Business' 'Buy U.S.' dilemma Many in Md. opt for best price, quality

March 01, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

Frenzied campaigns for buying U.S.-made goods have swept the country in recent weeks, as relations with Japan have increasingly soured.

Legislation is proposed in Congress that would put limits on Japanese car imports if the U.S. trade deficit with Japan isn't cut. A Florida auto parts company makes owners of Japanese cars park in the rear. Companies have offered employees cash payments if they buy American cars. Some local governments have canceled orders to Japan.

But how about manufacturers, which need vast amounts of materials to produce their goods? Or large institutions that buy millions of dollars worth of equipment? Do they try to buy American, or do they go for the best price possible?

The stakes are not insignificant. According to the U.S. Census Bureau, manufacturers accounted for 82.7 percent of the $507.4 billion worth of U.S. imports in 1990, including consumer products made overseas and sold under U.S. brand names.

In a recent survey of manufacturers, the National Association of Purchasing Management found that about 77 percent of the 300 companies polled imported goods in the third quarter of 1991. Among those companies, foreign products accounted for about 12.9 percent of total purchases.

Results of the study, conducted by Robert J. Bretz, director of corporate purchasing for Pitney Bowes and chairman of the NAPM survey team, appear in the March edition of the group's magazine, NAPM Insights.

Many major Maryland operations don't have specific policies obuying American. And those that do often find they can't buy what they need in the United States.

Westinghouse Corp., McCormick & Co. Inc. and the Johns Hopkins Hospital and its sister university give no preference to -- U.S. products in shopping for supplies.

"We need to buy commodities where we can get them," said McCormick spokesman Allen "Mac" M. Barrett Jr. The big food and spice company often has to look beyond the borders of the United States for many of the spices it sells.

"Our industry was built on free trade," he said.

Westinghouse Corp., which has 12,000 employees in the Baltimore area, said it cannot afford a buy-American policy, since it competes in a global market. The company buys the highest-quality products at the most competitive price, "wherever that may be," said James Schmitt, a spokesman for the big electronics company.

He could not say how much of the $5 billion the company spends annually on supplies and services goes to U.S. companies.

Westinghouse is, however, required to comply with buy-American requirements in defense contracts. Defense contracts account for more than 18 percent of the company's sales, Mr. Schmitt said.

A no-preference policy saves money for patients at Johns Hopkins Hospital, said hospital spokeswoman Joann E. Rodgers. The hospital, which spends about $100 million annually on supplies and services, trys to buy the best quality at the lowest price, she said.

"What drives it is not where the product comes from," she said.

The Johns Hopkins University, which operates separately from the hospital, also has no buy-American policy when it comes to spending its annual $100 million on supplies and services, said Dennis R. O'Shea, a spokesman for the university.

"We look for the best item that meets the need," he said. Nevertheless, he said, the "overwhelming majority" of the purchases are from U.S. companies. The policy is tempered for research programs that receive government grants with buy-American provisions, Mr. O'Shea said.

Bethlehem Steel Corp., which operates the Sparrows Point steel mill in Baltimore County, has a long-standing, written buy-American policy dating back more than 30 years. Badly hurt itself by growing steel imports, Bethlehem informs vendors that it will buy U.S. products unless there is no alternative.

But the company often finds it must buy from foreign companies. Many of the domestic companies that built steelmaking equipment have gone out of business, and most of the sources are now European and Japanese.

For example, as part of a $200 million renovation of its hot-strip mill, Bethlehem needed a 180-ton housing for a new reversing roughing mill, equipment that reduces the size of steel slabs. But the largest casting equipment in the United States could cast only a 75-ton housing, said Bethlehem spokesman G. Ted Baldwin. Instead, Bethlehem had to buy the housing from the German company SMS Schloemann Siemag AG.

Even though some products are not available domestically, Bethlehem said it was able to keep foreign purchases to 7 percent of the $3 billion it spent on supplies and services last year.

Some companies with no particular buy-American preference end up buying primarily domestic products anyway because it makes business sense.

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