MNC impact on local economy | Edexcel Business

[Maximum number: 12]

Extract A Selected history of Maxion Wheels Maxion Wheels, based in Brazil, was started in 1908 and is now the world's largest wheel manufacturer. It has grown through a series of takeovers including Hayes Lemmerz and Fumagalli, both major manufacturers of wheels and automotive components. Since designing the first wooden-spoke wheels for the Model T Ford car, Maxion Wheels has been responsible for nearly every major wheel innovation in automotive history. Over the course of the last 100 years, it has grown to supply vehicle manufacturers with a wide range of products.

Extract B Maxion Wheels Opens New Aluminium Wheel Plant in Brazil In 2016, Maxion Wheels opened a new light vehicle aluminium wheel plant in Limeira, Brazil. The new plant, next to the company's existing steel wheel plant, will create an additional 500 new jobs by 2020. Brazilian motorists are following the global trend for more sophisticated and stylish vehicles. This includes a growing demand for aluminium wheels on new cars and the new factory will enable Maxion Wheels to meet this increasing consumer demand. The new Maxion Wheels Limeira aluminium plant will open in two phases. In the first phase, production will reach 800,000 wheels per year. Phase two will complete the project, bringing production to two million wheels per year by 2020.

Extract C Selected financial data for Maxion Wheels - third quarter 2021 (Brazilian Reals)

Table for Question 4.3.4.1a - MNC impact on local economy question 1 — Edexcel A-Level Business A2

Extract D Dongfeng and Maxion Wheels form joint venture In 2019, Maxion Wheels announced an agreement to form a new joint venture with Dongfeng, one of China's largest automotive parts companies. The new joint venture will build a plant in Hubei Province, China, with a capacity to produce 2,000,000 wheels a year. Construction of the plant started in 2020. The joint venture operation is expected to initially bring more than 450 new jobs to the region. It will produce low pressure die cast aluminium wheels, including high-end wheel finishes, as well as other innovative wheel features.

Extract E Extracts from Maxion Wheels' Code of Conduct - suppliers - Maxion Wheels requires ethics, integrity and transparency in its supply chain and its relationship with suppliers - Maxion Wheels' employees, directors and officers must act ethically when selecting, contracting and maintaining suppliers - Maxion Wheels' suppliers must not allow child labour or any type of slave or forced labour or compulsory labour - The relationship between Maxion Wheels and its suppliers must be formalised by means of the proper documentation, containing specific details regarding each suppliers' obligation to comply with this Code - Maxion Wheels is committed to sourcing the materials used in the manufacture of its products in a manner that does not support, contribute to, aid or facilitate armed conflicts or human rights violations.

Assess the possible impact on the local economy from Maxion Wheels opening a new plant in a location such as Limeira, Brazil.

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of the
points that candidates may make but this does not imply that any of these must
be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Employment will be created in the construction and operation of the
new facilities in Limeira, Brazil
- Local suppliers and businesses may be involved in providing the
materials and services needed
- 500 new jobs will be created by the new plant in Limeira, Brazil when it
opens
- Those employed will gain disposable income and spend much of it
locally
- Spending of this income creates a demand for more goods and services
in the local area, creating more employment and a positive ongoing
effect
- There is likely to be a rise in local living standards and a more
prosperous community
- Technology transfer may take place improving the prospects for local
businesses
- However, wages and working conditions may not be as good as initially
expected
- Technology transfer may not occur if Maxion Wheels just uses cheap
labour for basic production
- Local businesses may not get contracts for supplying goods and
services, they may be brought in from outside
- The environment may suffer if Maxion Wheels does not fully comply
with any environmental regulations
- Such a large production facility may cause congestion to local
infrastructure

Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.

Level 2

3-4

Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.

Level 3

5-8

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information, though unlikely to show the significance of
competing arguments.

Level 4

9-12

Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.

Question

Assess the importance of supply chain considerations for a global business such as Maxion Wheels.

Indicative content

4.3.4.1a - MNC impact on local economy question 1