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IBM Shifts 14,000 Jobs to India
Omar Khan writes "The New York Times reports, 'Even as it lays off up to 13,000 workers in Europe and the U.S., IBM plans to increase its payroll in India this year by more than 14,000 workers.' Slashdot previously covered the black-and-blue strike, in which the union wondered, 'if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.'"
I'm sorry but IBM is speaking to European workers very clearly here, however I'm not sure they're listening. The constant strikes, the 5+ weeks of vacation, the voting down of the EU constitution to avoid US-style capitalism. These jobs are vanishing into India because of the cost and headache of dealing with European unions, workers, culture, and bureaucracy. Frankly it's a pain in the ass, and for a market that often has little growth potential. Asia isn't just where the cheap labour is, it's also where the growth is, and the governments eager to work with you, and the best bang-for-the-buck for companies seeking to invest. Until European workers learn to compete aggressively we'll keep on hearing stories like this of companies that just shrug and say "fine, have it your way." Apologies, but something's gotta give.
> 'if other cost cutting mechanisms could achieve the same effect without cutting
> so may jobs.'"
They'll just do that too!
And this happens just when I was starting to think of IBM as the good guys...
Have you ever wondered How to Take Over
Here is the IBM Union website, if anyone is interested.
don't worry, you are not alone. accounting, HR, legal, even biotech and practically everything else you can think of is subject to offshoring. guess who's in the best position now? carpenters. plumbers. electricians. whoops, get ready for people to re-evaluate college and knowledge work on a grand scale.
That's just the free market at work. If the price of labor is cheaper there, then that is where labor will be purchased. It's just as simple as that.
Cyric Zndovzny at your service.
Does IBM now stand for "Indian Business Machines"? If they're scaling back so much on the two most developed continents, they don't seem so "international" anymore... what dinosaurs.
It must be Windows. It needs half a gig of RAM and a hardware-accelerated graphics card just to run Solitaire.
I guess a programming major insn't enough. Now I need to learn Indian as well.
lol: You see no door there!
The problem with outsourcing is that eventually the cheap work gets more expensive, then it becomes too much of a burden and things have to shift again ...
So, gradually, the corporations will pick random underdeveloped countries and beef them up to a point where the workers are too expensive, then they'll move on - until there are no underdeveloped countries left, just bloated overdeveloped cesspools full of unemployed engineers and white collars.
'if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.'"
Probably not. For someone like IBM, labour is undoubtedly their biggest cost. If they can get equally good work from Indian programmers for a third of the cost, then I see every reason for them to do that.
Of course it is hard on the staff, but this is only going to happen more and more as time goes on, and increased union activity is only going to encourage large firms to outsource work.
The only way for IT workers in western countries to survive is to gain additional skills which workers in other countries lack.
[I am not saying anything either way.]
1) Outsource everything except the board members to India
2) ?
3) Profit!
Individual companies can't get away with shipping jobs to India due to the offshoring stigma, so what do they do? They hire consulting firms like IBM who basically do the dirty work for them. Problem solved; good cheap labor at a fraction of the cost without it being a PR nightmare because technically the company isn't offshoring. I've seen this happening more and more. Kind of scary.
Top 10 Reasons To Procrastinate
10.
Does such a change pose a risk to the security of the United States and Europe? Indeed, the government and military have always been a large consumer of IBM's products. That is understandable, of course, considering the extreme reliability, durability, stability and ultimate engineering that IBM systems represent. But with the design and implementation of these systems being sent over to non-Western countries, there are always security fears. Will backdoors be inserted into IBM's software that will then be sold to Western powers? It's a very real possibility.
Cyric Zndovzny at your service.
The PS3 and Xbox 360 are going to sell in droves worldwide. That's a lot of PowerPC chipsets that need to be manufactured cheaply, quickly, and consistently by IBM.
While I don't agree with off-shoring, consider that many of the jobs that get off-shored are jobs that Americans either want too much pay/benefits for, or are jobs that are "below" them due to the scheduled_hours/tasks.
Foreign nationals in developing countries can easily snatch these jobs up for much less pay/benefits and are actually happy/proud to have the job.
Up, Up, Down, Down, Left, Right, Left, Right, B, A, START
I see that you're claiming that Indians are unable to produce quality software and hardware designs. Can you please give some tangible examples/proof of this, and the resulting failures? Indeed, what makes an Indian any less of a programmer than an American or a European?
Cyric Zndovzny at your service.
Really, this just means 14,000 more EU and US programmers can now work on IBM's Open Source initiatives without having to be on payroll. Don't programmers seem to prefer that anyway?
putfwd.com - 1GB Free file storage with a twist
Lowering cost itself is not immoral or wrong, but sometimes the means used to achieve the goal is immoral, or wrong.
-Reid
New Hire: "$4 a square foot is why I dragged you out here."
Suit: "Sure, it's $4 a square foot, we're in the middle of nowhere."
New Hire: "We're not in the middle of nowhere. How'd you get here?"
Suit: "Airport."
New Hire: "Yeah, airport, highway, telephone."
Suit: "Internet."
New Hire: "Internet."
Suit: "Genius. $4 a square foot, and $4 an hour. You're fired!"
IBM. Solutions for a small planet. :)
Our small (under 10 employee) company just offshored a job for one of our clients. All of our clients had been beating us up over offshoring work, because it is fashionable. So we spent more time specking the work and administering it than if we did the work ourselves. But we had to offshore the work because offshoring is this decade's fashion, our generations bell-bottom jeans.
Just so long as they understand they're going to be selling their services and products at the lowest cost as well.
This whole thing is just the money sloshing around the planet to reach economic equilibrium. Soon enough wages will rise in India and the dollar and Euro will drop, and the pressures will relent somewhat.
I do wonder about the canonical science fiction question. It's already far more productive to have cheap computers do the work rather than expensive humans for a range of services. What happens over the next few hundred years as the collection of services done by computers grows ever-larger?
What good is capitalism for workers when there's absolutely no scarcity of labor? Money is just a measurement of scarcity, after all, and if there's no scarcity in labor, there's no money.
- jon
Ganymede, a GPL'ed metadirectory for UNIX
Similar arguments apply to illegal aliens from Mexico. Under the aegis of the North American Free Trade Agreement (NAFTA), illegal aliens flood into the USA and have essentially destroyed the wages in the market for unskilled labor. The normal market forces in the USA are now influenced/destroyed by Mexican government policies that have obliterated the economic opportunities and standard of living in Mexico. Without illegal aliens, the Americans working as unskilled labor would enjoy a sudden and dramatic boost in their wages, enabling them to actually buy medical insurance.
When American politicians tout free trade and claim that the American market remains a free market, they completely ignore the non-free market which is interacting with our free market and which is destroying the normal market forces in a (our) free market. The rub is that no one seems to care.
Free trade advances free markets in only one scenario: (relatively) free markets like the USA interact with other (relatively) free markets like Eastern/Western Europe, Canada, and Japan. To maintain genuine free trade, we should close our markets (including the market for services like labor) to India, China, and their ilk until those nations establish free markets. We lose nothing by championing genuine free trade.
To the USA and EU. The jobs disappearing from EU were preceeded by US layoffs some time ago. And it is not just IBM, but I think that many here know that already.
I prefer the "u" in honour as it seems to be missing these days.
Sure, sometimes the means is, but this time? Those 16000 jobs still exist, they'll just be held by different people. Presumably those in India need to feed their families as much as those in the EU - seems morally neutral to me.
Socialism: a lie told by totalitarians and believed by fools.
If the union had all these great ideas for cost cutting, why didn't they suggest them earlier, at some point before the axe was in it's downward swing?
I understand why sometimes the labour and capital components of business have to have an adversarial relationship, but I also know that they need to have a co-operative relationship as well.
It's as if the union had these great ideas for saving IBM money, but kept them quiet until IBM started to cut jobs, and they said, "Wait wait wait...".
In the original black-and-blue article, the union made the point that IBM's "first quarter profit for 2005 was $1.4 billion, and $9 billion for the whole of 2004". Unfortunately, a corporation has a legal imperitive to make as much money as possible for the shareholders. The problem is not IBM, but rather corporations in general.
Some of the more interesting books on the subject are,
Myth of the Good Corporate Citizen
The Corporation (the book that the documentary was based on)
Confessions Of an Economic Hit Man
That isn't all true.
I am a union steward for a manufacturing plant in Jackson, Michigan and we do not focus on things like "job creation and preservation".
We focus on ensuring that our work place is safe (we have never even seen an OSHA inspector in the plant, they make it up to the front office but mysteriously never beyond there).
We also focus on fairness and equality. My main concern is to make sure that some one is not getting a benefit that the rest of us aren't and conversely that some one isn't getting treated unfairly.
Unions still have a valid position to hold in our society as long as companies are willing to screw people in any way possible to increase the bottom line. We constantly work with the company to help them increase product quality and profitability, we only ask them that they work with us to ensure we have enough money to live decently and enough insurance to ensure we can afford health care.
The government won't do those things for us, and I don't want them to.
The preceding message was based on actual events. Only the names, locations and events have been changed.
Following the specs to the letter without discussion is a sign of either poor pay or poor management. A poor manager is one who gives out specs and expects them to be followed without question. That's not what a (good) developer (or development team) would ever do.. that's what a "programmer" would do. If you're being poorly managed or not paid enough, why argue with the manager.. it's a lot easier just to follow the bad specs and render yourself blameless even if the job turns out bad. Indeed, I'd say at least 50% of development budgets are spent on projects which never see the light of day due to this problem.
IBM was founded, built, financed, and supported by Western countries, principally the US, UK, Japan, and Germany. The US, especially, protects IBM's intellectual property, provides a secure environment for business, and enormous amounts of government contracts. The great bulk of IBM's customers are in the West.
I honestly believe that IBM - and all of the firms so happily laying off their employees in order to find cheaper labour - are acting in an immoral manner. Outsourcing is destroying lives, destroying economies, for the sole point of increasing corporate profits - profits that go, essentially, to a very small percentage of the population. For goodness sake, having a 401k growing at 4% doesn't really matter that much when you're laid off.
IBM is not trying to help Indian workers - IBM is simply trying to cut it's labor costs. Globalization has accomplished the dream of so many capitalists - labor is now a commodity, and labor is powerless.
The American - and Western European - middle class is evaporating before our eyes. When the middle class jobs are sent overseas, the entire structure of our society is in danger. We'll became lands where the few with massive wealth dominate the increasingly poor masses. Democracy depends on a healthy middle class. Destroying that democracy is indeed immoral.
/* Dang, I can't type that well. */
Gartner just released a study of the top five reasons offshore deals go bust. I hope IBM was paying attention. It sounds like a lot of companies jump into these deals because of the labor differential and then find out later it wasn't such a good deal after all. There are a lot more factors to consider than just free trade, losing American jobs, and profit. Long-term viability has got to be high on the list of things to consider, right? (My blog on this)
Maybe 'Economics 101' boils down to:
(1) Look for ways to reduce costs
(2) Move jobs overseas to exploit cheap 3rd-world labor
(3) Profit!
but 'Economics 102' adds:
(1) Cheap 3rd-world workers spend new pay on basics like decent food, shelter, and medical care, thus greatly improving their lives, but have nothing left over to purchase still relatively expensive luxury goods and services provided by their American or European employer
(2) Unemployed or now-underemployed former American or European employees now can't afford expensive luxury goods and services provided by former employer, either
(3) Profits evaporate as sales plummet
Henry Ford understood this basic economic principle, and made sure his employees could afford to purchase the Model T's they built.
'Econ 103' goes on to explain how companies that move their labor and infrastructure costs overseas still get to deduct those expenses when it comes time to pay their US taxes, but none of that money stays here to generate income tax, sales tax, and other tax revenue, so government services must shrink. And every dollar moved offshore also costs many, many more dollars lost in other goods and services that lost employees can no longer purchase, resulting in additional jobs and tax revenues lost, etc.
It's never as simple as it first seems.
Serving your airship needs since 1995.
Um -- you're not paid based on how much money you generate for a company, you're paid based on how replaceable your job is. Guess what? If the janitor stops taking out the trash, eventually the company stops making money. Are the janitors worth a billion dollars a year? No -- because they're paid based on the value of the work they do. They are easily replaceable.
Same for engineers. You are paid based on how unique your work is. If your work can be easily replaced by another engineer, you're low paid. If it is sufficiently unique, then you are higher paid. Supply and demand, man. Supply and demand.
Want to be the one who collects the money at the top? Easy. Start your own company and create some jobs of your own.
Unions can create temporary bubbles where you get higher pay than you deserve, but ultimately it hurts you. Would you rather have a 20% more pay temporarily, but then no job at all when it's outsourced, or would you rather have more stability, just at a market wage?
Europe is choosing "no job" every day.
Sometimes it's best to just let stupid people be stupid.
How about a progressive salary cut that starts at the very top of the organization? Where the guy who makes the most gets the biggest cut, and it goes straight to the bottom, and at the bottom cuts could be minimized. It would allow them to pay reasonable and realistic salaries to everyone in the company, and free up tons of money to boot.
-Reid
And the response of these workers and others in Europe is that they don't want to be chattel/wage slaves. Shocking isn't it? It seems like people in Europe can somehow envision a world where there is such a thing as enough profit, and that at the end of the day corporations exist for the betterment of all of society - not vice versa.
One of my old bosses had a great expression - "Trees don't grow to the sky." It was in relation to commodity trading, but it's applicable in many areas of life. Growth can not be infinite - it's simply not sustainable. At some point you need to be satisfied that you're running a profitable business, creating valued products.
Causing unemployment in Europe and the U.S. to save a couple sheckles on the front end will ultimately result in less wealth and less growth in the long run. You need someone to buy your products, and as others have already pointed out, the unemployed and minimum wage workers of the world aren't going to be able to do so. All the arm chair "free marketers" need to dig a little deeper with their analysis than parroting "corporations are in business to make money" and thereby whatever they do in that line makes sense - that may be a primary goal, but it certainly doesn't valildate or justify every decision corporations make.
Greed is good only works up to a point - after which you start eating your own young.
I'm not disputing that there will always be a need for someone to fix plumbing problems, build or repair homes, fix cars, and all those other things.
But at the same time, those tasks rely on someone using their hands and doing work that they might not otherwise prefer to do.
The "knowledge" fields require exactly that.... detailed and complex knowledge of the area, in order to perform the work satisfactorily.
If I'm an intelligent person with no major physical disabilities, I can fix my own house - even if it means buying a couple books and a lot of trial and error. Heck, a while ago, my wife put up bathroom tile in our bathroom we remodeled, and she'd never done it before in her life. Looks completely professional and it's been up there for about 3 years now.
Same goes for cars, really. It might require a lot of tools and a lot of time tinkering around with things, but most people coming from these other "tech" fields could do it if they set their mind to it.
On ther other hand, even the smartest, most talented carpenter is not going to be equipped to do biotech work or even H.R. without paying for some formal training/schooling first.
Therefore, people practicing trades will always be in demand, but won't get the kind of pay they once got, if the other people are out of work and deciding they have to "do it themselves" rather than pay someone else.
There are plenty of skilled people here in the USA. We have the best colleges, and some of the brightest people. If it is about saving money then why not set up operations in the midwest where housing and the cost of living are low? That would keep the jobs in American hands as well as re-vitalize the economies of the poorest states and
Because there are lots of people in the USA who are "too good" to live in those places. A lot of them want to live in a 'cool' place and, while much of the MidWest is quite chilly in the winter, it is a different kind of 'cool' they are talking about. It isn't 'cool' to live in a MidWestern town, much less what is considered a city there.
Me? I've always moved to where the work was and I've lived/worked in a fairly small town or two (~20k people sometimes).
Said another way:
It is easy to have lofty principles such as helping the developing world until such time as it actually starts to cost us something.
Outsourcing is a sign. It is a sign that we're not doing the right things in the (more fully) developed world. If a programmer in India can do my job for half the wage and still look good (relative to his cost of living), then I'd better either learn Gujurati, Hindi, or one of the many other tongues and move to compete with him, or else I'd better be thinking of doing something else.
Does it shock anyone that at the same time as the US and the EU are bleeding skilled jobs to new centers of skill (India is developing quite a few of technical skill centers!) elsewhere in the world, that we're busy arguing about cutting back to a 35 hour work week (bits of the EU) or about making Intelligent Design the latest 'education' in our schools?
This is the 21st century. If you trained as a computer geek, realize computers are commoditizing and start looking at an exit strategy. Software is busy doing this now too. No one anymore says "I want to manufacture machine screws by hand!". We know this process is automated and you can now have them for a very low price. Similarly, software will go that route over time.
So, if you want to remain a highly educated worker at the cutting edge of the newest field, realize that computer software isn't going to be it. It was in the 1980s and 1990s. By 2120, I don't imagine it will be. So what are you doing to start sorting out 'the next area of innovation' and to prepare yourself to work in that field? Or are you buying a $400K+ house, driving a $40K+ car, and spending all your money on toys?
If you aren't saving up for your next stage of education and you aren't thinking about what it is and investing in continuing education steadily (and that may well mean 'into another area of study'), then you are essentially the woolen worker put out of work when the mills closed, or the hatpin maker who found out the machine could do a better and faster and cheaper job.... and you weren't looking ahead to see it coming.
So, you've got a warning. The trend is clear. Stop cringing and whinging and get out there and do! Plan, act, educate yourself, and move on to 'the next new thing'. If you have the brains to make sense out of assembly code, if you can write multi-threaded client server apps, if you can make a database sing... then surely you can use that brainpower in some other endeavour to equal effect, given some investment in training.
Ultimately, we're still stuck in the old model of 'go to school, get an education, carry on with life after education'. We should realize the new model is 'get a part of an education, work for a while, see the changes coming, re-educate, get a new job, work for a while, rinse, repeat.' That's living on globalized internet time. It might not be all that palatable if you feel like saying 'my brain is full' or 'but I've spent my time in school' but it is what the new world's rate of change will require. Be agile or be roadkill....
-- Mal: "Well they tell you: never hit a man with a closed fist. But it is, on occasion, hilarious."
It just doesn't work that way. Fact is companies are under enormous stress (from shareholders) to increase profits year by year.
You can do this 1 of 2 ways, either increase revenue or decrease costs.
So the cost saving is *never* passed on to the consumer, it's passed on to the shareholder, via a larger reported profit and an increase in the share price.
If I had created the world I wouldn't have messed about with butterflies and daffodils. I would have started with lasers
The position that outsourcing is just good business and benefits the consumer may be true in the short term but has dire implications further down the road. By outsourcing these middle class jobs you are in effect removing the purchasing power of the former employees. The majority do find new jobs, but with lower salaries or with fewer benefits (forcing them to pay the cost). This is coupled with the fact that the US is importing more products than it exports. Which means that jobs that should involve Americans working to manufacture products for other Americans to purchase are becoming scarce as well. This leaves only the services industry which tends to pay bottom dollar salaries and provide few benefits (if any). My question is that what good are lower priced consumer goods if there is no middle class to purchase them and what economy can rely on a service based model if the service cannot be afforded?
[I am not saying anything either way.]
Way to straddle the fence at the end there. Did you put that there because you actually have no opinion or were you afraid of the random Slashdot mods?
You probably would have gotten -1 Heartless Capitalist if you'd said that the Indians should have the jobs.
And you probably would have gotten -1 Economics 101 if you'd said the jobs should stay in the US.
I salute your ability to attain a +4 Insightful (as of the time of this writing) without actually saying anything at all.
--------
This isn't the sig you're looking for. Move along.
> Want to be the one who collects the money at the top? Easy. Start your own company and create some jobs of your own.
There, in a nutshell, is the problem. The system we have now is designed to funnel the profits into the hands of a few people, and after multiple decades of this, you end up with a situation like we have now - professionals who used to be able to raise a family in a nice home on a single income now barely scrape by with two incomes.
This is a cycle of free-market capitalism, it's inherent in the structure of business. As the money gets concentrated at the top, there's less to go around. That's why you see small businesses closing left and right, while Starbucks and Wal-Mart open yet another store in your area. Even if you have an employee-owned company with profit sharing, it will eventually get swallowed up or plowed over by a larger company whose owners screwed people over so they could gain obscene wealth.
What's the answer? I don't know. Some say eat the rich. I say form cooperatives. The solution is probably somewhere in between.
Where do you think the money goes? Into mattresses? No -- it goes into investment, which creates more jobs. professionals who used to be able to raise a family in a nice home on a single income now barely scrape by with two incomes.
The world you think used to exist never existed. The reason people need two incomes now is because they SPEND MORE MONEY. It is entirely possible to live on one income, if you don't live luxuriously. The last generation simply accepted living on fewer luxuries.
Sometimes it's best to just let stupid people be stupid.
It is actually funny that everyone talks of wages rising in India, but one thing that people never consider is the dollar - rupee conversion. It hovers around Rs.45 to a dollar and Rs.52 to a Euro. Even if the wages do rise the net effect in terms of dollar would be far less, while the equivalent rise in wages in the West would be far more. So overall the benefit still stays. Also India is producing scores of IT professionals and this is not going to change anytime soon as the viewpoint is that a career in engineering is far better than anything else. To be frank art(read humanities, languages and stuff) and commerce are looked down upon in India.
Since 86% of stock is owned by the wealthiest 10%, money speny buying stock (or stock-price appreciation caused by businesses) goes pretty much to the rich, accelerating the concentration of wealth.
I have trouble imagining what kind of economic efficiency, or society, we will have when a (relative) handful of people own everything, and the rest of us are serfs.
That's when slashdot mod points will be the next currency :)
What good is capitalism for workers when there's absolutely no scarcity of labor
Hmm, see Kurt Vonnegut's "Piano Player" for some interesting sci-fi, humor and insight here.
Who gives a fuck what it's called if it produces widespread unemployment and poverty, while rewarding a minuscule bunch at the top? We've been there before, and it was called feudalism back then.
Capitalism does not have to be like this, and wasn't all like this between the 50s and 70s.
"Only the small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan
"Fact is companies are under enormous stress (from shareholders) to increase profits year by year."
Well fuck shareholders. It's not their livelihood that's at stake. You know, if you're running a small shop and employ local workers, you'll at least have to look them in the face when you fire them. You will realize exactly how your business decisions impact the society you live in. Shareholders don't care, don't know and don't see the results of their wants. They share profits but they do not share responsibility. There's this huge disconnect between owners (shareholders) and their property. Shareholders don't give a fuck about any particular company, they just push money as it suits them. They do none of the work and have no involvement in the reality of the companies they own.
Whoever came up with the idea of publicly-traded companies was seriously fucked up.
"Only the small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan
Here is an eye-opening article about India/China and western countries. http://service.spiegel.de/cache/international/0,15 18,358800,00.html
To quote Thomas Friedman "It is interesting because French voters are trying to preserve a 35-hour work week in a world where Indian engineers are ready to work a 35-hour day. Good luck. Voters in "old Europe" - France, Germany, the Netherlands and Italy - seem to be saying to their leaders: stop the world, we want to get off; while voters in India have been telling their leaders: stop the world and build us a stepstool, we want to get on.
I feel sorry for Western European blue collar workers. A world of benefits they have known for 50 years is coming apart, and their governments don't seem to have a strategy for coping. "
- Sh!t
http://zazona.com/ShameH1B/JobDestructionNews.htm
In a recent newsletter I wrote about a new corporate plan by Honeywell that some of their executives called a "Census Adjustment". Their cutsie corporate terminology is just another way of describing their new policy of replacing U.S. labor with cheaper foreign labor. I equated Honeywell's "census adjustment" to a corporate policy of "ethnic cleansing".
Since that newsletter was published I have received credible
information about several of the specifics of the Honeywell plan. The following information may seem like a spoof, but I assure you that it's no joke and nobody at Honeywell will be laughing as of July 1st.
DISCLAIMER: Although this information contained in this newsletter is from a credible source, there may be some factual errors. I have no way of independently verifying any of these factoids below.
***** Dictionary of terms used by Honeywell corporate executives
*****
Learning the dialects used by the corporatists can help us understand how they view the world. These are a few terms that I learned by studying information from Honeywell.
Census Adjustment: mass replacement of higher priced American employees with lower cost foreign employees. They don't make a distinction between foreign workers that come to the U.S. on H-1B/L-1 visas and workers that are in offshore positions. In most cases the foreign workers are high-tech workers from India or Eastern Europe. This term
is going out-of-favor among Honeywell executives because so many employees made derisive comments and jokes about it.
Globalization: the use of workers as a global commodity to lower cost. This term can be used interchangeably with "census adjustment".
Globalized engineers: usually used when referring to foreign engineers
that come to the U.S. by using H-1B and L-1 visas, but it can also be
used to describe overseas engineers that work for Honeywell (the exact
meaning depends on the context). The phrase is a clever code-word that
corporate execs and HR lap-dogs use for "Cheap engineers".
Infill - the process of filling job positions with workers. There is no
distinction made between the hiring of new workers or the transferring
of workers from one Honeywell location to another. "Infill" is a trendy
term that is very popular with borks and HR departments.
----- Honeywell's Plan for Census Adjustment by Globalization -----
Honeywell executives have decided that revenue spent for engineering
must go below 15% of their total expenditures. In order to cut costs
they will "globalize" their engineering departments. This globalization
process will focus on cutting the cost of labor by using the following
methods:
* Replacing current Honeywell workers with L-1 visa holders. These L-1
visa holders will come mostly from Russia, Czech Republic, and India.
* Whenever possible all positions in engineering and its support
functions will be outsourced to overseas locations.
* All new IT jobs will be required to be outsourced offshore.
* No external hiring will be allowed, and transfers of employees within
Honeywell will be discouraged until the job terminations are complete.
* Open job positions will be "backfilled with globalized engineers at a
lower cost." Managers that refuse to go along with this process will be
replaced with more cooperative ones.
* American subcontractors are currently being eliminated and replaced
with foreign companies.
The following factoids pertain specifically about Honeywell's Component
Engineering in their Commercial Electronic Systems (CES) on Deer Valley
Road in Phoenix, Arizona and Aerospace (AES). Similar tactics will be
used at other Honeywell locations.
>> Honeywell CEO, Dave Cote, has ordered Roman Jamragowiecz, VP of
Engineering, to globalize 25% of AES engineering. It is generall
AZspot
It was called feudalism, and we're getting there fast. Then the tide is going to turn again, the question is how many generations it'll take.
Poeple keep repeating this "investment" mantra like they never had a thought of their own. Pushing money (stocks) around is not investment, it's speculation and it generates as much value as betting on horse races, which is zero.
"Only the small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan
We're approaching the point where the time a skill is economically viable is going to be less than the time it takes to learn it. How will we survive with less than a 50% working-to-education duty cycle?
I hate to say this, but you are wrong. You see the problem with what you describe as capitalism is that by laying off the workers and seeking to only reward the investors you are eliminating the single largest market for products. If I have no job I can not buy goods and services. The companies that rely on the middle class to buy goods and services will in turn no longer need suppliers as they will be out of business. When those companies go so will the ones that feed them all the way back to the begining of the loop. So in seeking the highest return for their investors these companies need to start thinking of the most lucrative market they have right now. The one where they got their start. If we don't jobs here to buy anything with who is IBM going to sell ecommerce solutions or servers to? I won't be buying online, I won't have money, and neither will you. So keep laying off those workers, when we run out of jobs to retrain in guess what, you've all killed the host.
But only if you hold onto the stocks and the stocks pay dividends.
Otherwise, you're 100% accurate. The "buy low, sell high" stock market mantra is pure speculation and speculation just moves the existing money around without creating anything of value.
http://www.bell.lib.umn.edu/Products/tulips.html
What happens is lots of money goes to a few people who spend lavishly on extravagent luxuries. That money comes from the many losers in that game.
And that is the problem with the current "investments" in the stock market. It's great when you're the winner, but there are far more losers than winners. No one likes to look at what happens if you aren't one of the winners.
Companies are in business for one thing only: To yield the highest amount of profit to its investors. That is the _only_ thing companies do and should do. People who think companies have a moral duty to anything are misguided.
Hardly. If that were the case, then slavery would be the ultimate corporate goal (although in some corps I imagine that might actually BE the goal).
Companies don't exist in a vacuum and they don't exist independently either. Corporations depend on the infrastructure around them to survive. They need the government to build roads to and from their factories, they need electricity, water, and they need customers to buy their stuff. You don't get any of that in a society based on slavery (certainly not the latter).
So, it is in the interest of the corporation to have a vibrant and healthy society in which to exist - a reason why the government does impose certain ethical/moral behaviors on corporations (they're not supposed to lie on their financial statements, they're not supposed to fabricate BS about the quality of their products, they can't shoot their underperforming workers, etc). Corporations are always trying to push the envelope, and outsourcing is one of the latest ways to do it.
And if the road to the highest return on investor investment leads through paying management insane amounts, so be it.
You would be a fool and a stupid investor to think so, although your not alone, the world is packed full of foolish stupid investors. How many millions did Carly screw HP out of - yeah good leadership job there...
Personally I think if companies want to outsource the bulk of their employees, effectively becoming a foreign company, then they should be treated as a foreign company. No tax incentives or whatnot, they can import their products just like any other foreign company (and be subjected to whatever import tariffs apply). Go incorporate in India or China (oh, and don't forget to take the CEO on the way out)...
JUSTICE
If you want justice, then stop paying starting engineers straight out of junior college three times the salary of teachers with thirty or more years of experience. Stop demanding it for yourself.
Too bad if you try to do this in the United States without enough money for complete financial security and independance, one of the bigger guys will come and offer to buy out your company. If you refuse, your safe full of company secrets will myseriously disappear to a fire. If you persist in continuing to threaten the big guy's business, his thugs will come and offer to blow out your brains.
What a shitty fantasy world you live in. Fortunately this does NOT happen in the United States. Sometimes there are legal pressures, but no ones brains have been blown out. Sleepycat Software is still in business despite the billions that Larry Ellison has in his wallet. My brother works for a startup company with fifty employees that directly competes with my company employing over 100,000. Yet no one there worries about their brains being blown out. That little lady with her boutique on the corner is still in business despite the billions in the Walmart coffers. And only a nutjob like yourself would tell Linus Torvalds to get more life insurance because someone from Redmond is coming to blow his brains out.
Get a clue!
Don't blame me, I didn't vote for either of them!
You're either not very competitive or not very successfull- regardless of your balance sheet. It could be you're in a low-competition industry that there aren't any major competitors for your business. It could be that you simply aren't taking enough market share YET to get noticed. Either way- it will happen eventually.
Wow. That is amazing. Without knowing what business we are in, what our margins are, you can pass judgement that we are not successfull or competitive. Amazing!
If you failed- do you really think your employees would have stayed employed? Heck, if you sold out rather than fail, do you really think your employees would stay employed?
I do not understand this statement and what is has to do with my point. My point was that we (my partner and I) should make more money than my current employees, simply because we took the risk and we should be rewarded for that risk. Otherwise, why would we have bothered to start a business that provides employement to ~ 7 people?
You employed people to have fun for you? On company time?
Maybe I was not clear enough. I meant that while we started out (no employees), we put in 15-20 hours days. At that time, most of my current employees, were gainfully employed in other companies, got married, bought houses, etc.
Now, you are telling me that I should share my company's profits equally with my employees? Then what is my reward for putting in the long hours?
Conversely- say your employees make you a lot of money. Say one single employee was completely responsible for half your revenue- would it be fair to keep paying him the same as the rest are getting?
Depends - if the fictional employee (who makes half the revenue of the company) is able to do it because of his unique talent, yes, he/she will get paid a lot. If the employee is able to make that money simply because of my organization (he goes to a client, says I'm from XYZ corp and the client gives the order because he is from XYZ corp), he will get paid the market salary. If he quits, I will just replace him.
If I remember correctly, that would be the European monarchies. Corporations came into being for the purpose of colonizing (or eliminating) and exploiting "inferior" cultures. Merchantilism was one of the things the U.S. was fighting during the Revolutionary War, since the British Crown used the joint-stock companies to dump goods on the colonies, along with a bunch of other annoying nastiness.
Basic capitalism is fine for the time being, but corporate capitalism is really just a throw-back to the time of kings and emporers.
Similar to the upcoming US election results
Not necessarily. Stock is bought "used" unless it's from an IPO.
...money speny buying stock (or stock-price appreciation caused by businesses) goes pretty much to the rich, accelerating the concentration of wealth.
Where did he say "stock"? He said "investment."
- It means investing money in banks: giving everyone else a better chance for a loan at a lower rate.
- It means investing in new companies: giving people jobs, new/better goods and services, and opening up potential for others to invest (shareholders).
- It means starting your own company, that's an investment, too.
- And yes, it means investing in the stock market. And while you may think they are buying the stock "used," if no one buys the stock, the price of the stock goes down because there are more sellers than buyers, and that affects the underlying company in many different ways.
When I buy IBM stock, IBM doesn't see a penny of that money; some goes to middlemen, and the rest goes to a former IBM stockholder.
Uh huh... right. And what happens when IBM pays you a dividend on your shares? And what happens when you sell those shares for a profit somewhere down the road? And what happens when IBM has more power to leverage it's higher share prices.
It's not like you're just paying someone for a piece of worthless paper.
Since 86% of stock is owned by the wealthiest 10%...
Source of this statistic?
Wow. You are stunningly ignorant about the stock market. How does purchasing equity concentrate wealth elsewhere? You have purchased SOMETHING. You can earn profit on it (indicated above). You are investing in the economy.
I have trouble imagining what kind of economic efficiency, or society, we will have when a (relative) handful of people own everything, and the rest of us are serfs.
The reason you may have trouble imagining this is because it is ludicrous. The economy is a pie. The richer among us have a large share of the pie. When the economy grows, the pie gets bigger. Their piece of pie grows, yes -- but so does everyone else's.
It's not a zero sum game. That's just something those interest in class warfare like to put out there for scaremongering.
Ironically, the word ironically is often used incorrectly.
"Shareholders are the owners of the company. Companies borrow money from Shareholders"
Only at the IPO. After that, shareholders play among themselves and generate no investment, no value whatsoever. And as they sell and buy shares (influenced by media and analysts whoe serve their own interests), shareholders make and break companies in ways that are in no way related to the companies' actual viability, financial standing, product quality and so on.
I have only one thing to say about shareholders: fuck them. If they want profits, they should try some real work - exactly what you're advocating for us lazy Europeans. This is what capitlaism is all about, no?
"Only the small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan
You still don't get it. If it costs that much to live there, it doesn't matter what your general evaluation of the area is -- it's by definition luxury. I don't care if the place has rats.
San Diego property values are waaay overpriced for what you get.
What you "get" is to live in one of the nicest areas in the world.
You have *no* idea, you're fucking clueless. Call me spoiled? I've sacrificed a lot. I've paid my dues, and got basically nothing, so go to hell.
Hey, welcome to life. Sometimes it sucks, and things don't pay off right away. But sheesh, take some responsibility for your own life.
I shouldn't have to leave town when I'm an experienced professional who just wants to earn a decent living!
You know, I think I should be able to live in Brentwood or Beverly Hills or Eastside Manhattan on $30K/year. Shouldn't I be able to live when I just want to earn a decent living?
The answer, of course, is N-O. Don't cry to me that you can't afford to live there. Yes, the answer is MOVE. Previous generations have moved plenty of times, because they knew they weren't owed anything. Times change -- adapt or perish. Most areas of San Diego are freaking expensive.
Move, get roommates, save your money. Maybe you can afford to move back someday.
Sometimes it's best to just let stupid people be stupid.
Well the fact is you as an American consumer cannot afford to not talk to that person as noone in America is going to spend their time on you not at the cheap rate at which you are buying their product. So your choice cheap stuff or talk to foreigners. We all know the way that is going to go. Sure if everyone in America could afford to buy Luxury labels made in America it would be good but its not. So much of the American wealth is concentrated at the top that compared to the gdp most Americans are poor and can only lead a good life by buying foreign produced goods for cheap. The solution you ask? Its the same everytime in history- discontent, war and the poor rise up and kill the rich to get back the money. But for that to happen first the middle class needs to be elimnated which is what is hapening now. Count your blessings now that due to globalization and outsourcing you have at least one more generation of cheap consumption to enjoy before the next revolution occurs
**Life is too short to be serious**
Actually, it is -- all of your evidence is anecdotal. Because things suck for you, then it must suck for everyone. Well, got news for you -- it DOESN'T suck for everyone. In fact, it sucks a helleva lot less today than it did in previous generations. You just have this rosy colored view of 50 years ago that never existed. People considered television a luxury! People didn't buy books, they went to the library. And people saved for a damn long time to be able to afford a house. Vacations were driving to see Aunt Marge in Iowa.
when in fact the economic environment has changed *radically*.
Indeed. We have more mobility, more communication, more opportunity, more education, more nearly everything. Ironically, we also have far more whining. You're miserable because you have unrealistic expectations of things that are supposed to be handed to you.
I have a friend. Dude is about 42-43, works as a parts export manager at Honda. Dunno what he makes, but probably, eh, $60-70K. He is a millionaire -- from nothing. How did he do it? HE SAVED. He lived very modestly. He invested it. He has a wife and kids, but he still lives relatively modestly. You would never suspect he has that much money.
So did he steal the money? Did his ill-gotten gains come from the backs of the poor?
Sometimes it's best to just let stupid people be stupid.
"Want to be the one who collects the money at the top? Easy. Start your own company and create some jobs of your own."
You glossed over a key point. IBM's CEO Sam Palmisano like many CxO's, had absolutely zip to do with founding IBM though to his credit he worked at IBM or a subsidiary most of his life. since 1973. But I wager he's invested very little of his personal wealth in IBM equity other than maybe through the employee stock purchase plan, which is more of a benefit than a case of gambling your personal wealth on the success of the company.
One bit from his IBM bio:
"Mr. Palmisano has served as senior vice president and group executive for IBM's Personal Systems Group; led IBM's strategic outsourcing business;"
Apparently outsourcing is a key feather in his resume cap.
Ya know, I have no problem with CxO's who put all their personal assets on the line, and risk everything, to start a company and invest most of their waking hours for years in making it a success. God damn they deserve to reap huge rewards if and when they succeed.
On the other end of the scale I do have a big problem with the the rock start CEO's like Carly Fiorina, who invest absolutely none of their own wealth in an equity stake when they take the helm of a company. Instead they demand and are handed huge cash and equity stakes for just walking in the door and for being adept at social networking, crafting their image, political manuevering and climbing over the top of their teammates to get to the top.
When you have CxO's who have no real stake in the company they run is it any wonder many of them crater the company. Even if they fail completely their signing package up front and their golden parachute at the end insure they will have more wealth then most of us can dream off, even if they are a complete screw up.
They rock star CEO's also seem real short on investing in R&D and developing innovative products. More often than not their stewardship of the company consists of laying off or outsourcing enough people each year to maintain the companies profitability, and their grand plan is merger and acquisition which is a lot easier than invention and product development.
@de_machina
OK, now look at the average size of a house now, and in 1970. I don't feel like looking for the reference, but houses are much larger now than they were in the 1970s, and especially the 1950s. Why is that?
Just because people spend more on "fixed" expenses doesn't mean that they *have* to spend more, and that's my point. People have unrealistic expectations about their lifestyle.
Sometimes it's best to just let stupid people be stupid.
" That's why you see small businesses closing left and right, while Starbucks and Wal-Mart open yet another store in your area."
I wont win any mod points for this but ya know bashing Wal-Mart is easy but the fact is that company is successful because they play by the rules of the game and they play really well.
You should watch the bio on Sam Walton on Biography channel. I despise rock star CEO's that walk in to multibillion dollar companies and run them in to the ground. That is not Sam or the Walton family. He and his family started with next to nothing and a tiny five and dime retail store in a small town in Arkansas. They succeeded because:
- They worked really hard, and I mean really worked as in they all stocked shelves and drove around finding products to sell at good prices
- They gambled everything they had on their business multiple times and they could have easily lost it all numerous times
- They were ruthlessly efficient, it can be cruel especially to workers and suppliers but if you are not you dont succeed in retail.
- They gave people what they want, they sold the products people wanted at the best price in town. That is the classic definition of competition in retail. They did't win through bombing their competitors, or cheating or anything else. They competed, the competed well and they won.
Yea it sucks that they stock their shelves with Chinese goods but the fact is if they didn't someone else would and they would go under. Fact is Chinese goods are way cheaper than American made goods and you can't change that now unless we start restoring trade barriers or push American worker's wages down to 30 cents an hour.
Yea it sucks that they dont pay their employees very well. But you know what, running a cash register and stocking shelves are some of the lowest skill jobs around, especially in the era of bar codes and RFID. Fact is if I dont go to Wal-Mart I go to a grocery story with do it yourself checkout. You see even I can scan bar codes, feed money in to a cash register and put my groceries in to a sack, so I dont see the value in subsidizing a unionized grocery worker to do something that requires no skill. You do have to kind of wonder about the sanity of unionized grocery store workers commanding some of the best wages and benefits in many small towns. They are people with no actual skills and in free markets people are supposed to get paid based on what their worth. Grocery store workers are not worth a lot.
The other thing you need to appreciate about Wal-Mart is they have probably the most sophisticated and efficient computerized supply chain on the planet. They have giant computers in Arkansas that track every transaction in every store and make sure the right goods arrive at the right place at the right time. Your mom and pop store cant compete against that, in retail, inventory management determines the winners and losers, not sentimentality. Wal-Mart now has economy of scale almost no one else can match but the fact is they Walton's still beat their competition when they were in one five and dime in Arkansas because they worked really hard and they played to win.
All in all the Walton family are an American success story. If you are going to ridicule and crucify them for succeeding you are basicly ridiculing every aspect of Capitalism. Its is a deeply flawed system in a lot of ways, but so are all the others. The Walton's are just grand masters of the system they live under.
@de_machina
The system we have now is designed to funnel the profits into the hands of a few people
Always has been like that, always will be. The Romans used slaves to build marble villas for the governers. Medieval knights had serfs working the fields to put food on the banquet tables in their castles. Peasants worked in cotton mills to keep the industrialists in mansions. Now office drones sit in cubicles to help chief executives pay for their privates jets. This isn't a new thing, I don't know why you're surprised.
In fact now the gap between the rich and poor is smaller than ever. In the 14th century if you worked picking potatoes, that was your lot, you'd never be anything else. You worked all the daylight hours and lived in a mudhut, most of your children died of disease and you ate stale vegetables and drank filthy water. Nowadays, even the poor have great opportunity. A man with no money living in a box can drag himself up and start a business and become a billionaire. Even the poor live in relative luxury, with housing, food, education and healthcare paid for by the government.
professionals who used to be able to raise a family in a nice home on a single income now barely scrape by with two incomes.
Of course, in the 'good' old days, poor families didn't spend their money on televisions, computers, fridges, microwaves, indoor toilets, supermarket meals, fizzy drinks, new clothes, cars, holidays abroad, central heating, air conditioning, mobile phones, hot water, leather furniture, detached house with four bedrooms, garage and big garden, not to mention thousands of other luxuries which weren't available when only the man of the house went to work. All these things COST MONEY. You want today's luxuries whilst living yesterday's lifestyle. Well unless you're rich you can't have it. I'm sure if you cut out all the expenses, you could live like they did in the 1950s, with the wife staying at home, and everyone shitting outside in a shed.
Those 16000 jobs still exist, they'll just be held by different people. Presumably those in India need to feed their families as much as those in the EU - seems morally neutral to me.
The problem is that the 16000 workers (wherever) helped build the company to what it is. A "company" used to encompass the workers who built the company as well as the investors and executives. In this brave new world, it seems the "company" only includes the executives and investors, while the workers who built the business and were promised things like pensions for decades of work are now expendable widgets. The executives get bonuses. The current employees lose their pensions, jobs, and otherwise get screwed. Does it still seem "morally neutral"?
Clearly unionized grocery store workers are worth more than non-unionized ones, since they are paid more. In a free market system, the "worth" of someone is exclusively determined by the wage they can command. Workers who unionize follow precisely the correct strategy in a free capitalist market system: maximize your return with all means available. In other words: Wal-Mart's strategy. Why do question these worker's sanity, but not Wal-Mart's?
Workers banding together in unions to maximize returns is exactly equivalent to capitalists banding together in corporations to maximize returns.
It's at times like this that I wish economics was a more exact science. Right now there's still a lot of room for religion-style blind faith (from the belief, which I hold, that concentration of wealth is going to bring it all down, to the belief that if there was simply no regulation it would all work out, and everywhere in between).
The current theories, from what I know of them (probably not as much as real economists) smack of "uniform spherical consumers on a horizontal frictionless market surface"-style constraints. If only we had the computational power to simulate a planet-full of humans, and society's laws and norms, we could run experiments to verify the theories!