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ABSTRACT
International monetary organisations argue the ‘developing countries’ should foster linkages to the world economy as a means to overcome backwardness. In this article we refute the narrative that Mexico has experienced industrial upgrading. Rather, industrial growth in Mexico over the last 40 years has been shaped by neoliberal economic policies which have turned the Mexican economy into an export-led manufacturing platform designed to supply the North American market, sustained by a precarious labour market. As a result, Mexico occupies the most labour-intensive and low value-added segments of regional production chains. To make this argument, we perform an in-depth analysis of the Mexican automotive industry, demonstrating that instead of being an engine for domestic industrial development, the auto industry has become a dominant economic sector through productive hyper-specialisation concentrated in the northern Mexican border states, a reliance on transnational capital, particularly from the United States, a disconnect with domestic markets, and the super-exploitation of labour.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 See Henderson et al., “Global Production Networks”; Coe et al., “Globalizing Regional Development”; Yeung, “Regional Development and the Competitive Dynamics.”
2 World Bank, “Global Value Chains,“ World Bank website, accessed September 9, 2018, http://www.worldbank.org/en/topic/trade/brief/global-value-chains
3 Gereffi, “Global Economy: Organization, Governance, and Development,“ 171.
4 López Salazar and Carrillo, “Escalamiento y trabajo,” 83.
5 Lall, “Technological Structure and Performance.”
6 Blyde, Martincus, and Molina, Fábricas sincronizadas, 10.
7 Gereffi, Humphrey, and Sturgeon, “Governance of Global Value Chains.“
8 Words of OECD Secretary-General Angel Gurría at the OECD Forum in Paris, 2013. Published on the OECD website, accessed September 9, 2018, http://www.oecd.org/economy/newapproachtoglobalisationandglobalvaluechainsneededtoboostgrowthandjobs.htm
9 Villalpando, “La evolución de la industria maquiladora”; Carrillo and Gomis, "Generaciones de maquiladoras”; López Salazar, Juárez, and Carrillo, “Complejidad e innovación en proveedores,” 171.
10 Lourdes, Carrillo, and González, El auge de la industria automotriz.
11 López Salazar, Juárez, and Carrillo, “Complejidad e innovación en proveedores,” 180.
12 ProMexico, “Cadenas globales de valor,” 8.
13 Amsden, “Diffusion of Development,” 283.
14 Although this article doesn’t aim to expound on the wide range of critical perspectives that counter notions of GVCs and industrial upgrading, there are two main perspectives. One is a labour-centred perspective that emphasizes the incorporation of a super-exploited labour force in the developing world, as a means to achieve inclusion in global production networks. See Selwyn, “Poverty Chains and Global Capitalism”; Hough, “Race to the Bottom”; Smith, Imperialism in the Twenty-First Century; Cope, Labor in Transitional Societies. The other main perspective highlights the role of GVCs in the perpetuation of uneven development. See Fernández, La trilogía del erizo-zorro; Werner, “Global Production Networks and Uneven Development”; Werner, Bair, and Fernández, “Linking up to Development.” Both perspectives demystify the narrative centred around the idea that global production and distribution networks function as development levers.
15 Marini, “Dialéctica de la dependencia.”
16 Cypher and Delgado Wise, Mexico a la deriva, 141.
17 Arteaga, Integración productiva, 70.
18 This territorial division of labour, wherein most of the auto parts were made in the Rust Belt region and then distributed to assembly lines scattered around the US and the larger global economy, was named by geographers Rubernstein and Klier the ‘Branch Assembly Model’. Klier and Rubenstein, Who Really Made Your Car?, 40.
19 Bennett and Sharpe, Transnational Corporations versus the State, 117.
20 Launched in 1965, the Border Industrialization Program allowed US companies to temporarily send parts of their production across the Mexican border without having to pay taxes or comply with Mexican rules of origin.
21 ProMexico, “Estudios de capacidades,” 5.
22 The 1980 data were taken from Arteaga, Integración productiva, 105. Data from 1990 and 2000 were taken from the Centro de Estudios de las Finanzas Públicas (CEFP). (2002). Análisis Económico y Fiscal del Sector Automotor de Mexico, 1990–2001. DF: Cámara de Diputados. Data from 2010 and 2018 were taken from INEGI’s Economic Information Bank, at http://www.inegi.org.mx/sistemas/bie/
23 The auto-related export industry data from 1983 to 1991 was taken from Barajas, Sosa, 2015, La industria automotriz de Mexico: de la sustitución de importaciones a la promoción de exportaciones. Revista Análisis Económico, 20(44), 208. The rest was taken from INEGI’s Economic Information Bank at http://www.inegi.org.mx/sistemas/bie/
24 Medina Ramirez, “La Dependencia Tecnológica En Mexico.“
25 Bureau of Labor Statistics (BLS), Current Employment Statistics, https://www.bls.gov/ces/; INEGI, Banco de Información Económica, http://www.inegi.org.mx/sistemas/bie/
26 Nolan, Zhang, and Liu, “Global Business Revolution,” 29.
27 Cypher and Delgado Wise, Mexico a la deriva,141.
28 Data taken from OICA, Production and Sales Statistics, http://www.oica.net/
29 ProMexico, “La industria automotriz mexicana,” 54.
30 NAFTA Rules of Origin require that 60% of the vehicle content must originate in any of the three North American countries. Japanese, Korean and German firms have taken advantage of this trade requirement and established their new assembly plants in Mexico, without having to link their production chain to the US. The USMCA elevates North American auto content to 75% and requires that 40% of a vehicle’s value must be produced in a North American country where wages are higher than $16 per hour (ie the US and Canada). These new conditions will force firms to link their production to the US economy.
31 Miker, Aprendizaje Laboral, 29.
32 Data taken from UN Comtrade, HS02 codes 854430 and 940190, https://comtrade.un.org
33 Lara, García Garnica, and René, “La Dinámica Del Cambio Tecnológico.“
34 AAPC, “State of the US Auto Industry,“ 12.
35 In these less automated links of the global production chain, work is clearly subsumed to the logic of capital; our interest is in emphasising that the stages of the production process found in Mexico are the most manual in the entire production process.
36 Interview with anonymous plant manager, Ciudad Juárez, summer 2018.
37 Sturgeon, et al., Philippines in the Automotive Global Value Chain, 7.
38 World Bank, Trading for Development in the Age of Global Value Chains, World Development Report 2020, https://www.worldbank.org/en/publication/wdr2020
39 Gallagher and Zarsky, Enclave Economy.
40 The notions of competitive advantages and industrial clusters, tailored by Michael Porter and grounded in neoclassical thought, refer to an articulated and interrelated environment of industrial factors that produce an ecosystem of competitiveness that promotes local development and the formation of industrial regions bound to the process of globalization. Porter, Competitive Advantage.
41 Carrillo, Maquiladoras automotrices; Davila Flores, “Clusters industriales del noreste de Mexico.”
42 Daville Landero, “Relocalización de la industria automotriz”; Carbajal, Carrillo, and Leobardo de Jesús, "Dinámica productiva del sector automotriz.”
43 Klier and Rubenstein, Who Really Made Your Car?
44 The industrialization of the northern border was also encouraged by the Decree for the Development and Operation of the Maquiladora Industry (1989), which further opened border states to foreign investment and increased the export of goods to northern markets. The maquiladora programme has since been expanded to the entire nation.
45 Information taken from the Directorio Estadístico Nacional de Unidades Económicas, http://www.beta.inegi.org.mx/app/mapa/denue/
46 Yazaki operates in Mexico under the following names: Arnecom, AAMSA, Autoconectores de Chihuahua, BAPSA, PEDSA, ACOSA and Sistemas Eléctricos y Conductores. Delphi/Aptiv operates in Mexico under the following names: Aees Manufacturera, Alambrados y Circuitos Eléctricos, Aptiv, and Delphi Rio Bravo Electricos.
47 Sumitomo operates in Mexico under the following names: Sistemas de Arneses K&S Mexicana and ATR. Condumex operates in Mexico under the following names: Contec and Arneses Eléctricos Automotrices.
48 Information taken from the Directorio Estadístico Nacional de Unidades Económicas, http://www.beta.inegi.org.mx/app/mapa/denue/
49 Adient is a spinoff of Johnson Controls, and operates in Mexico under the following names: Brena Mex, TechnoTrim, Ediasa and ADIENT. Lear Corporation operates in Mexico under the names Consorcio Industrial Mexicano de Autopartes and Lear.
50 Marini, “Dialéctica de la dependencia.”
51 Covarrubias and Bouzas Ortiz, Empleo y políticas sindicales.
52 Interview with Misty Mathews in the Management Briefing Seminar in Travers City, August 2017.
53 CAM figure taken from CAM, “Investigation Report 127”; Figures of wages in the automotive industry taken from the INEGI Monthly Survey of the Manufacturing Industry. Found in the Economic Information Bank, http://www.inegi.org.mx/sistemas/bie/
54 Interview with Claudia, assembly line worker, Ciudad Juárez, summer 2018.
55 Ebner and Johnson, “Blood and Borders.” Based on over a year of fieldwork, and on conversations with workers, Ciudad Juárez, 2017–2019.
56 For more on the notion of superexploitation in Marxist Dependency Theory, see Osorio, “Fundamentos de la superexplotacion.”
57 Wright, Disposable Women and Other Myths.
58 Ibid., 101.
59 On 1 May 2019, AMLO’s government passed a labour law reform to organize independent unions, although it is unclear how this new reform will be implemented or enforced. See http://dof.gob.mx/nota_detalle.php?codigo=5559131&fecha=01/05/2019
60 Arteaga, Integración productiva, 103.
61 Covarrubias and Bouzas Ortiz, Empleo y políticas sindicales, 10–1.
62 Words of sociologist Arnulfo Arteaga taken from https://www.reporteindigo.com/reporte/industria-automotriz-Mexico-contratos-laborales/, accessed August 18, 2018.
63 Ibid.
64 Tyx, “Labor Spring for Mexico’s Maquilas?”
65 Marini, “Dialéctica de la dependencia.” Also see Selwyn’s critique of ‘residualist’ assumptions that ‘inclusion into capitalism, or globalization or the world market brings economic growth and development’. Sewlyn is emphatic in stating that the inclusion narrative only hides the deepening of exploitation and poverty in developing economies. Selwyn, Global Development Crisis, 2.
66 eg Werner, “Global Production Networks and Uneven Development.” In this formulation, the emphasis is on the ‘restrictive and longstanding forms of social unevenness’ (461) which are constitutive of global production networks.
67 Werner, “Extending Labor and Uneven Development,” 374.
Additional information
Notes on contributors
Mateo Crossa
Mateo Crossa holds a double degree PhD in Development Studies at the Autonomous University of Zacatecas (UAZ) and Latin American Studies at the National Autonomous University of Mexico (UNAM). His research interest is focussed mainly in the study of labour and the maquiladora industry in Central America and Mexico through the lens of critical Latin American political economy. His publications include the book Honduras: maquilando subdesarrollo en la mundialización [Honduras: Manufacturing Underdevelopment in Globalization]. He has also participated in multiple film projects such as the documentary film Made in Honduras, which portrays the life and labour rights organisation of maquiladora workers in Honduras.
Nina Ebner
Nina Ebner is a Doctoral Candidate in the Geography Department at the University of British Columbia. Her research interests lie at the intersection of feminist political economy, critical development and border studies. Her doctoral research focuses on economic development and labour market participation on the US–Mexico border, currently based in El Paso/Ciudad Juárez. She believes strongly in the importance of collaborative research, and is involved with grassroots efforts to end migrant detention, and to create more sustainable economic futures for border residents.