But the decline in hiring off-shore didn't happen. And now even if it did
it wouldn't matter much because Asian countries are developing their own indigenous companies in a broad range of sectors. If North American companies didn't hire Asians, then Asian companies would just under-sell them. The only way to stop the internationalization of labor would be to go back to high tariffs. That's not a winning proposition in any event, but it is unfeasible in the current situation because China, Japan and Korea own so much US debt.
The internationalization of the labor market has happened and it's here to stay. I once thought my job (software technical writer) was immune because the software market is still mostly English and hey - English is my native tongue - but in my company a large part of the writing team is in Singapore. I heard on As It Happens tonight that even journalism jobs are being out-sourced to Asia, and that Reuters has had over a hundred business reporters in Singapore for years - writing about North American business.
All that brings me to the purchase of Chrysler by Cerberus. Some people are arguing that Cerberus is a strip-and-flip specialist, but there's more to it than that. The private equity company makes its money by buying a company that is nearly insolvent, restructuring and making large cuts to the company, and eventually selling it for a profit. Cerberus is dead serious about restructuring companies and it has a lot of management expertise.
Cerberus is not a new investor in Detroit, probably because the US car industry is, in general, completely in the crapper. The Detroit Free Press writes, "In southeast Michigan, Cerberus already has purchased a controlling interest in General Motors Corp.'s finance arm, GMAC, as well as Michigan auto suppliers CTA Acoustics in Madison Heights and GDX Automotive in Farmington Hills. It has offered to invest $3.4 billion in parts giant Delphi Corp., which is in bankruptcy. And earlier this month, a judge gave auto supplier Tower Automotive, also in bankruptcy, preliminary permission to sell nearly all of its assets to Cerberus for $1 billion."
It's like this: The unions and the government have been holding their finger in the US car manufacturing dyke for years, keeping change at bay, maintaining not just high salaries and benefits for workers but also lousy workmanship, lousy design, and second-rate management. Not to mention a steadily eroding workforce as the companies crumbled. The resistance to change also extended to not reforming health care in the US, taking out some of the many profit-takers who contribute to the crippling health costs of unionized companies.
And that's all over now. Cerberus is a private company that doesn't have to disclose its doings to the SEC and doesn't have to answer to shareholders. It isn't going to follow the old car manufacturing paradigms. The future for Chrysler is far different than if Frank Stronach had been successful in his bid.
Change is coming. Not just to US car manufacturers, but to all of us who earn a salary in a rich western country. And isn't that what we always said we wanted? - Better education in developing countries. Equalization of pay scales around the world. An end to the western countries hogging all the world's wealth?