My argument is that “Sending jobs abroad saves jobs”; or put another way, “Save jobs by sending jobs abroad.” The phrase “Send jobs abroad” during an election is just as divisive as the issue of abortion. The idea that sending jobs abroad can save jobs in the United States goes against all reason, so how can this be? If you are a union member, factory worker, administrator or manager in the United States, this article is for you.

There was a very effective negative TV commercial that aired during the California Senate race between Barbara Boxer and Carly Fiorina. The ad mentioned the alleged 30,000 jobs Fiorina sent overseas while the CEO was at Hewlett Packard from 1999 to 2005. What the ad failed to mention was that when Fiorina did this, the economy was experiencing the dot-com and tech crash during the 2000 recession. Not to mention there were 911s that also set the economy back. In October 2009, Hewlett Packard employees numbered more than 304,000; a dismissal of 30,000 people would have been around 10%; Sounds reasonable. What the article failed to mention was the fact that she also cut 3,000 drive potions.

A CASE TO SAVE JOBS BY SENDING JOBS ABROAD: Why have companies made the painful decision to take their production abroad? As hard as it may be to believe, shipping production from the United States to another country to reduce the “Cost of Goods” is nothing new. The 1960s brought us an explosion of Made in Japan products. In the 1960s, shortly after World War II, “Made in Japan” had a negative connotation. The aerospace industry shipped components to Mexico for assembly in the 1970s. In the mid-1980s, Wal-Mart’s “Made in America” ​​slogan changed forever. Wal-Mart’s economies of scale and distribution made too much sense for Wal-Mart to become 10% of China’s GDP. The 1990s brought us the “North American Free Trade Agreement.” It is obvious that the American industry has always focused on reducing material costs and finding a source of cheap labor.

Businesses have always been focused on operational efficiency. Unfortunately, process efficiencies like the wave soldering machine and auto insert machine have eliminated millions upon thousands, if not millions of jobs. These two machines eliminated the welder’s career in the electronics industry. These two machines are a perfect example of how American factory workers have been replaced by efficiency. The impact these innovations continue to have on the electronics industry is priceless. It is not a question of going abroad; it is good management.

Using Case Study No: 1 as an example, we can see how a Toronto-based loudspeaker company could not be competitive using its own resources. Although they were vertically integrated, the cost advantage could not compete with the low cost of Asian labor. His labor rate couldn’t be competitive, even with his manufacturing advantage. Their domestic labor kept them out of the market. The combined vertical integration and expensive labor created a situation that made their products too expensive for the market, resulting in lost sales. The Toronto-based loudspeaker company knew it needed to go overseas and have its product made “turnkey” (completely finished), to compete in a market with tight margins.

The jobs that are saved by sending a product abroad are the following:

• Engineering: These positions are retained when jobs are shipped overseas because it would be unwise to entrust their engineering to another company. Responsibility against risk would not have few advantages. Companies are marketing, “Designed in the USA.” Radio Shack labels its products as “Assembled in the United States with domestic and foreign parts.” They also label their product with the country of origin of the 100% foreign manufactured and assembled product.

• Industrial Designers: These positions MUST remain in the United States because our domestic market does not accept designs outside of Asia. American design will always win over Asian design. Simply put, domestic designers have a better idea of ​​American trends than an industrial designer in a factory somewhere abroad.

• Sales and Marketing: These positions are kept alive by having products that are competitive in the marketplace.

• Shipping and Receiving: For obvious reasons, these positions are held as product flows from the factory to the warehouse and back to the retailers.

• Order Entry, Customer Service, and Accounting Departments: These departments keep busy with their regular flow of paperwork. However, without competitive prices for their products, these departments could experience layoffs.

There is a win-win scenario for shipping a product abroad that works for everyone:

• Maintain high-margin products in the United States. Although the profit margin will be higher, the volume will be lower, it’s just a fact.

o Transition abroad of the product of high volume and low margin. This keeps our national workforce producing high-margin items.

o The level of factory domestic workers can be adjusted according to the prevailing time and volume.

• Product development has always been a matter of resources, engineering resources, factory resources, availability of high-tech equipment, quality control facilities, etc. Taking a product abroad can be a logistics solution. Depending on the size of your company, will you be more likely to determine the availability of such resources? However, taking your product abroad gives you instant availability of resources that you didn’t have at home.

o The quality of your product can really improve. The factories you would choose to manufacture your product will be more than an ISO9000 factory. There will be procedures built in that won’t let your product go astray and be a loser.

o Because it will have specified the “Quality Assurance” procedures for the inspection leaving the factory. If the incoming inspection team on the domestic side finds that the product is outside of the agreed quality control standards, the entire lot is rejected. Now that’s risk management at its finest.

• The business has always been focused on operational efficiency. Process efficiencies, such as the use of a wave soldering machine, automatic insertion machine, or robots

o These efficiencies will only allow US industry a higher labor rate, up to a point. The construction industry reduces its labor costs by manufacturing the product in the shop and bringing it to the construction site for assembly at a higher labor rate. However, we have finally reached a point where higher technology and labor are either affecting cost and moving production, or a portion of production abroad becomes a necessary component of the modern business model.

Hurt feelings in America! Shipping Jobs Offshore! It has become more of a hot political issue than a reality. For more than half a century, the United States has been importing products from other countries. After World War II we were importing cheap products from Japan. Since then, we have imported products from Korea, Taiwan, Mexico, the Philippines, Malaysia, Vietnam, Singapore, just to name a few. The question is: In which third world country will the United States settle?

It has always been our way (those of us who build products outside of our borders), to retire and move to another country once we raise the local standard of living and labor costs get too high. Time and time again, overseas manufacturing has picked up and moved to countries with an alternative labor source. We tend to withdraw and exploit various third world countries. It’s not just Americans doing this, after all, we are a global economy.

The bottom line is that we all have compassionate hearts and we hate the idea that someone might suffer if they lose their job. However, shareholders are those whose best interest should be of utmost concern. If there are teams that can increase efficiency, then it is everyone’s responsibility to take the suggestion to management.

Making sure the company stays competitive in the market should be job number one!

CASE STUDY No 1: The speakerphone industry in North America was, at one time, an industry that employed thousands of employees. From the factory workers to the support staff that accompanied them, the audio industry was an American industry. It still is, but it’s different than it used to be. The “After Car” audio market, for a long time, had to carry the “Made in USA” label. Once Wal-Mart made the decision to purchase products abroad with the intention of hitting certain price points, “Made in the USA.” ceased to be important.

This mentality is the reason why the speaker industry in the United States. The audio industry was forced to go overseas to hit a price point. The reasoning was to stay in business by outsourcing the product rather than lose sales because price points could not be met. There are no longer any speaker cabinet manufacturers in the United States or Canada. The last of the speaker cabinet manufacturers in Canada, Audio Products International, put their manufacturing line on “mothballs” around 2005. They are now purchasing their speaker cabinets out of China as a turnkey product. The problem they ran into was that the in-house manufacturing costs of the speaker cabinets were forcing them out of the market and they could no longer compete.

CASE STUDY No 2: The electronics industry is no longer what it used to be. As a kid in the early 1960s, I remember picking my mom up from work with my dad. What I remember is all the women, in a room the size of a warehouse, welding all day. The company my mother worked for was Teledyne.

Those jobs fell by the wayside with the advent of the Wave Solder machine. Wave (flux) soldering machine is a bath of molten solder. The printed circuit board is then moved along a carriage that allows the electronic components to be immersed in this pool of molten solder; being sold automatically. The resulting quality is better and the use of the Wave Solder machine is reduced in labor by at least 80%.

The automatic insertion machine was the next process efficiency that would change the face of electronics forever. An average automatic insertion machine will fill 25,000 electrical components in an eight hour shift. The difference between a factory worker filling the pcb and the automatic insertion machine is exponential. Hundreds of thousands of jobs were replaced with the development of the automatic insertion machine.

The design and use of wave soldering and automatic insertion machines were not intended to put more than a million soldering positions out of work, but rather to reduce labor by creating efficiencies. However, the decisions to use these machines were driven by the assumption that not using them would put them behind the competition, who would certainly be using them. The fear of not being competitive was a driving force. It wasn’t about saving welding positions; it was about staying competitive in their industry. Management has always been focused on efficiency and getting the best return on shareholder investment.