Monday, July 6, 2015

Piper PA-22-135, N8195C: Fatal accident occurred July 02, 2015 in Carey, Blaine County, Idaho

Neil “Spud” Wright MacNichol 





The National Transportation Safety Board did not travel to the scene of this accident.
Additional Participating Entities:
Federal Aviation Administration / Flight Standards District Office; Boise, Idaho
Piper Aircraft Corporation; Lakeland, Florida
Lycoming Engines; Williamsport, Pennsylvania

Aviation Accident Final Report - National Transportation Safety Board: https://app.ntsb.gov/pdf

Investigation Docket - National Transportation Safety Board: https://dms.ntsb.gov/pubdms

Aviation Accident Data Summary - National Transportation Safety Board: https://app.ntsb.gov/pdf

Neil W. MacNichol: http://registry.faa.gov/N8195C



NTSB Identification: WPR15FA206
14 CFR Part 91: General Aviation
Accident occurred Thursday, July 02, 2015 in Carey, ID
Probable Cause Approval Date: 08/09/2017
Aircraft: PIPER PA 22-135, registration: N8195C
Injuries: 1 Fatal.

NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.

The commercial pilot stopped at an intermediate airport during a cross-country personal flight, and added 22 gallons of fuel to the airplane. The family reported the airplane overdue, and the Federal Aviation Administration (FAA) issued an alert notice (ALNOT). The wreckage was located the following day.

On site examination by FAA inspectors indicated that the airplane was intact when it hit the ground in a nose low attitude with a rotational component.

The toxicology report contained findings for ethanol detected in the lung, heart, and blood. N-propanol was detected in heart, lung, and blood. The report noted putrefaction. The NTSB's medical officer noted that ethanol is the type of alcohol present in beer, wine, and liquor, and can cause impairment at low doses. Generally, the rapid distribution of ethanol throughout the body after ingestion leads to similar levels in different tissues. A small amount of ethanol can be produced in tissues by microbial action post mortem, often in conjunction with other alcohols such as N-propanol, acetone, and methanol. With the information available, it was not possible to determine how much, if any, of the identified ethanol was from ingestion.

Examination of the wreckage revealed no anomalies that would have precluded normal operation of the airframe or engine.

The National Transportation Safety Board determines the probable cause(s) of this accident as follows:
Undetermined because examination of the airplane wreckage did not reveal any anomalies that would have precluded normal operation.

HISTORY OF FLIGHT

On July 2, 2015, at an undetermined time, a Piper PA22-135 airplane, N8195C, collided with terrain near Carey, Idaho. The commercial pilot sustained fatal injuries, and the airplane was destroyed. The pilot/owner was operating the airplane as a 14 Code of Federal Regulations Part 91 personal flight. The flight departed Malad City Airport (MLD), Malad City, Idaho, about 1105 mountain daylight time with a planned destination of Stanley, Idaho. Visual meteorological conditions prevailed, and no flight plan had been filed.

The pilot originated the flight from the Canyonlands Field Airport (CNY), Moab, Utah; he then stopped at MLD, and added 22 gallons of fuel to the airplane.

A SPOT device, which is a handheld GPS tracking device that uses a satellite network enabling text messaging and GPS tracking services, was present on the airplane. Records from the satellite messaging provider contained four data points on July 2, including a test point at 0814:57 MDT was near CNY; a test point at 0959:11 about 23 nautical miles (nm) east of Ogden, Utah; a test point at 1046:14 was in the ramp area of MLD; and a final test point at 1214:36 about 13 nm southwest of the wreckage location.

An iPhone 5c that was found in the wreckage was examined. The pilot sent a text message at 1122:07 indicating his estimated time of arrival at Stanley would be 2 hours later. When the pilot did not arrive in Stanley when he was expected, the family reported the airplane overdue, and the Federal Aviation Administration (FAA) issued an alert notice at 1907. The Civil Air Patrol located the wreckage at 1018 on July 3.

PERSONNEL INFORMATION

AIRCRAFT INFORMATION

METEOROLOGICAL CONDITIONS

WRECKAGE AND IMPACT INFORMATION

The first identified point of contact was a principal impact crater (PIC) that was several feet in diameter with narrow ground scars extending in opposite directions from the center. The propeller was separated from the engine, and was partially buried in the PIC. A lens cap cover and red lens fragments were found at the end of the narrow ground scar farthest from the main wreckage. The main wreckage was upright, about 50 ft away from the PIC, and oriented perpendicular to the narrow ground scars with the nose pointing toward the PIC. Due to the condition of the wreckage, FAA inspectors were unable to establish flight control continuity.

There was a black liquid stain that led to the oil cooler.

The engine was under the cabin area, which was severely crushed and deformed.

The right wing remained in its position, but had sustained heavy aft crush damage.

The left wing had rotated about 70° clockwise from its position.

The airframe had buckled 90° down immediately forward of the leading edge of the vertical stabilizer, and twisted 90° counterclockwise. The trailing edges of the left elevator and rudder were on the ground; the outboard half of the right elevator and horizontal stabilizer were above the right wing. The examination of the airframe and engine revealed no anomalies that would have precluded normal operation.

MEDICAL AND PATHOLOGICAL INFORMATION

The Blaine County Coroner conducted an autopsy of the pilot, and the cause of death was reported as blunt force trauma.

Toxicology testing of the specimens from the pilot by the FAA's Bioaeronautical Science's Research Laboratory were negative for carbon monoxide and tested drugs.

The testing detected 64 (mg/dL, mg/hg) ethanol in lung, 62 (mg/dL, mg/hg) ethanol in heart, and 61 (mg/dL, mg/hg) ethanol in blood. N-propanol was detected in heart, lung, and blood. The report noted that putrefaction of the specimens had occurred.

Ethanol is the type of alcohol present in beer, wine, and liquor, and can cause impairment at low doses. Generally, the rapid distribution of ethanol throughout the body after ingestion leads to similar levels in different tissues. A small amount of ethanol can be produced in tissues by postmortem microbial action, often in conjunction with other alcohols such as N-propanol, acetone, and methanol.

NTSB Identification: WPR15FA206
14 CFR Part 91: General Aviation
Accident occurred Thursday, July 02, 2015 in Carey, ID
Aircraft: PIPER PA 22-135, registration: N8195C
Injuries: 1 Fatal.

This is preliminary information, subject to change, and may contain errors. Any errors in this report will be corrected when the final report has been completed. NTSB investigators either traveled in support of this investigation or conducted a significant amount of investigative work without any travel, and used data obtained from various sources to prepare this aircraft accident report.


On July 2, 2015, at an undetermined time, a Piper PA22-135, N8195C, collided with terrain near Carey, Idaho. The pilot was operating the airplane under the provisions of Title 14 Code of Federal Regulations (CFR) Part 91. The commercial pilot sustained fatal injuries. The airplane was destroyed during the accident sequence. The cross-country personal flight departed Moab, Utah, at 1726 mountain daylight time with a planned destination of Stanley, Idaho. Visual meteorological conditions (VMC) prevailed, and no flight plan had been filed.


The family reported the airplane overdue, and the Federal Aviation Administration (FAA) issued an alert notice (ALNOT) at 1907 MDT.


The Civil Air Patrol informed the FAA at 1018 MDT on July 3 that they had located the wreckage.


FAA inspectors from the Boise, Idaho, Flight Standards District Office examined the wreckage on scene. They reported that the propeller had separated in the principal impact crater; the main wreckage was less than 50 feet away.


The wreckage was recovered to a secure location for a follow-up examination.

Neil Wright MacNichol, October 10, 1993 – July 2, 2015 
 
Neil Wright MacNichol, 21, a native of McCall, Idaho and a resident of Moab, passed away on July 2, 2015, from injuries sustained in an aircraft accident that occurred approximately 40 miles southeast of Sun Valley, Idaho, while en route from Canyonlands Field Airport to Stanley, Idaho for a family gathering. His plane experienced an undetermined malfunction and went missing the afternoon of July 2, and was discovered on the morning of July 3.


Neil was born October 10, 1993, in Portland, Oregon, the son of Douglas and Lori MacNichol. Neil graduated from McCall-Donnelly High School in 2012. Throughout his high school years, Neil enjoyed hockey as a goalie, lacrosse and football. His senior year he was class vice president with duties such as morning announcements, the daily joke and MC at all events. Neil’s friends remember him as happy, filled with humor and a large contagious smile to share with all. Neil could brighten any room he walked into and was the life of every party.


He went on to further his education at Oregon State University and transferred to an aviation accredited university, Utah Valley University. Neil’s passion was flying and he obtained a pilot’s license at the early age of 17. He then added multi-engine instrument and commercial certifications. He built hours flying in the Idaho backcountry. In 2014, he obtained a commercial flying position for Redtail Aviation in Moab, Utah, and was a professional pilot for the past two years conducting Arial tours over Canyonlands National Park, delivering river rafters to remote corners of the Green and Colorado Rivers and having the time of his life.

Neil saved all his earnings and fulfilled a dream by buying his own plane in early 2015. When he was not enjoying outdoor activities such as rock climbing, mountain biking, hiking, rappelling, camping, snowshoeing, ice climbing, etc., he could be found in the skies. He was highly experienced for such a young pilot after logging countless hours of backcountry navigation and skill training with his mother, who is also a well-known mountain pilot.

Neil had an infectious personality that was fueled by his intellect, humor and passion for life. He loved people and people loved him. He found honor and purpose in all that he did and inspired the same in those around him. He continuously went out of his way to foster the love of aviation in others and shared the thrill of flying every chance he got. He was very close to completing his next goal of obtaining his Certified Flight Instructor certificate. He will be dearly missed by all who had the pleasure of knowing and flying with him.

He is survived by his mother Lori MacNichol; sister Madison MacNichol; paternal grandparents Roland and Sally MacNichol; and many loving uncles, aunts and cousins of the MacNichol family. He is also survived on his maternal side by step-grandmother Marty Foster as well as numerous loving uncles, aunts and cousins of the Foster family.

He is preceded in death by his father Douglas MacNichol; maternal grandmother Sue VanHarpen and grandfather Jerry Foster.

A memorial service will be held at 4 p.m. on Saturday, July 18, at the MacNichol and Gregory family residence, 1423 Club Hill Blvd., McCall ID 83638.

The family asks that everyone who would like to join, please come and take part in a celebration of Neil’s life and memory. Please bring your favorite story or memory of Neil and any beloved photos, which you are willing to part with as they will be put into a book at a later date.

A foundation has been established at Idaho First Bank in McCall, Idaho, in Neil’s memory for the purpose of funding local students who desire to be aspiring pilots. In lieu of flowers, please contribute in Neil’s honor.

Arrangements are under the care of Wood River Chapel of Hailey, Idaho. Friends may visit www.woodriverchapel.com to share a message, photo or story and to light a candle.



BOISE, Idaho (AP) - Toxicology tests are planned on the body of a 21-year-old commercial pilot who died after his backcountry aircraft crashed near Craters of the Moon National Monument in south-central Idaho.

Blaine County Coroner Russ Mikel said Neil MacNichol of McCall died of blunt force trauma in the crash on Thursday.

Authorities said MacNichol was flying from Moab, Utah, to Stanley, Idaho, when he disappeared. The wreckage was found on Friday and reported by authorities on Monday.

MacNichol is listed as one of the instructors at McCall Mountain Canyon Flying Seminars, which specializes in backcountry flying.

Mikel said the aircraft, a  Piper PA-22-135 Tri-Pacer, struck the ground at a steep angle but away from old lava flows in the area.

The Federal Aviation Administration is investigating.

Source: http://www.krem.com

CAREY, Idaho ( KMVT / KSVT ) - A 21 year old pilot from McCall was killed in a plane crash south of Carey, near Craters of the Moon. 

Neil MacNichol was reported missing on July 2nd.

On July 3rd, the Civil Air Patrol out of Idaho Falls called the Blaine County Sheriff’s Office to report a possible aviation crash site near Craters of the Moon.

The Blaine County Sheriff’s Office was the first to respond on ground and confirmed the crash site.

The BLM assisted to prevent any fuel sparked fires.

Soon after, the Civil Air Patrol determined the plane belonged to MacNichol, who apparently died on impact.

The FAA is investigating the crash.

Source:  http://www.kmvt.com


CAREY | A pilot involved in a plane crash discovered Friday morning in Craters Of The Moon National Monument and Preserve was pronounced dead on the scene.

Neil W. MacNicol, 21, was the lone occupant when his plane crashed on its way to Stanley.

Blaine County Sheriff's Office spokeswoman Holly Carter said that MacNicol was reported missing Thursday and that they were tipped about a potential crash site by Civil Air Patrol out of Idaho Falls.

"Our understanding here is that he had stopped in Malad and was traveling to Stanley," Carter said.

Along with the sheriff's office a fire truck with the Bureau of Land Management and the Blaine County Coroner responded to the crash.

"Initial indicators are that he died on impact," Carter said.

The Federal Aviation Administration also responded to the crash and has taken over the investigation.

The crash occurred about two miles south-east of Corral Butte in Laidlaw Park.

Air India plane almost crashed on June 28th, says flight test engineer

Passengers on board Air India’s (AI) June 28 Bengaluru-Hyderabad flight (513) had a narrow escape as the pilot did a “touch and go” after bouncing on the runway during landing and seriously jeopardizing flight safety, a retired Indian Air Force flight test engineer has said in a complaint to the airline.

Wing Commander Venkataramana Mantha (retd.), a Presidential award winner who has served as a flight test engineer flying fighter jets like Mirage 2000, Jaguar, MiG27 and transport planes like B737, said in his complaint that the captain could not control the rate of descent of the A319 at the Shamshabad airport and bounced heavily on the runway.

“The normal practice in such an eventuality would be to cushion the second bounce and somehow continue with the landing. But in this case the captain opened power and went around for another landing,” the complaint said.

“Any sensible A319 captain will strongly condemn this poor airmanship of trying to do this inadvertent touch and go with so many passengers onboard,” the complaint added.

“The flaps are down in the landing condition and the speed is absolutely low because you have touched down. We managed to escape as there were hardly 40-45 passengers on board. Had there been 130-140 passengers, the aircraft would have dropped like a stone from a height of 200 feet and we would have had a crash on the runway. The aircraft just about managed to climb out,” Mantha told HT.

The fall, Mantha said, after the first bounce from a height of 8-10 feet “was better than falling from 150-200 feet. I can’t tell what tension I went through as the aircraft took off again,” he said.

As luck would have it, Mantha said on his return flight on June 29, the same captain was in command.

“At Bengaluru he made another horrendous landing with the aircraft almost bouncing again,” he said.

AI did not offer comments for the story despite mails, messages and calls from HT over the last two days.

Source:  http://www.hindustantimes.com

Incident occurred July 06, 2015 at Palm Beach International Airport (KPBI), West Palm Beach, Florida

An American Airlines flight made an emergency landing at Palm Beach International Airport Monday after a problem with one of the aircraft's flaps. 

A spokeswoman for the airport said the plane landed shortly after 4 p.m. safely with 141 passengers on board.

American Airlines flight #2271 flew from Dallas/Fort Worth International Airport, according to Sun Sentinel news partner WPEC-Ch. 12.

Source:  http://www.sun-sentinel.com

UPDATE: Fire damages hangar at Lloyd Stearman Field Airport (1K1), Benton, Kansas



BENTON, Kan.. - Several Butler County fire units battled a fire at a hangar at Stearman Air Field, one mile southwest of Benton.

The first fire call came around 12:15 a.m. Monday. The extent of damage is not clear, but crews were fighting the fire more than one hour after it broke out. Crews from Andover, Augusta, Towanda and other communities were called into service.

The airport is owned by Benton Airpark Inc., and manager Dwayne Clemens lives on-site. The hangar where Clemens makes his home was damaged, but he escaped unharmed. No one was injured by the fire.

The airport was closed when the fire broke out, but planes were seen on a runway after sunrise as usual.

Statistics filed with the FAA show Stearman Air Field has two runways, with 170 aircraft based at the field. All but 20 of them are single-engine aircraft. Stearman handles an average 29 flights per day.

Source:  http://www.kake.com



BUTLER COUNTY, Kansas -

Investigators believe they know what started a fire at Stearman Air Field overnight, but are not releasing the information at this time. 

The call came in around 12:15 Monday morning, and the fire was extinguished about 2 hours later. However, crews stayed on scene to monitor hot spots throughout the morning. 

No one was hurt when the hangar caught fire in Butler County. Benton, Andover, Towanda, Augusta and Sedgwick County crews all worked to put the fire out.

 Butler County Emergency Management and Butler County EMS were also on scene.

Butler County Emergency Manager, Jim Schmidt, says the owner of the hangar has living quarters inside and  a family was home at the time.

The owner, his wife and a family dog were able to get out safely.

Schmidt says the man discovered the fire and tried to put it out, but then had to escape because of the smoke.

The hangar is heavily damaged with an aircraft and a vehicle inside.

Schmidt says crews were worried about the fire spreading to the hangars because of the wind.   He says the hangars are only about four feet from one another.   Crews were able to contain it to just the one hangar.

The owner of the building is working with investigators to determine a cause of the fire.  Right now, Schmidt says it appears to be accidental.

Source:  http://www.kwch.com




BENTON, Kansas    (KAKE)- Several Butler County fire units battled a fire at a hangar at Stearman Air Field, one mile southwest of Benton.

The first fire call came around 12:15 a.m. Monday.

The extent of damage is not clear, but crews were fighting the fire more than one hour after it broke out. Crews from Andover, Augusta, Towanda and other communities were called into service.

The airport is owned by Benton Airpark Inc., and manager Dwayne Clemens lives on-site.

The hangar where Clemens makes his home was damaged, but he escaped unharmed.

No one was injured by the fire.

The airport was closed when the fire broke out, but planes were seen on a runway after sunrise as usual.

Statistics filed with the FAA show Stearman Air Field has two runways, with 170 aircraft based at the field.

 All but 20 of them are single-engine aircraft.

Stearman handles an average 29 flights per day.

Source:  http://www.wibw.com


From Cirrus to Schwing America, firms in Minnesota are part of China's growing U.S. investment

MinnPost
July 06, 2015
By Dave Beal

Dave Beal
Happy days are here again at Schwing America's sprawling plant in White Bear Township. The work force there, which sank below 100 when sales collapsed at the bottom of the recession and the company went through a Chapter 11 bankruptcy, is back above 300. Demand has rebounded for the plant's signature product, concrete pumps used to build projects ranging from the new Vikings stadium in downtown Minneapolis to that new house just down the street to virtually any concrete structure you can think of. "We're seeing growth everywhere nationally," says Schwing America CEO Brian Hazelton. And internationally. The plant exports its pumps to countries on five continents.

Something else about Schwing America: Three years ago, Xuzhou Construction Machinery Group (XCMG), a state-owned heavy equipment manufacturer based in China's wealthiest province, purchased a majority stake — 52 percent — of the company's German-based parent. The change is but one more sign of how China, flush from years of strong economic growth, is finally ratcheting up its investment in the United States.

It's a trend that coincides with ongoing geopolitical tension between the two countries. P. Richard Bohr, a longtime China watcher who retired this spring after directing Asian Studies at the College of St. Benedict and St. John's University, says the complexity of U.S.- China relations has increased enormously as China has risen to the status of an economic superstar. Even as the two nations cooperate more on trade and investment, Bohr notes, new challenges —such as mutual cyber spying, unclear military intentions and the search to accommodate China's global ascent — demand the attention of U.S. policymakers. The back and forth over such matters seems likely to intensify as the 2016 presidential campaign approaches. Meanwhile, Chinese President Xi Jinping will make his first state visit to the United States in September.

A form of state capitalism


Despite continuing one-party rule in China by the Communist Party, the country's economic system left Marxism behind years ago. Today, this system has evolved into a form of state capitalism inextricably linked to the economies of the United States and other advanced Western nations. That is one of the messages of an unusually detailed analysis, released in May, tracking China's rising investment in the U.S. The nonprofit National Committee on U.S.-China Relations and the global research firm Rhodium Group, found that Chinese-owned firms now employ 80,000 full-time workers in the United States. That's a tiny share of all American jobs accounted for by foreign firms. Nonetheless, it's a striking increase from less than 15,000 jobs five years ago.

The study came up with first-ever estimates of employment by Chinese companies in each of the nation's 435 congressional districts. Minnesota's Eighth Congressional District, home to 650 workers at Cirrus Aircraft, the largest Chinese-owned employer in the state, ranks 20th. The state's second largest Chinese employer is Virginia-based Smithfield Foods, which operates a large meat processing plant in St. James, Minnesota. Other Chinese-owned companies in Minnesota include Kansas-based AMC Theaters, purchased by China's Dalian Wanda Group for $2.6 billion in 2012. AMC operates several hundred multiscreen movie theaters across the country, including six in the Twin Cities suburbs. Shanghai-based WuXi AppTec employs more than 100 workers at a medical technology firm in Mendota Heights.

Many business leaders and government officials in Minnesota and across the country welcome the stepped-up flow of money from China. "The value of Chinese investment, like all foreign direct investment, is that it adds new capital and ultimately new jobs to our region," says Michael Langley, CEO at Greater MSP, a regional economic development group. Laurence Reszetar, who leads the state's effort to attract foreign investment for the Minnesota Trade Office, echoes Langley's sentiment. "At the end of the day, the fact of the matter is that our economic future and China's are incredibly intertwined," Reszetar says. The stronger the economic ties between the two countries, the lower the odds that political and military tensions between them could ultimately escalate to war, he adds.

The report acknowledges sensitivities to Chinese investment in the U.S. Congress and the national security community. "American officials and the general public remain wary of the impact of investment from China," the study says.

China's economic and political systems differ greatly from the realities in advanced economies. ... Moreover, economic engagement with China over the past two decades has been a mixed experience, often bringing painful adjustment pressures to affected industry clusters and their communities. Job losses related to the outsourcing of manufacturing activity counteracted the benefits of lower cost goods. Many Americans are understandably apprehensive about the impact of Chinese capital investment.


But the report concludes that more Chinese investment in the United States will strengthen America's economy. Shutdowns at U.S. companies acquired by Chinese investors have been rare, the report says, and fears that U.S. firms owned by Chinese investors would import Chinese labor standards weaker than America's norms have not materialized.

Early presence on the Iron Range

In Minnesota, a new chapter in the state's growing engagement with China began playing out on the Iron Range in 2003. Eveleth Taconite, which had been mining iron ore for 40 years, filed a Chapter 11 bankruptcy and shut down its mine in Eveleth. Then China's Laiwu Steel Group and Ohio-based Cleveland Cliffs joined forces to buy the company. Laiwu took a 30 percent stake, Cleveland Cliffs 70 percent. The deal won powerful backing from Democratic Rep. James Oberstar and GOP Gov. Tim Pawlenty. It enabled the plant, whose name became United Taconite, to reopen just before Christmas, allowing 450 workers to return to their jobs. In 2008, Cliffs Natural Resources bought Laiwu's interest in the company.

In many respects, U.S. investment from China is a logical third step for the world's largest developing economy. China built its economic stake in the U.S. largely in two ways: by buying U.S. debt (China and Japan are currently in a virtual tie as America's largest creditors) and by exporting waves of low-cost goods to the United States.

According the new report, China has invested $46 billion in the United States since 2000, most of it in the last five years. These investments take three forms: acquisitions of American U.S. companies, easily the principal form of investment; "greenfield" construction projects; and expansions of existing facilities. Almost half of the 80,000 U.S. jobs are at plants operated by Smithfield, America's largest pork producer/processor. China's WH Group shelled out $4.7 billion to buy Smithfield in 2013. Much of the rest of the investment is concentrated in the New York City, Chicago and San Francisco Bay areas and in North Carolina and Texas. The Waldorf Astoria hotel in Manhattan, which the Anbang Insurance Group purchased last year for $1.95 billion, stands as China's highest-profile U.S. acquisition. In 2005, China-based Lenovo bought IBM's personal computer business; last year, Lenovo acquired the Motorola phone manufacturing operations from Google.

Helping Cirrus rebound

The Committee/Rhodium study describes Duluth-based Cirrus Aircraft as a troubled company that benefited from a large injection of capital after it was acquired in 2011 by a company owned by the Chinese government: China Aviation Industry General Aircraft Co. (CAIGA). Duluth's popular mayor, Don Ness, agrees with that assessment. So do local business leaders.

Cirrus, a personal aircraft manufacturer, is the second largest private employer in the Duluth region other than health-care enterprises. The company, founded in 1984, prospered by developing an innovative single-engine turboprop plane that includes a parachute built into its tail section. Now Cirrus is hoping for federal regulatory approval soon to build a personal jet. The company has said it has more than 500 orders for the new plane. It plans to add at least 150 employees in Duluth to produce the plane. State and local governments are providing subsidies to construct the facility where the plane will be built.

"The recession just hammered Cirrus," says Brian Hanson, CEO at the Area Partnership for Economic Expansion, a Duluth-based economic development nonprofit. "We knew the company was in extremely dire straits. Cirrus made an extraordinary effort to find equity financing during a very challenging economic period. Their people talked to anyone and everyone they could talk to. CAIGA represented their best option for investment."

Initially, not everyone was on board. Rep. Chip Cravaack, then representing Northeastern Minnesota, warned Treasury Secretary Tim Geithner that selling Cirrus to a Chinese company would compromise U.S. security. Geithner headed the Committee on Foreign Investment in the United States (CFIUS), a panel of federal officials that can block foreign investors' acquisitions if they are determined to imperil national security. Cravaack feared the deal could lead the new owners to move Cirrus jobs and sensitive technology to China, aiding the country's military efforts.

Ness says Duluth leaders agreed that CFIUS should take a hard look at the deal. The panel did weigh the proposal, and approved it after a few months. The mayor says the sellers, investors from the Mideast, had no interest in aviation and were solely interested in short-term returns. He notes that the Chinese owners are putting $100 million into the development of the jet. Cirrus employment in Duluth has doubled under the new owners, as demand for its planes has bounced back.

Was there serious concern that Cirrus wouldn't have survived but for its new Chinese owners? "Absolutely," says Ness.

A somewhat similar situation played out at Smithfield. Leaders in both political parties — Democratic Sen. Max Baucus from Montana and GOP Sen. Orrin Hatch in Utah — raised questions about selling the big food processor to a Chinese company. CFIUS considered that deal, too, then cleared it.

Before the Chinese buyers emerged, some Smithfield shareholders had been urging a breakup of the company. That sparked jitters in St. James, where Smithfield is by far the largest employer. St. James Mayor Gary Sturm backed the deal. He says the plant, which had a work force of about 400 when it was sold to the Chinese investors, now employs more than 450 workers. "Everything we've seen so far is optimistic," Sturm says. "They're adding jobs. We're bullish on the company."

At Schwing America, Brian Hazelton says the company is benefiting from the contributions of three countries: engineering, design and production efficiencies, provided by the Germans; financial stability, from the Chinese; and commercial savvy, from the Americans. Hazelton says the Chinese owners have been "very hands-off," leaving the management team of Schwing America entirely to Americans. Germany's founding Schwing family continues to hold a 48 percent stake in the company, which is considering building another plant in the U.S.

Minnesota-China bonds run deep

Minnesota's ties with China have taken a dramatic turn since the country came under Communist leadership in 1949. Dr. Walter Judd, who spent time in China during the 1920s and 1930s as a medical missionary and later represented Minneapolis in Congress, was one of the nation's most outspoken and persistent opponents of the Chinese Communist government. But later, as China opened up to the world, the state's economic and cultural ties with China grew ever-stronger. The University of Minnesota became home to one of the largest contingents of Chinese students in the United States. The school has alumni chapters in China. 3M established the first wholly owned U.S. subsidiary in China and, along with Cargill, H.B. Fuller and other Minnesota companies, opened plants there. Target emerged as one of the nation's largest importers of goods from China.

How rapidly is Chinese investment in the United States, once utterly unimaginable, likely to grow? The Committee/Rhodium report predicts that jobs at Chinese-owned firms in the U.S. will increase to between 200,000 and 400,000 by 2020 from 80,000 now. "These calculations ... are not Pollyannaish," the study concludes, citing the history of Japanese investment in the U.S. "Prior to the 1980s, Japanese companies provided practically no jobs in the U.S. Today, their U.S. affiliates employ almost 700,000 Americans, making them important contributors in many local economies."

China's growing U.S. presence: rising fast but still small


The Midwest accounts for 33,000 of the 80,000 jobs at Chinese-owned companies in the U.S., more than any other region in the country. The 80,000 is up from 15,000 five years ago, but is dwarfed by the 700,000 jobs at Japanese-owned firms in the U.S.

David Dollar, an economist at the Brookings Institution, says Chinese investment in the U.S. and American investment in China both remain surprisingly small. In China, weak protection of intellectual property and the roping off of many sectors from competition are obstacles. In the United States, Chinese firms seek a less politicized environment and national security reviews "have soured many Chinese investors on the U.S. market." Overall, Dollar says, the barriers are much greater in China. They could fall significantly in both countries if each follows through on its intent to open up the flow in both directions by reaching agreement on a bilateral investment treaty now being discussed.

In Minnesota, state officials created Laurence Reszetar's job last year, in part to reach out to Chinese provincial and municipal governments for more direct investment from China. Reszetar works with federal officials to encourage more Chinese investment. He says the state, which opened a trade office in China a decade ago, needs to do more to leverage Minnesota's deep ties with China to draw more investment from China.

Bohr, a former director of the Minnesota Trade Office, agrees with Reszetar that the economic interdependence of the two countries reduces considerably the threat that they could one day confront each other militarily. Bohr says both nations are engaged in a complicated mix of economic cooperation and competition. The new reality is that a growing part of this stew is that China is not just buying America's debt and exporting to the country, but owning U.S. companies as well.

ABOUT THE AUTHOR:
Dave Beal, a longtime business columnist for the Pioneer Press and former business editor there, writes about business and the economy.

Original article can be found here:  http://www.minnpost.com