The Changing International Division of Labour

7 downloads 0 Views 3MB Size Report
Jun 18, 2005 - in Central-Eastern Eurape (VW in the Czech Republic, Siovakia, and Poland;. Renault .... transporter T1 was created on the basis of the Beetle.
The Changing International Division of Labour: the Case of German Automobile Companies in Central Eastern Europe Martin Krzywdzinski, Research Fellow, Social Science Research Center Berlin, Germa':lY (Co-author: Ulrich Jürgens, Social Science Research Center Berlin, Germany)

1. Introduction The changing division of labour between high-wage and low-wage countries in Europe and in particular the issue of relocation of production and employment to Eastern European low-wage countries have provoked much public debate and controversy in Germany. Spectacular cases of relocation like the plant c10sure and strike at Electrolux in Nuremberg and provocative statements from company leaders like the Opel CEO Forster (2004) - "out of Germany or out of business" have raised the political temperature. First political responses show the extent of relocation fears. In May 2006, the Council of Ministers agreed that the guidelines for the EU regional funds should exclude support for relocation; in autumn 2006, newspapers reported discussions within the German government about taxing companies relocation

for relocating of jobs

production

and production,

(Spiegel,

6.11.2006).

Apart from the

so-ca lied "regime f1ight" by companies

constitutes a threat for Western Europe because it could trigger competition to undercut

labour standards

and wages.

Regime flight means the using of

low-wage locations as an exit option from the labour standards and collective bargaining regimes of Western European countries. This article examines the shifts in the East-West division of labour in Europe and their impact on work and employment in the automotive industry, which, with a workforce of about 2 million in Western Europe and 0.3 million in Central Eastern Europe (in terms of NACE 34), is among the most employment intensive sectors in the European economy. This article deals with the changes taking place in the production networks of the European car industry, and how they affect work and employment. We address three issues which playa

major role in the research

discussion: (1) Is the integration of Central-Eastern Europe into the production networks of the car industry displacing production and employment in Western Europe? Especially in Germany, there has been much controversy about

~ 96 -

the displacement thesis, fears being expressed that a "bazaar economy" was developing and the German car industry was being "hollowed out". (2) How is the division of labour developing between Western and Central Eastern Europe, and what are the consequences for upgrading prospects in Central Eastern Europe? An important role in research is played by the thesis that the East-West division of labour follows a "high end/low end" pattern. (3) What work models are developing in automotive plants in Central Eastern Europe? Researchers have c1aimed that firms may seek to escape the collectively regulated work models of Western Europe byestablishing production in Central Eastern Europe ("regime flight"). We discuss these issues on the basis of case studies in automotive firms in Central Eastern Europe and interviews with sectoral experts, representatives of industry associations. The case studies are based on interviews conducted with representatives of management and unions. In total, 86 interviews were carried out at the OEMs VW, GM, Volvo, Fiat and Toyota, at the suppliers Faurecia, Lear, Mahle, Delphi, Valeo, Magna and in a number of local Central Eastern European

firms (the bus producers

Solaris and Autosan

and three

local

suppliers). Two research projects on the relocation of production to low-wage countries and the consequences for the development of employment relations provided the framework for the case studies. They were funded by the European Commission (ESEMK Project) and the Otto Brenner -Foundation

(Relocation

Project). The following section provides abrief overview of the research debate. Section three is then devoted to the thesis of a "hollowing out" of the German car industry.

In section

four,

we

discuss

the

division

of

labour

between

Central-Eastern Europe and Germany on the basis of two case studies. The last section examines the development of work models in Central-Eastern

Europe.

The article finishes with summary conclusions.

2

Status of Research

In the late 1990s, a shift occurred in the discussion on the new division of labour between the Eastern European low-wage countries and the Western European high-wage countries in the automotive industry. The predominant view in the

- 97 -

1990s was succinctly described by Kurz and Wittke (1998). They identify two corporate strategies with respect to the division of labour between Eastern and Western Europe. The first was the "Ieast-cost approach", resulting in a division between high-tech in the West and low-tech in the East. Eastern European sites manufactured

intermediate

products

with

low production

depth,

whereas

complex and automated stages of production remained in Western Europe. The objective of investment exploit

low

labour

in Eastern Europe under this strategy was solely to

costs.

Kurz and Wittke

termed

the second

strategy

"complementary specialisation". In this case, complex production processes and capital-intensive

plants were also established in Eastern Europe. The division of

labour between East and West was based not on aseparation process stages but on different

product specialisation.

of different

Western firms used

Eastern Europe to expand their product range downwards (into the low-price segment). Quality standards, production techniques, and workforce qualification standards

were transferred

from West to East. Kurz and Wittke saw VW's

takeover of Skoda and Fiat's engagement in Poland as prime examples of this approach. Ruigrok and van Tulder (1998) argued in similar vein in characterising Eastern

European

automotive

sites as the "Iow end of the European car

complex" (cf. also Sturgeon 1999; Lung 2003). Common to both accounts of the East-West

division

of labour

in the

European

automotive

industry

was

confidence that the development of the Eastern European auto industry would not entail the relocation of jobs and sites from Western Europe. The discussion changed after the turn of the century. Studies by consultants painted extremely alarming scenarios - from a Western European or German perspective

- of jobs and production sites being relocated from Western to

Eastern Europe. In a survey of 200 automotive suppliers in Germany (Ernst & Young 2004), 50% of respondents declared that they were planning to relocate production from Germany to Eastern Europe and (to a somewhat lesser degree) to China. Not only production was threatened Mercer (Automobil-Produktion development

with relocation. In a study by

2/2007), offshoring

to low-wage

countries

by

service providers was predicted to rise from 5% to 15% of sales

volume. The thesis of an increasing relocation of production and development from Western to Eastern Europe implies that the "high-end/low-end"

division of

labour would cease, competition between Western and Eastern European would develop, and considerable

pressure would be put on employment

models in Western Europe.

- 98 -

and work

The debate in Germany was considerably whipped up by the provocative suggestion that Germany was weil on the way to becoming a "bazaar economy" (Sinn 2005), Le., an economy occupied solely with the final processing of products, most components being made in low-wage countries. Any such development would have considerable social repercussions in Germany, the country with the most important industrial sector in Europe. The author of the "bazaar economy" thesis, Hans-Werner Sinn stated: "Thanks to outsourcing to Eastern Europe, German industry can continue to shine with its projects on world markets, and export statistics can report proud numbers. The full value of the Audi, whose engine is made in Hungary, is recorded in German export statistics. But "made in Germany" is becoming more and more of a case of fraudulent labelling. Only final assembly now takes place in Germany. The valuable parts now come increasingly from Eastern Europe" (Sinn 2004; cf. also Nunnenkamp 2004). Relocation is a danger for Western Europe but it could represent a chance for industrial development in the East. However, researchers differ in their assessment of the chances of Central Eastern European countries for catching-up with the Western European automobile industry. One of the contested issues relates to questions of possibilities or limitation of upgrading of productive functions performed in the CEE countries. According to van Ruigrok and Tulder (1998) and Kurz and Wittke (1998), the CEE locations of Western and Japanese automobile companies have experienced a process of upgrading in terms of quality and technology but remain restricted to the "Iow price" product range. We will argue later in this article that this pattern is changing and that CEE locations are no longer limited to a "Iow-end" approach (Humphrey 1999; Groht 2005; Janak/Pavlinek 2007). A second controversial issue concerns the impact of the automobile FDI in Central-Eastern Europe on work models in both West and East. The risk of a "race to the bottom" in wages and working conditions due to relocation threats is an important point of debate here. In examining work models in Central Eastern European countries, the question is whether firms transfer work models from high-wage countries to Central-Eastern Europe or whether they use the CEE countries to "exit" the work models of their home countries. While some authors come to the conclusion that a more or less "hybridised" or "partial" transfer has been taking place from Western to Eastern Europe (Tholen et al. 2006, Fichter

- 99 -

et al. 2005), other authors (Bluhm 2001, Meardi and Toth 2006) point to cases of companies that explicitly wish to escape fram the work models and standards prevailing in Western Eurape. Only few authors though see a general trend towards model flight and the development Central-Eastern

3

of "Iow-standard" work models in

Eurape (Ellingstad 1997).

The Emergence of a German-CEE Production Network

The establishment of automotive firms in Central-Eastern

Eurape began in the

early 1990s and has continued unabated to this day (2007), as the following figure

1 shows with

automotive

regard to plant openings

firms in Central-Eastern

and takeovers

by foreign

Eurape. It draws on our database

on

automotive companies in Central Eastern Eurape which was constructed on the basis of data fram business associations,

foreign investment agencies, and

press. Several peaks in establishment activities are apparent. In the early 1990s, the opening of the Iran Curtain gave access to a large potential market of some 100 million consumers in Central Eastern and South East Eurape. In spite of all the political and economic imponderables,

most carmakers did not want to risk

being excluded fram this market. A number of takeovers of motor vehicle plants in Central-Eastern

Eurape (VW in the Czech Republic, Siovakia, and Poland;

Renault in Siovenia) attracted a first surge of suppliers, which peaked in 1993.

Figure 1: Plant openings and acquisitions of foreign automobile companies in Central Eastern Eurape and Romania, 1989-2006 80 -

70

50

40 30

20

o 1989

1991

1993

1995

1997

German companies

- 100 -

1999

2001

2003

~ Other

2005

Source: Own data base based on information from business associations, agencies, and press. Central-Eastern

foreign investment

Europe: PL, CZ, SK, HU.

In the mid-1990s, the new plants were to produce mainly for the Central Eastern and Eastern European markets. However, it soon became apparent that the hopes set in the expansion of the Central Eastern European motor vehicle market had been excessive. As market expectations were disappointed in Eastern Europe, cost motives became more important when it came to investment. VW and Fiat modernised their production sites, orienting production increasingly towards exportation to Western Europe, and GM built a new site in Poland. In addition, VW, GM, and Toyota began with the construction of component plants (especially for engines and transmissions) in Poland and Hungary. Good experience with labour skills, low labour costs, and investment incentives in the CEE countries (special economic zones and tax relief) now attracted primarily cost motivated investment by suppliers. The reasons behind supplier investment thus shifted from "follow sourcing" to cost considerations in developing platforms for export to Western Europe. This wave of establishment peaked first in 1998. Finally, in the first half of the 2000s, a new wave of establishment by motor vehicle manufacturers set in, involving primarily Korean and French producers (Toyota/PSA in the Czech Republic, PSA in Siovakia, Kia in Siovakia, Hyundai in the Czech Republic, Renault's takeover of Dacia in Romania), reaching a provisional climax in 2005. This development led to a renewed rise in supplier investment in Central-Eastern Europe, which is likely to continue for some years owing to the arrival of Japanese and Korean firms. Primarily cost-driven investment continues. As the figure 1 shows, German automobile firms took a leading role in Central Eastern Europe; almost one third of foreign firms in Central-Eastern Europe are German. The investments of German firms resulted in a dramatic shift in the regions of origin for component imports to Germany, as figure 2 illustrates. The share of Central Eastern and Eastern Europe in German automotive component imports rose between 1995 and 2005 from 9% to 37%. This expansion was at the expense of component imports from Western European countries and from Spain and Portugal. In the case of Spain and Portugal, the share in German

- 101 -

imports was not only halved: their absolute value was reduced. As figure 2 shows, Germany

is the only Western European country to have reoriented

component imports so strongly towards Central-Eastern

and Eastern Europe.

For France, the Iberian peninsula and the Mediterranean region continue to play a key role as low-cost production locations, although the CEE countries are growing in importance. In Italy and the United Kingdom, Central Eastern Europe has already caught up with or overtaken the countries of the Iberian peninsula, albeit at a much lower level than in Germany. Overall, it can be said that low-cost component

imports play a much bigger role for Germany than for the other

Western European motor-vehicle producing countries. At the margin we can add that low-cost

imports

from countries

outside

Europe

(e.g. China) remain

negligible.

Figure 2: Sources of automobile component imports of Western European countr ies, 1995

in % €14bn

€30bn

€6bn

€15bn

€3bn

1995

2005

1995

2005

1995

€7bn

€9bn

€16bn

2005

1995

2005

100

and 2005

80 60 40 20 0 Germany

France

• Central and Eastern Europe

Italy

United Kingdom

~ Spain, Portugal and Mediterranean

DOther

Source: Own calculations following Eurostat, DS-018995. Components under SITC (784, 71321-23,71391-92,77313).

As mentioned

above,

heavy

investment

by German

automotive

firms

in

Central-Eastern

Europe and rapidly growing imports of components from CEE

countries have provoked a heated debate in Germany about the danger and

- 102 -

extent of outsourcing to CEE low-wage countries and the risk of "hollowing out" automotive production in Germany. This is surprising in the light of general data on the development of employment in the auto industry. From the 1990s until today (2007), Germany was able to maintain the level of employment in the car industry. It suffered a severe recession in 1993-93 but recovered from 1995 on. Although German firms have been more assiduous than enterprises from all other countries in establishing themselves in the CEE countries, and although Germany is by far the most important destination for component exports from CEE countries, the aggregate figures reveal no job losses in Germany. How is this to be explained? Central-Eastern

A more precise look at the links between

Europe and Germany, as weil as Western Europe is needed.

Figure 3 compares the value of component imports per vehicle produced in Germany and in other Western European countries. It is based on Eurostat and VOA data and permits a comparison of the penetration of automotive production by imports in each country. Any relocation of the part and component production to low-wage countries should manifest itself in Western European high-wage countries through a strong rise in the value of component imports in comparison with domestic value added. Indeed, in all the Western shown in figure 3, the value of component

European

countries

exports per vehicle

produced

increased. It is difficult though to interpret the absolute level of the component imports. In 2005, the average producer price of a passenger car produced in Germany was about 22,400 € (own calculation based on European Commission 2006). Component imports per passenger car represented about 23% of the price of the car - if we abstract from the fact that these imports include also components for busses and trucks, components for the second market, and that these imports

include also intermediate

inputs which

partially

come from

Germany itself. In France, the average producer price of a passenger car was about 15,100 € which means that component imports constituted about 28% of the price. In both cases the import shares are approximate values, and in both cases they are not dramatic.

- 103 -

Figure 3: Value of component imports per vehicle produced 1995 and 2005 in €

10.000

l

+76%

8.000 ~ 6.000 ., 4.000 --' 2.000

-1

.,

o France

Germany

Italy

United Kingdom

01995

.2005

8ource: Own calculations following Eurostat, 08-018995

and VOA, International Auto 8tatistics.

Components under 81TC (784, 71321-23, 71391-92, 77313).

The analysis of the aggregate data leads us to two results: First, the overall level of penetration by component imports in Germany and France, the main Western European automobile producers, is not dramatic despite a doubling of imports between 1995 and 2005. Second, the German car producers have radically supplanted

imports

from

Western

Europe

and the

Iberian

component

imports from CEE countries, what has considerably

peninsula

by

boosted the

price competitiveness of German firms in comparison to their Western European competitors

which were more hesitant to invest in the CEE countries.

German-CEE paramount

A

network can be said to have developed, since Germany plays a role

Central-Eastern

both

as

component

supplier

for

Europe and as recipient of components

production

sites

manufactured

in

in the

CEE countries. The development of the German-CEE production network has not so far displaced manufacturing

in Germany. Where this has occurred, job

losses have been compensated by expanding employment in other fields.

- 104 -

4 The Division of Labour between Eastern and Western Europe: The Case of Volkswagen Volkswagen is not only the biggest car company in Europe but it is also the most important automobile acquisition

investor in Central Eastern Europe. Including its first

of Skoda in 1991, VW has acquired

or opened

eight car or

component plants in CEE countries and it employs there approximately 50,000 employees. Using the case of VW, we will discuss two configurations of Eastern and Western

European

locations,

which

we find

both

in the

European

automobile industry: a complementary division of labour between East and West, and a relationship low-wage

countries.

of direct competition

which

includes

The two cases from within

also relocation

to

the VW Group are VW

Commercial Vehicles and VW's engine plants. The main questions guiding the case studies are: (a) Which division of labour develops between the Central Eastern European and the German plants? (b) Are the German sites threatened by relocation to Central Eastern Europe? (e) Can we observe an upgrading of the Central Eastern locations?

4.1

Win-Win Situation: VW Commercial Vehicles

Volkswagen transporter

has been producing commercial vehicles since 1950, when the T1 was created on the basis of the Beetle. Since

1956, the

transporter has been produced in the parent plant in Hanover, which remained Volkswagen's only commercial vehicle plant in Europe until 1993. The situation changed in 1993 when VW initiated cooperation with the Polish manufacturer Tarpan in Poznar'1 (Poland), taking over the site entirely in 1996. Work started with SKD assembly of transporters produced in Hanover and Skoda passenger vehicles from the Czech Republic to avoid customs barriers. Production was solely for the Central Eastern European market. In the second half of the 1990s, there was a shift to CKD assembly, and, owing to the lack of sales opportunities in Eastern Europe, exports to Western Europe began - a move which had not been envisaged in the first half of the decade. As assembly activities expanded and output was increasingly destined for export to the West, quality assurance was improved and certified. In the early 2000s, finally, it was decided to expand

- 105 -

the Poznari plant into a fully integrated facility and to establish a new product there (the city delivery van "Caddy"). This decision was far from self-evident. The Caddy was built on the same platform as the VW Golf and could have been produced at the Wolfsburg plant, which at the time was not working to capacity. However, the management of the VW commercial vehicles division advocated awarding production to Poznari, not least of all in order to balance out capacity utilisation at the commercial vehicle plants in Poznari and Hanover by means of a product turntable in the event of fluctuation in the output of specific models. We will be returning to this point. The modernisation of the plant was accompanied by strong expansion of the workforce. It grew from a good 2,000 in the second half of the 1990s to just under 7,000 in 2005 (capacity of the site: 165,000 vehicles).

Location

competence

of a specific

product

in Poznari

also expanded

the

profile of the site: the site assumed responsibility for production

ramp-up (prototype construction, pre-series production), certain competencies in process engineering, and, to a Iimited extent, in logistics and purchasing. The development

of the Poznari plant and its enhanced position in the production

link-up were not the result of a long-term strategy but the outcome of a gradual process of learning and negotiation. Simultaneously

to the expansion of the Poznari plant, Volkswagen modernised

the German production site in Hanover (production capacity in 2005: 165,000 vehicles). Different products were assigned to the two facilities in Hanover and Poznari. Hanover was responsible for production of the c10sed variant of the transporter (T5), while Poznari took on production of the city delivery van Caddy and the transporter with open bed. This division of labour did pattern

of outsourcing

Particularly

labour-intensive

the top version

labour-intensive

activities

of the transporter,

not

follow the

to the low-wage the "Multivan",

country.

is a very

product because of the many variants and high-quality interior

trim. With the Caddy, the number of variants and interior trim are less demanding. The reason for this division of labour is differences in the demand structures for the transporter and the Caddy. The transporter (especially the Multivan) is a very expensive product, competing primarily on quality. The Caddy, in contrast, is a standard product, where every possibility for cutting costs has to be exploited because it must compete on cost. For this reason, the Caddy is produced in Poland, whereas making the Multivan in high-wage Hanover is no problem.

- 106 -

Location of a specific product in Poznan expanded the competence profile of the site since the mid-2000s:

the plant assumed

responsibility

for production

ramp-up (prototype construction, pre-series production) and certain aspects of process engineering. Associated with this was a limited measure of logistics and purchasing competence. But our case study clearly shows that there are limits to the upgrading of OEM sites in Central-Eastern research and development,

Europe.

In the first place,

as weil as vehicle design are retained by VW's

headquarter in Germany.28 Secondly, the plant in Poznan was assigned only very Iimited responsibilities in purchasing. One important reason is the platform strategy, which plays a growing role for all producers. The main product of the plant, the Caddy, is based on the same platform as the VW Golf, the VW Touran, the Audi A3, and the Skoda Octavia. In order to realise cost advantages, part purchasing

for the cross-platform

components

is controlled

centrally

from

Germany, while the site in Poznan is responsible for parts specific to the Caddy. Most of the second product of the Poznan plant, the T5 Transporter, is built in the lead plant in Hanover. Parts purchasing is consequently

focused on the

Hanover site. On the whole, therefore, Poznan has Iittle scope for action in purchasing. If supply relations are to be established with local suppliers, such decisions always have to be cleared with Hanover and Wolfsburg and evidence produced that collaboration with the suppliers is useful for all production sites of the platform concerned.

This limits considerably

the opportunities

of Polish

suppliers to enter into VW's supply chain. The complementary division of labour between Hanover and Poznan is, however, onlya part of the story. In addition, a so called "turntable" (Drehscheibe) as an element of interplant flexibility as weil as competition was introduced: some versions of the "Transporter" van can be produced at both locations. This makes it possible to shift parts of production volume and employment to either plant as demand varies for the different models. Under the "product turntable" system, the two sites can flexibly modify their product mix. Depending on demand, output volume can be shared out between the two sites to ensure even capacity utilisation. This flexibility of producing different models in one plant to balance capacity utilization

between the two plants reduces the need for external

employment flexibility. The sole exceptions to this pattern are Skoda in the Czech Republic, which constitutes an independent brand within the VW group, and has its own R&D centre with a staff of about 1,200, and Renault's Dacia in Romania (Hirt 2007: 8). 28

- 107 -

From the point of view both of management

and works council in Hanover,

awarding production of the Caddy to Poznan and establishment of the turntable were of major importance in safeguarding production in Hanover: "We fought for giving the Caddy to Poznan, and were finally successful, although Wolfsburg had a great deal of free capacity and the Caddy was built on the Golf platform. This allocation was not a matter of course. We were in favour of it because giving Poznan the Caddy defused competition against Hanover, and with the turntable we were better able to organise capacity utilisation at the Hanover site. The greater the total volume of VW commercial vehicles, the greater are the possibilities of the turntable system. [... ] I think we have a fair form to negotiate the distribution of production volumes. It is c1ear that it is not possible that one of the plants produces in three shifts and the other reduces employment.

Dur

management is interested in optimising both plants and not in playing one off the other" (interview 15.01.07). Not only the form of the division of labour between Hanover and Poznan but also the high amount of components serves to secure employment

imported from Germany to the Polish plant

in the high wage country Germany. The value

added in the Poznan plant amounts to about 5% of the production costs. It is relatively low due to the low wages, although the complete production process including body shop, paint shop and final assembly is located in Poland. The component production in Poland amounts to about 35% of the production costs. The largest part of the components imported to Poland (60% of the production costs of cars from the Poznan plant) comes from Germany.

4.2

Competition and Re/ocation: Engine Production in the VW Group

In the early 1990s, the two most important engine plants of the Volkswagen group were the VW lead plant in Salzgitter and Ingolstadt, where Audi engines were built. At that period, just under 10,000 people were employed in Salzgitter, while at Audi in Ingolstadt, some 1,000 were engaged in engine production. The expansion to Central Eastern Europe began in 1994 when Audi started the production of engines in Györ, Hungary. It expanded the plant until the end of the 1990s and relocated the complete engine production from Ingolstadt to Hungary. During the first years of the Györ plant, the VW management

assured the

German works council that the relocation concerned Audi engines only and that it would not threaten the Salzgitter site (interview 19.06.07). But already in the

- 108 -

second half of the 1990s, apart

of the production

of petrol engines was

relocated from Salzgitter to Györ. The Salzgitter works council hoped that the German plants would guard at least the complete diesel engine production and that the Hungarian plant would specialise

in petrol engines.

However, VW

started also to shift apart of the diesel engine production to Györ since 1997. In 1999, a new VW engine plant was opened in Polkowice (Poland) and started the production of diesel engines. The VW management argued that the German engine plants would benefit from the opening of a low cast plant in Poland because the company could calculate a joint price for the engines which would combine the costs from Germany and Poland (mixed calculation). This promise was, however, not realised: "The mixed calculation existed only in theory and was not more than hot air. When we demanded to put it into practice, the management answered that this was not possible due to accounting and legal reasons" (interview 19.06.07). The figure 4 shows the development of the production volumes in the German and Central Eastern European engine plants of the VW Group. The production in Germany increased from 1990 to 1998 from 1.6 million engines to 2.8 million, falling then steadily to 1.4 million in 2006. The production in Central Eastern Europe expanded and reached 2.6 million engines in 2006.

Figure 4: Production of VW Engine Plants in Germany and Central Eastern Europe in Million Units, 1990-2006

3

2

o 1990 1992 1994

1996 1998 2000

-Germany

- 109 -

_CEE

2002

2004 2006

Source: VW, Audi, Skoda, annual reports and own interviews.

In particular in the case of the Hungarian engine plant in Györ, the competence profile of the plant was rapidly expanded. During the first years, the plant in Györ had no equipment for the mechanical processing of the castings. The processed engine blocks, connecting rods, cylinder heads, crankshafts and camshafts were delivered from the German plants, in particular from Salzgitter. At the end of the 1990s the plant got the equipment for the processing of the castings. In 2001, Audi started to build up a small technical development department. The main R&D-department for Audi engines is stilliocated in Ingolstadt (1,200 engineers), but the plant in Györ disposes now of 100 engineers to undertake tests and small adaptation developments. In the mid-2000s, the plant in Györ got a tool shop which manufactures tools and equipment for Audi and the whole VW Group (body shop and press shop equipment). The main tool shop of Audi is still located in Ingolstadt (1,170 employees), but the tool shop in Györ employs already 170 workers and will expand its employment to 320 (interview 13.01.06). In sum, the VW Group engine plants exemplify direct competition between German and Central Eastern European plants where both direct relocation and gradual shifts in production volume to CEE countries have taken place. This relocation cost jobs in Germany. At the beginning of the 1990s, the workforce in Salzgitter was just under 10,000; in the mid-1990s it had fallen to some 7,000, and in 2007 only 6,400 were on the payroll, since departures had not been replaced since 2000 (interview 19.06.07). In Ingolstadt, the relocation to Hungary cost 1,000 jobs in engine production. In Chemnitz, the number of people employed in engine production had increased to 900 by 2006. The 7,800 employees in Germany in 2006 compared with 5,000 in Györ, 1,050 in Polkowice, and some 500 in Mlada Boleslav. However, it is characteristic for the VW case and in particular for the corporate governance at VW that the collective bargaining actors in Germany (the management, the works council, and the state of Lower Saxony as one of the company's owners) set limits to the internal competition and relocation. These limits take the form of investment and capacity utilisation guarantees for the German VW plants which are negotiated since the 1990s. In this way, the VW

- 110 -

collective agreement of 2006 strengthened the position of the German engine plants. For the Salzgitter production site, 7,000 jobs were guaranteed until 2011 along with investment in a new generation of engines. Also of great importance was the promise to retain component production and not to outsource, which safeguarded employment in the production of add-on components in Salzgitter. Similar guarantees were given to other car assembly and component plants of VW in Germany. In return, the entire Volkswagen AG workforce had to accept an extension of working

hours from 28.8 to 33 hours per week without

pay

compensation, Le. a 14% reduction of the hourly labour costs. From the point of view of the German car industry, the relocation of engine production to Central Eastern Europe was mitigated by the fact that engine component

production

remained

production in Central-Eastern

in Germany.

The

expansion

of engine

Europe has boosted German component exports

and hence contributed to secure employment of German engine component suppliers. Local suppliers in Hungary produce only about 15-20% of the value of the engines which are manufactured

in the Hungarian Györ plant (interview

13.01.06). The largest part of the components is from Germany. We can show this using trade statistics for Hungary. There are two engine plants in Hungary: The big Audi plant in Györ and the small GM plant in Szentgotthard. The trade statistics reflect the component imports of these two plants. Nearly the complete production of engines in Hungary is exported and Germany is by far the most important receiver of the exports (cf. figure 5). But we can also see that Germany is the most important supplier of components for the Hungarian engine plants. In 1995, 97% of the engine component imports to Hungary came from Austria and Germany. In 2005, it was still 85%. In 2005, component imports represented still 55% of the production value of Hungarian engines. The engine assembly has been relocated to Hungary, but a large part of the value creation is stilliocated Germany.

- 111 -

in

Figure 5: Hungarian Engine Component Imports and Engine Production and Exports, 1995 and 2005

Engine component imports From: Austria Germany

Engine production and exports 1995

From: Germany 82% Po land 3% Austria 3% Czech Rep. 3%

€ 0,6bn

€ 0,2bn

49% 48%

:>

~

To: Germany Spain Belgium UK

43% 32% 17% 8%

To: Germany Spain CzechRep. Belgium

63% 8% 8% 8%

2005

I

€2,4b~



8ource: Eurostat, 08-018995.

The figure 5 shows also some interesting changes of component sources for Hungarian engine plants. Whereas there were no engine component supplies from CEE countries to Hungary in 1995, Central Eastern Europe (in particular Poland and Czechia, but also Siovakia and Romania) provided already 7% of the Hungarian engine component imports in 2005. There are. also component exports from Hungary to Germany. These are signs for the appearance of an engine component industry in Central-Eastern

Europe which could change the

division of labour between Germany and the CEE-countries

and reduce the

component imports from Germany in the future. The German suppliers Bosch and Mahle have constructed engine component plants in the Czech Republic, Poland and Romania. The construction of the engine plants of Toyota in Poland was accompanied

by the settling of several Japanese

engine component

suppliers in the Czech Republic, Poland and Hungary (Denso, Aisin, Aisan and others).

4.3

Summary

There are different forms of the East-West division of labour in the European automobile industry. The case of the VW Group has served us to discuss two main of these forms:

- 112 -

Complementary division of labour. In the case of VW Commercial Vehicles, the plants in Germany and Poland are part of a complementary division of labour in which every plant specialises on a certain product line. The position of a plant in this division of labour is determined by the form of competition: The Polish plant specialises in the product characterised bya high price competition, the German plant specialises in the product characterised by a quality competition. In addition, a so calted "turntable" (Drehscheibe) serves as an element of interplant f1exibility what means that some product versions can be produced at both locations. This makes it possible to shift parts of production volume and employment to either plant as demand va ries for the different models. The German works council of VW has supported this form of division of labour and the modernisation of the Polish plant. We can find similar patterns of a complementary many

companies.

The

German

truck

and

division of labour in bus

producer

MAN

manufactures in Poland all of its city buses, which are confronted with a high price competition, whereas the premium coaches are produced in Germany. The German car industry as a whole shows an increasing specialisation

in premium vehicles: the production of premium brands

(Mercedes, BMW, Audi) expands while the production of volume brands (VW, Opel) decreases. Competition and relocation: In the case of the engine production at the VW Group, there is no East-West division of labour but direct competition for the same products which has led to relocation of apart of the production from Germany to CEE countries. The expansion of the CEE plants was pushed by the management against the German works council. But there is no complete relocation of production from Germany to low-wage countries. In several waves of negotiations, the German metalworkers union has made concessions to car companies concerning wages and working times and has reached employment guarantees for the German car plants in return. It is remarkable that in both cases component imports from Germany play a major role. The expansion of the automobile industry in Central-Eastern

Europe

has alt in all created a large export market for the German component suppliers and secured employment in Germany. Due to these component exports, the

- 113 -

employment effects of the relocation of production to CEE countries were much more limited than one could expect. This constellation is, however, not stable. A component industry in CEE countries is developing and may reduce the imports from Germany in the future.

Table 1: Case study summary - division of labour between Germany and CEE VW Commercial Vehicles

VW engine production

• Premium products in Germany (quality

• Same products in Germany and

and image competition), standard

CEE, direct competition

products in Poland (price competition); "turntable concept" • Win-win-constellation

based on the

• Relocation of production from

growth of production in VWs

Germany to CEE, concession

commercial vehicles division

bargaining in order to maintain production in Germany

• Relatively low local content in Poland,

• Relatively low local content in CEE,

Germany as the main source of

Germany as the main source of

component imports

component imports, but first signs of the emergence of a supplier base in CEE

From the point of view of the Central Eastern European countries. we were interested

in the prospects for industrial development

relationships

between Western

and upgrading. 80th

and Eastern locations we investigated,

the

complementary specialisation and the direct competition, imply upgrading of the Central Eastern European sites. This upgrading includes first the transfer of the Western

European

production

systems

and their quality

and productivity

benchmarks.

Secondly, it means the development of additional competences,

for instance

in prototype

construction,

process

engineering,

logistics,

and

purchasing. There are however clear limits to these additional competences: Research and development as weil as the main purchasing functions remain at the Western European company headquarters. We can observe a successful industrial development

and upgrading in Central Eastern Europe within the

hierarchical West-East

relationship.

Even if the hierarchical character of this

relationship is not challenged, the extent of upgrading in Central Eastern Europe

- 114 -

suggests that the East-West division of labour in the European automobile industry cannot be reduced to a "high end-Iow end" pattern.

5

Work Models in the Central-Eastern European Automobile Industry

Successful

industrial development

wages and working

conditions

is a precondition

for an improvement

but it does not automatically

of

produce this

improvement. The Mexican maquiladoras industry is often cited as an example of the successful development of an export-oriented industry in wh ich, however, wages remain low and working conditions do not improve (Ellingstad 1997). Is Central Eastern Europe in danger to become the European maquiladoras? The development of wages and working conditions depends considerably

on the

strategies of the companies. The development of the maquiladoras is associated with "regime flight" strategies of firms which are on the lookout for weaker labour standards and poorly developed collective interest representation structures. Are CEE locations used by firms as opportunity to escape from the standards and rules imposed by Western European work models ("regime flight")? We will discuss this question focusing on the following aspects: (a) the extent of investment in training the workforce, (b) the value placed on job security and the balance between job security and flexibility, and (c) the willingness to recognise plant (union) employee representation and to cultivate cooperative employment relations.

5.1

Investment in employee skills

Socialist Poland had developed a specific form of training in industry: vocational training schools were often attached to major enterprises and served their needs. However, in the course of the "shock therapy" provoked by the economic crisis of the 1990s, most large state concerns faced collapse and sought to reduce costs by divesting themselves

of vocational

training facilities.

By the mid-1990s,

almost all vocational schools attached to enterprises had disappeared or been hived off. In the 1990s, the collapse of state enterprises made a large number of skilIed workers "redundant", and thus available for recruiting by foreign investors. Until about 2005, foreign investors in CEE countries were still able to recruit

- 115 -

industrial workers dismissed by wound-up or restructured former state enterprises. In many of the plants under study, 70% to 80% of blue-collar labour were skilied workers. Since the mid of the current, however, labour shortages have developed. The response of firms to these shortages is an important indicator for the future development of work models in the Polish automobile industry. We therefore consider it significant that certain companies have launched pilot projects to introduce in-house training in cooperation with vocational schools, which points to a willingness to invest in employee skills. There are several cases of German firms experimenting with the transfer of their home model of a "dual" vocational training system in cooperation between the plant and a vocational training school to Central Eastern Europe. All Volkswagen sites in Central Eastern Europe (as weil as the Volkswagen brand Skoda) offer dual vocational training for occupations particularly in demand, such as mechatronics engineering, in cooperation with a vocational training school. In Poland we also found a dual system of vocational training at the German supplier Mahle, and Bluhm (2007: 264f) reports that Bosch had a similar system in the Czech Republic. The practice in German plants has invited imitation, facilitated by earlier traditions of vocational training in Central Eastern Europe: The Polish bus manufacturer Solaris, inspired by the example of VW, has agreed a cooperative seheme with a vocational training school from the Poznan area, and from 2007 is offering a three-year course in mechatronics (interview 17.11.06). At Volvo Wrodaw, company vocational training is still under discussion with vocational schools (interview 15.02.06). The "dual" vocational training system is, however, only one form of training practiced in the Central Eastern European automobile industry. The overall picture shows a large variety of practices. American, Japanese, and French automotive firms rely rather on public vocational schools for the recruitment of special technical skills and do not have own vocational training. Investment in upskilling is indicative of a firm's strong locational ties and willingness to develop high road work models. However, the instances of dual vocational training cited remain isolated examples, especially considering that the training projects are to some extent still in the early stages. It remains to be seen whether the firms will continue and extend their training activities and whether other companies will follow suit. It is possible that "free riders" will poach the skilied workers and gain a competitive advantage from having saved the cost

- 116 -

of training them. The weakness of labour and management associations and accordingly

of inter-company

coordination

mechanisms

in Central

Eastern

Europe could encourage such conduct. Only in Siovakia, we find a coordination of vocational training activities related to the automobile industry through the automobile

employers'

association

(intec.net

2005).

In this regard, Central

Eastern Europe is currently going through a critical phase in which both the acceleration of high road development

through upskilling and raising labour

standards and a relapse into low road development are possible if firms respond to developments

in the labour market through relocation or specialisation

in

products and production systems that have little need of ski lied labour.

5.2

Job security and f1exibility

Job security is an important element of good work and also an important condition

for the willingness

of employers

and

employees

to invest

in

company-specific training. Given the growth of the automotive industry in Central Eastern Europe, and still more in view of increasing labour shortages, firms are extremely interested in employees with a commitment to the company and in a stable core workforce. Automotive firms in Central Eastern Europe do not pursue a "hire and fire" policy. However, work models at CEE locations differ from those in Western Europe in that job security is restricted to a smaller kernel of employees, so that there is a broader margin of precarious employment in firms and a higher segmentation of employment status. This margin is due in the first place to a greater use of temporary employment than is usual in Western Europe. Most of the foreign firms under study used agency labour, albeit in different functions: •

General Motors and Lear are examples of firms where temporary work agencies almost entirely took over responsibility for recruitment. Employees start work on a temporary basis before being taken over selectively as regular employees after a probationary period of a year. During major surges in recruitment, temporary labour can constitute up to 30% of the workforce but is reduced after the probationary period (interviews 09.03.06 and 06.09.06).



In other cases, agency labour is used to cover situations of peak demand for the plant's product or the needs for extra personnel in situations of

- 117 -

product ramp-ups. Thus, the CEE sites of Volkswagen use to have a buffer of temporary agency workers of at least 10-15% of the workforce, which can reach 25% or 30% at peak periods. This is far higher than the figures usual in German Volkswagen sites (interview 15.01.07). In view of the labour shortage in Central Eastern Europe, the willingness of local labour to accept a large temporary labour buffer can be expected to decline. Not least of all for this reason, company demands for greater accessibility to labour from other low-cost countries are becoming louder. The Czech Republic has led the way: in 2005 over 200,000 foreign workers, mainly from Siovakia, Ukraine, Vietnam, and Poland were employed (Horakova 2006: 19). Poland, by contrast, pursued a restrictive policy on foreign labour, diverting it into illegal employment in the construction industry, agriculture, and the catering and restaurant industry. Whereas Czech automotive firms employ many workers from Poland, Siovakia, and Ukraine, hardly any foreign workers are to be found in the Polish automotive industry,

since illegal employment

associations

are, therefore,

is no option for auto firms. Employers'

calling for lower bureaucratic

barriers to labour

immigration to Poland, and the government is working on a bill to facilitate the employment

of workers from the CIS countries, China, Korea, and Vietnam.

Czech experience shows that foreign temporary labour is often employed under inferior working and pay conditions than local labour (interview 18.06.07). The working conditions of foreign temporary labourers are, therefore, becoming a more and more important topic for Central Eastern European trade unions.

5.3

Employee representation and industrial relations

The research literature presents a wide range of findings on the development of industrial relations and the status of workplace employee representation in the CEE countries. In their study of German firms in Central Eastern Europe, Tholen et al. (2006) found that a pattern of recognition of employee representation (union and/or works council) predominated. the difference

and efforts to establish

cooperative

relations

This contradicts the regime flight thesis. Bluhm (2007) stresses between

large and small companies.

With respect to large

companies, she comes to the same conclusion as Tholen et al., whereas small and medium enterprises (SM Es), she finds, tend to adopt a hostile attitude to unions. According to Marginson and Meardi (2006), investment motives, skill requirements,

and transnational worker interest representations

- 118 -

structures like

the European

Works

Councils

(EWCs)

are important

factors

influencing

company attitudes to employee representation and industrial relations in CEE sites. As far as the development

of plant employee representation

in the Central

Eastern European auto industry is concerned, the following points need to be stressed: •

Whereas studies investigating the development of trade unions in Central Eastern Europe since regime change in 1989 to the early 2000s report a decline in unionisation and a weakening of unions at the plant level (Crowley/Ost 2001 ), since the middle of the current decade, there are signs of achanging trend in the automotive industry. The level of unionisation in Central Eastern European automotive plants is between 30% and 60%, in unionised suppliers about 20%, according to our research. This is weil below the highly organized German and Swedish automobile industry, but comparable to the unionization rates in other main automobile producing countries in Europe like Spain, Italy or United Kingdom (cf. EIRO 2003). The Polish Solidarnosc, in particular, has reported a number of new trade unions being founded in greenfield plants: at the American supplier Wabco and the Italian supplier ASK in 2005; at the Japanese component makers NSK Nakanishi and Sanden, at the two Toyota engine plants, at the German supplier Keiper, and at the French supplier Faurecia in 2006; at the Japanese suppler Sumitomo in 2007.



There are many models and practices with regard to the form of employment relations in the plants of foreign firms in Central Eastern Europe. In Poland, the Volkswagen plants in Poznan and Polkowice as weil as Volvo Wroctaw are considered examples of the social partnership model. In these cases, management sees a cooperative relationship with union employee representatives as an element of the "VW model" or "Volvo model" transferred to Central Eastern Europe (interviews 09.05.05, 13.05.05 and 14.02.06). In the cases of GM and Fiat in Poland, management attempted to avoid the founding of a trade union or to weaken the unions (interview 06.09.06; MeardilToth 2006): however, union employee representation was finally recognised here, too. Among carmakers, Suzuki Hungary provides an example of an anti-union attitude. A trade union was founded at Suzuki in 2006 but the company

- 119 -

immediately dismissed the union leader. In response, the Hungarian Prime Minister refused to participate in the ceremony to launch the plant's new car model. At the very best, an aloof attitude towards trade unions is manifested in Toyota's attempt to avoid the founding of a trade union in its sites in Poland and the Czech Republic by initiating the setting up a works council - albeit without success (interviews 30.05.07 and 25.06.07). In both the Polish engine plants and the joint Toyota and PSA site in the Czech Republic, trade unions came into being shortly after the establishment of the works council, since the council could not engage in any collective bargaining and, therefore, could not satisfy the demand of workers for wage increases. We found anti-union attitudes that can be interpreted as model flight primarily in plants of major suppliers. In the case of Lear in Poland, there were attempts to put pressure on workers to leave the union (interview 09.03.06). At Faurecia in Poland, a conflict arose when the plant management in Gorz6w Wielkopolski dismissed two representatives of the newly founded Solidarnos6 organisation in 2006. At Leoni in Ukraine, management denied unions access to the plant (interview 25.10.07). On this point, the findings of our case studies can be generalised as folIows. In most cases, OEM sites are union organised and cooperative relations have tended to develop. OEMs have either not sought to flee the collectively regulated employment relations in Western Europe by relocating to Central-Eastern Europe or, where this has been the case, they have had to abandon the attempt in the face of workforce resistance. An important role is played by the high qualifications demanded of the workforce and the existence of strong national employee representative bodies in Western Europe and European Works Councils, who urge cooperative industrial relations at CEE sites (cf. also Bluhm 2007). In supplier firms, unions are rare, especially in greenfield sites, and companies have frequently attempted to obviate or impede the founding of trade unions. Supplier plants often have lower skill requirements than OEM sites. In addition, transnational suppliers characteristically have strongly scattered location structures and weak European Works Councils with little ability to coordinate employee representation.

~ 120 -

5.4

Emigration and labour shorlage

Since the accession of Central-Eastern

European countries to the European

Union in 2005, there is an increasing labour force shortage which is caused by the continuing inflow of FDI to CEE countries but also by the labour force emigration to Western Europe, and in particular to the UK and Ireland. According to the Polish Statistical Office (2007), about 2 million Poles have left Poland and work in Western Europe. This has provoked reactions of the companies which are now confronted with difficulties to retain their attractiveness as employers and to hire ski lied workers. In several of our case studies, the companies were confronted with a high labour turnover of 15-20% per year which concerned in particular highly ski lied workers (interview 14.02.06 and 30.05.07). The companies try to bind workers by offering special benefits (like additional medical care or recreation facilities), by investing in qualifications and by increasing wages. Dur case studies reflect a general trend. In a company survey by KPMG (2007) on the consequences emigration from Poland, the companies needed in human resources development

of labour

stressed that greater efforts were and improving

pay to counteract

emigration and the resulting labour shortages. Remarkably, no fewer than 31 % of companies were in favour of raising the minimum wage in order to increase wage levels and contain emigration. An expression of the pressure to increase wages and to improve work conditions is the wave of protests and strike threats which has hit the Polish automobile industry in 2006 and 2007. In the cases of MAN, VW, Toyota and GM, it was the first time that unions protested publicly and threatened to strike. In all cases, the unions demanded wage increases of about 15-20% which is much above the inflation rate. Similar conflicts have taken place at Skoda in the Czech Republic and at Dacia in Romania. There c1early is a trend of catching-up of the wage levels and work standards of CEE production locations, but the differences

between Central-Eastern

and

Western Europe remain big. From the mid-1990s until 2006, the hourly labour costs in € in Central-Eastern

European countries have doubled, but they still

reach only 8% (Romania) to 19% (Czech Republic) of the German level (VDA 2007). Despite all catching-up trends, the CEE countries will have a labour cost advantage over Western European countries still for a long time.

- 121 -

While the development of wages and work conditions has been quite favourable since the mid-2000s and the accession of the CEE countries to the European Union, the situation is not very stable and the companies in Central-Eastern Europe may soon arrive at a crossroads where they have to decide: Do they continue the upgrading of the locations, the investments in qualifications and the wage increases, or do they relocate production to other low wage countries.

5.5

Summary

Gur case studies reveal no trend towards "regime flight" from the industrial relations and work standards in Western Europe. The upgrading process of Eastern European production sites and the increasing labour shortage support the emergence of "high road" work models in Poland. In Polish automobile plants, the focus on a cooperative relationship with unions and on recruiting qualified skilIed workers, even establishing own vocational training systems represent elements of a possible "high road" model trajectory. The first main difference between work models in Western Europe and CEE countries is the stronger segmentation of employment status in wages in CEE locations. The commitment to employment protection is restricted to a smaller group of core employees. A second difference concerns the rights of the employee interest representation which are weaker in Central-Eastern than in Western Europe. In particular in supplier plants we can find frequent activities to avoid a trade union organisation. In view of the labour force shortage and wage increases in CEE countries, different development scenarios are possible. The first is a continuation of the "high road" development path by increasing investments in employee skills and competences and by upgrading the locations. The second is re-outsourcing of production

to

other

low

wage

countries

which

could

lead

to

a

"race-to-the-bottom" and a deterioration of labour standards and work conditions.

- 122 -

Figure 6: Virtuous or vieious eirele? Development path in Central-Eastern Europe

Automobile companies use CEE as a low cost production

Investments

in skill

Learning and

formation and

upgrading of CEE

personnel

or

\

IncreasinglabOill') force shortage,

Relocation to other ~ low-wage

wage mcreases, pressure to upgrade work

6

Conclusions

We ean summarise the results of the analysis in four eonelusions: (1) The integration of Central-Eastern Europe into the produetion networks of the Western European automobile industry has not led to a "hollowing out" in the West, at least not yet. A German-CEE produetion network has developed in whieh Germany is the major eomponent supplier for produetion sites in CEE eountries and the major reeipient of eomponents from this region. None other Western European automobile producing eountry has reoriented its eomponent imports so strongly towards Central-Eastern Europe as Germany. This reorientation has eonsiderably inereased the priee eompetitiveness of the German automobile firms. (2) There are different patterns of the division of labour between GermanIWestern European and Central-Eastern European loeations. We have presented the eases of a eomplementary division of labour at VW Commercial Vehieles and of a direet eompetition for produet alloeation between the engine plants of VW. In both eases, the upgrading proeesses in Central-Eastern Europe ehallenge the "high end - low end" division of labour between the West and the East whieh dominated in the

- 123 -

1990s - although there are still limits of upgrading in CEE countries in particular in the domain of R&D. Until the middle of the current decade, an important element of the division of labour between Germany and CEE countries was the fact that (in particular) complex components were still produced in the West and supplied to the Central Eastern European plants. However, a component supplier industry is developing in CEE countries and may substitute German products in the future. (3) We cannot confirm the thesis of a "regime flight" from Western European labour relations and work models. The commitment to employment protection is restricted to a smaller group of core employees than in Germany or Sweden, but nevertheless the German companies transfer the focus on a cooperative relationship with unions and on recruiting qualified ski lied workers, even establishing own vocational training systems to CEE countries. The upgrading process of Eastern European production sites and the increasing labour shortage support the emergence of "high road" work models in Central-Eastern Europe. (4) The prospects of such "high road" elements, however, are uncertain. There are limits to the upgrading of the CEE sites of the automobile companies, in particular with regard to product design or R&D. It is not c1ear if the CEE countries will manage to move upward the value chain and attract R&D-investments or if they will remain a pure production basis for transnational companies. Labour shortage and a brain drain caused by migration to the West can become obstacles to development in Central-Eastern

Europe. Relocation of production from CEE countries

abroad is still limited but can increase in the future.

7

List of references

Bluhm, K. (2001) "Exporting or Abandoning the German Model?: Labour Policies of German Manufacturing Firms in Central Europe" , European Journa/ of /ndustria/ Re/ations 7(2): 153-173. Bluhm, K. (2007) Experimentierte/d

Ostmitte/europa? Deutsche Unternehmen in

Polen und der Tschechischen Republik. Wiesbaden: VS Verlag. Crowley, S. & Ost, D. (eds.) (2001) Workers After Workers' States. Labor and Po/Wes in Postcommunist Europe, Lanham/Oxford: Rowman & Littlefield.

- 124 -

EIRO (2003) Industrial relations in the automotive sector, Dublin: European Foundation

for the Improvement

of Living and Working

Conditions,

http://www.eurofound.europa.eu/eiro/2003/12/study/tn0312101s.htm. Ellingstad, M. (1997) "The Maquiladora Syndrome: Central European Prospects", Europe-Asia Studies, 49(1): 7-21. Ernst

&

Young

(2004)

Automobilindustrie

Automobilstandort

Deutschland

in

Gefahr?

auf dem Weg nach Osteuropa und China. Frankfurt

am Main: Ernst & Young. European

Commission

(2006) Car Price Report 2005, Brussels:

European

Commission. Fichter, M., Frybes, M., Meardi, G., Marginson, P., Stanojevic, M. and Toth, A. (2005) "Varieties of multinationals. Embedding foreign investors in Central Europe" , Paper presented

at the GIRA Annual

Conference

in Trier,

October 12-13, 2005. Forster, C. (2004) "Standort Deutschland - Zustand und Perspektiven",

Rede

beim Neujahrsempfang der IHK Bochum, 29.1.2004. Gt6wny Urzqd Statystyczny (GUS) (2007) Informacja 0 rozmiarach i kierunkach emigracji z Polski w latach 2004-2006, Warszawa: GUS. Groht,

V.

(2005)

Warten

osteuropäischen

auf

den

Beitrittsländer:

Boom.

Direktinvestitionen

Wunschdenken

und

in

Fakten.

die

Berlin:

edition sigma. Gryglewski,

S. (2007)

Reformbedarf

"Sicherung

von

Produktionsarbeit

der arbeitsorganisatorischen

Arbeitswissenschaft

in Deutschland.

Leitbilder", in Zeitschrift für

61 (1): 47-53.

Hirt, O. (2007) "The Internationalisation and New International

of Design: New Organisations of Firms

Division of Labour", in La Lettre du GERPISA

(15)(196): 7-9. Horakova, M. (2006) Zahranicni pracovni migrace v Geske republice dva roky po vstupu GR do EU, Praha: VUPSV.

J.

Humphrey,

(1999)

Transformation brasilianischen Pries

der

(eds.)

(2005)

und

nationale

Die

Entwicklung.

Hersteller-Zulieferer-Beziehungen

und indischen Automobilindustrie",

Automobilindustrie, Intec.net

"Globalisierung

Globalisierungsspirale

in

Die der

in H. Kilper and L. in

der

deutschen

pp.151-190. München und Mering: Rainer Hampp.

Länderinformation

Slowakei,

industrieller Forschungsvereinigungen

- 125 -

Berlin:

Arbeitsgemeinschaft

"OUo von Gericke".

Janak, D. and Pavlinek P. (2007) "Regional Restructuring of the Skoda Auto Supplier

Network

in the Czech

Republic",

in European

Urban and

Regional Studies 14(2): 133-155. KPMG (2007) Migracja pracownik6w

- szansa czy zagrotenie?

Warszawa:

KPMG. Kurz, C. and Wittke,

V. (1998) "Using Industrial

Capacities

as a Way of

Integrating the Central and East European Economies", in J. Zysman, and A. Schwartz (eds.) Enlarging Europe: The Industrial Foundations of a New Political Reality, pp.63-95. San Francisco: University of California at Berkeley. Lung, Y. (2003) "The Changing Geography of the European Automobile System", Cahiers du GRES 2003(10). Meardi, G. and Toth, A. (2006) "Who is Hybridising What? Insights on MNCs' employment practices in Central Europe", in A. Ferner, J. Quintanillaand C.

Sanchez-Runde

Transnational

(eds.)

Practices:

Multinationals

Convergence

and

and

the

Construction

Diversity

of

in the Global

Economy. Basingstoke: Palgrave. Nunnenkamp, P. (2004) "The German Automobile Industry and Central Europe's Integration into the International Division of Labour: Foreign Production, Intra-Industry Trade, and Labour Market Repercussions", Este 2004:9,

available

in Papeles dei

at: www.ucm.es/bucm/cee/papeles.

download

18.6.2005. Ruigrok, W. and Van Tulder, R. (1998) "European Cross-National Networks

Production

in the Auto Industry: Eastern Europe as the Low End of

European Car Complex", in J. Zysman and A. Schwartz (eds.) Enlarging Europe: The Industrial Foundations of a New Political Reality, pp.202-237. San Francisco: University of California at Berkeley. Sinn, H.-W. (2004) "Basar-Ökonomie";

ifo Standpunkt

http://www.cesifo-group.de/portal/page/portal/ifo p?itemJink=stp050.htm,

Deutschland: Exportweltmeister

oder

Berlin: Econ.

Sturgeon, T. J. (1999) "Globalization Locational

Home/B-pol itik/05stp/ _st

download 17.4.2005.

Sinn, H.-W. (2005) Die Basar-Ökonomie. Schlusslicht?

Nr. 50, available at:

Typology",

Paper

and Jobs in the Automotive for

Colloquium, Paris, June 18-20, 1999.

- 126 -

the

GERPISA

Industry: A

Seventh

Annual

Tholen, J., Cziria, L., Hemmer, E., Kozek, W. and Mansfeldova, Direktinvestitionen

deutscher

Unternehmen

Z. (2006)

in Mittel- und Osteuropa.

München und Mering: Hampp. VOA (2007) Analysen zur Automobilkonjunktur

2005. Frankfurt/Main: VOA.

VOA (1990f) International Auto Statistics. Frankfurt/Main: VOA. VW(2006)Annua1R

- 127 -