Toward a More Embedded Production System? Automotive Supply Networks and Localized Capabilities in Poland

Abstract

The article addresses the embeddedness of automotive production in Poland in terms of supply networks. A comprehensive analysis of more than 550 suppliers, supported by company interviews, shows that foreign-owned producers become embedded in Poland in the automotive supplier networks they have largely created themselves. Numerous local suppliers gain access to export markets and become integrated in a Europe-wide production system. This trend has been accompanied by significant upgrading of foreign affiliates and domestic firms in terms of product quality, cost efficiency, adaptability, and fast response, but far less in nonproduction competences such as R&D. It is argued that the competences of automotive suppliers in Poland are built upon the localized capabilities, which are a product of the dynamic interplay between the activity of foreign firms and the changing local environment comprising various stakeholders. The localized capabilities constitute elements of a company's sunk costs and are embedding automotive producers in Poland. At the same time, the dependence on decisions and innovations from abroad and the limited development of local design and brands may constrain the future role of suppliers from the semiperipheral economy of Poland. Copyright (c) 2009 Copyright the Authors. Journal compilation (c) 2009 Wiley Periodicals, Inc..

Upgrading Local Economies in Central and Eastern Europe? The Role of Business Service Foreign Direct Investment in the Knowledge Economy

“…Domański (2004) observes that a growing number of foreign manufacturing companies have become more embedded in Polish regions and localities, while simultaneously integrating with the global economy', as a result of some subsidiaries being transformed into 'performance' or 'quality' manufacturing plants. Recent research evidence from the CEE automotive industry points to its increasing embeddedness within the region (Domański and Gwosdz, 2009;Jürgens and Krzywdzinski, 2009). It could be also argued that the recent investments by TNCs offering outsourced or offshored business services are transforming the local milieu.…”

Upper Silesia: The revival of a traditional industrial region in Poland

“…The relatively high development level, high wages and organised labour of Upper Silesia makes it less vulnerable to the lock-in of low value-added specialisation; and through industrial upgrading, it can weaken the centre-periphery relationships of FDI-dominated industrial development. These relatively high-road strategies also carry some risks: the delocalisation of cost-sensitive manufacturing activities may develop into a more serious issue over time (Domański-Gwosdz 2009, Domański-Lung 2009, Gwosdz-Micek 2010, Domanski et al 2013.…”

Spatial agglomerations in the Polish automotive industry = Skupienia przemysłu motoryzacyjnego w Polsce

“…It has evolved from an isolated and peripheral position to being a market highly integrated with the European and global production network (see Domański and Gwosdz, 2009;Winter, 2008). The main driver of change has been the activity of the Trans-National Corporations (TNCs).…”

“…An extensive study on car parts manufacturers in Poland (Domański et al, 2006Domański and Gwosdz, 2009) revealed that the importance of location and distance between customers and suppliers depends on several factors. The most important are: position of the company within the supply chain, involvement in JIT or ILS supply modes, value added in production and profitability of production.…”