Boeing Analysis: Updated 6/01/10 Congress Approves Sale of 10+ C-17s to India (Indian Air Force IAF Pending Order...Not at Risk; US DoD Actions Imply Non-Boeing Future)

Global HeavyLift Holdings, LLC
Air Transport Solutions For The 21st Century

Press Analysis: Updated 6/01/10 – US
Congress Approves Sale of 10+ C-17s
to India
Indian Air Force (IAF) Pending Order
For 10 Boeing C-17s Not at Risk; US
DoD Actions Imply Non-Boeing
Future

Copyright 2010 GHHLLC 74 W. Long Lake Rd. Suite 103 Bloomfield Hills, MI 48304 248-809-1905
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Global HeavyLift Holdings, LLC
Air Transport Solutions For The 21st Century

Press Release: 26 May, 2010; Updated 28 May and 1 June, 2010

Contact: John T. Chuhran, Director of Public Relations

Ph.: 248-809-1905 Email: globalheavylift@ymail.com

Image: US Air Force

“The drumbeat of anti-C17 commentary in US,
European, Indian, Pakistani and other global news
mediums; a strike at Boeing Long Beach by Union
workers and the observably large leap in logic
suggesting Globemaster III will be terminated as a
result, appear to be part of a well-coordinated effort --
again -- to render as self-fulfilling prophecy SECDEF
…Gates' unfounded insistence on ending production of
the world's most successful strategic/tactical airlifter.”

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Unmatched Airborne Athleticism: Boeing C-17 Globemaster III Image: USAir Force

Update 6/01/10: US Congress Has Approved The Purchase of 10+ C-17s By India

Bloomfield Hills, MI, May 28, 2010 (PressReleasePoint-- UPDATE) -- Global HeavyLift
Holdings, LLC, a Defense Logistics Agency (DLA www.ccr.gov) entity based in Michigan,
believes it is appropriate to address, yet again, the continuing attacks, misstatements and outright
analytical/factual errors carried by multiple media outlets globally against Boeing C-17. These
are largely based on comments by Secretary of Defense Dr. Robert Gates, elements of the USAF,
and others demanding an end to its production.

The drumbeat of anti-C-17 commentary in US, European, Indian, Pakistani and other global
news mediums; a strike at Boeing Long Beach by union workers and the observably large leap in
logic suggesting the Globemaster III will be terminated as a result, appear to be part of a well-
coordinated effort -- again -- to render as self-fulfilling prophecy SECDEF Gates' unfounded
insistence on ending production of the world's most successful strategic/tactical airlifter.

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Objective Reportage
While GHH feels the bulk of reportage in certain media outlets commendably takes on an aura of
objectivity regarding IAF plans to acquire C-17, that aura, they contend, collapses with pointed
and all-caps references in some to the US President and SECDEF's stated desire to kill it; i.e.,
"Everyone agrees, except Obama and Gates. Maybe they know something others are not telling
us... Why is India buying the C-17 when Barack Obama and Robert Gates want to junk it, asks
Shantanu Guha Ray?" (Note: As of 6/01/10, The US Congress has approved the sale of C-17 to
India)

Since it is somewhat inarguable by virtue of unparalleled mission completion rates (verifiable
through the US DoD) that Boeing C-17 is the best airlifter in the history of aviation, and
possessed, as articulated by Boeing spokesman Jerry Drelling, of true strategic/tactical duality of
mission capability, we'll address with specificity the concern mentioned in several versions of a
report "Maybe they (the President and SECDEF) know something others are not telling us."

"The direct answer is, and with all due respect to the President and Dr. Gates, no, they do not
'know something others are not telling us', says Myron D. Stokes. GHH Managing Member.

"Since so many editorials are containing C-17 catch phrases like 'unnecessary', 'not requested',
'The Air Force says 180 (or 205, now 223) is enough', one assumes that such assertions
concerning this superlative airlifter which has no true near, mid or long term replacement, are
fact checked to ascertain the worthiness of these comments", he said.

As stated in several press releases by GHH over the past year, the data to which the President,
SECDEF, the SECAF and others have referred to as reasons for termination of C-17 production,
have been debunked as based on flawed analytics and inapplicable, outdated, conflict
assumptions by the GAO and Congress, or do not exist. GHH believes they can only be referring
to the 2005/2006 Mobility Capabilities Study (MCS) produced by the Pentagon Office of
Program Analysis and Evaluation (PA&E) and the Strategic airlift section of the 2006
Quadrennial Defense Review (QDR) which echoes MCS conclusions that "180 C-17s augmented
by 112 REAMP/RERP C-5s was enough".

These same flawed conclusions have been repeated in the 2010 version of MCS, despite DoD
claims of "enhanced fidelity" regarding strategic/tactical airlift analytical matrices.

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Image: USAF

In defense of what seems to be a dichotomy of that which is publicly stated and actual airlift
requirements, GHH contends, the AF was pretty much hamstrung and stuck with the Lockheed-
Martin C-5s, which the service desperately wanted to get rid of, thanks to behind the scenes
maneuvering resulting in a 2004 Congressional Mandate authored by Sens. Kennedy and Biden
that prevented retirement of any models save for those 14 AC that were absolutely beyond repair.

The comments of a very upset AF General were conveyed to GHH by government associates the
day the mandate was implemented: "We keep trying to push these aircraft [C-5s] out the back
door, and they [Congress and LMCO] keep pushing them in the front door. From this point on,
it's going to be darned difficult to get C-17s at the levels we need them (at least 222, with 300+
quite usable)." (note: as of August 2009, this mandate was allowed to expire, paving the way for
the USAF to retire C-5A and B models known for their notorious unreliability; currently, a 56%
mission completion rate)

"The General mentioned above was of course, quite correct," says Stokes. "It has been a yearly
struggle to keep the C-17 Long Beach line open. And because the existence and continuance of
C-17 is so vital to our implementation of a US/NATO-controlled Heavy and Outsized industry
utilizing modestly, very modestly, modified Globemasters designated BC-17, we have worked
diligently to maintain its production as the linked releases from last year, following the April
2009 announcement by Dr. Gates of DoD intent to end production, demonstrate:
http://www.slideshare.net/GHHLLC/global-heavylift-...
http://www.pressrelease365.com/pr/industry/aerospa...

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Questionable Behavior
Stokes further says the arguments presented by C-17 antagonists have at best been puzzling, and
most certainly to Boeing, since there is no basis whatsoever for their assertions of "We have
enough C-17s and buying more is a waste of money, epitomizes 'pork barrel' spending and is a
poster child for the extremes of earmarks."

"Nothing is further from the truth, and we openly challenge our colleagues both within
government and those who represent the private sector cheering section calling for the demise of
this indispensable airlifter, currently flying at over 159% of mission utilization projections, to
produce the data to support their arguments. It is not enough to say 'planes the AF did not request
or need', 'unwanted C-17s', or, 'The SECAF says they have more than enough to handle even
worst case scenarios'. No, one must be able to support such contentions, and we must not forget
the DoD spends 10s of millions to contract Russian/Ukrainian owned An-124s to make up for in-
theater strategic airlift shortfalls. So much for 'we have enough'", he said.

Short story? The data do not exist to support C-17 termination.

GHH personnel and associates within industry and government marvel at the lengths certain
colleagues in the private sector constituting elements of what they believe to be an "intellectual"
assault on C-17, are willing to go in demanding the end of this aircraft. This, in the form of
specious, if not fallacious, claims relative to C-17 cost which one think-tank claimed was
USD376 million (included per plane development costs; an atypical publicly stated cost
representation that goes beyond the disingenuous), another organization, 276 million. The AF
gets them according to Boeing and the service itself, for 200-230 million or soon, even less, as
Boeing Long Beach administrative and production personnel become more efficient everyday
through the process of continuous improvement. Economies of scale will reduce costs even
further, thereby reinforcing the wisdom of a multi-year buy (2011-2020) for 120+ C-17s.

"Apples to Oranges" Comparison
And then, there are those who make an "apples to oranges" comparison of retrofitted C-5s
versus new C-17, citing "USD81 million for the larger capacity (120 ton) Galaxy as opposed to
200 million for the smaller (87 ton) Globemaster III."

"As noted in a 2009 Aviation Week piece by Amy Butler, the comparative numbers presented in
response to a clearly planted question, taken at face value, would cause any reasonable person to

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conclude that support of C-17 would justify an immediate psychiatric examination", Stokes said.
"That is, up until the moment they are gob smacked by the operational realities of Iraq and
especially Afghanistan: C-5s require significant infrastructure, and as in-theater personnel have
said 'There ain't a lot of that in Afghanistan."

GHH observes that since people continue to be influenced by the numbers game and those
creating an atmosphere of perceived fiscal responsibility as regards C-5 vs. C-17, these numbers
ought to prove intriguing:

A.) USD81, 000,000 for one REAMP/RERP C-5 = one still near half century old airlifter
which has been notoriously unreliable throughout its service life (current: 56% mission
completion rate; i.e., half the time it's flying, half the time it's not) and is all but useless
in the operational realities of asymmetric and conventional warfare scenarios existing
concomitantly -- requiring rapid force projection of men and equipment directly to
theater. C-5 requires significant airfield infrastructure, C-17 does not, as proven in
Afghanistan, Iraq and multiple humanitarian/disaster missions.

B.) On the other hand, USD60,000,000 , when utilized in conjunction with a
Congressionally approved Transformational Recapitalization defense platform
acquisition process as outlined in the November 2004 issue of Defense AT&L, which
allows the USAF to resell first generation C-17A models to the private sector for
140,000,000 (market value of C-17, as assessed by one of the most respected aviation
consulting firms, is in the 90-140mil range) begets a new C-17 ( note: current "flyaway"
costs to the AF are in the range of 200-230mil; closer to 200mil as processes of
continuous improvement are expanded and economies of scale from multi-year orders
are applied.) ordered from Boeing, and by State Department mandate, immediate access
to the sold C-17A in times of national emergency, or as needed.

Result: A 21,000,000 per plane savings (actually more, since it is known that the C-5 retrofit
cost stated by Lockheed-Martin, will again prove unreasonably low and rapidly invoking another
breach of Nunn-McCurdy) and two C-17s; one new and one with at least half its service life
remaining, possessing a combined capacity of 174 tons.

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"Shall we talk again", says Stokes, about 'best use of available defense dollars' and leave out the
over-invoking of President Eisenhower, a man of underestimated wisdom who was only
referring to unreasonable waste in the defense industrial complex, and not actions that would
cripple the country's ability to defend itself against enemies past, present and future… including
China?"

MiG-35 Image: Mikoyan-Gurevich

C-5 Galaxy Image: Richard Seaman

Big Target
Operation of C-5's, large targets they are and not likely to be missed by even the most
incompetent of attacking enemy fighter pilots, also requires control of the air in the battlespace
(ask any driver what ship they'd like to be in, C-5 vs. C-17, in a chance encounter with a Mig-35.
Some may also remember Tom Clancy's treatment in his book World War III of troop-laden C-5s
encountering armed Russian bombers).

Page 8

Indeed, C-17, owing to its extraordinary ability to operate on underprepared, even unprepared,
runways as long as it's flat or near flat, earth (the proposed C-17B is designed to land in mud or
beach sand) in austere in-theater locales makes it the indispensable, life-saving, battle winning,
strategic/tactical airlifter it has proven to be. In Air Force tests, it has landed and taken off with
22 tons aboard in distances less than 1350'.

Image: USAF

Unprecedented Capability
C-17's amazing performances, whether humanitarian/disaster relief or conflict support missions,
are virtually the stuff of legend... seriously.

Most importantly, C-17 has proven on a continuing basis it is the ideal, if not perfect, airlift
platform for addressing the potential of conventional and asymmetric warfare existing
concomitantly, along with an observable increase in the frequency of disaster/humanitarian relief
scenarios (think Haiti, Chile and Katrina). This reality, according to military strategists, dictates
need for an ability to rapidly project significant force in a way that acknowledges the
comfortable bi-polarity of the Cold War has been replaced by the dangers and unpredictability of
a militarily/economically emergent China, a nuclear armed Iran, the traditional uncertainties
associated with North Korea's belligerence and terrorist organizations possessed of global reach.

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A World Being Made Safe For Retrofitted C-5s, C130Js and Airbus A400Ms?

A400M Image: Airbus Military

Stokes further says Global HeavyLift will continue in its firm belief that the non-stop and intense
efforts to kill Boeing C-17 are directly the result of a desire by involved parties to ensure retrofit
of all remaining C-5s, advance the cause of C-5M, and introduce the yet-to-be-operational
Airbus/EADS A400M 37 tonne capacity (now 25 tonnes due to its currently being 12 tonnes
overweight) turboprop tactical airlifter into USAF inventories, an assertion confirmed by Airbus
Military's publicly stated desire this year to sell 200 A400Ms to the USAF.

"As regards the clamoring for new purchases of the C-130J, the current iteration of a 50 year-old
design, let's not forget that Airbus has offered to the air forces of the world since 2006 a buyback
of new variant Hercules aircraft ordered, to be exchanged for A400M when available. I suspect a
similar offer has been made to the USAF, thus explaining the current push to acquire tactical
transport aircraft of a type flown and serviced by the grandfather's, even great-grandfathers, of
current pilots and crew", Stokes said.

"It is not a stretch to say all three aspirations require the demise of C-17, and perhaps, Boeing
itself. Moreover, it is quite telling that Secretary Gates, despite his constant statements of the
need to reduce costs and that sufficient airlift capacity existed for 'any contingency', did not
swiftly and utterly dismiss the Airbus objectives as moot. To be sure, South Africa's cancellation
of A400M due to per aircraft cost escalations, which according to their calculations, exceeded C-
17, should give everyone pause, including the Pentagon," he said.

Gates Integrity Questioned
According to Stokes, a recent statement by Secretary Gates to the effect "They [USAF
leadership] do not need and cannot afford more C-17s," and the US Congress is keeping the
program alive "at an unnecessary potential cost to the taxpayers of billions of dollars over the
next few years," is troubling. "Ominously, these completely unsubstantiated statements (except
by questionable and largely publicly unavailable strategic airlift analytics) by the SECDEF

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concerning C-17 have led certain colleagues in industry and government to wonder whether Dr.
Gates has been compromised", he said.

Some eyewitnesses say this Galaxy experienced in-flight structural failure while landing in April
2006 Image: USAF
http://www.youtube.com/watch?v=fI5xTmmPbsY
It is the belief of GHH consultants imply that Boeing is being targeted for removal in major areas
of DoD acquisition plans owing to several actions presumed initiated by DoD leadership. These
include clandestine attempts to sabotage FMS (Foreign Military Sales) of C-17 through
suggestions dropped within the blogosphere and "mainstream" media outlets to the effect it
would be unwise to acquire C-17. Why? Termination of its US production may render
maintenance and repair "problematic".

Of greater concern, Stokes said, is information derived from GHH sources that an attempt is
being made to render inapplicable or inaccessible, the USD2.5 bil allocated within the 2010
budget for 10 more C-17s.

"Never before in the history of the US Defense Budget", Stokes asserts, "has there been an effort
to divert or neutralize -- perhaps through the transfer of C-17 heavy maintenance to the USAF; a
task almost exclusively Boeing's since the aircraft became operational --Congressionally
approved funding of this magnitude."

"It is profoundly disturbing," says one source close to the controversy who cannot be identified,
'that a public servant of Gates' stature and academic pedigree would go to such lengths to ignore
solid, provable, incontrovertible, written and operational evidence of the extreme value of C-17,
and instead pursue a course intended to end in its destruction. I am saddened to suggest that we
must question his integrity in these matters as should the President of the United States."

Page 11

Loss of Last Wide-body Production Line in US Would Cede Future
Heavy Airlift to Chinese Copy of C-17

Image: PRC/PLA

GHH believes it is inarguable that the loss of the country's last wide body airlifter production
line and its product will have critical, long lasting and perhaps unrecoverable negative economic,
national security and industrial base/defense industrial base cohesiveness and viability
implications; contentions supported in the officially unavailable 2005 Department of Commerce
Study "National Security Assessment of the C-17 Globemaster Cargo Aircraft's Economic and
Industrial Base Impacts". http://www.emotionreports.com/downloads/pdfs/GHHDO...

"We strongly recommend review of this very important document by our, with all due respect,
under-informed colleagues who, by their public comments have yet to grasp that the defense
industrial base and the industrial base are one and the same, symbiotic, inseparable and
inextricably linked. They would also do well to take a refresher course in Keynesian economics,"
Stokes said. (http://www.slideshare.net/GHHLLC2/ronis-scenario1-...)

GHH further believes there should be a great cause for concern, if not alarm, that China is well
on its way to producing a larger version of Boeing C-17 based on stolen data.
http://www.uscc.gov/annual_report/2009/annual_repo...

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Antonov Recommendation of An-124 Airlifter Co-production in The US

An-124 Ruslan Image: VD

Stokes also noted the recent announcement by Antonov Aircraft officials, perhaps in
collaboration with Volga-Dnepr, suggesting co-production of the Ruslan with a US partner that
will allow direct purchase by American operators -- something not possible or permissible up
this point despite efforts to change this UKRSPETSEXPORT protocol over the years. "We have
been part of the effort to have a permanent certification issued for the An-124 to operate
regularly in US airspace, as opposed to the per-mission certificates obtained from the FAA by
the operator's Mobile, AL based agent", Stokes said. "We have expressed often our appreciation
for the efforts of the Ukrainian and Russian governments through their state controlled air cargo
operators like Volga-Dnepr, in proving the viability of the heavy and outsized cargo market as a
self-sustaining subset of the air cargo market.

"Moreover, our BC-17 business plan calls for a symbiotic relationship with An-124 core
operators, and we have directly conveyed this proposed interaction at the highest levels of the
Russian government. while at the same time expressing our desire to assist in bringing the
Antonov plant at Ulyanovsk, Ukraine, up to full production.

"It is of note that such efforts have existed for a decade, inclusive of very direct involvement in
the restoration of brain trust for Russian/Ukrainian aerospace industry engineering and design
sectors following the tragic accident of December 2002 that killed 46 senior level engineers,
designers and marketing personnel from both Antonov and Tupolev. Specifically, the Isfahan
crash of an An-140 turboprop being co-developed with the Iranian aerospace sector as the Iran-
140.”

"Nevertheless, we would caution our Eastern colleagues to not inject themselves into the feeding
frenzy designed to terminate C-17 production, since their role in the future of the Heavy and
Outsized market is assured", he said.

Page 13

Transformational Recapitalization Neutralizes DoD Budgetary
Concerns. Forever.
Stokes also asserts that the ultimate conversation stopper when it comes to annual funding of
new or existing DoD programs, which is "is there money in the budget?" has been addressed.
The process is called 'Transformational Recapitalization" and is outlined in the
November/December 2004 issue of Defense AT&L. It will forever change the DoD acquisition
process by allowing the AF to resell in-fleet aircraft to commercial (airlifters, tankers) and
military customers (fighters, bombers, tankers) when 50% of service life is reached.

"The funds derived from this activity, says Stokes,” will flow back into the budget (requiring a
change in scoring law) thus recapitalizing it, and then used to place new orders. Another core
element of Trans-Recap calls for the slowing down of assembly lines rather than building the
contracted AC as fast as possible. This allows upgrades in avionics and weapons systems to be
incorporated while in production, thus precluding the necessity and costs of a complete retrofit
15 to 30 years later. This way, the service is always operating new or fully upgraded aircraft at
all times, and when sold to NATO allies at their half-life, will create new levels of operational
readiness and interoperability," he said.
http://www.dau.mil/documents/publications/dam/11_1...

Indian Air Force in Crisis
It is a matter of record, contends GHH, that the IAF, as a direct result of aging, improperly -
through lack of components - maintained aircraft, has an appalling accident rate, and equally
disturbing, a profound lack of reliable strategic and tactical airlift capabilities at time when
China, by its own design and aspirations, is emerging as a threat to global security. And more
ominously, an immediate threat to India and Pakistan -- whether or not the latter understands this
reality.

China Concerned With India Force Modernization Efforts
According to Stokes, there are analyst colleagues who suspect China is profoundly concerned
about India's being on track, through its acquisition of C-17, to effect a near-term reversal of its
notable lack of capability and capacity to check China's expansionism via an exponential
increase in force projection. "It goes without saying," he observes,” that clearly unsubstantiated
concerns presented in a range of media outlets relative to the wisdom of India's purchase of C-
17, may very well have their origins in the land of Sun Tzu". (recommended data source: United
States-China Economic and Security Review Commission; http://www.USCC.gov)

Page 14

Possible Doubling of India Order?
In a statement certain to raise the controversial bar on matters related to Boeing C-17
continuance, Stokes offered that "As of this moment, in recognition of clear and observable
threats to India's national and economic security, along with a need for enhanced ability to
contribute to humanitarian/disaster relief efforts, colleagues are recommending through channels
that India double its C-17 requirement to 20, thus addressing concomitantly the country's
strategic/tactical airlift requirements for decades, and any true cost concerns through economies
of scale."

Current Status of HeavyLift Initiative
Global HeavyLift's quest to implement a US/NATO-controlled Heavy and Outsized industry
utilizing BC-17 remains in sharp focus despite the continuing efforts kill C-17.

"We continue to interact with all elements of government, industry, the financial sector and those
countries in Europe, the Middle-East and Asia who are either shortlisted or designated as sites
for one of five BC-17 Global Air Operations Epicenters. Indeed, our Director of Middle-East
Operations Tarek Ballout, states that he is looking forward to establishing such an operation in
Oman, with whom we have signed a conditional agreement.

"Ballout believes that 'Oman is poised for larger participation in the geo-economic and geo-
political landscape thanks in part to recent changes in US Embassy personnel, inclusive of a new
Ambassador whom we understand has the greatest respect for His Majesty Sultan Qaboos and
the people of Oman; as do we'".
-30-

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Globemaster III over the Pyramids Image: US Air Force

About Global HeavyLift Holdings, LLC:

GHH Managing Member Myron D. Stokes is a veteran automotive/aerospace industry
analyst and spent several years as an industry correspondent for Newsweek, Newsweek
Japan and Newsweek International. He is currently Publisher of eMOTION! REPORTS.com
(emotionreports.com) an automotive/aerospace industries research and analysis site
targeting professionals within the academic, media, corporate and government sectors. The
site also created a pathway through which white papers and other scholarly works such as
"Crisis On Asimov: A Vision of 2085" by national security strategist Dr. Sheila Ronis;
"Quantum Parallel: The Saint-Hilaire Quasiturbine as the Basis For Simultaneous Paradigm
Shift in Vehicle Propulsion Systems"; “Auto Industry Analysis 2009/2010: GM’s Transition to
China” and "Super-Globalism: Strategies For Maintaining a Robust Industrial Base Through
Technological, Policy and Process Improvement", could be presented to a broadened yet
specific audience.

Page 16

Stokes maintains strong interest in global affairs, and continues to be involved in a range of
nation building and humanitarian/disaster relief efforts. Among these were the
coordination of relief activities with US, European and Middle-East based colleagues
subsequent to the Bam, Iran, earthquake of 2004, the Pakistan earthquake of 2005, and co-
structuring of academic and industrio/economic base developmental programs with
colleagues in Pakistan and India.

Founded in 2002, 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, 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.

###

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Boeing Analysis: Updated 6/01/10 Congress Approves Sale of 10+ C-17s to India (Indian Air Force IAF Pending Order...Not at Risk; US DoD Actions Imply Non-Boeing Future)

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