DTN News: Toyota Puts Cost Of Defects At $2-Billion ~ Automobile News*Source: DTN News / Globe and Mail Update Barrie McKenna
(NSI News Source Info) WASHINGTON - February 6, 2010: The price of Toyota Motor Corp.'s defect fiasco is now $2-billion (U.S.) and counting, as the Japanese car maker faces a U.S. government investigation of the brakes on its prized Prius hybrid. Toyota Motor Corp President Akio Toyoda (L) and Executive Vice President Shinichi Sasaki (2nd L) attend a news conference in Nagoya, central Japan February 5, 2010. Toyota Motor Corp President Toyoda apologised on Friday for a massive global recall that has tarnished the reputation of the world's largest car maker.
The U.S. National Highway Traffic Safety Administration launched a formal investigation into the braking problems on the 2010 Prius on Thursday, and Japan's Nikkei newspaper reported that the company is poised to recall 270,000 gas-and-electric Prius vehicles sold in the United States and Japan between May and December of last year. A Toyota spokesman declined to comment.
With Toyota's Prius braking problems, the auto maker's escalating recall crisis spread beyond the company, as at least one other auto maker was spurred to take a closer look at its hybrids' braking systems. Rival Ford Motor Co. said Thursday it will pay for a software fix to correct braking issues on its 2010 Mercury Milan and Ford Fusion hybrids. The sign of a Toyota garage is pictured in front of an advertising billboard in Vienna February 5, 2010. Toyota Motor Corp, already reeling from two massive recalls, faced the possibility of a third when U.S. safety regulators opened a probe on Thursday into a braking problem on the Prius, the world's top-selling hybrid.
Ford took action after Consumer Reports said one of its engineers ran a stop sign when the brake pedal on a Fusion hybrid sank further than normal and warning lights lit up on the dashboard. Ford said it has received a handful of complaints related to the hybrids' braking systems.
Toyota, which has recalled eight million cars worldwide over sudden acceleration problems since late last year, is facing at least a dozen lawsuits in Canada and the United States. More than $23-billion worth of its stock market value has been wiped out.
And there's growing concern that the company and regulators still don't have a firm grip on why some of its vehicles may speed dangerously out of control – exposing Toyota to untold future liabilities.
The hybrid braking issues are likely to add to the damage for Toyota, which early Friday in Tokyo announced that it has launched a probe into its luxury Lexus hybrid in Japan and the United States. Toyota said that while it has not received any complaints about the Lexus HS250h model, it uses the same braking system as the Prius.
For the first time since its massive recall of last week, Toyota offered an estimate of what the recalls to date will cost: $2-billion. That number includes $1.1-billion for repairs and $770-million to $880-million in lost sales. The car maker is expecting to lose 100,000 vehicle sales because of the recall fallout, 80,000 of them in North America. The major beneficiaries are likely to be Honda, Ford and GM, analysts said.
No decision about a Canadian Prius recall has been made, according to officials of Transport Canada and Toyota Canada Inc.
Transport Canada officials said they are investigating six complaints about Prius brakes made by Canadian drivers.
Officials said they are trying to get their hands on one or more of the cars to see if they can duplicate the problems the consumers have experienced.
“We’re actively looking at those very closely. We have our field investigators following up,” a Transport Canada official said Thursday.
Toyota said Thursday it still expects to sell 150,000 more cars than initially forecast in the fiscal year ending March 31. The company is already gearing up to sell the public, once again, on the reliability of its products.
“Quality is our lifeline,” said senior managing director Takahiko Ijichi. “We want our customers to feel safe and regain their trust as soon as possible.”
But analysts warned it could take years and billions more to restore Toyota's envied standing among car buyers, built up over three decades as an export powerhouse.
“It's a huge threat to their reputation,” said John Paul MacDuffie, co-director of the international motor vehicle program at the University of Pennsylvania's Wharton business school.
Part of the famed Toyota manufacturing system is that any worker can shut the assembly line if they see a problem. Now, Prof. MacDuffie said, the company is “having to stop the line at the corporate level in a big way.”
The best-case scenario for Toyota is that the damage is already contained, and that the bill will be limited to $2-billion or $3-billion, said Susan Helper, an auto industry expert and economist at Case Western Reserve University in Cleveland.
“Another possibility is that this episode shows that Toyota has finally taken on too much complexity and there's a whole edifice that comes crashing down,” she said.
Since early this decade, Toyota has grown dramatically, adding numerous models and boosting sales outside of Japan by more than 50 per cent.
Dr. Helper said Toyota did a lot of cost-cutting over that period to achieve that growth, while protecting its existing market share from rivals. “Some of that was definitely cost-cutting, without content-cutting, but some it may have crossed that line,” she said.
The most likely outcome for Toyota is probably somewhere between a contained problem and a full-blown corporate crisis, Dr. Helper suggested. Other car makers have survived, and even thrived, after taking their licks over safety problems, including Ford Motor Co., which was rocked by rollover problems linked to its use of Firestone tires.
“Look at the Ford and Firestone problem; now Ford is the hero of the hour,” Dr. Helper said. “They have done a lot of things right since. So I don't know that this is something Toyota can't recover from.”
DTN News: Toyota's Long Climb Comes To An Abrupt Halt ~ Automobile News*Source: DTN News / FT.com By John Reed in London and Bernard Simon in Toronto
(NSI News Source Info) LONDON, UK - February 6, 2010: It has been a brutal week for Toyota, long the gold standard for quality, reliability and efficiency in car manufacturing.
Yesterday, Akido Toyoda, company president and chief executive, apologised for causing customers "worry" after a global recall ballooned into broader concerns over its vehicles' quality, its own integrity and the future of its business.
Toyota has lost more than a fifth of its market value since January 21, when it announced a recall in the US of cars due to defective accelerator pedals that might stick.
The recall widened to Europe and beyond.
Standard & Poor's yesterday said it had put its AA debt rating under review with negative implications, citing the risk the group faced from "quality-related issues".
Toyota's speed to market, lean manufacturing, and groundbreaking technology have helped it attain near-legendary status in the industry.
But many of the features that made it the largest and until last year the most profitable carmaker in history started to look more like liabilities this week.
Toyota's use of common parts across many models was one of the reasons behind the size of the latest recall, which affects 4.5m vehicles, mostly in the US and Europe.
This was separate from its earlier recall of 5.75m cars whose floor mats risked jamming in the accelerator, though some models are subject to both recalls.
Then the Prius, synonymous with Toyota's technological edge and "green" brand ethos, came under US regulators' scrutiny after more than 100 customer complaints about the regenerative braking system that recharges the battery.
Toyota's assurances that the problems were "rare" seemed out of touch with growing concern over its products in the US and doubts about whether it had been entirely open about the various issues.
The US Congress pressed for more information in preparation for hearings starting next week.
Toyota said the recall and related sales and production freeze - it closed five US assembly lines temporarily last week - would cost it about $2bn, but that figure does not take into account the impact from lost future sales.
Last month, Toyota saw is US sales drop 16 per cent, while its top two rivals General Motors and Ford both reported big gains.
Its rapid fall from favour contrasts sharply with its slow rise to the top as one of the industry's most valuable and trusted brands.
Launched before the second world war out of a family loom-making business, Toyota built the car business to challenge US and European incumbents by focusing on lean production techniques.
When it entered the US market in 1957 its first car, the Toyopet, was such a clunker that it got no further than Las Vegas on a Los Angeles to New York endurance run.
But Toyota learned.
"No detail was unimportant, and they paid very close attention to customers," says Dave Cole, chairman of the Ann Arbor-based Centre for Automotive Research.
Toyota was criticised during the Japan-bashing climate of the 1980s but adapted by building more plants in the US, where it has invested $17bn to date.
The company's models, such as the Camry and Corolla sedans and RAV sport utility vehicle, were far from eye-catching but by the end of the decade beat Detroit-built models on quality and reliability.
In 1989, it launched the Lexus, which was to become the US's biggest luxury brand.
Most carmakers have copied elements of The Toyota Way in order to cut costs in their operations.
Industries outside carmaking have embraced its practices. Its Japanese names have entered the management lexicon: kaizen (continuous improvement) and genchi genbutsu (going to the source of a problem to study it oneself).
But Toyota's expansion on six continents was not matched by a change in the company's culture, still surprisingly provincial in outlook and centred in Japan.
By 2006, Toyota had the largest recalls of any carmaker in the US.
At the time, then president Katsuaki Watanabe described mounting quality problems as a "warning signal" and "an emergency".
Toyota's expansion formally went into reverse in 2009, just after it overtook GM as the largest carmaker, when it reported a record loss and shelved plans to open its 11th US plant.
Mr Toyoda yesterday promised a return to the genchi genbutsu and "customer first" principles.
People who know the company say it faces a tough slog.
"This is a big challenge, but if anyone can get past it, they can," says John McEleney, chairman of the National Automobile Dealers Association, who owns Toyota and General Motors dealerships in Iowa.
Related HeadlinesToyota president sorry for recallsToyota’s recall - the detailsUS opens Toyota Prius brake probeViral element spins events out of controlWarning to Toyota: speed can killSurprise uplift in UK car registrationsToyota raises forecast despite recall crisisFresh spat over ‘cash for clunkers’ schemePorsche board under fire over derivativesPressure mounts over Toyota recallsCar registrations increase 30%
DTN News: India's Su-30 MKI To Be Armed With BrahMos Missiles*Source: DTN News / Int'l Media
(NSI News Source Info) SINGAPORE - February 6, 2010: The Vice-President of Russia's Irkut Corporation has said the Indian Air Force's (IAF) frontline multi-role Su-30 MKI Flanker-H fighters (also called Sukhoi) could be armed with the supersonic BrahMos-A cruise missiles by 2012.The Indian Air Force ordered 40 aircraft in 1996 and an additional ten aircraft in 1998. 18 Su-30K have been delivered which will be upgraded to MKI standard, starting in 2006.
"The SukhoiSu-30M is a multi-role two-seater fighter, broadly comparable to the AmericanF-15E."
First deliveries of ten Su-30MKI full specification aircraft with thrust vectoring and phased array radar took place in September 2002 and deliveries were completed in December 2004.
Hindustani Aeronautics (HAL) is also contracted to build 140 aircraft in India between 2003 and 2017, under a licensed production agreement. The first indigenously assembled aircraft was delivered in November 2004.
38 Su-30MKK and 24 navalised Su-30MK2 aircraft, which do not have thrust vectoring capability, are in service with the Chinese Air Force. In 2003, Malaysia ordered 18 Su-30MKM aircraft. The first two were delivered in May 2007. Four more were delivered in 2007 and four in March 2008 Deliveries are scheduled to conclude by the end of 2008. Also in 2003, Indonesia ordered two Su-30MKK aircraft. A further three Su-30MK2 aircraft were ordered in August 2007. In March 2006, Algeria placed an order for 28 Su-30MKA aircraft. The first was delivered in December 2007. In July 2006, Venezuela placed a contract for 24 Su-30MKI aircraft. The first eight were delivered in May 2007 and deliveries concluded in August 2008. An order for 12 additional aircraft is planned.
Vladimir Sautov said Thursday at the Singapore Airshow 2010 that work to integrate the missiles for deployment on the Sukhoi was currently on at the Rosoboronexport, the Sukhoi Design Bureau and NPO Mashinostroyeniya (Russian partner in BrahMos JV).
Stating that Russia may offer the upgraded version of the Sukhoi fighters in two years time, he said the modernization program included re-equipping of some of the fighters, which are currently in service with the IAF.
Trials are scheduled for next year and targets fitment in 2012.Sautov also said as the land and sea version of the missile was "large, heavy and powerful," a lighter version was currently under development, which would enable Su-30MKI fighters to carry upto three missiles.
With this, India would acquire the capability to fire these missiles from land, sea as well as air. The sea-based and land-based versions of the missile have already been successfully tested and put into service with the Indian Army and Navy.
With an ability to effectively engage ground targets from an altitude as low as 10 meters, the 290 kilometer-range missile is capable of carrying a conventional warhead of up to 300 kilogram and attain a top speed of Mach 2.8, which is about three times faster than the U.S.-made subsonic Tomahawk cruise missiles.
The IAF initially ordered 50 Su-30MKI aircraft from Russia in 1996 and an additional 40 in 2007.
State-owned Hindustan Aeronautics Limited (HAL) was also contracted to build 140 of the frontline fighter jets between 2003 and 2017 under a licensed production agreement.
DTN News: Gates Pledges Mine-Resistant Vehicles To Allies *Source: DoD American Forces Press Service By Fred W. Baker III Feb. 5, 2010
(NSI News Source Info) ISTANBUL, Turkey - February 6, 2010: Defense Secretary Robert M. Gates today pledged surplus mine-resistant, ambush-protected vehicles along with expanded access to classified information to U.S. allies to help in combating the threat of improvised explosive devices in Afghanistan.Defense Secretary Robert M. Gates conducts a news conference in Istanbul after meeting with fellow NATO defense ministers and those of other countries supporting the effort in Afghanistan, Feb. 5, 2010. DOD photo by Cherie Cullen (Click photo for screen-resolution image);high-resolution image available.
“The United States will now do whatever we can within the limits of U.S. law, and as soon as we can, to provide as many surplus MRAPs as possible to allies, especially to those operating in high-risk areas,” Gates said at a news conference here after meeting with the defense ministers of 44 International Security Assistance Force partner nations.
Gates promised to sell, loan or donate surplus U.S. bomb-detecting equipment, including the MRAPs, along with route-clearing robots and ground-penetrating radars. Gates credited the MRAP vehicles with already saving “thousands of lives” in Afghanistan.
The MRAPs that are likely to make their way to allied forces are those that are coming from Iraq. Gates said the drawdown there has given U.S. forces a surplus of the vehicles. Law dictates that the needs of U.S. troops must be met first before any such equipment can be sold or loaned to other countries.
The MRAPs in Iraq are the older versions more suited for on-road travel, as opposed to the newer all-terrain vehicles known as M-ATVs now being fielded in Afghanistan. Still, Gates said, they are better protection against the killer bombs than what the allies are using now.
A U.S. official speaking after the announcement said some countries have expressed interest in buying the newer M-ATVs, and that sales of those vehicles will be expedited when possible. The United States currently has loaned about 50 MRAPs to Polish forces fighting in Afghanistan. They are the only other country’s forces to use the vehicles.
About 8,500 MRAPs are in Iraq, and more than 4,100 are in Afghanistan. About 2,200 more are in Kuwait, Qatar and Bahrain. The United States has fielded about 800 M-ATVs in Afghanistan. Gates traveled here yesterday to meet with NATO and ISAF partners partly to lobby for more trainers and mentors needed to bolster the efforts in Afghanistan.
NATO has committed to sending about 9,000 extra troops. Nearly all of the 40,000 combat troops requested by Army Gen. Stanley A. McChrystal, commander of the International Security Assistance Force and U.S. forces in Afghanistan, have been committed, but about 4,000 more trainers and mentors are needed.
Another meeting is planned for the end of this month in which commitments will have to be made. The two-day conference here is the start of the efforts to persuade the partners -- many of whom already had planned to reduce the number of their forces in Afghanistan -- to deliver more troops.
NATO Secretary General Anders Fogh Rasmussen said today that Gates’ promise of more counter-IED support will help to bolster that commitment from ISAF partners. In fact, Rasmussen said, NATO has outlined its priorities, with fighting the IED threat at the top of the list. Gates called on NATO to provide more trainers, saying they are “needed immediately,” and that “this is a critical moment in Afghanistan.”
The secretary said that the newly implemented U.S. strategy, alongside fresh NATO and ISAF resources, will pave the way for success in Afghanistan. “I believe the pieces are being put in place to make real and measurable progress,” Gates said.
“I’m confident that we can achieve our objectives, but only if the coalition can muster the resolve for this difficult and dangerous mission.”
DTN News: Swiss Aim To Award Haiti's 'Baby Doc' Millions To Charity
*Source: DTN News / Int'l Media By Eliane Engeler
(NSI News Source Info) GENEVA, Switzerland - February 6, 2010: In an embarrassment to Switzerland's government, the country's top court said Wednesday that at least $4.6-million (U.S.) in Swiss bank accounts previously awarded to charities must be returned to the family of Haiti's former dictator Jean-Claude (Baby Doc) Duvalier. Jean-Claude Duvalier, alias Baby Doc, then life President of Haiti, in Port-au-Prince. Court ruling would give money to family of former dictator, but Swiss justice minister wants it to go to earthquake relief instead.
The amount of money contested could feed more than a million Haitians for two weeks.
The court's decision was reached before the devastating earthquake that struck Haiti on Jan. 12, but only published Wednesday.
It prompted the Swiss government to issue an emergency decree to keep the money frozen in a Swiss bank until a new law can be passed allowing it to be donated to aid groups working in Haiti. “This is a public relations disaster for Switzerland,” said Mark Pieth, a Swiss professor with a long résumé in international corruption cases such as the United Nations oil-for-food scandal.
In the decision, the Federal Supreme Court reversed a lower court's ruling that the money should have gone to aid groups working in the impoverished country because the statute of limitations on any crimes committed by the Duvalier clan would have expired in 2001.
Delays are common in Switzerland between court verdicts and their public announcements, but the release of the decision could not have come at a worse time. Beyond depriving Haiti's relief efforts of additional money, the ruling also strikes a blow at Switzerland's long-standing efforts to shed its image as an investment haven for the world's dictators.
“We assume that this money doesn't belong to the Duvalier family,” said Eveline Widmer-Schlumpf, the Swiss Justice Minister. “We've blocked the money again today to prevent that it goes somewhere that it shouldn't for political reasons. We really hope that this money finally goes back to the country.”
Many Haitians accuse Mr. Duvalier and his entourage of robbing millions from public funds before he was ousted in 1986. Mr. Duvalier is believed to be living in exile in France and has always denied wrongdoing.
The decision cannot be appealed, but the Swiss Foreign Ministry said it would try to keep the money from being withdrawn while it works on a better national law for dealing with assets of “criminal origin.” It said the amount of money actually totalled $5.7-million, though the reason for the discrepancy was unclear.
The government “wants to avoid the Swiss financial centre serving as a haven for illegally acquired assets,” it said in a statement, adding that a new law working retroactively could be ready this month. Ms. Widmer-Schlumpf was less optimistic, but said the law could come into effect as early as 2011.
Switzerland has traditionally been a favourite location for potentate money because of its banking secrecy rules. But reforms over the last two decades have made it harder to hide money in Switzerland, and the country has become a world leader in returning cash.
Haiti made its first request for the money in 1986, shortly after Mr. Duvalier's ouster.
But it has been frozen ever since because Switzerland would not give it back while the Haitian government wasn't pursuing Mr. Duvalier under its own justice system. As a way out, the Swiss government had proposed giving the money to aid groups working in Haiti.
“At a time when everyone tries to help Haiti, issuing a decision that the money belongs to the dictator's family because of the statute of limitations is very clumsy,” Prof. Pieth said. “You have a head of state with a secret army that tortures people, and at the same time he empties the state treasury. The people cannot defend themselves. It's robbing from the people, and this aspect has to be addressed by the court.”
DTN News: Canadians Help Pave Way For Looming Helmand Offensive *Two Canadian helicopter operations part of preparations for upcoming multinational assault in volatile Afghan region
*Source: DTN News / Globe and Mail Update By Josh Wingrove
(NSI News Source Info) KANDAHAR AIR FIELD, Afghanistan - February 6, 2010: Two Canadian helicopter operations in the past month were part of preparation for a massive and heavily-publicized upcoming assault by British, American and Afghan troops in volatile Helmand province, Canadian Forces officials revealed Friday. Canadian soldiers from the NATO-led coalition force are seen after exiting a CH 147 Chinook helicopter that landed in the airfield of Canadian Joint Task Force Afghanistan in Kandahar province, southern Afghanistan, March 27, 2009. Helicopters are a prime asset to move NATO-led coalition troops and supplies in the war-plagued country because convoys by road are often blown up improvised explosive devices (IEDS).
A pair of Canadian Chinook helicopters ran so-called shaping exercises – one last month, one in the past week – involving Danish and British troops in northern and central Helmand respectively.
The Chinook helicopters can carry about 40 troops at a time, and dropped foreign troops into Helmand province, west of Kandahar province where Canadian operations are focused. Both volatile provinces are expected to be the focus of renewed Western attacks with the arrival of additional American troops in the coming months.
The shaping exercises are common in advance of a large-scale assault, such as Operation Moshtarak, the upcoming Helmand assault being heavily publicized by British and American leaders.
Operation Moshtarak will focus on a region south of Nad Ali in Helmand and also involve Afghan National Army (ANA) soldiers, the British Ministry of Defence said in a statement. Moshtarak is Dari for “together,” and the name “is intended to reflect the joint nature of the operation,” the British MOD said. Canadians have trained the ANA soldiers extensively.
The Chinook operations Canadians completed involve a host of risks, including dusty terrain that can eliminate a pilot's field of vision and the risk of insurgent counter-fire.
“It's been a very hot area pretty much since the beginning,” Lieutenant Colonel Jeff Smyth, commander of Canada's helicopter operations in the Afghan mission, said of Helmand while describing the two completed missions. “It's kind of the bus driver thing. We drive in, drop them [the troops] off, then they do their thing on the ground.”
Western coalition forces have turned to air transport as a way of reducing the threat of Improvised Explosive Devices, or IEDs, which are makeshift roadside bombs that have caused the death of dozens of Canadian soldiers.
The revelation of Canadian assistance comes as American and British troops telegraph their coming strategy, in apparent hope of minimizing casualties.
The British, American and ANA forces hope to drive the Taliban insurgents from Helmand, and hold it until the ANA and Afghan government can establish control of the region.
“We are fixing the enemy with a beady eye. We are taking him on wherever he is most virulent,” British Lieutenant General Nick Parker, deputy commander of the multilateral International Security Assistance Force in Afghanistan, told the Mirror newspaper.
His bold declaration follows a similar one by Canada's top soldier, Brigadier-General Daniel Menard, who told The Globe last week he hoped to “break the back” of the Taliban this summer in nearby Kandahar province. Buoyed by the arrival of additional American troops, Brig.-Gen. Menard is confident his offensive can be a turning point in the province.
Speaking to reporters Friday at Kandahar Air Field where he attended a memorial for eight deceased Canadian soldiers, Kandahar governor Tooryalai Wesa said Friday he was confident that civilians would pay attention to the publicized strategies to avoid finding themselves caught in the midst of a civilian operation.
“People will be safe. People will be in good hands. We will be working with the people to keep them safe, and be asking for their cooperation. We definitely expect them to do what we are telling them,” Mr. Wesa said.
DTN News: BAE Reaches $450 Million Settlement With U.S., Britain*Source: DTN News / Reuters By Rosalba O'Brien and Jeremy Pelofsky
(NSI News Source Info) LONDON/WASHINGTON - February 6, 2010: BAE Systems Plc (LSE:BAES.L - News), Europe's biggest military contractor, will pay around $450 million in fines in the United States and Britain, settling long-running corruption investigations on both sides of the Atlantic.
In the United States, BAE, the Pentagon's fifth largest supplier by sales, will plead guilty to one charge of conspiring to make false statements to the U.S. government. The company will also pay $400 million in fines, one of the largest penalties against a defense contractor and comparable to the $402 million KBR Inc agreed to pay in February 2009 in a Nigerian bribery case.
According to a criminal charge filed in the U.S. District Court in Washington, BAE had gains of more than $200 million on the business related to the false statements, including deals in Saudia Arabia.
BAE will also plead guilty in Britain to one charge of breach of duty in relation to records of payments made in Tanzania. It will pay 30 million pounds ($48 million), the largest penalty imposed by Britain's Serious Fraud Office.
"While it's a substantial figure, it's less than the worse case scenario," said analyst Tina Cook at brokerage Charles Stanley, noting initial media reports had suggested a figure of up to 1 billion pounds from the SFO alone, later revised down to between 200 million and 300 million.
A statement by the SFO said its decision ended its investigations into BAE's defense contracts.
U.S. Department of Justice officials, however, said their investigations were ongoing. They declined to elaborate.
BAE Chairman Dick Olver said in a statement: "The company very much regrets and accepts full responsibility for these past shortcomings. These settlements enable the company to deal finally with significant legacy issues."
The U.S. court filing outlined a number of BAE's dealings, including the sale of fighter aircraft and other defense material to Saudi Arabia and the lease by the Swedish government of fighter aircraft to the Czech Republic and Hungary. Because the leased jets contained U.S.-controlled defense components, Sweden needed to secure an arms export license from the U.S. Department of State.
"BAES did not subject these payments and benefits to the type of internal scrutiny and review that BAES had represented it would subject them to" in previous undertakings to the U.S. government," the court document said.
A previous investigation by the Serious Fraud Office into reports BAE paid about 1 billion pounds over a decade ago to Prince Bandar bin Sultan in connection with the Saudi al-Yamamah arms deal had been halted in 2006 by former Prime Minister Tony Blair after the probe angered Saudi Arabia.
The U.S. court filing alleged the company "provided substantial benefits" to a Saudi official "in a position of influence" and to the official's associates. But the filing did not identify the individual.
In connection with the Saudi fighter deals, BAE agreed to transfer 10 million pounds and more than $9 million to a bank account controlled by an intermediary, according to the complaint. BAE "was aware that there was a high probability that the intermediary would transfer part of these payments to the KSA official," the complaint states.
U.S. UNIT NOT ACCUSED
BAE's U.S. subsidiary, BAE Systems Inc, was not accused of wrongdoing by the Justice Department. As a result, it may escape suspension or debarment from doing business with the U.S. government. The company supplies products and services to the Defense Department, U.S. intelligence and Homeland Security. The U.S. accounts for more than half of BAE's sales.
The settlement BAE reached with the SFO of Britain relates to the sale of an air traffic control system in Tanzania, a contract worth 30 million pounds, according to an SFO spokesman. Part of the 30 million pound penalty will be a fine, to be decided by a court, with the remainder as a charity payment.
After the settlement was announced, the SFO said it had withdrawn a corruption charge it filed on January 29 against Count Alfons Mensdorff-Pouilly, a BAE agent involved with BAE contracts in Eastern and Central Europe.
In London, BAE shares closed up 1.6 percent, as the market welcomed news of the settlement.
In a conference call with reporters on Friday, BAE Systems Chairman Dick Olver said the activities addressed by the settlement were "all legacy issues."
"We are now seen as a company of good standing and a responsible company to do business," he added.
He added that the settlement amounts were non-tax deductible and would be included in BAE's 2009 results.
Gavin Cunningham, head of corruption investigations at accountancy firm BDO Stoy Hayward, said the SFO penalty "sends out a powerful message to UK business that corruption is going to be investigated and prosecuted."
Some lawyers have said the SFO wanted to show it had teeth by following the examples of Germany and the United States in dealing with international corruption. In late 2008, for example, German industrial conglomerate Siemens agreed to pay just over $1.3 billion to settle corruption probes.
SFO director Richard Alderman said in a statement: "I am very pleased with the global outcome achieved collaboratively with the DoJ. This is a first and it brings a pragmatic end to a long-running and wide-ranging investigation."
(Additional reporting by Paul Sandle, James Davey, Rhys Jones and David Milliken in London, with Dan Margolies in Washington; editing by David Holmes and Andre Grenon)
DTN News: Balli Unit Settles With US Over 747 Export To Iran*Source: DTN News / Reuters
(NSI News Source Info) WASHINGTON, - February 5, 2010: A unit of Britain's Balli Group Plc pleaded guilty on Friday in a U.S. court to charges it illegally exported Boeing Co (BA.N) 747 aircraft from the United States to Iran, the U.S. Justice Department said on Friday.
The unit, Balli Aviation Ltd, agreed to pay a $2 million criminal fine and be placed on corporate probation for five years, the Justice Department said in a statement.
Balli Aviation and its parent also agreed to pay $15 million in civil penalties in settlements with the U.S. Treasury and Commerce Departments, although $2 million could be waived if there are no further export control violations.
The company was accused of violating a U.S. embargo on Iran without first obtaining the required export license or authorization from the U.S. government, the papers said.
"These charges reflect the commitment of the United States to vigorously enforce our laws against corporations that illegally seek to acquire U.S. aircraft from the U.S. on behalf of Iranian customers," Channing Phillips, acting U.S. attorney for the District of Columbia, said in a statement.
At issue were six Boeing 747 jumbo passenger jets the company's subsidiaries and affiliates owned, three of which were leased to an Armenian airline that made them available to an Iranian private airline, Mahan Air, for flights in and out of Tehran.
The other three aircraft were not put into service.
"The U.S. authorities viewed Mahan's involvement and the manner of its access to the capacity of the aircraft, as well as some of the steps taken by Balli Aviation to recover the aircraft and mitigate damages, to have breached U.S. export rules," Balli Aviation said in a statement.
The United States has strict restrictions on exports to Iran, in part because of concerns that goods could also be used for military purposes. The two countries have been at loggerheads for years.
The case is 09-cr-00366 in U.S. District Court for the District of Columbia.
(Reporting by Jeremy Pelofsky; editing by Lisa Von Ahn and Andre Grenon)
DTN News: Boeing Prepares Last Major Piece Of Hardware For International Space Station*Source: DTN News / Boeing
(NSI News Source Info) KENNEDY SPACE CENTER, Fla., - February 5, 2010: The Boeing Company [NYSE: BA] provided engineering and cargo processing services for the Tranquility module, which will be delivered to the International Space Station (ISS) on Space Shuttle Endeavour mission STS-130. Endeavour is scheduled to launch from Kennedy Space Center on Feb. 7. Crew Arrives for Dress Rehearsal ~ The crew of space shuttle Endeavour's STS-130 mission poses for a group portrait following their arrival at the Shuttle Landing Facility at NASA's Kennedy Space Center in Florida. From left are Mission Specialists Robert Behnken, Nicholas Patrick, Stephen Robinson and Kathryn Hire; Pilot Terry Virts; and Commander George Zamka.
Tranquility -- formerly referred to as Node 3 -- provides additional space for the ISS's existing life support and environmental control systems. Thales Alenia Space Italy (TASI) built the utility module and delivered it to NASA. Boeing performed final processing tasks to prepare the module for shuttle integration.
Boeing produced many of the module's components, including window panes, hatches, berthing mechanisms, ammonia hoses, and ventilation and thermal-coolant valves, at the company's Huntsville, Ala., facility. The Boeing team also provided engineering and testing support while TASI assembled and tested the module in Torino, Italy.
The Boeing Checkout, Assembly and Payload Processing Services (CAPPS) team worked with European Space Agency, TASI and other Boeing organizations to mate the seven-window cupola to the Tranquility module at Kennedy Space Center in September. It was the second time Boeing had joined two large pressurized ISS components together on the ground for launch. The first time was Node 1, which flew with a Pressurized Mating Adapter mated on either end.
"Positioning the two elements for the Tranquility mate was a complex task due to the hardware's combined size, weight and unique interfaces," said Bret McAfee, CAPPS senior engineer. "We refurbished existing support structures that Boeing had provided for the Node 1 mate activities. The CAPPS design team developed a system that combined new hardware with the existing structures to support the cupola and manipulate it for the mate with Tranquility."
Boeing is the prime contractor to NASA for the ISS. In addition to designing and building all the major U.S. elements, Boeing also is responsible for ensuring the successful integration of new hardware and software -- including components from international partners -- as well as for providing sustaining engineering work for the ISS.
The services and support Boeing provides under its CAPPS contract include planning for and receiving payloads, maintaining associated ground support systems, integrating payloads with the space shuttle, launch support, and space shuttle post-landing payload activities.
A unit of The Boeing Company, Boeing Defense, Space & Security is one of the world's largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions, and the world's largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Boeing Defense, Space & Security is a $34 billion business with 68,000 employees worldwide.
*STS-130 mission to the International Space Station aboard space shuttle EndeavourNASA - Space Shuttlehttp://www.nasa.gov/mission_pages/shuttle/main/
DTN News: U.S. Department of Defense Contracts Dated February 5, 2010
*Source: DoD issued February 5, 2010
(NSI News Source Info) WASHINGTON - February 5, 2010: U.S. Department of Defense, Office of the Assistant Secretary of Defense (Public Affairs) Contracts issued February 5, 2010 are undermentioned;
ARMY~GM GDLS Defense Group, LLC, JV, Sterling Heights, Mich., was awarded on Jan. 28, 2010, a $253,329,165 cost-plus-fixed-fee contract. This action is for a new follow-on contractor logistics support delivery order 0019 Mod DS. The contractor shall provide contractor logistics support for Stryker Family of Vehicles in both garrison and deployment locations. The period of performance is from March 1, 2010, through Feb. 28, 2011. Work is to be performed in various locations with an estimated completion date of Feb. 28, 2011. One bid was solicited with one bid received. TACOM Contracting Center, CCTA-IL, Warren, Mich., is the contracting activity (W56HZV-07-D-M112).
~The Boeing Co., Mesa, Ariz., was awarded on Feb. 1, 2010, a $108,550,867 firm-fixed-price requirement contract to support Corpus Christi Army Depot in the overhaul, repair and recapitalization of the AH-64/H-47 weapon systems. Work is to be performed in Corpus Christi, Texas, with an estimated completion date of Jan. 31, 2015. One bid solicited with one bid received. Aviation and Missile Command Contracting Center, CCAM-AL-D, Redstone Arsenal, Ala., is the contracting activity (W58RGZ-10-D-0027).
~The Boeing Co., Mesa, Ariz., was awarded on Jan. 28, 2010, a $99,270,307 firm-fixed-price contract to exercise the option for 13 aircraft in Lot 14. Work is to be performed in Mesa, Ariz., with an estimated completion date of Dec. 31, 2013. One bid was solicited with one bid received. U.S. Army Contracting Command, Aviation and Missile Command Contracting Center, Redstone Arsenal, Ala., is the contracting activity (W58RGZ-06-C-0093).
~DRS Sustainment Systems, Inc., St. Louis, Mo., was awarded on Feb. 3, 2010, a $93,694,518 firm-fixed-price contract to award delivery order 0002, which is an order of 275 M1000 trailers. Work is to be performed in St. Louis, Mo., with an estimated completion date of May 30, 2012. One bid was solicited with one bid received. U.S. Army Contracting Command, TACOM, Warren, Mich., is the contracting activity (W56HZV-09-D-0107).
~Oshkosh Corp., Oshkosh, Wis., was awarded on Feb. 1, 2010, an $84,739,677 firm-fixed-price contract for the partial exercise of the option for 627 explosively formed penetrator kits on the Mine Resistant Ambush Protected All Terrain Vehicle. Work is to be performed in Oshkosh, Wis., with an estimated completion date of May 31, 2012. Five bids were solicited with five bids received. TACOM, AMSCC-TAC-ADCA, Warren, Mich., is the contracting activity (W56HZV-09-D-0111).
AIR FORCE~Boeing Co., Seal Beach, Calif., was awarded a $75,939,504 contract which will provide for Global Positioning Satellite GPS IIF Space Vehicle, sustainment and operational control segment support for calendar year 2010. At this time, $25,000,000 has been obligated. GPSW/PK, El Segundo, Calif., is the contracting activity (F04701-96-C-0025, P00532).
~Northrop Grumman System Corp., San Diego, Calif., was awarded a $5,935,099 contract which will provide performance for engineering, manufacturing and development activities in support of the Global Hawk program. At this time, the entire amount has been obligated. 303 AESG/SYK, Wright-Patterson Air Force Base, Ohio, is the contracting activity (F33657-01-C-4600,P00349).
NAVY~Bell-Boeing Joint Program Office, Amarillo, Texas, is being awarded a $70,004,000 cost-plus-fixed-fee repair contract for repairs in support of the V-22 aircraft. Work will be performed in Ridley Park, Pa. (50 percent), and Fort Worth, Texas (50 percent), and is expected to be completed by June 2012. Contract funds will not expire before the end of the fiscal year. This contract was not competitively awarded. The Naval Inventory Control Point, Philadelphia, Pa., is the contracting activity (N00383-10-D-003N).
~Bell Helicopter Textron, Inc., Fort Worth, Texas, is being awarded an undefinitized advance acquisition contract with an estimated value of $50,394,000 for long lead materials and components associated with the manufacture and delivery of 18 Lot 8 UH-1Y build new aircraft, eight Lot 8 AH-1Z remanufactured aircraft, and two Lot 8 AH-1Z build new aircraft. Work will be performed in Fort Worth, Texas (60 percent), and Amarillo, Texas (40 percent), and is expected to be completed in January 2014. Contract funds will not expire at the end of the current fiscal year. This contract was not competitively procured. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity (N00019-10-C-0015).
~Nova Group, Inc., Napa, Calif., is being awarded $8,175,000 for firm-fixed-price task order #0002 under a previously awarded multiple award construction contract (N62473-06-D-1005) for construction of an aircraft direct fueling station and the installation of one emergency generator set at the Naval Air Facility El Centro. Work will be performed in El Centro, Calif., and is expected to be completed by January 2011. Contract funds will not expire at the end of the current fiscal year. Five proposals were received for this task order. The Naval Facilities Engineering Command, Southwest, San Diego, Calif., is the contracting activity.
DEFENSE LOGISTICS AGENCY
~RD Buie Enterprises, Boerne, Texas (SPM8E6-10-D-0003); Middle Atlantic Wholesale Lumber, Owings Mills, Md. (SPM8E6-10-D-0004); Sylvan Forest Products, Portland, Ore. (SPM8E6-10-D-0005); and S&S Forest Products, Boerne, Texas, are each being awarded a maximum $10,248,249 firm-fixed-price, total set-aside, tailored logistics support contract for wood products for the eastern region. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps and federal civilian agencies. The original proposal was Web solicited with 16 responses. Contract funds will not expire at the end of the current fiscal year. This contract includes a two-year base and three one-year options. The date of performance completion is Feb. 4, 2012. The Defense Supply Center Philadelphia, Philadelphia, Pa., is the contracting activity (SPM8E6-10-D-0006).
DTN News: Eurocopter And Spanish Ministry Of The Interior Sign Contract For 12 EC135s To Be Assembled In Albacete*Source: DTN News / EADS
(NSI News Source Info) ALBACETE, Spain - February 5, 2010: Eurocopter and the Spanish Ministry of the Interior have signed a contract for the purchase of twelve EC135 P2i helicopters. Spain's National Police Force will operate six of the new aircraft for law enforcement missions, while the remaining six will join the current fleet of the Spanish Guardia Civil. One of this latter group of helicopters will be configured for mountain rescue missions.The agreement calls for an initial delivery of four helicopters in 2010. Four more helicopters are to follow next year, and the remaining aircraft will be delivered in 2012. The 12 helicopters acquired under this new contract will join the 14 EC135s already operated by the National Police Force and the Guardia Civil (seven each). Two additional contracts are in the works and will subsequently bring the total number of EC135s up to 51, thus completing the ambitious helicopter modernization program of Spain's law enforcement agencies.
Eurocopter CEO Lutz Bertling declared on this occasion: “We are particularly pleased to sign this landmark agreement with the Spanish Ministry of the Interior, as it illustrates yet again Eurocopter's position as the leading helicopter manufacturer for public service missions. It is also gratifying for us to reach a new agreement with Spain, the third domestic country of the Eurocopter group.”
“This contract with the Ministry of the Interior proves once again that we made the right decision to set up new industrial activities in Albacete," added Juan Carlos Martínez Sáiz, CEO of Eurocopter in Spain. "Spain now ranks among the top tier countries manufacturing helicopters, and I would like to thank the Spanish government for their renewed vote of confidence in the EC135. This helicopter is a remarkable worldwide success story, and I am convinced that Spain will be fully satisfied with this new aircraft.” All 12 helicopters covered by the contract will roll off Albacete's EC135 assembly line, which is one of two lines that Eurocopter operates for the light twin-engine helicopter, along with the assembly line in Donauwörth, Germany. 11 of the 12 helicopters will be equipped for IFR flights.
The twin-engine EC135 is a highly sophisticated, multi-purpose helicopter featuring cutting-edge technology that makes it the perfect choice for public safety missions. It has been the preferred choice of parapublic operators worldwide for more than a decade. To date, Eurocopter has delivered more than 850 EC135s to customers in 40 different countries. Approximately 50 EC135s are currently operated by different customers in Spain.
Established in 1992, the Franco-German-Spanish Eurocopter Group is a Division of EADS, a world leader in aerospace, defence and related services. The Eurocopter Group employs approx. 15,600 people. In 2009, Eurocopter confirmed its position as the world’s No. 1 helicopter manufacturer in the civil and parapublic market, with a turnover of 4.6 billion Euros, orders for 344 new helicopters, and a 52 percent market share in the civil and parapublic sectors. Overall, the Group’s products account for 30 percent of the total world helicopter fleet. Its strong worldwide presence is ensured by its 18 subsidiaries on five continents, along with a dense network of distributors, certified agents and maintenance centres. More than 10,500 Eurocopter helicopters are currently in service with over 2,800 customers in more than 140 countries. Eurocopter offers the largest civil and military helicopter range in the world.
DTN News: Taiwanese Military Orders German Helicopters
*Source: DTN News / Int'l Media
(NSI News Source Info) - February 5, 2010: Taiwan's military will buy up to 20 helicopters from a German manufacturer, it was confirmed today, days after Beijing lashed out at a multibillion-dollar US arms deal with the island.
China has yet to respond to news of the agreement, thought to be the first European sale to Taiwan's armed forces since the early 90s.The EC 725 medium-sized (11t), twin-engine helicopter is the latest member of the Cougar helicopter family developed by Eurocopter. The helicopter has been developed in the military EC 725 version and in the civil EC 225 version.
Taiwan's defence ministry spokesman Martin Yu said the island would buy EC-225 search-and-rescue helicopters. The $111m contract with Eurocopter, a subsidiary of EADS, is for three helicopters, with an option to buy up to 17 more.
The move could fray Sino-European ties, already under strain over trade and currency issues. Yesterday China filed a complaint to the World Trade Organisation over the EU's anti-dumping tariffs on shoes.
The arms deal could also affect Beijing's relations with Taipei, which have improved markedly since President Ma Ying-jeou took office on a platform of improving ties two years ago.
However, others believe that China could remain silent or issue only a muted response if it is satisfied that the helicopters are not for military tasks.
"If it's for a pure civic purpose that would be no problem, but if it belongs to the defence ministry then I think it could be," said Jin Canrong, professor of international studies at Renmin University.
The Taiwanese defence ministry said it was not an arms order and the EC-225 is a civilian model. But the Taiwanese armed forces have bought non-military helicopters in the past and customised them with equipment suited to military models.
Jing Huang, an expert on Asian security and visiting fellow at the Lee Kuan Yew School of Public Policy in Singapore, said China's response was likely to depend on the exact nature of the order.
"I would be surprised if China makes a big fuss and if Eurocopter had not considered China's interests in its sales to Taiwan," he added, pointing out that the mainland was a much bigger client.
"China may think it's better not to fight on two fronts [given its anger at the US deal]. It's also talking with Europeans about lifting the arms embargo. So I believe it will be more constrained; it doesn't make sense to make a fuss before the deal is even finalised."
Defense News, which first reported the sale, said the contract would be signed within a few days.
China's foreign ministry did not immediately respond to questions on the helicopter sale. Calls to the Taiwan Affairs Office rang unanswered.
China hit back unusually hard following last week's announcement of the US's $6.4bn arms package, which includes Patriot missiles, naval minesweepers and Black Hawk helicopters. It warned of plans to impose sanctions on US firms that sell weapons to Taiwan and said it was "unavoidable" that co-operation on wider issues would be affected.
DTN News: Pakistan TODAY February 5, 2010 ~ New Dangers In Pakistan Taliban Leader's 'Death'*Source: DTN News / Int'l Media
(NSI News Source Info) ISLAMABAD, Pakistan - February 5, 2010: The death of Pakistan's Taliban supremo in a US missile strike, if confirmed, would deal a major blow to the militant nexus but could magnify the dangers should Al-Qaeda exploit a leadership vacuum.Supporters of religious party Jamiat-e-Ulema-e-Islam burn a U.S. flag to protest against the conviction of a Pakistani woman by a U.S. court, during a rally in Quetta, located in Pakistan's Baluchistan Province February 4, 2010. About 2,000 Islamists protesting against Siddiqui's conviction chanted slogans against the United States and support for Afghan Taliban leader Mullah Mohammad Omar in the southwestern city of Quetta. Aafia Siddiqui, 37, was convicted in a New York court on Wednesday for grabbing a U.S. officer's rifle while she was being questioned in 2008 in Afghanistan and firing at FBI agents and military personnel as she was wrestled to the ground. Pakistan will take all steps necessary to bring home a Pakistani woman convicted in a U.S. court for shooting at her U.S. interrogators in Afghanistan, a government spokesman said on Thursday.
US officials increasingly believe that Hakimullah Mehsud, who rose suddenly to the Taliban leadership after a US missile killed his predecessor Baitullah Mehsud six months ago, has succumbed to the same fate.
They have no physical evidence and Pakistan has not confirmed his demise officially. But neither have the Taliban issued a promised message to prove their leader is alive, since an audio recording three weeks ago.
Killing Mehsud would be a coup for the United States, which stepped up its drone war after the warlord appeared in a video with Al-Qaeda claiming a December 30 bombing that killed five CIA officers in Afghanistan.
"Hakimullah was more energetic and active than Baitullah. If it's proven he's killed, then this will be a great loss for Tehreek-e-Taliban Pakistan (TTP)," a Pakistani intelligence official told AFP on condition of anonymity.Pakistani police officers stand guard as a paramilitary soldier searches a passenger at a checkpoint near Shahi Koto in the Pakistani district of Lower Dir, Thursday, Feb. 4, 2010. The deaths of three American special operations soldiers in a roadside bombing in northwest Pakistan on Wednesday drew unwanted attention to a U.S. program of training local forces to fight the Taliban and al-Qaida, a little-publicized mission because of opposition here to American boots on Pakistani soil.
"His next successor could be Wali-ur-Rehman, who is not as active but rather more passive," the official added.
Baitullah Mehsud's death was followed by weeks of infighting among the TTP leadership, analysts believe, but the group came back with a vengeance with a series of bloody reprisal bombings once Hakimullah Mehsud was installed.
"I still don't think TTP is finished," said Rahimullah Yusufzai, one of the most prominent experts on Pakistan's wild tribal belt on the Afghan border, which shelters TTP, Al-Qaeda and Afghan Taliban commanders.
"Maybe their ability to strike back is limited but they will survive," said Yusufzai.
Hakimullah Mehsud presided over a big escalation in bombings against security installations and Pakistani civilians.
The group was blamed for a 20-hour siege of army headquarters, the slaughter of 125 people in a Peshawar market and 105 people at a volleyball game.
Hakimullah took credit, with Al-Qaeda, for killing the CIA agents in southeastern Afghanistan, the worst attack on the US spy agency in 26 years.
Reports differ on whether he was hit by US missiles on January 14 or January 17 -- one day after Mehsud attested he was alive in an audio tape.
"There's a good likelihood that he's dead," a US defense official told AFP on Thursday, arguing that with no appearance or communication by Mehsud, "the rumors of his demise become more deeply seated".
Pakistan has seen a recent decline in attacks, due perhaps to the drone war but also to sustained Pakistani offensives across the tribal belt, which analysts believe make it difficult for TTP leaders to meet and travel.
Last month, 153 people were killed by militants in Pakistan -- 101 in the volleyball attack -- nearly half the 275 killed in October, according to an AFP tally.
Pakistani officials believe that a major Pakistani offensive, launched in October against the TTP stronghold in South Waziristan, scattered the leadership to far-flung locales in Orakzai and North Waziristan.
"The problem is that the TTP cannot really function now as an effective group. They can't really meet... If you cannot even meet, how can you then coordinate your planning and attacks and defence?" said Yusufzai.
Mehmood Shah, a former security chief for the tribal belt, says the impact of Mehsud's possible demise would remain unclear until the Taliban elects a new leader, whose personality will be key the organisation's future course.
"I expect Al-Qaeda to step in if there is a leadership crisis... Al-Qaeda has the brain and vision to mount sophisticated operations to create strategic effects," he told AFP.
"There could be another rise in terrorist activities... now the leadership is on the move and hiding, their ability to undertake operations is diminished," said Shah, a retired brigadier.
"I'm not going to say it (TTP) is finished. It could at times become more dangerous. Some of the sectarian organisations, which are Punjab-based, could find more independence to undertake terrorist activities," he added.
DTN News: Kazakh Parliament Ratifies Deal On Post-Soviet Rapid Reaction Force
*Source: DTN News / RIA Novosti
(NSI News Source Info) ASTANA, Kazakhstan - February 5, 2010: Kazakhstan's parliament ratified an agreement on Thursday on establishing a post-Soviet security group's rapid reaction force.
The creation of a powerful military contingent in former Soviet Central Asia by members of the Russian-dominated Collective Security Treaty Organization (CSTO) is seen as Moscow's bid to counterbalance NATO. But its formation has run into problems caused by the regional rivalries of some members.
Speaking at a plenary session, the Central Asian state's defense minister, Bolat Sembinov, said the rapid reaction force is designed "to improve the security of the CSTO members against the backdrop of existing and potential threats," including terrorism, extremism, drug trafficking, natural disasters and to enhance the organization's role in ensuring international security.
The CSTO comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Uzbekistan and Tajikistan. Observer status is enjoyed by Iran, India, Mongolia and Pakistan.
Five of the seven members signed the agreement in February 2009. Belarus, which initially refrained from signing the deal because of a trade dispute with Russia, joined it later last year.
Uzbekistan has so far refused to join the force, saying it opposes stronger Russia's role in Central Asia. Uzbekistan is also at odds with regional neighbor Kyrgyzstan, which hosts a Russian airbase.
The Collective Rapid Reaction Force held two-week military exercises in southern Kazakhstan in October 2009, with more than 7,000 personnel from Armenia, Kazakhstan, Kyrgyzstan, Russia and Tajikistan taking part.
Russia's security strategy until 2020, recently approved by President Dmitry Medvedev, envisions the CSTO as "a key mechanism to counter regional military challenges and threats."
DTN News: U.S. Missiles In Romania Would Threaten Russia - Analyst*Source: DTN News / RIA Novosti
(NSI News Source Info) MOSCOW, Russia - February 5, 2010:U.S. plans to place elements of its global missile shield in Romania pose a real threat to Russia's national security, a Russian military analyst said on Friday.
Romanian President Traian Basescu said on Thursday his country was ready to host U.S. medium-range interceptor missiles to counter a potential ballistic missile attack, but stressed that they would not be directed at Russia.
"We are talking about the placement of the land-based Aegis system in Romania by 2015 which uses the new Standard Missile interceptor, SM-3. This weaponry, without a doubt, could significantly reduce Russia's deterrent capability," said Col. (Ret.) Igor Korotchenko, editor-in-chief of the National Defense magazine.
He said SM-3 missiles would be able to intercept Russian ballistic missiles shortly after launch and on their initial flight trajectory.
"Russia must warn Romania that if the elements of the U.S. missile shield are placed in the country they will become a target of Russia's preventive missile strikes," Korotchenko said.
Last year U.S. President Barack Obama scrapped plans for Poland and the Czech Republic to host missile shield elements to counter possible strikes from Iran. The missile shield plans infuriated Russia.
However, Washington has announced a new scheme for a more flexible system, with a combination of land- and sea-based interceptors, to be deployed in Central Europe by 2015.
U.S. Vice-President Joseph Biden visited Romania, Poland, and the Czech Republic last October to promote the new missile shield plan.
Warsaw and Prague have already expressed their support of the revamped U.S. strategy.
Korotchenko said that with ship-based SM-3s in the North, Black and Mediterranean seas, and mobile land-based SM-3s in Central Europe the western borders of Russia would be surrounded by U.S. missile interceptors by 2015.