By Kenneth Rapoza, CPA Industry Analyst
It makes no sense to allow China airport passenger bridge maker CIMC Tianda to benefit from Federal grants. They get them already from Beijing.
Congress took an important step in halting the flow of taxpayer money to Chinese jet bridge manufacturers recently. They figured out that it’s unwise to give foreign companies subsidized lending, especially if they are already on the receiving end of massive stimulus from their home markets.
It all becomes law if President Trump signs the National Defense Authorization Act for Fiscal Year 2021 (H.R. 6395), which we believe he most certainly will.
“Spending defense authorization money on Chinese companies makes no sense. But the real test is whether congress legislates to direct purchases of U.S. made products so we can rebuild our industries,” says Michael Stumo, CEO of the Coalition for a Prosperous America.
What’s new here is an amendment to the Act passed this month that includes provisions designed to protect U.S. infrastructure and jobs by prohibiting federal airport improvement loans from being used to purchase passenger boarding bridges from companies that have violated intellectual property rights. That was how they tackled it.
The legislation is specifically targeting China, namely CIMC-Tianda.
CIMC-Tianda, a 28-year old Shenzhen-based company that is mostly present in China, Europe and Canada, lost a legal dispute over IP with FMC Jetway that led to a 10-year worldwide injunction protecting FMC’s Jetway passenger boarding bridges from Tianda’s anti-competitive practices. That lasted until around 2009. FMC has been in business since the 1920s and created the Apron Drive passenger boarding bridge. China came up with theirs in the early 1990s and has been a dominant force since.
CIMC-Tianda hired a former policy staffer from the U.S. Department of Transportation to do some consulting work as a sort of middleman with the airports here. They were angling for federal dollars to sell their passenger boarder units. Over the last few years, CIMC-Tianda has been trying to get contracts at airports in Houston, Dallas, Miami, Orlando, and Boston.
The crux of the legislation, passed last week, is this: we don’t want China getting Federal grant money to compete for contracts alongside domestic manufacturers. The main player here is JBT Corporation, the owners of the Jetway brand of bridges manufactured in Ogden, Utah that first sued CIMC-Tianda. Congresses amendment to the NDA shows they agree with that assessment. If airports want to tap federal funds to acquire equipment, we think that equipment should be made in the U.S. If not, we are essentially giving China what amounts to a double subsidy – a low-cost loan that goes to them via purchase orders, and subsidies that are likely to be occurring back home as well.
“Not a dime of U.S. taxpayer dollars should be given to Chinese owned firms or Chinese subsidized companies bidding on our critical aviation infrastructure projects,” said Florida Representative Ross Spano. “China and its communist government have proven time and time again that they are only out for themselves and have no reservations in stealing our intellectual property.”
Back in May, Texas Representative Lance Gooden said in a statement that China “may offer many goods and services at lower prices, but we’re choosing not to buy what they’re selling. We cannot continue to fuel (their) ambitions,” he said of China’s industrial growth.
Congress has gotten the message on this before. They passed legislation to stop public transport agencies from importing rail cars from China’s state-owned manufacturer.