Changes in Industry

Steel, Motor Vehicles, Textile Production Steel – bulk-reducing – traditionally located near _____? Shifts happened because the inputs necessary changed and eventually proximity to markets became more important over time Motor vehicles – bulk-gaining – traditionally located near what? East Asia, Europe, North America Textiles and Apparel Less-skilled, low-cost workers China and India have become the dominant fabric producers because their lower labor costs offset the expense of shipping inputs and products long distances

Geography of the Steel Industry

Changes in Developed Countries Shift away form northwestern Europe and northeastern US Europe – to convergence regions US – to the South and West The South was historically the poorest region of the US due to the Civil War 1930s – gov’t policies to reduce disparities, build up infrastructure Many manufacturers now dispersing to the South because of lower wages and willingness to not join a union

Right – to – work laws Requires a factory to maintain a so-called “open shop” and prohibits a “closed shop” “Closed shop” – everyone must join the union to work in the factory Right-to-work laws make it much more difficult to organize factory workers, collect union dues and bargain with employers Attractive to companies who want to keep out unions

Foreign direct investment by businesses Increasing productivity, advancements in technology, movement of production into different geographic regions.

Motor Vehicle Parts Plants American owned parts plants are clustered near the final assembly plants in the Rust Belt. Foreign-owned plants tend to be located further south, where labor unions are weaker, wages, taxes and regulations are lower. U.S.-owned parts plants are clustered near the main final assembly plants. Foreign-owned plants tend to be located further south, where labor unions are weaker. 9

Why remain in traditional regions? Rapid delivery to market Just-in-time delivery Availability of skilled labor Fordist vs. post-Fordist production

Fordist vs. Post - Fordist Fordist = single site mass production Replaced Cottage Industries Vertical Integration -Single company owns all aspects of production. Specialized labor force Large inventory of products All tasks done by company Leads to urbanization Post-Fordist: Production dispersed and accelerated Just-In-Time Delivery Global Division of Labor Time Space Compression Outsourced and Offshore Avoid Government Regulations Is anything left in the Core? High Tech Manufacturing and R&D

Emerging Industrial Regions Industry has shifted to LDCs Wage rates are lower than traditional industrial regions Especially attractive for labor-intensive industries Transportation cost is higher but substantially lower wages make up for it in jobs that need little skill Operations that require high level of skill remain in MDCs Before 1970, LDCs mostly used for their resources/materials not labor New International Division of Labor – selective transfer of some jobs to developing countries

Time-Space Compression Through improvements in transportation & communications technologies, many places in the world are more connected than ever before.

Modern Production Outsourcing – Transnational corporations moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings. Growth in manufacturing in Mexico (maquiladoras) and BRICS (Brazil, Russia, India, China, South Africa) Offshore – Outsourced work that is located outside of the country.

Off-shore financial centers

Export Processing Zones Lower wages than Core Lower taxes Weaker safety and environmental regulations Ability to pit workers against each other, or to repress unions Less than 10 More than 10 United States data on map also represents Free Trade zones

Maquiladoras

Maquiladora in Nuevo Laredo, Mexico repairs telephones for AT&T 19

Deindustrialization in the Core Relative decline in industrial employment Automation and “runaway shops” Reinvestment in higher profit areas Sunbelt states (non-union) Semi-periphery and Periphery

View clips from Michael Moore’s Roger & Me – impact on Flint, MI

Collapse of Manufacturing = Rust Belt Replaced in Boston, Pittsburgh by high-tech industries

• Creative destruction: the process of industrial transformation that accompanies radical innovation. • So what…. – Deindustrialization in one location suggests that growth is occurring in a separate location • Capital is not destroyed, it is displaced. Joseph Schumpeter – the Father of Creative Destruction

Movement of jobs and people to the Sunbelt Different types of industry have different site and situation needs

China, the birthplace of your Nike's

China, the birthplace of your Nike's and socks and underwear and …. Port of Hong Kong

Unloaded at the port of Long Beach, near LA

To Wholesale Center in Midwest by Rail To Distribution Center by Truck and Eventually the Retail Outlet Price: $120 (or approximately one month of wages in China)

What is a Post Industrial World? Where is it located? What does it look like? Core countries still Sunbelt in US With Services…what is more important? Resources or Markets (IL Research and Technology Corridor…Silicon Prairie?) Tertiary, quaternary, and quinary sectors. Deindustrialization? Increasing Mechanization Multinational Corporations Post-Fordist Production Global Division of Labor and Production Chain Can outsource services – Who prepares the food / cleans the place?