Posted on 12/06/2005 10:10:44 PM PST by CarrotAndStick
Intel, the world's largest chipmaker, and JP Morgan Chase, the global investment banker, said on Monday that they would outsource significant operations to India, an indication that more complex, high-value work is moving here. Intel, based in Santa Clara, California, will invest more than US$1 billion in India over the next five years, of which US$800 million will go to expanding its research and development center in Bangalore, the company's chairman, Craig Barrett, said in a statement during a visit to New Delhi.
Intel's news followed the announcement in October that Cisco Systems would invest US$1.1 billion and triple its staff in India, from 1,400 to more than 4,000, in three years.
Intel's Bangalore center employs around 3,000 engineers who design and develop products. Barrett said on Monday that its latest investment "demonstrates Intel's long-term commitment."
Intel will invest the remaining approximately US$250 million as venture capital in technology companies.
JP Morgan Chase said it would add 4,500 employees in India by 2007, mainly by setting up operations in Bangalore to support its growing structured finance and derivatives businesses globally. The company will hire a mix of recent graduates and experienced workers and will double the size of its India operations. All 4,500 of JP Morgan Chase's current employees in India are based in Mumbai.
The bank made news two years ago when it became the first global investment bank to hire 35 equity researchers in India to support its operations on Wall Street.
"In our experience, we have found high-quality, low-cost staff in India and we want to continue investing in the country," said Michael Golden, a spokesman for the bank who is based in London."The investment is about meeting the growing needs of our business and not about shipping jobs from another location."
Wall Street firms and large global banks have been particularly aggressive in outsourcing work to India in recent months. UBS said it would open its first center in Hyderabad with 500 jobs early next year. Goldman Sachs has 750 people in its center in Bangalore but has a capacity for 1,500 employees.
"This is way beyond mere cost savings," Madhavi Mantha, a senior banking analyst at the financial consultancy Celent, said from Montreal. "Unless global banks are comfortable with the quality of work, they would not risk taking the work offshore."
JP Morgan Chase said the new employees will process complex derivatives settlements and structured finance transactions. The company will hire about 400 people a month. By 2007, it will have almost a third of its back-office and support jobs, about 3,000, in India.
Offshoring of work to India has steadily risen in the last few years, despite political discomfort in the US over the trend. Recently, high-end jobs in areas like chip design and complex product design have been added to the relatively low-end call center and paid-by-the-hour software coding work.
Though salaries in India are climbing rapidly for entry-level workers and top managers, Indian employees still earn less than a fifth of what their peers in the US do. This story has been viewed 45 times. Advertising
Copyright © 1999-2005 The Taipei Times. All rights reserved.
See also Godwin's Law.
Finishing Law schools will be great accomplishment!
Good luck!
I am done with all the college education after my two graduate degrees. Can't go back to school, except for the girls/ladies/women. :-)
I have never claimed that importing things is bad, nor would I ever. In fact, in my first post I wrote that international trade is good. But there needs to be limits, restrictions checks and balances. Our trade deficit with China is so lopsided in their favor that I can't imagine why Pres Bush isn't red-faced with embarrassment, (unless there is some political reason why we trade with them that doesn't involve business strategy).
If you can refer me to a book that claims massive trade deficits and strengthening our enemies is good, I'll read it. In the meantime, I'll continue to think of R. Reagan's strategy of literally bankrupting the USSR as the proper way to 'trade' with Communist giants and nuclear adversaries. What's going on today is insanity.
'Protectionism' doesn't have to be 'isolationism'. We can trade internationally as we always have, but with the same restrictions, limits, checks and balances we always used to employ. Maybe you don't remember the time when American made products were the envy of the world, back when we exported far more than we imported.
It's only been recently that we have bestowed China with 'Most Favored Nation' trade status, and in fact, it's only relatively recently that we opened up trade with them at all. There is new mentality that claims manufacturing and producing nothing is the best way to go if we can get cheap labor and cheap products from overseas. But this 'strategy' completely ignores whom we are trading with, (our enemies), and it looks only at immediate profit while turning a blind eye to things like becoming dependent on these nations because we no longer engage in manufacturing. It also ignores that fact that while WalMart is booming by selling us the cheesiest goods ever sold in America at a low cost, we are going back again and again to replace these cheap products whereas they used to last much longer. Let's not forget either that in order to continue selling us these cheap goods, WalMart must give us cheap service and pay their employees cheap wages.
The way modern day 'global trade' is run, it's exactly akin to illegal immigration. Both help make the economy look better on the face, but in reality they are only fostering cheap quality and craftsmanship, (good for business, bad for consumers and bad for America).
As America gets more and more absorbed into the world by the 'globalism' obsession, we lose more and more of our national identity and economic clout. Unfortunately, 'globalism' doesn't stop with buying and selling, we are getting so entangled with global trade that it is now dictating political policies, (to wit, we traditionally restricted trade with China because we viewed them as our enemy and the enemy of freedom. But how quickly all that changed when the globalists envisioned China as a potential place to trade-rape. To China's credit and our own shame, however, China has taken our 'economists' to school and turned the plan around. It is they who benefit economically from us, not vice-versa).
There are some people who are not done selling America down the Ganges.
For the last time, WEALTH OF NATIONS! And if you're worried about trade with China "strengthening" them, you should see what not trading with them would do to us.
In the meantime, I'll continue to think of R. Reagan's strategy of literally bankrupting the USSR as the proper way to 'trade' with Communist giants and nuclear adversaries. What's going on today is insanity.
We didn't trade with the USSR under Reagan (or much before then, for that matter) because the USSR didn't want to trade with the West. That was part of that whole "communist" thing.
Example: in the 1980s, word leaked to the Soviet citizenry of this cool new thing that all the Westerners had called a "Walkman." They wanted one, too. After telling them that they didn't need one didn't work, the Soviet government decided to respond to this demand with Soviet-made Walkmans. Not only did they suck like virtually everything else the Soviet Union ever made, but they cost about five times more to manufacture than what they would have cost had they simply bought them directly from Japan.
The way that Reagan bankrupted the Soviets was by building up the US military and being very, very public about it. He trumpeted increases in military spending, showed Soviet diplomats demonstrations of our force strength, and basically did everything in his power to project an image of strength to the Soviets. The message was simple and consistent: "We can whoop your butts any time we want." When the Soviets tried to respond with their own military buildup, their economy couldn't handle it. That was how Reagan sandbagged the Soviet Union into implosion.
Wow, you really adopted socialist language! Who told you that "workers" represent "American people?
What are corporations but pieces of paper owned MOSTLY by American people? If you have a savings account, you own a corporation to three; if you have retirement money anywhere, you own dozens of corporations; if you have a 401K, and IRA...
It never ceases to amaze me that here on FR, when it comes to corporations most speak, as you do, like true socialists.
But you are not arguing that: you want only a certain PART of American citizenry to be put first --- "workers." You want to abuse (i) retirees, widows and orphans, whose money, ofter life savings, is invested in stocks, and (ii) every American consumer to lose. Under your "job protection," both groups would pay more than they should: the first via losses in their savings, and the second via higher prices.
So, if you have adopted the socialist mantra of the "workers firs" -- fine, but then be honest about it. You don't really care about all American citizens, just some of them.
If our economy is severely hurt by this outsourcing then tariffs and other regulation would have to be imposed to equal the playing field.
You make the standard mistake of all socialists. Who knows what proper regulations is? Who knows what its consequences are? Nobody. Like all socialists, you compare REAL free market, with all of its inequities, to an IMAGINARY flawless, omnipotent and omniscient government, Such governmnent does not exist. Real governments consist of real people. Moreover, because (i) there are few of those people in the government than in hte entire market and (ii) those people DON'T CARE, governments are ALWAYS worse than free markets.
There is no, and has never been a better mechanism --- for ALL agents in the economy -- than market mechanism.
same All socialists mBe assured that pure capitalism does not work.
We left unbridled capitalism somewhere in XIX century. More importantly, we do have a level playing field. What you see is the resistance by some Americans to egotistic demands of other Americans. Some Americans --- retirees, those saving for retirement, etc. --- invest into stocks and hire corporate managers to produce profit on those investments. Other Americans tell them: "I want you to pay my health benefits, my pension, my everything --- no matter how much it costs." Just health insurance paid to GM employees increases the price of every car sold by $1,500. Well, to that corporate managers say, "I'll go to India, where workers are not so spoiled and demand less."
That's all. We have a cultural problem, where people had it for too long to good and forgot American values. They no longer want to save their OWN money for their health care, their retirement, and even the birth of and care for their children. They want YOU to do that.
The markets provide feedback, telling the public that these demands are impossible to meat. Eventually people will learn this simple fact, which their fathers and grandfathers always knew.
Keep the government out of it.
You must be joking! Just inquire after the ethnic composition of any faculty in any major university in this country. Getting an advanced degree is a jib Americans increasingly don't want to do: too hard, one must forgo income for years and even learn how to read and count.
Have you ever bought gas at BP? Do you know what "BP" stands for?
You have no idea how silly you sound. Full 15% of all companies are owned by the British alone. You have absolutely no capacity to check where parts of what you buy are manufactured.
Is GM sn American company? If so, by what what measure? Its stock is owned by Brits, French, Germans, Islanders, Arabs, Malaysians, Russians, Italians, Chileans... It has subsidiaries in G-d know how many countries --- those jobs are not American, right? The same is with GE, Ford, almost any company.
So, what you are telling us is that you simply discriminate against some people on a whim. For other than whim you have absolutely no basis for that discrimination.
That's because, in countries such as India and Taiwan, they actually believe in "educating" their children; they challenge them; they work them.
Our kids' pampered little asses are gonna be waxed in the marketplace in a few years. Sad to say, but it's true.
Sure is working with China!
the overall 'economy' is essentially judged according to how well, or poorly, business is doing.
Judged by whom? Only an ignorant idiot would say that.
This of course means the hundreds of thousands of American workers whose jobs have been outsourced become meaningless statistics when business is good.
Again, where the h-ll do you get these "facts?" We do have statistics: employment is at such a high level that until recently it was considered unattainable. The "outsourced" workers find jobs.
Corporate greed
Why did not you start with that? Just say, "I am a socialist." THere is no such thing as "corporate greed:" it's an invention of socialists. And you fancy yourself a conservative?
Yep, at McDonalds.
"there is no such thing as corporate greed"
Yeah, greed only exists outside of corporations.
You like globalism so much, not to worry, you'll reap the benefits of it soon enough.
Reagan, (as you said yourself), eventually bankrupted the Soviets, and that was a very wise plan no matter how it was accomplished. (Though it was actually the Pope's courageous speeches in Poland and other Soviet bloc nations that emboldened them and turned the tide against communism). President Bush on the other hand is strengthening the economy of communist China, something that is already coming back to haunt us in the Taiwan fiasco, as China continues to use its invigorated economy to build its military.
Just wait another 5 - 10 years, when their military is at the level they want, and watch the Muslim terrorists become an afterthought compared to the Chinese threat. Furthermore, trading with a communist giant that oppresses, incarcerates and drives their Christian population underground, and which forces abortions on their female population will never, ever benefit America. It just pulls us down the abyss with them.
I'll read the book you suggested, but if it's telling me that massive trade deficits and strengthening our enemy's economy are wise , I'll file it with Bill Clinton's "My Life".
So true. We won't trade with Cuba because they're a communist, oppressive regime, and rightfully so. But communist China, an even more oppressive regime, is worthy of our "Most Favored Nation" trade status, go figure. At least Castro hasn't sent his police into private homes to drag out pregnant women and force them to have abortions.
>>>"Indians or any other country do not have to live under the laws of the U.S. governmen"
I think Enron found out that you really can't sue Indians in India using their legal system. They built a power plant then a local government fiefdom arbitrarily changed the deal while the plant was being built. Sort of reminds me of Chavez wanting to nationalize all the (U.S.) oil operations in Venezuela.
I'd love to know the dollar figure of U.S. gov loan guarantees for plants being built in India and China by U.S. companies (exporting jobs). I'm sure it's in the billions -- is it tens or hundreds of billions?
The U.S. needs to reduce the friction of doing business (legal costs, taxes of all sorts, some environmental rules, etc.).
Domestically, no one owns a job. So businesses should be able to move their operation anywhere in the world. The rub comes when they want Uncle Sam to insure or defend their plants.
Don't feel bad about picking up the Ciff's Notes, because it can be a pretty difficult read.
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