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Cirrus deal fuels protest over jobs and security

  • Article by: JIM SPENCER and KEVIN DIAZ
  • Star Tribune staff writers
  • March 25, 2011 - 9:20 PM

WASHINGTON - Rep. Chip Cravaack, R-Minn., called on the Obama administration Friday to block the pending sale of a Duluth aircraft company to a Chinese company until it can prove that the sale will not hurt national security or cost hundreds of Minnesotans their jobs.

In a letter to U.S. Treasury Secretary Timothy Geithner, Cravaack said he is "gravely concerned" about the sale of Cirrus Aircraft to China Aviation Industry General Aircraft Co., which is controlled by the state-owned Aviation Industry Corp. of China.

The Eighth District congressman said the sale could "compromise America's national security."

Geithner heads a committee that oversees foreign investment in the United States.

"Aside from the multiple national security concerns, there are hundreds of American families that would lose their livelihood if this acquisition is allowed to proceed," Cravaack told Geithner in his letter.

The charges brought a pointed response from Cirrus Chief Executive Brent Wouters: "Their facts are wrong."

Wouters disputed Cravaack's contention that the sale would cost Minnesotans jobs and said Cirrus, whose sales have been falling, must sell its business for financial reasons.

"I called the congressman privately before we announced the sale and assured him we wouldn't lose jobs [if the sale went through]," Wouters said. "The facilities that build these planes are FAA-certified. They can't move."

Cravaack, citing an online report in an aviation trade journal, said an American investment group is interested in making an offer to buy Cirrus.

Wouters also disputed that. "There is no other bidder," said Wouters, whose company had $200 million in sales last year.

Then Wouters issued a warning of his own about the loss of hundreds of Minnesota jobs: "If this transaction doesn't happen, the alternatives for jobs will be far worse in Duluth and Grand Forks," where Cirrus has facilities. "It will extend to suppliers as well."

Cravaack's security concerns surround the possible military application of a carbon composite material Cirrus uses on its aircraft, the engine it uses to run it and a small rocket that propels an emergency parachute designed to stop crashes of Cirrus aircraft in emergencies.

In his letter to Geithner, Cravaack, a former Navy pilot who serves on the House Homeland Security Committee, said the carbon composite could be adapted into the skin of high-altitude surveillance drones that gather military intelligence. He said the engines could be adapted for use in cruise missiles and surveillance drones.

Wouters said the composite is not adaptable to military use because it cannot withstand heat generated in military use. He said the engine, which is produced by a company in Detroit, not by Cirrus, is already available in China. Cirrus planned all along to divest itself of the rocket technology before the sale because the sale of such technology to a foreign country is prohibited, Wouters said.

"I can understand where Cirrus is coming from," Cravaack said, "but you also have to understand that the China Aviation Industry General Aircraft Company basically is the hand in the glove of the China state-run defense contractors. They use a lot of our technology and basically redesign it and use it for their own purposes.

"All I'm saying is we need to proceed slowly and cautiously before we allow any of our technology to go overseas," Cravaack said.

Jim Spencer • 202-408-2752 • jim.spencer@startribune.com Kevin Diaz • 202-408-2753 • kdiaz@startribune.com

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