On June 29, 1978, Jean A. Caffiaux of the Elec
tronic Industries Association warned a House Armed
Services subcommittee that military co-production
understanding being "secretly negotiated by the
Pentagon "may have the effect of committing US.
industry to deals that are unwise, unfair and could
require the surrender of technology to forein.com
petitors without adequate compensation or sate
thirds.

Former associates describe William Perry, then
underscoretary of Defense for reseach and en meer
m as a fervent advocate of sharing technology to
promote the "inter enerall
lulitary
equipment On Nov 1 10% for evinizde, he wrote
a memo complaining that the program lacked "full
effectiveness" because of the "inability of [foreign]
countries to gain access to technical data relating
to acquisition programs."

On March 5, 1980, a Defense Department directive
advised that Pentagon agencies "shall encourage the
transfer of technology" to allies and should "foster an
early mutual exchange of technological and other in-
formation with NATO allies to promote the develop-
ment and adoption of standardized or inter-operable
weapons systems."

"The Defense Department was put in a position of
fearing to defend critical technology," a Pentagon
source said.

One side effect of these Carter administration pol-
icies toward NATO was to encourage an aggressive
Japanese push for some of the same access that Eu-
ropeans were getting.

Perry, now with the San Francisco venture capital
investment company of Hambrecht & Quist, declined
to be interviewed for this series. The Pentagon has
denied, on national security grounds, repeated re-
quests by The Washington Post over a four-month
period to examine the Japan-U.S. F15 agreement, the
report of the Military Information Disclosure Policy
Committee that evaluated Japan's ability to keep top
technology secrets, or any other documents connected
with the deal.

Privately, however, The Post was told that a major
reason for the denial was concern that such informa
tion could embarrass the Japanese government.
which is facing domestic criticism for its planned
arms buildup.

F13 Program Caused Tension

From the beginning, the F15 program aroused sen. sitivities on both sides of the Pacific.

Soon after the June, 1978, "memorandum of un-
derstanding," Air Force specialists at the Pentagon
and Wright-Patterson Field in Dayton, Ohio, drew up
an extremely detailed list of technologies considered
too sensitive to be transferred to Japan because of
the danger to U.S. security if they fell into Soviet
hands.

Nicknamed the "negative list," it was obtained
somehow by officials at Japan's Ministry of Detense,
according to V Garber, who worked for Perry as di
rector of international programs.

Garber said the list apparently was passed to the
Japanese by someone at the Defense Security Assist-
ance Agency. In any case, he said, when he and Perry
traveled to Japan in late 1978 they were greeted with
"indignant demands" that restricted F15 technologies
be released. Japanese officials argued forcefully that
without these technologies it would be difficult for
them to make repairs, Garber said.

Garber, now at NATO headquarters in Brussels.
said in a telephone interview that it was "most un-
fortunate that the Japanese obtained the detailed
list. But once they acquired it, it was deemed neces-
sary to soothe ruffled feelings.

"I told the Air Force what the Japanese demands
were and asked them to review the list now that we
had a more unhappy situation vis a vis Japan," he
said.

Garber denies that "Perry or I overrode the Air
Force," but Air Force sources remember this as a time
of extreme pressure from Perry, Garber and the Jap-

The absence of a ceiling cleared the way for a massive flow of military technology to Japan.

Virtually every big name in US defense contract.
ing was cleared after 1977 to license designs and
manufacturing processes to Japanese companies in
connection with military co-production They includ
ed United Technologies, Honeywell, TRW, Rockwell,
Texas Instruments, Goodyear Aerospace, Litton, Te.
ledyne, General Electric, Itek. Motorola, Raytheon
and Sperry.

Although the Air Force prevailed in opposing re-
lease of such highly sensitive technologies as design
criteria for the gyroaccelerometer in the inertial nav-
igation system --adaptable, the Air Force said, to bal-
listic missiles-it failed in trying to keep some of
McDonnell Douglas's composite materials know-how
out of the hands of Mitsubishi, the F15 program's
prime contractor,

"Composite materials," a family of strong plastics
that includes Fiberglas, kevlar and carbon-graphite fi
hers, have begun to revolutionize the aircraft indus
try.

Although are ratt designers still are learning how to
exploit these materials, they soon are expected to ex-
tend the range of planes and missiles, add thousands
of hours to the flying life of jet fighter-bombers, make
possible exotic new airplane and helicopter designs,
save fuel and resist radar detection.

Although only about 3 percent of the weight of
Boeing's new jetliners is made of composites, the
company estimates that this could rise to a "mini-
mum of 65 percent by the year 2000.

Japanese companies are considered the leading
producers of these materials, but U.S. aircraft com.
panies are ahead in the critical technology: knowledge
of the properties, bonding techniques and applica-

tions.

"The materials are common to the industry," a
Boeing executive said. "It's how you use them that
makes the difference."

According to military sources, the Japanese mili-
tary was adamant about obtaining McDonnell Doug.
las designs and procedures for building the F15
speed brake out of carbon composites. The Air Force,
citing the company's "highly perishable" lead, was op-
posed. So strong was the Air Force's opposition that
it was not until early 1981, more than two years after
the F15 deal was approved, that the government fi-
nally authorized release of the technology.

Japanese executives acknowledge that this technol-
ogy has been valuable to Japan's commercial aircraft
industry. In an interview with The Wall Street Jour-
nal published last Nov. 26, Mitsubishi Heavy's chief
engineer, Akira Ikeda, said his company's F15 work
was teaching it "many things" about composites use-
ful in future airliners.

Ikeda also noted that wing-bolting techniques and
rubber fuel tanks on his company's Diamond One
business jet, now being sold in the United States,
were developed as a result of previous military co-
production projects.

Security Raised Concerns

The Air Force's concern about the security impli-
cations of the F15 deal increased in late 1978, when
Koku Journal, a Japanese aviation magazine, pub-
lished a 200-page special edition on the F15 that in-
cluded dozens of color photographs, charts and dia-
grams. The publication sparked a brief investigation
by the Air Force's Office of Special Investigations,
which concluded that the information had come from
"technical orders" furnished by McDonnell Douglas
and the Commerce Department.

The difficulty of separating military and civilian
programs is evident at Japan's main aircraft works in
Nagoya, where civilian and military programs proceed
side by side. A Nagoya-based aircraft consortium that
includes the F15 prime contractor, Mitsubishi, is at
work on a major commercial project, building fuse-
lage parts for Boeing's new 767 jetliner.

Public and private officials involved in the F15
program nevertheless question whether any unduly
sensitive technologies were in fact transferred to
Japan in the pressure of the moment.

Garber, who recalls the differences of view with the Air Force over releasing composites, says that in ret. rospect he does not believe the decision to share the know-how was "really regrettable-it wasn't the latest technology."

McDonnell Douglas spokesman Timothy J. Beecher said the company was on the sidelines for the

decision on composites.

"It was between the two governments," he said.
"But we think it's valid to ask the people who made
the decisions whether countries involved could not
have obtained those technologies elsewhere."

By the time the carbon fiber technology was re-
leased to Mitsubishi, he noted, the commercial air-
craft consortium in Nagoya was making landing gear
and wing edges for the Boeing 767 out of composites
and using procedures supplied by Boeing.

A Boeing official acknowledged that, under the
commercial program, the Japanese are using Boeing
specifications and design information for the plastic
composite kevlar but not tor carbon tibers, considered
more advanced.

"The Japanese would have loved to have had all
our fancy computer programs on how we put wings
together." said H.O. Withington, Boeing's vice pres
ident for engineering. "But we guarded that pretty
carefully. As far as giving away the store. I don't
think we've ever given anything that wasn't available
to anybody who wants to take the trouble to do it."

Impact of Co-Production Studied

Under the Reagan administration, concern about
U.S. technology losses has increased dramatically.
The impact of co-production programs is being stud-
ied by NASA, the Treasury Department, the Defense
Science Board, the president's Cabinet Council on
Commerce and Trade and the White House Office of
Science and Technology.

Some aircraft specialists suggest that the debate
over U.S. technical aid to Japan's airframe industry
may be overtaken by developments that have made
more technology sharing inevitable in the global air-
craft business. It now seems likely that a Japanese
consortium will become a full partner later in this
decade with either Boeing, McDonnell Douglas or
Europe's Airbus in building the next-generation jet-
liner, a fuel-efficient 150-seater.

Despite the massive flow of military technology to
Japan, the US government has not gained assur
ances from the Japanese government that specific
technologies will be released to U.S. defense contrac-

U.S. Sells 'Crown Jewels' of Knowledge

slow growth and costlier products, they acquisition of such crucial technologies as

U.S. 'Crown Jewels'
Exported in Codes

TECHNOLOGY, From A1

When push comes to shove, America had better keep its software capabilities," said William O. Baker, retired president of Bell Laboratories, America's largest private research facility. "Software is going to be the principal means of technology transfer in the '80s. It's our ace in the hole. Software can give competitors the ability to leapfrog us."

Software programs written for the latest generation of computer-aided design and manufacturing (CAD/CAM) systems have revolutionized the role of computers in industry, moving them from the financial and accounting departments into the front line of design, engineering and production.

With the present line of computer graphics systems, a draftsman can display his drawings in three dimensions on a television screen, reshape them in a fraction of a second, insert additional pieces from a "menu" stored in the computer's memory, measure the length of lines, turn the product to inspect it from every angle and test it for strength and durability-all before a single blueprint has been drawn on paper.

Computer companies are working on ways to link the draftsman's electronic work board with the factory floor, by having the same computer control the path of cutting tools or the movement of assembly-line robots.

"It's the highest industry, I think, because it's seminal," a computer executive said. "There isn't a Fortune 1000 company that hasn't made major commitment to this technology. There are more damn people doing designs and engineering on computers now than there are accountants cracking numbers."`

Today, engineers are cutting thousands of man hours off the time required to design or redesign airplanes, integrated circuits, nuclear weapons and toys, among other products. Boeing, for example, designed 30 percent of its 747 aircraft and 40 percent of its new 757 on computers.

Underlying new CAD/CAM systems are millions of lines of programs, often requiring teams of people working thousands of hours. Some inside the growing CAD industry are concerned that Japanese companies, skillfully exploiting stiff competition among the growing number of U.S. CAD companies, have gained threshold knowledge of this technology, as well as ready access to the tool itself.

"I am concerned about how much they're learning from us," said Wil. liam D. Beeby, who recently retired as Boeing's director of engineering computer systems.

Japanese computer-chip companies used U.S. CAD systems to design memory chips that put them ahead of their U.S. competitors in the late 1970s, and a consortium of Japanese aircraft companies is using US. CAD systems to help them become major players in the commercial airliner business.

Transfer Takes Place Gradually ́ ́

Transfer of this technology to Japan has occurred over several years. For instance:

In 1974, a Bedford, Mass., company called Computervision began distributing its Computer Automated Design Drafting System-3, or CADDS-3, through a Tokyo distributor with access to the CADDS-3 source code. CADDS-3 displayed three-dimensional pictures and was conaidered by some the most advanced system of the time.

It was subsequently purchased by dozens of Japanese companies, inelading Mitsubishi, Toyota, Nissan Motors and Sanyo. According to a Computervision executive, customers could obtain the CADDS-3 source code by signing a written pledge not to divulge it.