Monsanto Plan to Sell Unit Sparks Security Review
Senior Administration officials are investigating possible risks to national security in a proposed sale of a computer-related operation of Monsanto Co. to a West German company, U.S. officials said Tuesday.
The case involves the proposed sale of Monsanto Electronic Materials of Palo Alto to Huels AG of West Germany. The American company, an operating division of the giant Monsanto chemical company headquartered in St. Louis, produces silicon wafers, the flat disks used to make computer chips.
Silicon wafers are the building blocks for the semiconductor industry, a sector of the U.S. economy considered vital not only for national security but also for trade reasons. America’s edge in the battle with foreign competitors has centered on such high-technology fields as computer manufacturing.
The proposed sale to the West German company was reviewed in a closed-door meeting Tuesday by the Committee on Foreign Investment. The committee is composed of officials from eight government agencies and is headed by David C. Mulford, an assistant Treasury secretary.
The panel has until next Monday to forward a recommendation to the President. It is expected that the proposed sale will be one of the first trade issues that President-elect Bush will have to face.
Originally, the Commerce Department and the Defense Department raised questions about the proposed sale. However, an attorney representing Monsanto said Tuesday that he believed that the original objections had been dealt with.
“We have met with (government officials) on numerous occasions. We answered all of the questions and repeat questions,” Washington lawyer Joseph F. Dennin said.
Meeting Held
An official at the West German Embassy said the U.S. review of the proposed sale is a routine procedural move.
Earle H. Harbison Jr., president of Monsanto, and Carl Krauch, chairman of Huels, a subsidiary of the giant West German conglomerate Veba AG, both met with Reagan Administration officials on Tuesday.
Commerce Department officials said no announcement of the panel’s recommendation would be released before it was reviewed by the President, who has 15 days under law to reach a decision on the panel’s findings.
In a similar case two years ago, under different law, national security concerns forced the Japanese company Fujitsu Ltd. to give up a planned purchase of Fairchild Semiconductor Corp., which had operations in California but was owned by the French company Schlumberger Ltd.
The Defense Department objected, and Fujitsu dropped its planned purchase. Fairchild was later bought by San Francisco-based National Semiconductor Corp.
