Welch ridicules anti-offshoring

Anupama Chandrasekaran

NEW YORK: Jack Welch, retired chief executive of General Electric Co., ridiculed suggestions that the weak jobs market in the United States is a result of the movement of jobs abroad.

"It is the dumbest argument ever put out," the 68-year-old Welch told a meeting of the World Business Forum in New York. "It is election time," he said, blaming politics as the motivation for the recent backlash against offshoring.

Democratic presidential candidate Sen. John Kerry has made U.S. job losses to India and other low-wage countries a major theme of his campaign to unseat President George W. Bush.

Television programs such as "Lou Dobbs Tonight" on CNN, with its "Exporting America" series of reports, have condemned U.S. companies that send work overseas.

Welch warned that more jobs might be lost in the effort to prevent the movement of jobs to cheap-labor countries.

"Don't stop two jobs from going abroad, you will kill 20 here," the former GE top brass said.

Welch said the role of offshoring in weakening the jobs market has been blown out of proportion. He said the increase in productivity levels is the real reason why labor requirements of companies have shrunk.

GE was one of the first few companies to set up manufacturing and service bases in cheap-wage countries such as India long before offshoring became a mantra for cost-cutting companies.

Currently, close to half of GE's employees are outside the United States but it also gets about 50 percent of its revenue from abroad, according to a GE regulatory filing.

©Reuters