In the face of declining profitability, manufacturers made efforts to revive their businesses. In the first place, firms turned to their successful competitors and began to model themselves after them. The American Fordist model was to be replaced by the Japanese Toyotist model. In terms of the labour process, production was to be streamlined. [...] Companies were increasingly told by shareholders and management consultants to cut back to their core competencies, any excess workers being laid off and inventories kept to a minimum. [...] Yet these efforts met with counter-attempts by Japanese and German competitors to increase their own profitability [...] The result was continued international competition, overcapacity, and downward pressure on prices.

The second major attempt to revive profitability was through an attack on the power of labour. [...] The drivers behind this shift were to reduce benefits and liability costs, in an effort to maintain profitability levels. These changes inaugurated the secular trends we have seen since, with employment being increasingly flexible, low wage, and subject to pressures from management.