Posted on 07/21/2003 1:51:44 PM PDT by Brian S
Secretary of Defense Donald Rumsfeld says he will urge President Bush to veto legislation authorizing defense programs unless new "Buy American" requirements are removed from the bill.
As passed by the House, the bill increases the amount of U.S. content required in major Pentagon purchases from 50 percent to 65 percent, and requires defense contractors to use American-made machine tools, dies and industrial molds on future contracts. The legislation also adds eight new types of products to the list of defense purchases that must be 100 percent American.
| 'Buy American' provisions in bill |
| The House version of the Defense Authorization Act: • Increases the amount of U.S. content required in major Pentagon purchases from 50 percent to 65 percent • Requires defense contractors to start using American-made machine tools, dies and industrial molds • Adds eight new products, ranging from ordnance fuses to tires, to the list of products that must be made entirely in America • Creates a $100 million fund to establish domestic capabilities to produce critical defense items now available only from foreign sources or a limited number of U.S. contractors |
Rumsfeld, however, says the provisions "would deny to U.S. forces critical technologies and capabilities obtainable only, or most economically, from non-U.S. sources." The provisions "could produce a damaging reduction in the DoD supplier base and cost the department and its U.S. contractors billions of dollars," Rumsfeld wrote in a July 8 letter to House Armed Services Committee Chairman Duncan Hunter, R-Calif.
Rep. Don Manzullo, chairman of the House Small Business Committee, disagrees with Rumsfeld.
"We have the most advanced military force in the world, and we should have the ability to create the most advanced weapons on our own," Manzullo says.
The Republican represents Rockford, Ill., where the unemployment rate is 11 percent, largely because its machine shops and other manufacturers are losing work to overseas competitors.
"We just lost another factory, another 800 workers, to China," Manzullo reported at a July 9 hearing on the Buy American provisions.
Olav Bradley, president of P.M. Mold Co. in Schaumburg, Ill., says industrial mold makers are "getting killed."
Everything in manufacturing starts with industrial molds and machine tools, he says.
"If we go down," he says, "manufacturing as we know it in the United States will go down."
Manzullo also has seen first-hand how the Pentagon's policy of allowing major defense contractors to use foreign suppliers can hurt U.S. companies. The decision of Northrop Grumman to purchase drilling machines for the F-35 Joint Strike Force fighter from a Spanish company instead of Rockford-based Ingersoll International "bankrupted one of America's finest companies," Manzullo says.
American taxpayers' dollars should be spent in America, particularly when the U.S. manufacturing base is being "hollowed out," he says.
Plus, a strong domestic machine tool industry is needed for national security, says Chip Storie, vice president of aerospace sales for Cincinnati Machine. Storie says his company is one of only a handful of companies, including one in France and one in Spain, that makes composite processing machines for aircraft components, including stealth technology.
"I do not believe that we want our defense capabilities being controlled by the prevailing political whims of foreign governments, no matter how close an ally they are considered," Storie says.
Suzanne Patrick, deputy under secretary of defense for industrial policy, says the Buy American provisions are based on "inaccurate presumptions."
Far from being weak, American aerospace/defense companies enjoy operating margins that are 50 percent higher than they were in the 1980s, Patrick told Manzullo's committee. Aerospace/defense exports support 300,000 jobs in the United States, she added.
"Indeed, in a faltering economic setting, defense is a robust contributor to economic growth, and innovative defense companies of all sizes will continue to benefit from robust defense spending trends over the balance of this decade," she says.
Any foreign content in U.S. defense systems is being managed "very prudently," Patrick says. A seven-month study of eight major defense systems in 2001 found that less than 2 percent of the content was produced abroad, she says.
During the war with Iraq, there were no instances when the U.S. military failed to get foreign-produced supplies as scheduled, even in cases where the foreign suppliers' governments opposed the war, she says.
Limiting the flexibility of contractors to use whoever can provide the best product at the best price would increase costs by up to 30 percent, she says.
Plus, many small and medium-sized businesses would be hurt, not helped, by the Buy American provisions, contends the Suppliers Management Council of the Aerospace Industries Association of America.
"The Buy America amendments would put many aerospace vendors out of business by closing the door to manufacturing components, such as silicon chips and flat panel displays, that companies can obtain only from offshore suppliers," says SMC Chair Judy Northup, vice president of Dallas-based Vought Aircraft.
The Buy American provisions also would add burdensome reporting requirements, contends AIA, and would discourage companies who primarily sell to commercial markets from offering their products to the Pentagon.
Replacing foreign-made machine tools with American-made ones also could pose a significant burden on small defense contractors. But Manzullo says Hunter has agreed to remove the machine tools provision, replacing it with a less stringent requirement. Under the new amendment, equipment purchased by manufacturers to fulfill contracts worth $5 million must meet a 70 percent domestic content threshold.
The US manufacturing base wasn't hollowed out by a lack of domestic DoD purchases. It was killed by EPA regulations and labor unions.
So, if we go to war with the foreign country of the supplier, we can still expect the supplier to provide us the materials?
Susanne Patrick is a moron.
I too usually try to buy American, except for automobiles in recent years. As a long-time Chevy person, I have always loved their truck design and quality. However, years ago I purchased my first Toyota truck and have found their quality to be outstanding. I've now owned three Toyotas including two Tacomas and one Camry. I had very recently considered going back to Chevy for a new 2004 Silverado but GM's anti-Christian policies have caused me to relent. Far now, my plan is for a new Toyota Tundra. I guess if we ever go back to war with Japan I may have some problems getting parts, although my experience has been I will not need many in the first ten years of ownership. LOL
Muleteam1
YBUY4N
Is the Tundra designed in the U.S. or in Japan? It is the engineering and design that concerns me more than the final assembly. American automobile engineering seems to have lost their ability, or desire, to engineer long-lasting vehicles even though automobile costs have skyrocketed way past other large item prices.
I have heard the Tundra V8 engine is a GM engine. Is this true? At any rate, they do have very nice styling for sure.
Muleteam1
Muleteam1
Dead right. I would add that our troops need the *best* equipment that money can buy. Anything else is letting people die that need not die.
If the best equipment is *not* available in the U.S. then we have no choice but to buy foreign while we figure out what in the *hell* is wrong with the U.S. supplier.
All else being equal, then of course it is a better strategic policy to buy from domestic suppliers.
It hurts America to pay more for an inferior product.
What's mixed up here is the symptom and the disease. Buying foreign isn't the problem, its the symptom. If we are making the best stuff at the most cost-effective price then the point is moot. If we are not, then we need to go back and figure out why not. Solve that... and the rest follows.
I say this as someone that until the last few years has owned a few Hondas and a Toyota pickup. Now we have a Jeep cherokee, a Ford mustang and a Chevy pickup (colors are red, white and blue, in that order-- quite by accident, honest). We didn't set out to buy All-American on purpose. It happened that way because at the time that each of these were purchased they were the *best* value for the money. That's the way it should be.
Incidentally, when I bought the Mustang I also looked at: BMW, Jaguar, Honda, Mitsubishi, Toyota and Chevy. All were within my price range. The Mustang was the most car for the money. Simple as that.
Yeah, but my 4.6 has more horses and more torque... :-) It is, I must say, an enormous amount of fun to occasionally remind the kids with the rice rockets what a good old-fashioned American V8 can do... from time to time... not that I make a habit of it or anything. Honest.
I have to admit, this FORD has been among the most reliable cars I've ever owned. Rock Solid. Quality is easily up to and better than any other car I've owned. That... and it goes like a bat outta hell... did I mention its a convertible?
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