BAE, EADS And Britain In The 21st Century

The proposed merger between BAE, the British defense conglomerate, and EADS, the multi-country European aerospace and defense giant is more than a merger of two companies.  It could quite literally help dictate whether Britain remains a proud, independent nation in the world or becomes ever more stuck in the quick sand that Europe and the EU have become.  You might ask yourself how could the merger of two companies could determine the fate of not only nations but perhaps even an entire continent?  The answer is simple, if BAE merges with EADS it will destroy what is left of the British owned industrial base in Britain.  Britain will still have a manufacturing sector within its borders but less and less of it will actually be owned by Britain.  Most of the major car manufacturers are owned by foreign companies, Jaguar by Tata, Mini by BMW, etc.  In fact the defense  industry in Britain led by BAE has been one of the few bright spots for British owned manufacturing in the country and the merger with EADS raises serious questions about whether or not there will be any major British owned industrial companies left if it goes through.  Ceding one of your last strong domestic manufacturing industries to the French is not sound policy.

This is because the merger will accomplish two things, first the company will no longer be British, second the new company will stand to lose access to the all important US defense market.  The fact that the company will no longer be headquartered in Britain might not sound like a big deal at first but then you play out a few scenarios in your head like how do companies achieve synergies when they merge.  Well first off they would eliminate redundancies within the new company.  So that means since BAE is the junior partner in this deal then you could expect much of the white-collar jobs in Britain will quickly be eliminated in order to achieve maximum cost savings.  Hundreds, probably thousands of top paying jobs all eliminated.  Second, the current British government has already done its best to destroy its own armed forces by enacting drastic cuts that happen to be one of the reasons BAE is even contemplating this.  Since they are already dismantling their defense industrial base right now does anybody in Britain really think they will have any incentive to carry out big defense projects like the proposed new British nuclear submarines.  One of the few current incentives about doing this is that it will help maintain the defense industry jobs but if the merger goes through will that still be the case since at least some if not a large amount of the work will be done outside Britain.  I think not.

Secondly, roughly 40% of BAE’s profits come from doing work in the gigantic US defense industry.  They are one of the few foreign companies allowed to do this.  Other companies like EADS do business with the pentagon but are not allowed access to advanced technologies to safe guard intellectual property.  This is not the case with BAE because they have special agreements with the US government allowing them to share in this defense work.  The reason for this is simple, they are British.  Because the obvious special relationship they get access that others like the French and Germans don’t and never will.  This alone should give both BAE and EADS pause about the merger.

Finally, if the deal goes through Britain will be drawn closer to Europe at a time when the Continent is in steep decline.  Losing access to the US market will force the new company to look even more to Europe for work.  This in turn will force the UK to get deeper involved with the EU at a time when many in the country want less to do with it.  And if your forced to look more towards Europe they will no longer be able to be that close to the US.  If I were British I would advocate less severe defense cuts both to maintain capabilities but also to maintain an important part of their economy.  I would also focus even more on joint work in the US defense industry because one, it is bigger and two, you don’t have to surrender more of your sovereignty to the failing EU.

Minefields await for EADS-BAE deal


North Korea Talks Of Using EMP Weapons In A War With South Korea

Recently word came out of North Korea that said the regime was planning on using EMP (electro magnetic pulse) weapons in any future war with South Korea.  EMP blasts have the ability to knock out most if not all electronic circuitry in the blast radius.  Some of you may recall that this blog has done several stories about the effects of EMP blasts.  Recently Newt Gingrich compared the power outages around the 4th of July as similar to what a small EMP blast would do.  To sum it up an EMP blast can send the target area back to the stone age.  North Korea already has nuclear weapons ( which when detonated produce a massive EMP blast wave) so the threat has to be taken seriously.  However, for now it does not seem clear if they have a safe, effective way to deliver the nuclear warhead to the upper atmosphere to detonate it where it could cause the most damage to the south.  This is because of their recent missile test failure, which has done real damage to the credibility to the North’s threats.  The fact that China neighbors North Korea might actually keep them from using this until they can accurately fire the missile, can you imagine the Chinese reaction if the missile veered off course and detonated above their country sending half of China back to the dark ages?  Having said that the North has had successful missile launches in the past so this is cause for concern.

North Korea builds EMP munNorth
Korea’s Taepodong 2 Nuclear Missile

US Reclaims Super Computer Crown

For the first time in several years the US has the world’s fastest supercomputer with the Department of Energy’s new IBM produced Sequoia.  The computer will be used to run simulated nuclear weapons test in the hopes of extending the life of the US’s nuclear deterrent without having to set off a real nuke.  The Sequoia is 1.5 times faster than the previous champ that was made in Japan.  However, it is not just speed that makes the Sequoia great, it is much more energy efficient.  The Sequoia consumes 7.9 megawatts vs. 12.6 for the Japanese super computer which can be a pretty big deal when a supercomputer can consume millions of dollars in electricity per year.  Building supercomputers is like an arms race being number one matters for prestige but also to compete globally in scientific research you must have massive computing power.  The Sequoia can do in days what a supercomputer 20 years ago would have taken months or maybe even years to calculate if it tried to do the most comples problems being worked on today.

US regains supercomputer crown…

China Puts First Woman In Space, Who Cares?


China’s launched its first woman into space and I have to ask, who cares?  Is this some major milestone that the rest of the world should really take note of?  I could understand it being a big story in China because she is Chinese, as for the rest of the world especially the US and Russia which have had female astronauts in space for literally decades it seems rather redundant?  Frankly, I’m tired of hearing about it this week and I am into space news.  The way the US media has made this out to be a huge deal is just something beyond me, I don’t understand it.  The real story here is that China sent 3 astronauts into space to perform docking manuevers for the first time with the space capsule Heavenly Palace.  This is actually important news because once mastered the docking skills will mark an important milestone for China’s space program as it tries to acquire the skills necessary to become a leading nation in space.  The fact that a woman happened to be one of the three really is not news worthy outside of China.

China puts its first woman astronaut into orbit

This woman was newsworthy because she was the first woman in space Russian cosmanaut Valentina Vladimirovna “Valya” Tereshkova who launched into space way back in 1963.


Voyager Space Probe Set To Leave Solar System


In what has to be regarded as one of the most underreported milestones of all time the Voyager 1 space probe has reached the edge of the solar system and will be the first man made object to venture into true interstellar space.  At roughly 18 billion kilometers from the sun and traveling at about 17 kilometers a second the probe has had quite a journey that has seen it and its twin Voyager II travel to all of the giant planets in our solar system along with some 48 of their moons.  Launched in 1977 and powered by plutonium that will keep the probe sending data back to earth until 2025 it also carries a message for any intelligent life form to come across it.  The message in the form of a gold plated phono graph with greetings from earth was designed by a group led by the famed scientist Carl Sagan.  The probe is so far away from earth that the data it transmits takes over 16 hours to reach earth.  I realize that since it is not a manned mission many will not pay much attention to this and that is a shame because this truly is one of the great achievements in space exploration.  Think about it, who knows what it might find out there?

Voyager space probe reaches edge of solar system




Gold plated phono graph record to greet intelligent alien life.

Something Positive For Once


If you have read this blog before you probably have realized that it tends to be somewhat negative sometimes because it reflects what is going on in the wider world.  So after reading a fascinating article over entitled The End of the Asian Miracle I wanted to share some of the author’s insight on some very positive things happening right now for the US economy.  The article is fairly long but does go in-depth about how China is beginning to lose some of its competitive advantage versus the US and is worth reading but for the sake of time I’m only going to address what is actually happening in the US instead of the rest of the world. 

Perhaps the biggest new development happening in the US is the discovery and extraction of shale gas that is allowing the US access to large quantities of domestically produced cheap energy for the first time since probably the 1960’s.  Yes, we have had the Alaskan oil discoveries since then but this has the potential to be much bigger and because of this its impact will be much more beneficial.  The effects of this are already being felt in manufacturing with some US companies returning production back to the US from overseas because of the cheap energy, but also foreign companies moving their operations from their home countries to also access this energy.  According to the article the US now is supplying gas to domestic customers at about $2-2.50 per 1 million BTU.  Compare this with China which imports gas at a price of about $13-17 per 1 million BTU.  As you can see that is quite the advantage for us.  I’m sure you are wondering about how this relates to oil?  The article states that the $2-2.50 price is equivalent to an oil price of about $12-15 per barrel.  But the size of the deposits discovered in America mean that this will be an enduring advantage, one so great that this gas will not only power energy intensive manufacturing plants but also provide electricity and perhaps even fuel cars and trucks.  Obviously fueling are personal vehicles is some way off because of the lack of infrastructure (the technology to convert our vehicles already exists and is relatively cheap) but it certainly is not unreasonable to see fleet vehicles that operate out of a terminal being able to take advantage of this much sooner than cars.  Cheaper transportation costs mean cheaper goods at the store, we all win.  In fact the reserves of gas are so large that the idea of the US once again being energy independent may become a reality, now that really is something positive to move forward with.

The End of the Asian Miracle

X-37B Supposed To Fianally Land After Year In Space

The US Airforce is rumored to have ordered the return to earth of its space plane the X-37B after spending about one year in space doing classified work.  There has been much speculation as to what the mission of the space plane was from supposedly spying on Chinese satellites to acting as a spy satellite itself, but the truth is nobody outside the pentagon really knows. 

Secret mission accomplished: America’s mysterious space plane to land after a YEAR in orbit – and no one knows what it did up there