Posts Tagged ‘BAE Systems’

Japan’s new advanced fighter may be based on existing foreign design

March 8, 2018

Reuters

TOKYO (Reuters) – Japan is seeking proposals for a new advanced jet fighter based on an existing Western aircraft and wants American and British cooperation to help kick-start development of the project, which is estimated to cost around $40 billion, three sources said.

 Image result for X-2 Shinshin, Photos

FILE PHOTO: A prototype of the first Japan-made stealth fighter X-2 Shinshin, formerly called ATD-X, takes off to mark its maiden flight at Nagoya Airfield, also known as Komaki Airport, in Toyoyama town, Aichi prefecture, Japan, in this photo taken by Kyodo April 22, 2016. Mandatory credit Kyodo/via REUTERS/File Photo

Japan this month issued a third request for information (RFI) to defense companies, seeking proposals for the new aircraft, dubbed the F-3. Unlike the first two requests, this one went only to foreign companies in the United States and Europe, with a separate, more detailed document delivered to London and Washington, according to the sources, who have direct knowledge of the requests.

“Japan expects specific proposals for designs based on existing aircraft,” said one of the sources. The two previous RFIs did not attract any detailed proposals, he added.

The requests for a design based on existing aircraft and the separate documents sent to the British and U.S. governments have not been previously reported.

The sources declined to be identified because they are not authorized to speak to the media.

Existing airframes Japan could use include the F-35 Lightning II stealth jet built by Lockheed Martin Corp or Boeing Co’s F/A-18E/F Super Hornet; and the Eurofighter Typhoon, manufactured by a European consortium including BAE Systems Plc.

Japan’s last domestically produced jet fighter, the F-2, which entered service in 2000, was built jointly by Mitsubishi Heavy Industries (MHI) and Lockheed Martin based on the U.S. F-16 multi-role fighter. As Japan’s leading fighter maker, MHI, which built the World War Two-era A6M Zero, would anchor the Japanese share of the F-3 project.

“We are considering domestic development, joint development and the possibility of improving existing aircraft performance, but we have not yet come to any decision,” a Ministry of Defense representative said.

Building Japan’s next-generation fighter based on a foreign aircraft already in service could save money, but come at the expense of advanced features like stealthy shaping. Neither the Typhoon nor Super Hornet are designed to be near-invisible to radar.

“Boeing is very interested in working with the U.S. and Japan governments in order to collaborate with Japanese industry on the next fighter program,” a Boeing spokesman said.

Lockheed Martin and BAE Systems, Britain’s largest defense company, were not immediately available for comment.

Japan’s approaches to the U.S. and British government come as Washington considers its replacement for the F-22 Raptor. Britain, which has sought closer security ties to Japan, including cooperation on developing other defense equipment, may eventually need a fighter to succeed the Typhoon.

Japan, which is buying the radar-evading F-35 stealth jet to modernize its air defenses in the face of growing Chinese military strength, wants to introduce a separate air superiority fighter in the 2030s to help deter intrusions into its airspace.

Japan has so far struggled to come up with its own design for a new aircraft, raising a question mark over the country’s first jet fighter program since the F-2.

Japan will need begin preliminary talks with Washington soon if it wants to include anything substantial about the F-3 in the new five-year defense equipment plan, which begins in April 2019. Details on that plan will be released at the end of the year, another of the sources said.

Although some defense ministry officials and lawmakers have lobbied for a domestically made aircraft to help sustain Japan defense companies hurt by increased spending on U.S. gear, finance officials have questioned whether that is cost effective.

Opting for international cooperation should lower the cost of a new jet by expanding the number of users, spreading the unit cost beyond Japan’s air force.

Mitsubishi Heavy tested a prototype stealth jet in 2016, the ATD-X or X-2, which cost the Japanese government $350 million to develop.

Reporting by Tim Kelly and Nobuhiro Kubo; Editing by Gerry Doyle

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Japan’s Scraps Domestic Development of 5th Generation Stealth Fighter Jet

Japan’s Ministry of Defense Acquisition Technology & Logistics Agency (ATLA) is expected to discontinue work on a domestically designed fifth-generation fighter jet due to budgetary concerns and critical capacity shortages in the country’s military aircraft industry, The Asahi Shimbun newspaper reports on March 5.

Japan’s Ministry of Defense will purportedly not seek funds for the development of Mitsubishi Heavy Industries’ experimental fifth-generation fighter technology demonstrator X-2 “Shinshin” (formerly the ATD-X) when requests by agencies and ministries are compiled this summer for the fiscal 2019 defense budget.

As of this writing, Japan’s MoD has not publicly commented on the March 5 report.

The decision to scrap the program was not unexpected for Japan defense watchers. As I explained in July 2016, Japan had three options for procuring for the new aircraft: “First, develop an indigenous air superiority fighter. Second, partner with a foreign defense contractor and license-produce a new aircraft. Third, import or upgrade an existing platform.” The first option now appears to have been nixed.The X-2 prototype was intended to serve as the basis for the development of Japan’s first indigenously designed fifth-generation stealth fighter jet, designated the F-3. Japan is now expected to collaborate with the U.S. defense industry and other international partners to either jointly develop a next-generation stealth fighter jet or purchase jets directly from a foreign vendor.

Interestingly, U.S. defense firm Lockheed Martin has been involved with the F-3 program in some unknown capacity and is a possible candidate for a future collaborative partnership. The recent news that Japan is interested in procuring at least 20 additional ready-to-fly F-35A stealth fighter jets from Lockheed Martin could be a first sign of an emerging Japan-Lockheed Martin partnership in that regard.

“The follow-up order of 25 F-35As could perhaps be part of a Japanese strategy to convince Lockheed Martin and the U.S. government to share fifth-generation aircraft technology with Japan’s defense industry,” I speculated last month. “Japan now, in collaboration with Lockheed Martin and other international partners, could aim to build a (pricier) domestic variant of the F-22.”

Japan originally intended to procure Lockheed Martin’s F-22 Raptor, but the U.S. government refused an export license, forcing Japan to initiate its own stealth fighter jet program in the 2000s. The Japanese MoD plans to induct up to 100 fifth-generation fighter jets by the 2030s. A contract, estimated to be worth over $40 billion, was initially expected to be awarded this summer, but there has been no official progress report on the tender so far in 2018 and the decision will most likely be postponed.

According to various sources, the Japan Self-Defense Force (JSDF) is also interested in purchasing the F-35B – the U.S. Marine Corps variant of F-35 Joint Strike Fighter capable of vertical or short takeoffs and vertical landings without requiring a catapult launcher. JSDF would deploy the aircraft on Japanese islands skirting the East China Sea and aboard Izumo-class helicopter carriers, which will make the acquisition of such platforms a politically sensitive subject in Japan.

https://thediplomat.com/2018/03/japans-scraps-domestic-development-of-5th-generation-stealth-fighter-jet/

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The U.S. Returns to ‘Great Power Competition,’ With a Dangerous New Edge

February 13, 2018

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USS Carl Vinson U.S. aircraft carrier pulls into port at Guam. (Photo: U.S. Navy / Flickr)

The Trump administration’s new National Defense Strategy is being touted as a sea change in U.S. foreign policy — a shift from the “war on terrorism” to “great power competition,” a line that would not be out of place in the years leading up to World War I.

But is the shift really a major course change, or a re-statement of policies followed by the last four administrations?

The U.S. has never taken its eyes off its big competitors.

It was President Bill Clinton who moved NATO eastwards, abrogating a 1991 agreement with the Russians not to recruit former members of the Warsaw Pact that is at the root of current tensions with Moscow. And, while the U.S. and NATO point to Russia’s annexation of the Crimea as a sign of a “revanchist” Moscow, it was NATO that set the precedent of altering borders when it dismembered Serbia to create Kosovo after the 1999 Yugoslav war.

It was President George W. Bush who designated China a “strategic competitor,” and who tried to lure India into an anti-Chinese alliance by allowing New Delhi to violate the Nuclear Non-Proliferation Treaty. Letting India purchase uranium on the international market — it was barred from doing so by refusing to sign the NPT — helped ignite the dangerous nuclear arms race with Pakistan in South Asia.

And it was President Barack Obama who further chilled relations with the Russians by tacitly backing the 2014 coup in the Ukraine, and whose “Asia pivot” has led to tensions between Washington and Beijing.

So is jettisoning “terrorism” as the enemy in favor of “great powers” just old wine, new bottle? Not quite. For one thing the new emphasis has a decidedly more dangerous edge to it.

1914 vs. Today

In speaking at Johns Hopkins, Defense Secretary James Mattis warned, “If you challenge us, it will be your longest and worst day” — a remark aimed directly at Russia.

NATO ally Britain went even further. Chief of the United Kingdom General Staff, Nick Carter, told the Defense and Security Forum that “our generation has become used to wars of choice since the end of the Cold War,” but “we may not have a choice about conflict with Russia.” He added, “The parallels with 1914 are stark.”

Certainly the verbiage about Russia and China is alarming. Russia is routinely described as “aggressive,” “revisionist,” and “expansionist.” In a recent attack on China, U.S. Defense Secretary Rex Tillerson described China’s trade with Latin America as “imperial,” an ironic choice of words given Washington’s more overtly imperial history in the region.

But there are differences between now and the run up to the First World War. In 1914, there were several powerful and evenly matched empires at odds. That is not the case today.

While Moscow is certainly capable of destroying the world with its nuclear weapons, Russia today bears little resemblance to 1914 Russia — or, for that matter, the Soviet Union.

The U.S. and its NATO allies currently spend more than 12 times what Russia does on its armaments, and even that vastly underestimates Washington’s actual military outlay. A great deal of U.S. spending is not counted as “military,” including nuclear weapons, currently being modernized to the tune of $1.5 trillion.

The balance between China and the U.S. is more even, but the U.S. still outspends China almost three to one. Fact in Washington’s major regional allies — Japan, Australia, and South Korea — and that figure is almost four to one. In nuclear weapons, the ratio is vastly greater: 26 to 1 in favor of the U.S. Add NATO and the ratios are 28 to 1.

This isn’t to say that the military forces of Russia and China are irrelevant. Russia’s intervention in the Syrian civil war helped turn the tide against the anti-Assad coalition put together by the United States. But its economy is smaller than Italy’s, and its “aggression” is arguably a response to NATO establishing a presence on Moscow’s doorstep.

Meanwhile, China has two military goals: to secure its sea-borne energy supplies by building up its navy, and to establish a buffer zone in the East and South China seas to keep potential enemies at arm’s length. To that end it has constructed smaller, more agile ships, and missiles capable of keeping U.S. aircraft carriers out of range, a strategy called “area denial.” It has also modernized its military, cutting back on land-based forces and investing in air and sea assets. However, it spends less of its GDP on its military than does the U.S.: 1.9 percent as opposed to 3.3 percent as of 2016.

Beijing has been heavy-handed in establishing “area denial,” alienating many of its neighbors — Malaysia, Vietnam, the Philippines, and Taiwan — by claiming most of the South China Sea and building bases in the Paracel and Spratly islands.

But China has been invaded several times, starting with the Opium Wars of 1839 and 1856, when Britain forced the Chinese to lift their ban on importing the drug. Japan invaded in 1895 and 1937. If the Chinese are touchy about their coastline, one can hardly blame them.

China is, however, the United States’ major competitor and the second largest economy in the world. It has replaced the U.S. as Latin America’s largest trading partner and successfully outflanked Washington’s attempts to throttle its economic influence. When the U.S. asked its key allies to boycott China’s new Asian Infrastructure Investment Bank, with the exception of Japan, they ignored Washington.

However, commercial success is hardly “imperial.”

Is this a new Cold War, when the U.S. attempted to surround and isolate the Soviet Union? There are parallels, but the Cold War was an ideological battle between two systems, socialism and capitalism. The fight today is over market access and economic domination. When Secretary of State Rex Tillerson warned Latin America about China and Russia, it wasn’t about “Communist subversion,” but trade.

Behind the Shift

There are other players behind this shift.

For one, the big arms manufacturers — Lockheed Martian, Boeing, Raytheon, BAE Systems, Northrop Grumman, and General Dynamics — have lots of cash to hand out come election time. “Great power competition” will be expensive, with lots of big-ticket items: aircraft carriers, submarines, surface ships, and an expanded air force.

This is not to say that the U.S. has altered its foreign policy focus because of arms company lobbies, but they do have a seat at the table. And given that those companies have spread their operations to all 50 states, local political representatives and governors have a stake in keeping — and expanding — those often high paying jobs.

Nor are the Republicans going to get much opposition on increased defense spending from the Democrats, many of whom are as hawkish as their colleagues across the aisle. That’s true even though higher defense spending — coupled with the recent tax cut bill — will rule out funding many of the programs the Democrats hold dear. Of course, for the Republicans that dilemma is a major side benefit: cut taxes, increase defense spending, then dismantle social services, Social Security, and Medicare in order to service the deficit.

And many of the Democrats are ahead of the curve when it comes to demonizing the Russians. The Russian bug-a-boo has allowed the party to shift the blame for Hillary Clinton’s loss to Moscow’s manipulation of the election, thus avoiding having to examine its own lackluster campaign and unimaginative political program.

There are other actors pushing this new emphasis as well, including the Bush administration’s neoconservatives who launched the Iraq War. Their new target is Iran, even though inflating Iran to the level of a “great power” is laughable. Iran’s military budget is $12.3 billion. Saudi Arabia alone spends $63.7 billion on defense, slightly less than Russia, which has five times the population and eight times the land area. In a clash between Iran and the U.S. and its local allies, the disparity in military strength would be closer to 60 to 1.

However, in terms of disasters, even Iraq would pale before a war with Iran.

The most dangerous place in the world right now is the Korean Peninsula, where the Trump administration appears to be casting around for some kind of military demonstration that will not ignite a nuclear war. But how would China react to an attack that might put hostile troops on its southern border?

Piling onto Moscow may have consequences as well. Andrei Kostin, head of one of Russia’s largest banks, VTB, told the Financial Times that adding more sanctions against Russia “would be like declaring war.”

The problem with designating “great powers” as your adversaries is that they might just take your word for it and respond accordingly.

Qatar arms deal slammed amid concerns over human rights, regional rift

December 12, 2017

A member of staff works in the cockpit of an aircraft on the Eurofighter Typhoon production line at BAE systems Warton plant near Preston, northern England September 7, 2012. (Reuters)

LONDON: A major UK-based anti-arms-trade group has criticized the sale of 24 Typhoon fighter jets to Qatar, telling Arab News that Britain must “make sure weapons are not being sold to human-rights-abusing regimes.”

The outcry follows the announcement on Sunday that British company BAE Systems has agreed a $6.7 billion deal with the Gulf nation of Qatar to supply two dozen Eurofighter Typhoon aircraft.

According to Reuters, the jets are due to be delivered from late 2022, with the deal strongly supported by the British government as it secures around 5,000 manufacturing jobs in England.

Reacting to the news, the Campaign Against Arms Trade (CAAT) spokesperson Andrew Smith told Arab News: “The Qatari regime has an appalling human rights record. There is a tense political situation in the region, and these arms sales will not make it any safer. They are characteristic of the huge levels of political and military support that the UK government is prepared to offer to human rights abusers and dictatorships.”

The CAAT is of course committed to halting the sale of all arms, with Smith explaining, “We do not support arms sales to anyone, but the immediate priority has to be to make sure weapons are not being sold to human rights abusing regimes, or into war zones. The overwhelming majority of UK arms are sold to dictatorships and human rights abusers.”

The latest sale of 24 Typhoon jets to the Qatar Emiri Air Force takes the total number sold worldwide to 623, which includes 28 to Kuwait, 72 to Saudi Arabia, 143 being used by Germany, and 160 in use by the UK. Qatar is the ninth country to buy the Eurofighter Typhoon warplane.

In a statement on the Qatari deal, BAE Systems Chief Executive Charles Woodburn said: “We are delighted to begin a new chapter in the development of a long-term relationship with the State of Qatar and the Qatar Armed Forces, and we look forward to working alongside our customer as they continue to develop their military capability.”

The move follows a string of arms deals signed between Qatar and French entities last week, including 12 Rafale fighter jets.

Harvard scholar and Iranian affairs expert Majid Rafizadeh criticized that move.

“France should be cognizant of the fact that such a deal would only ratchet up radicalism, violence and militarization of conflicts in the region,” he told Arab News.

“Qatar is funding, arming, and training extremist groups and militias across the region. As Qatar and its ally the Iranian regime are top states sponsor of terrorism, France deal and its rapprochement with Qatar will only empower and embolden terrorist groups in the region. In addition, weapons and military equipments sold to Qatar can easily fall in the hands of terrorist groups.”

BAE Systems to shed more than 1,000 UK jobs

October 9, 2017
© AFP | BAE faces slowing demand for the Eurofighter Typhoon, which was jointly developed with Airbus and Finmeccanica
LONDON (AFP) – British military equipment maker BAE Systems will axe more than 1,000 jobs in Britain, or just over one percent of its total workforce, media reported Monday.

BAE will cut “well over 1,000” jobs, Sky News reported citing unnamed insiders. Sources added that Brexit was “not a factor” behind the move.

The London-listed company has 34,600 staff in Britain and 83,000 worldwide.

BAE faces slowing demand for the Eurofighter Typhoon jet, developed with the help of Italy’s Finmeccanica and Airbus as part of a European consortium.

“BAE Systems continually reviews its operations to make sure we are performing as effectively and efficiently as possible, delivering our commitments to existing customers and ensuring we are best placed to secure future business,” the firm said in a brief statement issued to media.

“If and when there are any changes proposed we are committed to communicating with our employees and their representatives first,” it added.

Pentagon Takes Control of F-35 Cost-Cutting Push

October 8, 2017

The price of the combat jet has been falling, but some military chiefs are concerned about the pace and source of savings

Image result for F-35, photos

The Pentagon has taken over an effort to cut the cost of the F-35 combat jet, after rejecting plans proposed by Lockheed Martin Corp. and its partners, as it tries to make a program estimated to cost $400 billion more affordable.

The U.S. plans to buy more than 2,400 of the jets over the next three decades to replace much of its combat fleet. But after years of delays and overruns drew flak from lawmakers and Donald Trump, the military has been pressing suppliers to reduce the cost of producing and flying the F-35.

The aircraft’s sticker price has fallen in recent sales to the U.S. and other countries, in part because of a contractor-led effort launched in 2014 called the Blueprint for Affordability that invested $170 million to make the jets cheaper to produce.

Lockheed and the Pentagon announced plans in July 2016 to continue the program, with the company and partners Northrop Grumman Corp. and BAE Systems PLC investing another $170 million over three years in cost-saving measures. The contractors said the initial plan saved $230 million and could be worth $4 billion over the life of the program.

Some military chiefs, however, have expressed concern about the pace and source of savings. In January, Defense Secretary Jim Mattis also ordered a review of the high-profile program.

The Pentagon opted this summer not to press ahead with the extension and instead last month gave Maryland-based Lockheed a $60 million contract to pursue further efficiency measures, with more oversight of how the money was spent.

“Using a contract vehicle instead of an agreement with industry provides the government with greater insights into the cost savings efforts,” said the F-35 program office, led since May by Navy Rear Adm. Mat Winter.

A U.S. Air Force F-35 Lightning II flies over Estonia in April. The U.S. plans to buy more than 2,400 of the jets over the next three decades to replace much of its combat fleet. Photo: Christine Groening/ZUMA Press

The F-35 leadership say they want more of the cost-saving effort directed at smaller suppliers that haven’t been pressured enough. A quarter of the initial $60 million is earmarked for projects outside the main three contractors. The Pentagon said it may boost its investment to $170 million if the initial efforts yield e nough savings.

Pratt & Whitney, a unit of United Technologies Corp. that makes the engines for the F-35, is continuing a separate effort to reduce costs.

The Pentagon has also yet to approve a plan announced last year for the three main companies to spend $250 million over five years to shave 10% off the running costs of the F-35 fleet over its lifetime, which are estimated to be more than $1.1 trillion for the U.S. aircraft. Allies plan to buy another 500 jets.

That huge bill led the Pentagon to consult with logistics experts at companies including Wal-Mart Stores Inc. to find potential savings. President Trump, who frequently criticized the F-35 on the campaign trail and before taking office, also held multiple direct discussions with Lockheed Martin Chief Executive Marillyn Hewson.

The company has pledged to aggressively drive down the costs of the F-35 program, which is central to its growth and already delivers almost a quarter of its sales.

Lockheed said the new arrangement won’t affect those efforts, even as the efficiency drive has been hampered by the Air Force cutting its planned annual procurement to around 60 jets from 80.

“The government’s decision to fund this next phase of cost-reduction initiatives is a testament to their confidence in our ability to deliver the cost savings, based on the success of the original Blueprint for Affordability projects,” said Jeff Babione, Lockheed’s F-35 general manager.

The latest cost-saving push is part of a plan to reduce the price of the F-35A model—the plane used by the U.S. Air Force and most overseas allies—to around $80 million by 2020, after adjusting for inflation. Officials estimated that 75% of the target is tied to efficiencies gained from higher output, with the balance coming from efforts like the Blueprint for Affordability program.

Lockheed is currently negotiating a deal with the Pentagon for an 11th batch of jets, which it hopes to conclude by the end of the year. The last sale, agreed on in January, priced the F-35A at $94.6 million each, a 7.3% drop from the previous batch. That price was broadly in line with the Pentagon’s price target before Mr. Trump took aim at the program.

However, critics say the claimed prices don’t capture the full cost of the jets once additional modifications, added later, are included.

“There’s very little transparency about it,” said Dan Grazier, of the Project on Government Oversight, a Washington, D.C.-based watchdog.

https://www.wsj.com/articles/pentagon-takes-control-of-f-35-cost-cutting-push-1507464002

China’s Secret Weapon in South Korea Missile Fight: Hackers

April 21, 2017

China denies it is retaliating over the Thaad missile system, but a U.S. cybersecurity firm says they are

This 2015 handout photo from the U.S. Department of Defense shows a terminal High Altitude Area Defense interceptor being test launched on Wake Island in the Pacific Ocean.

This 2015 handout photo from the U.S. Department of Defense shows a terminal High Altitude Area Defense interceptor being test launched on Wake Island in the Pacific Ocean. PHOTO: AFP PHOTO / DOD / BEN LISTERMAN
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April 21, 2017 5:20 a.m. ET

Chinese state-backed hackers have recently targeted South Korean entities involved in deploying a U.S. missile-defense system, says an American cybersecurity firm, despite Beijing’s denial of retaliation against Seoul over the issue.

In recent weeks, two cyberespionage groups that the firm linked to Beijing’s military and intelligence agencies have launched a variety of attacks against South Korea’s government, military, defense companies and a big conglomerate, John Hultquist, director of cyberespionage analysis at FireEye Inc., said in an interview.

No automatic alt text available.

The California-based firm, which counts South Korean agencies as clients, including one that oversees internet security, wouldn’t name the targets.

While FireEye and other cybersecurity experts say Chinese hackers have long targeted South Korea, they note a rise in the number and intensity of attacks in the weeks since South Korea said it would deploy Terminal High-Altitude Area Defense, or Thaad, a sophisticated missile-defense system aimed at defending South Korea from a North Korean missile threat.

China opposes Thaad, saying its radar system can reach deep into its own territory and compromise its security. South Korea and the U.S. say Thaad is purely defensive. The first components of the system arrived in South Korea last month and have been a key issue in the current presidential campaign there.

One of the two hacker groups, which FireEye dubbed Tonto Team, is tied to China’s military and based out of the northeastern Chinese city of Shenyang, where North Korean hackers are also known to be active, said Mr. Hultquist, a former senior U.S. intelligence analyst. FireEye believes the other, known as APT10, may be linked to other Chinese military or intelligence units.

China’s Ministry of Defense said this week Beijing has consistently opposed hacking, and that the People’s Liberation Army “has never supported any hacking activity.” China has said it is itself a major hacking victim but has declined to offer specifics.

Mr. Hultquist said the two hacking groups gained access to their targets’ systems by using web-based intrusions, and by inducing people to click on weaponized email attachments or compromised websites. He declined to offer more specific details.

HACK ATTACKS

Recent cyberattacks attributed to Chinese state-backed groups.

  • Since February Spear-phishing* and watering hole** attacks were conducted against South Korean government, military and commercial targets connected to a U.S. missile defense system.
  • February, March Attendees of a board meeting at the National Foreign Trade Council were targeted with malware through the U.S. lobby group’s website.
  • Since 2016 Mining, technology, engineering and other companies in Japan, Europe and North America were intruded on through third-party IT service providers.
  • 2014-2015 Hackers penetrated a network of U.S. Office of Personnel Management to steal records connected to millions of government employees and contractors.
  • 2011-2012 South Korean targets, including government, media, military and think tanks were targeted with spear-phishing attacks.
  • *Sending fraudulent emails made to look as if they come from a trusted party in order to trick a target into downloading malicious software.
  • **A strategy in which the attacker guesses or observes which websites a targeted group often uses and infects them with malware to infect the group’s network..
  • Sources: FireEye, Trend Micro, Fidelis, PricewaterhouseCoopers and BAE Systems, WSJ reporting

Mr. Hultquist added that an error in one of the group’s operational security provided FireEye’s analysts with new information about the group’s origins.

South Korea’s Ministry of Foreign Affairs said last month that its website was targeted in a denial-of-service attack—one in which a flood of hacker-directed computers cripple a website—that originated in China.

A spokesman said that “prompt defensive measures” ensured that the attacks weren’t effective, adding that it was maintaining an “emergency service system” to repel Chinese hackers.

The ministry this week declined to comment further, or to say which cybersecurity firm it had employed or whether he thought the attacks were related to Thaad.

Another cybersecurity company, Russia’s Kaspersky Lab ZAO, said it observed a new wave of attacks on South Korean targets using malicious software that appeared to have been developed by Chinese speakers starting in February.

The attackers used so-called spear-phishing emails armed with malware hidden in documents related to national security, aerospace and other topics of strategic interest, said Park Seong-su, a senior global researcher for Kaspersky. The company typically declines to attribute cyberattacks and said it couldn’t say if the recent ones were related to Thaad.

The two hacking groups with alleged ties to Beijing have been joined by other so-called hacktivists—patriotic Chinese hackers acting independently of the government and using names like the “Panda Intelligence Bureau” and the “Denounce Lotte Group,” Mr. Hultquist said.

South Korea’s Lotte Group has become a particular focus of Chinese ire after the conglomerate approved a land swap this year that allowed the government to deploy a Thaad battery on a company golf course.

Last month, just after the land swap was approved, a Lotte duty-free shopping website was crippled by a denial-of-service attack, said a company spokeswoman, who added that its Chinese website had been disrupted with a virus in February. She declined to comment on its source.

China’s Ministry of Foreign Affairs didn’t respond to questions about the website attacks. The ministry has previously addressed Lotte’s recent troubles in China by saying that the country welcomes foreign companies as long as they abide by Chinese law.

The U.S. has also accused Chinese state-backed hacking groups of breaking into government and commercial networks, though cybersecurity firms say such activity has dropped since the two nations struck a cybersecurity deal in 2015.

The two Chinese hacking groups named by FireEye are suspected of previous cyberattacks.

FireEye linked Tonto Team to an earlier state-backed Chinese hacking campaign, identified by Tokyo-based cybersecurity firm Trend Micro Inc. in 2012, which focused on South Korea’s government, media and military. Trend Micro declined to comment.

Two cybersecurity reports this month accused APT10 of launching a spate of recent attacks around the globe, including on a prominent U.S. trade lobbying group. One of those reports, jointly published by PricewaterhouseCoopers LLP and British weapons maker BAE Systems, said the Chinese hacker collective has recently grown more sophisticated, using custom-designed malware and accessing its targets’ systems by first hacking into trusted third-party IT service providers.

Because of the new scrutiny from that report, FireEye said in a recent blog post that APT10 was likely to lay low, though in the longer run, it added, “we believe they will return to their large-scale operations, potentially employing new tactics, techniques and procedures.”

Write to Jonathan Cheng at jonathan.cheng@wsj.com and Josh Chin at josh.chin@wsj.com

 

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Digital Clue Links North Korea to Theft at New York Fed

April 3, 2017

Kaspersky Lab says digital records show link to a computer with North Korean internet address

By ROBERT MCMILLAN
The Wall Street Journal
April 3, 2017 2:00 p.m. ET

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A newly discovered digital clue links the hacking group blamed for a multimillion-dollar cyberattack on Bangladesh’s central bank to a computer in North Korea, according to the Russian cybersecurity company Kaspersky Lab ZAO.

Kaspersky announced Monday at its security conference on the Caribbean island of St. Maarten that its researchers had obtained digital records showing a European server used by the group to launch its attacks…

Cyberattacks on International Banks Show Links to Hackers Who Hit Sony

February 13, 2017

Hacks began late last year, installing unauthorized code on websites belonging to financial regulators

Researchers at Symantec and BAE Systems say that some of the software and internet infrastructure in the global hacking effort was also used in the Sony attack and—more recently—other attacks on banks in Asia.

Researchers at Symantec and BAE Systems say that some of the software and internet infrastructure in the global hacking effort was also used in the Sony attack and—more recently—other attacks on banks in Asia. PHOTO: DAVID BECKER/REUTERS
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Updated Feb. 12, 2017 12:01 p.m. ET

Cybersecurity specialists have found evidence suggesting that recent attacks on institutions in Poland are part of an international hacking effort targeting financial institutions in the U.S., Mexico and the United Kingdom—an attack that shares traits with the 2014 attack on Sony Corp.

The hacks began late last year, installing unauthorized code on websites belonging to financial regulators, then using those to attack computers belonging to a select list of global financial institutions, according to researchers who have examined the attacks at security vendors Symantec Corp. and BAE Systems PLC.

It is unclear to the researchers exactly how many banks were compromised or whether any suffered financial losses. But the researchers say it appears to be part of a well-organized and broad hacking effort that shares links to other attacks including the devastating 2014 hack that destroyed systems and exposed email messages at Sony Pictures Entertainment. U.S. officials have said North Korea was responsible for that attack. North Korea has denied that, though said its supporters might have done it.

Researchers at BAE Systems and Symantec say that some of the software and internet infrastructure in the global effort was also used in the Sony attack and—more recently—other attacks on banks in Asia. Security researchers call the North Korea-linked group they believe is behind these attacks “Lazarus.” It has been active since 2009, according to Kaspersky Lab ZAO, a Russian cybersecurity company.

If the recent attacks are indeed by Lazarus, it suggests the group is broadening its banking attacks. The group’s bank hacking previously had focused on Asia, said Eric Chien, technical director of Symantec’s Security Technology and Response division. “We never saw them do anything, for example, to the U.S., let alone Europe,” he said. “Now we see them targeting the U.S. and Europe.”

In November the Federal Bureau of Investigation warned U.S. financial institutions that it was “monitoring emerging reports indicating that well-resourced and organized malicious cyber actors have intentions to target the U.S. financial sector.”

The FBI didn’t respond to requests for comment about the latest attacks.

The attacks started in October by compromising the website of the Polish Financial Supervision Authority, an incident that was reported last week by the Badcyber.com blog. The hackers programmed that website to attack banking computers that visited the site, the researchers say.

Security investigators call this technique a “watering hole.” It lets criminals use one common access point to break into a range of other organizations. In this case, by infecting a website commonly visited by banking employees, the hackers could hope to spread malicious software onto computers within the financial institutions on their list, said Adrian Nish, head of BAE Systems’ Threat Intelligence team.

A Polish Financial Supervision Authority spokesman confirmed that the regulator had “identified an external attempt to interfere in the operating IT system,” and had turned over evidence of the incident to law enforcement after restoring the website. The Polish National Police Agency didn’t immediately respond to a request for comment Friday.

The hackers programmed the hacked web servers to attack computers only if they originated from a short-list of approximately 75 institutions—an apparent effort to keep a lower profile and help evade detection, the researchers say.

This list includes 19 financial institutions in Poland, 15 in the U.S., nine in Mexico, and seven in the U.K., said BAE Systems, which declined to name the institutions.

The attacks also compromised a website belonging to Mexico’s financial regulator, the National Banking and Securities Commission, and a state-run bank in Uruguay, Dr. Nish said. A spokeswoman for the National Banking and Securities Commission said that it has seen no evidence that its computers were compromised. “During the past weekend, we received notice of a coordinated attack addressed to banking institutions world-wide,” she said. “Our Security Operations Center performed a thorough inspection, from which no abnormal behavior was detected.” The Commission’s investigation is continuing she said.

The attacks, with their use of the “water hole” technique, appear to be more sophisticated than previous Lazarus attacks, Dr. Nish and Mr. Chien said. In the shadowy world of cybersecurity, code can be stolen and reused, which makes the business of linking attacks to specific actors time consuming and often inexact. Dr. Nish, at BAE, said he has a “high confidence” that the group involved is Lazarus. “We know the tools that they’re using very well and we know the infrastructure they’re using and their tactics,” Dr. Nish said. “And we can strongly confirm that the tools that have been found on the bank networks and in these [website] attacks are part of the group’s tool kit.”

Mr. Chien said that Symantec hadn’t yet done analysis required to definitively make the connection, but that the tools used in these latest attacks are linked to Lazarus tools used in the past.

Write to Robert McMillan at Robert.Mcmillan@wsj.com

 

Donald Trump pledges to cut military budget after criticising ‘out of control’ F-35 aircraft program

December 12, 2016

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f-35

F-35B Lightning II, the first of Britain’s new supersonic ‘stealth’ strike fighters CREDIT:BRITISH MINISTRY OF DEFENCE/EPA

Donald Trump on Monday criticized Lockheed Martin’s F-35 fighter jet program as too expensive, the latest attack by the U.S. President-elect on large defense contractors.

The aerospace giant’s shares dropped 4 percent after Trump’s tweet, while shares of several other defense contractors also weakened.

“The F-35 program and cost is out of control,” Trump said on Twitter. “Billions of dollars can and will be saved on military (and other) purchases after January 20th.”

Last week, he also used Twitter to target Boeing Co for its “out of control” costs on a new fleet of Air Force One planes.

Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!

Lockheed Martin’s F-35 program leader, Jeff Babione, responded by saying the company understands concerns about affordability and has invested millions of dollars to reduce the jet’s price.

Babione said Lockheed’s goal was to reduce the price of the F-35 by 70 percent from its original estimates. “We project it to be about 85 million dollars in the 2019 or 2020 time frame,” he told reporters in Israel.

A week before Trump won the Nov. 8 presidential election, the U.S. Defense Department and Lockheed Martin concluded negotiations on their ninth contract for 90 F-35 fighter jets after 14 months of negotiations, the Pentagon said.

Lockheed won the contract, valued at up to $7.18 billion, in late November and has received an interim payment.

Trump interview
Donald Trumps is interviewed by Chris Wallace of Fox News CREDIT: AP

Trump campaigned on a promise to cut waste in federal government.

Lockheed and its key partners, Northrop Grumman Corp , Pratt & Whitney and BAE Systems, are developing and building three variants of the F-35s for the U.S. military and 10 allies including Britain, Australia, Norway, Denmark, the Netherlands, Italy, Turkey, Israel, Japan and South Korea.

After Trump’s Monday morning tweet, shares of Northrop Grumman were down 4.5 while shares of BAE Systems were 2.4 percent lower in London.

Shares of General Dynamics, Raytheon, and United Technologies were all lower Monday, as were shares of Boeing.

f-35
F-35 aircraft

United Technologies Corp , which had a run-in with the President-elect over a plan to ship 2,100 jobs to Mexico from Indiana operations of its Carrier air conditioning unit. The company last week agreed with Trump to keep about 800 of the threatened manufacturing jobs in Indiana, and retain another 300 headquarters jobs, in return for state tax incentives.

The attacks on Boeing and Lockheed Martin raise concerns that the incoming Trump administration will threaten defense contractors’ profit margins.

“His emerging habit of using Twitter as a bully pulpit could become a threat to controversial high profile programs,” Cowen analysts wrote last week after Trump criticized the cost of Boeing’s Air Force One replacement program. “Even if Trump only launches a bombastic Twitter shout-out, this more aggressive approach to contractor relations could impact the stocks.”

Earlier this month, the Pentagon’s chief arms buyer said he was hopeful that Lockheed F-35 block buy will proceed.

Europe, Russia arms groups gain market share

December 5, 2016

AFP

© AFP/File | A Lockheed Martin F-35 Lightning II fighter jet — the defence contractor took $36.4 billion in revenue in 2015

STOCKHOLM (AFP) – Arms manufacturers in Europe and Russia gained market share in 2015, but international sales were still dominated by their US competitors, the Stockholm International Peace Research Institute (SIPRI) said Monday.

For Russian industrialists, the growth underlined “the ministry of defence’s commitment to fund military procurement despite the economic difficulties,” said the research centre, which consists of experts on defence issues.

But although Russian exports increased by 6.2 percent over 2014, the rate was “significantly slower than the 48.4 percent growth rate between 2013 and 2014,” it said.

SIPRI ranks the world’s top 100 arms and military service merchants, excluding China, which does not deliver reliable data.

Western nations monopolise the top 12 places in the ranking with US defence contractor Lockheed Martin leading with $36.4 billion in revenues, US defence and aerospace giant Boeing with $28 billion, and Britain’s BAE Systems with $25.5 billion.

Total sales fell by 0.6 percent, dropping for the fifth consecutive year, but reached $370.7 billion, SIPRI said.

North American arms manufacturers remained dominant but their turnover fell by 2.9 percent because of ongoing limitations on government spending, including military spending and the strength of the US dollar that weighed on exports.

But groups in Western Europe saw an upsurge with growth of 6.6 percent, reversing a negative trend. Such firms control 25.8 percent of the market compared with 8.1 percent held by the Russians.

“Major arms export deals in 2015, such as those to Egypt and Qatar, have increased French arms companies’ sales,” said Aude Fleurant, Director of Research on Armaments and Military Expenditures.

The growth of six French firms in the top 100 companies, among them Dassault, Thales and Safran, pushed up arms sales by 13.1 percent, outpacing German manufacturers who notched up an increase of 7.4 percent and British companies with 2.8 percent.