CNN — LOU DOBBS TONIGHT — Aired December 29, 2008 - 19:00 ET
KITTY PILGRIM, CNN CORRESPONDENT: The federal government tonight is on the brink of giving General Motors and Chrysler billions of dollars in emergency loans. But the government is not requiring carmakers to buy American auto parts. Now supporters of a "Buy American" provision say tax dollars could actually subsidize foreign companies. Bill Tucker has our report.
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BILL TUCKER, CNN CORRESPONDENT (voice-over): When the American automakers went hat in hand to Washington to ask for a bailout they ran into a lot of resistance and skepticism, if not hostility. Congressman Don Manzullo at one point put the head of Ford on the hot seat over the issue of outsourcing.
VOICE OF REP. DONALD MANZULLO (R), ILLINOIS: Are you going to use U.S. taxpayer dollars to resource or to source more tool and dye equipment and fasteners from overseas facilities for American manufacturers?
UNIDENTIFIED MALE: No. No.
TUCKER: That reassurance from Ford, which is not receiving any bailout money, apparently was enough. Congress did not include any buy-American requirement in the loans to GM and Chrysler requiring them to buy parts from suppliers here in the U.S. And according to data from the United States Business and Industry Council, parts made overseas are rapidly increasing in market share, threatening America made parts and in turn American factories and jobs.
In the decade from 1997 to 2006, imports for auto lighting equipment more than doubled. Imported engines and engine parts rose by a third and imported power train and brakes dramatically increased. Supporters of a buy-American provision say the requirement would bailout the automakers while giving a boost to the broader manufacturing sector. They say not doing so could have negative consequences.
ALAN TONELSON, U.S. BUSINESS AND IND. COUNCIL: If these companies are not at some point very soon, held to much higher U.S. content requirements, these precious taxpayer dollars are going to wind up subsidizing foreign auto making and foreign auto parts making and foreign economic growth, rather than growth and revival in the U.S. economy.
TUCKER: As for trusting the automakers?
REP. BRAD SHERMAN (D), CALIFORNIA: Careful reading of the written pronouncements of the automobile companies indicates that they themselves are not going to adhere to the kind of tough conditions that the American people expect and that the auto industry needs.
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TUCKER: Now, those opposed to a buy-American provision say that such a provision is unworkable given the complex nature of global supply chains and they argue that a buy-American provision is likely, not legal, under the rules of the World Trade Organization, which may seem incredible, Kitty, but there you have it.
PILGRIM: You know the buy-American has great logical appeal, though, when you actually describe it.
TUCKER: What happens is our trade agreements set us up for a conflict of national interest versus international interest and it's going to be a difficult one for Congress to have to resolve because everybody likes to play this aren't we good guys in the international world and they've been hesitant to put our own national interests in front, which is arguably what they need to be doing right now.
PILGRIM: Thanks very much. Bill Tucker.
