Fordism and Post-Fordism

In recent years, manufacturing throughout the world has undergone a series of profound transformations. As we have seen, factory production replaced cottage industry during the Industrial Revolution. Hand labor was replaced by machine-oriented production. Product standardization led to mass production, which lowered production costs dramatically. Factory production came to be associated with increased specialization and production was divided into distinct operations, with different workers in charge of each.

By the mid-twentieth century, the growth of large industrial corporations and labor unions had enabled the evolution of large-scale industrial production. Integrated production and assembly is known as Fordism, after Henry Ford who developed this system within the automobile industry. Product lines are standardized, with considerable use of mass-produced interchangeable parts, allowing for economies of scale. Fordist production operations are highly capital-intensive, with millions of dollars invested in plants and sophisticated machines.

Although Fordist production has resulted in relatively high industrial wages, production processes tend to be rigid and inflexible. Assembly lines send automobiles and other commodities along from one work station to another at regular intervals. Workers have little control over their time on the job, and have little choice of which hours or days to work.

The Limits of Fordism.By the 1960s, it had become clear that the limits ofFordism had been reached. The extraction of increasedsurplus value from industrial production required evengreater reliance on technology and automation: The paceof assembly lines is thus dictated by slow or "bottleneck"operations within the entire framework of production.Delays or shutdowns at these stages slowed down theentire production process.

Moreover, the capital intensity of Fordism slowed corporate response to changes in consumer demand. Several years were often needed for new product lines to be developed, manufactured, and marketed. This point was brought home to Detroit following the global energy crisis of the mid-1970s, when the inability of American automobile companies to quickly develop smaller, fuel- efficient vehicles drove many American consumers to purchase Japanese imports. In addition, increasing evidence of physical illness and psychological disruption suffered by workers on assembly lines led experts to question their effectiveness and efficiency in production.

The decline of Fordism was hastened by industrial growth outside the developed countries. Industrial production in Japan and other newly industrializing countries expanded in spectacular fashion during the 1950s, 1960s, and 1970s. The newly industrializing countries concentrated on the development of product markets in the United States and other developed countries, lowering production costs by paying lower wages to their workers in comparison to their American and European counterparts. Many American and European firms found largescale production inefficient and cumbersome.

Post-Fordism.Because of the problems associated with Fordism, manycontemporary industrial operations have moved awayfrom the Fordist model. New manufacturing is characterized by a greater degree of flexibility, with interestinglocational consequences. The term post-Fordist has beenapplied to manufacturing of this type, which is characterized by production on a smaller scale with a greater degreeof management and worker flexibility. Thus, an alternativeterm for post-Fordism is flexible accumulation.

Under post-Fordist production, workers have greater control over their hours and responsibilities. Moreover, production is geared toward a more rapid and effective response to changes in consumer demands. The consumer often has a greater choice of options or features in the finished product.

The transition from Fordist to post-Fordist industrial production has had considerable effect on industrial location processes. Fordist production was concentrated in a few major industrial regions of the world, such as traditional Anglo-American manufacturing region. Post-Fordist production, by contrast, is more flexible in terms of location. Because many post-Fordist operations are less dependent on the investment of large-scale development capital, they are freer to locate outside major industrial regions in response to the availability of cheaper labor or other locational considerations.

In recent years, there has been an increase in the number of industries whose location does not depend on transportation costs. A footloose industry is one whose costs do not vary much from place to place. Mail-order and catalogue businesses are examples of footloose industries (Figure 8-17). They are often located in areas that decision-makers find attractive for reasons that are unrelated to profit maximization. In effect, these post-Fordist operations might be considered modern-day global- market cottage industries. Today, more and more Americans are self-employed, and more and more locate their businesses in areas that best serve their personal needs.

Figure 8-17 Footloose Industries. L.L. Bean, with its main offices in Freeport, Maine, is an example of a footloose industry. Transportation costs were not a factor in its decision as to where to locate

Post-Fordist industrial production has redefined the relationships between business, government, and labor. Throughout the developed countries, labor unions have become much weaker, in part because the rigid division of labor between management and worker is lacking under post-Fordism. Many workers prefer the flexibility of post-Fordism to the rigidity of the Fordist industrial structure.

On the other hand, it has been argued that the transition to post-Fordist production reinforces the income and welfare gap between rich and poor within developed countries. According to this view, the decline of labor unions and the rise of post-Fordist flexibility has reduced the real wages paid to workers. Post-Fordist production has encouraged the employment of unskilled women and immigrants who work for very low wages. Over the past three decades, the meatpacking industry has relied on a smaller labor force dominated increasingly by ethnic minorities. Real wages paid to meatpacking plant workers have been declining steadily.