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 Business News | January 2008 
Strain on Auto Parts Industry in Mexico Reflects U.S. Woes
 Stephen Franklin - Chicago Tribune
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| | Jose Enrique Morales, left, helps his children Maria, 10, center, and Arturo, 11, with their homework in his apartment in Puebla, Mexico, last month. Morales was fired from a Johnson Controls plant because of problems he had with the union. (Alex Garcia/Chicago Tribune) |
Puebla, Mexico — She came home from the auto parts plant feeling faint, the burden of being six months pregnant and working an eight-hour shift on her feet with only a half-hour off for lunch.
She wondered what would happen if she didn't take care of herself, but said her main concern was keeping her $55-a-week job at the Johnson Controls plant, regardless that she is paid nearly 40 percent less than those working beside her.
"It is very little. But I have to support my son," said the small, almost birdlike woman in her 30s who asked that her name not be used out of fear she'd lose her job.
She is just a lowly "temporary worker" at the bottom of Mexico's auto parts industry. Such workers are growing in number as the country's parts makers struggle to reduce costs to remain competitive.
Not so long ago, Mexico floated along as a low-cost producer to the auto parts world. But now its niche is threatened by global rivals who can trump it with lower salaries or superior quality and productivity. As a result, Mexican auto parts firms keep pressing to trim costs, and Mexican workers find themselves working longer, harder and sometimes for less.
It's a mirror of the process that plunged a number of U.S. auto parts firms into bankruptcy and which wiped out 200,000 auto parts jobs in the United States in the last seven years — nearly one-fifth of the nation's auto parts industry.
Mexico's auto parts companies are being challenged from almost every direction.
Chinese companies are quickly siphoning away auto parts work that would have been done not so long ago in Mexico. And one Chinese firm, FAW Group Corp., even plans to plant a beachhead in Mexico with its recent announcement it will build an auto plant here to make cars for Mexico and Latin America. That step is likely to usher in a wave of Chinese auto parts firms.
Eastern European companies, which boast higher levels of productivity and technological expertise, also threaten to pull away business.
And there also is Central America, where workers earn a fraction of the $1.50 an hour Mexican auto parts workers typically receive.
Mexico is just one player in a global market, explained Jeff Williams, a group vice president for Milwaukee-based Johnson Controls, one of the largest auto parts suppliers in the United States. On the basis of economics alone, he said, "There are some regions that may be more attractive than Mexico."
And yet the greatest pressures to cut costs comes from within Mexico.
Some Mexican auto parts firms have stepped up recruitment of workers from distant poor communities or from countries that have suffered natural disasters, said Huberto Juarez Nunez, an auto industry expert at the University of Puebla. And some companies have shifted plants to communities where workers will accept lower wages, he added.
When Jose Enrique Morales, 35, was hired at the Johnson Controls plant in Puebla six years ago, he thought his life had turned around. But after a few years, Morales noticed that his pay and benefits were barely growing. Yet he did not speak up.
Then last June he went to a union meeting where he and others raised a question: Why haven't they received better pay increases? A month later, Morales was fired.
Johnson Controls officials declined to comment.
Meanwhile, Aldaberto Romero Corona, a union shop steward at Johnson Controls, called the workers' complaints "a lie and a half." Morales looked for other work, but couldn't find any. He pawned his wife's jewelry and sold a television and stereo and borrowed money from relatives.
In October, the United Auto Workers union began paying $450 a month to Morales, who has been organizing the Johnson Controls workers lately on behalf of an independent union. The UAW also wrote to Johnson Controls, saying it should not have bowed to the Mexican union's demands to fire Morales.
"I did the right thing," Morales said. "I just want my children to live better than me." |
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