Ford collaboration with Chinese firms raises national security concerns in U.S.

'It is indefensible for Ford to use the same cloud integration and data provider that is linked to North Korean Ministry of Foreign Affairs sanctions evasion activity,' Gallagher and McMorris Rodgers wrote to Treasury Secretary Janet Yellen last week.

Ford collaboration with Chinese firms raises national security concerns in U.S.
AP Photo/David Zalubowski
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Ford Motor Company intends to engage with a minimum of four Chinese companies for technology and software provision, companies which also serve the Chinese government, military, and the North Korean government. This information comes from documents obtained by Republican investigators.

These details were disclosed on Monday by Rep. Mike Gallagher, R-Wis., head of the House Select Committee on the Chinese Communist Party, and Rep. Cathy McMorris Rodgers, R-Wash., chair of the Energy and Commerce Committee. The disclosure forms part of the Republicans' ongoing investigation into Ford's collaboration with Contemporary Amperex Technology (CATL), an electric vehicle battery manufacturer based in Fujian, China, Fox News reports.

The Republican leaders reported that upon examining parts of Ford's signed contracts with CATL, they found that four Chinese companies are set to play a crucial role. These firms will be deeply engaged in the design, building, and information technology aspects of a new electric vehicle battery plant that Ford plans to construct in Marshall, Michigan, with CATL's assistance.

"It is indefensible for Ford to use the same cloud integration and data provider that is linked to North Korean Ministry of Foreign Affairs sanctions evasion activity," Gallagher and McMorris Rodgers wrote to Treasury Secretary Janet Yellen last week.

"Before the Ford plant even comes online, its entire security system could be compromised by this software," they continued. "The same company that is actively supporting the PRC’s surveillance state will have the capability to embed backdoors, spyware, and other forms of malware within Ford’s [cloud service] infrastructure, compromising the confidentiality and integrity of Ford’s sensitive information and posing risk to Americans' data privacy rights."

After examining the signed contracts between Ford and CATL, the legislators wrote to Yellen, they also urged the Department of the Treasury’s Office of Foreign Assets Control to probe into potential sanction dodging activities by the four yet-to-be-named firms.

Gallagher and McMorris Rodgers addressed a different letter to Commerce Secretary Gina Raimondo, requesting that her department's Bureau of Industry and Security conduct an investigation into the four unnamed software service providers. They specifically requested the agency to contemplate adding these companies to a list that faces substantial U.S. trade restrictions.

"To summarize, a cursory review of publicly available information uncovered the above mentioned companies’ direct ties to the [People's Liberation Army], the CCP, China’s Ministry of Public Security, the ongoing genocide of Uyghur Muslims in Xinjiang, and the North Korean government," they wrote to Raimondo.

In a third letter, the Republican members requested that Ford's President and CEO, James Farley, arrange for a relevant company representative to participate in an interview with their committees.

"We've been helping the committees understand this Ford wholly owned and operated project," a Ford spokesperson stated. "Ford has always been and remains fully committed to following all government regulations across our business."

"Beyond legal requirements, Ford suppliers are required to meet our high standards and codes of conducts, including those to protect human rights, and are obligated to extend those requirements to suppliers with whom they might work," the spokesperson said. "We welcome any information from any source concerning the integrity of our supply chains and partners."

In the letters, the Republicans mentioned that the first among the four Chinese companies is engaged to create the conceptual design for CATL at Ford's Michigan facility. This company also supplies engineering design services to the Chinese military.

They also noted that a second company is tasked with delivering Integration Platform as a Service tools and applications for the planned plant, which are vital for IT infrastructure. According to the Republican leaders, this company offers similar services to organizations involved in sanctions evasion activities and to the North Korean government.

The Republicans' investigation revealed that a third Chinese company is set to supply Ford with Unified Authentication Account software tools at the plant, aimed at securing online user access. This company is currently a provider of software services to the Shenyang Institute of Automation, which falls under the Chinese Academy of Sciences and is already listed by the Department of Commerce.

The fourth company will manage the Business Process Management software tool for Ford. However, this company is involved in contracts with the Ministry of Public Security’s Xinjiang Uyghur Autonomous Region Public Security Department in China, a department that the Republicans highlight as being sanctioned by the Treasury Department for its role in the persecution of Uyghur Muslims.

In February 2023, Ford announced a $3.5 billion investment to construct a lithium iron phosphate battery plant in Marshall, Michigan, expected to create 2,500 new jobs. This plant will support Ford's expanding electric vehicle production. Alongside this announcement, Ford confirmed an agreement with CATL for the production of battery cells at the plant, utilizing services from the Chinese company.

The proposal faced significant opposition from national security specialists and legislators due to CATL's deep connections with the Chinese Communist Party (CCP). Despite this, Ford has consistently minimized these concerns, emphasizing that it retains exclusive ownership of the facility.

Subsequently, in November, Ford declared its decision to substantially reduce the size of the plant by 40% and decrease the anticipated job creation by over 30%.

"We are concerned that Ford’s partnership with a Chinese company could aid China’s efforts to expand its control over United States electric vehicle supply chains and jeopardize national security by furthering dependence on China," a group of House Republicans led by Energy and Commerce Chair Cathy McMorris Rodgers wrote to Farley in September.

"Should China gain control of domestic electric vehicle production, the United States would be exposed to serious national security risks at a time of escalating geopolitical tensions."

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