Pays émergents

Le fossé entre les intentions de l’Etat Chinois et la réalité peut-il être comblé ?

Submitted by Bernard Jullien, GIS-Gerpisa, Ecole Normale Supérieure de Cachan on 2 May, 2012 - 12:39
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directeur du Gerpisa et conseiller scientifique de la Chaire de Management des Réseaux du Groupe Essca.

Les signes d’un durcissement des conditions faites aux grands constructeurs mondiaux pour continuer de profiter des volumes, des consentements à payer et in fine de la profitabilité qu’offre leur marché de plus de 18 millions de véhicules par an étaient attendus et se sont multipliés ces derniers mois. Citons en quelques uns.
i) Le NDRC (National Development Research Council) a annoncé en décembre de nouvelles conditions pour les investissements directs étrangers et celles ci sont clairement restrictives.
ii) Le gouvernement a indiqué en mars que les achats des administrations – y compris ceux des véhicules de fonction des hauts fonctionnaires – devraient désormais se référer à une liste de véhicules pré-sélectionnés par l’Etat qui, comme par hasard, ne comprend que des véhicules "chinois".
iii) Les coentreprises sont désormais obligées de développer à côté de leurs marques "mondiales" des marques chinoises et les grands partenaires des occidentaux comme FAW ou SAIC – qui sont des entreprises d’Etat – font renaître, seules, des anciennes marques chinoises. Ce sera Hongqi ("Drapeau Rouge") pour FAW dont la limousine H7 entend transporter demain les Premier ministre et Shanghai pour SAIC qui, dans un premier temps au moins, pourrait ainsi re-badger certaines Roewe (ex-Rover). read more

In the name of consumer: The social construction of innovation in the European automobile industry and its political consequences

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Jullien, Bernard, & Tommaso Pardi (2012).  In the name of consumer: The social construction of innovation in the European automobile industry and its political consequences. Gerpisa colloquium. The paper questions the conventional representation of innovation and product policies dynamics in the European automobile industries. It shows that the proliferation of models, their faster renewal and the increasing technological content of new cars have not been pulled by the “postfordist” demand of the new “king consumer”, but pushed by corporate strategies within a well defined conception of control. The paper focuses in particular on the political consequences of this innovation dynamic. At the market level, it shows that this trend has led to an increasing inegalitarian access to new cars reinforced by the rising cost of ownership of second hand cars. At the production level, it shows that in order to manufacture and sell profitably this wide range of new models carmakers have increased work productivity while reducing the cost of work. The paper argues that this double antifordist dynamic has locked-in the sector in a conception of control that is both economic and socially unsustainable.
Thème: Management de l’innovation, changements technologiques, changements de business models
Thème: Managing innovation, technological change and new business models

Development of Chinese New Energy Vehicle Industry: Business Model versus Technology Innovation

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Hua, WANG, & Chris Kimble (2012).  Development of Chinese New Energy Vehicle Industry: Business Model versus Technology Innovation. Gerpisa colloquium. This paper contrasts two approaches to the development of what might be termed the new energy vehicle industry in China. The Electric Vehicle (EV) segment of this industry is based upon finding a substitute for existing petrol driven vehicles. Its development relies on technological innovation and strong central government intervention, both through preferential policies and through significant capital investment, for its success. However, outside the EV sector another market for what might also be considered new energy vehicles has developed based around Low-Speed Electric Vehicles (LSEVs). The official classification for new energy vehicle covers pure electric and electric hybrid vehicles but does not include LSEVs, which are based on a simple and mature technology. The growth of this market stems from indigenous demand and a focus on business model innovation. Unlike the EV sector, the LSEV sector only has the support of a few regional governments, and yet, despite this more than 13 times more LSEVs were sold in China in 2011 than EVs. In this paper, we will compare the effectiveness of technology and business model driven innovation as motors for the Chinese Electric Vehicle industry.
Thème: Management de l’innovation, changements technologiques, changements de business models
Thème: Managing innovation, technological change and new business models

Competitiveness of the Japanese, Korean, and Chinese Automobile Industries

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Shioji, Hiromi (2012).  Competitiveness of the Japanese, Korean, and Chinese Automobile Industries. Gerpisa colloquium. The automobile industry has been developing remarkably in the East Asian countries—Japan, Korea, and China—in recent years. In terms of domestic production, China produced 18.3 million vehicles in 2010, more than any other country in the world. Japan is the second largest, at 9.6 million. Korea ranks fifth, at 4.3 million. Out of the top five automobile industries, three are in East Asia. In 2001, Japan held the second place, and Korea the fifth; China was in the seventh place. This momentum will not stagnate; production in China will increase to around 25 million by the middle of the 2010s, and is likely to exceed the output of other countries. This paper aims to analyse the international competitiveness of the Japanese, Korean, and Chinese automobile industries. Analysing in detail the production, sales, and import/export statistics published by each country’s Automobile Manufacturer Association, we clarify the competitiveness of each country and the differences among them. There are many existing research studies on the competitiveness of the East Asian automobile industries.3 These studies analysed many aspects of automobile makers, such as their development, production, distribution, finance, supply chains, organizational capability, industrial policies of government, and historical process. There is, however, little research about how the international competitiveness of a country’s automobile industry as a whole can be examined quantitatively. Most existing research only introduces production and export numbers as numerical indices of international competitiveness; these numbers are based only on ‘Producer Country Base’ (later described). This paper analyses the total international competitiveness of the Japanese, Korean, and Chinese automobile industries.
Thème: Processus d’émergence des nouvelles industries automobiles
Thème: The emergence of new automotive industries

The persistent role of proximity in vertical relations: Evidence from the European car industry

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Schmitt, Alexander, & Johannes Van Biesebroeck (Submitted).  The persistent role of proximity in vertical relations: Evidence from the European car industry. Gerpisa colloquium 2012. It is sometimes argued that in a global economy many of the traditional roles of proximity have become less important. Yet there is persistent evidence that proximity still shapes economic activity. This paper investigates the role of proximity in the choice of external suppliers in the European automotive industry. We conceptually break it down into three complementary dimensions: physical proximity, cultural proximity, and proximity to clusters. Using a supplier choice model, we find that each of the three dimensions has strong independent explanatory power for the formation of buyer-supplier relationships and that cultural proximity has the strongest e ffects. The eff ect of geographical proximity has become stronger over time at very short distances, but weaker at longer distances. The positive e ffect of clusters is limited to vertical clusters of suppliers that do not produce direct substitutes.
Thème: Trajectoires et stratégies des équipementiers
Thème: Supplier trajectories and strategies

RELATIONAL RESOURCES AND CAPABILITIES IN ACQUISITIONS, JOINT VENTURES AND ALLIANCES IN THE AUTOMOTIVE INDUSTRY

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Neto, Mario Sacomano, Eliciane M. Silva, Silvio R. I. Pires, & Charles Kirschbaum (2012).  RELATIONAL RESOURCES AND CAPABILITIES IN ACQUISITIONS, JOINT VENTURES AND ALLIANCES IN THE AUTOMOTIVE INDUSTRY. The internationalization of the automotive industry is strongly linked to the processes of mergers, acquisitions, joint ventures and alliances. To penetrate certain markets many companies associate themselves with local or global companies, which is considered a safer and more stable strategy to enter certain countries and also a way to share resources and intercompany capabilities. In this context, this article examines the resources, capabilities and advantages of relational processes of acquisitions, joint ventures, alliances and partnerships in the automotive sector based on an analysis of five dyads (three automakers and two auto parts suppliers) associated with the internationalization of companies. The analysis of these cases reveals shared relational resources (physical, institutional, essential and valuable, and complementary organizational resources) in different types of dyads in the process of internationalization of these companies. Data were collected from interviews, participant observation, documents and specialized publications, and were evaluated based on the content analysis technique. The results of the survey indicate that: 1) internationalization processes and automaker and supplier growth are enabled by mergers, acquisitions and joint ventures; 2) these processes are driven by different objectives, but mainly by geographical locations and technological, managerial, institutional and market resource complementarities; and 3) the findings reveal a significant exchange of resources and capabilities acquired through these relationships. The findings draw attention to the discussion about the complementary capabilities and resources acquired at intra and/or interorganizational levels and the formation of local networks and partnerships in internationalization processes.

Creative accumulation in a mature industry - Understanding the current transformation of the automotive industry

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Berggren, Christian (2012).  Creative accumulation in a mature industry - Understanding the current transformation of the automotive industry. Gerpisa colloquium Krakow May 30 - June 1. The automobile industry constitutes a paradox for established innovation theories. Few sectors have displayed such stability in their dominant product designs and incremental improvement of core technologies as the automotive industry, making it an archetypical example of a capital-intensive, oligopolistic sector competing on process efficiencies along stable trajectories. Emerging economies and state support have added a few new actors, and hard-pressed “old economies” have seen the demise of some older firms, but the basic industry structure has remained unchanged for a long time. Repeatedly researchers have expected this stable pattern to break down and open up for new radical departures, for example in the aftermath of the oil shocks in the early 1980s (Altshuler 1984), following rising environmental concerns (Nieuwenhuis and Wells 1997), or the Californian zero emissions vehicle (ZEV) mandate (Pilkington and Dyerson 2005). But the incremental trajectory prevailed and researchers forecast that the industry would fail to accommodate new technologies or regulation. Extrapolating previous trends, Fontaras & Samaras (2010:1832), for example, argued that the European industry would have great difficulties in achieving EU´s emissions targets for 2012/15, since their technologies were already “being pushed to their limits”. In the same vein, the innovation theorist Clayton Christensen predicted that electrical vehicles implied a disruptive threat to established automakers “…the electric vehicle is not only a disruptive innovation, but it involves massive architectural reconfiguration as well, a reconfiguration that must occur not only within the product itself but across the entire value chain…”(Christensen, 1997/2003, p. 252). In the tradition of industrial life cycle studies, innovation and change was expected to come from new firms enjoying an “attacker´s advantage”, which incumbents with their “core rigidities” would have a hard time to match. And yet, the last five years have witnessed a remarkable vitality among automotive incumbents, both car makers (OEMs) and component specialists. Improvements in established technologies have accelerated, and far from being ”pushed to the limit”, a report from Transport & Environment, 2011 shows that automakers will comply with EU´s new CO2 emission limits well ahead of time. At the same time a range of new modular innovations are introduced, from multi-speed gearboxes and dual-clutch transmissions, advanced valve management systems and regenerative braking, to collision avoidance systems and other proactive safety equipment. Ten years after corporate lawyers succeeded in winding down the Californian Zero Emissions Mandate, electric vehicles have re-emerged on the back of advances in lithium-ion technologies. The new EV industry includes startups, such as Tesla and Fisker. But far from being caught off-guard, incumbents dominate sales and production. Whereas the highly publicized Tesla sold 2,500 roadsters 2008-2011, Nissan’s produced 10,000 Leaf cars in its first fiscal year ending in March 2011, and Mitsubishi 5,000 EVs in 2010. Rather than being a breakthrough opportunity for “attackers”, the surge in interest for electric vehicles offers Japanese incumbents who failed to compete with Toyota´s hybrid cars a new chance, making use of economies of both scale and scope. And far from implying a “massive architectural reconfiguration …across the entire value chain” the new technologies involve a dynamic expansion of supplier networks, with ample opportunities for incumbents such as Bosch, Continental and Valeo to augment product lines with profitable high-tech modules. The growth of Asian economies, in particular China, signifies an epochal shift in the centre of the industry, but so far this change has not threatened but created opportunities for Western incumbents. Taken over by Geely in 2010, Volvo Cars, for example, has embarked on its boldest expansion plans ever, doubling production capacity within a few years, and launching highly ambitious product and technology plans, with its Scalable Product Architecture for product development, a new platform for future power-trains (“Volvo Environmental Architechture”) and an ambition to take a lead in premium market for electrified vehicles, such as a plug-in diesel hybrids. How can this “incumbent vitality” be explained in theoretical terms? Previous GERPISA studies, for example Freyssenet (2009) has analyzed different corporate trajectories within the industry. This paper purports to analyze dynamics at an industry level, which neither fits the “creative destruction” framework, nor the notion of incremental innovation in stable structures. Instead the paper will propose creative accumulation as a fruitful concept to grasp the composite and contradictory nature of current developments in the auto industrial (cf Bergek et al 2011). Creative accumulation stresses the tension between the creativity aspect, implying responses outside of the range of existing practice, and the accumulation aspect, implying knowledge development on the basis of established practices. Creative accumulation means that new and old technological disciplines and areas of expertise have to interact in novel ways to develop products with substantially improved or changed performance. New fields of knowledge have to be aligned with existing, rapidly evolving, technologies – there is no Archimedian fixed point. The paper ends by discussing organizational implications, in particular the challenge of managing creative accumulation processes by means of dynamic integration, instead of separation and isolation, as recommended in the literature on disruptive innovation.
Thème: Management de l’innovation, changements technologiques, changements de business models
Thème: Managing innovation, technological change and new business models

Segmentation and transitions between temporary and long-term employment. Comparison of employment relations in automobile companies in the BRIC countries

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Jürgens, Ulrich, & Martin Krzywdzinski (2012).  Segmentation and transitions between temporary and long-term employment. Comparison of employment relations in automobile companies in the BRIC countries. Gerpisa colloquium. The BRIC countries are often characterized by the dominance of nonstandard employment relations (temporary, agency and contract work) and informal work. But which approaches do the automobile companies follow in the BRIC countries? Do the companies rely on standard long-term employment relationships and constitute “protected islands” within the respective national economies? Or do the companies pursue the approach of segmentation between a (small) core workforce and a (broad) margin of temporary employment? How do skill requirements, labor market conditions and the regulation in the BRIC countries influence the companies’ approaches?
Thème: Nouvelles divisions internationales du travail et transformations des relations d’emploi
Thème: A new international division of labor and changes in employment relationships

Le coût de l’immobilier et le développement de l’automobile : une question d’économie politique

Submitted by Bernard Jullien, GIS-Gerpisa, Ecole Normale Supérieure de Cachan on 12 March, 2012 - 14:13
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La chronique hébdomadaire de Bernard Jullien directeur du Gerpisa et conseiller scientifique de la Chaire de Management des Réseaux du Groupe Essca.

Le Gerpisa recevait cette semaine un de ses membres allemands, Martin Krzywdzinski, qui, avec Ulrich Jürgens, a conduit ces trois dernières années, un travail comparatif sur les formes de gestion des ressources humaines qu’un grand constructeur allemand, d’une part et un grand constructeur japonais, d’autre part appliquent au Brésil, en Russie, en Inde et en Chine, dans leurs usines plus ou moins récentes. L’importance et les apports de cette recherche conduiront immanquablement à ce que, dès sa publication, il suscite un intérêt tel qu’il nous donnera l’occasion d’y revenir.

Un aspect spécifique retiendra ici notre attention : c’est l’importance des conditions dans lesquelles les salariés peuvent se loger. De l’aveu même des chercheurs, ils n’avaient pas prévu dans leur protocole d’enquête de s’y attacher pas plus – soulignent-ils – que les décideurs des grands constructeurs concernés n’avaient planifié leurs implantations en intégrant cette dimension. C’est le caractère récurrent des préoccupations exprimées à ce sujet chez les salariés comme chez les managers qui a conduit les chercheurs à en faire un des items clés de la comparaison. read more

Renault-Nissan et GM-PSA : similitudes et différences

Submitted by Bernard Jullien, GIS-Gerpisa, Ecole Normale Supérieure de Cachan on 5 March, 2012 - 14:25
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La chronique hébdomadaire de Bernard Jullien directeur du Gerpisa et conseiller scientifique de la Chaire de Management des Réseaux du Groupe Essca.

Même si ceci ne manquera pas de susciter quelqu’énervement chez PSA, les lumières qui nous ont été fournies cette semaine sur la forme que va prendre "l’alliance stratégique mondiale" GM-PSA font d’abord penser – comme Florence Lagarde l’a souligné déjà la semaine dernière - à Renault-Nissan. Le fait que les deux piliers de la coopération mise en avant soient le partage des plateformes d’un côté et la création d’une structure commune d’achat de l’autre, que la gouvernance de l’Alliance soit assurée par un "steering committee" composé de 4 top managers des deux entreprises, que l’identité des marques soit préservée et gérée hors de l’Alliance tout comme les outils industriels qui continueront d’être dédiés sont autant d’éléments qui rendent comparables les deux manières de procéder.

Cette démarche intermédiaire entre la fusion et la coopération ponctuelle s’explique dans les deux cas par la nécessité politique de respecter l’identité et la "nationalité" des parties d’une part et par la prudence stratégique et organisationnelle que les entreprises ont tiré de leurs expériences passées et de celles qu’ils ont vu d’autres faire d’autre part. read more

Change in the management of subsidiaries due to increasing value competition - as a starting point for a survey on the impact on employment and occupational qualifications†

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Proff, Heike (2012).  Change in the management of subsidiaries due to increasing value competition - as a starting point for a survey on the impact on employment and occupational qualifications†. Gerpisa colloquium.

Currently, automotive companies are increasing their value added in the growth markets of the BRIC countries, despite the risk of losing knowledge, especially in China. Protecting their global market position and handling the major markets, especially the Chinese market, require high levels of foreign investment, not only in production, but also in other value-adding activities such as research and development (R&D). A new form of value chain competition arises.
 
Therefore, global automotive manufacturers’ and suppliers’ management has to adapt to the changing importance of the foreign subsidiaries and now has to coordinate them at least on a regional basis, if perhaps not yet globally.
 
However, up to now, despite the regionalisation in East Asia, Latin America and sub-Saharan Africa, the value-adding activities of the subsidiaries have been largely confined to single foreign markets. In addition, the interactions between the subsidiaries compared to the exchange relationship between subsidiaries and the parent companies have been low. This has mainly been caused by inter-company transfer pricing and tight, centralized management by the parent companies.
 
Therefore, “integrating a (new) site into the value added network”, as a fourth step in traditional international market management (after 1. Identifying attractive markets and sites, 2. Deciding on the form of internationalisation and 3. Deciding on the form and timing of establishment), has had to be extended by a multi-market management to reduce product substitutability and the scale and scope disadvantages within and between multinational companies (as a first step, to prevent overcapacities) (cf. Proff 2007 and Proff, Proff 2008, based on Bulow et al. 1985). In a second step, the coordination of international value adding activities must be improved in order to further reduce scale and scope disadvantages. Multi-market management thus becomes coordinated multi-market management.
 
Coordinated multi-market management has to increase the exchange between subsidiaries through “strategies covering coordination needs” (cf. Peng, Meyer 2011, pp. 457), which is still low in the automotive industry compared to the exchange relationships between the subsidiaries and the corporate centre or parent company (cf. Fuchs, Apfelthaler 2009, p. 214).
 
Many different “strategies covering coordination needs” are discussed in the literature (cf. overview in Kutschker, Schmid 2011, p. 1035):
 
-        Technocratic coordination strategies that aim to impose routines and standards on operational inputs (e.g. execution of operational processes) and operational outputs (e.g. results) through rules and programmes, plans, budgets, reporting systems and formalisation,
-        People-orientated coordination strategies that are carried out by personal instructions, autonomy, visits, executive transfers, standardisation of roles and culture-orientated coordination and
-        Other “strategies covering coordination needs” such as transfer prices, knowledge transfer and self-organisation.
 
Although many studies examine which coordination strategy is most efficient, and under what contextual factors the use of a specific coordination strategy is particularly efficient, they have not yet succeeded in finding the answers. For this reason, international companies normally use a range of different coordination strategies simultaneously.
 
We used an oral survey as our empirical methodology, in order to identify first indications of future changes in the management of subsidiaries on the basis of increasing international value added competition, and conducted in-depth interviews with experts in the automotive industry using a structured interview guideline. The interviews lasted around one and a half hours on average. This methodology was selected because assessments of future developments, i.e. the strategic perspective of the respondents, were to be recorded. It was therefore impossible to use conventional hypothesis testing and an analysis by multivariate methods.
 
We conducted interviews of 93 industry experts (generally from leading automotive industry associations), well-known academics and top managers (generally managing directors) of subsidiaries of German automotive manufacturers and suppliers in the BRIC countries of Brazil, Russia, India and China – all in the year 2010 during research trips to all four countries – and in the German parent companies
 
The interviews showed that of the many “strategies covering coordination needs” discussed in the literature, four appear to be particularly important: 1. Regional management with extensive autonomy from the corporate centre and coordination based on value consensus, 2. Institutionalised knowledge transfer with coordination based on differences in know-how, 3. Personnel transfer with hierarchical coordination and 4. The offer of shared support functions, with coordination via transfer prices which exploit tax advantages.
 
The interviews therefore showed that these four “strategies covering coordination needs” appear important to the experts and are in some cases already pursued in the multinational automotive companies, but that they are not yet followed to an adequate extent. In China in particular, the many sites have not been coordinated so far in a Chinese or Asian network, but mostly remain autonomous value-adding units.  With the fast growth in China and the other BRIC markets, coordination needs will increase (cf. Proff 2012 and Bernhard 2011, p. 31), the role of subsidiaries therefore has to be redefined.
This finding gives rise to a need for further research. We therefore propose a subproject
“Changes in the management of subsidiaries of multinational automotive companies within a new international division of labour and changes in the employment relationship”
for the new GERPISA International Research Project in the field: New Demarcations in the Global Automotive Industry - Breakup of the Triad, as proposed by Ludger Pries and Antje Blöcker.
 
For this subproject, we can derive the following assumptions:
  • Due to increasing value adding activities in subsidiaries operating in emerging markets, a change from a previously largely locally orientated management to a regional and even globally orientated management with increasing autonomy and accretive influence on the management of the parent company is probable.
  • Parent companies need skilled workers, because branding, technical development and the production of central components still have to be done within the parent companies.
  • Despite the shift of research and development activities into new growth markets, the Triad will remain a central location for innovation, because Asian manufacturers are investing heavily in the Triad.
 
In this subproject we will examine assumptions relating to the influences on employment and occupational qualifications in the foreign locations as well as at the parent companies in Germany. Therefore, case studies will be conducted with parent companies of German manufacturers and their subsidiaries in the BRIC countries (in collaboration with GERPISA colleagues in France and Italy, possibly with partners in the BRIC countries). The research framework will consists of theories on the role and coordination of subsidiaries in the international management and value adding activities of multinational enterprises.
 
 
 
 
Selected References
 
 
Bernhardt, W. (2011) Die Automobilindustrie im Jahr 2025 – heute die Basis für den Erfolg von
            morgen legen, in: `Zeitschrift für die gesamte Wertschöpfungskette Automobilwirtschaft
            (ZfAW)´, 14. Jg., S 26-33.
Bulow, J. I., Geanakoplos, J. D., Klemperer, P. D. (1985) `Multimarket oligopoly. Strategic substitutes
            and complements´, in: Journal of Political Economy, Vol. 93, pp. 488-511.
Fuchs, M., Apfelthaler, G. (2009): `Management internationaler Geschäftstätigkeit´. 2. Aufl., Wien.
Kutschker, M., Schmid, S. (2011) `Internationales Management´, 7. Ed., Munich..
Peng, M., Meyer, K. (2011): `International Business´. London.
Proff, H. (2007): `Dynamische Strategien: Unterstützung der Erreichung der angestrebten Wettbe
werbsvorteile im internationalen Wettbewerbsprozess´. Wiesbaden.
Proff, H. (2012) `Managing the transition to electric mobility in Chinese automotive subsidiaries of
MNCs´, will be published in: International Journal of Automotive Technology & Management”,
Spcial Issue on China Strategies, 2012.
Proff, H., Proff, H.V. (2008) `Dynamisches Automobilmanagement. Strategien für Hersteller und
Zulieferer im Internationalen Wettbewerb´. 1. Aufl., Wiesbaden.

Thème: Nouvelles divisions internationales du travail et transformations des relations d’emploi
Thème: A new international division of labor and changes in employment relationships

Global quality production—new patterns of transnational division of labor of German automobile suppliers

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Herrigel, Gary, Ulrich Voskamp, & Volker Wittke (2012).  Global quality production—new patterns of transnational division of labor of German automobile suppliers. Gerpisa colloquium. The contribution will focus on changing transnational production systems of German medium sized automotive suppliers. In addition to the traditional strategy to integrate low wage locations into their transnational value chains (the “extended workbench” strategy), a new pattern is on the rise, which we call „global quality production“. This means, German automobile suppliers are upgrading low wage locations in Central and Eastern Europe (CEE) as well as in China in upgrade in competencies and capabilities, enabling them to enter higher value segments of production that up to now were thought to be an exclusive domain of German locations. Based on case evidence the contribution will discuss how the process of upgrading at low wage locations in CEE and China is organized. This includes how German automobile suppliers ensure the local pre-conditions for upgrading strategies, such as a capable local supply base and the supply of a of qualified work force With regard to Germany the contribution will discuss the ambivalent implications of this upgrading in CEE and China and the newly emerging new pattern of transnational division of labor. One hand automobile suppliers German locations may face new impositions, when firms use the new options for another round of cost oriented relocation. But there can be new opportunities as well, because the successful operation of transnational quality production systems also depends on the capabilities of German locations to newly direct their profiles to innovation and coordination tasks in global systems. For industrial production in German locations this structural change reduces the significance of its traditional function, but at the same time amplifies its direction to innovation functions. For works councils new options of codetermination open up in this process, but using them is bound to preconditions: adjusting their competence profiles, redirecting their organization structures, and reorganising their power base in a differently structured workforce.
Thème: Trajectoires et stratégies des équipementiers
Thème: Supplier trajectories and strategies

Automotive industry in Mexico: development technological path and upgrading

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Alvarez, María Lourdes, & Ricardo Melgoza Ramos (2012).  Automotive industry in Mexico: development technological path and upgrading. Gerpisa colloquium. Building research and development capabilities is considered imperative for developing countries in order to upgrade their industries and improve competitiveness. Once an industry reaches consolidation and entry barriers increase, the developing countries become confined to manufacturing products with low added value (UNCTAD, 2005). However, in developing countries emergence of new local players in consolidated industries, such as automotive manufacturing have proven the contrary. The economic and industrial policies in these countries have focused on actions that maximize the degree of technology spillovers from Foreign Direct Investment (FDI), improving their ability to absorbe new technologies, build infrastructure, educate human capital and encourage domestic companies to invest in research and development. Globalization of research and development has become a mayor trend increasing in the last decade; most of the FDI on Research and Development (R&D) was applied in developed countries, especially in manufacturing sectors. This aimed to take advantage of their innovation capabilities. However, in recent years this trend has changed and China and other Asian countries have increased their share of FDI on R&D. The 2008 economic crisis promoted a process to identify the technological potential of the automotive industry in Mexico, define the research activities that can produce more profits, and draw public policies capable of influencing these activities and their positive impact on the economy. In order to explain differences in the development of technological capabilities over the years, we analyze the relative importance of industrial, fiscal and R&D policy and its relationship with the production capabilities developed in Mexico. Although there are innovation capabilities in manufacturing and some automotive Research Centers have been opened in México, the amount of investment in R & D by multinationals, government and local companies as a percentage of the GDP have been insignificant when in comparison to other countries. The technological potential of the country is restricted in some degree to electronics and power train systems. Government support innovation in the automotive industry through tax incentives has had some positive results according to Calderon, but it is always of great concern in the country to provide subsidies to multinational corporations.
Thème: Processus d’émergence des nouvelles industries automobiles
Thème: The emergence of new automotive industries

Innovation processes in the automotive industry: different contingencies, different processes

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Salerno, Mario Sergio, Raoni Barros Bagno, Leonardo Augusto Vasconcelos de Gomes, Debora Oliveira da Silva, & Simone Lara Teixeira Uchoa de Freitas (2012).  Innovation processes in the automotive industry: different contingencies, different processes. Gerpisa colloquium. Automotive companies have developed particular models to follow for their innovation management. They base these on classical new product development models, which focus on durable goods. However, because the theoretical models available are so general and the challenges imposed by different contingencies so varied, further exploration is needed to arrive at a more detailed understanding of the processes used by automotive firms in the real world. Studying literature of common theoretical models for new product and innovation development the research gap will become clearer and help in constructing a theoretical framework. The methodology follows inductive case studies and fourteen innovation projects in ten different Brazilian automotive companies were studied in great depth. An investigation of the innovation process relies on formal and informal approaches. The cases identify common organizational contingencies for innovation projects in automotive companies. The results suggest that the innovation processes applied in the automotive sector can be explained by three different typologies, each one associated with specific sets of identifiable organizational contingencies. This work seeks to improve the existing theory on innovation processes, providing support for automobile companies and their managers. It will help them select the best models that match the configurations for their respective organization’s innovation projects.
Thème: Management de l’innovation, changements technologiques, changements de business models
Thème: Managing innovation, technological change and new business models

The 2008-2009 automotive industry crisis: Global trends and firm-level effects in Central Europe

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Pavlínek, Petr (2012).  The 2008-2009 automotive industry crisis: Global trends and firm-level effects in Central Europe. Gerpisa colloquium. This paper examines the 2008-2009 economic crisis in the automotive industry. The uneven nature of the crisis contributed to the gradual shift in production from traditional core areas of the global automobile industry to selected less developed economies. In this context, the paper analyzes the firm-level effects of the economic crisis in the Czech and Slovak automotive industries as two examples of automotive industry peripheries that were integrated in the European automobile production system and experienced rapid production increases after 1990. The analysis draws on unique data collected during the survey of 274 Czech-based and 133 Slovak-based automotive firms conducted in Fall 2009 and Spring 2010, 98 company interviews conducted with automotive firms in Czechia in 2010 and 2011, and on 30 interviews conducted in Slovakia in 2011. Changes in revenues, production and employment during the economic crisis are compared between Czechia and Slovakia, and are analyzed according to ownership, the involvement of firms in the automotive value chain, and the firm size. The article also investigates plant closures and relocations in the Czech and Slovak automotive industries during the economic crisis.
Thème: Trajectoires et stratégies des équipementiers
Thème: Supplier trajectories and strategies

(Re)producing competitive advantage: workforce skills and automobile multinationals in East Central Europe

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Scepanovic, Vera (2012).  (Re)producing competitive advantage: workforce skills and automobile multinationals in East Central Europe. Gerpisa colloquium. This paper looks at the issue of workforce skills in the automotive sector of Central and Eastern Europe as part of a more general employment model which underpins the production strategies of firms in the sector. Drawing on the literature of varieties of capitalism and employment models, it identifies the elements of this relationship as comprising of low cost, high flexibility and relatively high skills. However, in contrast to some other observers of the region, I argue that although these features formed a relatively stable regional employment configuration for nearly two decades, they are not in any meaningful sense complementary or mutually enforcing, and that the very success of the region has become the source of internal tensions. These tensions, which materialise as labour shortages, workers’ dissatisfaction and wage pressures, have brought about a variety of responses from the automobile firms and other relevant actors. The overall direction appears to be that of a downward adjustment towards low skill-high flexibility-(relatively) low cost configuration, or the so-called “low-road employment model” (Juergens and Krzywidzinski: 2008), but insofar as the most prominent employers are eager to keep the advantages of the original configuration, there may be still some scope for the governments to steer the industry onto the higher path. On the other hand, the same factors which underwrote the competitiveness of the industry created disincentives for the new cohorts of future workers to invest in the manufacturing skills, making it more difficult for the governments to continue catering to the needs of these industries.
Thème: Nouvelles divisions internationales du travail et transformations des relations d’emploi
Thème: A new international division of labor and changes in employment relationships

Indian Auto Industry: A Global Hub in the Making?

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Narayanan, Badri G., & Pankaj Vashisht (2012).  Indian Auto Industry: A Global Hub in the Making?. Gerpisa colloquium. Developing countries are increasingly gaining prominence in global auto industry, which is one they key players in the global economy. India has one of the fastest growing auto industry even among them. This study addresses two important questions pertaining to this industry, both relating to the prospects of India becoming a global auto hub, using a quantitative approach: What characterizes India's export-import basket in auto sector? What is the role of India in global auto industry and how does it compare with other major players? Our analysis shows that India has been growing impressively in the global arena in the recent years, especially in auto-components, heavy trucks, cars and motorcycles. Still, its shares in world exports remain quite low. Tariffs on automobiles are much higher in India compared to other countries, but those on components are low. FTA with Thailand has resulted in net-gain for India, showing the potential benefits the industry can reap from free trade. More policy reforms by the government and R&D efforts by the industry are required to make India a global auto hub.
Thème: Processus d’émergence des nouvelles industries automobiles
Thème: The emergence of new automotive industries

Managing Complexity: European Works Councils of Diversified Tier 1-Suppliers

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Hauser-Ditz, Axel, Valentina Mählmeyer, & Ludger Pries (2012).  Managing Complexity: European Works Councils of Diversified Tier 1-Suppliers. Gerpisa colloquium. The European automotive industry and especially the supplier sector has been undergoing a process of a structural change in terms of increasing competition and cost pressure, closures, mergers and acquisitions, relocations, follow- and global-sourcing strategies, higher dependence on OEMs and a tougher vertical restructuring of first, second and third tiers, shorter innovation cycles and a shift from more electrical and electronic parts towards e-driven cars in the near future. These processes were associated with serious challenges for the employees of supplier companies and their representatives at the local, national and European levels. Therefore, plant closures, mass redundancies, pressure on wages, working time and other working conditions were to observe in almost every supplier company. The paper examines the role of European Works Councils (EWCs) in the automotive supplier industry and the corresponding restructuring processes. It focuses especially on conditions under which EWCs could work as effective bodies or platforms of cross-border interest regulation. On the example of four Tier 1 suppliers (Bosch, Continental, Delphi, GKN), the article provides insights into different management strategies of diversification and (re)localisation of production and R&D activities the EWCs are confronted with. Focusing on the issues of securing employment, hindering or (if necessary) co-managing mass redundancies, plant closures and/or relocation of production, the paper first demonstrates different roles and functions of EWCs ranging from marginal or inactive bodies up to proactive and powerful platforms of intra-organizational negotiations on the workers’ side and of inter-organizational bargaining with the European and local management. Secondly, the paper aims at explaining this EWC-outcome by referring to four different compounds of influencing factors: (1) configuration and type of company at the European level (multinational, focal, global, transnational), (2) cultural and institutional embeddedness in national environments, mainly of the headquarters, (3) path dependency and the ‘learning curve’ from earlier development and conflict resolution, and (4) the role of individual/charismatic leaders, their personal values and interests. The paper will argue that, given the legal framework, there is some potential for influencing cross-border restructurings by EWCs at the European level, but due to a high degree of disparate and disperse structures of supplier companies the complexity of intra- and inter-organizational bargaining is rather high, and the qualification of a majority of EWC-members does not hold up with the corresponding challenges.
Thème: Nouvelles divisions internationales du travail et transformations des relations d’emploi
Thème: A new international division of labor and changes in employment relationships

Shaping and Transforming the Indian Commercial Vehicle Industry: A comparison of TATA Motors and Daimler India

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Waman, Nilesh, Daniel Kerpen, & Ingrid Kleinert (2012).  Shaping and Transforming the Indian Commercial Vehicle Industry: A comparison of TATA Motors and Daimler India. Gerpisa colloquium.

In the last decade, globalized activities and government policies to promote the trade resulted in massive changes and transformation of auto industries in newly evolving markets. It has also changed the view of established European, American and Japanese OEMs towards these markets which caused restructuring of assembler and suppliers relationships. To survive in the competitive market and to take the advantages of increasing volume sales in upcoming market are of prime importance for both local and foreign OEMs. This has led to restructuring of vehicle industry, keeping the production local whereas moving R&D and tie ups to global level (Kathuria, 1996; Rajmanohar, 2007).

Establishment of the western and Japanese OEMs is not only responsible for their own growth in these emerging markets, but also in promoting local manufactures and component industry to increase their standard while opening the doors of international markets for their business. Developing a mix policy to attract foreign investors ensuring the strong relationship amongst local and global manufacturers and suppliers is a challenging task for the governments in emerging markets because their trade policies must be accompanied by other development policies such as producing skill employment and endurance of economic growth in order to keep the foreign OEMs focused on these markets.

The aim of this paper is to discuss the above issues in context to the Indian commercial vehicle (CV) industry which has shown massive growth in production and exports since past few years. This paper responds to the following key questions:

  • How Indian CV industry has been evolved in last decade,
  • Which are the key factors that caused this industry to grow at the tremendous rate,
  • Which are the current practices and processes in this industry, and
  • What are the policies that are put into action to attract the global OEM by the government?

The paper will be emphasizing on CV sector and its subdivision in India. Indian CV industry was strongly dominated by Tata Motors and Ashok Leyland, but now they are set to witness a competition as global players are ready to get a slice of one of the fastest growing economies. Those looking to penetrate in India include Daimler and MAN of Germany, Volvo of Sweden, Nissan of Japan, and Navistar and General Motors of the USA. They all have their own way to get hold into the Indian market. For a better understanding, two case studies will be presented subsequently which are:

1) Local CV OEM (TATA Motors): This case study will be addressing company policy, production strategy, ambitions and its future prospects. It will also further extend the work done by Bruche and Becker-Ritterspach (2010).

2) Foreign CV OEM (Daimler India CV): Daimler India has a clearly different strategy to get into the Indian market. This case discusses Daimler’s activities in India such as opening up their own production plant and forming joint ventures resulting into new relationships between local and foreign manufacturers. TATA Motors CV, representing the group of local OEMs, and Daimler India, as a representative of foreign OEMs, were selected because they are mainly targeting the same market segment and their vehicle portfolio includes light, medium, and heavy trucks for local and long distance deliveries and construction sites as well as buses. The case studies of these two companies will illustrate the traditional and emerging processes and their transformation as well as the impact of foreign OEMs on the Indian CV industry. Finally, possible improvements and lessons learned will be addressed in the two case studies in context with different market strategies that the companies have applied.

References:

Bruche, G., Becker-Ritterspach, F., 2010. TATA Motors and the Financial Crisis – with particular emphasis on the Passenger Car division. 18th International Gerpisa Colloquium, Berlin, 9-11 June 2010.

Kathuria, S., 1996. Competing through technology and manufacturing: a study of the Indian commercial vehicle industry. Oxford: Oxford University Press.

Rajmanohar, T.P., 2007. Indian automobile industry: an introduction. Hyderabad: Icfai University Press.

Thème: Processus d’émergence des nouvelles industries automobiles
Thème: The emergence of new automotive industries

The perils of obsolescence: The case of Opel

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Kerpen, Daniel (2012).  The perils of obsolescence: The case of Opel. Gerpisa colloquium.

General Motors (GM), the world’s largest automaker in 2011, has been tremendously affected by the 2008-2009 automotive industry crisis: Facing the Chapter 11 bankruptcy filing on June 8, 2009, the GM management and US government officials since then paved the way for a massive company restructuring process (Senter and McManus, 2010). Although being stock market relisted since November 2010 with the largest IPO in US history and reporting an EBIT-adjusted income of $8.3 billion for 2011 calendar-year, the GM recovery process still remains open-ended.

Purpose and approach: The above outlined reorganization is heavily affecting GM’s European branch of automobile production (former GME, defunct since 2010). It’s most important European subsidiary, Adam Opel AG, still remains in the focus of actual trouble-shooting interventions: The question to be addressed in this proposal is the analysis of Opel’s trajectory being affected by GM’s restructuring.

Therefore, first contribution of the presentation will be a comparison of the economic situation of GME in general and Opel in particular in the wake of the 2008-2009 crisis (before/during/after). This will shed a light on the core problems actually still troubling Opel, while competitors like Volkswagen and Renault-Nissan quickly reported recovery of production and sales figures following the latest crisis.

Secondly, I will contribute by analyzing structural problems affecting the future Opel restructuring and the companies’ continuing search for a sustainable strategy and market appearance. Hence, the following analytical dimensions will be of special interest (Boyer and Freyssenet, 2002): 

1) Focussing on markets, preliminary results are by the end of 02/2012: the long criticized restricted market appearance and limited export possibilities for Opel do not allow any or only marginal participation on lucrative export markets like GM’s US home market, as well as the Brazilian and Chinese market; remaining core markets solely are the shrinking or at best stagnating British, German, French, and Southern European markets, whereas in the latter ones sales decline because of the European sovereign debt crisis. GM’s recently announced assistance in Opel’s international marketing and retailing expansion (e.g. in Chevrolet-focussed markets like Russia) has yet to prove its success.

2) Regarding the productive organization, we actually see that Opel’s production sites within the GM Global Manufacturing System (GMS) are limited to Europe, too. Furthermore, plant capacities are not sufficiently utilized (only approx. 75 % against a target utilization of at least 80 %). The co-operation with potential partners like Peugeot, as recently discussed under a new strategic GM-PSA-alliance or partnership, has to be evaluated, e.g. concerning potential benefits in special car segments like B/C-segments; but it remains questionable as a means of diminishing existing overcapacities instead of closing production facilities, a topic currently fuelled by discussions about possible future shutdowns of at least Bochum or Ellesmere Port production site.

3) Observing the company’s product policy, the brand image setback of the 1990s quality problems still troubles Opel today. Although actually being back on track concerning product quality, fuel efficiency, and service, Opel is still affected by budget cuts in R&D in the wake of the GM bankruptcy; which has delayed technological product portfolio revaluations like direct-shift gearboxes or high-compressed downsize ICEs. Finally, the long-awaited and much-applauded range-extended EV Ampera/Volt models have yet to prove their appraisals in advance.

4) Finally, looking at company governance processes, the continuously replacement of top-management positions is tensioning the employees. Furthermore, the employee side persistently clings to concessions in context of an Opel restructuring 2011-2014ff. agreement achieved in fall 2010 (Bloecker, 2011), which is actually already put into question again by GM management. Finally, the newly-elected head of works councils representatives, Schäfer-Klug, has yet to fit in the confident and media-present role which predecessor Franz played while pursuing the finally failed GM-Opel separation.

Conclusion: In sum, these points may not only generally contribute fruitfully to this year’s conference in the selected topic. They may also stimulate discussion in particular with specialized research agendas, for instance researchers interested in future GM trajectories, future prospects of Opel/GM plants, as well as interest in current policies and actions of works councils.

References: 

Bloecker, A., 2011. Chances and failures concerning sustainable location- and job protection: The Case of Opel Bochum [in German]. Presentation prepared for the workshop “Chances and failures concerning sustainable location- and job protection with special reference to OPEL”, promoted by Office of Cooperation RUB/IMU, Hans Boeckler Foundation and Otto Brenner Foundation, Bochum, 24 October 2011. Online available: http://www.ruhr-uni-bochum.de/rub-igm/Transfer/ZWISCHENERGEBNISSE_I.pdf

Boyer, R., Freyssenet, M., 2002. The Productive Models. The Conditions of Profitability, Basingstoke and New York: Palgrave Macmillan.

Senter, R. and McManus, W., 2010. General Motors’ Steps to Recovery. Paper prepared for the 18th Gerpisa International Colloquium, Berlin, 9-11 June 2010. Online available: http://gerpisa.org/en/node/728

Thème: Trajectoires et stratégies des constructeurs
Thème: Manufacturer trajectories and strategies
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