Cooperative strategies in iron and steel: Motives and results

G Rosegger

Omega, 1992, vol. 20, issue 4, 417-430

Abstract: During the past quarter-century, the American iron and steel industry has undergone far-reaching structural changes. Until the mid-1980s the established, integrated producers responded to these changes with essentially defensive measures. Then they began to embark on a radically new strategy--the establishment of joint ventures with foreign, especially Japanese, competitors. So far, these ventures have been concentrated in the production of flat-rolled, galvanized steels, for which the automotive industry is the main customer. American firms were motivated mainly by the belated recognition of a technology gap and by the prospect of infusions of capital from their partners. The Japanese producers saw in strategic partnering a hedge against protectionism and an opportunity to supply the growing coated-products market, which included increasing numbers of Japanese "transplant" automobile manufacturers. While it is too early to assess the implications of these moves in terms of the steel industry's potential globalization, it seems clear that the joint ventures have upgraded domestic firms' technological and managerial capabilities, as well as providing customer industries with improved products. For policy-makers, they have raised questions about the meaning of "the national interest" as a justification for protecting an industry like iron and steel.

Keywords: steel; industry; joint; ventures; technology; transfer; business; strategy (search for similar items in EconPapers)
Date: 1992
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