Globalisation and Australian Automotive Industry

Topics: Automotive industry, Japan, Volkswagen Group Pages: 12 (3639 words) Published: August 24, 2010
Globalisation and World
Today globalization is essentially a synonym for global business. Globalization is changing the world we live in at a very increasingly rapid pace (Rodrik., 1997). Changes in technology, communication, and transportation are opening up borders and markets at increasing rates. In any large city in any country, Japanese cars ply the streets, a mobile call can be enough to buy equities from a stock exchange half a world away, local businesses could not function without U.S. computers, and foreign multinationals have taken over large segments of service industries. Impact of Globalisation, both theoretically and practically, can be observed in different economic, social, cultural, political, financial, and technological dimensions of the world. Globalisation has created a new world order and is gradually reaching new heights, incorporating all the fields to form a cohesive network. (Boyer & Drache, 1996) Most of the arguments against globalisation strike at one point: it benefits corporations and not people. However, it is not that way. It is possible for globalization to benefit both corporations and people. There are many points in favour of globalization i.e. it lowers prices. Food is cheaper, clothes are cheaper, cars are cheaper, and phone service is cheaper. Globalization lowers prices and raises income. Most importantly, free trade stops wars. One world, one peace, else can be fixed (Roberts & Hite, 2000). Globalization is good just not for the rich countries but especially for the poor countries. “The booming economies of India and China--the Elephant and the Dragon--have lifted 200 million people out of abject poverty in the 1990s as globalization took off, the International Monetary Fund says. Tens of millions more have catapulted themselves far ahead into the middle class.” (Meredith & Hoppough, 2007).

Globalisation has significantly influenced the job market in developing countries. The most common concern is that cheap labour and ‘drive to the bottom through fierce competition’ may be the unwanted outcome of globalisation. With the rise of globalisation, many companies are shifting to either off shoring or offshore outsourcing and this has lead to a massive redistribution of work around the world (Khan, 2006). Globalisation in manufacturing activity around the world has transformed China into a global factory as many industrialized countries are shifting their production activities partly or fully to different parts of China for gaining the benefits of China’s low labour costs. Globalisation and environment are intrinsically linked with each other. Environment provides the natural resources (Najam, Runnalls, & Mark, 2007). More and more industries around the globe result in high levels of carbon emission in the atmosphere giving rise to worldwide issue like global warming. It also enhances the working conditions of nations in respect of technical know-how, better economical, political and social relationships (Jayasuriya, 2008).

Impact of Emerging Global Economies on Australian Automotive Industry Australian Automotive industry has gone through an extensive reform programme especially after the Motor Industry Development informally known as Button Plan in 1985 when the industry was protected by the tariff of 57.5 percent. The removal of quota and decrease in protectionism made imports more accessible to consumers, and the industry became more internationally competitive and export focussed. For example: exports of automotive rose from almost nothing to around $4.7 billion in 2007, establishing automotive one of Australia's top ten export earners and the largest manufacturing export earner (Bracks, 2008). The industry has modified itself into more export oriented rather than focussing on just the domestic market especially after the collapse of 1980s (Smith & Sohail, 2005). The main reason for the existence of an automotive manufacturing industry in...

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