Albuquerque Journal (Albuquerque, NM)

Is a maquiladora viable for your firm?

Byline: Business Across the Border JERRY PACHECO For the Journal

To begin the new year, I would like to address some of the questions I was most frequently asked in 2000:

Q: I'm interested in exploring the possibility of manufacturing my products in the Mexican maquiladora system. How do I know if this is viable for me, and what should be my first step?

A: The 35-year-old Mexican maquiladora industry is often referred to as the twin-plant industry, in which foreign companies establish manufacturing operations in Mexico to benefit from the economical Mexican labor.

Typically, U.S. companies send their U.S.-manufactured production inputs or components to their Mexican maquila for final production or assembly. The finished product is then exported to its final market destination mostly in the United states for sale.

When the product is returned to the United States, tariffs (if applicable) are generally assessed only on the value-added portion of the product contributed by the maquila, not on the final value.

The maquiladora industry has evolved from simple assembly and coupon-stuffing operations to high-tech and advanced manufacturing. …

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