An Unseen Peril of Outsourcing

Business Week ^ | MARCH 3, 2004 | David Gumpert

[RussianConservative]

This is called Social Cost...free traitors ignore this because it not figure in bottom HOLY line...there fore not matter...tax monies take care of issue.

[RogueIsland]

bookmark bump

[Dialup Llama]

Law firm cuts rates by outsourcing to India
http://www.twincities.com/mld/twincities/business/8089702.htm

If you want to know how heavily govt subsidies, targeted tax policies and interlocking 'so called' free trade agreements contribute to offshoring check out the article referenced above. The key paragraph is below:

Intellevate, which outsources legal support services, said its India-based operations have received economic incentives from the Indian government.

The incentives include a seven-year "tax holiday" and exemption from India's import and export duties.

There are advantages on the US side as well. Operations which are kept in the US may be heavily taxed. By setting up a 'captive' operations center in India, you have benefit from that center as if you owned it, but can escape US taxation and can import the output of the center into the US at low tax rates (see tariffs are 'bad' and against 'free trade' so we don't tax imports any more).

[Sender]

Yes please, to be calling me directly!
Your problems are to be fulfilled exquisitely!

[ninenot]

Actually, this is not "unseen" at all.

Briggs & Stratton built a factory in China and found perfect knockoffs of their product in the markets within 18 months after the opening.

Chrysler execs saw Jeeps coming out of another plant near theirs--not made by Chrysler.

Most recently, GM's Chevrolet division found a knock-off of a whole CAR on the market--after they opened a Chevy plant.

Intellectual Property and patent laws mean NOTHING in the Far East. Nothing at all.

And I don't feel sorry for ANY of those people who are getting bit in the behind by the thieves in PRC or India. They got what they deserved.

[murdoog]

And I don't feel sorry for ANY of those people who are getting bit in the behind by the thieves in PRC or India. They got what they deserved.

With me it's more than just not feeling sorry for them. It's schadenfreude time!!!

[ninenot]

schadenfreude

Pronounced with an exquisitely sharp spit AND lengthy, rolled 'r'.

We could even Homer-ize it and make it Schadenfreu-DUH!

[SauronOfMordor]

"If you are going to send our tax/audit work to someone in Bangalore, then why should we hire a top firm like yours in the first place? Where's the premium? What is stopping me from going to India directly at 1/24th the cost?"

All the clothing and footwear companies that outsourced their manufactoring overseas have been seeing that for a while. Catalog sites, discount stores, and WalMart have been buying directly from overseas-based companies and marketing them as store brands.

They're just as good as the name brand items. Why shouldn't they be? They're made by the same people, in the same countries as the name brands. There's nothing stopping people from moving from the name-brand's manufactoring operation, once the name-brand has kindly finished teaching them how to manufactor to US specifications, and starting an identical operation down the road. Perhaps having Cousin Ping stay in the name-brand operation and feed the startup all the trade secrets on an ongoing basis

[VOA]

We need to understand that, as we send jobs to foreign businesses, we also send
critical knowledge about processes, procedures, and development. When business
conditions change, a company can't just go to the other side of the world and
reclaim those things. The new owners aren't likely to give them up.

Dumb-@$$ Americans.
The UNITED STATES OF AMERICA learned this lesson AT LEAST 20-30 years ago.
We watched Japan start buying up America and trying to insinuate themselves into
American businesses in order to hijack US technology and creativity.
As soon as the US business/technology machine realized it was being robbed...
so-sorry Japan.

Today, American companies are simply making a variant of the same mistake.
Now, American companies believe some FANTASY that they can go abroad and
let their technology be used by those low-wage "natives"...without any sort
of long-term risk.

Dumb, dumb, dumb...
And stockholders need to think this through as well...

[XBob]

Are the FReeper Free Traitors strarting to figure things out, or are they simply hiding?

I see less and less rebuttal.

[ctonious]

...Instead, the U.S. parent has been wound up and its intellectual crown jewels are in India

"Duuuuuuhhhhhh....how did that happen? All the US CEO and other well-paid parasitical positions are supposed to stay here!" < /sarcasm>

[Snuffington]

A very good anecdote to remember. Not every company into offshoring is going at it this completely. But some are. I know some quite personally that could very likely end up copying this same story in the not-so-distant future.

[ninenot]

The Free Traitors, I think, have decided that our wisdom is irrefutable--or they are ignoring us.

Well they should. This AM's Labor Department release says "new jobs" is only 12,500, rather than the 125,000 expected--merely an order of magnitude off....

And LAST months "new jobs" was reduced from 125K to 95K.

Meantime, Wisconsin's Factory Jobs numbers sank beneath 500,000 for the first time since 1990, and is on a precipitous decline from 600K in 1997/8.