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High Tech CEO Wonders if Silicon Valley will Look Like Shenango Valley

Posted on August 17, 2010 | by SysAdmin | Leave a Comment

08/17/2010

By Richard A. McCormack

Originally published in Manufacturing News , Volume 17, No.5 on March 31, 2010

It might not be very long before Silicon Valley, Calif., starts to take on the characteristics of Shenango Valley, Penn., if state and national policies don’t change to encourage investment in manufacturing and high-tech production, says Hank Nothhaft, president, CEO and chairman of the board of Tessera Technologies Inc. of San Jose, Calif. Nothhaft was raised in Sharon, Pa., which is on the border of Ohio in the far western part of the state in the Shenango River Valley. Growing similarities between Silicon Valley and Sharon, Pa., have Nothhaft worried.

California is hemorrhaging manufacturing jobs, similar to what has been occurring in the industrial Midwest. “Could Silicon Valley have aspects of Sharon if policy changes aren’t made?” Nothhaft asks. “Yes. The canary in the coal mine is high-tech manufacturing.”

Silicon Valley has a lot going for it, and with changes in tax policies, incentives and the business climate, the region can stage a strong recovery and avoid long-term economic decline. It has resources not available in a place like Sharon, such as a large and vibrant university system that includes Stanford and Berkeley, a globally oriented high-tech labor force, entrepreneurs, venture capitalists, lawyers and accountants skilled at invention and starting new companies.

But none of these strengths guarantee success. And places like Sharon, Pa. didn’t go into decline overnight either, says Nothhaft. “Sharon was an industrial center for 200 years,” he says.

Silicon Valley is exhibiting similar signs of decline, though they are not as apparent.

Nothhaft’s company occupies a building in San Jose in a parkland setting with redwood trees. “But a very significant portion of the buildings in my immediate area are absolutely empty,” Nothhaft notes. “Whoever owns the buildings is keeping all of the landscaping up, so they are beautifully maintained, but they are empty and have been for years.”

According to press reports, Silicon Valley has 44-million-square-feet of vacant office and research space — an amount equal to 15 Empire State buildings. In places like Sharon, Pa., an empty building is an eyesore. In Silicon Valley, the only way to know that a spruced-up building is empty is that there aren’t any cars in the parking lot.

“If we don’t change our policies right now and get our statehouse in order and change some of the national policies, then we go into steady decline,” says Nothhaft. “We are close to the tipping point.”

Besides empty buildings, there are other parallels between Silicon Valley and Shenango Valley. The middle class in Sharon — along with a tradition of upward mobility — has disappeared with the manufacturing base. “I see very strong signs of that out here,” says Nothhaft. In Sharon, it was possible to graduate from high school, find a good-paying factory job, receive training, and work your way up into a management position in companies making specialized steel or transformers at the local Westinghouse plant. Children could go to college, return to Sharon and pursue a fruitful career with a technically strong industrial company.

Not any more.” Even coming out of college and trying to land an entry-level job [in Silicon Valley] is very tough,” says Nothhaft. There are even fewer good middle-class career opportunities for those without a college degree. According to the Bureau of Labor Statistics, California lost 600,000 manufacturing jobs from January 2000 to January 2010, from 1.84 million to 1.24 million, a 33 percent decline, and the trend remains downward especially with the exodus of the aerospace and defense industries.

California is now ranked as being the 48th worst state in the country to do business, behind New Jersey and New York, Nothhaft notes. Individual and corporate taxes are high, along with “sneaky” taxes, such as 10 percent surcharges on capital equipment. The cost structure is also high. State finances are out of control. Manufacturing is moving to Oregon, Washington, Nevada, Arizona and Texas. Highly educated first-generation immigrants, who constitute almost 50 percent of the CEOs and CTOs of new companies, are going back to their home countries. “It is now more favorable to do a startup in Communist China than it is in the heart of Silicon Valley and the greatest capital economy in the world,” says Nothhaft, a graduate of the U.S. Naval Academy and former officer in the Marine Corps.

There are immigrants at Tessera Technologies with Ph.D.s from American universities who have been in the United States for 20 years and are being lured back to China with subsidies and land grants from the Chinese government to start high-tech firms. These entrepreneurs “are retaining very high percentages of ownership and they become quite wealthy and have access to low-cost engineering talent,” says Nothhaft.

The reverse brain drain is being abetted by U.S. federal policies that make it hard for foreign students receiving advanced technical degrees to get permanent visas, even though they have skills that are in demand in Silicon Valley.

“My frustration is that very straightforward policies can solve this problem,” says Nothhaft. “They won’t avert all of it, but it would go a long way to alleviating it.”

Nothhaft is writing a book to highlight the problems and solutions. “I am hoping I can convince one person who can have an impact on this problem,” he says. “It has to be positive incentives, just like our adjacent states are offering: a predictable business environment; a predictable, rational tax system; financial incentives; tax incentives; and facilities to attract business. That will work. It is very straightforward.”

Figure 1 (Credit Photo: http://memagazine.asme.org/web/US_Manufacturing_Snapshots.cfm)

But when he hears national policymakers talk about the economy and jobs, he gets discouraged by their focus on the supply side of the equation—either increasing spending or cutting taxes. “Building another consumer product in China and Taiwan is not going to produce a high-quality job here in the United States,” says the Tessera CEO. “I have never heard anybody in Washington in a policymaking position mention the word manufacturing.”

Manufacturing remains essential to the health of Silicon Valley because once a product is invented and goes into production the subsequent innovation occurs on the factory floor. “You can say that we invent things here, that we do the thinking and other people do the sweat, but it doesn’t work that way,” says Nothhaft. “That is a superficial understanding of what is involved in high-volume manufacturing.”

Nothhaft’s company focuses on invention of advanced miniaturization technologies used in the production of semiconductors, electronics and optics. When its systems are installed in a high-volume manufacturing operation, the company signs a partnership agreement that allows its employees to work in the licensee’s factory or semiconductor lab. “We want to have our engineers in there working with the customer sharing the intellectual property so that we don’t become divorced from the progress that is going to be made in the factory,” says Nothhaft. “Unfortunately, right now, most of our new licensees are in China.”

———-

***Posted on August 17th, 2010

Geopolitics in a Time of Rapid Technological Change

Posted on August 17, 2010 | by SysAdmin | Leave a Comment

By Dr. Alain Dupas and Gerard Huber

One of our regular contributors and his co-author have addressed the strategic shifts accompanying technological change in the first part of the 21^st century. In a major book published in France earlier this year, Dupas and Huber address the strategic impact of new technologies on the human condition. The book is entitled La grande rupture? L’humanité face à son futur technologique and was published by the noted French publisher Robert Laffont.

Chapter seven of the book addresses the impact of 21^st century technological change on geopolitics. The translation of the first part of this chapter has been made by the Second Line of Defense staff and is published with the permission of the authors and the publisher.

***

The last chapter described one of the positive changes in world affairs: the emergence of a type of “international governance,” created to solve global issues such as pandemics, climate change, and the fight against arms proliferation. We see this in how countries have come together, at the G8 or the G20 level, to manage the financial and economic crisis and to move toward the implementation of strict regulations for banks and their traders.

The Return of the “Nation-State”

The fact remains, however, that in 2010 the “nation-state” is still the fundamental actor in major political, strategic, economic, and social decisions. This fact is contrary to the impression prevalent in the 1990s among liberals after the fall of the Soviet Union and the related reduction in international tensions.

The concept of a “new world order” has been brought forward, with some hope that the “peace dividend” could be used (i.e. savings from military budget reductions) to invest in the future and to help global economic development. Some economists even predicted the disappearance of the “nation-state,” opening the way to world government, and allowing for a greater role for “regions,” some of them spanning several countries (for example, a greater Catalonia region between France and Spain), as well as for private companies, pursuant to a philosophy inspired by Thatcher and Reagan.

Regional conflicts (the Balkans, Middle East, Africa), terrorist attacks, and more recently the financial crisis have led to the absolute opposite result. The “nation-states” have taken over an even greater role, with desperate interventions in 2008 and 2009 to “save” banks and national economies, with surprising actions such as the nationalization of the automotive companies by the U.S. government.

The conduct and result of their discussions depend, of course, on their respective economic power, but also on political influences, and more generally, on the perception, worldwide, of their power. Within the perspective of profound changes that are considered in this book, one question remains: how will the “power hierarchy” change in the decades to come, especially with the acceleration of scientific and technological discoveries?

The European Paradox

In 2008, the list of economic powers still included the developed countries, where the United States retained its wide lead, followed by Japan, a country often currently underestimated in importance, despite the fact that it was recognized in the 1980s as the greatest competitor to the United States and Europe.

The "Top 10" Economic Powers in 2008, GDP in millions of dollars (Credit Graph: Alain Dupas and Gerard Huber)

Currently China is in third place, ahead of Germany and the main European countries. Why, though, does the European Union not appear on this list? With a cumulative GNP of over $18 billion, it should easily be in first place. The problem is that the European Union is not an integrated federal state, like the United States, but rather a “common market,” with free circulation of goods, people, and assets within a regulated and coordinated setting.

The EU budget represents only about 1% of the wealth of its 27 members, which manage about 99% of GNP at the national level. Of course the EU has institutions such as the European Council, the European Commission, the European Parliament, etc., which coordinate policies to a degree underestimated when one considers only the 1% share referred to above. For now, however, Europe is not considered as an entity to be dealt with as a whole, whether by its partners or its competitors. Communications from Washington, Moscow, and Beijing are more likely to be with London, Paris, or Berlin, rather than with Brussels. It is also difficult to understand the subtleties of the EU organization.

Will the Lisbon Treaty, if ratified, signify an improvement that will give the EU a greater role on the international scale with a clearly identified president? One would hope so, because short of a change toward greater integration, how much weight will each individual country have in the year 2050?

This question, and more generally the question of the hierarchy of national wealth, was brought to the forefront of current events in 2003, with an article published by one of the largest investment banks in the world, Goldman Sachs, on the evolution of the GNP of the great powers in the coming decades.

The Rise of “BRIC”

The Goldman Sachs study created an acronym that has since come into popular use: “BRIC” (standing for Brazil, Russia, India, and China), four countries whose wealth should increase, according to the economists at Goldman Sachs, much faster than that of developed countries, and lead to a profound revolution in the hierarchy of world GNP by 2050.

The figures in the graph above are projections from the 2003 article. They have since been amended, and the consequences of the current crisis will further affect them (it is estimated that the world GNP decreased 3% in 2009). The Goldman Sachs projections, however, have shaken up the international community and the media: China, the richest country in the world by 2050? The United States toppled? India, a surprising third on the podium, leaving Japan far behind? Japan, followed closely by Brazil and Russia? The European countries becoming “economic midgets” led by Great Britain, relegated to seventh place? France reduced to ninth? A true “break” predicted in the world order…

An Alliance of Russia, India, and China Against the United States?

These predictions seemed incredible. They were, however, present in the economic data which, year after year, showed very intense growth in China and India, with rates often near or above ten percent…. Sustained growth translated into an exponential increase of the GNP, which could be spectacular and lead to huge gaps between countries in a few decades.

It is true that the Goldman Sachs study is based on the conceptualization and simulation of economic evolution, and it is important not to confuse the results of computer simulations of the future with current reality. It is also true, however, that such predictions can be useful in identifying trends.

The “Top 10” Economic Powers in 2050, according to Goldman Sachs, in millions of dollars (Credit Graph: Alain Dupas and Gerard Huber)

Here the trend is clear: China and India, which were major economic powers until the 18th Century, are in good position to regain their domination by the year 2050. According to Goldman Sachs, the two other BRIC members, Russia and Brazil, are also on a rising trajectory, but less rapidly, which should enable them to catch up with Japan in a group of three “chasers,” to use cycling lingo, ahead of the “pack,” at the head of which we find the European nations, which are divided at the moment.

Does the BRIC concept have any meaning beyond the simultaneous rise in position of wealth in the world? Brazil, Russia, India and China have little in common with regard to culture, resources, political regimes or aims. This did not prevent them from meeting in June 2009 for the “BRIC Summit,” organized by Vladimir Putin in Russia. Will this meeting have a follow-up, which could mark the creation of some kind of “bloc,” allowing all four countries to have greater weight on the international scene? Considering the diversity of their interests, the chance of this happening is doubtful. There are also other countries, left out of the initial Goldman Sachs study, that will rise in the world hierarchy. The U.S. investment bank also came up with a new concept: the N-11 (or “Next Eleven” or Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey, and Vietnam).

According to Colin Gray, a respected Anglo-American strategic expert, the only alliance on the geopolitical scene in the 21st Century that might be a serious contender to the United States would be a regrouping of China, India, and Russia, the three Eurasian BRIC countries. These three nations complement each other somewhat: Russia could contribute its military technology, inherited from the former Soviet Union, which remains very advanced, as well as natural resources; India’s scientific and technological community ranks very high and leads in computer science and its labor force is both qualified and cheap; China is able to mass produce cheaply and has huge financial reserves at its disposal.

Is reconciliation among these three powers truly possible? Colin Grey thinks so, and believes that it could lead to a new “cold war” between an American camp (along with Europe and Japan?), and the new Eurasian “triple alliance.”

Factors in the “Power Equation”

Is the Anglo-American strategist right? His most interesting point is that a true competitor to the United States could only emerge in the 21st Century by combining the capacities of several emerging powers, which underscores another interesting fact: the power of one state is not measured solely by its economic power. It could be a “cocktail” of several elements, such as GNP (symbolizing economic and financial strength, where China and India would excel), demographics (significant in India), military power (which remains strong in Russia), ambition (important in Russia and on the increase in China), and, increasingly, innovation (an area where India is improving quickly), in our opinion.

Should one of the factors in what we like to call the “power equation” be absent, the international position of a country is necessarily reduced. This is the major problem with the European power: it lacks an integrated military capacity. The strength of the United States, by contrast, is outstanding for every cited factor.

China and India, whether allied or not, would perhaps pose a problem to the United States as global powers approaching the year 2050, and possibly to a united Europe. In the shorter term, it is more likely that their rising economic power could threaten the prosperity of the current great powers and other industrialized countries, such as Canada, Japan, South Korea, Israel, and Australia, with low cost production and higher quality, strategic relocation, etc. What will the advanced countries be able to do in the face of this competition? And in the face of many N-11 countries that will be even more competitive?

The Key to Future Growth in Advanced Countries: Innovation in the NBICs

The very advanced countries, such as the United States and the large European nations, can indeed retain two essential closely related advantages. The first is at the core of the set of issues that this book addresses: the dominance in the rapidly evolving fields of the “NBICs”: nanotechnology, biotechnology, information technology, and cognitive technology. The scientifically advanced countries will first be able to develop future products and services in these four converging areas, which involve new ways to use the internet, 3D cinema, virtual reality systems, and multi-purpose mobile terminals; in short all the tools of what we call “the extension of the domain of change.” This, however, involves constantly augmented research efforts as well as an economic and social culture favorable to innovation, the “Holy Grail” of the 21st Century…

(On BRIC consumers see http://blogs.ft.com/beyond-brics/tag/consumer-special/)

———-

***Posted on August 17th, 2010

Manufacturers Wonder If It’s Worth Staying In America

Posted on August 17, 2010 | by SysAdmin | Leave a Comment

By Richard A. McCormack

This article was originally published in Manufacturing News on June 30, 2010.

Small- and medium-sized American manufacturing companies are feeling better about their prospects, as compared to last year at this time, but they remain cautious about the future. They are also worried about U.S. government policies that are increasing the costs of doing business in the United States, according to the fifth annual survey of manufacturers and wholesale distributors conducted by McGladrey.

From the 2010 Survey, page 14 (Credit: McGladrey’s study, June 7, 2010: http://mcgladrey.com/News-Releases/McGladreys-5th-Annual-US-Manufacturing-and-Wholesale-Distribution-Survey-Shows-Small-to-Midsized-Companies-More-Cautious-about-Economic-Recovery-than-Larger-Companies?itemid=203&mid=203)

“The recession really hit manufacturers extremely hard,” says Tom Murphy, executive vice president of manufacturing and wholesale distribution at RSM McGladrey. “When companies reduced their workforces by 40 or 50 percent and cut capacity by 30 percent, they survived — barely— and have stabilized, but their eye to the future is still very cloudy.”

Manufacturers that have invested in innovation and exports have fared better than those that have not, according to the survey. And some industries are doing a lot better than last year — such as food and beverage, medical equipment and chemicals, petroleum and plastics. But other sectors remain troubled, especially those associated with housing: building materials, fabricated metals, furniture, and paper products.

“Credit is an issue,” says Murphy. “The banks are not convinced that for particular products demand or cash flow are going to be there based on a company’s plans.” Nineteen percent of the 1,061 companies McGladrey surveyed say they are having problems with credit, with 29 percent of the smallest companies running into credit problems. Mid-sized companies of between $100 million and $200 million in revenue were concerned about credit availability impacting growth in the future. “When you have mid-sized companies saying credit is going to be problematic, that is a problem,” says Murphy.

Manufacturers are also skeptical about government policies that are working against their interests. Additional burdens placed on them by the health care bill, the potential for cap and trade, increased regulations and higher taxes to pay off mounting federal debt are proving worrisome to U.S. manufacturers. “Manufacturers are concerned that nobody [in Washington] is listening to them,” says Murphy. “If a policy does not make us more competitive globally, then why are we even talking about it?”

Taxes are eating at profits that would otherwise be invested in the business. “The concern is that many business owners are going to throw in the towel and say enough is enough, I can take this business and move the headquarters someplace else,” says Murphy. “If you want to continue going down the path we’re going down now, we might as well tell manufacturers to move [offshore] and get it over with.”

Ninety percent of companies are either very or somewhat concerned about increased personal tax rates. Murphy’s clients are asking him “all the time” about whether it would be worth moving their operations offshore in order to remain profitable.

“It’s not to the Bahamas or the other tax havens,” says Murphy. “They are saying that they may as well move their business to a place like Poland and export to the United States, because the U.S. is the market with the easiest access.”

Nevertheless, manufacturers and wholesale distributors are feeling more bullish, with 83 percent of them saying they are optimistic about their own company’s prospects, but only 52 percent saying they are positive about the direction of the U.S. economy.

From the Survey, page 26 (Credit: McGladrey’s study, June 7, 2010: http://mcgladrey.com/News-Releases/McGladreys-5th-Annual-US-Manufacturing-and-Wholesale-Distribution-Survey-Shows-Small-to-Midsized-Companies-More-Cautious-about-Economic-Recovery-than-Larger-Companies?itemid=203&mid=203)

Seventy-one percent of the businesses expect their U.S. sales to increase this year, (nearly three times the percentage forecast last year), while 44 percent said they expect their international sales to increase (up from 21 percent in 2009).

Sixty-eight percent of the companies in the McGladrey survey are importing materials for their supply chain (up from 66 percent in 2009). “Fully 25 percent of respondents import one-third or more of their supply chain materials,” says the survey. “The most active importers plan to ramp-up buying from overseas suppliers.” Eighty percent of textile companies import at least one-third of their materials and supplies.

Companies are also questioning strategies associated with moving production to China. “Today, faced with increased labor costs, fluctuating currency rates and long ship times, many companies are rethinking that assumption,” according to the survey. Adds Murphy: “Companies did their initial cost analysis and found it saved them a lot by moving to China. But three years later when they added everything up, it didn’t save as much as they thought. China is not going away, so we have to learn how to compete with them.”

Off shoring declined for a second year. In 2010 only 15 percent of business leaders said they will move some or all of their production offshore with medical (40 percent), textiles and apparel (32 percent) and electronics (26 percent) being the industries most willing to take that step. “Midsized companies express the most interest in off shoring production, led by 23 percent of businesses in the $250-million to $500-million revenue bracket,” according to the survey.

The 2009 manufacturing survey can be found here.

———-

***Posted on August 17th, 2010

Russia’s New Fifth Generation Fighter

Posted on August 17, 2010 | by SysAdmin | Leave a Comment

Dr. Richard Weitz (Credit Photo: The Hudson Institute)

By Dr. Richard Weitz

The United States possess the only fifth-generation fighter currently in service, the F-22A Raptor stealth fighter, which entered the U.S. Air Force in 1997. The Russian Federation is hoping to join this exalted category in the next few years, with its new fighter plane, which began public test flights earlier this year. The Russian Air Force hopes to begin flying the plane in 2015, the year it could enter serial production. But the Russian aerospace industry must still overcome certain residual barriers before the country will have a genuine fifth-generation fighter for domestic use and foreign export.

The T-50 represents the first prototype of Russia’s first declared fifth-generation multi-role fighter/attack plane. It is formally known as the Advanced Front-Line Aviation Complex (PAK FA), [Russian: Перспективный Авиационный Комплекс Фронтовой Авиации, Perspektivnyi Aviatsionnyi Kompleks Frontovoi Aviatsy, literally “Prospective (Promising) Aircraft Complex (System) of Front line Aviation”]. It is designed and manufactured by the state-owned OAO Sukhoi aircraft corporation, which won the initial tender for the plane in 2002. The first public test flight occurred on January 29, 2010, at a Sukhoi plant located at Komsomolsk-on-Amur in the Russian Far East.

Sukhoi has already built two other T-50 prototypes that are also participating in the first-phase of testing. The company has said that the plane will undergo a normal test pattern, which will result in the T-50 prototypes undergoing around 2,000 additional flights and other tests during the next few years at several Russian aviation research institutes. The first stage of government testing of these fifth-generation fighters will last into 2012. Second-stage testing will involve radio countermeasures and surveillance in “optical and infrared ranges and its weapons.” Russian Prime Minister Vladimir Putin said that the Lipetsk military airbase, 400 kilometers south of Moscow, would begin testing an evaluation unit quipped with the PAK FA fighters in 2013. Unless the tests expose unexpected problems, serial production of the new plane is scheduled to begin in 2015.In developing and manufacturing the PAK FA, Sukhoi has functioned as a systems integrator for more than a hundred suppliers and strategic partners, a difficult challenge now that the centralized Soviet planned economy is gone, even in the defense sector. The Tikhomirov Scientific Research Institute for Instruments (NIIP) has been developing the plane’s X-band nose-mounted Active Electronic Scanned Array (AESA) Radar. NIIP Director Yuri Belyy will “no longer be just radar, but an integrated radio-electronic system, which includes radars in several wave bands, an identification system, electronic warfare (EW) and electronic intelligence (ELINT).” The new fighter’s fire-control system will be designed on the basis of the Su-35BM’s systems.

The cost of developing the PAK FA will amount to some U.S. $8-10 billion dollars in total, if one includes the 250 planes the Indian government wants to acquire (and co-develop) as part of its “Fifth Generation Fighter Aircraft (FGFA) program. The Russian Air Force also wants to acquire around 250 of the planes. With a total production run of some 500 planes, this would render an average cost per plane of around $90-100 million each. Once the plane is deployed, the PAK FA is supposed to have a service life of 35 years.

Russian aircraft makers have been seeking to manufacture a fifth-generation warplane since the 1980s. The single-piloted, twin-engine Sukhoi PAK FA is intended to replace the aging fleets of Soviet-era MiG-29 Fulcrums and Su-27 Flankers. The Russian Air Force current possesses 300 of each plane. The new PAK FA planes will serve alongside the other main warplane Sukhoi has recently provided the Air Force, the Su-35s multi-role fighter. The Su-35 is considered a “four++” generation plane, with only some fifth-generation capabilities. The Russian Air Force plans to backload some of the new technologies developed for the PAK FA, especially the AESA Radar, as mid-life upgrades onto its existing Su-35BMs, Su-30MKIs, and Su-30MK2s

It is possible that Russia might seek to develop a naval and unmanned variant of the PAK FA in future years. Russia would also employ some of the new technologies on the next-generation long-range strategic bomber with stealth and other B-2 characteristics that Russia hopes to pursue through its PAK-DA program. On March 1, 2010, Prime Minister Vladimir Putin said the aim was to develop “an airborne missile-carrier.”

Russian strategists remain committed to having a nuclear triad of bombers along with ground- and submarine-launched missiles. A long-range bomber would also be useful for distant power projection as well as showing the flag, as Russia did in September 2008 by sending a pair of Tu-160 Blackjack bombers to Venezuela.

Front view of the aircraft (Credit Photo: http://www.defenceforum.in/forum/showthread.php/8276-PAK-FA-Post-First-Flight-Developments!-Putin-visits-PAK-FA?p=121035&viewfull=1)

A new strategic bomber would replace the three Soviet-era bomber types currently in service with Russia’s strategic aviation, the Tu-22M3, the Tu-95MC Bear, and Tu-160 Blackjack. The Tupolev aircraft maker said last year that a new-generation strategic bomber would be developed by 2017, while production should start in 2020 to 2025, though Maj. Gen. Anatoly Zhikharev, commander of Russia’s strategic aviation said a new strategic bomber expected to enter service in 2025 to 2030.

“Fifth-generation” planes have stealth (low-observable) characteristics, making them almost invisible to conventional radars. These attributes include using composite materials, emitting reduced engine heat, and employing other advanced technologies that minimize the plane’s optical, infrared, and radio-frequency visibility.

Fifth-generation warplanes also possess sophisticated advanced integrated weapons and navigation control systems that utilize the latest artificial intelligence. Furthermore, they can fly at sustained supersonic speeds [“supercruise”] of over 2,000 km/h. Most other planes can only attain such speeds for a limited time by using afterburners.

Russian officials have already hailed the fighter as “a unique warplane” that combines the

capabilities of an air superiority fighter and attack aircraft to give it enhanced combat effectiveness against air and ground targets around the clock in all meteorological conditions.

According to Sukhoi, the PAK FA will have a new advanced avionics suite integrating “electronic pilot” functionality; an advanced phased-array radar; more automatic controls that significantly decrease pilot load and allows him to focus upon completion of tactical missions; as well as new on-board equipment that allows realtime data exchange not only with ground-based control systems but also within the flight group.

Finally, it will have a very low radar cross-section thanks to its composites application and innovative technologies, aircraft aerodynamics, and measures applied to decrease the engine signature provide for the unprecedented small radar cross section in radar, optical and infrared range. In terms of armaments, the plane will be equipped with novel high-precision air-to-air, air-to-surface and air-to-ship missiles and two 30 mm cannons in order to enable it to function in multiple roles, including dog fighting other planes and striking multiple ground and maritime targets simultaneously.

Diagram of Suchoj T-50 PAK FA (Credit Photo: http://www.subcontinentaldef.net/2010/01/russia-has-begun-initial-testing-of-pak.html)

In terms of dogfighting, the PAK-FA was specifically designed as an F-22 killer. Given that both planes will have stealth capabilities, the combatants might need to come very close before their radar sensors detect the other side. Since only the PAK-FA has an Infra-Red Scan and Track (IRST) sensor, it has a distinct advantage over the F-22A in a close engagement. Another potential advantage is that Sukhoi planes typically have a superior ability to operate at high angles of attack (AoA than their less agile American counterparts.

Yet, it is difficult to determine the actual capabilities of the PAK-FA T-50 because of conflicting information released by Sukhoi, Russian Air Force members, Putin, and other observers of this project. In addition, there is often a difference between desire and reality when it comes to Russian defense procurement. Russia must overcome several technical and performance obstacles in order for the Russian fighter to compete on a performance basis with the world’s pre-eminent fifth-generation fighter(s).

Despite claims by Russia’s NPO Saturn company, which leads the program to build new engines for the PAK FA, that the T-50 has flown its test flights with “completely new powerplants,” these statements are both unverified and seemingly contradicted by Russian government officials. The super-cruise engines intended for Russia’s fifth-generation fighters may not yet be available. Despite the development of Russian manufacturer NIIP of an active, electronically scanned array (AESA) radar system, similar to the system used by the F/A-22, for the PAK FA, it has not yet been seen on a test flight. This is a significant shortcoming in the development of the PAK FA as a modern stealth fighter, since stealth aircraft rely on their Low Probability of Intercept radar system for survival and their ability to “see and not be seen” gives such aircraft the ability to form a picture of their battlespace and gain air-to-air superiority.

It is unclear if the PAK FA can be completed in under 9 years. Historically, fourth- and fifth- generation fighters normally require 15 years or so to develop. The fact that the PAK FA has gone on several test flights without super-cruise engines or an LPI/AESA radar means that it is unlikely that the production goal of 1,000 operational ready PAK FAs will be ready by the stated 2015 date.

But funding and other support from the Indian government might help accelerate the timetable. India has become largest foreign customer for Russian military aircraft, and would be a logical buyer of this plane. In October 2007, Indian and Russian officials signed a preliminary agreement to collaborate in developing and manufacturing a 5th-generation fighter. The two governments are still negotiating a final contract. India’s Hindustan Aeronautics Ltd (HAL) wants to modify Sukhoi’s single-seat prototype into the twin-seat fighter.

There are too many unknown factors at this point to assess how well the PAK FA will fare against its only equivalent in the world, the F/A-22. Sukhoi have not been able to integrate supercruise engines or LPI radar into its tests flights as of yet, nor have they had any flight exercises beyond basic test flights.

In addition, the problems that Russia’s defense industry has experienced in developing and maintaining other sophisticated weapons systems, such as the Navy’s aircraft carriers and new Bulava submarine-launched ballistic missile, leave uncertain whether it can of manufacture and maintain a fleet of low-observable aircraft. Quality control at the level of sub-contractors has been a recurring problem challenging the reliability of Russian weapons systems.

Another challenge for Russia’s program is that Moscow’s defense priorities might change. The PAK FA is a high prestige program that is also seen as a means of helping to revitalize Russia’s military and civilian aerospace sectors. Yet, the main threats facing Russia today come from Islamist terrorists, which are best countered by good intelligence, local police work, and perhaps small-unit military action by Special Forces. Critics might succeed in inducing the Russian government to reallocate funds from the PAK FA program to other defense or civilian priorities. A related issue is that the Indian government might decide not to join with Russia in co-producing the plane and withdraws its funding.

Nonetheless, a cause of concern for U.S. analysts will be the increased spending in the Russian military budget, the will of the Russian government to push this product through and meet its 2015 deadline, and Moscow’s interest in selling the plane to other countries, which risks proliferating their fifth-generation technologies. The willingness of Russia to export a fifth-generation fighter with the ability to penetrate sophisticated air defenses is another issue of concern. In contrast, the number of F-22 planes to be produced is more strictly limited, meaning the PAK FA, while perhaps not being able to outperform the F/A-22 on a plane-by-plane basis, could outnumber U.S. fifth-generation fighters in coming years.

———-

***Posted on August 17^th, 2010

———-

Appendix

Basic Information for the Sukhoi T-50: Estimated Performance

Dimensions (m): wing (14,2; S=78,8 m2); length (22); height (6, 05)

Weight (kg): max (37000); normal (26000); empty (18500)

Fuel (kg): 10300

Combat Load (kg): max (7500); AA max (2260) conformal

Speed (km/h): max (2100; m2, 0); rate of climb (350 m/s); min (0 OVT); cruise (1300)

Alt (m): 20000

Flight range (km): 4000/5500 (2x2000kg)

Supersonic (2500)

Runway (m): 350 (w/o OVT)

G-force (g): 10-11

RSC: 0,05 m2

Wing overload (kg/m2): max (470); normal (330)

Thrust to weight ratio: max (0,84); normal (1, 19)

Fuel rate: 2,55 kg/km

Flight time: 3,3 h

Engine: AL-41F (117C on first prototypes)

Thrust: 2×15500 (18000?/2×9800)

Compressor: diameter 932mm, 3 steps

Weight: 1350 kg

Pressure increase: 4,2-4,5

Life time: 4000 hours

Overhaul life: 1500 hours

Nozzle weight: 380 kg

Deviation angle: +16 deg in any direction, +20 deg flat

Deviation speed: 60 deg/sec

Electronics: N050 (?) BRLS IRBIS AFAR/AESA

Armament? 1(2?)X30mm gun

Harpoints: 10 (conf.), possible 2*4 external

[SOURCE: “PAK-FA Sukhoi T-50,” WARFARE.RU, Omsk VTTV Arms Exhibition, Military Parade JSC, 2010, http://warfare.ru/?linkid=2280&catid=255].

Comparison between Russia’s T-50 and the U.S.’s F-22 Raptor

Cruising speed: T-50: mach 1.7-1.8; F-22: mach 1.7
Maximum speed: T-50: mach 2.45; F-22: mach 2.5
Range: T-50: 2,000 km; F-22: 2,000 km
Service ceiling: T-50: 20,000m; F-22: 20,000m
Maximum take-off weight: T-50: 37,000 kg; F-22: 38,000 kg”
The T-50 will cost less than $100 million which is 2.5 times less than the Lockheed Martin/Boeing F-22

[SOURCE: “The T-50 Fifth Generation Fighter,” June 7, 2010, RIA Novosti, http://en.rian.ru/infographics/20100219/157939986.html.]

The PRC Claim to Super-Power Status and the F-22: Not so fast!

Posted on August 17, 2010 | by SysAdmin | Leave a Comment

A comparison of Russia's T-50 fighter jet on the left and Lockheed Martin's F-22 on the right (Credit photo: http://www.foxnews.com/scitech/2010/06/18/putin-boasts-russias-new-fighter-jet-better-planes/)

By Hon. Ed Timperlake

It has often been claimed that there are no coincidences, which is a debating point without resolution. However, in matters of National Security, smart analysts should always consider that possibility.

The Peoples Daily propaganda machine has recently announced the Peoples Republic of China is now a full-fledged world power and in their opinion all Americans should come to attention and take notice.

A very bold headline on July 30, 2010 in Peoples Daily asks a rhetorical question—“Is US ready to recognize China as world power?”

Of course the article has a delicious sentence written with a sense of ironic whimsy that was apparently missed by the author– “It is easier said than done for the United States to adapt itself to China’s development. Lip service is far from enough to boost the development of Sino-U.S. Relations.”

The article is actually PLA “lip service.” The Peoples Republic of China will remain a second tier but growing military threat to America, but only if the US invests in the modernization of its power projection forces.

By coincidence, Flight International reports on the very same day a way ahead for US national security wellbeing—

“Lockheed to preserve F-22 tooling for future use”
“Lockheed Martin confirms the US Air Force has decided to retain tooling
for the F-22 after the production line in Marietta, Georgia, shuts down
as scheduled in 2012.

A comparison of Russia’s T-50 fighter jet on the left and Lockheed Martin’s F-22 on the right (Credit photo: http://www.foxnews.com/scitech/2010/06/18/putin-boasts-russias-new-fighter-jet-better-planes/)

The decision means that USAF officials will be able re-visit F-22 production in the evolving political landscape. Hopefully the door will be open after November for future USAF and allied fighter pilots giving thanks to a very strong legal point made by a former USAF civilian assistant and West Point classmate of Secretary Mike Wynne (Class of 1966). John P Wheeler (WP 1966, also a Harvard MBA and Yale Law graduate) pointed out that neither the DOD nor Lockheed Martin Company had the legal authority to summarily and surreptitiously destroy the manufacturing technology for the F-22 production line.

In 2009, the F-22 was capped by a congressional vote President Obama called the F-22 “outdated.” At the same time, the Air Combat Command (ACC) commander called into question the wisdom of stopping F-22 production.

According to a story in the Christian Science Monitor, “In a June 9 letter to a senator, Gen. John Corley, commander of the Air Force’s Air Combat Command, wrote: ‘In my opinion, a fleet of 187 F-22s puts execution of our current national military strategy at high risk in the near to mid term.'”

If the F-22 line is kept alive, and a Raptor export version for Japan, Australia, and the Israeli Air Force is developed, the People’s Liberation Army Air Force (PLAAF), who symbolically announced they are ready for the NFL, will find that in actual combat for Air Dominance they are still playing arena league football. (See SLD’s video of a F-22 flyover here.)

This is because the F-22 was always envisioned in partnership with the revolutionary F-35 (see https://www.sldinfo.com/?p=7742). Globally that Hi-Hi mix of 5th Generation Fighters the F-22 and F-35 have the ability to dominate the sky for a generation. (see https://www.sldinfo.com/?p=341)

Many pundits and pols on both sides of politics, liberal and conservative applauded the truncated buy of F-22s. After all there were no near term peer competitors! But that was a big oopsie—when the Russians test flew their F-22ski as Reuters reports on June 18, 2010, “Prime Minister Vladimir Putin climbed into the cockpit of Russia’s newest fighter jet on Thursday and said it would trump a U.S.-built rival, the F-22 Raptor. Putin watched a test of a ‘fifth-generation’ stealth fighter, dubbed the T-50 and billed as Russia’s first all-new warplane since the collapse of the Soviet Union in 1991. ‘This machine will be superior to our main competitor, the F-22, in terms of maneuverability, weaponry and range,’ Putin told the pilot after the flight, according to an account on the government website.”

But nevertheless prudence dictates that the decision to terminate F-22 production be re-examined. Rather than funding public works projects with uncertain benefit for US public interests, funding the F-22 re-enforces the US industrial base and provides the potential for exports. The President has called for doubling the value of US exports, a process surely aided by resuming F-22 production.

———-

***Posted on August 17th, 2010

Iraq 2012: President’s Speech Leaves Many Questions Unanswered

Posted on August 17, 2010 | by SysAdmin | Leave a Comment

By Dr. Richard Weitz

In his August 2 speech before a Disabled American Veterans conference in Atlanta, President Barack Obama said that the American role in Iraq was transitioning from Operation Iraqi Freedom, a military effort led by U.S. combat troops, to Operation New Dawn, a civilian mission run by U.S. diplomats based at the Baghdad Embassy.

The President reaffirmed that he would meet his campaign vow to end the U.S. “combat” role in Iraq by the end of this month. For 18 months after that, some 50,000 American soldiers will engage in a transitional mission of training, advising, and equipping Iraqi forces as well as working with them to fight terrorism and protect civilian economic reconstruction projects. Obama restated that all U.S. soldiers will leave Iraq after 2011, when the current security agreement negotiated in 2008 between Washington and Baghdad authorizing their presence expires. This withdrawal would leave U.S. embassy personnel, periodic joint U.S.-Iraq troop exercises, and large numbers of American contractors to support past and future arms sales as well as other services as the main U.S. military contributions to Iraq in 2012 and beyond.

President Obama also made clear that his administration plans to prioritize Afghan War needs when deciding where to send U.S. military personnel, equipment, and supplies for the remainder of his first term. Although this speech was billed in advance as a presidential statement on his Iraq policies, Obama actually spent more time defending his Afghan strategy—as well as quite properly thanking the veterans for their service—than explaining the administration’s future approach toward Iraq. While the number of U.S. troops in Iraq has sharply declined since Obama assumed office in January 2009, a figure that should exceed 90,000 people in a few weeks, the number of American military personnel in Afghanistan has surged from 33,000 to almost 100,000.

One reason for his prioritizing Afghanistan was that the situation in Iraq now looks much better by comparison. Although Iraq is a more important country by most objective measures (population size, value of natural resources, regional influence, etc.), the Iraq security forces have managed to perform much more effectively than their Afghan counterparts, though Iraqi and U.S. sources disagree about the level of violence still plaguing the country.

President Obama during the speech (Credit Photo: Charles Dharapak/AP via http://www.msnbc.msn.com/id/38518416/ns/politics/)

Last month’s international conference in Kabul set 2014 as the date when the multinational coalition supporting the Afghanistan plans to transfer many domestic security tasks to Afghan government forces. But even this late date seems premature given the currently weak state of the Afghan National Army and National Police. There were 66 American casualties recorded in Afghanistan in July 2010, the highest monthly total ever.

In contrast, since July 2009, when the Iraqi government assumed responsibility for ensuring security in the country’s urban areas, the American combat forces in that country have stayed mainly in the background. They now mostly provide intelligence, advice, and logistical support to the approximately 700,000 Iraqi military and police personnel, who have assumed the most prominent security roles in their country. In principle, Iraqi commanders have had to approve every major military operation conducted by U.S. forces in their country. These operations have included joint patrols between U.S. and Iraqi forces, a practice that has helped suppress the sectarian, ethnic, political, and other divisions among the Iraqi security personnel. Some of these joint patrols, such as around the explosively contested city of Kirkuk, should continue for at least the next year. The success of their transformed role has already allowed tens of thousands of U.S. troops to leave Iraq without evoking much alarm or even drawing much attention.

That said, the security situation in Iraq, while not dire, remains troubling. Last month’s suicide attacks and car bombs in Baghdad, Baquba and Karbala killed some 170 people. The spokesman for the U.S. forces in Iraq, Maj Gen Stephen Lanza, said a total of 222 people died in July 2010 due to terrorist actions. According to Iraqi sources, at least 535 people were killed last month, the highest level of violent deaths for more than a year. Some observers worry about a possible revival of al-Qaeda in Iraq, which appeared largely defeated following the surge in U.S. forces in Iraq in 2007 and 2008.

Although joint Iraqi-U.S. military patrols continue to kill or capture a few al-Qaeda in Iraq leaders each month, the organization rapidly finds replacements. Rumors persist that some Iraqi security forces have also tacitly supported the bombings as part of the maneuvering for political influence in the country, perhaps to discredit the current government or induce U.S. troops to remain longer than planned. Many police units are lagging behind their army colleagues in training and performance, requiring the 250,000 Iraqi army personnel to man urban checkpoints searching for bombs and terrorists rather than patrol Iraq’s international borders. A lack of high-level leadership of the security forces due to the inability of Iraqi factions to form a new government may be compounding the problem.

This is indeed the main uncertainty at present—which parties will form the next ruling coalition and which individuals will occupy the key posts of Prime Minister, President, and the Minister of Interior. Despite the delayed holding of the national legislative elections on March 7—the original intent was for them to occur last December—Iraq’s political leaders have yet to form a government. The failure of a single party to receive anywhere near a 163 seat majority of the 325 contested parliamentary seats—the two highest party vote totals were 91 and 89—reflects the pluralistic nature of contemporary Iraqi society. The decision to employ an open-list system, which permits voters to cast ballots for individuals no matter where they rank on the party lists, has further weakened the role of Iraqi political parties. As a result, the personalities involved matter much more than their nominal party affiliation. Whatever the winning candidates said or did during the election campaign to become deputies in the new national Council of Representatives also matters little since they are now free to form new legislative coalitions and allegiances.

Iraq’s Ethnic Divisions (Credit Photo: The University of Texas at Austin, General Libraries)

Prime Minister Nouri al-Maliki has been using the advantages of incumbency to remain in office despite the close second-place showing of his primarily Shiite State of Law coalition behind that of the Iraqiya coalition led by former Prime Minister Ayad Allawi, who secured the support of many of the Sunni minority as well of Iraq’s Shiite majority. After months of political maneuvering and coalition dealing, neither man has been able to put together a majority governing coalition. The third and fourth place finishers—the Iraqi National Alliance of Shiite religious parties and the Kurdish coalition—have so far refused to commit to a government led by either Maliki or Allawai, while the latter two men have declined to accept an alternate compromise candidate. Since Iraq will soon enter the holy month of Ramadan, which starts in mid-August, it might not be until the fall that a new coalition finally arises, by which time Iraq will have a new U.S. ambassador in place of Chris Hill and another U.S. military commander to replace Gen. Ray Odierno. When it took six months to form a government after Iraq’s previous national election in 2005, the country slid into anarchy and civil war.

In addition to the security complications, the lack of a functioning government has impeded the development and implementation of coherent economic and other domestic policies. The constant electricity shortages, the stagnating oil production, the unattractive investment climate, the poor public services, and other economic problems threaten to undermine support for Iraq’s democracy before it takes root. Pervasive corruption has already worked to decrease foreign investment and aid, while mismanagement has thwarted efforts to transfer U.S.-funded projects to Iraqi government control. The UN Security Council is awaiting the formation of a government in Baghdad before voting whether to remove the international sanctions imposed on Iraq following its 1990 invasion of Kuwait.

U.S. officials have urged the Iraqis to accelerate their political efforts but have refrained from trying to force the issue or expressing preference for any particular leader or group. They have properly sought an inclusive coalition. Although some observers might at this point embrace any government that finally takes share, it is important that Iraq’s important religious and ethnic minorities—including the Sunnis, but also the Kurds, Turkmen, and perhaps others—feel fairly treated. Iraq’s minority groups need to believe that they will enjoy some influence over future government policies or they will become an alienated and perhaps violent force in the country’s politics. For this reason, it would be best if Iraqi governing coalitions included Kurds, Sunnis, and other non-Shiites in more than token positions to avoid further weakening inter-ethnic harmony in Iraq’s still fractured and traumatized society.

It is also clear that the current Iraqi constitution needs to be amended soon to clarify certain ambiguities, such as that the party the wins the most votes in a national legislative election receives the first opportunity to form a new government. Another needed change would require that incumbents relinquish office after a certain time rather than remain indefinitely in power, which encourages them to impede the formation of a replacement coalition. In addition, a revised constitution should mandate the holding of new elections if a government cannot be formed after six months or so. Amendments should also weaken the power of the Prime Minister, perhaps by enhancing the powers of the Presidency over foreign and defense policy. With two important positions available, Allawi and Maliki would be able to share power equitably in a joint government rather than fight viciously for the uniquely influential post of Prime Minister.

Yet, the March 7 parliamentary elections have confirmed Iraq’s status as a functioning democracy in which multiple candidates and political parties compete for office in accord with international standards for free and fair elections whose outcome cannot be predicted beforehand. Neither incumbency, nor tribal loyalty, nor sectarian affiliation determined the results of this March’s voting. Domestic and international observers, including those representing the United Nations, found no evidence of pervasive and serious fraud that might have substantially affected the outcome. If Allawi becomes Iraq’s next Prime Minister, or if someone besides the two current front runners heads the next government, Iraq will have marked an important democratic milestone, becoming one of the few Middle Eastern countries to have replaced its leader and ruling party through peaceful national elections. If Maliki remains in power, Iraq would still have had its most democratic election in history.

Although the future of the U.S. military role has become clearer, and democratic principles and practices still seem to enjoy the support of large number of Iraqis despite the frustratingly protracted process of forming a coalition government, other dimensions of the post 2011 Iraq-U.S. relationship remain opaque. The Obama administration has yet to specify what role Iraq will play in future U.S. policies toward the Middle East or with regard to many other dimensions.

The Sama CH2000 surveillance plane is one of the aircraft used by the Iraqi air force's 70th Squadron to train pilots for intelligence, surveillance and reconnaissance missions. The squadron has worked diligently to bring an era of independence and now trains Iraqi pilots with Iraqi instructors. (Credit Photo: 367th Mobile Public Affairs Detachment, 4/19/10)

Before leaving office, the Bush administration signed a November 2008 strategic cooperation agreement with the Iraqi government that committed both countries to maintaining extensive political, economic, energy, and cultural ties. Obama administration officials have not yet explained how they will implement this agreement, other than to release a statement on March 27, when the Independent High Election Commission certified the March 7 ballot, that, “The United States will continue to work closely with all Iraqi leaders to build a long-term, multi-dimensional relationship between our two nations.”

The future U.S. economic role could prove especially important. Many Iraqis tell media interviewers and opinion pollsters that they their main grievances are economic. The new Iraqi parliament needs to enact long-delayed energy, investment, and tax laws. In particular, Iraq and U.S. officials need to cooperate to ensure the continuing revival of Iraq’s energy sector, the anticipated source of many future jobs and government’s revenue.

This partnership could prove difficult. On the one hand, the United States does not want to appear as if it is seeking to plunder Iraq’s hydrocarbon wealth for its own benefit. On the other hand, it would not help future bilateral relations if, as in Afghanistan, the main result of so many U.S. and Iraqi deaths is to make the country safe primarily for Chinese state investment.

Iraq’s relations with its important neighbors also remain unclear. The elections saw a disturbing pattern of internal-external alignments in the country. Exploiting the lack of a law restricting foreign political financing, Iranians provided considerable support for Shiite-dominated parties, especially the faction led by the anti-American cleric Muuqtada Sadr, while the more secular parties received substantial assistance from sources in Turkey, Syria, and the Persian Gulf.

Allawi, whose backers include a large number of Sunnis alienated from Maliki’s government, has expressed interest in strengthening Iraq’s relations with other Arab governments whose ties are also strained with Maliki’s government, which is perceived as close to Iran. One of the first acts of the new Iraqi parliament should be to enact legislation restricting election contributions from non-Iraqi sources.

Weitz also discussed this issue on C-SPAN’s Washington Journal.

———-

***Posted on August 17th, 2010

The USCG Faces Personnel Reductions in the Face of the Gulf Oil Crisis

Posted on August 8, 2010 | by SysAdmin | Leave a Comment

08/08/2010

By Retired Admiral Ed Gilbert

The U.S. Coast Guard (USCG) is the smallest of our military services (“The runt of the military litter”, said one highly biased anti-military pundit.) Although it has 11 missions assigned by statutes, most of us see it executing the vital search and rescue mission, responding quickly to major incidents such as Hurricane Katrina where it saved more than 30,000 lives, earthquake in Haiti where it was “first in and last out”, and of course the current work in the Gulf of Mexico. It has vessels on patrol in many places like a cop on the beat to deter illegal immigration, drug smuggling, and provide security to our coastal regions and ports. It enables our marine highway system with thousands of aids to navigation. Although little noticed in the Katrina aftermath, it surveyed ports along the Gulf coast, marked and reopened them in record time. A high percentage of the nation’s cargo flows through these vital waterways.

In an era where dramatically increased attention is being focused on the Arctic, our Coast Guard has the nation’s only Arctic icebreaker capability – a scant three vessels and two are down for repairs that should have been funded years ago. The Russian Federation has 25.

Most of the world’s navies resemble our Coast Guard, which is very active around the world doing training and cooperative programs, especially in less developed nations. It has a large contingent of personnel in Iraq assisting with Coast Guard type missions. “Soft power” was being done long before the term was coined.

Wrestling with personnel reductions should be the last of its concerns; not so, it is a major issue as developed below because of the Obama Administration’s budget submissions for FY11 and anticipated budgets thereafter. The Coast Guard’s work force has about 42,000 military, 7,600 civilians, and 7,500 reservists. Follow on articles will address reservist and civilians.

Thirty thousand volunteer USCG auxiliary personnel make unique and exceptionally valuable contributions. These are qualified to Coast Guard standards and do much operational work for the Coast Guard and training for the boating public.

A Military Personnel System Needs

Members striving for greater responsibility and leadership positions.
A normal “up or out” approach.
Training, which is critical to maintain competencies and ensure mission execution.
Adequate flow to avoid stagnation.
Few if any peaks and valleys, which are not good for the system.

Members enter the service by a variety of ways, but most officers come from the Coast Guard Academy or Officer Candidate School. Enlisted members start at boot camp in Cape May, NJ with a four-year service contract, and officers incur length of service obligations when commissioned or provided special education or training. Enlisted members often, “re-up” by extending their contracts. These contracts and obligated periods of service inhibit quick reductions in the force.

Retention is another large factor. The steady-state systems are built on a predicted retention percentage based on historical trends. Retention is unusually high for the Coast Guard for a number of reasons, first and foremost, the Coast Guard offers an attractive career as a great place to work and do many worthwhile things very well. Economic conditions are another factor affecting whether people stay or leave. Retention rates are at a record high as shown below:

Enlisted System

10 year average attrition – 12.5%
FY09 attrition – 9.5%
FY10 forecasted attrition – 7.5%
For every 1% decrease in attrition – 330 personnel remain in the service

Officer System

10 year average – 6.81%
FY09 attrition – 5.54%
FY10 forecasted attrition – 5.50%

Because of 9/11 and other reasons, the service had been growing, and in April 2009 growth was predicted to be 10,000 over the next five years. In a growth environment, carrying additional personnel allows the organization to keep up with the growth demand (chart 1).

Credit Graph: Admiral Ed Gilbert

By October 2009, FY11 forecasts had the USCG reducing personnel by approximately 1,100. This was about a 3,000 – almost 10% – billet swing; all within the same planning cycle. This also occurred during the worse economic conditions in decades. The normal out-flow of personnel was drastically reduced because of economic conditions in the private sector. Next year’s budget request is expected to reduce the force by another 1,000.

Responses

Officer System Actions:

Total accessions reduced by about 25.
Maximum reductions allowed by laws were in the number of Flag Officers.
Increased attrition by reducing the opportunity of selection for all ranks (for example reducing the selection from 0-5 (Commander) to 0-6 (Captain) to 50%. Historically the Coast Guard and other organizations have had great difficulty in sorting with the level of cuts – many good experienced and vital performers do not make it.
Zone sizes were adjusted to keep promotion points in range.
Extended Active Duty and Continuation Contracts cut drastically.
Academy class of 2014 – target reduced to 185 graduates.
Obligated service for retirement was waived in some cases.

Enlisted System Actions:

Selective Reenlistment Bonuses – Reduced to zero.
Accessions were reduced in FY10 to 2,250. The lowest ever.
Extended active duty programs were cut.
Professional Growth Points (time in service for promotional opportunities) were reduced.

In the future, if the service returns to its pre-2011 level of personnel, a “valley” in the workforce will have been introduced that will continue through the system for the 30 year life cycle. This will require a return to paying substantial bonuses to encourage a higher percentage to reenlist since we will be short of capability at the mid grade level. Also these people will be frustrated because of slow promotions due to inadequate flow; they will have a propensity to want to leave the service.

One might ask: “Why are these cuts being made when the Coast Guard is busier than ever dealing with the oil spill and executing countless other jobs for us while we waste money on ‘jobs creation’ programs that don’t create jobs and run up the deficit?” The answer is quite simple: silly priorities by our elected officials. The solution is obvious.

———-

***Posted on August 8th, 2010

The Gulf Oil Spill Crisis: Meeting the Stewardship Challenge

Posted on August 8, 2010 | by SysAdmin | Leave a Comment

By Dr. Robbin Laird and Rear Admiral Ed Gilbert, (Retired)

President Obama Addresses the Media at USCG Station, Grand Isle, La.
(Credit Photo: USCG Atlantic Area)

The tragedy of the Gulf oil spill is likely to become a blame game ultimately. This need not be so, and if it is the tragedy will be magnified and an opportunity lost. Crises such as these provide an opportunity to assert leadership to prepare for and to shape effective approaches for the future. The challenge is to provide for a proper government stewardship role for the deepwater drilling enterprise and re-shaping the public-private partnership for such activities. Make no mistake about it; we and other nations will drill in the deepwaters. Simply planning for the green future is an exercise in aspirational politics, rather than realistic government adaptation to meet the near-term future.

To execute a proper stewardship function, the US government team needs to be re-shaped, re-capitalized and strengthened.

First, there is the re-shaping challenge. To date, the USCG has had responsibility above the waters for inspections, and the Minerals Management Service for below the surface. This now needs to be re-shaped with a new inspection sharing of powers to ensure that the entire enterprise can be inspected seamlessly with all the resources necessary for the jobs.

Second, government simply does not have presently the scientific and technological expertise to oversee the deepwater drilling enterprise. Scientific and technological experts need to be hired to provide the proper partners for the USCG and MMS to ensure effective oversight. Creative ways must be found to attract and keep people with these kinds of expertise.

Third, the US government will never own all the expertise to provide for scientific and technological evaluations. This can not be fully insourced, so that an effective scientific and technological partnership with the private sector is essential for success.

USCG Buoy Tenders Are Being Recruited from Virually Every Sector for the Gulf Oil spill leaving their normal area of operations uncovered. (Credit Photo: Fox TV 10, http://www.fox10tv.com/dpp/news/gulf_oil_spill/buoy-tender-responds-to-oil-spill) — USCG Buoy Tenders Are Being Recruited from Virually Every Sector for the Gulf Oil spill leaving their normal area of operations uncovered. (Credit Photo: Fox TV 10)

Fourth, the USCG and the other inspection and oversight agencies need to be fully resourced to meet the challenge. Rather than proceeding with cuts to the USCG, new money should be invested in the USCG role in building proper expertise. The USCG has no tools for situational awareness and management below the waters, for example. Inspectors able to oversee the enterprise need to be hired as well, rather than proceeding with personnel cuts in USCG staff.

Fifth, the USCG needs to have fully funded task forces available for crises like these. Built around additionalresources such as national security cutters. A full team must be available to intervene in crises needs as an above normal operations approach.

Sixth, the USCG has had to move many of its assets to the Gulf to deal with the crisis leaving the country at risk elsewhere. This is unacceptable and can be solved only by increasing the speed of the overall recapitalization of the rapidly depleting USCG core capabilities.

The Administration has spoken of the need to be an effective participate in protecting the global commons. No clearer example of exercising leadership in he the global commons can be made than shaping an effective response to future deepwater drilling. The oil spill is not simply an American affair, in the Gulf of Mexico; with the movement oil by the by currents, it becomes and Atlantic matter as well.

We need hearings on how to properly move forward and to shape a recapitalization and stewardship budgets. Rather than yet another hearing on the failures of the oil industry, it is about time to focus in a no nonsense way on the proper US government role. We and the rest of the world should expect no less.

———-

***Posted on August 8th, 2010