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These search terms have been highlighted: statistics globalization manufacturing us jobs 1950 2000
Page 1
Globalization and Jobs in the Automotive Industry
A Study by Carnegie Mellon University and
the Massachusetts Institute of Technology
Final Report to the Alfred P. Sloan Foundation
Timothy Sturgeon and Richard Florida
MIT IPC Globalization Working Paper 01-003
Page 2
Globalization and Jobs in the Automotive Industry
A Study by Carnegie Mellon University and
the Massachusetts Institute of Technology
Final Report to the Alfred P. Sloan Foundation
March, 2000
Timothy Sturgeon
Project Director
Globalization Research Director
International Motor Vehicle Program
Center for Technology, Policy, and Industrial Development
Massachusetts Institute of Technology
Bldg. E40-369
Cambridge, MA 02139
Fax: 617-253-7570
email: sturgeon@mit.edu
Richard Florida
Principal Investigator
H. John Heinz III Professor of Regional Economic Development
H. John Heinz III School of Public Policy and Management
Carnegie Mellon University
Pittsburgh, PA 15213
Fax: 412-268-5161
email: florida+@andrew.cmu.edu
Page 3
i
TABLE OF CONTENTS:
1. SUMMARY OF KEY FINDINGS......................................................................1
2. INTRODUCTION.........................................................................................4
2.1 I
S
T
HERE
A
NYTHING
N
EW
A
BOUT
G
LOBALIZATION
?........................................................................4
2.2 T
HE
S
TRUCTURE OF THE
R
EPORT
...................................................................................................6
3. RESEARCH DESIGN....................................................................................8
3.1 P
LANT AND
F
ACILITY
D
ATABASES
................................................................................................9
3.2 F
IELD
R
ESEARCH
: I
NTERVIEWS
..................................................................................................11
3.3 A L
OCATIONAL
T
YPOLOGY
: T
YPE
2, T
YPE
3, T
YPE
4,
AND
T
YPE
1...................................................12
3.4 F
IELD
R
ESEARCH
: A
SSEMBLY
P
LANT
S
ITE
V
ISITS
..........................................................................15
4. WHAT IS GLOBALIZATION?........................................................................17
4.1 T
HE
N
EED FOR A
B
ROADER
A
NALYTIC
F
RAMEWORK
.......................................................................17
4.2 T
HE
G
LOBALIZATION OF
M
ARKETS
V
S
.
THE
G
LOBALIZATION OF
P
RODUCTION
....................................18
4.3 A W
ORKING
D
EFINITION OF
G
LOBALIZATION
...............................................................................19
5. THE HISTORICAL GEOGRAPHY OF MOTOR VEHICLE PRODUCTION..................21
5.1 1890
TO
1910: C
USTOMER
P
ROXIMITY
D
ETERMINES
P
RODUCTION
L
OCATIONS
...................................21
5.2 1910-1919: T
RANSPORTATION
C
OSTS
D
RIVE
O
FFSHORE
P
RODUCTION
................................................22
5.3 T
HE
I
NTER
-W
AR
Y
EARS
: B
ARRIERS TO
T
RADE
D
RIVE
O
FFSHORE
P
RODUCTION
.....................................24
5.4 T
HE
P
OST
-W
AR
B
OOM
: B
ARRIERS TO
T
RADE
D
RIVE
O
FFSHORE
I
NTEGRATION
......................................30
5.5 T
HE
C
RISIS OF THE
1980
S AND THE
R
ISE OF
J
APANESE
A
UTOMAKERS
.................................................35
5.6 T
HE
D
EMISE OF AN
E
XPORT
-
LED
S
TRATEGY
: T
HE
J
APANESE
“T
RANSPLANTS
”......................................36
6. THE CURRENT ECONOMIC GEOGRAPHY OF THE AUTOMOTIVE INDUSTRY .......39
6.1 T
HE
C
ONTINUED
D
OMINANCE OF
T
RADITIONAL
I
NDUSTRY
C
ENTERS
.................................................39
6.2 T
HE
N
EW
R
ACE TO
E
MERGING
M
ARKETS
.....................................................................................44
6.3 W
HAT IS
D
RIVING
E
MERGING
M
ARKET
I
NVESTMENTS
?...................................................................45
6.4 T
HE
O
VERCAPACITY
C
RISIS
........................................................................................................48
7. GLOBALIZATION AND CORPORATE STRATEGY.............................................52
7.1 N
EW
M
ARKET
I
DENTIFICATION AND
A
SSESSMENT
..........................................................................52
7.2 G
LOBAL
P
LATFORMS AND
G
ENERIC
M
ANUFACTURING
C
APACITY
.....................................................53
7.3 S
PREADING THE
R
ISK
: S
TRATEGIES FOR
S
URVIVAL IN
E
MERGING
M
ARKETS
.......................................57
7.4 C
REATING THE
G
LOBAL
W
ORK
-
FORCE
.........................................................................................60
7.5 C
OMPARISONS
A
MONG
F
IRMS OF
D
IFFERENT
N
ATIONAL
O
RIGIN
.......................................................61
8. GLOBALIZATION AND INDUSTRY STRUCTURE .............................................64
8.1 T
HE
R
ISE OF THE
G
LOBAL
S
UPPLIER
............................................................................................64
8.2 W
HY
M
EGA
-M
ERGERS
W
ON
’
T
S
AVE THE
A
UTOMOTIVE
I
NDUSTRY
...................................................70
9. THE EMPLOYMENT EFFECTS OF GLOBALIZATION ........................................74
9.1 T
RENDS IN
U
NITED
S
TATES
A
UTOMOTIVE
S
ECTOR
E
MPLOYMENT AND
W
AGES
....................................74
9.2 R
EGIONAL
I
NTEGRATION AND
L
OW
-
COST
P
RODUCTION
S
TRATEGIES
.................................................78
9.3 C
ONSOLIDATION OF
D
ESIGN
A
CTIVITIES
:
A
R
EVITALIZATION OF THE
C
ORE
?......................................84
9.4 W
HY
M
ARKET
-S
EEKING
I
NVESTMENTS ARE
U
NLIKELY TO
H
URT
E
MPLOYMENT AT
H
OME
.....................84
9.5 E
MPLOYMENT
E
FFECTS IN
D
EVELOPING
C
OUNTRIES
:
A
F
EW
G
OOD
J
OBS
............................................85
9.6 G
REEN
-
FIELD
E
XPERIMENTS AND THE
T
RANSFORMATION OF THE
H
OME
B
ASE
?.....................................87
10. FIELD SURVEY RESULTS.........................................................................89
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ii
11. SUMMARY AND CONCLUSIONS................................................................92
12. BIBLIOGRAPHIC MATERIAL .....................................................................95
13. LIST OF PROJECT PAPERS......................................................................100
•
R
ESEARCH
N
OTE
#1: G
LOBALIZATION AND
O
VERCAPACITY IN THE
A
UTOMOTIVE
I
NDUSTRY
. T
IMOTHY
S
TURGEON
•
R
ESEARCH
N
OTE
#2: I
NTERNATIONALIZATION IN THE
A
UTOMOTIVE
I
NDUSTRY
: M
OTIVATIONS
, M
ETHODS
,
AND
E
FFECTS
. T
ERESA
L
YNCH
•
R
ESEARCH
N
OTE
#3: D
OES
G
LOBALIZATION
I
MPROVE
E
MPLOYMENT AND THE
Q
UALITY OF
J
OBS IN
I
NDIA
?
A
YA
O
KADA
•
R
ESEARCH
N
OTE
#4: T
HE
A
UTOMOTIVE
I
NDUSTRY
I
N
V
IETNAM
: P
ROSPECTS FOR
D
EVELOPMENT IN A
G
LOBALIZING
E
CONOMY
. T
IMOTHY
S
TURGEON
LIST OF TABLES:
T
ABLE
3-1: A
SSEMBLY
P
LANT
D
ATABASE
C
ONTENTS
................................................................................10
T
ABLE
3-2: S
UPPLIER
P
LANT
D
ATABASE
C
ONTENTS
.................................................................................10
T
ABLE
3-3: E
NGINE
P
LANT
D
ATABASE
C
ONTENTS
...................................................................................10
T
ABLE
3-4: D
ESIGN
F
ACILITY
D
ATABASE
C
ONTENTS
................................................................................11
T
ABLE
3-5: T
HE
H
YPOTHETICAL
A
TTRIBUTES OF
T
YPE
4, T
YPE
2,
AND
T
YPE
3
AND
T
YPE
1 A
SSEMBLY
P
LANTS
...13
T
ABLE
3-6: P
ROPOSED
S
MALL
C
AR
A
SSEMBLY
P
LANT
V
ISIT
M
ATRIX
...........................................................16
T
ABLE
3-7: C
OMPLETED
A
SSEMBLY
P
LANT
V
ISIT
M
ATRIX
........................................................................16
T
ABLE
5-1: T
HE
C
HANGING
M
OTIVATIONS FOR
O
FFSHORE
P
RODUCTION IN THE
A
UTOMOTIVE
I
NDUSTRY
...........21
T
ABLE
5-2: F
OREIGN
M
OTOR
V
EHICLE
P
LANTS
E
STABLISHED
P
RIOR TO
W
ORLD
W
AR
I...................................22
T
ABLE
5-3: F
OREIGN
M
OTOR
V
EHICLE
A
SSEMBLY
P
LANTS
E
STABLISHED
B
ETWEEN
1913
AND
1928..................25
T
ABLE
5-4: F
OREIGN
M
OTOR
V
EHICLE
P
LANTS
E
STABLISHED
B
ETWEEN
1929
AND
W
ORLD
W
AR
II...................28
T
ABLE
5-5: G
ENERAL
M
OTORS AND
F
ORD
I
NTERNATIONAL
O
PERATIONS IN
1971...........................................32
T
ABLE
5-6: T
RENDS IN PASSENGER VEHICLE SIZE AND DISPLACEMENT
..........................................................34
T
ABLE
5-7: A
MERICAN
A
UTOMAKER
T
RADE
W
ITH
F
OREIGN
A
FFILIATES
, 1966-1982......................................34
T
ABLE
5-8: E
XAMPLES OF
J
APANESE
A
SSEMBLY
P
LANTS IN
E
MERGING
M
ARKETS
...........................................35
T
ABLE
5-9: J
APANESE
A
UTOMAKER
M
ARKET
S
HARE IN
ASEAN C
OUNTRIES
, 1978-1982*..............................35
T
ABLE
5-10: U
NIT
S
ALES AND
M
ARKET
S
HARE BY
A
UTOMAKER
H
OME
C
OUNTRY
; W
EST
E
UROPE
, J
APAN
,
AND
THE
USA; P
ASSENGER
V
EHICLE
U
NITS
; 1982-1995..........................................................................36
T
ABLE
5-11: E
XAMPLES OF
C
URRENTLY
O
PERATING
A
UTOMOTIVE
A
SSEMBLY
P
LANTS IN
N
ORTH
A
MERICA
O
PERATED BY
N
ON
-A
MERICAN
A
UTOMAKERS
..................................................................................37
T
ABLE
5-12: E
XAMPLES OF
C
URRENTLY
O
PERATING
A
UTOMOTIVE
A
SSEMBLY
P
LANTS IN
E
UROPE
O
PERATED BY
J
APANESE
A
UTOMAKERS
..............................................................................................................37
T
ABLE
5-13: L
OCAL
P
RODUCTION
S
HARE OF
L
OCAL
S
ALES BY
A
UTOMAKER
H
OME
C
OUNTRY
, 1982-1995.........38
T
ABLE
6-1: A
SSEMBLY
P
LANT
C
HARACTERISTICS
A
CCORDING TO
L
OCATIONAL
T
YPE
.....................................43
T
ABLE
6-2: P
ASSENGER
V
EHICLE
P
RODUCTION
L
OCATION
T
YPES
: M
ARKET
P
ENETRATION
, A
UTO
S
ECTOR
W
AGES
,
S
ALES
G
ROWTH
,
AND
P
RODUCTION
G
ROWTH
.................................................................................43
T
ABLE
6-3: M
ODELS
P
RODUCED AT
369 A
SSEMBLY
P
LANTS
W
ORLDWIDE
....................................................44
T
ABLE
6-4: N
EW
P
ASSENGER
V
EHICLE
A
SSEMBLY
P
LANTS BY
T
YPE OF
I
NVESTMENT
L
OCATION
: H
OME
C
OUNTRY
OF
I
NVESTING
A
UTOMAKER AND
A
VERAGE
1996 C
APACITY
, 1980-1998..............................................45
T
ABLE
6-5: W
ORLDWIDE
P
ASSENGER
C
AR
P
RODUCTION BY
A
UTOMAKER
O
RIGIN
, 1983-1995..........................46
T
ABLE
6-6: M
ARKET
P
ENETRATION BY
R
EVERSE
R
ANKING
: P
EOPLE PER
C
AR BY
C
OUNTRY
, 1995....................47
T
ABLE
6-7: V
IETNAMESE
A
UTOMOTIVE
A
SSEMBLY
P
LANTS
.......................................................................49
T
ABLE
6-8: E
STIMATED
T
IME TO
V
IETNAMESE
A
UTOMOTIVE
I
NDUSTRY
P
ROFITABILITY AND
R
APID
G
ROWTH
.....50
T
ABLE
6-9: P
ROJECTIONS OF
R
EGIONAL
V
EHICLE
P
RODUCTION
M
ADE
B
EFORE THE
A
SIAN
E
CONOMIC
C
RISIS
.....51
T
ABLE
7-1: C
URRENT
N
EW
L
OCALLY
P
RODUCED
V
EHICLE
P
RICES
, V
IETNAM AND THE
U
NITED
S
TATES
)...........58
T
ABLE
7-2: C
URRENT
N
EW
I
MPORTED
V
EHICLE
P
RICES
, V
IETNAM AND THE
U
NITED
S
TATES
...........................59
T
ABLE
8-1: A
VERAGE
S
UPPLIER
P
LANT
C
HARACTERISTICS BY
L
OCATIONAL
T
YPE
..........................................65
T
ABLE
8-2: N
UMBER AND
S
HARE OF
A
UTOMOTIVE
P
LANTS BY
L
OCATIONAL
T
YPE
, S
ELECTED
P
RODUCTS
..........65
Page 5
iii
T
ABLE
8-3: D
AIMLER
-B
ENZ
(
AUTOS
)
AND
C
HRYSLER
A
SSEMBLY
O
PERATIONS
, 1996 U
NIT
C
APACITY
................71
T
ABLE
9-1: T
OTAL AND
I
NTRA
-
REGIONAL
E
XPORTS OF
F
INISHED
V
EHICLES FROM
M
EXICO
, C
ANADA
,
AND
S
PAIN
,
1992-1996................................................................................................................................81
T
ABLE
9-2: S
HARE OF
T
OP
T
EN
E
XPORTS BY
P
RODUCT
; M
EXICO
, C
ANADA
,
AND
S
PAIN
, 1992-1996.................82
T
ABLE
9-3: R
EGIONAL
S
HARE OF
M
OTOR
V
EHICLE
S
ECTOR
E
MPLOYMENT AND
R
ELATIVE
W
AGES
...................84
T
ABLE
9-4: A
VERAGE
A
NNUAL
E
ARNINGS AT
F
IRST
-
TIER
S
UPPLIERS IN
I
NDIA
, 1996 (
IN
US$)..........................87
T
ABLE
9-5: A
DOPTION OF
A
DVANCED
W
ORK
O
RGANIZATION AT
F
IRST
-
TIER
S
UPPLIERS IN
I
NDIA
, 1996.............87
T
ABLE
10-1: A
SSEMBLY
P
LANT
F
IELD
S
URVEY
: A
VERAGE
R
ESULTS BY
L
OCATIONAL
T
YPE
(
N
)........................90
LIST OF FIGURES:
F
IGURE
3-1: G
LOBAL
M
AP OF
T
YPE
2, T
YPE
3, T
YPE
4,
AND
T
YPE
1 A
UTOMOTIVE
A
SSEMBLY
P
LANTS
..............14
F
IGURE
5-1: D
OMESTIC AND
L
OCAL
S
OURCING OF
GM’
S
O
VERSEAS
S
ALES
, U
NITS
, 1926-1938.........................29
F
IGURE
6-1: G
LOBAL
M
AP OF
A
UTOMOTIVE
A
SSEMBLY
P
LANT AND
S
UPPLIER
L
OCATIONS
..............................40
F
IGURE
6-2: G
LOBAL
M
AP OF
A
UTOMOTIVE
A
SSEMBLY
P
LANT
C
APACITY
....................................................41
F
IGURE
6-3: P
ASSENGER
V
EHICLE
M
ARKET
C
ONCENTRATION IN THE
USA, J
APAN
,
AND
G
ERMANY
..................47
F
IGURE
7-1: G
LOBAL
M
AP OF THE
A
UTOMOTIVE
S
UPPLY
-
BASE
A
CCORDING TO
F
IRM
N
ATIONALITY
..................63
F
IGURE
8-1: A
VERAGE
A
SSEMBLY AND
S
UPPLIER
P
LANT
I
NCEPTION
D
ATES BY
L
OCATIONAL
T
YPE
....................64
F
IGURE
8-2: F
ROM
P
ART TO
M
ODULE TO
S
YSTEMS
...................................................................................68
F
IGURE
8-3: A
UTOMAKER
M
ERGERS AND
F
INAL
-P
RODUCT
A
LLIANCES
........................................................70
F
IGURE
8-4: W
ORLDWIDE
P
ASSENGER
V
EHICLE
M
ARKET
C
ONCENTRATION
, 1982-2000.................................72
F
IGURE
8-5: W
ORLDWIDE
P
ASSENGER
V
EHICLE
M
ARKET
C
ONCENTRATION
, 1982-2010 (
ESTIMATE
).................72
F
IGURE
9-1: T
OTAL
U
NITED
S
TATES
M
OTOR
V
EHICLE
S
ECTOR
E
MPLOYMENT
, 1972-1996...............................75
F
IGURE
9-2: U.S. M
OTOR
V
EHICLE
A
SSEMBLY AND
P
ARTS
M
ANUFACTURING
E
MPLOYMENT
, 1972-1996...........76
F
IGURE
9-3: A
VERAGE
H
OURLY
E
ARNINGS OF
U.S. A
UTOMOTIVE
P
RODUCTION
W
ORKERS
, 1977-1995.............77
F
IGURE
9-4: P
RODUCTIVITY IN
A
SSEMBLY AND
P
ARTS
, 1977-1995..............................................................78
F
IGURE
9-5: M
EXICO
’
S
F
INISHED
V
EHICLE AND
P
ARTS
T
RADE WITH THE
U
NITED
S
TATES
, 1989-1996 ..............79
F
IGURE
9-6: C
ANADA
’
S
F
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