Changing East–West Division of Labour in the European Automotive Industry

The article deals with the impact of the emerging new division of labour between Western and Central and Eastern Europe (CEE) on work and employment, both in the Western and CEE countries. Major points of discussion will be the hypothesis of a `hollowingout' of the Western European auto industry, and the hypothesis of a `regime flight'; that is, the claim that companies use CEE locations to escape the collectively regulated work models of Western Europe. The article draws from our own empirical research, including company case-studies in Western and Eastern auto plants, and on statistical analysis. The main conclusions are: in CEE countries, an upgrading process of production sites can be observed, which challenges the view of an emerging `high end/low end' division of labour between the West and the East.While relocation has led to some losses of low-skill jobs in Western Europe, the overall effect of the expansion of the automotive industry to CEE on growth and employment in Western Europe was positive.The impact of low-cost component imports from CEE countries has increased the competitiveness of the German firms, which are by far the main investor in CEE countries. Our case-studies reveal no trend towards regime flight from Western European work models, but management threats of relocation have become commonplace and have led to a renegotiation of work models in Western European countries. In CEE countries, the work models of automobile companies more and more are oriented at a high-road path.This development is fostered by the companies' responses to the problems of migration and the increasing shortage of skilled labour.