One Billion Customers - James McGregor [89]
CATIC soon got wind of the tool sale. The Chinese are deeply attuned to seek bargains and this had the odor of a true bargain basement sale. A delegation of Chinese engineers dispatched to Columbus in September 1993 to inspect the equipment was met by epithets from the workers who knew they would soon lose their jobs. Some workers even threw bolts at the delegation while others tried to block their video cameras. The Chinese decided to buy the equipment, but negotiations to seal the deal lasted for almost half a year as the Chinese fought to drive the best bargain.
In February 1994, CATIC agreed to pay $5.4 million in an all-or-none deal for 278 items, ranging from metal presses large enough to shape an airplane wing to desks, hand tools, and even wastebaskets. The Chinese would have to pack and ship the goods and have the factory cleared by July 5. McDonnell Douglas had hoped that CATIC’s purchase of the tools would make it easy to close the Columbus factory, but they didn’t reckon with the complex regulations governing the sale of machinery for export. The U.S. Commerce Department wanted reams of information before it would issue export licenses.
The licensing requirements were part of a long and schizophrenic effort by various U.S. government departments to control the spread of technology around the globe. During the height of the Cold War the restrictions had been extraordinarily tough, with the United States, Europe, and other non-Communist allies cooperating to block advanced technology and weapons from reaching the Soviet bloc and China. But technology had grown more complex with the advent of silicon chips, supercomputers, and satellites. American companies complained that the restrictions were hurting foreign sales. After Nixon’s trip to China, the United States eased technology and weapons export controls to that country. By 1987, the U.S. military was permitting the export of fuse and detonator assembly lines, counterartillery radars, and antisubmarine torpedoes. Grumman even won a $550 million program to upgrade the avionics in Chinese fighter jets that were copies of Soviet MIGs.
The Tiananmen Massacre changed everything. Even as China resumed its efforts in the 1990s to remake its economy, the U.S. military was butting heads with the U.S. Commerce Department over technology exports. Commerce officials thought the Defense guys were paranoid; the Defense guys pegged Commerce as naïve and beholden to corporate interests. In 1994, European and Japanese companies began selling whatever technology and equipment they wanted—with the exception of weapons—to whomever they wanted. American companies stood alone under tight technology export restrictions for China.
Hitt put John Bruns, a Chinese-speaking American who had grown up in Taiwan, in charge of getting the export licenses. Bruns was a shrewd but unassuming thirty-year-old with a flop of hair across his forehead and a constant mischievous grin. He found China just as entertaining as Hitt did. He had started as an intern in the China sales group of McDonnell Douglas in 1986 and had worked his way up to become Hitt’s troubleshooter for the China coproduction projects.
Bruns and Hitt continually pestered CATIC to provide them with the detailed information the United States required. The most sensitive pieces of equipment were six big five-axis machine tools that could perform complex simultaneous motions: the typical horizontal, lateral, and vertical movements, as well as rotation around two perpendicular axes. Computer-controlled five-axis machines could be used to produce a variety of sophisticated products, including huge propellers for submarines that turned almost silently underwater. Not surprisingly, the