Re "Times Call For Tough Ethical Choices," Special Leadership Report. As I work for a manufacturing company still just getting into the Asia supply model, I see three points that can affect your prognostication.
- China is the current hot spot (or perhaps a fad). Having been there I see tremendous issues that may actually be similar to the British issues in the 1700s as they saw America as a low-cost producer. But most people touting China as a low-cost producer are simply looking at the FOB [free on board] China costs, not the great costs related to distance. The world is still big enough that distance, time zones and accountability add to those FOB China costs.
- Forty years ago Japan was the low-cost producer. Twenty years ago Korea was the low-cost producer. But the workforces in both countries soon demanded that they be able to afford the products they were making. I think this will happen in China so the current trend is short range only.
- You are correct that the low-cost producer will win the business. But I believe that Americans can be low-cost producers with productivity gains through better methods, quality gains, niche products, etc. I am not ready to give up on American ingenuity.
Mike Anderson, director, product engineering
Altec Industries Inc.
Wake Forest, N.C.
What's so ethical about a CEO offshoring work and then reeducating/training the displaced workers? What are you training them for? If it's a former manufacturing worker, will the next opportunity pay as well as the lost manufacturing job?
The choice a CEO must make is between two alternatives: low-cost labor (offshoring) or investment in productivity tools (automation and technology).
Retraining workers that are displaced by outsourcing may console the conscience of the CEO but that doesn't help the worker, and it definitely doesn't help or economy. (Are CEOs using the low-cost-labor excuse for not making investments here?)
It's good that a CEO is pursuing interests overseas to expand markets. However, low-cost labor is a choice a CEO makes between investments in our U.S. manufacturing base vs. someone else's. Let's step back and look at the big picture. Is it ethical to abandon our U.S. economic base so that "My Corporation" can prosper?
Each CEO must do what he/she deems best. Let's hope it's ethical for the corporation and our economy/country.
Dave Watson, Regional Automated Manufacturing
Technology and Education Center Initiative