Global HeavyLift Holdings, LLC (GHH) a Florida-based Defense Logistics Agency (DLA) listed air cargo strategic solutions entity founded in 2002 initially involved in developing the intellectual resources supporting the crafting of architecture for infrastructure of an American-controlled HEAVYLIFT industry (the movement via air of heavy and outsized goods) has announced its intent to pursue a 1.4 billion dollar private placement. This strategy covers the acquisition of 10 prior use commercial application C-17 Globemaster III airlift aircraft, designated by Boeing as the BC-17.
"Over a decade ago, Boeing, in collaboration with logistics data development partners, identified the potential for an emergent heavylift industry, that is, the movement of heavy and outsized goods too large to fit in any door of any 747 freighter," says Myron Stokes, a principal in the firm who has been involved with data development and project strategy and who is Publisher of eMOTION! REPORTS.com (http://www.emotionreports.com/ ) an aerospace/automotive industry research and analysis site as well as a former Newsweek, Newsweek Japan and Newsweek International industry correspondent. "Russia quickly seized the initiative through the commercial application of the world's largest production aircraft, the Antonov AN-124 military airlift, which can not only carry up to 150 tons in heavy goods such as oil rigs, aircraft fuselages, satellites and sections of assembly lines, but can operate from underdeveloped or battle damaged airfields. It right now controls this industry with an international customer base including Boeing and the U.S. Air Force."
"Boeing's intent, of course, was to find order bank increasing non- military applications of the superlative operational characteristics of the C- 17, which is unrivalled in its ability to deliver up to 87 tons of heavylift items at 489 kts anywhere on the planet where there's flat earth. In fact, it requires no infrastructure and is self-unloading," says Stokes. Astoundingly, the Globemaster in Air Force tests can take off and land in 1310 ft with 22 tons aboard owing to high lift and high sink rates. "Trying to compare a C-17 to a 747 or even the AN-124 is like comparing Fat Albert to Michael Jordan, owing to its superb aero-athleticism. And that ability makes it a potentially indispensable tool for the movement of supplies for oil, gas, gold, diamond, coal or other exploration/mining projects in austere areas with short, non- infrastructure or non-existent, airfields. This has been designated as the SAM or short and austere, market; a subset of the HOM or heavy and outsize, market."
The program that emerged from these efforts, a joint Air Force and Boeing project, became known as the CAMAA or Commercial Application of Military Airlift Aircraft.
"Although no longer carrying this program designation, the diligent efforts of colleagues and associates over the past five years in particular in government and industry have yielded 17 case studies, involving some of the largest corporations in the world. This undertaking identified real projects worth in excess of $400 billion that could benefit from and support up to 50 commercial C-17s," Stokes says. He further notes that the 30 year business plan is complete covering all areas of operation inclusive of the role played by its strategic partner, a globally renowned air cargo operator who was a major player in movement of materiel for Gulf War I. "I must say that thanks to the keen insights and industry operational knowledge of our strategic air partner, who worked tirelessly with GHH personnel, the heavylift project evolved and solidified.
"Now the work begins, GHH making the transition from being primarily a development of intellectual resources entity in terms of project development policy and process, to a profit and loss model."
Stokes notes that major investment banking firms who had the opportunity to review the business plan and case studies, declared it as a financeable undertaking.
"We have also been encouraged by the fact that several international investment banking firms and other financial institutions who have reviewed the plan data and case studies presented by the principals and involved parties of Global HeavyLift Holdings, LLC, feel it is a viable pursuit," Stokes continued. "They also understand that current issues relative to specific Congressional language allowing the Air Force to re-sell first generation C-17s as part of the Transformational Recapitalization aircraft acquisition initiative, and FAA special certification must be resolved. Indications are they will. It is therefore our intent to seek out and maintain appropriate relationships conducive to the development of best practices leading to required funding."
This alternate financing initiative, Stokes says, referencing a November/ December 2004 Defense AT&L article "Transformational Recapitalization: Rethinking USAF Aircraft Procurement Philosophies" by Pentagon Consultant and national security strategist Dr. Sheila Ronis, will allow the Air Force to re- sell its aircraft, while still possessed of much of its useful life, to the private sector for development of a U.S. controlled heavylift industry. "The largest benefit is the USAF no longer has to be stuck with aircraft in inventory for upwards of half a century as in the case of the B-52, the KC-135 or C-5," says Ronis. "Instead, it can sell its aircraft at the 14 or 15 year mark -- operationally still young by current standards -- to the private sector as would be the case with C-17 or in the case of fighter and bomber craft, the air forces of other countries. The monies that it acquires, gets added back, or recapitalizes, existing budgets for acquisition."
A "Win-Win" Scenario
"The 'win-win' is that a new major industry, heavylift, and it is no less than that, is launched at a time when the country is reeling from industrial base erosion owing to the crippling effects of sustained economic warfare against the profitability and capacity of core automotive and aerospace companies. Additionally, the Air Force takes a major step in reducing the average age of its aircraft inventory, presently at 27.2 years. That number, incidentally, is the highest in this service's history," says Ronis.
"It goes without saying that the C-17 is an important, if not critical tool in the global and asymmetric war on terror that requires new levels of rapid response, and thus an invaluable asset in matters military and economic."
This assessment of the C-17 is shared by several Senators and Congressmen as indicated in a December 16, 2005 letter sent to President Bush advising him that it is imperative to maintain production of this aircraft that has regularly exceeded performance expectations, in addition to establishing new records in airlift capacity.
Echoing Dr. Ronis' comments, Stokes notes it is crucial that the Long Beach, California, C-17 plant, with its highly trained work force and supplier base identified as a national strategic asset in a Department of Commerce report executive summary on the economic and industrial base impact of this aircraft, remains open. "Every C-17 that we take off Air Force books," says Stokes, "Allows them to order another to address much needed military airlift capacity. Although the current position is that 180 aircraft is enough based on a mix of C-17s and retrofitted (engines, avionics) C-5As and Bs, the fact that the military must use Russian AN-124s to make up for in-theater short falls renders such conclusions at best questionable. Moreover, it is our understanding that the required reliability/mission completion expectations for the retrofitted Galaxy's will not be met. Further, it is the opinion of several colleagues that the world is being made safe for the AIRBUS-EADS A400M turboprop airlifter, whose performance falls in between the venerable Lockheed-Martin C-130 and the C-17.
"If the C-17 is discontinued and its tooling removed to an undisclosed location for future use should the retrofitted C-5A and Bs, with a price tag now approaching $10 billion and may well exceed that (enough to acquire up to 50 new C-17s through existing acquisition process and pricing; more if new acquisition finance initiatives are utilized) not meet projected performance objectives, the current airlift shortfalls will be exacerbated. Moreover, it will be four years (2011 if production were re-initialized in 2007) before a C-17 rolls off the assembly line again.
"Waiting in the wings, no pun intended, will be EADS with its A400M, ready and willing to provide these aircraft by 2009. At this time, they are suggesting to potential customers in Air Forces around the world to acquire the retrofitted C-130J, which they will acquire in a buyback program exchange once the A400M is available. In our estimation, it is a brilliant strategy and the epitome of that which constitutes economic warfare in a Sun Tzu sense, with Boeing being effectively eliminated from the provision of airlift aircraft for at least a decade. It goes without saying that the impact on the manufacturing base will be considerable: 700 suppliers in 42 states who build the C-17 either cease to exist or must scramble to find alternative work."
The irony of it all, Stokes further noted, is that members of his team had pushed for the C5A and B retrofit as an interim commercial heavylift program aircraft while waiting for BC-17s. "It was to be an alternative to the acquisition of AN-124s should our overtures to the Russians and Ukrainians at the time not have succeeded. Also, it had been suggested that the retrofit be carried out in Poland as part of the 'offset' (an investment in the country virtually equivalent to the value of the aircraft purchase) program required as a condition of purchase of F-16Cs by the Polish government.
"In the middle of these discussions, someone managed to obtain a Congressional mandate for maintaining the C5 inventory at current fleet strength -- sans the 14 designated for mothballing -- until 2008.
"As far as performance, initial projections were that new engines and avionics (The Israelis being considered to accomplish the avionics upgrade) would eliminate 75% of the infamous reliability problems of C5 over the past four decades, including a structural spar concern. It is now our understanding these goals cannot be achieved, especially with 62 of the 112 aircraft being 40 year old 'A' models, (Note: The C5A production line was shut down and then re-opened over a decade later to accommodate the Bs) which makes the inclusion of these aircraft in the airlift mix as the reason for the 180 aircraft cap on C-17 all the more puzzling."
Stokes was pleased that a recently completed Department of Commerce' C-17 Economic Impact Report Executive Summary clearly corroborates, according to sources, GHH's long-time initiative in supporting the current and continued necessity of maintaining the Boeing C-17 Globemaster III manufacturing facility in Long Beach, California and the viability of the commercialization of this aircraft.
U.S. Industrial Base Global Supply Chain Vulnerability
While it waits for the near future inclusion of C-17 aircraft representing the core of the U.S. heavylift industry, Global HeavyLift, along with strategic partners, will work diligently with major industrial firms to address global supply chain transportation logistics vulnerabilities resulting from the fact that no ocean-borne shipping is in U.S. hands but with China and South Korea. "Permanent air augmentation of the global supply chain, especially automotive, is not an option or a stop gap methodology, but an imperative," says Stokes.
The company will also engage in pursuit of executive transport opportunities through the use of strategic partner-controlled Citation Xs, Embraer Legacys and LearJets.
"We are looking forward to the launch of an American controlled heavylift industry that may very well help change the face of the global industrial landscape," concludes Stokes.
About Global HeavyLift Holdings, LLC
GHH is a strategic air transport solutions entity that was born of a multi-year public/private effort among forward thinkers in both the private sector and government to mitigate emerging and observable vulnerabilities in the U.S. industrial base global supply chain. Such vulnerabilities are represented by the fact that no ocean-borne shipping is in U.S. hands at present, thus potentially subjecting American corporations, especially automotive, and their global operations to the whims and perhaps economically hostile activities of and by foreign governments. Add to this the risk of terrorist activities, which have, according to the Department of Homeland Security, targeted maritime operations; i.e., ships, ports and ocean containers.
Defense Logistics Agency (DLA) listed, (http://www.ccr.gov/) it is the goal of GHH and its strategic partners around the planet to work with key logistics personnel within these corporations and government agencies to conceptualize, craft and structure long-term global supply chain alternative transportation methodologies through continuous -- not stop gap or emergency -- air augmentation solutions. Its most important mission, however, has been in the co-development of global architecture for infrastructure of a new American controlled industry, Heavylift, utilizing the excellent airlift performance characteristics of the Boeing BC-17.