Xi Jinping Does the Emerald City

Before his powwow with lame duck Obama tomorrow in Washington D.C., Chinese president Xi Jinping is in the Emerald City for a couple of days. Xi arrived at Paine Field in Everett to the welcome of flower-bearing children of a Boeing worker. The big event yesterday, an early dinner at the Westin Hotel in downtown Seattle, was attended by politicos and corporate giants. This is from a story in the Seattle Times by Janet Tu, "In Seattle, Chinese leader vows to join U.S. to fight cybercrime":

The banquet was more than a venue for Xi’s speech: It demonstrated the array of U.S. business and political luminaries with ties to China. 

The head table alone included Bill and Melinda Gates, Gov. Jay Inslee, Seattle Mayor Ed Murray, former U.S. Secretary of State Henry Kissinger, and the chief executives of Microsoft, Boeing and Starbucks — not to mention the CEOs of IBM, DuPont and Ford, three other U.S. governors and U.S. Secretary of Commerce Penny Pritzker.

Jane Perlez, chief diplomatic correspondent in China for the New York Times, describes the logic of Xi's Seattle visit ("Xi Jinping Pledges to Work With U.S. to Stop Cybercrimes") succinctly and accurately:

The Chinese worked hard to front-load Mr. Xi’s trip — his first to the United States as president — with two days of events in Seattle intended to show an upbeat relationship with American business. And in a broad sense it has worked as a show of force to President Obama about the power that China wields, and how much American companies need China even if its policies do not align with Washington’s.

As close as I got to experiencing the Chinese president's visit was the racket made by a helicopter that hovered over downtown in the vicinity of the Westin. When I went out for a post-work four-mile run to absorb the evening sunshine on the last day of summer I felt like Ray Liotta's character at the end of Goodfellas with the helicopter constantly perched over his shoulder.

To get the official position on China one must read today's piece by USG propagandist David Sanger, "Conflict Flavors Obama’s Meeting With Chinese Leader." Writing with Julie Hirschfeld Davis, Sanger pitches the official line like this: The good, decent government officials of the United States thought that when Xi came to power they would have a reasonable interlocutor with whom they could collaborate. Instead they found themselves confronted by a zealous, power-hungry nationalist bent on confrontation wherever he could find it. That's the official line basically. It can be found towards the end of the story:

“This is not the U.S.-China relationship that senior Obama officials expected,” either at the start of Mr. Obama’s tenure in 2009 or the beginning of Mr. Xi’s in 2013, said Michael J. Green, an Asia specialist at the Center for Strategic and International Studies who served at the National Security Council under President George W. Bush. “The assumptions that many people had, that cooperation on transnational threats like climate change would ameliorate problems in geopolitical arenas, was wrong.”

In her speech on Monday, Ms. Rice [National Security Advisor Susan Rice] made it clear the United States and China would showcase their cooperation on climate change, with a deal on carrying out a broad emissions accord they struck last year during a meeting in Beijing. There will also be agreement on a code of conduct to reduce the risk of accidents between American and Chinese aircraft, and steps to expand educational exchanges between the two countries.

But on the areas of sharpest disagreement, such as human rights, the South China Sea and cyberattacks, there is still a wide gulf, and for weeks the White House has been debating how to handle them.

The South China Sea issue erupted last week in the Senate Armed Services Committee when Senator John McCain, Republican of Arizona, pressed David Shear, the top Pentagon official in charge of Asia and the Pacific, to declare when the last time was that the United States sent ships or aircraft closer than 12 nautical miles to the newly reclaimed reefs.

Twelve miles is the usual limit for “territorial waters,” so the operation would show that the United States did not consider this to be Beijing’s sovereign land. Reluctantly, Mr. Shear said the last time was in 2012, before Mr. Xi took office.

“The United States of America will sail, fly and operate anywhere that international law permits,” Ms. Rice said during her speech, repeating the administration’s policy on the matter. But one official said Secretary of State John Kerry and his deputies, along with several intelligence officials, did not see the value in forcing the Chinese to react. Others disagree.

“They’re cultivating strategic ambiguity,” Patrick M. Cronin, the director of the Asia-Pacific Security Program at the Center for a New American Security, said of the Chinese. “What we need, though, is more clarity about our interests. We have to do more to reinforce rules of the road that are against coercion or force, and against this Chinese buildup.” 

Senator Benjamin L. Cardin of Maryland, the senior Democrat on the Foreign Relations Committee, said policy makers never anticipated this degree of trouble from Mr. Xi, either on maritime issues or on human rights, a prime area of concern after the Chinese president moved to crack down on dissidents and lawyers and took aim at civil society groups. 

Representatives of an array of those groups met with Ms. Rice at the White House on Tuesday to discuss concerns about China’s proposed legislation to tighten controls on foreign nongovernmental organizations, and senior officials said the topic would be a focus of the meetings between the two presidents. 

“Originally, there was reason for optimism about the speed of change in China” under Mr. Xi, said Mr. Cardin, one of a group of lawmakers set to meet with the Chinese president on Capitol Hill on Friday. “And now there’s sort of disappointment.”

What goes unmentioned in all of this is anything that the United States has done. Since Xi's ascent to the presidency, Obama has staged a coup in Ukraine, launched a new Cold War against Russia, cracked the Middle East apart with its regime-change operation in Syria, and lectured Hong Kong on how to handle the Umbrella Movement protests, not to mention the militarized "pivot to Asia."

The United States under the Peace Prize POTUS has been a rogue elephant on the world stage, blundering and marauding, destroying societies willy-nilly. Now even the European Union shows signs of cracking under the strain.

Chomsky's recent talk at the New School, where he deconstructs right-wing opposition to the Iranian nuclear deal, is illuminating with regards to the U.S. position towards China. Rogue powers do not allow nations to possess a deterrent:

Kline-Miller Cromnibus Amendment: The Coming Death of Defined-Benefit Pensions

Surprisingly there is not much news this morning. The last Umbrella Movement encampment was taken down and Japanese Prime Minister Shinzo Abe's Liberal Democratic Party won 291 of the 475 seats in the lower house of parliament (meaning that the nuclear power industry can rest easy).

There is an excellent post by Naked Capitalism's Lambert Strether. In "Cromnibus Pension Provisions Gut Forty Years of Policy, Allow Existing Pensions to Be Slashed" Strether analyzes the impact of the Kline-Miller amendment that was part of the budget bill that cleared the Senate this past Saturday. Strether notes that most liberals have been focused on the amendment that allows big banks to once again engage in the derivatives trade. This amendment sparked a great deal of outrage, and rightly so, because it was the derivatives trade conducted by behemoth banks like Citigroup that contributed to the Great Recession of 2007-2008.

But Strether does us a service to shine a light on the pension-overhaul amendment because it will in short order adversely affect the lives of millions or regular working Americans:

Oddly, or not, “progressive” and Democratic loyalist commentary on the Cromnibus bill has — with occasional honorable exceptions –  focused almost exclusively on Elizabeth Warren’s fight against a derivatives provision that might benefit big banks, as we saw yesterday, and has been silent about a provision that could do far worse and far more immediate harm to working people who made their retirement plans based on the belief that their pension rights were secure and backed by legislation, and the idea that a contract was a contract. Oldthink, I know! 

So in this post I want to rectify that mysterious silence, and take a look at the truly nauseating Kline-Miller amendment, passed by the House, and part of the Senate bill forwarded to Obama for his signature. David Dayen summarizes: 

"Under the bill, trustees would be enabled to cut pension benefits to current retirees, reversing a 40-year bond with workers who earned their retirement packages."

Michael Hilzick: 

"Under ERISA, the 1974 law governing pensions in the private sector, benefits already earned by a worker can’t be cut." 

Now they can. That’s right. Even if you’re retired and vested in a private pension plan, your benefits could be cut. Congress retraded the deal (if I have the finance jargon right). That’s nauseating even for today’s official Washington. And the bill was passed in a thoroughly bipartisan fashion: Kline is a Minnesota Republican, and Miller is a “liberal” California Democrat. [Reach me that bucket, wouldja?]

As Strether notes, the amendment is co-authored by liberal lion George Miller, Democratic U.S. Representative from California. This means that pension overhaul was put forward with the approval of organized labor. But why? Because multiemployer pension plans are top-heavy with graying participants; there are not enough active workers to maintain all the retirees.

I speak from experience because my union multiemployer pension plan went through an overhaul at the beginning of the Great Recession (see "Why This Pervasive Sense of Doom?"). The plan was placed in "red" or crtitical status by the Pension Benefit Guaranty Corporation (PBGC). Part of being in the red means that the plan's trustees must put forward a proposal to return the plan to the black, usually a combination of benefit cuts and employer surcharges. From what I can tell the Kline-Miller amendment allows multiemployer pension plans to implement these changes without going into critical status and without being placed under PBGC stewardship. Basically, it is the unions trying to get out front of a looming crisis by trimming benefits now.

Strether provides a valuable counterargument. Why admit defeat? Why not make an effort to fully fund all the contractual benefits?

What Were the Alternatives to Kline-Miller? 

First, there are options available, even accepting that legislation needed to be passed this sesson. Reuters: 

"[Randy DeFrehn of the National Coordinating Committee for Multiemployer Plans], AARP and other advocates reject the idea that solvency problems 10 to 15 years away require such severe measures. They have pushed alternative approaches to the problem; one that is included in the deal, DeFrehn says, is an increase in PBGC premiums paid by sponsors, from $13 to $26 per year. Advocates also have called for other new revenue sources, such as low-interest loans to PRGC by the once-bailed-out big banks and investment firms." 

So why not have the sponsors pay the full freight? The workers already did! (Though I have to say that getting a loan strikes me as… .Well, let’s call it weak tea. Or weak TINA.)
Second and more radically, unions could and should have been strengthened. Read between the lines of this bland Wall Street Journal article: 

"Multiemployer plans are administered by unions and are funded by multiple employers in a given industry, typically in fields such as trucking, retail and construction. There are about 1,400 plans in all, covering roughly 10 million people. Because of declining ratios of active workers to retirees, and loose funding standards, some of the larger [Multiemployer plans], such as the Teamsters’ Central States fund, are in dire financial condition."

Yeah, those “declining ratios” just happened naturally, right? Leaving aside the issues of financial mismanagement by trustees and the Great Financial crash, the problem is an actuarial one, right? In These Times: 

"The national trend of de-unionization coupled with job losses from the recession have meant that fewer and fewer workers are paying into funds as more and more retirees are starting to receive benefits." 

So, if the ratio between active workers and retirees has gone out of whack, why not strengthen unions so that there are more “active workers” signed up? Especially since the problem is 10 or 15 years away? Is there some reason a “liberal” California Democrat wouldn’t consider that? (Note above we show why Kline-Miller makes union membership less attractive, so it’s sending union pension actuarial conditions in exactly the wrong direction.) 

Third, the think tank behind Kline-Miller is the National Coordinating Committee for Multiemployer Plans. Here’s their report. It’s titled: 

“Solutions not Bailouts” 

But what would be so very wrong with — work with me, here — just bailing the pension plans out? I can’t see why bailing out workers isn’t a solution. It certainly was for the banksters! International Business Times: 

"While Congress responded to the 2008 financial crisis by rescuing the banking industry with an $700 billion bailout [and that’s only TARP!], there’s no rescue on the way for retirees. Lawmakers are offering no bailout to close multiemployer plans’ aggregate $42 billion deficit." 

$42 billion? Spread out over decades? That’s chicken feed! What’s wrong with these people?

Yes, considering Congress just approved $64 billion for military campaigns abroad.

When Boeing successfully broke the will of the Machinists Local 751 at the beginning of this year and forced a two-tiered pension on its workers -- new hires get a 401(k)-type defined-contribution plan, while the Machinists who have been with the company for a set amount of years get to keep their defined-benefit pension -- the future was plain to see. No longer was a robust pension going to be a benefit synonymous with union membership. Recently, the large, privately-held utility, Puget Sound Energy, was able to force the same change on the Electrical Workers union.

Ten-to-20 years from now defined-benefit pensions will be effectively phased out. Only the 1% will still enjoy their benefits.

Why This Pervasive Sense of Doom?

On the train home from work last night, reading an article on the collapse of honeybee colonies (Dady Chery, The Bee’s Vanishing Act), I realized why it is there is this pervasive sense of doom that shrouds everything these days. No longer as a society do we structure in -- acknowledge the merit of -- repose.

Formerly in the United States there was a widely shared cultural vision of the importance -- the justice and fairness -- of a secure retirement. One would toil his or her heart and soul away, kissing youth goodbye, at a job(s), usually dehumanizing, with the promise that eventually one would get to relax for maybe a decade or two of dotage.

At the beginning of this year when the Boeing Machinists approved, following threats by the employer (backed by politicians elected by means of union support), an end to their defined-benefit pension, a line was crossed. The palm at the end of the American mind -- retirement with a good defined-benefit pension -- has been chopped down.

The Great Recession knocked my union's pension plan into the red. One of the moves the plan trustees made to get back into the black was to abolish "the rule of 80." The rule of 80 states that once a plan participant hits age 55, any years of credited service in the plan plus the participant's age that add up to 80 or more allows the participant to retire early with full benefits. In other words, the "gold standard."

My idea was to be done with the rat race by 59. That is what it would take me under the rule of 80. I would retire to California and spend the remainder of my days reading books I want to read -- on ancient Egypt, Big Foot, Robert Caro's LBJ opus -- and jogging beneath an orange sun.

But shortly after the Lehman meltdown, the rule of 80 was rescinded and so was the daydream of freeing myself at 59.

It is war all the time. That is what it is. And that is what I realized sitting on the train last night. The Hobbesian state of nature, the war of all against all, which supposedly motivates us to come together and form a society, is actually the basis of our culture now. And no better representative of this is the Grand Old Party, an absolutely contrived diabolical corporate machination designed solely to expand the prerogatives of the super-rich. That the Democrats have been beaten repeatedly by these soulless ghouls proves that they are no better.

Bear this in mind next week or next month when Obama announces his immigration plan. That plan was rolled out by the Gray Lady yesterday, "Obama Plan May Allow Millions of Immigrants to Stay and Work in U.S.," as part of the post-midterm debacle counterattack that the administration has skillfully put forth -- along with net neutrality and the China carbon-reduction accord -- to mobilize its broader base of support.

Republican leadership is talking tough, even going so far as to mention the possibility of a government shutdown if Obama extends protections to millions of undocumented immigrants. The Tea Party will be stirred up. No doubt there will be angry rallies of white people with rifles held aloft.

The optics favor the Democrats. It's a good political move by Obama. It empowers the knuckle-draggers in the GOP and accentuates the fissure with the Chamber of Commerce Rovian brain trust, who favor an immigration deal.

In the end, if past iterations of Potomac Armaggedon are a guide, a deal will be cut, and that deal will likely be one which sells the undocumented down the river.

But maybe the GOP's pandering to Dixiecrat nativism will finally bust the seams of the party. We can only hope. It is doubtful though.

Which leaves us only the repose offered by the mind. For me, now, it is the idea that this weekend I will watch football on television while eating an entire bag of clementine oranges.

Gray Lady's Ukraine Reporting Anchored By Junta Leader's Facebook Page

If you are a subscriber to the New York Times, and you have been following its reporting of the ongoing turmoil in Ukraine, you know that each day you can read what junta interior minister Arsen Avakov has written on his Facebook page. This is how the "newspaper of record" anchors its journalism, uncritically quoting a putsch leader's Facebook page. Today two of the Gray Lady's stories feature Avakov's Goebbelsian musings. First, from C.J. Chivers and Noah Sneider, "Deadly Clashes Erupt in Ukraine as Troops Push Toward a Rebel-Held City":

With the three-day period of mourning declared by the city ending Tuesday, Mr. Avakov, the interior minister, said he had sent a newly formed police unit called Kiev-1 from the capital to Odessa, in case fighting erupts again. 

In a Facebook post, Mr. Avakov held police officials in Odessa responsible for failing to prevent a pro-Russian mob from attacking a pro-Ukrainian rally, a confrontation that touched off the violence on Friday. 

The new police unit was drawn from the street activists who helped topple Ukraine’s government in February after months of demonstrations on a central plaza in Kiev in favor of closer economic ties with Europe and against corruption. 

Mr. Avakov said he had fired the entire leadership of the Odessa police. 

Tensions remained high in Odessa, with the sense that the street fighting of last week was not so much over as in abeyance.

With a little unbiased reporting, Chivers and Sneider could have noted that the "pro-Ukrainian rally" that the "pro-Russian mob" allegedly attacked was actually much larger -- numbering in the thousands compared to hundreds for the federalists -- and composed of soccer hooligans, and that it was the "Occupy"-like encampment of the federalist protesters that was attacked and set ablaze by the Ukrainian nationalist hooligans, prefiguring the blazing massacre at the trade union building. But Chivers and Sneider are not interested in unbiased reporting; Chivers and Sneider are interested in elevating a fascist-led junta in violently suppressing a popular uprising. This is what the Gray Lady stands for in Ukraine.

The next story that spotlights Arsen Avakov's Facebook page is this morning's "Authorities Block Flights Into Eastern Ukraine" by David Herszenhorn:

In a posting on Facebook, the interior minister, Arsen Avakov, accused the pro-Russian separatists of using civilians as human shields. “The Ukrainian military can’t fire on civilians,” Mr. Avakov said. “That is how they are restricted. And this restriction is used by our enemies. The enemy hides behind people and fires from there.”

Have you picked up the pattern here? When the Gray Lady needs to bend reality, say by blaming the victims of the Odessa massacre for their own deaths, or, in the case above, blaming the courageous federalists in Slovyansk for civilian deaths caused by the military junta using armor against its own population, it turns to putsch interior minister Avakov's Facebook page. It repeats without balance or questioning the lies it finds there and publishes them for millions around the globe to read. It is stupendously cynical, crass and pathetic that these are the depths the "newspaper of record" has to burrow to maintain its Americentrism.

Speaking of Americentrism, check out Peter Baker's "Obama Aides Tell Executives to Skip Forum":

The White House said American government officials will not attend the St. Petersburg forum this year. “Obviously, companies will have to make their own decisions, but we believe that the most senior business executives traveling to Russia to make high-profile appearances with Russian government officials at events such as this would send an inappropriate message,” said Laura Lucas Magnuson, a White House spokeswoman. 

The situation has left many corporate executives anxious. At a closed meeting in Moscow of the American Chamber of Commerce in Russia last week, representatives of United States firms expressed aggravation at being penalized either way. “The understanding is that those that choose to go will be on the Obama administration’s dog list,” concluded a participant’s summary of the session. “One U.S. executive at today’s meeting warned that Putin/Kremlin will closely watch which U.S. C.E.O.’s cancel and their Russia business will be impacted.” 

The situation reflects a turnaround from a year ago, when the Obama administration encouraged participation to strengthen trade ties. The chief executives of General Electric, Deere & Company, Citigroup, MetLife, Alcoa, ConocoPhillips, ExxonMobil, Visa, Chevron, Hill & Knowlton Strategies and Cisco Systems attended last year. 

Few, if any, of them will be there this month. Ryan Lance, chief executive of ConocoPhillips, has decided to skip the event, according to the company. Klaus Kleinfeld, chief executive of Alcoa and chairman of the United States-Russia Business Council, canceled plans to attend on Friday, citing “the U.S. government’s requirements.” 

Boeing, which depends on Russia for much of its titanium, has registered Dennis A. Muilenburg, the chief operating officer, but a spokesman, John Dern, said, “We are certainly watching developments day by day.” ExxonMobil and Chevron would not say Monday whether their chief executives plan to return this year.

Either Obama believes that somehow Russia can be brought to heel with these types of cosmetic sleights and made to accept an illegal, neo-Nazi state on its border, or Obama is seriously trying to reconstruct the bipolar global order of the Cold War. The problem with the former is that it is obvious that Russia will not accept the permanence of putschists in power next door, and the issue with the latter is that international communism no longer exists. It is all capitalism now, baby. And capitalism -- how could we ever forget? -- is based on competition. Those business opportunities passed up by Boeing and ConocoPhillips will be grabbed by Airbus and Total. The only way to prevent this from happening is total war. Which at this point is all that the United States seems to be offering the world.

Cold War Renaissance

Administration officials said the internal debate was not whether to penalize Russia for its actions — there is broad consensus for that, one that hardens with each passing day — but when, and how hard. Beyond freezing assets of individuals, the administration could sanction banks and potentially cut the country off from the dollar economy.

Peter Baker                                                   

"Obama Team Debates How to Punish Russia"

The putschist prime minister Arseniy Yatsenyuk peddles ass today in D.C. In addition to an Oval Office ménage à quatre with Biden, Kerry and Obama (scheduled for 2:45 PM EST), "Yats" will indulge in an evening orgy on Capitol Hill hosted by New Jersey's finest "Rent-a-Senator," Bob Menendez. There is a competition underway in Congress between the House and the Senate to see who can bring back the Cold War back the quickest. Menendez, as Chairman of the United States Senate Committee on Foreign Relations, is backing legislation that, if passed, would guarantee future hostilities with Russia. He outlined his bill in a Washington Post opinion piece yesterday:

Our policies toward Russia require urgent reexamination. Congress has a particular role to play. Legislation I’m offering includes the following components: 

●It provides for loan guarantees for Ukraine, consistent with the $1 billion announced by the Obama administration in recent days and mirroring just-passed House legislation. 

●It directs the Obama administration to assist the Ukrainian government in identifying, securing and recovering assets linked to acts of corruption by former prime minister Viktor Yanu­kovych, members of his family or other former or current Ukrainian government officials. 

●It authorizes $50 million for democracy, governance and civil society assistance and $100 million for enhanced security cooperation for Ukraine and other states in Central and Eastern Europe. 

●It provides for additional sanctions, complementing the president’s executive order, against Ukrainians and Russians alike responsible for violence and serious human rights abuses against anti-government protesters and those responsible for undermining the peace, security, stability, sovereignty or territorial integrity of Ukraine. 

●It imposes sanctions on Russians complicit in or responsible for significant corruption in Ukraine.

●It includes needed reforms to the United States’ participation in the International Monetary Fund, which would allow Washington to leverage significant support from the IMF for Ukraine today and for similar crises in the future. 

Russian actions at home and abroad must be viewed in a broader context, not as isolated incidents but as connected events in a troubling pattern of behavior that cannot continue unchecked.

Arguing against this approach, which funds more skullduggery in the form of "democracy" and "civil society assistance,"  is the United States Chamber of Commerce and National Association of Manufacturers. This is from the Peter Baker story at the top of the post:

But American businesses are warning against overreaction. Representatives of groups like the U.S. Chamber of Commerce, the National Association of Manufacturers and the United States-Russia Business Council have been holding meetings at the White House or in Congress to share their views. 

They are urging policy makers to be sure that any sanctions would actually have an impact on Russian behavior, that the costs not outweigh the benefits and that they be multilateral. “We are working closely with policy makers on both sides of the aisle to safeguard manufacturing employees and manufacturers’ investments around the world,” said Jay Timmons, president of the manufacturers association. 

Although the United States does only $40 billion in trade with Russia each year, American businesses argue that the amount understates the real economic ties. Ford, for instance, has two assembly plants in Russia that make cars with material that comes from Europe, so that would not be reflected in import-export figures. 

Boeing has sold or leased hundreds of planes in Russia and projects that the republics of the former Soviet Union will need an additional 1,170 planes worth nearly $140 billion over the next 20 years. Moreover, the company has a design center in Moscow, has just announced new manufacturing and training facilities in Russia and depends on Russia for 35 percent of its titanium.

The Deep State battle shaping up is between the hawks (the neocon national security state) versus the doves (in this case, American big business).

Then there is Europe. To my mind, though Germany, France and Britain are making the appropriate noises of fealty to the U.S. and the idea of economic warfare on Russia, I don't see how they can go along with the kind of Nouveau Cold War advocated by Menendez and the neocons. Europe's level of economic integration with Russia is too significant to hurtle thirty-years backward.

But in the end, I think that is the dynamic we are going to be dealing with -- the United States wants a return of the global polarity provided by the Cold War -- great powers locked in a long struggle marked not by World War III but covert warfare in the developing war -- a replay of Uncle Sam's salad days following World War II. I think this is what Obama's Asia pivot was designed to do to begin with. Some form of great power theater is demanded if only to obscure what has become obvious over the last year in Syria: our purported existential enemy, Al Qaeda, is actually an irregular force dispatched by Uncle Sam's partners in the Persian Gulf, the wealthy oil sheikhdoms. Like Hydra or A.I.M. in Marvel Comics, the Wahhabis provide a perpetual foil for our superheroes in the national security state. So the comic books keep coming . . . .

But the problem with the Nouveau Cold War is Europe. Europe cannot go along with this comic book. And in that there is hope; hope that after the vote in Crimea on Sunday and the U.S. responds by slapping economic sanctions on Russia, we will catch the first glimpse of a new multi-polar world, as Europe goes her own way.

Dreamliner's Thermal Runaway Lithium-Ion Battery Problems

If you have trouble keeping up with the wide array of stories cascading constantly in the press -- think Syrian Revolution; think bank settlement deal that ended the review of foreclosed loans -- it is a relief when one stumbles across a little gem like the one I did this morning on page B2 of Business Day in the New York Times.

Written by Hiroko Tabuchi and Christopher Drew it provides a thumbnail sketch of the grounding of the Boeing 787 Dreamliner due to a tendency of "thermal runaway" in its lithium-ion battery.

This is a story that has been big news in the Puget Sound region. The main Dreamliner production facility is in Everett. Prior to the battery combustion last month -- a fire in Boston followed by smoking in Japan and then the FAA-ordered grounding -- reports in the local press were heralding a hiring surge by Boeing.

The last six paragraphs of the story by Tabuchi and Drew bring one uptodate on a month's worth of reporting:

Ms. Hersman [National Traffic Safety Board chairwoman] said Thursday that American investigators still did not know what caused the short-circuit in the cell of the battery in the Boston jet. She also said that in certifying the lithium-ion batteries in 2007, the Federal Aviation Administration accepted test results from Boeing that seriously underestimated the risk of smoke or fire.

The 787 is the first commercial plane to use large lithium-ion batteries for major flight functions. The batteries are more volatile than conventional nickel-cadmium batteries, but they weigh less and create more power, contributing to a 20 percent gain in fuel economy over older planes.

All 50 of the 787s that have been delivered so far have been grounded since mid-January.

That has also stopped Boeing from delivering more of the planes. Two European carriers, Thomson Airways and Norwegian Air Shuttle, said Friday that Boeing had notified them that the deliveries they had expected soon would be delayed.

Boeing’s rival, Airbus, plans to use smaller — and it says safer — lithium-ion batteries in its next-generation A350 jets, which will compete with the 787. Airbus reiterated Friday that it was watching to see how the investigations of the Boeing battery turned out. 

“There is nothing that prevents us from going back to a classical battery on the A350, which we’ve been studying in parallel to the lithium battery from the beginning,” said Justin Dubon, an Airbus spokesman in Toulouse, France.

Boeing has a lot riding on the 787. It says a lot about the incompatibility of wise decision making and plutocratic capture.