Friday, June 19, 2009

Business Idea: Offshoring To Detroit

Fact #1: As the U.S. government begins to impose more "buy American" provisions on the economy, companies will be pressured to stop outsourcing to China and India.

Fact #2: The median home price in Detroit has dropped to $5,000. That is not a misprint.

I smell an arbitrage opportunity. Why not buy up Detroit real estate and use it to create the American equivalent of Bangalore's corporate campuses? Create an autarky where you bring over Chinese and Indian engineers on H1Bs, house them in corporate housing in Detroit, and still pay them overseas rates.

It shouldn't matter to the employees whether they live in an American hellhole or a foreign one, as long as their needs are provided for, and they get paid the same or more.

Motor City is dead. Long live Bangalore on the Erie!

9 comments:

Anonymous said...

shame

Pritesh said...

Great Idea, Chris. If it's implemented correctly, it leads to huge benefits for Detroit and local companies. Though I have few more suggestions on it:

- Instead of hiring H1 visa workers from India or China, it's easy to hire local ppl and train them. They do not even need to pretend with fake accents!

- Why did I mention above point? Because Bangalore is no longer call-center city. Every major IT and other service industries are moving their base or at least some divisions to an Indian city. It's easy to train ppl on communication skills than make them experts in chip designing.

- Also, it does not make sense to hire ppl from these countries and sponsor them on H1 visa. There's been already so much controversy going on with H1 visa sponsor companies- how they manipulate visa. We do not want to go further into it.

- Few call-centers are already moved to other countries; such as Thailand, Singapore, and Latin America from India. This is purely cost cutting and it has nothing to do with talents in India or Thailand.

- Few years ago, I read an article about having a call center in US prison. Why can't we do that in every prison? On top of it, Government subsidiary can also be given to companies who do that. (source: http://www.usatoday.com/money/economy/employment/2004-07-06-call-center_x.htm)

Cheers..
Pritesh
http://twitter.com/mehta1p

Anonymous said...

Wow. Not only morally reprehensible, but stupid too.

First off, companies shouldn't be paying anyone "hellhole" wages. Part of what financially punishing business for offshoring is about is removing the economic impetus to exploit foreign workers at the expense of Americans. Creating artificial conditions to exploit them here rather than there is not better, and it would just make the U.S. in to Saudi Arabia, with its huge, fetid foreign worker compounds.

Second, with Fordlandia, Henry Ford already tried creating a business-centered autocracy that imposed a foreign place and culture on workers, and he failed miserably.

Anonymous said...

This is why 95% of the world hate americans. You have no sense whatsoever of what's morally correct, and worst of all, try to sell the idea that you do!

There's always a need to read between the lines:

"We Americans have the responsibility to spread democracy" == "Let's show them new ways for slavery"

You make me sick.

lazyweb said...

Where does the morality come from? Times change, economies change, situations change... The idea is a valid one. Dollar is down and I feel, soon to be replaced as the default currency, Detroit's best export was techno, and that was 15 years ago and the opportunity for cheap workers who get high tech training is a win for both sides. It's America! Get trained, get good, get a new job! The "Morality" era cost America dearly over the last 8 years. It's time to be realistic. I'd move to detroit if I was just starting out in the web biz... I'd do 3-4 years and then switch jobs with my skill set... again, what's the problem? Hmm?

Alex said...

It certainly seems like a valid place to start an early stage company. Rent is often the biggest expense for capital starved start ups.

breck said...

cool idea. but where do you get that fact?

i see that the median home price in metro detroit is $117k. that's more than an order of magnitude off

Antoine Clarke said...

I see the "I'd rather force other people to die in poverty than let them earn a low-paid living" brigade are out in force (mostly hiding in anonymity).

I guess Detroit is "too big to fail" so it will rust into a heap of scrap metal and rotten concrete with high taxes, all the welfare other people's money can buy, and memories of greatness.

Jeremiah said...

I'll admit Chris, when I first read this post it really put me off. But if land is that cheap, there is great opportunity there. I hope something more housing H1-b visa employes can be done.

And the second I read the post, I think I'm getting a hint of sarcasm from you