James M. Rubenstein

Changing Distribution of American Motor-Vehicle-Parts Suppliers

The spatial distribution of American vehicle-parts suppliers has changed during the 1980s. Some operations remain in the southern Great Lakes region, but others have been shifted to new plants in communities not associated with automotive production. Other suppliers have relocated elsewhere. Situation factors are partially responsible for the shift. Site factors, especially low-cost labor, have become more significant in locational

Changing Distribution of the American Automobile Industry

Since 1965 the American automobile industry has been reconcentrating in the Midwest. Situation and site costs are crucial factors in this evolving pattern. Preferred factory sites are locations that have no previous association with the industry and have access to railroad, interstate highway, and air transportation. SIGNIFICANT change that is the consequence of site selection for new assembly plants has been occurring in the American automobile industry. After a fifty-year period of decentralization, the Midwest again is the preferred location for most of these new plants. Between 1965 and early 1986 all fifteen sites for new automobile assembly plants were in the Midwest in contrast with a figure of four out of fifteen erected there during the preceding twenty-year period. Thirteen of the new midwestern plants have been opened or designated since 1979. The purpose of this article is to analyze this renewed concentration of the automobile industry in the Midwest in terms of the geographical factors that underlie the new pattern. Two types of geographical costs are involved in selecting a specific location: situation costs and site costs. The former are related to the transportation of materials into and from a factory. Firms seek a location where the aggregate costs of bringing materials to a factory and of transporting the finished product to market will be minimized. The optimal location is dependent on the relative costs of transporting the needed inputs and outputs. Changing situation costs are instrumental in the renewed concentration of assembly plants in the Midwest. Site costs result from operating under the specific conditions of a particular location. Examples of site costs are labor, energy, amenities, and taxes. Although situation costs have brought automobile manufacturers back to the Midwest, site factors explain the choice of midwestern locations not traditionally associated with motor-vehicular production, especially since the late 1970s. CHANGING DISTRIBUTION OF PLANT SITES Locational patterns of automobile-assembly operations in the United States have alternated between concentration and dispersal. Four eras can be identified. The first was a ten-year period, beginning in the mid-1890s, when commercial production of automobiles started in factories dispersed * DR. RUBENSTEIN is an associate professor of geography at Miami University, Oxford, Ohio 45056. This content downloaded from 207.46.13.64 on Sat, 03 Sep 2016 04:07:31 UTC All use subject to http://about.jstor.org/terms AMERICAN AUTOMOBILE INDUSTRY throughout the Northeast.1 That manufacturing was concentrated in southern Michigan during the next decade.2 The third period, extending from 1914 to the mid-1960s, was characterized by decentralization of factories from southern Michigan to many other parts of the United States. The fourth period is the current one, marked by renewed investment in facilities in the Midwest (Fig. 1). The beginning of this period can be dated from 1966, when automobileassembly plants were opened at Lordstown, Ohio, by General Motors and at Belvidere, Illinois, by the Chrysler Corporation. The new trend was strong in the late 1970s and early 1980s. General Motors initiated assembly operations at Lake Orion, Michigan, Wentzville, Missouri, Bowling Green, Kentucky, and Oklahoma City, Oklahoma. The Chrysler Corporation started them at Sterling Heights, Michigan, Volkswagen at Westmoreland, Pennsylvania, Nissan at Smyrna, Tennessee, and Honda at Marysville, Ohio. In 1986 two other plants were under construction: Poletown on the Detroit-Hamtramck border by General Motors, and Flat Rock between Detroit and Toledo by Mazda. Finally, three sites were selected by March, 1986 for future plant construction: Spring Hill, Tennessee, by General Motors; Normal, Illinois, jointly by Mitsubishi and Chrysler Corporation; and Georgetown, Kentucky, by Toyota. In sum, the Midwest was the area selected for the fifteen assembly plants built or started between 1965 and 1986 in the United States. Particularly important to the renewed areal focus for the industry was the fact that all thirteen such plants after 1979 were in the Midwest. Although fifteen new assembly plants were opened or started between 1965 and 1986, thirteen plants closed during the period. Nine of them were outside the Midwest. Three plants closed in the Los Angeles metropolitan area and one in San Jose, California, two in New Jersey, and one each in Louisville, Kentucky, Baltimore, Maryland, Hamtramck, Michigan, St. Paul, Minnesota, St. Louis, Missouri, Dallas, Texas, and Norfolk, Virginia. General Motors was responsible for four closings, the Chrysler Corporation for two, and the Ford Motor Company for seven.3 Production of trucks and minivans continued at five of the plants at which automobile assembly ceased. Hence operations stopped at eight assembly plants between 1965 and 1986: four in California, two in New Jersey, and one each in Michigan and Texas.

Relocation of Families for Public Improvement Projects: Lessons from Baltimore

Abstract The U.S. Congress passed the Uniform Relocation Act (P.L. 91-646) in 1970 to minimize the adverse impacts of displacement on individuals and on communities. Based on data from Baltimore, Maryland, this article tests the thesis that the act has achieved its two main goals. The first goal was to move households into decent and affordable housing. The second was to move households into comparable if not more desirable neighborhoods and, in the process, to promote racial integration and “deconcentrate” the ghetto. The study concludes that Baltimore has met both goals only partially.

Restructuring of the U.S. Auto Industry in the 2008-2009 Recession

After many years of declining fortunes, the Detroit Three carmakers were at risk of closure and liquidation during the severe recession of 2008-2009. Efforts by the Bush and Obama administrations to support the carmakers culminated in a government-managed reorganization of Chrysler and General Motors during 2009. As a result of the restructuring, the two carmakers emerged from bankruptcy protection with lower labor costs, higher capacity utilization, and a more concentrated geographic distribution of assembly plants.

What role did regional policy play in addressing the US auto industry crisis

One of the first challenges of the newly inaugurated Obama Administration in 2009 was the parlous state of the Detroit 3 carmakers (Chrysler Group, Ford Motor Company, and General Motors Company). Without government intervention, Chrysler and GM faced the strong possibility of having to close their operations and to liquidate their assets. The Obama Administrations publicly stated justification for rescuing Chrysler and GM was twofold: (1) short-term stabilisation of the national economy, (2) long-term strengthening of US manufacturing. Regional policy was not publicly stated as an important goal, but this paper concludes that one result of the rescue has been a tacit implementation of a regional industrial policy in the USA, though not an explicitly adopted strategy.

Outdoor Recreation in Two European Countries.

A questionnaire randomly distributed to 138 elderly individuals in Luxembourg and 100 in Thionville, France, revealed the high extent of participation in outdoor recreation in the two European countries. This cross-cultural study of a subject shown by others to be an important predictor of successful aging, identified similarities and differences in socio-economic characteristics, attitudes, and environmental factors associated with outdoor recreation participation in the two industrialized countries.

National Content of Motor Vehicles

CONFUSION about what is a domestic-made vehicle and what is a foreign-made one is widespread in the United States. Some vehicles manufactured in other countries are sold in the United States under names long associated with domestic products. Other vehicles are produced in the United States by foreign-owned companies and sold under names associated with imported products. Anecdotal accounts tend to emphasize the few brands of vehicles whose national origin is complex rather than the vast majority that are still domestic or foreign made. Underlying the blurred distinction between domestic and foreign vehicles is the restructuring of automotive manufacturing, especially the diffusion of what has been called lean production and the globalization of production through relocation stimulated by an international division of labor (Massey and Meegan 1982; Glasmeier and McCluskey 1988; Hoffman and Kaplinsky 1988; Rubenstein 1992). Sorting domestic from foreign vehicles is a geographical study, because the distinction derives from where the carmakers carry out different stages of production. This article provides a locational framework for understanding what an American automobile is. Although few are 100 percent domestic or foreign, the percentage of national origin of any vehicle sold in the United States can be determined. Historically, the distinction was clear. American cars were built in the United States by American-owned firms with American-made parts and American workers. Foreign vehicles were built in other countries in foreign-owned plants and imported ready for sale in the United States. Moreover, foreign cars looked different from American-made ones. Virtually all American automobiles exceeded five meters in length and contained engines with displacements of at least four liters and six or eight cylinders. Foreign automobiles were more than one meter shorter than the American models and contained four cylinders with less than two liters of displacement. In 1955 foreign vehicle manufacturers held only 1 percent of the car market in the United States, with Volkswagen accounting for most of the sales (Flink 1988). During the 1970s Japanese-owned companies overtook the Europeans as the leading exporters of cars to the United States, but the distinction between domestic and foreign vehicles remained well defined. Japanese companies exported small cars, and American-owned firms produced large models at factories in the United States. The visual distinction between domestic and foreign automobiles lessened during the 1980s as a result of changes in products sold by both American and foreign companies. Responding belatedly to consumer demands for fuel-efficient vehicles, American carmakers shortened their vehicles and introduced small models styled like those of their Japanese competitors. At the same time Japanese companies began to build large, luxurious cars that appealed to customers who wished to trade in the small models. More significant were changes in production that reduced the difference between American and foreign cars. American companies acquired minority shares of Asian firms and imported to the United States some models produced in Asia. In 1971 General Motors acquired a 34 percent interest in Isuzu, which subsequently rose to 42 percent and then fell to 38 percent. General Motors also bought 5 percent of Suzuki and 50 percent of Daewoo, a South Korean company. All three Asian firms supplied General Motors with small cars exported to the United States. Ford Motor Company purchased 25 percent of Toyo Kogyo, which was renamed Mazda, and 10 percent of Kia Motors Corporation, a South Korean firm of which Mazda owned 8 percent. Chrysler owned as much as 24 percent of Mitsubishi during the 1980s. As was the case with General Motors, both Ford and Chrysler sold cars in the United States built by Asian firms. Japanese firms opened some production facilities in North America. They established assembly plants in the United States in part because of fear that their American sales would be restricted by imposition of import quotas. …

Driving Force: The Global Restructuring of Technology, Labor, and Investment in the Automobile and Components Industry

A study presenting a detailed anlaysis of how production processes are being transformed in the manufacture and assembly of automobiles and automobile components, the role of transnational corporations in those transformations, and the possible implications for developing countries.

The role of national champions in the evolving footprint of vehicle production in Europe - 1990-2013

By the mid-80s, industry leaders and policy makers in Europe were very concerned about the looming threat from Asian vehicle producers. Yet, 30 years later, the share of European vehicle production represented by producers headquartered in Europe remains large. This paper discusses the continued success of European-based producers in the context of the changing footprint of vehicle production in Europe. How did the national champions adjust to the introduction of the common market and the enlargement of Europe? What differences and similarities can be identified in their regional investment strategies?

Book Review: The glass city: Toledo and the industry that built itFloydB. L. (2015). The glass city: Toledo and the industry that built it. Ann Arbor: University of Michigan Press. 262 pp. ISBN: 978-0-472-11945-5

the Deloitte Center for Financial Services (2011), some simple calculations show that the highest relative incidence (or density) of millionaires in 2011 occurred in Hong Kong, Switzerland, and Singapore, and the lowest occurred in Mexico, China, and India. Surprisingly, the United States scored near the middle of the pack, ranking 12th in terms of its population size and 16th in terms of its economic size. However, several countries—like Canada and Germany— had more millionaire households per capita (or per dollar of gross domestic product) than the United States, although overall income was distributed more equitably in those other countries! In fact, the Deloitte data suggest a paradox exists where countries with lower Gini distributions for income tend to have higher densities for millionaires (using either measure of country size, the rank-order correlation with incidence of millionaires was −0.35). The second disappointing aspect of the book is that so little attention was given to the topic of wealth transfer across generations. In the postcrisis period, many people have criticized the lower rates of social mobility in the United States and lauded the higher rates of social mobility in the Nordic countries. There is growing evidence, however, that real social mobility is much lower than conventionally thought (Clark, 2014). In fact, there seems to be a lot of temporal stickiness in household status—whether measured by income, wealth, education, or occupation—and this means that inertia surely exists in the prime residential locations of the highly affluent. This book could have benefitted from a long-term study of how certain neighborhoods or communities (e.g., Hampstead in London) or key global cities (especially national or supranational capitals) have been so successful in providing homes for the super rich over extended periods of time. As a whole, the book was informative, well written, and quite enjoyable, but the conversation ended abruptly without a conclusion and there was no overarching theme to unite the disparate material and perspectives of the various chapters. Professor Hay certainly could have provided more insights at the end of the volume as to what the main research issues of the future might be with regard to the geographies of the highly affluent. And, although many of the authors alluded to that fact that spatial consumption (along with amenities) and spatial production (along with disamenities) were becoming increasingly separated in our hypermobile world, this was not an overriding theme that was fleshed out throughout the entire volume.