Globalization: It's Not Just Wages

New York Times 06/17/05
author: Louis Uchitelle
c. 2005 New York Times Company

BENTON HARBOR, Mich. - Who is the biggest exporter of German-made washing machines to the United States? Not Miele or Bosch-Siemens, or any other German manufacturer. It is the American appliance maker, Whirlpool, the company proudly reports.

Never mind the higher labor cost - $32 an hour, including benefits, versus $23 in the United States. The necessary technology existed in Germany when Whirlpool decided to sell front-loading washers to Americans. So did a trained work force and a Whirlpool factory already making a European version of the front loader.

"We were able to expand the capacity in Germany at a very incremental investment," said Jeff M. Fettig, Whirlpool's chairman and chief executive. "It was the fastest way to the American market."

Globalization is often viewed as a rootless process of constantly moving jobs to low-wage countries. But the issue is more complex, as illustrated by Whirlpool's worldwide operations. What attracts Mr. Fettig and other chief executives is a relatively new form of globalization that emphasizes first-rate centers of production and design in various countries - including the United States.