[NTLUG:Discuss] Hidden Malware in offshore productsraisesconcerns

[Tom Adelstein]

"Neil Aggarwal" <neil at JAMMConsulting.com> wrote:

>Tom:
>
>What part of it is BS?
>
>    Neil
>
>
>--
>Neil Aggarwal, JAMM Consulting, (972)612-6056, www.JAMMConsulting.com
>FREE! Valuable info on how your business can reduce operating costs by 
>17% or more in 6 months or less! => http://newsletter.JAMMConsulting.com
>
>> -----Original Message-----
>> From: discuss-bounces at ntlug.org 
>> [mailto:discuss-bounces at ntlug.org] On Behalf Of Tom Adelstein
>> Sent: Sunday, September 14, 2003 4:11 PM
>> To: NTLUG Discussion List
>> Subject: RE: [NTLUG:Discuss] Hidden Malware in offshore 
>> productsraisesconcerns
>> 
>> 
>> "Neil Aggarwal" <neil at JAMMConsulting.com> wrote:
>> 
>> >Greg:
>> >
>> >The real problem is that the cost of running a business in the
>> >US is far more expensive than running one overseas.
>> >
>> >The playing field is not a level one for US companies.
>> >
>> >How am I supposed to be able to compete against someone
>> >whose cost of operation is a tenth of mine?
>> >
>> >    Neil
>> >
>> >"Neil Aggarwal" <neil at JAMMConsulting.com> wrote:

>Tom:
>
>What part of it is BS?
>
>    Neil
>
>

>> >
>> >The real problem is that the cost of running a business in the
>> >US is far more expensive than running one overseas.
>> >
>> >The playing field is not a level one for US companies.
>> >
>> >How am I supposed to be able to compete against someone
>> >whose cost of operation is a tenth of mine?
>> >
>> >    Neil


The cost to compete against foreign companies is generally not relevant if one takes out the labor component.  The bundle of prices to deliver a good to the consumer has less to do with the cost of production and more to do with the costs of distribution. 

Companies that outsource their production set up off shore agents in tax havens and capture part of their costs there, thus eliminating taxable income and allowing them to do things considered illgal here.

Today, the cost of labor doesn't provide an advantage. We learned that with the twin plants in Mexico. Even with a cost of 90 cents an hour, we can still make products in Detroit as cheaply FOB to the end user. The cost components can be deferred because the companies do not have to deal with Unions. So, they do not have to provide imediate vesting of benefits. That's cash flow, not costs.

The costs don't differ ultimately, the timing of the costs differ greatly.

Even in duty free zones, distribution costs will offset labor advantages. In India, one of the biggest costs of doing business is non-recordable payments which means bribes. I've wittnessed the payoffs personally. In fact, I turned down an opportunity to sell a company because the purchaser paid big money to officials who "made things happen".  It made me sick to meet those guys- well educated, well dressed, unassuming and crooked. Everyone of those guys was named Singh.

So, what angers me more than anything is the stupidity and gullability of the people in this country who need a glass stomach to see. They just accept the disinformation as if it was true.

The BS is the fact that the delivered product costs less when made overseas. It's a myth.


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