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MISSION, RGV – INDEX, the trade association group for maquiladoras in Mexico, says 66 percent of jobs in the state of Tamaulipas are linked directly or indirectly to maquilas and the manufacturing sector.

The figures are even higher in three other border states. In Chihuahua the percentage is 84.2 percent, in Baja California it is 73.5 percent and in Coahuila it is 67.9 percent.

Emilio Cadena, president of INDEX Mexico.
Emilio Cadena, president of INDEX Mexico.

The percentages were contained in a power point presentation on the importance of manufacturing to the Mexican economy by Emilio Cadena, national president of INDEX, at an INDEX Reynosa breakfast event at the Club of Cimarron in Mission on Wednesday. The power point presentation was titled, “The Power That Moves Mexico Forward.” Cadena said the figures he cited were of the formal economy, not the underground economy.

“Sixty-six percent of the formal jobs in Tamaulipas depend on the success of the manufacturing plants. This is one of the huge returns on investment for Mexico. It is one of the huge challenges for Mexico also because less than one percent of the employers represent 66 percent of the total jobs generated in the state,” Cadena said.

“This is why we insist to the authorities, to the state, city and federal government, you need to take care of us. Not only are we the most important sector, let’s put it in pure business, economic, terms, we give them (the government) the absolute best return on investment. Every single plant that we have generates a lot of jobs.”

Cadena said the statistics in his presentation came from a survey INDEX carried out to coincide with a meeting the group had in Mexico City that centered on making manufacturing more competitive. He said that between April 2014 and April 2015 imports grew by 2.9 percent in Mexico while exports grew by 11 percent. He said the trade balance of the manufacturing for export sector grew almost 40 percent. He said it was worth $42 billion and is now worth $60 billion. The other good news, he said, is that manufacturing firms are locating more and more local suppliers. Cadena said there was a six percent increase in manufacturing jobs in Mexico over the last year. “It is a huge compliment,” he said.

Transportation equipment, which includes auto, rail and aerospace, is the biggest sector for jobs in Mexico, Cadena said, followed by computers, communications and electronics, electrical equipment, plastics and food products. In fact, he said, 70 percent of jobs in Mexico are related to transportation equipment. “It is a great number but we have seen it before in history, it is a great challenge, and a great risk, to depend 70 percent on what is happening in the automotive sector.”

Cadena had a message for the federal government – let the marketplace take care of the economy. He said industries that were receiving government helps, such as textiles, leather and apparel, were doing far worse than those that received no help. “The formula for success is very simple, leave us alone, allow us to make our lives simple and we are going to continue to grow. Productivity is directly related to competition. Competition makes us better. We have extremely strong data to make our arguments,” Cadena said.

Cadena said competition also leads to higher wages. “The sectors that are more open pay the most. The economic development formula is very simple, allow us to be competitive, leave us alone, allow us to live as simple as possible and we will create more jobs and better jobs,” he said.

Wrapping up the findings of the survey, Cadena said the IMMEX (manufacturing) sector is key for Mexico not just today but for many years to come. His concluding bullet points were that the manufacturing sector is formal, productive, and pays well. Therefore it equals growth and prosperity. He said it gives the best opportunity for social mobility, generates close to 50 percent of formal private jobs in Mexico, allows opportunity to create new businesses and jobs through the supply chain, and is the sector that best reflects the World Class Mexico that exists today.

“Everybody that works in a manufacturing plant has to become a world class citizen in terms of value, in terms of productivity, in terms of the quality of work that they do,” Cadena said.

Going forward, Cadena said, Mexico has to develop a world class legal framework based on trust if the country’s manufacturing base is to prosper.

“They (the government) are always assuming we are cheating. Because they are always assuming we are cheating then everyone is designed to control us better. They make you wait at the line. The most sophisticated and modern industry in the world needs the most sophisticated and modern legal framework. We are saying, once I have proven to you that I am a trustworthy taxpayer then you have to treat me different. All the progress we are trying to do, all the benefits we are trying to achieve are going to be for the companies that are certified as a trusted exporter.”

Editor’s Note: The above story is the first in a two-part feature on INDEX Mexico President Emilio Cadena’s remarks at an INDEX Reynosa event at the Club of Cimarron in Mission, Texas. Click here for part two.