Industrialization

Key Issue #2: “Why Do Industries Have Different Distributions?”

It’s All About PROFIT

• Industry seeks to maximize profits by minimizing production cost

• Geographers try to explain why one location may provide more profit than another

• Two geographical costs:– Situation – transporting materials– Site – land, labor, and capital

Situation Factors

• Definition – transporting materials to and from the factory

• Objective – minimize the costs

• For some companies, this is the most important factor in choosing a location

If you were building a car manufacturing plant in the U.S., where would you locate it?

Proximity to Inputs

• Every industry needs either resources from the physical environment or parts/materials made by another company

• Weight of the material is a factor for choosing location

Example: Copper Industry

• First Step: Mining the copper ore

• Gangue

• Bulk-reducing Industry

• Concentration mills must be near mines

• Purified copper is then treated at refineries

• Source of energy

Example 2: Steel Industry

• Also a bulk-reducing industry

• Choose location to minimize the cost of transporting inputs

• Steel is an alloy of iron that is produced by removing impurities in iron

Origin of Steel Industry

• Productions was small until the Industrial Revolution

• The constant heating and cooling of steel required strength, skill and a lot of time

• The Watt Steam Engine

More advances in the steel industry

• Henry Cort– Puddling – reheating iron until pasty, then

stirring it with iron rods until impurities are burned off

– Rolling – passing iron between rollers to remove remaining scum

• Abraham Darby – produced high quality iron smelted with purified carbon made from coal, known as coke– Result – the iron industry needed to be near

coalfields

U.S. Steel Industry

• In the mid 19th Century – the U.S. steel industry was concentrated around Pittsburgh

• In the first half of the 20th Century – steel mills were built near the coast– Baltimore, L.A., Trenton

Changing U.S. Steel Industry

• Recently, many steel plants have closed

• Survivors – southern Lake Michigan, East Coast

• Successful steel mills are located close to markets

• Mini-mills

Proximity to Markets

• Transporting goods to consumers is an important locational factor for three industries:

1. Bulk-gaining

2. Single market

3. Perishable

Bulk Gaining Industries

• Gain weight during production

• Example: soft drink bottling

• Coca-Cola has bottling plants all over

Fabricated Metals and Machinery• This is a prominent example of a bulk

gaining industry

• A fabricated-metals factory brings together parts to make a more complex product

• Examples: TVs, refrigerators, air conditioners, and cars

Location of Car Manufacturing

• Historically – near large markets

• Recently – assembly plants focus on producing a single model rather than locating near all large markets

The Ford Plant in ATL (#6) has closed

Single Market Manufacturers

• Products are sold primarily in one location, so they cluster near the market

• Example: the manufacturers of automobile parts only sell to a couple of customers (GM, Toyota)

• Parts makers ship their products directly to assembly plants

• “auto alley”

Perishable Products

• Products must be delivered to consumers ASAP!

• milkshed

Ship, Rail, Truck, or Air• Trucks – used for short distance

• Trains – longer distances

• Water – if available, is attractive for long distances

• Air – the most expensive, but more firms are using the air for speedy delivery

Break-of-Bulk Points

• Cost rises each time inputs are transferred from one mode to another

• Sometimes – the cost for one mode is lower for inputs and expensive for products, so companies locate at a “break-of-bulk” point where transfer among transportation modes is possible– Seaport, airport

Site Factors

• Definition = the unique characteristics of a location

• Land, labor, and capital are the three traditional production factors that vary among locations

• The most important site factor on a global scale = labor

• Minimizing labor cost is VERY important for some industries

Labor

• Labor-intensive industry – one in which labor is a high percentage of expense

• Some need highly skilled, expensive labor• Labor intensive is not the same as “high-

wage”• Textile and clothing industries – require less

skilled, low cost workers– 3 steps: spinning, weaving, and cutting/sewing– All are labor intensive, but not equally so

resulting in global distributions that are not identical

Textile and Apparel Spinning• Because it is labor intensive, it

is located in low-wage countries (PINGs)

• PINGs account for ¾ of the world’s spinning production

• Located where cotton is grown• The U.S. is the only PED that

is a major thread producer• Synthetic fibers – ½ is grown

in PINGs

Textile and Apparel Weaving

• Labor is even more intensive

• Especially highly concentrated in low-wage countries: 86% of the world’s woven cotton factory is produced in PINGs

• China accounts for ½ of production

• India accounts for ¼ of production

Textile and Apparel Assembly• Textiles are assembled into four main types of

products1. Garments2. Carpets3. Home products4. Industrial uses

• Most of the 80 billion articles or clothing sold worldwide is made in Asia

– 3/4 of shirts– ½ of dresses and suits– Most of the underwear and lingerie

• Europeans and North Americans produce woolens

Land

• Most efficient – one story building = more land

• Land is cheaper in suburban or rural areas than in the city

• Industries are attracted to energy sources, low electrical rates, and amenities at the site

Capital

• Manufacturers typically borrow funds to establish new factories or expand existing ones

• Silicon Valley – capital

• Financial incentives

• The ability to borrow money in PINGs