In the technical centers of the U.S. auto industry - the quiet, studious places where intellectual property is created and applied - engineers and IT workers are seething.
For example, there's the Detroit-based engineer who programs robots for the Big 3 who sometimes stays up late to consult by phone with colleagues in India. When he does, he can hear rickshaws and chickens outside the office in Bangalore, he says.
That's because the software technicians on the other end of the line toil in steamy offices without air conditioning, so they must keep the windows open and live with the racket outside.
The engineer, who works for a major auto software vendor, says too much work is being subcontracted to low-paid engineers and programmers in places such as Bangalore - work he says can and should be done in America.
Last year, three of his friends at General Motors lost their programming jobs when the work was moved to low-cost countries, he says.
"Their entire department was wiped out," the engineer says. "The governor (Michigan's Jennifer Granholm) talks about bringing manufacturing jobs here. Meanwhile, engineering jobs are flying out the door. You can tax manufactured goods coming into the country, but you can't tax intellectual work done overseas that comes back in over the Web."
The bulk of IT and technical jobs going overseas so far are low-end back-room functions with small, clearly defined tasks, consultants say. But the list of process, programming and engineering jobs being exported is growing.
"There's no doubt that the United States is losing jobs to offshoring," says John Steadman, 2004 president of the Institute of Electrical and Electronic Engineers, a nonprofit technical professional association.
Resentment is building among U.S. engineers and technicians. When 75 Visteon Corp. engineers in Sterling Heights, Mich., voted in December to be represented by the UAW, one of their biggest complaints was outsourcing.
"Its one of the major topics around here," says a senior development engineer at GM. "We get better pricing by outsourcing, and we're doing lots more of it - Mexico, China, India. It's amazing.
"But while we get some cost reduction, what's not realized is that they are outsourcing jobs to people who are not buying our cars."
Gary Schleicher, a former Ford Motor Co. and Visteon product design engineer, got an early-retirement package from the supplier in 2002 at age 50 - at least five years before he was ready to leave.
The third-generation auto engineer says offshoring has made it hard to find another auto engineering job.
"My ability to go back is greatly curtailed by the fact that a lot of work is being let out," he says. "They don't exactly come up to you and say, 'Your job just went to Vietnam.' They're a lot more subtle about it."
A report by Gartner Inc., an IT research company in San Jose, Calif., says outsourcing of software engineering to low-cost countries such as India and China is about to soar. Although fewer than 5 percent of IT jobs in the United States and other developed countries are being sent offshore now, the figure will rise to 30 percent by 2015, according to a recent Gartner study.
Forrester Research Inc. in Cambridge, Mass., projects that as many as 3.3 million white-collar jobs will be sent out of the United States by 2015. Many of those affected will be engineers, computer scientists and other IT professionals.
It is hard to know how many technical and engineering jobs are being lost to outsourcing, says Patrick Anderson, principal at Anderson Economic Group, a Lansing Mich., consulting firm that studies the labor market.
"It's a very new trend, so it's not clear how far offshoring is going," Anderson says. "We can't get a true picture of white-collar (automotive) unemployment. We don't know where to get really good data."
Companies don't like to talk about it, he says.
Steadman says: "The most intense advocates for offshoring could not deny there's significant engineering job loss in that process. The fact that U.S. engineering jobs, automotive and otherwise, are declining is indisputable."
According to Roland Berger Strategy Consultants, an experienced software programmer in India earns about $6 per hour. That compares with up to $60 per hour for a U.S. programmer, not including benefits.
Harris Miller, president of the Information Technology Association of America, an Arlington, Va., trade association, says some clients are seeking a blend of talent from their IT contractors - a mix of programmers who are paid $120,000 with others who make only $20,000. If a company does not have programmers in places such as Hungary, India or the Philippines, Miller says they may not win contracts.
"Eventually some of our intellectual property and tech skills will be in China and India," says Paul Haelterman, director of market assessment at CSM Worldwide in Farmington Hills, Mich. "They know they can get a Ph.D. for $25,000 a year from India, so they go there."
Haelterman says a U.S. automotive engineer with five to 10 years experience earns about $100,000 a year, including health care and other benefits. The same level of qualification in China or India would be worth about $25,000 a year.
Several carmakers and Tier 1 suppliers have set up their own engineering centers in India. In 2000, Delphi Corp. established a technical center in Bangalore to develop software for worldwide vehicle applications. About 300 people are employed there.
New facilities such as Delphi's are clean, bright and modern - nothing like the sweatshops in India and China described by some outsourcing critics.
Boom in Bangalore
Why is Bangalore emerging as an IT mecca?
"The education system is good and English-based," says Douglas Brandt, Delphi China's head of engineering for electronics and safety.
Indian technicians have unique skill sets, Brandt says.
"Software verification is a tedious job, but Indians are good at it," he says. "There is a tremendous amount of software talent.
"They are very deep in analysis activity - for example taking an electronic design and doing modeling to say what happens if we, say, vibrate a component."
He cites an example of how the Bangalore connection paid off when Delphi recently had a problem with a radio it was designing for a U.S. customer.
"One of the big issues is how to mount it in a vehicle," Brandt says. "The customer designed a bracket, but there was a problem with our part and bracket integration. We took their bracket design, looked at it with our radio, and made recommendations. That night we shipped those changes to India and asked them to simulate it. The next morning we were able to present them to the customer."
"Electronics City" on Bangalore's southern outskirts is known as India's Silicon Valley. It is the heart of the nation's $17 billion outsourcing industry and home to software giants such as Infosys Technologies Ltd. and Wipro Technologies. By some estimates the 150,000 IT engineers working in Electronics City outnumber the 120,000 who work in the real Silicon Valley.
In 1947, Prime Minister Jawaharlal Nehru anointed Bangalore as the hub of India's aerospace and defense research. The defining moment came in 1992, when a satellite earth station established by the government connected Bangalore with the rest of the world, touching off the software outsourcing boom.
The population of balmy Bangalore in southern India has increased five-fold in the past decade to more than 6 million. Many of its inhabitants live in abject poverty, but 40,000 of them are said to have doctorates.
Not a panacea
Some U.S. engineers say there are limits to what offshore technicians can do.
"It's all simulation work that they do," says one American programmer. "They can do equations, but if you have a problem, they are only working from a road map."
Yet carmakers and suppliers are upping the ante. Haelterman says OEMs and Tier 1 suppliers are moving major chunks of design, development and prototype work offshore.
The jobs being outsourced range from software programmers and code writers to emissions testing, brake and electronics engineers.
"The exodus of jobs for people like design engineers - we're certain to see it," says Lindsay Brooke, senior analyst with CSM Worldwide.
One recently furloughed Tier 1 patent engineer complained that "in 20 years, we will not only have lost our plants and equipment to make products, but we will have lost our ability to design new products. In some cases our engineers were training their Asian replacements."
The patent engineer says he trained his Chinese counterparts, who then returned to China to support manufacturing there.
"They learn the ropes and take the knowledge back with them," he says. "The company makes money, but America loses business and the ability to do future business."
A supplier engineering supervisor, who did not want his name used, says engineers afraid of losing their jobs are reluctant to support India and Chinese co-workers - either those working in the United States or overseas colleagues.
Jeffrey Owens, president of Delphi Electronics and Safety, a unit of Delphi, says "domain" engineering - designing the software that controls the functionality of cars - won't leave these shores for 10 years or so. But it will happen, he says. It is part of the inevitable transformation of technical expertise to less-costly commodity status.
Steadman of the Institute of Electrical and Electronic Engineers says offshoring to emerging countries is risky.
"You're providing a way for that company to compete against you," he says. "When you tell (offshore companies) your expectations, they're so much better equipped to produce something that competes with you; even the kinds of customer expectations you have are in the hands of someone else."
GM spokesman Tom Wilkinson says offshore outsourcing does not threaten the jobs of U.S. engineers.
"We're seeing tremendous growth of engineering capabilities in China and India," Wilkinson says. "But growth in engineering and technical professions in those countries will largely be driven by growth of those markets. I think as long as the U.S. market is unique, we don't see a big impact on engineering" jobs.
Offshore outsourcing of engineering is not on the radar screen at the Chrysler group, says spokesman Mike Aberlich.
"It's not like we're moving engineering from here to there," Aberlich says. "Ninety percent of our (Chrysler group) business is in the United States."
A Ford Motor Co. spokeswoman declined to comment on the outsourcing of engineering and its impact.
Impact on quality?
Some U.S. engineers suggest the industry's recent wave of quality problems is linked to glitches from outsourced software. While there is no hard evidence of that, software has become the industry's bugaboo.
A senior executive at a Tier 1 interiors supplier said: "In the last decade or so, the auto mentality was, 'It's so cheap, let's offshore once and for all.' But that thinking is coming back to haunt some automakers and suppliers.
"Software and programming is the No. 1 issue. There are universal problems when it comes to writing code changes, not just in emerging regions. But it's more critical in those places because even trained, educated workers don't understand cars like an American or Western engineer or programmer does."
Even when engineers in emerging countries are technically proficient, he says, they often don't understand the auto industry: "In some emerging countries you have people who don't even drive cars or own one."
In 2002, Fiat did extensive damage control after problems arose with an Indian software company that did work on its navigation system. A former executive at the Italian carmaker says the software program was written so that the car didn't recognize certain codes or instructions for its telematics operations.
"Customers received confusing messages, so they didn't know where they were," he says.
Quality is one reason Siemens VDO Automotive Corp. in Auburn Hills, Mich., is keeping key engineering operations in the United States.
"To think that the benefits of our history and experience can be replaced by low cost labor regions may be presumptuous and potentially miscalculated," says Dave Royce, manager of corporate strategy. "The whole package requires thoughtful assessment, which includes what the American worker can offer, such as more knowledge, know-how and process techniques than simply the cost of hands on the products."
GM's Wilkinson says quality is always a concern, everywhere.
"Any time you change anything in the process, there's a risk in quality," he says. "Any time you change sourcing, design or production processes, you have to be cognizant and stay on top of it. Development engineers get paid to figure that out."
Quality concerns aside, U.S. engineers and programmers have a more pressing concern: their livelihoods.
"I used to think my job was safe because I'm an engineer," said the recently laid-off Tier 1 patent engineer. Now he predicts that cost-conscious managers will be next to see their jobs shift overseas.
"U.S. bosses don't realize that perfectly competent managers in place like China will work for far less," he says. "They'll learn that even management is going to go overseas. That's when they'll cry: 'That's not fair.' "
Alysha Webb contributed to this report