It might have started with dog food.
An old story has it that close to 40 years ago, the first U.S. company to locate in Mexico's foreign-trade zone — in the then-desolate border city of Ciudad Juarez — hired workers to pick the green bits from dog kibble.
The story runs counter to the remarkable growth of Mexico-transplanted companies in the maquiladora zone and the skill level of their workers.
While companies flocking to Mexico had to start somewhere, the larger issue for Mexico's maquiladora-participating companies is how long the good times will last. About 1,300 companies in Mexico's foreign-trade zones are planning on the party lasting indefinitely.
Countervailing forces could change the curve sharply. Mexico's workers have lived for generations with the notion that they cannot rise above their current financial status. There is virtually no middle class in Mexico.
With interest rates soaring above 40 percent, buying a house is almost impossible. Crime is rampant around the border, including a recent series of grisly murders haunting Ciudad Juarez. Illegal immigrants, dreaming of a better life, attempt each day to cross the U.S. border.
Which leads to another saying in Mexico: People there have an equal chance for wealth. All it takes is being born into the right family.
All of which Mexico President Vicente Fox would like to start fixing. Already, workers are buying homes in McAllen or El Paso, Texas — U.S. border towns close to the maquiladora factories.
But if Fox, a former Coca-Cola Co. executive, wants to change things, wages in Mexico could rise substantially. All of the $2.10-an-hour jobs might become a fondly remembered piece of the border's past. The area already has moved a long way from dog food in technical and engineering skill.
China and other developing countries potentially might snag more of those low-wage jobs. Although China is half a world away from the U.S. market, geographic boundaries are becoming less of an obstacle.
At an early-December trade mission to the border area organized by the Washington-based Society of the Plastics Industry Inc., a Whirlpool Corp. official in Reynosa, Mexico, said his company already plans to outsource most of its new tooling to China and Latin America.
So what is one to make of Mexico's future? The country has the advantages of being a U.S. neighbor and a NAFTA partner. It has the industrial parks in place and an aggressive new leader to take it forward.
But it also has some battles to fight. On the same trade mission, John Castany, president of the Reynosa Maquiladora Association, said that other Mexican border towns have not been as insulated from the recent economic slowdown.
“Reynosa is the only [border] city that has not lost a job,” Castany said. “Other companies have taken up the slack. It's still a booming city.”
That area has some marginal good news for now. But whether development can continue is something else again.
Plastics News senior reporter Joe Pryweller wrote this column after spending a week visiting plastics companies along the Texas-Mexico border in early December.