Proposed HBC Sale Raises Questions For Defense Business
By Jen DiMascio, Fred George
Source: Aerospace Daily & Defense Report
The U.S. Committee on Foreign Investment in the U.S. (CFIUS), an interagency group that examines the impact of foreign involvement in U.S. firms, will want to review the implications of Chinese ownership on national security.
King Air 350ER turboprops bound for civil use and military ISR conversions, for instance, roll down the same assembly line. CFIUS will evaluate the potential effect of the sale on national security.
CFIUS and other government agencies may look at hard firewalls between the Chinese owners and Hawker Beechcraft’s board of directors, the firm’s management team and even aircraft assembly lines. They also may insist that future aircraft and spares be provided by approved U.S. and allied-nation vendors, if those aircraft are destined for ISR conversion.
“It’s highly doubtful that the U.S. government would want to be dependent on a Chinese supply chain,” another industry source says.
“There are hard firewalls you have to create if you are using an ISR platform over which the Chinese might have influence.”
But if Hawker Beechcraft can convince the U.S. government that Superior Aviation Beijing is just a passive partner interested in investment income, then the deal stands a much better chance of approval.
The idea of a King Air produced by a Chinese-owned company doesn’t bother Lt. Gen. Larry James, U.S. Air Force deputy chief of staff for ISR. “If you are talking just about the airframe, it’s not a state-of-the-art, push-the-edge-of-the-envelope capability,” he says. After all, “A King Air is a King Air.”
But it’s impossible to predict how a sale to the Chinese of such an iconic American brand might play out in Washington.