Feds Bust Chinese Firm's Hybrid Car Data Heist

coondoggie writes "An FBI investigation has led a Michigan couple to be charged with stealing hybrid car information from GM to use in a Chinese auto outfit. A federal indictment charged Yu Qin, aka Yu Chin, 49, and his wife, Shanshan Du, aka Shannon Du, 51, of Troy, Michigan with conspiracy to possess trade secrets without authorization, unauthorized possession of trade secrets, and wire fraud. One of the individuals was also charged with obstruction of justice, said Barbara McQuade, United States Attorney for the Eastern District of Michigan in a statement. GM estimates that the value of the stolen documents is over $40 million."

Comments

Yu

[Hatta]

Yu got served.

Re:Yu

[Reilaos]

Du's were paid.

Re:Yu

[WrongSizeGlass]

So, if I read this correctly, Shannon Du Yu Chin? Sorry, but someone had to say it.

Re:Yu

[Anonymous Coward]

Pepul are under arrest.

I don't know what we're doing.

Re:Yu

[russotto]

So, if I read this correctly, Shannon Du Yu Chin? Sorry, but someone had to say it.

Too bad she wasn't getting the information that way... then the investigators would have asked the others involved... did shi du yu?

Re:Yu

[hannson]

Trick me once, shame one me.... Trick me twice, shame on Yu!

Re:Yu

[RMingin]

No, no, no.

Shannon Du, Yu Chin.

Did Du do Yu?

Re:Yu

[tchdab1]

Apparently Hu was on first.

Oh noes

[mark72005]

Now theirs will crash just like ours!

Re:Oh noes

[YrWrstNtmr]

No, they would be busting the US (and other entities) of their segment of the Chinese and Asian markets.

For instance, Buick is a huge brand in China

Re:Oh noes

[Anonymous Coward]

I assume that you are unaware of how important the Chinese market is for GM. Here is a recent article about it: China sales overtake U.S. for first time. Chinese car companies don't have to come over here, they can hurt GM at home.

And $40 million dollars doesn't seem unreasonable. That's only about 2000 vehicles at average US prices.

Re:Oh noes

[MobyDisk]

What was the last Chinese Car Manufacturer that even penetrated the US market to damage the sales of US companies?

Consider the exact opposite situation: General Motors has a significant presence in China. These documents could damage General Motors operations in China. And that might be worth $40 million.

Re:Oh noes

[TheEyes]

And we're idiots for doing it. The Chinese have no intention of letting American companies profit from their investments in China. Now that they've dragged themselves out of the impoverished, subsistence farming society that they've been stuck in as recently as the 1970s, they're going to do their damndest to ensure that the only people who profit from the newly emergent Chinese middle class are Chinese businesses.

It's already started. Look at the recent news: Google getting kicked out of China (inch by inch, but it's happening) in favor of Baidu; Westerners being arrested on trumped-up or even outright faked charges; Chinese hackers stealing billions of dollars worth of company secrets.

"Goodbye, American businesses! Hope the door hitting you on the way out didn't hurt too much! Don't worry about the factories or newly educated workforce you created in this country; we'll take good care of them, creating products to compete with you!"

Re:Oh noes

[sesshomaru]

Coincidentally, I saw this today, Who Killed the Federal Stimulus?:

Also, please note in the second and third paragraphs how they urge congress to kill the "Buy American" clause in the federal economic stimulus plan.

They were quite successful in effectively killing it, although the media, including the Bretton Woods Committee, reported that it was simply "watered down." (More on that later.) And who is the Bretton Woods Committee?

Officially, they are an economics group promoting widespread knowledge of the IMF and World Bank. In actuality, they are the American-based, international lobbyist group for the ultra-rich. (Please note the emphasis on "international.")

Re:Oh noes

[Hognoxious]

For instance, Buick is a huge brand in China

But for some strange reason, Chevloret, Rincorn and Chlysrel aren't.

Re:Oh noes

[dylan_-]

The "L" and "R" sounds in Chinese are different than in English (or don't exist?), so Chinese people have difficulty pronouncing English words with those sounds in. That's the joke (look at the names he listed again).

English speakers have a similar difficulty with Scottish Gaelic words, because Gaelic has 3 different "L" sounds and 3 different "R" sounds (used to have 4, but one has been dropped). They get a bit tongue-tied when trying to pronounce these words.

smog

[spazdor]

Way to go, FBI. We're already trying our best to fight the Chinese government's dragging their heels on environmental reform. Now we want them to do it without stealing any green technologies?

Re:smog

[linzeal]

They publish 6x the amount of research papers we do and spend 20% more on research. How come we aren't stealing from them?

Re:smog

[sesshomaru]

What would we do with the stuff we steal? Send it back to China to be built in a Chinese factory?

Re:smog

[blackraven14250]

They have 6x the number of research papers because they give grants to the people who write the most papers without regard for quality. The result is for every legitimate paper, there's 100 that are outright wrong, plagarized (we know their ideas about sharing information), or don't have any original research.

Re:smog

[delinear]

On a serious note, green technologies are one of the few things the West are doing better than the East right now. We can't sell them manufactured goods, they've already cornered that market, and they're at least as close if not edging ahead on banking and perhaps even IT. Anything that relies on IP is a non-starter. Do you didn't think western governments were suddenly supporting green technologies because it's the right thing to do, or because it's one of the few things we have of value right now (not to mention it stifles their industrial growth if we can force them down the same path)?

Competitive advantage for the USA?

[Anonymous Coward]

Umm, don't we want China to steal all the GM tech they possibly can, so they won't be competitive either?

just think of it as "proactive outsourcing"

[Anonymous Coward]

sooner or later this "secret" would have ended up at the chinese manufacturing plant.

Must have been for export

[MichaelSmith]

Hybrids are a bit of a joke, efficiency wise so I have my doubts about a domestic market for them in China. But Chinese car makers could compete with the Japanese, etc in the export market. But you'd expect that they would get found out. Maybe the immediate objective was to sell a complete system within china and let the buyer take the rap for the stolen tech.

Re:Must have been for export

[CaptainJeff]

Bit of a joke? What exactly would that be?

http://www.usatoday.com/money/autos/environment/2008-05-11-hybrids-gas-prices_N.htm

I've owned a 2006 Civic Hybrid for the past four years and calculate the savings based on my driving habits and the cost of gas every year. It recouped its cost over a year ago and has currently saved me well over $1000. It also pollutes less. So...why is this a joke?

Re:Must have been for export

[Anonymous Coward]

Because if you look at the European market, you'll see a dozen models that get as good or better mileage than any hybrid available in the US.

Re:Must have been for export

[NeutronCowboy]

Ah yes - the Dust to Dust report by marketing agency CNW. Debunked in many places, one of them here: http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf

Re:Must have been for export

[TooMuchToDo]

*voice of Kevin Spacey villain in Superman*
WRONG!

http://www.toyota.co.jp/en/environment/recycle/battery/index.html

The "Big Honkin' Battery" you refer to is fully recycled. Perhaps research a bit before spouting off?

Re:Must have been for export

[XanC]

...and that means that the manufacture and disposal slash recycling are processes that use no nasty chemicals? I really doubt it.

But sure, as long as you can say the word "recycling" that means everything's okay, regardless of how efficient or clean the process is.

Re:Must have been for export

[Skuld-Chan]

Because it was a 30,000 dollar car, and I can but a ton of gas for 15,000 dollars.

Also - my 04 Civic Coupe gets 45+ miles per gallon the freeway.

Re:Must have been for export

[TooMuchToDo]

Right. Because manufacturing isn't dirty. And construction isn't dirty. And transportation isn't dirty. Newsflash: You can have processes that aren't that environmentally friendly, but with proper toxin containment and material handling procedures, still operate in an environmentally responsible way.

Re:Must have been for export

[Anonymous Coward]

Hybrids are a bit of a joke, efficiency wise so I have my doubts about a domestic market for them in China.

Hybrids are pretty damn impressively efficient if applied to a medium-small vehicle used mainly in city and near-by suburbs. The joke is when you try to apply the same concept to a huge SUV. Or when the majority of your driving is out of the cities. One size does not fit all.

But you'd expect that they would get found out.

How? I'll remind a lot of readers here that these "secrets" are not always about the some new automotive technology. Manufacturers have huge teams of engineers that tackle many manufacturing processes as well. How do you increase the reliability of the manufacturing processes? How do you build more cars in the same plant in less time? How do you paint more cars with less wasted water? How do you automate lubricant application? How can you be sure the engine is ready to run at 8,000RPM right off the line without "breaking-in"? This is just the tip of the ice berg of what kind of "secrets" are out there, that would not be obvious just by looking at the car.

Re:Must have been for export

[h4rr4r]

And what would the mileage be like in the same car with a small turbo diesel?

Re:Must have been for export

[thePowerOfGrayskull]

Bit of a joke? What exactly would that be? http://www.usatoday.com/money/autos/environment/2008-05-11-hybrids-gas-prices_N.htm I've owned a 2006 Civic Hybrid for the past four years and calculate the savings based on my driving habits and the cost of gas every year. It recouped its cost over a year ago and has currently saved me well over $1000. It also pollutes less. So...why is this a joke?

Except if you're calculating the savings based on cost of gas and driving habits alone, you're missing a major part of the equation. Did you include the $23000 it cost you to buy a new car, as opposed to continuing to maintain/repair and feed gas into your old one? Or if this was your very first car, did you do the calculations for getting a cheap used car vs new car, and take the price difference into account?

If you absolutely had to get a new car, did you look a the 2006 Civic -- 10-12k cheaper than the Hybrid, with gas mileage that's not appreciably worse? Did you take into account that 10-12k price difference in your calculations?

When you look at the miles you drive without taking into account the base cost, you're only seeing part of the picture needed to determine if you recouped your cost. And unless you drive a 40-50k miles a year, your costs have not been recouped. (I did a breakdown of the math in a comment some time back, and showed that it would take gas in the range of $8-9/gallon to recoup costs over a five year period at 12k a year; or $5-6/gallon to recoup them if you assumed you had to buy a new car and calculated based on price difference.)

Re:Must have been for export

[Idbar]

He probably meant the GM hybrids, such as the Yukon, Escalade, Silverado and Tahoe. Now, that's what I think is a joke. :)

Re:Must have been for export

[RzUpAnmsCwrds]

Anyone who compares the cost of buying a new hybrid to keeping an older car is a moron.

Guess what? It's almost ALWAYS cheaper to keep an old car that's serviceable. Gas is too cheap and cars are too expensive. That applies to hybrids and non-hybrids alike.

People still buy new cars. There are a lot of reasons for that.

Moreover, the same idiots never consider the fact that there are used hybrids. My 2007 Prius with 45000 miles on it cost $13500, which was only about $2000 more than a 2007 Corolla.

Your figure of "10-12k cheaper than the Hybrid" for the Civic is totally pulled out of your ass too. The cheapest 4-door Civic in 2006 was $14760 (GX), the Hybrid was $22150 for a difference of $7390. Of course, the GX is missing a lot of things that the Hybrid has standard - like an automatic transmission, air conditioning, and power windows. If you compare the more similarly equipped EX, which was $18460, the difference was only $3690.

When you make up your numbers, compare cars that aren't comparable, ignore the used hybrid market, or compare a used vehicle to a new hybrid, it's very easy to make hybrids look much more expensive than they are. It's also misleading and dishonest.

Re:Must have been for export

[AK Marc]

Gas mileage is horrible in small turbo diesels. Have you ever tried running them on gas? Terrible.

Re:Must have been for export

[drinkypoo]

Bit of a joke? What exactly would that be?

The joke is that hybrids get no more mileage than TDIs, but have a higher initial energy cost of production, and a higher initial monetary cost, AND a higher recycling cost, while their fuel (gasoline) takes more energy to produce than diesel fuel. If non-plug-in gas hybrids are the answer then the question was fucking stupid. No matter how you slice it, a hybrid is NOT the most efficient solution readily available on the market today.

Re:Must have been for export

[drinkypoo]

Ah yes - the Dust to Dust report by marketing agency CNW. Debunked in many places, one of them here: http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf

The debunking needs a debunking, not because the "Dust to Dust" report isn't based on false assumptions, but because it makes unfounded statements. Nobody is really clear on what recycling of hybrids will really be like en masse because their recycling has only just begun. However it is simply true that it takes more energy to produce or recycle a hybrid than a vehicle without the electric motive system, and they get no better mileage than a TDI. They have nominally better emissions than a modern turbodiesel, but it takes more energy to produce gasoline than diesel in the first place, and energy spent at a refinery produces industrial waste, mostly atmospheric pollution. We don't count the amount of energy IN the fuel because we didn't have to store it there, but it takes something like 40% less energy to make diesel fuel than it does to make gasoline. A certain amount of both are produced in the cracking process but different processes can be used to produce different proportions of various grades of petroleum.

I *would* expect a diesel Hummer to last vastly more miles than a Prius. But since none of these companies will really give us the figures, we are all basically left making shit up.

Not Patents

[Doc Ruby]

This story is tagged "patents", but it's not about patents. The copied data was a trade secret. Patents are by definition publicly published information. Trade secrets are different. Patents are easily abusable government monopolies that often violate free speech. Actual industrial secrets are essential to remaining competitive, as this case demonstrates. It's cheaper, faster and less risky for a Chinese (or any other) corporation to copy the data that GM (or anyone else) produced over a period of time and at a significant cost, than it is for that competitor to produce its own. The secret was violated by violating agreements and other deception.

Re:Not Patents

[nedlohs]

How do patents ever violate free speech?

You can talk about them, copy them, repeat them, etc. You just can't do* what is described without permission from the patent holder.

* the definition of "do" varies by jurisdiction.

Re:Not Patents

[k8to]

If that were true, there would be no issues with distributing and selling patented software, only running it.

Re:I dont understand....

[Favonius Cornelius]

The Japanese arent stupid enough to let it happen. Only in America do we open our doors to anyone and give everything away.

Values

[Wowsers]

"GM estimates that the value of the stolen documents is over $40 million."

Is that using the same method of value calculation that the RIAA / MPAA use?

Re:I dont understand....

[Local ID10T]

they flew all the way from China to America to steal hybrid plans.

They could have just gone to Japan and stole from Toyota, much closer to home....

In America, hiring Chinese people is not unusual. In Japan, it is. Americans view racism as a very bad thing, mostly due to our history of slavery. Japan is not the USA.

Re:WHAT? GM MADE HYBRIDS?

[synthesizerpatel]

Here, let me google that for you.

http://www.gm.com/vehicles/hybrids-and-electric/hybrids/

Why not just wait...

[GumphMaster]

Risking jail time for a 'trade secret' (which seems to carry more weight than national secrets that might be protecting lives) seems to somewhat pointless. Why not just wait until GM implements whatever super-secret-mega-tech in a vehicle and then reverse engineer it? Once GM 'publish' it in this form without patent protection it seems to me it is fair game.

Negative on that, sonny

[sgt_doom]

Nope, In America, hiring anyone WHO ISN'T an H-1B, H-2B, H-2C, O-1, L-1, P-1, P-2, P-3, etc., etc., etc., or any other foreign visa worker, is UNUSUAL.

Hiring an actual American worker .....now THAT'S unusual!!!!

Be sure to send all your money to Wall Street...

This is a real problem.. details below.

[Anonymous Coward]

You think the Russians had spies? They're nothing compared to the Chinese.

This is not individual actors out for their own gain, this is a concerted effort over the last 30 years to get China on par with the latest tech, by hook or crook.

While there's nothing wrong with that per-se, the thing that everyone seems to be ignoring is that China is not an open society and all this maneuvering is to get more Geopolitical Power for the Communist Party. A non-representative, totalitarian regime bent on imposing its will across the region and the world. People assume once China is "caught up" they'll follow international rules and "play fair". This is a fairy tale, they are out to dominate.. and will take whatever steps necessary to make sure that happens, economic or military. Their own population is just a tool towards this endgame.

Ever wonder how Pakistan got nukes? China.

Wonder how North Korea got nukes through Pakistan? China made the intro.
That way, their hands were clean but they were able to create a permanent buffer zone on the Korean peninsula and pre-empt any German equivalent of reunification which would put a functioning democracy on their doorstep.

China is playing a dangerous game and people who think prosperity will make them fat and happy are completely mistaken.. the economy is a tool for them both to placate their population and to wield as a weapon on the international stage.

Re:This is a real problem.. details below.

[Renraku]

If I recall correctly we busted the Russians good. They stole some oil pipeline control software, and we knew they were going to steal it. So we wrote in some malware and a few months later, boom, one of their pipelines explodes because of said malware. The Japanese let the Chinese steal a design for bad capacitors which ended up in everyone's electronics. Perhaps we should let them have a design for a car who's doors weld themselves closed and then the engine catches fire.

Contents of documents ...

[Kaz Kylheku]

Probably just a list of what "Made in China" parts to use from what supplier and how to put them together. :)

Ahem!

[Chicken_Kickers]

Asians eh? Warning, you prejudice might be showing. I'm an "Asian" but I am not offended by your comment. This is because, until very recently in human history, copying what others created is the norm. Be it in language, music, food, vehicles or weapons. You after all got the Chinese to thank for gunpowder, among other things. I don't recall Europeans paying the Chinese any royalties on that.

Still trying to wrap my head around it.

[Lando]

So, they are being charged with a total of 40 years jail time and $750K in fines for information worth 40 million?

The 40 years is definitely nasty, but looking at the 750K, I've gotta think.. that's like 3 dollars worth of mp3's if they had them online. Seems like GM would get a better deal by getting them charged with copyright infringement per page stolen.