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| India not immune to global tremors, says RBI | ||||||
| MUMBAI: Even as analysts talk about India continuing to be the second-fastest-growing economy, the Reserve Bank of India (RBI) has sought to inject some caution. The central bank has said the resilience of India and other emerging markets cannot be guaranteed and has warned about moderation in growth. In its annual report for 2007-08, the central bank also pointed out that there's uncertainty on how long the divergence between growth of advanced and emerging economies will continue. The annual report said outlook on capital flows to the emerging markets remains uncertain. On one hand, a massive injection of liquidity by central banks of developed economies has lead to large capital inflows to emerging markets. On the other hand, a change in global sentiments or monetary policy actions. "While emerging markets have remained resilient so far, there is uncertainty as to how long and to what extent the divergence of growth performance between advanced economies and emerging economy will persist in the future," said the report. The central bank has also pointed out that the global slowdown could have its impact on services sector since Indian BPO and IT-enabled services are mainly dependent on external market conditions. On one hand, cost-cutting measures in developed countries might increase outsourcing to India but on the other hand, a reduction in IT spending in these economies might work against BPO and IT-enabled services.
"As the global economy slows down, companies largely from developed economies, in their quest for reducing cost, might outsource a part of their operations to cheaper and efficient markets as India... As global slowdown has hit the financial services industry the most, outsourcing activities to India may decline as the financial services companies reduce their geographical operations," said RBI in its report. The central bank has said although the inflation risk continues, given that services constitute the predominant share of GDP, the adverse impact of fuel price pass through on the GDP may be somewhat lower, relative to other emerging markets. Unlike the global economy, which is expected to slowdown significantly, the Indian economy is expected to see slight moderation in growth. Monetary policy may be tightened to modulate demand due to increasing global concerns on account of inflation and inflationary expectations. But conducting monetary policy is getting complicated by global developments and domestic demand pressures. The central bank has also highlighted the importance of fiscal policy in pushing the demand in the economy. Fiscal concessions in the form of higher tax exemption limits and adjustment of slabs may enhance disposable limits and adjustment of tax slab could enhance spending power. This may have a positive impact on consumption demand, it said. |
Thursday, September 4, 2008
chicagotribune.com
Ford cuts shift at area plant, resulting in 600 fewer jobs
By Wailin Wong
Chicago Tribune reporter
September 4, 2008
Ford spokeswoman Anne Marie Gattari said Wednesday that the company is still "working through what the impact would be" on other employees. About 2,200 people work at the plant at 130th Street and Torrence Avenue.
The future of at least one shift has been uncertain over the past year. In March, as part of a cost-cutting effort, Ford said it would eliminate one shift at the Chicago plant and others elsewhere.
But in June, the company said two shifts would continue because United Auto Workers Local 551 approved a contract that included altering the production schedule to four 10-hour shifts a week instead of five eight-hour shifts.
The plant makes the Ford Taurus, the Ford Taurus X crossover and the Mercury Sable. It also started producing the Lincoln MKS sedan over the summer, Gattari said. Production at the plant fell 15 percent last year, to 131,646, roughly half of the facility's capacity for two shifts.
On Wednesday, Ford said sales of its Ford, Lincoln and Mercury cars tumbled almost 9 percent in August from a year ago. Ford's overall U.S. sales were down 26.5 percent compared with a year earlier.
Officials of United Auto Workers Local 551 could not be reached for comment. Employees were informed of the decision last week.
Tribune news services contributed to this report.
Wednesday, September 3, 2008
Poor IT crippling outsourcing, say software firms | |||||||
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The low quality of Vietnamese IT workers is posing a threat to the growing local software outsourcing market, which the government aims to expand into one of the world's largest. The number of information technology (IT) graduates increases every year in Vietnam, but the quality of training is still poor, reported the Ho Chi Minh City Computer Association (HCA). Vietnam has 390 universities, colleges and training centers specializing in IT education, 43 of which opened in the last 12 months, according to HCA. More than 50,000 new students were admitted into these establishments in 2008, 11,000 more than over the last year. Despite the high numbers, the competence of human resources in the software sector is much lower than other countries, said Nguyen Quoc Hung, director of the Ho Chi Minh City-based LogiGear Vietnam Company. "I'm worried about the quality of IT master's degree holders and engineers, even those that graduate from the country's most renowned universities," said Dong Thi Bich Thuy, director of the University of Natural Sciences HCMC's computer skills training center. Only 10 percent of IT graduates meet the requirements of software companies, Thuy said. People not price Principal of the University of Information Technology in HCMC, Hoang Kiem, said most graduates from IT institutions, including the country's best schools, have two weak points: foreign language skills and the ability to understand new technology. "To become good programmers, students must be good at mathematics and logical thinking, but many of our programming students lack both skills," said director of Nang Dong Communications Company Nguyen Minh Hung. Most companies have to spend between three and six months at least to train fresh graduates to meet company requirements, Hung said. Due to the shortage of qualified human resources, software companies have to poach staff from other businesses. "To make Vietnam the world's largest software outsourcing market, Vietnamese workers have to meet international standards… the cheap price is not a competitive edge anymore," said Phi Anh Tuan, director of the HCMC-based branch of CMC Corporation, a software company, and vice chairman of HCA. Where is Vietnam? Vietnam was the first choice of Japanese companies seeking foreign partners for software outsourcing orders, according to a survey by the Japan Information Technology Services Industry Association last year. The country has also been listed as one of the world's 20 most attractive markets for software outsourcing, according to a recent survey by the US-based consulting firm A.T Kearney. Vo Hong Ky, director of HCMC's HPT Software Center, said local software businesses perform all software outsourcing services, but most orders they receive are related to software testing and data entry. Testing is just a small procedure, according to Dang Quang Minh, director of VnPro Networking Training Center. "We all want high-level orders, but our current capacity does not allow us that," Tuan said. On a scale where one is the easiest task and five is the most complicated service, said director of iNet Solutions Corporation Nguyen Van Hien, Vietnamese outsourcing contractors generally perform level 2.5 services. According to the government's software outsourcing industry development goals, the industry must achieve a 35-40 percent growth rate with sales of US$800 million per year by 2010. The goal aims to make Vietnam one of the 15 most developed software outsourcing industries in the world. Source: SGTT | |||||||
| Story from Thanh Nien News Published: 03 September, 2008, 11:24:20 (GMT+7) Copyright Thanh Nien News | |||||||
Tuesday, September 2, 2008
Out of a job yet? Quit buying foreign.
GM opens second plant in India
TALEGAON, India
General Motors Corp. opened a second plant in India on Tuesday, boosting its production capacity in the country from 85,000 to 225,000 vehicles a year.
The factory is part of GM's aggressive push into emerging markets, which have helped cushion the beleaguered auto giant from falling sales in the developed world. It also furthers the Indian government's ambition to turn the country into a manufacturing hub for small vehicles.
"We believe India in three to four years will be a significant source of profit for us," said GM Asia Pacific President Nick Reilly.
The first car -- a pint-size red Chevrolet Spark draped with marigolds -- rolled off the production line at 11:25 a.m.
GM invested $300 million in the new plant in Talegaon near Pune, a fast-growing manufacturing hub about two hours outside Mumbai, the nation's financial capital. The factory will start by producing the Spark -- a mini-car introduced in 2007 that is GM's most popular local model -- for the domestic market.
Detroit-based GM is ranked fifth by sales in India and hopes to boost its share of the booming Indian auto market from 4 percent to 10 percent in the next few years. The company manufactures six Chevrolet brands at its factory in Halol, Gujarat -- the Captiva, the Optra, the Aveo, the SR-V, the Aveo U-VA, and the Tavera -- and plans to introduce another small car near the end of 2009.
GM said Tuesday the new Talegaon factory could also be used for export as early as 2010.
Last week, the automaker pledged to invest another $200 million in a powertrain facility adjacent to the Talegaon plant, which will eventually produce 300,000 diesel and gas engines a year for both domestic and export markets.
GM also plans to double the number of dealer and service centers in India to 400 this year and said it would rely increasingly on its technical center in Bangalore, which employs more than 200 research and development engineers and designers.
GM's investment in India, which now tops $1 billion, pales in comparison with China, where the company produces more than 1 million vehicles a year. GM has poured $5 billion into its China operations and plans to invest $1 billion a year going forward, company officials said.
About 30 percent of the 9.5 million vehicles GM manufactures each year are made in Asia, a ratio Reilly said would likely jump to nearly 40 percent in the next five years. Vehicle sales in Asia, he said, would likely follow a similar trajectory, but North America remains the company's largest market, accounting for nearly half of total sales last year.
GM President Fritz Henderson said Tuesday that no matter how robust their growth, emerging markets alone cannot carry the company, which reported a second quarter net loss of $15.5 billion.
"We need to turn around our North American business. There is no choice," he said.
India is suffering from headwinds of its own. High inflation, slowing growth and tightening credit have pinched auto sales growth, which is expected to slide into the single digits this year after several years of double-digit gains.
Meanwhile, the Indian government is keen to establish itself as a hub of small car manufacturing.
Local officials were at pains to flaunt their pro-business credentials as Tata Motors announced Tuesday it was suspending construction of its Nano factory in Singur, West Bengal, following farmer protests that have stopped work for five days.
Vilasrao Deshmukh, the chief minister of Maharashtra state where Pune is located, thanked farmers Tuesday for giving their land for the GM factory and reiterated his invitation to the Tata Group, saying he would "roll out the red carpet" for a Nano plant.
More than 80 percent of the more than 1,000 employees at GM's new factory are from the local area, company and government officials said.
Tata already has a factory near Pune, as do Daimler AG's Mercedes-Benz unit and Indian automaker Bajaj Auto, among others. Volkswagen AG and Indian auto giant Mahindra & Mahindra Ltd. are planning to open plants in the area.
V.K. Jairath, the former state secretary of industries, who inked the deal with GM for its new factory, said that's just the beginning.
"Detroit will call itself the Pune of the U.S.," he said.
Obama's anti-outsourcing rhetoric puts IT industry in wait-and-watch mode
Moumita Bakshi Chatterjee
K. Bharat Kumar
New Delhi/Chennai, Aug. 29 Stung by the apparent anti-outsourcing overtone of Senator Barack Obama's acceptance speech where the Democrats' Presidential nominee pledged to halt tax sops to companies that ship jobs outside the US, the Indian IT industry on Friday said that globalisation of services was "irreversible" and argued that outsourcing had enabled US firms to stay competitive. (Not in the United States). The lack of employment has had huge effects of the US economy.
While industry captains reacted with caution trying to decipher the underlying implications, some sought to play down the reference to outsourcing terming it as an "election rhetoric."
"Most of the tech companies have large number of open jobs today that are not being filled due to lack of technical resources. Moreover, US companies have realised that outsourcing improves competitiveness….US companies have to decide what is the most effective model to do business," Nasscom President, Mr Som Mittal, told Business Line.
He pointed out that the problems were more glaring in manufacturing sector than in IT. "The US is actually trying to ramp up its science, technology, engineering and math (STEM) capabilities and so I do not think the Senator was referring to IT industry in particular," he added.
Senator Obama, in his address to the Democratic National Convention in Denver, had said that unlike his Republican rival Mr John McCain, he would stop giving tax breaks to corporations that ship jobs overseas, and will start giving them to companies that create good jobs in America.
When contacted, Mr Phaneesh Murthy, CEO, iGate Corporation, quipped, "I don't know of a single company that gets tax breaks for sending jobs overseas."
Mr Shailesh Shah, Chief Strategy Officer, Satyam Computer Services, pointed out that it was difficult to attempt to stem the flow of jobs or act on tax cuts, as it would require Congressional and Senate approval.
The Senator's comments assume significance as India's software and services exports stood at about $40 billion during the financial year 2008, a growth of 29 per cent, with US as its largest market.
Could India be in a state of denial?
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| BPO industry unfazed by Obama's remarks | |
| Sunday, August 31, 2008 (Bangalore) | |
Democratic Presidential nominee Barack Obama may have made his stand on outsourcing clear. He had said if elected he would stop tax breaks to companies that indulge in outsourcing. However, has that statement actually had any impact on the BPO industry in India? In Denver, Barack Obama may have been applauded for his views against outsourcing but this statement hasn't scared BPOs in India. People like Pushpender who has worked in the BPO firm for almost five years said, all this is just election gimmick and the industry is here to stay. "Talks about it just being a prelude to elections, too valuable an industry to actually let go off people," said Pushpender Singh Yadav, BPO employee. A view echoed by Naascom that's keeping a close watch on the American elections though. "We are definitely watching closely but we really don't think our jobs or the industry is at any risk. We are confident of our skills and technological expertise and know we will always be an asset for the American market as well," said Sucharita Eashwar, Regional Director, Naascom. But what if Obama wins the election? It's not that simple, even if he gets to the White House there is a long procedure, there will definitely be no impact and it will fizzle out," said Lathika Pai, CEO, Fides Global Consultant. While Obama's anti-outsourcing speech has definitely made it to conversations in the city, most people say it will not shut down the BPO industry. Experts feel that this is Obama playing to the gallery before the elections. |
Can you compete in the global market place?
Five outsourcing websites: You too can telecommute.
Outsourcing often gets a bad rap, but if your business needs to build a new website or have a brochure designed, for instance, and lacks the expertise in-house, outsourcing your project at home or abroad is often the most viable and cost-effective solution.
So where can you find qualified contractors to complete your projects? Thanks to the internet, it's never been easier to not only locate talented contractors but to get them competing for your business.
Here are five websites that help businesses find contracts to outsource their projects to.
- ELance
One of the original outsourcing websites, I've hired a number of web developers and graphic designers using eLance. ELance allows you to post your project, receive bids from contractors, offers a system for managing projects and also provides a payments service with an escrow option.
- ScriptLance
With a focus on web-oriented projects, I've observed that ScriptLance tends to be a hub for lower dollar value "gigs."
- oDesk
When outsourcing on an hourly rate payment schedule, there is always concern that a contractor won't put in the time her or she is supposed to put in. oDesk takes a novel approach and keeps track of the time contractors are putting in. It can even take screenshots every 10 minutes so that you can see what your contractors are doing.
- Guru
Guru bills itself as "the world's largest online service marketplace" and works in a fashion similar to ELance.
- RentACoder
Like ScriptLance, RentACoder is primarily oriented to web projects, as its name implies. It claims over 220,000 "registered coders."
Having successfully used some of the services above, here are a few tips:
- Spec out your requests in as great a detail as possible. Even if you're not capable of describing what you need in technical terms, take the time to explain what you need in depth. If you don't, expect delays, additional costs and poor results.
- Set sensible milestones. Quite honestly, outsourcing can be crapshoot - especially when working with a new contractor. You have to be prepared for complications. Thus, give thought to milestones so that you can get a project back on track (or cancel it) early if it goes astray.
- Communication is key. If you have a hard time communicating with a contractor during the sales phase, you're probably going to have a hard time communicating with them during the project phase.
- Look local. Certain types of projects are almost always best completed locally. If you have a complex or long-term project, give some real thought to selecting a local contractor that you can meet with in person.
- You usually get what you pay for. Even if you decide to outsource your project to a country in which contractors charge far less, be weary of quotes that seem too good to be true. They usually are.
- Look closely at portfolios, read feedback, request references and ask questions. Treat the hiring of a contractor the same as you would the hiring of an employee. Do your due diligence!
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