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DAVID GREENE, Host:

When President Obama introduced his jobs plan before Congress last week, here was one of his arguments: There are so many construction workers unemployed, why not put them to work to help the U.S. remain competitive?

BARACK OBAMA: Building a world-class transportation system is part of what made us an economic superpower. And now we're going to sit back and watch China build newer airports and faster railroads at a time when millions of unemployed construction workers could build them right here in America?

(SOUNDBITE OF APPLAUSE)

GREENE: The president's remarks resonated in California, where the new San Francisco Oakland Bay Bridge is taking shape. The state's spending more than $7 billion building what it says will be an architectural marvel. But as NPR's Richard Gonzales reports, California saved a lot of money sending some of the construction work overseas.

RICHARD GONZALES: The new eastern span of the Bay Bridge will have a distinctive design to rival its more famous cousin, the Golden Gate Bridge.

BART NEY: We are over 500 feet above the San Francisco Bay on the next worldwide icon for infrastructure projects - the new eastern span of the Bay Bridge.

GONZALES: Bart Ney, a spokesman for the project, stands near the top of a gleaming white tower.

NEY: What we're standing on, what will be the world's largest self-anchored suspension bridge.

GONZALES: A typical suspension bridge is held up by cables strung between two towers like a hammock. This bridge features a single tower and a single mile-long cable that drapes up and over the tower and supports the deck like a sling. The cable is made up of 137 strands of steel.

NEY: One hundred and thirty seven times we will pull those strands all the way across the bay to make this cable. And then we keep doing that until we have all of them in place and then we can start hanging the suspender wires down that will hold up the deck.

GONZALES: This assembly will be performed early next year by American labor. But the massive cable, key sections of the iconic tower and deck, were all made in China. And China is emerging as an infrastructure powerhouse in more places than San Francisco. For example, Chinese companies have contracted with New York City for a bridge, the subway system, and a commuter train platform.

The decision to outsource the fabrication of key sections of the Bay Bridge was made about five years ago when a contractor offered alternate bids on the project, says California Transportation Department manager Tony Anziano.

TONY ANZIANO: One proposing to do work domestically, one proposing to do the work internationally. There was about a $400 million dollar differential in that bid, and in that case it would have required the work to go international.

GONZALES: And California avoided legal requirements to use domestic steel by not seeking federal funds for the job. The steel contract went to a state-owned Chinese company, Shanghai Zhenhua Heavy Industries. That company had several advantages, including modern production facilities, the ships to deliver the steel, and of course low-cost labor. A Chinese steel polisher makes about $12 a day.

Bob LaVenture, a district director for the United Steel Workers Union, has opposed outsourcing this job.

BOB LAVENTURE: There is no way that American workers will be able to ever compete with $12 a day. It's just is not right and it's not right for America.

GONZALES: It wasn't just the cost of labor that made Chinese steel more attractive, says state bridge manager Tony Anziano. He says American steel fabricators don't have the capacity for a job like the Bay Bridge. And when union and industry groups questioned the quality of the Chinese steel, the state and the contractor sent more than 200 people to China to watch over the fabrication process, says Anziano.

ANZIANO: In this particular case we had full time staff on site over in China 24/7 that monitored all aspects of the fabrication work and performed their own independent quality assurance testing. So we have a very high level of assurance about what we're getting.

LUIS ALEJO: When you have a project of that size here in California, it has a multiplier effect.

GONZALES: California Assemblyman Luis Alejo says even at a savings of hundreds of millions of dollars, the decision to outsource has done more damage to California that it was worth.

ALEJO: It gives thousands of families those jobs and then those paychecks, and their subsequent spending ends up going back into our economy. And so now all that money has permanently disappeared from California.

GONZALES: Unemployment in California rages at twelve percent, well above the national average. Yet when the deal was made for the Chinese steel, unemployment ran at just under five percent. If it were still that low now, this debate would likely have less punch.

Richard Gonzales, NPR, San Francisco.

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