Posted on 02/17/2004 12:42:53 AM PST by sarcasm
BOMBAY, India -- The rising political reaction in the United States to the loss of some American jobs to workers overseas is creating a whiplash effect among India's leading technology companies.
"The dramatic buildup of opposition before the U.S. elections is disturbing," Jaithirth Rao, the chairman of a leading software and call-center company, MphasiS BFL Ltd., said in an interview at the three-day annual meeting of Nasscom, India's software industry trade association last week.
MphasiS, based in Bombay, has 6,000 employees, and its operations are spread across the cities of Bangalore and Pune. More recently, it has expanded to Shanghai, China and Tijuana, Mexico.
Companies such as MphasiS are the biggest beneficiaries of a movement among many of the largest corporations in the United States to shift certain white-collar work to low-cost India, where local companies are adding thousands of skilled, English-speaking employees every quarter to meet the increased demand. At the same time, companies such as General Electric and Microsoft Corp. are expanding their operations in India on everything from basic customer service to high-end research and development.
The political reaction in the United States against such outsourcing has built rapidly in the last year; nearly two dozen states have voted on legislation to ban government work from being contracted to non-Americans.
More recently, the Senate approved a bill aimed at restricting outsourcing of contracts from two federal departments. The House has not acted on similar legislation.
"We are concerned that this is federal legislation and that it is sponsored by a Republican," said Kiran Karnik, president of the software association. "Republicans are traditionally free-marketers."
Karnik, who has been vocal in promoting the cost-saving advantages of India's workforce, said he was perturbed that "all of the election-year rhetoric equates offshoring with job losses."
More than 70 percent of India's software export revenue comes from companies based in the United States, but less than 2 percent of India's export earnings comes from work for American governments, and the software and related service industries account for only 3 percent of India's economic output.
Still, the industry is increasingly associated with the Indian economy's upbeat mood, and its leaders are anxious. As fears of American white-collar job losses continue to rise, they say, the issue is expected to become a sticking point in trade negotiations between India and the United States.
Gartner, a technology research firm, predicts that the outsourcing reaction will continue to escalate at least through the fall.
"The aggressive campaign against moving work to low-cost destinations will become a political imperative for the presidential campaign," said Partha Iyengar, a Gartner vice president for research who is based in Bombay.
American corporate customers of Indian software companies were not conspicuous at this year's annual meeting. Corporations in the United States, and the Indian companies they contract with, kept a low profile.
However, Cognizant Technology Solutions, a company based in Teaneck, N.J., has 70 percent of its development operations in India and said it was still seeing five to eight customers and prospective clients from the United States every week at its offices in Chennai in southern India.
In a further indication that outsourcing is likely to be an increasingly touchy subject here, Robert Blake, the U.S. charge d'affaires in New Delhi, said last week that India's best response was to open its markets wider to help create other jobs in the United States.
Blake's remarks rankled India's government. "That is not the way to go," said Yashwant Sinha, the external affairs minister. "It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.
"The U.S. has to realize that by outsourcing, its companies remain competitive and save jobs," Sinha said.
Those tariffs protected american workers and encouraged corporate america to invest it's capital dollars that came from american workers buying their products, back into their own country to create more jobs. We have lost most of the blue collar jobs and the white collar jobs are next.
We expect our citizens to be loyal to our country. We should expect no less of corporate america. We condem americans for buying chinese products with their money but applaud corporations in the name of free trade for investing it's billions of american capital dollars in the same country, creating a much richer enemy.
Of course you'll hear the same BS that the blue collar workers heard. That you can compete with anyone. You can, if you give up your standard of living and live like they do.There is no such thing as free trade. Someone has to pay and so far it has been the american worker and sooner or later so will our country and everyone in it including the politicans and corporate America. Your money is where your allegence is.
Henry Ford said it best when critized by other industial leaders for the higher wage he paid his workers. He said " I want my workers to be able to buy the product they are making". He was smart enough to know that his workers where his customers.
Face facts yourself. India has teh world's second highest tariffs on American goods per teh WTO China imposes a 50% tariff on normal goods with another 14% VAT on top of that. this in a nation where the average annual income in the countryside is $1,000/yr in Beijing it is admittedly $2,00/yr. Gee that allows a whole lot of disposable income to buy American produced goods and services. Right.
Oh yes and we have nopt gone into the currency controls and the non-tariff restriction and the technology ownership issues either. The American people are being sacrificed on an altar of lies that we have anything resembling Free Trade.
Now tell me how much liberty the average Chinese enjoys these days. Why just a few years back that had teh bifg demonstrations in Tianamen Square where they errected a stute of liberty and those ended peacefully right. Wrong, [insulting name omitted due to Free Republic rules]. Maybe, just maybe, if you actually looked at the issue you wuld not be spouting the previous drivel. It is an insult to your reader's intellect. It is one way. china is importing capital equipment and exporting consumer garbage with rules that give them ownership of the technology in the future.
That sounds like a good idea. It doesn't go far enough, but at least it would be a start!
This is an eloquent and learned way of saying what I attempted to say above about the difference between offshoring U.S. labor to India, China, etc. and expanding trade by our factories in Europe selling to Europeans -- or vice versa. The latter is free trade and former ain't.
I am exploring Googleland to find the total dollar amount of just how much U.S. taxpayers have paid/risked to date to help our "capitalists" do business over there building infrastructure such as the Dabhol Power Co. I think I am more likely to find those missing WMDs than how much taxpayers are helping our "capitalists."
"That is not the way to go," said Yashwant Sinha, the external affairs minister. "It smacks of retaliation that 'if you don't open up, we will impose restrictions,' " Sinha told reporters last week.
Well if they do not open up everything from India should be slapped with massive retaliatory tariffs and we will negotiate letting them down in response to India's first moves. We do not have Free Trade instead we have a lie that hurts America. You are defending a lie.
You don't know the BMW manufacturing situation very well. I have owned two, and as far as 'precision' goes, the robots don't know which country they are in. As for the Chinese, they are intensely nationalistic, unlike the Cato-anti fair traders here...and they will buy Chinese when they can. And right now the Government doesn't even give them a choice, with its unrepentant and unapologetic protectionism. Why should they apologize if we are foolish enough to ship all our capital to them? I.e., their strategy is working...and your strategy of 'capitalism subverting them' is losing so badly ...it is of mythic proportions...I.e., "Greatest Business Blunders of the late-20th Century, etc."
A car a year? Highly unlikely. Even the Saudis have slowed down on their profligacy. Anyways, all 12 million will be built in China, no matter the name badge on the hood, because their Government has said so. So much for your fabulous Chinese Market. All you have instead created is the Chinese Manufacturing Collossus...with Western technology and industrial product and manufacturing design handed to them on a silver platter.
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