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Japanese automakers and the NAFTA environment: global context.

Abstract Japanese automakers have become an integral part of the North American economy, with total investment approaching $20 billion, direct employment exceeding 40,000 and 3 million vehicles being built annually. The investment and productive capacity can be considered a function of globalization trends and/or deliberate policy initiatives by governments and firms. This paper briefly introduces the global context for a set of papers that explore how the Japanese automakers responded to the opportunities and challenges posed by the North American market. It outlines the growth of the global automobile industry and periods of foreign direct investment (FDI) by European, American and Japanese firms. The distribution of Japanese investment is shown to vary during the 1990s as production capacity is increased in each major continental market. The Japanese investment in North America is shown to have created new capacity equal to the entire Canadian automobile industry, the fifth largest in the world. New equity linkages are established among major Japanese, American and European automobile producers as joint ventures are formed or significant equity interests established. The global context is set for more detailed consideration of the policies, supply chain, production systems and environmental initiatives adopted by the Japanese automotive firms. Avec des investissements de pres de 20 milliards de dollars, 40 000 emplois directs et la construction de 3 millions de vehicules annuellement, les fabricants d'automobiles japonais font maintenant partie integrante de l'economie nordamericaine. On estime que cette capacite d'investir et de produire peut decouler de la mondialisation ou de mesures deliberees de la part des gouvemements et des entreprises. Cet article presente brievement le contexte global d'une serie d'articles qui explorent la maniere dont les fabricants d'automobiles japonais ont reagi aux occasions d'affaires et aux defis poses par le marche nord-americain. Il presente brievement la croissance de l'industrie mondiale de l'automobile et les periodes d'investissements directs etrangers (IDE) par des entreprises europeennes, americaines et japonaises. Il demontre comment la distribution des investissements japonais au varie au cours des annees 90, la capacite de production augmentant dans tous les principaux marches du continent. Les investissements japonais en Amerique du Nord ont demontre une nouvelle capacite equivalant a rensemble de l'industrie automobile canadienne, qui est la cinquieme plus grande au monde. De nouvelles associations avec apport de capital sont etablies entre les plus importants fabricants d'automobiles japonais, ambricains et europeens, tandis que des coentreprises sont formees et des titres participatifs etablis. Le contexte general est presente pour passer a de l'information plus precise sur les orientations, les chaines d'approvisionnement, les systemes de production et les initiatives environnementales adoptees par les constructeurs automobiles japonais. Key words: Japanese automobile manufacturers, foreign direct investment, transplants, North America, globalization Introduction Japanese automakers have become an integral part of the North American economy, with total investment approaching $20 billion, direct employment exceeding 40,000 (total employment exceeds 300,000 jobs when distributors are included) and 3 million vehicles being built annually (JAMA 2000). This investment and production can be considered an outcome of the trade disputes and resulting policy positions taken by governments in the United States and Japan. For example, the Voluntary Export Restraints (VER) program that restricted Japanese automobile exports to the United States during the 1981-94 period and the 1992 introduction of the North American Free Trade Agreement (NAFTA) are key trade policy initiatives. However, investment and trade decisions are made by individual firms rather than by government. An investigation is required to assess the connection between the actions of firms as they prepare to compete in the markets of the 21st century and the attributes of the socio-economic environment they work in. While the Japan-United States relationship is of central importance to automotive investment and trade decisions, Canada is also an important player, with the fifth largest automobile industry in the world and strong relationships to both the United States and Japan (Industry Canada 2001a). The implementation of NAFTA expanded the US-Canada automobile industry, already closely integrated under the Auto Pact since the 1960s (Holmes 1992), to a continental scale with the formal inclusion of Mexico. This inclusion of a developing country along with two industrialized countries in a trade partnership creates a unique combination that differs from the European model of larger trade units. The three North American jurisdictions also offer an opportunity to explore whether a common strategy is adopted in each country by Japanese firms or if differences are found in the way firms adapt to their host socio-economic environment. Japanese automobile firms have a major impact on their environment (Freund and Martin 1993). Conversely, they are also shaped by their environment. The term environment is used in many different ways in the literature, and this theme issue of Environments seeks to clarify some of the ways the broad socio-economic environment (including the formal regulatory regimes of government and the informal cultural norms of society) shapes firms through their adaptation strategies, as well as the way firms shape both their socio-economic environment and the bio-physical environment. Japanese automobile manufacturers have identified environmental issues as a priority area for action (JAT 1998a). The development of less environmentally-damaging technologies, the adoption of environmental management systems and the implementation of recycling programs are examples of ways to reduce the bio-physical impacts of the automobile industry (JAT 1998b, 1998c, 1998d). However, a broader environmental view is required to recognize equally important socio-economic factors such as labour relations, inter-firm supply networks and government policies. Indeed, broad policy initiatives such as NAFTA are significant not only for their potential impact on firm location decisions, but also as a symbol of the general trends toward integration and harmonization of investment, labour and environmental policies across countries. This theme issue will seek to clarify some of the conflicting views expressed about Japanese-owned automobile assembly plants in North America, commonly called `transplants'. Some authors have depicted Japanese automobile firms as saviours of the environment, with advanced technology and continuous improvements focused on reducing both inputs (through increased efficiency) and emissions (of particulates, volatile organic compounds, greenhouse gases, etc.) (Bleviss 1990; Parker 1996; Parker 2001). Others have depicted Japanese firms as responding to the crowded and increasingly stringent conditions in Japan by seeking overseas production locations where environmental regulations are more relaxed. Another debate is whether Japanese investment in automobile plants is a sign of globalization, where uniform corporate practices are transferred to various jurisdictions around the world, or whether it represents the local adaptation of firms to variations in the socio-economic environment of their host countries. These debates will be explored more fully in the papers in this theme issue, but are best introduced with a brief review of the literature and an overview of the investments that have stimulated the debates. Global integration vs. local adaptation This paper takes as its point of departure the recent debate over increased global economic integration and its implied convergence in corporate business practice, with an associated withering of national differences. In the early 1990s, the view which prevailed was not only that the nation state was becoming increasingly irrelevant as a macro-economic institution, but that the national origin of transnational firms had little influence on corporate strategy or behaviour (Ohmae 1990; Reich 1990, 1992). More recently however, a counter view has emerged which argues that despite the relative mobility of transnationals, they not only continue to display characteristics of their national origin, but indeed derive considerable competitive advantage from being `embedded' in the home nation (Gertler 1997; Mair 1997). As Fujita and Hill (1995) argue, Japanese transnationals have moved from traditional `screw driver assembly' branch plants to recreate the competitive advantages of their national base in new host locations by developing dense subcontracting and other networks. Many researchers have emphasized the importance of the Japanese domestic system of industrial organization for conferring important long-run competitive advantages to Japanese corporations (Florida and Kenney 1991; Kester 1996; Fuijita and Hill 1995). Kester (1996) for example, argues that Japanese corporate governance emphasizes the reduction in transaction costs with an emphasis on long-term stable commercial relationships. By contrast, the Anglo-American system separates ownership from control and relies on more formal, legal mechanisms to order commercial relations, with the result that there is greater focus on higher short-run profits. Critical components of Japanese corporate structure are horizontal keiretsu (inter-connected systems of banks, industrial firms and trading companies) and vertical keiretsu (dense collaborative subcontracting networks) that have allowed risk minimization and greater flexibility. In the case of North America, researchers such as Florida and Kenney (1991) and Holmes (1996) argued strongly that a successful and nearly complete transfer of Japanese production, buyer-supplier practices and teamwork has occurred. Certainly it is the case that Japanese producers have been able to transfer many of their domestic supply systems to North America, such as a heavier reliance on suppliers through longer-term contracts for initial design and development of components and sub-assemblies and their delivery via JIT (just-in-time) systems (Fujita and Hill 1995; Kester 1996). However, other studies give a more qualified assessment of the transfer of these practices. Sadler (1994) and Mair (1997) for example, have underlined the different strategies by Japanese automakers when they have established plants in Western Europe and North America. This study extends previous studies by systematically interviewing senior managers at Japanese-owned automobile facilities in Japan, the United States, Canada and Mexico to compare their operations, policies and perceptions. Methodology The results presented in this theme issue are part of an international joint research project entitled `Socio-economic Environment for Japanese Auto-makers in NAFTA'. It was sponsored by Monbusho (The Ministry of Education, The Government of Japan) as one of the Kokusai Gakujutsu Kenkyu: Gakujutsu Chosa (Monbusho International Scientific Research Program: Field Research Projects) for 1997-99 (Research Project number 09041074). In the North American part of the study, interviews were held with representatives from the following firms in August 1997: New United Motor Manufacturing, Inc. (NUMMI), Freemont, California; Nissan Mexicana S.A. de C.V., Cuernavaca, Mexico; Atsugi Mexicana, S.A. de C.V., Choluca, Mexico; CIMA S.A. de C.V. / Lear Corporation, Toluca, Mexico; Toyota Motor Manufacturing Canada, Cambridge, Canada; Honda of Canada Manufacturing, Alliston, Canada; Honda of America Manufacturing, Marysville, Ohio, USA; Kantus Corporation, Lewisburg, Tennessee, USA; Subaru-Isuzu Automotive, Inc. Lafayette, Indiana, USA; Mitsubishi Motor Manufacturing of America, Bloomington, USA; and Eagle Wings Industries, Inc. Rantoul, USA. In the Japanese part of the study, interviews were held with representatives from the following Japanese automotive firms in December 1998: Toyota Motor Corporation, Tsutsumi Plant, Toyota City; Mitsubishi Motors Corporation, Okazaki Plant; Honda Motor Co., Suzuka Plant, Mie Prefecture; Nissan Motors Manufacturing Co. Ltd., Kyushu Plant; Denso Corporation, Takatana Plant; Tachiesu Co., Ltd., Aichi Plant; Toyota Motor Corporation, Headquarters, Tokyo; Mitsubishi Motors Corporation, Headquarters, Tokyo; Honda Motor Co., Headquarters, Tokyo and Subaru-Isuzu Automotive Inc., Headquarters, Tokyo. The positions held by respondents included: president, vice president administration, corporate secretary, specialist - Japanese support, manager - associate services and senior manager - purchasing department. Topics for discussion included investment strategies, buyer-supplier relations, labour relations, human resource development, responses to national regulatory policies, NAFTA and environmental initiatives. Similar questions were asked to CAMI personnel at an interview in December 1996. Policies were reviewed and opinions recorded to determine the current practices and future plans of these firms. The materials collected and responses gained from these interviews provide the majority of the results reported in these papers. The responses are combined to identify general trends and to maintain confidentiality regarding the details of particular operations. The initial results of the interviews were presented to academic and business audiences for verification and clarification in November 1999 at two venues: the East Asia Business Seminar at Renison College, University of Waterloo and the Global Strategies of the Japanese Automobile Industry Symposium at the Center for International Business Education and Research, San Diego State University. The questions and discussions generated further refinements to the initial analyses and the results form the basis of the papers presented in this theme issue. This introductory paper provides an overview of the study and sets the global context by highlighting the size of the automobile fleet (market size) in the Japanese and North American markets. The rapid growth in automobile markets is illustrated with a brief review of the historic pattern of foreign direct investment (FDI) by major automobile firms and the development of the industry in Japan. It also recognizes the mergers and equity links among major automobile producers. However, the trade, investment and knowledge flows that are reported as attributes of globalization require further investigation in the subsequent papers to determine whether uniformity has been achieved or if national context still matters. A Brief Review of Automotive Foreign Direct Investment Historically, European, American and Japanese automobile firms have each taken turns as investors in overseas production capacity. The growth of the multinational automobile industry began before World War I when the French industry began in the late 1890s and the European manufacturers initiated FDI (Laux 1992). French carmakers such as Renault established distribution operations and small assembly transplants in a limited number of countries such as the United States (Fridenson 1986). In the early 1900s Henry Ford revolutionized the automobile industry by developing a standardized product, the Model T, which was assembled with standardized interchangeable parts and components on a moving conveyer belt. Ford was the first company that was able to enjoy economies of scale from production in large volume. The mass production method eventually lowered production costs dramatically. Ford established branch plants in Canada and in Great Britain, where the culture was very similar to that of the United States (Wilkins 1970: 96-97). The automobile industry in the United States grew rapidly in the 1920s. Alfred P. Sloan of General Motors (GM) undertook large-scale organizational innovation, which led to General Motors replacing Ford as the U.S. market leader by the end of the 1920s. General Motors grew by merger and acquisition both in the United States and in other countries. In 1929, GM acquired Opel, one of the ten largest automobile companies in Germany (Wilkins 1974: 72-5). American car companies continued using the business strategy of opening factories abroad in selected major market areas. The depressed economic conditions and high unemployment following the onset of the Great Depression in 1929 reduced the number of attractive investment opportunities in the world economy. This slump continued through World War II. A recovery in the growth rate of world FDI followed in the 1950s. Large U.S.-owned multinationals (e.g. GM, Ford and Chrysler) became the symbol of international business in the postwar world. Despite rapid growth in total flows of FDI between the 1960s and the 1980s, the relative importance of FDI in the world economy in 1980 was probably still below its importance before World War I (United Nations 1994: 130). At this point a new group of foreign investors in the automotive industry emerged. Development of the Japanese Automobile Industry In the 1980s, Japan became a major source of investment in the international automobile industry. However, to understand this global expansion, one should look at the historical developments that brought the Japanese industry to its current position. Japanese automobile manufacturing began with the formation of Kunimatsu Motor Works in 1909. The early years of the industry were characterized by the formation of a great number of companies, most of which either failed or merged with one another, similar to what happened in the young American industry. However, unlike their American counterparts, the Japanese manufacturers suffered from the lack of a strong demand for automobiles. This resulted in a less than vigorous industry. For example, Japan produced only 1,594 passenger vehicles in 1950 when it was recovering from the effects of World War II. Despite this slow start, by the middle of the 1950s there arose hopes that a strong domestic market would bring the benefits of economies of scale, and with them, the possibility of exports. As post war rebuilding gained momentum, so did the automobile industry. In the 1950s, passenger vehicle production increased nearly fifty-fold to 78,598 units in 1959. Aiding this dramatic growth was the Japanese keiretsu system, resulting in an integrated network of firms and a reliable supply of components for the automobile manufacturers. Also, the government initiated a series of measures to strengthen the domestic automobile market, such as increased road construction. The passage of laws imposing strict automobile inspections discouraged owners from keeping their cars for more than a few years. An added stimulus came in 1960 when the Bank of Japan encouraged the offering of credit to car buyers. These and other factors contributed to making Japan the second largest automobile market in the world behind the United States by the early 1970s (Table 1). Table 1: Motor Vehicle Registrations in Japan and North America 1965 1970 1975 1980 1985 1990 1995 1998 millions of vehicles Japan 6.3 17.6 28.1 37.9 46.1 57.7 66.9 70.8U.S. 90.0 108.0 133.0 189.0 171.0 189.0 200.0 210.0Canada 6.4 8.1 11.0 13.7 14.8 16.6 17.0 18.0Mexico NA 1.8 3.3 5.8 7.5 9.8 11.8 13.9World 152 207 266 355 369 425 468 502 Source: Industry Canada, Automotive and Transportation Branch 2001a The huge expansion in domestic demand and the associated increase in production capacity encouraged firms to promote exports as well. With an increased confidence in their capabilities, Toyota and Nissan ventured into the United States in the late 1950s. The Japanese firms offered a small car that not only provided economy, as the popular VW Beetle offered, but also had a touch of luxury that appealed to the American consumer. The success that Japanese automobiles enjoyed once they became established in the North American market was bolstered by the fuel crises of the 1970s. The consistent reliability of comfort and economy that the Japanese products were perceived as offering created an ever-increasing base of loyal customers. As the number of Japanese cars arriving in North American ports increased, so did the concern of the American automakers and assembly line workers. Action to stem the influx of foreign imports and to protect automotive-related jobs was called for. To stem the increasing trade imbalance, the U.S. began considering tariffs and local content requirements to be imposed on imported autos. Both of these options were rejected by the Reagan Administration because of their contrary nature to the Administration's strong commitment to free trade. Instead, in 1981, the Administration was able to reach an agreement with MITI (Japan's Ministry of International Trade and Industry) to ask the Japanese automobile industry to voluntarily restrict the flow of their automobiles into the American market (see Koshiba and Parker, this volume). Partially in response to increased restrictions on imports, the Japanese began to build assembly plants in North America. Growth in the domestic Japanese market had been followed by growth in exports and then investment in production capacity in North America. In this way, the Japanese automobile firms responded to demand in the world's largest automobile markets. Just three countries, the United States, Japan and Canada, account for over half of all motor vehicles registered worldwide in the late 20th centruy (Table 1). A ten-fold expansion occurred in the global motor vehicle fleet from 50 million in 1950 to 502 million in 1998 (Industry Canada 2001a). However, growth in vehicle sales in mature markets such as the United States, Canada and Japan has slowed with annual performance tied to economic cycles. For example, in Japan, motor vehicle sales declined in 1991-93, rose modestly in 1994-96 and declined again in 1997-99 (JAMA 2000). The buoyant North American market of the late 1990s offset the decline in Japanese domestic sales as firms sought to spread their sales across multiple markets. However, declines in North American sales are also expected and automotive firms are positioning themselves for sales elsewhere in the early 21st century, for example, in emerging markets in Europe and Asia. Automotive Investment and Mergers in the 1990s Global sales are supported with global production capacity as the Japanese firms seek to avoid dependence upon their domestic market through investment in facilities overseas. Table 2 presents the annual investments reported to the Ministry of Treasury (formerly the Ministry of Finance) by the Japanese transport industry (primarily motor vehicles). In the 1980s, North America was the recipient of the largest investments, but in the 1990s the global investment pattern became more diverse with each continent taking its turn as the leading destination for Japanese transport investment. Over the 12 year period, the largest annual share went to North America five times (in 1989, 1990, 1992, 1996 and 1997), to Europe four times (in 1991, 1993, 1999 and 2000) and to Asia twice (in 1995 and 1998). This pattern of global investment in productive capacity was reinforced by a series of mergers and equity investments by major automotive firms. Table 2: Foreign Direct Investment by the JapaneseTransport Industry, 1989-2000 Region N. America Europe Asia Other Total year Billion yen 1989 189 60 19 6 274 1990 84 80 55 55 274 1991 94 98 26 54 271 1992 78 51 22 5 156 1993 34 37 30 9 110 1994 41 47 42 85 214 1995 44 18 82 50 194 1996 256 73 90 18 437 1997 142 53 105 58 357 1998 46 30 102 28 206 1999 61 238 68 167 533 2000 52 207 64 24 347 Notes: reported on ex post facto or prior notice basis, fiscal yearbegins in April, bold indicates region with highest value that year. Source: Japan, Ministry of Treasury 2001 Mergers and joint ventures are combining the resources of major automobile firms to build corporate structures that span continents. Examples include the Daimler-Chrysler merger, Ford's 33.4% share in Mazda acquired in 1996, Renault's 36.8% share in Nissan acquired in 1999, Daimler-Chrysler's 34% share in Mitsubishi acquired in 2000 and GM's share in Isuzu (49%) and Suzuki (10%) (AP 2000; JAMA 2000) (Figure 1). The motivations for the mergers differ according to time and circumstance. In some cases, expertise in the efficient production of compact vehicles was sought by western firms. In other cases, poor financial performance during the prolonged downturn in the Japanese economy of the 1990s signaled a need for new management ideas. Western automobile firms became the source of both equity investment and selected senior managers who were expected to review management structures. In return, the North American and European firms were gaining significant production bases in Japan to serve the Japanese and Asian markets (Ogata 2000). The investment pattern also demonstrated differences between firms such as Toyota and Honda that had gained marketshare during the 1990s (in Japan as well as overseas) and remained independent, with those such as Nissan, Mazda and Mitsubishi that had not performed as well and were being partially acquired. These acquisitions formed part of the trend where emerging giant global automobile firms merged existing national automobile companies instead of investing in new overseas plants and further increasing global production over-capacity. The evidence of increased globalization through investment in global production facilities and corporate mergers, acquisitions and joint ventures has continued to mount. Indeed, some commentators speculate on mergers continuing until there are only about 5 major global automobile manufacturers. However, earlier assessments that the Japanese market could not support 11 automobile manufacturers have had to wait for decades for the expected restructuring to take place. Individual firms have aggressively pursued strategies to survive. The largest Japanese automobile producer, Toyota, has proven particularly capable of responding to changing global conditions. Toyota has a basic ability to turn crises into opportunities ... Its global strategy isn't simply the result of vision: It's also an opportunistic strategy that emerges whenever Toyota responds to the unexpected (Takahiro Fujimoto, University of Tokyo, Professor of Economics, cited in Shuchman 1998). The Japanese automotive industry grew from small scale in the 1960s to exceed the American industry in size by 1980. This change in ranking of the world's largest automobile producers changed again in the 1990s when production in the United States exceeded that of Japan. However, this change in production output was in part the result of Japanese investment in automobile plants in North America equal in size to the entire Canadian automobile industry. Together, the Japanese and North American industries produced over 25 million vehicles per year in the late 1990s (Table 3). The experience and adaptations of Japanese firms establishing their operations in the North American environment will be explored in this theme issue of Environments. Table 3: Motor Vehicle Production in Japan and North America 1965 1970 1975 1980 1985 1990 1995 1999 Japan 1 .9 5.3 6.9 11.0 12.3 13.5 10.2 9.9U.S. 11.1 8.3 9.0 8.0 11.6 9.8 12.0 13.0Canada 0.8 1.2 1.4 1.4 1.9 1.9 2.4 3.1Mexico NA NA NA NA 0.4 0.8 0.9 1.5 Source: Industry Canada, Automotive and Transportation Branch 2001b Conclusion The trends of increased global investment in new production facilities and formation of global corporate partnerships by the Japanese automotive firms are clearly established. However, the conclusion that increased global investment and even increased standardization in regulations, results in global uniformity in corporate operations needs to be examined carefully. Rather than conclude that the investment patterns shown above demonstrate that nationality, or the socio-economic environment in which firms operate, no longer matters, this study turns to a more detailed examination of Japanese automobile firms in North America. The next paper by Rutherford et al. (this volume) entitled "Global, Local, or Hybrid?: Evidence of Adaptation among Japanese Automobile Plants in Japan, the United States and Canada" reveals the importance of local adaptation in Japanese automobile plants. The broader context for the successful introduction of Japanese firms into North America is explored by Koshiba and Parker (this volume) "Open Regionalism, Trade Policy and NAFTA: The Socio-economic Context for Japanese Automotive Investments." In addition to trade policy initiatives such as voluntary export restraints (VER) and the North American Free Trade Agreement (NAFTA), the importance of the new paradigm of `lean production' (as refined by Japanese automakers) and the cultural origins of relations within and among Japanese firms are recognized. The strategies adopted by Japanese automotive firms to successfully navigate the different economic cycles and distinct consumer tastes of major regional economies are explored by Sanford and Olson (this volume) in their paper entitled "Strategic Options for Japanese Automakers Operating in NAFTA." They examine Japanese competitive strategies in North America, and emphasize how during the 1990s, these strategies moved from being primarily production focused (e.g. lean production and JIT) to an emphasis on innovation in marketing and delivering the product to the customer. One of the core strategies of Japanese firms is the creation of innovative supply networks. These networks are explored by Rutherford (this volume) in his paper entitled "Mutual Adaptation: Japanese Automobile Transplants in North America and the Restructuring of Buyer-Supplier Relations." Rutherford contrasts the obligational relations that prevail among Japanese firms with the arm's length relations that prevail among Anglo-American firms to delineate the distinctive manner in which the Japanese firms were able to not simply bring over suppliers from Japan, but to create new relationships where North American suppliers accepted more responsibility for product innovation. Finally, the environmental initiatives taken by Japanese automotive firms are examined by Parker (this volume) in his paper "Environmental Initiatives among Japanese Automakers: New Technology, EMS, Recycling and Lifecycle Approaches." Although the automobile industry remains a source of great environmental damage worldwide, new technologies have been developed and successfully marketed to make the Japanese firms world leaders both in terms of their products and their production processes. Parker explores how Japanese automotive firms have responded to domestic, NAFTA and international regulatory pressures to design and build less environmentally damaging automobiles. This includes goals of 100% recyclability, significantly lower fuel consumption and reduced CO2 emissions via the development of hybrid gas-electric vehicles. Overall, it is recognized that Japanese transplants have made significant adaptations to their production and marketing systems in response to the NAFTA environment. While some researchers such as Florida and Kenney (1991) assert that Japanese automotive investment in North America represents a `triumph of organization over culture', the evidence that we found (reported in the papers of this theme issue of Environments) leads us to concur with Abo (1996) that Japanese producers have also adapted their practices to the North American environment leading to the development of a `hybrid' industrial system. However, while Abo's data pre-dates NAFTA and stresses broad trading bloc or continental factors, we argue for a more complex process of mutual adaptation in which national differences are still very influential. Our explanation is that when complex systems such as buyer-supplier relations and labour relations are transferred to a new context they often depend on `soft' factors such as prevailing national institutions and cultural norms. We also fully recognize that there are differences among the strategies adopted by Japanese firms. However, we argue that they remain collectively distinct from their North American counterparts. The end result is a North American automobile industry that includes Japanese automakers. These firms have been influenced by the broad national socio-economic environment as well as by trade policies such as NAFTA or environmental policies such as air emission standards in California. 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Author:T. Koshiba, and others
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Date:Jan 1, 2001
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