Japanese Multinationals in the United States: Case Studies

Japanese Multinationals in the United States: Case Studies

Japanese Multinationals in the United States: Case Studies

Japanese Multinationals in the United States: Case Studies

Synopsis

This study focuses on the management/labor interface within the context of the foreign direct investor in the United States, eespecially the Japanese. Utilizing case studies and interviews, the author examines both the effects of Japanese multinationals on U.S. workers' interests, and the effects of the U.S. work environment on Japanese multinationals. Three basic questions permeated the research: How do labor and management considerations come together as key strategic and operating decisions are made and implemented by Japanese multinationals in the United States? How do Japanese experiences compare to the experiences of other foreign-owned and domestic firms? What do these experiences portend regarding U.S. labor's interests in jobs, income, unionization, etc., Japanese firms' interests in being able to compete successfully in the U.S. market, and the U.S. national interest in promoting employment, expanding incomes, competitive markets, and so forth? Findings in both regards are compared to similar effects at other foreign, non-Japanese multinationals and at U.S.-owned firms in similar industries.

Excerpt

A foreign firm's decision whether or not to produce in the United States involves more than just yes or no. There is a motivation for the decision, and expectations about the efficacy of the decision. Concurrent with the decision to invest, decisions on ownership level and entry form are also made, as are decisions on the product to be produced and, quite likely, the production technology to be employed. These, in turn, lead to yet other decisions, some of which may be made early-on. This section only looks at investment motivation, ownership level and entry form. The other topics will be covered later. Specifically, the relevant issues or questions are: Why did the parent-company invest in manufacturing in the United States at all? What were the major determinants regarding the parent-company's ownership strategy and entry form? The industrial relations dimensions of these questions are several and relate to investors' appraisals and opinions on unions and the availability and quality of the local workforce. The analysis returns to these points at the end of this section.

The Investment Rationale

Five of the nine Japanese firms served the U.S. market with exports prior to direct investment. In three of these cases, high tariffs or the threat of increased tariffs, or other restraints on the level of exports from Japan were cited as influencing the investment decision. There were, however, other influences, too.

Fujitsu Microelectronics felt there was a threat of increased tariffs or other trade constraints on its semiconductor exports to the United States and acknowledged that this was a factor in its investment decision. More importantly, however, it felt U.S. production was necessary if it . . .

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