- Boeing Commercial Airplanes is shifting more of its software
programming work to India and other countries, a trend that worries union
officials who've already seen the company off-loading to its partners large
tasks of manufacturing and aircraft design.
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- Some Boeing employees say programmers are losing their
jobs as the company sends lower categories of software-related work outside.
For instance, Debbie Logsdon, a Boeing systems analyst in Wichita and Midwest
chair for the Society of Professional Engineering Employees in Aerospace
(SPEEA), said 30 programming jobs were recently cut in Wichita -- a figure
the company disputes. At the same time, she said, a $2.7 million project
to integrate software to manage parts for the forthcoming 7E7 aircraft
is being contracted to a company in India, she said.
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- "We have people in Wichita and Puget Sound who are
fully capable of doing that job," she said.
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- The move to cut less-critical software jobs is fairly
new. Late last year executives of Boeing Commercial Airplanes decided to
look closely at its information technology operations, and determine which
pieces could be done elsewhere at lower cost, said Dave Fennell, Boeing
Commercial Airlines vice president of information systems. Fennell said
Boeing Commercial wants to focus its best software people on its "core
competencies" of integrating systems and large-scale design rather
than "more basic programming."
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- "There's no point in intellectual companies like
Boeing trying to do things that are done as a commodity on the market today,"
Fennell said. "One of our key goals, in being a large-scale system
integrator, is being sure we take our IT (information technology) skills
and apply them in areas of highest integration."
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- In Wichita, Boeing spokesman Dick Ziegler said only 15
Wichita programmers have lost their jobs in the last year, contrary to
Logsdon's numbers. He and other Boeing spokespeople were unable to immediately
confirm or deny the $2.7 million contract.
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- Boeing's shedding of lower-rung programmers parallels
the company's plan to shift much of the manufacturing work on its new 7E7
to outside partners. The trends have led some observers to question the
$3.2 billion in tax incentives that kept the 7E7 program here.
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- Boeing is right in step with companies across the United
States, many of which are sending their lower-level software programming
and maintenance to contractors and support companies overseas, especially
in India. BusinessWeek devoted a recent cover story to the issue, citing
a forecast that 18 percent of U.S. companies' basic programming will be
done offshore within six years.
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- Charles Hill, professor of business administration at
the University of Washington, said U.S. companies are taking these steps
to stay competitive. A programmer earning $100,000 a year in the United
States might be replaced with one earning $15,000 in India, he said.
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- "What we're starting to see is that high-level stuff,
software architecture, research, consultants and project managers, are
staying in the U.S. When you get to specific stuff like testing, that's
more routinized, a lot of that is going to Bangalore," he said, referring
to India's leading technology center.
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- "It's not a core competency for Boeing. So if it
makes sense for them to do it (outsource), why wouldn't they?" he
said.
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- Fennell said Boeing Commercial Airplanes is trying to
more precisely calculate what work should be kept and what should be sent
out, after several years of making these decisions "on an opportunistic
basis."
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- "We are being very focused in our dialogue, internally
and with employees, in not wanting to continue doing all of the same tasks
within the company," Fennel said.
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- Fennell said Boeing Commercial Airplanes now employs
about 3,000 information technology workers, about 80 percent of whom have
programming skills. He declined to say how many of its programmers Boeing
has laid off or replaced with workers from India or elsewhere. And he contended
that many of the layoffs had more to do with the decline in commercial
aircraft sales worldwide, than with software outsourcing.
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- Fennell said he believes the layoffs have now slowed,
and we're "reasonably stable for 2004."
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- The issue is painfully immediate to Stephen Gentry, an
Auburn resident who worked as a Boeing software developer and program analyst
for 16 years and expected he'd retire from Boeing, until he was laid off
July 25. Gentry spent his last three months at Boeing training an employee
of Infosys Technologies Ltd., the Bangalore-based software contractor that
took over his job. About six others in his group lost their jobs at the
same time, he said.
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- Gentry, 51, said he had stayed current in his skills
while at Boeing, moving from older languages like Cobol to working in C++
and Unix. Now he's about to run out of unemployment benefits, has not found
another job, and is struggling to support his wife and three children.
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- "All they're worried about is their bottom line,"
he said about Boeing's software moves." They don't care how many jobs
they cut in America."
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- Infosys spokesperson Lisa Kennedy, in Fremont, Calif.,
couldn't say how many of the India-based company's people are working on
Boeing contracts, or how much revenue the company generates from Boeing
work. The company, which trades on Nasdaq, generated $754 million in revenues
in 2003, up 38 percent from 2002.
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- In the Puget Sound area, Boeing programmers like Gentry
are not represented by SPEEA or any other union. This is a holdover from
the days of SPEEA's formation, when software professionals didn't even
exist and the union simply represented engineers, said SPEEA executive
director Charles Bofferding.
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- Their situation is a bit better in Wichita, where information
technology workers are represented as part of SPEEA's newly formed Wichita
Technical and Professional Unit, Bofferding said. Language to address outsourcing,
including software professionals, is now on the table in the current contract
negotiations between SPEEA and Boeing Wichita, Bofferding said.
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- "We don't say all outsourcing is bad, but a whole
lot of it is misguided," Bofferding said, adding that the union believes
it should be included in any discussions about outsourcing. He said SPEEA
representatives have not been included in the planning that Boeing vice
president Fennell described.
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- Marcus Courtney, president of the Washington Alliance
of Technology Workers, a Seattle-based organization representing employees
of software and information technology industries, wonders why state legislators
cut taxes so much to keep Boeing's next aircraft here when the company
is sending jobs overseas.
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- "We're talking about a Legislature giving away billions
of dollars in tax breaks to Boeing, for what they expect will be 1,200
jobs, but at the same time, Boeing could export 10,000 information technology
jobs," he said.
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- - Reach Steve Wilhelm at 206-447-8505 ext. 113 or swilhelm@bizjournals.com
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- © 2004 American City Business Journals Inc.
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- http://seattle.bizjournals.com/seattle/stories/2004/03/01/story1.html
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