1. Changes in Industry

2. 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

3. Geography of the Steel Industry

4. 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

5. 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

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

9. 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

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

12. 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

13. 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

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

15. 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.

16. Off-shore financial centers

17. 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

18. Maquiladoras

19. Maquiladora in Nuevo Laredo, Mexico repairs telephones for AT&T19

20. 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

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

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

24. • 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

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

27. China, the birthplace of your Nike's

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

30. Unloaded at the port of Long Beach, near LA

31. 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)

32. 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?