US election campaign puts spotlight on outsourcing

12 July 2012
Across the pond in the US a storm is brewing. The two forces fighting are the incumbent president Barack Obama and the man vying to evict him from the White House, Mitt Romney, and it is all blowing up over outsourcing. As the New York Times reports, both candidates have accused the other of sending American jobs abroad. Team Obama’s assertion is that as head of private equity firm Bain Capital, Romney was directly responsible for outsourcing jobs previously held by Americans abroad. The Romney campaign disputes this on the grounds their candidate did not play an active role in the company during that period and the company was not reducing US jobs in favour of foreign roles. Romney has already retorted: “If there’s an outsourcer in chief, it’s the president of the United States.” Team Romney alleges Obama has funded an exodus of jobs by giving money and loans, through his stimulus package to companies that have moved jobs to countries such as Mexico and Thailand. But the companies cited told the NYT that they were not receiving stimulus funding or reducing US workers and increasing those abroad. Whether all these allegations are true or not, it won’t prevent the issue becoming a major one (an anti-Obama website – obamanomicsoutsourced.com – has already been launched). What the row does illustrate is that as transparency has increased, so too has the threat outsourced activity or supplier conduct can have on corporate reputation and brand. Reports frequently show it rising up the list of concerns and buyers talk of how it plays a bigger role in the decisionmaking process. The public, press and anti-capitalist pressure groups are always on the lookout for the next stick to beat companies with, so this storm has the potential to be big. Buyers should consider how to avoid getting caught in the downpour.
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