Bayh, Visclosky Want to Prevent Magnequench Move to China

Washington, D.C. – Two northwest Indiana lawmakers are waging an effort to safeguard national security and protect Hoosier jobs. U.S. Senator Evan Bayh and Representative Peter Visclosky have called on President Bush to investigate the reported relocation of Magnequench, Inc.'s Valparaiso-based facility, to China. Bayh and Visclosky's efforts could save upwards of two-hundred jobs in the area, and would also prevent critical military-related materials from being manufactured abroad.

Magnequench manufactures rare-earth magnets that are used by the U.S. military in precision-guided "smart bomb" munitions. According to the Department of Defense, eighty percent of the rare-earth magnets used in production of "smart bombs" come from the Valparaiso facility. Because of the sensitive nature of the equipment at Magnequench, Bayh and Visclosky believe that the transfer of the facility to China threatens national security.

"The proposed relocation of Magnequench to China compromises both our national security and the northwest Indiana economy," Bayh said. "At such a challenging time in America, it is unacceptable to allow products that protect our country to be manufactured elsewhere. It would also take decent paying Hoosier jobs out of Indiana at a time when we should be doing everything we can to create more jobs and stimulate the economy."

"It is wrong to export approximately 200 Northwest Indiana jobs overseas anytime, but particularly when our economy is struggling. This move is an injustice to working men and women in Northwest Indiana, and it must not be allowed," Visclosky said. "In addition, we must not weaken our national security by sending the bulk of our rare-earth magnet production to a foreign country. Senator Bayh and I will fight this move, and I thank the Senator for working together with me on this important issue."

Bayh and Visclosky are asking President Bush to prevent the relocation under the Exon-Florio provision passed by Congress in 1988. The provision directed the Committee on Foreign Investment in the United States (CFIUS) to examine the potential national security implications of foreign investment and deemed that when national security is at risk, CFIUS has the authority to recommend actions to the President. In this case, action would be taken to stop the relocation of Magnequench's Valparaiso facility to China.

Bayh and Visclosky believe that the potential transfer of these operations to China raises new questions about maintaining both a significant source of domestic production of rare-earth magnets and U.S. technological leadership.