Wednesday, September 15, 2010

We have met the enemy…and we used to work for them!

“We have met the enemy…and we used to work for them!”
On August 6th USA Today reported the following ( http://www.usatoday.com/money/economy/2010-08-06-manufacturing04_CV_N.htm ) “Faced with rising costs, General Electric is moving production of its new energ -efficient water heater halfway around the world. The country it's leaving? China. The one it's bringing 400 jobs and a newly renovated factory? The United States. A small but growing band of U.S. manufacturers — including giants such as General Electric and Caterpillar— are turning the seemingly inexorable offshoring movement on its head, bringing some production to the U.S. from far-flung locations such as China. Others that were buying components overseas are switching to U.S. suppliers. Ford Motor said Wednesday that it's bringing nearly 2,000 jobs to its U.S. plants by 2012 from suppliers, including those in Japan, Mexico and India.”
In September, ABC News (http://abcnews.go.com/Business/Economy/story?id=5492084&page=1 ) followed up with a report of their own calling the new movement “Insourcing”… “As the U.S. economic slump continues, American jobs are increasingly in short supply: the U.S. Labor Department reported on Friday that employers shrunk payrolls by 51,000. The decline was smaller than expected but still marked the country's seventh straight month of job losses. The national unemployment rate, meanwhile, has jumped from 5.5 percent to 5.7 percent. But some experts say there is a bright spot on the jobs front: At least a handful of American companies who had relied on workers stationed overseas are now bringing jobs back to the United States. In addition, foreign companies are continuing to expand U.S. operations and hiring more local residents, instead of flying in foreign staff for business. “
Since then, amongst a score of local and national articles paying attention to this phenomena, Bloomberg Businessweek (www.businessweek.com/magazine/content/08_26/b4090038429655.htm ) and even NPR http://www.npr.org/templates/story/story.php?storyId=100131296 have spoken on the subject of economic balance. We are finally meeting in the middle and that means that jobs once shipped off to China and India, or any of the other exotic or at least distant ports, may be coming home.
The headlines and debaters in newspapers, business magazines and even television are beginning to talk about the stabilizing costs that will make outsourced jobs attractive to American workers. Surprisingly there is a good argument for making this case. Rampant unemployment in America means that corporations can probably get people to work for less and even snag a slightly better caliber of person to do this kind of work. Tax breaks are being offered as bait for cities desperate to attract business, government incentives of cash and trade protection, a century of reliable, honest production (no radioactive lead in our toothpaste, honey) and (for anybody who has driven through a major city in the last two years knows) there is more than ample room for anybody who wants to move in and set up shop The timing for returning these outsourced jobs back onto American soil is good – probably never better. But not so fast!
Don’t you hate when there’s always that but in any supposed “good news”? The economy is going to get worse before it gets better. Before we as a country start handing the keys to every major city in America over to these conglomerates, maybe we ought to walk down memory lane and recall that no small amount of the unemployment we are suffering is the direct result of these very same Fortune companies bailing out of America in her time of need. Not that they had any national obligation to stick in the heat with us and turn this thing around for the good of Old Glory and all that (although those time worn values need to be picked up, dusted off and made more than some kind of bumper sticker philosophy). And I don’t say “hold on a second” because I am certain that they will abandon us at the next drop of the economic hat either.
After all, we made them who they are - and I mean that in every sense. So, we have to take some responsibility and recognition the Fortune companies that are good and those that are just plain evil. You know them; the companies that deliberately flood the market with inferior products and inflated prices and the corporate directors who took hundreds of millions to remove themselves from the very companies they raped and pillaged. Or billionaires that flaunt their wealth shamelessly while they drape themselves in the very freedom and protection they enjoy under our Constitution without the slightest bit of remorse or sense of duty to one’s country (it’s a nice place to live but I wouldn’t want to pay employee wages here – yuk, yuk). After all, what could we do when they folded their tents and moved away to greener pastures (never was a metaphor so acutely and sadly accurate)? I mean it’s a country built of the principle of capitalism, right?
It’s also the country that was built and paid for by the blood of patriots, many of whom lost much of everything they owned and many of the people they so dearly loved, who made that statement and started this whole party to begin with. These corporations that made their products globally iconic because they were “made in America” had the labels reprinted and warnings written in Chinese. But am I just angry because they were pathetically empty of values and any sense or morale decency in their ruthless pursuit of corporate wealth?
No…well maybe a little. But that’s not the subject of this editorial. I think there is a very practical and relevant point to be made here and issues we should explore before we open up the shores and let these critters wriggle back.
Assume, as any reasonable person must, that they will be returning with the same mindset they had when they left. Seriously, when was the last time a corporate boardroom was accused of sensitive creativity? Can you imagine these dominions rebuilding their dynasties on today’s fractured infrastructure? Talk about the end of the world and God calling! Nothing could more swiftly bring about the sudden and abrupt collapse of cities, highways, railways, airports and electrical grids (not to mention the chaos that would ensue from cities competing to regain these monolithic empires ) then the sudden appearance “theme park” size campuses built around the fact that these corporations would almost certainly receive the land, buildings and titles for almost nothing in exchange for the promise of work for the locals.
I’m not against incentives for getting companies to set up shop in industrial areas that already exist. I’m just certain that we can do this differently – better – if we do it right this time.
I have been a strong proponent since early 2007 of the “extended depression”. I believe that our economy, no matter what occurs, will not see its bottom until 2012. I have even factored in the consideration that at one point in our economic slide (which seems to be now) it would become just as economically feasible to offer the outsourced jobs to a desperately and deeply compromised unemployed America as it would to offer those jobs to India or China. We need the jobs but we can’t handle the influx of these workers on our roads, in our cities and over the course of our antiquated infrastructure. If we bring these jobs back with the mindset that Fortune America had when it left, we will inadvertently sign away our frail economic recovery. Things are going to change and, in this case, they will not change for the better. If their coming home ends up being a financial miscalculation on their part do you think they will end up paying for it?
Trickle Up and Then Tumble Down

Unfortunately, any disaster to Fortune companies eventually craters the American economic landscape (at least this is true so far – I believe I hold a significant alternate theory based on my predictive models). Here’s the most ironic aspect to this whole insourcing probability; as Fortune companies return home, the initial inflight will at first seem like a boom to our prosperity. The fact is that it is a bust waiting to implode. The effect of these jobs coming home without serious modification to the current corporate America model is based on the anticipated corporate premise that they can fill huge call centers with immensely overqualified people to work the phones. This will backfire on them in the middle of our recovery (and that word “recovery” will take on new meaning by 2012) in and about 2015 as literally tens of thousands of highly skilled workers abandon these monster call centers to accept more fitting work opportunities while compensating their expertise and salary expectations.

Trickle up and then tumble down (as I call it)- the result of more economic woes that will be the cause of a deafening crash and an even more substantial setback to any serious recovery. This time we will have isolated another even more fragile element of our society and those people now just hanging on by the tips of their fingers will be washed away in a tsunami of economic recession. Ultimately this perplexing cycle will once again creep up the ladder of our society and wreak havoc on a beleaguered middle America.

Keep in mind I feel like Paul Revere as I scream “things will never be the same…things will never be the same!” But,
the cruel, hard fact is that they will never be the same and deep down I think most Americans have accepted that. The last thing we need are the frighteningly simple minded corporate leaders making a wholesale decision to pepper our landscape with jobs they “think” they can steal for pennies on the dollar from desperate Americans. But not long after the call centers are abandoned and skilled help is not available at bargain basement wages, these giant entities will collapse like edge of the tide sand castles and, once again, we will have the domino effect on business. If we as Americans have not learned from our mistakes, be sure CEOs of these mega-conglomerates have learned less - and they learn at a slower rate.

Tethered Communities - The Future of Business in America

While the overall economic global picture for markets will grow exceedingly dim, the average American will have (and in many ways already has) readjusted. We are sleeker, trimmed down and more prepared to weather the storm of this economy knowing that at some point jobs must come back or corporations will have essentially said to the world “we have no buyers!” Nothing has become more visible to politics and business than the understanding that the bottom line for every company - no matter what they do, make, service or sell - eventually comes down to how much they sell their product or service for and what they NET off those sales or services. Like the young actress once said “it isn’t rock science!” And, no I didn’t misspell or misquote - that it is the actual quote (I will spare her name because – well – we all make those errors when standing on the red carpet- I guess).

So, in what will be a snide bit of twisted irony, American corporations who have bankrupted the country in search of the ever important “profit” have left in their wake a society that has no intentions of being put in such a position again. As they migrate back to the country they abandoned and the millions of Americans they left stranded without hope of income, they may want to rethink how they are going to plant their flag this time around. I have some suggestions, and I am certain of three things –
Number one: Large corporations became large corporations because at one time they were innovative.
Number two: Large corporations, when they become large corporations, cease being innovative.
Number three: Large corporations will have to once again become innovative if they have any hope of remaining viable in the 21st century.

What we can hope for is that we can offer returning corporations an alternative to their current business modeling by absorbing these jobs by using a combination of what I call “Tethered Communities “ and “Smart Space” work environments.

We at The Bosson Group understand how to take these insourced jobs and allocate their location, structure, management, analysis and technological needs based on detailed quantification of time, productivity and cost allocation. The “Tethered Community” emerges through a series of tests, analysis and position charting that will allow any workforce to reduce it’s on site needs for personnel by as much as 20%. A “Tethered Community”, using corporate locations with “Smart Spaces” (multiple personnel offices, etc.), will allow these corporations to relocate (insource) without pressing the equivalent of a nuclear footprint on our country.

Positions carefully constructed to work from homes; small satellite offices and even piggybacked desks will mean that major companies can bring in tens of thousands of jobs for a fraction of what it would cost them to simply reset the clock and bring back all the cubicles, desks and real estate that have already once been made to stand empty and abandoned.

The questions are hardly rhetorical and the correct answers will have a profound, positive impact on how corporate America proceeds into the 21st century with a new business model. They only have to ask themselves:

1. Do you really want all that real estate again?
2. What if going green was profitable as well as responsible?
3. Can you hope to keep these talented people caged up in call centers when the economy recovers?
4. What if you staff your company and save 40% on employee costs right up front without government regulations, long term contracts or minimum employment numbers?
5. Why not take advantage of the technology you yourselves created to do exactly what you created the technology to do?
A well thought out and efficiently deployed “Tethered Community” by The Bosson Group means:

• Thousands of jobs returning without the onerous employee costs Fortune companies must absorb
• The ability to control and significantly eliminate the pressure such returning positions would place on our country’s already failing infrastructure
• Savings in the tens of millions of dollars every day on precious fossil fuels
• An almost incalculable reduction in carbon emissions
• Less strain on employees commuting to and from locations through gridlock, making a friendlier, more personal work environment
• Smarter use of real estate leading to significant reductions in building, supporting, taxing and maintaining new developments
• Redesigning the American workforce to become flexible, mobile and global without ever having left the country to be competitive

For the record, whether you are a returning global competitor or a company in long term good standing on American soil, my concepts of “Tethered Communities” and “Smart Spaces” are effective and viable alternatives that can save you millions of dollars a year. And, if you’re a company on your way up in your market and you need to add people or consider expansion, The Bosson Group can show you how to consolidate your power to become more efficient while producing greater net profits. I’ve put a good deal of thought into this and I am asking corporate America, as they return, to do the same.

In God We Trust
Frank Bosson
CEO, The Bosson Group

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