The project is expected to create nearly 500 new full-time jobs at the factory, but it’s still a missed opportunity.
Global rail maker Hitachi Rail announced Monday that Washington, D.C.’s new fleet of 8000-series rail cars will be built in Washington County, Md. The $70 million factory is projected to employ up to 460 workers and begin operation by winter 2023.
Reportedly, 60% of the plant’s construction value will be spent with suppliers from across the region, equating to more than $40 million.
This is all good news for Washington County, but the benefits of the up to $2.2 billion Washington Metropolitan Area Transit Authority (WMATA) contract that Hitachi won could have been more widely felt had WMATA applied Buy America to the project — something we called for back in 2020 when we noticed that WMATA was using some tricky accounting gimmicks to avoid doing so.
Back then, WMATA chose to circumvent Buy America rules through an accounting loophole. In cobbling together funding from D.C., Maryland and Virginia, the Metro authority largely bypassed federal mandates for domestic procurement, meaning that the money spent on the metals and other components from which the rail cars are built could be brought in from overseas.
Had WMATA included federal Buy America laws in its contract, the company that received it would have been required to ensure that 70% of the cost of the components that go into the rail cars come from the United States, and that final assembly of the cars take place in the U.S. as well.
The economic boost to American workers that Buy America provides is very real.
A 2009 report found that “manufacturing employment gains from infrastructure investment can increase by up to 33 percent when the amount of domestic materials purchased are maximized with the inclusion of strong domestic provisions.”
Alas, WMATA missed this tremendous opportunity to reinvest taxpayer dollars in workers and factories across the country. This decision stands in sharp contrast to President Biden’s approach to the massive $1.2 trillion Bipartisan Infrastructure Law that was passed in 2021.
Biden has said it is his administration’s mission to strengthen Buy America, recognizing it as a critical means of extending the power of government spending.
“When we use taxpayer dollars to rebuild America – we are going to Buy American: buy American products to support American jobs,” Biden said during his March 1 State of the Union address. “The federal government spends about $600 Billion a year to keep the country safe and secure. There’s been a law on the books for almost a century to make sure taxpayers’ dollars support American jobs and businesses. Every Administration says they’ll do it, but we are actually doing it. We will buy American to make sure everything from the deck of an aircraft carrier to the steel on highway guardrails are made in America.”
We’re always happy to see the creation of new factory jobs in the U.S., but WMATA could have done so much more to ensure that valuable taxpayer dollars support American workers. Now, we’ll be looking to President Biden and his team to do the right thing and ensure Buy America is properly applied to all of those new infrastructure projects.