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Friday, December 31, 2010

China prepares for war 'in all directions'

Peter Foster, Beijing
December 31, 2010

.CHINA is preparing for conflict ''in every direction'', its Defence Minister says.

''In the coming five years, our military will push forward preparations for military conflict in every strategic direction,'' General Liang Guanglie said in an interview published by state-backed newspapers in China.

''We may be living in peaceful times, but we can never forget war, never send the horses south or put the bayonets and guns away.''

Advertisement: Story continues below China has repeatedly said it is planning a ''peaceful rise'', but the pace and scale of its military modernisation has alarmed many neighbours, including Japan, which described the build-up of its armed forces as a ''global concern''.

Tension between China and India also emerged during a mid-December visit to Delhi by Chinese Prime Minister Wen Jiabao. Indian leaders contend that China is being provocative in Kashmir as it grows closer to Pakistan, China's ally and India's nemesis.

China has infuriated India by starting to issue special stapled-paper visas - rather than the standard visa - for anyone in Indian-controlled Kashmir travelling to China, on the grounds Kashmir is a disputed territory.

China later objected to including a top Indian general responsible for Kashmir in a military exchange. In response, Indian officials angrily suspended military exchanges between the countries.

The most visible evidence that these problems were deepening came in the joint communique issued by the two nations at the end of Mr Wen's visit. China typically demands that nations voice support for the one-China policy, which holds that Taiwan is an inalienable part of China. In the past, India has agreed to such language, but this time it was omitted, a clear sign of Delhi's irritation.

General Liang's remarks came at a time of increasingly difficult relations between the Chinese and US armed forces, which a three-day visit by his counterpart, Robert Gates, was intended to address.

A year ago, China froze substantive military relations in protest at US arms sales to Taiwan and relations deteriorated further this summer when China objected to US plans to deploy a nuclear aircraft carrier, the USS George Washington, in the Yellow Sea off the Korean Peninsula.

China also announced this month it was preparing to launch its own aircraft carrier next year. The news emerged a year earlier than many US defence analysts had predicted.

China is also working on a ballistic missile that could sink aircraft carriers from afar, fundamentally reordering the balance of power in a region dominated by the US since the end of World War II.

In an interview in Japan this week, Admiral Robert Willard, a US Navy commander, said he believed the Chinese anti-ship missile had already achieved ''initial operational capability'', although it would require years of testing. Analysts remain divided over whether China is initiating an Asian arms race. Even allowing for undeclared spending, China's annual defence budget is still less than one-sixth of America's $US663 billion ($A651.5 billion) a year, or less than half the US figure when expressed as a percentage of GDP.

However, in a speech earlier this year, Mr Gates warned that China's growing military might ''threatens America's primary way to project power and help allies in the Pacific''.

General Liang also pledged that China's armed forces would increasingly be self-reliant when it comes to technology, an area in which the People's Republic lags behind the West.

''The modernisation of the Chinese military cannot depend on others,'' he said. ''In the next five years, our economy and society will develop faster, boosting comprehensive national power. We will take the opportunity and speed up modernisation of the military.''

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China's Military Power is Getting Stronger

All Pakistanis welcome Chinese military base

BAE Job Cuts 'Will Wipe Out British Skills'

BAE Systems (LSE: BA.L - news) has confirmed it intends to cut almost 1,400 jobs following the Government's defence review, which axed the Harrier and Nimrod aircraft.

A consultation has begun with staff and unions at six of the firm's sites and two RAF bases, in a move that has sparked warnings of a future UK skills shortage.

BAE Systems' managing director of Military Air Solutions, Kevin Taylor, said the cutbacks were designed to ensure the firm remained competitive.

"I appreciate this is difficult news for our people and we are committed to working with employees and their representatives to explore ways of mitigating the potential job losses," he said.

BAE's announcement drew scathing criticism from unions.

Unite's Bernie Hamilton said the job losses were "a tragedy for the workforce and for Britain".

"The coalition Government's Christmas present to over a thousand skilled workers who support Britain's armed forces is the sack," he said.

"Legendary planes like the Lancaster used in World War Two by the dambusters will never be built in the UK again.

"The country that gave the world the revolutionary Harrier jump jet will lose the know-how to build an aircraft like this."

Keith Hazelwood of the GMB said the announcement was a "devastating blow for UK manufacturing and the local communities".

"GMB will be seeking detailed meetings with BAE Systems to see exactly where the axe is falling and what steps if any can be taken to mitigate these job losses," he said.

BAE said the cutbacks at Chadderton, Prestwick, Yeovil and RAF Kinloss were associated with the cancellation of the Nimrod MRA4 programme.

At Farnborough and RAF Cottesmore the potential job losses are down to the Harrier fleet's early withdrawal from service, the firm said, while the Samlesbury and Warton sites are affected by both the Nimrod and Harrier decisions.

In addition, BAE Systems said its Saudi Arabia divison had begun consultations with employee representatives on 90 potential job losses in its UK business, predominantly at Samlesbury.

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Harrier Jump Jet and F-35 Lightning II Strike Fighter Jets

F35 hovering

Sunday, December 26, 2010

Spirit unveils first Sikorsky fuselage

The Wichita Eagle
Larry W. Smith/The Wichita Eagle |
WICHITA, KS - Spirit Aerospace Chief Operations Officer Buck Buchanan speaks after the unveiling at the roll out the first Sikorsky CH-53K helicopter at their plant in Wichita, Kansas

Larry W. Smith/The Wichita Eagle
WICHITA, KS - DECEMBER 16, 2010: Spirit Aerospace roll's out the first Sikorsky CH-53K helicopter at their plant in Wichita, Kansas on Thursday, December 16, 2010.
With dry ice and a thumping dance beat, Spirit AeroSystems opened the curtain on an important piece of its future on Thursday. Spirit held a celebration to mark completion of its first fuselage for the Sikorsky CH-53K helicopter for the U.S. Marine Corps.

Spirit has a contract for seven helicopters, some of which will be used solely for testing. That number likely will swell to 200 for the Marines, and could go beyond that if other service branches and other countries buy them.

The Marines have used versions of the CH-53 Sikorsky transport helicopter since 1963, but this latest version is a dramatic improvement over even the present CH-53E used by the Marines in Afghanistan and elsewhere. The CH-53E was first put into service in the early 1980s.

That technological improvement starts with Spirit’s nearly all-composite fuselage. That lowers its weight and improves its ability to survive combat.

Because of improvements in technology, the helicopter can carry three times as much weight (27,000 pounds in difficult conditions), fly farther, take on full pallets of material for quick loading and defend itself from ground fire and missiles. It has fly-by-wire controls.

“This aircraft looks like a 53E, but that’s about it,” said Thomas Laux, deputy assistant secretary of the Navy, who was at the event.

“It is far more capable, has far more ability to carry things, navigate, has greater fuel management. Everything about this is the next generation in capability,” he said.

The contract for the 200 helicopters is said to range between $20├Žbillion and $30 billion.

Mick Maurer, Sikorsky's president of military systems, said his conversations with Pentagon officials suggest that this program is one that will survive pretty well through the expected defense budget cuts.

“The best way to stay funded is to perform, and that will be the case with this program,” he said.

The Marines already have said they are suffering from a shortage of airlift capability.

The first fuselage on display Thursday is due for delivery by Dec. 23 to Sikorsky. Spirit CEO Jeff Turner said that workers had to push to get it done in time.

“I think there’s a wet paint dab or two on there,” he said jokingly.

But he said that Spirit actually was fairly comfortable about hitting its deadline. The company has the ability to design more precisely than other companies so that there is less work involved in the production.

Sikorsky selected Spirit soon after the company split from Boeing. Although Spirit didn’t have any experience with helicopters, it has deep experience with large structures built from composites.

“We went with who we thought was the best in the industry,” said Sikorsky’s Maurer.

Spirit will see big benefits from the program. It will provide several hundred jobs, although program employment will rise and fall in years to come as the need ebbs and flows.

The company will build several fuselages for assembly into the finished aircraft for ground testing. The helicopter won’t see flight testing until 2014, officials said, and won’t be deployed in any numbers until 2019.

Thursday also marked an important milestone for the company seeking to transform itself from a Boeing plant to a diversified aircraft supplier, Turner said.

“We needed to diversify the base, and this is an important piece of diversification for a couple reasons,” he said. “Certainly it’s a helicopter and it’s new customer and it’s military. We’ve done military derivatives of commercial airplanes, like the P-8A, but this is the first stand-alone military vehicle that we’ve been a part of building.”

Reach Dan Voorhis at 316-268-6577 or
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CH-53 K as Logistics Enabler

Learjet 85 parts to be produced in Mexico from November

By Brendan Sobie

Bombardier's Mexico facility is preparing to start producing parts for the all-composite Learjet 85 in November, two years ahead of the original schedule due to the transfer of prototype manufacturing from Grob Aerospace.

The vice-president of Bombardier's Mexico Manufacturing Centre, Real Gervais, says construction will begin in April on a new composites factory at Queretaro's aerospace park. The factory is scheduled to open in November with production of detailed parts. The new factory will be dedicated to composite structures for the Learjet 85 and will be next to the factory Bombardier opened last year, which produces wire harnesses and non-composite structures.

Last May Bombardier announced its fast-growing Queretaro operation would be responsible for all Learjet 85 midsize business jet manufacturing with final assembly at least initially taking place in Wichita. Gervais says Learjet 85 manufacturing was not originally going to begin in Mexico until 2011, but that changed in September when Bombardier terminated its contract with Grob to build at least the first three prototypes. The Queretaro facility was subsequently asked to produce the prototypes, using equipment which Gervais says has been purchased from Grob.

To facilitate the early opening of the Learjet 85 factory in Queretaro, Gervais says 60-70 of Bombardier's Mexican employees are now in Montreal for composites training. He says the new composites plant will have about 600 employees within in two years.

Bombardier already has 1,200 employees in Queretaro and plans to raise that to about 2,000 by early 2011, including the 600 in the new factory. Gervais says final aircraft assembly in Queretaro is a possibility for the future, althought not in the current plan. The Learjet 85 will be assembled in Wichita.

Queretaro undersecretary of economic development Marcelo Lopez, however, says "the target" is to move Learjet 85 final assembly from Wichita to Queretaro in 2012. He says Bombardier already has set aside land behind the new factory for hangars that would house the completed aircraft.

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Learjet 85: A New All-Composite Long Range Business Jet

New Boeing 777 Raked Wing Tips Improve Fuel Efficiency, Good for the Environment

EVERETT, Wash., -- Raked wing tips that were installed this week onto the newest Boeing 777, the 777-300ER (extended range) jetliner, not only improve the bottom line they're good for the environment.

The 6.5-foot (1.98 meter) highly tapered wing-tip extensions are being added to both of Boeing's 777 long-range jetliners, the 777-300ER and 777-200LR (longer-range) to improve the airplane's performance. The wing tips help reduce takeoff field length, and increase fuel efficiency and climb performance. Faster climb performance can mean quieter neighborhoods.

Through the use of raked wing tips, the 777-300ER airplane is expected to achieve a 2 percent fuel efficiency improvement, saving as much as $140,000 on fuel costs per year per airplane.

This equates to a savings of 1.3 million pounds of fuel per year per airplane, and 3.9 million less pounds of global warming carbon dioxide (CO2) being emitted into the environment. For every pound of fuel conserved, three fewer pounds of carbon dioxide are generated. The bottom line: the new raked wing tips help provide a more economical, cleaner and quieter airplane for the future.

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Boeing 777-300ER (Put Together Quickly)

Hawker Beechcraft deal not proud moment for Kansas

by Bob Weeks

in Kansas state government

This week the State of Kansas, City of Wichita, and Sedgwick County struck a deal with Hawker Beechcraft that allows Hawker to stay in Wichita rather than moving to another state.

While outgoing Governor Mark Parkinson and other leaders praise the deal, it was not a good day for Kansas.

It’s difficult to blame Hawker. That company saw similar Wichita-based companies receive corporate welfare, most recently Bombardier Learjet. Who can blame Hawker for wanting the same? In fact, when the state and local governments are willing to readily hand out corporate welfare, you can make a case that Hawker has a fiduciary duty to its shareholders to seek the same.

Therein lies the problem: Kansas’ approach to economic development is piecemeal. We respond to problems, as in the case of Hawker. But the state’s response gives more companies the incentive to come up with their own “problems” that require state intervention.

When recruiting or retaining companies, the state and its local governments presume they have the ability to select which companies are deserving of public subsidy.

What we have is a situation where a relatively small number of companies receive help from the state and its taxpayers, which only serves to increase the cost of business for everyone else.

Nonetheless, politicians and bureaucrats call this making an investment in, say, Hawker Beechcraft or whatever company is asking for handouts or tax breaks. The problem is that we don’t know if investing in these companies is the right investment, if government should be making these investments at all. (In the case of Hawker Beechcraft, there is some evidence that this company may need to shrink substantially in order to survive, handouts notwithstanding. See Report: Hawker should divest all but King Air.)

We need economic development policies that nurture all companies. Somewhere in Wichita or Kansas there is a small unknown company that has half a dozen or so employees — maybe more, maybe less — that is working on some innovation. If we’re lucky, we have many such companies. These companies could be working on a new technology, manufacturing process, computer software, video game, internet site, food processing technology, retail concept, chemical process, restaurant idea, engineering methodology, agricultural process, airplane wing — we just don’t know. Many will fail. But some will succeed, and few will, hopefully, succeed in a big way.

But these small startup companies may not fit in to the economic development programs the city and state have. Any of these now-small companies could become the next Cessna, LearJet, Beechcraft, or Pizza Hut. We just don’t know — we can’t know — which small companies will succeed. But these companies, when in small startup stage, struggle to pay the taxes that large companies are able to escape. Being small, they may also be disproportionally impacted by regulation. It’s not necessarily the case that a small startup aviation company is competing directly with Hawker Beechcraft and is handicapped by the larger company’s tax advantages and handouts. But these two companies could be competing for the same employees, for example, and that puts the smaller company at a disadvantage.

How can we identify which companies are deserving of government subsidy? Which companies should have their tax burden softened at the expense of others? Allocating resources — deciding what to do — in the face of uncertainty is the crux of entrepreneurship. It’s something that government is not equipped to do, as its incentives and motivations are all wrong.

In order to succeed, Kansas needs to embrace dynamism in its approach to economic development. For more on this see Kansas economic growth policy should embrace dynamism and Embracing Dynamism: The Next Phase in Kansas Economic Development Policy.

Unfortunately, the Hawker Beechcraft deal, along with most of the policies of the state and the City of Wichita move in the opposite direction: towards more state-controlled economic development.

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Thursday, December 23, 2010

U.S. OKs business with terror-supporting nations

Loopholes let companies get lucrative deals with Iran, North Korea, Libya

The New York Times
NEW YORK — Despite sanctions and trade embargoes, over the past decade the United States government has granted special licenses allowing American companies to do billions of dollars in business with Iran and other countries blacklisted as state sponsors of terrorism, an examination by The New York Times has found.

At the behest of a host of companies — from Kraft Food and Pepsi to some of the nation’s largest banks — a little-known office of the Treasury Department has made nearly 10,000 exceptions to American sanctions rules, approving deals involving countries that have been cast into economic purgatory, beyond the reach of American business.

The U.S. has allowed companies to do billions of dollars in business with Iran and other countries blacklisted as sponsors of terrorism, The New York Times reports.
..Most of the licenses were approved under a decade-old law exempting agricultural and medical humanitarian aid from sanctions. But the law, pushed by the farm lobby and other industry groups, was written so broadly that allowable humanitarian aid has included cigarettes, Wrigley gum, Louisiana hot sauce, weight-loss remedies, body-building supplements and sports rehabilitation equipment sold to the institute that trains Iran’s Olympic athletes.

Hundreds of other licenses were approved because they passed a litmus test: They were deemed to serve American foreign policy goals. And many clearly do, like deals to provide famine relief in North Korea or to improve Internet connections — and nurture democracy — in Iran. But the examination also found cases in which the foreign-policy benefits were considerably less clear.

In one instance, an American company was permitted to bid on a pipeline job that would have helped Iran sell natural gas to Europe, even though the United States opposes such projects. Several other American businesses were permitted to deal with foreign companies believed to be involved in terrorism or weapons proliferation. In one such case, involving equipment bought by a medical waste disposal plant in Hawaii, the government was preparing to deny the license until an influential politician intervened.

U.S. sanctions still tough
In an interview, the Obama administration’s point man on sanctions, Stuart Levey, said that focusing on the exceptions “misses the forest for the trees.” Indeed, the exceptions represent only a small counterweight to the overall force of America’s trade sanctions, which are among the toughest in the world. Now they are particularly focused on Iran, where on top of a broad embargo that prohibits most trade, the United States and its allies this year adopted a new round of sanctions that have effectively shut Iran off from much of the international financial system.

“No one can doubt that we are serious about this,” Mr. Levey said.
But as the administration tries to press Iran even harder to abandon its nuclear program — officials this week announced several new sanctions measures — some diplomats and foreign affairs experts worry that by allowing the sale of even small-ticket items with no military application, the United States muddies its moral and diplomatic authority.

“It’s not a bad thing to grant exceptions if it represents a conscious policy decision to give countries an incentive,” said Stuart Eizenstat, who oversaw sanctions policy for the Clinton administration when the humanitarian-aid law was passed. “But when you create loopholes like this that you can drive a Mack truck through, you are giving countries something for nothing, and they just laugh in their teeth. I think there have been abuses.”

What’s more, in countries like Iran where elements of the government have assumed control over large portions of the economy, it is increasingly difficult to separate exceptions that help the people from those that enrich the state. Indeed, records show that the United States has approved the sale of luxury food items to chain stores owned by blacklisted banks, despite requirements that potential purchasers be scrutinized for just such connections.

Enforcement of America’s sanctions rests with Treasury’s Office of Foreign Assets Control, which can make exceptions with guidance from the State Department. The Treasury office resisted disclosing information about the licenses, but after The Times filed a federal Freedom of Information lawsuit, the government agreed to turn over a list of companies granted exceptions and, in a little more than 100 cases, underlying files explaining the nature and details of the deals. The process took three years, and the government heavily redacted many documents, saying they contain trade secrets and personal information. Still, the files offer a snapshot — albeit a piecemeal one — of a system that at times appears out of synch with its own licensing policies and America’s goals abroad.

In some cases, licensing rules failed to keep pace with changing diplomatic circumstances. For instance, American companies were able to import cheap blouses and raw material for steel from North Korea because restrictions loosened when that government promised to renounce its nuclear weapons program and were not recalibrated after the agreement fell apart.

Mr. Levey, a Treasury undersecretary who held the same job in the Bush administration, pointed out that the United States did far less business with Iran than does China or Europe; in the first quarter of this year, .02 percent of American exports went to Iran. And while it is “a fair policy question” to ask whether the definition of humanitarian aid is overly broad, he said, the exception has helped the United States argue that it opposes Iran’s government, not its people. That, in turn, has helped build international support for the tightly focused financial sanctions.

Beyond that, he and the licensing office’s director, Adam Szubin, said the agency’s other, case-by-case determinations often reflected a desire to balance sanctions policy against the realities of the business world, where companies may unwittingly find themselves in transactions involving blacklisted entities.

Humanitarian aid
For all the speechifying about humanitarian aid that attended its passage, the 2000 law allowing agricultural and medical exceptions to sanctions was ultimately the product of economic stress and political pressure. American farmers, facing sharp declines in commodity prices and exports, hoped to offset their losses with sales to blacklisted countries.

The law defined allowable agricultural exports as any product on a list maintained by the Agriculture Department, which went beyond traditional humanitarian aid like seed and grain and included products like beer, soda, utility poles and more loosely defined categories of “food commodities” and “food additives.”

Even before the law’s final passage, companies and their lobbyists inundated the licensing office with claims that their products fit the bill.

Take, for instance, chewing gum, sold in a number of blacklisted countries by Mars Inc., which owns Wrigley’s. “We debated that one for a month. Was it food? Did it have nutritional value? We concluded it did,” Hal Eren, a former senior sanctions adviser at the licensing office, recalled before pausing and conceding, “We were probably rolled on that issue by outside forces.”

While Cuba was the primary focus of the initial legislative push, Iran, with its relative wealth and large population, was also a promising prospect. American exports, virtually nonexistent before the law’s passage, have totaled more than $1.7 billion since.

In response to questions for this article, companies argued that they were operating in full accordance with American law.

Henry Lapidos, export manager for the American Popcorn Company, acknowledged that calling the Jolly Time popcorn he sells in the Sudan and Iran a humanitarian good was “pushing the envelope,” though he did give it a try. “It depends on how you look at it — popcorn has fibers, which are helpful to the digestive system,” he explained, before switching to a different tack. “What’s the harm?” he asked, adding that he didn’t think Iranian soldiers “would be taking microwavable popcorn” to war.

In its application to sell salt substitutes, marinades, food colorings and cake sprinkles in Iran, McCormick & Co. listed a number of chain stores that planned to buy its products. A quick check of the Web site of one store, Refah, revealed that its major investors were banks on an American blacklist. The government of Tehran owns Shahrvand, another store listed in the license. A third chain store, Ghods, draws many top officials from the Islamic Revolutionary Guards Corps, which the United States considers a terrorist organization.

The licensing office’s director, Mr. Szubin, said that given his limited resources, they were better spent on stopping weapons technology from reaching Iran. Even if the connections in the McCormick case had come to light, he said, he still might have had to approve the license: the law requires him to do so unless he can prove that the investors engaged in terrorist activities own more than half of a company.

“Are we checking end users? Yes,” he said. “But are we doing corporate due diligence on every Iranian importer? No.”

A McCormick spokesman, Jim Lynn, said, "We were not aware of the information you shared with us and are looking into it."

Inouye steps in
Beyond the humanitarian umbrella, the agency has wide discretion to make case-by-case exceptions. Sometimes, political influence plays a role in those deliberations, as in a case involving Senator Daniel Inouye of Hawaii and a medical-waste disposal plant in Honolulu.

On July 28, 2003, the plant’s owner, Samuel Liu, ordered 200 graphite electrodes from a Chinese government-owned company, China Precision Machinery Import Export Corporation. In an interview, Mr. Liu said he had chosen the company because the electrodes available in the United States were harder to find and more expensive. Two days later, the Bush administration barred American citizens from doing business with the Chinese company, which had already been penalized repeatedly for providing missile technology to Pakistan and Iran.

By the time Customs seized the electrodes on Nov. 5, waste was piling up in the sun. Nor did prospects look good for his application to the licensing office, seeking to do an end run around the sanctions. On Nov. 21, a State Department official, Ralph Palmiero, recommended that the agency deny the request since the sanctions explicitly mandated the “termination of existing contracts” like Mr. Liu’s.

That is when Senator Inouye’s office stepped in. While his electrodes were at sea, Mr. Liu had made his first-ever political contribution, giving the senator’s campaign $2,000. Mr. Liu says the timing was coincidental, that he was simply feeling more politically inclined. Records show that an Inouye aide called the licensing office on Mr. Liu’s behalf the same day that Mr. Palmiero recommended denying the application. The senator himself wrote two days later.

Mr. Inouye’s spokesman, Peter Boylan, said the contribution had “no impact whatsoever” on the senator’s actions, which he said were motivated solely by concern for the community’s health and welfare.

The pressure appears to have worked. The following day, the licensing office’s director at the time asked the State Department to reconsider in an e-mail that prominently noted the senator’s interest. A few days later, the State Department found that the purchase qualified for a special “medical and humanitarian” exception.

The license was issued Dec. 10. Two months later, Mr. Liu sent the senator another $2,000 contribution, the maximum allowable. Mr. Levey said he could not comment on the details of a decision predating his tenure. But he noted that sanctions against the Chinese company had since been toughened, and added, “Certainly this transaction wouldn’t be authorized today.”

An exception, then a warning
Mr. Liu’s license is hardly the only one to raise questions about how the government determines that a license serves American foreign policy.

There is also, for instance, the case of IRISL, an Iranian government-owned shipping line that the United States blacklisted in 2008, charging that because it routinely used front companies and misleading terms to shroud shipments of banned arms and other technology with military uses, it was impossible to tell whether its shipments were “licit or illicit.”

Less than nine months earlier, the licensing office had permitted a Japanese subsidiary of Citibank to carry out the very type of transaction it was now warning against. Records show that the bank had agreed to confirm a letter of credit guaranteeing payment to a Malaysian exporter upon delivery of what were described as split-system air conditioners to a Turkish importer. Though the government had yet to blacklist IRISL, sanctions rules already prohibited dealings with Iranian companies. So when the bank learned that the goods were to be shipped aboard the IRISL-owned Iran Ilam, it sought a license.

The license was granted, even though the Treasury Department’s investigation of IRISL was well under way and the United States had reason to be suspicious of the Iran Ilam in particular; that summer, the ship had attracted the attention of the intelligence community when it delivered a lathe used to make nuclear centrifuge parts from China to Iran, according to government officials who requested anonymity to speak about a previously unpublicized intelligence matter.

Mr. Szubin said that since the blacklisting of IRISL, his agency had forced banks to extricate themselves from such transactions. But at the time the Citibank license was issued, his agency regularly issued licenses in cases like this one, where at the time of the transaction, the bank had no way of knowing that IRISL was involved and where the shipping line would be paid by a foreign third party anyway. To depart from the norm, he said, risked facing a lawsuit charging unfair treatment and tipping IRISL off that it was under investigation.

But if the government has sometimes been willing to grant American businesses a break, some companies have recently decided that the cost to their reputations outweighs the potential profit.

General Electric, which has been one of the leading recipients of licenses, says it has stopped all but humanitarian business in countries listed as sponsors of terrorism and has promised to donate its profits from Iran to charity.

As Joshua Kamens, the head of a company called Anndorll, put it, he knew from almost the minute he applied for a license to sell sugar in Iran that “it would come back to haunt me.” And although he received the go-ahead, he decided in the end to back out of the deal.

“I’m an American,” he said. “Even though it’s legal to sell that type of product, I didn’t want to have any trade with a country like Iran.”

Ron Nixon contributed reporting from Washington, and William Yong from Tehran.

This article, U.S. Approved Business With Blacklisted Nations, first appeared in The New York Times.
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Video: Forbidden Zone: Investing in Iran

U.S. Losing Control of Bombs to China

U.S. Losing Control of Bombs to China Neodymium Monopoly

China has become the world's leading supplier of components crucial to U.S. defense systems, products once supplied by American companies such as Magnequench Inc. and Molycorp Inc. Bloomberg's Kevin Thrash reports. This report also contains comments from Teri Luna, a former employee at Magnequench, and Stan Trout, an adjunct physics professor at Marian University and former Magnequench employee. (Source: Bloomberg)

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U S Losing Control of Bombs to China Neodymium Monopoly Video Bloomberg

Smart Bomb

Turkey to design and produce its own fighter jet


Allocating $20 million for initial design study, it spurns an offer to buy Eurofighter Typhoon aircraft; Officials say plan doesn't make sense.

Turkey has tossed aside plans to purchase the Eurofighter Typhoon and is pursuing an ambitious endeavor to design and produce its own fighter jet instead.

The decision, announced by Turkish Defense Minister Vecdi Gonul, is seen as not only an industrial move, but one aimed at boosting national pride with its “Made in Turkey” fighter.

The decision we have taken now calls for the production of a totally national and original aircraft,” Gonul told reporters last week after a meeting of the powerful Defense Industry Executive Committee decided to nix plans to purchase 60 of the latest Typhoon jet fighters.

“This move by the committee effectively is a decision for making Turkey’s first fighter aircraft,” Gonul said. “The Eurofighter is off Turkey’s agenda.”

According to reports, the new aircraft would replace the aging US-made F-4, which had been upgraded by Israel to last well into the next decade, as well as newer F-16s. The expected rollout date for Turkey’s twin-engine combat jet would reportedly be about 2023.

Ankara has already announced it plans to procure some 100 of the next-generation F-35s Joint Strike Fighter aircraft in a deal worth about $15 billion. The first JSF jets are expected to be delivered around 2015. According to Defense News, however, Turkey would take the approximately 30 F-16 fighters only as a “stopgap” measure.

The decision to fly solo in developing a fighter jet comes as Turkey distances itself from its North Atlantic Treaty Organization partners in Europe and North America, and seeks closer ties with its Middle Eastern neighbors. In November, Turkey disputed NATO plans for a missile shield against a possible Iranian attack and has objected to the alliance sharing information with Israel.

Turkey assembles the F-16s on contract from Lockheed Martin at a Turkish Aerospace Industries (TAI) plant. The government named state-controlled TAI, based on the outskirts of Ankara, as the general coordinator of the new fighter jet project. The Turkish Defense Industry’s Procurement agency SSM has allotted some $20 million for a two-year conceptual design study.
Officials at TAI said they couldn’t speak on the project and referred all calls to the SSM. The SSM couldn’t be reached for comment.

“It’s a large endeavor. I’m skeptical that they would be able to do the project on their own since Turkey didn’t have the adequate technological know-how,” said one aerospace executive intimately involved with the design and production of the Israeli fighter jet Lavi in the 1980s.

“But it’s not just technological know-how. Developing a fighter jet requires billions and billions of dollars. It’s certainly not the same as assembling an aircraft. It takes a very long time to develop the technology and then you need to have the influx of funding to bring it all together,” the executive, who spoke on condition he not be named, told The Media Line.

Turkish industry officials told The Media Line that the government decision didn’t make sense. Turkey was currently so heavily engaged in joint international aircraft design projects such as the F-35 that it wouldn’t be feasible to embark on such a costly and risky venture, the officials said.

While hardly world class, the Turkish defense industry is growing and modernizing. But it remains dependent on foreign technology. TAI has designed the Hurkus, a basic training aircraft, but it has yet to make its maiden flight. It has also rolled out an unmanned aerial vehicle this year called the ANKA.

“Development is very, very expensive. Israel was a small country without a big defense budget. Even when we had the infrastructure we decided to give up on it because it was just too expensive,” the executive said, adding that any development today would likely be more successful with international partners.

Israel eventually scrapped the Lavi– built to be a competitor with the F-16 –under heavy US pressure and from a lack of funds.

Defense Minister Gonul said Turkey might cooperate with South Korea, which was developing the KF-X fighter jet with Indonesia. However, that project has sputtered due to lack of funding.

If it goes forward with the fighter jet, Turkey will join a small league of half a dozen or so countries that have the capabilities to design and produce their own fighter jets.

“It’s not much different than designing and building a satellite, only a fighter jet is much more expensive,” said the executive.

It appears that the 2023 rollout date will put its debut a the tail end of era of manned fighters as they give way to unmanned aerial vehicles. But some believe that there will always be a task for piloted aircraft.

“Even 50 years from now, there will be manned fighters. Maybe their numbers will be reduced and their tasks changed, but there will always be manned aircraft,” he said.

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 The slow sell out of The American People and no one to stop it 

Press Release: Manufacturing in Mexico: Part 2 in a 3-Part News Series
Great Things are Happening — The advantages of conducting business in Mexico

Nogales, AZ (Vocus) December 22, 2010

Collectron International Management’s Shelter Program is dedicated to assisting global manufacturers in establishing operations in Sonora, Mexico. Collectron is Mexico’s original Shelter Plan, with more than 40 years experience in the management of all details required to secure Mexican business permits, customize site selection, recruit well-trained personnel and assist in compliance with environmental rules and regulations.

“The Mexican government offers unique programs and incentives to potential manufacturing partners, particularly in high tech manufacturing fields,” says Maria Elena Rigoli, President of Collectron. Supported by the local, state and federal governments of Mexico, Collectron has helped more than 200 companies start up and operate their maquiladora operations in Mexico in such areas as electronics, medical devices, aerospace, moulding and plastics, automotive, and communication devices.

According to consulting firm AlixPartners, Mexico currently offers the lowest manufacturing costs among Brazil, China and India. Mexico’s proximity to the U.S. offers the cost- and time-saving advantages of near-shoring as opposed to offshore outsourcing in China or India. Manufacturing along the northern border of Mexico (Sonora) offers immediate access to the United States through the Port of Nogales along with the availability of U.S. major transportation companies.

In addition, manufacturing in Mexico offers the strategic advantage of being located in one of the world’s largest developing economies with a work force skilled in high-tech manufacturing. Mexico also offers the advantage of free trade agreements with more than 32 countries.

Furthermore, Collectron understands that the most important asset of a business is their intellectual property. Mexico’s legal system enforces intellectual property rights through civil remedies conforming with NAFTA requirements of legal standards familiar to North America thus making a much better manufacturing choice over China.

Collectron ( also understands that the equation for manufacturing profitability has become more complex in recent years. The focus on cost of labor has evolved, and Collectron offers the experience and expertise to help companies successfully implement a broader strategy of Lean Manufacturing. Mexico’s contiguity with the United States makes Just-in-Time production possible along with reduced shipping costs compared to off-shoring.

Collectron’s Maquiladora Shelter Program offers multiple resources including special customs status and duty-free imports on all production-related machinery, equipment, materials and components produced in North America and covered by NAFTA. Collectron also provides import/export management, guidance and representation for environmental and labor compliance, customized site selection and staffing, on-going human resource administration and more. Combined, these benefits offer reduced costs throughout the entire project.

Collectron invites you to review the video testimonials from corporate executives who have chosen to use their services at Tripp Hindle of Hitran Corporation ( sums up his company’s satisfaction by saying, “We’ve come here and with the help of a company like Collectron we’ve been very successful. Mexico is open for business – there’s no question about it.”

“Collectron is about business, but we’re about people, too,” says Maria Elena. “I believe in the power of good people and I believe in the benefits of working together to continue to forge a positive and productive relationship between global companies. Working together, we will continue to take constructive steps forward, not just in the manufacturing industry, but far beyond that.”

For tours, interviews and photos with Collectron President, Maria Elena Rigoli, please call the contact numbers above.

About Collectron (

Collectron International Management, Inc. is the original Maquiladora Shelter Plan Program Provider. Collectron operates in the USA and Mexico. The Nogales Port, recognized as the best-operated port in the United States, is the port which Collectron uses with companies worldwide. Collectron’s Shelter Plan Program allows manufacturers to test Mexican productivity and product cost savings before committing to incorporating in Mexico and forming a Mexican subsidiary. The Shelter Plan simplifies launching and running a maquiladora operation and eliminates long-term commitments, costly expenditures and lengthy start-up schedules. Collectron’s Shelter Plan services include U.S./Mexican customs documentation services, assistance with Mexican business permits and Mexican environmental agency compliance, aid in site selection and construction, recruitment of manufacturing, technical and managerial personnel, on-site personnel administration, payroll and accounting services, general contracting for expansions and more. A pioneer in the maquiladora industry, Collectron has helped more than 200 companies start up and operate their maquiladora plants in Mexico since 1969. Visit

customers are

Collectron customers are Defense Supply Center Columbus (DSCC) certified. As a National Inventory Control Point, DSCC manages more than 700,000 different supply items for over 10,000 customers worldwide, and is the largest supplier of weapon systems parts to the United States Forces and its allies in the world

Collectron customers work with NAVAIR, Naval Air Systems Command, which provides full life-cycle support of naval aviation aircraft, weapons and systems operated by sailors and marines. This support includes research, design, development, and systems engineering; acquisition; test and evaluation; training facilities and equipment; repair and modification; and in-service engineering and logistics support.

Collectron customers are ITAR compliant. International Traffic in Arms Regulations 2010 (ITAR) is a set of United States government regulations that control the export and import of defense-related articles and services on the United States Munitions List (USML). These regulations implement the provisions of the Arms Export Control Act (AECA).

Visit for more information.

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Military wares shouldn't be sold to Russia

Earlier this fall, two Russian SU-24 attack aircraft flew into NATO-controlled airspace near the Baltic state of Latvia. NATO scrambled interceptors in response.

WikiLeaks' exposure earlier this month of NATO classified cables gives hope that similar incidents won't occur. The cables revealed the existence of a detailed NATO military response plan against Russia in case it invades the Baltic states.

The two Russian jets were safely escorted out by two U.S. pilots, though not before the Russian pilots -- who had not responded to NATO's air-controllers' queries -- caused a war-of-nerves incident reminiscent of the Cold War-era movie Top Gun. Latvian authorities called the Russians' air shenanigans an unfriendly act.

 The incident occurred as Latvian, Lithuanian, Estonian, Polish, and U.S. troops were beginning a NATO military exercise near Riga, the Latvian capital city. Some may have assumed the Baltic states' recent ascendancy to full NATO membership would have guaranteed against such incidents. But not so.

I learned firsthand during a visit to Latvia earlier this year that Latvians still have anxieties about Russia.

That's not surprising considering how Russian troops killed several protesters in Riga just before the breakdown of the Soviet Union in 1991. My Latvian friends also told me old stories about their grandparents' friends and neighbors killed in the Soviet occupation and annexation of the Baltic states in 1940-1941, and of the humiliation suffered in another Soviet occupation that began in 1945 and ended when the Soviet Union finally dissolved in 1991.

My friends also recalled Russia's 2008 blitzkrieg in Georgia, another former Soviet province and NATO aspirant, and NATO's apparent forgetfulness of the whole matter. Others brought up the Munich agreement of 1938 that permitted Nazi Germany to annex the part of Czechoslovakia that was mainly inhabited by ethnic Germans.

One can understand their fears, given the Kremlin's increasingly bellicose posture and the fact that about half of Latvia's population is Russian-speaking.

There are even provinces in Latvia where ethnic Russians constitute the majority.

Following the WikiLeaks exposure, the Kremlin feigned innocence and "bewilderment," pointing to the recent NATO-Russian summit in Lisbon, where diplomats adopted a statement saying in part that the security of Russia and NATO countries, including the United States, is intertwined.

That may well be. But apart from places where military cooperation with Russia sometimes can't be avoided, such as Afghanistan, the Russian-NATO "partnership" is like a dancing couple in a crowded room. The two are trying not to step on each others' toes.

The Kremlin has no doubt now that the Baltic states represent NATO toes. This situation makes for added security not only for the roughly 7 million people in the Baltic states, but for the rest of us too.

And that's good.

After all, it is not political correctness and lip service, but clearly defined and strictly guarded borders that guarantee our security. Survival through the Cold War attests to that.

It is imperative, therefore, that as long as Russia remains an autocratic kleptocracy nostalgic for its imperial past, NATO member states refrain from selling Russia high-end computer technology and advanced military systems.

It is up to the United States to make sure that its allies play along -- including France, which sells Russia advanced amphibious assault ships. A senior Russian admiral reportedly announced that Russian forces would have overrun Georgia "within 40 minutes" rather than in 26 hours had those ships been available to them earlier.

Mike Sigov, a former Russian journalist in Moscow, is a naturalized U.S. citizen and a staff writer for The Blade.

Contact him at:, or 419-724-6089.

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Russian Attack Aviation (Part 4) - Su-24 & Su-25

Sukhoi Su-24 FENCER-D

Sci-fi inspires advanced military vehicle designs

Lydia Leavitt
Imagine a vehicle that can actually sweat to improve its stealth capabilities and reduce its environmental impact. Or camouflage capable of adapting to any surrounding environment using electronic ink. 

Well, the technology you may think only belongs in sci-fi movies may be closer to reality than you think.

As part of the The Future Protected Vehicle program, BAE Systems presented hundreds of futuristic ideas to the UK Ministry of Defence in an attempt to improve the effectiveness of lightweight armored vehicles.

And this is not some tiny branch of the Ministry of Defence with limited funds. We’re talking participants from 25 organizations, 567 future technologies and 244 vehicle concepts presented.

The program asked academics, scientists, engineers, and even local elementary school children to give their input and ideas. The Defence Science and Technology Laboratory donated £2 million (around $3.1 million USD) to fund a series of panels to prompt ideas and discussion.

From all of the ideas, 47 of these technologies are actually being considered for implementation to improve the effectiveness and efficiency of these armored vehicles. The idea is to improve safety while making the vehicles more dynamic.

The team took the various concepts and created seven concept vehicles incorporating the new technologies that highlight a certain function.

For example, there were many ideas focused on reducing environmental impact, or creating a reusable model like the "sweating" vehicle that uses water from fuel cell propulsion to “sweat,” therefore reducing the vehicle’s thermal signature and providing water for the soldiers.

Other smart solutions include vehicles with integrated biometrics that would use surveillance to run facial recognition software and modeling software to spot potential troublemakers, making taming a crowd much easier for soldiers.

Aside from the future technology that may one-day be available, the contest brought multiple ideas that are ready to be implemented immediately.

For example, advanced oil filtration, handheld target acquisition technology, and thermo-electric powered generators.

All of the ideas are designed to create smarter, more efficient armored vehicles to help keep soldiers safe.

The seven concept vehicles were:

•Pointer: An agile robot which can take over dirty, dull or dangerous jobs, such as forward observation to support the dismounted soldier.
•Bearer: Modular platform which can carry a range of mission payloads, such as protected mobility, air defense and ambulance.
•Wraith: Low signature scout vehicle.
•Safeguard: Ultra-utility infantry carrier or command and control center.
•Charger: Highly lethal and survivable reconfigurable attack vehicle.
•Raider: Remotely or autonomously controlled unmanned recce and skirmishing platform.
•Atlas: A convoy system (retrofittable if necessary) which removes the driver from harm's way.
Ideas identified for exploitation included:

Sweating vehicle: Can use water from a diesel or fuel cell propulsion system to reduce a vehicle's thermal signature by "sweating" it out through pores in the vehicle skin. That same water could also be reclaimed to enable soldiers to stay in the field for longer.
•eCamouflage: Allows a vehicle to match its camouflage to its surroundings by using electronic ink - rather like a squid.
•Integrated biometrics: Eases the workload on soldiers in complex crowd situation such as roadblocks and riots by running video surveillance through facial recognition and behavior modeling software to spot potential troublemakers.
•Active protection: Intercepts incoming fire or disrupt targeting mechanisms while actuated spaced armor will allow a vehicle to deploy in "compact" mode before extending its armor to provide increased stand-off distance. A version of this is envisaged as employing electro-magnetic magnets to "float" above a vehicle to provide protection from aerial threats.

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MOD signs deal for new light patrol vehicle 30.11.10

IAI embarks on drone-manufacturing venture with Russia

Russia to independently manufacture advanced Israeli drones, after Israel delivers 12 unmanned aerial vehicles in a $53 million deal.

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Machatz 1 - Heron UAV, Alt-30Kft, T-40hr, Automatic take-off /landing by IAI, Israel Military Weapon

Israel Air Force Unveils Latest Unmanned Aerial Vehicle