Re: Chinese rail car production effects on US jobs
Author: Ernest H. Robl
Date: 05-17-2017 - 11:45
Sometimes it isn't just foreign suppliers underbidding U.S. manufacturers.
I once had an off-the-record discussion with a fairly high official of a class I railroad, in which the official related the following story:
The railroad wanted to buy rail made in the U.S., but for some applications, the railroad had very specific high-tolerance requirements. The railroad approached several U.S. manufacturers of rail and basically got this response: You buy the rail that we make. We don't do custom work.
Of course, this order would have been worth many millions of dollars, as this railroad is a major consumer of rail. But, the order went to a manufacturer outside the U.S. who was willing to work with the exact metallurgical specifications of the railroad.
This official said it was not a matter of pricing. The railroad would have been willing to pay more for domestic rail made to its specifications, as this would have meant a simpler supply line.
Just one example of how some global trade issues are not always as simple as they look.