When you dance with the Devil......

Apple better get their shit out immediately.

Hell, ANY American company needs to abandon China.

https://www.foxbusiness.com/ma...ca-owned-car-company

China enticed an American entrepreneur with the opportunity of helping build a cutting-edge automobile company in the world’s largest car market, then used the uncertainty cast by COVID-19 to steal his intellectual property, the businessman says.

Steve Saleen, founder of specialty high-performance sports car manufacturer Saleen Automotive, and his partner Charles Wang, a Chinese immigrant and former attorney at a New York law firm, were approached in late 2015 about forming a joint venture with the city of Rugao to manufacture automobiles.

The deal “offered, I thought, from my standpoint, a great opportunity to help build a global company,” Saleen told FOX Business.

The agreement that was reached called for Saleen to contribute his brand and trademarks, designs for three engineered vehicles and experience, know-how and technology in manufacturing automobiles, he said. Those contributions were valued at $800 million.

Wang, who helped structure the deal, would serve as the company’s chief executive officer.

$1.6T IN CENTURY-OLD CHINESE BONDS OFFER TRUMP UNIQUE LEVERAGE AGAINST BEIJING

For their efforts, Saleen, Wang and their partners would receive two-thirds ownership of the newly formed company called Jiangsu Saleen Automotive Technologies.

The city of Rugao’s government, which owned the remaining third, was responsible for providing $500 million of capital and $600 million in subsidized loans over three years to fund the operations and build a manufacturing facility. Rugao, located on China’s Eastern seaboard in Jiangsu province, is about 125 miles north of Shanghai.

“It sounded like a great deal to us, so we went along with them,” Wang said, adding that his experience enabled him to set up the company’s corporate governance and articles of incorporation in accordance with Chinese law.

By early 2020, everything was going according to plan. The initial product, an SUV, was in certification and the employee headcount had swelled from three to nearly 1,000. The factory, armed with 470 state-of-the-art robots, was ready for production.

Then the COVID-19 pandemic struck.

With both Saleen and Wang stuck in the U.S. as flights to China were grounded, the Rugao government seized on an opportunity to “nationalize the company,” according to Saleen.



On June 29, the city sent six police cars with sirens blaring and vans full of private security forces to raid Jiangsu Saleen’s manufacturing facility and offices.

The forces ordered employees to leave and shut off the water and electricity when some refused to do so. Executives, who were Chinese nationals were forced to resign or face consequences from Rugao's government, Saleen told FOX Business. The remaining employees were terminated.

Two employees, Frank Sterzer, a German national who was vice president of manufacturing, and Grace Yin Xu, a Chinese national in charge of corporate affairs, were detained.

While Sterzer was released after six hours when he contacted the German Embassy with a cellphone that wasn’t confiscated, Yin Xu was held for a month after she refused to corroborate the local government’s claims that Wang tried to embezzle money.

Rugao authorities also claimed Saleen’s technology was worthless and false information was given to secure a higher valuation, he told FOX Business.

Without Saleen’s knowledge, officials had previously filed 510 patents for the intellectual properties he developed – 120 of which were already awarded, including his signature supercharger. Many of the filings didn’t even list Saleen as the inventor.

The shareholder who represented the city’s one-third stake held an illegal board meeting and removed Saleen and Wang as directors of the firm, leaving the foreign shareholders without representation, he said. Under Chinese corporate law, a board meeting cannot be held without a quorum of 51 percent of shareholders.

The Rugao government didn’t comment when reached by FOX Business. Efforts to obtain comment from China’s Ministry of Foreign Affairs, located in Beijing, were unsuccessful, and a spokesperson from the U.S. Commerce Department didn't respond to a request from FOX Business.

While chances are slim for a resolution on the mainland, Saleen and Wang have an avenue for arbitration in Hong Kong. Their attorney in the special administrative region said there is a good chance they will win the case, but whether it will be enforceable is “a huge question mark,” according to Wang.

The irony is that as Saleen's company was being taken over, the U.S. and China were putting the finishing touches on a phase one trade deal for which President Trump had been pushing since taking office.

The initial agreement included promises from Beijing to halt intellectual property theft, and a second phase -- now in limbo as tensions between the two countries mount -- was supposed to hone in on those commitments.

Should it come about despite Trump's criticism of China's handling of COVID-19, a highly contagious disease first observed in the country late last year, and its crackdown on civil liberties in Hong Kong, Saleen has some ideas of what it should include.

He says Chinese firms that infringe on intellectual property should be blocked from U.S. capital markets, asset valuations by Chinese companies that operate in the U.S. should be prohibited and that entities and individuals should be held accountable for any intellectual property infringement with both civil and criminal liability.

He also believes Chinese cars should be blocked from the U.S. market unless they are part of a joint venture with an American company.

Saleen, who worries it is “too late” for him and his partners, thinks his experience serves as a warning for anyone who is thinking about doing business in China.

“If it can happen to me, it can literally happen to anyone,” Saleen said. "If this wasn't happening in real-time, you would think that it was actually a Hollywood movie."

When you lay with dogs you might get fleas.

Covid preventing him from physically being there might have been a blessing.

THIS part right here.

They can go to court all they want, but you have to be able to collect. He's just fucked.

quote:

Without Saleen’s knowledge, officials had previously filed 510 patents for the intellectual properties he developed – 120 of which were already awarded, including his signature supercharger. Many of the filings didn’t even list Saleen as the inventor.

Ocassionally I get stung by China when I forget to check or assume where things are made. Most recently it was a Craftsman item. Lasted all of 6 hours before it broke. Made it 8 months before it completely fell apart. Made me feel like Charlie Brown kicking a football held by Lucie.

I'm surprised we know the details of the story. What a bunch of assholes the chinese are.

This is very common for any company doing business there if they are below the Fortune 500 level.
Once you build a factory there, import the machinery needed, and train the workers, they have what they need.
They then make it more and more difficult to function there profitably. So you want to take stuff out of there and play somewhere else. Maybe sell them your stuff, even at a loss.
Good luck with that.
Wash, rinse, repeat.

Let's just do the math:

Contributions:
$800 million - arbitrarily assigned value of Saleen's intellectual property.
$1.1 billion - actual monetary contribution by the Chinese

Ownership of company for respective contributions:

66.67% - Saleen and Wang
33.33% - the Chinese

Basically, just for showing up, Saleen and Wang get 66.67% "ownership".

What's that saying about if something is too good to be true? Where was the Nigerean Prince in this deal?

This is a reason why people experienced in International business require 3rd world countries and dictatorships to put up 1st world collateral. If they nationalize the facility, you file the papers to take their 1st world asset.

I'm now to the point of, not just giving non-Chinese goods preference, even at increased cost, but attempting to avoid any goods made in China entirely, when possible. And if I cannot afford or justify the cost of the non-Chinese product I'll simply do without.

That latter point is where I am with our surveillance system. There are two or three additional cameras I want, but I'll buy no more Dahua, Hikvision, etc.

Just another type of war.
What are we going to do, pull all our manufacturing out? They've already got it and are keeping it whether the companies bail or not. They won't stop making our products just because we "leave". Hell they're making clones of our products while they're making the real ones.

If they do leave, where to? Here in the US? Good luck getting that rolling, half the people don't work and sure don't want to start now.

I'd love to see this happen to "woke" NIKE! LOL

Lovely. My Grandmother worked near NYC, and when i was a boy, she told me that one day we would be working for the Chineese with all the new Chineese investment on US soil that started happening way back then. She said we were wrong for letting them become owners on US soil. Even at that young age I believed her, and over the years to this day I remember her words each time I hear about this shit.

quote:

Originally posted by FN in MT:
I'd love to see this happen to "woke" NIKE! LOL

I wish it would too but I think most of their products are made in Vietnam.

Companies should not be suprised their tech gets stolen anymore. This has happened hundreds of times. Their culture doesn't recognize it as being a problem.

quote:

and his partner Charles Wang, a Chinese immigrant and former attorney at a New York law firm, were approached in late 2015 about forming a joint venture with the city of Rugao to manufacture automobiles.

The Chinese are all about the long game. I would go to say this was the Chinese and Wang’s plan all along. Not specifically Saleen and Covid at the onset but an American Company and some sort of issue that would present itself to do the same.

As a Mustang Guy I have always been a Saleen fan but for Steve to go get in bed with China we’ll this is what you get pal!

quote:

Originally posted by ibanda:
Companies should not be suprised their tech gets stolen anymore. This has happened hundreds of times. Their culture doesn't recognize it as being a problem.

Eric Glesser, of Spyderco, toured one of those factories some time back, and stopped at a workbench where a guy was assembling counterfeit PM2's, a knife Eric designed. He had the person giving the tour introduce him to the worker, and the worker, with a big smile on his face, thanked Eric for designing such a wonderful knife. He was being sincere.

Three years ago, the company I worked for was producing some of the best guitar pickups on the market. After many years of flatly refusing to do business with the Chinese, Obama's economy was so awesome that they felt they had to. Suddenly, we're getting orders for Chinese manufacturing levels of product expected from six dudes with workbenches on top of all the regular business we did, and we sold them to them for cheaper than we sold to anybody else. I voiced a concern that the short-term business may not be worth providing them with all the examples of our product they'd need to reverse-engineer the stuff and my manager just shrugged and pointed out that the owner of the company has a bust of Mao Zedong on his workbench and said he could do what he wanted with his IP. Then some Chinese folks came and toured our shop and took a bunch of pictures. I left shortly after. I'd imagine Chinese guitar pickups have improved drastically in the last three years.

IP, as a concept, doesn't exist in those people's minds. Reading the offer to Saleen, all I could think was "sounds too good to be true."

Steve Saleen made some bad ass mustangs.

It's a shame, but if you do a deal with the devil, and give them everything, you might get burned. Hopefully this is big enough that the U.S. government will step in.

Another owner I worked for did manufacturing in China but specifically told me you needed a minimum of 7 levels of seperation......meaning parts had to be made in at least 7 different factories in 7 different cities, so they couldn't figure out what the end product was or how to reverse engineer it.

quote:

Originally posted by jimmy123x:
It's a shame, but if you do a deal with the devil, and give them everything, you might get burned. Hopefully this is big enough that the U.S. government will step in.

I hope our government stays out of it. That way it will be a harsh lesson to Saleen and other American companies thinking about doing business with those bastards.

Rolex and SWATCH (Omega) are doing everything they can to stop the counterfeiters, but the factories are just now openly selling the fake parts on eBay.

They are even building blatant rip-off ETA movements with the ETA markings.

They aren't about to stop shipping product to China as they are their biggest customers, leaving Europe and the the Americas with two year waiting lists for product.