Management & Operations

Supporting ‘Buy America’ should be easy

Posted on July 1, 2002 by Frank Di Giacomo, publisher

Do you own an American car or an import? Whatever you drive, you probably made your purchasing decision on several factors: affordability, style, image, word of mouth and personal taste. There’s no need to feel guilty if you drive a car built overseas, because you’re spending your own money. Whether you’re an American driving a German car or a Frenchman driving a Swedish car, you have the right to buy the car that fits your needs. Why shouldn’t the same be true for transit buses and railcars? Shouldn’t you be allowed to buy, for example, the 40-foot low-floor bus that best meets your operational needs, whether it’s manufactured domestically or imported? Yes, you should, as long as you’re spending your own money. If you’re spending federal tax dollars, well, that’s a different story, because now you’re spending money tapped from U.S. citizens. It’s only natural that the federal government would require that those tax dollars be invested back into the U.S. economy. A tough, but fair law That’s why the Buy America law is a good law. Under Buy America, which has been on the books for more than two decades, transit properties must certify that rolling stock purchased with federal funds is assembled here in the United States and has a domestic component and subcomponent content of more than 60% (based on cost). In a June 10 Dear Colleague letter, the Federal Transit Administration (FTA) reaffirmed its commitment to the tenets of the Buy America program: “FTA vigorously enforces this regulation and strives to ensure that our grantees have the best vehicles to carry the riding public,” FTA Administrator Jenna Dorn wrote in the letter. Yes, Buy America regulations are restrictive. But, more importantly, they’re reasonable, especially when combined with the judicious use of non-availability, price-differential or public interest waivers. In a meeting last month, Jenna told me that one of her goals is to make sure that the manufacturer community understands the reasoning behind each decision on a waiver request. “We’ll do everything we can to provide an open environment in which the decisions can be seen to be rational and appropriate to each case,” she said. Other relevant factors You must also remember that domestic manufacturers — as well as foreign companies that have invested millions of dollars in locating manufacturing facilities here in the U.S. — face many home-grown challenges, including costly government-mandated health, safety and employment regulations. In addition, the U.S. government does little to bolster the financial health of its rolling stock manufacturers compared to countries such as Canada, which is not reluctant to supply huge loans and other subsidies to ailing manufacturers. What most U.S. suppliers will tell you is that they’re only asking for a “level playing field” against foreign competitors, that they be given the same ability to compete in markets outside the United States. Unless they commit to investing in factories and related infrastructure in those countries, they’re effectively locked out of those markets. In the long run, what’s best for the riding public are high quality, efficient and safe buses and railcars that are supported by the manufacturer for the long term. In most cases, U.S. manufacturers can produce these vehicles and transit authorities can purchase them accordingly. In the other cases, the FTA has the prerogative to grant waivers, although these should be parceled out only when reasonable alternatives do not exist. Like all good laws, Buy America fills a need but offers enough flexibility to ensure that diverse interests can be balanced.

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