Good jobs no longer an afterthought in awarding lavish transit contracts

LOS ANGELES — When shiny new light-rail cars roll out on L.A. Metro tracks in two years, they will likely have been made by a Japanese company. But most of the workers who assemble them will be American.

In Chicago, a $2 billion railcar contract will be won partly on the basis of job creation in the U.S.

And an estimated $3 billion Amtrak contract to manufacture high-speed trains now also evaluates bidders on their hiring of Americans, investment in U.S. factories, employee training and the hiring of disadvantaged workers, such as veterans.

There is about $5.4 billion in transportation spending in the pipeline in the U.S. each year over the next decade, and a new national coalition is leveraging these taxpayer dollars to generate jobs in the U.S.

Jobs to Move America, the brainchild of the Los Angeles Alliance for a New Economy (LAANE), is garnering support across the nation. Community, faith, labor and civil rights leaders have joined forces with academic, philanthropic and environmental groups to push companies competing for lucrative transportation contracts to put some of that money back in the U.S. economy.

The U.S. Department of Transportation, which provides funding to most transportation projects, has stopped short of endorsing the coalition’s U.S. employment plan. But the federal agency is working with transit agencies that want to use it, on a case-by-case basis. It has approved taking the plan into account when awarding bids for contracts with the Los Angeles Metro, Amtrak, the Chicago Transit Authority and the Maryland Department of Transportation.

“Our goal with this is to change the way leaders think about procurement,” said coalition member Ed Wytkind, president of the transportation trades department of the AFL-CIO. Thirty-two transportation union presidents unanimously voted to endorse the plan last year.

“We reward bad employers who don’t pay living wages, who outsource most of their work overseas, who do not provide decent benefits, worker training. This is an opportunity to finally see procurement reward good employers,” said Wytkind. “This is a no-brainer.”

In the past, many U.S. transit agencies awarded publicly funded contracts to the lowest bidders among global manufacturers, with little consideration of long-term effects on the U.S. economy. Companies manufactured significant portions of America’s buses and trains abroad.

In Los Angeles County, the Metro needed railcars to expand lines to Santa Monica and Azusa. The transit agency worked with LAANE to add a U.S. employment provision to the contract, awarded more than two years ago to Japanese manufacturer Kinkisharyo.

“This had never been done before,” said Rachele Huennekens, a spokeswoman with LAANE.

The company is building 175 railcars for $739 million. Metro has an option to buy 60 more. “Nobody in the U.S. makes railcars,” said Paul Gonzales, Metro’s senior communications officer. “Basically, there are three places to buy them from” — Germany’s Siemens, Italy’s AnsaldoBreda and Japan’s Kinkisharyo International.

Kinkisharyo, the U.S. subsidiary of the Kinki Sharyo Co. in Osaka, Japan, won the bid. It not only agreed to do some of the manufacturing in Palmdale, California, but also moved its U.S. headquarters from Massachusetts to El Segundo, in Los Angeles County.

To date, Kinkisharyo has 153 employees in Los Angeles County. When production picks up next year, the number will go up to 194, said Coby King, a company spokesman. Kinkisharyo wants to build a facility in the U.S. to manufacture railcar shells.

It’s not all smooth sailing, however. There is opposition from labor groups in Los Angeles County that want the plant to unionize and from residents concerned about the environmental impact. Jobs to Move America is holding both Metro and Kinkisharyo accountable. It just sent a letter to Metro saying that the Japanese manufacturer may be in breach of contract because it has yet to hire all the workers it said it would.

“That was the genesis of Jobs to Move America,” Huennekens said. “How do we leverage the Metro contract and demand disclosure from all the bidders competing?”

But Gonzales said, “They are ahead of schedule. Metro is satisfied.”

The railcars are technically not made in the U.S. They’re built in Japan, disassembled, shipped here and reassembled, Gonzales said. The first of two pilot cars were just delivered. But a new plant would make the car shells in the U.S., adding 100 jobs.

Palmdale residents and local labor unions have filed a series of California Environmental Quality Act appeals.

“We are in the midst of the worst drought of a lifetime,” said Kathy Mac Laren, a Palmdale resident and member of the Antelope Valley Residents for Responsible Development. The group is proposing a plan to mitigate environmental impact. All this could delay expansion.

“Because of opposition and delays caused by LAANE and union allies, there are plans to have the plant outside of California,” King said. “They have made it impossible to move forward. The company has no choice. We’re looking at locations out of state.”

Whether Kinkisharyo builds its plant here or in another state, the jobs will remain in the U.S.

“Our contract only establishes that work be done in the United States,” King said.

The Los Angeles transit agency also put in an order for 550 clean-fuel buses that went to New Flyer Industries, a Canadian company. But many are manufactured at a factory in St. Cloud, Minnesota, bringing 150 new jobs to the small city.

Ana Santos, 40, an immigrant from El Salvador who is now a U.S. citizen, said she applied for a job at New Flyer six times before she was hired. She finally got the job when her English language skills improved, but it was office work.

“I wanted to work in the factory,” she said. She finally got what she wanted, and she now places stickers on buses that end up on the streets of Los Angeles.

Her husband, Luis, also works at the factory, installing windows on the buses.

“It’s so exciting,” she said. “I plan to retire from there.”

The Jobs to Move America program provides a scoring system based on hiring and training of American workers. The more companies do to help the U.S. economy, the better their chances of winning the bid.

Huennekens said that there are actually about a dozen companies globally that manufacture passenger railcars and that many have manufacturing plants in the U.S.

Jobs to America just released a new interactive online map detailing 34 current and upcoming purchases of buses and trains in 24 states as well as locations of 28 bus and train factories in 15 states. Cities with upcoming transit projects include Houston, New York, Las Vegas, Cleveland, Seattle and Baltimore.

“What’s exciting about this project and coalition is that in various cities where new contracts are being considered, we have on-the-ground advocates who have been able to meet with transit agencies,” said Anastasia Christman, senior policy analyst at the National Employment Law Project.

The plan is being considered in Maryland for an extension of the Washington Metropolitan Area Transit Authority metro system.

The coalition is helping knock down regional barriers, she said. It may be tough for Chicago advocates, for example, to push for jobs that may not end up in Chicago but at a manufacturing plant across the country.

“Usually, states and cities are fighting each other,” Christman said. “The coalition is there to form a bridge.”

The bottom line is that “good jobs are no longer an afterthought when we spend billions of public dollars on transit equipment,” said Madeline Janis, director of Jobs to Move America.