Changing Geography of Production

From West to East, Center to Periphery

Integration and Industrial Restructuring

With integration, capital (search for market and surplus value) has internationalized Political integration as a tool for globalization and

protection from it Production has shifted to locations with more

favorable ‘environment’• Former Eastern European Countries: Fordist, HVP• Non- and De-industrialized periphery: Ireland, Spain,

Wales• Increasing specialization in Western Europe: biotech, IT

and aerospace

Enlarged Union = Enlarged Economies of Scale

High Volume Production: Automobiles Europe retains HVP through eastward

enlargement of EU Fiat and Daewoo in Poland & Romania Suzuki, Ford, VW-Audi and GM in Hungary

National governments welcomed generation economic development ‘shock therapy’ into capitalist markets Injection of Japanese, German and American

investment (capital, technology) & expertise Auto manufacturers welcomed lower labor costs,

EU incentives and open borders of the EU http://www.wbresearch.com/AutoceeSiteVisits/fiat.html

Friday, February 4, 2005Hungary Suzuki unit to boost output in 2005/2006Reuters 

ESZTERGOM, Hungary - The Hungarian unit of Japanese car maker Suzuki Motor Corp. said on Friday it would increase output to 150,000 units in 2005 from 95,000 last year. Next year, Suzuki, which employs 2,700 people, plans to produce 200,000 cars at its Hungarian plant in Esztergom, north of Budapest, where it has been increasing capacity. "Including the suppliers, Suzuki gives jobs to some 30,000 people," Prime Minister Ferenc Gyurcsany told journalists after Suzuki launched the production of its new Suzuki Swift model. Suzuki, one of the biggest foreign investors in Hungary, said it expected sales revenues to total 300 billion forints ($1.59 billion) this year. The company last year invested 60 billion forints in Hungary and increased its annual production capacity to 200,000 units from 90,000 units previously, and plans further investments worth 50 billion forints this year. Suzuki sold 100,292 cars in Hungary last year, up from 89,952 in 2003, and has by far

the biggest slice of the Hungarian car market.

Refocusing the Center SME (Small and Medium sized

Enterprises) Rise of highly specialized clusters in Old

Core of European Economy• Sub-contractors to larger firms• More flexible

• More responsive to changes in demand and supply• More innovative through intense competition

• ‘Knowledge-based’ communities and economic networks

• E.g. Formula One Racing Production Facilities in Southeast England