Michigan Leader Talks about Taking on Offshoring

Michigan, a state hard-hit by the exportation of automobile manufacturing jobs and IT positions, is taking steps to recognize companies that get the work done inside the state of Michigan, or at least inside the United States. A new executive directive handed down by Governor Jennifer Granholm will mandate that companies vying for state contracts disclose where they are headquartered and where the work for that specific contract will be done.

Sean Carlson, director of acquisition services for the state of Michigan, says the move, which goes into effect on April 30, will allow state leaders, as well as residents, to know if their tax dollars are going to support Michigan workers or if they're being shipped overseas. Carlson, who will be making the final buying decisions based on the new directive, says it supplements a preference law that has been on the books there for more than 10 years. That law states that if more than one company is vying for a state contract, and all factors being equal, the preference goes to the company from Michigan.

The problem, says Carlson, is that the law wasn't being enforced. Granholm came on board and first put a stop to that, and then went one step further with the new initiative.

In an interview with Datamation, Carlson talks candidly about how the state has been affected by offshoring, and how they're trying to do something about it.

Q: How is this new directive different than the laws that Michigan already had on the books?
The big difference, and the big plus, is the component of vendor disclosure. One of the top requests we get in this office is people calling to ask where the contracts are going. How many went out of the state and how many went out of the country? It's frustrating to me not to know that. It's data that hasn't been collected. The information hasn't been asked for. We're now asking people where they're incorporated, and what is their zip code. Taxpayers have the right to know how much of their tax dollars go to support Michigan and how much goes outside the state.

Q: Why was this important for the state to do?
There's high unemployment in the state of Michigan so it's a big, big concern here. I'm sure a lot of that unemployment has to do with the manufacturing of vehicles and cars, but there's a lot of IT work that goes on for those auto industry suppliers that are located here in Michigan. It's a concern of course... Jobs in general is a big issue. The governor, in her State of the State Address, said her focus is jobs, jobs, jobs. That is the vision for our state right now. This is her focus. I'm not surprised to see an executive directive that is focused on valuing jobs.

Q: Are you more concerned about overseas offshoring or out-of-state outsourcing?
I think we want to make sure that we're working with U.S. companies as best as possible. I think there is a little bit of difference between ofshoring and out-of-state outsourcing. We're looking to promote full and open competition. If you cut off vendors from other states, you're driving up the costs of your contracts. That's not what this is about. We want to encourage companies to be involved.