Info on Maquilas

Do Maquiladoras Herald Economic Recovery?


Frontera Norte Sur
Oct-Dec 2009

Almost like shakes before the quake, changes in the production dynamic of border assembly plants can signal shifts in the economic landscape. Intimately tied to the US and global markets, the state of the maquiladora industry is frequently an indicator of things to come. For example, the downturn in maquila employment at the end of 2007 and the beginning of 2008 preceded the economic crisis that shattered the world some months later.

In Ciudad Juarez, Chihuahua, employment in the mainly foreign-owned factories dropped from 249,837 workers in January 2008 to 171,144 in September 2009. The 78,693 lost factory jobs accounted for a huge chunk of the 89,800 jobs that vanished in the border city during the same period, according to numbers from the Mexican Social Security Institute cited by the Maquiladora Association of Ciudad Juarez (AMAC).

Apart from the world recession, Ciudad Juarez has experienced an undetermined amount of job losses because of the rampant insecurity plaguing the city. Benjamin Ojeda Flores, commerce director for the Chihuahua State Secretariat of Commercial and Tourism Development, said an estimated 3,000-3,500 businesses have shuttered their doors in Ciudad Juarez as a consequence of the twin-headed crisis.

A local newspaper recently reported the stories of two men who said they lost their livelihoods due to the kidnappings of employers. One man, Jaime Portillo, said his family of seven was now trying to survive on his wife’s weekly earnings of about $47 from a Foxconn plant.

If official unemployment numbers from Mexico’s National Institute of Statistics, Geography and Informatics (INEGI) are taken into account, Ciudad Juarez, a city with an estimated population of 1.3-1.5 million, has experienced a disproportionate share of joblessness in comparison with the rest of the country during the recession. In its most recent report, INEGI calculated that slightly more than one million jobs vanished in all of Mexico, a country of more than 110 million, from September 2008 to September 2009.

Mexico’s official unemployment rate now stands at approximately 6.4 percent of the economically active population-the highest on record since the economic crash of 1995.

But some industry observers and Ciudad Juarez officials now say the worst of the economic crisis in their bellwether city is over, as more and more signs of recovery appear. According to AMAC, the industry recovered at least 4,736 jobs during the third quarter of 2009. Spread around at least 32 maquiladoras, many of the jobs were in the key electronics, auto and medical sectors. AMAC President Soledad Maynez Bribiesca added that most factory production stoppages have ended.

As many as two thousand additional jobs are expected to open up in Ciudad Juarez by year's end. What’s more, consumer appliance manufacturer Electrolux announced October 23 that it will shift more production to Ciudad Juarez in 2010 and 2011.

Yet Ciudad Juarez’s job gains are sometimes losses for others. The Electrolux jobs, for instance, consist of positions that will be moved from company plants currently located in the Iowa towns of Webster City and Jefferson.

Electrolux’s decision completed a production shift that began in 2006, when the Swedish-owned company announced 700 Iowa lay-offs in anticipation of the construction of its Ciudad Juarez facility. The move provoked anger among Iowa employees and residents.

“We keep telling the legislators to stop sending our jobs to other countries, but nobody’s listening,” said 11-year Electrolux employee Connie Elliott.

In 2006, Electrolux spokeswoman Blythe Reiss justified the Ciudad Juarez move as a necessary step to keep pace with competitors Whirlpool, GE and Maytag, all of which were selling products “made in Mexico or other low-cost countries.” Reiss contended her firm was committed to keeping the rest of its operation in Webster City but couldn’t “make promises about it.”

Less than four years later, Electrolux executive Frank Warner called the pending Iowa shut-downs a “difficult but necessary decision.” Jane Adams, Webster City city council member, predicted the upcoming round of mass lay-offs will have a “big impact on Webster City and the surrounding communities.”

On a related note, Alvaro Navarro Garate, director of financing promotion for the Ciudad Juarez municipal government, said an announcement will be made soon about a so-far unnamed Mexican-owned company that plans to move part of its production operations from the interior of the country to the border.

“We have to keep promoting this type of thing so that Ciudad Juarez is seen by Mexicans as well as the north and global community as a place of opportunity to seek the US market.”

Sources:, October 25, 2009. Norte, October 23 and 26, 2009. Articles by Antonio Rebolledo and Jesus Batista. El Diario de El Paso, October 24 and 25, 2009. Articles by Berenice Gaytan and Sandra Rodriguez Nieto., October 24, 2009. Article by Jason Pulliam. La Jornada/Notimex/Reuters. October 21, 2009. The Messenger, February 17, 2006.

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