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The social and labour impact of globalization in the manufacture of transport equipment

Report for discussion at the Tripartite Meeting on the Social and
Labour Impact of Globalization in the Manufacture of Transport Equipment

Geneva, 8 - 12 May 2000

International Labour Office   Geneva

Copyright ©2000 International Labour Organization (ILO)

Part 4

Cover photographs: ILO/J. Maillard

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3. Global systems integrators: The
supplier industry reinvents itself

3.1. From auto parts to full-service suppliers

With lean production and outsourcing, the automobile parts (supplier) industry is increasingly important for global production chains.[1] Moreover, many companies are going over to modular assembly, in which the main component’s manufacturer not only supplies, but also coordinates the design, manufacture and installation of the major parts or systems of the car or truck. Within the context of NAFTA, many of the North American auto parts manufacturers, such as seat belt makers, have relocated production to Mexico. At the Saarlouis industrial park in Germany, another trend can be observed. Here the suppliers have installed themselves in a new industrial park in close proximity to the Ford plant in order to make deliveries on time. The International Metalworkers’ Federation breaks employment down by country and shows the auto parts industry to have the fastest employment growth in the sector.[2]

The recent wave of mergers and acquisitions (M&As) in the automotive assembly industry itself has triggered a similar round of merger mania in the auto parts segment. The Cleveland-based TRW takeover of LucasVarity (United Kingdom) has placed it among the largest independent auto parts suppliers. Although LucasVarity will initially close two plants in Ystradgynlais in South Wales and Cincinnati, Ohio, more jobs are expected to be created than lost in the long run.[3] Federal-Mogul is also becoming more acquisitive, having just taken over T&N of the United Kingdom.

Robert Bosch (Germany), the world’s largest independent parts manufacturer, was the first to enter Japan with its acquisition of Zexel, which may speed up consolidation in Japan’s components industry. The Renault/Nissan deal is expected to shake out the automotive parts industry in Japan. Two of Nissan’s suppliers that are members of its keiretsu or broader corporate group – Calsonic Corporation, which makes air conditioners and Kansei Corporation, a manufacturer of displays, sensors and airbags – will be the first to merge as a result.[4] (With three different suppliers of airbags in Japan, further rationalization measures can be expected.) Nissan plans to halve its suppliers from over 1,100 to 600, with concomitant job losses.[5] Valeo (France) is likely to take over Ichikoh, in which Nissan has a 20 per cent stake (other companies available include Exedy, a clutch maker, and Unisia Jecs, which makes engine parts and transmissions).[6] Visteon (Ford) also took control of Naldec, a Mazda-affiliated electronics parts supplier, and Delphi Automotive Systems has expressed interest in Toyota Motor.[7] Visteon’s acquisition of Plastics Omnium of France put it in a good position also to supply automobile companies on the Continent and now in Asia. On the other side of the ocean, Honda’s recent decision to locate in Alabama is closely linked to an existing network of suppliers which have already set up shop there to supply Mercedes. The same can be observed in Brazil, where parts manufacturers such as Fiat’s Magneti Marelli supply more than one company.

One of the more significant developments of recent years has been the transformation of the auto parts business into a separate industry in its own right. Several trends are observable, bearing in mind that North American companies tended to own their in-house suppliers, while Europeans relied more on independent suppliers like Robert Bosch. The spinning-off of Delphi Motors by General Motors is indicative, as is the floating of Ford’s Visteon.[8] These developments could bring advantages for both sides. On the one hand, liberated of their single parent-company supplier image, companies would be free to seek other customers worldwide and thereby increase sales (for example, Delphi is already picking up contracts with Nissan and Ford).[9] The parent companies, too, would also be free to shop around, forcing their previous in-house suppliers to become more cost- and quality-competitive if they want to maintain sales to their previous parent. Parallel to this is the expanded role that the first-tier suppliers are playing. No longer merely delivering parts according to specifications, they are increasingly being called in at the planning stage to design, develop and eventually install the components, or modules, they produce. BMW even describes itself as a “consultant” to its suppliers.[10] These suppliers then in turn subcontract the actual manufacture of the parts to second- and third-tier suppliers, and it is in these smaller companies that working conditions and labour relations practices are less easy to observe and document.

This has been one of the first effects of lean production. With the reduction of inventories and just-in-time (JIT) methods (or just-in-sequence as it is increasingly called), the entire responsibility has been transferred to the suppliers, for whom JIT can often mean “just too bad” if they miss a delivery schedule. Nevertheless, the major suppliers have responded to the challenge and relish their role as suppliers of transportation and communications systems.[11]

The top 14 companies (which include tyre manufacturers) ranked by employment are listed in table 3.1.

Table 3.1. The major global suppliers, ranked by employment

3.2. Increasing employment, but lower wages

Understandably, trade unions are concerned that the increased use of suppliers will result in the outsourcing of previous union jobs, at lower wages, to outside suppliers. They also fear that such companies, whether old or new, will not be unionized, or will be difficult to organize. A first look at the available data confirms this line of argumentation.

Information from the International Motor Vehicle Program (IMVP) of the Massachusetts Institute of Technology (MIT) and from the United States Bureau of Labor Statistics (see figure 3.1) show that while (final) assemblers in the United States shed about 50,000 jobs between 1987 and 1998, parts suppliers generated almost 150,000 jobs in the same period. Not all assembly jobs were eliminated, however, as many of the previous in-house facilities were sold or spun-off as independent parts facilities.

The shift of manufacturing – and of employment – to the supply base is hardly a panacea for auto workers. Jobs at non-captive supplier plants in the United States are more likely to be non-union and pay on average about 40 per cent less than final assembly jobs. Jobs at captive parts facilities pay on average about 30 per cent less. And, as [figure 3.2] shows, the assembly-supply wage gap has been steadily widening since the late 1970s. As suppliers become more important – and set up global operations – job quality in the automotive sector could continue to erode.[12]

Although wages in the United States automotive assembly industry increased from a little over US$17 an hour in 1977 to $19 an hour by 1995, they declined in the suppliers from $16 an hour to about $14 in the same period (see figure 3.2), although supplier wages still remained above the manufacturing average.

Data from the Canadian union CAW[13] tell a similar story. In the period from 1991 to 1996, while the major automobile assemblers added 3,000 new jobs (unlike their United States counterparts, which shed jobs), the independent parts producers generated about 30,000 new jobs and now employ about twice as many workers as the automobile manufacturers themselves (99,400 compared to 53,500, a much higher ratio than in the United States). In fact Magna International, Inc., the largest parts supplier, ranks second as an employer in the automotive industry, just behind General Motors, but ahead of Ford and DaimlerChrysler. Here too, the supplier-assembler wage gap is also underscored. Workers in final assembly operations earn CAN$25.65 an hour, while the suppliers average CAN$19.75. The story does not end there, however: when General Motors spun off some of its components to Peregrine in Oshawa in 1996, with some of the workers working on the same shop floor, CAW was able to negotiate that the workers doing the same job would take the collective agreement signed with General Motors with them. This was agreed under the concept of “work ownership”, whereby an employer could sell an installation or assets, but could not sell a worker and his or her contribution to that work. A new twist in this year’s Canadian bargaining round has been the demand that the Big Three (DaimlerChrysler, Ford and General Motors) undertake efforts to encourage Magna International, their largest supplier, to organize its non-unionized workforce. This has also been a concern of the UAW: with General Motors selling off Delphi and Ford’s plans to spin off Visteon they fear a loss of union members.

Research undertaken by Steffen Lehndorff on over 50 suppliers in four European countries found that with JIT and zero inventory, the workforce itself became the human buffer.[14] Table 3.2 shows the frequency of deliveries by various suppliers of parts. They range from every two days down to about every two hours. There have even been reports of lead times of one to one-and-a-half hours. Table 3.3 also shows the various labour market flexibility measures used by suppliers to meet fluctuating demand, which include increasingly resorting to temporary agency workers, fixed-term contracts and overtime pay for regular employees.

Differences in wages can also be seen for various suppliers in four European countries, wages usually being lower for the components manufacturers, as tables 3.4 and 3.5 show (except for the manufacture of pistons or if the same collective agreement applies). Wages also vary between countries for the same production, with those in Germany always higher than the others.

Table 3.2. Frequency of deliveries by suppliers to automobile companies

3.3. The case of Germany

In a study of the German automobile industry Peter Nunnenkamp looked at the process of globalization and at the importation of auto parts into Germany between 1980 and 1996.[15] He found that these grew in all areas, from bodies, motors and motor parts to electrical parts and components. But the growth was especially high for motors, while low for electrical parts and non-existent for bodies (given their size). The overall share of auto parts as a percentage of all automobile imports grew from 34 per cent in 1980 to over 42 per cent by 1996. Nevertheless, with few exceptions, most (two-thirds) of these imports came from high-income countries and did not reflect “job exports” to low-wage countries. In fact, the old ten-member EU accounted for over half of all imports into Germany, whereas the newer members (Finland, Austria, Sweden) had a share of 44 per cent. Nevertheless, the fact that the share of imported components doubled between 1980 and 1996 does point to a certain degree of relocation.[16] (See also case study on Ford and Saarlouis industrial park in section 3.7 below.) The trend today is probably more towards the export of parts from Germany to neighbouring countries for final assembly, and re-importation back to Germany or export to other countries, rather than the sourcing of components in other countries.

Table 3.3. Flexibility of working time in the automotive components industry: Frequency of use of overtime, fixed-term contracts and temporary agency workers

3.4. Competitive pressure

With the influx of over 200 Japanese auto suppliers into the United States between 1982 and 1992 (following the establishment of manufacturing plants by seven Japanese auto makers in the 1980s), and their entering into some form of business link with over 900 indigenous auto parts companies, the stage was set to compare their productivity with that of their American counterparts, as well as their competitive pressure. Overall, in a study by Yumiko Okamoto of some 500 first-tier suppliers, it was found that productivity in United States-owned companies was not as low as might have been originally thought, but that “US-owned independent suppliers improved their economic performance steadily between 1982 and 1992”.[17] This was not so much the result of technology transfer from their Japanese counterparts as due to increased competitive pressure.

As mentioned at the beginning of this chapter, the trend towards mergers and acquisitions in the supplier industry is intensifying and even spreading to Japan. Dana, TRW, Magna International, Delphi and Robert Bosch are expanding or setting up new operations in Japan or taking over Japanese equipment manufacturers at a pace unimagined in the past.[18] Surprisingly, too, it would appear that Japanese suppliers are not as far down the road with modularization as their United States and European competitors.

Table 3.4. Average gross wages of various parts suppliers as an index of final assemblers

3.5. Diverging trends

While German automobile makers have traditionally maintained an arm’s length relationship with their suppliers, United States companies have until recently relied on their in-house suppliers, a trend which may be changing, as noted above. Italy’s Fiat, however, may be embarking in a different direction as its automotive arm becomes more acquisitive and follows a separate strategy to strengthen its position as the world’s largest group in factory automation and production systems. After a spate of acquisitions by its subsidiary Comau (Renault Automation and Sciacky of France) it also took over the United States company Progressive Tools and Industries (Pico) to confirm its intent to expand in this automated systems sector of the automobile industry.[19] By some accounts, Ford may even subcontract out all its assembly operations in Brazil to Fiat.

Box 3.1 illustrates the fact that mergers and acquisitions are not limited to the major automotive assemblers but also extend to their suppliers, and that even the previous in-house suppliers to the big automotive companies such as Delphi are selling off units that are not part of their core activities. Through its strategic plan, Lear on the other hand is demonstrating its determination to focus on interior systems and to capitalize on the outsourcing and supplier consolidation trends in the industry. Despite its 350 per cent sales growth in the past five-year period and an increase in employment of 50 per cent in the past two years (accounted for mainly through acquisitions), this restructuring has not been without the closure of facilities or redundancies (accompanied by severance packages). Nevertheless, Lear, like other suppliers, hopes to make the shift from a supplier of individual parts (such as seats) to a provider of complete modular interiors, entire vehicle “chunks”, thereby doubling their sales potential.
 

Just as Lear has done for interiors, Dana Corporation has also been expanding its under-the-hood and under-the-vehicle assortment of supplies offered, which now includes brakes and brake fluids.[20] Similarly, Valeo “started its drive toward globalization”[21] in 1987 when it decided to focus on automotive components (mechatronics, thermal systems, transmissions and distribution) and has pursued a course of acquisitions, increasing its workforce by over 50 per cent in just two years (from 32,600 to 50,400 between 1996 and 1998). Denso of Japan also increased employment from 57,084 to 72,359 in the past year,[22] while all of PSA’s growth was in its automotive equipment business, up from 9,700 employees in 1996 to 25,900 in 1998.[23] Mannesmann is also following the trend by splitting itself into two companies, one which will focus on engineering and automotive parts, and the other on its telecommunications sector.

The trend in suppliers is therefore somewhat the reverse of what is happening in the automotive assembly segment. Instead of trying to cover the entire spectrum of the market through strategic acquisitions and alliances, suppliers are focusing on their core activities (whether the interior, exterior or chassis of the car) through a selective policy of acquisitions and restructuring, which also involves selling off those activities outside their specialization. They are also marketing themselves as suppliers of entire “systems” related to the provision of transportation services (for cars, trucks, buses, airplanes, etc.).

Table 3.6 documents the important share (already in 1996) that parts contributed by outside suppliers have in the final vehicle. This share has without doubt risen by today and is known to be around 76 per cent now for Renault (similar to that of the Japanese companies in the table). Given the fact that a large proportion of a car is provided by suppliers and segments come pre- or sub-assembled, it has been further calculated “that the labour costs for the assembly of a vehicle account for only 4 to 6 per cent (according to different estimates) of the sales price of a car!”.[24]

Table 3.5. Average gross wages in auto assemblers/suppliers as compared to Germany

3.6. The maquiladora industry in Mexico

The maquiladora (or in-bond) industry in Mexico has received a lot of publicity – both positive and negative. Many commentators have pointed to its success in creating jobs – over 1 million – and its major contribution to manufactured exports. Since the beginning of the decade the star performer has been the auto parts industry with a 31.4 per cent increase in employment to over 200,000 workers. Critics, however, point to the fact that real wages have stagnated, freedom of association and collective bargaining are often contested and maquiladora plants have not forged backward or forward linkages into the local economy, thus limiting the knock-on effects. In fact, local content in maquiladora production is still only 2 per cent on average.

The maquiladora industry was launched in 1965 through a combination of government initiatives on both sides of the border, and after more than 30 years of operation it is reasonable to expect that the system would show signs of progress in terms of the amount of value added in production, the skill content of the work, productivity and real wages. If maquiladora plants do not move forward on these counts, the social and economic benefits flowing from investment in the sector will be limited and questionable.

3.6.1. Skills

In most sectors unskilled and semi-skilled labour comprise the majority of the workforce. Half of those in the garment sector are unskilled labourers and 46.1 per cent and 47.3 per cent in electronics and auto parts, respectively. Assembly remains the predominant activity in all three sectors. In terms of percentages of skilled workers, less than 7 per cent of workers in the garment industry are skilled, while a higher proportion, 17.9 per cent, are classified as skilled in the auto parts industry. The statistics imply that there is a trend towards the creation of better-quality maquiladora jobs. The number of skilled workers in maquiladoras increased by 14 per cent in the years 1997 and 1998, while the number of manual labourers increased by only 12 per cent during the same time period. In the electrical/electronics industry and the auto parts sector, there is a declining proportion of manual labour and increasing numbers of technicians. Although the changes in employment may seem small in percentage terms, the numbers are significant once the size of the industry is considered.

3.6.2. Wages

Maquiladora firms in Mexico have traditionally paid their workers lower wages on average than those prevailing in the non-maquiladora manufacturing industry and, measured in real terms, the wages of maquiladora workers have declined. This remains one of the strongest criticisms of the maquiladora industry in Mexico. In fact, since 1975 real wages have fallen 20 per cent, in large part owing to repeated devaluations of the Mexican peso.[25] Salaries and benefits are nonetheless still higher than those required by federal labour laws in Mexico. Compared to its Central American neighbours, the Mexican maquiladora industry generally offers higher wages, at an average of US$1.92 per hour. It is hoped that by 2001, wages will have increased to $2.96 per hour.

While average maquiladora wages lie below the national average, it must be noted that they are pulled down by the low-skill, low-wage plants in the textile and garment sector. The wage differentials between industries are significant. The auto parts industry pays 89 per cent more than the textile and garment industry, while the electrical/electronics industry pays 70 per cent more than textiles and garments.

3.6.3. Delphi-Mexico

Delphi Automotive Systems (DAS, formerly part of General Motors) has many long-established plants in Mexico – 53 in all – and has become the second largest private employer in the country, with more than 75,000 workers in 1999. Internationally, Delphi-Mexico employs a little over a third of the 204,000 working for the company worldwide. The Delphi Technical Center in Ciudad Juarez, which borders on El Paso, Texas, remains the best example of a dynamic centre where the nature of the maquiladora goes beyond simple production processes, such as the assembly of harnesses and other components, performed by unskilled labour.[26]

Delphi is one of a handful of pioneering companies which possibly represent the start of a new era in the Mexican maquiladora industry. First-generation maquiladora enterprises were characterized by high numbers of unskilled, low-paid, young female workers relegated to repetitive tasks, while the R&D and other high value added activities of multinational companies investing in Mexican maquiladoras remained in their home countries. This tended to restrict Mexican maquiladoras and export processing zones in other countries to the bottom of the production chain. The second-generation maquiladoras brought machines and automated equipment together with new forms of work organization. Firms such as Delphi, which Jorge Carrillo terms “third-generation”,[27] however, are looking beyond the simple cost and geographical advantages of assembling in Mexico towards integrated manufacturing facilities with knowledge-intensive production processes. They are even transferring research, design and development (R&D&D) activities from the United States to maquiladora plants, where they are run by Mexican engineers trained at the former United States facilities. Work is often organized on a project basis, with multiskilled teams responsible for all stages of design, production and distribution. The search for continuous improvement is a driving force in the organization of work and ongoing training is more common.

The manufacture of televisions in Mexico seems to be emulating the upgrading of the auto parts sector, with more technology- and knowledge-intensive investment taking place. It is too early to decide however whether this is a general trend or an industry-specific development. Local content is still low and backward linkages to local suppliers are scarce, thus restricting the benefits to the surrounding economy. Government policy measures may well be required to ensure not only that an educated and trained workforce is available to sustain higher value added production but also that maquiladora production chains become more fully integrated into the Mexican economy.

Table 3.6. Percentage share of outsourced parts in final vehicle, 1996

3.7. Ford's supplier network and Saarlouis
industrial park: A case study[28]

3.7.1. Strategy

Ford is trying to reduce the number of platforms used worldwide from 32 to 16; the number of engine architectures from 30 to 14; and the number of gearbox families from 22 to 15; while it is seeking to increase the share of identical parts in all models of the Ford group from 21 per cent to 50 per cent. This global architecture programme will include all brands of the Ford group such as Ford, Mercury, Jaguar, Mazda, Lincoln and Volvo. The intention is to reduce the number of parts to be assembled as well as the complexity of the parts, which should also improve quality.

With globalization of supplies, Ford Werke AG in Cologne aims to buy at the lowest prices worldwide, no longer giving special consideration to local or long-term suppliers. New parts that are needed will be bid out to old and new partners alike. Bigger volumes are planned to increase the productivity of the suppliers and benefit both partners. Because of worldwide logistics and the large volumes, some components might have to be produced by more than one supplier. The company considers including several partners on the supply side in the development of parts and components; these will gain the special status of Ford full-service suppliers and will be involved at an early stage in the design and production of new models.
 

As a result of this single-sourcing policy and the shift to supply modules instead of a number of parts, the number of direct suppliers is continuously decreasing, for example, from 700 companies directly supplying parts for the Ford Escort, to 210 for its successor, the Ford Focus, to be further reduced to 100 for the successor to the Ford Fiesta. Ford hopes that the majority of these suppliers will be full-service suppliers – larger companies supplying bigger volumes and bearing some of the risk of making the model successful.

With Germany’s car market the largest in Europe, Ford Werke became the headquarters for the European Ford companies. Offices for the purchase of machinery, parts and components for the European factories have been concentrated in Cologne and Basildon, United Kingdom. Of the 650 staff in the purchasing department of Ford’s European office, 300 are located in Basildon, 300 in Cologne and 50 in offices in Valencia, Prague, Warsaw, Budapest and Turin. This is a sign of the increased international division of labour with borders no longer the most important determinant.

The total volume of supplies in Europe is DM34 billion – 29 per cent for machinery and 71 per cent for parts and components. Figure 3.3 shows the sources of supplies in Europe, over a third of which are bought in Germany, almost a third in the United Kingdom and most of the rest in Western Europe (with the United States accounting for less than 7 per cent). Although the share of German suppliers will be kept constant, there are plans to buy more of these parts not in Germany but from their international affiliates.

3.7.2. Saarlouis

The new approaches to cooperation between Ford Werke in Cologne and its suppliers are illustrated by the new production plant of the Ford Focus in Saarlouis, Germany, where a special industrial park was opened in September 1998 for Ford suppliers. Total investment in the industrial park is DM250 million – 100 million by a special public entity, Saarland Bau- und Boden-Projektgesellschaft mbH and 150 million from the suppliers. A total of 800 new jobs have been created. On an area of 50,000 square metres, 12 suppliers produce modules for the Ford Focus factory, using just-in-sequence production methods, i.e. producing their modules in the same sequence as the Ford line is running. To transport the parts to the production line a fully automatic hanging rail transport system has been installed, which allows the transport of parts in minutes to 16 different areas of the assembly line in the neighbouring Ford plant.

The innovative logistics system saves 300 truck transports per day and 5 million transport kilometres a year as compared to the traditional system. To assure the timely supply of components in just the right sequence, an intranet has been installed for the continuous exchange of data between the Ford production plant and the suppliers, which are informed six days in advance of the planned production sequence so that they can adjust their own production. The final call of the real production sequence is done on the day of production by a central computer.

The industrial park concept, with its direct automatic delivery system (DADS), allows Ford Werke to produce the car more efficiently, quickly and cheaply, and with greater precision. There is no need for storage of parts and components at the Ford plant, although materials for suppliers are stored in their own plants. Ford Werke sees this production plant as a step to keep production in Germany competitive with other production sites, while the physical proximity of the suppliers allows Ford Werke to implement various new forms of cooperation, for example by sharing some of their social and safety installations, such as the medical service and the fire brigade.

Ford Werke offers its partners in Saarlouis assistance for future cooperation in the field of research and product development. Common quality standards such as ISO 9000 are required and applied by all companies in Saarlouis. Simultaneous engineering teams composed of staff from Ford Werke and from the suppliers plan new, even more efficient production methods. As a result of early integration of suppliers in the whole production planning process, 70 per cent of all parts were available during the test phase six months before the start of the actual production in Saarlouis, compared to 30-35 per cent of the parts in the test phase at other Ford production lines.

Ford Werke organized the biggest ever training programme in their history to prepare the production of the Focus. More than 200,000 training hours were provided by 100 specialists over two years at a cost of DM40 million.

Not only has the number of suppliers been reduced significantly, the number of parts has also been cut from 4,600 for the Ford Escort to 3,000 for the Ford Focus. This is mainly due to the use of prefabricated modules supplied up to the assembly line. For example, the dashboard and the steering system, each containing about 300 parts, are both supplied as modules.

The new physical production system is combined with a new three-shift model of working time, based on flexible group work. Ford Werke estimates that the new production system has increased efficiency by 25 per cent.

Table 3.7 Full-service suppliers in Saarlouis

3.8. WYSIWYG[29] purchasing

Figure 3.4 shows how ordering, purchasing parts, coordinating their delivery and assembly can be organized electronically.

As figure 3.4 and table 3.8 show, the automobile industry is now beginning to reap the benefits of the communications revolution. In fact, auto.com has become a virtual reality, with independently run on-line services permitting customers to bypass showrooms and dealers altogether.[30] Autobytel is also planning to enter the European market with plans to replace dealerships once the EU block exemption expires in 2002.[31] Other websites are run by the companies themselves. Ford, Opel (GM) in Europe and Fiat are among the first to offer the possibility of ordering and customizing the configuration desired on the Internet.[32] A Mustang can already be configured and delivered within 21 days, and Honda is now promising a car within five days.

3.8.1. Intranets and Extranets

In addition to the individual intranet of specific companies, the United States Big Three are in the process of establishing a comprehensive automotive network (ANX) which will electronically link these manufacturers to some 10,000 suppliers worldwide and realize an estimated savings of $1 billion per year.[33] Plans are also apparently under way for a European Extranet.

Table 3.8. CarsDirect.com faces Web competition: On-line car order services, 1999

[1] John Humphrey: Globalization and supply chain networks: The auto industry in Brazil and India, Geneva, ILO, International Institute for Labour Studies (forthcoming).

[2] International Metalworkers’ Federation (IMF): Auto Report 1998-99, p. 32.

[3] A. Edgecliffe-Johnson: “LucasVarity jobs go as two factories close”, in Financial Times, 30/31 Jan. 1999.

[4] Norihiko Shirouzu: “Nissan’s tie-up spurs suppliers to merge”, in Wall Street Journal, 24 Mar. 1999, p. 5.

[5] Tim Burt: “Nissan plans drastic $9bn overhaul”, in Financial Times, 19 Oct. 1999, p. 1.

[6] Alexandra Harney: “Components group plans Asia push: Valeo seeks equity links in Japan”, ibid., 7 June 1999; idem: “Valeo sets up car parts link with Japan”, ibid., 21 Oct. 1999, p. 20; idem and David Owen: “Valeo set to unveil new deal in Japan”, ibid., 28 Oct. 1999, p. 26.

[7] idem: “Toyota Motor resists alliance with Delphi”, ibid., 20 July 1999, p. 22.

[8] In fact, the contracts of Visteon’s workers were the main subject of negotiations between the United Auto Workers Union (UAW) and Ford this year, with the result that workers will retain their Ford contracts (for life) and have first choice of a Ford job if one comes up. It is unclear, however, how this will work, but it may involve Visteon refunding Ford the salaries in question. International Herald Tribune, 13 Nov. 1999.

[9] Nikki Tait: “Delphi to buy back shares as it exceeds forecasts”, in Financial Times, 20 July 1999, p. 16.

[10] “Suppliers were furthermore encouraged to give their own assessment of BMW in the Lieferantenreport (Suppliers’ report), contributing to the company’s awareness of how collaboration with suppliers could be further improved.” BMW Annual Report 1998, p. 128.

[11] See full-page or colour advertisements recently taken out by large suppliers in various newspapers, such as TRW in the Wall Street Journal of 12 May 1999 (“We’ve expanded our global reach ... determination to be our customers’ best supplier in every market we serve around the world”), “A car without Bosch”, in International Herald Tribune, and Delphi Motors, ibid., 14 Sep. 1999.

[12] Timothy Sturgeon and Richard Florida: The world that changed the machine: Globalization and jobs in the automotive industry, Final Report to the Alfred P. Sloan Foundation, draft, 5 May 1999, pp. 76-77.

[13] National Automobile, Aerospace, Transportation and General Workers Union of Canada; see CAW: 1999 Collective Bargaining and Political Action Convention: Sectoral analysis. http://www.caw.ca/99convention/sa_autoparts_econ.html.

[14] Steffen Lehndorff: “La flexibilité chez les équipementiers automobiles en Europe”, in Travail et emploi (Paris), No. 72, 3/1997, pp. 67-78; and Human beings as buffers: Time constraints and autonomous time management under the just-in-time regime, mimeographed document, Institut für Arbeit und Technik, Gelsenkirchen (Germany).

[15] Peter Nunnenkamp: “Die deutsche automobilindustrie im Prozeß der Globalisierung”, in Die Weltwirtschaft, Heft 3, 1998 (Tübingen, J.C.B. Mohr), pp. 294-315.

[16] ibid., p. 304.

[17] Yumiko Okamoto: “Multinationals, production efficiency, and spillover effects: The case of the US auto parts industry”, in Weltwirtschaftliches Archiv, Vol. 135(2), 1999, p. 258.

[18] A. Beaudet: “Modularization and consolidation in the global auto parts industry: The road ahead for Japanese auto suppliers”, in La Lettre du Gerpisa, No. 135, Oct. 1999, p. 11.

[19] “Fiat buys to strengthen its subsidiaries”, in Financial Times, 31 Mar. 1999, p. 21, and John Tagliabue: “Italian seeks to bring GE’s magic to Fiat: Fresco wants to revitalise an empire”, in International Herald Tribune, 13 Sep. 1999, p. 13.

[20] Dana Corporation: Focused Growth (1998 Annual Report).

[21] “The acquisition of [ITT’s Electrical Systems] fits in perfectly with Valeo’s strategy of the past 10 years designed to make Valeo, through internal growth and acquisitions, a global player in electrical and electronic components and systems.” Valeo: Annual report 1998, pp. 1-2.

[22] Denso: Annual Report 1999.

[23] PSA Peugeot Citroën: Annual Report 1998.

[24] Jean-Pierre Durand: “Introduction: The diversity of employee relationships”, in Jean-Pierre Durand et al., Teamwork in the automobile industry: Radical change or passing fashion? (London, Macmillan, 1999), p. 8.

[25] A. Hualde: Las maquiladoras en México a fin de siglo (ILO, 1997), p. 10.

[26] For more on this Center see in particular Jorge Carrillo: “Industrial upgrading in Mexico: The case of General Motors”, paper presented at “Global Production and Local Jobs”, International Institute for Labour Studies, Geneva, ILO, 1-10 Mar. 1998, pp. 17-20.

[27] ibid.

[28] Based on a case study by Robert Stryk: The impact of globalization on the German transport equipment manufacturing sector, Sectoral Activities Programme Working Paper (ILO, forthcoming).

[29] What you see is what you get.

[30] Fara Warner: “CarsDirect.com aims to become Amazon of auto world: Bypassing showrooms, venture will sell vehicles entirely over Web”, in Wall Street Journal, 17 May 1999, p. 15.

[31] Tim Burt: “Autobytel to push online car sales in Europe”, in Financial Times, 8 Oct. 1999, p. 24.

[32] “WYSIWYG purchasing, or how to buy a car on-line”, in International Herald Tribune, 14 Sep. 1999, p. 10.

[33] Jack Olin, Noel Greis and John Kasarda: “Knowledge management across multi-tier enterprises: The promise of intelligent software in the auto industry”, in European Management Journal, Vol. 17, No. 4, Aug. 1999, p. 342.

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