Systems of Power and Control in the Japanese and Western Car Industry

Japanisation in the United Kingdom:

Experiences From the Car Industry

This report aims to analyze and compare the systems of power and control in the Japanese and western automobile manufacturing industries. The method was to use a wide range of theory and to support the analysis. The world has become an extremely competitive global economic battle ground. Automobile manufactures from both the east and the west continue to search for opportunities that will allow them to strategically reduce overhead but not affect market share or profitability. Consider that In the 1990's the solution was to literally cut or reduce the labor force and therefore reduce inherent costs of labor. The buzz words of the time were 'they just laid off X amount ... ', or 'they are downsizing ... ' These terms were regulars on the media circuit or on the front page of the morning's business section. These phrases were really attempts to reduce overhead. In the automobile manufacturing sector, labor is at a premium today so the likes of Japanese and Western automobile manufactures can not reduce their labor without either indirectly or directly affecting the both output and quality. To take advantage of their power, the automobile manufactures are simply relocating to new emerging markets in order to get the same labor at reduced cost and to cut ties with expensive vendors and partners.

The Japanese automobile manufactures have reduced their dependence on suppliers in the high rent district. Japanese auto makers have pressured suppliers to improve quality and to provide just-in-time delivery options or those vendors are eliminated as preferred suppliers. Japanese manufactures have raised the level of vendor and supplier communication both digitally and verbally. Computing technology for Honda and Toyota has been directly connected to the majority of their suppliers in all parts of the world and that has increased overall efficiency, productivity and quality. The objective is to find and only work with more economical, stronger and cheaper materials suppliers' at the most cost effective price and time. The Japanese automotive industry as well as the rest of the west like Ford and General Motors has all become seemingly obsessed by the notion of shaping industry fate in a highly technical economy.

Surprisingly, Japanese automakers have been clambering to open new plants in the United States' southern regions. "The relocation of automotive manufacturing is threatening the economic future of East Coast and Midwestern states and creating a whirlwind of investment from Mississippi to South Carolina." (Corbett, 2002) American manufactures have been consistently moving abroad or following suit with the Japanese and moving south to reduce costs associated with labor, unions and delivery in the Unites States northern regions including Canada. Honda, Toyota and Subaru have all recently opened plants in the Unite States south and Ford GM and other big names have invested large sums to produce manufacturing facilities around the world.

The key is again cost. Land for the new facilities is much cheaper and there are other perks such as low utility fixed costs for power. "Tennessee has some of the lowest industrial power rates in the United States, anywhere from 20% to 50% below other states, Grande points out." (Corbett, 2002) These new plants also are completely new so the latest environmentally sound technology is built in from day one. "When plants are up and running, there are fewer environmental issues. Activism is not as prevalent. Industry also is relatively new to the South. So new assembly plants do not have to over-compensate for older factories contributing disproportionately to emission totals." (Corbett, 2002)

The combined benefits of low taxes, rates of utilities and the added bonus of superior access to roads and waterways and the Japanese have discovered that this is a good time to utilize their existing industry power. "Tennessee is within one day's drive of 75% of all United States markets, and its road system is one of the best in the nation. Other southern states are improving infrastructure. Besides 1-65 and 1-75, which are straight shots to the Midwest, highways I20 and 1-35 provide quick access from the South to Mexico's burgeoning auto industry. Meanwhile, Michigan, for example, is a peninsula state with roadways that generally are in bad shape. The East Coast has fewer major parts suppliers. Components coming from the Midwest and the South add significant shipping costs to vehicle programs" (Corbett, 2002)