ROLE OF MULTINATIONALS

Day 7

Agenda

• Example of work of a grant-giving agency – US Agency for International Development– Canadian International Development Agency– Australian Agency for International Developme

nt

• Made in China• Quick summary of Ch 11• Group time

Discuss issues raised in small groups

• How does this flattening affect specific industries, i.e. are the effects the same?– Some have already been producing off-shore, e.g. car companies,

so this should be a boost– Some have not, so opportunities

• What is the ethical responsibility of a manager with an opportunity to offshore a portion of his or her business, at the expense of long time employees?

• Check out how products vary and remain the same as they go to different countries: for example, yahoo and alibaba, cell phones, etc.

Ownership of Factories in Ownership of Factories in ChinaChina

Presented by:Sierra HannaCurtis MonetteSean KrauseAndrew Weekly

Paint Factory in Chinahttp://en.wikipedia.org/wiki/Image:Jotun's_paint_factory_in_China.jpg

PurposePurpose

To examine who owns the manufacturing plants in China, the process in which companies received authority to run the manufacturing plants, and the conditions under which they run the plants.

Who owns the factories in ChinaWho owns the factories in China

“Only 220 of the biggest enterprises in the manufacturing industry are directly controlled by the state” according to a survey by the National Bureau of Statistics (Chinese State Owns Less Than Half Of Top 500 Manufacturing Companies)

http://www.task.com.tw/images/jpegif/china%20factory.jpg

Table of FactoriesTable of FactoriesCompany Country or Origin Product(s) Location of Plant(s)

Anoradpart of Rockwell Automation

Shirley, New York Milwaukee, WI, USA

Linear Motors Dongcheng District Beijing

Changan Ford Mazda Engine Company Ltd. (CFME)

Dearborn, Mich. (Ford) Japan (Mazda)

Engine production facility Nanjing, China

MAHLE Group Stuttgart, Germany Piston production plants Yingkou, China Nanjing, China Chongqing, China

LEESHR Sino-Korea joint venture company Auto Parts and Accessories CHANGSHU ECONOMIC DEVT ZONE Changshu Jiangsu, China

Evensun Co.,Ltd   Chemicals GuangDong , China

Nortel USA Communication Beijing

Cypress Industries Austin, Texas and Taipei, Taiwan, R.O.C.

Plastics and Metal Product Dong Guan City and Shenzhen City, China

Intel USA Micro Processors Liaoning Province

Taiwan Semiconductor Manufacturing Co. 

Taipei, Taiwan Computer chips Shanghai

Min Jen Enterprise Co., Ltd. Taoyuan, Taiwan LCD monitors and LCD TV monitors

Somewhere in China

POSCO Pohang, South Korea Steel Beijing , Shanghai, Guangzhou, Wuhan, Shenyang, and Wanchai, Hong Kong

Ace Korea, lnc. Busan, Korea AKI-BOARD, AKI-TILE of 100% Natural Gypsum Ceiling Tile and MgO Board

WUHAN and JANGSU

Taiwan in ChinaTaiwan in China

• Designed by someone, somewhere. Sent somewhere. Assembled & Made somewhere.

• Apple, Garmin, Microsoft, Cisco, Nike, Sony

• Taiwan is known for its strengths in reliable sourcing, leading technology and complex integration-and they get all the jobs done in China.

Taiwan in ChinaTaiwan in China

• Does the average consumer in the United States who buys an iPhone, an Xbox 360, a wireless router, or a Garmin GPS device know it’s from Taiwan?

• Designed by someone in the United States. Sent to Taiwan. Assembled & Made in China

* Many foreign firms, including U.S. companies, are registered in theVirgin Islands, Cayman Islands, and Western Samoa for tax purposes.Source: U.S. $ Foreign Commercial Service and U.S. Department of State

Top Sources for Foreign Direct Investment in China (US $ billions)

Country/Region 2001 2002 2003 2004 2005 2006

Hong Kong $16.7 $17.8 $17.7 $18.9 $17.1 $17.8

Virgin Islands* $5.0 $6.1 $5.7 $6.7 $9.0 $9.4

Japan $4.3 $4.2 $5.0 $5.4 $6.5 $6.0

South Korea $2.1 $2.7 $4.5 $6.2 $5.2 $5.9

Taiwan $2.9 $3.9 $3.4 $3.1 $2.1 $3.8

United States $4.4 $5.4 $4.2 $3.9 $3.1 $3.4

Singapore $2.1 $2.3 $2.0 $2.0 $2.2 $2.1

Germany $1.2 $0.9 $0.8 $1.0 $1.5 $1.4

All Sources $46.9 $52.7 $53.5 $64.0 $60.3 $63.4

FDI in ChinaFDI in China

Ch 11 - summary

• There are 7 rules proposed by Friedman.

• By groups, explain to the class what a rule means or suggests a company does and provide an example not in the book.

Rules

• Dig inside yourself

• The small shall act big

• The big shall act small

• Collaborate

• Get regular x-rays

• Outsource to win, not to shrink

• Outsourcing is also for idealists

Term Project

• Proposal due?

• Questions on what is required?

• Spend time organizing