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Obama's "Buy American" policy may limit US wide format scanner choice

US President Obama

US President Obama
wants US companies to "Buy American".
Sounds good in theory!

US President Obama is proceeding with plans to stimulate the US economy. His economic stimulus package has a "Buy American" clause in it designed to ensure that only US iron, steel and manufactured goods are used in the construction work funded by it.

Much of the anticipated work will be the building of new infrastructure - roads, bridges, dams, etc., - as well as the upgrading and modernising of school and other federal buildings. US large format scanner resellers are eagerly looking forward to these projects which will need hundreds, if not thousands, of wide format scanners to capture the millions of drawings and maps which these projects will need. While it sounds like a practical way to stimulate the economy there is one problem with it. None of the most popular large format scanners - Contex and its OEMs (Calcomp, HP, IDEAL, Océ and Vidar), Colortrac, Graphtec and Image Access - are manufactured in the USA.

If President Obama's new New Deal projects are to be strictly adhered to according to the letter of his law, US contractors are going to have to do all their wide format scanning work on Xerox large format scanners. To the best of our knowledge, the only large format scanners to be manufactured in the USA are built by Xerox in Alabama. Even then, some of Xerox's components may be OEM'ed in part from outside the USA and so may not be fully compliant with the necessary high local component level needed to meet the USA's demanding standards for claiming a product to be truly "Made in the USA". Is this a classic case of an idealistic politician shooting himself in the foot, knee and hip?

The EC (European Community) allows a much looser appreciation of what constitutes products made in the EC or a member country. Colortrac is an interesting case in point. Its wide format scanners are manufactured in the UK and China. Because the final assembly takes place in the UK, EC legislation allows Colortrac scanners to be categorised as "Made in the UK". The US has much stricter controls than the EC over the percentage of local content in products trying to qualify for "Made in the USA" status. Shipping scanner cases and components and assembling them in the USA is unlikely to help a non-USA wide format scanner manufacturer get past US controls to qualify for the "Buy American" clause.

Although a Swedish company, Vidar did manufacture large format scanners in the USA before being acquired by Contex in June 2002. However, Vidar scanners, along with Contex OEMs (GTCO Calcomp, HP, IDEAL and Océ) are now manufactured in Denmark. Graphtec scanners are manufactured in Japan and China. Image Access scanners are manufactured in Germany and were previously distributed by Bowe Bell + Howell whose Scanner Division was recently acquired by Kodak, a company whose credentials and name are as American as blueberry pie. Even so, we doubt very much that Kodak will get past the "Buy Amercan" restriction. So, US companies wanting to tender for President Obama's projects are left with Xerox as a source of homegrown large format scanners.

Xerox wide format scanners are generally more expensive and only modestly specified by comparison to other more affordable and more powerful imported products from Colortrac, Contex, Graphtec and Image Access. For example, the 42" Xerox Wide Format Scan System is limited to 400 dpi. While this is more than adequate for scanning most E-size technical documents and maps, most buyers know that today's optical resolution standard among other products is 600 dpi, with 1200 x 600 and 1200 dpi becoming more common. Xerox are way off the mark in this respect.

Xerox has a long established good name for quality and service in the office equipment and reprographics market. As a $17.6 billion US multinational company, Xerox claims to be the world's leading document management technology and services enterprise with the broadest portfolio of offerings. Its digital systems include colour and black and white printing and publishing systems, digital presses, "book factories", MFP (multifunction peripheral) devices, laser and solid ink network printers, copiers and fax machines. It provides expertise in the form of helping businesses develop online document archives, share documents, run in-house print shops and mailrooms, etc. Very impressive... but do Xerox supply affordable state-of-the-art wide format technical document scanners?

Xerox's success in photocopying made its name an eponym for the making of a facsimile copy, although few talk of "making a Xerox" today. Still, Xerox's good name resonates with quality, for "getting what you pay for", i.e. paying more to get a solid, reliable product backed-up with quick, accessible support. This appeals to the professional classes who once, many years ago now, grew up believing that "you won't get fired for buying IBM". Unsurprisingly, Xerox large format scanners best suit the needs of corporate professionals wanting comfortably expensive, blame-free reliability rather than the latest and the best specified device. As such, Xerox offers less to the average cost-conscious CAD user or small architectural or engineering firm wanting a powerful low cost large format scanner for one of President Obama's renovation projects.

We wonder if Xerox will adjust its historic high prices in order to help America in its time of trouble? If this bill proceeds, will Xerox sell its large format scanners at the competitive prices of its embargoed better specified rivals? Somehow we don't think so. The lesson for the USA seems to be that any retreat into protectionism will be at its peril. If you are forced to "Buy American", you may end up with a product which is less capable and more expensive than those used in rival economies.

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