Chinese Acquisition of United States Aircraft Manufacturer Facing Possible Department of State Scrutiny
On June 28, 2011, the Minnesota based small aircraft manufacturer, Cirrus, was acquired for a reported $210 million by China’s state-run Chinese Aviation Industry General Aircraft (“CAIGA”). This acquisition has raised questions concerning jurisdiction and China’s ability to gain access to potential U.S. military technology. CAIGA currently manufactures a stealth jet fighter and has come under scrutiny for previously bidding on U.S. defense contracts. Thus, a request for jurisdiction review to the Department of State was initiated just after CAIGA’s purchase of Cirrus.
Cirrus has a line of four-seat turbo prop planes, along with technology for a small jet prototype, the Vision SF50. Cirrus uses Williams International’s FJ33-4A-19 engines on the SF50. It is this engine technology that has come under scrutiny. The FJ33 uses a Full Authority Digital Engine Control (“FADEC”), which the Department of State may classify as a military item. If it does, Cirrus could lose access to its prototype due to its acquisition by a foreign-owned company. Until the decision is made, the SF50 remains with Williams International.
The Department of State’s jurisdiction review could take up to six months. A similar review last November denied a Chinese acquisition of a U.S. technology start-up worth $2 million, just one of a handful of Chinese acquisitions that were not approved. As this case progresses, please check back to this blog for future posts.
