Opening Markets and Industrial Restructuring

Abstract

Industries are responding to the challenge of increasing globalization of production by restructuring into leaner and more flexible production processes in order to cut costs and gain global competitiveness. The auto industry, which is one of the most globally oriented industries has been especially involved in this movement. Since 1990 the market environment of the Argentine auto industry has changed rapidly from that of a closed, highly protected environment to an open one that includes economic integration with the world’s 9th largest auto producer, Brazil. The need to be globally competitive has forced firms to adopt Just-in-Time/Total-Quality-Control (JIT/TQC) systems of production. This paper presents micro, plant level research on the response of Argentine autopart manufacturers to this radical change in its market environment. The analysis is based on a case study of 10 well-established autopart firms which were interviewed in depth to get some idea of the measures being taken by them to survive in this new global climate. The extent to which the “world class manufacturing techniques” of JIT/TQC are being adopted in these firms is examined. The survey finds a wide variety of adaptations of these techniques.