Business executives are finding cheaper labor not always worth it
HELENA – Business leaders from Oracle Corp., Ford Motor Co. and The Boeing Co. said Tuesday their companies have found that it makes sense to bring jobs back to the United States – even to smaller cities in places such as Montana.
Oracle President Safra Catz, speaking to a gathering of several thousand business leaders and others at a jobs summit in Butte, said her company has been centering its cloud computing division in the nearby mountain town of Bozeman.
The company has found that cheaper labor isn’t always worth it and has brought some jobs back from Mexico to the U.S., she said.
“It is really, really simple: Employees are our company,” Catz said. “Everything of value that we are is coming from, and in, the heads of our people.”
Oracle purchased a Bozeman software firm in 2011. Catz said Oracle has been impressed with the result, plans to continue expanding and expects it will attract more technology companies to the area.
“What is wonderful about Montana is that I know I have great people, and I don’t have to worry about civil war breaking out,” Catz said. “I know that sounds funny, but I have civil war in some of my countries.”
Boeing CEO Jim McNerney told the crowd that locating workers outside the country is no longer as compelling as the cost of business increases overseas. He pointed out that wages overseas have been increasing.
Boeing has had mixed results on outsourcing jobs overseas. Some critics have blamed past production delays on the company’s decision to offshore critical components.
McNerney predicted that improved business efficiency and innovation, fast-paced energy development that could make the country the world’s largest oil producer, and other factors are going to lead to a renaissance of American manufacturing. He said an effect of the recession is companies produce more with less.
“The long-term upside for workers is that American companies are about as well positioned as they have been in decades to compete and win on a global scale,” McNerney said.
The CEO announced a $35 million expansion for Boeing’s Helena plant that will add as many as 25 jobs at a facility that specializes in making critical airplane parts.
Alan Mulally, CEO of Ford, said its company invested heavily during the recession in revamping and modernizing a more fuel efficient car line. Part of that effort has been focused on returning manufacturing to the United States. He said the company is moving the production of the Fusion line from Mexico to the United States.
He said smart public-private partnerships are needed to further improve American competitiveness, and he lauded the summit as an important conversation between political and business leaders.