The National Interest versus Corporate Interest

TradeAlert.org ^ | 13 Nov 2003 | William R. Hawkins

[AreaMan]

The National Interest versus Corporate Interest

By William R. Hawkins

Thursday, November 13, 2003

On November 7, the U.S. House of Representatives passed the conference report on the 2004 Defense Authorization bill (H.R. 1588) with a much weakened version of its "buy American" program. Under the original proposal as crafted by House Armed Services Committee Chairman Duncan Hunter (R-CA), all critical components in a weapon system would have had to be American-made and the overall system had to be 65 percent American. Those two requirements were eliminated under intense pressure from the Bush Administration, whose commitment to the recovery of American manufacturing has now been clearly shown to be phony.

The defense bill still calls for the Pentagon to produce a study assessing how much the United States depends on foreign suppliers and to provide incentives to encourage contractors to use American machine tools, the building blocks of all manufacturing. The current 50 percent American-made requirement for weapons was retained. Under the approved provisions, the Pentagon would have to create a Defense Industrial Base Capabilities Fund to ensure that the domestic industrial base can manufacture all critical military components. The Pentagon also would have to stop buying from any countries that have refused to deliver military supplies because they objected to U.S. military operations.

Rep. Hunter should be commended for moving the issue forward, even if only a small distance. The Pentagon study on foreign suppliers will have to be closely watched as neither the DoD bureaucrats nor the prime defense contractors want the facts known about how far “globalization” has already gone to weaken the domestic integrity of the nation’s defense industrial base. The battle over the defense bill this year was conducted mainly behind closed doors, the arena in which big business is most comfortable. Corporate managers are well aware that if the public knew how they were conducting their business, without the faintest regard for the prosperity or security of the United States, the political backlash would be unrestrainable.

Boeing, the largest defense contractor in the United States, led the fight against the Hunter initiatives. One motive is a desire to integrate its commercial and military supply-chain on a global basis. Shortly after the weakened defense bill passed the House, it became known that Boeing plans to hold a conference in Beijing next week with its Asian suppliers (mostly Chinese) to discuss the design and construction of its new 7E7 jet. The 7E7 is to be a super-efficient, long-range aircraft pushing the edge in aviation technology. The plane is scheduled to debut in 2008.

Boeing China president David Wang was quoted in China Daily as saying that Boeing wants more Chinese participation in the program because it sees Beijing as a strategically important part of its globalization strategy. Boeing has forecast that China will need nearly 2,400 new airliners, worth $197 billion, over the next two decades. To capture this market, “Boeing should become more Chinese in China,” said Wang, “Twenty years from now, China will view Boeing as a global China brand, not just a global brand....We must be more Chinese in our leadership, in content...have more designs, capability coming from China in the long term.”

Thus Boeing in America lobbies for more foreign content in its U.S.-produced aircraft, even those it builds for the military, but Boeing in China is committed to more Chinese content in the planes it builds there. It would seem Wang is correct, Boeing is well on its way to being more of a good corporate citizen of China than of the United States.

Boeing is also negotiating with Chinese partners to establish a $100 million repair, modification and maintenance joint venture in Shanghai. Both the production and maintenance of advanced aircraft in China involves a substantial transfer of technology and the skills needed to it into top-line equipment; knowledge that is easily translated from commercial to military industry. The problem with high-tech outsourcing is not just that the United States will become dependent on the supply of critical components than could be cut off in a crisis, thus crippling the American armed forces; but that the transfer of the information needed to produce the critical components will help arm a future enemy and increase the risk of war.

For example, the White House has agreed to allow Boeing to transfer two 737-800 aircraft to China that contain the QRS11 computer chip in their navigation systems. The chip has the potential to be used for military applications, such as in missile guidance systems. The chip is on the restricted Munitions List and should require an export license, but the State Department has given Boeing a pass. The House International Relations Committee has raised questions about this transaction, but will likely have no more success is constraining Boeing than did the House Armed Services committee.

Boeing CEO Phil Condit is also the head of the Business Roundtable (BRT). The BRT spearheaded the campaign to win most favored nation trading status for China. As part of its lobbying effort, the group published a booklet on “Corporate Responsibility in China.” The report was filled with examples of how BRT members were helping to build China's industrial base, endowing it with advanced technology and more productive methods. For example, “Rockwell has established industrial automation training laboratories in 10 of China's better universities” and “was the first foreign company to install an in-house automation technology training lab in a Chinese state-owned enterprise.” Honeywell Aerospace proclaimed its “unprecedented” agreement with Aviation Industries of China (AVIC) which manufactured both military and civil aircraft, missiles, engines, advanced materials and other items. Honeywell boasted how it provides extensive training for AVIC's “best engineers” including bringing them to U.S. plants to learn about American technology firsthand.

It seems that Boeing and other transnational corporations are running their own foreign policies, for their own purposes, while the Bush Administration looks the other way. When Congress comes back from its holiday recess, it must take another, stronger crack at these rogue corporations, who are so eager to please foreign governments and shed their American allegiances that they can no longer be trusted. Indeed, it is now best to assume from the start that corporate and national interests are no longer in concert.

-------------------------------------------------------------------------------- (c)Copyright 2001-2002 TradeAlert.org, USBICEF

[AreaMan]

I suppose Boeing is doing what they think they have to do in order to survive.

I wonder if Airbus would abandon its manufacturing in Europe to build facilities in China?

[farmfriend]

This really bothers me. And we are doing this with our food as well, not just weapons parts.

[Dominic Harr]

Bottom line, to me:

A 'corporation' has become a 'collective' person. Collectively-owned, collectively-managed. The 'individuals' running the collective at any given moment are insulated from almost any external accountability.

It's such a national problem that 'Dilbert' has made a pretty good living off of the 'PHB' syndrome.

All our corporate problems are problems associated with colletives. Inefficiency. Waste. Corruption. Management that is completely devoid of any experience or talent in the business they're actually in. A 'hierarchy' of management

Consider the Erin Brockovitch story. A 'corporation' takes decisions that kill people. The punishment is for the corp to pay out money, most of which went to the lawyers. Look at Enron, for god's sake.

We've actually created a set of laws that make the favored business organization a 'collective'.

It's literally not safe to be an old-fashioned 'sole-proprietor' entrepeneur in America.

Are we still a 'capitalist' country if we're dominated by collectives?

[EagleMamaMT]

Read later.

[Looking for Diogenes]

For example, the White House has agreed to allow Boeing to transfer two 737-800 aircraft to China that contain the QRS11 computer chip in their navigation systems. The chip has the potential to be used for military applications, such as in missile guidance systems. The chip is on the restricted Munitions List and should require an export license, but the State Department has given Boeing a pass.

Boeing does it again. We justifiably take Clinton to task for sharing missile technology with China, but of course it wasn't Clinton himself who shared the technology; it was Boeing. Now the current administration is doing the same thing as the last one did - allowing Boeing to export criticial technologies which could be used in weapons. I guess it's business as usual.

[GOP_1900AD]

A more doctrinaire interpretation of Adam Smith and Edmund Burke would help light the way to correcting this. Never in their wildest dreams did either man envisage today's lack of true accountibility. Chartered corporations may be one step toward regaining sanity - the current one size fits all incorporation process has sunken to the lowest common denominator (small businesses) and in the process opened the door to the collectivism you mentioned that we see with the big boys. The big boys can get away with murder because of the rules made for the little guy (e.g. made to encourage small business by protecting founders' personal assets). Once a corporation reaches a few hundred people or 10s of Millions in revenue it should be subject to much harsher scrutiny and the officers should be held accountable personally for decisions in all cases.

[GOP_1900AD]

In a hallway conversation, the CEO of a certain Fortune 500 company was heard to utter, about one month ago, that even the tepid measures put in place after 9/11 to protect our borders, prevent dual use technology from falling into evil anti Western hands, and, chastize the PRC for proliferation, were, in his own words, "a knee jerk reaction." This individual while of Libertarian bent is a long time GOP contributor. I have a photo of him embracing W during the 2000 campaign. This demonstrates the nature of the beast, one hand contributes, while the other hand make back stabbing moves in cases where the government seeks to reign in the worst cases of national security corrosion. Knee jerk reaction? Please... the current measures are half measures at best! What will this guy and others like him say and do if we end up in a war with another great power, or even an Axis of smaller powers? This needs to be investigated by the DIA, FBI, Homeland Security and any one else who contributes to national security strategy for all of its implications.

[GOP_1900AD]

And I might add "Belmont Mark helped train ChiCOM engineers in advanced design for assembly, design for robustness and quality planning methods which will now allow them to serial product WMDs and their control systems." Boy am I kicking myself now! Yeah, I used to be on that same bandwagon as the Business Roundtable crowd. Deluded they are with utopian visions as expounded by Thomas L. Friedman's "The Lexus and the Olive Tree." These people honestly believe that convergence, on Western terms, is inevitable. They believe that when we passed the supposed end of the Cold War, we passed beyond the end of history, and entered into a period where geopolitics and nation-to-nation relationships no longer mattered and were replaced by the so called "Fast World" or the "World Without Walls." In this supposed beyond-history universe, the only threats are now so called "rogue nations" and so called "superempowered angry individuals." Somehow, it is similar to the delusional nature of many in late 1860s France, as they scoffed at the suggestions of a small but aware faction that Prussia was preparing for war. Will today's decadent ones be similarly surprised by a future Bismarck, or by a group of Bismarcks?

[GOP_1900AD]

"serial product" s/b "serially produce..." Sorry.

[Dominic Harr]

Once a corporation reaches a few hundred people or 10s of Millions in revenue it should be subject to much harsher scrutiny and the officers should be held accountable personally for decisions in all cases.

Agreed.

May I suggest also that perhaps simply doing away with the 'virtual person-hood' would be a good start? Just force *someone* or *someones* to actually be the owner of record of each business? And then hold them criminally responsible for criminal behavior by those businesses?

That, I feel, is the real cause of our problems. That makes a 'business' into a 'collective person', and is the fount of all these problems.

[GOP_1900AD]

Bump.

[Willie Green]

bttt

[hedgetrimmer]

Corporations aren't chartered anymore? Isn't there a legal means to revoke a corporations status as a corportation? I think it would behoove the American people to learn how to do this.

We as citizens need to revoke any laws that allow governmental or taxpayer funding of any or all nonprofit corporations because they are a threat to the Republic and tax money should not be used for these types of entities. And remove nonprofit status from mega corporations like the Nature Conservancy because they are a threat to the Republic.

[A. Pole]

Under the original proposal as crafted by House Armed Services Committee Chairman Duncan Hunter (R-CA), all critical components in a weapon system would have had to be American-made and the overall system had to be 65 percent American. Those two requirements were eliminated under intense pressure from the Bush Administration, whose commitment to the recovery of American manufacturing has now been clearly shown to be phony.

How is it possible that critical components do not have to be American-made?! Or am I dreaming? Or maybe the producers will be restricted to the trusty members of NATO alliance like France or Germany?

Is this process under supervision of WTO?

[looscnnn]

"all critical components in a weapon system would have had to be American-made and the overall system had to be 65 percent American."

For National Security sake, the system should be 90+ percent American. Even at 65% with critical components being American made, there could be a serious problem if the other 35% is kept from the US. Also, there would be a serious delay if that happens and we contracted to have the remaining parts be made in America due to tooling, etc.

"Those two requirements were eliminated under intense pressure from the Bush Administration,"

That should have never happened. WTO, NAFTA, etc. are not more important that National Security.

[looscnnn]

" Now the current administration is doing the same thing as the last one did - allowing Boeing to export criticial technologies which could be used in weapons. I guess it's business as usual."

Maybe China already has the technology from our surveilence plane that they held hostage.

[looscnnn]

"We as citizens need to revoke any laws that allow governmental or taxpayer funding of any or all nonprofit corporations because they are a threat to the Republic and tax money should not be used for these types of entities."

Whoa, wait a sec there. There are some nonprofits that are there for the good of the Republic.

[Doctor Stochastic]

"He makes the rules , and he intends to keep it thataway
What's good for General Motors is good for the U.S.A."

Adapted from the chorus refrain from the musical version of "L'l Abner"

[hedgetrimmer]

Now how does a private ownership compete with this? A leading land trust has completed purchase of a 23,780-acre timber tract in Mendocino County, the first time a conservation group has purchased a working forest in California with a goal of mixing restoration and timber harvests.

A leading land trust has completed purchase of a 23,780-acre timber tract in Mendocino County, the first time a conservation group has purchased a working forest in California with a goal of mixing restoration and timber harvests.

Helped by $10 million in state grants and loans, the Virginia-based Conservation Fund formally closed Wednesday on the $18 million deal, one of the largest transactions of its kind ever on the North Coast.

[Cacique]

The corporations own the political parties. Both here and in Europe a corporate ruling class has taken over. They are transnational in nature, owing alegiance to no country and only to themselves. Profit at any cost is their motive.

They delude themselves into thinking they will always be in charge. Of such stuff revolutions and upheavals are made.