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IBM, Other Multinationals "Detaching" From the US 812

Posted by kdawson
from the hear-the-weather's-fine-in-dubai dept.
theodp writes "If you're brilliant, work really hard, and earn a world-class doctorate from a US university, IBM has a job for you at one of its US research sites — as a 'complementary worker' (as this 1996 piece defined the then-emerging term). But be prepared to ship out to India or China after you've soaked up knowledge for 13 months as a 'long-term supplemental worker.' Newsweek sketches some of the bigger picture, reporting 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.'"
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IBM, Other Multinationals "Detaching" From the US

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  • by XanC (644172) on Saturday August 22, 2009 @04:53PM (#29157513)

    Instead of blaming them for leaving, why don't we stop chasing them away?

    • by bistromath007 (1253428) on Saturday August 22, 2009 @05:03PM (#29157583)
      Because the stuff that's "chasing them away" is the same stuff that still nominally keeps the American people from being totally subjugated and destitute like the Chinese and Indians are. A corporation has one goal, by law: make money for the shareholders. Once one has grown so large that the vast majority of its competitors are insignificant, the best way for it to do that is to rape the worker and the consumer as hard is it can. Companies aren't going to stop leaving the US until we are so broken by their flight that we are forced to become fascist. We are doomed to this fate. There is nothing we can do about it anymore. But it still bothers me that you're cheering it on with your suggestion that the whole thing is the fault of interference with the free market.
      • by JWman (1289510) on Saturday August 22, 2009 @05:13PM (#29157639)

        Ummm.... what about the second highest corporate tax rate in the world [taxfoundation.org] ? It sits at about 39%. I think that just might have something to do with wanting to leave.

        Corporate taxes are a joke. They just get passed on to the consumer anyway, and they make businesses less competitive internationally. But it is politically rewarding to go after the big evil corporations and for them to pay their way.

        Really, and end to corporate taxes is a big reason why I strongly support the FairTax [fairtax.org] . It would no longer hide the taxes we pay, and special interests would not be able to carve out exceptions for themselves life they do all the time now.

        • by Trepidity (597) <delirium-slashdot@@@hackish...org> on Saturday August 22, 2009 @05:17PM (#29157663)

          You might want to look at the effective corporate tax rate, since no actual corporations pay 39% with our loophole-riddled tax code of exceptions, credits, and deductions. The actual rate they pay [taxanalysts.com] is about 22%, the 2nd-lowest in the developed world (after Ireland).

        • by thetoadwarrior (1268702) on Saturday August 22, 2009 @05:56PM (#29157957) Homepage

          Corporate taxes are a joke. They just get passed on to the consumer anyway, and they make businesses less competitive internationally. But it is politically rewarding to go after the big evil corporations and for them to pay their way.

          Bullshit.

          Are you telling me it's taxes are just enough that Sony has to â299 for the PS3 in the EU and $299 in the US and that it has nothing to do with the euro being worth more therefore allowing them to make a bigger profit for no additional work?

          Or why MS may be raising the price of the of the 360 arcade in the UK depsite the fact manufactuer costs are probably lower as is inflation? I'm sure it has nothing to do with the increase on the pound over the dollar and therefore a small rise means a larger rise in profits. http://www.edge-online.com/news/xbox-360-arcade-getting-a-price-increase [edge-online.com]

          The fact is nothing will ever be good enough for corporations as long as it's cheaper elsewhere. Even if they paid no tax in the US, if the over all cost was cheaper in India they'd go there.

          What they ought to do is allow companies to go where ever they want but the directors have to live where the majority of their employees live.

        • Re: (Score:3, Interesting)

          by Rob the Bold (788862)

          Corporate taxes are a joke. They just get passed on to the consumer anyway . . .

          Q: How do you get a laissez-faire capitalist to stop talking about market pricing, supply and demand, etc?

          A: Bring up taxes or any other cost that he doesn't like and suddenly it gets passed straight through to the consumer.

      • achievable? (Score:5, Insightful)

        by speedtux (1307149) on Saturday August 22, 2009 @05:38PM (#29157809)

        Because the stuff that's "chasing them away" is the same stuff that still nominally keeps the American people from being totally subjugated and destitute like the Chinese and Indians are.

        What makes you think that's achievable? Americans are competing with Chinese and Indians. What possible reason would there be for anybody to pay more to an American worker than to a Chinese or Indian worker?

        Companies aren't going to stop leaving the US until we are so broken by their flight that we are forced to become fascist.

        Companies don't care about fascism. We just need to become cheaper, or we need to help Chinese and Indians become rich.

        • Re: (Score:3, Insightful)

          The only way you can become cheap enough to compete with India and China is if you completely ditch all the achievements of the labor movement throughout the last century - 8-hour workday, etc. At that point, your quality of life will pretty much match theirs as well for the majority of population. Clearly, this isn't the answer.

        • Re:achievable? (Score:4, Insightful)

          by jonadab (583620) on Saturday August 22, 2009 @10:09PM (#29160051) Homepage Journal
          > What possible reason would there be for anybody to pay more
          > to an American worker than to a Chinese or Indian worker?

          In terms of the manufacturing sector, if they can make the same stuff, then there's really no such motive, ultimately.

          Well, to a small extent there is, to cover things like shipping costs (it's slightly better to produce widgets near to where they're going to be sold) and a bit of inertia (relocating a plant costs money, so it's worth a bit more to hire workers where the plant is as opposed to somewhere else, at least in the short term). But these factors only cover a relatively small wage differential.

          Why do you think the US economy has been, for half a century or so, gradually moving away from most kinds of manufacturing?

          Some kinds of services can be outsourced to the third world nearly as easily as manufacturing, but others really can't, or at least not to the same effect. Advertising, for example, needs to be handled by people who know the target market and culture. Design work requires a certain level of education, so even if you hire your engineers in India or China, they're still going to make a good deal more than the poverty-stricken masses you could hire to run manufacturing lines. (In fact, for a lot of that stuff you'd mostly be hiring the kind of people who could probably get H1B visas and work in the US if they were so inclined. That's going to drive wage expectations in a certain direction.) Medical professionals have to be hired in the places where people spend a lot of money on medical care, and the US is fairly high on the list there. And so on.

          > Companies don't care about fascism.

          Actually, they kind of do. On the whole, they're not generally real happy about it, although they prefer it to populism (hello, Latin America) or outright communism (Eastern Europe, I'm looking at you).

          > We just need to become cheaper,

          The market is sorting that out.

          Granted, it would be sorted out faster if the government would stop trying to delay the inevitable (particularly, the shift away from a manufacturing-based economy). I mean, come on, do you really WANT to work in a factory? Let it go, already. There are more worthwhile (and more profitable) things you could be doing with your time.

          > or we need to help Chinese and Indians become rich.

          Define "become rich".

          Because, if you mean "become rich compared to where they were a few decades ago", that's already happened, and continues to happen. The per capita standard of living in China today is much higher than in China fifty years ago, and the same is true in India.

          Of course, it's true in the US as well: fifty years ago, the average US household had one car, one radio, one record player, one rotary phone, no camera, no computer, no shelf full of movies, very few electric kitchen appliances, and only about a 50/50 chance of having a television. Today the average household has slightly more than one car per person over age 15, 2-3 radios per person, multiple CD players, multiple cellphones, several cameras, internet access, a shelf full of DVDs, a counter (or cupboard) full of kitchen appliances, cable and/or satellite television, and a bunch of other junk we don't actually need.

          (It is at this point not difficult to imagine our society reaching the point where attempting to maintain a household at the standard of living that was average in the fifties might put you in danger of having your children taken away by child services. Make it a hundred years instead of fifty and we're probably there now: the lack of indoor plumbing would just about do it, quite aside from everything else.)

          So if you mean "help Chinese and Indians become rich(er) relative to Americans", then that's a different thing. But I don't see how that would create a "reason ... for anybody to pay more to an American worker than to a Chinese or Indian worker". Quite the reverse, in fact.

          And, of course, "richer" in th
    • by King_TJ (85913) on Saturday August 22, 2009 @05:16PM (#29157659) Journal

      I recommend reading a book called "IBM and the Holocaust" (http://www.ibmandtheholocaust.com).

      This is a company that happily accepted huge sums of money from the Germans during WWII to computerize the process of hunting down and exterminating Jews, and even "hardened" several of their facilities so they'd survive Allied bombings. All the while, they claimed to be an American business.

      It's arguable that in a sense, they "left" the United States back then, even if they still retained a big physical presence here. Despite the law preventing IBM from being able to move their profits out of German banks during the war, they STILL happily worked on their projects for them, knowing full-well they couldn't even touch the money for years.

    • by node 3 (115640) on Saturday August 22, 2009 @05:50PM (#29157899)

      Instead of blaming them for leaving, why don't we stop chasing them away?

      How about instead of letting them run off, we impose heavy import tariffs that negate (and then some) any savings? That's what other countries to to keep jobs and wealth in their nation (and it's what we used to do until Ronald Reagan came along).

      This is the fundamental flaw with "free market" capitalism, and this worshipping at the altar of absolute individual (as if a corporation is a human, deserving of human rights!) freedom. It worked for a short while, because there was a lot of room for domestic growth. But once that ran out, those monsters that we unleashed which served us well now must go on and find growth that they can no longer find here.

      20 years ago, the Conservative mantra was "buy 'made in America'", now it's "outsource, baby. outsource".

      The Democrats may not be a whole lot better on this, but at least they *are* better, and one of Obama's promises was to punish companies which move jobs overseas. Hopefully we can get the healthcare issue taken care of so we can move onto this. Although, looking at how the Republicans have gotten people to take up arms in protest of giving them healthcare, I don't think they'll have any problem convincing the peanut gallery that keeping jobs in America means slave labor camps or some such nonsense.

      • by FooAtWFU (699187) on Saturday August 22, 2009 @08:02PM (#29159153) Homepage

        The idea that "import taxes will fix everything" is bogus magical thinking, because "jobs" aren't what makes a country rich. Wealth, ultimately, is something that you have (or possibly something that you experience) and the US imports a lot of Things from overseas and there ends up being more stuff for everyone. Forcing Americans to pay top dollar (or pay penalties) for American labor and American factories for their shampoo and their cars and their Ikea furniture does not mean that people in America will end up with more cars and shampoo and Ikea furniture.

        Economic studies have shown that your typical $50k/yr manufacturing job "saved" by tariffs costs the rest of the economy over $100,000-$200,000/yr. That's no way to make your country wealthy. And in the intermediate-to-long run it probably won't mean half as many jobs as it means "robots".

        And in the case of IBM employees, don't try to sell me baloney that says they're being "exploited" like a sweatshop. Mmf.

      • Re: (Score:3, Insightful)

        by ShakaUVM (157947)

        >>The Democrats may not be a whole lot better on this, but at least they *are* better, and one of Obama's promises was to punish companies which move jobs overseas.

        Are you serial?

        Obama's plan was to tax American corporations for outsourcing, which would have the effect of them moving overseas entirely. It's one of the most fucktarded ideas ever conceived.

    • Re: (Score:3, Insightful)

      by hairyfeet (841228)

      And how do you propose we do that? Allow them to dump toxins into YOUR backyard? Maybe bring back the 'good old days" of sweatshops and child labor?

      These assholes aren't leaving us for the EU, which also disallows dumping of toxins and worker abuse. Nope, they are going to the good old third world, where they can poison and abuse to their evil little hearts content. And considering the companies history [ibmandtheholocaust.com] of putting profits above everything, including human lives and suffering, i say good fucking riddance. Do

    • by catchblue22 (1004569) on Saturday August 22, 2009 @09:29PM (#29159801) Homepage

      Following the Great Depression and World War II, the leaders of our society decided to start taxing the wealthy more and more, while using that money for the betterment of society as a whole. It was called the New Deal. And this policy worked quite well, propelling America into a period of rapid economic growth, while at the same time creating a profound sense of economic security for the middle class. Vacation pay became the norm (it largely didn't exist before the Great Depression), and middle class Americans had enough disposable income to spend on luxuries like vacations.

      This system was made possible by several other policies that prevented the rich from quickly withdrawing their money from the country. If you were wealthy in the UK in the 1950's, it was extremely difficult to get your money out of the country. It became common in this period for rich British citizens to build huge sailing yachts, which they sailed to other countries and then sold. They used their boats as a store of their wealth (read Myles Smeeton's Once is Enough for a story of one such couple).

      Then came the right wing "neo-liberal/neo-conservative" politicians. When they got into power, one of the first things they did was to remove the barriers to capital mobility. Money was able to flow almost completely freely across national borders. This has brought economic growth for some, especially in countries like China. But it has also ensured that the countries that originally used taxes on the wealthy to ensure a healthy middle class were at a huge disadvantage. Rich individuals have withdrawn their money from America, and invested it in countries like China.

      What many of us don't realize is that the complete and free mobility of capital will lead to the virtual disappearance of the American middle class as we have seen it over the past four decades, because it will ensure that money will flow away from countries with high taxes towards productive countries with low taxes. The country will increasingly look like Britain in the 1800's during the beginning of the industrial revolution (i.e. the world of Oliver Twist). There will be a very wealthy class. And there will be a worker class, which will comprise the vast majority of the population. Things like vacation pay, comfortable pensions, affordable quality health care, and disposable income will slowly but surely disappear for the vast majority of the former middle class. I am not prophesizing this; I am watching it happen before my eyes. IT IS ALREADY HAPPENING! Take an honest look at America right now, and tell me that our standard of living isn't slipping. And this at a time when we have never been able to make products more efficiently!

      And to those of you who reflexively demonize those like me as "liberals", ask yourself this question? Are you a Billionaire? If not, then why are you thinking like a billionaire? Why do you think that lower wages for most of society is in your interest? Why do you think that taxing billionaires and spending that money to build roads isn't in your interest?

      Do you think that the $20000 you have invested in stocks will pay for your comfortable retirement? What you seem to forget is that the billionaire who owns $200 million of those same stocks will make slightly more than you. And he will use the money he makes to buy even more stocks. Meanwhile, you, with your ever decreasing salary will have less and less disposable money to invest.

      • by Bob9113 (14996) on Sunday August 23, 2009 @05:20AM (#29162125) Homepage

        Following the Great Depression and World War II, the leaders of our society decided to start taxing the wealthy more and more, while using that money for the betterment of society as a whole. It was called the New Deal. And this policy worked quite well, propelling America into a period of rapid economic growth, while at the same time creating a profound sense of economic security for the middle class.

        Your post presents a very important issue. I want to provide citation to reinforce your point.

        To those who doubt the above. Please first take a look at the calculation of "Marginal Tax Rates":

        http://en.wikipedia.org/wiki/Marginal_tax_rate [wikipedia.org]

        Specifically, please note:

        "The marginal tax rate may increase or decrease as income or consumption increases, although in most countries the tax rate is (in principle) progressive. In such cases, the average tax rate will be lower than the marginal tax rate: an individual may have a marginal tax rate of 45%, but pay average tax of half this amount."

        Now consider the marginal tax rate calculation for the labor tax code of 1954. A few months ago I added the column for GDP adjusted income. That column is misleading. The correct deflator to use when adjusting individual income is PPC (Product Per Capita, AKA: GDP Per Capita)

        http://en.wikipedia.org/wiki/Internal_Revenue_Code_of_1986 [wikipedia.org]

        Now consider the marginal tax rate calculation for the labor tax code of 2003 (the most recent year for which Wikipedia has the table):

        http://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2003#Single [wikipedia.org]

        Now, calculate the actual tax rate tables, being careful to apply marginal tax calculation.

        Where do the tax lines cross? Above what level are you better under our current tax policy than during the period of greatest economic expansion in United States history? Or, conversely, below what income level are you worse under the current tax structure than during the period of greatest economic expansion in United States history?

        The answer was a bit of a surprise to me. It is $251,000. That is the inflection point. Why does that surprise me? Two reasons: First, it's a bit lower than I thought (I had been mentally using GDP until tonight -- but that is not the correct deflator for income per person). Second, and more importantly, it is the number Obama has used several times when referencing the dividing line between rich and not rich. Is that intentional? Did he (or his economic advisor) reach that conclusion by doing the exact same calculation? Perhaps -- given that 250,000 is a number commonly used when pulling figures out of one's ass, it is entirely possible that it is just coincidence. Still, it makes me wonder...

        But I digress. In short, people making less than $250,000 (about 95% of the population) are paying a greater percentage of their income as taxes than they were during the greatest period of economic expansion in United States history.

        Said differently, people making more than $250,000 (about 5% of the population) are paying a lesser percentage of their income as taxes than they were during the greatest period of economic expansion in United States history.

        Please note: This is assuming that you completely discount capital gains, the distribution and tax policy changes of which shift the inflection point much further in favor of the very few, very wealthy.

        One More Time: During the greatest period of economic expansion in United States history our tax policy was enormously more progressive than it is today.

        For further reading, including statistics that show the gargantuan concentration of wealth that has occurred as the tax policy shifted, see Piketty Saez 2007.

    • by HanzoSpam (713251) on Saturday August 22, 2009 @10:55PM (#29160289)

      Instead of blaming them for leaving, why don't we stop chasing them away?

      I have a better idea - bar them from operating in the US altogether, and give their smaller competitors an opportunity to fill the void.

    • by erroneus (253617) on Saturday August 22, 2009 @11:16PM (#29160395) Homepage

      Chasing them away? They seek lower "labor overhead" and they are getting it overseas. Taxes are far from the only and certainly not the most important reason for what we are seeing. We limit the amount of cheap labor they can import and punish them for breaking the law when they abuse the worker import programs.

      It seems to me that being a bit more protectionist rather than less is an appropriate measure. Take away more than their foreign workers -- take away their government contracts and their right to operate in the U.S. entirely. Sure they might survive even under those circumstances, but the U.S. is STILL likely to be their biggest customers.

      We have a horrible imbalance of wealth in the U.S. that people don't like talking about. We've heard about the disappearing middle class but no one seems to be listening or caring. The problem is that the stuff that is being sold is less and less affordable by the people in the U.S. For the past 20 years, people have failed to notice it because we've all been practicing "Reaganomics" or "debt financing" or "deficit spending" or however you prefer to phrase it. Instead of having a savings and an investment portfolio, the average American doesn't even have more than $2000 in the bank at any one time living paycheck to paycheck and trying to keep their credit cards paid. That can't work for much longer as people are making less and less money.

      The free market without controls and preventative measures allows unscrupulous people to get away all sorts of evil things. Greed knows no limits and greedy people know no limits. Screaming for "more free market" is just a cry for "please look somewhere else while I pull another Enron or Madoff!" The free market forces leading to the brain drain in the U.S. has been weaking this country for a VERY long time and we're just about to hit the bottom that the few have been warning everyone about. The U.S. won't be #1 much longer and we can see why.

  • So? (Score:3, Insightful)

    by mosb1000 (710161) <mosb1000@mac.com> on Saturday August 22, 2009 @05:01PM (#29157567)
    And your point is? Maybe we should prohibit these businesses from operating in the states. Oh wait, that's why they're leaving. . . And that's the problem.

    Patriotism is a highly overrated trait in anything/anybody. If it's better to leave, why stay?
    • Re: (Score:3, Insightful)

      by bagorange (1531625)
      The point is that people have been told for the last 30-40 years that "business" (whatever that actually means) is intrinsically good for the western world. Many people believed this, and now they are surprised.
    • Stop running trade deficits. Tariffs against lopsided trade are not the big evil that right-wing economists say they are. If other countries stopped running trade surpluses with us, they'd have to create a stronger local consumer class, which would start to even out monetary differences and even out imports. Balance balance balance.

    • Re:So? (Score:4, Funny)

      by Trepidity (597) <delirium-slashdot@@@hackish...org> on Saturday August 22, 2009 @05:31PM (#29157759)

      I'm pretty sure if we actually "prohibit[ed] these business from operating in the states" that they'd go bankrupt pretty quickly: IBM would not last a month if it were prohibited from selling products or services in the United States.

  • by Anonymous Coward on Saturday August 22, 2009 @05:02PM (#29157577)

    They are multinational corporations... what kind of national loyalty are we expecting from them?
    They behave exactly as legislation allows them to behave. If you don't like it, change the legislation.

  • by Nerdfest (867930) on Saturday August 22, 2009 @05:07PM (#29157599)
    Large corporations are not good citizens and care little about the welfare of the nations that created them. I've heard them described as sociopathic is nature, which is probably quite an accurate description. They rarely have any long term vision in most cases and only seem to look a quarter or two ahead to make investors happy. Limiting their greed just slightly compared to their competitors might earn some good will in the future, but even that seems to be beyond most corporations.
    • by speedtux (1307149) on Saturday August 22, 2009 @05:43PM (#29157847)

      Large corporations are not good citizens and care little about the welfare of the nations that created them. I've heard them described as sociopathic is nature,

      What definition of "good citizen" would that be? Someone who turns down a high paying job abroad and works on a low paying job in his country of birth? Why is that good? Do you know anybody who actually behaves that way?

      Plenty of people leave their home nations because they get a better paying job or a higher quality of life elsewhere. America has benefited tremendously from that because so many exceptionally skilled people have come to the US from other nations.

      Of course, as the US becomes less attractive to individuals and US immigration becomes ever more tighter, corporations are leaving as well. It's simple, rational behavior, and both corporations and individuals behave accordingly.

    • Re: (Score:3, Insightful)

      by JanneM (7445)

      Large corporations are not good citizens and care little about the welfare of the nations that created them.

      Um, most citizens are not good citizens then. And if a corporation shifting their focus to foreign markets is somehow unpatriotic, do you feel the same about individuals doing the same?

      I have left my country of birth - the country where I I grew up and got my education - to work and live in a different country. I still like my old home, and I still "do business" there, but my work is certainly mainly

  • by Tokolosh (1256448) on Saturday August 22, 2009 @05:12PM (#29157635)

    The Egyptians complained about the English "stealing" their cotton spinning and weaving business. The English complained about the Yankee New Englanders, who complained about the Southerners, who complained about the Mexicans, who complained about the Malaysians who are complaining about the Chinese and Indians.

    When I say "complained", I mean passed laws and regulations, imposed sanctions, taxes and duties, fought wars, battled smuggling, and whined.

    In the long run, the laws of econonics ALWAYS win. The US should fix the causes, not the symptoms.

    • by br00tus (528477) on Saturday August 22, 2009 @08:19PM (#29159243)
      Regarding your example, England and the US South wanted free trade with each other, with the backwards South supplying raw cotton material to industrialized England for processing, while the US North wanted "laws and regulations, imposed sanctions, taxes and duties" to protect its growing industrial base. The result of this was a civil war in which the industrialized north beat the rural south (a south which couldn't trust a quarter of its population). Afterward, the sanctions and duties only increased. What was the result of this? Today the GDP of the US is five times that of the UK.
    • by demachina (71715) on Saturday August 22, 2009 @08:30PM (#29159351)

      "The US should fix the causes, not the symptoms."

      I'm pretty sure that entails:

      - Reducing the wages of most workers to the vicinity of a dollar an hour, maybe $10 an hour if you are highly educated and skilled, and maybe get work weeks up to around 70 hours with no vacations and no overtime pay.
      - Eliminate all taxes on corporations and reduce taxes on the wealthy below 15% which is where it already is on capital gains and billionaire hedge fund managers. They also don't want to pay any payroll taxes or health insurance. Taxing workers making a subsistence wage in to the ground is still OK as long as they don't pay any of it.
      - They want their taxes eliminated but they still want the government and tax payers to give them billions of dollars in government contracts, bail outs, low interest loans, free money from the Fed, subsidies, etc.
      - They want schools that drill their workers intensively for about 16 years in math, science, computers and obedience. Don't bother with arts, independent thinking or creativity... kind of like "No Child Left Behind" on steroids.
      - They would probably favor a totalitarian regime as long as its pro multinational, basically Fascist leaning as long as the party is their friend and makes them lots of money. Two ideal examples of perfect governments for multinationals are the new China and 1930's Germany. And yes IBM did love the Nazi's in the 1930's too. They want their workers thoroughly cowed, subservient, afraid and most definitely not organized.

      The best fix for these American idiot CEO's, out to make a quick bug with no regard to long term consequences, is to strip them of their citizenship, and deport to them to their new corporate headquarters in China and India. I think once they get to live in China full time, with no ticket home to the U.S., and get to endure the repression, censorship, corruption like a real Chinese citizen, they will change their tune. They will especially realize their mistake when they get on the wrong side of a party boss or a company owned by powerful party members. Right now China is nice to them and is kissing their asses while they turn over all their capital, jobs, IP and market access. Chances are once they have all those and have their own version of IBM, owned by powerful party bosses, like Lenovo, they will completely destroy IBM and every other western corporation who sold their long term survival down the river for a few years of cheap labor, illusory access to China's markets and short term profit.

  • Isn't Chinese Law (Score:3, Insightful)

    by rolfwind (528248) on Saturday August 22, 2009 @05:17PM (#29157667)

    that any factory or venture in China must be at least 51% domestically owned, such that they always will have the power?

    Can't help but think that all these companies are building up their own competition... when China decides the dollar isn't that great anymore and that they've sucked out all the knowledge needed of the US and other 1st world countries to be on par with them.

    Not that US companies alone can be blamed, the US consumer, with their rush to the cheapest priced options, by and large, contributed to this cycle.

    • Re: (Score:3, Insightful)

      by Rand310 (264407)

      China is a fool's bet right now. Unless a person has lived there or worked directly with a Chinese company for more than a year, they are simply not qualified to assess the benefits of Chinese economics. It's many many years behind where most people think it is. And that deception is intentional. It's amazing how many get repeatedly burned looking for the magic billion-man market.

    • by jonpublic (676412) on Saturday August 22, 2009 @06:07PM (#29158073)

      I don't blame the consumer. I blame the people who wrote the trade laws that allow for slave labor to have equal playing field. Those trade laws completely destroy the fundamental American principle of freedom.

      I blame the trade laws which basically guarantee that if you build a product in a responsible manner, it's not going to succeed, because the people who ignore environmental and safety standards can build it cheaper.

  • by ThousandStars (556222) on Saturday August 22, 2009 @05:24PM (#29157717) Homepage
    ... or lack thereof, one might say.

    The best thing we could do if we don't want IBM and other companies going abroad is what John Doerr and Thomas Friedman have suggested [nytimes.com]:

    We should be taking advantage. Now is when we should be stapling a green card to the diploma of any foreign student who earns an advanced degree at any U.S. university, and we should be ending all H-1B visa restrictions on knowledge workers who want to come here.

    Because it's often difficult or impossible to import international engineers and scientists with valuable or unusual skills to the United States, the logical alternative is to go to where they are. Want this kind of behavior on the part of IBM and others to, if not stop altogether, then at least to slow? Implement Friedman's suggestion. Otherwise, don't implicitly (or, in the case of many commenters on this thread, explicitly) complain when companies react to the conditions that politicians, and by extension voters, have placed on them.

    • by ClosedSource (238333) on Saturday August 22, 2009 @06:07PM (#29158061)

      I think this idea of a lack of engineers with "valuable and unusual skills" in the US is more myth than reality.

      The primary value that the H-1B program has for companies is economic. If you convert these workers to citizens, you'll have to pay them competitive wages and they'll be free to change jobs. Not much economic value there.

      It's funny how people complain that illegal immigrants are cutting to the front of the immigration line but there's always a place for athletes, actors, and celebrities to go to the front. Of course, there really isn't a line anyway.

    • by winwar (114053) on Saturday August 22, 2009 @07:02PM (#29158653)

      "Because it's often difficult or impossible to import international engineers and scientists with valuable or unusual skills to the United States, the logical alternative is to go to where they are."

      Do you really seriously believe this? Can you give even one example of such a case?

      You don't set up shop in India because you want a couple of great Indian workers. You set up there because you can get lots of engineers-in-a-box CHEAPLY. You may also want to do business in the region (or already do).

      There are no shortage of qualified people (or those willing to be trained) in the US. There is a shortage of qualified people who will work cheaply. In general, large companies don't hire great people, they hire cogs in a machine.

      It's about the money.

  • by B5_geek (638928) on Saturday August 22, 2009 @05:27PM (#29157735)

    In 1965 Canada brought into law the "Auto Pact" ahref=http://www.canadianeconomy.gc.ca/english/economy/1965canada_us_auto_pact.htmlrel=url2html-14781 [slashdot.org]http://www.canadianeconomy.gc.ca/english/economy/1965canada_us_auto_pact.html>

    It basically states that for every car bought in Canada, one car must be built in Canada.

    (In 2001 it was abolished because it infringed on NAFTA.)

    This policy works for everybody except the greedy CEO's. Any manufacturing industry could be converted to this setup.

    • by 0123456 (636235) on Saturday August 22, 2009 @05:32PM (#29157763)

      This policy works for everybody except the greedy CEO's. Any manufacturing industry could be converted to this setup.

      No, such a policy works for no-one other than greedy auto workers; everyone else has to pay higher prices for lower-quality cars, since without competition the auto companies will just sell expensive crap.

    • by speedtux (1307149) on Saturday August 22, 2009 @05:59PM (#29157979)

      That policy works until other nations start retaliating against your primary export.

      Canada managed to get away with it for a while because Canada isn't that significant in international trade and primarily trades in raw materials. But, in the end, even Canada preferred free trade over protectionism, which is why it joined NAFTA.

  • by jonpublic (676412) on Saturday August 22, 2009 @05:31PM (#29157753)

    This is what our factories have to compete with. Plants which poison children.

    http://news.yahoo.com/s/ap/20090820/ap_on_re_as/as_china_lead_poisoning [yahoo.com]

    Laws that protect us from this kind of behavior add costs that push companies to these countries.

    Democracy isn't cheap.

    • by drinkypoo (153816) <martin.espinoza@gmail.com> on Saturday August 22, 2009 @06:25PM (#29158293) Homepage Journal

      Laws that protect us from this kind of behavior add costs that push companies to these countries.

      And here we find the weakness in capitalism — the tyranny of the masses, who want cheaper and cheaper DVD players and disposable razors, and don't care how many twelve year olds have to work in sweatshops to deliver them. (Me too. I'm trying to be better, but my habits are very bad. Like most of us.)

    • Re: (Score:3, Insightful)

      by FooAtWFU (699187)
      Manufacturing is one thing, but the software developers at IBM's China Development Labs aren't known for giving kids lead poisoning, and they still have plenty of "offshoring" hate. I don't think there's too much "exploitation! sweatshops!" there either.
  • by Xenious (24845) on Saturday August 22, 2009 @05:38PM (#29157815)

    Isn't the real fix that we improve the countries they are outsourcing to until the economy there demands the same as US salaries? At that point geography becomes the benefit instead of dollars and they want to hire the guy closer to "home."

  • by JoeCommodore (567479) <larry@portcommodore.com> on Saturday August 22, 2009 @05:42PM (#29157843) Homepage

    So after they move out what will keep them doing to the US what they do to other countries - exploit countries resources for profit. As we were the home to these greedy groups we have been pretty much insulated as they didn't rock their own boat. But if they are based outside of the US, kinda cleans off that slate and opens us up as a whole new market to exploit, don't you think?

  • by Eravnrekaree (467752) on Saturday August 22, 2009 @05:55PM (#29157955)

    I find the fact that corporations such as this, especially in a time of economic hardship, are basically harming american workers and showing such contempt for the USA, to be greatly offensive and angers me to no end. i think its time that we detach from china and india which has basically decimated Americas economy and who have stolen our jobs. I think its clearly time that we need to stop allowing these companies to abuse the USA looking at it as only a market to sell their overpriced chinese crap, and start creating jobs here again. Globalisation is such a big scam its ridiculous, its destroying this countyr and allows these greedy companies to basically exploit slave labor in china. The US should and can, and must for its survival, implement a tariff on imports of cars, textiles, furniture, IT services, customer service calls to India and China, etc, and so on. When we have 15% unemployment in reality and people struggling to find work the notion of any company moving jobs somewhere else really should cause a revolt from americans and demands to implement tariffs. Its time to get past this irrational hysteria about tariffs. Tariffs are good and can help this countries economy rebound. There is nothing wrong with it since it simply allows americans to make products for other americans. Think about it, why cant the chinese make things for other chinese, and americans make things for other americans. it would be better for the chinese of the products that chinese workers stayed in china to benefit to the people there. It would be better for americans to create more jobs in the US making products for use by americans. The only people that globalisation benefits is the wealthy rich elite corporations who important products made by employees in slave labor camps in china making a few cents an hour, living in filthy dormitories, who are treated in the most inhumane way, beaten, and even not allowed to use the restroom, with litany of human rights abuses, the products these slaves make are then sold off at a 100% markup in the US and the wealthy elite take the profit. Both the american and the chinese worker are the losers. Globalisation is what has allowed as well corporations to basically dictate to countries basically how they will treat workers and the environment and rewards countries which allow their environment and workers to be ruthlessly exploited by massive global corporations. This is a system where massive global corporations get their way and make the laws through making countries compete against each other to see who can allow their employees to be treated in the most inhumane way. Through the global consolidation and globalisation the corporations are able to control markets resources, jobs, and so on in many different countries and operate as sort of transnational governments. Through this we are seeing a new world order emerge where the governments of countries are simply puppets of a powerful fascist global corporate order who controls wealth, resources, jobs, markets, capital, etc.

    If we value our freedom, we need to implement tariffs which would give our own worker welfare laws, our own democratic state, some force and allow us to implement unions without the corporations threatening to move jobs to other countries. If you want to be treated like a decently like a human being, to have a good life and to be paid decently for decent work, we desperately need to implement broader democratic unions which allow employees a democratic vioce where they can act as a safeguard against mistreatment and slave wages. Unions are essential to our economic recovery and for stopping the destruction of the middle class. The unions built the middle class in the USA and ironically created a middle class that had the spending power which made companies like IBM so successful. Unions are essential for workers to have decent wage since it more often than not is the tendancy of corporations to pay workers as little as they can, leading to a vast impoverished state in the economy. Its just shocking and disgusting tha

  • Some Perspective (Score:5, Interesting)

    by Anonymous Coward on Saturday August 22, 2009 @06:17PM (#29158201)

    Look I am an Indian, and I think that there are a few things all of you need to know.

    America is not going anywhere for now. The fundamentals of your future lie in the hands of your people, especially the select few who have a vision and can buck the status quo. As long as you have plenty of such individuals you are going to weather any geo-political storm.

    Whereas in my nation life is so linear that it is a goddamn joke.

    Almost every kid is expected to be an engineer and most of these engineers hardly even know what the hell they are talking about. As Feynman would say their knowledge is fragile.

    Our educational system itself is a joke. Trust me on this.

    At the same time entrepeneurs are discouraged and looked down upon. They are sorta treated with ice, as everyone wants a *son* in an MNC with a prestigous MBA. So, basically our society is choking itself. Sure, these people are awesome paper pushers, but despite the fact that some of them do have a decent brain they all seem to fail to do anything different.

    No revolutions are put into motion. No brilliant new synthesis are formulated. No groundbreaking patents are filed. In short, the truly important stuff is in stasis.

    Your society whereas pushes its outliers and that is why, as Kay once put it, most software is written on one side of the atlantic. I think that you should stop looking at IBM and start looking at MIT. That is where your future lies.

    And seriously drop all of that economics mumbo-jumbo. As the foundations of society are the ability to create things, transport those things and dessiminate them. I think that those earning a living by making a killing in stocks are living a sham.

    Oh and Thomas Jefferson would kill himself if he saw Bush in action. Despite his failings Obama is, at least, a breath of fresh air. So, value him for that. At least he had the courage (unlike me) to step up to the plate.

    P.S. - /.s javascript is screwed, haven't they heard of simplicity?

    • Re: (Score:3, Informative)

      by WindBourne (631190)
      While much of what you say is CURRENTLY true, India has a number of things in their favor, with several being foolish on our part:
      1. The biggest is India's money is fixed against the dollar and we are not screaming that it should be freed. Without a true free market, then it is IMPOSSIBLE for conditions to adjust. This is the worse thing that is happening.
      2. India has trade barriers against the west (interestingly, they allow most other nations to have free trade). With those barriers in place, free market can
  • You've heard of offshoring labor to a foreign nation for a lower cost in labor?

    International Corporate Evolution is the new trend. When in a nation with a bad economy offshore the entire company to a richer nation like in the EU that has a lower corporation tax and a lower tax on the wealthy.

    You see labor needs to be offshored to the lowest cost third world nation like China, India, Thailand, Russia, where the cost of labor is low. That is the first step in International Corporate Evolution.

    The second step is to expand your business to a foreign nation to compete with other corporations in foreign nations. If a company does not do that, foreign companies might move to their nation and buy them out (ala Anhiesier Busch Beer) or expand and build a company right next to yours and try to shut yours down. It is like a game of corporate chess, you need to move a piece to their location before they move a piece to your location and checkmate you.

    The third step is to offshore highly talented employees (like with PHDs and tons of experience) and management to a nation that is wealthy and has a good economy but has lower corporation taxes and lower wealthy taxes. Move the bulk of your local company to that nation and downsize any employees that aren't as valuable.

    The fourth step is closing down buildings in the local nation that has the bad economy and high taxes.

    The fifth step is moving back to that nation after the bad economy has recovered and tax rates have been cut again and bringing the talent back with you. But if the economy does not recover and the tax rates are not cut, this is like a strike against the government to offshore the entire company to punish them for higher taxes and ruining the economy.

  • by dtjohnson (102237) on Saturday August 22, 2009 @07:22PM (#29158821)

    These companies never 'detach' from the capital and credit markets that they need to stay in business. They enjoy access to free and fair markets supported by the U. S. Constitution. Investors and lenders to such companies depend on financial and accounting standards along with required public disclosures of financial information. When someone threatens to steal their IP or violate a contract they are a party to, they expect access to a fair and impartial court system backed by a stable political system. Let's see them 'detach' from those things...not likely. Being located in the United States is an enormous advantage for these companies and they know it. They just don't want us to know it.

  • by WindBourne (631190) on Saturday August 22, 2009 @07:22PM (#29158823) Journal
    In particular, India and China having their money fixed to ours. If not, then why not Europe or Russia? The simple fact is that IBM, GE, and others are exploiting the fixed money difference and the west is allowing itself to be destroyed. Unless the WEST decides to work together to stop these nations from having an unfair advantage, then there will NOT be a fair competitive market. And without that, more and more IP will simply flow to these nations. Keep in mind that BOTH china and India are pushing to obtain all of our IP related to tech (such as nukes or military or tech or pollution control, etc) and are simply stealing it if they do not feel like paying for it.

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