1. Key Issue #2: “Why Do Industries Have Different Distributions?”
Industrialization
Key Issue #2: “Why Do Industries Have Different Distributions?”

2. It’s All About PROFIT
Industry seeks to maximize profits by minimizing production cost
Geographers try to explain why one location may provide more profit than another
Two geographical costs:
Situation – transporting materials
Site – land, labor, and capital

3. Situation Factors
Definition – transporting materials to and from the factory
Objective – minimize the costs
For some companies, this is the most important factor in choosing a location

4. If you were building a car manufacturing plant in the U. S
If you were building a car manufacturing plant in the U.S., where would you locate it?

5. Proximity to Inputs
Every industry needs either resources from the physical environment or parts/materials made by another company
Weight of the material is a factor for choosing location

6. Example: Copper Industry
First Step: Mining the copper ore
Gangue
Bulk-reducing Industry
Concentration mills must be near mines
Purified copper is then treated at refineries
Source of energy

7. Example 2: Steel Industry
Also a bulk-reducing industry
Choose location to minimize the cost of transporting inputs
Steel is an alloy of iron that is produced by removing impurities in iron

8. Origin of Steel Industry
Productions was small until the Industrial Revolution
The constant heating and cooling of steel required strength, skill and a lot of time
The Watt Steam Engine

9. More advances in the steel industry
Henry Cort
Puddling – reheating iron until pasty, then stirring it with iron rods until impurities are burned off
Rolling – passing iron between rollers to remove remaining scum
Abraham Darby – produced high quality iron smelted with purified carbon made from coal, known as coke
Result – the iron industry needed to be near coalfields

10. U.S. Steel Industry
In the mid 19th Century – the U.S. steel industry was concentrated around Pittsburgh
In the first half of the 20th Century – steel mills were built near the coast
Baltimore, L.A., Trenton

11. Changing U.S. Steel Industry
Recently, many steel plants have closed
Survivors – southern Lake Michigan, East Coast
Successful steel mills are located close to markets
Mini-mills

12. Proximity to Markets
Transporting goods to consumers is an important locational factor for three industries:
Bulk-gaining
Single market
Perishable

13. Bulk Gaining Industries
Gain weight during production
Example: soft drink bottling
Coca-Cola has bottling plants all over

14. Fabricated Metals and Machinery
This is a prominent example of a bulk gaining industry
A fabricated-metals factory brings together parts to make a more complex product
Examples: TVs, refrigerators, air conditioners, and cars

15. Location of Car Manufacturing
Historically – near large markets
Recently – assembly plants focus on producing a single model rather than locating near all large markets

16. The Ford Plant in ATL (#6) has closed

17. Single Market Manufacturers
Products are sold primarily in one location, so they cluster near the market
Example: the manufacturers of automobile parts only sell to a couple of customers (GM, Toyota)
Parts makers ship their products directly to assembly plants
“auto alley”

18. Perishable Products Products must be delivered to consumers ASAP!
milkshed

19. Ship, Rail, Truck, or Air Trucks – used for short distance
Trains – longer distances
Water – if available, is attractive for long distances
Air – the most expensive, but more firms are using the air for speedy delivery

20. Break-of-Bulk Points
Cost rises each time inputs are transferred from one mode to another
Sometimes – the cost for one mode is lower for inputs and expensive for products, so companies locate at a “break-of-bulk” point where transfer among transportation modes is possible
Seaport, airport

21. Site Factors Definition = the unique characteristics of a location
Land, labor, and capital are the three traditional production factors that vary among locations
The most important site factor on a global scale = labor
Minimizing labor cost is VERY important for some industries

22. Labor
Labor-intensive industry – one in which labor is a high percentage of expense
Some need highly skilled, expensive labor
Labor intensive is not the same as “high-wage”
Textile and clothing industries – require less skilled, low cost workers
3 steps: spinning, weaving, and cutting/sewing
All are labor intensive, but not equally so resulting in global distributions that are not identical

23. Textile and Apparel Spinning
Because it is labor intensive, it is located in low-wage countries (PINGs)
PINGs account for ¾ of the world’s spinning production
Located where cotton is grown
The U.S. is the only PED that is a major thread producer
Synthetic fibers – ½ is grown in PINGs

24. Textile and Apparel Weaving
Labor is even more intensive
Especially highly concentrated in low-wage countries: 86% of the world’s woven cotton factory is produced in PINGs
China accounts for ½ of production
India accounts for ¼ of production

25. Textile and Apparel Assembly
Textiles are assembled into four main types of products
Garments
Carpets
Home products
Industrial uses
Most of the 80 billion articles or clothing sold worldwide is made in Asia
3/4 of shirts
½ of dresses and suits
Most of the underwear and lingerie
Europeans and North Americans produce woolens

26. Land Most efficient – one story building = more land
Land is cheaper in suburban or rural areas than in the city
Industries are attracted to energy sources, low electrical rates, and amenities at the site

27. Capital
Manufacturers typically borrow funds to establish new factories or expand existing ones
Silicon Valley – capital
Financial incentives
The ability to borrow money in PINGs