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CHAPTER 11. INDUSTRY. INTRO. ¾ of world’s industrial production is located in four regions: NW Europe Eastern Europe Eastern North America East Asia Each is broken down further Less than 1% of Earth’s land is devoted to industry

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CHAPTER 11

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Chapter 11

CHAPTER 11

INDUSTRY


Intro

INTRO

  • ¾ of world’s industrial production is located in four regions:

    • NW Europe

    • Eastern Europe

    • Eastern North America

    • East Asia

      • Each is broken down further

  • Less than 1% of Earth’s land is devoted to industry

  • When compared to agriculture, industry is much more clustered in space

  • 2 key factors in determining best location for a factory:

    • Where the markets for the product are located

    • Where the resources needed to make the product are located


Chapter 11

ISSUE #1

Where is Industry Distributed?


Manufacturing value added

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.


Industrial districts in europe see ki 1 worksheets

INDUSTRIAL DISTRICTS IN EUROPE(see KI#1 worksheets)

WESTERN EUROPE

EASTERN EUROPE

Central Industrial District

St. Petersburg

Volga

Ural

Kuznetsk

Eastern Ukraine

Silesia

  • UK

  • Rhine-Ruhr Valley

  • Mid-Rhine

  • Northern Italy


Manufacturing centers in western europe

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.


Manufacturing centers in eastern europe and russia

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.


Industrial districts in north america see ki 1 worksheets

INDUSTRIAL DISTRICTS IN NORTH AMERICA(see KI#1 worksheets)

U.S.

CANADA

St. Lawrence Valley-Ontario Peninsula

  • New England

  • Middle Atlantic

  • Mohawk Valley

  • Pittsburgh-Lake Erie

  • Western Great Lakes


Industrial regions of north america

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.


Industrial districts in east asia see ki 1 worksheets

INDUSTRIAL DISTRICTS IN EAST ASIA(see KI#1 worksheets)

  • Best asset is its large labor force

  • Japan – emerged as an industrial power in the 1950s/1960s

  • China – world’s 2nd largest manufacturer, largest labor force in manufacturing


Manufacturing centers in east asia

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.


Chapter 11

ISSUE #2

Why Do Industries Have Different Distributions?


Chapter 11

Industry seeks to maximize profits by limiting production costs. Companies usually face two types of geographical costs:

Situation Factors

Site Factors

(result from the unique characteristics of a location)

(involve transporting materials to and from a factory)


Situation factors

SITUATION FACTORS

IN +

1. PROXIMITY TO INPUTS

2. PROXIMITY TO MARKETS

3. TRANSPORT CHOICES


Proximity to inputs

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


Copper cartoon

COPPER CARTOON

  • Draw 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 mills

  • Smelters

  • Refineries

    - Include a brief caption explaining the location of each as it relates to the copper mine


Make arizona your copper headquarters

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.


Guidelines

GUIDELINES

  • Your commercial must:

  • Summarize each of the following processes:

    • mining, concentrating, smelting, refining

  • Explain 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 21 - email to Mr. Oswald prior to the start of class


  • Proximity to inputs steel

    PROXIMITY TO INPUTS - STEEL

    • Bulk-reducing industry

    • Originally 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


    Integrated steel mills

    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.


    U s steel industry

    U.S. STEEL INDUSTRY

    • MID – 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)


    U s steel cont

    U.S STEEL cont.

    • Many steel mills have recently closed

    • Survivors benefit from access to markets more than access to inputs

      • Goes against historical trend (why?)


    Nucor steel minimills

    Nucor Steel Minimills

    Fig. 11-10: Minimills produce steel from scrap metal, and they are distributed around the country near local markets. Nucor is the largest minimill operator.


    Proximity to markets

    PROXIMITY TO MARKETS

    • For many, best location is closest to where the product is sold (ex. soda)

      - transportation costs are especially critical for these industries:

      1. Bulk-gaining

      2. Single Market

      3. Perishable


    Proximity to markets cont

    PROXIMITY TO MARKETS cont.

    BULK-GAINING INDUSTRY

    FABRICATED METALS & MACHINERY

    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 market

    See insets on page 376

    • Good examples are soft drinks

    • Why is scotch whiskey an exception?


    Location of beer breweries

    Location of Beer Breweries

    Fig. 11-11: 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.


    Chevrolet assembly plants 1955

    Chevrolet Assembly Plants, 1955

    Fig. 11-12a: In 1955, GM assembled identical Chevrolets at ten final assembly plants located near major population centers.


    Chevrolet assembly plants 2007

    Chevrolet Assembly Plants, 2007

    Fig. 11-12b: In 2007, GM was producing a wider variety of vehicles, and production of various models was spread through the interior of the country.


    Proximity to markets cont1

    PROXIMITY TO MARKETS cont.

    SINGLE MARKET MANUFACTURERS

    PERISHABLE PRODUCTS

    Must be located near markets (think milk and Von Thunen)

    Not the case for frozen foods (cheese, butter)

    Not all perishables are food (newspaper – why?)

    • “ just in time products”

    • Location to assembly plants, not markets, is most important

    • Think of parts makers for cars


    Motor vehicle parts plants

    Motor Vehicle Parts Plants

    Fig. 11-13: 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.


    Ship rail truck or air you are responsible for this section up to site factors on your own

    SHIP, RAIL, TRUCK OR AIR?You are responsible for this section (up to Site Factors) on your own


    Pictures

    PICTURES

    • Draw 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))


    Site factors

    SITE FACTORS

    L

    A

    N

    D

    CAPITAL


    Labor

    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 factor

    a lot of hard work does not always mean high pay


    Labor cont

    LABOR cont.

    TEXTILE & APPAREL SPINNING

    TEXTILE & APPAREL WEAVING

    Even more labor intensive than

    REALLY clustered in LDCs (they grow cotton and have low wages)

    Chemical industry changes textiles but also foods

    colors for clothing and preservation/canning for food

    • Labor intensive; low wage (highly clustered in LDCs – see p.381)

    • Spinsters and cottage industry before the Industrial Revolution

    • Becomes clustered industry during the 1700s (spinning frames and mills, located near flowing water)


    Cotton yarn production

    Cotton Yarn Production

    Fig. 11-14a: Production of cotton yarn from fiber is clustered in major cotton growing countries, including the U.S., China, India, Pakistan, and Russia.


    Distribution of cotton yarn production

    Distribution of Cotton Yarn Production

    Fig. 11-14b: Three-quarters of cotton yarn is produced in less developed countries.


    Woven cotton fabric production

    Woven Cotton Fabric Production

    Fig. 11-15a: 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.


    Labor cont1

    LABOR cont.

    TEXTILE & APPAREL ASSEMBLY

    • Textiles are assembled into 4 main products

      • Garments, carpets, home products, industrial uses

    • Most clothing articles are produced in Asia


    Trouser production

    Trouser Production

    Fig. 11-16a: 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.


    Distribution of trouser production

    Distribution of Trouser Production

    Fig. 11-16b: The majority of trouser production is in MDCs, near customers.


    Chapter 11

    LAND

    • Not 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)


    Land cont

    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)


    Capital

    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 Valley

    • Ability to borrow has become increasingly important in LDCs


    Chapter 11

    1. An industry in which a large percentage of wages and benefits goes to employees is a _________________ type of industry.


    Chapter 11

    LABOR INTENSIVE


    Chapter 11

    2. TEXTILE AND APPAREL INDUSTRY ACCOUNTS FOR _____ % OF WORLD MANUFACTURING EMPLOYMENT.


    Chapter 11

    14%


    Chapter 11

    3. BECAUSE IT IS LABOR INTENSIVE SPINNING IS DONE MOSTLY IN _____

    (MDCs or LDCs)


    Chapter 11

    LDCs


    Chapter 11

    4. WHAT COUNTRY IS REPSONSIBLE FOR THE LARGEST PERCENTAGE OF THE WORLD’S COTTON THREAD AND WHAT IS THAT PERCENTAGE?


    Chapter 11

    CHINA and 46%


    Chapter 11

    5. TRUE/FALSE: ALMOST ALL SYNTHETIC FIBERS ARE NOW PRODUCED IN MDCs DUE TO THE TECHNOLOGY NEEDED TO PRODUCE THEM


    Chapter 11

    FALSE, IT’S ABOUT 50/50 BETWEEN MDCs AND LDCs


    Chapter 11

    6. TRUE/FALSE – WEAVING IS EVEN MORE LABOR INTENSIVE THAN SPINNING


    Chapter 11

    TRUE


    Chapter 11

    7. WHAT PERCENTAGE OF THE WORLD’S WOVEN COTTON IS PRODUCED IN LDCs?


    Chapter 11

    86%


    Chapter 11

    8. What two countries account for the largest percentage of the world’s woven cotton and what is that combined percentage?


    Chapter 11

    CHINA (47%) AND INDIA (27%)

    74%


    Chapter 11

    9. LIST THE FOUR MAIN TYPES OF PRODUCTS INTO WHICH TEXTILES ARE ASSEMBLED.


    Chapter 11

    GARMENTS, CARPETS, HOME PRODUCTS, INDUSTRIAL USES


    Chapter 11

    10. TRUE/FALSE - THE RECENT TREND FOR WOOL PRODUCTION IS THAT MORE AND MORE IS BEING PRODUCED IN NORTH AMERICA AND EUROPE THAN IN ASIA


    Chapter 11

    FALSE, JUST THE OPPOSITE


    Chapter 11

    ISSUE #3

    Where is Industry Expanding?

    (shift from MDCs to LDCs)


    Intraregional shift

    INTRAREGIONAL SHIFT

    • site and situation factors historically led to location of factories in cities (why?)

      • Proximity to market

      • Easier shipping on RRs

      • Labor supply

      • Source of capital

    • Modern factories - suburban or rural (why?)

      • Availability of space/land

      • Cheaper land

      • Access to highways more important than RRs


    Interregional shift

    INTERREGIONAL SHIFT

    • U.S. – manufacturing has shifted south and west

    • Western Europe – shift towards “economically distressed peripheral areas” (southern and eastern Europe)


    Interregional cont

    INTERREGIONAL cont.

    SOUTHERN & WESTERN U.S.

    WESTERN EUROPE

    Shift specifically towards southern and eastern Europe

    Difference with U.S. - European policies that have explicitly encouraged this relocation

    Spain – most rapid growth (motor vehicles)

    • NE – has lost 1 million manufacturing jobs in past 30 years

    • Those jobs have grown by 1/6 in the S and W in same time (why?)

      • Right to work laws

      • Lower wages

      • Improved infrastructure (roads)

      • Climate

      • Resources (water, oil, natural gas…)

      • Shipping lanes


    New industrial regions

    NEW INDUSTRIAL REGIONS

    A

    S

    I

    A

    LATIN

    AMERICA

    CENTRAL

    EUROPE


    Chapter 11

    ASIA

    • China is the world’s largest manufacturer of textiles/apparel, steel and many household product – what assets does it have?

      • Cheap labor and enormous consumer market

    • Other Asian nations have removed barriers to manufacturing investment by multinationals

      • Ex. Thailand Lowered tariff on imported vehicles

      • Shift from self-sufficiency model to int’l trade

    Rich China

    Poor China


    Steel production 1980

    Steel Production, 1980

    Fig. 11-19a: The U.S., Soviet Union, and Japan were the largest steel producers in 1980.


    World steel production 2005

    World Steel Production, 2005

    Fig. 11-19b: By 2005, steel production had increased in developing countries but declined in the more developed countries.


    Distribution of steel production 1980 2005

    Distribution of Steel Production1980 & 2005

    Fig. 11-20: Developed countries accounted for 80% of world production in 1980 but only 45% in 2005. LDCs increased from 20% to 55%. China is now the world’s largest producer.


    Shanghai steel factory

    Shanghai Steel Factory

    The Baoshan Iron Steel Company in Shanghai, China


    Latin america

    LATIN AMERICA

    • Mexico and Brazil are region’s leading manufacturers

      • Clustered in Mexico City & Sao Paulo

    • Bad 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 advantage

    1964 Ford Falcon


    Central europe

    CENTRAL EUROPE

    • Since 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 markets

      • Specifically :Hungary, Czech Republic and Poland have seen the most development


    Chapter 11

    ISSUE #4

    Why are Location Factors Changing?

    (attraction of new regions and renewed attraction of traditional regions)


    Attraction of new industrial regions proximity to low cost labor

    ATTRACTION OF NEW INDUSTRIAL REGIONS:PROXIMITY TO LOW-COST LABOR

    • Labor is the site factor that is changing very dramatically in recent years

    • Shift 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 labor

      • Decrease in apparel workers in U.S. and WE

      • Apparel imports in U.S. have increased (from Latin America, China, other Asian nations)


    Sock hosiery manufacturing

    Sock & Hosiery Manufacturing

    Fig. 11-21: 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.


    Labor cost per hour mdcs and ldcs

    Labor Cost per HourMDCs and LDCs

    Fig. 11-22: Hourly wages can be under $1 in many LDCs compared to well over $10 in many MDCs.


    U s clothing production 1994 2005

    U.S. Clothing Production1994 - 2005

    Fig. 11-23: The percent of U.S. made clothing has declined sharply since the 1990s while imports have increased.


    Outsourcing

    OUTSOURCING

    • Transnationals in particular seek cheaper labor

      • Role of new international division of labor

    • outsourcing vs. vertical integration

    • Outsourcing’s impact on the distribution of manufacturing


    Renewed interest in traditional regions proximity to skilled labor

    RENEWED INTEREST IN TRADITIONAL REGIONS: PROXIMITY TO SKILLED LABOR

    • Switch from Fordist to post-Fordist has increased need for more skilled labor

      • Skilled labor is usually located in traditional industrial regions

      • 3 types of post-Fordist work rules (teams, problem solving, leveling)

    • Computer industry is good example of industry in traditional region

    • Some textile/apparel still exists in traditional regions too

      • “High end” requires more skill

      • Efforts to attract jobs to traditional states in U.S. (startup NY commercial)


    Computing equipment manufacture

    Computing Equipment Manufacture

    Fig. 11-24: High skill workers are needed for manufacture of computing equipment. California, the Northeast, and Texas are the major sites.


    Women s and girls apparel

    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.


    Just in time delivery

    JUST-IN-TIME DELIVERY

    • This is especially important for delivery of inputs

      • Ex. Parts for cars, computers

    • Just-in-time delivery reduces money spent on wasteful inventory and size of factory

      • U.S. % of economy spent on inventory has decreased by 50% in last 25 years

      • Dell 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 JITD

      • Labor unrest

      • “acts of God” (weather, acts of terror)


    Fedex sorting and loading

    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.


    Chapter 11 review

    Chapter 11 REVIEW


    Chapter 11

    11.02 By the late nineteenth century, this country had made the least progress toward industrialization:

    1. Russia

    2. France

    3. Germany

    4. Belgium

    5. United States


    Chapter 11

    11.02 By the late nineteenth century, this country had made the least progress toward industrialization:

    1. Russia

    2. France

    3. Germany

    4. Belgium

    5. United States


    Chapter 11

    11.03 Industrialization in the United States began in

    1. California

    2. The Midwest

    3. The Middle Atlantic states

    4. New England

    5. The South


    Chapter 11

    11.03 Industrialization in the United States began in

    1. California

    2. The Midwest

    3. The Middle Atlantic states

    4. New England

    5. The South


    Chapter 11

    11.04 Beer brewing is

    1. A bulk-gaining industry

    2. A bulk-reducing industry

    3. Unconcerned with bulk

    4. Distributed fairly evenly around the United States

    5. Unaffected by site factors


    Chapter 11

    11.04 Beer brewing is

    1. A bulk-gaining industry

    2. A bulk-reducing industry

    3. Unconcerned with bulk

    4. Distributed fairly evenly around the United States

    5. Unaffected by site factors


    Chapter 11

    11.05 Which of the following statements about the manufacture of American cars is true?

    1. There are relatively few plants in the South

    2. Each plant focuses on only one or a few models

    3. Plants are located near each major metropolitan area

    4. Plants are more dispersed now than they were in the 1950s

    5. American cars face little foreign competition


    Chapter 11

    11.05 Which of the following statements about the manufacture of American cars is true?

    1. There are relatively few plants in the South

    2. Each plant focuses on only one or a few models

    3. Plants are located near each major metropolitan area

    4. Plants are more dispersed now than they were in the 1950s

    5. American cars face little foreign competition


    Chapter 11

    11.06 The cheapest way to transport goods over long distances is by

    1. Air

    2. Roadway

    3. Rail

    4. Water

    5. None of these


    Chapter 11

    11.06 The cheapest way to transport goods over long distances is by

    1. Air

    2. Roadway

    3. Rail

    4. Water

    5. None of these


    Chapter 11

    11.07 Which type of manufacturing requires the lowest level of skill?

    1. Automobiles

    2. Computers

    3. Textiles

    4. Airplanes

    5. Consumer electronics


    Chapter 11

    11.07 Which type of manufacturing requires the lowest level of skill?

    1. Automobiles

    2. Computers

    3. Textiles

    4. Airplanes

    5. Consumer electronics


    Chapter 11

    11.08 It is especially important for aluminum processors to locate near

    1. Navigable rivers

    2. Cheap electricity

    3. Inexpensive labor

    4. Major metropolitan areas

    5. Beer breweries


    Chapter 11

    11.08 It is especially important for aluminum processors to locate near

    1. Navigable rivers

    2. Cheap electricity

    3. Inexpensive labor

    4. Major metropolitan areas

    5. Beer breweries


    Chapter 11

    11.09 Within the United States, manufacturing has been most likely to shift in which of the following directions?

    1. North

    2. Northeast

    3. East

    4. South

    5. Manufacturing has tended to stay in the Midwest and Northeast


    Chapter 11

    11.09 Within the United States, manufacturing has been most likely to shift in which of the following directions?

    1. North

    2. Northeast

    3. East

    4. South

    5. Manufacturing has tended to stay in the Midwest and Northeast


    Chapter 11

    11.10 Outsourcing

    1. Is one aspect of vertical integration

    2. Has not yet become important for transnational corporations

    3. Leads to an increase in manufacturing jobs in less developed countries

    4. Is supported my most American politicians

    5. Is prohibited by the World Trade Organization


    Chapter 11

    11.10 Outsourcing

    1. Is one aspect of vertical integration

    2. Has not yet become important for transnational corporations

    3. Leads to an increase in manufacturing jobs in less developed countries

    4. Is supported my most American politicians

    5. Is prohibited by the World Trade Organization


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