industry than they are in semiconductors or consumer electronics that the transplants are moving in the direction of greater vertical integration and increased technical activity in their U.S. operations. 59

But doubts remain about how far and how fast technology transfer from transplants to the Big Three will proceed. Technology transfer from Japan to the United States may be indispensable for the transplants to enjoy the same manufacturing edge that Japanese companies do at home.60 Whether or not “soft technology” is transferred from Japanese to U.S.-owned organizations and the impact of this technology transfer on the competitiveness of the domestic industry may depend to a great extent on whether U.S. companies — managers, unions, and suppliers — are flexible enough to change traditional relationships.


In addition to the reports on Nissan and Toyota's plans to build engines in the United States cited above, Honda plans to increase the amount of R&D it does in the United States See “Honda Giken: Bei no Kenkyu Kaihatsu Taisei o Kyoka” (Honda: Strengthening Its U.S. R&D Organization), Nihon Keizai Shimbun, September 10, 1990, p. 9.


Robert Lawrence, from his presentation on “Overviews” at the Workshop on Japanese Investment and Technology Transfer: An Exploration of Its Impact.

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