Chicago’s $2 Billion Decision: Will it Buy U.S.?

Kari Lydersen

Chicago's fleet of elevated trains will be joined by 846 new railcars. But who will make them?

In February, the Chicago Transit Authority (CTA) announced that it plans to spend up to $2 billion on as many as 846 new cars for its elevated train and subway system, and issued a call for bids from manufacturers. According to the L.A. Alliance for a New Economy (LAANE), an economic justice advocacy group running a national campaign pushing transit agencies to source parts and labor in the U.S., a purchase of that size could create more than 20,000 American jobs. 

Now, a coalition of Chicago labor, community and faith groups has signed a letter asking the CTA to require bidders to disclose where they would manufacture the cars and buy their parts. The letter was sent June 17 to CTA president Forrest Claypool, with copies going to Mayor Rahm Emanuel and Governor Pat Quinn.

What the letter is asking for at a minimum is simply information,” LAANE national policy director Madeline Janis told In These Times. How many jobs will be created, who will get the jobs, what are the wages and benefits. Right now there is just no requirement that companies even say how many jobs are created. The way the CTA is going, it will be a big mystery and a big zero. At the very least we want to know and have that information public.”

Federal law requires a competitive bidding process for projects that involve federal dollars — such as the transit buy — and forbids mandates on where the labor associated with the project will be performed. But the CTA is free to request the information and take it into consideration in its evaluation of bidders, says Janis. LAANE has proposed an American Jobs Plan that would demand that contract bids on transit projects include information on the quantity, proposed wages and benefits, location, investment in workforce training and plans for recruitment of disadvantaged workers related to the proposed manufacture of the vehicles,” as the letter explains.

Chicago’s public transit system is the second largest in the nation, with 1,200 rail cars covering 224 miles of track with 145 stations. Deciding what information bidders must submit and awarding contracts is up to the CTA, whose board is composed of four people appointed by the mayor and three by the governor (whose appointees must be approved by the mayor and state senate).

According to Janis, Chicago’s is the biggest transit agency purchase in the works right now. LAANE is also targeting planned purchases of high-speed-rail cars in California and commuter train cars in Maryland, along with transit buys in the Twin Cities and Detroit.

Backers of LAANE’s national campaign say that depending on where the CTA gets its new rail cars, which are slated to start arriving in Chicago in 2016, it could create new union jobs in the U.S. rather than sending work to low-paid, non-union workers in China and Mexico, where such purchases are often made. According to the letter, the cars that the CTA is currently receiving (from its previous contract) were assembled from parts manufactured in Sahagun, Mexico and in China.

Though there is not currently a rail car factory in the Chicago area, Janis tells In These Times that such a large purchase could spur creation of a new factory, adding that new factories are in the works in L.A. because of the city’s new rail car and bus buys.

The purchase of modern, safe and cost-effective equipment for our aging system and the creation of jobs and economic development for Illinois residents and American workers are both critical outcomes for this purchase,” says the letter, signed by leaders of groups including Arise Chicago, the Chicago Federation of Labor, Blacks in Green, Chicago Jobs with Justice and the Chicago and Cook County Building and Construction Trades Council. Representatives of labor unions representing machinists (IAMAW Local 26) and electrical workers (IBEW Local 9) also signed.

Janis acknowledged that there is always a balance” involving the cost to taxpayers when transit agencies are making a purchase. But she said companies assembling cars or buses in the U.S., and even companies supplying parts, can be hotly competitive” with foreign companies. Even if parts are made abroad, she added, an assembly factory could create several hundred good jobs” for welders, machinists and the like in the U.S.

There’s guaranteed quality because it can be inspected directly, and you get quality when you pay a fair wage and treat people well,” said Janis. This is public money — shouldn’t we be investing in our economy, in a double bottom line?”

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Kari Lydersen is a Chicago-based journalist, author and assistant professor at Northwestern University, where she leads the investigative specialization at the Medill School of Journalism, Media, Integrated Marketing Communications. Her books include Mayor 1%: Rahm Emanuel and the Rise of Chicago’s 99%.

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