Offshoring's second wave

The shipment of white-collar jobs overseas is certainly a controversial and worrisome trend for many U.S. workers, but factory workers may soon have greater reason to fret.

Companies in the business of making car parts, communications gear, industrial machinery and medicine may soon join their compatriots in the electronics and apparel industries in tapping cheap overseas factory labor, according to a new McKinsey report.

The consulting company predicts that a new wave of offshore outsourcing is coming, and it's aimed straight at "skill-intensive" industries such as these. India and China stand to gain many of these jobs, the report said.

"Some industries will feel substantial pressure for the first time, and competition will lead many U.S. manufacturers to source products from these countries or even move plants abroad," McKinsey reports.

The shift will lead to nearly half of all U.S. manufacturing imports coming from a dozen low-cost countries by 2015--a chunk of the economy worth hundreds of billions of dollars--and would represent a sizable increase from 42 percent in 2002. The "new wave" industries will account for about half of those imports over the same period, compared to 37 percent three years ago.

McKinsey cites several reasons. For one, suppliers in some developing nations are gaining more sophisticated engineering and design capabilities, and rapid growth is spurring investment in world-class manufacturing capacity in China and elsewhere. Plus, Indian drug companies will continue to take advantage of expiring U.S. patents to produce cheaper medicines.

[TheMidnightCoder]

If corporate [America] is not stopped?

they will turn the United States into a minor economy in the world. They will eliminate or reduce to insignificance the middle class on the US. They admit freely that they are ?Global Corporations? meaning they feel they owe no allegiance to any one country. They make decisions based purely on there new god ?The Business?, and ignore strategic policy and concerns that a country may have. I am not a democrat nor republican, as these organizations have been corrupted by greed. I do not normally agree with big government and have faith in what was the free market economy. Globalization has changed that. Middle class America can?t compete freely when corporations take advantage of international exchange rates, standards of living, etc., to pay an equally trained foreign worker a fraction of what Americans make. They say we must learn to compete? It is not possible to compete with a person making the equivalent of a few dollars a day. We could not even feed ourselves for that. They spin that wages in other countries will go up. OK, maybe ten dollars a day then. It is unfortunate that it will take a depression in the US to wake the people up and force the government to change.