MCALLEN, RGV – A severe labor shortage in Reynosa is causing maquila plant managers to be creative in looking for additional workers.

One idea is to work with Border Patrol and the Mexican government to see if undocumented immigrants that get sent back to Mexico from the United States could be picked up immediately maquila companies.

“I talked to the Border Patrol a couple of weeks ago, and we are going to try to work with the Mexican immigration authorities and maybe use those who repatriated,” said Darrel Renfrow, a board member of INDEX Reynosa, the maquila trade association. Renfrow manages the Procesos Eslabonados de Manufactura maquila on the east side of Reynosa.

Darrel Renfrow

“Some that are being deported back to Reynosa, let’s see if we can’t bring them back into the labor market. It is kind of ambitious because there is a lot of factors involved. At least we are taking these steps.”

Renfrow made his comments at a recent McAllen Economic Development Corporation board meeting. Keith Patridge, president of McAllen EDC, said maquilas in Reynosa are currently hiring 121,000 workers. “There are plans for several thousand more before the end of the year,” Patridge said.

Renfrow said the key thing to look at is employment growth in the Reynosa maquila industry since the 2008-2009 recession.

“Employment is up 40,000 since 2010. We are seeing the growth but we are in a very, very, tight labor market. Companies, including myself, we have had to resort to very aggressive recruiting tactics and strategies and sometimes at the expense of our neighbor,” Renfrow said.

Keith Patridge

In such a tight labor market, skilled workers can move from one company to another to see which one is offering the best wage with benefit. Renfrow cited the occasion when ten new workers showed up at his plant. He quickly learned they were from the plant run by the president of INDEX. “Needless to say, we had to return them.”

Renfrow said the labor shortage is certainly having an impact.

“It is causing us to re-evaluate how we educate and train our new operators. We have to treat them very well as they come in the door. We cannot ignore them. It is making better labor stewards of everybody but at the same time we are seeing the cost of direct labor go up, and that is not just for union labor but also our trained, skilled labor,” Renfrow said.

“We are looking for ways to expand or attract more employees to Reynosa and also to extract more employment from the existing marketplace.”

To help find new workers for Reynosa, Dan McGrew, industrial relations director for INDEX Reynosa, recently held a jobs fair in Camargo. “That seems a long way up the river, but there is some labor there to be had, there is some fruit to be picked there. It is just a question of being to transport those people back and forth,” Renfrow said. “These are the things we are doing to attract more labor into the market.”

MEDC President Patridge and MEDC Vice President Ralph Garcia pointed out that the labor shortage is not restricted to Reynosa. Garcia said turnover of workers in maquilas in Juarez are currently higher than they are in Reynosa.

“I hear it is worse in Juarez. I don’t know what Matamoros is like. But, Juarez, and I am sure anywhere on the border, the labor market is very, very tight. It could be a product of more employment in the interior of Mexico. It is very frustrating. We hire a lot of people and we train them and two weeks later they get a better offer,” Renfrow said.

Patridge said he is hearing the labor market is also tight in Monterrey. Renfrow said he would not be surprised.

U.S. Labor Market

Patridge is planning to have a planning session for his board of directors. He said the current political climate, new technology and the labor market would be among the issues discussed.

“The tight labor market is not unique to Reynosa. Right now, we are in the same situation in the U.S.,” Patridge said. We had the site selectors in. They said that where they are coming from, which is other parts of the country, the Mid-West, Nebraska, Ohio, that area, they are down as low as two percent unemployment. This whole labor issue right now, is two things. One, in some areas it is the availability of more bodies and in some areas, it is the availability of skill sets. Between the two of them, it is becoming a labor issue.”

Patridge recounted a story he recently heard about Toyota.

“We just got word earlier this week that Toyota is having a lot of difficulty trying to keep their plant in San Antonio staffed. They have a plant in Mississippi that they just built and they literally can’t staff it. There are not enough people for them to staff the plant. They are now wishing they had not built it there,” Patridge said.

“They are not going to build a brand-new plant and move it but they are going to start recruiting from other areas. They are going to try to start moving people in. That is one of the things we have to watch, to make sure we don’t become a target for other companies and other communities coming down to recruit. It has happened in the past.”

Patridge said that, right now, MEDC is not seeing a lot of it but warned that it could happen.

“All of us as employers, it is something we need to look at. What is the strategy that we are going to take to make sure that we can continue to staff our plants?” Patridge said. “It is not unique to Reynosa. In fact, it is pretty much a global thing. There is as skills shortage pretty much everywhere in the world. It is something we need to be looking at.”