(OPE-L) Re: production shifts -- a subject for discussion?

From: glevy@PRATT.EDU
Date: Fri Nov 05 2004 - 08:05:50 EST

Is it safe to assume, then, that with the reelection of G.W.
there will continue to be production shifts ("outsourcing")
out of the US?  Is there a New International Division of
Labour?/ In solidarity, Jerry

NY Times, November 4, 2004
An Industry in India Cheers Bush's Victory

BANGALORE, India, Nov. 3 - India's outsourcing companies were jubilant
Wednesday that the elections in the United States will return
President Bush to office.

"This is great news for the offshoring industry," said Nandan M.
Nilekani, chief executive of Infosys Technologies, a software services
company.  The trend toward outsourcing will now become even more
inexorable, Mr.  Nilekani said.
Offshore outsourcing, or the moving of work from the United States to
low-cost centers like India, was an issue in the presidential
election. The Democratic candidate, Senator John Kerry, blamed Mr. Bush and
outsourcing for the loss of thousands of American jobs.

Mr. Bush, in contrast, was largely silent on the issue. But members  of his
team, among them N. Gregory Mankiw, the chief economic adviser, and
Treasury Secretary John W. Snow, have both defended outsourcing as another
 form of free trade.

Mr. Kerry referred to ''Benedict Arnold companies and C.E.O.'s'' that  sent
jobs overseas. He promised that as president he would end tax
deferrals for companies that send work abroad.

The tone of some campaign comments criticizing outsourcing was noted  with
some concern in India. The Times of India, the country's leading
newspaper, called outsourcing the "swear word" of the 2004 elections.
Thousands  of workers in India's technology centers like Bangalore and
Hyderabad  closely followed the campaign. India's outsourcing industry
employs over 800,000.

For more than a decade now, leading Indian outsourcing companies like
Infosys Technologies and Wipro have written software applications and
back-office work for top American corporations including General
Electric and Citigroup. The work can be done more cheaply here, where
skilled  labor is inexpensive and plentiful. The leading outsourcing
companies earn  as much as two-thirds of their revenue from customers from
the United States.

India's software and back-office services industry posted $12.5
billion in export revenues in the year ended in March, a 30 percent rise
over the previous year as global demand for its services grew.

News that Mr. Kerry had conceded the election to Mr. Bush was greeted  with
joy in the industry. "We are very happy that Bush is back," said
Kiran S. Karnik, president of the industry group Nasscom, or National
Association of Software and Service Companies.

"The president's track record has been of recognizing the advantages  of
free trade," Mr. Karnik said.

Mr. Bush's re-election will bring out the latent demand for
outsourcing and
lead to more offshoring announcements by companies, he said.

"Some corporations have been cautious about signing or announcing  deals in
the last few months," he said, adding, "Now they will no longer hold  back."

Some executives said that offshoring would grow at even steeper rates  with
Mr. Bush's victory.

"The elections are over and so is the rhetoric; it will be easier for
American corporations to step out with their outsourcing plans," said
Paul, the vice chairman of Wipro, who works in Mountain View, Calif.  The
company itself is based in Bangalore.

In spite of some strong American sentiment against offshoring, Indian
outsourcing companies have been growing robustly recently. In the  quarter
that ended in September, Infosys Technologies announced a 49 percent  rise
in profit, and added more than 5,000 employees. Its rival Wipro had a 65
percent increase in quarterly profit, and hired 5,500 more workers.

Early on Wednesday, news of Mr. Bush's likely re-election also buoyed
India's stock market. The bellwether Sensex index in Mumbai ended up  1.53
percent, at 5,842.54 points.

http://www.nytimes.com/2004/11/04/business/worldbusiness/04outsource.h tml

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