Motorizacin y Relaciones de Empleo en la IA de las Americas: Un Modelo para Anticipar su Futuro

Late motorization and Status Quo of the Mexican Auto Industry: Prospects and tendenciesAlex Covarrubias VEl Colegio de SonoraCenter of Studies on North America

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Objectives

Define late motorization in terms of tipping points contagious conditions that outline the present era of new mobilities, crisis & shift to a Second Automobile Revolution, and some its key ensuing transitions.Link automobility theory and Second Automobile Revolutions premises to opening a new window to discuss contemporary changes in the auto-sector: Illustrate: The Mexican auto industry as a key case at point. Outline employment systems and labor relations implications, stressing unions challenges.2AgendaPreliminary conceptsTipping Points- Starters (Going LDCs; Urban Planet; Going Back and Forth)- Consequential (a new geography of labor & wage relations)Conclusions

3I. PreliminaryConcepts & Premises4The meaning of Late Motorization LDCs arrival at mobility patterns, industrial and urban transitions brought about by their new position as the largest centers of production and consumption of private cars as Triad countries markets and environments exhaust.LM means: a) The last/current evolutions of the AI; b) the likely last development of the AI as we know it; c) a number of critical points announcing the end of an era. A critical scholar task: identify the tipping points & starting conditions (Gladwell, 2000).

5The meaning of Late Motorization LDCs turn into the last resource for CMCS + OIE + SC to surviveEntails social dilemmas; local & global conflicts assessing the cost of the AI & the CMCSMore than a Second Auto Revolution is underway. It is in the making a new CMCS encompassing new connection, habitat & energy systems It will be something After the CarA critical scholar task: identify the tipping points & starting conditions

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Automobility/Sprawl city theories:

AI: The quintessential manufacture produced by the leading firms & sectors in the 20th Century/A labor relations pattern setter.The major item of individual consumption (after housing?)/status provider/crime provider: theft, speeding, drunk driving, gender, etc.A powerful mechanic complex linked to many industries: oil and energy; road-building; hotels, roadside service areas, dealers & repairs workshops, house building, suburbs, retailing and leisure complexes, marketing, urban design, etc.7

Automobility/Sprawl city theories:

The dominant mode of private-mobility/subordinating other modes and reorganizing people time and space for work, family, leisure & pleasure.The dominant culture of what development means.The single most important cause of resource depletion, greenhouse emissions & a leading cause of accidents, mortality and c&d diseases. Sprawl city as a key process modifying the urban/rural landscapes: expansion, fragmentation, resource depletion & density declining.

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Grasping the key Dimensions of LM

Evaluate and asses the T-Sides: Benefits + Costs-Economic from both sides i.e., O & D- Social/Cultural- Environmental/Energy- Urban/QL - Labor/LS 9

Starters/Tipping Points

II10Tipping Point 1Going to LDCs11Auto Output (1950-2012)Source: Covarrubias/Reyna. Data from Organisation Internationale des Constructeurs d'Automobiles (2012) y Ward's Automotive Group (2013).12

Global Auto OutputDCs Vs LDCsMillion Units LDCs DCs Source: SE: Mexico, 201213

14Global 2017 ForecatsAuto output: 104 millionEmerging markets will contribute 83% to 2010-2017 growth.15Tipping Point 2The New Urban Planet16The Urban Planet At the end of 1990s world population was growing by 900 million per decade (a new London per month).At the end of XX century world population passed 6 billion and will reach to 9.1by 2050.In May 23, 2007 it took place the transition day: the urban worlds population numbered more than half of the total (3.2 billion).17& the UP will be emergentBy 2030 60% of the world population will be urban (UN)Most of the growth is & will be in LDCs through a myriad of megacities with rising car fleets, accidents, air pollution, energy consumption, & resource depletion. Five million more people every month live in cities of LDCs (Glaeser, 2012).18Indices de MotorizacinProyecciones % de Crecimiento2010-2020South Asia, including India393Centrally Planned economies, including China354Asian rets183East Europe158Latin America81West Europe21Japan, New Zealand & Australia9USA/Canada2.5Motorization Index.Growth Projections %Source: Lizarraga M, 200619Tipping Point 3Mexico on the rise/The Alluring of Mexico20

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Mexico 2012 Output by OEM22Key Features8 producer after China, USA, Japan, Germany, Korea, India and Brazil.4 major exporter after Germany, Japan & Korea71% of exports go to NAFTAContribute one fifth of manufacturing jobs

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PIB BillionJobs ThousandsManufacturingAutoManufacturingAuto24

EmploymentDealers Parts & Components Auto Manuf 25Rising from hell & Going South:Labor as a key determinantIII26

27Auto Industry. Employment Selected Categories

28North American Auto Industry to Hell and Back

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: KLIER & RUBENSTEIN, 2012.33

Redesigned Ford Fiesta in Cuautitlan

Engine plant II ChihuahuaTransmission plant IrapuatoCactus project and a new transmission plant, San Luis PotosiNew engine and transmission plant, Ramos Arizpe.New transmission plant, Silao

Test track for high temperature, Cupuan del RioEngine plant Centenary in DerramaderoNew Engine plant, Silao

Production of Nissan Micra, Aguscalientes

New engine plant in SilaoAutomotive Modeling Center, MexicaliMexican Auto Industry From 2008 OnNew Engine, Transmissions and Center Facilities.34

New Ford Fiesta In Cuautitlan Cactus Project T250-Aveo, San Luis Potosi

Nissan Micra-March, Aguascalientes

Project CD3 Hybrid Fusion and Mercury 2010, Hermosillo

Hybrid Captiva SUV New Platform For a New Model , Ramos Arizpe

Sub-Compact Fiat 500 Premium, Toluca

Jetta 6th Generation "Special Bicentennial Edition., Puebla

Honda CR-V 'Crossover', El Salto

Mexican Auto Industry From 2008 OnFinished Vehicles New ProjetsProject CD4 Fusion Mondeo Convergency 2013, Hermosillo

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SOURCE : KLIER & RUBENSTEIN, 2012.36

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40Automotive labour costsAt actual exchange rateAt PPP exchange rateAs proportion of all manufacturing workers (%)Hourly compensation costs (US$, 2007)Share of US level (%)Hourly compensation costs (US$, 2007)Share of US level (%)Western hemisphereUSA33.2310033.23100131Canada40.3812235.82108139Mexico3.95125.7417135Brazil11.363415.7948191Western EuropeGermany52.2215744.47134135France32.899926.3479115Spain28.488628.0284136UK35.7910827.6683119Italy28.788724.6474102Belgium41.6912534.12103118Austria38.9611732.3897110Eastern EuropeCzech Republic *11.533516.6450119Hungary8.952712.3037136Poland7.732311.3034124AsiaJapan **25.427624.9375106Korea21.106326.1479132Taiwan7.482312.7338114Australia31.759626.5680105Standar deviation14.2510.12Source: Author's calculations from Bureau of Labor Statistics (2009), OECD (2009b) and World Bank (2007).* Compensation for all employees (not just production workers).** Estimate based on 2005 data (latest published) escalated by growth of total manufacturing hourly compensation cost between 2005and 2007. Excludes profit-sharing bonuses that can add US$10 per hour to total compensation.41IVA critical consequence as related tipping point:- A new geography of labor & wage relations42

Towards a global race to the bottom?Or towards a new map between high & low wages regions

AIEmployment Relations43

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46VA different path for MexicoIs it possible a high road strategy?47

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Production & Labor Costs ProjectionsA Model in Progress

The Future?56Sources: Covarrubias, Torres & Cirett (2013), Production/Labor Cost Regression Model. With data from ILO & OICA.

AI Hourly compensation costs 2050 ProjectionsAMERICA

57Sources: Covarrubias, Torres & Cirett (2013), Production/Labor Cost Regression Model. With data from ILO & OICA.

AI Hourly compensation costs 2050 ProjectionsW Europe

58Sources: Covarrubias, Torres & Cirett (2013), Production/Labor Cost Regression Model. With data from ILO & OICA.

AI Hourly compensation costs 2050 ProjectionsE Europe

59Sources: Covarrubias, Torres & Cirett (2013), Production/Labor Cost Regression Model. With data from ILO & OICA.

AI Hourly compensation costs 2050 ProjectionsAll Regions

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