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• W1569646746 abstract "Introduction and summary The General Motors (GM) strike during June and July 1998 showed the extent to which lean manufacturing production methods, such as efforts to keep inventories low and reduce the number of parts suppliers, have taken hold in the U.S. auto sector. As observers tried to assess the ramifications of this event, it became apparent that we know much more about the spatial structure of light vehicle assembly operations and Big Three (Ford, GM, and Chrysler) owned parts plants than of the large number of independent parts suppliers. In an environment of tightly linked supply chains, it is important to understand the spatial nature of these linkages. Such knowledge would help policymakers assess the economic impact of regional shocks, such as a strike. In addition, data on individual customer-supplier linkages would facilitate the study of the geographic extension of supplier networks and offer new evidence on the ability of economic development efforts to attract suppliers to locate in the same state as a large assembly facility. Lean manufacturing was pioneered by Toyota Motor Company in Japan during the 1950s. It has since become the standard for many manufacturing companies in Japan and around the world. This production system tries to improve on the types of mass production systems that have been prominent in the postwar period. Instead of organizing production according to a preset schedule, it operates on the premise of a so-called pull system, whereby the flow of materials and products through the various stages of production is triggered by the customer. In addition, the production process itself is subject to continuous improvement efforts. The 1998 strike at two GM-owned parts plants in Flint, Michigan, was about issues related to production rates and health and safety. Strategically, however, it centered on issues pertinent to the implementation of new production methods - more efficient production processes that would reduce the demand for labor in the assembly plant and efforts by the assembly company to outsource more of the production of parts. The strike quickly shut down most of GM's North American assembly operation. In turn, it caused production adjustments at many of the company's independent suppliers. In this article, I examine the spatial structure of the auto supplier industry and how firms in different locations interact. First, I document the extent to which plants are concentrated geographically, that is, the degree of spatial agglomeration, in the U.S. auto supplier industry. My analysis is based on information on the location of over 3,000 auto supplier plants. I find that the auto supplier industry is concentrated in five states - Indiana, Kentucky, Michigan, Ohio, and Tennessee - that constitute the so-called auto corridor, which is defined by interstate highways 65 and 75, extending south from Michigan to Tennessee. These states are home to 58 percent of the plants in the study. A closer analysis of plant locations reveals the importance of access to highway transportation to ensure timely delivery of production to customers. I find that having suppliers located in the immediate vicinity of the assembly plant is not necessary to maintain a system of tight linkages and low inventories. Comparing the spatial structure of individual assembly networks, I find them to be remarkably similar. The geographic concentration is highest for assembly plants that are located near the heart of the auto corridor, with between 70 percent and 80 percent of supplier plants located within a day's drive of the assembly plant. This suggests a clustering of economic activity at the regional rather than local level. Second, I investigate the changing nature of the geographic concentration of this industry over time. This analysis is limited by the cross-sectional nature of the data. However, there are a few cases in which the data allow a comparison of supplier networks of different vintages. …" @default.
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• W1569646746 title "Agglomeration in the U.S. Auto Supplier Industry" @default.
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