Maquiladora Industry

Maquiladora Industry:

Past, Present and Future

Jesus Cañas

Miami FL, November 16, 2006

Latin America Looks East

Regional Issues, Trends, and

Progress in the Global Economy

Federal Reserve Bank of Atlanta

The views expressed in this presentation are strictly those of the author and do not necessarily reflect the positions

of the Federal Reserve Bank of Dallas or of the Federal Reserve System. Any secondary distribution of this

material is strictly prohibited. May be quoted with appropriate attribution to the author.

Outline

–Industry Overview

–The maquila crisis: why?

–Present

–Connection and economic impacts

–Future

–The Asian Factor

–Some conclusions

ntroduction to Maquiladoras

– End of the Bracero program in 1965

– Border Industrialization Program

The maquiladora program was a measure to alleviate higher

unemployment and growing poverty.

– By 1969, 147 companies were in place, accounting for

17,000 jobs

– The first two industrial parks were in Ciudad Juarez, Chih.

Mexico and Nogales, Sonora Mexico

– RCA, Convertors, Sylvania, Centralab, Acapulco Fashion

and Ampex were among the first U.S. companies to set up

maquiladora operations.

Industry Evolution

– First-generation maquilas are typical of the earliest

plants: highly labor-intensive with limited technology

and dependent on decision from parent company (i.e.

textile).

– Second-generation plants are oriented less toward

assembly and more reliant on manufacturing

processes (i.e. Auto-harnesses, TV sets, and electrical

appliances).

– Third-generation maquilas are research oriented, with

emphasis on design and development (i.e. Delphi’s

Mexico Technical Center).

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