Maquila Industry Leads Border Recovery

Due to the Coronavirus, the Maquila Industry and virtually all border companies are experiencing distress levels similar to those of 1990, 2001, and 2008.

In hindsight, we find that each recovery had visible signposts that lead to economic recovery.

The United States government is actively encouraging the return of manufacturing from China to the United States.  CNBC.com

Washington Examiner:  “Cheap manufacturing be damned’: Sentiment builds for moving U.S. companies out of China.”  Washington Examiner

Senator Marco Rubio – Corona Virus Pressures:  “You still have to be able to make things. You still have to have industry and industrial capacity as a country. And we’ve given a lot of it away.” Foxbusiness.com

Mexico and Canada Involvement:  “Manufacturers in sectors ranging from chemicals to electronics have suppliers across the continent’s national borders. The automotive industry, which halted operations weeks ago to protect workers from the Covid-19 pandemic, is also contemplating how to reboot in North America.”  Business.financialpost.com

Larry Kudlow-Forbes.com:  “Pay The Moving Costs’ Of American Companies Leaving China.” “Kudlow told one of the people in attendance, who had asked about America’s over-reliance on China, what could be done to change the commercial relationship post-pandemic.”  Forbes.com.

New York Times: “Now companies in a number of industries are reducing their exposure to China.” New York Times

These are only a few of the signposts emerging from the fog of a global crisis that map the pathway to a border economic recovery being lead by the Maquila Industry.

Here is how we see it developing:

  • Increasing numbers of U.S. manufacturing companies recognize that there is a movement to return manufacturing to North America from China for all of the reasons described above.
  • Encouragement from both federal and state governments, coupled with economic savings for manufacturing companies, will energize this movement.
  • Many U.S. companies will find higher costs of U.S. labor that, in some cases, may price their products out of the markets.
  • These companies will seek lower-cost labor just south of the border.
  • The Maquiladora Industry will, once again, lead the border regions to economic recovery.

The Tecma Group of Companies has developed methods that will assist companies now manufacturing in China to return to North America.