Mexican car-parts factories compete with other nations' lower-paid workers

Undercutting low-wage jobs
By Stephen Franklin
January 2, 2008

PUEBLA, Mexico

She came home from the auto parts plant feeling faint, the burden of being six months' pregnant and working an eight-hour shift on her feet with only a half-hour off for lunch.

She wondered what would happen if she didn't take care of herself, but said her main concern was keeping her $55-a-week job at the Johnson Controls plant, regardless that she is paid nearly 40 percent less than those working beside her.

"It is very little. But I have to support my son," said the small, almost birdlike woman in her 30s who asked that her name not be used out of fear she'd lose her job.

She is just a lowly "temporary worker" at the bottom of Mexico's auto parts industry. Such workers are growing in number as the country's parts makers struggle to reduce costs to remain competitive.

Not so long ago, Mexico floated along as a low-cost producer to the auto parts world. But now its niche is threatened by global rivals who can trump it with lower salaries or superior quality and productivity. As a result, Mexican auto parts firms keep pressing to trim costs, and Mexican workers find themselves working longer, harder and sometimes for less pay.

It's a mirror of the process that plunged some U.S. auto parts firms into bankruptcy and that wiped out 200,000 auto parts jobs in the United States in the past seven years - nearly a fifth of the nation's auto parts industry.