Vertex receives clearance following Congressional calls for investigation

Vertex receives clearance following Congressional calls for investigation

WILMINGTON, NC (WECT) - Vertex Railcar Corporation announced Wednesday the Committee on Foreign Investment in the United States had completed its review of the company's joint venture with two Chinese corporations, finding "no unresolved national security issues relating to the transaction."

CFIUS began their review after Congressional calls (here and here) voicing concerns that the transfer was a potential threat to national security and the economy.

Foster Sayers, general counsel for Vertex, echoed comments he made following the announcement of the review, saying the calls for the investigation were "very misguided."

"There was never any cause for concern over this company, and that is why Vertex took the proactive step of making a voluntary filing with CFIUS and getting clearance," Sayers said. "We are and always will be an American company, creating American jobs, and making products here in the United States."

Vertex CEO Donald Croteau addressed concerns that the transfer would shift the bulk of railcar production to China.

"We will continue to expand our presence in the North American rail industry" Croteau said.  "We are ramping up to a strong spring production schedule and look forward to a successful 2017."

In June 2015, Vertex entered into a joint venture with China Southern Rail, which merged with China Northern Rail to form CRRC, and Majestic, a Hong Kong-registered private equity firm. The joint venture created a partnership, with Vertex Rail Technologies owning 33 percent, CRRC owning 22 percent and Majestic owning 45 percent.

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