China Hawks Lower Boom on ABB Crane Business

In a letter addressed to the Swiss company ASEA Brown Boveri Ltd. (ABB), a group of House Republican lawmakers requested public testimony from its U.S. Country Holding Officer, Michael Gray, regarding the company’s relationship with the Chinese state-owned enterprise, Shanghai Zhenhua Heavy Industries Company Limited (ZPMC). ZPMC currently accounts for nearly 80 percent of the ship-to-shore cranes at U.S. maritime ports. 

"ABB works with ZPMC to provide the U.S. maritime industry with hardware and equipment. At the same time, ABB maintains significant commercial ties to the People’s Republic of China (PRC), all while holding numerous contracts with U.S. government agencies, including the Department of Homeland Security (DHS) and the Department of Defense (DOD)," according to the committee.

"Allowing ZPMC to install ABB equipment and technology in China onto cranes bound for the United States is unacceptable and must be remedied without any further delay," the lawmakers write.

ABB, a Swedish-Swiss multinational corporation generates over $30 billion in revenue manufacturing electrical equipment and switchgear, as well as industrial automation and robotics.

In July, the Committee sent a private letter to ABB concerning security risks. "The concerns raised in the letter were not properly addressed by the company," the letter reads.

The chairmen state, “The Committees took every effort to work in good faith with ABB to identify and remedy certain vulnerabilities to its equipment. The Committees met with ABB personnel and counsel on several occasions, and offered to brief Bruce Matthews, ABB’s U.S. Head of Security, regarding the legitimate vulnerabilities to ABB software and hardware on U.S. ship-to-shore cranes.

"ABB provided over 650 documents in response to our requests. However, ABB failed to sufficiently answer several important questions.

“Therefore, in light of the breakdown in good faith negotiations and to better understand how ABB is securing its software and hardware on U.S. ship-to-shore cranes, we request that you please direct your counsel to provide Mr. Gray’s availability to testify at an upcoming public hearing in front of both Committees."

The chairmen conclude, “It is vital to the Committees, as part of our critical work investigating and understanding the wide range of security threats and risks posed by the PRC, that ABB explains its relationships with PRC state-owned enterprises, and whether ABB should be trusted to continue working on behalf of U.S. government agencies while simultaneously engaging with entities owned, controlled, subsidized, or influenced by the PRC.

The letter was signed by Rep. Mike Gallagher (R-WI), Chairman of the House Select Committee on the Chinese Communist Party, House Homeland Security Committee Chairman Mark E. Green, MD (R-TN), Subcommittee on Transportation and Maritime Security Chairman Carlos Gimenez (R-FL), and Subcommittee on Counterterrorism, Law Enforcement, and Intelligence Chairman August Pfluger (R-TX)

Read the full letter here.

Background:

Outlets such as the Wall Street Journal have reported on the national security risks of Chinese state-owned cranes, revealing that Pentagon officials have called ZPMC a ‘Trojan horse’ for the CCP, and that the FBI has reportedly discovered intelligence collection devices on ZPMC cranes in the Port of Baltimore.

On April 3, 2023, Chairmen Green and Gimenez, along with Subcommittee on Cybersecurity and Infrastructure Protection Chairman Andrew Garbarino (R-NY) and Subcommittee on Oversight, Investigations, and Accountability Chairman Dan Bishop (R-NC), sent a letter to Secretary Mayorkas, demanding answers on the cybersecurity threats posed to military and industrial operations by Chinese-manufactured cranes operating at U.S. ports.

In May 2023, Chairmen Green and Gimenez joined Chairman Gallagher in sending a letter to Secretary Mayorkas seeking immediate compliance with the previous letter’s requests.

On May 10, 2023, the Homeland Security Committee held a hearing to evaluate port security vulnerabilities and threats posed to U.S. maritime ports by cyber criminals and our adversaries.