Ron De Feo, CEO of Terex, a global manufacturer of capital equipment used for earth moving, lifting and material handling, and one of Westport’s largest employers, decried the US’s failure to invest in infrastructure before Westport Sunrise Rotary on Friday.
90 percent of today’s Terex, De Feo stated, results from investing $40 Billion in over 40 strategic acquisitions during the past 22 years. Many of these have made it a major competitor in infrastructure construction around the world.
He said the company is “pretty positive about the current economic environment,” which he said offers “slow but progressive growth.”
He moved on quickly to the core of his talk – “Infrastructure Investment… Or the Lack Thereof.” He called such investments “relevant for where we live, for our company and for our country,” and equated them with “economic prosperity.”
Infrastructure investments have been “transformative over the years.” The Erie Canal, opened in 1825, was the US’s largest infrastructure project to that time, one that reduced the cost of moving a ton of flour from Ohio to New York from one hundred dollars to four. The intercontinental railroad, Panama Canal, our interstate highway system and the Autobahn all had similar impacts.
De Feo listed problems that slowed the rebuilding of our national infrastructure – shovel ready projects that weren’t, among them a bridge over I-95 in Westport that was delayed for almost one year, and was emblematic of a lack of executable projects that reduced the American Reinvestment and Recovery Act from a proposed $100 Billion to $47 Billion program. And the Highway Trust Fund he called an “oxymoron” because its 18.4 cent per gallon gas tax was enacted in 1993, has not been increased since then, and has forced many states to continually up their own taxes.
Looking ahead, there is a “woeful lack of planning” that retards construction and makes the process one that “can be highly politicized.” De Feo called for additional funding, but said no one has the courage to do it, which “puts our future in jeopardy.”
He cited economic data to make his case: transportation infrastructure spending is up in absolute dollars, but down as a percentage of GDP over the last 50 years; defense spending has been generally trending down as a percentage of GDP for the past 40 years, but its savings have gone to growing entitlement programs rather than infrastructure, and these “crowd out all other government spending.”
He called himself sympathetic to the “safety net,” but added that “eroding infrastructure will impact peoples’ lives.”
He sees an “insufficient vision of what our country should look like,” then recommended coalescing investment around ten to fifteen multi-state “economic zones” such as one in the Upper Midwest from Wisconsin to Chicago and down through Indiana to St. Louis and another on the west coast, from Phoenix to Las Vegas and Los Angeles and north to San Francisco.
We can begin the necessary undertaking by defining our “future state,” developing plans to achieve it, then creating public and private partnerships to fund and build it. Most important to these tasks will be finding the political will to both streamline the process and fund the projects.
To fund the program he recommended increasing and indexing the federal gas tax, or taxing vehicles for miles driven. The latter he speculated could be enacted during the upcoming lame duck session. He also recommended broader “general tax reform,” but offered no hard specifics.
De Feo also addressed problems here in Connecticut – the 100 year old Connecticut River Bridge that not infrequently gets stuck in the open position and delays rail traffic and the long outdated Tappan Zee Bridge. He said our highways are overcrowded due to a lack of a rail freight link between New York and Boston, and he called Bridgeport’s Harbor “appropriate for 100 years ago.”
He called Connecticut’s weak infrastructure one of the reasons Terex does not manufacture here. He also commented that a failure to invest makes it difficult to return our state’s economy to its manufacturing roots, and, instead makes it a “service economy” state.
We take infrastructure investment for granted. We shouldn’t.
Photo by Hal Levy.