Manufacturing: the new case for vertical integration

The article argues that the solid corporation will continue to view vertical integration as a critical part of manufacturing reform. Manufacturing reform and backward integration are related in insidious ways to the three stages of production over which the big manufacturers preside. Without integration, technology-based corporations may wind up pauperizing upstream components producers in order to earn premiums for downstream assembly and distribution operations, businesses that are comparatively flush. The authors elaborate on the production process which are divided into three stages: the assembly stage, the sub-assembly stage, and the component stage; at each there is a separate tier of factories and businesses. They also discuss the implications of the Western companies' leaning toward less integration.