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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