The Real Cost of Obama’s Trip to India

November 5th, 2010 by Phil Mattera

The rightwing media machine is up in arms about a dubious report that the cost of President Obama’s trip to India will turn out to be more than $200 million a day, for a 2,000-person entourage. The White House calls the cost figure wildly inflated.

The manufactured controversy about cost is taking attention away from what should be the main story: who is accompanying the President on the trip and what do they hope to get out of it. A big part of Obama’s entourage will be scores of top U.S. corporate executives, who are seeking Obama’s help in initiating or finalizing big deals with the Indian government and Indian corporations. Numerous other U.S. companies are not sending executives on Obama’s trip but are still hoping the visit will advance their interests in India.

Among the deals that have been reported are: the sale of ten military transport planes worth some $5 billion by Boeing and the sale of $800 million in fighter jet engines to the Indian military and $500 million in heavy duty gas turbines to India’s Reliance Energy, both by General Electric. Other dealmakers are said to include Eaton Corp., John Deere, Caterpillar and Harley-Davidson.

In other words, a President endlessly denounced by the Right as a socialist, is serving as a shill for some of the country’s largest corporations. This is far from the first time an American president has acted as salesman-in-chief for American products, and the White House makes no apologies for the trip, claiming that it will result in the creation of thousands of jobs.

The problem is that it is far from clear that landing big deals for U.S.-based corporations will result in many jobs for U.S. workers. The list of companies with executives going to India with President Obama (or that stand to benefit from the trip) include some of the most notorious practitioners of offshore outsourcing.

Take the two heaviest hitters on the trip. Boeing has made a science of shifting work from its traditional manufacturing operations around Seattle to factories around the world. It has clashed repeatedly with its unionized workers over the issue. And when it’s not sending jobs abroad, it moves them to domestic non-union plants, such as its big new operation in South Carolina.

General Electric is another unabashed offshorer. In the early 1990s about one-quarter of the company’s employees were outside the United States; at the end of last year, 56 percent of them were. What’s especially frustrating is that GE is offshoring jobs in emerging fields such as renewable energy, thus depriving many American workers of a shot at the jobs of the future.

Eaton, a diversified manufacturer of industrial products, now has 27 facilities in China with some 10,000 workers as well as four research and development centers in the country. In April, John Deere opened a manufacturing plant and parts distribution center in Russia. It already had factories in low-wage countries such as Brazil, China, Ecuador, India and Mexico. Caterpillar has eight plants in China, eight in Mexico, three in India and many more in other countries. It recently opened a logistics center in China to support what a company press release called its “growing manufacturing footprint” in that country.

Harley-Davidson is an icon of U.S. manufacturing, but it just announced plans to open a new plant in India to assemble U.S.-made motorcycle kits. It is unclear whether this will increase or decrease jobs at the company’s American plants, which have been exporting fully assembled motorcycles to the Indian market.

It’s true that these companies have to do a certain amount of production in countries such as China and India to sell to local customers, yet it is also undeniable that these firms and others seeking benefits from Obama’s trip have been reducing manufacturing operations in the United States that previously supplied goods for both domestic and foreign markets.

There is no guarantee that the jobs Obama hopes to generate with his sales trip to India will end up going to Americans. The companies whose wares he is promoting are in many cases American only in terms of where their headquarters are located. They are all too willing to destroy the livelihood of U.S. workers in their global pursuit of cheaper labor and fatter profits.

That kind of behavior costs this country much more than what the President’s delegation could ever spend on its trip to India.

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