The Loma Prieta Earthquake that rocked the San Francisco area in 1989 caused 63 deaths and over 6 Billion dollars in damage. Who could forget the images of the collapsed double decker span of the Cypress Viaduct or the dropped section of the San Francisco –Oakland Bay Bridge. Twenty two years later most of the damage and debris is long gone only the San Francisco- Oakland Bay Bridge is still being worked on. Actually it is being replaced with a new, earthquake resistant span that will be completed sometime in 2013.
Five years ago when The California Transportation Authority estimates on the project “cachinged” at a cool 7.2 billion dollars the state decided to seek no Federal funding. They were going to go it alone. Bids went out and quotes came in including a bid from a foreign company called “Shanghai Zhenhua Heavy Industries.” When all the bids had been checked it turned out that SZHI’s bid was 400 million dollars cheaper than the bids by the American companies.
Tony Anziano, a program manager at the California Department of Transportation explains what happened next, “There was a $400 million differential in that bid and in that case it would have required the work to go international.”
You see, when California decided “not” to use any Federal money for the project the state was no longer bound by Federal law to use US Steel; they had the freedom to go elsewhere and this time the elsewhere was China.
So who is Shanghai Zhenhua Heavy Industries? Let’s take a little closer look at this manufacturing giant.
First of all they are owned by China Communications Construction Co who in turn is owned by the Chinese government. Convenient.
They have access to a wealth of cheap labor…Chinese workers make $12 a day toiling from 7 a.m. till 11 p.m., seven days a week, and sleep in a company dorm room.
They have easy access to the large sums of money required in contracting since they are state owned.
Because of the large profit margin, they hire globally renown architects to demonstrate they can deliver better designs than anyone else.
They have a fleet of government ships to transport the steel and prefabricated pieces anywhere in the world.
Bob LaVenture, a district director for the United Steel Workers Union said of the deal,
“There is no way that American workers will be able to ever compete with $12 a day. It‘s just not right and it’s not right for America.”
But according to National Public Radio Anziano went on to say that it wasn’t just a money thing. It was capacity:
“In this particular case, we had full-time staff on site over in China — 24/7 — that monitored all aspects of fabrication work and performed their own quality-assurance testing,” he said. “So we have a very high level of assurance about what we are getting.”
Despite all the reassurances by CDT California Assemblyman Luis Alejo says that even at a savings of hundreds of millions of dollars, the decision to outsource has done more damage to California than it was worth.
“When you have a project of that size here in California it has a multiplier effect,” he said. “It gives thousands of families those jobs and then those paychecks and their subsequent spending ends up going back into our economy. And so now all that money has permanently disappeared from California.”
But in all fairness to California this is not an “all Chinese” project. The assembly of all the prefabricated pieces is being done by American labor working for the American Bridge Company. And according to the “Guardian” California is not alone in this practice;
“…five of the world’s top 10 contractors, in terms of revenue, are now Chinese, with likes of China State Construction Engineering Group (CSCEC) overtaking established American giants like Bechtel.
CSCEC has already built seven schools in the US, apartment blocks in Washington DC and New York and is in the middle of building a 4,000-room casino in Atlantic City. In New York, it has won contracts to renovate the subway system, build a new metro platform near Yankee stadium, and refurbish the Alexander Hamilton Bridge over the Harlem river.”
When this project was started 5 years ago unemployment in California was hovering around 5%; today it’s closer to 12.1%. Yet California, along with several other states, feel American industry can no longer handle this kind of massive production. You know what, Chinese industry couldn’t handle any kind of job twenty years ago. They invested money into their industrial complex while America let theirs deteriorate. The Chinese went out and built their own roads, bridges and railways and through experience became good at it while America closed manufacturing plant after plant and laid off thousands of experienced workers. American contractors talked tough about “Build America” and “Jobs in America for Americans” but talk is cheap, Chinese cheap.
America used to be the Industrial giant of the world when quality of product and work meant something. Now it’s how cheap can you build it and how fast can I get it. If America is to bounce back from this depression our industry needs to lead the way and it can only do that if the playing field is level. This administration and all those that follow need to see that it is. They need to insure that America is built by Americans and if it costs more than so be it. But I think that when that cost is analyzed they will find that in the long run it is far cheaper for America to rebuild American.
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Excellent article. I agree with you, Ira. America needs to bite the bullet and use American Companies even if it does cost more. To use Chinese companies may save money initially up front but that only exacerbates our unempoyment problem which contributes to the recession which translates into less taxes going in our natonal coffers. The end result is more loans from China. So….in the long run, you are right. Use American to build America.
I agreem we should be buying American to build America. We need more patriots in the USA who love our country more than money. Also, what about the possibiltiy of kickbacks being made to award these contracts? Are individuals lining their pockets to award the contracts?