1 / 25

Operating Concepts in Maquilas

NAFTIA* & Maquilas Van V. Miller presented at Central Michigan University 9 February 05 *Nafta = Naptha. Operating Concepts in Maquilas. Profits = Revenues – Costs Revenues can be from sales or set. Costs are: Production (labor + materials) Transaction (tariffs + transportation + taxes ).

lula
Télécharger la présentation

Operating Concepts in Maquilas

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. NAFTIA* & MaquilasVan V. Millerpresented atCentral Michigan University9 February 05*Nafta = Naptha

  2. Operating Concepts in Maquilas • Profits = Revenues – Costs • Revenues can be from sales or set. • Costs are: • Production (labor + materials) • Transaction (tariffs + transportation + taxes)

  3. A NAFTIA GOAL Preamble- “Create new employment opportunities and improve working conditions and living standards in their respective territories”

  4. This Goal Is about Economic Development in MexicoIn 2003, Canada $29,740 Mexico $8,950 USA $37,500World Bank data for GNI per capita on a PPP basis

  5. Mexican Maquiladora Program Past year- • 2800+ Plants • 1.15 million Employees This week- Number of Plants 2,815 Employment 1,140,153 Direct Labor Wage  $ 1.88-Hour Technicians Wage $ 5.19-Hour Gross Production $ 91.64 billion (www.maquilaportal.com)

  6. Major Maquiladora Cities • Tijuana—most plants, approximately 750 • Juarez—most employees, maybe 300,000

  7. U.S. Trade Act of 1931 • Free Trade Zones (FTZ) An FTZ is a legal-geographical entity for reducing tariffs • Tijuana (on the border) • Costs • Production (unskilled labor) • Transaction (tariffs + transportation)

  8. Bracero Program 1942-1964 • Migration to the U.S. • U.S. Costs • Production ( unskilled labor)

  9. PRONAF 1961 • Mexican Border Operations • Mexican Profits = Sales Revenues - Costs

  10. “PRONAF”/BIP (FTZ) 1965-1982 • U.S. Operations on the Mexican Border • Mexican Costs • Production (unskilled labor) • Transaction (tariffs + transportation + taxes) • 1971—Reduction of Ownership Risk

  11. First Generation Maquila(located along the border) Components Materials A Labor

  12. Twin-Plant/Maquila (FTZ) 1983-1994 • Foreign Operations in Mexico • Mexican Costs • Production (labor: un- & semi-) • Transaction (tariffs + transportation + taxes)

  13. Second Generation Maquila(spreading into the country) Materials Components A M Materials Labor

  14. NAFTA Ending the Maquiladora Program • There is no need for an FTZ in an FTA.

  15. Maquila (TLC) 1994-2000 • Maquiladora Operations in Mexico • Mexican Costs • Production (labor: un- & semi- & skilled) • Transaction (tariffs + transportation + taxes) • Elimination of Ownership Risk

  16. Third Generation Maquila(located around the country) Materials Components M DE A Components Materials Labor

  17. “Maquila” 2001-2007-Permanent • Economic Development Need Continues • Vertical Relationships in Mexico • Sales Revenues from Mexican Customers • Future Costs • Materials—more sought from Mexican suppliers • Labor—increasing skills but the P/$ to Yuan/$ FX rate matters • Transportation— improving and JIT possible • Tariffs—not an issue • Taxes—now ‘determined’

  18. Current and Future Issues • Gaining and Losing Industries • Labor • NAFTA Side Accords and Reporting • The politics of getting the Agreement ratified in the USA required two side agreements—one on labor and the other on the environment. These two issues are always contentious (note the pending CAFTA) and should be remembered because they can strike at the heart of NAFTA’s legitimacy.

  19. Gaining and Losing Industries(automotive, electronics & electrical, textile/apparel • NAFTA caused trade diversion, esp., in textile and apparel with fiber-forward rule. The industry will be a big loser in most cases if MFA stays abolished. • In other industries, the tension is between the labor rates (Mexico vs. others) and the transportation factor (cost & delivery of Mexico vs. others). • The motor vehicle industry should be a gainer and electronics & electrical will depend on the nature of the product, e.g. big screen TVs.

  20. The Labor Issue • Turnover—a study of eight maquiladora cities in northern Mexico.

  21. Wages and Turnover The Relationship between Turnover and Compensation in Lower-Generation Maquilas Starting Wage Wage Change Average Wage High Low High Low High Low Turnover High 7 9 5 11 7 9 Rate Low 10 3 7 6 9 4 Hildebrand’s .32 at p < .03 .22 at p < .11 .25 at p < .08 del

  22. Generation and Wages The Relationship between Turnover and Generations in Maquilas Turnover Rate N First Generation 65% 12 Second Generation 65% 16 Third Generation 48% 5 ‘True’ Third Generation 11%* 3 *Significant at p<.01

  23. The Environmental Issue • A study of the Top 25 Maquilas • www.maquilaportal.com

  24. NAFTA Side Accords and Reporting Types of Voluntary Reporting Statements for the Top 25 TNC Maquilas Policies Codes Performance • Labor 3+(6 safety only) 1 0 • Environment 7 11 3 • Quality 6 18 NA

  25. Northern Maquiladora Cities • Along the Mexico-Texas Border • Matamoros • Reynosa • Nuevo Laredo • Piedras Negras • Ciudad Acuna • Ciudad Juarez

More Related