The Impact of Foreign Investment on US Industral Relations: The Case of California's Japanese-owned Plants

Abstract

This paper explores Japanese direct investment in the US and its impact on American workers and organized labor. Against the background of an analysis of the causes and consequences of the recent growth in Japanese direct investment, case study materials on Japanese-owned factories in California are presented. The findings show that outside the automobile industry, such factories do not conform to the 'Japanese' model of 'lean production' with extensive worker participation. Instead, when in America, these plants 'do as the Americans'. They hire US-trained managers, use standard US human resource techniques and follow the lead of US manufacturing firms committed to union avoidance. One result is that Japanese direct investment has done little to enhance the competitive position of the US or the living standards of its population; on the contrary, it may contribute to the continuing erosion of both.