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Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force (1995)

Chapter: E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES

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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

Appendix E

U.S.-Japan Industrial Relationships in the Aegis Foreign Military Sales Program1

David T. Gross

BACKGROUND

Aegis is a complete shipborne multiwarfare combat system that includes detection, command and control, weapon, and support systems for the Aegis-class of guided missile cruisers and destroyers. The Aegis weapon system is the antiair warfare part of the combat system and also has the function of integrating the combat system. This computer-controlled weapon system has by far the most capable tactical radar system put to sea—the AN/SPY-1 phased array radar. SPY-1 can automatically track multiple targets simultaneously while maintaining surveillance of the surrounding air space. Navy Standard Missiles (SM-2) are fired and directed at the selected targets. The improvements over previous systems include the ability to reliably engage multiple targets in a hostile environment. Aegis is a U.S. Navy (USN) program that includes CG-47 Ticonderoga-class cruisers and DDG-51 Arleigh Burke-class destroyers. Development started in 1970 on an antiair warfare (AAW) system and was later expanded to a combat system resulting in the two classes of Aegis ships. The cruiser program construction started in 1978 is now complete with 27 ships in operation. The destroyer program, with construction starting in 1985, is in the build-up phase with 32 authorized out of a planned 57 Aegis destroyers. Under a ship program manager (PMS 400), the USN created a consolidated ship/combat management structure with emphasis on total ship performance. USN PMS 400 is assisted by Lockheed Martin as the combat system engineering agent and two shipbuilders, Ingalls Shipbuilding and Bath Iron Works. The USN has forged a team with Navy and industry people working to build the best possible Aegis ships. This has resulted in a close working relationship between the shipyards and Lockheed Martin with information passing directly between the shipyards and Lockheed Martin without a formal USN review.

Japan is presently the only other country that has the Aegis system. The Aegis foreign military sales (FMS) efforts began in 1984, resulting in the first Japanese FMS case in 1988. Three additional FMS ships were then authorized in 1990, 1991, and 1993. The Aegis FMS programs are different than USN programs in that PMS 400 is not responsible for the ship hull and machinery or the antisubmarine warfare (ASW), electronic warfare (EW), and gun systems. The USN furnishes the Aegis AAW system and selected combat system elements, but the ship and the other remaining systems are built in Japan. Not all portions of the U.S. Aegis system are installed on the Japanese ship. The Tomahawk system is not exported, and there is no equivalent Japanese-supplied function. Several other functions are also deleted in the Japanese ship. The USN had earlier furnished TARTAR systems (the predecessor of Aegis) via FMS to Japan. The

1  

Copyright 1995 by Martin Marietta Corporation. All rights reserved.

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

acquisition of Aegis required the Japanese to learn a new and much more complex system than TARTAR.

PROBLEMS AND CHALLENGES

The U.S. Congress approved the Aegis sale to Japan in 1988 despite reservations about the transfer of technology. Special congressional concerns were related to the SPY-1D radar technology and the associated complex real-time computer programs. The USN responded to these concerns with additional constraints on the transfer of technology, as delineated in a memorandum of understanding (MOU) between the U.S. and Japanese governments. Releasability considerations are a critical aspect of the Aegis FMS program. Everyone from the Aegis program who interfaces with the Japanese must understand the restrictions to ensure that the letter and spirit of the MOU are strictly followed.

The USN and Lockheed Martin over the years have developed methods to get well-prepared Aegis ships to sea as quickly as possible. Since the United States and Japan provide approximately equal shares of the program (the USN supplies Aegis and other systems while the Japanese supply the ship and major combat system elements of an integrated system), the management approach was crucial. The first task in this approach was convincing the Japanese Maritime Self-Defense Force (JMSDF) personnel that Aegis procurement had different management requirements than their previous TARTAR programs because of the number and complexity of the system interfaces. This was accomplished early, but because of personnel changes in the JMSDF it remains a continuing effort.

The next set of problems was the interface with the Japanese manufacturers. The first involved the shipbuilder. Because of the complexity of the system and the alignment and support systems, a number of Lockheed Martin people have been located at U.S. shipyards to support ship design and installation to be part of a USN Aegis test team (ATT). This team stays in close communication with experts in the Moorestown, New Jersey home office. In Japan the shipbuilder was responsible for all of these functions. The Japanese shipbuilders’ first response was to ask for the equipment, the manuals, some training, and on-call technical support as required. This was also the first reaction of U.S. shipyards. However, in the United States, PMS 400 manages the ship contracts. In Japan it was necessary to convince the shipyard that a different approach, similar to that used by the USN, was required.

Another set of interfaces is the Japanese manufacturers of the ASW, EW, and gunfire control systems. These systems are integrated in USN Aegis ships, and it was the desire of JMSDF to also integrate them on their ship. Since these were existing or upgraded systems, they could not be redesigned to match the computer interfaces of the U.S. counterpart. It was necessary to negotiate new or revised interfaces with Japanese manufacturers, JMSDF, USN, and Lockheed Martin.

One of the reasons for the great success of the Aegis program has been the policy to test equipment and computer programs thoroughly before delivering them to the shipyard. In new versions of the system this is accomplished primarily at the combat system engineering development (CSED) site in Moorestown. It was not possible to send systems from Japan to test at the CSED site. Leaving this complex digital interface testing to the shipyard test cycle was not an acceptable practice because of the compressed schedule and the number of technical experts

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

needed to solve these problems. Thus, interface testing was of great concern. The Japanese shipbuilders and suppliers of equipment with complex computer interfaces are listed below:

  • Shipbuilders

    Mitsubishi Heavy Industries (MHI)—Nagasaki

    DDG 2313, DDG 2314, DDG 2315

    Ishikawajima-Harima Heavy Industries (IHI)—Tokyo

    DDG 2316

  • Manufacturers

    Hitachi—Totsuka

    ASW control system

    Mitsubishi Electric Company (MELCO)—Kamakura gunfire control system

    MELCO—Amagasaki City (Osaka)

    EW system

The problem of communications between the U.S. and Japanese participants continues. We started with people who understood Aegis but had little or no international experience. Although our Japanese counterparts were more or less fluent in English, there were many difficulties in coming to a common understanding and knowing when understanding had been achieved. Our communications skills needed work.

As an overlay on the technical, language, and cultural differences, there is a releasability policy that requires very close attention. In practice it is not possible to have the USN involved in every technical interchange. For example, there was a set of ship installation criteria that was transferred from Lockheed Martin to USN to the American Embassy in Tokyo to JMSDF and then to the shipbuilder. When the shipbuilder has questions about these criteria, the time required to use the formal channel for questions and answers would disrupt the shipbuilding program. Other solutions were required.

IMPLEMENTATION

The program was initiated through the Mutual Defense Assistance Office (MDAO) in the American Embassy in Tokyo. MDAO provided advice and conference rooms, attended meetings, and helped with translations and introductions to the JMSDF. As the program grew, it was more convenient to use nearby Lockheed Martin offices and conference rooms, although the embassy is still used for classified meetings. The MDAO function was essential for start-up and provides continuing support for the program.

Initial meetings were used to explain the Aegis system and the implementation techniques used in the United States to assure system performance. Most of the early questions and comments from JMSDF concerned performance and requests for studies or data on our recommendations. (When “ our” is used it means a U.S. approach. Otherwise, separate U.S. points of contact might confuse the Japanese with somewhat different answers. Conversely, the Japanese discuss answers among themselves for extended periods during a meeting to arrive at a

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

consensus answer.) The most difficult problem was to address the concept of an Aegis test team in the shipyard. JMSDF contracts with the shipyards through the JDA’s Central Procurement Office (CPO). The shipyard is responsible for all building, installation, and testing until the ship is turned over to JMSDF at commissioning. The CPO oversees the work and accepts the ship. In this environment how could we place a USN team into a Japanese commercial shipyard? After considerable discussion, the USN offered to help establish an integrated test team (ITT) managed by the shipyard but partially manned by Lockheed Martin employees. The initial breakdown was a 55-man team with 34 Lockheed Martin and 21 shipyard members. Since the ships’ crew are not permitted to operate the equipment in the shipyard, we agreed to operator training for additional shipyard people to operate consoles during the peak of testing. The shipyard ITT members were given extensive training in Moorestown and at Ingalls Shipyard with an Aegis test team. The Japanese shipyard agreed to supply office space for the U.S. members of the ITT. Eventually, the combined ITT was collocated in an office area by the waterfront.

The Lockheed Martin office in the MHI Nagasaki shipyard was opened on April 13, 1989, with a planned buildup of four people during the design phase, 12 people for installation, and then a crew of 34 during the test phase. In practice, the shipyard generally matched our people one for one during the test program. This buildup occurred in 1990-1991 and the first half of 1992. The test period was longer than presently achievable in U.S. shipyards but shorter than our first ship of a class. A direct link from the shipyard to Moorestown, established through discussion between USN and JMSDF, allowed swift response to shipyard questions. Because of the success of this communications link, the transfer of technical data and other issues, a formal Navy procedure was issued by PMS 400, including the following guidelines:

  • All drawings, ship interface criteria and test procedures go through formal Navy-to-Navy channels.

  • A liaison information transfer report (LITR) procedure is established for Lockheed Martin to directly answer MHI’s questions on the data formally transferred.

  • Nonreleasable data may not be transferred by LITR.

  • Any information that could affect program costs or the schedule must go through formal channels.

  • Copies of LITRs are sent to PMS 400 at the same time they are sent to Japan.

Many of the LITRs concern detailed questions on data already provided and questions on alternate methods to implement the specified functions. Also, there were a number of comments on shipyard-provided drawings of combat system spaces. There were both large and small problems uncovered in these reviews. PMS 400 stayed very close to the shipyard effort, which tended to strengthen our position in the shipyard. (In Japan, USN advice and comments are treated with great respect.)

The manning of the ITT was given considerable attention. People had to be interested in residing in Japan as well as being technically qualified. A cultural training course was given to long-term members and their families. Considerable assistance was supplied by the shipbuilder in

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

finding housing and other needed items. Releasability briefings were given by the Navy and were repeated periodically. The permanent members of the ITT were sent to Japan under USN Technician Orders, which put them under nominal oversight of MDAO in Tokyo. It was emphasized to each ITT member that he or she was being sent as a representative of the USN and Lockheed Martin. U.S. security in Japan briefs U.S. ITT members twice a year in addition to visits by Lockheed Martin security. There are a number of Lockheed Martin and PMS 400 management visits to Japan to support and encourage the team. During the initial start-up phase, we did not know how to make an international ITT work effectively but sent only qualified and enthusiastic people to ensure success. Considerable attention was given to assure USN and Lockheed Martin home office support of the team.

The results were better than expected. The first ship, JDS Kongo, meeting all Japanese construction and test requirements, was commissioned on March 25, 1993, with all of the USN-supplied systems operational. Both JMSDF and the shipyard were very pleased. In the process a very effective international team evolved that worked the many problems to successful solutions. In retrospect the key factors that led to this outcome were:

  • a motivated team effort by highly competent people with Aegis experience,

  • a highly skilled and cooperative shipbuilder,

  • engineer-to-engineer discussions with the Japanese technical counterparts in all phases of design,

  • drawing reviews with the shipbuilder,

  • joint advanced planning of the ship installation and test program in great detail,

  • ship construction was completed before the start of testing,

  • timely logistics support,

  • JMSDF and USN encouragement and support, and

  • a number of related actions taken early—some of which are described below.

A critical area of technical cooperation was with the Japanese manufacturers of the ASW, EW, and gunfire control systems. Aegis interfaces have been defined for the U.S. systems but needed to be defined for the Japanese counterparts. The general role was that the Aegis interface was to remain unchanged. However, differences in function made changes necessary. The most complex interface was the integrated ASW control system that was being developed based on an existing Japanese system. The early discussions involved the equipment configuration. The manufacturer was prepared to supply its own computer and display. However, in the Aegis systems, common displays are used in the combat information center (CIC) for most functions, including ASW. In addition, since it was a complex interface, it was desirable to test the system at the CSED site in Moorestown to ensure compatibility. JMSDF decided that its ASW control system would have USN-supplied computers, peripherals, and displays and that the Japanese manufacturer would use them in development. (There were licensed production agreements being negotiated or in place to manufacture this equipment in Japan.) This allowed testing of the Japanese configuration at CSED. A set of ASW control system equipment was ordered for CSED. The Japanese manufacturer developed the computer programs and supported testing with their engineers at the CSED site. We were visited several times by Japanese management to discuss problems and assess the CSED site test progress. The testing at the CSED site proved

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

valuable when shipyard testing started. The ASW control system interface integration went smoothly with fewer problems than other interfaces, even though it was by far the most complex.

The gunfire control system (GFCS) was the next most complex interface. The manufacturer had an existing program that it was modifying to match our interface. Since the design was different from the USN system, modifications were required in the interface. The message interface protocol was sent on tape by MELCO to CSED, and message initiations were accomplished. This system required the most work in the shipyard to integrate but was not a major issue. The EW system integration had some problems in the shipyard, but again they were not an issue.

The early integration work on ASW, EW, and GFCS used a common technical approach. Interface design specifications (IDS) had been previously established for the U.S. equipment interfaces. These IDSs were modified to accommodate the Japanese systems. This was accomplished with a series of meetings in Tokyo. The early meetings involved policy decisions by both Navies as to the functions to be kept, changed, or deleted. These decisions were documented in meeting minutes (in English) and were distributed to the participants. After policy was decided, a regular set of quarterly meetings in Tokyo was established. The IDS provisions were discussed in increasing detail as the meetings progressed and resulted in a set of IDSs signed by the Japanese manufacturer, JMSDF, USN, and Lockheed Martin. We then put the documents under strict configuration control. We also started a quarterly management review that followed the technical meetings. Technical progress, shipyard progress, and special topics were covered at the quarterly management reviews. This was the only forum for problems affecting the total ship program and was the only view the Japanese manufacturers had of the overall program.

The U.S.-Japan communications problem was worked out at Lockheed Martin in Moorestown. Much literature on doing business with the Japanese was reviewed and some was relearned through experience. Guidelines were set up for presentations and responses to the Japanese. Material was reviewed, and new people were briefed before they went to Japan. Considerable effort was expended in preparing for the trips to Japan. This preparation helped considerably in solving the technical interface problems.

BENEFITS TO THE UNITED STATES

There are several cost benefits from the Aegis FMS sale to Japan. First, there is the payback of a share of the development costs of the Aegis program. The FMS program also reduces the cost of the USN Aegis program through larger production quantities and by paying its fair share of the common overhead function in the project. As the Aegis FMS project is now over $2 billion, the benefits are appreciable.

We have learned different ways to conduct business. An example is the number of people involved. We tend to have a number of specialists to handle different kinds of problems. The JMSDF and the Japanese manufacturers have a limited number of people who have project responsibility. To interface with this smaller group, we have cross-trained our people to perform multiple tasks, which makes them more valuable and makes the process more efficient.

Despite the extensive technical interchanges that occurred, there has been little conventional technology transfer because of the restrictions on both sides. However, our shipyards have had

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

the opportunity to observe a Japanese shipyard build an Aegis ship and to adopt the applicable techniques.

The training of a large group of U.S. engineers and managers to operate in an international environment is certainly of great potential benefit to Lockheed Martin and the other U.S. companies that support the Aegis project.

BENEFITS TO JAPAN

The most obvious benefit is the upgrade of the JMSDF with the most capable warships in the world. With its emphasis on defense, it closely matches the stated future goals of the JMSDF.

JMSDF, its shipbuilders, and its manufacturers have learned a considerable amount about the integration and testing of a large modern complex weapons system by working on the Aegis program. The shipbuilder was responsible for testing in the shipyard, and the ASW control system manufacturer spent considerable time at the CSED site learning integration techniques as well as testing the system. This will provide better insights into integration of their own ships. (Presently Japan builds small ships with their own systems and depends on the USN for large ship antiair warfare systems.)

ISSUES

When the Aegis FMS program went through congressional review of the release to Japan in early 1988, there were two major issues raised. The first, supported by the U.S. shipbuilding industry, was why a total Aegis ship was not supplied to Japan instead of just the Aegis weapon system. This would give the depressed U.S. shipbuilding industry some badly needed work in return for the release of this advanced system to Japan. While this was a good idea, there were other factors to consider. In Japan the shipbuilding industry was also depressed. The earlier TARTAR system release to Japan had also involved the sale of the antiair warfare system with the ship built in Japan. Since the FMS program would take half of the budget for the Japanese ship and several Japanese systems were to be installed (U.S. systems were not released to Japan), it was not likely that Japan would buy Aegis as a total ship.

The second issue raised in Congress was whether Aegis should be released to Japan at all. Many members believed that our latest technology should not be released to Japan. There was a concern that the Japanese might “reverse engineer” the system and build it themselves in the future. As a result of these concerns, additional restrictions were put on the Aegis sale. The restrictions were to discourage reverse engineering of the system while allowing its use by Japan. The arguments for the release to Japan included Japan’s status as a close ally in the Pacific and a potential reduction in the number of ships the USN would have to deploy in the Western Pacific as Japan increased its capability with Aegis. Several high-level USN officers testified before Congress on the conditions of the release of Aegis to Japan. (The congressional record of this testimony provided our first releasability guidelines.) After debate, the release was approved and an MOU on Aegis was written and signed by both countries.

There may still be some lingering discontent within JMSDF over some of the releasability guidelines.

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×

In conclusion, the Aegis FMS program has proven that the United States and Japan can collaborate effectively on a complex challenging military program. Hard work, attention to detail, and superior personnel from both countries were necessary to achieve this success. The lessons and mutual respect built through the experience could be usefully applied to future U.S.-Japan collaboration.

Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
Page 122
Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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Suggested Citation:"E: U.S.-JAPAN INDUSTRIAL RELATIONSHIPS IN THE AEGIS FOREIGN MILITARY SALES." National Research Council. 1995. Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force. Washington, DC: The National Academies Press. doi: 10.17226/9294.
×
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