Changing Geography of Production From West to East, Center to Periphery

Integration and Industrial Restructuring With integration, capital (search for market and surplus value) has internationalized Political integration as a tool for globalization and protection from it Production has shifted to locations with more favorable ‘environment’ Former Eastern European Countries: Fordist, HVP Non- and De-industrialized periphery: Ireland, Spain, Wales Increasing specialization in Western Europe: biotech, IT and aerospace Enlarged Union = Enlarged Economies of Scale

High Volume Production: Automobiles Europe retains HVP through eastward enlargement of EU Fiat and Daewoo in Poland & Romania Suzuki, Ford, VW-Audi and GM in Hungary National governments welcomed generation economic development ‘shock therapy’ into capitalist markets Injection of Japanese, German and American investment (capital, technology) & expertise Auto manufacturers welcomed lower labor costs, EU incentives and open borders of the EU

Friday, February 4, 2005 Hungary Suzuki unit to boost output in 2005/2006 Reuters ESZTERGOM, Hungary - The Hungarian unit of Japanese car maker Suzuki Motor Corp. said on Friday it would increase output to 150,000 units in 2005 from 95,000 last year. Next year, Suzuki, which employs 2,700 people, plans to produce 200,000 cars at its Hungarian plant in Esztergom, north of Budapest, where it has been increasing capacity. "Including the suppliers, Suzuki gives jobs to some 30,000 people," Prime Minister Ferenc Gyurcsany told journalists after Suzuki launched the production of its new Suzuki Swift model. Suzuki, one of the biggest foreign investors in Hungary, said it expected sales revenues to total 300 billion forints ($1.59 billion) this year. The company last year invested 60 billion forints in Hungary and increased its annual production capacity to 200,000 units from 90,000 units previously, and plans further investments worth 50 billion forints this year. Suzuki sold 100,292 cars in Hungary last year, up from 89,952 in 2003, and has by far the biggest slice of the Hungarian car market.

Refocusing the Center SME (Small and Medium sized Enterprises) Rise of highly specialized clusters in Old Core of European Economy Sub-contractors to larger firms More flexible More responsive to changes in demand and supply More innovative through intense competition ‘Knowledge-based’ communities and economic networks E.g. Formula One Racing Production Facilities in Southeast England