Globalization, generally speaking, refers to the integration of the global economy (Hanson, 2001) as economic resources, especially the means of production and capital, move freely across national boundaries, thanks to a regime of lower tariffs, reduced trade restrictions, greater access to information, and the enactment of laws and formulation of policies that offer various inducements to the foreign entity to re-locate to a destination outside the confines of national boundaries.
The globalization of production has meant that one of the most enduring concepts in economics, David Ricardo’s, comparative advantage (Hollander, 1979), no longer means that countries may only specialize in the production of goods for which they have been historically deemed to be most suitable in terms of their endowment of economic resources and other factors that give them a relative comparative advantage in the production of these goods (Porter, 1990).
The principal vehicle of global change in production has been the multinational or trans-national corporation (Lagace, 2002). The MNC carries with it the wherewithal for setting up production facilities far removed from the country of origin. It will transplant manufacturing facility, lock, stock and barrel, if necessary, from the home country to the host country. It brings with it capital and skilled manpower and specialized knowledge. It is truly an agent that has all the potential to act as a catalyst for meaningful change.
The United States has been a world leader in manufacturing for the greater part of the 20th century. However its previously seemingly unassailable position as an automotive production powerhouse has been gradually eroded since the 1980’s. Japanese manufacturers with their innovations in, so called, lean production techniques, have consistently outperformed their American counterparts and have been able to come up with a better