Globalization favors the rule-keepers
Tuesday, June 21, 2005 at 8:41PM ■"Globalization: It's Not Just Wages; For Whirlpool, High-Cost Germany Can Still Have Advantages," by Louis Uchitelle, New York Times, 17 June 2005, p. C1.
The biggest exporter of German-made washers to America? the article asks. It's Whirlpool. Turns out that U.S. multinationals rent labor all over the world, and not just in China. Their "exports" to the U.S. account for more than 40 percent of America's imports from the world, giving a strange sort of lie to the notion that America's trade deficit is so huge and underlying just how dependent we really are on globalization.
Yes, U.S. companies go overseas for cheap labor, but they also go overseas for some of the world's most expensive and regulated labor as well. Whirlpool builds simpler stuff, like microwaves, in China, but the very complex front-loaders it builds in Germany. So it becomes a matter of build what makes sense wherever you want and sell it anywhere you want.
So Germany somehow survives in a highly competitive global marketplace where wages and prices aren't the only dynamics at work. Just like America does, where roughly half of the "foreign" cars are built here.
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