DuPont and the U.S. government have found themselves in an uncomfortable position after selling a fabric business to a Chinese company.
According to the Wall Street Journal (paywall), U.S. government cabinet-level members worried about trade secrets related to DuPont selling its sustainable materials business to a Chinese company. The U.S. has long been wary of China’s military and business involvement.
At one point, a divided Committee on Foreign Investment in the United States (CFIUS) asked President Joe Biden to intervene. The Journal reported that Biden, a long-time U.S. Senator from DuPont’s home state of Delaware, declined to do so.
Due to security concerns, CFIUS matters are not made public. The story was assembled from conversations with knowledge of the issue.
At issue was the possibility that the technology used to produce sustainable fabrics could be tweaked to produce fuel for advanced weapons. That led to a split between Pentagon and the Treasury Department representatives on the committee. A compromise was eventually reached.
After the sale to Huafon, it was learned that aspects of the technology protected under the compromise had been leaked. The FBI is investigating. The Huafon fabric business, which lists Newark as its headquarters, was rebranded as Covation.
According to the story, Covation and DuPont have blamed one another for a leak. Biden has since issued an executive order regarding technology transfers to Chinese entities.
The sustainable materials business was once viewed as a promising area for DuPont after it sold off its massive nylon operation decades ago.
DuPont touted the Sorona fabric produced from corn at a joint venture plant in Tennessee for uses ranging from clothing to carpet. Nylon uses petrochemicals that are not environmentally friendly.
Later, DuPont CEO Edward Breen went on to engineer a merger and spin-off with Dow. The DuPont that emerged from the deal did not have a place for Sorona, and Breen put the business on the sales block.
Click on the headline below for a past story on the sale.
