Bayh Pledges to Protect Local Workers, Industry Vital to U.S. National Security

Press Release

Bayh Pledges to Protect Local Workers, Industry Vital to U.S. National Security

Warns against outsourcing production of key weapons component to China; says Hoosiers making high-performance magnets play critical defense role

Senator Evan Bayh today discussed the importance of keeping national security jobs in Indiana, including the more than 150 manufacturing jobs provided by high-performance magnet producer Thomas & Skinner of Indianapolis.

During a visit to the manufacturer's local plant this morning, Bayh discussed language he supported in the 2008 Department of Defense (DoD) authorization bill that requires the U.S. military to purchase specialty metals used in defense systems from American producers.

"It is basic common sense that we develop the key components of our advanced weapons technology right here in the United States," Senator Bayh said. "We must not outsource to China an industry that is critical to our most sophisticated weapons. I was proud to support legislation in the Senate that will protect the jobs of Hoosiers who are performing the irreplaceable work of giving our troops the tools they need to win on the battlefield."

Thomas & Skinner produces what are known as "alnico" magnets. The magnets are used in numerous defense and aerospace applications, including missiles, military fighters and other aircraft, ground transport vehicles and radar systems. The company is one of only five producers left in the United States that produces high-performance magnets.

Earlier this year, Bayh supported provisions in the DoD authorization bill to preserve and enhance the so-called "specialty metals clause," which requires that the military purchase "alnico" and other high performance magnets domestically so long as there are U.S. producers who make them.

"The Specialty Metals clause is critical to the survival of Thomas & Skinner and our industry," said Thomas & Skinner President Vern Detlef. "Senator Bayh's continuing support of this provision helps ensure the long-term viability of our company."

The U.S. high-performance magnet industry has been hit hard in recent years by China's efforts to dominate the market. Five years ago, the state lost more than 225 jobs when Chinese investors moved the operations of Indiana-based Magnaquench to China. Magnaquench, which had operations in Valparaiso and Anderson, was originally purchased in 1995 by a group of investors that included two Chinese companies. The investors promised to maintain U.S. production of the magnets but in 2003 backed out on that promise.

At the time, Magnaquench was the only producer in the United States of what are known as rare-earth "neo" magnets, critical components in the guidance systems of military smart bombs, which were not covered by the specialty metals clause. As a result of the decision to shut down Magnaquench's U.S. production, today the U.S. military buys "neo" magnets from China.

"Over my protests, the U.S. Department of Treasury allowed Magnaquench to be shut down and off-shored," Senator Bayh said. "Not only did we compromise our national security interests, but we also lost more than 225 good-paying Hoosier jobs. It was a mistake the federal government should not repeat."

Despite the experience of Magnaquench, Bayh noted there are some officials in Washington, D.C., who believe the specialty metals clause should be eliminated or weakened.

"Looking around this plant today, I see dozens of real-life examples of the difference this requirement makes in the lives of the hard-working people of our state," Bayh said

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