Maquiladora jobs lost by the thousands

officials alarmed

August 28, 2001|By DARREN SIMON, Staff Writer

The maquiladora industry, a central part of the Mexican economy, has faced closures this year that have left as many as 200,000 people out of work.

All along Mexico's northern border, maquiladoras have been closing, including in Mexicali, where officials say 6,000 to 8,000 people have lost or will lose their jobs before the end of the year.

While Mexicali officials voice concern about the losses, they are optimistic that before the end of the year new investment will make up for the impact.

Mexico's Calexico-based consul, Rita Vargas, said as many as seven maquiladoras in Mexicali have closed their doors this year or will do so before the year's end.


Fernando Arango MagaƱa, director of the Maquiladora Association in Mexicali, said he knows of four maquiladoras that are closing, but he added not every company is part of the association so the number could be greater.

The maquiladoras started in Mexico in the 1960s when companies started to locate manufacturing operations in Mexico because the costs were lower.

Since then companies from the United States, Asia and Europe have opened operations all along the U.S./Mexican border and those maquiladoras have become a key part of the Mexican economy and a major employer.

Vargas said the maquiladoras are one reason people flock to border cities.

This year, that has started to change.

Vargas said in Baja California alone, about 30,000 people have lost their jobs since January. She said the majority of those lost jobs have been in Tijuana, but Mexicali has been affected. She said some 25 maquiladoras have closed in Baja California.

Arango blamed a slowdown in the U.S. economy. While U.S. officials think the country will avoid a recession, there is mounting concern about the country's dwindling surplus.

Nancy Treadwell, a regional economist with the U.S. Department of Labor Statistics, said there has been a slowdown in the economy in terms of slower growth.

She said there has been a decline in the past year in manufacturing. Last year about 18.5 million people were employed in the manufacturing industries. As of July that number decreased to 17.7 million, a loss of about 800,000 jobs.

In July alone, 49,000 jobs were lost in manufacturing, Treadwell said.

Arango said what happens in the United States directly affects Mexico's economy. He pointed out 85 percent of Mexico's exports go to the United States and the maquiladoras are directly tied to the export business.

"Things will improve when they start to improve in the United States," Arango said Monday.

But, Arango said, it is not just U.S. companies pulling up stakes in Mexicali. He said Asian companies are among those closing. Again, he said the slowdown in the U.S. economy is to blame, adding when the United States has economic downturn it affects the world.

Still, officials say the news is not all bad.

They point out that even as some maquiladoras are closing, there is new investment that has taken root in Mexicali and more is expected to come before the end of the year.

The question is will the new investment make up for what has been lost?

Sergio Tagliapietra, president of the Industrial Development Commission in Mexicali, said he thinks the new investment will create a balance in the city's economy.

"We will balance or recoup what we have lost," he said Monday.

He said companies still know it is less expensive to open operations in Mexico and that means companies from around the world are still interested in Mexico.

He said of the losses in the maquiladora industry, "We have been impacted immediately because we live on the border, but we are also the first one to react."

Imperial County Supervisor Wally Leimgruber said county officials are aware of the losses in the maquiladora industries in Mexicali and it is a "major" concern.

Leimgruber added he is hopeful there will be new investment to replace what has been lost because there is a direct tie between the county and Mexicali.

Imperial County officials are looking to the development of warehousing to serve the maquiladoras. If there are fewer maquiladoras there will be less need for the development of warehouses in Imperial County.

"We would like to see the maquiladoras flourish in Mexicali," Leimgruber said.

Tagliapietra pointed out that the North American Free Trade Agreement between Mexico, the United States and Canada has been both a blessing for his country and a bit of a problem.

He said it has created a dependency for Mexico on the United States.

"When you are dependent, you are at risk," he said, adding Mexico needs to diversify its economy so it is not just looking toward exports to the United States to maintain the economy.

"We have to diversify," he said. "We have to increase our internal market."

Staff Writer Darren Simon can be reached at 337-4082.

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