UPDATE: AAM sent a follow-up letter on Oct. 27, 2014 to Gov. Deval Patrick acknowledging some clarification of the domestic content matter, but restating concerns relative to the selection of a Chinese state-owned enterprise for this procurement. Read the full letter.
The Massachusetts Bay Transportation Authority (MBTA) is set to award a $1.3 billion subway contract to a subordinate of China CNR Corporation Ltd. (CNR), a Chinese state-owned rail manufacturer supervised by the State Council of the People’s Republic of China. In doing so, MBTA is rewarding subsidized government-backed competition and missing an opportunity to create supply chain jobs.
In a letter sent to Massachusetts Gov. Deval Patrick, Alliance for American Manufacturing President Scott Paul said:
“While we appreciate that MBTA’s bidding process requires that final assembly of the subway cars be completed in Massachusetts, there are no guarantees that any actual component or parts manufacturing will be conducted within the Commonwealth or anywhere else in the United States. In fact, the consequences of this decision extend well beyond the missed opportunity to create supply chain jobs. By making CNR’s entry into the U.S. market possible, this procurement opens the door to unfair, state-owned competition on other rail and transit procurements throughout the United States – again, with no guarantee of any domestic content being used.
“This bid process is a drastic departure from federal procurements and those of many other states and cities, which require that U.S.-made parts and components be used in addition to mere assembly. Instead, the MBTA process has failed to recognize that such an award would undermine a highly competitive and extensive domestic supply chain of vehicle, system, and component part manufacturers that employ thousands of U.S. workers, including some in Massachusetts. To the contrary, CNR’s proposed Springfield assembly plant will be a vehicle – both literally and figuratively – for foreign-made parts and components.”
This bid process highlights the need for the Commonwealth of Massachusetts and the MBTA to reform their procurement selection process in a manner that rewards domestic manufacturing companies and maximizes employment in the United States. AAM urges support for state-level Buy America legislation – like S. 2094, sponsored by Senator Richard Moore – to ensure that Massachusetts’ infrastructure investments are truly American-made, maximizing job creation here at home and not in China.