Marketing @ Knowledge Zone



The China Price

- by Syam Krishna *

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This results in Job-losses, Restructuring, Dislocation of production units, Retrenchment drives. The estimated number of jobs lost through these production shifts to China was as high as 34,900, compared with 29,267 jobs lost to Mexico, 9,061 jobs lost to other Asian countries, and fewer than 1,000 jobs lost to other Latin American countries.
However, because media tracking captures fewer than half of all production shifts out of the U.S. to China and other countries during this period, the actual number of jobs lost through production shifts to China and Mexico can average between 70,000 and 100,000 jobs each year for each country.

The media-tracking data also suggests an increasing percentage of jobs leaving the U.S. are in higher-paying industries producing goods such as bicycles, furniture, motors, compressors, generators, fiber optics, clocks, injection molding, and computer components. As the data shows, it is these higher-end jobs that are most likely to be unionized, and therefore, more likely to have a much larger wage and benefit package.

Many of those who lost their jobs were high seniority, top-of-the-pay-scale employees. Thus, arousing the debate whether any jobs in U.S. would be lest at all.

B) Production shifts resulting in Revenue loss to government

85% of companies moving to China are U.S.-based multinationals, and 16% are foreign-based multinationals.

Production shifts to China are not limited to low-wage production jobs on the margins of the U.S. economy. Instead, they cross a wide range of occupations at some of the nation's preeminent manufacturers, including bicycles produced by Raleigh; Hasbro and Mattel toys; polyester and nylon production by E.I. Du Pont de Nemours; Flextronics circuit boards; Lionel model trains; Johnson Electric Holdings auto parts; DVD components for Pioneer Video; U.S. companies shutting down and moving to China and other countries tend to be large, profitable, well-established companies-primarily subsidiaries of publicly held, U.S.-based multinationals, including such familiar names as Mattel, International Paper, General Electric, Motorola and Rubbermaid.

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* Contributed by -
Syam Krishna V. K. ,
B.Tech. (Prod. Engg.), Kerala University,
MBA 2007, DOMS, IIT Madras.