Introduction Within the processes of global economic restructuring, organisations defending the interests of workers, especially trade unions, are faced with enormous challenges. These organisations have severe difficulties in using social answers to counter the neoliberal offensive and the change in economic conditions. The reasons for this political weakness are manifold. This paper focuses on one aspect which is decisive for the structural weakness of trade unions and other social movements; it deals with the question of scales. Multinational corporations (MNCs) shape space in the most far-reaching way. They have an integrated vision of space which is based on their capital accumulation requirements and on their power over specific places. Therefore, not only do they structure space very powerfully and coherently, but they also have a strong influence on the economic and social relations in these places. This very coherence brings about a sharpened competition between the places in which MNCs are located. Labour movements ölocal actors in associations or in state authorities öoperate within a local, regional, or national framework. They have to be competitive against other regions and places (Harvey, 1989b). In sum, actors in labour movements, and even in local authorities, act fragmentedly without a general economic, social, and spatial vision of reality. Neither unions (or political actors) nor state authorities have at their disposal the instruments and power to shape space, and therefore also specific places, to the same extent as the MNCs. Rescaling power relations between trade unions and corporate management in a globalising pharmaceutical industry: the case of the acquisition of Boehringer Mannheim by Hoffman ^ La Roche Christian Zeller Department of Geography, University of Hamburg, Bundesstrasse 55, D-20146 Hamburg, Germany; e-mail: zeller@geowiss.uni-hamburg.de Received 12 June 1999; in revised form 20 November1999 Environment and Planning A 2000, volume 32, pages 1545^ 1567 Abstract. Multinational corporations (MNCs) are reorganising their production systems. Many MNCs are integrating their production on a continental scale and allocating specific responsibilities and tasks to their research centres on a global scale. Empirical research on the pharmaceutical industry suggests that the spatial reorganisation of the production system can be understood as a process of reterritorialisation and deterritorialisation on different scales. In this paper I outline how MNCs in the pharmaceutical industry are responding to the challenges of the changing economic environment. The ongoing restructuring and rationalisation in the Swiss pharmaceutical giant F Hoffmann ^ La Roche serves as an example. The recent acquisition of the German pharmaceuticals and diagnostics company Boehringer Mannheim by F Hoffmann ^ La Roche illustrates how such huge business transactions meet with trade unions which are completely unprepared. I also discuss the responses of trade unions in different affected locations to the ongoing spatial industrial reconfiguration. Whereas the executive committees of MNCs think, develop their strategies, and act on a global scale trade unions, social movements, and local governments are, in contrast, locally and nationally anchored. They have not been able to break out of the cage of localism and the national state with their concepts and activities. This structural inequality is one of the reasons for the loss of importance and credibility of trade unions. Therefore, labour must adopt a new approach to the spatial and social scales of its political practice.