Chip maker shifts design to India (another one bites the dust)

BBC ^ | 22 April, 2004

[Cronos]

I'm an radio-electronics buff, and looking at the sets made in the 1950's, it amazes me that back then, we were on the top and then a generation or two later, we are not there now

That comparison does not hold. REmember that in the 1950s the world was just recovering from a war -- Germany and Japan were in ruins, barely able to feed their own people, forget about manufacturing etc. The rest of Europe was in scarcely better shape, France's industry was destroyed as was Italy's, the UK was in a shambles etc. Future ASEAN countries and India were just gaining independence and China was just cleaning up after the end of it's decades old civil war.

There was NO Competition. You cannot compare that time to now. That situation can never happen again.

[Cronos]

The solution is not putting up barriers to stop companies from "out sourcing" but to instead provide an environment that makes doing the work here more attractive.

That comes down to excessive regulation and taxation. Attacking the problem some other way is destine to fail in the long run.

Exactly. We should cure the problem at the source.

[Cronos]

Dpwiener Wherever did you get the idea to associate India with "educated slave labor"?

Havoc Might have been from guys like me who've been calling it that for 10 years. Or it may just be from gut reaction that pretty much everyone has. That's what it is. Slaves without chains. Pay them a pittance, easy to control and easy to dodge the tax system. It plunged us into war once, so the government seems to have decided twice might not be a bad thing.

How can they be slaves if they're paid? How can they be slaves if they can resign anytime they want? How do you say it is a pittance when it's a king's ransom back in their home countries?

[Cronos]

for a chip maker to outsource either chip production or chip engineering would seem to be suicidal!

AMD is NOT outsourcing anything. It is setting up another design shop in a different location, not contracting that work to another company.

[Cronos]

Perhaps they'll invade a middle eastern country for their oil.

Not really, too far, the only way they could do that is by sea and I doubt the Australians or Indians would be too please to see the Chinese navy in the Indian Ocean. They may try to invade a Central Asian nation, but the Turkic people there can kick a** and the Russians and Indians won't sit back and do nothing.

[Cronos]

We have three DELL computers and I don't plan to buy another unless their policy changes.

Would you be willing to buy a PC with the same configuration as a Dell, but with it's call center in the US. This would cost more than the Dell. Would you be willing to buy it? That's what we need, more folks willing to pay extra for American goods. That is what will bring the companies back (along with removing a lot of the regulations and govt. fluff)

[Havoc]

How can they be slaves if they're paid? How can they be slaves if they can resign anytime they want? How do you say it is a pittance when it's a king's ransom back in their home countries?

Simple, We have a cost of living in this country associated with the market we built as a nation. The market we built has given us that high cost of living but has also allowed us to enjoy the fruits of our labors. We produce for our market. So do they. But you disown people in this market in favor of cheaper labor outside this market and ship the product back to this market because you don't like the rules here. You're essentially telling those people they aren't good enough to earn what we earn here. They couldn't come into our market and live on what you want to pay them to produce for our market. In terms of our market, it's sweatshop labor, slave labor.

Would you do your job for 50cents an hour? Would it be fair? Could you live on it? I expect answers to those questions because they seem to be questions you all want to avoid because it lays your arguments bare. You outsource to produce for this market and pay people less than what a retail worker earns to do a skilled job. That destroys the worth of an education in this country. And it is not competition.. which is why business likes it so much. Those people in india are being paid, in some cases, 1/10th what workers here in the states would be paid. Lower productivity, bad product; but, higher profits. They have no rights in our system; but, they're being conned into working for 1/10th the going rate here because it's a kings ransom in their own economy where the rules are different. It's cheating the system and taking advantage of a people in order to disown fellow countrymen and destroy their wage base - all in the name of higher profit. Not just profit.

If these businesses don't want to work within our system honestly, then I see no reason to honor the business licenses or articles of incorporation they hold in this market. There are rules, laws and moral responsibilities that go with living in a free republic. Not betraying your neighbor is among them.

[Cronos]

Good points, but You're essentially telling those people they aren't good enough to earn what we earn here.
Isn't quite true. They ARE being paid handsome wages by which they can have a lifestyle equivalent to what someone earning 10 times as much in the US would have.

So, they are being paid

They are also free to leave the jobs

And the money they earn can give them a great standard of living.

[dfwgator]

Yeah, burger flipping at $5.15 per hour, no benefits.

Forget it, they're already automating that.

[dfwgator]

If you have to hire TEN times as many people, you still are far ahead.

Have any of these managers ever read "The Mythical Man-Month?"

[Cronos]

Would you do your job for 50cents an hour?

Would I do my job for 50 cents an hour in the US? No. Would I do it in a country where $1 would probably give me a McDonald's supersize meal (according to the burgernomics scale)? Yes.

[dfwgator]

Dell has only changed there business customer support back to domestic sources.

And let's face it, all that job entails is reading off information according to a script. Hardly the kind of job it takes a degree in Engineering to do.

[Euro-American Scum]

Forget it, they're already automating that.

They can't. Those jobs are entitlements for illegals.

[dfwgator]

That comparison does not hold. REmember that in the 1950s the world was just recovering from a war -- Germany and Japan were in ruins, barely able to feed their own people, forget about manufacturing etc. The rest of Europe was in scarcely better shape, France's industry was destroyed as was Italy's, the UK was in a shambles etc. Future ASEAN countries and India were just gaining independence and China was just cleaning up after the end of it's decades old civil war.

You forgot the other main factor, a good chunk of the world was still in love with that failed experiment, Communism. With the end of the Cold War, the rest of the world finally started to get it, that capitalism works.

[Cronos]

You outsource to produce for this market and pay people less than what a retail worker earns to do a skilled job. That destroys the worth of an education in this country

Outsourcing happens because Joe Public wants a cheaper product. To get that cheaper product costs HAVE to be cut somewhere. You can't cut that from advertising or other marketing because then your company would be dead. You can't have a company and make "Made in USA" as your USP because it won't work -- folks have tried it and Joe Public doesn't buy in enough quantity to justify this.

Do YOU make a conscience effort to buy American? Even when it may be more expensive. If you do, then I salute you, we need more folks like you. If you don't, then the problem starts with you.

Don't kick the companies for giving folks what they want, if they didn't they would be out of business.

[Cronos]

They couldn't come into our market and live on what you want to pay them to produce for our market. In terms of our market, it's sweatshop labor, slave labor.

That's convoluted logic. In terms of the Swiss market, WE have sweatshop labor (the cost of living in Switzerland is very, very high)

[Cronos]

And let's face it, all that job entails is reading off information according to a script. Hardly the kind of job it takes a degree in Engineering to do.

Well, an ideal tech call center would have technical people, maybe even engineers. But, to have those people you have to pay them well. Would Joe Public be willing to shell out money to have those expensive but top of the line call centers? If he (and a significant number of his fellows) were then companies would provide them.

It IS cheaper to hire a better qualified person in a cheaper country. So, if we're just looking for a cheap PC then that's what we will get.

Companies that are Dell's corporate customers have more clout and spend more and can and HAVE demanded better service (for which they probably pay more). Make it worth Dell's while to hire only in America and they will do so.

[dfwgator]

Not only that, but many more people are now participants in the stock market. It has become "amateur hour", where if people don't get those 40% annual returns that they got during the late 90s they'll pull of the mutual funds quicker than you can say "Jack Robinson."

[Cronos]

capitalism works.

Very true. What we're seeing now is just competition.

[Cronos]

Those people in india are being paid, in some cases, 1/10th what workers here in the states would be paid. Lower productivity, bad product; but, higher profits

Actually, for technical jobs, the productivity rates are comparable to those in the US or anywhere else. That's why AMD is shifting there.

Productivity is the same, the product is good quality, but the costs are lower.