Maquiladora:
In the 1940’s and 1950’s, the U.S. allowed Mexican workers to come
legally across the border and work under a “Bracero Program." This provided
the United States with migratory farm hands to pick American grapes, onions,
apples, etc. at low wages. “Bracero” is the Spanish word for “hired
hand” or “day laborer," and these jobs provided money for poor families
throughout improvised Mexico. When the laws changed in the early 1960’s,
Mexican workers were shut out of the U.S., losing a source of income, and
sparking an inevitable rise in illegal immigration. In an attempt to
compensate, Mexico established an “in-bond” border industrialization
program, in 1964 that became known as the “maquiladora” program.
The maquiladora plant could be 100% owned by a foreigner (other new industry
in Mexico had to be majority owned by Mexicans). The maquiladora could import
raw materials into Mexico, in-bond, without paying import duties; these
materials could be next assembled into a finished product, and then exported
100% to the U.S. Under United States Customs Regulations that had existed
since the 1930’s, these Mexican products (assembled from U.S. sourced
materials) would be charged U.S. duty only on the cost of the “valued
added” to the product in Mexico—or the cost of assembly. This combination
of Mexican and U.S. regulations sparked some initial investment in
maquiladoras, but not much.
In Nuevo Laredo, the first maquiladora was
established in 1969—A.C. Neilson, a company whose sole function in Nuevo
Laredo was to count grocery store promotional coupons. In 1971, the Barry
Corporation opened a maquiladora to sew ladies’ slippers, and in 1972, the
Springfield Wire Company started a maquiladora to assemble heating elements
for small appliances.
In the mid 1970’s, a maquiladora by the name of “Transitron” was
established. In a few short years, it nearly ruined the reputation of Nuevo
Laredo as a good location for industrial investment. Transitron was in the
business of assembling electrical components in a large building in the
southern part of the city. Its management consisted largely of Laredoans who
crossed the river each day, and were inexperienced with dealing with Mexican
workers and unions. The labor boss, at that time, was Pedro Perez Ibarra. He
would become a typical “calcique” or political boss as well as union
leader. As Nuevo Laredo’s calcique, he picked city officials, and his
political influence grew to where he was rumored to have the power to also
choose the State’s Governors. His political control was made possible by
the one-party state that was Mexico through the period from the 1929 to 2000.
Transitron suffered a prolonged and nasty strike. The “chamber of
commerce” types in Laredo consistently blamed the strike on the management.
Similar voices in Nuevo Laredo agreed, but there was still an undercurrent of
warning to newcomers—be careful how you deal with the Mexican unions.
By 1981, a number of companies had established maquiladoras in Tijuana,
Ciudad Juarez, and Matamoros—all border cities. In Nuevo Laredo, there were
seven in total, with Sony having established an assembly operation in 1979.
Of these, only the successor to A. C. Neilson (NCH Promotional Services),
Barry, Springfield Wire, and Sony remained operating in Nuevo Laredo in the
year of 2000. The total number of maquiladoras in Nuevo Laredo by 2000 (the
peak year for these plants) was 64, employing approximately 22,000 persons.
In Mexico as a whole, approximately 3400 maquiladoras employed over 1.2
million persons that year.
In the early 1980’s maquiladoras existed primarily as light assembly
operations, employing predominately young women. The legal age for work in
Mexico is 16, and maquiladoras were filled with 16 to 18 year old females
working at their first paying job. Compensation was at the Mexican minimum
wage with those benefits provided by the Mexican Labor Law. Since this law is
based on a European socialist model, it does provide for family health
insurance, paid vacations, Christmas bonuses, and medical leaves. As
medical leaves included pregnancy, maquiladoras would routinely screen the
young women for this condition—and married women were seldom hired. These
maquiladora jobs were new to the Mexican economy and to this young female
segment of the population, and companies had no shortage of applicants for
their factories.
The derivation of the name “maquiladora” is from the Spanish word
meaning a mill where you bring your corn or wheat to be ground. The usual
arrangement at such a mill was for the mill owner to keep a portion of the
flour in payment for services. Since the in-bond plants received parts not
owned by the plant, performed an assembly-only operation, and shipped the
assembly back to the original owner of the parts—the term “maquiladora”
was an analogous descriptive name for these plants.
“Maquiladora” was not the term consistently used, however.
Proponents of these plants preferred the term “Twin Plants.” This name
symbolized the relationship of the plant(s) that produced the parts (mainly in
the U.S.), with the assembly (or twin) plant located in Mexico. One the most
widely read trade magazine about maquiladoras was “The Twin Plant News”
published in El Paso, Texas. Politicians in U.S. border cities envisioned the
U.S. half of the twin plants being relocated from northern states to their
side of the border, but with a few exceptions, this never happened. The
shortened version of maquiladora—“maquila” is also often used. The
provisions of the North American Free Trade Act, signed on December 17, 1992
by U.S. President Bush, Mexican President Salinas, and Canadian Prime Minister
Mulroney, provided for “maquiladora” plants to cease their existence by
1-1-2001. The plants are still there, but now exist as Mexican plant
operations under NAFTA.
Sunday, November 23, 2014
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