Clarification of Answer by
markj-ga
on
30 Nov 2004 11:00 PST
sraposa53 --
Thanks for your clarification request. As you might expect, a
researcher's approach to lower priced questions is generally to
provide accurate and concise information based on sufficient research
to have reasonable confidence that the information is accurate and
reasonably comprehensive.
That is why I chose the sources that I did, although I can understand
why you would like the answer to be fleshed out a bit, and I am happy
to do that for you.
Let's start with the "horse's mouth," that is, the Japanese Automobile
Manufacturers Association ("JAMA"). Here are links to what that
organization has to say about the move to manufacturing of automobiles
within the countries that had been export markets for Japanese cars:
JAMA: Japan's Auto Industry: Internationalization Strategies
http://www.jama.org/about/industry12.htm
JAMA: Towards a Global Industry: 1985-95
http://www.jama.org/about/industry13.htm
For copyright reasons, I cannot reproduce substantial portions of the
text of this material, but I suggest that you read it for a useful
summary of the historical context of the decision to "transplant"
manufacturing facilities to North America in Europe.
In essence, this is what happened, as explained more fully in the JAMA history:
1. During the 1970s and early 1980s, oil shortages and high prices
were rapidly increasing the demand for fuel-efficient cars in the U.S.
and elsewhere. Unlike the United States automakers, Japanese
manufacturers had taken the lead in producing such cars for their
domestic market and for export to the U.S. and Europe.
2. With the accelerating increase in Japanese importation to the U.S.
to respond to consumer demand, politicians here were calling for
protectionist legislation and trade policies to protect American
automakers and the many domestic jobs that they provided.
3. To head off such draconian measures, the Japanese automakers
agreed to limit exports to the U.S., and they naturally began
considering other ways to participate in the U.S. market with their
well-engineered, fuel efficient cars. Obvious components of such
participation were joint ventures with U.S. automakers and producing
cars in this country using U.S. workers.
4. Negotiating joint ventures with U.S. automakers proceeded first
and quickly. However, the initial Japanese entry into U.S.
manufacturing was very limited and experimental because the ability of
Japanese corporate culture and manufacturing methods to adapt to the
U.S. environment had to be assessed before a major commitment to
"transplanting" manufacturing facilities was undertaken (more on that
below).
5. The success of the early Honda (and other) manufacturing
"transplants" to the U.S. and the growing globalization of commerce
generally has resulted in the continued expansion of Japanese auto
manufacturing in North America and Europe.
Again, this history is described at the JAMA Web pages linked above,
which I recommend that you read in their entirety.
Now, let me fill this basic information in with some more detail.
Here is a link to a review of a book entitled "Beyond Mass Production:
The Japanese System and its Transfer to the U.S.," by Martin Kenney
and Richard Florida:
Barnard College: Electronic Archive and Teaching Laboratory: Book
Reviews: "Beyond Mass Production: The Japanese System and its Transfer
to the U.S."
http://beatl.barnard.columbia.edu/dye/book_reviews/book_review11.htm
This book (and the review) provide more detail about the Japanese
manufacturing methods that had to adapted to the U.S. environment in
order for the "transplantation" of auto manufacturing to succeed.
For your purposes, you should focus on the section entitled "The
Japanese Transplants in the Automobile Industry," which begins about
halfway down the page. That section discusses the experimental phase
of the initial transplantion experiments and their ultimate success
and expansion.
Here are three paragraphs from the book review. The first two
summarize the reasons for transplantation and the second is the
author's ultimate conclusion as to their success:
"In the 1960's and 1970's, the Japanese began marketing fuel conscious
and economic cars. Although underpowered, these cars gained popularity
in the United States with the looming oil crisis in the 1970's.
Fearful of Japanese over-expansion into the market, US automakers
called for protectionism from the US government. The government
responded by announcing the creation of the Voluntary Restraint
Agreement (VRA), in which the Japanese automakers "volunteered" to not
increase exports to the United States. However, the demand for
Japanese imports in the American market was too strong to resist, and
the Japanese "big two," Toyota-Nissan, began to explore ways to access
the US market. One strategy explored was the development of joint
ventures with US automakers to have a share in the profits from
Japanese imports. While this plan worked in the short run, it did not
dispel American opposition.
"In 1977, Honda became the first Japanese automaker to have a United
States production plant, in Marysville, Ohio. This plant was
specifically for the production of motorcycles. Honda felt the need to
start out small, and test the American market first, before moving on
to the full scale production of automobiles. By the mid-1980's, Mazda,
Nissan, Mitsubishi and Isuzu had full automobile production plants in
the United States, as well as a joint Mitsubishi-Chrysler factory in
Canada."
___________________
"By 1990, Japanese transplants were producing 1.49 million cars
annually in the United States. These transplants were successful for
the following reasons. The use of teams and rotation of workers to
achieve functional integration of tasks, the recruitment,
socialization, and remuneration to motivate work and work force
commitment, and an overall patter of work organization that harnessed
mental and manual capabilities of workers. The Japanese automakers
were also expanding largely to their Just-in-time system of supplies."
Additional Information:
Here is a summary of the reasons Japanese transplants also have thrived in Canada:
"US-owned MNEs [Multinational Enterprises] produced and sold cars
virtually unchallenged until the early 1980s when Japanese-made cars
began to be penetrate the North American market. The Japanese
transplants came to Canada in the mid-1980s - just after they had
built assembly capacity in the United States. They invested in Canada
for a number of reasons - market access, the Voluntary Export
Restraints, which Canada negotiated with Japan shortly after the US
did so, and location incentives offered by the Canadian government.
Aware of transplant investment in the United States, and cognizant of
the jobs new assembly capacity would create, the Canadian government
made a conscious effort to attract the transplants to Canada. While
Auto Pact status was out of the question at the time, the Canadian
government offered Honda and Toyota duty drawbacks and duty
remissions, which essentially allowed them to import parts and
vehicles duty free if certain export performance levels were attained.
"
Canada: Policy and Advocacy Breakfast: Discussion Paper No. 1:
Multinationals as Agents of Change: Setting A New Canadian Policy on
Foreign Direct Investment (Google-cached dodument)
http://64.233.161.104/search?q=cache:aXcgt-ZGFD8J:www.fedcan.ca/francais/policyandadvocacy/breakfastonthehill/breakfast-wto.cfm+japanese+transplants+reasons+because+auto+OR+cars+OR+automobiles&hl=en
Supplemental Search Strategy:
I used various Google searches to find more detailed discussions of
the Japanese "transplantation" strategy to counter U.S. protectionist
measures that threatened to undermine importation of Japanese cars to
the U.S.
Here are a few of those searches:
japanese transplants reasons because auto OR cars OR automobiles
://www.google.com/search?q=japanese+transplants+reasons+because+auto+OR+cars+OR+automobiles&num=30&hl=en&lr=&start=30&sa=N
japanese transplants reasons
://www.google.com/search?num=30&hl=en&lr=&q=japanese+transplants+reasons
"jama usa"
://www.google.com/search?num=30&hl=en&lr=&q=%22jama+usa%22
I hope and expect that this additional information is useful to you.
If anything remain unclear, please ask for clarification before rating
the answer.
markj-ga
