Former Medtronic CEO Challenges Trump's Take on Offshoring Jobs

Donald Trump won the U.S. presidential election in part by pushing the idea that moving jobs overseas is hurting Americans, but former Medtronic CEO William W. George says it's not that simple.

Jamie Hartford

Last week, president-elect Donald Trump made headlines when he forged a deal with Carrier to keep in Indiana 1000 jobs the manufacturer of air conditioning and refrigeration systems had previously planned to move outside of the United States. Many saw the announcement as Trump making good on his promise to "make America great again" by convincing companies to retain jobs domestically rather than move them to locations abroad.

For the medtech industry, though, that can be a touchy subject. In recent years, many device companies have moved manufacturing operations to offshore locations such as Mexico, Costa Rica, and China to take advantage of cheaper labor and other benefits. And according to one former medical device company CEO, that's not a bad thing.

Speaking today on the CNBC technology news program Squawk Alley, William W. George, who served as CEO of Medtronic from 1991 until 2001, said moving operations outside the United States is the new normal for many companies.

"If you don't [move operations] overseas, you'll lose the market to foreign competitors and then you won't have any of the jobs here, so I think there's a little misunderstanding," George said, according to the network.

Moreover, George, now a professor at Harvard Business School who also serves on the board of for Mayo Clinic, said sending some jobs to other countries can ultimately lead to job growth in the United States.

"For companies like Boeing, General Electric, Ford, Medtronic, every time you add a job overseas, you add three jobs here for all the [research and development] people, engineering process people, manufacturing experts, marketing, sales, administration," George said.

George isn't the only person involved in medtech who seemed to have reservations about Trump's plans to retain jobs domestically. While some respondents to a recent Qmed poll on whether Trump will be good or bad for the industry expressed a desire for his administration to implement policies that would encourage reshoring of jobs, one commenter had a different take:

"I would prefer that he keep his hands away from the industry. Given the amount of medtech industry manufacturing in Mexico and China, his stances are concerning. If he follows through on campaign promises, the device industry could see substantial cost increases and loss of jobs," the commenter wrote.

Jamie Hartford is director of content for medtech brands in UBM's Advanced Manufacturing Group. Reach her at [email protected].

[image by RaleighThreeShips (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons]