Problem:
The overseas unit, as in off-shoring, is exposed to more risks (political, economic, social risks, interest groups, and intellectual property), and also higher potential profits for the firm. An overseas manufacturing or service organization will be more locally responsive in the host country but will face competitive pressures from other multi-nationals. The risk is less if the overseas unit is a captive unit for the US parent (Whirlpool in Mexico, Microsoft Research in India).
While closing dozens of plants and laying-off thousands of workers in USA may be in the interest of strategic survival of a firm, I believe US is losing crucial skills in manufacturing, technology, and management.
Does off shoring stifle domestic innovation also?
Do you believe outsourcing has now become irreversible?