Mirroring the maquila boom

New Mexico looks to build its border industry by attracting suppliers for Mexican manufacturers across the border in Juárez

  • The maquiladora supply business is just getting off the ground in Santa Teresa, New Mexico, where Logistics One manufactures parts to send to Juárez

    PHOTOS COURTESY GLOBAL PERSPECTIVES INTEGRATED AND N.M. ECONOMIC DEVELOPMENT DEPT.
  • Inside Logistics One, in Santa Teresa, New Mexico, which manufactures parts to send to Juárez maquiladoras

    PHOTOS COURTESY GLOBAL PERSPECTIVES INTEGRATED AND N.M. ECONOMIC DEVELOPMENT DEPT.
  • The Port of Entry at Santa Teresa is relatively quiet, for now

    PHOTOS COURTESY GLOBAL PERSPECTIVES INTEGRATED AND N.M. ECONOMIC DEVELOPMENT DEPT.
  • Border towns

    DIANE SYLVAIN
 

On this stretch of county road in southern New Mexico, dunes edge out onto the pavement, and two men in cowboy hats move slowly around a small herd of Holstein cattle. A double-long trailer backs up against a chain-link fence topped with loops of razor wire, where a sign announces that this border crossing is for livestock only; pedestrians must head to the Santa Teresa Port of Entry, at the end of the Pete V. Domenici International Highway.

On that main road, leading north from the border, there are even fewer signs of life. The Domenici Highway runs 12 miles from New Mexico’s newest border crossing to Interstate 10. Although it offers two wide lanes in either direction, the highway’s mid-week traffic is nonetheless light: A minivan with Texas plates roars north, a black-and-yellow truck with Chihuahua plates idles on the side of the road.

Overlooking the city of El Paso to the east, Santa Teresa has a rail line, the Doña Ana County Airport, 2 million square feet of industrial space, an estimated 3,500 residents and not much else. Dunes and desert scrub now dominate this no-man’s-land where Mexico, Texas and New Mexico converge, but many say it soon will bloom — with modern development. “It looks like it’s just about to take off,” says David Majors, vice president for marketing at El Paso-based Verde Corporate Realty Services. “We’re pushing on all fronts to develop it responsibly in a very planned manner.” And the plans aren’t small: Verde hopes to build some 4,000 homes within the next 10 years and foresees an ultimate future of 100,000 residents.

“We think, if there’s going to be an industrial area, it’s going to be the Mexican border, and we’re focused on development on both sides of the U.S./Mexico border,” he says. “It all fits together; residential development is the catalyst that’s going to help all of it grow.”

 

Forty years ago, in an effort to boost employment in the northern part of the country, the Mexican government began its maquiladora program, which allows manufacturing plants access to goods that move duty-free across the U.S./Mexico border. Today, there are more than 2,800 maquilas — most of which assemble manufactured goods, from electronics to appliances and beyond — supporting 1.2 million jobs. Historically, manufacturing hasn’t been a strong component of New Mexico’s economy, which was dominated for decades by government employment and natural resource extraction. But in the past few years, the state has hustled to recruit manufacturers that would serve the maquiladora industry in Juárez via what the state’s Economic Development Department calls the “maquila supplier program.”

“We have never fully taken advantage of the Mexican market,” says Jerry Pacheco, former director of the state’s Mexican Affairs and Trade Division and current executive director of the Santa Teresa-based International Business Accelerator, a trade counseling center funded through the state. “The population of the city of Juárez is almost the size of the entire state of New Mexico, and it’s right across the border.”

Pacheco points out that maquiladoras in Mexico import about $88 billion in goods from U.S. companies each year, and there are 300 maquiladoras in Juárez alone. “If we could get even 10 percent of that business,” he says, “we could create jobs in New Mexico and industrialize a very poor area.”

Already, the state has jumped at the chance to supply appliance manufacturer AB Electrolux, which recently shut down its Frigidaire plant in Greenville, Mich., and moved it to Juárez. By convincing three Electrolux suppliers — Stanco Metal Products, Pennant Molding and Grand Haven Technical Sales — to relocate, New Mexico has gained some 130 jobs (though, if the license plates in the parking lot are any indication, almost all the new employees commute from Texas).

Companies relocating to southern New Mexico get a good deal for any number of reasons: Corporate franchise fees are low, as are property taxes. The state offers a variety of incentives, including grants, loans, bonding authority and tax exemptions. Land is cheap, and so is labor: According to the Mesilla Valley Economic Development Alliance, the umbrella marketing organization for Doña Ana County, manufacturing wages are 48 percent lower here than the national average. And if it’s true that wages are even lower in Mexico, where workers earn an average of $3 an hour, New Mexico’s economic development officials point out that American workers are more highly skilled and electricity supplies are typically more reliable in the U.S. than across the border.

Even as Mexico has bled manufacturing jobs to countries with lower labor costs — China, most notably — it has been able to retain certain industries, among them large-appliance assembly. Refrigerators, for example, are too expensive to ship from China to the United States, says Steve Vierck, president and CEO of the Mesilla Valley Economic Development Alliance. Transportation costs have also helped New Mexico recruit suppliers for appliance maquiladoras.

“Companies really can’t continue to be located in say, Grand Rapids, Mich., and take three days shipping parts to Juárez,” Vierck says.

High Country News Classifieds
  • DIRECTOR - SONORAN DESERT INN & CONFERENCE CENTER
    The Sonoran Desert Inn & Conference Center is a non-profit lodging and event venue in Ajo, Arizona, located on the historic Curley School Campus. We...
  • CANYONLANDS FIELD INSTITUTE
    Field Seminars for adults: cultural and natural history of the Colorado Plateau. With guest experts, local insights, small groups, and lodge or base camp formats....
  • PLANNED GIVING OFFICER
    National Parks Conservation Association (NPCA), the nation's oldest and largest national parks nonprofit advocacy organization seeks a Planned Giving Officer. Do you find energy in...
  • DEPUTY DIRECTOR
    The Methow Valley Citizens Council has a distinguished history of advocating for progressive land use and environmental values in the Methow Valley and Okanogan County...
  • ACTING INDIGENOUS AFFAIRS DESK EDITOR
    High Country News is seeking an Acting Indigenous Affairs Editor to oversee the work of our award-winning Indigenous Affairs Desk while our editor is on...
  • GRANTS PROGRAM DIRECTOR
    The Cinnabar Foundation seeks an enthusiastic, team-oriented and knowledgeable Grants Program Director to work from their home in Montana. Established in 1983, the Cinnabar Foundation...
  • ARTEMIS PROGRAM MANAGER
    The Artemis Program Manager will work with National Wildlife Federation sporting and public lands staff to change this dynamic, continue to build upon our successful...
  • ALASKA SEA KAYAK BUSINESS FOR SALE
    Well-known and successful sea kayak, raft, hike, camp guiding & water taxi service. Sale includes everything needed to run the business, including office & gear...
  • MEMBERSHIP AND EVENTS PROGRAM COORDINATOR
    Great Old Broads for Wilderness seeks a detail-oriented and enthusiastic Membership and Events Coordinator to join our small, but mighty-fun team to oversee our membership...
  • PROGRAM DEVELOPMENT FACILITATOR
    ABOUT THE HIGH DESERT MUSEUM Since opening in 1982, HIGH DESERT MUSEUM has brought together wildlife, culture, art and natural resources to promote an understanding...
  • LAND STEWARD, ARAVAIPA
    Steward will live on-site in housing provided by TNC and maintains preserve areas frequented by the visiting public and performs land management activities. The Land...
  • DEVELOPMENT WRITER
    Who We Are: The Nature Conservancy's mission is to protect the lands and waters upon which all life depends. As a science-based organization, we create...
  • CONNECTIVITY SCIENCE COORDINATOR
    Position type: Full time, exempt Location: Bozeman preferred; remote negotiable Compensation: $48,000 - $52,000 Benefits: Major medical insurance, up to 5% match on a 401k,...
  • EXECUTIVE ASSISTANT
    ArenaLife is looking for an Executive Assistant who wants to work in a fast-paced, exciting, and growing organization. We are looking for someone to support...
  • DEVELOPMENT DIRECTOR
    Driggs, ID based non-profit. Full time. Full job description available at tvtap.org. Submit cover letter and resume to [email protected]
  • ENVIRONMENTAL AND CONSTRUCTION GEOPHYSICS
    - We find groundwater, buried debris and assist with new construction projects for a fraction of drilling costs.
  • SPRING MOUNTAINS SOLAR OFF GRID MOUNTAIN HOME
    Located 50 miles northwest of Las Vegas, Nevada in the pine forest of Lee Canyon at 8000 feet elevation. One of a kind property surrounded...
  • MAJOR GIFTS MANAGER - MOUNTAIN WEST, THE CONSERVATION FUND
    Cultivate, solicit and steward a portfolio of 75-125 donors.
  • NATURE'S BEST IN ARAVAIPA CANYON
    10 acre private oasis in one of Arizona's beautiful canyons. Fully furnished, 2123 sq ft architectural custom-built contemporary home with spectacular views and many extras....
  • HEALTH FOOD STORE IN NW MONTANA
    Turn-key business includes 2500 sq ft commercial building in main business district of Libby, Montana. 406.293.6771 /or [email protected]