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The Daily Wildcat

The Daily Wildcat

 

    Mexico becoming more than a spring break destination

    Ryan Johnson
    Ryan Johnson

    Like a large chunk of students at the UA, I went to Mexico over spring break. I even went to a tequila factory.

    But I’m pretty sure I came away with an extremely different impression of the country than the revelers in Rocky Point, Acapulco, Puerto Vallarta, Mazatlan, Cabo San Lucas, Cancun, Cozumel, Playa Del Carmen and Rosarita did. While they saw beaches, bead vendors and beer, I saw a country of opportunity.

    As part of a master’s in business administration class called International Management, I had the opportunity to attend a field trip to Guadalajara over spring break.

    The dozen or so of us on the trip went from factory to factory, seeing how Mexico is trying to redefine itself. We watched Mexicans make DVDs at a Technicolor plant (if you buy “”The Chronicles of Narnia”” next month, we probably saw it being made). We saw how Wonder Bread was made, from flour to bagging. We saw where lots of Hewlett-Packard customer service calls are answered – it’s not just India anymore. And we saw a plant for Jabil, a high-tech electronics manufacturer.

    Globalization has been both a boon and a bane for Mexico. The North American Free Trade Agreement brought growth and new markets – factories right across the border sprang up to produce our televisions, videocassette

    Now it appears that Mexico is finding its niche. Unable to compete with Asia on price, Mexico is now competing in quality and proximity.

    recorders and shirts. But not long after, just as Americans got used to seeing “”Made in Mexico”” on their underwear, Mexicans faced “”Made in China”” underwear. Turns out when it comes to employers, $5 per day is great compared to $5 per hour, but pales in comparison to $5 per week.

    Many of the border factories closed, and it appeared that Mexico was stuck in an uncomfortable void: too rich to be able to produce cheap goods for the U.S. and the rest of the rich world, but too poor to be in the developed-world club.

    Now it appears that Mexico is finding its niche. Unable to compete with Asia on price, Mexico is now competing on quality and proximity.

    Technicolor says that movie studios prefer to produce DVDs in Mexico because the country is widely viewed as more secure for intellectual property than China. In fact, a Chinese tour group to HP was turned away simply because of nationality.

    Mexico is also marketing its proximity to the U.S. as an asset for the rapid-turnover, high-velocity world of technological manufacturing. Trends change so quickly that the three- or four-week boat ride from Asia to Los Angeles can mess up a product cycle. Grupo Bimbo, the company behind Oroweat bread and Entenmann’s pastries, can get a product from the middle of Mexico to the U.S. in hours.

    Moreover, companies want to be in Mexico for the chance to take part in the growing domestic market. Indeed, the big concern of 2004 – outsourcing – is now looking like a global blessing. While it used to be that for every job outsourced, one U.S. job was lost, now the Harvard Business Review reports that it takes 13 jobs outsourced to cost a single U.S. job. Not only is HP saving costs by outsourcing to Mexico, but it is also selling more computers there and creating more jobs in Silicon Valley, Calif.

    And every job created in a Mexican city creates even more job opportunities throughout the country. Jabil, the electronics manufacturer, says that its 4,000 Guadalajara jobs create 13,000 jobs throughout Mexico.

    What about the next step for Mexico? “”Doesn’t it still have corruption?”” asked my father, who studied for two years in Guadalajara.

    It is getting better, Mexicans respond. One of the biggest themes of the companies we visited was transparency as well as openness of data. A worker at Technicolor couldn’t steal a screw if he tried. And every piece of motherboard at Jabil is traceable by computer from anywhere in the world.

    We heard from the former Mexican ambassador to India, who said that globalization is forcing Mexico to stamp out corruption.

    What about Latin America’s age-old vice, lack of punctuality? Companies are forcing employees to stamp out the old culture.

    Besides, American college students sleeping in until 3:30 p.m. on spring break can’t really say much for their own punctuality. Mexico may be a playground for overzealous U.S. college students during spring break, but while we’re passing out on the beach, they’re working.


    Ryan Johnson is a senior majoring in economics and international studies. He can be reached at letters@wildcat.arizona.edu.

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