led in some cases to higher management efficiency through organizational restructuring, personnel cuts, layoffs, salary adjustments and conversion. Yet according to our estimates, such effective owners do not exceed 10 to 20% of the total. Our respondents believe that most of the directors even of already privatized factories in the military sector still have the mentality of state managers, expecting the
state to provide them with normal working conditions.
���� (2) The government is no longer in control of the day-to-day operations of the MIC, but it is still inserting plenty of
administrative prohibitions and obstacles in the way of privatization. On the other hand, state arrears for military orders
are causing inventories to back up at the factory and making civilian customers look good by comparison.
�����(3) A "Soviet style" view of the MIC and conversion still predominates. In this view, since the best labor force is
concentrated in military industries, the government must continue to organize, support and subsidize these enterprises. Conversion from military to civilian production is at best an inevitable evil.
���� A minority of our respondents support the path of minimizing military production and moving the best technological and human resources of the military complex into producing civilian goods. They admit that this path faces numerous difficulties, including competition and the necessity to deal with consumers' demand and the high interest rates which military factories as well as other businesses have to pay to the banks. Yet in general, the enterprises that are transferring assets to the production of
civilian goods are financially better off than those who remain devoted to military production but are not paid for it.
���� Despite this fact, even active "conversionists" are trying to keep their state military orders. Here is one explanation: "I
believe the time will come when military orders will again become profitable. That is why we shouldn't give up the state order today. Nobody will bring it back to us tomorrow, everyone will compete for it. It's better to cover expenses by profits from any civilian contract, but to keep the military order."
Government & the MIC
���� Most respondents agreed that government agencies lack a purposeful policy toward the MIC and instead are working hard to
initiate activity and thus to justify the existence of numerous new bureaucratic structures. They also strongly criticized the Yeltsin
Administration's financial stabilization efforts, especially the anti-inflation measures. They considered this policy to be the main
reason why the MIC of Russia is falling apart: "We probably put our priorities wrong by emphasizing inflation as the number one
problem. Manufacturing is paralyzed."
���� What upsets these respondents most is that the government is failing to analyze the competitiveness of individual enterprises
and to choose which are worth supporting through investment. Instead, the Government gives state orders to all the enterprises
and then fails to finance
these orders in a timely manner.
Ukraine and
the evolving security system
The European security
system is undergoing dynamic changes. Its key participants � the UN,
OSCE, NATO and the EU � are adapting to the new realities. There is
no clarity with respect to the future role of Russia, which will
continue to exert substantial influence on the process of forming and
maintaining security on the continent.
Ukraine has three main
options for building its future security � jointly with the West,
whose security is guaranteed by NATO; jointly with the CIS Collective
Security Organisation (that is, with Russia); or by remaining a
non-aligned (neutral) state. These main options have their adherents and
opponents, in line with their perception of Ukraine�s interests in
the security domain. This article presents an assessment of the
mentioned options.
Which organisation should take the lead in
maintaining regional security in Europe?
At present, NATO is the
most effective military-political organisation within the European
security system. Because it has preserved the military-political
capacity accumulated during the Cold War and flexibly adapted to new
conditions, NATO, when compared with the UN, OSCE and the EU, appears
to be the only regional security institution that, according to the
experts of George C.Marshall European Centre for Security Studies,
�can effectively operate in all four rings of security� � individual
security, collective security, collective defense and promoting
stability.
In the near future (over
the next 5-10 years) NATO will retain its lead role in maintaining
regional stability in Europe. This conclusion is based on the U.S.
readiness to invest significant funds into the defence sector and
maintain close ties with Europe, regardless of anything, and the
process of the Alliance enlargement. The approach of NATO to the
borders of Ukraine as a result of the Alliance�s enlargement will
promote European security.
At the same time, the end
of the Cold War and the trend towards greater interdependence of the
European countries have objectively led to a decrease in the
attention to the military. Although one cannot entirely rule out a
possibility of a war in Europe, the present situation in the security
domain is characterized by significant reduction of the probability
of a large-scale military conflict. The continent is witnessing a
shift in emphasis after the events of 11 September, 2001, from
primarily military to law-enforcement and peacekeeping, i.e., a
gradual �crossover� of the lead role and predominant influence in the
field of regional security from the �military-political� NATO to the
�anti-crisis� EU.
In the middle and long run,
the system of European security will undergo more significant
reformation. The contours of this future system (sometimes called
�Co-operative Security System�) will be determined not by the
positions and capabilities of the alliances like NATO and the EU,
which is the case now, but by the positions and capabilities of
politico-economic centres � the USA and a united Europe, and possibly
also Russia, in the event of its substantial progress in the
direction of market reform and democracy building. Most probably,
NATO will play the key role in formation of the future regional
security system in Europe.
The chances of Ukraine joining NATO
Ukraine�s accession to NATO
in the near future seems unrealistic. This is not a matter of
Ukraine�s intentions but of its ability to ensure compliance with
NATO membership criteria, and the real economic capabilities of the
state. If one compares the potential of Ukraine with that of the new
NATO members (the Czech Republic, Hungary and Poland), with roughly
equal indicators of aggregate territory, population and armed forces
strength, Ukraine�s lag by GDP level and defense expenditures is
disastrous (Table �Ratio of the general strategic indicators between
Ukraine and the new members of NATO�). At that, one should remember
that the new members of the Alliance are consistently criticized
regarding their compliance with NATO standards, in particular, for
insufficient defense expenditures.
Furthermore, there is the
factor of Russia, which, despite its rapprochement with NATO,
continues to maintain a negative attitude towards the Alliance�s
expansion. Russia�s positions in its dialogue with NATO are rather
strong, as it is a nuclear power, a key participant of arms control
regimes and a major supplier of energy resources to Europe. Formally,
the level of Ukraine�s co-operation with NATO far exceeds the level
of military co-operation with Russia � among Ukraine�s last year�s
gains observers mention nearly 600 joint events with NATO, against 52
Ukraine-Russia military co-operation events.
Meanwhile, in contrast to
its relations with NATO, Ukraine maintains close military-technical
co-operation with Russia. Ukraine is also strongly dependent on
Russia in the energy and political spheres. Generally speaking, at
present Russia is gradually consolidating its political and economic
positions in Ukraine and diligently working for the extension of the
term of stationing for Russia�s Black Sea Fleet in the Crimea, which
does not improve Ukraine�s chances of joining NATO either.
It may be assumed that
Ukraine�s accession to NATO is theoretically possible in 10-15 years.
However, by that time, the Alliance itself will most probably have
acquired a new substance, and entry criteria may also have changed
significantly. Hence, it would be more correct to assess the prospects
of Ukraine�s approach to Euro-Atlantic structures in general, or to
the new European security system in general. The most rational
position of Ukraine with respect to NATO entry might be formulated as
maximum proximity in the absence of formal accession.
The chances of Ukraine joining the CIS Collective
Security Organization (the Tashkent Treaty)
For Ukraine, there is no
point in joining the Tashkent Treaty. It will not offer anything
beyond the present level of co-operation with CIS countries and Russia,
but will significantly strengthen political dependence on the latter.
In fact, the CIS Collective
Security Organization is only formally a military alliance, since
real co-operation within its borders centers not around common goals,
values and commitments but primarily on a bilateral basis:
Russia-Belarus, Russia-Armenia, Russia-Central Asia (and is shaped,
first and foremost, by individual factors of the Treaty members�
dependence on Russia).
Furthermore, the prospects
of the Tashkent Treaty itself will most probably be affected by the
presence of a U.S. military contingent in Central Asia (Uzbekistan,
Tajikistan and Kirgizstan) used for fighting the centers of terrorism
in Afghanistan. This factor weakens the role of the Treaty in the
maintenance of security and stability in Central Asia and prompts
some member states (Kirgizstan and Tajikistan) to take independent
decisions without formal consultations with Russia and other members
of the Organisation (as required by the Treaty).
Therefore, Ukraine�s
accession to the Tashkent Treaty is inexpedient � it already has
extensive bilateral relations with Russia in the defence sector, and
accession to the Treaty will not give Ukraine�s security anything
really new, with the exception of negative political consequences.
The prospects for non-aligned status
Ukraine will probably
remain a non-aligned country for at least the next 10-15 years, until
the contours of a new European security system are formed.
Joining NATO would
correspond to the interests of our state but we are not ready for
accession. Meanwhile, accession to the Tashkent Treaty or the Union
of Russia and Belarus is possible but does not meet Ukraine�s
interests.
Ukraine�s non-aligned
status looks logical if one considers its specific geopolitical
location and the relevant weakness of its foreign policy � Ukraine is
trying to maintain friendly relations with both the West and the East
simultaneously, even in the face of contradictions between them.
What�s more, Ukraine�s populace is most supportive of formal
neutrality.
Given the absence of a
direct large-scale military threat, it may be stated that in the long
run, Ukraine�s security depends not so much on its membership in
military alliances as on the effectiveness of economic and democratic
reforms domestically. And the declared course of integration with EU
may automatically strengthen guarantees for Ukraine�s security in the
event of its official recognition as a candidate for EU membership
(as is the case with, say, the Baltic states) and Ukraine�s active
participation in the EU Common European Security and Defence Policy.
Conclusions
NATO, relying on U.S.
potential, will play the lead role in maintaining regional security
in Europe for the near future. The most rational position of Ukraine
with respect to NATO entry might be formulated as maximum proximity
in the absence of formal accession.
The Tashkent Treaty is only
formally a military alliance. Possible accession to the Treaty will
not strengthen Ukraine�s security, but can lead to negative political
consequences. Ukraine�s accession to the Tashkent Treaty is
inexpedient.
The process of NATO
enlargement and transformation will proceed in parallel with EU
enlargement and a gradual transfer of the separate tasks of conflict
prevention and crisis management to EU security institutions. Those
processes will gradually lead to the establishment of a new regional
security system � �Co-operative Security System� that should be
joined by Ukraine.
To ensure its security for
the time being, Ukraine should, within the framework of its present
non-aligned status, significantly enhance the effectiveness of
economic and democratic reforms domestically, attain the formal
status of a candidate for EU membership and develop the closest
possible co-operation with the EU in the security domain.
RUSSIA REASSERTS
SUPERIORITY OVER THE CIS IN THE WAKE OF NATO SUMMIT IN PRAGUE
Russian
President Vladimir Putin's relatively friendly tone in the wake of
the NATO summit in Prague may be concealing Russia's hopes for
strengthening its position in the CIS region. While Moscow has
acquiesced on NATO's enlargement in the Eastern Europe, it now again
expects the West to recognize Ukraine, the Caucasus and Central Asia
as areas of its exclusive strategic interests. Moscow's primary tool
seems to be the revitalization of the defunct Collective Security
Treaty, which it now tries to turn into a true alliance.
BACKGROUND: The
NATO summit in Prague sent mixed signals to the alliance's partners
in the CIS. On the one hand, a special session in Prague was
dedicated to praising the efforts of Uzbekistan and Kazakhstan in
their fight against terrorism. Uzbek President Islam Karimov was
particularly outspoken during the meeting, emphasising that his
country needed NATO for protection and that it would be seeking even
closer cooperation with the Alliance in the future. On the other
hand, NATO seems to be increasingly giving consideration to Russia's
view of the CIS. The summit has thus raised difficult questions about
the extent to which NATO is committed to developing its security ties
with the post-Soviet states in the face of Russia's growing
opposition to the Western influence in the region. It appears that
the current wave of enlargement has made Russia ever so determined to
dilute and undermine NATO's presence in the CIS.
In
the wake of the Kremlin's decision earlier this year not to oppose
NATO enlargement, many in Moscow called for a 'damage limitation
strategy'. Tighter military integration in the 'near abroad' is seen
as a key element of this strategy. The most noteworthy development in
this respect has been the decision taken in Moscow on May 14, 2002,
to transform the defunct Tashkent treaty organisation into a
military-political alliance similar in structure and functions to
NATO. The Russian General Staff views the new block, the Collective
Security Treaty Organisation (CSTO), as a countermeasure to the
West's continuing penetration of the Caucasus and Central Asia.
Within the CSTO framework, it is pushing for an upgrade of the joint
rapid deployment force established in 2001, the unification of the
military training procedures on the basis of Russian army colleges, a
common arms procurement policy, and integration of the national
military-industrial complexes.
IMPLICATIONS: Russia
has toned down its objections to NATO, yet this may represent a
tactical shift in its position or, as the Russian Foreign Minister
Igor Ivanov puts it, 'an increase in the possibility of a manoeuvre'
by 'seeking allies not for a lifetime but for a specific interest'.
The congruity of interests between Russia and NATO surely does not
extend into the post-Soviet space, where Russia is steadily becoming
more assertive. It is actively seeking to reinforce its positions in
the region, by the means of new military basing rights, a growing
intelligence presence, and control over the energy, transport and
telecommunications sectors of former Soviet republics.
Any
prospect for NATO's increased influence in the CIS fuels Moscow's
sense of insecurity. The Russian defence establishment is largely
unreconstructed and its threat perceptions have not changed in spite
of Putin's more pragmatic stance towards the West. Many regard NATO
as a direct threat and an instrument of U.S. influence in Europe.
These beliefs are perpetuated by the Soviet-style system of military
education and operational planning. The defence think-tanks which
formulate military doctrine, the General Staff Academy and the Centre
for Military-Strategic Research, are notorious for their hard-line
stance on the West and the 'near abroad'. It therefore comes as no
surprise that Russian strategic planners continue to press for a firm
hand in dealing with those in the CIS who militarily want to move closer
to NATO.
Seen
in this context, the newly established CSTO has a special role to
play in Russia's attempts to strategically isolate those post-Soviet
states which gravitate towards the West. CSTO will also allow the
Kremlin to consolidate its control over the defence policies of
states like Kazakhstan which, unlike Georgia or Uzbekistan, seek to
balance between Russia and NATO. Under the new economic cooperation
scheme, the Russian military-industrial complex gains privileged
access to the former Soviet defence industry assets in Central Asia.
Kyrgyzstan's participation in the new defence block is a signal to
the U.S. that its forces can remain in the region only until the
anti-terrorism campaign is over. This view was affirmed by Vladimir
Rushailo, Secretary of the Russian Security Council, who said
recently that Moscow wanted a firm deadline for the withdrawal of
Western troops from Central Asia. The Russian military reasons that
the CSTO arrangements will make it easier for Moscow to deploy armed
forces against Islamic militant groups and exploit intelligence
assets in the CIS, while keeping Americans and Europeans at bay. And,
of course, the Kremlin expects the new defence block do deliver in
terms of strengthening Russia's negotiation position vis-�-vis NATO.
CONCLUSIONS: There
may be a connection between Putin's friendlier tone in the wake of
NATO summit in Prague and Russia's continuing quest for asserting its
strategic superiority in the CIS area. While Moscow has acquiesced on
the Alliance's current wave of enlargement, it at the same time
expects the West to recognize that Ukraine, the Caucasus and the
Central Asian states fall within Russia's exclusive sphere of
influence. Many in its security apparatus, including the chief of the
General Staff, General Aleksei Kvashnin, complain in private that
President Putin's role in the anti-terrorist coalition serves the
interests of those in Washington who seek to strategically encircle
Russia. A group of influential ex-army officers recently claimed in a
letter to the president that his "indecisiveness" in the
face of the growing U.S. military presence in Central Asia amounted
to "a policy of licking the boots of the West".
Moscow-based analyst Lilia Shevtsova argues that such views point to
Putin's failure or unwillingness to build a national consensus on key
foreign policy issues. It remains clear that the Russian heavy
military and intelligence presence in Caucasus and Central Asia gives
Moscow a worrying capacity to derail cooperation projects between
NATO and the CIS states.
RUSSIA MOVES TO REASSERT INFLUENCE IN
CENTRAL ASIA, CAUCASUS
After concentrating in
early 2002 on fostering strategic ties with the United States and
European Union, Russia is retrenching in Central Eurasia, moving
vigorously in recent months to bolster its influence over other CIS
countries. Political analysts say the Kremlin is skillfully advancing
its agenda by utilizing Bush administration foreign policy rhetoric
with its emphasis on the anti-terrorism campaign and the right of preemptive
action.
The motivation for Russia�s
shift in geopolitical priorities is a desire to develop reliable
partners. In the immediate aftermath of the September 11 terrorist
attacks, Russian President Vladimir Putin focused on enhancing
Moscow�s relationship with Washington. But Putin�s strategic
initiatives have been hampered by decades of mutual mistrust between
the erstwhile Cold War enemies, as well as by economic competition
connected with the development of Caspian Basin energy resources.
Over the past year, Russia
has concluded strategic partnership agreements with the United
States, EU members and other countries. Nevertheless Russia has no
real and reliable strategic partners, prompting some to express
concern about geopolitical isolation, some analysts say.
"There is no country
or even a group of countries or an international institution that can
or would want to give Russia some guarantees that its security,
territorial integrity or at least its economic interests will be
respected," writes the regional analyst Iskander Khisamov in the
journal Ekspert.
"Thus, no mater how
weak or disintegrated the Commonwealth of Independent States might
be," Khisamov continued, "it remains Russia�s main
strategic priority � more important than America, Europe or China and
India."
As the recent agreement to
establish a Russian air base in Kyrgyzstan underscores, Moscow is now
keen to demonstrate that it remains a dominate regional power in
Central Asia. Khisamov, the political analyst, said the Russian base
is meant to show that Moscow "is the true master of the
post-Soviet space." The basing agreement also is indicative that
Putin may be less accommodating in his dealings with the United
States in 2003. Putin himself said in November that the era of
Russian geopolitical concessions � which began with the 1991 Soviet
collapse and continued through the post-September 11 appearance of US
military bases in Central Asia � was coming to an end.
"Russia has ceded so
much over the last decade that further �giving away� is simply out of
the question," Putin said November 27 in comments broadcast by
Ekho Moscvy radio. "[Instead of �giving away�] we will �take� �
but [only] within the framework of agreements and international
accords."
Russia�s participation in
the US-led anti-terrorism campaign prompted Russian nationalists to
severely criticize Putin�s foreign policy. The new policy emphasis
has generally mollified Putin�s nationalist critics.
Ironically, it is under the
anti-terrorism campaign�s aegis that Moscow is pursuing its current
policy goals. Earlier this year, many Russian pundits were critical
of what they characterized as US imperial behavior. Now, however,
Russia is effectively mimicking the United States in seeking to
project influence in Central Asia. "Our elite who only recently
was enraged by the American arrogance, is now going out of its way to
emulate Washington," writes political scientist Liliya Shevtsova
of the Carnegie Endowment for International Peace in her commentary
published in the Moskovskie Novosti weekly.
There is a dramatic
difference, however, between Moscow�s moves and Washington�s: while
the United States is unquestionably a global force, Russia is
struggling to shore up its regional power status. "The actual
policy of our country in the post-Soviet space in the outgoing year
has become a small replica of America�s behavior in the global
arena," political commentator Tatiana Rublyova wrote in the
Nezavisimaya Gazeta newspaper.
Being a pragmatist, Putin
seems to be fully aware of the difference between US and Russian
strategic capabilities, and is content to skillfully play a
"weak hand." In addition to the America-led global
coalition against terror, of which Russia is an important but far
from a leading participant, Putin is diligently building his own
mini-coalition on the basis of the Collective Security Treaty (CST),
of which Moscow is the indisputable leader.
Using the anti-terrorism
struggle as a catch phrase, Russia is pushing to create a
full-fledged regional military bloc that can help Moscow strengthen
its grip over post-Soviet Eurasia.�
Viktor Ilyin, philosophy
professor at Moscow Technical University, called on Russia to develop
its own version of the Monroe Doctrine. "The exclusive right of
control over the former fragments of the [Russian] empire and support
of the friendly regional regimes there is the prerogative of Russia,
which strives to reintegrate the [former Soviet] Union space under
its leadership," Ilyin wrote.
In the same vein, the
post-Soviet countries are now being increasingly portrayed in Moscow
as underdeveloped and in need of Russian protection. The historian
Vladlen Sirotkin, a specialist in French history, recently compared
poorer CIS states to the former French colonies in Africa. He went on
to suggest in a recent analysis published in the Literaturnaya Gazeta
weekly that Putin should emulate the policy approaches that Paris
took in the 1960s towards Africa. "France has completely
restored control over its �African CIS,�" Sirotkin said. "It
has retained its old military bases; it controls the local economy
and trade."
There appears to be a
growing belief in Moscow that such a neo-imperial policy in the
post-Soviet space can succeed. Analysts mention such positive factors
as geographic proximity, economic and political dependence of the
post-Soviet nations on Russia and Moscow�s potential to exploit the
internal political difficulties of some CIS leaders, such as Kyrgyz
President Askar Akayev. Also important, Tatiana Rublyova points out,
"in contrast to America, Russia possesses the historical
experience of keeping these nations within its sphere of
influence."
A Russian Rapid Reaction Force?
The Collective Forces of
Quick Deployment (CFQD) of the Collective Security Treaty have been
carrying out joint military exercises. The main goal of these
exercises is the improve the CFQD to combat international extremist
groups. It is assumed that the collective troops will become the
force that will enable the member-states of the Collective Security
Treaty to repulse the attacks of Islamic extremists on Central Asian
territory, and possibly, the Afghan Taliban movement.
On Oct 11, the presidents
of Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Belarus and Armenia
met in the Kyrgyz capital Bishkek to discuss measures to boost
security in the volatile Central Asian region.
They signed an agreement on
the Collective Security military forces, to be assembled in case of
need by member states. The forces are to be used to combat outside
aggression, to carry out "anti-terrorist" operations, or to
be involved in military maneuvers. The forces' expected numerical
strength was not revealed.
Fourth Pillar?
If there are
three pillars comprised of N. America, EU and CIS should we look to
other regions, and could there be a �Fourth Pillar�?
Looking at the
globe there is two likely candidates depending on future
developments.
South America,
led by Brazil and Mercosur could form a fourth region with its two
aircraft carrier groups.
India makes up
most of the Subcontinent, has a democracy, nuclear technology and
large population.
Industrial
Consolidation
The US
aerospace sector in the 1990s saw many companies consolidate,
scrambling to make their way in the post-Cold War era. Boeing, the
largest aerospace company in the world, got that way by acquiring a
slew of operations, including Rockwell International's aerospace and
defense operations (1995) and most importantly, McDonnell Douglas in
a $16 billion deal (1997). Lockheed, the world's #2, merged with
Martin Marietta (1995) and acquired Loral (1997). These US companies
had it relatively easy -- they all paid taxes to Uncle Sam, but
acquisition deals in Europe were stymied by concerns over national
security and privatization because much of Europe's defense industry
was government-owned.
Spurred into
action by their US rivals, in 1997 DASA and British Aerospace (now
BAE SYSTEMS) -- partners in Airbus -- began merger talks. Fearful of
being left out in the cold, France's government-owned Aerospatiale --
another Airbus partner -- began talks to merge with Matra, a French
defense company controlled by Lagard�re. Weeks after the
Aerospatiale-Matra deal was announced in 1998, the chairman of DASA's
parent company, J�rgen Schrempp, met with Lagard�re's CEO, Jean-Luc
Lagard�re and proposed a three-way deal. It never occurred and in
1999 the BAE SYSTEMS and DASA deal fell through as well.
Later that year
Schrempp and Lagard�re met again and laid the groundwork for a merger
between DASA and Aerospatiale Matra. Less than three weeks after the
Aerospatiale-Matra merger was completed, Lagard�re found himself
pitching the DASA/Aerospatiale Matra merger idea to a stunned French
government (which still held a 48% stake in Aerospatiale Matra).
Marathon negotiations ensued. Late in the year Spain's Construcciones
Aeron�uticas SA (CASA) agreed to become part of EADS.
In 2000 Airbus
announced that it would abandon its consortium structure in favor of
incorporation -- as Airbus Integrated Company (AIC) -- and EADS went
public.
Airbus, which
accounts for about 75% of EADS's sales, and its new super-jumbo A3XX
are key to EADS's success. With the A3XX, Airbus hopes to wrest
customers away from Boeing, which has enjoyed a monopoly on jumbo
jets and is Airbus' only competition in long-range passenger aircraft.
Scheduled to be flying as early as 2005, the A3XX will carry up to
600 people in a double-decker configuration.
In June 2000,
the Airbus partners announced the formation of an Airbus Integrated
Company (AIC), which will operate under EADS management. At the same
time, with the "Authorization to Offer" the starting signal
was given for the market launch of the A3XX megaliner. The A3XX
family is planned to be larger than the largest existing commercial
passenger aircraft, with a wingspan of 79.8 m and a large-diameter
fuselage divided into three decks along the entire aircraft (two full
passenger decks and a cargo deck). The A3XX is expected to be the
first commercial aircraft featuring four aisles (two on each deck)
and a double staircase. Several versions are currently proposed. The
first version, designated the A3XX-100, will seat approximately 550
passengers in three classes and offer a long-haul range of 14,500 km
to 16,200 km (7,650 nm to 8,750 nm), providing links between major
hubs in Europe, North America and Asia, or between hubs within Asia.
A second aircraft, the A3XX-200, will be a stretched 650-seat
version. Other derivatives are being examined, including a smaller
version, the A3XX-50, a freighter and a convertible passenger/freighter.
Like much of
the economy, the aerospace and defense industry was struggling to
maintain profitability even before September 11. Needless to say, the
terrorist attacks have had a profound affect on the aerospace and
defense industry, accelerating some trends, while reversing others.
The ramifications will differ for each of the three basic industry
segments: defense, commercial aircraft, and space.
The defense
market accounted for about 50% of the aerospace and defense
industry's sales in 2000, but that figure is expected to grow as a
result of the war on terrorism. For example, President Bush's newest
proposal for the US Department of Defense's budget calls for a
spending increase of about 15%. The world's overall defense spending
will also increase. Obviously, this trend will bode well for the
large companies that dominate the market.
The large got
larger throughout the 1990s in the defense market and that trend
continued into the new century. In all, defense companies spent $30
billion on mergers and acquisitions in 2001, with Northrop Grumman�s
purchase of both Litton Industries and Northrop Grumman Shipbuilding
being the most prominent of the deals.
In 2001
Lockheed beat out Boeing for the $200 billion contract to build the
Joint Strike Fighter, the largest defense contract ever. The
contract, which is spread out over almost 30 years, may well mark the
last one for a manned fighter as the success of the unmanned drones
(as evidenced in Afghanistan with the use of General Atomics' Predator)
is expected to continue, supplanting the need for the more expensive
manned jets and making it unnecessary to risk pilots' lives in
combat.
September 11
dealt a devastating blow to a commercial aircraft market that was
already reeling from a market slowdown. That market, which accounted
for just over 40% of aerospace and defense industry spending, is
divided into four segments: large commercial aircraft (planes of 100
seats and more); maintenance, repair, and overhaul (MRO); jet
engines; and business and regional aircraft (less than 100 seats). In
2001 Boeing and Airbus, the world's only two large commercial
aircraft makers, saw orders plummet by 45% and 28%, respectively.
While Airbus has drawn even and then surpassed Boeing in orders,
deliveries for 2002 are expected to drop 25% from 2001. As a result
of the drastic fall-off in business, Boeing has announced plans to
cut about 30,000 jobs or roughly 30% of its commercial aircraft
workforce.
The MRO and jet
engines markets have also suffered; GE Aircraft Engines, UTC
Aerospace, and Rolls-Royce are the three largest. The outlook for the
business and regional aircraft market is a mixed bag -- while the
regional aircraft market has taken a hit as a result of travel
concerns, the business jet market might not deteriorate as much
because of the perceived safety and convenience of non-commercial
travel. The biggest players in this market are Bombardier,
Gulfstream, and Textron�s Cessna unit.
American
Consolidaton
With a more cautious
approach to troop commitment, the military-industrial complex has
returned to the situation that worried Eisenhower: it doesn't matter
whether weapons are used (or usable), as long as they are bought. The
military budget is, of course, growing rapidly. Two years ago, the
United States spent as much on the military as the next eight
countries combined. Last year, as much as the next 15 combined. This
year, as much as the next 20. Yet it is hard to match the pattern of
spending to the nature of new threats. Consider the F-22 Raptor fighter
plane, which was designed in George H.W. Bush's administration. Each
plane will cost well over $100 million, perhaps twice that much. The
expense is mainly for measures that would allow the aircraft to
penetrate a Soviet air defense system that disappeared more than a
decade ago.
Since the United States has
ended up with so much more imposing a force than any adversary,
perhaps the complex should be thanked rather than criticized? Well,
no, for exactly the reasons that Eisenhower foresaw: "economic,
political, even spiritual." The economic problem is that the
federal government no longer has enough money to throw around without
a plan. The political problem is the distortion of the process of
public choice. Pentagon budget analyst Franklin Chuck Spinney uses
the term "political engineering" to describe the parceling
out of defense subcontracts to the districts of influential members
of Congress. The more senators and representatives are dealt into the
arrangements, the harder it is for them to exercise independent
judgment.
Contractors and Subcontractors
of Selected Major Weapons Systems
(Prime
Contractors Appear in Bold)
|
F/A-18E/F Fighter - Boeing, Northrop,
General Electric
|
|
F-22 Fighter - Lockheed
Martin Corp., Boeing Company, UTC Aerospace
|
|
Joint Strike Fighter - Lockheed Martin Corp.
(Partnered with Northrop Grumman), Boeing Company, UTC Aerospace
|
|
F-15 Fighter � Boeing, UTC
Aerospace
|
|
F-16 Fighter Aircraft - Lockheed Martin Corp., UTC
Aerospace, General Electric
|
|
C-17 Transport Aircraft - Boeing Company, UTC Aerospace
|
|
E-8C Joint STARS Reconnaissance Aircraft - Northrop Grumman Corp.
|
|
V-22 Osprey Aircraft - Boeing, Textron, Allison
|
|
RAH-66 Comanche Helicopter - Boeing Rotocraft, UTC Aerospace, Inc., LHTEC
|
|
AH-64D Apache Longbow Helicopter Upgrade � Boeing
|
|
DDG-51 Destroyer - Bath
Iron Works, Ingalls Shipbuilding
|
|
SSN-21 Seawolf Submarine - General Dynamics Electric Boat Division
|
|
NSSN New Attack Submarine ("Virginia" Class)
- General Dynamics Electric Boat
Division, Northrop Grumman Shipbuilding
|
|
LPD-17 Amphibious Transport Dock - Avondale
Industries, Inc., Bath Iron Works, General Dynamics, Hughes
Aircraft Company, and Intergraph Corp.
|
|
LHD-1 Amphibious Assault Ship - Ingalls
Shipbuilding
|
|
Trident II D-5 Missile - Lockheed Martin Missiles and Space
|
|
Tomahawk Cruise Missile - Raytheon Systems Company, Williams
International
|
|
MILSTAR Communications Satellite � Lockheed
|
|
M1A2 Tank Upgrade - General
Dynamics Land Systems
|
|
Bradley Fighting Vehicle Upgrade - United Defense
|
|
Family of Medium Tactical Vehicles (FMTV) - Stewart & Stevenson
|
|
Crusader Artillery System - United Defense
|
Contrary to initial
expectations, the military-industrial complex did not fade away with
the end of the cold war. It has simply reorganized itself.
As a result of a rash of
military-industry mergers encouraged and subsidized by the Clinton
administration, the "Big Three" weapons makers�Lockheed
Martin, Boeing, and Raytheon�now receive among themselves over $30
billion per year in Pentagon contracts. This represents more than one
out of every four dollars that the Defense Department doles out for
everything from rifles to rockets.
If they get their way, the
new military-industrial behemoths will receive billions more in the
years to come. The Clinton administration�s five-year budget plan for
the Pentagon calls for a 50% increase in weapons procurement, from
$44 billion per year now to over $63 billion per year by 2003. On
issue after issue�from expanding NATO, to deploying the Star Wars
missile defense system, to rolling back restrictions on arms sales to
repressive regimes � the arms industry has launched a concerted
lobbying campaign aimed at increasing military spending and arms
exports. These initiatives are driven by profit and pork barrel
politics, not by an objective assessment of how best to defend the
United States in the post-cold war period.
In order to achieve an
effective, affordable defense, it will be necessary to rein in the
power and profits of the Pentagon and the military contractors. But
before looking at the recent activities of the arms lobby, it is
important to reflect on just how misguided the Pentagon�s current
spending priorities really are.
President Eisenhower�s
warning about the "acquisition of unwarranted influence" by
the military-industrial complex is as relevant today as it was in
1961. Despite the dissolution of the Warsaw Pact and the breakup of
the Soviet Union, the U.S. military budget is higher today than it
was when Eisenhower gave his military-industrial complex speech in
1961. At more than $270 billion per year, the U.S. military budget
(in constant dollars) remains near the peacetime cold war average
that prevailed during the prime period of U.S.-Soviet rivalry, from
roughly 1950 to 1989. This is astonishing considering that Russia has
slashed its weapons procurement budget by 77% since 1991, and that
Russian forces could barely prevail over a rebel army in Chechnya
(inside its own borders), much less project force against neighboring
countries.
Absent a robust Russian
military, where is the threat that justifies spending over a quarter
of a trillion dollars per year on war and preparations for war? The
Pentagon�s answer is simple: there is no longer one powerful
superpower adversary to contend with, but U.S. forces still need to
be equipped to fight two major regional conflicts simultaneously
against "rogue states" like Iraq and North Korea. �And getting hundreds of thousands of
troops to these far-away places requires spending almost as much as
the United States spent during the cold war�or so the Pentagon
claims.
Michael Klare is not alone
in suggesting that the new threats to U.S. security have been greatly
exaggerated. Pentagon budget analyst Franklin Spinney has bluntly
asserted that "the Pentagon�s two war strategy is just a
marketing device to justify a high budget." Merrill McPeak, who
served as Air Force Chief of Staff during and after the 1991 Persian
Gulf War, has also weighed in on this issue:
We should walk away from
the two war strategy. Neither our historical experience nor our
common sense leads us to think we need to do this. We�ve had to fight
three major regional contingencies in the past 45 years�Korea,
Vietnam, and Iraq. One comes along every 15 years or so�two have
never come along simultaneously.
For those who question
whether conflicts like Vietnam or the Gulf War were essential to U.S.
security, McPeak�s estimate of one major conflict every 15 years can
be extended to one every twenty to thirty years. And, as we will
discuss later, the U.S. military budget could be sharply reduced if
our government would take concerted action to prevent conflict. A
preventive strategy would be far cheaper and more effective than the
current approach of marshaling huge, expensive forces to prepare for
contingencies that are unlikely to occur. This point is borne out by
the war in Kosovo, where it has become painfully evident that the
costly application of high tech military force is the wrong tool for
dealing with ethnic conflicts and civil wars. By forcing the
withdrawal of human rights monitors and humanitarian organizations
that had been operating in the province, the NATO bombing campaign
actually made it easier for Serb forces to drive ethnic Albanians out
of Kosovo at gunpoint.
Lawrence Korb, a top
official in the Reagan Pentagon who now serves as the director of
studies at the Council on Foreign Relations, has argued that even if
one accepts the proposition that U.S. forces need to be ready to
fight two major regional conflicts at once, there is still room to
make major cuts in the current Pentagon budget. Korb notes that the
United States currently spends 19 times more on its military forces
than all of the Pentagon�s so-called "rogue states"�Iran,
Iraq, Sudan, Libya, Syria, Cuba, and North Korea�combined. Korb also
asserts that the Pentagon completely discounts the military
capabilities of such key U.S. regional allies as Israel and South
Korea, which would reinforce U.S. military power in a major regional
conflict in the Middle East or Asia. Once we take into account the
relative weakness of the rogue states and the strength of our allies,
Korb suggests that there is room to trim at least $40 billion from
our current Pentagon budget, even if we accept the highly unlikely
scenario of needing to fight two major conflicts at one time. �The point about the relative
strength of the United States and its allies is underscored by the
fact that the United States and its key allies (NATO, Japan, and
South Korea) now account for 62% of total global military spending,
up from roughly one-half in the mid-1980s. �In short, despite repeated calls for
higher military spending to remedy the alleged "readiness
crisis" facing U.S. forces, the United States and its allies
currently account for a much higher share of global military spending
than they did at the height of the Reagan military buildup in the
mid-1980s.
By exaggerating the current
threat to U.S. security, the Pentagon is carrying on a long and
dishonorable tradition. In fact, in the early 1990s it was revealed
that U.S. projections of Soviet military power had been wildly
overstated for years as a result of misleading intelligence supplied
by people like Aldrich Ames, the CIA agent who was convicted of
spying for the Soviet Union. Similarly, in the 1970s, the
conservative Committee on the Present Danger pressed the CIA to do a
slanted "Team B" assessment of Soviet military power that
helped pave the way for Ronald Reagan�s unprecedented peacetime
military buildup of the 1980s.
The terrorist bombings of
U.S. embassies in Kenya and Tanzania (August 1998) and missile tests
by Iran (July 1998) and North Korea (August 1998), and NATO�s air war
in Kosovo (inaugurated on March 24, 1999) have prompted politicians
and media pundits to demand that the Pentagon be given more money in
order to beef up its national security policies. It is essential to
offer a compelling alternative to the exaggerated threats and
misguided spending priorities that military hawks are promoting in
the hopes of dramatically increasing the Pentagon budget, bringing it
back to the record-high, Reaganesque levels that prevailed in the
mid-1980s.
If the current threats to
U.S. interests don�t justify spending $270 billion a year on the
Pentagon, much less increasing the military budget, as conservatives
are suggesting, what is driving these enormous expenditures? First
and most obviously, the main beneficiaries of cold war military
spending�including the Pentagon, the major military contractors, and
key members of Congress who routinely steer military dollars to their
districts � have been working overtime to keep the military gravy
train running. Beyond this institutional pressure for permanently
high military spending, there is also a strategic rationale�the
notion that the United States should retain the capability to serve
as a sort of "globocop," charging to the rescue to restore
order, stability, and "free markets" when they are
threatened by the forces of evil and chaos. Although it is true that
in a number of key instances�such as Somalia and Rwanda�the United
States has abandoned the task of policing violent conflicts due to
public concern about U.S. casualties, the Pentagon�s strategy and
budget remain focused on retaining a capability for global force
projection. And in those areas where there are critical resources or
potential U.S. investments at risk�such as the Persian Gulf and the
oil-and-gas-rich former Soviet Republics of Central Asia�the Pentagon
is busily at work providing arms and training, arranging access to
bases, and (in the case of the Persian Gulf) prepositioning troops
and equipment in readiness for a possible military intervention at
some future date. If we were to abandon the outdated notion that the
United States needs to maintain the capability to project force to
every corner of the globe and focus instead on developing better
diplomatic, economic, and cultural relations with other nations, we
could afford to cut tens of billions of dollars from our bloated
military budget.
� ����������������� In
recent years, Lockheed Martin and its allies in the weapons industry
have aggressively pushed for favorable treatment from the federal
government in the form of special subsidies, lucrative contracts for
big-ticket weapons systems, and wholesale changes in U.S. policies on
arms sales and military technology transfers. Given the tremendous
growth of these military conglomerates, one way to look at the development
of U.S. security policy as we approach the 21st century is to echo
the question that critics raised about General Motors in the 1950s:
Is what�s good for Lockheed Martin good for America?
The Pentagon claims that
using taxpayer money to subsidize military mergers will cut overhead
and save money by, as Norman Augustine puts it, allowing companies to
run "three full factories instead of six half-full
factories." In reality, as research by Harvey Sapolsky of MIT
has demonstrated, the Pentagon has not shut down a single major
weapons production line since the end of the cold war. And even if
Lockheed Martin cuts some overhead costs by closing factories and
laying off workers, there is no guarantee that the same company that
brought us the $600 toilet seat in the 1980s and pioneered in the
arts of bribery and influence peddling in the 1970s is going to pass
on its savings on overhead to U.S. taxpayers. So, while it may never
provide lower weapons prices for the Pentagon, the 1990s bout of
government-backed "merger mania" in the military industry
has accomplished one thing: it has resulted in a slightly leaner,
considerably meaner, and much more politically powerful corporate
military sector. As John Pike of the Federation of American
Scientists has noted, a company like Boeing, which since its
absorption of McDonnell Douglas has over 250,000 employees, leaves a
huge "political footprint" that gives the company immense
clout on Capitol Hill. Similarly, after the Lockheed/Martin Marietta
merger was consummated, Lockheed Martin put out a slick brochure that
bragged openly about its "facilities in all 50 states."
Buying Weapons That the
Pentagon Never Requested
One way that firms like
Lockheed Martin and Boeing fatten their bottom lines at the expense
of our long-term security is by using their connections on Capitol
Hill to force the Pentagon to buy weapons that weren�t included in
the department�s original budget request. This "add-on
game" is a bipartisan pursuit. House Speaker Newt Gingrich kept
an eye out for Lockheed Martin, which has a plant near his Marietta,
Georgia, district, but House Minority Leader Dick Gephardt has been
just as aggressive in seeking funds for the McDonnell Douglas
division of Boeing, the largest employer in his St. Louis area district.
Senate Majority Leader Trent Lott was a master at steering military
projects to his home state of Mississippi, but Democratic Sen. Daniel
Inouye of Hawaii almost matched Lott�s lobbying prowess: Inouye
inserted 31 projects for his home state�worth over $258 million�into
the FY 1999 Pentagon budget.
Spreading Pentagon
contracts around to the districts of powerful legislators has been a
routine practice for decades, but defense budget politics have taken
a unique twist in the 1990s. Since 1994, when the Republicans took
control of both Houses of Congress, Congress has added billions to
the Pentagon budget every year beyond what the Department of Defense
requested. This is a role reversal from the Reagan years, when
liberals in Congress were always trying to shave a few billion off
from the President�s Pentagon budget request. According to the
nonpartisan Center for Strategic and Budgetary Assessments, Congress
added a total of roughly $20 billion to the Pentagon budget during Fiscal
Years 1996-1998. And despite cries from the military and Pentagon
budget hawks regarding the "readiness crisis" that is
afflicting U.S. forces, three-quarters of this $20 billion windfall
was earmarked for weapons projects that benefit major arms makers,
not for maintenance, training, pay, or other items that would improve
the safety and quality of life of our men and women in uniform.
The add-on game is designed
to increase the revenues of major contractors by extending the
production runs of weapons systems that the Pentagon had hoped to
terminate. The payback for legislators is twofold: not only do they
get hundreds of thousands of dollars in campaign contributions from
the contractors, but they also get to claim credit for high-profile,
job-producing weapons projects in their districts. This self-serving
process has serious costs. First, it wastes billions of dollars in
taxpayer funds that could be put to more productive uses rebuilding
our schools or restoring our environment. Second, it undermines our
security by distorting the spending patterns within the Pentagon
budget.
Take the C-130 transport
plane, which is built by Lockheed Martin just outside of Newt
Gingrich�s Marietta, Georgia, district. Since 1978, the U.S. Air
Force has requested a total of just five C-130s, but Congress has
purchased 256 C-130s. This ratio of 50 planes purchased for every one
requested by the Pentagon may well be a record in the annals of pork
barrel politics. Sen. John McCain (R-AZ) has remarked that Congress
has purchased so many surplus C-130s that "we could use them to
house the homeless." The C-130 has been promoted over the years
by everyone from former Senate Armed Services Committee Chairman Sam
Nunn (D-GA) to former National Guard and National Reserve subcommittee
Chairman Sonny Montgomery (R-MS) to House Speaker Newt Gingrich to
Senate Majority Leader Trent Lott. The added planes are generally
placed with national guard units based in the states of key members.
For example, of the more than two dozen C-130s that Congress has
added to the budget in recent years, more than half of them will be
based at Kessler Air Force Base in Trent Lott�s home state of
Mississippi.
The C-130 add-on is an
example of "the waste that keeps on wasting." For one
thing, Congress has been buying them at such a rapid clip that since
1991 the Air Force has been forced to retire 13 perfectly usable
C-130Es with more than a dozen years of useful life left. Secondly,
because Congress doesn�t budget funds to operate the added C-130s,
the Pentagon will have to come up with over $1 billion to maintain
the unrequested C-130s over the next six years, funds that may have
to deplete allocations for pay, or training, or other so-called
"readiness accounts" of the sort that the Joint Chiefs of
Staff have been claiming are underfunded.
The C-130 is one of dozens
of unnecessary items that members of Congress from key committees
have been cramming into the Pentagon budget during the
Clinton/Gingrich era. Even in 1998, when Congress was allegedly
operating under a balanced budget agreement that was supposed to cap
the military budget at roughly $270 billion, Senate Majority Leader
Trent Lott managed to slip in a down payment on a $1.5 billion
helicopter carrier for the Marines (to be built in his hometown of
Pascagoula, Mississippi) and $94 million for a spaced-based laser
program that Lott hopes to have located in Mississippi. The Texas
delegation slipped in a few more F-16 fighters (built at Lockheed
Martin�s Fort Worth, Texas, facility), and Connecticut will benefit
from the addition to the Army�s budget of no fewer than eight extra
Sikorsky Black Hawk helicopters. In June 1998, Senator McCain
released a list of $2.5 billion in unrequested projects that members
of the Senate had added to the Pentagon�s FY 1999 budget; McCain
described the add-ons as the "worst pork" that he had
witnessed in the Pentagon budget process in years. Finally, to add
insult to injury, in the last-minute maneuvering between the White
House and Capitol Hill on the FY 1999 federal budget, the
congressional leadership added an astounding $9 billion to the
Pentagon�s funding, including an extra $1 billion for Star Wars
research. Then, to add insult to injury, in May of 1999 Congress more
than doubled President Clinton�s already generous $6 billion
supplemental budget request to pay for the war in Kosovo, adding
billions in unrequested military funds that had nothing to do with
sustaining NATO�s bombing campaign and everything to do with opening
up room in the budget for more military pork targeted to the states
and districts of key members of Congress.
The industry�s successful
campaign to lift a 20-year-old ban on exports of advanced U.S. combat
aircraft to Latin America is a prime example of how its lobbying
machine operates. First the industry prevailed on Defense Secretary
William Perry to advocate for lifting the ban within the counsels of
the Clinton administration and to send U.S. Air Force F-16s to do
demonstration flights at the March 1996 air show in Santiago, Chile.
Prior to the show, the Pentagon had also arranged for some Brazilian
generals to do test flights in F-16 planes deployed with the Puerto
Rican National Guard. Then aerospace lobbyists generated letters to
then Secretary of State Warren Christopher from 38 Senators and 78
members of the House of Representatives urging him to support the
lifting of the ban as well. Time magazine reporter Douglas Waller
described the lobbying letters as the "more million dollar
letters," because the members of the House and Senate who signed
onto the appeal to Christopher received a total of more than $1
million in Political Action Committee contributions from major
weapons exporting companies. The industry representatives followed up
by holding White House meetings with presidential counselor and
confidante Mack McLarty and an aide to Vice President Gore.
According to an account by
Merrill Goozner of the Chicago Tribune, a Lockheed Martin brochure
touting the Latin arms market as "a $3 to $15 billion
opportunity over the next 10 years" was even slipped under the
hotel door of former Costa Rican President and Nobel Peace Prize
winner Oscar Arias during one of his business trips. Dr. Arias has
been working with the Carter Center, the Council for a Livable World,
and a coalition of DC-based public interest groups to promote a
moratorium on new sales of advanced weaponry to Latin America as a
first step toward promoting regional discussions on conflict
prevention and force reductions. But so far, the power and money of
the arms lobby has sidetracked this common sense proposal, which
would do far more for the future security and stability of Latin
America than would hawking expensive military hardware.
On the issue of NATO
expansion, the role of U.S. contractors was not to change
administration policy but rather to reinforce a questionable policy
decision. The Clinton administration decided to expand NATO for a
variety of reasons, such as consolidating free market democratic
reforms in Eastern and Central Europe and recruiting new allies to
help keep the peace in Bosnia and other hot spots. But given the
obvious downsides of expanding the alliance�such as alienating
Russia, stalling further efforts at U.S.-Russian nuclear arms
reductions, and initiating an open-ended, costly commitment to rearm
the new member states�the Clinton administration needed allies to
help it sell the NATO expansion concept to Congress and the public.
By far the most important players in the pro-NATO expansion lobby
were organizations of Polish, Hungarian, and Czech-Americans along
with major arms manufacturers like Lockheed Martin and Textron, who
took an aggressive stance in support of this costly new commitment.
Corporate lobbying for NATO
expansion took several forms. Most importantly, Lockheed Martin lent
out one of its vice presidents, Bruce Jackson, to serve as president
of the U.S. Committee to Expand NATO, a lobbying and public education
group housed at the offices of the conservative American Enterprise
Institute. The committee sponsored ad campaigns, congressional briefings,
speeches, articles, and white papers promoting the "widest
possible" expansion of NATO. Jackson claims that his role at the
Committee to Expand NATO is a "hobby," but the nature of
his work suggests otherwise. For example, in the summer of 1997, when
the U.S. Committee sponsored a dinner at which twelve U.S. senators
were briefed on NATO expansion by Secretary of State Madeleine
Albright, Jackson invited Lockheed Martin board member Bernard
Schwartz, who, coincidentally, was the largest individual donor of
soft money to the Democratic Party during the 1995/96 election cycle.
Schwartz�s presence was a clear signal to the senators present at the
dinner that supporting NATO expansion would be a good way to garner
support for their campaign coffers. To reinforce that message, a few
weeks after the NATO dinner Schwartz sent a $50,000 check to the
Democratic Senatorial Campaign Committee.
Other pro-NATO expansion
activities pursued by U.S. weapons firms included financial
contributions by Lockheed Martin, Textron, and McDonnell Douglas to
proexpansion ethnic organizations like the American Friends of the
Czech Republic and several Romanian foundations promoting that
nation�s candidacy for NATO membership; political funding to help
pass the public referendum on NATO expansion that was held in Hungary
in 1997; and all manner of wheeling and dealing in East and Central
Europe in order to convince the top leadership in Poland, Hungary,
the Czech Republic, Romania, and other NATO "wannabe"
nations that buying U.S. weapons would be the best way to curry favor
with the U.S. government and win its support for their NATO
candidacies. It is important to note that many people in Eastern and
Central Europe, including democratic leaders such as Vaclav Havel of
the Czech Republic and Lech Walesa of Poland, were supportive of NATO
expansion based on longstanding fears of Russia, which made them a
receptive audience for the NATO expansion proposal.
When the Senate finally
voted on NATO expansion in early 1998, it passed by a vote of 81 to
19. But due to public concerns about the costs of future NATO
expansion�by one estimate the total cost of multiple rounds of
expansion could reach as much as $500 billion over 12 to 15 years, or
at least $2,500 for every American household�the next round of NATO
entrants may not be invited to join until 2001, not 1999 as
originally planned. This delay offers critics of NATO expansion an
important political opening to marshal the forces that will be needed
to hold back the arms lobby and the executive branch from going
further down the dangerous and costly path of expanding a cold war
alliance that has no clear purpose in the post-cold war world.
The Star Warriors:� Who's Benefiting from National
Missile Defense?
The
"Big Three" weapons contractors�Boeing, Lockheed Martin,
and Raytheon�are all profiting handsomely from Star Wars research and
development, and stand to make billions more if a national missile
defense system is actually deployed.
Boeing�Won $1.6 billion initial
contract for "systems integration" of the overall missile
defense effort, 4/98; according to the Wall Street Journal (5/1/98),
the contract could be worth $5.2 billion to Boeing over the next ten
years. Boeing is also the prime contractor for the Airborne Laser
(ABL), a chemical laser mounted on a 747 aircraft that is supposed to
be able to intercept Scud missiles in their "boost phase"
(as they are being launched); the Air Force expects to spend as much
as $1.2 billion on this program between now and 2002, most of which
will go to Boeing. Boeing has also received a contract to assemble
the booster rocket motors for the Ground-Based Interceptor, another
key Star Wars component; the boosters will cost an estimated $3
million each.
Lockheed Martin�Lockheed Martin is the
prime contractor for the Army�s Theater High Altitude Area Defense
system, THAAD. The project has failed its last six tests in a row,
and Lockheed Martin has agreed to pay up to $75 million for the costs
of any failed tests in the future. The Army has spent $3.2 billion on
THAAD so far.
Raytheon�Raytheon is the prime
contractor for the Navy�s Theater Wide missile defense project, which
is supposed to intercept enemy missiles early in their flight path by
detecting them and firing at them from ships at sea. Theater Wide is
the pet project of pro-Star Wars groups like the Heritage Foundation
and Frank Gaffney�s Center for Security Policy, and it is slated for
a $100 million to $200 million per year increase over the next five
years. Raytheon is also a major subcontractor to Boeing for systems
integration on the overall National Missile Defense effort. The
Theater Wide program is slated to receive roughly $1.4 billion in
funding from F.Y. 1997 through F.Y. 2003.
Industrial Aerospace/Defense Companies and projects they share:
|
All OSCE
|
N. American
|
Projects that
are spanning Euro-Atlantic
|
Europe
|
Projects that
are spanning Euro-Asiatic
|
Asiatic
|
Projects that
are spanning NA-Asiatic
|
|
|
NMD
|
|
Araine
Mako
|
|
5th
Generation Fighter
|
|
|
Sea Launch
|
Boeing
58 Billion
|
|
EADS
27 Billion
|
Mig 29 MAPS
T-72S Westernize
|
RAC MIG
|
|
|
|
F-22 Raptor
Space Shuttle
J-35
|
|
Airbus
Astrium
Eurofighter
|
|
RAC MIG and
Sukhoi merger planned
|
|
|
International
Space Station
|
Lockheed Martin
24 Billion
|
J-35
Fighter�
|
BAE
13 Billion
|
|
Sukhoi
1 Billion
|
|
|
|
F-22 Raptor
J-35
|
|
Eurofighter
|
|
Su-30
|
|
|
|
UTC
26 Billion
|
|
Alenia
3. 5 Billion
|
|
Rosoboronexport
|
|
|
|
J-35
|
|
|
|
|
|
|
|
Northrop Grumman
20 Billion
|
|
Alcatel
22 Billion
|
|
|
|
|
|
|
|
Mirage 2000
|
|
|
|
|
|
Raytheon
17 Billion
|
Thales-Raytheon
Systems
|
Thales
9 Billion
|
|
Avialeasing
|
|
|
|
|
|
Rafale
Mirage 2000
|
|
|
|
|
|
General Dynamics
12 Billion
|
|
Dassault
3 Billion
|
|
Rybinsk Motors
|
|
|
Division of GD,
makes Civil Aircraft
|
|
|
|
|
|
|
Gulfstream
10 Billion
|
|
Air Foyle
|
AN-70 Future
Intl European Transport Requirement
|
Antonov
|
|
|
|
|
|
|
|
|
|
Bombardier
13.5 Billion
|
|
Rolls Royce
10 Billion
|
|
Illyushin
|
|
|
|
|
|
|
|
|
|
|
|
Textron
13 Billion
|
|
|
MI-8
MI-17
|
Kazan
Helicopter Plant
|
|
|
|
|
|
|
|
|
|
|
|
Goodrich
5 Billion
|
|
|
TU-334
|
Tupelov
|
|
|
|
|
|
|
|
|
|
|
|
Precision
Castparts
1. 5 Billion
|
|
Volvo Aero
|
|
Aviacor
|
|
|
|
|
|
|
|
|
|
|
|
Honeywell Intl
25 Billion
|
|
|
|
KnAAPO
|
|
|
|
|
|
|
|
|
|
|
|
Sequa
1. 5 Billion
|
|
|
|
Design Bureau of Transport Machinery
|
|
|
|
|
|
|
|
|
|
|
|
Orbital Sciences
|
|
|
|
Polyot
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Khrunichev
|
|
|
|
|
|
|
|
|
|
|
|
SAIC
|
|
|
|
S.P.Korolev
|
|
|
|
|
|
|
|
|
|
|
|
GE Aircraft
Engines
11 Billion
|
|
|
|
Aviapribor
|
|
50 jets were purchased by
India and China is carrying out licensed production for about 200
Su-27 fighter aircraft and may still yet purchase Su-30 ground-attack
aircraft.
Joint Strike
Figher
The UK, which
needs around 150 JSFs to replace Royal Navy Sea Harriers and Royal
Air Force Harrier GR7s from around 2012, is set to become a junior
partner in JSF. Ironically, BAE Systems' 10 per cent share of JSF
production could be worth more in the long run than the value stream
generated by its flagship defense product, the Eurofighter Typhoon,
in which it has a 37.5 per cent stake.� Both the JSF and the F-22 are
needed, not just to fill US orders - there is a $100bn requirement
for 3,000 JSFs in the US alone - but to compete with an emerging
breed of European fighters that are challenging US market dominance
for the first time in decades.
DESCRIPTION:
Joint Strike Fighter is a
program designed to develop a family of stealthy, next- generation
replacement strike fighter aircraft for the U.S. Air Force, Navy and
Marine Corps, and the U.K. Royal Navy and Royal Air Force. The
supersonic JSF evolved from the Joint Advanced Strike Technology
program, which entered the concept design definition research phase
in December 1994. The JSF program entered its current phase, the
Concept Demonstration Phase, in November 1996, when two contractors,
Lockheed Martin and Boeing, were selected to build and fly
concept-demonstration aircraft. A down-select to one contractor or
contractor team for engineering and manufacturing development is
scheduled for fall 2001, following flight testing which will conclude
the same year. All three Lockheed Martin JSF demonstrators have
completed government-mandated flight-test requirements. The X-35A
(U.S. Air Force), X-35B (U.S. Marine Corps/U.K. Royal Navy and Royal
Air Force) and X-35C (U.S. Navy) all demonstrated aerial refueling,
handling qualities, acceleration and deceleration, formation flying
at different altitudes, and logged many other achievements, including
supersonic flight. Additionally, the X-35C carrier variant made the
first-ever transcontinental flight of an X plane, completed 250
practice carrier landings at Naval Air Station Patuxent River, Md.
and was flown by eight pilots from the U.S. and U.K. . The
short-takeoff/vertical landing (STOVL) X-35B, with its unique
shaft-driven lift-fan propulsion system, achieved the JSF program�s
first vertical takeoff and vertical landing on June 23, 2001. It went
on to complete 17 vertical takeoff/hover/vertical landing missions
before fulfilling all government requirements in subsequent flight
testing.
F-22 Raptor
The F/A-22 Raptor is a new
breed of super-fighter for the 21st century. With its stealth,
supersonic cruise, agility and advanced integrated avionics, it will
dominate the skies over any future battlefield and bring unequaled
capability into the hands of America�s Air Force fighter pilots.
Lockheed Martin, Boeing and
UTC Aerospace have joined with the U.S. Air Force to develop and
produce the revolutionary F/A-22 . The world�s first stealth
air-to-air fighter, the F/A-22 will be unseen and deadly at long
range and unmatched at close-in dogfighting. As a true multimission
fighter, it will also have superb, precision-strike ground attack
capability. A multimode electronically scanned radar, internal
weapons carriage, vectored thrust and a sophisticated fully
integrated sensor array are only some of the revolutionary advantages
that Raptor brings to the air combat arena. Slated to become
operational in late 2005, the F/A-22 will replace the U.S. Air
Force's aging fleet of F-15 Eagle fighters.
The F/A-22 is the first
production aircraft with the ability to supercruise � flying at
supersonic speeds without the use of afterburners. The Raptor
achieves this by combining efficient aerodynamic design with two UTC
Aerospace F119-PW-100 engines, rated in the 35,000-lb thrust
category.
Designed and built with
reliability and maintainability in mind, the F/A-22 offers new capability
to deploy and fight on day one. Twice as reliable and capable as its
predecessors, it will allow the Air Force to get to the fight faster,
stay longer and fly more missions than any conventional fighter
aircraft.
The F/A-22 is proving
itself today through a rigorous flight test program in the skies
above Edwards Air Force Base, California, and the results have been
outstanding. Air Force and F/A-22 Contractor Team test pilots are
putting the Raptor through its paces, and the aircraft, engines and avionics
will be thoroughly tested before the F/A-22 enters active duty.
The Raptor will carry
existing and planned air-to-air weapons, including a full complement
of AIM-120 advanced medium-range air-to-air missiles (AMRAAM) and
AIM-9 Sidewinder short-range missiles, along with an internal M61A2
Vulcan 20mm cannon. Multimission air-to-surface weaponry includes the
new GBU-32, 1,000-lb joint direct attack munition (JDAM) for
precision, all-weather attack
NMD National Missile Defense
The US created
quite a stir internationally by working on a national missile defense
project that some fear would cause China or others to have an arms
race to be able to swamp the defense. With the election of Bush as
President and his support of NMD, probably some $60 billion will be
spent on the system. President Clinton tried to blunt criticism by
saying the US may consider sharing the missile defense technology, or
by providing capability to 'civilized nations' supportive of
nonproliferation. Something like this project was suggested in the
80s but failed due to political disagreements and then was called SDI
the strategic defense initiative. The amount of dollars involved and
the new research will be a boon to the company(ies) doing so and
probably Boeing or Lockheed Martin will be the prime contractor.
Should Europe have its own NMD project? Would EADS be the prime
contactor?
Theatre missile
defense
European
Pillar consolidation
Eurofighter
Eurofighter
GmbH, based in Hallbergmoos, Germany, is the consortium set up to
manage the development and production of the complete Eurofighter
Typhoon weapon system. It has agreed development work shares of:
- Alenia
Aerospazio - 33%
- BAE
Systems - 21%
- EADS
- 46%
Production work
shares correspond to the number of aircraft ordered by each European
Partner Country (EPC):
- 232
for the UK 37%
- 180
for Germany 30%
- 121
for Italy 19%
- 87
for Spain 14%
The Eurofighter
project will help the top aeronautic companies compete not only with
the Americans but also with other European companies such that the
Typhoon may become a project that fuels and funds consolidation since
other companies such as Dassault may not be able to keep up.
Dassault
Aviation makes military birds of prey such as the Mirage and Rafale
jet fighters. A drop in military sales has recently sent sales and
profits into a downward spiral, however. Many industry analysts
predict that within 15 years a single European fighter will emerge
and replace Dassault's combat aircraft.
Eurofighter is the most up-to-date
high-performance multi-role aircraft and at the same time the largest
procurement project of the present time. Its mission spectrum
comprises both air combat over very large distances and beyond visual
range (BVR) and close-range combat requiring extreme agility. In
addition, it can be deployed in all weather conditions and possesses
short take-off and landing capabilities, supercruise, and high
survivability and mission effectiveness. It is also independent of
any external ground equipment. Eurofighter was extensively evaluated
by the Air Forces of Germany, Italy, Spain and Great Britain along
with all feasible alternatives, including the F-22 and Rafale as well
as upgraded versions of the F-15, F-16, F-18, MiG-29 and Su-27
aircraft. These evaluations also included comparison flights with
Russian prototypes. Eurofighter regularly proved to be the most
suitable aircraft in terms of performance and cost.
The basic version of the
Eurofighter is a single-seater fighter aircraft with a twin-seater
variant for operational instruction and training. The weapon system
concept is based on a balanced interaction of high agility as a
result of the aerodynamic design and the capabilities of the engine,
armament and sensors. The signatures are extremely low. The mission
spectrum of Eurofighter comprises: airspace surveillance, air defence
and superiority, engagement of enemy air ground forces, interdict
missions, air support for ground missions, antiship operations and
reconnaissance. The growth potential for combat efficiency
improvements will also enable the aircraft to meet the demands of the
future.
Eurocopter and
the NH-90
To strengthen
the competitiveness of the European helicopter industry, in 1992 Dasa
founded the joint venture Eurocopter S.A. together with Aerospatiale
of France. Today, Eurocopter, which is headquartered in Marignane,
France, is a 100% subsidiary of EADS.
Eurocopter's
range of products reaches from single-engine light helicopters to
medium-weight transport helicopters. All in all, the product spectrum
covers 80 per cent of the market demand. Within a short time, this
bi-national joint venture has become the largest manufacturer and
exporter of civil helicopters in the world and gathered almost 50
percent market share in the US in 1999.
In 1999, the
Tiger series production contract was signed. Germany and France have
each placed orders for 80 units of this two-seater combat helicopter.
The transport
and naval helicopter NH 90 is being developed by Germany, France,
Italy and the Netherlands. It is due to enter service with the armed
forces of those countries in the year 2003.
Eurocopter can offer a
wider range of products than any other helicopter manufacturer, with
models ranging from a single-engine light helicopter EC120 up to a
medium weight transport helicopter in the ten-tonne class like the
Cougar MK2, thus covering about 80 percent of the global market
demands. In the military field, the focus is currently on the
production investment phase of the Tiger and NH90 helicopters.
Aerospatiale and Dasa both
had already had a long history in the field of development and
production of helicopters and were already cooperating in the
framework of the European programmes for the Tiger and NH90 military
helicopters.
The transport and naval
helicopter NH90 is being developed by Germany, France, Italy and the
Netherlands. The participants in this project, which is managed by NH
Industries, are Eurocopter with a 66.4 percent share, Agusta (Italy)
with 26.9 percent and Fokker B.V. (Netherlands) with 6.7 percent.
Total requirements for the NH90 are for 595 helicopters. In June
2000, France, Germany, Italy and the Netherlands signed a contract
for the acquisition and a Memorandum of Understanding for the series
production launch of a total of 366 helicopters.
In the area of civil
helicopters, the first joint product was the twin-engine light
helicopter EC 135, for which a record number of more than 230 orders
have been received since the first delivery in 1996. Since that year,
Eurocopter has established its position on the market by offering
several helicopters with extremely low noise emissions, such as the
single-engine EC 120 or the EC 130 and a light transport helicopter
in the five-tonne class, the EC 155. As the global Leader in the
helicopter market the company is excellently positioned for further
growth.
ATR� and Alenia from Italy
EADS is an
equal partner in ATR with Alenia Aerospazio ("Alenia"), a
division of Finmeccanica of Italy. ATR is a world leader in the
market for regional turboprop aircraft of 40 to 70 seats. Alenia's
manufacturing facilities near Naples, Italy, produce the aircraft
fuselage and tail sections. Aircraft wings are assembled at EADS'
facilities at Saint-Nazaire in western France, and nacelles (engine
housings) are assembled at EADS' Saint-Martin Eloi site near the
airport of Toulouse. EADS carries out final assembly, flight-testing,
certification and deliveries at the Toulouse site. EADS outsources
certain areas of responsibility to the Airbus Division, including
wing design and manufacture, flight testing and information
technology.
With its -500
Series of the ATR 42 and ATR 72 aircraft ATR (Avions de Transport
R�gional) with headquarters in Toulouse, France, is a world leader in
the market for turboprop regional aircraft for 40 up to 70
passengers. Turnover of the year 2000 amounted to 650 million euros.
More than 650
ATR aircraft have been sold all over the world. More than 100
operators fly them. Statistically spoken, every 20 seconds, an
airplane of the company take off around the world.
In June 2001, the two
shareholders decided a restructuring of the former joint venture.
Today, ATR comprises besides development procurement as well as
sales, a former tasks of the ATR consortium, also the industrial
capabilities, which were attributed to the two partners EADS as well
Alenia Aerospazio until then.
ATR's
manufacturing facilities near Naples, Italy, produce the aircraft
fuselage and tail sections. Aircraft wings are assembled at Airbus'
facilities at Saint-Nazaire in western France, and nacelles (engine
housings) are assembled at Saint-Martin Eloi site near the airport of
Toulouse. ATR carries out final assembly, flight-testing,
certification and deliveries at the Toulouse site. ATR outsources
certain areas of responsibility to the Airbus Division, including
wing design and manufacture, flight testing and information
technology.
ATR's production system,
which uses a two-stage final assembly line, is designed to maximize
the company's ability to react swiftly and effectively to market
changes.
ATR Programme
ATR is a world leader in
the market for regional turboprop aircraft of 40 to 70 seats. The
latest "- 500" generation aircraft, ATR 42-500 and ATR
72-500, benefit from major improvements in the fields of performance
and passenger comfort and maintain its competitive hedge in terms of
operating costs.
Fifteen years after Air
Littoral put the first ATR 42-300 into service on the
B�ziers-Paris-B�ziers route on December 9th 1985, the ATR fleet
logged its 10 000 000th flight in October 2000.
What about
Greece and the privatization of Hellenic Aerospace (HAI)?
The
controversial strategic sale of a 49 per cent stake in Hellenic
Aerospace Industry (HAI) is linked with a$7bn military aircraft
purchase planned by the socialist government. The consortium of the
companies building the Eurofighter, EADS, BAE Systems and Alenia
Aerospazio is competing with a French-Greek bid led by Dassault
Aviation.� The offers include a
detailed five-year business plan to develop HAI's capacity for
building commercial and military aircraft.
The company
that wins the stake will take over management at HAI, a loss-making,
state-controlled facility handling repair and maintenance work for
the Greek air force and which makes parts for Airbus and Eurofighter.
At a later date the investor is to be offered a majority stake in
HAI.
Analysts said
the Eurofighter consortium was seen as the frontrunner, partly
because Greece is committed to buying at least 60 Eurofighter Typhoon
combat aircraft, with an option for 30 more, in a deal worth a
minimum of $5 billion, as part of an air force modernization program.
Dassault is set to take a smaller stake in the procurement program,
providing 15 new Mirage 2000s and upgrading 10 older Mirages for the
Greek air force.
Alcatel
Paris-based
Alcatel primarily makes telecommunications equipment for public
networks, homes, and businesses. Its products include optical and
wireless networking gear and underwater networking systems. The
company also makes power and telecom cables. Alcatel counts itself at
or near the top of many of the markets it serves. About 55% of sales
are in Europe.
Following the
recommendation of the French government, in 1998 Alcatel, Dassault
Industries, and Aerospatiale joined forces to buy part of the state's
stake in defense electronics group Thomson-CSF (now Thales). In early
2000 Alcatel swapped all but 10% of its stake in nuclear power
company Framatome for an additional 10% of Thomson-CSF. This raised
its stake in Thomson-CSF to 25%.
Formerly run by
the French government, Paris-based Thales (pronounced TAH-less) makes
advanced electronic equipment and systems for both defense and
commercial customers. After reorganizing, the company operates in
three business segments -- aerospace, defense, and information
technologies and services. Thales produces airborne systems,
avionics, air security systems, naval systems, communications,
optronics, information systems, electron tubes, and space equipment.
Thales has
grown through acquisitions. Chairman Denis Ranque uses a
"multi-domestic" strategy of buying small defense companies
in countries to establish a local presence. Alcatel SA, a French
telecommunications equipment maker, owns 27% of the company, and
Dassault owns about 6%.
Alcatel and
Thales have developed a strong industrial and technological
cooperation over the past years. The cooperation between
the two groups is covered by the June 1998 cooperation agreement,
amended and extended to other areas in November 1999 when Alcatel
took a large stake in Thales' capital. The agreement
covers:
technological cooperation in software, telecom
technology, optronics and micro-wave
communication;
cooperation in patents due to reciprocal
agreement giving free access to patents held
by both groups;
diversified cooperation in purchasing,
insurance, facility management, property and
venture capital.
Through the
implementation of common projects, taking advantage of the
civil-military complementarity of their respective businesses, the
two groups aim at maximizing the synergies in the fields of
electronics and software to face international competition,
significantly reduce costs and strengthen their profitable growth.
The cooperation
allows for both groups to reinforce their positions and market shares
in key growth technologies or sectors and to achieve together
top-ranking positions, providing each other mutual commercial support
in export markets while continuing to pursue a policy of European and
international alliances in the professional and defence electronics
sectors.
Military affairs are at a
turning point with electronics and systems playing a more crucial
role than ever. With its multi-domestic operations, and its capacity
to develop complex systems and manage them as prime contractor,
Thales has an outstanding position in the defence market. Thales,
present on all types of air, sea and ground military platforms, is
one of the few companies to have recorded several successive years of
revenue growth in the challenging new defence context.
The company's military
businesses range from the design and production of detection systems,
identification systems and air command and control systems to very
short-, short- and medium-range air defence systems to defend
high-value assets and protect forces on the battlefield. The company
is also involved in armaments and propulsion.
The air defence market
includes air command and control systems and battlefield air defence
systems. These systems rely
on surveillance radars, operations and command centres, and weapons
systems to provide protection from airborne threats. They
trigger defensive action and prepare for offensive missions,
communicating with airborne sensors, surface-to-air missiles, air
bases and land forces.
This market is growing
partly because of the need to
update NATO.s infrastructure to ensure allied interoperability
at continental level and for force projection operations, and partly
because of the emergence of new threats including tactical ballistic
missiles and cruise missiles.
Transatlantic dimension:
Thales
Raytheon Systems (TRS), the first-ever transatlantic structural
partnership in the defense sector, was set up on 1 June 2001. The company advances transatlantic
cooperation and system interoperability in the fields of air
command and control and air surveillance. Through TRS, which has
facilities in France and the United States, the partners have access
to markets on both sides of the Atlantic and can serve export markets
more effectively.
The alliance is a logical extension of recent
partnerships between Thales and Raytheon on major programs:
the Florako contract for Swiss airspace surveillance won jointly in
1998, and the 1999 contract to supply NATO with the first phase
(LOC1) of the ACCS (Air Command & Control System).
The company also covers battlefield defence. Thales
is contributing to France's SCCOA (Air Command & Control System)
programme and new programmes including Rapsodie, the French Army's
future land-based surveillance radar, as well as the Cobra programme
being conducted by the Euroart consortium.
The MAKO
project and EADS as Prime Contractor
In the coming
25 years, there will probably be demand for approximately 2,500 light
combat aircraft/high-performance trainers, because at the present
time the extension of the service life of existing types has reached
its limit. The Mako, a new Generation Light Combat Aircraft, is a
lightweight military and training aircraft of the fourth generation
with a modular design concept. The maiden flight of the Mako could
then take place with effect from the beginning of the year 2005 and
series production could start by 2007.
Ariane
consortium:
EADS is active
in the field of launchers and launch services through its
shareholdings in Arianespace for heavy-lift launchers, Starsem for
medium-lift launchers and Eurockot for small-lift launchers. The EADS
has a 25.9 percent stake in Arianespace S.A., with over 50 other
European companies and institutions also participating.
Today, Ariane
has an almost 60 percent market share of satellite launches. The
commercial exploitation of Ariane 5, the successor model to the
successful Ariane 4 was done by EADS, the industrial prime contractor
for this program, with responsibility for the cryogenic main stage,
the solid fuel booster and the structures and strutting for the
helium tank of Ariane 5. Furthermore EADS is the systems leader for
the upper stage of this European heavy launcher. EADS also supplies
launcher equipment to non-European customers, particularly in the
U.S.
A Second EADS?
The
Dassault/Thales/Alcatel axis could conceivably form the nucleus of a
"second EADS".� There
seems to be room for another prime contractor, a second European
multinational company. Additionally the BAE/SAAB connection and
others could form another nucleus - or combine with the first. There
is no guarantee that EADS will have a monopoly position in a Euro
market.
BAE signed a
joint venture agreement with France's Dassault Aviation to co-operate
on a next generation of combat aircraft to replace the Tornado bomber
and strike versions of the Mirage 2000. The Future Offensive Air
System (FOAS), as it is known in the UK, is needed in service around
2020.
Following the
money: Banks in the Ariane consortium -
Eleven banks
are part of the Ariane group and access to these funds may allow
additional financing for industry consolidation. If most of the
participants in this group decided to go the route of Airbus and
decide to combine operations, then the Industrial portion of the
Complex would be as big or bigger than Boeing. However if there were
two EADS style companies the competition between them might be played
out inside Ariane.
Collective Security Organization / Commonwealth of
Independent States
With agreements signed to
form a team based around Sukhoi, Russian resolve is not in doubt, but
with scant domestic purchases on the horizon, those aspirations will
depend heavily on exports to fund the work.
Currently, Russia is
exporting aircraft to a number of countries such as the Sukhoi Su-27
and Su-30 (NATO reporting names: 'Flanker') to China and India.
Russia's armed forces
before 2015, according to governmental predictions, will buy only
7-10% of Russia's aircraft industry's output, Russian airlines are
expected to buy another 13-15%, leaving 75-80% for export. Any slump
in exports could mean the collapse of the Russian aircraft industry,
officials said. Adding to that, they said, Russia will be squeezed
from the market forever unless it offers a new fighter to foreign
customers by the 2010-15 timeframe.
Several new aircraft will
be available around this time, such as the Eurofighter Typhoon and
the US Joint Strike Fighter (JSF). The JSF is seen as the most
important rival, especially if the US Department of Defense speeds
JSF development as now seems likely rather than cancelling it as many
speculated would happen. The planned Russian fifth-generation fighter
is to be called the PAK FA after the Russian Perspektivnyi
Aviatsionnyi Kompleks Frontovoi Aviatsyi, or Future Air Complex for
Tactical Air Forces.
������������������� It is intended to be the same size as
the US JSF but have a mission profile closer to the F-22 Raptor, with
air superiority being the primary mission and ground attack and
reconnaissance being
secondary. Also similar to
the JSF, the cost is expected to be about $30 million each. Even the
deadlines assumed by the Russians are directly related to the date of
entering JSF into the market.
In May, Yuriy Koptiev,
general director of Rosaviakosmos state agency said that the
prototype of the PAK FA would take-off in 2006 and that in 2010 the
aircraft would be ready for series production.
The first deliveries, both
for Russian armed forces and for export, would be possible in
2011-12. The trick, however, will be finding the money to develop the
fighter. The first source of funds, small and uncertain, is the
Russia's Ministry of Defense budget. The second source, several times
larger, is the export revenues of the companies participating in the
program. The third possible source is financing from other countries
interested in buying the aircraft.
|
|
The �ROSOBORONEXPORT� Federal State Unitary
Enterprise
is the major specialised agency responsible for
Russian arms export. With nearly half-a-century expertise inherited
from its predecessors � �Rosvoorouzhenie� and �Promexport�
companies -- it is also the most experienced Russian state-run
company engaged in international military sales.
|
|
|
"IZHMASH" Open Joint-Stock Company
Accumulated for about two centuries experience,
traditions and above all gifted creators of the weapon, enormous
engineering potential make it possible to produce high-quality
weapons and afford to take the adequate place in the world market.
|
|
|
"Motovilikha Plants" Corporation
Up to the recent times the "Motovilikha"
produced mainly the newest kinds of armament. During the last few
years the company began to produce various kinds of the up-to-date
gunnery such as the 152-mm system "Giatsint", the 240-mm
self-propelled mortar "Tyulpan", a family of the 120-mm
towed and self-propelled guns "Nona", and also the salvo
fire missile systems "Uragan" and "Smerch".
|
|
|
State Enterprise "Izhevsky Mehanichesky
Zavod"
is an enterprise with high level of technologies
having sufficient experimental base, computer center, automatized
system of production management, up-to-date equipment including
automatic lines, mechanicalprocessing complex, complex and
mechanized bays and shops with highly productive and highly precise
equipment. Electronic and machine-building are the main sphere of
Works activity.
|
|
|
Votkinsky Zavod
is a large, equipped with up-to-date machinery
enterprise with immense production potential. It produces machining
centers, high-precision milling machines, packing machines,
pasteurizing and cooling plants, centrifugal pumps, motor-car
radiators and heaters, thyristor and transformer units for
oil-rigs, washing machines, perambulators, gas stoves, micro-wave ovens
and other items.
|
|
|
Ulyanovsk Machinery Plant
started to manufacture small arms ammunition in 1917
and since then it has remained one of the leading Russian
enterprises which manufacture sporting and hunting cartridges for
the rifles of different caliber. Today SUE "PA "Ulyanovsk
Machinery Plant" is a multiprofile enreprise that manufactures
spark plug, load-lifting equipment, contactless starters and
consumer goods.
|
|
|
JSC "Tulsky Oruzheiny Zavod"
For the space of a long time of its history the
activity of the Tulsky Oruzheiny Zavod was, is and will be of much
benefit to Russia.
|
|
|
"VYMPEL" State Production Association
is an acknowledged leading manufacturer in Russia of
5.45 mm, 7.62 mm and 9 mm cartridges for small arms. The
Vympel-produced cartridges fully comply with most exacting
requirements imposed upon ammunition by modern small arms
development standards, production is based on unique and highly
efficient technologies.
|
|
|
Vyatskie Polyany Machine Building Plant
"MOLOT", JSC
is one of the biggest Russian exporters of civil
firearms. The Plant has all the modern technologies and complete
cycle of production. Every single gun of MOLOT Plant is
manufactured with special care from beginning to the end.
|
|
|
The OJ-SC "Tula Cartridge Works"
is one of the largest suppliers of ammunition both to
the Russian and international markets. The volume of supplies and
the number purchasers in CIS-countries, Europe, U.S.A., Asia and
Africa is growing from year to year.
|
|
|
JSC "Barnaul Machine-Tool Plant"
is one of the leading producers of industrial goods
and ammunition in Russia. The company has a source of long
long-term and stable contacts with large suppliers of raw
materials. They also process an increasing direct relationship with
Russian and foreign firms. Unique technology and great scientific
potential permits the development of new types of products and
extends their range.
|
|
|
RUBIN
The design of the first combat submarine of the
Russian Navy was developed in 1901. She was commissioned under the
name of "Delfin". The majority of Russian submarines
which participated in World War I and World War II were built to
the designs of CDB ME "Rubin". Now CDB ME
"Rubin" is a diversified company which is not only
holding the leading position in marine engineering but is
successfully mastering a number of conversion activities.
|
|
|
Central Research Institute of Structural
Materials "PROMETEY"
As а result of а complex of basic and
applied research we сrеated а series of unique
high-strength and cold-resistant steels, durable light
corrosion-resistant titanium and aluminum alloys, polymer composite
and many other materials. Currently, hundreds of grades of
shipbuilding materials, which have different composition, physical
nature and technical properties, are being used.
|
|
|
Zvyozdochka
Enterprise "Zvyozdochka" is a large
shipbuilding and shiprepairing plant in the North-West Region of
Russia. "Zvyozdochka" modern slips, flooding docks, ship
transporting cars, quays, shops with up-date machines, and skilled
personnel on hand. The enterprise is engaged with shipbuilding,
shiprepair, machine building and with construction of oil and gas
Drilling Rigs.
|
|
|
"ALMAZ" Shipbuilding Company
specializes in patrol and attack craft construction since
1914. With the present day requirements to control a 200 mile
Exclusive Economic Zone in addition to coastal surveillance the
yard builds patrol boats of new generation Svetlyak class.
Successful operation of these boats and other ones of previous generations
by Marine Forces of the Federal Boundary Service as well as by a
number of foreign coast guards - is the best approval of the yard
as high-qualified specialist in special craft building.
|
|
|
Joint Stock Company "Kalugaturbine
Works"
is one of the domestic largest manufacturer�s of
power generation equipment � steam turbines to drive electric
generators, driving turbines, package-type turbo generators,
geothermal turbines.
|
|
|
The Central Research Institute of Ship
Electrotechnics and Technology
or "SET Research Institute" for its
external trade activities, is a specialized scientific and
production centre which is involved in design experimental
developments requiring deep scientific research in a full scheme,
i.e., ending up with brand new products.
|
|
|
Central Research Institute of Shipbuilding
Technology ("CRIST")
is the only scientific centre in Russia in the field
of integrated development of advanced shipbuilding technologies,
methods and ways of construction and testing of warships and
merchant ships of various types and classes.
|
|
|
"TAYPHOON" Joint Stock Company Of
Open Time
is a modern, well-equipped industrial enterprise,
situated in the central part of Russia. It is specialized in
production of a complex navigation and radio engineering equipment.
|
Russian industry hunts out a future for
itself
It is more than 10 years
since the end of the Cold War during which the Russian Defense
industry's reason for existence was as much as a political instrument
against NATO and other Western forces as military and economic.
The former Soviet Union and
the USA both used arms transfers and military assistance as a tool of
foreign policy during the Cold War. For Moscow, according to a former
director of the state-owned trading company, this meant that its 1990
Defense exports of $16 billion generated just $900 million in cash.
For army inventories, the
company offers battle tanks that in a number of parameters have no
rivals worldwide. Rosvoorouzhenie also offers combat-proven infantry
fighting vehicles, armoured personnel carriers with unsurpassed
fire-power, multiple-launch rocket systems equal in their efficiency
to smart weapons, and many other types of weapon system that are
equal to or superior to armaments of foreign rivals.
On the aircraft front, the
company offers Russian-made multi-functional combat aircraft
considered by many experts as the world�s best in their class. In the
near future they promise to become the most sought-after aircraft in
the world with export sales already totalling billions of dollars. In
the air Defense systems� sector, the corporation is marketing air
Defense assets that cover the full spectrum from low-altitude,
short-range systems, medium-range air-Defense systems with an
anti-precision weapon capability, through to long-range systems
capable of detecting, engaging and destroying targets at large
distances from protected sites. The company is offering complex
solutions in the air-Defense sector, allowing integration of
Russian-made systems into the existing air-Defense environment using
foreign-made assets to set up multi-layered and highly efficient
Defenses against all means of air attack.
The development of new
systems requires funding that current economic conditions dictate
must largely come from export-derived income. However, rather than
buying military hardware in recent years, Moscow has focused on
developing a new generation of advanced equipment that some say is a
decade from deployment.
China and India have most
consistently dominated the list of Russia's Defense-related markets
in recent years. Together with Iran and Syria, they also promise the
greatest potential for further growth. A lower rung of nations that
have contributed to this post-Cold War export drive includes
Bangladesh, Cambodia, Indonesia, Laos, Malaysia, Myanmar, North
Korea, Singapore, Sri Lanka and Vietnam.
Following a Russian
government resolution, Nikolai Nikitin was appointed designer and
director general of the VPK MAPO Company and the MAPO MIG series
production plant. On 3 February, the new chief was presented to the
staff by Russia's first deputy prime minister Yury Maslyukov.
Before the appointment,
Nikitin was deputy director general of the AVPK Sukhoi Aircraft-
Building Military-Industrial Complex. He started work at Sukhoi after
graduating from the Moscow Aviation Institute. Nikitin was technical
supervisor of the flight tests of the Su-27 fighter and has been a
Sukhoi board member since 1997. Sukhoi officials said Nikitin is one
of the most gifted men in the industry and an " A-grade
professional" and a skilful manager.
MAPO was formed in January
1996, comprising 20 leading military and civil aircraft-building
plants. Today, it is a leading concern in Russia with unique
experience and technologies. MAPO designs, produces and promotes
advanced aviation systems and armaments and also offers maintenance,
repair and modernization services. MAPO headquarters is located in
Moscow, and the overall workforce of the company's plants exceeds
60,000 employees.
The MiG MAPO company is the
leading aircraft-building plant in Moscow and an affiliate of MAPO.
By merging the two rival manufacturers of the country's leading fighters,
the Russian government expects to improve the country's position on
the international fighter market by allowing joint modernization of
the third-generation fighters of the two companies and removing
competition between them on the foreign market.
The Sukhoi fighters are
generally considered to be more competitive than the MiGs. However,
VPK MAPO is believed to have had better connections in the previous
Russian government, which tried to lobby the company's interests in
the international fighter market.
In the words of Maslyukov,
a process has been initiated to restructure Russia's aerospace
complex. This is aimed at setting up three to four major corporations
specialising in the final assembly of aircraft; two to three major
corporations focusing on the production of various types of aircraft
engines; and about 20 to 30 corporations specialising in
technological development.
According to Maslyukov, the
Kamov company is likely to form an independent helicopter-building
corporation, specifically capable of competing with the US Sikorsky
company. Other enterprises engaged in the development of weapons,
control and avionics systems, presently part of VPK MAPO, are also
due to merge with major corporations.
The task of these
structures is to carry out the full cycle of development and
production of competitive types of aircraft weapons and military
hardware. VPK MAPO's new structural concept is expected to take two
months to work out. During this time, the complex's work will be
analyzed to identify top priority projects.
In the next 10 to 15 years,
Russia's aircraft-building industry will enjoy hardly any support
from the state.� Therefore, the
industry will depend on its export potential (including that of VPK
MAPO). Under current conditions, Russia's aircraft-building industry
can survive only on the basis of its export potential.
It remains to be seen
whether any German or other European company will be encouraged to
take a stake in the new company. The concern will be the cornerstone
of a new Russian defense industry and an opportunity for the
privatization of Russian assets.
Three Reorganizations equals One Coup
There is
an almost perennial ritual of aerospace industry reorganization by
the Russian government. The administration of President Vladimir
Putin has either carried out or proposed three or more major
organizational initiatives: one to reshape the manner in which
Russian aerospace products are sold for export; another to
restructure the industrial base; and a third to change how the
industry is to be administered by the state�all of this in hopes of
preserving the industry financially and retaining a core cadre of
specialists and technical competence.
There is
almost no disagreement in Russia regarding the need to improve the
industry�s market position and financial well-being, but there is
plenty of skepticism and criticism to go around as to whether the
government�s efforts in this area, including these latest
organizational rescramblings, do more harm than good. There are those
in Moscow and elsewhere who would argue that in the last 10 years all
of the government�s recovery plans, reorganization schemes, decrees,
special commissions and other measures designed to promote Russia�s
aerospace sector have had almost no affect on stemming the industry�s
decline.
On the
contrary, the measures are seen by some as having accomplished little
more than exacerbating the two severe deficiencies that are
responsible for that very decline: a lack of a steady flow of orders
and/or funding from the state, and an unstable, uncertain
administrative climate that leaves many wondering who they will be
working for or responsible to in the future, or even which ministry
will control their industry.
For
almost 10 years now the strategy for the long-term survival of
Russia�s aerospace and defense industrial base has had some basic
characteristics. The first priority has been to try to stay alive
with the income from export sales, while orienting development of new
model iterations toward the export market.
Second,
Russian design bureaus have continued development of new technologies
and, where possible, applied them to the design of existing aircraft
systems to validate their use and effectiveness with an eye toward
eventually incorporating them into a next-generation aircraft system.
Third,
plans for a new fleet of fighters, bombers, airliners, and so forth
have been postponed until the economic situation in Russia stabilizes
and permits some nominal level of regular procurement. In the
meantime, the Russian armed forces and its fleets of aging passenger
aircraft are forced to limp by with what they have, using
modernization and life-extension programs.
A new
round of efforts to support this strategy and reshape Russia�s place
in the aerospace market began almost as soon as President Putin took
office last year. One of his first objectives was to correct what had
been perceived as a period of neglect and mismanagement of the aerospace
sector under his predecessor, Boris Yeltsin. Above all other
shortcomings, exports of defense and aerospace products�which are the
only hope for Russia�s survival as a major industrial power�had been
the subject of endless complaints of corruption, nepotism and charges
that the money generated by these sales was not being put back into
the industry to fund its revival.
Putin
struck not soon after his inauguration in the spring of 2000 with the
first of three organizational initiatives by addressing the problems
associated with defense exports.
One of
Russia�s three state arms export agencies, Rossiskie Technologii, was
liquidated and folded into the second largest of the three,
Promexport. A few months later, in November 2000, Putin removed the
directors of the two remaining arms export agencies�Aleksei Ogarkov
of Rosvooruzheniye and Sergei Chemezov of Promexport�and in the same
executive act ordered the two agencies be merged into a new one,
called Rosoboronexport.
Andrei
Belyaninov, former deputy director of Promexport, was named director
of the new company and almost immediately announced plans to clean
house by furloughing approximately 1,000 of the 2,500 employees he
had inherited. A number of departments and deputy directorships that
existed at Rosvooruzheniye were also eliminated.
However,
positive results of this first rather dramatic change have yet to be
proven. When the formation of the new company originally took place,
analysts both inside and outside of Russia predicted this move could
have only negative aftereffects on the country�s prospects to earn
badly needed hard currency from weapons sales. Contracts with several
export customers that were still in negotiation at the time were put
on hold and have not yet been finalized. ����������
While
this reshuffling was taking place, Russia�s ministers were also awash
in plans for the second initiative�a plan to consolidate the
aerospace industrial base and create economies of scale. Their
objective was to create equivalents to the mammoth consortiums of Lockheed
Martin, Boeing and BAE Systems in the West, although the original
proposal that was floated in the last months of the Yeltsin
government was to combine like firms into single organizations.
The most
famous of these was the proposed government-ordered merger between
the Mikoyan and Sukhoi design bureaus, which are the primary fighter
aircraft producers. Similar plans were made regarding the
amalgamation of Tupolev and Ilyushin, the two largest commercial
aircraft firms; a combination of Almaz and Antei, which produce
almost all Russia�s surface-to-air missile (SAM) systems; and so on
throughout the industrial complex.
Not
surprisingly, these proposals were greeted with little enthusiasm
within the industry and resisted at all levels. A number of the firms
whose mergers were proposed were long-time bitter enemies, but more
importantly, what drove their innovative designs and what was their
most valuable asset was the competition between them�an asset which
would be eradicated by the mergers.
A
retreat has now been made from this proposal and a scenario for a new
set of combinations has been put forward in the last month by deputy
prime minister Ilya Klebanov, who holds the portfolio of control over
the defense industry. Under his plan, the majority of Russian
aerospace firms would be joined into two large holding companies�each
one called a samoletno-vertoletostroitelniy kompleks
(aircraft-helicopter manufacturing complex, or SVSK).
SVSK-1
would be composed of RSK-MiG (the union of the former Mikoyan Design
Bureau and the MiG-29 MAPO plant in Moscow), the Sokol Aircraft
Production Plant in Nizhni-Novgorod, Kamov helicopter design bureau,
Tupolev and all of the series production plants associated with their
product lines. SVSK-2 would be composed of Sukhoi, Ilyushin, Mil, the
Kazan helicopter enterprise and Yakovlev�again, along with all of
their associated series production plants.
This
plan avoids the confrontation between a fighter design bureau that
does not want to cohabit with another fighter design bureau or
helicopter firms that do not want to join with their major
competitors. However, it does not get away from the fact that the
production centers involved in these new unions have little or no
interest in becoming part of a giant conglomerate controlled from
Moscow. The attitude of the series manufacturing plants is that they
turn out the products that actually make money, and they are not
anxious to have authorities in Moscow take a huge bite out of their
proceeds.
Sources
in Moscow predict fairly stiff resistance to this plan from
organizations such as the Irkutsk Aviation Production Association
(IAPO), which manufactures the Su-30MKI fighter for the Indian air
force. IAPO, explained one Moscow-based analyst, �was very aggressive
some years ago in carrying out an extensive privatization, with the
government now holding only about 15 percent of the shares. Having
found some independence from Moscow they will have little interest in
surrendering it now.�
What may
weaken the Russian government�s hand in forcing this plan onto all of
these enterprises is the now-anticipated third act in this
reorganization drama. The present government structure that has
control of the aerospace and defense industries in Russia spread
across five state agencies is projected to be dissolved soon.
Russian
financial newspaper Vedomosti and other Moscow press sources reported
earlier this year that the agencies� functions will be consolidated
into the Ministry of Industry, Science and Technology with Klebanov
or one of his subordinates taking over this ministry and displacing
the current minister, former Yakovlev general designer Aleksandr
Dondukov. The latter has been in a bureaucratic struggle with
Klebanov to take control over the defense and aerospace sector since
he was named the head of this new ministry last year, but if the
proposed scheme is initiated, he will have lost the battle and will
probably no longer have a government position.
At no
time in the last 10 years has been�as there is now�such a
far-reaching and ambitious attempt to restructure so many entities to
such a degree in almost concurrent time frames. This makes a number
of Russia�s aerospace officials look to the future with no small
degree of fear and apprehension.
At
the present time the 'Sukhoi' military-industrial complex controls
14-15% of the global combat aviation market, according to the
Sukhoi's General Director Mikhail Pogosyan. This share, Pogosyan
noted, is expected to increase to 20% in the very near future with
the annual operating budget of the company already at $1 billion. The
budget is expected to grow twofold.
Export of the 'Sukhoi'
combat planes currently comprises about 50% of all Russian military
equipment exports. However, Pogosyan said, sooner or later these
mergers will become a reality. He also expressed his believe that
Russian industry will follow the road to integration.
Currently, the 'Sukhoi' is
working with 'MiG' and 'Yakovlev' design bureaux on the
fifth-generation fighter project in which Sukhoi is the primary
contractor. In addition to that 'Sukhoi' is working on a regional
airliner development with the 'Ilyushin' and 'Boeing' firms. The
airliner is being developed in line with the international standards
and its target market will include Russian and foreign regional
airlines. Pogosyan firmly believes that the success will accompany
only those projects that will manage to attract additional funding
from outside of Russia's federal budget. The approach of 'Sukhoi' to
doing business is concentrated on the task of diversifying the
sources of funding and looking primarily toward the commercial,
non-governmental sources of money. Pogosyan also believes that other
Russian military hardware manufacturers have to invest more in the
development of perspective aircraft using the funding available from
the country's defense budget.
The combat aircraft
modernization program currently underway is in no way interfering
with the progress of the fifth-generation fighter program. "We
are looking for balanced solutions and the work on the new fighter
program does not undermine the modernization efforts." Pogosyan
said that the next-generation fighter is being developed in
accordance with the timetable set by the government. The major task
in the development of this fighter, Pogosyan believes, is the
marriage of avionics and weapon systems with the airframe. In the
October of 2001 Russian President Vladimir Putin has signed an
executive order establishing the aviation holding company 'Sukhoi'.
According to this document, the 'Sukhoi' will have the priority in
development of future combat aviation systems for the Russian
Ministry of Defense. As a part of this process the Russian government
will work to transform the KNAAPO and NAPO aircraft manufacturing
plants into open-stock organization with the various federal
structures holding 100% of its stocks. During this transformation
period 74.5% of the stocks will form the minimum budget of the
'Sukhoi' and 25.5% of the stocks will remain a permanent property of
the federal government. Once the organizational structure of the
company is reformed, all 100% of the stocks will become the
government's permanent property.�
Pogosyan also noted that all Russian strike aircraft and 50%
of the country's fighters carry 'Sukhoi's' trademark.
Russia's
fifth-generation fighter will have dramatically improved aerodynamic
qualities. It design would allow for the 35-degree angle of attack
without possibility of a stall. According to Pogosyan, that flying
over Mach 2 or Mach 3 is not the priority for the new fighter design
- the high speed is the domain of the missiles the aircraft will be
carrying.
Many existing problems in
the development of the new fighter will be solved using new
construction materials and new manufacturing technologies. At the
same time Pogosyan did not elaborate on whether or not the new
fighter will have a forward-swept wing as the Su-47. According to
Pogosyan, the fighter will be delivered to the Armed Forces
"according to the timetable agreed upon with the Russian
Ministry of Defense." Pogosyan emphasized that today 'Sukhoi'
has the resources and capabilities the company did not have just a
few years ago.
The country's hundreds of
aviation companies will be consolidated into a half dozen holding
companies by 2004 in a bid to transform the stagnant industry into a
mean and lean competitor to U.S. and European rivals, the government
announced.
The plan puts a new spin on a years-long industry restructuring by
proposing to clump civil and military aircraft makers together.
By setting a three-year
deadline, the government showed the urgency with which it feels a
revamp is needed. Its 2004 deadline is well ahead of the 2010
deadline that the Russian Aviation and Space Agency and the Industry,
Science and Technology Ministry suggested when proposing the revamp
to the government.
Deputy Prime Minister Ilya
Klebanov told reporters after the government meeting that Russia has
to consolidate its hundreds of aviation companies into a handful of
aviation powerhouses that can compete with the likes of Boeing and
Lockheed Martin of the United States, and the maker of the Airbus,
the European Aeronautic Defense and Space Co.
"There's only three of them in the world, and there are 316 in
Russia," Klebanov said.
This number will be
whittled down to six to seven holding companies, of which one or two
will make aircraft. Only three civil aviation plants will remain,
factories in Voronezh, Ulyanovsk and Kazan that produce Ilyushin and
Tupolev planes. The civil aviation plants, in turn, are to be saddled
with the country's two military giants, the producers of Sukhoi and
MiG fighter jets and helicopters.
Under the plan, one holding
company will combine 10 enterprises including the Tupolev aviation
complex, MiG Russian Aircraft Corp., helicopter designer Kamov,
Aviastar in Ulyanovsk, Aviakor in Samara and Progress in Primorye. A
second holding will unite 15 companies including MiG rival Sukhoi,
the Yakovlev design bureau, the Ilyushin aviation complex, and the
Mil, Rosvertol, Kazan and Ulan-Ude helicopter plants. A third will
bring together the country's 33 engine producers.
Klebanov said the government also wants to set up 10 to 13 more
holdings to lump together other aviation companies such as those
dealing in weapons and avionics.
The deputy prime minister
did not rule out an eventual merger between the makers of the Su and
MiG jets, a proposal that has been floated by the government in the
past and fiercely opposed by both military giants.
A federal audit last year
found that the government maintained a controlling stake in only
seven companies, while it had completely lost control of 94.� The government said Friday that at
least a third of the aviation companies is state-owned, while another
third is partly state-owned. The state has no stakes in the
rest.� The government is
working to increase its ownership in the companies by writing off
their debts.� The Russian
Aviation and Space Agency estimates that endeavor will cost the
government 222 billion rubles ($7.7 billion), of which 14 percent
will come from the federal budget.
Some industry players
welcomed the government's bid to prop up their sagging profits. The
industry, which accounted for up to a quarter of global production in
Soviet times, only managed to roll out nine civil aircraft and 21
military planes in 1999, according to the Audit Chamber. All 21
military planes were sold abroad. By comparison, the Soviet Union
built about 450 civil and 1,000 military aircraft during its glory
days, the chamber said.
The aviation industry
produced 73.8 billion rubles worth of goods last year, while profits
reached 17.1 billion rubles, according to government figures. Output
grew 41.4 percent.� Orders from
the state account for 10 percent to 15 percent of production capacity
these days.
And that is exactly what
has been happening in some aviation companies. As they scramble to
survive, some have been revamping operations, diversifying products
and seeking partnerships with other players.� Fighter producer MiG, for example,
has completed a restructuring that brought design, production,
rollout and servicing under one roof. Sukhoi is carrying out a
similar revamp. Both companies have for several years been pushing
civil aviation programs with modest success.
Perm Motors, producer of
the PS-90 engines that power Ilyushin and Tupolev passenger jets, is
building up a holding, and Lulka-Saturn, designer of engines for
Su-27 fighter jets, and producer Rybinsk Motors are aiming for a
merger.
Co-operation
Why
Is the U.S. Aiding Russia's High-Tech Military Industry?
Russia's high-tech military
industry is the backbone of a planned large-scale modernization
program that Defense Minister Pavel Grachev says will compensate for
troop reductions and compete with American firms on the international
arms market.
The CIA and DIA report that
Russia is readying to test-launch a new generation silo-based ICBM, a
mobile ICBM, and SLBM, and is developing a new ballistic-missile
submarine to go on-line within the next decade.
The U.S. government, in
trying to help Russian "reform," has been promoting and
subsidizing the transfer of American technology and capital to many
of Russia's most advanced military design bureaus and plants. Rather
than abandoning military production for consumer products, these
plants form the core of Russia's conventional and nuclear military
modernization. To remain predominant in the military-industrial
complex, they need Western technology and investment.
�
The Administration, with bipartisan congressional
support, has been providing just that. The Bureau of Export
Administration of the Department of Commerce, the Defense Enterprise
Fund, the Nunn-Lugar Cooperative Threat Reduction Program, and other
government programs and entities are promoting Russian firms that are
not abandoning military production, but have merely opened civilian
production lines to attract American support.
Points to consider
Is Congress serving the nation by helping an increasingly hostile and
unstable Russia to modernize its decaying war machine? Current policy
is inadvertently exacerbating the following problems:
�
Strengthening the un-reformed military-industrial
complex with the means to expand its political base in Russia;
�
Proliferation of high-tech weapons to rogue
regimes;
�
Threats of a revitalized, high-tech military
against Russia's neighbors;
�
New threats to the United States, particularly
through proliferation and strategic nuclear modernization.
Will Russia Have Fifth
Generation Fighter?
The technical condition of
the Russian armed forces is far from ideal. It must be said that the
domestic defense industry is not producing new examples of military
equipment. But they either go immediately for export, or they reach
the Russian army in single examples. So, with each passing year,
Russia`s armed forces grow more and more inferior in equipment to the
modern examples of materiel of the armies of the NATO countries. One
side of the problem is the circumstance that the question of the
financial resources for the development of new examples of military
equipment is extremely keen. For example, of fifth generation
fighters. It previously had been planned that the new fighter would
appear in the Russian military by 2008 - 2009. Up to 1.5 billion
dollars is needed for development. At the same time, for example, in
the United States there is active work under way on a similar project
under the designation of the F-35. Only it is planned to spend up to
23 billion dollars on the development of the new fighter. And another
nearly 200 billion on starting the production and the purchase of
3,000 F-35. So it is possible to maintain with confidence that in a
very few years the U.S. Air Force will receive the new fighter. In
Russia a fundamental battle for the development of the fifth
generation airplane has developed between the MiG and Sukhoy OKB
firms. In which connection, the Russian media has reported more than
once about the fact that Sukhoy OKB interests are lobbying former
Vice Premier and now leader of the Ministry of Industry and Science,
Ilya Klebanov. Accordingly, experts have been evaluating Sukhoy`s
chances as preferred. However, after the dismissal of Klebanov from
the post of vice premier, the Sukhoy OKB`s chances for victory have
declined considerably. And according to the report of a number of
information agencies, for the years immediately ahead, Russia
generally may abandon plans for the creation of a fifth generation
fighter. She will gamble on, most likely, deep upgrade of the
airplanes serving in the inventory of the Russian military until the
fifth generation. Which, of course, is much cheaper and faster, than
the creation of a fundamentally new airplane. In principle, there is
nothing bad in the fact that the interests of the various lobbying
groups are in conflict around the development of new types of
armament. As is done everywhere, even Russia in this situation is no
exception. But it is another thing that the struggle around the
orders for the development and manufacture of military equipment not
be carried out to the detriment of the interests of the state. The
best should win, independent of how high a post the patrons of one
firm or another occupy in the state structures. Although, of course,
much depends on the officials both in Russia and in the U.S., and in
other countries. And their choice isn`t always justified.
Nevertheless, in speaking about the advantages of MiG or Sukhoy
airplanes, the specialists should speak. But it is interesting that
even around the contracts for the construction of already existing
examples of equipment sometimes, serious passions flare up. As, for
example, around the the building of two torpedo boats for China. At
the present time, the situation for the domestic defense industry is also
rather complex. American firms have fixed on India, a traditional
partner of the Russian enterprises of the defense industrial complex.
Who has significantly greater possibilities for standing up for their
interests than the Russians. So the struggle around the distribution
of export order may bear a serious loss to the business reputation of
the Russian companies. The problems of the Russian military
industrial complex and the questions of the upgrade of the military
are very serious and do not give in to quick resolution. But it even
would be good that the don`t forget about them in the government. The
existing programs for the reformation of the military and military
industrial complex fully respond to Russia`s capabilities. The main
thing is to gain their execution. Otherwise, in several years there
will be nothing to upgrade and reform
In 1998, the first real
steps were taken in the development of military co-operation between
Russia and NATO. Representatives of the state-owned company
Rosvoorouzhenie, the Russian ministry of Defense and the Russian
foreign office participated in working parties for national armaments
directors at the NATO conference. A series of possible joint projects
was specified: modernisation of T-72 tanks to NATO standards in central
and eastern European countries; building stability and fire safety
into the design of military vessels; creating systems for rescuing
submarine crews; organising a unified air defense system for the
European continent and an aerospace monitoring and air traffic
control system.
Suggested co-operative
projects include the modernisation of projectiles for the Grad salvo
rockets, the development of an active armour protection system for
Arena type tanks for application to French AMX-30B tanks; the mounting
of French thermal imagers on the Russian BMP-3, and equipping the
RS30 Smerch with French navigational equipment.
Setting up the Arena system
on a French AMX-30B tank significantly increases the stability of the
vehicle and, therefore, its competitiveness, by comparison, for
example, with the Russian T-80U tank.
Since 1992 the Ministry of
Defense has not bought a single plane from RAC MiG.
This could well be the
revamped MiG-29SMT, raising a familiar classic to a performance level
to rival the next generation of fighter aircraft and at the same time
extending the effective life of the plane by 10-15 years. At this
point, military hot heads start to enthuse about the unlimited market
for MiG-29 upgrades, forgetting that an upgrade programme, though a
costly exercise, is around ten times cheaper than buying a brand new
aircraft.
GE Aircraft Engines
GE Aircraft
Engines and the Sukhoi Design Bureau, of Russia, have signed a
contract for GE CT7-9B turboprop engines to power the Sukhoi S-80
multipurpose STOL (short takeoff and landing) aircraft.
Two
instrumented CT7-9B engines for flight testing will be delivered to
Sukhoi by early 1996. Production of the GE-powered Russian S-80
transport aircraft is planned for 1997. Sukhoi estimates that as many
as 650 S-80s could be sold by the year 2006.
Originally
designed for the Russian domestic market, the new Sukhoi S-80 is
characterized by rugged two-beam construction. The S-80 can be
configured either as a 26-passenger airline or as a 6,800-pound cargo
aircraft, capable of transporting Jeep-type vehicles or standard
aviation containers,
CT7 engines
have powered Saab 340 aircraft in commercial service since 1984 and
Airtech (CASA/IPTN) CN235 aircraft since 1987. The engine has also
been selected to power the Let L610G aircraft, which is undergoing
flight testing in the Czech Republic.
The MIG-29,
Russia and Eastern Europeans
With the end of the Soviet
Union and the abandonment of weapons in former East European nations,
the East Europe area provides a chunk of the market and source of
technological secrets. Logistic support for 23 ex-East German
aircraft now in the inventory of the German Air Force in the
framework of a joint venture with Russia, "westernization"
contracts plus proposals for other MiG-29 operators (e.g., Hungary,
Bulgaria, Poland, Romania) means that EADS actually inherits lots of
client nations and makes deals with industrial corporations in the
eastern part of Europe. These include Aerostar, Romania; Danubian
Aircraft Company, Hungary; MAPO, Russia; Roswoorushenije, Russia; and
Terem, Bulgaria.
German-Russian joint
venture company MiG Aircraft Product Support (MAPS) has concluded
agreements with both Bulgaria and Romania to service and partly
upgrade their MiG-29 fighter aircraft fleets, providing the company
with a regional dominance in the market.
The joint venture is 50%
held by Germany's DaimlerChrysler Aerospace (Dasa) [now EADS] with
the remainder held by Russia's MIG-MAPO and arms export agency
Rosvoorouzhenie. The work excludes modifications to the MiG-29's
RD-33 engines.
The involvement of EADS in
the maintenance and eventual upgrade of MiG-29 aircraft came as a
result of German unification when the Luftwaffe inherited 24 MiG-29s.
The need to
"westernize" these aircraft to NATO standard provided the
impetus to consider the market potential in Central and Eastern
Europe.
It seems that the original
reluctance by many MiG-user countries, after the fall of the Berlin
Wall a decade ago, to continue operating Soviet-era equipment and
purchase Western equipment instead has been replaced by a more
realistic assessment that existing equipment will have to be used for
some time to come and that the introduction of Western equipment will
be gradual.
Memoranda of Understanding
(MoU) were concluded with Bulgaria last October and with Romania the
following month, with MAPS also seeing potential for further
agreements with Hungary and Slovakia, which operate around 50 MiG-29s.
The organization has already entered into partnership with Hungary's
Danubius Aircraft company.
Initial modifications for
Romania and Bulgaria will focus on bringing the aircraft up to
minimal NATO standards, including an identification friend or foe
transponder; VHF/UHF and emergency communications equipment; the
introduction of English language equipment; and collision- warning
lights. A further three levels of upgrade can be carried out
including new central data processing unit, radar, weapon systems and
electronic countermeasures.
MAPS's Bulgarian agreement,
which includes involvement from local partners, covers a level-two
fleet maintenance program to extend by 1,100h or nine years the air
force's 21-strong MiG-29 fleet.
The Romanian MoU covers two
projects. MAPS will carry out a life-extension program on an initial
two MiG-29A fighters and two MiG-29UB trainers, bringing the aircraft
to level-two standard. The modifications could also be extended to
cover Romania's remaining fleet of around 14 aircraft.
A further upgrade project
will be conducted by EADS with Romania's Aerostar and Elbit of
Israel. One MiG-29A will be converted into a post level-three
demonstrator, with work to be completed before year-end. The aircraft
will then be displayed to other European MiG-29 operators.�� The 'Sniper' project will employ
avionics from Romania's modified MiG-21 Lancer and new systems
including a modular multi-role computer linked to a 1553B databus.
The aircraft will also feature hands-on throttle and stick controls,
a wide-angle head-up display and two digital displays.
EADS officials have also
confirmed that the company is holding talks with two European air
forces regarding a possible upgrade and life-extension program for
their Sukhoi Su-22M4 'Fitter-K' attack and Su-22UM3 'Fitter-G'
trainer aircraft. Bulgaria, the Czech Republic, Poland and Slovakia
currently have around 194 Su-22s in their inventories.
EADS teams with GE for the
definition phase of the Mako advanced trainer/light combat aircraft
family
A teaming agreement has
been signed between EADS Military Aircraft, Munich, and GE Aircraft
Engines, Evendale/Ohio, for the definition phase of the Mako family
of advanced trainer and light combat aircraft. The cooperation
between the two companies is targeted to work on the definition of
the integration of a derivative of the GE fighter engine F414-GE-400.
EADS Military Aircraft and
GE together will define the technical details of the Mako powerplant
installation and the single-engine features for the F414. In addition
to the hardware-orientated tasks, the team will elaborate all
specifications and documentations necessary to prepare the launch of
the development phase, which is planned for mid 2004. The 98 kN-class
propulsion system for the Mako aircraft family is designated F414M (M
for Mako) and will incorporate the single-engine features of the
basic F414, which is in service with the U.S. Navy�s F/A-18E/F �Super
Hornet� since the year 2000.
�Due to the fact that the
engine, based upon its successful predecessor F404, shows impressive
performance data and comes closest to the Mako design criteria, we
feel that we have made the right selection�, said Max Heyder, Mako
Program Manager at EADS Military Aircraft. �In particular for the
advanced trainer version of the Mako family, we foresee a significant
reduction in life-cycle cost , as this aircraft will be flown with a
derated engine.� �Another aspect within our down-select process was
GE�s offer for participation of European engine manufacturers in the
F414M program�, Heyder added.
Mako is one of the
contenders for the future Advanced European Jet Pilot Training
(AEJPT). The related feasibility study has been signed recently. The
Mako Advanced Trainer is designed to ensure an optimum transition to
newest-generation high-end combat aircraft. Thanks to its
high-performance level together with its leading-edge cockpit design,
the aircraft will open a new dimension of economic lead-in fighter
training and companion training. The air forces will be offered an
advanced trainer which is highly representative to their high-end
fighters and thus will allow to down-load training tasks to an
unprecedented extent.
EADS is a global aerospace
and defense leader, and the world's second largest in terms of
revenues. EADS maintains a workforce of more than 100,000 and is a
market leader in defence technologies, commercial aircraft,
helicopters, space, military transport and combat aircraft, as well
as related services. Its family of leading brands includes the
commercial aircraft maker Airbus; Eurocopter, the world's largest
helicopter manufacturer; Astrium, the space company and MBDA, the
world's second largest missile company. EADS is also the biggest
partner in the Eurofighter consortium and heads the A400M military
transport aircraft programme. EADS has more than 70 facilities in
France, Germany, Spain and the UK. It is active in markets around the
world, including the U.S. and Asia.
Boeing, Sukhoi,
Ilyushin Initiate Regional Jet
The Boeing
Company, Sukhoi Civil Aviation, and the Ilyushin Design Bureau today
announced a cooperative effort of jointly designing, manufacturing,
certifying, marketing, selling and servicing a new regional jet for
global operations.
We have agreed
to work jointly with Sukhoi and Ilyushin to produce a new regional
jet below 100 seats that meets the market's needs effectively. The
regional market is an exciting and challenging one, one that is
consistent with our fundamental belief that people want to fly
directly, point-to-point, with fast, efficient jet service.
A joint program
with Ilyushin and Boeing is a wonderful opportunity to address the
needs of the regional jet market in Russia, the CIS and globally,
Pogosyan said.
Sukhoi Civil is
the newly incorporated subsidiary of Sukhoi, one of the world's
largest producers of military aircraft. Ilyushin is one of Russia's
most successful civil airplane enterprises, with over 1,000 Ilyushin
aircraft flying internationally. Boeing has other significant
cooperative programs in Russia, including joint Design and Technology
Centers, titanium programs, new trans-Siberian routes, International
Space Station and Sea Launch.
Lockheed Martin
Cooperative programs among
various Russian industry teams working with Lockheed Martin companies
represent nearly $7 billion in total value, including current revenue
and backlog orders. The ventures currently employ some 700 people in
the United States and have the potential to increase that number tenfold
while creating thousands of jobs in Russia.
A brief description of the cooperative
ventures follows.
International Launch
Services:
San Diego-based International Launch Services (ILS) is a joint
venture stock company established in 1995 to market two of the
world�s premier launch vehicles, the American-built Atlas and the
Russian-built Proton. ILS is owned equally by Lockheed Martin
Commercial Launch Services and Lockheed Khrunichev Energia
International. Together they now offer two fully-mature space launch
systems and have an experience base of over 450 flights.
Launch Vehicles: Lockheed Martin
Astronautics, Denver, and International Launch Services will use the
RD-180 rocket engines developed by RD AMROSS LLC to power the Atlas
IIAR and the commercial variant of the Evolved Expendable Launch
Vehicle (EELV). The EELV is being developed as a candidate for the
U.S. Air Force�s competition to select the future family of launch
vehicles.
RD AMROSS LLC is a joint venture of NPO
Energomash and UTC Aerospace that will build the RD-180 solely for
Lockheed Martin. The engines will be fabricated at NPO Energomash
facilities in Khimky, Russia. Compared to the current-generation
Atlas IIAS which requires nine engines to power the rocket, the
RD-180-powered Atlas IIAR will require only two. The RD-180 is
simpler to operate and build, and uses nearly 10,000 fewer parts than
the previous generation. The first Atlas IIAR launch powered by the
Russian-built RD-180 engines is planned for later this year; the first
EELV is planned for 2001.
The cooperative venture underscores
Lockheed Martin�s commitment to the global commercial launch vehicle
market and strengthens the corporation�s ties to Russian space
interests.
Lockheed Martin
Intersputnik: Lockheed Martin Intersputnik, or LMI, is a joint venture
company formed by the Lockheed Martin Corporation and the
Intersputnik International Organization of Space Communications. LMI,
based in London, draws upon the expertise and capabilities of the two
companies to provide a full range of worldwide communications
services.
Initially, LMI will provide broadcast,
fixed telecommunications and Very Small Aperture Terminal services to
customers in Eastern Europe, South Asia, Africa and the Commonwealth
of Independent States. LMI plans to place a constellation of
satellites into orbit and lease capacity on them for voice, video,
data and fax services, direct-to-home broadcast as well as mobile
services to customers worldwide.
LMI combines unmatched expertise in satellite
communications. The substantial experience of Intersputnik as a
global satellite service provider is combined with Lockheed Martin�s
extensive satellite, launch and ground systems capabilities.
Intersputnik is an international
intergovernmental organization which operates a satellite
communications system and provides international, regional and
domestic communications worldwide. The organization was established
more than 25 years ago and has 22 member countries. Intersputnik has
been providing its customers in the Atlantic, Indian and Pacific
regions a wide range of telecommunications services, including voice,
data, television and audio broadcasting in international, domestic
and regional public networks as well as establishment of videoteleconferencing
and business communications networks.
Lockheed Martin
Intersputnik-1 (LMI-1): Lockheed Martin Missiles & Space is building
the LMI-1 satellite for Lockheed Martin Intersputnik. The satellite,
based on the A2100 geostationary bus, will provide direct broadcast
satellite television and audio service, as well as communications
services to Asia and portions of Europe, Africa and Australia. The
satellite is scheduled for launch later this year aboard an
International Launch Services Proton booster. LMI-2 and LMI-3 are
planned for launch in 1999 and 2000, respectively.
Iridium: A space-based
telecommunications system that will provide global voice, fax and
paging services, Iridium relies on a constellation of 72 low-earth
orbit satellites. The Iridium satellite bus, based on the modular LM
700, is built by Lockheed Martin Missiles & Space. The Iridium
bus is fabricated for prime contractor Motorola Satellite
Communications Group for Iridium LLC, which owns and operates the
Iridium constellation.
The Khrunichev State Research and
Production Space Center provides launch services with the Proton
booster on behalf of Motorola. Khrunichev, one of the world�s premier
aerospace and manufacturing facilities, develops launch vehicles,
orbital stations and other space equipment.
International Space
Station:
The International Space Station will be an earth-orbiting laboratory
that will house scientific missions from the various space-faring
nations cooperating in its development.
Lockheed Martin Missiles & Space
builds the solar arrays that will provide power to the International
Space Station, as well as the joints that will ensure the position of
the solar arrays is maintained to maximize power generation. The
solar arrays, the largest ever built for space flight, measure 108
feet by 38 feet. They are developed for the Boeing Company, the
International Space Station prime contractor for NASA.
Khrunichev is building the Functional
Cargo Block, the main node for the science laboratories on the International
Space Station, for the Russian Space Agency in coordination with
NASA.
Mir Solar Array: A solar array containing
panels built by Lockheed Martin Missiles & Space became the first
U.S.-developed component of the Russian space station Mir. The Mir Cooperative
Solar Array (MCSA) provides six kilowatts of power, boosting Mir's
energy-production facilities and enabling microgravity and
life-science research, as well as refurbishment and resupply of the
Mir complex. The array was delivered to Mir in November 1995.
The MCSA Program was managed as an
integrated product team consisting of NASA, Boeing-Rocketdyne
Division, Lockheed Martin Missiles & Space, and Russia's Rocket
& Space Corporation-Energia.
National Security: Lockheed Martin Advanced
Environmental Systems, Inc., Albuquerque, N.M., is working with the
Russian Federation government and the U.S. Defense Special Weapons
Agency to remove the solid fuels in SS-22 and SS-24 strategic
missiles via a contained burn process to meet the requirements of our
strategic arms reduction treaties. This effort, Solid Rocket Motor
Disposition, requires the design, construction, and operation of
facilities in Russia.
An-70: Antonov with UK company Air Foyle
for the UK Royal Air Force's short-term strategic airlift requirement
and Antonov's An-70 is also being considered for the European
multi-national future transport aircraft requirement.
UKRAINE
The Defense Department has
announced three industrial partnership awards designed to assist
Ukraine in converting its former Soviet military production
facilities into commercial joint ventures. These awards bring the
number of joint ventures in Ukraine to seven.
The projects total $64.60
million in cash investments. Through the Department of Defense (DoD)
Cooperative Threat Reduction (CTR) program, the U.S. government will contribute
$47.46 million to these projects. The seven U.S. firms involved will contribute
a total of $17.14 million in cash and technology and licensing valued
at over $50 million.
The following Defense
Nuclear Agency contract awards have been announced:
- Approximately $4.80
million has been awarded to ABB Combustion Engineering, Windsor,
Conn., to form a closed joint stock company with Ukraine's Monolit,
located in Karkiv, to convert a manufacturer of aircraft, spacecraft
and missile electrical, control and guidance systems into a
manufacturer of digital instrumentation and control systems for
nuclear power plants. ABB Combustion Engineering will contribute
technology and licensing valued at $20 million to the joint venture.
- Approximately $3.03
million has been provided to Die Casters Incorporated, Wayne, N.J.,
to create a joint venture with Ukraine partner Meridian (formerly
Korolev), Kiev, to convert a million electronic and radar equipment
facility into a factory that manufactures die cast consumer products,
for example, automotive parts and hand tools. The project will
upgrade Meridian's die casting capability by installing process
monitoring and control systems and remanufactured die casting
machines. Die Casters incorporated will contribute $1.07 million to
the project.
- Approximately $2.66
million has been awarded to American Industrial Development (AID)
Corporation, Boston, Mass., for a joint venture with Ukraine's
Orizon, located in Smela, to convert an electronic apparatus and
space navigation equipment plant to a polyvinyl chloride window and
door assembly facility. AID Corporation will contribute $469,979 to
the joint venture.
Previous DoD funded
industrial partnerships in the Ukraine created production ventures in
construction and civil engineering, pre-fabricated housing, nuclear
electronic control instrumentation and cellular telephones. The
projects were initiated under a $50 CTR implementing agreement
between the DoD and the Ministry of Machine Building,
Military-Industrial Complex and Conversion of Ukraine.
CTR program assistance to
Ukraine for defense conversion helps reduce the threat of the
proliferation of weapons of mass destruction; assists Ukraine in
building a peaceful, commercially viable market economy while
reducing its excess military industrial capacity; and promotes
opportunities for U.S. industry's entry into a potentially large
market for consumer goods and services.
The possibility of a Transatlantic,
Asiatic-Atlantic and/or Euro-Asiatic Merger:
With the
consolidation of the defense and aerospace industry, it is very
possible that a large American and large European company could merge
in a transatlantic consolidation.�
With privatization in Russia a large Russian company may merge
with an outside firm.�� In fact
the world's largest maker of missiles, Lexington, Massachusetts-based
Raytheon the US's #3 aerospace and defense firm, behind Boeing and
Lockheed Martin, agreed to a joint venture with France-based Thales
to form a joint air-defense venture, Thales-Raytheon Systems.
Raytheon is selling its aeronautics business soon to focus on
electronics, but with the current environment would it have to be an
American purchase of the aeronautic business or would a European
company buy it?�
EADS and MIG
created MAPS for the upgrade of east European Mig-29s, is this the
beginning of greater euro-asiatic cooperation?
Northrop
Grumman the number 4 US company is cosying up to EADS, exploring
alliance possibilities to share surveillance and reconnaissance
defense-electronics technology.�
The Joint Strike Fighter project between US and the UK could
put a lot of dollars towards a merger between BAE and Lockheed
Martin.
If the tripartite
organization successfully walks
the tightrope and gets additional regional pillars created, how would
these regional organizations relate to a globalized security
environment?
|
Nation
|
Region
|
Budget 2020 $b
|
Budget 2040 $b
|
Alliance
|
UN
Security Council
|
|
|
|
|
|
|
|
|
CIS
|
CIS
|
30
|
|
Tripartite
|
Permanent/Veto
|
|
N.
America
|
N.
America
|
350
|
|
Tripartite
|
Permanent/Veto
|
|
EU
|
Europe
|
250
|
|
Tripartite
|
Permanent/2
Veto
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub
Saharan Africa
|
OAU
|
|
|
|
General
Assembly
|
|
South
Asia
|
Middle
East
|
|
|
|
General
Assembly
|
|
India
|
|
|
|
Partner
|
General
Assembly
|
|
S.
America
|
S.
America
|
|
|
Partner
|
General
Assembly
|
|
China
|
East
Asia
|
|
|
|
Permanent/Veto
|
|
MAGREB
|
Mediterranean
|
|
|
Med
Partner
|
General
Assembly
|
|
Mexico
|
N.
American
|
|
|
Member
|
General
Assembly
|
|
Japan
|
Pacific
|
|
|
Partner
|
General
Assembly
|
|
Republic
of Korea
|
Asian
|
|
|
Partner
|
General
Assembly
|
|
S.E.
Asia
|
S.E.
Asia
|
|
|
Partner
|
General
Assembly
|
Role
for the UN and the Security Council
The Charter of the United
Nations was signed in San Francisco on 26 June 1945 by 50 nations. On
24 October 1945, the United Nations formally came into being.
Article 51 of the UN
Charter establishes the inherent right of individual or collective
self-defense of all UN member countries. It sanctions measures they
might take in the exercise of this right until such time as the UN
Security Council has taken the steps necessary to maintain
international peace and security. It stipulates, in addition, that measures
taken by member countries under the terms of this Article must be
immediately reported to the UN Security Council and do not in any way
affect the authority and responsibility of the Security Council to
take what actions it deems necessary to maintain or restore
international peace and security.
The relevance of the UN
Charter to the North Atlantic Alliance is twofold. First, it provides
the juridical basis for the creation of the Alliance; and second, it
establishes the overall responsibility of the UN Security Council for
international peace and security. These two fundamental principles
are enshrined in the North Atlantic Treaty signed in Washington on 4
April 1949. The preamble to the Treaty makes it clear from the outset
that the UN Charter is the framework within which the Alliance
operates. In its opening phrases, the members of the Alliance
reaffirm their faith in the purposes and principles of the Charter.
In Article 1 they also commit themselves both to settling international
disputes by peaceful means in accordance with the goals of the
Charter and to refraining from the threat or use of force in any
manner inconsistent with the purposes of the UN. Article 5 of the
Treaty makes explicit reference to Article 51 of the Charter in
asserting the right of the signatories to take, individually or
collectively, such action as they deem necessary for their
self-defense, including the use of armed force; and, it commits the
member countries to terminating the use of armed force in restoring
and maintaining the security of the North Atlantic area when the UN
Security Council has itself taken the measures necessary to restore
and maintain international peace and security.
Further reference to the UN
Charter is to be found in Article 7 of the North Atlantic Treaty,
which reminds signatories of their rights and obligations under the
Charter and reaffirms the primary responsibility of the UN Security
Council for the maintenance of peace and security. And finally, in
Article 12, a clause was included in the Treaty providing for it to
be reviewed after ten years, if any of the Parties to it so
requested. It stipulated that the review would take place in the
light of new developments affecting peace and security in the North
Atlantic area, including the development of universal and regional
arrangements under the UN Charter.
The North Atlantic Treaty
came into force on 24 August 1949. None of the Parties to it have
requested a review of the Treaty under Article 12, although at each
stage of its development the Alliance has kept the implementation of
the Treaty under continuous review for the purpose of securing its
objectives. The direct relationship between the Treaty and the
Charter of the United Nations is and will remain a fundamental principle
of the Alliance.
From 1949 to the present
day, the formal link between the United Nations and the North
Atlantic Alliance has remained constant and has manifested itself
first and foremost in the relationship between their respective
founding documents. However, for most of this period, working
relations between the institutions of the United Nations and those of
the Alliance remained limited. In 1992, the situation changed.
In July 1992, against the
background of growing conflict, NATO ships belonging to the
Alliance's Standing Naval Force Mediterranean, assisted by NATO
Maritime Patrol Aircraft, began monitoring operations in the Adriatic
in support of a United Nations arms embargo against all republics of
the former Yugoslavia. In November 1992, NATO and the Western
European Union (WEU) began enforcement operations in support of UN
Security Council resolutions aimed at preventing the escalation of
the conflict.
The readiness of the
Alliance to support peacekeeping operations under the authority of
the UN Security Council was formally stated by NATO Foreign Ministers
in December 1992. The measures already being taken by NATO countries,
individually and as an Alliance, were reviewed and the Alliance
indicated that it was ready to respond positively to further
initiatives that the UN Secretary General might take in seeking
Alliance assistance in this field.
A number of measures were
subsequently taken, including joint maritime operations under the
authority of the NATO and WEU Councils; NATO air operations; close
air support for the United Nations Protection Force (UNPROFOR); air
strikes to protect UN "Safe Areas"; and contingency
planning for other options which the UN might take.
In December 1995, following
the signature of the Bosnian Peace Agreement in Paris on 14 December,
NATO was given a mandate by the UN, on the basis of Security Council
Resolution 1031, to implement the military aspects of the Peace
Agreement. A NATO-led Implementation Force (IFOR) began operations to
fulfill this mandate on 16 December. Details of the work of IFOR and
its subsequent replacement by a NATO-led Stabilization Force (SFOR)
in December 1996, are also described in Chapter 5. Throughout their
mandates both multinational forces have worked closely on the ground
in Bosnia and Herzegovina with other international organizations and
humanitarian agencies, including those of the United Nations, such as
the UN High Commissioner for Refugees (UNHCR) and the UN
International Police Task Force (IPTF).
In February 1998, after discussions
with non-NATO contributors to SFOR, the North Atlantic Council
announced that, subject to the necessary mandate from the UN Security
Council, NATO was prepared to organise and lead a multinational force
to continue the work in Bosnia and Herzegovina following the end of
SFOR's mandate in June 1998. The new force retains the name
"SFOR", reflecting the continuing need for stabilization of
the Bosnian situation and for laying the foundations for permanent
peace in the region.
From the onset of the conflict
in Kosovo in 1998 and throughout the crisis, close contacts were
maintained between the Secretary General of the United Nations and
the Secretary General of NATO. Actions taken by the Alliance in
support of UN Security Council resolutions both during and after the
conflict and the role of the Kosovo Force (KFOR) established on the
basis of UN Security Council resolution 1244 of 12 June 1999 to
provide an international security presence as the prerequisite for
peace and reconstruction of Kosovo.
NATO's role in crisis
management in the Balkans has led to an intensification of
cooperation with the UN. The Secretary General of NATO reports
regularly to the UN Secretary General on progress in NATO-led
operations and on other key decisions of the North Atlantic Council
in the area of crisis management. Increased sharing of information
between NATO and the UN also takes place in the context of the
international campaign against terrorism, following the 11 September
attacks on the World Trade Centre in New York and the Pentagon in
Washington. In general, working contacts between the two
organizations have become more frequent and a number of high level
visits take place between the UN and NATO every year. The UN remains
at the core of the wider institutional framework within which the
Alliance operates.
Globalization of Security
The globalization of the
war on terrorism almost begs the question of whether there is a
growing globalization of security.�
Perhaps the way to look at it is to see in terms of layers:� There is a global layer, an
OSCE/NATO/CoE layer, individual pillars, and then nation-states.� With the debate over Iraq you see
tensions between the layers and between pillars. Notice however that
there is no Islam/Arab League/OPEC pillar and the UN Security Council
does not have a veto for it.�
Would a Clash of Civilizations war in the Middle East be a
step towards globalization of security?
�
BIBLIOGRAPHY
MILITARY‑INDUSTRIAL
COMPLEX
A
Working Bibliography of MHI Sources
UNITED STATES ‑
BEFORE WWII
Blum,
Albert A.� "Roosevelt, the
M‑Day Plans, and the Military‑Industrial
Complex."� Mil Aff
36 ����������� (Apr 1972):� pp. 44‑46.� Per.
Cooling,
Benjamin F.� Gray Steel and
Blue Water Navy:� The Formative
Years of America's ����������� Military‑Industrial
Complex, 1881‑1917.�
Hamden, CT:� Archon,
1979.� 286 p.� VF373C66.
Gough,
Terrence J.� "Origins of the
Army Industrial College:�
Military‑Business Tensions After ����������� World War I."� Arm Forces & Soc 17 (Wtr
1991):� pp. 259‑75.� Per.
����������������������� Argues that
rivalry with businessmen over wartime procurement roles led
logistical officers to professionalize & estab the college.
Molander,
Earl A.� "Historical
Antecedents of Military‑Industrial Criticism."� Mil Aff 40 (Apr 1976):� ����������� pp.
59‑63.� Per.
U.S. ‑ AFTER WWII
Baumgartner,
John S.� The Lonely
Warriors:� Case for the
Military‑Industrial Complex.�� LA:� Nash, � 1970.� 237 p.� HC110D4B38.
Carey,
Omer L., ed.� The Military ‑
Industrial Complex and United States Foreign Policy.� Pullman:� ������� WA
State U, 1969.� 66 p.� HC110D4 M5.
Cooling,
B.F., ed.� War, Business,
and American Society.� Port
Washington, NY:� Kennikat, 1977.� 205
p.� HC110D4W34.
Dickson,
Thomas I., Jr.� "Military
Industrial Complex."� Mil
Rev (Dec 1971):� pp. 29‑35.� Per.
Gorgol,
John F.� The Military ‑
Industrial Firm:� A Practical
Theory and Model.� NY:� Praeger, ����������� 1972.�
143 p.� HD9743U6G6.
Horowitz,
David, ed.� Corporations and
the Cold War.� NY:� Monthly Rev, 1969.� 249 p.� ����������� HC110D4C6.
Kaufman,
Richard F.� The War
Profiteers.�
Indianapolis:� Bobbs‑Merrill,
1970.� 282 p.� UC267K34.
Koistinen,
Paul A.� The Military‑Industrial
Complex:� An Historical
Perspective.� NY:� Praeger, ����������� 1979.�
168 p.� HC110D4K64.
Lisk,
Percy F., Jr.� "The Army
and Air Force Exchange Service:�
Its Relations with the Retail ����������� Economy."� MA thesis, U of PA, 1950.� 44 p.� UC753L57.
����������������������� Succinct hist, 1866‑1950,
Chap 2.
Melman,
Seymour, ed.� The War
Economy of the United States:�
Readinger on Military Industry and �� Economy.�
NY:� St Martin's,
1971.� 247 p.� HC110D4M42.
Proxmire,
William.� Report from
Wasteland:� America's Military‑
Industrial Complex.�
NY:� ����������� Praeger, 1970.� 248 p.� HC110D4P76.
Pursell,
Carroll W., Jr.� The
Military‑Industrial Complex.� NY:�
Harper & Row, 1972.�
342 p.� ����������� HC110D4P87.
Rice,
Berkeley.� The C‑5A
Scandal:� An Inside Story of
the Military Industrial Complex.�
Boston:� ����������� Houghton Mifflin, 1971.� 238 p.� UH351C5R5.
Rosen,
Steven, ed.� Testing the
Theory of the Military‑Industrial Complex.� Lexington, MA:� ����������� Lexington,
1973.� 311 p.� HC110D4R64.
Yale,
Wesley W.� "The Military
Industrial Complex."� Mil
Rev (Sep 1970):� pp. 45‑50.� Per.
OTHER NATIONS
Borkin,
Joseph.� The Crime and
Punishment of I.G. Farben.�
NY:� Free Press,
1978.� 250 p.� ����������� D804G43I33.
Carroll,
Berenice A.� Design for
Total War:� Arms and Economics
in the Third Reich.� The
Hague:� ���������� Mouton, 1968.�
311 p.� HC286.4C3.
Dubois,
Josiah E., Jr.� The Devil's
Chemists.� Boston:� Beacon, 1952.� 374 p.� D804G43I333.
Reimann,
Guenter.� Patents for Hitler.� NY:�
Vanguard, 1942.� 316
p.� D800R44.
Sasuly,
Richard.� I.G. Farben.� NY:�
Boni & Gaer, 1947.�
312 p.� HD9654.9II5S3.
Schweitzer,
Arthur.� Big Business in the
Third Reich.� NY:� Harper, 1941.� 203 p.� HC286.3S463.
Simpson,
Kemper.� Big Business,
Efficiency and Fascism.�
NY:� Harper, 1941.� 203 p.� HD2785S55.