Re: All depends on the cost of American workers. At present, with Chinese labour a fraction of the cost of US, there's no incentive for them to do so.
C'mon! Such a simplistic viewpoint of yours... There are other criteria that will compel Chinese corporations to shift part of their production towards the US --such as access to US consumers, marketing know-how that only US retailers can provide, patents and technologies owned by US corporations, etc. And, last but not least, the need for China to behave as a responsible player in the global division of labor: if all the "good jobs" are farmed out to China, if the US middle class is dried up then... WHO's gonna buy all those China wares???
Below is a case study that signally illustrates my point:
JUNE 7, 2004 • Editions: N. America | Europe | Asia | Edition
EUROPEAN BUSINESS
Toyota's New Traction In Europe
Stylish models and an innovative, superefficient factory have Renault, Fiat, and other locals worried
It's Monday afternoon inside Toyota Motor Corp.'s Valenciennes plant in northern France, where workers turn and bend swiftly over the assembly line to meet demanding hourly production targets. Red neon numbers mounted high above the river of moving cars blink steadily, comparing the rate of completed autos with the company's goal. Demand for the Yaris subcompacts this pristine plant cranks out is outstripping the 920-per-day output. So Valenciennes has hired 500 more workers and this month is adding a third shift for round-the-clock production -- a first in Toyota manufacturing history. "We produce a car every minute. That's the maximum. The solution is to try three shifts," says Didier Leroy, senior vice-president of Toyota Motor Manufacturing France.
Toyota, long a marginal player in Europe, is becoming a fearsome market force as it applies itself to winning a bigger share of the Old World's roadways. Sales in Europe rose 20.6% in the first four months of this year, following a 10.4% leap in 2003, to 835,000 cars -- a dramatic performance given that the European market shrank by 1.3% last year. Those gains, fueled partly by the redesigned Yaris, pushed Toyota's market share in Western Europe to 5.3% in April, up from 4.5% a year ago, overtaking Mercedes and Audi and edging close to Italy's Fiat. "Every point Toyota gains is hurting the others badly," says Peter Soliman, partner at Booz Allen Hamilton's Düsseldorf office.
Toyota is determined to snare even bigger gains in Europe. Its goal is to up its market share there to 8% by 2010. The world's No. 2 auto maker spent the 1990s slowly acquiring a hefty 11% chunk of the $457 billion U.S. auto market. Industry experts say the Japanese giant has a good shot at becoming one of the leading auto brands in Europe and could well exceed its 8% target. "They are producing cars Europeans really want," says Garel Rhys, professor of automotive economics at the Cardiff Business School in Wales. "Toyota will become a major competitive threat in Europe now."
Soaring sales are also helping Toyota's bottom line. European revenues rose 35.3% in 2003, to $19.5 billion. Operating profit rose nearly ninefold, to $654 million. Behind the sales surge are investments in local design and production -- a strategy Toyota has followed with success in the U.S. Half the Toyotas sold in Europe are built at factories in Britain, France, and Turkey. In 2005, when a joint-venture plant with PSA Peugeot Citröen starts operations, Toyota's local production will rise to 60%, nearly matching the level of local production in the U.S. By 2010 the company aims to sell 1.2 million cars in Europe, matching the sales levels of Peugeot and Ford Motor Co. brands. "Toyota's successes are real. People are taking serious notice, but no one has a good plan to combat it," says Booz Allen's Soliman.
[...]
businessweekasia.com
Footnote:
Message 20786051 |
