THE CHANGING NATURE OF CORPORATE GLOBAL RESTRUCTURING: 

THE IMPACT OF PRODUCTION SHIFTS ON JOBS 

IN THE US, CHINA, AND AROUND THE GLOBE 

Submitted to the US-China Economic and Security Review Commission 

By Dr. Kate Bronfenbrenner 

Director of Labor Education Research 

Cornell University 

and 

Dr. Stephanie Luce 

Research Director and Assistant Professor 

University of Massachusetts Amherst 

October 14, 2004
Executive Summary 

Despite the increasing amount of trade between China and the US, and the increase in foreign 

direct investment from the US into China, there is no government body that collects information 

detailing the incidence of production shifts out of the US to China or any other country. In the 

fall of 2000, the predecessor to the US-China Economic and Security Review Commission 

(USCC) commissioned Cornell and the University of Massachusetts Amherst to study the extent 

and nature of production shifts out of the US and into China from October 2000 through April 

2001. In order to conduct this research we developed a methodology that involves a combination 

of online media tracking and corporate research and the creation of a database including 

information on all production shifts announced or confirmed in the media during that period. In 

July 2004 the USCC asked us to update that research, starting with an initial period of January 1 

through March 31, 2004. 

In this report we provide our findings, for January through March 2004. Major highlights 

include: 

• There has been a major increase in production shifts out of the US in the last three years 

particularly to Mexico, China, India, and other Asian countries. There were 69 

announced or confirmed production shifts to Mexico, followed by 58 shifts to China, 31 

to India, 39 to other Asian countries, 35 to other Latin American and Caribbean 

countries, 23 shifts to other countries including Eastern and Western Europe and Canada. 

This compares to 2001, where during the same three month time period we found only 25 

shifts to China, 30 to Mexico, and 1 to India. 

• With 58 shifts to China, the US is the primary source of production shifts into China. 

However, this is followed closely by Europe, which had 55 shifts. There were 33 shifts 

from other Asian countries to China, primarily Japan, Taiwan, the Philippines and 

Singapore. 

• Unlike in 2001, when the majority of shifts were simple site-to-site shifts with one 

company shifting production from the US to a single destination country, today we find 

that of the 255 shifts out of the US, 48 percent were simultaneous shifts to ënear-shoreí 

countries in Latin America (primarily Mexico) and to China and other ëoffshoreí 

countries in Asia. This trend was a global phenomenon, with countries in Europe 

simultaneously shifting work to Eastern Europe and Asia, and countries in Asia shifting 

both to neighboring countries and China. 

• Altogether we found announcements or confirmations for shifts of 48,417 jobs out of the 

US to other countries in January-March including 23,396 to Mexico, 8,283 to China, 

3,895 to India, 5,511 to other Latin American countries, 4,419 to other Asian countries, 

and 2,933 to all other countries. Based on our estimates that media tracking captures 

approximately two-thirds of production shifts to Mexico and about a third of production 

estimates to other countries, these data suggest that in 2004 as many as 406,000 jobs will 

be shifted from the US to other countries compared to 204,000 jobs in 2001. 
ii 

• Based on our estimates, as many as 99,000 jobs are shifted from the US to China and 

140,000 jobs will be shifted to Mexico this year compared to approximately 85,000 jobs 

to each country in 2001. However, because more than a third of the shifts to China were 

simultaneous shifts to multiple destinations in Latin America, Asia, or other regions of 

the world, jobs lost from shifts to China are often directly linked to job losses to other 

countries both, near and off shore. 

• These data also suggest that the Bureau of Labor Statistics (BLS) estimate of jobs lost 

due to the shifting of US jobs out of the country grossly underestimates the total number 

of jobs lost. While BLS reported 4,633 private sector workers in establishments with 50 

or more workers lost their jobs due to global outsourcing in January-March 2004, we 

were able to find solid confirmation for an absolute minimum of 25,000 jobs shifting out 

of the US during that same period. 

• Today production shifts from the US to China represent a cross section of industrial 

sectors including apparel and footwear, sporting goods and toys, wood and paper 

products, aerospace, appliances, household goods, industrial equipment and machinery, 

electronics and electrical equipment, metal fabrication and production, chemicals and 

petroleum, textiles, and plastics, glass, and rubber. This contrasts with 2001 when most 

production shifts to China were concentrated in a few industries: electronics and 

electrical equipment, chemicals and petroleum, household goods, sporting goods and 

toys, textiles, wood and paper products. 

• Workers have filed Trade Adjustment Assistance (TAA) claims in only 31 percent of the 

cases where production shifts occur. This appears to be a consequence of the inherent 

challenges in proving that work actually shifted out of the country and the fact that TAA 

petitions for workers in non-manufacturing jobs in IT or call centers have been 

consistently denied by the Labor Department because the workers are not producing a 

product as defined by the TAA. 

• Unionized workplaces are being disproportionately affected by US production shifts. 

Twenty-nine percent of the companies shifting production out of the US were unionized 

and 39 percent of all jobs being shifted out of the US are from unionized facilities. Fiftythree percent of jobs shifting out of the US to Mexico and 34 percent of jobs shifting to 

China are unionized. Even taking into consideration the higher union density rate in the 

industries where many of the production shifts are concentrated, these numbers far 

exceed the union density rate in those industries. 

• The companies shifting jobs from the US to China tend to be large, publicly held, highly 

profitable, and well-established. Seventy-six percent of the facilities impacted by the 

production shift have been in operation for more than 20 years. At the same time, 55 

percent have been under their current ownership for no more than ten years. Seventy-two 

percent are owned by US multinationals. 
iii 

• The region that has seen the most jobs shifted overall is the Midwest, which lost 18,938 

jobs to offshoring between January and March 2004. The Southeast lost 8,604 jobs, 

followed by the Northeast that lost 7,223 jobs. In terms of specific states, the state of 

Illinois had the greatest number of jobs lost (7,555) almost all of which went to Mexico. 

It was followed by Michigan, which lost 5,283 jobs, mostly to Mexico. North Carolina 

witnessed the greatest number of jobs moving to China, with 839 for January-March. 

There were 773 jobs moved from Ohio to China, 650 from California, and 510 from 

Indiana during the first quarter of 2004. 

• Unlike shifts from the US to China, shifts from other Asian countries into China tend to 

be more concentrated, particularly in electronics and electrical equipment production, as 

well as textiles and metal fabrication and production. Shifts from Europe to China are 

primarily concentrated in electronics, chemicals and petroleum, and metals industries. 

• In contrast with our 2001 study, we also found a significant increase in production shifts 

to India, particularly IT, call center and other white-collar occupations from the US and 

UK. Similarly we captured an increasing trend in large production shifts from Western 

Europe to Eastern Europe and from higher wage Asian countries to lower wage countries 

in the same region. 

• We conclude that our data speak to a growing phenomenon of global corporate 

restructuring and capital mobility. Throughout the world, US and foreign owned 

multinationals are simultaneously shifting production from high-wage countries to 

multiple low-wage destinations, both near shore and off shore, with China as one of the 

primary destinations for all countries. Yet, three years after our original report to the 

USCC, there continues to be no government mandated reporting system to track 

production shifts out of the US. Absent government-mandated reporting, the continued 

funding of research such as this becomes essential to efforts to track the changing trends 

and effects of global capital mobility on US workers and the US economy. 
Table of Contents 

Executive Summary .................................................................................................................... i 

Introduction ................................................................................................................................1 

Research on global production shifts ...........................................................................................3 

Research design and methodology...............................................................................................8

Challenges of media tracking research...................................................................................14 

Overview of media tracking data...............................................................................................15 

Production shifts out of the US..................................................................................................25 

Job losses from US-based production shifts...........................................................................25 

Trade Adjustment Act Data...................................................................................................31 

Markets.................................................................................................................................33 

Union status ..........................................................................................................................36 

US region of origin................................................................................................................41 

Company characteristics and structure...................................................................................47 

Impact of US production shifts on workers and communities ................................................50 

Estimates of annual job losses from production shifts out of the US ......................................53 

Production shifts out of other countries into China ....................................................................57 

Jobs lost in production shifts from other countries into China................................................57 

Industrial sector for production shifts into China ...................................................................58 

Company characteristics and structure for shifts into China...................................................59 

Global production shifts ............................................................................................................64 

Global shifts in textiles..........................................................................................................71 

Global shifts in white-collar occupations ...............................................................................72 

Global shifts in manufacturing.............................................................................................726 

Conclusion................................................................................................................................78 

Works Cited..............................................................................................................................82 
Table of Tables 

Table 1: Production shifts out of the US, announced or reported, January-March 2004..............16 

Table 2: Production shifts to China from other countries, announced or reported, January-March 

2004 ..................................................................................................................................22 

Table 3: All production shifts in media tracking study, announced or reported, January-March 

2004 ..................................................................................................................................24 

Table 4: Distribution of production shifts out of the US by industry and destination country, 

JanuaryñMarch 2004 .........................................................................................................29 

Table 5: Trade Adjustment Assistance Act (TAA) applications and certifications, by destination 

country and economic sector for shifts out of the US, January-March 2004 .......................31 

Table 6: Production shifts out of the US by region, January-March 2004...................................42 

Table 7: Number of jobs lost and number of production shifts out of the US for twenty five states 

with highest job losses, January-March 2004.....................................................................44 

Table 8: Company structure for production shifts out of the US, January-March 2004...............47 

Table 9: Company characteristics for production shifts out of US, January-March 2004............49 

Table 10: Estimates of total annual job loss from production shifts out of the US, 2001 and 2004

..........................................................................................................................................55 

Table 11: Distribution of non-US production shifts into China by source country and industry, 

January-March 2004..........................................................................................................59 

Table 12: Company structure for production shifts into China by source country, January-March 

2004 ..................................................................................................................................60 

Table 13: Company characteristics for production shifts into China by source country, JanuaryMarch 2004 .......................................................................................................................61 

Table 14: Comparative characteristics of global production shifts by destination country, all 

source countries combined, January-March 2004...............................................................66 

Table 15: Global production shifts out of the US by industry and destination country, JanuaryMarch 2004 .......................................................................................................................70 
Table of Figures 

Figure 1: Number of production shifts out of US announced or relocated by month, JanuaryMarch 2004 .......................................................................................................................12 

Figure 2: Number of production shifts out of other countries, announced or relocated by month, 

January-March 2004..........................................................................................................13 

Figure 3: Number of Jobs Shifted out of US, January-March 2004 ............................................26 

Figure 4: Total number of jobs lost from production shifts out of the US by industry, JanuaryMarch 2004 .......................................................................................................................27 

Figure 5: Unionization rates for companies shifting production out of the US, by destination 

country, January-March 2004 ............................................................................................36 

Figure 6: Number of union and non-union jobs lost from the US by destination country, JanuaryMarch 2004 .......................................................................................................................37 

Figure 7: Percentage of production shifts in US region by destination country, January-March 

2004 ..................................................................................................................................43 

Figure 8: Parent company country for foreign-owned multinationals for all production shifts out 

of the US, January-March 2004 .........................................................................................48 

Figure 9: Number of jobs lost from production shifts into China, from the US and other 

countries, January-March 2004..........................................................................................58 

Figure 10: Percent of global production shifts into each destination country, by country or region 

of origin, January-March 2004...........................................................................................65 

Figure 11: Shifts in white-collar work by industry, all countries origin, January-March 2004 ....72 

Figure 12: Shifts in white-collar work by type of service, all countries, January-March 2004 ....73 

Figure 13: White-collar shifts by destination country, January-March 2004...............................73 
Introduction 

 In 2001 we were commissioned by the US Trade Deficit Review Commission (the 

predecessor to the China Economic and Security Review Commission) to conduct a pilot study 

on the impact of US-China trade relations on workers, wages and employment in the US. The 

findings from our study were incorporated into the China Economic and Security Review 

Commissionís July 2002 Report to Congress. In particular the Commission recommended, 

consistent with our findings: 

[T]he creation of a federally mandated corporate reporting system that would 

gather appropriate data to provide a more comprehensive understanding of the 

US trade and investment relationship with China. The reporting system should 

include reports from US companies doing business in China on their initial 

investment, any transfers of technology, offset or R&D cooperation associated 

with any investment, and the impact on job relocation and production capacity 

from the United States or US firms overseas resulting from any investment in 

China (USCC 2002: 5).

 

Three years later, in July 2004, with still no government mandated monitoring system in place, 

the Commission asked us to update our 2001 research by examining current trends in production 

shifts from the US to China and other countries, and whether there had been a change in the 

nature and extent of global production shifts out of the US and into China since 2001.1

 

Our 2001 report was written just after the US approved Permanent Normal Trade 

Relations (PNTR) to China. At the time, there was much speculation that the granting of 

PNTR, and Chinaís subsequent entry into the World Trade Organization (WTO), would 

dramatically increase the amount of direct investment from the US into China. Congressman 

 

1

 The authors would like to thank the following research staff who worked on this project: Robert Hickey, Senior 

Research Assistant, Cornell ILR; Tamara Lovell, Research Aide, Cornell ILR; Liana Fox and Patrick Furey, 

research assistants, University of Massachusetts Amherst Labor Center; and Cindy Cho, Paul Hayes, Laura 

MacDonald, and Ed Yoo, research assistants, Cornell ILR. 
Corporate Restructuring and Global Capital Mobilityñ page 2

Bob Ney (R-OH) declared the result would be hundreds of thousands of jobs lost in the US 

(Deans 2000: 2E). 

 However, the years since 2001 have seen significant events that might suggest a 

slowdown in capital movement to China, in particular the combined impact of 9-11, economic 

recession, and the outbreak of SARS. Yet most data suggest that trade with China has steadily 

increased since 2001, including exports from the US to China, as well as imports from China to 

the US (US Department of Commerce 2004). 

 What has been the impact of this increased investment and trade on employment and 

economic security? Despite the importance of the topic, the lack of government mandated 

reporting of production shifts out of the US means that there are no hard data to answer these 

questions. The purpose of this study is to help fill this void by capturing the nature and extent of 

production shifts out of the US for the first quarter of 2004.2

 This will allow us to get an initial 

view of changing trends in production shifts three years after the granting of PNTR to China and 

Chinaís entry into the WTO. The updated database will also allow us to make comparisons of 

job shifts with our initial data from 2001. 

In this report we present our findings on production shifts out of the US and into China 

that were announced or confirmed to have taken place between January 1, 2004 and March 31, 

2004, along with a comparison to the 2001 period. Below, we first review other sources that 

attempt to estimate the number of jobs moving from the US to China. We then present our 

research methodology and findings. 

 

2

 Due to the time and financial constraints under which the Commission must operate, this study was limited to the 

first three months of 2004. However, once this phase is completed, we hope to work with the Commission to 

conduct the second phase of the study, which will be to expand our database to include production shifts which 

occurred April 1-June 30, 2004 and to conduct in-depth case studies on the impact of these production shifts on 

workers and communities across the US. 

 
Corporate Restructuring and Global Capital Mobilityñ page 3

Research on global production shifts 

Despite the increased interest in tracking the number of jobs shifted from the United 

States to other countries, there are little hard data on the actual nature and extent of production 

shifts. Much of the new research focuses on the service sector and those industries such as 

information technology (IT) and call centers that make up the new wave of job relocations. 

Additional insights can be gained from the limited number of surveys of top executives and their 

experiences and projections of offshore outsourcing. On a macroeconomic scale, a number of 

studies attempt to estimate the number of jobs involved by modeling changing trends in trade 

data. 

As mentioned above, in 2001 we developed the first tracking system of production shifts 

through systematic research of print and on-line media sources.3

 Our report, ìImpact of the USChina Trade Relations on Workers, Wages and Employment,î identified some eighty production 

shifts from the US to China, involving an estimated 34,900 jobs for the first seven months after 

PNTR was passed in October 2000 (Bronfenbrenner et al. 2002). During this same period we 

found that 29,267 jobs shifted to Mexico, 9,061 jobs to other Asian countries, and fewer than 

1,000 jobs to other Latin American countries. However, because only a portion of actual 

production shifts are captured in the on-line media, we found that media tracking significantly 

underestimated the number of jobs involved. We estimated that the actual number of jobs 

involved in production shifts from the US to China and Mexico each year totaled between 70,000 

and 100,000. This number matches our 2001 studyís macroeconomic findings that calculated a 

loss of 770,000 jobs from the US-China deficit from 1992 to 2000. 

 

3

 The European Foundation for the Improvement of Living and Working Conditions employs similar tracking 

methods as part of its European Restructuring Monitor program. This foundation, established by the European 

Union, uses media reports to track all forms of economic restructuring, such as outsourcing, relocation, and closures. 

http://www.emcc.eurofound.eu.int/erm/ (EMMC 2004). 
Corporate Restructuring and Global Capital Mobilityñ page 4

In addition to capturing the extent of production shifts out of the US to China and other 

countries, our 2001 study also provided important insights into the kinds of companies and jobs 

that were leaving the US and the impact these production shifts were having on workers and 

communities around the globe. As we described in our 2001 report, ìthe US companies that are 

shutting down and moving to China and other countries tend to be large, profitable, well 

established companies, primarily subsidiaries of publicly-held, US-based multinationalsî 

(Bronfenbrenner et al. 2002: ii). 

Where in past years production shifts to China had been concentrated in low-skill light 

manufacturing, by 2001 an increasing percentage of the jobs shifting to China were in higher-end 

manufacturing of goods such as bicycles, furniture, motors, compressors, generators, fiber optics, 

injection molding, and computer components. We also found that the majority of firms shifting 

production to China were not simply targeting a Chinese market. From Mattel Barbie Doll 

Playhouses to Samsonite luggage, Rubbermaid kitchenware, and Lexmark printers, many of 

these companies shifting work to China were targeting a US and global market. 

When we first released our media tracking findings in the fall of 2001, the big story in 

terms of production shifts was the hemorrhaging of the US manufacturing sector. Ninety-nine 

percent of all the employment losses that we found in our study were in manufacturing 

industries, with just a handful in call centers and banking services. Media reports and academic 

research on outsourcing had yet to forecast a significant increase in global shifts in service sector 

and IT employment. 

Today, a very different picture is emerging of the kinds of jobs and industries that can 

easily be shifted across borders and around the world. The most widely cited projections come 

from Forrester Research Inc, a research and consulting firm specializing in technology trends. 
Corporate Restructuring and Global Capital Mobilityñ page 5

Forrester recently increased their predictions for the number of US service jobs outsourced 

overseas to 830,000 by 2005. Projecting further into the future, Forrester predicts that as many 

as 3.4 million service jobs will move off shore by 2015 (Hilsenrath 2004). Gartner, another 

industry research and analysis group, predicts that 10 percent of US technology jobs will be 

moved off shore by 2005 (Krim 2003). 

Berkeley economist, Dr. Cynthia Kroll, estimates that as many as 14 million jobs in the 

US are at risk for outsourcing (Kroll 2004). Jobs that are most ìat-riskî require no face-to-face 

customer service, use remote telecommunications technology, and have high wage differentials 

between countries. 

A number of management consultant groups have conducted surveys of executives on 

their experiences with offshore outsourcing. The consulting firm DiamondCluster found in 

March 2004 that 86 percent of companies polled expected to send more technology jobs overseas 

in the next year (Brown 2004). This compares to just 32 percent of companies polled two years 

earlier. Watson Wyatt surveyed thirty-three multinational corporations regarding their 

offshoring practices (Wyatt 2004). India was the top destination reported by the companies as a 

target destination for offshoring jobs (84 percent) followed by China (45 percent). Thirty-five 

percent of respondents anticipated a significant increase in offshoring of customer service and 41 

percent anticipated an increase in offshoring of internal support services. Confirming the 

growing trend of high-end professional offshoring activity, Watson Wyatt found that 24 percent 

of the companies planned to significantly increase the offshoring of research and development 

(R&D) and professional services. 

A recent study of offshoring trends in the global telecommunications industry by 

consulting firm Deloitte Touche Tohmatsu confirms that offshoring of IT and back office 
Corporate Restructuring and Global Capital Mobilityñ page 6

operations is not simply a US phenomenon (Deloitte Touche Tohmatsu 2004). The survey of 

forty-two of the leading telecommunications companies worldwide found that 32 percent of the 

companies surveyed had already begun to shift work from high-cost to low-cost countries, 

another 2 percent had definite plans to offshore work in the near future, and 7 percent were 

evaluating offshoring work in their company. Only 20 percent of those surveyed reported that 

they had decided, for the time being, against offshoring. The study reported that the primary 

reasons given for offshoring in the telecommunications industry were cost reduction (53 

percent), improved quality (19 percent), accelerated processes (11 percent), and post merger 

ërationalizationí (10 percent). Based on their findings Deloitte predicts that by 2008, 5 percent 

of the global technological workforce, approximately 270,000 jobs, will be located in what they 

call ìlow-cost offshore centersî in locations such as India, China, and Eastern Europe (2004:5). 

The loss of nearly 3 million manufacturing jobs in the past four years has also sparked 

studies examining the nature and causes of the rapid decline of manufacturing employment. 

Several studies have specifically considered the impacts of trade and production shifts on the US 

manufacturing sector. In February 2004, the Congressional Budget Office (CBO) report, ìWhat 

Accounts for the Decline in Manufacturing,î found that decreases in domestic demand and 

increases in productivity were significant contributing factors (Congressional Budget Office 

2004). The CBO also cited increasing competition from foreign producers and changes in the 

structure of manufacturing employment as additional factors causing decline in manufacturing 

employment. The Economic Policy Institute (EPI) contends that as much as 59 percent of the 

loss in manufacturing employment in recent years can be attributed to the growing trade 

imbalance (Bivens 2004). 
Corporate Restructuring and Global Capital Mobilityñ page 7

Beginning in January 2004, the US Department of Labor, Bureau of Labor Statistics 

(BLS) began recording data on job loss related to the movement of work as part of the Mass 

Layoff Statistics program (BLS 2004a). The BLS program surveys companies that employ fifty 

or more workers where at least fifty individuals have filed for unemployment insurance during a 

five-week period and the layoff lasted for more than 30 days. BLS found that only 4,633 

workers were separated from their jobs for at least thirty-one days as a result of the movement of 

work outside the US in January-March 2004. Thus, according to BLS data on extended layoffs, 

only 2.5 percent of the 239,361 private sector non-farm workers were laid off due to overseas job 

relocations in the first quarter of 2004. BLS will continue to release data on job relocations as 

part of its quarterly reports on Extended Mass Layoffs. The fact that these numbers are 

strikingly lower than all other estimates most likely reflects that they are limited to self-reporting 

by employers in a climate where there has been significant negative pushback from the media, 

politicians, and the general public on the outsourcing of US jobs overseas. 

 In addition to these sources, there has been an explosion of interest among the general 

public in tracking the companies that are shifting jobs from one country to another. Examples 

range from CNNís ìExporting Americaî features on Lou Dobbs Tonight (2004), to the 

Washington Alliance of Technology Workers outsourcing website (Techs Unite 2004). While 

these organizations attempt to provide accurate listings of companies that have at some point 

shifted jobs and production out of the US, they do not tend to follow a rigorous research 

methodology to reliably capture when the shifts occurred, the actual numbers of jobs shifted to 

each country, and the characteristics of the companies and jobs that are being shifted. Still, the 

groups highlight the increased public awareness of the practice of global outsourcing of jobs and 
Corporate Restructuring and Global Capital Mobilityñ page 8

the policy implications of job dislocations for workers, unions, communities, business, and 

government. 

Absent government mandated reporting and disclosure of employment location and 

service or product sourcing, tracking the number of jobs impacted by production shifts will 

remain an imprecise science. Media-tracking currently offers the only source of hard data 

collection to measure the nature and extent of production shifts taking place in the global 

economy. However, given the extremely sensitive nature of negative corporate exposure over 

the issue of outsourcing jobs and the number of production shifts that are never reported in 

online media sources, such media reports capture only a fraction of the actual shifts that occur. 

Research design and methodology 

To calculate the number of planned or actual job shifts, we replicated the core of our 

research methodology from our 2001 study. We constructed a database of firm and job 

relocations using an extensive search of English-language media sources, relying heavily on 

international, national, and regional news sources in Lexis-Nexis, the premiere database for full 

text global news sources. We searched for cases of plant closings and relocations from the US to 

China, using a complex Boolean search string,4

 on a day-by-day basis for January 1, 2004 

through March 31, 2004. 

 

4

 After extensive experimentation with various search strategies the following Boolean search string was developed 

for use with China searches and then adapted for searches for each destination country: ((plant OR factory OR 

facilit! OR manufacturing OR operation OR unit OR headcount OR production OR jobs OR employment OR "high 

tech" OR "white-collar" OR "call center" OR "back office" OR "software" OR "business process" OR 

ALLCAPS(it)) w/p (clos! OR shift OR shut OR relocat! OR restructur! OR move OR transfer! OR outsourc! OR 

offshor! OR near shor! OR global sourc! ) and (china OR shanghai OR beijing OR hangzhou OR chengdu OR 

guangzhou OR tianjin OR xiamen OR guangdong OR wuhon OR dalian)) OR subject ("new plants" OR outsourc! 

OR closings OR offshor!) AND (china OR shanghai OR beijing OR hangzhou OR chengdu OR guangzhou OR 

tianjin OR xiamen OR guangdong OR wuhon OR dalian). 
Corporate Restructuring and Global Capital Mobilityñ page 9

For purposes of comparison, we collected data on job shifts from the US to other Asian 

countries, Mexico, and other Latin American countries; and production shifts from Asia, Europe, 

and other countries into China, other Asian Countries, and Latin American countries. However, 

unlike in our previous study, we did not limit our data reporting to those countries focused on in 

our targeted searches. For all cases where we found that companies had shifted production to 

multiple countries, including Canada and countries in Eastern and Western Europe, the Middle 

East, and Africa, which were not included in our search string, we also included information on 

those shifts in our database. Obviously, because we did not conduct targeted searches for these 

countries, our findings on production shifts to countries outside of Asia and Latin America 

greatly underestimate the extent of production shifts to these countries, particularly from 

Western to Eastern Europe. However, these data do provide information on where these other 

production shifts are happening and the kinds of companies and industries where production 

shifts into these countries are concentrated.5

For each case where we were able to confirm a planned or actual production shift, we 

then did follow-up research for additional or corroborating information, which was all entered in 

the database. This included descriptive information on the company name, location, parent 

company, parent company country for the base company, as well as information on the location 

of the city and country where the production was shifted. In addition, more specific information 

 

5

 In the short time period and with the limited funding available for this study we focused our research on actual 

shifts in production where jobs were lost in one country and moved to another. Thus we did not record expansions, 

where, for example, a US company would increase production, expand operations, or increase investment in 

production in another country without a concurrent loss of production in US sites and locations. Yet, in the process 

of conducting our research on production shifts, we have found just as many, if not more, announcements of 

companies shifting their expansion of production and investment in new ventures out of the US. We believe it 

would be extremely important to consider including announced expansions in future research, given the likelihood 

that any expansion of operations in another country, rather than investing in operations and increased employment in 

the country where the production originates, will likely result in job losses in the base country in the long term. 

Unfortunately the connection between expansion of foreign production in one time period, and subsequent layoffs 

and plant closures in domestic facilities, can often only be assumed, and rarely verified. 
Corporate Restructuring and Global Capital Mobilityñ page 10

was collected on the base company including years in operation, years under current owner, 

industry, product, date of announcement, date of relocation, and the parent company structure 

(publicly or privately held), annual revenue, net income, and total employees worldwide. 

In addition to Lexis-Nexis, we utilized a variety of data sources and on-line databases. 

This includes January 2004 ñ August 2004 issues of the Plant Closing News, a monthly 

newsletter of US plant closings produced by Project Development Services (2004); the database 

on outsourcing and offshoring maintained by the Communication Workers of America (Techs 

Unite 2004); the CNN/Lou Dobbs ìExporting Americaî database (Lou Dobbs Tonight 2004); the 

ISI Emerging Markets database (ISI Emerging Markets 2004) and websites that track 

outsourcing, such as openoutsource.com (OpenOutsource 2004). In addition we used other online company news and information sources such as ABI-Inform, FACTIVA, Business and 

Company Resource Center, Dun and Bradstreetís Million Dollar Database and Business Source 

Premier, most of which are fee-for-service sites available through our university libraries. 

For each notice of a potential plant closing or production shift, we reviewed company 

records, including annual and quarterly reports, SEC filings, conference call transcripts, 

company web sites, and press releases in order to confirm that the job shift actually took place. 

We also checked local newspapers for additional media coverage to confirm closings or details 

about the company. We used both Hooverís Online business information database 

(www.hoovers.com) and Mergent OnLine (www.mergentonline.com) to collect parent company 

data, such as annual revenue and net income, total number of parent employees, as well as 

company ownership history. We relied on the AFL-CIOís UNICORE database to confirm data 

on unionization for all US companies. In addition, we utilized government data sources to track 
Corporate Restructuring and Global Capital Mobilityñ page 11

plant closings including Trade Adjustment Assistance (TAA) applications and determinations,6

as well as Worker Adjustment and Retraining Notification (WARN) notices.7

 

Each job shift to a particular country was entered as a single record. In our 2001 study 

almost all of the production shifts involved a company shifting production to just one country at 

a time. In contrast, in our current study we found a significant increase in the number of 

companies that shifted production out of the US to multiple countries (for example, they would 

lay off 600 workers in Michigan and announce that the jobs would be moved to Mexico, 

Malaysia and China.) In these cases, we entered three records ñ one for each shift to a country. 

If it was not possible to confirm the actual number of jobs moving to each country, we simply 

took an average, for example, in a case such as the one cited above, assigning 200 jobs to each of 

the three countries. For those countries that were moving some jobs to other sites within the 

source country as well as shifting production out of the country, we only reported the proportion 

of the jobs lost that we estimated left the source country. While this may result in an 

overestimation or underestimation of the jobs moving to a specific country in a specific shift, in 

the aggregate these estimations balance out and ensure that we accurately account for no more 

than the reported job loss for an individual company for all destination countries combined. 

In the data analysis, we use two different units of analyses. For information about 

companies shifting production, we use a firm-based database, where each company is only 

 

6

 The Trade Adjustment Assistance Reform Act of 2002 (107 P.L. 210) reauthorizes and amends the Trade 

Adjustment Assistance (TAA) program through fiscal year 2007. It is administered by the Employment and Training 

Administration of the US Department of Labor. For determinations on petitions filed see 

http://www.doleta.gov/tradeact/determinations.cfm. 7

 The Worker Adjustment and Retraining Notification Act was enacted in 1988. The Act requires employers to 

provide a minimum of sixty days advance notice of plant closings and mass layoffs in workplaces with one hundred 

or more employees. The notice may be provided directly to the workers, or to their union, the local government, of 

the state dislocated worker unit. It is a program under the Employment and Training Administration of the US 

Department of Labor, although the Department of Labor has no legal responsibility for administering or enforcing 

the law (Public Law 100-379 (29 USC. 210l, et seq.). For more information see 

http://www.doleta.gov/programs/factsht/warn.htm. 
Corporate Restructuring and Global Capital Mobilityñ page 12

represented once. When we focus on job shifts to the destination countries, we use an expanded 

database, where companies have multiple entries for each shift to a different country. For 

example, in cases where a company closes one site in the US but moves to three foreign sites, 

this counts as three job shift records (with the number of jobs shifted to each country calculated 

based on the total number of jobs lost in the company divided by the number of sites) but just 

one company record. Thus in the company record we have one case for each facility where jobs 

or production was shifted out of the US, while in the destination record we have a case for each 

country destination case. 

Because our search was focused on January through March, we did not include any shifts 

that were announced after March 31, 2004 or that occurred prior to January 1, 2004. However, 

when we found actual shifts that occurred in January-March, we searched backwards, prior to 

2004, to find when the company first announced that the shift would occur. Similarly, once we 

found an announcement of a production shift in the January-March period, we would then do 

follow-up searches to find if and when the shift actually occurred. 

Figure 1: Number of production shifts out of US announced or relocated by month, January-March 

2004 

0

10

20

30

40

50

60

70

Number of shifts

Announced 43 53 52 29

Relocated 30 21 29 31 66

Announced pre2004 January 2004 February 2004 March 2004 Relocated postMarch 2004

Announced JanMar 2004, not 

confirmed
Corporate Restructuring and Global Capital Mobilityñ page 13

In Figure 1, we provide data on the cases where we found companies to have either 

announced production shifts or actually shifted production (relocated) out of the US during our 

target period. As these data show, we found forty-three announcements that were made prior to 

January 1, 2004 for production shifts that occurred during our targeted period of January-March 

2004. There were then fifty-three announcements in January, fifty-two in February, and twentynine in March.8

 The number of relocations went from thirty in January to twenty-one in 

February, twenty-nine in March, and thirty-one some time after March 31, 2004. 

Figure 2: Number of production shifts out of other countries, announced or relocated by month, 

January-March 2004 

0

10

20

30

40

50

60

70

80

90

100

Number of shifts

Announced 15 61 45 36

Relocated 15 3 16 27 97

Announced pre2004 January 2004 February 2004 March 2004 Relocated postMarch 2004

Announced JanMar 2004, not 

confirmed

In Figure 2, we offer data on production shifts announced or reported out of other 

countries, besides the US, during our research period. For these shifts, we found fewer 

announcements in the pre-January period (fifteen), increasing to sixty-one in January, forty-five 

in February, and thirty-six in March. For the actual relocations, we find fifteen in January, only 

 

8

 The lower number for March reflects that often announcements of shifts did not get reported in the media until 

several months after the announcement occurred. Thus, if we expanded our search to include April and May, the 

number of March announcements would probably be at or above the number we found for January and February. 
Corporate Restructuring and Global Capital Mobilityñ page 14

three in February, sixteen in March, twenty-seven post-March, and as many as ninety-seven that 

were announced but we were never able to confirm during our time period. However, given that 

we limited our search to English language sources, we believe that these data severely 

underestimate shifts out of European and Latin American countries. While most of the Asian 

business media is translated into English, the Latin American and European business media is 

much less likely to be translated. Thus we would estimate that these numbers would increase if 

searches were conducted in Spanish, German, French, Italian and other European languages. 

Challenges of media tracking research

 As the above discussion reveals, enormous challenges are involved in developing a 

reliable and comprehensive media-tracking system. Although we have made significant progress 

from ten to twelve years ago when media searches involved endless hours hunched over 

microfiche readers and newspaper vertical files, online media searching remains a difficult and 

time-consuming endeavor. In particular, as the subjects of global offshoring and outsourcing 

become an increasingly hot topic in the media, the media tracking process becomes much more 

cumbersome, simply because we have to filter out all of the general discussion articles in order 

to find relevant articles about specific production shifts. 

Using the search keywords and criteria we established, our researchers averaged as many 

as five hundred articles per day of news for each country or region, of which five or fewer were 

actually relevant to the subjects they were searching for. This means that for every confirmed 

case they found, the researchers had to scan through several hundred articles. In addition to the 

difficulties in confirming cases, we also had to bear in mind at all times the other limitations of 

our searches and our sources, namely that (1) only a limited, albeit growing, selection of media 

sources has searchable online archives; (2) local news media are the least likely to have online 
Corporate Restructuring and Global Capital Mobilityñ page 15

media archives but the most likely to report plant closings and production shifts; (3) not all 

production shifts are covered in the media and we have no reliable way of determining how 

many are not covered; (4) media reports range greatly in the reliability, veracity, and 

comprehensiveness of the information reported; and (5) it would take staff and financial 

resources well beyond the scope of this research endeavor to thoroughly search all available 

online media data, much of which is available only from expensive fee-for-service and limitedaccess databases or has not been translated into English. 

 Based on these limitations, it is our assumption that the media-tracking data 

underestimate rather than overestimate the total number of production shifts out of the US into 

China and other countries, and from other countries into China and around the globe. In 

particular we believe that a significant percentage of production shifts out of Europe, Asia, and 

Latin America were missed by our searches because they were not covered in the major online 

English-language media sources on which we relied. Still, the data that we have been able to 

collect provide an excellent cross section of the kinds of industries, companies, occupations, 

regions, and communities that are affected by production shifts out of the US to China and other 

countries. In addition, we believe these findings provide valuable insights into the impact that 

US-China trade and investment policies and other US trade and investment agreements have had 

on workers and employment not just in the US but in other countries as well. 

Overview of media tracking data 

As shown in Table 1, we found a total of 255 facilities with announced or reported job 

shifts from the US to other countries in January-March 2004. 
Corporate Restructuring and Global Capital Mobilityñ page 16

Table 1: Production shifts out of the US, announced or reported, January-March 2004 

Number of 

announced/reported 

production shifts 

Percent of all 

production shifts 

from the US 

Percent 

production shifts 

confirmed

Percent shifted 

January ñ 

March 

China 58 23% 62% 43% 

India 31 12% 58% 42% 

Other Asian countries 39 15% 77% 64% 

Indonesia 1 0% 100% 100% 

Japan 2 1% 50% 50% 

Korea 6 2% 67% 67% 

Malaysia 6 2% 67% 67% 

Philippines 14 6% 93% 64% 

Singapore 5 2% 80% 60% 

Taiwan 2 1% 100% 100% 

Thailand 3 1% 33% 33% 

Mexico 69 27% 65% 48% 

Other Latin American and Caribbean 

countries 35 14% 77% 63% 

Brazil 7 3% 71% 71% 

Colombia 1 0% 100% 100% 

Costa Rica 6 2% 100% 67% 

Dominican Republic 3 1% 67% 33% 

El Salvador 6 2% 100% 67% 

Honduras 5 2% 40% 40% 

Jamaica 5 2% 100% 100% 

Trinidad 2 1% 0% 0% 

Eastern Europe 6 2% 33% 0% 

Cross Eastern Europe 2 1% 100% 0% 

Czech Republic 1 0% 0% 0% 

Hungary 2 1% 0% 0% 

Poland 1 0% 0% 0% 

Other countries9 17 7% 65% 41% 

Belgium 1 0% 0% 0% 

Canada 8 3% 75% 50% 

France 1 0% 0% 0% 

Ireland 2 1% 50% 50% 

Israel 1 0% 0% 0% 

New Zealand 1 0% 100% 100% 

Sweden 1 0% 100% 0% 

United Kingdom 2 1% 100% 50% 

Total US facilities with shifts 255 100% 66% 49% 

US facilities with multiple destination 

countries 121 48% 68% 54% 

Total number of destinations 475 -- -- -- 

 

9

 Because for phase one of this study we were only asked by the Commission to focus on production shifts into Asia 

and Latin America, only Asian and Latin American countries were included in our search string as destination 

countries for shifts out of the US. Thus any cases we found for other countries were found as a by-product of 

searches for shifts into Asia or Latin America. Thus these results are not representative of the actual number or 

percentage of production shifts out of the US to these other countries. 
Corporate Restructuring and Global Capital Mobilityñ page 17

Of these, the largest shareósixty-nine shifts, or 27 percent of all production shifts out of the 

USówere to Mexico. The second most common destination, with fifty-eight shifts, was China, 

followed by thirty-one shifts to India. No other single country stands out as a large destination 

for US jobs. Rather, Asia as a whole, except China and India, was the destination for thirty-nine 

shifts, and Latin American and Caribbean countries, except Mexico, were the destination for 

thirty-five shifts. Finally, six announcements were for shifts to Eastern European countries, and 

seventeen to other countries in North America (Canada), Europe, the Middle East, or Australia. 

Overall, we were able to confirm that 66 percent of the 255 announced shifts in our study 

actually occurred, with approximately one-half confirmed to have taken place in January through 

March, and the other half sometime in the seven to nine months after the announcement was 

made. 

What is particularly striking about these findings is the significant increase in production 

shifts to China over what we found in our research three years ago. In contrast to the fifty-eight 

production shifts from the US to China and sixty-nine production shifts to Mexico that we found 

to have been announced or reported in the first quarter of 2004, three years earlier, in JanuaryMarch 2001, we found a total of only twenty-five production shifts to China and thirty to Mexico 

in the period just after PNTR was passed. 

Even more dramatic are the increases in the number of production shifts to other Asian 

countries (averaging about thirteen per month) and other Latin American countries10 (averaging 

about eleven per month), given that in the 2001 study the number of production shifts to other 

Asian countries averaged fewer than six per month and the number to other Latin American 

countries averaged fewer than two per month. Equally significant is the fact that although there 

 

10 From this point forward ìother Latin Americaî refers to all Caribbean, Central American, and South American 

countries, excluding Mexico. 
Corporate Restructuring and Global Capital Mobilityñ page 18

has been an escalation in production shifts to China, India and other Asian countries, Mexico 

continues to be the primary destination for jobs leaving the US, more than ten years after 

NAFTA was passed. 

The number of job shifts out of the US to India (thirty-one) has greatly increased since 

2001, when we found only one company had shifted production to India between January and 

March. Still, given the intense media coverage regarding outsourcing of white-collar jobs to 

India in 2004, the number of shifts to India from the US might seem lower than expected. In part 

this may be because the negative public reaction to the white-collar outsourcing issue has made 

companies reluctant to make public announcements about job shifts. Thus, corporations that lay 

off workers in the US and expand operations in India may try to deny or obscure a direct link 

between the two events. 

For example, in late 2003 Accenture LLP (formerly known as Anderson Consulting) 

announced that it planned to increase employment in India from 4,300 people to 10,000 

employees by the end of 2004 (Press Trust of India 2003). On January 27, 2004 the corporation 

announced that it would lay off ninety of its 450 workers in its Wilmington, Delaware plant. 

When announcing the layoff, an Accenture spokesperson said that the company had been asked 

by a client to shift some of their work to other locations, and noted that the jobs may be moved to 

India (Milford and Biddle 2004). In April and May 2004 the company filed WARN notices in 

Pleasanton, California, announcing they would lay off 129 workers (Alameda County Workforce 

Investment Board 2004). By March 2004 the company was building a second facility in 

southern India, in Chennai (Economic Times, 2004). However, Accenture would not confirm 

that the jobs were in fact being moved to India, or that the layoffs in Wilmington (or elsewhere) 

were connected with the expansions in India. 
Corporate Restructuring and Global Capital Mobilityñ page 19

Additional confirmation that companies are increasingly sensitive to the bad publicity 

associated with the outsourcing of service sector and white-collar occupations to Asia can be 

found in company documents. For example, an executive at Lionbridge, an outsourcing firm 

with many employees in India, made this comment in response to a question about new clients 

during the companyís Fourth Quarter 2003 conference call: 

One of the challenges, Charles, you mentioned, you know, politically, it's a little 

insensitive to get press releases out about pushing jobs off shore. So we're 

finding that people are less enthusiastic about announcing significant contracts 

and so I think that we're just going to have to communicate our numbers and our 

performance (Fair Disclosure Wire 2004e: not paginated). 

Or, consider the case of computer giant IBM. In January the Wall Street Journal, based 

on leaked internal IBM memos, broke the story that IBM was planning to send 5,000 US 

programming jobs to countries with lower labor costs. The company later announced that the 

total number of jobs sent overseas would be 3,000. The memos make clear that IBM is very 

much aware of the potentially bad publicity associated with the move. For example, a memo to 

managers on how to notify employees said: ìDo not be transparent regarding the purpose/intent.î 

It also warns managers that the ìTerms 'On-shore' and 'Off-shore' should never be used.î In 

addition, the memo instructs that any written materials about the layoffs must be 'sanitized' by 

people in the human resources and communications department before being handed out 

(Buckley 2004: A1). 

Another possible explanation for the limited number of India cases is that the attention 

given to outsourcing to India is simply overrated. In our research in 2000-2001, we found that 

despite the large media focus on China, more jobs were still moving to Mexico than to China. 
Corporate Restructuring and Global Capital Mobilityñ page 20

Three years later, the number of shifts to China has increased, but still trails Mexico. It is 

possible that the trend in shifts to India will follow a similar course. 

While these are data for only three months, they still suggest that the number and extent 

of production shifts out of the US had increased significantly since 2001. Not only are more 

companies announcing production shifts out of the US than they did three years ago, but they are 

also shifting production to more, and often shifting production to multiple, offshore and 

nearshore destinations at the same time. As shown at the bottom of Table 1, although there were 

255 reported production shifts out of the US, almost half (48 percent) went to multiple 

destinations, for a total of 475 different destinations, an average of almost two destinations per 

shift. 

A large percentage of these shifts were simultaneous shifts to ënearshoreí countries in 

Latin America (primarily Mexico) and to China and other ëoffshoreí countries in Asia. Dallasbased Texas Instruments (TI), which bills itself as a world leader in digital signal processing and 

analogue technologies, exemplifies the global nature of production shifts. In February 2004, TI 

closed the leadframe facility at its sprawling 261 acre campus in Attleboro, Massachusetts. The 

closure followed a year long shift of electronics manufacturing to a near-shore facility in Mexico 

and offshore facilities in China, Malaysia and Taiwan. Nearly 1,200 workers lost their jobs in 

this production shift which was only part of a larger corporate restructuring process undertaken 

by TI. In December 2003, workers at the Texas Instruments plant in Tucson, Arizona, were 

certified as eligible for TAA benefits after the Department of Labor found that production and 

more than two hundred jobs at that facility had been sent to Thailand (USDOL 2003; McPherson 

2004). 
Corporate Restructuring and Global Capital Mobilityñ page 21

Another US-based electronics manufacturer, Kemet Corporation, has been massively 

reducing its global workforce since 2001, when it announced 3,400 layoffs. In July 2003, Kemet 

announced it would be further consolidating its US workforce in order to shift operations to 

Mexico and China. This includes cutting more than 550 jobs from plants in Fountain Inn and 

Simpsonville, South Carolina, where work will be shifted to both Nogales, Mexico and its newly 

opened facility in Suzhou, China. Another one hundred jobs will be shifted to China from Kemet 

plants in Shelby and Mauldin, North Carolina (Bell 2003; Chin and Ojo 2003). 

In Table 2 we offer a closer look at China as a destination for production shifts. In 

addition to the fifty-eight shifts from the US to China in January-March 2004, there were an 

additional ninety-six announcements of production shifts from other countries into China. These 

were mostly from Europe (fifty-five shifts), followed by thirty-three shifts from Asia, with a 

small number coming from other countries. Here we see that the percentage of announcements 

that could be confirmed is much lower than in the US cases. This is in large part due to the fact 

that we were limited to English-language sources and because, for shifts out of countries other 

than the US, we had no access to additional confirmation sources such as TAA certifications and 

WARN notices. 

Similar to the US cases, here too we see multiple instances where production shifts to 

several countries at once. While the Asian companies tend to shift operations to multiple 

countries within Asia, we found several cases where European countries simultaneously shifted 

production to China and Eastern Europe. This most likely occurred for the same reasons that a 

US company would shift to Mexico and China: to keep some production cross border but not 

offshore, so it still can be quickly, easily, and cheaply accessed through ground transportation. 

One example of this trend involves the UK auto parts manufacturer Brook Crompton (a 
Corporate Restructuring and Global Capital Mobilityñ page 22

subsidiary of Singapore based Lindeteves-Jacoberg), which announced in January that it would 

close its ninety-one-year-old factory in Guiseley, UK and shift electric motor production to both 

China and Poland, for a cost of 225 jobs (Hebden 2004). 

Table 2: Production shifts to China from other countries, announced or reported, JanuaryñMarch 

2004 

Number of 

announced/reported 

production shifts to 

China 

Percent of all 

production 

shifts to China 

Percent 

production 

shifts 

confirmed 

Percent shifted 

JanuaryMarch 

Asia 33 34% 21% 15% 

Japan 17 18% 12% 0% 

Korea 2 2% 0% 0% 

Malaysia 2 2% 100% 100%

Philippines 4 4% 25% 25%

Singapore 3 3% 33% 33%

Taiwan 5 5% 20% 20%

Europe 55 57% 39% 16% 

Austria 1 1% 0% 0% 

Belgium 2 2% 50% 50% 

Czech Republic 1 1% 0% 0% 

Denmark 1 1% 0% 0% 

Finland 1 1% 100% 100% 

France 3 3% 67% 0%

Germany 7 7% 14% 14%

Ireland 5 5% 60% 20% 

Italy 3 3% 0% 0% 

Luxembourg 1 1% 0% 0% 

Netherlands 2 2% 50% 0%

Norway 1 1% 100% 0%

Spain 3 3% 33% 0% 

Sweden 1 1% 0% 0% 

Switzerland 1 1% 0% 0% 

United Kingdom 18 19% 44% 28%

Cross Europe 4 4% 75% 0% 

Latin America 3 3% 33% 33% 

Mexico 3 3% 33% 33% 

Other countries 5 5% 60% 60% 

Australia 1 1% 0% 0% 

Canada 4 4% 75% 75% 

Total foreign shifts to China 96 100% 34% 19% 

Shifts into China with multiple 

destination countries 33 34% 39% 21% 

Total number of destinations for 

companies shifting to China 136 
Corporate Restructuring and Global Capital Mobilityñ page 23

 In many cases these shifts not only involved multiple destination countries, but were truly 

global shifts, with plants being closed and jobs being shifted from multiple higher wage 

countries in Europe, North America, and Asia to multiple lower wage countries in Asia, Latin 

America, and Eastern Europe. For example, in March 2004 auto components manufacturer GKN 

announced that they would be shifting as many as 3,000 jobs from high-cost facilities in the US, 

Europe, and Japan, to lower wage countries such as Mexico, China, and Eastern Europe. GKN is 

a major supplier of auto parts to Toyota, Ford, and Volkswagen. While the company took pains 

to avoid releasing any details of which plants, in which countries, would be shifting production, 

company officials outlined their strategy in their March conference call with shareholders: 

The traditional major automotive production markets of Western Europe, North 

America and Japan, have provided little growth in recent years. Forecasters 

estimate low growth in the future. About 85% of the value of our Driveline assets 

is currently deployed in these markets. In contrast, the emerging markets in South 

America, Asia and Eastern Europe, which together account for 22% of global 

light vehicle production, are forecast to continue to grow strongly. We already 

have an established presence in these markets which provide much lower cost 

sources of supply. A fact we cannot afford to ignore in today's competitive world. 

We have decided, therefore, that over the next three years we will migrate around 

20% of our CVJ production to high growth and low-cost economies. Such that, 

by 2007 over 50% of our production will take place in these regions (Fair 

Disclosure Wire 2004a: 3). 

In Table 3, we provide data on all production shifts in our database. As these data show, 

the story of outsourcing and production shifts is not a US-China story, but a global one. We can 

see that China is the largest destination in terms of global production shifts. For January through 

March 2004, 154 shifts from all countries went to China, which accounted for 33 percent of all 

global shifts. 
Corporate Restructuring and Global Capital Mobilityñ page 24

Table 3: All production shifts in media tracking study, announced or reported, January-March 2004 

Destination Country 

China India Other Asia 

Latin 

America 

Eastern 

Europe 

Other 

Countries11

# % # % # % # % # % # % 

Asia 33 65% 4 8% 11 22% 2 4% 0 0% 1 2% 

Japan 17 65% 1 4% 7 27% 1 4% 0 0% 0 0% 

Malaysia/Indonesia 2 40% 0 0% 3 60% 0 0% 0 0% 0 0% 

Philippines 4 100% 0 0% 0 0% 0 0% 0 0% 0 0% 

Singapore 3 60% 2 40% 0 0% 0 0% 0 0% 0 0% 

Taiwan 5 71% 1 14% 0 0% 1 14% 0 0% 0 0% 

Other Asia 2 50% 0 0% 1 25% 0 0% 0 0% 1 25% 

Europe 55 40% 25 18% 17 12% 8 6% 24 17% 4 3% 

France/Italy/Spain 9 56% 2 13% 1 6% 0 0% 4 25% 0 0% 

Germany/Austria/ Switzerland 9 47% 1 5% 3 16% 2 11% 2 11% 0 0% 

Ireland 5 50% 0 0% 2 20% 2 20% 1 10% 0 0% 

Luxembourg/Belgium/Netherlands 5 46% 1 9% 2 18% 1 9% 2 18% 0 0% 

Scandinavia 4 36% 0 0% 2 18% 0 0% 4 36% 0 0% 

United Kingdom 18 29% 19 31% 7 11% 2 3% 10 16% 4 7% 

Other Europe 5 56% 2 22% 0 0% 1 11% 1 11% 0 0% 

Latin America 3 38% 1 13% 0 0% 3 38% 0 0% 0 0% 

Mexico/Brazil 3 38% 1 13% 0 0% 3 38% 0 0% 0 0% 

USA 58 23% 31 12% 39 15% 104 41% 6 2% 17 7% 

 

Other countries 5 42% 1 8% 0 0% 5 42% 0 0% 1 8% 

Australia 1 33% 1 33% 0 0% 0 0% 0 0% 1 33% 

Canada 4 44% 0 0% 0 0% 5 56% 0 0% 0 0% 

Total shifts 154 33% 62 13% 67 14% 122 26% 29 7% 23 5% 

Shifts with multiple destinations 60 29% 30 15% 38 18% 49 24% 17 8% 8 4% 

The second largest destination was Latin America (particularly Mexico and Brazil). 

There were a total of 122 global shifts to Latin America in this period, or 26 percent of all shifts. 

For Asian countries, 65 percent of all production shifts were to China, and another 30 percent 

 

11 ìOther countriesî includes three shifts to Turkey and one to South Africa from the UK, one shift from India to the 

UK, one shift from Australia to Egypt, and the seventeen shifts from the US to Canada, UK, Ireland, and Europe, 

previously summarized in Table 1. 
Corporate Restructuring and Global Capital Mobilityñ page 25

were to other Asian countries, including India. Particularly noteworthy is Japan, which had 

seventeen production shifts during this period, almost all of which went to China (65 percent) 

and other Asian countries (31 percent including India). 

In contrast, shifts out of European countries show a great deal more variation across 

Europe. UK companies were much more likely to shift production to English speaking countries 

such as India (31 percent), but also had a significant percentage of production shifts moving to 

China (29 percent) and Eastern Europe (16 percent). In contrast, countries in continental Europe 

were more likely to shift to Eastern Europe (25 percent for France, Italy, and Spain and 36 

percent for Scandinavian countries). Latin America was not a prime destination for most of the 

Asian and European countries, but, not surprisingly, accounted for the majority of the shifts out 

of its NAFTA partner, Canada. 

Production shifts out of the US 

Job losses from US-based production shifts

When we move from a firm-based to job-based analysis, our results amplify those 

presented in Table 1. Mexico was not only the main destination of production shifts out of the 

US, it also was the destination country associated with greatest number of US jobs lost. As 

Figure 3 shows, the average number of jobs lost per production shift was 354 to Mexico, 

followed by 162 to other Latin American countries, 148 to China, 139 to India and 119 to other 

Asian countries. 

These trends hold in terms of the total number of jobs shifted. Mexico is by far the 

largest destination for US jobs, with 23,396 jobs moving from the US to Mexico in JanuaryMarch 2004. China was the second largest destination for jobs, with 8,283 total jobs. They were 
Corporate Restructuring and Global Capital Mobilityñ page 26

followed closely by other Latin American countries (5,511 jobs), other Asian countries (4,419 

jobs), and India (3,895 jobs). If we also include jobs lost in shifts to other countries in Europe, 

Canada, and Australia the total number of jobs that left the US between January and March 2004 

reaches 48,417. 

Figure 3: Number of Jobs Shifted out of US, January-March 2004 

0

5000

10000

15000

20000

25000

Number of jobs lost from US

Average number of jobs lost 148 139 119 354 162

Total number of jobs lost 8,283 3,895 4,419 23,396 5,511

China India Other Asian 

countries Mexico

Other Latin 

American 

countries

These job loss numbers are limited to the actual number of jobs lost in the specific 

facility where production is being shifted out of the community to another country. What they 

do not capture is the larger ripple effect that plant shutdowns and major layoffs can have on the 

larger community. For example, in February 2004, German auto parts producer, Robert Bosch, 

announced it would be closing its Kentwood, Michigan diesel fuel injection plant just a year after 

it had purchased the plant from Penske Corporation. The plant will close by the end of 2004, 

shifting production to Brazil, costing 1,255 unionized workers their jobs. However, based on 

estimations by Calvin College Professor Van Der Helde, the impact on the Kentwood 

community goes far beyond those 1,255 jobs. According to Van Der Helde, another 325 jobs 
Corporate Restructuring and Global Capital Mobilityñ page 27

will be lost in the companies supplying the plant and, because the laid-off workers will be cutting 

back spending in the community, as many as 692 jobs will be lost in the region from businesses 

which served Bosch workers and their families. Van Der Helde estimates that overall spending 

in the community will ultimately drop by as much as $265 million (Bauer 2004a). 

And this is just one of several major closings in the area. More than three thousand other 

workers at the Electrolux Frigidaire plant in nearby Greenville, Michigan learned in January 

2004 that they will lose their jobs when their plant moves operations to Mexico (Bennett and 

Gumbrecht 2004). Another 120 workers at Keeler Die Cast in Grand Rapids, Michigan learned 

in January that their fifty-eight year old foundry would be closing down in May, with production 

shifting to China (Bauer 2004b). 

Figure 4: Total number of jobs lost from production shifts out of the US by industry, JanuaryMarch 2004 

660

534

2,836

3,508

6,265

380

1,056

40

836

1,633

2,956

5,871

7,756

2,245

6,490

5,351

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Wood and paper products

Textiles

Sporting goods and toys

Plastics, glass, and rubber

Metal fabrication and production

Industrial equipment and machinery

Household goods

Food processing

Finance, insurance, and real estate

Electronics/electrical equipment

Communications/information technology

Chemicals and petroleum

Auto parts

Appliances

Apparel and footwear

Aerospace

Total jobs lost from US
Corporate Restructuring and Global Capital Mobilityñ page 28

In Figure 4, we present the total number of jobs lost by industry. Production shifts in the 

communications and IT industries have been receiving a lot of media attention, and indeed the 

largest number of jobs lost (7,756) was in this industry. The auto parts industry was the second 

largest category, with 6,490 jobs leaving the country, followed by food processing with 6,265. 

Together, these three industries accounted for approximately 45 percent of all jobs shifted out of 

the US in January-March 2004. Other industries with significant numbers of jobs lost included 

electronics and electrical equipment (5,871), appliances (5,371), industrial equipment and 

machinery (3,508), household goods (2,956), metal fabrication and production (2,836), and 

chemicals and petroleum (2,245). 

Table 4 describes the proportion of production shifts per industry for each destination 

country. Most notably we found that companies in many industries were sending more 

production to China than any other destination country. For example all production shifts in 

sporting goods and toys went to China, as did 40 percent of production shifts in electronics and 

electrical equipment, and 38 percent of shifts in apparel and footwear. Approximately one-third 

of all production shifts in aerospace, appliances, household goods, and wood and paper products 

went to China. 

Despite these trends, certain industries remain much more likely to move production to 

Mexico. Not surprisingly, 68 percent of the auto parts shifts went to Mexico, as did 58 percent 

of plastics, glass and rubber; 56 percent of appliances; 53 percent of industrial equipment and 

machinery; and 50 percent of wood and paper products. 

 
Corporate Restructuring and Global Capital Mobilityñ page 29

Table 4: Distribution of production shifts out of the US by industry and destination country, 

JanuaryñMarch 2004 

China India 

Other 

Asian 

countries Mexico 

Other 

Latin 

American 

countries 

Eastern 

Europe Other 

Aerospace 33% 0% 67% 0% 0% 0% 0% 

Apparel and footwear 38% 0% 0% 38% 13% 13% 0% 

Appliances 33% 0% 11% 56% 0% 0% 0% 

Auto parts 8% 16% 0% 68% 4% 4% 0% 

Chemicals and petroleum 29% 14% 14% 14% 14% 7% 7% 

Communications/information technology 3% 32% 27% 0% 32% 0% 5% 

Electronics/electrical equipment 40% 4% 27% 18% 0% 4% 7% 

Finance, insurance, and real estate 0% 100% 0% 0% 0% 0% 0% 

Food processing 0% 0% 20% 40% 0% 0% 40% 

Household goods 31% 0% 15% 23% 15% 0% 15% 

Industrial equipment and machinery 26% 0% 5% 53% 0% 5% 11% 

Metal fabrication and production 25% 0% 13% 44% 13% 0% 6% 

Plastics, glass and rubber 17% 0% 0% 58% 0% 0% 25% 

Sporting goods and toys 100% 0% 0% 0% 0% 0% 0% 

Textiles 10% 0% 0% 20% 70% 0% 0% 

Wood and paper products 33% 0% 0% 50% 17% 0% 0% 

Once again these data confirm the diversity of companies and industries that are shifting 

production to China, producing for a global market that includes the US. The list includes large 

high-end manufacturers such as United Technologiesí subsidiary Carrier Corporation, an air 

conditioning and refrigeration equipment manufacturer in Dewitt, NY. In January, after sixtyfour years as one of the Syracuse areasí largest and most profitable employers, Carrier moved all 

of its manufacturing production from Dewitt to China and Singapore for a loss of 1,200 union 

jobs (Hannagan 2003). The companies that shifted production to China also include small 
Corporate Restructuring and Global Capital Mobilityñ page 30

specialty producers. For example Magnequench, which produces magnet powders used in 80 

percent of US smart bombs, in January shifted its headquarters from Indiana to Singapore and its 

production from Indiana to China, despite the objections of numerous elected officials (Moberg 

2004). 

All of the shifts in finance and insurance went to India, and 59 percent of production 

shifts in communications and IT (mostly computer programming and call centers) went to India 

and other Asian countries, primarily the Philippines. Thirty-two percent of the communications 

and IT work also went to Latin America, with call center work going to Central American 

countries (for marketing to Spanish speakers) and computer programming going to Brazil. 

The scope of the call center shifts from the US to India and other Asian countries is best 

captured by the story of EarthLink, which closed four call centers, laid off 1,300 workers, and 

shifted production to India, Jamaica, and the Philippines. In January 2004 EarthLink, an internet 

service provider (ISP) based in Atlanta, GA, announced plans to lay off 39 percent of its 

workforce, outsourcing the work to India, Jamaica, and the Philippines. The 1,300 workers who 

lost their jobs came from both the closure of call centers in San Jose, Pasadena, and Roseville, 

CA, and Harrisburg, PA, as well as staff reductions at EarthLinkís call center in Atlanta. By 

March 2004 the layoffs were completed and the work had been transferred overseas (Husted 

2004). 

Harrisburg, once a center of US manufacturing, was particularly hard hit by the loss of 

EarthLink. Since 1970 the area has experienced the loss of more than 20 percent of these once 

plentiful factory jobs (Benjamin 2004). Mid-level white-collar jobs such as those at the 

EarthLink call centers were portrayed as the solution to these industrial job losses, the new 

direction for the Pennsylvania economy. However, the EarthLink call center jobs, like so many 
Corporate Restructuring and Global Capital Mobilityñ page 31

others, were not to last. In the Harrisburg area, the new hope is that a high-tech ìknowledge 

economyî will replace both manufacturing and white-collar work that has been transferred 

overseas, with industries such as biotechnology (Benjamin 2004). Whether or not this plan 

succeeds, it is unlikely that the 1,300 former EarthLink employees throughout the country will be 

able to compete for new high-tech jobs without significant retraining. 

Trade Adjustment Act Data

 The Trade Adjustment Act (TAA) data provides one source of information on the kinds 

of companies that are moving production overseas. The TAA is a federal program established 

under the Trade Act of 1974. It allows for workers to receive some compensation and retraining 

benefits if they lose their jobs or if their hours of work are reduced due to adverse effects on their 

employer caused by increased imports. 

Table 5: Trade Adjustment Assistance Act (TAA) applications and certifications, by destination 

country and economic sector for shifts out of the US, January ñ March 2004 

Percent TAA 

applications 

filed 

Percent of 

applications 

certified 

Percent in 

manufacturing

sector 

Percent TAA 

applications 

filed in 

manufacturing 

Percent 

manufacturing 

applications 

certified 

Percent nonmanufacturing 

applications 

certified 

All US shifts 31% 89% 75% 37% 99% 0% 

China 43% 100% 97% 45% 100% NA 

India 7% 0% 26% 0% NA 0% 

Other Asia 28% 82% 59% 39% 100% 0% 

Mexico 32% 100% 100% 32% 100% NA 

Other Latin America 29% 60% 46% 38% 100% 0% 

Eastern Europe 17% 100% 100% 17% 100% NA 

All other 41% 86% 82% 50% 86% NA 

 

 Workers who have been laid off or put on a reduced workload may file a petition to 

receive TAA benefits. After an investigation into the case, the Department of Labor then 

certifies or denies the petition. However, the process is neither simple nor guaranteed. Workers 

must be able to show that a required minimum number of workers in the workplace were laid off, 
Corporate Restructuring and Global Capital Mobilityñ page 32

that sales or production in their firm has declined, and that an increase in imports was a 

significant factor in the layoff. They also must show that their jobs are involved in the 

production process as defined by the TAA. Filing a successful petition is particularly 

challenging for small groups of workers who do not have the assistance of a union 

representative, local politician, or supportive employer. 

 It is therefore not surprising that workers filed TAA petitions in only 31 percent of the 

cases in our database where we found announced or reported production shifts out of the US 

(Table 5). Often, in a climate where companies go to such great lengths to avoid negative 

publicity about production shift denials, the TAA process is one of the only ways to confirm 

whether or not the company is in fact shifting work out of the country. For example, in January 

2004, the office furniture producer, Haworth Inc., announced that they would be closing their 

sixty-eight year old plant in Lincolnton, NC, putting 161 people out of work. The company is 

the third largest manufacturer of office furniture in the US, operating forty factories worldwide. 

 While in news reports the company consistently claimed the production would be 

transferred domestically, the workers believed otherwise and filed a claim under TAA. After an 

investigation the Labor Department confirmed that production from the Lincolnton plant was 

being transferred to China and South Korea. In fact, the closure of the North Carolina plant was 

part of a national restructuring and consolidation of Haworthís US operations that involved the 

closing of three additional plants in Jonesboro, Arkansas; Henderson, Texas; and Hazelton, 

Pennsylvania later in the year (White 2004; Associated Press Newswires 2004a, Aldinger 2004, 

USDOL 2004b). 

 TAA petitions were most commonly filed for shifts to China, and least commonly filed 

for shifts to India and Eastern Europe. This should be no surprise. Almost all production shifts 
Corporate Restructuring and Global Capital Mobilityñ page 33

to China and Mexico were in the manufacturing sector, while the majority of the companies that 

shifted production to other Asian countries were in non-manufacturing industries such as 

telecommunications and IT, finance, and transportation. 

The data show that the Department of Labor certified most of the petitions filed, 

including all of the petitions for job shifts to China and Mexico. However, only 60 percent of 

petitions were approved when firms moved to other Latin American countries, and 82 percent for 

moves to other Asian countries. As described in Table 5, these data also show that TAA 

primarily relates to manufacturing shifts. Therefore, when services such as call centers, 

computer programming, or R&D operations moved overseas, their petitions for TAA assistance 

were typically denied because the workers were not producing a product as defined by the TAA. 

For example, in February 2004 the Department of Labor denied a petition from workers 

at Accenture in Oaks, Pennsylvania for TAA assistance, ruling that while programming jobs 

were being shifted by Accenture from the US to the Philippines, Accenture workers, who were 

involved in software development and maintenance, were not eligible for TAA because they did 

not ìproduce an ëarticleí within the meaning of the Trade Act of 1974.î The Department of 

Labor made the determination based on the fact that ìformatted electronic databases and codes 

are not tangible commoditiesî and the work being shifted was not ìsubject to a duty on the tariff 

schedule and [did not] have a value that makes it marketable, fungible and interchangeable for 

commercial purposesî (US Department of Labor 2004a: not paginated). 

Markets 

While some of the production shifts are intended to capitalize on foreign markets, it is 

clear that the majority of the US-based multinational corporations that are shifting production to 

China are not simply targeting a new Chinese market. For example, US based Amerock 
Corporate Restructuring and Global Capital Mobilityñ page 34

announced in February 2004 that it would be shutting down its Rockford, Illinois cabinet and 

window manufacturing plant after seventy-five years in operation. The company plans to move 

450 jobs from Illinois to China and Mexicoónot to sell hardware to the Chinese and Mexican 

market, but in an effort to reduce production prices and stay competitive in the US market. This 

is true for a wide variety of products that will be produced in China to sell back to the US market 

by companies such as Carrier Corp. (air conditioners), Levis (jeans), Werner Co. (ladders for 

Home Depot), Union Tools Inc. (lawn and garden tools) and Remington Products Company 

(electric shavers). 

Some companies are explicitly outsourcing production to Chinese subcontractors that will 

produce entirely for export to the US market. One such company is Whirlpool, which 

announced in January that it was going to outsource about eighty jobs producing ice makers for 

Whirlpool refrigerators from its Fort Smith, Arkansas, plant to a subcontractor in China. 

Whirlpool is being helped in this process by outsourcing firm TTI (Associated Press Newswire

2004b). 

Others, such as French-based cellular phone company Wavecom, announced a major 

restructuring of its global operations to increase its focus on its key markets of China and Korea. 

The restructuring involved a shift in production to China resulting in 300 job cuts, mainly in the 

US and France. Initial cuts began in March and continued throughout the spring and summer. 

While Wavecom eventually left the cell phone market altogether, other companies, particularly 

in communications, have made similar moves. 

In 2001 we reported that the production shifts out of the US involved some staple 

products thought of as uniquely American, such as Converse shoes and Etch-A-Sketch toys. We 
Corporate Restructuring and Global Capital Mobilityñ page 35

found the same phenomenon in 2004, with plant closings for US products like John Deere cotton 

pickers, Bic USA pens and shavers, K2 snow shoes, Radio Flyer wagons, and Levi Strauss jeans. 

Levi Strauss, founded in San Francisco in 1853, had long been considered an American 

institution. But on January 8, 2004, the company closed its last factory in the US, in San 

Antonio, Texas. Two thousand workers lost their jobs as the work was moved to plants in 

Mexico and China. In only two decades, the company had gone from sixty-three factories in the 

US to none. Viola Casares, one of the workers who lost her job when the last plant shut, 

remarked, ìFor me right now, I feel like I'm in mourning. We used to be like a family. It's hard 

to believe that it's final.î However, Walter Loeb, a retail analyst in New York, said that in the 

end, the cost savings of shifting production were more valuable than remaining in the US for 

symbolic reasons. Loeb commented, ìInvestors are not very sentimental these daysî (CNN.Com 

2004: not paginated). 

A similar story occurred when Radio Flyer wagons announced it would move production 

of its signature red metal childrenís wagons to China after eight-seven years in Chicago. While 

its website calls Radio Flyer ìAmericaís Dream Factory for Over 85 Years,î the company had 

already moved production of its tricycle and scooter to China. The companyís R&D and 

headquarters will remain in Chicago and the production of plastic wagons in Wisconsin, but the 

company said that cost pressures forced them to move production of the red metal wagon to 

China. Framed as the loss of an American icon, the Radio Flyer wagon became the poster child 

of the ëoutsourcing of Americaí story, and was featured in hundreds of news stories in the week 

after it was first announced. 
Corporate Restructuring and Global Capital Mobilityñ page 36

Union status

In our 2001 study we found significant differences in the union status of companies 

shifting production from the US to China, only 14 percent of which were unionized, and those 

shifting production to Mexico, 26 percent of which were unionized. In contrast, three years later, 

with private sector union density now as low as 8 percent (Bureau of Labor Statistics 2004b) we 

find that 29 percent of production shifts out of the US are in unionized facilities, including 44 

percent of firms moving jobs from the US to Mexico and 29 percent of firms moving jobs to 

China (see Figure 5). 

Figure 5: Unionization rates for companies shifting production out of the US, by destination 

country, January-March 2004 

29%

34%

7%

17%

15%

22%

44%

53%

17%

15%

29%

39%

0%

10%

20%

30%

40%

50%

60%

Percent union

China India Other Asian Mexico Other Latin

American

All countries

Percent of production shifts that are union Percent of jobs lost that are union

Seventeen percent of production shifts to other Latin American countries and 15 percent 

of production shifts to other Asian countries were in unionized workplaces. It is only among the 

firms moving to India (7 percent) where we found unionization levels close to the national 

average. 
Corporate Restructuring and Global Capital Mobilityñ page 37

Figure 5 also provides the percentage of shifts by total jobs. These numbers provide an 

even stronger picture of the trends in global relocation. More than half of the jobs leaving the 

US for Mexico and 34 percent of the jobs leaving the US for China are union jobs, while, 

overall, 39 percent of all jobs leaving the US are union. Even among the white-collar and high 

tech jobs moving to India and Latin American countries other than Mexico, the percent of union 

jobs is much higher than the unionization rate in those industries. 

Figure 6: Number of union and non-union jobs lost from the US by destination country, JanuaryMarch 2004 

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Total number of jobs lost

Union 2,833 645 986 12,511 836 1,275

Non-union 5,450 3,250 3,433 10,885 4,675 1,831

China India Other Asian Mexico Other Latin 

American Other countries

When we convert these percentages to numbers, we see in Figure 6 that in January-March 

2004, 12,511 union jobs left the US for Mexico. In that same period, 2,833 union jobs left for 

China. Altogether, 19,086 union jobs were moved overseas in the first three months of 2004. 

This change from 2001 to 2004 reflects the increase in production shifts among high-end 

manufacturing industries to China and other countries, but it also reflects the current labor 

relations environment. As documented in Bronfenbrennerís past research on employer use of 
Corporate Restructuring and Global Capital Mobilityñ page 38

plant closings and plant closing threats in the context of union organizing campaigns, US 

employers are feeling increasingly emboldened to use the threat of plant closings, or actual plant 

closings, to keep unions out where they do not already exist and get rid of them where they do 

(Bronfenbrenner 2000). In some cases, companies used the threat of an intended production shift 

to extract concessions from their unionized workers. For example, at the John Deere Des 

Moines Works in Ankeny, Iowa, in January 2004 the company announced plans to shift forty 

assembly parts jobs from Ankeny to Monterrey, Mexico. In the short term, no workers would 

lose their jobs. However, under the contract with UAW Local 450, the union had 120 days to 

prove that they could do the work more cheaply and more effectively than in Mexico. If they 

succeed the work will stay. If they fail, the forty jobs will be transferred to Mexico (Ryberg 

2004). 

It is possible that our data overstates the proportion of unionized jobs leaving the US, 

given that our data on union jobs may be more reliable. However, it is clear that the absolute 

number of union jobs shifting out of the US is quite high ñ almost 20,000 in three months. It 

seems difficult to deny a systematic pattern of firm restructuring that is moving jobs from union 

to non-union facilities within the country, as well as to non-union facilities in other countries. 

One example of this occurred at Continental Tire.12 

 Continental Tire North America is a subsidiary of Continental AG, a global auto parts 

and tire manufacturer based in Germany. As of mid-2004, Continental Tire North America had 

approximately 7,000 employees in six locations in North America: Charlotte, North Carolina 

(where its headquarters are located); Bryan, Ohio; Mayfield, Kentucky; Mt. Vernon, Illinois; 

Barnesville, Georgia; and San Luis Potosi, Mexico. Continental Tire went through some 

 

12 Because the actual announcement of Continental Tireís closure came before 2004 and the actual plant shut down 

occurred after the first quarter in 2004, we were unable to include it in our database. 
Corporate Restructuring and Global Capital Mobilityñ page 39

difficulty when it voluntarily recalled a half-million tires at the end of 2002 due to a mislabeling 

of tire pressure requirements. However, by May 2004, Continental AG CFO Alan Hippe 

announced ìa positive dynamic in the US,î and strong sales growth including a 5 percent sales 

increase worldwide (Fair Disclosure Wire 2004b: 1). Summarizing 2003, CEO Manfred 

Wennemer remarked, ìPassenger Cars last year was the division with the highest growth rate, 

8.4%î (Fair Disclosure Wire 2004d: 3). 

 Yet Continental Tire had already begun restructuring passenger tire production. In late 

2002, the company notified the United Steelworkers of America (USWA) (which represents 

workers at most of the plants), that the Mayfield, Kentucky plant was too costly and was no 

longer competitive. The company asked the union to come up with ways to reduce costs in the 

plant. The company then asserted that the union refused to work with them, and laid off two 

hundred workers in December 2003. The union claimed that it had in fact tried to negotiate with 

the company, but the company insisted the only way to save the plant was ìto somehow cut $35 

million from a $55 million payroll, and management had no proposals for how to do thisî 

(Business Wire 2004: not paginated). 

 In a March 30, 2004 conference call with investors, Wennemer stated that the company 

had reduced capacity at the Mayfield, Kentucky plant, and that ìa potential closure of the 

Mayfield plant is clearly in the cards.î Wennemer went on to say that in addition to reductions at 

Mayfield, ìwe also reduced the headcount in the two headquarters and, more importantly we also 

. . . . [began] the increase of production capacity in Malaysia and the start of building a new 

greenfield in Brazil. This is all in addition to the long continuing increase of production in our 

[San Luis Potosi] plant in Mexicoî (Fair Disclosure Wire 2004d: 3). The next month, two 
Corporate Restructuring and Global Capital Mobilityñ page 40

hundred more workers were laid off in Mayfield. In May, when asked for more detail about a 

possible closure and the potential for industrial action, Hibbe stated: 

[H]ow about a potential closure? For me, the most important thing is, yes, and 

you know all the legal restrictions. Before we do a closure we have to make the 

decision and then we have to announce it. Then we have a six-month period 

before we can do the potential closure. As said, there is no decision done. We are 

ramping down the capacity. We are bringing capacity to plants abroad, that 

means [San Luis Potosi]. Another plant where we ramp up capacity, but just to a 

small portion is Mount Vernon. A non-unionist playing plant in the US that we 

have. As said, a potential closure of the tire production of Mayfield is not 

excluded (Fair Disclosure Wire 2004b: 4). 

Then in late June, the company announced it would suspend production at Mayfield indefinitely 

and lay off more than eight hundred workers. 

 Meanwhile, the USWA had been engaged in an effort to organize 1,500 workers at the 

Mt. Vernon, Illinois plant, the one US plant that remained non-union. The union had held four 

unsuccessful elections at the plant since 1989, and another was scheduled for July 22-24, 2004. 

However, by mid-July the union began filing NLRB charges, claiming that the company was 

intimidating workers, including announcing the potential plant closure in Mayfield as a way to 

scare workers into voting against the union. According to a Business Wire report, the company 

had already been charged by the NLRB with ìmassive labor law violationsî against the USWA 

local in Charlotte, North Carolina, in 1999. The vote was held in July, and once again the union 

lost ñ though by only fifty-eight votes, its closest margin yet (United Steelworkers of America 

2004). 

 By the August 2 conference call, Continental managers were speaking about the Mayfield 

plant as essentially closed. CFO Alan Hippe noted, ìYou would surely have heard that we have 
Corporate Restructuring and Global Capital Mobilityñ page 41

an indefinite suspension of tire production in Mayfield in place. It will be done and finalized at 

the end of the year 2004î (Fair Disclosure Wire 2004f: 2). 

On September 2, the company opened negotiations with the union. According to a PR 

Newswire release, the USWA presented their cost savings proposal to the company on 

September 17. They estimated that their plan could save the company $20 million a year. 

Continental Tire rejected the proposal. Nick Fletcher, Vice President of Human Resources, 

remarked, ìIt is regrettable that these negotiations did not result in an agreement to preserve jobs 

at the Mayfield plant,î but that the proposals ìsimply did not go far enough to address the cost

disparity between Mayfield and our other tire plantsî (PR Newswire 2004: 1). At the end of 

September, Continental Tire made the official announcement that they would permanently 

suspend tire production in Mayfield, Kentucky and lay off more than eight hundred workers by 

the end of 2004 (Walker 2004). Meanwhile, the nonunion facility, Mt. Vernon, remains open, 

with the union organizing drive quashed, while Mayfieldís closure serves as a stark 

reinforcement of Continentalís threat to close Mt. Vernon if they ever were to choose a union. 

US region of origin

Of the 255 production shifts out of the US, the largest share came from the Midwest 

region. This was followed closely by shifts from the Southeast and Northeast regions. Fourteen 

percent of the shifts came from the West Coast/Mountain region. There were few shifts from the 

Southwest or US Territories, and in nine cases companies announced job losses nationwide 

across several regions (see Table 5). The Midwest also accounted for the highest number of jobs 

lost, with a total of 18,938 jobs lost in January through March. However, the companies that 

announced cross-regional production shifts had the highest average number of jobs lost per 
Corporate Restructuring and Global Capital Mobilityñ page 42

production shift, with 637. This was followed by moves from the Southwest, which averaged 

528 per shift. 

Overall 83 percent of the production shifts were in manufacturing industries, a trend that 

was particularly evident in the Midwest (94 percent), and Southeast (91 percent). In contrast, 

non-manufacturing companies in telecommunications, IT, and financial services tended to be 

concentrated in the West Coast and Mountain states, or in multi-state production shifts that 

crossed regions. Unionization rates among companies shifting production out of the US were 

highest in the Midwest (56 percent) and the Northeast (35 percent). Even in the Southeast, 

where union density is historically quite low, 22 percent of production shifts were from 

unionized firms. 

Table 6: Production shifts out of the US by region, January-March 2004 

Region 

Number of 

production 

shifts 

Percent of 

production 

shifts 

Percent 

manufacturing 

Percent 

unionized 

Average 

number of 

jobs lost 

Total number 

of jobs lost 

Northeast 37 21% 78% 35% 212 7,223 

Midwest 48 27% 94% 56% 403 18,938 

Southeast 46 26% 91% 22% 191 8,604 

Southwest 11 6% 82% 9% 528 5,281 

Territories 1 1% 100% 0% 100 100 

West Coast/Mountain 25 14% 60% 4% 194 4,451 

Cross region 9 5% 56% 0% 637 3,820 

All US 177 100% 83% 29% 292 48,417 

When we break down the regional data by destination country, we find even greater 

variation across regions (Figure 7). The largest share of production leaving the Southeast (38 

percent) is moving to China. This is also true for shifts from multiple regions within the country. 

Twenty-one percent of production from the Midwest is going to China, compared to 17 percent 
Corporate Restructuring and Global Capital Mobilityñ page 43

of production from the Northeast, 11 percent from the Southwest, and 10 percent from West 

Coast and Mountain states. 

Just over half of the production from the Midwest and 42 percent from the Southwest is 

going to Mexico. In terms of the total number of jobs, the Southeast region experienced the 

largest percentage of jobs shifted to China, accounting for 41 percent of all jobs moved to China 

in the first quarter of 2004. 

Figure 7: Percentage of production shifts in US region by destination country, January-March 2004 

0%

10%

20%

30%

40%

50%

60%

Northeast 17% 15% 19% 26% 11% 11%

Midwest 21% 5% 13% 51% 7% 3%

Southeast 38% 8% 13% 17% 20% 3%

Southwest 11% 11% 11% 42% 21% 5%

West Coast and Mountain States 10% 22% 22% 22% 17% 22%

China India Other Asian Mexico Other Latin 

American Other countries

Table 7 provides more detailed data regarding the number of shifts and the number of 

jobs lost by state. Looking at specific states, we find that Illinois lost the most jobs in January ñ

March 2004, a total of 7,555 jobs, the overwhelming majority of which went to Mexico. This 

was followed by Michigan, which had twelve shifts out of the country and lost a total of 5,283 

jobs which were also primarily sent to Mexico. Four other statesóOhio, Texas, California and 

New Yorkóall had job losses of more than two thousand, and a total of twenty-three states lost 
Corporate Restructuring and Global Capital Mobilityñ page 44

more than five hundred jobs. Of these states with the most job losses, the states losing the most 

jobs specifically to China were North Carolina, Ohio, California, Indiana, Texas and New York. 

Table 7: Number of jobs lost and number of production shifts out of the US for twenty five states 

with highest job losses, January-March 2004 

State All US Shifts to China Shifts to India 

Shifts to other 

Asian 

Countries 

Shifts to 

Mexico 

Shifts to other 

Latin 

American 

countries 

Shifts to other 

countries 

Shifts Jobs Shifts Jobs Shifts Jobs Shifts Jobs Shifts Jobs Shifts Jobs Shifts Jobs 

IL 12 7,555 3 380 0 0 2 135 7 7,040 0 0 0 0 

MI 13 5,283 2 279 1 10 0 0 7 4,542 2 442 1 10 

OH 13 3,151 4 773 1 120 2 55 5 1,932 0 0 1 270 

TX 13 3,141 2 463 1 134 1 134 5 660 2 1,700 1 134 

CA 21 2,395 2 650 5 258 5 553 2 400 3 204 2 330 

NY 16 2,005 3 445 2 102 4 769 4 578 1 17 2 94 

KY 15 1,778 1 175 2 179 2 180 3 665 7 579 0 0 

PA 13 1,750 1 30 3 724 2 433 3 192 1 133 1 258 

TN 7 1,703 3 86 0 0 1 38 2 1,449 0 0 1 130 

OK 5 1,665 0 0 1 110 1 110 1 1,225 2 220 0 0 

IN 9 1,543 2 510 0 0 1 18 6 1,033 0 0 0 0 

NC 12 1,449 8 839 0 0 1 80 2 415 1 115 0 0 

OR 10 1,349 0 0 2 141 2 141 0 0 4 282 2 785 

MA 8 1,180 2 305 0 0 4 611 1 262 0 0 0 0 

SC 6 950 2 276 0 0 0 0 3 674 0 0 0 0 

NJ 4 780 0 0 1 250 0 0 1 40 1 245 1 245 

WA 8 677 0 0 2 330 1 180 0 0 0 0 4 167 

VA 3 632 0 0 1 250 0 0 0 0 2 382 0 0 

AL 4 610 2 305 0 0 1 40 1 265 0 0 0 0 

CT 7 583 2 221 0 0 0 0 3 162 1 100 1 100 

WI 2 580 1 80 0 0 0 0 1 500 0 0 0 0 

FL 3 505 0 0 0 0 1 440 0 0 2 65 0 0 

NH 1 500 0 0 0 0 0 0 0 0 0 0 1 500 

AZ 1 475 0 0 0 0 0 0 1 475 0 0 0 0 

KS 6 425 0 0 1 93 2 117 1 30 2 185 0 0 
Corporate Restructuring and Global Capital Mobilityñ page 45

North Carolina, in particular, was hit hard by production shifts to China, with 839 jobs 

transferred to China, more than any other state. This is largely due to the fact that two of North 

Carolinaís major industries, furniture and textiles, have been among those shifting production to 

China at an ever-increasing rate. Since 2001, North Carolinaís manufacturing employment has 

decreased by 21 percent for a loss of 160,000 jobs. For the textile sector, the situation is even 

worse. Since 2001, more than one-third of North Carolinaís textile workers have lost their jobs, 

resulting in 60,000 layoffs in that sector alone (Patterson 2004). 

 One of the many textile plants to shift production from North Carolina was owned by 

Unifi Inc. The company laid off 140 workers when it closed the plant (Moffat 2004). Although 

Unifi at first claimed that production was being shifted to another North Carolina facility, the 

company later disclosed that machinery from its idled factories was being transferred to its new 

facility in China (Malone 2004). North Carolinaís textiles crisis will likely get much worse as 

the US, Canada, and the European Union remove all quotas from textiles, including apparel, as 

mandated by the World Trade Organization on January 1, 2005 (Martinez 2004). Industry 

leaders predict that the post-January 1, 2005 textile world will be completely dominated by 

China (Patterson 2004). 

 North Carolinaís furniture industry has also suffered major employment losses from 

production shifts into China. From January 2000 to July 2004, furniture employment was 

reduced by nearly a third, from 78,500 to 57,400 (Johnson 2004). Many in the industry have 

blamed the production shifts on pressure to be cost-competitive with cheap Chinese imports. For 

example, Furniture Brands International, which owns such brands as Drexel Heritage, 

Thomasville Furniture, Lane, and Broyhill, announced in 2003 that it would begin consolidating 

its US operations and increasing import volume from China (Becker 2004). In January 2004, it 
Corporate Restructuring and Global Capital Mobilityñ page 46

announced that it would close its Drexel Heritage plants in Marion and Morgantown, NC with a 

loss of nearly 400 jobs (Becker 2004). Although the company claimed that production would be 

transferred to other domestic plants, the United States Department of Labor found that the 

company had transferred a ìsignificantî portion of the work to China (USDOL 2004c). The shift 

has had repercussions beyond Furniture Brands itself. For example, Connor Carving and 

Turning Co, a small company that specialized in custom wood carving and turning, announced in 

January 2004 that it would close its doors, ending forty-five years in Thomasville, NC. The 

companyís former clients, including Furniture Brandsí Thomasville Furniture, had transferred 

their business to China, leaving Connor without clients. A Trade Adjustment Act case is 

pending (USDOL 2004d), and the former owner of the company himself reports that he will be 

filing for unemployment (Abbott 2004). 

A very different story emerges in California. While the North Carolina shifts were 

mostly in textiles and furniture, with eight of the twelve production shifts out of the state going 

to China, the twenty one production shifts and 2,395 jobs leaving California were concentrated in 

the electronics and communications and IT industries. The largest number of jobs leaving 

California went to China (650). Still, 258 went to India, 553 went to Malaysia, Thailand and the 

Philippines, 400 jobs went to Mexico, 204 to the Caribbean, and 330 to the UK and Ireland. The 

companies include Magnecomp Corporation, a Singapore-owned company which shifted its 

production of hard-drive suspension assemblies from Temecula to China and Thailand (USDOL 

2004e), Brecis Communications, which shifted semi-conductor design from San Jose to China 

(Wirbel 2004), and Medtronic, Inc., which announced it would be shifting production of ëarteryclearing devicesî from Santa Rosa to Mexico and Ireland (Rose 2004). 
Corporate Restructuring and Global Capital Mobilityñ page 47

Company characteristics and structure

 We now turn to an examination of the ownership structure and company characteristics 

of the particular companies that shifted their jobs overseas. As described in Tables 8 and 9, the 

overwhelming majority of companies that shifted production out of the US between JanuaryMarch 2004 were ultimately owned by extremely large, profitable, US-based, publicly-held 

multinationals. At the same time, many of the facilities where work had been moved out of the 

country had been in operation for several decades, yet had relatively recently been taken over by 

their current ownership. In fact, we found many of the companies where production shifts had 

taken place had been bought and sold, merged and acquired, or taken public or private multiple 

times in the years prior to the work being shifted. 

Table 8: Company structure for production shifts out of the US, January -March 2004 

Shifts out 

of US 

Shifts to 

China 

Shifts to 

India 

Shifts to 

other 

Asian 

countries 

Shifts to 

Mexico 

Shifts to 

other 

Latin 

American 

countries 

Shifts to 

all other 

countries 

Subsidiary 58% 53% 48% 49% 67% 40% 74% 

Publicly held 74% 71% 87% 82% 74% 83% 78% 

Privately held 26% 29% 13% 18% 26% 17% 22% 

US-based multinational 75% 72% 81% 79% 75% 91% 43% 

Foreign-based multinational 25% 28% 19% 21% 25% 9% 57% 

Table 8 summarizes findings on the ownership structure of the parent company. Almost 

three-quarters of the firms that shifted production from the US to China were publicly held, and 

72 percent were US-based multinationals. Seventy-four percent of firms that shifted production 

to Mexico were publicly-held and 75 percent were US-based multinationals. The firms that 

moved production to other Asian countries and other Latin American countries were even more 

likely to be publicly-held (82 percent and 83 percent respectively). Except for the ìall other 
Corporate Restructuring and Global Capital Mobilityñ page 48

countriesî category, there were more foreign-based multinationals moving to China (28 percent) 

than to anywhere else. Almost all moves to other Latin American countries came from US-based 

multinational companies. Fifty-three percent of companies that shifted production to China were 

subsidiaries of larger parent companies. This compares to 48 percent of companies that shifted 

to India, 49 percent of companies that shifted to other Asian countries, 67 percent of companies 

that shifted to Mexico, and 40 percent of companies that shifted production to other Latin 

American countries. 

Figure 8 shows the base country for all foreign-owned parent companies that shifted 

production out of the US. Ten percent of all companies were multinationals based in continental 

Europe and 6 percent were multinationals based in the UK. Five percent were multinationals 

based in Canada, while only 2 percent were multinationals based in Asia, and 1 percent were 

multinational investment firms based in the Middle East (Bahrain and Kuwait). 

Figure 8: Parent company country for foreign-owned multinationals for all production shifts out of 

the US, January-March 2004 

6%

10%

5%

2%

1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Percent of companies

United Kingdom Continental

Europe

Canada Asia Middle East

As shown in Table 9, the ultimate parent companies for firms moving jobs out of the US 

tended to be extremely large and profitable, averaging a total of 38,316 employees worldwide, an 

annual revenue of $9.9 billion, and a net income of $654 million. These statistics vary somewhat 

depending on the destination country. Companies that moved jobs to India, Mexico and ìother 
Corporate Restructuring and Global Capital Mobilityñ page 49

countriesî had a higher number of total parent company employees than those that shifted 

production to China, other Asian countries and other Latin American countries. On the other 

hand, companies that moved production to China, India, and other Asian countries had somewhat 

higher average annual revenue. The parent companies of companies that shifted production to 

other Latin American countries were smaller than those moving elsewhere, reflecting that many 

of the Latin American cases involved fairly new communications and IT companies that moved 

call center operations to the Caribbean and Central America. 

In Table 9 we can also see that the firms moving out of the US have been in operation for 

an average of forty-five years, with as many as 76 percent having been in operation for more 

than twenty years. While 78 percent of firms moving production to China and 84 percent of 

firms moving production to Mexico have been in operation for more than twenty years, that is 

true for only 36 percent of firms moving to India and 43 percent of firms moving to other Asian 

countries. 

Table 9: Company characteristics for production shifts out of US, January-March 2004 

All shifts 

out of US 

Shifts to 

China

Shifts to 

India 

Shifts to 

other 

Asian 

countries 

Shifts to 

Mexico 

Shifts to 

other 

Latin 

American 

countries 

Shifts to 

all other 

countries 

Parent company characteristics 

Total parent company employees 38,316 33,440 50,010 36,364 42,520 28,811 58,097 

Annual revenue (USD millions) $9,922.6 $11,012.5 $12,550.4 $12,790.1 $9,193.4 $6,280.2 $15,201.6 

Net income (USD millions) $654.6 $647.1 $878.8 $146.8 $924.5 $549.4 $1,284.7 

Company ownership history 

Average years in operation 45 45 31 31 49 34 32 

Percent more than 20 years in 

operation 76% 78% 36% 43% 84% 54% 80% 

Average years under current owner 18 17 21 22 16 13 18 

Percent 10 years or less under current 

owner 55% 42% 79% 53% 54% 67% 53% 
Corporate Restructuring and Global Capital Mobilityñ page 50

At the same time, our data show that many of the companies shifting production out of 

the US have had relatively recent changes in ownership. While 42 percent of companies moving 

to China have been under the current ownership for ten years or fewer, 79 percent of companies 

moving to India and 67 percent of companies moving to other Latin American countries have 

been under their current ownership for no more than ten years. Those moving to other Latin 

American countries have been under current ownership for an average of only thirteen years, 

which reflects the high number of telecommunications and IT companies moving to those 

countries. 

Impact of US production shifts on workers and communities

As mentioned earlier, the impact of these production shifts out of the US has a ripple 

effect that goes well beyond the individual communities where the plants have shut down and the 

work has been moved. Many of these companies had been major employers in their 

communities for several decades. Others were situated in small towns in rural areas where these 

companies brought significant tax revenues and economic security upon which the small towns 

and cities grew to depend. This is perhaps, best captured by Sykes Corporation, which provides 

call center services to prominent corporations such as SBC and Microsoft. About ten years ago, 

Florida-based Sykes Enterprises began to open up call centers in the US, and the company was 

able to provide hundreds of jobs for many economically depressed communities in places such as 

Oregon, Kentucky, Kansas and Oklahoma. These communities welcomed Sykes, and several 

encouraged its continued presence by offering the company tax incentives. However, in 2002 

Sykes announced that, due to market pressures, they were moving a large majority of their US 

operations overseas to places like Costa Rica, India, and El Salvador. Confirming this 
Corporate Restructuring and Global Capital Mobilityñ page 51

announcement in January of 2004, Sykes began to methodically close six call centers, laying off 

almost 1,800 people. 

 Many of the communities left behind by Sykes were economically dependent upon the 

company. For example, the town of Milton-Freewater, Oregon, bent over backwards to give 

Sykes a tax incentive package of $3.5 million to set up shop in their community, and now faces 

a $2.6 million debt to pay and no employer to keep the economy afloat. Also, in the towns of 

Pikesville and Hazard in Kentucky, Sykes received $3 million in incentives in both locations. 

ìObviously our citizens are disappointed and angry,î reported Milton-Freewater Assistant City 

Manager Linda Hall. ìThey expected Sykes to be in for the long runî (Kosterlitz 2004:13). 

Sykes sees their moves as a consequence of demands from the client companies they service. 

According to Subhaash Kumar, senior director of investor relations at Sykes, ì[Sykes] is clientdriven . . . Our clients tell us where they want the centers to be, and we do itî (Streitfield 2004: 

A1). 

 In other cases, cities and states bid against each other in an effort to keep companies open 

in their community. This was the case with Phelps Dodge Magnet Wire, which in 2003 

announced plans to keep either its Fort Wayne, Indiana or El Paso, Texas magnet wire 

production facilities open as they shifted production to Suzhou, China and Monterrey, Mexico. 

The company decided to close down the El Paso plant after state and local governments in Fort 

Wayne offered them more than $900,000 in incentives, including workforce training grants, tax 

credits, and tax abatements. In January, the El Paso plant began to shut down production, 

shifting the work of 125 El Paso workers to both Mexico and China. While Fort Wayne officials 

and workers celebrated their victory, it is unlikely to last long. In June the company announced 
Corporate Restructuring and Global Capital Mobilityñ page 52

the grand opening of its wholly-owned, state-of-the-art magnet wire facility in Suzhou, China 

(El Paso Times 2004; Karkaria 2004; Shugert 2004). 

The impact on communities is not just felt in the source country. In some cases we 

companies are moving work to other countries to avoid enforcement of health and safety and 

environment regulations in the US. One glaring example of this practice is the semiconductor 

manufacturer AXT, Inc. 

 AXT has been in the process of transferring all of its manufacturing, engineering, and 

R&D from Fremont, CA to China since 2001. Before its move to China, the bulk of AXTís US 

labor force was made up of Chinese immigrants who spoke little or no English. They produced 

gallium arsenide wafers, made from an easily inhaled compound that turns to arsenic in the body. 

In 2000, US government investigations found that, although AXT management knew that 

employees were being exposed to up to thirty-one times the permitted amount of arsenic, they 

did little or nothing to remediate the situation. Ventilation systems were found to be in disrepair, 

and proper procedures for decontamination were not followed, potentially exposing the workersí 

families to the toxin as well(Thompson 2004a). 

 Many former AXT employees developed cancer and other ailments. Employees were not 

given protective gear or trained in proper procedure for handling arsenide. At least one 

employee, after being forced to work without protection through her ninth month of pregnancy, 

gave birth to a child with severe birth defects. After the 2000 investigation, AXT was issued 

forty-two citations by the State Division of Occupational Safety and Health (Cal-OSHA), who 

subsequently issued a fine to AXT (Fischer 2004). However, the company chose to fight the 

fines in court, and when AXT met with CAL-OSHA representatives in 2001, the company 

announced it would begin to transfer production to China (Thompson 2004a). More than five 
Corporate Restructuring and Global Capital Mobilityñ page 53

hundred workers lost their jobs and remain uncompensated for health problems (Fischer 2004). 

As of July 21, 2004, the company was wrapping up business in Fremont and preparing the 

facility there for sale (Fair Disclosure Wire 2004c). Now AXT will be able to expose Chinese 

workers to the same toxic chemicals without fear of OSHA investigations or media exposÈs. 

Estimates of annual job losses from production shifts out of the US

 As we mentioned previously, because of the inherent limitations in using media tracking 

to capture the full extent of global production shifts and job losses, we assume that the 

production shift job numbers we were able to collect for both our 2001 and 2004 study, seriously 

underestimate the actual number of production shifts and job losses that occur. In 2001, we 

estimated that media sources captured only half of all production shifts out of the US, which at 

that time where primarily concentrated in Mexico and China. We came to that conclusion based 

on the fact that so many companies shifting production out of the country were situated in small 

towns with local newspapers that were not archived in the online news databases, and because 

we found that even in large cities, plant closings and jobs shifts were not always reported in the 

media, particularly in small, non-union workplaces. 

Three years later our research suggests that media tracking captures an even smaller 

portion of the total number of production shifts and job losses than it did in 2001. As we 

discussed previously in this report, we find that in 2004 companies are going to greater lengths to 

keep their job shifts quiet, particularly shifts covering white-collar occupations and shifts to 

China, India, and other Asian countries, all of which have become hot button issues in the media. 

We have also found that production shifts in certain occupations and sectors, such as 

communications and IT and financial services, are much harder to track, as they often involve 

smaller employers and there is no data set equivalent to the TAA. Furthermore, the process of 
Corporate Restructuring and Global Capital Mobilityñ page 54

sending IT and other service jobs to offshore locations is often handled through intermediary 

subcontractors or outsourcing firms. For example, a US firm may outsource its internal support 

services to another domestic firm, which then in turn contracts with a foreign-based service 

provider. Job shifts through such complex sourcing networks are difficult to identify, 

particularly through on-line media searches. 

For all of these reasons, we believe that for most countries we captured only about onethird of the actual jobs lost. Similarly, because the manufacturing shifts that went to China, Asia, 

and Latin America tended to be concentrated in smaller workplaces, they were much less likely 

to be covered by the WARN Act or reported in the media. In contrast, for Mexico, because all of 

the production shifts were in manufacturing plants, the majority of which were unionized and 

almost all of which were large enough to be covered by the WARN Act, we were able to provide 

a more accurate picture of job loss than we were with the 2001 data. Thus, for jobs lost to 

Mexico in 2004, we estimate that we are capturing as much as two-thirds of all production shifts 

out of the US. 

Table 10 summarizes our findings for total estimated job losses, by country, for 2001 

and 2004. For 2001 we took the total estimate of jobs shifting for our seven month period, and 

multiplied by twelve-sevenths to get an annual rate of job loss per country. We also adjusted the 

estimate based on the assumption that we were only capturing about half of the actual job losses 

through our media search and that, based on the trends in job loss for the year, approximately the 

same number of jobs would be lost to Mexico and China, which came to approximately 85,000 

for each country.13

 

13 Our media-tracking in the 2001 study found a markedly changing picture of production shifts and job relocations. 

Because conditions were changing from month to month, we developed job loss estimates based on the entire seven 

month period, rather than developing monthly numbers. Therefore, our annual estimates below for 2001 are derived 

from annual estimates that averaged the number of shifts over the year. 
Corporate Restructuring and Global Capital Mobilityñ page 55

Table 10: Estimates of total annual job loss from production shifts out of the US, 2001 and 

2004 

2001 2004 

Destination 

country

Total job 

shifts out of 

US, JanMarch 

Multiply to 

adjust for 

coverage14

Multiply by 

4 to get 

annual rate 

Total job 

shifts out of 

US, JanMarch 

Multiply to 

adjust for 

coverage15

Multiply by 

4 to get 

annual rate 

China 10,625 21,250 85,000 8,283 24,849 99,000 

Mexico 10,625 21,250 85,000 23,396 35,094 140,000 

India 125 250 1,000 3,895 11,685 47,000 

Other Asia 3,875 3,875 31,000 4,419 13,257 53,000 

Other Latin 

America 

250 500 2,000 5,511 16,533 66,000 

Total 25,500 51,000 204,000 45,504 101,418 406,000 

For 2004, because we assume that our data capture two-thirds of all production shifts to 

Mexico, we multiplied the total number of jobs lost for the first three months of 2004 by a factor 

of 3/2. We then multiplied our three-month estimate by four to get an annual rate of job loss, 

once again adjusting for incomplete reporting and rounding to the nearest thousand.16 

Using the adjustments described above, Table 10 shows a marked increase in the number 

of jobs shifted from 2001 to 2004, for each country. In 2001 we estimated that there were 

approximately the same number of jobs shifting to China and Mexicoóroughly 85,000 per year 

for each country. By 2004 the number of jobs shifting to China had increased to 99,000, while 

the number of jobs shifting to Mexico increased to 140,000. Other countries saw increases as 

 

14 As described in the text for 2001 we used a multiplier of two in order to reach our job estimate. 

15 For 2004, we used a multiplier of three for all countries except Mexico, where we used a 3/2 multiplier. 

16 Our estimates of job loss include announced job losses, as well as actual relocations. Our research found that 

announcements precede the actual relocation by some time. Indeed, the federal WARN Act requires employers to 

provide a minimum of 60 days notice in plant closings and mass lay-offs. Some employers provide much more 

notice, announcing plant closings that will not happen for a year or two. For this reason, our database captured 

actual relocations that were sometimes announced in 2003, as well as announcements that would lead to relocations 

in late 2004 and 2005. We believe that reporting on announcements and relocations made in January through March 

provides a more accurate picture of job shifts than reporting only actual relocations, because it balances out 

announcements of production shifts that do not occur until after the time period with relocations that occurred during 

the time period, but not captured, because they were announced before the period being examined. Because our 

methodology does not allow for double-counting, we believe this becomes even less of an issue when we move from 

estimating production shifts out of the US for one quarter to estimating production shifts for one year. 
Corporate Restructuring and Global Capital Mobilityñ page 56

well, including marked increases to India (from 1,000 to more than 47,000 jobs), and to other 

Latin American countries (from 2,000 to more than 66,000). The number of jobs shifting to 

other Asian countries increased from 31,000 to 53,000. Overall, we find that the total number of 

jobs leaving the US for countries in Asia and Latin America increased from 204,000 in 2001 to 

as much as 406,000 in 2004.17

These data make clear that while in 2001 jobs were primarily being shifted to China and 

Mexico, today, because so many companies are simultaneously shifting to both near-shore 

locations in Mexico and Latin America and offshore locations in China, India, and other Asian 

countries, job losses to China and Mexico are directly linked to jobs losses to other countries 

worldwide. 

Because shifts to China are more likely to occur in the context of multiple shifts to 

multiple countries at the same time, the portion of jobs lost to China is smaller than might be 

expected, given the large number of shifts in production to that country, because for 34 percent 

of shifts out of the US to China, the total jobs lost from the facility had to be divided among the 

destination countries. Still, based on our job loss estimated, China is second only to Mexico in 

terms of total jobs lost, and the number of jobs shifting to China each year continues to increase. 

These data also suggest that the BLS estimate of jobs lost due to overseas relocations 

grossly underestimates the total jobs lost (BLS 2004a). While BLS reported 4,633 private sector 

workers in establishments with fifty or more workers lost their jobs due to job shifts to overseas 

locations in January-March 2004, we were able to find solid confirmation that an absolute 

minimum of 25,000 jobs shifted out of the US to other countries during that same period. 

 

17 We do not present results for other countries outside of Asia and Latin America here because we did not track 

these numbers in 2001. 
Corporate Restructuring and Global Capital Mobilityñ page 57

Production shifts out of other countries into China 

As the summary data we presented in Table 2 clearly demonstrates, production shifts into 

China are a global rather than simply an American phenomenon. The same kinds of pressures 

and opportunities that drive US companies to move production into China apply to Canadian and 

European countries as well, while for Asian countries, China is the nearby equivalent of Mexico 

for the US, with easy access and reduced shipping times and costs. 

As shown previously in Table 2, in addition to the fifty-eight shifts from the US into 

China, we also found ninety-six cases of production shifts from other countries into China. This 

includes fifty-five from Europe, thirty-three from other Asian countries, and five from Canada 

and Australia. We also found three cases of shifts of production from Mexico or other Latin 

American countries to China in January-March 2004. 

Jobs lost in production shifts from other countries into China

In Figure 9 we present the total and average number of jobs lost for all countries with 

production shifts into China. Total jobs lost data are not fully available for Asia, because, as we 

found in our 2001 study, media stories in the Asian press rarely mention the actual jobs lost in 

announced or reported production shifts out of those countries into China. In addition, corporate 

filings for publicly held companies trading on the Japanese or Singapore exchanges also do not 

report specifics about production shifts. This contrasts sharply with production shifts out of the 

US, Europe, Canada, and Australia, where we were able to get job loss data for all but a handful 

of cases. Thus the average number of jobs lost reflects average number of jobs lost in the four 

out of seventeen production shifts from Asia to China in January through March, where the 

number of jobs was reported. 
Corporate Restructuring and Global Capital Mobilityñ page 58

For the remaining countries, Europe had the highest total and average number of jobs 

shifted to China, with 12,589 total jobs and an average of 280 jobs per shift. Europe is followed 

by the US, which had 8,283 jobs shift to China, with an average loss of 148 jobs per production 

shift. From other Asian countries, the average number of jobs moved to China was 182, for a 

total of 2,189 jobs. From Latin America, a total of two hundred jobs, and an average of one 

hundred jobs per production shift, moved to China. Finally, there were a total of 740 jobs lost in 

shifts from other countries into China, for an average of 148 jobs per production shift. 

Figure 9: Number of jobs lost from production shifts into China, from the US and other countries, 

January-March 2004 

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Number of jobs lost

Average number of jobs lost 148 182 280 100 148

Total number of jobs lost 8,283 2,189 12,589 200 740

USA Asia Europe Latin America Other countries

Industrial sector for production shifts into China

 It appears that the types of industries moving to China from the US are similar to the 

types of industries moving from other counties (see Table 11). More than half of the shifts from 

other Asian countries were in electronics and electrical equipment, followed by textiles, and 

metal fabrication and production, which together accounted for approximately one-quarter of the 

Asian production shifts into China in January through March. A third of the shifts into China 
Corporate Restructuring and Global Capital Mobilityñ page 59

from Europe were in electronics and electrical equipment, while 18 percent were in the 

chemicals and petroleum industry. 

 While we found a significant number of cases where European companies, particularly 

from the UK, shifted back office and IT operations to countries such as India and Singapore, 

almost all of the production shifts from Europe to China were in the manufacturing sector. 

Table 11: Distribution of non-US production shifts into China by source country and 

industry, January-March 2004 

Asia Europe 

Latin 

America 

Australia and 

Canada 

Apparel and footwear 0% 2% 0% 60% 

Appliances 6% 6% 0% 20% 

Auto parts 6% 6% 0% 0% 

Automobiles 3% 0% 0% 0% 

Chemicals and petroleum 3% 18% 0% 20% 

Communications/information technology 0% 2% 0% 0% 

Electronics/electrical equipment 52% 33% 0% 0% 

Finance, insurance, and real estate 0% 2% 0% 0% 

Household goods 0% 2% 0% 0% 

Industrial equipment and machinery 0% 7% 33% 0% 

Metal fabrication and production 12% 6% 33% 0% 

Plastics, glass and rubber 3% 7% 0% 0% 

Sporting goods and toys 0% 2% 0% 0% 

Textiles 12% 7% 33% 0% 

Wood and paper products 3% 2% 0% 0% 

Company characteristics and structure for shifts into China

 Table 12 shows slight variations in the kinds of companies that shifted production into 

China. While only just over half of the companies moving to China from the US were 

subsidiaries of larger multi-nationals, 61 percent of the moves from other Asian countries, 73 

percent of moves from Europe, and 100 percent of moves from other countries were subsidiaries. 
Corporate Restructuring and Global Capital Mobilityñ page 60

 Similar to shifts out of the US, 80 percent of shifts from Europe were from publicly held 

firms. For those coming from other Asian and Latin American countries, all were from publicly 

held companies. On the other hand, only 20 percent coming from all other countries were 

publicly-held. Not surprisingly, while only 28 percent of production shifts from the US into 

China were by foreign-owned multinationals, US-owned multinationals accounted for only 18 

percent of all production shifts from Asian and European countries into China, and 33 percent of 

those from Latin America. Eighty-nine percent of Asian companies shifting production into 

China were Asian owned, while 77 percent of European countries were owned by companies 

from the UK or continental Europe. 

 

Table 12: Company structure for production shifts into China by source country, JanuaryMarch 2004 

Percent of 

shifts from 

US 

Percent of 

shifts from 

other Asian 

countries 

Percent of 

shifts from 

Europe 

Percent of 

shifts from 

Latin 

America 

Percent of 

shifts from 

all other 

countries 

Subsidiary 53% 61% 73% 100% 100% 

Publicly held 71% 100% 80% 100% 20% 

Privately held 29% 0% 20% 0% 80% 

US-based multinational 72% 18% 18% 33% 60% 

Foreign-based multinational 28% 82% 82% 67% 40% 

 Asia 2% 89% 20% 50% 0%

 Canada and Australia 5% 0% 0% 0% 50% 

 Continental Europe 10% 7% 53% 0% 0%

 Middle East 1% 0% 2% 0% 0%

 United Kingdom 8% 4% 24% 50% 50% 

In Table 13 we compare features of the parent companies shifting jobs into China. As 

these data show, we found that the parent companies of firms that shifted production into China 

from other Asian countries and Europe were larger than those of firms that shifted production 
Corporate Restructuring and Global Capital Mobilityñ page 61

from the US, both in terms of total employees and annual revenue. Interestingly, the parent 

companies of firms shifting production from other Asian countries and all other countries had, on 

average, a negative net income for 2003, much of which, as we found from our reading of public 

filings for these companies, was related to the enormous start-up costs associated with global 

restructuring. The parent companies of firms that shifted production from Latin America were 

much smaller than those from the US and elsewhere, both in total employment and annual 

revenue. 

 

Table 13: Company characteristics for production shifts into China by source country, JanuaryMarch 2004 

Shifts 

from US 

Shifts 

from other 

Asian 

countries 

Shifts 

from 

Europe 

Shifts 

from 

Latin 

America 

Shifts 

from all 

other 

countries 

Parent company characteristics 

 Total parent company employees 33,440 59,291 56,816 4,721 17,983 

 Annual revenue (USD millions) $11,012.5 $14,821.5 $15,697.8 $703.2 $5,675.8 

 Net income (USD millions) $647.1 -$67.1 $767.4 $27.3 -$253.0 

Company ownership history 

 Average years in operation 45 49 43 21 27 

 Percent more than 20 years in operation 78% 65% 70% 33% 67% 

 Average years under current owner 17 37 11 21 18 

 Percent 10 years or less under current owner 42% 33% 68% 67% 33% 

 We can also see that company ownership history differs somewhat between the 

companies coming from different regions. The companies based in Latin America and all other 

countries had been in operation for a much shorter period than US firms, and a greater 

percentage of European and Latin American firms had been under their current owner for ten 

years or less. Those coming from Asia had been under their current ownership for thirty-seven 

years on average, much longer than the seventeen years found in the US-based companies. 
Corporate Restructuring and Global Capital Mobilityñ page 62

Ireland, in particular, was devastated with production shifts to China during this period, 

especially in manufacturing. There was a time when Ireland was a primary destination for US 

companies seeking to shift production to cheaper locations overseas. But in the ever-pressing 

drive to cut costs and increase profits, companies operating in Ireland have moved to countries 

with even lower wages and taxes, and weaker regulations (Mulligan 2004). Similar to areas in 

Upstate NY and the Southeast in the US, rural areas in Ireland have been among the most 

affected by the layoffs associated with these transfers of production (Sheehy 2004). 

Among the companies that shifted production out of Ireland was Tretorn Sports, a 

subsidiary of German sporting goods manufacturer, Puma AG. Tretorn laid off sixty-eight 

workers when it announced closure of its tennis ball factory in Portlaoise and shifted production 

to China in January 2004 (Humphreys 2004). Also in January, eyeglasses manufacturer Sola 

Lenses, a subsidiary of US-based Sola International, announced it was transferring production 

from Wexford, Ireland to Venezuela, Mexico, and China, with a loss of 103 jobs (Irish 

Independent 2004). Three months later, US-based textile manufacturer Unifi announced it 

would move operations to China, a shift that ultimately cost the small city of Letterkenney, 

Ireland, 400 jobs (Ashmore 2004). 

As our data show, production shifts into China are not limited to North America and 

Europe, but also include many of the former ìAsian tigerî countries, now considered high wage 

economies compared to China. On March 8, the giant electronics manufacturer Motorola 

announced that it would shift chip design from Singapore, Taiwan, and Hong Kong to China and 

India. This move followed a much larger production shift of TV decoder boxes from Taiwan to 

Mexico. In January 2004, Motorola announced that it would spend $75 million to expand 

manufacturing capacity at its plant in Nogales, Mexico. In combination, Motorolaís production 
Corporate Restructuring and Global Capital Mobilityñ page 63

shifts involved more than 1,000 jobs, most leaving Taiwan. While the shift of Motorolaís chip 

design involved just twenty-five jobs in Singapore, the move is part of a much larger exodus of 

computer parts manufacturing out of the city-state. Seagate Technology, Maxtor Corporation 

and Western Digital Corporation, the worldís three largest computer parts manufacturers, have 

all moved production of computer disk drives out of Singapore to lower-cost countries in Asia. 

The losses prompted Singapore to reduce its corporate tax rate to retain and recruit capital 

investments (India Telecom 2004; Austin American Statesmen 2004a; Corporate Mexico 2004). 

Japan also was a major site of production shifts into China, including many multi-site 

shutdowns of long term Japanese manufacturing facilities in textiles and electronics. For 

example, after announcing a plan to lay off 2,800 workers by the end of its fiscal year 2005, 

Japanese textile manufacturer Kanebo Ltd. announced in January plans to slash its domestic 

workforce and transfer production to China (Japan Economic Newswire 2004). This will result 

in the closure of spun-cotton factories in Nagahama and Hamamatsu and a research lab in Izumo, 

as well as a 30 percent reduction in output from a spun cotton factory in Nagahama and a wool 

production facility in Ogaki. A total of 470 jobs will be lost in all of the facilities combined 

(Knight Ridder/Tribune Business News 2004). These closures mark the end of an era as Kanebo 

transfers production to China that has been in Japan for the last hundred years (Asia Africa 

Intelligence Wire 2004). 

As we mentioned in the beginning of this section, what these data show is just how global 

and extensive production shifts into China have become. Particularly striking are the large 

number of US and foreign-owned multinationals that are shifting production, in close succession, 

into China from Europe, North America, and elsewhere around the globe. 
Corporate Restructuring and Global Capital Mobilityñ page 64

Global production shifts 

 The data presented above make clear that, although we were commissioned to look at 

production shifts from the US to China, the issue of production and job shifts is truly a global 

one. We see a great deal of movement of jobs and production between many different countries, 

including companies that shift production to more than one country at once. In this section, we 

provide some more detail on these global production shifts. These findings need to be 

understood as a conservative estimate of global movements. We were not deliberately tracking 

movements to Africa, Western and Eastern Europe, Canada, Australia, New Zealand, or the 

Middle East. Therefore, our results are more complete for shifts into Asia and Latin America. 

Still, in the process of tracking these latter shifts, we picked up the other shifts described below. 

While these findings undercount shifts to these other regions of the world, they still capture 

which industries and which kinds of companies are shifting work from one destination region to 

another. 

 In Figure 10, we can see that the companies that shifted production to Mexico and the 

rest of Latin America continued to come primarily from the US. In fact, almost all shifts to 

Mexico were from the US and Canada (90 percent), while some firms from Continental Europe 

and the UK shifted production to other Latin American countries (5 percent for each). In 

contrast, shifts into China, represent a fairly dispersed range of global source countries. Shifts 

into India were dominated by companies from English-speaking countries, the US and UK firms 

together accounting for 81 percent of all shifts into India. 
Corporate Restructuring and Global Capital Mobilityñ page 65

Figure 10: Percent of global production shifts into each destination country, by country or region of 

origin, January-March 2004 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percent of shifts to destination country

 Asia 21% 7% 16% 2% 0% 0%

 Australia, Canada, and NZ 4% 2% 0% 6% 0% 0%

 Latin America 2% 2% 0% 2% 3% 0%

 Continental Europe 21% 10% 12% 2% 5% 43%

 UK and Ireland 15% 31% 13% 2% 5% 37%

 USA 38% 50% 58% 84% 88% 20%

China India Other Asia Mexico Other Latin 

America

Eastern 

Europe

In Table 14 we describe the characteristics of companies that shifted production to 

various regions, combining records from all source countries. We see that all companies that 

shifted production to Mexico and Eastern Europe, as well as the overwhelming majority of 

companies that moved production to China, are in manufacturing industries. In contrast, only 

one-third of companies that shifted production to India and only one-half that shifted production 

to other Latin American countries were in manufacturing. This highlights the higher percentage 

of communications and IT jobs that moved to those regions. Not surprisingly, the average 

number of jobs per production shift was somewhat higher for countries where the majority of 

production shifts were in manufacturing industries. 

The one exception to this is China, where the average job shift was only 200 people ñ 

smaller than the average shift to most other regions. This reflects the fact that 29 percent of all 

the companies shifting production into China from different parts of the world were 
Corporate Restructuring and Global Capital Mobilityñ page 66

simultaneously shifting production to other countries. Thus, even a relatively large 

manufacturing company would show a smaller number of jobs being sent to China because some 

portion of the jobs lost in that company shifted to other countries as well. 

Table 14: Comparative characteristics of global production shifts by destination country, all source 

countries combined, January-March 2004. 

Shifts to 

China 

Shifts to 

India 

Shifts to 

other Asian 

countries 

Percent of 

shifts to 

Mexico 

Shifts to 

other Latin 

American 

countries 

Shifts to 

Eastern 

Europe 

Company characteristics 

Manufacturing industry 97% 34% 75% 100% 53% 100% 

Non-manufacturing industry 3% 66% 25% 0% 47% 0% 

Average number of jobs shifted 200 243 399 329 162 560 

Total number of jobs shifted 24,001 13,109 22,355 24,971 6,143 14,562 

Years in operation 44 50 37 48 34 56 

More than 20 years in operation 71% 55% 49% 85% 56% 75% 

Years under current owner 19 20 24 17 13 20 

Ten or fewer years current owner 50% 67% 45% 53% 67% 60% 

Parent company characteristics 

 Total parent company employees 46,539 53,427 40,982 44,971 37,955 79,424 

 Annual revenue (USD millions) $13,174.3 $17,426.6 $12,260.5 $10,289.5 $10,923.0 $25,886.1 

 Annual income (USD millions) 483.3 $1,382.5 $243.1 $801.6 $527.2 $1,817.0 

 Publicly held 79% 84% 81% 72% 83% 87% 

 Privately held 21% 16% 19% 28% 17% 13% 

 US-based multinational 40% 48% 51% 72% 83% 20% 

 Foreign-based multinational 60% 52% 49% 28% 17% 80% 

 

Firms that shifted production to China, Mexico, and Eastern Europe were much more 

likely to be long-term, well-established companies than firms shifting to India, other Asian, and 

other Latin American countries. Eight-five percent of companies that shifted production to 
Corporate Restructuring and Global Capital Mobilityñ page 67

Mexico, 71 percent of firms that shifted production to China, and 75 percent that moved 

production to Eastern Europe had been in operation for more than twenty years. In contrast, twothirds of companies shifting to India and other Latin America have been under current ownership 

fewer than 10 yearsóagain reflecting a higher proportion of communications and IT firms. 

Manufacturing companies that shifted production out of the UK and Ireland, in particular, 

tended to be long-established, major employers in small communities. The loss of such 

companies has been especially devastating. For example, when Herdmanís, a textile 

manufacturer, announced it would close its spinning mill in Sion Mills in Northern Ireland, the 

town lost more than the 270 jobs that were shifted to South Africaóit lost a piece of its identity. 

Herdmanís had been the small townís primary employer for the last 170 years. As the 

name of the town implies, Sion Mills grew up around the mill, which once employed 1,200 

people and remained open even through the Irish Famine (Moriarty 2004). Many local families 

had several family members working at the mill, and Herdmanís had employed many families 

through multiple generations (Palmer 2004). As the people of Sion Mills look elsewhere for 

employment, it remains to be seen whether the community can retain its cohesiveness in the face 

of this loss. 

 As described in Table 14, we found that the firms that shifted production to Eastern 

Europe tended to be some of the worlds largest employers, with, on average, 79,424 parent 

company employees, sales revenues averaging above $25 billion dollars, and net income 

averaging $1.8 billion a year. These parent companies include some of the worldís most 

powerful and well-known corporations such as Siemens AG, IBM, Delphi, Samsung Electronics, 

Royal Philips Electronics, and Matsushita. The parent companies of firms that shifted 

production to India also tended to be quite large, averaging 53,427 employees worldwide. They 
Corporate Restructuring and Global Capital Mobilityñ page 68

were also quite profitable, with $17.4 billion in annual revenue and $1.3 billion in net income. 

This is not surprising given that the parent companies for firms shifting jobs into India include 

some of the worldís largest financial corporations such as HSBC, Lloyds TSB Group, Axa 

Insurance, and Barclays PLC. 

The parent companies of firms that shifted production to China, Mexico, and other Asian 

and Latin American countries were slightly smaller, averaging between 37,955 parent company 

employees for firms shifting to Latin America to 46,539 employees for firms shifting to China. 

Yet once again, these parent companies include some of the worldsí largest multinationals, such 

as United Technologies (China) Robert Bosch (China, Brazil, and Mexico), Boeing (South 

Korea), GlaxoSmithKline (China and India), RAG Aktiongesellschaft (China), BASF (Mexico), 

Daimler Chrysler (Brazil), Citigroup and Tyco International (Mexico), Toshiba (China and the 

Philippines), Alcoa (China), and Royal Dutch/Shell Group (China and Singapore). 

 As Table 14 shows, the majority of firms in our study were publicly-held. That is 

particularly evident for those firms that shifted production to Eastern Europe and India, while the 

greatest percentage of privately-held firms, 28 percent, were found among those shifting to 

Mexico. Finally, Table 14 shows that 83 percent of the parent companies of those firms that 

shifted production to other Latin American countries and 72 percent of those that moved 

production to Mexico were US-based multinationals. In contrast, only 40 percent of parent 

companies that moved production to China were US-based multinationals, while just 20 percent 

of those that moved production to Eastern Europe and 48 percent of those that moved production 

to India were US-based. These findings reflect the large number of European and Asian 

countries that shifted production into China, as well as the high percentage of Western European 

countries that move production to Eastern Europe and UK firms that moved production to India. 
Corporate Restructuring and Global Capital Mobilityñ page 69

For some of the largest production shifts out of the US and Western Europe to Eastern 

Europe and Asia, it was extremely difficult to confirm details about when and whether the work 

was actually going to be shifted and how many workers would be impacted by the shift. For 

example, on February 16, 2004, Siemens managing director of information systems in India, 

Anil Laud, stated that, "Siemens has recognized that a huge amount of software development 

activity needs to be moved from high-cost countries to low-cost countries" (Austin American 

Statesman 2004: B6). A Siemens AG official announced that the company would move most of 

its 15,000 software-programming jobs from the US and Western Europe to India, China and 

Eastern Europe. However, the next day, a Siemens spokesperson in New York countered that 

the company had no significant plans to outsource work. In early April, Siemens confirmed that 

it had plans to shift mobile phone manufacturing work from Germany to low-cost countries 

(Financial Times 2004). IG Metall, the German union representing Siemens employees, 

estimated that the production shifts would cost up to 10,000 jobs in Germany. Later that month, 

Siemens stated that it would be able to maintain some work in Germany if the union agreed to 

concessions, including increasing the number of working hours per week with no additional pay 

(AFX.COM 2004). 

Table 15, provides more details on which countries we found to be the primary 

destinations for global production shifts for specific industries. 
Corporate Restructuring and Global Capital Mobilityñ page 70

Table 15: Global production shifts out of the US by industry and destination country, January ñ 

March 2004 

China India 

Other 

Asia Mexico 

Other 

Latin 

America 

Eastern 

Europe 

All 

Other 

Aerospace 33% 0% 67% 0% 0% 0% 0% 

Apparel and footwear 39% 0% 11% 33% 11% 6% 0% 

Appliances 47% 0% 21% 26% 0% 5% 0% 

Auto parts 17% 20% 0% 49% 2% 12% 0% 

Automobiles 33% 0% 0% 33% 33% 0% 0% 

Chemicals and petroleum 50% 16% 9% 9% 6% 6% 3% 

Communications/information technology 4% 39% 23% 0% 27% 0% 7% 

Electronics/electrical equipment 48% 5% 24% 9% 0% 11% 3% 

Finance, insurance, and real estate 6% 88% 6% 0% 0% 0% 0% 

Food processing 0% 0% 38% 25% 13% 0% 25% 

Household goods 33% 0% 20% 20% 13% 0% 13% 

Industrial equipment and machinery 36% 7% 4% 36% 0% 10% 7% 

Metal fabrication and production 44% 0% 11% 26% 11% 4% 4% 

Plastics, glass and rubber 28% 0% 4% 36% 4% 16% 12% 

Sporting goods and toys 89% 0% 11% 0% 0% 0% 0% 

Textiles 42% 0% 0% 13% 29% 0% 17% 

Wood and paper products 44% 13% 0% 33% 11% 11% 0% 

As might be expected, China continued to be a primary destination for sporting goods 

and toys (89 percent), electronics and electrical equipment (48 percent) textiles (42 percent), and 

wood and paper products (44 percent). But it was also the primary destination for higher-end 

industries including appliances (47 percent), chemicals and petroleum (50 percent), household 

goods (33 percent), and metal fabrication and production (44 percent). India was the primary 

destination country for communications and information technology (39 percent) and finance, 

insurance and real estate (88 percent), while Mexico remains the primary global destination for 
Corporate Restructuring and Global Capital Mobilityñ page 71

auto parts (49 percent), plastics glass and rubber (36 percent), and a major destination for 

industrial equipment and machinery (36 percent), metal fabrication and production, and 

appliances (both 26 percent), apparel and footwear (33 percent), food processing (25 percent), 

and automobiles (33 percent). Other Asian countries are the primary destination for food 

processing, including the shift of 14,000 poultry feed jobs by Japfa Comfeed from Indonesia to 

Myanmar and Vietnam. 

Global shifts in textiles

Many observers note that increased global offshoring trends began to shift in the last 

quarter of 2004, in preparation for the end of the Multi-Fiber Arrangement (MFA) on December 

31, 2004. The MFA has been the agreement governing global trade in textiles and apparel since 

1974. When the World Trade Organization went into effect in 1995, it replaced the MFA with a 

new set of guidelines (Agreement on Textiles and Clothing) designed to phase out quotas in the 

industry. According to Scott Nova of the Workers Rights Consortium, a US-based non-profit 

that monitors working conditions in factories for compliance with university codes of conduct, 

the phase-out will lead to massive changes in the industry: 

As MFA is phased-out, there will be a major shift of apparel production to China, 

and to a lesser extent India and possibly some other locales. The result will be 

widespread job loss in many other Third World countries, especially in Indonesia, 

the Philippines, Bangladesh, Mexico, Central America and the Caribbean, and 

southern Africa. There is broad agreement throughout industry, labor and 

government circles that this shift will occur and already is occurring. The only 

disagreement is over the extent and pace of job loss in individual countries. The 

World Trade Organization predicts that China, which now accounts for 16% of 

the US apparel import market, will account for more than 50% after MFA phaseout, with this gain coming at the expense of suppliers in other Third World 

nations. In Bangladesh alone, some economists predict the loss of more than one 

million jobs ñ half of all apparel employment in the country (Nova 2004). 
Corporate Restructuring and Global Capital Mobilityñ page 72

 While we observed some shifts in textiles, apparel and footwear, our data are unlikely to 

capture moves in this industry that will not occur until late 2004 or early 2005. Given that much 

of the textile and apparel production in the US and Europe has already moved, it is likely that the 

majority of MFA production shifts that will occur will be from Latin America and other Asian 

countries to China. 

Global shifts in white-collar occupations

Because of the media attention on the offshoring of white-collar employment, we felt it 

was important to provide more details on global production shifts involving these occupations. 

In Figure 11 we provide data on the shifts in white-collar work by industry. Not surprisingly, 70 

percent of white-collar work moving from all countries is in the communications and IT sector. 

Sixteen percent of the shifts were in finance, insurance and real estate, and 14 percent in 

manufacturing, including research and design and back office operations. 

Figure 11: Shifts in white-collar work by industry, all countries origin, January-March 2004 

14%

70%

16%

0%

10%

20%

30%

40%

50%

60%

70%

Percent of white collar shifts

Manufacturing Communications and

information technology

Finance, insurance and real

estate

 We also provide a breakdown of white-collar work by the type of service being shifted. 

As Figure 12 describes, 61 percent of the white-collar shifts from all countries were call centers, 

which parallels the media attention on this industry. Twenty-five percent of the shifts were in 
Corporate Restructuring and Global Capital Mobilityñ page 73

R&D and IT. Despite much media attention on back office shifting, we found only 7 percent of 

the white-collar shifts were in this category, and 6 percent were in financial services. 

Figure 12: Shifts in white-collar work by type of service, all countries, January-March 2004 

7%

61%

6%

25%

1%

0%

10%

20%

30%

40%

50%

60%

70%

Percent of white collar shifts

Back office Call centers Financial Services R & D and IT Other

 India is the largest destination for the white-collar shifts in our database, with almost half 

of all shifts headed there in January through March 2004. Nineteen percent of the shifts were 

headed to other Latin American countries, and 19 percent to other Asian countries. Only 9 

percent went to China, 3 percent to Eastern Europe, and none to Mexico. 

Figure 13: White-collar shifts by destination country, January-March 2004 

9%

46%

17%

0%

19%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Percent of white collar shifts

China India Other Asia Mexico Other Latin

America

Eastern

Europe
Corporate Restructuring and Global Capital Mobilityñ page 74

The UK has been a primary source of white-collar shifts to India. Similar to the US, the 

UK has been experiencing the loss of manufacturing jobs to cheaper locations for years. Also 

like the US, many in the UK hoped that white-collar service jobsósuch as those in call centers, 

customer service, IT, and computing technical supportówould fill the unemployment vacuum 

left in communities throughout the country when big manufacturing sector employers shifted 

production overseas (Labour Research 2004). For a while it seemed that this would be the case. 

The UKís service sector appeared to be booming, with call centers taking the lead. In fact, 

according to the UK Department of Trade and Industry, call centers were responsible for more 

than a third of new jobs created in the UK in 2001 (Labour Research 2004). Many of these 

centers were set up in communities which were devastated by the loss of major manufacturing 

employers. 

The boom was short-lived, however. Now communities throughout the UK are going 

through a second wave of offshoring, experiencing once again the devastation caused by the 

withdrawal of a major employer. According to Labour Research, to date, more than 50,000 

service sector jobs have been offshored, particularly to India (Labour Research 2004). In 

December 2003, insurer Aviva sparked outrage in the UK when it announced its intentions to 

transfer 2,350 UK call center, processing, administrative, and information technology jobs to 

India. By August 2004, with the move partially completed, Aviva boasted a 37 percent increase 

in profits. The same month Aviva announced a further 950 job cuts, as it plans to shift some 

functions from within its life insurance division to India as well (Bristol Evening Post 2004). 

In January 2004, Axa Insurance announced plans to lay off 700 UK workers, shipping 

230 back office jobs to Bangalore, India (Jones 2004). Also in January, UK insurer Lloyds TSB 

announced it had finalized plans to shift 960 call center jobs to India (Croft 2004). In February 
Corporate Restructuring and Global Capital Mobilityñ page 75

2004, National Rail Enquiries announced it would outsource 850 UK call center jobs to 

Bangalore, where operators will answer questions about train arrivals, routes, and departures 

(Clement 2004). Also in February, the bank HSBC announced that it had finalized a deal that 

will send 4,000 UK jobs to India, Malaysia, and China. On March 2, 2004, HSBC was accused 

in the British media of profiteering when the bank reported record-breaking profits of more than 

$8.7 billion (Manning 2004). On June 17, 2004 HSBC announced 3,500 further UK job cuts, 

835 of which will be sent to call centers in India, on top of the 4,000 previously announced 

(Queensland Courier Mail 2004). 

 In perhaps one of the most controversial white-collar outsourcing moves, a number of 

pharmaceutical companies, including industry giant GlaxoSmithKline (GSK), are beginning to 

move their clinical trials from high wage countries in North America and Europe to low wage 

countries in Asia and Eastern Europe. In February 2004 GSK announced plans to transfer R&D 

operations to Poland, China and India. The company announced its plans to locate statistical and 

data management in Bangalore, India and move case reporting to both India and Poland. It is 

also setting up two R&D centers in China. 

While drug companies have long used disadvantaged populations in the US and around 

the globe for drug testing, the practice of offshoring clinical trials is being actively touted for its 

potential cost savings. For example, the Confederation of Indian Industry (CII) released a study 

stating that while clinical trials cost $300-350 million in the US, they could be done in India for 

only $25 million. CII noted that India offered an ideal environment for testing drugs, because of 

the vast population and the prevalence of a large number of diseases and patient resources (Ando 

2004). 
Corporate Restructuring and Global Capital Mobilityñ page 76

Currently, there are 70,000 patients enrolled in clinical trials for GSK. CEO J.P Garnier 

remarked, ìWe are leaving a lot of money on the table by going through clinical trials in highcost countries, which could be done faster and cheaper in India, Poland and other low-cost 

countries.î GSK estimates that it could save more than $200 million per year through the 

practice, by shifting 30 percent of those trials to developing countries at a savings of $10,000 to 

$15,000 per patient (Food & Drug Letter 2004: not paginated). 

Global shifts in manufacturing 

While the offshoring of white-collar jobs to India and China is clearly a hot topic in the 

global media, the overwhelming majority of workers in the US and other countries that have 

been negatively impacted by global production shifts continue to be those employed in 

manufacturing. This is also a story that has gotten much more complicated since we first tracked 

manufacturing production shifts in 2001. Although in 2001 most manufacturing production 

shifts involved simple site-to-site transfers of jobs and work, that is no longer the case. Rather, 

production transfers often involve multiple shifts occurring along complex networks of 

production and corporate ownership, sometimes taking place over the course of several years. 

For example, the Tomkins PLC closure of their Trico wiper blade plant in Buffalo, New York, 

eliminating 212 jobs, was the culmination of nearly twenty years of shifting production to 

Mexico and Brownsville, Texas. But Trico is just one of the many auto components subsidiaries 

under Tomkins umbrella, all of which are being shifted from high wage countries to low wage 

countries around the world. 

The Trico story begins in 1985 when they had three plants and some 2,500 workers in 

Buffalo. By 1987, Trico had closed two plants and sent more than 1,600 jobs south to Texas and 

Mexico (Begin 2003a). Continued threats of closure during the 1990ís forced union members to 
Corporate Restructuring and Global Capital Mobilityñ page 77

accept contract concessions totaling more than $4.00 per hour. Despite concessions and 

productivity improvements, Trico announced in 2003 that it would close the plant and send the 

production to plants on both sides of the US-Mexico border. 

The move was also part of a much larger restructuring plan by Tricoís UK-based parent 

company, Tomkins PLC. At the same time that Tricoís jobs were leaving Buffalo, Tomkins 

announced that it would shift all wiper production from Europe to North America, primarily 

Mexico (Begin 2003b). Tomkins also financed the restructuring of its subsidiary, Gates Rubber 

Co. as it moved automotive hose production from Galesburg, Illinois to Cohisa, Mexico (Rubber 

& Plastics News 2003). Also in 2003, Gates announced plans to shut down plants in Branford, 

Canada and Elizabethtown, Kentucky while it simultaneously opened a new plant in Thailand. 

Another Tomkins subsidiary, Schrader-Bridgeport, announced in November 2003 that it 

would close its Muskogee, Oklahoma plant and transfer work to other North American plants, 

including one in Matamoros, Mexico (Droege 2003). The closure meant the loss of 207 jobs in a 

community that had recently lost 500 other manufacturing jobs to plant closures. In addition to 

the global production transfers, Tomkins has also dedicated significant capital to investment in 

China, including a new ìstate of the art facilityî in Suzhou. Jim Nicol, Tomkins CEO, countered 

misperceptions that Chinese plants are run down and inefficient. 

[W]hen I talk about China, people, think, well, the plants have got hundreds 

of people running around with ball peen hammers going tick, tick, tick, 

knocking things around, and this is actually a plant that was set up by the 

people from Windsor, Ontario. . .As you can see, itís nice on the outside. . . 

On the inside, look, this is a state of the art facility. . .One operator, multiple 

functions and then a readout gear that tells you the first time deliver, speed 

and matching tack time and everything else. So, that a state of the art facility, 

and thatís China (Fair Disclosure Wire 2003g: 8). 
Corporate Restructuring and Global Capital Mobilityñ page 78

 Tomkins is just one of many stories we found where one parent company simultaneously 

shifted operations from multiple subsidiaries and divisions from various sites to various 

countries. We found this to be especially common in industries producing high-end electronic 

components and in auto parts, but the pattern held true in nearly every industry in every country. 

Conclusion 

 While our findings report on production shifts for just the first three months of 2004, the 

shifting of production and employment from country to country has become so pervasive that 

even data from a single quarter can provide critical insights into the changing nature and effects 

of global production shifts. And, as our data show, for all countries China stands at the center of 

the story, for the US and for other countries as well. At the same time China is also just one part 

of the story. Large multinationals, both US- and foreign-owned, are restructuring their 

operations, buying and selling companies, and simultaneously shifting production near shore (the 

US to Mexico, Europe to Eastern Europe, Asia to other Asian countries) and off shore (the US, 

Europe, and Asia to China and other Asian countries). 

In combination, these data remind us that it is not a story of good jobs being stolen from 

US workers by low-wage workers in Latin America and Asia, especially China, with whom US 

workers can never hope to compete. Instead it is a story of the worldís largest multinational 

corporations buying and selling companies and pieces of companies, opening and closing plants, 

downsizing and expanding operations, and shifting employment from one community to another, 

all around the world. With no particular loyalty to country, industry, community, or product, 

what our data suggest is that this global race to the bottom is driven by several unifying factors: 

the search for ever cheaper production costs, accessibility to expanding global markets, and the 
Corporate Restructuring and Global Capital Mobilityñ page 79

flexibility that comes from diverse supply chains in an ever more volatile global economic and 

political climate. 

 These data also provide the first hard data with which to inform the raging debate on the 

internet, in the media, and on the campaign trail on the nature, extent, and impact of outsourcing 

of US jobs to other countries. First, these data make clear that, despite some initial slowdown in 

the economy after 9-11 and the wars in Afghanistan and Iraq that followed, firms continue to 

move significant numbers of jobs out of the US to both Asia and Latin America. Contrary to 

recent estimates by BLS, we estimate that the numbers of jobs being lost through production 

shifts out of the US are significant, averaging as much as 99,000 a year to China, 140,000 a year 

to Mexico, and 406,000 overall. 

Second, although the media has focused a great deal on the outsourcing of IT and 

customer service jobs to India, and, to a lesser extent, China, manufacturing firms continue to be 

the primary source of exported jobs, and Mexico is still a top destination for many firms. At the 

same time, the global outsourcing of service and high tech jobs is growing rapidly, and so in the 

years to come we should see a shift in the balance between the proportion of jobs leaving the US 

that are in manufacturing and service sectors. 

 Third, the new story these data tell is that corporations are no longer shifting to just 

Mexico, Latin America, China, or other Asian countries. Instead, what our findings show is that 

for all multinationals, US or foreign owned, there is an increasing tendency to move production 

to multiple destinations in multiple countries at the same time, simultaneously meeting the need 

to keep access to near-shore markets with less costly and less cumbersome shipping structures, 

while also gaining access to the large cost savings, market opportunities, and government 

supported infrastructure provided by offshore destinations in China and other Asian countries. 
Corporate Restructuring and Global Capital Mobilityñ page 80

 Fourth, these data show that the outsourcing of production, both near shore and off shore, 

from the US and around the globe, crosses nearly every major industrial sector, from 

communications and IT, to high-end manufacturing of industrial machinery and electronics 

components, to low wage manufacturing in food processing and textiles. 

 Fifth, the incidence of production shifts among unionized firms and unionized workers in 

the US is striking. Whether or not employers are shifting production in a deliberate attempt to 

break the union, unionization rates among the firms shifting production out of the US far exceed 

the national average union density óeven taking industry into account. It also means that the 

jobs leaving the US are more likely to be good jobs, with full health care and pension plans, 

making the costs of these production shifts to workers and communities even higher. 

Sixth, our research shows that because the topic of outsourcing is politically sensitive, 

companies may be attempting to keep production shifts quiet. There have been several cases 

where plans for outsourcing or production shifts have been uncovered in the media, highlighting 

the fact that some companies do not want this information known. And we have found 

numerous TAA cases where the Labor Department ultimately found production had shifted out 

of the US at the same time that the company was persistently telling the media that jobs were 

only being shifted domestically. This may be a change from our findings in previous research, 

when it appeared that companies frequently made public statements about planned moves in 

order to threaten workers attempting to unionize, or to boost their stock values. It also suggests 

that the actual numbers of jobs lost, particularly in customer service and IT occupations and 

industries where the subject of outsourcing is particularly sensitive, may be seriously 

underestimated by media tracking data. 
Corporate Restructuring and Global Capital Mobilityñ page 81

Finally, the importance of this topic suggests that further research is needed. Despite the 

attention paid outsourcing, there still exists no government agency that monitors production 

shifts out of the US and the impact of those production shifts on US wages, employment, and 

taxpayer-supported social services, and tax revenue. Our research is the only empirical work that 

allows scholars and policymakers the information needed to understand these global trends. Yet 

it is only a brief snapshot of one quarter of one year. Additional and more comprehensive 

research is required to track production shifts over a longer period, throughout the global 

economy, and with multi-lingual searches. In addition there need to be more in-depth case 

studies to better understand the changing trends in the global outsourcing of production and 

employment and the impact that global corporate restructuring and capital mobility continue to 

have on workers and communities in the US and around the globe. There also needs to be 

comparable research that looks at which companies are expanding production and employment 

in which countries. Most of all, governments around the world need to do a better job of 

monitoring and tracking the ever more rapid and complex shifting of capital and jobs around the 

globe, because the effects of these shifts will be long lasting on workers, employment, health and 

safety, environment, living standards, and public services, in both source and destination 

countries for the offshoring of employment, services, and production.
Corporate Restructuring and Global Capital Mobilityñ page 82

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