‘Buy American’ Plan May Face Practical Problems : Economics: Determining pure U.S. products is difficult. City Council backers say proposal would protect jobs.

Consider the lowly Los Angeles parking meter. Not a glitzy accouterment, perhaps, but a proud fixture on the city landscape nonetheless.

The city’s 40,834 meters are “all 100% American from Harrison, Ark.,” boasts John Delianedis, the city’s parking meter program manager.

But things get stickier when it comes to determining the lineage of other city purchases. The Department of Water and Power’s fleet includes 48 new Ford dump trucks with engines made in Brazil. Some city work gloves made of California cotton were sewn in Asia. City typewriters were produced by a Japanese-based firm that assembled the machines in Irvine.

In other words, municipal life could get complicated if a “Buy American” proposal ordered by the Los Angeles City Council is approved by voters in June.

Implementing the plan could plunge city purchasers into a “scavenger hunt from hell,” said Jack Kyser, chief economist at the Economic Development Corp., a private group trying to stimulate the local economy.

Councilman Zev Yaroslavsky, who sponsored the measure, said it is needed to protect local jobs and foster business development here. A top Yaroslavsky aide said it can work--although she acknowledged that it may be a complex task.

“No one said it wasn’t going to be complicated--there are a lot of details to be worked out,” said Alisa Belinkoff Katz, Yaroslavsky’s chief deputy. “This will take some work but it can be done.”

Essentially, Yaroslavsky’s proposal would give California and Los Angeles County firms preference in bidding on city contracts and establish a minimum domestic content requirement for city purchases.

“Admittedly, the domestic content requirement is more complicated than the issue of bid preference for goods manufactured in the city of Los Angeles,” Yaroslavsky said. “But this is right and it will help keep jobs in this region.”

However, some economists have serious doubts about the proposal that they contend was forged in the heat of political rhetoric surrounding the Los Angeles County Transportation Commission’s decision to award a $128-million Green Line contract to Japanese-owned Sumitomo Corp. of America. That contract was canceled amid an outburst of public discontent.

“If this were not an election year and we were not having difficulty with the economy, this would not even be an issue,” said David Cross, an economist with the Futures Group, a Washington consulting firm specializing in consumer trends. “Over and over again, cities and consumers are struggling to buy American, which is not easy to do because you can’t define components of any product without a lot of research.”

Or, as Kyser put it: “The city may be getting itself into a brier patch of sorting out what is American and what is not, which could drive city officials crazy and trigger a trade dispute.”

Questions about potential fallout from the measure also have been raised by the city administrative office. Limiting the field of competitive bidders could drive up prices and trigger retaliatory legal challenges from spurned business owners and their governments, according to a report on the impact of the proposal prepared by Bart Benjamins, principal analyst for the city administrative office.

Beyond that, Benjamins warned in an interview: “Given the current resources of Los Angeles, it is unlikely city purchasers would be able to find out whether bidders were being truthful about the domestic content of their products.”

What may be a cautionary tale for Los Angeles came recently from Greece, N. Y., a Rochester suburb that tried to send a message to Japan about a month ago.

The town board rejected a proposal to buy a dirt excavator from Japanese-owed Komatsu American Industrial Corp. for $40,000 in favor of an “American” model made by John Deere, which would have cost $15,000 more. The board later learned that the Komatsu machine was made in America and the John Deere one was made in Japan.

“I admire Los Angeles for taking a ‘Buy American’ stand, but we learned the hard way that it is a tough thing to do,” said Roger Boily, town supervisor in Greece, which has decided to lease the Komatsu. “Los Angeles will have to do an unbelievable amount of work to figure out what American-made means these days.”

The city’s “Buy American” effort coincides with a wave of similar campaigns in cities and states across the nation--all aimed at keeping jobs and tax dollars at home.

The movement, fueled in part by hard times in the U. S. auto industry, heated up recently after Japanese officials made unflattering remarks about American workers.

At least 28 states have enacted laws giving preference to American-made products. California officials are considering a bid preference for state firms, as well as requiring that at least 51% of the parts and supplies purchased by the state be made in the United States.

Although similar proposals are under consideration by cities large and small nationwide, only a handful have enacted bidding preference laws.

Chicago purchases only American-made steel, and Columbus, Ohio, follows a general policy of buying domestic goods whenever practical, according to a survey conducted in 1990 by the National Institute of Government Purchasing in Washington, which represents 20,000 public purchasers in the United States and Canada.

Los Angeles is generally required by its 60-year-old City Charter to award contracts to the lowest responsible bidder.

The proposed charter amendment would modify that, although it was deliberately left vague so the City Council could later pass ordinances establishing guidelines tailored to meet individual contracts and prevailing economic conditions. Council members have until Feb. 28 to place the measure on the June 2 ballot.

The proposal is supported by increasingly angry American business owners who believe they have been unfairly shut out of lucrative city contracts that have gone to foreign firms and domestic companies with manufacturing plants overseas.

Joe Mehanna, president of Metropolitan Motors, which sells Chevrolets and other vehicles in Los Angeles, said he has “raised hell with the city” about the Nissan pickup trucks in the DWP fleet.

Richard Moore, a purchasing agent for the DWP, sympathized with Mehanna’s concerns but said: “This is a worldwide market we are dealing with today and we are just trying to get the best value for the ratepayer’s dollar.”

In addition to backing the “Buy American” measure, Mehanna said he is seeking City Council support for a proposed “Drive American” parade down Hollywood Boulevard in March featuring “our cars: Buicks, Oldsmobiles and Chevrolets--all made in the United States.”

“Our proposal would give this kind of firm a leg up,” said Katz, Yaroslavsky’s chief deputy. “It just makes sense that we use our muscle in the marketplace to stimulate the economy and keep our local businesses at work.”

No one has surveyed the national origins of the city’s purchases, which cost $400 million last fiscal year, not including purchases by the Harbor and Airport departments and the DWP.

Other than 8,000 parking meters the city bought last year for $1.2 million from Duncan Industries Parking Central Systems Corp., city officials point to another recent major purchase that was purely American: a $3-million contract this year with Engs Motor Truck Co. of Pico Rivera for 24 garbage trucks.

Yaroslavsky has stressed that his plan would not prohibit the city from buying foreign goods, or force it to buy only domestic products. “It would allow us to give preference to companies that produce here at home,” Yaroslavsky said.

The City Council’s vote ordering drafting of the ordinance was unanimous. But Councilman Mark Ridley-Thomas has raised concerns that the proposal was born out of “opportunism owing to the economic crisis as well as pending elections.”

And City Controller Rick Tuttle has questioned whether the proposal would generate enough benefits to Los Angeles taxpayers to offset the cost of quantifying domestic content.

“We also have to look at the possibility of retaliation to Los Angeles-based industries,” Tuttle said, “such as movies and television syndications, not to mention other products we manufacture locally for export.”

Some of the biggest in-house critics are city purchasing officials already working under recession-related staff reductions and policies restricting purchases from companies that do business in South Africa or include wood obtained from trees felled in the world’s rain forests.

“Our concern is that we may not have the staff to be able to assure contract compliance,” said Joe Trevgoda, assistant manager of the General Services Department, which each year buys millions of dollars worth of products ranging from paper clips to the rodents fed to exotic snakes at the Los Angeles Zoo.

“If the City Council dictates it, and voters approve, we’ll have to make it work,” he said. “But we’ll need to solicit a lot of departmental help in analyzing domestic content.”

Katz dismissed such concerns as “typical bureaucratic worries.”

“I have a lot of faith in our bureaucrats to make this work,” she said. “More than half the states in this country already have some form of bidding preference. I see it as something we can do too.”