'Maquiladora jobs on border decline

Matamoros loses more than 3,000 positions

By MATT WHITTAKER
The Brownsville Herald

January 28, 2007 — The number of workers in the Texas-Mexico border maquiladora industry fell from September to October.

U.S industrial production lagged during that period, dampening work in the manufacturing and assembly plants in Mexico that form the backbone of part of the Rio Grande Valley economy.

Most of the six main border industrial cities — Reynosa, Matamoros, Ciudad Juárez, Ciudad Acuña and Nuevo Laredo — recorded job declines, driven primarily by losses in the transportation and textile sectors, according the most recent data from the Federal Reserve Bank of Dallas and Mexican government figures.

Development officials in McAllen and Brownsville pay attention to factory employment in Reynosa and Matamoros, the Valley’s maquiladora clusters, because some jobs in the U.S. cities are tied with those south of the border.

Suppliers and logistics companies that cater to the exporting factories, as well as maquiladora management, often locate and live on the U.S. side of the border, pumping dollars into the Valley.

Maquiladora plants along the border take advantage of lower-cost Mexican labor to manufacture products for distribution north or the border, and they form the front line of exporters in Mexico, the United States’ No. 2 trading partner behind Canada.

...

Maquiladora factories along the Texas-Mexico border employ about 450,000 workers, with more than 12,800 jobs added from December 2005 through October. The industry as a whole in Mexico has about 1.2 million workers, including more than 31,000 positions added from December 2005 through October.

“Adding 31,000 jobs in a year ... that’s a mediocre figure,” Sargent said.

For the medium to long term, competition from China will limit Mexico’s maquiladora growth, he said. The industry will enjoy small employment gains but not large growth as Chinese wages remain low and the exchange rate between the Chinese yuan and the U.S. dollar remains more favorable for Chinese exporters than those in Mexico.

While the U.S.-Mexico border gets niche operations looking to take advantage of Mexico’s wage advantage over the United States and prime location to reach U.S. markets, “We’re not playing with the big boys,” Sargent said.

At some point, he said, jobs will return from China to maquiladoras in Mexico as the Asian country’s wages rise and currency appreciates to the dollar.

For the short term, the outlook for the maquiladora sector remains mostly positive, with the U.S. industrial sector regaining its upward momentum in November, increasing 0.2 percent, according to the Dallas Fed.

Since many of the Mexican factories produce intermediate parts that are shipped to U.S. automobile, electronics and other manufacturers, maquiladora orders and shipments rise and fall along with U.S. factory output.

Copyright © 2003 The Brownsville Herald'