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End of the Line: The Rise and Coming Fall of the Global Corporation Paperback – August 8, 2006
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End of the Line is the first real anatomy of globalization. It is the story of how American corporations created a global production system by exploding the traditional factory and casting the pieces to dozens of points around the world. It is the story of how free trade has made American citizens come to depend on the good will of people in very different nations, in very different regions of the world. It is a story of how executives and entrepreneurs at such companies as General Electric, Cisco, Dell, Microsoft, and Flextronics adapted their companies to a world in which America’s international policies were driven ever more by ideology rather than a focus on the long-term security and well-being of society.
Politicians have long claimed that free trade creates wealth and fosters global stability. Yet Lynn argues that the exact opposite may increasingly be true, as the resulting global system becomes ever more vulnerable to terrorism, war, and the vagaries of nature. From a lucid explanation of outsourcing’s true impact on American workers to an eye-opening analysis of the ideologies that shape free-market competition, Lynn charts a path between the extremes of left and right. He shows that globalization can be a great force for spreading prosperity and promoting peace—but only if we master its complexities and approach it in a way that protects and advances our national interest.
- Print length320 pages
- LanguageEnglish
- PublisherCrown
- Publication dateAugust 8, 2006
- Dimensions5.5 x 0.8 x 8.25 inches
- ISBN-100767915879
- ISBN-13978-0767915878
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Editorial Reviews
Review
—Douglas Brinkley, Professor of History and Director of the Roosevelt Center at Tulane University
“Barry Lynn puts the spotlight on the dangers of our over-outsourced economy. A catastrophe in a remote province of China can put a large part of the American electronics industry out of business. Our business leaders are so focused on the next quarter bottom line that they overlook the dangers of losing control of their supply lines. There are serious national security questions raised as well. Lynn has used his investigative skills to clearly and readably explain this danger to the general public.”
—Arthur Hartman, former U.S. ambassador to the Soviet Union and France
“The benefits, dangers, and sheer inevitability of global competition are the central forces shaping the economic and social future of the United States. Barry Lynn’s book, based on careful reporting, is a real step forward because it dramatizes the stakes for Americans and clarifies the choices the country has to make.”
—James Fallows, author of Breaking the News and national correspondent for The Atlantic Monthly
“Striking in its clarity and originality... Merely for cleanly spelling out the fragility of our globalized production system and what needs to be done to avoid the possibility of catastrophic failure, this is one of the most important books on globalization in a decade."
--Michael Borrus, former director of the Berkeley Roundtable on the International Economy and executive in residence at Mohr Davidow Ventures
“Tom Friedman for grown ups.”-- The Washington Post
“A great primer on the history of the corporate movement toward outsourcing, logistics and single sourcing… A strength of the book is Lynn's depth of research into the political, economic and cultural climates that led to our current business model.” -- USA Today
“A brilliant examination of the global economy and its danger zones. It's a book everyone concerned about our national and economic security should read.” --Milwaukee Journal-Sentinel
From the Back Cover
"End of the Line is the first real anatomy of globalization. It is the story of how American corporations created a global production system by exploding the traditional factory and casting the pieces to dozens of points around the world. It is the story of how free trade has made American citizens come to depend on the good will of people in very different nations, in very different regions of the world. It is a story of how executives and entrepreneurs at such companies as General Electric, Cisco, Dell, Microsoft, and Flextronics adapted their companies to a world in which America's international policies were driven ever more by ideology rather than a focus on the long-term security and well-being of society.
Politicians have long claimed that free trade creates wealth and fosters global stability. Yet Lynn argues that the exact opposite may increasingly be true, as the resulting global system becomes ever more vulnerable to terrorism, war, and the vagaries of nature. From a lucid explanation of outsourcing's true impact on American workers to an eye-openinganalysis of the ideologies that shape free-market competition, Lynn charts a path between the extremes of left and right. He shows that globalization can be a great force for spreading prosperity and promoting peace--but only if we master its complexities and approach it in a way that protects and advances our national interest.
About the Author
Excerpt. © Reprinted by permission. All rights reserved.
THE OLD WEST
Running from Japan
He had been called an “ax murderer,” a “hitman,” the “grand inquisitor.” But the first public appearance in America by the man tapped to save General Motors, Jose Ignacio Lopez de Arriortua, revealed an executive who knew exactly what his audience wanted to hear, and who seemed a little goofy besides. “We are in a war,” Lopez declared to an audience of GM executives and reporters in Saginaw, Michigan. The fight was “to save the auto industry and our lives,” to keep “our sons and daughters” from becoming “second-class citizens” in the global economy. “We must act. We must win. We cannot afford to lose.”(1)
It was August 1992, and America’s carmakers had for years longed for a savior in their battle against the Japanese. Lopez seemed the perfect man for the role. A native of Spain’s gnarly northern Basque region, the fifty-one-year-old Lopez was dark, wiry, electric, and he came to the job with a reputation as a visionary who could turn vicious. In a twelve-year career with GM in Europe, he had earned such nicknames as “Lopez the Terrible,” “Hurricane Lopez,” and “The Spaniard Who Makes the Germans Tremble.” And he had delivered, slashing the cost of the parts that went into General Motors’ European cars. Best of all, he bragged that he had improved on Japan’s vaunted and seemingly invulnerable manufacturing model, adding “scientific method” to Japanese “intuition.” Yet Lopez also exuded a quirky charm. In Saginaw, he told reporters that his role model was Mother Teresa, whom he called a “great service provider.” He explained that he and his staff had moved their watches from their left wrists to their right and that they planned to keep them there until GM reported “record profits.” The point, he said, was to feel “something like pain.”(2)
Financial pain was exactly what General Motors had been feeling for years. In 1991, the company had lost some $7 billion in North America, and the erosion of GM’s share of its home market was accelerating. The crisis had become so bad that GM had taken to acting out of character. The world’s largest corporation, the company had long been famous– and increasingly infamous–for the extreme deliberation with which top management made decisions. Yet in April, GM’s board had staged an unprecedented coup, abruptly dumping CEO Robert Stempel after less than two years on the job. In his place the board named Jack Smith, the head of GM’s European operations. And Smith came loaded with Lopez, who had been one of his key lieutenants in GM’s European headquarters in Zurich.(3)
Lopez took little time in making a name for himself in his newly created job as GM’s purchasing czar, mainly by forcing suppliers to cut their prices drastically if they wanted to keep GM’s business. Though he was virtually unknown in America when tapped for the job in April, by August BusinessWeek was able to write that “not since Ralph Nader has one man so shaken Detroit.” Autoworkers and suppliers quickly came to regard Lopez as more akin to the Grim Reaper, and the UAW quickly responded to Lopez’s all-out assault on suppliers with a nine-day strike in Lordstown, Ohio, which ultimately forced the shutting of seven big plants. The owners and managers of the supply fi rms seemed no happier, though they dared not criticize Lopez openly. Yet for many Americans, after years of bad news about the failings of the country’s manufacturers, Lopez seemed a welcome, even bracing, change. And he certainly made great copy.
However much he bragged of the rationality of his methods, Lopez also injected a rather pre-Enlightenment ethic into the climate-controlled corridors of General Motors. His procurement team, he said, was made up not of midmanagers but “warriors.” On-target bids by suppliers were welcomed not with congratulatory memos but loud shouts and pounding on tables. Lopez reminisced of his peasant upbringing, and claimed inspiration from his “namesake” St. Ignatius de Loyola, the founder of the Jesuits and a fellow Vizcayan. He arrived at work at 6:30 A.M., stayed ?fteen hours, worked weekends. To journalists, he lamented how much he missed his wife and three daughters, how he had lost weight since taking the job in Detroit. USA Today published a copy of his “Warrior Diet,” reporting that “its popularity is growing at General Motors.” The diet was designed to provide “maximum energy” for long days. “You may eat meat, seafood, cheese–whatever you like,” Lopez told the reporter. “But don’t combine them with vegetables or salad.”(4)
The Lopez regime seemed the perfect prescription for America in the early 1990s. In the popular imagination, American manufacturers had grown lazy and fat, and now an ascetic visionary had arrived to preach austerity. And he did it in a language Americans understood. Lopez seemed able to translate the secrets of Japanese-style manufacturing into America’s rougher culture. Japanese companies may boast about how they provide “lifetime employment” to their employees, who are treated as members of “teams,” who wear spotless uniforms, who gather in the morning for calisthenics. Lopez instead prescribed a good old-fashioned American-style cracking of the whip. And sometimes his methods came to seem like a Detroit-style gang rumble. As the sales manager for one supplier put it, Lopez “hits you over the head with a two-by-four and starts you bleeding.” But it was all for your own good. Once Lopez had captured your attention, the sales manager said, he then “helps you heal.” And Lopez also seemed to understand that the American appetite for flagellation is limited. So he tossed out bonbons of praise for the American worker, along with chunks of raw meat, assailing the Japanese as well as anyone. “Japanese competition is unfair,” he said. “We mustn’t be naïve [and] give advantages to someone withough receiving anything" in return.(5)
Lopez’s success ultimately would have to be measured not in the American press but on the factory floor and on GM’s bottom line. By almost all accounts, he did exactly what he was hired to do. Within a year, General Motors had cut some $4 billion in costs, and upon Smith’s retirement in 2003, Lopez was still receiving much of the credit for GM’s strong performance in the intervening ten years. Yet Lopez’s real importance was due to much more than a simple cost-cutting campaign. Rather, it was the shift in attention from the assembly line to the “chain” of supplies that fed onto the factory floor. For much of the 1980s, American executives who fretted about competitiveness focused much of their attention on the efficiency of their great assembly plants. Debates centered on the arrangement of machines, the number of robots to put on the line, the integration of computer controls, the ability of managers to tap into the knowledge of their workers.(6)
Now Lopez put on the table an even more formidable issue–how to improve the workings of the suppliers. The scope of the task was immense: Up to 90 percent of the value of any product is created before the fi nal assembly process, and the manufacturing of parts and components is often scattered among hundreds of small plants. And so, too, the inertia. For more than a half century, the basic model for supplier relationships in the automotive industry–as in all mass manufacturing–had remained largely unchanged. Big manufacturers expected suppliers to locate near the final assembly plants. They expected them to provide good products; if not, the company might shift work to another supplier or take over the activity itself. And they expected suppliers to follow orders, or at least to follow the blueprints drawn up by the engineers in the central design office. The ultimate goal was an uninterrupted flow of components of reasonable quality to the final assembly line. Now Lopez and a few fellow pioneers in other companies set out not only to remake this system from the ground up, but to dig up the foundations as well.
By no means was Lopez the first executive to target the supplier base, but he was one of the loudest and most successful. And his work was important not least because of the target of his efforts. General Motors for decades had served as one of the main standards against which the wages of the nation were set, against which productivity was measured, against which the relative political power of other corporations was weighed. Although the firm had begun to reconsider how work was distributed between in-house operations and suppliers in the 1980s, the initial efforts were limited in scope and strongly opposed by unions. Now Lopez had greatly accelerated GM’s outsourcing, had carried the effort into parts of the firm that had long been off-limits, and most dramatically was now ramming the process down into and through the supplier base itself, dictating to an ever-greater degree how companies external to GM would do their business and where.
GM's European operations, Lopez had forced purchasers at Opel to cut off local German suppliers in favor of companies as far away as Spain and Turkey. Now in America he did the same, sending his buyers to seek out new suppliers in Canada, Mexico, even back in Europe.(7) Then, to take full advantage of this escape from geography, Lopez pushed his buyers to “rationalize” their purchases, which meant buying as much as possible from one supplier, even if far away, in order to enjoy the efficiencies of bigger production runs. Finally, Lopez sought to overturn the rules on who in the supply chain did what. The top-down, command-and-control relationship between GM and its suppliers led, he believed, to stasis and waste. Lopez now not only demanded that GM’s suppliers deliver more for less, but he also urged them to take more responsibility for engineering their products and for managing lengths of the assembly line. Lopez not only wanted GM’s suppliers to be leaner, he wanted them to be smarter and more self-directing as well.
Lopez was not a shy man, and he very much wanted everyone to understand what was happening. What was taking place, he declared repeatedly, was nothing less than a “third industrial revolution.”(8) First came the introduction of machines to make textiles early in the nineteenth century. Then came the rise of mass manufacturing early in the twentieth century. Now, in 1992, Lopez presented himself as a leader of a movement that was chopping the assembly line into new pieces, giving many of these away to suppliers, then scattering the suppliers around the world.
It was a radical change. And because it took place at a time when politicians were reconsidering the role of the state in managing the global economy, and at a time when new information technologies were exploding onto the marketplace, the overturning of the old industrial order that Lopez was helping to set into motion would have ramifications far greater than anyone at the time imagined, and would spin off in directions no one expected. Its effect went far beyond the American production system and America’s competition with Japan. In America, the outsourcing revolution would speed up radically a process that was remaking a society that had structured itself to a large degree around the modern industrial corporation. Around the world, it would speed the abandonment of many of the political strategies that for decades had served to keep the world peaceful and prosperous.
*****
In our popular memory, the 1980s often look pretty good. After defeat in Vietnam and humiliation in the Iranian hostage crisis, President Ronald Reagan urged Americans to feel proud again. He stared down the Soviets and oversaw a long economic boom. After the wild times of the 1970s, America seemed to have regained its balance. OPEC had been cracked, inflation sapped, Studio 54 closed, the Bee Gees relegated to the cutout bin of history. America was back, sober, strong, purposeful. The feeling reached a sort of apotheosis in July 1986, when Time magazine published a cover of a beaming Reagan surrounded by exploding fireworks. The article was titled “Yankee Doodle Magic.”(9)
On the streets of much of America, though, the 1980s were also a time of great economic pain and fear, even a sense of national drift and decay. In the first few years of the Reagan Administration, a series of huge layoffs shook the Northeast and Midwest. Steel and textile plants were shuttered, automobile and truck manufacturers laid off workers by the tens of thousands. The media began to refer to America’s “Rust Belt.” Bruce Springsteen sang gloomy odes to a lost industrial-town paradise. In the past, change had always seemed a prelude to progress and growing national power. Now many Americans felt they would have to lower their expectations, to compromise, both at home and around the world. A famous ad for Reagan’s 1984 reelection campaign declared it was “Morning in America."(10) Perhaps so, but in much of the country the factory whistle no longer sounded the start of work.
For many Americans, Japan symbolized all these various pains. It was Japanese competition that meant unemployment here at home and the loss of industrial arts. It was Japan that meant a weaker America and the loss of our cherished isolation. A low point of sorts was hit right at the end of the decade, when a unit of the Japanese conglomerate Mitsubishi forked over $846 million cash for 51 percent of Rockefeller Center. Pearl Harbor II it wasn’t, but the October 1989 deal delivered a shock to the American psyche. The country’s long, lazy national economic decline seemed complete. A far-off Asian nation, one that had been smashed by American military and industrial might only four decades before, had seized hold of one of the premier landmarks in America’s greatest city. And it did so only four years after driving the most famous occupant of that building–the once all-mighty electronics pioneer RCA–into a desperate merger with General Electric.
Product details
- Publisher : Crown; Reprint edition (August 8, 2006)
- Language : English
- Paperback : 320 pages
- ISBN-10 : 0767915879
- ISBN-13 : 978-0767915878
- Item Weight : 13 ounces
- Dimensions : 5.5 x 0.8 x 8.25 inches
- Best Sellers Rank: #2,549,376 in Books (See Top 100 in Books)
- #771 in Oil & Energy Industry (Books)
- #2,352 in International Economics (Books)
- #2,460 in Globalization & Politics
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About the author

In his first book - End of the Line (2005) - Barry wrote a pathbreaking study of industrial systems made "Too Big to Fail" and of the dangers of overly extreme interdependence among nations. The Washington Post called End of the Line "Tom Friedman for grown-ups" and Ha Joon Chang compared that work to the writings of John Kenneth Galbraith. In Cornered, Barry takes an explosive look at how financiers use their powers in ways that destroy jobs, crush independent businesses, hobble innovation, degrade safety, harm our environment, and, most dangerous of all, threaten the political foundations of our democratic republic. Barry is director of the Markets, Enterprise, and Resiliency Project, and a senior fellow, at the New America Foundation. He has presented his work to high officials in Japan, Germany, Britain, France, Taiwan, and the European Commission, as well as the White House and U.S. Treasury.
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But then what made the major multinationals to place all their eggs in one basket or that matter in a few baskets far away from home ?. The author traces this fundamentally to the Japanese onslaught of the American car and electronics markets in the 80's. America had to respond. One way was to outsource manufacturing to the cheapest possible source. Asian countries like China, Taiwan and Singapore were ideal candidates with low labor costs. The cost pressure was further extended down the supply chain and soon a cost effective supply capability emerged to counter and finally overcome the Japanese threat. But in the process, argues the author, American companies have sacrificed manufacturing as a strategic tool that needs to be retained with investment and constant innovation. Companies like Cisco for example rapidly grew through global acquisitions for technology and partnering with contract manufacturers like Flextronics. Shareholders were happy, but the interests of other stakeholders like employees, consumers and national self competencies in manufacturing were sacrificed.
American dependence on China ( and vice versa) is brought out as a major risk for America. How long and how much could two nations with diametrically opposite political ideologies grow this equation is a big question.
Diversification of risk - market, financial, political and geographic are the elements of any introductory book on business strategy. This book is a call to major multinationals to brush up their elementary lessons once again.
There are clear recommendations at the end of the book to correct the course and secure the future of nations from the risks of asymmetries in the global supply chain. America for example could invoke the provisions of the Antitrust laws and limit the percentage of supplies originating from a single nation and make second sourcing mandatory. De-linking CEO compensations from short term performance is another factor that is highlighted.
The pendulum of power as of now is closer to Wall Street and far away from Washington. But the pendulum does swing as per the basic laws of physics. Back to basics is the key message from this book.
This book should not be misunderstood as a criticism of globalization. In just suggests a better and safer approach.
Lynn's point in End of the Line is to remind us that the global economy is, like all human creations, a grand improvisation that creates and distributes wealth in ways that are beyond the control of its designers in business and government. Lynn has penned a wise, witty and at times angry look at globalization that departs from the stale argument about whether global capitalism is good or bad in favor of a far more subtle, and scary portrait of a risk laden production system that is, at least for now, beyond any government's control. End of the Line is a meditation on what happens when short term self-interest leads global businesses to make bottom line decisions that enhance their own profitability in ways that increase the vulnerability of the system as a whole, and governments abdicate their responsibility to monitor and manage an economy - even a global economy - for the sake of the common good.
Lynn asks us to see the global economy as a vast and intricate system of economic plumbing that links suppliers and customers in every corner of the globe. This plumbing system is nothing but an ever evolving set of connections that becomes denser when corporations outsource their operations to producers in lower cost countries in order to provide customers with high quality products at low prices. The global growth of free trade, with relatively little regulation or oversight by governments in the interest of global prosperity, has been an immense boon to the fortunes of millions of previously desperately people around the world, whose incomes and life chances have blossomed because they are making goods and services that people in rich countries want and need.
Yet, common sense tells us that an unregulated plumbing system, left to grow by itself without any supervision or rules, is bound to develop all sorts of problems that mushroom into total system failure under the wrong circumstances. Imagine the eventual public health disaster that would happen in a city that let all building and homeowners make their own connections to the main water and sewer lines. The resulting mess would poison our water and cities with filth because no agent was responsible for managing the system in the interest of the community as a whole. A smooth flow of water and sewage requires regulation of the rational plumbing system in order for everyone to prosper from the use of water and the proper management of waste.
End of the Line makes an urgent yet curiously under-appreciated point: The contemporary global economy is a very leaky plumbing system that is subject to catastrophic breakdown because its evolution is driven by the private interests of global corporate managers rather than the common good. This leaky plumbing system is the result of a deliberate choice by the global government - the United States - to refrain from managing the world economy in our nation's interests in favor of a utopian vision of a planet wide free market that would regulate itself, and thereby eventually enrich the world. Lynn has bad news for all who believe that the free market is all the world needs to have peace, security and stability: the breakdown of the global economy's plumbing will lead to the same kind of mess as an unregulated system of city plumbing unless we are smart enough to realize that a free market requires a strong, smart and wise government to deftly manage the world economy with a light but competent touch.
End of the Line is not an anti-globalization screed about how global capitalism is destroying the world's poorest people, or poisoning our environment, or generating corruption on an epic scale. Instead, Lynn wants to alert us to the fact that we have created a global economy where a natural disaster or political conflict could disrupt the entire system in ways that threaten the well-being, or in extreme cases, the lives of millions of people. The culprit here is the old conflict between the private and the public interest, this time played out on a global scale. Lynn wants us to see how our love affair with the free market has, inadvertently but predictably, created economic insecurity that can only be handled by government or governments.
The lesson that Lynn drives home is clear and difficult to avoid: either the leading power in the global economy - the United States - will step up to the task of managing capitalism in its own interest in light of its sense of the legitimate interests of the rest of the world or some other power will take over global leadership. If, no when, the global system's plumbing breaks down in the future, some nations or group of nations will fix the resulting mess, and promulgate rules and regulations to reduce the likelihood of system failure in the future. The US cannot afford to wait so long that some other power or powers, with the approval of the rest of the world, offer a credible alternative vision for managing the global economic system in light of their own interests as well as their understanding of our interests. Such a circumstance is a sure road to conflict - hot or cold, or both.
End of the Line is also an announcement of a new type of American economic nationalism, where Lynn makes a case for a strong American role in the management of the global economy in the interest of the American people. According to Lynn, the threats to global economic security and American prosperity are the result of the deliberate policies of the Clinton administration, which foolishly downgraded the role of the US government in building and managing global trade in favor of free market ideologies that ignore the historical fact that markets function best when governments intervene with the right mix of wisdom and restraint. The Clinton administration portrayed in End of the Line looks less like the interventionist, big government liberals bent on supplanting free markets with government power in the interest of some idea of justice or the social good and more like a successor to the Reagan/Bush the Elder administrations' project of restraining and rolling back the New Deal in favor of the revival of capitalism "red in tooth and claw". Sections of End of the Line suggest that Clinton and his associates are better seen as the second of three successive Bush administrations - with Clinton et al as the not-well-loved but useful adopted children of the Elder Bush and disdained siblings of Bush the Younger - bent on rationalizing and consolidating the Reagan revolution against a strong US government in economic affairs. This indictment, which will outrage as many Democrats as Republicans, is essentially right: Clinton was the kinder, gentler Bush whose paternalistic worries about the common man and woman never deflected him from the path of opening the US economy to the gales of creative destruction and globalization which drive growing income disparities at home and, according to Lynn, increasing economic insecurity in the global economy overall. Lynn treats Clinton and the Democrats of his era as people who try to soften the blow that the global march toward capitalism must deliver to weak Americans rather than a force trying to create a new social contract that spread the fruits of wealthy widely while preparing us all to live a very competitive economic world.
This book is, among other things, a powerful salvo in the war between Democrats over the future of the party, and therefore the nature of progressive politics in this country. Let the fight over the future of the Democratic Party - or more likely, its successor - begin in earnest.

