Business globalizations irreversibility continues to amaze and sometimes, confuse. The international automobile market is a prime illustration. Andy Sharp reports on it in Bloomberg Businessweek (Japans Hottest New Export Market: Japan 9/17/129/23/12, pp. 1516):
At the Shibaura Chuo auto showroom in Tokyo, the Nissan March subcompact has all the signs of Japanese qualityits fuel-efficient, sturdy, and handles well. Except the March is made in Thailand, not Japan. (p. 15)
Well if that isnt a surprise! And it was probably a surprise even to some Tokyo residents.
Such is the era of globalization. And why should the USA be the only nation involved? Increasingly, companies based all around the globe are running cost/benefit analyses to determine the best strategies for their manufacturing, and it sometimes takes them to another country. Sharp elaborates on the ever expanding circle of outsourcing:
Western European companies, mainly German, have set up shop in Eastern Europe to ship goods back to the European Union. In Japan, apparel destined for the countrys retailers has been made in China for years. (p. 16)
Jesper Koll is the head of equity research at JPMorgan Securities in Tokyo. Koll explains due to the 45% gain in the yen against the dollar over the last half decade, larger numbers of businesses in Japan are offshoring their manufacturing to enjoy significantly reduced costs. That doesnt exactly help those being laid off in the local Japanese economies. But they are now experiencing the same, sometimes painful, transitions the USA has already been experiencing. You cant just shut down globalization because of the pain of its ensuing transitions.
Sharp shares a significant observation by Robert Feldman, head of Japan economic research at Morgan Stanley in Tokyo. I believe Feldman captures the essence of business globalization:
Consumers are far less concerned about where things are made. . . . A Nissan car made in Thailand is still a Nissan car. (p. 16)
Some people will complain about globalization forever. That is not going to change its reality. As business globalization continues, I too believe where something is made will pale in comparison to what is made. Quality will always outweigh originsand in an enlightened society, why shouldnt it?
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