Learning and accumulation of technological capabilities in an auto parts plant in Ciudad Juárez, Chihuahua

Abstract

There has been argued that building technological capabilities in developing countries is being achieved when multinational companies relocate manufacturing processes when looking for cheap labor and later on upgrading processes and products.

This paper analyzes the production path of a manufacturing plant in México owned by a multinational group, in order to understand the building of technological capabilities, and explains how the learning takes place and how it shows in its operation indicators.

We performed a study to identify the path of products manufacturing and capabilities acquisition in the plant by obtaining information by means of interviews and documents review. A technological capabilities counterfoil was constructed as per the one proposed by Bell and Pavitt (1995). Our findings suggest that production capabilities were the most advanced since the engineers achieved the capacity to design medium to low technology processes and products. Nevertheless, support capabilities did not advance towards designing capital goods, and the only external liaison was that with customers and suppliers in order to solve production problems. The decision making process with regard to manufacture and sale of new products was transferred to the Mexican managers, thus achieving some intermediate managerial capabilities.