Economics of Outsourcing: MN Goes Global
BANGALORE, INDIA -- Minnesota Gov. Tim Pawlenty's trade trip took a welcome turn today, as the governor learned that Indian firm Essar Global has officially closed on its acquisition of Minnesota Steel Industries and will proceed with plans to build a $1.6 billion taconite-to-steel mill on the Iron Range.
News of the historic deal filtered to the trade mission staffers as they toured the massive campus of the software firm Wipro here, in an area known as Electronic City.
Wipro is "considering increasing the number of jobs in Minnesota and perhaps putting a production development or a training center in Minnesota. So we are going to continue to have dialogue with them about that," Pawlenty said. Wipro currently has 1,600 workers in Minnesota, generating about $100 million in annual revenues from work done in the state.
Wipro does sizeable business with several of the companies represented on the trade mission, including 3M, IBM, and Best Buy, as well as Northwest Airlines and Target Corp, Banerjee told the trade delegates.
Bottom Line: Trade works both ways. Outsourcing from the U.S. TO India provides Indian companies with the dollars and resources to invest IN the U.S., like this deal.
"This will be one of the largest investments in the state. If you look at a $1.6 billion investment in Northern Minnesota, this is certainly one of the largest investments in a very long time," Pawlenty said.
It's very likely that without outsourcing TO India over the last decade, this investment of $1.6 billion in MN would have never happened. Lou Dobbs, listen up.
(HT: JJ Howe)