Haas Allegedly Working With Russia

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Wallio
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Haas Allegedly Working With Russia

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Haas Automation has allegedly been caught suppling parts and tools to Russia's weapons industry. If this is true, ol' Gene is going back to Federal Prison, and Andretti will get a team cheap.

Per PBS:
This is the factory floor of RATEP, a weapons manufacturer in Russia that is part of the Almaz-Antey holding, which has been subject to U.S. sanctions since 2014, when Russia first attacked Ukraine.

It produces guidance systems for anti-aircraft weapons used by the Russian military. And it builds them using equipment made by California-based industrial manufacturing giant Haas Automation.

"NewsHour" has learned RATEP is just one of several sanctioned enterprises in the Russian arms industry that have been supplied with precision machining tools manufactured here at Haas' facility in Oxnard, California, in what may represent a breach of American sanctions. That's according to documents filed with the U.S. Treasury and the Department of Commerce late last month.
Full article:
https://www.pbs.org/newshour/show/ameri ... s-industry
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Re: Haas Allegedly Working With Russia

Post by Row Man Gross-Gene »

Thanks for posting. This has the potential to be bad for Haas (the company). If they're flouting the rules, I hope they are punished for it. Just a couple comments, I know that TV news is a visual medium and so they need pictures, but the existence of training or promotional videos (even recent ones) showing Haas machines in Russian factories doesn't mean they broke the law, those machines could have been there for quite some time. More compelling is the shipping evidence they mentioned, though I wonder if the shipments had been paid for prior the sanctions? I mean, if the payment was made before, but product shipped after, it's still bad, but I wonder if that's a legal loophole (obviously, in such a situation, they could have simply refunded the money rather than ship the product). I guess I'll stay tuned.
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Re: Haas Allegedly Working With Russia

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Row Man Gross-Gene wrote: 15 Mar 2023, 19:04 the shipping evidence they mentioned
This to me is the funny part, at least in a gallows humor sort of way. Gene's Tax Fraud conviction was one of the most open and shut cases due to the MASSIVE paper trail he left. Did lightning strike twice?
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Re: Haas Allegedly Working With Russia

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Wallio wrote: 15 Mar 2023, 19:50
Row Man Gross-Gene wrote: 15 Mar 2023, 19:04 the shipping evidence they mentioned
This to me is the funny part, at least in a gallows humor sort of way. Gene's Tax Fraud conviction was one of the most open and shut cases due to the MASSIVE paper trail he left. Did lightning strike twice?
You'd have to think his name isn't directly on these right? (I'm imagining that Star Wars meme with Anakin and Padme: your signature isn't on the paperwork Gene, right?!...)
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Re: Haas Allegedly Working With Russia

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No, I can't imagine he'd make that same mistake again, but I wouldn't be surprised if they just had normal shipping invoices, approved by accounts receivable with very clear Russian addresses on them dated post-Feb 2022. Just laying around in a file drawer or hard drive somewhere.
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Re: Haas Allegedly Working With Russia

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It would be interesting to know what the timeline of such an investigation is / would be. How long before this would blow up in the organisation's, and therefore the team's, face? If the court case starts later on in the year, for example, then Haas as a team have plenty of time to shore up and get ready. If there's legal proceedings starting next week or something, then there's a bit of bother.
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Re: Haas Allegedly Working With Russia

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Row Man Gross-Gene wrote: 15 Mar 2023, 19:04 Thanks for posting. This has the potential to be bad for Haas (the company). If they're flouting the rules, I hope they are punished for it. Just a couple comments, I know that TV news is a visual medium and so they need pictures, but the existence of training or promotional videos (even recent ones) showing Haas machines in Russian factories doesn't mean they broke the law, those machines could have been there for quite some time. More compelling is the shipping evidence they mentioned, though I wonder if the shipments had been paid for prior the sanctions? I mean, if the payment was made before, but product shipped after, it's still bad, but I wonder if that's a legal loophole (obviously, in such a situation, they could have simply refunded the money rather than ship the product). I guess I'll stay tuned.
We have had a fairly quick response from Haas on that front, and they are denying that they have broken any sanctions with regards to Russia. https://www.haascnc.com/about/response.html

Haas have stated that they used to sell machines to an independent distributor, Abamet Management, which would then re-sell those machines on to customers in Russia and Belarus. Haas have stated that, although the terms of the sanctions on Russia might well have permitted them to continue selling to Abamet Management, they cancelled their contract with Abamet Management on the 3rd March 2022 and have not sent any new machines or spare parts to Abamet since that date.

With regards to the shipment dates, Haas have stated that they were not responsible for shipping machines or spare parts. Their response is that "Abamet had possession, title, and control over a number of machines and spare parts it had acquired from Haas prior to Russia’s invasion of Ukraine" - in other words, they are saying it is Abamet, not Haas, that was responsible for shipping those goods.

It therefore appears that Haas's defence is along the lines of your suggestion - that Haas had sold machines and spare parts to Abamet prior to the invasion of Ukraine, but then cut their ties with Abamet when it was announced that sanctions were being put in place. Meanwhile, Abamet, having built up a large stockpile of machinery and spare parts prior to sanctions being announced, have taken advantage of the fact that the sanctions do not apply retrospectively to then ship those stockpiled goods over to Russia over the subsequent months.

With regards to the comment about "simply refunding the money" - it might not necessarily have been straightforward if Abamet used a Russian bank that has been cut off from the SWIFT transaction system due to sanctions.
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Re: Haas Allegedly Working With Russia

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There have been a few "responses to the response" already (these off weeks give us not much to do otherwise) and if we believe the few nickel's worth of free legal advice flying around, while things are certainly looking far, far better for Haas, they aren't out of the woods yet. Apparently, quite a bit of sanction language references the "end user" of products, and obviously a distributor or vendor is not an end user. Likewise, no one is dumb enough to be "surprised" that a Russian distributor is stockpiling machines to sell to Russia, sanctions, or no sanctions. Now all of this will most likely get a fine at worst (if anything) as opposed to some of the more draconian measures allowed. But it isn't as innocent as the company would like you to think.

It comes at an interesting time in Haas's racing operations. The NASCAR team will likely be contracting next year as Harvick retires and Buesch Beer goes to Trackhouse. Amirola actually retired last year, then unretired, and is claiming to be retiring after either this year or next, which means Smithfield is gone too. These are the team's two biggest sponsors that aren't Haas CNC themselves. Tony Stewart is also noticeably bored of NASCAR, starting an NHRA team for his wife (and getting an A/FD license himself) and an entire racing series in the SRX which, while small, is in its third year already and has large driver support, a solid TV deal, and has sold out 4 of 6 races so far. There is a very real possibility that Stewart-Haas Racing is radically different in just 10 months' time.

The F1 team is also at a weird crossroads. They claim to be at the budget cap, but laughable cost-saving moves like the mini-pit wall put that in doubt. The team is also (allegedly) the most vocal opponent of not just Andretti but of any expansion of the grid, desperate as they are for cash. They also are putting up seriously "giving up" vibes by signing Hulkenberg over....literally anyone else, and the car is a major step back. So the F1 team too could change if things go bad for the mothership.

My hot take? Maybe IF this is true, it's a good thing. Joe Custer made the deal with Tony Stewart the last time Gene was in prison, and that worked out very well all things considered (and not just for Joe's son Cole who has a drive for life). Maybe round 2 could get us a similar gain?
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Re: Haas Allegedly Working With Russia

Post by Row Man Gross-Gene »

I wouldn't mind seeing them sell to Andretti. I'm assuming Andretti would be capable of running a more competitive team, but I don't know. I'm not certain the Andretti operation is any better financed than Haas is, no other racing series they're in comes close to the budget needs of F1. (In fact, I wonder if you add up all other Andretti racing teams whether that amount even touches the current F1 budget cap?)
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Re: Haas Allegedly Working With Russia

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Row Man Gross-Gene wrote: 16 Mar 2023, 20:31 I wouldn't mind seeing them sell to Andretti. I'm assuming Andretti would be capable of running a more competitive team, but I don't know. I'm not certain the Andretti operation is any better financed than Haas is, no other racing series they're in comes close to the budget needs of F1. (In fact, I wonder if you add up all other Andretti racing teams whether that amount even touches the current F1 budget cap?)
There were some questions raised in the past if Andretti Autosport is quite as well funded as the Andretti family claim that it is.

Back in 2015, two former senior members of Andretti Sports Marketing (John Lopes and Starke Taylor) launched legal action against Andretti Autosport. As part of that lawsuit, they claimed that Andretti Autosport was technically insolvent - the team had $2 million in assets and $7 million in debts - and that Andretti Autosport was operating at a net loss, with a turnover of $25 million, but an operating loss of $10 million. According to them, Andretti was using a combination of loans and revenue from Andretti Sports Marketing to cover the financial losses that Andretti Autosport was making.

Now, the Andretti's denied that was the case and, with the Andretti's settling out of court with Lopes and Taylor, we did not get any further details of the financial situation at Andretti Autosport.
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Re: Haas Allegedly Working With Russia

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This is a fair point in light of the current economy. I always believed that any Andretti F1 team would be more financially secure even before GM due to Gainsbridge. They were supposedly going to pour a ton of money into the project (assuming Herta was part of it). However, the current banking and crypto failures in the US put them on much less secure footing.
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Re: Haas Allegedly Working With Russia

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Wallio wrote: 17 Mar 2023, 15:28 This is a fair point in light of the current economy. I always believed that any Andretti F1 team would be more financially secure even before GM due to Gainsbridge. They were supposedly going to pour a ton of money into the project (assuming Herta was part of it). However, the current banking and crypto failures in the US put them on much less secure footing.
In the case of General Motors, whilst they are putting some money towards Andretti in the form of sponsoring an engine for Andretti to use, I thought that at least some of their support was in terms of benefits in kind, rather than direct funding (such as providing Andretti with access to their research facilities for nominal cost or for free).

Furthermore, asides from the longer term fundraising, there's the short term capital expenditure that also needs to be addressed. Whilst there is the new factory being built in the USA, Andretti has also said that he wants a facility in the UK to support any work in the USA, at least in part because he wants to enter in 2024, but the new facility in Fisher would not be operational until mid 2025. That said, whilst he's talked about having that UK support facility, there doesn't seem to have been much movement on that front for some time.

I do also agree that, even if Gainbridge has apparently agreed to a long term sponsorship deal with Andretti - they've signed a sponsorship deal for the IndyCar team until 2027 - the current financial situation does now raise a few questions over how secure Andretti's funding is. Not only was there the sharp decline in the value of crypto assets, the recent concerns over SVB and Credit Suisse are likely to add to the pressure on organisations like Gainbridge.
Martin Brundle, on watching a replay of Grosjean spinning:
"The problem with Grosjean is that he want to take a look back at the corner he's just exited"
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