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C.R. Celebrates Jobs Transplanted From U.S.

 

Tico Times - Friday, December 4, 2009 – San José, Costa Rica

 

By Adam Williams

In mid-November, Amway Global,

told 93 employees at its operation in Ada,

Michigan, in the United States, that their

jobs soon would be cut and relocated to

Costa Rica. A week later, a Boston Scientific

Corporation (BSC) plant just outside of

Miami, Florida, also in the U.S., announced

plans to shut down the installation and move

1,400 jobs to a new facility in Costa Rica.

While the creation of new jobs may be

good news for the struggling Costa Rican

economy, nearly 1,500 U.S. employees have

been told their once-solid jobs at these companies

will soon disappear.

 

In a message to The Tico Times this

week, former Boston Scientific employee

David Rodríguez said he was laid off from

the Doral plant west of Miami two years ago,

after working there for 10 years.

“I have friends who still work there;

some attend my church,” he said. “From

what I have heard, many – especially those

who are older and have worked there for

over 15 years and were hoping to retire at

BSC – are shocked and worried about their

futures. The reality is that there will be more

than 1,200 people without a job in two years

time and BSC will continue on.”

A reasonable assumption might be that

the decision of Amway Global, a multi-level

marketing and direct sales company, and

BSC, which manufactures medical devices,

to export jobs was due to tighter funding or

diminishing earnings. In fact, both companies

are prospering financially.

According to Amway spokesman Stephen

Duthie, the company reported sales of more

than $8.2 billion last year, a 15 percent leap

from the previous year. Sales at BSC exceeded

$8 billion in 2008.

“We are looking to grow our market in

Latin America, and creating a hub in Costa Rica

will allow us to run it more efficiently,” Duthie

said in an interview with The Tico Times. “This

was not a decision made under duress.”

 

The Job Relocation Trend

 

BSC is not the first “life sciences” company

to leave the Miami area and redistribute

jobs to Latin America this year.

According to The Miami Herald, Johnson

& Johnson health care products

and pharmaceuticals announced in January that it

would eliminate 159 jobs in Florida’s Miami

Lakes operation and transfer them to Ciudad

Juárez, Mexico. In April, BSN Medical, which

makes orthopedic products, announced that

it would close its plant in Miramar, Florida,

and export most of its jobs to Reynosa,

Mexico. The plant laid off 163 workers.

The latest layoffs come at a time when

the unemployment rate in the U.S. is at 10.2

percent, the highest level in over 26 years.

According to the Beacon Council, a public private

organization that focuses on job creation

and economic growth in Miami-Dade County,

the unemployment rate there in October was

11.8 percent, a 5.2 percent increase compared

with the rate in October 2008.

Miami is not the only U.S. area suffering

from high unemployment.

According to the U.S. Bureau of Labor

Statistics, the unemployment rate in the state

of Michigan, the home of Amway Global, has

climbed to a whopping 15.1 percent, the highest

rate of any U.S. state.

Though the 93 jobs snipped at Amway are

relatively few in number, laid-off employees

must try to find work in the worst job market

in many decades.

Yet the trend of slashing the number of

employees and relocating jobs has shown no

sign of slowing as companies continue to

employ cost-cutting measures.

Welcome Work: A Boston Scientific Corp. employee at the company’s second production plant in Costa Rica works on the
assembly of medical devices.

A statement issued by the Beacon Council

after BSC announced its decision to close the

Doral plant reads:

“We are told that in a restructuring effort

to reduce operating costs, Boston Scientific

will relocate to an existing and vacant company

facility in Costa Rica which will result

in lower operating and labor costs for the

company. The Beacon Council is disappointed

with their decision and, although we have

been in communication with the company,

there was little we could do to retain the company

in Miami-Dade. While Boston Scientific

deems this to be a necessary business move

needed to adjust to the current economic

crisis, without a doubt, their decision will be

severely felt in our Miami-Dade community.”

 

Likewise, when the tire company

Firestone announced plans to cut jobs in

Indianapolis, Indiana, in the U.S., and move

them to Turrialba, a small town on Costa

Rica’s Caribbean slope, Costa Rican President

Oscar Arias, who spoke at the inauguration,

cited the same rationale.

“This plant was in Indianapolis in the

U.S., and they brought it here because certainly

the costs of production are lower in

Costa Rica,” Arias said. “But overall it is

important for a canton like this, depressed

in employment numbers.”

 

One Man’s Loss Is Another’s Gain

 

Arias’s comments highlight the benefit

for Costa Rica of the slashed U.S. jobs.

The Boston Scientific jobs lost in Miami

will be filled by Costa Rican workers at the

two plants in the Propark free-trade zone

in Coyol, near Alajuela. When the jobs are

distributed over the next two years, Boston

Scientific will provide work to approximately

4,000 Costa Ricans.

“The moving of jobs here to Costa Rica

is always great news for our economy,” said

Julio Acosta, a senior advisor at Infinitum, an

international business consulting firm based

in Costa Rica. “It boosts the Costa Rican

economy because it provides jobs for local

workers and also generates more business for

other companies here.”

According to Acosta, the cost-cutting

schemes are rooted in lower wages paid to

Ticos, and this translates directly into profits

for the company.

“This has been happening here and in

countries all over the world,” Acosta said.

“Where wages are lower, companies will

employ people there to do the labor at less

cost. … The trend will continue. And one

day, if wages in Costa Rica increase, companies

will outsource to a less expensive

country. Companies will always look for the

cheapest way to maximize profits.”

 
 

Read more about the Caribbean Province here.