The hidden costs of offshoring

18.04.2006
Back in the early 1980s, I worked for a company that made high-speed assembly machines. I don't mean that the machines used "assembly language"; they were designed to assemble things, like desks, sinks, and garbage cans. They were governed by PLCs (programmable logic controllers), small computers designed to run machines in an industrial environment. They could even accept real-world input from devices such as push-buttons, limit switches, and sensors. My job was to program and troubleshoot the PLCs.

Aside from electronic controllers, these assembly machines were mostly mechanical: lots of gears, levers, and manual adjustments. In fact, you could change the speed of the machine to increase or decrease production simply by adjusting a pulley. After we tested a machine to make sure it performed properly, the machine would be crated and shipped to the customer. Most times, the customer would send its maintenance people to our facility for training on the machine before it shipped. But not always.

One job I did was for a manufacturing facility just outside Mexico City during the peak of the maquiladoras -- U.S. companies that set up shop in Mexico to take advantage of cheaper labor. On this occasion, I guess the plant management decided to save even more money by skipping the training.

The machine had been on the production line for about a week when we got a panicked call from the company's U.S. office. Its new high-speed machine was down! Suddenly neither expense nor personal inconvenience was to be spared; they wanted me, the programmer, down in Mexico ASAP.

I called the assembly line manager in Mexico, but because I didn't speak Spanish, and the manager's English was limited, it was hard to get a clear idea of the nature of the problem. Early the next morning I was on a plane to Mexico, with a spare PLC in my carry-on.

When I got to the plant I noticed that something we had not shipped was connected to the machine. A variable transformer (often called a Variac) was wired into the incoming power to the PLC. I pointed at the thing and pantomimed curiosity. The maintenance person then explained everything -- in Spanish. I didn't have the slightest idea what he was saying, so we found someone with minimal bilingual skills.