• When the latest bloody headlines from the drug war in Mexico reach headquarters in New York, Ken Chandler, the manager of a U.S. electronics manufacturing plant in Matamoros, jumps on the phone.
He is not begging to come home. He is begging to stay.
“We try to put them at ease, to say it is not time to pack up,” said Chandler, who oversees the company’s operations in the border city, where the military arrived last week to help purge drug gang members from the Police Department.
Not that his employer, Spellman High Voltage, needs much assurance. Like a crop of other manufacturers at the border, including six companies in Matamoros alone, Spellman is expanding its operations, with a plant under construction after making a calculation that offers one of the starker paradoxes of these violent days in Mexico.
Despite the bleak outlook the drug war summons, the Mexican economy is humming along, not without warning signs, but growing considerably more quickly than that of the U.S.
Even as drug organizations battle for turf around them, more TV sets are being assembled, car parts boxed up and electronic widgets soldered together in the large manufacturing plants known as maquiladoras. The result is a boomlet in jobs in some of Mexico’s hardest-hit cities, a bright spot in an otherwise bleak stream of shootouts, departing small businesses and fear of random death.
Overall, jobs in Mexico’s manufacturing sector increased 8.2 percent to 1.8 million as of January, the most recent figures available, driven mostly by what Mexican officials called regaining health in the auto and electronics industries, the engine of the economy along the border. Even Ciudad Juarez, which has the highest level of violence and the largest number of maquiladoras, added 1.3 percent more jobs, to 176,824.
Mostly U.S.-owned and in border states, the plants import raw materials duty free and export assembled products, lowering the cost of goods in the U.S. and providing jobs that pay more than the Mexican average (typically $8 to $16 per day on the assembly line) but a lot less than U.S. wages.
The gains have not made up for losses during the global recession; many plants closed or have shed jobs for good, focusing on making their operations more efficient through automation and other measures, analysts said.
Still, border towns are showing some of their biggest signs of economic life in months. Overall, the Mexican economy, the second largest in Latin America after Brazil, grew 5.5 percent last year, its fastest pace in a decade, and is expected to grow 4.5 percent this year, driven largely by manufacturing as well as internal growth from an expanding middle class. The U.S. economy, by contrast, is expected to grow between 2.7 and 2.9 percent in 2011, the Federal Reserve projected late last month.
“Mexico is at a high-water mark in most performance indicators,” said Roberto Newell, a Mexican economist and fellow at the Woodrow Wilson Center for International Scholars in Washington. “The balance of the last 20 years of development and growth is largely positive. Mexico is in better shape today than ever before.”
He and other analysts believe, however, that the country may have been further along without the drug violence, which in the past five years has left more than 40,000 people dead, according to the count by national newspapers.
Monterrey, the country’s business and industrial hub, has exploded with violence in the past year, though even there, in the suburbs, some plants have expanded or announced plans to open. For better or worse, the plants are at once part of and apart from the communities that surround them, protected by tall fences, armed guards and cameras galore.
The violence has largely spared the plants, though workers have been caught up in it. Last fall, gunmen apparently looking for a rival fired on a bus carrying maquiladora workers near Ciudad Juarez, killing four people. Higher-paid supervisors and managers, both American and Mexican, tend to live on the U.S. side of the border and commute.
Security costs are rising to protect property and shipments, and safety remains the top concern expressed by potential investors, said Bob Cook, president of the El Paso Regional Economic Development Commission, which helps recruit businesses to Ciudad Juarez, Mexico’s most violent city.
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