Distorted linkages and labor devaluation: an exploration of automotive value chain-driven ‘development’ in Ciudad Juárez, Mexico

ABSTRACT

Contrary to the optimistic narratives that see in foreign direct investment and global value chains (GVC) potential levers to generate dynamics of strengthened local patterns of industrial development, this article analyses the case of the automotive industry in Ciudad Juárez (Mexico) to demonstrate that local connection to GVCs has rather deepened dysfunctional relationship to globalized production/supply chains and labor degradation. Domestically, Ciudad Juárez’s auto production linkages are fully controlled by transnational corporations underpinning conditions of an export-driven despotic labor regime: sustained long-term wage precariousness, and intensive and exhaustive working conditions inside manufacturing plants.

RÉSUMÉ

Certains observateurs optimistes voient dans les investissements étrangers directs et dans les chaînes de valeur mondiales (CVM) des pistes potentielles pour générer des dynamiques de renforcement des modèles locaux de développement industriel. Notre article rejette cette interprétation, et offre une étude de l’industrie automobile à Ciudad Juárez (Mexique) démontrant que les interactions entre les industries locales et les CVM ont plutôt eu tendance à renforcer la relation dysfonctionnelle de ces industries avec les productions/chaînes d’approvisionnement globalisées, et à amplifier la dégradation des conditions de travail. Localement, les rapports entretenus par l’industrie automobile de Ciudad Juárez sont entièrement contrôlés par des corporations transnationales dictant les conditions d’un régime du labeur despotique et axé sur les exportations, avec pour conséquences une précarité soutenue et à long-terme des salaires, ainsi que des conditions de travail intensives et exhaustives sur les sites de fabrication.

KEYWORDS:

• Automotive industry
• Ciudad Juárez
• global value chains
• local development
• despotic labor regime

Notes

1 The use of the term ‘leading sector’ does not imply, in and of itself, developmental agency: Mexico’s export-led model, doubly consolidated via NAFTA (1994) and the USMCA (2020), has engendered rapid export growth in manufactures. This has occurred in the face of a somewhat more accelerated over-all growth in imports, generating a trade deficit in goods.

2 In 2019, average hourly wage in the US assembly industry, whithout benefis, was 29.9 dollars, while in Mexico it was 2.8 dollars. In the case of the auto part industry, it was 20.8 dollars in the US and 1.5 dollars en México. Data gathered from BLS, Current Employment Statistics, https://www.bls.gov/ces and INEGI, Banco de Información Económica, http://www.inegi.org.mx/sistemas/bie/

3 Wire harnesses can be considered the nervous system of a vehicle. An automotive wire harness is a set of assembled wires used to connect electronic components into a complex electrical system within the vehicle. Each car has about a dozen different wire harnesses for different areas: doors, windows, seats, dashboards, engines. In addition, the designs of harnesses change frequently, with the evolution of electronic parts. Yet constant transformations in harness models caused by differentiates and changing demand within firms have made it impossible for their production to be completely, or even partially, automated, which is why it continues to be the vehicle component that requires the largest number of workers in the production chain.

4 The production of seat parts is an increasingly complex stage in the production of auto parts, due to the growing incorporation of technology in different sub-segments of its production. The production of seats involves both highly complex, and highly automated, processes in the metal-mechanical industry, as well as less automated, and more labor intensive, processes like fabric garmenting. The latter, which is linked to the stage of knitting seat covers, is precisely the activity which is most typically found in Mexico. As such, workers in the seat part assembly sector in Mexico could be considered to be part of the garment industry, rather than the automotive industry, in that they use sewing machines to manufacture vehicle seat parts.

5 This does not discard the importance of the high-productivity/low-wage auto assembly industry in the country which accounts for 70 thousand workers. However, we point out the importance of wire harness and seat parts as these two alone concentrate seven times more workers than the assembly lines

6 Data gathered from Mexican Economic Census, 2018, retrieved from: https://www.inegi.org.mx/app/saic/default.html

7 ‘In-bond’ or ‘twin plants’ refer to a Mexico-US division of labor in which high-tech, capital-intensive factories were located in the United States while labor-intensive plants were located on the Mexican. In essence, this binations asymetric division if labor in the production process continues to this day.

8 Data gathered from CEPAL. (1994). “México: la industria maquiladora” CEPAL, pgs 130-131, retrieved from: https://repositorio.cepal.org/bitstream/handle/11362/27119/LCMEXR495_es.pdf?sequence=1

9 Information gathered from the Municipal Research and Planning Institute, http://www.imip.org.mx/directorio/ampliada.pdf (08/01/21)

10 This is probably the reason why there has been notorious lack of recent research focused on industrial progress in CJ.

11 Interview with a harness maquila worker in Ciudad Juárez, March 2018.

12 Interview conducted in April 2018, Ciudad Juárez.

13 Interview with a seat part maquila worker, March 2018, Ciudad Juárez.

14 González, Iris (March, 2019) Rotación en maquilas sube a nivel histórico, El Diario de Juárez, retreived from https://www.pressreader.com/mexico/el-diario-de-juarez/20190306/282595969217786 (22/07/2021)

15 Interview conducted with a wire harness maquila worker, March 2018, Ciudad Juárez.

16 This information was obtained from interviews with wire harness maquila workers in January 2021.

17 Meager salaries and wage stratification have the approval of what is known in Mexico as protection labor agreements (“contratos de proteccion”), which refer to bargaining agreements signed by pro-corporate unions (“sindicatos patronales”), which respond to corporate needs and turn their backs on the workers. These corporate unions are essential actors in perpetuating adverse and violent conditions operating against workers, both in salaries and wages and in the configuration of the intensive and exhaustive labor process. (Covarrubias and Bouzas 2016)

18 Interview with a wire harness maquila worker, March 2018, Ciudad Juárez.

19 Interview with a seat part maquila worker, March 2018, Ciudad Juárez.

20 Interview with a seat part maquila worker, February 2018, Ciudad Juárez

21 Interview with a wire-harness maquila worker, March 2018, Ciudad Juárez.

22 Interview with a seat part maquila worker, March 2018, Ciudad Juárez.

23 Interview with a seat part maquila worker in Ciudad Juárez, February 2018.

Additional information

Notes on contributors

Mateo Crossa

Mateo Crossa is a research professor at Instituto Mora, Mexico City.