Posted in: Infrastructure,
by Gregg Laskoski on Aug 10, 2013 06:00 AM
Good news: We're rebuilding the nation's highways, roads and bridges. With so much transportation infrastructure in disrepair, clearly these large-scale projects represent what America needs most: economic investment; transportation improvement; jobs.
Bad news: In New York, something seems to have gone wrong. They're in the process of rebuilding the Verrazano-Narrows Bridge. The bridge opened in 1964 and remains North America’s longest suspension bridge. It connects Brooklyn with Staten Island. Only problem is, New York City's Metropolitan Transportation Authority (MTA) says its contractor, Tutor Perini Corp., couldn't get the steel from a U.S. steel producer so it bought from the lowest bidder -- $235 million worth of steel from China.
New York's Mayor Bloomberg is silent on the issue. So is Governor Cuomo. What a message to send to America's families and workforce!
How did this happen? Earlier this week, Peter Navarro wrote in the NY Times: "The Metropolitan Transportation Authority says a Chinese fabricator was picked because the two American companies approached for the project lacked the manufacturing space, special equipment and financial capacity to do the job. But the United Steelworkers Union claims it quickly found two other American bridge fabricators, within 100 miles of New York City, that could do the job.
He added, "The real problem with this deal is that it doesn’t take into account all of the additional costs that buying “Made in China” brings to the American table. In fact, this failure to consider all costs is the same problem we as consumers face every time we choose a Chinese-made product on price alone — a price that is invariably cheaper.
Consider the safety issue: a scary one, indeed, because China has a very well-deserved reputation for producing inferior and often dangerous products. Such products are as diverse as lead-filled toys, sulfurous drywall, pet food spiked with melamine and heparin tainted with oversulfated chondroitin sulfate.
In the specific case of bridges, six have collapsed across China since July 2011. The official Xinhua news agency has acknowledged that shoddy construction and inferior building materials were contributing factors. There is also a cautionary tale much closer to home.
When California bought Chinese steel to renovate and expand the San Francisco-Oakland Bay Bridge, for a project that began in 2002, problems like faulty welds by a Chinese steel fabricator delayed the project for months and led to huge cost overruns. Those delays eroded much of the savings California was banking on when it opted for the “cheap” Chinese steel."
U.S. Senator Charles Schumer (D-NY) expressed his alarm and disapproval : “If American government entities like the MTA don’t support a level playing field for American steel made by American steelworkers, no one will,” the senators declared. Schumer adds in his statement that using China steel is in direct conflict with the best interest of the NY economy. He said the Chinese government cheats on currency manipulation, plus state-owned steel companies get subsidies for energy and infrastructure that gives them a competitive advantage."
Navarro made the same point: "There is a second reason not to buy “Made in China” products: jobs. The abiding fact is that steel production is heavily subsidized by the Chinese government. These subsidies range from the massive benefits of a manipulated and undervalued currency to the underwriting of the costs of energy, land, loans and water.
Because of China’s subsidies — most of which are arguably illegal under international trade agreements — its producers are able to dump steel products into America at or below the actual cost of production. This problem is particularly acute now as China is saddled with massive overcapacity in its steel industry.
Of course, every job China gains by dumping steel into American markets is an American job lost. Each steelworker’s job in America generates additional jobs in the economy, along with increased tax revenues. With over 20 million Americans now unable to find decent work, we could certainly use those jobs as we repair the Verrazano Bridge."
The MTA said it was “strongly committed to using domestic steel,” but that the type of orthotropic steel deck panels used in the Verrazano-Narrows Bridge repair project is not produced by American companies. “We share the Senator’s interest and want to work with the steel industry to develop American capacity for orthotropic deck fabrication,” MTA spokesman Kevin Ortiz said.
There's little transparency here. Let's do the right thing, New York --Put Americans to work and build our bridges with U.S. steel!