Is the ‘American Content and/or Assembled in America’ Circus playing in North Carolina?
Hitachi metals’ operations in North Carolina produce rare earth permanent magnets, REPMs, for, among others, the German OEM automotive supplier (of transmissions), ZDf, which I believe, manufactures its products, or at least some of the components for them, also in North Carolina.. So, those are American made REPMs, right? Well let’s take a closer look at the North Carolina plant’s supply chain as it was described to me earlier this week in Ningbo, China, a 3 hour car ride south of Shanghai.
Hitachi purchases some didymium (oxide or carbonate) from Molycorp’s Mountain Pass, California, operations. This didymium is shipped from California to a destination in Asia specified by Hitachi, either Japan or (Hitachi’s j/v metal making operations in) China. Then this material is “blended” with additional Chinese sourced didymium, a boron containing compatible alloy from somewhere, and Chinese sourced and manufactured ferro-dysprosium to manufacture (in China, most likely) neodymium iron boron: dysprosium modified rare earth permanent magnet sintered alloy blocks. Then these blocks are sent to a Hitachi plant in Malaysia where they are machined into shapes for the rare earth permanent magnets to be completed (by being magnetized) at Hitachi’s North Carolina facility.
The resulting product is described as both “having American content (didymium oxide RAW MATERIAL) from Molycorp and as having been “assembled in the USA!”
Get our daily investorintel update
So, the German company has solved its problem of maximizing American content as has the Japanese company. Thus North Carolina’s Governor, its Federal Senators and Congressmen, and the remaining American OEM automakers can celebrate the American content of their made in-state transmissions.
Note that very little if any technology “transfer” has occurred and even better a minimum of Chinese/Japanese have been lost, or, as the President of the US likes to say, those jobs (in China) have been “saved.”
See how easy that is?
I welcome any knowledgeable responses by Hitachi, ZDF, or Molycorp to identify any errors in this story or to clarify any of the above steps described. I stand ready to be corrected on any erroneous detail.
Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>