1. Key Issue #3: “Where is industry expanding?”
Industrialization
Key Issue #3: “Where is industry expanding?”

2. Changing Distributions Within PEDs
Intraregional Shifts in Manufacturing:
Historically – factories located inside cities
Situation – proximity to market
Site – lots of labor and sources for capital
Increasing Site Problem – obtaining enough land for manufacturing

3. Where could you locate this factory for maximum profit?

4. Modern Factories Likely to be suburban or rural
Require large tracts of land
Land is cheaper outside of a city
Location near highways is more important than railways
Factories cluster in industrial parks near suburban highway junctions
Where is this GM plant located?

5. Interregional Shifts in Manufacturing
Manufacturing has shifted towards the South and West in the United States
In Western Europe, governments have encouraged relocation toward economically distressed areas
Result = the distribution of manufacturing is less clustered

6. Southern and Western U.S.
The NE U.S. has lost 1 million manufacturing jobs in the last few decades
Manufacturing jobs have grown by 1/6 in the South and West since the early 70’s

7. Right-to-work laws
A right-to-work law requires a factory to maintain a so-called “open shop” and prohibits a “closed shop”
A “closed shop” = a company and union agree that everyone must join the union in order to work
Southern states have made it difficult for unions to organize workers, collect dues, and bargain with employers

8. A “closed shop” – Workers in the Garment Industry Strike

9. Manufacturing in the South
Steel, textiles, tobacco products, and furniture industries are scattered across the South
The Gulf Coast has become an important industrial leader because of oil and natural gas
Katrina threatened oil supply by cutting power to the refineries in Mississippi

10. Colonial Pipeline brings oil and natural gas to the South

11. Manufacturing in the West
Completion of the LA harbor (1910) and Panama Canal (1914) allowed the West Coast to open up to processing
LA is the country’s leading producer of textiles and second largest of furniture and food processing
A large pool of unorganized workers has been assembled in LA through immigration, especially from Mexico and Asia

12. Interregional Shifts in Western Europe
Manufacturing has diffused from traditional centers in NW Europe to southern and eastern Europe
European governments have explicitly encouraged this industrial relocation
Western Europeans used incentives to lure industry into poorer regions
The EU assists in lagging regions
Spain

13. New Industrial Regions
Example – Steel: In 1980, 80% of the world’s steel was produced in PED
In 2005, just 45% is produced in PEDs
China = the world’s largest steel producer

14. China Chinese Population = 1,343,239,923 (2012)
The largest manufacturer of textiles, steel, and household products
Two principal assets:
Largest supply of low-cost labor
The world’s largest market
Chinese Population = 1,343,239,923 (2012)

15. Other Asian Countries
Thailand – set a 120% tariff on imported vehicles in 1974; lowered to 20% in the 90s
India – liberalization program in 1991 eliminated many restrictions on foreign investment

16. Latin America
Mexico and Brazil are the two leading industrial centers in Latin America
Manufacturing is clustered in the largest city: Mexico City and Sao Paulo – proximity to the major market
North American Free Trade Agreement (NAFTA) – eliminated restrictions on trade
Average wage = $400 per month

17. “Central” Europe
Poland, Czech Republic, and Hungary have had the most industrial growth
Central Europe offers two assets:
Labor
Market proximity