Changing Geography of Production

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Changing Geography of Production

• From West to East,
• Center to Periphery

2
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

3
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
• http//www.wbresearch.com/AutoceeSiteVisits/fiat.h
  tml

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Friday, February 4, 2005Hungary Suzuki unit to
boost output in 2005/2006Reuters  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.
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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