The impact of a US-Europe free trade agreement on auto supply chains

An article in the New York Times (March 7, 2013) describes the possible impact of a US-Europe free trade agreement on automobile production. Executives at BMW and Mercedes claim that they would manufacture cars in the US and ship them back to Europe to reduce their costs, by eliminating the current 10% tariff on imprts into Europe. Others, like Fiat, expect to ship Alfa Romeo cars to the US. But the main impact will be the standardization of crash testing and other standards which will permit part commonality across the designs for the two regions. Given the greater flexibility of US employment and other rules, will the auto supply chains increase production, and thus employment in the US at the expense of Europe ? Will design locations move to Europe leaving production in the US or will these vary by company ? Will the results for autos be very different from the impact for other industries, such as pharmaceuticals ?

Advertisements

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s