Restructuring interplant divisions of labor and local subcontracting linkages: A case study of a Japanese TV manufacturer

Abstract

During the last decade, the globalization of Japanese electronics industries has brought about a structural transformation of corporate spatial divisions of labor in Japan. In the literature related to corporate spatial divisions of labor, especially on the relationship between large plants and subcontractors, there are few sufficiently sophisticated studies. Moreover, in relation to the impact of external ownership on regional development, recent studies suggest that it is necessary to link corporate locational networks with localized subcontracting linkages, but no previous study were based on that perspective. The purpose of this paper is to analyze the structural changes in the corporate spatial divisions of labor in Japan from the locational behavioral perspective and to elucidate the formation process and the restructuring process of localized subcontracting linkages from the viewpoint of supplier relationships. The case study draws on the TV manufacturing division of Matsushita Electric, which has the largest TV market share and has plants in many countries including Japan. The two plants investigated in this study are located in Osaka Prefecture (the Ibaraki plant) and Tochigi Prefecture (the Utsunomiya plant). The following points were clarified in this study. A comparative analysis between the Ibaraki plant and the Utsunomiya plant revealed that the two plants were functionally divided into a core plant and a branch plant. From a managerial viewpoint, the management function of supplier relations has been centralized at the Ibaraki plant. The subcontracting relationships have thus been organized at each plant. This investigation confirmed that significant changes including a decrease in TV production were affecting localized subcontracting linkages. Matsushita selects its subcontractors to cut production costs, and thus they have been restructured and the regional scale of its linkages has been expanded as a result. The evidence in this paper leads to the conclusion that interplants divisions of labor and localized subcontracting linkages have a close relation with the restructuring process accompanied by decreasing domestic TV production and the globalizing process.