Sunday, March 2, 2014
Since early in the development of the KC-390, Chile's Air Force has expressed interest in not just acquiring a few of the transport planes but also in being a manufacturing partner. But now, a report says Chile is shifting its attention to alternatives from Airbus. FACh is specifically eyeing the C-295 for a potential order of four to six medium transport planes, and the A400M to replace FACh's C-130 Hercules, according to InfoDefensa. Six A400Ms could be purchased. Chile had signed an intent to purchase as many as a half-dozen KC-390 planes from Brazil's Embraer, but the accord does not amount to a firm order, InfoDefensa added. Sources quoted in the article say Chile remains interested in buying the KC-390 but has backed out of being a partner in the program. Ironically, Chile had signed a preliminary deal for the A400 several years ago, only to withdraw later over questions about a partnership with Chile's state-owned aerospace company. FACh operates three aged C-130s and the plans to replace them have been murky and shifting. For example, last year the head of the Air Force announced the purchase of two used C-130s, but there's been no details since then. The Army is seeking its own tactical transport aircraft deal and is considering the Airbus C-295 as well. Its maritime patrol version is already in service with the Navy.
Thursday, February 27, 2014
The acquisition of night-vision goggles for Chile's Army has raised suspicions of favoritism. An article in El Mercurio explains how the bidding process was mysteriously voided at the last minute and led to a complaint to the government's comptroller. The Greek company Theon is accusing the Army of revising the bid requirements in ways that favor a rival company represented by Virgilio Cartoni, a former Army officer who now works for a host of defense companies. Theon's goggles, the article says, finished first, second and third in the competition for the contract. In fourth place was the bid Cartoni represents. The bidding process was restarted, and some new requirements favored Cartoni's client, the article adds. The Army, for its part, blamed administrative errors and normal revisions in the procurement process. It's unclear how far the second competition has gone so far. The Army is seeking more than 3,000 night-vision goggles. As the representative for many arms suppliers, Cartoni has been a key middleman in the Army's acquisition of missiles, munitions, spare parts and other equipment.
Monday, February 10, 2014
Anyone wishing to understand Chile's military industry needs to know the story of Carlos Cardoen. He is the most successful weapons manufacturer the country has known. He built landmines, bombs, armored vehicles and other types of arms for Chile and several countries. In a TV interview last year, Cardoen explained his rise from maker of mining explosives into a major arms manufacturer. As he tells it, the pivotal moment came in the late 1970s, when Chile faced military threats from Peru and Argentina. A U.S. arms embargo had left Chile desperate for weapons, and the military turned to its industrialists to make the arms it could not buy in the market. Cardoen was one of those industrialists. In a matter of weeks, he developed an anti-tank mine using off-the-shelf materials, such as caps from oil barrels. Later, the Air Force asked him to develop a bomb that could be dropped by reconnaissance aircraft -- something described as a harassment weapon. That, Cardoen says in the interview (check starting about the 10th minute of the video), led to the concept of cluster bombs, which Cardoen patented in the U.S. It's debatable whether Cardoen actually invented the cluster bomb. The Germans used a bomblet-dispersion system during World War II, and cluster bombs were used in the Vietnam War. But Cardoen's bombs and other designs helped Chile stave off its hostile neighbors. He continued building up his arms business and became a supplier to Iraq during its war with Iran, which made him a controversial figure. Today, Cardoen is out of the weapons business. But for decades, Cardoen was the most successful weapons manufacturer in Chile, and a major part of a defense industry that today includes a number or private and government-owned companies.
Sunday, February 2, 2014
Chile signed an agreement that formally commits its troops to assist the European Union in its peacekeeping missions. Chile becomes the first Latin American country to become such a partner with the EU. Chileans are no strangers to peacekeeping in Europe. They served for more than a decade alongside EU troops in Bosnia and Herzegovina, where they earned praise for their work. The agreement extends Chile's role as a peacekeeper. Already, the Chilean military has been a major component of the United Nation's effort in Haiti, and it has formed its own peacekeeping force with neighboring Argentina. The 2011 acquisition of a multi-role ship gave Chile a valuable resource to carry out such missions, and the Navy has already expressed interest in acquiring another one. For Chile, a country that has not had a war in more than a century, peacekeeping affords a way to expose its military to crisis situations and gain some experience dealing with enemies, although Chilean troops have seldom come under fire.
Monday, January 27, 2014
|The new border|
Monday, January 20, 2014
As the presidential term of Sebastian Piñera winds down, so are hopes to eradicate the copper tax that has provided Chile's military with billions of dollars. Piñera now becomes the second-straight president to fail to win passage of the legislation, which replaces the tax with four-year spending programs based on strategic needs. The new budget plan has its flaws, to be sure. For example, Chilean defense analyst Eduardo Santos says the four-year framework lacks flexibility. But another driving force is the difficult situation at Codelco, the world's largest copper producer and the source of that lucrative source of funds. The government-owned mining company desperately needs to upgrade its aging mines, while facing slumping copper prices. In short, it needs to keep more of the money it makes. The government last month let Codelco keep an additional $1 billion of profit, for a total of $3.2 billion. The finance ministry called it a necessary investment to keep Codelco's leadership in mining and to maintain its investment-grade credit rating. Long-term, the company needs to spend $24 billion to modernize its operations. It needs to expand production by 10%, or risk losing half its output. Codelco is mandated to give 10% of all its foreign sales to the military. That would amount to more than $1 billion in the first nine months of 2013, based on Codelco figures, although the government deducts much of that sum, and several billion in unspent funds are stashed away in an emergency contingency fund. As the principal government-owned enterprise, Codelco is Chile's cash cow. Its 2012 profit of $7.5 billion was a sizable chunk of a total budget of roughly $60 billion. If the copper tax is someday eliminated, it would be replaced with regular government funds, although certain spending floors would be guaranteed.