Chapter 11 Key Issue 4

Attraction of New Industrial Regions

Manufacturers are moving to places where wages are lower than in traditional industrial regions
to minimize labor costs.

Proximity to low cost labor

The textile industry has been prominent in opening production in low wage locations while
shutting production in high wage locations.

The US textile industry is concentrated in the northeast.

Prevailing wage rates were much lower in the Southeast than in the Northeast.

While Southeastern labor was still cheap, it was expensive on world standards

Outsourcing

Transnational corporations still find profit in work from less developed countries despite
transportation costs

The selective transfer of some jobs to less developed countries is known as the new international
division of labor

Outsourcing contrasts with the approach typical of traditional mass production called vertical
integration, in which a company controls all phases of a highly complex process.

Renewed Attraction of Traditional Industrial Regions

The Fordist approach is mass production

In recent years, factories have adopted new work rules, known as a lean or flexible production

Three Types of Rules

1. Teams
2. Problem Solving
3. Leveling

Just In Time Delivery

In recent years, the importance of delivery to arrive on time moments before they are needed has
risen. This reduces money and it must be located nearby.