| La Lettre du GERPISA | no 102 |
Program News - Robert Boyer, Michel Fressynet, Yannick Lung
In fact, the 1990s do not only constitute a simple extension of the full-fledged crisis of the early 1970s - it represents a new period. Competitive gaps between automobile firms have been reduced thanks to internal reorganization, to changes in the labor market, and to the evolution in monetary exchange rates. Constructors and their suppliers seem to be seeking, once again, competitive advantages. They are reinstating decreases in production costs, especially by delocalizing a certain number of production units to countries with low labor costs, as well as the globalization of their sales by attempting to penetrate their competitors markets, including those of emerging industrial nations. However, this forceful endeavor is taking place in a global environment which is in the process of being redefined under the effect of at least four different and possibly contradictory processes : the liberalization of global exchanges and deregulation (WOC), the creation of regional groups (European Union, ALENA, APEC, Mercosur), the emergence of newly industrialized nations (particularly in Asia), and the progressive eradication of all obstacles preventing factory implantation in non or feebly-industrialized countries for re-exportation purposes. The formation of these new environments attributes to present day internationalization a completely new character, and its failure or success has become a major issue for the future of firms involved.
The spatial reorganization of automobile production and sales as well as flow between producing countries and markets will, indeed, once again evolve dramatically. Production outside of the country of origin will no longer be a relatively marginal portion of total production, as it has been up to now for most constructors.Their future performances will therefore depend on their capacity to master or homogenize different socio-productive systems. Even though these trends seem to be well on their way to establishment, the future is nevertheless not all that clear for automobile firms and their suppliers.
Indeed, industrial and commercial internationalization has been carried out in a world environment whose future characteristics are uncertain. Is the regionalisation phenomenon going to prevail through the constitution of groups mixing mature countries with semi-industrial countries, such as the Canada-United States-Mexico group ? or else, will general liberalization of exchange and deregulation have the effect of breaking up budding regional groups or will it limit their importance ? or still again, will political and social tensions brought on by these processes (eventually contradictory ones) provoke a return to the Nation-State in a certain number of cases ? And finally, won't some emerging countries, lured on by industrialized countries and their firms in need of growth, attempt at that point to acquire their own industry ? Automobile firms are already willing partners in these different scenarios through either previous choices or preferences for the future.
Whatever the final result of this vast recomposition, the creation of new economic environments has already perturbed social and political regulations which remain, for the time being and for the most part, within a national context. They are destabilized yet are not substituted, and this is the case in both industrialized countries and emerging industrial countries. This in turn accentuates uncertainty in the realm of the market and labor in both types of countries.
How will markets of emerging countries evolve from a quantitative and qualitative standpoint ? What will the growth rate and variability be ? Are trends which may be observed in several mature countries only passing indications of a transition period, or else are they signals of a new social situation? How long will workers of developed countries simultaneously accept deregulation policies, deflation and decreases in public spending as well as new competition from workers issued from less-advanced countries ? Will they take advantage of the eventual economic resurgence provoked by emerging countries? How will workers be capable of organizing and behaving in those countries where new production units are to be implanted ? These are just some of the questions firms will have to respond to in choosing their internationalization strategy.
The "Emergence of of new industrial models" program has shown that, beyond sharing certain principles and parameters which sometimes leads to a much too rapid conclusion underlining convergence towards a unique, optimal solution, the diversity of chosen paths and hybridation procedures set off by the transfer of production units to other institutional, economic, and social contexts, were at the origin of the creation of several industrial models. (Boyer, Freyssenet, 1995).
In the same manner, we must explore the hypothesis which proposes that the creation of new economic environments and their coexistence will produce new heterogeneous contexts situated beyond immediate or apparent convergences. This is due to at least four main reasons : the simple fact of their creation results from different social, economic, and political consequences, they can be contradictory, they can provoke social and political tensions whose outcome is unknown, they engage in competition either by remaining stable or acquiring particular advantages.
The globalization hypothesis as the unique industrial model hypothesis places worker relations in second place, when it even takes them into consideration. Markets command, and firms and their workers must simply adapt themselves. However, market homogeneity or heterogeneousness relative to volume, variety, and regularity will largely be a function of the homogeneity or heterogeneousness of worker relations, in other words, social forms of obtained profits redistribution. Present day processes of creating new economic environments seem to point more towards a large heterogeneousness of these social forms, hence of markets.
In all cases, automobile firms and their suppliers will probably face the multiplication of uncertainties concerning markets and worker relations. They will have to discover markets and worker relations found within the countries they wish to invest in industrially or commercially. But they will also have to face, if it already isn't the case, market and worker relation instability in developed countries where they are implanted, because of criticism of previously established regulations and the absence of new ones. For example, over the past few years, and because of a polarization of salaries in a certain number of countries, one may take note of an increase in demand for high quality and low quality automobiles, to the detriment of average quality automobiles.
Uncertainty will therefore play a role in both previous and present day economic environments. However, these new environments will no longer be marginal ones because of the market portion they will represent and the investments that will be made therein in terms of product and production. The survival and future position of firms will depend on the success or failure of this internationalization.
Before launching any type of study, and in order to give food for thought, one may imagine - from a purely theoretical standpoint - three market and work evolution scenarios (others are also imaginable) giving rise to three different types of internationalization strategies : global homogenization, regional differentiations/global commonalization, regional heterogenization.
However, the reduction and/or even suppression of customs duties, unopposed to other types of restrictions, especially that of being required to produce there where one wants to sell, firms should therefore be in the process of globalizing their industrial implantations.
In this context, one type of internationalization could consist in specializing spaces and production units within a segment of the gamut, either for the components or for the finished vehicle, as Ford says it wishes to do. With market variations for the same segment compensating for each other, the factory necessity for flexibility and polyvalence would be relatively weak.
With each production space thus specialized in a segment, one could imagine that each local subsidiary would be able to keep or to acquire a particular socio-productive system, without hampering the coherence of the entire automobile group. However, if this were indeed the case, these different socio-productive systems would imply different worker relations among implanted countries, therefore particular forms of redistributing revenues, eliminating, as a consequence, the hypothesis of homogenized demand as initially described in this first scenario. Hence, the possibility of uniting the conditions necessary for this type of scenario is weak, at least for the time being. One could imagine hybrid forms in its place. For example, homogenized demand would only be a reality in certain segments of the market, or for a socially specific international clientele. In these cases, the internationalization strategy model thusfar described could indeed be a pertinent one.
A global commonalization strategy for both vehicle platforms and certain principles of worker relations would offer a variety of regional product range on the surface as well as worker relationships with regional particularities which would nonetheless aim towards the same goal, for example flexibility and multi-functionality.
This scenario would lead to centralization in conceiving of platforms and general worker policy, to the globalization of component parts fabrication, and to a regionalization in conceiving of models and their assembly process, as well as concrete salary modalities.
In such a hypothesis, fabrication transfers could be carried out among regions in cases of both excess or lessened workload, or in order to take advantage of lesser costs of passanger production since production units would assemble different models on shared platforms. Widespread global contacts of firm production programs would thus be imaginable.
As for the preceding scenario, it is possible that the regional differentiation/global commonalization can only be pertinent for a portion of global demand and some countries of implantation. It would guarantee the viability of certain firms without undermining those choosing another scenario.
Hence, the market and labor would therefore be differentiated among the world's regions. Product range as well as worker policy would appear as being very specific. This scenario allows for the existence of several strategies : create multi-domestic firms and suppliers (Lung, 1993), consolidate only regional firms and suppliers. In the first case, regional subsidiarie would posses extended autonomy, the group's policy consisting in managing financial control and eventually communicating and circulating knowledge and experience. The viability of the second case depends on a refined knowledge of the market and on rapid reaction to its evolution.
For the time being, these scenarios have no other goal except to help provoke reflection on the possible links between previous choices of automobile constructors and suppliers / emergence of new political and economic environments / evolution and recompostion of automobile demand transformation of workers relations / firms and their strategies and forms of commercial and industrial internationalization.