Although Americans seem to love that old saw about how US jobs are always being outsourced to India, here’s a news nugget that turns things on its head: A deal between aircraft manufacturer The Boeing Company and the Indian government could preserve 23,000 American employees from getting the axe.
The Indian Cabinet on Monday approved the purchase of 10 C-17 military cargo planes for $4.1 billion, the country’s largest defence contract with an American company. (In military deals such as this one, the US government represents Boeing in the transaction, and both countries are expected to sign a letter of offer and acceptance in the next few days.)
The news was met with exuberance in Long Beach, California, where the manufacturing plant is based. The last of the C-17 orders to the Boeing plant were slated to be completed by the end of 2012, which had the jet maker, labour unions, Boeing employees, and US officials worried.
Luckily, the India order “helps us keep the line alive and supports jobs,” a Boeing spokesperson told the Associated Press.
The president of a labour union also told the news organisation that “the plant is abuzz. … This will allow us to make it through to 2013. It’s huge.”
Indeed, the order from India is an economic assist with notable ripple effects. Boeing is the largest employer in Long Beach and according to the company, the manufacturing process has an estimated $5.8 billion annual economic impact, and creates work for tens of thousands of workers in 44 States.
“This comprehensive purchase will support an estimated 23,000 jobs in the United States,” US ambassador to India Timothy Roemer said in statement.
Shift in economic allegiances
India has historically bought military equipment from Russia. The C-17 planes are large enough to transport sizeable combat equipment, humanitarian aid or troops, and they will replace India’s current fleet of Soviet Union-era planes.
The Los Angeles Times reported that India plans to purchase six more C-17s in the future, and US officials hope that the Boeing deal is a signal of growing trade relations between the two countries, which US President Barack Obama set in motion with his November 2010 visit to India.
As one State Department spokesperson put it, with the order of C-17s, “India will have the second largest C-17 fleet in the world, behind that of the United States — a highly visible manifestation of the US-India defence partnership.”
US auto wants in on that, too
The US auto industry, which has faced a slew of setbacks due to rising gas prices and a dismal global economy, is also hoping to get a boost from Indian consumers. On Tuesday, the Ford Motor Company announced a strategy to increase worldwide sales to 8 million cars, with a focus on growing exports to China and India.
The American car company, long known for producing rugged but gas-guzzling SUVs and trucks, will increasingly focus on smaller vehicles that are more appropriate for an international market. In India, the company will grow its offerings from three to eight models, and this week, Ford announced the latest line of Fiesta subcompact cars for India.
source-Firstpost
Stevenson
management trainee-fundamental analyst
DENIP Consultants Pvt Ltd
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