| This study addresses the political economy of firm-state relations in the North American automotive industry from 1960 to 1994, when the governments of the United States, Canada, and eventually Mexico negotiated a series of three managed trade arrangements to govern the continental integration of automobile production: the 1965 Auto Pact between the United States and Canada the 1989 Canada-United States Free Trade Agreement and the 1994 North American Free Trade Agreement. During each negotiation, the General Motors Corporation, Ford Motor Company, and Chrysler Corporation adopted a joint position (Detroit Consensus) that was ultimately reflected in the details of the agreements negotiated by the governments.Following a review of contending theories of firm-state relations in economics, political science, business studies, and international relations, the study focuses on five authors whose work is used to form hypotheses about how firms and states should interact during the three negotiations and periods in between. Attention is given to the political roles of independent automotive suppliers, European and Asian automakers, and organized labor. At the heart of the study is the question: why did the firms form a Detroit Consensus position for each negotiation? Additionally, what do the firms' choices tell us about the power relations between them and these states and other firms?For hypotheses based on four of the five authors, this study finds contradictory evidence. Specifically, while these authors posited structural dominance of either firms or states as a permanent feature of these relationships, in practice the pattern of dominant influence shifted over time. The fifth model of a dynamic cycle of relative power is found to provide the best explanation for this variation, with changes in the automotive trade regime coinciding with a Detroit Consensus for specific changes that sought to limit the loss of U.S. market share of General Motors, Ford, and Chrysler. |
