I can’t claim authoritative knowledge of the economic theories of globalisation, but I would think automotive manufacturing is a good example of their practical application. Vehicle platforms, production processes and technologies that are transferable on a worldwide scale have long been a major driver in the development of new models and manufacturing facilities.
The arguments in favour of this approach are strong, in theory at least. Scales of economy, common vehicle platforms and production systems can reduce costs in materials, components, production technology and training via a simple, globally functional ‘blueprint’.
But creating such a blueprint is no easy task, as a couple of things highlighted to me recently. The first was Jeffrey Rothfeder’s book, Driving Honda, in which he essentially explains the OEM's carmaking philosophy; second came recent reports that VW has been having issues with its much-vaunted MQB platform.
OEMs rarely air their problems in public, so it was a surprise to hear that all was not well at Wolfsburg, with a line worker reportedly claiming that serious issues were arising from the sheer complexity of the MQB process. Any idea that this was a disgruntled employee looking to embarrass VW vanished with the swift exit of Michael Macht as leader of Group Production. Coincidence? Or proof that producing a global platform is far from simple?
Presumably any problems VW might be experiencing with its MQB platform are being exacerbated by the company’s drive to increase production volumes; mass production and innovation are a notoriously difficult mix. That said, it is certain that VW will resolve these issues (big or small) as this direction of model development – which is being followed by all OEMs to some degree – promises benefits that outweigh the difficulties.
But globalised vehicle production requires more than just a common platform. Establishing effective and profitable manufacturing operations in locations outside an OEM’s home country no longer means simply transplanting factories and processes; it requires localisation and in-country sourcing – which necessitates the navigation of economic, political and cultural obstacles.
A successful example of this can be found in the aforementioned book, in which Rothfeder details the development of Honda’s production within the US, revealing that a collaborative approach – more so than that adopted by other OEMs (even the domestic ones) – seems to have produced very positive results, not just for Honda but also for its suppliers.
Honda’s progress was far from easy, but the success of its approach certainly seems to advocate localisation as a strong basis for globalisation.