Geography Reference
In-Depth Information
to develop organizational structures which would facilitate the incoming
technological paradigm.
The 1980s witnessed major inflows of Asian FDI, and in particular
Japanese FDI, into the US and European economies, as these new immi-
grant MNEs sought increasing footholds in the world's largest markets.
Many of the new production models therefore became increasingly
embedded in both US and European manufacturing via the growing
number of Japanese subsidiaries locating within the US and Europe
during this period.
3
The geographical expansion of Japanese FDI was
the outcome of complex interactions between economic, technological
and political forces both internal to Japan itself and within the broader
external global environment. The organizational structure of Japanese
FDI showed substantial differences according to the broad geographi-
cal area targeted (Dicken 1988). Of all sectors, the firms which had the
biggest transformative impact were the Japanese automobile makers,
which quite literally brought the industry into a second era of transfor-
mation, following on from the first mass production transformations
of the early twentieth century. This second era of transformation was
led by radical and architectural technological changes such as the use of
shared platforms between different vehicle models, the modularization
of components, the development of component systems, all based upon
the increasing use of electronics (Dicken 1998, 2007; Delbridge and Lowe
1998). In the automotive industry initially Japanese manufacturing invest-
ment abroad was initially heavily concentrated in neighbouring countries
in East and South East Asia, where a composite intra-firm division of
labour was developed. Since the end of the 1980s, Japanese major car
manufacturers - Toyota, Nissan and Honda - were increasingly targeting
North America and Europe following market-seeking strategies primarily
in response to trading frictions (Dicken 1988). Outside of the US, it was
the UK which became the major host location for Japanese manufactur-
ing investment, and consequently the major area of implementation of
these new production systems (Trevor and Christie 1988). As in the US,
labour relations in the UK manufacturing industry operated under much
more flexible labour laws than in other European countries. The new
deregulated industrial relations environment allowed for both relatively
lower manufacturing wages and a greater ease of hiring and firing. More
importantly for the Japanese MNEs, however, was the fact that the flex-
ible laws and the deregulated environment for labour relations facilitated
the implementation of JIT production techniques based on firm-level, or
rather establishment-level, labour negotiations, as was typical in Japan
itself. As well as Japan, this new labour environment also became increas-
ingly attractive for immigrant FDI from manufacturing firms from other
