Auto engineer awaits charges in Chicago

By Xu Donghuan

In response to an indictment Thursday from the US Justice Department of a former Chinese engineer at Ford Motor Co, arrested on charges of stealing trade secrets, the Beijing Automotive Industry Holding Corporation (BAIC), the current employer of the accused, said Monday that he was arrested while on personal leave in the US.

In a press release, BAIC, China's fifth-largest automaker, said the employee, Yu Xiangdong, had worked in the company's auto-research division for 11 months before heading for a personal trip to the US in mid-October.

The statement said that Yu, who is on a three-year contract with BAIC, is involved in the company's Computer-Aided Engineering (CAE) and auto-body design. Yu left Ford in early 2007 and was employed by Foxconn until October 2008.

The State-run company, whose vehicles include light-duty trucks and traveling vans, said in the statement, "BAIC respects intellectual property rights, stresses original research in the development of its brands and exhibited three concept auto designs during the Beijing International Auto Show in April 2008."

On Wednesday, US authorities arrested Yu, who worked as a product engineer at Ford from 1997 to early 2007, on charges of attempted theft of Ford's trade secrets and using them to get work with Chinese automotive companies, according to a report from Reuters on Monday.

Yu is accused of copying designs, including Ford's engine and transmission mounting subsystem, front and rear side door structure, steering-wheel assembly and instrument panel and console subsystem, according to the US indictment, Reuters said.

A report from the Associated Press on Thursday said that the 47-year-old Chinese engineer, also known as Mike Yu, who copied thousands of electronic documents before quitting Ford for a new job in China, was arrested at Chicago's O'Hare International Airport en route to China.

The FBI, which is in charge of the investigation, said it will continue to "aggressively pursue these cases," as it considers theft of trade secrets "a threat to national security."

"Michigan, as well as the rest of the United States, is significantly impacted by the auto industry," The Detroit News quoted FBI chief Andrew Arena as saying. "And investigating allegations involving theft of trade secrets is a priority for the FBI."

Yu is in custody in Chicago awaiting a detention hearing Tuesday.

Li Shuguang, a professor with the China University of Politics and Law, said the US may be too sensitive to such cases, and often make non-secret technologies secrets.

The maximum penalty for the theft-related charges is 10 years in prison.

He Sha, a Chinese lawyer on international law, now based at the University of Missouri Kansas City (UMKC), told the Global Times that "the case remains unclear as to whether these files copied from the Ford Company are confidential information or information known to most people in the industry."

He explained that, as a rule, staff working at the management level or in the key technology division are required to sign a confidentiality agreement that requires them to keep core techniques a secret for a lifetime, and a non-competition agreement that demands the person not work in the same industry as the former company for an agreed number of years when they join the company.

"These agreements are designed to stop employees from going to work for another employer," He said. "Whether Yu and his former employer, Ford, signed the confidential agreement, is key to the case. "

The way Yu used to gain access to the company's computer is also vital to the case.

"If he gained access to the information bypassing the company's confidentiality restrictions, by inputting some codes for instance, he may be suspected of conducting theft," He said.

According to a poll on Hong Kong-based ifeng.com, more than 10,900 people believed that Yu is a victim of the heating-up trade war between China and the US, while more than 4,200 Web users believed that Yu deserves it, as some say Chinese people lack credibility.

Yu, who is from Jiangsu Province, went to the US in 1985 and gained his PhD at the University of Illinois. Yu was active in the business circles in the Chinese community in Detroit, according to ifeng.com.

This year, BAIC failed in its bid to take over both of General Motor's European branches of Opel and has been linked with the sale of Ford's Swedish subsidiary Volvo.

BAIC said it would continue to closely follow the development of the case.

This is not the first case of legal conflict over spying between domestic and foreign automobile makers.

In June, Chinese carmaker Great Wall Motors filed a lawsuit in Shijiazhuang, Hebei Province, claiming that it had strong evidence to prove its Italian counterpart Fiat once went to its R&D base privately and secretly took some photos of Great Wall Motors' first concept car, called GWPERI.

It appeared to be a retaliation against Fiat's lawsuit in 2007, when Fiat accused Great Wall's GWPERI of infringing upon the Italian carmaker's design of the Panda car. Great Wall Motors won that suit.

Liang Chen and Chen Xiaomin contributed to this story

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