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Concern Grows Over Mexican Manufacturing Job Losses - 2003-03-01

In Mexico, there is growing concern over job losses in manufacturing, blamed in part on plants moving to China and other cheap labor markets. Spokesmen for the so-called Maquiladora sector are crying out for help.

For more than 30 years, Mexico's maquiladoras served as the primary engine for growth in manufacturing. These plants operate under special rules by which parts are imported temporarily from the United States, assembled into products in Mexico and then shipped back over the border with preferential treatment.

The expansion of maquiladoras fed the growth of border cities like Tijuana and Juarez. In the past few decades Juarez, which is just over the border from El Paso, Texas, grew its population from a few hundred-thousand to well over a million people. But now, the main engine of growth has stalled.

Mario Mora, director of the Juarez Maquiladora Association, says jobs are disappearing. He says that in the past two years Juarez has lost 90,000 maquiladora jobs. He says this is a huge loss, especially when you take into consideration that each job in an assembly plant generates two or three jobs outside. He says even some small restaurants and shops have had to close because of the reduction in maquiladora employment.

Mr. Mora says his organization and the National Maquiladora Association are asking for help from all levels of government. He says the government needs to develop stimulus measures for the industry because of the strong competition from China, Honduras and other low wage countries. He says even the poor states of southern Mexico are competing with Juarez for maquiladora jobs.

Economists say Mexico cannot compete for low end factories where labor costs are the principle consideration. However, many economists agree that Mexico needs to rethink its strategy.

They say streamlined regulations, reduced taxes and labor reform measures would help the country retain some of the more advanced, high wage maquiladora plants and thus provide a better future for Mexican manufacturing in general.