The high- vs. low-road of development in the changing conditions of labour market: the case of the automotive industry in Poland

Abstract:

After twenty five years of expansion of the automotive industry in Central Europe, largely fueled by foreign investment, the region has become an integrated semi-periphery of the Western European core. The question arises to what extent this has been a high-road or rather low-road of development and how this affects its future prospects. This is an especially intriguing issue in the situation of new contrasting trends in the automotive sector itself as well as in Central European countries. There is an obvious shift of car demand to emerging markets outside Europe, continuous mergers and acquisitions, and last but not least major technological changes, for example a move towards electrification. This may considerably alter the structure of the industry in near future and threaten the position of carmakers and their suppliers in Central Europe. Their success has rested so far on the combination of cost effectiveness, good quality and reliability of local workforce. However, more and more producers begin to face the problem of scarcity of labour associated with demographic barriers together with out-migration to Western Europe in the previous decade. On the other hand, there is a fast growing migration to Central European countries, from Ukraine in particular.

The authors aim at capturing the contemporary attributes and trends in the automotive sector in Poland in four domains: the structure of exports and imports of high- and low-value added products, the competences of suppliers on the basis of the ISO/TS 16949 quality certificates, non-production competences such as design and R&D, and finally labour relations. In the case of the latter, the focus is on the segmentation of the labour market in automotive companies, the role of core workers, temporary employees and foreign agency workers. The analysis is conducted for both foreign subsidiaries and domestic manufacturers and leads to their classification as following high- or low-road of development. The relationships between these features and delocalisation and/or location of new activities in the country is discussed.