Tuesday, January 3, 2012

Congress Challenges GE-China Aviation Deal

Defense News


Congress Challenges GE-China Aviation Deal


TAIPEI - Members of the U.S. Congress are calling on Defense Secretary Leon Panetta to conduct a National Security Review and a Committee on Foreign Investment in the United States review of a new joint venture between General Electric (GE) and the Aviation Industry Corporation of China (AVIC).

AN OFFICE FOR China's People's Liberation Army is seen next to an office for General Electric in Zhuhai, China. The U.S. Congress is calling for the Pentagon to review a new joint venture between GE and the Aviation Industry Corporation of China. (Wendell Minnick / Staff)

Two letters sent to Panetta - from Rep. Randy Forbes, R-Va., and Rep. Frank Wolf, R-Va. - criticize the GE deal with AVIC by questioning the formation of an enterprise to develop integrated modular avionics (IMA) hardware and software for China.

"This IMA technology was developed originally for the ... F-22 and F-35 fifth-generation fighter program," Forbes wrote in the Oct. 17 letter.

Forbes said he is concerned the technology could end up in China's new stealth fighter, the J-20, under production by AVIC.

Wolf responded with a Nov. 14 letter strongly supporting Forbes' call for a review and questioning whether GE could protect secrets from an aggressive Chinese espionage effort.
"Given the breadth and scope of this espionage, GE's assertions that they will be able to fully protect sensitive technology lacks credibility," he wrote. "Should the GE-AVIC joint venture proceed, there is no question that all the sensitive technology involved will be completely compromised by the PLA [China's People's Liberation Army]."

Forbes and Wolf are not the only ones raising concerns over the GE-AVIC deal. A new report to be released this week by the U.S.-China Economic and Security Review Commission notes that the joint venture will result in the transfer of ownership of GE's existing civilian avionics operations to China, and be "the single route-to-market for integrated avionics systems for both GE and AVIC."

GE defends the agreement.

"We have been extremely transparent and responsive in briefing all relevant and interested regulatory agencies, including the Department of Defense - the outcome has no current direct military application," said Rick Kennedy, GE media relations manager.

GE insists that IMA technology was not developed for the F-22 and F-35, "or any other fighter jet program," Kennedy said; Forbes and Wolf are "misinformed" on the issue.

"If you look into the avionics on the F-22 and F-35, you will find off-the-shelf commercial avionics technology," he said.

GE was notified Oct. 4 that the Department of Commerce and the Pentagon "determined the IMA technology does not require a license to export to China." The IMA technology being offered to China has no current direct military application.

"Significant measures are in place to safeguard against any unauthorized transfer of intellectual property," Kennedy said.

GE's product offering for the joint venture, the civil IMA system, "contains functionality tailored only for commercial applications," he said. No synthetic avionics will be transferred to the joint venture, and no U.S. government-funded capabilities or technology will be part of the joint venture, Kennedy said.

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