Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

AUTOMOTIVE REFERENCES LITERATUR COMPANIES GO EAST -
GERMANY AND AUSTRIA
situation (particularly on the labour
market) to force the workers to accept
bad conditions. However, the employees’
behaviour in reaction to these changes
also shows their powerlessness, as they
actually widely accept and adapt to these
new situations.
The relation between OEM and
supplier companies alters exceptionally
regarding bargaining position and power:
Cooperation structures of OEMs (from
buying syndicates up to productioncooperation)
form a powerful counterpart
to the supplier companies.
What are the consequences for contract
manufacturers referring to this? These general
changes hit the contract manufacturers hard
due to the fact that they occupy a “niche” of car
production, being experts for special features,
design, and exceptional functionalities and
notably low volume production. Their special
niche productions could be classified in the
“premium segment”, which is difficult to
combine with growing cost pressure. If we think
of economies of scale, this target is also hardly
to be achieved with low volume production. As
far as the flexibility of employment strategies
is concerned, it might be a competitive
disadvantage to rely on skilled workers, highly
skilled engineers and other technical staff to
realize high quality production and
complex products. The dependency
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of OEM was and is extensive with
regard to niche production, which
also changes and creates a very
unstable economic situation. The contract
manufacturers appear to be powerlessness and
– in a way – “abandoned to their fate” as far
as the production of full vehicles is concerned.
Remembering the OEM-supplier hierarchy,
the changes let the 0.5-tier suppliers descent
to 1 st -tier suppliers specialized on modules and
systems. In such times it is doubtful whether
outsourcing to foreign countries like those in
Central and Eastern Europe helps to master
the crisis. If an OEM starts to invest in CEE,
contract manufacturers may get an opportunity
by following them, or are forced to follow?
3. ANALYTICAL FRAMEWORK
In order to compare and analyse the two case
studies, a starting point is defined that regards
similarities and differences, whereas the
similarities are seen as formative for the specific
character and function of these companies.
Therefore, firstly attention is turned to
institutionalist theory that might be helpful to
understand the environmental conditions of the
two companies. In a second step, characteristic
features of the company’s constitution will be
divided into similarities and distinctions.
Considering the classification of the “Varieties
of Capitalism” (VOC), the home countries
of both enterprises fall into the category of
“coordinated market economies” (CME) (Hall,
Soskice 2001) p.19f ). Although the VOC
approach is broadly assailed and enhanced
(Crouch 2005, Jackson, Deeg 2006, Deeg,
Jackson 2007, Hirt 2004, Campbell, Pedersen
2007, Allen 2006), this substantial debate
will not be addressed in this paper. Rather,
the approach is used to emphasize some
characteristics of the coordinated market
economies in Germany and Austria, which are
not challenged by the criticisms of the VOC