The economic development of the northern border goes back to the forties when the program developed for the Mexican agricultural workers and farmers was approved by both the U.S. and the Mexican government in July 23, 1942.

    1965 was the starting point when the first assembly/repair operation was performed in the border region known at that time by the name “perimetro libre”.

    In 1968, the first important firms such as Radio Corporation of America (RCA) started operations in Juarez, where subsequently other companies such as General Electric, Sylvania, General Instruments, American Hospital Supply, Ampemex, Allen Bradley, AMF Corporation, Globe Union, Motorola and many others initiated Maquila operations

    From 1972 through 1975, the first massive expansion of the Maquila industry took place along the Mexican border.  During that period, CNIME activities started in order to represent the general interests of the maquiladora industry.  Later on, in 1983, this organization was formally constituted.

Throughout the years the maquiladora industry has expanded and consolidated thanks to the efforts of its workers demonstrating to the world that in Mexico it is feasible to manufacture highly competitive products with excellent quality.

The big advantages of being a Maquila, other than the enormous advantage of employing Mexican labor, has basically been the fact that Maquilas could:
a) Import their machinery and equipment duty free into Mexico and keep it there for as long as it was being used in the Maquila.
b) Import raw materials free of duty and then export the finished goods without ever paying any duties on the raw materials.
c) Pay duty only on added value.  Many products incurred no duty, such as the products we make - die castings

    Just when the Maquila industry seems to be settled and comfortable, the law is set to change in 2001, when the advantages granted to Maquilas will appear to disappear according to the terms of NAFTA.  However, this is not the case for those Maquilas using products or raw materials originating in other NAFTA countries.  When the change takes place, machinery, equipment and raw materials will be free to flow between the three NAFTA countries and, after a period of time, duties will be eliminated.  However, there will be a disadvantage to Maquilas who will have to pay import duties on non-NAFTA products.

THE SIZE OF THE MAQUILA INDUSTRY:

The Maquila industry consists of over 4,000 Maquilas and over 1.15 million workers employed in Mexico and has become the largest manufacturing segment in Mexico.

Up to the late 1980’s most Maquila were located on the USA/Mexico border, but that is changing rapidly and today approximately 1/3 of all Maquilas are not located on the border.

REYNOSA MAQUILA ASSOCIATION:

    The main difference between Reynosa and other Associations is that the Reynosa Association is run exclusively by Plant Managers.  The bye-laws provide that only Managers may attend the monthly Committee meetings, unless there are some exceptional circumstances.  This was done to keep the Association strong and to enable Managers to network with each other.  Attendance is usually in the 50 – 70% range.  More members attend when there is some crisis taking place, which, I might say, happens fairly frequently.  The association did not have any employees until October of 1997 when a Coordinator was hired.  Today, that Coordinator is still the only employee.  The Association has no premises, but the Coordinator offices with the current President.

Here is the composition of the Association by country:

USA
Japan
Mexican
Canadian
France
Germany
Chinese
South Korea
Finland
South Africa

There are about 95 Maquilas in Reynosa of which 80 are members of the Association. Maquila range in size from 3 employees to 10,000.
The Reynosa Maquilas employ approximately 60,000 and are by far the most important group of employers in the area.

The aims of the Association are as follows:

REYNOSA ADVANTAGES:

Briefly the good things about Reynosa are:

Lack of labor problems
Ample unskilled labor
Good living conditions in McAllen and surrounding area
On the border
International airport, linking to Continental in Houston and American Airlines in Dallas
Two good International bridges with another in the works
Strong Maquila Association
Good support from McAllen, Texas
Fair roads to link into interstate highways

 REYNOSA PROBLEMS:

     The major problem in Reynosa is the shortage of confianza staff.  The confianza are Mexicans who are not members of the Sindicato (Union).  This encompasses technicians, accounting clerks, engineers, production schedulers, q.c. inspectors, etc.  This has resulted in pirating of staff especially when a new Maquila moves into town and as a result wages have escalated above most other areas.  The Maquila Association is working with the local and State universities and technical institutions and these institutions are now working to train students in the skills and degrees needed by the Maquilas. The Association has some guidelines for employment that is loosed adhered to by most Maquilas.
    Another problem is one that seems to plague all border cities and that is the lack of housing and infrastructure in the city.  This is a difficult one to solve as there is not the finance and mortgages available for employees to be able to purchase homes.

MENTOR PROGRAM:

    In Reynosa, as soon as the association learns of a new Maquila moving into the area, we appoint a mentor to help and assist that company.  The aim is to help ease the way into the community and guide the new company in hiring and wage structures.

ORIENTATION PROGRAM:

    Once per annum, the Maquila Association conducts an orientation program for new Maquilas.  A great deal of information is passed on and includes the following:
List of Directors, showing the sub-committees they chair.
Purpose of meetings
Activities
Guidelines for employment
Working committees and meeting schedule
Objectives, goals and member responsibilities
Licenses and permits required
Environmental policy statement
Mexican law briefs (Environmental)
Association brochure
Directory of members, including addresses and phone numbers
By-laws of Association
Membership process