The traditional response of labour to the relocation of production was to organize the unorganized in low-wage areas sought out by capital, and national organizations and labour federations developed within this context - a national one, where there was a high level of linguistic and cultural homogeneity. But rapid technological advances in communications and transportation have given Western and Japanese capitalism a new lease on life, making it easier to transfer production outside national boundries and much harder for unions with the necessary resources to follow to organize the unorganized and unite in common organizations with workers speaking the same language and sharing the same culture.
The article tries to put a brave face on the picture for American workers, by declaring: "Globalization: It's Not Just Wages", and suggesting that that workers in Clyde, Ohio, are also benefiting from Whirlpool's worldwide operations. But, as the account of Whirlpool's Ohio plant indicates, such cases are still typically about wages, except in the declining number of instances where the same skills are unavailable abroad. Unemployment is slowed only where American, Japanese, and West European workers are willing to accept job,wage and benefit cuts to offset the higher shipping costs of supplying their developed home markets from far-flung branch plants.
MG --------------------------------------- Globalization: It's Not Just Wages By LOUIS UCHITELLE New York Times June 17, 2005
BENTON HARBOR, Mich. - Who is the biggest exporter of German-made washing machines to the United States? Not Miele or Bosch-Siemens, or any other German manufacturer. It is the American appliance maker, Whirlpool, the company proudly reports.
Never mind the higher labor cost - $32 an hour, including benefits, versus $23 in the United States. The necessary technology existed in Germany when Whirlpool decided to sell front-loading washers to Americans. So did a trained work force and a Whirlpool factory already making a European version of the front loader.
"We were able to expand the capacity in Germany at a very incremental investment," said Jeff M. Fettig, Whirlpool's chairman and chief executive. "It was the fastest way to the American market."
Globalization is often viewed as a rootless process of constantly moving jobs to low-wage countries. But the issue is more complex, as illustrated by Whirlpool's worldwide operations. What attracts Mr. Fettig and other chief executives is a relatively new form of globalization that emphasizes first-rate centers of production and design in various countries - including the United States.
Whirlpool's global network, a work in progress, includes microwave ovens engineered in Sweden and made in China for American consumers; stoves designed in America and made in Tulsa, Okla., for American consumers; refrigerators assembled in Brazil and exported to Europe; and top-loading washers made at a sprawling factory in Clyde, Ohio, for American consumers, although some are sold in Mexico.
"The really sophisticated multinationals," said Diana Farrell, director of the Global Institute at McKinsey & Company, the management consulting firm, "are taking advantage of the different locations in their global networks without worrying about whether they also sell in the countries where they produce."
The advantage of Whirlpool's approach to globalization is that it allows the company to put the earnings of overseas affiliates to their best use anywhere in the world, Ms. Farrell argues. The larger consequence, she adds, is that parent companies "invest in new technologies and business opportunities that will eventually create new jobs at home and abroad."
At the moment, the job growth and the expansion are mainly abroad. As its turns out, more than 40 percent of the nation's imports are from the overseas subsidiaries of American companies, contributing to the lopsided trade deficit, but also making companies more competitive. Whirlpool is a typical example: its employment in the United States has not risen in years while it has tripled abroad.
The "global production footprints," as Ms. Farrell calls them, draw on a growing network of first-rate suppliers in Mexico, China and elsewhere that allow manufacturers to go beyond mere assembly overseas into complex production. And the investment, once made, becomes an anchor; a sunk cost, as economists put it.
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Maytag, in a statement, said that it, too, has now resorted to globalization to get back into the game. The newest model "is made in South Korea through a technology and manufacturing partnership with Samsung," Maytag said.
Whirlpool's executives take issue with analysts who declare that low foreign wages, particularly in China and elsewhere in Asia, combined with generous subsidies from those countries, will keep the global production networks mobile. Company executives say the manpower required to make its appliances is declining, diluting the drawing power of lower wages. One hour of labor, for example, goes into each of the 20,000 top-loaders coming off the line daily at Clyde, down from 2.5 hours five years ago.
"We may pay $23 an hour in Clyde, including benefits, versus $3 in Mexico versus $1 in China," Mr. Fettig said. "But for one hour of labor, the difference won't begin to cover the shipping costs, let alone the investment it would take to build a new factory in Mexico or a new factory in China."
The Clyde factory, which employs 2,000 people, is billed as a jewel in Whirlpool's production network - an efficient, partly automated operation whose experienced workers possess a "tribal knowledge" of their product that pays off in quality and cost saving. But if the Clyde factory did not already exist, Mr. Fettig would not put it there. "I'd probably put it in Mexico," he said.
Whirlpool's total of 23,000 employees in this country has not changed in a decade, while the overseas work force has tripled, to 45,000. Yet, American consumers, not foreigners, account for two-thirds of Whirlpool's annual revenue, which was $13.2 billion last year, up from $10.3 billion in 2000.
Full:http://www.nytimes.com/2005/06/17/business/worldbusiness/17whirlpool.html?th&emc=th