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The Wednesday Report
Canada's Aerospace and Defence Weekly

Volume 7, Number 22                    June 2, 1993

The main fear of nations opposing the Bosnia safe-area plan (last week’s issue) is that it would accede to the Serbs territory gained during their year long aggression. The Muslims don’t like it because they believe they would be herded into "reservations" for indefinite periods. Still in its incipient stages, the plan was created as an alternative to armed intervention -- something no one seems to have the stomach for. At the start of the week, Gorazde was anything but "safe". Sixty thousand Muslims in Gorazde were under heavy siege by invading Serbs. Fifteen nearby Muslim villages were left in burning ruin after Serbs broke through Muslim defensive lines east and north of Gorazde in a campaign, seemingly cued by news of the new "plan", beginning last Friday and continuing through the weekend. By Sunday a second so-called safe area, Sarajevo, came under heavy Serb fire. Some 1000 mortar, tank and heavy artillery rounds fell on Sarajevo through the day. So much for safe areas. So much for the international community’s bid to end the strife in Bosnia. So much for U.N. and other weak-kneed efforts which have brought more harm than good.

Russian defence technology still grabs the headlines, but can it grab the customers that the Federation desperately needs to win its battle to convert it to peaceful purposes? "Conversion 93", the first exhibition of Russian defence technology staged in the United Kingdom, only went part of the way towards providing an answer. The exhibition was held Monday through Wednesday of last week in Birmingham.
Exhibits from the eight principal sectors of the Russian defence industry seeking collaborative partners revealed both strengths and weaknesses. Predictably, Rocket Space, Atomic Energy (MINATOM) and Aviation Technology proved to be the big attractions. Aviation provided two headline-grabbers with models of an advanced eight-engined supercarrier for outsize cargo capable of operating at 1,300 tonnes takeoff weight, and an 880-kilometer-per-hour, 11,000-kilometer-range, 800-to-900-passenger flying wing. However in practical terms, it was probably the less remarkable but more marketable Mi-38 successor to the Mi-8 medium-lift helicopter and the highly regarded Beriev amphibians that will provide the greater attraction to those contemplating investment in Russian industry.
Probably the most revealing insight into Russian technology was provided by the materials science-based exhibits from the various organizations that make up the Rocket Space and Atomic Energy sectors. MINATOM which on the evidence of Conversion 93 must be classed as a leader in the field of plasma-based surface treatment, also emerged as a possible supplier of vacuum deposition plant for consumer products.
Certainly some of the conversion products on display had potential and it is not difficult to see them satisfying at least the domestic demand for refrigeration and central heating. In other areas Russian industry has developed niche products which will probably attract foreign partners. 

TRW Inc. is already cooperating with Russian businesses in the microelectronics market. Several departments have addressed opportunities in oil and mineral exploration. Certainly the Munitions and Special Chemistry department’s LNPO Soyuz has the look of a potentially good niche player with products for the biological treatment of chromate-contaminated waste water, superhard detonation diamonds and explosives for seismic line surveys. However on balance it has to be said that the Russian approach to marketing seems crude and generally ill-researched.
Nowhere was that more apparent than in the concept of an integrated Emergency Response system for the area around St. Petersburg. The concept is good, bringing together the heavy-lift search and rescue skimmer vessel -- which operates at heights between 1-4 meters above the water -- with a ‘weather navigation’ and surveillance and other radars, satellite communications, helicopters and land-based emergency vehicles. It is the type of project to which the West could contribute systems integration expertise, but its immature presentation at Conversion 93 begged too many questions.
Although it is still difficult to form judgements on Russian companies, the space organization’s Kompozit Research and Development Corp. could well emerge as one of the more attractive partners for foreign companies as it would provide them with a direct route to some of the most advanced materials technology. Kompozit’s expertise which at the high tech end of the spectrum includes manufacturing advanced single crystal materials in space, extends down to heat shield materials, carbon-carbon composites, beryllium, boron and aluminum nitride ceramics, and powder metallurgy -- there is even a material referred to as "Russian Kevlar". It is not difficult to see aircraft manufacturers outside the ‘major aerospace powers’ who currently lack advanced materials expertise recognizing Russian technology as a way in which they can narrow the technological gap between themselves and the majors -- and to bid for more complex subcontract work than has hitherto been available to them.
There is a more serious concern at the way in which these technologies are being marketed. Many could be adapted to roles in programmes associated with advanced weapons systems. Television camera crews were combing the exhibition floor for signs that MINATOM would be prepared to let a cash customer have a complete nuclear reactor (it would) or for signs that the advanced undersea robotic equipment offered for undersea exploration could be used in littoral naval operations (it almost certainly has been). As they did so, the fact went unremarked that carbon-carbon composite technology not dissimilar to that sought -- unsuccessfully -- on behalf of Iraq by Gerry Bull’s SRC Composites was openly on sale.
Conversion 93 was not a shop window for defence equipment, but it should have provided a reminder of the dangers of a fire sale of Russian technology. It is a risk that was typified by the appearance of a third-generation image intensifier pocketscope on the RC SI Vavilov SOI exhibit. It is unlikely that either the U.S. or the U.K. would permit the free export of such technology. Western manufacturers would certainly balk at discussing prices in public. Not so the Vavilov man. When asked, without a moment’s hesitation he replied, "Two-thousand, one-hundred dollars" -- a price which sent at least one leading U.K. electro-optics expert away with something to think about.
John Reed, U.K. Editor

The recently unveiled painting of the Avro Arrow by artist Robert Vanderhorst is now available in the form of a limited edition lithograph. In the painting, the Arrow is performing an inverted loop and the unusual perspective was designed to give the viewer a heightened sense of the maneuver. The painting can also be viewed upside down, exaggerating the effect. Directly below and to the right of the nose cone, the viewer will find several floating segments of land and a small boat floating above the clouds (the con trail passes beneath the largest piece of land). This was done to depict a sense of disorientation -- the same experience a pilot may have executing such a maneuver.
The lithograph is strictly limited to 750 prints, each 30.5" by 20.5" with a 3" white border on four sides. Each lithograph is signed, numbered and sealed by the artist and signed by the former Vice President and Director of Engineering for Avro Aircraft, Jim Floyd. All film and plates will be destroyed and documented.
The sale of the Avro Arrow lithographs will help the Aerospace Heritage Foundation of Canada continue its mandate to preserve and celebrate Canada’s history of aviation and aerospace development. For inquiries about purchasing the limited edition lithograph, please contact John Costick at (416) 975-8370.

"Raytheon is performing well in difficult economic times and a very competitive marketplace... we are on track with respect to our plan for the future," Dennis Picard, chairman and chief executive officer, told the company’s shareholders at the company’s 65th annual shareholders meeting in Lexington last Wednesday afternoon.
"That plan", he said, "has four key goals: 1) to stay strong in government electronics; 2) to grow commercial sales and to grow commercial profitability so that it achieves parity with government electronics profits; 3) to remain financially strong; 4) to stay a most competitive company." 
The company is well positioned in defence electronics, Picard said, because it is involved in high priority areas, such as missile defence. "While the current defence budget has hurdles to clear, so far we are doing well."
International orders are also helping Raytheon maintain its strong position in defence electronics, said Picard, pointing out that Raytheon has won nearly $2 billion in Patriot and Hawk contracts from Saudi Arabia and Kuwait since December 1992.
Picard said he envisions a Raytheon of the future "that will derive 40 percent of its defence sales from outside the U.S." In 1992, approximately 20 percent of the company’s defence sales were international.
The Patriot missile system, Raytheon’s largest defence programme, is highly reliable and continues to be improved, said Picard. "Reliability out of the plant is currently 12 times specification. And we continue to make Patriot better. Since the end of Desert Storm, we have been awarded $355 million for upgrades to Patriot."
The new Patriot PAC-3 multimode missile "will give Patriot a 20-fold improvement in defended area coverage on the ground" compared with the PAC-2 version used in Desert Storm.
Raytheon’s chairman also described ways in which Raytheon is transferring core defence technology into non-defence areas, such as air traffic control and vessel traffic control.
Three new markets the company is pursuing with defence-based technology are: receiver and transmit modules for a satellite-based global communications system called Iridium; new transportation systems, such as intelligent vehicle highway systems, personal rapid transit, and magnetically levitated trains; and a wide area surveillance system to monitor natural resources, such as the Amazon basin in Brazil.
Raytheon’s commercial businesses, said Picard, last year "contributed a greater share to our total company profits." The company’s five-year plan calls for roughly equal profits from government and commercial operations. 
Raytheon President Max E. Bleck reviewed with shareholders Raytheon’s appliance, engineering and construction, and aircraft businesses.
"By having established commercial companies with skilled and experienced people," Bleck said, "we are in the enviable position today of being able to concentrate on strengthening these businesses, not building them from scratch." He added that Raytheon’s balance sheet "is extremely strong, giving us the flexibility to invest in our future." 
The company’s debt decreased by 36 percent in 1992, and debt as a percentage of equity improved to 19 percent at year end, compared with 34.4 percent at the end of 1991.
Raytheon has "worked very hard," said Picard, to remain strong and competitive. "We have improved schedule performance in manufacturing; we have reduced scrap; we have consolidated and centralized; we have streamlined our processes. Where required, and only where required, we have reduced employment levels."
During the past 12 months, Raytheon’s employment declined by 8,000 -- from 70,400 to 62,400. Of the total reduction, approximately 1,500 were due to the sale of several small non-core businesses, 1,900 to early retirement, 1,700 to attrition, and 2,900 to layoffs. 
"That is a painful process," said Picard, "but it is absolutely necessary to maintain the most jobs possible for our people in the future." Picard concluded, "Our vision for the future is a Raytheon where we continue to be a technology leader and a quality leader...where costs are low, efficiency is high, and integrity remains absolute. ... a Raytheon where our competitive position wins us the most contracts possible, earns us the most orders possible, and saves the most jobs possible for the people of Raytheon."
In 1992, the company recorded sales of $9.1 billion and earnings of $635.1 million, Raytheon’s eighth consecutive year of record earnings. During the year, Raytheon’s return on sales increased from 6.4 percent to 7 percent, and its stock appreciated 23 percent.

The U.S. Navy Space and Naval Warfare Systems Command has awarded a $75.7 million contract to Raytheon Company to produce 60 satellite communication terminals for the Navy’s Extremely High Frequency Satellite Communications Programme (NESP). This full-production authorization covers terminals for ship, submarine and shore stations, as well as training, documentation, and related support items. The terminals will be produced at Raytheon’s Equipment Division facilities in Waltham, Mass., with engineering work to be performed at Marlboro, Mass.
Raytheon won the Navy competition for NESP development in 1986. Terminals delivered during the past two years are currently being installed at several locations by the Navy’s Atlantic and Pacific fleets.
The terminals provide secure communications with protection against enemy jamming and interception. They will operate with the Navy’s extremely high and ultra-high frequency communications satellites, as well as with MILSTAR satellites.

What follows is translated from a press communique issued by the government of Viet Nam at the end of a visit to that country during late spring by General John Vessey, special envoy of U.S. President Bill Clinton.
"As agreed by both [the U.S. and Viet Nam] governments, General John Vessey, President Clinton’s special emissary to Hanoi on POW/MIA affairs, led a U.S. delegation to Hanoi April 18-19 for a full range of discussions with officials of the Socialist Republic of Viet Nam. While in Hanoi General Vessey paid a call on President Le Due Anh on the afternoon of April 19. Earlier, the two sides held talks on the POW/MIA issue. The Vietnamese side was led by Foreign Minister Nguyen Manh Cam and included the deputy ministers of defence, interior, and foreign affairs, as well as officials concerned with the issue of searching for American missing persons in Viet Nam. The U.S. side included representatives of the National Security Council, the Department of State, the Department of Defence, and the Joint Task Force for Accounting for Americans Missing in Action.
"The U.S. side reaffirmed President Clinton’s objective of achieving the fullest possible accounting for missing American servicemen from the Viet Nam war. General Vessey stressed that the most immediate issue to be addressed was the serious concern raised in America by the document the United States had just received in Russian regarding the number of POWs held during the war. General Vessey also stressed the importance of answering the questions raised by the document and his hope that the two sides would cooperate on the matter.
"Concerning the Russian document recently obtained by the American side, the Viet Nam side rejected the information contained in it as completely inaccurate and not reflecting the reality which existed during the war. At the same time the Vietnamese side expressed its willingness to assist the United States regarding this matter. To this end, the Vietnamese side arranged for General Vessey to meet with retired Lieutenant General Tran Van Quang, whose name appears on the document, as well as retired Lieutenant Colonel Doan Hanh, a former official of the POW prison.
"The U.S. side expressed its appreciation for the Vietnamese government’s cooperation on this matter. In response to previous American requests, the Vietnamese side provided important documents from the archives of the Army General Political Department and other archives listing American POWs held during the war as well as American servicemen who died in captivity in southern and central Viet Nam. The U. S. side indicated that these documents will assist in its efforts to account for U.S. servicemen. They also appear to shed light on the Russian document if further analysis is required. General Vessey indicated that he would report immediately to President Clinton upon his return about all of these developments.
"The two sides also carried out a full review of all areas of POW/MIA cooperation. They agreed that substantial progress is being made and agreed that further action was necessary in order to increase this progress. Both sides agreed that they would join officials of the government of Laos for trilateral talks on POW/MIA cooperation to be held May 6-8 in Hanoi. Both sides also agreed to establish a new joint team to accelerate investigation of the remaining American discrepancy cases. There was also agreement in principle on the work plan for activities to investigate cases of missing Americans during the remainder of 1993.
"The Vietnamese side provided new information about other unilateral steps it has taken to assist in POW/MIA accounting. Foreign Minister Cam provided General Vessey with seven documents obtained from Vietnamese citizens, including sketches and maps of reported gravesites of American servicemen. The two sides indicated that they would investigate these reports during their next joint field investigation. At General Vessey’s request, Foreign Minister Nguyen Manh Cam also briefed the U.S. side on the results of the recently started ‘amnesty’ programme designed to induce Vietnamese citizens to turn over possible remains of U.S. servicemen which they are holding. 
"As a result of this effort, on 7 April the U.S. side repatriated remains associated with multiple individuals from eight wartime incidents. The Vietnamese side also provided a review of the humanitarian needs of Viet Nam for consideration by the United States. General Vessey noted this information and indicated he would convey it to President Clinton when he meets with him upon his return. General Vessey also expressed confidence that the U.S. would assist Viet Nam in its efforts to resolve the issue of Vietnamese missing in action and its war dead. 
"The two sides also discussed the Cambodian issue. The U.S. side reiterated the United States’ strong condemnation of recent acts of murder carried out against Vietnamese residents in Cambodia. The U.S. side also reviewed its measures to, together with other countries in the international community, halt these heinous acts. The Vietnamese side highly appraised these steps by the U.S. General Vessey expressed his appreciation to the government of Viet Nam for its cooperation and assistance provided to him during his mission."
Editor’s note: In response to reader interest The Wednesday Report has covered significant developments on the POW/MIA issue. Although estimates range widely from some 19,000 to more than 47,000, it is widely acknowledged that at least 20,000 Canadians served in Viet Nam in American uniform.

International Lease Finance Corporation, a major commercial aircraft-leasing company based in Beverly Hills, California has selected Litton navigation systems for installation aboard its fleet of Airbus A321, A330 and A340 jetliners now on order. Deliveries of Litton’s new Flagship LTN-101 laser gyro inertial navigation systems and complementary LTN-2001 Global Positioning System navigation sensors are scheduled to begin early next year under a multimillion-dollar order.
Litton’s Aero Products division, Woodland Hills, California currently has a firm order from the leasing company to equip a total of 37 aircraft, plus an option to equip 13 additional planes. Each aircraft will be equipped with three LTN-101 and two LTN-2001 systems. The Litton division also has separate agreements with Air France, Lufthansa, Sabena, Cathay Pacific, UTA Airlines, Euralair, Austrian Airlines and Thai Airways to install its Flagship system on Airbus jetliners ordered by those carriers. 
Canadair-built RJ-85 and RJ-100 Regional Jets operated by Lufthansa CityLine and Meridiana Airlines will also be fitted with the Flagship system. Additionally, the Moscow-based Ilyushin Design Bureau has chosen the Litton system as original equipment for its new IL-96M commercial jet.
Litton Aero Products’ Flagship inertial navigation system employs the company’s new Zero-Lock laser gyros. The unit provides high-accuracy, reliable performance in an electronics package that is 60 percent smaller and uses less power than comparable equipment.
Litton’s LTN-2001 sensors provide flight crews with precise position, velocity and time information worldwide, based on signals transmitted continuously from the array of Navstar satellites orbiting the Earth. LTN-2001 units are also slated for installation on the Russian IL-96M jetliner and have been chosen by Boeing for its new B-777 wide-body transports.

U.K. sources were not giving serious consideration to possible consequences of the reported recent Russia-Kuwait Memorandum of Agreement (see May 26, page 4, "Kuwait And Russia To Sign Major Arms Procurement Pact"). "Political posturing" was the view of one experienced player in the Gulf market, who sees it as generally similar to agreements that Kuwait has in place with a number of other countries.
Armour experts are skeptical that Kuwait would rush to purchase further vehicles from Russia, saying that a recent purchase of BMP-2 IFVs was far from successful. Moreover there are expectations that Kuwait is about to ink a long-promised contract with the U.K.’s GKN for the supply of about 190 Piranha vehicles -- which the U.K. company would produce under an agreement with Switzerland’s MOWAG -- and the first 250-vehicle tranche of an expected order for 400 of GKN’s Desert Warrior IFVs. However, the Piranha order seems likely to be for fewer vehicles than the market had expected. "About four-hundred" had been the general expectation. GKN which has never publicly put numbers against the Kuwaiti requirement, maintained in a May 28 interview that it expected the contract to be in line with its original expectations. -- John Reed, U.K. Editor

Last Wednesday, General Dynamics Land Systems at Sterling Heights, Michigan said the Kuwaiti government signed a letter of offer and acceptance with the U.S. government for 218 M1A2 Main Battle Tanks (MBT) thus enabling the U.S. Army to contract GDLS to enter production on the order. It was last October when Kuwait first announced its selection of the M1A2 Abrams over the British Challenger II. Deliveries are expected to begin within 18 months to two years and continue through 1996.

Although the U.K. government is still taking the line that outright sale of its four Upholder-class submarines is still under consideration, London sources now believe that there is a chance that they will be retained.
Canada has been mentioned as a possible customer for the four virtually new submarines which had become caught up in the U.K.’s plans to downsize its navy (see February 10, page 1, "Rumours Of U.K. Sub Sale"). Now, sources believe that the growing menace of Iranian Kilo-class SSKs in Gulf waters is forcing planners to re-examine their options. One may be that the navy could be prepared to sacrifice at least one of its older Swiftsure SSNs in order to retain the diesel-electric SSKs. Another may be their operation by a third party on a form ‘wet lease’ possibly crewed by seconded Royal Navy personnel. The issue is clearly sensitive, but observers recall that before the emergence of the more recent mining threat in the Gulf, Saudi Arabia had been seen as a likely purchaser of submarines with generally similar characteristics to the Upholders. -- John Reed, U.K. Editor

McDonnell Douglas said last week it will lay off 132 union machinists on its F-15 Eagle production line because of an 11-month gap in production for the U.S. and Saudi Arabian air forces. Layoffs took effect at the start of this week. About 3,500 people work on the F-15 line at the company’s plant north of Lambert-St. Louis International Airport. Ten workers who previously had been laid off from the C-17 transport programme will be rehired.

On Monday, UNOSOM II took command of Belet Uen, Somalia from the Canadian Airborne Regiment, on schedule. As part of the U.S.-led multinational task force, intervening in Somalia under U.N.-sanctioned Operation Restore Hope, the Canadian troops have done their job restoring order to the formerly lawless and beseiged region and have opened food and medicine supply lines to some 140,000 once-desperate Somalians. 
Following the Canadian achievement of restoring the basic infrastructure to the region, the area is now under the command of Italian General Bruno Loi who leads U.N. "peacekeeper" troops from Italy, Nigeria and Germany. 
U.N. officials attending the change of command ceremony commended the Canadian achievement. United Nations special envoy to Somalia, Jonathan Howe, praised Canadian troops saying they "...have proved their leadership and have set an example of how the U.N. can do a job."

The Canadian Commercial Corporation (CCC) recently awarded contracts to Computing Devices Canada Ltd. (CDC) of Bells Corners, Ontario and Walbar Canada Inc. of Mississauga, Ontario. CDC was awarded an $8.9 million (U.S.) contract to retrofit the U.S. Army’s M1A1 Abrams tank with substantial upgrades to its fire control system. Walbar’s contract, worth $1,106,069 (U.S.), calls for the supply of low pressure turbine nozzle segments for F404 engines to the U.S. Navy’s Aviation Supply Office located in Philadelphia, Pennsylvania.
CCC is a federal Crown corporation that contracts on behalf of Canadian suppliers with foreign governments and international agencies. At the present time, Canadian firms are fulfilling over 2,300 CCC-facilitated defence contracts and purchase orders worth approximately $3.8 billion.

Italy’s Agusta has selected Fleet Industries of Fort Erie, Ontario as the prime supplier of the rear fuselage for EH101 naval and civil helicopters worldwide. An initial order calls for 14 rear fuselage units valued at $6.4 million including non-recurring costs for production. This order is expected to create some 64 person-years of employment in Fort Erie and will be exported to the U.K. for installation on the Royal Navy’s EH101 fleet. As the selected prime source for this product, Fleet can anticipate a minimum order of 175 rear fuselage shipsets with a potential world market mandate of 533 shipsets (naval and civil) valued in excess of $94 million.

Etobicoke, Ontario-based AlliedSignal Aerospace Canada has been recognized as one of the 1993 recipients of the Ontario Chamber of Commerce and the Ontario Ministry of Economic Development and Trade’s "Commitment to Quality Certificate". The company was recognized for its achievements in improving the quality of its business functions, products/services and for its corporate responsiveness -- on the basis of issues of environmental/community responsibility, commitment to employment equity and sound employee relations. The certificate was officially presented during an all-inclusive employee luncheon and was accepted by members of AlliedSignal Aerospace Canada’s employee team.

June 11-20 -- The 40th Paris Air Show is to be held at Paris-Le Bourget, France. Material on display will include aircraft; space vehicles and launchers; propulsion units; airborne equipment and armament; airborne and ground installations; airport equipment; raw materials; electronics and parts; test, control and service equipment; and service activities. For details contact PROMOSALONS CANADA in Toronto at (416) 929-2562 or 1-800-565-5443.
August 4-8 -- Airshow Canada, North America’s aerospace tradeshow, will take place in Abbotsford, British Columbia. Sponsored by the governments of Canada and British Columbia, accredited by the U.S. Department of Commerce, and supported by the Canadian aerospace industry, Airshow Canada ’93 is expected to attract more than 500 exhibitors and 15,000 professional visitors from over 70 nations. Contact Airshow Canada at (604) 852-4600.
September 14-19 -- The Turkish Armed Forces Foundation is hosting "IDEF Turkey 1993", its first international defence industry and civil aviation fair, at the Turkish Air League Airport facilities in Ankara, Turkey. Government and army delegations from 108 nations are being invited. For detailed information, contact the TUYAP Fairs and Exhibitions Organization in Istanbul at (9-1) 2676704-05 2752350.
November 7-11 -- "DUBAI 93", an international aerospace exhibition, will be held at the Dubai International Airport in the United Arab Emirates. The exhibition is being presented in cooperation with the government of Dubai, Department of Civil Aviation and Dubai International Airport and in collaboration with the U.A.E. Armed Forces. Contact Fairs & Exhibitions in Dubai at 9714 822855/236155.
November 26 to December 1 -- The Aerospace Industries Association of Canada (AIAC) will hold its Annual General Meeting (AGM) at the Ottawa Westin Hotel/Ottawa Congress Centre. This is a change of date and venue from the earlier scheduled time in September, in Quebec City. A strike at the Quebec City Hilton caused the change in venue and timing. Members may contact Belva Neale (613-232-4297) if further details are required at this time.