A Maquiladora, is a factory operated in Mexico under preferential tariff programs by both the U.S. and Mexican governments allowing the plant to import duty free into Mexico all equipment, machinery and materials related to production.
WHAT DOES MAQUILADORA MEAN? The spanish term “maquiladora”, refers to the practice of charging a “maquila” (a measured portion) for grinding other people’s corn (providing labor).
WHAT IS THE ORIGIN OF A MAQUILADORA? Arthur D. Little, Inc. (a consulting firm from Massachusetts) developed the concept of foreign owned factories in Mexico where imported materials were assembled by low-wage employees into exportable merchandise.
WHAT ARE THE ROOTS OF THE MAQUILADORA? During the period of 1951 thru 1964, the U.S. Immigration laws provided for a guest worker (Bracero) program which allowed Mexican nationals to get temporary seasonal work visas to harvest its agricultural fields. Mexican border towns became overcrowded with people from the interior of Mexico who had come in hopes of working in the United States. At the time of termination of the Bracero program in 1964, there were estimated to be a backlog of 50,000 applicants in the Mexican border town of Tijuana alone.
In 1965 Mexico’s President Diaz Ordaz addressed the overcrowding with as much as 50% unemployment by creating the Border Industrialization Program. The program allowed for 100% foreign ownership of manufacturing plants located within a 20-kilometer area of the Mexican border. The program allowed duty free imports of raw materials and the capitol equipment used in their production.
THE HISTORY OF THE MAQUILADORAS The Maquiladora industry began to take off soon after the 1965 Border Industrialization Program and the program became known as the Maquila Program. The Maquila program was intended to relieve unemployment in the Mexican border area and no more. The unskilled labor force and the stigma attached to products marked Made in Mexico relegated the pioneer Maquilas to mostly labor intensive assembly operations. The assemblies were considered sub-assemblies with the final assembly done in the U.S. earning the Made in the USA label.
THE MAQUILADORA OF TODAY The labor force in the Maquila industry is matured and experienced. The Maquila owners have nurtured vocational technical colleges that surround the Maquilas. Today the employees of Maquiladoras perform design, engineering, research and development, and quality control for finished products in an automated manufacturing environment. The program has expanded beyond the border and the Made in Mexico label is no longer a stigma. The products are not considered inferior and the labor is not as cheap.