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  • Vom nationalen zum globalen Wettbewerb: Die deutsche und amerikanische Reifenindustrie im 19. und 20. Jahrhundert
  • Harm G. Schröter
Paul Erker. Vom nationalen zum globalen Wettbewerb: Die deutsche und amerikanische Reifenindustrie im 19. und 20. Jahrhundert [From National to Global Competition: The German and American Tire Industry during the Nineteenth and Twentieth Centuries]. 710 pp. Paderborn: Schöningh, 2005. ISBN 3-506-71788-X, €98.00.

Paul Erker begins with the question of how an uninspiring, black, nondurable commodity product such as a tire could be interesting. He emphasizes that, since its invention in 1888, the tire has undergone several radical technical changes, and because his story is about competition the issue is thus thrilling and "even dramatic" (p. 9). It is for these reasons, and because the author systematically compares American and European firms, that the book—written in German—should be presented to the American reader. Erker's introduction is fairly heavy but nevertheless necessary because in it he defines his approach. While the work is theory-related and utilizes Michael Porter's writings and the concept of "dynamic competition," Erker's findings also are based on extensive archival research, especially as he traces the firms Goodrich and Continental AG and their major competitors through a whole century (1870–1970).

Both companies started with technical rubber products and went into the tire business before the First World War, contributing to the establishment of an oligopoly in the capital-intensive industry before 1914. After the Second World War both diversified again. In the end, Goodrich separated from tires, and today it concentrates on chemical- and aerospace-related activities. Continental AG, while maintaining a tire division, became foremost a systems supplier to the automobile industry. Both companies mastered the four main technological trajectories of the tire industry (high-pressured linen tires up to 1914; medium-pressured "balloon tires" in the 1920s; nylon tires in the 1950s; and steel-enforced ones in the 1970s).

Erker refers to the period 1918–1936 under the heading "Global Oligopoly Competition in Instable Markets." Although the automobile industry grew during this period, overcapacities in the tire industry outpaced demand. Erker shows how innovation and rationalization played important roles but nevertheless were trumped by financial issues. While Goodrich lost ground to its American competitors, Continental AG managed to hold its market against the two other large European companies, Dunlop and Michelin. During this phase the American "Big Four" founded a worldwide cartel, the Rubber Export Association, that dictated prices and conditions on world markets from 1929. Of the Europeans firms, only Dunlop was [End Page 523] admitted into the cartel. Continental AG cooperated as a junior partner, while Michelin kept itself more or less outside.

Erker ends the second period of his study in 1936, the year in which states on both sides of the Atlantic intervened into the tire business. As war threatened, rubber became a strategic product, a fact that continued through the Cold War up to the 1970s. Erker's general summary discusses his overall findings in light of economic theory on competition. In spite of intense national and international competition, its means were quite traditional, amounting "in the end [to] nothing but the old strategies of competition—forward and backward integration and diversification" (p. 670). At this point Erker underestimates his own contribution since he does show how Goodyear used its market share as an instrument, how Michelin leveraged its research and development, and the like.

In the end Erker confronts theories on competition with his evidence. He finds that the tire industry provides striking challenges to theories of oligopolistic competition. He demonstrates that technical innovation and the state played only minor roles (though he seems to contradict the latter in chapter 3); that the slump of the 1930s caused the deepest cut into the industry, making external developments more important than internal ones; that until the 1970s all major changes took place first in the United States and later in Europe; that greater competition was triggered by crises, rather than the other way around; and that instruments of competition were always used as a bundle, though not always rationally. Erker also argues that the size and structure of demand...

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Additional Information

ISSN
1467-2235
Print ISSN
1467-2227
Pages
pp. 523-525
Launched on MUSE
2005-08-25
Open Access
No
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