Friday, March 19, 2004

Well, Anthony Raimondo is no longer Dubya's choice for "manufacturing czar", after John Kerry claimed that his company had shifted jobs to China. But, says the New York Times ...

... it's not that simple. What Mr. Raimondo's company did, experts of all stripes say, has become standard business practice in response to domestic and international pressures.

So, ummm... does that mean that he wasn't shifting jobs overseas? Let's examine further:

The company got its start in China by exporting from Nebraska prefabricated steel framing for commercial buildings, particularly factories.

Its biggest Chinese customer was a company that made automotive glass. "We shipped all the steel framing for four 250,000-square-foot factories," Mr. Raimondo said.

In 2000, however, his big Chinese customer shifted to one of [Raimondo]'s competitors, Butler Manufacturing of Kansas City, Mo., which offered a lower price from a factory it had opened in China in 1996 to manufacture the heavy steel products closer to where they would be used. [Raimondo's company] responded to this competition by shifting from exports to production in China, at a new plant that opened last year in Beijing.

Ah. So in the late '90s, Raimondo had workers in Nebraska producing steel products for the Chinese market. Now, he has workers in Beijing producing steel products for the Chinese market. So, does this not count as shifting jobs overseas? Raimondo further explains:

"We think ours is the ideal dynamic model for American manufacturers," Mr. Raimondo said in a telephone interview. "I talked at length with the Department of Commerce and the White House, and they agreed that [my company]'s competitive response is a tremendous message for all manufacturing. We do not outsource in the sense of bringing product back to the United States."

Ah... the mystery vanishes! Jobs may have been shifted overseas, but the buzzword associated with the current controversy is outsourcing, and since the jobs weren't outsourced "in the sense of bringing product back to the United States", nothing he did should be controversial. Brilliant!

But then, he's missing a better argument. The actual definition of outsourcing is hiring a contractor, domestic or foreign, to do work that a company (or government) formerly did in house. And since Raimondo's outfit owns its plant in Beijing, the jobs there can't have been outsourced no matter where the product goes. Doubly brilliant!

Remember, it's not about whether Americans can find good jobs. It's about which clamshell is covering the pea...

Further note: Part of what passes for "free-trade advocacy" these days is to point to all the jobs that we have in America for producing exports. There's, perhaps, a certain tension between this notion, and having the commerce department encouraging American firms to open factories overseas when selling into markets there...


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