The President On Outsourcing

By February 23, 2006General

The President was across town speaking to the Asia Society yesterday, focusing on his upcoming trip to India and Pakistan. He talked of steering clear of “protectionist policies” (are you listening, Lou….?) and talked about the interconnectivity of it all, and how this is good for US companies large and small. Here’s an excerpt from his remarks from yesterday. We pass them along because we thought they captured pretty well the up side of world trade, something the MSM tends to ignore.

The area of America’s relationship with India that seems to receive the most attention is outsourcing. It’s true that a number of Americans have lost jobs because companies have shifted operations to India. And losing a job is traumatic. It’s difficult. It puts a strain on our families. But rather than respond with protectionist policies, I believe it makes sense to respond with educational polices to make sure that our workers are skilled for the jobs of the 21st century.

We must also recognize that India’s growth is creating new opportunities for our businesses and farmers and workers. India’s middle class is now estimated at 300 million people. Think about that. That’s greater than the entire population of the United States. India’s middle class is buying air-conditioners, kitchen appliances, and washing machines, and a lot of them from American companies like GE, and Whirlpool, and Westinghouse. And that means their job base is growing here in the United States of America. …

Americans also benefit when U.S. companies establish research centers to tap into India’s educated workforce. This investment makes American companies more competitive globally. It lowers the cost for American consumers. Texas Instruments is a good example. Today Texas Instruments employs 16,000 workers in America. It gets more than 80 percent of its revenues from sales overseas. More than 20 years ago, Texas Instruments opened a center in Bangalore, which is India’s Silicon Valley. They did so to assist in analog chip design, and digital chip design, and related software development. The company says that their research centers in countries like India allow them to run their design efforts around the clock. They bring additional brainpower to help solve problems, and provide executives in the United States with critical information about the needs of their consumers and customers overseas.

These research centers help Texas Instruments to get their products to market faster. It helps Texas Instruments become more competitive in a competitive world. It makes sense. The research centers are good for India, and they’re good for workers here in the United States.”

Mr. President, we couldn’t have said it better ourselves.

Join the discussion 2 Comments

  • csven says:

    Sorry. Also wanted to ask how much of Texas Instruments’ overseas revenue is making its way back to the U.S. and into our economy? Or is all that money being re-invested in overseas research centers, overseas manufacturing sites and so on? I don’t see that there is necessarily a link between their overseas success and American workers other than more jobs are moving overseas to take advantage of lower wages, lower health care costs, lower government standards, greater government incentives and (tbh) reports of widespread corruption.

  • csven says:

    I’m curious. I saw similar comments on some news show a couple of years ago where a manager in India said he didn’t understand why Americans were concerned when his own office was filled with American equipment. The only problem was that the stuff he pointed to was American *branded* equipment (I know because I know the products); they were actually being manufactured in China.

    I then checked a .gov website to confirm comments about the trade numbers being touted. But what I found were flat numbers for private industry and a booming export business for the U.S. government (I suspect the U.S. was selling mothballed military equipment, which – when I was in the Navy – I found to relatively common and which would have coincided with the tensions between India and Pakistan around that time). But again, that was a couple of years ago.

    In any case, based on that information I can’t help but be skeptical that “GE, and Whirlpool, and Westinghouse” are selling American-made products in India. The *companies* may be doing business, but that doesn’t necessarily mean it’s American workers at GE, Whirlpool and Westinghouse plants in the U.S. that are benefitting. More than likely, it’s shareholders who reap the benefits of this sort of arrangement.

    Could you verify this to ensure that those companies are actually selling only American-made products to India? For my part, I’ll be looking into whether those large kitchen appliances being manufactured in the U.S. are making the long, expensive journey to India. Seems to me like they’re shipping a lot of air if that’s the case.