This paper examines empirically the relationships between the “Big Two" US automobile companies Ford and General Motors (GM) and US tire manufacturers before the World War II, mainly using the primary historical records of the Ford Motor Company and Goodyear Rubber and Tire Company.
The previous studies on Japanese “supplier system" emphasize the Japanese specialty, the organizational interfirm relationship, primarily based on research on the dealings between big automobile companies and their small part affiliates. However, the “supplier system" also includes a lot of dealings between automobile companies and big independent part companies, of which the tire business is a classic example. Moreover, it is highly probable that intermediary products including tires were transacted through long-term contracts on a negotiation basis, particularly where dominated by a small number of producers.
As such, long-term contracts on a negotiation basis were highly likely to have been not just a Japanese phenomenon but a global phenomenon, so an international comparative analysis is vital. As a preliminary study for a comparative analysis of historical Japanese and US business dealings, this paper analyzes the dealings of US tire manufacturers before World War Ⅱ.
This analysis finds that the organizational principle was a strong factor in tire transactions between the big two automakers, and big tire manufactures. Systematic business relationships among companies, which have been seen as a unique characteristic of Japan, were also a frequent feature of the prewar US tire industry.
On the other hand, underlying the secretive long-term contracts on a negotiation basis, market forces and market principles were hard at work. Moreover, the dealings between Ford and Firestone and between GM and US Rubber were phenomena that included both organizational and market aspects.
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