The 2am Talk Radio Show Recent

Sunday, July 02, 2006

Volume 24 - 'Globalization'

'Globalization' is that magic word, which next to 'outsourcing', scares the 'crap' out of 'localized' thinking individuals, and connotes volumes of prejudicial opinions. Then again, 'Globalization' actually isn't a word, it's a concept. "Worldwide, a system of communication, comprehensive, universal", if one is to quote Webster.

Although I find 'globalization to be a sign of progress, free thinking and long-term success for those who understand 'competitiveness' in a free market, there are many who cringe at this concept, and promote governmental intervention (just what we need more of!) by limiting free trade and 'outlawing' private companies from doing 'global business'. For example, Thomas Pallery, PhD. in economics from Yale, said "he's encouraging workers and small-business owners to realize that they are threatened as the globalization of the economy forces more industries to compete on price." He recommends that Congress (Oh, goody!) consider an across-the-board tariff on certain countries unless they allow their currency to rise in value by market forces. And, although, I couldn't agree more with attempting to let the market place control economics, he continues (as most liberals do, instead of simply 'shutting up') by saying that "trade agreements should include regulations that force other countries to meet labor, environmental and safety standards." He continues by stating that "economics and politics should be linked." Enough of the 'other side', this is my blog, and I simply don't believe in 'socialism'or governmental interference.

Let's get back to some very 'simple' questions that need asked, and relate these questions, and answers, to 'globalization', for the benefit of understanding this process, or at least, reasoning out this concept:

Are you better off with the likes of a Wal-Mart, or not? Has you 'check-book' improved or gotten worse with importation of 'clothing'? Can a family of four clothe their family for less today, with better quality, and more choices, than a decade ago? (Refer to Volume 23 - Out Sourcing - Free Trade)

Is GM a bad company because it builds an automobile factory in China to sell Chevolets?

Is it a 'bad' thing that the GM Lordstown plant in Lordstown, Ohio not only builds the high quality, and great selling Colbalt brand, but also builds a different model, on that same production line for the Mexican market, and another model that gets sent only to Canada to be sold?

Is Toyota a good company because it builds automobile factories in Tennessee, Kentucky, Indiana and Texas, employs hundreds of thousands of U.S. citizens, but is a bad company because they also import other models into our market place?

Do the workers at the Honda Marysville, Ohio plant think less of Honda because their owned by a Japanese company?

Honda just announced, June 28th, that it is building a $500 Million Dollar facility in Indiana. This facility which will begin production in the fall of 2008, will employ 2,000 people and will have a production capacity of 200,000 vehicles. Is Honda a good, bad, or simply a foreign based company?

Is Chrysler owned by an U.S. company?

Isn't Volvo, Land Rover and Aston Martin now part of Ford's family of brands?

Isn't Hyundai spending billions of dollars within the State of California in a manufacturing capacity?

Is it, therefore, a globalization problem that GM and Ford have been announcing thousands of job cuts while foreign automakers are aggressively building new factories, and expanding plants here in the United States, or possibly not a globalization problem, but poor management and/or other internal problems within those companies?

The fact that Toyota gets more out of its workers, with plants operating at about 110 percent of capacity while GM's plants are operating at only 75% of their capacity is not a globalization problem, so get out from under your mother's skirt and learn to compete! As I stated in my volume 22 - Supply Chain Management (and Respect)"General Motors, opting to carry 120 SKUs of catalytic converters versus Toyota's decision to 'platform build' with only 30 catalytic converters, thus reducing costs of a single part number..." is not a 'globalization' problem, it's an internal company decision, not unlike Delphi's decision to create a 'job-bank' that costs over 400 million dollars with no attached productivity. Not 'globalization', just stupidity!

And finally, as if anyone reading this hasn't gathered enough new thoughts on the subject of 'globalization', here is the defining mark that says, no matter your opinion, 'globalization' is here to stay, and we better prepare ourselves through a better educational process to compete, (Volume 23 - Out Sourcing - Free Trade, and in Volume 13 - Importation of Goods - Trade Imbalance - Why and How?) in 2007, NASCAR is allowing Toyota into Nextel Cup racing. This uniquely American sport of stock-car racing has always wrapped itself in the red, white and blue, as U.S. car manufacturers, since the late 40's, competed against each other.

Initially there were many qualms about allowing a 'foreign' car company into NASCAR Nextel Cup racing, but the reality is that the line has blurred as automobile companies are very much 'global' companies, making, producing and selling cars all over the world. Many of the 'foreign' manufacturers, as mentioned previously, are now only foreign by ownership, with billions being spent in this country in manufacturing plants, testing facilities, and now racing. As one of the most important and respected of all the racing NASCAR owners, Jack Roush, said recently, ..."Toyota is a very important part of our economy today...and we've got a lot of dealer investment dollars out there and we've got a lot of our population that works in Toyota plants around the country, so they have every right to be here..." Add to this, that the Toyota Camry is built here in the United States with 80% of its parts from U.S. suppliers, while the Ford Mustang contains 60% U.S. supplied parts, the facts speak for themselves.

So, other than securing our borders from illegal immigrants and terroists, there will be no building of another 'China Wall' (which, by the way, didn't work 2,000 years ago) around this country.