SAO JOSE DOS CAMPOS, BRAZIL - Brazilians refer to the impact of the Mexican peso crisis on their own economy as ``the tequila effect.'' Ironically, the success of one U.S.-owned Mexican plastics molding and camera-assembly operation has helped apply a double-shot of the depressant to Kodak Brasileira Comercia de Industria Ltda.'s molding and former camera-assembly facility in SÃo Jose Dos Campos. And the result for the Brazilian operation has been sobering.
As manufacturing manager, Jose Itacir Rompe oversees plastics molding and tooling production in roughly 32,000 square feet of what still is known internally as the ``camera building,'' even though workers haven't assembled a camera there since 1993, or molded camera components there for more than a year.
Kodak Brasileira's 120 plastics-related employees and 27 injection molding machines, which have clamping forces of 28-300 tons, now make 50 different custom products for more than a dozen outside customers. They turn out, among other things, flashlight parts for nearby Panasonic, automotive air conditioning components for France's Valco, glue-stick canisters for Germany's Henkel, television picture-tube components for Dutch giant Philips, cosmetic bottle caps for a Brazilian firm, and even handgun grips for another local company.
The workers still make a few photographic-related products: polystyrene film spools, high density polyethylene film canisters, and low density PE canister lids. Rompe said they make about 1 million film canisters per month. But that is where the camera connection ends.
Kodak decided in 1993 to shift camera assembly from SÃo Jose dos Campos to Manaus, an economic-incentive-laden manufacturing and assembly center established by the Brazilian gov-ernment in the country's rugged Amazon jungle interior. But last year, the company shut down camera assembly in Manaus, too, and shifted those operations to its 6-year-old Monterrey, Mexico, facility.
Then last year, the camera molding business from SÃo Jose dos Campos also moved to Monterrey, where Kodak now makes all of its 35-millimeter Cameo cameras for markets worldwide.
The production moves made sense. After all, Brazil is not a large camera market - cameras and film processing are exorbitantly expensive - whereas North America is a huge photographic market. The adoption in January 1994 of the North American Free Trade Agreement, which lowered trade barriers between Mexico and the United States and Canada, sealed the deal.
But Kodak Monterrey's gain has been Kodak Brasileira's loss.
Rompe, a 15-year Kodak veteran who started with the firm in Brazil as a quality engineer, has scrambled to keep the production pipeline full with customjobs, and has been relatively successful.
Custom work now accounts for about three-quarters of the plant's molding work, and the machines run three shifts, around the clock, five days a week, processing 132,000-154,000 pounds of resin per month.
But the rest of the plant, which is ISO 9002-certified, has not fared as well. A large part of the roughly 64,500 square feet formerly devoted to camera assembly now is eerily dark. Part of the space is being used, at least temporarily, to refurbish used Kodak photocopying machines; another corner is filled with empty X-ray film boxes.
In total, Rompe said, about half of the 161,500-square-foot complex is standing empty.
The plant's metal-machining presses have enough work to keep them busy for about 60 machine hours a month; about 3 percent of their 2,000-machine-hours-per-month capacity. Rompe said that operation is likely to be closed at year's end.
Rompe doesn't complain. But he does worry: ``We fight to keep this business profitable. We're marginally profitable.''
But, he concedes, ``in this type of situation, it's very hard to justify captive investment ... or buying new machines.'' There has been no significant investment in expansion for some time, and none is likely - just money for maintenance.
With little guaranteed business from captive or proprietary product lines, Rompe understands that long-term planning is difficult. For now, one of his biggest challenges is keeping up the morale of employees.
``It is a concern,'' he said. ``You have to talk to them several times a week to keep them encouraged.''
And it is because of his solid core of qualified workers that he most wants to keep the plant running, and the staff together.
But only time will tell.
``The future of the business here is not clear,'' admits the soft-spoken Rompe.
``It's like a friend of mine says: `You are on a bridge in a fog, and cannot see what's on the other side.' ''