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Report: GM Will Ship More Jobs Abroad to Cut Costs
General Motors' manufacturing arm plans to sharply increase the amount of new white-collar work it sends outside the United States this year as part of an overall effort to reduce costs, according to an internal report obtained by The Detroit News. Shipping work to other nations where labor is cheaper - known as offshoring or outsourcing - has become a white-hot political issue in this presidential election year, with the United States continuing to lose high-paying manufacturing jobs because of rising productivity and growing pressure to cut costs. "In 2003, we began offshoring activities moving $3.5 (million) of work to lower-cost locations," the GM report says, "and we are planning to increase that to $48 (million) in 2004." The latest spending plan represents less than 1% of GM's global manufacturing budget, but the offshoring move highlights that GM is succumbing to increasing pressure to trim spending - even if it risks antagonizing the automaker's union and salaried workforce. While GM is looking at labor resources in other countries to perform some work, spokesman Dan Flores said it will be an insignificant amount and won't come at the expense of American jobs. "The amount of work that is being considered to be moved represents a very small fraction of the total multibillion dollar operating budget," Flores said. "The work ... is not being done in the United States or done anywhere." David Cole, who heads the Center for Automotive Research, says the "real culprit" in the loss of manufacturing jobs is not offshoring, but a "changing business model with improved productivity, not just in manufacturing, but in engineering," meaning it simply takes fewer workers to get the job done.
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So, GM says its a small amount and rationalizes it on that basis, as wel as blaming it on a changing business case.
Seems to me the business case does not consider all the factors!!
If you look at the bigger longer term picture, each company does the same thing.....each a "small" amount. It adds up and befoer you know it the effect is a smaller Gross Domestic Product....meaning there is less money available domestically. That means there is less money to buy goods.....including cars.
As a result, all those companies offshoring sell less product for less revenue. So there is too much unused production capacity which means costs and production must be cut.....again, and so it goes......
Does this sound familiar???
Hhhhmmmmm, maybe that is what is meant by the changing business case....
I could go on but what's the point when the focus is on the next quarter!!!
Posts: 383 | From: Oakville, Ontario Canada | Registered: Jan 2003
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posted
Exporting of America,,by Lou Dobb's check it out,very informative and about the only Anchor taking the problem seriously!!!!!!
Posts: 558 | From: Loretteville,Mars | Registered: Feb 2002
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All companies that have outsourced overseas have said the same thing GM is saying now. It's all BS and the bottom line is these outsourced overseas jobs are taking jobs from Americans. I also saw on an auto program this past weekend that GM is opening it's first overseas R&D plant in f...... India. Why in the heck do we need them designing cars for this country? I wonder if Ford and Chysler are or are planning on the same thing.
-------------------- Member # M02-0968 M6, 35th Anniversary LE #102, Posts: 232 | From: Springfield, PA | Registered: Dec 2002
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No raindrop believes it is to blame for the flood.
Posts: 686 | From: Texas: Hullabaloo, Caneck! Caneck! | Registered: Aug 2003
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For any of us who have investments in mutual funds and stocks, we are the culprits. We demand a return on our investments that exceeds the previous quarter. The only way left to accomplish that is cheaper labor. We also support overseas investment by buying foreign products. Automobiles play a huge part in the equation.
The other big problem no one else has mentioned: who will lead corporate America fifty years from now if all the experience was outsourced along with the savings? America looses until every third world market's standard of living equals our own... that's not going to happen for at least another fifty years. I have a tough time with this one. Definitely scary.
-------------------- '00 SS #6522 Black on Black T-Top MN6
Have You Forgotten How You Felt That Day? Never Forget 9/11/01. Posts: 184 | From: Harleysville, Pennsylvania | Registered: May 2000
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This is hitting pretty close to home where I work. My building holds about 2000, and it seems that at least a third of the people are H1-B or L-1. The cafeteria, in order to stay in business, has added 3 or 4 Indian dishes to the menu every day.
The company has built a data center in India, and continues to move work over there on a daily basis. We are told not to worry about our jobs, that new work will come in to replace that which was sent overseas. Wait and see.....
When manufacturing jobs started leaving the country a while back, the government said to retrain in computers. Now those jobs are leaving the country. What's left?
By the way, Lou Dobbs is the man. I have written him thanking him for what he is doing. Check him out at Lou Dobbs
-------------------- Jim Keene 97 SS #1450 02 Corvette Coupe Posts: 49 | From: Wesley Chapel, FL | Registered: May 2000
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Some of this blame should fall on our Unions. Big companies want profit; Union workers want more bennies; how much do you think the worker in India is going to make? Advantage, big companies.
-------------------- #22 Tom Henry Camaro Monterey Maroon Red Posts: 122 | From: Fort Carson, CO | Registered: Aug 2003
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quote:Originally posted by 380SS: Some of this blame should fall on our Unions.
The unions at this point seem to be the only jobs that are safe from outsourcing.
Any local that knows their member's jobs could be sent offshore ensures there is job security language in any new contract.
Posts: 2441 | From: Chester, NY | Registered: Feb 2000
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What gets me is that they outsource to save money, yet charging the same price, eg Cars, and thus giving them a larger profit margin (ok, in simple terms) So its us employees that get the boot and in search of jobs. At least in the financial sector/service industry it isn't AS bad with outsourcing compared to manufacturing and retail sectors. If the opportunity is there, big business will take them! Look at it in their eyes, as well as an investors eyes. Unfortunatley, those people aren't the majority here in the United states....
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That is what the retraining programs are for,to learn to flip burgers the right way and how to add just the right amount of curry to the cafeteria meals!!!!!!
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Sad to say, but the reference about "third world countries' standards will equal our own" is true, in a sense, but it's how that will happen I believe will be more painful than what we realize. What I predict is that our living standards will be averaged in with the world economy, meaning OUR standard of living will drop on average as to most of the rest of the world's rise in their standard of living. Which means that we're going to stagnate for a good while and actually reverse (hint of that going on now, perhaps?) in job growth. This is not necessarily doomsday, but it's going to be rough in making the world-market adjustment. The bigger scenario means that soon, and maybe not in our lifetime, -but then again who knows- we'll have more service oriented jobs and less manufacturing, as those will all be outsourced eventually. Enjoy your standard of living now, while you still have one. In 40 or 50 years, perhaps sooner, we're going to be VERY vunerable in the manufacturing areas. One thing people fail to realize is that it's not just America's will, grit, and backbone that makes us strong, it is also our economy. Once that's permanently weakened, we too, shall no longer be a superpower, but mere mortals in the balance of world power. I blame the one-sidedness of NAFTA, and I don't care what anyone thinks otherwise, it still stinks. Great idea on paper, but they should have kept it just an idea. There's probably not just one single cause or solution to all of this, but these are just some opinions of mine.
[ 26. March 2004, 01:44 PM: Message edited by: el ess1 ]
Posts: 577 | From: Aiken, SC | Registered: May 2002
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Unions are not to blame for any of the jobs going overseas so lets put an end to this right now. If people had the guts to stand up and actually do something these jobs wouldn't be going overseas. But they cave in when Corporate America or even your own Government puts pressure on them.
Posts: 2841 | From: Westland, MI | Registered: Apr 2003
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quote:Originally posted by 380SS: Some of this blame should fall on our Unions.
The unions at this point seem to be the only jobs that are safe from outsourcing.
Any local that knows their member's jobs could be sent offshore ensures there is job security language in any new contract.
Chris not even Union Jobs are safe. Electrolux here in Michigan is closing up and moving to Mexico to pay their people $1.57 an hour to do the work of Union People that are making $14 to $16.00.
Our Governor offered tax abatements and a new facility to keep the plant from moving but Corporate Electrolux snubbed her and now 2700 people are losing their jobs next year.
There is NO job security for anyone. Union and Non-Union along with Salaried. Its a shame when our own Government won't help its people but encourages outsourcing, union busting, and allowing jobs to go overseas. What a joke.
Posts: 2841 | From: Westland, MI | Registered: Apr 2003
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Ironic that you have a better chance of employing an American to build you car if you buy a Honda Accord than a GM.. (note: accords are made in tennesee i think)..
Globalization is the future. unfortunatly
-------------------- Had a blingin' 2000 SS
Now I have a "soon to be" blingin' LS1 powered 1969 SS
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Well, What the government should do is tax the hell out of the all imported cars, (just like the foreign countries do to our cars we import) then that will level the playing field. THEN lets see how much outsourcing goes on. Got some other thoughts. But, thats not for here.
Posts: 1031 | From: Germantown, MD USA | Registered: Feb 2000
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quote:Originally posted by 380SS: Some of this blame should fall on our Unions. Big companies want profit; Union workers want more bennies; how much do you think the worker in India is going to make? Advantage, big companies.
Unions are not to blame! Its greed! Big companies dont want profit, they want BIG profit! No matter what they make, they are not happy. I may be losing my job next year because the plant I work at only makes 1 million dollars a day! I wonder how much it might make in India or Brazil?
Posts: 18 | From: Coloma Mi | Registered: Aug 2003
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quote:Originally posted by Steven2000SS: Ironic that you have a better chance of employing an American to build you car if you buy a Honda Accord than a GM.. (note: accords are made in tennesee i think)..
Globalization is the future. unfortunatly
Umm... but the corporate profits go back to the island... also look where the parts contect is from most is japan. The majority of GM and the domestics for that matter are still made here... along with the profits that stay here not go back to some other contry...
-------------------- 2002 SS #5973 Posts: 1045 | From: Seattle, WA | Registered: Nov 2001
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quote:Originally posted by 380SS: Some of this blame should fall on our Unions. Big companies want profit; Union workers want more bennies; how much do you think the worker in India is going to make? Advantage, big companies.
I think everyone has a hand in laying the blame.... for instance GM has 1.2 million retiress that they provide healthcare to. Last years costs topped 60 billion... yes with a "B". GM isn't the only company with huge healthcare costs.... it effects a lot of companies... other country's and companies don't have huge legacy costs like GM does. As someone said a large part comes down to providing a "profit" to the shareholders.... there is no simple cut and dry answer to this problem...
[ 27. March 2004, 04:14 PM: Message edited by: MM ]
-------------------- 2002 SS #5973 Posts: 1045 | From: Seattle, WA | Registered: Nov 2001
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Unions have and are doing everything they can to help keep jobs here in the U.S. by giving back wages, going to two and three tier wage scales, giving up benefits so as to ensure the "survivability" of these companies. Why don't these executives start giving up some of their "sweets" and incorporate it within the business instead of the workers always giving, giving, giving.
As to an simple cut and dry answer, its easy, you tell these companies sure if you want to go then there is a hefty tax penalty for it, and all the good and services that are made within the foreign country you are going to, those also will be taxed 100% of its current price.
Our exports are taxed when they go in as imports to other countries why do we have to back down and give free trade and open doors to their goods. Its time to wake up people and see the blanket being pulled over our eyes by Corporate America and our Government.
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Here is a ideal for a new law, A CEO of a company cant make more than 100 X more than his LOWEST paid worker! CEO's are over paid, When they close a plant and put 2000 workers out on the street, they get a big bonus and the stock price goes up! Does anyone care about the average person?
Posts: 18 | From: Coloma Mi | Registered: Aug 2003
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