Tens of thousands of people have a job in the transit and passenger rail supply chain, and they will lose out if Buy America doesn’t apply to the new D.C. Metrorail contract.
The Washington Post broke the big news last week that Washington Metropolitan Area Transit Authority (WMATA) officials have picked Hitachi Rail to build the next series of Metrorail cars.
There appear to be some good things in this deal. Part of the $1 billion contract is likely to include incentives to build an assembly plant in the mid-Atlantic, for example. And it’s especially good news that WMATA didn’t go with the China Railway Rolling Stock Corporation (CRRC), a Chinese state-owned company that poses major economic and national security risks.
But as my colleague Matt McMullan noted on the blog, there’s bad news, too.
While contract details are still being worked out, an accounting trick by WMATA likely means that Buy America preferences, which stipulate that 70% of the cost of components produced and the final assembly of the rail cars take place in the United States, will not be included in the deal. WMATA has said that it plans to buy the new rail cars only using money it received from D.C., Maryland and Virginia and not use any federal tax dollars on the purchase, thereby allowing it to avoid Buy America preferences.
This is infuriating on multiple levels. For one, WMATA gets a lot of money from the federal government — it receives around $460 million in annual funding from the U.S. Department of Transportation, and just nabbed another $767 million in coronavirus relief funds. So, the idea that it can just use state money to buy the new rail cars (and thus avoid Buy America) is rich.
But this short-sighted decision also means that potentially thousands of good-paying American jobs will be left on the table, since many of the components of the rail cars are likely to be imported.
That’s a slap in the face to American workers. There are more than 725 companies in at least 46 states that make components for transit and passenger rail. These companies employ tens of thousands of people and provide major support to their local communities, something that is especially important right now given the economic fallout of the COVID-19 pandemic.
But by using a sneaky gimmick to avoid Buy America, WMATA is bypassing these American factories, and instead will likely send hundreds of millions in taxpayer dollars overseas.
And remember CRRC? The complexity of the global supply chain means that parts made by the Chinese state-owned company could still wind up in those new Metrorail cars.
America’s factory workers deserve so much better. Please join the Alliance for American Manufacturing in telling WMATA to include Buy America preferences in the final contract with Hitachi Rail.