Western european car industries

There are a lot of factors that determines whether or not a company will be successful. These factors are usually derived from economics. One factor that I plan to focus on is scale economies or better known as economies of scale. Firms that have expanded their scale of operations to obtain economies of mass production have survived and flourished. Whereas smaller firms who have not been able to expand have usually ended up as high-cost producers. The topic discussed will be the Italian automotive industry and how it is affected by economies of scale.

As the economic integration of Europe continues, it is likely that increasing international competition will affect firms in European industries. As other countries expand and have more trade worldwide, the more the European economy will be affected. The economy will tend to buy from outside of Europe due to taste and lower prices. There would be more firms to choose from decreasing Economies of scale are significant because motor vehicle manufacturing is an industry based on growth. Since the automotive industry being discussed is in Italy, it is based primarily around one company, Fiat. The majority of sales of automobiles in Italy are acquired by Fiat. The automotive industry constitutes a substantial part in the European economy because this industry makes up 10 percent of total manufacturing output.

An economy of scale is an important factor within the Italian automobile industry. This is due to continuing European integration and that the Italian automobile industry is dominated by a company known as Fiat. Fiat was founded in July 1899. Fiat started with a plant in New York that manufactured then established relationships with other countries leading to exports to France, Austria, Great Britain and Australia. Since Fiat was called on for a lot of equipment during WWI, Fiat became well known throughout Europe. As years passed Fiat began to also acquire other automobile companies such as Lancia, Autobianchi, Abarth, Alfa Romeo, Maserati and Ferrari. In 1988, 59.9% of the vehicles sold and approximately 99.2% of the automobiles produced in Italy were made by Fiat. The company continued to enter numerous international agreements for the manufacturer of Fiat products and to expand its investments. This also lead to new factories that were built outside of Italy, which were South Africa, Yugoslavia, Argentina, Turkey and Mexico. The Fiat Group expanded internationally by making a major capital increase, huge investments in innovation, applying cost cutting measures and a restructuring program.

Economies of scale are reductions made in the average total cost of producing a product as the firm expands the size of its output in the long run. An economy of scale is based on mass production. For example, Fiat knew that the company's future was largely influenced by the development of mass production in Italy. As plant size increases, a number of factors will reduce average costs of production. Factors such as managerial specialization, labor specialization, and efficient capital define economies of scale.

Managerial specialization is used when large-scale production, such as an automobile industry, needs better and efficient use of management. For example, let's say Fiat had a supervisor at a plant that supervised thirty employees but the same supervisor was highly skilled in managerial procedures. If he/she could supervise fifty employees, then Fiat should have that supervisor manage fifty employees instead of thirty or fewer employees. This way Fiat would save money on additional supervisor costs. Managerial specialization on a large scale also means that the expert can focus on one department instead of various departments.

Labor specialization is increased when the use of labor becomes more achievable as a plant increases in size. If a company is able to hire more and more workers that means more jobs and each worker may only have one task to complete instead of four or five. This way the workers can perform the tasks in which they are skilled in or learn to specialize in one task. Labor specialization works best in a large plant better than a small plant. In a small plant, workers may have more than one task and would have to spend their time working on assignments that they aren't skilled in. Therefore, because these different tasks are being performed by one person the company would have higher production costs. One way Fiat did this was by opening customer assistance centers, workshops and special industrial projects located in Spain, Egypt, Poland and France
Efficient capital usually entails highly productive and expensive equipment. In most industries machinery such as this are only available in large and highly expensive units. Effective use of the equipment demands a high volume of production, which entails large-scale producers such as Fiat. For example, only ten years after its founding, Fiat had increased its capital stock to 12 million lire and had manufactured 1,215 automobiles. A company such as Fiat would be able to afford and use this equipment efficiently whereas a smaller company could not. If a smaller company were to have the same type of machinery then under using it at low levels of output would be highly inefficient and costly. When the Mirafiori plant doubled in size employing over 50,000 people, Fiat was able to expand its production of farm tractors and construction equipment. Not only did the plant increase due to its expansion in employees but also due to its expansion in machinery producing farm tractors and construction equipment.

Fiat was able to use economies of scale to its advantage. Fiat was able to invest in capital and expand not only their company but also the entire automobile industry. Inevitably, economies of scale leads to higher production, which generates better living standards, improve social conditions and increase consumer spending. Thus benefiting the economy as a whole.

Attack on world trade center

Terrorism is the bug of 21 century. Throughout history it has appeared in many various ways: hijacked planes, ships, trains. But never was terrorism committed in such a terrible way as on Tuesday, September 11 in New York City. This tragedy affected us all.

It was nice Tuesday morning. Everybody were rushing to their jobs in the most beautiful and remarkable city of the world. Planes in the sky were usual routine of this city at this time. Manhattan was ready to welcome millions of its residents and tourist.

Everybody were going about their businesses. There was illusion that nothing can disturb this normal existence.

Rapidly, two passenger planes, like envoys of terror, crashed into both towers of the World Trade Center. Pieces of debris came down with a terrifying thunder. Screams of terror could be heard through hearts of thousands people from all over the world. Ten minutes later, people all over the world with shocking fear could observe how two highest buildings of the world were collapsing carrying away thousands of innocent lives. People stood staring in awe at the empty space, which once was the Tenth Wonder of the World. Now, this is just a cloud of dust. Many firefighters and police officers rushed into the burning buildings to save innocent lives. At this time they weren’t thinking about their own lives.

I woke up about 9 o'clock. As usual I turned on the TV. I saw a terrible image of one tower and a lot of smoke was coming out of it. Still not realizing what was happening, I went to another room to pack my stuff in order to go to college. At this time I was thinking that it was just a regular fire and nothing serious. When I got on the bus I saw unusual commotion among people. I could feel panic and fear among people. I wanted to use my cell phone to call my friend to find out if he’s ok, but it did not work.Everybody were talking about the attacks of terrorists, but I never thought that World Trade Center could collapse, just disappear. I heard that Twin Towers collapsed when I was in my music class. I still could not realize what was happening in NY. I got out from Brooklyn College and I went to Flatbush Avenue. There I saw skies full of black smoke. I was astonished.

What is going to happen next? Is it a war? All these questions were flying in my mind. I couldn’t believe what happened. I was very upset and wondering if things ever be normal again. When I came home, I turned on the TV and I kept watching it over and over again. It was unbelievable. For me and I think to everybody else. It didn’t seem real, it was more like a horror movie, but unfortunately it wasn't. I have never seen anything like this before and I hope I won't see it again.

The Pentagon. I could feel sense of security and protection when I was hearing this word. This department is supposed to be the guard of America! How could it be attacked? These terrorists showed us that they could attack any place in the world. Twins Towers, Pentagon, what else? I heard thousands times that Washington D.C has the best security. Nothing is allowed to fly over Washington D.C. Are we that vulnerable? How is it possible that US Air Force did not attack this aircraft?
It was awful. How could it happen to New York? This is truly a great loss and tragedy. WTC was the symbol of United States, the symbol of freedom, of capitalism, and democracy. Twin Towers were the image of the whole Manhattan, and United States. I cannot imagine Manhattan without Twin Towers. There is no place in the world where I can feel myself safe after attack on World Trade Center and Pentagon.

Maybe some day, in some way, the world will understand what happened in New York. Who ever did this had too much hate and actions like this are not justified by anything.

Asbestos regulations are important

EPA estimates that asbestos fibers contribute to 7,500 deaths per year in the United States. Most uses of asbestos have been banned since asbestos was found to cause lung cancer and other respiratory diseases in humans. However, it is estimated that 30 million tons of asbestos were used in thousands of building products since the late 1800s. Asbestos-containing building materials are commonly found in buildings constructed prior to the mid-1970s. The asbestos regulations currently in place are necessary to ensure that people are not exposed to airborne asbestos fibers when buildings are remodeled or demolished.
What are the statutes and regulations and to whom do they apply?

The regulations apply to remodeling or demolition projects which occur in public or commercial buildings. Private residences and apartment buildings with four or fewer dwellings are exempt from the regulations. Any project which is subject to these regulations requires a notification to the department within 10 working days prior to the start of the project.

Respondent Fibreboard Corporation, an asbestos manufacturer, was locked in litigation for decades. Plaintiffs filed a stream of personal injury claims against it, swelling throughout the 1980’s and 1990’s to thousands of claims for compensatory damages each year. Fibreboard engaged in litigation with its insurers, respondent Continental Casualty Company and respondent Pacific Indemnity Company, over insurance coverage for the personal injury claims. In 1990, a California trial court ruled against Continental and Pacific, and the insurers appealed. At around the same time, Fibreboard approached a group of asbestos plaintiffs’ lawyers, offering to discuss a “global settlement” of Fibreboard’s asbestos liability. Negotiations at one point led to the settlement of some 45,000 pending claims, and the parties eventually agreed upon $1.535 billion as the key term of a “Global Settlement Agreement.” Of this sum, $1.525 billion would come from Continental and Pacific, which had joined the negotiations, while Fibreboard would contribute $10 million, all but $500,000 of it from other insurance proceeds. At plaintiffs’ counsels’ insistence, Fibreboard and its insurers then reached a backup settlement of the coverage dispute in the “Trilateral Settlement Agreement,” under which the insurers agreed to provide Fibreboard with $2 billion to defend against asbestos claimants and pay the winners, should the Global Settlement Agreement fail to win court approval. Subsequently, a group of named plaintiffs filed the present action in Federal District Court, seeking certification for settlement purposes of a mandatory class that comprised three groups–claimants who had not yet sued Fibreboard, those who had dismissed such claims and retained the right to sue in the future, and relatives of class members–but excluded claimants who had actions pending against Fibreboard or who had filed and, for negotiated value, dismissed such claims, and whose only retained right is to sue Fibreboard upon development of an asbestos-related malignancy. The District Court allowed petitioners and other objectors to intervene, held a fairness hearing under Federal Rule of Civil Procedure 23(e), ruled that the threshold Rule 23(a) numerosty, commonality, typicality, and adequacy of representation requirements were met, and certified the class under Rule 23(b)(1)(B). In response to intervenors’ objections that the absence of a “limited fund” precluded Rule 23(b)(1)(B) certification, the District Court ruled that both the disputed insurance asset liquidated by the $1.535 billion global settlement, and, alternatively, the sum of the value of Fibreboard plus the value of its insurance coverage, as measured by the insurance funds’ settlement value, were relevant “limited funds.” The Fifth Circuit affirmed both as to class certification and adequacy of settlement. Agreeing with the District Court’s application of Rule 23(a), the Court of Appeals found, inter alia, that there were no conflicts of interest sufficiently serious to undermine the adequacy of class counsel’s representation. As to Rule 23(b)(1)(B), the court approved the class certification on a “limited fund” rationale based on the threat to other class members’ ability to receive full payment from Fibreboard’s limited assets. This Court then decided Amchem Products, Inc. v. Windsor, 521 U.S. 591, vacated the Fifth Circuit’s judgment, and remanded for further consideration in light of that decision. The Fifth Circuit again affirmed the District Court’s judgment on remand.