Forbes Challenges Lou Dobbs' Outsourcing Crusade

Few Americans can fault Lou Dobbs, the CNN host who has been on a veritable crusade to protect American jobs.

But is "outsourcing" really harming the U.S. economy in the long run?

"Hundreds of companies are selling out American workers by outsourcing American jobs to cheaper foreign labor," Lou Dobbs reports on his CNN Web site. "Below is a list of U.S. companies that are exporting American jobs. The list is for your information purposes only."

There follows an alphabetized "Dobbs List" of 200-plus companies that have outsourced – looked to cheaper labor overseas – rather than pay good living wages to Americans at home. American Express, Microsoft and Citicorp are just a few of those listed.

Dobbs beseeches his readers: "If you know of another company outsourcing American jobs to cheaper labor overseas, please e-mail me the company name at Lou@cnn.com. We will update the list constantly as we confirm new names."

It’s all part of Dobbs’ "Exporting America" feature that has been running relatively unchallenged for over a year.

Forbes magazine is saying there is another side to the story.

Forbes, however, has had to muster its reluctant troops – kicking and screaming - into the limelight to defend against Dobbs.

The magazine called 13 companies on the Dobbs "outsourcing" list to get a rebuttal; four wouldn’t return the calls.

They don’t want any more negative visibility than they already have and certainly don’t want to, as one company put it, "wind up in some candidate’s sound bite."

The Forbes mantra is simple. Companies outsource in order to survive.

Outsourcing actually generates jobs within the U.S. and profits for U.S. shareholders, who spend those profits right here in America.

And cross-border competition is good for consumers.

One Forbes poster child company for its anti-Dobbs offensive is Planar Systems, a Beaverton, Ore., maker of display screens. Planar made the dreaded Dobbs list for selling flat-panel desktop monitors made in Taiwan, China and South Korea.

With Forbes as its spokesman, the company has taken a breath, bitten the bullet and come out swinging.

Planer notes for the record that the outsourcing was the only way it could go head-to-head against companies like Sony and NEC - without coughing up the choking $1 billion or more that it would cost to build a display factory in the U.S.

Going to the foreign manufacturers enabled Planar to cut the list price on radiology displays for use in hospitals from $28,000 to $15,000 – an obvious benefit to consumers and affordable hospital care.

And, although Planar has certainly had to cut jobs to get to the positive bottom line, it also has added roughly 40 U.S. employees, expanding its current payroll to 400. The U.S. sales jobs pay a lot better than the Chinese assembly jobs.

And the most poignant point: What’s better for America – a healthy, profitable Planar or a failed Planar with no employees from anywhere?

"Our customers won’t pay more for a 'Made in the U.S.A.' label," explained Planar Chief Financial Officer Steven Buhaly to Forbes. If Planar kept manufacturing in the U.S., "long term, we’d be out of business, and deservedly so."

Forbes touts a recent study commissioned by the Information Technology Association of America that found that the off-shoring of IT services and software led to the creation of 90,000 U.S. jobs last year.

Adding to its Dobbs rebuttal, Forbes points to other companies on the Dobbs’ list that have added jobs for American workers:

"RadioShack added 300 workers in Fort Worth, Texas, recently at an operation that repairs cell phones. Sunnyvale, Calif.-based Juniper Networks, another Benedict Arnold per the Dobbs analysis, currently has 45 open positions, including technical staff at its headquarters and salespeople on the East Coast. Software firm Veritas is hiring 175 people in the U.S. IBM is adding 5,000 to its U.S. payroll this year, even as it sends some jobs to India."

Forbes eschews the notion that good old-fashioned profit is a dirty word if it comes at the expense of U.S. workers. The magazine points to an analysis by James K. Glassman, the host of Web site Tech Central Station.

Examining 216 public companies on the list, Glassman calculates that their shares rose an average 72 percent in the 12 months ended Feb. 23 - compared with 39 percent for the S&P 500.

"Not that stock performance would cut any ice with a politician. These Benedict Arnolds put profits before workers!" says Forbes.

Forbes concedes that it is fighting an uphill battle. Case in point: Fearful, Dobbs-wary U.S. clients of Wipro Technologies, an Indian firm that does data processing for U.S. companies, have insisted that their names be removed from the customer list on Wipro’s Web site.

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