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Maquiladora Manufacturing 


PART V. 

 

Management

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 Pacific Rim.

Other Factors

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 Some claim that the equipment and technol­ogy used in the Maquiladoras is out of date and will not help Mexico to become a progressive industrial nation.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.

Conclusions

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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