Okay class, let's settle down. Today's topic is "Globalization." Please remember that term, because I want you to know what to blame when you're wondering what happened to your livelihood. Globalization is when trade barriers drop and markets become internationalized. You can't produce locally and keep wages and prices balanced, because some other producer from some faraway land will take advantage of cheaper labor, and sell the same stuff in your market, but cheaper. Companies will always flow to low-cost labor, and you just can't compete with that. Plus, big companies can out-muscle smaller companies. Either way, workers get screwed!
Okay, class, for an example of the effects of Globalization, please turn your browsers to The New York Times. You'll see that the Times is reporting that Pioneer is planning to lay off 5% of its workforce. For your homework, I'd like you to "feel the pain" of those workers.
You heard it right. The New York Times is reporting that Pioneer is planning to lay off 5% of its work force. The chief culprit is trouble in their plasma display division. Details of the restructuring are pending, and Pioneer has denied that 2,000 workers will be affected, but the world's fifth-largest plasma maker is struggling in a very competitive market. The simple point is that bigger plasma companies enjoy economy of scale that smaller companies do not, and that puts them at a disadvantage. Throw in low-cost competition from China and Pioneer has issues.
Pioneer has forecast losses for a fourth year in a row, with a chunk of that loss from its plasma division. By cutting plasma production, and instead focusing on more profitable technologies such as car electronics and home audio, Pioneer hopes to show a profit by 2010. However, the company said it might cut jobs in its home audio division as well. Formerly, Japanese manufacturing companies were safe havens for employers, and boasted lifetime job security. That era has officially ended.
So, class, study hard, and get a good job. And look out for Number One. Class dismissed.—Ken C. Pohlmann
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