The significance of production cost inputs in regional technology choice : composite automotive body-in-whites in the US versus China
Author(s)Fuchs, Erica R. H. (Erica Renee H.), 1977-
Massachusetts Institute of Technology. Technology and Policy Program.
Randolph E. Kirchain, Richard Roth and Joel P. Clark.
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Nations seek to influence the technology decisions of multi national firms producing within their borders for many reasons. These reasons range from a nation's desires to maximize its competitiveness in the global marketplace to a nation's desire to improve the social welfare of its citizens. Alone by understanding the forces driving multinationals decisions, can nations develop means to impact those decisions. Market supply, market demand, individual interests, group interests and government policy all affect the technological decisions of firms' managers and engineers. This work models the cost of automotive body in-white production in the United States versus the People's Republic of China. Three body-in-white materials are evaluated for each country: carbon-reinforced composites, glass-reinforced composites, and steel. Based on the results, insights are sought on the significance of production costs versus other factors in driving the extent of composite body-in-white vehicle production in China versus in the U.S. Composite body-in-whites are, according to the results of this thesis, produced less frequently in both the U.S. and China than would optimize manufacturing costs. Composites have a production cost advantage over steel for more U.S. scenarios; however,interest in composite body-in-whites is greater in China. Several qualities of the Chinese market help explain this dichotomy between production cost implications and in-country actions. Concerns of part tolerances, surface appearance, worker safety during processing, and· legal ramifications of non-conventional crash mechanisms do not hold the same weight in China as they do in the U.S. Greenfield investment opportunities are many in China, and China is known for a willingness to experiment. In contrast, the U.S. auto industry is plagued with embedded capital costs and powerful stakeholders in association with steel. The interests of firms, nations, and individuals do not always overlap. The results of this thesis, however, suggest that it would be in the interest of all for greater investment to be made in composite body-in-white production in the U.S., and for experimentation in composite body-in-white production to continue to be encouraged in China.
Thesis (S.M.)--Massachusetts Institute of Technology, Engineering Systems Division, Technology and Policy Program, 2003.Includes bibliographical references (p. 168-176).
DepartmentMassachusetts Institute of Technology. Technology and Policy Program.
Massachusetts Institute of Technology
Technology and Policy Program.