Today is Fat Tuesday, the last day to let it all out before Lent when good Catholics like me have to take the high road for 40 days. My Lenten resolution is to be positive and on topic with all of my lean posts. But that doesn’t start until tomorrow, so I get one last shot at the outsourcers, NAM and the administration before I start writing on the other side of this leaf I am turning over.
The boys and girls over at NAM were cheering in their cubicles over a talk Mr. Bush gave to the Asia Society, in which he said, "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."
He went on to cite Texas Instruments, saying, "Texas Instruments is a good example. Today Texas Instruments employs 16,000 workers in America." [ About 40% of TI’s total employment]
and "More than 20 years ago, Texas Instruments opened a center in Bangalore, which is India’s Silicon Valley."
and "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." [He forgot to say which workers that would be.]
To which the folks at the National Association of Manufacturers said Amen. Actually, they said, "Mr. President, we couldn’t have said it better ourselves."
Let me share with Mr. Bush and NAM a few items from the last couple of Texas Instruments Annual Reports:
"In late 2002, the company announced a plan to involuntarily terminate about 500 employees, primarily in manufacturing operations."
"In the first quarter of 2001, the company began an aggressive worldwide cost-reduction plan to limit the impact of reduced revenue on profitability. The elements of the cost-reduction plan were a voluntary retirement program, involuntary terminations and the consolidation of certain manufacturing operations including the closing of three Semiconductor facilities in Santa Cruz, California; Merrimack, New Hampshire; and Tustin, California."
"Since the 5724 affected employees have terminated and the three facilities are closed, the savings from this cost-reduction plan are being realized. The 5724 affected employees were primarily in manufacturing operations."
"There were also restructuring reserves booked for the closing of a facility in Texas."
"Also, in the second quarter of 2003, the company announced a restructuring action that is expected to affect about 950 jobs in Semiconductor manufacturing operations."
"… restructuring action is expected to affect about 800 jobs through voluntary retirement and involuntary termination programs over the next two years, primarily in manufacturing operations at the Attleboro headquarters of the Sensors & Controls business."
"In the second quarter of 2003, the Company announced a restructuring action that is expected to affect about 900 jobs in Semiconductor manufacturing operations in the U.S."
At last year’s Annual Shareholder’s meeting, the Chairman of TI boasted that they were "the first semiconductor company to manufacture outside of the United States." – Now there’s something to be proud of.
The CEO followed him to the podium and proclaimed, "Now, if customers are the stars of this show, then the heroes are the great people. These are the folks who design these amazing products and make this happen." …So much for the people who actually manufacture TI products.
And TI in the world press …
"Texas Instruments, Inc., the worlds biggest maker of semiconductors for cellular phones, said it plans to double production of its chips at Taiwan Semiconductor Manufacturing Co." –Taipei Times
"Texas Instruments (TI), the third largest semiconductor maker in the world, will give more outsourcing orders to Chinese makers, but has no intention of building its own semiconductor manufacturing venture in the country, a senior executive of the US company said Wednesday in Beijing." –China People’s Daily
and best of all…
"A photo of a satellite dish arriving by oxcart at TI’s first Bangalore office is a staple of the city’s information technology story …. For programmers and computer engineers, graduates start at salaries of $5,000 to $8,000 a year." –Dallas Morning News [now there is a sight to see – TI hauling high tech gear by oxcart to find programmers who will work for $2.50 an hour – and recall, the President described this place where stuff is hauled by oxcart as "India’s Silicon Valley". I have been to Silicon Valley many times and, while there can be some strange goings on there, I have yet to see any oxcarts.]
As humorous as the image of Texas Instruments slogging digital hardware through the mud of India by cow power to find some guy who works for nothing may be, this is very serious stuff. There is nothing comical about the President of the United States asserting that this company is "good for workers here in the United States" or the National Association of Manufacturers proclaiming, "Mr. President, we couldn’t have said it better ourselves.
American politics and the American economy have become polarized around the notion that manufacturing must be some sort of Karl Marxian struggle between capital and labor. You must either be pro-owner or pro labor; you must either be 100% Republican or 100% Democrat; you are either conservative or liberal; either labor wins or capital wins, and the other side has to lose.
I choose none of the above.
The labor unions are a ridiculous abomination, in most cases, fighting for absurd work rules and outrageous pay scales. But just because I think the unions are by and large, a travesty, and I have no respect for their lackeys in the Democratic party, that does not mean that I must side with Wall Street and their lackeys in the Republican Party.
The bigger lesson from the Toyota Production System is that it is an economic model that demonstrates win-win. Labor wins and owners win … and customers win and communities win and suppliers win. Toyota demonstrates that Karl Marx was dead wrong – and so was Alfred Sloan. The liberal Democrats are stuck in an archaic ideological rut that compels them to believe that for working folks to have security, owners and managers must have less. George Bush and the conservative Republicans are stuck in a different rut, but one just as deep.
I don’t care what your political persuasion is – I really don’t. And there are a lot of issues besides manufacturing, although I happen to believe that, in the long term, it is perhaps the most important. Without a solid manufacturing base propping up the economy, the whole American house of cards will begin to tumble and we will all be groveling pretty low on Maslow’s hierarchy where a lot of the issues we get worked up about today won’t seem quite so important.
What I do suggest is that all of us who care deeply about the future of manufacturing speak up. I have been a Republican all my life and will probably be one for the rest of my life, but the fact that I agree with most of the Republican principles does not mean I have to read drivel like that spouted by Mr. Bush or NAM and passively accept it.