Shrinking Global Village

ROBERT RENO

October 07, 1993|By ROBERT RENO

New York. -- That giant sound you heard was 13,000 German jobs being sucked into Alabama.

Daimler-Benz AG, Germany's largest industrial corporation, has confirmed it's going to build 60,000 vehicles a year in a cow pasture in the sawmill town of Vance, Alabama. So great a prize was the $300 million facility and so stiff was the competition that the Germans were able to obtain the land for about $100 as Alabama officials schemed to head off bids by North Carolina, South Carolina, Mississippi, Tennessee and Georgia.

This tells us a lot.

First of all, it's good news for American consumers who will be able to buy Mercedes-Benz trucks without forking over the huge extra cost figured in to meet the 25 percent tariff that now protects the Detroit companies from German and Japanese competition.

It also tells us that the globalization of the automobile industry is proceeding at an accelerated pace, creating jobs for Americans almost as fast as General Motors can abolish them. BMW, another German giant, is already building a plant in South Carolina to supply the surgeons and trial lawyers of America with transportation. The Japanese are firmly established in sites in California, Tennessee and Kentucky.

The U.S. currently buys about 25 percent of its cars from Western Europe, cars that could more cheaply be made here. And GM and Ford with huge holdings and markets in Europe, are increasingly integrating their product mix to reflect the integration of the world market. Daimler-Benz, which grew rich on upscale profits, is busy reinventing itself as the world market for luxury cars gets increasingly saturated with Japanese exports, which are growing faster than American car thieves can invent new ways of stealing them. The ball game seems to change every day.

In this shrinking global village we all inhabit, anything can happen. Anything, that is, but the North American Free Trade Agreement which looks increasingly like a long shot for approval.

The curious thing is that the world economy is giving us the message that everybody will be better off if national borders become less obstructive to the movement of capital, goods and services. Meanwhile, the NAFTA opponents are telling us that it is still possible to build a fortress America, to protect American living standards at the expense of American consumers and that a nation like Mexico -- where Ross Perot says they live in squalor -- is a dire threat to our wealth and our growth, even, I guess, our cleanliness.

Perhaps the most convincing argument for NAFTA is that it will lure European and Asian companies to relocate in Mexico. And when they do, where does everybody think they're going to buy their components, their raw materials, their financial services? From the market right next door, of course.

Robert Reno is a columnist for Newsday.

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