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Mexico's maquiladoras, those border plants that traditionally have been associated with basic assembly and rough manufacturing work, are undergoing rapid change. Others may wait for the North American Free Trade Agreement (NAFTA) to be ratified, but maquiladora managers already are proving that U.S. and Japanese corporate commitment coupled with Mexican labor can create a new industrial powerhouse that incorporates the best of innovative management techniques.
Maquiladoras were first established under Mexican law in 1965 after the United States rules and Mexican tightened its immigration farm laborers were no longer able to find seasonal work in California. "Maquiladoras are a great example of what a developing country can do to help itself economically," Oscar Martinez Iriberri, president of the Tijuana Maquiladora Association, told a recent American Management Association/International study tour in Tijuana.
As the maquiladora program was originally conceived, U.S. companies set up "twin plants" on either side of the border. The U.S. plant would manufacture components and ship them across the border, the labor-intensive work of assembly would take place in the Mexican facility, and the finished piece would be shipped back across the border for U.S. consumption, with duty paid only on the value-added in Mexico. time, the whole reason for establishing maturing plants in Mexico was to take advantage the country's low labor rates.
Today, however, low wages are no longer a sufficient reason to start a maquiladora, because Mexican wage rates can no longer compete with the low cost of labor in Asia. The typical maquiladora semi-skilled worker makes $2 hourly today; a counterpart in the Far East might earn that much in a day. By the early '80s, "two-thirds of the maquiladora plants had packed up and moved to the Far East," estimated Luis Zuniga, senior vice president of Sony and general manager of its Videotec operation in Tijuana.
Managers of the maquiladoras that survived the '82-'83 recession realized that their competitive niche was no longer cheap labor; rather, it was a labor supply located at America's back door that offered the promise of short delivery cycles to the U.S. market.
"The toy industry has to be able to respond quickly to fads," said Robert Jezak, vice president and general manager of Mattel's MABAMEX facility. His fully integrated facility, which...