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The different rates of technical progress in Western Europe and the United States, exemplified by the motor industry, created a problem of adjustment in international payments by the 1920s. American direct investment in manufacturing in Europe was a manifestation of technological superiority and a partial solution to the payments problem. The scale of their operations gave the American motor vehicle firms an advantage even in foreign production. An alternative way of closing the technological gap, the transfer of machine tools and trained men from America to Europe, allowed the European motor vehicle producers to compete without becoming entirely American-owned.
1 Svennilson, Ingvar, Growth and Stagnation in the European Economy, United Nations Economic Commission for Europe (Geneva, 1954), pp. 20–23.
2 Vanek, Jaroslav, The Natural Resource Content of the United States Foreign Trade, 1870–1955 (Cambridge, Massachusetts, 1963), pp. 128–30.
3 Falkus, Malcolm E., “United States Economic Policy and the Dollar Gap of the 1920's,” Economic History Review, 2nd ser., 24 (11. 1971), 599–623.
4 United Nations, International Capital Movements during the Inter-War Period (Lake Success, New York, 1949), pp. 30–32.Svedberg, P., “The Portfolio-Direct Composition of Private Foreign Investment in 1914 Revisited,” Economic Journal, 88 (12. 1978), 763–77, argues, however, that pre-1914 direct investment has been underestimated.
5 Southard, Frank A. Jr, American Industry in Europe (1931; reprint ed., New York, 1976), p. xiii.
6 See, for example, Rosenberg, Nathan, Perspectives on Technology (Cambridge, 1976), p. 157.Casson, Mark, Alternatives to the Multinational Enterprise (New York, 1979), chap. 3.
7 Chandler, Alfred D., “The Growth of the Transnational Industrial Firm in the United States and the United Kingdom: A Comparative Analysis”, Economic History Review, 2nd ser., 33 (08. 1980), 396–410.
8 Wilkins, Mira, “Modern European Economic History and the Multinationals,” Journal of European Economic History, 6 (Winter 1977), 575–95.
9 An influential view of the danger for Europe of American multinationals in the 1960s was Servan-Schreiber's, Jean Jacques, The American Challenge (New York, 1968).Southard (American Industry, pp. 184–86) provides a sample of European objections in the 1920s.
10 U.S., Department of Labor, Wages and Hours of Labor in the Motor Vehicle Industry, Bulletin no. 502 (1928);Seltzer, Lawrence H., “The Automobile Industry,” in Encyclopedia of Social Science, ed. Seligman, Edwin R. A. (New York, 1930).
11 The use of the term “revealed comparative advantage,” is due to Balassa, Bela A., “Trade Liberalization and ‘Revealed’ Comparative Advantage,” The Manchester School, 3 (1965), 99–123.
12 Pound, Arthur, The Turning Wheel. The Story of General Motors through Twenty-five Years: 1908–1933 (New York, 1934), p. 246.
13 Britain, Great, Imperial Economic Committee, A Survey of Trade in Motor Vehicles, H.M.S.O. (1936), p. 45.
14 Seltzer, “Automobile Industry.”
15 U.S., Special Consular Report, Dept. of Commerce and Labor (Manufactures Bureau), Motor Machines (1908). The American tariff was 45 percent compared with a zero rate in Britain, 2–3 percent in Germany, 8–12 percent in France, and 12 percent in Belgium. Laux, James M., In First Gear: The French Automobile Industry to 1914 (Liverpool, 1976), p. 101.
16 Laux, In First Gear, p. 124.
17 For example, Temin, Peter, “Labor Scarcity and the Problem of American Industrial Efficiency in the 1850s,” in this JOURNAL, 26 (09 1966), 277–98.Musson, Albert E., “The engineering Industry,” in The Dynamics of Victorian Business, ed. Church, Roy A. (Boston, 1980). Musson argues that Whitworth overstated American machine-tool superiority for his own ends.
18 Epstein, Ralph C., The Automobile Industry: Its Economic and Commercial Development (1928; reprint ed. New York, 1972), p. 44.
19 Woodbury, Robert S., “Machine Tools,” in A History of Technology: The Twentieth Century, ed. Williams, Trevor I. (New York, 1978).
20 Koenigsberg, Frank, “Production Engineering”, Hiostory of Technology.
21 Sorensen asserts that no one at Ford Knew about Taylor's theories. Sorensen, Charles E., My Forty Years with Ford (New York, 1956), p. 41.
22 Taylor' recommendation of time study and rule of thumb personnel measures were most popular in American industry. His innovation in production management were less widely used. Nelson, Daniel, Frederick W. Taylor and the Rise of Scientific Management (Madison, Wisconsin, 1980), pp. 199–200.
23 Taylor, Frederick W., Principles of Scientific Management (New York, 1967).
24 Great Britain, Department of Overseas Trade, Cahill, J. R., Report on Industrial Conditions in France, H.M.S.O. (July 1925), appendix.
25 Hicks, Carl, “Report of the Automobile Situation in the World and Europe in 1927”, bound typescript, Detroit Public Library, p. 10.
26 Park, William M., The Automotive Industry and Trade of Great Britain and Northern Ireland (Washington, D. C., 1928).
27 “The AMO Automobile Factory”, The Automobile Engineer (July 1931), 245–50; “The Krasny Putilovetz Tractor Works”, The Automobile Engineer (09 1930), 314–21.
28 Wilkins, Mira and Hill, Frank Ernest, American Business Abroad: Ford on Six Continents (Detroit, 1964), p. 240.
29 Hicks, “Report of the Automobile Situation”, p. 24. Frank Woollard, Morris's production engineer, had been proud of his unusual machines and new methods, which achieved a degree of mechanization not attained in the United States. “Some Notes on British Methods of Continuous Production”, Proceedings of the Institution of Automobile Engineers, 03 1925 (London, 1925), pp. 85–93.
30 “Machine Tool Obsolescence”, The Automobile Engineer (March 1931), p. 115.
31 Rolt, Lionel T. C., Tools for the Job: A Short History of Machine Tools (London, 1965), p. 215.
32 Woollard, Frank, “Automobile Plant Depreciation and Replacement Problems”, Proceedings of the Institution of Automobile Engineers, 01 1931 (London, 1931), p. 258.
33 Hicks, “Report of the Automobile Situation”, p. 11.
34 On Czech steel, see Hicks, “Report of the Automobile Situation.” On British steel, see Sorensen to Perry, 20 August. 1934, Acc. 572, Box 18, #11.15, Ford Archives, Dearborn, Michigan.
35 Great Britain, PRO, BT 64/3187. A Board of Trade investigation, in the same file, broadly confirmed the S.M.M.T.'s costings.
36 Platet, Jean L., L's industrie Automobile depuis la Guerre (Paris, 1934), p. 142.
37 For the attitude of General Motors, see Sloan, Alfred Pritchard, My Years with General Motors, ed. McDonald, John (New York, 1964), p. 316.
38 “Percentage of Cost per Tudor Represented by American and Local Expenditure”, 28 June 1932, Acc. 572, Box 18, #11.15, Ford Archives.
39 Hicks, “Report of the Automobile Situation”, pp. 3, 9.
40 Wilkins, American Business Abroad, pp. 238–41.
41 Nevins, Allan and Hill, Frank Ernest, Ford: Decline and Rebirth, 1933–62 (New York, 1963), p. 81.
42 Pound, The Turning Wheel, p. 248.
43 Swayne, A., “Report of European and South American Trip, fall 1927 to the Executive Committee”, Vice President, 12 Jan. 1928, 3, 5, in C. S. Mott Papers, General Motors Institute Alumni Foundation's Collection of Industrial History, General Motors Institute, Flint, Michigan.
44 Phillips, Palmer to Perry, 5 Aug. 1931, Acc. 572, Box 18, #11.15, Ford Archives.
45 Sloan, My Years with General Motors, pp. 316–20; Pound, The Turning Wheel, pp. 248, 250, 258.
46 The Export Organisation of General Motors (1929), p. 18, Eleutherian Mills Historical Library, Wilmington, Delaware.
47 Sloan, My Years with General Motors, pp. 325–28.
48 Sedgwick, Michael, Cars of the Nineteen Thirties (London, 1970), pp. 176–286.
49 The Export Organisation of General Motors, p. 127.
50 Wilkins, “Modern European Economic History”, pp. 238–42.
51 Ibid.; Nevins, Allan and Hill, Frank Ernest, Ford: Expansion and Challenge, 1915–1933 (New York, 1957), chaps. 14, 21.
52 Maxcy, George and Silberston, Aubrey, The Motor Industry (London, 1959), p. 107.
53 Jacobson, D., “The Political Economy of Industrial Location: The Ford Motor Company at Cork 1912–1926”, Irish Economic and Social History, 4 (1977), 36–55.
54 Wilkins, American Business Abroad, pp. 237–40.
55 Casson, Alternatives to Multinational Enterprise, p. 45.
56 For some instances of the transfer of American methods in the motor industry to Britain after the First World War, see Foreman-Peck, James, “The Effect of Market Failure on the British Motor Industry before 1939”, Explorations in Economic History, 18 (07 1981), 271.
57 On the checkered history of the Rover Company in the 1920s and 1930s, see Foreman-Peck, James, “Exit, Voice and Loyalty as Responses to Decline: The Rover Company in the Inter-war Period”, Business History, 23 (07 1981), pp. 191–207.
58 PRO, DSIR 16/93.
59 PRO, DSIR 16/32, DSIR 16/94.
60 “Report on Time and Motion Study and Fieldwork”, 6 Feb 1933, Acc. 572, Box 18, #11.15, Ford Archives.
61 Cowling to Perry, 17 Feb 1932, Acc. 572, Box 18, #11.15, Ford Archives.
62 Regional Director's Office, July 1927, C. S. Mott Papers, General Motors Institute.
63 “Comparison of Dearborn and Dagenham Estimated Cost of Model Y Tudor”, Acc. 572, Box 18, #11.15, Ford Archives.
64 Sarensen to Perry, 20 Aug. 1934.ibid.
65 Sloan, My Years with General Motors, pp. 316, 318–19. GM did not regard all European management as inferior. They thought Mathis would make a good GM division head. Report on Mathis Co., 15, C. S. Mott Papers, General Motors Institute.
66 Perry to Sorensen, 19 Oct. 1929, sheet 3, Acc. 572, Box 18, #11.15, Ford Archives.
67 Klann and Kanzler, 15 Dec. 1923, 31 Dec. 1923, 7 Feb. 1924, 3 March 1924, Acc. 38, Box 12, Ford Archives.
68 Shimokawa, Koichi, “Marketing History in the Automobile Industry: The United States and Japan”, pp. 18–19; and Church, Roy, “The Marketing of Automobiles in Britain and the United States before 1939,” pp. 70–71, both in Development of Mass Marketing: The Automobile and Retailing Industries, eds. Okochi, Akio and Shimokawa, Koichi (Tokyo, 1981).
69 Quoted in Great Britain, Imperial Economic Committee, Survey of Trade, p. 44.
70 Ibid., pp. 13–14.
71 Nevins and Hill, Expansion and Challenge, appendix I.
72 Rhys, D. G., “Concentration in the Interwar Motor Industry”, Journal of Transport History, n.s., 3 (09. 1976), 241–64.
73 Robert Rowthorn shows that European multinationals were investing in the United States in the 1960s at a rate comparable to American investment in Europe. International Big Business 1957–1967: A Study of Comparative Growth (Cambridge, 1971), pp. 62–65.
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