1. CHAPTER 11
INDUSTRY

2. INTRO ¾ of world’s industrial production is located in four regions:
NW Europe
Eastern Europe
Eastern North America
East Asia
Each is broken down further
Less than 1% of Earth’s land is devoted to industry
When compared to agriculture, industry is much more clustered in space
2 key factors in determining best location for a factory:
Where the markets for the product are located
Where the resources needed to make the product are located

3. Where is Industry Distributed?
ISSUE #1
Where is Industry Distributed?

4. Manufacturing Value Added
Fig. 11-1: The world’s major manufacturing regions are found in North America, Europe, and East Asia. Other manufacturing centers are also found elsewhere.

5. INDUSTRIAL DISTRICTS IN EUROPE (see KI#1 worksheets)
WESTERN EUROPE
EASTERN EUROPE UK
Rhine-Ruhr Valley
Mid-Rhine
Northern Italy
Central Industrial District
St. Petersburg
Volga
Ural
Kuznetsk
Eastern Ukraine
Silesia

6. Manufacturing Centers in Western Europe
Fig. 11-2: The major manufacturing centers in Western Europe extend in a north-south band from Britain to Italy.

7. Manufacturing Centers in Eastern Europe and Russia
Fig. 11-5: Major manufacturing centers are clustered in southern Poland, European Russia, and the Ukraine. Other centers were developed east of the Urals.

8. INDUSTRIAL DISTRICTS IN NORTH AMERICA (see KI#1 worksheets)
CANADA
New England
Middle Atlantic
Mohawk Valley
Pittsburgh-Lake Erie
Western Great Lakes
St. Lawrence Valley-Ontario Peninsula

9. Industrial Regions of North America
Fig. 11-6: The major industrial regions of North America are clustered in the northeast U.S. and southeastern Canada, although there are other important centers.

10. INDUSTRIAL DISTRICTS IN EAST ASIA (see KI#1 worksheets)
Best asset is its large labor force
Japan – emerged as an industrial power in the 1950s/1960s
China – world’s 2nd largest manufacturer, largest labor force in manufacturing

11. Manufacturing Centers in East Asia
Fig. 11-7: Many industries in China are clustered in three centers near the east coast. In Japan, production is clustered along the southeast coast.

12. Why Do Industries Have Different Distributions?
ISSUE #2
Why Do Industries Have Different Distributions?

13. Industry seeks to maximize profits by limiting production costs
Industry seeks to maximize profits by limiting production costs. Companies usually face two types of geographical costs:
Site Factors
Situation Factors
(involve transporting materials to and from a factory)
(result from the unique characteristics of a location)

14. SITUATION FACTORS IN + 1. PROXIMITY TO INPUTS 2. PROXIMITY TO MARKETS
3. TRANSPORT CHOICES

15. PROXIMITY TO INPUTS STEEL
If the weight of an input is great, a factory may choose to locate near the input in order to cut down on transportation costs

16. COPPER CARTOON
Draw a picture/visual representation depicting the various aspects of copper as a bulk-reducing industry. Your picture must contain a picture of a copper mine and the following:
Concentration mills
Smelters
Refineries
- Include a brief caption explaining the location of each as it relates to the copper mine

17. MAKE ARIZONA YOUR COPPER HEADQUARTERS!!!!
The map on page 373 states that “In the United States, most plants that concentrate, smelt, and refine copper are in or near Arizona, where most copper mines are located.”
Arizona has been hit very hard by recent economic woes, especially in regards to real estate. You have the opportunity to turn the tide by bringing commercial real estate to Arizona by attracting members of the copper industry to your state.
Your job is to create a commercial highlighting why Arizona is such a great state for a company to establish their copper headquarters. You can be as creative as you want as long as you meet the guidelines.

18. GUIDELINES Your commercial must:
Summarize each of the following processes:
mining, concentrating, smelting, refining
Explain why being located in Arizona helps with each process. (this is the meat of the commercial - sell, sell, sell!)
Have an image (and text, music, slogan… accompanying it) for each of the above listed. Your creativity can really come here, use music, vids, pictures, jingles, slogans……
Due Date: Monday, March to Mr. Oswald prior to the start of class

19. PROXIMITY TO INPUTS - STEEL
Bulk-reducing industry
Originally Iron and Steel mills clustered near the sources of these raw materials (iron ore and coal - see map on 374)
Watts steam engine (1769) – increases iron production

20. Integrated Steel Mills
Fig. 11-9: Integrated steel mills in the U.S. are clustered near the southern Great Lakes, which helped minimize transport costs of heavy raw materials.

21. U.S. STEEL INDUSTRY
MID – 1800s – clustered in Pittsburgh and SW PA (why? what was there? – iron ore and coal)
Gradually moves west (where and why? – Minnesota, Indiana, Illinois – discovery or iron ore but also changes in the steelmaking process which required more iron ore in proportion to coal)
In first half of the 20th century most steel mills were built along the coasts (why did this change occur? – changes in transportation costs as more iron ore was imported and greater use of scrap iron, which was available near major cities on the coasts)

22. U.S STEEL cont. Many steel mills have recently closed
Survivors benefit from access to markets more than access to inputs
Goes against historical trend (why?)

23. Nucor Steel Minimills
Fig : Minimills produce steel from scrap metal, and they are distributed around the country near local markets. Nucor is the largest minimill operator.

24. PROXIMITY TO MARKETS
For many, best location is closest to where the product is sold (ex. soda)
- transportation costs are especially critical for these industries:
1. Bulk-gaining
2. Single Market
3. Perishable

25. PROXIMITY TO MARKETS cont.
BULK-GAINING INDUSTRY
FABRICATED METALS & MACHINERY
Good examples are soft drinks
Why is scotch whiskey an exception?
Combines steel and other metals into more complex products (tv, refrigerators, air conditioners, motor vehicles)
Assembly plants clustered in “auto alley” (why?)
Recent change in location of assembly plants from coasts to interior due to changing market
See insets on page 376

26. Location of Beer Breweries
Fig : Beer brewing is a bulk-gaining industry that needs to be located near consumers. Breweries of the two largest brewers are located near major population centers.

27. Chevrolet Assembly Plants, 1955
Fig a: In 1955, GM assembled identical Chevrolets at ten final assembly plants located near major population centers.

28. Chevrolet Assembly Plants, 2007
Fig b: In 2007, GM was producing a wider variety of vehicles, and production of various models was spread through the interior of the country.

29. PROXIMITY TO MARKETS cont.
SINGLE MARKET MANUFACTURERS
PERISHABLE PRODUCTS
“ just in time products”
Location to assembly plants, not markets, is most important
Think of parts makers for cars
Must be located near markets (think milk and Von Thunen)
Not the case for frozen foods (cheese, butter)
Not all perishables are food (newspaper – why?)

30. Motor Vehicle Parts Plants
Fig : 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.

31. SHIP, RAIL, TRUCK OR AIR? You are responsible for this section (up to Site Factors) on your own

32. PICTURES
Draw a picture that depicts an example of each of the following and include a brief caption explaining the picture:
Proximity to Input (does not have to be steel, just needs to be bulk-reducing)
Proximity to Market (needs to be gulk-gaining, single-market, and/or perishable)
Transport Choice (boat, train, automobile, plane))

33. SITE FACTORS L A N D
CAPITAL

34. LABOR 150 million manufacturing workers (China-20%, U.S. – 10%)
Labor intensive vs. capital intensive (what is the difference?)
Wages (> $20/hr. in MDCs, <$5/hr in LDCs)
On a global scale ,labor is the most important site factor
a lot of hard work does not always mean high pay

35. LABOR cont. TEXTILE & APPAREL SPINNING TEXTILE & APPAREL WEAVING
Labor intensive; low wage (highly clustered in LDCs – see p.381)
Spinsters and cottage industry before the Industrial Revolution
Becomes clustered industry during the 1700s (spinning frames and mills, located near flowing water)
Even more labor intensive than
REALLY clustered in LDCs (they grow cotton and have low wages)
Chemical industry changes textiles but also foods
colors for clothing and preservation/canning for food

36. Cotton Yarn Production
Fig a: Production of cotton yarn from fiber is clustered in major cotton growing countries, including the U.S., China, India, Pakistan, and Russia.

37. Distribution of Cotton Yarn Production
Fig b: Three-quarters of cotton yarn is produced in less developed countries.

38. Woven Cotton Fabric Production
Fig a: Production of woven cotton fabric is labor intensive and is likely to be located in LDCs. China and India account for over 75% of world production.

39. LABOR cont. TEXTILE & APPAREL ASSEMBLY
Textiles are assembled into 4 main products
Garments, carpets, home products, industrial uses
Most clothing articles are produced in Asia

40. Trouser Production
Fig a: Sewing cotton fabric into men’s and boys’ trousers is more likely to be located in developed countries, but much production now occurs in LDCs.

41. Distribution of Trouser Production
Fig b: The majority of trouser production is in MDCs, near customers.

42. LAND
Not nearly as critical a factor as labor when considering only land (why not?)
It is only a critical factor when it takes into account resources (natural and human)

43. LAND cont.
Prior to IR many economic activities were located near rivers and forests (why?)
During the IR they moved close to coalfields (clustered industry)
During the 20th century electricity has become more important to industry (want to be near cheaper electricity)

44. CAPITAL Industries often borrow funds to build/expand
(ex. motor vehicle industry in Michigan)
Availability of capital was key factor in the evolution of Silicon Valley
Ability to borrow has become increasingly important in LDCs

45. 1. An industry in which a large percentage of wages and benefits goes to employees is a _________________ type of industry.

46. LABOR INTENSIVE

47. 2. TEXTILE AND APPAREL INDUSTRY ACCOUNTS FOR _____ % OF WORLD MANUFACTURING EMPLOYMENT.

48. 14%

49. 3. BECAUSE IT IS LABOR INTENSIVE SPINNING IS DONE MOSTLY IN _____ (MDCs or LDCs)

50. LDCs

51. 4. WHAT COUNTRY IS REPSONSIBLE FOR THE LARGEST PERCENTAGE OF THE WORLD’S COTTON THREAD AND WHAT IS THAT PERCENTAGE?

52. CHINA and 46%

53. 5. TRUE/FALSE: ALMOST ALL SYNTHETIC FIBERS ARE NOW PRODUCED IN MDCs DUE TO THE TECHNOLOGY NEEDED TO PRODUCE THEM

54. FALSE, IT’S ABOUT 50/50 BETWEEN MDCs AND LDCs

55. 6. TRUE/FALSE – WEAVING IS EVEN MORE LABOR INTENSIVE THAN SPINNING

56. TRUE

57. 7. WHAT PERCENTAGE OF THE WORLD’S WOVEN COTTON IS PRODUCED IN LDCs?

58. 86%

59. 8. What two countries account for the largest percentage of the world’s woven cotton and what is that combined percentage?

60. CHINA (47%) AND INDIA (27%) 74%

61. 9. LIST THE FOUR MAIN TYPES OF PRODUCTS INTO WHICH TEXTILES ARE ASSEMBLED.

62. GARMENTS, CARPETS, HOME PRODUCTS, INDUSTRIAL USES

63. 10. TRUE/FALSE - THE RECENT TREND FOR WOOL PRODUCTION IS THAT MORE AND MORE IS BEING PRODUCED IN NORTH AMERICA AND EUROPE THAN IN ASIA

64. FALSE, JUST THE OPPOSITE

65. Where is Industry Expanding? (shift from MDCs to LDCs)
ISSUE #3
Where is Industry Expanding?
(shift from MDCs to LDCs)

66. INTRAREGIONAL SHIFT
site and situation factors historically led to location of factories in cities (why?)
Proximity to market
Easier shipping on RRs
Labor supply
Source of capital
Modern factories - suburban or rural (why?)
Availability of space/land
Cheaper land
Access to highways more important than RRs

67. INTERREGIONAL SHIFT U.S. – manufacturing has shifted south and west
Western Europe – shift towards “economically distressed peripheral areas” (southern and eastern Europe)

68. INTERREGIONAL cont. SOUTHERN & WESTERN U.S. WESTERN EUROPE
NE – has lost 1 million manufacturing jobs in past 30 years
Those jobs have grown by 1/6 in the S and W in same time (why?)
Right to work laws
Lower wages
Improved infrastructure (roads)
Climate
Resources (water, oil, natural gas…)
Shipping lanes
Shift specifically towards southern and eastern Europe
Difference with U.S. - European policies that have explicitly encouraged this relocation
Spain – most rapid growth (motor vehicles)

69. Figure: 11-17
Title:
Changing U.S. manufacturing.
Caption:
States traditionally associated with manufacturing, in the Northeast and Southern Great Lakes, as shown in Figure 11—6, accounted for two-thirds of the country's manufacturing in 1950, compared to only two-fifths in 2005.

70. Figure: 11-18
Title:
European Union Structural Funds.
Caption:
The European Union provides subsidies in regions with economic difficulties because of declining industries.

71. NEW INDUSTRIAL REGIONS
LATIN
AMERICA
CENTRAL
EUROPE

72. ASIA
China is the world’s largest manufacturer of textiles/apparel, steel and many household product – what assets does it have?
Cheap labor and enormous consumer market
Other Asian nations have removed barriers to manufacturing investment by multinationals
Ex. Thailand Lowered tariff on imported vehicles
Shift from self-sufficiency model to int’l trade
Rich China
Poor China

73. Steel Production, 1980
Fig a: The U.S., Soviet Union, and Japan were the largest steel producers in 1980.

74. World Steel Production, 2005
Fig b: By 2005, steel production had increased in developing countries but declined in the more developed countries.

75. Distribution of Steel Production 1980 & 2005
Fig : Developed countries accounted for 80% of world production in 1980 but only 45% in LDCs increased from 20% to 55%. China is now the world’s largest producer.

76. Shanghai Steel Factory
The Baoshan Iron Steel Company in Shanghai, China

77. LATIN AMERICA Mexico and Brazil are region’s leading manufacturers
Clustered in Mexico City & Sao Paulo
Bad policies and oil shortages (‘60s and ‘70s) hurt Mexico
‘80s – growth mainly in the north (maquiladora plants)
‘80s – ’90s – new policies increased growth (lower tariffs, NAFTA…)
Mexico’s location to U.S. market is a big advantage
1964 Ford Falcon

78. CENTRAL EUROPE
Since 1990 several countries between Germany and Russia have seen much growth (why?)
Labor (middle ground compared to West and Asia and Latin America)
Proximity to markets
Specifically :Hungary, Czech Republic and Poland have seen the most development

79. Why are Location Factors Changing?
ISSUE #4
Why are Location Factors Changing?
(attraction of new regions and renewed attraction of traditional regions)

80. ATTRACTION OF NEW INDUSTRIAL REGIONS: PROXIMITY TO LOW-COST LABOR
Labor is the site factor that is changing very dramatically in recent years
Shift to low wage locations takes place within nations and between them (esp. in textile/apparel industry)
Ex. In U.S. – textile industry locates in New York during the early 20th century (why?) then moves to southeast in the mid-20th century(why?)
Many have moved manufacturing overseas due to even cheaper labor
Decrease in apparel workers in U.S. and WE
Apparel imports in U.S. have increased (from Latin America, China, other Asian nations)

81. Sock & Hosiery Manufacturing
Fig : Men’s and women’s socks and hosiery manufacturers usually locate near a low-cost labor force, such as found in the southeastern U.S.

82. Labor Cost per Hour MDCs and LDCs
Fig : Hourly wages can be under $1 in many LDCs compared to well over $10 in many MDCs.

83. U.S. Clothing Production 1994 - 2005
Fig : The percent of U.S. made clothing has declined sharply since the 1990s while imports have increased.

84. OUTSOURCING Transnationals in particular seek cheaper labor
Role of new international division of labor
outsourcing vs. vertical integration
Outsourcing’s impact on the distribution of manufacturing

85. RENEWED INTEREST IN TRADITIONAL REGIONS: PROXIMITY TO SKILLED LABOR
Switch from Fordist to post-Fordist has increased need for more skilled labor
Skilled labor is usually located in traditional industrial regions
3 types of post-Fordist work rules (teams, problem solving, leveling)
Computer industry is good example of industry in traditional region
Some textile/apparel still exists in traditional regions too
“High end” requires more skill
Efforts to attract jobs to traditional states in U.S. (startup NY commercial)

86. Computing Equipment Manufacture
Fig : High skill workers are needed for manufacture of computing equipment. California, the Northeast, and Texas are the major sites.

87. Women’s and Girls’ Apparel
Fig 11-25: Products that require more skilled workers are still produced in or near New York City. Other items are produced in sites with lower cost labor.

88. JUST-IN-TIME DELIVERY
This is especially important for delivery of inputs
Ex. Parts for cars, computers
Just-in-time delivery reduces money spent on wasteful inventory and size of factory
U.S. % of economy spent on inventory has decreased by 50% in last 25 years
Dell and Gateway have eliminated inventory (how? why?)
Sometimes forces suppliers to hold inventory, not the shop (ex. Wal-Mart)
Makes manufactures more susceptible to disruptions when they rely heavily on JITD
Labor unrest
“acts of God” (weather, acts of terror)

89. Fedex Sorting and Loading
Packages picked up by Fedex are transferred to planes, flown to sorting centers, transferred to other planes and flown to other cities, then loaded onto trucks for delivery the next day.

90. Chapter 11 REVIEW

91. 11.02 By the late nineteenth century, this country had made the least progress toward industrialization:
1. Russia
2. France
3. Germany
4. Belgium
5. United States

92. 11.02 By the late nineteenth century, this country had made the least progress toward industrialization:
1. Russia
2. France
3. Germany
4. Belgium
5. United States

93. 11.03 Industrialization in the United States began in
1. California
2. The Midwest
3. The Middle Atlantic states
4. New England
5. The South

94. 11.03 Industrialization in the United States began in
1. California
2. The Midwest
3. The Middle Atlantic states
4. New England
5. The South

95. 11.04 Beer brewing is 1. A bulk-gaining industry
2. A bulk-reducing industry
3. Unconcerned with bulk
4. Distributed fairly evenly around the United States
5. Unaffected by site factors

96. 11.04 Beer brewing is 1. A bulk-gaining industry
2. A bulk-reducing industry
3. Unconcerned with bulk
4. Distributed fairly evenly around the United States
5. Unaffected by site factors

97. 11.05 Which of the following statements about the manufacture of American cars is true?
1. There are relatively few plants in the South
2. Each plant focuses on only one or a few models
3. Plants are located near each major metropolitan area
4. Plants are more dispersed now than they were in the 1950s
5. American cars face little foreign competition

98. 11.05 Which of the following statements about the manufacture of American cars is true?
1. There are relatively few plants in the South
2. Each plant focuses on only one or a few models
3. Plants are located near each major metropolitan area
4. Plants are more dispersed now than they were in the 1950s
5. American cars face little foreign competition

100. 11.06 The cheapest way to transport goods over long distances is by
1. Air
2. Roadway
3. Rail
4. Water
5. None of these

101. 11.06 The cheapest way to transport goods over long distances is by
1. Air
2. Roadway
3. Rail
4. Water
5. None of these

102. 11.07 Which type of manufacturing requires the lowest level of skill?
1. Automobiles
2. Computers
3. Textiles
4. Airplanes
5. Consumer electronics

103. 11.07 Which type of manufacturing requires the lowest level of skill?
1. Automobiles
2. Computers
3. Textiles
4. Airplanes
5. Consumer electronics

104. 11.08 It is especially important for aluminum processors to locate near
1. Navigable rivers
2. Cheap electricity
3. Inexpensive labor
4. Major metropolitan areas
5. Beer breweries

105. 11.08 It is especially important for aluminum processors to locate near
1. Navigable rivers
2. Cheap electricity
3. Inexpensive labor
4. Major metropolitan areas
5. Beer breweries

106. 11.09 Within the United States, manufacturing has been most likely to shift in which of the following directions?
1. North
2. Northeast
3. East
4. South
5. Manufacturing has tended to stay in the Midwest and Northeast

107. 11.09 Within the United States, manufacturing has been most likely to shift in which of the following directions?
1. North
2. Northeast
3. East
4. South
5. Manufacturing has tended to stay in the Midwest and Northeast

108. 11.10 Outsourcing 1. Is one aspect of vertical integration
2. Has not yet become important for transnational corporations
3. Leads to an increase in manufacturing jobs in less developed countries
4. Is supported my most American politicians
5. Is prohibited by the World Trade Organization

109. 11.10 Outsourcing 1. Is one aspect of vertical integration
2. Has not yet become important for transnational corporations
3. Leads to an increase in manufacturing jobs in less developed countries
4. Is supported my most American politicians
5. Is prohibited by the World Trade Organization