Note to America: Outsourcing Jobs is good for you...

[graywolf624]

i have yet to see the auto industry having products which are cheaper (GM) while sending factory jobs to mexico from michigan.... then again, most GM products have a cheap look/feel to them. the cheap feel is in a great many of the cars in the other manufacturers as well, but GM generally is seeming to be winning in making cars that dont look fresh. but mabey thats just me However, I am all about free trade, and expanding buisnesses in capitolism, rather then shifting greatly. although, i know a plant can not run efficiantly in a building which is 100 years old....

The interesting thing here is that gm has adapted toyotas lean manufacturing process. This is why they are breaking even. They aren't really doing that well though. They have an outside cost. Particularly 3-4 x as many retired employees then workers that they must pay retirement too. Ford meanwhile is still heading towards bankruptcy. These 2 are definitly propping up the market prices because of their outside costs. Then there are also tarriffs worldwide on certain car related items. Toyota is the only manufacturer that is making obsorbinent profits on their cars. And frankly while they are reliable cars, I feel if you compare the features of a camry (for example) to other cars in that price range the other cars have 10x as many features. However,they are riding off their reliability reputation.

[monabonejakon2002]

I'll tell you what is funny/ironic/sad.

Americans have always been going on about how Immigrants are taking their jobs. Well, they are taking jobs, but they are jobs that Americans don't want to do!

Now we have fortune 500 companies giving away jobs to other countries, and these are jobs that Americans want (and need).

Amazing.

[fishfreek]

http://news.com.com/2100-1001-518261...t=dht&tag=ntop

Dell admits it has "learned its lesson" after being forced to drop its Indian call center last year following customer complaints about the quality of service. The call center operation for the OptiPlex desktops and Latitude laptops was moved back to the United States. Dell CIO Randy Mott said in an interview that the Bangalore center was unable to deal satisfactorily with the volume of calls generated by the rapid growth of those product lines. "In that example we were not as efficient as we wanted to be," he said. "We were growing very quickly in that (consumer) segment. It got a little ahead of us. We took the decision to get it back under control. Our customers expect more from Dell than other companies, and we weren't meeting those (expectations)." Surveys released in February showed that, while Dell's market share has continued to grow, customer satisfaction has declined. The company has acknowledged the problem and said steps are being taken to improve tech support and other customer services. Mott did not rule out future expansion in India and said Dell has a policy of "all shoring"--spreading jobs throughout Dell's global reach--wherever the right skills are to meet the needs of its global business. "We certainly learned a lot of things, and we'll be smarter about our growth in newly developed areas," he said. Mott has been CIO at Dell for four years now after his move from U.S. retail giant Wal-Mart Stores, and said being CIO for a technology company has its good and bad points. "One of the positive things about it is you have a management team that understands the importance of technology," he said. In Mott's time at Dell, the IT budget has dropped from 1.91 percent of revenue to 1.44 percent, though of larger revenue, and the company is spending less in real dollar terms. Mott said he plans to bring that down even further to around 1 percent of revenue, but that is likely to mean an actual dollar increase, given Dell's ambitions to be a $60 billion revenue company by 2005. And Dell is getting more out of its own IT for that money. Mott said his department completed 480 projects last year and has 650 on the table this year, with 60 percent of the 3,000 IT staff now working in development. Internally the priorities include the Dell enterprise data warehouse, its global online shop and the migration from Sun Solaris running proprietary Unix to Red Hat Linux, which is set to be completed this year. Externally with its own product set, a lot of resource is also going into development around applications for Dell's "one-stop shop" services business. One area Dell won't be looking at for its own needs is outsourcing. Mott admitted that outsourcing can lead to an "average" IT cost for some firms but said IT is a core part of Dell's business. "The last thing we want is an average cost structure," he said. "We consider IT a core competency. It is something we look to for sustainable competitive advantage."

[pranesh76]

Some interesting points to think about. If outsourcing were to stop, inflation would rise to ridiculous amounts. Way more than what you would get in raises every year. Would ANYONE be willing to pay $1000 for technical support for 1 year instead of $150 for 1 year. Its not an exact number but imagine you pay a tech service person $45K instead of 10K. Business sense wise, it makes perfect sense to outsource. As for hiring people who can barely speak english, I agree completely that they need to pick who to hire more carefully.

The basic point is this. Outsourcing is necessary to keep inflation down. Until the economy as a whole recovers, there is no choice but to keep doing what they have been doing.

Or if you disagree, think of it this way. For every 5 jobs outsourced, there is enough money left over for 2 jobs. Otherwise, there would be only 3 jobs in total and you would have to wait(in the dell customer service example), 20 mins instead of 10 to get a rep. Pick and choose what you would rather have.

[RC45]

Originally Posted by pranesh76 Outsourcing is necessary to keep inflation down. Until the economy as a whole recovers, there is no choice but to keep doing what they have been doing. Or if you disagree, think of it this way. For every 5 jobs outsourced, there is enough money left over for 2 jobs. Otherwise, there would be only 3 jobs in total and you would have to wait(in the dell customer service example), 20 mins instead of 10 to get a rep. Pick and choose what you would rather have.

Bull.

[pranesh76]

What is so "bull" about it? Which part of that dont you agree with?

Think of software engineers that are outsourced. They get the job done with 1/5 the money.

Profits are increased, and so more jobs are created here in the states.

It seems pretty clear cut to me.

[pranesh76]

Or are you referring to inflation? So think of this. Bring back all the mfg from other countries back to the states. Think of silicon chips for example.

a $.45 chip will end up costing $5. Who ends up paying? Consumers. Doesnt that equal to inflation?

[graywolf624]

pran- while I agree with your underlying concept, your terminology is poor. That is not what inflation is. The price of the goods we buy are decreased courtesy of the outsourcing(as was previously stated). That is just one benefit to outsourcing. Their is also the benefits of wage shifting and more goods all around.
Inflation though would only apply if we were talking goods that did not have a viable alternative(something like food). Inflation is generally not a function of 1 sector. See CPI for more information.

[pranesh76]

Good point. Thanks for clarifying that for me graywolf.