309 For North Korea to torpedo a South Korean ship participating in US-South Korean war exercise would have been suicidal

For North Korea to torpedo a South Korean ship participating in US-South Korean war exercise would have been suicidal

(1) USS Columbia back at Pearl Harbor; but friendly fire from another ship may have sunk the Cheonan
(2) Korean Joint Chiefs of Staff: "The Foal Eagle drill was underway March 26 when the Cheonan sank"
(3) For North Korea to torpedo a South Korean ship participating in US-South Korean war exercise would have been suicidal
(4) The Fall of Boeing and Japan's Airline Industry - Tanaka Sakai

(1) USS Columbia back at Pearl Harbor; but friendly fire from another ship may have sunk the Cheonan

http://www.japanfocus.org/-Tanaka-Sakai/3361

Comment 05-21-2010 12:18:0505-21-2010 12:18:05 Arthur Borges

arthurborges@yahoo.com

Um Ariel, a nuclear-powered vessel is one that uses a nuclear reactor to turn the propellors, light up light bulbs and do other cool stuff that needs electricity. A vessel carrying nuclear weapons is anything schlepping bombs around an ocean regardless of what the engine runs on. Although most commonly, nuclear weapons are carried on nuclear-powered vessels, Israel for example, carries them around in diesel-powered submarines from Germany.

05-21-2010 08:57:3105-21-2010 08:57:31 Ariel Ky

libertyferall@gmail.com

Dear Tanaka-Sakai,

Actually I think it's possible that the Cheonan was hit by friendly fire, although I suspected that it was from her sister corvette, the Sokcho, in one of those mishaps that can happen in live fire military exercises simulating actual war conditions. How did you establish that Operation Foal Eagle was prolonged until April 30? I had wondered if it was still being carried out when the Cheonan sank. Also, can you tell the difference between a nuclear-powered submarine and a submarine carrying nuclear warheads?

I did a little fact-checking to verify an important part of your story, the part about the USS Columbia, the American submarine that supposedly sank, according to your speculations in this article.. Here's what I found:

USS Columbia Returns to Pearl Harbor_By MC2(SW/AW/SCW) Ronald Gutridge_COMSUBPAC Public Affairs
Release Date: 05/03/2010
PEARL HARBOR, Hawaii

Los Angeles-class fast-attack nuclear powered submarine USS Columbia (SSN 771) returned to Joint Base Pearl Harbor-Hickam Monday, May 3, following a six-month deployment to the western Pacific region.

“This was an incredibly successful deployment from completing tasking important to national interests, to engaging our allies in a positive environment.” said Cmdr. Craig Blakely, Commanding Officer, USS Columbia. “Columbia performed superbly, demonstrating the versatility of the U.S. fast attack submarine.”

“Almost 70% of the Columbia crew was on their first deployment, but you would never know from their performance,” said Blakely. “I am extremely proud of the conduct of the crew. Whether playing soccer against our fellow submariners in South Korea or keeping the ship safe during stressful deployed operations, everyone was professional.”

Columbia, commissioned in 1995, was the last 688-class submarine to be built at Electric Boat Shipyard in Groton, CT. This submarine is one of the most versatile ships in the world, capable of numerous types of missions in a myriad of regions including long range Tomahawk strike operations, anti-submarine and surface ship tracking operations, surveillance and intelligence gathering, and even Special Forces insertions.

(2) Korean Joint Chiefs of Staff: "The Foal Eagle drill was underway March 26 when the Cheonan sank"

http://english.donga.com/srv/service.php3?bicode=050000&biid=2010042700058

Lawmaker Presses Rumored US Role in Sinking

APRIL 27, 2010 17:03

An opposition lawmaker is known to have argued with the defense minister last week over a rumor on U.S. involvement in the sinking of the naval patrol ship Cheonan.

Rep. Park Young-sun of the main opposition Democratic Party reportedly did this Friday while visiting the Defense Ministry and the Joint Chiefs of Staff as a member of the special parliamentary committee on probing the sinking.

Party lawmakers who accompanied Park said Monday that she asked questions hinting at the sinking being caused by an erroneous bombing by a U.S. nuclear submarine that participated in the joint military drill Foal Eagle in talks with Defense Minister Kim Tae-young.

Park demanded that the ministry submit materials on the possibility of an erroneous U.S. bombing.

An angry Kim reportedly responded by saying, “You’ll have to make an official request at the National Assembly. But I won’t be able to submit the requested materials in my lifetime because they don’t exist.”

Park then said, “A minister should not talk like that,” after which an argument between she and Kim ensued, according to participants.

She also questioned why U.S. Ambassador to Seoul Kathleen Stephens and U.S. Forces Korea Commander Walter Sharp visited the Korean destroyer Dokdo and commended the U.S. military and the Korean Navy’s ship salvage unit. “An act by the U.S. ambassador holds significance, as well as why she visited there.”

On if she received a third party report or materials supporting her suspicion, Park told The Dong-A Ilbo over the phone Sunday, “I cannot tell you anything. I’ll tell you after all the information is collected and I reach a conclusion.”

The rumor on U.S. involvement in the sinking started March 29 when a news report carried the headline, “Cheonan sinking allegedly caused by an erroneous bombing in a Korea-U.S. joint military drill.” Different versions of related reports are circulating on the Internet.

At the time, the Korean military demanded a correction to the report and sued the reporter of the story for defamation. The media outlet carried a correction early this month, saying “It was an erroneous report whose factual basis was not confirmed.”

A source at the Korean Joint Chiefs of Staff said, “The Foal Eagle drill was underway March 26 when the Cheonan sank, but the drill was conducted in waters off Taean County in South Chungcheong Province, not near waters off Baengnyeong Island.”

(3) For North Korea to torpedo a South Korean ship participating in US-South Korean war exercise would have been suicidal

http://www.atimes.com/atimes/Korea/LE05Dg01.html

 May 5, 2010

Pyongyang sees US role in Cheonan sinking

By Kim Myong Chol

Despite its strong denial of any involvement and expressions of sympathy for lost fellow Koreans, fingers are being pointed at North Korea over the tragic sinking of the 1,200-ton South Korean corvette Cheonan in the West Sea or Yellow Sea on the night of March 26.

"A North Korean torpedo attack was the most likely cause for the sinking of a South Korean warship last month," an unnamed US military official told CNN on April 26. Up to 46 of the ship's 104 sailors were killed in the sinking.

Apparently, North Korea is being set up as the fall guy in an incident that is so mysterious that a Los Angeles Times April 26 story datelined Seoul was headlined, "James Bond Theories Arise in Korean Ship Sinking".

So far, no hard evidence has been produced linking North Korea to the disaster. However, this has not stopped media and experts from holding the North responsible. The South Korean daily Chosun Ilbo wrote on April 29, "It is difficult to imagine a country other than North Korea launching a torpedo attack against a South Korean warship."

Revealing circumstantial evidence

Is it possible that North Korea carried out the daring act of torpedoing a South Korean corvette participating in a US-South Korean war exercise? The answer is a categorical no. The circumstantial evidence is quite revealing, showing who is the more likely culprit.

Mission impossible

There are four important points that make it clear that a North Korean submarine did not sink the South Korean corvette.

Fact 1.North Korean submarines are not stealthy enough to penetrate heavily guarded South Korean waters at night and remain undetected by the highly touted anti-submarine warfare units of the American and South Korean forces. A North Korean submarine would be unable to outmaneuver an awesome array of high-tech Aegis warships, identify the corvette Cheonan and then slice it in two with a torpedo before escaping unscathed, leaving no trace of its identity.

Fact 2. The sinking took place not in North Korean waters but well inside tightly guarded South Korean waters, where a slow-moving North Korean submarine would have great difficulty operating covertly and safely, unless it was equipped with AIP (air-independent propulsion) technology.

Fact 2: The disaster took place precisely in the waters where what the Pentagon has called "one of the world's largest simulated exercises" was underway. This war exercise, known as "Key Resolve/Foal Eagle" did not end on March 18 as was reported but actually ran from March 18 to April 30.

Fact 3: The Key Resolve/Foal Eagle exercise on the West Sea near the Northern Limit Line (NLL) was aimed at keeping a more watchful eye on North Korea as well as training for the destruction of weapons of mass destruction in the North. It involved scores of shiny, ultra-modern US and South Korean warships equipped with the latest technology.

Among the fleet were four Aegis ships: the USS Shiloh (CG-67), a 9,600-ton Ticonderoga class cruiser, the USS Curtis Wilbur (DDG-54), a 6,800-ton Arleigh Burke class guided-missile destroyer, the USS Lassen, a 9,200-ton Arleigh Burke class guided-missile destroyer and Sejong the Great, a 8,500-ton South Korean guided-missile destroyer.

The four surface ships are the most important assets of the two navies, and have multi-mission platforms capable of conducting various tasks, such as anti-submarine warfare. There is every likelihood that they were supported by nuclear-powered US submarines and a South Korean "Type 214" submarine that uses AIP technology.

The sinking of the Cheonan has made headlines around the world. If indeed it was a US accident, it is an embarrassing indictment of the accuracy of the expensive weapons systems of the US, the world's leading arms exporter. It has also cost the Americans credibility as the South's superpower guardian. Ironically, this has made North Korean-made weapons more attractive on the international market.

The South Koreans and the Americans charging the North Koreans with the sinking of the naval vessel in South Korean waters only highlights the poor performance of their expensive Aegis warships, as well as the futility of the US-South Korean joint war games and the US military presence in Korea.

Fact 4: Deputy Secretary of State James Steinberg said on March 30 that he doubted there was North Korean involvement in the sinking: "Obviously the full investigation needs to go forward. But to my knowledge, there's no reason to believe or to be concerned that that may have been the cause."

General Walter Sharp, US Forces Korea (USFK) commander, also saw no link between North Korea and the sinking. In an April 6 press conference, he said: "We, as Combined Forces Command and the ROK [Republic of Korea] Joint Chief of Staff, watch North Korea very closely every single day of the year and we continue to do that right now. And again, as this has been said, we see no unusual activity at this time."

No motivation for vengeance

There have been misplaced reports that the sinking was an act of retaliation for a naval skirmish in November last year "in which the North came off worse", as reported by the Times of London on April 22.

As a North Korean navy officer, Kim Gwang-il, recalled on North Korean television on Armed Forces Day, April 25: "[In that incident] a warship of our navy single-handedly faced up to several enemy warships, to guard the NLL ... [The North's warship] inflicted merciless blows on them in a show of the might of the heroic Korean People's Army (KPA) Navy."

The first duty of the KPA is to prevent war while jealously safeguarding the territorial air, sea and land of the Democratic People's Republic of Korea, as this safeguards the peace and security of the Korean Peninsula.

The Korean People's Army Navy would not attack South Korean or American warships unless provoked, since these vessels carry innocent soldiers on the high seas. True, the KPA Navy would be justified in torpedoing a US Aegis ship or a nuclear-powered submarine if one were caught red-handed. But the KPA Navy would not stoop to infringing on South Korean waters to attack a South Korean ship at random, unless it had returned there after committing hostile acts against North Korea.

Friendly fire

Seven facts indicate friendly fire as the most likely cause of the naval disaster. It may be no exaggeration to say that the South Korean president and his military leaders have shed crocodile tears over the dead South Korean sailors.

A torpedo could have been launched from any of the American or South Korean warships or warplanes taking part in the Foal Eagle exercise alongside the hapless Cheonan.

The four Aegis ships and most South Korean warships carry Mark 46 torpedoes, which have improved shallow-water performance for anti-submarine warfare and anti-ship operations.

General Sharp had issued on March 4 a five-point safety message warning that "a single accident can undermine the training benefits you will receive during KR/FE '10. Remain vigilant and engaged."

It appears that Sharp's warning came true, and the US repeated the kind of friendly fire incident for which it is notorious in Iraq and Afghanistan.

After the ship disaster happened on the night of March 26, Sharp promptly cut a visit to Washington to testify at congress to fly back to Seoul, according to the March 30 edition of Kyonggi Ilbo.

President Barack Obama then called his South Korean counterpart on April 1, ostensibly to express condolences over the ship disaster, but also to offer him the privilege of hosting the next nuclear security summit in 2012, as was reported by Joong Ang Ilbo on April 14.

Obama made this offer one week before he and Russian President Dmitry Medvedev signed a nuclear arms reduction treaty in Prague, and two weeks before the 2010 nuclear security summit took place in Washington.

When Obama announced his decision to select South Korea as host of the next major nuclear security summit in 2012, Agence France-Presse reported that "the announcement surprised many". Most observers presumed that Russia would lead the next meeting.

The most plausible explanation is that Obama offered South Korea the summit due to an overriding need to mollify otherwise possible South Korean resentment at the friendly fire sinking, while covering up the US's involvement in a friendly fire torpedo attack. Most probably, Sharp reported to Obama the potentially disastrous consequences of the public discovering the true nature of the incident. This would likely lead to a massive wave of anti-American sentiment and put Obama and South Korean President Lee Myung-bak in an extremely awkward situation.

Obama must have felt relieved at the South Korean president's ready acceptance of his offer of compensation. One article carried in the April 14 edition of Joong Ang Ilbo was headlined "Veep Biden Says LMB [Lee Myung-bak] Is Obama's Favorite Man". The comment was made by Biden on April 12, one day before the nuclear summit.

Sharp unexpectedly attended the April 3 funeral of a South Korean rescue diver, Han Ju Ho, who died while participating in the search for missing sailors from the corvette. Sharp was seen consoling the bereaved family in an unprecedented expression of sympathy.

Joong Ang Ilbo reported on April 27 that the South Korean government would deal strictly with rumors rampant on the Internet that a collision with a US nuclear submarine had caused the sinking.

The best solution is for the South Korean government team investigating the ship disaster to find an old mine responsible. It is easy to falsely accuse North Korea, but public pressure will mount for military reprisals against North Korea, which will promptly react by turning Seoul into a sea of fire in less than five minutes. North Korea would not flinch from using nuclear arms in the event of US involvement.

Kim Myong Chol is author of a number of books and papers in Korean, Japanese and English on North Korea, including Kim Jong-il's Strategy for Reunification. He has a PhD from the Democratic People's Republic of Korea's Academy of Social Sciences and is often called an "unofficial" spokesman of Kim Jong-il and North Korea.

(Copyright 2010 Kim Myong Chol.)

(4) The Fall of Boeing and Japan's Airline Industry - Tanaka Sakai

http://www.japanfocus.org/-Tanaka-Sakai/2019

The Fall of Boeing and Japan's Airline Industry

by Tanaka Sakai

What is the future of the competition to control the market in commercial aircraft between Boeing and the European Airbus? Does Japan have a role to play in the new generation of aircraft? While Boeing dominated commercial aircraft sales through the 1980s, in the 1990s it has fallen behind Airbus. As Tanaka Sakai shows, the stakes for the U.S., Europe and Japan are high, and the outcomes may deeply affect the ability of Japan and Asia to emerge as a major industrial powerhouse in the decades ahead. Tanaka Sakai, an investigative reporter, publishes the Japanese language weblog http://www.tanakanews.com. His report on Boeing and Japan appeared in the December 31, 2003 issue of Tanakanews. Developments since the publication of this article suggest that Boeing, and the Boeing-Japanese connection are central to a new lease on life for the beleagured company and industry. As the April 18 Asahi Shimbun reported,, Boeing announced the sale of 50 7E7s to Japan's ANA, valuing the sale at $6 billion and giving the airline confidence in moving the plane into production. Of particular interest is the fine print: Three Japanese enterprises, Mitsubishi, Kawasaki and Fuji Heavy Industries will provide 35% of the production of the new plane, centered on the construction of the wings, as well as providing a heavy share of the financing. Is this the way forward for Japan's lagging aircraft industry, or does it seal anew Japanese dependence on American aircraft production, with the U.S. maintaining monopoly control over the engine production? Tanaka suggests another possible scenario: Japanese-Chinese-Korean cooperation at the center of a future Asian regional design. But such a possibility will require major developments within Asian regionalism.


The mythical status of "maker" surrounds Boeing. The company represents American entrepreneurship in a way that compares with Sony and Honda in Japan. In 1966, during the directors' meeting to decide whether to develop the 500-seat class 747 jumbo jet, the head of marketing was asked about the size of investment required. He retorted that this problem paled compared to creating a large-sized passenger airplane. The development plan was approved.

When pilot-turned-designer William Boeing founded the company in 1916 his aim was to turn out the world's most advanced aircraft, and the mantra of profits coming second cemented Boeing's myth as "maker." When they placed their bets on the 747, the idea of airlines as a popular form of travel had not yet come into existence, nor had foreign tourism as an activity for the general public. The growth of airlines as a fiscally feasible concept was as yet untested, but by the 1970's airline travel had become the public's main choice and the price of tickets had dropped. The 747 was largely responsible for this development. Boeing's dominance in this sector of the industry continued as no other craft of comparable size was introduced and they continued to sell at a huge profit without having to reduce the price, in all selling about 1,400 airplanes.

Less Airbus's Success Than Boeing's Fall

However, the saga of Boeing as an American success symbol is beginning to come to an end. One reason is its displacement by the European maker Airbus. Until the 1990s it straggled behind the American maker, but in 1999 476 orders for the Airbus exceeded the 391 for Boeing craft, and the situation remained unchanged in 2003 (by the end of November: 263 orders for Airbus vs. 229 for Boeing). Times have changed since 1995 when Boeing controlled over 80% of market share. By October, 2003 estimated Airbus orders were worth $28.2 billion, while Boeing netted less than half of that at $11.1 billion.

Neither technical expertise nor the introduction of new concepts has been the cause of Boeing's loss to Airbus. Rather, the European maker has triumphed because Boeing made a grave miscalculation and discarded the "maker" philosophy. Since the introduction in 1994 of the 777, ten years passed without the introduction of a new line, and the R&D simply focused on modifications. In the two years that Airbus was marketing several classes of craft -- the A320, A330, A340, and A380 -- Boeing only sold its small-sized 150-seat 737. The current currency exchange rate of a cheap dollar vs. a strong Euro should have worked to Boeing's advantage, but it did not.

"Diversifying Operations"

Since around 1995 the American economy has been marked by an increasing wariness both in the market and among stockholders. For stockholders, the risks of overlooking profits in favor of the traditional production ethic must have seemed very great indeed. Therefore, a new style of management was inaugurated with the hiring of Phillip Condit as Boeing CEO in 1996 (he resigned on 1 December, 2003 over a scandal involving a deal with the military).

His idea was to earmark for development only those airplanes certain to sell, and only enter into a market that was guaranteed to turn a profit. Therefore, he refused to allow the development of two models that as yet had not elicited a response from the airline industry: the "sonic cruiser" high-speed passenger jet, and a greatly improved 747X meant to challenge the Airbus A380. Instead, Boeing sought to "diversify". In 1996 the company bought McDonnell-Douglas in order to enter the military aircraft sector. It also began venturing into the satellite business and acquired "Digital Cinema" that produces and distributes movies made with satellite photography. In the civilian aircraft sector that was its main business, Boeing adopted the policy of increasing sales by combining with the finance industry. They "created demand" by lending money to airlines so that they would buy planes.

In fact, airbus, too, created demand with the use of finance. But Airbus considered financing a money-losing operation. Although they sold passenger planes by lending money to airlines that were short of funds, they invariably tried to resell those bonds, watching the resale market and choosing times carefully to avoid losses. By contrast, Boeing separated its financial sector, making Boeing Capital (BCC), an independent financing company altogether. It aimed to generate profit not only in the sale of passenger planes but in finance, too..

Investors Not Risking New Development

The true differences in strategy of the two companies came to light after the 9-11 attacks when the US airlines industry was faced with a dramatic decline in customers and the industry as a whole was in financial difficulty. Although the BCC group was saddled with debt from bad loans, they believed the market would turn itself around in the short-term and increased their lending from $2.6 billion in 2000 to $12.5 billion in 2002. However, about 40 percent, or $4.7 billion of these loans, proved to be non-repayable.

Finally, in November of 2003 BCC's lending activities were halted, but the bad-load burden was only one problem: Airbus had also developed a new line of craft. There were no orders for the Boeing 757 in 2002 and only seven the next year, halting production. Orders for the 767 were paltry as well -- eight in '02 and eleven in '03 -- but when re-designed for military use as an airborne refueling vessel, one hundred orders were secured from the US Air Force. However, such were the accusations of corrupt practices in this deal that CEO Condit was forced to resign in scandal.

Adding to the financial woes, the satellite cinema distribution system was not paying off and had to be sold at a significant loss. In addition to shrinking profits in the satellite launching area, the military contract and much good faith were lost when the company was accused of stealing secret information about an observation satellite deal between the military and Boeing's main rival Lockheed-Martin. Boeing found itself in the red during the second quarter of 2003 (although other defense work enabled it to operate in the black by the third quarter). Boeing had to sell new models in order to rebuild its passenger jet arm. There were plans afoot to develop a mid-sized 200-seat class 7E7 but investors refused to endorse this project due to fears that it would not sell. The inability to move ahead with this project coupled with the cancellation of the high-speed 747X meant that Boeing had lost to Airbus on these two fronts and in effect withdrawn from passenger airline production altogether. The entire industry is watching to see if plans for the 7E7 can be revived.

Japan's Involvement

Boeing has found in Japan a key partner in helping it out of current problems. The Japanese aeronautics industry is well known for the World War II "Zero Fighter" but since the war has never regained its status, one major reason being that this technology has potential military uses. Production has been limited to the YS11 propeller-driven craft in the 1960's, and production on a sub-contract basis by a consortium of three companies -- Mitsubishi, Kawasaki, and Fuji Heavy Industries -- for Boeing.

It has been the dream both of the Ministry of Economy, Trade and Industry (METI) and the industrial sector to revitalize Japan's aeronautics industry. Noting this, Boeing will offer the three large companies 35% of the 7E7's developmental responsibilities in exchange for assuming a portion of the financial burden. The three companies in the past have been limited to 20% of the sub-contractual work, but this time, in addition to the additional production work, they are taking responsibilities for the risk. The airline industry is now being aided by a METI-financed foundation, The International Aircraft Development Fund (IADF).

But, will this "dream" bring happiness to everyone? The risk for Boeing and the Japanese makers is in fact minimized by the IADF's offering of $3 billion to the consortium in form of a low-interest loan. Therefore, if the 7E7 is not profitable the government and the tax-paying public will take the hit. Besides Japan, Boeing has a similar arrangement with an Italian maker. In all the American company is only assuming 35% of the financial burden. Boeing however has been forced to make this kind of international risk-sharing deal because of the lack of investment on the American side for the 7E7.

The EU has protested Japan's public-sector financing of Boeing as violating international trade agreements and placing the Airbus at a disadvantage. It is difficult to take this complaint take seriously since in the past IADF contributed to a joint project involving Japan, Italy, Germany, and England that developed the low-pollution V2500 airplane engine. In addition Airbus was directly supported for several years by both the French and German governments, with Boeing offering similar protests. Apparently, "free trade" has become a political term of late used in the service of national interest.

Japan as buyer

Whether or not the 7E7 sells will hinge wholly on developments within the airline industry. The views of Boeing and Airbus differ widely on this point. At present, there are about 1,400 mid-sized wide-body craft like the 7E7 in use. If present trends continue, Boeing will have to compete with Airbus's A330 etc., and the market for the 7E7 will be too small. However, Boeing anticipates that the demand for middle-size aircraft like the 7E7 will grow rapidly, and in the next twenty years it will sell 2,500 planes. As large cities complete new airports the range of possible activity has increased, but even as airline companies increase the number of craft to accommodate passenger preferences, the actual number of passengers on a single airplane is bound to decrease. Boeing therefore projects increased demand for mid-sized craft. In contrast, Airbus anticipates no change in the use of large-size craft and predicts sales to continue as in the past, projecting eleven hundred sales over the next twenty years. There is no competition for the 555-seat Airbus A380 now that Boeing has cancelled its 747X, but Boeing projects sales of only three hundred of the European craft over the same period. Each company has immense confidence in their positions.

With voices still raising doubts about the 7E7, Boeing's board of directors last November postponed a final go-ahead on the model's development. Boeing has placed its bets on Japan. The internal market is large by any standards, and the airlines are a prime customer. By 2009 the additional runway at Tokyo's Haneda Airport will be completed, relieving congestion and increasing it's the airport's capacity. As the best prospective market for mid-sized craft like the 7E7, the Boeing board of directors in their December meeting decided to make all efforts to secure deals with Japan Air Systems (JAS) and All Nippon Airways (ANA). In late November Boeing vice president of engineering, manufacturing and partner alignment, Walter Gillette, visited Tokyo and met with JAL and ANA, to appeal to the "dream" of a Japanese air industry and encourage the government to back the purchase of 7E7's. At the Tokyo Press Club Gillette later said "The airlines are very interested... We believe the 7E7 will fit very well with the needs of Japan Airlines and ANA in the future," and on December 17 the Boeing board gave its approval. Boeing finally has its first new design in thirteen years.

Asia Fills the Vacuum

The future passenger jet market is China. Boeing was able to pressure Tokyo politically to get on board so investors would approve the 7E7 but that pretty much delineates the company's interest in the country. Changing company fortunes created this interest: At present profits primarily are generated through military contracts, but the scandal causing CEO Condit's resignation in December, plus several others in marketing, raises the possibility of complete withdrawal from this industry.

The choice for Boeing is clear. A similar loss of public confidence in the 7E7 would mark not only the end of the company's involvement in passenger craft but likely Boeing as a whole, leaving the market solely to the European Airbus. With industry hopes resting on China and the rest of the Asia region, Japan plays an important role. Until now America has been dominant in this region, but the possibility exists that it will lose out. Boeing's disappearance would leave Japan as a subcontractor for Airbus. There also remains the possibility that the giant industrial companies of Japan, China, and Korea will form a consortium and create their own Asian Airbus company. Such a large-scale dream has been meted out to METI's handmaiden IADF, now much more plausible with the end of the American prohibition against a Japanese aircraft industry. Japanese sights are set beyond the 7E7.

Shifting National Commercial Interests to Neighboring Countries

What are the prospects for Boeing's passenger aircraft as the US domestic market recovers from 9-11? Headquarters has already moved from Seattle to Chicago to facilitate Defense Department contract negotiations, forcing one to question Boeing's commitment to passenger craft. The airplane construction industry is extremely complex, as it requires both a high-level of technical expertise and political skill in marketing. Given that, if done well the profits to be reaped are huge. For Asian countries, with little history of industrial cooperation, to come together and form their own company a good many hurdles exist. Airbus, however, initially formed as a coalition of the weak and when it made its first A300 in 1972 it was only able to achieve sales in countries associated with the company. Boeing laughed, but now the tables have turned.

Not only the airline industry but other industrial sectors provide opportunities for inter-Asian cooperation. For this to occur, however, Japan must stop exhibiting, at least to other people, a "center of the region" mentality. Although we may be still on top in technical expertise and capital investment capacity, China may surpass us in future and thus the outlook must be one of equanimity. Japan has its own kind of "yellow journalism" that casts a cold eye towards China and Korea. Such an outlook is unhelpful, even harmful for the future. However, Japan may well find advantages in taking a closer look at Shanghai over the investment coming from the US. It is a route to consider since commercial activities and cooperation with China, Korea, and other regional neighbors will support Japan's economy in future.

Indeed, it is also possible that Japan has taken American long-term supremacy too much for granted without paying enough consideration to its own ability to counterbalance America's dictation of the terms of discussion. With an eye to the future, it may be worth paying greater attention to the possibilities of inter-Asia cooperation.

Translated for Japan Focus by Adam Lebowitz