FBI probes Chinese investment in Icon

Geez, adjust the goalposts to fit a political motive. What happened to limited governance?
 
Cirrus is owned by the Chinese.
 
I'll bet they do nothing but lose money on American Aviation acquisitions, the red ink surrounding Mooney was staggering. I can't imagine what intellectual property they're going to obtain doing any of this. 50 year old engine designs? Cutting edge 1970's fiberglass technology?
 
Like Steingar, I don’t see any reason for concern. What technology transfer are they going to realize? Techniques for making air cooled engines with a TBO of 2000 hours? There’s just no sensitive technology in light GA.
 
kyleb said:
Like Steingar, I don’t see any reason for concern. What technology transfer are they going to realize? Techniques for making air cooled engines with a TBO of 2000 hours? There’s just no sensitive technology in light GA.
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Everything seems easy until you try to do it. For Cirrus the magic is in how they make the fuselage in two halves and bond them together. There is a lot of technology in the methods, materials and processes used to make the engines we fly. Machinery and materials are constantly improving. Fixturing and know how takes years to improve. It's much easier to copy something than to blaze your own trail.
 
steingar said:
I can't imagine what intellectual property they're going to obtain doing any of this.
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kyleb said:
There’s just no sensitive technology in ligh
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There is a huge aviation counterfeiting industry in China that covers from 737 to 150s. Having US aviation interests gives them an inside door to a number of databases, proprietary info, etc. that makes duplicating their knock-off parts very easy and almost indistinguishable from the real thing. There was an interesting investigation into some 737 flap track mount fittings a number of years ago that raised these questions. Plus there were a few helicopter part issues as well outside the US. Manufacturing/selling bogus aircraft parts has global implications. In my opinion its all about the money/control and data mining vs 007 stuff.
 
Bell206 said:
There is a huge aviation counterfeiting industry in China that covers from 737 to 150s. Having US aviation interests gives them an inside door to a number of databases, proprietary info, etc. that makes duplicating their knock-off parts very easy and almost indistinguishable from the real thing. There was an interesting investigation into some 737 flap track mount fittings a number of years ago that raised these questions. Plus there were a few helicopter part issues as well outside the US. Manufacturing/selling bogus aircraft parts has global implications. In my opinion its all about the money/control and data mining vs 007 stuff.
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If they own the company, why bother with the knockoff? Sell the parts at the same high price as now and make more money!
Bell206 said:
Here is a chart of various Chinese investments in US aviation that I had from some other research I did. There's a lot of Yen floating in US aviation food chains to include TCM.
https://www.rand.org/content/dam/rand/pubs/research_reports/RR1700/RR1755/RAND_RR1755.pdf
View attachment 103854
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It's yuan or renmimbi (unit of yuan). Yen is Japanese.

steingar said:
I'll bet they do nothing but lose money on American Aviation acquisitions, the red ink surrounding Mooney was staggering. I can't imagine what intellectual property they're going to obtain doing any of this. 50 year old engine designs? Cutting edge 1970's fiberglass technology?
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This.

PaulS said:
Everything seems easy until you try to do it. For Cirrus the magic is in how they make the fuselage in two halves and bond them together. There is a lot of technology in the methods, materials and processes used to make the engines we fly. Machinery and materials are constantly improving. Fixturing and know how takes years to improve. It's much easier to copy something than to blaze your own trail.
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That seems to be worked out for other composite planes- The discontinued Cessna TTx, and probably others as well. It's easier to buy something than blaze your own trail, as well. Look at MicroSoft buying Activision.
 
Cap'n Jack said:
If they own the company, why bother with the knockoff?
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Extreme profit margins on those knock off parts plus no ICAO, etc. requirements or tracking. One of the main advantages of owning/controlling an aircraft manufacture is that it gets you into a "network" that is not policed or has much oversight due to everyone on the network is certified and is required to follow the rules. Throw in various aviation bilateral agreements and you have a distribution network with minimal checks and balances. So its more like a fox running the chicken house. China just started approaching the EASA for a mutual agreements but last I heard it was still light years apart from a regulatory point. And with more MROs opening up in Asia they supposedly have become the entry point for some of these mirror image knock-off parts to circumvent traditional supply channels.
Cap'n Jack said:
It's yuan or renmimbi (unit of yuan). Yen is Japanese.
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:thumbsup:
 
Some of the companies that the Chinese bought or infused with cash might have ended in bankruptcy or dissolution and the Chinese extended their life. This keeps the companies afloat and US employees employed. In other cases, the principals might have wanted out and put the company up for sale. The Chinese were either the only bidder or high bidder. Blame American venture capitalists or the banks for not ponying up the cash. The Chinese are only investing in their future.
 
Bell206 said:
Extreme profit margins on those knock off parts plus no ICAO, etc. requirements or tracking. One of the main advantages of owning/controlling an aircraft manufacture is that it gets you into a "network" that is not policed or has much oversight due to everyone on the network is certified and is required to follow the rules. Throw in various aviation bilateral agreements and you have a distribution network with minimal checks and balances. So its more like a fox running the chicken house. China just started approaching the EASA for a mutual agreements but last I heard it was still light years apart from a regulatory point. And with more MROs opening up in Asia they supposedly have become the entry point for some of these mirror image knock-off parts to circumvent traditional supply channels.

:thumbsup:
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Please define your terms- what's an "MRO"?
As for the rest of it, how is that different from what Boeing has been doing? You know, an upright American company?
From another thread:
https://simpleflying.com/the-next-a...dqdOZlvQ9lYLjriH7oqBP-Por0ebiqkg5AOvJOOuGhHP0
Never mind Boeing's other problems.
 
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SkyDog58 said:
Some of the companies that the Chinese bought or infused with cash might have ended in bankruptcy or dissolution and the Chinese extended their life. This keeps the companies afloat and US employees employed. In other cases, the principals might have wanted out and put the company up for sale. The Chinese were either the only bidder or high bidder. Blame American venture capitalists or the banks for not ponying up the cash. The Chinese are only investing in their future.
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Yes, and this is what happened with American manufacturing, too.
Like this: https://www.nbcnews.com/id/wbna26531610

We have sold or given the Chinese so much and it is biting us in the butt now. I don't blame the Chinese.
"We have met the enemy and he is us."

Don't blame China when we gave, or sold, them everything.
 
Chinese investment in the US is a lot less about obtaining the technology than it is about money laundering and hard currency.

You need to look no further than the Vancouver Canada housing market and the casinos there as an example of both of these.
 
cowtowner said:
Chinese investment in the US is a lot less about obtaining the technology than it is about money laundering and hard currency.
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That’s correct. They don’t need to invest in our companies to steal the technology.
 
SkyDog58 said:
What are the Chinese going to learn from Icon? How to over promise and under deliver? How to write crappy purchase agreements?
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Looting IP that has potential military usage.

When they are inventors, they can steal more easily. The Chinese culture has a different view of intellectual property than US law and international treaties and they don't abide by them.
 
steingar said:
These arguments about Chinese money remind me of the ones about Japanese money in the 80's.
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The japanese have some creepy technology going on. Most recently I've seen one where a computer uses security camera to analyze body posture and movement to infer what activity a person is doing, then reports on it. The potential abuse doesn't take much imagination to find.
 
steingar said:
These arguments about Chinese money remind me of the ones about Japanese money in the 80's.
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And the same property crash, deflation and low birth rates that happened in Japan are starting to happen in China.
 
bflynn said:
Looting IP that has potential military usage.

When they are inventors, they can steal more easily. The Chinese culture has a different view of intellectual property than US law and international treaties and they don't abide by them.
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Why would they buy the company when they could just buy a few planes and reverse engineer them?

The Chinese are masters at reverse engineering, and beyond the low cost consumer goods market, they are very dang efficient in their manufacturing process and their quality, if monitored, is as good as domestic manufacturing. Don't believe me, pick up your iPhone and take a look.

I needed some brackets made for my house to hold up my porch railings and go around my gutters, about 30 pcs using 1/2" steel plate. My local machine shop wanted 90 days and $100 a bracket and they wanted a 3d drawing of it. While I was visiting one of the factories I use in China, I drew up what I needed on a piece of paper. I had a sample by the time we got back from dinner. $14 each. All 30 brackets were done by the end of the next day.

They have more tool and die makers in one town than we have in our whole country.
 
cowtowner said:
Chinese investment in the US is a lot less about obtaining the technology than it is about money laundering and hard currency.

You need to look no further than the Vancouver Canada housing market and the casinos there as an example of both of these.
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Vancouver is driven by Chinese citizens, primarily from Hong Kong, that did not trust their government to honor the agreement when HK was handed over from the Brits. They have been proven very right in that assumption.
 
bflynn said:
Looting IP that has potential military usage.
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Icon? You forgot the smiley that let us know you are joking.

bflynn said:
When they are inventors, they can steal more easily. The Chinese culture has a different view of intellectual property than US law and international treaties and they don't abide by them.
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Why steal if they are inventing?
 
I think there is as much to the story in the source as there is in the content.

As I understand, Icon Investors have been very unhappy with the Chinese Investment since it was initiated. When you couple that with the slower than expected sales growth and an unsafe image that has propagated around the A5 (that some blame on a cultural issues within Icon), Icon investors have been lashing out against the company's executive team.

If I were in charge of Icon, I would be watching my back for a coup. If I were invested in Icon, I would have been looking for an exit long before this.
 
Cap'n Jack said:
Please define your terms- what's an "MRO"?
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Maintenance, Repair, Overhaul. Its the king of aviation maintenance A-Z outsourcing. And Asia is becoming the go to place to the tune of billions in profits over the next 10 years.
Cap'n Jack said:
how is that different from what Boeing has been doing?
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Boeing has a paper trail of their mistakes to include other issues with improper parts manufacture, etc. On the Chinese side they prefer to fake things and pass them off as good. However, they are becoming a bit smarter in trying to dodge the bullet. About 5 years ago a Chinese parts suppler to Moog Controls was caught fabricating test data and using sub-par materials all under a legit procurement company. I can't post links at the moment but search "Moog bogus parts 737" and you'll get some articles about it. The difference here as with Boeing is they could track those parts and removed them from the fleet. Since then it appears there is an effort to by pass the traceability side and "insert" sub-par parts into the existing system. In the little I was involved in it was a pretty complex issue but with far reaching consequences as the global aviation system is considered a closed system just as the FAA system is when it comes to traceability, certification, etc.
 
Bell206 said:
Maintenance, Repair, Overhaul. Its the king of aviation maintenance A-Z outsourcing. And Asia is becoming the go to place to the tune of billions in profits over the next 10 years.
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Do you think that is a good thing? It's the free market at work. I don't have a good answer to keep this sort of work in the USA compatible with our freedoms. Note that "Asia" includes a lot of countries besides China.

Bell206 said:
Boeing has a paper trail of their mistakes to include other issues with improper parts manufacture, etc. On the Chinese side they prefer to fake things and pass them off as good. However, they are becoming a bit smarter in trying to dodge the bullet. About 5 years ago a Chinese parts suppler to Moog Controls was caught fabricating test data and using sub-par materials all under a legit procurement company. I can't post links at the moment but search "Moog bogus parts 737" and you'll get some articles about it. The difference here as with Boeing is they could track those parts and removed them from the fleet. Since then it appears there is an effort to by pass the traceability side and "insert" sub-par parts into the existing system. In the little I was involved in it was a pretty complex issue but with far reaching consequences as the global aviation system is considered a closed system just as the FAA system is when it comes to traceability, certification, etc.
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Here's a citation, and mentions that the Japanese have had similar problems:
https://www.reuters.com/article/us-...challenge-chinas-aerospace-boom-idUSKBN1CL0R2
I note this is Boeing again, and they should spot check their suppliers more- more management fail from Boeing.

Any group of people will cheat this system unless monitored.
 
Cap'n Jack said:
Do you think that is a good thing? It's the free market at work. I don't have a good answer to keep this sort of work in the USA compatible with our freedoms.
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Yes. Basically all future aviation growth is in the SE Asia area. And it is not really about the USA or freedoms but established international aviation conventions. Unfortunately there are few signatories to various existing agreements in this area which is the problem at the moment.
Cap'n Jack said:
Note that "Asia" includes a lot of countries besides China.
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Definitely. Most of the overseas work I assist consultants with switched to this area about 5 years ago. Right now there are about 10 countries that are the main players.
Cap'n Jack said:
I note this is Boeing again
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Boeing is merely the media poster child for all things bad in avaition. Plenty of issues to go around they just dont have the star power as Boeing.
Cap'n Jack said:
Any group of people will cheat this system unless monitored.
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Yes. But in the existing system its relatively small. The existing system has a lot of built check/balance and "trust" which keeps the cheats small. With China the cheating is at the state level which would be the equivelant of say France cheating against the FAA or EASA. Entirely different scenario when a big player doesnt give a hoot about said trust.
 
Bell206 said:
Yes. Basically all future aviation growth is in the SE Asia area. And it is not really about the USA or freedoms but established international aviation conventions. Unfortunately there are few signatories to various existing agreements in this area which is the problem at the moment.

Definitely. Most of the overseas work I assist consultants with switched to this area about 5 years ago. Right now there are about 10 countries that are the main players.

Boeing is merely the media poster child for all things bad in avaition. Plenty of issues to go around they just dont have the star power as Boeing.

Yes. But in the existing system its relatively small. The existing system has a lot of built check/balance and "trust" which keeps the cheats small. With China the cheating is at the state level which would be the equivelant of say France cheating against the FAA or EASA. Entirely different scenario when a big player doesnt give a hoot about said trust.
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Just out of curiosity, what are those ten countries?
As for Boeing, there's a reason they've become the poster-child. Other companies haven't had the litany of problems as Boeing.
As for this particular cheating being at the state level, I do doubt it. When they get caught, it is embarrassing to them. Espionage- they shrug it off. But things that affect their ability to make money, I don't think it is state-sponsored, not in this case. They are getting ready to sell their own jets to the world, and this sort of cheating makes it much more difficult to do so.

Edit: I've noticed that the government is slow at times to respond to criminal activity to their own citizens, such as what we would call wire fraud. That doesn't mean the state is sponsoring such activity. One needs to "trust but verify" with business partners over there unless one knows them personally.
 
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Cap'n Jack said:
what are those ten countries?
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Singapore, Phillipines, ROK are the ones I remember at the moment and Austrailia by extention.
Cap'n Jack said:
They are getting ready to sell their own jets to the world,
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Exactly which is why they are trying to up their game. But they have the same issues the Russians do trying to break into the western certification world. And those issues are deep rooted in their societies. The one advantage the Chinese have is their ability to invest and mingle with western aviation companies. They've invited any aviation OEM to build in -country to help legitimize their industry. Unfortunately they dont have the same "priorites" when it comes to certification requirements which is same as the Russians that drive the shortcuts and lack of transparency.
Cap'n Jack said:
One needs to "trust but verify" with business partners over
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Unfortunately on the aviation side there is not constant oversight among signatories. So when France builds a new aircraft and their DGAC signs the paper it is considered compliant with no further checks by their fellow counries. That is the purpose of the agreements. Same with our CoA Export certificate and 8130s they're accepted on face value only. Its the lack of this type traceability and integraty that hinders Russia aircraft from breaking into western ops. And China is no different... they're just willing to do more and at any cost.
 
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Bell206 said:
Singapore, Phillipines, ROK are the ones I remember at the moment and Austrailia by extention.

Exactly which is why they are trying to up their game. But they have the same issues the Russians do trying to break into the western certification world. And those issues are deep rooted in their societies. The one advantage the Chinese have is their ability to invest and mingle with western aviation companies. They've invited any aviation OEM to build in -country to help legitimize their industry. Unfortunately they dont have the same "priorites" when it comes to certification requirements which is same as the Russians that drive the shortcuts and lack of transparency.

Unfortunately on the aviation side there is not constant oversight among signatories. So when France builds a new aircraft and their DGAC signs the paper it is considered compliant with no further checks by their fellow counries. That is the purpose of the agreements. Same with our CoA Export certificate and 8130s they're accepted on face value only. Its the lack of this type traceability and integraty that hinders Russia aircraft from breaking into western ops. And China is no different... they're just willing to do more and at any cost.
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I see similarities with active pharmaceutical ingredients (APIs). The companies that outsourced that manufacturing have learned to "trust but verify", and the manufacturers are subject to visits by FDA inspectors (and I don't know how that works now, with the pandemics). Perhaps because there isn't any sort of international agreement there, as you imply exists in aviation- the various drug administrations require separate applications although they generally accept data from applications in other countries. I'll note that the Chinese people trust local medicines less than the western equivalents. Is there no further inspection after a country becomes a signatory to whatever maintenance agreement you are alluding to?
 
The Chinese don't trust their pharmaceutical companies, cosmetic industry nor anything to do with babies, ie formula.

For good reason.....
 
Cap'n Jack said:
international agreement there, as you imply exists in aviation-
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I cant post a link right now but if you look under "bilateral agreements" at faa.gov you can see a listing of all the agreements. There are quite a number and specific to country/civil regulatory agency.
Cap'n Jack said:
Is there no further inspection after a country becomes a signatory to whatever maintenance agreement you are alluding to?
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The agreements are not just maintence ones. Some are very complex and deal with type design approval, parts production, operational items, certifications, etc. The point of the agreements is to reduce duplicate approval requirements. This way when an aircraft goes through say the FAA Part 23 certification that same aircraft does not have to go through the EASA Part 23 as each signatory nation accepts each others certification process as equals. So these agreements are much deeper in commitments.

There are mutual oversight checks but mainly at a higher level and not on a routine basis. Any detailed inspection at the aircraft level would mostly happen after the aircraft was received, issued its AWC, and was being inspected as part of normal program.
 
cowtowner said:
Why would they buy the company when they could just buy a few planes and reverse engineer them?

The Chinese are masters at reverse engineering, and beyond the low cost consumer goods market, they are very dang efficient in their manufacturing process and their quality, if monitored, is as good as domestic manufacturing. Don't believe me, pick up your iPhone and take a look.

I needed some brackets made for my house to hold up my porch railings and go around my gutters, about 30 pcs using 1/2" steel plate. My local machine shop wanted 90 days and $100 a bracket and they wanted a 3d drawing of it. While I was visiting one of the factories I use in China, I drew up what I needed on a piece of paper. I had a sample by the time we got back from dinner. $14 each. All 30 brackets were done by the end of the next day.

They have more tool and die makers in one town than we have in our whole country.
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But how much did it cost you to travel to China? ;) It’s kind of like saying the view out your airplane window is free, never mind the cost of owning an airplane. :)
 
Lachlan said:
But how much did it cost you to travel to China? ;) It’s kind of like saying the view out your airplane window is free, never mind the cost of owning an airplane. :)
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I was there already. I could have drawn it up and sent it via email, had them ship me the sample for approval by slow boat, approved the sample, had them made and sent on the next shipment, and still would have been quicker and cheaper than using the local machine shop.
 
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