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New Opportunities for Mexican Maquila Investment
08/30/2012
Julio Planas Vidal, Larry B. Pascal

The maquiladora industry represents the second most important source of Mexican exports (after the oil industry), and employs approximately two million workers. To this effect, the Mexican Government has registered more than 6,000 manufacturing maquiladora facilities. Among the most representative sectors using the maquiladora program are the automotive, aeronautical, pharmaceutical, textile, household appliances, and heavy machinery sectors.

In the late 90s, many companies using the maquila program left Mexico (or reduced their investments) and moved to China and other Asian countries in an effort to reduce their labor costs. However, a variety of factors, including rising labor costs in China, the global financial crisis, and a realization that other considerations such as higher transportation costs and the remoteness between the design and the manufacturing functions were resulting in higher overall manufacturing costs, which in turn prompted multinational companies to reconsider their maquila programs.

This paper provides a brief overview of the Mexican “Program for Maquiladora and Manufacturing Exporting Industry” (hereto referred as “IMMEX” and popularly known as the “maquiladora” or “maquila” industry).

To read the full paper, click on the PDF linked below.

PDF - Mexican-Maquila-Investment.pdf