next on this week in defense news a look at plans to cut the pentagon civilian workforce by merry christmas and welcome to this week in defense news. i'm vago muradian. marines are withdrawing from afghanistan and shifting to a new base in the pacific. we'll get the latest on the shift toward asia. plus a look at kline's drive to improve their air force. but first, a defense spending drops, pentagon officials are struggling to balance maintenance and personnel and other cuts. while tens of thousands of soldiers and marines will lose their jobs, as many as 150,000 dod, civilians or as many as 20% of the civil service workforce are likely to follow suit. here to tell us about the cuts is steve lowessy who covers the workforce. merry christmas and welcome to the show. >> thank you, you too, vago. when we talk about spending cuts we are talking about military and his uniform and big cuts, what are the sorts of locations and jobs are going to be impacted? the civilian workforce if the defense department is likely to get a major hit. we don't know exactly what physical locations will come in, but it is going to likely be across the board. we may see roughly 150,000 jobs civilian jobs cut from the defense department through a variety of methods, but it is also certain we'll see widespread furloughs throughout the department. maybe as much as 200,000. these could be different kinds of jobs, mostly start in support jobs such as payroll, contracting, information technology, these sorts of things. but when you are talking these levels of cuts it is going to be impossible for the defense department to achieve them just through support staff. >> so, are there other sorts of career fields that will be hit? for example the intelligence community is filled with an enormous number of civilians? >> that's right and a lot oof the intelligence community falls under the dod, umbrella. we are likely to see thousands perhaps tens of thousands of intelligence annual lists, intelligence collectors. cyber security people, the people the intelligence community depend on to collect and go through and analyze these reams of data. >> how is the pentagon going to be making decisions on who stays and who goes? do they have some sort of metric or mechanism or process to say to look at the work? are they eliminating the work that needs to be performed? or eliminating people and not the work? >> well, that is going to be a problem. that is something that critics of the federal government say the government doesn't do a very good job on. small agencies have a better handle on what their needs are and what jobs they have. but big agencies, such as the it was department, it is so sprawling. sometimes they don't know what they have or what they need. so instead of the dod, figuring out here's where our fat is, they may just start skimming off the top. and a lot of really important jobs will get caught in the mix that way. >> which could have did i staszak truss implications as a lot of people with institutional knowledge get the axe. that's right. we have people in for decades really crucial to their office and his they could get caught in the mix. >> dismissing a federal soldier is never an easy job. how much is it going to cost in sort of buying folks out? reductions of force or separation incentives and what have you? >> yeah, i think it is going to be very likely the defense department resorts to buyouts. widespread buyouts to do this. buyouts, they could be up to $25,000 a pop, per person. and the army is already trying to cut 8700 people. a lot of them through buyouts, air force same way. so we are talking you know, tens of thousands of dollars per person and that is going to add up to an awful lot of money and eat into the savings they are hoping for through these workforce investments. >> because the savings are going to be stuff accrued over time but up front like a base closure, going to cost you monday any. >> exactly. the pentagon is very, very good whenever it loses people to figure out how to hire them back in the form of contractors. is there a danger that is going to happen this time around or are there going to be processes in place so that person isn't cut and shows up as a contract tore the next day? >> i think there is a very good chance whether the defense department cuts civilians, they'll turn around and bring contractors in. the unions are very, very concerned about this. that is something they are often hitting. but you know congress is good saying hey why don't you cut x amount of people, but they are not very good at pulling back on the missions and these missions, basically they can't just decide we are not going to do this, congress has said do it. either one of two things happen when they cut workforce they íñ can bring contractors in to fill that gap or things can start slide and go falling between the cracks and neither are really a very good option. federal employees have become a very, very rich target. president obama has decided to freeze pay for two years. there are republicans in congress saying hey let's freeze it for another year or three years longer. others say 20 a 10% cut across government civil service. how are civil servants responding to this? >> not very well. we are starting to see noticeable hits to their morale, in the latest surveys of the federal workforce, and we just did an analysis of retirement data for the first ten months of 2011 retirement applications were up 24% over the previous year. we are starting to see the first inkalling of wave of retirements that people have been expected. it hasn't really come until now but i think we are starting to see people say it is not worth it for me to stick it out another couple of years. i'm going retire now before they start cutting my retirement benefits. is it also affecting recruitment at all? secretary ash carter, wanted to hire the best and brightest to come in to do, for example, dod, contract and go acquisition. hard to say whether recruitment has been affected yet. that is certainly a concern. a lot of federal employee advocates say if we freeze pay cut the workforce, that is not going to entice a lot .úoiçof r smart, talented people to come to the federal workforce. we haven't seen any real signs yet of a problem with recruitment, but i wouldn't be surprised if it happens down the line? the federal government is one of the leading hirers of veterans. 27% of vrf!the 150,000 are veterans. yet on the one hand you have folks who say each military job is precious but there is a view defensivelyions aren't. is there a double standard here? >> yeah, there is definitely a big veteran population in the federal workforce. the federal government makes a special effort to give veterans preference for federal jobs and it is especially acute in the defense department. if you start hitting defensivelyions, it is inevitable that you are going to be hitting military veterans alongside that. steve, thanks very much. we'd love to have you back as we look at this important issue as time goes on. coming up, for decades china has diligently worked to build a high tech air force but hasn't always been successful despite reforms to its military aviation sector. but that's changing as beijing becomes richer and works smarter to steadily improve air comat capabilities. china is gaining ground so fast it won't be long until it will give western and russian industries a run for their money. our next guest is phil saunders, an expert on the chinese military at the national defense university and the coauthor of a new report, ," buy, build or steal, china's quest for military aviation technologies which details china's aircraft development and procurement strategies." phil, merry christmas and thanks for joining us. >> thank you. >> how have the chinese been going about trying to build their air force and how effective have they been? >> my coauthor and me talk about three main routes, buy, build or steal. if you buy you can purchase the most advanced aircraft you can get, but it leaves you dependent upon a foreign supplier. if you build it -- >> in the case with the russians where they get their aircraft from? >> russia has been the critical one and burned the chinese in the 1960s when they split with russia and they had a bunch of aircraft they couldn't get parts for. so buying is one route. the second route is to build it yourself and then you have all the indigenous technology, but you're limited to what your own aviation industry can produce, and then third is steal to try to acquire technologies covertly and incorporate it in the planes that you're building. we talk in the study about how china has done a mix of those methods, coupled with other things such as coproduction and reverse engineering to try to build a modern aviation industry. >> let's jump to the reverse engineering engineering piece of it. you know, obviously over the decades the chinese have been doing a lot of espionage but getting equipment in order to try to copy it. it said the j-20 stealth fighter was base inside part of technologies gotten from serbia after the f-117 was shot down there. now iran has downed or has possession of an american rq- 170 which most folks expect them to share with beijing. how good is the round of engineering stuff? >> in the '60s and '70s they were bad. they were notorious for saying sell us one copy of this engine or this airplane and that's all we need from you. it took them then decades to produce it and what you got at the final product wasn't necessarily as good. they've improved considerably since then. in the 1990s they started buying su-27 fighters from russia and signed a deal to coproduce them, then they gradually started figuring out how to produce more and more of the parts, and then partway through the contract they had their own indigenously designed su-27 copy and they told the russians we don't need to buy the rest of the planes we've contracted for. so it's improved considerably. >> is there -- i mean, china obviously requires data access to virtually everything that's made in china, so virtually every civilian good that intellectual property is shared with the chinese as part of a condition to be able to build it in china. do the chinese separate what is a military technology from a civilian technology or is something inokay wus and something made it -- making it into military hardware? >> there are different ways it happens. first is the overall level of technology in the chinese economy and that has gone up, that has improved the ability of their aviation industry. second there's what we call in the study a spinoff, spin-on phenomenon where western companies spun off military technology for commercial applications, chinese companies acquired it for that purpose and then spun it back on into the military sector. so there is that phenomenon as well. with respect to aviation specifically, it's a little harder to tell. certainly china has done coproduction deals and joint ventures with western aviation companies, but the best studies done have found only a limited flow of technology from the commercial to the military side directly. >> let me go to the question of the embargo and how successful it's been. after the tienam massacre, both the uranium and china posed restrictions on lethal military technologies. there was quite a bit of trade between u.s. and china and israel and china on things that could have been nonleathel, systems, radars that the americans would have always argued that was the stuff that made the leathel stuff even more effective. how important have those sales and technology measures been improving china's overall military capability? >> it did stop the systems. the u.s. had a chance to upgaid the chinese fighter and that ended after the teeon men square. some of that technology has continued including some engine technology and that's made a significant impact on the chinese aviation industry. but it has slowed them down considerably and at the same time what happened after tienam is they opened up the door to russia and started getting russian aircraft and technology and that compensate today a great teal for the loss of u.s. and european technology. >> so where does china stand right now in their overall capabilities? >> it's a stuff thing to assess, but in the study we say that we think there are about 15 to -- they're about 15 to 20 years beyond. they're now capable of building two fourth-generation fighters, an sj-10 which is from israel and the j-11 which is the chinese su-27 copy. those are very capable aircraft, fourth-generation fighters like most of what the u.s. air force or western air force flies. but, of course, technology moves on, the u.s. has the f- 22s getting the joint strike fighter, the f-35, and we come out saying that we think china is about 15 years behind the curve. they have a stealth fighter prototype which they've flown for the first time a couple months ago, yet if you look at when the f-22 -- we expect that to be deployed roughly 2020. if you look at when the f-22 came out, it was 15 years before that. so our bottom line assessment is it looks to us like the chinese are still about 15 to 20 years behind. but that's the u.s. air force of 19 -- force of 1995 which is a pretty capable force. >> they've got mass on their side as well because it is a quite substantial force because it buys a lot more in that market, obviously, than the dollar buys in our markets. the chinese were major arms exporters in the 1980s but sold low-end stuff. arms manufacturers kicked up their game. but china is coming back in on a higher level in the market with better technology. in the minute or so left, what do you think? are they going to be serious competitors against russia and the united states and western suppliers? >> i think they will be. the j-10 and j-11 are both very capable aircraft and china can sell it at a price that undercuts western manufacturers, even the russians. the critical issue, though, is the engines because china still hasn't mastered the art of making a state-of-the-art jet fighter engine, they're still using russian engines and that gives the russians anability to control china's potential exports. >> and also makes it hard for u.s. guys to control that technology because the united states is always concernd about that to go to third parties. >> yes. but that's also a concern of where china has done some deals on aircraft engines. will that up their technology level and potentially make its way to the military side? >> thanks very much, phil, we appreciate it. up next a look at the marine corp from afghanistan as they prepare to get smaller. stay tuned. we'll be right back. had in 2009 the marine corps played a key role in the surge of u.s. troops into afghanistan and since then has helped to regain control of the war-torn country from the taliban, particularly in the district where insurgents had taken charge in the wake of the successful 2001 allied invasion. now marines are going down in afghanistan, cutting their force at home and committing to station some 2100 leathernecks at the australian military base in darwin. here to tell us about the shift and efforts to shrink the core is dan le moth of marine corps times. tell us about the plan to withdraw marines from afghanistan. what is the schedule? who, what, when, where, how? >> sure the draw down has already begun t started this fall. they are expecting to be down to 18500 marines this year from from a total of? >> we were up over 20,000 at one point. next year 4000 to 6000 has been widely forecasted and there is plenty of talk now of up to 10,000 marines being withdrawn next year. which would leave the marine corps somewhere under 10,000 in afghanistan. and what are the jobs that those guys are going to be performing? >> in afghanistan? >> the remaining marines? >> remaining marines will be continuing to partner with afghan forces, training afghan forces. there will be plenty of operational commitments, especially in northern hell man left, north has plenty of violence that they are working to curtail. as the marines draw down in afghanistan there is going to be some movement to australia, when are folks going to be going there and what are they going to be doing? >> at the start it is going to be relatively small. we are expecting about 300 marines next year to deploy to darwin. robertson barracks in the northern territory, specifically is where they will be based. primarily going to be training. going to be on a rotational basis. you are going to see every six months a new group of marines come through. won't be unlike the unit deployment program currently in japan. that program has been ongoing for years. what are these guys, what should they expect when they get to darwin? it is a little bit of a tough town in some respects. >> it is a reputation of being a tough town. kind of got that small city feel, very isolated from some of the other big population centers in australia. northern territories you are already kind of getting a sense for some of the recreational activities. not that far from the out back, there will be certainly a concern among commanders about what marines are doing in their free time. >> it is the kind of town that has a list of folks to be wary of that are such heavy drinkers there are warnings put out about them, i understand? >> yes. there is significant concerns about social problems in darwin, i think again you know, it is very isolated. there is unemployment issues there. >> right. >> it will be interesting to see how the marines fit into the mix there. let me take you to the personnel cuts the marine corps is considering. each of the military services is looking at manpower as they try to make their budget cutting goals, no secret the army and marine corps are working on productions. how many marines are going to be cut as the corps tries to are are are -- hit its saving targets. >> we have a plan for 186,800 was kind of common refrain. that was let with a lot of skepticism that that would actually be the number. at this point there is an acknowledgement it will be significantly more than that. >> not a 15,000 cut, much deep officer. >> right. i would anticipate somewhere in the neighborhood of 25, or at least 20. which put them down toward 175,000 and there is rumors of it being much more than that. i think a lot of it we are going to see details on that in 2012. how is the corps going to decide who's going to stay, who's going to go? and under any particular career fields that will get hit harder than others at this point? >> we can't say with any granularity what we look at when we get to that 175,000, but they have released a relatively detailed plan for the 186,000 number they had already kind of planned to draw down to. which was through the elimination of units, not just nipping and tucking here and there? >> right. ninth marine unit which includes the walking dead, first batalion ninth marines the entire regionment will be cut. other units pieces will disappear. headquarters will be eliminated as well. we are talking entire units of some large consolidation as well. dan, thanks very much for joining us. we appreciate it. my christmas wish list for the pentagon starts with a wish for congress that lawmakers quit partisan bickering and take up their constitutional responsibility to provide for the nation's defense, eliminating the threat and start passing real defense budgetss instate stead of wasteful budgetss. i wish to make the right trade-offs between people and equipment and the courage to engage if debate over personnel management and the compensation reform and the fortitude to stick with whatever plan they come up with. for the army and its soldiers may they remain in america's consciousness long after they return. the navy and sailors, may they stay safe as fewer ships meet the again obligations. for the air force may their new tanker and bomber and joint strike fighter stay on track. amarine corps may its short take off and vertical landing version of the fighter survive in its transization from afghanistan back to its traditional role to the 9/11 force be smooth and uneventful. for all the men and women, may the year ahead be happy, healthy and peaceful and offer a measure of respite after a decade of tremendous strain and sacrifice. thanks for joining us, i'm vago muradian. you can watch online or e-mail me at vago at