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Spot-Welding Technology and the Development of Robotics at Fiat, 1972-87: A Case of Managerial Discontinuity?

2005; Taylor & Francis; Volume: 47; Issue: 1 Linguagem: Inglês

10.1080/0007679042000267497

1743-7938

Giuliano Maielli,

Italy: Economic History and Contemporary Issues

Click to increase image sizeClick to decrease image size Notes This article could not have been written without the help of many people and institutions. The European Commission financed my research with a Marie Curie Fellowship. I am grateful indeed to many people from Fiat. In particular, I whish to thank Giusepe Berta, Giusi Cortese and Massimo Castagnola from the Archivio Storico Fiat, and Paola De Nard, Antonio Malandri and Francesco Scimone from Fiat Auto. As a working paper, the article has been presented at various conferences, workshops and seminars at the LSE, the Manchester Federal School of Business and Management, the EHES Summer School, the Economic History Conference, and the Hagley Center for the History of Technology, Business and Society. I would particularly like to thank Patrick O'Brien, Paul Johnson, Philip Scranton, Jonathan Zeitlin, Sukhdev Johal and Karel Williams for their useful comments. Finally, I wish to express my gratitude to Terry Gourvish and Max Schultze for providing me with guidance, support and inspiration during my entire research. Any errors that remain are my own. G. Volpato, Il caso Fiat. Una strategia di riorganizzazione e di rilancio (The Fiat Case: A Restructuring Strategy to Recovering) (Turin, 1996). F. Amatori, ‘Gli uomini del Professore. Strategie, organizzazione, management alla Fiat fra anni Venti ed anni Sessanta’ (The Professor and His Team: Strategy, Structure and Managers at Fiat 1920s–1960s'), in C. Annibaldi and G. Berta (eds), Grande impresa e sviluppo Italiano. Studio per i cento anni della Fiat (Big Business and Italian Development: Studies for the Fiat Centenary) (Bologna, 1999), pp.247–343. The Fiat structure was set by Giovanni Agnelli and Vittorio Valletta. Giovanni Agnelli was the founder of Fiat. Valletta was a professional manger who joined the company in 1920. Valletta became President of Fiat in 1946 and retained that role until 1966 when Ganni Agnelli, the grandson of the Fiat founder, took over the presidency. The reference is to R. Nelson and S. Winter, An Evolutionary Theory of Economic Change (Cambridge, MA, 1982). The evolutionary theory of economic change refers to routines as established and repetitive practices within a given firm. Routines play the role that genes play in biological evolutionary theory. They are hereditary features of the firm and are selectable in the sense that firms with certain routines may do better than others, and, if so, their relative importance in the population is augmented over time. Ibid., pp.14–18. The main sources utilised in this article are: Archivio Storico Fiat (hereafter ASF), Verbali dei Consigli di Amministrazione’ (Fiat Historical Archive, ‘Reports of the Administration Board Meetings’) 1960–66; ASF, Libro dei numeri di matricola delle vetture prodotte (Production File), 1968–87; ASF, Fondo Sepin (Employment File), 1960–78, 5/VIII/1/A; F. Malandri and A. Scimone, Department of Production Technology Development, Fiat Auto, interview with the author, 18 March 1999. Note that Camuffo and Volpato idenified three technological phases at Fiat, namely rigid automation (1961–1974), flexible automation (1975–1988) and integrated automation (1989–1994). They suggested that within each of those phases, developments appeared to be incremental and path-dependent, whereas between each of those phases technological change was non-linear and systemic. This article, on the other hand, suggests continuity between the first two phases, as the development of robotics shared the same underpinning of hard automation, namely the quest for cycle time minimisation as opposed to flexibility maximisation. See A. Camuffo and G. Volpato, ‘Dynamic Capabilities and Manufacturing Automation: Organisational Learning in the Italian Automobile Industry’, Industrial and Corporate Change, 5, 3, (1996), pp. 813–38. The obvious reference is to M. Piore and C.F. Sabel, The Second Industrial Divide (New York, 1984). See: K. Dohse, U. Jürgens and T. Malsh, ‘From Fordism to Toyotism? The Organisation of the Labour Process in the Japanese Automobile Industry’, Politics and Society, Vol.14 No.2 (1985), pp.115–46; B. Coriat, L'Aatelier et le Robot: Essai sur le Fordism et la Produsion de Masse a l'Age de l' Electronique (Workshop and the Robot: Essays on Fordism and Mass Production) (Paris, 1990). See A. Altshuler, The Future of the Automobile: The Report of MIT's International Automobile Program (London, 1984); K. Hoffman and R. Kaplinsky, Driving Force. The Global Restructuring of Technology: Labour and Investments in the Automobile and Components Industry (Boulder, CO, 1988); J.P. Womak, D.T. Jones and D. Ross, The Machine that Changed the World (New York, 1990); U. Jürgens, T. Malsh and K. Dhose, Breaking from Taylorism: Changing Forms of Work in the Automobile Industry (Cambridge, 1993); M. Kenny and R. Florida, Beyond Mass Production: The Japanese System and its Transfer to the US (Oxford, 1993). The reference is to S. Tolliday (ed.), The Rise and Fall of Mass Production, Vols. 1 and 2 (Northampton, 1998); R. Boyer, E. Charon and U. Jürgens (eds), Between Imitation and Innovation: The Transfer and Hybridisation of Productive Models in the International Automobile Industry (Oxford, 1999); R. Boyer and M. Freyssenet (eds.), The Productive Models: The Conditions for Profitability (London, 2002). B. Jessop, ‘Fordism and Post-Fordism: A Critical Reformulation’, in M. Storper and A. Scot (eds.), Pathways to Industrialisation and Regional Development (London, 1992), pp.46–69. E. Bartezzaghi and F. Turco, ‘Flessibilità ed Efficienza nel Manufacturing’ (Flexibility and Efficiency in Manufacturing), L'Impresa (The Business Enterprise) (July 1989), pp.60–67. Between 1972 and 1987 the number of robots deployed by Fiat increased from 20 to 1,126. The spot-welding shop absorbed 74 per cent of the total number of robots in 1987. See A. Enrietti and G. Fornengo, Il Gruppo Fiat. Dal'inizio degli anni Ottanta alle prospettive del mercato unificato del 92 (The Fiat Group: From the Early 1980s to the European Common Market Integration in 1992) (Rome, 1989), p.83. Enrietti and Fornengo, The Fiat Group, pp.81–91; G. Volpato, ‘The Automobile Industry in Transition: Product, Market Changes and Firm Strategies in the 1970s and 1980s’, in S. Tolliday and J. Zeitlin (eds), Between Fordism and Flexibility (Cambridge, 1987), pp.191–223; G. Volpato and P. Bianchi, ‘Flexibility as Response to Excess Capacity: The Case of the Automobile Industry’, in C.W.F. Baden-Fuller (ed.), Managing Excess Capacity (Oxford 1990), pp.215–46; Volpato, The Fiat Case, chapter 3. R. Loke and S. Negrelli, ‘Il Caso Fiat’ (The Fiat Case), in M. Regini and S. Sabel (eds), Strategie di Riaggiustamento Industriale (Industrial Restructuring Strategies) (Bologna, 1989), pp.61–94; G. Bonazzi, Il tubo di cristallo (The Crystal Tube) (Bologna, 1994), pp.69–75. Definitions provided by Fiat management and quoted by R. Merli, ‘Il Robogate nella produzione della Fiat Uno’ (The Robogate in the Manufacturing of the Uno), in A. Dina (ed.), Modello Robot (Model Robot) (Bologna, 1984), p.139. The Fiat management distinguished between strategic and operational flexibility, with the former referring to plant convertibility and the latter referring to both process and product mix flexibility. The pattern of definitions provided by the Fiat management broadly reflects definitions developed by academics. Park and Son have divided flexibility into four categories: equipment flexibility; product flexibility; process flexibility; and demand flexibility. The difference between the Park and Son and the Fiat management definitions is that the latter includes equipment flexibility and product flexibility within the category of plant flexibility. In addition, Park and Son refer to system flexibility as process flexibility. C.S. Park and Y.K. Son, ‘An Economic Evaluation Model for Advanced Manufacturing Systems’, Engineering Economics, Vol.34 (1990), pp.1–26. See M.J. Chandra and C.M. Armonosky, ‘Analytical Techniques for Justification of Manufacturing Systems’, in H.R. Parsei and A. Mital (eds), Economics of Advanced Manufacturing Systems (London, 1992), p.114. See M.A. Golden, A Rational Choice Analysis of Union Militancy With Application to the Cases of British Coal and Fiat, Western Societies Program, Occasional Paper No.26, Center of International Studies, Cornell University (Ithaca, NY, 1990). See also V. Castronovo, Fiat 1899–1999: cento anni di storia italiana (Fiat, 1899–1999: A Hundred Years of Italian History) (Milan, 1999), pp.1510–28. G. Contini, ‘The Rise and Fall of Shop-floor Bargaining at Fiat, 1945–1980’, in Tolliday and Zeitlin (eds), Between Fordism and Flexibility pp.144–67; S. Musso, ‘Production Methods and Industrial Relations at Fiat (1930–1990)’, in H. Shiomi and K. Wada (eds), Fordism Transformed (Oxford, 1995), pp.243–68; S. Musso, ‘Le relazioni industriali alla Fiat ‘ (Industrial relations at Fiat), in Annibaldi and Berta (eds), Big Business, pp.165–231. Basting is the stage in which the platform and the body are linked together by welding the two sub-components at a number of points. Finishing is the spot welding of the body to the platform along the edges of each sub-component. The commitment to automation was remarkable. In 1960 180 million lire were invested in the car sector, of which 130 million lire were external funds. Between 1960 and 1963, extraordinary investments plus depreciation reached 500 billion lire, with 310 billion devoted to the car sector alone. The size of investment was remarkable considering that total sales, including lorries, trucks and other products, amounted to 457 billion lire in 1960 and 794 billion in 1963. ASF, ‘Verbatim Reports of the Administration Board Meetings, 30 July 1960, p.160, Book 28. Also, 4 Feb. 1964, p.99, Book 34, and 26 Jan. 1965, pp.145–85, Book 35. Ibid., p.145. Ibid. This appears evident from the complete reading of the reports of the Board meetings. ‘Outstanding orders’ refers to cars already booked by clients, for which a deposit had already been paid or a loan had been subscribed, but which had yet to be delivered to clients. ASF, Verbatim Report of the Administration Board, 30 Jan. 1967, pp.103–4. D. Giacosa, Progetti alla Fiat prima del computer (Designing at Fiat before CAD) (Milan, 1980), p.299. Elaboration of data from ANFIA (Italian Association of Car Manufacturers and Traders), L'automobile in cifre (Automotive Figures) (Turin, 1996), pp.232–8. D.T Jones and S.J. Paris, ‘Plant Size and Productivity in the Motor Industry: Some International Comparisons’, Oxford Bulletin of Economics and Statistics, Vol.40 No.2 (Oxford, 1977), pp.123–46. G. Guidi, A. Bronzino and L. Germanetto, FIAT: Struttura aziendale ed organizzazione dello sfruttamento (FIAT: Business Structure and Organised Exploitation) (Milan, 1974), p.47. Interview with the author, 18 March 1999. R. Merli, The Robogate, p.135. See also Camuffo and Volrato. ‘Dynamic Capabilities’, p.818. ASF, Fiat Department of Technology Development,. ‘Il Robogate’ (The Robogate), Fiat internal paper. Malandri, interview with the author, 18 March 1999. See Volpato, The Fiat Case, in particular chapter 3. The optimum capacity utilisation is the level of output that optimises the production function. This is lower than plant saturation level. For the relationship between capacity utilisation and return to scale, see M. Moroni, Production Process Change (Cambridge, 1992), pp.142–7. Data concerning Cassino and Rivalta have also been published by the Department of External Relations of Fiat. However, according to Malandri and Scimone, the optimum capacity utilisation of Cassino was 1,400 rather than the 1,300 cars per day quoted by the External Relations Department. Given that both Rivalta and Cassino shared the identical Robogate technology and that both sources quote 1,400 cars per day for Rivalta, the figure quoted by Scimone for the Cassino plant is more credible. The optimum daily capacity of the Mirafiori plant was 850 units for each of the three Robogate lines. That of the Chivasso and Termini Imerese plants was 400 units, while the optimum capacity of the Desio plant was 300 units per day. Malandri and Scimone, interview with the author, 18 March 1999. S. Musso, Industrial Relation at Fiat, pp.165–231. Volpato and Bianchi, Flexibility, p.241. In the case of Desio and Termini Imerese, capacity utilisation recovered and even exceeded the optimum level after 1985, because Fiat had sold Seat to Volkswagen and the production of the Panda in Pamplona and Barcelona was transferred to the Italian factories Malandri and Scimone, interview with the author, 18 March 1999. It is important to note that the production of the Fiat Uno was not moved to Cassino and that this information is based on the Fiat production file, which specifies where and when cars were welded and assembled, and whether cars had been welded in one plant and assembled in another. The information has been also confirmed by Malandri and Scimone. This contradicts information given by Bonazzi, who says that some units of the Uno model were shipped to Cassino for final assembly. In any case, Bonazzi refers only to assembly and not to monocoque welding. See Bonazzi, The Crystal Tube, p.71. In this respect, it is important to stress that the literature on the evolutionary theory of economic change and the literature on path dependency are deeply connected to each other. Path dependency refers to the situation in which an industry is locked into an inferior technology, due to a number of possible factors, including high sunk-costs, managerial inertia and uncertainty over the development of the external environment. For the concept of path dependency see the classical work by P. David, ‘Clio and the Economics of QWERTY’, in U. Witt (ed.), Evolutionary Economics (Aldershot, 1993). See also L. Magnusson and J. Ottoson (eds.), Evolutionary Economics and Path Dependence (Cheltenham, 1997).