Runaway shops

Louis Proyect lnp3 at
Tue Jul 22 08:05:01 MDT 2003

NY Times, July 22, 2003
I.B.M. Explores Shift of White-Collar Jobs Overseas

With American corporations under increasing pressure to cut costs and 
build global supply networks, two senior I.B.M. officials told their 
corporate colleagues around the world in a recorded conference call that 
I.B.M. needed to accelerate its efforts to move white-collar, often 
high-paying, jobs overseas even though that might create a backlash 
among politicians and its own employees.

During the call, I.B.M's top employee relations executives said that 
three million service jobs were expected to shift to foreign workers by 
2015 and that I.B.M. should move some of its jobs now done in the United 
States, including software design jobs, to India and other countries.

"Our competitors are doing it and we have to do it," Tom Lynch, I.B.M.'s 
director for global employee relations, said in the call. A recording 
was provided to The New York Times recently by the Washington Alliance 
of Technology Workers, a Seattle-based group seeking to unionize 
high-technology workers. The group said it had received the recording — 
which was made by I.B.M. and later placed in digital form on an internal 
company Web site — from an I.B.M. employee upset about the plans.

I.B.M.'s internal discussion about moving jobs overseas provides a 
revealing look at how companies are grappling with a growing trend that 
many economists call off-shoring. In decades past, millions of American 
manufacturing jobs moved overseas, but in recent years the movement has 
also shifted to the service sector, with everything from low-end call 
center jobs to high-paying computer chip design jobs migrating to China, 
India, the Philippines, Russia and other countries.

Executives at I.B.M. and many other companies argue that creating more 
jobs in lower cost locations overseas keeps their industries 
competitive, holds costs down for American consumers, helps to develop 
poorer nations while supporting overall employment in the United States 
by improving productivity and the nation's global reach.

"It's not about one shore or another shore," an I.B.M. spokeswoman, 
Kendra R. Collins, said. "It's about investing around the world, 
including the United States, to build capability and deliver value as 
defined by our customers."



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