May 17: Outsourcing, uranium, restrictions and Israel

By Published by The Editorial Board

Published: May 17, 2008

Understanding outsourcing

To the editor:
In reading the letter, “Fight for ‘buttered crust’” (May 14, page A6), I am struck by the notion that there are people who believe an omnipotent entity is sending American jobs overseas without discretion. In fact, such decisions are made at the corporate/business level and are affected by a rather complex mix of variables. Political leaders (Democrat, Republican, independents or otherwise) have little influence in such matters regardless of what the candidates profess.
As someone who has worked in industry, academia and as a consultant to companies facing the decision to outsource or to manufacture in-house, I have seen the decision process first-hand. The reasons for outsourcing jobs are economic and often a matter of company survival. When the region lost much of its furniture manufacturing base to China in this decade, it was because Chinese labor cost one-tenth of its domestic counterpart. In 1999, it was less costly for the company that employed me at that time to ship raw material to China and ship finished goods back again than to manufacture in-house. As such, many businesses decided to simply move down the supply chain and become distributors, while leaving the costs, waste and effort of manufacturing to someone else. This proved to be a profitable short-term decision; however, many of those companies now find themselves occupying a “middle man” role, which foreign manufacturers are circumnavigating on their way to the end consumer. Meanwhile, as Chinese labor costs increase along with pollution, labor is finding even cheaper places to locate — Vietnam, Bolivia and India.
These are the results of an increasingly globalized market and economic system. The famed quality guru, physicist and system engineer, W. Edwards Deming, said it best: “If the system is optimized, the components will not be, and if the components are optimized, the system will not be.” In my opinion, our fatal flaw in business is a narrow, short-term view of the broader system at play coupled with a strong resistance to change. Moreover, our views and our actions are dictated by how our performance is measured. Publicly-traded companies operate under extreme pressure to yield greater profits/dividends quarter to quarter. Similarly, private equity firms purchase companies to increase their value and then “flip” them, often a short-sighted notion as well. And, while smaller family-owned businesses often have a long-term view and plan for the future, they just as often do not have the deep pockets to sustain themselves during downturns in the market, which leaves them vulnerable to collapse or forces them, in many cases, to sell out.
Readers should understand that, while there is pain associated with it, an increasingly global market is not all bad. For example, even as Detroit continues to struggle, Toyota, Honda, BMW, et al, have brought good jobs to economically-depressed regions of the United States. Similarly, we in Danville are benefiting from Swedish and Polish firms locating in our region. We need these jobs and we need investment in local businesses and startups as well, just as an investor needs a diversified portfolio.
In closing, no single government on Earth has the power to optimize the system; therefore, we do our best at the component level. However, those with some understanding of the larger system at play will benefit most. Our government must support our business base to allow the flexibility to change and respond to uncertain customer demand, as well as changing economic conditions, and to do so in an environmentally responsible manner. Meanwhile, the United States has an attractive market for manufacturers of all types of goods, robust financial systems and an abundance of resources. These are valued attributes around the world and we are lucky to have them.

DAN CUMBO
Danville

To the editor:
The Associated Press story, “Waves from Myrtle Beach ad felt in Virginia,” (May 16, page A1),  illustrates the importance of image and advertising. In an attempt to lure vacationers south, the ad drew attention to perceived negative aspects of Virginia Beach and positive aspects of a Myrtle Beach vacation. The president and chief executive of the Myrtle Beach Area’s Chamber of Commerce made no apologies regarding the advertising and stated that his top priority is to fill hotel rooms. He’s quoted as saying, “It’s pure guerrilla marketing and some take issue with that.”
As gas prices rise, tourist destinations have to work hard to attract visitors. Perhaps drawing attention to a rival area’s shortcomings, real or perceived, negatively impacts tourism. Find their weakness … then make a case for why your resort area is better.
I wonder if Virginia Beach’s tourism director and local and state elected officials have wondered if being downriver from a uranium mine will negatively affect tourism. With the current competition for the tourist dollar, perhaps they should.

KAREN B. MAUTE
Mount Cross

To the editor:
In response to “Limits placed on speech and friends,” (May 15, page A4), as a senior at Dan River High School and a student representative on the Pittsylvania County School Board, I have strong opinions about the uproar the community seems to be causing about limiting attendance at commencement exercises.
I have attended my school’s graduation ceremonies for the past three years, and I know first-hand what has caused the School Board to limit attendance to these events. For the past three years (and this year, as well), we will be holding our graduation at the Averett Convocation Center. Until this year, just about anyone who wanted to come to graduation — invited or not — was allowed entrance. I think this is a problem because people would get up and leave during the middle of graduation, bring food and drinks into graduation and talk absentmindedly throughout the entire ceremony.
Now, is that a way to show your graduate that you’re proud of them?
I know at Dan River, each senior is allowed 15 tickets. The School Board has not told anyone that they could not ask for more. I honestly think that those who truly want to show their appreciation to the class of 2008 will find a way to make it to graduation, but I do not believe that my second cousin’s friend from college needs to be there. If someone is dead set on coming to graduation and cannot get a ticket, there has been no limit set on who can come to baccalaureate the Sunday prior to graduation — or who can throw a graduation party.
I strongly believe that a graduation ceremony should be an event that honors the ones who are graduating, not the graduates’ extended family. I know that a respectful event is what the members of the Pittsylvania County School Board are trying to bring back to their high schools.
LEAH WHITT
Ringgold

To the editor:
On May 14, 1948, when the British mandate over Palestine expired, the Jewish people gathered at the Tel Aviv Museum and declared the establishment of the state of Israel.
The youngest — yet the oldest of nations — she had been reborn. God’s chosen people had begun to return to their promised land.
It would seem to the intelligent mind that when the U.N. General Assembly, on Nov. 29, 1947, passed the resolution calling for the establishment of the Jewish state that its “right” to exist would be irrevocable.
Now, as unrest in the Middle East persists, people —even in America — seem to want Israel to give up yet more and more of the land given to the descendants of Abraham, Isaac and Jacob by the holy decree of God himself. The thinking is perhaps this will bring peace in the Middle East and appease the terrorists.
I assure you as a Christian who reads and believes as she sees biblical prophecy fulfilling before her on the news and the Internet that no matter how much land Israel gives up in an attempt at any type of “peace,” it will be to little or no avail. Mahmoud Ahmadinejad and the rest of his ilk seek her destruction, not peace.
I celebrate with Israel today — and every day and I am proud to be known as a friend of Israel.

SUSAN ARTHUR RAKES
Danville