Globalization: It is not just wages:

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Globalization It is not just wages

• What 3 types of washing machines are discussed in
  the article? Where is each produced?
• high-end front-loaders Schorndorf, Germany
• low-end front-loaders Mexico
• Top-loaders Clyde, OH (US)
• What relative productivities would give Mexico a
  ULC-based competitive advantage over the US and
  China?
• Wages are 32 (DE), 23 (US), 3 (MX), and 1 (CN)
• US prody cannot be more than 23/3 7.7 times
  mexicos prody to give Mexico ULC adv.
• It must be 3/1 3 times more productive than
  China.

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• 3. What type of factor are the workers in
  Schorndorf and Benton Harbor?
• Advanced because requires investment (1 year to
  obtain skills), specific to washing machine
  industry
• ? Type IV
• 4. What gives PLeOS to the Benton Harbor parts
  factory?
• 30 employees repair machinery, 4-year
  200,000 apprenticeships

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• 5. How is production of washing machines in
  Mexico different from production in Germany?
• doesnt use advanced automated machinery
• ? more labour-intensive
• 6. How do trade costs influence the decision of
  where to produce washing machines?
• 50 transatlantic freight costs were too high for
  the low-end washing machines.
• Location of parts suppliers plays a big role
  Clyde 4 hrs from BH parts factory

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Where Americans get their washing machines?