U.S. auto manufacturers who customar relied
on domestic materials procurement are now reevaluating
their supply schemes and broadening their
scope of potential suppliers. Ford not only manufactures
parts of its “world car,” Erika, in several
foreign subsidiaries but also buys transmission axles
from its Japanese subsidiary, Toyo Kogyo. Chrysler,
which was sourcing 1.7-liter Omni engines from
Volkswagen as long ago as 1978, now buys 2.6-liter
engines from Mitsubishi. Predictions are that by
1990 the U.S. car industry will source 35% to 40%
of its parts and components from abroad; 15 years
ago it sourced only 5% from other countries.