IBM Workers In Europe May Strike Over Offshoring.

[David Abramowitz]

It makes one wonder what the domestic effect would have been if there had been more organizational effort on the labor front. Dave

[B_Sing]

IBM Workers In Europe May Strike Over Offshoring.

t makes one wonder what the domestic effect would have been if there had been more organizational effort on the labor front.

Ultimately, it would mean our companies have to pay more for programming, increasing their costs and giving them incentive to move overseas altogether. In other words, lost jobs. In general, we need to compete by offering more value, not by creating artificial barriers.

[J.Pluta]

IBM Workers In Europe May Strike Over Offshoring.

The problem with this statement is that it assumes that the standard of living is constant. The only way you can be competitive is to lower your standard of living to those with whom you compete. If you've ever been to any of the countries with whom you insist we should be competing, then you might have a different opinion. But hey, this borders on the political; you're insisting that the "global village" is actually a viable economic model, and as many experts as you can that say this is true, I can find experts to say it's hogwash. And that leads to rancorous debate with no discernable value, so I'm outta here... Joe

[B_Sing]

IBM Workers In Europe May Strike Over Offshoring.

Hey, he asked. ;-) Lots of experts are hogwash, but you can't argue with facts. The countries mentioned in the article that are trying to "protect" themselves do that all the time and they have around double the unemployment we do. Unemployment is bad for all kinds of reasons. Free markets make more jobs. People need jobs. There - I think we've boiled down the circles we ran around a while back. I'm joining you in not taking it further. It's been said before, by us even. I was just fishin'. I thought I'd get you for sure! But wait - you can't go! School is in session. ;-) (kidding) Outta here too... Keep kickin' butt and takin' names!

[J.Klebanoff]

IBM Workers In Europe May Strike Over Offshoring.

Joe said:

The problem with this statement is that it assumes that the standard of living is constant. The only way you can be competitive is to lower your standard of living to those with whom you compete.

That's not 100% true. There other ways to compete. For example, be more productive. If one country pays half the real wages of another country, but its people are only half as productive, then labor in both are, all other things being equal, competitive. Being more productive doesn't necessarily mean working more hours for less money. It could mean working smarter so that you turn out more value in each hour without working particularly harder. Education and ingenuity does matter in skilled jobs. You could also compete by pointing out the lower external costs incurred by using you rather than an offshore resource. (Lower telecommunication costs, better interaction between users and developers, etc.) Play on patriotism. "Hey, we both live in and love the same country, so use me rather than that foreigner." I have probably forgotten some of the ways that you could compete without lowering your living standard, but you get the idea. That having been said, I admit that if the foreign resources are willing to work for less than 10% of your salary, it's going to be very hard to overcome that difference in a competitive world where many companies that would like to maximize returns for their owners are struggling just to break-even, let alone earn a good profit.

[TonyT]

IBM Workers In Europe May Strike Over Offshoring.

My 2 cents: People invest in a publicly traded company like IBM thru stocks with higher/maximum ROI in mind. IBM's top executive's line of thinking is to look for less cost of services/products with maximum margin. They are paid for that in big $$$. Investor/Stake holders at the Street are happy if performance is in line or exceeds there expectations to sustain a MODEST LIFESTYLE. Unfortunately some I.T. guys are at the losing end and can't sustain a SIMPLE LIFESTYLE... due to supply and demand rule in business. Programming is cheap nowadays inside and outside our backyard... If only BOEING can create a jumbo then they can price it at will, but AIRBUS is here to end the monopoly... same with programming, so many from THIRD WORLD countries are doing it. Again you can question with the QUALITY of work.

[J.Pluta]

IBM Workers In Europe May Strike Over Offshoring.

I concur Joel (wow, that's unusual !). Seriously, we do indeed need to do all those things: work smarter, provide innovation, take advantage of our infrastructure, and all that. But as you say, that still doesn't overcome a 10-1 wage differential. No matter how I crunch the numbers, the only way a high standard of living country can compete on a head to head level with a lower SoL country is by dropping their SoL. Of course, that's only for the 90% (or 95%, or 99%) of the populace that doesn't control the wealth; the top of the heap will be darn sure that the lowered SoL doesn't include their house on the Riviera or their personal jet. But that's another rant for another day, eh? Joe

[Guest.Visitor]

IBM Workers In Europe May Strike Over Offshoring.

I guess when its really 10-1 across the board and all of the career tweaking that can be done is done, then I guess its time to look at making something other than buggy whips. Until then I am working at being the most inovative buggy whip maker around these parts. This has turned out to be much too friendly a thread. They must be winning.

[nycsusan@hotmail.com]

IBM Workers In Europe May Strike Over Offshoring.

Joel said: "There other ways to compete. For example, be more productive ..." Between the lines, I believe what you are really saying is that managers should do some basic planning - document the ROI (return on investment) before making the decision. I agree with you. If they did their homework before moving work offshore, believe me they wouldn't be so quick to send critical work overseas just to save on wages because it's crystal clear that they lose elsewhere. It's really quite simple. CEOs tend to make decisions based on short-term affect on the stock price. Period. Major US corporations are going to continue to move work offshore, and from country to country, to chase a savings in labor costs. They consider little else, believe me. Mostly they don't know or care about communication issues (both physical outages and language barriers), risk, culture (different work days), etc. Want a "for instance"? In our division, the only big project they trumpeted this year is the project to move work from India to Egypt. And guess what? That same work moved from the US to India about 12 months ago. No enhancements, just moving the support to chase a wage "savings". This is likely to continue until we all have the same wages and standard of living, as Joe alluded to. When the standard of living and wages are about equal, then perhaps these managers will quit moving the same work from one country to another year after year after year ... or maybe then they will consider something besides wages before moving work around. The issue is that we cannot compete on wages alone, but that is about all most managers are willing or able to consider. This is probably not going to stop, and managers will not acknowledge the risks, until a few more horror stories surface.

[R.Daugherty]

IBM Workers In Europe May Strike Over Offshoring.

Oh no, Brian, I'm not letting you off that easy. Free markets may seem obvious, but is it really that obvious? Assertion: Free markets create jobs. Did we have a free market before we opened our borders to Canada and Mexico with the NAFTA free trade treaty, or did that just make us "freer"? When is free free enough, and when is it too free? Have we benefited from being "freer" in the last ten years, and if so, who says so? We became the world's powerhouse economy in the prior years being less "free". Employment was as robust as productivity. We made everything ourselves and exported to other nations. Yet we were not as "free" as we have been the last ten years. We make less every day, and import more every day, and we are more impoverished every day, this despite being freer. I think the assertion is an undemonstrated mantra. Straight from the headlines: China is facing a shortage of labor doing our work for us. Is China's economy free? Free enough? As "free" as ours? And if their not-so-free economy is achieving better than ours, why is our "freer" economy better? Because free market theorists say so? Free markets create jobs. That is such a bland assertion devoid of any meaningful detail as to be almost bulletproof. Yes, it may create jobs, but how many Wal-Mart greeters do we need? Is there an equality of exchange in these free markets? India's unemployment is cited as an example of it not being a free market. China manipulates its currency to keep its goods cheap, so its not a free market. Europe is scorned by American free market theorists as a socialist protectionist haven for unworthy workers, so its not a free economy. Canada is somewhere between Europe and hell in free market mythology. So where is this free market? Oh, here in the US. We are the free market, and no one else is. We are smart, and they are not. We owe the world a bazillion dollars, because we buy what everyone else makes, and then they loan it back to us. Free markets create jobs. We are smart, and they are not. rd

[J.Klebanoff]

IBM Workers In Europe May Strike Over Offshoring.

Susan said:

Between the lines, I believe what you are really saying is that managers should do some basic planning - document the ROI (return on investment) before making the decision. I agree with you.

No, I'm not that clever. I rarely write anything between my lines. All I wanted to say was that wages aren't the only component of competitiveness. That having been said, I wish I had said what you suggested--between the lines or not--because I think that you're right about that. I suspect that most managers who decide to send some jobs offshore probably haven't looked at all of the relevant variables. They see all of the headlines and they look at the overseas wages and say "this sounds like a good deal, let's do it." As someone else pointed out, I think it was earlier in this thread, there have been a number of articles recently about companies who have done offshoring and later found that some of the unexpected costs have meant that the total benefit was less than they predicted, and sometimes even negative. I'm a business person and have no problem with companies being bottom-line focused, but they should be truly bottom-line focused, not just focused on a single line--wages--on the profit and loss statement.

[R.Daugherty]

IBM Workers In Europe May Strike Over Offshoring.

These are macro decisions, and macro decicions are rarely clever. They are just so large in scope that the decisionmaker is usually long gone with their reward before how unclever was determined. We use the word manager here in talking about outsourcing decisions. I seriously doubt any manager ever made such a decision. No, these are macro decisions made by macro decisionmakers. It is what they do. It is their raison d'être. It is their Arc de Triomphe. It is their Waterloo. For many years now we have seen one large outsourcing deal after another, followed by contractual acrimony, followed by a recision, followed by a merger, followed by an acquisition. Macro decisions in search of macro nirvana. No, none of us are that clever. rd

[David Abramowitz]

IBM Workers In Europe May Strike Over Offshoring.

Susan Behrens wrote: CEOs tend to make decisions based on short-term affect on the stock price While this is true, I have been witness (or victim) to what I call the "Executive Golf Course" decision. The way this works is that one exec meets another exec on the golf course, and somewhere along the line a sale is made. The outcome of this decision is that it will always be painted with a happy face to protect the decision makers. A rationale will be presented no matter what. Any dissention or truth-talking among the ranks will be singled out for not being a part of the team. I wish I could say that this sort of thing is the exception, but I have seen it happen far too often to think otherwise. Dave

[webified]

IBM Workers In Europe May Strike Over Offshoring.

Drill down for details - http://www.informationweek.com/story...leID=161502292

[BT4]

IBM Workers In Europe May Strike Over Offshoring.

Instead of outsourcing at lower-level management, how about outsourcing some high-priced executives? Ron Lay, Bernard Ebbers, Mark Schwartz, Dennis Kozlowski, Scott Sullivan, Richard Scushy, et al come to mind. Don't blame workers and mid-level managers for the decisions made at the very top to sacrifice a company's viability in order to line their own pockets. When programmers are outsourced, citing productivity and costs, the price for our perceived failure is an long wait in the unemployment line. When CEO's like Charles Conaway fail, leading a 100-year old company, (K-Mart)into bankruptcy, his penalty for failure is a $9 millon severance package. Is is just me, or does anyone else see a certain inequity in asking workers to accept less reward for more productivy, and yet wind up unemployed when the decision makers reap in millions as the price of their failure?