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The ongoing history of a Chilean metal products and machinery firm

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Author: Katz, Jorge - Vera, Héctor UN symbol.: LC/G.1986-P p. 129-146 December 1997

Description

Processes of adjustment and restructuring of the production sectors to a new system of macroeconomic incentives are slow, costly and more inefficient than conventional microeconomic theory would lead one to suppose. In this article, the authors explore the process of the restructuring of production of a Chilean metal products and machinery company and the way it gradually modified its operations from the 1970s onwards, adapting them to new macroeconomic and mesoeconomic signals. As is well known, in the last two decades the system off incentives and the regulatory framework for production activities in Chile have undergone profound changes, gradually moving --with advances but also setbacks-- towards an organizational model more open to external competition, more deregulated, and with less public sector participation in the field of production proper. In the case of the company studied here, in spite of the considerable length of time that the Chilean economy has been open to the exterior and the fact that the company has been notably successful in its global restructuring, the transition to international levels of productivity is still not complete and displays areas of fragmentation and weakness. Section I of the article describes the general background for the functioning of the Chilean economy in which the company's activities evolved; section II describes the evolution of the firm's manufacturing facilities, and the third and last section explores the links between microeconomic and macroeconomic aspects and sets forth some conclusions drawn from this study.