How Chinese Companies Trick Americans into Turning Over Key Technologies | Michael Sekora
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I was sitting in the office with the Under Secretary of Commerce for Technology, and we had representatives from Vice Senior President from Boeing, Grumman, all the major aerospace industry guys.
And I sat in that room and said, China is going to eat your lunch in aerospace.
They said, you're telling me a country that doesn't have indoor plumbing in 90% of the homes is going to eat our lunch in the marketplace.
And I said, yes, sir, they are.
They said, you're an idiot.
Everybody knows by classic MBA that the barriers to entry are too large.
What that means in MBA language is the amount of finances required to go into that industry is so large nobody else can do it.
Because the amount of money it takes to build an aerospace industry is massive.
You know, just the facilities are large, the testing and things like that.
I said, they're going to do it.
And we basically knew how they were doing it, which looks at a technology strategy.
From a technology strategy point of view, they don't go in one day and say, okay, we're going to build an airplane.
They go in and say, you know what?
We're going to come up, we're going to acquire the technology.
And we'll come back to the acquire.
This is China.
Right.
And say, we're going to build the little wingtips on the wings for the next plane for Boeing.
And we'll go to Boeing and say, we want to build the wingtips.
And Boeing will say, do you have the technology?
And usually China would say, nah, we don't have it.
Could you give it to us?
And they'll say, sure.
You got cheap labor.
We now cut our costs by 0.01%.
They got the wingtips.
Do a great job.
They deliver it at less cost than they said they were.
It's perfect.
Wingtips.
Boeing managers looking at going, geez, guess what?
We made more money this month.
I get a bonus.
Can you guys do the struts?
Yes, sir.
Give us the technology.
Here's the technology.
So what they do, and actually, I put together two graphics that showed them doing this with the platforms, the entire plane, and the engines.
And we showed, and we had the names of the organizations that were going in and going, this, getting that technology, doing this technology, this.
So what they do is they very slowly piecemeal it together.
Well, if we can do the wingtips, next week, you know, a couple of years later, we'll do the entire wing.
And we'll either cut your costs more, but we need the technology.