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Former Employee Stole Ford Secrets Worth $50 Million

Posted by Soulskill on from the yu-did-it dept.

chicksdaddy writes "A ten year veteran of US automaker Ford pleaded guilty in federal court on November 17 to charges that he stole company secrets, including design documents, valued at between $50 million and $100 million, and shared them with his new employer: the Chinese division of a US rival of Ford's. Xiang Dong ('Mike') Yu admitted to copying some 4,000 Ford Documents to an external hard drive, including design specifications for key components of Ford automobiles, after surreptitiously taking a job with a China-based competitor in 2006. Yu, who took a job for Beijing Automotive Company in 2008, was arrested during a stopover at Chicago in October, 2009. The FBI seized his Beijing Automotive-issued laptop, and an analysis found 41 stolen Ford specification documents on the hard drive. He faces five to six years in prison and a $150,000 fine (PDF)."

11 of 236 comments (clear)

  1. Wake up, people. by ScrewMaster · · Score: 5, Interesting

    valued at between $50 million and $100 million

    That's probably an inflated value. When companies get burned like this, they generally vastly overstate the value of the stolen goods.

    and shared them with his new employer: the Chinese division of a US rival of Ford's.

    Hello boys and girls. Can you say "tip of the iceberg?" I knew you could.

    He faces five to six years in prison and a $150,000 fine (PDF).

    Good. And before we judge if that seems too harsh a punishment, I would ask if anyone knows what the Chinese government would do to an American engineer who did the same thing to a Chinese company.

    --
    The higher the technology, the sharper that two-edged sword.
    1. Re:Wake up, people. by jms · · Score: 4, Interesting

      I suppose that by failing to elaborate on how they came up with the value, they invite speculation.

      Sometimes, when asked the value of a document, companies will give a figure that corresponds to the cost of producing that document. In other words, if you were to add up all the engineer-hours involved in designing a car, it might add up to $50-$100M. Since Ford is not deprived of access to their own design (because they still have copies of it), this does not represent $50-$100M losses to Ford. They could be saying that, by stealing the design, the Chinese company saved themselves $50-$100M in engineering costs, but that explanation isn't really complete, because the design was manufactured, so the Chinese company could easily buy one and reverse engineer it. So, by stealing the design, the Chinese company at the most saved themselves the cost of a full reverse-engineering job on the Ford car. This might still be a substantial figure. However, automobile manufacturers regularly buy each others products and reverse engineer them anyway, to keep track of what the competition is doing, so the Chinese auto company's engineers were probably already pretty familiar with the basic Ford design before they stole the documents. They probably had already done most of the reverse engineering. These documents let them fill in the gaps in their knowledge.

      This has damaged Ford to the extent that the design revealed trade secrets that the Chinese car company might not have been able to reverse engineer from existing cars. This might allow them to improve their cars to the extent that some number of people choose to buy Chinese cars instead of Fords. That is the real value of the stolen documents and might be worth $50-$100 million or more.

  2. Re:Why by toastar · · Score: 3, Interesting

    Are you real asking why is theft illegal?

  3. Pffft...amateur... by afabbro · · Score: 5, Interesting

    Small potatoes

    "Lopez was head of purchasing for GM and defected abruptly to VW in 1993. GM accused Lopez of masterminding the theft of more than 20 boxes of documents on research, manufacturing and sales. The world's largest international corporate espionage case officially ended in 1997, when VW admitted no wrongdoing but settled the civil suit by agreeing to pay GM $100 million in cash and spend $1 billion on GM parts over seven years.

    --
    Advice: on VPS providers
  4. Re:White Collar Vs Pilfering From Giants by jonsmirl · · Score: 2, Interesting

    It was $1.92M for 24 songs so $80,0000. Using the same ratio - $50M * 80,000 = $4 trillion. It seems fair. We should apply that judgement against China and take one of their provinces as settlement.

  5. Are US companies wise to trust in foreigners? by walterbyrd · · Score: 2, Interesting

    This story come right on the heals of that other slashdot story: "Malaysian Indicted After Hacking Federal Reserve."

    http://yro.slashdot.org/story/10/11/22/1446256/Malaysian-Indicted-After-Hacking-Federal-Reserve

    I guess US companies are saving a bundle by putting so much trust in foreign nationals.

    These two stories are hardly unique.

    Sure, offshoring jobs has ruined the careers, and lives, of countless Americans, but look at the money that the US companies are saving!

  6. Industrial Espionage by geoffrobinson · · Score: 2, Interesting

    When I was working at a defense contractor, they would tell us in training about industrial espionage being a huge problem. And not just by other companies.

    I would surmise that most American companies are blissfully unaware about the threat they face.

    --
    Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
  7. old news by Malenx · · Score: 2, Interesting

    This is how Chinese companies generally innovate, they steal the information so they don't have to invent it themselves. We were constantly trained to keep eyes out for people stealing confidential and classified information when I worked on some Air-force Systems. Even back then, we were told the greatest threat was people being bought out by the Chinese, the US government were already dealing with tons of them trying to steal military technology. They are so far behind, they would generally do anything to try and close the gap, since they couldn't invent it quick enough themselves.

  8. You can bet there are many more Chinese spys - by HW_Hack · · Score: 3, Interesting

    - hard at work stealing our information and creative processes. People (that includes politicians + CEOs) just tend to forget that China is not some quaint country that has rules of law and enforces those laws. This is a state run government and economy - anything goes to enrich the state and acrue power. We've already sent most of our production machines over there - now they are coming back to collect any intellectual property they can grab as well.

    They are starting to eat our lunch and will shortly just take our lunch money

    And contrary to some comments -- Ford makes some damn fine vehicles -- I dearly miss my 2001 F-150 4x4 - great truck

    --
    Its not the years, its the mileage .....
  9. Let me put it this way... by woolio · · Score: 2, Interesting

    Let me put it this way:

    I work in a high technology company that makes a lot of software.

    If our source code got into the hands of the competition, it would set them back a few decades.

    They would run into so many bugs without knowing the 'workarounds' (or just flat out what to avoid), they wouldn't know what hit them.

    Considering the crap that American car companies design, I think the Chinese are probably just trying to figure out what NOT to do.

  10. Was this an H1-B employee by any chance? by dcavanaugh · · Score: 2, Interesting

    Returning home, outside US jurisdiction? Just wondering.

    Gotta love those non-compete agreements. The employer can harass you to the end of the earth for simply trying to get a job after being laid off (even if you have no access to "secrets" at all). Meanwhile, if you take a boatload of top-secret material offshore, all they can do is shrug their shoulders and have the legal department send a few nastygrams.