Spacing Versus Timing: Tension in the Global Economy Essay

Submitted By dobbynumber2
Words: 920
Pages: 4

The relationship between production and space and time is becoming ever more important in the global economy. As more industries move farther away from fordist mass production towards post-fordist flexible productions, companies have to consider many different aspects when considering a geographic location for production facilities. With fordist style mass production it is economical for companies to look at subcontractors and production facilities to be located in areas that can offer the lowest production costs. With this style in the 20th century companies generally produced the products in the global south because labour is so cheap. This form of globalization relies on the new international division of labour in which multinational corporations (MNC) locate themselves in less costly production sites. In recent history companies have moved towards using a more flexible production style. With flexible production, companies often adopt a just-in-time approach to production which requires their subcontractors and production facilities to be much closer in proximity to each other and to the consumer. They do this because industries are growing at a rapid pace and are very fickle with demand. It does not make sense for such industries to produce mass quantities of products. MNCs using this approach do not produce their product until it is ordered. This forces subcontractors and suppliers to be very responsive with products and therefore they need to be close in proximity. This approach often increases the quality of products as well because they are sent in smaller orders and therefore cannot afford them to be dysfunctional. Lastly, this method allows companies to save money on their overhead by not stock piling mass quantities of goods. There are various reasons as to why a company would choose a particular geographical location on top of their production method. The main purpose is that MNC need to balance the responsiveness of their production sites with proper geographical spacing. The case of Cork Ireland is a good example of why companies move to a location which does not offer the cheapest available labour. In 1947 the Shannon Free Trade Zone (FTZ) was established. This was the first established FTZ in the world and it gave MNC the opportunity to move to a tax-free location with an abundant workforce at competitive prices. This is an example of a ‘greenfield’ site outside of the global south in which MNC could move to be competitive within the European economic market. Companies that moved here were interested in competing in volatile, rapidly growing markets such as the computer technology and production industry. Cork was an excellent geographical choice for many reasons. Initially the Irish government would pay 60% of a company’s start-up costs, as well as allow 100% of the company’s profits to be repatriated. Computer production companies also received benefits through regional trade agreements and a reduction of tariffs. Lastly when a MNC moved to Cork it offered certain characteristics of its labour workforce which allowed it to construct a workforce suited for them: it offered competitive wages, a well educated workforce, high unemployment, and also a mostly young, green and female labour force. An example of an atypical ‘greenfield’ could be Brooklyn, New York, as seen in the movie “Made in Brooklyn.” This movie shows that there is still an immigrant labour force available for the manufacturing sector of Brooklyn, even though it is an area dominated by service jobs. It shows that there will always be a niche for a production industry; even if it is a developed city, and even if they are simply producing lamps.
The automotive…