Transnational transfer of lean production to a dependent market economy: The case of a French-owned subsidiary in Romania

Introduction

Since the early 2000s, increasing liberalization in Romania (Ban, 2016; Bohle and Greskovits, 2007; Petrovici, 2011) has been accompanied by significant transnational investment, mainly in the form of services outsourcing and manufacture offshoring. Under these circumstances, the newly created industrial sector embraced an export-oriented assembly profile with low-technological complexity, requiring mostly unskilled labour. Furthermore, after successive legislative changes aimed at creating a desirable destination for transnational investments, the bargaining power of Romania’s workforce was significantly weakened, fracturing cohesion and effectively reducing union representation. As other authors note (Ferner et al., 2006; Kochan and Lansbury, 1997), the influence of such national economic landscapes via specific institutions and local practices is a crucial factor in forging shop floor work relations.

This article presents ethnographic research on a greenfield Romanian subsidiary producing plastic dashboards for various well-known automobile manufacturers. Products are shipped to multiple clients based on just-in-time (JIT) principles, with reduced local vertical integration. The subsidiary, established in north-western Romania in 2007, received a steady transfer of work practices as productive capacities increased, following the example of the MNC’s other offshore facilities. Management adopted a home-country imposed, seemingly textbook, lean production approach driven by flexibility requirements and client-oriented responsibility, and characterized by continuous improvement and quality control. Stressing the importance and uniqueness of products, management presented lean production as necessary for competitiveness. In theory, the high labour market flexibility that followed recent legislative reforms is ideal for flexible work systems such as lean production. In practice, however, the data show a different picture: lean principles created frequent employee conflicts, stressful interactions and health issues.

Lean production techniques have been a managerial prescription for over three decades, starting from early advocates such as Womack et al. (1990). While certain authors depicted limited initial impact (Wood, 1991), its proponents were correct in assuming the eventual widespread adoption of lean principles. Geographically, American, Western European and Scandinavian countries have long adopted different versions of lean production (Durand et al., 1999). In Europe, the introduction of lean production has been analysed in most western countries, such as France (Durand and Hatzfeld, 2003), the United Kingdom (Carter et al., 2012; Stewart et al., 2009) and Sweden (Vanje and Brannmark, 2015). Central and Eastern European (CEE) countries lack such extensive accounts with the rare exceptions of Hungary (Havas, 1995) and Poland (Meardi and Tóth, 2006; Stewart et al., 2016). Hungary is characterized not only by growing levels of foreign direct investment (FDI) but also by fluctuating technological transfers, legislative deregulation and low rates of unionization (Jürgens and Krzywdzinski, 2009), which tend to favour the implementation of lean production.

In Romania, where state research and development investment are close to zero and the rate of unionization is 20 percent (mainly due to high representation rates in the public sector), lean-related studies are absent. In redress, this article seeks to answer calls for more ‘sub-national’ studies of the CEE automotive industry (Adăscăliței and Guga, 2020), underlining the intricacies of existing productive models (Boyer and Freyssenet, 2002).

Operating at the ‘micro-organizational level’ of MNC transfers (Ferner et al., 2006), the data retroactively present the progression of work relations over a 10-year period (2007–2017). While the case study factory’s idiosyncrasies and small size are evident, the highlighted productive model reflects the practices adopted in the Dacia-Renault plant, Romania’s largest automobile exporter. Both companies tap into low-cost, flexible labour and practice quality-driven production, with the aim of exporting to Western markets. However, unlike the national context, Dacia-Renault boasts an active union (largely negating any national economic advantages) and has a significant level of research and development, operating independently from headquarters. As a second-tier supplier in the global automobile supply chain, the studied case favours a centralized model, strictly coordinated by headquarters and lacking research and development capabilities (Pardi, 2019). While this suggests more favourable circumstances for the transfer of lean management, the findings reveal tensions in the transfer process. Dependent economic profiles based on low-cost labour and low-complexity production profit strategies, situated in a context of declining union representation and lack of viable job alternatives, create the conditions which underlie work crises and reduced employee motivation.

Lean production and the dynamics of MNCs transfer strategies

The hallmark of New Management Techniques (NMTs), lean production originated in the Japanese automobile industry. The multiple components encapsulated in its repertoire can be separated into external (inter-firm relations) and internal levels, with JIT production influencing both. In post-Fordist productive geographies, inter-firm relations structured by JIT emphasize trust-based supplier–client interactions and follow market share: small and medium enterprises (SMEs) satisfy the demands of larger companies, forming a cluster of interdependent plants. Similarly, buyer–supplier affiliations changed from Fordist multi-sourcing strategies entailing competition between various suppliers to collaborative trust-based relations between companies sharing similar supply chains. Lower tiered links in the chain are excluded from participating in product design, respecting client guidelines.

While risks resulting from market fluctuation are unequally shared between firms in favour of larger enterprises (Turnbull, 1988), business-related information (technological innovation, quality standards and planning activities) is exchanged between firms in order to improve production. Among these exchanges, specific production process layouts and manufacturing philosophies are also present, passed down the global chain by core manufacturers (Roper et al., 1997).

The implementation of practices from the country of origin can differ in subsidiaries either due to local differences or, as Ferner et al. (2006) argue, the outcome of interactions between parent and host countries’ national business systems. As elaborated by Boyer and Freyssenet (2002), company profit strategies converge in productive models encompassing different product policies, organization of production and national employment relations. Product policies are determined by the viability of products in various markets, while the organization of production embraces the specific mode of manufacturing. Both are determined by host-country labour market characteristics.

Certain features (corporate culture and work organization) tend to be identical in host countries, while industrial relations are adapted to specific regulatory frameworks (Meardi et al., 2009). As is often the case, while home country regulations tend to be strict, subsidiaries are placed in deregulated contexts, such as those currently in CEE. MNCs thus adapt managerial and productive practices to flexibility requirements, often transferring labour-intensive processes to host-country facilities while also delegating managerial autonomy to these sites. For example, the attempted transfer of MNC practices to Hungary encountered a local context characterized by workforce specialization, reminiscent of socialism. In Poland, the hybridization of lean components (simplification of hierarchy and teamwork) along with the steady automation of production contributed to successful transfer (Meardi and Tóth, 2006).

Lean production aims at a specific type of cost-cutting, flexibility-driven productive organization that encompasses three main elements bound together by a core principle: teamwork. First, workplace organization standards summarized under the ‘5S’ (sort, set in order, shine, standardize and sustain) umbrella are considered essential for adapting to changing production needs, thus achieving flexibility. Second, customer-oriented demand in production is prioritized under the JIT component. Departing from the ideal of completing and delivering products only when needed, JIT’s primary goal is to eliminate waste (muda) via reduced or even ‘stockless’ inventory (Bratton, 1991). It relies on a strict scheduling system termed kanban, which also has two desired effects: to reduce workload by manufacturing only necessary quantities and to motivate employees via direct responsibility towards known clients. The third aspect is continuous improvement or ‘continuous learning’ (referred to as kaizen), destined to achieve enhanced product quality (practical versions are known as Total Quality Management or Total Productive Maintenance) via personal performance and teamwork. In practice, kaizen directives rely on employee self-inspection and active cooperation between team members with the objective of solving quality-related issues. Teamwork and employee empowerment are further evidenced by two secondary elements: andon, a highly visible visual indicator of quality problems, and jidoka, a procedure that permits employees to stop production and resolve errors as they occur during the production process. Elements concerning teamwork, increased worker participation and empowerment are relayed and justified through ‘team meetings, job rotation, the promise of skill development and efforts to achieve a more humane work environment’ (Huxley, 2015: 136).

Several studies find that while certain lean elements can be beneficial, others tend to have a negative impact. For instance, Conti et al. (2006) depict the positive influence of worker inclusion in decision making and teamwork while noting, in contrast, the negative impact of work intensification. Others (Cullinane et al., 2013; Hassle et al., 2012) present similarly ambiguous results. The shortcomings of lean production are attributed to management’s faulty implementation, partial implementation or omission of key aspects (Huo and Boxall, 2018). Task complexity is also considered a culprit. For example, Schouteten and Benders (2004) argue that low-complexity tasks can reduce employee autonomy.

While described as beneficial, lean components can in turn also entail constant vigilance, strict productive quotas and unpredictable work hours. Accordingly, numerous reports document lean manufacturing’s many shortcomings (Harley, 1999) describing it as ‘a new and very strict regime of subordination’ (Berggren, 1993: 175). Critical perspectives mainly converge on one point: the stark difference between management rhetoric and practical implementation. As Stewart and Garrahan (1995) show, NMT’s ability to improve work experience can be minimal, boiling down to discursive over-inflation of lean manufacturing’s positive aspects. Even if the central feature in their cases, teamwork, showed promise, this was largely due to past perceptions of ‘gang-work’. Furthermore, in seeking to test lean production’s negation of bureaucratic control, Webb (1996) evaluates the impact of certain lean elements and not only concludes that it renews ‘managerial ideology’ but also finds that it leads to work intensification and job loss. More recently, Stewart et al. (2016) analysed the lean ideology and its promised improvements to production. First, the agreeable assumption that ‘social control and subordination is axiomatic to it [lean production]’ (p. 3) supplants incorrect implementation arguments. Apart from the well-known increase in physical and mental requirements for the workers involved, the authors trace discursive effects via their term ‘continuous rationalization’ and conclude that there is minimal to no relation between ‘rhetoric’ and ‘claims’, a fact signalling the contradictory nature of lean techniques. In general, notable accounts seem to converge on one aspect: lean implementation upsets the existing work environment and ultimately intensifies work in pursuit of reducing production variability. Arguably, stressful work for longer hours is a crucial indicator of lack of employee well-being, a fact that critical perspectives point out eloquently, while less condemnatory studies address such shortcomings with questionable success.

Romania’s dependent market economy

After successive attempts to attenuate the shock of transition from state capitalism to a global market economy during the 1990s, Romania’s governing parties eventually caved under World Bank and IMF pressure and, in the early 2000s, accepted the proposed liberalization initiatives. The country’s liberal establishment took advantage of its socialist past to instil an even more radical version of the neoliberal agenda. Namely, the anti-communist discourse morally legitimized liberal policies while downplaying social policies. Furthermore, the anti-communist discourse also impacted the Romanian workforce. Attempts to annul values associated with worker solidarity were placed in the same logic of communism versus democracy. The main goal was to increase employee subordination, stripping them of past work values (viewed as the socialist work ethic) and attempting to instil autonomy-based values adaptable to employer needs. These tendencies culminated with the deregulation of the Romanian labour market in 2011 (Varga and Freyberg-Inan, 2014). Amendments were made to the Labour Law, stressing the ‘rigidity’ problem reminiscent of socialism and the need for a flexible workforce suited to FDIs. Changes included additions for easing temporary employment, the possibility of dismissal in case of strikes and the substitution of unions by work councils. These circumstances implicitly contributed to the power inequalities in industrial relations geared towards corporate incentives via state policies, while downplaying social measures.

The resulting economic trend materialized under what certain authors (Nolke and Vliegenthart, 2009; Tarlea and Freyberg-Inan, 2018) have called a ‘dependent market economy’ of the neoliberal type, similar to the Baltic States (Bohle and Greskovits, 2012), consisting of a more radical market-oriented economy with reduced social implications. Romania is an outsourcing and offshoring site mainly for German and Austrian capital (Marin, 2006). As a result, between 2002 and 2010, the percentage of FDI from Romania’s GDP increased from 10 to 43.9 percent, with 44 percent of investments aimed at the industrial sector.

Favouring least-cost strategies, the country’s industrial production profile predominantly resembles an export-oriented assembly line in the supply chain of more complex products. Tapping into low-cost labour power engaged in low-complexity manufacturing ventures, largely without the possibility of collective action, constitutes the ‘conditions of emergence’ (Freyssenet, 2009) shaping the transfer of lean production to Romania. As ‘work organization is always context-dependent’ (Elger and Smith, 2005: 7), organizing production according to lean principles seemingly has no drawbacks. However, employee engagement is severely downgraded in unfavourable employment relations, leading to visible tensions.

Fieldwork and methodological approach

This research adopted the reflexive approach of an extended case method (Burawoy, 1998), embracing both direct engagement with the field site and its subsequent contextualization via historical, sectoral and transnational linkages. Initial reflexive engagement with the field site started with an acquaintance, who provided insider knowledge and access to the workspace. Data gathering utilized non-covert participant observation and in-depth interviews. Participant observation sessions (spanning more than 6 months in 2-month increments) took place between 2015 and 2016, in recurring 8-hour shift length visits to the factory. The main reason for revisiting the field site was the additional employment of workers from a temporary work agency (TWA). The interviews were conducted in two sets: an initial batch with key figures (Administrator, HR specialist, two production planners and two senior quality assurance employees), followed by another batch with more junior personnel (four technicians and five operators), resulting in a total of 15 interviews. Respondents were asked to describe daily practices, their influence, and in certain cases, their host-country origins. In certain cases, experienced respondents provided knowledge about the local automotive supplier landscape. Confidentiality was ensured at company level (a key requirement for interviews with the two top-ranking employees) and for every respondent.

The historical grounding of the case influenced the adoption of current dependent economic models in former socialist CEE countries, thus facilitating MNCs in their local transfer strategies. The rationale for case selection was twofold. First, there was a geographic motive: Romania’s automotive industrial landscape determined the need to select suppliers located in Transylvania, a region dominated by intricate automotive supply chains that lack systematic consideration. Second, existing accounts tend to skew the image of the automobile industry by focusing mainly on the Dacia plant in southern Romania, a case unanimously considered one-of-a-kind based on its union militancy, an attribute not shared by suppliers present in other regions of the country.

Case study: lean manufacturing in the Romanian automobile industry

The Romanian automotive industry is clustered in the southern and western parts of the country. The south is home to the Dacia-Renault factory, the leading nation-wide automobile manufacturer, and Automobile Craiova, producing Ford models (formerly Daewoo). The sole documented example of lean manufacturing in Romania is the Dacia-Renault plant. Lean elements were officially implemented in 2004, restructuring the existing work relations and enacting a ‘major change in [the] everyday work atmosphere’ (Guga, 2017: 244). Changes consisted of the implementation of teamwork, standardization, JIT and kaizen, key features of the lean doctrine. Employees were grouped into Elementary Work Units according to flexibility requirements, while strict production targets created work intensification.

At the same time, the factory represented a stark exception in a nation-wide context of non-unionization. The plant’s workers obtained significant victories against management (Adăscăliței and Guga, 2015). This followed unrest, triggered by changes implemented following the company’s acquisition by Renault, including mass dismissals, work intensification and a ‘new regime of close supervision’. While the experienced workforce constituted an advantage, the acceptance of lean principles was seemingly conditional on adequate remuneration on the principle of more work equals more pay, implicitly acknowledging its ideological character.

Producing the widely successful Logan model, the Dacia-Renault shop floor is de-centralized (independent from headquarters) and adapted to low-cost countries, with low-technological levels alongside a simplified production process. This production model is characterized by an export-oriented product policy and components of lean manufacturing, alongside a low-cost workforce. However, while taking advantage of Romania’s structural advantages, the company also invests in R&D (again, in contrast to the national context) and has high levels of vertical integration within the country (Adăscăliței and Guga, 2020).

The western region of Romania is integrated into the Central European automotive cluster, supplying France and Germany, among others, with various components. The cluster produces mainly for export while also importing the majority of primary materials from their home countries (Egresi, 2007), suggesting low levels of regional vertical integration and a lack of specific product policy orientation. Material sourcing decisions are also made by foreign actors, indicating centralized governance in subsidiaries.

Country-wide, three other notable actors produce assembled electrical components for the automobile industry. Compared to competitors, the case study company has, numerically, the smallest workforce; locally, a niche product profile; and similar skill requirements alongside comparable employee benefits (vacation and holiday bonuses). At two larger competitor factories, employees are required to commute (20 and 50 km) and employment is generally via standardized recruitment procedures. Constant production, without the usual off-days, is also a deterrent in these cases. In contrast, the sole, more comparable plant, falls short due to its demanding production norms and payment-by-results system. These circumstances position the studied factory on middle-ground in terms of the acceptability of drawbacks for employees.

Romania’s economic landscape is comprised of regional economic nodes. Cluj-Napoca represents the main node in Transylvania, characterized by significantly higher levels of FDI compared to neighbouring regions. Thus, in terms of domestic workforce mobility, node cities tend to attract the bulk of potential employees from the surrounding region. Apart from migrating abroad (emigration for seasonal work is common in rural areas), permanently relocating to larger cities represents an attractive solution, largely negating the bargaining opportunities granted by labour shortages described by Stan and Erne (2016) and further reducing viable exit strategies.

As mentioned, the case study factory produces plastic parts for various automobile manufacturers. Product policy relies on integration into global supply chains, exporting the majority of products mainly to other assembly plants. Production is adapted for various brands and market segments, with less inclination to specific price-ranges. The company structures their transfer of practices in four identical facilities (France, Romania, Tunisia and Mexico), organizing production through the adoption of lean components. Given the long-standing tradition of lean manufacturing in the French factory (see Durand and Hatzfeld, 2003) and the prevalence of lean manufacturing within the automotive industry generally, lean values are implemented in host countries once the subsidiaries reach an approximate size to the home factory: 150–200 employees and 50–60 machines. The Multi-National Practices (MNPs) that are transferred are a mix of those German and US ‘ideal types’ described by Meardi et al. (2009): subsidiaries are directly controlled (managers are often delegates), direct employee participation is encouraged, teamwork is posited as autonomy-inducing and contracts are primarily permanent with few agency workers. The plant is centrally supervised and governed via a home country delegate. Production is project-based, entailing orders from clients passed down from France. The quantity of desired product is negotiated by the parent company, often resulting in the specification of a weekly supply output. Usually, headquarters expects a benchmarked productive output of one component every 2 minutes, resulting in a total of 50,000 products per month.

Following the launch of a new model by various automobile brands, primary materials are sourced and imported by the parent company, while dashboard moulds are manufactured and delivered by a Chinese company. After the plastic injection process, products pass through at least one more local or global intermediary firm that assembles the plastic pieces before sending them directly to automobile manufacturers (BMW, Ford, Volkswagen, Opel, Fiat, Citroen, Peugeot, etc.). While the company in question supplies the outer components of automobile interior sub-assemblies, these collaborators manage the mechanical and electrical parts. The importance of finished sub-assembly producers varies: a certain intermediary client based in Timișoara (300 km west of Cluj) is responsible for 60 percent of regional demand, while other collaborations (located in Sibiu and Brașov, both in the range of 200–250 km) are only seasonal. Furthermore, the company directly exports to Slovakia and Mexico, and in certain cases can import specialized moulds from Spain, Portugal and Germany. The plastic components thus hold a mid-level position in supply chains that compose the inner workings of a number of automobile models. Acting as a dependent agent embedded in the automobile industry, the factory’s products are part of material flows of commodities, circulating irrespective of state borders, a central trait of the contemporary global economy.

These immediate links in the chain of production are revealed during auditing periods when higher placed assembly company representatives enact ‘parameter controls’ in order to ensure adequate quality standards. Intermediary collaborator audits can occur on a weekly basis, while client audits can vary based on production profiles, generally taking place bi-monthly. Inspections evaluate the factory layout (mainly for JIT storage purposes), the quality of machines in use, workforce input and the overall productive capacity. During audits, stress levels are elevated: ‘everything is cleaned, worksheets are sorted . . . to give the impression of control when often it is not the case’ (29, M, Technician).

Product design is relayed from clients, the company lacking any input in component conception. In the event of minor productive issues, clients communicate the desired modifications and in-house technicians apply them by adjusting mould parameters. Major problems occur when production is reset due to inadequate materials, cases in which clients change primary material types. The client–supplier relation is largely one-sided, the former setting requirements while also solving the majority of production difficulties.

As the production process generally lacks complexity, operator skills are vocational and attained mostly from general education, a proven feature of the ‘low-road employment model’ (Scepanovic, 2012). Technicians, on the contrary, have technical qualifications or are former operators promoted for their proven abilities. A referral system streamlines the recruitment process and optimizes the instruction periods: experienced employees help the inexperienced to adapt and learn job traits. The performance of the inexperienced employee is unofficially delegated to the experienced employee, although no official reward or incentive is given, only a verbal one.

Employment constantly increased, from 29 employees in 2009 to 177 in 2017 (excluding agency workers), while productive output also increased and diversified. During this growth period, lean production was further enforced connecting client demands, visible during audits, with the extra need for efficiency and quality. From an employee perspective, work intensification, induced by customer demand, became noticeable. Nonetheless, without effective employee representation opportunities the workforce lacked the means to challenge the further restructuring of work organization. Following the trend of union decentralization in Europe (Durand et al., 1999), Romania has low union representation rates, especially in the private sector. The company in question has no official union, a worker council fulfils employee representation duties as per the Labour Code requirements. Shop floor employees rarely come into contact with notions of union representation and worker association and no significant collective action has occurred thus far.

As the rhetoric surrounding the lean practices developed and expanded, workplace interactions became largely impersonal: management communications mainly emphasized the lean components. Compared with former inter-rank relations, communication was increasingly rationalized and formal, centred upon promoting product quality standards, responsibility towards clients and teamwork. In addition, in 2015, as the need to increase production grew, the factory started to employ agency workers in order to meet the need for additional employees.

This constituted the turning point from basic lean practices to lean-and-dual, consisting of a hybrid workforce.

From products to ideology: the hybrid motivation strategy

The main factors in employee motivation are salary and improved working conditions in comparison with other local possibilities. In parallel with the communicated internal values, the HR specialist emphasized the intrinsic unique character of the products: ‘our clients keep telling us that the technology present here can’t really be found elsewhere’. The prestige conferred by well-known automobile brands is invoked simultaneously with quality maximizing kaizen principles. For example, during the hiring interview, the blend of product uniqueness and quality standards is clearly stated for motivation purposes. She tells them, ‘you might think that it’s only a simple plastic piece, but it’s not, it’s something that has to be made responsibly because no one else in the world does this’. HR visibly sought to accentuate this fact and give the impression that this represents an important ‘selling point’ of the factory.

Considering that the pieces are installed in automobiles, human safety is also brought into play as a complementary attribute, as units can be sold anywhere and have to endure possibly harsh weather conditions. Emphasis is placed on client satisfaction, considered the solution to everyone’s well-being: ‘if the client is appeased then he will place more orders and we will expand, hiring even more personnel’.

Disappointing the company is tantamount to a lack of dedication and attention towards the client and thus considered a weak link in an efficient chain of production. This is exemplified by the failure to spot a potential production flaw or to maintain the work pace, embarrassing the firm. As a result, employee dedication is measured by maintaining quality standards, while the resulting pressure contributes to work intensification.

Cases arise when the amount of work doubles during a week, calling for a ‘desperate recruitment target’. It is partly (mainly to correct major productive errors) for this reason that the company collaborates presently with a TWA. Under different circumstances, hiring is triggered when a product’s usage is transferred onto different automobile models, thus generating an extended workload:

when we hear that a piece we make will be used in six months on another car model, for example Opel, when we produced for Astra and then we heard that Zafira will have the same piece. This of course presupposes a project extension by 20, 40, 50%.

Following the initial recruitment process, the specialized production process entails an instruction period that is considered the final stage of recruitment. In the case of operators, the main hiring criteria are distributive attention (focus on multiple moving parts) and ‘very good eyesight’, necessary as ‘the main activity is one of verification’. Two vision tests are performed during the recruitment process, the same procedure is also repeated every year for all employees. Their purpose is to ensure that minor errors are spotted in small plastic pieces: ‘to correctly estimate the right size and assess their capacity to detect flaws’. During the tests, candidates are asked to observe different plastic parts, some of which contain minor or major flaws that need to be detected in order to pass. These ophthalmological tests are demanded by the clients. Visibly emphasizing increased quality standards, this main recruitment precondition is the first contact new employees have with the company’s internal values and possibly with lean techniques in general.

Work organization and the production process under lean production

The work process involved plastic injection machines managed by operators and technicians. These machines were technologically grouped in manufacturing cells, forming clusters according to product types: ‘transparent’ and ‘non-transparent pieces’ (Figure 1). While the workforce doubled in size, the machine count multiplied almost 10-fold over approximately 4 years, leading to ‘more machines than operators (per shift)’ (M, Technician, 27 years old). It was the introduction of these lean components that prompted work intensification and emphasized both teamwork and employee autonomy, in addition to product quality.

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Figure 1.

Factory layout.

The teamwork-oriented component of the management rhetoric was revealed predominantly by the HR specialist, who specified that every new employee becomes ‘part of the team, contributing to the firm’s progress or regress’. Communication with management is encouraged – ‘employee proposals are welcome’. Discursive themes are voiced periodically during the initial relaying of new projects. During these meetings, the administrator and HR specialist pass on client requirements and time frames, while simultaneously suggesting ‘best practice’ ideals. For example, after transmitting the daunting deadlines and quantity of products needed, team work is emphasized as the means to fulfil these demands. Furthermore, teamwork and quality standards are linked with client prestige. These can be accompanied by pictures of the brand’s future automobile model, meant to further induce motivation. Beyond these meetings, teamwork values are voiced occasionally, when JIT targets fall behind expectations. Coupling teamwork in these cases with JIT evidences the vulnerability of the latter when compared with Fordist buffer stocks.

On the shop floor, work teams per shift are defined on the basis of the products’ technological profiles, resembling cellular work-focused strategies (Nohara et al., 2014). Work dynamics are fragmented, operating independently from each other, the main indicator of operator autonomy in an otherwise repetitive work flow. Given the daily production of numerous product types in parallel and the number of employees per shift (80–90), a certain shift can have close to a dozen teams operating side by side. However, even this operator autonomy is determined solely by machine output. Thus, circumstances in which operators have control over their work intensity are few and far between, depending mostly on management decisions.

While the designation ‘team member’ plays a prominent role in management rhetoric, in practice, interaction between team members is rare during production. Issues are often corrected by technicians, while operators in proximity continue to attend to their duties. As a result, it is mostly technicians and operators who interact during production, a fact in tune with Durand et al.’s (1999) assertion of supervisor-induced kaizen principles. Operators are required to signal any defects and negotiate whether a piece will satisfy or fail the quality inspection with the technicians. These collaborative efforts ensure intermediate product quality, before the final check, performed by quality officers. In contrast, during breaks, technicians and operators form separate groups which rarely interact, while more senior personnel spend their breaks in a separate area.

Technicians are tasked with changing moulds – steel casings designed for plastic injection, mainly in the shape of automobile dashboards or other adjacent components – an operation requiring technical knowledge and specialized tool handling. This continuous renewal of productive profiles (an operation performed numerous times per shift) is necessary for maintaining flexibility and JIT principles. Operators by contrast have a very limited range of activities, often a single repetitive task: to manage the quantity of products emerging from the machines via the conveyor belt. Due to flexibility requirements, operators are also instructed to rotate between different machines producing different types of products, emphasis on a specific variant being determined by client work orders. As a result, multi-skilling is equated with the ability to work on all types of machines present in the workplace. Once the workplaces are defined, employees are expected to stay near their allocated work stations. Every client request is completed during a set time frame (unless delays arise due to client interference), respecting JIT requirements.

The limits of lean component transfer: work conflicts and discourse fragility

At the top of the internal hierarchy are the Administrator, a French national, and his native Romanian spouse, the HR specialist. Besides handling communications with the parent company, he often goes on to the shop floor and personally speaks with employees, giving technical suggestions or evaluating employee dispositions for overtime. Overtime is mostly agreed, partly because ‘no one refuses the Administrator’, due to his perceived hierarchical authority. The HR specialist manages recruitment and interacts in a paternalistic manner with workers on the shop floor, mainly advocating motivational values associated with lean production. In general, the couple has full decision-making capabilities.

The presence of TWA workers is used as a safety net in the event of major errors in production: when certain types of items need to be repackaged or re-made entirely. Agency worker involvement can range from a few days to a few weeks or even months. Their work tasks are similar to those of directly employed operators: managing plastic pieces from the conveyor belt, packaging products or the lengthy re-packaging process of already finalized deficient batches. Major production errors have occurred more frequently in recent years due to increased client demands, thus having a flexible reserve workforce on standby is deemed convenient: ‘it is better like this, they don’t have contracts with us, you can tell them any day not to come anymore . . . there are no headaches, you don’t need to fire them’ (M, Maintenance Technician, 53 years old).

Approximately 10 agency workers are present per shift (circa 30 in total), their exact number depending on the workload and the severity of potential errors:

in certain periods there are 20 per shift . . . it depends, if some people are sick maybe, then they are more, usually there are a few . . . at the beginning of the year (2017) they were more . . . but I see they are increasing. (M, Maintenance Technician, 53 years old)

Agency employees originate from the neighbouring Republic of Moldova. On the shop floor, they are equipped with distinctive red T-shirts inscribed with the TWA’s name, instead of the white protective equipment worn by direct employees. Personnel turnover is low among Operators and Technicians but more frequent among warehouse employees and agency workers. The company encourages long-term employment and job stability:

we want our employees to feel that they are doing something meaningful, to have them come to work with pleasure every day, an employee has to feel good on the shop floor . . . the salary cannot be the only motivator. (F, HR Specialist, 32 years old)

Despite this statement, there was no evidence that employee motivation was enhanced in this way.

The limited success of the discourse around meaningful work is evidenced by employee responses. Work intensification was perceived as a constant rush to meet urgent deadlines for different products: ‘this (product) is urgent now, the last was urgent as well, everything is urgent nowadays’ (M, Technician, 27 years old). The same respondent also mentioned that experienced employees reminisce over their past experiences when employment relations permitted more informal interactions and less focus on performance and quality standards.

Higher expectations tend to raise stress levels and generate conflicts. The lack of other viable options maintains this situation, ‘we are cheap labour and have to tolerate everything, other options are worse’, underlining the significance of the local context outlined above. Management also exploits the local context: ‘this workplace is better, so we [employees] should stop complaining . . . if it is not satisfactory, then we can go back to where we were’ (F, Operator, 42 years old).

In addition, while providing employees with the opportunity to offer suggestions for improvement was intended as a means of empowerment, it is rarely used except for complaints. As a result, employee job satisfaction is generally adequate but at the same time is strongly determined by the local context. Moreover, management contradicts their own rhetoric of inter-rank communication by invoking the unfavourable context for employees when they voice their dissatisfaction.

During production, operators have no direct control over machines. Individual employee decision making (for adjusting errors or voluntary stoppages) is altogether absent. There are no standard visual signals (kanban), instead, machines shut down automatically when overloaded or for safety reasons via their built-in motion detectors. Operators require assistance from technicians when stopping or restarting production.

Health complaints range from heat stress to back and leg pain resulting from the continuous production. While there are chairs in the vicinity of each machine, employees rarely have time to rest due to the work pace. Furthermore, resting can attract resentment from nearby colleagues: ‘if sitting, the others watch questioningly . . . look, he is sitting again’ (M, Technician, 27 years old). A positive influence on well-being and at the same time a form of resistance is being able to listen to music, via headphones. To avoid management criticism, this occurs only during night shifts. Similarly, employees are more vigilant when management is in the vicinity, taking care not to be seen idling or sitting.

Respondents pointed out the current increased frequency of work conflicts occurs mainly between two groups: operators on one hand and technicians and management on the other. Work-related conflicts between operators are caused by a lack of cohesion. Teamwork is disrupted by the heightened stress levels created by work intensification, evidenced by resentful interactions: ‘there is no time for your nonsense, I have so much work to do that I do not even know where to start’ (M, Operator, 39 years old). Even though management espouses teamwork-oriented ideals, employees do not internalize them:

the manager tells us that we need to help each other as we are a team, which in my opinion is nonsense . . . if someone finishes his work and has a breather, why would he help someone else who did not finish. (M, Technician, 27 years old)

Peer-pressure often exceeds group self-discipline, creating open conflicts. They start with grievances and accusations generated by a lack of help in resolving certain tasks. The ‘my work task is harder than yours’ or ‘you don’t make enough boxes’ (for packaging purposes) reproaches also ensue from work intensification and as JIT deadlines draw near. Employees often complain about their increased workload, blaming each other for lack of involvement, for example, during breaks: ‘they [other operators] force me to run between more machines . . . some are really inconsiderate’ (F, Operator, 42 years old). An interviewee criticized his colleague for being ‘old school’: noting every task and avoiding complex operations.

Technicians also complain about operator incompetence. In the absence of any means of halting machine output, operators rely on technicians to restart production. Operators who stall machines repeatedly are the target of technicians’ complaints: ‘I just shut down those machines . . . cannot waste 2 hours restarting their machines due to their incompetence, they [management] should find other workers’ (M, Technician, 27 years old). Similarly, operators often complain when technicians avoid adjusting certain machines and start expecting help. More positively, technicians justify their absence by highlighting their excessive workload and operators’ lack of production knowledge.

Grievances also exist between technicians and the administrator: because of an apparent lack of technical expertise, the administrator’s demands are often ignored, technicians preferring to ‘engage with people with at least some awareness toward my [their] branch of expertise’ (M, Maintenance Technician, 53 years old). When errors occur, technicians often confront management, challenging their flawed assumptions about problems and, when presented with improved results, management accepts the technicians’ opinion. Technical personnel predominantly ignore the administrator’s solution, proceeding to remedy problems in their own way, often without informing more senior staff: ‘they [management] don’t care how the products are made, the machine can be wired up, or patched with duct tape, they care only about quality products to sell’ (M, Maintenance Technician, 53 years old). The latter remark denotes the substantial differences between management rhetoric and practice.

Another set of complaints occurs when products need an adjustment or ‘intervention’: when the client demands a change in their products, the machines need to be adjusted by specialized personnel – mainly maintenance technicians. Certain moulds can contain up to 11 modification indexes, as detailed in the worksheets attached to each one. These operations are necessary mainly where design flaws require product modification, given that no assembly operations are done in the factory: ‘if a dashboard is made up of three or four pieces and it squeaks, then they will need us to repair it . . . of course the client does the tests and then they tell us’. In certain cases, mould adjustments are done in-house, but often, they need specialized laser cutting and soldering which requires transportation to other specialized subcontractors present within the supply chain. Often, these structural problems lead to arguments between technicians, while management blames operators for not spotting the flaws in due time.

The management and mediation of such disputes are attempted by invoking the rhetoric of client satisfaction, product quality and worker empowerment. Typically, managers articulate lean principles in the event of conflicts (1) by emphasizing JIT alongside various narratives about quality with the intent of increasing responsibility towards a renowned client, (2) by invoking teamwork as a mild scolding incentive focusing on ‘the good of the company’ and (3) by using partial job rotation (assigning guilty parties to distant work stations until the next break period) if all other measures fail. Nevertheless, this approach yields only temporary solutions. The legitimacy of the management rhetoric is only maintained through appeals to authority figures, generally the company administrator or HR specialist, two of the most senior managers.

Conclusion

The article addresses the implementation of lean production techniques in Romania’s automotive industry. Focusing on a subsidiary of a French MNC, the conditions for implementing the practices are discussed. The company’s attempts to transfer flexibility-enhancing lean production are met with difficulties. The findings suggest that the country’s permissive economic context acts as a double-edged sword: granting managerial freedom for MNC profit strategies on one hand while favouring low-complexity production via low-cost labour on the other. Employee motivation under these circumstances is reduced, and organizing production following lean principles creates visible inconsistencies on the shop floor.

At a national level, dependent market economies rely on FDI, streamlined by deregulated employment relations that ease the engagement of low-cost workforces. At the sectoral level, the automotive industry consists of a few automobile manufacturers alongside a nexus of suppliers concentrated mainly in north-western Romania. In terms of productive models, the entire industry exhibits export-oriented product policies, although differences between suppliers and final assemblers are apparent. As evidenced by depictions of the Dacia-Renault plant, final assemblers in CEE tend to target the low-cost market segment, invest significantly in research and development, and operate independently from home country headquarters. Suppliers, on the contrary, tend to favour low-intensity research and development investments and centralized home-country management, with less specific market segment orientation.

The case study company exhibits all the above-mentioned features while organizing production according to lean principles. During a recent period of growth, the company’s management enforced lean production, attempting to mirror its implementation in the home country. Management’s pursuit of client satisfaction, through JIT, kaizen and teamwork, led to increased work intensity resulting in frequent employee conflicts and health issues. These work crises were exacerbated by a lack of effective union representation and a local context where viable work alternatives were scarce.

As described by other studies of different countries (Durand et al., 1999; Durand and Hatzfeld, 2003; Stewart et al., 2009), production complexity and lean principles, such as waste reduction and the use of visual indicators, can all favour employee autonomy. However, these components lose their importance in the repetitive workflows predominant in dependent market economies. Incremental improvements are unlikely in a highly refined process with virtually no space for further efficiency gains: the goal is coping rather than innovating. Kanban procedures are also futile in a context lacking employee empowerment on the shop floor. Operators are deprived of the ability to deliberately halt machines. Instead, machines stop when the workflow is interrupted or products overflow, resulting in operators being seen either as negligent or unable to cope with the work pace. Implementing non-financial methods of employee motivation is difficult under these circumstances. Furthermore, the lack of employee consultation when attempting to increase work intensity via lean production and the subsequent shortcomings in daily practices highlight the dissociation between rhetoric and practice on the shop floor. As a result, lean production’s rhetorical and ideological character is perhaps even more evident here than in other contexts.