Managing the Transition

05/17/2011

Captain Kent “Torch” Whalen on the Evolution of the Air Arm

Here Captain Whalen is seen in his role as Commander of the amphibious transport dock USS Juneau presenting a coin to Captain Yasuhiro of the Japanese Ground Self Defense Force (Credit: USN, http://bit.ly/iXASHx)Here Captain Whalen is seen in his role as Commander of the amphibious transport dock USS Juneau presenting a coin to Captain Yasuhiro of the Japanese Ground Self Defense Force (Credit: USN, http://bit.ly/iXASHx)

05/17/2011 – During the late March visit to San Diego to the Naval Air Force, U.S. Pacific Fleet, Second Line of Defense sat down with Captain Whalen to discuss evolving approaches to maintenance as well also the challenge of managing the transition from older to new aircraft.   The interview was wide-ranging and provided insightful perspectives from a pilot (initially trained on the A7 and then flew the Hornet for 17 years), and amphibious driver (the USS JUNEAU and USS DENVER) and the soon to be commander of the USS CARL VINSON.  With such a breadth of experience, Whalen provided a sense of the challenges facing the evolution of the fleet.

SLD: Could you provide a perspective on the basic approach to air fleet management?

Captain Whalen: The readiness piece here is significant.  We run the Defense Readiness Reporting System – Navy for the Naval Air Force.

SLD: For the Pacific?

Captain Whalen: No, both.  East and West.  I have a counterpart with a staff on the East Coast at Commander Naval Air Force Atlantic (CNAL).  We are working under a single ACOS structure regarding policy.

The idea behind DRRS was that we could get all the services on the same reporting system, a joint system. The idea is they can talk with each other and be displayed with each other in a common approach and the Combatant Commanders and senior leadership could view all forces readiness in a similar format.

Right now, money is the biggest thing we’re paying attention to, I think, from a readiness standpoint.

SLD: How do you use the DRRS-N tool?

Captain Whalen: With the DRRS piece, we have a type model series class desk officer.  So there’s one guy that’s the Helo guy, there’s a Hornet guy, there’s an E2 guy, etc.

SLD: They’re platform-specific.

Captain Whalen: Right.  And they oversee that platform for the Airboss (Commander Naval Air Forces).   They stay up to date on the community issues and future developments and assist the Type Wing Commodores and squadrons with any readiness questions they may have.

SLD: How do the age of the fleet and the challenges of managing the age of the fleet affect readiness and the challenges of transition?

Captain Whalen: Well, that’s a very good question.  The Airboss will tell you that transitions are the most important thing we’re doing.

From old airframes to relatively new airframes every type model series has a transition in progress.  The E2-C to the E2-D.  Legacy Hornet to the Super Hornet.  Quantum Leap, Hornet to JSF, helicopters are transitioning.  The Prowler to Growler.  So, we’re transitioning everything to something newer and more capable.  And it’s obviously costly, but it is crucial to set Naval Aviation up for success down the road.

An E-2D Hawkeye assigned to Air Test and Evaluation Squadron 20 completes a "touch-and-go" exercise aboard the aircraft carrier USS Harry S. Truman. The "D" model is aboard Harry S. Truman for carrier suitability testing before delivery to the fleet. Harry S. Truman is supporting fleet replacement squadron carrier qualifications. (Credit: USN Visual Service, 2/3/11)An E-2D Hawkeye assigned to Air Test and Evaluation Squadron 20 completes a “touch-and-go” exercise aboard the aircraft carrier USS Harry S. Truman. The “D” model is aboard Harry S. Truman for carrier suitability testing before delivery to the fleet. Harry S. Truman is supporting fleet replacement squadron carrier qualifications. (Credit: USN Visual Service, 2/3/11)

SLD: With the stated requirement to keep 10 air wings available to the fleet, the challenge of managing the transitions must pose a significant challenge as well as the age of things like the much older Hornets.

Captain Whalen: If you look at the curves on the number of airframes available, we’ve basically got three lifecycle lines out there.  We have the Legacy Hornet, the Super Hornet and then the JSF ramping up.

And we have to try to make sure there’s at least a minimum number of strike fighters to man ten air wings to go forward and run our contingency plans.  We need to make sure that as the Legacy phases out we have enough Supers and JSF to meet the requirement, and then when the Supers start declining we have enough JSF to get the job done.

Do we take the Legacy out earlier and put more into Supers or do we try to accelerate JSF? That’s been where we spend some of our time trying to manage those numbers and those three curves.

SLD: It’s X plus Y plus Z equals your ten air wings.

Captain Whalen: Right. And there is another piece to the puzzle, namely TAI.

Our tac air integration (TAI) piece with the Marine Corps, where they contribute strike fighter squadrons to the air wings, is part of the evolving solution.  We’re doing that now, and we’re investigating increasing the level of participation of the USMC on our large deck carriers.

Historically, and I flew with the marines and a USMC air wing when I was a department head, they’ll contribute a Hornet squadron to the air wing, and they’ll come and train with us, and they’ll deploy with us, and then go back home when the deployment’s over.

But we’re going to try to expand their role as we manage strike fighter shortfall issues.  They can help us fill those potential holes in our force structure, if you will, down the road.

How many would they contribute and how many do we need?  We don’t need so many Marine squadrons that we have to stand down Navy squadrons.  That is not very effective use of the resources we currently have.

We know how many Navy squadrons we’ll have out there, and we can take some more Marine squadrons, potentially.  Are they willing to contribute those?  The equation is being worked.

SLD: What does the F-35C bring to the party? What does the F-35C bring to the carrier deck?

Captain Whalen: I think the ability to flow anywhere we need to go.  The F-35C is a  multi-threat platform able to respond to all the different mission areas that we’re prepared for.  We’re a self-contained unit, we defend ourselves, we project power where needed.  Just like you’re seeing in various corners of the globe.

It brings, obviously, newer technology, but more stealth, if you will.  We have some of that, but not as much as we’d like to have.

It brings a lot more capability in terms of smart weapons and ease of operability, performance is improved from where we are currently. The fifth generation’s the whole next step.

And there is significantly more room for growth.  The Legacy Hornet was built out.  Its data buses couldn’t take any more improvements.

And so, Super Hornet came along, changed and improved in a number of ways.  One of them was the architecture and electronic backbone that allowed us to add new radars and those kinds of things. But it is limited as well in terms of growth.

The JSF is the next step in that realm and brings 360-degree coverage with the latest and greatest technologies.

F-35C in Flight (Credit: Lockheed Martin)
F-35C in Flight (Credit: Lockheed Martin)

SLD: You are about to go to the USS Vinson and command this ship.  How might we going forward gain more flexibility in mixing and matching our sea base capabilities, with aviation as a key connector?

Captain Whalen: I don’t want to give the impression that we’re tied necessarily to doing it the same way we’ve always done it.  There’s some discussion here in the building about how do we deploy differently.  For 40 years, we’ve loaded aboard and deployed for six months, all together and it all came back.  Is there a better way to do that?  Is there a smarter way to sail the carrier and join the air wing or pieces of it?  What are the right pieces?

SLD: Mix and match more effectively?

Captain Whalen: Make it a little more customized, if you will.

SLD: You mentioned earlier you concern about the industrial base and our ability to maintain the fleet.  Could you comment on this challenge?

Captain Whalen: My experience observing during two shipyard periods on the east coast where we were in Newport News in the dry dock, and then we were down around the corner in Portsmouth suggests our industrial base is at risk.

The loss of our industrial capacity, the skilled welders, the machinists, the shipyards in general, is going to be a real problem in the future.  I think if you were to ask them, and I don’t know if you visit with them or not, but they (shipyard leadership) would tell you they have a very hard time finding and retaining talented and skilled workers.

So much so that we would come in on the carrier and they would pull workers from other projects, and other items to focus on the carrier or maybe focus on the submarine.

At our base in Lakehurst, New Jersey they’re building the EMALS (electromagnetic aircraft launch system) and the advanced arresting gear.  But they also maintain the legacy catapult and arresting gear systems.  One of the facilities they have at Lakehurst is a large in-house job shop, if you will.

It makes a significant number of the critical components for our current systems, filled with lathes and milling machines and welders.  We maintain this facility to make these critical components for our arresting gear and cats that can’t be routinely manufactured by industry to the tight tolerances were looking for.

But we’re not, I don’t think, as a nation producing the skilled people to the rate we’re going to require to maintain the fleet down the road.

Accenture: Offshore Outsourcing Has Not Worked

05/16/2011
(Credit:

By Richard McCormack

Originally published in Manufacturing News, April 29, 2011

05/16/2011 – The strategy embraced over the past decade by U.S. manufacturing companies to shift production to countries with cheap labor may no longer be appropriate, according to a consulting firm that has been a big promoter of offshore outsourcing.

“Companies are beginning to realize that having offshored much of their manufacturing and supply operations away from their demand locations, they hurt their ability to meet their customers’ expectations across a wide spectrum of areas, such as being able to rapidly meet increasing customer desires for unique products, continuing to maintain rapid delivery/response times, as well as maintaining low inventories and competitive total costs,” according to Accenture analysts John Ferreira and Mike Heilala, who head the company’s North American Manufacturing practice.

Having surveyed 287 manufacturing companies, Accenture found that 61 percent are considering moving some of their manufacturing back to their home market. Ferreira and Heilala describe this as being a “secret shift” and a “quiet trend.”

Many manufacturing companies that shifted production offshore “likely did so without a complete understanding of the ‘total costs,’ and thus, the total cost of offshoring was considerably higher than initially thought,” write the two analysts. “Part of the issue is that not all costs of offshoring roll up directly to manufacturing; rather, they impact many areas of the enterprise.”

Companies have found that managing their supply operations from afar has weakened their “overall operational planning, forecasting and general flexibility, while in some cases also driving up costs with the need for complex network management,” according to Accenture. “In some cases, this situation has limited the companies’ competitive advantage causing limitations on growth and revenue.”

Almost half of the companies Accenture surveyed said they are facing issues regarding poor cycle and delivery times and product quality due to offshored manufacturing and supply operations. There have also been “dramatic” increases in many of the costs that first enticed them to move their production overseas. “Those seemingly initial cost savings are no longer so big,” according to Ferreira and Heilala. “They are, in fact, diminishing as transportation, commodity cost and in-country labor rates rise and exchange rates change.”

Seventy-three percent of the companies have seen significant increases in supplier material costs and component prices. Fifty-seven percent have experienced cost increases associated with logistics and transportation; 36 percent have seen price increases for overhead and administrative functions; 31 percent have been impacted by exchange rate differentials; 26 percent have had to build up their inventories as a means to buffer supply chain disruptions; and 25 percent have seen increases in the cost of quality.

Other areas that are increasing in costs include material handling and warehousing; packaging; value-added taxes, customs and duties; product qualifications; customer service costs; procurement staff costs such as broker fees; and increased tooling costs. “These cost pressure issues are arising at a time when customer requirements for agility, speed and capability are becoming more challenging,” say the Accenture executives.

Companies have not done a good job of determining the true cost of offshoring. They tend to look only at direct costs, such as logistics, product unit costs, supplier costs, manufacturing overhead, labor, material and packaging costs. But there are many other costs that have not been considered when shifting production to a foreign country, such as local taxes, regulations, customs duties, VAT taxes, the agility and speed of suppliers to respond to customer demand, poor quality inspection and validation, operational risks, inventory, safety stock, broker fees, infrastructure costs, tooling and mold costs, networks needed for plant material handing, training costs, organizational communications costs, local operations staffing, capital amortization, terms and exchange rate fluctuations.

(Credit: Accenture)(Credit: Accenture)

“The overreliance on direct costs to the exclusion of other legitimate cost factors distorts the business case for offshoring and likely many decisions to offshore were incorrectly made,” say Ferreira and Heilala.

The direct costs upon which the initial decisions were made are also changing. Labor represents only 5 to 10 percent of the total cost of most goods, so it’s no longer a driving consideration for moving production. Rising transportation and energy costs and less favorable exchange rates are also working against companies’ original calculations for savings.

“It is becoming increasingly clear that the physical location of supply and manufacturing operations can have a significant impact on competitiveness,” say the Accenture analysts.

Although bringing production back to the United States may not represent the lowest-cost approach to production, providing customers with their own specific SKUs “in a timely fashion may be more important,” says Accenture. Companies like BMW, Siemens Energy, Nissan and Electrolux have all made large production investments in the United States in order to better serve American customers. The moves by these large firms “add more credence to the fact that companies are in fact aggressively rebalancing supply to be closer to customer demand,” say Ferreira and Heilala in their report “Manufacturing’s Secret Shift, Gaining Competitive Advantage by Moving Closer to the Customer.” “

Over the next three years, nearshoring shifts appear poised to continue but different companies will take different directions. Most important, the direction manufacturers take will be highly dependent on both the customers’ requirements and on the product itself — more customized products or those with less stable or difficult-to-predict demand patterns will require increasingly better matched supply to demand location.”

Here is how Accenture defines offshoring:

“There are many different definitions to offshoring. We define it as the act of separating manufacturing and supply operations away from demand sources — to regionally separate locales. Some have moved operations offshore to support offshore demand; however, this is not really offshoring. It is really an effort to get closer to one’s customers and support regional growth. Moving operations offshore only to later import the goods back into a region to fulfill demand is offshoring.”

John Ferreira can be reached at [email protected]. Michael Heilala’s e-mail address is [email protected].

Russia’s ROKAF Connection

05/06/2011
By Dr. Richard Weitz

05/052011 – South Korea is an attractive defense market due to its large economy and justifiable need for military equipment to defend against a North Korean threat. The United States is the main supplier of imported weapons to the Republic of Korea Armed Forces (ROKAF). The ROK bought almost one billion dollars worth of U.S. arms in FY2010.

Yet, in addition to European defense companies, Russia also has sold the ROK many weapons and will likely continue to do so. In addition to oil and gas, weapons represent one of the few items that South Korea can logically purchase to help balance its own high-technology exports to Russia. Meanwhile, despite common misconceptions, Russia no longer sells weapons to North Korea.

(Credit: http://www.sipri.org/databases/armstransfers/recent_trends/SIPRI_AT_Fact%20Sheet_2010)(Credit: http://www.sipri.org/databases/armstransfers/recent_trends/SIPRI_AT_Fact%20Sheet_2010)

The Russian-South Korean defense trade arose after the Cold War. The Russian Federation began supplying tanks, combat vehicles, military helicopters, and other defense equipment to the South Korean armed forces as partial payment of the $2 billion debt to the ROK that Russia inherited from the former Soviet Union.

The debt originated in 1991, when the Roh Tae-woo administration extended $1 billion in bank loans and a $470 million commodities loan as a reward for Moscow’s recognition of the ROK government the previous year. The subsequent collapse of the Soviet Union and the impoverishment of the new Russian Federation made it impossible for Moscow to repay the loans in cash.

The first two so-called “Brown Bear” arms-for-debt swap deals were negotiated in 1995 and 2003. Under their terms, Russia provided the ROK armed forces with Soviet-era T-80U main battle tanks, METIS-M anti-tank missiles, BMP infantry fighting vehicles, Kamov Ka-32 transport helicopters, and Murena-E hovercraft. Although South Korea had originally planned to purchase 80 tanks, the ROK ended up buying only 35 T-80U tanks. South Korea also received 70 BMP-3 Infantry Fighting Vehicles from Russia. The Republic of Korea Army (ROKA) uses these Soviet-era weapons primarily to simulate a North Korean opposing force in training exercises. Ironically, the T-80U and BMP-3 are more advanced than their DPRK counterparts. North Korea’s most advanced main battle tank is the ‘Pokpung-Ho’ (Storm), which is believed to be based on the Soviet-built T-62 tank. The DPRK’s main infantry fighting vehicle is the BMP-1 IFV, which is 20 years older than the models Russia sold South Korea.

The ROKA has no need to incorporate these Soviet-made tanks and infantry fighting vehicles into its regular order of battle since the ROK Armed Forces possess more than 1,500 domestically manufactured K-1 and K-2 main battle tanks and hundreds of ROK-made K21 Infantry Fighting Vehicles.

(Credit: http://defense-update.com/products/m/Metis-M.htm)
Metis-M Antitank Missile (Credit: http://defense-update.com/products/m/Metis-M.htm)

In contrast, the Igla Man Portable Air Defense Systems (MANPADS) as well as the short-range portable Metis-M antitank missiles have entered into regular service with the ROKA. The capabilities of these two Russian imports are closer to these of the infantry-launched guided missiles the ROKA has acquired from the United States and ROK domestic suppliers.

As part of the “Brown Bear” debt for weapons swap arrangements, the ROK Navy (ROKN) received seven Ka-32 transport helicopters. The Navy uses them primarily for combat search-and-rescue missions. The ROKN also bought three Project 12061 Murena E hovercraft from Russia. These craft, built at Khabarovsk, can carry payloads of 45 tons and move at a speed of 50 knots on the basis of its Zorya Mashproekt MT70 gas turbine engine and UGT 6000 turbines. The Murena E can be deployed from the ROKN’s Dokdo landing platform helicopter warships. The hovercrafts have been fitted with American-made navigation systems. Despite being less advanced than the U.S.-made LCAC, the Murena E has a potential amphibious role for transporting the Republic of Korea Marine Corps (ROKMC) in either Korean Peninsula contingencies or for overseas peacekeeping missions.

 

The more recent Russian weapons sales to South Korea look to deviate from this model. Instead of another arms-for-debt swap, South Korea is interested in buying Russian defense items outright, with new money.

 

Murena E (Credit: http://gov.khabkrai.ru/invest2.nsf/Images/Export/$FILE/Olimpia.jpg)Murena E (Credit: http://gov.khabkrai.ru/invest2.nsf/Images/Export/$FILE/Olimpia.jpg)

In addition, the ROK no longer wants to purchase mostly complete and somewhat dated turn-key weapons systems. Instead, South Korea aims to acquire some of Russia’s most sophisticated military equipment and technologies, which can then be incorporated as elements and subsystems into ROK-built platforms.

For example, since 2007, the ROK has been discussing the possible purchase of Russian-made submarine fuel cells, long-range radar systems, and technologies designed to defend electronics against an electromagnetic pulse (EMP). Meanwhile, Russia has agreed to repay its remaining $1.3 billion debt in cash rather than in kind over the next decade.

The reason for Seoul’s new defense technology sourcing strategy regarding Russia is that, as in China, South Korea’s own domestic defense industry has improved to the point that ROK firms can often research, develop, and manufacture weapons systems as good as those available from Russian defense exporters.

The ROK defense industry has benefited from an infusion of financial resources, human talent, and dual-use technologies derived from South Korea’s strong civilian industries. The ROK boasts world class and internationally competitive shipbuilding, automobile, and aerospace companies.

Furthermore, the ROK government has sought to develop the country’s defense sector through various programs and legislation. For example, the Defense Reform 2020 legislation seeks to help develop the ROK’s indigenous capabilities by increasing the percentage of funds allocated to defense research and development.

In addition, acquiring some Russian systems would create more problems than they are worth. Russian weapons systems like the Mi-28N Havoc attack helicopter and Su-30MK Flanker strike fighter are incompatible with South Korea’s NATO-standard arsenal.

The ROK aims for strong joint service and multinational interoperability with Western partners in its weapons purchases. The ROK government lobbied hard to secure recent approval in the U.S. Congress for an elevation of South Korea’s status to that of a NATO Plus Four category ally for U.S. arms purchases, a step above the more common Major Non-NATO Ally category.

Another limit on ROK purchases of complete Russian weapons systems is that Russia’s arms industry has yet to overcome some of the major difficulties it has experienced since the disintegration of the integrated Soviet military-industrial complex. Although Russian firms can manufacture good subsystems, the fielding of complex integrated weapons systems like aircraft carriers and submarine-launched ballistic missiles has proven especially problematic.

Russian defense firms found it extraordinary difficult to manage the transition from the Soviet command economy to a post-Soviet environment characterized by considerably reduced domestic defense demand and the widespread prevalence of free-market conditions in which defense companies find themselves competing with other Russian firms for orders, supplies, and human resources.

Bad government and industry practices have compounded the problem by making it difficult to implement plans to manufacture large numbers of advanced conventional weapons. The country’s military-industrial sector still suffers from limited domestic orders and extensive overcapacity. Purchases for the Russian Army and Navy have been increasing, but they have not been able to sustain all of Russia’s military production capacity.

Russia’s military manufacturing facilities also desperately require modernization. The deep nature of these problems has recently led the Russian government to buy some of the most complex and sophisticated major conventional weapons systems from foreign countries, including large Mistral-class amphibious assault ships from France and unmanned aerial vehicles from Israel.

Photos of Successful Intercept by the South Korean System based in part on S-400 Technology (Credit: http://defenceforumindia.com/showthread.php?t=12683&page=1)
Photos of Successful Intercept by the South Korean System based in part on S-400 Technology (Credit: http://defenceforumindia.com/showthread.php?t=12683&page=1)

ROK defense firms are also incorporating Russia’s traditionally leading-edge surface-to-air missile (SAM) technologies into their own systems. Samsung Thales, a joint venture between the ROK heavy industry conglomerate Samsung Group and French electronics defense contractor Thales Group, is developing a medium-to-long range surface-to-air missile, the M-SAM Cheolmae-2, for the ROK military. The system is designed to engage both ballistic missiles and aircraft. The M-SAM will use S-400 missile technology provided from the Almaz Antey Joint Stock Company, including proprietary information from the S-400’s multifunction X-band radar. LG Corp’s missiles’ guidance systems are expected to also use Russian design elements.

As in other cases, Russia’s armed sales policy regarding the Koreas could conflict with its political-military strategy for the region. The immediate purpose of South Korea’s missile defense systems is to counter the several hundred short-range ballistic missiles North Korea has aimed at Seoul and Pusan, South Korea’s two largest cities.

The Russian government has no objection to the ROK’s using Russian and other air defense technologies to counter this threat. When the DPRK made evident preparations to resume missile testing in early 2009, the Russian military itself announced that it had deployed advanced missile defenses nearby to counter any DPRK missiles heading toward Russian territory, including the S-400, the most advanced SAM in use by the Russian armed forces. President Dmitry Medvedev has cited North Korea’s missile launches as well as its nuclear weapons tests as a “concern for us” given that, “We are located in close proximity to this country.”

But South Korea’s close alliance with the United States means that ROK missile defenses could also help defend U.S. forces in South Korea and perhaps elsewhere from missile attack. Russia’s main concern is probably that the ROK will seek to integrate its missile defenses with those of the United States and Japan.

The North Koreans would likely respond by further expanding their own missile arsenal, which in turn could threaten Russia directly, through an errant missile launch landing on Russian territory, and indirectly, by leading to further missile defense cooperation between the United States and its East Asian allies.

The resulting missile defense network could then help counter the offensive missile forces of China and Russia. Foreign Minister Sergey Lavrov made these Russian concerns evident when he visited Seoul in April 2009, telling the media that, “I hope that no one would … use the situation around North Korea to set up alliances, build missile defense networks or announce an intention to possess nuclear weapons.”

The benefits from this increased defense cooperation could also be used to increase the capacity of the U.S. ballistic missile defense systems planned for deployment in Europe. Although NATO and Russia have formally agreed to consider collaborating on missile defense, many Russian policy makers still worry that the U.S. missile defense systems in Europe can be used to degrade the credibility of Russia’s nuclear deterrent.

Another Russian concern is that South Korea is seeking U.S. permission and assistance to develop and deploy its own strike weapons, including a longer-range ballistic missile that could reach targets in Russia as well as China and North Korea. Currently an agreement with the United States prevents the ROK from deploying ballistic missiles with ranges longer than 300 kilometers or with a payload greater than 500 kilograms.

South Korean officials are now seeking permission to deploy ballistic missiles with a range of 1,000 kilometers and a payload ceiling of 1 ton. Although relations between Russia and South Korea are currently their best in history, Russian defense planners would need to consider the increased threat to the Russian Far East should they ever deteriorate again. Indeed, the military technology South Korea has recently been seeking and acquiring from Russia indicates Seoul’s interest in developing its power projection capabilities

Since South Korea has attained the capacity to manufacture armored vehicles, artillery systems, and other basic weapon and communications systems, and since Russia’s shipbuilding capabilities have deteriorated, ROK military leaders will likely be most interested in purchasing Russian niche capabilities in the areas of heavy transport aircraft and air defense systems.

Ambitious Russian development projects like the 5th generation PAK-FA fighter are not suitable for South Korea’s expeditionary ambitions because of they are unlikely to be interoperable with the armed forces of the United States and key U.S. allies, with which any regional ROKAF deployment would have to operate.

As part of its developing power projection capacity, South Korea might resume purchasing select turn-key Russian weapon systems, in this case a Russian-made heavy transport aircraft. For example, the Antonov An-124-100M-150 is capable of carrying a 120-ton payload for more than 5,000 kilometers in its 36m X 6.4m X 4.4m cargo compartment. Chartered An-124s has already been heavily used by the NATO-led International Security Assistance Force (ISAF) in Afghanistan. U.S. forces in Iraq also have employed the Antonov An-124 to carry outsized payloads like self-propelled artillery and MRAP vehicles

(Credit: http://www.airliners.net/photo/0612942/)
(Credit: http://www.airliners.net/photo/0612942/)

To improve performance in areas like navigation and make the planes more interoperable with NATO, South Korea is likely to modify any Russian military transport planes it purchases by equipping them with Western avionics.

The Russian-ROK arms trade first arose as a logical means to liquidate a Cold War-era monetary debt. It has since developed as a means for the ROK to acquire certain niche capabilities. Two other considerations that might also lead to further South Korean purchases of Russian weapons could include a desire to gain negotiating leverage with other foreign arms suppliers and an incentive to help sustain good relations between Russia and the ROK, especially in the complex negotiations with Pyongyang.

State Department Goes on Cyber Offensive

05/05/2011

By Dr. Richard Weitz

05/05/2011 – Under Hillary Clinton, the U.S. State Department has made a major effort to promote international Internet liberties, including the freedoms of expression, association, and assembly online. Taken together, these rights comprise what Secretary Clinton has called the “freedom to connect.”

The Department faces both foreign and domestic impediments to its policies. The State Department has been divided by vigorous debates over which projects it should support through its grants and whether to view the Internet primarily as a weapon to topple repressive regimes.

The Global Challenge of Cybersecurity (Credit: Bigstock)The Global Challenge of Cybersecurity (Credit: Bigstock)

The State Department is playing a leading role in a global coalition of governments committed to advancing Internet freedom. This commitment was highlighted at the Internet Governance Forum in Vilnius, Lithuania in September 2010 and in a cross-regional statement on Internet freedom sponsored by Sweden in the Human Rights Council in June 2010. The Department will issue up to $30 million in grants funding this year to increase open access to the Internet and support digital activists.

In addition, the State Department advances Internet freedom as an economic issue in multilateral forums and in bilateral relationships. In September 2010, Secretary Clinton launched the Women initiative – a public-private partnership led by the Global Women’s Initiative designed to close the global gender gap in mobile phone adoption.

The U.S. Agency for International Development (USAID) executes a program to build the security capacity of foreign media and civil society organizations. Last year, the State Department launched Civil Society 2.0 to build the technical capacity of civil society organizations to accomplish their missions through the use of telecommunications technologies. Civil Society 2.0 seeks to match these organizations with technology tools and tech-savvy volunteers to raise digital literacy, strengthen NGOs’ information and communications networks, and amplify the impact of civil society movements.

As part of the Civil Society 2.0 program, the United States, through the State Department, has held several Tech@State meetings and a TechCamp in Santiago, Chile, on topics ranging from mobile money to blogger training to using technology after natural disasters. The Department also partnered to launch the first Apps4Africa competition with local partners in the region, challenging applicants to use digital technology to connect to their communities and develop innovative solutions to shared problems.

The Secretary’s 21st Century Statecraft initiatives complement the Department’s work to advance Internet freedom. They partner private and civic sectors in foreign policy initiatives, thereby bringing new resources and partners together, using connection technologies to pursue more innovative diplomacy. Internet freedom is a prerequisite for allowing technology to build these open platforms for innovation in diplomacy and development.

The Department also promotes international efforts to strengthen global cybersecurity by building capacity in developing countries, promoting interoperable standards, and enhancing international cooperation to respond to cyberthreats.

The Department leads administration efforts to develop an international strategy for cyberspace. The new Office of the Coordinator for Cyber Issues, led by Christopher Painter, formerly senior director for cyber security at the NSC, will integrate work across the Department and with other agencies regarding cybersecurity and other cyber issues.

The new Cyber Coordinator could perform a role based on the precedent of the State Department’s counterterrorism office, where a coordinator forges partnerships with other governments and provides coherence to U.S. international strategies. Unless strongly supported by the Secretary, the Coordinator will find it difficult to lead the Department’s disparate cybersecurity initiatives and act as the primary liaison to the White House Cybersecurity Coordinator.

The Challenge of Managing Cyber-Chaos (Credit: Bigstock)The Challenge of Managing Cyber-Chaos (Credit: Bigstock)

The State Department’s Internet freedom campaign faces two challenges — one internal, the other foreign. The State Department has been divided internally by vigorous debates over which projects it should support through its grants and whether to view the Internet primarily as a weapon to topple repressive regimes.

Domestic critics of the Department’s approach argue that it needs to take a bolder approach and support a few key projects with breakthrough potential rather than disperse funding too widely. A report by the Republican minority of the Senate Foreign Relations Committee said that State’s performance has been so cautious about financing Internet freedom initiatives that another agency, the Broadcasting Board of Governors, which oversees Voice of America and Radio Free Europe, should assume the lead role in this area. The Republican-led House, criticizing the Department for not spending last year’s disbursement of $30 million more quickly, cut the State Department’s proposed fiscal year 2011 budget for Internet freedom by one-third, to $20 million.

Critics on the left accuse the State Department of hypocrisy for supporting the free flow of information, except when it involves the secret U.S. cables made public by WikiLeaks. Secretary Clinton has argued that, in addition to being a public space, the internet is also a channel for private communications. To fulfil that function, there must be protection for confidential diplomatic communications online: “The United States could neither provide for our citizens’ security nor promote the cause of human rights and democracy around the world if we had to make public every step of our efforts. Confidential communication gives our government the opportunity to do work that could not be done otherwise.”

 

The Challenge of Building the Cyber Eye to Protect Networks (Credit: Bigstock)
The Challenge of Building the Cyber Eye to Protect Networks (Credit: Bigstock)

The State Department’s support for Internet freedoms is constrained by its responsibility to conduct the overall diplomatic relationship with all foreign governments in a way that maximizes U.S. security and economic interests. When an important U.S. ally or trade partner engages in repressive Internet policies, the Department will at best issue quiet protests. Instead of confronting the government of an important country like China directly, the State Department prefers to place its bet on time and economic incentives to induce these governments to change their polices eventually.

 

As Clinton put it, “We believe that governments who have erected barriers to internet freedom, whether they’re technical filters or censorship regimes or attacks on those who exercise their rights to expression and assembly online, will eventually find themselves boxed in. They will face a dictator’s dilemma and will have to choose between letting the walls fall or paying the price to keep them standing, which means both doubling down on a losing hand by resorting to greater oppression and enduring the escalating opportunity cost of missing out on the ideas that have been blocked and people who have been disappeared.”

The Department also balances the need for Internet freedoms with a desire to enhance Internet security. Observers credit the State Department with being the only U.S. government agency that has achieved near-real-time situational awareness by employing what the Department calls “continuous monitoring.” It enables cyber defenders to minimize their vulnerability by quickly protecting their systems when a new threat or vulnerability is discovered. State Department managers update their threat assessments on a daily basis, not monthly or quarterly like most agencies, and can quickly tell when a computer network has not received a needed software patch.

The Department cooperates with other countries to fight transnational cybercrime. It funds the building of cyber capabilities in foreign law enforcement agencies. The Department led the campaign within the U.S. interagency to ratify the Budapest Cybercrime Convention, which sets out the steps countries must take to ensure that the Internet is not misused by criminals and terrorists. When foreigners are suspected of engaging in cyberattacks and cybercrime against the United States, the State Department will lodge protests and try to get those involved punished or at least shut down.

Cyber Crime is Part of the Dark Side of Globalization (Credit: Bigstock)Cyber Crime is Part of the Dark Side of Globalization (Credit: Bigstock)

But the Department can do little when these cyberattackers enjoy the support and sanctuary of foreign governments. Often a foreign government will arrest and visibly punish a few lower-level people, or shut down one malicious website, while allowing other, normally better connected cybercriminals to function unmolested.

The State Department confronts other international obstacles to realizing its Internet goals. Freedom House’s newly released publication, “Freedom on the Net 2011: A Global Assessment of Internet and Digital Media,” shows how governments have tried diverse and deviously creative tactics to control and repress websites, blogs, and email messages that they consider threatening.

Some of these new Internet restrictions are a reaction against the growing use of sophisticated social networking software applications such as Facebook, YouTube, and Twitter, which are now giving ordinary users—including social and political activists—networking tools previously available only to Internet Service Providers (ISPs). These social media are being credited with helping organize and galvanize pro-democracy movements across the Arab world.

Authoritarian regimes face the arduous challenge of maximizing the economic benefits of the Internet while negating its ability to disseminate information outside government control. The Internet has already demonstrated its potential to overcome traditional media controls and provide their domestic opponents with a mechanism to mobilize supporters and propagate anti-regime messages. Many other opposition movements reside in exile and rely on the Internet to remain engaged in their home countries as well as appeal for international support for their cause.

According to Freedom on the Net 2011, repressive governments have reacted to the growing spread of Internet access and user-generated content by blocking and filtering Internet sites associated with political opponents, using legal intimidation to force ISPs to remove threatening content, and arresting users for posting comments or information that the government considers threatening. If necessary, the authorities have employed cyberattacks and misinformation to shape the information landscape in ways unfavorable to human freedoms. Whereas in the past the authorities would provide ISPs with regularly updated blacklists of banned sites, now the use of more sophisticated filtering technology that searches for a rapidly updated list of banned keywords is becoming more common.

The report notes that even in basically democratic countries, state controls can impede Internet freedoms through unwarranted legal harassment, de facto censorship, and government-supported surveillance. The targets of their content controls are often appropriate, such as sites involving child pornography, violating intellectual property, or inciting violence, but all too easily they spill over to disrupt access to legal or legitimate political or social information. Many regulations deviate from international human rights standards, the rule of law, and the principles of necessity and proportionality. All too often, what is censored is arbitrary and unjustified, yet the censorship process offers few effective means of appeal.

The State Department has tried to overcome these foreign challenges through various means. U.S. diplomats have raised cases of imprisoned bloggers, journalists, and online activists at the highest levels of government, and taken a public stand on their behalf. The Bureau of Democracy, Human Rights and Labor issued more than $5 million in grants in 2010 to support access to information and secure communications on the Internet and mobile devices.

In March 2010, Under Secretary for Democracy and Global Affairs Maria Otero and Under Secretary for Economic, Business, and Agricultural Affairs Robert Hormats convened the first meeting of information technology companies to discuss ways in which the private sector and government can work together to advance Internet freedom.

On April 20, the State Department announced that the State Department will invest $28 million in grant funding to help Internet activists around the world. Department officials termed the move a major step toward protecting the fundamental rights of activists working in nations that deny or censor access to the Internet and those who use the Internet in their human rights work. Some of these funds will finance programs like circumvention services, which enable users to evade Internet firewalls by routing their traffic through proxy servers in other countries. Other funds will support training for human rights workers on how to secure their e-mail from surveillance or wipe incriminating data from mobile phones if they are detained by the police.

Dan Baer, deputy assistant secretary of State for democracy, human rights, and labor, told Bloomberg that software to help pro-democracy activists avoid detection online has developed under the program and has spread rapidly through Iran and Syria. The Department has also already trained more than 5,000 people around the globe to build and use firewall circumvention software through an “underground railroad” type system.

Unfortunately, the available circumvention tools have displayed a limited ability to counter state controls of the Internet, mostly in countries whose people enjoy a high degree of computer literacy or whose governments use relatively unsophisticated blocking techniques. For other nations, their best hope lies in fomenting the kinds of social revolutions that are sweeping the Arab world today—using the Internet when they can, but other means when they must.

Shaping Manufacturing for Sustainability: The Eurocopter Approach (2)

05/03/2011

05/03/2011 – Following the interview with Alain Rolland, where the Senior VP outlined the core approach of Eurocopter in shaping its approach to manufacturing for sustainability, SLD visited the factory to view some concrete examples of the approach.Pierre Maret, the head of the Development Center for Excellence, focused on the shift in the design of the Puma to the Super Puma as a core example of the evolution of the product for enhanced sustainability. And as well he provided a tour of the” Plateau” teams whereby development and manufacturing engineering approaches are correlated through concurrent engineering.

(For the earlier interview see https://www.sldinfo.com/?p=16682).

Maret provided a very clear example of the core point of Rolland.  Rolland had emphasized:

The key is to reduce the number of parts necessary to operate the aircraft; less parts, more reliability, less maintenance.  Getting the dynamic systems and components simplified is a key part of the process. Reducing the number of parts is beneficial in many respects, notably safety as well.  If you reduce the number of moving helicopter parts, you reduce the risk of failure and enhance safety and reliability.

Maret focused on the Puma versus the Super Puma main rotor system in terms of key parts simplification.  He showed the key linkage between the rotors and the motors for the Puma and highlighted the bearings, the interfaces and the lubrication device, which provided a key link.

Building the Super Puma Credit: Eurocopter

Then he showed the same linkage for the Super Puma.  Bearings and lubrication devices had been eliminated along with the interfaces with a significant reduction in moving parts.  Obviously, less parts, removing the bearing joints etc. replaced by elastomeric joint provided a simpler, cleaner system with significant gains in reliability and maintainability.  This is a clear example of why new platforms can be significant advances in terms of reliability and sustainability over older platforms.

SLD: Could you explain the basic approach to manufacturing for sustainability?

Maret: The basic principle is to reduce the interfaces.  So in terms of design, it’s to integrate as many functions as possible.  So, it’s what we intend to do more and more. Instead of single function parts, we tried to integrate many, many functions on the same part. And this is possible because of advanced technology.

SLD: The approach is to remove several parts that were individual before but now are simplified into manufacturing a single part.

Maret: Yes.  An example of simplification and its result can be seen with the Tiger gearbox. We have integrated the bearing raceway directly on the gear shaft.  So the raceway of the bearing is machined directly onto the gears.

SLD: And it used to be a separate part?

Maret: Yes. Thank to this design, inner ring, nut and locking devices have been deleted.. By such a design, you avoid fretting corrosion between the bearing and the shaft.  So thanks to that, you can increase the time between overhaul and you increase the reliability.

SLD: So, you’ve removed several parts that were individual before, so you’re manufacturing a single part.

Maret: Yes. So we reduce the interfaces, which significantly reduces reliability problems.  To do that, it was necessary to integrate bearing suppliers technology and to develop a special heat treatment such as deep nitriding technology.You do this in order to increase the hardness and practical strengths of the parts, both for raceway and tooth for the gears. And the technology of the bearing supplier is now integrated into our business process. Moreover, in order to increase the reliability and safety specs, this heat treatment allows being able to run after total loss of lubrication in the gearbox.  So thanks to this heat treatment, it’s possible to run with a long time without oil.

SLD: We are talking about the Tiger; is it the same for civilian helos?

Maret: We use the same technology for military, as well as civil aircraft.

SLD: We are now looking at Puma versus Super Puma main rotor hub technology. How much parts simplification from the 1970s to early 1990s?

Maret: We have reduced by a factor of about 3 the number of parts in the Super Puma compared to the original Puma. Fast-forward to the Super Puma and you have a totally different situation.  You do the repairs external to the system; you do not have the same breakdown of parts requirements. You have significantly reduced the parts and the interfaces, which mean those items no longer have to be maintained.

SLD: Could you describe the engineering process, which supports manufacturing for sustainability?

Maret :We use a “Plateau” system or a concurrent engineering approach. To create a simplified product requires complex integrated engineering.  So, we integrate more and more functions, but to say the design is more and more simple, but on the other hand technology needed programs are more and more complex. We design and at the same time, we design the process. So we build teams around functions that design improvements, the process and integrated with manufacturing innovations as well.  You have to produce to output to see the outcome that you want to get.

Gamechanger : The Evolving Amphibious Ready Group

05/02/2011

An Interview With General “Dog” Davis

 

Flight deck crew members prepare an MV-22 Osprey with Marine Medium Tiltrotor Squadron 266, 26th Marine Expeditionary Unit, for take off during flight operations aboard USS Kearsarge, April 23, 2010. (Credit: 26th MEU)Flight deck crew members prepare an MV-22 Osprey with Marine Medium Tiltrotor Squadron 266, 26th Marine Expeditionary Unit, for take off during flight operations aboard USS Kearsarge, April 23, 2010 (Credit: 26th MEU)

 

05/02/2011 – Recently, Second Line of Defense looked at the role of the ARG and the evolution of the ARG in the years ahead.  A key point was that the newly empowered ARG with an Osprey, F-35B, and CH-53K helo would become a gamechanger. The flexibility of the ARG was laid out by the former 15th MEU commander, “Ozzie” Osborn.  The evolving role of the ARG was discussed by Vince Martinez. The USMC planning for a newly configured ARG was discussed by Ed Timperlake.  And the capabilities of the newly empowered ARG was introduced by Robbin Laird. We argued that “[the] force can of course secure an airfield for humanitarian airlift; the picket fence of the F-35s replace the AWACs and can guide coalition airpower into Libyan airspace to support agreed upon missions.  The USAF does not need to move a large air operation into place to send combat air; the USN does not need to move a large aircraft carrier battle group into place to prepare to strike Libya.

What the newly equipped ARG does is provide a significant shaping function for the President.  And this shaping function allows significant flexibility and, is in fact, a redefinition of the dichotomy between hard and soft power. The USN-USMC amphibious team can provide for a wide-range of options for the President simply by being offshore, with 5th generation aircraft capability on board which provides 360 situational awareness, deep visibility over the air and ground space, and carrying significant capability on board to empower a full spectrum force as needed.”

The evolution of the ARG and its impact on national security policy was discussed during a March 2011 interview with General “Dog” Davis. General Davis is currently the Commander of the 2nd Marine Aircraft Wing at Cherry Point, North Carolina. His last position was in the Pentagon as Deputy Assistant Commandant for Aviation. He has two sons, both currently serving in the USMC.

 

SLD: How would you describe the changes, which the new aircraft provide to enhance the capabilities of the ARG?

General Davis: I would start with the impact of the Osprey.  The range and speed of the Osprey create a whole different situation in terms of the radius of operational impact of the ARG. Let me give you an example of what I am talking about.

We are still scratching the surface in the art of the possible with MV-22s.  From the deck of an amphibious ship they quadruple the ranges we have been able to fly from those decks at twice the speed we have been accustomed to in the past.   The MV-22 changes all the equations in the Med, the Persian Gulf and will do the same when we start deploying that machine on our MEUs to the Pacific.  For each of our MEUs, we tether 2 KC-130Js and send them overseas whenever the scenario calls for them.

Lately, they have been called for a lot.  Add in a KC-130J, that can lift from a short or austere field and provide fuel for our MV-22s, AV-8s and CH-53Es, and we expand the “reach” of our MEUs exponentially.  We took off last month ago with four V-22s and two C-130s, to practice a self deploy to Central America.

We are looking at trying to train with the Belize military, have our infantry use their Jungle Training Center, and wanted to check the profiles on a training mission.  With the internal fuel load we had on the C-130s and what we had even without even fuel bladders in the V-22s, we could have topped them off once over Key West and flown all the way to Belize and landed in the Jungle Warfare Training Center, dropped off our Marines then binged out to the international airfield (or joined on the tanker for a top off and headed home).   From North Carolina to Belize would have been about a five and a half hour flight.

What is really interesting is on this training mission, we took off with four v-22s, but one had a problem.  It had to turn around after takeoff.  We joined three with the tankers over New River and proceeded south.  The fourth turned around, landed at New River, got another airplane, took off and joined us over Gainesville, Florida, and hit the tankers.

We were all doing about 200/210 miles an hour in behind the tankers going down there, and in this case, about 10,000 feet.  This guy got another airplane, got it turned up, launched and caught us.  You wouldn’t be able to do that in a conventional helo.  I had never seen that before in my life. I thought that was pretty special. So if I launch off a ship off the coast of North Carolina, it’d been easy to get the Marines and all their gear for the Jungle Warfare Training Center over 700 miles away.   That’s operational reach with potentially strategic impacts.  We did another tanker mission a week later with 7 MV-22s flying non-stop from 29 Palms to New River in about 8 hours time at 17,000’.

SLD: How important will it be to get the larger ship, LPD 17, as the launch deck for the new aircraft?

General Davis: We just finished SPS 11, which is Southern Partnership Station 11, which is Special Purpose MAGTF.  They’re getting ready to offload today. We visited this SPMAGTF in Belize, and they did a fantastic job, but they were limited in how much they could do by the fact they didn’t have aircraft with them on their ship.   The Gunston Hall is a smaller ship whose flight deck wouldn’t accommodate  aircraft at sea for an extended period of time. You could land them on there but you couldn’t sustain them.

With the LPD-17, I’ve got command and control, and I’ve also got a flight deck where I can take some of the bigger airplanes aboard and go operate.  It is absolutely key to have the LPD-17 in numbers.  It’s a fantastic vessel and it offers the nation a capability that is in very short supply (as compared to the demand).

 

Flight of BF-2 (Credit: Lockheed Martin)Flight of  BF-2, second F-35B  (Credit: Lockheed Martin)

 

SLD: Let us look at the Libyan scenario and flash forward to the newly enabled ARG. Could you talk to that a little bit to that scenario?

General Davis: Currently we have C-130s flying in the Libyan situation. If I could pair those C-130s with the F-35Bs, I can provide multi-mission support and be available for other operations. You have an EW capability resident in the F-35 that no one else does that can actually help jam and support those platforms flying from point A to point B.  You put a Next Gen jammer on the F-35B, now you’ve got a very high end EW/jamming capability.  We can use it for self-protect – but also to protect our assault support assets and grunts on the ground in a way we have never been able to in the past with organic MEU assets.  For many years our MEUs have not had an aviation EW capability.  With the introduction of the F-35B to the FMF, we will now have that capability and it will change the way we view those MEUs and open the aperture into a much wider range of missions, expanding the utility of what is already a very capable and utilitarian force – the MEU.

You’ve also got a very high-end air defense capability with F-35Bs.   VLO, fantastic radar and SA, and state of the art air to air weaponry – that’s a big difference than what we can offer today.  Add in that tethered KC-130J, and you have an even greater capability.

Flight of BF-3 (Credit: Lockheed Martin)
Flight of BF-3 (Credit: Lockheed Martin)

SLD: The ARG is a shaping function force.  How will adversaries look at this role in the future?

General Davis: I’m Muammar Gaddafi.  I’m whoever, and I’ve got an ARG with this new gear embarked – and I can’t help but think its going to change the way I view that force.  That ARG can reach out and touch me from long range, landing high-end infantry forces deep inside my territory, and do so with a speed that twice as fast as anyone else can.   Our MEUs have never been used as effectively as they are today.  These new capabilities are going to make them exponentially more potent and useful to our nation’s leadership.

The F-35Bs give the new ARG a very high-end air superiority fighter, that’s low observable if I want it to be.  I can roll from Air to Air to Air to Ground quickly and be superior to all comers in both missions.  That’s bad news for our adversaries.  I can use the F-35s to escort the V-22s deep into enemy territory.  With those V-22s we can range out to a 400-500-mile radius from the ship without air refueling.  I can go deliver Marines deep in the enemy territory or wherever and do it at 250 miles an hour, so my speed of action, my agility is exponentially increased, and I think if you’re a bad guy, that would probably give you a reason to pause.  It’s a very different animal that’s out there.    We are good now, but will be even more so (by more than a factor of two in the future).

I also have significant mix and match capability.  And this capability can change the impact of the ARG on the evolving situation.  It is a forcing function enabled by variant mixes of capability. If I wanted to strip some V-22s off the deck, to accommodate more F-35s – I could do so easily.  Their long legs allow them to lily pad for a limited period of time — off a much large array of shore FOBs – while still supporting the MEU.   It’s much easier to do that in a V-22 than it is a traditional helicopter.

I open up that flight deck, or I can TRANSLANT or PAC additional F-35s.  If I had six on the deck and I want to fly over another six or another four, we could do it rather quickly.  Now the MEU has ten strike platforms.  So if I need to have a TACAIR surge for a period of time, that deck provides a great platform for us.  We’ve got the maintenance onboard that ship, so we can actually turn that Amphib very quickly from being a heliocentric Amphib to a fast jet Amphib. Conversely, I could also take the F-35s off, send them to a FOB and load it up with V-22s, 53Ks, or AH-1Zs and UH-1Ys.    Flexible machines and flexible ships.  The combination is exceptional.

We will have a very configurable, agile ship to reconfigure almost on a dime based on the situation at hand.  I think the enemy would look at the ARG as something completely different from what we have now. I think we have to change the way we do things a bit in order to allow for that, but I think we will once we get the new air assets. The newly enabled ARG, or newly whichever the term you’re using, will force our opponents to look at things very differently.  We will use it differently, and our opponents are going to look at it differently.

Espionage and the PRC Challenge

04/27/2011

By Edward Timperlake

04/27/2011 – Testimony on cyber-attacks, espionage, and technology transfers to the People’s Republic of China, before the Foreign Affairs Committee, United States House of Representatives.

Friday April 15, 2011

***

Mr. Chairman and distinguished members of the Committee, it is an honor to be asked to testify on such an important subject.  I have prepared this written documentation of past and current activities of agents of the Peoples Republic of China (PRC) who conduct espionage operations against the United States of America.  Tragically, agents of the PRC have had some notable success.

Mr. Chairman I will summarize my prepared statement.

The history of Peoples Liberation Army (PLA) espionage attempts against US military and dual-use technology in the nineties were identified and reported on by a Select Committee of the House of Representatives. The Congressional report is a tribute to the tremendous bipartisan effort of those Members who served because the final report was voted out unanimously:

“U.S. National Security and Military/Commercial Concerns with the People’s Republic of China,” Declassified Report issued, May 25, 1999, 106th Congress, 1st Session. (Credit: www.house.gov/coxreport)“U.S. National Security and Military/Commercial Concerns with the People’s Republic of China,” Declassified Report issued, May 25, 1999, 106th Congress, 1st Session. (Credit: www.house.gov/coxreport)

The late Chairman Solomon of the House Committee on Rules established this select Committee under the direction of the Speaker because of the clear and present danger of illegal foreign money entering the American Political process. It can be seen in its entirety at www.house.gov/coxreport/ or at Amazon.com, “The Cox Report.”

All types of individuals were giving money to the American political process, from drug dealers, Russian Mafia to PLA espionage agents.  It was a dangerous and nasty time and America is still living with the consequences of those days.

The PRC had an agenda to not only curry favor with agents of influence but also collect information and conduct espionage operations; a select Congressional committee was created. The extensive report issued by that committee covered significant aspects of US military and commercial dual-use technology that was targeted by PRC collectors. The PRC agent’s success in the 90s and continuing to this day is being seen in the continued rapid modernization of all military forces of the Peoples Liberation Army.

For brevity I have pulled out a few representative samples in this overview of the PLA’s current clear and present threat to America’s National Security. I am using “PLA” as a catch all for PRC Army, Navy, Air Force, 2nd Artillery, Cyber and Space forces.

A significant number of technologies which are now in the current PLA inventory were identified as potential problem areas by Congress over a decade ago. We are living today with the rapid modernization of all PLA forces originating from mistakes made in the 90s.

The representative technology I picked is associated with Ballistic Missiles, Super-Computers and Stealth. (Report language I chose is in italics)

First, the key point to understanding espionage by the PRC is to recognize their National Security “16 Character Policy.”

The PRC 16-Character Policy is to “Give Priority to Military Products”

• Jun-min jiehe (Combine the military and civil)

• Ping-zhan jiehe (Combine peace and war)

• Jun-pin youxian (Give priority to military products)

• Yi min yan jun (Let the civil support the military)

Ballistic missile technology:

  • The PRC has stolen U.S. missile technology and exploited it for the PRC’s own ballistic missile applications.
  • In the late 1990s, the PRC stole or illegally obtained U.S. developmental and research technology that, if taken to successful conclusion, could be used to attack U.S. satellites and submarines.

  • The PRC has proliferated such military technology to a number of other countries, including regimes hostile to the United States.

IranThe PRC has provided Iran with ballistic missile technology, including guidance components and the recent transfer of telemetry equipment. The PRC reportedly is providing Iran with solid-propellant missile technology. Additionally, the PRC provided Iran with the 95-mile range CSS-8 ballistic missile. The PRC has also provided assistance to Iran’s nuclear programs.

North KoreaThe Select Committee judges that the PRC has assisted weapons and military-related programs in North Korea.

  • My comment: On January 11 2007 the PLA successfully attacked and kinetically killed one of their satellites in orbit.

High Performance (HPCs) or “Super Computers”

HPCs from the United States have been obtained by PRC organizations involved in the research and development of:

• Missiles

• Satellites

• Spacecraft

• Submarines

• Aircraft

• Military systems components

• Command and control Communications

• Microwave and laser sensors

  • My comment: On 28 October 2010 the BBC announced that China has claimed top spot on world’s Super Computer List—Their Tianhe-1A (Milky Way) can carry out more then 2.5 thousand trillion calculations a second.

Stealth and Composite Technologies

What is stealth? Simply put, stealth is the ability to conceal an attacker from a defender’s detection and defensive systems, and successfully accomplish the mission. To avoid detection, it is necessary to reduce or eliminate the attacker’s “signature.” The “signature” is composed of five primary elements:

• Visual signature

• Infrared (heat) signature

• Acoustic (noise) signature

• Radio transmission signature

• Radar signature

The J-20 (Credit: http://www.aolnews.com/2011/01/05/j-20-stealth-fighter-jet-5-facts-about-chinas-new-stealth-plan/)The J-20 (Credit: http://www.aolnews.com/2011/01/05/j-20-stealth-fighter-jet-5-facts-about-chinas-new-stealth-plan/)

In my research I have found often that PLA weapon development efforts can go “dark” for five to seven years.  PLA forces, after perfecting their purloined technology and adding homegrown technology can then surprise the world on their technological advancements. The recent rollout and test flight of the J-20 follows this pattern.

  • My comments: Recently the Peoples Liberation Army Air Force surprised our Secretary of Defense and the American intelligence community when their PLAAF fighter, the J-20 “Annihilator,” had its initial test flight.

  • Congress anticipated this emerging capability over a decade ago and yet in 2011 the PLAAF still surprised the world.

  • To be fair, General Corley, USAF,  Lt Gen. Dave Deptula, USAF, and Lt Gen. Thomas McInerney, USAF anticipated this event.

  • Unfortunately, this rapidly emerging J-20 threat, along with the slightly earlier 5th Gen Russian Sukhoi T-50’s test flight, were not seen early enough by the US intelligence community.  Consequently, in October 2009, funding for continuing the F-22 production line was stopped at 187 Raptors because at that moment the F-22 was declared both “outdated” and no threat was seen on the horizon.

The Revolution in Military Affairs and Cyber War

While Congress was researching the issues mentioned above in the late 90s, Mr. Andrew Marshall Director of Net Assessment, Office of the Secretary of Defense, published his short and very direct paper heralding the advent of a  “Revolution in Military Affairs.” The PLA and especially their spymasters were paying close attention.

Mr. Marshall’s vision was profoundly simple. He postulated that technology and war fighting would evolve toward two constantly improving military capabilities.

  • Precision-guided munitions with remote sensors

  • Information war (the word “cyber” had not yet come into vogue)

In developing their “Information War” military doctrine, the PLA was awarding Doctorates in Information War to military officers as early as 1998. Since that time PRC cyber espionage attempts have been growing and are unrelenting.

Traditionally the commonly accepted thoughts about PRC espionage is that they have different “spy craft” then the “Cold War Russian” model of linear cells and cut outs.

The evidence in the 90s is that the PLA approached collecting information and technology much differentially than the Russian “cold war” model.

It has been my experience in investigating illegal money contributions that the PLA as needed will use their military along with their Intel community professionals, criminal elements (Triads), businessmen “hustlers,” academics both professors and students and even relatives of all those groups—what ever works.

So when the world became more digitized through the computer revolution, the PLA adapted, and became world class offensive cyber war fighters.  However, this time there was a role reversal from Russian cyber activity.  Russian cyber activity has been reported to be very wide open ranging from military and state sponsored activity, to numerous criminal enterprises for profit, to any of many other reasons.

As mentioned above PLA collection efforts in the field are very freewheeling and unstructured. But in cyber activities the PRC has adopted a Russian paranoid “cold war mentality.” They appear to be trying to keep their cyber war fighters in a rigid military chain of command. In fact there are significant criminal penalties in China for violating cyber restrictions put in place to keep their citizens from freely playing on the web and also acquiring information. The leadership of China is trying to constrain and contain the growing World Wide Web sharing of information.  It will be interesting to see if overtime the PRC is capable of stopping their citizen’s nascent “Jasmine Revolution” which is currently originating in Africa and the Middle East and spreading.

The PRC essentially has two cyber targets, those external to China and also their own citizens. Only totalitarian dictatorships and closed societies have this challenge. It is an Intel/cyber seam for a free and open society to exploit.

But currently today, regardless of internal PRC cyber issues their external attacks continue to be relentless. It is an ongoing struggle by the DOD CI community (NCIS, OSI, Army G-2), NSA, DNI, Law Enforcement (FBI and others) and Homeland Security to try and stay ahead of this dynamic and significant threat.  Several important recent examples of PLA “cyber attacks” were posted in Foreign Policy, January 22, 2010:

US Naval War College–In December 2006, the Naval War College in Rhode Island had to take all of its computer systems off line for weeks following a major cyber attack. One professor at the school told his students that the Chinese had brought down the system. The Naval War College is where much military strategy against China is developed.

Lockheed Martin’s F-35 program–In April, 2009, the Wall Street Journal reported that China was suspected of being behind a major theft of data from Lockheed Martin’s F-35 fighter program, the most advanced airplane ever designed. Multiple infiltrations of the F-35 program apparently went on for years.

Two Case Studies

The Varyag Aircraft Carrier, a study in successful PRC Denial and Deception (D&D)

The Varyag Aircraft Carrier, April 2011 (Credit: http://www.ibtimes.com/articles/131998/20110408/varyag-china-s-first-aircraft-carrier-xinhua.htm)The Varyag Aircraft Carrier, April 2011 (Credit: http://www.ibtimes.com/articles/131998/20110408/varyag-china-s-first-aircraft-carrier-xinhua.htm)

The Soviet Union was building an aircraft carrier when the wall fell and they went into the dust bin of history. Consequently they put the unfinished carrier up for sale. It was bought by Chong Lot Travel Agency for $ 20 Million US to be used as a floating hotel and gambling parlor. Or so the cover story went. But this turned out to be a huge lie.

The ship was towed from the Black Sea to a Chinese ship yard, and on April 7, 2011, the New York Times announced, “Chinese War Ship May Be Nearly Ready:”

  • Xinhua’s headline with the photos said: “Huge warship on the verge of setting out, fulfilling China’s 70-year aircraft carrier dreams”

It now appears that the PRC denial and deception move was hugely successful.

However, in my professional judgement denial and deception only goes so far against the US Navy/Marine/Air Force Team.  Attack submarines, B-2s and USN Carrier Battle Groups like the USS Nimitz Battle Group, named after our Fleet Admiral that presided over the “Miracle At Midway” and victory at sea in WW II, are battle tested.

So if one day the Peoples Liberation Army Navy wants to challenge the American Navy in combat the US will sink their dream carrier the “Shi Lang,” named after their Ming Dynasty admiral, any time any place.

Second case: The “Iraq Technology Transfer List” project (shipping bad things to bad people)

The Chinese have a history of exporting weapons. It is important to note that when dealing with PRC espionage there is a double bounce, first into the PRC and then to other countries. This was seen, as mentioned, with Iran and North Korea but also with Iraq.

Not only is the PLA focused on collecting high tech military and duel use items, they have a vibrant weapons industry and do not hesitate to proliferate anything they have. Especially if the money is right.

The PLA armed Saddam’s Military through weapon shipments to Iraq in violation of UN Sanctions.  The PRC was second only to Russia on arming Iraq.

In December 2003 I was sent through out Iraq to inventory the conventional contraband weapons shipped to Saddam Hussein in violation of arms embargoes. The weapon smuggling effort was initiated under the provisions of the “oil-for-food” program managed by the French Bank PNB Paribas. The objective of my task was to assess “ground truth” from items found in Iraq in order to identify and bring to justice those individuals and criminal syndicates that had violated UN sanctions.

Support was provided to my mission by those in charge of captured enemy ammunition and unexploded ordnance (CEA/UXO) cleanup. The Army Corps of Engineers and 101st Airborne Division personnel who provided the data that were available.

Countries ranked in violation of arms embargo to Iraq:

U.S.S.R.: 122 different types of munitions, total number: 12,878,291

China: 19 different types of munitions, total number: 377,885

Chinese origin of contraband munitions found throughout Iraq by December 2003:

NOMENCLATURE                MODEL

75/40MM                         RP TYPE 40

82MM                              MORTAR,ILLUM

120MM                            MORTAR, HE TYPE 55

122MM                            HE TYPE 54

100MM                            HEAT TYPE 73

130MM                            ILLUM, PROJECTILE TYPE 59,

152MM                            HE TYPE 66

152MM                            INCENDIARY TYPE 66

GRENADE                      RIFLE TYPE 84

GRENADE                      HAND, FRAG TYPE 82-1

GRENADE                      HAND, FRAG TYPE 86P

HEAT-T                           RPG TYPE II

GRENADE                      75-MM, HE-T,

ROCKET                        107-MM, HE-FRAG, SPINSTABLIZED

ROCKET                        SP, 122-MM, HE TYPE 81

107MM                           RKT HE Model Ukn

130MM                            WARHEAD Type 63

ZH0L LANDMINE        APERS TYPE 72,72B AND72C

LANDMINE                  AT TYPE

LANDMINE                  APERS, CLAYMORE TYPE 66

FUZE                              PROJECTILE, PDSD ML-1

Now to focus on the more high tech UN sanction busting to Iraq—the Asian Wall Street Journal nailed it on the actions of the PRC/PLA firm Huawei:

Technology Two-Timing  (March 19, 2001):

U.S. intelligence sources confirm (despite a denial from the Chinese government) that Huawei Technologies, one of China’s leading makers of communication networks, has helped Iraq outfit its air defenses with fiber optic equipment. The assistance was not approved by the United Nations, and thus violates the international embargo against Iraq. Unless Huawei leaves Iraq and takes its equipment with it, the United States should force American companies to cut Huawei’s technology lifeline.


(Credit: http://asian-defence.blogspot.com/2010/08/chinas-cyber-command.html)
(Credit: http://asian-defence.blogspot.com/2010/08/chinas-cyber-command.html)



As mentioned above, I investigated criminal syndicates that violated UN sanctions.  After the US Coalition Provisional Authority (CPA) was established in 2004 it was apparent that Huawei was bribing their way back into Iraq. It was a simple case they were not allowed in, yet their website in 2004 was bragging about their then current Iraq activities.

Huawei in my professional judgement is an ongoing criminal enterprise using denial and deception techniques and a lot of money and influence to infiltrate their high-tech products into American communication networks.

The Way Ahead – The US has not been ignoring the threat!

In 2007 Justice Department and Partner Agencies launched a national counter-proliferation initiative. (www.justice.gov/opa/pr/2007/October/07_nsd_806.html)

  • WASHINGTON—The Justice Department and several partner agencies today launched a national initiative that will harness the counter-proliferation assets of U.S. law enforcement, licensing, and intelligence agencies to combat the growing national security threat posed by illegal exports of restricted U.S. military and dual-use technology to foreign nations and terrorist organizations.

  • China and Iran pose particular U.S. export control concerns. The majority of U.S. criminal export prosecutions in recent years have involved restricted U.S. technology bound for these nations as opposed to others.

Several examples of success from DOJ press releases can be found at justice.gov/opa/pr/2008/October/08-nsd-959.html

Carbon-Fiber Material with Rocket & Spacecraft Applications to China On Oct. 28, 2008, a grand jury in the District of Minnesota returned an indictment charging Jian Wei Deng, Kok Tong Lim, and Ping Cheng with conspiring to illegally export to the People’s Republic of China (PRC) controlled carbon-fiber material with applications in aircraft, rockets, spacecraft, and uranium enrichment process.

Space Launch Technical Data and Services to China – On Sept. 24, 2008, Shu Quan-Sheng, a native of China, naturalized U.S. citizen and PhD physicist, was arrested in the Eastern District of Virginia on charges of illegally exporting space launch technical data and services to the People’s Republic of China (PRC) and offering bribes to Chinese government officials. Shu was the President, Secretary and Treasurer of AMAC International, a high-tech company located in Newport News, Va., and with an office in Beijing, China.

Electronics & IED Components to Iran – On Sept. 18, 2008, a 13-count indictment was unsealed in the Southern District of Florida charging eight individuals and eight companies with conspiracy, violations of the International Emergency Economic Powers Act, the U.S. Iran embargo, and false statements in connection with their participation in conspiracies to illegally export electronics, Global Positioning Systems (GPS) systems, and other dual-use commodities to Iran. All the items had potential military applications, including in the construction of Improvised Explosive Devices (IEDs).

Avoiding a Black Swan (the impact of the highly improbable event), Especially in Cyber

(see book by Dr Nassim Nicholas Taleb)

Secretary of the Air Force Mike Wynne’s vision, professional experiences and lifelong dedication to American National Security gave him the insight to create the USAF Cyber Command.

That effort was stopped by internal Department of Defense politics. But Secretary Wynne was right about the need and soon a DOD Cyber Command (USCYBERCOM) was created. The USCYBERCOM was enacted into law with a very important mission.

In May 2010, General Keith Alexander first Commanding General outlined his views in his testimony to an Armed Services subcommittee

My own view is that the only way to counteract both criminal and espionage activity online is to be proactive. If the U.S. is taking a formal approach to this, then that has to be a good thing. The Chinese are viewed as the source of great many attacks on western infrastructure and just recently, the U.S. If that is determined to be an organized attack, I would want to go and take down the source of those attacks. The only problem is that the Internet, by its very nature, has no borders and if the U.S. takes on the mantle of the world’s police; that might not go down so well.

Conclusion

For several years CI representatives working together in NCIX/FBI executive committee sessions have tried to address the extremely hard problem of adjudicating the correct allocation of US Counterintelligence Assets. This is an extremely complex challenge.

Collectors and agents of influence from the PRC can go after objectives many ways as I have discussed. But beyond the scope of my paper they can also buy their way into America through acquisitions and joint ventures-the money offered in those deals is huge.

With respect to PLA cyber espionage efforts to make the situation even more difficult, I believe PRC cyber efforts also have two components: cyber intrusions as collectors and cyber components and software as physical properties.  One of the hardest challenges we have faced is defending against cyber collectors and those with malicious intent originating half a world away.  Concurrently, the PRC is also trying to place physically compromised components in computers and transmission modalities.

Finally, one must never forget that the human element is always critical—think Private Manning and Wikileaks.

If one tries to protect everything because of resource constraints it might wind up that nothing is protected.  The most important resource we all need to protect is “time.” The hardest resource to allocate in protecting against espionage is the “time” of the CI FBI Special Agents and their fellow Agents in the DOD CI community.  The time of those units of Special Agents in the field working cases and also behind computer consuls as cyber defenders, is our most precious and invaluable asset.  I am always optimistic that eventually America will get it right.

A Cautionary Tale Of Outsourcing To China

James Fellowes

By Richard McCormack

Originally published in Manufacturing & Technology News.

04/27/2011 – Thousands of American companies that have moved production to China to take advantage of cheap labor might want to consider a case study that is unfolding for a U.S. manufacturing company. Fellowes Inc., one of the world’s largest makers of office and personal paper shredders, is witnessing the destruction of its business, as its large Chinese manufacturing plant has been shut down by its joint venture manufacturing partner.

The company’s Chinese joint venture firm has barred 1,600 employees from entering the plant, stolen all of its proprietary manufacturing production equipment and forced the venture into bankruptcy. The contracts Fellowes signed with its Chinese production company meant nothing. For Fellowes, there is no such thing as rule of law in China.

The Itasca, Ill.-based company has lost $168 million worth of business and is no longer able to produce personal shredders for the world market. It has taken its case to Chinese courts, to no avail. It has pleaded with members of Congress and federal agencies, with no results.



James Fellowes, Chairman and Chief Executive Officer (Credit: http://www.fellowes.nl/Fellowes/site/aboutus/about_executive.aspx)
James Fellowes, Chairman and Chief Executive Officer




Fellowes entered into the joint venture in China in 2006 with a company called Shinri to build a factory in southern China to manufacture inexpensive shredders. Shinri is part of a large holding company called New United Group owned by the Zhou family. Fellowes and Shinri produced shredders bearing Fellowes’ brand and incorporated Fellowes’ proprietary product and process technology. The shredders were produced exclusively for sale to Fellowes and its subsidiaries. Under the agreement, Fellowes owned the tooling and intellectual property used to manufacture the shredders in the factory. The joint venture manufacturing facility had 120 Chinese suppliers.

“For over three years, this engagement resulted in a very productive relationship, with Shinri manufacturing and shipping our goods to Fellowes’ locations throughout the world,” says James Fellowes, a third-generation chairman and CEO of Fellowes Inc. “Shinri enjoyed a 100 percent-plus return on investment for each of the years and this return on investment was always paid on time.”

But in 2009 everything changed when the leadership of the Chinese company shifted to another Zhou brother. Over the next year, the Chinese company “gradually attempted to usurp control [of our operations] in direct violation of the joint venture agreement,” Fellowes told a recent hearing of the House Foreign Affairs subcommittee on Asia and the Pacific. “Shinri methodically imposed unreasonable requirements on Fellowes in an effort to extort more profit and ultimately control the global shredder business in direct violation of our contract.”

(Credit Photo: http://www.fellowes.nl/Fellowes/site/aboutus/about_executive.aspx)

Shinri insisted that Fellowes assign its 100 percent-owned tools to the joint venture. It required that Fellowes assign 100 percent of its engineering capability and its 100-percent owned Chinese sales division to the joint venture. It told Fellowes it must increase its prices immediately by 40 percent. It told Fellowes that it had to unilaterally contribute over $10 million to the joint venture and if it didn’t “then Shinri would close down our operation as the legal representative of the joint venture,” says James Fellowes. “When Fellowes refused these illegal demands Shinri proceeded to destroy our business.”

Starting on August 7, 2010, Shinri started to obstruct shipments of shredders from the factory, forcing the joint venture to stop production. “It placed security guards and trucks at the gates to prevent the entrance of our people, the shipment of our goods and the transfer of our wholly owned assets,” says Fellowes. “They expelled Fellowes’ appointed management personnel at the facility and they illegally detained Fellowes’ injection molded tools. This ultimately led to the bankruptcy of the joint venture.”

James Fellowes immediately flew to Changzhou to meet with Chinese government officials. “They sympathized with our plight but they were either unable or unwilling to force our Chinese partners to open our factory or facilitate a purchase of the joint venture by Fellowes. The cumulative impact of these actions is an economic loss totaling over $100 million to Fellowes.”

Fellowes has recently learned that Shinri is planning to compete directly against it in the shredder business using Fellowes’ custom molding tools “that represent the embodiment of Fellowes’ engineering investment and intellectual property,” says the company CEO.

The court in China has gotten involved: It has initiated proceedings to liquidate the joint venture and auction the assets “to satisfy the debts of the joint venture” — suppliers who are demanding that unpaid invoices be paid, according to Fellowes. “The sale of Fellowes’ tooling and our finished goods inventory to anyone other than Fellowes would be a direct violation of our intellectual property rights. The immediate release of our tools is of great concern for us today. We have been restricted from these tools for eight months and that has greatly hampered our ability to recover.”

Fellowes wants to bring these tools back to the United States so that it can re-establish a manufacturing operation in Illinois. It is “working around the clock to retool our products and bring up new factories,” says Fellowes. “We hope the U.S. government will act to protect the rights of American companies like ours.”

After James Fellowes’ testimony, subcommittee chairman Don Manzullo (R-Ill.) said that he has been involved in Chinese trade issues for a decade, and there is a growing number of similar cases involving American companies. “I see China going backwards,” Manzullo said. “I have never in my life in any Congress seen so many complaints over outrageous stealing of intellectual property and making a folly over the rule of law. They are going in the opposite direction based upon the complaints coming in.”

There have been plenty of Chinese officials who have gone to law schools in the United States, Manzullo noted. “They know the rule of law. They are just not interested in enforcement because they don’t have the same principles of private property that we do. It’s an entirely different culture.”

Manzullo said another company in his district, Aqua-Aerobic Systems Inc., a wastewater treatment firm, had a similar experience in China. That company was in the process of installing a wastewater treatment plant in China “and somebody there locally stole everything, even wiped out their website,” Manzullo said.

“At one time, we had a working relationship with the Chinese embassy” in Washington, D.C. Manzullo said. “We no longer do. We have written five letters to the ambassador of China. Each time, he has refused to answer those letters. Before, with prior ambassadors, we have asked them to come into the office. With the case of Aqua-Aerobics, we showed them the evidence and the Chinese government became actively involved in that litigation with our Commerce Department. The litigation ended up favoring the American company. . . If the ambassador from China wants to just blow off members of Congress, which he has been doing over the last several months, that to me is no indication of a breath of fresh air going through that country.”