This paper is based on research from an in-progress project on the effect ofglobalization on competition and jobs in the automotive industry.3 Its purpose is to gain aclearer picture of the emerging economic geography of automobile production. The projecthas found that automakers and their Tier 1suppliers are aggressively internationalizing theiroperations in search of new markets and lower production CONS. At the same time, thelargest automakers are attempting to centralize the product development and corporatecontrol functions of their organizations in their home locations, where they are wor~ngmore closely than ever with Tier 1 suppliers. we believe that both the centrifugal andcentripetal aspects of the ?globalization? prwess will have important long-term effects onthe character of competition; and the quantity, quality, and location of jobs in the sector.Moreover, many analysts who watch the automotive industry closely wam that theag=mssive offshore investment that we are seeing today wiil create conditions of severeexcess capacity in the near- and medium-term. A major ?post-globalization shakeout?could permanently alter the competitive landscape of the industry and have disastrousconsequences for the employees of the f- that lose.This paper provides a discussion the issues that have been raised by the project?sresearch so far. The fmt phase of the field research has consisted of a series of on-siteinterviews at automaker and Tier 1supplier headquarters in Europe, Japan, Kore%and theUnited States. The headquarters interviews have focused on four themes: 1)new marketidentilcation and facility planning 2) automaker-supplier relations both at home andabroad; 3) the commonWon of vehicle, componen~ and process design; and 4)geographic variations in methods of worker recruitmen~ training, and work organization.A second phase of the research, to be completed in 1998, will involve visits to selected onandoff-shore production sites. At the time of this writing, we have completed the firstphase of the research in the United States and Europe. Since the headquarters interviews inJapan and Korea have not yet been conducted, the following discussion will inevitably becanted toward the perspective of American and European firms. Futiemnore, some of thedata that we will provide are not yet complete, and are presented in draft form.The paper is organized in four sections. Section One presents the typology oflocations that the project has developed as a way to make sense of the data we collect.Section Two presents the empirical case: the geographic spread of automobile production.Section Three discusses some of the factors that are driving the new investment, especiallyslow growth and increased competition in established markets. Section Four outlines thestrategic responses of automakers to the increased risk and operational complexity causedby the globalization process itself.
