Cisco Feeling Understimulated By 'Buy American' Policy

Posted by Bob Evans on Jun 10, 2009 05:18 PM

Seeking to gum up America's expansion into the 21st century by advocating Industrial Age processes, a labor union is demanding that Cisco and Alcatel-Lucent deconstruct their global supply chains to prove by hand that only U.S.-made components are going into a $7.2 billion government-funded project to expand broadband access. Cisco is finding these nativist policies to be anything but stimulating.

Cisco called certain requirements of the federal government's "Buy American" policy "grossly inefficient" and a "radical departure" from the way global corporations conduct business across many dozens of countries each day, reports Bloomberg News. And in concert with Alcatel-Lucent, Cisco said their ability to manufacture products for and lead the buildout of modern broadband infrastructure in the U.S. will be slowed by these requirements because the two companies tap into suppliers from across the globe.

As Cisco wrote in a recent filing about the project:

"Recent interim interpretations of the "Buy American" provision seem to have resulted in a disparity that could hamper the goals of the NTIA and RUS broadband programs. These projects rely on an inherently globalized supply chain, with many types of the most important components not produced within the United States at all. NTIA and RUS should thus utilize the waiver authority the Recovery Act grants them to make clear that the Buy American provision does not apply to any broadband projects, whether private or public."

Ah, but not so fast, says the Communications Workers of America union in an interview with Bloomberg. The CWA union seems to feel that these global-supply-chain-thingies are an evil construct created by Cisco and Alcatel-Lucent to enrich China and impoverish the United States.

"This is about creating American jobs – not Chinese jobs," the CWA spokeswoman told Bloomberg. "If you're claiming a router isn't made in America, show us." Toward that end, she recommends that Cisco and Alcatel-Lucent and every other supplier should be required to present exemptions proving that each of the thousands of pieces of equipment going into these projects meets the "Buy American" requirements.

(I wonder: how would this spokeswoman and the overseers of this Pecksniffian bureaucracy classify a Honda or BMW or Mercedes automobile that is made in the U.S.? Or, conversely, a GM vehicle that's made by the UAW in Canada? Then again, I'm not sure logic is the issue here.)

The Bloomberg reporters then do a great service to readers by stepping far outside the Internet and telecom sector in which this project falls and looking into just how well this "Buy American" brainstorm is stimulating the wastewater industry, which is pegged to get $6 billion in government funding for wastewater infrastructure. Steel pipes – what could be more American than that, right? Well, no. From Bloomberg:

"The stimulus spending includes $6 billion in municipal projects, and the wastewater industry isn't sure what equipment it can use, said Dawn Kristof Champney, president of the Water and Wastewater Equipment Manufacturers Association in Washington, which represents companies such as Irving, Texas-based Flowserve Corp. and Siemens AG, based in Munich.

"We are a globally sourced industry," Kristof Champney said in an interview. "It's a very, very frustrating process, and it's been stifling."

Wait a minute – did she say "stifling" and not "stimulating"? Let me doublecheck – yes, she said the purportedly stimulative stimuli from the head-in-the-sand "Buy American" plan are instead stifling the very workers, businesses, and industries they were supposedly going to help. With this kind of help, who needs competitors?

One final thought from the Bloomberg piece, and this from someone whose very organization and charter is about nothing but jobs for Americans: in a letter last month to President Obama, U.S. Chamber of Commerce president Thomas Donohue said the rules could eliminate jobs for some steel-pipe workers in the U.S. because those policies are impeding projects for wastewater and water plants, according to Bloomberg. As he wrote in his letter:

"American manufacturers are finding it difficult to comply with these new 'Buy American' rules because it is often impossible to avoid sourcing at least a portion of their content from other countries."

Reminds me of the title of a Talking Heads greatest-hits recording: "Sand In The Vaseline."