frank_talk (2006-50)

Outsourcing Where It Hurts

A corporate fable for our time,

by Frank Cagle

"The Capitalists will sell us the rope with which we will hang them.”—Vladimir Lenin

THE SCENE: A corporate boardroom belonging to the American Widget Co.

“Gentlemen, as CEO, it is my duty to recap our recent history, answer the carping congressional critics and explain to America how we came to be where we are. We are facing a grave crisis, but as I shall explain to you, I don’t see how we could have avoided this outcome.

“It was our duty to our stockholders to maximize profits. The moving of all our industrial plants to Mexico and China was completely justified and, given the regulatory atmosphere in the United States, has been a tremendous success. In these countries our plants have not been harassed by labor unions, environmental regulations or OSHA inspectors. Profits have been exceptional. Wall Street has rewarded us handsomely with higher and higher stock prices.

“When we outsourced our telemarketing to India, we had a rough patch, some of our customers complained and the language issue gave us fits. Who knew British and Indian English could be so different from American?

“We made a good case for those measures, however, arguing for free trade, globalization and reduced costs and higher profits. Congress and the executive branch understood we were just moving these jobs overseas that weren’t good enough for Americans.

“They did get a little hot when we started moving the computer jobs to India, however. Some people argued we were now shipping overseas the jobs Americans did want to do. But really, does anyone think our public schools can produce a good computer programmer? Is it our fault no one takes math classes anymore?

“I suppose, however, the outsourcing of all our human resources jobs to Costa Rica started this negativity about our company. Some people started making fun of the American Widget Co. not being in America. This was a lie, of course: The American Widget kept all essential components of our company here in the good ol’ U.S.A.

“I suppose having our employees in Mexico and China and India calling Costa Rica to file an insurance claim and then having the prescription drugs mailed from Canadian drugstores did cause some delay. However, Human Resources reports the incidence of catastrophic illness and death by our workers is within acceptable statistical limits. You will notice in your handouts, the graphic on page 37 shows our health care costs have declined precipitously for the last three quarters.

“Our decline in costs has been a Godsend, given that the American market for our products has been in a steady decline. It is an unfortunate side effect of the modern global economy that there are fewer American consumers left who can afford our products. We are offsetting this problem, however. We have started a credit card division, which allows Americans to buy widgets and pay us over time at a rate of 26 percent interest. The accountants tell me we are not only seeing a pick-up in widget sales, the profits from our credit-card division will surpass widget sales by the third quarter of 2010.

“We have pursued the best interest of our corporation, kept Wall Street happy and the stock price remains strong. Unfortunately, there has been a new development. Business executives in Mexico, China and India have suggested that since they have all the plants, all the employees and provide all the goods and services for the American Widget Co., what do they need us for?

“As a publicly traded company we have been unable to stop them from buying up all our stock. They have elected a new board of directors in Switzerland, transferred all our money there, and hired a brother-in-law to the top communist in China to be our new CEO.

“Beginning next week I will join the COO, the CFO, our 47 executive assistants and two accountants, comprising the old headquarters staff, in our new venture. We will be re-training at the local junior college for jobs in the fast-food industry.

“You are to be commended for your service on our board and your contributions to integrating the strongest economy in the world into the fast-paced era of globalization. We used petty cash to purchase these gold-plated Japanese watches for each of you as a parting gift. “It has been a pleasure serving this company and corporate America. Though these events will mean a serious adjustment in my lifestyle, I’m proud that our stock price remains high, and our selfless example will be the subject of a Wall Street Journal page-one feature next week.

“Would the last one of you to leave turn out the lights?”

Frank Cagle is a political analyst and the editor of Knoxville Magazine . You can reach him at .