Globalising capital, localising labour? The discursive manipulation of scale in philips’ struggle for corporate profitability

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Abstract
The relocation of labour‐intensive production by transnational corporations (TNCs) from high‐wage to low‐wage regions is commonly understood as a response to competitive pressures brought about by globalisation. Justified in terms of maintaining a competitive edge, TNCs have sought out low‐wage locales in what essentially has been a one‐way flow of investment from high‐cost to low‐cost regions. But the relationship between these regions may be changing. Recent rounds of corporate restructuring by TNCs are reshaping the spatial hierarchies of production. TNCs are now free to conduct wage bargaining on a plant‐by‐plant basis with workers in regions throughout the world. Workers in what were relatively privileged locales in North America and Europe must now conduct wage bargaining under many of the same conditions familiar to workers in the newly industrialising countries. This paper considers the case of Philips NV which, like many other TNCs, has been in the process decentralising production while at the same time shedding a number of its plants throughout the world. Charting the international‐isation of Philips, we document how the corporation sought to restore profitability in the face of rapidly growing competition through successive rounds of restructuring and disinvestment. We focus in particular upon the company's attempts to displace the costs of this crisis to workers at the local level through its greater discursive and material command of scale and the manipulation of local embeddedness.