patrick.net

What do you think, is this baloney that GM can outsource after we give them a 350B bailout?

The bailout was a calculated political move, not an act of charity.

4x, do you happen to be a Forex trader?

No, I am in the IT Services industry. We have been hit hardest by the offshoring of American jobs. I never said I thought it was baloney, I only asked the question to stir the pot here. My thoughts are that it goes both ways and what i foresee is that housing and other products will have to drop to match wages...but if we keep offshoring America then wages will drop to all time lows creating neighborhoods of lower economic ghettos.

Drive through the City of Compton to get a better feel for what I am talking about.

If you ask me, outsourcing makes sense on paper only, at least in many cases. One of the most valuable asset of a company is its corporate culture. That takes more than a few consultants and a few years to build.

While I will strongly defend the right of a corporation to outsource labor, I believe they are not necessarily doing their shareholders a favor for the long run.

Hate to say it but if they are going to be competitive in that market, they will need to build cars in that market. It is good overall because it does improve incomes in India, and profits will trickle back to the US.

This is different than the model where American companies make products overseas to bring back into the country, which is very destructive to our own economy.

It is international business theory that to open foreign developing markets, you use the low cost labor there to make the products you are selling in that country. We couldn't expect American made exports (at $75/hr burdened labor cost LOL) to be competitive or even feasible to the average Indian consumer.

Remember that engineers there are thrilled to make $10,000 a year.

Malcolm/Peter:

My thoughts on how to slow the outsourcing trend are that we should force companies to keep a workforce in America for local products and use the foreign resources to produce foreign products. This keeps our companies globally competitive and saves American jobs.

Your thoughts?

4x

I agree, but I don't like the notion of mandating this or that. I do support policies that encourage your goal. One such idea is to treat American goods made overseas as foreign imports. So, if we have some protectionism in the form of tariffs, those products would be treated the same way as a product made by a foreign company.

nice point.

take your personal pic down, you dont want employers reading your viewpoints.

My thoughts on how to slow the outsourcing trend are that we should force companies to keep a workforce in America for local products and use the foreign resources to produce foreign products. This keeps our companies globally competitive and saves American jobs.

What if an American company outsources a SaaS implementation that serves customers in the US? When does the importation occur?

In this day and age, national boundaries are disappearing fast. I think these should happen:

1. Health care reform - this lowers the cost of retaining employees and running small/medium businesses
2. Lower corporate tax and payroll tax rates
3. More resources for start-up companies

Instead of actively protecting jobs, we can prepare the population for changes in the global business environment. Moreover, people should be encouraged into starting their own businesses. I think the enterprising spirit is what separates us from the rest of the world.

Remember, globalization will be very hard on the labor class in the developed world. Unfortunately, stopping or slowing globalization is next to impossible, as it is gaining steam every day. We should really try to benefit from this trend as a society.

I don't understand the GM bailout at all, to be honest. Why do we give a shit about the automobile industry? As a society, we need to be moving away from automobiles anyway and towards mass transit systems. GM is a large employer, but not THAT large.

Imagine a world where GM (or Chrysler) didn't exist. We'd still have plenty of healthy competition in the auto market, and plenty of people in the US would be employed by auto manufacturers.

So, who cares if they fail?

As much as I abhor it, at least the bank bailouts made some sense (notwithstanding AIG, which was nothing but a hand out to GS). If the banks go under lots of other systems unwind and the final impact is much larger than the company itself (along with the tax payer burdens as we cover the FDIC shortfalls). The GM thing strikes me as the kind of thinking that someone still stuck in the 70s would come up with.

Policy decisions are made to create a better future for the politicians, not the necessarily country.

BTW, why should be move away from automobiles and towards mass transit systems. Remember, Europe is a bad example to follow, its downfall is nigh.

GM is a large employer, but not THAT large.

What about the suppliers? It is a connected industry. (I am not saying that bailout out failed companies make sense at all.)

As much as I abhor it, at least the bank bailouts made some sense (notwithstanding AIG, which was nothing but a hand out to GS).

Everything in the financial industry is very connected. You cannot disapprove of a single bailout simply because one participant could profit from the situation. More power to GS if they got a handout!!!

@peter

In this day and age, national boundaries are disappearing fast. I think these should happen:

1. Health care reform - this lowers the cost of retaining employees and running small/medium businesses
2. Lower corporate tax and payroll tax rates
3. More resources for start-up companies

I agree with the above, but we also must enforce polices that keep jobs local.

I agree with the above, but we also must enforce polices that keep jobs local.

That I am not very comfortable with. Perhaps it is better to create economic conditions that encourages keeping jobs local?

@Kevin

I don’t understand the GM bailout at all, to be honest. Why do we give a shit about the automobile industry? As a society, we need to be moving away from automobiles anyway and towards mass transit systems. GM is a large employer, but not THAT large. Imagine a world where GM (or Chrysler) didn’t exist. We’d still have plenty of healthy competition in the auto market, and plenty of people in the US would be employed by auto manufacturers. So, who cares if they fail?

Actually, prior to downsizing GM employed 68,000 American Workers and Toyota employs 70,000 Japanese nationals and 7,000 American Workers. Now, GM employs 34,000 American Workers...so now America has 26,000 less middle class citizens where as Japan has a thriving industry that can service the population demand for wage paying jobs. America needs to be #1 or a close #2 in every industry so that we can continue to thrive. Letting GM fail would be akin to sending 70,000 more jobs overseas....plus their suppliers.

Not that GM is concerned with making vehicles in the US anymore....so I say all this with a grain of salt.