This posting was so thought provoking I just had to pass it on. I didn't see any way to link effectively so I had to cut and paste. Hope that's ok.

"Richard Mlynarik Reply:
December 16th, 2010 at 1:39 pm

A highly politically juiced (usually military-industrial) company sets up a shell operation to “partner” with the shifty backwards foreigners who design and make stuff.

The particular group of foreigners involved are chosen on the basis of political amenability and kickbacks and willingness to pander to the US domestic “enabling” enterprise, and is unrelated to expertise or quality. (Well, the correlation tends to be negative. Paging Ansaldo-Breda!)

The shell corporation proceeds to add 50 to 100% or more to what would be the import price of working manufactured goods by
* installing an entire layer of worthless local management to fill out the “domestic” company
* fuelling a race to the bottom where different municipalities/states are suckered into not only out-competing each other to offer no-tax facility siting, but also to buying and building out sites to the private corporations needs, and forkiong out huge piles of money to “create jobs” .. nearly all of which immediately flows out of the local economy and sinks without a trace into the parent company’s byzantine tax-sheltered and often off-shore structure.
* employing an army of grotesquely incompetent (they wouldn’t be working in the US if they were employable elsewhere, after all) local consultants to redesign and respecify for “unique American conditions”
* failing to deliver anywhere near on time or on budget, and positively thriving on ECOs, redesign, acceptance testing, re-redesign, etc. The longer this goes on the more profitable. The nominally “public” agency is completely over a barrel, throwing more and more good money after bad, because the project is too big to fail, and because, naturally all the eggs have been placed in one contractual basket. (Compare with Spain, where they started off buying off the shelf when they were a backward nation and today successfully continue to award multiple contracts to multiple vendors at all levels — design, civil, systems, rolling stock, etc — in order to avoid lock-in and vendor capture. Their costs of course are a fraction of ours. Coincidence? Hardly!)
* Employ a small cadre of local yokels to be paid to screw together the “American” trains. The wages involved are paltry compared to the overall contract cost, but this is pure political fig-leaf theatre. On-the-take (or just plain dim-witted) hard hat union rep types show up all the time to boost “good jobs for good American workers”, but the reality is that it is a shell game, with money being stolen from the taxes of honest American workers to pad the bottom line of dishonest “American” shell corporations.
* Because the redesigns (unique local conditions!) rolling stock is assembled by an unskilled workforce in a throw-together ad-hoc plant, and because “quality control” is something that only appears on Powerpoint slides, the delivered product will be vastly over-priced, delivered years late, fail to meet advertised contracted technical requirements, and be massively failure-prone for the first decade or more of service. (Mmmmm… more ECOs. More profit. Too big to fail!)

Nevertheless, this will be trumpeted as a triumph for unique American Know-How, as of course “these things happen” and one “should expect” “unexpected problems” with a “brand new” system. (See for example 90% of the contributors to this blog).

So, that’s how it works to Buy American.

Look at pretty much any transit bus or train in the country (almost uniformly relics from somewhere circa 1970, even when built today) — and at the budgets of the transit agencies — and you’ll see just how excellently it works for all concerned."