How Does the Global Economy Effect Mexican Craftsmanship?
J.L. Rocha Collections
How the Global Economy Affects Mexican Craftsmanship:
J.L. Rocha Values
According to a recent article from Forbes Mexico: more than 9,000 Million Dollars will be invested through fixed assets into the manufacturing and export manufacturing industries. According to the Consejo Nacional de la Industria Maquiladora y Manufacturera de Exportación. This investment will be spread across production lines, plants, and factories in Mexico. According to the organization: '
“In 2024, a quarter of the announced foreign direct investment will be from companies that do not have a presence in Mexico, although it is considered that companies already established will continue with the policy of reinvesting profits and expanding their plants and production processes.”
Chairperson Humberto Martínez Cantú notes that “Relocation (nearshoring) coming mainly from Asia has put our country in the world's spotlight, taking advantage of its geographical location, its trade agreements and treaties, as well as healthy public finances, among other strengths”.
While the economic outlook of this article sheds a positive light, there are important factors that should be taken into account when considering craft, and specifically: Mexican craftsmanship in leather. This article will cover the concerns and important focal points that should be prioritized to make sure these foreign investments are more helpful than hurtful.
Handmade Leather Goods
The bedrock of history for Leon, Guanajuto
What is a Maquiladora?
One key element to this article is understanding What is a Maquiladora?: “A maquiladora, or maquila, is a word that refers to factories that are largely duty free and tariff-free. These factories take raw materials and assemble, manufacture, or process them and export the finished product.” (Source) They are important because “Maquiladoras allow companies to capitalize on the less expensive labor force in Mexico and also receive the benefits of doing business in the United States.” (source)
Maquiladoras are controversial modalities of crafting, because those who manage them typically affect their workers through the lack of investment toward the quality of workers environments and resources. They can be beneficial, well executed, and create opportunity only if the owners have the means and motivations to do so. We strive to work exclusively with ethical practices, this is why we invest specifically in a smaller teams with better working conditions, an emphasis on quality, and foundation of pride in the work being done. Sadly, we cannot say the same for everyone crafting leather and leather goods in Leon, Guanajuato.
The Benefits of Foreign Investment in the Maquiladora Industry
A larger role in global affairs: Foreign investment in the Maquiladora industry can is tied to the relevancy of Mexico geographically. Larger companies that manufacture overseas may see benefits from near-shoring: “a business strategy that involves companies shifting their manufacturing and production operations closer to their main markets” (source) Mexico’s proximity to the United States and Canada make it a prime location for investment in manufacturing, and represent a larger global economic relevancy.
An increase in economic opportunity: Mexico has already seen foreign investment in manufacturing that has created additional opportunities for individuals across multiple industries. The growth of jobs, the use of land, and the increased need for educated individuals creates rapid growth and opportunity that resonates across industries and lives. When done correctly, foreign investment improves local environments.
Lower cost for specialty goods: Some of the largest benefactors of near-shoring are automotive, aerospace, and technological industries. The lower cost of importation and the increased speed of the supply chain create affordability within each industry. In some cases, these savings are passed on to the consumer, and reduce the cost of goods for everyday individuals.
The Dangers of Foreign Investment in the Maquiladora Industry
Overall, a lack of concern for human capital is the largest danger of foreign investment in the Maquiladora Industry: assembly, manufacturing, and processing of materials or goods requires skilled labor. Skilled labor should be respected, yet is often neglected due to a lack of concern for the individuals and prioritization of profits. In a paper for Stanford University, Stephanie Navarro uncovers that “Numerous human rights violations and health risks have been found within the maquiladoras that line the US/Mexico border.” (source)
In fact, in 2023, President of Mexico Andrés Manuel López Obrador pointed out that violence in Guanajuato is associated with high substance consumption, he also noted that “that very low salaries prevail in the maquiladora industry in the state, which causes a lot of fatigue in workers. Workers, who are forced to consume some type of drug to maintain long work hours” (source) These are the pitfalls that must be avoided through a focus on improving the conditions, skills, and opportunities available to Mexican workers as a result of these investments.
The Good News
During the press conference wherein this investment was announced, chairperson for the National Council of the Maquiladora and Export Manufacturing Industry Humberto Martínez Cantú noted “that in 2024 it wants to consolidate itself as the ‘mindufacturing’, promoting the development of human capital, training and the promotion of education to increase productivity, playing a relevant role for national and global value chains”. These are the exact values that are necessary when managing this investment from a national perspective.
Additionally, in Leon specifically: a forum titled “Nearshoring: Relocation of companies and investments for development and well-being in the new frontier" was held pointing out the opportunities of enrichment to generate models of well-being, avoiding models such as those of the maquilas by strategically utilizing these investments. The former federal representative for National Council of the Maquiladora and Manufacturing Industry Export, Alfonso Cuéllar said:
"We are seeking to guarantee that our cities, our borders, the places where investment takes place (...) be cities where investment arrives and where families arrive, who will move there all the time. group of workers, who live well, live in a decent manner, with decent salaries, with decent housing,"
This again points to a positive outlook being fostered by those in positions of power, as these investments take place, it is key for ownership and leadership within the manufacturing industry take these recommendations to heart and promote the well-being of the entire supply chain.
Closing notes:
In summary, here are the main points to recognize:
New investments into Mexican manufacturing can be a double-edge sword, promoting either the improved well being of workers, infrastructure for cities, and the quality of goods; or the continued unethical conditions, gatekeeping of knowledge, and limited wages to reduce cost.
The core consensus surrounding these investments are positive, with leadership across numerous sectors in agreement that these investments will bring additional growth to Mexico as a whole and the quality of life achievable by workers at the ground level.
Supply chain savings must be acquired through geographical and tariff based benefits, not through a lower cost work force. Leadership in the manufacturing sector will be integral to making this happen.
As a family from Leon, Guanajuato - we’ve seen how foreign investment can besmirch the name of quality craftsmanship: demanding lower costs and increased output without concern for the craftsmen. Our hope is that these investments will encourage leadership to demand more from the expertise within their organizations and as such demand more from foreign investors.
Acknowledging these potential pitfalls and historic oversights can drive a positive future for all industries. However, we promise you that our commitments will remain ever the same: a focus on promoting the high quality craftsmanship in Leon, Guanajuato by emphasizing the importance of pride in the work being done.
Thank you/Gracias