Wednesday, October 26, 2011

From the Mediterranean to the Hindu Kush: Rethinking the Region

Libya and Iraq: The Price of Success

By George Friedman
The territory between the Mediterranean and the Hindu Kush has been the main arena for the U.S. intervention that followed the 9/11 attacks. Obviously, the United States had been engaged in this area in previous years, but 9/11 redefined it as the prime region in which it confronted jihadists. That struggle has had many phases, and it appears to have entered a new one over the past few weeks.
Some parts of this shift were expected. STRATFOR had anticipated tensions between Iran and its neighboring countries to rise as the U.S. withdrew from Iraq and Iran became more assertive. And we expected U.S.-Pakistani relations to reach a crisis before viable negotiations with the Afghan Taliban were made possible.
From the Mediterranean to the Hindu Kush: Rethinking the Region
(Click here to enlarge image)

However, other events frankly surprised us. We had expected Hamas to respond to events in Egypt and to the Palestine National Authority’s search for legitimacy through pursuit of U.N. recognition by trying to create a massive crisis with Israel, reasoning that the creation of such a crisis would strengthen anti-government forces in Egypt, increasing the chances for creating a new regime that would end the blockade of Gaza and suspend the peace treaty with Israel. We also thought that intense rocket fire into Israel would force Fatah to support an intifada or be marginalized by Hamas. Here we were clearly wrong; Hamas moved instead to reach a deal for the exchange of captive Israel Defense Forces soldier Gilad Shalit, which has reduced Israeli-Hamas tensions.
Our error was rooted in our failure to understand how the increased Iranian-Arab tensions would limit Hamas’ room to maneuver. We also missed the fact that given the weakness of the opposition forces in Egypt — something we had written about extensively — Hamas would not see an opportunity to reshape Egyptian policies. The main forces in the region, particularly the failure of the Arab Spring in Egypt and the intensification of Iran’s rise, obviated our logic on Hamas. Shalit’s release, in exchange for more than 1,000 Palestinian prisoners, marks a new stage in Israeli-Hamas relations. Let’s consider how this is related to Iran and Pakistan.

The Iranian Game

The Iranians tested their strength in Bahrain, where Shiites rose up against their Sunni rulers with at least some degree of Iranian support. Saudi Arabia, linked by a causeway to Bahrain, perceived this as a test of its resolve, intervening with military force to suppress the demonstrators and block the Iranians. To Iran, Bahrain was simply a probe; the Saudi response did not represent a major reversal in Iranian fortunes.
The main game for Iran is in Iraq, where the U.S. withdrawal is reaching its final phase. Some troops may be left in Iraqi Kurdistan, but they will not be sufficient to shape events in Iraq. The Iranians will not be in control of Iraq, but they have sufficient allies, both in the government and in outside groups, that they will be able to block policies they oppose, either through the Iraqi political system or through disruption. They will not govern, but no one will be able to govern in direct opposition to them.
In Iraq, Iran sees an opportunity to extend its influence westward. Syria is allied with Iran, and it in turn jointly supports Hezbollah in Lebanon. The prospect of a U.S. withdrawal from Iraq opened the door to a sphere of Iranian influence running along the southern Turkish border and along the northern border of Saudi Arabia.

The Saudi View

The origins of the uprising against the regime of Syrian President Bashar al Assad are murky. It emerged during the general instability of the Arab Spring, but it took a different course. The al Assad regime did not collapse, al Assad was not replaced with another supporter of the regime, as happened in Egypt, and the opposition failed to simply disintegrate. In our view the opposition was never as powerful as the Western media portrayed it, nor was the al Assad regime as weak. It has held on far longer than others expected and shows no inclination of capitulating. For one thing, the existence of bodies such as The International Criminal Court leave al Assad nowhere to go if he stepped down, making a negotiated exit difficult. For another, al Assad does not see himself as needing to step down.
Two governments have emerged as particularly hostile to al Assad: the Saudi government and the Turkish government. The Turks attempted to negotiate a solution in Syria and were rebuffed by al Assad. It is not clear the extent to which these governments see Syria simply as an isolated problem along their border or as part of a generalized Iranian threat. But it is clear that the Saudis are extremely sensitive to the Iranian threat and see the fall of the al Assad regime as essential for limiting the Iranians.
In this context, the last thing that the Saudis want to see is conflict with Israel. A war in Gaza would have given the al Assad regime an opportunity to engage with Israel, at least through Hezbollah, and portray opponents to the regime as undermining the struggle against the Israelis. This would have allowed al Assad to solicit Iranian help against Israel and, not incidentally, to help sustain his regime.
It was not clear that Saudi support for Syrian Sunnis would be enough to force the al Assad regime to collapse, but it is clear that a war with Israel would have made it much more difficult to bring it down. Whether Hamas was inclined toward another round of fighting with Israel is unclear. What is clear is that the Saudis, seeing themselves as caught in a struggle with Iran, were not going to hand the Iranians an excuse to get more involved than they were. They reined in any appetite Hamas may have had for war.

Hamas and Egypt

Hamas also saw its hopes in Egypt dissolving. From its point of view, instability in Egypt opened the door for regime change. For an extended period of time, it seemed possible that the first phase of unrest would be followed either by elections that Islamists might win or another wave of unrest that would actually topple the regime. It became clear months ago that the opposition to the Egyptian regime was too divided to replace it. But it was last week that the power of the regime became manifest.
The Oct. 9 Coptic demonstration that turned violent and resulted in sectarian clashes with Muslims gave the government the opportunity to demonstrate its resolve and capabilities without directly engaging Islamist groups. The regime acted brutally and efficiently to crush the demonstrations and, just as important, did so with some Islamist elements that took to the streets beating Copts. The streets belonged to the military and to the Islamist mobs, fighting on the same side.
One of the things Hamas had to swallow was the fact that it was the Egyptian government that was instrumental in negotiating the prisoner exchange. Normally, Islamists would have opposed even the process of negotiation, let alone its success. But given what had happened a week before, the Islamists were content not to make an issue of the Egyptian government’s deal-making. Nor would the Saudis underwrite Egyptian unrest as they would Syrian unrest. Egypt, the largest Arab country and one that has never been on good terms with Iran, was one place where the Saudis did not want to see chaos, especially with an increasingly powerful Iran and unrest in Syria stalled.

Washington Sides with Riyadh

In the midst of all this, the United States announced the arrest of a man who allegedly was attempting, on behalf of Iran, to hire a Mexican to kill the Saudi ambassador to the United States. There was serious discussion of the significance of this alleged plot, and based on the evidence released, it was not particularly impressive.
Nevertheless — and this is the important part — the administration of U.S. President Barack Obama decided that this was an intolerable event that required more aggressive measures against Iran. The Saudis have been asking the United States for some public action against Iran both to relieve the pressure on Riyadh and to make it clear that the United States was committed to confronting Iran alongside the Saudis. There may well be more evidence in the alleged assassination plot that makes it more serious than it appeared, but what is clear is that the United States intended to use the plot to increase pressure on Iran — psychologically at least — beyond the fairly desultory approach it had been taking. The administration even threw the nuclear question back on the table, a subject on which everyone had been lackadaisical for a while.
The Saudi nightmare has been that the United States would choose to reach an understanding with Iran as a way to create a stable order in the region and guarantee the flow of oil. We have discussed this possibility in the past, pointing out that the American interest in protecting Saudi Arabia is not absolute and that the United States might choose to deal with the Iranians, neither regime being particularly attractive to the United States and history never being a guide to what Washington might do next.
The Saudis were obviously delighted with the U.S. rhetorical response to the alleged assassination plot. It not only assuaged the Saudis’ feeling of isolation but also seemed to close the door on side deals. At the same time, the United States likely was concerned with the possibility of Saudi Arabia trying to arrange its own deal with Iran before Washington made a move. With this action, the United States joined itself at the hip with the Saudis in an anti-Iranian coalition.
The Israelis had nothing to complain about either. They do not want the Syrian regime to fall, preferring the al Assad regime they know to an unknown Sunni — and potentially Islamist — regime. Saudi support for the Syrian opposition bothers the Israelis, but it’s unlikely to work. A Turkish military intervention bothers them more. But, in the end, Iran is what worries them the most, and any sign that the Obama administration is reacting negatively to the Iranians, whatever the motives (and even if there is no clear motive), makes them happy. They want a deal on Shalit, but even if the price was high, this was not the time to get the United States focused on them rather than the Iranians. The Israelis might be prepared to go further in negotiations with Hamas if the United States focuses on Iran. And Hamas will go further with Israel if the Saudis tell them to, which is a price they will happily pay for a focus on Iran.

The U.S. Withdrawal from Afghanistan

For the United States, there is another dimension to the Iran focus: Pakistan. The Pakistani view of the United States, as expressed by many prominent Pakistanis, is that the United States has lost the war against the Afghan Taliban. That means that any negotiations that take place will simply be about how the United States, in their words, will “retreat,” rather than about Pakistani guarantees for support against jihadists coupled with a U.S. withdrawal process. If the Pakistanis are right, and the United States has been defeated, then obviously, their negotiating position is correct.
For there to be any progress in talks with the Taliban and Pakistan, the United States must demonstrate that it has not been defeated. To be more precise, it must demonstrate that while it might not satisfy its conditions for victory (defined as the creation of a democratic Afghanistan), the United States is prepared to indefinitely conduct operations against jihadists, including unmanned aerial vehicle and special operations strikes in Pakistan, and that it might move into an even closer relationship with India if Pakistan resists. There can be no withdrawal unless the Pakistanis understand that there has been no overwhelming domestic political pressure on the U.S. government to withdraw. The paradox here is critical: So long as Pakistan believes the United States must withdraw, it will not provide the support needed to allow it to withdraw. In addition, withdrawal does not mean operations against jihadists nor strategic realignment with India. The United States needs to demonstrate just what risks Pakistan faces when it assumes that the U.S. failure to achieve all its goals means it has been defeated.
The Obama administration’s reaction to the alleged Iranian assassination plot is therefore a vital psychological move against Pakistan. The Pakistani narrative is that the United States is simply incapable of asserting its power in the region. The U.S. answer is that it is not only capable of asserting substantial power in Afghanistan and Pakistan but also that it is not averse to confronting Iran over an attempted assassination in the United States. How serious the plot was, who authorized it in Iran, and so on is not important. If Obama has overreacted it is an overreaction that will cause talk in Islamabad. Obviously this will have to go beyond symbolic gestures but if it does, it changes the dynamic in the region, albeit at the risk of an entanglement with Iran.

Re-evaluating the Region

There are many moving parts. We do not know exactly how far the Obama administration is prepared to take the Iran issue or whether it will evaporate. We do not know if the Assad regime will survive or what Turkey and Saudi Arabia will do about it. We do not know whether, in the end, the Egyptian regime will survive. We do not know whether the Pakistanis will understand the message being sent them.
What we do know is this: The crisis over Iran that we expected by the end of the year is here. It affects calculations from Cairo to Islamabad. It changes other equations, including the Hamas-Israeli dynamic. It is a crisis everyone expected but no one quite knows how to play. The United States does not have a roadmap, and neither do the Iranians. But this is a historic opportunity for Iran and a fundamental challenge to the Saudis. The United States has put some chips on the table, but not any big ones. But the fact that Obama did use rhetoric more intense than he usually does is significant in itself.
All of this does not give us a final answer on the dynamics of the region and their interconnections, but it does give us a platform to begin re-evaluating the regional process.

From the Mediterranean to the Hindu Kush: Rethinking the Region is republished with permission of STRATFOR."

Saturday, October 15, 2011

European Crisis: Precise Solutions in an Imprecise Reality Read more: European Crisis: Precise Solutions in an Imprecise Reality | STRATFOR

By George Friedman
An important disconnect over the discussion of the future of the European Union exists, one that divides into three parts. First, there is the question of whether the various plans put forward in Europe plausibly could result in success given the premises they are based on. Second, there is the question of whether the premises are realistic. And third, assuming they are realistic and the plans are in fact implemented, there is the question of whether they can save the European Union as it currently exists.
The plans all are financial solutions to a particular set of financial problems. But regardless of whether they are realistic in addressing the financial problem, the question of whether the financial issue really addresses the fundamental dilemma of Europe — which is political and geopolitical — remains.
STRATFOR has examined the plans for dealing with the financial crisis in Europe, and we find them technically plausible, even if they involve navigating something of a minefield. The eurozone’s bailout fund, the European Financial Stability Facility, would be expanded in scope and reach until it can handle the bailout of a major state, the default of a minor state and a banking crisis of unprecedented proportions. Given assumptions of the magnitude of the problem and assuming general compliance with the plans, there is a chance that the solution we see the Germans moving toward could work.
The extraordinary complexity of the plans being floated in Europe is important to note. It is extremely difficult for us to understand the specifics, and we suspect the politicians proposing it are also less than clear on them. We have found that the more uncertain the solution, the more complex it is. And the complexity of the European situation is less driven by the complexity of the economics than by the complexity of the politics. The problem is relatively easy: Banks and countries under massive financial pressure almost certainly will default without extensive aid. By giving them money, default can be avoided. But the political complexity of giving them money and the opposition by many Europeans on all sides to this solution contributes to the complexity. The greater the complexity, the more interests can be satisfied and — ultimately — the less understanding there is about what has been promised. Some subjects require complexity, and this is one of them. The degree of complexity in this case tells another tale.

The Foundation of the Crisis

Part of that tale is about two dubious assumptions at the foundation of the crisis. The first is the assumption that interested parties are genuinely aware of the size of the financial problems, and to the extent they are aware of it, that they are being honest about it. Ever since 2008, the singular truth of the financial community globally has been that they were either unaware of the extent of the financial problems on the whole or unaware of the realities of their own institutions. An alternative explanation is, of course, willful ignorance. This translates as the leaders being fully aware of the magnitude of the problem but understating it to buy time or to position themselves personally for better outcomes. It could also simply be a case of their being engaged in helpless hopefulness — that is, they knew there was nothing they could do but remained hopeful that someone else would find a solution. In sum, it combined incompetence, willful deception and willful delusion.
Consider the charge that the Greeks falsified financial data. While undoubtedly true, it misses the point. The job of bankers is to analyze data from loan applicants and to uncover falsehoods. The charge against the Greeks can thus be extended to bankers. How could they not have discovered the Greek deception?
There are two answers. The first is that they didn’t want to. The global system of compensation among financial institutions — from home mortgages to the purchase of government bonds — separates the transaction from the outcome. In other words, in many cases bankers are not held responsible for the outcome of the loan and are paid for the acquisition and resale of the loan alone. They are therefore not particularly aggressive in assessing the quality of a given loan. Frequently, they work with borrowers to make their debt look more attractive.
During the U.S. subprime crisis, in the mortgage crisis in Central Europe and in the sovereign debt and banking crisis in Europe, the system placed a premium on transactions, immunizing bankers from the repayment of loans. The validity of the numbers systematically were skewed toward the most favorable case.
More important, such numbers — not only of the status of loans but also about the economic and social status of the debtors — inherently are uncertain. This is crucial because part of the proposed European solution is the imposition of austerity on debtor nation states. The specifics of that austerity and its effect on the ability to repay after austerity heavily depend on the validity of available economic and social statistics.
There is an interesting belief, at least in the advanced industrial countries, that government-issued statistics reflect reality. The idea is that the people who issued these statistics are civil servants, impervious to political pressure and therefore likely providing accurate data. A host of reasons exists for looking at national statistics with a jaundiced eye beyond the risk of politicians pressuring civil servants.
For one, collecting statistics on a society is a daunting task. Even small countries have millions of people. The national statistical database is based on the assumption that all of the transactions and productions of these millions can be measured accurately, or at least measured within some knowable range of error. This is an overwhelming undertaking.
The solution is not the actual counting of transactions — an impossible task — but the creation of statistical models that make assumptions based on various methodologies. There are competing models that provide different outcomes based on sampling procedures or mathematical models. Even without pressure from politicians, civil servants and their academic mentors have personal commitments to certain models.
The center of gravity of our global statistical system, particularly those of advanced industrial countries, is that the selection of statistical models is frequently subject to complex disputes of experts who vehemently disagree with one another. This is also a point where political pressure can be applied. Given the disagreements, the decision on which methodology to use — from sampling to reporting — is subject to political decisions because the experts are divided and as contentious as all human beings are on any subject they care about.
And this is the point at which outside decisions are made, based on outcome, not on the subtleties of mathematical modeling. There is a connection between the numbers and reality, but the mathematics of a bailout rests on a statistical base of sand. It is always assumed that this is the case in the developing world. This creates a certain advantage, in that it is understood that the statistics are unreliable. By contrast, the advanced industrial countries have the hubris to believe that complex mathematics has solved the problem of knowing what hundreds of millions of people in billions of transactions actually have done.

A Culture of Opaque States

Compounding this challenge, the European Union has incorporated societies on its periphery that never have accepted the principle that states must be transparent, a problem exacerbated by EU regulations. Southern and Central Europeans always have been less impressed by the state than Germans, for example. This is not simply about paying taxes but about a broader distrust of government, something deeply embedded in history. Meanwhile, regulations from Brussels, whose tax and employment laws make entrepreneurship and small business ownership extraordinarily difficult, have forced a good deal of the economy “off the books,” aka underground.
While not an EU state, Moldova — said to be the poorest country in Europe — is an instructive example. When I visited it a year ago, the city (and villages outside the city) was filled with banks (from Societe Generale on down) and BMWs. There was clear poverty, but there also was a wealth and vibrancy not captured in intergovernmental statistics. The numbers spoke of grinding poverty; the streets spoke of a more complex reality.
What exactly is the state of the Greek, Spanish or Italian economy? That is hard to say. Official statistics that count the legal economy suffer from methodological uncertainty. Moreover, a good deal of the economy is not included in the numbers. One assessment says that 10 percent of all employees are off the books. Another says 40 percent of Greeks define themselves as self-employed. A third estimates that 40 percent of the total Greek economy is in the grey sector. When evaluating what tries to remain hidden, you’re reduced to guesswork. No one really knows, any more than anyone really knows how many illegal immigrants are participating in the U.S. economy. The difference, however, is that this knowledge is of profound importance to the entire EU bailout.
The level of indebtedness and the ownership of the debt of European banks and countries are as murky as who held asset-backed securities in the United States. Yet there is a precise plan designed to solve a problem that can’t be quantified or allocated. The complexity and precision of the plan fails to recognize the uncertainty because the governments and banks are loath to admit that they just aren’t certain. The banks have grown so big and their relationships so complex that the uncertainty principle parallels the state’s. The United States — where the same governing authority handles all fiscal, monetary and social policies — powered through such uncertainties in the 2008 financial crisis by sheer mass and speed. Europe, with dozens of (often competing) authorities, so far has found it impossible to exercise that option.
The countries that face default and austerity have no better understanding of their own internal reality than the financial institutions understand their own internal reality. Greek numbers on the consequences of austerity for government workers do not take into account that many of those workers show up to work only occasionally while working another job that is not taxed or known to the state statistical services. Thus, one has a complete split between the state and banking systems’ ability to honor debt obligations, the insistence on austerity and the social reality of the country.
Germany has always been different. Ever since the early 19th century German philosopher Georg Hegel declared the German civil service had ended history, the idea of the state as the embodiment of reason has meant something to Germans that it did not mean to others — in both a noble and a horrible sense. We are now at the noble end of the spectrum, but the idea that the state is the embodiment of reason still doesn’t capture the European reality. The Brussels bureaucracy is based on the German view that a disinterested civil servant can produce rational solutions that partisan politicians and self-interested citizens could not.
The founding concept of the European Union involves joining nations that do not share this view, and even find it bizarre, with a nation for which it is the cultural core. This has created the fundamental existential issue in the European Union.
The realization that the rational civil servants of Brussels and Berlin have failed to create systems that understand reality strikes at German self-perceptions. There is a willful urge to retain the perception that they understand what is going on. From the standpoint of Southern and Central Europe, the realization that the Germans genuinely thought that the states on the EU periphery had reached the level of precision of the German civil services (assuming Germany had in fact reached that stage), or that they even wanted to, is a shock. Their publics, which saw the European Union as a means of getting in on German prosperity without undergoing a massive social upheaval putting the state and the civil service — disciplined and rational — at the center of their society, experienced an even greater shock.
The political and geopolitical problem is simply this: Germany is unique in Europe in terms of both size and values. It tried to create a free trade zone based on German values allied with France that looked at the world in a much more complex way. The crisis we are seeing, which Germany is trying to solve with extraordinary complexity and precision, rests on a highly unstable base. First, the European banking system, like the American banking system, does not understand its status. Second, the entire mathematics of national statistics is inherently imprecise. Third, the peripheral countries of the European Union have economies that cannot be measured at all because their informal economies are massive. The fundamental principles and self-conception of Germany and Central Europe diverge massively. The elites of these countries might like to think of themselves as Europeans first — by the German definition — but the publics know they are not, and they don’t want to be.
The precision of the bailout schemes reveals the underlying misunderstanding of reality by Europe’s elites, and specifically by the Germans. To be more precise, this is willful misunderstanding. They all know that their precision rests on a foundation of uncertainty. They are buying time hoping that prosperity will return, mooting all of these problems. But the problem is that a precise solution to a vastly uncertain problem is unlikely to return Europe to its happy past. Reality — or rather the fundamental unreality of Europe — has returned.
In some sense, this is no different from the United States and China. But the United States has its Constitution and the Civil War’s consequences to hold itself together in the face of this problem, and China has the Communist Party’s security apparatus to give it a shot. Europe, by contrast, has nothing to hold it together but the promise of prosperity and the myth of the rational civil servant — the cultural and political side of the underlying geopolitical problem.

Read more: European Crisis: Precise Solutions in an Imprecise Reality | STRATFOR

European Crisis: Precise Solutions in an Imprecise Reality is republished with permission of STRATFOR."

Friday, October 14, 2011

Growing Concern Over the NYPD's Counterterrorism Methods

By Scott Stewart
In response to the 9/11 attacks, the New York Police Department (NYPD) established its own Counter-Terrorism Bureau and revamped its Intelligence Division. Since that time, its methods have gone largely unchallenged and have been generally popular with New Yorkers, who expect the department to take measures to prevent future attacks.
Preventing terrorist attacks requires a very different operational model than arresting individuals responsible for such attacks, and the NYPD has served as a leader in developing new, proactive approaches to police counterterrorism. However, it has been more than 10 years since the 9/11 attacks, and the NYPD is now facing growing concern over its counterterrorism activities. There is always an uneasy equilibrium between security and civil rights, and while the balance tilted toward security in the immediate aftermath of 9/11, it now appears to be shifting back.
This shift provides an opportunity to examine the NYPD’s activities, the pressure being brought against the department and the type of official oversight that might be imposed.

Under Pressure

Reports that the NYPD’s Intelligence Division and Counter-Terrorism Bureau engage in aggressive, proactive operations are nothing new. STRATFOR has written about them since 2004, and several books have been published on the topic. Indeed, police agencies from all over the world travel to New York to study the NYPD’s approach, which seems to have been quite effective.
Criticism of the department’s activities is nothing new, either. Civil liberties groups have expressed concern over security methods instituted after 9/11, and Leonard Levitt, who writes a column on New York police activities for the website NYPD Confidential, has long been critical of the NYPD and its commissioner, Ray Kelly. Associated Press reporters Adam Goldman and Matt Apuzzo have written a series of investigative reports that began on Aug. 24 detailing “covert” NYPD activities, such as mapping the Muslim areas of New York. This was followed by the Aug. 31 publication of what appears to be a leaked NYPD PowerPoint presentation detailing the activities of the Intelligence Division’s Demographics Unit.
In the wake of these reports, criticism of the NYPD’s program has reached a new level. Members of the New York City Council expressed concern that their constituents were being unjustly monitored. Six New York state senators asked the state attorney general to investigate the possibility of “unlawful covert surveillance operations of the Muslim community.” A group of civil rights lawyers also asked a U.S. district judge in Manhattan to force the NYPD to publicize any records of such a program and to issue a court order to prevent their destruction. In response to the AP investigation, two members of Congress, Reps. Yvette Clarke, D-N.Y., and Rush Holt, D-N.J., asked the Justice Department to investigate. The heat is on.
After an Oct. 7 hearing regarding NYPD intelligence and counterterrorism operations, New York City Council Public Safety Committee Chairman Peter Vallone said, “That portion of the police department’s work should probably be looked at by a federal monitor.”
Following Vallone’s statement, media reports cited Congressional and Obama administration officials saying they have no authority to monitor the NYPD. While Vallone claims the City Council does not have the expertise to oversee the department’s operations, and the federal government says that it lacks the jurisdiction, it is almost certain that the NYPD will eventually face some sort of new oversight mechanisms and judicial review of its counterterrorism activities.

New York City and the Terrorist Threat

While 9/11 had a profound effect on the world and on U.S. foreign policy, it had an overwhelming effect on New York City itself. New Yorkers were willing to do whatever it took to make sure such an attack did not happen again, and when Kelly was appointed police commissioner in 2002, he proclaimed this as his primary duty (his critics attributed the focus to ego and hubris). This meant revamping counterterrorism and moving to an intelligence-based model of prevention rather than one based on prosecution.
The NYPD’s Intelligence Division, which existed prior to 9/11, was known mainly for driving VIPs around New York, one of the most popular destinations for foreign dignitaries and one that becomes very busy during the U.N. General Assembly. Before 9/11, the NYPD also faced certain restrictions contained in a 1985 court order known as the Handschu guidelines, which required the department to submit “specific information” on criminal activity to a panel for approval to monitor any kind of political activity. The Intelligence Division had a very limited mandate. When David Cohen, a former CIA analyst, was brought in to run the division, he went to U.S. District Court in Manhattan to get the guidelines modified. Judge Charles Haight modified them twice in 2002 and 2003, and he could very well review them again. His previous modifications allowed the NYPD Intelligence Division to proactively monitor public activity and look for indications of terrorist or criminal activity without waiting for approval from a review panel.
The Counter-Terrorism Bureau was founded in 2002 with analytical and collection responsibilities similar to those of the Intelligence Division but involving the training, coordination and response of police units. Differences between the two units are mainly bureaucratic and they work closely together.
As the capabilities of the NYPD’s Intelligence Division and Counter-Terrorism Bureau developed, both faced the challenges of any new or revamped intelligence organization. Their officers learned the trade by taking on new monitoring responsibilities, investigating plots and analyzing intelligence from plots in other parts of the United States and abroad. One of their biggest challenges was the lack of access to information from the federal government and other police departments around the United States. The NYPD also believed that the federal government could not protect New York. The most high-profile city in the world for finance, tourism and now terrorism, among other things, decided that it had to protect itself.
The NYPD set about trying to detect plots within New York as they developed, getting information on terrorist tactics and understanding and even deterring plots developing outside the city. In addition to the challenges it also had some key advantages, including a wealth of ethnic backgrounds and language skills to draw on, the budget and drive to develop liaison channels and the agility that comes with being relatively small, which allowed it to adapt to changing threat environments. The department was creating new organizational structures with specific missions and targeted at specific threats. Unlike federal agencies, it had no local competitors, and its large municipal budget was augmented by federal funding that has yet to face cyclical security budget challenges.

Looking for Plots

STRATFOR first wrote about the NYPD’s new proactive approach to counterterrorism in 2004. The NYPD’s focus moved from waiting for an attack to happen and then allowing police and prosecutors to “make the big case” to preventing and disrupting plots long before an attack could occur. This approach often means that operatives plotting attacks are charged with much lower charges than terrorism or homicide, such as document fraud or conspiracy to acquire explosives.
The process of looking for signs of a terrorist plot is not difficult to explain conceptually, but actually preventing an attack is extremely difficult, especially when the investigative agency is trying to balance security and civil liberties. It helps when plotters expose themselves prior to their attack and ordinary citizens are mindful of suspicious behavior. Grassroots defenders, as we call them, can look for signs of pre-operational surveillance, weapons purchasing and bombmaking, and even the expressed intent to conduct an attack. Such activities are seemingly innocuous and often legal — taking photos at a tourist site, purchasing nail-polish remover, exercising the right of free speech — but sometimes these activities are carried out with the purpose of doing harm. The NYPD must figure out how to separate the innocent act from the threatening act, and this requires actionable intelligence.
It is for this reason that the NYPD’s Demographics Unit, which is now apparently called the Zone Assessment Unit, has been carrying out open observation in neighborhoods throughout New York. Understanding local dynamics, down to the block-by-block level, provides the context for any threat reporting and intelligence that the NYPD receives. Also shaping perceptions are the thousands of calls to 911 and 1-888-NYC-SAFE that come in every day, partly due to the city’s “If you see something, say something” campaign. This input, along with observations by so-called rakers (undercover police officers) allows NYPD analysts to “connect the dots” and detect plots before an attack occurs. According to the AP reports, these rakers, who go to different neighborhoods, observe and interact with residents and look for signs of criminal or terrorist activity, have been primarily targeting Muslim neighborhoods.
These undercover officers make the same observations that any citizen can make in places where there is no reasonable expectation of privacy. Indeed, law enforcement officers from the local to the federal level across the country have been doing this for a long time, looking for indicators of criminal activity in business, religious and public settings without presuming guilt.
Long before the NYPD began looking for jihadists, local police have used the same methods to look for mafia activity in Italian neighborhoods, neo-Nazis at gun shows and music concerts, Crips in black neighborhoods and MS-13 members in Latino neighborhoods. Law enforcement infiltration into white hate groups has disrupted much of this movement in the United States. Location is a factor in any counterterrorism effort because certain targeted groups tend to congregate in certain places, but placing too much emphasis on classifications of people can lead to dangerous generalizations, which is why STRATFOR often writes about looking for the “how” rather than the “who.

Understanding New Threats and Tactics

As the NYPD saw it, the department needed tactical information as soon as possible so it could change the threat posture. The department’s greatest fear was that a coordinated attack would occur on cities throughout the world and police in New York would not be ramped up in time to prevent or mitigate it. For example, an attack on transit networks in Europe at rush hour could be followed by an attack a few hours later in New York, when New Yorkers were on their way to work. This fear was almost realized with the 2004 train attacks in Madrid. Within hours of the attacks, NYPD officers were in Madrid reporting back to New York, but the NYPD claims the report they received from the FBI came 18 months later. There was likely some intelligence sharing prior to this report, but the perceived lack of federal responsiveness explains why the NYPD has embarked on its independent, proactive mission.
NYPD officers reportedly are located in 11 cities around the world, and in addition to facilitating a more rapid exchange of intelligence and insight, these overseas operatives are also charged with developing liaison relationships with other police forces. And instead of being based in the U.S. Embassy like the FBI’s legal attache, they work on the ground and in the offices of the local police. The NYPD believes this helps the department better protect New York City, and it is willing to risk the ire of and turf wars with other U.S. agencies such as the FBI, which has a broader mandate to operate abroad.

Managing Oversight and Other Challenges

The New York City Council does not have the same authority to conduct classified hearings that the U.S. Congress does when it oversees national intelligence activity. And the federal government has limited legal authority at the local level. What Public Safety Committee Chairman Vallone and federal government sources are implying is that they are not willing to take on oversight responsibilities in New York. In other words, while there are concerns about the NYPD’s activities, they are happy with the way the department is working and want to let it continue, albeit with more accountability. As oversight exists now, Kelly briefs Vallone on various NYPD operations, and even with more scrutiny from the City Council, any operations are likely be approved.
The NYPD still has to keep civil rights concerns in mind, not only because of a legal or moral responsibility but also to function successfully. As soon as the NYPD is seen as a dangerous presence in a neighborhood rather than a protective asset, it will lose access to the intelligence that is so important in preventing terrorist attacks. The department has plenty of incentive to keep its officers in line.

Threats and Dimwits

One worry is that the NYPD is overly focused on jihadists, rather than other potential threats like white supremacists, anarchists, foreign government agents or less predictable “lone wolves.”
The attack by Anders Breivik in Oslo, Norway, reminded police departments and security services worldwide that tunnel vision focused on jihadists is dangerous. If the NYPD is indeed focusing only on Muslim neighborhoods (which it probably is not), the biggest problem is that it will fail in its security mission, not that it will face prosecution for racial profiling. The department has ample incentive to think about what the next threat could be and look for new and less familiar signs of a pending attack. Simple racial profiling will not achieve that goal.
The modern history of terrorism in New York City goes back to a 1916 attack by German saboteurs on a New Jersey arms depot that damaged buildings in Manhattan. However unlikely, these are the kinds of threats that the NYPD will also need to think about as it tries to keep its citizens safe. The alleged Iranian plot to carry out an assassination in the Washington area underscores the possibility of state-organized sabotage or terrorism.
That there have been no successful terrorist attacks in New York City since 9/11 cannot simply be attributed to the NYPD. In the Faisal Shahzad case, the fact that his improvised explosive device did not work was just as important as the quick response of police officers in Times Square. Shahzad’s failure was not a result of preventive intelligence and counterterrorism work. U.S. operations in Afghanistan and other countries that have largely disrupted the al Qaeda network have also severely limited its ability to attack New York again.
The NYPD’s counterterrorism and intelligence efforts are still new and developing. As such, they are unconstrained compared to those of the larger legacy organizations at the federal level. At the same time, the department’s activities are unprecedented at the local level. As its efforts mature, the pendulum of domestic security and civil liberties will remain in motion, and the NYPD will face new scrutiny in the coming year, including judicial oversight, which is an important standard in American law enforcement. The challenge for New York is finding the correct balance between guarding the lives and protecting the rights of its people.
Give us your thoughts on this report
Read comments on other reports

"Growing Concern Over the NYPD's Counterterrorism Methods is republished with permission of STRATFOR."

Read more: Growing Concern Over the NYPD's Counterterrorism Methods | STRATFOR

Wednesday, October 5, 2011

Moments & Milestones: Trophy Mission

Honors for a risky bombing run.

  • By George C. Larson, Member, NAA
A a flight2two F-15Es (here, a Strike Eagle in Afghanistan earlier this year) saved the lives of 30 coalition troops surrounded by 100 insurgents
A 2010 flight of two F-15Es (here a Strike Eagle in Afghanistan earlier this year) saved the lives of 30 coalition troops surrounded by 100 insurgents.

  • At a National Aeronautic Association awards dinner in November, the U.S. Air Force’s Mackay Trophy for the most meritorious flight of 2010 will be presented to four officers. On the afternoon of April 6, 2010, Lieutenant Colonel Donald Cornwell led a flight of two F-15Es in support of a combined allied operation in Afghanistan. Lieutenant Colonel Dylan Wells, Captain Leigh Larkin, and Captain Nicholas Tsougas, the other participants on the mission, filled out the two aircraft’s crews, operating as Dude 01 and 02.
    The flight of two was on its way east out of Bagram Airfield in eastern Afghanistan when controllers called to change their direction: A developing troops-in-contact situation required the aircraft to fly west. A team from a joint special operations task force was encircled in the town of Bala Morghab (a known transit point for insurgents in northwest Afghanistan), and a rapid-response force coming to extract the team had been halted by an explosive device.
    In the 40 minutes he estimates it took to cross Afghanistan, Cornwell busied himself with tanker support details, reserve fuel calculations, and divert options, while Larkin, his weapons system officer, or “wizzo,” worked the radio to establish contact with ground commanders. A B-1 bomber was on station but unable to help, and a layer of thick clouds obscured the ground, ruling out helicopter support.
    Cornwell, who had flown with the F-15E’s low-altitude navigation and targeting infrared for night (LANTIRN) system and had used its terrain-following radar (TFR) during training in Alaska, used it again on this mission. With Larkin calculating a minimum safe altitude, Cornwell flew the TFR to make low, noisy passes while deploying flare countermeasures over the area of operations in a show of force. At the sound of the jets, the insurgents held their fire temporarily, then resumed, evidently figuring it was just noise.
    The insurgents were holed up in fortified fighting positions, and the F-15s were low on gas. An Air Force tanker had moved its orbit closer, so the Dude flight was able to get fuel more easily. Larkin had been hammering away on the satellite link to get clearance to drop bombs close to friendly forces. After programming the precision weapons and obtaining clearance, Cornwell and his wingman dropped their ordnance. “[Ground commanders] told us as we were checking out of the area that we had good hits on all the targets,” Cornwell recalls. The insurgents were forced to abandon the town.
    “I could not have been more excited afterwards,” Cornwell says. “I was tense. The first thing we did was call to find out if anyone [friendly] died. We didn’t find out for sure [that no friendlies had died] until the next day, when we got an e-mail from an intelligence officer who went through the town.” The night after the mission, Cornwell couldn’t sleep, so he ran off some energy on a treadmill. “You get into elevated states,” he says of the post-mission buzz.
    He’s proud of the flight that won the Mackay Trophy. “We did a good job and did it with excellent teamwork,” he says. He gave special praise to Larkin for her handling of a tough situation. Now Cornwell is retiring, but he won’t be far from the fighter world: He’ll be training F-22 pilots as a contractor.

Monday, October 3, 2011

Between Piracy and Persia

Mounting Threats to Maritime Chokepoints in the Middle East
07:52 GMT, September 23, 2011 Maritime chokepoints are among the most sensitive locations where geography, trade, and politics meet. The challenges posed by Middle Eastern chokepoints, in particular, were evident even before the massive dependence on oil of the twentieth century. These points have become increasingly volatile in recent years, and especially since the Arab uprisings began. Complications include increased regional instability and aggravation of existing threats, pre-eminently piracy, terrorism, and the challenges posed by Iran.


Though states’ interests vary and are sometimes in conflict with one another, all value unfettered shipping. In recent years, the greatest regional threat to this common interest in the Red Sea, has been Somali piracy (although not exclusively). Much has been undertaken to address this ongoing problem. International efforts and resources, including the deployment of European, American, NATO, Chinese, Indian, Iranian, and other naval forces, coordinated commercial shipping movements, dedicated tracking and communications resources, and widespread adoption of anti-piracy practices have driven the attacks away from the Bab el-Mandab Strait further east along the Yemeni coast of the Indian Ocean (towards the Straits of Hormuz) and to the south of the Horn of Africa.[1]

Tactical measures have reduced (that is, displaced) the number of pirate attacks in the Red Sea in recent years. However, the strategic problem of failing states—of which piracy is only a symptom—may be getting worse at the sea’s two ends and in the middle. Somalia’s ongoing problems could prove to be just the tip of the iceberg. Current international anti-piracy efforts mainly target the symptom (i.e. attacks on the seas) and not the fundamental causes of the phenomenon.

Yemen has been racked by sectarian and tribal violence. In the last two years, it has become the adopted home of al-Qaeda in the Arabian Peninsula (AQAP). This is similar to how the political and economic conditions in Somalia proved to be a breeding ground for both piracy and the Islamist terrorist group al-Shabaab. Recent reports suggest that AQAP has seized control of areas along the Yemeni coast. While Yemen’s instability predates the large-scale demonstrations that swept across the Arab world in early 2011, an increasingly chaotic Yemen could make the country ever more attractive as a base for Somali pirates, expanding their already thriving black market for weapons.

While instability in Yemen, or even its collapse, would not lead inevitably to increased piracy on the Red Sea, it is a distinct possibility. This potential, combined with the global importance of undisturbed shipping through the area, suggest that the stability, security, and prosperity of these states provide a distinct shared interest.

Egypt is also a concern when it comes to maritime chokepoints. While the effective management and smooth operation of the Suez Canal and the Suez-Mediterranean (SUMED) pipeline remain a clear Egyptian interest, the country at present is experiencing its greatest political challenge in over half a century. Egypt’s poverty and governance problems pale in comparison to those in Yemen and Somalia, and the country appears an unlikely source of Red Sea piracy. Yet, Egypt is struggling with a restive Bedouin population in the Sinai Peninsula. In May 2011, an Egyptian security official claimed that over 400 Bedouin, Palestinian, and foreign Arab members of al Qaeda were in the peninsula. While Egypt dedicates significant resources to securing the Suez Canal, it is possible that the canal or the SUMED pipeline could become targets for future attacks. An attack on either site could hinder global transportation. This is not just a theoretical concern. In 2009, Egyptian authorities arrested 26 people for planning to attack ships in the Suez Canal and oil pipelines.[2] The Sinai pipeline, which carries natural gas from Egypt to Israel and Jordan, and provides Israel with more than 40 percent of its natural gas supply primarily for electricity generation, has been sabotaged repeatedly in recent months.[3]


Iran’s threats to close the Straits of Hormuz to international shipping and, thereby, stop the flow of Gulf oil have increased in frequency and intensity recently. Senior Iranian officials have warned explicitly that Iran can—and will—block the Straits in response to any act of aggression. In general, these pronouncements are intended to deter the international community from increasing pressure on Iran and to raise the perceived cost of any military confrontation with it, particularly against its nuclear facilities. Former commander of the Iranian Revolutionary Guard’s naval force, Rear Admiral Morteza Saffari, warned in 2010 that U.S. warships are easy prey for the Iranian navy. Iran also threatened to respond if its ships’ cargoes are subjected to inspections (a step included in a 2010 Security Council resolution on Iran). Iran ended the “Great Prophet 6” maneuvers in July 2011 by firing several supersonic coast-to-sea missiles against moving targets near the Hormuz Straits to demonstrate that the country is capable of disrupting, if not blocking, the Straits and will not hesitate to do so.[4]

Because of America’s military superiority in the Gulf, Iran has placed a priority on acquiring and building a large number of small, fast-moving vessels (some of which are for unmanned use). It also has re-outfitted civilian vessels for military missions. As a result, in recent years there have been reports of Revolutionary Guard naval vessels skirmishing with U.S. ships. These incidents were demonstrative, rather than destructive (the U.S. ships were not actually attacked). They were intended to send a message (“naval diplomacy”) to the United States—namely that Iran sees the Straits as its strategic backyard. In recent months, there have been several near misses between Iranian and American ships because of Iran’s increased military activity. Both sides appear uncomfortable with the rising tensions in the Straits, as evidenced by occasional talk that a “hot line” should be established between the two rivals.

Recent assessments suggest that the American Fifth Fleet is capable of opening the Straits to naval traffic within a few weeks, even if Iran were willing to sacrifice all of its assets, suffer massive retaliation, and potentially lose many of its own oil facilities and export revenues.[5] Such assessments may be based on the fundamental weakness of the Iranian air force, a belief in the American ability to paralyze Iranian positions near the Straits (where Iran stations its coastal defense cruise missiles), and America’s improved ability to remove naval mines. In addition, unlike other vessels such as cargo ships, tankers are hard to sink due to their size, structure, and the fact that crude oil doesn’t burn easily.

Even in the unlikely possibility that Iran could effectively close the Straits for a long period of time, such a move would not be in Iran’s best interests. It would interfere with the import of refined oil to Iran and its export of crude oil (which accounts for some 80 percent of its income). Also, it would undoubtedly lead to a confrontation with the U.S. Navy, which has a clear operational advantage. Unlike Saudi Arabia, Iraq, and the United Arab Emirates, the majority of Iran’s oil exports pass though the waterway.[6]

Yet, even a partial blockade of the Straits with rapid, effective international action to open them, would affect the already volatile global energy market. The impact of even a limited campaign on the market would likely last a long time, beyond the event itself, because of the residual concern about supply disruptions. In order to mitigate these negative effects, three options are available:

1) Tapping into strategic petroleum reserves, half of which are in the United States. In July 2011, because of the impact of the “Arab Spring” on oil prices, there was an international decision to release a limited quantity of oil from American, as well as other reserves.[7]
2) Taking advantage of excess global oil production capacity, which is primarily concentrated in Saudi Arabia. Saudi senior officials have claimed that the Kingdom can produce an additional four million barrels of oil per day, which approximately equals Iranian production capability.
3) Using alternate shipping routes, such as the Saudi East-West and the Habshan-Fujairah pipelines, which can carry up to 5 million and 1.5 million barrels, respectively, per day.

As discussed above, because of its fundamental military weakness, Iran is incapable of blocking the Straits completely for long. Therefore any conflict would focus on disrupting freedom of movement in the Gulf in general, while attempting to avoid a comprehensive campaign that might cost it dearly—militarily, politically, and economically.[8] Within these limits, Iran will continue to take advantage of the Straits’ unique geographical conditions and global sensitivity to tremors in the world’s energy market by threatening to close the Straits. This blustery threat continues to serve the regime well even if it appears contrary to its own basic interests.

That said, any confrontation might develop into a more widespread campaign, where both sides lose the ability to limit its scope in time and space. For example, Iranian harassment actions and U.S.-led counter-actions could precede an attack on the western shore of the Gulf, where there is strategic infrastructure, including ports, refineries, and desalination plants. This possibility undoubtedly would give pause to anyone considering a muscular response to Iran’s threats.

The Hormuz Straits are not the only point of maritime friction with Iran. The Red Sea is becoming an increasingly important Iranian-Israeli arena. Iran reportedly transports and even manufactures weapons in the Sudan to supply terrorist groups in Africa and the Middle East. According to U.S. sources, Israel, in turn, has dispatched its air force to attack Iranian weapons convoys headed for Hamas-controlled Gaza.[9] Israel is increasingly concerned that Iran has invested significant efforts in developing its relationships with several East African countries, including Kenya, Eritrea, Somalia, Djibouti, Tanzania, and the Comoro Islands. For Israel, this is reminiscent of Gamal Abdel Nasser’s initiatives in the 1960s that were intended to provide Egypt with greater ability to block Israeli shipping along the length of the Red Sea. In addition, as part of Iran’s high profile, regional muscle flexing, in 2011, it dispatched ships to the Mediterranean Sea through the Suez Canal, and reportedly for the first time, sent submarines to the Red Sea.

The Iranian threat also has implications for the Black Sea region and the Turkish Straits. Already in 2007, there were reports that the United States might use air force bases in Bulgaria and on Romania’s Black Sea coast to launch an attack on Iran.[10] Recently, Russia complained about the presence of a U.S. Aegis cruiser with antimissile technology in the Black Sea as part of a joint U.S.-Ukrainian naval exercise.[11] The perceived need for deploying such technology on the European continent is an indication, in part, of the growing fear in the West of Iranian intentions because of the increased range of Iranian missiles.


Piracy, terrorism, and the growing threat from Iran are problems that the international community is trying to tackle collectively. These problems are not necessarily distinct, as Iran is trying to increase its influence in states with weakening governmental control such as Yemen, partly as result of the “Arab Spring.” Iran is also taking advantage of growing piracy to justify its increasing naval presence in the Red Sea vicinity. These Iranian efforts to project power have turned the waters around the Horn of Africa into another area of maritime friction. The result is that other navies operating in the area are now combating both piracy and Iranian weapon smuggling and muscle flexing.

By Yoel Guzansky, Jonathan Schachter and Gallia Lindenstrauss
For Foreign Policy Research Institute (FPRI) (Originally published at

Yoel Guzansky, Dr. Jonathan Schachter and Dr. Gallia Lindenstrauss are research associates at the Institute for National Security Studies (INSS), Tel Aviv University. For a more detailed version of this issue, see “Power, Pirates, and Petroleum: Maritime Choke Points in the Middle East,” published in the July 2011 issue of the INSS Strategic Assessment

[1] The move eastward also reflects pirates’ ability to adapt and extend the distances at which they can operate. See Lauren Ploch et al, Piracy off the Horn of Africa (Washington, DC: Congressional Research Service, 2011), p. 1.
[2] Alaa Shahine and Alaric Nightingale, “Suez Canal Ships, Pipelines Were Plotters’ Targets,” Bloomberg, July 9, 2009,
[3] Karl Vick, “The Sinai Gas Blast: Another Reason for Israeli Anxiety over Egypt,” Time, February 7, 2011,,8599,2046573,00.html
[4] “Iran to test-fire new Supersonic Missiles,” PressTV July 4, 2011,; See also “Iran Tests Hitting Mobile Naval Targets with Hi-Tech Missile,” Fars News, July 6, 2011.
[5] Anthony Cordesman, Iran, Oil and the Strait of Hormuz (Center for Strategic and International Studies, Washington, D.C., March 2007), p. 6, .
[6] Gawdat Bahgat, “Persian Gulf Security at the Turn of the Century: Opportunities and Challenges,” Defense Analysis 15, no. 1 (1999), p. 82.
[7] Dan Strumpf, “Oil Futures: Oil Plunges as IEA Plans to Tap Strategic Reserves,” Wall Street Journal, June 23, 2011,
[8] Yoel Guzansky, “The Straits of Hormuz: Strategic Importance in Volatile Times,” INSS Insight No. 204, September 3, 2010,
[9] Luis Martinez, “Exclusive: Three Israeli Airstrikes against Sudan,” ABC News, March 27, 2009,
[10] Rick Rozoff, “Black Sea Crisis Deepens as US-NATO Threat to Iran Grows,” Global Research, September 16, 2009,
[11] “Russia Decries U.S. Antimissile Ship’s Presence,” Global Security Network, June 13, 2011,

The automobile at 125: from humble birth to global dominance

The car has been down a long and occasionally rocky road. What began 125 years ago in Germany as a humble vehicle with a top speed of 18 km/h has evolved into today's high-performance autos tearing down the autobahn.

The history of the modern automobile began on Jan. 29, 1886 when engineer Carl Benz registered a patent in the city of Mannheim for his motorcar.
It was a vehicle with three wheels – called a "tricycle" on the patent application – equipped with an internal-combustion engine. The machine could generate 0.8 horsepower (0.6 kilowatts), was started with a crank and had a top speed of 18 km/h (11.2 mph)
Another car, created separately not long afterwards by gun maker Gottfried Daimler in Stuttgart, couldn't quite reach that kind of speed. His vehicle only got up to 16 km/h (10 mph), but it did have four wheels, resembling a modified horse-drawn cab. Daimler worked with engine builder Wilhelm Maybach – a legendary partnership that still exists today.
The Otto and Diesel motors
German design engineer Nikolaus August Otto patented his motor, which now carries his name, in 1876. Rudolf Diesel registered his own version of the internal-combustion engine, which stood out for its high efficiency, in 1892.
In one of history's little ironies, the first speed records were actually set with electric cars. In 1901, one vehicle exceeded 100 km/h (62 mph).
The gasoline-powered engine was not yet the standard, and around the turn of the century, different types of drives were still competing with one another. Manufacturing data from American producers in 1900 shows that 75 makers assembled a total of 4,192 automobiles during that year, including 1,688 steam-driven vehicles and 1,575 electric cars. Only 929 of the cars made had gasoline engines.
It took about another two decades for gasoline engines to establish themselves. But they eventually took the top spot thanks to their higher speeds, better motors, cheap fuel, and the much greater distances they could cover, especially compared to electric motors with their weak batteries.
Ford's assembly line
Many pioneers were developing their own motor-driven cars in these early days and the first car factories were built around 1890 in Europe and the US. For years, cars were only within reach of the wealthy, but Henry Ford soon changed that. His Ford Motor Company, based in Detroit, Michigan, focused on vehicles that even the "normal man" could afford.
Ford's much-loved Model T had been on the market since 1908, but when the carmaker switched over to assembly line production instead of individual hand crafting, it marked the start of a new age for the automobile.
Everyone who worked at Ford, the company's founder thought, should be able to afford one of its cars. Wages in his plants were appreciably higher than in other sectors and due to the economic success of his model, he was able to shorten the working week.
According to his philosophy, his employees should have enough leisure time to enjoy life and enough money to buy his cars. With this outlook, incidentally, Ford set the foundation of our modern consumer society.
The Model T was produced using the same design until 1927. All in all, 15 million "Tin Lizzies" rolled off the line, a production record which held for the next 45 years.
Daimler and Benz
Back in Germany two firms, Daimler and Benz, merged forces in 1926, although their founders played no role in the decision. Founder Gottfried Daimler had died in 1900, and internal disputes had convinced Carl Benz to leave the company he founded. In fact, Daimler and Benz never actually met one another.
All the cars which were built by the new Daimler-Benz company were called "Mercedes," a name for which the Daimler Motor Company took out legal protection in 1901. The now-famous brand can be traced back to Emil Jellinek, one of the company's important business partners whose daughter was named Mercedes.
The distinctive Daimler-Benz symbol resulted from a combination of the Mercedes star and the laurel wreath used by Benz. Today, this brand's cars are expensive purchases, and even back then, only a fairly exclusive clientele could afford them. That was the case with any of the other 90 carmakers who were in business in Germany after World War I.
Porsche and VW
But Austrian design engineer Ferdinand Porsche wanted to change all that. The talented tinkerer, who was employed by several car firms in the early part of his career, had already built the world's first autos featuring all-wheel and even hybrid drives. These were innovations that were soon abandoned due to their high cost.
When Porsche decided to go out on his own, he had already been head of construction and a member of the board at Daimler.
Shortly after he founded the Dr. Ing. h.c.F. Porsche GmbH company in Stuttgart in 1930, plans for a car that would be within reach of the masses got underway.
In 1934, Porsche signed a contract with the German government that stipulated the construction of a "people's car," or Volkswagen.  A prototype was eventually built and its final form decided upon in 1937.
One year later, a new town was founded in northern Germany for the car's production. It originally had the rather unwieldy name of "City of the KdF-car at Fallersleben." (KdF, the German initials for "strength through joy," was a Nazi leisure-time organization and a state tool to promote the advantages of National Socialism to the German population.") Today, the town is called Wolfsburg. 
Workers who were to build the Volkswagen lived in the town, right next to the new factory. In 1940, after the outbreak of World War II, armament production began there.
Although the factory buildings were largely destroyed during the war, car production got underway again just a few weeks after the war ended. Four years later, Volkswagen car number 50,000 rolled off the assembly line.
The 'Beetle'
The four-meter-long car with the memorable chassis and an air-cooled, four-cylinder engine under the hood was soon christened the "Beetle" by an enthusiastic public (later, the name became official). In the 50s, it developed into a symbol of Germany's post-war "economic miracle." On August 5, 1955, the millionth Beetle came off the assembly line to much jubilation.
In 1972, the 15 million mark was reached and Beetle production knocked Ford's Model T out of its first-place position. On July 30, 2003, the last Beetle was produced in Mexico, where production had been moved more than 30 years previously. The last of the 21,529,464 Beetles built is on display in Wolfsburg.
Globalization and concentration
Since its early days the auto industry has had a global outlook regarding mass production. Germany has always seemed like a lucrative market for American executives.
At the end of the 1920s, seven American auto concerns had a presence in Germany. Henry Ford founded a German subsidiary back in 1925 in Berlin. That factory was closed in 1931 and production moved to Cologne, where it still is today.
Family-owned enterprise Opel was Germany's biggest auto manufacturer at the end of the 1920s. Under pressure from the growing global economic crisis of the time, the descendents of Adam Opel turned the firm into a publicly held company.
General Motors acquired a majority stake in Opel, and in 1931 it fully took over the concern. However, a German management team was put in place, the name Opel kept, and its own model line continued.
The big five
While they don't exactly fit the criteria, Ford-Germany and GM subsidiary Opel are among the few remaining German car manufacturers.
Of the several dozen carmakers in business after both World Wars, only three have survived as independent companies: Volkswagen with its subsidiaries Audi and, recently, Porsche; Daimler with its renowned Mercedes brand; and BMW.
On the list of the globe's biggest car manufacturers, VW comes in third place behind Toyota and General Motors. Daimler and BMW make it into the top 15 according to sales.
"The global demand for automobiles will not surpass one million – if for nothing else due to a lack of chauffeurs," was a prediction ascribed to car pioneer Gottfried Daimler. Despite his accomplishments, on this question he couldn't have been more mistaken.
In 2010, around 60 million new cars were sold worldwide. In 2011, around 67 million in sales are expected. The total number of cars around the world is estimated at someone around one billion.
Author: Klaus Ulrich (jam)
Editor: Kristin Zeier

Article from