Supporters of high-speed rail expect the start of construction in the central San Joaquin Valley to generate thousands of jobs over the next several years for a region where high unemployment rates linger in the wake of the recession.
Manufacturers hope the statewide train project will spark a resurgence in the domestic production of steel and other needed building materials. But in a town hall meeting Wednesday in Fresno, they also expressed fear that those materials could be outsourced to foreign producers -- at the cost of American manufacturing jobs.
Scott Paul, president of the Alliance for American Manufacturing, led panel discussions on "Buy America" requirements for more than $3 billion that the California High-Speed Rail Authority has received from the Obama administration to begin building the system in the Valley. About 150 people attended the session.
The AAM is a lobbying organization created by U.S. manufacturers and the United Steelworkers, a labor union representing about 850,000 workers in metal, mining, paper, chemical, glass and energy industries.
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The Buy America requirements are intended to create a preference for U.S.-made steel and other manufactured goods on projects for which federal stimulus dollars are spent. But, Paul said, it's no guarantee.
"There are loopholes," he said, pointing to the San Francisco-Oakland Bay Bridge, in which steel from China was used for a portion of the project where federal money was not used. A lot depends on how dedicated the contractors are to working with American suppliers, he said.
"The contractors who bid on projects, if they want to increase their margins, they want to source it from the absolute cheapest place," Paul said. Using domestic materials, however, carries other economic benefits beyond the price tag, he added.
"You will create 33% more manufacturing jobs in America if you have a Buy America requirement ... than if you don't," he said. On a project like high-speed rail, Paul said, the added cost of using domestic materials amounts "to a fractional, tiny amount of the overall project cost."
That small added cost, he said, is worth it. "A 'Made in America' high-speed rail system is a lot easier to sell than a 'Made in China' system. And it's good for manufacturing employment."
The would-be contractor for the first 29-mile segment in the Fresno-Madera area pledged Wednesday evening that nearly all of its construction materials would be domestically sourced. A consortium comprised of Sylmar-based Tutor Perini, Zachry Construction of Texas and Pasadena's Parsons Corp. submitted the low bid of $985 million for work to build the railbed, bridges and street overpasses from Avenue 17 east of Madera to American Avenue south of Fresno.
"A large component of the job is local material that is going to be mined out of the area here to build the road bed, and rebar, concrete and asphalt," said Jim Laing, Tutor Perini's vice president of operations. Those products as well as structural steel and pre-cast beams will be obtained locally, he said. Steel beams would likely come from manufacturers in the western U.S., he added.