Well, they may exist for the benefit of the stock holders but the stock holders don't always benefit by corporate actions and within a given devision it's often politics more than stock holder benefits that drive decsions.
Keep in mind that stock holders own stocks in a corporation. A corporation often consists of many devisions. Those devisions are baught, modified and sold. even when the stock holders make out (often they don't), the individual devision sometimes goes down the tubes. That's why I made a point of mentioning that the devisions that I moved are no longer owned by the corporations that moved them. These days, I think some of the investment groups are even better at this game than the big corporations. They buy and sell at a profit but sometimes the devision being baught and sold is destroyed in the process. Sometimes these moves are made solely for the purpose of making things look better on paper in preporation to be sold. there are all kinds of games...too many to go into here and I doubt I even know all of them but I've seen a few.
Out sourcing is a whole different subject. I was in manufacturing long enough to see things change from the days when we brought things in house (technology and tooling) for cost savings and strategic positioning to the days when we shipped it all out and tried to get paid for doing nothing but playing middle man.
I really don't know how to explain it in a couple of paragraphs. In the "old" days each of our plants had molding, stamping, plating screw machine and so on. If we could design it, we could build it. When a new technology was incorporated into a design, we brough it in house whenever possible. We actually got paid for value added work. Today, you hire someone to design a thing and hire mirades of others to fabricate parts, someone else to assemble, test and what not. then you expect to get paid for making all the phone calls. Our plants went from 3000 employees to 300 to ZERO. We used to joke that eventually all they would need was one little old lady and a phone. We were joking but it really happened. The siemens Lafeyette plant is still there but it isn't siemens and the building is mostly empty except for a few offices. BTW, the city paid for a good portion of that new building on the promise that the business was expanding. Someone should be in jail.
Further ist's usually only a theoretical advantage that is never financially realized. There are just too many propblems and hidden costs that aren't accounted for when the decision to move is made. The problem, if you want to consider it a problem, is one of a lack of ethics and competence on the part of those running our corporations.
I beg to differ. One can only wonder why there is virtually no heavy manufacturing in the United States. Or, for that matter, there's not a helluva lot of light manufacturing either. When was the last time you bought a US made fishing reel? TV set? Stick of bar stock? One can only wonder when heavy manufacturing is going to return to the US, given that most of the equipment has been scrápped or sold off and no infrastructure exists that would support its return.
Heavy manufacturing isn't going to return unless something really drastic changes. However, the steel industry and the electronics industry are very different situations. the moves that I was part of in the automotive and metering industries were just chasing cheap labor to make things look better on paper. As I said, labor content was a small part of the total cost so there easn't much to be gained even if it all worked out. Once you consider all the costs involved that aren't accounted for by looking at the direct labor standard (which often goes up) you see that the move is a big white elephant...it loses money.
When I say that the benefit is theoretical, what I mean is that the move is forcasted to be profitable but it often doesn't work out that way. The ficticious forcast gets some big shot out of trouble and the truth of the matter just gets burried in the accounting. ie, the cost of direct labor/hour drops. That looks good. You have to turn the page to see what went up. They aren't even good enough to be evil. They are ****** enough to not know where the money is going or why.
There is no accountability
I don't want this to get too long but it gets worse. Some of the accounting systems being used make it impossible to know where the money goes. For instance, in the old days, we knew what the standard cost and varience in labor, materials, returns rework or whatever per line, product or assembly. We manufacturing engineers used those numbers to plan out activities. The goals were simple, to keep an oporation to standard and to reduce the standard. One being a cost avoidence and the other being a cost savings. The "simplified" accounting systems being used today just give total numbers. You might know that you have 10 million dollars in s**** but figuring out where the s**** came from might not be so easy. You might know that you have a labor varience for the plant but you don't know which line or product has the varience let alone which oporations. In the "old days" I would get called on the carpet for each part, assembly, yield at a tester ect. In the end no one knew enough about what was going on to even know what I should be doing or if I was doing it. They couldn't even define a problem let alone know if I was taking care of it. Hell, I had no way of knowing where the problems were because they took away all my tools.
I just don't even know how to describe the gross incompetence.
Small wonder the US is becoming a two tier society in which the rich get richer and the poor get poorer.
No wonder at all and it's going to get worse.