Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena
Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena
Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena
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AUTOMOTIVE REFERENCES LITERATUR COMPANIES GO EAST -<br />
GERMANY AND AUSTRIA<br />
times it was not easy to embed the niche<br />
production, especially of cabriolets in larger<br />
production sites or assembly lines of OEMs<br />
with higher volumes. One interview partner<br />
expressed: “Cabrio production will provoke<br />
serious headaches, if it has to be implemented<br />
in OEM’s production sites. That’s why the<br />
OEM give it to contract manufacturers.”<br />
As far as foreign investments are concerned,<br />
Karmann used to be connected to investments of<br />
OEMs (for example: Volkswagen in Mexico<br />
and Brasil, Nissan-cooperation in England)<br />
but did not invest abroad on their own. They<br />
always produced abroad to realize a specific<br />
car production – as a kind of piggyback<br />
international production.<br />
Compared to the recent situation, several<br />
serious changes took place during the last<br />
five to ten years. The company’s heir left the<br />
company in 1990. A manager followed him,<br />
who again remained a comparatively long<br />
time and continued the business practices.<br />
But then more frequent personal changes in<br />
the management could be recorded. As the<br />
“business landscape” internationalized, the<br />
new executives have been less embedded<br />
in social and political networks or these<br />
networks have been very much expanded and<br />
internationalized. If there are new contracts,<br />
they are concluded in the context of complex<br />
treaties that require legal expertise. Technological<br />
change enables OEMs to produce<br />
niche cars and small production series<br />
Seite page 72<br />
within their own assembly lines.<br />
Simultaneously, the importance of<br />
system and module suppliers with<br />
high technological competitiveness grows.<br />
For contract manufacturing, Karmann could<br />
no longer rely on stability and certainty of<br />
following orders – new mechanisms of shorttime<br />
business relations, high flexibility, and high<br />
internationalization replace the old system<br />
of trust and long-term partnerships. The<br />
company tried to explore new ground after the<br />
year 2004/2005 and was “on its way east” with<br />
foreign investments on its own authority: two<br />
investments in Poland that are not piggyback<br />
with an OEM. One of the new Polish sites is<br />
connected with a contract for BMW in Leipzig<br />
but is not a contract manufacturier of a full<br />
vehicles but rather systems and modules. This<br />
might be interpreted as a prognosticator for the<br />
company’s following development. The Polish<br />
site is economicly and legaly independent from<br />
the other parts of the company and was erected<br />
to support an OEM under high cost pressure.<br />
The second site in Poland was founded as a<br />
tooling shop where Karmann wanted to realize<br />
low cost structures. However, problems already<br />
appeared in the early years of those sites:<br />
(Skilled) labour is rare, wages are higher than<br />
expected (and especially the growth rate of wage<br />
levels), institutional conditions in that country<br />
prove to be more difficult than assumed, the<br />
company laments organizational problems. The<br />
increase of transaction costs is enormous. During<br />
the last years, the company was unable to obtain<br />
new orders for the manufacturing of complete<br />
vehicles – regardless of the production site. The<br />
combination of OEMs being able to integrate<br />
small volume and niche production in their sites,<br />
“Standortsicherungsvereinbarungen” binding<br />
employment in the OEMs factories, and the<br />
opportunities for the OEM to build sites in<br />
Central and Eastern Europe to produce special<br />
products (for example Porsche together with<br />
Volkswagen: Cayenne in Bratislava, Slovenia)<br />
seems to be the “knock out” for the German<br />
contract manufacturer Karmann. Negotiations