|
Industrial location change - MEDC
Lucky Goldstar (LG): Newport, South Wales
Background
Lucky Goldstar (LG) is a South Korean multinational (MNC), or transnational corporation (TNC). Transnational corporations are companies that have operations in several countries and they dominate the hi-tech industry.
Why did LG choose this particular location?
In a highly competitive global economy transnational corporations are looking for new locations for their assembly factories that are near to their markets, where they can sell their goods easily. They are also attracted to places where wage costs are lower and motorways are close by. Newport is located on the M4, plus it has rail links and is close to a busy port making it easy to transport goods. Available labour force after the unemployment brought about by the closure of many traditional industries in the area.
How did the area attract LG?
Keen to win the business, the government offers financial incentives to attract foreign companies to Britain. The Welsh Development Agency (WDA) has an important role to play in attracting new investment to areas in South Wales were traditional industries have declined. Lucky Goldstar has been given £180 million in subsides from the government which is the equivalent to £30 000 per job created. Plus it has ended up with a factory inside the EU safe from tariff barriers and close to it's european customers. They are able to pay workers in Wales less than workers in Korea; the low costs allow high productivity for LG.
In its 20-year history, the Welsh Development Agency has helped more than 1,000 companies establish operations in Wales -- more than 150 of them from North America. The Agency is credited with making Wales one of the most attractive regions in the UK to international businesses. Though Wales, about the size of New Hampshire, is home to just 5 percent of the UK population, it has attracted about 12 percent of the nation's international investment.
How do these changes impact on people & the environment?
Impact on people:
- 6100 jobs created for local people directly in the new LG plants
- Indirect employment created through links with the LG plants, in associated industries which supply goods and services to the company
- Area became a more attractive place for people to live. Disposible income for many people increased. As a result, local shops and services benefited from people spending more money
- Increase in traffic on feeder roads, which affected the quality of life of local residents as deliveries occured 24 hours a day
Impact on the environment
- Greenfield site chosen for location of new factory. As a result, habitats destroyed along with an increase in impermeable surfaces which could increase the flood risk to surrounding area
- Increase in noise pollution due to cars and delivery lorries entering the site all day and night.
D.Drake 2010
|
