Alliance For American Manufacturing: Memo to Massachusetts: It’s Time to Buy American

The Alliance for American Manufacturing joined Massachusetts manufacturers on Tuesday to urge the passage of legislation to apply domestic content preferences to state government spending.

Massachusetts has an opportunity to ensure it reinvests taxpayer dollars right back into Bay State workers and businesses — and increase its manufacturing footprint.

Right now, the state legislature is considering a big legislative package designed to spur economic development in the state. Titled An Act Relative to Strengthening Massachusetts’ Economic Leadership, the legislation has the backing of Gov. Maura Healey and includes a whole lot of initiatives, including funding to help spur factory growth in clean energy, biomanufacturing, and other advanced manufacturing.

That’s pretty good stuff — but we think the legislation can be even better.

The Alliance for American Manufacturing is among the organizations urging legislatures and the governor to include language in the bill that will create domestic content preferences for state government spending, ensuring American workers and manufacturers get the first shot at taxpayer-funded contracts — and stopping taxpayer money from supporting foreign production abroad.

In fact, there’s already legislation in the Massachusetts legislature, titled An Act to Promote American Manufacturing, that we and others think would be a perfect fit and should be included in the big economic package.

AAM’s own Brian Lombardozzi testified before the Massachusetts Joint Committee on Economic Development and Emerging Technologies on Tuesday, urging lawmakers to add that Buy America language into the overall economic legislation. Lombardozzi testified:

Reinvesting tax dollars into the local and national economy promotes growth, expands the tax base, and – by creating more job opportunities for middle-class Americans – reduces the burden on social safety net programs.

As companies continue to invest in their U.S. operations, they modernize plants to make them safe and efficient, and create jobs in the process. This legislation will ensure that as Massachusetts regulates the way U.S. manufacturers do business, Massachusetts will do its best to encourage U.S. production and investment. H3108/S2026 – An Act to Promote Manufacturing will ensure that compliance with U.S. environmental and labor standards is the standard for doing business with the one of the globe’s biggest customers.

As Lombardozzi noted, both the federal government and a slew of states have domestic content preferences on the books, including Northeast states like New York, New Jersey, and New Hampshire, along with Ohio, Pennsylvania, Texas, Florida, Illinois, Indiana, Maryland, Oregon, and West Virginia.

Without these preferences in place, Massachusetts is missing out on a chance to reinvest taxpayer money back into local manufacturers and workers, expand its local production capabilities, and grow the economy. Stephen Capone, the current president of the Steel Fabricators of New England and the owner of Capone Iron Corporation, said in a statement that businesses like his are forced to compete for taxpayer-funded government contracts against foreign-owned companies that don’t abide by the same labor and economic standards — or play by the rules.

“Fabricators in New England lose over 95% of public structural steel construction projects to foreign companies because we face unfair competition due to currency exchange rates and generous subsidies offered by their governments. They are not paying taxes here, or complying with local, state, and federal laws and regulations,” Capone said. “These factors all contribute to their economies and benefit their communities, promoting growth and investment into their factories, not ours.”

Capone further noted that many local companies are now simply opting out of even bidding on state contracts — and that is harming Massachusetts.

“There is no savings with foreign steel purchases. We are not saving money by purchasing cheap foreign steel,” Capone said. “Our taxpaying fabricators and their employees would generate more tax revenue through their wages and economic spending than any upfront savings on foreign steel. Our taxes paying domestic fabricators and their employees for public projects would generate more tax revenue on their wages and economic activity vs. any upfront savings. Something is fundamentally wrong with this type of imprudent spending and policy.”

Now Massachusetts lawmakers have a chance to turn things around.

“Without these sensible changes enacted into law, Massachusetts will continue a path of sending Bay Stater’s hard-earned tax dollars to foreign firms when American workers stand to do the work,” Lombardozzi told lawmakers. Our manufacturers and workers are anxiously watching, hoping that you will support these commonsense and necessary fixes to existing state law. Including domestic content language like that in H3108/S2026 – An Act to Promote Manufacturing Governor Healy’s proposed legislation… will tell these manufacturers and workers you support their jobs, their businesses, and their communities.”

We’ll continue to monitor the economic development legislation as it makes its way through the statehouse — and continue to encourage lawmakers to include An Act to Promote American Manufacturing in the final version.