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Buy American Act



The Buy American Act (BAA - 41 U.S.C. § 10a–10d) passed in 1933 by Congress and signed by President Roosevelt, required the United States government to prefer U.S.-made products in its purchases. Other pieces of Federal legislation extend similar requirement to third-party purchases that utilize Federal funds, such as highway and transit programs.

In certain government procurements, the requirement purchase may be waived if the domestic product is more expensive than an identical foreign-sourced product by a certain percentage, if the product is not available domestically in sufficient quantity or quality, or if doing so is in the public interest.

The President has the authority to waive the Buy American Act within the terms of a reciprocal agreement or otherwise in response to the provision of reciprocal treatment to U.S. producers. Under the 1979 General Agreement on Tariffs and Trade (GATT) Government Procurement Code, the U.S.-Israel Free Trade Agreement, the U.S.-Canada Free Trade Agreement, and the World Trade Organization (WTO) 1996 Agreement on Government Procurement (GPA), the United States provides access to the government procurement of certain U.S. agencies for goods from the other parties to those agreements. However, the Buy American Act was excluded from the GPA's coverage.

The Buy American Act is not to be confused with the very similarly named Buy America Act, which came into effect in 1983. The latter, a provision of the Surface Transportation Assistance Act of 1982, is 49 U.S.C., section 5323 (j), and applies only to mass-transit-related procurements valued over US$100,000 and funded at least in part by federal grants.[1]


Sources: CNN, Wikipedia

Toyota's Sticky Gas Pedals Conspiracy Or Poor Manufacturing?

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Toyota Extends Recall To China, Europe


Toyota Motor Corp. said Thursday it's closing in on solutions to a gas pedal system problem, but it still had no details on when drivers would see repairs as an embarrassing recall spread to more than 2.4 million vehicles on three continents.

Toyota dealers in the U.S. have been swamped with calls from concerned owners but had few answers as the recalls snowballed. Elkhart, Ind.-based CTS Corp., which made the parts, is cranking out redesigned gas pedal assemblies that fix the problem, which is caused by condensation around an arm attached to the pedal and springs that send the pedal back to the idle position.

Toyota engineers are developing ways to repair the pedal systems in existing cars and trucks, said spokesman Brian Lyons.

No decision has been made yet on whether to repair the pedals or replace them altogether, he said, and he would not estimate how long it will take for customers to see action. Lyons says the automaker has not decided if the new pedals will go first to factories so production of eight models can resume or to dealers for modification of new cars on their lots and cars being driven by their customers.

Toyota on Thursday extended its recalls to China and Europe, deepening the massive recalls that threatened to undermine the reputation of the world's top automaker as a manufacturer of safe, durable vehicles.

The automaker has informed Chinese authorities it will start a recall in February for 75,500 RAV4 vehicles that were manufactured in China between March 2009 and January 2010, said Toyota spokeswoman Ririko Takeuchi. Toyota is still unsure how many vehicles could have the defect in Europe.

House lawmakers, meanwhile, said they intend to hold a Feb. 25 hearing to review the complaints of sudden unintended acceleration in Toyota vehicles. "Like many consumers, I am concerned by the seriousness and scope of Toyota's recent recall announcements," said House Energy and Commerce Committee Chairman Henry Waxman, D-Calif.

Earlier this week, the company said it was suspending U.S. sales and production of eight models — including the Camry, America's top-selling car — to fix faulty pedal systems that could stick and cause acceleration without warning. A week before the sales suspension, Toyota had issued a U.S. recall for the same eight models, affecting 2.3 million vehicles, even before the recalls in China and Europe.

Also this week, Toyota announced the recall of 1.09 million vehicles in the United States over concerns that floor mats could bend across gas pedals, causing sudden acceleration. That recall covered five models — 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe, a General Motors Corp. vehicle that shares parts with the Matrix. Those were in addition 4.2 million vehicles recalled in late 2009 over floor mat concerns. Some of the models in both recalls overlap.

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CTS also makes pedals for Honda Motor Co., Mitsubishi Motors, Nissan Motor Co. and Ford Motor Co. in China, but the company said pedals made for those manufacturers don't have the same design. Still, Ford on Thursday halted production of some full-sized commercial vehicles in China because they contain CTS gas pedals.

CTS officials say they have ramped up production at three factories to manufacture redesigned pedals. The pedals are meant to solve problems with condensation that Toyota has said can cause them to react slowly when a driver presses on the gas. In rare cases, the gas pedals can get stuck.

CTS says it is also working with the Japanese automaker to find a potentially quicker repair for vehicles already on the road.

Lyons says the company's No. 1 priority is figuring out how to repair the largest number of vehicles in the shortest amount of time.

Repairs to the pedals still have to go through the normal durability testing to make sure they work properly, Lyons said. He would not estimate how long it will take for Toyota to decide on repairing versus replacement, nor would he say how long it will be until cars and trucks are fixed.

Toyota officials met Thursday with the National Highway Traffic Safety Administration to discuss a potential fix for the recalled vehicles, according to a person who was briefed on the meeting. The person, who was not authorized to speak publicly about the private meeting, said NHTSA officials discussed the potential remedy with Toyota and the government said they would express any concerns they may have about the proposed fix.

The automaker does not need NHTSA's specific approval but company officials do not want to proceed with a fix if the government has concerns about it. NHTSA has not signed off on any fixes at this point, the person said.

Since the initial recall last October, the company has held discussions with the government over the accelerator problem, and NHTSA was expected to review a possible remedy for the latest recall.

The sales suspension in the U.S. — Toyota's biggest market — could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of 21.8 billion yen ($241 million) after three straight losing quarters.

"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.

Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.

"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.

In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.

But troubles persisted in other models, eventually leading to last week's U.S. recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.


Sources: MSNBC, Toyota