Trade complaint could impact Mitsubishi’s Fort Smith plans (Updated)

A pending review of a complaint filed by General Electric against Mitsubishi Heavy Industries could jeopardize Mitsubishi’s plans to build a large manufacturing plant in the Fort Smith area.

Updated info: The U.S. International Trade Commission has extended to Jan. 8 its decision in the GE/Mitsubishi matter.

However, a Bloomberg reporter covering the story says there may not be an immediate cause for concern over a review of the complaint by the U.S. International Trade Commission. Also, Fort Smith Regional Chamber of Commerce President Paul Harvel said he is not overly concerned about the trade matter.

“This is not a surprise for us, because we’ve known this is happening,” Harvel said. “As far as what the company has told us, we’ve been assured that they will come. This has not altered their plans.”

In fact, Harvel said, if the ITC issues a ruling favorable to Mitsubishi, the plant may be built sooner than previously announced.

Mitsubishi Power Systems Americas announced Oct. 16 its plans to build a $100 million wind turbine manufacturing plant on 90 acres at Fort Chaffee that will employ up to 400 once fully operational. Construction on the 200,000-square-foot building is set to begin in early 2011. The Fort Smith plant would manufacture certain components and assemble large turbine components made in Japan.

The U.S. International Trade Commission is soon expected to rule on the GE complaint first filed Feb. 7, 2008, in which GE claims Mitsubishi is in violation of the Tariff Act of 1930 for importing “certain variable speed wind turbines and components” that infringe upon GE patent holdings.

Peg O’Laughlin, spokesperson for the commission, told The City Wire that a ruling could come as early today (Dec. 18). However, the commission has extended several times the “target date” for completing the investigation.

Gov. Mike Beebe, and U.S. Reps. John Boozman, R-Rogers, and Marion Berry, D-Gillett, sent letters Nov. 9 to the commission asking for a ruling that would allow Mitsubishi to build the Fort Smith plant.

“An impermissibly broad reading of the patents involved in this case would have significant adverse effects on employment and wind energy development in my State and in the Nation,” Beebe noted in his letter to the six ITC commissioners.

But there is political pressure to support the GE claim, with South Carolina officials seeking to protect more than 3,900 GE jobs in that state.

“Please consider the ramifications that this decision could have on existing clean energy jobs in South Carolina and the signal it would send to competitors around the world,” noted U.S. Rep. Bob Inglis, a Republican representing South Carolina’s 4th District, noted in a Dec. 3 letter to the commission.

Also, an ITC judge has already recommended to the full ITC commission that Mitsubishi violated the patents and should be excluded from using those components in the U.S.

“This is very serious. … They (Mitsubishi) are very worried about it. But it’s not an immediate threat, simply because the process takes so long,” Susan Decker, a Bloomberg reporter, told The City Wire.

Another reason this is serious is because the ITC staff excludes Fort Smith from going forward in the event Mitsubishi is found in violation. The good news for Mitsubishi and Fort Smith is that the ITC staff has issued a recommendation that the patents have not been infringed. However, the staff is required to provide remedies in case their recommendation is not followed. The ITC staff said if the commission finds Mitsubishi infringed on the patents, then previous Mitsubishi operations should be exempted — allowed to go forward — except for the Fort Smith operation because it’s so new in the planning process.

“They (ITC staff) basically are saying that the public policy of creating jobs is not more important than the public policy of protecting patent and copyright law,” Decker explained.

Decker said there could be any number of findings, with all findings resulting in any number of possibilities. The best case scenario would be that a finding against Mitsubishi is sent to President Obama and he overturns the ruling.

“That would be the end of the case, because you can’t appeal a President’s order,” Decker explained.

The worst case scenarios could see the issue move between appeals, injunctions and various other legal moves that could potentially go on for several years, Decker said.