Archive for the ‘Europe’ Category

Quietly, the Eurofighter project seems to be running into trouble. First of all, Dassault got the Indian contract and the Indians claim that Rafale is dramatically cheaper. Further, they weren’t impressed by the amount of stuff that is planned to come in future upgrades, whose delivery is still not certain. These upgrades are becoming a problem, as the UK, Germany, and Italy aren’t in agreement about their schedule or about which ones they want. Also, a Swiss evaluation report was leaked that is extremely damning towards the Gripen and somewhat less so to Eurofighter.

This is going to have big consequences for European military-industrial politics. So is the latest wobble on F-35.

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This LA Times story about the Boeing 787 Dreamliner (so called because it’s still a dream – let’s get the last drop from that joke before it goes into service) and the role of outsourcing is fascinating. It is partly built on a paper by a senior Boeing engineer which makes among other things, this point:

Among the least profitable jobs in aircraft manufacturing, he pointed out, is final assembly — the job Boeing proposed to retain. But its subcontractors would benefit from free technical assistance from Boeing if they ran into problems, and would hang on to the highly profitable business of producing spare parts over the decades-long life of the aircraft. Their work would be almost risk-free, Hart-Smith observed, because if they ran into really insuperable problems they would simply be bought out by Boeing.

Even in its own financial terms, the whole thing didn’t make sense, because the job of welding together the subassemblies and hooking up the wires doesn’t account for much of the profit involved. Further, the supposedly high-margin intellectual-property element of the business – the research, development, and design of the plane – is only a profit centre after it’s been built. Until they’re done, it requires enormous amounts of investment to get right. The outsourcers were expecting the lowest-margin element of the company, assembly, to carry the costs of developing new products. Whether they were funded with equity or with debt, this implies that the systems integrator model, for aircraft at least, fundamentally restricts innovation.

This is one of the points I’d like to bring out here. Hart-Smith’s paper – you can read it here – is much stronger on this than the LA Times was willing to be. It’s a fascinating document in other ways, too. For a start, the depth of outsourcing Boeing tried to achieve with the 787 is incompatible with many of the best practices used in other industries. Because the technical interfaces invariably become organisational and economic ones, it’s hard to guarantee that modules from company X will fit with the ones from Y, and if they don’t, the adjustment mechanism is a lawsuit at the financial level, but at the technical level, it’s rework. The dodgy superblock has to be re-worked to get it right, and this tends to land up with the manufacturer. Not only does this defeat the point of outsourcing in the first place, it obviates the huge importance of avoiding expensive rework.

Further, when anything goes wrong, the cost migrates remorselessly to the centre. The whole idea of systems integration and outsourcing is that the original manufacturer is just a collection of contracts, the only location where all the contracts overlap. Theoretically, as near to everything as possible has been defined contractually and outsourced, except for a final slice of the job that belongs to the original manufacturer. This represents, by definition, all the stuff that couldn’t be identified clearly enough to write a contract for it, or that was thought too risky/too profitable (depends on which end you look at it) for anyone to take the contract on. If this was finance, rather than industry, it would be the equity tranche. One of the main reasons why you can’t contract for something, of course, is that you don’t know it’s going to happen. So the integrator essentially ends up holding all the uncertainty, in so far as they can’t push it off onto the customer or the taxpayer.

This also reminded me a little of Red Plenty – one of the problems is precisely that it’s impossible to ensure that all the participants’ constraints are mutually compatible. There are serious Pareto issues. There may be something like an economic law that implies that, given that there are some irreducible uncertainties in each contractual relationship, which can be likened to unallocated costs, they flow downhill towards the party with the least clearly defined role. You could call it Harrowell’s U-Bend. (Of course, in the macroeconomy, the party with the least well defined role is government – who you gonna call?)

Anyway, Hart-Smith’s piece deserves a place in the canon of what could be termed Sarcastic Economics.

I suspect that the problems he identifies have wider consequences in the economy. Given that it’s always easier to produce more or less of a given good than it is to produce something different, the degree to which it’s possible to reallocate capital has a big impact on how quickly it’s possible to recover from a negative shock, and how bad the transition process is. I would go so far as to argue that it’s most difficult to react to an economic shock by changing products, it’s next most difficult to react by producing more (you could be at a local maximum and need to invest more capital, for example), and it’s easiest to react by producing less, and that therefore there’s a structural bias towards deflationary adjustment.

Hart-Smith’s critique holds that the whole project of retaining product development, R&D, and commercial functions like sales in the company core, and contracting everything else out actually weakens precisely those functions. Rather than being able to develop new products quickly by calling on outside resources, the outside resources suck up the available capital needed to develop new products. And the U-bend effect drags the costs of inevitable friction towards them. Does this actually reduce the economy’s ability to reallocate capital at the macrolevel? Does it strengthen the deflationary forces in capitalism?

Interestingly, there’s also a presentation from Airbus knocking about which gives their views on the Dreamliner fiasco. Tellingly, they seem to think that it was Boeing’s wish to deskill its workforce as far as possible that underlies a lot of it. Which is ironic, coming from an enormous aerospace company. There’s also a fascinating diagram showing that no major assembly in the 787 touches one made by the same company or even the same Boeing division – exactly what current theories of the firm would predict, but then, if it worked we wouldn’t be reading this.

Assembly work was found to be completed incorrectly only after assemblies reached the FAL. Root causes are: Oversight not adequate for the high level of outsourcing in assembly and integration, Qualification of low-wage, trained-on-the-job workers that had no previous aerospace experience

I wonder what the accident rate was like. A question to the reader: 1) How would you apply this framework to the cost overruns on UK defence projects? 2) Does any of this remind you of rail privatisation?

a question

Back in September, 2006, we were talking illegal immigrants and artisanal shipbuilding in West Africa, over at the Fistful.

one of the curious economic details you could notice was how the process was in fact exhibiting an increasing returns type feature, in that the increased demand for boats increasingly meant that a number of would-be migrants were actually not sailing but staying since they could make a reasonable living in the newly developing artisanal shipyard industry, with the consequence that more boats were being built as knowledge and experience (human capital) was being accumulated…

One other interesting detail is that the level of workmanship seemed good. They even use, as I say, 1980s style Volvo teams rather than Adam Smith like pin production lines.

As it happened, the crisis passed, and the big attractor – the Spanish housing bubble – collapsed not long afterwards. So, I was wondering what had become of that sudden industry churning out huge versions of traditional boat designs. After all, there is more than one use for a boat in the black economy.

And you know what? I’ve no idea. As far as I can make out, that particular route lost salience during 2007, almost certainly because of the macroeconomic crisis rather than the arrival of EU FRONTEX assistance. With that, it’s passed completely out of the news environment. I couldn’t find anything useful in the way of statistics either; Eurostat is just what you’d expect from someone’s dentist,

So, are there thousands of wooden vessels abandoned on the beaches? Does anyone know? (I’d like this post to grow if possible.)

…from the sea

What’s wrong with PROFIT?! Death to all Marxists! Hey, I usually try to remain calm, but this is getting unnerving. Everyone with any sense knew there would be an epic wingnut freakout after the US elections – the structural forces made it inevitable, after all the time spent denying plate tectonics – but who imagined that the tactical triggering event would be the healthcare bill? I was thinking in terms of carbon tax, or something that could be presented as a racist issue – immigration, perhaps.

But there you have it; you really can turn these people on and off like a tap and turn them on anything, like a hose. If there’s one remark I never want to hear again after the last few years, it’s the one about “if you don’t believe in God, you’ll believe in anything”.

Meanwhile, things like this happen:

“We are working taxpaying jobs, paying taxes, and we can’t get insurance because we make $6.55 an hour,” said Laura Head, 32, of Rogersville, Tenn., the first person in line Friday for the first day of the Remote Area Medical clinic, an annual three-day event offering free medical care. “This is really a great beneficial thing, but it doesn’t have to be this way; we could all have insurance.”

A single mother of three who mows yards and moves trailers for a living, Head said she arrived at the fairgrounds Tuesday, to camp out at the fairgrounds until the health fair began Friday morning. Her motivation was simple: severe, constant pain.

Close to two years ago, her boyfriend smashed her teeth, she said – but, without the $6,000 needed to have the teeth pulled she has endured infection after infection, making literally 100 visits to the emergency room for antibiotics and pain medication.

Back in February, 2008, I blogged about the French Navy dropping off a load of school books for New Orleans during a port call. I’m beginning to think that someone should write the story about one of their new Mistral-lclass Batiments de Projection et Commandement doing a free clinic on the tank deck, like the US Marines do from their LHAs in West Africa, as part of a semi-acknowledged drive for political influence in a zone of potential pre-insurgency and instability.

Or would the redcoats be more shocking? Albion would be the obvious ship, just for the name.

OK, so I got no takers for this prediction.

My money’s on the Latvian or the Hungarian to out himself as a buffoon or neo-nazi.

Not surprising, really. But what I didn’t expect was that even though the Latvian turned out to be the neo-nazi, the buffoon would turn out to be Timothy Kirkhope MEP, the Tory leader in the European Parliament, who I had always assumed to be an uninspiring but roughly acceptable placeman. But it looks like the Borat Party’s Borat is actually its leader. However:

He and the Latvian LNNK denied that it was in any way sympathetic to Nazism. “There was a commemoration of those who had served in the Waffen divisions of the Wehrmacht in the Second World War. The Labour Party has been churning this thing out over and over again,” Mr Kirkhope said.

“The truth of the matter is that attendance of the commemoration service for those who have died in wars is not just by members of LNNK — it is by others attached to the EPP because the Baltic states were taken over and oppressed by the Russians and the situation was that the Germans conscripted a number of people to join the Waffen.”

“The Waffen divisions of the Wehrmacht”? What the fuck is that even supposed to mean? For a start, “Waffen” means “weapon or “armed”. Did the German army of the Second World War have any unarmed ones? Of course, it’s completely nonsensical as a unit designation. Kirkhope was presumably trying to skate around the phrase “Waffen-SS”, which refers to the SS’s field units as opposed to its “general purpose” administrative staff.

But even if we straighten out his mangled words, his argument is still ignorant and morally awful, as it rests on the long-discredited idea that all the atrocities of the Eastern Front were the work of the SS, and the regular German army obeyed the laws of war. Further, even if that wasn’t wrong, he would still be hopelessly ahistorical, because the various locally recruited units the Germans set up starting in 1942 were administratively attached to the Waffen SS, not the Army. The Army did recruit a lot of foreigners as individual replacements, but it didn’t create a foreign legion; the SS did.

And worst of all, the earliest Latvian SS were recruited from a vicious militia which emerged as the Russians pulled out in the early summer of 1941 and immediately started murdering the local Jewish population without even waiting for the Germans to show up. The degree of horror they achieved regularly sickened hardened soldiers and deeply impressed the SS Einsatzkommandos that followed the army; they lost no time in signing them up and using them all over Central and Eastern Europe to do the dirty work, including acting as the guard force at the extermination camps.

As if you needed any confirmation of this, the Times report has a useful photo of a Latvian remembrance day parade, complete with red-and-white flag, swastika, and Adolf Hitler’s likeness. A note for the guidance of readers, and Timothy Kirkhope MEP: if you need to know if your allies might be fascists, check if they like to wave flags with Hitler’s face on them. This is not an exclusive test, but the false-positive rate is essentially zero.

(Oh, and if anyone’s still interested in the bet, I’m taking the Belgian guy or at least his party to place.)

Andrew Brons apparently likes the voluntary repatriation grant clause in the 1971 Immigration Act, a sop thrown in for Enoch. Well. A feature of this legislation, if I remember correctly, was that accepting it was without prejudice to one’s immigration status. You could go back. So the only people who accepted it took holidays back home, and then returned. Aux frais de la princesse. Sometimes it’s good to know an immigration officer.

Meanwhile, the usual failure mode for a BNP elected official involves a cocktail of incompetence, absenteeism, and financial irregularity. It’s as if you managed to get a job for that bloke your mate was going on about. So, the main question I have is: what will they do with the substantial budget available to an MEP?

It is come to this. Here is our Secretary of State for Culture:

The culture secretary, Andy Burnham, says in an interview today that the government is considering the need for “child safe” websites – registered with cinema-style age warnings – to curb access to offensive or damaging online material.

He plans to approach US president-elect Barack Obama’s incoming administration with proposals for tight international rules on English language websites, which may include forcing internet service providers, such as BT, Tiscali, Sky and AOL, to ­provide packages restricting access to websites without an age rating.

Oh shitty fuck. I thought it was bad enough when a colleague of mine mentioned that Burnham wanted to make YouTube put warnings next to everything it carried that included rude words. But no, it’s worse. This is dire in so many ways; for a start, this is our Secretary of Culture yelling for censorship. Not the Home Secretary, or the Minister for Promoting Virtue and Punishing Vice, or the Lord Chamberlain.

Shouldn’t he be the voice for culture in the Cabinet, like the Chancellor is for finance, or the secretary of defence is for the military? The Home Office will always demand more surveillance and more control, but shouldn’t the Department of Culture demand culture?

Further, there’s the crappy idea of special “packages” of the Internet with bits missing. There is a clear reason why this is crappy: if it is so desirable, why isn’t anyone selling it? Isn’t there a gap in the market? Of course, one of the problems is that it would be expensive – who will go through all the websites censoring them? But then, they say you can’t buck the market, and if you can’t do that to build a national fibre network or keep Amersham’s DNA sequencer business in the UK, you can’t do that for censorship.

It’s also crappy because it does nothing about peer-to-peer networks, instant messaging, VoIP, USENET, e-mail (remember that?), but it’s worse than that – it’s based on a set of fundamentally stupid and discriminatory assumptions.

First of all, there’s the idea that sin can leap out and grab you, to quote Holden Caulfield. Paedophiles can make vapours rise up from the keyboard. But secondly, there’s the idea that this only applies to some very specific and rather puny kinds of sin. There is surely plenty of stuff in an average edition of several national newspapers that, if we looked at it clearly, we would all agree is highly unsuitable for children; and it has little or nothing to do with the usual tropes of rude words and naked flesh.

Third, there’s a weird discrimination of means. Not only is a punch in the mouth worse on this scale of values (violence!) than the delivery of a 1,000 pound bomb (this is called “action”), pretty much anything is OK if it is delivered in print or in the theatre. Nobody seems to want to censor the printing press or reintroduce theatrical censorship. The explanation is in part that the National Theatre’s seating capacity is less than the peak daily traffic of this weblog and heavily London-focused. But that’s not enough.

If the buggers are reading books, this is in a sense enough – they look more middle-class, dammit, and who cares about the content. And if you’ve got them into a theatre for something of their choice, it’s unlikely they are the ones you’re worrying about.

But I am even more furious about the reference to the “English-language Internet”. For a start, this betrays deep ignorance. There is no such thing; the Internet has no notion of English language, and it’s damn right. It’s because of this that it can work in every language. And Burnham seems to think he owns the English language, that he can impose his will on anyone who chooses to write in it. What if an Indian does so, on a website hosted in Holland, operated by a Chinese company? Who is this Burnham?

It’s worse than that, though; he is trying to push his quack nonsense on the Americans, which means he doesn’t think he can get it through Parliament and he also doesn’t think he can get it through the European Parliament, so he wants a nice little unpublished understanding with the Americans that the prime minister can sign and instantly ratify under the prerogative power, and then place in the Commons library, or perhaps not. Rather like the whole wealth of other understandings that have to do with electronic surveillance of one form or another.

The good news, however, is that his proposals might contravene the US constitution (we can’t expect too much from our own). If they can have secret transatlantic understandings, then I intend to have one of my own.

Meanwhile, Brazil’s top five cities get fibre to the home.

Meanwhile, this is good news. As more and more ships from various parts of the world – like China and Iran – arrive in pirate country, somebody’s made vaguely sensible arrangements to put them on trial in Kenya, which is what has been done with the ones captured by Northumberland. This is a much better idea than returning them to the tender mercies of Somali rivals, or alternatively to their home base, or any evil nonsense promoted by tiresome Internet hard men. (You know who you are.)

I’m not sure whether to be pleased, or worried that China and Iran are apparently cooperating in an exercise designed to be more law-abiding than some British courts, and far more so than whole swaths of the US defence establishment. This is incredibly important; I keep saying that a primary reason for the success of some Islamist movements is that they offer some form of legal order, rather than Franz Neumann’s Behemoth.

After all, dogs have an innate appreciation of justice, so we should surely accept that it matters for human beings too. As a modest proposal, now the EU has taken over the lead in combating piracy in the Gulf of Aden, could we perhaps give the naval task force a further mission – to compel EU-flag fishing vessels to respect the Somali EEZ? (We wouldn’t have legal authority to stop anyone else without a UN resolution, but it’s a start.) I agree they have plenty on their plate, which is why I’m going to make a second modest proposal.

Rather than frigates, EU states participating in this could instead deploy some of their sizeable fleet of amphibious assault ships, with a deckload of helicopters, a dock of small craft, and a tankdeck containing a mix of marines for boarding parties, and medics, engineers etc to support the UN’s aid activities.

So, if World President Brown was to ask me what to do about the headless Viktor Bout empire, and the operators like it, what would I say?

Here’s what I’d do: Let’s draw up a big list of dodgy airlines. Better, let’s use rules; ex-Soviet aircraft, or old 737s, based in the UAE, registration in certain West African, Balkan, or Central Asian states, routes mostly to Middle Eastern and African destinations, and (especially) aircraft bought from or sold to other airlines in the list. We could implement it in software quite easily, at least to provide a filtered list for humans to review.

And then, whenever they land anywhere with trustworthy civil authorities, let’s invoke the long-standing right of any landside state under the Chicago Convention to do an immediate safety inspection, a ramp check as they say in the trade. Naturally, quite apart from crawling over the plane with feeler gauges, that will involve checking all the documents; the manifest, the tech log, the ops manual, the QRH, the pilots’ licences and log books, the air waybills for everything on the manifest, the aircraft registration documents… And, of course, whilst we’re at it there’s no reason why Customs and Immigration shouldn’t search the hold.

If anything is out of order, we’ll ground the plane; if anything is really bad, we’ll seize it; if anything is outright criminal…yes. It may sound a bit hopeful, but consider some of the blog’s back pages. We’ve seen UN-11007 hurtle off the runway in Riyan, officially full of fish but they burned all too well; the An-12 was registered in Kazakhstan to Air Bas, operating from Sharjah, but was working under yet a third and unknown AOC, that of “RPK” – a company which doesn’t seem to exist. In Sudan, an Ilyushin-76 crashed working for Jet Line International, registered to Aerocom, on lease to East-West Cargo. One of the old Irbis Il-18s was grounded in Pakistan after a terrifying flight, several times overloaded with passengers, during which one of the pilots passed out with hypoxia.

It seems to be a defining condition of arms traffickers in the air that the aircraft make sense from one angle, usually that of the UAE authorities; as soon as you look at the details the whole picture dissolves. Here’s another example:

During a ramp check in Beirut, it was discovered that the aircraft’s operating documentation was split among all these firms; the insurance policy applied to a different plane, the tech log was from Ariana, the MEL (the list of the minimum equipment required for safe operation) was the American Airlines one, later replaced by a Swazi one that hadn’t been approved by the Swazi authorities. These institutional flaws complemented a long list of physical ones. None of this should be surprising; UTA’s chief pilot wasn’t qualified on the B727 and neither was anyone else there. The tech manager was trained on the Lockheed Tristar and DC8, and the strong impression is given that literally no management structure for 727 operations existed…

So, I’m delighted to see this report from SIPRI, always sound on the issue right back to the 90s, which suggests exactly that. You can get it here. Of course, being a bunch of Swedes or at least in Sweden, they’re a lot more serious than me – they’ve got studies an stuff and tables and data. But don’t take my word for it. Read the whole thing

Now, the same people are trying to get a change in European Union regs through the European Parliament to make this job easier. You might want to tell your MEP about it, especially if they’re a member of ALDE – the European Liberals.

Update: Here’s a specific talking point.

Lobby for, and support amendments and mechanisms by the relevant EU actors: European Commission DGs, the European Council, the European Parliament and concerned member states “to formulate and implement effective measures using existing EU instruments and regulations that will further reduce the number of air cargo and maritime companies involved in destabilising or illicit small arms shipments to Africa”.

Ooh, more Iran-war nonsense, this time from none other than mouthpieceful Russia Today, via this thread. There seems to be a meme floating around that there was a war between Russia and Georgia because the Russians intervened to prevent the Americans using Georgian airbases to attack Iran (obviously, a war with Iran is the universal explicator for everything). Quote:

Shortly after that, a phone call came from a college friend who had just come back from Kandahar in Afghanistan, where he had seen American battle tanks being unloaded from a Ukrainian-registered Antonov-124 “Ruslan”, the heaviest and largest cargo airplane in the world. The friend asked if I had any idea what tanks would be good for in Afghanistan, and I said I didn’t. It’s an established fact from the Soviet war in Afghanistan that tanks are no good for most of the country’s mountainous territory. They are good for flatlands, and the main body of flat land in the region is right across the border in Iran.

Later in August there was another bit of unofficial information from a Russian military source: more than a thousand American tanks and armored vehicles had been shipped to Eastern Afghanistan by Ukrainian “Ruslans” flying in three to five shipments a day, and more flights were expected.

Wrong! For a start, the Canadian and Danish armies brought their Leopard 2 tanks to Afghanistan. But far more importantly; there are 26 active An-124s in the world (not counting ones operated by the Russian air force). You could load, at the very most, two M1A1 Abrams tanks in one plane. To move a thousand tanks – if the US Army has that many spare, which sounds unlikely – you’d therefore need 500 flights, or 19 sorties for the complete available fleet.

You couldn’t get the complete fleet anyway, as it has regular contractual commitments; if you could round up 12 An-124s for the job…well, with 122 tonnes of cargo, the plane has a still air range of 2,335 miles. This means it will need to make multiple stops between Kabul and anywhere in the US; at a cruising speed of 490mph, each hop would be about 4h 45mins long, so at least a 13 hour haul, which implies you’re only going to get one trip every two days. So that would be about 83 days’ work. At a cost of about $20,000 an hour that’s $478 million in air chartering alone.

So this is evidently drivel. But why would Russia Today be pushing it? Perhaps this story in Le Monde might tell us something. Despite all the buffoonery, the Russian government has decided not to break off an agreement permitting NATO to send supplies through Russia to Afghanistan, and will further be providing 4 Mi-8 helicopters for EUFOR in Chad. Now that it’s all out of the papers, both parties are paying the price for their harder statements by trimming back their actions. Although, you have to wonder what Sarko offered or threatened to get them out of Poti.