Gee, look who's 'outsaucing' | Times of India

[patriotvoice]

John Kerry's financial fortunes may be linked to a ketchup empire, but in his political notebook, what's sauce for the goose isn't sauce for the gander. The Democratic Presidential nominee, who has been railing against outsourcing, is walking on a sticky wicket on the issue. There are outsourcing footprints all over Kerry's pristine all-American turf.

H J Heinz & Co, the family business of Kerry and his wife Teresa, has spread its ketchup operations across the world. Of the 79 factories that the food processor owns, 57 are overseas. Heinz makes ketchup, pizza crust, baby cereal and other edibles in such countries as Poland, Venezuela, Botswana, Thailand, and most of all, China and India.

http://timesofindia.indiatimes.com/cms.dll/html/uncomp/articleshow/572142.cms

PS: I am pro-creation of new American jobs thorugh innovation, not for pining over lost-jobs.

On Edit: Please don't shoot the messenger. I post this because it's an "interesting" perspective, but one that is vacuous and easily debunked. Republicans will be using every tactic they can, and this will likely be one of them; they will claim Kerry's hypocrisy, even though (a) Kerry doesn't have direct operation and, (b) local food production isn't outsourcing.

Regarding my postscript, I think Kerry should focus on how he will create jobs here, not how he will legislate keeping jobs here.

[4MoreYearsOfHell]

1. People in those countries

need to eat too, you know...

[Nlighten1]

2. Hoo boy...

This puts him in an awkward position of stopping outsourcing doesn't it?

[oxymoron]

7. Hardly.

Neither John or Theresa control the Heinz company.

[Media_Lies_Daily]

19. Bingo.

[alittlelark]

3. Uhhh, yeah

It would be outrageously expensive to produce those foods here and ship them overseas. Coca cola does not produce here and ship overseas. There are perishable consumables - of significant weight versus value.

India knows that outsourcing will be an issue in this campaign (didn't Powell just assure the PM that it would continue). This is a silly reddish pink herring.

[patriotvoice]

10. Hmm...

... agreed. Look for this to be raised as "Democrat hypocrisy."

[Media_Lies_Daily]

20. With what are you agreeing?? The food is being manufactured...

...in foreign countries for consumption in those countries. Where's the hypocrisy?

[markses]

22. The hypocrisy resides in the

little minds of imbeciles.

Small children understand the difference between the Heinz production model and outsourcing. Only a complete idiot would fail to notice the difference.

[alittlelark]

26. But small minds ie: hard core * supporters do not

they will jump all over it like fleas on a mongrel (apologies to fleas). This reeks of desperation propaganda aimed at those who are either small minded or easily confused. Or both.

27. Why would they be producing ketchup to be consumed in India

This assertion of yours has nothing to back it up. The vast majority of those goods are not as fragile or "perishable" as you think and with the savings on labor and less regulation it is probably quite lucrative to ship it all back to the U.S. where they can charge two days worth of Indian wages for a bottle of Ketchup.

[alittlelark]

But they don't.....

Look up how commodities are produced and distributed. It makes NO sense (and you're talkin' to a socialist) to produce high volume, low cost, heavy items in 1 country and ship them to another for sale. It is illogical.

If you wish to discuss the fact that the countries in question should be able to do it themselves....well I'm all over that one.

37. Look at post 36

There is nothing stopping either import or export of vast amounts of food in this country.

[patriotvoice]

30. I hate to be stereotypical...

but it is PERCEIVED hypocrisy, because Republicans are by-and-large spoon fed believers of whatever GOP minstrels spout.

36. Proof that you're wrong

A government source with the numbers and names of countries sending food to the US. The numbers are the amount of customs received from taxes on the food, which of course means that the real money value of the food is much, much more.

http://www.ita.doc.gov/td/ocg/imptab.htm


There is a massive exchange of food in the world and the US consumes more than anyone else including europe.


Here is the same for the amount of goods sent away from the US

http://www.ita.doc.gov/td/ocg/imptab.htm

[FlaGranny]

40. And the significance is what?

That we should vote for the bush* because?

43. Obviously

you figured me out I'm all about voting for Bush (sarcasm). The significance is that the political-economy of food as it is grown and transported from country to country includes massive amounts of exploitation in the form of child labor, ridiculous hours, low wages, and that the canning and bottling and processing of food is just a much a part of it and therefore Heinz is partaking in the same economic process as any company moving jobs to the third world. That's is my point. What ever Kerry's involvement it is irrelevant to me. I was just pissed that people are going around saying things that aren't true based on assumptions and reinforcing B.S. globalization myths.

[Rex]

4. Outsourcing or an true international business?

How much product comes into the U.S. from those 57 factories?

[bobbyboucher]

5. Your point?

Who controls Heinz now? Is making food for local markets, locally, a bad idea? I would say no.

[KC21304]

6. Old, debunked, ho- hum.

Take it up with Henry Heinz who started selling his horseradish in London in 1886. LOL

[displacedtexan]

8. The Heinz family hasn't owned the ketchup biz for years.

Besides, this is an international biz like Coca-Cola. This is not outsourcing. This is an international business. There is a difference.

[KC21304]

9. Actually about 250 are over seas, but 57 is a nice catchy number

don't you think ?

[alcuno]

11. Bottling ketchup in Italy isn't outsourcing. It's being made for Italians

Ou ketchup is made in the US. That's the way the food industry works. Sheesh. You people really need to get out of this country more.

[SoCalDem]

12. Heinze makes foods all over the world for local consumption

There are Heinz products in countries all over, and we would not recornize a lot of them..

Heinz soups never made it big here, but they are very popular abroad..

[Democat]

13. They are selling the product all over the world, that's not outsourcing!

If they are selling a product in Mexico and making it in Mexico, how is that outsourcing?

In fact, wouldn't it be technically be outsourcing if they sold it in Mexico and made it in America?

[markses]

14. AAAAAACHOOOOstupid

That's just silly.

1. Kerry has no say over the location of Heinz plants. Neither does his wife.
2. Local production of a locally consumed product is NOT outsourcing. Is the ketchup you buy in California made in India?

Anyone who considers this hypocrisy is a screaming dumbass. It is not even close. These people are desperate babies.

[tlcandie]

15. Please research ALL instead of just taking PART of something .. thanks

http://www.instapundit.com/archives/014097.php

<snip>
First, I agree with the main contention of Glassman's article--that free trade is generally positive. However, I think that the above comment is misleading and inaccurate (I have done some research on this issue). The Heinz company is hardly the "Kerry family business." Kerry's current (and 2nd) wife is the heir of Penn. senator John Heinz. That is, she only inherited part of Heinz interest in the Heinz family trust, which, while it does have some holdings in Heinz, is not related or a subsidiary or partner of Heinz Co. Kerry's wife is not on the board of Heinz nor does she currently hold any position with the company. Therefore, while Kerry's wife has what could be perhaps considered an indirect relationship with Heinz, she has no control or influence over their business decisions--presumably Kerry, as the second husband, has even less.

Further, to Heinz's credit, they are widely considered to be an"employee friendly" employer and have instituted a sort of code of good conduct to apply to all their employees, including foreign ones. They do have foreign plants but they are not "outsourced" plants--companies in the food biz have to localize their production to some extent, especially where some fruits and vegetables are concerned.
<snip>

[nolabels]

16. WOW, I didn't know they PACKAGED all that stuff

I guess helping the Cook is good money

http://finance.yahoo.com/q/co?s=HNZ
(snip)
Net Income (ttm): 683.13M

DIRECT COMPETITOR COMPARISON
HNZ CPB CAG NSRGY.PK Industry
Market Cap: 13.18B 11.09B 14.08B 0 696.04M
Employ­ees: 38,900 25,000 63,000 6.10K
Rev. Growth (ttm): -12.70% 8.90% -28.20% 0.10%
Revenue (ttm): 8.28B 7.06B 0 1.19B
Gross Margin (ttm): 36.42% 41.99% 25.87%
EBITDA (ttm): 1.51B 1.39B 80.41M
Oper. Margins (ttm): 15.45% 16.04% 7.02%
Net Income (ttm): 683.13M 649.00M 0 28.40M
EPS (ttm): 1.928 1.576 0 1.00
PE (ttm): 19.41 17.13 0 0 20.26
PEG (ttm): 1.91 2.37 2.16 1.86
PS (ttm): 1.60 1.58 0.76
(snip)

[TankLV]

25. Unlike Niel Bush, who was a director in the failed bank, and DIRECTLY

caused US taxpayers BILLIONS, and got off scott free.

But we won't be hearing of THAT now will we?

[Gman]

17. Looks to me like you completely miss the point

it makes no sense to produce products like ketchup and ship them back into the US for consumption. Transportation costs would vastly outweigh the savings in wages. For the same reasons, it makes no sense to produce ketchup here and export it to Asia.

The problem with outsourcing occurs when increased transportation costs are more than offset by the lower wages. There is nothing wrong with producing a product overseas for consumption overseas. Doing so does not cost America jobs because those are jobs we never had to begin with.

34. Why are people insisting that these products are for local markets?

It does make sense. People in the third world are usually paid anywhere from .78 cents to 2 dollars a day to work in bottling and manufacturing goods including food. That's around the price of a single bottle of ketchup. How many bottles do you think are prepared for market by a single person in a day that can last up to 17hrs of work? I would guess hundreds. How much does it cost to pay for shipping? It doesn't cost anything if you're making that much profit. Let alone the fact that very few places in the world actually consume Ketchup, pizza crusts, or any number of other manufactured foods. In russia people have no idea what you're talking about if you ask for Ketchup. Someone made the point that Italy needs ketchup. When I was there I saw none and even if they do is the ketchup being produced in Italy?

I think it wouldn't be too difficult for someone to prove that Heinz produces these foods for local markets instead of US or European markets. Yet I see nothing, but insinuations based upon bad assumptions.

If it makes no sense to import foods to the US then why would it make sense to export rice to Haiti, as the US does. Or beef to Japan? Or import bananas and coffee from latin america?

These are raw products and when you're talking about Heinz you're talking about processed food which is most popular in the US and has a higher profit margin.

[chookie]

35. Please be specific

If you are addressing the Heinz issue, then I recommend that you do some research on the corporation and its products worldwide. www.heinz.com

I am afraid that your personal experiences abroad do not measure very strongly as evidence for your assertions.

41. Heinz

look at post 36. I don't need to know anything about Heinz to know that the assertion that it is not economically viable to ship food is preposterous. If you're going to claim that Heinz only manufactures goods that it then disperses in local markets in the face of data which shows that not only is that not necessarily true it is unlikely, then perhaps you should prove that these food products are manufactured for local markets.

Here's something from the USDA: "Heinz’s Nine Lives cat food and Skippy dog food are imported brands that have started to appear with
greater frequency in the market. Unlike with Effem, nearly all of the Heinz pet food products originate
from the United States. Pricewise, their products are usually a little higher than domestically produced
food. Although Heinz does have a few factories in China producing consumer products, it is presently
unknown whether the company plans to establish a pet food factory in China too."

http://www.fas.usda.gov/GainFiles/200207/145684095.pdf

more proof of import/export of food, this time peaches between new zealand and greece: http://www.med.govt.nz/buslt/trade_rem/peaches-rev-gr/initiation.html

canned tuna from the andes to the US: http://www.house.gov/apps/list/speech/as00_faleomavaega/andeantradefeb0702.htm

"Though Gerber has made progress, American baby food producers have made some missteps along the way. Beech-Nut Nutrition Corp. and H.J. Heinz Co. tried to export a largely American menu to Japan earlier this decade, but the effort failed and the two withdrew from the market." http://www.s-t.com/daily/02-98/02-23-98/c02li084.htm

"Canned Tuna.
When the company was set up in 1987, it had a capacity of 50 metric tons per day or around 15,000 metric tons per year. Upon its acquisition by Heinz in 1995, the production capacity of the plant has constantly grown to reach 250 metric tons per day in 1998 and is expected to reach 350 metric tons per day by the beginning of the next century. Exports of canned tuna in terms of volume and value have also grown steadily over the last four years. The volume of canned tuna exported has grown by a little less than 250% from 6, 192 metric tons in 1995 to 21, 560 metric tons in 1998, whilst the value of exports has increased by a little more than 325% from only US $ 18.4 million to US 78.6 million during the same period. The table below gives the evolution of capacity, production and export of canned tuna from 1995 to 1998." http://www.intracen.org/sstp/Survey/fish/fishsey.html

CERTAIN PREPARED BABY FOODS ORIGINATING IN OR EXPORTED FROM THE UNITED STATES OF AMERICA
Expiry Review No. RR-2002-002 http://www.citt.gc.ca/dumping/reviews/orders/rr2c002_e.asp

[Gman]

39. Well...

>>>"If it makes no sense to import foods to the US then why would it make sense to export rice to Haiti, as the US does. Or beef to Japan? Or import bananas and coffee from latin america?"

Well, Haiti doesn't produce enough rice on its own so it needs more; Japan isn't exactly full of wide open spaces and cattle ranches like Texas. Bananas and coffee will not grow in the US and have to be imported.

But the biggest point you're missing is that Kerry and Teresa have absolutley no business relationship with Heinz. There is no good discussion that can be had about Kerry and exporting Heinz jobs because he has nothing to do with Heinz. The only other discussion that can then be had would be about Heinz itself, but why bother?

42. thats not my point

I could care less what Kerry's relation to the whole thing is, but it is absolutely incorrect to assume that food commodities are not imported and exported and that a large part of this market probably includes exploitation and it of course affects economics in the US including jobs.



"They are children such as Angel Oliveras, 4, who stumbled between chili pepper plants as tall as his chin in New Mexico's fall harvest. Children such as Vielesee Cassell, 13, who spent the summer folding and bagging dresses in a Texas sweatshop. Children such as Bruce Lawrence, at 8 already a three-year veteran of Florida's bean fields.

The AP was able to follow the work products of 50 children to more than two dozen companies including Campbell Soup Co., Chi-Chi's Mexican restaurants, ConAgra, Costco, H.J. Heinz, Newman's Own, J.C. Penney, Pillsbury, Sears and Wal-Mart."

Associated Press: http://pangaea.org/street_children/nameri/AP1.htm

[Nameless]

18. Come on now...

First, neither John Kerry nor Theresa Heinz Kerry are in charge of Heinz corporation's practices.

Secondly, Heinz didn't outsource those jobs, but it has expanded to other countries. Rather than moving out to make products to ship back here, Heinz has expanded production in regions in which it is selling.

You're right, it is easily debunked and what Kerry has to do is specifically spell out how he will help create jobs here, which I think he is doing. Kerry's campaign will have to articulate Kerry's policy ideas while debunking facetious personal attacks. If they can do that, November just might be a cakewalk.

[fedsron2us]

21. Economics of the food industry

mean that its nearly always cheaper to manufacture and distribute food products locally. This rule applies even when there are huge differences in wage costs between countries. For example, here in the UK Indian restaurants are very common. Nearly all sell one of the two main brands of Indian lager, Kingfisher or Cobra. However, diners who care to examine the bottles in which the drinks are served will see that their beers are in fact brewed in Britain. The reason is quite simple. Workers pay accounts for a tiny proportion of the price of the product. Most of the cost is taken up by raw materials, transportation and, of course, the duty on the alcohol. In fact the cost of shipping beer from India to the UK far outways the savings that can be made by employing Indian rather than British workers. The same rules apply to most of the Indian food sold in the UK. The Meena Pataks famous curry sauces that fill the shelves of British supermarkets are all produced in Lancashire in the North West of England not India

[Jane Eyre]

23. This was the right-wing talking point on C-SPAN this morning

Several right-wing callers on Washington Journal this morning called in about the 57 overseas plants. The host finally asked one of the callers if they listened to talk radio!

I was thinking the same thing when I heard the callers, that it makes sense to produce food products in the same country where the food is grown and the products sold. I'm surprised that no one called them on it this morning.

[0007]

24. H J Heinz & Co is not the family business of Kerry or his

wife.

This sounds like freeper information disseminated to gain acceptance. LOL!!

Nice try!

[chookie]

28. HA HA HA HA HA!!!!

)2?a laugh riot.

Yes, Heinz has factories all around the world, and has for a long time. You can get a sense of the products produced internationally at this link:
http://www.heinz.com/jsp/di/corp_pro2003/corpProfile9.jsp

Heinz manufactures special curry sauces and hot relishes and pickles in India -- that are sold in India. Heinz ketchup is not made in India for the US market, as this article seems to be implying.

I am shocked that the reliable Times of India has printed such a piece of silliness.

[Jeff in Cincinnati]

29. Most Global Companies...

...have manufacturing facilities that create product for the country where they're doing business -- and that's particularly true of food products.

[patriotvoice]

31. I was also shocked that the Times of India printed it...

... which is part of the reason I posted it (and have taken more than my fair share of abuse - I'm not a freeper, I'm not a ghost, I'm not a plant, etc, stop shooting me).

[chookie]

32. Not up to their usual standards

It's a weird article, not up to their usual high standards.

However, we cannot be surprised that the most prominent newspaper in India would come out on the pro- position on US out-sourcing. People there may be nervous about Kerry's public position on this issue, and would be seeking reassurance, which the financial analysts appear to be providing to the writer of this article, by citing "hypocrisy" in Kerry's position.

Kerry has no ties to the Heinz company or its fortune. Teresa Heinz Kerry's fortune and interests are independent of her husbands -- the writer seems to have little understanding of marriage laws in America, especially when they deal with the extremely wealthy. He is quaintly naive in his belief that John Kerry has acquired it through his marriage to her, which is simply not true.

Oh well -- it's been a bad week for India, what with the US granting "special elite military status" to India's favorite neighbor, Pakistan, which will allow Musharraf to acquire fancy new weapons he has previously been barred from having -- so if they want to lighten up with a little joking like this, I guess I should not be too harsh.

Ha ha -- what if Pakistan attacks India with its shiny new weapons, striking at American corporations there? I wonder if Mr Al-Zawahiri has thought of this one already.

[no_arbusto]

33. First of all, Heinz is still based in Pittsburgh

At least it was when I lived there 2 years ago. Maybe things have changed, although I doubt the folks at Heinz Hall, the Senator John Heinz Pittsburgh Regional History Center, the Heinz Foundation, or Heinz Field would approve.

Second, Heinz makes different products for different regions all over the world. Many of them don't even make it to the US. An example of this is the gluten free beer Bi-Aglut that Heinz produces in Italy. For health reasons I would love to have this beer but, unfortunately, it is unavailable in the US (even in Pittsburgh). If Heinz was "offshoring" they would have gone to Italy to make the product on the cheap and then shipped it back to the US, no? That's what these regional factories are for right?

Third, what about companies like Coca-Cola? We had a Coca-Cola bottling plant in my hometown south of Pittsburgh. Coke is based in Atlanta right? Couldn't that be considered "outsourcing"? After all they're based in Atlanta but they have factories elsewhere. In fact, whenever I land in Costa Rica, I drive past the "Coca-Cola" bus terminal (close to the Intel plant) on the way to my hotel. It's still called the "Coca-Cola" even though the plant has been closed for years. This is nothing new.

My point is that sometimes building factories overseas makes sense both logistically and economically. Having an international presence does not necessarily mean that a company is "outsourcing". There is a HUGE difference between a company having a local bottling plant for local consumption with production done by local workers, and a company sending a large portion of its work to another country for cheap labor and then shipping the "profits" back home at a reduced cost. If you really wanted me to, I could get into the benefits of shipping via local truck drivers versus the air, boat, barge, train, truck route but that would probably bore you.

[MikeG]

38. Almost every day when I look across the Allegheny River in Pittsburgh

I see the Heinz plant. Trust me, its still in America.

[pfitz59]

44. Right wing B S......

Rove spin machine in action!

[jmowreader]

45. Another reason to make product in the country it will be consumed in

Germans, Brits, Americans and Turks all eat ketchup. German, British, American and Turkish ketchup all tastes different.

If a case of British ketchup wound up in a Turkish market (or vice versa), which you know would happen if Turkish ketchup and British ketchup were made in the same plant, the uproar would make New Coke look like a minor blip. Hence the need to keep the two kinds of ketchup separate.

The easiest way? Make Turkish ketchup in Turkey and British ketchup in Great Britain.

[keithyboy]

46. Outsourcing is eliminating current US jobs and sending them overseas.

Outsourcing is not owning businesses operations in different places around the world. You can't "loose" jobs that were never here in the first place. We are talking about jobs that were here in the US and that are now being moved elsewhere.

[Beacho]

47. I'm not surprised the Times Of India printed

..the story. India, in general feels that their new found outsourcing wealth is threatened by public outrage here in the U.S. and many there feel that 'threatening' perceived american imports will tamp it down. I've scoped out some posting boards there, including one run by The Times. Back before Kerry was the nominee apparent, the remarks were directed at the Coca Cola plants.

After Powell kissed their ass by declaring that the Bushites will do nothing to stop outsourcing, it's clear who they prefer, hence the 'surprise' about a corporation tangetitally connected to a candidate that listens to U.S workers.