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The Wednesday Report
Canada's Aerospace and Defence Weekly
Volume 3, Number 48 November 29,1989

Comment:
CANADA CAUGHT SLOUCHING

For a country which has depended on others to help fulfill its military requirements and commitments, these are tough times. The ongoing fragmentation of eastern Europe and the potential dismemberment of NATO will cause grave concerns for Canada's security interests.
We have relied too heavily upon our alliances. The major portion of Canada's meager land forces have been assigned to Europe and much of our defence thinking tends to be simplistically directed at a single potential enemy there, not necessarily a threat to ourselves, but, to our allies.
We have theorized that if we are seen to be committed to doing our share, our allies will rush to our aid when we are in difficulty; that all nations including our allies will respect us as a strong, sovereign country; and accept us as a trading partner.
Canadians have not been threatened. Traditionally, Canada has been isolated from the risk of land invasion by virtue of its three ocean boundaries and the longest undefended border in the world shared with our closest ally and the world's strongest military power, the United States. This reliance may be good in security terms, but has not been good for our sovereignty. The inhospitable waters of the Arctic Ocean to the north and the buffering effect of the Atlantic and Pacific oceans on the east and west of Canada have lulled Canadians into a detachment from concerns of national security and sovereignty, but, by no means are we insulated in a world where religious fundamentalism and economic deprivation are the motivators for irrational conflicts affecting ourselves and our trading partners; where the ability to be a strong ally predetermines respect and acknowledgement of nationhood and sovereignty; and where military strengths and alliances are precursors to economic trade.
Unless we abdicate completely to the U.S. we could soon be alone in maintaining our own security in the North Atlantic security environment. NATO is facing its toughest challenge to its very existence. While 'peace is breaking out everywhere' the world may be facing its most unstable period in all of history. As the Warsaw Pact disintegrates, its parts will form new alliances with new strengths, breeding new jealousies and rivalries. Economic and military ties will be realigned. Where Canada will fit in all of this is currently beyond conjecture.
Even the United States is having to rethink its defence posture. Faced with the decomposition of a long-established enemy alliance, the United States government is in a quandary over what to do with a $300 billion armed force which has been maintained in a containment role around the Warsaw Pact nations and China for decades.

Some 325,000 American troops are stationed in Europe, a sizable portion of the total 764,021 men and women of the Army; an Air Force of 567,474; a Navy of 591,541 persons; and 197,159 Marines. Manpower reductions incumbent with defence budget cuts are the significant first-step in the downsizing of the U.S. military. In Europe, the same process is already under way as Margaret Thatcher is encouraged along with other NATO leaders, by their own publics, to reduce defence spending and reduce their nations' level of armament.
But, as the Associate Minister of National Defence recently pointed out to a gathering of reservists in Ottawa, there is little evidence "that the prodigious rates of production of ships, submarines, aircraft, missiles, and tanks in the Soviet Union have moderated to any significant extent. We could well, in the future, be faced with streamlined, modernized Soviet forces backed by a sound, information-based economy. Whatever the outcome, we must accept the fact that the Soviet Union is and will remain a military superpower. It may now also become an economic one."
It is clear that Gorbachev has us on the run and perhaps nearing chaos.
Late last month the special Canadian Senate committee on national defence released a report entitled "Canada's Land Forces" in which it states that the Soviets are faced with all the problems posed by the nature of modern warfare as well as broad technological inferiority vis-a-vis the western powers. "However," the report says, "by concentrating resources on defence production, the Soviets have successfully reduced the extent of the technology gap. Indeed, in relation to Canada, the latest Soviet equipment is significantly better than current Canadian inventories." It adds that the U.S. still preserves technical superiority.
The true reality remains that Canada has not maintained its military strength sufficiently to be completely relevant to its own sovereignty. Whereas today, other nations' governments are considering force reduction in response to what is perceived to be a lessened threat, Canada is in the awkward position of not having anything to reduce. And as our allies are diminishing the size of their armies and their military equipment inventories, it becomes less practical for Canadians to expect them to do our share of security and peacekeeping tasks.
It also becomes less practical for us to conceive that these same nations will continue to respect Canada as a sovereign nation and a preferred trading partner on the basis of having once been a military ally.
None of these concerns were considered by the current government last April when it maintained its stance on the 1987 white paper and yet cut its defence budget over the long term to the barest level. Canada is sending the wrong signals to its NATO friends at a time when Canada needs NATO more than any nation. Our Prime Minister's recent plea to keep NATO alive regrettably has no credibility. Since the early 1970's when the Trudeau government cut our NATO commitment in half, Canada has not done its share while expecting others to pull our weight. But now a crunch has come, and Canada is caught slouching.


Mike O'Brien

NETHERLANDS RIVALRY -- ADATS STILL IN THE RUNNING

Thomson CSF's Crotale missile system has not been summarily selected by the Dutch government. Contrary to a recent Defence News report which states that "the Dutch government rejected the Oerlikon-Martin Marietta produced ADATS in favour of the French built Crotale", The Wednesday Report has learned that no such decision has been taken by the Netherlands' government and that the entire project is "on hold". The Royal Netherlands Air Force has been seeking a solution to its requirement for a missile component to contribute to the defence of Dutch air fields.
Considerable controversy surrounded a recommendation in favour of the Crotale NG (New Generation) system made to the last Dutch Parliament by the former state secretary for defence (Aan de staatssecretaris van Defensie) Mr. J. Van Houwelingen who himself had been the centre of some controversy which suggested a preset agenda in the selection process. Fortuitously, the attempts of Mr. Van Houwelingen and one Mr. Bolkestein (a cabinet minister) to ramrod the Crotale NG bid were blocked. The Dutch parliamentary committee on defence scornfully rejected his recommendation and demanded attention to the failure of the Royal Netherlands Air Force, the customer, to acquire and evaluate test results from the U.S. Forward Area Air Defence (FAAD) competition in which the Oerlikon Aerospace Inc. ADATS was selected in 1987 over the French contender.
The Dutch parliament was dissolved in July of this year preceding an election which took place in September. Mr. Van Houwelingen has not returned to his post and the government has yet to deal with the air defence acquisition project other than to put it on hold along with several other major capital acquisition projects. As a result of the concerns of the Dutch parliamentary defence committee and the disruptive effect of the September election, there has never been a cabinet selection and the project today is, according to Netherlands embassy officials, awaiting further evaluation.
Says Colonel Jan Zijlstra, the Dutch defence attache at the Royal Netherlands Embassy in Ottawa, "a new state secretary of defence has been appointed", and as one of the first activities in his new post, made an immediate request to the United States government for the most current test results available from the U.S. Army comprehensive ADATS evaluation. Colonel Zijlstra suggests that "it will be four or five months before the new government begins to deal with defence matters", leaving one to believe that the whole matter of a Dutch air defence missile selection is far from concluded. Nonetheless, it is equally accurate to say, as stated by an official of Thomson CSF to The Wednesday Report, "It may not be conclusive, but, Crotale is looking good in the Dutch competition."
The Wednesday Report has acquired a copy of a letter from the clerk of the Dutch parliament's defence committee, directed to the state secretary of defence on November 1. It instructs the state secretary to reevaluate the missile system competition, this time using ADATS evaluation data obtained from the United States Army. The new parliamentary committee completely rejects Van Houwelingen's premature recommendation of the Crotale NG system saying that, "(translation) We have not been sufficiently informed about the merits of both systems, in this case ADATS especially."
In the same letter, the committee's clerk, Mr. A. J. B. Hubert unequivocally states that, "(translation) The committee has concluded that the subject is to be designated 'controversial'." Not only did the evaluation team fail to acquire data from the U.S. Army, but, when offered to the Royal Netherlands Air Force by the defence attache at the American Embassy in the Netherlands, the FAADS test data was rejected as "irrelevant". Although the committee has made attempts to keep the controversy under wraps, an article appeared in the November 9 edition of the Dutch defence publication, Defensiekrant, which clearly spells out the nature of the potential scandal.
In the realm of potential disparagement, Canada's government too has had its share of notoriety of a less serious nature which has imposed a hindrance on ADATS in the Dutch deal. The Wednesday Report has learned that it is not beyond the scope of the Dutch competition for an antagonist to make gratuitous uncomplimentary statements to media persons and others about the recent PMO LLAD foot-shooting exercise of the Department of National Defence -- competitor's insinuation intended, of course, to disparage the ADATS Dutch bid of twelve to twenty, $35 million systems. Some have illegitimately implied that our fetish for the 'public-hanging' of nepotists and our preoccupation for fabricating bogus impeachment dramas should be misconstrued as a punitive measure resulting from exhaustive criminal investigation into the original LLAD evaluation process. As Canadians are intensely aware, nothing could be further from the truth. But not all nations are so adequately familiar, as are Canadians, with the occasional propensity of some of our bureaucrats and politicians to unwittingly blast holes in their own feet with sizable calibre firepower. According to Dutch official sources however, the dimensions of any negative impact have been minimized by the great distances between the two countries and because there is a new Dutch cabinet in place the topic is temporarily dormant.
Other sources indicate that it is likely that the United States Army will indeed be forthcoming with ADATS test data to the Royal Netherlands Air Force because of the Army's stated concerns about commonality and interoperability of NATO defence equipment and its own continued preference for the ADATS system over the French contender. About timing of a final Royal Netherlands Government decision on the air defence contract, Colonel Jan Zijlstra believes that the matter will not see an early resolution and the final deliberations could be put off until the spring of 1990. Oerlikon Aerospace Inc. officials were reluctant to comment on the Dutch situation other than to say that the matter is still open, they are very much in the running, and that in their view, "an announcement is not expected in the near term".

DUAL ADATS PROJECTS CREATE DEARTH OF SPARES

Meanwhile, in North American circles, and as if there are not enough rivals for the modernistic entree into the air defence missile business, an emerging round of competitive criticism has ignored the usual early spares problem calling the ADATS system 'unreliable' and encouraging reputable weekly defence journals to print such misconceptions. A recent rash of tests conducted on the ADATS system has left Oerlikon Aerospace Inc. and its numerous suppliers scrambling to keep a long list of system spares available to two major users and a number of potential customers. Tests have been ongoing at Fort Hunter-Liggett, California and Camp Grailing, Michigan (see The Wednesday Report, November 22, "ADATS Gets Top Marks in FAAD Foul Weather Tests"), while at the same time, evaluations of the system are being conducted in other parts of the world. Filling the needs of two committed customers, both with a high priority requirement, has proven to be tough. Says one Oerlikon official, "Yes. Keeping up with the requirement for spares is tough at first. We are meeting their needs. We may be working well into our sleeping hours, but, we are meeting our customers' needs."
After years of development and hundreds of millions of dollars invested, Oerlikon quite suddenly, in quick succession, sold its newly developed ADATS system to two North American buyers, Canada and the United States. Each customer has been anxious to take delivery of the product and either put it into service, or, as in the case of the U.S. Army, continue testing and refinements to suit its specifications. Although the U.S. project has yet to enter full-scale production, the Army's early requirements have resulted in a parallel delivery schedule to Canada's, one atop the other. The demand for spares has been unusually high at a time when the contractor, now in the early production phase, along with a myriad of suppliers, is facing all of the usual production start-up problems and the stresses of an ambitious and successful sales effort.
Mercifully, the two customers use many components common to both. The U.S. ADATS -- nicknamed 'Linebacker' -- is mounted on an M3A2 Bradley fighting vehicle chassis and, except for minor details, is identical to the Canadian Forces' missile component of the Low Level Air Defence (LLAD) system mounted on an M113A2 APC. ADATS forms the Line Of-Sight Forward-Heavy (LOS-FH) component of the U.S. Army's layered divisional Forward Area Air Defence (FAAD) structure.
"It doesn't matter if your mean time between failure is unbelievably good, if you don't have a spare available right then and there when a part does fail, you will be judged as unreliable", commented a Canadian Forces LLAD specialist. The "unfairness in this rumour," we were told, "is that these two North American companies (Oerlikon and Martin Marietta), have a tall order to fill and are doing a splendid job." Those companies which are spreading tales of unreliability because of a typical early spares problem know full well what the real situation is. They're sore losers.

NORTHERN TELECOM WITHDRAWS FROM TCCCS' IRIS COMPETITION

Northern Telecom, one of seven potential bidders to the $800 million Tactical Command Control and Communication System's (TCCCS) Integrated Radio and Intercommunication System (IRIS) has withdrawn from TCCCS leaving Canadian Marconi Company, its leading partner in the consortium, in the cold. Jack Coffell, a spokesperson for Marconi' defence electronics operations, was reluctant to comment other than to say that, "We have been talking to some other people." For certain, Marconi is not talking about current speculation that the firm may join a late-comer, General Dynamics in an IRIS bid.
Rumours about General Dynamics Electronics Division (GDE) possible participation in the IRIS competition are prolific. In one scenario, it has been suggested by a knowledgeable source to The Wednesday Report that British Columbia Telephone (BCTEL) may be willing to sell the name of the now defunct Microtel to Lavalin. Lavalin may then become the prime contractor on a TCCCS submission with an IRIS bidding team that includes Lavalin, Fenco, Marconi and General Dynamics among others to offer the Single Channel Group and Airborne Radio System (SINCGARS) manufactured by GD's Electronics Division and already sold as a second source in May of 1988 to the U.S. Army. The SINCGARS is rumoured to be a serious threat to all comers as the potential front runner in the IRIS competition.
The withdrawal of Northern Telecom has set the 'cat amongst the pigeons' with respect to the remaining six contenders, none of whom, with the exclusive exception of the Garrett Canada team, are particularly active in preparing a bid solution. Some speculation exists that there may be other contenders withdrawing or deciding upon a 'no-bid' response to the RFP at this very early stage. Meanwhile, Garrett Canada has been fortifying its position by adding significant new team members. Garrett Canada is expected to announce that it is being joined by Oerlikon Aerospace Inc. of Saint-Jean-sur-Richelieu, as well as another company said to be from western Canada. Additional newsworthy developments are expected from that group which appears to be the most active at present. The IRIS Request for Proposal (RFP) was issued by the TCCCS Project Management Office (PMO) on October 27. Bids are expected to be submitted within six months of that date and a contract should be awarded in June 1991.

PARLIAMENT SEEKS INPUT: WHAT TECHNOLOGIES SHOULD GOVT. FUND?

The Standing Committee on Industry, Science and Technology, Regional and Northern Development urges Canada's Aerospace and Defence Industries to participate in the strategy development process which has been initiated by The House of Commons. The committee invites organizations or individuals wishing to contribute to submit a brief in english, french or both official languages. Submissions should address one or more of the following topics: What technologies are essential to Canada's future and how should their development be promoted? What support should the federal government provide for basic and applied research? How can the education system for Science and Technology be strengthened? How can the commercialization of Canadian R & D be promoted? How can science and technology promote Regional Development? How can science and technology be used for environmentally sound industrial development?
Submissions must be received by January 26, 1990. The Committee may, at its discretion, invite some of the submitters to appear at public hearings. The Committee feels that any input will aid in the development of a valuable and useful national strategy. Address briefs to: The Clerk, Standing Committee on Industry, Science and Technology, Regional and Northern Development, Room 603, Wellington Building, Ottawa, ON, K1A 0A6, Tel: (613) 992-6312, Fax: (613) 996-1626

CANADA SIGNS MILITARY AGREEMENT WITH SOVIETS

An agreement was signed last week between Canada and the U.S.S.R which provides for the two country's first military exchange programme. Under the agreement, both signatories agree to host reciprocal defence related visits by delegations from each nation. The goal of the agreement is to reduce tensions by nurturing understanding between the two defence forces and by encouraging mutual understanding and peaceful competition.

HONORARY RESERVE COLONELS MEET IN OTTAWA

More than 200 of the total 250 honorary Reserve Colonels gathered for their biennial meeting held at Ottawa's National Conference Centre on November 17 and 18. The prestigious group of Colonels and Lieutenant-Colonels represent 158 Army Reserve units (Militia), Air Reserve units and Communication Reserve units. The list of honorary Colonels is comprised of highly regarded professionals, business people and government officials who represent various occupations across the country. Among them are: a judge of the Supreme Court of Canada, doctors, lawyers, provincial Lieutenant-Governors, publishers, and other persons influential in their own field and community.
General A. John G. D. de Chastelain, Chief of the Defence Staff addressed the gathering, outlining the Reserve Force Development Project; the reasons for its creation; and its overall importance. "In studying what resources we would require to meet our commitments it was concluded that the Canadian Forces would have to be able to field 180,000 personnel. But even with the most optimistic of budgets, we could never hope to retain a regular force of that size. Only one solution existed: to revitalize the reserves and make the necessary adjustments that could lead to an operationally effective total force. The identification of the requirement to revitalize the reserves gave rise to the Reserve Force Development Project."
The keynote address was delivered by the Honorable Mary Collins, Associate Minister of National Defence. Collins, who spoke as eloquently and knowledgeably as ever, opened her address by stressing the importance of the group's role. "Your role as guides, philosophers and friends becomes increasingly important as fewer and fewer active members of your regiments have followed the colours to war. Your task will be made easier, I think, by the initiatives that General de Chastelain spoke of earlier, (Total Force Structure) and that General Foster and his impressive supporting cast will brief you about over the next two days. These initiatives should do a lot to raise the spirit of the Militia and to provide them with a sense of continuing purpose."
The President of the Canadian Armed Forces Council of Honorary Colonels, Major-General John J. Dunn described the honorary colonels as "the guardians of regimental traditions -- their duties and functions are mostly representational and advisory in regimental matters and in the promotion of the identity and military values of the unit." He also added, "They do not intervene in the military operations of their units." The century old tradition of designating honorary colonels has grown to become standard practice for all reserve units and has continued to provide a strong source of support for the Canadian reserves.

RESERVE UNITS TO GET NEW COMPUTERIZED PAY SYSTEM

The real morale booster at the recent gathering of honorary Colonels came from Associate Defence Minister Mary Collins when she surprised the gathering with an announcement which dealt with a long term, fundamental problem plaguing reserve unit commanders for years. "I am pleased to announce today", she said, "that we have just received approval from the Treasury Board to acquire a $15.8 million automated pay system for our reserves both in Canada and Europe. At present, the processing system consists of a manual record method at the unit level. By providing microcomputers to the reserve units themselves, attendance records will be easy to update on a twice monthly basis. Through this automation, I hope we can combat some of the dissatisfaction and high attrition." Another item raised in her speech might be considered newsworthy to many unit commanders who have for years felt ignored in the pre-Total Force Structure days: Collins declared, "The important thing is, we're listening."

CANADIAN TOWED ARRAY SONAR SYSTEM NEARING CONTRACT AWARD

Computing Devices Company (CDC) of Kanata, Ontario is entering the final stage of negotiations for an $80 million contract to supply Maritime Command (MARCOM) with the Canadian Towed Array Sonar System (CANTASS) for the twelve Canadian Patrol Frigates (CPF), HMCS Nipigon and HMCS Annapolis. CANTASS began as a study initiated by Defence Research Establishment Atlantic (DREA) in 1976. DREA designed a system which was built to commercial specifications by Motorola Limited of Toronto, Ontario. It was further developed by CDC, reduced in size and rebuilt to military specifications. In 1984, an experimental development model of CANTASS was deployed on HMCS Fraser. In 1987, a preproduction prototype designated SQR-501 was deployed on HMCS Annapolis where it is still under test today. CDC first submitted its contract proposal in October.
The Canadian towed array will be used to detect and classify submarines at extremely long range. Deployed on the flanks, stern and far in advance of a convoy or task group, the system would establish an 'area of probability' for lurking enemy submarines. A shipborne ASW aircraft such as the Sea King or the EH101 helicopter would fly to the identified zone, and using dipping sonar, pinpoint, and in wartime, destroy or aid a warship in destroying the enemy submarine. As a passive sonar system, the SQR-501 is towed behind an ASW vessel on an armoured cable, listening for acoustic signals which can easily be identified by sonar operators based on a NATO data base 'library' of known vessels and their unique acoustic signature. CANTASS's secondary mission will be to gather acoustic data, for the NATO data base, on new vessels and their signatures and record changes to known vessels as they are periodically modified and repaired thus altering their acoustic signature. According to Sid Jorna, CDC's CANTASS Programme Manager, the system is "a step forward for NATO ASW activities". The SQR-501 will be able to gather data and track submarines at much greater ranges than older active (pinging) sonar systems. It will do its listening with hydrophones in an SQR-19 acoustic tail assembly supplied by Gould, a U.S. firm owned by Martin Marietta of Florida.
The heart of the system is the AN-UYS-501 high speed processor, an indigenous Canadian development. The processor is considered to be a significant breakthrough in signal processing rates, able to analyze data and simultaneously track multiple targets faster than any other processor in existence. The SQR-501 is not only acknowledged by U.S. naval personnel to be better than even the SQR-19's processing system, it is cheaper as well. As a result, CDC is looking at the export market for its system. CANTASS will be backed up by the SQS-510 active sonar which will be used for close support and ship defence.
In addition to its contract negotiations, CDC is examining possible subcontractors and is in consultation with Western Economic Diversification Canada and the Atlantic Canada Opportunities Agency to work out a regional development aspect of the contract. While manufacturing will take place at CDC's facility in Kanata, Ted Francis of CDC states that "we have a lot of subcontracting to do." The firm will soon invite potential suppliers to compete for an assortment of CANTASS-related subcontracts. CDC expects a DND contract award by March or April 1990 and first deployment of CANTASS by 1993.

BV-206 NTV PROJECT GETS PROD FROM ACTION-ORIENTED ALBERTA FIRM

Lack of activity on Mobile Command's Northern Terrain Vehicle (NTV) acquisition programme has prompted Hagglunds Foremost Inc. of Calgary, Alberta to issue a discussion paper in the hope of generating political support for the project. In July 1988, DND approved an acquisition of 820 Swedish BV-206 northern terrain vehicles to be used for territorial defence tasks. The same fiberglass hulled, rubber tracked over-snow vehicles was successfully used by the Canadian Air Sea Transportable (CAST) Brigade.
Hagglunds Foremost Inc. (HF) was formed in February 1989 as a joint venture between Hagglunds Vehicle AB of Sweden, manufacturer of the BV-206, and Canadian Foremost Ltd. of Calgary, Alberta to produce the vehicle in Canada. By early 1989, the firm had actually started converting Swedish technical drawings to Canadian standards and had sent out a number of information packages to potential subcontractors in expectation of a contract award by March 1990. Then came the April 1989 budget cuts. The NTV programme was reduced by half and delayed indefinitely. The company began to cut its staff. Since April the project has remained frozen. An increasingly uncertain HF is awaiting a contract to begin project definition and the NTV Project Management Office (PMO) is waiting for funding to proceed with a Canadianization study to determine which Canadian parts can be used with the BV-206. HF, on its own initiative, issued its paper.
According to Shari Pusch of Canadian Foremost Ltd., the discussion paper was prepared to update HF's internal management staff, its Board of Directors and any concerned subcontractors. The company also seeks political support. The document reminds its readers that the NTV meets Mobile Command's requirement for a vehicle which can traverse difficult terrain and that the BV-206's low ground pressure minimizes risk of damage to the fragile northern ecology. The paper stresses western industrial diversity for the benefit of any politicians who need to be reminded of this well known political and regional development imperative of the current government.
While the company is conducting its private sector briefings, the NTV PMO is in a continual briefing process of its own, keeping senior DND decision makers informed. An Interdepartmental Senior Review Board (ISRB) is scheduled for today, November 29, at which representatives from DND, DSS and regional development departments will be briefed on project status. There are bright spots to the otherwise irritating situation which are keeping HF guardedly optimistic. DND is experimenting with an air droppable BV prototype which shows promise. Discussions between Hagglunds AB and Canadian Foremost Ltd. may result in HF producing BV-206s in Calgary for the U.S. Army. At present the U.S. buys its BV-206s directly from Hagglunds AB in Sweden. Lastly, the HF paper argues that when an NTV contract is finally awarded, there will be a high degree of Canadian content involved. Svante Andersson, Hagglund's representative in Ottawa, states that as much as 60 percent of the NTV may be made up of Canadian parts.

WESTLAND HAVING DIFFICULTIES WITH U.K. ORDERS

There is fresh speculation about the future of U.K. helicopter builder Westland. It follows two recent press reports which suggested that the U.K. Ministry of Defence was not satisfied with progress on the naval EH101 Merlin and that its Chief of Defence Procurement Sir Peter Levene had assumed personal responsibility for overseeing the project. Officially, the Ministry line is that no order will be placed until a maximum contract price can be agreed. It had believed that the process would be complete by the year's end. However, European press reports indicate that there may also be misgivings over the development and integration of mission systems which will be the subject of a separate contract on which Westland is bidding against other leading contractors.
In the meantime there are suggestions that the initial U.K. order will be for only fifty aircraft instead of the seventy-four hitherto expected. Westland denies that the programme is in difficulties. It claims to have pulled back a year of the initial two-years delay and that the programme is still being managed in precisely the same way as before. However, it has been lobbying hard and Westminster undercurrents indicate that there are now widespread doubts that the company will get the order it expected from the Royal Air Force for a further twenty-five EH101s for the battlefield mobility role. Some sources believe that the RAF would prefer additional Chinooks for this task. For its part, Westland seems to accept that the extra aircraft are in jeopardy and having recently demonstrated its version of the Black Hawk with weapons integrated, may be hoping for a decision to configure the Army's 24 Brigade for an air assault role which might make the Black Hawk a more obvious choice.
Meanwhile Westland is feeling the effects of delays on orders for Black Hawks for Saudi Arabia. The high profile Al-Yammamah contract on which British Aerospace leads on behalf of the U.K. government is reported to be in deep trouble following a slump in oil prices. The U.K. government is now trying to assemble a financing package to compensate for the deficit likely to arise on the 400,000 barrels per day oil offset. Sources suggest that the Saudis would need to increase the offset commitment by around 25 percent to keep the 15 billion (sterling) package on course. Westland is expected to provide 68 Black Hawks as part of the deal, and without the financing it is likely that loans from U.K. banks backed by appropriate government guarantees can restore the balance. There is a danger that loans to the companies - and in particular to either Westland or British Aerospace - could, irrespective of the reasons, be hard to handle politically. Westland is also reported to be anxious to close on deals for Black Hawks for Kuwait and the United Arab Emirates.

UPDATE: UNITED KINGDOM TANK PROJECT

The U.K. Main Battle Tank (MBT) competition rumbles on. Vickers maintains that it is on course to demonstrate its Challenger 2 as required at the end of next year, but, next week will see a series of presentations to potential subcontractors in which General Dynamics will outline the type of offset deal that it hopes to offer for its M1 Abrams. General Dynamics has managed to keep a high profile in the competition in spite of an obvious preference for the home-grown Challenger 2.

OLIVIER LEGALL JOINS CANADIAN SUBSIDIARY ACI

Assistant Chief of Programming for ERYX at Aerospatiale's Tactical Missiles Division, Mr. Olivier Legall, will join the company's Canadian subsidiary (ACI). Aerospatiale hopes that this decision will emphasize the importance it attaches to the ERYX programme and the cooperation it enjoys with Canadian industry. Mr. Legall, who has been closely associated with the programme right from its birth to its development in Canada, will join the newly opened company in late December of this year. He will be in charge of the ERYX industrial cooperation between France and Canada and ensure readiness for the industrialization agreements while awaiting a favourable announcement from the Canadian authorities. The Canadian Government has not yet made a decision regarding the ERYX programme, the only one in the defence field at present between France and Canada.

U.S. AIR FORCE SR-71 BLACKBIRD RETIRES

Last Wednesday, the original U.S. stealth spy plane, the Lockheed-built, SR-71 Blackbird officially ended its 24 years of operational duty as a result of a $200 million (U.S.) deletion from the Bush Administration's defence budget. Out of some 30 aircraft built there are only ten remaining in service with the 9th Strategic Reconnaissance Wing at Beale AFB, California, most of which will be donated or sold to museums. The aircraft have been based at Beale with several detached to airfields in Mildenhall, England and Kadena Air Base in Okinawa, Japan. The SR-71 is still the holder of numerous aviation records and although the complete performance specifications are classified by the U.S. Air Force, it is said to have a ceiling of greater than 85,000 feet and flies at speeds in excess of Mach 3. The aircraft served as a high-altitude reconnaissance aircraft capable of reading a newspaper headline from a 15 mile altitude. Satellites and the older and slower U-2 will now fulfill the reconnaissance tasks of the Blackbird.

MENASCO GETS BOEING'S "SUPPLIER OF THE YEAR AWARD"

Boeing Commercial Airplanes presented Menasco Aerospace Ltd., of Oakville, Ontario with one of seven "Supplier of the Year" awards in Seattle last Wednesday. Menasco Aerospace was one of more than 3,500 companies around the world vying for the title. A division of Colt Industries of New York, Menasco Aerospace manufactures the main landing gear for the Boeing 737 and main landing gear components for the Boeing 757. Consistent quality in manufacturing close-tolerance components for Boeing has resulted in the company receiving the award in each of the past two consecutive years. The other winners were in the U.S. and one in Japan. The President of Menasco Aerospace Ltd., Mr. John Cybulski proudly stated, "Menasco is one of the two largest suppliers to Boeing in Canada and we feel the award proves that the Canadian aerospace industry can compete with the rest of the world." He told The Wednesday Report that Menasco will share a substantial portion of the $500 million worth of goods and services that U.S.-based Boeing divisions will purchase from Canadian firms in 1989.

$31 MILLION PLANT EXPANSION FOR BOEING WINNIPEG

A $1.5 million, computer-controlled, composite materials cutting and trim system is the heart of a $31 million plant expansion opening next July at Boeing Canada Technology Ltd., Winnipeg Division. Gordon Sampson, Boeing Canada President and General Manager of the Winnipeg operation plans to maintain the division reputation as the foremost composite facility in Canada. The new composite cutting machine will be integrated with the firm's existing CAD/CAM system. Its unique features include an ultrasonic, 20,000 cycle per second cutting head; a large 6 feet by 48 feet work surface; and the capacity to cut multi-layered composite materials. Coupled with a new, three axis, trim machine for drilling and cutting patterns, as well as other new equipment, the expansion will allow the division to respond to the growing demand for Boeing's jet transports. Much of the work done by the Winnipeg operation consists of manufacturing aircraft parts for parent company, Boeing Commercial Airplanes of Seattle, Washington.

CANADIAN MARCONI COMPANY AWARDED FOR EXCELLENCE

Hollandse Signaalapparaten B.V. of the Netherlands has presented Canadian Marconi Company (CMC) with an award of excellence for its superior quality and on-time delivery of five pairs of Signaal Tracking and Illuminating Radar (STIR) systems for the Canadian Patrol Frigate. CMC assembled, integrated and tested the Signaal fire control radar systems. The company recently received additional orders worth $5.1 million to coproduce six pairs of STIR systems for the second batch of frigates.

JOHN SIMONS NEW CMC PRESIDENT

Replacing recently retired Philip Wheatley as President and Chief Executive Officer is John H. Simons, Canadian Marconi's former Executive Vice President. Prior to 1988, Simons was the Vice President of CMC's Electronics Group. He graduated from McGill University in 1963 with a Master of Engineering degree and in 1977 with a Master of Business Administration. Simons is a former chairman of the Aerospace Industries Association of Canada. The appointment was announced by James Grandy, Chairman of the Board of Canadian Marconi company.

FUTURE BRIGHT FOR SMALL MACHINING FIRM WITH DIST DIPP AWARD

Dellcom Industries Inc. of Woodbridge, Ontario has been awarded a $162,970 Defence Industry Productivity Programme (DIPP) contract for the expansion and modernization of its precision components manufacturing operations. Industry Science and Technology (DIST) Minister Harvie Andre, who awarded the contract, is enthusiastic about the company's prospects and sees "further growth and an expanded client base" on the company's horizon. Dellcom has a solid reputation with customers such as Boeing Canada de Havilland Division, Atlantis Aerospace Corporation and Garrett Canada for its precision machining of parts for aircraft and defence products. The DIPP contract allows the firm to acquire two new numerically controlled precision milling machines.
"A new HRCO B20 has already been installed in the plant," says Mr. Silvano Dell'Agnesc, the company's president. "We bought this machine because of its excellent controls." A second milling machine with a higher production capacity is being assembled and calibrated this week. Dell'Agnesc eagerly states that the second unit will increase the output of his operation through lower "down-times for tool changes and a faster machining rate".
Dell'Agnesc is keen on making productivity improvements to his firm's operations and has a comprehensive modernization programme envisioned for the future. He is eager to have a complete computer aided design and manufacturing (CAD-CAM) capability fully integrated into his shop to increase efficiencies and better serve his customers. "The first new machine gives us some modest CAD-CAM ability," he told The Wednesday Report, "and fits well into our plans for future growth." Dell'Agnesc's immediate ambition is to visit Boeing in Seattle, early in 1990, to seek new machining business for his shop from that end of Boeing's operations. Dellcom does a substantial amount of work for Boeing Canada de Havilland Division and hopes to trade on the excellent reputation which the firm's craftsmen have earned. The company is located at 105 Haist Ave., Unit 1, Woodbridge, Ontario, L4L 5B6, telephone: (416) 851-6371.

DIPP CONTRACT AWARDS

Northern Airborne Technology of Kelowna, British Columbia has been awarded a $202,825 Defence Industrial Productivity Programme (DIPP) contract to modify its aircraft communication products to meet United States Federal Aviation Authority (FAA) specifications and to expand and improve its product testing capabilities. The firm anticipates an increase of some $3.9 million in sales over the next five years as a result of the contract.
Linamar Machine Ltd. of Guelph, Ontario will get $723,110 under DIPP to purchase jigs, dies, fixtures and special purpose equipment to develop a cost-effective broaching process for machining precision components for the aircraft industry. According to the Minister of State for Science and Technology, Bill Winegard, the DIPP contract will generate incremental sales of $21.4 million for the company over the next six years.
Eagletronic Industries Inc. of Downsview, Ontario has been awarded a DIPP contract valued at $320,000 for the purchase of manufacturing equipment for precision components used in the aerospace and defence industries. The company anticipates a $5 million increase in sales and positions for 6 new employees over the next three years as a result of the new capabilities the DIPP contract provides.

RECENT U.S. DEFENCE CONTRACTS TO ALBERTA, ONTARIO AND QUEBEC

Intera Technologies Ltd. of Calgary, Alberta, a firm specializing in integrated information and technical services for resource development, transportation and the environment, has been awarded a contract valued at $8 million (U.S.). Under this contract Intera will perform the services necessary to provide specialized imagery data collection and processing for the United States Defense Mapping Agency Systems Center.
Walbar Canada Inc. of Mississauga, Ontario has received a contract worth $1.2 million (U.S.) to supply the U.S. Navy with 1,322 nozzle segments for the maintenance of aircraft jet engines. The contract's 100 percent option to purchase additional nozzle segments has been exercised, bringing its total value to $2.4 million (U.S.).
Arva Crane Limited of London, Ontario has been awarded a contract for the manufacture and supply of 7.5-ton hydraulic cranes required by the U.S. Defense Construction Supply Center. This $1.6 million (U.S.) contract is potentially valued at $4.9 million (U.S.) as it contains a 200 percent option clause.
Aldrovandi Equipment Limited of Woodbridge, Ontario has received a $1.1 million (U.S.) contract for the manufacture and supply of adverse terrain, 13,000 pound forklift trucks to the U.S. Air Force. Contract options, if exercised, would be worth an additional $500,000 (U.S.).
Omatech Service Ltd. of Mississauga, Ontario, one of only a few North American lathe manufacturers, has been awarded a contract valued at $904,366 (U.S.). The contract calls for the manufacture and supply of specially designed, sliding gap bed lathes for the U.S. Air Force.
LNS Systems Inc. of Pointe-Claire, Quebec has received a contract valued at $123,862 (U.S.) to design a portable air traffic control tower for the U.S. Navy. If the design is approved by the Navy, it will then exercise an option in the current design contract to proceed with production of the unit and take delivery at Williams Field, McMurdo, Antarctica. The option to build the unit is worth $414,250 (U.S.).

CALENDAR

Today, November 29 -- The Canadian Maritime Industries Association (CMIA) will host a "Procurement Outlook Conference" at the Ottawa Delta Hotel to focus on procurement for marine construction, repair and refit. With this conference, the CMIA is attempting to replace a canceled series of Department of Supply and Services conferences designed to provide advanced notice of the government procurement needs.
Tomorrow, November 30 - December 1 Technology Training Corp. will sponsor a conference on "Worldwide Developments in Armour/Anti-Armour" at the Skyline Hotel in Ottawa. The two-day assemblage will address such issues as: meeting the reactive armour challenge; analyzing the changing Soviet Forces; evaluating antitank weaponry; tank technology trends; IFVs/APCs; and Armour/Anti-Armour outside NATO.
January 25, 1990 - The Conference of Defence Associations (CDA) will host its sixth annual seminar at the Chateau Laurier Hotel in Ottawa. This years' event will focus on "The Future of Canada's Air Force". The one-day seminar will provide an in-depth profile of Air Command, its capabilities, commitments and future. Scheduled speakers include: General John de Chastelain, Chief of the Defence Staff; Lieutenant General F. R. Sutherland, Commander, Air Command; and General G. L. Piotrowski, Commander in Chief, NORAD. The seminar fee is $150.00. For further information, contact Lieutenant Mark Paine, 1990 Seminar, CDA Institute, 501-100 Gloucester St., Ottawa, Ontario, K2P 0A4, (613) 563-1387.
February 26-27, 1990 -- The 42nd Annual Technical Conference of the Canadian Maritime Industries Association (CMIA) will be held at the Queen Elizabeth Hotel in Montreal, and will include the fifth Canadian Shipbuilding and Offshore Exhibition (CSOE). The latter will give exhibitors an opportunity to display or explain their goods and services at the largest technical marine conference in Canada. For additional information, contact: Joy MacPherson, CMIA Director of Finance and Administration, (613) 232-7127.
March 7-8, 1990 -- The Defence Programmes and Advanced Technology Bureau of the Department of External Affairs will coordinate and sponsor "Subcontractors 3" at the Toronto Constellation Hotel. The show is expected to attract at least one European trade mission and dozens of major U.S. and Canadian prime contractors. Visitors will attend on a by-invitation-only basis. The event will feature Canadian subcontractors each in their own individual booths. Companies wishing to obtain further information, or to register for the event, should contact Mr. Lewis Ford, Deputy Director Defence Programmes Division TDP, Department of External Affairs, 125 Sussex Drive, Ottawa, K1A 0G2. Telephone: (613) 996-1836, Fax: (613) 996-9265.

WARNING: Copyright:MPRM Group Limited 1989. All rights reserved. 
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Publisher and Editor In Chief: Micheal J. O'Brien
Editorial Staff Writer:
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Contributing Editors:
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Mike Martin (Ottawa)
Patrick McManus (Halifax)
William Kane (Washington DC)
John Reed (London, England)
Moshe Karem (Jerusalem, Israel)
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