A talk with Senator Dodd.

Democratic Senator Christopher Dodd of Connecticut has become enmeshed in the issue of manufacturing and white collar offshore outsourcing, due in no small part to an intense amount of pressure he is receiving from small- and medium-sized companies in his home state. He knew the legislation he introduced to prevent U.S. taxpayers' dollars from being used to outsource jobs was going to be controversial. And that it was. "We're going to provide an opportunity on the floor of the United States Senate for people to vote on these matters," he said at the recent unveiling of the Jobs and Trade Network in Washington, D.C. "We're going to give people a chance to express where they stand on these issues."

Dodd admitted that his bill wasn't perfect--"that it is, in a sense, a scream coming from across the country." More than anything else, it served as a vehicle to let Americans know that there is at least some interest in the issue of outsourcing within the world's greatest deliberative body. "We need to provide a forum someplace that says to the American public that we care about this issue."

Dodd recently spoke with Manufacturing & Technology News editor Richard McCormack. Here is what he had to say:

Q: Realistically, how much effect can you have in stopping the migration of jobs that are done electronically over high-speed networks with such a high profit motive for companies to do it?

Dodd: It is huge. You can't stop it all, but if we can provide incentives for those who want to stay here, maybe that will equalize it. Lou Dobbs [of CNN] is identifying companies every night that seem to do more of this than others. I don't think they want to show up on that list all the time. I don't think this is going to go away any short time soon. We're not going to stop it altogether, and neither are we saying we should stop it altogether. But the trend is so overwhelming in that direction that if we don't make some effort to try to put the brakes on here to slow this down to consider what we're doing I think it would be a huge mistake historically.

Q: How do you stop the outsourcing trend?

Dodd: If you let people decide public policy in this country based on what their quarterly goals are, this place would look massively different today than it does. People have stood up from time to time and said there are such things as antitrust laws, a minimum wage, health conditions and a lot of other things that would not have occurred miraculously.

Once the [small production plants] go, they're gone. I'm talking about high-value, sophisticated manufacturing companies that I'm losing. We had a company that went offshore--outsourced to a European country. One of our allies went to that company and [asked] would you help us produce one of the components for hand grenades? They wouldn't do it because they disagreed with our policy in Iraq. When you start having messages coming back like that, you're giving away this stuff. I worry about it. I think we're going to be indicted historically if we don't begin to try to do something. I'm not going to stop it all, but at least provide some incentives for people to stay or you're going to turn around in very short order and say what the hell happened?

Q: The large defense contractors and the Aerospace Industry Association rallied last year and put a halt to your proposal to restrict the use of foreign "offsets." Are the big companies fighting you tooth and nail on outsourcing and are they winning this debate?

Dodd: We put that proposal in the Defense Production Act and the administration begged [chairman] Dick Shelby [R-Ala., chairman of the Senate Banking Committee] to drop it in conference. He wouldn't do it. I tailored it down and at this point it's only a study to make the case, but the administration was opposed to even studying this thing knowing what the results would be. They begged Shelby to drop it but he wouldn't do it because he talked to his own people in Alabama and they said this is a problem. The fact that we have to pay some countries 100 percent or 200 percent of the value of a contract is wrong.

Q: The small- and medium-sized manufacturers are getting squeezed on this and don't have much voice against the big defense companies that are doing this type of outsourcing.

Dodd: Not yet, but here's the deal: there are a lot more of these guys at home and talking. I represent GE, too, but believe me I've got a lot more of these [small] guys than I do employees of GE.

The language that encourages [offsets] and outsourcing of jobs was written in the late 1940s to help war-torn Europe. It think we might have accepted the notion that in the late 40s and early 50s that Europe was war torn, but don't suggest to me in the year 2004 that we're dealing with a war-torn continent when it comes to allowing the exaggerated use of [defense offsets].

In the country of Holland alone, outsourcing [of U.S. defense weapons parts and components] exceeds 300 percent of the actual contracts. That is the most egregious example, but overall it's about 100 percent of those contracts.

I accept the notion that in order to reap some of the contracts in some of these countries you're going to have to share some of the labor. I get that. I'm not a fool. But the idea that you take 100 percent or 200 percent of the value of that contract in order to do business in some country, that is not my country standing up to protect jobs in the United States of America.