Global Production Collision

Racing through the parking lot at work, I carry out my ritual of counting import versus domestic cars.  Like the Olympics, I hope that the home team would win.  During my ritual, domestic cars often lose to their foreign competitors in the number of cars. However, it would be difficult to identify what an American product is because of the transformation of the world due to globalization.

In June, the Dow Jones Industrial Average sank into the red for the year after a dismal U.S. job report. Stocks globally have been on a downward spiral since the beginning of May due to worries about Europe’s debt troubles and China’s economic engine which has begun to stall.  Many people hope that companies like General Motors can jumpstart the American economy.  

Like Detroit, Knoxville would embrace the return of the manufacturing industry.  According to a recent Brookings Institute report, “Locating American Manufacturing: Trends in the Geography of Production,” manufacturing jobs in the Knoxville Metropolitan area increased 9.9% from 2010 to 2011. 

In fact, this manufacturing gain was more than 3 times the national average, ranking Knoxville 6th in the nation.  However, many globalization critics argue that weak international trade agreements destroy manufacturing jobs in developed countries like the United States.  The net results are American businesses move operations to countries with cheaper labor.  

Charles Hills, author of International Business, argues, “In the past few years, the same fears have been applied to services, which have increasingly been outsourced to nations with lower labor costs.” Most businesses attempt to stimulate growth through a variety of efforts, including technology investments, acquisitions, and major market campaigns. Companies hope that customers will purchase their products and services due to the value component. 

Robert Jacobs, Richard Chase, and Nicholas Aquilano, authors of Operations & Supply Management remark, “Companies today have found how essential great operations and supply management are to the success of the firm.” 

However, globalization has further linked the financial welfare of each country’s constituents.  In May of 2012, HP announced it would slash more than 27,000 jobs, which is 8% of its worldwide workforce by 2014 in hopes of saving billions of dollars against fierce competition.  

It is the largest restructuring campaign in HP’s 73 year old history. At the time, former HP CEO Meg Whitman stated restructuring was “absolutely critical for the long-term success of the company.”  The downsizing of HP’s workforce was the third largest in tech history.  However, other high tech companies have also been impacted.  IBM downsized 60,000 jobs and AT&T downsized 40,000 employees in the mid-90s. 

At the same time of dealing with global production, each country seeks to increase exports of goods while spearheading job creation in their own markets.

With globalization upon us, can domestic products be considered American when some components are made abroad? Please share your opinion on this topic. 

© 2012 by Daryl D. Green

2012 and the Brink of Destruction: Answering the Sustainability Question for America

 While on vacation on the Gulf of Mexico, I decided to take an early morning swim alone. I marveled at the white sand and the tranquility of my surroundings. However, I did not see the danger.  Several days earlier I had walked out to a sand bar several yards away from the shore.  That day I found myself being adventurous by going further out.  I swam to the side of the sand bar and found myself in danger.  Luckily, an experienced swimmer saved me that day. Likewise, America is in danger…but some don’t know it.

Global trends make sustainability a difficult objective for most organizations. The year 2011 was a vintage time for massive protesters, from the awakening of the Arab world to the defeat of evil tyrants. Europe struggled to maintain financial stability while country after country faltered.  Japan suffered its biggest nuclear catastrophe. 

Even a Super Power like America has not been exempted from this financial crisis. The United States economy struggles along with its 15 trillion dollar national debt and a 9% unemployment rate choking the country.  With political gridlock happening on a regular basis, members of Congress, President Obama, media outlets, and frustrated constituents worry about the plight about the country.  Standard & Poor’s downgrading of America’s AAA rating for the first time in history was a quick wake up call to everyone. 

 Last year, big financial institutions such as Bank of America and JP Morgan Chase & Company announced that approximately 75,000 employees would be laid off.  Political groups, like the Tea Party Movement, attempted to challenge the political establishment with a return to fiscal responsibility of America’s debt.  Occupy Wall Street protesters attacked corporate greed and corruption as the catalysis for income inequity and employment opportunities.

Sustainability is important but often difficult to define. The U.S. Environmental Protection Agency defines the term as “everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment.”  One simple definition is the ability to use resources continuously without any long-term depletion.  There aren’t many things that are possible to be sustained without proper planning.

Discuss the ramifications of any negative consequences. 

© 2012 by Daryl D. Green