'The flea on the tail of the dog': power in global production networks and the restructuring of Canadian automotive clusters

Abstract

Recently, studies of industrial clusters and global production networks (GPNs) between large transnational corporations (TNCs) and smaller firms have focused on how power differentials shape, and sometimes undermine cluster innovation and governance. Such studies raise issues of how to conceptualize TNCs power within GPNs and some economic geographers have adopted approaches that seek to integrate the post-structural insights of actor network theory (ANT) with heterodox and Marxian value theory. Based on a case study of the Canadian automotive industry, we engage in a sympathetic critique of this perspective via a realist position that distinguishes between structural and actual power. We argue that differences in structural position derived from financial size matter, although do not necessarily determine actor network relations. Yet, TNC Original Equipment Manufacturers (OEMs) have a tendential actual or ‘power over’ smaller automotive suppliers due to superior financial resources, their strategic position within GPNs and especially their relationship with state accumulation projects designed to capture those segments of GPNs, which offer the greatest potential for the creation and enhancement of value. We show that such projects were critical to the development of the Canadian automotive industry and the Kitchener and Windsor, Ontario automotive clusters. Although large firms were generally favoured by such policies, suppliers and SMEs were able to partially offset power asymmetries through innovation, often by accessing informal local networks in clusters. More recently, however, smaller component firms and the coherence of these clusters are being threatened by neo-liberal Schumpterian Competition State policies that privilege OEMs and larger firms and by the restructuring of automotive GPNs in response to overcapacity and falling profits.