Lenovo Moves Jobs Out of U.S.
On Friday, Chinese PC-maker Lenovo announced that it was relocating and cutting a total of 1,400 jobs. Of the 1,400 jobs affected, 650 will be eliminated and 750 will be moved to Brazil, China, India, and Slovakia, according to Reuters (via the NYT here). Lenovo, which purchased IBM’s PC division for $1.2 billion in 2005, is based in China.
According to the Financial Times, workers will be hardest hit in Raleigh, North Carolina, where roughly 20 percent of the current jobs will be cut or relocated. In explaining the relocation of jobs in emerging markets, Lenovo cited the desire to be “closer to [its] suppliers and manufacturing operations.” Which is another way of saying that the company is seeking lower-wage labor to help it compete more effectively.
Expect to hear from Democratic Presidential candidate and former North Carolina Senator John Edwards on this matter. Edwards has gained a strong following among Democrats and Independents seeking to protect American jobs from the forces of the global labor market. The Lenovo cuts are part of a larger trend of manufacturing job losses across the US, and I’m curious to hear Edwards’ ideas on this issue, which has the potential to shape the 2008 election.
April 22, 2007 at 9:31 pm
I think this was somewhat inevitable and it goes to show we should not be expecting Chinese companies to be creating US jobs on US soil for quite some time.
April 23, 2007 at 3:14 am
Thanks, always good posts on your blog!
April 24, 2007 at 1:09 am
The restructuring was probably inevitable for Lenovo. I didn’t mean to suggest that Chinese companies should be expected to creating jobs on US soil; I might have expected them to try to keep them there for longer, though, given political pressures in the US and sensitivity of American manufacturing job losses to China.
I am more interested to see what will happen when Chinese companies start outsourcing jobs from China to lower-wage labor in other emerging countries. Is there any news of this yet in China?