High Tech or High Treason?
by Jim Gillespie
I write this as a survivor, sort of, of more than three decades in the U.S. information technology industry. During my career, I worked for only two companies: the IBM Corporation—with which you are all familiar—and SAS Institute, which bills itself as the world’s largest privately held software manufacturer.
Historically, both companies have been excellent examples of what savvy and hard work and superior intelligence can accomplish. IBM, now more than a century old, was a high-tech groundbreaker for companies like SAS, which came along after the dawning of the computer age but nevertheless is now nearly forty years old itself. Both have seen their share of challenges and, thus far, in one way or another, both have prevailed.
Their revenues are widely known, but what have been the costs?
Both companies are proudly, even defiantly, multinational. Multinational corporations, by their nature, owe no allegiance to any country, even—one is tempted to say especially—their country of origin. Their object is to make money, hang the costs. In the case of IBM, the money is for their shareholders. In the case of SAS, it’s for the two private owners, Jim Goodnight and John Sall.
This would all be well and good if the policies of these companies and others like them did not include hiring practices and political machinations that do real harm to America, their country of origin that you and I happen to share.
Consider this fact: IBM now has more employees in India than in the United States. For the past several years, the company has been ruthlessly slashing its U.S. workforce, with year after year of seeming endless layoffs (“resource actions,” in Big Blue newspeak). At the same time, IBM has been increasing its employee base on the subcontinent. The reason is simple, and is purely economic: jobs for IT professionals paying $100,000 in the U.S. pay an average of only $17,000 in India. The corporation’s current CEO, CFR-member Virginia Rometty, is a veteran of the IBM Global Services Division, whose primary mission has always been outsourcing. A couple of months ago, Rometty flew in her corporate jet to India (her third visit in two years) to rally the troops there. IBM India, she declared, is a “microcosm” of the company at large and the “key” to IBM’s revival. In a startling case of imperial hubris, IBM India is actually called the “star in the IBM crown.”
This interest in India is not new. IBM has for years dumped millions of dollars into the country, both to foster a “market” and, more importantly, to cultivate cheap labor. Programs such as the so-called “Great Mind Challenge” at two-year colleges across the country have been set up to train young Indians to do exactly the kind of work the company needs. One of these needs, of course, is the manning of support desks, many of which are now being staffed by Indian high school students.
Then there’s China. The Middle Kingdom has, likewise, long been a target of IBM. When Chinese party boss Jiang Zemin visited New York in 1997, then IBM CEO Lou “Barbarians at the Gate” Gerstner greeted him on the sidewalk outside IBM New York City headquarters. ”Lao pengyou, ni hao?” Gerstner said. “Old friend, how are you?”
The hero of Tiananmen was then treated to a round of fancy receptions and events that culminated in the bizarre spectacle of his ringing the bell of the New York Stock Exchange. (George Orwell, wherever he is, must have smiled bitterly at that one. It’s finally true: You really can’t tell the pigs from the farmers.)
It was about this time that, as an IBM employee, I received a copy of a company-wide memo, telling me in no uncertain terms to never, ever, use the phrase “Republic of China” or “R.O.C.” in print or even speak it aloud on IBM grounds. Our mainland “old friends” just wouldn’t like it.
IBM has continued its cozy relationship with China ever since, last month announcing a $100 million program to train forty thousand programmers in a hundred Chinese universities.
It’s not all been tea and Chinese crumpets for the company, however. The Snowden revelations of widespread spying by one of Big Blue’s other Big Data partners—the U.S. government—have been embarrassing at the very least, and have inspired at least one lawsuit. Spooked by the NSA and by suggestions of a Washington-Armonk spying axis, China has backed off from IBM in the past couple of years. This souring of their relationship prompted IBM to issue its methinks-they-doth-protest-too-much open letter of denial in March of 2014. Not guilty on all counts, the letter basically said. A “privacy leader.” A respecter of rights. Your secrets safe with us. Yadda y yadda y yadda. I doubt anyone believed it.
Meanwhile, just to show she means business, the peripatetic Rometty arranged a let’s-be-friends visit to Beijing, and the company simultaneously announced a massive $1.2 billion program to build 15 offshore data centers, which will allegedly be secure from NSA prying. Funny how for some people offshoring turns out to be the answer to everything.
A final personal note on offshoring: IBMers have come to detect a familiar pattern to the systematic “resource action” they’ve had to endure. They are frequently expected to train their replacements. A few months before my own layoff, on Halloween, 2003, I received an email from an IBM employee in India, asking me how I did my web development job. I answered, as tersely as possible, and waited. Sure enough, a short while later the end came. I and many of my American colleagues were led out the virtual backdoor while Kumar and his Indian coworkers came in the front.
SAS Institute, meanwhile, which spends a great deal of time and resources to top the charts in the “world’s best places to work” category, has followed a different model. Although operating the obligatory India development lab, in Pune, instead of offshoring, SAS has concentrated on bringing more native Indians to this country. Co-owner and Head Everything Jim Goodnight has beaten the endless H1-B drum for years, from the floor of Congress to countless interviews and op-eds. Spouting, to anyone who would listen, the serially debunked theory of a national STEM shortage, Goodnight has unceasingly pitched an open-borders policy in regard to technical talent from the Asian continent.
Jim Goodnight, it need not be said, is a strong Republican and a good “conservative.”
Although Goodnight’s dream of an Asian in every cubicle has yet to come to fruition, his policies—and those of his Research Triangle Park neighbors, including IBM—have resulted in a huge demographic shift locally. The population of Cary, a Raleigh bedroom community, is now more than 14% Asian, a percentage greater than either of its black and Hispanic populations. Asian is the fastest growing racial group in the city. Neighboring Morrisville, a smaller town of 22,000 known locally as “Little India,” is even more heavily Asian. The percentage there is 27% and rising.
Whether it’s through the exporting of jobs overseas or the importing of foreign workers, the hiring and lobbying practices of big business have big results. The relentless pursuit of the bottom line, whether through offshoring or packing payrolls with immigrants eager for an American job at any wage, lowers the living standard of all citizens. What’s more, the changes resulting from the latter practice unalterably and permanently change and degrade the host country’s culture. Wealthy business leaders, behind the walls of their gated communities, may not feel the change they cause as soon as you and I, but feel them ultimately they will, long after it is too late.