XPost: nyc.politics, alt.politics.usa.republicans, alt.poltics.obama   
   XPost: alt.poltics.democrats   
   From: nsmontassoc@yahoo.com   
      
   On 7/13/2012 10:34 AM, Obwon wrote:   
   >   
   > US Workers Charge Treason Outsourcing US Missile Technology   
   > to China   
   >   
   > Outsourcing US Guided Missile Technology   
   > by JEFFREY ST. CLAIR   
   > 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,   
   > 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.   
   > Magnequench began its corporate life back in 1986 as a   
   > subsidiary of General Motors. Using Pentagon grants, GM had   
   > developed a new kind of permanent magnet material in the   
   > early 1980s. It began manufacturing the magnets in 1987 at   
   > the Magnequench factory in Anderson, Indiana.   
   > In 1995, Magnequench was purchased from GM by Sextant Group,   
   > an investment company headed by Archibald Cox, Jr-the son of   
   > the Watergate prosecutor. After the takeover, Cox was named   
   > CEO. What few knew at the time was that Sextant was largely   
   > a front for two Chinese companies, San Huan New Material and   
   > the China National Non-Ferrous Metals Import and Export   
   > Corporation. Both of these companies have close ties to the   
   > Chinese government. Indeed, the ties were so intimate that   
   > the heads of both companies were in-laws of the late Chinese   
   > premier Deng Xiaopeng.   
   > At the time of the takeover, Cox pledged to the workers that   
   > Magnequench was in it for the long haul, intending to invest   
   > money in the plants and committed to keeping the production   
   > line going for at least a decade.   
   > Three years later Cox shut down the Anderson plant and   
   > shipped its assembly line to China. Now Cox is presiding   
   > over the closure of Magnequench’s last factory in the US,   
   > the Valparaiso, Indiana plant that manufactures the magnets   
   > for the JDAM bomb. Most of the workers have already been   
   > fired.   
   > "Archie Cox and his company are committing a criminal act,"   
   > says Mike O’Brien, an organizer with the UAW in Indiana.   
   > "He’s a traitor to his country."   
   > It’s clear that Cox and Sextant were acting as a front for   
   > some unsavory interests. For example, only months prior to   
   > the takeover of Magnequench San Huan New Materials was cited   
   > by US International Trade Commission for patent infringement   
   > and business espionage. The company was fined $1.5 million.   
   > Foreign investment in American high-tech and defense   
   > companies is regulated by the Committee on Foreign   
   > Investments in the United States (CFIUS). It is unlikely   
   > that CFIUS would have approved San Huan’s purchase of   
   > Magnequench had it not been for the cover provided by Cox   
   > and his Sextant Group.   
   > One of Magnequench’s subsidiaries is a company called GA   
   > Powders, which manufactures the fine granules used in making   
   > the mini-magnets. GA Powders was originally a Department of   
   > Energy project created by scientists at the Idaho National   
   > Engineering and Environmental Lab. It was spun off to   
   > Magnequench in 1998, after Lockheed Martin took over the   
   > operations at INEEL.   
   > In June 2000, Magnequench uprooted the production facilities   
   > for GA Powders from Idaho Falls to a newly constructed plant   
   > in Tianjin, China. This move followed the transfer to China   
   > of high-tech computer equipment from Magnequench’s shuttered   
   > Anderson plant. According to a report in Insight magazine,   
   > these computers could be used to facilitate the enrichment   
   > of uranium for nuclear warheads.   
   > GA Powders isn’t the only business venture between a   
   > Department of Energy operation and Magnequench. According to   
   > a news letter produced by the Sandia Labs in Albuquerque,   
   > New Mexico, Sandia is working on a joint project with   
   > Magnequench involving "the development of advanced   
   > electronic controls and new magnet technology".   
   > Dr. Peter Leitner is an advisor to the Pentagon on matters   
   > involving trade in strategic materials. He says that the   
   > Chinese targeted Magnequench in order to advance their   
   > development of long-range Cruise missiles. China already   
   > holds a monopoly on the rare-earth minerals used in the   
   > manufacturing of the missile magnets. The only operating   
   > rare-earth mine is located in Batou, China.   
   > "By controlling access to the magnets and the raw materials   
   > they are composed of, US industry can be held hostage to   
   > Chinese blackmail and extortion," Leitner told Insight   
   > magazine last year. "This highly concentrated control-one   
   > country, one government-will be the sole source of something   
   > critical to the US military and industrial base."   
   > Visclosky and Senator Evan Bayh have asked the Bush   
   > administration to intervene using the Exon-Florio Amendment   
   > to the 1988 Defense Appropriation Act to pry the Chinese   
   > money out of the company and force Magnequench to keep its   
   > factories in Indiana.   
   > There’s precedent for just such a presidential move. In   
   > 1990, George H.W. Bush ordered the state-owned China   
   > National Aerospace and Export Company to divest its interest   
   > in Mamco Manufacturing of Seattle, reportedly because of   
   > concern that the Chinese firm could have use Mamco to   
   > acquire jet fighter engine technology. The directive came   
   > from Bush three months after CATIC had seized control of   
   > Mamco. When after six months the Chinese company refused to   
      
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