This is a very complex topic and I applaud Mr. Schoonmaker's initiative to take a stab at it. If you have five people in the room discussing outsourcing and free trade you'll get ten different opinions, but the discussion needs to take place.
Being a hard core engineer, I too get frustrated with the tendencies of divestiture by american industry and society in added-value engineering. Thinking about the demands of the restructuring committes for Delphi, GM, and the airline companies, where workers are asked to take a 65% pay cut are just unbelievable.
So what can we do about it? I feel that we as engineers need to become more enterpreneural. We need to take more initiative and bring added-value engineering to the market place ourselves. Working on the required 10% cost reduction for a bolt on the next GM car's transmission maybe what you get to work on for the american industrial complex, but that is not added-value engineering that will save our engineering profession. We need to move up into the decision making process of industrial products, and the only way I see we can do this while the industrie is divesting in us, is to take the initiative out of the hands of the MBAs. If you have a skill in designing transmissions, cast that skill in added-value products for high value industries such as speed shops, or after market hot-rods: but you have to do that as an enterpreneur, not as a pure design engineer.
To recap, I think the answer to outsourcing is for us engineers to move up in the decision making process. If you follow orders from a bottomline driven management team, you are replacable and will be outsourced, because you are not adding sufficient value to compete with low-cost engineers in developing countries, which by the way tend to have a better education then the typical american engineer. If you 'see' what needs to get done, then go do it. Those engineers that don't will get outsourced.