Karnal wrote on Mar 2^nd, 2012 at 2:49pm:



+ Increases standard of living and investment into the developing world.

+ Increases quality of products to the consumer by opening up markets to competition from overseas

+ Drives down prices or forces companies to differentiate their products to be successful

+ Increases the flow of capital across international boundaries to better serve shareholders and everyday people

There are tonnes of reasons why globalisation is a good thing.

Would you prefer we headed back to the closed shop days of the 1970s?

Karnal wrote on Mar 2^nd, 2012 at 3:12pm:



I am actually in favour of loosening immigration on skilled workers.
I like the fact that as a UK citizen I can now work anywhere without hindrance across the European Union - its a mini-exercise of what we could do globally.

Obviously we would restrict this to skilled workforce.

Don't mistake though lower labour costs as exploitation.

In our project the Indian on $500 per year was still being paid over 8 times his cost of living.
In fact a higher cost of living ratio than the retrenched worker in South Australia on $40,000 per annum.

It's about saving costs whilst still ensuring the worker is justly remunerated for his role.

You couldn't bring the Indian to Adelaide and pay him $500. It would be ethically wrong.

To some extent your point is valid and workable if the living and working conditions of that society were attractive to the mainstream skilled worker.

But unfortunately that isn't the case. The higher skilled workforce do not want to live in the developing world by and large, and that's just what we have to live with for now.

It makes sense to have the unskilled manual labour where it can be found easier in the developing world and then work to have the higher skilled processes in the developed world.

In the project I gave as the example as well, we kept principal higher skilled R&D in the developed world along with the ancillary services such as legal, finance, marketing etc.

Also bear in mind for areas like Pharma there is a regulatory need to keep the front end R&D in a more controlled, developed society and business world.

It's fine to produce the mass production vials etc in India but the front end work, if we produced that in India the controls it would have to come through to get into Australia and pass the TGA/FDA submissions would be extreme in itself.
Where the work is done in Australia it becomes a much easier "pass".

India doesn't have the reputation or the established controls as yet to be able to make it an easy sell.
It's much the same for all other industries.

China for example. I was once told our VP of APAC toured a site in China one time and saw box upon box of Sanofi-Aventis labelled product being manufactured and ready for shipping.
Problem was, having come from Sanofi recently, he knew full well they weren't in China and had been investigating the fact mickey-mouse drugs were being made, then labelled Sanofi and being sold half price.

The Chinese authorities turn a blind eye to it. Hence the fact you wouldn't want wholesale operations in these countries yet because they do not have mature control regulations to enable you to submit easily across the world.

For product manufactured in the United States with FDA approval gets cleared by the TGA in Australia almost immediately on arrival.

You try and manufacting drugs in China and bringing it in through the same timeframe.

So your point can hold water if the societies were the same, they are not.

Well yes, it depends on both the industry and the company I would imagine.

One of the plus sides of moving the manufacturing to India from South Australia in our project was that whilst labour was cheaper - we also found that the red tape in India was minimal if it existed at all on dismissals etc.

From a business perspective if you have a poor lazy worker in India, you basically walk up to him and tell him to f off. Done, he's gone.

As you'd know, in Australia (particularly given our workers were all AMWU on the floor) you go through what? 3 months at best of a process to remove him/her.

Is it ethical? Borderline. I'd say its just easier.

I personally think we need somewhere between the two of Australia and India.
India - the worker has about the same rights as my dad's dog, probably less.
Australia - it's incredibly hard to remove a poor worker.

One of the many incidents that probably pushed some of the US guys (who decide the outsource) was a worker who basically filled vials of morphine related drugs with the incorrect dosage.
This can kill people.

He was dismissed, given only 12 months back he had also been throwing out re-usable vials costing the company about $50k.

The AMWU come bulldozing in demanding he be re-instated and that incident 1 was unrelated to incident 2 and given 12 months had passed it was incorrect to put on a report etc etc etc

Now American employers - who hate Unions with a passion anyway - see all this and think what?
You've got a sh*thouse employee and we can't fire him because a Union tells us not and then threaten to pull all their workers off the floor for periods of time??

Then there is India where we can just get rid of him and send him up the road that second?

Of course its a plus point.

BUT, I also still stand by the view companies have a moral obligation to behave in a responsible manner.
Thus we have an Ethics and Compliance policy - where workers will be treated with both respect and just cause if you like.

Most US listed entities (and I have worked for only US companies for a decade now) have an ethics committee which is also stated in their 10-K submissions on their compliance of standards of behavior.

It is on this, that they should be judged.