Comments on: Outsourcing Options? Look East, as in Eastern Europe

By: Bill Roberts

Bill Roberts — Sat, 14 Jul 2007 01:21:31 +0000

Glad to see some give and take on this issue. Thanks for weighing in guys

By: mike buetow

mike buetow — Fri, 13 Jul 2007 17:25:12 +0000

Paul, no reason to put words into my mouth. My comment had to do with companies that were putting/thinking of putting factories into Russia.

I don’t think anyone would consider MNCs like Jabil and Elcoteq, who have plants there, to be “native” to Russia.

I have heard from major suppliers who will not send equipment into factories in Russia because the buyers want to pay in cash (read: launder money) and also require a “rebate” (to pay off the local government).

But, to the point you make, if you want to get into the state to review your suppliers (EMS or otherwise), you have to go through the Russian gov’t for a visa, which means you are easy to track. So the local goon shows up at your hotel and says you need to give him a “stipend” if you want your product to make it out the door.

Let’s forget the off-the-record stuff for a moment, though. Given all the documented reports (kickbacks, laundering, kidnappings, arrests, murder), the way Russia treats businessmen is an outright nightmare.

Don’t take my word for it, though. Check out this Forbes story: http://www.forbes.com/home/business/2005/08/05/russia-putin-corruption-cx_0805oxan-russia.html.

By: Paul Odonletkov

Paul Odonletkov — Wed, 11 Jul 2007 14:07:36 +0000

The thing is: outsourcing and setting up a business don’t have much common.

Mike, why would someone willing to outsource to Russia EVER encounter a “corrupted government official”? Isn’t he supposed to deal with a native entrepreneur partner? “Off-the-record” stuff might indicate an unexpected approach sometimes, IMHO.

By: mike buetow

mike buetow — Fri, 06 Jul 2007 15:12:56 +0000

Aleksey,
What I hear — often — from companies that try to do business in Russia is that corruption reigns. Government officials force large under-the-table payments (red: bribes) and use European and Western companies as a means to launder money. For obvious reasons, companies don’t want to go on the record about these allegations. But I do hear a lot of off-the-record complaints.

By: John Dodge

John Dodge — Sat, 30 Jun 2007 17:25:35 +0000

Amazing to see these countries that were once the playgrounds of incompetent dictators now thriving as engineering hotspots.

How’s it going, Bill?

By: Mick Mc Carthy, CEO, Electronic Product Services Ltd

Mick Mc Carthy, CEO, Electronic Product Services Ltd — Mon, 25 Jun 2007 17:51:10 +0000

Ireland hosted those OEMs and CEMs for 20 years and our economy prospered as a result. The migration to Eastern Europe and China mirrored the US experience. EPS followed them. Our companies in Hungary, Czech Republic, Poland and Romania now have mature relationships with the manufacturing base there.

Charlie Barnhart is right about Hungary. It’s a modern economy with superb truck access for JIT delivery of finished goods to consumers all across Western Europe.

However just consider Romania’s accession to the EU in Jan07. This has already attracted big ticket names to areas close to the border they share with Hungary. See Nokia, Solectron, Celestica, Siemens etc. Free movement of goods across the EU, political stability and a stable well educated workforce together with the cost base Charlie sets out makes it a compelling target for much future development.

By: Aleksey Bocharov

Aleksey Bocharov — Mon, 25 Jun 2007 12:16:29 +0000

Hello.
It’s interesting to ask Mr.Charlie Barnhart why he’d recommend to avoid Russia? Let him ask the biggest equipment vendors how many orders they have landed from Russia nowdays. And the Russian Government is thinking of lowing import taxes for components so all Tier 1 EMS like Hon Hai and Jabil have Russia on their radar. Pls advice him to be careful with forecasts for Russia.
Best regards,
Aleksey Bocharov, CEO, Arsenal Corp.