Well the town is clearly booming since the smoking ban. And the air is so clean I sometimes forget I'm in Baytown and think I'm in Aspen.*
*sarcasm
Well Thano,That was a masterpiece in legislation,That and the two stripes of paint down Texas Avenue. Maybe they could go across the border and enact legislation to save these people from industrial smog.>>>>>>>>>>>>>>>>> http://query.nytimes.com/gst/fullpage.ht...A966958260 --------------------------------------------------- Mexico's Hope for Industrial Might
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By LOUIS UCHITELLE, SPECIAL TO THE NEW YORK TIMES
Published: September 25, 1990
LEAD: From down the highway, the Ford Motor Company plant, which manufactures more than 1,000 car engines a day for the United States, seems at first glance like just another brown hillock on the vast desert plateau that surrounds this boom town.
From down the highway, the Ford Motor Company plant, which manufactures more than 1,000 car engines a day for the United States, seems at first glance like just another brown hillock on the vast desert plateau that surrounds this boom town.
Up close, a different story emerges. The Ford plant is a modern, high-tech factory, manned by highly skilled Mexican workers - and a pioneer in a process that is beginning to establish a manufacturing zone in northern Mexico that might some day rival South Korea or Taiwan or even the American Middle West.
Most of the force behind this process comes from United States companies, particularly auto manufacturers, that have invested hundreds of millions of dollars in up-to-date plants, whose products range from Kodak cameras and I.B.M. computers to Whirlpool appliances and Caterpillar forklift trucks. Big European and Japanese companies, including Volkswagen, Nissan and Sony, and several Mexican companies are also part of the movement. And their marketplace is primarily the United States.
The emergence of a high-tech industrial zone in northern Mexico, one roughly as large as California, would significantly alter both the United States and Mexican economies. If the movement takes root - and the factories do not pull up stakes in a decade or so - northern Mexico will become an extension of the United States manufacturing base, in effect increasing America's most sophisticated industrial capacity.
''Ford was among the first to demonstrate, with its Chihuahua engine plant, that the most sophisticated, high-quality manufacturing can be carried out in a rural, third world city that lacks experienced workers or adequate roads and communications,'' said Harley Shaiken, an economist at the University of California at San Diego, who has studied manufacturing in northern Mexico.
Perhaps most important, northern Mexico would add to the American labor force a pool of skilled workers, technicians and engineers, numbering perhaps two or three million people, whose wages for many years would probably be lower than their American counterparts. Already these new workers are showing up in neighborhoods of newly built, two-story apartments in Chihuahua, Monterrey, Hermosillo and Saltillo. Many have rooftop television dishes aimed north to capture American stations.
So far, United States labor unions have not strongly challenged the growing presence of these skilled workers, who earn only a fraction of the wages and benefits that are paid to American workers with similar skills. ''But if the United States unemployment rate were to rise during a recession, then what is happening in Mexico is likely to arouse considerable protest,'' Mr. Shaiken said.
After Ford came to Chihuahua in 1983, General Motors, Nissan, Volkswagen and Chrysler soon set up similar export-oriented engine plants, and now modern auto manufacturing plants are also being built, the most notable being a recently opened Ford factory in Hermosillo that makes cars for the United States.
The Second Stage
The new industrialization represents a second stage of manufacturing investment in Mexico. First came the assembly plants that are ubiquitous in northern Mexico. Known as maquiladoras, they are simple, labor-intensive operations that import parts for assembly into finished products that are then exported. Despite their numbers, the maquiladoras accounted for only 30 percent of Mexico's $12.5 billion in manufacturing exports last year. They create little wealth for the nation, beyond the $3 or $4 a day paid to the thousands of unkilled, often semiliterate workers.
In the second stage, Ford and the others are putting down deeper roots, carrying out most of the manufacturing process here. They have helped to double Mexico's manufacturing exports since 1985. Their success has depended on tapping into a hitherto ignored pool of Mexicans who have little manufacturing experience but are graduates of technical and vocational schools in every big city.
Big Technical Schools
Most of the schools are state-run, but some are private, the most famous being the Monterrey Technology Institute. It is a college level school with 45,000 students, several campuses and millions of dollars in support from private industry. I.B.M. and Apple Computer, for example, donated $20 million for a research center, not so much to develop technologies, but to teach existing skills.
Ford hired from this pool of workers for its new engine plant, which gave Chihuahua, until then a cattle and mining center, the town's first experience with heavy industry. The recruits learned not only to run the assembly line but also to maintain and repair the computerized machinery, and even to improve upon the manufacturing process.
''In the beginning, we had 50 Americans to train these people and to transfer our engine technology and engineering procedures, but now these skills are spread among many Mexican technicians and supervisors and we have only three Americans left here, including myself,'' said Lyle L. Raymond, the plant manager.
Ford officials brag that the 950 Mexican employees in Chihuahua are as productive as their American counterparts who manufacture the same four-cylinder engine in Lima, Ohio. The workers here earn $3 to $5 an hour, including benefits, while Ford's American employees receive more than $15 an hour.
A Typical Worker
Fernando Llanas, 30 years old, a graduate of the state-run Technology Institute here, is typical of the new work force. A supervisor at the Ford plant, he manages a team that both operates and repairs the computerized equipment that machines engine blocks and crankshafts. Before joining Ford in 1982, he considered emigrating to the United States. Now he earns $1,000 a month, a wage handsome enough in Chihuahua that his wife does not have to work. The couple have three daughters.
''I knew nothing about factories when I came here,'' Mr. Llanas said. ''I spent two months in Michigan for training and people came from there to teach us.'' Today, he and his colleagues train the newcomers, who always start as assemblers, and work their way up, through a series of in-house training sessions and exams, to technician and supervisor.
Now the Mexico-United States free-trade agreement, just entering the negotiation stage, is likely to accelerate the industrialization of northern Mexico. Without tariff barriers, manufacturing companies, foreign and Mexican, would concentrate on high-volume production. Each plant would be dedicated to a single product, to supply markets in both countries. Factories that for years served only the protected Mexican market would probably be forced out of business as too costly, or upgraded to high-volume production.
But free trade and open borders are still years in the future. For the moment, the foreign companies come for two main reasons: the pool of low-cost, skilled labor and the need to meet a Government requirement that foreign companies generate exports as a quid-pro-quo for the right to serve the Mexican market.
The Chihuahua plant, in fact, was a gamble on Ford's part to try to fulfill this requirement and compete more effectively against Japan by staffing a factory with low-cost labor sufficiently skilled to produce a world-class engine. Major Mexican companies have adopted the same strategy.
Joint Ventures
Whirlpool, for example, is installing a washing machine factory in Monterrey, in a joint venture with Vitro Inc., a Mexican conglomerate that manufactures glass products. Whirlpool pursues lower labor costs while Vitro seeks the technology to manufacture appliances on its own for export to the United States.
''We know that the Mexican labor advantage won't last forever; maybe 5 or 10 years more,'' said Tomas Gonzalez Sada, president of Vitro Household Products, the joint venture subsidiary. ''Once wages rise and the advantage is gone, and Whirlpool perhaps departs, we want to have the technology to continue on our own.''
Vitro's strategy will undoubtedly work, economists say. But Mexico has only about 10 manufacturing conglomerates, and they cannot by themselves sustain northern Mexico as an industrial power.
Foreign corporations are indispensable, businessmen and government officials say. But whether they stay, once Mexican wages have risen, depends on whether these companies find themselves hooked on Mexico. Probably the biggest hook is the development of a nearby network of reliable parts suppliers.
Decision Due in November
That, at least, is a major issue in Ford's thinking. The four-cylinder engine made here is soon to be phased out, and by November, Ford will decide whether to retool the plant, a process that could require tens of millions of dollars for new machinery to manufacture a new engine. Ford could also decide to move the factory to another country, the main candidate being the United States.
''The decision will probably be determined by Ford's overall global strategy,'' Mr. Raymond said. ''But a major consideration is ties with local suppliers.''
Those ties have come slowly, mostly because Mexican suppliers have had difficulty meeting quality standards. When the engine plant opened seven years ago, 65 percent of the parts were brought by truck or rail from the United States. Now this has been whittled to 50 percent.
Fuel injectors, some valves, the flywheel, the electrical harness and other items are still imported. But Mexican companies now supply the engine block, the intake manifold, clutch plates, piston rods, gaskets and, soon, the oil pan.
Seeking Suppliers
Above all, Ford wanted a Mexican supplier for the engine block, a heavy item that is expensive to ship from a Ford plant in Cleveland. The company finally found Cifunsa, a manufacturer in Saltillo that had been making the blocks for years, but only to the standards required for cars made and sold within Mexico.
Cifunsa was forced into a major upgrade, including a $150 million investment in a new plant. Although Ford did not underwrite the upgrade, it insisted that Cifunsa acquire engine block technology from Fiat and for months Italian technicians worked at the Saltillo factory, helping to train its employees and transferring the technology. ''We started with 27 Italians and we still have three here,'' said Ernesto Garza Martinez, Cifunsa's general director.
Ford experts also spent months at the company, supervising quality. To achieve the cost reductions that come with high volume, Cifunsa was encouraged to also supply engine blocks to General Motors, Chrysler and Volkswagen as well.
Now those engine blocks are less expensive than any available in the United States, Mr. Garza Martinez says, in part because Cifunsa's 2,000 employees are paid much less than their American counterparts.
''We aren't able to make breakthroughs in engine block technology,'' Mr. Garza Martinez said. ''But when others introduce improvements, we are now in a position to apply them quickly to our operation. And we now have in our hands the Fiat process.''
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I asked her to share this letter with our board because I thought she made some fantastic points. I hope it gets some attention with the City Admin.