Account for the rise and subsequent decline of consumer industries in MEDC's

The automobile industry is one of the biggest success stories of the consumer industries. In 1943, E.B White said “Everything in life is somewhere else, and you get there in a car.” This has become more and more true since then (with out of town shopping centres and motorways).

The rise of the automobile industry began with a demand for motorised personal transport, this led to the production and supply of cars. Initially each car would be made by a few workers building one car at a time, making car ownership prohibitively expensive.

However Henry Ford observed that this was inefficient as highly skilled workers had to be used to do both highly skilled and low skilled tasks. Ford's solution to this was to break down the production of his car into lots of small tasks; a worker would then do the same task repeatedly throughout the working day for lots of different cars, instead of doing all the tasks for one car.

This method – “fordism” -- led to cars being sold for cheaper prices than before (since low skilled labour could be used along side highly skilled labour and it is cheaper than highly skilled labour) this meant more people could afford to buy a car. This method was also used in other industries, especially with white goods, meaning price reductions all around for the everyday consumer.

Some MEDCs has what is known as a “fordist economy” with large amounts of the workforce working eight hour days and being paid good wages. Henry Ford believed that workers would have enough leisure time and money to consume the mass production goods that were being churned out of the factories – and he was right.

Another reason for the rise of consumer industries in MEDCs was that increased technology lead to the use of mechanisation, which was much cheaper in the long run and lead to cheaper products.

As the trade unions became stronger and the workers demanded higher wages, companies decided that it would be much cheaper to move production abroad to LEDCs and NICs which were offering government subsidies as well as cheap land and labour. Since transportation costs had lowered dramatically it seemed a smart move.

 Combined with Fordism techniques, low skilled labour could be used efficiently and cheaply by the TNCs (trans-national cooperations). An example of this is the movement of automobile manufacturing to Brazil. This began as early as 1919 with model T's being assembled from parts for Ford, but did not become notable until 1956.

The government were very keen to welcome industry to the south east initially and good communication infrastructure, such as roads and “telegraph” lines were built to accommodate this injection of industry and FDI (foreign direct investment). This move to Brazil meant that manufacturing was being taken away from the USA, but similar things were happening all over the world.

 After the 1970's there was a loss of jobs in consumer industries in MEDCs, this was partly due to industry moving abroad and globalisation but there were other reasons too. Companies were finding it hard to sell products in MEDCs because people simply already had what they were trying to sell. Unless there was a huge improvement in – say – a microwave, or the previous product has broken, not many people want to buy a new one.

In order to prevent losses companies had to begin to close factories, beginning with the least productive ones. This also meant that similar companies would merge with – or in some cases take over – other companies who were struggling to keep in the black. This does not appear to be so much of a problem in the BRICs nations as they have such huge populations: there are 11.3 people per car in Brazil, which shows a huge scope for growth in the automobile market.

Even though the manufacturing of the consumer industries had moved to NICs the administration and research and development had stayed in the MEDCs, this is a kind of “international division of labour” and means that large amounts of the money made from selling the goods actually ends up returning to the MEDCs instead of where they were produced, an example of this is Dyson who moved his production line of vacuum cleaners to Malaysia but kept the research and development in Malmesbury on the M4 corridor alongside the administration.

With the introduction of computerisation even if manufacturing has stayed in MEDCs there has been a decline in the amount of workers who are needed for the factories to produce the same amount of goods. So whether the decline in consumer industries is defined as the number of workers employed, or the actual output supplied makes a difference to the pattern of manufacturing change throughout the world.

For the foreseeable future it seems as if consumer industries will continue to decline in MEDCs, because the manufacturing is offered for so much less elsewhere. Also with large NICs becoming a market for consumer goods it seems more logical to base the research and development on what people from the BRICs nations want, because there are so many of them that more money can be made selling goods that are tailored to peoples preferences from the BRICs nations than in the MEDCs.