Former Employee Stole Ford Secrets Worth $50 Million

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)."

Comments

Wake up, people.

[ScrewMaster]

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.

Re:Wake up, people.

[jms]

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.

Pffft...amateur...

[afabbro]

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.