Businessman Threatens To Pull K Plan From ING Due to Outsourcing

December 10, 2003 ( - A Bristol, Connecticut business is using its 401(k) and insurance plans to affect change in the way financial firms outsource jobs overseas.

Fred Tedesco, president and co-owner of Pa-Ted Spring Co. Inc. sent a letter to ING Group threatening to take his company’s 70-person 401(k) plan business elsewhere if the company outsourced any more computer jobs.   Tedesco also plans to apply similar pressure to The Hartford Financial Services Group Inc. – the provider of the company’s property-casualty insurance – which has outsourced some computer jobs to Indian companies, according to a Hartford Courant report.

ING sent a response to Tedesco’s letter, which he categorized as “bland” and “double-talk.”   Additionally, he had a phone conversation with a company representative that he was not satisfied with.   This in turn has left a bad taste in Tedesco’s mouth, which he said the decision to pull his company’s retirement plan now   depends on what ING does with outsourcing and whether it engages in “an honest dialogue” on the issue.  

Even though Tedesco said he realizes that losing his firm’s small 401(k), with several million dollars of assets, would mean little to ING, which has administered the plan for a year. However, he said, “the whole point is to set the stage for other people to look at” the issue.

Outsourcing Wave

Tedesco’s firm, makes precision springs, stampings and small assemblies used in such consumer products as cars, appliances and hand tools. He says his business has shrunk, hurt by customers shutting down and moving operations to China and his battle against outsourcing is an extension of his fight to save American jobs and the middle class.

At the root of the problem for Tedesco is the outsourcing of computer jobs as a whole.   Tedesco even goes as far as to say it is not enough just to say the contract will be with an American company because many US vendors in turn outsource to foreign countries and import workers on visas. “We want to have people we do business with keep jobs in the US,” Tedesco told the Courant.   “We think other companies should be doing the same thing.”

“These insurance companies want you to pay in American dollars, but they don’t want to pay American wages, and I think that’s an abomination,” Tedesco continued.

The move by Tedesco may be the initial ripples of an oncoming small business tsunami.   Several pro-American business groups are expected to start urging small businesses to take similar stands against insurers and financial services firms.   Leading the charge is MADe in USA, a coalition of employees and owners of small and medium manufacturers that Tedesco helped create more than a year ago.

These groups have their work cut out for them, as many insurers including ING, Aetna, CIGNA, and Hartford Life – and many companies in other industries nationwide – have shifted at least some of their information technology work to India or other countries with lower labor costs to save money.