Outsourcing US Missile Technology to China

[tulip]

I read this at Counterpunch today and it really tiked me off. How can we allow this kind of thing to happen? How can Republicans declare they have the upper hand on National Security but then allow this to happen. Aside from Hoosiers losing their jobs...........again!

http://www.counterpunch.org/stclair04072006.html

Magnequench is an Indianapolis-based company. It specializes in the obscure field of sintered magnetics. Essentially, it makes tiny, high-tech magnets from rare-earth minerals ground down into a fine powder. The magnets are highly prized by electronics and aviation companies. But Magnequench's biggest client has been the Pentagon.

The neodymium-iron-boron magnets made by Magnequench are a crucial component in the guidance system of cruise missiles and the Joint Direct Attack Munition or JDAM bomb, which is made by Boeing and had a starring role in the spring bombing of Baghdad. Indeed, Magnequench enjoys a near monopoly on this market niche, supplying 85 percent of the rare-earth magnets that are used in the servo motors of these guided missiles and bombs.

But the Pentagon may soon be sending its orders for these parts to China, instead of Indiana. On September 15, 2004 Magnequench shuttered its last plant in Indiana, fired its 450 workers and began shipping its machine tools to a new plant in China. "We're handing over to the Chinese both our defense technology and our jobs in the midst of a deep recession," says Rep. Peter Visclosky, a Democrat from northern Indiana.

It gets stranger. Magnequench is not only moving its defense plants to China, it's actually owned by Chinese companies with close ties to the Chinese government.

[salin]

1. Visclosky concisel hits both concerns in the heart.

I would add another - given what is known about rampant overpayments/fraudulent charges by large contractors (just think Halliburton in Iraq as an example) - it is as if the pentagon is pulling a walmart on this Indiana company (move the plant to lower the price or we won't order from you) in order to have the excess $ to pay crony contractors like halliburton.

[AwakeAtLast]

2. I'm nominating this

This is outrageous!

Please consider cross posting this in GD if you haven't already.

Magnequench used to have a plant in Anderson, too. It has been gone about 4 or 5 years, I think.
I knew then it was owned by a Chinese company and thought it was strange then.

:hi:

[tulip]

3. WorldNet Daily has..........

an extensive and very thourough article in the news today on this issue. I am just posting a few snipets but please read this article it's very important that we get the word out on this.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=34037

Citing national-security concerns, two Democratic lawmakers are engaged in a last-ditch effort to halt plans for the transfer of an Indiana factory that produces critical technology used in the guidance systems of U.S. "smart bombs" to the People's Republic of China.

The Department of Defense denies any impropriety, but some observers are asking: Is it a case of politics as usual, or a cover-up?

"We deserve answers not only about the economic impact of this move, but also about the potential threat to national security that it creates," Bayh said.

The two lawmakers reportedly received no response from letters sent to President Bush on March 6 and May 1.

Two letters sent to Treasury Secretary John Snow (on May 20 and June 5) received a response turning down a request from the congressman for a meeting. Several phone calls also have received no response.

Rep. Pete Visclosky, D-Ind.

Visclosky sent a letter July 31 to the U.S. House of Representatives Armed Services Committee, requesting the committee review the contracts Magnequench currently holds with the U.S. Department of Defense.

EDIT: COPYRIGHT--PLEASE POST ONLY FOUR OR FIVE
PARAGRAPHS FROM THE COPYRIGHTED NEWS SOURCE
PER DU RULES.

[Sadie5]

4. Has Mitch the Bitch commented on this?

Probably hiding someplace so he won't have to comment.

[tulip]

5. I''l try to find out.

I'm sure he is aware.

[tulip]

6. An older article...........

http://www.papillonsartpalace.com/hodw.htm

Just a couple more tidbits.......

How Beijing Gets U.S. Defense Plants

"Though blocked by secrecy rules from going public, government officials expressed alarm about allowing the Chinese government access to strategic technology now being used to produce critical neodymium-iron-boron magnets for servos used in U.S. guided missiles and smart bombs. An even more critical technology, according to experts, was exported to the PRC in 1999 by Magnequench. That transfer included high-tech equipment used to enrich uranium for nuclear weapons, raising additional concern because of China's record of proliferating nuclear technology to rogue nations."

A 1999 congressional report on PRC espionage directed at commercial and military technology from the United States says that the Chinese "State Science and Technology Commission," the agency where Deng Nan, wife of Magnequench Chairman Zhang Hong, serves as vice minister, is responsible for "importing technologies for military use." The report, known as the "Cox Committee Report" for the select committee's chairman, Rep. Chris Cox (R-Calif.), states: "In 1986, 'Paramount Leader' Deng Xiaoping adopted a major initiative, the so-called 863 Program, to accelerate the acquisition and development of science and technology." According to the congressional report, "The PRC claims that the 863 Program produced nearly 1,500 research achievements by 1996 and was supported by nearly 30,000 scientific and technical personnel who worked to advance the PRC's economy and ... national-defense construction."

The report lists "exotic materials" such as "rare-earth metals" as technology being sought to enhance the PRC's military capabilities. It says China was using "joint ventures" with U.S. businesses as a way of obtaining "dual-use technology" that has both industrial and military applications -- such as that it obtained with Magnequench. "The PRC is also working to translate foreign technical data, analyze it and assimilate it for PLA military programs," says the report.

The sons and daughters of Chinese leaders are considered to be the next layer of leadership in the PRC.

In short, the U.S. government had two opportunities to stop the leakage of this technology to the PRC. First, in 1995, when the two PRC companies attempted to acquire Magnequench, the sale required approval from the Committee on Foreign Investments in the U.S. (CFIUS). Concerns raised by American officials about what they considered a clear case of the PRC attempting to obtain control of vital U.S. weapons technology was shot down, and CFIUS permitted the buyout. The second opportunity came in 1999 when company officials say they sought U.S.-government approval to export equipment from the Magnequench plant in Anderson, Ind., that could enhance China's ability to enrich uranium for a nuclear weapon. Stronger opposition to the transfer within government ranks again was stymied, and the high-tech computerized machine tools were moved to the company's new plant in mainland China.