|
|
|
 News Around the Republic of Mexico | January 2005 
Mexican Factories Make Comeback Along Border
 Associated Press
 McAllen, Texas - Ask Nancy Boultinghouse why fewer Mexican border factories are moving to China and she quickly turns to her computer to pull up a map and a PowerPoint presentation.
"Logistics," the McAllen Economic Development Corp. marketing director said with a smile, tracing trade routes from the tip of Texas to the U.S. interior. "Logistics plays a big part in the final cost of something. There are a lot of products it makes no sense to produce in China."
In recent years, the once-booming manufacturing business along the U.S.-Mexican border suffered a huge reversal, with jobs transferred by the hundreds of thousands to China and other Asian nations where labor is cheaper. But at the dawn of 2005, that threat seems to be receding as border manufacturers known as maquiladoras reclaim business thanks to their proximity to the United States.
From 2000-03, about 900 maquiladoras closed, at a cost of more than 292,000 jobs. But business picked up in 2004, in June exporting $7.7 billion worth of goods, an all-time monthly high. Companies say they'll invest $4.5 billion in new or expanded operations in 2005, restoring or replacing two-thirds of the lost jobs.
Analysts attribute the comeback in part to resurging U.S. consumer demand, the strong Mexican peso, and problems U.S. manufacturers have encountered with China's still-young industrial infrastructure. Mexico also moved to postpone tariffs that could have been imposed under the next phase of the North American Free Trade Agreement.
Boultinghouse said the biggest reason for the comeback is distance: it costs much less to ship manufactured goods to the United States from Mexico than it does from China. For large goods, such as cars and side-by-side refrigerators, shipping prices can outrun savings on labor.
Across the border from McAllen, that economic reality has helped the city of Reynosa. While it lost four plants, it gained others, including a Maytag Corp. plant moved from Illinois. McAllen's fortunes are closely tied to Reynosa's. The U.S. city has support operations that channel materials to the plants and finished goods or components back north.
Boultinghouse said Reynosa and McAllen have fared better than other border towns because they established themselves early as an obvious choice for Midwestern automobile manufacturers. Small, labor-intensive parts are produced in Reynosa, then shipped to Detroit's assembly points.
But Tijuana, across the border from San Diego and home to the most maquilas, lost 258 plants, about 20 percent. Twenty-three percent of maquila workers, or about 67,000, lost their jobs in Ciudad Juarez, across from El Paso. Some 18,000 workers lost their jobs in Matamoros, across from Brownsville. The plants that left were producing low-priced, labor-intensive goods such as clothing, small electronics and toys. Those cities are now concentrating on bulkier items, motor vehicle parts and assembly, goods that are copyright-sensitive (China's stance on trademark law is murky), and items bound primarily for the United States.
Angel Pola, who just graduated from a Matamoros college with a degree in chemical engineering, was one of the first Gonzalez hired. As he demonstrated new molding machinery, the 22-year-old, who wondered if he'd ever get a job, said he no longer worried about China.
"Here in Mexico, we are better, we want to produce better quality, produce more products," he said. "China's going to be afraid." |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us