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"But even giant corporations, such as IBM, which have converted to mostly service type product offerings, are now contracting even these jobs overseas to India, again for cost-cutting considerations.  Where does this leave the American worker?"


Chief export: our jobs!

Posted March 8, 2004 thepeoplesvoice.org

By: Ted Lang

My father and mother both emigrated from Germany in the 1920's.  My dad began his employment career working as an unskilled laborer in low paying jobs.  He enrolled in night school and trained to become a machinist.  This included mathematical computation, reading blueprints and measuring with and reading a micrometer, dial indicator and calipers.  He learned to operate turret lathes, milling machines, shapers and punch and drill presses.

His training was timely.  War economics necessitated by Hitler richly rewarded those employed in war work in the late 30's and early 40's, especially machinists.  The overtime and the low income tax rate provided him enough savings in less than two years to buy a single-family house in New York City, and for cash!

As a skilled machinist, he worked for giant defense firms.  After the war he opened up his own photographic accessory factory, which eventually failed in the early 1950's.  He returned to machine shop work.  Because of the failed business, my parents had incurred debt and my mother started working as a wirer-solderer in an electronics factory.

The need to reflect personally here should become readily apparent.  My parents were immigrants.  My father went to school at night and learned a good trade.  He even did well enough to open a business.  My parents were proud people, and even during layoffs and bad economic times, refused to collect unemployment or other forms of government aid.  And both had factory jobs inside the city limits of New York.

But in 1954, my father's company relocated to Mineola in Nassau County on Long Island.  Although I have no specifics as regards the decision on the part of management to relocate to Long Island, I strongly suspect the motive was the bottom line as opposed to more manufacturing space.  Of course, it could have been both.  But both escalating rents and New York City real estate taxes were probably the primary reason.

As can be imagined, having a well-paying job, especially for a skilled laborer within the city limits, was a terrific advantage.  Because of public transportation, my parents didn't need a car.  That changed in 1955, when my father had to buy a car to commute to Mineola.

My mother's company had a huge building and an enormous parcel of land in Whitestone, Queens, also New York City.  No space problems there.  And she could catch the Q-15 bus only three blocks from our home and it would drop her off at the front gate of the plant.  But her company moved out of the city and also relocated to Long Island.

It should be clear what was happening even back then.  Companies with good-paying jobs served by public transportation were leaving the city primarily to lower operating costs.  Companies my mother and father worked for that abandoned the city included Reeves, FXR, Hazeltine and Electrospace.  In fact, the latter moved my mother's entire operation to the Dominican Republic, right after a radical transition of corporate ownership. The pattern was obvious even thirty years ago -- companies were consolidating and also moving out of high cost/high population centers as well as completely out of the country!

As concerns my own employment as an accountant and financial analyst for IBM over twenty years, periodic employee opinion surveys that included questions on the effectiveness of all departments and services within the company always produced the same results as regarded the most consistently dependable and efficient support services.  My division of IBM was the Office Products Division [OPD], which manufactured typewriters, word

processing equipment, copiers and eventually personal computers.  Obviously, it was a manufacturing division with a large customer service support function.

Repeatedly, employee opinion surveys showed that the best run and most efficient department within the Division was the Reproduction and Reprographics Department.  It provided mass photocopying, printing, binding and publication support.  The manufacturing division was also supported by other ancillary service support functions, such as security, cafeteria, maintenance and a medical staff and health monitoring service.  In order to cut costs, when IBM lost market share due to changing market dynamics, the ancillary service support functions were "contracted out" or "outsourced."

The thought was that New Jersey-headquartered IBM - OPD was primarily a manufacturing concern, with plants in Texas, Kentucky, and Colorado, and support services were not central to the organization's mission.  In fact, IBM was supported by a Real Estate and Construction Division as well.  It acquired property for future plant and headquarters sites to support its thriving markets.  But loss of market share and economic downturns motivated the management to cut costs and displace these former IBM employees and outsource their former jobs.

IBM had a policy against layoffs - they didn't believe in them.  The displaced workers were not released but placed in other jobs within either the division or elsewhere in the corporation.  What is important to note, however, is that originally mere high school graduates were employable in these positions, with the exception of the healthcare functions.  It was once possible for a high school graduate to work at IBM, earn a living, go to school at night, and transfer to a professional field within the company. IBM even helped generously with the tuition, and all the benefits available from the company were second to none.

What has happened?  While still a manufacturing organization, IBM began outsourcing its internal service support organizations to outside vendors starting in the 1980s.  Cafeteria and security personnel are now employees of outside vendors, and healthcare, employee benefits and pension functions are being contracted out as well.  And the Office Products Division has transitioned to the Customer Service Division, and then finally to the National Service Division.  The manufacturing division itself transitioned to a service division, and now even the recently created service divisions have been consolidated.  Think of the disappearance of clear-cut corporate functions identifiable to corresponding divisions after the government disassembled Bell Telephone.

Our country has transitioned from an agrarian, to a manufacturing, to a service economy.  Technology has transformed product offerings and manufactured goods as well as their methods of production.  Skilled labor positions, such as highly skilled machinists and tool and die makers, have all but disappeared.  The small remaining machinist positions have been simplified via CNC [computer numerically calculated] lathes and millers. Manufacturing operations have moved out of the cities and eventually the country.  But even giant corporations, such as IBM, which have converted to mostly service type product offerings, are now contracting even these jobs overseas to India, again for cost-cutting considerations.  Where does this leave the American worker?

Is America in the throes of a job crisis, or is this a transitional stage of global economics that will eventually benefit everyone?  Will this emerging global economy really transition all the peoples and nations of the planet to wealth, so that no rogue nation will view one nation as superior in wealth and personal freedom in such a light as to inspire terrorist plotting and activism?  And if this transition of jobs to the global economy benefits all of Mankind, will the transition be easy for the American worker, or yet another cross to bear along with disappearing Social Security benefits and the eventual required tax increases to support neoconservative warmongering imperialism?


Copyright THEODORE E. LANG 3/07/04 All rights reserved. Ted Lang is a political analyst and a freelance writer.



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