Introduction
Two steel mills sit barely an hour apart in the heart of America's industrial rustbelt. The first is a sprawling, old, rusted mass of buildings, pipes, wires, dirt, and sheds. Inside, thousands of workers covered in sweat and grime toil over aging steel furnaces, turning molten metal into steel slabs. There is a distinct hierarchy here; each worker does his or her own job with its own rate of pay, which is codified into a legalistic system of literally hundreds of separate job classifications. Managers and supervisors in shirts and ties stand watch over the workers, who perform the actual physical labor. Strewn everywhere across the muddied dirt floor are old wires, chemical containers, tools, and all sorts of debris. The noise level is so deafening that some of the workers wear protective ear coverings. The steel moves slowly by overhead crane, or at times on aging trucks, across the huge complex to be processed into steel sheets and coils. Outside, rusted steel slabs and coils are piled everywhere; beside them rest broken-down machines, trucks, and industrial vehicles.

The second mill is a gleaming white building reminiscent of the futuristic industrial parks of Silicon Valley. Inside are brightly colored machines, day-glo-colored guardrails, and a brightly polished concrete floor. Gleaming sheets of steel zip through the machinery, like sheets of paper through a paper mill. At the center of the process stands a large glass-enclosed booth housing computers, digital readouts, and electronic gauges and controls. Workers, managers, and engineers in the same dark uniforms oversee the process, but do not actually handle the steel. The workers themselves monitor, modify, and program the computers that guide the steelmaking process. Some even carry mobile computer packs so they can control the process from anywhere within the plant. They do so with assistance from, but not the interference of, managers and engineers. These workers, engineers, and supervisors are constantly discussing new ways to improve the process and make it more efficient. Strikingly, there are no time clocks or time cards in this factory; everyone here draws a monthly salary. This steel mill produces cold-rolled steel in less than an hour from start to finish; it used to take as long as 12 days for the same process.

The first factory is owned and operated by a U.S. business, and the other is a joint venture between a Japanese steel company and an American one. This book attempts to explain how such a contrast could exist. It provides a theoretical and historical analysis of the Japanese production system and examines the transfer of that system to the United States. We argue that Japan is at the center of an epochmaking new model of technology, work, and production organization that is now being transferred to the United States and elsewhere around the globe. The key to the new model lies in organizational forms and practices--work teams, rotation, and workers' involvement--which when taken together effectively function to harness the intelligence as well as the physical labor of workers. We see this new model as involving a synthesis of innovation and production and thus refer to it as "innovation-mediated production." This revolutionary method of organizing production integrates the knowledge and intelligence of a far wider spectrum of workers, from R&D (research and development) scientists and engineers who create new technologies and product ideas to shop-floor workers who turn those innovations into products. It blurs the boundaries between innovation and production, emphasizes continuous improvement in manufacturing processes, and, most significantly, results in a powerful synthesis of intellectual and physical labor. This is a major advance over traditional fordist mass production, which was based simply on squeezing physical labor out of workers. By applying intelligence to mass production, this new model has transformed forever the way work is done, even in the United States--the home of the old Taylor-Ford model of scientific management and assembly-line mass production.

Japanese Transplants in the United States
Over the past two or three decades, entire segments of American mass-production industry declined; cities and entire regions bore the brunt of devastating deindustrialization, and millions of workers lost their livelihoods and homes. For most students of economic change, the prognosis was bleak--the United States would face long-term deindustrialization, and rustbelt industry would become a relic of the past. But in the very face of all of this, a startling turnaround emerged. Armed with a new model of production organization, Japan's leading industrial corporations are transplanting a modern manufacturing infrastructure into the U.S. industrial heartland--right beside the one abandoned by American companies. 1

During the 1980s and continuing into the 1990s, 1,275 Japanese "transplants" established manufacturing operations in the United States. 2 There are now 8 Japanese automotive assembly transplants (3 more are in Canada near the U.S. border), more than 320 Japanese-owned or Japanese-American joint venture automotive suppliers in the United States, 72 Japanese-owned or Japanese-American joint ventures in steel (roughly a dozen larger integrated steel mills, mini-mills or steel coating lines, the remainder being smaller steel processors and steel service centers), and 21 Japanese-owned rubber and tire plants. 3 A large share of these transplants are in heavy industry--the industry that experienced widespread deindustrialization, decapitalization, and disinvestment under U.S. fordism. 4 Since 1987, for example, some 32 Big Three auto plants have closed...