2.4+The+fashion+industry

__** NIKE **__

__**Summarise the main changes taking place (companies, locations etc)**__ As globalization develops, there is a shift of production of goods throughout different locations across the world. For instance, Bulfanco, the factory is in Bulgaria, owned by Greeks, and is manufacturing goods for the American company, Nike. Nike also has many factoreis in Indonesia.

This is a growing trend through many companies, to outsource their labor and manufacturing process, and then sell the goods in a more economically developed country. **Outsourcing** means giving a short term contract to an existing factory to mkae your products, rather than build a factory yourself.

Companies are outsourcing in order to have access to cheaper labor as well as looser regulations. Nike has been criticized heavily for its horrible conditions in its outsourced factories in Indonesia. As there are fewer labor regulations in Indonesia, these companies get a "free pass" as they can pay as little as they want and there is no pressure to provide any form of benefits to its workers, this allows Nike to have a tremendous profit whilst still being able to make thousands and thousands of products every day.

__**Discuss the positive and negative impacts on MEDCs involved**__

Benefits for MEDCs · Lower prices for consumers: thanks to the manufacturing being done in LEDCs, where labor is cheaper, TNCs can offer their products at lower prices on the market;

· Wider range of product choice for consumers: because labor is so cheap, smaller companies are able to produce more and compete with bigger companies;

· TNCs, which are usually based in MEDCs, can benefit from globalization as they can spend less on manufacturing, thus making more money and becoming larger and more successful.

__**Discuss the positive and negative impacts on the LEDCs or middle Income countries involved**__

- Job opportunities, esp for women. - Relatively "high" wages for workers (global companies offer the highest wages because they have a lot of pressure to treat the workers with respect -> In Indonesia, Nike raised the age limit to 16 for apparel and 18 and shoes and increased wages by 66%. - Conditions: In Bulgaria, the Bulfanco facorty that Nike uses has much better conditions for workers than the local factories.
 * Positive**:

- In comparison with MEDC wages, the wages are too low for the amount of work they are doing - Work environments can be very unpleasant (dirty, etc.) - Global companies have the ability to suddenly move because they are constantly looking for the cheapest locations -> therefore wages have to stay as low as possible. (NIKE moved from South Korea because the wages were increasing too much, they moved to Taiwan because it was cheaper...then Taiwan became too expensive, and they moved to Indonesia - the cycle continues) - Nike advertsing encourages people to buy their products when they cannot afford them - creates discontent.
 * Negative**:

__** JAK/Beximco **__

__**Summarise the main changes taking place (companies, locations ec)**__
 * UK: JAK company in Leicester now uses other countries to produce its clothes, and to buy its cloth, in order to keep cots down.
 * Bangladesh: Bexcimco is the company the JAK and lots of other UK firms use outsource their production.


 * __Impacts of MEDCs/Leicester UK__**

Unemployment for clothing workers in Leicester who cannot necessarily find new work. The UK companies are constantly having to adapt to keep costs down.

__**Impacts on LEDCs: Bangladesh**__

__**Positive**__ Women workers 90% - this gives them an income and benefits their children who get education and better diets/health care. Women who work are likely ot have less childern so population growth reduces. Women's status improves. Factory conditions are good by local standards because the TNCs require the factory to meet certain standards.

Alternative work to farming, and for the growing population, is essential.

__**Negative**__

Bangladesh is very dependent on the clothing industry. If costs rise, companies will move elsewhere (esp as they are outsourcing). The threat of competition from China is strong.

**__Burberry in Wales__**

This clothing factroy closed its factroy in the Rhonda valey in Wales to move to China. 300 jobs were lost. Int hsi area there are few other job opportunities for young people. Older people are still affected by the decline of older industry such as coal and steel.


 * __War on want's view of sweatshops in Bangladesh

Ethical Primark?__**