Kerry and outsourcing

[question everything]

Last week, the following oped appeared in the WSJ;


May 11, 2004

Who's the Benedict Arnold?

By DAVID SIKORA


When John Kerry branded executives of companies that outsource their work "Benedict Arnold CEOs," I didn't know whether to be shocked, disgusted, angered or all of the above. In three words, the presumptive Democratic presidential nominee opened the political silly season by declaring me, along with thousands of my peers from Boston to San Francisco, traitors to our country.

(snip)

I am the chief executive officer of Pervasive Software, a publicly traded company. ExxonMobil or General Electric we are not, but we market our products world-wide. Being relatively small, we face enormous pressure from large competitors to offer greater functionality and more products at lower prices. We are typical of thousands of companies fighting to make better lives for our employees, our customers and our shareholders.

Seven months ago at Pervasive, we started building software products in India for a simple reason: The supply of talented computer software engineers created favorable economic conditions to build products at terrific prices, with the same reliability and high standards. These cost savings will mostly be redeployed into top-drawer American jobs -- highly paid professional positions to handle the increased production capacity. As a result, we will run more marketing campaigns to deliver these products into the marketplace, creating business opportunities for the many American companies that serve as our suppliers.

Some of the savings will be passed on to shareholders in the form of higher earnings. Our shareholders are large institutional investors, most of them American, representing the pensions and mutual funds of American wage-earners. Long term, our company will become more competitive, increasing our value and creating a wealth of new employment opportunities for Americans and foreigners alike.

(snip)

Mr. Sikora is president and CEO of Pervasive Software.

URL for this article:
http://online.wsj.com/article/0,,SB108423721407207683,00.html


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Yesterday, the following letters appeared

When a Company Leaves America

In response to David Sikora's May 11 Manager's Journal "Who's the Benedict Arnold?": Besides outsourcing, I believe John Kerry is talking about companies such as Electrolux, which is closing its Greenville, Mich., plant after 37 years and moving to Mexico.

Electrolux was the town's largest employer -- 3,000 jobs will be lost. With Electrolux leaving, some of its suppliers will follow, or close, causing even greater job losses. The union, city and state offered Electrolux many incentives to stay, but they were not enough.

From the Jan. 20, 2004, edition of the Detroit Free Press: "The Greenville plant is a profitable operation, and Electrolux is a profitable company. During intensive talks on how to save these jobs, the company never once claimed this plant -- or the corporation as a whole -- was losing money. They just said they aren't making as much money as they need to suit their corporate strategy."

The latest balance sheet of David Sikora's company, as posted by Yahoo Financial, reflects $47 million of current assets (mostly cash and short term investments), $10 million in current liabilities and no long-term liabilities. He has a very strong balance sheet and profits, yet he is outsourcing jobs and transferring them to India. His earnings statement reflects a 85% gross profit, which is extremely high by any measure.

William Kingston, CPA
West Bloomfield, Mich.

I am singularly unimpressed with David Sikora's smug assertion that his company's outsourcing of software engineering jobs to India will create savings to build new jobs.

Strangely, Mr. Sikora never bothered to detail the "terrific prices" his company enjoyed by sending software engineering jobs to India. Clearly the Indian workers are not receiving American-style salaries, let alone benefits. Or are they? What are they being paid, in relation to U.S. salaries? Mr. Sikora's efforts may not be unpatriotic, but they are mean-spirited and cheap.

Phil Hall
Fairfield, Conn.

http://online.wsj.com/opinion/letters?mod=2_0048

[JI7]

1. thanks, mr.hall

great response

[lanparty]

2. It's all bull!!!

They are outsourcing because it allows them to farm the field without fertilizing the soil. They are selling products PRIMARILY to an American audience. But they don't want to refuel the supply money that FUELS those purchases.

Basically, they're just profiteering off misery. They are exploiting a society with less labor and environmental protections than the US.

ALL third world countries have EVERYTHING they need to self improve without selling ANYTHING to the United States.

[lanparty]

3. Oh Yeah ...

FUCK YOU, Phil Hall.

[JI7]

4. read again

phil hall wrote a response to the first article posted which supported oursourcing. phil hall made good points against it. the first article was by that guy who has outsourced and was trying to justify it.

[TheFarseer]

5. Am I alone

in not giving a shit about shareholders? If they didn't have to feed those ticks, they could pay workers more and have low prices.

[daa]

6. Big deal

A $250 magazine ad is to replace $75k jobs. See it to your Indian buddies Sikora.