Globalization: Lean production

Three industries TextilefoodCars Do you see any similarities in the way they have been shaped by globalization?

Similarities Lean production Relocation Commodity chains (or value chains) Growth of corporate power and profitability Loss of social power

Central similarity Whether in Detroit or Dhaka or Toronto, there is a ‘restructuring’ is the same In some places, this is a shift from mass production to lean/flexible/JIT production In others, manufacturing production is being established for the first time in a large scale, and it is the ‘flexible’ pattern

The decline kHN6Uhttp:// kHN6U NY Times video requiem for detroit kHN6U kHN6Uhttp:// kHN6U NY Times video kHN6U The decline of GM

Why? “natural decline’ ‘innovations/technology’Agent?

Car industry then and nwow s/457000/457029/html/ s/457000/457029/html/ s/457000/457029/html/ s/457000/457029/html/

Comparison 1955 Global monopoly of 3 carmakers, GM, Ford and Chrysler 4 of 5 cars were made in the US, with about half by GM In 1955, Toyota made 23,000 cars and GM, 4 million ed/spl/hi/guides/457000/ /html/default.stm ed/spl/hi/guides/457000/ /html/default.stmPresent US car makers only 43% of the US market LayoffsLosses Toyota is worth 10 times GM and Ford in the stock market

Toyota’s technology Stockless production Flexibility “JIT eliminated the need for each stage in the production process to hold buffer stocks, which resulted in huge savings. JIT has other advantages too. It involves the workforce much more directly in controlling their own inventory needs, and it allows a variety of models to be produced on the same assembly line simultaneously. Before its introduction, assembly lines had been able to cope with only one model at a time. To produce another model required closure of the line and expensive retooling”, The Economist.

“human” technology Tiering, temporary migrant workers Monopoly employer ‘The institutionalization of fear’ Wages not related to the cost of living of the worker, but profitability

Cartoon from Corpwatch

Corpwatch report “Toyota’s clout was driven by its increasing profitability and market share. In the first quarter of 2008, it passed General Motors to become the world’s largest auto company, selling 2.41 million vehicles compared to G.M.’s 2.25 million. In the U.S in the first six months of 2008, Toyota sold 300,000 more vehicles than G.M” General Motors General Motors

Growth of corporate power “Even a depression is a place for opportunity if you have cash, scale and ambition”, begins the report. Between 2004 and 2008, total revenues of the top 2000 companies have increased from $19.4 trillion to $32 trillion, an increase of 65%; aggregate profits have increased by 114%, assets by 83%, and employment by about 17%. The aggregate sales of the top three companies, Royal Dutch Shell, Exxon Mobil and Wal-Mart exceed the GDP of the entire African continent ($1.289 trillion and $1.281 trillion for 2008 respectively)

Corporate power (2) The aggregate sales of the top 50 corporations ($8 trillion approximately) is double the GDP of China and 8 times the GDP of India. Wal-Mart’s revenues equal the combined GDP of 73 poorest countries; Vodafone is bigger than Ecuador; Exxon was almost 14 times the size of Kenya; and so on. The combined sales of the Forbes Global 2000 ($29.78 trillion) equal the GDP of the 5 richest countries: US, Japan, China, Germany, and France. Alternatively, it equals the GDP of 174 out of 179 countries (i.e. all countries in the database minus the richest 5).

Agency? CorporationsGovernments Citizens? You?

Is Wal-mart good for America? Watch video hows/walmart/view/ hows/walmart/view/