Could NYC be headed for another Bay Bridge "fiasco?" (Why is the renovation of the Verrazano Bridge being outsourced to China?)

Posted by scapozzola on 07/02/2013

Last year, the Alliance for American Manufacturing (AAM) announced its concerns about the San Francisco-Oakland Bay Bridge being made in China.

Even though U.S. firms wanted to supply the steel needed for the Bay Bridge, California officials chose to hire a Chinese company, Shanghai Zhenhua Heavy Industries.

Although the Chinese firm was the lowest bidder, California taxpayers ended up paying extra because the imported steel girders proved to be faulty.  As the San Francisco Chronicle reported, construction of the Bay Bridge was plagued by delays and cost overruns due to the flawed steel sections imported from China. 

One has to wonder if New York City is making a similar mistake now that it has decided to outsource the renovation of Staten Island’s Verrazano Bridge to China.

As Ginger Adams Otis reports in today's New York Daily News, the Metropolitan Transportation Authority has outsourced the $235 million renovation project of the bridge's steel span to China, despite objections from U.S. steel producers and their workers.

Adams Otis quotes United Steelworkers (USW) Vice President Tom Conway as saying that the decision is "a kick in the teeth. There’s a lot of New Yorkers who would be thrilled to work on this project. It should be American made.”

New York's MTA claims that they "worked diligently to find an American steel manufacturer with the capability, experience and desire to fabricate the steel bridge deck."  However, they say they "could not find an American fabricator.”

USW's Conway disputes this, saying, "We are very skeptical about their claim they can’t find an American plant to make these plates. We found two in Pennsylvania — 100 miles from the bridge — that bid on the project and wanted to do it.”

Conway added that the real issue may simply be money: “This job here is about $30 an hour. In China, the workers will get anywhere from $10 to $15 a day.”

Indeed, the MTA may have inadvertently corroborated Conway's point.  Adams Otis reports that the MTA said U.S. production of the renovated steel means it "would cost another $100 million to keep the project in America."

Complicating the issue is that China’s central government provides many of its state-owned enterprises, including steel producers, with massive subsidies.  These subsidies are actionable under world trade law. 

China also continues to undervalue its currency, the Yuan, in order to artificially lower export costs.  This currency manipulation violates the commitments that China made when it joined the World Trade Organization (WTO).

The point is that China's illegal trade practices allow them to underbid U.S. firms.

In contrast, America’s steelmakers utilize the most modern, computerized facilities in the world to produce safe, high quality steel.  As the National Steel Bridge Alliance (NSBA) has pointed out, U.S. firms did indeed stand ready to supply the steel needed for the Bay Bridge.  They would no doubt produce safe, high-quality steel for the Verrazano Bridge as well.

The United States needs to repair a lot of crumbling infrastructure.  If U.S. tax dollars are spent domestically to upgrade aging roads, bridges, and waterworks, they can support America’s manufacturers and their workers.

Read more about the common sense economics of "Buy America" preferences.

And read more about the outsourcing of New York City's Verrazano Bridge renovation to China.

Image of the Verrazano Bridge by Flickr user janoma.cl. Used following Creative Commons guidelines.

1 comment

contact person

Here is the person you need to contact:

Thomas F. Prendergast
CEO & Chairman
Metropolitan Transportation Authority
347 Madison Avenue
New York, NY 10017

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