Cravaack asks feds to block Cirrus sale pending assurancesBesides possible loss of jobs to China, U.S. Rep. Chip Cravaack said the sale to China Aviation Industry Aircraft Co. would be a national security risk.
By: Candace Renalls, Duluth News Tribune
U.S. Rep. Chip Cravaack is asking members of a federal committee to block the sale of Cirrus to a Chinese company pending assurances that sensitive technologies won’t be transferred to Chinese military uses.
Cravaack made the request in a letter sent today to Treasury Secretary Timothy Geithner, who heads a federal committee looking into the proposed sale of Cirrus Industries. Besides possible loss of jobs to China, Cravaack said the sale to China Aviation Industry Aircraft Co. would be a national security risk. It would give China access to sensitive American aircraft technology, including advanced turbo-fan engine technology that has so far eluded the Chinese, according to Cravaack.
The letter raised the ire of officials at Duluth-based Cirrus, who claimed it was filled with inaccuracies.
“They are completely wrong on the facts,” said Cirrus CEO Brent Wouters, who called Cravaack’s move a political stunt.
“I am flabbergasted by the completely wrong logic and by what his motivations are,” Wouters said this evening, noting that he had explained the facts of the sale to Cravaack a month ago.
Both Cirrus and CAIGA already had requested a review of the sale as a pre-emptive move. The Committee on Foreign Investment in the United States, led by Geithner, reviews foreign acquisitions to determine if they pose threats to national security.
Cirrus spokesman Todd Simmons said the technologies in question are already available in China and not defense concerns. The Chinese want to buy Cirrus not for the technology but to build their emerging aviation infrastructure, he said.
Cravaack, R-Minn., noted several technologies of particular concern: carbon composite materials fabrication platform, the Williams International FJ33 turbo-fan engine, the full authority digital equipment control and the solid-fuel rocket powered ballistic recovery system.
“China is relentlessly pursuing the acquisition of dual-use technologies to benefit their commercial and military aviation industries, which in the case of AVIC is virtually the same,” he wrote. “China’s proposed acquisition of Cirrus is the next step in the process.”
AVIC or Aviation Industry Corporation of China is a Chinese state-owned defense contractor and designer of the J-20 stealth fighter prototype, Cravaack noted. It controls CAIGA, whose purchase of Cirrus is expected to be finalized this summer.
Cravaack claims Cirrus has a carbon composite materials fabrication platform and other technology that could help China develop high-altitude, unmanned aerial vehicles and be applicable in cruise missiles.
“Funny part of it is, we don’t have the technology either,” Wouters said. “We don’t have carbon technology.”
Moreover, he said Cirrus technology doesn’t have military applications, because it can’t withstand the high heat required.
Noting possible technology diversion by China, Cravaack asked committee members to block the sale “until such time that we can be assured that these dual-use technologies remain within the Untied States and under United States control.”
In his letter, Cravaack also touched on the hundreds of jobs he said would be lost if the deal goes through.
But Wouters said Cirrus jobs aren’t going overseas, because the certifications and quality controls of the production system are here and too expensive to move overseas. Then, shipping the planes back to customers in the United States would add $35,000 to the cost of each plane, he said.
“It makes no sense,” he said.
Wouters said more will be lost if the Cirrus sale — which will pump money into Cirrus operations and its jet program — doesn’t happen.
“The jobs we currently have run the risk of going away entirely,” he said.
The sale was Cirrus’ best option, he said.
“We have gone all over the world looking for capital to continue running this business,” he said. “The other choices we have, have much less favorable outcomes. This allows us to invest capital in Cirrus and add jobs in Minnesota, in (Cravaack’s) district.”
As for the group that made news last week, saying they wanted to buy Cirrus to keep it American-owned, Wouters said Cirrus has never been contacted by them.