Thursday, March 27, 2008

I can get it for you wholesale

Once upon a time when Ma Bell went on strike the network was manned by "management." Mostly engineering, market and sales types. The joke was, "The voice with a smile will be gone for a while. The man with the balls will answer your calls...." Sorry for the vulgarity, but facts are facts.

And the facts also were that the telephone company was a regulated monopoly that had zero competition and made a nice safe return on investment as it boldly strode into the future at a stately three miles per hour. It was a great place to work with great benefits, good if not great pay and a retirement plan that was the envy of many other worker bee types. And since the network could not be let go down, it was staffed at about 1.5 times the number of people needed just to keep it functioning during strikes and other emergencies. Universal service was the goal and it was met. Heaven help the CO Supervisor that had his exchange crash.

Then came the Carterphone FCC decision, interconnect, lawsuits by ITT and the Feds for restraint of trade and Judge Green decided that Ma Bell must become seven Baby Bells. ATT was left to the long distance market and eventually Western Electric and Bell Labs became a step child's step children. Pacific North West Bell, Northwest Bell and Mountain Bell became US West and so on. There were early outs, get outs and don't come backs. Sixty five thousand employees became 50,000 and people were moved and I haven't even touched the Qwest buy out and the other six new companies... But the results were the same. Employment went south, and as technology brought in fiber and the Internet fewer people were required to do more. Productivity improved but the "voice with a smile" wasn't just gone for a while.....it left the country. The new voice had an accent that was almost impossible to understand.

Then a funny thing happened. People started becoming angry that they couldn't get help within a reasonable time and when they did, they couldn't understand it. Further angered by "Press One" for English every time they called a business, songs such as this became popular.

But the kicker was that outsourcing carried with it its very own problems and hidden costs. Language and cultural differences caused problems, not to mention that if you want a 9AM conference call to India, guess what time it is in Chicago? Change orders become guesses and if you need hard copies.... Well, you get the idea.

So now the companies that sent the jobs out, want to bring some of them back.

"We're having trouble finding the numbers that we need with the skills that are required to do these jobs," AT&T Chief Executive Randall Stephenson told a business group in San Antonio, where the company's headquarters is located.

So far, only around 1,400 jobs have been returned to the United States of 5,000, a target it set in 2006, the company said, adding that it maintains the target.


Okay. But maybe Stephenson needs to check the price he is willing to pay. He also needs to understand something else. If you spend 15 years firing people there will not be a pool of people just fighting to get into the business. People are rational. If they see an industry shrinking, they won't be interested.

If you have a culture that glorifies lawyers, doctors, nurses and journalists... Don't be surprised when the market produces lawyers, doctors, nurses and journalists.

He does make one good point.

Stephenson said he is especially distressed that in some U.S. communities and among certain groups, the high school dropout rate is as high as 50 percent.

"If I had a business that half the product we turned out was defective or you couldn't put into the marketplace, I would shut that business down," he said


That of course is the 800 pound gorilla in the corner. The school system has collapsed and won't recover until we get vouchers that let any student go to any school that will accept him or her. AT present we have a school system that is by the education establishment and for the education establishment. The students can each cake.

But he is wrong on the following.

"We're able to do new product engineering in Bangalore as easily as we're able to do it in Austin, Texas," he said, referring to the Indian city where many international companies have "outsourced" technical and customer support workers.


That assumes a stable international situation. Pakistan has nukes. One bomb in India and all of the advantages, read "cheap," that Bangalore brought are gone. And so are companies that can no longer bring new products and services to the market. And there remains the language/cultural problems I mentioned.

So instead of complaining and speaking of "grants," the head of ATT should pick the phone up and start pushing for vouchers for the education system. After all, he does believe in competition.

Doesn't he??

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