US investment brings new factories, technology, and jobs to Mexico
Giant commercial billboards compete in the skyline with the spires of old, Spanish-style churches.Skip to next paragraph
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Banks, automobile factories, and steel plants in or near this churning city make it a combination of Chicago, Detroit, and pre-pollution cleanup Pittsburgh or Gary, Indiana.
The tempo here is fast and serious. One feels it even on a short visit. The director of the American Chamber of Commerce - which has a majority Mexican membership - comments: ''You are exhausted when you finish the day.''
But there is an abundance of jobs here, partly due to United States investment, and thousands more jobs are becoming available each year. Monterrey, second largest industrial city in Mexico, is in the forefront of Mexico's trend toward urban industrialization.
This trend and some evidence that Mexican birthrates may be declining hold promise not only for Mexico but may eventually reduce pressures on Mexicans to illegally enter the US looking for work.
Both US and Mexican analysts hasten to add, however, that the twin effects of more jobs and fewer births will not be noticeable for at least a generation or two.
The apparent trend toward declining birthrates is a relatively new Mexican phenomenon. And though the Mexican government says it is creating at least 800, 000 jobs a year, about that many are needed ''just to stay even'' with the number of new people seeking jobs each year, says a US State Department Mexican affairs expert.
How big a role is US investment playing in the creation of jobs in Mexico today? And is that investment actually taking jobs away from Americans by taking money out of the US?
Some of the big names in or near Monterrey are familiar to most Americans: Chrysler, Ford, General Motors, John Deere, K mart, International Harvester. But the biggest names in Monterrey are Mexican, including the two largest private enterprises in the country: conglomerates headed by competing factions of the Garza family and known best as Alfa and Visa. In addition, most US companies in Mexico are required to operate as minority partners with Mexican firms.
In an interview, Dr. Eric W. Gustafson, a Mexican vice-president of Visa, offered this view on the US business contribution in Mexico: ''Quantity wise, US investment is not that high a percentage.'' The real importance, he adds, is the ''influx of technologies and management skills'' the US investment brings. This, he said, helps make Mexico more competitive with other nations.
The US investments in Mexico are part of ''a natural process'' occurring in which an industrialized nation such as the US ''can no longer compete'' in some industries such as automobiles. ''Where the investment ends up, is irrelevant; it's not going to stay in the US,'' says Dr. Gustafson.
A spokesman for Ford Motors in the US, which is closing one manufacturing plant in northern Alabama and opening another one in Mexico, says there is ''no connection'' between the two events. The spokesman points to differences in the size of the plants and the products. But he attributes the Alabama closing, in part, to high labor costs.
Says one US executive here, not with Ford, that if Ford weren't investing in Mexico it might be investing in another nation with cheap labor. ''US labor has outpriced itself,'' he explained.
But cheap labor is not the only reason for the rush of US companies to Mexico. US firms ''want to get their oar in'' Mexico's waters because they see massive potential Mexican buying power in the years ahead due to the nation's oil wealth, says this US executive.
But more jobs - whether involving US money or not - do not automatically mean fewer Mexicans will enter the US as undocumented workers. The equation is more subtle. A Mexican economist in Monterrey says some Mexican youth are lured to the US by their vision of the US way of life.
Even if Mexicans have jobs, inflation, much higher than in the US, is eating deeply into their paychecks. And as long as Mexican pay is well below US rates, there will be an attraction to the north. One former construction worker who had been earning $60 in the Mexican state of Chihuahua, says he became an undocumented worker in the US because he could earn about $120 a week in agriculture.
But neither is money the whole story.
A taxi driver in this hard-working city says he has a legal US entry document and is married to an American citizen (a Mexican-American). They lived in the US for awhile, but returned to Monterrey because they did not like the moral climate in the US for raising children.