A Run for Their Money
At first it was something to joke about: the "Made in Japan" label signified a piece of shoddy work, a cheap gadget which might fall apart if it were looked at the wrong way. The jokes were soon...
...NACLA examined the question of capital's mobility in deoth when we looked at the U.S...
...One of the main factors which has thus far restricted monopolization, and maintained intense competition even in the face of it, is the role played by technology and technological development...
...Offshore production is quite different from other types of foreign investment...
...Thus, when RCA decided to expand production of its Taiwan subsidiary, it closed down both its Indiana facilities and its plant in Memphis, Tennessee.47 What's a Capitalist to Do...
...If someone gets hurt, they're 'clumsy' or 'accident prone...
...To increase his or her profits, then, the capitalist has two options: either raising the price of the product (which is fundamentally concerned with the question of realization of surplus value), or lowering the costs of production (which is concerned with the question of production of surplus value...
...This does not imply that the firms wait around for a competitor to develop a new product which they can then copy...
...consumer dresses in shoes from Brazil, slacks from Taiwan, underwear from Haiti, shirts from Hong Kong, hats from South Korea...
...Needless to say, the firm's savings on wages over these years has been substantial...
...With the growing internationalization of production, workers from more than one country are, at least figuratively, gathered under one roof...
...And automation, as we have seen, doesn't present a very promising picture...
...But, while this makes organizing more difficult for the workers, it does not present them with an insurmountable problem, particularly if unions begin to organize across national borders...
...When all the possible alternatives have been discussed and discarded, only one remains highly attractive for the capitalist: move production abroad...
...capital" competing against "Japanese capital...
...In fact, the major buyer of newly developed components tends to be one alone: the U.S...
...General Electric, Westinghouse, RCA and IBM played a lesser, but still important, role...
...4 Litton Industries has established plants in Columbia, South Carolina and Goldsboro, North Carolina...
...It takes considerably more capital to enter electronics than that required for the apparel industry, for example, but entry is considerably cheaper (and more promising) than in many other industries...
...As long as technology changes so rapidly, and as long as labor power is cheaper than machines, capitalists have no incentive to automate...
...The large investments necessary for machinery would inevitably tie a company to a specific technology...
...Most critically, electronics manufacturing is easily divisible into high-technology work (development, design, engineering, testing) and labor-intensive work (assembly...
...It is a natural offshoot of the earlier electrical industry...
...s It is an industry which, according to the vice-president of one large electronics firm, has "served as the basis of a 'second industrial revolution...
...Even the figures used in this Report were calculated on a calculator assembled in Singapore...
...In components production, materials only account for 30% of the total...
...By the time it starts to bother you, it is too late to rinse it off and neutralizing injections become necessary...
...TV producers...
...Competition The ability of a firm to raise its prices depends, to a great extent, on the nature of competition in the industry...
...Scientists and engineers from Bell Labs had a hand, ultimately, in creating no less than 15 other semiconductor firms between 1952 and 1967...
...COST CUTTING The determination of costs in the electronics industry varies substantially from branch to branch...
...According to a top executive at Motorola Semiconductor, "The frightening thing in this business is that if you're not first-or a fast second or third-you're in trouble...
...Late last year Stackpole Carbon, a components producer, pulled up its stakes in Kane, Pennsylvania, and headed for Lincolnton, North Carolina...
...Foreign employment in electronics has risen rapidly to an estimated 500,000...
...It's not a question of the United States rallying against imports per se by building up its protectionist walls...
...Most observers cite one reason: it's hard to keep a secret in the industry...
...And, finally, since U.S...
...So you just have to keep moving ahead...
...With the cheapening of the integrated circuit, however, electronics invaded the watch and clock market...
...46 A more important limit than this, however, is the fact that neither Northern workers nor Southern workers can compete with prevailing wage rates being paid in offshore facilities...
...See the second article] Fourth, electronics does not operate under a seasonal rush, and offshore plants do not have to remain close to distribution or retail centers...
...Here we wish to discuss in much greater depth this international connection...
...Here also, competition dictates maximum flexibility and a minimum investment in costly machinery...
...Bulky, heat-producing tube radios were quickly replaced by pocket-sized "transistor" radios...
...There, Intel's Malaysian workers, almost all young women, assemble the components in a tedious process involving hand soldering of fiber-thin wire leads...
...34 Recently a group of U.S...
...Because competent semiconductor firms can duplicate a new device within six to twelve months after it first appears, and since scientists are free to move from firm to firm (which they do frequently, lured by higher salaries or the dream of getting in at the ground floor of an up-andcoming corporation), technology diffuses rapidly in the industry...
...Engineers do design these products, but who takes the designs and turns them into consumer goods...
...By adding together figures supplied by two of the three major unions organizing in electronics and comparing this to the total number of production workers in the industry, we were able to estimate that approximately 15% of electronics workers are unionized...
...A computer as "smart" as the first UNIVAC computer which covered thousands of square feet of space can now fit in a tiny chip of silicon no larger than a fingernail...
...The UE, once the third largest industrial union in the United States, was left greatly weakened, but alive...
...As one worker put it: "The whole problem is that it takes money to make conditions safe for the workers...
...television producers presented the International Trade Commission (1TC) with a petition requesting that the President raise import quotas on color TV's entering the United States...
...The production process contains health hazards for electronics workers...
...The nature of competition in electronics has also determined this low level of automation in the industry...
...Intel Corporation is located in the heart of California's "Silicon Valley, "* the rapidly developing center of the U.S...
...Employment has risen a substantial 30% in the past decade, numbering 11,150,000 in 1975.a However, this increase should be seen in light of the even greater growth of the industry during the same period...
...If they said no, he answered, "Good...
...And, finally, they're off to market, either in the United States, Europe, or back across the Pacific to Japan...
...Generalizations about such an industry are hard to make...
...29 All this, plus the prospect of a long legal suit with an uncertain outcome, has led to a rapid diffusion of technology within the United States...
...A few years ago, electronics had nothing to do with this industry...
...First, as in the example above, the materials used in production are harsh and dangerous...
...To answer these questions we have chosen to focus on the electronics industry, one of the most internationalized manufacturing systems...
...Very few firms had a hand in the major innovations in the semiconductor industry between the late 1940's and the 1960's...
...The structure which underlies this development is what one observer has called the "globally integrated manufacturing system...
...To do this we must discuss the nature of profits in the industry and how they are generated...
...Unionization It is difficult to measure the rate of unionization in electronics since separate statistics are not available for this industry alone, but by any measure it is very low...
...9 In all, electronics is, in the words of one observer, an "industry on the wing...
...When all is ready for production of the new item, however, it doesn't go to a California factory...
...2 We noted that, when faced with a highly unionized labor force in the Northeast, the traditional headquarters of the industry, apparel manufacturers increasingly moved production to the non-unionized, low-wage South...
...20 As can be imagined from the above, technology plays an enormous role in the electronics industry since it helps determine both the size and nature of the market...
...market or to other advanced capitalist markets in Europe or Japan...
...However, wages vary greatly between computer workers, a category of more skilled, predominantly male workers (wage average S5.13 an hour), and component workers, who are less skilled and mainly women (wage average S3.89 an hour...
...10 The above factors describe why the electronics industry can become internationalized...
...3 But anyway you slice it, manufacturers are concerned with cutting labor costs...
...In any case, the fixed capital and materials costs are essentially the same for all capitalists in the industry and do not vary greatly either in different regions of the United States or abroad...
...The only way things will change is if we make changes...
...But we can at least lay out the broad outlines of the dispute...
...An example of an electronics firm in Western Massachusetts visited by NACLA illustrates our point...
...3 5 But more importantly, only U.S...
...and 4) components (the transistors, diodes, resistors, etc., which form the basis of the other three areas of production...
...And the Mexican workers currently earn less than S1.00 per hour...
...In the first place, it has...
...Three firms in particular dominated the field: Bell Labs (the testing and laboratory arm of AT&T), Texas Instruments and Fairchild Camera and Instruments...
...Instead, we must now examine the second area from which profits can emerge: cost cutting...
...It organized workers who had previously been unor- ganized, or who were organized into small independent unions, the AFL "federal" unions, or different affiliated locals...
...it began in the nineteenth century...
...In 1960, Texas Instruments developed the first integrated circuit which, like the transistor before it, did the work of the transistor better, more quickly, more cheaply and was much smaller...
...Credit: Gil Trevino-Ortiz product, they can often escape high tariffs...
...The capitalist seeks to make use of the commodity labor power in the most rational way possible (i.e...
...Federal guidelines do exist in regard to the safe use of the chemicals but are insufficient and difficult to enforce...
...In other words, firms such as IBM7 can influence the prices of computers considerably (and thus increase their profits), but most other firms, particularly in the semiconductor industry, are not able to wield such control...
...Thus, the electronics boom is strongest in California and Texas while New York and Massachusetts, the older centers of the industry, have entered a semi-permanent recession...
...Essentially, it opened electronics to a new era of miniaturization...
...At the present time there are only 7 U.S...
...More than 6,000 firms compete in electronics, nearly half of which produce component parts for the other branches of the industry...
...So why no monopolization of technology and, by extension, production...
...The question is not easy to answer, requiring a more thorough understanding of U.S...
...Although in the 1960's and 1970's the three unions have found ways of working together, both ideological differences and differences in practice keep them apart...
...Please see Appendix Afor a glossary of electronics terms...
...The IBEW also ceased to respect UE contracts and joined the IUE in the raiding...
...In addition, the globally integrated manufacturing system reflects the increasing socialization of the forces of production...
...wage rates (the highest in the capitalist world) for unskilled, labor-intensive work which can be undertaken practically anywhere...
...Take wrist watches as an example...
...in addition a machine tender, whose wages are S120 a month, would have to be hired...
...The profits of the corporation are realized abroad and either sent home or reinvested there or elsewhere...
...THE ONLY WAY THINGS WILL CHANGE IS IF WE MAKE CHANGES" "I once worked in a department where hydrofluor- ic acid (HF) was used extensively...
...Why did our warm sheepskin gloves carry the tropical weather label "Made in the Philippines...
...The movement of capital abroad, the "internationalization of capital," is not a new process...
...When integrated circuits first came on the market, they averaged S50 each, and the government (through the Department of Defense, the Atomic Energy Commission, the CIA, Federal Aviation Administration and NASA) bought 100% of production...
...employment abroad continues to increase...
...and foreign workers in fundamentally the same way, and that they are faced with the same problem: how to take on capital when it is infinitely more mobile than labor...
...Nevertheless, rather than examine these contradictions, our purpose here is three-fold...
...More than 3, 000 Intel workers produce a variety of components for use in computers, calculators and other devices which require memory systems...
...12 Slightly more than half of these firms have fewer than 100 workers each, and nearly 70% have yearly sales amounting to less than S5 million...
...13 On the other hand, only six companies account for more than 92% of sales of all mainframe computers, a S7 billion industry in 1975...
...It represents a large outlay of funds for research and development and for the construction of the first prototype model...
...This year it will sell millions of dollars worth of products which did not even exist five years ago...
...This question leads us to see that the matter is much more complex than at first assumed...
...This can be a boon to capitalists at a certain point...
...Most importantly, however, unorganized workers remain unorganized...
...The Army Signal Corps, for example, financed pilot production lines for transistors and related devices at five sites operated by8 Western Electric (the manufacturing arm of AT&T), GE, Raytheon, RCA and Sylvania...
...Thus, two major centers of electronics production have sprung up: Boston (around Route 128) in the East, close to MIT and the Cambridge engineering centers, and the Santa Clara Valley in California, near Stanford and the Bay area universities...
...The traditional form it has taken is that of direct investment by one firm in a second country...
...They can cause skin rashes, bleeding gums and throats, silicosis, damage to the central nervous system, injured brain and liver cells, intestinal problems, and increased suscepti- bility to skin cancer...
...Where Profits Come From In "The Apparel Industry Moves South," (March 1977), NACLA discussed the centrality of profit to any discussion of why an industry expands or moves in a certain way...
...21 The same integrated circuit which the government purchased for S50 in 1960 cost less than S2.35 six years later and has allowed a whole range of products to enter the consumer market...
...When my supervisor hired people, he asked them if they knew anything about acids...
...employment has not kept pace with the industry's growth for two reasons...
...For one, productivity has gone up...
...This technology could quickly become obsolete and the company would be stuck with an expensive, and now unprofitable, machine...
...The companies just don't care...
...The petition was signed by GTE Sylvania, Owens-Illinois, Corning Glass, Sprague Electric, Wells-Gardner and Zenith...
...We still must examine why the industry was driven to that type of expansion...
...Consequently, buyers for the component will be few and far between...
...3) government/military goods (radar, sonar...
...When you pick up that shiny plastic calculator with its squared-off dayglow numbers lighting up, it is hard to imagine it as a product of labor-intensive work...
...Many firms prefer to maintain the more technical aspects of production and design close to engineers and scientists...
...7 In all, the electronics industry produced almost 43,000 different types of products in 1976, from multimillion dollar computers to diodes which sell at less than a quarter...
...Then you won't be afraid to work with them...
...electronics industry...
...By doing this we will demonstrate that the globally integrated manufacturing system has affected U.S...
...See the following article] How much are these workers paid...
...On the other hand, while technology has often been used to create a better product, it is used much less frequently to improve the way in which the product is produced...
...27 Government research and development contracts and purchase orders (i.e...
...Sales of digital watches, priced as low as S20, exploded from 3.5 million in 1975 to five times that amount one year later...
...ELECTRONICS: AN INDUSTRY ON THE WING Though electronics traces its history back to Thomas Edison's work on the incandescent lamp in the late nineteenth century and to J.J...
...The first, we noted, involves relations between capitalists and workers, and the second involves relationships among capitalists in the market...
...In 1974, electronics and components and accessories workers produced 2.6% more than in 1969, while working 2.2% less hours...
...Furthermore, electronics is a constantly expanding industry...
...1 9 Thus, while there is a tendency toward centralization in some sectors of the industry (such as computers or television receivers), all remain vulnerable in this highly competitive industry...
...And for some sectors, such as component production, almost two-thirds are production workers...
...The following year, Texas Instruments, the firm which sold Bowmar its components, entered the market, underselling its competitor by S30 on comparable calculators...
...As Mae-fun, a Hong Kong assembly worker put it: "We girls are cheaper than machines because a machine costs over S2,000 and would only replace two of us...
...Anaconda produces copper on three continents) or vertically integrating their enterprises by producing certain inputs (raw materials) abroad and elaborating the final product in the United States...
...firms can situate themselves closer to potential or actual retail markets...
...16 Is this, then the elusive "all-American" industry where paupers can become princes simply by trying harder...
...employment has stagnated...
...Many of the "older" plants are not even a decade old, and many of the firms are still quite small...
...They expelled the UE from the CIO (it had withdrawn by then, anyway) and chartered a new union, the IUE, to take over the UE's workers...
...3 A single firm now integrates workers around the globe into one coordinated production system which reflects an international division of labor...
...Women workers are extensively used as a way to keep the overall wage rate low...
...Find some young scientists and engineers who have a good idea on how to produce a better product, raise a quarter of a million dollars and you're in business, taking on the giants and the not-so-big alike...
...labor in general, but four major reasons come to mind...
...The UE, one of the first industrial unions to join the CIO after its formation, emerged from mass production industries...
...By February, 1975, Bowmar was in court filing for bankruptcy...
...it is the "solid" in "solid-state" products...
...A newly developed component, for example, is often extremely expensive when first developed...
...8 Electronics, particularly the semiconductor industry, is an international industry par excellence...
...As an honest, progressive10 union, though, it soon came under attack from government and business forces...
...Nevertheless, some overall statements can be made which will help us understand why electronics production has become so internationalized...
...It is common to get HF under your nails, and then have to take shots under your nails...
...wage workers produce a value above that represented by the money they receive as wages), and 2) the realization of surplus value (i.e...
...Thirdly, since components are an intermediary *The Silicon Valley, actually the Santa Clara Valley, is called this because of the abundance of semiconductor manufacturers there...
...18 There is a certain element of truth in this...
...Why then hasn't the electronics industry picked up and moved South, following the lead of apparel...
...Altogether, electronics represents an industry with projected sales for 1977 approaching the S60 billion mark, a figure only slightly smaller than the total GNP of Canada...
...In 1975, 41% of all electronics workers were women, a total of 4,628,000.37 The overwhelming9 majority are in low-skilled, low-pay jobs...
...Although we do not address all these questions here, we wish to focus on one issue in particular which underlies and crosscuts the debate on imports and protectionism, the issue of capital's ability to move from place to place and from country to country...
...This history, although important and fascinating, is nevertheless outside the scope of this Report...
...Who Does the Dirty Work...
...The life of some of these products is not very long because competition is keen and somebody else will soon bring out a newer product...
...government...
...This is a highly complex question in the case of the electronics industry...
...The Global Assembly Line Since the early 1960's production has taken a new turn, becoming increasingly internationalized in many industries...
...The purpose of such investment is to gain access to that country's raw materials or markets...
...Until this point we have noted considerable similarities between the apparel industry and the electronics industry...
...U.S...
...Wages average S4.60 per hour, slightly higher than the S4.25 average for U.S...
...In addition, as we mentioned earlier, firms often produce goods without an assured market, hoping they can create markets with the product in hand...
...industrial workers as a whole...
...Under these conditions, a big investment in automated equipment to do a particular job isn't feasible, and I don't see automation as a possible solution...
...Also, eyestrain is an all too common side effect of many assembly line jobs...
...The integrated circuit has allowed for micro-miniaturization in electronics...
...2) industrial goods (computers, testing equipment...
...In fact, there has been a considerable concentration of technological developments...
...capitalists attempt to sell their products at a price which will allow them to retain as much as possible of the surplus value produced...
...Second, we can then evaluate some of the strategies which have been proposed to deal with the effects of runaways...
...In the branches of electronic components and radio and television, over half of the workers are women, whereas only 29% of the higher skilled and better paid computer workers are women...
...In 1950, more than 140 firms assembled and sold TV receivers in the United States...
...In this section we will examine both propositions and will conclude that, due to the nature of technology and competition in the electronics industry, the industry has come to rely on cost cutting-essentially cutting labor costs-as its principal method of raising profits...
...tN "W6 Electronic assembly work at plant in Mexicali, Mexico...
...Internationalization of production has introduced a new type of foreign investment, the "offshore plant," more commonly known as the runaway shop...
...Thus, we turn to the one remaining area of costs which does fluctuate, the cost of labor power...
...In 1971, Bowmar maintained a virtual monopoly in the production of hand-held calculators...
...In the same plant 90% of the technicians (testers) are men...
...And one firm alone, IBM, dominates the field with a 65.5% share of the market in 1975.14 The trend toward centralization is equally pronounced in the field of many consumer products...
...Aren't they all major television producers and therefore just as affected by foreign imports...
...In the Western Massachusetts plant mentioned above, for example, 80% of the employees are women who virtually all work on the assembly line...
...The UE played an important role in the CIO, helping to organize the first national contracts for GE and Westinghouse workers...
...To understand why this is the case, we must first examine the structure of the industry and the nature of its work force...
...23 The burgeoning field has given smaller firms the possibility of competing with larger ones since the nature of the markets is not as defined as in industries such as auto or steel...
...This is particularly the case with electronic components...
...By technological develop- ment we mean a firm's ability to design a better, more sophisticated product which does more than earlier models, or does the same thing more efficiently or more quickly...
...For example, if workers at National Semiconductor's Utah facility go on strike, National can still count on production from their Thailand plant...
...COMPETITION IS THE LIFE BLOOD OF TRADE, FELLOWS, LET'S SEE SOME COMPETITION, LET'S SEE SOME BLOOD...
...11 We noted that there are two apsects to the question of realizing profits: 1) production of surplus value (i.e...
...Whole areas of production (especially if they require extensive hand labor) can be phased out altogether or subcontracted to another firm, but both solutions raise a whole series of other problems...
...In fact the level of U.S...
...It was felt that we had to get out of the resistor business or relocate...
...It should be noted that this figure must be seen as an over-estimate since it includes all workers from the third union as electronics workers, surely not the case...
...24 For many tasks, then, it is not technical difficulties which have limited the spread of automation, but rather costs within the capitalist framework...
...For example, such an under- standing clarifies the causes of unemployment, the relationship between imports and unemployment, and the prices we pay for consumer goods...
...Secondly, the industry produces components which have a very high value in relation to their weight and which can therefore be shipped (or air freighted) easily and cheaply...
...apparel industry...
...The jokes were soon replaced by a more general curiosity...
...Take the case of the Bowmar Corporation...
...This process reflects an international division of labor in which advanced capitalist countries produce high technology industrial goods and less developed capitalist countries provide raw materials or simple industrial products...
...The travels of capital, however, do not stop at the borders of the United States...
...With only a few more complications, capital departs for Taiwan or India, Haiti or Barbados, where it sets up shop, looking for lower wages which translate into higher profits...
...Business journals encourage such a view of the industry, describing how "Two PhDs Turn Teledyne into Cash Machine" 17, or how "Hewlett-Packard Takes on the Computer Giants...
...Finally, we hope to examine the effects of this new development *This does not mean, of course, that no labor-intensive work is performed in the United States...
...Finally, we could not escape what had become a reality: the U.S...
...And, as the CIO itself grew increasingly more conservative, many of its unions also joined the attack on the UE...
...Generally, workers in the United States labor at more capital-intensive, more highly-skilled aspects of production while workers in Third World countries provide the labor-intensive, unskilled inputs.* The product is one, whether it be a computer or a dress, but it directly reflects the labor of workers in several countries...
...As the first "solid state" amplifier, it gave off less heat than electron tubes, was less costly, more reliable and much smaller...
...As of 1976, one-sixth of all electronics firms in the United States were in California and almost onequarter in Massachusetts, New York or Connecticut...
...Geographic separation of the two aspects of production is quite simple...
...It is the fifty-year old women in Massachusetts, the young Latin and Black workers in California, and still other workers in Indonesia, Singapore and Brazil who perform the tedious and intricate steps that turn ideas into reality...
...While it takes more capital to enter electronics, in neither industry can profits be built on the ability of one or a few firms to influence prices...
...In summary, a capitalist driven by the need to expand profits is faced with a variety of alternatives...
...While both deal with the flow of electricity through circuits, electronics products also include tubes and semiconductors which can discharge, direct, control or otherwise influence the flow of electricity...
...22 Similar developments have brought electronics into the home appliance field (microwave ovens), other areas of communications (CB radios), automobiles (engine control) and accounting (calculators...
...In the first place, electronics is a young industry...
...2 Research and development of new products, however, still takes "a pile of dollars," as Forbes remarked...
...4 These post-war developments filled out the major production areas in electronics: 1) consumer goods (radio, TV, calculators, etc...
...When Intel's engineers develop a design for a new electronic circuit or process, technicians in the Santa Clara Valley, California, plant will build, test and redesign the product...
...Why are so few workers in a union...
...Electronics emerges as an industry which is highly centralized in some of its branches, overrun by thousands of competing firms in others, and intensely competitive throughout...
...28 And government research and development funds, 25% of total R&D funds in the semiconductor industry in 1958, went largely to the major firms...
...wages are, they are bound to be higher than those in South Korea or Mexico...
...Finally, there is an historical rivalry between the unions that has sometimes meant that energy is put into raiding rather than organizing the unorganized...
...For example, the first transistor was developed at the Bell Telephone Laboratory in 1947...
...Operatives in the Massachusetts plant now earn what the Philadelphia workers earned six years ago: S3.50 an hour...
...Cost cutting, which we have seen to mean wage cutting, is a necessity for both industries...
...In radio and TV assembly, for example, materials account for 40% of total costs...
...In all, more than 330 electronics manufacturing plants were operating in the Southeastern states in 1976.4 5 Still, a number of factors have limited electronics from moving South in greater numbers...
...Third, plants from high-wage, unionized areas are running away to nonunion areas, accentuating the trend described in the second point...
...The process continued until the component's price had fallen sufficiently for it to enter the consumer market...
...After an unsuccessful attempt to break the UE from within, the CIO unions tried another tactic...
...1s While many branches of the industry are becoming more centralized, all continue to be characterized by fierce competition which usually takes the form of price slashing to undersell competitors...
...As firms gained experience in producing the component and began to mass produce it, the price started to fall and the industrial market opened up...
...Digital watches, televisions and computers look as if they were stamped out by giant machines watched over by engineers in white coats...
...Corporations expand abroad, either producing the same product in many countries (e.g...
...As a leading industry representative remarked, in electronics ". . . you don't project future markets-you go out and invent them...
...He or she can cut costs by moving the plant to the South or another low-wage, non-union area, but the savings will not be that substantial...
...Though the pattern of increased imports from abroad is clear, and though its consequences in terms of undercutting some U.S...
...Given the fact that many unions concentrate their organizing in more established industries and only among the largest employers-most electrical workers at GE and Westinghouse, for example, are unionized- electronics remains a union backwater...
...First, by under- standing the nature of U.S...
...Thus, any strategy which separates workers who are thrown together by the very development of capitalist production is destined to be a losing strategy...
...It is a question of the logic of capitalist development which produces competition between capitalists of different nations and capitalists of the same nation, a question of why some capitals expand far away from their original "home base" and why others do not...
...Following the war, both industry and consumers began to take more notice of electronics as computers and television started to play an increasingly active role in our lives...
...As capitalist production expands, it gathers together more and more workers under one roof...
...Competition means that a firm must constantly be innovating...
...David Packard, chairman of Hewlett-Packard, summed up the perspective of the companies when he remarked that: My own company will bring out over 100 new products this year...
...3 1 In the industry as a whole, most observers agree that the cost of production facilities in the manufacture of electronic equipment (the fixed capital costs) can be rather low, although by no means insignificant...
...4 ' Ampex moved its assembly of consumer tape cassettes to Opelika, Alabama in 1973,42 Magnavox started TV assembly production uin Tennessee in 1973,43 and GTE Sylvania recently moved its color TV assembly operations from Batavia, New York to Smithfield, North Carolina...
...Thus, the runaway is "rational" in the sense that employers escape paying U.S...
...But here, too, a division of labor relegates those tasks to Blacks, Latins and other Third World workers, and women.5 upon workers both here and abroad...
...Instead it is air freighted to Intel's plant in Penang, Malaysia...
...3 0 The drive for higher profits, then, is not to be satisfied within the capitalist marketplace...
...Three unions organize in the electronics industry: the United Electrical, Radio and Machine Workers of America (UE), the International Union of Electrical, Radio and Machine Workers (IUE) and the International Brotherhood of Electrical Workers (IBEW...
...There has been a steady flow of electronics firms out of New York (its birth place) for more than three decades, and many of these firms have moved South...
...As we will see below, the sites for offshore production are chosen because of their low wage rates and controlled labor force and the work performed is generally labor-intensive assembly operations...
...Part of the plant's production (assembly work on consumer items) was moved to Mexico, the rest (assembly and testing of more sophisticated products) went to Massachusetts...
...Secondly, since it is a young industry, new shops are being established in low-wage, non-union areas...
...industries (shoe, apparel, electronics) and threatening the jobs of many workers is unmistakable, an understanding of this problem remains hazy at best and totally obfuscated at worst...
...There are a number of reasons for this...
...Compared to the skyrocketing growth of the electronics industry as a whole-sales have more than doubled-the rise in domestic employment is not so impressive...
...A computer can now guide the flight of a satellite on a precise journey of millions of light years, but the computer itself is constructed out of thousands of components which must be assembled by hand, and no computer has yet been developed which can automate that process...
...By producing abroad, U.S...
...The IBEW was an old AFL craft union whose strength came from skilled electricians in the building trades...
...The globally integrated manufacturing system reflects a further development of capitalist production in general...
...This is particularly clear in electronics which has the unique distinction of being the only industry in which prices have consistently gone down in the last fifteen years...
...In this context, we will discuss 1) the structure of competition in the industry and the special role of technology and 2) the various costs of production in electronics...
...Once assembled, the components are flown back to California, this time for final testing and/or integration into a larger end product...
...The industry has even developed a name for the common practice of copying another firm's products: "second sourcing," which, according to Fortune, "more often than not [is] done without the original manufacturer's permission or cooperation...
...But a question immediately comes to mind: Why didn't GE, RCA, Magnavox, Motorola, Admiral or Warwick sign the petition...
...It's a matter of economics," according to the head of Stackpole, "Pennsylvania is a high labor area...
...w WHY NOT GO SOUTH...
...How ironic that this space age industry is still so firmly rooted in laborious hand work...
...It's not solely or simply a question of "U.S...
...Thomson's "discovery" of the electron in 1897, as an industry it is exceptionally young.* The industry concentrated on radio production until World War II led electronics into the trenches with a massive upsurge of military products...
...Employers-who argue that women are innately better at the intricate, monotonous, eye-straining work typical of electronics productionknow that they will be able to hire women at a lower wage rate than men since so many job markets are closed to the former...
...Silicon is the most common substrate used in semiconductor devices...
...It refers to the establishment of U.S.-owned plants in Third World countries to manufacture goods for export back to the U.S...
...wages forms an additional incentive for corporations to run away to both non-union areas in the United States and abroad...
...our tax dollars) went a long way to insure that technological developments would be concentrated among the largest firms...
...Electronics is hard to define as an industry since it is, more precisely, a science...
...in the way which will produce the most profit...
...6 If this is the case, why haven't the largest firms been able to monopolize the development of new technologies and therefore gain a dominant position in the industry...
...Labor costs also vary in the industry, from 20% of the total in the case of radio and TV assembly to 45% of the total in components production...
...electronics firms hold decisive technological advantages in many areas of component production, electronics is a major export industry...
...Other types of investment which reflect the internationalization of capital are "portfolio" investments (one firm purchasing the stocks of a foreign company but not administering the company), licensing agreements (the sale or rental of technology abroad), or bank loans...
...The company left Philadelphia six years ago to escape the relatively high wage rates in the plant and the union which had won them...
...runaways, we can view certain issues which affect our daily lives in a way which otherwise eludes us...
...On the one hand, we know that no matter what U.S...
...Electronics is so labor intensive that, measured by assets per employee, it ranks next to the most labor-intensive industriestextiles and apparel.32 Over half of all electronics workers are production workers...
...It is one of the most dangerous acids because it does not burn immediately...
Vol. 11 • April 1977 • No. 4
