T Nation

Compmanies damaging Americans


#1

Cut and paste the link below to go to the Lou Dobbs web page and close to the top you will find a link called "Exporting AMerica" and it lists over 400 companies taking away jobs from Americans by outsourcing.

www.cnn.com/CNN/Programs/lou.dobbs.tonight/


#2

I don't need to read anything from Lou Dobbs. Lou's understanding of basic economics needs to be discussed.


#3

http://www.freetrade.org/pubs/briefs/tbp-019es.html


#4

I don't believe that there is a job in the world that is America's by their god given right.

Americans need to compete and earn these jobs.


#5

http://www.foreignaffairs.org/20040501faessay83301-p0/daniel-w-drezner/the-outsourcing-bogeyman.html


#6

You people who are US citizens don't give a shit about jobs being lost by Americans sicken me. And I'm not even the most patriotic, zenophobic guy around, not by a LONG shot.

We have the highest unemployment in close to 60 yrs, a President who isn't serious about domestic policy -which is why he's called Machiavellian- and worse, allows corporations to run wild and free since he is a corporate bitch born to a wealthy, privileged family.
Bush has also put the US back into a massive deficit that will have to be repaid somehow.
Allowing US corporations to do as they please re: exporing capital abroad is something that has to be restricted.

"Department of Labor is forecasting a 35 percent increase in computer-and math-related jobs over the next decade."

-Which are already being exported to India as well as Indian programmers being brought in from abroad because they work longer hours, w/ few benefits, for less money and they speak English. I know this personally as a good friend of mine is just such a programmer.
Tell everybody in the computer indutry who has lost jobs that there is an increase expected.

=======
I don't need to read anything from Lou Dobbs. Lou's understanding of basic economics needs to be discussed.
PM

-Right, you know more.
Economics is still mostly theoretical, there is no hard and fast science to it. Nothing is written in stone.


BostonBarrister

-I'll read it when i have time

Anderson
03/23/04
03:49 PM

I don't believe that there is a job in the world that is America's by their god given right.
Americans need to compete and earn these jobs.

-The whole fucking point is that these jobs are being brought abroad by AMERICAN COMPANIES.
You can't compete with someone working for 1/10th or even 1/4 your wage.


#7

Anderson,

But American people are competing with people who can/need to work for far less the any American can afford to. Average Americans lose jobs because big companies can make more profit by employing elsewhere.


#8

Sonny wrote:

"You people who are US citizens don't give a shit about jobs being lost by Americans sicken me. And I'm not even the most patriotic, zenophobic guy around, not by a LONG shot.

We have the highest unemployment in close to 60 yrs, a President who isn't serious about domestic policy -which is why he's called Machiavellian- and worse, allows corporations to run wild and free since he is a corporate bitch born to a wealthy, privileged family.
Bush has also put the US back into a massive deficit that will have to be repaid somehow.
Allowing US corporations to do as they please re: exporing capital abroad is something that has to be restricted."

Sonny, do you think George W. Bush is an intelligent man?


#9

Moisture- My first instinct is to say that he's a fucking monkey and an idiot but I know he's not stupid. No amount of paternal influence is going to allow an idiot to graudate from Yale and then become a pilot. So yes, he is intelligent. I don't think there are many stupid politicians who are able to rise to a top level even though I'm sure there are a few.
What I don't like about Bush the person, is that we have no idea who he is and what he thinks. THere's nothing "there" when he speaks. He seems like a puppet almost, maybe robotic. He's kind of like Reagan I guess, but damn, at least Reagan had dignity and class.


#10

Sonny,

Thank you for responding. Being a proud moderate, I started this election cycle with an open mind. Let me dissect some of your post.

"What I don't like about Bush the person, is that we have no idea who he is and what he thinks."

I have never heard this particular critcism before. In fact, most of the time, Democrats or other critics slam him for having no "nuance" or acting "like a cowboy." Want some examples? Please read President Bush's post 9/11 speeches. To paraphrase: He said that we would go after terrorists and regimes that supported them. We have done just that. We have engaged in the well publicised military operations and on the less well publicised intelligence and finance fronts. I disagree with your premise. As a matter of fact, he tells you exactly what he is going to do. What is more remarkable (for a politician) he does it. Another example? Medicare prescription drug coverage. The list goes on and on.

"THere's nothing "there" when he speaks. He seems like a puppet almost, maybe robotic. He's kind of like Reagan I guess, but damn, at least Reagan had dignity and class."

This criticism I have heard before. I think it's fair to say that this guy has improved his public speaking ability. Remember, he is not a career politician. He is just now getting his "sea legs." His rise has been metoric. If memory serves, he went from being the Texas Ranger's owner to two time Governor of Texas to President of the United States. I'll take substance over style, any day.

In summary, I don't agree with every action of George W. Bush. However, he is sincere. He is a man of beliefs. He acts on those beliefs. He is the candidate best suited to prosecute the war on terror. When I go into the voting booth, I know that W. is the one who has the best chance of keeping America safe.

It is unfortuntate that there are no other viable candidates. Real political discourse is good. John Kerry has been over-promoted and packaged. It's too bad that he is the best the Democrats have to offer.


#11

Add my company to Lou's list. This answer is straight economics, better technology and more highly educated factory workers. The US invested in lining the pockets of people like Jimmy Hoffa while some other countries invested in the education of its populace, albeit at a sacrifice to its standard of living. We made the wrong choice about 100 years ago and the tide is now turning.

I received the following email from a friend of mine in Bombay today:

Bob:

Thought you might like to see this. You were just 10 years too early.

Bud Ghandhi

http://www.atimes.com

South Asia

US automotive industry heads for India
By Indrajit Basu

KOLKATA - Amid all the offshoring brouhaha, the fact is that there's at
least one industry sector in the United States in which India still
features as the top destination for moving jobs. An online survey
conducted recently by a global management consultant revealed on
Wednesday that the US automotive industry unanimously voted India the
most preferred destination for offshoring engineering and technical
jobs.

"India was the chosen country with a huge margin," said AT Kearney
principal Nagi Palle. Bigger automotive markets, China and Mexico,
lagged behind at 15 percent and 13 percent respectively, while auto hubs
Brazil, Thailand and the Philippines cornered just 10 percent, 2 percent
and 3 percent of the votes. "Most firms chose it for its cost
competitiveness and good quality," said Palle, adding: "What was most
surprising was automotive firms using India more for engineering and
technical services."

After a decade of modernization and revamp, India's auto industry indeed
appears to be finally on its way to integrating with the global auto
industry, and staking its claim there. Scarcely a day passes without
news of the country's increasing presence (in terms of booming auto
exports) in the global markets, or of global auto giants planning to use
India as a hub for their worldwide operations.

Take the instance of two recent major announcements. The Detroit News
created a sensation on Tuesday when it leaked an internal memo of the
world's numero uno auto company, Detroit-based General Motors, saying
that the company was planning to send US$48 million worth of
white-collar jobs to India and Canada to keep up with "competitors who
are driving relentlessly to reduce costs".

The Detroit News added that GM's plan ignores the order of the
Democratic governor of Michigan, Jennifer Granholm, of giving
preferences for state contracts to firms that employ workers in that
state. Last week GM also said it had decided to invest $21 million in
its research-and-development center in Bangalore, India - its first
outside the United States - to turn it into its Asian R&D hub.

And in late January, Akira Okabe, managing officer in charge of Asia,
Oceania and Middle East operations of US and Japan-based Toyota Motor
Corp - which has recently emerged as the world's No 2 car maker - said:
"One of my missions is to use Toyota's know-how and culture of
cost-cutting to turn India into our lowest-cost manufacturing center in
the world. It would be wonderful if we could begin from the development
stage and utilize India's many resources to achieve this."

Toyota and GM are just two of the plethora of auto giants considering
outsourcing from India. Other big names that are eyeing India with a $10
billion outsourcing wallet include Volvo, Ford, Fiat, Toyota, Delphi,
Navistar, Cummins, Caterpillar and DaimlerChrysler, AT Kearney said.
Besides, United Kingdom-based MG Rover, Korea's Hyundai and Japan's
Suzuki Motors, which have already been outsourcing from India for a
while now, have all said they plan to ramp up their offshoring plan
significantly going forward, which will not only include components and
engineering and technical services, but also fully built cars. Non-auto
companies such as US Rail Roads and Oil Lines, too, have started talking
with Indian suppliers to outsource forged components.

For India's auto industry, though, this isn't the first brush with
outsourcing. In 1992, a 40-member GM team spent time in India and
identified about 10 suppliers. But GM said it had to retreat hastily
after "some did not deliver on time [and] there were quality issues,
which resulted in consignments getting rejected". Then, in the
mid-1990s, when Ford, GM and Hyundai set up bases in India, its
auto-industry vendors got excited again and started shouting: "If we are
good enough to supply to Ford and GM here, why can't we supply
worldwide?" But successes then were only stray cases and consequently
the second wave, too, never took off.

Of course there was another reason behind those two failures. In the
early 1990s, global auto makers were going through a period of bumper
profits. Ford even registered its highest profit of the century, and
therefore there was no great need really for it to cut costs.
"Naturally, global auto makers looked at India only with amused
interest," say industry sources.

However, this time around - the current flurry - it is different. The
global auto industry perhaps is going through its worst slowdown in 20
years. Last decade's profits have evaporated. In 2002, the Big Three -
GM, Ford and DaimlerChrysler - lost roughly $1 billion each, and wild
speculation is even doing the rounds that at least two majors, Fiat and
Ford, may not live beyond this decade. Moreover, according to the US
auto industry, more than 200 US-based suppliers (in the $10 million-$500
million revenue bracket) that supply original equipment and components
are in trouble. "Suppliers have been filing for bankruptcy at record
rates for the last few years," though it can be used as a tool to become
more competitive, said Laura Marcero of Stout Risius Ross, a US-based
turnaround outfit.

Which is why suddenly there's a rush to set up operations in India.
"While for the majority [36 percent] the outsourcing route is primarily
to cut costs, 17 percent chose these destinations to support customers'
global footprint and 14 percent to the route to develop capacity," said
Kearney's Palle. He added that nearly 75 percent of surveyed auto makers
have said the quality of products and services sourced from India and
Canada would be on par with the original services, while another 14
percent found the quality to be better than their original suppliers
elsewhere.

But even as a push from Indian suppliers may be matching a pull from
global auto makers for the first time, hurdles still exist. The first
is, despite the fact that India's auto industry has a large number of
suppliers, few may be world-class. And the challenge that global
companies still face is to get them to operate at the same level. The
second, which threatens to be a big one according to Indian auto makers,
is inadequate infrastructure facilities and logistics. In fact, Indian
auto makers such as Maruti Udyog - India's largest car maker and a
Suzuki joint venture - and Hyundai Motors India say they had to set up
captive arrangements to overcome the infrastructure and logistical
problems.

Nonetheless, many consider the latest round of global interest a
watershed and similar to the one seen in the information-technology
industry in the early 1990s. "Vis-a-vis the international market, we are
today where the software industry was in 1992-93," said K N Subramaniam,
managing director of India's largest manufacturer of shock absorbers -
an auto component - Gabriel India.

And according to Automotive Component Manufacturers Association (ACMA)
officials, "this huge support from global auto companies" will help the
Indian auto industry secure a foothold in the global arena, which is
already evident from rising exports. "In 2002-03, the industry had
exported products worth $800 million. This year, we are expecting to
cross $1 billion, and next year onwards, exports could grow by 30
percent," ACMA said.


#12

We (Canadians) get screwed out of jobs by you americans all the time! Sucks now that you realise it happens to you too. Cry me a river.


#13

Local- I've never heard of a Candain firm outsourcing to the US. Example please.


#14

I posted this several a little while back, it didn't get much of a response.

This is from the Wall Street Journel, written by Carly Fiorina the CEO of Hewlett Packard:

Be Creative, Not Protectionist

By CARLY FIORINA

Nineteen years ago, a group of leaders from American business, labor, government and academia issued a report that raised alarm bells in Washington. The report argued that America's ability to compete in world markets was eroding in the face of emerging industries and low-wage workers in Japan and other Pacific Rim nations.

The President's Commission on Industrial Competitiveness, as the group was called, had a simple message: America's workers have always been the best, most creative workers in the world, but they needed a national strategy for competitiveness that was as innovative and creative as they were. Rejecting arguments for protectionism, the commission called on the public and private sectors to invest in keeping America strong in the world-wide economy -- by promoting R&D of new technology, improving education and training, and lowering deficits to improve the cost of capital for business. If that formula sounds familiar, it should. It's exactly the strategy America pursued in the late '80s and '90s, creating more than 35 million new jobs and producing the longest period of economic expansion in our history -- including a whole new IT sector, whose jobs pay, on average, 75% higher than other jobs.

That commission's message seems more relevant than ever as the debate over the outsourcing of white-collar tech jobs heats up in this election year. Once again, our leadership is being challenged -- not by Japan, but by emerging nations like India, Russia and China. What makes this challenge different is that these nations not only share rich educational heritages, but they are investing heavily in innovation and R&D to help drive the next generation of growth. In China, IT spending is increasing at an annual rate of more than 15%.

Not only do our competitors have increasingly knowledgeable work forces, but they can compete for jobs that were once the sole province of the developed world. There is much outcry over this new reality, but not much constructive action. That's why I tried to provoke debate last month when I said, "There is no job that is America's God-given right anymore." Now, more than ever, other nations are developing the skills to compete for jobs that would have historically been done by Americans. We shouldn't assume that they won't make an effort to win them. But we should work to keep America what it has always been: the world's most resourceful, productive and innovative country.

Thus far, attention has focused on a handful of companies, like HP, which have sourced some jobs to other countries. As happened with Japan in the late '80s, everyone from presidential candidates to unions to state legislatures to Congressmen are offering protectionist proposals to limit or prohibit the practice. Jobs are a gut-wrenching issue. And there's no question that companies that source jobs overseas have an obligation to help workers left behind get the tools they need to find jobs and succeed. But let's not forget the lesson that Japan itself learned in the '90s: when you build walls to protect your own workers, in the long run you end up hurting them.

Any job losses to foreign countries are particularly painful when the U.S. economy is failing to produce net job gains. Every job is important because each one represents an American's livelihood and ability to raise a family. Yet spending our time building walls around America will do nothing to help us compete for the millions of new jobs being created. Instead, we must focus on developing next-generation industries and next-generation talent -- in fields like biotechnology, nanotechnology and digital media distribution; around issues like IT security, mobility and manageability -- that will create long-term growth and jobs here at home, while raising all of our living standards in the process.

That's why the eight member-companies of the IT industry's think tank, the Computer Systems Policy Project, have invested $80 billion in R&D, capital expenditures, education and employee training here the past three years alone. We're betting on -- and investing in -- America. It's why HP, with a market presence in 178 countries, will always be based here, and why we have 60,000 workers here -- because America is the most innovative country on earth. It won't stay that way if we run away from the reality of the global economy. We must do what Americans have always done -- work to keep our country in the lead, by making it the most competitive and creative of all nations. We don't have a second to waste. The rest of the world isn't waiting.

Ms. Fiorina is chairman of Hewlett-Packard.


#15

Do you think wage rate is really the deciding factor when moving production off shore? It isn't.

Firms must pay start up costs, training costs, shipping costs, and agency costs to name a few expenses when they decide to offshore their work. In addition to those expenses, firms must take on political risks, expropriation risk, and foreign labor risks when offshoring.

The truth is, firms are willing to go through all of these expenses and risks because of the laws and regulations that are being called for on this thread.

It's convienent to blame cheap foreign labor, but the rising cost of doing business in this country, from law suits, to insurance, to regulation, is so high, that firms are better off taking on the aforementioned offshoring costs and risks to avoid the expenses. Wage rates are part of the equation, but they are far from the problem.

Last week I listened to a Vice President of a major manufacturing company explain why they moved their corporate office to Bermuda. The answer? They were being taxed so much in America, on top of the taxes that they paid in some of their overseas markets, that they could not compete in a global economy with their global competition by keeping their business here.

Isolationism and protectionism are dead concepts. They ignore the reality of the global economy. I realize these are American firms that are offshoring their business and as Americans, we want them to employ our citizens. However, until we as a country quit bashing big business, and realize that business is what makes this country great, and structure our regulatory system accordingly, those jobs will continue to go to countries who compete for them.

Now I realize that some of you are going to read what I hace said in the extreme, and assume that I am saying we should allow corporate exploitation of the people and the environment. I am not. I am simply calling for more reasonable market based sollutions and regulations. We are regulating ourselves to death and we are driving business, the backbone of our country, away.


#16

Lastly, one thing I do find interesting, is looking at some of these responses in a business ethics perspective.

I believe in the stockholder theory of business ethics proposed by Friedmen, that firms have a fiduciary duty to act in the interest of their stock holders.

In contrast, some of you apparently subscribe to Freeman?s stakeholder theory of business ethics, that firms have an equal duty to various stakeholder groups, such as members of the community.

While I might disagree on philosophy, and I certainly disagree on practice, I find it interesting to note the source of our differences.


#17

Anderson, stop trying to spread the bullshit around. Its starting to stink in here!

Call a spade a spade and admit that Out sourcing is all about increasing share value by any means necessary, a practice which benefits the few who are already very wealthy and ravages communities. Go to old industrial towns and see what happens when the jobs leave.

But hey, Walmart is hiring! $5 an hour, ooh hyeah, that'll help pay the mrotgage.

Sure, some of us middle class or blue collar MIGHT BENEFIT, SLIGHTLY, when the increase in value of shares brings up our IRAs - a LITTLE bit. That is not worth the price paid by communities that lose jobs.

"Do you think wage rate is really the deciding factor when moving production off shore? It isn't. "
---It is the most imp't factor by far. The only other reason to OS is wanting to increase market share in an area of the world to which it is too expensive to ship products to, thus making it easier to simply produce them there. Or, they cannot be made in the US at a low enoguh cost to export them to certain countries. For ex., automakers build cars abroad for those markets.

"Firms must pay start up costs, training costs, shipping costs, and agency costs to name a few expenses when they decide to offshore their work. In addition to those expenses, firms must take on political risks, expropriation risk, and foreign labor risks when offshoring."

--Bullshit. And you know it. The initial outlay is, depending on many factors, pays immediate divdends, prob. in less than 2 yrs time. THere are mnay interviews out there where company leaders talk about how there is no comparison betw paying someone .25 cents an hour and, say $11. That's a saving of 4,400% PER HOUR.

Political, Foreign labor risk- China is a f'n police state! A country where people are kept in line by terror and violence. And companies are allwoed to do whatever they want. Go there sometime. Have fun. Send a postcard.


#18

I can't site any examples of jobs being taken away from Canadians, but American tarrifs and boycotts on Canadian goods have cost us alot of Canadian jobs. But onto the topic.

Do you give money to every homeless person that asks for it? probably not. Why? Because it is your money and you worked for it and you want it for yourself. Same thing with business in my opinion... they are looking out for their best interest. Sure thery aren't helping their fellow countrymen... but when you pass a homeless person and don't give him money you are in the same category on a smaller scale.


#19

It's convienent to blame cheap foreign labor, but the rising cost of doing business in this country, from law suits, to insurance, to regulation, is so high, that firms are better off taking on the aforementioned offshoring costs and risks to avoid the expenses. Wage rates are part of the equation, but they are far from the problem.

I call Bull!

Wages account for 70% of the price of any product/service.

If you want to find the critical variable, that`s the one! No better place to start if you want to fill your bank account.

And since these rebates dont translate into downward pricing or dividends for shareholders, I dont give a rats ass about executiveseffortsto keep company profits andearningshealthy. I sure aint getting richer because of their efforts, stockholder or not.

Its the Dark Ages once again. Everything is going back into the pockets of a select fewkings`. North America is becoming a victim of USSR-isation, a third-worldization instead of keeeping the lead. Enjoy it while it lasts.


#20

CANADA: Last time I checked, 85% of Canada's production was sold internationally.

Not bad.

What is really bizarre is that Canada has tons of natural resources, and it's cheaper to send them to the US, have them transformed into products there, ship back the products here, and sell them on the Canadian market, all instead of producing locally.

Maybe there's something I didn't get along the way, or the industrial structure sucks here in Canada, or both. I guess it's cheaper that way. If so, so be it, I love efficient markets and encouraging the winners (US). But, still, mindboggling.

(Too bad the US doesn't annex us or invade us. Think of the economies of scale assiated to European-Union-ing US and Canada! Dream on, though. Culture will never permit it...)

ANDERSON: Are you referring to Milton Friedman, Nobel Prize Winner? (And might I add a breath of fresh air in the whole Economics academia! He deserves that title!)