NOGALES, ARIZ. - When Badger Custom Molding decided to locate in Nogales in 1981, it began operations as a typical twin-plant maquiladora. It built a plant on the U.S. side of the border where it molded plastic components for its flow-measuring devices, such as water and gas meters. It shipped the components across the border to Nogales, Mexico, where they were assembled into a product that returned to the United States.
However, Badger never intended to confine its molding operation to its proprietary products.
``When the plant was built,'' said Jim Baietto, business unit manager for the Nogales operation, ``we had excess capacity. The idea was to offset our fixed costs by doing outside contracting. That was part of our plan.''
Custom molding for other companies was nothing new for Badger. The Milwaukee-based meter manufacturer, founded in 1905, had been custom contracting for outside companies since 1919. It originally made metal castings for its customers and, during World War II and the Korean War, it made bomb fuses for the U.S. military.
Now, Badger - which has 30 injection molding machines and 100 employees - makes internal components for hard-copy plain-paper fax machines for Xerox, which has a plant in Mexico. It also makes components for Sears garage door openers and General Electric Co. power distribution equipment. All its clients are in its neighborhood.
``We don't run around the country to solicit customers from all over, unless they have an interest in border assembly,'' Baietto said.
Badger's own proprietary molding is shrinking because of technology used in meters manufactured by the parent firm. But even though molding for meters has declined, Badger has expanded its marketing into Mexico.To do so, it changed its Mexican assembly plant from a maquiladora to a Pitex operation, which the Mexican government allows to sell as much as 25 percent of its product to the Mexican market.
Badger is one of four companies selling meter products to the city of Mexico City.
``We mold product here, ship it to our plant across the border, where it is assembled and shipped down to Mexico City,'' he said.
Badger is one of the few custom molders in the Nogales border area. A small operator, Brumit Engineering, has two machines operating in Nogales, Mexico.
Plastics molding - except for a few proprietary molders - has not grown in Nogales like it has in El Paso, Texas.
``That's because Nogales hasn't grown,'' said Leon Smith, Badger's sales manager. ``El Paso has grown because of the growth of industry in Ciudad Ju rez [Mexico]. Those industries need plastics to support their operations in Ju rez. But Nogales in Sonora has a problem with its industrial infrastructure. The infrastructure is not there, compared with Ju rez or Tijuana, which has a tremendous amount of plastics molding. There are only about 100 industries in Nogales.''
Badger does only minimal molding - with two machines - in its assembly plant on the Mexican side of the border. It also performs pad printing there. As of now, Badger lacks potential clients in the area.
``We'd like to see some industrial growth here,'' Smith said. ``We're only working at 70 percent of capacity in our Arizona plant.''