Patterns of Plant Adjustment

Abstract

This paper provides a description of the dynamic choices of manufacturing plants when they undertake rapid adjustment in output. The focus is on epsodes that involve lumpy adjustment in capital or employment. I examine the behavior of variables such as capital utilization, hours per worker, overtime use, capacity utilization, materials and energy use. Finally I describe the observed patterns of productivity during those adjustment episodes and propose some hypotheses that seem to fit them. The costs associated with output adjustment seem to arise form building and destroying a particular organizaqtion of the structure of production and associated worker experience. As such they are related to learning-by-doing and investment in specific training.capital investment, employment adjustment, capacity utilization, productivity, learning effects, specific training