Chapter 4: Manufacturing BH FINALS PDF
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This document examines the evolution of manufacturing, focusing on multinational firms, industry successors, and the origins and growth of various sectors. It explores specific examples and notable instances, such as those from the early 1900s. Additionally, it delves into cartels, their administrative structures, and the impact of events like World War II. The document highlights the emergence of various industries, including automobiles and chemicals.
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# Chapter 4: Manufacturing ## Late 19th Century: - Multinational firms have dominated in various dynamic manufacturing industries. - Firms have pioneered capital-intensive technologies. - As a result, after the Second Industrial Revolution, firms expanded into different international markets: CEMA...
# Chapter 4: Manufacturing ## Late 19th Century: - Multinational firms have dominated in various dynamic manufacturing industries. - Firms have pioneered capital-intensive technologies. - As a result, after the Second Industrial Revolution, firms expanded into different international markets: CEMA ### Examples of Industry Successors: * Chemicals * Machinery * Electricals * Automobile ## Post WW2 Industry Successors: CPT * Computers * Pharmaceuticals * Telecoms ## Origins & Growth - No multinational manufacturer before 19th century - First instance, 1830: a Swiss cotton firm in Germany (short-lived) ## First Instances: - 1850: Siemens & Halske (German) - Pioneered development of telegraph and cable equipment - 1914: Singer (U.S) - Became the first successful U.S. multinational manufacturer - Largest manufacturer of sewing machines globally - First foreign factory: Scotland - Multinationals were active primarily in industries developed during the Second Industrial Revolution (CPT). ## Background Information: ### Chemical Industries: - Germany is the leading country (foreign subsidiaries in Russia & France) - They lead in scientific research and application: - Bayer: dyestuffs and pharmacy - Degussa: electrochemical ### Machinery Industry: - Dominated by the U.S. - Prominent investors: - Pioneered mass production of machinery - Fabricating and assembling parts ## Branded Consumer Goods: - British: manufactured dog food & toffee in the U.S - U.S.A., British, German: grama phones & records (distributed to all over Europe, India, Brazil & Argentina) - Germany: malt coffee (distributed in Austria, Sweden, Russia, Spain) - Europe's largest consumer goods firm: Nestle & Uniliver - Lever Brothers (soap) - U.S.A.: Singer - Germany: Bayer ## Automobile Industry: ### Europe: - Originated in France: late 1890s - Soon spread all over Europe - Concentrated on only producing in small numbers for the wealthy - Became an active industry in cross-border operations - France: Renault - Germany: Daimler - Began manufacturing in Austria (1902) - Italy: Fiat - Factories in Austria, U.S., Russia (pre 1914) ## Henry Ford: - Revolutionized the industry in the 1900s - Developed standardized product: the Model T. - Manufacturing on a moving assembly line (like modern factories) - Achieved economies of scale. ## Interwar Cartels: - By the 1930s, most manufacturing was controlled by international cartels - Depressed market conditions - Political risks - Exchange controls ### Types of Cartels (3) 1. **Classic Interwar Cartels:** - Concerned with price & output - Mostly in matches & electric lamp industry 2. **Fixing of Export Prices:** - To restrict quantity & value of sales - Featured sales/export quotas - Common in the steel industry 3. **Divide Sales Territories** - Cartels that only interact with others from the same continent: territory - British Empire market - American Firms (North America) - Continental Europe (German) ## Cartels Administrative: - Strict against cheating & opportunistic behavior among members. - Cartels have agreements: sanctions - Companies exceed quota = fined - Underselling & underproduction = compensation. - Sometimes handled by representatives from members corps. - Effective to set minimum price levels. - Highly organized cartels have headquarters in operating countries. - Members of the cartels (representatives) usually present in operating countries. ## Drawback: Dissolution - WW2 disrupted international cartels. - U.S. antitrust legislation affects even countries dealing with/involved with U.S. cartels. (Germany, Britain, etc) ## Japan Market Post WW2: - Rebuilt businesses using export strategies - Rapid growth of exports (mid 1950s) - 1950s: halt of their exports (are textiles) - 1945: textile sales drop - Machinery & transport equipment became leading exports - Export competitiveness grew because of fixing exchange rates of Yen (360 yen/USD 1). - Japan trade ↓ lead to disputes with USA ## Automobile Industry: Germany - Volkswagen, Daimler Benz, BMW - BMW: focused on producing the Beetle - Became Germany's largest producer - Relied on exports before 1970's.
