How are places affected by decisions made by MNCs/TNCs?

Case Study: Ford car company in Detroit, USA

  • Detroit was chosen to be home to the company for a number of reasons – partly by chance, as Henry Ford lived in the area – steel making factories nearby, ships can reach Detroit easily
  • Factories involved 3 car manufacturers – Henry Ford, Crozier, General Motor

Social Impacts – During

  • Put city on the map, made it recognised
  • Helped with public services
  • Improved wages to $5/day when the average was $9/week
  • Growing subculture of artists, musicians etc – growing creative industry
  • African Americans moved there from the south to find work and escape racism, but experienced further racism when in Detroit and struggled to find employment

Social Impacts – After

  • Over 80 languages are now spoken in Detroit
  • Area is in good condition with large gardens, safe environment etc
  • Industry helps with education of employees’ children, provides good cars and homes
  • Buildings collapsed and roads were left in poor condition
  • Became sparsely populated
  • 43 people died in 12th Street riots after factory closures
  • An extremely poor population was left after the 12th Street riots
  • Regeneration has created disconnection between new areas and the city centre

Economic Impacts – During

  • Helped with public services eg building mansions, entertainment facilities
  • Improved wages to $5/day
  • Towards end, the industry lost money so public service funding had to be cut

Economic Impacts – After

  • Industry re-grew in 1990s
  • More jobs have since come back due to economic regeneration
  • Oil prices rose in 1970s and Japanese cars became great competition within the industry
  • Shops were closed downtown
  • Very poor population remaining after the riots