Twelve US senators on Wednesday urged that a national security review panel reject Chinese aluminum giant Zhongwang International Group’s proposed US$2.3 billion purchase of US aluminum products maker Aleris Corp.
The senators asked Treasury Secretary Jack Lew in a letter to launch a review of the deal by the Committee on Foreign Investments in the United States and “ultimately reject it” on grounds that it would damage the US defense industrial base.
“Zhongwang’s purchase of Aleris would directly undermine our national security, including by jeopardizing the US manufacturing base for sensitive technologies in an industry already devastated by the effects of China’s market distorting policies, and creating serious risk that sensitive technologies and know-how will be transferred to China, further imperiling US defense interests,” the senators wrote.
The deal, announced just over two months ago, would give one of the world’s largest makers of extruded aluminum products access to US technology and customers that include Boeing Co and other US defense contractors and automakers that are increasingly turning to aluminum.
The letter was signed by Republican Rob Portman of Ohio, where Aleris is based, and Democrats Ron Wyden, Charles Schumer, Bob Casey, Joe Manchin, Kirsten Gillibrand, Joe Donnelly, Debbie Stabenow, Jeff Merkley, Amy Klobuchar, Tammy Baldwin and Al Franken.
They said the review committee needed to be cautious about the potential for sensitive research data to be transferred to China, including data with military applications such as advanced modeling techniques, high-strength alloys and the design of light armor material.
A Zhongwang spokeswoman said the CFIUS filing for the transaction was voluntary and that the company and its US subsidiary have no connection with the Chinese government. She added that the deal will bring in additional resources and capital to Aleris and there will be no changes to management, employees or business strategies.
A Treasury spokeswoman declined to comment on the letter, adding that information filed with CFIUS by law cannot be disclosed to the public and that Treasury does not comment on specific CFIUS cases.
Aleris said in a statement reacting to the letter that the company’s US facilities produce no defense-related products, and the technology for aluminum plate used in some defense products was widely used in the industry.
“Our facilities in the US produce aluminum for car and truck exteriors, gutters and roofing material,” Aleris said. ” Less than 1 percent of our sales go into defense applications, and none of those goods are produced in the US.”