services-based, information society, Gyllenhammar responds that the manufacturing industry is adapting to today’s environment. One of the most influential changes has been the new technologies employed in the automotive sector, including new engineering materials, computer-aided design, robots, and microcomputers. These new technologies mean that decision making can become decentralized and that small-scale manufacturing can be cost-effective. Another important factor changing the manufacturing industry has been new demands from employees and customers, what Gyllenhammar refers to as the invisible contract between them and the corporation. In fact, the new technologies have brought about important changes in the way work is organized. Less desirable tasks have been taken over by robots; light, flexible technologies allow workers to organize themselves so that they command the technology instead of vice versa; and new materials-handling mechanisms permit the layout of equipment to fit particular work organizations. The challenge for managers lies in organizing production so that they can develop their workers through both technical and leadership training. To accomplish this goal, it will be necessary for the manufacturing industry to take a longer term perspective and use “patient capital” rather than striving for a quick return on investment. Gyllenhammar concludes that a viable manufacturing industry is necessary but not sufficient to solve the problems of unemployment and slow growth.

The manufacturing industry is also the subject of the paper by Emilio Carrillo Gamboa; however, he discusses the issue of production sharing as both a result and a means of globalizing industry. By moving production facilities abroad to low-wage developing countries, firms manufacturing products that have entered the downside of the product cycle can maintain a competitive cost advantage. Mexico, in particular, has become an important production-sharing partner for the United States because of proximity, demographic factors, and the Mexican economic crisis which has resulted in lower wage levels that are competitive with labor costs in the developing countries of Asia and government programs that support production-sharing.

The maquiladoras, or production sharing sites, have been the subject of debate in Mexico for a number of reasons: the benefits of foreign-owned assembly services are not extended to the rest of the economy, the maquiladoras do not absorb traditional unemployment, and they are too vulnerable to swings in the U.S. economy. In addition, some of the plants have been criticized for their poor working conditions. Nevertheless, the author contends that they are an important source of income, employment, and foreign exchange, and proposes that the production sharing offers significant economic opportunities if the competitive advantages of Mexico as a production-sharing site are improved and assembly activities are more closely linked with the domestic economy. Carrillo Gamboa acknowledges the objections to offshore production sharing but suggests that its economic and political advantages far outweigh the disadvantages.



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