"Mr Outsource" Hired to Lead GM

A recent headline from NBC Los Angeles read “Can’t We Build Cars the Way We Make Chips?” The premise of the article was that we could hire a few computer aided draftsmen to put automobile designs onto a computer, and then have the car manufactured overseas, and this would result in a healthy domestic auto industry.

Outsourcing manufacturing is how much of the chip industry operates, and in addition, much of the engineering is also being outsourced overseas. Companies like AT&T, LSI Logic, Hewlett-Packard and others no longer manufacture anything. They are “fabless”, meaning they hire a third party foundry overseas to manufacture something for them, and then they put their name on the item.

We now outsource almost anything. In a bizarre example last year, some Jack-in-the-Box franchises tested a process where the order was taken at the drive-through window by an operator located more than 8000 miles away in India. The customers were never aware, except for a few complaints about the operator’s non-southern accent (the test was in Charlotte, North Carolina). With a little automation, a fast food store could conceivably be staffed locally by as few as two people, with the support of order entry from low-wage locales. One advantage of a centralized order processing system: it becomes easier to provide multi-lingual services.

An estimated 80% of tech support calls to AT&T are now answered in India and the Philippines. The Academy Award movie “Slumdog Millionaire” was about these tech support sweatshops . Dell Computers charges an additional fee if the customer wants tech support from a “North American” tech support person.

Doctors can now diagnose patients over the Internet. This is useful for people who live in areas too remote to support a local physician. Even remotely controlled surgery (also known as telesurgery) has been demonstrated through the use of robotics. One of the earliest remote surgeries was conducted in 2001, with a surgeon in New York performing a gallbladder operation on a patient in France. Dr. Jacques Marescaux, who led the team, said the operation demonstrated “the third revolution we’ve seen in the field of surgery in the past 10 years”. “It lays the foundations for the globalization of surgical procedures, making it possible to imagine that a surgeon could perform an operation on a patient anywhere in the world.” Doctors too can be outsourced 8000 miles away.

In China, people play for money the on-line games of “World of Warcraft” and “Magic Land” so that affluent online gamers, who lack the skill, don’t have to earn their way into the upper levels of the games. The locals call this occupation “gold farming”. We have even outsourced our play.

Whitacre to Lead GM

President Obama recently hired Ed Whitacre, the former head of AT&T, to take over General Motors (GM). Whitacre was chairman and CEO of AT&T from 1990 to 2007. During his tenure, Whitacre led the company through several acquisitions and sales, and earned the moniker “Mr. Outsource”, by eliminating all of AT&T’s manufacturing, and outsourcing as much as possible of the operation.

Does this move mean that President Obama wants the auto industry to become “fabless” while subsidizing the operation by an estimated $20 billion? GM’s reorganization plan calls for the closing of 16 manufacturing facilities in the U.S., including four assembly plants.

According to the Detroit News, “General Motors Corp. will shift more production of vehicles bound for the U.S. market to China, Mexico, South Korea and Japan, but will keep total imports at roughly one-third of all sales here.

In a confidential 12-page presentation to members of Congress, obtained by The Detroit News on Friday, GM said it will boost U.S. sales of vehicles built in those four countries by 98 percent — or about 365,000 vehicles — while shrinking production in Canada, Australia and European countries by about 130,000 vehicles.

GM also disclosed it will start importing vehicles made in China in 2011, reaching 51,546 vehicles in 2014. Imports from South Korea to the United States will jump from 36,967 vehicles in 2010 to 157,126 in 2014.”

The list of jobs that will ultimately prove difficult to outsource overseas includes: policemen, firemen, paramedics, plumbers, electricians, nurses, child-care, farmers, and landscapers. However some of these jobs could be filled by permitting more guest workers into the country legally. The H-2A visa program has been updated to make it easier to hire foreign workers for this purpose.

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Brian Bradshaw is a Certified Technical Specialist (InfoComm CTS). Areas of expertise include Video, Audio, Computation, WiFi, HDTV, Satellite Systems, and Communications. He has a communications technology business that serves the Southwestern United States with offices in Plano, Texas (Dallas) and an office in Peoria, Arizona (Phoenix), managed by his brother, Keller Bradshaw.

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