Who is to blame for US outsourcing 39

[EngineerDave]

I bring this up not to start a political war. I am an independent by the way but find myself leaning more towards the conservative side as many engineers do.

Democrats are starting to blame Republicans for loss of jobs due to outsourcing.

The way I see it both Democrats and Republicans are responsible for not securing good trade agreements. It seemed both supported NAFTA heavily in 1992. That is but one small treaty governing trade for North America.

What is the solution. I honestly don't believe any politician will have a solution for such an economics driven problem.

 

[4tuna]

CRG,CalEngJohn, Dorfer, and others have nailed this one, there is noone to blame but ourselves.

<Start of Rant>
Personally, I NEVER enter WalMart. I pay more at small local shops and buy less. 90% of the stuff WalMart sells is crap we don't need anyway. The US has become a disposable society. We buy too much, use too much, and throw away too much. Our standard of living is too high, we take too much for granted. We wouldn't need such high salaries if we didn't buy so much stuff.
<End of Rant>

Bottom line: Globalization will continue, and so will outsourcing and standard of living parity. In the end it may be good for everyone. But in the short term (20-30 yrs?) it will be hardest on those with the highest standard of living, namely us yanks.

 

[GregLocock]

Davefitz please reconcile the following quotes from your two preceeding posts.

"One way to dampen the increase in outsourcing is to add a value added tax VAT to both goods and service provided from overseas."

"As per WTO rules, the VAT cannot be imposed only on imported items,"

As I have great difficulty understanding your point of view.

WTO does not forbid the imposition of duty or tarriffs on imports. The import duty on say light trucks into the USA is actually quite high (for example) never mind the many other barriers to entry for other goods. (steel, semiconductors, lamb, etc etc)



Cheers

Greg Locock

 

[jmw]

No one is to blame.

It's a fact of life. If you have an economy shaped a certain way then outsourcing is one of the consequences.

There are things politicians can do but probably won't and, frankly, it's probably better they don't tinker with something they don't understand. Who does? No two economists ever agree on anything so what is the right and wrong? We should accept the situation and look instead at how we deal with the consequences.

Outsourcing puts cheap goods on the table. It drives sales and sales make the world go round.

I would suggest that our economic ills lately have little to do with outsourcing which is a slow process and one to which the economies of nations can adjust naturally, and more to do with 9/11 and OPEC.

I'm not connecting these two, just saying, 9/11 and OPEC both have an immediate and dramatic effects on global enconomies.

OPEC is a legitimised example of what is not tolerated in any other area of business; price fixing. At the moment oil prices are very high. For some sectors of the economy this is good, for others bad.

The problem is how to plan any kind of strategy when overnight, these guys can push the price of oil through the ceiling or through the floor.

Outsourcing is a consequence of longer term economic effects that can, like many things, be measured and predicted, within reason. Actually it is a beneficial means toward redressing the imbalances of our gobal community, along with other things, and we have discussed this before.

The main problem without outsourcing, or any other problem, is response. Trying to put the clock back or stop the waves rolling in is a waste of time and effort.

Firstly, to reduce the number of engineering graduates emerging from universities expecting a good income when they should have gone and learned to be lawyers or something else on the rise. Fewer engineers ought to mean just the cream stay and provide the skills that don't get outsourced. This is a supply and demand world and the educators and legislators need to more accurately predict how many new engineers, doctors, nurses etc are needed and plan accordingly. That is where governments can be useful, helping create a responsive education system.

Secondly, retraining of skilled engineers mid career. Every industry or sector of industry goes through a life cycle just as products do. Proper product management includes life cycle planning, and end of life planning. What to do to wind down the product and support it in its remaining years, spares, technical support etc. These structured approaches seem lacking when applied to jobs and it always seems a surprise when the coal industry dies or buggy whip making comes to an end but that is life. It will happen to every sector of activity. If it isn't outsourcing, it is something elses affecting another sector of the industry.

As engineers have said all over this web-site, you never stop learning. Learning is a key attribute for anyone, coupled with, not forsight, but fatalism, we should all expect an end to our happy days, or an interuption. What's the other saying? P*** poor planning produces poor results? We apply a lot of skills to products and designs that we could also bring to bear on our own lives. Stop expecting politicians to make things right, they never have and never will. Don't expect them to tackle the problem, better to ask them to tackle the solution which is more mid-life training, career change education, new skills courses. If we are to be engineers, it doesn't matter what we know, but that we can learn to do something new and that is the only real hope we have.

Let's find what we can do something about and do it and stop wasting time on things we have no control over; though we may have little we can do about 9/11 events, there ought to be something we can do about moderating the effects of OPEC.

PS, how is the New Democratic candidate going to make the US self-sufficient in energy? It makes good speach writing, but .... hey, don't answer that here, I'll post it as a new thread.

JMW

http://www.viscoanalyser.com

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[pmkPE]

JMW;

I agree and just want to add its not so much what you know as what you do with what you know. And to do so you must have a plan to put "it" to work.

 

[moltenmetal]

"Outsourcing" i.e. international trade in goods and services is inevitable. It's a necessary result of the search for the lowest price. The overall standard of living in the developing world will rise, as will consumption patterns there, and the standard of living in the developed world will fall. The rich in both locations will get richer, and some of that will trickle down, but most of it will not. The middle- and lower-class in the developed world will get poorer as the good-paying value-added jobs they once had go overseas. These are the only certainties.

Tarrif or tax-based protectionism won't work. It'll only help to keep down the truly powerless, the nations without any purchasing power and hence no effective lobby on their behalf. Just TRY enforcing protectionist measures against Chinese imports- your own internal lobby won't permit it- the Chinese won't even have to open their mouths in protest.

It's true we've ignored this trend while it was primarily blue-collar jobs that were being lost, and now we're a little more attention to it as the white collar jobs go. Too little attention, too late.

2dye4 had the key point: increasing productivity. As the productivity of the world's population increases, the world's economy will have to grow at staggering rates to keep everyone employed. The consumption necessary to fuel that economic growth that scares me most. I doubt the planet can handle it.

 

[Dorfer]

What will become interesting as we helplessly watch this economic shift unfold, are the social changes. I personally do not mind downsizing and simplifying my own life, how far is the issue. Woe to the polititians who ignore the clout of the middle class. This November will demonstrate that. Moltenmetal makes a great point about protectionism, as the Chinese become the equivalent of the Japanese economic powerhouse, will the flood of their imports eventually subside to a reasonable level with the loss of our own discretionary buying power? Americans have an uncanny ability to create new ways of making money, overcoming tough engineering technical problems and boosting our quality of life each time. I hope our best and brightest are on that trail to energy independence, stop filling landfills with plastic garbage and improving our environment.

 

[chris9]

I regularly outsource FEA work to an Indian consultant. The consultant that I use is approximately 30% cheaper than the average UK consultant.

I also used a UK consultant the other day and found them to be arrogant, aggressive and patronising. I got the impression that they couldn’t be bothered to present the results to me in the way that I requested because they decided I didn’t need to know and they had probably used up their fixed price hours.

This is in contrast to the Indian company that can’t do enough and often provides a service that is over and above what was originally agreed. They probably claw back any loses on future work but I accept that, after all they have to make a profit.

I will never use that particular UK consultant again not because they are a little more expensive but because their level of service did not compare.

I have also used a different Indian consultant that was around 60% cheaper than the average UK consultant. I will never use this particular consultant again either because of the poor service I received.

Choosing a consultant based on price is a recipe for disaster. I always choose to outsource work to companies based on performance and service. The next job I will outsource will be to a UK consultant that has a specific area of expertise. This one is about double the cost of my usual Indian consultant.

 

[GregLocock]

Good observation there Chris. If I pay twice as much for good service, that will almost always be remembered as a good project. Half as much for average service, I can live with, but the truth is that at an individual level the difference between a good analyst or draughtsman, and an average one, is more like 4:1 in my experience. And of course bad contractors are just money wasted.


Cheers

Greg Locock

 

[liberty]

Remember the saying, "Quality, Price, Service: Pick Two."

Most development cycles I am familiar with choose Quality and Service (in terms of cycle time). Another successful approach chooses Quality and Price, because they are willing to wait (sacrificing Service)

A leap in technology usually lets you do the same thing (Quality) either in less time (Service) or with less money (Price). So, if you were choosing Quality and Service you can now also have a Price you like. If you were choosing Quality and Price you can now get faster Service.

You can pick all three only so long as management views the improved Price and/or Service favorably. Expectations in these areas quickly catch up with reality and you will soon be back to Picking Two again!

 

[oldluddite]

http://economictimes.indiatimes.com/articleshow/msid-816337,curpg-1.cms

&quot;Putting Automation into CAD ©&quot;

 

[makeup]

Hang on a minute, why are you so quick to cut of the hand that has fed you for years? Out sourcing is stripping your local supply chain. If you do not support them they will close and that will make you totally reliant on your overseas contact. Now while they they might be cheap and talk to you nicely, are they going to be there when the shit hits the fan? Who's going to bail you out then? Building relationships is fundimental to achieving 'good service' and that cant happen at the end of a telephone. The best service I have every had came from the most obnoxious person you could ever meet, but who new exactly what I wanted, he supported me throughout and therefore I would never out source while there were businesses in my local area who were capable of doing the work. Supply chain development is not just about finding the cheapest or expecting the supplier to lick your ar**. I wonder if, before you decided to out source whether you asked the supplier what he thought of you as a client. Its supprising what you get told and you have to be prepared to eat humble pie sometimes. he might of been glad to see you go? You will be supprised at what you can achieve by talking. Anyway thats my two pennith good luck

 

[sms]

If the Indian infrastructure crumbles, perhaps the problem becomes moot?

http://news.yahoo.com/news?tmpl=story&u=/afp/20040817/tc_afp/india_technology

 

[controlnovice]

I see alot of reference to the USA outsourcing in the above postings.

I just returned from a trip to China (yes, my company is buidling a plant there, instead of the USA because it can be built cheaper and the labor is cheaper). One thing I noticed is all of the different accents and languages I heard: Finnish, German, French, UK English, etc.. Seems to me it's not just USA wanting the cheaper products.....It's the world.

It's a GLOBAL economy. Get use to it.

 

[makeup]

OK so you take all this work from the people in your own country and give it to soemone else. That makes a lot of people who will need to find something else to do or be supported by the state, that is unless you're going to just watch them starve. Now that costs money, money that has to be paid by those who work. Who is it going to be cheaper for, dare I say not I.

 

[EngineerDave]

What the heck can we do about this now?

 

[Dorfer]

Controlnovice, Like everyone including myself stated earlier there are those winning and those losing in the new global economy. You happen to be winning (keeping your job) but a visit to Saginaw MI, Flint MI, Detroit MI, Rockford IL, and many others to see the true cost of outsourcing, globalization and chasing cheap labor. None of these people will be able to afford a new Chevy Equinox with it's Chinese motor no matter how inexpensive it is. I too spent time in China working on an engine program a few years ago and realizing we were just training them to soon begin export entire engines and soon cars to eventually replace us here in the states. That is what is going to happen. It is just pure economics (capitalism) at work in a very competitive business. Tough luck most say, go find something else to do. That will probably happen also.

I have a 72 Chevy Chevelle SS in my garage that just screams of American power, self determination, self reliance and built in times with American cooperative manufacturing strength. Those days unfortunately are gone forever.
Here is my plan. I vote, write to my congressman, buy goods and services from companies with integrity that not necessarily originate here but invest here, reduce or eliminate consumption of plastic foriegn junk, buy fuel thrifty cars(except for the Chevelle), ignore the foriegn telemarketers and finally invest in companies only, that improve our American productivity and way of life.

 

[epoisses]

....and kill progress! How are the US products going to get any better if they don't compete against foreign products. Look at the former Soviet Union, look at the Trabi that all former-East Germans bought because there was nothing else. As soon as the market opened up, nobody anymore wanted a 40-yrs (or god knows) old incompetitive design. Competition is a blessing for the customers.

 

[StressGuy]

Not if those customers don't have jobs so they can buy your products.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

"All the world is a Spring"

All opinions expressed here are my own and not my company's.

 

[makeup]

It is my opinion that as the job markets gets tighter and more people become affected, this will become a political stand for someone and we all will be pushed into buying from home soil. I agree with the above and have started, I am stopping all policies that are not being run from the UK. I have found that in general there is only a minimal extra cost to do so. If we cant be bothered to stand up for ourselves how can we expect anyone else too.

 

[GregLocock]

Funny to read that someone from one of the great trading nations of the world is turning their back on 150 years of free trade policies.

However, given the current state of engineering in the UK I can't see that having much effect on anyone else.





Cheers

Greg Locock