Tuesday, March 09, 2010

DTN News: China's Challenge

DTN News: China's Challenge Source: By Jennifer Richmond and Rodger Baker STRATFOR (NSI News Source Info) TORONTO, Canada - March 10, 2010: China’s National People’s Congress (NPC) remains in session. As usual, the meeting has provided Beijing an opportunity to highlight the past year’s successes and lay out the problems that lie ahead. On the surface at least, China has shown remarkable resilience in the face of global economic crisis. It has posted enviable gross domestic product (GDP) growth rates while keeping factories running (if at a loss) and workers employed. But the economic crisis has exposed the inefficiencies of China’s export-dependent economic model, and the government has had to pump money into a major investment stimulus package to make up for the net drain the export sector currently is exacting on the economy. For years, China’s leaders have recognized the risks of the current economic model. They have debated policy ideas to shift from the current model to one that is more sustainable in the long run and incorporates a more geographically equitable growth and a hefty rise in domestic consumption. While there is general agreement on the need for change, top leaders disagree on the timing and method of transition. This has stirred internal debates, which can lead to factionalization as varying interests align to promote their preferred policy prescription. Entrenched interests in urban areas and the export industry — along with constant fears of triggering major social upheaval — have left the government year after year making only slight changes around the margins. Often, Beijing has taken one step forward only to take two back when social instability and/or institutional resistance emerge. And this debate becomes even more significant now, as China deals simultaneously with the aftermath of the global economic slowdown and preparations for a leadership transition in 2012. The Hu Agenda Chinese President Hu Jintao came into office eight years ago with the ambitious goal of closing a widening wealth gap by equalizing economic growth between the rural interior and coastal cities. Hu inherited the results of Deng Xiaoping’s opening and reform, which focused on the rapid development of the coastal areas, which were better geographically positioned for international trade. The vast interior took second billing, being kept in line with the promise that in time the rising tide of economic wealth would float all ships. Eventually it did, somewhat. But while the interior saw significant improvements over the early Mao period, the growth and rise in living standards and disposable income in the urban coastal areas far outstripped rural growth. Some coastal urban areas are now approaching Western standards of living, while much of the interior remains mired in Third World conditions. And the faster the coast grows, the more dependent China becomes on the money from that growth to facilitate employment and subsidize the rural population. Hu’s predecessor, Jiang Zemin, also recognized these problems. To address them, he promoted a “Go West” economic policy designed to shift investment further inland. But Jiang faced the same entrenched interests that have opposed Hu’s efforts at significant change. While Jiang was able to begin reform of the bloated state-owned enterprises, he softened his Westward economic drive. Amid cyclical global economic downturns, China fell back on the subsidized export model to keep employment levels up and keep money flowing in. Concern over social instability held radical reform in check, and the closer Jiang got to the end of his term in power, the less likely he was to make significant changes that could undermine social cohesion. No Chinese leader wants to preside over a major economic policy that fails out of fear of being the Chinese Mikhail Gorbachev. For those like Hu who have argued that rapid reform is worth the risk of potential short-term social dislocation, the global downturn was seen as validating their policies — and as confirming that the risks to China of not changing far outweigh the risks of changing now. The export industry’s drag on GDP has forced Beijing to enact a massive investment and loan program. By some accounts, fixed investments in 2009 accounted for more than 90 percent of GDP. Those arguing for faster reform have noted that the pace of investment growth is unsustainable in the long run, and that the flood of money into the system has created new inflationary pressures. Much of this investment came in the form of bank loans that need to be serviced and repaid. But as the government tries to cool the economy, the risk of companies defaulting on their loans looms. Cooling the economy also threatens to burst China’s real estate bubble. This not only compounds problems in related industry sectors, it could also trigger massive social discord in the urban areas, where housing has taken the place of the stock market as the investment of choice. Beijing’s Ongoing Dilemma Chinese leaders face the constant dilemma of needing to allow the economy to maintain its three-decade long export-oriented growth pattern even though this builds in long-term weaknesses, but shifting the economy is not something that can be done without its own consequences. Social pressures are convincing the government of the need to raise the minimum wage to keep up with economic pressures. At the same time, misallocation of labor and new job formation incentives in the interior are causing shortages of labor in some sectors in major coastal export zones. If coastal factories increase wages to attract labor or appease workers, they run the risk of going under due to the already razor-thin margins. But if they don’t, the labor fueling these industries at best may riot and at worst might simply move back home, leaving exporters with little option but to close shop. Looming demographic changes around the globe also impact the Chinese situation, and the government can no longer rely on an ever-increasing export market to drive the Chinese economy. Some international companies operating in China already are beginning to consider relocating manufacturing operations to places with cheaper labor or back to their home countries to save on transportation costs Chinese wages are no longer mitigating. With its export markets unlikely to recover to pre-crisis levels any time soon, competition and protectionism are on the rise. The United States is growing bolder in its restrictions on Chinese exports, and China may no longer avoid having the U.S. government label it a currency manipulator. While this may be an extreme measure in 2010, the pressures for such a scenario are rising. Amid its domestic and global challenges, Chinese leaders are engaged in economic policy debates. It appears that internal criticism is being directed against Hu as social tensions over issues like rising housing prices and inflation grow. In some ways, this is not unusual. National presidents often bear the brunt of dissatisfaction with economic downturns no matter whether their policies were to blame. In China, however, criticism against economic policy falls on the premier, who is responsible for setting the country’s economic direction. The focus on Hu reflects both the depth of the current crisis and the underlying political tensions over economic policy in a time of both global economic unpredictability and preparations for the end of Hu’s presidency in 2012. To bridge the gulf between the urban coast and the rural interior, Hu and his supporters have pursued a multiphased plan. First, they sought to rein in some of the most independent of the coastal areas — Shanghai in particular, which served as a center of power and influence not only in promoting the continuation of unfettered coastal growth but also of Hu’s predecessor, Jiang. Second, a plan was put in motion to consolidate redundancies in China’s economy and to shift light- and low-skilled industry inland by increasing wages in the key coastal export manufacturing areas, reducing their cost competitiveness. And Beijing added an urbanization drive in traditionally rural and inland areas. Together, this represented a joint attempt to bring the jobs to the interior rather than continue the pattern of migrant workers moving to the coast. The core of the Hu policies was an overall attempt to re-centralize economic control. This would allow the central government to begin weeding out redundancies left over from Mao’s era of provincial self-sufficiency, which the Deng and Jiang eras of uncoordinated and locally-directed economic growth often driven by corruption and nepotism exacerbated. In short, Hu planned to centralize the economy to consolidate industry, redistribute wealth and urbanize the interior to create a more balanced economy that emphasized domestic consumption over exports. However, Hu’s push, under the epithet “harmonious society,” has been anything but smooth and its successes have been limited at best. Hu Meets Resistance Institutional and local government resistance to re-centralization has hounded the policy from its inception, and resistance has grown with the economic crisis. Money is now pouring into the economy via massive government-mandated bank lending to stimulate growth through investments as exports wane. Consequently, housing prices and inflation fears now plague the government — two issues that could lead to increased social tensions and are already leading to louder questioning of Hu’s policies. With just two years to go in his administration, Hu already is looking to his legacy, weighing the risks and rewards between promoting long-term economic sustainability or short-term economic survival. The next two years will witness seemingly incongruent policy pronouncements as the two opposing directions and their proponents battle over China’s economic and political landscape. Hu’s rise to the presidency was all but assured long before he took office. From a somewhat simplified perspective, the PRC has had only four leaders: Mao Zedong, Deng Xiaoping, Jiang Zemin and Hu Jintao. When Mao died, his appointed successor, Hua Guofeng (who was settled upon after several other candidates fell out of favor), lasted only a short time. Amid the political chaos of the post-Cultural Revolution era, Deng rose to the top. Both Mao and Deng were strong leaders who, although contending with rivals, could rule almost single-handedly when the need arose. To avoid the confusion of the post-Mao transition, Deng created a long-term succession plan. He ultimately settled on Shanghai Mayor Jiang Zemin as his successor. But in an effort to preserve his vision and legacy, Deng also chose Jiang’s successor, Hu Jintao. Barring some terrible breach of office, Hu was more or less guaranteed the presidency a decade before he took office, and there was little Jiang could do to alter this outcome. Jiang, however, made sure that he left his mark by lining up Hu’s successor, Xi Jinping. Despite Jiang’s support, Xi has not risen through the ranks in the same manner as Hu did, raising speculation of internal disagreements on the succession plan. Vice President Xi is considered one of the “princelings,” leaders whose parents were part of the revolutionary-era governments under Mao and Deng who mainly have cut their teeth through business ventures concentrated in the coastal regions. Hu, on the other hand, is considered among the “tuanpai” or “tuanxi,” leaders who come primarily from the ranks of the Communist Youth League and interior provinces. While these “groups” are not in and of themselves cohesive factions, and China’s political networks are complex, Hu’s and Xi’s backgrounds reflect their differing policy approaches. As such, the question of the next Chinese leader is shaped by opposing economic plans. On one hand are those like Hu who support a more rapid and immediate refocusing on rural and interior economic growth, even at the cost of reduced coastal and urban power. On the other hand, those like Jiang and his protege Xi have an interest in maintaining the status quo of regionalized semi-independence in economic matters and continued strong coastal growth. They are proceeding on the assumption that a strong coastal-led economy will both provide more immediate rewards for themselves and strengthen China’s international position and its national defense. It is important not to overstress the differences. Each has the same ultimate goal, namely, maintaining the CPC as the central authority and building a strong China; it is just their paths to these ends that differ. But the economic policy differences are now becoming key questions of Party survival and Chinese stability and strength. Factional struggles that in normal circumstances can be largely controlled, or at least would not get out of hand, are now shaping up in an environment where China’s three-decade economic growth spurt may be reaching its climax. Meanwhile, social pressures are rising amid uncertainties and instabilities in Chinese economic structures. Beijing has emerged from the economic crisis bolder and more self-confident than ever. But this is driven more by a recognition of weakness than a false assessment of strength. China’s leadership is in crisis mode, and at this time of economic instability and uncertainty, the leadership must also manage a transition that is bringing competing economic policies into stark contrast. And this is the sort of pressure that can cause the gloves to come off and throw expectations of unity and smooth transitions out the window. Everything may pass smoothly; two years is a long time, after all. But if there is one thing certain about the upcoming change of presidents, it is that nothing is certain.
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*This article is being posted from Toronto, Canada By DTN News ~ Defense-Technology News, contact: dtnnews@ymail.com
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DTN News: Boeing 787 Begins First Flight-Test Operations Outside Of Washington

DTN News: Boeing 787 Begins First Flight-Test Operations Outside Of Washington Source: DTN News / Boeing (NSI News Source Info) VICTORVILLE, Calif., - March 10, 2010: The second Boeing (NYSE: BA) 787 Dreamliner, ZA002, landed at 10:53 a.m. local time today in Victorville, Calif. This marks the beginning of the first flight-test operations outside of Washington state for the program. The airplane will be stationed at Victorville for approximately three weeks. The crew will conduct ground effects testing among other activities. During ground effects testing, the pilots fly the airplane very close to the runway to gather data regarding the aerodynamic effects and performance of the airplane during the takeoff and landing phases of flight. Quantifying this performance is part of the certification requirements for all new airplanes. "Victorville's airfield is the former George Air Force Base," said Randy Neville, chief pilot for ZA002. "There is ample ramp space for parking and plenty of on-site facilities. There is a long runway and plenty of level, clear land along the approach to the runway. We can operate there without disrupting air traffic control or other commercial aircraft." A crew of more than 150 employees will be stationed at Victorville while the airplane is there. These include the flight test engineers and support personnel required to prepare the airplane for each day's flights and to monitor performance and test equipment. "Our confidence in the reliability of this airplane grows day by day," said Scott Fancher, vice president and general manager of the 787 program. "Taking the airplane out of state for the first time is a big step, but one we're ready for."

DTN News: Boeing Receives Phase 1 of Contract For US Air Force QF-16 Drone

DTN News: Boeing Receives Phase 1 of Contract For US Air Force QF-16 Drone Source: DTN News / Boeing (NSI News Source Info) ST. LOUIS, - March 10, 2010: Boeing [NYSE: BA] has been awarded a U.S. Air Force contract worth approximately $69.7 million for the initial engineering, manufacturing and development of QF-16 Full Scale Aerial Targets to replace the QF-4 fleet. Under the terms of the remainder of the contract, expected to be awarded in coming years, up to 126 QF-16 drones will deliver beginning in 2014. Boeing engineers and support personnel will convert retired F-16 aircraft into QF-16s for use as aerial targets for newly developed weapons and tactics. The drones, which will be equipped to evaluate how U.S. fighters and weapons will operate against potential adversaries, will be flown within a controlled range and used for testing. They will be able to fly either manned or unmanned. QF-16 design and development will take place in St. Louis. Ground and flight testing and production will be completed at the Boeing facility in Cecil Field, Fla., near Jacksonville. “We are honored and prepared to provide the U.S. Air Force, the 691st Armament Systems Squadron, and the QF-16 Program with next-generation, full-scale aerial targets through a low-risk, affordable, technically superior solution,” said Steve Waltman, director of Boeing Aircraft Sustainment & Maintenance. The Boeing-led QF-16 team, which includes BAE Systems in Johnson City, N.Y., meets all requirements presented in the QF-16 design, development and production contract. Collectively, the Boeing team has 33 years of experience with drone systems. A unit of The Boeing Company, Boeing Defense, Space & Security is one of the world’s largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions, and the world’s largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Boeing Defense, Space & Security is a $34 billion business with 68,000 employees worldwide.

DTN News: Northrop Will Not Bid For KC-X; Boeing Benefits

DTN News: Northrop Will Not Bid For KC-X; Boeing Benefits Source: DTN News / Int'l Media By Anil Daka (NSI News Source Info) TORONTO, Canada - March 10, 2010: Yesterday, Northrop Grumman NOC announced that it would not submit a bid for the $35 billion KC-X, the aerial refueling tanker program. With EADS not willing to make a solo bid, and Northrop deciding not to protest, Boeing BA is primed to capture the entire award unopposed. We have factored this scenario in our Northrop and Boeing fair value estimates, so we are maintaining both. The aerial refueling tanker is one of the largest department of defense (DoD) procurement programs. Today, the Pentagon operates around 415 re-engined KC-135 Stratotankers and 59 KC-10 extender aerial refueling aircraft. Most of these aircraft are old, having entered service in the Eisenhower era. These tankers are also crucial to overseas power projection since they facilitate rapid deployment of other aircraft and enable them to stay in the air longer. After a botched bidding process that spanned a decade, the U.S. Air Force came out with its final request for proposal (RFP) on Feb. 24. The RFP called for 372 criteria, and the DoD would award the project to the bidder with the lowest price if all conditions are met. The Northrop product, based on the A330 platform, while significantly larger, faced competition from the smaller, but cheaper Boeing 767 version. Northrop decided that the current deal would not create value for its shareholders and decided against bidding again. We applaud Northrop for maintaining disciplined capital allocation. Throwing equity at a project that guarantees poor returns is a sure way to lower ROIC, and we think Northrop's decision is the best possible route for its shareholders. Further, the extensive use of fixed price contracts for the KC-X program would have subjected the winner to significantly higher risks in the future. Even from a strategic standpoint, Northrop does not lose much. The tanker was not meant to demonstrate superior or innovative technology that would have given the winner an edge in future contests. Most components on the KC-X are mature, and the issue is simply the cheapest way to build the plane. Winning the award will boost Boeing's defense business after this division suffered from major program cancellations (Future Combat Systems, airborne laser, the F-22) during the past two years. United Technologies UTX also benefits, since Pratt and Whitney will power the Boeing plane. However, Boeing should play the price card well to create value. Should the firm price its product too high, DoD might be forced to issue a new RFP altogether, botching Boeing's ambitions. At the lower end, Boeing will suffer from poor margins if it lowers its price in an effort to keep DoD happy and eliminate competition. It appears that the fight over the tanker is ending after nearly a decade of jostling.

DTN News: Thailand TODAY March 10, 2010 ~ Thailand Imposes Tough Security Law For Thaksin Protests

DTN News: Thailand TODAY March 10, 2010 ~ Thailand Imposes Tough Security Law For Thaksin Protests Source: DTN News / Int'l Media (NSI News Source Info) BANGKOK, Thailand - March 10, 2010: Thailand's government Tuesday agreed to impose a tough security law ahead of protests this weekend, vowing to use "all means" to stop violence by backers of ousted premier Thaksin Shinawatra. The Internal Security Act allows authorities to deploy troops on the streets during mass anti-government rallies in Bangkok by the so-called "Red Shirts" and also to impose curfews and ban gatherings. Under the law, to be in force between March 11 and 23, the government also banned farm vehicles from the capital in an apparent bid to block the movement of protesters from Thaksin's heartland in the rural north. "The cabinet has approved the imposition of the Internal Security Act and the prime minister has assigned each ministry certain responsibilities," said Satit Wongnongtaey, a minister attached to premier Abhisit Vejjajiva's office. Organisers say they expect up to 600,000 Red Shirts to start gathering in Bangkok from Friday for the main day of protests on Sunday against a court ruling last month that confiscated 1.4 billion dollars of Thaksin's fortune. The government predicts that around 100,000 protesters will gather. Security officials said at least 30,000 troops and police would be deployed or on standby along with thousands more civilian security volunteers, although final numbers had yet to be determined. The government has also prepared safe houses for senior figures. The country remains deeply divided between supporters of the populist Thaksin, who was deposed in a military coup in 2006, and those among the Bangkok-based elites who view him as corrupt. Satit said the transport ministry would ban improvised farm trucks -- open-sided vehicles that drive on tractor engines -- from entering Bangkok as they could be used to ferry large numbers of protesters from the countryside. Thaksin, who made his fortune in telecommunications, has been egging on his supporters from self-imposed exile in Dubai, where he is living to avoid a jail term for graft. Thai Finance Minister Korn Chatikavanij on Monday said the government would take all means within the law to prevent violence. Korn said Abhisit respected the right to peaceful protest but added that the government also fully intended to "use all means within its powers, within the laws of the country, to make sure that the property and safety of its citizens are protected". On Monday Abhisit briefed Thailand's revered king, who has been hospitalised for the past five months, on the weekend's planned rallies, dubbed "The Red March" by local media. Any migrant workers attending the rallies would meanwhile be subject to a five-year jail term and fines of up to 100,000 baht (3,100 dollars), Labour Minister Phaitoon Kaeothong said. Thailand's economy relies on workers from its poorer neighbours Myanmar, Laos and Cambodia, but in recent months the country has become tougher on immigration and has been accused of widespread mistreatment of migrants. Senior Reds insist they will protest peacefully, but it promises to be the biggest rally since last April, when up to 100,000 Red Shirts derailed a major Asian summit and ensuing riots left two people dead. The Philippines on Tuesday advised its citizens to avoid travelling to Thailand ahead of the protests. "Filipinos are advised to postpone all non-essential travel to Thailand, specifically Bangkok," the foreign office said, adding that those in Bangkok had been advised to avoid potential flashpoints and protest spots.

DTN News: Automobile News March 10, 2010 ~ Toyota Hits Back At Claims Of Electronic Defects

DTN News: Automobile News March 10, 2010 ~ Toyota Hits Back At Claims Of Electronic Defects Source: DTN News / AFP (NSI News Source Info) LOS ANGELES - March 10, 2010: Toyota sought Tuesday to dispel fears about the safety of its electronics, but was put on the defensive when a Prius went speeding out of control along a California highway. The Japanese automaker insisted that mechanical fixes it is applying to more than eight million vehicles recalled worldwide are sufficient and that its tests are rigorous. It empanelled engineers from Stanford University and a top consulting firm to dismiss as "unrealistic" and contrived a study showing crossed wires could send a false signal that would cause Toyota cars to speed out of control. David Gilbert, a professor of automotive technology at Southern Illinois University, told a US congressional investigation last month that some Toyota and Lexus vehicles may have an electronics design flaw. Toyota dismissed his findings, saying he had re-engineered and rewired the signals from the accelerator pedal in order to create the flaw. "If an electrical system is re-engineered and rewired it's not surprising that subsequent testing of the system may cause unrealistic results," Toyota spokesman Mike Michaels told reporters. US regulators said last week that they had received more than 60 complaints from Toyota owners reporting sudden unintended acceleration despite having their recalled vehicle repaired by a Toyota dealer. Toyota is in the process of investigating those complaints and has found that some of the incidents were a result of incomplete repairs, Michaels told reporters. "We remain confident that if the modifications to the vehicle are deployed and done properly that they are effective," he said. Yet just hours after Toyota's trenchant criticism of Gilbert's findings, the company was grappling with another public relations nightmare after a runaway Prius drama in California. James Sikes, 61, was driving on the busy Interstate 8 freeway outside San Diego when he noticed his car was starting to accelerate of its own accord, the California Highway Patrol said. The terrified motorist was helpless as the car raced along the road at speeds of more than 90 miles (145 kilometers) per hour. Tragedy was only averted after Sikes was able to call police, and officers using a loudspeaker talked the driver through the process of slowing down by using his emergency brake and then turning off the engine. "I was on the brakes pretty healthy," Sikes told NBC San Diego. "It wasn't stopping, it wasn't doing anything to it, and just kept speeding up." Toyota later issued a statement saying a technical specialist had been sent to San Diego "to investigate the report and offer assistance." The drama was a chilling echo of the tragic accident last August where off-duty California Highway Patrol Officer Mark Saylor and three family members were killed when the accelerator of the Lexus ES350 they were in got stuck. Minutes later, the Toyota-made vehicle slammed into the back of a sport utility vehicle at about 100 miles per hour, veered off the freeway, overturned and burst into flames. All four family members died. Meanwhile, the chairman of a congressional committee sent a letter Monday to Toyota North America President Yoshimi Inaba, ordering the company to turn over a memo in which senior employees reportedly flagged their concerns about the safety of Toyota cars. "If senior Toyota officials ignored important safety concerns raised by their own employees, it calls into question Toyota's corporate priorities and its commitment to safety," wrote Edolphus Towns, chairman of the House Oversight and Government Reform Committee, in a statement. Towns has given Toyota until Friday to respond. Toyota, which overtook General Motors in 2008 to become world number one automaker, has seen its reputation tarnished by a litany of complaints ranging from unintended acceleration to brake failure and steering problems.

DTN News: Japan TODAY March 10, 2010 ~ Japan Lifts Lid On Cold War Nuclear Pacts With US

DTN News: Japan TODAY March 10, 2010 ~ Japan Lifts Lid On Cold War Nuclear Pacts With US Source: DTN News / AFP (NSI News Source Info) TOKYO, Japan - March 10, 2010: Japan's new centre-left government lifted a veil of secrecy Tuesday surrounding nuclear and military deals struck with the United States, formally abandoning decades of denials over the Cold War pacts. A panel of historians Tuesday released a report commissioned by the six-month-old government on the "secret treaties," confirming previous information from whistleblowers, media leaks and declassified US documents. The report officially confirmed that, from the 1960s Japan quietly allowed US warships to carry nuclear weapons across Japanese territory and, in the case of an emergency, to take them to US bases on the southern island of Okinawa. The tacit agreements, previously denied, were reached despite Japan's pacifist stance and its official "non-nuclear principles" of not making, possessing or allowing on its soil atomic bombs, the panel found. Foreign Minister Katsuya Okada told a news conference: "It is extremely regrettable that this problem for such a long time remained under cover, to the Japanese, even to parliamentary sessions, even after the end of the Cold War." Okada said he could not rule out that US nuclear weapons had been brought into Japan but said he believed this had not happened since the United States in 1991 announced the withdrawal of tactical nuclear arms from its warships. Japan, since its World War II defeat by the United States, which dropped nuclear bombs on Hiroshima and Nagasaki, has maintained a pacifist and anti-nuclear stance, but has relied on the superpower for nuclear deterrence. The United States has some 47,000 troops stationed in Japan. US-friendly Conservative parties ruled Japan for almost its entire post-war period but were ousted in landmark elections last August that brought to power the Democratic Party of Japan (DPJ) under Prime Minister Yukio Hatoyama. Japan's new rulers have signalled a less subservient relationship with Washington, and more dovish foreign policy than previous governments, which had sent non-combat troops to support the US war in Iraq. Hatoyama has angered Washington by saying his government may scrap a previous agreement to relocate a controversial US military base within Okinawa, which still hosts the bulk of the US troops stationed in Japan. He stressed that it was important the report "would not affect future relations between Japan and the United States," Jiji Press reported. Nuclear deterrence "is needed for the Asia-Pacific region as well as the Japan-US security treaty," he said, but stressed that pacifist Japan remained committed to its non-nuclear principles. The panel of scholars found that the previous conservative governments of the Liberal Democratic Party (LDP) had for decades deceived the public. Under another agreement, also long denied, Tokyo allowed US forces to launch military operations from Japan "as needed" without preliminary consultations in case of renewed war on the Korean peninsula, they said. Former prime minister Eisaku Sato and then US president Richard Nixon also agreed in 1969, as part of talks on the 1972 return of Okinawa, that US forces could bring nuclear weapons on to the island in an emergency. "For many years, the government repeatedly gave insincere explanations to its people, especially about the issue of nuclear-armed ship transits," said the historians led by Tokyo University's professor Shinichi Kitaoka. Nagasaki mayor Tomihisa Taue immediately criticised the former conservative rules as "deceiving atom-bomb survivors who feel very strongly about the non-nuclear principles," Jiji Press reported. After examining 4,423 files from Japanese foreign ministry and US embassy archives, the scholars highlighted 35 documents as proof of the existence of the clandestine agreements, with 331 items open to the public. But they said many classified documents were missing, hinting that they may have been destroyed.

DTN News: Indonesia TODAY March 10, 2010 ~ Indonesian Police Gun Down Suspected Terrorist, Four More Arrested

DTN News: Indonesia TODAY March 10, 2010 ~ Indonesian Police Gun Down Suspected Terrorist, Four More Arrested Source: DTN News / Bernama (NSI News Source Info) JAKARTA, Indonesia - March 10, 2010: Indonesian police today gunned down a man suspected to be a member of a terrorist group and arrested four others in two separate locations in Pemulang, Tengerang, Banten. The group, believed to have links with a terrorist network in Aceh Besar, was sought after by police for the past few days. Indonesian Police Headquarters Public Relations Division chief Edward Aritonang told reporters this evening that the man was shot at his house in Jalan Siliwangi, Tengerang, for defying police orders and firing at police during the raid. They also found a revolver loaded with five bullets, 12 live bullets and an empty shell in the house. "The suspect fired a shot at police but did not hit his target, prompting the police to retaliate," said Aritonang, adding that a woman and three children were also detained to help facilitate investigations. Meanwhile, police also arrested four other suspects in Jalan Setiabudi, Pamulang, Tengerang today. --MORE POLICE-TERRORIST 2 (LAST) JAKARTA Aritonang said all five suspects were believed to be terrorists involved in the supply of fire arms and fund contributors in Aceh Besar. Their discovery was possible with information received from other terrorist suspects, arrested in Aceh Besar, several days ago. The police had earlier shot dead three terrorists and arrested 14 others in a large-scale operation in Aceh Besar. Last week, two terrorist suspects were arrested separately in Bandung, West Java and another here, who were also believed to be linked to the group. Meanwhile, Indonesian Coordinating Political, Legal and Security Affairs Minister Djoko Suyanto was quoted by Antara news agency today as saying that there was no change of plans to US President Barack Obama's visit to Indonesia, despite the arrest of terrorists. Obama is scheduled to visit Indonesia from March 20 to 22.

DTN News: Military Plane Problems Drag EADS Into The Red

DTN News: Military Plane Problems Drag EADS Into The Red Source: DTN News / AFP (NSI News Source Info) PARIS, France - March 10, 2010: European aerospace giant EADS said on Tuesday that it plunged into loss last year because of big provisions to cover cost over-runs on its A400M military transport project and A380 superjumbo jet. EADS released its results just hours after it withdrew from a joint bid with US partner Northrop Grumman to build an aerial refuelling tanker plane for the US Air Force. US rival Boeing was poised to win the 35-billion-dollar contract after EADS pulled out of the bidding, later objecting vigorously that the terms of the latest tender had been skewed by US authorities in favour of Boeing. EADS posted a 2009 net loss of 763 million euros (1.04 billion dollars) after making a net profit of 1.57 billion euros the previous year. EADS was hit by a 1.8-billion-euro provision for the much-delayed A400M, but the company struck a deal with seven NATO clients on Friday to share the burden of big unexpected cost over-runs in developing the highly innovative aircraft. "Thanks to the agreement between the customer nations and EADS this programme is now back on track," EADS chief executive Louis Gallois said in a statement. "Although the Group has to take an additional significant provision, this stabilises the programme," he said. "Apart from the A400M, we remain fully focused on improved programme management including further ramp-up of the A380, the development of the A350 and the Saudi Border Surveillance programme." The company also took a 240-million-euro charge last year because of difficulties stepping up production of the A380 double-deck airliner. EADS said it would not pay a dividend to shareholders for 2009 owing to the losses. EADS was cautious in its outlook for 2010. The group said it expected "roughly stable" sales this year after a turnover of 42.8 billion euros in 2009. It also forecast earnings before interest and tax of one billion euros after an EBIT loss of 322 million euros last year. "As EADS enters into 2010, the Group remains fundamentally solid to cope with the improving but still volatile economic environment," the company said in its earnings statement. The company said it expects to receive gross orders for between 250 and 300 aircraft in 2010. It said it would deliver at most the same number of planes as in 2009, when it delivered a record 498 aircraft to airlines. The entire A400M project, which was meant to show Europe's independence from US defence suppliers and employs 10,000 people, had been under threat, after years of delays led several countries to question its viability. But some governments, particularly France -- which is home to the main Airbus plant and is particularly attached to the idea of shared European defence projects -- pushed hard for a solution. The seven governments agreed on Friday to give EADS an additional 3.5 billion euros to save the military transport project. Belgium, Britain, Luxembourg, France, Germany, Spain, Turkey ordered A400M planes but after the project ran into trouble, they initially balked at EADS demands that they cover cost overruns of about 5.2 billion euros. The governments agreed to waive damages for the delays, accelerate pre-delivery payments and provide another 1.5 billion euros in exchange for a share in any future export sales.

DTN News: U.S. Department of Defense Contracts Dated March 9, 2010

DTN News: U.S. Department of Defense Contracts Dated March 9, 2010 Source: U.S. DoD issued March 9, 2010 (NSI News Source Info) WASHINGTON - March 9, 2010: U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs) Contracts issued March 9, 2010 are undermentioned;
NAVY ~Ecology and Environment, Inc., Lancaster, N.Y., is being awarded a maximum amount $40,000,000 indefinite-delivery/indefinite-quantity contract for environmental planning and engineering services for National Environmental Policy Act and Executive Order 12114, Environmental Effects Abroad of Major Federal Actions – Aircraft Homebasing Issues. Work will predominantly be performed in Virginia (25 percent), North Carolina (25 percent), Florida (15 percent), California (15 percent), and Washington (15 percent). Work may also be performed within the Naval Facilities Engineering Command, Atlantic area of responsibility and the adjacent waters of the Atlantic and Pacific Oceans, including the continental United States, the Caribbean, Europe, and North Africa (5 percent). However, tasks associated with this contract may be assigned anywhere in the world. The term of the contract is not to exceed 60 months, with an expected completion date of March 2015. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online Web site, with four proposals received. The Naval Facilities Engineering Command, Atlantic, Norfolk, Va., is the contracting activity (N62470-10-D-3003). ~CKY, Inc.*, Honolulu, Hawaii (N62742-10-D-1805);
~EATC, JV*, Honolulu, Hawaii (N62742-10-D-1806);
~FOPCO, Inc.*, Kapolei, Hawaii (N62742-10-D-1807);
~WCP-Zapata, JV, LLC*, Honolulu, Hawaii (N62742-10-D-1808), are each being awarded a firm-fixed-price, indefinite-delivery/indefinite-quantity multiple award contract in support of the Environmental Remedial Action Program at various sites in the Naval Facilities Engineering Command (NAVFAC), Pacific area of responsibility (AOR). The maximum dollar value, including the base period and four option years, for all four contracts combined is $30,000,000. Work will be performed at various sites predominantly in Oahu, Hawaii (55 percent); however, work may also be performed at any site within the NAVFAC Pacific AOR, including Guam (15 percent), Japan (5 percent), Okinawa (15 percent), Diego Garcia (5 percent), and other areas in the Pacific and Indian Oceans (5 percent). The term of the contract is not to exceed 60 months, with an expected completion date of March 2015. Contract funds will expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online Web site, with 10 proposals received. These four contractors may compete for task orders under the terms and conditions of the awarded contracts. The Naval Facilities Engineering Command, Pacific, Pearl Harbor, Hawaii, is the contracting activity. ~BAE Systems Technology Solutions & Services, Inc., Rockville, Md., is being awarded a $23,237,133 modification to a previously awarded cost-plus-fixed-fee term, level of effort contract (N00421-06-C-0085) to exercise an option for maintenance, logistics, and life cycle services in support of communication-electronic equipment/systems and subsystems for various Navy, Army, Air Force, special operations forces and other federal agencies. The estimated level of effort for this option period is 342,000 man-hours. These services are in support of the Special Communications Requirements Division of the Naval Air Warfare Center Aircraft Division. Work will be performed in Chesapeake, Va. (32 percent); Fayetteville, N.C. (28 percent); California, Md. (22 percent); San Diego, Calif. (6 percent); Fort Bliss, Texas (4 percent); Fort Walton Beach, Fla. (2 percent); Panzer Kaserne, Germany (2 percent); Homestead, Fla. (2 percent); Tampa, Fla. (1 percent); and the District of Columbia (1 percent). Work is expected to be completed in March 2011. Contract funds will not expire at the end of the current fiscal year. The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity. ~DCK Pacific Guam, LLC, Barrigada, Guam, is being awarded an $18,394,000 firm-fixed-price contract for design and construction of the Guam Army National Guard Readiness Center at the Guam Army National Guard Complex. The work to be performed provides for the design and construction of a permanent masonry type construction, with standing seam roof, concrete floors, and mechanical and electrical equipment with emergency power generator backup. Work will be performed in Barrigada, Guam, and is expected to be completed by Jan. 2012. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured via the Naval Facilities Engineering Command E-solicitation Web site, with seven proposals received. The Naval Facilities Engineering Command, Marianas, Guam, is the contracting activity (N40192-10-C-1335). ~CATLIN Engineers and Scientists, Inc.*, Wilmington, N.C., is being awarded a maximum amount $7,500,000 firm-fixed-price, indefinite-delivery/indefinite-quantity architect-engineering contract for civil A-E services at Marine Corps installations at Marine Corps Base Camp Lejeune and Marine Corps Air Station Cherry Point. The work to be performed provides for civil design projects that include, but are not limited to, providing/replacing/upgrading sanitary collection and treatment systems; installation of security fencing and entry control facilities; design of new and resurfacing of existing airfields, roads and parking lots; and facility site work to include demolition, etc. Work will be performed in Jacksonville, N.C. (85 percent), and Havelock, N.C. (15 percent), and is expected to be completed by March 2015. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured through the Navy Electronic Commerce Online Web site, with 20 proposals received. The Naval Facilities Engineering Command, Mid-Atlantic, Norfolk, Va., is the contracting activity (N40085-10-D-5303). U.S. TRANSPORTATION COMMAND ~Presidential Airways, Inc., an Aviation Worldwide Services Co., Camden, N.C., is being awarded a $39,084,532 task order for rotary wing aircraft, personnel, equipment, tools, material, maintenance, and supervision necessary to perform passenger and cargo air transportation services. Work will be performed in Afghanistan and the task order will start March 5, 2010, to be completed by Nov. 30, 2010. This contract was a competitive acquisition. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity (HTC711-09-D-0021). ~Canadian Commercial Corp., subcontracting services to Canadian Helicopters, Ltd., Toronto, Canada, is being awarded a $20,472,000 task order for rotary wing aircraft, personnel, equipment, tools, material, maintenance, and supervision necessary to perform passenger and cargo air transportation services. Work will be performed in Afghanistan and the task order will start March 5, 2010, to be completed by Nov. 30, 2010. This contract was a competitive acquisition. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity (HTC711-09-D-0022). ~Evergreen Helicopters, Inc., McMinnville, Ore., is being awarded a $20,094,000 task order modification for rotary wing aircraft, personnel, equipment, tools, material, maintenance, and supervision necessary to perform passenger and cargo air transportation services. Work will be performed in Afghanistan and the task order will start March 5, 2010, to be completed by Nov. 30, 2010. This contract was a competitive acquisition. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity (HTC711-09-D-0023). *Small business

DTN News: Boeing Sole Air Tanker Bidder As Competitors Exit

DTN News: Boeing Sole Air Tanker Bidder As Competitors Exit Source: DTN News / AFP (NSI News Source Info) WASHINGTON - March 9, 2010: Boeing is poised to win a 35-billion-dollar US Air Force aerial refueling tanker plane contract after rival partners Northrop Grumman and European partner EADS bowed out. Northrop Grumman said that it had decided not to bid to build the new planes because the US Air Force's requirements for the KC-X tanker program, published last month, favored Boeing. The Defense Department's request for proposals "clearly favors Boeing's smaller refueling tanker and does not provide adequate value recognition of the added capability of a larger tanker, precluding us from any competitive opportunity," said Wes Bush, chief executive and president of the US defense contractor. The Pentagon said it regretted Northrop's decision. "We are disappointed by Northrop's decision not to submit a bid for the US Air Force tanker replacement program," said William Lynn, deputy secretary of defense. "In the last tanker replacement competition, Northrop Grumman competed well on both price and non-price factors. We strongly believe that the current competition is structured fairly and that both companies could compete effectively." The Northrop-EADS team had won the contract in February 2008, but the deal was canceled after Boeing successfully appealed the decision to the Government Accountability Office, the investigative arm of Congress. Northrop and EADS, the parent of Boeing's arch-rival Airbus, at the time had offered a modified version of the commercial Airbus A330, while Boeing had proposed a 767-based tanker. "This is particularly disappointing given that the Air Force previously had selected the A330-based KC-45 because of its added capability, lower risk and best value," the European Aeronautic Defence and Space Company (EADS) said in a statement on Monday. With the exit of Northrop and EADS, Boeing is in prime position to snare the contract to replace the 1950s-era aging fleet of Boeing tankers. The US aerospace giant Boeing announced last week it would offer a modified version of its 767 commercial airliner, which is smaller than the A330 and consumes less fuel. The Chicago-based firm had said it would submit its proposal by May 10, within the 75-day period set out in the Pentagon's request for proposals. Boeing's plane will save American taxpayers 10 billion dollars in fuel costs and "is American designed and built," company spokesman Bill Barksdale said after the rival team's announcements. The Pentagon has struggled since 2003 to get a new tanker built. That year the Pentagon awarded a contract to Boeing but later suspended it amid an ethics scandal involving a company executive and an Air Force official, who was subsequently convicted of criminal conspiracy. Monday's pullout may be just another twist in the tortured contest, said Richard Aboulafia, vice president of Teal Group Corp. "This looks like a significant Boeing win, but weve seen several other false starts to this program," Aboulafia said. "Additional congressional scrutiny is likely, but congressmen and senators scrutinize programs most heavily when they can produce results for their districts. If there's no competition, there's little to be gained from paying more than a token amount of attention," he told AFP. An Alabama senator whose state would have benefited from EADS's promised plant to assemble the tankers, creating 300 jobs, accused the US Air Force of bowing to political pressure. "The Air Force had a chance to deliver the most capable tanker possible to our warfighters and blew it," US Senator Richard Shelby said. "This so-called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing," the Republican lawmaker said. The top Republican member of the House of Representatives Armed Services Committee called on Northrop to get back in the race. "I hope Northrop reconsiders its decision in the coming weeks," said Representative Howard McKeon. "I still believe that competition produces the most effective solutions for our warfighters and ensures the best value for US taxpayers."

DTN News: Swedish Saab Seems To Be Out Of India MMRCA

DTN News: Swedish Saab Seems To Be Out Of India MMRCA Source: DTN News (NSI News Source Info) NEW DELHI, India - March 9, 2010: The high-voltage $11 billion contest to sell India 126 Medium Multi-Role Fighter Aircraft (MMRCA) is reaching the end of the trials phase in a blaze of potential controversy. Today, the last of the six contenders being evaluated by the Indian Air Force — the Swedish Gripen — will fly into Bangalore for trials. But Business Standard has learnt that the fighters that will touch down are not the ones Gripen International has offered: the JAS-39IN Gripen NG. Instead, two older-model Gripen-D fighters will arrive. The Gripen NG, a light, agile, ultra-modern fighter built by Swedish aerospace giant Saab, has always been one of the hottest contenders in the fray. Saab’s default on the MoD’s trial directive, which lays down that the fighter being offered must be the one that comes for trials, will delight its rivals — Boeing, Lockheed Martin, Dassault, Eurofighter and MiG — since Gripen is now vulnerable to disqualification. The arrival of the Gripen-D instead of the Gripen NG has a simple cause: the Swedish Air Force, having opted to buy the Gripen NG, has ordered a series of improvements on the Gripen NG prototype. With those under way, Sweden’s flight certification agency, SMV, has ruled that the prototypes require additional flight-testing in Sweden before the aircraft can be sent to India. Confirming these developments, Gripen International’s Director India Eddy de la Motte told Business Standard, “The Gripen NG prototype cannot come just yet to India as it is required in Sweden for testing and evaluation by the Swedish Air Force which is interested in buying the fighter. Indian pilots have not yet flown the Gripen NG, but we will make sure that they get an opportunity at the very earliest.” Sources close to the Gripen campaign say IAF pilots will be offered a chance to fly the Gripen NG during a visit to Sweden from April 6 to April 10. Gripen International will also ask for fresh dates for bringing the Gripen NG to India for trials. Even without having flown the Gripen NG prototype, IAF pilots have been extremely impressed by the fighter’s capabilities. Besides superb avionics and superior flight performance, they say the Gripen NG can land on an 800-metre stretch of highway; and then refuel, rearm and take-off within 10 minutes. This allows each Gripen NG to fly far more sorties per day than any other aircraft today. The IAF pilots who have visited the Gripen simulators in Sweden have also been impressed by its electronic warfare capabilities and by the training facilities on offer. The Swedish MoD’s unexpected refusal to allow the Gripen NG to India for trials has blown the race wide open. From a clear front-runner in the eyes of the IAF, the Gripen NG’s very participation in trials now depends upon a decision to be taken by the IAF and the Indian MoD.