GM Bailout More Palatable With Cuts to IT Outsourcing

General Motor’s plan to slash its outsourcing and bring 90 percent of its IT services jobs in-house is a great thing for IT workers based in the U.S.  And there’s also the added bonus of potentially taking a bite out of the nation’s unemployment rate.

But there’s even more potential upside. It could make the billions of dollars U.S. taxpayers loaned to financially strapped companies like GM, Citigroup and American International Group (AIG) more palatable.

Remember the GM bailout? The motor city king took in over $50 billion in bailout bucks several years ago. And although it’s paid the government back in cash and GM stock, the full payment is as only good as how well GM’s stock is performing.

Of course, the key to making the GM outsourcing switch an exciting deal is that it doesn’t rob Peter to pay Paul. GM’s outsourcing partners are HP/EDS, IBM, Capgemini and Wipro. It’s unclear to what degree these companies assign the GM contract work to folks in the U.S., verses overseas.

GM’s decision to bring IT outsourcing in-house is in stark contrast to another bailout baby, Bank of America.

The nation’s second largest bank, which slurped up roughly $45 billion in bailout funds, announced last fall it was cutting 30,000 jobs. But now its apparently gearing up to hire lots of folks in the Philippines, says a Mother Jones article. These overseas jobs will be in the area of business support.

Although Bank of America may be biting the hand that fed it, at least GM isn’t likely giving tech taxpayers that same sense of lenders remorse.

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Comments

  1. BY US says:

    AIG should learn a lesson from GM. Heavily Outsoursing to non US and sending home US citizens who dedicated their lives to the company. I was shocked to hear the news that AIG created jobs?! May be for Offshore consultants…Good luck to our kids and to us!!
    I wonder who feeds the news! There were many silent layoffs in the first quarter and no one talked about them…..The big ones got big bonuses when they saved money to the company by letting fulltime employees go and by hiring offshore consultants.

  2. BY Pbug56 says:

    What GM appears to be doing is commendable. There are huge numbers of well trained people in the US without jobs – engineers, software developers and more. A lot of their jobs were lost when the big US based banks moved tens of thousands of jobs overseas.

  3. BY Frank says:

    This strategy is good for reducing costs. Replacing HP and Tata employees with lower paid Gm employees is not going to increase the number of jobs.

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