Senator Schumer Sends Letter To DOT, Voicing Concerns About Proposed Rule That Would Hurt Alstom

April 26, 2015

Below is a copy of the letter that U.S. Senator Chuck Schumer has sent to Secretary Anthony Foxx of the Department of Transportation, regarding where train cars (like Alstom makes) are manufactured.

 

Dear Secretary Foxx,

I write to express serious concerns about the practical implications of the Local Hiring Pilot Program and the Notice of Proposed Rule Making onGeographic-Based Hiring Preferences in Administering Federal Awards(RIN 2105-AE38). While I understand the United States Department of Transportation’s (USDOT) goal in establishing the pilot program and issuing the proposed rule, the unintended potential impact of this action on certain industries and programs – especially on the manufacturers of rolling stock – could be disastrous. I urge you to adjust both the pilot program and the proposed rule to ensure that certain unintended consequences are avoided.

For example, in New York this effort could cripple the rolling stock producers and their suppliers and put hundreds of jobs at risk. There are countless New Yorkers employed at companies that rely on contracts from transit agencies that are federally funded. Companies like Alstom, Bombardier, CAF USA, Kawasaki, Nova Bus, Coach & Equipment, and Prevost are dependent on work from transit agencies throughout the country that utilize federal funding. These are capital equipment and labor-intensive operations that are rooted in the areas in which they are located. Allowing transit agencies to require local hiring would both create an unworkable standard and pose a significant threat to these manufacturers, as well as jobs at hundreds of their suppliers. If a transit agency were to utilize this local hiring provision, which USDOT is attempting to allow them to do, in rolling stock procurement, it would make it virtually impossible for manufacturers currently located in rural and suburban communities to survive. In addition, the proposal would trigger short-term job creation in communities with open contracts followed immediately by plant closures and lay-offs once the projects are completed.

Furthermore, this proposal could also significantly impact the cost of procuring rolling stock for transit agencies throughout the country. If local hiring were to be enforced on a procurement of rolling stock it could have the practical impact of forcing companies to build entirely new production facilities in communities every time there was a major job available in that region. This would require a massive capital investment on the part of the rolling stock producers and as a result significantly increase the cost to agencies and the federal government of procuring rolling stock. Clearly, this is not the intended impact of this program and this new rule, and it is vital that it be promptly altered to avoid this counterproductive outcome.

Given these implications I urge you to reverse course and alter your existing proposals to ensure that rolling stock producers are not adversely impacted by this program. Making it clear that local hiring preferences will not be allowed to be used in the procurement of rolling stock and other similar areas of the transportation industry is critical to ensuring the continued success of existing manufacturers and the best value for transit customers.

I appreciate your consideration of this request, should you need any additional information please do not hesitate to contact my office.

Sincerely,

Charles E. Schumer

United States Senator

Click here to see the proposal from the DOT.