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

AUTOMOTIVE REFERENCES LITERATUR COMPANIES GO EAST -
GERMANY AND AUSTRIA
times it was not easy to embed the niche
production, especially of cabriolets in larger
production sites or assembly lines of OEMs
with higher volumes. One interview partner
expressed: “Cabrio production will provoke
serious headaches, if it has to be implemented
in OEM’s production sites. That’s why the
OEM give it to contract manufacturers.”
As far as foreign investments are concerned,
Karmann used to be connected to investments of
OEMs (for example: Volkswagen in Mexico
and Brasil, Nissan-cooperation in England)
but did not invest abroad on their own. They
always produced abroad to realize a specific
car production – as a kind of piggyback
international production.
Compared to the recent situation, several
serious changes took place during the last
five to ten years. The company’s heir left the
company in 1990. A manager followed him,
who again remained a comparatively long
time and continued the business practices.
But then more frequent personal changes in
the management could be recorded. As the
“business landscape” internationalized, the
new executives have been less embedded
in social and political networks or these
networks have been very much expanded and
internationalized. If there are new contracts,
they are concluded in the context of complex
treaties that require legal expertise. Technological
change enables OEMs to produce
niche cars and small production series
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within their own assembly lines.
Simultaneously, the importance of
system and module suppliers with
high technological competitiveness grows.
For contract manufacturing, Karmann could
no longer rely on stability and certainty of
following orders – new mechanisms of shorttime
business relations, high flexibility, and high
internationalization replace the old system
of trust and long-term partnerships. The
company tried to explore new ground after the
year 2004/2005 and was “on its way east” with
foreign investments on its own authority: two
investments in Poland that are not piggyback
with an OEM. One of the new Polish sites is
connected with a contract for BMW in Leipzig
but is not a contract manufacturier of a full
vehicles but rather systems and modules. This
might be interpreted as a prognosticator for the
company’s following development. The Polish
site is economicly and legaly independent from
the other parts of the company and was erected
to support an OEM under high cost pressure.
The second site in Poland was founded as a
tooling shop where Karmann wanted to realize
low cost structures. However, problems already
appeared in the early years of those sites:
(Skilled) labour is rare, wages are higher than
expected (and especially the growth rate of wage
levels), institutional conditions in that country
prove to be more difficult than assumed, the
company laments organizational problems. The
increase of transaction costs is enormous. During
the last years, the company was unable to obtain
new orders for the manufacturing of complete
vehicles – regardless of the production site. The
combination of OEMs being able to integrate
small volume and niche production in their sites,
“Standortsicherungsvereinbarungen” binding
employment in the OEMs factories, and the
opportunities for the OEM to build sites in
Central and Eastern Europe to produce special
products (for example Porsche together with
Volkswagen: Cayenne in Bratislava, Slovenia)
seems to be the “knock out” for the German
contract manufacturer Karmann. Negotiations