EL PASO, TEXAS - The growth of plastics operations in the El Paso/Ciudad Ju rez, Mexico, area has been breathtaking, according to Bob Cook, senior vice president of the economic development division of the Greater El Paso Chamber of Commerce. According to the chamber, there are about 950 molding presses in the area, some with as much as 1,500 tons of clamping force. About 2,270 employees work in plastics manufacturing. The area produces more than $100 million in plastics components. It assembles more than $200 million worth of plastics components into finished and semi-finished goods. Local molders process more than $40 million in plastic resins.
There are 32 proprietary molders in the area, making things such as parts for connectors, electronic components for automobiles, vacuum cleaners, outboard motor components, home stereos and toys. The parent companies include such big names as Chrysler Corp., Eureka Manufacturing Co. Inc., Ford Motor Co., General Instrument Corp., General Motors Corp., Hoover Co., Procter-Silex Inc., Siemens Corp., Tonka Corp. and United Technologies.
There also are 20 custom plastics manufacturers - injection molders, extruders, rotational molders, blow molders and extrusion blow molders.
Only five custom operators are on the Mexican side of the border.
``Because plastic molding, by and large, is very capital-intensive, the cost to manufacture a plastic component will be virtually identical between Ju rez and El Paso,'' he said. ``The infrastructure on the United States' side is a little bit more advanced than what you find across the border in Mexico.''
And, despite the lower labor cost, Cook points out that there is ``a more stable work force on this side of the border than on the other side.'' Using lower-cost labor is advantageous ``if you're manufacturing a component which has a high number of secondary operations to it - where you have to be trimming flash or doing pad printing.''
``Any type of operations that require a certain amount of hand work - that's where it makes more sense to put a plastic operation'' in Mexico, he said.
No doubt, labor costs are low on the Mexican side.
The minimum wage for the border region is 22.6 pesos a day, Cook said. That's a little more than $3. When all the government-mandated benefits are added to the wage, Cook says the total is equal to about 64 cents an hour.
``But I don't know of any company that is paying only the minimum wage. With incentives, it gets up to about $1.50. Of course, that's still pretty competitive on a world scale.''