Tom Donnelly

Supplier parks in the automotive industry

The auto industry has undergone substantial structural and other change in the last 20 years. The influences of globalisation, implementation of lean production and the development of modularisation have had profound influences on the relationships between automobile assemblers (OEMs) and their suppliers, in particular those in the first tier. In the age of e‐business and global outsourcing the development of supplier parks could be argued to be surprising. This paper briefly outlines the development of supplier parks as part of the auto industry supply chain and offers some potential theoretical perspectives on why they have emerged.

Are there market limits to modularisation

Modularisation is the predominant approach used in the modern automotive industry to widen the variety of products available in the market place at affordable prices. Modularisation has taken place in the context of increased global competition in the industry, a trend towards greater outsourcing of both module manufacture and development and greater volatility in consumer demand at the model level. Modularisation is both a strategy and a process. Like all shifts in the organisation of production in the industry there are potential limits to what can be achieved through modularisation. This paper explores some the extent to which the market itself may impose limitations on what can be achieved via modularisation.

Restructuring the automotive industry in the English West Midlands

This paper investigates the changes taking places in the automotive industry in the English West Midlands. For over a century this region has been the heartland of car production in the UK, but over recent decades the volume side of the trade has been in serious decline, leading to increasing dependence on the luxury side of the industry. The implications are that the supply side of the industry will be forced to move into new technologies if the auto cluster is to prosper in future. Finally, the paper looks at the attempts made by bodies such as Advantage West Midlands and the industry itself to effect change.

The European automobile industry: escape from parochialism

Observes that, until recently, the European car industry has focused its efforts almost entirely within the boundaries of its domestic markets. Since the rise of the Japanese car industry and those of emerging economies such as Malaysia and Korea, the Europeans have found that the levels of competition in the world market have intensified. Examines how European car companies have responded to global challenges both at home and abroad. The main responses of the European producers in the home market, albeit late, have been to reduce costs, shed labour, rationalise plants, raise productivity and improve their relationships with suppliers in attempts to boost efficiency. Outside Europe, in the search for global status, they have sought new markets, entered into joint ventures and opened new plants worldwide. Nonetheless, Europe remains the weakest of the triad car producers.

Industrial Restructuring and the State: the Case of MG Rover

MG Rover was the final name by which the British Leyland Motor Corporation (BLMC) became known. BLMC had been formed in 1968 upon a government initiative to strengthen the UKs automotive industry so that it could compete effectively with the American and other European multinationals in international markets. Within six years BLMC teetered on bankruptcy and was all but nationalised. This paper traces the ongoing secular decline of BLMC through its various stages down to the eventual closure of the Longbridge plant in 2005. In particular it will look at key themes such as investment, output, product development and market failure. In particular, there will be examination of the role of the various owners of Rover such as British Aerospace, BMW and the Phoenix Consortium as well as the part played by the UK government in the companys eventual downfall.

Urban and Regional High Technologies: The Case of Oulu

This paper investigates the reasons behind what has been termed the ‘Oulu Phenomenon‘ in Northern Finland. Over the past two to three decades the city of Oulu has transformed its economy from dependency on timber, paper and pulp industries into one based on High Technology, notably, telecommunications, biotechnology, electronics, multimedia and environmental technologies. In particular the paper will explore the role played by the national government via regional policy, higher education and the subsequent interaction between these, the local authorities and entrepreneurs

Renault‐Nissan: a marriage of necessity?

Purpose – To examine the reasons why Renault of France and Nissan of Japan entered into a merger. Over the past decade the automotive industry has been subject to a spate of merges and take‐overs which not only brought about a considerable degree of consolidation, which made it increasingly difficult for smaller concerns such as Renault and Nissan to compete globally. This paper examines the reasons why these two merged and demonstrates how success was achieved in the short term.Design/methodology/approach – The main methodology applied was that of conventional pre‐ and post‐merger analysis models, but with a particular focus on that of Testa and Morosini which has been applied to other industries, but not so far to the automotive.Findings – The conclusions drawn from the papers were that careful pre‐merger approaches had been made by both parties to each other and that Nissan had little alternative but to see Renault as a rescuer. Also illustrated is the role played by strong leadership in the process an...

Capturing the economic benefits of a transformative shift to low carbon automobility

The policy framework to encourage the manufacture and adoption of low carbon vehicles presents new opportunities for traditional automotive manufacturing regions. This article examines such opportunities in the West Midlands region of the UK, where the automotive ‘cluster’ remains significant and where failure to adapt to changing markets could have adverse economic and social consequences. Our analysis argues that the region needs to capitalise on existing strengths at the upper end of the technology spectrum and establish itself as a leader in the area of low carbon vehicle technologies. In doing so, it is recognised that a coordinated and holistic approach is required, involving multiple layers of government, in order to support industry in the development and application of new technologies, and critically, to overcome barriers to consumer acceptance and adoption. The article finds that, whilst the West Midlands experience to date demonstrates the effectiveness of a joined-up and holistic approach to policy delivery, much more attention needs to be paid to a demand push if potential economic benefits are to be maximised. As a cautionary point, the article also questions the sustainability of the partnership approach to policy delivery given the abolition of regional government in the UK.

The West Midlands automotive industry: the road downhill

Abstract This article examines how the structure of the automotive industry in the West Midlands has changed since the 1970s. In the early 1970s the region accounted for about 60% of total car production in the UK. By 2008, this had dwindled to 18%. The discussion here will focus particularly on the most likely reasons for the decline in volume production and the area’s increasing reliance on relatively small scale luxury car production. The automotive industry was caught up in the general de-industrialisation that took place in the region since the mid-1960s prior to the economic crisis of the early 1980s, as well as suffering from the effects of increasing globalisation in the car industry itself. By 2008 the context for the sector had become the global financial crisis. Due to a lack of economies of scale and investment domestic firms such as British Leyland (BL) and Rootes became increasingly unable to compete in the market place despite restructuring and government intervention. Similarly, foreign direct investment (FDI) by firms such as Chrysler, Peugeot, BMW and Ford through a series of takeovers failed to restore prosperity and eventually all of them withdrew from the region. The outcomes have led to factory closures and a hollowing out of both the assembly and component sides of the industry, leaving the region heavily dependent on Jaguar and Land Rover (JLR) which was acquired in 2008 by the Indian conglomerate, Tata. This article assesses the reasons for the decline of the automotive sector in the West Midlands region by contextualising its growth and decline against that of the UK auto sector as a whole. Considerable emphasis is placed on the fates of a number of key firms in the region – the British Leyland Motor Corporation (BLMC), MG Rover, Rootes and Jaguar – with explanations offered for their respective failures.

The DaimlerChrysler Mitsubishi merger: a study in failure

This article focuses on the DaimlerChrysler/Mitsubishi merger of 2000 and discusses the failed attempt by a European-American multinational firm to break into the Asian market, a region where previously it had an extremely limited presence. Having completed its 1998 merger with the US-based Chrysler Corporation, the newly formed DaimlerChrysler group turned its attention to the Asian market in 2000 in an attempt to become a truly global competitor. Partnership with the Japanese motor firm offered the possibility of economies of scale and scope, in particular in the sub-compact car market to enable DaimlerChrysler to become a full-scale producer. However, within four years the dream of large scale trans-national production was over. The failure to integrate with the Japanese company and the subsequent decision to cut Mitsubishi Motors adrift led to the dismissal of the DaimlerChrysler CEO Jurgen Schrempp. This paper will focus on outlining the motives behind the merger, why it failed, and why the Board of Daimler-Benz decided to end the relationship and extricate itself from Mitsubishis problems.