Brick by brick, American business loses edge

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Since its founding in 1912, Summitville Tiles has been a proud family company with a legacy of service to the government.

F.H. “Pete” Johnson, the company’s founder and a World War I veteran, stood proudly by the company’s motto, “American Made, American Owned” - and true to his word, Summitville tiles cover the roof of the White House and the floors of Washington, D.C., Metro stations.

Today, Mr. Johnson’s grandson, David Johnson, wonders whether that legacy has any value. Last year, his company had high expectations of landing a subcontract to provide brick for a school to be built at a U.S. Army base. Despite competitive prices and federal laws intended to support American manufacturers - not to mention common sense, Mr. Johnson thinks, given the nation’s poor economy - his company lost out to a German competitor.

The loss will be felt beyond Summitville Tiles’ bottom line and could have dire effects on the already depressed region in southeastern Ohio that is clinging to economic life.

Equally troubling, when Summitville challenged the selection process, Mr. Johnson encountered a wall of silence, bureaucratic confusion and disturbing signs of contract-fixing within the U.S. Army that rewards a foreign company over a domestic one.

The $250,000 subcontract for an elementary-middle school project at Fort Bragg in Fayetteville, N.C., has since caught the attention of lawmakers from Ohio, who are concerned that the Army has no say over hundreds of millions of dollars in military subcontracts. The Defense Department’s office of inspector general already has opened an administrative investigation into the selection process.

Two Democratic congressmen from Ohio, Rep. Charlie Wilson, whose district includes Summitville, and Rep. John Boccieri, along with Reps. Jim Jordan and Bob Latta, Ohio Republicans, wrote to Secretary of the Army John McHugh in late November and asked for an explanation of “the Army’s decision to overlook a domestic manufacturer and the failure to support the American economy.”

A month later, an Army official responded that the Army “does not have privity of contract with subcontractors or a subcontractor contract award.” The official added that the German company was exempt from the Buy American Act, which protects U.S. manufacturers from foreign competitors because of a World Trade Organization pact to stimulate foreign trade.

After a closed-door Capitol Hill meeting in January with high-ranking Army officials, Mr. Wilson appeared unassuaged. “I still strongly believe that the Army should be better about ensuring that American companies are given a fair shake,” the congressman said in a statement. “This experience with Summitville Tiles has reinforced my strong belief that American companies should be supported at all levels of federal contracting.

“I look forward to working with my colleagues to ensure that we have better oversight of such contracts in the future,” he pledged.

That may come too late for Summitville Tiles. Mr. Johnson was forced to lay off 22 more workers in an ever-shrinking manufacturing belt. In recent years, his work force has shrunk from 750 to 150 - all while his global competitors skirt the Buy American Act in the wake of a crippling recession.

“This is another example of why American manufacturing is dying on the vine,” Mr. Johnson said.

A bright spot

With military base realignment and consolidation throughout the country, new construction is a potential bright spot for some builders and manufacturers. In the Fort Bragg region alone, officials expect to spend $274 million over the next several years just to build schools, according to the Army’s comprehensive growth plan.

However, Ohio lost almost a half-million jobs between 2000 and 2009 - a recession driven primarily by manufacturing losses, said George Zeller, a Cleveland-based economic research analyst.

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