Frontera NorteSur July & August 2001

INEGI data show that the largest gains in maquiladora employment for the first three months of 2001 were in Guanajuato (19.7%), Sonora (10.4%), Baja California (8.5%), Yucatán (6.7%), Puebla (5.6%) and the State of Mexico (5.2%). Other growth figures given were for Aguascalientes (2.5%) and Chihuahua (1.0%).

Coahuila, Nuevo León, Durango, Sinaloa, Jalisco and Mexico City lost maquiladora employment as compared to the first three months of 2000.

El Mañana also wrote that Tamaulipas officials say that the state's 270 companies with maquiladoras in Tamaulipas are not experiencing severe economic consequences from the US slow down. To the contrary, state officials stated that US companies are coming to Mexico looking for ways to lower operational costs during the downturn of the US economy.

Source: El Mañana, June 18, 2001.

Back-to-School Price Monitoring

The Procuraduría Federal del Consumidor (Federal Consumer Protection Agency, Profeco) started its "Back-to-School Program" on June 18, 2001. It will continue through September 19 of this year.  Jesús Gerardo Martínez Santoyo, Profeco director of monitoring and verification, says that the national program's goals are to prevent illegal pricing practices by businesses and to protect consumers from high prices. Over the next few months, as parents spend money to acquire the goods they need to send their children to school, there is traditionally high demand for school uniforms, shoes, and school materials.

The first action that Profeco will take in its "Back-to-School Program" is to send appeals to businesses that sell high-demand products like school supplies, clothing and shoes. The appeals ask that businesses comply with the Ley General de Protección al Consumidor (General Law for Consumer Protection) and that they offer promotions, discounts and special offers that will insure savings to families. The program will also include continual price monitoring and the creation and distribution of reports on the quality of goods sold in Mexico. Profeco will also watch store sales and promotions to make sure that buyers are getting the deals they are promised.

Prices on back-to-school supplies and school uniforms are very important throughout Mexico because many families say that they keep their kids out of school when they cannot afford to buy them needed materials. Last year at this time the Matamoros press ran stories stating that pawn shops are at their busiest in these months because parents pawn jewelry and electronics so as to be able to get their children enrolled in school.

Source: El Mañana (Reynosa), June 19, 2001. El Mañana (Nuevo Laredo), June 19, 2001.

Heat Wave Hits Tamaulipas, Energy Use Up

José Rafael Velázquez Casillas, Reynosa's Comisión Federal de Electricidad (CFE) superintendent, states that electrical substations are functioning at full capacity due to the recent heat wave that has hit Tamaulipas. On Sunday, June 11, 2001 temperatures in Reynosa reached 42 degrees Celsius (107.6 Fahrenheit).

In response to the increased use of air conditioners and refrigerators in Reynosa, Velázquez says that the CFE is accelerating work on new power substations. It is also working faster to complete expansions of existing facilities.

Last week Matamoros, a city approximately 60 miles east of Reynosa, lost power for six hours because of problems at the nearby Río Bravo power station. Matamoros maquiladoras later complained to the press that the blackout caused them financial losses.

Source: El Mañana, June 12, 2001.

Matamoros Businesses May Demand Payment for Damages Due to Blackout

A six-hour blackout caused unknown losses to the Matamoros business sector. Wenceslao Cantú,
president of the Cámara Nacional de la Industria de Transformación, says businesses should demand payment for the damages they incurred from the blackout.

Cantú said that industry losses were immense and difficult to calculate. The blackout led to a production decrease because third-shift employees could not go to work. Factories that operate large electric furnaces also had great losses because it takes 8 hours for the furnaces to heat up fully.

According to the Comisión Federal de Electricidad (CFE ) the blackout was caused by an unknown problem at the Río Bravo power plant. Reynosa also lost power as well. The CFE stated that the power outage lasted only an hour and fifty minutes. Cantú said that blackout actually lasted six hours.

Source: El Bravo, June 1, 2001. Article by Rosy Pereda.

New Jumex Plant in Méxicali: Hires Mostly Men, Hard to Sell to "Perfectionistic" White Market Says Director

Jumex began operating its new Méxicali plant in February, 2001 after an investment of approximately US$10 million. In article about the plant, the Méxicali newspaper La Crónica states that Jumex's policy is to hire mostly men because it belongs to the manufacturing industry while women can work in the maquiladora industry. No explanation for the reasons behind this policy was given. Richard Kunkel, Jumex's Méxicali director, said that one of the plant's biggest problems is employee turnover which he attributes to the ease with which jobs can be found in Méxicali.

Kunkel also told the newspaper that the juice-making factory employees more than 200 workers and exports to Arizona, California, and New Mexico. Jumex primarily serves the Mexican and
Mexican-American markets in those states. About breaking into other markets Kunkel said, "For a Mexican food-industry producer it is hard, although not impossible to capture the white (anglosajón) market as our products are not very well known--and besides this culture is very perfectionistic and protects its own, consuming what it produces in its own country." Baja California, Chihuahua, and Hermosillo are also served by the new plant.

Although operational, Jumex's new plant is not yet finished. By the end of the year it should employ 350 workers. In the future Jumex expects to invest another US$8 million in the plant.

Source: La Crónica, June 11, 2001. Article by Mariana Rivero.

Federal Consumer Protection Agency Bans Sale of "Fart Bag" and "Fragrant Bomb"

Méxicali's newspaper La Crónica states that the Federal Consumer Protection Agency (Procuraduría Federal del Consumidor, Profeco) has banned the sale of the toys "Fart Bag" and "Fragrant Bomb." Imported from Asia, the toys are envelopes that children inflate and then step on. The envelope or bag explodes releasing a bad odor.

Profeco says that the bags' contents (sodium bicarbonate and citric acid) produce nausea, dizziness and vomiting in children. Fart Bags and Fragrant Bombs were discovered in the state of Querétaro, especially outside the state's elementary schools. 5,000 of the devices were seized by Profeco from a Mexico City warehouse. The warehouse was shut done by Profeco.

Profeco recommends that parents watch what their children play with so as to protect their health.

Source: La Crónica, June 11, 2001.

Méxicali Home Building to Continue Despite Economic Slowdown

The construction of new homes in Méxicali will not be affected by economic slowdown, according to Salvador González, executive director of the Consejo Promotor de la Vivienda (Housing Development Council, Coprovi). The group's goal for 2001 is to build 8,225 new homes in Méxicali, an increase from the 6,500 homes finished last year.

González also stated it is important that financing continue as it has in the past. He added that there is neither any uncertainty in the building sector nor any negative expectations for the sector's growth.

The economic slowdown in the region will most likely affect the maquiladora industry in the form of higher unemployment, González said. However, the unemployed will have the opportunity to incorporate themselves into such sectors as commerce, the service industry and construction. González also noted that each home under construction generates eight jobs, five direct and three indirect.

Source: La Crónica, May 22, 2001. Article by Mariana Rivero.

More Than Five Thousand Foreigners Employed in BC Maquiladoras

A spokesperson from Mexico's Instituto Nacional de Migración (INM) states that Baja California Norte's 600 maquiladoras legally employ more than five thousand foreigners. The INM also said that these employees are mainly from Asian nations and are employed in Asian-based electronic firms. The foreign employees work as trainers and managers in the plants, the INM stated.

The INM keeps files documenting the maquiladora industry's employment of foreigners and maquiladoras are required to report any changes related to the employment status of foreign workers.

According to the INM's numbers, approximately 50 percent of Tijuana's foreign maquiladora workers are from Japan. The majority of Japanese maquiladora employees live in San Diego and cross the border daily to work in Tijuana.

Source: Martin F. Borchardt,  June 13, 2001.

Tijuana Maquiladora Workers Sickened by Alleged Gas Leak

On June 11, 2001 fire fighters responded to a toxic gas leak at the "Square de México" maquiladora located in the Otay industrial zone. Officials said they believed that it was a release of acetylene gas that sent 26 workers to the hospital.

According to Dr. Ana Rosa Leos Oropeza, director of  the Unidad Médica Familiar No. 36 of the IMSS (Instituto Mexicano del Seguro Social), three of the 26 workers remained under medical observation because they were showing high blood pressure and a serious allergic reaction to the gas. The other 23 workers showed symptoms of intoxication but were not so badly affected.

Source: Martín Borchardt. June 12, 2001.

Tijuana Requires Environmental Impact Statements and Project Approvals

According to Carlos Silva Tonche, the Tijuana environment director (director de ecología), the city now requires that industrial, commercial and service projects produce environmental impact statements before beginning work. The city will then review the statements and decide whether or not to consent to the projects. All projects must have the consent of the city before they are begun or the projects will be stopped by city officials.

Silva said the new city requirement fulfills Article 29 of the Reglamento Municipal para la Protección al Medio Ambiente (City Environmental Protection Regulations). The new environmental requirements went into effect on June 6, 2001 when it was published in the Periódico Oficial del Estado (Official State Newspaper).

The city will either authorize a project based on the environmental impact statement, give conditional authorization for a project or will turn down a project. Environmental impact statements and final city approval will be required for the construction of factories, subdivisions, pharmacies, bars, stores, auto shops and all similar projects.

Source: Frontera, June 7, 2001. Article by Aline Corpus.

Ciudad Juárez Helps US Celebrate 4th of July

Recaredo Núñez Alvarez, president of the Asociación de Empresarios y Profesionistas (Business Owners and Professionals Association) located on Avenida Juárez, told the Ciudad Juárez newspaper El Diario that the Viva la Independencia de Estados Unidos (Long Live US Independence) festival will take place in downtown Cd. Juárez along Avenida Juárez. The celebration is sponsored by Núñez's association along with city and state governments.

Núñez also announced that Avenida Juárez will also be closed to traffic for 29 hours beginning the night of July 3 until midnight July 4. During that time the street will be filled with food booths, games and amusement-park style rides. There will also be three stages for performers set up along the street as well.

To avoid blocking access to the Paso del Norte international bridge, Mariscal and Francisco Villa streets will be used as a detour route. Núñez also stated that the area will be supervised by city police officers and traffic police.

So as to attract tourists businesses will begin displaying their products on Tuesday, July 3. Avenida Juárez will be filled with booths from the the Paso del Norte bridge to Avenida 16 de Septiembre.

Source:  El Diario, June 26, 2001. Article by Rocío Gallegos.

The Importance of the Drug Trade in the Mexican Economy

The Ciudad Juárez newspaper El Diario writes that according to journalist Carlos Loret de Mola's new book, "El Negocio" ("The Business"), the Mexican drug trade is twice as large as the nation's oil sales--based on a conservative estimate of the size of the drug trade. Using the same data, Loret concluded that profits from the country's drug cartels are three times larger than the combined profits of Mexico's 500 largest companies.

Loret based his figures on the size of the drug trade on official, non-official and secret data from the Centro de Investigaciones y Seguridad Nacional (Cisen). The journalist also concluded that if the drug trade quickly disappeared in Mexico there would be an economic crisis worse than that of 1995.

According to one Cisen document to which Loret had access the US economy could contract 19-22% and the Mexican economy could fall as much as 63% if the drug trade was suddenly stopped.

Loret's book is scheduled to go on sale soon in Mexico.

Source: El Diario, June 25, 2001.

Mexican Cattlemen to Build Auction Facility in Santa Teresa, NM

The Unión Ganadera Regional de Chihuahua (UGRCh), known in English as the Chihuahua Cattlemen's Association, plans to build and operate the world's largest cattle auction facility in Santa Teresa, New Mexico. Opened in early 1992 at the Santa Teresa-San Jerónimo international border crossing--approximately 15 miles from Ciudad Juárez and El Paso--the UGRCh currently sells between 250,000-300,000 Mexican calves per year to feed-lot operations in the US.

The Unión Ganadera de Chihuahua Inc was created to manage the auction house. So as to receive better support from US cattle buyers the decision was made to locate the facility in the US, according to Manuel Payán Novoa, UGRCh president. Payán also said that the group wants to establish a similar, smaller facility in Presidio, Texas because that city is the second-largest border crossing for Mexican cattle.

So as to get the Santa Teresa auction facility off to a quick start the UGRCh will soon seek the approval and assistance of President Vicente Fox and Chihuahua Governor Patricio Martínez. The organization has already set aside money for the project and three builders have already been contracted to begin work on the building. UGRCh cattlemen are currently touring the US to find the best auction technology that they can then incorporate into the Santa Teresa facility. The auction house should be ready by November, 2001.

To insure that the calves arrive disease free to the US, they are examined by USDA officials just on the Mexican side of the Unión Ganadera facility. Calves must be TB and Brucellosis free to come to the US. Once they have passed inspection the calves are dipped in a chemical bath to rid them of ticks or any other insects that should not come into the US. Once bathed the calves are crossed to the US and loaded on to multi-level trailers to be hauled to their final destination. Calves from Mexico can always be identified by a letter "M" branded on their right hip.

To see a previous FNS article on the Unión Ganadera go to http://www.nmsu.edu/~frontera/dec00/feat2.html

Source: El Diario, May 31, 2001. Article by M. Quezada & R. Lechuga.