Industrialization Key Issue #4: Why are Location Factors Changing?

Proximity to Low Cost Labor Labor is the site factor that is changing rapidly in the 21 st Century Textile and apparel industries are especially opening production in lower wage locations while shutting production in higher wage locations

Textile and Apparel Industry in the U.S. Early 20 th Century – heavily concentrated in the NE Mid 20 th Century – production moved to the SE SE wages were low compared to the NE, but still high on a global scale The number of apparel workers declined from 1.5 million in 1994 to 700,000 in 2003

Outsourcing Transnational corporations have been very aggressive in using low cost labor in PINGs Despite transportation cost Jobs that require highly-skilled workers remain in PEDs

The New International Division of Labor Transnational corporations outsource jobs to low wage countries Productions is turned over to independent suppliers This is the opposite of vertical integration – in which a company would control all phases of production Example: Carmakers used to make their own parts, but now they outsource that responsibility to other companies

Renewed Attraction to Traditional Industrial Regions Many industries now want skilled labor Traditionally, factories required workers to perform the same task repeatedly Fordist approach Ford Assembly Line

New Work Rules Lean or Flexible Production (post-Fordist) Three types of work rules for post-Fordist: 1.Teams 2.Problem Solving 3.Leveling Examples: Computer manufacturing (CA), “high-end” clothing is made in the NE U.S.

Just-in-Time Delivery Shipment of parts and materials to arrive at a factory moments before they are needed Important for inputs for manufacturing Saves money by reducing wasteful inventory Suppliers must locate near customers

Computer Manufacturing Dell and Gateway have reduced inventory by only producing upon demand (telephone or internet) Two disruption that could occur: 1.Labor unrest 2.Acts of God