Tuesday, February 23, 2010

NCR, GE and Dow "Backshoring" as Boeing Profits, Plans 10,000 Layoffs

(Very Special Thanks to James McMurtry)

NCR, GE, DOW “Backshoring” Manufacturing While Boeing Profits, Plans 10,000 U.S. Layoffs

There is hardly a media story to stumble upon these days that doesn't reveal overeducated Americans whining about not being able to get hired despite their educational training and years of experience and/or how their college educated children are living at home with them because Americans need not apply. Meanwhile, others wonder what U.S. politicians and their corporate paymasters are doing to reverse the disastrous H-1B visa program that began in 1990 to give American jobs to foreign workers. So, what is being done to address the need to reform U.S. labor and quality of goods and services delivery negatively affected by outsourcing/insourcing?

Over concern that outsourcing “distanced its designers, engineers, IT experts, and customers” from optimal manufacturing processes and output, NCR Corporation has decided to bring back ("in part") or “backshore” their operations. (h/t Rob Oak at The Economic Populist.) Now, General Electric and Dow Chemical are also following suit, and while the concept of bringing jobs home is every politician's populist wet dream of a slogan, what's behind it? If these jobs are coming back home, one would think this means they are returning so American citizens can get back to work while we stop importing cheap labor. While the manufacturing sector is now talking the happy talk, what is the software sector doing? Computerworld's Patrick Thibodeau explains that Boeing last week issued 1,000 layoff notices to employees, many of them working in IT, with an overall plan to layoff 10,000. Non-personhood Boeing, btw, showed beaucoup profitability and, as one commenter notes:

While profits are up, let's fire some more Americans! IBM opened a new research center in India and laid off thousands of Americans. Microsoft, Intel, Boeing and who even knows what other companies are doing the same.”

Software, as a sector, by no means compares to the detrimental environmental emissions as the polluting manufacturing sector. So hey, why NOT bring it back here to level the third-world playing field? Why should China and India have to breath all that crap? Isn't America a third world country now? Here is what manufacturing companies like NCR, GE, and DOW are doing to “backshore” jobs and consolidate them back here:

For years, the NCR Corporation simply followed the pack. Like many other large U.S. manufacturing companies, in the past couple of decades the maker of automated teller machines (ATMs) relied heavily on offshoring and outsourcing to trim factory costs. By making much of its equipment in cheaper offshore locations in the Asia/Pacific region, and by hiring Singapore’s Flextronics International Ltd. to make other equipment, NCR could slash hundreds of millions of dollars in plant expenses and be reasonably certain that its ATMs met quality standards.
But recently, NCR has rejected this strategy — at least to a degree. In 2009, the company decided to move its most sophisticated lines of ATMs from its plants in China and India, and from a Flextronics facility in South Carolina, and instead manufacture the machines in Columbus, Ga., not far from the NCR innovation center, where its new technology is on display. The reason: The company was concerned that outsourcing distanced its designers, engineers, IT experts, and customers from the manufacturing of the equipment, creating a set of silos that potentially hindered the company’s ability to turn out new models with new features fast enough to satisfy its client banks."

 General Electric and Dow are also backshoring, with the siren song of calling to bring jobs 'back home":

 General Electric Company Chief Executive Jeff Immelt recently attracted attention for remarks he gave to a West Point leadership conference calling for U.S. companies to make more products at home. Demonstrating Immelt’s commitment, GE announced in the summer of 2009 that it would build two new plants in the U.S. — a factory in Schenectady, N.Y., to make high-density batteries and a facility in Louisville, Ky., to produce hybrid electric water heaters currently made in China. Dow Chemical Company CEO Andrew Liveris similarly has appealed for a renewed focus on manufacturing in the United States.”

The U.S. founded, multinational mega-behemoth GE knows how to fan the deck, too, when it comes to “partnering” with exceptional outsourcing companies like Wipro as this article explains GE, Wipro, to integrate healthcare units:

As per the consolidation plan, several existing standalone business units and manufacturing plants of GE Healthcare in India would be integrated under the Wipro GE Healthcare entity. The companies said the strategic move would help in effective management, resource mobilisation and accelerating the growth for GE Healthcare, the $17 billion healthcare business of GE through Wipro GE Healthcare's large distribution network.”

Before we applaud the remote possibility that U.S. CEO's have shunned the sociopathic practice of kicking American workers to the curb in favor of foreign slave labor, the crucial question to ask is “will those jobs coming back home be filled by Americans or is 'backshoring' going to pave the way for MORE unnecessary imported foreign workers here?” Is the manufacturing backshoring trend a Trojan Horse for building a bridge to immigration or temporary cheap labor (Ron Hira h/t No Slaves) that completely fails to reform harmful American worker labor practices? It doesn't take an economist to figure out that if rising numbers of millions of Americans are unemployed, millions of imported workers are not required. It is good news to read U.S. companies are bringing jobs home. But will the “jobs coming home” move temporarily bring a few jobs to a few Americans at lower, third world labor arbitraged wages?

Jobs for U.S. citizens are not commodities like GMO crops under some skewed NAFTA agreement. But for many years of job outsourcing,  to  caste-minded neo-frat boy bean counters running U.S. corporations,  a slave is a slave is a slave.  Maybe companies like these who are bringing jobs back home will change all of that  and this country can work to reform  labor rights and hiring practices that put  citizens first just as other countries protect jobs for their citizens. I think of the unemployed, intelligent, fifty something woman with two masters degrees and her unemployed, college educated son living at home and ask: if Americans can't make it here anymore, where will they and how?

Party on, plebes!



Anonymous said...

"If we purchase a ton of steel rails from England for twenty dollars, then we have the rails and England the money. But if we buy a ton of steel rails from an American for twenty-fiv­­e dollars, then America has the rails and the money both."

-Abraham Lincoln

2Truthy said...

The Left is pleading for more corporate taxation, but I say give corporations tax cuts if they invest in sustainable local hiring practices to stimulate our economy by hiring Americans.

Corporations as stewards of good citizenry must stimulate our economy by hiring Americans and ELIMINATING slave labor practices (H-1B and other visa/migration immigration loopholes) that perpetuate labor arbitrage and corrupt immigration law firms. We have a crisis of American unemployment resulting from nearly two decades of cheap imported foreign "skilled" labor, not one of corporate taxation.

Antwerp's Placebo said...

Outstanding blog.