| La lettre du GERPISA | no 109 (janvier 1997) |
Programme News - Michel Freyssenet
Group "Strategies and trajectories of globalization of the firms of the car industry"
The first debate focused on the question to know if each member of a group would be specialized in one firm, like in the first programme, or if he would compare directly two or three trajectories of globalization, what would lead to a comparison immediately stimulating and easier to make than one of the entire trajectories of firms. The participants of the meeting prefered to keep the principle of specialization by firm because a deep knowledge of the firm is necessary to connect correctly its trajectory of globalization to its whole history. However, the other possibility could be useful especially in the case of comparisons with historical periods of the past or with average suppliers. Then, comparing the trajectories on a national and international level would be the function of the group.
Most participants agreed to use the process of analysis proposed in the table of the Letter 107, derived from the one of the group "Trajectories" of the first programme, to understand the meaning of the choices made as far as globalization is concerned. They also considered it as a useful protection against a scholary monograph that several members of the group "Trajectories" in the first programme had been afraid to fall into. Thus, the purpose is to identify the problems of profit strategy that firms had to face in the 1980s' and in the beginning of the 1990s' and to show how the chosen strategies and forms of globalization have tried to find a solution to these problems according to the financial and human means available. The origins of these problems may be found in the transformations of the market, work, and the political and macro-economical context, and in the dynamics itself of the new industrial models of the firms. The object of the group would then be the description of the transformations of the product policy, the socio-productive organization (design process, purchase, production, distribution) and the employment relation. The chosen strategy and form of globalization, the problems created by these tranformations and the reactions among wage-earners, suppliers, clients and affected countries may have been raised or made necessary by these transformations. Finally, the results obtained will be evaluated.
Like it has been said before, globalization can have different forms : global, regional, international, multi-domestic, transregional and so on but it can also have different ways : by direct transplant, alliance, licence agreement, in all the following domains : design process, purchases, production and distribution.
The group wondered about the extent of the field of the suppliers that has to be covered : which ones should be taken into consideration ? The major ones before all others. Great suppliers in equipment goods will be added as soon as possible.
Finally, it is necessary that the members of the group provide calculated or qualitative informations comparable on the following points, in order to measure the extent and results of the different forms of globalization : the evolution of the spatial repartition in volume and percentage of productions, purchases, sales, investments and profits, the evolution of the penetration rates of the various target markets and the shares in national productions, the evolution of the flux between countries (spare parts, motors, CKD, ready-to-sell vehicles), the models produced and sold in each country, the nature of the transplants (assembly factories, mechanical factories, R&D centers, design centers, distribution centers, financial departments).
The French group is coordinated at the present time by Michel Freyssenet and Lydie Laigle. Gérard Bordenave hopes he will be able to contribute to this coordination by the spring of 1997. Today, researchers declared as participants are : Bordenave (Ford), Chanaron (the suppliers must be determined), Chung (Hyundai), Freyssenet (Renault), Laigle (Valeo and Bertrand-Faure), Loubet (PSA since 1975, and the four French car manufacturers from 1945 to 1974), Raff (must be determined), Shimizu (Toyota, Mitsubishi), Tolliday (GM and Ford between World War I and II), Volpato (Fiat). We are still waiting for the answers of Belzosky (Chrysler), Berggren (Volvo), Flynn (GM), Hanada (Nissan), Jurgens (Volkswagen) and Mair (Honda). We are still looking for competent researchers for Mercedes, BMW, Daewoo, Delfi, Siemens, Bosch, Comao, Nippondenso, etc.
Group "Production organization and employment relations"
The purpose of the group is to study the convergence or the divergence of the production organization and the employment relations of the firms according to their trajectories of globalization.
Four main topics have been selected as strarting points. A sub-group could be created for each topic; the persons in charge already known are mentioned :
1) The production organization
2) The product policy and the management of innovation
3) Relations with suppliers and distributors
4) The employment relations
1) The production organization (person in charge : Bruno Jetin)
The main purpose is to evaluate the degree of globalization of the firms with a methodology that still has to be defined in order to make a first comparison of the firms between themselves. We will try to establish a geography of globalization to determine the places of implantation and the target markets. A second topic of research could be the analysis of the evolution of the functional division of firms. How does the conduct of "international operations" take place ? What is the centralizing degree of the head office ? The third topic is the product policy. Will we ever have a "global car" ? Does globalization increase the variety of the offer ? To answer these questions, we will use and improve the "models/platforms" methodology of the former group "production organization" in order to obtain a measure of the international variety of car ranges (commercial variety) and then we will compare it with with the number of platforms (industrial variety). Finally, we will put in touch the variety of the described offer with the geography of the places of implantation of the firms to evaluate their global strategies.
2) Product policy and management of innovation (person in charge : Jean-Pierre Durand)
The first purpose is to study the organization of the firms in the field of the conception of the offer and to analyse if globalization has modified this organization. The second object is to analyse the development of the relations between products and process. To what extent does globalization incline firms to ameliorate the "manufacturability" of their products ? To answer this question, an analysis of the process of innovation itself is necessary as well as the analysis of the condition of the producing sites that firms are using.
3) Relations with suppliers and distributors
3.1) Suppliers
One of the first objects of this topic will be to measure the reality of the "world sourcing" policy. We will add to this first analysis of the relations between car manufacturers and suppliers another analysis of the strategies of globalization of the suppliers themselves. Finally, we will have to analyse the strategies of the suppliers whose companies are subsidiaries of manufacturers. For instance, this is the case of Delphi and other American suppliers who buy European suppliers to reinforce their implantation in Europe.
3.2) Distributors
The reflection has progressed less in the field of distribution; The discussion focused on the necessity to analyse distribution in accordance with the strategies of globalization of manufacturers and not from the point of view of the greatest independant firms of distribution. For instance, how do manufacturers work out the contradiction between the maximum geographic cover of the markets and the necessity of a control on the distribution of their models ?
4) Employment relations
This topic has to be treated from a new angle : the one of the globalization of the firms. However, we will have to rely on the results of the former programme, especially those of the "hybridization" and the "employment relations" groups that focused on team work.
The first question would be this one : to what extent does globalization encourage the firms to modify employment relations in the existing sites of production ? It would be interesting to tackle the aspects concerning employment relations that were less developped during the former programme : How is modified the contract of employment ? Does globalization promote or damage employment ? What is the role and the importance of the trade-union strategies ? Another field of research appeared during the discussion : the expatriation and the impatriation of the executives. Can a firm become global without executives of different nationalities ? To what extent do foreign executives participate in the creation of a "company culture" adapted to the global strategy of the firm, if there is any ?
Group "Car Markets and employment relations"
The main object of this group is the question about convergence/divergence of car markets and its deciding factors, that is to say the social structure, the labour market, the distribution of incomes, the transport policies, the type of urbanization, etc. The idea of a global, homogene and integrated car market, which is often connected to talks about globalization, presupposes indeed a homogeneization of the demand on various local and regional markets and, before that, a convergence in the relations between the different societies and the car industry.
1) A descriptive analysis of makets
This analysis will concern the evolution of the sold products, the segmentation of markets (what kind of segmentation, importance of the different segments, multiplicity and diversity of the niches), in private cars as well as in other types of cars (light trucks, monospaces, four-wheel drives, etc.). It will not be limited to the main markets of the Triad, but will also concern the re-boosted markets (Latin-America) and the emergent ones (Asia) : reality of the potential growth of these markets, type of products, etc. The following hypothesis will have to be tested : is there any convergence towards a homogene product or a dominating segment (the one of compacts and sub-compacts) ? Is there any convergence by a partial recovery of the various local segments of the markets that would allow to benefit on a global level from the demand of an identical type of product according to local and specific expectations. Actually, each market has specific segments : light trucks in the U.S.A, minicars in Japan, breaks/monospaces in Europe, pick-ups in emergent countries, etc...
2) Looking for converging/diverging factors in the demand
The convergence/divergence of markets depends on its deciding factors. Along with classic factors, such as income and urbanization, the group will have to analyse practices of mobility and relations between society and the car industry (support of the State in the distribution of cars, choices between public and private transportations, social representation of the automobile,control of the use of cars in town, importance of the ecological movements). The technological evolutions of the products (convergence and divergence of anticipations of the firms and the public policies as far as regulation and homologation are concerned) will also have to be analysed.
On the basis of various existing works and statistical analysis on car demand, we will first try to determine the impact on the demand of the evolutions and the social distribution of incomes in the Western countries and the developing countries, especially the increase of disparities during the recent period : is a part of the population (in the U.S.A and in Europe) excluded from the new cars market ? Is there any complementarity or competition between the secondhand and the new cars markets ? In the emergent countries, does demand stem from wage-earners or independant professions ? How is evolving the access to the car market by the car industry workers (this question leads to the calculation of the "real price of cars" with a rate of the following type : price of a bottom-of-the-range vehicle / wage of an unskilled worker recently engaged) ? etc. Later on, we will analyse the new modes of consumption (electronic as a substitution to the car ?) and mobility (share of the same car, car rental, etc.) and the marketing strategies that associate the coupling of urban mini-cars and car lending (Smart). Nowadays, another important question concerns the hamonization of technical norms and it could even become an interesting object for research according to the theory of standards and the strategy of actors in this field.
3) A historical approach of comparative trajectories of the markets
As far as the emergent countries are concerned, a specific work must be started (in relation with the group "New areas") to evaluate prospectively the possible evolutions of these markets. A historical re-reading of the formation of markets in Western countries would be very useful to study their convergence/divergence.
Particularly, the interference of the State in the emergence of these markets, through the development of nets of road infrasturtures, arbitrations between transportation modes and the different supports possible to the car industry (fiscal systems, protection, etc.), will have to be clearly identified. Several works on these questions are available. They will be very useful.
The reconstitution of large historical successions concerning markets could provide an interesting basis for the three topics (see the project of historical directory). It is possible that the few orientations outlined are not enough to exhaust our question of research (the convergence of markets). In any case, they are yet very ambitious. Therefore, it is very important to specify these orientations again in order to achieve a work programme scientifically relevant and feasible.
Group "New spaces for the automobile industry"
The purpose of the first meeting was to start a reflection on the topics to cover and the type of studies to undertake.
The priority will certainly be given to the study of the establishing of car systems, in other words the systems formed by manufacturers, equipment makers and ditributors in the emergent countries : South-East Asia, China, Latin America and Eastern Europe. Each country and each firm or subsidiary would be analysed and all the actors will be taken into consideration. The necessity to create strong synergies with all other groups is more than ever obvious.
We will appreciate all reseaches focused on the emergent countries and new areas, either globally or on particular aspects (for instance the evolution of state, economic, monetary and social policies, regulations, work, etc.).
Researches focused on companies can be made by studying the car industry in each concerned country. Case studies concerning new implantations, subsidiaries or joint-ventures, manufacturers and suppliers, or concerning the evolution and the performances of former implantations according to the present evolutions in the strategies of globalization of mother-firms and the transformations of the economic and political context. Everyone agreed that it would be very interesting not to limit the observations to the subsidiaries of manufacturers and suppliers, but also to look into the cases of local companies of equipment makers and distributors.
The field is so wide that an organization divided in sub-groups dedicated to large areas or regions seems to be logical, but not inevitably exclusive. Thus, we have for instance the forming of a sub-group for South-East Asia coordinated by Yveline Leclerc mainly dedicated to the study of the delocalizations of the Japanese companies.
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