Section Twowhich Whirlpool appliances carry the Philips brand in European
markets.^52 Another strategic issue involves the entry of several
Eastern European countries that are negotiating for entry into
the European Union.^53 Such memberships are important
strategic human resource issues because they determine the
ease of utilizing human resources across borders, as well as the
markets for companies’ products.^54 At this point, there is
uncertainty about many of the human resource implications of
these developments.
From a more regionalized perspective, the North
American Free Trade Agreement (NAFTA) has added more
flexibility in the location of production facilities. Prior to NAFTA,
U.S. automobile manufacturers located assembly plants in
Mexico in order to have access to the Mexican market. A NAFTA
time schedule phases out tariffs on U.S. automobiles imported
into Mexico as long as 62.5 percent of their costs come from
North American production.^55 On one hand, because NAFTA will
allow automobiles to be imported from U.S. plants without
tariffs, there is less incentive to shift production facilities to
Mexico. On the other hand, lower labor costs in Mexico as well
as Canada argue for establishing plants in Mexico and Canada
to take advantage of their lower labor costs. (As noted in Case
2-1, plant construction costs are higher in Mexico.) It is likely
that many jobs requiring high skills will be created and retained
in the United States, while a substantial number requiring lower