Varieties of Vertical Disintegration: The Global Trend Toward Heterogeneous Supply Relations and the Reproduction of Difference in US and German Manufacturing

Abstract

As is well known, there is a global trend toward vertical disintegration in manufacturing. Large manufacturing firms, across a broad array of industrial sectors, are radically reducing the amount of their product that they both produce and design themselves. Instead they are turning to suppliers for key design, component, and even system in-puts. This shift has created a great deal of business for specialized suppliers in a vast array of areas throughout the global manufacturing economy. But it has also created an entirely new and challengin--often quite contradictory--terrain of relations between suppliers and their customers. Our claim in this chapter is that rlations between suppliers and customers in manufacturing are becoming systematically more heterogeneous within all advanced industrial societies. Further, this global trend is exacerbated by the diversity of institutional architectures and production practices in different political economies. In making this argument, we show that neither neo-liberal nor particular forms of institutionalist arguments (in particular the Varieties of Capitalism perspective) adequately capture current global dynamics in manufacturing.