Auto Service World
News   February 2, 2005   by Auto Service World

FBI Charges U.S. Executives Stole Secrets for Chinese

The U.S. Federal Bureau of Investigation has arrested a former Metaldyne vice president of sales and another ex-employee, accusing them of leaking trade secrets for a new truck engine to a Chinese company.
The FBI reported that a Chinese manufacturing company, Chongqing Huafu Industry Co., obtained trade secrets from Metaldyne Corp. in an effort to undercut the price the supplier charges for a sophisticated connecting rod used in truck engines, the FBI said.
Anne Lockwood, a former vice president of sales at Metaldyne and Fuping Liu, a company engineer, were charged Tuesday with conspiracy to steal and transmit trade secrets.
If convicted, both defendants face a potential prison sentence of 10 years and a fine of up to $250,000.
The arrests come amid heightened concern over industrial espionage and the theft of intellectual property by firms in China, where manufacturing is booming with limited oversight. The United States has prosecuted several cases involving theft of trade secrets under the Economic Espionage Act of 1996.
Lockwood, 52, joined Taylor-based Masco Industries in 1989. Masco became one of three companies that were combined in 2000 to form Metaldyne. She became vice president of sales for Metaldyne in October 2003.
Lockwood, who was arrested Tuesday at her Rochester Hills, Mich., home, was released on a $10,000 unsecured personal bond by U.S. Magistrate Judge Mona Majzoub and ordered to surrender her passport.
Lockwood’s lawyer, Mark Kriger, declined to comment. She didn’t return a message left at her home.
Liu, 41, a U.S. citizen living in Shanghai, was arrested at a hotel near Detroit Metro Airport on Tuesday. The FBI said he was scheduled to return to China today.
He joined Masco in 1998, working at its North Vernon, Ind., facility before he joined the company’s Shanghai office. He left Metaldyne in April 2004.
After leaving Metaldyne, he became director of technology for the Shanghai office of GKN Sinter Metals, a competitor of Metaldyne based in Auburn Hills.
Liu also is accused of stealing confidential information from GKN and passing it along to Lockwood.
According to the affidavit, Metaldyne spent more than a decade and millions of dollars developing special metal connecting rods for large truck engines built by Chicago-based International Truck and Engine, a unit of Navistar International.
The rods generate millions in sales for the Metaldyne, the FBI said.
Metaldyne says although some trade secrets were compromised — including the blueprints for a prototype for a high-tech 2007 truck engine — it doesn’t believe the Chinese company will be able to duplicate the rods, according to the affidavit and company spokeswoman Myra Moreland.
“We’re not aware of any copycat products.” Moreland said
The company is currently producing a new rod, which is in the prototype phase, that will go into production in June 2006.
The rods are made at the company’s North Vernon, Ind., plant — using special presses made by Germany-based Mueller-Weingarten and furnaces designed by Wixom-based Pacific Industrial Furnace Company. GKN is the only other company that produces comparable connecting rods.

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