Investing and Global Finance News

Monthly Archives: February 2012

Naoki Tanaka: Japan May Pull Out of Multi-Billion Dollar Deal with Lockheed Martin

Japanese Defense Minister Naoki Tanaka

Japanese Defense Minister Naoki Tanaka told the Japanese parliament that Japan may be forced to back down from a deal with Lockheed Martin for the purchase of 42 F-35 stealth fighter jets if prices for the state-of-the-art craft continue to climb or if manufacturing delays adversely affect their delivery date.

Last year Japan announced its intention to purchase the fighters in a proposal valued at more than $5 billion. The F-35 is poised to become the fulcrum of the US armed forces and allied military organizations internationally, but the planes development and construction has been the victim of delays and over-budget costs.

Japan is expecting delivery of its first F-35s in 2016, priced at about $120 million each.

“I think we will reach a formal agreement before the summer,” Tanaka told a session of Parliament. “If we cannot reach an agreement at that time, this would create a great deal of uncertainty for our national defense and preparedness. We would naturally have to view the possibility of canceling our plan or selecting another aircraft.

The program to build the F-35s is a partnership between Lockheed Martin, Northrop Grumman and BAE Systems. They hope to build a total of 2,400 fighter jets for sale to the US military and US partner nations, with three different models planned for each of the three main armed services divisions, Air Force, Navy and Marine Corps. The cost of the program was originally established to be a total of $233 billion, but now estimates predict costs to top out closer to $385 billion. Some analysts believe that over the coming 50 years the cost of manufacturing the F-35 could even reach $1 trillion.

The F-35 will replace the old Cold War-era fighters such as the Air Force’s F-16 fighter and the F/A-18 Hornet favored by the Navy.

Robert Gates, the previous defense minister, said last January that the Marine’s version of the F-35 was placed on a two-year probationary period due to “significant testing problems.”

Leon Panetta, his successor as defense minister, nullified the probation at the end of last month.

Still, the Pentagon wants to slow down its schedule of purchasing the plane to save money, which can have consequences on the timely delivery of the jet fighters abroad as well as adding to the already high cost of the plane; therefore Japan’s concern that they might be forced to either choose an alternate plane, or pull out of the deal altogether.

European Stocks Up as Bailout Talks Continue

European stocks are maintaining a six-month high, rising for a fourth day as China takes action to boost growth and EU officials work on another Greek bailout. TNT Express increased by an impressive 60% after turning down a significant offer from United Parcel Service, while TNT shareholder PostNL climbed 50% as well. Meanwhile, the Stoxx… Continue Reading

IMF Warns Global Economy in Face of Rising Oil Prices

As debt crisis and economic turmoil sweep across Europe, the International Monetary Fund has identified another looming threat to global economy; rising oil prices. The fund strongly suggests monitoring tension between Iran and the Western world. The United States have sanctioned Iran’s oil consumers, and the EU is considering an embargo as well. Seeing as… Continue Reading

Top 4 Businesses and Trends for 2012

Senior Care Medicine and related technology have changed the senior world today; Americans are living longer and more independently as they age. Still, mobility and daily tasks can be difficult, and so businesses and services in the senior care industry are booming. Health and Wellness Whether it’s a fitness center or a healthy salad bar,… Continue Reading

Great Google Perks

So why is it so great to work for Google anyway? For one thing, they make sure that their employees are happy with a capital ‘H.’ Out in Silicon Valley in Northern California Google employs about 32,000 people, working on projects as diverse as cell phone software to search algorithms. “People have a tendency in… Continue Reading

Wal-Mart Offers Insight on New “Consumer Normal”

Americans will spend money despite the hesitant economic recovery as long as they believe they are buying at the lowest prices, according to Wal-Mart Stores Inc., the U.S.-based multinational retailer. The department store chain discovered the nation-wide habit by guaranteeing the lowest prices in the market throughout this year’s holiday season. Last year’s fourth quarter… Continue Reading