Stalled U.S. economy blamed for Mexican job losses Downturn: 150,000 unemployed factory workers expected by year’s end.

By DWAYNE HARNETT and ANGELES NEGRETE LARES The Brownsville Herald

MATAMOROS — Workforce reductions and plant closings have put an estimated 8,000 maquiladora industry employees out of work over the last several months while experts point to a weakening U.S. economy and stepped-up border security for the cutbacks.

Most affected by the layoffs are automotive and electronic industry workers employed in numerous factories along the U.S.-Mexico border and several in Matamoros.

"We expect the loss this year in the maquiladora sector in Mexico to be around $7 billion if the situation continues,’’ said Rolando Gonzalez Barrón, president of the Mexican Maquila and Export Industry Council based in Matamoros.

"Right now in Mexico, approximately 130,000 (maquiladora) employees have lost their jobs and we expect before the end of the year the number could go as high as 150,000,’’ he said.

Industry insiders say the bulk of the 8,000 jobs — about an eighth of Matamoros’ maquila workforce — have been lost in the last three months. According to the National Institute of Statistics, Geography and Information (INEGI) in Ciudad Victoria, there are 119 maquiladoras in Matamoros with an estimated 66,390 employees.

Some published reports have hundreds of thousands losing jobs in the Northern Mexican states of Tamaulipas, Chihuahua and Baja California, which are laiden with maquiladoras — typically manufacturing facilities in Mexico owned by multinational companies that produce at low wages.

Meanwhile, U.S. economists continue to predict a recession and that means manufacturers of auto-related products and many other "big-ticket’’ items will continue to slow. Those associated with maquiladoras say that, in turn will mean more job losses.

But not everyone is sold on a long-term economic disaster.

Pablo Rhi-Perez, an associate professor in Business Administration at the University of Texas at Brownsville, and a Matamoros resident, expects the problems associated with the maquiladora industry will be short-lived.

"Security is going to tie up the border between the United States and Mexico for a long time,’’ Rhi-Perez said. "Mexico is the best alternative for the U.S. to do business with the present world situation.

"There’s the good neighbor issue," he said. "Trade with other parts of the country opens up a whole security issue for moving goods. Also, companies in Mexico are already well known in the U.S. The best alternative is Mexico.’’

Nevertheless, the U.S. downturn in relation to the Mexican economy "has had a huge impact,’’ suggested Manuel Gonzalez, assistant director of the northern Mexico sector for the National Manufacturing Chamber.

By most estimates, the vast majority of assembly-line employees earn an average about $70 a week.

Union officials said Wednesday contract talks are scheduled for December where a variety of subjects will be discussed with business leader including pay, conditions and recent job cuts.

The two largest maquiladoras in Matamoros, Delphi-Delco Electronic Systems and Kemet Electronics have not let go of any employees at this point, officials confirmed this week. International heavyweights such as General Motors, Philips Electronics and Sony are among companies that have had layoffs throughout the rest of Mexico.

Gonzalez Barron said that some plants have closed while others are cutting back on hours and limiting work weeks to three or four days.

"That way they don’t lose their skilled workers, but can still remain competitive,’’ González Barron said.

In Matamoros, Ideal Equipment and Lepco SA de CV have closed their doors in the last week and put 75 and 180 employees out of work, respectively. Company officials blamed weak economic conditions for the closings.

Former employees of the floundering plants must now struggle to make ends meet in an almost non-existent job market.

"Truthfully, we’re desperate," said Miranda de Castro, a 27-year-old Matamoros resident recently let go from her job at Ideal Equipment.

A mother of four, de Castro worked at Ideal for close to five years, earning about $60 a week.

"To have to look for a new job will be difficult," she said. "There isn’t enough money, not even to buy my children some new tennis shoes. And now, without a job," she paused, "well, it’s hard."

Leopoldo Herrera lost his job at Ideal after 15 years. His prospects for a new job, he said, are not good.

"I am 30 years old. Do you think a maquiladora will hire me? No," he said. "They didn’t even give us severance pay, aside from leaving us without any income."

The maquiladora layoffs and plant closings have impacted Brownsville retail merchants and other businesses as well.

"I can’t put an exact number on the lost revenue that is directly tied to the maquiladoras,’’ said Frank Feild, president and CEO of the Brownsville Chamber of Commerce.

"And, even though Brownsville’s economy has been diversified over the last few years, it’s still a big thing when business in Matamoros is hurting," Feild said. "I don’t think there’s any aspect of our economy that isn’t affected by the maquiladora industry.’’

The Brownsville Economic Development Council is also keeping a watchful eye on the maquiladora situation.

"Our primary focus is bringing business and industry to Brownsville,’’ said Ana Borchardt, director of local industry development for the BEDC.

"But we do assist corporations with site selections in Matamoros," she said. "The corporations may want to locate their manufacturing plants in Matamoros and their distribution point in Brownsville."

Maquiladora managers, like Felipe Garza, offer their own perspective.

"One of the reasons for the layoffs and plant closings is the owners are moving their plants to countries where the wages are lower than in Mexico,’’ he said.

Garza has worked in management at three maquiladoras, including one along the Arizona-Mexico border.

Garza listed three such places in rapid fashion: China, Honduras and Sri Lanka. In addition, new maquilas have been built deep in the Mexico’s interior, union officials said.

"Who would have thought that wages in Mexico would be so ‘high," he added, "that management would be looking at places where production costs are cheaper?’’

http://www.brownsvilleherald.com/sections/archive/topstoryjmp/11-8-01/News2.htm

-- Martin Thompson (mthom1927@aol.com), November 08, 2001