# Tag Archives: USA

## Quiz: How loaded do US Air Force transport aircraft operate?

Let me share with you one funny quiz I did for some colleagues at the office:

On average, how loaded do US Air Force transport aircraft, C-130 Hercules and C-17 Globemaster, operate? (as a percentage of their maximum payload capacity: let’s take the figures reported by the US Air Force, ~16.5 tonnes for the C-130 -”maximum normal payload”-and 77.5 tonnes for the C-17)

Before continuing reading below, take your chance in the poll below, where I offer 4 possible responses: 3 from my colleagues’ responses to the quiz plus the correct one:

Background. Before posing the quiz to my colleagues we were commenting on a piece of news of an Antonov 124 which had landed in Spain to load some equipment weighing 1,000 kg. The An-124 reported payload capacity is 150 metric tonnes. For those not being number-crunchers: that means using the one of the biggest cargo aircraft to load it up to 0.7% of its capacity.

After having read this last paragraph you may have changed your opinion as to which is the correct answer to the quiz.

I based the correct result on a news release from the US Air Force dating from the beginning of 2007. At that time I was working in Airbus Military strategy where I would like to pick up any number related to aircraft and play with it (the hobby has stayed). That release offered figures US Central Command air transport operations, including operations Enduring Freedom (Afghanistan) and Iraqi Freedom. Find the results from that short number play:

US Air Force average loads (in tonnes) for C-130 and C-17 during 2005 and 2006.

If you do the math, you will immediately get the right answer: C-130 Hercules, 22% and C-17 Globemaster, 17%.

“What a waste of resources!” you may think. A former senior colleague pointed to that result: “You buy a Mercedes to travel with the family and baggage, then on a Sunday when having to go out to get some bread or any week day when you go alone to work… when you get to the garage and find a Mercedes… Guess which car you take?”

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Filed under Aerospace & Defence

## Looking at History through US Foreign Military Sales

If an alien came to Earth and had to quickly make sense of the last half century of History, he could get a first glimpse of geographical hot spots and changes of regime by looking at US Foreign Military Sales program data (please refer to my previous post for an explanation of the program and sources of data).

For example, take the figure below. It shows the historical data of FMS deliveries (in thousands of \$) from 1970 to 2010. As you can see deliveries stopped in 1980. What is even more telling, in the 4 years to 1979 (from 1976-79) the arms sales delivered to this country represented a whole 34% of the complete US FMS program over that period (see the total volume of deliveries in this graphic from a previous post). Which country do you think it coud be?

Which country could this be?

This alien, combining these data would know that something that happened in that country, from representing a third of military sales to not taking part in the program ever again… you may have guessed right: Iran, where the Islamic Revolution started in 1978, the Shah left the country in 1979 and at the end of that year the hostage crisis started.

Having taken a look at the graphic of Iran, find below the one for Iraq:

In the graphic you can see that from 1970 to 2005 there were not FMS agreements and deliveries from 2006. Nevertheless you can see that during the 1970′s and 1980′s there were commercial arms sales to Iraq from American contractors (this is also published by DSCA), which deliveries stopped altogether in 1990 (invasion of Kuwait in August 1990 and subsequent first Gulf war). Then, once the second Gulf war had changed the regime, commercial and FMS sales restarted from 2003.

There are plenty of cases to look at: Cuba not forming part of FMS since before 1970, Russia neither (though receiving commercial arms since 1992), Spain having been always part of FMS program (including during dictator Franco’s time) but which agreements surged in 1982 with the order of 72 McDonnell Douglas F/A-18 fighters (the same year in which it joined NATO), Chile, Venezuela, China

Russia: never part of FMS.

Before concluding this post let me show again the distribution of FMS deliveries during the last 60 years per region (shown in the previous post) and a table with the main receivers in each region:

FMS Sales per region (1950-2010, source: DSCA).

FMS Agreements per region and selected countries (1950-2010, in k\$ – source: DSCA).

Which have been then the top receivers of FMS Arms sales agreements in the period 1950-2010? In order:

1. Saudi Arabia (16.9% of global FMS program)
2. Egypt (7.3%)
3. Israel (7.1%)
4. Australia (4.1%)
5. Korea (South) (4.0%)
6. United Kingdom (4.0%)
7. Turkey (4.0%)
8. Japan (3.7%)
9. Germany (3.3%)
10. Greece (2.7%)

Filed under Aerospace & Defence

## US Foreign Military Sales

The Foreign Military Sales (FMS) is a program managed and operated by US Department of Defense (DoD) on a no-profit and no-loss basis. Countries and international organizations participating in the program pay for defense articles and services at prices that recoup the actual costs incurred by the United States. This includes a fee (currently 3.8% of what the defense articles and/or services cost, in most instances) to cover the cost of administering the program.

Foreign countries may also opt to procure directly from American contractors in Direct Commercial Sales, though FMS ensures third countries rates similar to those received by the DoD (bargaining power) but the items will be the standard procured by the USA, not especially tailored to the needs of other countries. In any case the sales will have to pass the same approval requirements for the sale of defense materials to third countries.

The Defense Security Cooperation Agency (DSCA) is the one managing this program and the one which publishes the different deals (Major Arms Sales Notification and FMS Contract Awards).

The DSCA also publishes historical data of the FMS sales by year and per country and region. (I have always admired the openness of the different US agencies in their publishing of data to work with).

In the graphic below you can see the total US arms sales agreements with foreign countries and FMS-program agreements during the last 40 years.

Total Military Sales (*) and FMS-program agreements (in k\$) per year.
[(*) Total Sales includes foreign sales not made through FMS program]

You can see how most of the agreements are close within the FMS program, which ensures moderate costs to the third countries and a standardization for US allies. You can notice as well how the first Gulf war and the recent wars in Irak and Afghanistan have increased FMS agreements.

However, given that military equipment takes time to build, there is a lag between those sales agreements and when the arms are delivered. See below the two lines representing FMS agreements and FMS deliveries (both in k\$).

FMS (in k\$): agreements vs deliveries per year.

You can see how the deliveries show a growth trend since the 1970′s, with peak at the end of ’90s.

The following question is: to which countries were those sales…

FMS Sales (1950-2010) per region.

I will end this post with this graphic, showing how the Middle East (“Near East & South East Asia”) is the region which received the most of FMS during the last 60 years. In a following post I will dive into which specific countries as that is a very interesting analysis deserving a single post.

## Where do you come from?

WordPress introduced a feature showing the geographical origin of the visits to the blog back in February (find below a map offered by WordPress – the host service of this blog). After 3 months, I decided to take a look at those stats.

Readers’ origin map provided by WordPress.

In these three months the blog received slightly above 7,700 visits; over 2,000 came from the United States and above 1,300 came from Spain (my country of origin). The top ten countries of origin summed up 75% of the visits (USA, Spain, UK, France, Germany, Canada, NL, Australia, Ireland & India). Following the famous “80/20 rule” or a Pareto distribution, the top 20% of the countries of origin summed up 85% of the visits (out of 117 countries).

Pareto distribution of blog readers per country of origin.

Finally, I had the curiosity to analyze the origin by world region. For this purpose, I compared the proportion of readers to the proportion of world population, internet users and internet penetration per region (internet users/population).

Blog readers, world population, internet users and internet penetration.

Europe, mainly due to Spain (my family and most of friends’ origin), is overrepresented (higher % of readers in relation to internet users). The other two regions overrepresented among readership are North America and Oceania, this must be due to the fact that most of the blog’s articles are written in English. Those three regions are also the ones where internet penetration is the highest.

China. In the last 3 months my blog only received 8 visits from China, that is 0.1% of the visits. China with over 1.3 billion inhabitants represents almost 20% of the world population; it counts with over 500 million internet users, over 22% of  the total; and the internet penetration is above 38%. China is clearly underrepresented among the countries of origin of the readers of the blog (0.5%). Shall I start writing more about China or in chinese language?

## Space Shuttle last ride

I already wrote that my childhood dream job was to be an astronaut and that led to pursuing aerospace studies. In the same post I recalled a small toy of the Challenger Space Shuttle and how this toy contributed to that dream. Well, this post is just an homage paid to the Space Shuttle, or officially the NASA Space Transportation System, STS.

The last mission of the STS is scheduled for next Friday, July 8th. When the Atlantis is supposed to make the last lift-off for the mission STS-135 which, after 12 days, will end the 30 years of Shuttle flights.

During our last visit to the USA, Luca and I had the chance to see one of the Space Shuttle vehicles at the National Air & Space Museum (NASM). The vehicle at display there is the Enterprise.

I already mentioned in that post there that the Enterprise is the only vehicle of the fleet which never went to outer space. It was used for training purposes, to let the astronauts train the gliding descend they would have to make once the vehicle re-entered in the atmosphere. Thus, some parts of that vehicle are dummies.

The Enterprise hasn’t got the same thermal protection tiles since it wouldn’t need them, however its surface replicates the tiles with some kind of rubber ones so the flow of air around them would be the same as in the other vehicles. Another difference is in the engines at the back. The 3 engines that the Shuttle has at the back are its orbital maneuvering system, which allow it to adjust its orbit (they’re not atmospheric engines to propel the Shuttle in its flight back to Florida). Again, since the Enterprise would never go to outer space it wouldn’t need to adjust its orbit and the engines it has are just dummies to provide the same distribution of weight and forms in the vehicle.

I also mentioned in the previous post about the visit to NASM that the vehicle was going to be named Constitution until a public campaign achieved its goal of naming it Enterprise after the spaceship featured in Star Trek.

Find below some pictures of the Enterprise at NASM:

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The Economist features this week 3 articles about the Space Shuttle program. I found parts of them very critic of the costs of the program, but nevertheless they give a somewhat complete picture of the history of the Space Shuttle and what may lay ahead for space exploration.

The different Shuttle vehicles (and other related materials) will be distributed among several museums and educational institutions. The Enterprise will leave the NASM and will go to the USS Intrepid in NYC while the Discovery will be hosted at NASM. You may find other locations in this article.

Finally, NASA just unveiled last Friday a wonderful documentary (80 minutes) about the history of the program: its launch, the vast engineering undertaking, the first mission, the Challenger and Columbia accidents, the improvements that the accidents brought, etc. To close the circle, the documentary is narrated by William Shatner, an actor of Worldly fame as he featured James T. Kirk, captain of the USS Enterprise in Star Trek. See a small trailer of the video:

PD: In the full length video, in the images shown of the mission STS-95 which brought John Glenn back to Space at age 77, appears Pedro Duque a Spanish astronaut that coincidentally was my teacher at the aerospace engineering school.

Filed under Aerospace & Defence, Movies

## Iowa Aviation Museum

“We saw a sign at the interstate and decided to come.”

This was our first exchange with the clerk at the Iowa Aviation Museum. We had just bought our tickets for 7\$ and registered our names in a pristine visitors’ list. I guess we were the first visitors of that day, probably of the week, conceivably of the month, who knows if even in the year.

Luca and I were in our way from Des Moines to Omaha. I thought it would take 4 hours but soon discovered that we would arrive much earlier than we wanted. Having already passed the exit for the John Wayne birth place, when I saw the sign for the “Iowa State Aviation Museum” I didn’t think it twice. I turned the wheel and took the exit.

We had to drive another 10 miles on a more than boring road and then 2 more miles to reach the museum at the aerodrome or the Greenfield Municipal airport.

The museum had some unique pieces from the early days of aviation (e.g. the 1st airplane ever to carry the name “Piper”, the J-2… a one derived from it was the plane I flew in Poland). Nevertheless I wanted to commend the museum for 3 other things:

• Diffusion of passion for aviation: I find it admirable that in such remote places, they do gather some resources, collect some assets and put up a museum for the delight of fans, to spread the passion for aviation and seed the souls of future engineers.
• Scheme of contributors to the museum: to finance that museum they have in place a scheme in which both companies and individuals contribute to its sustaining. In exchange they get public recognition in the form of a golden plaque at the Hall of Fame of the museum.
• Hall of Fame: I also admire the tribute paid to pioneers from the region and people who played a key role in aviation in the form of that Hall of Fame.

In that Hall of Fame you learn that an Iowan volunteer became the youngest aviator in US Army Aviation Section in WWI (Clifton P. Oleson); another Iowan built the 1st multi-passenger seaplane, the 1st twin-engine bomber, designed the 1st honeycomb structural supports and was the founder one of the companies behind today’s Lockheed Martin (Glenn L. Martin); another Iowan, this time a woman nurse, unsuccessfully sought a pilot position at Boeing Air Transport, but influenced the president with her idea of placing nurses on-board airplanes to make passengers feel more comfortable with flying (Ellen Church became the first stewardess in history); and another 2 Iowans were the chief engineer and the first pilot to fly the famous Lockheed SR-71 Blackbird (William J. Fox & Louis W. Schalk).

In the hall you also find out that an Iowan lost the first ever race between a car and an airplane (Carl S. Bates) and that a cloth sewn by the wife of a first cousin of the Wright Brothers is worthy enough to make it to the Hall of Fame (especially if that cousin happens to be the great, great, great-grandfather of a fellow from Greenfield…).

Barnstorming is a term I learnt at the museum (well, you go to museums to learn, don’t you?) that refers to the entertainment that first aviators provided in different villages in the 1920s, where they would fly as in a circus to show the airplanes to villagers, perform some stunts and get some cash by carrying affluent citizens in short demonstration flights. This, also contributed to spread the passion for flight.

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PD: I join the legion of admirers of Luca for standing these #avgeek visits not only stoically but even enthusiastically.

## Is talent really worth it? (Book review)

I am subscribed to The Economist since about 3 years ago. It not only provides with very interesting articles every week and lots of new ideas, but from time to time I am asked to take part in surveys. As a way to show appreciation they normally offer a study, a book, etc…

The latest book that I received from them and read is “Pay check. Are top earners really worth it?”, by David Bolchover.

The book is ferocious critique of CEO’s and finance workers’ pay. The average CEO in the USA earned in 1980 42 times the average blue-collar salary, while by 2000 this multiple increased to 531 times!

The book makes a clear difference between entrepreneurs, true generators of wealth, and the top management of multinational companies. He argues that there are three necessary conditions to award a high pay to the CEO:

• Enough revenues available.
• The CEO should have a measurable and substantially positive impact in the company (e.g. like one could defend the impact of a sports star within a team).
• We would need to demonstrate beyond reasonable doubt that his abilities are extremely rare making him difficult to replace (could Jordan be replaced in Chicago Bulls?).

More often than not, this is not the case.

The favourite excuse being used to award exorbitant salaries is the scarcity of “talent”. The origin of the “talent” ideology seems to be the 1998 article from McKinsey “The War for Talent”.

Some of the extreme cases cited in the book…

• Lehman Brothers CEO at the time of bankruptcy, Dick Fuld, who in his 15 years as CEO pocketed \$466 million (\$34M in 2007) before filing the largest bankruptcy in history (with \$613 billion in debts), placing him as the worst CEO in American history according to Portfolio magazine.
• Oil companies BP and Shell which both CEOs missed the objectives in 2008 yet still managed to be handed the undeserved bonus by the compensation committee from each company!

The author states that today, the main enemy of capital is… “talent”, those undeservingly taking the money away from shareholders and calls for shareholder activism to revert this situation and bring the money to whom it belongs (us, the shareholders… either directly or through investment and pension funds…).

I do recommend this book (~125 pgs.).

Filed under Books, Economy, Investing, Personal development & HR

## World War III

Beginning of June I bought at Schiphol airport the book “The Next 100 Years; A Forecast for the 21st Century”, by George Friedman (author of “America’s Secret War”). I receive sometimes at the job reports and articles by Stratfor, the intelligence and forecasting firm that George Friedman founded. This was one of the reasons that raised my attention, the other were the headlines that could be read in the front page “2020: China Fragments”, “2050: Global war”…

Cover of "The Next 100 Years".

Friedman’s book tells us that when thinking about geopolitics we should be aware of:

• Experience tells us that we should expect the unexpected.
• We should not be confused by passing chaos and cyclical crisis.
• Humans and countries are not that free when taking decisions, but they see limited their options by several constrains. He goes looking for such constrains.

If he had written the book in 1900 he would have pinpointed the following three things as defining for the century:

• Collapse of European Imperial System
• Revolution in transportation & communications.

Now, at the beginning of the XXI century he guesses the three defining issues will be:

• The rise of American power
• The end of the population explosion
• The development of technologies to deal with a declining population.

You may wonder “the rise of American power?”, yes he makes the case that North American power has just started and it’s here to last: technology, economic power, control of the World’s seas (US Navy), military power, access to both Atlantic and Pacific oceans…

As he says, the USA “had the ultimate aim of preventing any major power in Eurasia. The paradox, however, is as follows: the goal of these interventions was never to achieve something –whatever the political rhetoric might have said- but to prevent something. [...] Its goal was not to stabilize but to destabilize. [...] The USA has no interest in winning a war outright.”

With this in mind, he explores what may happen in the next hundred years: Russia trying to reassert  itself, China fragmenting, Poland, Turkey & Japan as rising powers, some of them starting a global war, space-based power generation, Mexico challenging the US…

Filed under Books

## Scotch whisky

Yesterday I was reading an article in The Economist about the whisky industry, and I found a thread to follow: Spain being the third largest export market of Scotch whisky!

After having travelled through different European countries and seeing the drinking habits in each place I could almost predict that more whisky was consumed here than in other European countries.

I searched for the source of these data, the Scotch Whisky Association (SWA), which published a release in April 15th on the export data from 2009.

Despite the global crisis, whisky exports continued to rise both in terms of revenues and bottles. But let’s dig into the data.

Looking first at the numbers of bottles exported we see that the leading country is France with almost 180 million 70cl bottles, followed by USA and Spain (with 87 million bottles). The first 10 countries account for 60% of the export market.

Because France and USA are more populated than Spain, I was interested in comparing the ratio number of bottles exported by inhabitant… and now the leading country was by far Singapore, with over 10 bottles per inhabitant per year… either there is something we miss in the picture or there is very heavy scotch drinking going on there (taking into account that not everyone drinks whisky, less people imported scotch). Among those 10 main markets Spain again came in third with an average of 1.9 bottles per inhabitant, though we should keep in mind that this number only reflects the bottles exported from Scotland; not whisky consumption in the country (Irish, US or Spanish whisky is not counted here).

Scotch whisky exports, by number of bottles.

There is another statistic given in the same release: revenues. What I wanted to know with this was the export price per bottle.  Not all top ten countries by number of bottles were among the top ten by revenues, but with those which were I did the calculation. The average price resulted 2.9 sterling pounds, around 3.37 €… so the other ~9€ up to the 12€ price you see in the shop are costs related to transportation, retail shops, etc.

Scotch whisky exports, by revenues and bottle price.

In the SWA site you may find very useful information such as distilleries to be visited in Scotland, etc.

Filed under Miscellanea

## Largest defence companies

The Stockholm International Peace Research Institute (SIPRI) is, in their own words, an independent international institute dedicated to research into conflict, armaments, arms control and disarmament. Every year they publish their famous SIPRI Yearbook with data about international conflicts, defence spending, defence companies…

In a previous post I showed cartograms of countries relative to their defence spending, etc. In this post I want to show a bit about the industry.

From the information of last year’s book, we find that of the 10 world biggest defence companies 6 are US companies and 4 European, though the biggest one is the British BAE Systems.

Among the first hundred companies (121 including subsidiaries) there are 4 Spanish: CASA (EADS), Navantia, Indra and Santa Barbara (General Dynamics). This places Spain as the 7th country by number of large defence companies. SIPRI publishes as well a fact sheet titled “Trends in International Arms Transfer”; in that one (data from 2005-2009) Spain is placed as the 8th country by arms exports.

Countries by number of large defence companies.

Countries by defence sales.

Finally, with the information provided by SIPRI I built the following (simplified) table where you may see which are the biggest defence companies by revenues and see how much of their business is relying on defence activities (big conglomerates like GE or UTC do not rely heavily on defence).

Defence companies by defence revenues and reliance on defence.

It is also interesting to look at the previous picture but isolating only the US companies…

US Defence companies by defence revenues and reliance on defence.

… and then taking a look at European ones:

European Defence companies by defence revenues and reliance on defence.

You may see that the top-right corner is almost exclusive domain of US companies, except for BAE, which has a big presence in the US defence market.

In this latest table you would see how the complete picture (with all 121 companies) would look like, with an atomization of smaller companies at the bottom.

Complete picture with 121 companies.