Hoosier Responsible?

The Anderson plant was sold in 2001. The Valparaiso plant closed in 2003. In 2005, Magnequench merged with AMR Technologies, based in Canada, creating a new firm — Neo Material Technologies.

Do the Chinese now have "the intellectual property and technological know-how to make these magnets" as a result of the 2003 move, as Clinton claims?

"That's patently false," Albers says. "There was nothing new that the Chinese didn't already know about. They already had the equipment and the technology and the know-how."

The intellectual property, Albers says, "remains in the United States and was not transferred."

When the Clinton campaign called Albers two days before her Valparaiso event, he says, "They asked me to explain to the about Magnequench and the closing and did any technology go to China that would hurt the military … and I explained that that was not the case."

As for the jobs issue, Shingleton says she's "befuddled" because of the support for free trade and globalization seen in Bill Clinton's administration, which resulted in much larger job losses in the region.

"I just don't get it," says Shingleton. "NAFTA was passed under President Clinton, there's been a movement to open for free trade … Look at all the steel jobs that were lost in Northwest Indiana. If you want to look at the attrition of jobs, look at the steel industry. The question to ask her is what happened to all the other industries that shipped their jobs overseas before 2000?"

Legit Issue

Experts say that there is a legitimate issue Clinton raises regarding these Neo magnets. In the last several years, the producers and manufacturers of Neo magnets have left the U.S. The last one — Hitachi's Edmore, Mich., plant — closed in 2005.

"It's also a security issue," Clinton said in Pittsburgh. "I'm not comfortable with the fact that we now have to buy magnets for our bombs from China. "

Jeff Green is former counsel for Rep. Duncan Hunter, R-Calif., who worked for years to bring attention the issue of China's move on U.S. military technology. Green currently works for U.S. companies that reproduce high performance magnets.

Green applauds Clinton's and Bayh's attention to the issue because, he says, "I think if we're dependent Chinese manufacturers for this technology, it has the potential to be a national security threat."

Does the U.S. "now have to buy magnets for our bombs from China," as Clinton has said?

"I think it's more accurate to say that all the technology and production of these Neo magnets comes from overseas," he says, including Japan, Finland, Germany and China, the latter of which controls the majority of the Neo magnet market.

Not that there's anything stopping any U.S. companies from mining Neo magnet parts in, say, Mountain Pass, Calif.

"Nothing was done by Magnequench that aided the Chinese military program or hurt the U.S. military program," says Albers, who adds that Clinton's focus on his former company "concerns me because it doesn't address the main issue, which is how to make U.S. companies more competitive globally — that's the question we should be asking, that's what we should be addressing. We should not be twisting the truth about that this is a national security issue, because it's not a national security issue, it's about global competitiveness."

Albers until recently was a registered Republican, but he intends to vote for Sen. Barack Obama for president in the Indiana primary next week.

Eloise Harper and Avery Miller contributed to this report.

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