Saudis buy major supplier to U.S. military

Saudi Arabia has acquired a Massachusetts firm that is a leading supplier to the U.S. military.

The state-owned Saudi Basic Industries Corp. has purchased GE Plastics from General Electric for $11.6 billion. Based in Pittsfield, Mass., GE Plastics, with 11,000 employees, develops and manufactures plastic polymers, composites and polycarbonates used in U.S. military platforms, including fighter-jets, submarines and engines.

"SABIC's intention is to grow globally," SABIC chief executive officer Mohamed Al Mady said.

In May 2007, SABIC announced the acquisition of GE Plastics, regarded as the largest transaction ever completed in the United States by a Gulf Cooperation Council state, Middle East Newsline reported. Seventy percent of SABIC, which employees 17,000 people, is owned by the Saudi government, with Middle East investors accounting for the rest of the company.

SABIC, established in 1976, bested the U.S.-based Apollo Management and the Dutch firm Bassell for the acquisition of GE Plastics. The Saudi company offered $11.6 billion for GE Plastics.

The purchase of GE Plastics must be approved by the Committee on Foreign Investments in the U.S, aligned with the Treasury Department. In March 2006, CFIUS enabled the purchase of Britain's Peninsular and Oriental Steam Navigation Co., which operates the six major U.S. ports, by the United Arab Emirates.

Congress protested the sale of P&O on grounds of national security, and the UAE's Dubai Ports World backed out of the deal. DP World, however, succeeded in its bid to acquire Britain's Doncasters Group Ltd., a manufacturer of precision aircraft engine parts for the U.S. military.

Executives said GE Plastics maintains contracts with the U.S. Defense Department, Homeland Security Department and the National Aeronautics and Space Administration, or NASA. Congress has not raised objections to the SABIC purchase.

Any other weapons systems engineers out there that have an opinion on this issue?

I'm in the industry now as a junior level EE, doing some work on ground launch equipment. I seriously doubt I could do anything if I had to use US-only parts. Passive components that are mil-rated and QPL aren't typically made in the US from what I've seen (except for some exotic types of capacitors, from what I can tell). A lot of ICs are made by US-based companies, but in overseas fabs. I think that's even true for the -883 compliant ones. Again, not a supply-chain expert, but it seems to me that most bread-and-butter parts aren't made in the US. And don't get me started on the counterfeit parts in the chain and all the GIDEP alerts.....

Of even more immediate concern is RoHS. Most manufacturers are dropping their non-RoHS stuff, as, what, 90% to 95% of the market's going that way? It doesn't make sense for a lot of these folks to keep two production lines going, and even if they do, the non-RoHS stuff is a lot longer lead time. Really crimps me on parts selection, as we can't use RoHS parts in critical systems due to pure tin used in the component leads (leads to whiskering).

Hermetic sealing's another problem, as lots of IC manufacturers are dropping their CerDIP and similar hermetic packaging. Not enough of a market. Some will do hermetic parts on request, but expect long lead times and the price to go way up.

Just a report from the trenches. YMMV.

“Just a report from the trenches.”

Interesting report. My how things have changed!

One of the things that I did early on in my career was a technology assessment on IC’s in the MLRS system.

Much of that system had obsolete components in it several years before the official field date. There was a lot of metal gate CMOS and RTL and DTL logic in it.

Our job was to generate a report containing recommendations for strategies to deal with rapidly changing technologies.

As soon as we issued the report it was classified, and I really don’t know what was done with our recommendations.

Obviously the MLRS turned out just fine: it was a real star in GW1.

I sure hope someone is paying very close attention to this sort of thing now. It might be rather difficult to get semiconductor fabs in China to send us spare parts if we are at war with them.

I’m certain that RoHS is really an acronym for “a real pain in the ass” in some language.

Good luck to you.

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