The Second Automobile Revolution

Also by Michel FreyssenetONE BEST WAY? TRAJECTORIES AND INDUSTRIAL MODELS OF THE WORLD’SAUTOMOBILE PRODUCERS (co-editor with Andrew Mair, Koichi Shimizu, GiuseppeVolpato)

THE PRODUCTIVE MODELS: The Conditions of Profitability (with Robert Boyer)

GLOBALIZATION OR REGIONALIZATION OF THE AMERICAN AND ASIAN CARINDUSTRY?(co-editor with Koichi Shimizu, Giuseppe Volpato)

GLOBALIZATION OR REGIONALIZATION OF THE EUROPEAN CAR INDUSTRY?(co-editor with Koichi Shimizu, Giuseppe Volpato)

Other GERPISA titlesONE BEST WAY? Trajectories and Industrial Models of the World’s Automobile Produc-ers (Edited by Michel Freyssenet, Andrew Mair, Koichi Shimizu, Giuseppe Volpato)

BETWEEN IMITATION AND INNOVATION: The Transfer and Hybridization ofProductive Models in the International Automobile Industry (Edited by Robert Boyer,Elsie Charron, Ulrich Jürgens, Steven Tolliday)

TEAMWORK IN THE AUTOMOBILE INDUSTRY: Radical Change or Passing Fashion?(Edited by Jean-Pierre Durand, Paul Stewart, Juan-José Castillo)

COPING WITH VARIETY: Product Variety and Production Organization in the WorldAutomobile Industry (Edited by Yannick Lung, Jean-Jacques Chanaron, Takahiro Fujimoto,Daniel Raff )

GLOBAL STRATEGIES AND LOCAL REALITIES: The Auto Industry in Emerging Markets(Edited by John Humphrey, Yveline Lecler, Mario Sergio Salerno)

THE PRODUCTIVE MODELS: The Conditions of Profitability (Robert Boyer and MichelFreyssenet)

GLOBALIZATION OR REGIONALIZATION OF THE AMERICAN AND ASIAN CARINDUSTRY? (Edited by Michel Freyssenet, Koichi Shimizu, Giuseppe Volpato)

GLOBALIZATION OR REGIONALIZATION OF THE EUROPEAN CAR INDUSTRY?(Edited by Michel Freyssenet, Koichi Shimizu, Giuseppe Volpato)

CARS…CARRIERS OF REGIONALISM? (Edited by Jorge Carillo, Yannick Lung, Rob VanTulder)

WORK AND EMPLOYMENT RELATIONS IN THE AUTOMOBILE INDUSTRY (Editedby Elsie Charron, Paul Stewart)

INDUSTRIES AND GLOBALIZATION: The Political Causality of Differences (BernardJullien and Andy Smith)

The Second AutomobileRevolution

Trajectories of the World Carmakersin the 21st Century

Edited by

Michel FreyssenetDepartment of Sociology, National Centre of ScientificResearch (CNRS), Paris

In association with

GERPISARéseau InternationalInternational Network

Groupe d’Étude et de Recherche Permanent sur l’Industrie et les Salariés del’Automobile, Permanent Group for the Study of the Automobile Industry and itsEmployees, École des Hautes Études en Sciences Sociales, Paris, Université d’Évry-Vald’Essonne.

Selection and editorial content © Michel Freyssenet 2009Individual chapters © contributors 2009Foreword © Bernard Jullien 2009

All rights reserved. No reproduction, copy or transmission of thispublication may be made without written permission.

No portion of this publication may be reproduced, copied or transmittedsave with written permission or in accordance with the provisions of theCopyright, Designs and Patents Act 1988, or under the terms of any licencepermitting limited copying issued by the Copyright Licensing Agency,Saffron House, 6-10 Kirby Street, London EC1N 8TS.

Any person who does any unauthorized act in relation to this publicationmay be liable to criminal prosecution and civil claims for damages.

The authors have asserted their rights to be identifiedas the authors of this work in accordance with the Copyright, Designsand Patents Act 1988.

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Contents

List of Tables viiiList of Figures xNotes on the Contributors xiiForeword by Bernard Jullien xviiList of Abbreviations xix

1 Introduction: Ten Years On, What Have We Learnt? 1Michel Freyssenet

2 Wrong Forecasts and Unexpected Changes:the World that Changed the Machine 7Michel Freyssenet

3 Strategies of Internationalisation of AutomobileFirms in the New Century: a New Leap Forward? 38Bruno Jetin

Part I: The Divergent Trajectories of Japanese andKorean Carmakers 67

4 The Uncertainty of Toyota as the New World NumberOne Carmaker 69Koichi Shimizu

5 Nissan: From the Brink of Bankruptcy 95Merieke Stevens and Takahiro Fujimoto

6 Honda: Serendipity or Strategy from 1997–2007? 112Denise J. Luethge and Philippe Byosière

7 The Rebirth of Mazda Under Ford’s Shadow 129Daniel Arturo Heller

8 Hyundai: Is it Possible to Realise the Dream ofBecoming a Top Five Global Automaker by 2010? 141Myeong-Kee Chung

Part II: The Resistible Decline of the ‘Big Three’? 163

9 General Motors in an Age of Corporate Restructuring 165Richard Senter, Jr. and Walter McManus

v

vi Contents

10 Ford, 1993–2007: Losing its Way? 185Glenn Mercer

11 Can Chrysler Survive its Reinvention? 206Bruce Belzowski

Part III: The Resistance of Leading European Carmakers 223

12 The Final Chapter of the ‘VW Model’? TheVW Trajectory, 1995–2005 225Ulrich Jürgens

13 PSA: the Difficulties of a ‘Volume and Diversity’Profit Strategy 246Michel Freyssenet

14 Renault, 1992–2007: Globalisation andStrategic Uncertainties 267Michel Freyssenet

15 Fiat Group Automobiles: an Arabian Phoenix in theInternational Auto Industry 287Giuseppe Volpato

16 From the Marriage in Heaven to the Divorce onEarth: the DaimlerChrysler Trajectory sincethe Merger 309Holm-Detlev Köhler

17 Driving with Engineers’ Professionalism andFamily Values: the BMW Trajectory froma Regional Carmaker to a Global Premium Player 332Ludger Pries

18 A Break from the Past: Volvo and its Malcontents 353Matthias Holweg and Frits K. Pil

19 Production Counterfeits and Policy Collisions:the Rover Trajectory – a Salutary Tale 366Dan Coffey

Part IV: Newcomers and Global Suppliers 381

20 Made in China: Joint Ventures andDomestic Newcomers 383Hua Wang

Contents vii

21 Maruti-Suzuki’s Trajectory: From a National Championto a Japanese-owned Subsidiary 404Florian Becker-Ritterspach

22 Winners and Losers in the Auto Parts Industry:Trajectories Followed by the Main First Tier SuppliersOver the Past Decade 419Vincent Frigant

23 Conclusion: the Second Automobile Revolution –Promises and Uncertainties 443Michel Freyssenet

Appendix: the GERPISA International Network 455Index 459

List of Tables

2.1 Compatibility between firms’ profit strategies andcertain current trends in the automobile industry 32

3.1 Comparison of the degree of internationalisation of automobilefirms, 2000–2005, in % of total, and synthetical index 42

3.2 Geographical breakdown of General Motors and FordAutomobiles net sales and financial revenues, in percentage 44

3.3 Geographical structure of European firms’ net sales,in percentage 46

3.4 Geographical breakdown of Asian firms’ sales and revenues,in percentage 47

4.1 New grade system under the assistant-manager (rank 30)at Toyota from 2000 80

8.1 Hyundai, modularity by model and plant 1458.2 Hyundai’s J.D. Power and Associates IQS ranking 1478.3 Hyundai, modular advantage: reducing the number of jobs 1498.4 Hyundai, work conditions by plant 150

10.1 Ford cumulative net income by operation, 1990–2006 19818.1 Volvo’s product portfolio and platforms, 2007–2012 (projected) 35518.2 Volvo production by car model, 1994–2006 36120.1 Contribution of Chinese firms and FDI to the Chinese

automotive industry by type of products, 2005 38720.2 Ranking of automobile sales in China by

automobile firm and type of vehicle, 2006 38820.3 Volume of production of major Chinese OEMs

producing passenger cars, 2005 38920.4 A summary of Geely’s international cooperation 39520.5 Geely’s productive model: ‘The low-cost, low-price car’ 39922.1 Top thirty worldwide original auto-parts suppliers,

1998 and 2006 42522.2 Carmakers’ main supplier subsidiaries 42722.3 Facilities, production and research sites of

FTSs as of end 2006 (units) 43422.4 Distribution of staff and plants of FTSs between domestic

and nearby peripheral zones (year end 2006; %) 435

Appendix tables

4.1 Toyota, 1970–2006: worldwide production,production in Japan, export, foreign production,total workforce in Japan, gross operating profit,pre-tax profit. Consolidated accounts: 1999–2006 89

viii

List of Tables ix

4.2 Assembly plants of Toyota, outside of Japan 925.1 Nissan, 1990–2006: production by region, exports by region,

sales in Japan, workforce, financial results 1106.1 Vehicles sales, revenue, net income, employees of Honda,

1997–2006 1266.2 Honda Automobile unit sales (in thousands), 1997–2006 1266.3 Honda Automobile unit sales as a percentage of total sales,

1997–2006 1267.1 Mazda, 1995–2006: domestic and overseas production,

exports, employees, sales, debts, cash-flow, profits 1388.1 Hyundai, 1997–2006: domestic and overseas production,

sales, exports, employment, gross sales, operating profit 1609.1 General Motors, 1995–2006: worldwide and NAFTA

production, revenue, net income, ROA, labour 18210.1 Ford, 1990–2006: production (North America and rest of

world), workers, sales, net income, assets 20211.1 Chrysler, 1995–2007: worldwide and NAFTA production,

US market share, revenue, net income, operating profit,worldwide pre-tax profit per vehicle, labour 220

11.2 Initial Quality Index of Chrysler marks, 1996–2007 22112.1 Volkswagen, 1991–2006: domestic and abroad production,

export, domestic and abroad revenue, domestic andabroad workforce, net earnings 243

13.1 PSA, 1976–2007: worldwide production, group workforce,workforce in France, group revenues, group net income 264

14.1 Renault, 1980–2007: worldwide and domestic production,exportation, workforce, turnover, net income andinvestments (group, automobile branch, Franceautomobile branch) 284

15.1 Fiat, 1990–2006: domestic and abroad production,workforce, turnover, net income, investments and R&D(group and Fiat Auto) 305

16.1 Operating profit of DaimlerChrysler, 1998–2006 32816.2 Employees of DaimlerChrysler, 1998–2006 32916.3 Key figures of the new Daimler AG Group, 2005–2007 33017.1 BMW, 1990–2006: sales by makes and region,

investments, operating profit, workforce 35019.1 Rover, 1968–2003: total car production, sales outside UK,

total sales, operating profit, total employees 37621.1 Maruti-Suzuki, 1984–2007: turnover, profit, production,

market share, export, employees 41622.1 Employees of FTSs, 1998–2006 43722.2 Sales of FTSs (group level), 1998–2006 (100 = 1998) 43822.3 Net incomes/sales (%) of FTSs, 1997–2006 43922.4 EBIT/sales (%) of FTSs, 1997–2006 439

List of Figures

3.1 Production share outside the country of origin,1994–1995, 1995–1999, 2000–2005, percentages 48

3.2 Production share outside the region of origin,1996–1999, 2000–2005 and 2006 49

3.3 Geographical breakdown of GM’s net profit, 1953–2007 523.4 Geographical breakdown of GM’s net profit, 1977–2007 533.5 Geographical structure of Ford’s net profit, 1957–2002,

and income before income tax, 2003–2007 543.6 Geographical breakdown of Ford’s net profit, 1975–2002,

and income before income tax, 2003–2007 553.7 Operating income of the Japanese ‘big three’ in Japan 563.8 Operating income of the Japanese ‘big three’ abroad 563.9 Operating income of Japanese ‘five small’ firms in Japan 57

3.10 Operating income of Japanese ‘five small’ firms abroad 583.11 Geographical breakdown of Toyota’s operating profit 593.12 Geographical breakdown of Honda’s operating profit 603.13 Geographical breakdown of Nissan’s operating profit 603.14 Geographical breakdown of Suzuki’s operating profit 613.15 Geographical breakdown of Hyundai’s operating profit 614.1 Production and exports of Toyota, 1960–2007 704.2 Movement of the average production allowance

coefficient, Toyota, 1972–1989 734.3 Production, productivity and labour force of

Toyota, 1985–1992 768.1 Working hours at Hyundai, 2000–2004 1528.2 Strikes and wage increase at Hyundai, 1998–2006 1538.3 Hyundai sales by region, 2003–2005 157

10.1 Ford share price history, 1993 to March 2008 19610.2 Ford Motor Company units sold and financial results,

1990–2006 19912.1 The operating margin of Volkswagen, 1991–2006 23913.1 Operating margin/revenue rate of PSA (Group

and Auto), 1976–2007 24813.2 Worldwide production of Peugeot cars by

model, 1945–2007 25013.3 Worldwide production of Citroën cars, 1945–2007 25114.1 Global production of Renault brand passenger cars,

by model, 1945–2007 26814.2 Financial results of Renault Group, 1976–2007,

gross and net income/turnover ×100 271

List of Figures xi

15.1 Fiat makes’ market share in Italy,2000–2007 300

15.2 Fiat makes’ market share in Western Europe,2000–2007 300

15.3 Fiat Auto financial targets 30216.1 DaimlerChrysler Group profit development,

1998–2006 31516.2 DaimlerChrysler Group unit sales, 1999–2006 31716.3 Module strategy of Mercedes: from car line

specific organisation to cross-modularorganisation 318

17.1 BMW Group world production, employment,sales, net profit, 1990–2006 346

18.1 Productivity of Volvo plants against Europeancompetitors and Ford plants in 2006 359

18.2 Volvo’s quarterly production by country,2000–2006 360

18.3 European stock levels in days of demand 36320.1 Product line-up of Geely, 1998–2006 39122.1 Net income/sales of FTSs (unweighted average

for the sample, 1997–2006) 42922.2 Average income/sales and number of years of

losses of FTSs (over 1997–2006) 43022.3 Net income/sales and R&D expenditures/sales

of FTSs (%; average over 2002–2006) 43223.1 Worldwide automobile production, 1898–2007 44323.2 Worldwide automobile production by continent

and production of certain countries, 1898–2007 446

Notes on the Contributors

Florian Becker-Ritterspach is Assistant Professor at the University ofGroningen, Faculty of Management & Organisation (The Netherlands). Hismain topics are developments in the global automobile industry with aspecific focus on multinationals operating in India; knowledge transfers inmultinationals; the Indian business system and institutional context; andcombining organisation theory and international business perspectives. Arecent article, ‘The Social Constitution of Knowledge Integration in MNEs: aTheoretical Framework’, appeared in the Journal of International Management,12(3) (2006): 358–77.

Bruce M. Belzowski is Associate Director and Assistant Research Scientistat the University of Michigan (Transportation Research Institute, Automo-tive Analysis Division), Ann Arbor, Michigan (USA). He is member of theinternational steering committee of GERPISA. His research topics are global-isation of the automotive industry, manufacturer–supplier–dealer relations,information technology, powertrain strategies, and human resource strate-gies. One of his recent publications is Powertrain Strategies for the 21st Century.

Philippe Byosière is Professor at the Doshisha Business School, DoshishaUniversity, Kyoto (Japan) and Visiting Research Professor at the University ofMichigan, Ann Arbor, Michigan (USA). His research topics are knowledgeand innovation, and global leadership. One of his recent publications is‘Microbursts of Knowledge and Creative Work in Japan’, in D. H. Whittakerand R. E. Cole (eds), Recovering from Success: Management of Technology in Japan(Oxford University Press, 2006), pp. 184–98.

Myeong-Kee Chung is Professor of Economics at the School of ChineseStudies and Economics, Hannam University (Korea). He is currently involvedin research on production systems and labour relations in the Korean auto-mobile industry. A recent publication is ‘The Formation of InternationalProduction and Distribution Networks between Korea & China: a Case ofthe Automobile Parts Industry’, Journal of Labor Studies, 12(2) (2006).

Dan Coffey is Senior Lecturer at Leeds University Business School, Leeds(United Kingdom). His main publication is The Myth of Japanese Efficiency:the World Car Industry in a Globalizing Age (Edward Elgar, 2006).

Michel Freyssenet is Research Director at the Scientific Research NationalCentre (CNRS) in Paris (France). He is co-founder of GERPISA and currentlya member of its International Steering Committee. His main topics are: pro-ductive models, national growth models, world productive recomposition,

xii

Notes on the Contributors xiii

history of work division, and social relationships theory. His main pub-lication in English is The Productive Models: the Conditions of Profitabil-ity (Palgrave Macmillan, 2002) (with R. Boyer). His personal website is:http://freyssenet.com.

Vincent Frigant is Assistant Professor, GREThA, UMR CNRS 5113, Universityof Bordeaux (France). His main topics are: industrial organisation, verticalinter-firm relationships, modular production, the auto industry, and theaerospace industry. His most recent publication in English is: ‘The Inter-nationalisation of the French Aerospace Industry: To What Extent Were the1990s a Break with the Past?’ Competition & Change, 11(3) (2007): 260–84(with C. Carrincazeaux).

Takahiro Fujimoto is Professor, Tokyo University (Japan). He is ExecutiveDirector of the Manufacturing Management Research Centre. His main topicsare: evolution of manufacturing systems and strategic implications of prod-uct architecture. His main publication is: The Evolution of a ManufacturingSystem at Toyota (Oxford University Press, 1999).

Daniel Arturo Heller is Associate Professor, International Graduate Schoolof Social Sciences, Yokohama National University (Japan). His main topicsare inter-organisational learning and strategic alliances. One of his recentpublications is: ‘The Long-Term Value of M&A Activity to Enhance LearningOrganizations’, International Journal of Automotive Technology and Manage-ment, 6(2) (2006): 157–76 (with G. Mercer and T. Fujimoto).

Matthias Holweg is a Senior Lecturer in Operations Management and theDirector of the Centre for Competitiveness and Innovation at the JudgeBusiness School, University of Cambridge, UK. He is principal investigatoron several research projects, including at MIT’s International Motor VehicleProgram (IMVP), where his research focuses on the dynamics of competi-tion and patterns of evolution of the global automotive industry. He is theco-author, with Frits Pil, of The Second Century: Reconnecting Customer andValue Chain through Build-to-Order (MIT Press, 2004).

Bruno Jetin is Assistant Professor of Economics at the University of ParisNorth (France), where he works at the Centre for Economics of Paris North(CEPN). He is a member of the GERPISA International Steering Committee.His main publication on the automobile industry in English is: ‘Inter-nationalization of American and Asian Automobile Firms’, in M. Freyssenet,K. Shimizu and G. Volpato (eds), Globalization or Regionalization of theAmerican and Asian Car Industry? (Palgrave Macmillan, 2003).

Bernard Jullien is a Professor at the University of Bordeaux (UniversitéMontesquieu-Bordeaux IV). He is interested in technological and regulatorychanges that impact on industrial organisation. He has published numerous

xiv Notes on the Contributors

articles concerning distribution and utilisation systems in the automobileindustry. His work with the political scientist Andy Smith is summarised inB. Jullien and A. Smith, Industries and Globalization: the Political Causality ofDifferences (Palgrave Macmillan, 2008).

Ulrich Jürgens is Leader of the WPA and Adjunct Professor at the Free Uni-versity of Berlin (Germany). His research focuses on innovation processes,organisational and industry change, and social sustainability of work froman international comparative perspective. He took part in the first MIT pro-gramme on the ‘Future of the Automobile’ and is member of the InternationalSteering Committee of GERPISA. His main recent publication is: Arbeiten amAuto der Zukunft. Produktinnovationen und Perspektiven der Beschäftigten (Work-ing on the Car of the Future: Product Innovations and Perspectives for theEmployees) (Sigma, 2005) (co-authored with Heinz-Rudolf Meißner).

Holm-Detlev Köhler is Professor of Sociology, University of Oviedo (Spain).His main research interests are: industrial relations, internationalisation offirms and local and regional development. One of his recent publicationsis: ‘Consequences of Enlargement for the Old Periphery of Europe: Obser-vations from the Spanish Experience with European Works Councils’ (withSergio González Begega), in P. Leisink, B. Steijn and U. Veersma (eds), Indus-trial Relations in the New Europe (Edward Elgar, 2007), pp. 99–114.

Denise J. Luethge is Professor of Management at Northern KentuckyUniversity in Covington, Kentucky (USA). Her current research is in the areaof knowledge transfer and conversion, network relationships, gender issuesin management and cross-cultural leadership. A recent publication is: ‘AnEmpirical Examination of the Relationship between Knowledge Domains andKnowledge Conversion Processes’, Journal of Knowledge Management, 12(2)(2008): 67–78.

Walter S. McManus is Research Scientist and Director of the AutomotiveAnalysis Division (formerly known as OSAT) at the University of MichiganTransportation Research Institute. His research focuses on forecasting for theautomotive industry, new automotive technologies and their effects on theenvironment, and the impact of government regulations on the automotiveindustry. A recent article is: ‘The Link between Gasoline Prices and VehicleSales’, Journal of theNational Association for Business Economics, 2007 (January).

Glenn Mercer is President of GM Automotive Consulting LLC (USA). Hismain activities are: private equity advisory in automotive, equity research inautomotives, and teaching in automotive topics (e.g. Case Western, IMD).He was formerly a McKinsey & Company Consultant and President of Auto-motive Analysts. He has written many articles in periodical and refereedjournals.

Notes on the Contributors xv

Frits Pil is Associate Professor at the Katz Graduate School of Business,and Research Scientist at the Learning Research and Development Center,University of Pittsburgh, USA. He is also honorary Senior Research Asso-ciate at the Judge Business School (University of Cambridge, UK). He is theco-author, with Matthias Holweg, of The Second Century: Reconnecting Cus-tomer and Value Chain through Build-to-Order (MIT Press, 2004).

Ludger Pries is Professor Dr, Department of Social Science, Ruhr-UniversitätBochum (Germany) and Chair on Sociology of Organisations and Participa-tion Studies (SOAPS). His research fields are: comparative sociology of work,organisations and migration. One of his recent automobile-related publica-tions is: ‘Cost Competition or Innovation Competition? Lessons from theCase of the BMW Plant Location in Leipzig, Germany’, Transfer (Brussels),12(1) (2006): 11–29.

Richard Senter, Jr. is Visiting Scholar at the University of Michigan Trans-portation Research Institute and an Emeritus Professor at Central MichiganUniversity. His research interests include the sociology of organisations andthe sociology of work and occupations. His most recent articles include:‘Organizing Supply Chains for Automotive Transplants in the United States’(with Michael S. Flynn), Michigan Academician, 37 (2007): 93–115.

Koichi Shimizu is Professor of Economics at Okayama University (Japan)and member of GERPISA’s International Steering Committee. His main topicis presently the study of the French 35-hours law and its application to car-makers. His main publication is: Le Toyotisme (Repère/Éditions La Découverte,1999).

Merieke Stevens is PhD Candidate, Judge Business School, CambridgeUniversity (United Kingdom). Her main topics are supply chain manage-ment and changes in dyadic relations from a systems perspective. A recentpublication is: ‘Foreign Influences on the Japanese Automobile Industry’, inR. Rasiah, Y. Sadoi and R. Busser (eds), Multinationals, Technology and Local-ization: Automotive and Electronics Firms in Asia (Routledge, 2007).

Giuseppe Volpato is Full Professor of Management and Business Strategyat the Faculty of Economics of Ca’ Foscari University of Venice (Italy). Heis Research Fellow of the IMVP (International Motor Vehicle Programme),member of the International Steering Commitee of GERPISA, and SeniorAdviser for the ICDP (International Car Distribution Programme). His lastbook is: Fiat Group Automobiles (Il Mulino, 2008).

Hua Wang is Assistant Professor of Managerial Economics and InnovationManagement at Euromed Marseille, a management school in France. Heis French director of the China Euro Mediterranean Centre for Diversity

xvi Notes on the Contributors

(CEMCD). His research interests centre on foreign direct investment, tran-sitional economies, innovation in product architecture, and the automotiveindustry in China. A recent publication is: ‘The Evolution of Strategy onForeign Direct Investment: Case Study of Volkswagen in China’, in HaixiongQiu (ed.), Regional Innovation and Firm Development (Economic Science Press,2007), pp. 459–73.

Foreword

At its Fifteenth International Colloquium in June 2006 in Paris, GERPISAlaunched its fifth international research programme for four years. Named‘Sustainable Development and Automobile Industry’, this programmefocuses on the question of trade-offs and synergies between the differentdimensions of sustainable development (SD) in the automobile industry. Itretains the predominant definition of SD, which considers sustainable devel-opment which guarantees compatibility between economic competitiveness,social responsibility and environment protection. This obligation to integratethe three dimensions of SD and to achieve synergies between them is increas-ingly significant at both the corporate and public policy level. Reference tothis ‘new framework’ has grown in importance over the last decade to thepoint where it is now in the process of being translated into both discourseand practice. In this context of growing operationalisation of the framework,the fifth GERPISA programme is based on the belief that reference to the prin-ciples of SD alone is no longer sufficient and that an analysis of the practicesis now required. In analytical terms, it is therefore important to contrast thenotion of trade-off with the notion of synergy. This is necessary to understandthe discrepancies between practices and discourse, to investigate the diver-sity of interpretations and to develop a realistic understanding of the changesrelated to this new framework. Two main research axes were adopted. Thefirst focuses on the practices of the enterprises, and the second on the designof public policy.The Second Automobile Revolution is the first contribution to the practices

of the enterprises axis. It seems useful and fruitful to begin with the analysisof the automobile firms’ trajectories since the middle of the last decade ofthe twentieth century, continuing the previous studies published in One BestWay? (1998), Globalization or Regionalization of the American and Asian CarIndustry? and in Globalization or Regionalization of the European Car Industry?(2003). It will enable the reader to understand the SD discourses of the auto-mobile firms in relation to the strategies that they pursue to be profitablein the international context before the crisis in 2008. So, the present bookshows that the ‘productive model’ approach developed within GERPISA wasin fact a way to analyse the social and economic sustainability of firms’ strate-gies. But the interest of the present book is more than that. It shows that SDdiscourses and practices must be replaced by a new global process combiningthe challenge of the clean and safe car, the market explosion of the BRICs andthe activism of newcomers (firms and countries). The struggle to impose anew automobile standard started before and continues through the crisis.

xvii

xviii Foreword

Alliances are preparing, with unusual actors. The automobile industry isentering a new era.

Bernard JullienDirector of GERPISA International Network

Professor of Economics, Bordeaux University

List of Abbreviations

AP Asia-PacificBLMC British Leyland Motor CorporationBMW Bayerische FlugzeugWerkeBRIC Brazil, Russia, India, ChinaBTO Build-To-OrderCAFÉ Corporate Average Fuel EconomyCASA Cessation Anticipée d’Activité des Salariés ÂgésCAW Canadian Auto WorkersCBU Completely Built UpCCFA Comité des Constructeurs Français d’Automobiles (French

Chamber of Automobile Builders)CEO Chief Executive OfficerCFTs Cross Functional TeamsCGT Confédération Générale du Travail (France)CKD Completely Knocked DownCNUCED Conférence des Nations Unies sur le

Commerce et le Développement (UNCTAD:United Nations Conference on Trade andDevelopment)

COFACE Compagnie Française d’Assurances pour le CommerceExtérieur

COMECON Council for Mutual Economic Assistance (Eastern bloc)COO Chief Operational OfficerCVCC Compound Vortex Controlled Combustion (Honda engine)DB Daimler-BenzDC DaimlerChryslerDCAC Dongfeng Citroën Automobile CompanyDFIs Direct Foreign InvestmentsDFM Dong Feng MotorsDM DeutschmarkDRG Democatic Republic of GermanyEBIT Earnings Before Interest and TaxesEC European CommunitiesEEC European Employee CommitteeEU European UnionFASA Fabrication de Automobiles, Sociedad AnonimaFAW First Automobile WorksFDI Foreign Direct Investment4WD Four-Wheel DriveFRF French FrancFRG Federal Republic of Germany

xix

xx List of Abbreviations

FTSs First Tier SuppliersFWD Front-Wheel DriveGATT General Agreement on Tariffs and TradeGDR German Democratic RepublicGERPISA Groupe d’Études et de Recherche sur l’Industrie et les Salariés

de l’Automobile (Permanent group for the study of theautomobile industry and its employees)

GM General MotorsGMAC General Motors Acceptance CorporationHAM Honda America Motor CompanyHCCs High Cost CountriesHRM Human Resource ManagementICDP International Car Distribution ProgrammeIG Industriegewerkschaft MetallIMF International Monetary FundIMVP International Motor Vehicle ProgrammeIQS Initial Quality StudyIT Information TechnologyJAMA Japan Automobile Manufacturing AssociationJIT Just-In-TimeJV Joint VentureKD Knocked DownLCCs Low Cost CountriesM&A Mergers and AcquisitionsMercosur Common Market of South American CountriesMIT Massachusetts Institute of TechnologyMITI Ministry of International Trade and IndustryMPVs Multi Purpose VehiclesMVMA Motor Vehicle Manufacturing AssociationNAC Nanjing Automobile CorporationNAFTA North America Free Trade AgreementNICs Newly Industrialised CountriesNPW Nissan Production WayNRP Nissan Revival PlanNUMMI New United Motor ManufacturingOEM Original Equipment ManufacturingOICA Organisation Internationale des Constructeurs

d’AutomobilesPAC Production Allowance CoefficientPAG Premier Automobile Group (brand of Ford)PE Production EfficiencyP&L Profit and LossPLC Public Limited CompanyPSA Peugeot Société Anonyme (holding of

Peugeot-Citroën)QC Quality Control

List of Abbreviations xxi

R&D Research and DevelopmentRNPO Renault–Nissan Purchasing OrganisationROCE Return On Capital EmploymentROS Return On SalesRSM Renault–Samsung MotorsRVs Recreational VehiclesRWD Rear-Wheel DriveSAIC Shanghai Automotive Industry CorporationSKD Semi-Knocked DownSME Small and Medium EnterpriseSOE State Owned EnterpriseSUVs Sport Utility VehiclesTAB Toyota Auto BodyTEMA Toyota Motor Engineering and Manufacturing North AmericaTL Team LeaderTMC Toyota Motor CorporationTNI Transnational IndexTPM Total Production MaintenanceTPS Toyota Production SystemTTM Time-To-MarketTVAL Toyota Verification of Assembly LineUAW United Automobile WorkersUETs Unités Élémentaires de TravailUNCTAD United Nations Conference on Trade and DevelopmentUPH Unit Per HourUTE Elementary Technology UnitsUVs Utility VehiclesVE Value EngineeringVEBA Voluntary Employees’ Beneficiary AssociationVLE Vehicle Line ExecutiveVPCs Vehicle Programme CentresVRS Voluntary Retirement SchemeVTEC Variable Valve Timing and Lift Technology (Honda engine)VW VolkswagenWEC World Employee CommitteeWTO World Trade Organisation