Center For Security Policy Applauds Ford Decision To Pull Out Of Soviet Joint Venture

The Center for Security Policy today applauded the decision by Ford Motor Company to withdraw from a multibillion dollar joint venture in the Soviet Union that raised serious national security concerns. "Ford Motor Company is to be commended for its sensitivity to the vital national security interests at stake in this joint venture," the Center’s Director, Frank J. Gaffney, Jr., said today. "The production of the Ford Scorpio automobile in the USSR could have given the Soviets leading-edge manufacturing process technologies with obvious applications for military production."

Until it was scrapped at the last moment, the Ford joint venture — involving a reported $10 billion investment — was set to manufacture the sophisticated Scorpio and components. The complex, to be located near the Gorkovsky Automobilnyi Zavod factory (built with Ford assistance in the 1930s), was to produce 150,000 cars annually as well as 100,000 sets of engines and transmissions.

"The dangers inherent in the transfer to the Soviet Union of automated production know-how involving, for example, computers, robotics, or "CAD-CAM" technologies are among the most serious of Western technology security concerns," stated Gaffney.

In early February, the Center wrote to every Board member of the Ford Motor Company cautioning against this joint venture. The Scorpio project was also the subject of congressional scrutiny in testimony provided by the Center on February 28th before the Technology Transfer Caucus.

The Ford project was slated to be part of the American Trade Consortium (ATC) trade agreement. Regrettably, the six other American firms comprising the ATC (Chevron Corp., Eastman Kodak Co., Johnson & Johnson, RJR Nabisco Inc., Archer-Daniels-Midland Co., and Mercator Corp) did not follow Ford’s lead; they today signed the umbrella accord with organizations of the Soviet government. This agreement will facilitate technology transfers to the USSR and enhance Soviet potential to compete for Western export markets.

According to Roger W. Robinson, Jr., former senior director for international economic affairs at the National Security Council and a member of the Center’s Board of Advisors, "The last-minute withdrawal of the estimated $10 billion Ford joint venture was a greater blow to the Consortium’s overall gameplan than the ATC is probably willing to acknowledge. This major reversal puts Chevron squarely in the lead of the American Trade Consortium as the ‘cash cow’ on which the other ventures depend for profit repatriation."

Commenting on Chevron’s role in generating hard currency for the Soviet Union, Gaffney said: "It would appear that Chevron is fast becoming communism’s favorite oil company. Chevron’s activities in Angola — which run counter to U.S. foreign policy objectives — do not inspire confidence in this company’s judgment or its concern about the national interest."

Gaffney announced that the Center for Security Policy is assessing the adverse strategic implications of Chevron’s proposed expansion of the Soviet Union’s oil and gas industry in the context of the ATC deal. He encouraged the Bush Administration and Congress to do likewise: "With oil and gas providing some two-thirds of Soviet annual hard currency earnings, Chevron’s drilling for dollars in the USSR could ultimately fund activities inimical to Western interests."