Airbus pulls out of Canada fighter jet race, boosts Lockheed Martin's chances

OTTAWA - Airbus SE on Friday pulled out of a multibillion-dollar competition to supply Canada with 88 new fighter jets, a decision that boosts the chances of rival Lockheed Martin Corp.

The defense arm of Airbus, which indicated last month it might withdraw, cited onerous security requirements and a late decision by Ottawa to loosen the rules for how much bidders would have to invest in Canada.

Airbus and other contenders had already complained the government appeared to be tilting the race in favor of Lockheed Martin's F-35 plane, which the Royal Canadian Air Force wants. Canada is part of the consortium that developed the plane.

Canada launched the long-delayed competition last month and said it was confident no favoritism had been shown. Ottawa says the contract is worth between C$15 billion ($11.30 billion) and C$19 billion.

Canada's official opposition Conservative Party, which is seeking to defeat Liberal Prime Minister Justin Trudeau in an October election, accused the government of gross mismanagement.

Reuters revealed in July that Airbus and Boeing Co had written to Ottawa to say they might pull out.

The firms are unhappy that in late May, the government dropped a demand that bidders must guarantee to give Canadian businesses 100 percent of the value of the deal in economic benefits.

Such legally watertight commitments, which Boeing, Airbus and Sweden's Saab AB had already agreed to, contradict rules of the F-35 consortium. Ottawa's move allowed Lockheed Martin to stay in the competition.

"One of the strongest points of our bid was the fact we were willing to make binding commitments," said an Airbus source, who requested anonymity given the sensitivity of the situation.

"Once this was loosened up to a point where these commitments were no longer valued in the same way," the firm decided "that's just too much," added the source, who also cited security challenges.

European jets must show they can meet stringent standards required by the United States, which with Canada operates the North American Aerospace Defense Command.

"NORAD security requirements continue to place too significant of a cost on platforms whose manufacture and repair chains sit outside the United States (and) Canada," Airbus said in a statement.

Canadian Procurement Minister Carla Qualtrough said she respected the Airbus decision, adding Ottawa was determined there should be a level playing field.

"This included adapting the economic benefits approach to ensure the highest level of participation among suppliers," she said in emailed comments.

Canada has been trying unsuccessfully for almost a decade to purchase replacements for its aging F-18 fighters. The former Conservative administration said in 2010 it would buy 65 F-35 jets but later scrapped the decision, triggering years of delays and reviews.

Trudeau's Liberals took power in 2015 vowing not to buy the F-35 on the grounds that it was too costly, but have since softened their line.

"Justin Trudeau has spent the past four years delaying and dithering on new fighter jets for Canada only to completely mismanage the competition process," said Conservative defense spokesperson James Bezan.

Lockheed Martin declined to comment while Boeing and Saab did not respond to requests for comment.

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US 'playing with fire' on Taiwan, China says ahead of defense meeting

BEIJING - The United States is "playing with fire" with its support for self-ruled Taiwan, China said on Thursday, in angry comments ahead of a meeting between Defense Minister Wei Fenghe and acting U.S. Defense Secretary Patrick Shanahan.

The two countries, locked in an escalating trade war, are also at odds over a series of strategic issues, from the disputed South China Sea to democratic Taiwan, claimed by China as its sacred territory, to be taken by force if needed.

Wei and Shanahan - who on his first day as acting defense secretary in January said the U.S. military would focus on "China, China, China" - are both attending the annual Shangri-La defense forum in Singapore which begins on Friday, where they are expected to meet.

China has been particularly incensed by recent U.S. Navy patrols in the Taiwan Strait, U.S. legislation in support of Taiwan and a meeting between Taiwan's national security chief David Lee and White House national security adviser John Bolton.

Speaking at a regular monthly news briefing, Chinese Defense Ministry spokesman Wu Qian described military ties between Beijing and Washington as generally good.

But he took a much darker tone when asked about U.S. support for Taiwan, an issue China has long described as the most sensitive in relations between the two countries.

"Recently, the U.S. sides has been continually playing the 'Taiwan card', trying in futile to 'use Taiwan to control China'. This is deluded," Wu said.

"The series of actions the U.S. side has taken is playing with fire, seriously harms the development of military relations between China and the United States, and seriously harms peace and stability in the Taiwan Strait area."

Taiwan's air, sea and land forces conducted an exercise to repel an invading force on Thursday, as its defense minister pledged to defend the island against what it sees as China's rising military threat.

Washington has no formal ties with Taipei, but is its most important international supporter and main supplier of arms.

A senior U.S. defense official said the fact that Shanahan was going to the Shangri-la dialogue during a period of tension with Iran was a sign that the United States was committed to the region and its allies.

During a meeting with Wei, Shanahan is expected to bring up better communication between the two militaries to avoid the risk of miscalculation, the U.S. official said.

While Wei will likely tackle the Sino-U.S. trade dispute and the hardening Trump administration approaches to Taiwan and the South China Sea, Asian states will be looking for calming messages, according to security experts and regional diplomats.

"Regional countries will be expecting reassurances that China's intentions are in fact peaceful given its growing military might," said Singapore-based regional security analyst Ian Storey.

Storey, of Singapore's ISEAS Yusof Ishak Institute, said Wei must also speak to his domestic constituents, given the fact his address and a rare question-and-answer session are expected to be shown prominently in China.

"In the current environment maybe they won't want him to be too accommodating. He can be expected to blame the U.S. for growing tensions in the South China Sea and there is no way he is going to admit that China is part of the problem."

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China navy chief takes dig at US freedom of navigation patrols

QINGDAO - Freedom of navigation should not be used to infringe upon the rights of other countries, China's navy chief Shen Jinlong said on Wednesday, taking a dig at the United States and its allies who have sailed close to disputed South China Sea islets.

The United States has frequently sent warships near to Chinese-occupied features in the South China Sea, where China has been reclaiming land for runways and ports. Some US allies, including Britain, have followed suit.

China regards the patrols by the United States and its allies as a provocation, as it views almost all of the South China Sea as its territory, although Vietnam, Malaysia, Taiwan, Brunei and the Philippines all have competing claims.

Speaking at a forum in the eastern city of Qingdao, following a major naval parade marking 70 years since the founding of the Chinese navy, Shen said everyone needed to follow the rules and "safeguard good order".

"Respect for the rules is the cornerstone of maritime good order," said Shen, who is close to President Xi Jinping.

"Freedom of navigation is a concept widely recognized by the international community. However it should not be used as an excuse to infringe upon the legitimate rights and interests of littoral states," he added, without naming the United States directly.

The United States has sent only a low level delegation to the Chinese navy anniversary events. And unlike its close allies Australia, Japan and South Korea, the United States did not send a ship to take part in Tuesday's naval parade reviewed by Xi himself.

"The US government seeks a bilateral relationship that is results-oriented and focused on risk reduction," Lt. Col. Dave Eastburn, a Pentagon spokesman, said in comments sent to Reuters, responding to a question on US participation at the event.

"The US Navy will continue to pursue its primary goal of constructive, risk-reduction focused discourse with the PLAN," he said, referring to the People's Liberation Army Navy.

Shen said that China was continuing to advance talks on the Code of Conduct for the South China Sea, which Beijing has been having with Southeast Asian states for the past few years.

"We are committed to making the South China Sea a sea of peace, friendship and cooperation," he added, speaking to an audience of both senior Chinese and foreign navy officers, but without giving details.

The navy has been a key beneficiary of Xi's ambitious military modernization plan, which has seen China develop aircraft carriers, advanced new warships and nuclear submarines, and stealth jets for the air force.

"We adhere to non-conflict and non-confrontation and strive to be a stabilizer for maritime peace," Shen said. 

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India's longest road-rail bridge bolsters defence on China border

BOGIBEEL, India - India on Tuesday opened its longest rail-road bridge in a poor northeastern state as part of efforts to boost defenses on its sensitive border with China.

Prime Minister Narendra Modi drove an inaugural cavalcade along the 4.9 kilometer (3 mile) long Bogibeel bridge over the Brahmaputra river to inaugurate the project in Assam state which has taken nearly two decades and $800 million to complete.

The bridge, near the city of Dibrugarh, will enable the military to speed up the dispatch of forces to neighboring Arunachal Pradesh, which borders China.

With the opening of the bridge, the rail journey from Dibrugarh to the Arunachal Pradesh capital Itanagar has been cut by 750 kilometers.

India lost territory in Arunachal Pradesh in a 1962 war with China.

The bridge has been designed to bear the weight of India's heaviest 60 tonne battle tanks and so that fighter jets can land on it.

India opened its longest bridge, the 9.1km Dhola-Sadiya bridge, in 2017 to connect Assam and Arunachal Pradesh, also to boost tactical defenses.

Construction of the Bogibeel bridge was agreed by the government as part of a 1985 agreement to end years of deadly agitation by Assamese nationalist groups.

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US' Mattis throws support behind new space-focused military command

WASHINGTON - U.S. Defense Secretary Jim Mattis on Tuesday threw his support behind the idea of creating a space-focused military command but stopped short of promising the new "Space Force" branch of service that President Donald Trump has touted.

Trump called for the creation of a sixth branch of the military, for space, a move critics said could harm the Air Force and which U.S. officials say would require an act of Congress.

The U.S. military, however, could create a unified combatant command for space, like one it created to focus on cyber warfare.

A Pentagon report to Congress expected in the coming days could examine the possibility of doing something similar with the U.S. military's space capabilities, which include everything from satellites enabling the Global Positioning System (GPS) to sensors that help track missile launches.

Asked whether he supported establishing a new combatant command for space, Mattis responded: "Yes, absolutely."

"We need to address space as a developing war-fighting domain and a combatant command is certainly one thing that we can establish," he told reporters at the Pentagon, adding: "This is a process we're in."

Mattis once voiced opposition to creating a new branch of the U.S. military to focus on space-based military assets, saying in a 2017 letter to a lawmaker that would likely "present a narrower and even parochial approach to space operations."

Mattis has since suggested he was not ruling out the idea and on Tuesday left the possibility open. Mattis said he was coordinating closely with Vice President Mike Pence and was in complete agreement with the White House.

Asked whether a new branch of the military would be created, Mattis responded: "I don't have all the final answers yet. We're still putting that together."

The United States is a member of the 1967 Outer Space Treaty, which bars stationing weapons of mass destruction in space and only allows use of the moon and other celestial bodies for peaceful purposes.

The idea of a Space Force has been raised before, including in previous administrations, with proponents saying it would make the Pentagon's efforts more focused and efficient.

It has also faced criticism from senior military officials. Air Force Chief of Staff General David Goldfein told a 2017 congressional hearing that creating a new space branch would "move us in the wrong direction." The Air Force oversees most of the country's space-related military activity.

Goldfein has since praised Trump's focus on space.

(Reporting by Phil Stewart Editing by James Dalgleish)

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Record number of US Marines to train in Australia in symbolic challenge to China

SYDNEY - The United States will deploy a record number of Marines to train in Australia, the Australian defense minister said on Friday, as Washington seeks to counter what it describes as Chinese aggression in the region.

Payne said 1,587 US Marines will spend six months training in Australia's remote north, an increase of nearly 27 percent on its 2017 rotation for the program known as the Force Posture Initiatives.

"The US military plays a vital role in underwriting security and stability across the Indo-Pacific, and the Force Posture Initiatives will be an essential component in preserving stability and security over the coming decades," Defense Minister Marise Payne said in a statement.

The deployment, first introduced in 2011 as part of a US "pivot" to Asia, has emerged as a key indicator of Washington's commitment to the region under US President Donald Trump and his willingness to counter Chinese influence in a region where tensions have spiked amid disputes over the South China Sea.

China claims most of the South China Sea, an important trade route that is also believed to contain large quantities of oil and natural gas, and has been building artificial islands on reefs, some with ports and air strips.

In a move likely to irk Beijing, the US Marines will train with personnel from Australia, Indonesia, Japan, Malaysia, the Philippines, Singapore and Thailand, several nations that also have claims in the South China Sea.

"China will monitor whatever the US does and it would prefer that the United States not work with the Asian countries included in these exercises," said Euan Graham, director of the international security program at Australian think tank the Lowy Institute.

"Beijing would like to deal one-on-one with Southeast Asia nations that have counter claims," he said.

The military deployment also threatens to further weaken Australia-Chinese relations.

Australia, a staunch U.S. ally with no claim to the South China Sea, has long maintained its neutrality in the dispute to protect its economic relationship with China.

But bilateral relations have soured in recent months after Australian Prime Minister Malcolm Turnbull said China was improperly interfering in Canberra's affairs, an accusation that triggered a rare protest from Beijing.

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US high school student scores Mattis interview scoop

Washington, United States - A US high school student has scored an exclusive interview with Pentagon chief Jim Mattis after an aide of President Donald Trump inadvertently exposed the defense secretary's cell phone number.

The Washington Post in May ran a photo of Trump and his bodyguard Keith Schiller walking outside the White House, with Schiller clutching a bunch of papers.

Sharp-eyed readers noticed that atop the papers was a yellow sticky note that said "Jim, Mad Dog, Mattis" along with a phone number.

Retired four-star Marine general Mattis has been nicknamed "Mad Dog" by some in the media and by troops that served under him.

The newspaper quickly took the photo down but not before Teddy Fischer, a sophomore (about 16 years old) from Mercer Island High School saw the number and called Mattis with an interview request.

"I called it to see if it was him, because I was pretty curious if this is actually his number or is it kind of a joke," Fischer told the King 5 local news channel in his home state of Washington.

He didn't leave a message but went on to text an interview request.

To his surprise, Mattis called back and agreed to schedule an interview, which ultimately would last for about 45 minutes.

What followed was a far-ranging conversation across political topics and history.

"Especially if you study history, you realize that our country has been through worse," Mattis said when asked what advice he would give a current high schooler scared about what they see on the news.

When asked why he had chosen to call Fischer back, Mattis said it was partly because he too comes from Washington state.

"I've always tried to help students because I think we owe it to you young folks to pass on what we learned going down the road so that you can make your own mistakes, not the same ones we made," Mattis said.


The full transcript of the interview can be viewed at the high school's The Islander newspaper here.

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Israel gets F-35 fighter jets

NEVATIM AIR BASE, Israel - Israel on Monday became the first country after the United States to receive the U.S.-built F-35 stealth jet which will increase its ability to attack distant targets, including Iran.

The much-hyped arrival of the first two fighter jets was overshadowed by U.S. President-elect Donald Trump's tweet that Lockheed Martin's whole F-35 project was too expensive , and the delivery was delayed for hours by bad weather preventing their take-off from Italy.

The squadron is expected to be the first operational outside the United States. The planes are the first of 50, costing around $100 million each.

"Our long arm has now become longer and mightier," said Prime Minister Benjamin Netanyahu at the Nevatim air base in the southern Negev desert.

U.S. Defense Secretary Ash Carter, also attending the ceremony which was delayed until after dark, said the planes were critical to maintaining Israel's military edge in the region.

A U.S. squadron of the planes, which have suffered delays and cost overruns, became operational in August. The F-35 program is the Pentagon's largest weapons project.

"The F-35 program and cost is out of control," Trump said on Twitter, sending Lockheed Martin's shares down 4 percent.

Jeff Babione, Lockheed Martin's F-35 program leader, said the company understood concerns about affordability and had invested millions of dollars to try to reduce its price.

Israel, which finalized a 10-year, $38 billion arms deal from the United States this year, plans to maintain two F-35 squadrons.

Critics of the plane say it can carry a smaller weapons payload and has a shorter range than Israel's current squadrons of U.S.-built F-15s and F-16s.

But some experts say the F-35's stealth capabilities make up for this because it can be more accurate and fly a more direct route to its target. Israel's air force mostly flies missions close to home, in the Gaza Strip and against arms shipments to Hezbollah in Lebanon and Syria.

It is also believed to have carried out bombings in Sudan against arms shipments to Palestinian militants, and to have drawn up contingency plans against Iranian nuclear facilities.

Israel initially ordered 33 of the fighters but signed off on another 17 last month.

Nimrod Shefer, a retired Israeli air force major-general, said the new aircraft were a welcome addition.

"(There are) very low- to very high-altitude missiles ... and targets that are becoming more and more difficult to detect and to destroy," he said. (Writing by Ori Lewis and Maayan Lubell; Editing by Jeffrey Heller and Robin Pomeroy)

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