2 INTRO ¾ of world’s industrial production is located in four regions: NW EuropeEastern EuropeEastern North AmericaEast AsiaEach is broken down furtherLess than 1% of Earth’s land is devoted to industryWhen compared to agriculture, industry is much more clustered in space2 key factors in determining best location for a factory:Where the markets for the product are locatedWhere the resources needed to make the product are located
3 Where is Industry Distributed? ISSUE #1Where 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 EUROPEEASTERN EUROPEUKRhine-Ruhr ValleyMid-RhineNorthern ItalyCentral Industrial DistrictSt. PetersburgVolgaUralKuznetskEastern UkraineSilesia
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) CANADANew EnglandMiddle AtlanticMohawk ValleyPittsburgh-Lake ErieWestern Great LakesSt. 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 forceJapan – emerged as an industrial power in the 1950s/1960sChina – 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 #2Why 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 FactorsSituation 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 CARTOONDraw 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 millsSmeltersRefineries- 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, refiningExplain 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 industryOriginally 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 INDUSTRYMID – 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 inputsGoes against historical trend (why?)
23 Nucor Steel MinimillsFig : 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 MARKETSFor many, best location is closest to where the product is sold (ex. soda)- transportation costs are especially critical for these industries:1. Bulk-gaining2. Single Market3. Perishable
25 PROXIMITY TO MARKETS cont. BULK-GAINING INDUSTRYFABRICATED METALS & MACHINERYGood examples are soft drinksWhy 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 marketSee 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 MANUFACTURERSPERISHABLE PRODUCTS“ just in time products”Location to assembly plants, not markets, is most importantThink of parts makers for carsMust 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 PICTURESDraw 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))
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 factora 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 RevolutionBecomes clustered industry during the 1700s (spinning frames and mills, located near flowing water)Even more labor intensive thanREALLY clustered in LDCs (they grow cotton and have low wages)Chemical industry changes textiles but also foodscolors 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 productsGarments, carpets, home products, industrial usesMost clothing articles are produced in Asia
40 Trouser ProductionFig 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 LANDNot 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 ValleyAbility 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.
65 Where is Industry Expanding? (shift from MDCs to LDCs) ISSUE #3Where is Industry Expanding?(shift from MDCs to LDCs)
66 INTRAREGIONAL SHIFTsite and situation factors historically led to location of factories in cities (why?)Proximity to marketEasier shipping on RRsLabor supplySource of capitalModern factories - suburban or rural (why?)Availability of space/landCheaper landAccess 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 yearsThose jobs have grown by 1/6 in the S and W in same time (why?)Right to work lawsLower wagesImproved infrastructure (roads)ClimateResources (water, oil, natural gas…)Shipping lanesShift specifically towards southern and eastern EuropeDifference with U.S. - European policies that have explicitly encouraged this relocationSpain – most rapid growth (motor vehicles)
69 Figure: 11-17Title: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: 11-18Title:European Union Structural Funds.Caption:The European Union provides subsidies in regions with economic difficulties because of declining industries.
71 NEW INDUSTRIAL REGIONS LATINAMERICACENTRALEUROPE
72 ASIAChina is the world’s largest manufacturer of textiles/apparel, steel and many household product – what assets does it have?Cheap labor and enormous consumer marketOther Asian nations have removed barriers to manufacturing investment by multinationalsEx. Thailand Lowered tariff on imported vehiclesShift from self-sufficiency model to int’l tradeRich ChinaPoor China
73 Steel Production, 1980Fig 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 PauloBad 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 advantage1964 Ford Falcon
78 CENTRAL EUROPESince 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 marketsSpecifically :Hungary, Czech Republic and Poland have seen the most development
79 Why are Location Factors Changing? ISSUE #4Why 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 yearsShift 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 laborDecrease in apparel workers in U.S. and WEApparel 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 laboroutsourcing vs. vertical integrationOutsourcing’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 laborSkilled labor is usually located in traditional industrial regions3 types of post-Fordist work rules (teams, problem solving, leveling)Computer industry is good example of industry in traditional regionSome textile/apparel still exists in traditional regions too“High end” requires more skillEfforts 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 inputsEx. Parts for cars, computersJust-in-time delivery reduces money spent on wasteful inventory and size of factoryU.S. % of economy spent on inventory has decreased by 50% in last 25 yearsDell 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 JITDLabor 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.
91 11.02 By the late nineteenth century, this country had made the least progress toward industrialization:1. Russia2. France3. Germany4. Belgium5. United States
92 11.02 By the late nineteenth century, this country had made the least progress toward industrialization:1. Russia2. France3. Germany4. Belgium5. United States
93 11.03 Industrialization in the United States began in 1. California2. The Midwest3. The Middle Atlantic states4. New England5. The South
94 11.03 Industrialization in the United States began in 1. California2. The Midwest3. The Middle Atlantic states4. New England5. The South
95 11.04 Beer brewing is 1. A bulk-gaining industry 2. A bulk-reducing industry3. Unconcerned with bulk4. Distributed fairly evenly around the United States5. Unaffected by site factors
96 11.04 Beer brewing is 1. A bulk-gaining industry 2. A bulk-reducing industry3. Unconcerned with bulk4. Distributed fairly evenly around the United States5. 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 South2. Each plant focuses on only one or a few models3. Plants are located near each major metropolitan area4. Plants are more dispersed now than they were in the 1950s5. 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 South2. Each plant focuses on only one or a few models3. Plants are located near each major metropolitan area4. Plants are more dispersed now than they were in the 1950s5. American cars face little foreign competition
100 11.06 The cheapest way to transport goods over long distances is by 1. Air2. Roadway3. Rail4. Water5. None of these
101 11.06 The cheapest way to transport goods over long distances is by 1. Air2. Roadway3. Rail4. Water5. None of these
102 11.07 Which type of manufacturing requires the lowest level of skill? 1. Automobiles2. Computers3. Textiles4. Airplanes5. Consumer electronics
103 11.07 Which type of manufacturing requires the lowest level of skill? 1. Automobiles2. Computers3. Textiles4. Airplanes5. Consumer electronics
104 11.08 It is especially important for aluminum processors to locate near 1. Navigable rivers2. Cheap electricity3. Inexpensive labor4. Major metropolitan areas5. Beer breweries
105 11.08 It is especially important for aluminum processors to locate near 1. Navigable rivers2. Cheap electricity3. Inexpensive labor4. Major metropolitan areas5. Beer breweries
106 11.09 Within the United States, manufacturing has been most likely to shift in which of the following directions?1. North2. Northeast3. East4. South5. 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. North2. Northeast3. East4. South5. 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 corporations3. Leads to an increase in manufacturing jobs in less developed countries4. Is supported my most American politicians5. 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 corporations3. Leads to an increase in manufacturing jobs in less developed countries4. Is supported my most American politicians5. Is prohibited by the World Trade Organization