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Offshoring . . . offshore?

Entrepreneurs float scheme to skirt limits on H-1B visas.
By Jennifer Mears , Network World , 06/27/2005

Former supertanker captain David Cook and his partner Roger Green wave off critics who say their plan to put 600 software engineers on a ship just off the coast of Los Angeles is another anti-American move to steal jobs from U.S. workers.

And with the other hand, they wave off skeptics who say the whole thing is surely a hoax.

"This is absolutely real," Cook says.

The idea is to put software engineers on a fully staffed luxury liner that is flagged in a foreign country such as the Bahamas or the Marshall Islands in order to get around the H-1B visa requirements that have put a limit on the number of foreign workers that U.S. businesses can bring into the country. The company itself, called SeaCode, has its headquarters in San Diego and will pay U.S. taxes.

The idea has been called everything from bizarre to "a real threat." Some analysts question its feasibility, noting that start-up costs and overhead will be huge. SeaCode is working with a broker to find a suitable ship that will cost anywhere from $10 million to $300 million.


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Once the ship is in the water, which company founders predict will happen by the beginning of next year, SeaCode will employ a full onboard staff, providing its programmers with private living quarters, laundry service, three meals a day and medical care.

"I had a discussion about this with my research team ... and none of us - all of whom have worked in the IT industry for decades; most of whom have been business executives; and several of whom have accounting, finance and MBA degrees - could come up with a working rationale as to why this would work," says Bruce Guptill, managing director at consulting firm Saugatuck Technology.

But Cook - who is the company's CEO - and Green - the COO - believe it will. They already have investors lined up and say they are talking with a number of Fortune 1000 companies as potential clients. They say their business model - which includes round-the-clock shift work - will enable them to pay foreign workers two to three times as much as they would make in places such as India or China and still offer U.S. clients outsourcing packages that rival true offshore deals.

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