Thread: Mexico's Textile Hope Fades--FREE Trade???

Mexico's textile hopes fade
Country's clothing industry has unravelled in the face of competition
LOS ANGELES TIMES
Sunday, December 18, 2005


HUEJOTZINGO, Mexico - To see how Mexico's garment industry is stumbling against international competition, look no further than Textile City.

This modern industrial park about 65 miles east of the capital was the nation's response to the growing challenge from Asia.

The park's founders planned a specialized factory town similar to those in China, where manufacturers would cluster together. Mexican textile-makers envisioned a one-stop shop that would lower their costs, attract buyers and suppliers, and spur product innovation.

President Vicente Fox snipped the inaugural ribbon in 2002, declaring the development strategic to the country's manufacturing future.

"This industrial park represents a transcendent step, not only in the modernization of the textile sector, but ... to protect and encourage employment," Fox said of the project, which was to create 4,500 jobs.

Three years later, Textile City looks more like a ghost town than the thriving industrial hub envisioned by its creators. Smooth pavement and shiny street lights carve an incongruous path through weed-choked fields teeming with grasshoppers.

The infrastructure is in place. The textile companies are not.

Only seven of the nearly 36 entrepreneurs who committed to build factories have followed through. Some have shut down. Others are struggling to stay afloat in their old plants.

Jesus Migoya Junco invested more than $4 million to build a gleaming building filled with state-of-the art equipment in Textile City. He said he rues the day he bought into the dream.

"We were going to make a beautiful textile city like those in China and (South) Korea," said Migoya, the owner of Mygs Textiles. "It didn't work, and it's not going to.... This industry is leaving Mexico, and quickly."

The main street in Textile City - a wide, modern thoroughfare named for Esteban de Antunano, one of the founders of the state of Puebla's garment industry - was virtually devoid of traffic on a recent afternoon, save for a street sweeper and a few bored security guards on bicycles.

Migoya and the six other tenants have nicknamed the street after themselves: Martyrs of Globalization.

The shrinking of the garment trade is an old story in the United States, where domestic production has been migrating to cheaper locations around the world. Mexico was a beneficiary of that exodus, reaping investment and jobs from export plants set up primarily by American companies to serve the U.S. market.

Fueled by the North American Free Trade Agreement and a mid-1990s peso devaluation that made its exports inexpensive, Mexico's textile and apparel sector grew well into the late 1990s.

Now it is rapidly unraveling. Since 2000, Mexico has shed more than 250,000 industry jobs, nearly one-third of its textile and apparel employment. This year will mark the fifth straight year of falling clothing shipments to the United States, the destination for most of Mexico's garment exports.

Experts point to China's contrasting results. In 2002, China surpassed Mexico as the largest supplier of foreign-made apparel to the United States and continues to wrest market shares from its rival. Beijing shipped $14.6 billion worth of clothing and textiles to U.S. shores last year, nearly double Mexico's $7.8 billion.

Mexico's exports to the U.S. are down 6.3 percent in the first nine months of this year, according to the U.S. Department of Commerce's Office of Textiles and Apparel. China's shipments to the U.S. soared 61 percent over the same period.

Mexico also faces tough competition from the south. With an average hourly compensation of $2.45, Mexico's garment wages are nearly double those in the priciest parts of Central America and five times higher than in nations such as Haiti, according to U.S. government figures.

Export manufacturers looking to stay in the hemisphere "are going to Honduras, Guatemala, Nicaragua and the Caribbean because the salaries are even smaller than here," said Jose Antonio Alonso Herrero, a professor of sociology at the University of the Americas in Puebla and an expert on his country's garment industry.

Mexican clothing companies are also facing intense domestic competition. Despite duties of nearly 500 percent on some items, low-cost Chinese apparel is flooding Mexican stores and street markets, much to the chagrin of home-grown producers who allege smuggling and corruption at the nation's customs offices.

Experts have advised the industry to shift to vertical or "full-package" manufacturing, in which a company handles every aspect of apparel production, from the fabric to the finished garment. Major clothing labels and retailers worldwide increasingly are seeking such one-stop shopping from their suppliers. But the transition is proving difficult for Mexico, whose domestic industry is largely made up of mom-and-pop shops that lack significant amounts of capital.

The state of Puebla, where the city of Huejotzingo is,, has been a center of garment production since the early 1800s.

But Textile City is a warning of how quickly Mexico is losing its edge. The industrial park was the brainchild of 32 Mexican textile companies looking for a way to leverage their expertise to combat growing competition from Asia.

Fabric-makers could use their group buying power to bargain with vendors. A central marketing office was envisioned, where buyers could easily access dozens of producers cranking out miles of fabric in state-of-the-art plants. Suppliers, sewing contractors and related businesses were to set up shop nearby.

With some help from Puebla, the entrepreneurs pooled their resources to develop the industrial park. The land and infrastructure cost about $15 million, according to Migoya. But the industry has changed so quickly and sales tumbled so precipitously that most of the original partners never broke ground on their new plants.

Migoya, whose textile business was founded by his grandfather, once employed 400 workers who spun and knitted fabrics. But his work force has slumped along with sales. He sold one plant in 1999 and closed another last year. He now employs just 50 people in his highly automated plant in Textile City. He no longer makes textiles but concentrates on dying and finishing fabrics for other manufacturers.

Migoya said he lost money over the last several years and tried unsuccessfully to find a buyer. Walking away from his investment would cost him millions, so he decided to stick it out.

His perseverance has paid off. His factory floor recently was piled high with unfinished fabric. Dull, dun-colored rolls were waiting to be washed, dyed and wrapped into tight, crayonlike bolts of crazy colors - hot pink, circus-peanut orange and canary yellow.

Migoya said that his sales this year will be double what they were last year and that he will come close to breaking even, but not because of a turnaround in the industry.

"So many factories have closed that I'm getting some of that business," Migoya said. "That's no reason to rejoice, believe me."

This story can be found at: http://www.journalnow.com/servlet/Satel ... 7645507703

This is a very sad story because it displays an effort on the part of the Mexican People to do something right; invest in themselves; apply their money and energy to production of their own making....not something they robbed from the United States. I wish the man well and will pray for him and others who "stick it out".

But what the man needs to do is STAND UP FOR HIS COUNTRY!

FIRE GLOBALIST VICENTE FOX with his nose up Globalist Butt so far his face is covered.

DEMAND your people honor the United States, their neighbor and friend, and stay out of our country as this will hurt purchases of Made in Mexico.

DEMAND an end to the North American Free Trade Agreement that has done nothing for Mexico and has damaged the United States irreparably.

DEMAND withdrawal from the World Trade Organization.

DEMAND education for the Mexican People.

DEMAND innovation by the Mexican People.

DEMAND that you take matters in to your own hands; make products; buy your products; create your own economy and stop mooching and being parasites destroying the United States.

DEMAND an end to the Free Trade Agreement of the Americas.

DEMAND expertise to build an economy of your own, not cling like suckers to the teat of the United States.

DEMAND a resurrection of the Mexican Farming Industry....tell the Globalists to get the F*#$ off your land and take their sicko wacko GMO seeds with them before they totally destroy your environment.

DEMAND birth control be available to your people and that those who use it not be stigmatized.

TELL the Catholic Church....stick to your Bible, your Mass, and church business and Stay The Hell Out of Your Politics.

Mexican Poverty and the impact that has on all sectors of the Mexican economy is related almost solely to your over-population due to families ignorantly breeding children they can not support and your nation can not sustain.

Don't be a bunch of fools. Wake Up Mexico! Your future is in you, not US. Take charge of it. Be Men for cryin' out loud.

Americans are your Friends, not your Keepers.

Big Difference.

Well--CAFTA and the OTHER "FREE" Trade agreements jerked anything that NAFTA gave Mexico right out from under them. They might as well hang it up because their government is just as bent on globalization as ours is.