Many operations are moving offshore because other countries offer better business conditions than we do
“So how would you like to go to China? We’ll send you over on a two-year contract.”To tell the truth, I don’t like going over there for two weeks, let alone two years, but I didn’t tell them that. I wanted to keep the conversation going. Somehow I knew if I helped them fix the plant in China, they would close the one in California. So I countered, “Suppose I help you fix San Jose, and we can close the plant in China?””Oh no! We can’t do that.”Now, this is a Japanese company, but these were American managers. “Do you realize when this business goes to China, your jobs are going with it?””No, they aren’t; we have guarantees.” I started laughing. “What’s so funny?” Unfortunately, we all know what such guarantees are worth nowadays. Even so, I imagine there must be some fairly lucrative bonuses that would accrue for the successful transfer of this business.Although I never said no, I’m sure they could sense my lack of enthusiasm for helping them in China. It’s possible I may get another call, but I’m fairly certain I’m out of the running.In fairness to these “American” managers, their marching orders could well have come from Tokyo. They may have little choice. In any case, I imagine it may not be very long before a few hundred more people join the unemployment ranks.Do you ever wonder why so many companies, including many “American” companies, are moving operations offshore? Yes, cheaper labor is a major factor, but that’s just part of the story. Nobody ever seems to mention that much of this cheaper labor has better education and skills than we do. When someone is fluent in several languages and has exemplary math and science skills, they are far more capable doing many of the jobs that exist today.Another often-touted factor is less regulation. This means fewer business, labor, environmental and other regulations. If you’ve ever been to some of the Far East industrial areas, you can confirm this, because you can actually see what you breathe. Less regulation is not always a good thing, but it makes it a lot easier for them to take our jobs.Lower taxes is another factor. We have the highest corporate tax rate on Earth. That means you can move your operations anywhere on the planet and get a better deal. In fact, many “American” companies are moving their corporate headquarters offshore. Is Coca Cola really an “American” company anymore?The higher taxes are often justified claiming they are paying for our infrastructure, our educated workforce and other benefits. If you’ve traveled abroad recently, you may realize many other countries are rapidly building infrastructures that surpass ours, which are crumbling in many ways.And, of course, there is talk of raising taxes even more.Realistic pictureI could go on and talk about differences in work ethics and other things, but there’s no need. So many operations are moving offshore because other countries offer them better business conditions than we do.Now that unemployment is epidemic and the economy is stalled, there’s a lot of talk about stimulus programs for job creation. We seem to have forgotten that we need a healthy and prosperous private sector to pay for our government and its programs.Somehow we have to get back in the game. I’m not advocating a race to the bottom. There are a lot of reasons I wouldn’t want to work in Taipei or Shanghai or Manila. I’m not advocating we become like them, but we have to be competitive with them.Unless we have a realistic picture of the kind of environment our businesses need to be internationally competitive in today’s world, we’re wasting our time, and we’ll continue losing.Every country is competing for jobs for their people. It’s a battle we need to win. There are a number of organizations that represent business needs to our state and federal governments, but they need help because we are clearly not winning.Let’s face it: Our government is not going to solve this problem by itself. What can you do to help articulate your business needs and influence their adoption? We can keep laying off each other’s customers, or we can try to do something constructive to turn it around.Is anything on your calendar more important?Ronald J. Bourque, a consultant and speaker from Windham, has had engagements throughout the United States, Europe and Asia. He can be reached at 898-1871 or RonBourque@myfairpoint.net.