Thanks to all for your great feedback. This is definitely a tricky issue. Doing business globally is a fact of life and I am not saying that it is a bad thing. I think the GE case is really an extreme example. For Immelt to head up a presidential council to promote U.S job creation and then make it clear that he wouldn't hesitate to move jobs off shore is so beyond hypocrisy.
This was an excellent article and I agree with your idea that GE and their CEO have turned their backs on the U.S. To accept the position that the President sent your way, tell the people of the U.S. how hard you’re working on keeping and creating jobs in the U.S. and then to pick up and move to China is despicable. The government needs to do something about all of these tax incentives that are supposed to create and keep jobs, and start charging these companies the taxes they owe. Right now we are in a fight over the countries deficit, yet we have major corporations within the U.S. that make billions of dollars in profit and don't have to pay taxes on their earnings. And to think that at least one of GE's divisions was helped out by the U.S. tax payers.
@Wale Bakare You are right. Both the managment and the trade unions are rigid in their stand and in between the hapless workers suffer. I have seen this happen even within our country (India). The businesses have migrated from one state to another because of the labor trouble created either by the trade unions or by the political leaders. Such people are only money greedy and not interested in the well being of either their State/Nation or the people. And in a free economy governments can do very little to stop such migrations.
It is time the government, the trade unions and the company management representatives come together on such issues.
@prabhakar do you think trade unions, company representatives will ever reach an agreement on those lingering issues? It is highly pathetic to see companies moving or offshoring jobs from their homelands to abroad.
This is a typical dilemma that many companies may be facing. The shareholders want the company to be profitable at any cost - so if it can be achieved by job cuts then axe the workers; if it can be achieved by relocating your manufacturing outside US, do it. It is all ruthless ! the ultimate aim being having the bootom line in black.
The CEOs however are too smart to keep their compensation packages intact and even have a provision in their contract for heavy severence compensation if the shareholders decide to sack them.
On the other side the local workers do not want to loose their jobs. But are they ready to compromise ?- are they ready to work over time without extra pay till the company comes back in black again? . Many times the answer is NO.
So the overall pictures looks like the company is doing a dis-favor to the nation by thinking shrewdly about its business. And it is not only true for US but but for all countries ( For example Nokia in Finland)
It is time the government, the trade unions and the company management representatives come together on such issues.
Do companies owe any allegiance to their home countries? I'll Say NO.
why? well, first we have to look at the business model of each country, for Asia, if the company needs to increase their production 400% in one month, they will only ask the goverment to provide equipment and hundreds of Engineers and they will achieve their goal of 400% increase, same with their profit.
in US is quite different, process is very slow and there re so many captains and not too many sailors, I can’t imagine a production line in US, where the supervisor will ask overtime with no warning or asking the workers to work over the weekends, as much I want to be optimistic not everybody will even consider working on those conditions.
I hope sooner than later US change their working policy to be more competitive.
Great thought provoking blog. It is a tough decision for all companies who both face competition from foreign companies selling their goods here and who want to penetrate indigenous markets and compete locally.
These are very tough questions to answer. The situation as you described it is the fruit that our "free" market give us as a gift. When I hear the phrase "free market" always I think of why market it is 'free" when everything in our life have rules .
From my point of view it is unacceptable when big companies decide to leave from a Country because of the increasing tax rate that government must do for survival purposes.
Giving tax breaks to businesses was an economical strategy that was intended to save and spur the economy. But it is indeed time for the companies to pay back and I wonder why republicans are willing to maintain that tax breaks for companies that no longer need it.
I understand your frustration and I'm sure most Americans feel the same thing. But my feeling is that for many American companies to remain viable they will often have to outsource part of the business for various reasons. Besides the cheap labour available in emerging nations, some countries will only give (buy or invest) if only they can get back (transfer of technology). Also the fierce international competition might constraint some companies to make some sacrifices that may not be well perceived by the people. But I do agree with you that the priority of any American company should be to preserve and create jobs in the country. And GE decision seems to be an irony indeed.
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Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
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You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
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