US-Brazil Economic Policies and the Role of Multilateral Organizations


We employed numerous datasets to analyze quantitative and qualitative trends in employment in the aeronautic and automotive industries in France and Brazil, including national accounts, information from industry associations, and information from the firms under consideration.
Because of its strong success, the French aeronautic sector was able to create jobs in France, primarily in major corporation subcontracting enterprises, and raise France's proportion of skilled European employment (in R&D). However, these tendencies may not continue. Forecasts for skilled employment in France's Greater Southwest region forecast a reduction in job numbers, which is cause for concern given the region's prominent role in the global supply chain of large firms.

 Impact on Employment and Labor




Total employment in the French automotive industry has dropped. Despite a severe decline in automobile manufacturing, automotive suppliers have created new jobs in France. However, these new positions were generated at a period when huge French automakers were increasingly involved in the supply networks of German automakers. This development has accelerated the establishment of new production facilities in Eastern Europe, as well as the establishment of new R&D centers closer to clients, primarily in Germany, resulting in a significant reduction in French businesses' domestic employment share.
The entry of large multinational automakers and automotive suppliers into Brazil, where the market is appealing due to its size, had a significant impact on automotive employment. The way the sector has responded to changes in demand, particularly during the economic crisis, has been distinct from other businesses. Automakers used partial unemployment insurance to keep their employees while they waited for demand to recover. Suppliers who specialize in high-value activities elected to minimize employment just as the industry's skill level was quickly expanding. Manufacturers and suppliers in Brazil gradually began sourcing supplies from other countries. When automobile demand fell in the early 2000s, the detrimental impact on employment in Brazil became clear. In both.

In the aerospace and automotive industries, increased worker skill levels have coincided with intense demand to reduce salaries.


Embraer's prominence as a significant aeronautical manufacturer in Brazil has attracted a few large foreign suppliers, however the majority of the systems outsourced to Tier 1 vendors are imported. Embraer's success has therefore had no effect on employment. Furthermore, as the labor has become more skilled, actual earnings have declined, indicating a loss of status.
⦁Large firms' strategies and changes in their GSCs have an impact on employment in France.
Because the two industries' market situations are so distinct, automobile and aeronautic employment has evolved in separate directions. Overall, vehicle manufacture has shifted from Western Europe (excluding Germany) to Eastern Europe, whereas aeronautic production has shifted to France, primarily to the expense of the United Kingdom. Despite these contrasts, both industries' manufacturing has become more globalized. However, employment development in France has lagged behind the rapid increase in global demand for the two industries' products.
⦁ The automotive and aeronautic industries have opposite development paths but share a trend of shifting jobs abroad.
France has managed to maintain its competitiveness in aeronautics. Employment increased significantly (39%) between 2000 and 2015. France has more aeronautical jobs than any other country in Europe, surpassing the United Kingdom, where the number of workers in the industry has decreased dramatically despite considerable development in aeronautic production.
⦁ R&D jobs: French strength in aviation versus fall in automobile
French firms in both areas have made significant attempts to expand overall R&D. These measures have benefited the French aeronautic industry, but not the French car industry, which includes subcontractors. In France and Germany, there has been a trend toward concentration of R&D employment, which is consistent with general employment trends in the two industries. Initially, France employed more people in aeronautic research and development than any other European country. The number grew quickly, and France specialized in the most complicated tasks, as evidenced by the rapid increase in the proportion of engineers and PhDs among aeronautical staff. The patterns in German automotive R&D employment are very comparable to those in French aeronautic R&D employment. In contrast, French automotive R&D employment has been dropping and of lower quality, despite the fact that the proportion of skilled occupations is higher than in Italy or the United Kingdom.

Despite a trend toward offshore that began in the 1970s (CREST, 2008), R&D is a domestic activity (Thévenot, 2007). 


The automobile and aerospace sectors have done less to internationalize their research and development than other industries (Pavlinek, 2012). The automobile industry has seen rapid outsourcing of R&D for some time, but offshoring of R&D is relatively recent. This trend is especially noticeable in France, for two reasons. First, Renault established a big R&D centre in Romania, which is involved in a variety of research areas (Rodet-Kroickvili et al., 2014). Second, as previously said, French suppliers have been integrated into the supply networks of German businesses. The location of suppliers' R&D appears to be dependent on the location of manufacturers' assembly lines for moderately complicated components. However, extremely sophisticated components (modules and systems), which absorb the majority of

Supplier R&D activities appear to be location dependent on manufacturer R&D (Frigant and Layan, 2009). The increased integration of French suppliers into German supply chains explains why some of their R&D for highly sophisticated components has been relocated to Germany. 

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