Factory closures

Plant shutdowns
Industrial failures
Insolvency in industry
Relocation of industries

Incidence

In many countries the closure of industrial plant is being debated. This is the case in Europe for the automobile industry. "Competition has destroyed us" say the entrepreneurs. There is no market for cars, say the economists. The workers say that the factories are being transferred to the third world. The entrepreneurs say this not so. The Thompson factory making RCA Victor televisions and other types of household appliances in the mid-west of the United States has said that it will be closing its factories from 1998 and setting up an assembly plant in Ciudad Juarez in Mexico, because they could not compete with Mexican wage levels. The levels of wages and social benefits attained by Thompson workers in middle America are possibly among the highest in the United States and in the world. This is a skilled, permanent and relatively old tabour force (average of 18 years at the factory), almost entirely "white North American" and male, details of race and gender which it is not superfluous to mention since lower wages generally coincide with a change in the ethnic composition and gender of the tabour force.

Something very similar is occurring with environmental costs. There are countries in Europe, the United States, Canada and other developed countries that have established stringent environmental regulations in the last thirty years, mainly as result of the action of "green" movements and a new environmental culture giving priority emphasis to "conservation", even above "production". In many of these States forestry, for example, is strictly controlled and the environmental costs to enterprises are very high, since they must replace the trees they cut down, are prohibited from felling certain species, etc. Delocation of these activities to countries without much environmental control has proceeded persistently in recent years, with drastic environmental consequences in the countries at the periphery. Mass deforestation in the Amazon jungle, eastern Asia and many other parts of the world originates in this practice.

Claim

There is, lamentably, a strong and dominant tendency for international capital to try to relocate to places where there are low wages, low conditions of social security, and low additional operating costs for businesses, in which levels of environmental protection are decisive. It should be added that financial capital will also lodge in those countries or places which offer and deliver greater speculative flexibility. Thus, in crude but very realistic terms, there would appear to be two means of insertion into the world in the process of globalization: offering the best market conditions or stating demands. rowing In the first case attractive sympathy can be expected from the corporations which will see better conditions for gains and in the second case much tougher negotiations will be needed and will probably not meet with indulgement from the corporations, especially from their often invasive and powerful bureaucracies, that dominate international decisions of this type.