Jobs trump politics in T’s China deal

Will decision hurt Patrick’s political future?

The Patrick administration is coming under fire for the Massachusetts Department of Transportation’s decision to award a $566.6 million MBTA subway car manufacturing contract to a Chinese railcar maker. But with Chinese investment surging in Massachusetts and nationwide, critics are unlikely to stop politically popular job-creation deals from moving forward.

Officials from competing bidders and human rights activists took turns on Wednesday blasting the pact shortly before the MassDOT board of directors voted unanimously to move ahead with the procurement of Orange and Red Line cars from CNR MA.

Larry Varn, an attorney for Hyundai Rotem, a South Korean railcar manufacturer and one of five firms that lost out on the MBTA contract, claimed that a December 2013 meeting in Hong Kong between Gov. Deval Patrick and CNR representatives did not follow normal protocols.

“We felt that it created the appearance of impropriety for the governor to be meeting with one bidder to the exclusion of the others during the procurement process, especially since the request for proposals made clear that there was to be a single route of communication between any bidder and the T,” he said after the board vote.

Varn declined to comment on whether the firm intended to pursue litigation. “I’m not going there,” he said.

MassDOT spokeswoman Cyndi Roy dismissed those claims, saying that Patrick wanted to learn more about the company and did not discuss the pact.

“The details of the procurement were not discussed at that meeting nor did the governor play a role in deciding which company the MBTA recommended to the board,” said Roy in a statement.

“I believe that the governor will live to regret to this decision should he ever run for another public office,” Robert Maginn, the former state Republican Party chairman, told the board during the public comment period. “Other companies could build the same factory in Springfield and bring the same economic benefits without the cost of supporting a government that harms so many here in the Commonwealth, in other countries, and in their own country,” he added.

The firm plans to build a 150,000-square-foot manufacturing, research, and testing facility on the site of the former Westinghouse plant in Springfield. The project will create 150 permanent and 100 construction jobs. The rail cars will be built in China and assembled in Massachusetts. With $16 billion in revenues last year, CNR is the world’s largest rail car manufacturer.

The total $1.3 billion CNR MA-MBTA agreement (which includes improvements to rail facilities in Medford and Boston) roughly equals China’s investments in Massachusetts over the past 14 years. China has invested $1.9 billion in Massachusetts since 2000, according to the Rhodium Group, a global economics research and analysis firm.

Boston-based human rights advocate Chai Ling, the student leader of the 1989 Tiananmen Square pro-democracy protests, said the only way to change China’s behavior is by refusing to do business with Chinese firms.

“Turning down their opportunity to receive a billion dollars from Massachusetts will get their attention,” said Chai who is married to Maginn. “[Then] they can no longer continue to brutalize women and children [or] threaten to send troops into Hong Kong to take away their constitutional right to vote. “

But opposition to doing business in China runs up against a rare bipartisan consensus in the US, according to Jeff Gulati, a professor of political science at Bentley University. Democratic and Republican leaders believe that allowing Chinese companies to set up shop in the US and pushing for American investment in China makes economic and political sense. “Politicians get re-elected by increasing economic growth and bringing jobs to areas that they represent,” said Gulati.

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Gabrielle Gurley

Senior Associate Editor, CommonWealth

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

Springfield won out because of its rich talent pool, diversity of colleges and universities, and local and regional government and economic organizations that were keenly interested in hosting the Chinese firm, according to Tim Brennan, executive director the Pioneer Valley Planning Commission. He believed that exposure to American businesses and educational institutions can have a positive influence on China’s behavior as the company sets up its first North American headquarters and seeks to expand its footprint. “Having relationships with countries and companies like this can bode well for addressing those human rights concerns rather than run away from them,” he said.

Stephen Silveria, a senior vice president at the lobbying firm ML Strategies and a former member of the Transportation Finance Commission, said the focus should not be on international politics but on whether the company will produce cars that meet the state’s needs in a timely manner. “I don’t think international affairs is ever in the purview of the MBTA or MassDOT,” he said.