'Buy North American' law would hurt Illinois workers
The economy and our state's fiscal health are taking center stage in Springfield as the spring legislative session ramps up to its scheduled conclusion at the end of May.
Lawmakers will debate the best policies to put the state on the path for its strongest chances of recovery and renewal. One distraction that will slow that progress and should be stopped is an effort called Buy North American.
This is a recycled effort from previous general assemblies where some unions try to tap into strong feelings of patriotism by requiring state purchases of American-assembled products. This year, it's in the form of House Bill 3438 that would prevent the state from buying vehicles for its fleet that are made outside the United States and Canada.
The bill has been approved by a House committee and is awaiting consideration on the House floor.
Despite the rhetoric of its supporters, the Buy North American bill will hurt American companies and workers and cost Illinois taxpayers more to buy vehicles for state agencies. In the process, it may damage Illinois' important economic relations with Mexico.
Domestic automakers such as General Motors are the most heavily invested auto companies in our country. They partner with many companies in Illinois who manufacture and supply auto parts for vehicles - in some cases, more than half of the parts in non-U.S. vehicles come from American labor. More than 100 Illinois manufacturing companies who produce parts for vehicles assembled outside the US and their workers will be hurt by this bill.
By barring purchases of vehicles from outside the U.S. and Canada, Illinois would take off the market for fleet purchases several vehicles made by GM in Mexico, Korea and Australia. State Police will not be able to buy the Caprice, the only full-size, rear-wheel drive police cruiser on the market.
Instead of buying the Silverado at a discount when needing a rear-wheel or four-wheel drive vehicle, the Tahoe would be the next choice - costing the agency $2.5 million more to buy 150 vehicles a year.
If they cannot sell some vehicles to state government, local dealers in our communities who handle these fleet purchases will be hurt, as will the local governments who partner with the state on fleet purchases.
HB 3438 does allow purchases of vehicles assembled in Canada, but not in Mexico - the second-highest country for Illinois exports globally at $6.4 billion a year. Illinois ranks fifth among the 50 states for exports to Mexico and fourth in imports from our friends just south of the border.
A number of Illinois companies rely on strong relations with Mexico. But now we want to send a message to Mexico that we do not want its products?
The Mexican government and its allies are taking notice. In a letter to the leaders of the House Labor Committee on the eve of the vote on this bill, Consul General Carlos Jimenez Macias outlined his concerns that production lines developed between Mexican and Illinois companies over the past two decades could be hurt by increased production costs and reduced competitiveness. "I sincerely hope there will be further reflection on the impact this proposed legislation will have on Illinois suppliers and what has been, to date, the very strong economic and trade ties between Illinois and Mexico," he wrote.
The Buy North American bill doesn't work for Illinois taxpayers, workers, small businesses and trade and economic relations with a major Illinois international partner. As we are working to rebuild our state, we need to look beyond gimmicky brands. We urge lawmakers to reject HB 3438 and focus on the right priorities for Illinois' turnaround.
Mark Denzler is vice president and COO of the Illinois Manufacturers' Association. Randy Nehrt is vice president of legislative relations at the Illinois Chamber of Commerce.