Emerging Strategies and Forms of Governance in High-Wage Component Manufacturing Regions

This paper provides a broad survey of the current terrain of components production in the high-wage regions of North America and Europe. Its central message is that it is unwise to believe in the unitary characterizations of the development of relations between original equipment manufacturers (OEMs) and suppliers in contemporary manufacturing. The character of the current environment aligns strategies among all parties such that heterogeneity in relations between customers and suppliers is systematically reproduced. Four broad types of strategy are shown to be both currently possible and pursued in the current market. But there is a considerable amount of hedging as well as hybridity observable among component producer strategies. In a similar way, the range of governance mechanisms currently being developed and deployed among producers in the sector is quite broad. The same problem is being addressed by a multiple of alternative institutional arrangements. Mechanisms can be either public or private, or both, and formal or informal. They can also be corporate, associational, consortial, and market-based.