Neutron Bomb
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Readers have lately been asking me to write about IBM. It seems the BBC has been on the case somewhat over imposed changes to Big Blue’s UK pension scheme. These mirror similar — though more draconian — changes imposed on IBM’s U.S. workers a couple years ago. Alas, this just seems to be a trend we’ll be seeing more and more of. The problem isn’t in IBM per se, it’s in the distorted reward structure perceived by most public companies.
Two years ago when I covered IBM’s yet-to-be-announced layoffs in some detail it sent the company into a tizzy of denial. Why? “Because you were right,” said a source who still works at IBM. “You called them on the big changes they were planning to make, forcing the company to issue denials then drag those changes out over a couple years where they’d intended to impose them all at once. They never thought one blogger could have that much impact.”
Explain that to my kids, who think I type for a living.
What happened two years ago was IBM deciding to move most of its jobs offshore to save money after a sobering look at the life cycle cost of its U.S, workers. If you look at the total future cost of an American employee for the next 15 years — it is a pretty big number. Then add the double digit inflation cost of U.S. health care and that number becomes bigger still. The only way companies like IBM see themselves being able to continue to operate is by cutting retirement benefits and/or shipping jobs off shore. In IBM’s case they are doing both.
This is at the heart of the current health care debate, because the cost of medical care is killing U.S. jobs.
The IBM USA pension plan was nuked a couple years ago. Many U.S. workers got less than 15 cents on the dollar for the present value of the pension they would have received. Retirement health care benefits for IBM workers are now down to the equivalent of about 18 months of present coverage. This trend is not limited to IBM. How many auto workers have just lost pension and retirement benefits?
A few years ago Congress was considering legislation that would separate pensions from companies so the company could not spend or lose it. We sure blew that one.
This downward trend is continuing. IBM — like nearly all its competitors — is shipping-in workers from India to staff many new projects. The work could be done as well — perhaps better — by the U.S. workers who were not long ago laid-off. There is something really wrong when a company will lay off its U.S. workers and then import Indian workers to do the same work on-shore.
Now some of IBM’s American workers are being asked to consider taking jobs in Bangalore and other foreign outposts. This program creates new expatriots, giving each a one-way plane ticket. Pay will be in local currency, possibly at local pay scales. IBM is being very elusive about these details. But it is clear that the transported workers will be off U.S. benefits.
But as I say, IBM is merely one example of how messed up things have become for U.S. companies.
During the recession IBM has done extremely well financially with profits better than forecast every quarter. They did this by relentlessly watching their money. Not only do they look at the numbers for the next quarter, but for the next several years.
The automotive industry on the other hand has ignored the long term in their business planning. As a result most car companies were completely blindsided by the recession.
IBM has watched the growing costs of maintaining its U.S. work force. For years they have been cutting staff and moving work offshore. The U.S. auto industry on the other hand was dependent on future car sales to cover obligations made in the past. IBM planned ahead and started shifting the business out of the U.S. Other firms did nothing and have suffered horribly.
What this means is that we should expect more of the same in all industries. Benefits will decrease and jobs will depart.
The new reality at IBM is that if you’re brilliant, work really hard, and earn a world-class degree from a U.S. university, IBM may well have a job for you at one of its U.S. research sites working as a “complementary worker.” But don’t expect that job to last for long. Be prepared to ship out to India or China as a “long-term supplemental worker” after you’ve soaked up knowledge for 13 months.
Newsweek recently reported that IBM, HP, Accenture, and others are finding it profitable to detach from the United States (even patenting the process).
“IBM is one of the multinationals that propelled America to the apex of its power, and it is now emblematic of the process of creative destruction pushing America to a new, less dominant, and less comfortable position,” Newsweek said.
This is the HR equivalent of a neutron bomb, which kills people but leaves structures unscathed. So all these companies will be leaner and meaner — mean enough that there may be nobody left to buy their products.
It comes back to the common perception that the sole function of public companies and their CEOs is to “maximize shareholder value” — a phrase that is interpreted to mean “maximize next quarter’s earnings-per-share.” This philosophy works beautifully with the slightly less than four year average tenure of a U.S. public company CEO. Long before the effects of these bad decisions can show the CEO has bailed, descending beneath his golden parachute toward some retirement heaven.
Where did this cult of shareholder value maximization come from? And who says that’s the prime directive and nothing else ought to matter? Not me. In fact it is bad policy both for the companies and for our society in general. Here’s a good explanation of this phenomenon and what’s wrong with it.
Companies like IBM that take this position are hurting America. The kids graduating from college now are the first American generation that is likely to do less well financially than their parents. My kids will do less well than me. One reason for this is that we’re eliminating high paying jobs and replacing them with lower-paying service jobs. IBM towns like Rochester, Minnesota and Armonk, New York thrived economically because Big Blue pumped money into the local economy by creating high-paying tech jobs. What happens to the local economy when those jobs are exported? It declines, perhaps permanently. That decline does not have to be inevitable unless we make it so.
Companies and countries follow certain life cycles, but we do ourselves and our culture a disservice by thinking those curves aren’t affected by the corporate decisions we make.
If we’re going to be analytical, let’s at least do it correctly.
While I believe IBM has a right run their business as they see fit (within the bounds of the law), could I at least be spared the indignity of having my tax money used to support such companies? Why is the US government awarding IBM billions of dollars in contracts if they are not acting in the best interests of Americans? Why is the President talking about stimulating the economy with health-care IT and infrastructure spending while awarding those contracts to companies that are blatantly off-shoring jobs? If IBM can do without American employees then they should do without American taxpayer money. Let’s award contracts to “real” American companies.
Amen. No US taxpayer money should go toward funding jobs that are intended for overseas workers.
The cost of HAVING government health care will be our freedom. After we lose that we’ll lose everything else.
American workers cost too much because the government meddles too much. Stop the stupid high taxes. Stop the employer has to pay social security too.
We’re uncompetitive because we have a perverted form of capitalism that is commonly called “socialism”.
Actually, this is quite opposite. USA has the truly rotten real capitalism with too little government regulation, where workers are real slaves, no health care, 2 weeks vacation (which you often times can’t take all at once) etc.
If you want to see what gentler more social capitalism looks like look at European countries like France, Austria and Scandinavia, where people have 40 days of vacation a year, 2 year maternity leaves, national health care that covers everything, Austria even has free university education for every citizen willing to study, unemployment benefits that sound too attractive that some people would rather not work at all (and certainly majority of the rest of the word would love to be unemployed in these countries).
USA in comparison sounds more like Roman empire with slave labor.
IBM is a captilist machine doing exactly what its suppose to do to survive. IF it did not move offshore, it would end up in the situation Detroit is in now (doomed).
The overiding problem is that the Rest of the World (ROW) is beating America at its own game (captilism), and nobody likes that -do they…either you beat them, or join them. And join them they must to survive within the existing rules of the game.The simple fact is we have had it too good for too long, and the world average is catching up to us..
The only mediation I see is tthat American policy could change national rules so that the average American can gain (employment or otherwise) when IBM or other national companies profit through appropriately crafted contract awards or tax breaks within the USA (as the “shafted taxpayer” has eluded to), This has to happen ASAP, before all the money from available spending simply leaves our shores. Ah heck, maybe its already too late given our debt…the banker in our Monopoly game (China) won’t like this “pro America” slant.
Currently there are tax benefits for hiring immigrant labor vs. citizen labor. As long as there are disincentives to hire Americans it should surprise no one that corporations will do that.
Many corporations are choosing to leave the U.S. entirely. A large part of this is related to U.S. taxes and regulations, and it should surprise no one that when it is easier to do business elsewhere, that many corporations will choose to do that.
The issue of healthcare is another issue which is more complicated, but no legislation currently being considered will do anything to control costs. At best the politicians may change how it is paid for and by whom.
There is no part of any of this which the politicians have not had a hand in, and there is no part which they have gotten right in the past, or are likely to get right in the future. I may be unduly pessimistic, but in my lifetime I’ve seen very little from them to justify any measure of confidence. I lost whatever faith I had that leaders could be responsible a decade ago when I entered my late 20′s.
It’s not the US tax policy that’s the issue; it’s the non-existent policies elsewhere.
How about ‘fair-trade’ where we tariff work performed off-shore so that it’s the same cost as doing it locally?
Also, don’t ban H-1Bs or similar visa programs. Require that the recipients stay in the States for a period of years so that they don’t just run off with the experience gained and start their own companies elsewhere, but benefit our society with taxes paid here.
It’s interesting that of the top 3 technology company in this country (perhaps the world) in terms of market cap, only #3 – Apple – is thriving based on innovation and creating products that are desirable and not yet duplicable everywhere in the world, while #1 MSFT is hanging on by sheer inertia, and I have no idea how IBM can remain ahead of Apple still at #2 with no product or service not replaceable by any decent open source/freeware company, perhaps by pure brand name and salesmanship. IBM is essentially on a sliding slope like Dell, IMHO. No amount of government tax cuts will bring back those jobs unless you bring back slavery and child labor.
So I have a few simple questions that I hope to hear your take on it – since we do not hear it ever discussed by the so-called financial experts and economists. Exactly what is the end game? They say about 10% of the people own 90% of all the wealth in this country (perhaps similar worldwide), and the trend is only accelerating favoring the rich-side. All we hear from commentators is that “consumers” must start spending to improve “the economy”. So I’m not savvy at economic math, but how can a population majority with ever dwindling collective spending power hope to turn this around? Doesn’t this prove that the trickle-down economics is dripping down ever less on the increasing mass below who now owes more debt than they are worth on average? In case of IBM, it’s even clearer that corporate profits have no correlation to employee head count or wage. So my question is – What is the rich doing with all that money? We now know the boom in the last few years came from historical rise in average personal debt. The only way “the economy” can continue to grow is by creating ever more “consumers” from new population in Asia and Africa that will eventually be used up just like the current crop of used American consumers. Isn’t that just like a Ponzi/pyramid scheme? Is the economists/politicians’ only hope relying on our children (whose health and education we are investing in less and less) to come up with some kind of scientific breakthrough to keep sustaining an economy? Isn’t that kind of like sticking in “… then a miracle occurs…” as a variable in our scientific equation like the famous cartoon?
“[...] I have no idea how IBM can remain ahead of Apple still at #2 with no product or service not replaceable by any decent open source/freeware company, perhaps by pure brand name and salesmanship.”
Yes, it’s salesmanship, basically. IBM sells ‘enterprise’ software. Read what Paul Graham says on IBM and ‘enterprise’ software here: http://www.paulgraham.com/colleges.html
The problem is that the people who are in charge of choosing and buying ‘enterprise’ software, that is, CTOs or CIOs of large companies, aren’t the same people using the software, that is, the low-level workers. If the workers have trouble using the software, the CIO/CTO doesn’t care. He’ll just tell them to ‘deal with it’ or whatever. Of course, bad enterprise software does cause a loss in productivity and a drop in profits, but the link between cause and effect is so diffuse that it’s easy to ignore or explain away.
Apple on the other hand sells their products directly to the people who use them (and, I guess, their parents in the case of teenagers). If their products aren’t good, people will simply stop buying them.
Another reason why Apple creates better products than IBM is that Apple doesn’t mind employing creative oddballs and letting them loose on the things they’re good at (which is maybe because they have a CEO who is a bit of a loose cannon himself). IBM is willing to take the bad (i.e., a certain amount of rebelliousness) with the good in hiring creative, intelligent people. This used to be true of IBM in the Seventies and earlier, but is no longer true. To get ahead in today’s IBM, with it’s Stalinist PBC system, it’s best not to have too strong of opinions on how to improve the product if those opinions differ from others.
The people who survive and thrive in today’s IBM are those who would have survived and thrived as Soviet apparatchiks in Stalinist Russia. I know that sounds like hyperbole and I admit it’s not true of everyone who succeeds in IBM, but it is, by and large, the case.
I meant to say: “*Apple* is willing to take the bad (i.e., a certain amount of rebelliousness) with the good in hiring creative, intelligent people.”
Bob, could you correct my comment, please, and delete this one?
I proof-read it twice and I *still* make a mistake. 8-).
You should read Tom Friedman’s book “Hot, Flat, and Crowded”. He talks about how the current model is about to collapse. Lets face it, globalism has been nothing but a lie. First, they told us don’t worry, only meanial jobs that nobody wants and don’t pay very much will go offshore. We’ll get training the for those high paying jobs like engineers, scientists and the like. Jobs went offshore, but training didn’t materialize. This caused all manufacturing to go overseas, whether to Mexico, China or India to the point where you can’t find a single thing that’s made in America on the shelves. Now that they have decimated manufacturing, they are moving those high paying jobs overseas. In a couple of years, the only jobs available to Americans will be slave wages. They have accomplished what they wanted. Which is to reduce America into a two class system. Either you are rich or you are poor. No middle class. And by the way, whatever class you are born in that’s the class you die in. The American dream RIP 2009.
Hear hear!!
Public companies these days put Shareholders first, customers second and employees dead last. There’s no balance. We need a new business model.
This is a great piece; very insightful….but it’s only dealing with the tip of the iceberg.
Others have mentioned that publicly-held corporations are here to create “shareholder value,” which is to say a return on one’s investment. There are so many short-term investors out there, wanting immediate returns…so companies live and plan to make quarter to quarter data look good. We no longer need visionaries because our leaders don’t think much beyond a few quarters out. And our corporate leaders are motivated by quarterly data because it drives their paychecks and bonuses.
Our corporate leaders have made friends in the White House, Congress and various state governments, leading to laws that allow them to manipulate data, cut benefits, discriminate against workers and receive incentives with no intention of fulfilling the intent of the agreements.
The *real* problem (aka root cause) is that virtually all of our elected officials take donations from corporations and advice from lobbyists, and are beholden to someone other than the population they’re supposed to be representing (aka “us”).
If all or most decisions in our country are motivated by what corporate America wants, we have a much bigger problem than just IBM.
I just cannot agree to comparing Apple to IB ie apples to oranges. Let’s focus on “better products” for a while. While Apple employs creative people to devise cute, cutting-edge consumer devices and software features (plus some hardware engineering but nit THAT much) that now seem to sell themselves off Apple Stores, IBM is a different kette of fish. IBM does invent technology down do basic physics and material research. Putting the IBM’s internal patent competition and its nuances, the result of this research and engineering are USUALLY products very well designed, planned and delivered (yes, there are excetions, of course).
As Paul has said above, IBM sells its products and putting the CEO issue aside it is sober to notice these will never sell themselves as in Apple’s case. Putting $1+ servers and other gear even in the funkiest would-be-IBM-Store won’t do. Ordering those takes weeks. Delivering those takes months. Like it or not IBM is big and provices toys for boys working for analogously big companies.
Now, these two companies differ in most everything but it so happens that the products of both fall in the same broad IT category. Just like apples and oranges are fruit.
On another account. Everything has its own cycle and so does Americas superemacy in economy, technology, innovation etc. Europe used to be central to world’s progress and it definitely is not by now. We have produced quite a bit of history artefacts to draw American tourists so future looks not that dim, after all :- ) Asia is rising and considering America’s structural weakness and inability to move swiftly in strategic areas like economy/currency/bond/healthcare/military complex and others makes Asia’s soon-to-be supremacy even more inevitable.
Regards,
Tom
Check out Bright Future Jobs, on my id’s link. It’s not a total fix, but it addresses one aspect of offshoring.
I’m rolling in my grave.
I’m rolling in my grave too.
It’s this kind of ignorant piece that shows your grasp of economics is limited at best. As much as you bemoan the loss of a job at IBM for the American IT worker, this is great for American consumers as prices drop from using Indian IT workers. Further, those American IT workers are now freed up to think up the next big thing, from which a bunch of new jobs can spring. If they can’t think of anything, they SHOULD either move to India or take a lower-paying service job as that’s all they are good for. As for your kids, they’ll have a far better life than you ever did, just for being lucky enough to be born later in this time of explosive growth rather than earlier like you.
The problem with that argument: the “consumers” of those Indian workers are not American “consumers”, but the managers of corporations, who turn the savings into bonuses for themselves. Self serving arguments tend to be transparent. If Indians were so much better and not just cheaper, India would be employing themselves in support of their domestic corporations. They aren’t, of course. Indian IT is simply exploiting other Indians and a corrupt exchange rate system.
Robert, you’re throwing around a bunch of silly accusations and hoping something sticks. The consumers of cheaper IT work see the value of Indian IT workers in lower prices for goods everyday, just because US corporations sometimes share in that value through higher profits doesn’t make them the sole beneficiaries. Precisely what argument is self-serving? It isn’t transparent to me. Nobody said Indians were better, only cheaper. If they’re worse, then clearly the laid-off American IT workers can start their own companies and destroy IBM: what’s their excuse? Indians don’t do it because they’re coming from poverty and are content with the marginal wages from BPO, they’ll work their way up to more advanced tech soon enough. How precisely is Indian IT exploiting Indians? And blaming corrupt exchange rates? C’mon, you’re really digging in the bottom of the barrel for that one. The fact is Indians are willing to work for less, that’s great for the consumer as the work gets done and it frees up higher-paid workers to think up the next big thing. If they’re too stupid to think up something new and unwilling to compete for BPO-type work at Indian wages, perhaps they should get out of IT.
btw, interesting blog, I think you’re right with your skepticism about cloud computing and the web as a thin client, as you can see from my earlier blog link.
Ajay – you are full of crap!
It’s “expatriates”, not “expatriots”…
Thanks for the correction. I guess an expatriot is someone who used to be a patriot. Although if they shift their patriotism from one country to another due to a change of homeland then they are both an expatriate and an expatriot of the former country. Hence the association.
You forgot to mention why American workers affected do not complain. It is because their severance is held hostage by either the existing company or the outsourcer. If you want the three months promised early on, they you need to sign the 14 page document with paragraphs like this:
————————
Employee represents and agrees that he/she will not disclose the terms of this Agreement,
or the terms of the negotiations leading up to this Agreement, to any persons, except (a) to members of Employee’s immediate family, Employee’s attorneys, accountants, tax or financial advisors, provided that Employee informs each such person of this confidentiality obligation, each such person agrees to be bound to its terms, and Employee shall be responsible for any violation of the terms of this Paragraph by any of those persons; and (b) to the extent required by a subpoena or court order or otherwise required by law.
OR
Future Cooperation.
Employee will comply with all reasonable requests from any Releasee for assistance and/or information in connection with any matters relating to the duties and responsibilities of Employee’s employment, including without limitation, consulting with any of the employees in connection with the transition of on-going matters, consulting with attorneys of any Releasee and/or appearing as a witness in connection with any dispute, controversy, action or proceeding of any kind, and making himself/herself available to attorneys of Releasees in advance of witness appearances for purposes of preparation upon the request of the Company and with reasonable advance notification without the need for the Company to issue a subpoena. In connection with any of Employee’s cooperation efforts mandated by this Paragraph after the Termination Date,
Employee shall be entitled to receive a reasonable hourly or per diem amount to be determined in the Company’s sole discretion (or reimbursement of actual and proven lost wages as the case may be) and reimbursement of reasonable travel and other out of pocket expenses, provided that those expenses are submitted pursuant to and are in conformance with the Company’s then applicable policy relating to expense reimbursement.
————–
So when they call because the indian who took your job cannot figure out how to do anything related to it, you are obligated to answer and they (at their discretion) can decide your efforts are worth $3/hour.
AND Screw with us and we will sue you under:
——
a violation of any of the terms of such Paragraphs will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Employee agrees that the Company shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) in a court of law restraining Employee from committing any violation of the covenants and obligations contained in Paragraphs xxx,yy,zzz. These remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.
HP’s Web Sites have a selection for login for
“HP Employees and Contingent Workers”…
‘nuf said
At least the BBC picked up on the story of IBM pension changes in the UK. The USA press barely noticed it. One would think that such a dramatic change that affects 300,000 workers might be big news. Not in the USA.
While some like to blame the unions for the ills of society, the union workers who have recently lost their pension and health care benefits received a lot more attention in the press; and more consideration and protection by the government. As much as we have we want to complain about the unions the simple truth is we still have not learned how to treat our workers fairly or equitably. Those without union representation are much more at the mercy of their employers whims.
Let’s not forget one of the reasons IBM was not unionized in the early days. IBM made a commitment to treat its workers fairly and with respect. Kiss that promise good bye.
The US media hasn’t said anything because it too is part of the problem. Over the last 10 years there has been the decimation of all media rules. The big media companies, such as Clear Channel have bought most of the independent media outlets, and have grown to an enormous size. Today, only a handful of companies control all of the US media, and control the message with an iron fist. They censor any story that is against their interests, and their interests are driven by money and politics. These media companies aren’t in the business of reporting the real news. Instead, they are more interested in “infotainment”. If you look at the headlines or the lead-in story on news programs, you will see the majority of them have no real news value. As a US citizen, I no longer rely on these programs to get my news, because they are worthless. I get most of my news from overseas outlets, such as BBC, EU Observer, India Times, and China.com. Although they focus more on their own region of the world, they actually provide better reporting of the US than any of the US-based outlets.
How about they don’t hand out health benefits?
The ‘problem’ is that other countries have become worthwhile enough to conduct business there.
If IBM keeps high paying jobs here, then they will lose business to companies hiring offshore. You can put a tariff on a car, but how do you put a tariff on 2000 lines of code?
The real answer here is to change the economics so it is more profitable for business to have U.S. workers. My three steps for this are:
1) Get rid of the Corporate income tax (and optionally Personal income tax) and replace it with a VAT tax system. So regardless of where products are made there is a cost for selling them in the U.S. This will level the playing field with those that build offshore and import virtually tax free.
2) Nationalize health insurance so it is no longer a corporate expense. (or not nationalize, but come up with a plan where it is not paid for by the corporation). Again leveling the playing field.
3) Balance the U.S. budget so we dont need to continue to borrow money from China, and then play hardball on the currency exchange rates that we have allowed them to manipulate for the last decade. Force the dollar down so that the cost of doing business is more balanced. So all the people constantly arguing for lower taxes (but not willing to massively cut spending) are selling us to the Chinese.
A close friend at IBM had to train his 3 Indian counterparts on his job in order to receive his severance package…….2 years ago. He recently learned that his job is once again being performed in Essex Junction, Vt. – by 2 of those people that he trained. Wake up America!
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What we have is biblical capitalism in the US…..and it’s not sustainable. Key industries play the power game in DC via the highly secretive group known as The Family (also The Fellowship). There will be no chance of reforming our economy’s broken business model and to focus on sustainability and jobs for the working class as long as the fulcrum of power for the Republican Party is based on C Street in Washington D.C. And as long as the Republicans remain the 2nd party, then we need to deal and solve the problem of this power center coming from the religious right……..and their push for biblical capitalism.
We talk about a broken tax code, we talk about health care, we talk about green cards and foreign labor laws, we talk about energy dependency, and etc….. Every single one of these key and very important areas and major changes in those areas over the past 10 to 15 years can be traced directly to the industry and policy focus groups of the highly secretive THE FAMILY (C Street, The Fellowship, The Brotherhood…).
Restore the separation of church and state…….push C Street out of our government……..and end the theocracy. Then we’ll begin to solve things for the greater good of our nation, for the good of our democracy, and for the good of the majority of Americans. Religion has its purpose and place – but it doesn’t belong in congress, or in the white house, or in our military……in belongs in the private & civil sector of our nation. Look at the Air Force Academy and how it is still dominated by evangelicals and religious extremists…….that is the tip of the problem.
The Theocracy and C Street is the fulcrum of power behind the Republican Party these days. That is where the talking points and scare tactics originate and are designed to stop any and all health care reform in its tracks. They are the same people who supported our costly (in deaths and treasure) two front religious war in Iraq and Afghanistan – they are the same one’s who refuse to talk about the full costs of wars…..while making cost the center point on health care. They are the same one’s who designed the Bush tax cuts for the rich – they knew it wasn’t covered under a balanced budget. Wake up……we can have tax cuts for the rich that result in a swelling deficit……..but we can’t provide health care to 50 or 60 million fellow Americans because it will increase the deficit. Biblical capitalism = American Greed by the so called Have’s. The HYPOCRISY needs to stop or we’re doomed…….they need to be removed from government functions and policy decisions.
People like Brownback, Enzi, SC Gov. Sanborn, Bush, Ed Mease, James Baker…….the list of king pins from this secret group is very telling.
I’ve been arguing for years that there is nothing wrong with sustained profits; why is growth on top of that so necessary?
I work for one of the TARP receiving banks.. We have strict policies (now) around trading shares; any shares. We must hold them for 30 days minimum. If discovered doing differently, one is subject to disciplinary action, up to and including termination.
It’s a start.
If there were a tax on trading shares (as there once was) that would render it less profitable to trade shares too often, perhaps we could put some slack back in the system.
[...] Neutron Bomb « What happened two years ago was IBM deciding to move most of its jobs offshore to save money after a sobering look at the life cycle cost of its U.S, workers. [...] “IBM is one of the multinationals that propelled America to the apex of its power, and it is now emblematic of the process of creative destruction pushing America to a new, less dominant, and less comfortable position,” Newsweek said. This is the HR equivalent of a neutron bomb, which kills people but leaves structures unscathed. So all these companies will be leaner and meaner — mean enough that there may be nobody left to buy their products. Companies like IBM that take this position are hurting America.» [...]
This process is inevitable in the long run.
Just like bicycle manufacturing moved to Taiwan. Then that manufacturing moved from Taiwan to China and Vietnam.
But it doesn’t mean that the U.S. must artificially increase the pain by allowing foreigners to displace U.S. technology workers at home. It’s an abuse of the visa system.
The current heads of corporations are typically, solidly, “Baby Boomers”.
The baby boomer generation has done more to screw up more than any single generation in the history of America. It is the original “me” generation. The idea of sacrifice with this generation has dissolved. They are the most greedy, self-serving, self-centered generation. Perhaps coming of age in the age of “free love” warped their sense of values and their sense of right and wrong.
When the boomers have finally moved on, either in retirement or in death, will the next generations re-establish the fundamentals of wealth building such as hard work, frugaility and saving that enabled the boomer’s parents to improve their lives and the lives of their children, the boomers.
Or will it devolve into further manifestations of the boomer generation’s self serving greed.
Tom Brokaw’s book, “The Greatest Generation”, detailed the work and sacrifice of the boomer’s parents. Will all that the boomer’s parents achieved be destroyed by the boomers?
Will we, the children of the boomers find our way back to greatness?
Meanwhile in the real, non-legacy part of the tech world in the U.S., we’re still short of qualified and skilled knowledge workers.
BOLD 2 is coming.
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[...] money that could have been put to productive use. Some of the most prominent are dedicated to shipping jobs overseas. Some of the largest are owned by people who hoard vast amounts of money while paying [...]
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