Cruz Picks Nation’s Most Aggressive Champion of Offshoring as Vice President

Cruz and Fiorina Ty Wright Getty
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After being mathematically eliminated from reaching 1,237 delegates, Sen. Ted Cruz responded by appointing former Hewlett Packard CEO Carly Fiorina as his running mate.

The appointment, however, could have unintended consequences given Fiorina’s pivotal role in developing the controversial offshoring model favored by tech companies today.

In particular, Fiorina’s record could shine unwanted attention on what has been a similarly uncomfortable area for Sen. Ted Cruz, such as Cruz’s offering an amendment to increase the H-1B program by 500 percent, his 2015 vote to continue allowing Chinese currency manipulation, and his 2015 vote to fast track President Obama’s Trans-Pacific Partnership agreement—all votes which have been highlighted by the Trump campaign in recent months.

During her time at Hewlett Packard, Fiorina sparked fury when she declared that “There is no job that is America’s God-given right anymore”— suggesting that American workers should be forced to compete with all of the world’s workers. Throughout her career as a high-powered businesswoman, Fiorina was an aggressive proponent of offshoring U.S. jobs, which she called “right-shoring”. As Forbes reported in 2002, “with the blessing of Chief Executive Carly Fiorina”, HP sought to “move everything” it could offshore.

Kim Berry, a former HP employee and registered Republican from California, described the Cruz-Fiorina ticket as “a good match”.

“They’re two peas in a pod that support TPP [the Trans-Pacific Partnership] and support the corporate agenda,” Berry said.

Berry— who is currently the President of the Programmers Guild, which advocates for the interests of U.S. tech workers and computer programmers— said that he views Cruz/Fiorina as the “globalist” ticket for “anyone supporting TPP and these one-way trade agreements that take down all of our trade barriers.”

“It’s good for voters to know now what they’re getting [with Cruz], and if it’s not what the voters support, the voters can go somewhere else. So in that sense, I support Cruz’s announcement. It’s good to know,” Berry said.

Berry left Hewlett Packard in 2000 on a “would rehire” status to work for a start-up “with the assurance that HP would hire me back and welcome the skills I learned from my experience—not unlike taking a leave for education.” However, when Berry tried to go back to the company a year later “the managers told me they are under orders that any new opening must be filled overseas.”

“The hurt that it caused me and it caused the 3,000 people I saw let go just in this one site here in Roseville near Sacramento, it was a reversal of what HP had built— a company that respected people,” Berry said.

“Obama got a lot of mileage out of attacking Romney for being the Outsourcer in Chief and funding the ‘Pioneers of Outsourcing’, but Fiorina was one of the first tech CEOs to fully embrace offshoring of US high-tech jobs,” said Howard University’s Ron Hira, who is an expert on the tech labor market.

Hira explained that Fiorina “set a precedent that technology firms would now pursue profits through offshoring”:

Fiorina was an early adopter of, evangelist for, and staunch defender of offshoring – the shipping of US jobs to India and other low cost countries. It isn’t just a matter of downsizing the workforce, it was a strategy of moving high-wage high-tech jobs overseas, and encouraging other firms to do the same… Let’s be clear – this was a strategic choice made by Fiorina and it had significant ripple effects in the sector, where firms follow the leaders in employment relations.

Indeed, as Forbes reported in 2002, with “with the blessing of” Carly Fiorina, HP sought to offshore everything it could. Forbes wrote:

We’re trying to move everything we can offshore,’ HP Services chief Ann Livermore told Wall Street analysts at a meeting Wednesday… Livermore, with the blessing of Chief Executive Carly Fiorina, is betting that HP can both lower its costs and damage industry leader IBM by slashing services prices with cheaper bodies.

Yet Hira explains that “in addition to shaping the private sector response to offshoring Fiorina played a critical role in influencing the public policy responses to offshoring. In direct commentary in Washington, and more importantly through behind the scenes funding studies and reports she distorted the causes and impacts of offshoring.”

Fiorina “helped to legitimize the practice in 2003 and then became a key industry spokesperson defending outsourcing in Washington DC circles,” Hira said. “She could have been a leader by playing a positive role in working with Congress and the Bush Administration in shedding light on the causes and effects of offshoring (both positive and negative) but instead chose to pursue the easy profits of offshoring.”

Berry said Fiorina’s prioritization of corporate profits above quality of life for U.S. workers was evident in her declaration that there is “no job that is America’s God-given right anymore”.

“That’s a globalist view of the world,” Berry said, explaining that Fiorina is suggesting that, “as an American you don’t have any right [to a U.S. job anymore]. You have to compete with the people of Vietnam and all these people that make $5 a day. [She’s saying that] just because you’re an American, you have no right to have an American wage or an American job. I disagree… My view is that we have a government whose first obligation should be to protect the security interests of Americans and the economic interests of Americans. And if that means putting up tariffs like they [Reagan’s administration] did to protect Harley-Davidson, or protect other industries in the U.S. that’s what they should be doing.”

Berry argued that Fiorina’s worldview would cause American communities to more closely resemble “the slums of Mumbai”:

When I was younger, we had this race to the top that other countries were going to grow and be what the U.S. is. Then about 15 years ago, it became this race to the bottom: everyone is trying to undercut wages, undercut regulations, let’s just be the cheapest country we can be. And at some point, that’s going to turn us all in to the slums of Mumbai. And I don’t like that direction. I don’t respect the globalists. I don’t respect TPP. I think they’re leading us down a very bad path that’s going to be this 1% that have the yachts in Monaco, who are immune to everything that’s happening, and the rest of the people’s standards of living go lower and lower.

In 2004, Fiorina seemed to defend her statement in a Wall Street Journal op-ed entitled “Be Creative, Not Protectionist”.

Fiorina writes that despite job losses caused by corporate offshoring, the U.S. government ought to oppose measures to crack down on the practice:

Thus far, attention has focused on a handful of companies, like HP, which have sourced some jobs to other countries. As happened with Japan in the late ’80s, everyone from presidential candidates to unions to state legislatures to Congressmen are offering protectionist proposals to limit or prohibit the practice. Jobs are a gut-wrenching issue. And there’s no question that companies that source jobs overseas have an obligation to help workers left behind get the tools they need to find jobs and succeed. But let’s not forget the lesson that Japan itself learned in the ’90s: when you build walls to protect your own workers, in the long run you end up hurting them.

In her op-ed, Fiorina gives a token acknowledgement to the importance of U.S. jobs, before immediately proceeding to qualify it by saying that the U.S. government should not impose any measures to protect U.S. jobs.

Any job losses to foreign countries are particularly painful when the U.S. economy is failing to produce net job gains. Every job is important because each one represents an American’s livelihood and ability to raise a family. Yet spending our time building walls around America will do nothing to help us compete for the millions of new jobs being created.

Hira explained that during her tenure at Hewlett-Packard, Fiorina was a pioneer in replacing qualified American workers with cheaper laborers. “She didn’t just lay off those 33k+ American workers, she was also actively replacing them with cheaper workers overseas,” Hira said. “Fiorina chose a path of replacing its American workforce with cheaper workers in low-cost countries.”

Hira said:

To add insult to injury, Fiorina chastised her American workforce for not having enough training – absurd. I recall that she gave a speech to her workers about HP’s offshoring strategies where she basically insulted the Americans – telling them to grow up and compete and not whine (in slightly more pc terms). She blamed the lack of skills of American workers even though they were plenty productive and training their foreign replacements… Instead of accepting any culpability, the CEOs blamed everyone else: American workers, the government for not funding enough R&D, the US education system.

Indeed, as InfoWorld reported at the time, Fiorina was vocal in her belief that U.S. workers did not have the talent to fill these jobs, even as she was laying-off American workers who were already filling them. In 2003, InfoWorld wrote:

Make no mistake about it, offshore outsourcing has a bad rap. No one likes the idea of exporting jobs to another country. But, then again, the U.S. government is not doing nearly enough to foster, attract, or retain top IT talent, according to Intel CEO Craig Barrett and HP chief Carly Fiorina…

‘The [low] number of IT graduates in the U.S. is an alarming trend,’ Barrett said.

Fiorina agreed, and took the idea one step further by saying that the number of people — and the caliber of those people — in China and India that graduate with degrees in IT are astounding.

‘We have to tap into that,’ she said…

‘We should be investing in competitiveness, not protectionism,’ Fiorina said. ‘There is never any future in sticking our head in the sand and pretending the competition that exists is not there.’

Berry said that Fiorina’s argument that the American workers lacked the skills to fill these jobs was “clearly not true. You didn’t get hired at Hewlett Packard unless you were in the top 10% of your graduating class. The people at HP were already the cream of the crop. To lay off any of them after they had been with the place for several years was a huge devastation. So at the point that you’re laying off highly skilled people that you had hand picked out of college or their previous job, it’s just not true. When I was applying for jobs back there from 2001-2005, I saw them sponsoring H-1bs. And I thought, ‘Well, how can that be that at the same time that they’re making the claim they can’t find any Americans, my resume and many others—the 3,000 people that had been laid off—can’t even get responses to this.’ HP was sponsoring H-1Bs through the early 2000s while they were laying-off Americans… they were displacing American workers.”

Indeed, the impact HP’s business practices had on HP’s high skilled workers was well documented at the time. As Forbes reported in 2004:

Michael Huston figured his job at Hewlett-Packard in Cupertino, Calif. was safe. For seven years he had worked on software for big servers, complex stuff for which few people had the right skills. He was pulling in $110,000 a year and had survived two big mergers… In 1998 he had his first brush with offshoring when he and a boss spent a month training a few programmers visiting from India, advising them on spooling software used to send documents to printers. His team had completed development but not testing, and that task moved to India that same year (which caused no layoffs). But HP wanted to squeeze 15,000 jobs out of its merger with Compaq, and in November 2002 Huston’s was one. He was 59 and couldn’t afford to retire. His 401(k) was weighted heavily with tech stocks that had taken a plunge. So he vowed to try anything. He took the test to become a substitute school teacher, sought work as a security guard and applied for a sales job at a new Home Depot. Home Depot told him he was overqualified.

Four months after his layoff he spotted a small ad for a job programming in the ancient computer language Cobol for a sporting goods chain. It wasn’t nearly as challenging as his HP job and it pays only $60,000 a year. “Emotionally, that was hard to accept,” he says. But he counts himself luckier than colleagues who are still pounding the pavement. “For this moment in history, [management] has gone in the direction of complete business decisions. Employees be damned,” he says, sighing deeply.

Ravi Trivedi, 29, is one of the workers from India who were summoned to HP headquarters for training and work. Now he is back working full time for HP in Bangalore, in a modern gray-and-white building with a fountain in front… Unlike Michael Huston, Trivedi thinks of his next raise rather than whether he is willing to take a pay cut… With his pay rising and his job prospects ever brighter, Trivedi, like many IT Indians, is on a spending tear…. He owns a motorcycle, is saving for a house and has become a bit of a globetrotter. He has worked for HP in the U.K. and is planning vacations to Malaysia and Thailand. In his time in the U.S. working for HP, he visited Washington, D.C., Philadelphia, Phoenix, Dallas and the Grand Canyon. “I used a lot of frequent-flier miles,” he says with a grin….  More Indians are joining Trivedi’s ranks–and more Americans will be facing Huston’s fate.

Even after leaving Hewlett Packard, Fiorina remained a vocal champion of filling U.S. jobs with foreign labor. As recently as 2012, Fiorina was pushing for expanding the wage-depressing H-1B program. As Politico wrote at the time:

Tech companies are getting tired of the ritual of traipsing to Capitol Hill to ask for visa increases and lobbying for a year at a time to get a small bump in the visa cap. “We’re having to negotiate numbers every single year, even though we need more than we’re going to get,” former HP CEO Carly Fiorina told POLITICO at the RNC last week.

Moreover, during her failed Senate campaign against Sen. Barbara Boxer, Fiorina criticized Sen. Boxer for not bringing in more foreign workers to fill U.S. jobs. The Los Angeles Times reports that Fiorina also criticized Boxer for not addressing “the importance of Latino culture in California”. As the L.A. Times reported in 2010:

[Fiorina] criticized Boxer for seeking to kill a proposed temporary worker program. Boxer stated at the time that businesses were looking for a pool of cheap labor that would threaten the American worker.

‘Really, I thought immigrants were the heart of this great country,’ Fiorina said with a dramatic pause. ‘Our great nation must always be the place where people come to build a better life for themselves and their families.’

Fiorina also highlighted what she views as Boxer’s failure to address high unemployment and water shortages in the Central Valley and the importance of Latino culture in California, noting that a quarter of small businesses in the state are owned by Latinos.

In a 2008 interview with Michigan Business Review, Fiorina similarly pushed for expanding the nation’s wage-depressing H-1B program: “What’s wrong with the H-1B visa system today, among other things, is that we curtail that program so tightly that the limits that Congress allows for H-1B visa entrance are usually filled within one week. So we have to find a more practical system for allowing smart, hard-working people to come into this country and it should be our goal to get them to stay here forever.”

Polling data, however, shows that by a nearly 10-1 margin, American voters believe employers should raise wages for U.S. workers rather than importing more foreign workers to fill American jobs.


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