US MNC Subsidiaries in the UK: Characteristics and Strategic Role

Abstract

After the minor unpleasantries in the last part of the eighteenth century, the diplomatic and political relationship between the United States and the United Kingdom has improved quite dramatically, more slowly in the nineteenth century while the UK was still a great power, more rapidly in the twentieth as the US has gradually emerged as the world’s only superpower. In the last 80 years they have been firm allies in two world wars, they have a long record of mutual support in the United Nations, they are key founder members and critical operational entities within NATO, and — particularly since 1979 — the UK government has willingly adopted the role as America’s staunchest ally in world affairs. Much of this may be explained by enlightened self-interest on both sides, but common language, cultural heritage and values have also played a part. Inevitably, a powerful commercial relationship has resulted between the US and the UK. America has long been the British businessman’s prime target for exports, whilst the US has always been a principal source target of foreign direct investment (FDI) in the UK economy. Thus, the ‘special relationship’ between the two states seems well-established in many spheres of activity, and the purpose of this chapter is to evaluate the last-mentioned aspect, the strategic role and characteristics of manufacturing subsidiaries of US-owned multinational corporations (MNCs) located in the UK.