Case study of a SECONDARY INDUSTRY which is a TNC

(MEDC)
Toyota
Location and background:
Toyota = worlds biggest car manufacturer (8 million cars worldwide
in 2010)
Originated in Japan (still company HQ) now a global company (TNC)
318,000 employees in 27 different countries MEDCs (e.g. Japan, UK),
NICs (e.g. India, Brazil) and LEDCs (e.g. Vietnam, Philippines)
TNCs operate globally to reduce labour costs, open up new expanding
markets, access raw materials and to avoid restrictions like minimum
wage levels, environmental laws, influence of trade unions etc.

Why did Toyota build their factory at Burnaston, near Derby

in 1989?
Toyota looked at 28 different UK sites of over 100 hectares and chose
Burnaston why?
Central location in the East Midlands, good road links (accessibility via
A38, A50, M1) to the rest of the country for obtaining components and
distributing the manufactured cars (also links to ports to export cars
overseas).
Government assistance UK gave 300m. toward cost of the
factory/equipment. Why? To create jobs (4,500), reduce
unemployment, increase tax revenue, provide a boost to local linked
industries.
Skilled engineering labour on the doorstep (Rolls Royce), reduce
training costs.
Large, level 250 acre site (disused airfield), well away from Derby,
easier to get planning permission, room to expand in future, pleasant
environment. Land cheaper in East Midlands compared to other parts
of the UK.
English-speaking and with good labour relations, efficient workforce.
Opened up access to the European Union, avoids EU tariffs, boost sales
of cars in Europe.
Local air links via EMA to Japan where parent company is located

Toyota good or bad for Derby/East Midlands?

Created many jobs in an area where unemployment > national
average.
Boosts spending in the local economy (multiplier effect)
Boost for local industries (=industrial linkage)

 Enhances the image of the East Midlands global brand/success story,

others follow
BUT . . . . .
Decisions made abroad whats best for Japan or best for the UK?
Built on brownfield site, but in a rural greenbelt area opposition from
local villages such as Etwall and Findern.
Danger in the region becoming overdependent on a single employer
what would happen to the economy/linked industries if sales fall and
Toyota pull out of the UK?