Obama riles high-tech exec over outsourcing

BULLETIN! EXTRA EXTRA !

Well Well ..... looks like something has hit the fan ! Right on subject, here's a bit of todays's news for your enjoyment.

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Ref: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/04/BUF817D164.DTL

"Carl Guardino usually comes across as an amenable, mild-mannered Silicon Valley executive. But not on Monday. Not when he watched President Obama promising to end overseas tax breaks for U.S. companies that "create a job in Bangalore, India, (rather than) one in Buffalo, N.Y." Guardino, CEO of the Silicon Valley Leadership Group, angrily described Obama's language as "not only discouraging, but divisive." The president's implication that companies such as Cisco Systems and Hewlett-Packard merely "ship jobs overseas," and are being rewarded in the bargain, came as a shock to Guardino, who otherwise described the president as "brilliant and respected by so many in the tech sector who are counting on the administration as their ally." Indeed, Obama's proposal to limit U.S. companies' ability to defer paying U.S. taxes on offshore earnings does put Bay Area companies doing a lot of business overseas directly in the crosshairs. "It would adversely impact our ability to invest and grow our business in the (United States) and to compete against our foreign competitors," said a spokesman for Cisco. "

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Four questions:

1. Anyone out there with an opinion on foreign tax breaks for American corporatons?

2. Would it be bad for corporate America if offshore tax advantages were eliminated?

3. The article suggests that foreign investment tax breaks allows favorible competition with foreign corporations. Not sure what that really means... do you?

4. Am I missing something here? Given Guardino's quote "adversely impact our ability to invest and grow our business in the (United States)" What does this mean? We can't invest in the United States (and American jobs) unless we invest in offshore tax breaks?

The Dangerous Prejudice Against Outsourcing?

Today's "Anonymous" comment discussed President Obama's plan to tax companies that outsource American jobs and give tax breaks to companies that hire Americans.. A recent comment presented in this blog questioned whether new tax laws would really be positive for the American job market and the nation's economy. Especially, would Obama's new tax laws be a positive for the many technology people who have lost their jobs to outsourcing ? I say that nothing will change until the "greed factor" mindset is offset within the corporate American market.

Supporting my position I would like to reference an article from the 30 Mar 09 magazine "Information Week" titled "The Dangerous Prejudice Against Outsourcing". This article was written by Bob Evans who is described as a senior VP and director of Information Week's Global CIO unit. Mr Evans says "When CIO's employ outsourcing to remain competitive and create new customer value, the outrage industry calls it anti-American and screeches about the loss of our jobs". This seems to me to be a common response from corporate American executives who have lost sight of the big picture involving the motivation of "innovative" Americans who never have/had a chance to focus their talents in the local job market (especially technology) because of outsourcing. In fact, I believe that many young Americans that should be encouraged to follow a career in technology are forced to look at other career paths that offer more future job security. Consequently, I believe that Mr Even's mindset (as suggested by the previous quote) creates the illusion that we need to outsource American jobs because we can't find innovative people here. Mr Evans further supports his outsourcing position by suggesting that "CIOs are being asked to squeeze costs while keeping alive innovative projects that will lead to competitive advantage when the global economy improves". Notice that he does NOT mention when the "American" economy improves? Is there some misplaced priority here? Finally, I am suggesting that president Obama's tax changes will hit the "virus greed factor" mindset in the pocket book and will be a wake up call for corporate America to adapt a new relationship with employees as people rather than financial objects. I invite anyone who agrees or disagrees with me to engage in dialog.