manufacturing system to minimize waste, maximize quality and flexibility, and stimulate innovation. Lean production has turned traditional assumptions, measurements, and management of manufacturing in the auto industry upside down. Lean producers engineer flexibility into the production process (e.g., through rapid die changing); expect workers to perform multiple tasks, ensure the quality of their work, and call attention to defects to discover their source (by stopping the line if need be); work closely with suppliers to allow them to determine the most effective manufacturing processes for the parts they supply; and create engineering teams to work on product and process engineering simultaneously. The results are much higher product quality, virtually eliminating inspection and rework; lower production costs; and greater production flexibility, allowing more models to be produced with less production capacity and rapid model turnover.

As these concepts have spread from Toyota to other Japanese manufacturers and, more recently, to U.S. automakers, the competitive advantages they provide result not only in increased market share for lean producers but also redefined customer expectations. Lean production is, therefore, upping the ante of what it takes to be competitive in the automobile industry.

Despite the size of the industry, the ubiquity of its product, and the size of the relatively few firms engaged in automobile assembly, it is only recently that international site location has been an issue for automakers and governments. Because of the history of the industry and the distinct character of demand in different markets, the auto industry has always been home market focused. Although Ford opened an assembly plant in England in 1911 and General Motors purchased Opel in 1925, both ventures were devoted to serving unique European demands and were managed largely independently from their American parents. Only in the past decade or two has the automobile industry begun to globalize; the trend is strong, but progress is still limited. In 1988 Ford was by far the most globalized of the 11 high-volume producers, but it still produced 66 percent of its