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Mexican Risk Identification and Remediation

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Mexican Risk Identification and Remediation
By Gordon Housworth
Intellectual Capital Group LLC

Forecast accuracy:  Intellectual Capital Group LLC (ICG) predicted the disruption and criminalization of Mexico in late 2006 and made this outlook public in 2007.  Seen as alarmist -- even unbelievable -- at that time the projection was vindicated by 2010 updates that reported accelerated criminal activity. ICG flagged extortion as Mexican business supply chain risk in 2010.  Mexican entities' consistent denials of this risk are not supported by facts on the ground.

The headlong industrial investment into Mexico by OEMs and large tier one and tier two suppliers belies real and growing supply disruption.  In fact OEMs and upper tier suppliers already have unidentified risks in their Mexican supply chains.

Unremediated risk rises from information gaps between a corporate investment or sourcing decision and on-the-ground local consequences for affected companies in Mexico. Examples:

Fearing retribution Mexican firms and their management deny or underreport violence. Maquiladora plants and their employees have long been victims of robbery, extortion and abduction yet underreport for fear of criminal retribution and upper tier de-sourcing.

Firms with extensive Mexican operations quietly curtail movement of visiting and expat personnel.  An OEM client asked a tier one electrical supplier to accompany its staff on a multi-facility benchmarking effort including Mexican facilities.  The supplier declined noting that they no longer send US staff to Mexico due to risk of criminal harm.

Supplier operations can suffer reduced quality and/or increased costs as long as these under-reported risks remain unresolved. There are solutions that mitigate these risks but these remedies must be tailored and monitored to be effective.  A one-size-fits-all approach would be needlessly expensive and cumbersome and would overlook site-specific risks to plants and personnel.

Successful protective responses that adapt to emerging and changing threats exist and are best performed early, even at the supplier/site selection stage. Protective responses performed at a later date will have to accommodate legacy risks in site selection, hiring, and contractor selection. While the second condition is the industry norm, in all cases a cost-effective preemptive security response will include:

Asset Value Assessment (Assess value of the facility, process, personnel to be protected which is needed to estimate an appropriate cost of protection. If the protective cost is too high or the target is too vulnerable the function may have to be relocated.)
  •  Threat/Hazard Assessment (Specific nature and scope of the threat(s) which is essential to design the minimum effective protective response.)
  • Vulnerability Assessment (Assess vulnerability of the target(s) to attack.)
  • Risk Assessment (Assess risk from each threat actor or group, the likelihood of attack and the likely damage of an attack.)
  • Risk Management (Continuous management of pertinent threats and appropriate responses.)

Mexico's Low Cost Country (LCC) Position

ICG has long recognized Mexico is a low cost country (LCC) in terms of total chain cost, as opposed to many Asian piece part costs that are not low cost when total chain costs are considered. While this view is vindicated by the inclusion of Mexico in backshoring (repatriating manufacturing) to the "US local" region (defined as the US, Canada and Mexico), conditions on the ground in Mexico have deteriorated to the point that even the industrial heart of Mexico is at risk. Disruptions in Nuevo Leon (Monterrey) are proof that all of Mexico faces these risks. Investor optimism regarding crime as a temporary problem is unsupported by the Mexican trade and popular press.

Mexican firms often conceal risk for a variety of reasons such as extortion threats to Mexican employees and their families, desire to keep the parent firm from pressing organizational changes at the Mexican firm, or to shield local financial operations.

Mexico's Rising Cost of Security

Negligible only a few years ago, small and medium-sized companies "operating in and around Monterrey in 2011 were spending 5 percent of cash flow on security." From If Monterrey falls, Mexico falls:

Even if manufacturing is showing some resilience, security costs are growing, while moving goods up to the U.S. border and to neighboring states is getting riskier. 

Small and medium-sized companies operating in and around Monterrey are spending 5 percent of cash flow on security, a cost that was negligible just five years ago, while firms selling GPSs, alarms, locks and cameras in Monterrey have seen a 20 percent jump in annual profits in three years, according to Monterrey's commerce, retail and tourism chamber.

"If you look at the figures, companies are still investing, but there's a lot of evidence that the money is being diverted into security, not into research and development... This is money that's going into barbed wire fences, not solar panels and that is going to hurt competitiveness in the long term."

In extreme circumstances, such costs can go much higher, rising to 40+% of the operating budget as happened in high threat periods in Africa and the Americas.

Security costs are far lower when remediation is commenced early, before criminals have come to perceive the company as a target.

Mexican News Blackouts Do Not Imply Improvement

Monterrey, for example, has receded from the headlines without a significant reduction in crime. On the ground, the Gulf Cartel with the assistance of the Sinaloa Cartel reasserted control over significant areas of the city and substituted a less violent but equally aggressive control.

This new arrangement coupled with a government mandated reduction of crime related news and redirection (such as claims that violence was geographically bounded; that most deaths were linked to organized crime members - none of which were correct) largely removed Monterrey from the US mainstream press.

Organized crime does its part by intimidating and killing journalists. Dozens were killed during the Calderon Hinojosa administration's actions against cartel leaders. Intimidation and horrific crimes against the press have continued under the Pena Nieto administration, primarily in northern states along the US border. The result is self-censorship among Mexico's regional news outlets.

The election of Pena Nieto and the return of the PRI accelerated the PR campaign without significantly altering the national level of violence. The government stopped announcing arrests, seizures, and operational details of security policy, while deflecting the public agenda onto topics such as the automotive sector (the "new Detroit") and export growth.

The Risk Tree

A ranking of least risk to greatest risk would typically contain this vulnerability hierarchy:

1.    Global investors.  [Least Risk]

2.    Corporate or group level management.

3.    In-country expat management.

4.    Tier 1, 2, 3... tier N suppliers.

5.    Employed local nationals.

6.    Local nationals in industries and services outside the top tier and its suppliers.

7.    Citizenry of the region. [Greatest Risk]

The issues that routinely confront Mexican citizens and most of its industries are either unknown to, have no effect upon, or do not enter into the risk calculation of the more insulated and least risky parts of the hierarchy (typically groups 1. And 2.).  Friedman's "How Mexico Got Back in the Game" states an opinion typical of US/EU corporate decision makers that will elect to produce in Mexico.[1] At their remote risk/high reward level, Mexico makes perfect sense.

Mexican companies immediately adjacent to US/EU companies can have very different risks. A company's size, skill and location in the tier supply chain often make a substantial difference in its threat posture. While large manufacturers do consider their immediate risks they often do not take into account the susceptibility of their supply chain to predation and interruption.

See Realistic Supply Chain Transparency

Capacity at tier (from top tier or OEM down to smaller, isolated tier suppliers) is an important factor generally overlooked in risk analysis because there is no single security or risk rating for all companies in a state or region.  A major supplier may have the size, revenue, processes and training to better protect its commodities, personnel, plants and finished goods. 

An example would be a large supplier's ability to assemble a convoy of vehicle transporters escorted by vetted, paid Mexican federal police officers. Yet a smaller supplier that may be physically located next door to the larger supplier is vulnerable precisely because it lacks those resources.  Furthermore, hourly workers at these lower tier suppliers are completely vulnerable to criminal predation at work, at home and in transit.

While criminal elements can strike both expat and Mexican nationals of US/EU firms, attacks against expats generally occur at much lower frequency, are opportunistic or simply a result of accidentally "being in the wrong place" events.  Thefts of inbound commodities and outbound finished goods are increasing in Mexico. In addition, both contraband (usually narcotics) and counterfeit goods are being inserted in shipments bound for the US.  

Mexican industry and local suppliers fare worse as criminal elements attack wide tiers of industry and society.  Criminals have long troubled maquiladora plants with robbery, extortion, abduction and murder of maquiladora workers and family members. Extortion payments by maquiladoras are rising despite silence from the victims of these crimes.  Lower tier suppliers remain silent for fear that publicity will result in retaliation by criminal elements and/or upper tiers will resource their business elsewhere.

Certain automotive parts are candidates for criminal extortion intended to choke vehicle production. Manufacture of wiring harnesses for North American assembly have been highly localized in Mexico.  Criminal interruption to this wiring harness nexus would impact a significant portion of US vehicle production.

Because of these many variations the risks to a particular supplier and that supplier's appropriate remediation strategies must be analyzed on a case by case basis.

Extortion Is Now a Pervasive National Threat

Extortion [extorsion], also called "illegal protection" [proteccion ilegal], is now rampant in Mexico.

Extortion includes activities that imply coercion of the victim by an agent distinct from the state. Successful extortion demands that said agent demonstrate a reputation for the use of force against those who refuse to pay for their services. High levels of violence coupled with participation of police confer impunity on the extortionist.

Extortion is economically depressive, a production-less crime, i.e., criminals have only to tax without having to produce and sell a product. Long present in Mexico, extortion has surged as part of criminal diversification beyond narcotics into extortion and kidnapping, costing Mexico one percent of GDP. We call it an unsustainable societal tax that continues to grow, in part, because it is so easy to raise incremental demand without risk or cost to the attacker.

Mexican assets are highly vulnerable to predation despite denials from the Mexican side of the supply chain that a problem exists. There is immediate loss, possibly death, to the victim; retribution to both the victim and his/her family members for any corroboration or public comment; and forced induction of locals into the criminal apparatus.

Mexican statistics are supremely underreported as individuals refuse to report extortion as the police are either directly running the extortion, or managing gangs running the extortion. Businesses and individuals pay as long as they can, then close or are harmed when they cannot.

The breathtaking penetration of Mexico's commercial sector has allowed the narcotics trade to diversify their revenue streams and reduce their net organizational risk while the economic loss to Mexico continues to rise.

Supply Chain Vulnerabilities

Mexican supply chains are notable for insider threats (co-opting/threatening employees), supply chain threats (takeover of labor providers, sub-suppliers and shippers); and expropriation (forced sale/turnover of companies and assets).

Primary extraction industries (mining, petroleum, timber) have been a staple of Mexican criminal interest, from hardwood timbering on native lands in the south, to illegal bunkering/skimming of PEMEX petroleum in the east, to silver, gold and iron mining in western Mexico.

The dining, bar, brothel, and storefront sector - virtually anything with a fixed address for customers - has already been brought under monthly extortion or driven out of business (as testified by the thousands of shuttered businesses).

The focusing of criminal predation against the Mexican side of the supply chain is good business because:

  • Targeted employees and families are local, accessible and defenseless.
  • The cost of predation is low while the reward is high.
  • Local predation does not attract significant US political and police attention.
  • Mexican authorities compound the problem by limiting access when US assets make inquiries against local predations.

Extortion's Rising Disruption

Extortion, theft and contraband continue to increase in the Mexican supply side. Extortion risk is already present to maquiladora employees and the maquilas themselves. We have already seen limited jumps to the US/EU side in areas of transport, power interruption and contraband insertion into parcel carriers and corporate shipping containers (especially damaging to C-TPAT suppliers as it may negatively impact their expedited customs clearance).

The US/EU side of the supply chain strives at all costs to have no appearance of unreliability to its upper tiers and investors alike. Being seen as a potentially unreliable supplier is to invite a resourcing review by an upper tier and/or see the company's share price suffer. As a result the US/EU side of the supply chain is willing to under-report the risks.

We see the entry point for extortion shifting in the automotive supply chain. Initially it was Mexican tier suppliers but has now expanded to Mexican employees of US/EU firms. Mexican nationals are desperate not to talk about these threats for a variety of reasons, e.g., personal threats, termination/reassignment and fear of driving an upper tier supplier to resource.

As a result, it is difficult for Mexican firms to execute genuinely rigorous security assessments as too many points are open to compromise.

US/EU supply chains in Mexico will face greater risk from compromised firms and individuals on the Mexican supply chain side. Crossover will occur as one or more criminal groups become more aggressive vis-a-vis its peers, more acquisitive for revenue, and simultaneously less fearful of US response. Once the Mexican chain side is consumed (offers no further share growth), there is only taking market share from competitors and entering new markets such as the US/EU suppliers.

Unfortunately most commercial firms have a defensive (target) mentality that prohibits seeing themselves through an attacker's eyes. Gaining the potential to influence outcomes demands an ability to see into the attackers' assessment of risk and uncertainty.

Tailored Solutions Under a Governing Architecture

Prepared companies select risk to accept by design. The unprepared or poorly advised company blindly accepts risk by default. Such firms will continually put their assets and personnel at risk.

Preparedness for such eventualities means that needed security measures are identified and quickly put in place to ensure that the company is operating with a layered defense against current and emerging threats.

Preparedness means that the company will be able to demonstrate its commitment to a genuine preemptive protection of its employees, dependents and suppliers. Risk assessment and mitigation must be performed without triggering reprisal by adversaries.

Local and international press disclosures need to be managed as the company reduces security risk without raising uncertainty or concern on the part of any customer or partner.

Resolution commences with real world risk assessments and recommendations followed by implementation and subsequent review of what succeeded and what requires correction. Successful risk resolution implies business and supply chain continuity, thus company managers are co-participants in the assessment and implementation effort.

Choose Deflection Over Confrontation to Minimize Risk

Given the high threat environment in certain areas, operations must be conducted with the highest level of control and security in all phases, as both Mexican security forces and operating criminals can be expected to be on high alert for any counter-surveillance.

Criminal groups in Mexico can deliver more firepower than most companies are willing to sustain. A corporate response that confronts or challenges such criminal groups invariably draws unacceptable reprisal against staff, facilities and product.

Effective, lower cost, lower risk responses focus on deflecting hostile attention without confrontation. Criminals make a risk-reward calculation just as businesses do. Effective security must drive up their level of uncertainty, thereby moving them onto a more docile or unprepared victim.

Assessments must be performed in a highly compressed timetable to address existing and needed security risk mitigation efforts in the critical areas of key personnel (including dependents), facility operations and transport of commodities and finished goods.

Implementation must focus on specific and actual security risk management matters that will need the company's immediate, short term and medium term attention. The initial assessment should serve the company as an extendable regional template that can be applied to security risk management across the company's operating portfolio.

Company managers and staff must be taught tools and skills so as to understand what has been working, why it has worked, what should be changed and how urgently this needs to occur. Skills training is needed to build core competencies in key areas of operating risk management specific to security and safety risks.

Each protection program must be designed for the actual threat environment in a specific location, and must produce a security risk mitigation effort that will generate assessments, briefings, decision points, implementation plans and immediate effectiveness reviews.

Beyond this immediate scope, company personnel must gain a broader ability to ensure continuity of operations in any deteriorating security environment and provide the company a basis for balancing resources while ensuring effective security risk management.

Proven Solution Paths Do Exist

All firms, and most certainly firms seen as high value targets, must continuously address three vulnerability areas:

  • Pricing model compromise (Tier supply chain events, supplier outsourcing, subcontracting, tertiary services such as trucking, etc.).
  • Corporate core (Company/research, R&D hives, manufacturing, warehousing).
  • Human resources (Personnel data.)

Each of these areas, singly and in combination, are best examined by Design Basis Threat (DBT) process (originally created to protect nuclear facilities and weapons) to define and adjust specific responses to specific threats. This Threat Analysis entered the mainstream in the wake of the Khobar Towers bombing in Saudi Arabia.

As the threats change so must the protective responses change. DBT is adaptive, can be taught and embedded in normal business operations to be monitored by company personnel. As security is embedded, there is no added organizational layer for security.

The top level steps in this dynamic process are:

  • Asset Value Assessment (Assess value of the facility, process, personnel to be protected which is needed to estimate an appropriate cost of protection. If the protective cost is too high or the target is too vulnerable the function may have to be relocated.)
  • Threat/Hazard Assessment (Specific nature and scope of the threat which is essential to design the minimum effective protective response.)
  • Vulnerability Assessment (Degree of vulnerability of the target(s) to attack.)
  • Risk Assessment (Assessment of risk from any actor or group, the likelihood of attack and the likely damage of an attack.)
  • Risk Management (Continuous management of pertinent threats and appropriate responses.)

Necessary Risk Remediation Activities in Mexico

In potentially high threat environments such as Mexico, all associated surveillance must be performed by skilled personnel in a completely non-alertive manner as many criminal groups will assume that an unknown person or group is a hostile competitor to be immediately eliminated.

Affected firms will need a partner that can perform a thorough threat analysis and a calibrated response that includes:

  • Actionable intelligence at national, regional and situational levels
  • Outreach to authorities and relevant entities
  • Executive protection
  • Facility protection and upgrade steps
  • Transportation protection of raw materials and finished goods
  • Vetting employees and contractors to reduce insider threats

Each step must be executed with precision and with continuous monitoring of any changes that alter the inbound threats.


#Mexico #SupplyChain #Risk #Extortion #Corruption

[1] Thomas L. Friedman, "How Mexico Got Back in the Game", The New York Times, February 23, 2013:  11.



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Miniaturization Threat Impact (MTI) system

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Identifying items at th
e edge of technology


It is an axiom at our shop that "items at the edge of technology" are often unrecognizable or unidentifiable by inspectors unfamiliar with the technology. Two characteristics most contributed to a lack of recognition, robbing the viewer of visual cues as to function:

  • Miniaturization - a reduction of size and form.
  • Integration (often a handmaiden of miniaturization) - the combination of functions of multiple items into a single item, itself often miniaturized.


Defenders too often fail to recognize miniaturization and integration as crucial components in risk evaluation. The emergence of Micro-Electro-Mechanical Systems (MEMS) that exhibit both miniaturization and functional integration are already complicating timely identification of risky items. (Also see Berkeley Sensor & Actuator Center and search the domain for "mems".)


We expects fluid conditions as defenders expand their screening focus beyond larger, more recognizable items to include a proliferating class of smaller, cheaper items:

  • Unexpected, innovative and non-traditional methods will proliferate, finding broad applicability.
  • Targets will have changing vulnerabilities, technological abilities and associated risks.
  • Attackers' tactics will evolve in methods and operational activities from internal technological "lift" and as a response to changes by their targets.
  • Short of nation state confrontations, conventional operations will draw less interest as adversaries will look to escape retaliation and the cost of investments required to underwrite an overt effort.
  • Unless we design with the asymmetrical adversary in mind, such adversaries will continue to find ways to bypass our defenses and exploit our vulnerabilities. Such asymmetric operations will have common characteristics:
    • Small-scale high-impact operations.
    • Operations performed with greater efficiency and effectiveness, both to minimize footprint and discovery and to conserve organizational resources, in order to achieve maximum results.
    • Rise in operations taken to address ideological causes and this applies equally to fringe Muslim fundamentalists and single-issue groups such as Earth Liberation Front (ELF).


Creating a generalized risk assessment hierarchy

Done for the US Defense Logistics Agency (DLA), a pilot Miniaturization Threat Impact (MTI) system capable of classifying threats from miniaturization and integration was developed.


Risk characteristics spanning easily known to insufficiently known to otherwise unknown items were captured in a generalized risk assessment tree (from least to greatest risk):


LEAST RISK 
  1. Primary function is identifiable from life experience and general training.
  2. Primary function is identifiable from specific industry/technology experience.
  3. Dual use/unintended use is ascertainable from specialized training and added knowledge-base.
  4. Miniaturization (function no longer evident) becomes difficult to defeat.
  5. Functional integration (embedding multiple functions by virtue of miniaturization) is difficult to defeat.

GREATEST RISK

The relative ease or difficulty of identification scaled appropriately (from easy to most difficult):

IDENTIFICATION WITH EASE
  • Generalists were good at #1, generally poor at all others.
  • Specialists were good at #1 and #2, generally poor at all others.
  • #3 much harder as it requires understanding of function(s) and the ability to transfer those characteristics to new objects, especially for a "good enough" capacity.
  • Highly skilled and frequently retrained specialists might address #4 on an irregular basis. 
  • Miniaturization and Integration #5 were effectively undefeatable in the short to medium term.

IDENTIFICATION MOST DIFFICULT
 
Capabilities difficult to automate


The author's ability to identify dual-use capability (can be used for both civil and military use) and "unintended use" capability (can be used for unintended or unimagined applications) proved difficult to transfer to existing staff without extensive retraining. Existing staff were either Generalists good at #1, or modest Specialists good at #1 and #2. Staff were, in effect, being asked to perform a role for which they had no prior experience.


Implications going forward


The glide slope to the desktop that brings increasingly greater capacity in smaller form factors at lower cost to the lay user or asymmetrical attacker will continue. Capability and/or lethality will rise even as components shrink.


Google Glass as an example in transition


"Wearables" (properly named the wearable computing market) has moved beyond early adopter status, but its three segments have varying degrees of acceptance:

  • Complex accessories - "operate partially independent of any other device, but fully operate when connected with IP-capable devices".
  • smart accessories - similar to complex accessories but allow users to add third-party applications.
  • smart wearables (notably Google Glass) - "function with full autonomy, independent of any other device except to access the Internet".

While it is now said to be a question of "when" and not "if" the wearables segment extends into the enterprise, aggressive miniaturization and integration continues to drive social unease - with more women than men in the negative. Google might benefit from flooding trusted segments with subsidized Glass, e.g., physicians, essential technicians, police and military. From Pew:

[P]ublic attitudes towards ubiquitous wearable or implanted computing devices are the most positive, or more accurately, the least negative. Although 53% of Americans think it would be a bad thing if “most people wear implants or other devices that constantly show them information about the world around them,” just over one third (37%) think this would be a change for the better

The glide slope to the desktop will continue to accelerate as Google has already received a patent for smart contact lenses with built-in cameras and other sensors such as infrared. The technical, police and military implications are staggering.


Today's Google Glass will by then have ceased to be an issue as people look carefully at your eyes to see if you are reality augmented. I would expect a certain class of detectors to emerge to detect wearers of such contacts. And they will be mounted in contact lens, or embedded in the wearer's biologic eyes.


Readers are recommended to read up on transhumanism.


U.S. Views of Technology and the Future
Science in the next 50 years
Aaron Smith, Lee Rainie, Michael Dimock
Pew Research Center
APRIL 17, 2014


Google invents smart contact lens with built-in camera: Superhuman Terminator-like vision here we come
By Sebastian Anthony
ExtremeTech
April 15, 2014 at 8:53 am


Don't blink or you'll miss this: Google to put cameras in contact lenses
By Michael McEnaney
Tech Times
April 15, 6:07 PM


Worldwide Wearable Computing Market Climbing to Nearly 112 Million in 2018, Says IDC
The Financial
12/04/2014 16:36


#Gogleglass #Wearables #Risk


Gordon Housworth



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Assisting journalists: Are the Mexican vehicle explosions a "proper car bomb"?

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Journalists contact us from time to time, too often to make a story on the back of our disclosing proprietary research to them. In fewer but welcome cases, they want to get terms straight to educate their readers.

 

After an earlier version of this note was posted to Frontera List as Mexican police probe Juarez car bomb possibly intended for authorities, two journalists asked:

Do you have any insight into how best to define a car bomb versus a bomb in a car? I ask [as] it’s my impression that we haven’t really seen a proper car bomb in Mexico yet – not on the scale of the ones I saw in Iraq or other places. But what’s the right definition? When do we know the cartels are looking to get such a device?

 

Where do you think they got it? is that common on the international criminal market, or is that just what might be locally available [from] the mining industry in Chihuahua?

Our reply:

 

Each of the recent spate of vehicle explosions is a Vehicle Borne Improvised Explosive Devices (VBIED) and the groups employing them are coming up the experience curve.

 

What makes a VBIED

 

First, slowly deconstruct VBIED, i.e., a vehicle borne IED.

 

In effect, a VBIED is both a shrapnel pack and a delivery mechanism for an IED described as: 

Definition: An IED is a bomb fabricated in an improvised manner incorporating destructive, lethal, noxious, pyrotechnic, or incendiary chemicals and designed to destroy or incapacitate personnel or vehicles. In some cases, IEDs are used to distract, disrupt, or delay an opposing force, to facilitate another type of attack. IEDs may incorporate military or commercially-sourced explosives, and often combine both types, or they may otherwise be made with home made explosives (HME).

They are unique in nature because the IED builder has had to improvise with the materials at hand. Designed to defeat a specific target or type of target, they generally become more difficult to detect and protect against as they become more sophisticated.

Almost anything that blows up will do, from grenades to plastic explosives to leftover mines. The most everyday of electronics -- a cell phone, a garage door opener, a child's remote-control toy -- can be recast as a trigger. And the hiding places for these handmade bombs are everywhere: in the ground, aboard a truck, even inside an animal carcass

Though they can vary widely in shape and form...

Once the perps understand fuzing and vehicle transport, they will quickly scale the explosive content.

 

Second, the size and brisance of the Mexican explosions in relationship to Iraq and Afghanistan

 

The size and brisance of the current Mexican VBIEDs are not on the scale of devices being encountered in the Mideast and SW Asia. From a private note:

Cheap escalation, expect both IEDs (Improvised Explosive Devices) and VBIEDs (Vehicle Borne Improvised Explosive Devices) to increase in volume and lethality as actors build larger charges.

 

IEDs and VBIEDs in Iraq, Afghanistan and other high tempo war zones are constructed from UXO (unexploded ordnance) abandoned or captured on the battlefield or looted from former state magazines.

 

By contrast, Mexican devices are currently utilizing blasting explosives [Tovex] that have far less brisance than military explosives. (In lay terms this has to do with the velocity of the radiating shock waves; blasting explosives are designed to fracture rock rather than pulverize, so explosive mixtures are tuned accordingly.)

 

The Murrah Federal Building in Oklahoma City was an ammonium nitrate fertilizer, diesel fuel and nitromethane device (and here), albeit of some 2200 kg, but it shows the art of the possible.

 

Once local actors start making fuel oil/nitrate fertilizer devices from locally available stocks, Mexico will be off to the races in earnest...

Cartel experimentation with explosives as opposed to firearms appears to have started in 2009:

The assailants apparently used Tovex, a water gel explosive commonly used as a replacement for dynamite in mining and other industrial activities, said the U.S. official, who is familiar with the investigation but spoke on condition of anonymity because the official was not authorized to discuss the Mexican-led investigation...

 

Mexico's powerful drug cartels have long been experimenting with explosives. In the northern state of Durango in 2009, more than a dozen masked gunmen stole 900 cartridges of Tovex water gel explosives from a warehouse run by the U.S.-based Austin Powder Company. Mexican authorities recovered the stolen material, but the theft underscored how easy it can be to get explosive material in the country, where armed men also have attacked transport vehicles carrying such substances.

 

The ATF has helped investigate several events involving improvised explosive devices around Mexico, including a roadside bomb in March at a gas station in the northern state of Nuevo Leon. That bomb, which didn't injure anyone, consisted of two large cylinders filled with nails and possibly black powder, another substance that is readily available on the black market.

The ground situation will rapidly escalate when one or more of the criminal groups begin to add military explosives (Semtex or C4) to their global shopping lists. As I noted in The reality of Mexican drug cartel weapons sourcing:

[The] cartels could easily rise above the squad subordinated weapons (assault weapons and light machine guns) currently in use to include antitank missiles and larger ordnance. Beyond the demands of ego and attempts to demonstrate superior area control, there are not enough viable targets to justify the added expense. Be certain that when the need or desire is there, so will be the weapons...

Third, the trajectory to expect

 

A well worn trajectory that played itself out in Iraq and now in Afghanistan will run in Mexico. From: Nicola Calipari-Giuliana Sgrena incident report, part 2, 5/5/2005: 

Improvised Explosive Devices (IEDs), Unexploded IEDs, Hand Grenades, Indirect Fire (mortars, rockets, and unidentified indirect fire), Rocket-Propelled Grenades (RPGs), Small Arms Fire (SAF), Vehicle-Borne Improvised Explosive Devices (VBIEDs), and Complex Attacks. The most common attacks along Route Irish are IEDs, VBIEDs, and SAF.

IEDs [continue] to evolve. Current techniques are:

  • Explosives positioned alongside guard rails. The large number of guard rails on the road make these devices difficult to detect and relatively easy to emplace by staging equipment in vehicles or near overpasses, and, in a matter of minutes, having the IED armed and in the desired location.
  • Explosives wrapped in a brown paper bag or a plastic trash bag. This is a particularly easy method of concealment, easy to emplace, and has been used effectively against Coalition Forces and civilians along Route Irish.
  • Explosives set on a timer. This technique is new to the Route Irish area, but is being seen more frequently.
  • Use of the median. The 50 meter wide median of Route Irish provides a large area for emplacing IEDs. These can be dug in, hidden, and/or placed in an animal carcass or other deceptive container.
  • Surface laid explosives. The enemy will drop a bag containing the explosive onto the highway and exit the area on an off-ramp with the detonation occurring seconds or minutes later depending on the desired time for the explosion.
  • Explosives on opposite sides of the median. Devices have been found along both sides of the median that were apparently designed to work in tandem, to counter Coalition Force tactics to avoid the right side of the highway while traveling Route Irish.
  • Explosives hidden under the asphalt. Insurgents pretend to do work on the pavement, plant the explosives, and repair the surface. These are usually remote-detonated devices.

Vehicle-Borne Improvised Explosive Devices (VBIEDs) contain two types of car bombs, e.g., when the vehicle is moving (suicide) and when the vehicle is parked and stationary. Both can be either command or remote-detonated:

  • Multiple suicide vehicles. The first vehicle either creates an opening for a second, more powerful vehicle, or acts as bait to draw other personnel, such as medics and other first responders, into the kill zone of the first vehicle. As people respond, the second VBIED engages the responders.
  • Suicide VBIEDs are typically used against convoys, Coalition Force patrols, or Coalition checkpoints where they can achieve maximum damage. Such vehicles will rapidly approach the convoy from the rear and attempt to get in between convoy vehicles before detonating.
  • Stationary VBIEDs are typically parked along main supply routes, like Route Irish, and often have been found near known checkpoints. These are usually remotely operated and may be employed in conjunction with a suicide VBIED.

From the concluding section of Beyond Colombianization, Mexico is the Iraq, the Afghanistan, on our southern border

It is going to get worse

 

Mexico demands what is called situational awareness of its citizens and visitors. While the violence in the border towns is reaching epidemic proportions, Monterrey and Acapulco (aka Narcopulco) now increasingly have what amounts to squad level firefights in the central business/tourist district.

 

Criminal co-optition will accelerate as groups jocky for product, plaza control, security and supremacy.

 

These negative events are paralleling Mexico’s betterment of the China Price, and may well deprive Mexico of added legitimate revenue and infrastructure build-out.

 

By early 2008 the Gulf Cartel had “begun acquiring more military-grade weapons, including FN Herstal P90 submachine guns, FN Herstal 5.7 x 28mm pistols, M72 LAW (light anti-tank weapon) rocket launchers, AT4 anti-tank rockets, RPG-7 rocket-propelled grenade launchers, MGL 37mm grenade launchers and fragmentation grenades.”

 

The use of Vehicle Borne Improvised Explosive Devices (VBIEDs) has started and I would expect that to accelerate with even more paralysis of Mexican judicial and police asset that US forces suffer in Afghanistan.

 

Missing from this first effort: Secondary and tertiary detonations, often waves of parallel ignitions, against massed first responders and receiving hospitals. The Chechens and Iraqis have perfected this progression, but for the foreseeable future these secondary detonations will be IEDs and VBIEDs and not suicide vests. As time progresses: Multiple targets, simultaneous attacks, multiple vehicles per target and armed assault/breaching cadres to clear security personnel and gain access to the primary target...

 

Bomb Wounds 2 in Northeast Mexico

Latin American Herald Tribune

August 30,2010

 

Comando caught with explosives in Chihuahua

From: Susan <prettysk...@gmail.com>

Frontera List

23 Jul 2010 20:01:11 -0500

 

Ciudad Juarez car bomb shows new sophistication in Mexican drug cartels' tactics

By William Booth

Washington Post

July 22, 2010; A10

US official: Mexican car bomb likely used Tovex

by ALICIA A. CALDWELL

MSNBC

updated 7/19/2010 11:38:32 PM ET

 

Mexico car bomb: 'Colombianization' of Mexico nearly complete

Last week's Mexico car bomb in the border town of Cuidad Juarez killed three. It is the first known use of a car bomb against authorities and marks a troubling new level of violence in the country's brutal drug war.

By Sara Miller Llana

CSM

July 18, 2010

 

Experts: Car bomb in Juárez mimics Middle East terrorist tactics

Car bombing was trap

By Ramon Bracamontes

El Paso Times

07/17/2010 12:00:00 AM MDT

 

Car bomb in Mexican drug war changes ground rules

by ALICIA A. CALDWELL

AP

updated 7/17/2010 11:04:40 AM ET

 

Mexico blames drug cartel for deadly car bomb

By Julian Cardona

Reuters

Jul 16, 2010 8:58pm EDT

 

Potential Indicators of Threats Involving Vehicle Borne Improvised Explosive Devices (VBIEDs)

Homeland Security Information Bulletin

May 15, 2003

MIRROR

 

Oklahoma City bombing

Oklahoma City Newspapers

1995

Early preparations

Building the bomb

 

Gordon Housworth



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Trend prediction update for Mexico

  #

 

Worse not better, and in surprising ways

 

From my vantage point, Mexican violence is merely trending towards a truly epic level of systemic violence. Despite the sad drumbeat of killings in Mexico chronicled by Frontera List, that nation has yet to experience the savagery that Africa has found itself awash.

 

The trends I see from the current conditions of Beyond Colombianization, Mexico is the Iraq, the Afghanistan, on our southern border do not indicate that the flow of drugs will be stopped, but rather the opposite. Drugs will continue to flow while criminal groups continue to battle for dominance and the control of the distribution plazas:

  • Criminal group leaders will emerge as defacto commanders of their TAZ (Temporary Autonomous Zone).
  • Those commanders will pacify their zone to a degree that relative signs of order will emerge.
  • Those leaders will then seek political roles.
  • An uncomfortable legitimacy will accrue to the most successful.

Distilling this trend line shows a variation of the terrorist-to-statesman trajectory followed by so many of the established and nascent political figures on the world stage. See Hamas will produce a Prime Minister faster than the Irgun.

 

My wildcard is the US and various US-based groups. While such groups vary widely in their intent, some would appear to go so far as to support a false flag event against the US with the intent of forcing the legitimate government to move assets into Mexico.

 

Misreading the patterns

 

We believe that it is a misleading of the data to believe that:

The government's crackdown "has achieved significant results as far as breaking up the leadership, financial, logistical and operational structures of organized crime"...

 

The informe [Calderon's annual report] lists more than two dozen top-ranking or local drug bosses taken down since last September. The most significant were kingpins Arturo Beltran Leyva and Ignacio "Nacho" Coronel, both killed by Mexican troops.

The sudden spate of captures of high level operators from various competing groups begs attention as coincidence does not exist for an intel analyst. Always possible we say, but unlikely and only accepted after all other avenues have been exhausted. (And only accepted once as twice is a pattern.)

By leaking information to selected (or neutral) authorities, these groups, who are likely corrupt themselves but not a partner to the personages being surrendered, gain leverage and advantage without having to endanger themselves or make themselves a target for retribution.

 

As the arresting agency has been selected on the basis of their tolerance to, or payment by, the leaking criminal group, those agency members will get a handsome bonus for removing the leaker’s competitor.

 

We long ago dispensed with the DTO (drug trafficking organization) label as the binary fiction of criminal cartels against honest government has been replaced by what we define as criminal groups:

 

Corrupt groups comprised of traditional organized crime, corrupt state and federal police, corrupt military and corrupt politicians who compete against one another in a fluid Co-Opetition [cooperative competition] in which only those at the top of their game survive.

 

In this operational environment the 'intelligence' cited by various parties is very likely not coming from a single legitimate sovereign source but rather from a series of interested parties seeking to damage another of the parties.

 

There is a yet to be written analysis of intelligence and counter-intelligence operations of Mexican criminal groups against one another.

 

All data from Mexico is suspect


Mexican statistics, especially those regarding criminal matters, are supremely suspect. As Molloy has diligently noted regarding this WSJ comment:

"In 2009, there were 1,128 cases of kidnapping reported to Mexican authorities. But the real number of kidnappings is estimated to be many times higher by analysts. In May, Mexico was shocked when kidnappers grabbed Diego Fernandez de Ceballos, a lawyer and former presidential candidate who is considered to be the grand old man of President Felipe Calderón's PAN party. The whereabouts of Mr. Fernandez de Ceballos remain unknown."

 

I've spoken to Mexican scholars who analyze crime statistics and they will sometimes refer to the numbers on kidnapping and extortion as "la cifra negra" because these crimes are known to be severely under- reported. No one has a real basis from the available numbers to even speculate on the actual number of kidnappings, except that it is very high.

And in this comment on murder counts:

I am not sure why the EPTimes [El Paso Times] reports the August murder toll as 322 when Diario this morning reported 336. I think the discrepancy comes from the fact that Diario maintains their own tally and compares it with the reports they receive from the Procuraduria.  Reporters have told me that they get different numbers depending upon who they talk to in the state office on a given day.  In any case, the number of people murdered in August is the highest ever recorded for a single month in Juarez.

Suspect sources, suspect data and self-interested parties will continue to make reading a Mexican situation report a delicate task.

 

Mexico's crackdown on organized crime is working, Calderon says

In his state of the nation report, President Felipe Calderon notes the arrests or killings of drug kingpins and efforts to clean up police. He also touts job gains and other economic improvements.

By Ken Ellingwood

Los Angeles Times

September 2, 2010


Hell on Earth

The UN Documents Congo's Bloodbath

By Horand Knaup in Nairobi

Spiegel Online

08/31/2010

 

Mexican drug lord Ignacio 'Nacho' Coronel killed by army

Leading figure in the Sinaloa cartel dies in shootout near Guadalajara

Jo Tuckman in Mexico City

The Guardian

30 July 2010

 

Mexican army kills kingpin in drug war coup

By Alberto Fajardo

Reuters

Thu Jul 29, 2010 11:17pm EDT

July 29, 2010

 

Mexico's Army Kills Drug Chief Allied With Guzman, Signaling Calderon Win

By Jonathan Levin

Bloomberg

Jul 29, 2010

 

Sedena confirma muerte de Nacho Coronel

La muerte del jefe del cártel de Sinaloa impactará en el funcionamiento y operación de ese grupo criminal, consideró el instituto armado

Francisco Gómez

Ciudad de MéxicoEl Universal

Jueves 29 de julio de 2010

 

Getaway for Mexican elite now cartel battleground

By OLGA R. RODRIGUEZ

APApr 28, 3:47 pm ET

 

AP Exclusive: Sinaloa cartel takes Ciudad Juarez

By Alicia A. Caldwell And Mark Stevenson

Associated Press

Fri Apr 9, 2010 6:34 am ET

 

Mexico Holds Drug Suspect Accused of Grisly Tactics

By MARC LACEY

New York Times

January 13, 2010

 

Mexico: Top drug cartel leader killed

CNN

17 Dec 2009

 

Gordon Housworth



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The reality of Mexican drug cartel weapons sourcing

  #

 

Earlier version posted to Frontera List on 20 August 2010

 

A robust myth

 

Each side of the US-Mexican border has its myths; one shared by both is the preponderance of weapons used by the drug cartels are US sourced and transited south to Mexico. Between deserting Mexican military selling their weapons, weapons harvested from armories further south in the Americas, and purchases made on international arms markets, the cartels can acquire whatever they desire from a price/performance level.

 

In other words, the cartels could easily rise above the squad subordinated weapons (assault weapons and light machine guns) currently in use to include antitank missiles and larger ordnance. Beyond the demands of ego and attempts to demonstrate superior area control, there are not enough viable targets to justify the added expense. Be certain that when the need or desire is there, so will be the weapons:

The Mexican army and police have seized 180,000 arms over the past three and a half years from organized-crime gangs, mainly drug cartels, including sophisticated, deadly weapons manufactured in South Africa...

 

A 40mm grenade launcher capable of firing up to six grenades in 30 seconds and a disposable projectile launcher are among the South African weapons seized recently from Mexican drug traffickers...

 

Other weapons being stored at the warehouse include AR-15 and AK-47 assault rifles, different types of grenades – including Israeli-made grenades – and .50-caliber Barrett rifles capable of penetrating armor and downing helicopters at a distance of two kilometers (1.2 miles)...

 

The Mexican states where the largest number of seizures of these types of weapons has occurred are (in order): Baja California, Michoacan, Chihuahua, Coahuila, Tamaulipas and the Federal District (Mexico City). Drug-trafficking gangs and other organized crime groups are known to operate in those jurisdictions...

Allan Wall of MEXIDATA brings data to the question:

So where do all the non-US weapons in Mexico come from?

 

They come from all over. They are brought by sea by the boatload. They are brought overland from Central America (where weaponry galore is left over from the civil wars there).

 

There are weapons in Mexico from South Korea (fragmentation grenades) and China (AK-47s).  There are rocket launchers that came from Israel, Spain and the former Soviet Union.

 

There are Russian Mafia groups in Mexico which are sources of weapons.  The Tijuana Cartel has an alliance with the FARC (Revolutionary Armed Forces of Colombia), which is another source of weapons.

 

A lot of weaponry comes up through Guatemala. A recent bust on that border, reported in the Guatemalan press in late March, confiscated grenades and AK-47s.

 

Many Mexican army deserters, of whom there have been a staggering 150,000 in the past six years, have brought their weapons with them (including M-16s).

For now the addition of VBIEDs to Mexico is a cheap and effective escalation. See Beyond Colombianization, Mexico is the Iraq, the Afghanistan, on our southern border.

 

Mexico would rather showcase the fraction of weapons imported from the US than confront its global illicit arms trade

 

The claim that "more than 90 percent of the guns recovered in Mexico come from the United States" is bogus, yet no less than a US president was let down by his fact checkers:

[Obama on 16 April 2009] A demand for these drugs in the United States is what is helping to keep these cartels in business. This war is being waged with guns purchased not here, but in the United States. More than 90 percent of the guns recovered in Mexico come from the United States, many from gun shops that line our shared border.

Obama would have been correct to say that 90 percent of the guns submitted for tracing by Mexican authorities were then traced to the U.S. The percentage of all recovered guns that came from the U.S. is unknown.

Another claim of 17% was equally bogus:

[The] Fox figure of 17 percent is based on a misreading of some confusing House subcommittee testimony by ATF official William Newell. The Fox reporters come up with a figure of 5,114 guns traced to U.S. sources in fiscal 2007 and 2008. That figures to 17.6 percent of the 29,000 figure for guns seized in Mexico, as given by the country’s attorney general.

The 5,114 figure is simply wrong. What Newell said quite clearly is that the number of guns submitted to ATF in those two years was 11,055: "3,312 in FY 2007 [and] 7,743 in FY 2008." Newell also testified, as other ATF officials have done, that 90 percent of the guns traced were determined to have come from the U.S...

 

Fox News reporters William La Jeunesse and Maxim Lott note, quite correctly, that Mexico doesn’t submit all the guns it recovers to the U.S. for tracing. Furthermore, Fox News reported, this is "because it is obvious from their markings that they do not come from the U.S." And it quoted a law enforcement official as to why:

Fox News, April 2: "Not every weapon seized in Mexico has a serial number on it that would make it traceable, and the U.S. effort to trace weapons really only extends to weapons that have been in the U.S. market," Matt Allen, special agent of U.S. Immigration and Customs Enforcement (ICE), told FOX News.

If that’s true, then the guns given to ATF for tracing constitute a badly biased sample of all crime guns seized in Mexico...

Given the bribery rife in Mexico, my assumption is that both criminal elements and corrupt politicians would prefer to mask the source, at best, of their weapons or, at least, distract the lay reader from ground truth.

 

Storing and destroying confiscated weapons

 

The War Materiel warehouse in Mexico City has a remarkable security protocol. Honestly manned, it has promise:

The vault nestled in a Mexican military base is the government's largest stash of weapons... The warehouse [in] northeastern Mexico City [is] surrounded by five rings of security. There are two military guards at the door and five more are in the lobby. Inside, another 10 soldiers sort, clean and catalog weapons. Some are dismantled and destroyed, a few assigned to the Mexican military... The security, bolstered by closed-circuit cameras and motion detectors, makes the warehouse practically impenetrable, said Gen. Antonio Erasto Monsivais, who oversees the armory...

But the process of getting, keeping and identifying weapons bound for, or in, storage is fraught with peril, and can lead to weapons, and their records, being lost and recycled back into criminal hands:

"Many of these rural municipalities that may come into a gun seizure ... may not even know anything about tracing guns,"... A police officer in Mexico submits a description, serial number and distinctive markings of the gun. The weapons are then turned over to the military for storage in one of a dozen armories such as the one in Mexico City.

 

When U.S. investigators need additional details, as they often do, the request goes back to the original police officer, who must retrieve the gun from a military vault — sometimes hundreds of miles away... Many mistakes are made because of difficulty translating technical terms about firearms...

 

Mexican police must ask permission each time they need to look at a stored gun... Even if that permission is granted, the investigator cannot go past the metal fencing separating a reception desk and the shelves holding the guns. A soldier has to bring out the requested weapons...

Given my interviews and research on cartel weapons sourcing, I find this statement difficult to believe:

But [General Monsivais] said that despite the type of weapons in the possession of the drug-trafficking gangs, their firepower still does not exceed that of the Mexican armed forces and police.

My opinion is that the only reason that this and similar warehouses are not thoroughly penetrated is that it is cheaper and easier for cartels to source new weapons, paid for with drugs, en masse from overseas.

 

Sophisticated South African Weapons Among Arms Seized from Mexican Gangs

By Edna Alcantara

Latin American Herald Tribune

August 20,2010

 

Mérida Initiative in Need of Performance Metrics

by Phil Leggiere

Homeland Security Today

Friday, 23 July 2010

 

Merida Initiative: The United States Has Provided Counternarcotics and Anticrime Support but Needs Better Performance Measures

GAO-10-837 July 21, 2010

Highlights Page (PDF)

Full Report (PDF)

 

GAO Report: U.S. Source For “Large Portion” of Mexican Crime Guns

FactCheck.ORG

June 19, 2009

 

FIREARMS TRAFFICKING: U.S. Efforts to Combat Arms Trafficking to Mexico Face Planning and Coordination Challenges

Report to Congressional Requesters

GAO-09-709

GAO

June 2009

 

Mexico's weapons cache hard to trace

Military has more than 300,000 confiscated weapons locked in vaults

AP

updated 5/6/2009 8:32:46 PM ET

 

Counting Mexico’s Guns

President Obama says 90 percent of Mexico's recovered crime guns come from the U.S. That's not what the statistics show.

FactCheck.ORG

April 17, 2009

Corrected: April 22, 2009

 

Mexico is Awash with Weapons – Is the USA to Blame?

By Allan Wall

MEXIDATA . INFO

Monday, April 13, 2009

 

Gordon Housworth



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Building an explosive preparer's library in under 30 minutes

  #


With a grounding in chemistry, most notably to understand which reactions will generate sufficient heat to precipitate cook off, basic mechanical engineering, and model rocketry, coupled with access to a machine shop and painful attention to process detail, I can attest to the relative ease of constructing asymmetrical devices. As a teenager with access to EOD/UXO (Explosive ordnance disposal/Unexploded ordnancemanuals dealing with WWII German anti-handling and anti-tampering devices installed in ordnance dropped on England, I started to build booby trapped training devices with anti-handling features for the local bomb squad to train officers. While the 'detonator' in those devices was the now old fashioned flash bulb sticking out the side of the devices, a parallel interest in chemistry led to product, which drove the interest in rocketry. DISCLAIMER: I was fortunate. I had mentors who offered guidance. Some of my efforts took on a 'class project' level of general interest. Access to the internet is NOT a substitute for skilled laboratory practice. I categorically do not recommend trying this at home.


Good transnational border bomb design

 

If Palestinian master bombers are any guide, militant groups should be able to produce basic device architecture and BOM (bill of materials) with variants tailored for local conditions. (For example, being able to substitute and wire a CDMA phone in lieu of a GSM phone.) These plans could be accessed electronically and implemented locally. It addresses what colleagues have spoken to me as the ‘holy grail’ of an attacker coming in clean, then building the device locally from locally sourced components that do not attract attention.

 

Short of this, I concur with the assessment that reliable device construction that neither detonates prematurely or fails to detonate on target is not easy:

While bomb-making instructions are easily available on the internet, it is a skill that needs personal tuition... "If you don't have proper training in chemistry, engineering and the processes of building a bomb, you're just guessing..."

 

Skills needed can include the refrigeration or heating of chemicals to a precise temperature, mixing chemicals to an exact proportion, or understanding the degree of concealement needed to smuggle a substance through an airport scanner.

 

[It] was far more difficult to get something to "go boom" for the average untrained person than people think. "This is why, for example, training for construction of explosives and explosives devices in terrorist training camps has historically taken up to two years, as opposed to the usual basic training where people are trained how to 'use' explosives instead of how to build devices"...

 

"It is an ongoing problem for militant groups. This is why some [groups] often sent the detonator or a key part of it back with those it was deploying to carry out attacks, especially for the more sophisticated attacks."

Current state of militant designs

 

Too many gloat over the ineptitude of the Times Square bomber. With a better designed device - amateurish was appropriate to describe that one - and/or an actor that was willing to die rather than escape, much of what followed would be post blast forensics.

 

The Time Square failure is even more remarkable in that improvements to the basic design of the 2007 London car bomb outside the Tiger Tiger club in Haymarket, and a second car a few hundred yards from the first, were not disseminated among the faithful. See diagram and image.

 

Remember that they go to school on us. All details noted in the Times Square and other attempts that document both the failure of the device to function and the perp’s identification and capture will be added to their playbook. Example: 

Investigators found that the vehicle identification number (VIN) on the dashboard of the 1993 Nissan Pathfinder had been removed. But that's not the only place to find the VIN. According to AutohauzAz.com it can be found: Left side of dash (thru windshield), front left floor panel, right inner fender, right strut housing, firewall, and engine block.

The Bet

 

I decided to bet that I could capture a working preparation library for explosives, incendiaries, igniters and basic device constructions in less than 30 minutes. The goal was to have sound operational materials that with a modicum of laboratory practice and mechanical and electrical skill would produce operational devices. The process took less than 20, and that was with citation documentation.

 

Start with likely keywords or phrases, or if you know anything about the field, start with a classic: FM 5-25 Explosives and Demolitions. FM 5-25 is devoted to placement technique as opposed to manufacture, but wherever FM 5-25 appears there will be fertile ground. My paper copy is 1971; subsequent changes are minor.

 

Second search tip is to limit searches to PDF documents as most manuals are rendered in PDFs on the web.

 

Third search tip is, when you find a promising item, rerun your search limiting your search to that domain.

 

Leaving aside the many Torrent feeds and the occasional scribd.com sources, you will soon have PDFs of all that you need for technical preparation from ordinary materials as well as mechanical fabrication and placement. The citations noted here are representative, but not exhaustive. Some sites could be, or should be, honey pots. Other than Cryptome, most English sites represent themselves as patriot, militia, or survivalist stock.

 

The items cited in Preparer Resources below are but a sampling of technique available on the web.

 

The next question was why, with these materials easily available, weren't the jihadist community producing better device designs for export.


Questioning the lack of tradecraft in recent militant devices

 

Despite the volume of information that is publicly available, mercifully much of which is wanabee, actual fabrication has been poor in many recent devices in the US, UK and Europe.

 

Readers may think that, 'It is only a matter of time. They cannot stay stupid forever,' but the truth is that the necessary information has been in jihadist, paramilitary, and patriot right hands for decades. My only surprise is that so much tradecraft appears to have been lost in jihadist training over the past decade.

 

As you really don’t need much more than TM 31-210 IMPROVISED MUNITIONS HANDBOOK and FM 5-25 Explosives and Demolitions, the lack of current jihadist training in preparation and fabrication is all the more remarkable when parts of these manuals have long been in jihadist hands, forming a key part of the jihadist training syllabus in Afghan camps. From Afghan Camps Turn Out Holy War Guerrillas and Terrorists, 2002:

The documents — including student notebooks, instructor lesson plans, course curriculums, training manuals, reference books and memorandums — show that one tier, by far the busiest, prepared most of the men who enlisted in the jihad to be irregular ground combatants... The other provided a small fraction of the volunteers with advanced regimens that prepared them for terrorist assignments abroad.

 

American military instructors who reviewed the documents said the first tier of instruction was sophisticated in a conventional military sense, teaching, one said, "a deep skill set over a narrow range" that would reliably produce "a competent grunt." The second tier was similarly well organized, albeit with more sinister curriculum.

 

Implicit in the split levels of training was the Islamic groups' understanding of the need for different sets of skills to fight on several, simultaneous fronts: along trench lines against the Northern Alliance in Afghanistan; against armor or helicopter assaults from conventional foes in Chechnya; as bands of foot-mobile insurgents in Kashmir, Central Asia or the Philippines; and as classic terrorists quietly embedded in cities in the Middle East, Africa, the former Soviet Union and the West.

 

To instill these diverse lessons, the schools applied ancient forms of instruction — teachers pushing students to copy and memorize detailed tables and concepts — to modern methods of killing. [in effect, using] "Islamic pedagogy to teach Western military tactics."

 

Evident as well in the documents, which were translated for The Times, were signs that in developing martial curriculums, the groups were cannily resourceful in amassing knowledge. Some lessons were drawn from manuals from the former Soviet Union. Others, the use of Stinger missiles or Claymore mines, were derived from instruction underwritten by the Pentagon and the Central Intelligence Agency in the 1980's, when Washington backed the Afghan resistance against Soviet occupation.

 

In the years after the Soviets withdrew and American money evaporated, the groups aggressively cribbed publicly available information from the United States military and the paramilitary press. Ultimately, American tactics and training became integral parts of the schools.

 

One camp, used by the Islamic Movement of Uzbekistan, gave instruction in movements by four-man fire teams that was modeled after formations used by the United States Marine Corps... The Uzbeks also used reconnaissance techniques long taught at the Army's Ranger School in Fort Benning, Ga. Other documents show that jihadi explosives training covered devices and formulas lifted from a Special Forces manual published in 1969.

 

While these materials are available through open sources, from on-line booksellers to rural gun shows, military officials said it was a feat to digest far-flung sources, translate them into Arab and Asian languages and assemble them in an orderly way. Bomb-making instruction, for instance, combined the electrical engineering necessary to make detonation systems with Vietnam-era Army formulas for home- brewed explosives, then was translated into Arabic, Uzbek and Tajik. "It indicates a tremendous amount of filtering and organization to get to that," an American military instructor said.

 

Moreover, notebooks from several camps demonstrate that even in courses taught in different languages and hundreds of miles apart, many lessons were identical, sharing prose passages, diagrams and charts. This was an important achievement, military officials said, as it created compatibility between members of what essentially became an Islamic foreign legion.

 

It also marked a significant advance beyond training that the United States sponsored for Afghans in the 1980's.

 

"One of the problems we had against the Soviets was getting the mujahedeen to be uniform," said an American official familiar with that movement. "We couldn't get them on the same page. When you went to one valley, they fought one way. When you went to the next, they fought another. To the extent these guys were able to level the training and make it consistent, they were on the right track."

This is aggressive, rigorous training that, with regards to explosives and especially TM 31-210 IMPROVISED MUNITIONS HANDBOOK (which was specifically cited in jihadist hands), can still go wrong in insufficiently trained hands:

But officials also noted that the breadth of the camps' curriculum search resulted in uneven quality. Some material was well- chosen, some not... Officials also said even useful references could be problematic. One said that while cautious handlers could use some Special Forces bomb recipes, others would endanger themselves. "People have had to be scraped off of their ceilings after trying these things," he said.

 

The jihadis seemed to know this. One notebook warned: "Make sure that first aid kits are available at all times in order to deal with any mishaps that might result from the performance of this experiment."

 

Whatever the shortfalls, the two tiers of training worked.

The value of interrupted training sanctuaries without asset predation

 

The military models gathered, perfected and delivered to successive jihadist classes in the late 1990s required time, place and human resources for both instructors and qualified students:

All successful military organizations study one another, sizing up threats, identifying weaknesses, copying weapons and tactics. The jihad groups were no exception.

 

Law enforcement officials have described a multivolume set of terrorist instructions, dubbed the Encyclopedia of the Afghan Jihad, as a sort of master guide for the camps. Parts of the encyclopedia were found by The Times at four training sites, and officials said parts of its explosives section were incorporated into classes at the camps.

 

But records from students and teachers also show that most jihad courses lasted several weeks to a few months and that rather than covering the encyclopedia's breadth, stayed intensely focused on small sets of skills. To create those classes, the groups relied heavily on an array of sources obtained from the West: military training manuals, American hunting magazines, anarchist manuals, popular action movies, chemistry and engineering textbooks, and Web sites hawking James Bond-like tricks.

 

Signs of this collection effort are sprinkled throughout their documents. American military trainers who reviewed the jihadi students' notes quickly identified lessons from their own playbooks, including Islamic Movement of Uzbekistan reconnaissance techniques also used by Army Rangers, or four-man weapon deployments and formations — wedges, columns, echelons, lines — that are the Marine Corps standard.

 

One senior military instructor noticed a familiar streak of professionalism in class schedules, a carefully selected mix of lectures, demonstrations and practice. "Wherever they got this, it was modeled after somebody's program"...

 

Again, why isn't the current jihadist community able to produce better device designs for export? I believe that answer lies in both denial of sanctuaries and predation on jihadist human resources. In other words, the number of skilled instructors was severely reduced with the balance redirected to operational roles. Likewise, the traning infrastructure was degraded, reducing the available training syllabus and hands-on field work.

 

That will change once they absorb the lessons of the master bomber.

 

Bibliography is divided into two parts:


  • Preparer Resources
  • Other chronological citations

Preparer Resources

 

FM 5-25 Explosives and Demolitions

Department of the Army

March 1986

Urbanevasion

 

TM 31-210 IMPROVISED MUNITIONS HANDBOOK

(Improvised Explosive Devices or IEDs)

Department of the Army Technical Manual

Headquarters, Department of the Army

1969 – original publication

2007 – Thanks-to-Feinstein's Electronic Edition (v3.0)

Martin Frost

Cryptome (PDF and HTML)

 

TM31-201-1 Incendiaries

Unconventional Warfare Devices and Techniques

Department of the Army

May 1966

 

EOD-FBI Manual

Urbanevasion

[No specific provenance – may or may not be bureau material, appears to be class handouts]

 

Viet Cong Improvised Explosive Mines and Booby Traps

Counterinsurgency Lessons Learned No. 53

DJSM-545-66

Sept 1966

 

Improvised Explosive Devices (IEDs) & Counterinsurgency (COIN) Bibliography


Other chronological citations

 

ANALYSIS-Clumsy but keen: Would-be bombers stir concern

05 May 2010 06:00:52 GMT

Source: Reuters

(repeats piece first issued on May 4)

 

Real-life Hurt Locker: how bomb-proof suits work

By John Pavlus

DVICE

12:00PM on Mar 4, 2010

 

The Ultimate AfPak Reading List

A guide to the most critical readings on Afghanistan and Pakistan.

BY PETER BERGEN

FP

SEPTEMBER 9, 2009

 

Two more arrested over Glasgow airport attack

James Sturcke, Peter Walker, Vikram Dodd, Ian Cobain and agencies

Guardian

2 July 2007 18.35 BST

 

'Police have crystal clear video image of car bomber'

Daily Mail

Last updated at 16:18 30 June 2007

 

Inside Al-Qaeda’s Hard Drive

Budget squabbles, baby pictures, office rivalries—and the path to 9/11

By Alan Cullison

ATLANTIC MAGAZINE

September 2004

 

AFGHANISTAN AND THE FUTURE OF WARFARE: IMPLICATIONS FOR ARMY AND DEFENSE POLICY

Stephen Biddle

Strategic Studies Institute, U.S. Army War College

November 2002

 

A Dutiful Recruit's Notebook: Lesson by Lesson Toward Jihad

By C. J. CHIVERS and DAVID ROHDE

New York Times

March 18, 2002

 

Afghan Camps Turn Out Holy War Guerrillas and Terrorists

By C. J. CHIVERS and DAVID ROHDE

New York Times

March 18, 2002

MIRROR

A U.S. Manual for Explosives

[Pages from TM 31-210]

 

Uniformity, Across Camps

The Islamic groups training recruits in Afghanistan managed to standardize their lessons, bridging ethnic and linguistic divides to ensure that all the soldiers had a similar base of knowledge. The student notebooks, taken from different camps and safe houses, show nearly identical diagrams in lessons like map reading, compass training, basic demolition and weaponry, as in the sight for a rocket-propelled grenade, explained here in Uzbek, Tajik, Arabic and Urdu.

The Jihad Files: Al Qaeda's Grocery Lists and Manuals of Killing

By David Rohde and C.J. Chivers

New York Times

March 17, 2002

ORIGINAL SCROLLED OFF

MIRROR

 

Manual for a ‘Raid’

by Kanan Makiya, Hassan Mneimneh

The New York Review of Books

January 17, 2002

MIRROR

 

Hijacking Letter Found at Three Locations

[Arabic text]

Press Releases

FBI Homepage

September 28, 2001

 

The Al Qaeda Manual

The attached manual was located by the Manchester (England) Metropolitan Police during a search of an al Qaeda member’s home. The manual was found in a computer file

described as “the military series” related to the “Declaration of Jihad.” The manual was translated into English and was introduced earlier this year at the embassy bombing trial in New York.

 

Unexploded Ordnance (UXO): An Overview

Federal Advisory Committee for the Development of Innovative Technologies

October 1996

 

Gordon Housworth



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Collapsing US supply chains preclude independent US action

  #

Collapsing US supply chains preclude independent US action: The intersection of loss of supply chain control and emerging, reemerging threats is a recent presentation outlining the hollowing out of US and EU supply chains and the vulnerabilities that ensue. Current reality is defined as:

  • The People's Republic of China can prevent the US from commencing or maintaining the ops tempo of a future Desert Storm or Operation Iraqi Freedom.
  • If the PRC is the adversary, it can preclude our ability to conclude combat operations.
  • PRC has the ability to induce trap-doors into HW and embedded SW assemblies.

Hollowing of the supply base nationally has mimicked effects in the automotive sector between OEMs and their tier base: 

  • US and Europe have lost control of their defense and commercial industrial supply chains.
  • Exporting capability rather than capacity, the US has increasingly retained only a top tier or integrator role while exporting its tier 2-tier n base.
  • US cannot realistically define discrete and net risk as supply chains are too opaque for identification.
  • Decreasing ability to direct sourcing to less risky tiers.
  • Loss has not come without warning

The full presentation principally draws upon the monograph, Foreign vulnerability inherent in US globalization of its commercial and defense supply chains, 5/6/2008. Readers are directed to Foreign vulnerability for detail and supporting sources that "reasonably constitute a four decade record on globalization." Readers may also consult, Israel was planting malicious chips in US assets before China, 5/20/2008.

When the USSR was the bipolar peer nation state to the US, it could, and did, press Japan over its commercial and military partnership with the US, but unlike China, the USSR never had control of US supply chains. The rare Russian exception besides energy stocks has been US manned access to earth orbit.

 

Legacy constraints in supply chain inertia

 

Wayne Hall, former head of the space shuttle program, now NASA's deputy associate administrator for strategic partnerships, penned a small masterpiece on the importance and the inertia of supply chains in attempting to resuscitate the shuttle. It must be noted that Hall's comments apply generally to many defense systems in current inventory:

One of the first lessons I learned in program and project management is that attention to the details of supplies, vendors, and parts manufacturers will determine success or failure more than anything else that management does... [L]ogistics and supply chain are the unsung pillars on which every major project rests.

 

It is nice to have eloquent oratory and high flown philosophical statements, but the real way that real programs are really controlled is through the money.  When the logistics and supply budget is stopped, the program is over.  Momentum and warehoused supplies can carry on for a short period, but when those are exhausted, its time for the museum.

 

Starting four years ago, the shuttle program in its various projects made "lifetime buys".  That is, we bought enough piece parts to fly all the flights on the manifest plus a prudent margin of reserves.  Then we started sending out termination letters.  About two years ago, we terminated 95% of the vendors for parts for the external tank project, for example.  Smaller, but still significant, percentages of vendors for SSME, Orbiter, and RSRB have also been terminated.

 

A lot of things that go into the shuttle build up are specialty items.  Electronics parts that nobody makes any more (1970's vintage stuff).  Hey, if it works, why invest money in certifying new parts?  Certifying new ones would be even more costly!  Specialty alloys to meet the extraordinary demands of space flight, parts that are made by Mom and Pop shops mostly in the LA basin are norm rather than the exception.  You might think that simple things like bolts and screws, wire, filters, and gaskets could be bought off the shelf some where, but that thinking would merely prove how little you know about the shuttle.  The huge majority of supplies, consumable items, maintenance items, they are all specially made with unique and stringent processes and standards.

 

Our shuttle history tells us that when we try to cut corners, trouble results.  Small, even apparently insignificant changes have caused big problems... There is a long and arduous process to certify a vendor to produce the logistical parts for the shuttle.  Not many companies do this work... A lot of them have been there from the beginnings in the middle 1970s.  So when a Mom and Pop specialty shop gets a termination letter from the shuttle program after 35 years of production and they have other customers, guess what happens?...

 

Where does the money come from?  Where do the people -- who should be working on the moon rocket -- where do they come from? We started shutting down the shuttle four years ago.  That horse has left the barn.

It appears that neither of the current US presidential candidates has read Hale, but to be charitable, one or both may have wisely decided now is not the time to educate voters on logistics and the fact that a nominal five year gap till Orion/Constellation makes the US dependent on Russian Soyuz systems to put men in orbit.

 

Given the changing political landscape, the problem is so severe that NASA has begun to study flying the shuttle beyond its 2010 retirement despite the April 2008 testimony by NASA Administrator Michael Griffin before the Senate Commerce, Justice, and Science Appropriations Subcommittee:

"Everyone's deeply concerned about the gap," [committee chair] Mikulski told Griffin, referring to the often-discussed five-year gap between the scheduled retirement of the space shuttle in 2010 and NASA's new Orion and Ares system that will fly in 2015... Mikulski asked Griffin if this gap could be reduced with additional funding. Griffin replied it would cost at the rate of a $100 million to shorten the schedule by a single month. It would be impossible to shorten the schedule to be earlier than the late fall of 2013, "given the water over the dam behind us," he said...

 

Mikulski told Griffin: "there are some Members in the House who are raising the concept of extending the life of the shuttle until 2015." Griffin replied, "the shuttle is an inherently risky design," with NASA calculating that if the shuttle was flown twice a year for an additional five years "the risk would be about one in twelve that we would lose another crew. That's a high risk." He added, "To fly the shuttle after the space station is completed for any significant length of time I believe would incur a risk I would not choose to accept on behalf of our astronauts." It would, Griffin said, cost around $3 billion a year keep the shuttle flying. If this $3 billion came out of NASA's budget, it could delay the launch of the Orion and Ares system, at a rate of a month's delay for every $100 million that was redirected. "You extend the [five-year] gap, if you fly the shuttle longer," Griffin told Mikulski.

 

[Mikulski replied] "So what you're saying is there is no silver bullet. There is no magic motion available to close the gap." Griffin agreed.

While there is a gentleman's rule to "not mess with the safety of humans in space" and the Russians have stated that they will honor their launch commitments, rising Russian leverage will weigh on a US president in a second Georgian confrontation as it will on Ukraine (also here) and other former Soviet republics that make up the Near Abroad. I see no change in my 2004 and May 2007 forecast that "the common axis of Putin and energy will see Russia attempt to recover its near abroad, expel the US from the energy Stans of Central Asia and create a rift between the US and Europe."

 

The Richter 15 to 30 event

 

The presentation proceeds to describe what I call the Richter 15 to 30 event - the interruption of Taiwanese Original Design Manufacturers (ODMs), including their plants on the Chinese mainland. Unless readers are embedded in the ODM electronics segment, they are generally unaware of the centrality and magnitude of Taiwan in the global electronics market for computers, telecommunications, and modular components. For background, this 2005 pair remains useful:

Writing of Silent Hands Behind the iPhone in 2007, I noted it was a good "primer to the Taiwanese presence in our electronics backbone. Now reconsider the implications of a major earthquake in Taiwan. Then generalize that to any interruption to, or redirection of, this segment":

"The iPhone is a great example of where Taiwan is still strong: reliable sourcing, leading technology and complex integration."... "It's not a surprise that the iPhone would be made here because the food chains for Apple's notebooks and iPods are already in Taiwan... It's a natural progression."...

 

Taiwan's rise as a communications workhorse is part of a decade-long transformation under way on this Chinese Nationalist-controlled island south of the mainland. Already the world's biggest producers of computer components, Taiwan companies like Compal Electronics, in addition to Hon Hai and Quanta [both of whom make iPhones], have used their expertise to branch out into new markets that use many of the same products.

 

The strategy of repackaging - finding new uses for computer components - has paid dividends... By harnessing the ability to cut costs, churn out products quickly and work flexibly with customers, the Taiwan companies have become top makers of cellphones, smartphones, broadband modems, wireless routers, global positioning devices, networking equipment and other gear. They, like companies elsewhere, have also made deep inroads into China, where many of their factories are...

 

Taiwan's evolution from [boards to telecommunications] has gone largely unnoticed in the [US] because companies here make most of their money as made-to-order manufacturers, not sellers of their own brand products. But Taiwan's industrial makeover has helped its companies remain competitive in a world increasingly dominated by low-cost Chinese assemblers and by Japanese and South Korean companies with strong footholds in high-end components like flash memory chips.

A colleague shared this in 2005:

Quanta (biggest customer is Dell), Mitac (builds notebooks, Sun servers, the iPaq for HP, etc), and Inventec (biggest customer is HP) have been somewhat schizophrenic about stepping out of the "tell us what you want and we will build it" ODM model.  Quanta made a bunch of Silicon Valley investments at the height of the boom, mostly for naught.  Inventec is probably the most conservative, [but with] their booming HP business, they are sounding like they will try to chase more ODM business (essentially OEM as known in the auto business but they invest in reference designs that can be mass produced) rather than the IDM (Integrated design/manufacturing) approach ("We designed this really cool product. It has these features, it is better than these competitors, and we can do some customization to fit your requirements")...

 

But all of these manufacturers are constantly looking at ways to expand their business and cut their dependency on Dell, HP, and IBM.

 

My recollection is that Hi Lin Lee, senior vp and co-founder of Quanta went to MIT. [In 2002 an] Apple iBook and the Mac with the dome base... were in his office. Of the later he said with obvious pride "That is my product." As I have said before the growth in manufacturing capacity fueled by the Chinese investment credits goes on for some time.

 

Quanta is not the only one with senior guys with strong connections in the US. Mitac is run by Mathew Miau.  Matt moved to the US as a young teen, worked for Intel as an engineer.  He designed the USART which was a pretty famous and very successful product.  He negotiated a package to transition out of the company by opening Intel Taiwan and had a big role in launching the Taiwan PC manufacturing  industry. With his Intel option proceeds, and his father (who had made a fortune in raw materials if my memory is right) bought a small PC company (Mitac) and turned it into a powerhouse. Synnex, a major us high tech equipment distributor is under the Mitac group.  Matthew is as comfortable (and as well connected) in Silicon Valley as he is in Taiwan... [email]

 

A year ago my friends at Inventec, who built the iPods [said] they enjoyed the volume, but weren't making anything on them.  The Taiwan ODMs are now operating on 5+% gross margins, which would be more tolerable if they weren't spending some much on engineering of their customers' products gratis in order to win the manufacturing business. In general the margins are so thin that the manufacturers have to provide high quality products because a few warranty returns can wipe out any profits. [email]

On reading of Dell's decision to sell its PC factories, I wrote:

The king is dead. Long live the Taiwanese princes. The top tier chain is collapsing but the great OEM/ODM chains are vibrant. I had friends in DEC Asia who were leaving for these early princes, even before [DEC's acquistion by] Compaq. The topic of conversation was 'Do we stay invisibly in place with no name show through or do we go direct? If yes, how?' The opinions appeared to come down on the side of: 'We have no distribution channel. We are not strong enough to challenge Dell, or HP, etc.' That has changed. [email]

Chinese quest for technology independence

 

The Chinese have ceased to be content to stuff components and fabricate assemblies for Taiwanese ODMs. The CCP has made indigenous chip set production a national priority; they want to create a peer competitor to both Taiwan and Intel:

[The] objective for China is to take control of the design and manufacture of vital technology. "Like America wants to be energy independent, China wants to be technology independent...They don't want to be dependent on outside countries for critical technologies like microprocessors, which are [now] a fundamental commodity." Federal laws also prohibit the export of state-of-the-art microprocessors from the United States to China, meaning that microchips shipped to China are usually a few generations behind the newest ones in the West.

 

Despite its late start [China was slow to support microprocessor R&D], China is making rapid progress. The [Institute of Computing Technology] ICT group began designing a single-core CPU in 2001, and by the following year had developed Godson-1, China's first general-purpose CPU. In 2003, 2004, and 2006, the team introduced ever faster versions of a second chip--Godson-2--based on the original design. [Each] new chip tripled the performance of the previous one... [The Godson-3 chip was unveiled in August 2008.]

The technological imperative is not limited to electronics:

No longer content to be the home of low-skilled, low-cost, low-margin manufacturing for toys, pens, clothes and other goods, Chinese companies are trying to move up the value chain, hoping eventually to challenge the world's biggest corporations for business, customers, power and recognition.

 

The government is backing the drive with a two-pronged approach: using incentives to encourage companies to innovate, but also moving to discourage low-end manufacturers from operating in southern China. That step would reverse one of the crucial engines of this country's spectacular economic rise...

 

Chinese firms are expanding into (or buying companies that work in) software and biotechnology, automobiles, medical devices and supercomputers. This year, a government-backed corporation even introduced its first commercial passenger jet, a move Beijing hopes will allow it to some day compete with Boeing and Airbus...

 

China has "a lot of technology locked up in the military, and now the government is reducing budgets and pressing agencies to privatize... So suddenly, a lot of technology people thought didn't exist has come out from behind the curtain."...

 

There are still plenty of obstacles here, including weak intellectual property rights enforcement and a culture of copying or stealing technology from foreign companies or joint venture partners...

Predicting the Second Chinese Exclusion Act

 

What I have come to call the Second Chinese Exclusion Act will exact great commercial hardship on Western firms as China moves to expel foreign firms. The Chinese Exclusion Treaty (1880) and the Chinese Exclusion Act (1882) were racist low points in US history, exacting great hardship on Chinese already in the US and those attempting to enter. The Second Act will be no more palatable to its recipients.

 

Senior Chinese have, in small groups, stated an intent to: 

  • Absorb Western technology through joint venture (JV) and partnering strategies.
  • Slowly make JVs less attractive by progressive tariff and currency policies.
  • Force Western partners from Chinese market.

Multinational offshoring has had two purposes, the second not as well discussed as the first: 

  • Cost reduction, short to medium term.
  • Access to markets, long term.

I am not alone in believing that the Chinese will contain multinational access to its domestic markets, especially in its "pillar" and "heavyweight" industries. See Confluence of thinking on Chinese outsourcing and supply chain risks from DSB and USCC, 11/17/2007.

 

Given Chinese performance to date, multinational access will be limited, perhaps to a third on the market and then decline as China reclaims the then maturing market. The mechanism for expulsion is elegant: standards and administrative edicts. The strategic use of standards, notably indigenous standards, will: 

  • Free China of foreign royalties.
  • Create standards which Chinese products can meet but foreign products cannot.
  • Reverse the royalty stream.
  • Create price/volume advantage for global Chinese goods that overwhelm offshore local production.

Targeted Richter effects on US/EU supply chains

 

I often hear that the Chinese would not interrupt the trans-straits ODM traffic, but we know from experience that events that threaten the CCP or the state are dealt with immediately and firmly regardless of collateral impact or personal distress.

 

If the PRC is presented with conditions it finds intolerable and can degrade a key adversary by non-military means and thereby escape or reduce damage to the mainland, they will do so. Supply chains under Chinese control can be slowed or terminated to prevent the US from commencing or maintaining the ops tempo of a future Desert Storm against any adversary. Many of these interruptions can be cloaked as commercial actions, thereby offering China plausible deniability. In other words, China has become a governor on US actions.

 

One Way Up: U.S. Space Plan Relies on Russia

By JOHN SCHWARTZ

New York Times

October 6, 2008

 

Dangerous Fakes

How counterfeit, defective computer components from China are getting into U.S. warplanes and ships

by Brian Grow, Chi-Chu Tschang, Cliff Edwards and Brian Burnsed

Business Week/In Depth

October 2, 2008, 5:00PM EST

 

Why the ranks of chip makers are thinning out

Dean Takahash

Venture Beat

September 24, 2008

 

Dell Plans to Sell Factories In Effort to Cut Costs

By JUSTIN SCHECK

WSJ

September 5, 2008

 

A Chinese Challenge to Intel

Researchers have revealed details of China's latest homegrown microprocessor.

By Kate Greene

Technology Review

September 02, 2008

 

Nasa 'reviews shuttle shelf-life'

By Paul Rincon

BBC News

Page last updated at 10:59 GMT, 31 August 2008 11:59 UK

 

NASA chief asks: Can shuttle fly after 2010?

Robert Block and Mark K. Matthews | Sentinel Staff Writers

Orlando Sentinel

August 30, 2008

 

NASA is Making Preliminary Plans to Extend Shuttle Launches Beyond 2010

Written by Ian O'Neill

Universe Today

August 29th, 2008

 

Shutting down the shuttle

Wayne Hale

Wayne Hale's Blog

Posted on Aug 28, 2008 10:15:05 AM

 

Russian Actions Reignite Tensions Over Strategic Port in Ukraine

By DAVID L. STERN

New York Times

August 25, 2008

 

After Pullout, Russia Envisions Long-Term Shift

By CLIFFORD J. LEVY

New York Times

August 23, 2008

 

U.S. Sees Much to Fear in a Hostile Russia

By PETER BAKER

New York Times

August 22, 2008

 

In Ukraine, Fear of Being a Resurgent Russia's Next Target

By NICHOLAS KULISH and SARA RHODIN

New York Times

August 17, 2008

Correction Appended

 

As Russian Tanks Roll, Europe Reassesses

By JUDY DEMPSEY

New York Times

August 16, 2008

 

Space shuttle replacement delayed until 2014

This is why a former astronaut should run for president

By Scott Snowden

Register

Published 12 August 2008 10:32 GMT

 

China's Ambition Soars to High-Tech Industry

By DAVID BARBOZA

New York Times

August 1, 2008 

Correction Appended

 

China's Shift on Food Was Key to Trade Impasse

By STEPHEN CASTLE and KEITH BRADSHER

New York Times

July 31, 2008

 

After 7 Years, Talks Collapse on World Trade

By STEPHEN CASTLE and MARK LANDLER

New York Times

July 30, 2008

 

Nasa may hitch a ride on Japanese spacecraft

By Simon Burns

iTnews

22 July 2008 08:37AM

 

Tech woes threaten NASA's Moon plan

Leaked report indicates trouble ahead

By Lester Haines

Register

Published 17 July 2008 10:20 GMT

 

NASA Internal Presentation: CxMPR, Orion Project Office, 2 July 2008

STATUS REPORT

Source: Johnson Space Center

SpaceRef

Date Released: Wednesday, July 16, 2008

Excerpts: FY08 Cost Issue, FY09 & FY10, Orion Summary, Top Risk List CEV [Crew Exploration Vehicle], Technical Performance

 

Space shuttle: 10 flights to go before retirement

JR Minkel

Scientific American

Jul 11, 2008 02:57 PM

 

Mikulski on NASA: "There is No Silver Bullet"

Richard M. Jones

American Institute of Physics

FYI: The AIP Bulletin of Science Policy News

Number 45 - April 11, 2008

 

Shuttle Retirement May Bring Loss of 8,600 Jobs, NASA Says

By WARREN E. LEARY

New York Times

Published: April 2, 2008

 

The Offshoring of Engineering: Facts, Unknowns, and Potential Implications

Committee on the Offshoring of Engineering

National Academies Press

ISBN-10: 0-309-11483-7

2008

Executive summary PDF

 

Silent Hands Behind the iPhone

By KEN BELSON

New York Times

July 18, 2007

 

Taiwan, China lead in huge chip-making growth

TSMC and UMC account for over 50 percent of all foundry capacity in Asia

By Dan Nystedt, IDG News Service

April 06, 2006

 

Taiwan Transforms into IC Development Center

Tech Analysis

Nikkei Electronics Asia - February 2006

 

Taiwan Towers as Tech Innovator

FIRMS INCREASING R&D, CREATING OWN BRANDS TO KEEP AHEAD OF CHINA

By John Boudreau

San Jose Mercury News

22 January, 2006

Original scrolled off

Mirror

 

The Silicon Dragon: High-tech Industry in Taiwan

By Terence Tsai, Borshiuan Cheng

Published by Edward Elgar Publishing, 2006

ISBN 1840642408

 

Overview on Taiwan Semiconductor Industry

(2006 Edition)

Taiwan Semiconductor Industry Association

Rm. 1246, Bldg. 51, 195, Sec.4, Chung-Hsing Road

Chutung, Hsinchu, Taiwan 31015

TEL:+886-3-5913560 FAX:+886-3-5820056

 

A look at China's IC design houses

Amanda Liang, International News Center

Rodney Chan, DigiTimes.com

Friday 16 September 2005

 

Taiwan becomes driving force in single-wafer technology

By: David Chen, Hai Benron , Solid State Technology

Date: August, 2004

 

Working with ODMs: Growth, benefits and challenges

by Adam Pick, Analyst, EMS and ODM Services, iSuppli/Stanford Resources

Electronic Manufacturing Asia

1 July 2004

 

Russia and the Near Abroad Under Putin

Michael Rywkin

American Foreign Policy Interests

DOI:10.1080/10803920390187216

Vol 25, Issue 1, pp.3-12, 2003

 

The Chinese Experience

Becoming American

Bill Moyers

PBS

March 2003

 

Taiwan Goes After the World's Chip Business Already tops in supplying "fabless" customers, two companies on the island are betting billions on a new wafer.

(FORTUNE Magazine)

By Philip Siekman

May 14, 2001

 

Documents on Anti-Chinese Immigration Policy

Archives of the West from 1877-1887

THE WEST

September 1996

I. Chinese Exclusion Treaty, 1880

II. Chinese Exclusion Act, 1882

 

Gordon Housworth



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Foreign vulnerability inherent in US globalization of its commercial and defense supply chains

  #

The US and, and to a lesser degree, Europe have lost control of their defense and commercial industrial supply chains. Exporting capability rather than capacity, the US has increasingly retained only a top tier or integrator role while exporting its tier 2-tier n base. Worse, the US cannot realistically define discrete and net risk as the chains are too opaque for identification and there is decreasing ability to direct sourcing to less risky tiers.

The loss has not come without warning, especially in the seminal analyses of the mid-1980s to early 90s (much of which is cited here) and near-disaster supply chain bottlenecks that nearly sidelined front line equipment during Desert Storm (1990-91).

Having surveyed four decades of research on globalization impacts, we can state that there are virtually no metrics in open source. There are drivers and characteristics but there are no actionable metrics of sufficient robustness to pass the test of falsifiability. At a macro level we are secure that we and some others have the compass right, but actionable information about a specific chain condition and greatest risk at component at tier in the chain is fuzzy at best. Given our supply chain analytic experience, we can see the tracks of bland assumptions without the understanding of how supply networks actually work. Defense and commercial sides of the house share the same problem - insufficient granularity of analysis which if they get there they find that they do not have accurate and timely data. At this point the commercial side generally gives up. The defense side can't so spends much time in Rommel's Wolkenkuckucksheim (Cloud-Cuckoo-Land after Aristophanes). Striped of politeness, almost everyone is guessing although they shroud it in tech speak which pacifies the unknowing.

 

The US manufacturing loss is staggering in its sweep as it includes:

  • Technology (Research Testing Development and Evaluation - RTD&E)
  • Industrial base (tier base capability , knowledge gaining, performance curve and price/volume)
  • Volume (capacity)
  • Availability (conversely product unavailability, product as hostage, withheld or not surged in time of national need)
  • Supply chain (chain complexity masks risky sourcing and possible interdiction)
  • Forensics (undocumented/latent/hostile firmware and/or software additions)
  • Education (learning citadels clustered to engineering and production centers)

Having reviewed analyses of manufacturing globalization for both the defense and commercial sectors, this analyst is of the opinion that the risk to the US has become so great that it should study itself as a reasonable target of economic sanctions (also here), hence the inclusions of citations on that topic. (The Chinese have studied means of countering economic sanctions; can we do no less?)

 

Before globalization there was 'NATO-azation'

 

The issue of dealing with the effects of globalization on US commercial and defense industries has been with us for decades. The 1985 Strategic Materials: Technologies To Reduce U.S. Import Vulnerability, whose advisory panel an Air Force logistics colleague advised me "looks like a 'Who's Who' for the defense department in the 1990's.  Lot of them went on to very senior DoD positions," stated the problem and its complexity well:

Crafting a workable policy [regarding dependence on foreign sources, NATO allies included, for defense material and technology] will be a tricky job.

 

There are three basic policy choices:

  • demand that anything that goes into defense equipment be built in the U.S. from U. S.-sourced components, taking whatever measures are necessary to ensure that all the necessary industries are alive and well in the United States;
  • let the market dictate which industries will be healthy in the United States and look only for the best deals wherever they can be found worldwide; or
  • choose some industries that have to be located in the United States, take appropriate measures to ensure that, and let the rest go with the market.

The first and third require some sort of intervention in the international economy, either supporting the international competitiveness of U.S. companies or protecting, supporting, and subsidizing U.S. companies that cannot otherwise survive. Another approach is to design nothing into U.S. defense systems that cannot be domestically sourced. But this cuts off a great deal of modern technology, a Western strength. In making these choices, the United States will have to decide how dependent we can afford to be, and how much independence we are willing to pay for. If the United States demands self-sufficiency without taking measures to keep U.S. companies alive and competitive, the list of technologies available for defense systems is likely to decrease as time goes on.

 

It will be necessary to decide how to treat dependence on various nations. There are significant differences in being dependent on Canada (already defined as part of the North American industrial base), Britain, our other NATO allies, Mexico, Japan, Korea, etc... Other nations are much less tightly tied to the United States.

 

The high-technology economy is an international one and responds to international market forces. These forces are likely to continue to move industries offshore despite U.S. efforts to will (or legislate) them to stay. In the vast majority of cases, defense business is far too small to provide the necessary clout, particularly when faced with other nations that manipulate their civilian markets to keep their companies healthy. Competition comes from Japan, the smaller Asian nations - Korea, Taiwan, Singapore, etc - and Western Europe...

The US chose the second path by a combination of default and design augmented by partial regulation; Private industry sought performance and integration coupled with higher margin and lower costs. Our current globalization impasse is its direct descendent.

By 2000, the challenges facing the US Air Force were typical of an increasingly globalized and consolidated industrial base:

Between 1990 and 1998, a horizontal and vertical integration took place across all segments of the U.S. aerospace industry. [Driven by a dramatic decline in military aircraft procurement budgets as well as overall defense authorizations since the end of the Cold War,] The number of credible U.S. prime contractors for integrating fighters and bombers fell from seven to two; the number of U.S. missile manufacturers from fourteen to four; and the number of space launch vehicle producers from six to two. By the end of the 1990s, the European defense aerospace industry had also begun to experience a dramatic cross-border consolidation and restructuring. This growing consolidation of defense prime integrators and subsystem suppliers has resulted in increased numbers of strategic and product-specific alliances, international teaming and joint ventures, and cross-border mergers and acquisitions (M&As) among defense firms, together with heightened interest in foreign exports and foreign lower-tier suppliers.

From foreign source to dependency to vulnerability

As early as 1987, US Industrial Base Dependence/Vulnerability. Phase 2. Analysis, had defined three elements of foreign sourcing: (1) a foreign source is a source of supply, manufacture, or technology that is located outside the United States or Canada, (2) a foreign dependency refers to a source of supply for which there is no immediate available alternative in the United States or Canada, and (3) foreign vulnerability, related to foreign dependency. refers to a source of supply whose lack of availability jeopardizes national security by precluding the production, or significantly reducing the capability. of a critical weapon system. While the US has yet to suffer a sustained foreign supplier cutoff "either in peacetime or war," the military and economic balance has now shifted against the US, making it increasingly plausible that the PRC or Russian Federation could directly or indirectly influence 'just-in-time' availability:

One potential scenario simply posits disagreement by the foreign supplier with US policy... Problems such as strikes, political unrest, or natural disasters within the supplier's country are all plausible. Cutoffs might also be created by the supplying nation giving priority to ventures more profitable than DOD contracts, or giving priority to the supplier's home country needs over the United States, especially in times of crisis. Countries external to the supplying country could also create cutoffs - by threatening the supplier, by an overt blockade, or by war. One US study done prior to the end of the Cold War, reminded readers that Japan was within easy bombing distance of the Soviet Union, and thus the USSR could easily cut off critical components for US weapon systems... The USSR test fired two sea-launched ballistic missiles into the Sea of Japan at a time coinciding with Mikhail Gorbachev's April 1991 visit to Japan. Some analysts described the test firings as a "muscle flex" and a "political message for Tokyo." The message, however, has ramifications for the United States also - sources of certain critical supplies are vulnerable to hostility, a situation that creates a possible domino effect on US weapon systems.

Given the shift in manufacturing key component categories from Japan to China, were the US to incur the ops tempo of a second Desert Storm or OIF level endeavor not to Chinese favor, the issue of shortages would not be 'if' but rather 'how many and how soon.' (Nothing has to overt; polite expressions of regret coupled with 'work to rule' responses and the need to service current customers would attenuate/terminate supplies of many critical parts and assemblies needed to sustain the ops tempo.):

Despite the successes of US military weapon systems that used foreign high technology components during the Gulf War, there were moments of uncertainty as to whether the United States would be able to get requested "rush" orders filled for needed components on a timely basis. [On] "nearly thirty occasions, the Bush administration had to call upon foreign governments for help to get delivery of crucial parts for the war effort."... "foreign manufacturers often were reluctant to put the Pentagon's purchase orders ahead of their regular customers' without prompting from their governments, according to officials at embassies here and at the Commerce Department." Of special concern were Japanese suppliers... "The Japanese electronics companies - whose identities have not been publicly disclosed - reportedly said they could not curtail existing commercial contracts, such as orders from VCR, television, and automobile manufacturers, to meet the needs of the US forces in the Gulf." Experts on Japan [also] speculated that Japanese suppliers, in a society geared toward avoiding any military involvement beyond national borders in the post-World War II era, "may have been afraid of domestic political ramifications of favoring military over commercial customers." [An] interview with an unnamed Commerce Department official revealed that the US government "had to 'jump through the hoops' and that the department took the unusual step of asking Japanese government officials at the embassy in Washington for help in prodding Japanese suppliers."

Said of Japan in 1991, the following applies with greater intensity to China. As a calibration, consider a US air and naval intercession on behalf of Taiwan in the Formosa Strait. Leaving aside the likely effort by the Chinese to sink a US carrier battle group, thereby shocking the American populace, one can assume that the entire component supply chain would shut down. Whatever ops tempo the US envisioned would have to come from inventory or alternate supply. Lesser scenarios should have less chain disruption, but a degree of disruption remains high:

The potential for crisis, however, certainly existed and only a common political objective shared by top levels of the US and foreign governments averted more serious problems. The bond between most governments during the war was created by nearly-unanimous outrage over Iraq's aggression; such a bond was both unprecedented and delicate, thus it may be tough to duplicate in the future. Had there not been a common political objective or had the Japanese government, for instance, been more inclined to bow to domestic calls for avoiding contributions to the war effort (and there was considerable pressure within Japan for noninvolvement), it is quite likely the United States would have had to look for other sources to obtain necessary components. Without pre-planning for alternate supply sources, the probability of a favorable resolution would have decreased significantly.

Analogous to mercury accumulation in top tier marine predators, buyers of assemblies, modules and larger finished goods faced with chain opacity will incur rising risk of chain interruption and functional tampering. Without actionable information and the ability to affect chain substitutions, virtually all are now accepting risk by default. See: Confluence of thinking on Chinese outsourcing and supply chain risks from DSB and USCC. From an ICG note:

As we do quite a lot of supply chain analysis, we know why it so often fails, namely the OEM or top tier cannot get the data from their immediate tier who are loath to reveal their chains. Data is shielded, normalized, changed without notification, fictionalized either by surrogate data or simple commercial misrepresentation. Counterfeits add yet another layer on the problem set.

 

From electronic/electrical chain examples we have at hand, many are PRC at tier 2 to tier 5, others are Taiwanese ODMs which means PRC for almost all tiers save design, Japanese chains have PRC, Korean and Singaporean tiers. There are many cases where the OEM or top tier believe that a certain part comes in at tier x in its entirety, but the reality is that a goodly portion comes in PIA down to tier x+3. The PRC presence, either as source or influencer, is overwhelming.

 

Our commercial experience has repeatedly shown that the OEMs don't know what, from where, is in their chains. A common experience is that as the OEM or top tier develops the algorithms of granularity needed to be effective, the data becomes too difficult or costly to obtain. If the OEM demands an identified tier x validate volume and pricing as stated by the purchasing tier (tier x-1), the tier x will validate lest they run afoul of their purchasing tier.

 

As automotive OEMs are phasing out Full Service Suppliers (FSS) by their recognition that they were enduring margin without equivalent value, defense sector firms are enthusing over Performance Based Logistics (PBL) structures which are beginning to blind Defense Logistics Information Service (DLIS) as to what it in a chain and conceivably debase the value of a National Supply Number (NSN). (It should be remembered that DLIS rose from "the World War II era when each of the Military Services operated independently and maintained a separate supply system and procedures for cataloging their items of supply [in which] many items were given a different name by each of the services, making efficient use of available stock impossible.")  [As an aside, buying "Power by the Hour" (PBH) has its merits (also here) but it is disconcerting to see how contractors perceive its profitability.] [ICG note]

Inability to divorce supply chain access from mercantile efforts

Writing in 2004:

The PRC is preoccupied with the US given it current dominance in Asian and global affairs, and see it as the principal "international danger" able to "confront and complicate China's development and rising power and influence in Asian and world affairs." China is mindful that three nations that sought to overturn the prevailing international order of their day, Weimar Germany, Imperial Japan, and the Soviet Union, were punished by an allied coalition of established nations. While I've not see it in print, I cannot but note that the leader of the winning coalition in each case was the United States, a fact that I cannot imagine has been lost on the Chinese.

China is well into the process of creating a mercantile, rather than fungible, market for raw materials that is expressly grounded on the inability of the US or US allies to interdict it. (China's growing mercantile net is of keen interest to this author, but lest I be accused of China bashing, items of equal weight are a Russian kleptocracy class armed with the energy weapon and the implosion of the US Pre-K through 20+ education structure.) See:

Chinese mercantile highlights of interest to this author are:

  • Strategic plan creates mercantile structure that secures energy stocks, raw materials, and crops.
  • Cannot be interdicted by the US or its allies.
  • Delivers export markets for commercial and military production, redirects regional elites to study in China, and extracts diplomatic obedience.
  • Sends large groups of diplomatic and consular agents that meet counterparts at each level of the target country's bureaucracy.
  • Promotes infrastructure projects using Chinese firms, creating a camouflaged posting for People's Liberation Army (PLA) assets.
  • Veiled PLA works have common pattern: tidewater port presence offering partial or complete opaqueness connected by a strassendorf (street city) style of satellite towns connected by new roads to a processing plant at the primary extraction asset, e.g., coal, oil, minerals, timber, etc.

Taken together with China's regional economic might, the PRC is demonstrably capable of building the regional relationships needed to eject the US and in the process become the dominant mercantile center of an Asian trading block that includes Asia's "most vibrant economic sub-region" (China, Hong Kong, Taiwan, South Korea, and Japan).

While I freely admit this macro level view lacks granularity and has yet to be submitted to the test of falsifiability, I do not believe it can be removed from a discussion of sustained supply chain access.

 

A unitary threat exceeding combined prior Soviet and Japanese threats

Economic power is the foundation of military power. The most important single indicator is GDP. Like defense budgets, however, GDP provides only a limited picture of power. It says little about the composition of the economy, such as whether it is spearheaded by leading sectors or dominated by old and declining ones. Other important variables include human capital and technology. The best readily available measure of human capital is the average year of educational attainment. For technology, the best indicator is per-capita expenditure on research and development.

The US now faces a potential threat of chain disruption from the PRC greater than that presented by combined Soviet espionage efforts directed against the US technology base, military, dual-use and commercial, and Japanese commercial inroads against a wide range of commercial products, notably electrical and electronic systems, that were conceived in the US:

  • In the case of the Soviets, the US did not cede manufacturing and design efforts wholesale to the USSR; the Russians had to employ economic espionage (see also B.R. Inman's Senate statement) to get technology and equipment otherwise embargoed to them.
  • In the case of the Japanese, the US had an exceptionally strong commercial competitor periodically balanced by a pro-US government that recognized its privileged place under a US defense umbrella which allowed it to devote its GNP to commercial pursuits; when it was essential to US interests, Tokyo would intervene on our behalf. See Refining a China forecast. (It was an unwritten rule of the Nixon administration that the Japanese were to be allowed to dominate electronics markets in return for their unwavering support of US diplomatic initiatives.)

I submit that the PRC will continue to strengthen the independence its own strategic supply chains, a condition that the US/EU have aided by seconding wholesale the manufacture, now design, and in the offing, unique product standards, to the Chinese. A current example of this effort is the gaining of indigenous, as opposed to Taiwanese owned, semiconductor device fabrication capacity from wafer fab through deposition, removal, patterning, and properties modification.

As for the US/EU, the de facto 'sole sourcing' of much of the US and elements of the EU industrial base to China has already rendered its manufacturing base into Chinese hands at multiple tiers, many of which, as noted above, are opaque to the top tier, integrator and ultimate buyer. Similarly, the export of much of its design process for future products to China-based R&D hives have increased the potential for IP predation and the appearance of peer Chinese competitors before the US/EU products reach market.

 

Just as the Soviet Union pointedly pressed Japan over its commercial and military partnership with the US, so will China both direct its domestic suppliers to comply while pressing Taiwan, Japan and Singapore when any of those states significantly work against Chinese Interests.

 

We have already seen two examples of that pressure, one in Japan and the other in the US. Japan squelched what it described as a 'national security' IP theft from Denso, which is itself a repeat of the humiliation that Cisco received at the hands of Huawei and the PLA, i.e., suppress litigation or your commercial interests in China suffer. In each case, once matters became public, and in the case of Cisco went litigious, the Chinese were able to apply commercial pressure on Cisco and Toyota-Denso to relent or suffer immediate penalty. See two items: Prediction: the Cisco-Huawei IP debacle repeated itself with Denso, and likely for the same reasons and A tipping point in intellectual property protection?

 

I submit that both the US government and private industry would find it instructive to receive the equivalent of the Russia's gas embargo to the Ukraine who surprised all by continuing to tap their allotment, thereby plunging the EU into shortage. European energy sourcing directions shifted in the moment with reliable sourcing and self-sufficiency rising in relation to cost as prime issues.

 

I further submit that the US needs to adopt the Toyota/Denso model of retaining the capacity to design and manufacture a portion of the annual buy of everything that they purchase. Toyota/Denso is the only significant automotive OEM to retain that capacity which also gives Toyota leverage with its suppliers by its understanding the technological, design, manufacturing, component pricing and supply chain tier structure of what it procures.

 

This process was proposed, at least for the defense sector in the 1980s but was not acted upon. In the interval, the US, much like the other automotive OEMs has already surrendered much of its process technology in the form of joint ventures, outsourcings and tier manufacturing, leaving the Chinese only to target mathdata and key design efforts not sourced to the tier base.


Chicken Little's sky may be falling but it is does not fall uniformly


If at a macro level it is plausible that the US/EU are subject to systematic supply chain interruption/embargo by the PRC at the commercial and dual-use level, what is the status for defense items given the near misses of Desert Storm? How do we validate (falsifiability) and prioritize investigation in order to identify the most essential chain elements? Even the salient works of the 1980s-early 1990s were imprecise on granular means of analysis. DoD has been providing guidelines "for evaluating, on a case-by-case basis, the need for Government action to preserve industrial capabilities vital to national security" for some time. Witness the 1996 Assessing Defense Industrial Capabilities handbook. The problem was then, and appears to remain, one of data, rigorous trigger thresholds and chain transparency below the DoD vendor.

It is with some interest that DoD appears to believe that its key systems are intact. A three year 2006 National Research Council effort on Critical Technology Accessibility attempted to answer two questions:

  • What products/components/technologies currently being solely procured from foreign suppliers could significantly disrupt U.S. defense capabilities if access to them were denied (through conflict, embargo, treaty, etc.)?
  • What emerging technologies/products that, if the United States chooses not to pursue domestic production, could significantly disrupt U.S. defense war fighting capabilities if access to them were denied?

In which the NRC Committee:

looked for but did not find an existing, exhaustive database of foreign products/components being procured by the Department of Defense (DoD) and decided to not attempt to develop such a database on current foreign sourcing across the vast numbers of DoD systems. Nor did the committee assess, for each foreign component, the impact of denial on operational capability or try to understand the particular mitigation opportunities and consequences. Finally, it did not develop a collective assessment of the technological and industrial trajectories of emerging technologies that promise to be key to our nation's security. The size and scope of such an effort would have exceeded the time and resources available to the committee, and it became clear from the information provided to it and from its deliberations that this was not the right approach.

In the absence of data, the NRC committee:

did listen to government plans and perspectives, discussed the issues with recognized experts, and independently reviewed source material and past literature. In addition, the members of the committee arrived with substantial background, service, and expertise in these matters.

Without intending to flip, they guessed, or as you prefer, SWAGed. Without data, chain transparency, metrics and algorithmic analyses, how could they do better? We find Fortune Fifty firms in similar predicaments with their supply chains.

Despite these limitations, the NRC Committee was confident that:

Based on the information they received and their own knowledge, committee members were unable to identify any product or technology currently being exclusively procured from a foreign supplier that could significantly disrupt U.S. capabilities or operations should it suddenly become unavailable...

 

If the ]US] were to become strategically dependent on a foreign industrial base for items that are critical or for which the regeneration of a U.S. industrial base would take a long time, the risk would be unacceptable. The committee does not see any signs of that at this time, but the possibility should be taken into account when determining what the U.S. industrial base needs to be for defense purposes. The committee identified four areas of future technological and industrial advancement that warrant discussion: (1) information technology (IT) components; (2) IT services, which include many forms of the capability to manipulate, store, and exploit data and information; (3) nanotechnology; and (4) biotechnology. The committee also identified another area of concern, systems integration capabilities.

The 2006 NRC Committee text strongly echoed, and possibly accepted the findings of, a 2004 Study on Impact of Foreign Sourcing of Systems that "contacted a total of 806 prime contractors and first and second tier subcontractors in order to collect and evaluate information" for systems:

shaped by the recent experiences in Operations Enduring Freedom and Iraqi Freedom. Those operations were conducted largely as "come-as-you-are" conflicts with the combat platforms already deployed to our forces; and they consumed significant quantities of precision guided munitions. As a result, this study is focused on those items that were or would be in high demand and/or consumed during similar future operations.

In the absence of rigorous means and metrics coupled with our case work in supply chain analysis, we question the findings of that 2004 effort:

  • Foreign sources provide limited amounts of materiel for the identified programs.
  • Utilization of these foreign sources for these programs does not impact long-term readiness.
  • Utilization of these foreign sources does not impact the economic viability of the national technology and industrial base.
  • In most cases, domestic suppliers are available for the parts, components, and materials provided by the foreign sources.
  • The results of this study are consistent with recent related studies.

This voluntary survey went down to tier two, identifying a total of "73 first, second, and third tier foreign subcontractors" from Austria, Belgium, Finland, France, Germany, Israel, Italy, Japan, Malaysia, New Zealand, Netherlands, Russian Federation, Singapore, Spain, Sweden, Switzerland, Turkey, and the UK. (DoD has been habitually comforted by UK subs, after that NATO and friendlies.) This analyst is pleased that the questionnaire went to tier two, but the report seems to treat 'tier two' (from any country) as the edge of the world after which one needs to look no further.

Also the test characteristics seem vague, looking to the past ("Supply disruption is not likely since the current suppliers have demonstrated reliability in the past..."), rather than to the future. There was also a repeated implication that if the dollar amounts were small that the risk was low as opposed to cessation of component access regardless of cost. ("Collectively, foreign subcontracts represent about four percent of the total contract value and less than ten percent of the value of all subcontracts for these programs.")

 

The report did not reveal or imply any further granular analysis. Based upon our supply chain analysis, this analyst would want more rigorous analysis, look at lower tiers and other chain characteristics before issuing a similar pronouncement.

Returning to the 2006 NRC report, its recognition of the changing nature of the supply base harkens back to the good works of the 1980s:

The impact of component denial is not a static estimate. The risks entailed in depending on a foreign-produced component are embedded in the strategy of supply management and the diversity of the impacted operational system or force. The size and power of the globalized commercial marketplace are such that we must find a way to exploit the marketplace's value for our security. The risks and benefits of this exploitation are at least as much an issue of acquisition and logistics strategy as they are of estimating foreign intent. The viability of the future assured domestic supply of critical components for the DoD is dependent on the health of the U.S. industrial base in these sectors.

Its recommendations to Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L)) and DIA are interesting, although some are unworkable while others are likely to be ineffective:

  1. [D]evelop a system for monitoring the risks of component unavailability within the procurement and operating elements of DoD... [ICG comment: Having not worked before, and with no better tools and metrics on offer, how will it work now?]
    • A self-certification approach by USD(AT&L) should direct the services and defense agencies to annually prepare a product and supply chain assurance report that identifies important vulnerabilities, potentially significant operational consequences, and recommended mitigation actions... [ICG comment: Self-certification rarely, if ever, works as bureaucracies are loathe to mark themselves deficient; even less likely without clear means and metrics.]
    • [A]nalyze these annual reports to identify DoD-wide vulnerabilities that might not be detected by the individual services and agencies and to warn of worrisome trends in the integrity of the supply chain, ensuring it is not compromised by foreign supply sources... [ICG comment: Unlikely to work as the certifications are suspect, and no metrics are proposed.]
    • [ICG comment: There are, however, some useful questions which could lead to metrics:
      • Where there is a lack of war reserves or stockpiles.
      • Where a weapon system is uniquely in the U.S. inventory and therefore cannot tap into worldwide depots.
      • Where developing an alternative source of supply requires significant lead times.
      • Where the DoD has developed sole-source, single-solution capabilities.
      • Where critical technologies have migrated offshore or been developed there in their entirety.

  2. [D]evelop a system for monitoring U.S. industrial health in strategically important global commercial market sectors that are critical to the availability of components for DoD... [ICG comment: Fine, but how and by what means and metrics?]
  3. [O]organize a systematic method of assessing the health of military systems integration in and for the DoD as well as that of potential coalition partners and adversaries... [ICG comment: Again, how and by what means and metrics?]

The foreign dependency analysis that this analyst would like to see is a Joint Logistics Commanders' 1986 report, A Study of the Effect of Foreign Dependency, summarized in GAO/NSIAD-90-48, that "reviewed 13 DOD weapon systems and found dependencies1 on foreign sources in 8 of them with severe problems in 6. According to the study, these dependencies could result in a total cut-off of the production of these items as early as 2 months into a war mobilization effort for a period lasting from 6 to 14 months.":

To obtain information regarding the lower subcontractor/vendor levels, for 12 of the 13 weapon systems reviewed, the project team performed a limited survey of the market structure supporting the systems. That is, for each of the 12 systems, program officials were asked to identify 5 subsystems and components at the next lower production tier meeting certain criteria2 and this identification continued through the lower production tiers down to the level of basic materials. For the other system, the Sparrow missile, a complete vertical tier analysis was done.3

 

1 A foreign dependency, as defined in this study, is an immediate, serious logistics support problem that affects the combat capability of the United States because of the unavailability of a foreign sourced item.

2 Each subsystem or component had to be (1) complex enough so that the program officials were unable to categorically state that it did not contain any foreign manufactured items and (2) critical enough to production, and complex enough to produce, so that its loss would pose serious problems in meeting production schedules

3 A vertical tier analysis identifies critical items acquired from foreign sources for an individual weapon system down through the tiers of suppliers and evaluates possible production constraints at each level.

Going forward, RAND's effort to assess industrial impacts identified a typology of "cross-border business relationships and activities" then, and still, prevalent in the defense aerospace industry:

  • Cross-border shipments of finished platforms, systems, or major subsystems
  • Licensed coproduction
  • Foreign Military Sales (FMS) coproduction
  • "Partnership" coproduction
  • Codevelopment

All five were supported primarily by "prime/subcontractor [by far and away the leader], marketing agreement, team, joint venture, and parent/subsidiary" structures while the latter three usually involved "relatively greater level of collaboration among participating firms."

 

RAND also segmented USAF objectives relevant to globalization into three categories (economic-technological, political-military and national security-viability) and identified program characteristics it said showed "the most promise for promoting the potential military-political and economic benefits of globalization." This analyst notes that those same characteristics also made it possible to individually and incrementally transfer the US technology base. Note that the primary driver is the defense firm not the government; all other drivers follow:

  • voluntarily structured and often initiated by defense firms rather than by governments on the basis of internal business calculations of market conditions and best business practices.
  • painstakingly structured to satisfy the existing U.S. arms export and technology security regulatory regime and CFIUS.
  • often focus on promoting existing products or modifications thereof, or on specific product market sectors.
  • frequently focus on subsystems, munitions, or discrete components or areas rather than on large, complex programs for the development of entire weapon system platforms.
  • designed to gain and expand active reciprocal market access through new programs.
  • often motivated by a desire to add to a company's product portfolio a highly competitive product in a market sector dominated by another firm or firms.
  • characterized by mutual perception of balanced and complementary bilateral market access opportunities and technology transfer.
  • most aggressive and innovative among these relationships depend on continued reform of the U.S. export control regime in order to achieve their full potential.

RAND’s defense globalization conclusions from 2001 have only accelerated (while they have exploded exponentially in the commercial sector):

  • Numerous innovative cross-border strategic market sector agreements initiated by U.S. and foreign companies are emerging.
  • U.S. aerospace firms are not significantly increasing their acquisition of wholly owned subsidiaries of foreign defense aerospace firms.
  • Teaming and joint ventures with non-UK and non-Europe-based firms are increasing.
  • U.S. industry collaboration with one country's firm increasingly means collaboration with many countries' firms.
  • Consolidated European and other foreign firms mean potentially more equal partners as well as stronger competitors.
  • European and other foreign firms seek U.S. market access but resent barriers.
  • European and other foreign firms view the acquisition of U.S. firms as the most effective means of penetrating the U.S. market.
  • Non-European foreign firms are forming strategic relationships with European and U.S. firms, potentially enhancing competition but complicating standardization and interoperability objectives.
  • European and other foreign industry consolidation present U.S. government and industry with unprecedented opportunities as well as risks.

Yet all of the above are drivers and characteristics which may yet yield metrics, but do not now offer the analyst an actionable means of identifying trigger thresholds.

 

Where are the metrics?

 

Metrics in open source have been difficult to obtain. An effort was made by King and Cameron in 1974 and updated in 1977. Their work was reprised, and remains online, in Appendix A of Strategic Materials: Technologies To Reduce U.S. Import Vulnerability.

 

A more intriguing effort, Conservation, Integration and Foreign Dependency: Prelude to a New Economic Security Strategywas done by David Leech, then at TASC, now Northrop Grumman, in 1993. His was the sole search result on "foreign vulnerability index." Leech proposed the use of Herfindahl-Hirschman Index normally used in anti-trust litigation to "measure the worldwide supply concentration of items, both overall for firms and with firm market shares grouped by country of origin." Along with risk factors it is one of the methods noted in INDUSTRIAL BASE: Assessing the Risk of DOD's Foreign Dependence, GAO/NSIAD-94-104.

 

This author found Leech's approach of sufficient interest to post a fair use excerpt of the GeoJournal piece, with footnotes, dealing with its Foreign Vulnerability Index (FVI). I believe it reasonable to say that Leech believes that:

  • The King and Cameron approach, as with many engineering approaches, will not pass the test of falsifiability.
  • Moran's 4/4/50 rule, which states that if four foreign firms or four nations control more than 50 percent of an international market, that market is considered "vulnerable" and should be monitored, might be a Herfindahl threshold value.

  • The essential problem of assessing the potential for 'concerted effort' in the anti-trust realm is analogous to the essential problem of assessing 'concerted effort' by nations and their industries to deny the US access to their products, services or technologies.
  • Vulnerability is a narrow consideration having to do with tightly defined markets for products and services.

It remains to be seen if Leech's approach falls victim to the problem we frequently see in supply chain analysis, namely that the complexity issue is so great that cost effective, perishable data is not available. I fear that may well be the case, hence the value of inserting a Design Basis Threat (DBT) analysis as we must have actionable values in a low data environment and be able to defend them. See:

Still, Leech is the strongest approach to metrics that this author has seen and deserves exploration anew.

 

Postscript: The Appendices (actually Vol. 2 issued in 1990) of the 1985 Strategic Materials analysis had a specific case study of the strategic value of the carbon fiber market, Case Study: The Advanced Composites Industry.

 

Leaping forward to the present, we see aviation/aerospace, industrial, sporting goods and automotive driving a robust market:

Over the last several decades, the global market for carbon fiber has grown about 12%. Industry experts expect this market to reach $0.9 billion by the year 2010 (around 50 million lbs), with the market for finished carbon fiber reinforced composites parts growing to $9.9 billion. The price of carbon fibers is expected to reach around $5/lb in 2008, a significant reduction in the $150/lb price in 1970 when the market was only around several million lbs.

 

Aerospace markets have led recent demand and are expected to grow at a 19% compounded annual growth rate (CAGR) through 2010. However, industrial applications are taking off, too, with a total combined CAGR of 14% through the end of the decade (this segment currently accounts for around 60% of the current demand). Sporting goods CAGR is estimated at 5% over the same time period, resulting in a total overall projected growth rate of a robust 13%. Wind energy could become the second largest market sector after aerospace by 2010. The following table summarizes some of these applications.

In this thriving environment, the last principal US producer of Acrylonitrile (AN or ACN), the precursor to Polyacrylonitrile (PAN) (See carbon fiber value chain) which is the basis for all aerospace/high end carbon fiber, has passed into foreign hands.

 

Apocryphal stories to the contrary, frogs are smart enough to jump from water whose temperature is elevating; in this skill of self-preservation, frogs are smarter than governments, corporations and self-interested political elites who will stay in the water until it is too late. Once again, low cost has proven not to be low risk.

 

Bibliography Note: While the following list of citations is not exhaustive, I submit that they reasonably constitute a four decade record on globalization and are a good jump point for further investigation.

 

Crafting A Contractor PBL Organization

By John Kotlanger & Ron Giuntini

Performance Based Logistics

29 April, 2008

 

PRC still expanding sub fleet: analysts

THREAT: Many security experts say that China's main objective in upgrading its submarine fleet is the ability to delay or deter US intervention on behalf of Taiwan

NY TIMES NEWS SERVICE, BEIJING

Taipei Times

Tuesday, Feb 26, 2008

 

Strategic Materials

Final Report, Spring 2007 Industry Study

The Industrial College of the Armed Forces, NDU

2007

 

'Power by the Hour': Can Paying Only for Performance Redefine How Products Are Sold and Serviced?

Sang-Hyun Kim, Morris A. Cohen, and Serguei Netessine

Wharton School, University of Pennsylvania

Knowledge@Wharton

February 21, 2007

 

Critical Technology Accessibility

Committee on Critical Technology Accessibility, National Research Council

National Academies Press

2006

Appendix C - Previous Reports on Globalization and the U.S. Military Industrial Base

 

PERP Program - Acrylonitrile

New Report Alert

Nexant

November 2006

 

Letter from China: Is it a 'peaceful rise'? U.S. shouldn't bet on it

Howard W. French

IHT

APRIL 20, 2006

 

Russia and Ukraine Reach Compromise on Natural Gas

By ANDREW E. KRAMER

New York Times

January 5, 2006

 

Measuring National Power

Gregory F. Treverton, Seth G. Jones

Intelligence Policy Center (IPC), RAND National Security Research Division (NSRD)

ISBN: 0-8330-3798-6

2005

 

Measuring vulnerability to U.S. foreign economic sanctions: focused sanctions reduce costs to business.

Askari, Hossein; Forrer, John; Hachem, Tarek; Yang, Jiawen

Business Economics

VOL 40; NUMB 2, pages 41-55

April/1/2005

MIRROR

 

Sanctions Assessment Handbook

Humanitarian Information Centre (HIC)

UN Office for the Coordination of Humanitarian Affairs

2004 last update

 

VALUE CHAIN OF CARBON FIBERS: Issues associated with production, conversion, and supply of PAN carbon fibers into high volume applications.

Presented by: Martin Kokoshka

Grafil Inc.

March 2004

 

Study on Impact of Foreign Sourcing of Systems

Office of the Deputy Under Secretary of Defense for Industrial Policy

January 2004

 

Speed Kills: Supply Chain Lessons from the War in Iraq

by Diane K. Morales and Steve Geary

Harvard Business Review

November 2003

OPEN SOURCE MIRROR

 

Positioning Your Company for Defense Department Work

Helping Remanufacturer's of Service Parts Capture A Highly Profitable New Source of Revenue Through Performance Based Logistics (PBL)

John Kotlanger

November 2, 2003

 

Background Paper of the Millennium Project Task Force on Science, Technology and Innovation

Smita Srinivas et al

United Nations Development Programme (UNDP)

April 18, 2003

 

Going global: U.S. government policy and the defense aerospace industry

Mark A. Lorell, Julia Lowell, Richard M. Moore
RAND MR-1537

ISBN 0-8330-3193-7

2002

 

Certain Issues on China Countering Future Economic Sanctions

By Jiang Luming

The (Chinese) National Defense University

Military Economics Study, November 2001

 

Was America hunting for a new killer submarine?

Global Intelligence Update/Asia Times

April 6, 2001

 

Measuring National Power in the Postindustrial Age

By: Ashley J. Tellis, Janice Bially, Christopher Layne, Melissa McPherson

RAND

MR-1110-A

2000

 

Analyst's Handbook - Measuring National Power in the Postindustrial Age

By: Ashley J. Tellis, Janice Bially, Christopher Layne, Melissa McPherson, Jerry M. Sollinger

RAND

MR-1110/1-A

ISBN/EAN: 0-8330-2803-0

2000

 

Interpreting China's Grand Strategy: Past, Present, and Future

By: Michael D. Swaine, Ashley J. Tellis

RAND

MR-1121

2000

 

How Long Do Economic Sanctions Last? Examining the Sanctioning Process through Duration

Sean M. Bolks, Dina Al-Sowayel

Political Research Quarterly, Vol. 53, No. 2, pp. 241-265

DOI: 10.1177/106591290005300202

2000

ABSTRACT

PDF

 

Task Force on Globalization and Security

Defense Science Board

December 1999

 

The Impact of Economic Sanctions on Health and Well-being

by Richard Garfield

Relief and Rehabilitation Network (RRN)

Overseas Development Institute

RRN Network Paper 31

ISBN: 0-85003-435-3

November 1999

 

Overview and Analysis of the Economic Impact of U.S. Sanctions With Respect to India and Pakistan

James Stamps, Project Leader

U.S. International Trade Commission

Investigation No. 332-406

Publication 3236 September 1999

 

Assessing Defense Industrial Capabilities

DoD Handbook 5000.60-H

Under Secretary of Defense for Acquisition and Technology

April 1996

 

INDUSTRIAL BASE: Assessing the Risk of DOD's Foreign Dependence

Report to the Chairman, Subcommittee on Defense Technology, Acquisition, and Industrial Base, Committee on Armed Services, U.S. Senate

GAO/NSIAD-94-104

April 1994

 

Conservation, Integration and Foreign Dependency: Prelude to a New Economic Security Strategy

David P. Leech

The Analytic Sciences Corporation (TASC)

GeoJournal

Volume 31, Number 2, October, 1993

pp. 193-206

Abstract and order info

FAIR USE excerpt of its Foreign Vulnerability Index (FVI)

 

US Procurement of Weapon Components from Foreign Sources: Policy Implications

Guy J. Fritchman

Major, US Air Force

USAF Research Associate

Program in Arms Control, Disarmament, and International Security

January 1993 (written during spring 1991)

 

Building Future Security: Strategies for Restructuring the Defense Technology and Industrial Base

Office of Technology Assessment

OTA-ISC-530

NTIS order #PB92-208156

June 1992

 

A CALL TO LIFT ECONOMIC SANCTIONS AGAINST IRAQ

Henry B. Gonzalez, (TX-20)

(House of Representatives - June 24, 1991)

[Page: H4929]

 

Industrial Base: Significance of DOD's Foreign Dependence

Report to the Chairman, Subcommittee on Technology and National Security, Joint Economic Committee, U.S. Congress

House of Representatives

GAO/NSIAD-91-93

January 1991

 

The Globalization of America's Defense Industries: Managing the Threat of Foreign Dependence

Theodore H. Moran

International Security, Vol. 15, No. 1, pp. 57-99

Summer 1990

 

Technology and Competitiveness: The New Policy Frontier

B.R. Inman and Daniel F. Burton, Jr.

Foreign Affairs

Spring 1990

 

Holding the Edge: Maintaining the Defense Technology Base - Vol. II, Appendices

OTA-ISC-432

NTIS order #PB90-253345
January 1990

 

Industrial Strength Defense: A Disquisition on Manufacturing, Surge and War

Martin C. Libicki

National Defense University

ADA228966

1990

 

Arsenal of Democracy in the Face of Change: Economic Policy for Industrial Mobilization in the 1990s

D. J. Bjornstad, ORNL Principal Investigator, et al
OAK RIDGE NATIONAL LABORATORY
ORNL/TM-11271
December 1989

 

Industrial Base: Adequacy of Official Information on the U.S. Defense Industrial Base

Report to the Chairman, Subcommittee on Legislation and National Security, Committee on Government Operations, House of Representatives

GAO/NSIAD-90-48

November 1989

 

Holding the Edge: Maintaining the Defense Technology Base

Office of Technology Assessment

NTIS order #PB89-196604
April 1989

 

US Industrial Base Dependence/Vulnerability. Phase 2. Analysis,

Martin Libicki,; Jack Nunn, Bill Taylor

Mobilization Concepts Development Center

National Defense University

ADA189330

NOV 1987

 

US Industrial Base Dependence/Vulnerability. Phase 1. Survey of Literature,

Roderick L. Vawter

Mobilization Concepts Development Center

National Defense University

ADB118637

DEC 1986

 

A Study of the Effect of Foreign Dependency

The Joint Logistics Commanders

Department of Defense,

(Contact No. F33600-85-C-0293), March 1986

Item is often cited, but no direct citation appears.

Brief summary of its foreign dependency analysis contained in: Industrial Base: Adequacy of Official Information on the U.S. Defense Industrial Base

 

Strategic Materials: Technologies To Reduce U.S. Import Vulnerability

Office of Technology Assessment, OTA-ITE-248

NTIS order #PB86-115367

May 1985

Appendix A - Review of Previous Lists and Methods of Selection

Strategic Materials: Technologies to Reduce U.S. Import Vulnerability

Appendix E - Case Study: The Advanced Composites Industry

 

Scientific Communication and National Security

Panel on Scientific Communication and National Security, National Academy of Sciences, National Academy of Engineering, Institute of Medicine

National Academies Press

ISBN-10: 0-309-03332-2

1982

 

Appendix H: Statement of Admiral B.R. Inman for the May 11, 1982, Senate Governmental Affairs Subcommittee on Investigations Hearing on Technology Transfer (140-142)

 

Materials Vulnerability of the United States - An Update

Alwyn H. King

Strategic Studies Institute, U.S. Army War College

April 1977

Via NTIS

Order info

 

Materials and the New Dimensions of Conflict

Alwyn H. King and John R. Cameron

Strategic Studies Institute, U.S. Army War College

December 1974

Via NTIS

Order info

 

Gordon Housworth



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Semi-autonomous "killer robots" are already within reach of asymmetrical attackers

  #

As part of my work revolves about inverting toys, technical gadgets, and industrial "found objects" into asymmetrical weapons, I was attracted to Noel Sharkey's presentation at RUSI's The Ethics of Autonomous Military Systems as well as his earlier efforts in venues such as Robot Wars and Techno Games. I have come to see Sharkey inhabiting the intersection of engineering, the application of engineering and ethics of application:

Most robots currently in combat are extensions of human fighters who control the application of lethal force. When a semi-autonomous MQ-1 Predator self-navigated above a car full of al-Qaida suspects in 2002, the decision to vaporise them with Hellfire missiles was made by pilots 7,000 miles away. Predators and the more deadly Reaper robot attack planes have flown many missions since then with inevitable civilian deaths, yet working with remote-controlled or semi-autonomous machines carries only the same ethical responsibilities as a traditional air strike.

But fully autonomous robots that make their own decisions about lethality are high on the US military agenda. The US National Research Council advises "aggressively exploiting the considerable warfighting benefits offered by autonomous vehicles". They are cheap to manufacture, require less personnel and, according to the navy, perform better in complex missions. One battlefield soldier could start a large-scale robot attack in the air and on the ground.

One should never underestimate the lift of a headline grabbing title; A brief Reuters item called, Killer robots pose latest militant threat, have recently ricocheted Sharkey's concerns around the web:

[Sharkey] believed falling costs would soon make robots a realistic option for extremist groups. Several countries and companies are developing the technology for robot weapons, with the U.S. Department of Defense leading the way...

"How long is it going to be before the terrorists get in on the act? With the current prices of robot construction falling dramatically and the availability of ready-made components for the amateur market, it wouldn't require a lot of skill to make autonomous robot weapons." Sharkey said a small GPS-guided drone with autopilot could be made for about 250 pounds ($490).

Writing to Sharkey:

I support your contention and submit that it will happen sooner that the high street press assumes and, if previous al Qaeda operational practices are any guide, robots will come in swarms to both confuse and overwhelm defenders and maximize target damage. [email]

I cited a trio of short weblog items I wrote in April 2004 in pursuit of Commercial-Off-The-Shelf (COTS) fleet of attack and surveillance UAVs (Unmanned Aerial Vehicles):

Price, performance and accessibility have only accelerated since. Subsequent to my articles, the Israeli IDF was astonished when Hezbollah launched a reconnaissance UAV over Israeli territory, recovering it without incident. Despite Israeli drone and UAV flights over Lebanon, Israel had not been paying attention to asymmetrical UAV development - publicly stated in many cases to rise from commercial radio-controlled (R/C) model aircraft versions. They should not have been surprised; Hezbollah is a resourceful adversary.

Constructing, in some instances assembling, a semi-autonomous "killer robot" is all too easy. Remember this effort to construct a COTS fleet of attack and surveillance UAVs was early 2004:

I am not an R/C pilot so I could start clean as would any other reasonably technically inclined individual. My ground rules were:

  • Could pay cash for everything
  • Could buy everything in-country and so not have to bring items across a border
  • Could buy all items in a population-dense environment not immediately likely to be surveilled
  • Could obtain PC-based simulators in order to covertly learn how to pilot either fixed wing or rotary wing aircraft, i.e., before I tried to fly a physical device
  • All essential components were either genuinely plug and play or already available in kitted form
  • Could obtain functional schematics and instructions for all installs/add-ons
  • Ability to install GPS autopilots with ground pilot override
  • Ability to install real-time video cameras and their RF links
  • Ability to install digital camera triggering
  • Ability to carry payloads (and either release, spray, or otherwise distribute the payload)
  • Option for stealth/noise abatement
  • Ability to do it at modest cost in comparison to anything a military unit would field and, labor costs aside, be within al Qaeda's frugal pocket book

I found that as early as 2004, "it is feasible for a diligent and reasonably agile individual or small group to create a COTS hunter-killer and surveillance R/C model fleet, a poor man's Predator":

Ability to assemble an R/C craft that could launch conventionally, switch over to GPS autopilot, fly a course either to a target or a race track round trip and allow it to again be taken over by another user for terminal homing or landing... Many PC simulators [are available] for a variety of fixed wing and rotary wing R/C models.

Nose video cameras that could superimpose imagery over a heads-up cockpit display based on telemetry sent back from the bird. If the ground pilot was properly trained, it was possible to fly something onto the target just like the big boys...

Smoke systems intended for demonstration flying are intriguing as a dispersal mechanism for other agents. Certain smoke pumps use one TX-RX channel to toggle on/off...

If the intent is to surveil or deliver/spray a payload, then an R/C aircraft can be launched, perform its mission, and subsequently be recovered -- if for no other reason than to forestall discovery of the means of an attack or that an attack had occurred. The cost of the systems is low enough and simple enough that it could be produced in a quantity that would satisfy the redundancy needs of groups like al Qaeda.

These small UAVs can have enormous consequences beyond delivery of conventional explosives. Our research into the feasibility of producing asymmetrical small volume, "off scope" organophosphates (nerve agents), i.e., agent production using easily purchased materials and not the more rarified "Australia Group" components, showed that production was not limited to sovereign state actors. See:

Some of our findings: If you are going to make and use an organophosphate product in less than a year, standard stainless steel components will suffice before corrosion degrades the system, inadvertently venting product. Toxic byproducts of production can be exhausted directly into a sealed running water stream, sending it off for the sewer system to absorb. Use of microreactors and microfactory components vastly lower production risks while improving weaponization and delivery.

An article is forthcoming on criteria for an asymmetrical air force that would be within the means of a number of entities, criminal and terrorist.

'Robot arms race' underway, expert warns
Tom Simonite
NewScientist.com news service
12:10 27 February 2008

The Ethics of Autonomous Military Systems
Royal United Services Institute for Defence and Security Studies
27 February, 2008

Killer robots pose latest militant threat-expert
Reuters
Tue Feb 26, 2008 7:00pm EST

Robot wars are a reality
Armies want to give the power of life and death to machines without reason or conscience
Noel Sharkey
The Guardian
August 18, 2007

Hezbollah sends drone over Israel
AFP/ABC (Australian Broadcasting Corporation)
Last Update: Monday, November 8, 2004. 9:50pm (AEDT)

Gordon Housworth



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Submarine fiber optic cable breaks: a study in hysteria and ignorance against analysis

  #

Undersea cable networks are an underappreciated but essential part of modern life. They now carry well over 95% of the world's international telecommunications traffic. As trade rises as a share of global GDP - it's now over 30% - reliable connectivity becomes a key ingredient to growth. Some drivers of economic growth - outsourcing, offshoring - would be nearly impossible without it. As such, the undersea cable networks that support this connectivity are clearly vital to global commerce...

Submarine fiber optic networks mimic electricity grid vulnerability

The global submarine fiber optic network almost perfectly mimics the global electricity grid in its inability to mount any reasonable defense against attack. (I say 'almost' as the fiber optic industry is far less aware of its being a target than is the electricity grid.)

Here is Richard Clarke in 2000 speaking of cyberwar as "a threat that US government cannot defend solely by federal means":

The owners and operators of electric power grids, banks and railroads; they're the ones who have to defend our infrastructure. The government doesn't own it, the government doesn't operate it , the government can't defend it. This is the first time where we have a potential foreign threat to the United States where the military can't save us.

Compare that to Clarke's recent 2008 reply on the vulnerability of fiber optic networks to physical attack:

No one has the responsibility to insure there are redundant lines. Each company makes a decision based on market forces as to whether to invest in building new capacity. Nobody pays the private firms that own the fiber to build excess capacity. In some places it exists, but there are many point-to-point connections that have single points of failure and insufficient work-arounds available. There ought to be a public-private partnership, an international one, that insures there is adequate capacity to handle large scale outages caused by malevolent actors. That means back up dark fiber, rapid repair and replacement capability, and research to increase the bandwidth for laser uplink/downlink satellite comms.

Substitute 'cable system companies' for 'electric power companies' in this 2003 comment by Clarke:

[Our] electric power companies, both the generating companies and the distribution companies, have paid very little attention to security in cyberspace... They are beginning to understand that they need to have security. And the Federal Electric Regulatory Commission is beginning to understand that it needs to regulate that, in order to create an even playing field...

Unless power companies are required to do [this] by the federal government, they will never do it, because they're now in competition with each other. They're all willing to do it if they're all forced to do it... no one has competitive disadvantage by proving security...

We, as a country, have put all of our eggs in one basket... It could be that, in the future, people will look back on the American empire, the economic empire and the military empire, and say, "They didn't realize that they were building their whole empire on a fragile base."

In researching this note I thought to see what Clarke had said about the recent cable outages in the Eastern Med and the Persian Gulf, forgetting that he wrote a novel, Breakpoint, (excerpt here) that included an attack against fiber optic backbone:

Breakpoint [shows] was how much more damage could be done if an organized group set about to create havoc by attacking these strand that unite the global village. Disconnect cyberspace in key places and the unified global village and world economy can't operate. And we have no backup economic system... And while undersea lines were cut in the novel, there were also attacks on the places where the cables come up from under the water and go on the beach. Those places are well known and unprotected.

Spot on. My read surfaced few public analysts that spoke systematically and realistically about the threats to submarine cables. Of those, fewer identified their unprotected "landing stations" - where the cables come ashore - as a high vulnerability. (This analyst found it interesting that landing stations highlighted in discussions of telecom cooperation with federal eavesdropping were forgotten in assessing the cable threat.)

A simple search on "submarine cable landing" will produce a List of international submarine communications cables as well as 983 locations where undersea cables come ashore, most all of them in rural to remote areas. There are so many ways to identify landing points. Bluewater sailors know where cables congregate to come ashore as they are clearly marked on their nav charts.

The Eyeball series highlights the landing stations along the US East Coast. (Scroll down past the text to the paired aerial photo-highway maps for the landing stations. But note that the text you skipped over cites sources for these locations. My point is that it is a trivial problem. My compliments to Cryptome for flagging that triviality.)

Separating hysteria and excessive calm from legitimate risk

It appeared that the only procedural rigor at play among amateur reporters was to repeat Auric Goldfinger's line that, "Once is happenstance, twice is coincidence, three times is enemy action" and then assign multiple, geographically dispersed cable breaks to enemy action, usually Jihadist, without further investigation.

The relatively uncomplicated sovereign state environment in effect when Neal Stephenson wrote Mother Earth Mother Board in 1996 is now complicated by the emergence of the stateless aggressor against whom retaliation is difficult:

There is also the obvious threat of sabotage by a hostile government, but, surprisingly, this almost never happens. When cypherpunk Doug Barnes was researching his Caribbean project, he spent some time looking into this, because it was exactly the kind of threat he was worried about in the case of a data haven. Somewhat to his own surprise and relief, he concluded that it simply wasn't going to happen. "Cutting a submarine cable," Barnes says, "is like starting a nuclear war. It's easy to do, the results are devastating, and as soon as one country does it, all of the others will retaliate.

There are more than one stateless aggressors that will be pleased to sever submarine cables or other communications services in the pursuit of their aims. (Mother Earth Mother Board is otherwise still worth the read.)

TeleGeography's Eric Schoonover does a nice job of describing what happened in the wake of the Egyptian outages, what was required to compensate and who suffered with what consequences. By far the best routing intelligence was the highly recommended five-part series showing who was affected when, by Earl Zmijewski:

Christopher Rhoads does a yeoman analysis of the structure of the fiber sector, much of it still dark since the bust of the late 1990s fiber boom. (Unfortunately, the unused dark links are often not in the areas of current demand.) A useful summary of cable maintenance, grappling and repair is here. It was amusing to hear FLAG Telecom state a new third cable, the FLAG Mediterranean Cable, between Egypt and France would be "fully resilient" against cuts as it was taking "a different route from the severed cables." FLAG knows that the cables emerge in shallow water to terminate at the same landing points.

A respondent to Bruce Schneier's Fourth Undersea Cable Failure in Middle East argued more systematically for "undersea damage associated with seismic activity" in Turkey and Southern Greece than any of the handwringing Cassandras. That may not be the ultimate cause for the Med breaks but its rigor shames many of the high street press journalists. (And if you hear a rumor that Iran has been knocked offline, use traceroute (tracert) (prepackaged sets here and here) to verify it rather than running the rumor. That skill will separate you from most journalists.)

As to the comments from Egyptian authorities that no ships were operating in the restricted area where the breaks were said to occur, and thus had no opportunity to drag an anchor, I say anything is possible in a land where a bureaucrat will accept payment to look the other way. This comment from a diver is useful:

Having dived around Alexandria, a common site is a bunch of locals in a 10m boat throwing a grappling hook over the side over known or suspected wrecks in an attempt to snag some scrap metal and haul it up. Several times we had to abort to alternate dive sites to avoid locals who were tearing up wrecks like this. As for the egyptian military being able to contain a restricted area ... their training makes mcdonalds workers seem well trained.

Ryan Singel nicely outlined the "Cable cut fever" racing about the web. But when Johna Till Johnson answered "Is it likely the cable cuts were intentional? And more importantly, are we at the dawn of a new era of "cable terrorism," in which malcontents try to disrupt global communications via cable cuts?," she got the first right and, overlooking shallow water and the landing stations, got the second quite wrong:

Nope. Cutting cables is a lot more difficult than it looks. For one thing, you have to first locate the cables - no small feat when they're somewhere in the middle of an ocean, under miles of water. Even with the latest-and-greatest technology, this is no easy task. According to the delightful book Blind Man's Bluff, the United States spent a fair amount of time in the 1960s and 1970s attempting to locate and tap Soviet cables. Although there reportedly were noteworthy successes, they required decades of focused effort and investment in a fleet of nuclear submarines. Terrorists have easier ways to make trouble.

Ovum's Matt Walker made the best non-military analysis:

[C]ables are nearly impossible to secure. Cable landing stations are often located in remote areas and usually staffed with a handful of technical employees, not teams of armed guards. Moreover, a typical transpacific system stretches around 20,000km. Even if the private cable owners increase security for the "dry plant" segment of such networks, securing the wet plant is problematic. Cable owners work hard to minimize accidental damage, making cable routes available to those that need to know, such as fishermen, navies, and research vessels. Cable routes also deliberately avoid, as possible, such hazards as earthquake-prone zones and rocky seabed. However, there is an unspoken assumption that the networks are safe from deliberate human sabotage. The recent spate of cable failures in a politically volatile region has called this assumption into question...

In deep waters, cable cuts are rare... 60% of all cable cuts occur in waters less than 100 meters deep. Of all cable faults, roughly three-fourths are due to "external aggression," the bulk of which is accidental human activity, namely, fishing, anchors, and dredging...

Intentional sabotage [is] probably more feasibly done in shallow waters than deep, and cable security in shallow waters is only modestly more practical. Clearly, undersea cables are a ripe target for those with an interest in wreaking havoc on international communications, whatever their motivation. Another consideration is that undersea cables have been used for submarine/surface surveillance purposes as far back as World War II, with the cooperation of private industry...

And here a scent of Clarke:

It is not enough to have multiple independent operators of ring- or mesh-based networks, with built-in restoration capabilities, optical equipment and power redundancy, multiple redundant links between cable stations and city gateways, etc. Physical security from deliberate human attack or sabotage must also be considered. If ports, railways, gas pipelines, and other types of networks are being secured against possible sabotage, we must similarly increase the security of undersea optical highways. Guaranteeing reliability is impossible, but an improvement on the current hands-off approach is long overdue. The economic cost of losing, or even just slowing down, international communications is extremely high. This risk has to be factored into the calculations behind the investment level and design of undersea optical networks.

Technical assist: For those struggling with unfamiliar communications vocabulary in a subsea cable network, a nice pictographic introduction of general data communications in any medium can be found here (actually the introduction to a data communications course).

The highly vulnerable landing station

RAND highlighted the landing station vulnerability as least as early as 2000; the problem has only grown more critical while commercial cable firms remain obtuse:

[W]iring companies have focused on redundancy as an important aspect of the cable network. While early fiber optic cables were "point-to-point" systems, modern systems are configured as loops, connecting two landing stations - at least 100 kilometers away from one another - in one country to two in another. Because it would be unlikely for an isolated nautical event - a sudden shift in the seabed on which the cables rest, for instance, or an inadvertent break caused by a fishing net or a ship's anchor - to affect both cables, the systems are thought of as secure...

However, the desire for security against inadvertent nautical events may have been counterproductive. When seeking adequate termination points for cables, companies have faced a relative paucity of suitable sites (relatively isolated from heavy fishing activity and strong ocean currents), particularly on the East Coast... Because of this lack of sites, and given the considerable effort in digging a trench on the seabed for the last kilometers of the cable, then tunneling from the ocean bed up into a beach manhole, to bring the cable ashore, cable companies have, again, especially on the East Coast, repeatedly placed cable termination points on the same shore...

The results of this "stacking" [can be seen in ten cable systems terminating in New Jersey. Of the ten] six terminate in only one of the same three cities, Tuckerton, Manasquan, and Manahawkin, New Jersey. One - a self-healing loop - terminates in both Tuckerton and Manasquan. A sixth terminates in both Manasquan and Charlestown, Rhode Island. Theoretically, an attack on two or three of these sites - at the point where the cables come together in the undersea trench before coming ashore - could cause enormous damage to the entire system...

Similarly, all submarine cables but one terminating in the south of the United States terminate at one of three points in Florida: Vero Beach, Palm Beach, and Hollywood.

[The US is less isolated than other states]- some transmissions could be rerouted through systems in Canada and South and Central America. However, given that the vast majority of transatlantic and transpacific cables terminate in the United States, the prospect of a concerted attack on these cables is troubling.

[However, a state such as Taiwan, unlike the US,] would be unable to depend on a vast overland information infrastructure beyond its borders in the event of damage to its fiber optic lifelines. A [then] recent example of the chaos potentially caused by communications outages is that of Australia. One cut cable in the SEA-WE-ME-3 network leading from Australia to Singapore caused Australia's largest Internet provider - Telstra - to lose up to 70 percent of its Internet capacity...

Pulsing the system as part of an information gathering exercise

I do not rule out an effort by state or nonstate assets to pressure the network, forcing the defender to enable comm links that normally remain dark. We often probed Soviet air defenses with aircraft flying a possible penetration profile, hoping to force the Russians to turn on defense in depth assets normally used in combat. These two comments to Schneier's post on the Middle East cable failures speak to my point:

Think about entities responsible for researching cyber attacks from a viewpoint of national security. Their main endeavors are mapping and monitoring global infrastructure and simulating possible scenarios. As with every simulation (e.g. development of nuclear warheads) you need real world data to make your simulation behave like the real world would do.

These entities do likely own warehouses full of real world netflow data, but only for more or less regular operation of the global network. To be really sure, that their virtual attack scenarios can be trusted, they need real world feedback for their own "interactions" with those networks. Now think about the interesting load of data you can collect when cutting undersea cables: number of nodes immediately offline, congestion on alternative routes, average response times of responsible institutions, measures taken by those institutions, unexpected backlash, general short, mid, and long term effects, on and on... Endless highly interesting parameters...

If this is deliberate, I suspect that it's a probe. If I was interested in knocking out access for a country, I'd probe it for uplinks. I'd search for all of the announced AS paths behind each uplink. Once I knew say, the top five fiber drops, cutting a few may fill the rest to capacity. Assuming that one is watching BGP, you'll see some changes. If they have emergency fiber or VSAT uplinks, they're probably going to route over them. This would be a useful method of observing a target. This doesn't mean that it requires a later attack, it could simply be an information gathering exercise...

Submarine cable operators: the sitting duck on the pond

The group that seems oblivious to asymmetrical threat risk appears to be the subsea fiber optic cable operators. An effort to locate robust risk analysis practices in general and this threat in particular went dry. The best was Cook's Risk Management which had the core of a useful method but it seemed more a proposal that evidence of sustained practice. Marine Survey & Cable Routing short course for "a safe and economic route" cited the principal hazards as:

  • Pre-Survey Route Position List (RPL)
  • Seafloor Morphology and Geology
  • Natural Hazards e.g. Seismic events, submarine volcanism
  • Oceanography and Meteorology
  • Human Activities e.g., mineral extraction, oil & gas, fishing
  • Man-Made Hazards e.g. anchoring, dredging
  • Other cables/pipelines/lease blocks

Its detailed Cable Route Study (CRS) had more to do with visiting local landing station authorities and other industries operating in the area, permits and regulatory issues, and cultural and environmental issues than asymmetrical or sovereign threats.

A forward leaning Blips on the Radar Screen for future cable capacity mentioned no threat profiles. In the search period where I should have found a working threat assessment model, I found none.

Writing in 2000, RAND noted a gap between the defense community and commercial cable operators that has not been closed:

By 1969, [defense] analysts had perceived vast potential military and economic benefits in cable's exploitation... With the explosion in importance of fiber optic networks [this] potential has been realized and will continue to grow; at the same time, however, so will the attendant vulnerability. The submarine fiber optic cable network is of great importance to the United States... Moreover, constraints on cable laying mean that several cables are likely to be bundled together, offering a potentially lucrative target for sabotage.

In most industry publications, however, little attention is given to the possibility of deliberate attack on the fiber optic network. Indeed, one of the few discussions of the possibility says simply that "while undersea cables could be cut, the practice of burying the in-shore segments makes this difficult; the mid-ocean portions are hard to find without a map and help from shore-based monitoring stations"...

Given the above, however, it is clear that more attention should be paid to the potential for deliberate attacks on the global fiber optic cable network... Currently, for instance, shore authorities have positioned radars and occasionally scheduled flyovers for areas in New Jersey that might be targeted...

Areas of high cable density are common: expect more multiple outages

"Cairo has become a communications hub to the Middle East..." The Suez Canal and the new overland "electronic Suez canal" comprise one of the globe's highest cable densities with massive fiber projects on the way:

Nearly all the new fiber cables recently built or planned for South Asia, the Middle East and east Africa funnel through Egypt, due to its unique location between the Red Sea and the Mediterranean. The other undersea path to the European and Atlantic networks is the much longer and costlier way around the southern tip of Africa...

The nine fiber projects planned across Egypt's Sinai desert compare with a total of four built over the past 20 years. "We call it the electronic Suez canal," says [the] Egyptian telecom regulator, likening the country's emergence as a communications hub to its importance last century for shipping by virtue of its Suez canal.

Suez in not unique in its high density of laid cables; The seabed offers many points where geography conspires to group submarine cables, thereby increasing the potential of cascaded damage. Take, for example, the Luzon Strait where the 2006 magnitude 7.1 Hengchun earthquake created "one of the largest disruptions of modern telecommunications systems. Nine submarine cables in the Strait of Luzon, between Taiwan and the Philippines, were broken thus disabling vital connections between SE Asia and the rest of the world."

Luzon Strait is the preferred of three routes to "link South East & Northern Asia":

  1. Luzon Strait between Taiwan & Philippines
    • 320 km width
    • 2600m sill depth in Bashi Channel (north)
  2. Route south of the Philippines
    • adds lots of mileage & hence latency
  3. Formosa Strait
    • Narrowest part is 130 km width
    • 70 m depth (too close to fishermen)

With nine cables transiting the earthquake epicenter in the Bashi Channel (2500-4000 meters deep), Hengchun created "multiple failures causing the entire cable system to be out of service." With no available cables for rerouting, Asia had to wait weeks for marine repairs:

21 faults were recorded in the 9 cables and it took 11 ships 49 days to restore everything back to normal. This length of time was due to the number of faults, the availability of cable repair vessels, adverse sea conditions and the occurrence of faults in water depths down to 4000 m. The repair effort was hampered further by the burial of some cables under a layer of mud and the huge size of the area that was affected...

Sovereign state weaponization of the sea floor

Terrorist efforts aside, it is clear that the major powers have a sustaining interest in the seabed, fiber optic cables and deep diving submarines.

As to subsea cables, Bamford notes:

[NSA] taps into the cables that don't reach our shores by using specially designed submarines, such as the USS Jimmy Carter, to attach a complex "bug" to the cable itself. This is difficult, however, and undersea taps are short-lived because the batteries last only a limited time. The fiber-optic transmission cables that enter the United States from Europe and Asia can be tapped more easily at the landing stations where they come ashore. With the acquiescence of the telecommunications companies, it is possible for the NSA to attach monitoring equipment inside the landing station and then run a buried encrypted fiber-optic "backhaul" line to NSA headquarters at Fort Meade, Maryland, where the river of data can be analyzed by supercomputers in near real time.

Tapping into the fiber-optic network that carries the nation's Internet communications is even easier, as much of the information transits through just a few "switches" (similar to the satellite downlinks). Among the busiest are MAE East (Metropolitan Area Ethernet), in Vienna, Virginia, and MAE West, in San Jose, California, both owned by Verizon. By accessing the switch, the NSA can see who's e-mailing with whom over the Internet cables and can copy entire messages. Last September, the Federal Communications Commission further opened the door for the agency. The 1994 Communications Assistance for Law Enforcement Act required telephone companies to rewire their networks to provide the government with secret access. The FCC has now extended the act to cover "any type of broadband Internet access service" and the new Internet phone services - and ordered company officials never to discuss any aspect of the program.

As to deep diving submarines. RAND produced an interesting 2002 monograph on the requirements for a successor to the NR-1, a deep-diving nuclear research submarine built in 1969. A small vessel (12 foot diameter, 150 foot length, 400 ton displacement and crew of seven), the NR-1 is set apart from other research submersibles and SSN submarines by its "prolonged (30-day) operation [limited only by its food and air supply] on or near the sea bottom [2,375 foot operating depth] at a speed of up to 4 knots" as well as its viewports, manipulators to "handle small objects... two retractable rubber-tired wheels that support it on the ocean bottom [and] thrusters to maintain depth without forward movement, to move laterally, and to rotate within its own length."

NR-1 missions "included support to national agencies, which had found other assets limited in their ability to complete such tasks as mapping the Challenger debris field despite inclement weather or locating important forensics information from the Egypt Air Flight 990 disaster... support of maritime archaeology, scientific research, and military operations." Command of the NR-1 does appear to be a career enhancing billet. Admiral Edmund Giambastiani commanded NR-1 earlier in his career.

Based upon NR-1 performance and expected NR-2 capability, a "military expert group" identified seven "core missions" for the NR-2 as part of an analysis of highest priority "military and scientific missions [for] their deep-diving research submarines":

  • Selected Covert Operations
  • Protection of National Assets on the Seabed
  • Intelligence Preparation of the Battlespace (IPB)
  • Forensics/Investigation
  • Expanded ISR [Intelligence Surveillance and Reconnaissance]
  • Offensive Information Operations
  • Defensive Information Operations

The NR-2 would require "magnetic and acoustic" quieting and enhanced endurance and should be able to operate under three support environments:

  • Fully autonomous operation... as is any SSN...
  • Operation in consort with an SSN [with] SSN transport/tow to an AOI [area-of-interest] and escort/protection within an AOI as desired...
  • Operation in consort with a surface support vessel [for] extensive logistics support... tow and communications support... and enable transfer and offload of objects...

Interestingly, little is written of the NR-2 despite the fact that the navy 'anticipated' "that the NR-1 will require [a third] refueling or replacement by 2012." There is an interesting oblique reference in a comment about a LTJG nuclear engineer with the Advanced Submarines Division at Naval Reactors Headquarters who:

uses his skills to keep the country's only nuclear-powered, deep-diving research submarine in top operating condition. [The officer] recently completed studies of concept designs for a nuclear-powered deep-diving research submarince including the sizing reactor and propulsion plant components, plant arrangement, and overall ship integration aspects.

In sum, subsea fiber optic networks are more vulnerable than the electricity grid. Fiber is not so much a case of raising security standards as it is introducing the concept of security. Richard Clarke's admonitions ring loudly.

Internet Logjams Spur Cable Boom
Outages in Mideast Expose Global Need For Fast Fiber Lines
By CHRISTOPHER RHOADS
WSJ
February 8, 2008

FLAG Telecom: Abandoned ship's anchor caused cut in Internet cable between Emirates, Oman
By KATARINA KRATOVAC
AP
Posted: 2008-02-08 10:58:35

Hotter under the water: A look at the undersea Internet cable "conspiracy" and the impact on global networks
Interview with Eric Schoonover, TeleGeography
Network Performance Daily
February 07, 2008

What those oceanic cable cuts mean to you
By Johna Till Johnson
Eye on the Carriers 
Network World, 02/07/08

Mediterranean Cable Break - Part IV
February 07, 2008 | By Earl Zmijewski at 02:03 PM
Renesys Corporation

Undersea cables extremely vulnerable say analysts
Comments by Matt Walker, Posted by andrewdonoghue
Recycled Green Tech News
Thursday 7 February 2008, 3:36 PM

07-Feb-08 - Update on Submarine Cable Cut Repairs - Daily Bulletin
FLAG Telecom
Press Releases

Three undersea cables seen fixed by weekend
Reuters
Thu Feb 7, 2008 9:23am EST

New Cable Taking New Route After Web Cut
By KATARINA KRATOVAC
Associated Press
February 6, 2008 - 2:58pm

Cable Cut Fever Grips the Web
By Ryan Singel
Threat Level
February 06, 2008 | 4:50:11 PM

Analyzing the Internet Collapse
Multiple fiber cuts to undersea cables show the fragility of the Internet at its choke points.
By John Borland
Technology Review
February 05, 2008

Repairs start on undersea cable cut near UAE
Reuters
Feb 5, 2008 8:39am EST

Cable damage hits 1.7m Internet users in UAE
By Asma Ali Zain
Khaleej Times
5 February 2008

Underwater Fiber Cuts in the Middle East
Steven Bellovin
SMBlog
4 February 2008

Ruptures call safety of Internet cables into question
By Heather Timmons
IHT
Published: February 4, 2008

ATTENTION: Iran is not disconnected!
February 03, 2008 | By Earl Zmijewski at 06:15 PM
Renesys Corporation

Cable cuts, conspiracies, and submarines...
Jesse Robbins
O'Reilly Radar
02.03.08

Mediterranean Cable Break - Part III
February 02, 2008 | By Earl Zmijewski at 06:17 AM
Renesys Corporation

India Internet capacity at 80 pct after cables break
Reuters
Feb 1, 2008 2:32am EST

Web Disruptions Persist Overseas
Cables Could Take Weeks to Fix, Pressuring Business in India, Mideast
By MARIAM FAM in Cairo, CHIP CUMMINS in Dubai, JACKIE RANGE in New Delhi, and CHRISTOPHER RHOADS in New York
WSJ
February 1, 2008

Mediterranean Cable Break - Part II
January 31, 2008 | By Earl Zmijewski at 07:20 PM
Renesys Corporation

Cable Cuts Disrupt Internet in Middle East and India
TeleGeography
Thursday, January 31st, 2008

Mediterranean Cable Break
January 30, 2008 | By Earl Zmijewski at 06:53 PM
Renesys Corporation

Foundation [of Data Communications]
Data Communications and Computer Networks
Hongwei Zhang
Department of Computer Science, Wayne State University
Fall 2007

Enabling Global Communications - From Risk to Reward: Why must we learn our own lessons before we change risk management behaviour?
Keith Schofield
Pioneer Consulting (Dotdash Consulting)
Sub Optic 2007
May 17, 2007

Research & Security Applications of Submarine Technologies
Seymour Shapiro
Tyco Telecommunications Laboratories
SubOptic 2007

ADVANCES IN DEEPWATER CABLE MAINTENANCE THROUGH NEW GRAPNEL TECHNOLOGY
Jeremy Featherstone, Andrew Thomas
Sub Optic 2007
May 15, 2007

BLIPS ON THE RADAR SCREEN: THE CASE FOR SUSTAINED STABILITY IN NEW SUBSEA SYSTEMS DEVELOPMENT MARKET
Thomas A. Soja, John Manock, S. Hansen Long
T Soja & Associates, Inc.
Sub Optic 2007
May 15, 2007

The regulation of undersea cables and landing stations
Steve Esselaar, Alison Gillwald and Ewan Sutherland
IDRC 2007

Subsea Landslide is Likely Cause of SE Asian Communications Failure
Graham Marle, ICPC Secretariat
ICPC PRESS RELEASE -
21 March 2007

Taiwan Earthquake Fiber Cuts: a Service Provider View
Sylvie LaPerrière, Director
Peering & Commercial Operations
nanog39 - Toronto, Canada
2007/02/05

Excerpt: 'Breakpoint,' by Richard Clarke
Veteran Counterterrorism Official Writes a Futuristic Thriller
ABC News Internet Ventures
Jan. 17, 2007

Breakpoint
by Richard A. Clarke
Putnam Adult
ISBN-10: 0399153780
January 16, 2007

Earthquake Highlights Asian Dependency on Submarine Cables
TeleGeography
January 2007

Taiwan Earthquake Severs Undersea Data Cables
Geology News
Friday, December 29, 2006

Taiwan Quake Shakes Confidence in Undersea Links
By Jon Herskovitz and Rhee So-eui
Reuters
Dec 28, 2006

Earthquakes Disrupt Internet Access in Asia
A series of powerful earthquakes damages undersea cables and interrupts Internet connections in Asia.
Sumner Lemon
IDG News Service
December 27, 2006 11:00 AM PST

Earthquake in Taiwan
Status Report No: EQT-1
CAT-i, Guy Carpenter
Date: 26 December 2006
Time: 12:26:21 UTC (20:26:21 local time)
Position: 21.819N, 120.543E
Depth: 6.2 miles (10 km)
Magnitude: 7.1
Region: Taiwan Region

Big Brother Is Listening
by James Bamford
Atlantic Monthly
April 2006

SHORE ENDS TO RE-USE OR NOT to RE-USE
Stephen Dawe (Cable & Wireless), Tony Frisch (formerly Alcatel), Barbara O'Dwyer (Level 3) and Denise Toombs (ERM)
Tu A2.3, SubOptic 2004
March 30, 2004

RISK MANAGEMENT
Rick Cook
Alcatel
Tu A2.6, SubOptic 2004
March 30, 2004

Marine Survey & Cable Routing
Short Course
Ron RAPP, Mark LAWRENCE, Dick BORWICK, Takuo KUWABARA
Submarine Cable Improvement Group
Sub Optic 2004

A Concept of Operations for a New Deep-Diving Submarine
By: Frank W. Lacroix, Robert W. Button, Stuart E. Johnson, John R. Wise
RAND MR-1395
ISBN/EAN: 0-8330-3045-0
2002
Executive summary
Submarine Cable Infrastructure

Eyeballing: Transatlantic Cable Landings Eastern US
Cryptome
Various dates 2002

Spy agency taps into undersea cable
By Neil Jr.
Published on ZDNet News
May 23, 2001 12:00:00 AM

Mother Earth Mother Board
The hacker tourist ventures forth across the wide and wondrous meatspace of three continents, chronicling the laying of the longest wire on Earth.
By Neal Stephenson
Wired
Issue 4.12, Dec 1996

Gordon Housworth



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