February 7, 2024 | International, Land, C4ISR
Adopt a treaty for semiconductor export control
Opinion: The absence of a robust global semiconductor export control regime leaves the United States vulnerable in the technological race.
October 16, 2020 | International, Aerospace
A&D Industry And The Chinese Conundrum: Get In Or Out?
Western airlines are begging for more government aid, the International Air Transport Association does not expect the industry to see positive cash flow before 2022, and credit agency analysts forecast depressed aerospace and defense business activity for up to another 1.5 years.
Meanwhile, data continues to portray China as the lone bright spot in the aviation world. By August, Chinese domestic flights had recovered to about 90% of 2019 levels. “China has been effectively controlling the spread of COVID-19, limiting cases to less than 100 a day. Combined with a large domestic market, the recovery in commercial aviation is expected to outpace the rest of the world,” Jefferies analysts Sheila Kahyaoglu and Greg Konrad noted in late September.
“Right now, really, the two areas of traffic that are close to normal are domestic China and the roughly 2,000 all-cargo aircraft out there today,” echoes AeroDynamic Advisory Managing Director Kevin Michaels. Otherwise, “it's a bloodbath, and we're all aware of that,” he told an Aviation Week SpeedNews conference in September.
For aerospace and defense (A&D) suppliers, the dichotomy sets up a critical decision: Should suppliers and servicers run toward China—or run away?
It is easy to understand why they are debating the question. Long before COVID-19 gutted commercial air traffic and kick-started what is expected to be the greatest makeover of aircraft manufacturing and the maintenance, repair and overhaul industries since the dawn of the jet age, there were already good reasons to debate being in China. Topping the list was the Trump administration's trade war with the world's second-largest economy. Ongoing questions lingered about intellectual property rights and the specter of inadvertently creating future competitors in Avic, Comac and other Chinese companies.
Proponents of reshoring industry to the U.S.—or “nearshoring” to Canada or Mexico—are certainly touting potential opportunity. “The logical thing is to fill longer-term and COVID-revealed supply chain gaps,” Reshoring Initiative President Harry Moser told an Aerospace and Defense Forum audience on Oct. 6.
Others agree that conditions are ripe for reshoring, not least because automation and advanced technologies that replace humans can offset North American costs. Also, A&D has been deemed a critical part of U.S. infrastructure. And Chinese unit labor costs have risen fivefold in recent decades. This summer, site-selection consultant Duff & Phelps identified A&D as a top candidate for moving to America (see chart).
But siting decisions are complex, and supply chain moves are even more so. Not only is commercial aviation looking strongest in China now and in the near future, but it could accelerate a long-expected toppling of the U.S. as the world's leading aviation market, possibly as soon as 2025. Increasingly, Beijing officials talk about relying on domestic supply instead of imports. Indeed, the “Sleeping Giant” could boast a future estimated aviation market value of more than $1 trillion, according to Yi Zhang, general manager of OCO Global China.
That catches suppliers' attention. Zhang spoke in June to a well-attended webinar hosted by Washington state economic development officials about aerospace opportunities in China, and that was a month before Boeing revealed it was even thinking about scrapping 787 production in Puget Sound, Washington.
Now China's opportunities beckon brighter with no snapback in Western air traffic.
Still, in his Sept. 24 report titled “Caveat Venditor,” or “seller beware,” Vertical Research Partners analyst Rob Stallard cautions Western A&D companies against rushing toward China. “We see the Chinese government leveraging its position of relative post-COVID strength in coming years, and no doubt aerospace will see some of the fallout,” Stallard says. “As the biggest show in town, we would expect to see more quid pro quo in China's relationship with what is still very much a Western aerospace industry. Price, supply chain and technology transfer could be on the table, as could politics.
“Aviation could conceivably suffer collateral damage as part of a broader trade war,” Stallard writes. “So while investors will probably see good news in a Chinese-led aero recovery, we would be looking for any strings attached.”
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August 6, 2020 | International, C4ISR, Security
New England guardsmen test their skills in Cyber Yankee 2020
Mark Pomerleau Members of the National Guard from New England states concluded a two-week cyber exercise that sought to test the cyber skills of guardsmen and critical infrastructure operators. Cyber Yankee 2020, which took place July 21-31 in New Hampshire, involved more than 200 National Guard members and their civilian counterparts from across New England states, along with some active-duty partners and participants from local, state and federal agencies. In its sixth year, there was less attendance than previous years due to the coronavirus pandemic, but several were able to participate remotely. “Cyber Yankee is primarily a hands-on keyboard cyber incident response exercise for National Guard soldiers and airmen in FEMA Region 1, which are the six New England states,” said Lt. Col. Woody Groton, a member of the New Hampshire National Guard and the director for Cyber Yankee, according to a Facebook post by the New Hampshire Air National Guard. Groton said in a video that the exercise is primarily focused on the electrical and water sector. The exercise is “a great training opportunity for us to work with those people who would actually own the network that we would potentially respond on and for our soldiers and airmen to get that experience and for the engineers from those various entities, they get the training in working with us,” he said. The Guard units within the various states are a critical resource to defend against cyberattacks when they overwhelm localities. “If a large-scale attack happened against a power company, water company, or any other critical department around the state, we would be able to get activated and help them mitigate the threat,” Capt. Frederick Bond, 103rd Air Control Squadron cyberspace operator and exercise Team 3 lead from the Connecticut National Guard, said in a release. “It's similar to when a storm comes and we help remove fallen trees or shovel snow from roofs to help get critical infrastructure going again.” The friendly blue team had to deal with simulated attacks from an opposing red team. Social media posts were used to simulate a real internet environment, where forces must sift through the noise and discern what information is needed to make decisions and identify threat actors. In one case, these actors defaced a public website. “We found some discrepancies including website, it looks like it may have been defaced. The team is digging into finding the source of that defacement and then making steps to correct it,” Master Sgt. Eric Lewis, a blue team member in the New Hampshire Air National Guard, said in a video. Other actions tested included protecting computer files from being stolen or manipulated. “We received intel that potential threat actors may be using a certain capability to transfer files,” said Senior Airman Stephen LaLuna, 103rd Communications Flight cyber systems operations specialist with the Connecticut National Guard. “We see the traffic that's using it, that sets off a flag on our end to look deeper into that. If we determine it is malicious, we send it up the chain with our findings and recommendations to block it.” Officials explained that one of the most critical aspects of these training events is the partnerships built between Guard units, critical infrastructure operators and government entities so that when a crisis breaks out, everyone is acquainted. “We have built enduring partnerships with state government and the critical infrastructure sector. Something that if we did have a major cyberattack against one of those, we would be ready to respond and already know each other,” Groton said. Correction: An earlier version of this story misidentified Lt. Col. Woody Groton. He is with the Army National Guard. https://www.c4isrnet.com/cyber/2020/08/03/new-england-guardsmen-test-their-skills-in-cyber-yankee-2020
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June 10, 2022 | International, Land
After Rheinmetall bid for Oto Melara, Italian government awaits Fincantieri's move
'We will wait for September for a Fincantieri offer, we want to have the entire picture,' a government source in Rome said.