Douglas Bennett and Kenneth Sharpe have written an excellent case study of the bargaining relationship between the transnational auto industry and the state of Mexico on the definition of the auto industry in Mexico. The book has a sound theoretical base which is applied throughout the book. The authors term their theoretical approach “structural-historical analysis,” which is very close to systems theory. Bennett and Sharpe argue that national and international actors are able to determine their own destiny within the context of existing structural settings, and that they define the characteristics of the structures both globally and nationally.
It is difficult to research but rather easy to theorize about transnational corporations and states. There is a great deal of theoretical literature on transnational corporations. This book stands out and will serve as a model because of the painstaking research the authors did on the subject. Much of their data is a result of extensive interviewing. Their insightful description and conclusions are arrived at after careful examination of the facts, which makes this a refreshing work. It is free of emotion and ideology.
The authors give attention to three episodes of bargaining between the Mexican state and the transnational automobile firms: 1960-62, 1969, and 1977. For each period, the book defines the interests of the auto industry, the interests of the state of Mexico, and the structural limitations on the actors in reaching an agreement.
In the first encounter, Mexico had goals of shaping its national market in terms of the number of firms, limitations on the number of products, and an overall policy of import substitution. These goals were designed to achieve efficient levels of production in a domestic market. In this period, Mexico was generally unsuccessful in achieving its goals because of structural global constraints and the nature of the global auto industry. The industry had a monopoly over technology and was oligopolistic in nature.
By the third encounter, Mexico had learned a great deal. It had changed its goals from import substitution to a requirement for exports by the transnational auto plants in Mexico. The Mexican bureaucracy was united, and it had discovered vast oil reserves. All these factors enhanced Mexico’s bargaining position.
The authors touch on the impact of the auto industry on Mexico’s economy and class structure but do not explore it in depth. They did not mention the effect of the Mexican plants on the United States auto workers.
The book is well designed, well researched, theoretically sound, and very readable. It is a notable contribution to the field.
