Connecting Public Transit to Great Manufacturing Jobs

This article appears in the Spring 2018 issue of The American Prospect magazine. Subscribe here.

After 17 years heading a labor-community alliance in Los Angeles, Madeline Janis had developed a reputation as one of the nation's most innovative strategists on behalf of workers.

Janis and her coalition had pushed through the nation's broadest living wage law. She helped devise a strategy to get hundreds of minority workers hired on long-segregated construction projects. She helped invent the concept of “community benefits agreements,” which pressured real-estate and retail developers to hire workers from poor neighborhoods and to promise not to oppose unionization. And she spearheaded an effort that slashed truck pollution at the nation's largest seaport, while making it easier for port truck drivers to unionize.

But notwithstanding her impressive track record, something was nagging at Janis, long the director of the Los Angeles Alliance for a New Economy. After battling to help service-sector workers, truck drivers, and construction workers, Janis was eager to fight on a new front: manufacturing.

So she set out on a mission to create more factory jobs in the United States—and to make sure that those jobs were good jobs that employed women and people of color. What's more, Janis had her eye on another prize: She wanted those jobs to be union jobs. (This was back in 2010, years before someone named Donald Trump hit the campaign trail, promising to bring back manufacturing jobs and make America great again.)

In her years heading the Los Angeles Alliance, Janis had repeatedly concocted ways to use government policies—including procurement policies—to help workers in a range of industries, from hotels to waste-hauling. “But the one area that eluded us was government procurement of manufactured goods,” Janis says. “This has been something I had been dreaming about for years.”

So she became a dreamer and schemer about manufacturing. She left the Los Angeles Alliance and, in 2013, founded Jobs to Move America (JMA), a nonprofit group that has been mighty impressive in bringing factory jobs back to the United States.

By alternately pressuring and working with transportation authorities in Los Angeles, New York, and other cities, Jobs to Move America has gotten foreign manufacturers to create more than 2,500 direct factory jobs in the United States—and several thousand more indirect jobs. Jobs to Move America played a pivotal role in getting Chinese rail and bus companies to build factories in California, Illinois, and Massachusetts. It has also gotten a Japanese company to build a light-rail factory in California, and a French company to add 500 jobs in upstate New York.

Jobs to Move America has been impressive in another way—it has spearheaded efforts that enabled labor unions to succeed in an area where they've stumbled badly

: unionizing workers at foreign-owned factories in the United States.

“I like the old saying of a country being successful based on making things,” Janis says. “I always felt that globalization had caused progressives to give up on this huge sector of the economy. They'd say, ‘Manufacturing is globalized so there is nothing we can do. Let's focus on other sectors of the economy that are sticky'”—meaning jobs in health care and hotels that need to stick to the United States and can't be shipped overseas.

SOON AFTER JANIS turned her focus toward manufacturing, she learned that the Los Angeles transportation authority, L.A. Metro, would soon put out an $890 million bid for 175 new light-rail cars.

A lightbulb suddenly went on. “We thought, ‘Local hire,'” Janis says. “And, ‘Let's put in some good-jobs language.'” A native of Los Angeles who went to UCLA Law School, Janis is alternately low-key and intense—and an expert at developing policies to address ten-sided problems.

So Janis went to meet with L.A. Metro officials to argue that in awarding this $890 million light-rail contract, they should give preferences to companies that promise to hire locally—which meant to pledge to open a light-rail factory in the L.A. area. But L.A. Metro officials told her that federal procurement rules prohibited giving preferences for local hiring.

“I told them, ‘We don't take no for an answer,'” Janis says.

She decided to go over their heads and appeal to the U.S. Department of Transportation in the hope that officials in Washington would say L.A. Metro had misinterpreted the procurement rules or would grant some “local hiring” waiver on this $890 million bid. Janis discovered that a top DOT official had been a college classmate at Amherst.

But that official, Peter Rogoff—they lived in the same freshman dorm—told her that federal procurement rules simply did not permit local hiring preferences. The two then brainstormed, however, on an alternative: Why not come up with a plan that would give strong preferences to transportation-equipment bidders that promise to do much of their manufacturing in the United States—far more than what traditional Buy America policies call for—and to make those jobs good-paying jobs with solid benefits? (In Janis's view, the nation's existing Buy America policies are thin gruel—poorly enforced, with numerous loopholes and often leading to government agencies buying goods that have just 40 percent domestic content.)

Deanne Fitzmaurice

So Janis, working with Rogoff, developed a “high road” plan that she hoped would become part of procurement procedures for rail cars and buses. Her plan called for bidders to detail how many factory jobs they would create in the United States, what the hourly pay would be for different jobs, what the benefits would be, and how many disadvantaged workers they would hire—such as workers from poverty-stricken neighborhoods. The more jobs created and the higher the pay, the higher the score bidders would receive in their procurement applications. Janis called this supplement to bid applications the “U.S. Employment Plan.”

“Our thinking was how could we develop language that would get L.A. Metro to buy cars in a way that would create good jobs and provide community benefits,” Janis says. “What the U.S. Employment Plan creates is a competition upwards.”

Rogoff says, “It was largely her brainchild.” Department of Transportation officials helped her, he said, “not just wade through the legal hurdles,” but in “wading through the pockets of opposition” that her Employment Plan faced from the industry and some cities' transportation authorities.

Janis went to AFL-CIO headquarters in Washington to seek support for her idea—to use transportation procurement dollars to bring more factory jobs to the United States. Labor leaders loved the idea, and the steelworkers, the sheet metal workers, and five other unions became partners in JMA's effort.

Ed Wytkind, then the director of the AFL-CIO's Transportation Trades Department, became one of the biggest champions of Janis's idea. “It's more than just a manufacturing proposition,” says Wytkind, who became chairman of JMA's board. “It goes way beyond that. It's a paradigm shift that helps stop a practice in which we squandered billions of procurement dollars by not only not supporting U.S. manufacturing, but also by not insisting on a high-road labor model. Procurement bidding shouldn't just mean you submitted a cheaper bid. You should meet other criteria to create high-road jobs.”

Once the Department of Transportation had approved the U.S. Employment Plan, Janis went back to L.A. Metro, and she—with the help of her friend Maria Elena Durazo, then the powerful head of the Los Angeles County Federation of Labor—persuaded the agency to have manufacturers complete the employment plan when bidding for the light-rail contract. The plan would be weighted significantly in the bid criteria.

This $890 million bid was L.A. Metro's biggest in years and would be an initial part of some $120 billion that the Los Angeles area plans to spend in future decades to build out its mass transit infrastructure.

Three respected manufacturers—Kinkisharyo of Japan, Siemens of Germany, and CAF of Spain—submitted bids. Janis and her deputy, Linda Nguyen, met with all three companies, and they came away encouraged that Siemens and CAF said they would build sizable plants in L.A., each with more than 250 workers. Siemens also agreed to allow card check in any unionization drive—a streamlined unionization process in which companies are to recognize a union once a majority of workers sign pro-union cards. Janis had thought that even with local-hiring preferences prohibited, if an equipment order were large enough, a winning bidder would want to build a factory not far from the city awarding the contract.

But Kinkisharyo rejected card check and told JMA it would employ just 40 workers at a temporary plant near L.A., where there would be some final assembly on cars that had been largely assembled in Japan.

L.A. Metro awarded the contract to Kinkisharyo, and Janis was furious. L.A. Metro chose Kinkisharyo because its bid was 5 percent lower than Siemens's and because it had an excellent reputation for quality and on-time delivery. Its Osaka factory manufactures Japan's high-speed trains.

Janis hadn't realized, however, that Kinkisharyo, after talking with L.A. Metro officials, had improved its final offer, saying it would build a 250-employee factory in Los Angeles County.

AP Photo/Reed Saxon, File

That was a huge relief to Jobs to Move America. But relations soon soured between Kinkisharyo and JMA. When the International Brotherhood of Electrical Workers (IBEW) announced plans to organize Kinkisharyo, the company opposed unionization and again refused to allow card check. With JMA's backing, the electrical workers' union filed a 588-page environmental challenge to Kinkisharyo's plant, which was to be in Palmdale, in Los Angeles County, in the high desert 50 miles north of downtown L.A. The union's challenge alleged violations of state environmental law, saying the project had not obtained needed water rights and could kick up spores that carry “valley fever.” The Los Angeles Times wrote a blistering editorial attacking JMA and the union.

Angry about this environmental challenge, which could take several years to resolve, Kinkisharyo threatened to build the plant in another state. Now Kinkisharyo, JMA, the electrical workers' union, and L.A. Metro were all frustrated, and in ways the feud made everyone look bad.

Los Angeles Mayor Eric Garcetti, who controls several seats on L.A. Metro's board, set out to fix the mess. After overseeing three weeks of negotiations, Garcetti—who essentially served as mediator—announced a settlement in November 2014. Kinkisharyo would build the plant in Palmdale, and JMA dropped a public records lawsuit against Kinkisharyo. In return, the company agreed to card check and not to oppose unionization. Kinkisharyo also agreed to work with a coalition of community groups that JMA had brought together—minority groups, veterans' groups, women's groups—to assure a diverse workforce.

Now, three and a half years later, Kinkisharyo's Palmdale plant is running at full tilt.

On a recent day, Janis took the 80-minute drive from L.A., through the San Fernando Valley and numerous mountain passes, to visit the Kinkisharyo plant. It's housed in two immense former airplane hangars, where nearly 400 unionized workers build the rail cars' “shells” and install wires, ducts, windows, and fiberglass seats.

“Isn't this great?” Janis said, surveying the scene. “Think of all the good jobs here.”

THREE YEARS AGO, Amberrose Powers was struggling to get by, making $11 an hour as a painter at a small factory near her home. Powers, a confident, talkative 23-year-old, recently began working as a welder at Kinkisharyo, having previously worked in the plant’s paint shop, applying the cream, gold, and maroon colors to dozens of rail cars.

“The opportunities that have come to me because of Kinkisharyo have been endless,” says Powers, who earned $17.30 an hour as a painter. “Now I can afford rent and school and life.”

Seizing on those opportunities, Powers recently completed the training to become a welder, which lifted her pay to $20.64 an hour.

For Powers, the difference between $11 an hour and $20.64 is the difference between scraping by and getting a foothold in the middle class.

“I want to get a new car and then work on a new house,” she says.

Her friend Frank Lopez, a lead welder, took a pay cut in moving to Kinkisharyo, but he nonetheless says, “I love it here.” Lopez earns $26.89 an hour, down from the $41 he was making on a welding job for which he had to travel to other states, forcing him to leave his family for weeks at a time. “It's great to have the opportunity to stay here in town and work,” says Lopez, 28, who is married with a six-year-old and one-year-old. “It's just a 15-minute drive from home. I get to spend a lot more time with my family and still earn a pretty good living.”

Inside the plant, numerous welders are bent over, sparks flying, working on two dozen rail cars in varying states of completion. Thus far, the factory has delivered 130 rail cars to L.A. Metro, which has expanded its order to 235 units. It's the largest contract Kinkisharyo ever had.

Judy Hermosillo, an IBEW organizer, said it was a cinch to unionize the plant once Kinkisharyo agreed to card check. Hermosillo said several workers hesitated to sign cards because of bad experiences with unions, but most others were eager to sign because they thought a union would mean good-paying jobs with good benefits.

“You had the combination of an employer just starting up in a very old facility and a new workforce that was on this learning curve in a manufacturing setting—and no clear avenue to be able to say how to fix things,” Hermosillo said. Many workers had complained that Kinkisharyo was slow to fix one particularly big problem—on summer days, the temperature inside the plant sometimes climbed to 116 degrees.

Powers is a huge fan of the union. “At first, I didn't even know what a union was,” she says. “Now I support the union because it's kind of like your backbone. It's someone to talk to in a professional way to help you when you don't know what's going on.”

Powers says that many Kinkisharyo employees used to work seven days a week, sometimes 12-hour shifts. The union, she says, has helped get factory managers to reduce mandatory overtime and install swamp coolers to make the plant tolerable on torrid days.

Kris Mendoza, a tool crib coordinator, was one of the factory's earliest union backers.

“It gives us a voice,” says Mendoza, who recently moved to a union staff job. “Now we can hold management accountable.”

THE KINKISHARYO PLANT is one of several that Jobs to Move America and the U.S. Employment Plan have helped bring to the United States.

After winning a $1.3 billion contract from the Chicago Transit Authority, the China Railroad Stock Corporation is building a plant in South Chicago to manufacture 840 rail cars for the city's “L.” The plant is scheduled to begin production next year, with the company saying it will hire at least 170 permanent workers—and possibly 800 if it wins more work. The IBEW and sheet metal workers say they're on track to unionizing the plant.

China Railroad also won more than $800 million in contracts from the Massachusetts Bay Transportation Authority to build 404 cars for Boston's transit system. China Rail is building a $95 million, 150-employee plant in East Springfield. And there's more on the job front. Amtrak awarded Alstom of France a $2 billion contract for 28 Acela trains, which will be built in an Alstom factory in Hornell in upstate New York. Alstom is expected to add more than 500 workers at the factory.

After Governor Andrew Cuomo persuaded New York's Metropolitan Transportation Authority to use the U.S. Employment Plan, Kawasaki won a $1.45 billion order to build 535 subway cars at its plants in Yonkers and Lincoln, Nebraska.

City officials have hailed these new factories. Chicago Mayor Rahm Emanuel called the China Rail factory “a classic win-win for Chicago.” Palmdale Mayor Jim Ledford called Kinkisharyo's $60 million factory “a monumental project” for the area.

Ten miles north of the Kinkisharyo plant, in the L.A. County high-desert city of Lancaster, is a gigantic Chinese-owned bus factory—the size of eight football fields—that has a $45 million order to make 60 buses for L.A. Metro. The plant, which makes zero-emissions electric buses, is owned by BYD—standing for Build Your Dreams—a Chinese company that is the world's leading producer of such buses, having produced 39,000 of them over the past six years.

Thanks in part to Jobs to Move America, the factory has 600 well-paid unionized workers

(and 200 white-collar workers). It produces one bus every three days, with plans to produce more than one a day.

“This has been the highlight of my career, being involved with this,” says Macy Neshati, the plant's manager and a senior vice president of BYD. “For once, jobs in China are being brought to America, rather than China taking them. That's an irony, but a good irony.”

The factory—which BYD opened in 2014—makes buses for not just Los Angeles, but also Stanford University, UCLA, UC Irvine ,and the cities of Long Beach, Denver, and Albuquerque. “The U.S. is a very desirable market for BYD,” Neshati says.

Nowadays, Jobs to Move America and BYD seem like best buddies. But three years ago they were at war, partly because BYD was resisting a union and refusing to sign a community benefits agreement. A whistleblower told Janis that BYD had hired fewer than half the workers promised under its U.S. Employment Plan. The whistleblower also told Janis that BYD was employing five temporary workers from China who were being paid in yuan and receiving less than the minimum wage.

Janis took the story to the press, and BYD's image took a beating. Seeing that BYD was eager to repair its reputation, Janis and a dozen L.A. community groups pressured BYD into signing a version of the community benefits agreements that Janis had formerly gotten real-estate developers to sign. BYD agreed to card check and neutrality (not to oppose a union) and to work with women's, minority, veterans', and ex-offenders' groups to assure a diverse workforce.

The seven-union coalition working with JMA agreed that the sheet metal workers' union should organize the plant, and the union—to the dismay of some labor leaders—agreed to BYD's demand that it get 70 percent of the factory's workers to sign cards to gain recognition. But the union obtained the 70 percent without much of a strain.

Jobs to Move America

“When we have a neutrality agreement, there isn't some intimidation factor against being union, and that helps with the process immensely,” says Joseph Sellers, the president of the International Association of Sheet Metal, Air, Rail and Transportation Workers, known as SMART.

Edward Seda, a strapping 28-year-old with a goatee, is a final assembly leader on windows and windshields at BYD. Before taking a job there two years ago, he worked a $13-an-hour roofing job that required a 50-minute drive each way. “The money is much better here,” says Seda, who now makes $19.08 an hour. “And now I have health care. The benefits are a lot better.” He has four small children.

“I love it. I hardly have to commute anymore,” he adds. “People are very excited. They've been given a lot of job opportunities—something we've been lacking here. A lot of people were working in a local grocery store making minimum wage.”

Seda praised the union for bringing seniority and just-cause protections. “We have guaranteed raises now,” he says with a smile.

Rex Parris, Lancaster's mayor, says BYD has been a boon to his city. Some of his fellow Republicans have given him grief, however, because the factory is unionized—they worry that having a union means more Democrats. Parris is glad that the union has brought higher wages. “I can't have a safe city unless people have living wages,” he says. He hopes the sheet metal workers' union will work with the city to pressure health insurers to hold down costs and improve the quality of health care.

Willy Solorzano, an organizer with the union, says most of BYD's workers had never been in a union or had little idea what benefits unions bring. “I had to walk the whole facility to give the Unions 101 explanation,” Solorzano says. “One worker asks, ‘Why do I have to pay out of pocket for representation?' I said, ‘Do you have a car? Do you put gas in your car? Because it's needed to get to this place. Same thing with the union. You pay dues to get to what you have here.'”

Plant manager Neshati, who has an encyclopedic knowledge of bus manufacturing, says the union has been “tremendously helpful.” “Our negotiations ended up with cigars and wine on the patio,” he says. Neshati showed union negotiators BYD's financial statements so they could see that the plant was losing money.

“I put that on the board so they can see what we lost. We're still struggling to get to a break-even point,” Neshati says. “They looked at the board, and said, ‘Holy crap.' They came back with a much more reasonable deal.”

“I'd love to pay an extra $3 an hour,” Neshati adds. But he says the company and union first needed to work together to make the plant profitable.

Pushed by his wife, Neshati, 63, had been planning to retire, but BYD's worldwide chairman, Wang Chuanfu, sold him on how electric buses would be great for the environment.

“I had goosebumps from that conversation,” says Neshati, who had been running a factory that refurbished old buses. “I got a lump in my throat about building a green environment in our country.”

Neshati informed his wife that he wasn't going to retire—he now spends weeknights in a hotel and returns home on weekends. He has overseen a fivefold expansion of the factory—from 90,000 square feet to 450,000.

“I have five grandchildren, from 12 through just-born,” he said. “My generation, we've done a lot to muck up this planet. If I can spend the last two or three years of my career doing a few teardrops worth of good, I'll go to my grave feeling I've done some good with my life and making things better for my grandkids.”

FOR JANIS AND JOBS TO Move America, reeling in factories like Kinkisharyo and BYD wasn’t easy. Far more than just developing the U.S. Employment Plan, it required persuading transportation authorities in L.A., Chicago, New York, and Boston to adopt it. That meant getting political friends, community groups, labor unions, and environmental allies to push for the plan and for community benefits agreements. It also involved finding points of leverage to get companies to agree to card check, to promise to hire more minority workers and women, and to create more apprenticeships—all to provide more opportunities for those underrepresented in manufacturing.

Cebas/Shutterstock

“It's all about a comprehensive strategy,” Janis says—which includes researching an industry, doing policy analysis, building a political game plan and a communications strategy, having the right partners, and ultimately making JMA a powerful institution. Financial backing from the Surdna, Annie E. Casey, Durfee, Kellogg, and Ford foundations helped transform JMA from a toddler into a force to be reckoned with.

One thing Janis doesn't do is think small. She's always looking for an angle to gain leverage, forever maneuvering to expand her field of play.

“Madeline is a force of nature,” says Scott Cummings, a UCLA law professor. “She's one of the most brilliant people I've met in being able to identify an opportunity to make a difference and then to tenaciously move forward in the face of opposition and multiple roadblocks to effectuate that opportunity.”

JMA has turned to a longtime ally, former Secretary of Labor Hilda Solis—now one of the five elected L.A. County Supervisors and an L.A. Metro board member—to push L.A. Metro to use the U.S. Employment Plan as much as possible. “I want to see jobs stay here,” Solis says. “Jobs to Move America has been bringing groups that don't always talk to each other —the Teamsters, the machinists, blacks, Latinos—to fight to keep jobs here.”

JMA's vision is very much about creating good union jobs, but it's also about linking arms with community groups representing African Americans, Latinos, women, veterans, and former convicts to help find good factory jobs for them. And JMA is also about deepening ties with environmental groups.

“We share a core value—that the transition to a clean economy also builds a fair economy,” says Evan Gillespie, a deputy director of the Sierra Club. “We are primarily an environmental organization, and we want to also be a champion for good jobs. We couldn't ask for a better partner than JMA.”

Janis acknowledges that JMA has made less and slower progress than she had hoped. By now, she had hoped to get 20 rail car and bus companies to adopt high-road practices, but thus far JMA has persuaded only a half-dozen to do so. “We haven't gotten to the scale we'd like to get to,” she admits.

Over the past year, Janis has developed a more ambitious goal—not just to bring transportation manufacturing to the United States, but also to shape an industry. It's no coincidence that JMA first targeted transit authorities in L.A, Chicago, New York, and Boston—they're giants in the field. But Janis had an ulterior motive—she is seeking to ensure that those giants use their procurement power to assure a high-road rail car and bus industry across the entire country.

With the electric bus industry exploding, as city after city wants these zero-emission vehicles, JMA hopes to use the U.S. Employment Plan as a sword—to assure that every electric bus company, whether BYD, New Flyer, Proterra, or others, has high-road, high-paid, highly diverse workforces, with plenty of apprenticeships (and, JMA hopes, unionization, too.)

“There is an emerging set of companies—we're trying to shape the market,” Janis says. “That's been a big revelation for us in the past year. We think we're part of the solution. … What started as a certain idea has morphed into a bigger market-shaping, economy-shaping idea.”

Janis hopes that JMA helps rebuild the union movement.

She hopes that three strategies—government procurement, community benefit agreements, and building labor-community-environmental coalitions—can help create tens of thousands of good jobs and give unions new energy, momentum, and popularity.

Early on, Janis looked for advice from Robert Pollin, an economics professor at the University of Massachusetts. He told her that the existing Buy America policies were inadequate, often falling far short of their goal of 60 percent domestic content.

“The U.S. federal, state, and local governments are the biggest purchasers of goods and services in the world. We can use that power,” Pollin says. “JMA takes the taxpayers' own money to strengthen manufacturing, job opportunities, communities, and innovations in our economy. That seems like an entirely legitimate use of taxpayer funds. It allows us to rebuild manufacturing in an area where we've grown weak.”

Each year, the United States spends $4.6 billion on bus and rail car investments. JMA estimates that this should in theory be able to create 38,600 direct and indirect high-road transportation equipment jobs, far more jobs than JMA has already helped to create.

More broadly, federal, state, and local agencies spend $2 trillion a year all told on goods and services. In light of such huge numbers, Janis and JMA want to take their “high-road procurement” vision to a broader terrain—to school buses, communications equipment, and infrastructure equipment bought by agencies other than transportation agencies.

“We think with this approach, you can add criteria for food purchases by schools, jails, and hospitals,” Janis says. “You can think of a million things where these policies can be used.”

Janis says she turned her focus to manufacturing partly out of frustration that so many progressives had given up on it.

“I think an economy can't work well if the economy doesn't make things,” she says. “Manufacturing is the pillar of a healthy, successful, sustainable economy—and globalization shouldn't change that. We needed to find a way to adapt to modern circumstances, to find a new way to revitalize manufacturing.”