PACKING UP, GOING NORTH : A STUDY OF FACTORY RELOCATION FROM SINGAPORE TO JOHOR

Abstract

Most of the products that we use today are manufactured globally. The Ford car, for example, is truly a global vehicle. Different parts of the car are manufactured in different regions: the front wheel-drive in Japan and the other body panels in France, Germany, United States and Spain. Besides the car industry, other industries such as the electronics, textiles and the clothing industries are also undergoing this global shift in production. The relocation of firms in the new international division of labour involves the stringing out of production processes from the core industrialised countries to the peripheral countries. However, in recent years, firms do not only relocate from the core industrialised countries, but also from the semi-peripheral countries. This is the second stage of the new international division of labour. This academic exercise an exploratory case study on the relocation of factories from Singapore to Johor. It sets out to analyse the factors that lead to this resiting of production processes from Singapore to Johor. It shows that firms, in their pursuit of surplus, place different stages of their production in different locations so that they can exploit the different economic, political, social and cultural conditions that are embedded in different locations. Movement of labour across international boundaries in the form of migrant labour, can counter the relocation of production processes from the core to the peripheral countries, if the number of immigrant labour is sufficient to augment the supply of low-wage labour in the core and semi-peripheral countries. However, in this academic exercise, it shows that there are two forces, ie, legal and social forces, that restrict the flow of migrant labour from Johor to Singapore. It shows that firms cannot solely depend on the use of foreign labour to overcome the problem of labour shortages and have to turn to relocation instead.