The Taiwan-Romania axis

Even in the era of globalization, location can still be king.

Published February 21, 2006 11:27PM (EST)

The world's largest contract manufacturer is Foxconn, a Taiwanese company that almost never makes the headlines. The company manufactures the iPod Nano for Apple, PlayStations for Sony, cellphones for Nokia, personal computers for HP and Acer. With a worldwide staff of 100,000, Foxconn bills itself both as Taiwan's largest privately owned enterprise and as the No. 1 exporter of goods from mainland China. In the new global ecology, it is a potent survivor. Watch the eight-minute corporate video: When the deeply baritoned announcer intones the word "globalization" near the end, his voice resounds with satisfaction.

Foxconn got its start in 1974 as a maker of switches for black-and-white TVs, then plowed into the decidedly unglamorous business of making computer connectors, helped to lead the wave of Taiwanese companies relocating production to China in 1988, and now reigns as one of the world's great manufacturing powerhouses, dipping its fingers in everything from precision molding to nanotechnology. The company has 20 subsidiaries in the U.S. alone.

And despite keeping as low a profile as an industrial colossus can, Foxconn did make the news today, albeit only in the most glancing of fashions. In an article at recounting how electronics manufacturers are beginning to set up operations in eastern Europe, there was a brief mention that Foxconn had opened a facility in Romania. "Foxcon has recognized how important Eastern Europe is going to be because of the geographic proximity to European markets," Ian Crawford, vice president of global sourcing for IBM, was quoted as saying.

Even in an era of super-efficient container shipping and FedEx overnight delivery, China is just too far away for the kind of quick turnarounds that modern consumer markets demand. Taiwanese and other Asian contract manufacturers are pouring in. Foxconn is already one of the largest industrial companies in the Czech Republic, assembling devices there that are then exported to the U.K., France, the Netherlands and Germany.

But labor markets in central Europe are getting tighter, so manufacturers are moving even farther east, to Romania, or Ukraine. And so it goes, globalization's endless pressure on the slightest economies of scale -- whether expressed in terms of labor, or geographical distance to markets, or manufacturing process efficiency.

Where does it end? The American blue-collar worker, watching jobs go to laborers in Ukraine working for a dollar an hour, can be excused for feeling despair. Factories that assemble computers or PlayStations are not coming back to the United States, unless peak-oil-induced fuel price spikes make shipping anything from overseas prohibitively expensive. (And if that happens, Americans are going to have a lot more to worry about than the lack of manufacturing jobs.)

But the emergence of eastern Europe as a location for new factories owned by Taiwanese corporations is more than just a tribute to the fact that workers in Ukraine earn only $1.50 an hour. It is also proof that globalization is more than a zero-sum game in which the traditional developed countries of the world move their businesses offshore to the traditionally undeveloped. When Taiwan goes to Romania, we see globalization in its full multivalent complexity. West doesn't just move East, and North isn't simply exploiting South -- somewhere in eastern Europe, the twain, and everyone else, are meeting. It seems somehow appropriate that a company that rose to power on the back of its ability to make the cords and connectors and cables that stitch electronic components to each other is now doing the same for the global economy.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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