Most Maquiladora operations exhibit an
organizational structure with limited levels of management. In
general there is only one level and it is focused on the production
function. In many instances, the principal administrator (Plant
Manager) is a U.S. national and has the choice of living on either
side of the border. There is a limited supply of capable Mexican
managers, engineers, technicians, and other professionals. The
average salary for these Mexican employees is usually less than
their American equivalents. Managerial and technical assistance can
be provided easily by the parent firm and may include supervision,
consulting services or technical assistance. Maquiladora operations
can be more flexible to market changes or manufacturing problems
than would be possible if the same facilities were located in the
There exist many other aspects of Maquiladora
operations that in specific situations may represent a positive or
negative factor to be recognized as an opportunity. Research and
Development, Technology Transfer, Quality Control, Availability of
Money, Education and Training, Availability of Industrial Suppliers,
Pollution and Environmental Control, etc., are among the many
factors that need to be understood and coordinated to make
Maquiladoras a more effective cooperative program.
Opposition to Maquiladora Operations
Despite the huge success of the program, the
maquiladoras have faced strong opposition from some labor unions in
the U.S. In the mid 70's an unsuccessful move to disable tariff
items 806/807 was launched. Recently, the controversy over
detrimental effects upon U.S. employment have been revived and
several U.S. Congress subcommittee hearings have taken place and are
expected to continue. The Committee for Production Sharing
(originally founded in 1970) represents an effective Washington
lobbying group that contravenes the moves of those attempting to
dilute the production sharing opportunities by watching closely
every move in the U.S. Congress to attack the existing regulations
and calling on affected industries to apply political pressure to
maintain subheadings 9802.00.60 and .80 of the HTS.
The Mexican side has also raised some objections to the
Maquiladora plants. Some claim that the equipment and technology
used in the Maquiladoras is out of date and will not help Mexico to
become a progressive industrial nation. In some cases the firms
operate with obsolete or old equipment that had been scrapped
some place else or substituted by more efficient production systems.
The existence of the lower wage rates of the Mexican workers has
been suggested as the reason for survival of these old technology
production operations. Also, arguments have been expressed about the
design of such labor intensive operations, suggesting that this type
of emphasis impedes the development of more capital intensive
operations and therefore limits the development of human capital.
Some have argued that the easiness of establishment of a maquiladora
and the flexibility it provides to its parent organization make the
whole industry highly unstable, "an easy-come, easy-go type of
investment" with limited technological contribution to the
region where the plant is located.
The Maquiladora program is an outstanding example of IPS. The
potential benefits it offers seem to outweigh the limitations and
problems it encounters. Companies interested in the program should
analyze the advantages of establishing a Maquiladora operation as a
means of improving its competitiveness. A comprehensive view of all
the factors involved in the strategic decision-making process is
required since labor factors alone do not provide enough insight
into the viability of specific ventures.
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